Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/512

 § 488.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. VIII. other states. These restrictions derive their importance in regard to corporations from the fact that enterprises of great magnitude, like the building and working of railroads and telegraphs extending through several states, are ordinarily- undertaken by corporations, the means of single individuals rarely sufficing for the successful carrying out of such enter- prises. On the other hand, the restrictions remaining for discussion on the power of a state to tax corporations, arise from special contractual relation between a corporation and the state incorporating it, and from the application of the rule that no man shall be deprived of his property without due process of law. § 488. In incorporating a corporation, a state legislature may exempt from taxation the corporate property for a specified time, or forever ; and this exemption may be from taxation beyond a certain amount, or from any taxation whatsoever. Such an exemption, when made by the legislature at the time of incorporating the corporation, and when expressed in clear and unmistakable terms, 1 constitutes a contract between the corporation and the state, the obligation of which would be impaired by any subsequent state law at variance with its terms. 2 Thus, in Chartered exemptions from taxa- tion. 1 To sustain against a state a con- tract not to tax a corporation, the terms must be clear and unequivocal. North Missouri Railroad v. Maguire, 20 Wall. 46; Memphis Gas Co. v. Shelby County, 109 U. S. 398; St. Louis v. Manufacturers 1 Savings Bank, 49 Mo. 574. That a state has chartered a corporation without reserving the right to alter and re- peal does not prevent the state from taxing the franchises and property of such corporation. Providence Bank v. Billings, 4 Pet. 519. See Portland Bank v. Apthorp, 12 Mass. 252; Commonwealth v. Lancaster Savings Bank, 123 Mass. 493. 2 When a state in chartering a charitable corporation exempts its property from taxation, a subsequent law taxing its property is void. 492 Washington University v. Rouse, 8 Wall. 439; Home of the Friendless v. Rouse, ib. 430; University v. People, 99 U. S. 309; Asylum ». New Orleans, 105 U. S. 362; Mobile and S. H. R. R. Co. v. Kennerly, 74 Ala. 566. The same is true of a railroad corporation. Humphrey v. Pegues, 1(> Wall. 244; Farrington v. Tennes- see, 95 U. S. 679; Pacific Railroad Co. v. Maguire, 20 Wall. 36; Stearns v. Minn., 179 U. S. 223; Duluth & I. R. R. Co. v. St. Louis County, 179 U. S. 302. And of other stock cor- porations; Jefferson Branch Bank v. Skelly, 1 Black, 436; Franklin Branch Bank v. Ohio, 1 Black, 474; ace. Mobile and Ohio R. R. Co. v. Moseley, 52 Miss. 127; Atlantic and Gulf R. R. Co. v. Allen, 15 Fla. 637; Bank of Commerce v. McGowan, 6