liable for goods destroyed by fire, though the company's officers testify that the company had two freight rates-one under the restricted liability, the other without-and that, if the shipper had so requested, permission would have been given to ship under a contract without the "fire clause" in it. The stipulation, being unreasonable and unjust, is not a valid limitation of the company's common-law liability as a common carrier. Where the railroad company has given its customers no choice as to whether they would ship with or without the "fire clause," the acquiescence of the shipping public in the form of the bill of lading containing the "fire clause" does not establish the reasonableness of the exemption. Caldwell, J., says:

There is no controversy about the consignment, loss, and value of the cotton; nor is there any denial that the defendant company would be liable for the loss, under the rules of the common law. These are all conceded. But it is insisted in behalf of the company that its common-law liability was limited by special contract, and that special contract is relied upon in bar of any recovery. The bill of lading under which the shipment was to be made is produced in evidence. It contains a fire clause which stipulates that the company shall not be liable for loss or damage by fire. This is the special contract through which exemption from liability is sought. The plaintiffs deny the validity of that stipulation, and thus the issue for our determination is presented.

It is now too well settled to admit of debate that the common-law liability of common carriers may be limited by special contract, even to the extent of denuding them of the character of insurers, except as against their own negligence, or that of their agents and servants; and the limitation may be, and is generally, embraced in the bill of lading delivered to the shippers at the time. It is not every such special contract, however, that is effective. To be valid, it must be fairly obtained, and just and reasonable. Under the English railway and canal traffic act of 1854, (17 & 18 Vict. ch. 31, § 7,) such stipulations are called "conditions," and they can be upheld only when they "shall be adjudged * to be just and reasonable." The same criterion is uniformly applied in this country, and no limitations of the carrier's common-law liability, in whatever form made, will afford protection unless just and reasonable in the eyes of the law. Railroad Co. v. Lockwood, 17 Wall. 357; Hart v. Railroad Co. 112 U. S. 338, 5 Sup. Ct. Rep. 151; Marr v. Telegraph Co. 1 Pickle, 542, 3 S. W. Rep. 496; Transportation Co. Bloch, 2 Pickle, 397, 6 S. W. Rep. 881. Though such is the generally accepted test, the use of these words ("just and reasonable") will not always meet the requirements of investigation. What will be just and reasonable in one case may not be so in another. The justness and reasonableness of the condition or limitation must of necessity depend upon the peculiar facts and circumstances of every case, the nature of the article to be conveyed, the hazard of the transportation, the surroundings of the parties at the time, and the mutual advantages given and received.

Referring to the burden and weight of proof, an eminent British author says: "The burden of proving the reasonableness of a condition lies upon the company. The most cogent evidence in favor of reasonableness is to show that the condition was not forced upon the customer, but that he had a fair alternative of getting rid of the condition, and yet agreed to it." Redman, Law Ry. Carr. (2d Ed.) p. 66, citing Lewis v. Railway Co. 47 Law J. Q. B. 131. In further treating on the same subject, the same writer, on page 71, says: "To enable a company to rely on an alternative contract offered to the customer, it must appear that such alternative was itself reasonable. A company cannot offer the choice of two unreasonable conditions, and then rely on the one actually chosen." Citing Lloyd v. Railway Co. 15 Ir. C. L. 37. To the same effect as the latter quotation is the Marr Case, decided

by this court in 1886. There the telegraph company

was shown to have had four different rates of charges, with as many different degrees of liability. They were all held to be unreasonable, and the fact that the customer choosing one rate had the option of taking any one of the other three was of no avail to the company, in an action for damages. Marr v. Telegraph Co. 1 Pickle, 545, 3 S. W. Rep. 496. The alternative must be both reasonable and bona fide. If either unreasonable or colorable only, it will be unavailing as a defense to the action against a carrier. A company standing before the public as a common carrier, and enjoying the advantages and franchises as such, must be ready to do the business of a common carrier, with the full measure of responsibility imposed by the common law; and it may at the same time offer to do the same business with a limited liability, the limitation resting upon a sufficient consideration. An offer or readiness to transport the goods of its customer with the one or the other degree of responsibility, at his option, is as little as can be required of any common carrier. Less than this does not present a bona fide and reasonable alternative. Reduction of freight charges is the usual consideration for the diminution of responsibility on the part of the company. One of the leading principles deducible from the English cases is stated by Mr. Redman in these words: "A condition is reasonable which reduces a company's liability to a minimum, if it is coupled with compensating advantages to the customer (such as cheapness of carriage), and the latter has the alternative of getting rid of the condition by paying a reasonably higher rate." Redman, Law Ry. Carr. p. 75, § 2. This language puts the law clearly, and meets our unqualified approval. It is reproduced as the law of the two countries in a recent American work. 2 Amer. & Eng. Cyclop. Law, 819.

These clauses, similar to the one before us, when based upon a sufficient consideration, have by the Supreme Court of the United States, and by this court, been held to be valid, and to protect the company from liability for loss by fire, caused otherwise than by the negligence of the company or its agents. York Co. v. Railroad Co. 3 Wall. 107; Dillard v. Railroad Co. 2 Lea, 288. In the latter case the court said: "A lower rate of freight, or something equivalent, will be a sufficient consideration for the stipulation," 2 Lea, 293. In the former it is broadly intimated that a reduction of charges will be presumed to be the consideration for such a stipulation, the language of the court being: "* * There is no evidence that a consideration was not given for the stipulation. The company, probably, had rates of charges proportioned to the risks they assumed from the nature of the goods carried, and the exemption of losses by fire must nec

*

essarily have affected the compensation demanded." 3 Wall. 113. In speaking of a stipulation for a limited liability in a railroad ticket, the New York court of appeals said: "Like all contracts, to render such an one valid, it is indispensable that it have some consideration, which it would not have if the passenger paid the full fare fixed by law. * If the service is reduced, the amount of the reward must be reduced in proportion; and, if the company is relieved from risk, it must make compensation for that relief by the reduction of fare or otherwise." Bissell v. Railroad Co. 25 N. Y. 442. The performance of an act which a party is under a legal obligation to perform does not constitute a good consideration for a promise. Add. Cont. § 4. Hence a mere agreement by a common carrier to transport goods furnishes no consideration for a stipulation for less than common-law liability. Lawson, Carr. § 212.

SPECIAL ASSESSMENT AND SPECIAL TAXATION-NATURE OF

1. General Taxation.

2. Special Assessments.

3. Special Taxation.

(a.) Charitable Institutions.

(b.) Churches.

(c.) Educational Institutions.
(d.) Railroad Property.
(e.) County Buildings.

1. General Taxation.-Many corporations have received charters which have provisions exempting their property from taxation. The question has often come before the courts whether taxation as used in these

charters included special taxation and special assessments for the purpose of local improvements. General taxation is a burden or charge imposed upon persons or property to raise money for public purposes. Special assessments for city or village improvements are not regarded as burdens, but as an equivalent or compensation for the enhanced value which the property of the person has derived from the improvement.1

2. Special Assessments.—A street is opened in a city, and to pay for the land taken, the damages of the improvements thereon, or adjacent thereto, and injury thereby, and all other expenses, bonds are issued; to pay the same and the interest thereon, an annual percentage is directed to be levied on the lots benefited thereby, which percentage is upon the enhanced value of the lots as fixed by a board of public works, this imposition is an assessment and not a general tax. The property of the United States, or of the State,

Mix v. Ross, 57 Ill. 121.

2

or of a municipal corporation is not subject to taxation for revenue purposes. An assessment for benfits conferred by the laying out of a highway, is an exercising of the taxing power. But when the assessment is local, special and limited to a class of persons interested in a local improvement, who are assumed to receive an equivalent for the assessment from benefits conferred by the improvements, it is not in the common acceptation of the term a tax. The Kansas constitution, art. 12, § 5, distinguishes the powers of cities in levying taxes for revenue and for assessments for improvements. They are classed as distinct and independent powers to be exercised in different ways.* Under a provision in a charter "not liable to any tax or public imposition whatever," a corporation resisted the payment of assessments made for street improvements; the court held that nothing was intended only to exempt the property from all tax and burdens levied or imposed for purposes of revenue, and not to relieve the corporation from such charges as are inseparably incident to its location with regard to itsproperty.5

3. Special Taxation.- The Illinois constitution provides for special taxation of contiguous property for local improvements. It has been decided in this State that special taxation, as spoken of in the constitution, is based upon the supposed benefit to the contiguous property, "and differs from special assessments only in the mode of ascertaining the benefits." Special assessment differs from special taxation in this: The assessment cannot exceed the benefits the property will derive from the improvement, and the owner of the property assessed has the right to have this question passed upon by a jury. In cases of special taxation, the jury have nothing to do with the amount which is assessed upon contiguous property. In special taxation the whole of the burden is imposed upon contiguous property, upon the supposed ground that the benefits will be equal or equivalent to the burden cast upon the prop

2 People v. Austin, 47 Cal. 353.

3 Bridgeport v. N. Y. & N. H. R. Co., 36 Conn. 265; Williams v. Corcoran, 46 Cal. 553.

4 Paine A. Sprateley, 5 Kan. 524.

5 Baltimore v. Cemetery, 7 Md. 512; King v. Portland, 2 Oreg. 146.

6 Const. 1870, Art. 9, § 9.

7 Crane v. Tolono, 96 Ill. 255; White v. People, 94 Ill. 607; Enos v. Springfield, 113 Ill. 65

erty. In a late case this question of what special taxation means has been decided. By section 22 of the act to incorporate this railroad, approved February 10, 1851, it is provided that "the said corporation is hereby exempted from all taxation of every kind." It was held that this provision did not exempt the corporation from special taxation of its contiguous property for local improvements. That special taxation does not, in reference to non-exemption, differ from special assessment in providing for the imposing a tax for local improvement upon contiguous property. A special assessment is not embraced within the meaning of the word "taxation," because the owner of the property assessed receives as benefits the amount of his assessment, and is not therefore burdened by a tax. So special taxation of contiguous property cannot be included within the meaning of the general word "taxation," because the owner is compensated for the amount of the tax by the enhanced value of his property, and is not subject to the burden implied in ordinary taxation. The court conclude: "We are, therefore, of the opinion that appellant's right of way was not exempt, by reason of the provision in its charter, from the special tax assessed against it." It has also been held that cities are not exempt from special assessment. While the State may not authorize corporate authorities to levy special assessments upon property of the United States, as it would be an invasion of the rights of a distinct sovereignty, no such reason exists as between the several agencies of the State government, which are subject to its control and direction, and a county may be compelled to pay a special assessment against its court house for local improvements.10 In Minnesota under a charter of a railroad company which provided for the exemption of its property (other than its land grants) from all assessments and taxes whatever by the city, or by any county, city, town, village or other municipal authority in the State, its property held by it for the purpose of its railroad, is not subject to assessment for local improvements. Also by

11

8 Sterling v. Galt, 117 Ill. 11; Watson v. Chicago, 115 Ill. 78; Springfield v. Green, 120 Ill. 269.

9 Ill. Cent. R. R. Co. v. Decatur, 126 Ill. 92

10 McLean County v. City of Bloomington, 106 Ill. 209.

the Minnesota statute of 1878, ch. 34, § 250, the land and property of a cemetery association were exempt from "all public taxes and assessments." The court held that this exemption extended to assessments for local improvements, as for example; a sidewalk built in front of the property. The court bases the decision on the ground that when both terms "taxes and assessments" are used, the latter evidently in the sense used in the statute, meant burdens or charges to defray expenses of local improvements. Such being the meaning of the statute, the cemetery association was exempt from special assessments for local improvements.

12

A

(a.) Charitable Institutions. Where a provision in an act incorporating a charitable institution in the State of New York, exempts its real estate from taxation, such real estate is not thereby exempted from an assessment for local improvement; the assessment is not taxation within the meaning of the act.13 charter providing that the property shall be "exempted from taxes of every kind," will not protect a charitable institution from paying special assessments for improvements on a street fronting it. Taxes are charges or burdens imposed by the legislature for public purposes, or to defray necessary expenses of the government. A special assessment is not considered as a burden, but as an equivalent or compensation for the enhanced value which the property derives from the improvement. 14 So a statute exempting property of an institution "from all taxes, either by the State, parish or city," will not exempt it from liability to contribute to the expense of local improvements in front of property belonging to it, ordered to be paved by an ordinance of a city corporation made in the legal exercise of its authority. Such an assessment is not a tax.15

(b.) Churches.-The same rule applies to church real estate. A law providing "that no real estate belonging to any church shall be taxed by any law of this State" does not exempt from local assessments for improve

11 St. Paul, etc. R. R. Co. v. City of St. Paul, 21 Minn. 526.

12 Oakland Cemetery v. St. Paul, 36 Minn. 529. 13 Rosevelt Hospital v. City of New York, 84 N. Y. 108.

14 Sheehan v. Hospital, 50 Mo. 155.

15 Lafayette v. Asylum, 4 La. Ann. See Crowley v. Copley, 2 La. Ann. 329; Patterson v. Society, 27 N. J. L. 185.

ments.

The word "taxes" means burdens, charges or impositions put or set upon persons or property for public uses; but to pay for opening of a street, in the ratio of the benefit or advantage derived from it, is no burden. 16 A church is not exempt from

assessment because it is from taxes. Taxes are a public imposition levied by authority of the government for the purpose of carrying on the government in its machinery and operation. Municipal charges are often of local character and for the benefit of a particular neighborhood.17 The exemptions of the real estate of churches from taxation by the Gen. Stat. ch. 11, § 5, cl. 3, of Massachusetts, is only from taxes imposed for the general purposes of the government, and does not extend to taxation from local improvements.18 So in Kentucky, church property may be required to pay its proper proportion of the costs of the construction and reconstruction of streets in the city. The exemption made by the general statute in favor of church property, applies to taxes for general purposes of the government, State, county and municipal.19 In Indiana a different doctrine seems to be announced. A building and ground upon which the same is situated, used for religious purposes are not liable to assessment to contribute to the cost of local improvements, in the city. Such property not being valued and assessed upon the tax duplicate for State and county or city taxes, no method is provided by law for its assessment for the purpose of local improvements such as sewerage.

20

(c.) Educational Institutions.-The same general rule applies to educational institutions and their real estate is not exempt from local assessments, though it may be free from general taxation. So in Rhode Island it is held that exemption from taxation of the estate used for educational purposes, does not include assessments made for improvements of streets under the law of January 1854. Exemption from all taxes, contained in a charter of a university, does not include such assessments.21 The same 16 In the matter of the Mayor of New York, 11 Johns. 77.

17 North Liberties v. Church, 1 Harris (Pa.), 104. 18 Society v. Boston, 116 Mass. 181. See Ottawa v. Free Church, 20 Ill. 423.

19 Church v. McAtee, 8 Bush, 508.

20 Presby. Church v. Fort Wayne, 36 Ind. 338.

21 In Matter of College St., 8 R. I. 474.

rule applies to public school property. Real estate belonging to a board of public schools of a city is liable to be assessed under and by virtue of an ordinance, for the construction of local improvements which benefit the property.22 A piece of land owned by a school district upon which its school house stood, and which was used solely for school purposes, and of which no other use was contemplated in the future, can be assessed provided the benefit is direct and immediate, and not contingent and remote.23 An assessment for local improvements upon land of a college under the statutes of 1866, ch. 174, and 1868, ch. 276, of Massachusetts, of a part of the expense of altering a street, proportionately to the benefit received by the assessed land from the alteration, is a "civil imposition" within the meaning of that term in the clause of the college charter of 1650, exempting from all "civil impositions," taxes and rates, lands of the college not exceeding a certain annual value.24 And the property of a literary and scientific society is only exempt from taxes when used exclusively for literary and scientific purposes. If used for other purposes, it is liable to taxation, although the proceeds in future are to be applied for the promotion of literature and science.25

เ

(d.) Railroad Property.-Where a charter of a railroad provides for the payment by the company of State taxes and contains a proviso "that no other tax or imposition shall be levied or assessed upon said company," the word assessed" is used merely to describe the act of levying the tax or imposition, and the company is not by the proviso exempt from assessments for local improvements. So where a charter to a railroad corporation provided that its property should be exempt "from taxation of every kind," does not exempt the corporation from special taxation which does not, in reference to non-exemption, differ from special assessments for local improvements.27 The estate of a street railway company in the street of a city is prop

22 St. Louis Public Schools v. City of St. Louis, 26 Mo. 468. See also Lockwood v. St. Louis, 24 Mo. 20. 28 Hartford v. District, 45 Conn. 462.

97.

24 Harvard College v. Boston, 104 Mass. 470.

25 Cincinnati College v. State, 19 Ohio, 110.

26 New Jersey R. R. Co. v. Jersey City, 42 N. J. L.

27 Illinois Central R. Co. v. City of Decatur, 18 N. E. Rep. 315; 126 Ill. 92.

are of a character to render substantial benefits by the paving of such streets, and in proportion as the company is benefited, it must contribute its share to the cost of the improvement in common with the other prop

31

29

ments may be assessed upon franchises of a railroad company, where they are direct, immediate and certain. But contingent, remote, unappreciable or uncertain benefits will not authorize such assessments. А согроration, like a railroad, has no rights to be recognized in a proceeding for local improvements as peculiar, sacred or superior to those of a private individual.30 The rails, sleepers, ties and spikes of a horse railroad company so laid into and attached to the soil of the street, as to become a part of the railroad, are real estate and as such liable for the expense of local improvements. A lot owned upon a street by a railroad company is subject to assessment for local improvements, and the fact that the property belongs to the railroad company and is used for railroad purposes furnishes no more reason why it should be exempt from an assessment than if it belonged to a natural person. So the depot grounds of a railroad company being within the limits of a city are subject to taxation for improvements of the city's streets33 and other local improvements. And lands appropriated by a railroad company for its track through a city, and crossing an improved street at right angles, and upon which the track was constructed, the work having been completed, are liable to be assessed for local improvements. 35 A street railway company occupying a portion of a street with its track, and having a franchise to the right of occupancy, can be made to pay special assessments for local improvements when they

34

32

28 Appeal of Kearney St. 32 Cal. 499. See also Emory v. San Francisco Gas Co., 28 Cal. 345; People v. Lawrence, 36 Barb. 181.

29 Bridgeport v. N. Y. & N. H. R. Co., 36 Conn. 255. 30 Bradley v. N. Y. & N. H. R. Co., 21 Conn. 306. See also Armington v. Barnet, 15 Vt. 145; Piscataque Bridge Co. v. Bridge Co., 7 N. H. 67; Bacus v. Lebanon, 11 N. H. 23; Chicago v. Larned, 34 Ill. 203; King v. Patterson, 2 Oreg. 146.

31 New Haven v. Fair Haven, etc. R. Co., 38 Conn. 422.

32 Ludlow v. Trustees, 78 Ky. 357.

33 Railroad Co. v. Mount Pleasant, 12 Iowa, 112.

34 Railroad v. Spearman, 22 Iowa, 112.

35 Railroad Co. v. Connelly, 10 Ohio St. 159. See also Railroad Co. v. Wright, 5 R. I. 459.

way constructs its road in one of the streets of a city with the agreement that the company shall keep so much of the street as it occupies in repair, according to the requirements of the common council for the repairs of such street, but that the company was to be exempt from assessment for grading, paving, macadamizing, filling or planking the street, or parts of streets upon which it should construct its railways, it was held that this agreement did not exempt the company from assessments to defray the expenses of the widening the streets upon which its railways are constructed.87

(e.) County Buildings.-Whether county real estate can be assessed for local improvements came before the Supreme Court of Illinois in a late decision.38 The county court house is situated in the city of Bloomington on a square. A judgment was rendered against the court house square of the county of McLean in favor of the city of Bloomington upon a special assessment for the improvements of the adjacent streets by paving. The court held that an exemption, in the exclusion of the property liable to special assessment, must specifically appear. The general language of the statute authorizing cities to make improvements by special assessments, includes the property of counties, cities and the like, as well as private property, unless specifically exempted by the act. A State may authorize a burden to be imposed on one of its agencies to the extent it is benefited by another agency, for the benefit of the entire public. But the State may not authorize corporate authorities to levy special assessments upon property of the United States. Such a pro

ceeding would be an invasion of the rights of a distinct sovereignty and invalid. But no such reason exists as between the several agencies of the State, and they can be compelled to pay special assessments. The gen

36 City of Chicago v. Baer, 41 Ill. 306. See also Railway Co. v. City of Chicago, 90 Ill. 573.

87 Parmerlee v. Chicago, 60 Ill. 267.

38 McLean County v. City of Bloomington, 106 Ill. 209.