statute is to be strictly construed in favor of the public, and against the corporation, in determining whether an exemption from taxation is thereby transferred to it from another corporation. And it has been held that a statutory provision that a corporation succeeding to the rights, franchises and property of another corporation shall have all the rights, franchises, privileges and immunities enjoyed by the latter, is not to be construed as including an exemption from taxation, unless there is something else to show such an intention on the part of the legislature.56 Moreover, the provision in a legislative act, authorizing the consolidation of certain railroad companies, that the new company shall have all of the powers, privileges and immunities of the original companies must be read as provid

ing that the new company shall have all of such powers, privileges and immunities as far as, but no farther than, it is possible for such company with its distinct constitution and different officers to exercise or enjoy them, and hence when the new company is incapable of performing the conditions upon which exemptions from taxation were vested in the original companies, such exemptions do not continue in such new company.5

57

The perpetual exemption of one railroad company into which another such company which has a limited exemption is merged will not extend to the property of the latter acquired by the former unless the legislative act authorizing the merger so provides either expressly or by necessary implication, and no such implication is contained in an act which imposes upon the merging company the liabilities attaching to the company absorbed and which vests in the former company only the rights, privileges and property belonging to the latter, but, on the other hand, the only exemption of the property passing to the merging company as a result of the merger be the limited one originally applying thereto.58

will

Where the legislative act authorizing the merger of one domestic railroad company in another does not contemplate the creation of a new corporation but merely the going out of existence of one of the companies and the continuation of the existence of the other, which other acquires, under the act, enlarged powers and new stock. holders but not enlarged rights or new immunities as to the franchises and property of the extinguished company, the continuing company retains its original exemption as to its original property but secures no exemption as to the property of the extinguished company to which no exemption had been granted.59 But where one domestic railroad company, in which is vested an exemption from taxation, is merged in another, to which also an exemption has been granted, under a legislative act which did not create a corporation but extinguished the former company and enlarged the powers of the latter and granted to it all of the rights, privileges

57 Maine Cent. R. Co. v. Maine, 96 U. S. 499, 24 L. Ed. 836.

58 Tomlinson v. Branch, 15 Wall. (U. S.) 460, 21 L. Ed. 189.

59 Central Railroad & Banking Co. v. Georgia, 92 U. S. 665, 23 L. Ed. 757.

When, under the terms of the legis lative act authorizing the merger of two railroad companies, the merging company becomes vested, upon the

new

and property of the extinguished company, the respective exemptions enjoyed by the two companies prior to the merger continued. to exist following the same and could not be withdrawn by the legislature.60

When two corporations, whose capital stock is by statute exempted from taxation, consolidate themselves into a new corporation under a statute which makes no provision to the contrary, and issue shares in the new company in exchange for shares in the old companies, the right of exemption from taxation attaches to the new shares.61 It has also been held that when two railroad companies whose capital stock is exempted by statute from taxation within the state, and a third corporation created under the laws of another state, and whose road is in the latter state, consolidate into a new company, and issue shares in the new company in exchange for the shares in the old companies, the right of exemption from taxation in the first state passes into the new shares, unless a law of the first state makes provision to the contrary.62 But by granting to a consolidated railroad company, formed of a domestic company and a company chartered by a foreign state, all of the property, rights, privileges and powers granted to and vested in the companies or either of them by the act authorizing the consolidation or by any other demes e lav or by any law of the foreign state, a state does not grant to such consolidated company, as to the shares of stock in the domestic company which forms a part of it, the exemption from share-taxation which is vested in its other component company under its foreign charter but merely recognizes the existence in the consolidated company of an exemption to the extent of the shares of stock in the foreign company.

§ 4650. Abandonment, surrender or waiver of exemption. An exemption from taxation, like any other special franchise or privilege, may be surrendered or abandoned by the corporation, and thereby lost. For example, an irrevocable exemption from taxation is lost if the corporation accepts an amendment of its charter, or other grant, which is offered upon the express condition that it shall thereafter be subject to taxation, or if it accepts an amendment which is granted upon condition that, if it accepts the same, it shall

60 Southwestern R. Co. v. Georgia, 92 U. S. 676, 677, note, 23 L. Ed. 762.

61 Tennessee v. Whitworth, 117 U. S. 129, 29 L. Ed. 830.

62 Tennessee v. Whitworth, 117 U. S. 139, 29 L. Ed. 833.

63 Minot v. Philadelphia, W. & B. R. Co. (The Delaware Railroad Tax), 18 Wall. (U. S.) 206, 21 L. Ed. 888.

be subject to the provisions of the state constitution, one of which provisions is a prohibition against exemption from taxation adopted since the exemption was granted.64

As in the case of other special franchises or privileges, an aban donment or surrender of an exemption from taxation may be implied from long acquiescence in a claim of the right to impose taxes. "If an exemption from taxation," said Mr. Justice Bradley in the Supreme Court of the United States, "can be lost in any case, by long acquiescence under the imposition of taxes, it would seem that an acquiescence of sixty years, and, indeed, a much shorter period, would be amply sufficient for this purpose, by raising a conclusive presumption of a surrender of the privilege. An easement may be lost by nonuser in twenty years, and even in a less time if it is affected by positive acts of invasion. A franchise may be lost in the same way, nonuser being one of the common grounds assigned as a cause of forfeiture. Exemption from taxation being a special privilege granted by the government to an individual, either in gross, or as appurtenant to his freehold, is a franchise. Nonuser for sixty, or even thirty, years, may well be regarded as presumptive proof of its abandonment or surrender." 65 So again a corporation waives an exemption, vested in it, by voluntarily disabling itself from performing the conditions upon which such exemption was granted.66 It is only in a direct proceeding by the

64 See Memphis City Bank v. Tennessee, 161 U. S. 186, 40 L. Ed. 664; Citizens' Bank of Louisiana v. New Orleans Board of Assessors, 54 Fed. 73; Macon & A. R. Co. v. Goldsmith, 62 Ga. 463; Hannibal & St. J. R. Co. v. Shacklett, 30 Mo. 550. Compare Nichols v. New Haven & N. Co., 42 Conn. 103.

A corporation may give up its exemption from state taxation by acceptance of an act amending its charter, or conferring new privileges, without surrendering its exemption from county taxation. State v. Hannibal & St. J. R. Co., 101 Mo. 136, 13 S. W. 505.

The property-tax exemption vested in a railroad company is extinguished by the purchase of the company's property by the state on mortgage sale to satisfy the loan of certain of

*

public authorities, however, that the question of a forfeiture of an exemption from taxation can be determined, and prior to the establishment of a forfeiture in this manner, the defendant in an action of ejectment brought by a corporation to recover possession of certain property originally exempt from taxation, cannot support his defense of a tax-title to such property by a claim that the corporation had, by a nonuser of the property, forfeited its right of exemption.67

V. PRIVILEGE TAXES, LICENSES AND INCORPORATION
AND STOCK-INCREASE FEES

§ 4651. Privilege taxes and licenses. It is not within the scope of this chapter and hence not the purpose of this section to deal exhaustively and in detail with the subject of privilege taxes and licenses, nor to consider the several constructions that have been placed upon the multitude of variant statutes and municipal ordinances imposing them. Constitutional restrictions upon such impositions have been considered in earlier sections of this chapter in connection with the matter of the right to impose property taxes, and all that will appear in this section will be a general view of the indicated subject. And a better view cannot be had than the one resulting from the presentation of the matter in the words of the leading authority on the subject, Judge Cooley, who says: "It has been seen that the sovereignty may, in the discretion of its legislature, levy a tax on every species of property within its jurisdiction, or, on the other hand, that it may select any particular species of property, and tax that only, if in the opinion of the legislature that course will be wiser. And what is true of property is true of privileges and occupations also; the state may tax all, or it may select for taxation certain classes and leave the others untaxed. Considerations of general policy determine what the selection shall be in such cases, and there is no restriction on the power of choice unless one is imposed by constitution.68 The methods in

canal company and, with it, its charter exemption from taxation, and espe cially is this true when such act contains no intimation that the building of the railroad is to affect any of the original charter rights of the company. Nichols v. New Haven & N. Co., 42 Conn. 103, 131.

67 Mackall v. Chesapeake & O. Canal Co., 94 U. S. 308, 24 L. Ed. 161.

VII Priv. Corp.-60