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and, if the execution of the note had not been denied, the testimony of Abraham would not have been necessary.

But in view of the nature of the controversy before the jury, putting in issue the execution of the note sued on, we agree with the trial court in regarding the evidence as admissible. While each one of the facts so elicited was, when regarded singly, of small importance, yet, taken together, they were worthy of consideration; and we do not perceive that any rule of evidence was violated in submitting them to the jury.

It is argued that there was error in admitting statements by the witness Abraham as to the contents of the letters that had passed between him and Owens, without producing the letters, or accounting for their absence. But the record does not disclose that any specific objection was made to the evidence for that reason, though objection was made generally to the admission of any conversation between the witness and Owens, which was not had in the presence of the defendants, as incompetent and irrelevant. But the force of this is broken by the observation that what passed between the witness and Owens, whether in conversation or in letters, was of matters that happened prior to the making of the note, and was admitted only to show the relations of the parties, and the circumstances in which the note was made.

In view of the fact, disclosed by the record, of the death of Owens before the trial, and the consequent necessity of resorting to circumstantial evidence, we think the rules on this subject were not unduly relaxed in permitting a full disclosure of the res gestae.

There are several additional assignments of error, which involve the action of the court in admitting evidence bearing on the question of the execution of the note in suit.

So far as such assignments present the vexed subject of the introduction into a cause of papers, not otherwise competent, for the purpose of enabling the jury to make a comparison of handwriting, we are relieved from discussion by the existence of an Oregon statute which provides that "evidence respecting the handwriting may also be given by a comparison, made by a witness skilled in such matters, or the jury, with writings admitted or treated as genuine by the party against whom the evidence is offered." 1 Hill's Ann. Laws Or. § 765. We regard this statute as constituting the law of the case, and as warranting the action of the court in the particulars complained of.

The seventh assignment avers error in permitting several witnesses to testify as to whether they would act upon the signatures of the defendants attached to the note sued on if they came to them in an ordinary business transaction. Such a question, standing alone, might be objectionable, but the record discloses that each of these witnesses had testified to his acquaintance with the hand

writing of one or more of the defendants, and to his belief of the genuineness of the signatures of the parties with whose handwriting he was acquainted; and, as a means of showing the strength and value of the witness' opinions, the question put was allowable.

We have more difficulty in disposing of the errors assigned in the 9th, 10th, 11th, and 12th specifications. Two letters of Owens, the nominal payee of the note, who was not a party to the suit, were admitted in evidence; and Edward Failing, an expert witness, was asked to state whether, judging from the letters produced, he believed that Owens could have forged the names upon the note in dispute so as to correspond so nearly with the names upon the comparison papers. Certain stub certificates were admitted in evidence, and George W. Jones testified that his name; thereon written was his signature; and there-* upon the expert was asked whether or not, in his opinion, the name of Jones, so written, would be an easier name to counterfeit than that of M. B. Holmes. That the ordinary handwriting of Owens, as shown in his letters, was such as to convince an expert that he was not able to successfully imitate the signatures of other persons, may have been entitled to some weight. That Owens could, in the opinion of the expert, have as readily counterfeited the handwriting of Jones as that of the defendant Holmes, seems to be fanciful, and entitled to little or no weight. If these offers had been rejected by the court, such rejection could not have been successfully assigned as error. Still, we cannot perceive that the case of the defendants was injured by the admission of this trifling evidence. As has been frequently said, great latitude is allowed in the reception of circumstantial evidence, the aid of which is constantly required; and therefore, where direct evidence of the fact is wanting, the more the jury can see of the surrounding facts and circumstances the more correct their judgment is likely to be. "The competency of a collateral fact to be used as the basis of legitimate argument is not to be determined by the conclusiveness of the inferences it may afford in reference to the litigated fact. It is enough if these may tend, even in a slight degree, to elucidate the inquiry, or to assist, though remotely, to a determination probably founded in truth." Stevenson v. Stewart, 11 Pa. St. 307.

The modern tendency, both of legislation and of the decision of courts, is to give as wide a scope as possible to the investigation of facts. Courts of error are especially unwilling to reverse cases because unimportant and possibly irrelevant testimony may have crept in, unless there is reason to think that practical injustice has been thereby caused. These observations seem to sufficiently dispose of the errors assigned, and the judgment of the court below is accordingly affirmed.

(147 U. S. 190) ILLINOIS CENT. R. CO. v. CITY OF DECATUR.

(January 9, 1893.)

No. 56.

RAILROAD COMPANIES EXEMPTION FROM TAXATION-SPECIAL ASSESSMENTS

1. Under Act Ill. Feb. 10, 1851, § 22, which exempts the Illinois Central Railroad Company, incorporated by the act, "from all taxation of every kind, except as herein provided for,' and provides that the taxes thereby imposed on the company shall be paid into the state treasury, and applied to the payment of state indebtedness, the exemption does not extend to a special tax to defray the cost of grading and paving a street, assessed on land forming a part of the company's right of way, on the ground that the property is enhanced in value by the improvement. 18 N. E. Rep. 315, affirmed. McGee v. Mathis, 4 Wall. 143, distinguished.

2. Such charge is not within the exemption from "taxation," as being a special tax, rather than a special assessment, within the distinction recognized by Const. Ill. 1870, art. 9, § 9, giving corporate authorities power "to make local improvements by special assessment, or by special taxation of contiguous property, or otherwise," since the tax is for the cost of a local improvement charged upon the contiguous property benefited thereby. 18 N. E. Rep. 315, affirmed.

In error to the supreme court of the state of Illinois.

Proceedings by the city of Decatur, Ill., to assess a special tax for the cost of grading and paving a street in said city on contiguous property, including land forming part of the right of way of the Illinios Central Railroad Company. Judgment of the county court confirming the assessment was affirmed by the supreme court of the state. 18 N. E. Rep. 315. The railroad company brings error. Affirmed.

Statement by Mr. Justice BREWER:

On February 10, 1851, an act was passed by the general assembly of Illinois incorporating the Illinois Central Railroad Company. By it the company was made the beneficiary of the land grant from congress to the state, of September 20, 1850, (9 St. p. 466.) The twenty-second section was in these words:

"Sec. 22. The lands selected under said act of congress, and hereby authorized to be conveyed, shall be exempt from all taxation under the laws of this state until sold and conveyed by said corporation or trustees; and the other stock, property, and effects of said company shall be, in like manner, exempt from taxation for the term of six years from the passage of this act. After the expiration of said six years, the stock, property, and assets belonging to said company shall be listed by the president, secretary, or other proper officer, with the auditor of state, and an annual tax for state purposes shall be assessed by the auditor upon all the property and assets, of every name, kind, and description, belonging to said corporation. Whenever the taxes levied for state purposes shall exceed three fourths of one per centum per annum,

such excess shall be deducted from the gross) proceeds or income *herein required to be paid by said corporation to the state, and the said corporation is hereby exempted from all taxation, of every kind, except as herein provided for. The revenue arising from said taxation, and the said five per cent. of gross or total proceeds, receipts, or income aforesaid, shall be paid into the state treasury, in money, and applied to the payment of interest-paying state indebtedness, until the extinction thereof: provided, in case the five per cent. provided to be paid into the state treasury, and the state taxes to be paid by the corporation, do not amount to seven per cent. of the gross or total proceeds, receipts, or income, then the said company shall pay into the state treasury the difference, so as to make the whole amount paid equal at least to seven per cent. of the gross receipts of said corporation."

By section 27 it was provided that "this act shall be deemed a public act, and shall be favorably construed, for all purposes therein expressed and declared, in all courts and places whatsoever."

In 1887, proceedings were had in the county court of Macon county to defray the cost of grading and paving a certain street in the city of Decatur. Under those proceedings two separate parcels of land belonging to the Illinois Central Railroad Company, and forming part of its right of way, were assessed to the amount of $262.70. The company objected to this assessment on the ground that by its charter it was exempted from all taxation, of every kind, except as therein provided for, and that there was no provision permitting such an assessment. This objection was overruled, and a judgment entered by the county court against the two parcels of land. Exception was taken, and an appeal allowed to the supreme court of the state. In that court the ruling of the county court was sustained, and the judg ment affirmed, and the case is now brought here for review by writ of error.

B. F. Ayer, for plaintiff in error. E. S. McDonald and Hugh Crea, for defendant in

error.

*Mr. Justice BREWER, after stating the facts in the foregoing language, delivered the opinion of the court.

The single question in this case is whether this special tax for a local improvement is within the exemption from taxation granted to the railroad company by section 22 of the act of 1851.

Between taxes-or "general taxes," as they are sometimes called, by way of distinction, which are the exactions placed upon the citizen for the support of the government, paid to the state as a state, the consideration of which is protection by the state-and special taxes or special assessments, which are imposed upon property within a limited area

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for the payment for a local improvement, supposed to enhance the value of all property within that area, there is a broad and clear line of distinction, although both of them are properly called taxes, and the proceedings for their collection are by the same officers, and by substantially similar methods. Taxes proper, or general taxes, proceed upon the theory that the existence* of government is a necessity; that it cannot continue without means to pay its expenses; that for those means it has the right to compel all citizens and property within its limits to contribute; and that for such contribution it renders no return of special benefit to any property, but only secures to the citizen that general benefit which results from protection to his person and property, and the promotion of those various schemes which have for their object the welfare of all. "The public revenues are a portion that each subject gives of his property in order to secure or enjoy the remainder." 13 Montesq. Sp. Laws, c. 1; Association v. Topeka, 20 Wall. 655, 664; Opinions of Judges, 58 Me. 591; Hanson v. Vernon, 27 Iowa, 28, 47; Judd v. Driver, 1 Kan. 455, 462; Association v. Wood, 39 Pa. St. 73, 82; Bank v. Hines, 3 Ohio St. 1, 10.

On the other hand, special assessments or special taxes proceed upon the theory that, when a local improvement enhances the value of neighboring property, that property should pay for the improvement. In Wright v. Boston, 9 Cush. 233, 241, Chief Justice Shaw said: "When certain persons are so placed as to have a common interest among themselves, but in common with the rest of the community, laws may justly be made, providing that, under suitable and equitable regulations, those common interests shall be so managed that those who enjoy the benefits shall equally bear the burden." In McGonigle v. Allegheny City, 44 Pa. St. 118, 121, is this declaration: "All these municipal taxes for improvement of streets rest, for their final reason, upon the enhancement of private properties." In Litchfield v. Vernon, 41 N. Y. 123, 133, it was stated that the principle is "that the territory subjected thereto would be benefited by the work and change in question." In Cooley on Taxation (page 416) the matter is thus discussed by the author: "Special assessments are a peculiar species of taxation, standing apart from the general burdens imposed for state and municipal purposes, and governed by principles that do not apply generally. The general levy of taxes is understood to exact contributions in return for the general benefits of 'government, and it promises "nothing to the persons taxed beyond what may be anticipated from an administration of the laws for Individual protection and the general public good. Special assessments, on the other hand, are made upon the assumption that a portion of the community is to be especially and peculiarly benefited, in the enhancement of the value of property peculiarly situated

as regards a contemplated expenditure of public funds; and, in addition to the general levy, they demand that special contributions, in consideration of the special benefit, shall be made by the persons receiving it. The justice of demanding the special contribution is supposed to be evident in the fact that the persons who are to make it, while they are made to bear the cost of a public work, are at the same time to suffer no pecuniary loss thereby; their property being increased in value by the expenditure to an amount at least equal to the sum they are required to pay. This is the idea that underlies all these levies. As in the case of all other taxation, it may sometimes happen that the expenditure will fail to realize the expectation on which the levy is made, and it may thus appear that a special assessment has been laid when justice would have required the levy of a general tax; but the liability of a principle to erroneous or defective application cannot demonstrate the unsoundness of the principle itself, and that which supports special assessments is believed to be firmly based in reason and justice."

These distinctions have been recognized and stated by the courts of almost every state in the Union, and a collection of the cases may be found in any of the leading text-books on taxation. Founded on this distinction is a rule of very general acceptance,-that an exemption from taxation is to be taken as an exemption simply from the burden of ordinary taxes, taxes proper, and does not relieve from the obligation to pay special assessments. Thus, in an early case, (In re Mayor, etc., of New York, 11 Johns. 77, 80,) under a statute which provided that no church or place of public worship "should be taxed by any law of this state," the court observed: "The word 'taxes' means burdens, charges, or, impositions put or set upon persons or property for public uses, and this is the definition. which Lord Coke gives of the word 'talliage,' (2 Inst. 532;) and Lord Holt, in Brewster v. Kidgeil, Carth. 438, gives the same definition, in substance, of the word 'tax.' The legislature intended by that exemption to relieve religious and literary institutions from these public burdens, and the same exemption was extended to the real estate of any minister, not exceeding in value fifteen hundred dollars. But to pay for the opening of a street, in a ratio to the 'benefit or advantage' derived from it, is no burden. It is no talliage or tax, within the meaning of the exemption, and has no claim upon the public benevolence. Why should not the real estate of a minister, as well as of other persons, pay for such an improvement, in proportion as it is benefited? There is no inconvenience or hardship in it, and the maxim of law that 'qui sentit commodum debet sentire onus' is perfectly consistent with the interests and dictates of science and religion."

This rule of exemption has been applied in cases where the language granting the ex

institutions, because they tend to a better order of society. Or it may be that a sum, in gross or annual installments, is received in lieu of taxes. But in every case there is the implied fact of some consideration passing for the grant of exemption. But those considerations, as a rule, pass to the public generally, and do not work the enhancement of, the value of any particular area of property. So, when the consideration is received by the public as a whole, the exemption should be, and is, of that which otherwise would pass to such public, to wit, general taxes.

emption has been broad and comprehensive. I prosperity increased; churches and charitable Thus in Baltimore v. Cemetery, 7 Md. 517, the exemption was from "any tax or public imposition whatever," and it was held not to relieve from the obligation to pay for the paving of the street in front. In Cemetery v. Buffalo, 46 N. Y. 506, the exemption was from "all public taxes, rates, and assessments," and it was held not to discharge from liability for a paving assessment. A like rule was held in Paterson v. Society, 24 N. J. Law, 385, where the exemption was from "taxes, charges, and impositions." And in Bridgeport v. Railroad Co., 36 Conn. 255, the railroad company was held liable for a street assessment, although it paid a sum of money to the state which, by its charter, was to be "in lieu of all other taxes."

Indeed, the rule has been so frequently enforced that, as a general proposition, it may be considered as thoroughly established in this country. It is unnecessary to refer to the cases generally. It may be well, however, to notice those from Illinois. In Trustees v. City of Chicago, 12 Ill. 403, (decided in the lower court at May term, 1849, and be'fore the passage of the act creating the contract relied upon, and by the supreme court at the June term, 1851,) the exemption was "from taxation of every description by and under the laws of this state," and it was held that that did not include an assessment made to defray the expense of opening a street. It was observed: "In our opinion, the exemption must be held to apply only to taxes levied for state, local, and municipal purposes. A tax is imposed for some general or public object. * * The assessment in question has none of the distinctive features of a tax. It is imposed for a special purpose, and not for a general or public object." See, also, Chicago v. Colby, 20 Ill. 614; Peoria v. Kidder, 26 Ill. 351; Pleasant v. Kost, 29 Ill. 490, 494; Illinois Cent. R. Co. v. Commissioners of Drainage Dist., 129 III. 417, 21 N. E. Rep. 925. Nor is this a mere arbitrary distinction created by the courts, but one resting on strong and obvious reasons. A grant of exemption is never to be considered as a mere gratuity,a simple gift from the legislature. No such intent to throw away the revenues of the state, or to create arbitrary discriminations between the holders of property, can be imputed. A consideration is presumed to exist. The recipient of the exemption may be supposed to be doing part of the work which the state would otherwise be under obligations to do. A college or an academy furnishes education to the young, which it is a part of the state's duty to furnish. The state is bound to provide highways for its citizens, and a railroad company, in part, discharges that obligation. Or the recipient may be doing a work which adds to the material prosperity or elevates the moral character of the people. Manufactories have been exempted, but only in the belief that thereby large industries will be created, and the material

Another matter is this: In a general way, it may be said that the probable amount of future taxes can be estimated. While, of course, no mathematical certainty exists, yet there is a reasonable uniformity in the expenses of the government; so that there can be, in advance, an approximation of what is given when an exemption from taxation is granted, if only taxes proper are within the grant. But, when you enter the domain of special assessments, there is no basis for estimating in advance what may be the amount of such assessments. Who can tell what the growth of the population will be in the vicinity of the exempted property? Will there be only a little village, or a large city? Will the local improvements which the business interests of that vicinity demand be trifling in amount, or very large? What may be the improvements which the necessities of the case demand? Nothing can be more indefinite and uncertain than these matters; and it is not to be expected that the legislature would grant an exemption of such unknown magnitude, with no corresponding return of consideration therefor.

And, again, as special assessments proceed upon the theory that the property charged therewith is enhanced in value by the improvement, the enhancement of value being the consideration for the charge, upon what principles of justice can one tract within the area of the property enhanced in value be released from sharing the expense of such improvement? Is there any way in which it returns to the balance of the property within that area any equivalent for a release from a share in the burden? Whatever may be the supposed consideration to the public for an exemption from general taxation, does it return to the property within the area any larger equivalent with the improvement than without it? If it confers a benefit upon the public, whether the general public or that near at hand,-a benefit which justifies an exemption from taxation,-does it confer any additional benefit upon the limited area by reason of sharing in the enhanced value springing from the improvement? Obviously not. The local improvement has no relation to or effect upon that which the exempted property gives to the public as consideration for its exemption. Hence there is manifest inequity in relieving it from a share of the

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cost of the improvement. So, when the rule is laid down that the exemption from taxation only applies to taxes proper, it is not a mere arbitrary rule, but one founded upon principles of natural justice.

But it is said that it is within the competency of the legislature, having full control over the matter of general taxation and special assessments, to exempt any particular property from the burden of both, and that it is not the province of the courts, when such entire exemption has been made, to attempt to limit or qualify it upon their own ideas of natural justice. Thus, in the case of College v. Boston, 104 Mass. 470, an assessment for altering a street was held within the language of the college charter exempting the property "from all civil impositions, taxes, and rates." See, also, the following authorities: Brightman v. Kirner, 22 Wis. 54; Southern R. Co. v. Mayor, etc., 38 Miss. 334; State v. City of Newark, 27 N. J. Law, 185; City of Erie v. First Universalist Church, 105 Pa. St. 278; Olive Cemetery Co. v. City of Philadelphia, 93 Pa. St. 129; City of Richmond v. Richmond & D. R. Co., 21 Grat. 604. This is undoubtedly true. So we turn to the language employed in granting this exemption to see what the legislature intended; and we notice that by the charter certain sums are to be paid into the state treasury, in money, and applied to the payment of interest-paying state indebtedness until the extinction thereof, and it is in consideration of this payment that the corporation is exempted from all taxation of every kind. Inasmuch as the payment by the corporation is to be always made into the state treasury, and for a time to be applied only to a single state purpose, a very plausible argument might be made to the effect that all that was intended to be granted was an exemption from state taxes, leaving the property, like other property, still subject to municipal taxation. That question, however, is not before us; and it has been held by the supreme court of Illinois, in Neustadt v. Railroad Co., 31 III. 484,-and properly so, in view of the provision in section 27 that the act "shall be favorably construed for all purposes therein expressed and declared,"-that the charter exemption extends to all general municipal taxation.

Ob

But can any intent be derived from the language of these exempting clauses to include within them special assessments? viously not; for out of the state treasury seldom, if ever, is money appropriated for merely local improvements. The rule is to charge them upon the property in the vicinity; and when the transaction between the parties, the state and the corporation, contemplates the payment into the state treasury of a sum in lieu of taxation, it must be held to contemplate a release only as to such charges as would ordinarily find their way into the state treasury for legislative appropriation. So that, independently of the use of the word

"taxation," which has under such circumstances received almost a uniform construction, the terms of the agreement between the state and corporation excluded special assessments, and included only those matters which are the ordinary equivalent of state taxation.

But, again, it is urged that, whatever may be the rule obtaining in the courts of the states, this court has given a broader and more extended meaning to clauses exempting from taxation; and the case of McGee v. Mathis, 4 Wall. 143, is cited. But the case does not warrant the contention. The facts in that case were these: In 1850 the United States granted to the state of Arkansas all the swamp and overflowed government lands within its limits on condition that the proceeds of the lands, or the lands themselves, should be applied, as far as possible, for reclaiming them by means of levees and drains. The state accepted the grant, and by an act of the legislature, in 1851, provided for the sale of the lands. In the fourteenth section of this act it was provided that "to encourage, by all just means, the progress and the completing of the reclaiming such lands, by offering inducements to purchasers and contractors to take up said lands, all said swamp and overflowed lands shall be ex-. empt from taxation for the term of ten years, or until they shall be reclaimed." In 1855 this section was repealed, but prior thereto McGee had become the owner of certain of these lands lying in Chicot county. In 1857 an act of the legislature, local in its nature, provided for the making of levees and drains in Chicot county, and authorized a special tax to meet the cost. This special tax was assessed upon the unreclaimed swamp lands of McGee, as well as other lands, and the question was whether this special tax impaired the contract of exemption provided by the fourteenth section of the act of 1851, and it was held that it did. The argument is thus stated by the chief justice, in delivering the opinion of the court, on page 157: "It was strenuously urged for the defendant that the exemption contemplated by the statute was exemption from general taxation, and not from special taxation for local improvements benefiting the land, such as the making of levees, and many authorities were cited in support of this view. The argument would have great force if the provision for exemption had been contained in a general tax law, or in a law in framing which the legislature might reasonably be supposed to have in view general taxation only. But the provision under consideration is found in a law providing for the construction of levees and drains, and devoting to that object funds supposed to be more than adequate, derivect from the very lands exempted, and the exemption is for ten years, or until reclaimed, and is offered as an inducement to take up the lands, and thus furnish those funds. It is impossible to say that this exemption was not from taxation for the purpose of making

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