Opinion of the Court.

imposed upon the Traction Company. This ordinance was accepted.

The legislation remained in this condition until April 10, 1903, when the legislature of the State passed a new act, the second section of which reads as follows:

200 U.S.

"SEC. 2. All such persons or corporations owning or operating street railways, shall sell or provide for the sale of tickets in lots of twenty, each good for one trip over the line or lines owned or operated by such person or corporation, at and for one-half the regular fare or charge collected for the transportation of adult persons, to students not more than seventeen years of age, in actual attendance upon any academic public or private school, of grades not higher than the grades of the public high schools of this State, situated within or adjacent to the town or city in which such street railway is located. Such tickets are required to be sold only upon the presentation by the student desiring to purchase the same, of the written certificate of the principal of the school upon which he is in attendance, showing that he is not more than seventeen years of age, is in regular attendance upon such school, and is within the grades hereinbefore provided. Such tickets are not required to be sold to such students, and shall not be used except during the months of the year when such schools are in actual session, and such students shall be transported at half fare only upon the presentation of such tickets."

It is insisted by the plaintiff in error that, under section 7, article X, of the state constitution, above quoted, the power to grant street railways the property rights and franchises, to construct and operate a street railway within a city, is withdrawn from the legislature and conferred, if not by express words, then by necessary implication, upon the municipal authorities. We do not so read the section. It merely provides that no such law shall be passed by the legislature granting the. right to construct and operate a street railway without first acquiring the consent of the local authorities, but we see nothing to prevent the legislature from chartering a street railway,

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provided such consent be acquired. Such we understand to be the ruling of the Supreme Court of that State in Taylor v. Dunn, 80 Texas, 652, 659, and Mayor v. Houston Street Railway Company, 83 Texas, 548. But whether an act of the legislature be necessary to charter a street railway is not involved in this case, as we are cited only to the original charter of the San Antonio Street Railway Company of 1874; although it is clear that a new charter would be inoperative to authorize the construction of the road without the consent of the municipal authorities.

Assuming, but not deciding, that the ordinance of March 16, 1899, extending the franchise of the San Antonio Street Railway, and imposing certain limitations, constituted a contract pro tanto, the question still remains whether the provision “that said street railway companies shall charge five cents fare for one continuous ride over any one of their lines, with one transfer to or from either line to the other,” constituted a contract with respect to which no further legislation upon that subject could be enacted without impairing its obligation. Even if construed as a contract, it was still subject to the provisions of the constitution of 1876, which in section 17 of the bill of rights declared that no irrevocable or uncontrollable grant of special privileges or immunities should be made; but that all privileges granted by the legislature or created under its authority shall be subject to the control thereof.

An important consideration in this connection is that the alleged contract was made twenty-three years after the constitution of 1876 was adopted, declaring that all privileges granted by the legislature shall be subject to its control. Clearly it was not deprived of that control by the fact that the contract was not entered into by the legislature itself, but by a municipal corporation, since that is but an agency of the State, to which is delegated the power to regulate street railways and other municipal franchises. We have repeatedly held that wherë a railway was originally chartered before a new constitution took effect (and hence such charter was not limited


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thereby), yet if such road be subsequently consolidated with other roads, or accepts new privileges, after a new constitution takes effect, all contracts, privileges and franchises conferred after the adoption of such constitution are subject to its provisions. Shields v. Ohio, 95 U. S. 319; Railroad Co. v. Maine, 96 U. S. 499; Railroad Co. v. Georgia, 98 U. S. 359; Keokuk &c. R. R. v. Missouri, 152 U. S. 301; Yazoo &c. Railroad Co. v. Adams, 180 U. S. 1, 23.

In this case not only did the original San Antonio Street Railway Company become extinct by the foreclosure and sale of its property, but under the ordinance of August 17, 1900, declaring the prior companies to be “now defunct,” the Traction Company also became the owner of all the property, assets, rights and privileges of another company, known as the San Antonio Edison Company, which thus became absorbed with the street railway company in the new corporation known as the Traction Company, which is admitted to have been incorporated since 1876, though the charter is not in the record. We are clearly of the opinion that under these circumstances it received its franchise under the constitution of 1876, which forbade either the legislature or the municipal authorities to make any irrevocable contract.

It is true that in this ordinance it was provided that all rights and privileges previously granted to the Street Railway Company and the Edison Company were conferred unto the Traction Company, including all the limitations, contracts and obligations, but this ordinance must be construed in connection with the constitution of 1876, which made all such privileges and franchises subject to the control thereof. Such was the view taken by the Court of Civil Appeals of Texas in this case, , which expressly waived the question whether the provision of the former ordinancc fixing a five-cent fare constituted a contract or not, declaring that if it did it was subject to further legislative control.

Under the bill of rights of that constitution the legislature could not reduce the fares to a confiscatory amount or to all

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amount which would render it unprofitable to operate the road. There is no allegation of that kind in this bill, and no evidence that the reduction of the school tickets in question would seriously impair its revenues. Indeed, it was found in the opinion of the court below that it was not contended there, and that there was nothing in the evidence tending to show, that the rate of fare claimed by the appellee under the act of 1903 is not such as to leave to the company a sufficient income to pay for repairs and a fair income on its investment.

The judgment of the Court of Civil Appeals is




No. 154. Submitted December 14, 1905.-Decided January 29, 1906.

The principle that the States cannot tax official agencies of the Federal Government does not apply to obligations such as checks and warrants available for immediate use. A tax upon them is virtually a tax upon the money which can be drawn upon their presentation.

THIS was an action by the plaintiff in error, begun in the state Superior Court to recover certain taxes paid under protest upon two checks or orders for $120,000 and $1,875, respectively, signed by the Treasurer of the United States and addressed to the Treasurer or an Assistant Treasurer of the United States, for interest accrued upon certain registered bonds of the United States, owned by the plaintiff. These checks were issued in compliance with Rev. Stat. § 3698, which requires that "the Secretary of the Treasury shall cause to be paid, out of any money in the Treasury not otherwise appropriated, any interest falling due, or accruing, on any portion of the public debt authorized by law." The checks,

Argument for Plaintiff in Error.

which were payable at the United States Treasury at San Francisco at any time within four months from their date, were not presented immediately for payment, but were withheld by the plaintiff until the first Monday in March, 1899, the day when the status of property, for the purpose of taxation, is determined. Plaintiff did not list these checks for assessment; but the assessor, in making up his roll for the ensuing year, included them, and, after a fruitless effort to be relieved from the assessment, plaintiff paid the amount of the tax and brought this suit to recover it back. There were claims for other taxes included in the action, upon which plaintiff was successful, but in respect to the tax upon the two orders above mentioned judgment went for the defendant, which was affirmed by the Supreme Court. 139 California, 205.

200 U. S.

Mr. T. C. Van Ness for plaintiff in error:

The obligation referred to is simply a check or order drawn by the Treasurer of the United States upon the Federal Treasury, in favor of plaintiff in error, for a designated amount. It shows the purpose for which it is issued, and the time and place of payment.

All property in the State, not exempt under the laws of the United States, shall be taxed in proportion to its value. Const. of California, art. XIII, §1. All stocks, bonds, treasury notes, and other obligations of the United States shall be exempt from taxation by or under state, or municipal or local authority. Rev. Stat. § 3701.

That this check is an obligation see Webster's Dict.; Civ. Code California, § 1427.

If the Treasury Department had not issued this order, the obligation of the Government to meet the interest upon its bonds would not have been changed; nor could the property right of plaintiff in this, as yet, uncollected interest be made the subject of taxation by state authority. Bank of Kentucky v. Commonwealth, 9 Kentucky Law Rep. 46.

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