authorizing a statutory amendment of the charter.30 Express contracts of exemption from state taxation are to be strictly construed.31 Thus a charter of a railway imposing an annual tax assessed on the cost of the line, reserving the right to impose taxes on the gross earnings of the corporation and stipulating that the above several taxes shall be in lieu of other taxation, is not a contract whose obligation is impaired by a subsequent statute taxing lands owned by the railway and mortgaged as security for its bonded debt, but not used in the construction or operation of its line. So a provision in the charter of a ferry company that it "shall be subject to the same taxes as are now or hereafter may be imposed on other ferries," does not exempt the corporation from liability to pay an annual license fee on each of its boats, under the requirements of a municipal ordinance enacted under due legislative authority.33 So the charter of a street railway requiring the payment to the municipality of such annual license "as is now paid by other railway companies," is to be construed to mean that the company shall not at any future time be required to pay a greater license than that then required to be paid by other companies.34 So a general exemption of the property of a corporation from

30

Pennsylvania College Cases, 13 Wall. 190; Miller v. State, 15 id. 478; Holyoke Company v. Lyman, ibid. 500.

Tucker v. Ferguson, 22 Wall. 527; R. Cos. v. Gaines, 97 U. S. 697; Ry. Co. v. Philadelphia, 101 id. 528; Picard v. E. T., V. & G. R., 130 id. 637; Y. & M. V. R. v. Thomas, 132 id. 174; W. & W. R. v. Alsbrook, 146 id. 279; W. & St. P. L. Co. v. Minnesota, 159 id. 526; P. F. & M. I. Co. v. Tennessee, 161 id. 174; Central R. & B. Co. v. Wright, 164 id. 327; Ford v. D. & P. L. Co., ibid. 662; Citizens' Savings Bank v. Owensboro, 173 id. 636; Wells v. Savannah, 181 id. 531; Orr v. Gilman, 183 id. 278; Chicago Theological Seminary v. Illinois, 188 id. 662; cf. Citizens' Bank v. Parker, 192 id. 73.

32 Tucker v. Ferguson, 22 Wall. 527. See also Ford v. D. & P. L. Co., 164 U. S. 662.

33 W. F. Co. v. East St. Louis, 107 U. S. 365.

"Ry. Co. v. Philadelphia, 101 U. S. 528.

35

taxation is construed as referring only to the property held for the transaction of the business of the company.3 And the exemption of the capital of a corporation from taxation does not necessarily exempt its stockholders from taxation on their shares of stock.88 Nor does a statute by which lands granted to a railway company are exempted from taxation until such lands shall be sold and conveyed by that company remain operative after the full equitable title has been transferred by the railway.37 A charter granting to a corporation all the rights, powers, and privileges "granted by the charter" of another corporation, confers an exemption from state taxation contained, not in the charter to which reference is made, but in a statute amendatory thereof, and the exemption thus conferred constitutes a contract whose obligation cannot be impaired by a subsequent repeal of the statute conferring by reference the right of exemption.38 So a state may make a contract conferring the exclusive right of building a toll bridge by reference to a previously enacted statute.39 On the other hand, the incorporation of a railway by a charter investing the company "for the purpose of making and using the said road with all powers, rights, and privileges, and subject to the disabilities and restrictions that have been conferred and imposed upon" another railway company, whose charter contained an express exemption from taxation, does not confer that exemption on the former company.40 So in the case of the merger of a corporation having an exemption from state taxation for

Ford v. D. & P. L. Co., 164 U. S. 662.

38 New Orleans v. Citizens' Bank, 167 U. S. 371; cf. Shelby County v. Union & Planters' Bank, 161 id. 149.

37 W. & St. P. L. Co. v. Minnesota, 159 U. S. 526.

23 Humphrey v. Pegues, 16 Wall. 244.

"R. Cos. v. Gaines, 97 U. S. 697. See also G. & S. I. R. v. Hewes, 183 id. 66.

a limited period with another corporation having an unlimited exemption, the consolidating statute not granting any exemption, the consolidated corporation cannot claim as to property acquired from the first mentioned corporation any exemption beyond the limits contained in the charter of that corporation.41 So also a grant of immunity from taxation will not pass merely by a conveyance of the property and franchises of a railroad company, although such company may hold its property exempt from taxation.12

Express grants of peculiar privileges.

68. Express stipulations in a charter as to the privileges thereby conferred on the corporation are also within the protection of the constitutional prohibition; thus, a provision in the charter of a toll bridge company that it shall not be lawful for any person to erect another bridge within a specified distance of the bridge thereby authorized, constitutes a contract binding the state not to authorize the construction of such other bridge, but the authorization by the state of the construction of a railway viaduct does not impair the obligation of such a contract.** So, also, a statute forbidding the transfer by any bank of any note, bill receivable, or other evidence of debt, impairs the obligation of a contract created by the grant in a charter of a bank of power to receive, hold, and grant chattels and effects of what kind soever, and to receive

"Tomlinson v. Branch, 15 Wall. 460; W. & W. R. v. Alsbrook, 146 U. S. 279. See also P. G. & C. Co. v. Chicago, 194 id. 1.

42 Picard v. E. T., V. & G. R., 130 U. S. 637; People v. Cook, 148 id. 397; N. C. Ry. v. Maryland, 187 id. 258. See also N. & W. R. v. Pendleton, 156 id. 667; C. & L. T. R. Co. v. Sandford, 164 id. 578.

43

Bridge Proprietors v. Hoboken Co., 1 Wall. 116; Binghamton Bridge,

3 id. 51; cf. Williams v. Wingo, 177 U. S. 601.

"Bridge Proprietors v. Hoboken Co., 1 Wall. 116.

46

47

deposits and discount notes.45 On the same principle, a state is bound by its express contracts, not including appointments to public office, between the state and an individual for the performance of special services for a stipulated compensation, by its grants of franchises and exclusive privileges, such as the privilege of supplying a municipality with water, or gas, 48 by its contracts conceding peculiar privileges to state obligations, as, for instance, stipulating that coupons of state bonds should be receivable for taxes, or that the circulating notes of a bank should be receivable in payment for taxes,50 or of other debts due to the state,51 by contracts made by a political subdivision of the state for the payment of the principal of, or interest upon, the public debt of that subdivision,52 and by the contracts of a corporation, whose sole shareholder is the state, for the payment of the corporate debt.53 Contracts between two or more states, under which private rights have vested, are so far protected that neither state can annul or modify such contracts to the prejudice of the private rights so vested.

5 Planters' Bank v. Sharp, 6 How. 301.

* Hall v. Wisconsin, 103 U. S. 5; cf. Missouri v. Walker, 125 id. 339.

47

"N. O. W. W. v. Rivers, 115 U. S. 674; St. T. W. W. v. N. O. W. W., 120 id. 64; Walla Walla v. W. W. W. Co., 172 id. 1. See also Los Angeles v. L. A. W. Co., 177 id. 558; F. W. Co. v. Freeport, 180 id. 587; S. W. W. Co. v. Skaneateles, 184 id. 354.

48

“N. O. G. Co. v. L. L. Co., 115 U. S. 650; L. G. Co. v. C. G. Co., ibid. 683. "Hartman v. Greenhow, 102 U. S. 672; Virginia Coupon Cases, 114 id. 270; Royall v. Virginia, 116 id. 572, 121 id. 102; McGahey v. Virginia, 135 id. 662; McCullough v. Virginia, 172 id. 102.

50 Furman v. Nichol, 8 Wall. 44; Keith v. Clark, 97 U. S. 454.

“Woodruff v. Trapnall, 10 How. 190; Paup v. Drew, ibid. 218; Trigg v. Drew, ibid. 224.

52 Murray v. Charleston, 96 U. S. 432.

63 Curran v. Arkansas, 15 How. 304; Barings v. Dabney, 19 Wall. 1. "Green v. Biddle, 8 Wheat. 1; C. & C. Bridge Co. v. Kentucky, 154 U. S. 204.

Contracts between a state and its political subdivisions.

69. There can be no contract between a state and a political subdivision of a state, such as a municipality, giving to the municipality a vested right to property, for all such property rights are held by the municipality in trust for the state, and are subject to revocation at the state's pleasure.55 Therefore, a statute imposing a pecuniary penalty upon a railway, payable by it to a county of the state for its failure to locate the railway on a certain line, does not constitute a contract between the county and the railway whose obligation is impaired by a subsequent repeal of the statute.56 On the same principle, a legislative charter of a railway, granting to it power to appropriate public wharves erected by a municipality under a prior legislative grant of authority, does not impair the obligation of any contract, nor infringe upon the rights of the municipality. And a grant to a township of the power of taxation is always subject to revocation, modification, and control by the legislative authority of the state.58

57

Implied contracts in charters of incorporation.

70. The next mooted question under this clause of the Constitution was whether or not a charter of incorporation granted by a state constituted an implied contract on the part of the state, whose obligation the state could not be permitted to impair by a subsequent repeal or modification of the charter. The leading case is Trustees of Dartmouth College v. Woodward,59 judgment in which

55

Maryland v. B. & O. R., 3 How. 534; East Hartford v. H. Bridge Co., 10 id. 511; R. Co. v. Ellerman, 105 U. S. 166; New Orleans v. N. O. W. W., 142 id. 79; cf. Essex Pub. Road Board v. Skinkle, 140 id. 334. Maryland v. B. & O. R., 3 How. 534.

56

57 R. Co. v. Ellerman, 105 U. S. 166.

58 Williamson v. New Jersey, 130 U. S. 189.

50 4 Wheat. 518.