Company by the State. The purpose to which the State shall apply the proceeds of a tax is not material so long as it is a public purpose, and that the payment of the debts of a State is a public purpose does not admit of doubt. It is called a tax both in the agreed statement of facts before us and in the ordinance imposing it. Thus, "There shall be levied and collected an annual tax of ten per centum of all their gross receipts," etc., "which tax shall be asessed and collected in the County of St. Louis in the same manner as other state taxes are assessed and collected. The tax in this ordinance specified shall be collected from each company, etc. Should either of said companies refuse or neglect to pay said tax as herein required, etc. A tax upon receipts 45*] *is one of the recognized modes of taxing corporations, as well under state laws as under the laws of the General Government. The Ordinance of 1852 was either the imposition of a tax or it was an act of high handed violence; a forcible seizure of private property, without law or authority; an act which, if committed by an individual, would amount to robbery. The case before us will justify no such imputation upon the State of Missouri. The result of these views is the reversal of the judgment below and, in accordance with the stipulation in the record, judgment is ordered in favor of the plaintiff in error for six cents damages and for costs, and the case is remanded with directions that a judgment be entered accordingly. Mr. Chief Justice Waite: I concur in the judgment of the court which has just been announced, but not for the reasons assigned. If the assessment complained of is a tax, then I agree with a majority of the court in the opinion that it is a violation of the 12th section of the Act of December 25, 1852, and void. I think, however, it is not a tax, but an exaction of the payment of the debt due from the Railroad Company to the State, and as such, inconsistent with the provisions of the Act of February 10, 1864, which, upon its acceptance by the Company, became a contract between the parties and binding upon each. Mr. Justice Clifford, dissenting: I dissent from the opinion of the court in this case, because the Act of the Legislature referred to does not, in my judgment, exempt the Company from the tax imposed by the ordinance. Mr. Justice Miller also dissents upon the same ground. Mr. Justice Strong did not sit in this case. 46*] *THE NORTH MISSOURI RAILROAD COMPANY et al., Plffs. in Err., v. CONSTANTINE MAGUIRE. (See S. C., 20 Wall., 46-64.) State taxation of corporation-contract to exexempt from taxation-Missouri ordinance. 1. Unless exempted in terms which amount to a NOTE. Taxation of corporate franchises in the United States see note, 57 L. R. A. 33. contract not to tax, the property, privileges and franchises of a corporation are as much the legitimate subjects of state taxation as any other property of taxing power of the State is never preits citizens. sumed to be relinquished, and exists unless the intention to relinquish it is declared in clear and unambiguous terms. North Missouri Railroad, does not contain any con3. The Missouri Act for the completion of the tract to exempt the property of that road from taxation. 4. The state Ordinance of 1865 does not impair between the State and the Company. the obligation of any contract made and concluded [No. 281.] Argued Apr. 2, 1874. IN 'Decided Apr. 20, 1874. N ERROR to the Supreme Court of the State of Missouri. Missouri Railroad Company, Maurice K. JesThis was a controversy between the North sup, and Constantine Maguire, tax collector, of the 25th section of article 11 of the Practice submitted without action under the provisions Act of Missouri, the object of which was to test the validity of the ordinance of the Missouri Convention of Apr. 8, 1865, entitled "An Ordinance for the Payment of State and Railroad Indebtedness." The Supreme Court of Missouri rendered judgment in favor of the defendant, reversing the judgment of the St. Charles Circuit Court. ion of the court. The facts are sufficiently stated in the opin Broadhead and Geo. E. Leighton, for plaintiffs Messrs. Emmons, J. C. Orrick, Sharp & in error: We maintain that the Act of the General As sembly of the State of Missouri, approved Feb. 16, 1865, entitled "An Act to Provide for the completion of the North Missouri Railroad and its West Branch, and for the Construction of a Bridge over the Missouri River," when its provisions were accepted by the Company, as they tween the Company and the State, so far as it were, became a valid and binding contract berelates to the payment by the Company to the State and the mode of making payment, which could not be impaired by any subsequent legislation on the part of the State, whether by Act of the Legislature or of the Convention; and that the provisions of the ordinance referred to did impair the obligation of that contract in providing another and far more onerous mode of enforcing the payment without the consent of the Company. The contract, in brief, was: that the State would release its lien to a certain extent; authorize the Company to issue six million first mortgage bonds, and grant other privileges to the Company, in consideration that the State, through an officer of its own, should be permitted to take charge of all the funds and earnings of the Company, coming from whatever source, and disburse them in a particular way, and for certain objects specified in the Act, amongst which was the payment of these very bonds for which the State was liable, and the accrued interest thereon which the State had paid, and which had thus become a debt due by the Company to the State. The Company accepted the proposition, and it thus became a binding contract between the parties. that the interest on the $6,000,000 of bonds An important provision of that contract was. the dividends on the preferred stock, should be paid before the interest or principal of the state bonds. That the ordinance in question is a palpable violation of this contract, is a proposition too plain to require argument to sustain it. The ordinance, disregarding the obligation of the State to pay, through its Fund Commissioner, out of the "gross earnings and daily receipts of the Corporation" what might be necessary to keep the road in a good state of repair, and what might be necessary for such additions to the rolling stock, buildings and appurtenances of the road as may be required to enable the Corporation to accommodate and transact the business of the road, the amount of salary to the Fund Commissioner, the interest on the first mortgage bonds as the same fell due, the cost of construction and equipment, the dividends on preferred stock, the principal of the first mortgage bonds, to all of which the gross earnings were pledged before the principal of the state bonds could be paid, provides for the levy of an assessment of ten per cent. of all gross receipts for transportation of freight and passengers for two years, and fifteen per cent. thereafter for the payment of the principal and interest of these bonds, until they shall be fully paid. Thus it will be seen that the contract is impaired in a most important particular. The Supreme Court of Missouri in passing upon this question in this case, admits that the Law of 1865 was a contract, and within the protection of the United States Constitution. See N. M. R. Co. v. Maguire, 49 Mo. 498. The questions then left for consideration are: (a) Whether the assessment of ten per cent. on the gross earnings of the road, provided for by the ordinance of the Convention, is a tax. (b) Whether, if it be considered a tax, there is anything in the Act of 1865 manifesting an intention on the part of the State to abandon the right of taxation. debtedness and liability by turning over ten per Everything that may be done under the name of taxation is not necessarily a tax; "and it may happen that an oppressive burden imposed by the Government, when it comes to be carefully scrutinized, will prove, instead of a tax, to be an unlawful confiscation of property, unwarranted by any principle of constitutional government." Cooley, Const. Lim., 486. An unlimited power to make any and everything lawful which the Legislature might see fit to call taxation would be, when plainly stated, an unlimited power to plunder the citizens. Cooley, Const. Lim., 487; Tyson v. School Directors, 51 Pa., 9; Freeland v. Hastings, 10 Allen, 575. It appears, by the provisions of the ordinance, that there was an existing indebtedness due by the Railroad Company to the State for interest paid, and that there were bonds of the State outstanding, for the payment of which the Company might become liable to the State. The ten per cent. is to be applied to the pay-bridge v. Detroit, 8 Mich., 301. ment of this interest and these bonds, and to this purpose only. When the burden is common, there should be a common contribution to discharge it. Cooley, Const. Lim., 436; Sanborn v. Rice Co., 9 Minn., 273; 2 Kent, Com., 331; Wood This assessment is not upon all railroads in the State, but only upon the particular roads mentioned in the Act. If, then, this exaction of ten per cent. upon the gross receipts is not a tax but a means of enforcing payment of debts, a decree by which a certain portion of the gross income of the Company is set apart and appropriated until an The amount collected is to be appropriated alleged indebtedness is discharged, then it is in by the General Assembly, not to the general violation of the contract contained in the Act purposes of the State, but to the payment of a of 1865; for it is admitted that there was such debt already accrued, the principal and interest a contract, and that it comes within the proof these bonds; and when the bonds and inter-tection of the Federal Constitution, and that est shall have been fully paid, the assessment nothing but an exercise of the sovereign power and collection of the money is to cease. of taxation can justify its violation. 1865 manifesting an intention on the part of the State to abandon the right of taxation. If the Company should fail to pay the ten per The next question to be considered is, whethcent., the road and other property and the fran-er, if this exaction of ten per cent. on the gross chises of the Company are to be sold, and the earnings of the road to pay a debt is to be conproceeds of the sale are to be applied to the pay-sidered a tax, there is anything in the Act of ment of the bonds and the debt, notwithstanding the fact that the State has agreed that they should be paid in another way. In other words, the State says to the Railroad Company: you owe a debt, and are likely to owe us more on bonds for which we are liable and which we may have to pay. You must discharge that in The Act of 1865, by which this contract was made between the State and the Company, provides a full and complete disposition of all the funds of the Company, coming from whatever source. The Company is not left in control of Bank v. Billings, 4 Pet., 562. a dollar with which to pay taxes. The Com- | ply exemption from state taxation, because pany, as a Corporation, could not own anything they expressly release, as a first lien, what the except its road and the property and appliances ordinance again, in effect, makes a first lien, necessary to operate them, and every dollar though in form a tax. The argument, even in from this source is, by the Act of 1865, applied this form, still proceeds on the practical operato other purposes. What is left, out of which tion of the ordinance, looks outside of the Laws the taxes could be paid, and who is authorized of 1864 and 1865, and does not deduce an impli to pay them? Not the Company, for the Com- cation against the power to tax from the face of pany is required, under a heavy penalty, to the Acts themselves. But, says this court, "It pay over everything to the Fund Commissioner. is in the language of the instrument we must Not the Fund Commissioner, for he is directed look for the exemption; and if we do not find specifically to pay out all the money in a par- it there, it would be going very far to insert it ticular way. The Supreme Court of Missouri by construction." endeavors to avoid this inevitable construction of the Act of 1865, by saying that the Fund Commissioner was authorized, in the first class of disbursements, to pay the current expenditures for carrying on the ordinary business of the Corporation, and that the payment of taxes would certainly fall within this class. How the payment of taxes is any part of the ordinary business of the Company, it is difficult to understand; but if so, this could not be done by the Corporation. The Fund Commissioner, who was an officer of the State, has control of the funds, and if authority was given to any one to pay the taxes as a part of the expenses of running the road, it was given to him and not to the Company. Messrs. M. Blair, F. A. Dick, A. H. Buckner and R. E. Rombauer, for defendant in error: It is evident that the Act of 1865 was not intended as a general surrender of the right of taxation from the express exemption in section 11 of the Act, which exempts county and city bonds issued to pay for stock, and also the $6,000,000 of first mortgage bonds. Here the rule, Expressio unius, exclusio est alterius, applies. For the benefit of the road, and to aid in its construction, these bonds were exempted by express provision. Certainly the State may say nothing else was relieved from taxation. The care with which the State relinquishes its priority and rights, is also shown in the 2d section of the Act, saying: "And the State for this object and to this extent only, hereby relinquishes her first lien and mortgage upon said main line;" and again, in sec. 5: "And the State, in order to give validity and priority to said bonds, relinquishes her first lien and mortgage on the main line of the North Missouri R. R., to the amount and to the extent only of the bonds actually negotiated." These and the 11th section are the only ones in which the State makes any relinquishment, and as both are express to a certain and accurate extent, it certainly must be held that no other rights than these named can be included. But if it were true, as alleged, that the Acts of 1864 and of 1865 required the income of the several Companies to be disbursed in a specified order, which the ordinance in effect reversed, to the prejudice of the Company and to the advantage of the State, this could not be a violation of a contract created by either of these Acts, because neither of these Acts contain any stipulation on the part of the State to exempt the Company from taxation. It is not enough to take this power from a State, that by its exercise a contract with a corporation may be changed or destroyed. Nor would it help the argument to say that the Acts necessarily im And as the Acts themselves contain no reterence whatever to the subject of taxation, either direct or indirect, the exemption claimed cannot be placed upon any language of the instrument and, therefore, rests wholly upon grounds which this court has uniformly held to be inadmissible. 49 Mo., 497; Tomlinson v. Branch, 15 Wall., 469, 21 L. ed. 192; Tomlinson v. Jessup, 15 Wall., 454, 21 L. ed. 204; Humphrey v. Pegues, 16 Wall., 247, 21 L. ed. 326; Providence Bank v. Billings, 4 Pet., 559; see, cases collected in Home of the Friendless v. Rouse, 8 Wall., 430, 19 L. ed. 495. In The State Bank of Ohio v. Knoop, 16 How., 369, the rate of taxation was fixed by express words, saying, "which shall be in lieu of all taxes." P. 378. "If there be a reasonable doubt, that doubt must be solved in favor of the State." Wilmington R. Co. v. Reid, 13 Wall., 264, 20 L. ed. 568; Osborn v. Mobile, 16 Wall., 481, 21 L. ed. 472; Jefferson Bank v. Skelly, 1 Black, 446, 17 L. ed. 178; Richmond R. Co. v. Louisa R. Co., 13 How., 71, 81. But if it be conceded that the Act of the General Assembly, after its acceptance by the Company, was a contract coming within the principles of the Dartmouth College case, and within the protection of the prohibition of the 10th section of the first article of the Constitution, the State could not by any subsequent legislation, without the consent of the Corporation, resume its position as first mortgagee, except by an extinguishment and discharge of the outstanding obligation secured by said mortgage. We deny that that was the intention of the State, or that any such intention can be extracted from the provisions of the ordinance of April 8, 1865. The ordinance only provided for the levying and collecting a tax from the Company, just in itself, and neither unusual in the object taxed nor excessive in the amount levied. It will be observed that the convention ordinance was adopted but a short time after the Act of Feb. 16, 1865, was approved. The convention that submitted the ordinance was in session at the time of the passage of the Legislative enactment. The interest on the bonds issued to this Company had not been paid since 1860. In the meantime civil war had been raging through a large part of the State, and all the available resources of the State and people were needed to meet the overdue interest on the bonds, as well as to pay the expenses incurred in the defense of the State. Why should not this Company bear a portion of the burden of necessarily increased taxation? The ordinance selected the gross earnings of the railroads as a source of revenue to the State, and the same ordinance (sec. 6) provided for additional taxation of one fourth of one per centum on real and personal property of the State; the former to pay the interest on the bonds which the Railroad Company might fail to pay, and the other to pay the principal of the state indebtedness. Both are denominated taxes in the ordinance, and they both specify the purpose to which these taxes shall be applied by the General Assembly. Would this ordinance be less obnoxious to the objections of the appellant, if it had merely ordered a tax of ten per cent. on the gross earnings of the railroads, to be applied to the discharge of the bonded indebtedness of the State? Does the fact that it specified a particular indebtedness, to which the tax is to be applied, devest it of its real character, and make the ordinance an Act of legislative confiscation instead of a tax? Nor is this mode of taxation on the gross or net earnings of corporations an unusual subject of taxation. The State of Pennsylvania has, for years, raised a large portion of her state revenue from this source (the earnings of corporations, railroads, banks and insurance companies) and the United States collected large amounts of internal revenue at one time, from the gross earnings of moneyed and other corporations (Laws U. S., 1863-4, pp. 275, 276), and we could readily show that this tax was not excessive, and if excessive, that the burden did not fall on the Company, if we deemed it a matter of legitimate inquiry or discussion before this court. It is enough for the purpose of the appellee, that there was at no time any exemption from taxation, by the State, of this Company or its property. There is no pretense of such exemp tion, and no principle is better settled than that it cannot be presumed. If exemption from taxation is claimed, it must appear in the clearest, most explicit and unequivocal terms; and the better opinion is, that it must not be a mere act of grace and favor on the part of the State, but must have been parted with for consideration. Providence Bank v. Billings, 4 Pet., 561; Jefferson Bank v. Skelly, 1 Black, 436, 17 L. ed. 173; People v. Stevens, 35 N. Y., 629; Mott v. Pa. R. Co., 30 Pa., 9; 12 Mass., 442; Christ Church Hospital v. Philadelphia, 24 How., 300, 16 L. ed. 602; Washington University v. Rowse, 42 Mo., 325 (see 19 L. ed. U. S. 498); St. Louis v. Boatmen's Ins. & Trust Co., 47 Mo., 150; North Mo. R. Co. v. Maguire, 49 Mo., 499; Ohio Life Ins. & Trust Co. v. DeBolt, 16 How., 416. In the case at bar there is nothing in the Act of February, 1865, that can lead to the inference that the question of taxation entered into the consideration of the Legislature, or that it was contemplated to donate or transfer for a consideration to the Corporation any other additional privileges than had been granted prior to that time. If anything is to be inferred where the whole Act is silent, we cannot but conclude that the taxes were to be paid from the gross earnings, as other necessary expenses of operating the road and, therefore, included in the first class of disbursements. Ordinarily, taxes and charges that appertain to the current expenditures of any business are paid before in | terest on mortgage bonds or other indebted ness is paid; and the most reasonable conclu sion is, that the parties to this contract contem plated that the taxes should be paid out of the gross earnings, as a part of the necessary current expenditures necessary to run the road. But it is urged by the plaintiffs in error, that this tax on gross earnings is not a tax and, therefore, something else: (a) because it is unjust and oppressive; (b) because it is levied to pay a debt and not a public burden; (c) because it was the exercise of judicial and not legislative power; and (d) because the ordinance seeks to deprive the plaintiffs in error of their property without due process of law. These arguments in fact assume and admit that if it was a tax, then no such thing as its impairing the obligation of the contract in a legal sense, can be predicated of the Ordinance of April 1865. (a) Among the authorities cited by the plaintiffs in error, none can be found which holds that a lawful tax on a new subject, or an increased tax on an old one, interferes with the contract, or impairs its obligation within the meaning of the Constitution. Such taxation may affect contracts; it may increase the debt of one and lessen the security of another; it may impose additional burdens upon one class and relieve the burdens of another; still, unless within some constitutional prohibition, there is no escape from it, and it cannot be said to impair the obligation of any existing contract, in its true legal sense; nor can the unjust or oppressive character of the tax make it less a tax than if it were equal, just and uniform in its bearing upon the whole community. The power of taxation in the States is absolute and unlimited. Chief Justice Marshall, in McCulloch v. Maryland, 4 Wheat., 429, said: "It was a power to destroy." It acknowledges no other limits than those expressly prescribed in the Constitution, and like sovereign power of every description, is trusted to the discretion of those who use it. All powers over which the sovereign power of a State extends, are objects of taxation, and redress against the exercise of the power of taxation, because it has been unjustly and oppressively exercised, cannot be had in courts of justice. Unrestricted by constitutional limitations, the only curb upon the taxing power of the States is the responsibility of those in whom the power is lodged; and the power of appropriation of the proceeds of tax is equally unlimited. It was held in Griffin v. Mayor of New York, 9 N. Y., 456, that the two clauses of the Constitution, which declare that no person shall be deprived of his property without due process of law, and that private property shall not be taken for public use without just compensation, have no application to the taxing power. And it was also decided in that case, that the power to tax carries with it a power to apportion a tax as the Legislature shall see fit; and that the power of apportionment has no limit when there is no constitutional restriction. Glasgow v. Rowse, 43 Mo., 489; Brewster v. Syracuse, 19 N. Y., 116; Town of Guilford v. Supervisors of Chenango Co., 13 N. Y., 143; Thomas v. Leland, 24 Wend., 65; Litchfield v. Vernon, 41 N. Y., 123; People v. Lawrence, 41 N. Y., 137; Hamilton v. St. Louis Co. Ct., 15 Mo., 3; Calder v. Bull, 3 Dall., 386. ever in the tax when collected. The tax in this case is levied by the supreme power of the State, without any restriction upon its action on this subject, except what may be found in the Constitution of the United States. And unless such a case is made out as would amount to taking the property of A and transferring it to B, so as to make it practically and in reality a judicial decree, and not a legislative enactment, the case of the plaintiff in error is not helped in the least. The Convention ordaining this tax had absolute and despotic authority to take any portion of the property of the people, and place it in the public Treasury for public purposes. It could not transfer it to another portion of the same people, but it could have taken the whole earnings of the road of the plaintiff in error, as well as the ten per cent., and put them into the state treasury; and it is respectfully submitted that neither the state courts nor this court could have interfered to prevent such action by the Convention. We insist that the power of this Convention as to taxation, was only limited by its discretion, and for the abuse of this discretion the Convention is alone responsible to its constituency; not to this or any other court. So long as the proceeds of the tax are applied to purposes common to the whole people, there can be no judicial inquiry, either as to the objects to be taxed or the inequality, injustice, oppressiveness, or the extent of the taxation. These cases from New York are adjudica- | the people of the State had no interest whattions upon tax laws when there was no constitutional limitation upon the powers of the General Assembly. In the case at bar, the tax is authorized by the Constitution itself, which power and authority over the subject was supreme and paramount, and subject to no control but the Constitution of the United States. (b) All the objections urged against this tax on gross earnings, to show that it is not a tax but a seizure or legislative confiscation or sequestration of property of the plaintiff in error, may be well urged against almost every levy of taxation, state or federal. Indeed, it may be said that they are almost necessary ingredients of all taxation. There may be a difference in the degree of inequality, injustice and oppression in taxing laws, but equality, absolute justice to all tax payers and uniformity of operation upon all classes are exceptions, and not the rule of taxation. But the courts have no scales whereby to weigh and determine questions of this character. They do not sit to adjudicate upon degrees of wrong, inequality or oppression. That duty belongs to another department of the government. And when it is said that the ordinance directing the levy of this tax was for the purpose of paying a debt due the State and not discharging a public burden, or that it was the exercise of judicial and not legislative power, or that it deprives the plaintiffs in error of its property without due process of law, the plaintiffs in error have given a fair description and characterization of the ordinary tax law. Every tax, in its very nature, is a seizure of the property of the citizen for public use, without trial or judicial inquiry, and without due process of law; and whether oppressive, or relatively unequal, is not a matter of the least importance so as to affect its legal character. But it is the grandest fallacy that this tax is not such, because the proceeds are to be applied to the payment of a debt due by the appellant to the State and, therefore, is not for a public purpose. True, the purpose for which the tax was ordered to be collected was to pay a debt due by the plaintiff in error to the State, for interest due on its account, and for its benefit; but it was none the less a public charge and burden, which must needs be discharged by taxation of the property of the people of the State. It was a debt of the highest obligation, so far as the State was concerned; and it is difficult to conceive of one having higher claims upon the honor and good faith of a people, than the payment of its own bonded indebtedness. The tax was strictly for revenue purposes, and it can make no difference in determining its character whether the tax was appropriated to a specific purpose, or was collected and paid into the treasury, and afterwards appropriated by the Legislature. Money raised by taxation is revenue, and the obligations of the State can only be paid by applying the revenue to their payment, whether by specific or general appropriation. (c) On the theory that this tax on the gross earnings of the railroad, plaintiff in error, was a naked seizure and sequestration of so much of its property, before this court could hold that it was not levied or ordered to be levied, in the exercise of the paramount and sovereign power of taxation, it must appear, further, that Sharpless v. Mayor of Phila., 21 Pa., 147, 160; Dist. of Pittsburgh, 2 Watts & S., 323; Bank v. N. Y., 2 Black, 620, 17 L. ed. 451. *Mr. Justice Clifford delivered the [*54 opinion of the court: Much discussion of the evidence in the case will be unnecessary, as the principal facts are embodied in an agreed statement, which is made a part of the record. By the agreed statement it appears that the plaintiff Company is a corporation established by the laws of the State, and that the other plaintiff claims to be the legal owner of all the property lately owned by the Corporation. Said Company was incorporated on the 3d of March, 1851, with a capital stock of $6,000,000 divided into shares of $100 each. Pecuniary aid in large amounts was furnished to the Company by the State, as appears from several legislative Acts. Such aid was granted by the Act of the 23d of December, 1851, in terms as follows: that when evidence is produced satisfactory to the Governor that the Company has collected $50,000 on their capital stock, and that they have expended the same in the survey, location and construction of the railroad, the Governor shall cause to be issued and delivered to the Company special bonds of the State to the same amount, as a loan of public credit, bearing interest and payable as therein provided. Provision is also made in the same section that upon like proof that the Company have expended the whole of the sum realized from those bonds, and that they have also expended a further sum of the same amount of their own moneys, that the Governor shall in like manner cause to be issued and delivered to the Company further like bonds for the same amount, and so on in like manner as often as the Company shall, from time to time, furnish |