Improvement Company v. Slack, 100 U.S. 648 (1879)
U.S. Supreme CourtImprovement Company v. Slack, 100 U.S. 648 (1879)
Improvement Company v. Slack
100 U.S. 648
The "Argilite Mining and Manufacturing Company" was incorporated by an act of the General Assembly of Kentucky passed March 4, 1865. Its name, by an amendment to the charter, was changed to the "Kentucky Improvement Company," and it was authorized to
"construct one or more rail tracks from any lands owned or improved by said corporation to convenient points on the Ohio or Little Sandy River, or both, or to connect with other railways, and to maintain said track or tracks, and to draw cars over the same by suitable motive power."
For the "construction and convenient and proper use and maintenance of such railroads," the company was authorized to condemn and appropriate the necessary lands and materials. Pursuant to said authority, the company built and equipped a railroad, and on Aug. 15, 1866, issued in payment therefor its six percent coupon bonds to the amount of $500,000, secured by mortgage on its landed property and improvements. The road was finished in June, 1868, and thereafter the company transported over it its own freight, officers, and agents, and in addition thereto, though not in terms so authorized by the charter, from time to time other passengers and freight for hire. Held that the company was, within the meaning of the ninth section of the Act of July 13, 1866, 14 Stat. 138, a railroad company, and as such, for the year 1870, liable to the tax of five percent on coupons thereby imposed.
This was an action brought by the Kentucky Improvement Company against Charles W. Slack, Collector of Internal Revenue for the Third Collection District of Massachusetts, to recover the amount of certain internal revenue taxes which, it was alleged, had been erroneously and illegally assessed and collected.
The case was submitted to the court below upon the following agreed statement of facts:
"After an appeal duly made to the Commissioner of Internal Revenue (April 29, 1873), this suit was brought against
the collector to recover the sum of $750, paid to him May 24, 1870, being a tax of five percent assessed upon coupons to the amount of $15,000, payable Feb. 15, 1870, on bonds of said company to the amount of $500,000, dated Aug. 15, 1866, and bearing interest at the rate of six percent, payable semiannually."
"The company was originally organized under an Act of the General Assembly of the Commonwealth of Kentucky, approved March 4, 1865, by the name of the 'Argilite Mining and Manufacturing Company,' which act provided as follows:"
" SEC. 2. The objects and purposes of the incorporation of said company shall be the mining for coal, iron ore, petroleum, carbon, or rock oil, and any and all other minerals or mineral substances, or the direct products of the earth, or any or all of them, and the manufacture and refining of any or all of them, and transportation to market of the same; the location and field of mining and manufacture of said company shall be in Greenup, or any of its adjoining counties."
" SEC. 7. Said company shall have the power, and may, if they choose so to do, lock and dam Little Sandy River up to their mines and property, provided, for the condemnation of lands and property for said purpose, the proceedings shall be had as is now provided by law for the condemnation of mill sites."
" SEC. 8. Said company shall have the power to take, acquire, and hold such lands, mines, and mining rights as they may deem necessary for the uses of said company, and all such personal property, machinery, boats, flats, &c., as may be necessary, and to dispose of, for the use of the company and the stockholders, any or all of the same."
"It was enacted by an act of the said General Assembly, approved December 14, as follows:"
" SEC. 1. That the name of the 'Argilite Mining and Manufacturing Company' is hereby changed, and said corporation shall hereafter be known and styled the 'Kentucky Improvement Company.'"
" SEC. 4. The said corporation is hereby authorized to construct one or more rail tracks from any lands owned or improved by said corporation to convenient points on the Ohio or Little Sandy River, or both, or to connect with other railways, and to maintain said track or tracks, and to draw cars over the same by
suitable motive power. The company is hereby authorized to condemn and appropriate such lands and materials as may be necessary for the construction and convenient and proper use and maintenance of such railroads, provided that for the condemnation of the lands and materials for such purpose, the same proceedings shall be had as are now required by law for the condemnation of lands and materials for turnpikes and plank roads; provided further that the land condemned for any railroad track shall not exceed in width one hundred feet."
" SEC. 5. That, in order to carry out to the fullest extent the purposes and objects of said act of incorporation, the said company is authorized to sell all minerals, mineral substances, products of the earth, and all other articles of commerce and manufacture lawfully possessed by them, and to buy and sell all such articles of merchandise as may be required to carry out the objects of their charter, and to establish agencies in any part of the United States, for the prosecution of the traffic hereby authorized."
" SEC. 6. That should said company lock and dam the Little Sandy River, they shall build two bridges over said river sufficient for the public travel, one of the bridges to be at the crossing of the Greenupsburg and Raccoon Furnace Road, and the other at the crossing of the Greenupsburg and Grayson Road at or near the Argilite Mills."
"The Kentucky Improvement Company was duly organized under the acts aforesaid, and commenced and continued operations thereunder until it ceased to exist, about March 1, 1870."
"At an adjourned meeting of the shareholders of said company held on the 24th of July, 1866, it was resolved,"
" 1st, to authorize the building of a railroad and to provide locomotives, cars, and other facilities for the transportation of coal and other productions to market for the canal openings near Hunnewell Furnace to Hockaday's Landing, on the Ohio River."
" 2d, that a sum not exceeding $500,000 be raised for the purpose of building and equipping said railroad, and afford facilities for transportation to market for the mineral and other productions of the company's property."
" 3d, that the president and board of directors of this company be, and they hereby are, authorized and empowered to issue bonds to the amount of $500,000, . . . secured by an indenture of mortgage on all their present landed property and improvements . . . bearing six percent interest, the interest payable semiannually. "
"In pursuance of the above vote, an issue of bonds was made to the amount and bearing the interest named, and of date Aug. 15, 1866, and was secured by a mortgage to trustees of even date of the then landed property and improvements of said company, and the coupons taxed in this case were a part of the coupons attached thereto."
"The whole issue was duly subscribed for and delivered to the subscribers. The road was finished and opened for the business of the company about the 1st of June, 1868."
"In addition to its own freight and its own officers and servants, the company transported over its road from time to time for hire other passengers and freight, but there was no provision in its charter in terms authorizing it to convey freight or passengers other than its own."
"The receipts of the company were as follows:"
"The company's sales of coal were as follows:"
1866, April 1 to Dec. 31 . . . . . . . . . $ 774.71
1867, Jan. 1 " " . . . . . . . . . 324.33
1868, " " " " . . . . . . . . . 25,576.82
1869, " " " " . . . . . . . . . 40,909.01
1870, " " Feb. 15 . . . . . . . . . 6,541.55
"And the company produced for its own use during same period as follows:"
1866 . . . . . . . . . . . . . . . . . . 356.16 tons
1867 . . . . . . . . . . . . . . . . . . 5,433.55 "
1868 . . . . . . . . . . . . . . . . . . 2,286.78 "
1869 . . . . . . . . . . . . . . . . . . 792 "
1870 . . . . . . . . . . . . . . . . . . 60 "
"And the company's sales of iron were:"
1866, April 1 to Dec. 31 . . . . . . . . . $ 49,071.16
1867, Jan. 1 " " . . . . . . . . . 95,846.46
1868, " " " . . . . . . . . . 161,735.46
1869, " " " . . . . . . . . . 145,812.15
1870, " " Feb. 15 . . . . . . . . . 18,204.13
"And the company's sales at its stores on the ground during same period amounted to $506,529.75."
The court below found for the defendant, whereupon the company sued out this writ of error.