93 Ky. 430 | Ky. Ct. App. | 1892
delivered the opinion of the court.
It appears by the agreed facts in this case that, by an act of the Legislature of this State, the Hickman & Obion Railroad Co. was incorporated in 1854 ; that section 24 of said act provided: “ That all persons residing in this State and owning stock in said road, shall give said stock in for taxation, under the equalization laws of this State, from and after the completion of the road; but no further tax shall be imposed on said company or road.” That the said road was thereupon partly constructed by the Hickman & Obion Company; that afterward said road was leased to and consolidated with the Nashville & Northwestern Railroad Company.
By the agreements of November 13, 1855, and of January 19, 1856, the latter supplemental only, the Hickman & Obion Company leased to the Nashville & Northwestern Railroad Company, for the period of one thousand years, the exclusive right of transporting and conveying passengers and freight over its said road, together with the depot grounds, road-bed, bridges, culverts, materials, privileges and its assets after the payment of its debts, the latter to be used by the said Nashville & Northwestern Railroad Company in the completion of the said Hickman & Obion road; the fifty thousand coupon bonds, issued to the Hickman & Obion Railroad Company, were transferred to the Nashville & Northwestern Railroad Company, and that company issued its own stock to the Hickman & Obion in lieu thereof; also, any other stock duo the stockholders of the Hickman & Obion Company was to bo surrendered and stock issued for it in the name' of the Nashville & Northwestern Company; also, the Hickman & Obion Company was not required to keep up'
In an action by the State against the appellee to recover taxes on that-part of the road lying in this State, the appellee resists the right of the State to the taxes upon the ground that, by said act of the Legislature that part of the Hickman & Obion road lying in this State was exempt from taxation. Admitting that said exemption was a personal privilege, which could not be vested in another by sale unless expressly authorized by statute, which it is not contended is the case here, there was not a sale of the Hickman & Obion road, but only a lease to and consolidation with the Nashville & Northwestern Company, which was not such a transfer of the title of the Hickman & Obion road as to defeat the personal privilege of exemption from taxation.
Now, it is true, where two or more railroads are consolidated into one united line and one company, by au
On the other hand, if the several companies are not authorized by law to transfer their property to and consolidate it into one new company, each retaining its chartered privileges and exemptions, and such companies transfer all their property to and consolidate it with a new company, such transfer creates a now corporation and is equivalent to a sale of the company’s property to the new corporation, which will have the effect of depriving each company of any exemptions from taxation that may be contained in its charter, and of deuyhig the same to the new company; because, as said, it parts with the title to its property to the new company, and the exemption being a personal privilege it does not follow the transmutation of the title to the property, unless expressly authorized by law. See Commonwealth v. Masonic Temple Co., 87 Ky., 349; St. Louis, &c., Railway Co. v. Berry, 113 U. S., 465; St. Louis, &c., Railway Co. v. Berry, 41 Ark., 509. In this case there was a complete transfer and. surrender of all the Ilickman & Obion’s property to the Nashville & Northwestern Company in consideration of the latter completing the former’s road within a certain time.
Now, as to the lease of the Hickman & Obion property
Therefore, to view the transaction as a consolidation or lease, or both, the right to exemption from taxation was defeated thereby. And as the appellee is operating said road, presumably rightfully, and as the right of exemption was extinguished by the transactions indicated, it must pay the taxes demanded.
The judgment is reversed, with directions for further proceedings consistent with this opinion.