This Court has jurisdiction to review the final judgment of the
state court in this case for the purpose of ascertaining whether it
deprived the defendants of any right, privilege or immunity set up
by them under the Constitution of the United States.
The City of Henderson had authority to tax so much of the
property of the Henderson Bridge Company as was permanently between
low water mark on the Kentucky shore and low water mark on the
Indiana shore of the Ohio River, it being settled that the boundary
of Kentucky extends to low water mark on the Indiana shore.
The declaration of the state court that Kentucky intended by its
legislation to confer upon the City of Henderson a power of
taxation for local purposes coextensive with its statutory boundary
is binding in this Court.
In order to bring taxation imposed by a state within the scope
of the Fourteenth Amendment of the National Constitution, the case
should be so clearly and palpably an illegal encroachment upon
private rights as to leave no doubt that such taxation, by its
necessary operation, is really spoliation under the guise of
exerting the power to tax.
The taxation by the city, as property of the Bridge Company, of
the bridge and its appurtenances within the fixed boundary of the
city between low water mark on the two sides of the Ohio River was
not a taking of private property for public use without just
compensation in violation of the Constitution of the United
States.
The Bridge Company did not acquire by contract an exemption from
local taxation in respect of its bridge situated between low water
mark on the two shores of the Ohio River.
The provision in the city's charter that
"no land embraced within the city's limits, and outside of
ten-acre lots as originally laid off shall be assessed and taxed by
the city council unless the same is divided or laid out into lots
of five acres or less and unless the same is actually used and
devoted to farming purposes"
has no reference to bridges, their approaches, piers, etc.
The power of Kentucky to tax this bridge is not affected by the
fact that it was erected under the authority or with the consent of
Congress.
The statement of the case will be found in the opinion of
the Court.
Page 173 U. S. 593
MR. JUSTICE HARLAN delivered the opinion of the Court.
This case arises out of the taxation by the City of Henderson, a
municipal corporation of Kentucky, of a railroad bridge (with its
approaches, piers, etc.) extending from a point within that city on
the Kentucky shore across the Ohio River to low water mark on the
Indiana shore.
The property subjected to taxation belongs to the Henderson
Bridge Company, a corporation of Kentucky, but is under the care,
management, and control of the Louisville & Nashville Railroad
Company, also a corporation of that commonwealth.
Those corporations insist that the final judgment of the court
of appeals of Kentucky here for review, affirming a judgment
rendered in the Circuit Court of Henderson County, is in derogation
of rights secured to them by the Constitution of the United States.
The grounds upon which this contention rests will appear from the
statement presently to be made of the history of the litigation
between the City of Henderson and the corporations named in respect
of taxes assessed upon the bridge property in question.
The city contends not only that the assessment of taxes upon
this property was in all respects valid, but that the matters here
in dispute, including the questions of constitutional law raised by
the bridge and railroad companies, have been conclusively
determined in prior litigation between the parties.
The facts which it seems necessary to state in order to bring
out clearly and fully the various questions raised by the pleadings
and discussed by counsel are as follows:
The Henderson Bridge Company was incorporated by an act of the
General Assembly of the Commonwealth of Kentucky
Page 173 U. S. 594
approved February 9, 1872, with authority to construct
"a bridge across the Ohio River, extending from some convenient
point within the corporate limits of the City of Henderson to some
convenient point on the Indiana side of said river opposite the
City of Henderson."
Acts Kentucky 1871-72, Vol. 1, 314.
The city's boundary, as defined by its charter granted February
11, 1867, extended "to low water mark on the Ohio River on the
Indiana shore," and it had the power (with certain exceptions not
material to be noticed here) to levy and collect taxes at a
prescribed rate upon all property within its limits made taxable by
law for state purposes.
In 1882, an ordinance was passed by the common council of the
city granting to the Henderson Bridge Company the right
"to construct on or over the center of Fourth Street in the City
of Henderson, and of the line thereof extended to low water mark on
the Indiana side of the Ohio River, such approaches, avenues,
piers, trestles, abutments, toll houses, and other appurtenances
necessary in the erection of, and for the business of, a bridge
over the Ohio River from a point in the City of Henderson to some
convenient point on the Indiana side of said river, and for such
purposes, the use of said Fourth Street is hereby granted, subject
to the terms and conditions hereinafter expressed;"
also, the right
"to use the space between Water Street, in said city, and low
water mark in the Ohio River, extending one hundred feet below the
center of Fourth Street extended and three hundred feet above the
center of said street extended to the Ohio River for the purpose
required by said company."
The company was also permitted to
"erect, or authorize or cause to be erected, grain elevators
within said space above high water mark, and may construct
therefrom to the river such apparatus and machinery as may be
necessary to convey grain from boats to such elevators, and may
have the use of said space for the landing of boats laden with
freight for such elevators, and construct floating docks or use
wharf boats within such space for the accommodation of such boats
and the conduct of the business of such bridge and of the said
elevators free of
Page 173 U. S. 595
wharfage, subject to the terms and conditions hereinafter
expressed."
The fourth section of that ordinance declared that it should not
be construed
"as waiving the right of the City of Henderson to levy and
collect taxes on the approaches to said bridge, or any building
erected by said bridge company within the corporate limits of said
city, the bridge itself, and all appurtenances thereto, within the
limits of said city."
The fifth section provided that before any of the rights or
privileges so granted should inure to the benefit of or vest in the
bridge company, the latter should, by proper authority, append to a
certified copy of the ordinance their acceptance of, and agreement
to abide by and faithfully keep, its terms and conditions, such
acceptance and agreement to be acknowledged by the proper authority
of the company, as provided in the case of a deed under the laws of
Kentucky, and delivered to the clerk of the Henderson City
Council.
The bridge company duly accepted the ordinance, with its terms
and conditions, agreed to abide by and faithfully keep the same,
and its acceptance was acknowledged and delivered to the city
council.
In 1884, an agreement in writing was entered into between the
bridge company and the Louisville & Nashville Railroad Company
reciting that the former was about to proceed with the erection of
a bridge over the Ohio River at or near Henderson and of a railroad
connecting the Henderson Division of the Louisville & Nashville
Railroad Company at Henderson with the Southeast & St. Louis
Railway in or near Evansville, Indiana; that certain railroads,
including the Louisville & Nashville Railroad Company, had by
agreement guarantied to the bridge company an income from traffic
amounting to $200,000 per annum, and that it was deemed for the
interest of all parties, and had been requested by the bondholders
under the mortgage placed on the bridge, that the Louisville &
Nashville Railroad Company should assume the control, management,
and care of the track of said railroad so to be constructed, and
should effect the usual repairs to such bridge caused by
Page 173 U. S. 596
ordinary wear and tear, and pay taxes imposed on said track and
the bridge on compensation being made therefor by the bridge
company. By that agreement, the bridge company undertook to pay the
railroad company absolutely and in each year during the continuance
of the agreement, in equal quarter-yearly payments, the sum of
$10,000 per annum, which amount, or such parts thereof as were
required, the railroad company agreed to apply to the maintenance
of the track and roadbed of said railroad in good condition and
repair, and towards the usual and ordinary repairs of the bridge,
and also to pay all taxes imposed on said track or bridge structure
and each of them.
On the 8th day of December, 1887, the city, by petition filed in
the Circuit Court of Henderson County, Kentucky -- that mode of
collecting taxes being authorized by the local law -- brought suit
against the Henderson Bridge Company to recover the sum of $44,324
as the amount of taxes, with penalties thereon, due from the bridge
company under ordinances passed by the city in 1885, 1886, and
1887, levying and assessing taxes for certain purposes. The
petition referred to the above ordinance authorizing the
construction of the bridge, and among other averments in it were
the following:
"The defendant commenced the construction of said bridge in the
year 1883, and completed same in the month of July, 1885, and at a
cost of about $2,000,000, and on the ___ day of July, 1885, the
first train ran over said bridge. The approach to said bridge is
constructed over Fourth Street, near the principal portion of said
city, commencing at the west line of Main street, and extending to
the main structure of said bridge at Water Street (though,
plaintiff claims, not in accordance with the terms of said
ordinance). The rights and privileges granted by the plaintiff to
the defendant were of great value, and the plaintiff was influenced
and induced to so grant them by the belief in the right on the part
of the plaintiff to tax said bridge as other property is taxed
within the city limits. By the building of said bridge through the
rights and privileges so granted by the plaintiff, the system of
roads north of the Ohio River has been connected with the
Page 173 U. S. 597
Louisville & Nashville Railroad south of the river, and the
said bridge company's property has become so valuable that its
bonds, to the amount of about $2,000,000, are worth a premium of 8
1/2 percent"
The assessment against the bridge company on account of the
bridge and its approaches was upon a valuation of $600,000 in 1885
and $1,000,000 in each of the years 1886 and 1887. In its petition,
the city claimed a lien upon the bridge from the beginning of its
approach at Main Street, in the City of Henderson, to low water
mark on the Indiana side of the Ohio River, for said taxes and the
penalties thereon.
The bridge company in its answer denied the material allegations
of the petition, and alleged:
That the city had no authority to levy taxes for the purposes
indicated in the ordinances referred to;
That the declaration in the ordinance granting the right to
construct the bridge within the city's limits meant, and was
intended to mean, nothing more than that the city did not waive any
right to tax then possessed by it;
That the bridge was built only for the purpose of laying a
single railroad track on which to move locomotives and cars between
Kentucky and Indiana over the Ohio River;
That, except as to that part of the bridge commencing at the
west line of Main Street, in the City of Henderson, and extending
to the main structure at Water Street, the bridge company derived
no assistance or protection from the city, and that part between
the Kentucky and Indiana shores, upon stone piers and pillars
resting upon the bed of the Ohio River, was not subject to taxation
by the city;
That the bridge was located and constructed in conformity with
the two acts of the Congress of the United States, the one entitled
"An act to authorize the construction of bridges across the Ohio
River and to prescribe the dimensions of the same," approved
December 17, 1872, and the other entitled
"An act supplemental to an act approved December 17, 1872,
entitled 'An act to authorize the construction of bridges across
the Ohio River and to prescribe the dimensions of the same,'"
approved February 14, 1883, 17 Stat. 398, c. 44; 22 Stat.
414;
Page 173 U. S. 598
That the whole of said bridge between the Kentucky shore and the
Indiana shore, 1,968 feet in length, was over the water of the Ohio
River, except the piers or pillars that support it;
That the Ohio River was a navigable stream within the entire
control and jurisdiction of Congress and the courts of the United
States, and that assumption of control by the City of that part of
the bridge for purposes of taxation, or for any purpose except for
executing writs from its police authorities, would be in violation
of the Constitution of the United States, the laws of Congress, and
the rights of the defendants; and
That, as the bridge derived no profit, protection, or advantage
from the government of the city, to subject it to city taxation
would be to take private property for public use without just
compensation, in violation of the Constitution of the United States
as well as of the Constitution and laws of Kentucky and of the
defendant's rights in the premises.
The answer of the bridge company further alleged:
That the Louisville & Nashville Railroad Company was a
necessary party to that suit;
That, when it constructed its bridge, it was the settled law of
Kentucky, as shown by the judgment of the Court of Appeals of
Kentucky in
Louisville Bridge Co. v. Louisville, 81 Ky.
189, that the part of the bridge erected over and across the Ohio
River was not liable to municipal taxation;
That, relying upon such being the law of Kentucky, the defendant
and the Louisville & Nashville Railroad Company entered into
the above agreement of February 27, 1884; and
That to grant to the plaintiff the relief prayed for or any part
thereof would be a direct impairment of the contract between the
bridge company and the railroad company.
The railroad company, having been made a party, adopted the
answer of the bridge company.
The state circuit court adjudged that, the bridge being in an
incomplete condition on the 10th day of January, 1885, the city was
not entitled to tax it for that year. But, as to the years 1886 and
1887, it was adjudged that the bridge and the approach thereto were
subject to taxation for all the purposes
Page 173 U. S. 599
and for the amounts claimed in the city's petition, and that the
city had a lien upon the bridge structure, masonry piers, and the
approach thereto, situated within its boundary extending to low
water mark on the Indiana side of the Ohio River, for the taxes
assessed for the years 1886 and 1887, with interest and costs
expended. The bridge company was directed to pay said sums, with
interest and costs, to the plaintiff on or before a named day.
In a brief opinion of the state circuit court, it was said that
the taxable boundary of the city was coextensive with its statutory
boundary. Referring to the case of
Louisville Bridge Co. v.
Louisville, 81 Ky. 189, the court held that that case decided
nothing more than that the legislature did not intend that the
bridge there in question should be subject to taxation. It was
further said:
"Several cases are relied on where the Court of Appeals have
relieved parties from the payment of taxes on agricultural lands
when the city limits had been extended without the owner's consent.
The rule, if one has been established by those cases, should not be
extended to cases where property has been voluntarily brought
within such boundaries. The party thus bringing in his property
should be treated as one who sanctioned the extension of a city so
as to include his agricultural lands. All that can be deduced from
these cases is that, in each extension of a town or city, the court
will hear the complaints of any taxpayer, and grant or not grant
him relief as the merits of his particular case may demand. In this
case, the defendants voluntarily placed their property within the
legally established limits of the city, and should pay the taxes
assessed on other property holders of the city after 1885."
The bridge company and the railroad company prosecuted an appeal
to the Court of Appeals of Kentucky, and the city was granted a
cross-appeal from so much of the judgment as disallowed its claim
of taxes for 1885.
In the Court of Appeals of Kentucky, the judgment was affirmed.
In its opinion, it is apparently conceded that the city could not,
under its charter, tax the bridge structure over the river for
ordinary municipal purposes -- that is, "for the support
Page 173 U. S. 600
of its government proper." But it was said that if the city was
created a taxing district, it could do so. Referring to the
contract or terms upon which the bridge company acquired the right
to construct its bridge within its limits, and particularly to the
clause declaring that the ordinance should not be construed as
waiving the right of the city to tax the bridge and its
appurtenances within the corporate limits of the city, the court
said:
"The appellant contends it was only meant to reserve the right
to tax such property of the appellant as was theretofore subject to
taxation by the city government, and, as that part of the bridge
situated on the water of the Ohio River was not, for the reason
above indicated, subject to taxation, the reservation relates to
that part of the bridge, etc., that the appellee had the right to
tax under the law. It is evident that the contract was well
considered and prudently drafted by men skilled in that kind of
work, and it is not presumed that they engaged in a mere
nudum
pactum, but they meant to set forth a business transaction.
Now that business transaction was evidently this: the appellant
desired rights and privileges that it did not possess, and which it
could not possess, without the consent of the appellee. So it said
to the appellee: grant these privileges, and you may tax what? Only
the approach to said bridge? No, because the appellee already had
the right to tax that, and it had made no concessions that could
possibly be construed as waiving that right. What right, then, was
granted? Why the right to tax the 'bridge itself.' The bridge, as
distinguished from its abutments and approaches, is that part that
is over the water. Now the appellee, according to the
Louisville Bridge case, in its municipal capacity had no
right to tax that part of the bridge over the water. Why, then, say
that it did not waive the right to tax it? To waive a right, there
must be a claim of right to waive. Well, it is said, as the
appellee had no right to tax the bridge, there was in fact no right
to waive. As an abstract proposition of the right to tax the bridge
on the water (according to said case), this contention is true, but
it is equally true that the appellee had the right, if asserted
and
Page 173 U. S. 601
agreed to, to claim that the bridge should be taxed in
consideration of the privileges granted. This claim of right, it
must be presumed, was asserted and agreed to and expressed in the
contract by the term, 'not waiving the right.' If the contract does
not mean this, then it means nothing. It is not supposed that the
contracting parties only meant to reserve a right that they already
had, and about which there was no possible ground of dispute, but
when it is considered that the right to tax the bridge to the
Indiana shore might be legitimately obtained by contract, and that
the appellee granted to the appellant rights and privileges
essential to its enterprise, designed to make money, and is making
a large percent, it is entirely reasonable to suppose that the
appellee would contract for the right to thus tax the appellant in
consideration of granting these essential rights and privileges by
which the appellant acquired the right to construct and operate so
profitable a business enterprise. So it seems much more reasonable
to suppose that the contracting parties intended to do this
reasonable thing -- to-wit, to receive some consideration for the
grant of privileges, rather than indulge in a mere
nudum
pactum. The appellant, at least, for the purpose of collecting
taxes, should be considered as a part of a railroad -- consequently
falls within the principle announced in
Elizabethtown &
Paducah Railroad v. Elizabethtown, 12 Bush, 239."
14 S.W. 493.
Chief Justice Holt delivered a separate opinion, in which he
said:
"The legislature, by authorizing the imposition and collection
of the railroad and school taxes upon the real estate within the
city limits, created a taxing district. The power to collect these
taxes was therefore conferred upon the appellee as such a district,
and the appellant's property, being within it, is liable for them.
As to the municipal taxes proper, the appellant's property is
within the corporate limits, and, in my opinion, receives such
benefits from the municipal government as render it both legally
and justly liable for them."
14 S.W. 493, 496.
The bridge company and the railroad company sued out a writ of
error from this Court, but the writ was dismissed
Page 173 U. S. 602
upon the ground that although a federal question may have been
raised in the state court, the judgment of the latter court rested
upon grounds broad enough to sustain the decision without reference
to any such question. Mr. Justice Blatchford, delivering the
opinion of the Court, said:
"The opinion of the state court is based wholly upon the ground
that the proper interpretation of the ordinance of February, 1882,
was that the bridge company voluntarily agreed that the bridge
should be liable to taxation. This does not involve a federal
question, and is broad enough to dispose of the case without
reference to any federal question. This Court cannot review the
construction which was given to the ordinance as a contract by the
state court. There is nothing in the suggestion that the taxation
of the bridge is a regulation of commerce among the states, or is
the taxation of any agency of the federal government. The case of
Louisville Bridge Co. v. City of Louisville, 81 Ky. 189,
was not decided until May, 1883, more than a year after the
ordinance of the City of Henderson was accepted by the bridge
company, in February, 1882. The contract of February, 1884, between
the bridge company and the railroad company, was made more than two
years after the ordinance of February, 1882, came into existence.
Neither the opinion of the Court of Appeals in the present case nor
that of Chief Justice Holt nor that of the circuit court of the
state, puts the decision upon any federal question, and, on this
writ of error to the state court, we are bound by its
interpretation of the contract contained in the ordinance, in view
of the Constitution and laws of Kentucky, and cannot review that
question."
Henderson Bridge Co. v. Henderson, 141 U.
S. 679,
141 U. S.
689.
By an act of the General Assembly of Kentucky approved April 9,
1888, the charter of the City of Henderson was repealed, and the
city reincorporated with the following boundaries:
"Beginning at a stone on the west side of the Madisonville Road;
thence north 48�35' east, five thousand six hundred and forty-one
feet to a stone near the White Bridge on the Henderson and Zion
gravel road; thence in a straight line north 11�35' west to the
dividing line of the
Page 173 U. S. 603
ten-acre lots Nos. 4 and 5; thence with the dividing line of
said lots 71� west to low water mark on the Ohio River on the
Indiana shore; thence down the river with the meanders thereof at
low water margin to a point opposite the south line of Hancock
Street; thence across said river south 59� east along the south
line of said Hancock Street in a straight line to the
beginning."
2 Acts Ky. 1887-88, p. 937. That act, as did the original
charter of the city, gave the common council power, within the
limits of the city, to levy and collect taxes at a prescribed rate
upon all property in the city subject to taxation under the revenue
laws of the state for state purposes, with certain exceptions which
need not be stated.
The common council, by an ordinance passed in 1888, and
providing for the annual tax levies for that year, imposed an
ad valorem tax
"on all property within the limits of the City of Henderson
subject to taxation under the present revenue laws of the State of
Kentucky for state purposes, to be paid by the owners of said
property, respectively, provided however, that no land embraced
within the city limits, and outside of the ten-acre lots as
originally laid off, shall be assessed and taxed by the council
unless the same is divided and laid off into lots of five acres or
less, and unless all of same is actually used and devoted to
farming purposes."
Similar ordinances were passed providing the annual tax levies
for the fiscal years 1889 and 1890. As appears from the ordinances,
these taxes were laid for the purpose of raising money sufficient
to pay interest on the city's bonded indebtedness, defray the
ordinary expenses of the city government, and meet the annual
expenses of the public schools of the city.
Under the above ordinances, the city caused the bridge in
question to be assessed by the city assessor for taxation to low
water mark on the Indiana side of the Ohio River, as other property
in the city, for the years 1888, 1889, and 1890 at a valuation of
$1,000,000 for each of those years.
The present suit was instituted by the city against the bridge
company and the Louisville & Nashville Railroad
Page 173 U. S. 604
Company to recover the amount of taxes for the years 1888, 1889,
and 1890 alleged to be due under the above assessments. It is not
disputed that those assessments embraced the bridge and its piers
between low water mark on the Kentucky side of the Ohio River and
low water mark on the Indiana shore.
During the progress of the cause, the plaintiff dismissed its
suit so far as it related to taxes for the year 1890 without
prejudice to any future action by it to recover those taxes.
The bridge company filed its answer, in which, after stating
some grounds of defense which did not specifically rest on the
Constitution or laws of the United States, it was averred:
That when it accepted its charter, it was the settled law of
Kentucky, and had been for more than forty years, as declared in
many cases by its highest court, that real estate within the
boundaries of a town or city could not be taxed for municipal
purposes unless it was capable of being profitably used and
converted into town property, and also received benefits, both
actual and presumed, from the municipal government seeking to tax
such property;
That the defendant constructed its bridge on the faith of the
law of the commonwealth as thus long established, and that the law
thus established became a part of the contract between Kentucky and
the defendant growing out of the granting and acceptance of its
charter;
That it was also the settled law of Kentucky when the bridge in
question was constructed that, in the case of bridges across the
Ohio River from a point in a city or town whose boundary extended
to low water mark on the northern shore of the Ohio River, a city
or town had no power or authority, under a charter, duly enacted,
authorizing the taxation of property by the municipal government
within its corporate boundary, to tax such bridge beyond low water
mark on the Kentucky or southern side of said river;
That a city boundary fixed at low water mark on the Indiana
shore was not, in the meaning and intent of the legislative act so
fixing it, intended to define the taxable boundary
Page 173 U. S. 605
of the city, but only to confer upon the city jurisdiction for
police purposes upon the waters of the river to the Indiana shore,
and that it was further settled by the court in the case of
Louisville Bridge Co. v. Louisville, 81 Ky. 189, that such
an act, if intended to confer a taxing power over property erected
in said stream beyond the low water mark on the Kentucky side, was
in violation of that provision of the constitution of this state
which prohibits the taking of private property for public purposes
without just compensation, and of the like provision of the
Constitution of the United States, and would, to the extent it
conferred on the city such power, be absolutely null and void, and
that the city could not tax said property for waterworks, school,
or railroad purposes, nor for any municipal purposes whatever;
That the defendant, relying upon the law as thus established,
went forward, and built its bridge to low water mark on the Indiana
shore of the Ohio River, and the legislative acts and city
ordinances pleaded by plaintiff as authority for the collection of
the tax upon that part of the bridge beyond low water mark of the
Ohio River on the Kentucky shore have all been passed since the law
of Kentucky was settled as above stated, and are null and void, as
contrary to that provision of the Constitution of the United States
forbidding any state to pass a law impairing the obligation of
contracts, and as contrary to those constitutional provisions,
state and federal, that prohibit the taking of private property for
public uses without just compensation;
That the above legislative acts and ordinances constitute the
only authority the plaintiff has for the assessment of defendant's
property, or the levy and collection of the taxes thereon sued for
herein, and the said Act of April 9, 1888, which constituted the
only authority the City of Henderson has to levy or collect taxes
for any purposes or upon any property, and the alleged city
ordinances of May, 1888, and of April 24, 1889, and of May 24,
1890, were each and all passed and ordained subsequent to the
acceptance by the defendant of its charter of incorporation, and
its expenditure of the large sums of money aforesaid in the
construction of its bridge, and, to the
Page 173 U. S. 606
extent that the said act or the said ordinances, or either of
them, do or may authorize any portion of defendant's bridge
structure situated north of low water mark on the Kentucky shore to
be taxed, are null and void because repugnant to the Constitution
of the United States;
That the defendant has at all times been willing to pay taxes,
for the purposes set out in the petition, on that portion of its
bridge which is in fact and in the sense of the legislative acts
referred to within the boundary of the City of Henderson, to-wit,
from the beginning of the approach on the west side of Main Street
to low water mark of the Kentucky shore; and
That the taxable boundary of the plaintiff on the Ohio River is
the low water mark on the Kentucky shore.
The answer of the bridge company further averred:
"The territory on both sides of the Ohio River was, prior to the
year 1784, a part of the State of Virginia, in which year she ceded
to the United States the territory north and west of said river. On
the 18th of December, 1789, the Congress of the United States
passed the 'compact with Virginia,' which authorized the
establishment of the State of Kentucky, and which compact defined
the rights of the said state in and to the Ohio River. By the
eleventh section of that compact, it is provided"
"that the use and navigation of the river Ohio, so far as the
Territory of the proposed state (Kentucky) or the territory which
shall remain within the limits of this commonwealth (Virginia) lies
thereon, shall be free and common to the citizens of the United
States, and the respective jurisdiction of this commonwealth and
the proposed state on the river aforesaid shall be concurrent only
with the states which may possess the opposite shores of said
river."
That by said compact, formed and ratified between the United
States and the States of Virginia and Kentucky, the bed of the Ohio
River, so far as it is permanently under water, is the common
property of the people of the United States. That it forms a great
interstate highway of commerce in which a great part of the country
has a direct interest, and cannot be made the subject of taxation
by the State of Kentucky nor any municipal government created by
said state, and is by the Constitution and
Page 173 U. S. 607
laws of the United States under the exclusive control of the
government of the United States. That said stream is a navigable
stream from its source to its mouth, and the defendant's bridge
sought to be taxed by this proceeding is located and built under
the permission and authority of, and as required by, an act of the
Congress of the United States entitled "An act to authorize the
construction of bridges across the Ohio River and prescribe the
dimensions of the same," approved December 17, 1872, and another
act of said Congress entitled
"An act supplemental to an act approved December 17th, 1872,
entitled 'An act to authorize the construction of bridges across
the Ohio River and prescribe the dimensions of same, approved
February 14th, 1883,' and the defendant submits that the plaintiff
has no jurisdiction over said stream to tax any property placed
therein by authority of Congress, and for plaintiff to assume to
tax said bridge thus situated would be violative of the
Constitution of the United States, the laws of Congress, and of the
defendant's rights in the premises."
The bridge company defended the action upon the further ground
that the relief asked by the city could not be granted without
directly impairing the obligation of the contract between it and
the railroad company, which contract, it was insisted, was to be
interpreted in the light of the law of Kentucky as it was when such
contract was made, and without reference to subsequent legislative
acts and ordinances inconsistent with its provisions.
The railroad company adopted the answer of the bridge company,
averring, among other things, that to grant the plaintiff the
relief prayed for, or any part thereof, would be a direct
impairment of the obligation of the contract between the railroad
company and the bridge company, and a violation of the tenth
section of the first article of the Constitution of the United
States.
The city filed a reply, in which the material allegations of the
answers were controverted. It accompanied its reply with a
transcript of the proceedings in the above suit between it and the
bridge and railroad companies brought in 1887 to recover the taxes
assessed for the years 1885, 1886, and 1887,
Page 173 U. S. 608
including the proceedings in this Court on the appeal prosecuted
by those companies. The reply concludes:
"The plaintiff says that the right of plaintiff to assess and
collect the taxes sued for, against the defendant the Henderson
Bridge Company, its jurisdiction thereon, and all questions raised
by the pleadings in this case, except as to the passage of the
ordinances alleged, are now
res judicata, and plaintiff
pleads and relies upon same as a bar to defendants' pleas herein,
and prays as in its petition."
Judgment was rendered in favor of the city for the taxes (with
interest and penalties) for the years 1888 and 1889, and it was
adjudged that, for the amounts found due the city
"has a lien upon the bridge structure, masonry and piers
[mentioned in the petition], and the approach thereto, situated
within the boundary of the State of Kentucky, an extending to low
water mark on the Indiana side of the Ohio River."
That judgment having been affirmed by the Court of Appeals of
Kentucky, the present writ of error was sued out.
1. It the state court had sustained the city's plea of
res
judicata upon some ground that did not necessarily involve the
determination of a federal right, it might be that the present case
would come within the rule, often acted upon, that this Court, in
reviewing the final judgment of the highest court of a state, will
not pass upon a federal question, however distinctly presented by
the pleadings, if the judgment of the state court was based upon
some ground of local or general law manifestly broad enough in
itself to sustain the decision independently of any view that might
be taken of such federal question. But that rule cannot be applied
to the judgment below. Upon examining the opinion of the Court of
Appeals of Kentucky in this case, we find that that court expressly
waived any decision upon the plea of
res judicata for the
reason that some views were then pressed upon its attention that
had not been presented in previous cases, and it reconsidered and
discussed the main question suggested by the defense, namely, that
the Constitution of the United States forbade the assessment of
that part of the
Page 173 U. S. 609
bridge property between low water mark on the Kentucky shore and
low water mark on the Indiana shore of the Ohio River. This Court
therefore has jurisdiction to review the final judgment of the
state court for the purpose of ascertaining whether it deprived the
defendants of any right, privilege, or immunity specially set up by
them under that instrument.
2. Whether the City of Henderson had authority to tax so much of
the property of the bridge company as was permanently between low
water mark on the Kentucky shore and low water mark on the Indiana
shore of the Ohio River depends primarily upon the question whether
the boundary of Kentucky extended to low water mark on the Indiana
shore. That question has been settled by judicial decisions. But it
may be well to restate here the grounds of those decisions:
Pursuant to a resolution of Congress passed in 1780,
recommending to the several states asserting title to waste and
unappropriated lands "in the western country" that a liberal
cession be made by them to the United States of a portion of their
respective claims, for the common benefit of the Union, the
Commonwealth of Virginia, by an act passed January 2, 1781,
surrendered to the United States all her right, title, and claim
"to the lands northwest of the river Ohio," subject to certain
conditions, one of which was that the ceded territory should be
laid out into states. 10 Henning's St. 564. The United States
having accepted that cession substantially according to the
conditions named, Virginia, by an act passed December 20, 1783,
authorized her delegates in Congress to convey to the United States
all her right, title, and claim, "as well of soil as jurisdiction,"
to the territory or tract of country within the limits of the
Virginia charter situated "to the northwest of the River Ohio." 11
Hening's Stat. 326. Such a deed was executed in 1784 by Thomas
Jefferson, Samuel Handy, Arthur Lee, and James Monroe, representing
Virginia; the deed describing the territory conveyed as "situate,
lying, and being to the northwest of the River Ohio." On the 13th
day of July, 1787,
Page 173 U. S. 610
Congress passed an ordinance for the government of the Territory
of the United States "northwest of the River Ohio." That ordinance
provided, among other things, that "no tax shall be imposed on
lands the property of the United States," and that
"the navigable waters leading into the Mississippi and
St.Lawrence, and the carrying places between the same, shall be
common highways and forever free, as well to the inhabitants of the
said territory as to the citizens of the United States, and those
of any other states that may be admitted into the confederacy,
without any tax, impost or duty therefor."
1 Stat. 51, note. Virginia, by an act passed in 1788, and which
referred to the above ordinance, declared that
"the afore-recited article of compact between the original
states and the people and states in the territory northwest of the
Ohio River be and the same is hereby ratified and confirmed,
anything to the contrary in the deed of cession of the said
territory by this commonwealth to the United States
notwithstanding."
12 Hening's Stat. 780. On the 18th day of December, 1789, the
General Assembly of Virginia passed the act entitled "An act
concerning the erection of the district of Kentucky into an
independent state." That act provided for a convention in Kentucky
to consider and determine whether that district should be formed
into an independent state. Its eleventh, fourteenth, fifteenth, and
eighteenth sections were in these words:
"§ 11. That the use and navigation of the River Ohio, so far as
the territory of the proposed state, or the territory which shall
remain within the limits of this commonwealth, lies thereon, shall
be free and common to the citizens of the United States, and the
respective jurisdictions of this commonwealth and of the proposed
state on the river as aforesaid shall be concurrent only with the
states which may possess the opposite shores of the said
river."
"§ 14. That if the said convention shall approve of the erection
of the said district into an independent state on the foregoing
terms and conditions, they shall and may proceed to fix a day
posterior to the first day of November, one thousand seven hundred
and ninety-one, on which the authority of this
Page 173 U. S. 611
commonwealth, and of its laws, under the exceptions aforesaid,
shall cease and determine forever over the proposed state, and the
said articles become a solemn compact, mutually binding on the
parties, and unalterable by either without the consent of the
other."
"§ 15.
Provided, however, that prior to the first day
of November, one thousand seven hundred and ninety-one, the general
government of the United States shall assent to the erection of the
said district into an independent state, shall release this
commonwealth from all its federal obligations arising from the said
district as being part thereof, and shall agree that the proposed
state shall immediately after the day to be fixed as aforesaid,
posterior to the first day of November, one thousand seven hundred
and ninety-one, or at some convenient time future thereto, be
admitted into the federal Union."
"§ 18. This act shall be transmitted by the executive to the
representatives of this commonwealth in Congress, who are hereby
instructed to use their endeavors to obtain from Congress a speedy
act to the effect above specified."
13 Hening's Stat. 17. This was followed by an act of Congress
approved February 4, 1791, which referred to the above Virginia Act
of December 18, 1789, and expressed the consent of Congress that
the said district of Kentucky, "within the jurisdiction of the
commonwealth of Virginia, and according to its actual boundaries on
the 18th day of December, 1789," should on the 1st day of June,
1792, be formed into a new state, separate from, and independent
of, the Commonwealth of Virginia. 1 Stat. 189, c. 4.
Early in the history of Kentucky, some doubts were expressed as
to the location of the western and northwestern boundaries of that
commonwealth, and to quiet those doubts, its legislature passed the
following act, which was approved January 27, 1810:
"Whereas doubts are suggested whether the counties calling for
the River Ohio as the boundary line extend to the state line on the
northwest side of said river, or whether the margin of the
southeast side is the limit of the counties; to explain which be it
enacted by the General Assembly, that each County of this
commonwealth calling
Page 173 U. S. 612
for the River Ohio as the boundary line shall be considered as
bounded in that particular by the state line on the northwest side
of said river, and the bed of the river and the islands therefore
shall be within he respective counties holding the main land
opposite thereto, within this state, and the several county
tribunals shall hold jurisdiction accordingly."
Kentucky Sess.Laws 1810, p. 100.
Next in order of time, and as determining the boundary line of
Kentucky, is the judgment of this Court in
Handly's
Lessee v. Anthony (1820), 5 Wheat. 374,
18 U. S.
379-380, which case involved the question of the western
and northwestern boundaries of that commonwealth. This Court
adjudged, upon a review of the legislative acts and public
documents bearing upon the question -- Chief Justice Marshall
delivering its opinion -- that, although a certain peninsula or
island on the western or northwestern bank of the Ohio, separated
from the mainland by only a narrow channel or bayou, which was not
filled with water except when the river rose above its banks, was
not within Kentucky, as originally established, the boundary of
that commonwealth did extend to low water mark on the western and
northwestern banks of the Ohio. "When a great river," said the
Chief Justice,
"is the boundary between two nations or states, if the original
property is in neither, and there be no convention respecting it,
each holds to the middle of the stream. But when, as in this case,
one state [Virginia] is the original proprietor, and grants the
territory on one side only, it retains the river within its own
domain, and the newly created state extends to the river only. The
river, however, is its boundary. . . . Whenever the river is a
boundary between states, it is the main, the permanent river, which
constitutes that boundary, and the mind will find itself
embarrassed with insurmountable difficulty in attempting to draw
any other line than the low water mark."
The question of boundary was again before this Court in
Indiana v. Kentucky, 136 U. S. 479,
136 U. S. 505,
136 U. S. 519.
That was a controversy between Kentucky and Indiana as to the
boundary lines of the two states at a particular point on the Ohio
River. Mr. Justice Field, delivering the unanimous judgment
Page 173 U. S. 613
of the Court, after referring to all the documentary evidence
relating to the question and to the decision in
Handly's Lessee
v. Anthony, above cited, said:
"As thus seen, the territory ceded by the State of Virginia to
the United States, out of which the State of Indiana was formed,
lay northwest of the Ohio River. The first inquiry, therefore, is
as to what line on the river must be deemed the southern boundary
of the territory ceded -- or, in other words, how far did the
jurisdiction of Kentucky extend on the other side of the
river."
Referring to the channel of the Ohio River as it was when
Kentucky was admitted into the Union, this Court stated its
conclusion to be that "the jurisdiction of Kentucky at that time
extended, and ever since has extended, to what was then low water
mark on the north side of that channel."
The same view of the question of boundary was taken by the Court
of Appeals of Kentucky in
Fleming v. Kenney, 4 J. J.
Marsh. 155, 158;
Church v. Chambers, 3 Dana 274, 278;
McFarland v. McKnight, 6 B. Mon. 500, 510, and
McFall
v. Commonwealth, 2 Metc. 394, 396, and by the General Court of
Virginia in
Commonwealth v. Garner, 3 Grat. 655, 677.
Upon this question of boundary nothing can be added to what was
said in the cases cited, and it must be assumed as indisputable
that the boundary of Kentucky extends to low water mark on the
western and northwestern banks of the Ohio River.
Such being the case, it necessarily follows that the
Jurisdiction of that commonwealth, for all the purposes for which
any state possesses jurisdiction within its territorial limits, is
coextensive with its established boundaries -- subject, of course,
to the fundamental condition that its jurisdiction must not be
exerted so as to entrench upon the authority of the national
government or to impair rights secured or protected by the national
Constitution.
3. But the plaintiffs in error insist that, although the
jurisdiction of Kentucky may extend to low water mark on the
opposite shore of the Ohio River, the City of Henderson cannot
assess for taxation any part of the property of the bridge company
between low water mark on the Kentucky shore
Page 173 U. S. 614
and low water mark on the Indiana shore without violating the
Constitution of the United States in particulars to be adverted to
presently.
In considering this objection so far as it is rested on federal
grounds, we shall assume that the action of the City of Henderson
was authorized by the terms of its charter, and was in no respect
forbidden by any principle of local law. Upon these points we
accept the decision of the highest court of Kentucky as conclusive.
We accept, also, as binding upon this Court, the declaration of the
state court that Kentucky intended by its legislation to confer
upon the City of Henderson a power of taxation for local purposes
coextensive with its statutory boundary. But we may add, as
pertinent in the consideration of the federal questions presented,
that if the Commonwealth of Kentucky could tax for state purposes
the bridge property so far as it was between low water mark on the
Kentucky shore and low water mark on the Indiana shore, it could
confer upon one of its municipal corporations the power to tax the
same property for local purposes. So that a judgment declaring the
taxation of such property by the City of Henderson for local
purposes, under the authority of the state, to be forbidden by the
Constitution of the United States, would, in effect, declare that
like taxation by the state for state purposes would be forbidden by
that instrument.
It is said that the bridge property outside of low water mark on
the Kentucky shore is so far beyond the reach of municipal
protection by the authorities of the City of Henderson that it
cannot be said to receive any benefits whatever from the municipal
government, and that to impose taxes for the benefit of the city
upon such property is a taking of private property for public use
without just compensation, and therefore inconsistent with the due
process of law ordained by the Fourteenth Amendment of the
Constitution of the United States.
Chicago, Burlington &c.
Railroad v. Chicago, 166 U. S. 226,
166 U. S. 241.
It is conceivable that taxation may be of such a nature and so
burdensome as properly to be characterized a taking of private
property for public use without just compensation.
But in order to bring taxation imposed by a state or under
Page 173 U. S. 615
its authority within the scope of the Fourteenth Amendment of
the national Constitution, the case should be so clearly and
palpably an illegal encroachment upon private rights as to leave no
doubt that such taxation, by its necessary operation, is really
spoliation under the guise of exerting the power to tax. As an act
of Congress should not be declared unconstitutional unless its
repugnancy to the supreme law of the land is too clear to admit of
dispute, so a local regulation under which taxes are imposed should
not be held by the courts of the Union to be inconsistent with the
national Constitution unless that conclusion be unavoidable. All
doubt as to the validity of legislative enactments must be
resolved, if possible, in favor of the binding force of such
enactments. In the case before us, the state court rejected the
idea that the bridge property in question was entirely beyond
municipal protection and could not receive any of the benefits
derived from the municipal government of the City of Henderson. We
cannot adjudge that view to be so clearly untenable as to entitle
the defendants to invoke the principle that private property cannot
be taken for public use without just compensation.
On the contrary, the property which it is contended was
illegally taxed is all within the territorial limits of Kentucky,
within the statutory boundary of the City of Henderson, and within
reach of the police protection afforded by that city for the
benefit and safety of all persons and property within its limits --
not, perhaps, as much or as distinctly so as that part of the
bridge on the Kentucky bank south of low water mark on that shore;
but this difference does not constitute a reason why the city may
not regard the bridge and its appurtenances within its statutory
boundaries as an entirety for purposes of taxation, nor afford any
proper ground for holding that the constitutional right to
compensation for private property taken for public use has been
violated. The Court of Appeals of Kentucky, in its opinion in this
case, said:
"Applying the just and equitable rule of making burdens and
benefits of government reciprocal, we think the whole bridge
structure within the corporate limits of the City of Henderson is
liable for municipal taxes, for neither the benefits to the bridge
company
Page 173 U. S. 616
are lessened, nor its corresponding duty to bear its full share
of the burden is impaired or affected, by the fact that a portion
of the bridge is over water."
We are unwilling to hold that the state court, in so adjudging,
has prescribed any rule of taxation inconsistent with the supreme
law of the land.
In determining a question of this character, the power to tax
existing, a judicial tribunal should not enter into a minute
calculation as to benefits and burdens for the purpose of balancing
the one against the other and ascertaining to what extent the
burdens imposed are out of proportion to the benefits received.
Exact equality and absolute justice in taxation are recognized by
all as unattainable under any system of government. The Court of
Appeals of Kentucky, speaking by Chief Justice Marshall, in
Cheaney v. Hooser, 9 B. Mon. 330, 345, after observing
that there must necessarily be vested in the legislature a wide
range of discretion as to the particular subjects or species of
property which should be the subject of general or local taxation,
as well as to the extent of the territory within which a local tax
shall operate, well said:
"There must be a palpable and flagrant departure from equality
in the burden, as imposed upon the persons or property bound to
contribute, or it must be palpable that persons or their property
are subjected to a local burden for the benefit of others, or for
purposes in which they have no interest, and to which they are
therefore not justly bound to contribute. The case must be one in
which the operation of the power will be at first blush pronounced
to be the taking of private property without compensation, and in
which it is apparent that the burden is imposed without any view to
the interest of the individual in the objects to be accomplished by
it."
Proceeding upon the ground, distinctly affirmed by the highest
court of Kentucky, that the City of Henderson was authorized by the
state to exert its power of taxation as to all property within its
statutory boundary, and assuming it to be conclusively established
by judicial decisions that the boundary and jurisdiction of
Kentucky extends to low water mark on the Indiana side of the Ohio
River, we adjudge that the taxation by the city, as property, of
the bridge and its appurtenances
Page 173 U. S. 617
within the fixed boundary of the city between low water mark on
the two sides of the Ohio River was not a taking of private
property for public use without just compensation in violation of
the Constitution of the United States.
4. Another contention of the defendants is that the acceptance
by the bridge company of its charter and the construction of the
bridge under it created a contract between that company and the
state whereby the bridge structure north of low water mark on the
Kentucky shore of the river was exempted from taxation for any
local purpose, and that the tax ordinances of the City of Henderson
on which the taxation in question is based, impair the obligation
of that contract, and for that reason are repugnant to the
Constitution of the United States.
Did the bridge company acquire by contract an exemption from
local taxation in respect of its bridge situated between low water
mark on the two shores of the Ohio River? We think not. The charter
of the City of Henderson shows that its boundary extended to low
water mark on the Indiana shore of that river, and that the common
council was invested with authority to levy and collect taxes at a
prescribed rate upon all property "within the limits of the city"
which was taxable by law for state purposes, with certain specified
exceptions that have no relation to the particular question just
stated. So that the grant made in 1882 to the bridge company was
made subject to the taxing power thus possessed by the municipal
authorities of the City of Henderson. And that there was no purpose
on the part of the city to waive any right it possessed to tax
property for municipal purposes is made clear by the express
stipulation that the grant to the bridge company should not be
construed
"as waiving the right of the City of Henderson to levy and
collect taxes on the approaches to said bridge, or any building
erected by said bridge company within the corporate limits of said
city, the bridge itself, and all appurtenances thereto within the
limits of said city."
This stipulation, properly interpreted, not only saved any right
the city then had to impose taxes, but any right that might
subsequently be lawfully conferred upon it. An exemption
Page 173 U. S. 618
from taxation cannot arise from mere implication, but only from
words clearly and unmistakably granting such an immunity.
But let it be assumed for the purposes of the present case that
the stipulation only embraced such right of taxation as the city
had at the time it granted authority to construct the bridge within
its limits. In that view, the defendants insist that interpreting
the charter of the city and the grant to the bridge company in the
light of the law of Kentucky, as established at the date of that
grant by repeated decisions of its highest court, property such as
this bridge, situated between low water mark on the two shores of
the Ohio River, although within the statutory boundary of the city,
was not within the limits of the city for purposes of municipal
taxation, for, it is contended, the bridge structure so taxed did
not and could not receive from the municipal government any
benefits, actual or presumed. The cases in the Court of Appeals of
Kentucky, decided before the bridge company accepted its charter,
upon which defendants rely in support of this contention are
Cheaney v. Hooser (1848), 9 B. Mon. 330;
Covington v.
Southgate (1854), 15 B. Mon. 498;
Marshall v. Donovan
(1874), 10 Bush, 681, 692, and
Courtney v. Louisville
(1876), 12 Bush, 419. These cases related to the taxation by
municipal corporations of lands which, it was alleged, were so
situated as not to receive any benefit whatever from the government
of such corporations. The general principle to be deduced from them
is that the taxation of lands for local purposes which do not
receive any benefits, actual or presumed, from the municipal
government imposing the taxation is a taking of private property
for public use without compensation, and therefore in violation of
the constitutional provision on that subject. So that, if the
charter of the bridge company was accepted with reference to the
law of Kentucky as it was then judicially declared by its highest
court, as may well be assumed, the utmost that can be asserted is
that the company had a contract with the state which prohibited it,
or any municipal corporation acting under its authority, from
subjecting such of the bridge property to local taxation as could
not receive any
Page 173 U. S. 619
benefit, actual or presumed, from the government of that
corporation.
In those cases, the court wisely refrained from laying down any
general rule that would control every controversy that might arise
touching the application of the constitutional provision
prohibiting -- as did the Constitution of Kentucky as well as that
of the United States -- the taking of private property for public
use without just compensation. So far as those adjudications are
concerned, it is competent for the court to inquire in every case,
as it arises, whether particular property taxed for local purposes
is so situated that it cannot receive any benefit, actual or
presumed, from the government of the municipal corporation imposing
such taxation. The argument of the learned counsel assumes it to be
incontrovertible that the bridge property here taxed cannot receive
any such benefit from the government of the City of Henderson. As
already indicated, this Court does not accept that view, and is of
opinion that the bridge property within the statutory limits of
that city, and looked at in its entirety, may be regarded as so
situated with reference to the city that it enjoys, and must
continue to enjoy as long as the bridge exists, such benefits from
the government of the city that, consistently with the Constitution
of the United States and consistently with the rule heretofore
adverted to for determining the validity of legislative enactments,
it may be subjected to municipal taxes under any system established
by the state for the assessment of property for taxation. In this
view, there is no ground upon which to base the contention that the
ordinance of the city imposing the taxation in question impairs the
obligation of any contract between the bridge company and the state
arising from the acceptance by that company of its charter, and the
construction of the bridge under it.
What has been said disposes of the contention that to sustain
the validity of the ordinances under which the bridge was taxed
would impair the obligation of the contract between the bridge
company and the Louisville & Nashville Railroad Company. It is
scarcely necessary to observe that no
Page 173 U. S. 620
contract between the bridge company and the railroad company
could stand in the way of the city's exerting, as between it and
the bridge company, any power of taxation it legally possessed. If
the taxation in question did not impair the obligation of any
contract between the city and the bridge company -- and we have
held that it did not -- it results that the railroad company cannot
complain of such taxation. The agreement between the bridge company
and the railroad company was necessarily subject to the exercise by
the City of any authority it had or might have touching the
taxation of the bridge for local purposes.
5. The assignments of error embrace the contention that the
judgment below denies to the bridge company the equal protection of
the laws
"in that its property has been subjected to taxation from which
all other land not divided into lots has been exempted, although
the only reasons for exemption apply with much greater force to the
property of the plaintiff in error than to the property which
enjoys the exemption."
This contention is based upon the proviso in the city's charter
declaring that
"no land embraced within the city limits, and outside of
ten-acre lots as originally laid off, shall be assessed and taxed
by the city council unless the same is divided or laid out into
lots of five acres or less, and unless all of same is actually used
and devoted to farming purposes."
Kentucky Acts 1887-88, Vol. 2, p. 991.
We are of opinion that this proviso has no reference to bridges,
their approaches, piers, etc., but refers only to lands capable of
being cultivated, or used and divided into lots upon which
buildings may be erected, or over which streets or other highways
may be constructed. This is the better interpretation of both the
old and the new charters of the city. Besides, the construction
placed by the state court upon the charter of the city in respect
of its power to tax the bridge property necessarily leads to the
conclusion that the provision forbidding the taxation of lands not
divided into lots of five acres or less does not apply to a bridge
erected over the Ohio River within the city's limits. In this view,
there is no basis for the
Page 173 U. S. 621
suggestion of a denial of the equal protection of the laws,
particularly as it is not contended that the city applies to the
assessment of the bridge and its approaches for taxation any rule
that is not applied to all property within its limits. As in the
case of the property of others, the bridge and its approaches are
required to be taxed upon their value.
6. Another contention of the plaintiffs in error is that the
assertion of the right of the Commonwealth of Kentucky, or of any
municipal corporation acting under its authority, to tax bridge
structures permanently located, with the consent of Congress, in or
over the bed of the Ohio River is the assertion of authority over
that stream inconsistent with the Congressional and legislative
compact concerning its use, and inconsistent with the concurrent
jurisdiction over the river of the states on either side of it.
Indeed, the defendants insist that if the power to tax the bridge
structure north of low water mark on the Kentucky side and south of
low water mark on the Indiana side of the Ohio River exists at all,
it rests in Congress, and could not be exercised even by the
concurrent action of two states, much less by the independent
action of one.
The present case does not require any decision by this Court as
to the extent and character of the jurisdiction which may be
exercised over the Ohio River by the states whose boundaries come
to low water mark on its shore opposite to Kentucky. The only
question for determination is whether the taxation, under the
authority of Kentucky, of this bridge within its jurisdiction
involves any encroachment upon federal authority or any
infringement of rights secured to the defendants by the
Constitution of the United States.
Touching the first branch of this question, it is to be observed
that Kentucky was admitted into the Union with its "actual
boundaries" as they existed on the 18th day of December, 1789 --
that is, with its northern and western boundary extending to low
water mark on the opposite side of the Ohio River. That state came
into the Union equal in all respects with the states that had
accepted the national Constitution, and with every power that
belonged to any existing state, and therefore its power of taxation
was in no respect
Page 173 U. S. 622
limited or restrained, except as its exercise was expressly or
impliedly limited or restrained by that instrument. But what clause
of that instrument declares that a state may not tax for state
purposes any property within its territorial limits which is owned
and operated by one of its own private corporations? In
McCulloch v.
Maryland, 4 Wheat. 316,
17 U. S. 429,
it was said by the Chief Justice to be obvious that the power of
taxation was an incident of sovereignty, was coextensive with that
to which it was an incident, and that "all subjects over which the
sovereign power of a state extends are objects of taxation." The
subject of taxation in this case is a bridge structure within the
territorial limits of Kentucky. It is therefore property over which
the state may exert its authority, provided it does not encroach
upon federal power, or entrench upon rights secured by the
Constitution of the United States. It is nonetheless property,
although the state does not own the soil in the bed of the river
upon which the piers of the bridge rest. Whatever jurisdiction the
State of Indiana may properly exercise over the Ohio River, it
cannot tax this bridge structure south of low water mark on that
river, for the obvious reason that it is beyond the limits of that
state, and permanently within the limits of Kentucky.
Nor do we perceive that the power of Kentucky to tax this bridge
structure as property is any the less by reason of the fact that it
was erected in and over the Ohio River under the authority or with
the consent of Congress. The taxation of the bridge by Kentucky is
in no proper sense inconsistent with the power of Congress to
regulate the use of the river as one of the navigable waters of the
United States. This taxation does not interfere in any degree with
the free use of the river by the people of all the states, nor with
any jurisdiction that the State of Indiana may properly exercise
over that stream.
Nor does the fact that the bridge between low water mark on
either side of the river is used by the corporation controlling it
for purposes of interstate commerce exempt it from taxation by the
state within whose limits it is permanently located. The state
cannot by its laws impose direct burdens upon the conduct of
interstate commerce carried on over the
Page 173 U. S. 623
bridge. But, as the decisions of this Court show, it may subject
to taxation property permanently located within its territorial
limits, and employed in such commerce by individuals and by private
corporations. In
Covington &c. Bridge Co. v. Kentucky,
154 U. S. 204,
154 U. S. 212,
it was said:
"As matter of fact, the building of bridges over waters dividing
two states is now usually done by Congressional sanction. Under
this power, the states may also tax the instruments of interstate
commerce as it taxes other similar property, provided such tax is
not laid upon the commerce itself."
See also Henderson Bridge Co. v. Henderson City,
141 U. S. 679,
141 U. S. 689;
Pittsburgh &c. Railway v. Board of Public Works,
172 U. S. 32. In
Thomson v. Pacific
Railroad, 9 Wall. 579, the question was as to the
liabilities and rights of a railroad company in respect to taxation
under state legislation. It was contended in that case that the
road, having been constructed under the direction and authority of
Congress for the purposes and uses of the United States and being a
part of a system of roads thus constructed, was exempt from
taxation under state authority, that the road was an instrument of
the general government, and as such not subject to taxation by the
state. That contention was overruled, this Court saying:
"We are not aware of any case in which the real estate or other
property of a corporation not organized under an act of Congress
has been held to be exempt, in the absence of express legislation
to that effect, from just contribution, in common with other
property, to the general expenditure for the common benefit because
of the employment of the corporation in the service of the
government. . . . There is a clear distinction between the means
employed by the government and the property of agents employed by
the government. Taxation of the agency is taxation of the means.
Taxation of the property of the agent is not always or generally
taxation of the means."
In the same case, the Court said that
"no one questions that the power to tax all property, business,
and persons within their respective limits is original in the
states, and has never been surrendered,"
although that power cannot be so used "as to defeat or hinder
the operations of the national government." The
Page 173 U. S. 624
same principles have been maintained in other cases in this
Court. If a state may tax the property of one of its corporations
engaged in the service of the United States, such property being
within its limits, there is no sound reason why the bridge property
in question, although erected, with the consent of Congress, over
one of the navigable waters of the United States, should be
withdrawn from the taxing power of the state which created the
corporation owning it, and within whose limits it is permanently
located.
The judgment of the Court of Appeals is
Affirmed.