Tennessee v. Whitworth
117 U.S. 139
SCOTUS
1886
Check Treatment
*145 Me. Chief Justice Waite

delivered tbe opinion of the court. After stating the facts as above reported, he continued:

The question whether the capital- stock of the Nashville and Decatur Company is entitled to the same exemption as that of the Nashvillе and Chattanooga Company depends, 1, on whether the grant to the Tennessee and Alabama Company of “ all the rights, powers and privileges,” and to the Central Southern Company of “all the powers and privileges” of the Nashville and Chаttanooga Company, carried with it to the new companies the exemption from taxation provided for in section 38 of the Nashville and Chattanooga charter, and, if it did, 2, whether the Nashville and Decatur Company and its stockholders аre entitled to the same exemptions as the original Tennessee corporations and their stockholders had.

As early as 1850, before either the charter of the Tennessee and Alabama Company or that of the Central Southern Comрany ‍​‌‌‌‌​‌​‌‌‌​‌​​​​‌‌​​‌‌​‌‌‌​‌​​​‌​‌‌‌‌​​​​‌‌‌‌​​‍was granted, this court said in Philadelphia, Wilmington & Baltimore Railroad Co. v. Maryland, 10 How. 376, 393, speaking by Mr. Chief Justice Taney, that a statute which authorized the union of two railroad companies, and secured to the united company the “ property, rights and privileges which that law, or other laws, conferred on them [the separate companies], or either of them,” extended to the united company an exemption from taxation in the charter of one of the uniting companies, and this although it ivas at the same time said that “ the taxing pоwer of a State is never presumed to be relinquished, unless the intention to relinquish is declared in clear and unambiguous terms.” This has been expressly reaffirmed in Tomlinson v. Branch, 15 Wall. 460; Humphrey v. Pegues, 16 Wall. 244; Southwestern Railroad v. Georgia, 92 U. S. 676; and the correctness of the decision was recognized in Central Railroad & Banking Co. v. Georgia, 92 U. S. 665; Morgan v. Louisiana, 93 U. S. 217; Railroad Companies v. Gaines, 97 U. S. 697, 711; Railroad Co. v. Georgia, 98 U. S. 359, 360; Railroad Co. v. Hamblen, 102 U. S. 273, 277; Railroad Co. v. Commissioners, 103 U. S. 1, 4; Wilson v. Gaines, 103 U. S. 417; Louisville & Nashville Railroad Co. *146 v. Palmes, 109 U. S. 244, 253; and Chesapeake & Ohio Railroad Co. v. Miller, 114 U. S. 176, 185.

From this it is clear that, under the settled rule of decision in this court, the exemption from taxation, which was one of the “ rights and privileges ” of the Nashville and Chattanooga Company, formed part of the charters of the Tennessee and Alabama Company and the Central Southern Company, unless a different rule is to be applied in Tennеssee, because of a supposed limitation on the popular meaning of the words “ rights,” “ powers ” and “ privileges ” when used in statutes, on account of a peculiar provision of the constitution of that State. That constitutional prоvision- is as follows :

“ The legislature shall have no power ... to pass any law granting to any individual or individuals rights, privileges, immunities, or exemptions other than such as may be by the same law extended to any member of the community who may be able to bring himself within the рrovisions of such law: Provided, always, that the legislature shall have power to grant such charters of corporations as they may deem expedient for the public good.” Constitution 1834, Art. XI, sec. 7.

In view of this the Supreme Court of Tennessee decided ‍​‌‌‌‌​‌​‌‌‌​‌​​​​‌‌​​‌‌​‌‌‌​‌​​​‌​‌‌‌‌​​​​‌‌‌‌​​‍in effect, at its December Term, 1877, in Wilson v. Gaines, 9 Baxter, 546, that as the State in its constitution used in the same connection all the words “ rights,” “ privileges,” “ immunities,” and “ exemptions,” each of these words must be given in statutory interpretation a meaning so limited as not to include аnything expressed by the others, and that when any one of them is found in a statute the legislature must be conclusively presumed to have used it in this restricted sense. To this we are unable to agree. As has already been seen, the word “privilege,” in its ordinary meaning, when used in this connection, includes an exemption from taxation. This court so decided a year before the charter of1 the Tennessee and Alabama Company was granted,.and nearly three years before that of the Central Southern. In fact, the Supreme Court of Tennessee does not seem to doubt that such would be its meaning but for the constitution, for in the opinion it is said, “ However comprehensive a meaning may have been given the word ‘ privilege ’ by *147 the courts of other States, or by lexicographers, we are constrained to use it in the restricted sense and meaning given it by our laws and the constitution of the State. ... A legislature acting under this constitution for its powers, and as defining its duties, must be conclusively presumed to have used a word or term of the constitution in the sense and with the meaning given it by that constitution.” We see nothing in the constitution which gives to the word “ right,” or “ privilege,” or “ immunity,” or “ exemption,” any different meaning than that which it has among the people at lаrge. There may be, and probably are, some immunities, and some exemptions, which would not be considered as either rights or privileges in the popular acceptation of those terms. It was to reach such immunities and such exemptions, аs it seems to us, that this particular form of expression was used in the constitution, and not to provide that under no circumstances should the word privilege in a statute of Tennessee be held to include a privilege of exemption from taxation. Words in a constitution, as well as words in a statute, are always to be given the meaning they have in common use, unless there are very strong reasons to the contrary. We find no such reasons in this case, and, as an exemption from taxation is a privilege in the popular sense of that term, we feel ourselves compelled to decide that both the Tennessee and Alabama Company and the Central Southern Company were granted such an exemption by their charters, notwithstаnding the contrary opinion of the Supreme . Court of Tennessee, which, although entitled to great respect, is not binding upon us as authority under' the circumstances of this case.

It only remains to consider whether the Nashville and Decatur Compаny is entitled to the same exemption. When two railroad companies unite or become consolidated under the authority of law, the presumption ‍​‌‌‌‌​‌​‌‌‌​‌​​​​‌‌​​‌‌​‌‌‌​‌​​​‌​‌‌‌‌​​​​‌‌‌‌​​‍is, until the contrary appears, that the united or consolidated company has all the powers and' privileges, and is subject to all the restrictions and liabilities, of those out of which it was created. Tomlinson v. Branch, 15 Wall. 460; Branch v. Charleston, 92 U. S. 677, 682; County of Scotland v. Thomas, 94 U. S. 682, 690; Railroad Co. v. Maine, *148 96 U. S. 499, 512; Green County v. Conness, 109 U. S. 104. From this it follows, that, as the capital stock of both the original Tennessee corporations was exempt from taxatiоn, the capital stock of the united or consolidated company, formed by the simple aggregation of that of the two old ones, is also exempt, unless it has been provided to the contrary. Is there, then, anything in the statute authorizing the union whiсh rebuts this presumption? ¥e think there is not. The language relied on to show the contrary intention is this : “ That the said Nashville and Decatur Railroad shall, for its government, be entitled to all the powers and privileges, and be subject to all'the restrictions and liаbilities, conferred and imposed upon the Nashville . and Chattanooga Railroad Company.” This is the. exact language of the corresponding provision in the charter of the Tennessee and Alabama Company, one of the original companies, save only that the words “ for its gov- • eminent ” have been added. As we hold that this was sufficient to exempt the capital stock of the original companies from taxation, it follows that the nervcompany is also exempt, unlеss the added words were intended as a limitation upon the effect of the others.

The rule is imperative that a relinquishmént of the taxing power is never to be presumed. Vicksburg, Shreveport & Pacific Railroad v. Dennis, 116 U. S. 665. Under this rule, it ivas held in Railroad Companies v. Gaines, 97 U. S. 711, that the capital stock of the Knoxville and Charleston Railroad Company Avas not exempt from taxation, although by its charter that company Avas (p. 702) “ invested, for the purpose of making and using said road, Avith. allthe powers, rights, and privileges, and subject .to all the disabilities and restrictions that have been conferred and imposed upon the Nashville and Chattanooga Railroad Company,” because (p. 712) “ the grant was not of all the rights and privileges of the Nashville and Chattanooga Company, but of such as were necessary for the purpose of making and using the road, or, in other words, the franchises of the company AArhich do not include immunity from taxation.” To the same effect is Railroad Co. v. Commissioners, 10 3 U. S. 1, Avhere the Annapolis and Elk Ridge Rail *149 road Company was “ invested with all the rights and powers necessary for tbe construction and repair ” of its railroаd, and for that purpose was to have and use ‍​‌‌‌‌​‌​‌‌‌​‌​​​​‌‌​​‌‌​‌‌‌​‌​​​‌​‌‌‌‌​​​​‌‌‌‌​​‍all the powers and privileges, and be subject to all the obligations contained in the enumerated sections of the Baltimore and Ohio charter. This we held “ was not a grant of all the powers and privileges of the Baltimore and Ohio Company, . . . but only of such as were necessary to carry into effect the objects for which the new company was incorporated,” or, in other words, “ such as were necessary to the cоnstruction, repair, and use of its railroad,” and this did not include the privilege of exemption from taxation.

In all this class of cases the question is one of legislative intent, with a presumption against an intent to grant an exemption from taxation. Hеre there is no charter of a new corporation with power to build a new railroad. No new taxable property is created. The legislation contemplates nothing more than the making of one railroad corporatiоn out of two old ones, each of which has a completed railroad and the privilege of an exemption of its capital stock from taxation. If nothing at all had been said about the powers and privileges of the new corрoration, the presumption would have been that it took all which were possessed by the two original companies at the time of their union. To rebut this presumption it is necessary that a contrary intention should appear. The question is not as to a grant of new powers, but as to the taking away of old ones.

Such being the case, we cannot believe that the phrase “ for its government” in the consolidating act was intended as a limitation on the powers and privileges of the new corporation. The natural meaning of the word government in such a connection is regulation and control, and we think it was used in that sense here. In reality it neither ‍​‌‌‌‌​‌​‌‌‌​‌​​​​‌‌​​‌‌​‌‌‌​‌​​​‌​‌‌‌‌​​​​‌‌‌‌​​‍adds to nor takes from the force of the other words, and simply implies that the new corporation shall have the same charter rights and privileges, and be subject to the. same charter restrictions and liabilities, as the Nashville and Chattanooga Company. Such were the charters of the old companies, and such was intended to be the *150 charter of the new; no more, no less. As was said in the court below, “ the government of the corporation embraces every part ■ of the conduct and business of the company in all its relations to the Statе, to the general public, to individuals, to its own stockholders,” and consequently the grant of powers and privileges for its government was in reality the grant of the powers and privileges of its corporate entity.

The fact that the Tennesseé and Alаbama Central Company was under the authority of the consolidating statute brought into the «Consolidated company does not in our opinion alter the case in any material respect. No new taxable property was in fact brought intо Tennessee in this way. "While it added to the amount of the capital stock of the consolidated company, it ivas only because of capital actually invested before the consolidation in the Alabama railroad, and, taking thе whole statute together, it is apparent to us that the legislature intended to give the new corporation in Tennessee all the powers and privileges, including exemption from taxation, which the old corporations were entitled to. In fact we do not understand it is claimed that the rights of the parties, in respect to the present question, are changed because the two original Tennessee companies, after their union, were consolidated with the Alabama corporation.

We conclude, therefore, that the capital stock of the Nashville and Decatur Company is exempt from taxation in Tennessee, and consequently, for the reasons stated in the other case, that the shares cannot be assessed. The judgment of the court below to that effect is

Affirmed.