declared unconstitutional and void; and an injunction was granted to prevent the same forming part of the terms of the sale.

9. Where a railway in another state is allowed, by act of the legislature, to locate part of its road in the State of Pennsylvania, on condition of paying to the state a certain sum annually, and also a corporation tax on so much of its capital stock as should be equal to the cost of construction of that portion of the road and its appurtenances within the state; and the expense of machine shops, foundries, passenger and freight houses, which where used to carry on the business of the company had been charged to the cost of construction, it was held they were not subject to assessment and taxation for state and county purposes.14

10. In a recent case before the Circuit Court of Ohio, it is held, that a state law which declares "that a bank shall pay a tax of six per cent upon its dividends, after deducting accustomed* expenses and losses, in lieu of all taxation whatever," is a contract the obligation of which the legislature cannot impair.15

11. It is unquestionable that the legislature may, in the charter of a corporation, fix the rate of taxation for the time being, and subsequently repeal the provision, and subject the company to a higher rate of taxation; and unless exclusive terms are used in regard to a provision limiting the rate of taxation, it will be regarded as temporary.16

14 New York & Erie Railw. v. Sabin, 26 Penn. R. 242, But the principle of this case would seem to be somewhat brought into question by the late case of Lackawanna Iron Co. v. Luzerne County, 42 Penn. St. 424, though the two decisions are not, strictly speaking, irreconcilable. It is here declared that the houses, lands, and other property of a corporation held for its private purposes, are not exempt from taxation because purchased with its capital stock upon which it is obliged to pay a tax to the Commonwealth, unless specially exempted in the charter. The court admit that the public works of a corporation, used as such, with their necessary appurtenances, are exempt from taxation; but declare that all other property, real and personal, held by them, is liable to assessment and taxation for customary purposes, in the same manner as if held by individuals. Lackawanna Iron Co. v. Luzerne County, 42 Penn. St. 424.

15

Woolsey v. Dodge, 6 McLean, 142. This decision is based upon those of the Supreme Court of the United States upon the same subject, and that those decisions are of binding authority upon all other tribunals in the republic.

16 Ohio Trust Company v. Debolt, 16 How. (U. S.) 416; Easton Bank v.

12. There is one class of exemptions from taxation prevailing in some of the states which operates rather unjustly in some cases and unequally in others. We refer to the exemption of such property from taxation as the legislature have appropriated to public use under the right of eminent domain. This will include town-houses, school-houses, and probably land and buildings appropriated to the use of supplying water to the inhabitants of towns and cities, and some others of a similar character.17

13. And the same rule has been extended to a private railway corporation; 18 but, as it seems to us, without sufficiently regarding the distinction, in this respect, between a public municipal corporation, all of whose objects and purposes are public, and wholly detached from all considerations of profit or business, and a merely business corporation, whose leading purpose is to derive profit from the use of land and erections thereon. In the former case it might well be said there was no more propriety in levying a tax upon the property of the corporation than upon that of a charitable or religious corporation, like a school or hospital or church; but in the latter case there seems to be no more reason to exempt the property of a business corporation, like a railway, from taxation, because it is allowed to be taken under the right of eminent domain, than if it were acquired by purchase in the ordinary mode.

14. And the distinction which is made in the case of railways between structures within the limits of the road-grant and those outside of those limits, although equally important for the business of the company, shows that the exemption stands on no sound principle. For if so it would scarcely be necessary to hold that a car house or a passenger station, so far as situated within the limits of the road-grant, was exempt from taxation, but if

Commonwealth, 10 Barr, 442. Christ Church v. Philadelphia, 24 Howard (U. S.), 300. In Eversfield v. Mid-Sussex Railw., 5 Jur. N. S. 776, it was held by the Lords Justices, that acts of Parliament authorizing the construction of public undertakings are to be construed strictly, with reference to the rights of those who are authorized to make them.

17 Wayland v. County Commissioners of Middlesex, 4 Gray, 500.

18 Worcester v. The Western Railw. Corporation, 4 Met. 564; Boston & Maine Railw. v. Cambridge, 8 Cush. 237.

situated without they would not be, thus necessitating the division of the same building, when used for the same purposes.

18

15. The proper distinction seems to be, that such public corporations as exist exclusively for public purposes, and not for business purposes of profit and gain, are exempt from taxation upon such property not real and personal as is fairly necessary for carrying forward their business. But such property as is owned by such corporations and applied to ordinary business purposes is not thus exempt.19

SECTION III.

Rights of Towns and Counties to subscribe for Railway Stock.

1. Such subscriptions held valid if authorized | 4, and n. 2. Some courts and judges have by legislature.

2. Such subscriptions, in another state or province, held valid.

dissented from the general view.

5. Such acts have received a very strict con

struction.

n. 1. Cases reviewed.

3. Lateral railway acts in Pennsylvania con- 6. Railways passing through must be regarded stitutional. as leading to a city.

§ 230. 1. It has been considered that a railway is so far in the nature of an improved highway, that the legislature may empower towns and counties to subscribe for stock in such companies whose roads pass through such towns or counties, and even where they tend to increase the business of roads which do pass through any portion of the territory of such towns or counties.1

19 Meeting-House in Lowell v. Lowell, 1 Met. 538.

1 Louisville & Nashville Railw. v. Davidson Co. Ct., 1 Sneed, 637; Slack v. Maysville & Lexington Railw., 13 B. Monr. 1, 26; Goddin v. Crump, 8 Leigh, 120; Penn v. Mc Williams, 1 Jones, 61; Shaw v. Dennis, 5 Gilman, 405; Cincin., Wilming., & Zanesv. Railw. v. Comm. of Cl. County, 1 Ohio St. 77; People v. Mayor of Brooklyn, 4 Comst. 419; Steubenville & Indiana Railw. v. Tr. of North Township, 1 Ohio St. 105; Sharpless v. The Mayor of Philadelphia, 21 Penn. St. 147; Moers v. The City of Reading, 21 Penn. St. 188; Bridgeport v. The Housatonic Railw., 15 Conn. R. 475; Stein v. The City of Mobile, 24 Ala. R. 591; Covington & Lexington Railw. v. Kenton Co. Ct., 12 B. Monr. 144; Cass v. Dillon, 2 Ohio St. 607; Talbot v. Dent, 9 B. Monr. 526; Nichol v. Nashville, 9 Humph. 252; Ryder v. The Alton & Sangamon Railw., 13 Ill. R. 516; Justices of Clk. Co. Ct. v. P., W. & K. River Turnpike Co., 11 B. Monr. 145; New

*

And subscriptions made by towns or cities, without any special

O., Op., & G. W. Railw. v. Succession of John McDonough, 8 Louis. Ann. 341 ; Strickland v. Mississippi Railw., cited in 21 Miss. R. 209; Dubuque Co. v. Dubuque & Pacific Railw., 4 Green, 1. But this case is overruled in Stokes et al. v. The County of Scott, 10 Iowa R. 166, and in State of Iowa v. The County of Wapello, 13 Iowa R. 388. It is not now important to discuss the principle of these conflicting decisions, since the tide of judicial opinion is almost all in one direction and not in concurrence with the latter determination. For ourselves, we are free to confess that we never could comprehend the basis upon which so many able jurists in this country have professed to perceive clearly the reasons for giving municipal corporations the power to become stockholders in railway companies. We have always felt that it was one of those cases in jurisprudence where the wish was father to the thought. See Griffith v. Comm. of Crawd. Co., 20 Ohio R. 609, where Spalding, J., assumes that, under the Ohio constitution, prohibiting the state from giving or loaning their credit" to, or in aid of, any individual, or association, or corporation whatever, and from becoming a joint owner or stockholder, in any company or association, in the state or elsewhere, formed for any purpose whatever," they cannot authorize a county, by a vote of the majority of its citizens, to subscribe for stock in a railway. But the question did not necessarily arise in the case, it having been decided upon other grounds. See also Penn. Railw. v. City of Philadelphia, 47 Penn. St. 189; Stokes v. County of Scott, 10 Iowa R. 166. Taylor v. Newbern, 2 Jones, Eq. (N. C.) 141; City of St. Louis v. Alexander, 23 Mo. R. 483. The question was here held properly referable to the voters of the district, making the subscription, by the act of the legislature. The legality of such subscriptions seems to be recognized by two recent cases in Louisiana. V., S., & Texas Railw. v. Parish of Ouachita, 11 Louis. Ann. 649; Parker v. Scogin, Id. 629. It is maintained in Maine, Augusta Bank v. Augusta, 49 Maine R. 507.

In a case in the Circuit Court of the United States, for the District of Indiana, before Mr. Justice McLean, after the most elaborate discussion upon the point of the competency of counties, by legislative permission, to make subscriptions for building railways, passing through such counties, and to issue bonds. with coupons, for the amount of such subscriptions, it seems to have been held, without hesitation, that such bonds were valid and binding upon the counties. In this case the question of the subscription was submitted to the voters of the county. 9 Am. Railw. Times, June 18, 1857. See also Cotton v. County Comm., 6. Florida R. 611; Slack v. Maysville & Lexington Railw., 13 B. Monr. 1; Cass v. Dillon, 2 Ohio St. 607; Thompson v. Kelly, Id. 647.

In Fosdick v. Village of Perrysburg, 14 Ohio State, 472, it was held, following Cass v. Dillon, 2 Id. 607, that special acts, authorizing certain municipalities to subscribe for stock and issue bonds in aid of certain railroads, were not abrogated either by subsequent changes in the constitution or by the subsequent repeal of all acts for the organization or government of municipal corporations; nor did a limitation of the taxing power for the payment of interest on such bonds remove the obligation to impose sufficient taxes to pay the interest on

act of legislation, to the stock of railways, have been held valid if confirmed by subsequent legislative sanction.2

bonds issued under such special acts, though for this purpose it should be necessary to exceed the limitation subsequently fixed. And a slight misnomer of the municipality issuing such bonds does not affect their legality. The general question of the construction of legislative acts is here ably discussed. And see Commissioners of Knox County v. Nichols, 14 Ohio State, 260. And slight misnomers and variations from directory provisions were also disregarded in Maddox v. Graham, 2 Met. (Ky.) 56. In Evansville, &c. Railw. v. Evansville, 15 Ind. R. 395, suit was brought against the City of Evansville upon a subscription to the stock of the railroad company. The contract of subscription was executed on behalf of the city by its.mayor, purported to be made in pursuance of an order of the common council, and was conditioned: 1. That the company should receive the bonds of the city at par in payment of the subscription; 2. That the bonds thus issued were not to be convertible into stock, and were to be delivered concurrently with the delivery of the certificates of stock; 3. That said certificates of stock should bear interest at the rate of seven per centum until the completion of the road to Indianapolis; 4. That the city might issue certificates for all taxes collected to pay the interest on said bonds, and that such certificates should be convertible into stock upon presentation by the holders in sums of fifty dollars, which should bear interest until the road was completed to Indianapolis. It was averred in the complaint that one hundred thousand dollars of said bonds were issued by the city, and that the city had failed

2 Bridgeport v. Housatonic Railw., 15 Conn. R. 475. The decisions in the several states seem all to have been in favor of the power of the legislature to build railways, at the public expense, of which there is perhaps no great question, for it seems to be a species of internal improvement, or intercommunication, which is, in a measure, indispensable to public interests, and public functions, in many ways.

The right, too, of the United States to do, or to aid in doing, the same, for purposes of conveying the mails, the army and its material, and for other public purposes, seems now to be almost universally conceded.

But, in regard to the power of the legislature to empower municipal corporations to subscribe for railway stock, there has been more controversy. The dissenting opinions of some of the judges, upon this question, where the majority of the court have maintained the validity of such subscriptions, would appear to have the advantage of the argument, especially where it has been attempted to impose a burden upon municipal corporations for the erection of railways beyond their territorial limits, although incidentally affecting their pecuniary interests, by way of business. The fallacy in the argument by which the leading opinions have been attempted to be maintained, if there be any, seems to consist in assuming that corporate interests of municipal corporations extend to everything affecting their general wealth and business prosperity. Whereas, in truth, we are compelled to limit such interests at a point far short of this.