Vicksburg, Shreveport & Pacific Railroad v. Dennis

Mr. Justice Gray

delivered the opinion of the court. After stating the facts as above reported, he continued:

In determining whether a statute of a State impairs the obligation of a contract, this court doubtless must decide for itself the existence and effect of the original contract (although in the form of a statute) as well as whether its obligation has been impaired. Louisville & Nashville Railroad v. Palmes, 109 U. S. 244, 256, 257, and cases cited; Wright v. Nagle, 101 U. S. 791, 794. But the construction given by the Supreme Court of Louisiana to the contract relied on in the present case accords not only with its own decision in the earlier case of Baton Rouge Railroad v. Kirkland, 33 La. Ann. 622, but with. the principles often affirmed by this court.

In the leading case of Providence Bank v. Billings, 4 Pet. 514, Chief-Justice Marshall, speaking of a partial release of the power of taxation by a State in a charter to a corporation, said: “ That thé taxing power is of vital importance; that it is essential to the existence of government; are truths which it cannot be necessary to reaffirm.”. “As the whole community is inter-' ested in retaining it undiminished) that community has aright to insist that its abandonment ought not to be presumed, in a case in which the deliberate purpose oí the State to abandon it does not appear.” “ We must look for the exemption ip the language of the instrument; and' if we do not'find it there, it would be going very far to insert it by construction.” 4 Pet. 561-563.

In Philadelphia & Wilmington Railroad v. Maryland, 10 How. 376, Chief-Justice Taney said: “This court on several occasions has held, that the taxing power of a State is never presumed to be relinquished, unless the intention to relinquish is declared in clear and unambiguous terms.” 10 How. 393.

In the subsequent decisions, the same rule has been strictly upheld and constantly reaffirmed, in every variety of expression. It has been said that “ neither the right of taxation, nor any other power of- sovereignty, will be held by this court to have been surrendered, unless such surrender is expressed in terms too plain to be mistaken; ” that exemption from taxation should never be assumed unless the language used is too clear to admit of doubt; ” that “ nothing can be taken against the State by presumption, or inference; the surrender, when claimed, must be shown by clear, unambiguous language, which will admit of no reasonable construction consistent with the reservation of the power; if a doubt arise as to the intent of the legislature, that doubt must be solved in, favor of the State; ” that a State “ cannot by ambiguous language be deprived of this highest attribute of sovereignty; ” that any contract of exemption “is to be rigidly scrutinized, and never permitted to extend, either in scope or duration, beyond what the terms of the concession clearly require; ” and that such exemptions are regarded “ as in derogation of the sovereign authority and of common right, and therefore not to be extended beyond the exact and express requirement of the grants, construed strictissimi juris.” Jefferson Branch Bank v. Skelly, 1 Black, 436, 446; Gilman v. Sheboygan, 2 Black, 510, 513; Delaware Railroad Tax, 18 Wall. 206, 225, 226 ; Hoge v. Railroad Co. 99 U. S. 348, 355 ; Southwestern Railroad v. Wright, 116 U. S. 231, 236; Erie Railway v. Pennsylvania, 21 Wall. 492, 499; Memphis Gaslight Co. v. Shelby Taxing District, 109 U. S. 398, 401; Tucker v. Ferguson, 22 Wall. 527, 575; West Wisconsin Railway v. Supervisors, 93 U. S. 595, 597; Memphis & Little Rock Railroad v. Railroad Commissioners, 112 U. S. 609, 617, 618.

It is argued in support of .this writ of error, that as the exemption from taxation of the oapital stock was unqualified and perpetual, and began at the very moment of the creation of the corporation^ the further exemption of the railroad and its appurtenances, conferred in the same section, was intended to begin ■at the same moment, although limited in duration tó ten years after the completion of the road; and that the legislature, while exempting the railroad from taxation for ten years after its completion, could not have intended to subject it to taxation before its completion and while its earnings were little or nothing.

On the other hand, it is argued that the consideration of the exemption from taxation, as of all the franchises and privileges' granted by the State to the corporation, was the undertaking. of the corporation , to prosecute to completion within a reasonable time the work of building the whole railroad from the Mississippi to the Texas line; that one reason foi; defining the ex-, emption of the railroad and its appurtenances from taxation as “ for ten years after the completion of said road,” without including any time before its completion, was to secure a prompt execution of the work, and to prevent the corporation from defeating the principal object of the grant, and prolonging its own immunity from taxation, by postponing or omitting the completion of a portion of the road; and that the State had never allowed a similar exemption to take plaee, except after a railroad had been entirely finished; and this argument is supr ported by the opinions of the Supreme Court of Louisiana in State v. Morgan, 28 La. Ann. 482, 491, and in the case at bar, 34 La. Ann. 954, 958.

Each of these arguments rests too much on inference and conjecture to afford a safe ground of decision, where the words of the statute creating the exemption are plain, definite and unambiguous.

In their natural and their legal meaning, the words “ for ten years after the completion of said road ” as distinctly exclude the time preceding the completion of the road, as the time' succeeding the ten years after its completion. If the legislature had intended to limit the end only, and not the-beginning, óf •the exemption, its purpose could have been easily expressed by saying “until” instead of “for,” so as to read “until'ten years after the completion,” leaving the exemption to begin immediately upon the granting of the charter.

To hold that the words of exemption actually used by the legislature include the time before the completion .of the road would be to insert, by construction what is not to be found in the language of the contract; to presume an intention, which •the legislature has not manifested in clear and unmistakable terms,- to surrender the taxing power; and to go against the uniform current of the decisions of this court upon the subject, as shown by the cases above referred to.

The omission of the taxing officers of the State in previous years to assess this property cannot control the duty imposed by law upon their successors, or the power of the legislature, or the legal construction of the statute under which the exemption is claimed.

In the case of Morgan v. Louisiana, 93 U. S. 217, affirming the decision in 28 La. Ann. 482, neither this court nor the Supreme Court of Louisiana expressed any opinion upon the question now before us, because both courts held that, the sale of. the railroad in that case having taken place before the passage of the statute' of 1877,“whatever- rights were conferred by- a similar clause of exemption had not passed to the purchasers.

Judgment affirmed.