18

the new company, share for share, "as fully as if new shares of the consolidated company had been issued and exchanged therefor." Some question was made in the state courts whether the shares were actually issued in the new company. But the supreme court having found that they were, we accept that finding as conclusive. Power was expressly given to issue new shares, and the usual course of business would justify us in infer ring that that was the method adopted. A new name was taken, which was none the less a new one by reason of the fact that it was the name of one of the constituent companies.

solidation these companies agreed "to and with each other, to unite, merge, and consolidate their several capital stocks, corporate rights, franchises, immunities, and privileges, and properties of every kind, real, personal, and mixed." The first article provided that "such consolidation shall be effected by uniting or merging the stock, property, and franchises of the party of the first part (the Louisville Company) with and into the stock, property, and franchises of the said the Yazoo & Mississippi Valley Railroad | Company, without disturbing the corporate existence of the last-named company, or the formation of any new, distinct corporation, unless such result shall be necessary to give It cannot be doubted that under this legal effect to this agreement; but, whatever agreement it was contemplated that the conmay be the legal consequence of the consol- stituent companies should go out of exist. idation herein provided for, this agreement ence, and that their officers should resign is to stand and be effective." This article their trusts in favor of the officers of the was evidently drawn in view of the decisions new company; that their boards of directors of this court upon the subject of merger and should be supplanted by another board, the consolidation, and evinces a desire to avoid names of whose members were contained in the legal results following from a consolida- the agreement; that the stock of the contion of the two constituent companies into stituent companies should be surrendered a new corporation, but, at the same time, and new stock taken therefor, or, in lieu of expresses a doubt whether the agreement that, that the old stock should be recognized would not after all be construed to create a as the stock of the new company; that the new corporation. These doubts were unques-road should be operated by men holding their tionably well founded, and, if the effect of commissions from the new company, and the agreement be in law the creation of a new corporation, the expression of a wish that it should not be so construed is of course entitled to no weight. The final clause, that in any event the agreement shall stand and be effective, shows that effect should be given to all its stipulations, whatever be its legal consequences.

that the entire administration of the func-, tions of the constituent companies should be surrendered to the new corporation. Int short, nothing was left of the constituent companies but the memory of their existence,-the mere shadow of a name. But the new company which took its place suddenly sprang into life with a new corps of officers and a full equipment for the success

Subsequent articles provided that the corporate name should be the Yazoo & Missis-ful operation of the road. sippi Valley Railway Company; that the While, as stated in Tomlinson v. Branch, capital stock should be $15,000,000; that the 15 Wall. 460, 21 L. ed. 189, the presumption stockholders of either of the constituent is that when two railroads are consolidated companies should "have all the rights of a each of the united lines will be respectively stockholder of the consolidated company, as held with the privileges and burdens origfully as if new shares of the consolidated inally attaching thereto, subsequent cases company had been issued and exchanged have settled the law that where two comtherefor; and, in case the consolidated companies agree together to consolidate their pany shall determine to issue new shares, stock, issue new certificates, take a new such shares shall be exchangeable at par for name, elect a new board of directors, and the the now outstanding shares of each of the constituent companies are to cease their constituent companies;" that all the rights, functions, a new corporation is thereby powers, privileges, immunities, and fran- formed subject to existing laws. But if, as chises of the constituent companies should was the case in Tomlinson v. Branch, one pass to the consolidated company, which road loses its identity and is merged in an should be managed by a board of directors, other, the latter preserving its identity and whose names, for the purpose of the organ-issuing new stock in favor of the stockholdization, were given.

Reading this agreement in connection with the charters of the several companies, and especially with that of the Memphis & Vicksburg Railroad Company of March 3, 1882, providing that "all of the companies so consolidating shall be merged into and become one company, and the company so formed by such consolidation shall be deemed and held to be a corporation created by the laws of this state," it is impossible to escape the conclusion that a new corporation was created with a capital stock of $15,000,000, and that the stockholders of the constituent companies were to become stockholders of

ers of the former, it is not the creation of a new corporation, but an enlargement of the old one. In such case it was held that where the company which had preserved its identity held as to its own property a perpetual exemption from taxation, it would not be extended to the property of the merged company without express words to that effect.

In the earliest of these cases (Philadelphia & W. R. Co. v. Maryland, 10 How. 376, 13 L. ed. 461) it was held that a Maryland railroad whose charter contained no exemption from taxation did not acquire such exemp tion by consolidation with the Delaware & Maryland Railroad Company, whose charter

The case was distin

exempted the road from taxation, except up- | v. Maine, 96 U. S. 499, 24 L. ed. 836. In Aton that portion of the permanent and fixed lantic & G. R. Co. v. Georgia, 98 U. S. 359, works which might be in the state of Mary-25 L. ed. 185, two railroad companies were land. consolidated by an act of the legislature, In Central R. & Bkg. Co. v. Georgia, 92 U. which authorized the consolidation of their S. 665, 23 L. ed. 757, an act of the legisla-stocks, conferred upon the consolidated comture authorized the Central Railroad and pany full corporate powers, and continued to the Macon Railroad to unite and consolidate it the franchises, privileges, and immunities their stock and all their rights, privileges, which the companies had held by their origimmunities, and franchises under the name inal charters. We held in that case that a and charter of the Central Railroad, in such new corporation was created, which became manner that each owner of shares of stock subject to the provisions of a statutory code of the Macon Road should be entitled to re adopted January 1, 1863, permitting the ceive an equal number of shares of the stock charters of private corporations to be of the consolidated companies. "Whether," changed, modified, or destroyed at the will said Mr. Justice Strong, "such be the effect of the legislature. [consolidation or amalgamation] or not, guished from Central R. & Bkg. Co. v. Geormust depend upon the statute under which gia, 92 U. S. 665, 23 L. ed. 757, as being a the consolidation takes place, and of the consolidation, instead of a merger. "Nor intention therein manifested. If, in the was it," said Mr. Justice Strong, "a mere statute, there be no words of grant of corpo- alliance or confederation of the two. If it rate powers, it is difficult to see how a new had been, each would have preserved its sepcorporation is created." It was held that arate existence as well as its corporate the act did not work a dissolution of the ex- name. But the act authorized the consolidaisting corporations and the creation of a tion of the stocks of the two companies, thus new company, since there was no provision making them one capital in place of two. It for a surrender of the stock of the share-contemplated, therefore, that the separate holders of the Central, and none for the issue of other certificates to them. In that case the road whose charter contained the exemption from taxation was preserved intact by the consolidation, and it was held that its exemption continued, while the other road was to go out of existence. As already stated, in the act authorizing the consolidation, in this case, of the Memphis & Vicksburg Railroad Company, there is an express provision that all the companies so consolidated shall be merged into and become one company, and held to be a corporation created by the laws of the state.

capital of each company should go out of existence as the capital of that company." To the same effect is St. Louis, I. M. & S. R. Co. v. Berry, 113 U. S. 465, 28 L. ed. 1055, 5 Sup. Ct. Rep. 529.

The latest declaration of this court upon the subject is found in Keokuk & W. R. Co. v. Missouri, 152 U. S. 301, 38 L. ed. 450, 14 Sup. Ct. Rep. 592. In that case, a railroad corporation chartered in Missouri in 1857, with a provision that its property should be exempt from taxation for a period of twenty years after its completion, which took place in 1872, was consolidated with an Iowa corporation in 1870, under a general law of Missouri; and in 1886 the consolidated road was sold under a deed of foreclosure to purchasers, who conveyed it to an Iowa corporation. It was held that the act of the legis lature of Missouri authorizing the consolidation, making one company of the two, whose stock should be consolidated upon such terms as might be mutually agreed upon, authorizing the adoption of a new corporate name, and for the exchange of the stock of the constituent companies for stock in the new company, and providing for the filing with the secretary of state of a copy of the consolidation agreement, which should' be conclusive evidence of the consolidation and of the corporate name of the new company, was in effect the extinguishment of the prior companies and the formation of a new one; and that an intervening constitutional provision, adopted in 1865, prohibiting exemptions from taxation, was thereby let in and to be read as a part of the charter of the new company.

Other cases to the same effect, holding that the consolidation did not operate as a dissolution of the constituent companies, are Chesapeake & O. R. Co. v. Virginia, 94 U. S. 718, 24 L. ed. 310; Green County v. Conness, 109 U. S. 104, 27 L. ed. 872, 3 Sup. Ct. Rep. 69, and Tennessee v. Whitworth, 117 U. S. 139, 29 L. ed. 833, 6 Sup. Ct. Rep. 645. It may be observed that all these cases turn upon the question whether the new company inherited by consolidation certain privileges and immunities belonging to the constituent companies, or one of them, and that no question arose as to the applicability of a new constitutional inhibition intervening before the consolidation took place. This question, however, did arise in Shields v. Ohio, 95 U. S. 319, 24 L. ed. 357, where it was held that a consolidation, under a statute of Ohio, of two or more railroad companies worked their dissolution, and that the powers and franchises of the new company thereby formed were subject to "be altered, revoked, or repealed by the general assembly" under a constitutional provision which In view of the terms of the consolidating took effect prior to the consolidation. The agreement, to which reference has already statute in that case expressly provided that been made, and of the several acts of the the consolidated company should be a new general assembly of Mississippi authorizing corporation and subject to the constitutional these consolidations, we are of opinion that provision. A like ruling was made under a a new corporation was contemplated, and similar statute of Maine in Maine C. R. Co. 'that, taken together, these several documents

*23

that "the property of all private corporations for pecuniary gain shall be taxed in the same way and to the same extent as the property of individuals." Even if the legis

had expressly provided that the new corporation thereby formed should be exempted from taxation, the higher law of the Constitution would be interpreted as nullifying it to that extent.

A similar remark may be made with regard to the provision that these companies might consolidate upon such terms as they should agree upon. Obviously such terms must be consistent with the law existing at the time of the consolidation. It could never have been the intention of the legislature, and if it were it would be vain, to permit these companies to adopt such terms as they chose, if such terms were inconsistent with existing laws. The language indicated evidently refers to the method adopted for the consolidation, whether it was to be anything more than a simple merger, or whether it was to provide for a surrender of the stock of the constituent companies, the issue of new stock, the adoption of a new name, and the choice of a new board of directors. Under no circumstances would they be interpreted as conveying rights to the new corporation which the legislature was incompetent to confer.

should be read as if they had expressly provided, with legislative sanction, for the formation of a new association. Exemptions from taxation are not favored by law, and will not be sustained unless such clearly ap-lature, in these several acts of consolidation, pears to have been the intent of the legislature. Public policy in all the states has almost necessarily exempted from the scope of the taxing power large amounts of property used for religious, educational, and municipal purposes; but this list ought not to be extended except for very substantial reasons; and while, as we have held in many cases, legislatures may, in the interest of the public, contract for the exemption of other property, such contract should receive a strict interpretation, and every reasonable doubt be resolved in favor of the taxing power. Indeed, it is not too much to say that courts are astute to seize upon evidence tending to show either that such exemptions were not originally intended, or that they have become inoperative by changes in the original constitution of the companies. In cases arising under the Mississippi Constitution of 1869, the method adopted in the charter of the Mobile & Northwestern Company, of commuting the taxes, was originally sus tained under the theory that the provision of that Constitution declaring "the property of all corporations for pecuniary profits shall be subject to taxation, the same as that of individuals," did not mean that it should be necessarily subjected to taxation, but that it might be exempted altogether by the legislature. Mississippi Mills v. Cook, 56 Miss. 40. But by the Constitution of 1890, "all existing charters or grants of corporate franchise under which organizations have not in good faith taken place at the adoption of this Constitution shall be subject to the provisions of this article," one of which was (§ 181) that "the property of all private corporations for pecuniary gain shall be taxed in the same way and to the same extent as the property of individuals."

Great stress is laid by the railroad companies upon the fact that at the time these companies were incorporated the state was without credit, the treasury without money, the issue of state bonds in aid of public improvements forbidden by the Constitution, the levy of general taxes to assist in the building of the roads fruitless, the resources of the state having been exhausted by the civil war, which had left the community so poor that it was with difficulty the inhab itants could raise the taxes necessary for carrying on the government; that millions of acres of land were being abandoned and It is true that in the act of March 9, 1882, forfeited to the state for nonpayment of authorizing the Baton Rouge Company to taxes and subsequently sold at incredibly consolidate, in the act of March 3, 1892, au- low figures: that the paramount necessity thorizing the Memphis & Vicksburg Com- was clearly the building of railroads to depany to consolidate, and in the act of Feb-velop the resources of the state, and yet that ruary 17, 1882, authorizing consolidations the topography of the country was such that by the Yazoo Company, there were provisions that the consolidated companies should be entitled to the rights, privileges, franchises, property grants and immunities belonging to constituent companies, among which, under the name of immunities, might pass an exemption from taxation, as has been sometimes held by this court; and had not the constitutional provision of 1890 taken effect before the final consolidation of 1892, we might have been obliged to hold that the consolidated company was entitled to the commutation of taxes provided for in the 21st section of the charter of the Mobile & Northwestern Company. But it is scarce ly necessary to say that, if the consolidation of 1892 resulted in a new corporation, it would come into existence under the Constitution of 1890, with the disabilities attaching thereto, among which is the provision

both the construction and the maintenance of the roads was difficult and expensive, and railroad enterprises promised very doubtful profits; that the lands along the river bottoms were waste and swamp, uncultivated and unexplored, and subject to annual inundations from the Mississippi; that the levees had been swept away again and again, and Congress asked for aid to rebuild them upon the ground of the impossibility of the state to do the work; that in this condition of affairs the best that could be done was to offer as a remuneration to vote taxes as a consideration for building the road; that these proposals were accepted and carried out in good faith; that the result has been to increase the value of property in portions of the state fully one hundred fold, and to immensely increase the revenues of the state and counties, and that under these circum

stances the present repudiation of these contracts by the state, by pleading a technical incapacity to contract, is a gross breach of public faith, and should be discountenanced by the courts.

Potent as these considerations are, they address themselves to the legislative, rather

sioners in condemnation proceedings, and the sustaining of a demurrer to an answer which is filed, and a refusal to permit testimony in support of the answer, since there is no final decision in the case.

[No. 64.]

ary 7, 1901.

'N ERROR to the United States Circuit

to review a ruling in a proceeding for condemnation of property. Affirmed.

See same case below, 35 C. C. A. 366, 93 Fed. Rep. 393.

Statement by Mr. Justice Brewer:

than to the judicial, department of the gov- Argued November 2, 1900. Decided Januernment. The legislature is the proper guardian of the public faith, and in its action with respect to its own obligations we are bound to assume that it will be guided, not only by its present necessity for revenue, but by consideration of its possible future needs. But whatever policy the state may choose to adopt with respect to encouraging or discouraging the investment of capital from abroad, the duty of the courts is to declare the law as they find it, and avoid the discussion of questions of policy, which are clearly beyond their province. Certainly this court is not the keeper of the state's conscience. We have not thought it proper to inquire what was the answer to these charges. Doubtless they are sufficient, or at least are such as the legislature deemed to be sufficient, or it would not have passed the taxing acts of 1892 and 1894. While we have never hesitated to vindicate the right of individuals or corporations to enforce the perform ance of lawful contracts as against subsequent legislation designed to impair them, we have always exacted as a condition that the contract was one which the legislature, or opposite party, had power to make under the Constitution, and that the other party was chargeable with knowledge of all its provisions in that connection. To enforce a performance, the plaintiff must also bring himself within the letter and spirit of the contract, and thus provide against any change in public sentiment which may render its performance obnoxious or unpopular. Being of opinion that the consolidation in question, which took place nearly two years subsequent to the adoption of this Constitution, was a new grant of corporate franchises within the meaning of § 180, it follows that it became subject to the provisions of § 191.

The question how far the case of Natchez, J. & C. R. Co. v. Lambert, 70 Miss. 779, 13 So. 33, is applicable as res judicata upon the taxes involved in this case is a local question, upon which we are not called upon to express an opinion. We do not understand it to be pressed as ground for reversal.

The judgment of the Supreme Court is therefore affirmed.

(179 U. S. 641)

This was a proceeding commenced by the Postal Telegraph-Cable Company (hereinaft er called the telegraph company) against the Southern Railway Company (hereinafter called the railway company) to acquire by condemnation the right to construct its telegraph line along and over the railway company's right of way through the state of North Carolina. The petition therefor was filed by the telegraph company in the office of the clerk of the superior court of Guilford county, North Carolina, on June 11, 1898. A summons was issued requiring the railway company to appear before the clerk of the superior court on June 22, 1898, and answer. On that day the railway company entered a special appearance and filed a petition and bond for the removal of the case to the United States circuit court for the western district of North Carolina. Sundry proceedings were had in that court, such as a motion to remand, which it is unnecessary to notice. On August 31, 1898, the telegraph company by leave filed an amended petition. On September 15, 1898, the court made an order by which it directed its clerk to appoint three commissioners to assess damages and prescribed their powers and duties. On September 19, 1898, the clerk appointed the commissioners as directed, and fixed the time and place for their meeting, and on the same day issued a notice to the railway company of his action. These orders were made on the application of the telegraph company and without notice to the railway company. Thereupon the railway company moved the court to set aside its order of September 15 and for leave to answer. On September 23 the court temporarily suspended the order of September 15. On October 24 an answer was filed, a demurrer of the telegraph company was sustained, and when the railway company asked leave to introduce testimony sustaining the averments of its answer the

SOUTHERN RAILWAY COMPANY, Piff. court overruled the application and refused

in Err.,

v.

POSTAL TELEGRAPH-CABLE CO.

to permit the railway company to introduce testimony, and so far as was needed reinstated its order of September 15, 1898. Before any further proceedings and without wait ing for the assessment of damages by the commissioners and the confirmation of their A writ of error cannot be sustained when it is award by the court, a writ of error and sutaken without waiting for any further pro- persedeas was obtained by the railway comceedings after the appointment of commis-pany, and the case was transferred under

Error-finality of decision.

⚫644

#643

such writ of error to the circuit court of appeals for the fourth circuit. That court, on March 31, 1899, dismissed the writ of error for want of jurisdiction, on the ground that no final order had been entered in the circuit court. 35 C. C. A. 366, 93 Fed. Rep. 393. To review this ruling this writ of error was sued out.

Messrs. A. L. Holladay and Robert Stiles for plaintiff in error.

Mr. J. R. McIntosh for defendant in er

ror.

*Mr. Justice Brewer delivered the opinion of the court:

The single question we deem it necessary to consider is whether a final judgment or or der had been entered by the circuit court which could be taken by writ of error to the circuit court of appeals.

lina. On the contrary, that court has repeatedly held that an order appointing commissioners in condemnation proceedings is not a final judgment, nor subject to review until after the confirmation of the award of the commissioners. American U. Teleg. Co. v. Wilmington, C. & A. R. Co. 83 N. C. 420, is a case directly in point. In that case a proceeding was commenced by a telegraph company to obtain a right of way for the construction and operation of its telegraph lines along the roadway of a railroad company, and, as shown by the opinion of the supreme court, at a hearing before the trial judge he adjudged the telegraph company entitled to the right of way, and appointed commissioners to ascertain and report the damages. An attempt was made to take this order to the supreme court for review, but the right to do so was denied, the court saying (p. 421):

"Upon a careful examination of the statute, and the portions of the act of February 8th, 1872, by reference incorporated with it, and regarding the policy indicated in both to favor the construction and early completion of such works of internal improvement, telegraphic being upon the same footing as railroad corporations, we are of opinion it was not intended in these enactments to arrest the proceeding authorized by them at any intermediate stage, and the appeal lies only from a final judgment. Then and not before may any error committed during the progress of the cause, and made the subject of exception at the time, be reviewed and corrected in the appellate court, and an appeal from an interlocutory order is premature unauthorized."

In Davie County Comrs. v. Cook, 86 N. C. 18, the same ruling was made and the prior case in terms affirmed. Again, in Norfolk & S. R. Co. v. Warren, 92 N. C. 620, the two prior cases were cited and approved. Still again, in Hendrick v. Carolina C. R. Co. 98 N. C. 431, 4 S. E. 184, the same ruling was made, although it appeared that the facts were all agreed upon, the court saying (p. 432, S. E. p. 185):

Luxton v. North River Bridge Co. 147 U. S. 337, 341, 37 L. ed. 194, 196, 13 Sup. Ct. Rep. 356, is decisive of this question. Indeed, little more seems necessary than a reference to the opinion in that case. There, as here, in condemnation proceedings, an order was made appointing commissioners to assess damages. To reverse this order a writ of error was sued out, and by that writ of error an attempt was made to challenge the constitutionality of the act authorizing the condemnation, but this court dismissed the writ on the ground that the order was not a final judgment, saying, after referring to possible proceedings in the state court, that the action of the United States circuit court could be reviewed here "only by writ of error, which does not lie until after final judg-and ment disposing of the whole case and adjudicating all the rights, whether of title or of damages, involved in the litigation. The case is not to be sent up in fragments by successive writs of error. Act of September 24, 1789, chap. 20, § 22; 1 Stat. at L. 84, chap. 20; Rev. Stat. § 691; Rutherford v. Fisher, 4 Dall. 22, 1 L. ed. 724; Holcomb v. McKusick, 20 How. 552, 554, 15 L. ed. 1020, 1021; Louisiana Nat. Bank v. Whitney, 121 U. S. 284, 30 L. ed. 961, 7 Sup. Ct. Rep. 897; Keystone Manganese & Iron Co. v. Martin, 132 U. S. 91, 33 L. ed. 275, 10 Sup. Ct. Rep. 32: McGourkey v. Toledo & O. C. R. Co. 146 U. S. 536, 36 L. ed. 1079, 13 Sup. Ct. Rep. 170." Reference is made by counsel to Wheeling & B. Bridge Co. v. Wheeling Bridge Co. 138 U. S. 287, 34 L. ed. 967, 11 Sup. Ct. Rep. 301, in which this court sustained its jurisdiction of a writ of error to the supreme court of appeals of West Virginia, and inquired into the validity of a judgment of that court affirming an order of a trial court appointing commissioners under a somewhat similar statute. But that decision was based on the fact that the order of the trial court had been held by the state supreme court to be a final judgment, on which a writ of error would lie, and therefore, being a final judgment in the view of the highest court of the state, it ought to be considered final here for the purposes of review. But no such ruling obtains in the supreme court of North Caro

"That the defendant broadly denies the plaintiff's alleged rights and grievances, and the parties agreed upon the facts, could not give the right of appeal at the present stage of the proceeding, because the order appealed' from was nevertheless interlocutory, and an appeal from the final judgment would bring up all questions arising in the course of the proceeding, without denying or impairing any substantial rights of the defendant.

"The order appealed from is very different from that in the similar case of Click v. Western N. C. R. Co. 98 N. C. 390, 4 S. E. 183; in the latter the court denied the motion for an order appointing commissioners, and dismissed the proceeding, thus putting an end to the right of the plaintiff therein, and therefore an appeal lay in that case."

The changes in the statute referred to by counsel for plaintiff in error, made subse quently to these decisions, may affect the mode of procedure and the basis for estimat ing damages, but in no manner affect the