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Lynchburg to Bristol, a point on the line be tween the states of Virginia and Tennessee, was built and operated by the Virginia & Tennessee Railroad Company from 1855, the date of its completion, till November 12, 1870. The Atlantic, Mississippi & Ohio Railroad Company was incorporated under the provisions of an act of the general assembly of the state of Virginia, passed June 17, 1870, and entitled "An act to authorize the formation of the Atlantic, Mississippi and Ohio Railroad Company."

The avowed object of the organization of this company was to acquire the property and franchises of the Norfolk & Petersburg Railroad Company, whose railroad extended from Norfolk, Va., to Petersburg; of the Southside Railroad Company, owning a railroad between Petersburg and Lynchburg; and of the Virginia & Tennessee Railroad Company, whose road extended from Lynchburg to Bristol.

ror were sued out of this court. 11 S. E. 1062. The record discloses the following facts: On March 11, 1837, the legislature of Virginia passed an act entitled "An act prescribing certain regulations for the incorporation of railroad companies," in the twenty-fourth section whereof it was provided that it should be lawful for the president and directors of the company to charge certain rates of toll for the transportation of persons, not exceeding six cents per mile; for the transportation of goods, produce, merchandise, and other articles, except gypsum and lime, not exceeding eight cents per ton per mile; for the transportation of gypsum and lime, not exceeding four cents per ton per mile; and for the transportation of the mail such sum as they may agree for. And in the twenty-fifth section it was provided that when the net profits shall amount to a sum equal to the capital stock expended, with 6 per cent. per annum interest thereon, then the tolls which the president and directors shall be entitled to demand and receive on their railroad shall be fixed and regulated from time to time by the board of public works, or by such agent or agents as may be appointed by the legislature for that purpose, so as to make them sufficient to pay a net profit of 6 per cent. per annum on the capital stock, etc.; and in the thirty-fifth section it was provided that any part of any charter or act of incorporation granted agreeably to the provisions of the act "shall be subject to be altered, amended, or modified by any future legislation as to them shall seem proper, except so much thereof as prespectively, shall be absorbed by the said Atscribes the rate of compensation or tolls for transportation."

On March 24, 1818, and while the act of 1837 was in force, the legislature of Virginia passed an act incorporating the Lynchburg & Tennessee Railroad Company, by the second section whereof it was provided that, whenever 1,200 shares of stock shall have been subscribed, the subscribers, their executors, administrators, and assigns, should be declared to be a body politic and corporate, such should be "subject to all the provisions of the act prescribing certain general regulations for the incorporation of railroad companies, passed March 11, 1837, and the supplements thereto"; and by the third section it was provided that "the tolls of said company shall be regulated and prescribed by the president and directors of said company; provided, however, that if at any time here after the rates of toll and transportation shall enable the president and directors, after payment of all necessary expenses, and after setting apart a fair and reasonable sum for renewal and repairs, to divide more than fifteen per cent. on their capital stock invested, then the legislature may regulate and reduce the tolls and transportation so as to enable the company to divide fifteen per cent. and no more."

Under these acts a railroad extending from

It was provided in the fifth section of the act that "the said Atlantic, Mississippi and Ohio Railroad Company shall be a body corporate and politic, vested with all the rights and privileges conferred by the law of this commonwealth, and subject to such as apply to railroad corporations thereof generally"; and in the fourteenth section that "as the stock of the said Norfolk and Petersburg, Southside, Virginia and Tennessee, and Virginia and Kentucky Railroad Companies [the several companies authorized by the act to subscribe to*and be absorbed by the Atlantic,' Mississippi & Ohio Railroad Company], re

lantic, Mississippi and Ohio Railroad Company, as contemplated in the terms of this act, the said company shall become absolutely vested with all the rights of franchise and of property which belong to the same."

On November 12, 1870, the organization of the new company was finally completed, and thereafter the said line of railroad from Norfolk to Bristol was operated, under one general management, by the said company, until in March, 1876, a bill was filed in the United States circuit court for the district of Virginia by trustees named in certain mortgages executed by the Atlantic, Mississippi & Ohio Railroad Company, to foreclose the same. By a decree in this case the works, property, and franchises of the Atlantic, Mississippi & Ohio Railroad Company were sold to the Norfolk & Western Railroad Company, and to that company the same were conveyed by deed of May, 1873, in conformity with the provisions of the Code of Virginia.

Under the foregoing state of facts, it is contended that the Norfolk & Western Railroad Company, as a legal successor to the previous companies, is entitled to fix and regulate its rates for transportation until the profits of the traffic shall enable the presi dent and directors to divide more than 15 per cent. per annum, which has never hap

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pened, and that to enforce the rates prescribed by the general law would deprive the said company of its legal rights, and would impair the obligation of the contract alleged to subsist between the state of Virginia and the company.

Railroad Company, the plaintiff in error, by becoming the legal successor to the Atlantic. Mississippi & Ohio Railroad Company, was brought within the scope of those general laws, and cannot successfully claim immunity under the charters of the previous companies.

It may be added, perhaps unnecessarily, that even apart from the clause which, in terms, subjected the Atlantic, Mississippi & Ohio Railroad Company, and consequently the Norfolk & Western, as its successor, to the general law prescribing rates, there was no clause or provision in the original charters which can be interpreted as necessarily meaning that subsequent corporations, organized under later laws, can assert a valid succession to immunities and privileges like those in question. We have frequently held that in the absence of express statutory di

The record discloses that the supreme court of appeals disposed of this contention as follows: "The argument is that the provisions of the charter of the Lynchburg & Tennessee Railroad Company constituted a contract with the company, the obligation of which cannot be impaired by subsequent legislation, and, moreover, that by the fourteenth section of the charter of the Atlantic, Mississippi & Ohio Railroad Company, which was granted in 1870, it was provided that the last-mentioned company should, among other things, be*vested with all the rights of franchise of the Virginia & Tennessee and the Lynchburg & Tennessee Railroad Com-rection, or of an equivalent implication by panies, and that the defendant company succeeded to those rights, as the successor of the Atlantic, Mississippi & Ohio Railroad Company. The argument, however, overlooks the fifth section of the act incorporating the Atlantic, Mississippi & Ohio Railroad Company, which must be read in connection with the said fourteenth section, whereby it was provided that the company should be subject to all the laws of the commonwealth which apply to the railroad corporations generally; and the act of 1853 is, as we have seen, such a law. The defendant company, as the successor, by purchase, of the Atlantic, Mississippi & Ohio Railroad, is, of course, bound by this provision, and is consequently subject to the provisions of the act last above mentioned. other words, it succeeded to the right to operate a railroad, but subject, as to the regulation of its tolls, to the general laws of the commonwealth; for the right of a state to reasonably limit the amount of charges by a railroad company for the transportation of persons and property within its own jurisdiction, unless restrained by some contract in the charter, or unless what is done amounts to a regulation of foreign or interstate commerce, is well settled, and not disputed."

In

These views of supreme court of appeals, construing the railroad laws of the state, and pronouncing on their legal effect, seem to us to be sound, and to properly dispose of the question. If the original companies did have a contract with the state, whereby, until a certain amount of money should be earned, they should have the right to fix and regulate their charges, it is clear that the Atlantic, Mississippi & Ohio Railroad Company accepted their charter with a distinct provision that the company should be subject to the general laws of the commonwealth, one of which was the very law, then and still in force, which prescribed the tariff of rates enforced in the present suits. It is equally obvious that the Norfolk & Western

necessary construction, provisions in restriction of the right of the state to tax the property or to regulate the affairs of its corporations do not pass to new corporations, succeeding, by consolidation or by purchase under foreclosure, to the property and ordinary franchises of the first grantee; that a mortgage of the franchises and property of a corporation, made in the exercise of a power given by statute, confers no right upon purchasers at a foreclosure sale to exist as the same corporation, but to reorganize as a new corporation, subject to the laws exist. ing at the time of the reorganization. This we have stated to be a salutary rule of interpretation, founded upon an obvious public policy, which regards such exemptions as in derogation of the sovereign authority and of common right, and therefore not to be extended beyond the exact and express requirements of the grant, construed strictissimi juris. Morgan v. Louisiana, 93 U. S. 217; Wilson v. Gaines, 103 U. S. 417; Railway Co. v. Miller, 114 U. S. 176, 5 Sup. Ct. 813. The judgments of the supreme court of appeals are affirmed.

(156 U. S. 577) PITTSBURGH & S. COAL CO. v. BATES, Sheriff. (March 4, 1895.) No. 3.

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CONSTITUTIONAL LAW INTERSTATE COMMERCE-
TAXATION OF GOODS BROUGHT FROM
FOREIGN STATE.

Coal transported to Louisiana from a foreign state on the navigable waters of the United States, and owned by a citizen of such foreign state, may be taxed while afloat in barges on the Mississippi river in Louisiana, as other property in such state is taxed, without violating Const. U. S. art. 1. § 8. cl. 3, providing that congress shall have power to regulate commerce among the states, where it has reached its destination for the purpose of use or sale. Brown v. Houston, 5 Sup. Ct. 1091, 114 U. S. 622, followed.

In Error to the Supreme Court of the State of Louisiana.

The Pittsburgh & Southern Coal Company, a corporation organized under the laws of Pennsylvania and domiciled in the city of Pittsburgh, Pa., and a citizen of that state, filed its petition in the Seventeenth judicial district court of the parish of East Baton Rouge, La., alleging that the petitioner was and had been for some time engaged in the business of buying and selling coal from the mines in Pennsylvania upon the Mississippi 1iver and other navigable rivers of the country.

That it was the owner of a large number of vessels and barges, which it had brought with cargoes of coal, and was therewith engaged in trade, commerce, and navigation upon the Mississippi river and other navigable rivers of the United States.

That, in the course of the trips and voyages of its vessels and barges down the Mississippi river, it was often convenient, advantageous, or necessary that the vessels should be stopped and moored at different places or landings on the Mississippi river, for different periods of time, in the states of Tennessee, Mississippi, Arkansas, and Louisiana, pending the arrangements being made by its officers and agents for the reception and disposition of the cargoes of the vessels.

That during the current year it had sent down the Mississippi river a large number of vessels, the property of the petitioner, to supply the trade of Louisiana along the Mississippi and its navigable tributaries, which vessels and cargoes of coal were consigned to Schneidau, the agent of the petitioner in New Orleans.

"stock in trade," was intended to describe the cargoes of coal on board the vessels of the petitioner which were moored in the Mississippi river about nine miles above the city of Baton Rouge.

That the tax claimed by Bates, sheriff and ex officio tax collector of the parish of East Baton Rouge, was not due or owing by petitioner or by the cargoes of the vessels, and the pretended assessment and tax claimed thereunder were illegal, unconstitutional, null, and void, for the following reasons:

(1) That the pretended assessment, under which the tax was claimed, was vague, indefinite, erroneous, and informal, and not such as was required by the laws of Louisi

ana.

(2) That the coal formed the cargoes of vessels owned in Pittsburgh, Pa., and engaged in trade and commerce between different states; was still upon the vessels upon the navigable waters of the United States; had never been landed in the parish of East Baton Rouge or the state of Louisiana; had never been mixed or commingled with the mass of the movable property in that state, and never ceased to be the property of the petitioner.

(3) That petitioner was not carrying on any business in the parish of East Baton Rouge; had no agent there; and the coal was not stock in trade on hand, but formed the cargoes of vessels employed in interstate commerce, and lying temporarily off the shore of East Baton Rouge, in the Mississippi river, from whence they would proceed at proper and convenient times to places of final destination.

(4) That the tax was in violation of article 1, § 8, cl. 3, Const. U. S., the clause which provides that congress shall have power to

among the several states.

That the agent, Mr. Schneidau, not having yet made the necessary arrangements to receive and dispose of the cargoes of the vessels at New Orleans or elsewhere, the vessels, being about 100 in number, were stop-regulate commerce with foreign nations and ped and moored in the Mississippi river at a convenient mooring place about nine miles above the port of Baton Rouge, where they awaited the orders of petitioner's agent, to be thence navigated to such place or places as he might deem convenient or advantageous to the trade in which petitioner was engaged, and the vessels and the cargoes of coal therein were still the property of the petitioner.

(5) That it was in violation of article 1, § 10, cl. 2, Const., the clause which provides that no state shall, without the consent of congress, lay any imposts or duties except what may be absolutely necessary for executing the inspection laws.

(6) That it was in violation of article 4, § 2, cl. 1, Const., the clause which provides that the citizens of each state shall be entitled to all the privileges and immunities of citizens in the several states.

(7) That it was in violation of article 1, § 9, cl. 5, Const., the clause which declares that no tax or duty shall be laid on articles ex

That one J. W. Bates, who was the sheriff and ex officio tax collector of the parish of East Baton Rouge, had notified the petitioner through said Schneidau, its agent, that it was indebted for state taxes for the year 1887 on movable property (as stock on hand) | ported from any state. belonging to the petitioner, as per the assessment rolls and state and parish books of 1887, in the sum of $1,200, and threatened, unless the amount was paid within three days, to seize, advertise, and sell movable property of the petitioner sufficient to pay the debt.

And the petitioner was informed and believed, and so averred, that by the movable property referred to, and designated as

The petitioner represented that notwithstanding the illegality, nullity, and unconstitutionality of the assessment and tax, for the reasons given, and numerous other reasons, J. W. Bates, sheriff and ex officio tax collector of the parish of East Baton Rouge, had threatened and intended and would, unless restrained by an injunction, seize, advertise, and sell the vessels of the petitioner and their cargoes of coal, or some

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part thereof, in order to pay the illegal tax; ; ged in trade and commerce between different which action of Bates, if permitted, would injure the petitioner in a sum exceeding $6,000, and cause it irreparable injury.

Whereupon the petitioner prayed that a writ of injunction issue to restrain Bates from thus seizing, advertising, or selling the vessels and coal of the petitioner lying in the Mississippi river, and herein before fully described, in order to pay any tax of 1887, and from in any manner interfering with the property under color of enforcing the alleged tax.

The petition was signed by the attorneys of petitioner, and verified by one of them. A writ was accordingly issued restraining Bates, the sheriff and ex officio tax collector, from seizing or advertising the vessels and coal of the petitioner for the alleged tax.

The sheriff and tax collector appeared in answer to the petition, and denied its allegations; admitting, however, that in his capacity as tax collector he had caused the demand to be served upon the agent of the petitioner, and it was his intention, unless restrained by order of the court, to seize and sell the property.

And he averred that the coal was personal, taxable property, belonging to the Pittsburgh & Southern Coal Company as "stock in trade," situated in the parish of East* Baton Rouge, and owed the state tax to the state of Louisiana, and was legally assessed according to the laws of the state.

On the trial it was admitted that the property on which the demand was made was on the Mississippi river, in boats of the plaintiff in injunction, which were moored to the shores, the boats being known as "coal boats," and that the coal was brought down in them from mines in Pennsylvania, on the navigable streams leading therefrom.

Mr. Schneidau, the agent of the company, testified that the company was taxed at Pittsburgh; that some of the coal moored at Natchez was sold there and some at other points below; that the company sold its coal in different states; that “East" Baton Rouge was not the final destination of the coal stopped there, but that some of it was there sold; that he had been the agent of the company since December, 1886; that during the whole of that time the company had kept a fleet of canal boats up the river in this parish,-on an average of about 50 boats,-averaging about 100 or more boats and barges; that coal was sold at different times by the company along the river, but that all was sold within the state of Louisiana.

It was admitted that the assessor made the assessment in due form of law, and that the property, consisting of the vessels and coal, had been assessed at $200,000.

The defendant, at the hearing of the case, moved that the injunction be dissolved, and the suit be dismissed, with costs.

And it was contended that the cargoes of vessels owned in Pittsburgh, Pa., and engav.15s.c.-27

states, were still upon the vessels upon the navigable waters of the United States, had never been landed in that parish or in the state of Louisiana, had never been mixed or commingled with the mass of movable property of the state, and had never ceased to be the petitioner's property; that it carried on no business in the parish of East Baton Rouge, had no agent there, and that the coal was not stock on hand in trade, but formed, the cargoes of vessels employed in commerce, and then lying temporarily off the shore of Baton Rouge, on the Mississippi, whence it would be sent to its final destination, and that the tax violated article 1, § 8, cl. 3, Const. U. S.,-the power of congress to regulate commerce with foreign nations and among the several states,-and article 1, § 10, cl. 2, Const., which declares that no state shall, without the consent of congress, lay any imposts or duties on imports or exports; and that it was in violation of article 4, § 2, cl. 1, Const., the article which provides that citizens of each state shall be entitled to all the privileges and immunities of citizens of the several states, and of article 1, § 9, cl. 5, Const., which provides that no tax or duty shall be laid on articles exported from any state.

On the 24th of January, 1888, the court of the Seventeenth judicial district of East Baton Rouge gave judgment dissolving the injunction in the case, and decreeing that the suit be dismissed at plaintiff's cost, and that the defendant proceed to collect the tax.

From this judgment the Pittsburgh & Southern Coal Company appealed to the supreme court of the state.

On the 5th of March, 1888, that court affirmed the judgment of the Seventeenth judicial court of East Baton Rouge. 3 South. 642.

From this judgment of affirmance the case was brought to the supreme court of the United States by the plaintiff in the original suit on writ of error.

Chas. W. Hornor, Geo. A. King, and W. S. Benedict, for plaintiff in error. M. J. Cunningham, for defendant in error.

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

The plaintiff company in this court objects to the judgment of the supreme court of Louisiana dissolving the injunction in the original suit which inhibited the state tax collector from selling coal lying in boats on the Mississippi river to pay taxes alleged to be due to the state thereon, and directing that the defendant proceed to collect the tax.

It is contended that the law under which the sheriff and tax collector assumed to act exempted the coal from taxation as property in process of transportation and not on consignment for sale. Such would seem to be

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the direct declaration of the law of Louisiana; and, independently of that direction, such would seem to be the import of the decision of this court in Brown v. Houston, 114 U. S. 622, 5 Sup. Ct. 1091. That case resembles, in important features, the present one. It was brought by the plaintiff in error in the civil district court for the parish of Orleans in the state of Louisiana, in December, 1880, to enjoin the state tax collector from seizing and selling a certain lot of coal belonging to the plaintiff situated in New Orleans. They alleged that they were residents and did business in Pittsburgh, Pa.; that the state tax collector had officially notified their agents that they were indebted to the state of Louisiana in the sum of $352.80, state tax for the year 1880, upon a certain lot of Pittsburgh coal assessed as their property, and valued at $58,800; that they were delinquent for the tax to the tax collector, who was about to seize, advertise, and sell the coal to pay the tax.

They alleged that they were not indebted to the state of Louisiana for the tax, and that they were the sole owners of the coal, and were not liable for any tax thereon, having paid all taxes legally due for the year 1880 on the coal in Pennsylvania, and that the coal was simply under the care of their agents, Brown & Jones, in New Orleans, for sale.

They further alleged that the coal was mined in Pennsylvania, and was from that state imported into the state of Louisiana, as their property, and was then and had always remained in its original condition, and never had become mixed or incorporated with other property in that state. That when the assessment was made the coal was afloat on the Mississippi river, in the parish of Orleans, in the original condition in which it was exported from Pennsylvania, and that the agents notified the board of assessors of the parish that the coal did not belong to them, but to the plaintiffs, and was held as stated, and was not subject to taxation; and they protested against the assessment for that purpose.

The tax collector notified the agents of the plaintiffs that, in conformity with provisions of the law of 1880, the state tax assessed to them on movable property in the parish, which amounted to the sum of $352.80, fell due and should have been paid before the 1st day of the current month; that they had become delinquent for the tax on the 1st day of December; and that after the expiration of 20 days he, as tax collector, would advertise for sale the movable property upon which the taxes were due, in the manner provided by law for judicial sales, when he would sell such portion of the property for cash, and without appraisement, as they should point out and deliver to him, and, In case they did not point out and deliver to him sufficient property, that he would sell, without appraisement, the least quantity of

the movable property which any bidder would buy for the amount of the taxes assessed.

The defendant answered with a general denial, admitting the assessment of the taxes and his intention to sell the property for its payment.

Witnesses were produced to sustain the allegations of the petition.

One of the witnesses testified that he was the general agent and manager of the business of Brown & Jones, of New Orleans, and that when the assessment complained of was made the firm had paid the state taxes due upon their capital stock, and had paid state and city licenses to do business for that year; that at the time of assessment of the tax the coal upon which it was levied was in the hands of Brown & Jones, as agents of the plaintiffs, for sale, having just arrived from Pittsburgh, Pa., by flatboats, and was in the boats in which it had arrived and afloat on the Mississippi river; that it was held by Brown & Jones to be sold for the account of plaintiffs by the boat load, and that since that time more than one-half of it had been exported from the country on foreign steamships, and the balance sold in the interior of the state for plantation use, by the flatboat load.

One of the plaintiffs testified that they were the owners of the coal in question; that it was mined in Allegheny county, Pa.; that the tax of two or more mills was paid on it in Pennsylvania, as a state tax thereon in 1880, and that a tax was also paid in the county of Allegheny in the year 1880; that it was shipped from Pittsburgh, Pa., in 1880, and was received in New Orleans in its original condition and its original packages, and was still owned by the plaintiffs.

The Louisiana statute of April 9, 1880, under which the assessment was made, provided:

That in the calendar year 1880, and for every succeeding calendar year, there should be levied, annually, taxes amounting in the aggregate to six mills on the dollar of the assessed valuation to be made on all property situated within the state of Louisiana, except such as was expressly exempted from taxation.

Exemptions from taxation, under the constitution of Louisiana, did not affect the question considered, and upon the case as thus made the district court of the parish dissolved the injunction and dismissed the suit. On appeal to the supreme court of the state, the judgment was affirmed, and it came to this court on writ of error.

The errors assigned were that the tax in question violated article 4, § 2, cl. 1, of the federal constitution; and article 1, § 8, cl. 3, and article 1, § 10, cl. 2, of the same instrument. The clauses herein referred to were:

(1) That the citizens of each state shall be entitled to all privileges and immunities of citizens in the several states;

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