•247

the Brighton Railroad, inviolable by the | molested as long as he chooses, but there Federal Constitution, and if so, whether its benefits have been waived or it has been lawfully modified or repealed by virtue of the powers reserved by the Constitution or laws of New York, are questions which have been much argued at the bar. We do not deem it necessary in this case to decide those questions, and therefore put out of view many facts found in the record which were deemed by both parties to be relevant to them. We assume, for the purpose of our decision, that there was a contract exempting the Brighton Railroad from the expense of street pavements, and that the contract could not constitutionally be impaired by the state of New York, and that its benefits have not been waived.

his rights end, and he cannot, by any form of conveyance, transmit the contract or its benefits to a successor. Morgan v. Louisiana, 93 U. S. 217, 23 L. ed. 860; Wilson v. Gaines, 103 U. S. 417, 26 L. ed. 401; Louisville & N. R. Co. v. Palmes, 109 U. S. 244, 27 L. ed. 922, 3 Sup. Ct. Rep. 193; Picard v. East Tennessee, V. & G. R. Co. 130 U. S. 637, 32 L. ed. 1051, 9 Sup. Ct. Rep. 640; St. Louis & S. F. R. Co. v. Gill, 156 U. S. 619,' 39 L. ed. 567, 15 Sup. Ct. Rep. 484; Norfolk & W. R. Co. v. Pendleton, 156 U. S. C67, 39 L. ed. 574, 15 Sup. Ct. Rep. 413. But the state, by virtue of the same power which created the original contract of exemption, may, either by the same law or by subsequent laws, authorize or direct the transIt becomes, therefore, necessary to in- fer of the exemption to a successor in title. quire whether the contract has been trans-In that case the exemption is taken, not by ferred with the property of the Brighton reason of the inherent right of the original Railroad to the Rochester Railroad, the holder to assign it, but by the action of the plaintiff in error. state in authorizing or directing its transfer. As in determining whether a contract of exemption from a governmental power was granted, so in determining whether its transfer to another was authorized ог directed, every doubt is resolved in favor of the continuance of the governmental power, and clear and unmistakable evidence of the intent to part with it is required.

The Rochester Railroad was incorporated for the purpose of acquiring the property of the Brighton Railroad, which was accomplished by a lease of the property, franchises, rights, and privileges of the Brighton Railroad, followed by the purchase of its capital stock. This was done under the authority of a statute which provided that a railroad corporation, being the lessee of the property of another railroad corporation, might acquire the whole of the capital stock of the latter, and in such a case its "estate, property, rights, privileges, and franchises should vest in and be held and enjoyed by" the purchasing corporation. It is contended that the effect of the transfer under this law is to vest in the Rochester Railroad the exemption from the expense of street pavement which the Brighton Railroad enjoyed through the contract with the state of New York. This contention presents the question to be decided.

This court has frequently had occasion to decide whether an immunity from the exercise of governmental power which has been granted by contract to one has, by legislative authority, been vested in or transferred to another, and in the decisions certain general principles, which control in the determination of the case at bar, have been established. Although the obligations of such a contract are protected by the Federal Constitution from impairment by the state, the contract itself is not property, which, as such, can be transferred by the owner to another, because, being personal to him with whom it was made, it is incapable of assignment. The person with whom the contract is made by the state may continue to enjoy its benefits un

Keeping these fundamental principles steadily in mind, we proceed to inquire whether the state of New York has authorized or directed the transfer from the Brighton Railroad to the Rochester Railroad of the contract of exemption. A legislative authorization of the transfer of "the property and franchises" (Morgan v. Louisiana, and Picard v. East Tennessee, V. & G. R. Co. ubi supra); of "the property" (Wilson v. Gaines and Louisville & N. R. Co. v. Palmes, ubi supra); of "the charter and works" (Memphis & L. R. R. Co. v. Railroad Comrs. (Memphis & L. R. R. Co. v. Berry), 112 U. S. 609, 28 L. ed. 837, 5 Sup. Ct. Rep. 299); or of "the rights of franchise and property" (Norfolk & W. R. Co. v. Pendleton, ubi supra),—is not suf ficient to include an exemption from the taxing or other power of the state, and it cannot be contended that the word "estate" has any larger meaning. It is, however, argued that the word "privileges" is suificiently broad to embrace within its meaning such an exemption, and that, when it is added to the other words, the legislative intent to transfer the exemption is clearly manifested, and that the words of the law. under consideration, “the estate, property, rights, privileges, and franchises," indicate the purpose to vest in the purchasing corporation every asset of the selling corporation which is of conceivable value. There

$249

*250

1906.

ROCHESTER R. CO. v. ROCHESTER.

473 is authority sustaining this position, which | lowed the Muscogee Railroad to unite with cannot be set aside without examination. the Southwestern Railroad into one comIn the case of Humphrey v. Pegues, 16 pany, under the charter of the latter, and Wall. 244, 21 L. ed. 326, it appeared that the it was provided that "all the rights, priv charter of the Northeastern Railroad Com-ileges, and property [of the Muscogee Railpany, granted by the state of South Caro-road Company] shall be part and parcel of lina, originally contained no exemption from the Southwestern Railroad," it was held taxation, but that, by amendment to the that the immunity from taxation enjoyed charter, some years later, the real estate by the Muscogee Railroad passed with its and stock of the company were exempted property to the Southwestern Railroad. from all taxation during the continuance of In Tennessee v. Whitworth, 117 U. S. 139, its charter. Subsequently the legislature 29 L. ed. 833, 6 Sup. Ct. Rep. 649, it was granted the charter of the Cheraw & Dar- held that a statute conferring upon a raillington Railroad Company, and provided road corporation "all the rights, powers, that "all the powers, rights, and privileges and privileges" of another railroad corpogranted by the charter of the Northeastern ration, and "all the powers and privileges" Railroad Company are hereby granted to of a third railroad corporation, included the the Cheraw & Darlington Railroad Com-immunities from taxation enjoyed repany." The state of South Carolina at- spectively by the latter corporations, the tempted to tax the stock and property of ground of the decision being that an exempthe Cheraw & Darlington Railroad Com- tion from taxation is, in the common acpany, and the validity of that taxation was ceptation of the term, a privilege. the question in the case. The court held If the authority of these four cases, supthat the powers, rights, and privileges ported by some dicta which need not be granted to the Cheraw & Darlington Rail- | cited, remained unimpaired, it would justify road Company were those contained in the amendment of the charter, as well as those contained in the original charter, and said, by Mr. Justice Hunt: "All the 'privileges,' as well as powers and rights, of the prior company, were granted to the latter. A more important or more comprehensive privilege than a perpetual immunity from taxation can scarcely be imagined. It contains the essential idea of a peculiar benefit or advantage, of a special exemption from a burden falling upon others." Upon this reasoning it was held that the stock and real estate of the Cheraw & Darlington Railroad Company were exempt from taxation. See Gunter v. Atlantic Coast Line R. Co. 200 U. S. 273, 50 L. ed. 477, 26 Sup. Ct. Rep. 252.

and

In Chesapeake & O. R. Co. v. Virginia, 94 U. S. 718, 24 L. ed. 310, it was said that an act conferring upon a railroad corporation "the benefits of the charter" of another corporation which had an immunity from taxation, and "the rights, privileges, franchises, and property" of another corporation, which, when formed, would have the "rights, privileges, and franchises property" of the corporation holding the immunity, was sufficient to transfer the immunity from taxation. But this expression of opinion was unnecessary to the decision of the case, which merely decided that where a railroad corporation acquired the property of another railroad corporation, to which was attached an immunity from taxation, that immunity did not extend beyond the property thus acquired. In Southwestern R. Co. v. Georgia, 92 U. S. 676, note, 23 L. ed. 782, where a statute al

the opinion that a legislative transfer of the "privileges" of a corporation includes an exemption from the taxing or other governmental power granted by a contract with the state. But other and later cases have essentially modified the rule which may be deduced from them.

In the case of the Chesapeake & O. R. Co. v. Miller, 114 U. S. 176, 29 L. ed. 121, 5 Sup. Ct. Rep. 813, it was held that the foreclosure of a mortgage on railroad property under the provisions of a statute which authorized the purchaser under a foreclosure sale to become a corporation, and provided that it should""succeed to all such franchises, rights, and privileges" as were possessed by the mortgagor company, did not vest in the purchasing corporation an immunity from taxation.

In Picard v. East Tennessee, V. & G. R. Co. 130 U. S. 637, 32 L. ed. 1051, 9 Sup. Ct. Rep. 640, Mr. Justice Field, in delivering the opinion of the court, said: "The later, and, we think, the better, opinion, is that unless other provisions remove all doubt of the intention of the legislature to include the immunity in the term 'privileges,' it will not be so construed. It can have its full force by confining it to other grants to the corporation."

In Wilmington & W. R. Co. v. Alsbrook, 146 U. S. 279, 36 L. ed. 972, 13 Sup. Ct. Rep. 72, Mr. Chief Justice Fuller, in delivering the opinion of the court, said, on page 297, L. ed. page 979, Sup. Ct. Rep. page 77: "We do not deny that exemption from taxation may be construed as included in the word 'privileges,' if there are other pro

visions removing all doubt of the intention of the legislature in that respect."

In Keokuk & W. R. Co. v. Missouri, 152 U. S. 301, 38 L. ed. 450, 14 Sup. Ct. Rep. 592, Mr. Justice Brown, in delivering the opinion of the court, said: "Whether, under the name 'franchises and privileges,' an immunity from taxation would pass to the new company, may admit of some doubt, in view of the decisions of this court, which, upon this point, are not easy to be reconciled."

a former corporation does not include an immunity from taxation.”

We think it is now the rule, notwithstanding earlier decisions and dicta to the contrary, that a statute authorizing or directing the grant or transfer of the "privileges" of a corporation which enjoys immunity from taxation or regulation should not be interpreted as including that immunity. We, therefore, conclude that the words "the estate, property, rights, privileges, and franchises" did not embrace within their meaning the immunity from the burden of paving enjoyed by the Brighton Railroad Company. Nor is there anything in this, or any other statute, which tends to show that the legislature used the words with any larger meaning, than they would have standing alone. The meaning is not enlarged, as faintly suggested, by the expression in the statute that they are to be held by the successor "fully and entirely, and without change and diminution,"-words of unnecessary empha sis, without which all included in "estate, property, rights, privileges, and franchises" would pass, and with which nothing more could pass. On the contrary, it appears, as clearly as it did in the Phoenix Fire Insurance Company Case, that the legislature intended to use the words "rights, franchises, and privileges" in the restricted sense. The law under which this transfer was made was enacted in 1867 and amended in 1879. In 1869 an act was passed authorizing the merger and consolidation of railroad corporations (chap. 917, Laws of 1869), which provided that, upon the consolidation, "all and singular the rights, privileges, exemptions, and franchises should be transferred to the new corporation." In 1876 an act was passed (chap. 446, Laws of 1876) which authorized the purchasers of the rights, privileges, and franchises of railroad corporations (except street railroad corporations) under a foreclosure sale to become a corporation, and thereupon have “all the franchises, rights, powers, privileges, and immunities" of the corporation whose property was sold. The omission in the statute under consideration of the words

These conflicting views were before the court in Phoenix F. & M. Ins. Co. v. Tennessee, 161 U. S. 174, 40 L. ed. 660, 16 Sup. Ct. Rep. 471. The plaintiff in error in that case claimed to have an immunity from taxation by virtue of a provision in its charter granting it "all the rights and privileges" of the De Soto Insurance Company, which had an immunity from taxation by virtue of a provision in its charter granting it "all the rights, privileges, and immunities" of the Bluff City Insurance Company, whose charter contained an expressed immunity from taxation. Mr. Justice Peckham, in delivering the opinion of the court, stated the question for decision in these words: "Is immunity from taxation granted to plaintiff in error under language which grants 'all the rights and privileges' of a company which has such immunity ?" Much significance was given to the fact that the word "immunity," which clearly includes an exemption, was used in the charter of the De Soto company, and not used in the charter of the plaintiff in error, granted seven years later. But the decision was not rested on this circumstance, although the omission was thought to cast a grave doubt upon the plaintiff's claim. The opinion reviews all the cases, cites the foregoing quotations from the opinions of Mr. Justice Brown, Mr. Justice Field, and of the Chief Justice, and, after saying: "There must be other language than the mere word 'privilege,' or other provisions in the statute removing all doubt as to the intention of the legislature before the exemption will be admitted," concludes that: "If this were an original question we should have no hesita- "exemptions" or "immunities," either of tion in holding that the plaintiff in error which would be apt to transfer the imdid not acquire the exemption from taxation munity claimed, is significant, in view of claimed by it, and we think at the present the fact that each of these words was em time the weight of authority, as well as theployed by the legislature about the same better opinion, is in favor of the same conclusion which we should otherwise reach."

In Gulf & S. I. R. Co. v. Hewes, 183 U. S. 66, 46 L. ed. 86, 22 Sup. Ct. Rep. 26, Mr. Justice Brown, in delivering the opinion of the court, said, citing this case as authority: "The better opinion is that a subrogation to the 'rights and privileges' of

time in other statutes dealing with the transfer of corporate property, and raises a doubt of the intention of the legislature, which, in cases of the interpretation of a statute claimed to devest the state of a governmental power, is equivalent to a denial.

The conclusion that the exemption of the

Brighton Railroad did not accompany the transfer of its property to the Rochester Railroad is reached by another and entirely independent course of reasoning, based upon a consideration of the law under which the Rochester Railroad was incorporated. That was the general incorporation law of 1884. Every corporation incorporated under it was made "subject to all the liabilities imposed by the act" (§ 1), and directed to keep the street surface about and between its tracks "in permanent repair" (§ 9), which, as held by the state court, includes the duty of laying such pavement as is in controversy here. We follow the construction by that court of § 9 so far as it holds that that The foregoing considerations would be section applies to all tracks, whether con- conclusive of the case were it not that the structed under this law or any other law, plaintiff in error takes another position, owned and operated by a corporation in which, if tenable, would avoid the result corporated under it. Whether the section reached by either course of reasoning. It applies, or constitutionally can apply, to a is insisted that this is not a case of transcorporation not deriving its powers from fer of an exemption; that the rules governthe act of 1884, in respect of tracks not con- ing transfer are not applicable here; that structed under its provisions, it is not the Brighton Railroad has not ceased to necessary for us to consider. There may exist as a corporation; that it has been have been a saving of the rights of such merely joined by merger with the Rochester corporations under § 18. That question | Railroad, which controls it by stock holdings, would be presented if the Brighton Rail- and operates it by virtue of its franchises; road, instead of a successor in title, were and that, therefore, the Rochester Railroad claiming an exemption. Here a corporation may claim and enjoy the exemption of the deriving its right to exist under the act of Brighton Railroad in its behalf in respect of 1884 is asserting an exemption from a duty its property. In support of this view imposed upon it by the law which created counsel cite Tomlinson v. Branch, 15 Wall. it. The authorities are numerous and con- 460, 21 L. ed. 189; Central R. & Bkg. Co. v. clusive that no corporation can receive, by Georgia, 92 U. S. 665, 23 L. ed. 757; Tennestransfer from another, an exemption from see v. Whitworth, ubi supra. These cases taxation or governmental regulation which hold that where corporations are united in is inconsistent with its own charter or with such manner that one continues to exist as the Constitution or laws of the state then a corporation, owning and operating its applicable; and this is true, even though, property, by virtue of its own charter, the under legislative authority, the exemption corporation thus continuing to exist still is transferred by words which clearly in holds its immunities and exemptions in reclude it. Trask v. Maguire, 18 Wall. 391, spect of the property to which they apply. 21 L. ed. 938; Shields v. Ohio, 95 U. S. 319, But the cases have no application here. It 24 L. ed. 357; Maine C. R. Co. v. Maine, 96 may well be that a proceeding for condemU. S. 499, 24 L. ed. 836; Atlantic & G. R. Co. nation of property, begun by the Brighton v. Georgia, 98 U. S. 359, 25 L. ed. 185; Railroad, would not abate by reason of its Louisville & N. R. Co. v. Palmes, 109 U. S. consolidation with the Rochester Railroad, 244, 27 L. ed. 922, 3 Sup. Ct. Rep. 193; as held in [Re New York Elev. R. Co.] 43 N. Memphis & L. R. R. Co. v. Railroad Comrs. Y. S. R. 651, 17 N. Y. Supp. 778, Affirmed in (Memphis & L. R. R. Co. v. Berry) 112 U. 133 N. Y. 690, 31 N. E. 627. An examinaS. 609, 28 L. ed. 837, 5 Sup. Ct. Rep. 299; tion, however, of the statute under which St. Louis, I. M. & S. R. Co. v. Berry, 113 the union of the two corporations was made, U. S. 465, 28 L. ed. 1055, 5 Sup. Ct. Rep. 529; and the transactions by which the union. Keokuk & W. R. Co. v. Missouri, 152 U. S. was accomplished, shows that the Brigh301, 38 L. ed. 450, 14 Sup. Ct Rep. 592; Nor-ton Railroad has ceased to exist as a folk & W. R. Co. v. Pendleton, 156 U. S. corporation. The Rochester Railroad first 667, 39 L. ed. 574, 15 Sup. Ct. Rep. 413; took a lease of the Brighton Railroad, apYazoo & M. Valley R. Co. v. Adams, 180 U.parently for the purpose of bringing itself 8. 1, 45 L. ed. 395, 21 Sup. Ct. Rep. 240; Grand Rapids & I. R. Co. v. Osborn, 193 U. S. 17, 48 L. ed. 598, 24 Sup. Ct. Rep. 310; San Antonio Traction Co. v. Altgelt, 200 U. S. 304, 50 L. ed. 491, 26 Sup. Ct. Rep. 261.

The principle governing these decisions,, so plain that it needs no reasoning to sup port it, is that those who seek and obtain* the benefit of a charter of incorporation must take the benefit under the conditions and with the burdens prescribed by the laws then in force, whether written in the Constitution, in general laws, or in the charter itself. The Rochester Railroad, therefore, having accepted its charter under a law which imposed upon it the duty of laying pavements, is bound to perform that duty, even in respect of tracks which, while owned by a predecessor in title, would have been exempt

within the provisions of the act of 1879. Then all the stock of the latter corporation was acquired by exchange of shares of stock of the former corporation. Then a certifi cate of the transfer of stock was filed with

Thereupon, by APPEAL from the Circuit Court of the

United States for the District of Idaho to review a decree sustaining the validity of a prior decree set up in the bill as the basis of title in suit. Dismissed for want of jurisdiction.

Statement by Mr. Justice Day:

the secretary of state. operation of the law, the "estate, property, rights, privileges, and franchises" of the Brighton Railroad vested in the Rochester Railroad, to be thereafter controlled by the Rochester Railroad in its own corporate name. The law does not expressly dissolve the selling corporation, but it leaves it without stock, officers, property, or franchises. A corporation without shareholders, without officers to manage its business, without property with which to do business, and without the right lawfully to do business, is dissolved by the operation of the law which brings this condition into existence. Maine C. R. Co. v. Maine; Keokuk & W. R. Co. v. Missouri; and Yazoo & M. Valley R. Co. v. Adams, ubi supra. The judgment of the Supreme Court of Mining & Smelting Company, and complainNew York is, therefore, affirmed.

Mr. Justice White concurs in the result.

(205 U. S. 225)

EMPIRE STATE-IDAHO MINING & DEVELOPING COMPANY and Federal Mining & Smelting Company, Appts.,

KENNEDY J. HANLEY. Appeal-direct review of decree of circuit court-when jurisdiction is in issue.

The defendant in error, complainant below, brought suit in the circuit court of the United States for the district of Idaho against the Empire State-Idaho Mining & Developing Company and the Federal Mining & Smelting Company, appellants herein. The bill, filed July 27, 1904, alleged diversity of citizenship as the ground of jurisdiction, and averred that the Empire State-Idaho Mining & Developing Company, the Federal

ant are the owners and possessors, as tenants in common, of the Skookum mine and mining claim and the ores therein contained, situated in Yreka mining district, Shoshone county, Idaho. The complainant was al leged to be the owner of an undivided oneeighth interest in the fee thereof, and the Empire State-Idaho Mining & Developing Company the owner of the undivided seven eighths of said mine and claim.

There are other allegations, not necessary to be here set out, and then, in the eighth paragraph of the bill, it is alleged: 1. A case cannot be brought up to the "8. That prior to May 17, 1902, the deSupreme Court of the United States by fendant Empire State-Idaho Mining & Dedirect appeal from a Federal circuit court,veloping Company extracted from said mine, under the act of March 3, 1891 (26 Stat. at through said tunnels, large quantities of L 827, chap. 517, U. S. Comp. Stat. 1901, p. 488), § 5, as one in which the jurisdiction ore, and sold the same, and received all of of the court is in issue, where the juris- the proceeds thereof, and paid no part of the diction challenged is not that of the court same to complainant; that complainant rendering the decree from which the appeal brought suit on March 19, 1899, in the is taken, but is that of the court which renUnited States circuit court, district of dered a former decree, which is set up in Idaho (a court having jurisdiction of the the bill as the basis of the title in suit. parties and subject-matter), against said deAppeal-direct review of decree of circuit fendant and Charles Sweeny and F. Lewis court case involving construction or ap- Clark, to recover his share of the proceeds, plication of Federal Constitution. and to quiet his title to said mine and ore bodies; and in said suit recovered a decree against said defendant Empire State-Idaho Mining & Developing Company, duly given and made in said United States circuit court at Moscow, Idaho, on or about Novem.

2. A case in which the contention is made that the decree which is the basis of suit is void as violating the right, under the Federal Constitution, to a jury trial and to due process of law, does not involve the construction or application of such Constitution, within the meaning of the act of March 3, 1891, § 5, authorizing direct appeals from the circuit or district courts to the Federal Supreme Court, where the real issue as to such prior decree was whether it was res judicata between the parties, or, as is contended by the appellants, was ren--day of November, 1902, recorded in Shodered without jurisdiction.

[No. 206.]

ber 17, 1902, for the sum of one hundred seventy-five thousand dollars ($175,000), and which decree quieted the title of this complainant to said one-eighth interest in said claim and ore bodies, a certified and attested copy of which decree was, on the

shone county, Idaho, and the amount decreed to complainant therein remains unpaid and unsatisfied, excepting the sum of

Argued February 1, 1907. Decided March $5,523.42; that, as the result of an appeal

25, 1907.

from said decree by complainant, the same