State v. Northern Central Railway Co.

Robinson, J.,

delivered the opinion of the Court.

The Baltimore and Susquehanna Railroad Company was chartered in 1821, for the purpose of constructing a railroad from the City of Baltimore to the Susquehanna river, with a capital stock of $1,000,000, and with power to increase the stock'to $2,000,000.

By the Act of 1854, chapter 250, the stockholders of said company were authorized to unite and consolidate with “The York and Maryland Line Railroad Company,” “ The York and Cumberland Railroad Company” and “The Susquehanna Railroad Company,” corporations chartered by and lying in the State of Pennsylvania, so as to *161form one corporation, to be called “The Northern Central Railway Company,” on such terms and conditions, and conformably to such agreements and regulations as the said several companies might respectively determine and adopt, subject, however, to tlie following, among other conditions set forth in said Act:

That all laws made in reference to the Baltimore and Susquehanna Railroad Company, not repealed or modified by the Legislature of Maryland, should be binding and operative upon the said consolidated company, so far as its property or operations were within said State, and so far as said laws were applicable to, and consistent with, the new organization of the said consolidated company.

That the said consolidated company should have the power, from time to time, to establish its capital stock to an amount not exceeding eight millions of dollars.

That the said company should possess all the corporate powers and privileges, and be subject to all the duties and obligations, not inconsistent with the Act and its general intent, which were expressed in the charter granted to the Baltimore and Susquehanna Railroad Company, or in the supplements to that charter.

The Act further provided that it should go into effect whenever the several corporations had agreed to consolidate their several companies into one, and had agreed upon the terms and conditions of such consolidation, and had made a full report thereof, duly certified, to the Governor of Maryland, to be recorded in the office of the Secretary of State.

Rower to unite and consolidate with the Baltimore and Susquehanna Railroad Company was also granted to the three Pennsylvania companies by the Legislature of that State.

The Act of 1854 was accepted by the stockholders of the Baltimore and Susquehanna Railroad Company, and articles of union were executed, by which all the property, rights, *162privileges and immunities belonging to tbe said several companies, were transferred to tbe new company.

By the 20th section of the Act of 1827, ch. 72, which was the charter of the Baltimore and Susquehanna R. R. Company, it was* provided that the shares of the capital stock of the said company should be deemed and considered personal estate, and be exempt from the imposition of any tax or burthen.

It is claimed by the appellee, that as the Maryland Act of 1854 provides that the Northern Central Railway Company should possess the corporate powers and privileges granted to the Baltimore and Susquehanna Railroad Company by the Act of 1827, it follows that the capital stock which the Northern Central Railway Company was authorized to issue under the Act of 1854, is exempt from taxation ; and that inasmuch as these shares of stock represent all the property of the company, such property is in every form also exempt from taxation.

Conceding this to be true, and conceding also, that the Legislature had the power, under the Constitution of this State, to exempt the shares of stock and property of the appellee from the imposition of any tax or burthen, questions unnecessary to be decided in the view we take of this case, the question is whether the exemption thus claimed is beyond the power of the Legislature to repeal?

There is no provision in the Act of 1827 incorporating the Baltimore and Susquehanna Railroad Company, nor in the Constitution then in force in this State, nor was there any prior general law, reserving to the State the right to amend, alter or repeal the charter thus granted'- to the company. The charter must therefore be regarded as an executed contract between the State and the corporators, and within the protection of the Constitution of the United States, which ordains that no State shall pass any law impairing the obligation of contracts. Miller vs. State, 15 Wallace, 488.

*163So long then, as the Baltimore and Susquehanna Railroad Company existed as a corporate body, exercising the rights and privileges vested in it under its charter, the Legislature possessed no power to subject the shares of its stock to the imposition of any tax or burthen. But by the Act of 1854 the stockholders of said company were authorized to unite and consolidate with the three Pennsylvania companies, so as to form a new company, to he called the Northern Central Railway Company. This Act was accepted by the stockholders, and in pursuance of its provisions articles of union were executed. It is clear then that under the operation of this Act, and under the articles of union above referred to, the Baltimore and Susquehanna Railroad Company was by due authority of law merged in the Northern Central Railway Company. To this new company it had transferred all its rights and property — it had extinguished its capital stock — its board of directors had ceased to exist; and all its corporate powers and privileges, by the express terms of the Act of 1854, became vested in the consolidated company. The merger was complete and absolute, and the Baltimore and Susquehanna Company, as a corporation, ceased to exist. In its place, and in the place of the three Pennsylvania companies, a new corporation was created. The corporate rights and privileges formerly belonging to the Baltimore and Susquehanna Company were, it is true, vested in the new company, and the provisions of the Act of 1827, incorporating the original company, were to that extent embodied in, and re-enacted by, the Act of 1854. But the ]'ights and privileges thus conferred, became new and special grants to the Northern Central Railway Company, dating from the period when the Act of 1854 went into operation.

Other rights and privileges were also granted to the corporation thus created — the power to make and use a common seal — to elect a hoard of directors — to increase its capital stock to eight millions of dollars — to issue bonds *164convertible into stock, and in the language of the Act, to make suck provisions and regulations as may be necessary to create and establish said consolidated company.

In no sense then, can it be said that the appellee was created by the articles of union, executed by the respective companies.

The stockholders of the Baltimore and Susquehanna Company were authorized by the Act of 1854, to consolidate with the Pennsylvania companies, and the acceptance by them of this Act, and the execution of articles of union were conditions precedent to the incorporation of. the new company, but when these conditions were complied with, the appellee as a corporation, derived its existence, and was in terms created by the operation of the Act of 1854. Now, when this Act was passed, the Constitution of 1850, was in force in this State, which ordained:

“That corporations may be formed under general laws, but shall not be created by special Act, except for municipal purposes ; and in cases where in the judgment of the Legislature, the object of the corporation cannot be attained under general laws. All laws ahd special Acts pursuant to this section, may be altered from time to time or repealed,” &c. Sec. 47, Art. 3. The Constitutions of ■1864 and 1867, subsequently adopted in this State, each contains a similar provision.

We cannot overlook the reasons which led to the adoption of these provisions in the organic law of the State. The power of the Legislature to alter or repeal a charter unconditionally granted to a private corporation, was no longer an open question ; and it had become settled law, that unless there was a reservation either in the charter, or in a general law or the State Constitution, of the right to modify or limit the nature of the contract, the Legislature possessed no power to amend or repeal such charter^ against the consent, or without the default, of the corporation, judicially ascertained and declared. Miller vs. The State, 15 Wallace, 488.

*165The object of this provision in the Constitution of 1850, was to preserve to the State, control over its contracts with corporations, and to prevent the grant of corporate powers beyond the interference of the Legislature, should the public interests at any time require such interference. It constituted therefore a condition upon which every charter was granted and held, and qualified to that extent, the contract between the State and the corporators.

The appellee having derived its charter under the Act of 1854, when the Constitution of 1850, was in force, and the exemption from taxation claimed, being a part of such charter, the power of the Legislature to repeal or revoke the immunity thus granted, is, we think, too clear to be questioned. The fact that no such right was reserved in the Act of 1854, incorporating the appellee, can make no difference. The Constitution is the supreme and controlling law, and under its provisions, the right to alter, amend or repeal every charter granted by the Legislature to a private corporation is reserved as fully as if such reservation had been made in the charter itself. Miller vs. The State, 15 Wallace, 478 ; Tomlinson vs. Jessup, 15 Wallace, 457; Fletcher vs. Peck, 6 Cranch, 136; Terrett, et al. vs. Taylor, et al., 9 Cranch, 51.

To hold otherwise, would be to decide that the Legislature by omitting such a reservation, could confer a power beyond the interference of the Legislature, and thus exercise a power forbidden by the Constitution. The charter of the appellee must therefore be construed as if such reservation had been made in express terms by the Act of 1854. And if so, the case comes directly within the principle laid down in Washington County vs. Franklin Railroad Company, 34 Md., 160.

In accepting the Act of 1854, and in the execution of the articles of union, under the operation of which the Baltimore and Susquehanna Railroad Company, has merged and ceased to exist, the stockholders are presumed *166to have known that the corporate powers and privileges granted by that Act to the Northern Central Railway Company were subject to the provisions of section 47, Article 8, of the Constitution, and that the exemption from taxation claimed under that Act was liable at any time to he repealed by the Legislature, whenever, in its judgment, the public interests required it. Be that however as it may, it was not within the power of the Legislature under the Constitution of the State, to grant to the appellee immunity from taxation, or any other corporate privilege, beyond the power of a subsequent Legislature to repeal or revoke

This being so, the question is, whether the exemption from taxation claimed under the Act of 1854, has been repealed, and this depends upon the construction of the Acts of 1866, chap. 157, 1870, chap. 362, and 1872, chap. 234.

The Act of 1866, known as the general assessment law, provides in general terms for the taxation of all property in the State; and'repeals also, all laws exempting property from taxation.

The Act of 1870, chap. 362, provides:

“That all and every provision contained in the charter, or supplements thereto, of any- railroad company incorporated by the laws of this State, or contained in any law heretofore passed by the Legislature of this State, whereby the stock or property, real or personal, of any railroad company * * * * is exempted from taxation, he, and the same is hereby repealed.”

The Act of 1872, chap. 234, provides:

“That a State tax of one-half of one per centum, he, and the same is hereby levied annually, upon the gross receipts of all railroad companies worked by steam.”

And here we are met by the objection, that as there is no reservation in the charter of the appellee, of the right -to amend or repeal such charter, the power if it existed, *167was derived solely from the provisions of the Constitution of 1850, and, inasmuch as that instrument had been superseded by the Constitutions of 1864 and 1861, subsequently adopted in this State,- the power itself no longer existed.

The plain answer to this is, that the reservation under the Constitution of 1850, qualified and became part of the charter, as fully as if it had been incorporated in the Act itself. It was the condition upon which the charter was granted, and thus became part of the contract between the State and corporators. If then the power to alter or repeal the charter of the appellee was reserved to the State, as fully as if such reservation had been set forth in express terms in the Act of incorporation, the right to exercise this power, could not in any manner be affected by the adoption of the Constitutions of 1864 and 1861.

We come then to the question as to the effect and operation of the Acts of 1866 and 1810 and 1812.

It is unnecessary to review the many cases in which Courts have considered how far, and under what circumstances, a subsequent general Act will be held to operate as a repeal of a prior private Act. As a general rule, it may be admitted, that a general Act is not to be construed to repeal a previous particular Act, unless there is some express reference to the previous Act, or unless there is a necessary inconsistency in the two Acts. Where, however, the provisions of a general Act are entirely inconsistent and irreconcilable with the provisions of a prior private Act, the former must necessarily operate as a repeal of the latter, because it is impossible for the two Acts to stand together. Great Central Gas Consumers’ Co. vs. Clarke, 103 E. C. L., 812, and 106 E. C. L. Rep., 837; Queen vs. Champneys, 6 Com. Pleas, L. R., 393 ; Canal Company vs. Railroad Company, 4 G. & J , 112 ; Mayor of Cumberland vs. Magruder, 34 Md., 386.

In such a case, the intention of the Legislature, that the latter Act should repeal the former, appears by necessary *168implication In re London & Eastern Banking Corporation, 4 Kay. & J., 286 ; Thorpe vs. Adams, 6 Com. Pleas, L. R., 123.

Now it must be conceded, that the provisions of the several Acts above referred to, are repugnant to, and inconsistent with, the continuance of the exemption claimed by the appellee under the Act of 1854.

Not only does the Act of 1866, subject to taxation all property in the State, and repeal in general terms all exemptions heretofore granted, but the Act of 1870, ch. 362, provides that all and any provision contained in the charter, or supplements thereto, of any railroad:] company, whereby its stock or property is exempted from taxation, he, and the same is hereby repealed ; and by the 2nd section, such stock and property is subjected to taxation, for State,‘county and municipal purposes, in the same manner as the stock and property of other corporations.

The intention of the Legislature to subject all property in the State to taxation, and to repeal all exemptions granted to railroad companies, is thus expressed in language, plain and unambiguous, and the effect and operation of these Acts can admit of hut one construction.

The provisions of these Acts are repugnant to, and inconsistent with, the exemption from taxation granted to the appellee by the Act of 1854, and as these several Acts cannot stand together, the former must he construed as a repeal of the particular Act, under which the immunity now claimed by the appellee is derived.

But, admitting the Legislature had the power under sec. 47, Article 3 of the Constitution, to repeal the exemption granted to the appellee ; and that the Acts referred to, operated as a repeal of such exemption, it is contended that the tax imposed by the Act of 1872, ch. 234, on the gross receipts of the company, is in conflict with Article 15 of the Bill of Rights which declares

“ That every person in the State, or person holding property therein, ought to contribute his proportion of public *169taxes for the support of the Government, according to his actual worth in real or personal property.”

(Decided. 2nd March, 1876.)

In the case of the State vs. The Cumberland & Pennsylvania Railroad Company, 40 Md., 22, it was held that the restriction imposed by this Article of the Bill of Eights, was intended to prevent an arbitrary taxation of property according to kind and quality, without regard to value; and that under it, all taxation laid on property, must be uniform and equal. Giving full force to the construction thus placed upon the Bill of Rights, it is sufficient to say, there is nothing in the record before us, to show that the tax imposed by the Act of 1872, is unequal or unjust, or that it subjects in any manner the property of the appellee to taxation, not equally borne by other property in the State.

Being of opinion that the tax imposed by the Act of 1872, upon the gross receipts of the company is a valid tax, it is unnecessary to decide whether the exemption of the shares of stock, exempted also every species of property belonging to the appellee. In regard to this question, wearenot to be understood as expressing any opinion.

The Court erred therefore in granting the first and second prayers of the appellee, and in refusing the first and second prayers of the appellant. The several propositions presented by the other prayers of the appellant, it becomes unnecessary for us to consider.

Judgment reversed, and new trial awarded.