any such there are, may be found to be covered | issued, and the mortgagee took only those work stopped in 1873, and the mortgagee could gagor took them. The title was never in the mortgagor, and when the Big Sandy Company resumed the possession of its property, under the contracts, the mortgagee was bound thereThe circuit court, in its opinion, on final hear by. If the mortgagee had, within a reasonable ing, reached the following conclusions: even if time, sought to set aside the forfeiture and to the construction contract is valid, the plaintiff be allowed the benefit of any enhancement in has no lien on the road bed or what was put the value of the property by reason of improveupon it, either by that contract cr by assesments, this might have been allowed; but as the Fion, or under any statute of Kentucky The work on the road was not commenced in good faith, within six months from July 15, 1871, under the contract of that date. Neither Poyntz nor the other parties can take advantage of his refusal to unite in the contract of January 15, 1873. Mr. Sands was authorized to make that contract, and the Great Eastern Company took possession of the Big Sandy property under it. The Construction Company had actual notice of the terms and conditions of that contract, when it entered into the construction contract. The parties making the conditional sale provided for by the contract of January 15, 1873, declared the contract to be void, according to its terms, and re-entered into possession of their property; and their right to do so was recognized by a resolution of the board of directors of the Great Eastern Company; and, as the Construction Company made its contract with petual notice of the terms and conditions of the conditional purchase from the Big Sandy own4ers, ae construction contract was subject to those terms and conditions, and the Construction Company and the Great Eastern Company are bound by thela. The grading, iron, ties, culverts, etc., and all that had become a part of the road bed of the Big Sandy road, went with it when it was retaken. The plaintiff shows no reason for not enforcing this forfeiture. If the Construction Company is to be regarded as a company distinct from the Great Eastern Company, having interests adverse to it, then, in view of the evidence, and of the principles laid down in Wardell v. R. R. Co. 103 U. S. 651 Bk. 26, L. ed. 509], the construction contract should not be enforced. The plaintiff cannot have relief in this suit, even in respect to rights of way which the Big Sandy Company did not cwn, or in respect to that part of the track which was relocated. The bill must be dismissed. In respect to the cross bill, the agreement of Jay 15, 1971, is show have been made with assent of the holders of a majority of the Bock of the Great Eastern Company. If the La guage of the mortgage embraces the proprights which the Great Eastern Company ba: at the date of the mortgage, and those subently obtained under the contract of Januar 15, 1873, still only such rights as the Great Etern Company had were conveyed; and the tree took subject to the same conditions as Renat Eastern Company. When the mortas made, the contract of July 15, 1871, had the voidable at the option of the Big Sandy rs; the contract of January 15, 1873, was de before any of the mortgage bonds were This comprehensive statement of the conclusions reached by the circuit court, as indicating the views it took of the facts and the law in this case, may be taken as an announcement of the results at which this court has arrived, in affirmance of the decree of the circuit court in all particulars. It is necessary to add only a few observations. By the terms of the contract of January 15, 1873, the purchase money of the Big Sandy property was to be paid in bonds of the County of Mason, or in cash, within specified times; and, on failure to do so, the contract was to become null and void. Mason County never delivered any bonds to the Great Eastern Company, and no payment of bonds or cash was made to the Big Sandy owners. The sale was conditional. No ownership or title passed; and it was expressly provided that until full payment should be made, no prior lien should intervene on the Big Sandy property, as against the lien of the vendors. The terms of the construction contract are inconsistent with the idea of any ownership of the constructed road by the Construction Company, or any lien on it by that Company. That Company was to have all the money, municipal bonds and property given or issued in payment of subscriptions to stock, and all stock not necessary to maintain the charter or not issued to municipal corporations for subscrip tions to stock; and also the $2,190,000 of mortgage bonds, secured by the mortgage as "a first lien;" and $1,200,000 in an equipment bond, secured by an equipment mortgage. In other words, it was to have everything except the road; and the Great Eastern Company was necessarily to have and own that, so as to be able to give a mortgage on it, as a "first lien." [95] [96] [129] Nor is there anything in the construction contract suggesting a direct Men in favor of the Construction Company. The provision for giving to that Company all the earnings of the road "during construction" and "until accepted" by the Great Eastern Company, is vague and indefinite; but it cannot be construed as giving a lien, for that would be inconsistent with the whole tenor of the instrument. Many questions were discussed by counsel at the bar, and in their briefs, and we have given attention to all the views and arguments on the part of the respective appellants; but the considerations above stated, on which the case was disposed of by the circuit court, seem to us to be controlling, and to make it unnecessary to say anything further. Decree affirmed. Mr. Justice Matthews did not sit in these cases or take any part in their decision. STATE OF TENNESSEE, Plff. in Err., v. The contract of exemption was made with the Company, and not with the stockholders, the word "Company," being used in the charter. The words "capital stock" are not used in the charter as synonymous with "shares" of stock. Morawetz, Corporations, § 83. There is no substantial distinction between "capital stock" and "capital" as used in the charter. R. R. Co. v. Gaines, 97 U S. 697 (Bk. 24. L ed. 1091); Memphis & C. R. R. Co. v. Gaines, 3 Tenn. Ch. 611; Chattanooga v. R. R. Co. 7 Lea, 561; 1 Desty, Taxation, 353; Burroughs, Taxation, § 83. Although the shares of stock and the prop erty of the Company be taxed, it yet has a valuable privilege in the exemption of the capital stock. L. N. R. R. Co. v. State, 8 Heisk. 795; State Railroad Tax Cases, 92 U. S. 603; (Bk. 23. L. ed. 663); Farrington v. Tenn. supra; 1 Desty, Taxation, 348. Mere nonuser of the taxing power by the State does not destroy it or form any reason for not exercising it. Chicago, B. & Q. R. R. Co.v lowa, 94 U. S. GEORGE K. WHITWORTH, Trustee of 155 (Bk. 24, L. ed. 94). (See S. C. Reporter's ed. 129-139.) Messrs. Ed. Baxter, and Edward H. East, for defendant in error. Mr. Chief Justice Waite delivered the opin Railroads-exemption of stock from taxation-ion of the court: 1. The charter exemption from taxation of the 2. In construing statutes which are binding on States as contracts, the words employed, if capable of more than one meaning, are to be given that meaning which it is apparent the partier intended they should have. [No. 935.] Argued Jan. 22, 1886. Decided Mar. 1, 1886. IN ERROR to the Circuit Court of the United States, for the Middle District of Tennessee. The history and facts of the case appear in the opinion of the court. See also the following and related case of Tennessee v. Whitworth. Messrs. S. Watson, J. B. Heiskell, James M. Head, B. J. Lea, Atty-Gen. of Tennessee, J. W. Baker, and S. A. Champion for plaintiff in error: This is a suit in mandamus brought by the [1 State of Tennessee, in the Circuit Court of Davidson County, against George K. Whitworth, the Trustee and Tax Collector of that County, to require him to assess for taxation the shares of stock in the Nashville, Chattanooga and St. Louis Railroad Company. After the suit had been begun in the state court it was removed by Whitworth to the Circuit Court of the United States for the Middle District of Tennessee, under the Act of March 3, 1875, chap. 137, 18 Stat. 470, on the ground that the suit was one States. arising under the Constitution of the United The case is as follows: the Nashville and Chattanooga Railroad Company, now, by consolidation with the Nashville and Northwestern Railroad Company, and a change of name, the Nashville, Chattanooga and St. Louis Railroad Company, was incorporated by the Legislature of Tennessee, December 11, 1845, to buid and operate a railroad. Section 38 of its charter is in these words: The capital stock of a corporation is a thing distinct from shares of stock, and owned by different persons. The exemption of one does "Sec. 38. The capital stock of said Company not necessarily exempt the other from tax-shall be forever exempt from taxation; and the ation. Farrington v. Tenn. 95 U. S. 679 (Bk. 24, L. ed. 559); Memphis v. Ensley, 6 Baxter, 553; Nashville Gaslight Co. v. Nashville, 8 Lea, 406; Van Allen v. Assessors, 3 Wall. 573 and People v. Comrs. 4 Wall. 258 (70 and 71 U. S. bk. 18, L. ed. 229, 344); Memphis v. Farrington, 8 Baxter, 539; 1 Desty, Taxation, 353; Burroughs, Taxation, 164, § 83. It was not the intention of the Legislature, in granting this charter, that the exemption of the capital stock should embrace the shares of stock. NOTE.-Exemption of corporation from taxation by charter. See Tucker v. Ferguson, 89 U. S. bk. 22, 805, note. See also post, p. 833. road with all its fixtures and appurtenances, including workshops, warehouses and vehicles of transportation, shall be exempt from taxation for the period of twenty years from the completion of the road, and no longer." The Act incorporating the Nashville and Northwestern Railroad Company contained a provision identical with this. The question is whether this provision has the effect of a contract by the State for the exemption from taxation in Tennessee of the shares of the capital stock of the Corporation. The capital stock was by the charter divided into shares of $25 each, to be subscribed for on books opened for that purpose. It was also provided that as soon as the requisite number of shares had been subscribed "the Nashville and Chattanooga Railroad Company shall be regarded as formed," and "the said subscribers to the stock shall form a body politic and corporate in deed and in law by the name and for the purpose" specified. Fifty cents on each share was to be paid in money at the time of subscribing. Sections 9, 12, 15, 16 and 17 are as follows: 'Sec. 9. As soon as the number of forty 31 thousand shares shall have been subscribed, it shall be the duty of the commissioners appointed to declare the same, to appoint a time for the Etockholders to meet in Nashville, and give notice thereof by publication in some of the newspapers of Nashville, at which time and place the said stockholders, in person or by proxy, shall proceed to elect the directors of the Company, and to enact all such regulations, rules and by-laws as may be necessary for the government of the Corporation and the transaction of its business. The persons elected directors at this meeting shall serve for such period, not exceeding one year, as the stockLolders may direct; and at this meeting the stockholders shall fix on the day and place or places where the subsequent elections of directCrs shall be held; and such elections shall thenceforth be annually made. But if the day of annual election should pass without any election of directors, the Corporation shall not be thereby dissolved; but it shall be lawful on Any other day to hold and make such election in such manner as may be prescribed by a bylaw of the Corporation. "Sec. 12. The board of directors shall not exceed, in their contracts, the amount of the capital of the Corporation and of the funds which the Company may have borrowed and placed at the disposal of the board; and in case they should do so, the president and directors who may be present at the meeting at which such Contract or contracts so exceeding the amount aforesaid shall be made, shall be jointly and severally liable for the excesses, both to the Contractor or contractors and the Corporation; rided, That anyone may discharge himself from such liability by voting against such contract or contracts, and causing such vote to be recorded on the minutes of the board, and givI notice thereof to the next general meeting of the stockholders. "Sec. 15. The board of directors may call for the payment of $24.50 on each share of stock in sims not exceeding $2 in every thirty days; Ponded, That twenty days' notice be given of such call in at least one public newspaper of the State in which any of the stockholders zay reside; and a failure to pay or secure to be paid, according to the rules of the Company, Any of the installments so-called, as aforesaid, All induce a forfeiture of the share or shares which default shall be so made, and all payrents thereon; and the same shall vest in and ng to the Company and may be restored to Le owner or owners by the board of directors, they deem proper, on the payment of all arrears on such shares, and legal interest thereon; or the directors may waive the forfeiture after thirty days' default, and sue the stockholders for the installments due, at their discretion. Sec. 16. The stock of said Company may be transferred in such manner and form as may be directed by the by-laws of the said Corporation. "Sec. 17. The said Company may at any time increase its capital to a sum sufficient to complete the said road, and stock it with everything necessary to give it full operation and effect, either by opening books for new stock, or by selling such new stock, or by borrowing money on the credit of the Company, and on the mortgage of its charter and works; and the manner in which the same shall be done in either case shall be prescribed by the stockholders at a general meeting; and any State or any citizen, corporation or company of this or any other State or country, may subscribe for and hold stock in said Company, with all the rights and subject to all the liabilities of any other stockholder." On the 21st of January, 1848, but oefore the Corporation was organized by the election of directors, the charter was amended as follows: "Sec. 3. Be it enacted, That the charter of the Company be further so amended that the said Company be required to estimate and pay semiannually to the several holders thereof a sum equal to 6 per cent per annum on the capital stock of said Company actually paid in, to be charged to the cost of construction; Provided, A majority of the stockholders at their first regular meeting agree thereto." The circuit court was of opinion that the shares of stock were by the charter exempt from taxation, and gave judgment accordingly. To reverse that judgment this writ of error was brought. It is apparent from the charter that the subscribers of shares and those claiming under them were to be the holders of the stock of the Corporation; and that the money paid into the treasury upon subscriptions was to be used by the Corporation in building and equipping its railroad. In this way the capital of the Corporation was to be converted into the railroad and its appurtenances. A tax upon the railroad, therefore, after its completion, is necessarily a tax upon the capital, because, practically, the capital and that into which it has been converted are the same. The railroad of the corporation may be worth more than its capital, but all its capital is in its railroad. Such being the case, the taxation of both railroad and capital would be, so far as the corporation is concerned, double taxation. In Railroad Companies v. Gaines, 97 U. 8. 697 [Bk. 24, L. ed. 1091], it was held that a provision in the charter of the Memphis and Charleston Railroad Company, precisely like that now under consideration, did not exempt the railroad of that corporation and its appurtenances from taxation after twenty years from the time of its completion, even though the capital stock of the corporation had all been invested in the railroad, because, taking the whole section together, it was apparent such was not the intention of the Legislature. The property was taxable, but the capital stock was exempt. [135] It is no doubt true that the Legislature may make a difference, for the purposes of taxation, between the capital stock of a corporation in in the hands of the corporation itself, and the shares of the same capital stock in the hands of the individual stockholders. That has often been done, and the cases are numerous where [136] 66 the exemption of shares from taxation has been | owners of the capital stock of this Corporation Returning to the charter, we find that the vest in and belong to the Company," but the In corporations four elements of taxable value are sometimes found: 1, franchises; 2, capital stock in the hands of the corporation; 3, corporate property; and 4, shares of the capital stock in the hands of the individual stockholders. Each of these is, under some circumstances, an appropriate subject of taxation; and it [137] is no doubt within the power of a State, when not restrained by constitutional limitations, to assess taxes upon them in a way to subject the corporation or the stockholders to double taxa-paid." tion. Double taxation is, however, never to be presumed. Justice requires that the burdens of government shall as far as is practicable be laid equally on all; and if property is taxed OLCE in one way, it would ordinarily be wrong to tax it again in another way, when the burden of both taxes falls on the same person. Sometimes tax laws have that effect, but if they do it is because the Legislature has unmistakably so enacted. All presumptions are against such an imposition. This brings us to an examination of the present charter to see what the Legislature has expressed its intention of doing. "The capital stock of said company" is exempt from taxation. That has been expressly enacted, and the owner or owners of the stock are necessarily relieved from all taxation on this account. The important question is, therefore, Who are the From this it is clear to us that while the money paid in by the subscribers of the shares of the capital stock of the Corporation constituted the capital of the Corporation which was to be used in building and equipping the railroad, the stock created by such subscription and payment was to belong to and remain as the property of the several holders of the sharee so subscribed and paid for. As was shown is Railroad Companies v. Gaines, above cited, the words "capital stock of said Company," and the words "the road with all its fixtures and appurtenances," were used in the charter to describe different things. The capital which, upon the payment by the subscribers, belonged to the Corporation has been converted into the railroad and its appurtenances; and it had no separate existence as a taxable thing after the road was built and equipped. But the capital 13 39] a corporation of Alabama. stock, divided into shares, subscribed and paid | nessee, although said company resulted from the for by the persons to whom the shares were consolidation of two Tennessee corporations with originally issued, still has and was by the charter intended to have an existence separate and distinct from the property into which the money paid for it has been converted. It can now be bought, sold and transferred. Its holders and owners are the owners of the corporation. They may meet and elect directors, who are to manage its affairs. The profits of the Corporation are to be divided among them in proportion "to the stock each may hold;" § 30; and upon the dissolution of the Corporation they will be entitled to receive in like proportion the proceeds of what remains of the corporate property after all the corporation debts and liabilities are paid or satisfied. In effect the contributions of subscribers of the shares were stocked as the capital of the corporation. The aggregate of the subscriptions made the aggregate of the stock. Each subscriber owned that part of the stock which his shares represented; and the aggregate of the shares represented the aggregate of the stock. It was evidently called the "capital stock of the Company," because it was the stock which, when subscribed and paid for, furnished the Corporation with the capital to build its road. As capital it belonged to the Corporation; but as stock it belonged to the several holders of the shares into which it was divided. The charter exempted the stock from taxation clearly because the property which represented the stock had been put in its place as a taxable thing. The exemption is of the thing called the "capital stock" divided into shares. As the whole thing is exempt, so must Decessarily be its several parts or shares. It follows that the judgment of the Circuit Court was right, and it is consequently affirmed. True copy. Test: James H. McKenney, Clerk, Sup. Court U.S. GEORGE K. WHITWORTH, Trustee of DAVIDSON COUNTY, TENNESSEE. (See S. C. Reporter's ed. 139-150.) 5. The relinquishment of the taxing power is never to be presumed. [No. 934.] Argued Jan. 22, 1886. Decided March 1, 1886. IN ERROR to the Circuit Court of the United States for the Middle District of Tennessee. The history and facts of the case appear in the opinion of the court. See also the preceding and related case of Tennessee v. Whitworth. Messrs. J. B. Heiskell, S. Watson, B. J. Lea, Atty-Gen. of Tennessee, S. A. Champion, J. W. Baker and James M. Head, for plaintiff in error: The shares of stock in the Nashville and Decatur Railroad Company are not exempt from taxation. It has been decided by the Supreme Court of Tennessee that a grant to one company of the privileges of another does not carry an exemption from taxation. Wilson v. Gaines, 9 Baxter, 546. This decision is not contrary to the decisions of this court, although the question has never been definitely raised in this court. Humphrey v. Pegues, 16 Wall. 244 (83 U. S. bk. 21, L. ed. 326); Tomlinson v. Branch, 15 Wall. 460 (82 U. S. bk. 21, L. ed. 189); South Western R. R. Co. v. Georgia, 92 U. S. 676 (Bk. 23, L. ed. 762); C. & O. R. R. Co. v. Virginia, 94 U. S. 718 (Bk. 24, L. ed. 310); Railroad Cos. v. Gaines, 97 U. S. 697 (Bk. 24, L. ed. 1091); Railroad Co.v. Georgia, 98 U. S. 360 (Bk. 25, L. ed. 186); Railroad Co. v. Hamblen Co. 102 U. S. 273, and Wilson v. Gaines, 103 U. S. 417 (Bk. 26, L. ed. 152, 401). The consolidation of the Central Southern and the Tennessee and Alabama Railroad Companies worked a dissolution of those companies, and thereby destroyed whatever exemption from taxation they may have possessed. Railroad Co. v. Georgia, supra; Shields ▼. 96 U. S. 499 (Bk. 24, L. ed. 357, 836); St. Louis, Ohio, 95 U. S. 319, and Railroad Co. v. Maine, etc. Ry. Co. v. Berry, 113 U. S. 465 (Bk. 28, L. ed. 1055. Whether the consolidation of two or more corporations operates to dissolve them and form a new one is a question of legislative intent. Railroads consolidation-grant of rights, pow-Tomlinson v. Branch, 15 Wall. 460 (82 U. S. See authorities last above cited. See also ers and privileges of another company ex-bk 21, L. ed. 189); Railroad, etc., Co. v. Georgia, emption of stock from taxation-construction. 1. A grant to a railroad company of all the 92 U. S. 665 (Bk. 23, L. ed. 757). rizhts, powers and privileges, or all the powers and prieges of another company, entitles it to the me exemptions from taxation that the other mpany has. The application of this rule to a statute of Ten nessee is not affected by article XI, 47 of the Constitution of 1834 of that State. Upon the consolidation of two or more railred companies, under authority of law, the presuration is that the new company has all the powers and privileges of the old companies. 3. Where the Act of consolidation provided that the new company should, for its government, be ted to all the powers and privileges, and be subject to all the restrictions and liabilities conferred and imposed upon another company, the phrase "for its government" is held to have been intended, not as a limitation of its powers, but for It regulation and control. 4. The capital stock of the Nashville and Decatur Railroad Company is exempt from taxation in Ten NOTE-Exemption of corporation from taxation lycharter. See Tucker v. Ferguson, 89 U. S., bk. 22, No, note. See also ante, p. 830. The grant of the rights, powers and privileges of one railroad company which has an exemption from taxation, to another, "for its government," does not carry with it immunity from taxation. Railroad Cos. v. Gaines, 97 U. S. 697, 711 (Bk. 24, L. ed. 1091, 1094); Railroad Co. v. Commissioners, 103 U. S. 4 (Bk. 26, L. ed. 360). The words for its government," are words of limitation, and definitely exclude the idea of exemption from taxation. See authorities last above cited. See also the abstract of the argument as reported in the preceding case. Messrs. Ed. Baxter, Edward H. East and F. L. Dodd, for defendant in error. Mr. Chief Justice Waite delivered the opinion of the court: |