The original charter of the plaintiff company was granted in 1833, under the name of The Wilmington and Raleigh Railroad Company, for the purpose of building a railroad from Wilmington to Raleigh. This act also authorized the construction of branch roads. By an amendatory act in 1835 the company was authorized to construct from Wilmington either to Raleigh or "to some point at or near the Roanoke River." This election was not then made, but at some subsequent period (it does not from the pleadings appear when) it was exercised by building to Halifax in lieu of to Raleigh. By the act of 1833 a branch road could only be built after the main line reached the point of junction; but by section 3 of the act of 1835 it is provided that the company may construct branch roads, under the rules and regulations set out in the act of 1833, "either before or after they have completed the main railroad aforesaid." In 1833 the Halifax and Weldon Railroad was chartered. Its charter contained no exemption from taxation. This road was completed its whole distance from Halifax to Weldon, a distance of 8 miles, but, having no rolling stock of its own, permitted the Portsmouth Railroad Company to run its cars in 1836 over its roadbed and track. In January, 1837, the Legislature passed an act authorizing the Halifax and Weldon Railroad Company to subscribe their stock to the Wilmington and Raleigh Railroad Company, and by an agreement between the two companies, executed 14 February, 1837, this was done, it being stipulated therein (159) that "the union of the two roads" should be made at the town of Halifax or as near thereto as practicable. By the act of 1837, *Page 114 authorizing the consolidation, it is provided: "Upon the subscription of the stock held by the stockholders in the Halifax and Weldon Railroad Company, in the books of the Wilmington and Raleigh Railroad Company, all the property, real and personal, owned and held by the Halifax and Weldon Railroad Company, shall vest in and be owned and possessed by the Wilmington and Raleigh Railroad Company aforesaid, and be owned and held and possessed by the said company in the same manner that all the other property, real and personal, which has been acquired by the said company is owned, held and possessed, and the road which may have been built or partly built by the Halifax and Weldon Railroad Company shall thenceforth be deemed to all intents, as well criminal as civil, a part of the Wilmington and Raleigh Railroad." Whether the proper construction and the effect of the provision that the property of the Halifax and Weldon Railroad shall be owned, held and possessed "in the same manner" that all the other property of the Wilmington and Raleigh Railroad Company is owned, held and possessed confers on the former an irrevocable exemption from taxation is the question presented by this appeal.
By the charter of the Wilmington and Raleigh Railroad Company its main line between Wilmington and Raleigh was exempt "forever from all taxation." The power of taxation being an element pertaining to sovereignty, the power of any legislature to alienate it, so as to bind forever all future legislatures, and thus perhaps cripple or embarrass unborn generations, has been much doubted; but it has been decided by the Supreme Court of the United States that it may be done if clearly expressed, and if granted in return for an equivalent received by the State. The Legislature subsequently, as stated, authorized (160) a change of terminus from Raleigh to "some point on Roanoke River," which by the election of the company was the town of Halifax; to which point it was built and there made the union of the two roads when it absorbed the Halifax and Weldon Railroad. The Wilmington and Raleigh Railroad Company, in their agreement with the Halifax and Weldon Railroad Company, agree upon "the union of the two roads" at Halifax. The latter was "a point on the Roanoke River," and thence the Halifax and Weldon Railroad ran up the river and parallel with it to Weldon. By virtue of the election made to change its terminus from Raleigh to Halifax, the plaintiff claims that the road from Wilmington to Halifax (instead of from Wilmington to Raleigh) became exempt from taxation. By the charter of 1833, while the main road between the two termini, Wilmington and Raleigh (afterwards Wilmington and Halifax), was exempted from taxation, the branch roads authorized by said acts were not exempted from taxation, as we have held in the plaintiff's appeal in this case. We think that *Page 115 the question whether the act authorizing the Wilmington and Raleigh Railroad Company to acquire the Halifax and Weldon Railroad Company exempted the property thus acquired from taxation must be answered in the negative, for several reasons:
1. Though the earnest contention that the right of taxation being an inherent right in the sovereign people, and that no temporary agency, such as a legislature, elected for a term of one year, could alienate it or any part of it in perpetuity, and that their mandate only gives power to levy a tax or exempt from taxation during their term of office and until another legislature shall act, has not been sustained by the United States Supreme Court, still it holds that the alienation of so important a right will only be valid "when the grant is clear beyond reasonable doubt." Mr. Justice Field in Delaware R. R. Tax Case, 18 Wall., 206. And unless the grant is shown "by clear and unambiguous language, which will admit of no reasonable construction (161) consistent with the reservation of the power (of taxation), the exemption claimed must be denied." Mr. Justice Gray in R. R. v. Dennis,116 U.S. 668.
2. If the act of 1837, authorizing the acquisition of the Halifax and Weldon Railroad Company's property, had the effect to create a new company, whose line became thereupon extended from Wilmington to Weldon, thereby securing the operation of a continuous road between those points, the new charter thus granted and all claims to exemption thereunder have long since expired. Such charter, if it be one, was granted 10 January, 1837, and was subject to the provisions of the general act, ratified 10 December, 1836, which provided that "No body corporate hereafter to be established in this State shall exist for a longer term than thirty years unless otherwise provided in the act creating the same." Laws 1836, ch. 10. Railroad v.Maine, 96 U.S. 499. If, however, this was not a new charter, it was not a contract, for the State received no equivalent or consideration therefor, nor any promise or obligation. It did not secure the building of a new railroad, for the building of the railroad from Wilmington to Halifax had already been contracted for by act of 1835, and the railroad from Halifax to Weldon had already been built and completed, and was being operated by the Portsmouth Railroad Company. The right granted the Halifax and Weldon Railroad Company to subscribe their stock to the Wilmington and Raleigh Railroad Company was therefore a mere privilege, a benefit sought for by them and granted by the State as a mere gratuity, and if the language used is broad enough to cover the property so transferred, with the exemption from taxation claimed under prior acts by the Wilmington and Raleigh Railroad Company, still, being *Page 116 a mere privilege or gratuity, the State possessed the right to withdraw it and to tax the transferred property, as it has since authorized (162) to be done by several acts of the Legislature. The Code, sec. 3677; Laws 1891, ch. 323, sec. 6. This has often been held. InTucker v. Ferguson, 22 Wall., 527, it is held that "An act of the Legislature exempting property of a railroad from taxation is not a contract to exempt it, unless there is a consideration for the act. An agreement where there is no consideration is a nude pact. The promise of a gratuity spontaneously made may be kept, changed, or recalled at pleasure; and this law applies to the agreements of states made without consideration, as well as to those of persons." To same effect are Rectorv. Howard, 24 How., 300; R. R. v. McGuire, 20 Wall., 36; R. R. v.Supervisors, 93 U.S. 595; Welch v. Cook, 97 U.S. 541; Morriwitz Pr. Corp., secs. 1053 and 1054. In R. R. v. Philadelphia, 101 U.S. 528, Mr.Justice Clifford, says: "Exemptions of this kind, however, are to be strictly construed, the rule being that the right of taxation exists unless the exemption is expressed in clear and unambiguous terms, and that in order that it may be effectual, it must appear that the contract was made in consequence of some beneficial equivalent received by the State, it being conceded that if the exemption was granted only as a privilege, it may be recalled at the pleasure of the Legislature." Cooley Const. Lim. (4 ed.), 342; Cooley Taxation, 146.
The Halifax and Weldon Railroad was already constructed and was being operated by the Portsmouth Railroad Company. If, therefore, the act authorizing its transfer to the Wilmington and Raleigh Railroad Company can be construed as conferring upon it an exemption from taxation, a quality which did not before attach to the transferred property, such grant of exemption was a mere privilege, not a contract with the State, and therefore revocable. This case differs fromHumphrey v. Pegues, 16 Wall., 244, for, there, no inducement had been sufficient to procure the road to be built till the exemption was (163) granted, and on the faith of that grant it was built.
3. The authority given the Wilmington and Raleigh Railroad Company to acquire this additional property would not per se exempt it from taxation, since the necessity for the passage of such act shows it was not such property as it was authorized to acquire under, nor for the purpose of, its original charter, for which it was granted, i. e., for constructing a railroad from Wilmington to Raleigh. The words in this act, that upon the acquisition by the Wilmington and Raleigh Railroad Company of the Halifax and Weldon, the road built by it from Halifax to Weldon "shall thenceforth be deemed to all intents, as well criminal as civil, a part of the Wilmington and Raleigh Railroad Company," mean simply that the railroad from Halifax to Weldon *Page 117 became fully and completely the property of the Wilmington and Raleigh Railroad Company. But that did not confer exemption from taxation, for the said company would own fully and completely its branch roads, which were not exempt. The exemption must depend upon the other words of the act, the language of which is that the property acquired from the Halifax and Weldon Railroad Company must be held "in the same manner" as the other property of the company. This does not necessarily, beyond a reasonable doubt, mean that it is clothed with the same immunity from taxation. Exemption from taxation is an immunity, not a part of the habendum. "In the same manner" doubtless referred to section 14 of the charter of the Wilmington and Raleigh Railroad Company, which specified that the property should be held in fee simple, and to the other provisions specifying the uses which the company should make of its property. R. R. v. Georgia, 92 U.S. 665.
4. If it were true, however, that "in same manner" refers to privileges and immunities granted to the company, as well as to the manner of holding its property, still, as certain of its property was exempt from taxation, and certain other of its property was not exempt (as we have held), to which class of its property does "in same manner" refer? By the settled rules of construction above quoted, the newly absorbed railroad must be assimilated to the property (164) not exempt.
5. It will be noted that the act of 1837 does not authorize the Halifax and Weldon road to be made a part of the "main line" of the Wilmington and Raleigh Road; it became the property of and a part of the Wilmington and Raleigh road; but so it would if it was acquired as a branch or connecting road. There is nothing in the act inconsistent with its being a part of a branch line, which, the year before, by the act of 1835, the Wilmington and Raleigh road had been authorized to construct "before constructing the main line." Indeed, the retention in this act of 1837 of the title "the Wilmington and Raleigh" company would indicate as much. A branch from some point on the Wilmington and Raleigh road (as chartered) to Halifax, and then extended by this purchase to Weldon (so as to connect by such branch with other roads), would not be as long a branch road as some other branch roads which this company has constructed and is now operating; nor would the fact that the company, some years later (after having elected to change its terminus to Halifax), did construct its road to Halifax, and used the Halifax and Weldon road to connect with other roads northward, make it in law a part of its "main line," so as to exempt it from taxation. We know, as a current fact, that the same company, having built a branch road from Wilson through Fayetteville *Page 118 southward, has made arrangements by which that branch road, in point of fact, will henceforth be the "main line"; but in law and in purview of its charter the "main line," so far as exemption from taxation is concerned, is restricted to the road between its termini as authorized by its charter — Wilmington and Halifax. The action of the corporation in using and operating the road from Halifax to Weldon, (165) and from Wilson to Fayetteville, as integral parts of its through line, was justified by the march of events; but that does not make these additional roads part of its "main line" from Wilmington to Halifax so as to exempt them from taxation.
That twenty years after the act authorizing the acquisition of the Halifax and Weldon road the name of the Wilmington and Raleigh Railroad Company was changed to the Wilmington and Weldon Railroad Company has no bearing on this question, though it has no doubt led to the misconception concerning it. That act (Pr. Laws 1854-55, ch. 235) has no clause of exemption. It may have made the road from Halifax to Weldon a part of the main line from Wilmington to Weldon, but it did not make it a part of the main line of the Wilmington and Raleigh road, which extended from Wilmington to Halifax, and which only was exempted from taxation. The consolidation of a railroad whose property is exempt from taxation with one whose property is not so exempt does not extend the exemption to the entire consolidated property in the absence of a clear and unmistakable provision in the act to that effect. Delaware Tax Case, 18 Wall., 206; Tomlinson v.Branch, 15 Wall., 406; R. R. v. Georgia, 92 U.S. 665.
The exemption here claimed is the perpetual exemption from all taxes, State, county, and municipal, of the railroad from Halifax to Weldon by virtue of an exemption from taxation of the road from Wilmington to Raleigh, and of the subsequent act authorizing the consolidation with it of the road from Halifax to Weldon, which latter had already been built and completed without any exemption from taxation in its charter. The act of consolidation makes no reference, as we hold, to the exemption being extended to the absorbed road, and had it done so it would have been a mere privilege, having been granted without any consideration or benefit received by the State in exchange. While the act does provide that the newly acquired property shall be to all (166) intents the property of the Wilmington and Raleigh Railroad Company, it does not make it a part of the main line, and there is nothing which shows that it was not to be used as a branch road, or a connecting road; and, indeed, the latter seems to have been the purpose, as the name of the Wilmington and Raleigh Railroad Company was still retained. If to be used as a branch or connecting road, the property clearly was not intended to be exempt. It could hardly have *Page 119 been intended to make a railroad from Halifax to Weldon a part of a main line, either from Wilmington to Raleigh, or from Wilmington to Halifax, which were the authorized termini. In the absence of a clear, unambiguous intent to extend the exemption from taxation to the railroad from Halifax to Weldon, and of any consideration or benefit derived by the State, if it was so intended, the enormous and unusual grant of a perpetual exemption from all civil dues for the maintenance of government, while claiming the benefit of the protection it extends, cannot be upheld by any surmise or inference as to the probable intention of the Legislature when it conferred upon the plaintiff company the privilege of acquiring the Halifax and Weldon road.
For these reasons we think that the judgment of the court below, so far as it holds that the line from Halifax to Weldon and the property used therewith are forever exempt from taxation, should be reversed.
The pro rata part of the rolling stock, commensurate with such part of the road proportioned to the length of the whole line operated by the plaintiff, is also liable to taxation.
As already stated in the plaintiff's appeal, the decision in R. R. v.Reid, supra, is not, as claimed, an estoppel in this case, because it could only be such as to the matter there in controversy, to wit, the taxes levied for that year (1869), the collection of which is enjoined; and, besides, the action is not between the same parties. The decision named has not the force of a precedent, because the scope of that decision did not purport to embrace the question of law which is now presented, but which was not then raised or passed upon by the court.
Error. (167)