U.S. Supreme Court
Humphrey Pegues, 83 U.S. 16 Wall. 244 244 (1872)
83 U.S. (16 Wall.) 244
An act of assembly of a state passed in 1851 to incorporate a railroad company chartered a corporation, but did not exempt its property from taxation. An act passed in 1855 to amend its charter did exempt it. In 1863, an act was passed conferring on a company which had been incorporated in 1849 to build a railroad, but which had never yet found inducements sufficient to make it build the road, all the rights, powers, and privileges "granted by the charter" of the first-named road. Held:
1st. That the property of the second road was made, by the Act of 1863, exempt from taxation.
2d. That the legislature could not repeal the Act of 1863 so as to subject it to taxation.
On the 16th of December, 1851, the Legislature of South Carolina, by "an act to incorporate the Northeastern Railroad Company," chartered the corporation now known by that name. This act contained no exemption of the company's property from taxation, and by its terms was to continue in force for fifty years from the ratification thereof.
On the 19th of December, 1855, the same legislature passed another act, entitled "An act to amend the charter of the Northeastern Railroad Company, and for other purposes." This act enacted:
"SECTION 1. That the stock of the Northeastern Railroad
Company and the real estate that it now owns, or may hereafter acquire, which is connected with or subservient to the works, authorized in the charter of the said company, shall be, and the same is hereby, exempted from all taxation during the continuance of the present charter of the said company."
Prior to the date of either of these acts, that is to say, on the 19th of December, 1849, the same legislature had, by an act entitled "An act to charter the Cheraw & Darlington Railroad Company," incorporated the company of that name. This act, after authorizing the formation of the company and the raising of the stock, provided thus:
"SECTION 5. That for the purpose of organizing and forming this company . . . all the powers, rights, and privileges granted by the charter of the Wilmington and Manchester Railroad Company to that company shall be and are hereby granted to the Cheraw & Darlington Railroad Company,"
The powers, rights, and privileges here referred to as granted by the charter of the Wilmington and Manchester Railroad Company, whose name is above italicized, to that company, did not include any exemption of its property from taxation.
The Cheraw & Darlington Railroad Company thus, as above mentioned, incorporated in 1849, had not up to the 17th of December, 1863, built its road; and on the day and year last mentioned the same legislature amended its charter by the passage of the act which thus enacted:
"SECTION 1. That section 5 of an act entitled 'An act to charter the Cheraw & Darlington Railroad Company,' ratified the 19th day of December, A.D. 1849, be amended so as to read as follows, to-wit:"
"That all the powers, rights, and privileges granted by the charter of the Northeastern Railroad Company are hereby granted to the Cheraw & Darlington Railroad Company, and subject to the conditions therein contained."
Soon after this amendatory act of 1863 was passed, the Cheraw & Darlington Railroad, which had been lying dormant since 1849, was built and put in operation.
These different enactments above mentioned being in chanroblesvirtualawlibrary
force, the state officers of counties in South Carolina where the Cheraw & Darlington Railroad was situate, acting under the authority of the legislature of the state, imposed certain taxes on the stock and property of that company, and were proceeding to enforce payment of them, when one Pegues, a stockholder in Mississippi, filed a bill in the court below praying an injunction to restrain the collection. The court granted the injunction, and from this, its action, the county officers appealed. The question was whether (as Pegues, the complainant, contended) the Act of December 19, 1855, "to amend the charter of the Northeastern Railroad Company," &c., and exempting its property from taxation, formed a part of its charter when, on the 17th of December, 1863, the privileges granted to that company were conferred on the Cheraw & Darlington company; or whether (as the State of South Carolina contended) the privileges thus conferred were limited to those granted to the Northeastern company by its original charter or act of incorporation, passed in 1851, by which no exemption from taxation was conferred. chanroblesvirtualawlibrary