APPEAL from the Circuit Court for the District of South Carolina; the case being this: Jessup, of New York, and owner of a number of shares in the Northeastern Railroad Company, a corporation created in 1851 by the State of South Carolina, filed a bill in the court below against Tomlinson and others, officers of the State of South Carolina, to enjoin them from levying a tax on the property of the road. The question was whether the property was liable to taxation under the legislation of the State. The act incorporating the company contained a grant of the usual powers of railroad companies, and the charter was for the term of fifty years. At the time of its passage the 41st section of an act of the General Assembly, passed in December, 1841, was in force, as follows: 'It shall become part of the charter of every corporation, which shall, at the present, or any succeeding session of the General Assembly, receive a grant of a charter, or any renewal, amendment, or modification thereof (unless the act granting such charter, renewal, amendment, or modification shall, in express terms, except it), that every charter or incorporation granted, renewed, or modified as aforesaid, shall at all times remain subject to amendment, alteration, or repeal, by the legislative authority.'*fn1 The act of incorporation did not except the charter of the company from the operation of this section. The company received extensions of their powers and privileges at various times subsequently, but in no case did the amendatory acts except the company from the operation of that section.*fn2 By an act, passed December 19th, 1855, entitled 'An Act to amend the charter of the Northeastern Railroad Company, and for other purposes,' it was enacted as follows: 'That the stock of the said company, and the real estate that it now owns or may hereafter acquire, which is connected with or subservient to the works authorized in the charter of the said company, shall be, and the same is hereby exempted from all taxation during the continuance of the present charter of the said company.'*fn3 This latter act did not except in terms the charter of the company from the provisions of the 41st section of the act of 1841, above recited. The present constitution of South Carolina was adopted in 1868, and article 9, section 1, is as follows: 'The General Assembly shall provide, by law, for a uniform and equal rate of assessment and taxation, and shall prescribe such regulations as shall secure a just valuation for taxation of all property, real, personal, and possessory, except mines and mining claims, the proceeds of which alone shall be taxed; and also exempting such property as may be exempted by law for municipal, educational, literary, scientific, religious, or charitable purposes.' Article 12, section 2, is as follows: 'The property of corporations now existing or hereafter created, shall be subject to taxation, except in cases otherwise provided for in this constitution.' On the 15th of September, 1868, the General Assembly passed an act entitled 'An Act providing for the assessment and taxation of property,' the first section of which declares 'That all real and personal property in this State, and personal property of residents of the State, which may be kept or used temporarily out of this State, with the intention of bringing the same into the State, or which has been sent out of the State for sale and not yet sold; all moneys, credits, investments, in bonds, stocks, joint stock companies or otherwise, of parties resident in this State, shall be subject to taxation.'*fn4 Subsequent acts provided specially for the taxation of the property of railroad companies, under which the officers of the State were proceeding to assess and tax the property of the Northeastern Railroad Company, when the present bill was filed. The court below granted an injunction; at first temporary, and then final; and from the final injunction the officers of the State appealed.
The constitution of South Carolina, adopted in 1868, declares that the property of corporations then existing or thereafter created, shall be subject to taxation, except in certain cases, not material to the present inquiry. The subsequent legislation of the State carried out this requirement and provided for the taxation of the property of railroad companies; and the question presented is, whether the act of December, 1855, to amend the charter of the Northeastern Railroad Company, exempted the property of that company from such taxation. The company was incorporated in 1851, and at that time a general law of the State was in existence, passed in 1841, which enacted that the charter of every corporation subsequently granted, and any renewal, amendment, or modification thereof, should be subject to amendment, alteration, or repeal by legislative authority, unless the act granting the charter or the renewal, amendment, or modification, in express terms excepted it from the operation of that law. The provisions of that law, therefore, constituted the condition upon which every charter of a corporation subsequently granted was held, and upon which every amendment or modification was made. They were as operative and as much a part of the charter and amendment, as if incorporated into them.
The act amending the charter of the Northeastern Railroad Company, passed in December, 1855, provided that the stock of the company, and the real estate it then owned, or might thereafter acquire, connected with or subservient to the works authorized by its charter, should be exempted from taxation during the continuance of the charter. This act contained no clause excepting the amendment from the provisions of the general law of 1841. It was, therefore, itself subject to repeal by force of that law.
It is true that the charter of the company when accepted by the corporators constituted a contract between them and the State, and that the amendment, when accepted, formed a part of the contract from that date and was of the same obligatory character. And it may be equally true, as stated by counsel, that the exemption from taxation added greatly to the value of the stock of the company, and induced the plaintiff to purchase the shares held by him. But these considerations cannot be allowed any weight in determining the validity of the subsequent taxation. The power reserved to the State by the law of 1841 authorized any change in the contract as it originally existed, or as subsequently modified, or its entire revocation. The original corporators, or subsequent stockholders, took their interests with knowledge of the existence of this power, and of the possibility of its exercise at any time in the discretion of the legislature. The object of the reservation, and of similar reservations in other charters, is to prevent a grant of corporate rights and privileges in a form which will preclude legislative interference with their exercise if the public interest should at any time require such interference. It is a provision intended to preserve to the State control over its contract with the corporators, which without that provision would be irrepealable and protected from any measures affecting its obligation.