United States Supreme Court Cases & Opinions

U.S. Supreme Court

St. Louis, I.M. & S. Ry. Co. v. Berry, 113 U.S. 465 (1885)

St. Louis, Iron Mountain and Southern Railway Company v. Berry

Submitted January 1885

Decided March 2, 1885

113 U.S. 465

Syllabus

A consolidation of two railway companies by an agreement which provides that all the property of each company shall be taken and deemed to be transferred to the consolidated company (naming it) "as such new corporation without further act or deed" creates a new corporation, with an existence dating from the time when the consolidation took effect, and is subject to constitutional provisions respecting taxation in force in the state at that time.

One section in the charter of a railway company authorized it to consolidate with other companies. Another section provided that the

"capital stock and dividends of said company shall be forever exempt from taxation; the road, fixtures and appurtenances shall be exempt from taxation until it pays an interest of not less than ten percent per annum."

Held that a new company, created by the exercise of the power to consolidate, took the property and franchises of the old company subject to the organic law as to taxation at the time of the consolidation.

This was a writ of error to review the action of the Supreme Court of Arkansas in refusing to restrain officers of that state from levying a tax on property of the plaintiff in error. The grounds on which exemption from taxation was claimed, and on which a federal question was raised, are stated in the opinion of the Court.