42 Mo. 308 | Mo. | 1868
delivered the opinion of the court.
The question involved relates to the power of the State to assess, levy, and collect a tax on the property owned by the defendant in error. In 1853 the Legislature incorporated the Eliot Seminary, and provided that the incorporators, their associates and successors, should be constituted a body corporate and politic, by the name of The Eliot Seminary, and by that name should have perpetual succession, and be capable of taking and holding, by gift, grant, devise, or otherwise, and conveying, leasing, or otherwise disposing of, any estate, real, personal, or
The Legislature, by an amendatory act in 1857, changed the name of The Eliot Seminary to that of The Washington University. (Adj. Sess. Acts 1857, p. 610.)
The seventh section of the general corporation law of 1845' provided that the charter of every corporation that should be-thereafter granted by the Legislature should be subject to altera^tion, suspension, and repeal, in the discretion of the Legislature.., When the law was passed granting the charter, there was no> express prohibition restraining the Legislature from exempting property from taxation; but by the present constitution it is-declared that “no property, real or personal, shall be exempt from taxation, except such as may be used exclusively for public schools, and such as may belong to the United States, to this State, to counties or to municipal corporations within this State.” In pursuance of this clause of the constitution, the Legislature passed a law for the assessment and collection of the revenue, by virtue of which the property of the defendant in error was subjected to taxation. It is now insisted that the charter was an irrepealable contract, and perpetually exempted the property of the corporation from taxation.
The charter is unusual and of marked peculiarity. There is no preamble to the act, and no limit to its duration or to the amount of property which it may hold. No obligations are cast upon the corporation; it stipulates for nothing, and agrees to give no consideration whatever for the extraordinary privileges thus granted. The intention was, we suppose, to establish an institution of learning, but there is nothing to prevent the corporation from accumulating and absorbing millions of wealth, and there is no corresponding obligation imposed to compel it to carry out any contemplated object. To determine correctly this question it is
The first case of this kind which came before ■ that court, and where the subject received a.very thorough discussion, was the celebrated one of Fletcher v. Peck, 6 Cranch, 87. There, the Legislature of Georgia, by an act of the 7th of January, 1796, authorized the sale of a large tract of wild land, and a grant was made by letters patent, in pursuance of the act, to a number of individuals, under the name of the Georgia Company. Fletcher held a deed from Peck for a part of this land, under a title derived from the patent, by which deed Peck had covenanted that the State of Georgia was lawfully seized when the act was passed, and had a good right to sell, and that the letters patent were lawfully issued, and that the title had not since been legally impaired. The action was for breach of covenant; and the breach assigned was that the letters patent were void, for that the Legislature of Georgia, by the act of the 13th of February, 1796, declared the preceding act to be null and void, as being founded in fraud and corruption. This directly brought before the court the question whether the Legislature of Georgia could constitutionally repeal
The case of The State of New Jersey v. Wilson (7 Cranch, 164) is similar to that of Fletcher v. Peck in its principles. There, in consideration that the Delaware Indians released to the State of New Jersey their right to certain lands, the Legislature declared by law that other lands purchased for the Indians should not be subject to taxation. The Indians subsequently, with the consent of the Legislature, sold the lands thus acquired; and the Legisla
The question to he considered was, did the Legislature pass the act exempting the lands from taxation as an ordinary law, or was it a contract between the parties? It certainly possessed every element of a contract between parties making a mutual agreement. But had the Indians parted from nothing, and the Legislature enacted simply that their lands should be exempt from taxation, would that have constituted a contract, and could not a subsequent Legislature have repealed the statute and imposed a .tax upon the land? I think nothing could be plainer. The Legislature cannot, by declaring an act perpetual, render it so.
An act, without any consideration passing between the parties, providing that lands never should he taxed, would have only the force and effect of an ordinary law simply exempting them from taxation, which might he repealed by any subsequent Legislature.
The case of Dartmouth College v. Woodward (4 Wheat. 518) is a leading case, and is usually cited as containing a most full and elaborate discussion of the principles contended for in this case. In the investigation of the Dartmouth College case, the inhibition on the States to impair by law the obligation of contracts received the most thorough and exhaustive examination, and the great influence of the authoritative adjudication then made has remained
In Gordon v. Appeal Tax Court, 3 How. 133, it was held that where the Legislature of a State accepted from banking corporations a bonus as a consideration for the franchise granted, and pledged the faith of the State not to impose any further tax or burden upon them during the continuance of their charters under the act, a tax upon the stockholders, by reason of their stock, was a violation of the contract, and illegal. The same point was ruled in the series of cases growing out of the laws of Ohio creating their banking system.
In 1845 the Legislature of Ohio passed a general banking law, the fifty-ninth section of which required the officers to make semiannual dividends; and the sixtieth required them to set off six per cent, of such dividends for the use of the State, which sum or amount so set off should be in lieu of all taxes to which the company or the stockholders therein would otherwise be subject. In 1851 an act was passed entitled “ An act to tax banks, and bank and other stocks, the same as property is now taxable by the laws of this State.” The operation of the latter law was to increase
In all the cases decided by the Supreme Court of the United States, from thq very earliest period down to the two recent decisions of Bridge Prop. v. Hoboken (1 Wall. 116), and the Binghampton Bridge (3 Wall. 52), it is believed a valid consideration was paid in every instance in which we find judgments of that court invalidating a law of the State intended to abrogate a right vested under a previous statute. The right of taxation, like the right of eminent domain, is a high prerogative of sovereignty, and ought never to be surrendered. “ That the taxing power is of vital importance,” said Chief Justice Marshall, in the case of the Providence Bank v. Billings, 4 Peters, 561-2, “that it is essential to the existence of government, are truths which it can not be necessary to reaffirm. They are acknowledged and asserted by all. It would seem that the relinquishment of such a power is never to be assumed. We will not say that a State may not relinquish it; that a consideration sufficiently valuable to induce a partial release of it may not exist; but as the whole community is interested in retaining it undiminished, that community has a right to insist that its abandonment ought not to be presumed in a case in which the deliberate purpose of the State to abandon it does not appear.” And again: “ The power of legislation, and consequently of taxation, operates on all persons and property belonging to the body politic. This is an original princinle, which has its foundation in society itself. It is granted by
In Brewster v. Hough (10 N. H. 139) the court denies absolutely that the State, acting through its Legislature, can surrender any portion of the taxing power. The Judge remarks: “The power of taxation is essentially a power of sovereignty or eminent domain, and it may well deserve consideration whether this power is not inherent in the people under a republican government, and so far inalienable that no Legislature can make a contract by Which it can be surrendered without express authority for that purpose in the constitution, or in some other way leading directly from the people themselves.” This case was referred to and received the unqualified assent of Mr. Justice Daniel in his dissenting opinion in the Piqua Branch, etc., v. Knoop. Professor Greenleaf, under the head of franchise, in his edition of Cruise, notices the case of Brewster v. Hough, and observes : “In regard to the position that the grant of a franchise of a ferry, bridge, turnpike, or railroad, is in its nature exclusive, so that the State cannot interfere with it by the creation of another similar franchise tending materially to impair its value, it is with great deference submitted that an important distinction should be observed between those powers of government which are essential attributes of sovereignty, indispensable, to be always preserved in full vigor—such as the power to create revenue for public purposes, to provide for the common defense, to provide safe and convenient ways for the public necessity and convenience, and to take private property for public uses, and the like — and those powers which are not thus essential, such as the power to alienate the lands and other property of the State, and to make contracts of service, or of purchase and sale, or the like. Powers of the former class are essential to the constitution of society, as without them no political community can well exist, and necessity requires
It is an admitted principle in our republican government that one Legislature cannot in any manner abridge or lessen the power of a succeeding Legislature. Each is alike invested with the general power of sovereignty. Therefore one Legislature cannot pass a law irrevocable or irrepealable in its character unless it has imparted to it something in the nature of a compact or contract which will preserve it inviolate under the inhibition of the national constitution. A law which seeks to deprive the Legislature of this inherent and vital principle of sovereignty — the power of taxation — must be so clear, explicit, and determinate, that there can be neither doubt nor controversy about its terms or the consideration which renders it binding. Every presumption will be made against its surrender, as the power was committed by the people to the government to be exercised, and not to be alienated. (The People v. Roper, 35 N. Y. 629; Mott et al. v. The Penn. R.R. Co., 6 Casey, 9; Commonwealth v. Bird, 12 Mass. 442.)
Because the Legislature sees fit to grant certain privileges and immunities to a person, it does not follow that they are to be perpetual, and that the law cannot be repealed. The legislative power may enact that an informer shall have a certain interest in a penalty, yet, after information given, the law may be repealed and his interest will be destroyed. (10 Wheat. 248; 6 Pet. 404.) The Legislature may, if there is no prohibition in the organic law to the contrary, exempt certain species of property from taxation, yet they would be. at liberty at any time to repeal the exemption and again subject it to the burdens of government. This power ought not to be questioned or doubted; but the opinion seems to prevail with some minds that the right of property is more sacred in chartered corporations than the same right is in the person of
In the year 1851 the same authority enacted 11 that all property, real and personal, belonging to any association or incorporated company which is now by law exempt from taxation, other than that which is in the actual use and occupation of such association
No importance or weight can be attached to that provision of the charter of defendant in error which excludes it from the operation of the seventh section of the general law in relation to corporations. It is incompetent, as before observed, for one Legislature to attempt to derogate from the power or tie up the hands of a subsequent Legislature. For an irrepealable contract of the character here presented no authority or precedent is to be found. Whilst the exemption continued, the property was free from taxa
When the charter of the University was granted, the Legislature might have considered it reasonable to foster and encourage it in its infancy and confer upon it privileges and immunities while struggling into existence. But no provision is made in express terms, or by reasonable intendment, that those immunities should be perpetual and have the effect of Avithdrawing millions of subsequently acquired property from taxation. In 1853 taxes were light and the State debt was small, and exemptions could be made without great detriment. After that period the State embarked in a false and ruinous system of loaning its credit to corporations, by which it incurred an immense debt; then followed the civil Avar, which increased, its already burdensome obligations, and taxation became exceedingly onerous.
In this condition of things it Avas deemed the part of wisdom
The judgment will be reversed and the petition dismissed.