ERROR to the Supreme Court of the State of Georgia. The case was argued by Mr. Jeremiah S. Black, Mr. David Dudley Field, and Mr. A. R. Lawton, for the plaintiff in error, and by Mr. N. J. Hammond, Attorney-General of the State of Georgia, and Mr. Robert Toombs, for the defendant in error.
The opinion of the court was delivered by: Mr. Justice Strong delivered the opinion of the court.
By an act of the legislature of Georgia, enacted in 1833, a charter, unlimited in duration, was granted to 'The Central Railroad and Canal Company of Georgia,' with power to make, construct, and maintain a canal or railroad from the city of Savannah to the city of Macon. The seventh section was as follows: –
'The said canal or railway, and the appurtenances of the same, shall not be subjected to be taxed higher than a half per cent upon its annual net income.'
In 1835, by an amendment to the charter, the name of the company was changed to 'The Central Railroad and Banking Company of Georgia;' its capital stock was declared to consist of $3,000,000: and the eighteenth section of the amendment enacted that 'the said railroad, and the appurtenances of the same, shall not be subjected to be taxed higher than one-half of one per centum upon its annual net income; and no municipal or other corporation shall have the power to tax said company, but may tax any property, real or personal, of the said company, within the jurisdiction of said corporation, in the ratio of taxation of like property.' Under this latter act the company was organized in 1836, and proceeded to build the railroad. By subsequent enactments, the capital stock was increased to $5,000,000, and the company was authorized to build its road into Macon.
In 1847, the legislature of the State, by a statute approved Dec. 27, 1847, incorporated 'The Macon and Western Railroad Company,' with power to build a railroad from Macon to Atlanta.
The charter contained no exemption from taxation, and affixed no limits to it. An amendment, however, was made to the charter by an act approved Feb. 9, 1869, and assented to by the company, by which authority was given to increase the capital stock to $2,500,000; and the chartered rights of the company were continued during the term of thirty years from its passage. The amending act contained the following proviso:––
'Provided, nevertheless, that such additional stock as may be issued, as well as the present stock of said company, shall hereafter pay the same annual tax to the State as the other railroad companies of this State now do; viz., one-half of one per cent on the amount of the net income.'
Under this charter the railroad was constructed to Atlanta. Thus the western terminus of the Central Railroad and Banking Company of Georgia, and the eastern terminus of the Macon and Western Railroad, were both fixed at Macon.
On the twenty-fourth day of August, 1872, the legislature passed an act authorizing the union and consolidation of the two railroad companies, under the name andc harter of the first named, 'The Central Railroad and Banking Company of Georgia.' As the true meaning and effect of this act is the basis of all the questions presented by the case, we quote the first section entire:––
'Be it enacted by the general assembly of the State of Georgia, that the Macon and Western Railroad Company, and the Central Railroad and Banking Company of Georgia, be, and they are hereby, authorized and empowered to unite and consolidate the stocks of the said two companies, and all the rights, privileges, immunities, property, and franchises belonging or attaching to said companies, under the name and charter of the said 'The Central Railroad and Banking Company of Georgia,' in such manner that each and every owner and holder of shares of the capital stock of the Macon and Western Railroad Company shall be entitled to and receive an equal number of shares of the capital stock of the consolidated companies: Provided, that nothing herein contained shall relieve or discharge either of said companies from any contract heretofore entered into, but that all such contracts shall be assumed by, and be binding on, the Central Railroad and Banking Company of Georgia, and all benefits and rights under the same shall accrue to, and vest in, the said last-mentioned company: And provided further, that, upon such union and consolidation, the capital stock of the Central Railroad and Banking Company of Georgia shall not exceed the amount of the authorized capital thereof, and the present authorized capital of the Macon and Western Railroad Company added thereto.'
The second section enacted, that the union and consolidation provided for should not take place until at least two-thirds of the stockholders of each company assented thereto.
By the third section it was enacted, that when it should be ascertained, in the manner provided, that the assent required in the second section had been given, it should be the duty of the board of directors of each company to complete said union and consolidation, and to certify the same under the corporate seals of said companies, to the governor of the State, to be filed in the office of the Secretary of State.
The fourth section is as follows:––
'Be it further enacted, that upon the union and consolidation herein provided for, each stockholder in the Macon and Western Railroad Company shall be entitled to receive a certificate of stock as a shareholder in the Central Railroad and Banking Company of Georgia for a like number of shares, upon the surrender of his certificate of stock in the former company, which new certificate shall entitle the holder thereof to the same rights, privileges, ...