A decision of the supreme court of a state sustaining as valid a
statutory contract of the state exempting the property of a railway
company from taxation, but deciding that a certain class of
property did not come within the terms of the exemption, is not an
impairment of the contract by a law of the state and is not subject
to review in error here.
New Orleans Water Works Co. v. Louisiana Sugar Refining
Co., 126 U. S. 18,
affirmed and applied.
Page 142 U. S. 283
This was a proceeding to enforce payment of taxes on real estate
remaining delinquent on the first Monday of January, 1886, for the
County of Todd, State of Minnesota, and was tried in the District
Court of the Seventh Judicial District of that state, which made
and filed findings of fact and conclusions of law and ordered
judgment for the county against the railway company for the
collection of the taxes in question, and the interest and penalties
thereon, together with costs. The entry of judgment was then stayed
by the district court, which certified its findings of fact and its
decision in the case to the supreme court of the state for its
consideration. The matter having been duly argued and submitted,
the supreme court affirmed the order of the court below; whereupon,
a remittitur having been sent down, judgment was given in favor of
the county and against the railway company adjudging the lands in
question liable for taxes, penalties, costs, and disbursements, and
that the lands be sold unless the amounts were paid accordingly,
and afterwards, an appeal having been taken to the supreme court,
the judgment of the district was in all things affirmed. A writ of
error from this Court was then allowed by the chief justice of the
state supreme court. The opinion of that court will be found
reported in 38 Minn. 163, and states the case as follows:
"This railway corporation in 1882 purchased 35,000 acres of land
in Todd County which, excepting an inconsiderable portion, was
timbered land. The question to be determined is as to whether these
lands are exempt from ordinary taxation."
"The lands were purchased on account of their being valuable
timber lands. Since 1885, the corporation has been engaged in
cutting the timber and converting it into boards, plank, ties, and
lumber of all kinds. The greater part of this has been used in
constructing and repairing the railroad of this corporation in this
state; the remainder (about one-third) has been used for a like
purpose upon that part of the road which is in the Territory of
Dakota. In some places where the timber has been cut, grass has
grown up, a small quantity of which
Page 142 U. S. 284
has been sold. Upon a part of one tract a townsite had been
platted before this land was purchased by the corporation, and a
part of the lots are now owned by it."
"This corporation became the owner of a part of the line of the
Minnesota and Pacific Railroad Company, and as to its line of road
succeeded to the rights, franchises, and immunities of that
company, including its exemption from ordinary taxation. As to this
no question is raised, nor that the charter of the Minnesota and
Pacific Company is to be referred to as defining the exemption to
which the St. Paul, Minneapolis and Manitoba Company is
entitled."
"By section 1 of this charter, Laws 1857, Ex.Sess. c. 1,
corporate powers were granted, including the right to acquire, by
purchase or otherwise, and to hold, convey, sell, and lease
property and estates, either real or personal or mixed. Section 2
empowered the corporation to locate, construct, and operate a
railroad. Section 3 authorized the appropriation, by virtue of the
right of eminent domain, of a belt of land not exceeding two
hundred feet in width throughout the entire length of the road, and
to take property even beyond that limit for certain necessary
purposes. Section 16 regranted to the corporation the lands granted
to the territory by act of Congress. Section 18 provided for the
annual payment to the state of three percent of the gross earnings
of the railroad 'in lieu of all taxes and assessments whatever,'
and that,"
"in consideration of such annual payments, the said company
shall be forever exempt from all assessments and taxes whatever . .
. upon all stock in the said Minnesota and Pacific Railroad
Company, whether belonging to said company or to individuals, and
upon all its franchises or estate, real, personal, or mixed, held
by said company, and said land granted by said act of Congress . .
. shall be exempt from all taxation till sold and conveyed by said
company."
"Section 20 declared that the company should be"
"capable in law of taking and holding any lands granted by the
government of the United States or of this territory, or of the
future state, or by other parties, which shall be conveyed to it by
this act, or by deed, gift, or purchase, or by operation of law,
and may mortgage, pledge, sell, and convey the same. . . . "
Page 142 U. S. 285
MR. CHIEF JUSTICE FULLER, after stating the facts in the
foregoing language, delivered the opinion of the Court.
The lands in question were assessed in pursuance of sections 1,
6, c. 11, of the General Statutes of the State of Minnesota,
entitled "Taxes," which are as follows:
"§ 1. All real and personal property in this state, and all
personal property of persons residing therein, the property of
corporations now existing or hereafter created, and the property of
all banks or banking companies now existing or hereafter created,
and of all bankers, except such as is hereinafter expressly
excepted, is subject to taxation, and such property, or the value
thereof, shall be entered in the list of taxable property for that
purpose in the manner prescribed by this act,
provided
that railroad, insurance, and telegraph companies shall be taxed in
such manner as now is or may be hereafter fixed by law."
"§ 6. All real property in this state subject to taxation shall
be listed and assessed every even-numbered year with reference to
its value on the first day of May preceding the assessment, and all
real estate becoming taxable any intervening year shall be listed
and assessed with reference to its value on the first day of May of
that year."
Sats.Minn. 1878, 4th ed., c. 11, §§ 1 and 6; Stats.Minn. 1891,
§§ 1382, 1428, and references.
Sections 1, 7, c. 12, of the Revised Statutes of the Territory
of Minnesota for the year 1851, page 94, read:
"SEC. 1. All property, real and personal, within the territory
not expressly exempted therefrom shall be subject to taxation in
the manner provided by law."
"SEC. 7. The real estate incorporated companies, liable to
taxation, shall be assessed in the district in which the same shall
lie in the same manner as the real estate of individuals. "
Page 142 U. S. 286
By section 2 of the schedule of the state constitution, adopted
in 1857, it was provided:
"All laws now in force in the Territory of Minnesota not
repugnant to this constitution shall remain in force until they
expire by their own limitation or be altered or repealed by the
legislature."
Stats.Minn. 1878, p. 30.
We are met on the threshold of the case by the objection that
the writ of error cannot be maintained.
It is conceded that the Supreme Court of Minnesota did not put
its decision on the ground that there was not a valid contract
between the state and the company exempting its property from
taxation, but held that the exemption claimed did not attach to
these lands, and it is argued that
"if such lands are within the contract of exemption contained in
the company's charter, then the obligation of that contract was
impaired by the assessment, under chapter 11 of the general laws of
the state and the decision of the supreme court holding that the
lands were subject to assessment under such laws."
Our jurisdiction cannot be maintained upon that view. As stated
by MR. JUSTICE GRAY, speaking for the Court in
New Orleans
Waterworks Company v. Louisiana Sugar Refining Company,
125 U. S. 18,
125 U. S.
30:
"In order to come within the provision of the Constitution of
the United States which declares that no state shall pass any law
impairing the obligation of contracts, not only must the obligation
of a contract have been impaired, but it must have been impaired by
a law of the state. The prohibition is aimed at the legislative
power of the state, and not at the decisions of its courts, or the
acts of administrative or executive boards or officers, or the
doings of corporations or individuals."
And the language of Mr. Justice Miller in the exposition of the
rule is quoted from two opinions of the Court delivered by him:
"It must be the constitution or some law of the state which
impairs the obligation of the contract or which is otherwise in
conflict with the Constitution of the United States, and the
decision of the state court must sustain the law or constitution of
the state in the matter in which the conflict is supposed to exist,
or the case for this Court does not arise."
Railroad Co. v.
Rock, 4
Page 142 U. S. 287
Wall. 177,
71 U. S.
181.
"We are not authorized by the Judiciary Act to review the
judgments of the state courts because their judgments refuse to
give effect to valid contracts, or because those judgments, in
their effect, impair the obligation of contracts. If we did, every
case decided in a state court could be brought here when the party
setting up a contract alleged that the court had taken a different
view of its obligation to that which he held."
Knox v. Exchange
Bank, 12 Wall. 379,
79 U. S.
383.
The position of the state was not that the lands in question
were rendered taxable by any law passed subsequent to the company's
charter, but that, under the terms of the contract itself, the
lands were taxable. No subsequent law is referred to upon which the
opinion of the court proceeded; on the contrary, the law was the
same, so far as any question arising here was concerned, as that
above quoted from the territorial law of 1851. What the court held
was that statutes imposing restrictions upon the taxing power of a
state, except so far as they tend to secure uniformity and equality
of assessment, are to be strictly construed,
Bank v.
Tennessee, 104 U. S. 493, and
that, tested by this rule, the exemption in the company's
charter
"was not applicable to large tracts of timberland purchased by
the corporation from which to take timber to be converted into ties
and lumber for the use of the corporation,"
and that consequently these lands were subject to taxation. It
is impossible, therefore, for this writ of error to be sustained,
and it is accordingly
Dismissed.
MR. JUSTICE BRADLEY and MR. JUSTICE LAMAR were not present at
the argument, and took no part in the decision of this case.
