The inquiry is, whether this contract goes further and exempts the road, after it has been completed for two years, from all other than state taxation, and whether the State is precluded from providing another mode of valuation for state taxes. It is manifest that legislation which, it is claimed, relieves any species of property from its due proportion of the general burdens of government, should be so clear that there can be neither reasonable doubt nor controversy about its terms. The power to tax rests upon necessity and is inherent in every sovereignty, and there can be no presumption in favor of its relinquishment. While it were better for the interest of the community that this power should on no occasion be surrendered, this court has always held that the Legislature of a State, unless restrained by constitutional limitations, has full control over the subject and can make a contract with a corporation to exempt its property from taxation, either in perpetuity or for a limited period of time. If, however, on any fair construction of the legislation, there is a reasonable doubt whether the contract is made out, this doubt must be solved in favor of the State. In other words, the language used must be of such a character as, fairly interpreted, leaves no room for controversy. The present claim is of perpetual exemption from county and municipal taxation, quite as essential to the wants of the people as taxation for state purposes. upon it. But, with the completion of the road, the reason for the exemption ceased, and it is difficult to see what inducement there was for the State to grant perpetual immunity from local taxation. In the original charter of the Company, granted in 1849, there was no exemption from taxation. It is true, the amendment of 1851 altered this, so that the road was relieved of any public charge or tax for the period of five years, but this privilege expired in 1856, and the provisions of the Act of 1852 on this subject were more favorable to the Company. Besides receiving, under this Act, a large body of lands donated by Congress to the State to aid in the construction of railroads, it was enabled to complete its entire road and run it for two years without paying any tax whatever. By this means it secured immunity from taxation until 1868, and any further immunity in this direction, if conceded by the State, would have been a mere gratuity. In view of all the legislation on this subject, it would seem quite clear that the General Assembly of Missouri, while recognizing, in behalf of this road, the propriety of temporary exemption from taxation, had no purpose to continue these exemptions indefinitely. But, it is said, the section covers the whole subject of taxation, and as it provides for state taxes only, it excludes any other. If, in the declaratory part of it, the road had been subject to state taxation," there would have been plausibility in the argument, to say the least, that the Legislature intended to waive other taxation. But the provision is, that after the temporary exemption from all taxation ceases by its own limitation, the property of the road shall be subject to taxation at the same rate as other property in the State. There is no restriction in this language, nor is there any rule of law by which a word can be imported to limit its meaning. It is true, special provision is only made for the ascertainment and payment of a state tax, and nothing is said about the manner of ascertaining and paying other taxes. But this does not prove an intentional abandonment of all but state taxes. It proves nothing more than that the Legislature thought proper, in the particular of state taxes, to modify the general revenue law so far as this corporation is concerned, leaving the provisions of this general law operative upon local taxation. It is conceded that this exemption is not granted in express terms, but it is argued that, taking the whole section together, it arises by necessary implication. We do not think so. Immunity from all taxation was given until the road was built and in operation two years; but after this it is declared "That the road-bed, buildings, machinery, engines, cars and other property of such completed road, at the actual cash value thereof, shall be subject to taxation at the rate assessed by the State on other real and personal property of like value." This is a declaration that the taxation imposed upon the property of this Company shall not be different from the taxation imposed upon other similar property, which conforms to the constitutional requirement that all property subject to taxation shall be taxed in proportion to its value." If other property is charged with the payment of county, school and municipal taxes, why not the property of this Company? In no other way can the principle of equality in taxation, so essential to good government, be secured. If the Legislature intended to apply a different rule in this case, it were easy to have said that the property of this Company shall be subject to taxation for state purposes." Instead of this, it is declared to be "subject to taxation." This, obviously, means general taxation-such taxation as other property of like value is subjected to. No words of limitation are used, and none can be implied against the interests of the State. It is never for the interest of the State to surrender the power of taxation, and an intention to do so will not be imputed to it unless the language employed leaves no other alter-taxation cannot be sustained. native. It is claimed, however, that even if this The motive for temporary exemption is ap- be so, the State is inhibited from altering the parent enough, because, until the road was able special provision on the subject of state taxato earn something, taxation might bear heavily |tion. This provision prescribes a mode for as It would be a hard rule to apply to the legislation of a State to hold that the circumstance of making in the amendment to a charter of a railroad corporation special provision for ascertaining the tax due the State (nothing being said about the manner of ascertaining other taxes), works an exemption of the property of the Corporation from all taxation not levied for state purposes. Silence on such a subject cannot be construed as a waiver of the right of the State in this regard. There must be something said which is broad enough to show clearly that the Legislature intended to relieve the Corporation from a part of the burdens borne by other real and personal property. This was not done in this case, and the claim of exemption from local As it is the peculiar province of the highest court of a State to decide whether or not the method pursued in the assessment and collection of taxes is in conformity with the law of the State, this decision is controlling. certaining the tax due the State. The president | were rightfully assessed, under the general revof the company is required to furnish to the enue laws, but that the taxes for state purposes auditor a statement, under oath, of the actual were unauthorized, because section 12 of the cash value of the property to be taxed, on which Act of 1852 had not been repealed either by an the company is directed to pay the tax due the express provision of a subsequent law or by State, within a certain time, to the Treasurer, necessary implication, and being in force, state under penalties. And the claim is that the State taxes could only be collected in the way pointed Legislature is prohibited from passing any law out in that section. to assess the property of the company for taxation for state purposes in a different manner. It is not so written in the statute, nor, indeed, can any proper inference be drawn from what is written that the Legislature intended to contract with the Corporation in this particular. It would be strange, indeed, if it were so, for the mode of assessment might not work well, and yet, if it formed the subject of a contract, it could not be changed. The principal thing in which the State and Company were interested was the actual cash value of the property to be charged. This value was the basis of taxation, and it could not be a matter of moment how it was fixed, provided it were done correctly. | In this result both the State and Corporation had an equal interest. Both were interested in the means adopted only so far as they were efficient to secure the contemplated object. The exigency of the State required the revenue on the basis of actual value, and this, it is to be presumed, theCorporation was willing to accord. At any rate it was the duty of the State, in justice to other property owners, to use the appropriate means to ascertain this value. The ordinary method of doing this is by the instrumentality of officers appointed for the purpose, but the State asked the railroad, through its president, to make the valuation, to which the Corporation assented. This way of reaching the result was less expensive to the State, but more expensive to the Corporation than the usual mode in which taxes are assessed. The presi-. dent of the Company could not make a true | It was not made until after this suit was instituted and, doubtless, not promulgated until the rendition of the decree. The assessors of Saint Louis County, in this case, imposed taxes for state, county, school and city purposes. The bill charged that the whole proceeding was illegal, and sought to restrain the entire levy. On demurrer, the circuit court held that the city taxes were wrongfully levied, and issued the proper order restraining them, and dismissed the bill so far as it related to state,county and school taxes. The court should have included state taxes in the restraining order. On this account the decree must be reversed and cause remanded, with directions to enter an order enjoining the collection of the state tax in the bill mentioned. In all other respects the decree is right. Decree reversed. Cited-92 U. S., 675; 106 U. S., 569, 571; 4 Dill, 53; 3 MCA., 134, 135; 5 Sawy.. 289; 6 Sawy., 570: 73 Me.. 40 Am. Rep., 370; 72 N.Y., 236; 28 Am. Rep., 143. 433; valuation without the expenditure of time and ROBERT S. FRENCH, Trustee of LAURA J. labor, and this repeated, year by year, as values of property constantly fluctuate. There is no presumption that he would not do it, conscien tiously, according to his best judgment, but still it was a favor to the State for him to do it at all, and certainly no one can contend that a State cannot waive at any time a provision for its own benefit. Apart from this view of the subject, the provision in question was simply a mode for ascertaining the true value of the property to be taxed, and if, on trial, it should turn out not to be the best mode for the purpose, surely the Legislature has a right to change it and adopt another. This no one will question, unless the Legislature has surrendered its power over the subject by contract, which, in our opinion, has not been done in this case. But, until the Legislature appoints another mode for assessing and collecting the revenue due the State from this Corporation, it must proceed in conformity with the provisions con tained in the Act of 1852. The whole subject we have discussed recently came before the Supreme Court of Missiouri in the case of R. R. Co. v. Cass Co., 53 Mo., 17. The assessor of Cass County had levied taxes for both state and county purposes on the property of the company in the county, and the question was whether these levies were authorized. The court held that the taxes for county purposes FRENCH, Appt., was made, was too late. 2. Where defendant filed his answer to an original bill, subscribed and sworn to by himself, and signed by his counsel, he thus entered his appearthe court. ance and placed himself within the jurisdiction of 3. Where a final decree, covering the entire original case existed, further relief sought can be reached only by a supplemental bill, if at all. It is a gross error to allow an amended bill to be filed. NOTE.-Effect of appearance by counsel or attorney; unauthorized appearance; what is an appearance. See note to Shelton v. Tiffin, 47 U. S. (6 How.). Res judicata; conclusiveness of judgment. See note to Bank of U. S. v. Beverly, 42 U. S. (1 How.), 134. 163. 4. An amended bill is esteemed a part of the origi- | Robert S. French, refused to proceed further nal bill and a continuation of the suit. New process in the business. He never executed a deed puris not necessary upon an amended bill as to defendants who are already before the court. 5. Where a decree is made in the State Court, and an amended bill is filed, which is transferred to the Circuit Court, the latter court cannot, on the amended bill, set aside the original decree. 6. Where a decree pro confesso has been improperly entered against one, the proper method of relief is by motion to the court to vacate it. [No. 360.] Argued Apr. 6, 7, 1875. Decided Apr. 19, 1875. A PPEAL from the Circuit Court of the United States for the Eastern District of Virginia. The case is stated by the court. Mr. Justice Swayne delivered the opinion of the court; This is an appeal in equity from the decree of the Circuit Court of the United States for the Eastern District of Virginia. suant to the sale, nor received any part of the purchase money from either Hay or Stewart. His entire connection with the property terminated with the sale. He did nothing further whatsoever. Under an arrangement between Stewart and the occupant of the house, Stewart procured possession of the house and furniture. In February, 1866, the complainant filed his original bill in the Circuit Court for the County of Alexandria. It sought to set aside the sale made by Hay as fraudulent and void, to charge Stewart with the rents and to recover possession of the property. On the 8th of December, 1866, the court decreed that the sale was void; that the possession should be restored to the complainant; that Stewart was chargeable with the rents, and that the case should be referred to a master to ascertain the amount. . An appeal was thereupon taken by Stewart to the proper district court of the State, which affirmed the decree of the Circuit Court of the County. Upon the return of the case to the latter court, it was referred to a master to take an account of the rents pursuant to the decree. The master reported that Stewart was chargeable with the sum of $3,276.90, from which was to be deducted the payments he had made on the note of McCullough of $500, and interest on such payments, making an aggregate of $887.24, leaving a balance against Stewart of $2.387.66. On the 2d of June, 1869, the court decreed that he should pay that sum, with interest from the 26th of October, 1868. At the same time leave was given to the complainant to file an amended bill. He thereupon filed such bill, charging that Hay had participated in the frauds of Stewart, and should be held equally liable with him for rents, and that both were In the year 1856, James McCullough owned the house and lot described in the original bill in this case. They were situate in the Town of Alexandria. On the 20th of October in that year, he executed a deed conveying the premises to George W. Brent, as trustee, to secure the payment of $3,000 to J. N. Harper. On the first of January, 1859, McCullough leased the premises, together with the furniture in the house, to James S. French for five years, at an annual rent of $600. In March, 1859, McCullough conveyed the premises to Robert S. French, the complainant, in trust for the benefit of Laura J. French, the wife of James S. French, and at the same time assigned to Robert S. French the lease to James S. French, the rent to be applied to the payment of the in-chargeable for loss and damage touching the debtedness of McCullough to Harper, secured by the deed of trust to Brent. war. At the breaking out of the civil war in 1861, this debt was paid, except $500, for which Harper held the note of McCullough. The premises were then in the possession of James S. French and his wife. The lease had been canceled, but the lessee was to pay this note. At the beginning of the war, James S. French and Brent went south, within the rebel lines, and did not return until after the close of the French left his sister in charge of the premises. Harper also went south. His wife put the note into the hands of a lawyer for collection. McCullough died in 1861. The defendant, Hay, was appointed his administrator. In 1862, Stewart claimed to own the note, and at his instance an order was procured from the County Court of Alexandria, substituting Hay as trustee in place of Brent in the deed of trust of McCullough. The deed of McCullough to Robert S. French, in trust for the wife of James S. French, was not put on record until the 7th of November, 1865. furniture in the house when Stewart took possession. The bill was taken as confessed by Hay, and on the 21st of August, 1869, it was decreed that he should pay the complainant, on account of rents and for the detention and damage as to the furniture, $3,389.36, with interest from the 26th of October, 1868. Thereafter, Hay and Stewart applied to the court to vacate the decrees against them, and for leave to appear and answer upon the grounds that no process upon the amended bill had been served upon them, and that they had no notice or knowledge of its pendency against them until a short time before, and Hay averred that the attorney who had acted for him in that behalf, had done so wholly without his consent or knowledge. On the 23d of December, 1869, the court vacated the decree of the 21st of August, 1869, against Hay, but at the same time and in the same order, decreed against him for the sum of $2,387,66, with interest from the 26th of October, 1868, on account of the rents, and ordered that an issue should be tried on the law side of In the following month, Hay, as trustee, ad- the court touching the furniture, and that Hay vertised and sold the premises to Dr. Ripley, and Stewart should have leave to answer. for the sum of $2,600. Ripley, learning there They thereupon answered as to the whole case. was difficulty about the title and in regard to On the 8th of February, 1869, they moved the getting possession, refused to pay for the prop-court for an order for the removal of the case erty, but transferred his bid to Stewart. Hay, to the Circuit Court of the United States for having learned the existence of the deed to that District, pursuant to the Act of Congress of the 2d of March, 1867. An order was made | to." The amended bill was filed on the 17th of and the cause was removed accordingly. In the Circuit Court of the United States, Hay and Stewart severally moved the court to vacate the several decrees against them, made by the Circuit Court of the County. These motions were heard and the several decrees were annulled. Testimony was thereafter taken, upon both sides. On the 13th of October, 1878, when the case was ready for hearing, the complainant moved the court to remand it to the court whence it came. The motion was overruled The case was then heard upon the merits and the bill dismissed. The complainant appealed to this court, and the case is thus brought before us for review. In the argument here, the objection touching the removal of the case from the State Court was refused. It was insisted that the Act of Congress upon the subject had not been complied with in respect to time, in several important particulars. The point was not made in the court below until the testimony was all taken, the case was ready for hearing, and nearly three years had elapsed since the transfer was made. The objection came too late. Under the circumstances it must be held to have been conclusively waived. Taylor v. Longworth, 14 Pet., 174; Brasher v. Van Cortlandt, 2 Johns Ch., 242; Skinner v. Dayton, 5 Johns. Ch., 191. We shall consider the record as regards Stew art and Hay as if they were not joint defend ants. The case as to each presents a distinct aspect, and requires a separate examination. that month. It sought to make Hay liable also for the rents, and Hay and Stewart liable for the loss and damage as to the furniture. This did not in anywise affect the previous litigation and decrees as to Stewart under the original bill. Those decrees continued to stand as if the amended bill had not been filed. Young v. Frost, 1 Md., 394; Bridge Co. v. Stewart, 3 How., 413; Walsh v. Smyth, 3 Bland, 20; Keene v. Wheatley, 9 Am. L Reg., 60. The general rule is that an amendment of a bill gives a defendant the right to answer as if he had not answered before. 1 Dan. Ch. Pr., 411, Perk. ed., 1865. In the state of the case which existed when the amendment here in question was made, no amendment could be allowed. It was then too late. A final decree covering the entire original case subsisted. The court had no power over that decree and never attempted to exercise any. The further relief sought could be reached, if at all, only by a supplemental bill. Thorn v. Germand, 4 Johns. Ch., 363; Shephard v. Merril, 3 Johns. Ch., 423; Candler v. Pettit, 1 Paige, 168: Stafford v. Howlett, 1 Paige, 200; Bowen v. Idley, 6 Paige, 46; Ross v. Carpenter, 6 McLean, 382; Walsh v. Smyth, 3 Bland, 20; Sanborn v. Sanborn, 7 Gray, 142; Verplanck v. Ins. Co., 1 Edw., 46. It was a gross error to allow the amended bill to be filed. But the point was not made in the state court nor in the court below, nor in the argument here. The case, according to our views, can be properly disposed of without reference to it. We have, therefore, laid it out of view. An amended bill is esteemed a part of the original On the 2d of June, 1866, he filed his answer bill and a continuation of the suit. But one recto the original bill. It was subscribed and sworn ord is made. But the amendment is sometimes to by himself, and signed by Mr. Doddridge as of such a character that it is regarded as an inhis counsel. He thus entered his appearance dependent graft upon the original case and the and placed himself within the jurisdiction of beginning of a new lis pendens. Miller v. M'Inthe court. The proceedings thereafter, includ- tyre, 6 Pet., 61; Walsh v. Smyth [supra]. Stewing his appeal to the State District Court, ap-art complained that Dulany appeared and acted pear to have been in all things regular down to for him as to the amended bill without authorthe removal of the case to the Circuit Court of ity. Whether Dulany did so or not is immathe United States. The decree of the 8th of terial. New process is necessary unless waived December, 1866, from which the appeal was upon a supplemental bill and a bill of revivor, taken, was a final one. Forgay v. Conrad, 6 but not upon an amended bill as to defendants How., 204: Thomson y. Dean. 7 Wall., 342 [74 who are already before the court. Cunningham U. S, XIX., 94]. When affirmed by the ap- v. Pell, 6 Paige, 657; Longworth v. Taylor, 1 pellate court it was conclusive of the rights of McLean, 516. Being in court they are bound the parties as to everything covered by it, and to take notice of the filing of such bills as of could not be affected by any action of the Cir- any other proceeding in the case. In the Encuit Court of the county or of the United States glish practice the complainant is required to in the subsequent progress of the case. That serve a copy of the amendment upon the solicitdecree was res judicata of the most solemn char- or of the defendant (Woodhouse v. Meredith, 1 acter. Campbell v. Campbell, 22 Gratt.. 649; Jac. & W., 207), but this, it is believed, israrely Thomson v. Albert, 15 Md., 282; Hammond v. if ever done in the courts of the States, unless Inloes, 4 Md., 139. required by an established rule of practice or a special order in the case. In the courts of the United States the subject is regulated by the 28th Rule of equity practice. The State Court, by an order of the 23d of December, 1869, directed an issue to be tried as to the furniture, and gave Stewart leave to answer the amended bill. I. As to Stewart. The decree of the 2d of June, 1869, ascertained the amount due from Stewart for the rents, and ordered that he should pay it. This terminated the litigation under the original bill. After the close of that term-except for reasons not claimed nor shown to exist-the court had no power to revoke or modify this decree. Cameron v. Mc Roberts, 3 Wheat.,591; Bk. v. Moss, 6 How., 31; U. S. v. The Glamorgan, 2 Curt., 236. Nothing of the kind was attempted. At the same time that this decree was entered leave was given to the complainant to file the amended bill, Wm. Dulany, Esq., an attorney of the court, "appearing in court and consenting there This was all he had a right to claim, and left him nothing to complain of. In this condition of things the case went to the Circuit Court of the United States. That court possessed the same power in the case as the State Court while the case was before it-no more and no less. It certainly did not sit as a court of errors or appeal with jurisdiction to reverse the final decree of and opportunity to defend being refused, the the State Court made under the original bill. decree was in effect another decree pro confesso. That would be contrary to the intent and mean- It certainly was not a decree upon the merits ing of the Act of Congress under which the re- after a hearing upon the charge as to the rents. moval was made. Its authority as to Stewart After the transfer of the case he applied to was limited to the allegations of the amended the Circuit Court of the United States to vacate bill in regard to the furniture. So far as he was this decree upon the same showing as in the concerned it presented no other subject of liti-State Court, and it was done. A bill for fraud gation, and nothing else was open to examination under it. If that bill had not been filed there could have been no transfer as to him. On the 22d of October, 1872, the court below, as before stated, set aside all the decrees of the State Court and ordered that "this case do now stand for hearing on the bill, answer and plead ings.' The entire case was thus opened anew, as if nothing had been done under the original bill by the State Court. This was clearly an error. We think the liability of Stewart as to the furniture was well made out by the complainant. The court below, by an issue at law, as directed by the interlocutory order of the State court, or by a reference to a master, should have ascertained the amount and decreed accord ingly. Kelsey v. Hobby, 16 Pet., 269. The order vacating the decrees of the State Court as to Stewart, made under the original bill, is vacated. The final decree dismissing the bill as to him is reversed, and the case will be remanded to the court below with directions to proceed in conformity with this opinion. II. As to Hay. He also filed an answer to the original bill. Like Stewart's, it was subscribed and sworn to by himself, and was subscribed by counsel. He, too, was bound to take notice of the filing of the amended bill. But the original bill claimed no decree against him. The amended bill, as to him, made an entirely new case. It set up the first claim against him as to the rent and the furniture. His own affidavit and the other proofs showed clearly that Dulany had no authority to appear as his counsel; that he had no actual knowledge of the filing of the bill until after the decree pro confesso was taken against him, and that he had a complete defense. It is within the discretion of a court of equity, upon a proper showing, to set aside a decree pro confesso upon such terms as it may see fit to pres ribe. could not have been maintained, because there was no foundation for the charge. A bill of review would not have availed him, because there was no error apparent upon the face of the decree nor upon the record. The circumstances under which the decree was rendered were very peculiar. They have been stated. The proper mode of seeking redress was by motion upon the showing which was made. Kemp v. Squire, 1 Ves., Sr., 205; Robson v. Cranwell, 1 Dick., 61; Benson v. Vernon, 3 Bro. P. C.,626; Erwin v. Vint, 6 Mumf., 267; Pickett v. Legerwood, 7 Pet., 144; Tilden v. Johnson, 6 Cush., 354: Balch v. Shawn, 7 Cush., 284; Hall v. Williams, 10 Me., 278. The Circuit Court had the power to do what it did and properly did it. This was less expensive, less dilatory. and much to be preferred to a bill, even if the same relief could have been had in that way. It was also more in accordance with the spirit of sound equity practice. The entire case made by the bill as to Hay was thus opened. His answer denied all the material allegations against him, and we find in the record no evidence whatever to sustain them. No effort seems to have been made to procure any. The bill as to him was rightly dismissed, and in this respect the decree of the Circuit Court is affirmed. Cited 103 U. S., 498; 51 Wis., 585; 32 Ohio St., 485; 4 Hughes, 239. JAMES S. FRENCH ET AL., Appts., v. ALEXANDER HAY, Admr. of JAMES Mc- Wooster v. Woodhull, 1 Johns. Ch., Equity jurisdiction, extent of―injunction to State 539; Beekman v. Peck, 3 Johns. Ch., 415. The State Court well exercised its authority in setting aside the decree against Hay, but it committed a gross error in decreeing against him eo instanti the payment of $2,387.66 on account of the rent, leaving the case open only as to the furniture. To revoke the first decree because he had been ignorant of the filing of the amended bill, and hence had made no defense, and then to renew it without giving him an op portunity to be heard, was, to say the least, a singular anomaly. So far as he was concerned the claim as to the rent and the furniture rested upon exactly the same foundation. If it was proper that he should be heard as to one it was equally so that he should be heard as to the other. There was no difference. The same considerations applied with respect to both. In the renewed decree damages as to the furniture might as well have been included as the charge for the rent. It was no less wrong as to the latter than it would have been as to the former. Time Courts. |