tracks, so long as it shall continue to use in chapter 254 of the Laws of New York of such tracks, so constructed, under the pro- 1967, which, as amended by chapter 503 of visions of this act. In case of the neglect the Laws of 1879, is as follows: of such corporations to make such pave- "Any railroad corporation created by the ment or repairs the local authorities may laws of this state, or its successors, being make the same at the expense of such

expense of such the lessee of the road of any other railroad corporation after the expiration of thirty corporation, may take a surrender or transda ys' notice to do so."

fer of the capital stock of the stockholders, Section 18 of the act provides that "all or any of them, in the corporation whose acts and parts of acts, whether general or road is held under lease, and issue in exspecial, inconsistent with this act, are change therefor the like additional amount hereby repealed, but nothing in this act of its own capital stock at par, or on such shall interfere with or repeal or other terms and conditions

as may be invalidate any rights heretofore acquired agreed upon between the two corporations; under the laws of this state by any horse and whenever the greater part of the capital railroad company, or affect or repeal any stock of any such corporation shall have right of any existing street surface railroad been so surrendered or transferred,

, the company to construct, extend, operate, and directors of the corporation taking such maintain its road in accordance with the surrender or transfer shall thereafter, on terms and provisions of its charter and the a resolution electing so to do, to be entered acts amendatory thereof."

on their minutes, because ex officio the The Rochester Railroad Company was in directors of the corporation whose road is corporated for the purpose of acquiring the so held under lease, and shall manage and property of the Rochester City & Brighton conduct the affairs thereof, as provided by Railroad Company, hereinafter called the law; and whenever the whole of the said Brighton Railroad. The Brighton Railroad capital stock shall have been so surrendered was incorporated March 5, 1868, under a or transferred, and a certificate thereof general law of the state of New York. filed in the office of the secretary of state, Laws of 1850, chap. 140. That law con under the common seal of the corporation tained no provision respecting the repairs i to whoni such surrender or transfer shall of streets, and, differences having arisen be have been made, the estate, property, rights, tween the Brighton Railroad and the city, privileges, and franchises of the said corpoas to the extent of the burden of such re- ration whose stock shall have been so surpairs properly to be borne by the railroad, rendered or transferred shall thereupon they joined in an application to the legis- vest in and be held and enjoyed by the lature for the enactment of a law which said corporation to whom such surrender or should regulate that and other subjects. transfer shall have been made, as fully Such a law was enacted February 27, 1869, and entirely, and without change or diminuand its 5th section was as follows:

tion, as the same were before held and en“Said company shall put, keep, and main- joyed, and be managed and controlled by tain the surface of the streets inside the the board of directors of the said corporails of its tracks in good and thorough re- ration to whom such surrender or transfer pair, under the direction of the committee of the said stock shall have been made, and on streets and bridges of the common in the corporate name of such corporation. council of said city of Rochester; but, when the rights of any stockholder not so surever any of said streets are, by ordinance rendering or transferring his stock shall not or otherwise, permanently improved, said be in any way affected hereby, nor shall company shall not be required to make any existing liabilities or the rights of creditors part or portion of such improvement, or of the corporation, where stock shall have bear any part of the expense thereof, but been so surrendered or transferred, be in it shall make its rails in such street or any way affected or impaired by this act.” streets conform to the grade thereof." Subsequently the Rochester Railroad duly [Laws of 1869, chap. 34.]

obtained permission to convert the road On the 25th day of February, 1890, the into an electric trolley road, expended large Brighton Railroad duly executed and de- sums of money in doing so, and, in the livered a lease of its property, franchises, acquisition of the stock of the Brighton rights, and privileges, for the unexpired Railroad and the conversion of its road interm of its charter, to the Rochester Rail to an electric road, relied upon the proviroad, which accepted the lease and took pos- sions of the act of 1869 as a contract exsession of the property. Subsequently, in empting it, with respect to the streets cov. the same year, the Rochester Railroad ac-ered by the tracks of the Brighton quired the entire capital stock of the Railroad, from other street repairs than Brighton Railroad. The acquisition of stock those therein described. The city acquiesced was in pursuance of the authority contained ' in this view until October, 1898, when, upon the suit of an owner of adjoining property, pair includes the duty of laying new pave. the court of appeals held that, under § 9 ments. Conway v. Rochester, 157 N. Y. 33, of the act of 1884, and § 98 of chapter 39 51 N. E. 395. of the General Laws, which were regarded The Rochester Railroad, not denying its as substantially the same, the Rochester liability in ordinary cases to bear the exRailroad was bound to bear the expense of pense of paving, asserts that, with respect a new pavement on the location acquired to the two streets in question, it was ex. from the Brighton Railroad. Conway v. empted from that burden by contract with Rochester, 157 N. Y. 33, 51 N. E. 395. Sub- the state of New York, made with its predesequently, the city repaved two streets cessor in title, the Brighton Railroad, and which were within the location acquired transferred to it with the title to the and operated by the Brighton Railroad, property of that railroad. The contract reprior to the passage of the act of 1884, and, lied upon is found in a law enacted in 1869, in obedience to the decision in the Conway for the benefit of the Brighton Railroad, Case, assessed against the Rochester Rail / which relieved that road from the burden road its share of the expense of pavement, of pavement of any part of the streets in and brought this action to recover the which its tracks were situated. The Rochamount of the assessment. It was set up ester Railroad claims that the law of New

. in defense of the action that, by the act of York, so far as that law imposes upon it 1869, the state of New York had entered the cost of the pavement of the streets in into an inviolable contract with the Brigh question, was in violation of that provision ton Railroad, exempting it from the ex. of the Constitution of the United States pense of pavement, that the contract had which forbids a state to pass any law impassed with the property of the Brighton pairing the obligation of contracts. Railroad to the Rochester Railroad, and that The Brighton Railroad was incorporated the assessment was in violation of the in 1862, under the general law of 1850, Constitution of the United States. The con- which contained no provision with respect tentions of the Rochester Railroad were to the railroad's share of street repairs. denied by the court of appeals of New York Until the enactment of the law of 1884, (182 N. Y. 116, 70 L.R.A. 773, 74 N. E. 953), under which the Rochester Railroad was which held, first, that the statute men subsequently incorporated, there was no tioned did not constitute a contract between general law regulating the apportionment the state and the railroad company, and, between street railroads and municipalities second, that if it did, the exemption grant of the expense of such repairs, and the ques. ed by the statute was personal to the tion was determined in individual cases Brighton Railroad, and did not pass to the either by agreement or a special law. Dif. Rochester Railroad. The case was remand- ferences having arisen between the Brighton ed to the supreme court and a judgment Railroad and the city of Rochester as to entered pursuant to the remittitur from the share of the expense of street repair the court of appeals, and by writ of error which ought to be borne by the railroad, that judgment is brought here for review. they joined in a request for legislation which

would settle this and other disagreements. Messers. Charles J. Bissell, William C. In response to that request the law of 1869 Trull, and Joseph S. Clark for plaintiff in was enacted. The 5th section of the law, error.

after providing that the railroad should put Messrs. William W. Webb and Benjamin and keep the surface and street inside of B. Cunningham for defendant in error. the rails of its tracks in repair, enacts that:

"Whenever any of said streets are, by ordiMr. Justice Moody, after making the nance or otherwise, permanently improved, foregoing statement, delivered the opinion said company shall not be required to make of the court:

any part or portion of such improvement, By the judgment of the highest court of or bear any part of the expense thereof." the state of New York, the city of Roch- This law, obviously, as held by the court ester was allowed to recover from the of appeals, exempted the railroad from the Rochester Railroad, a street surface rail expense of new pavements, which is the exroad corporation, the cost of laying new pense sought to be recovered in this action. pavements on the parts of two streets which This was the effect conceded to the statute lay between the tracks, the rails of the by the city for the whole time during which tracks, and 2 feet outside of the tracks of the railroad property was owned and operthe railroad. This recovery was had under ated by the Brighton Railroad, and even a statute of New York which required such after it parted with the property, and until railroads to keep that part of the street the decision in Conway v. Rochester, supra, over which their tracks ran in permanent in 1898. Whether this statute was a conrepair. The requirement of permanent re- 'tract between the state of New York and the Brighton Railroad, inviolable by the molested as long as he chooses, but there Federal Constitution, and if so, whether its his rights end, and he cannot, by any form benefits have been waived or it has been of conveyance, transmit the contract or its lawfully modified or repealed by virtue of benefits to a successor. Morgan v. Louisithe powers reserved by the Constitution or ana, 93 U. S. 217, 23 L. ed. 860; Wilson v. laws of New York, are questions which have Gaines, 103 U. S. 417, 26 L. ed. 401; Louisbeen much argued at the bar. We do not ville & N. R. Co. v. Palmes, 109 U. S. 214, deem it necessary in this case to decide 27 L. ed. 922, 3 Sup. Ct. Rep. 193; Picard those questions, and therefore put out of v. East Tennessee, V. & G. R. Co. 130 U. S. view many facts found in the record which 637, 32 L. ed. 1051, 9 Sup. Ct. Rep. 640; St. were deemed by both parties to be relevant Louis & S. F. R. Co. v. Gill, 156 U. S. 619, to them. We assume, for the purpose of 39 L. ed. 567, 15 Sup. Ct. Rep. 484; Norfolk our decision, that there was a contract ex. & W. R. Co. v. Pendleton, 156 U. S. 667, 39 empting the Brighton Railroad from the ex- L. ed. 574, 15 Sup. Ct. Rep. 413. But the pense of street pavements, and that the constate, by virtue of the same power which tract could not constitutionally be impaired created the original contract of exemption, by the state of New York, and that its may, either by the same law or by subsebenefits have not been waived.

quent laws, authorize or direct the transIt becomes, therefore, necessary to in fer of the exemption to a successor in title. quire whether the contract has been trans. In that case the exemption is taken, not by ferred with the property of the Brighton reason of the inherent right of the original Railroad to the Rochester Railroad, the holder to assign it, but by the action of the plaintiff in error.

state in authorizing or directing its transThe Rochester Railroad was incorporated fer. As in determining whether a contract for the purpose of acquiring the property of of exemption from a governmental power the Brighton Railroad, which was accom- was granted, so in determining whether its plished by a lease of the property, fran- transfer to another was authorized or chises, rights, and privileges of the Brighton directed, every doubt is resolved in favor of Railroad, followed by the purchase of its the continuance of the governmental power, capital stock. This was done under the and clear and unmistakable evidence of the authority of a statute which provided that intent to part with it is required. a railroad corporation, being the lessee of Keeping these

fundamental principles the property of another railroad corpo- steadily in mind, we proceed to inquire ration, might acquire the whole of the whether the state of New York has authorcapital stock of the latter, and in such a ized directed the transfer from the case its "estate, property, rights, privileges, Brighton Railroad to the Rochester Railand franchises should vest in and be held road of the contract of exemption. A and enjoyed by" the purchasing corpo. legislative authorization of the transfer of ration. It is contended that the effect of “the property and franchises” (Morgan v. the transfer under this law is to vest in Louisiana, and Picard v. East Tennessee, V. the Rochester Railroad the exemption from & G. R. Co. ubi supra); of “the property" the expense of street pavement which the (Wilson v. Gaines and Louisville & N. R. Brighton Railroad enjoyed through the Co. v. Palmes, ubi supra); of "the charter contract with the state of New York. This and works” (Alemphis & L. R. R. Co. v. contention presents the question to be de- Railroad Comrs. (Memphis & L. R. R. Co. cided.

v. Berry), 112 U. S. 609, 28 L. ed. 837, 5 This court has frequently had occasion to Sup. Ct. Rep. 299); or of "the rights of decide whether an immunity from the exer- franchise and property” (Norfolk & W. R. cise of governmental power which has been Co. v. Pendleton, ubi supra),—is not sufgranted by contract to one has, by legis. ficient to include an exemption from the lative authority, been vested in or trans taxing or other power of the state, and it ferred to another, and in the decisions cannot be contended that the word "estate" certain general principles, which control in has any larger meaning. It is, however, the determination of the case at bar, have argues that the word "privileges” is suibeen established. Although the obligations ficiently broad to embrace within its meanof such a contract are protected by the ing such an exemption, and that, when it is Federal Constitution from impairment by added to the other words, the legislative ¡ the state, the contract itself is not property, intent to transfer the. exemption is clearly which, as such, can be transferred by the manifested, and that the words of the law owner to another, because, being personal | under consideration, “the estate, property, to him with whom it was made, it is in rights, privileges, and franchises,” indicate capable of assignment. The person with the purpose to vest in the purchasing whom the contract is made by the state corporation every asset of the selling corpomay continue to enjoy its benefits un. 'ration which is of conceivable value. Thero

or

is authority sustaining this position, which lowed the Muscogee Railroad to unite with cannot be set aside without examination. the Southwestern Railroad into one com

In the case of Humphrey v. Pegues, 16 pany, under the charter of the latter, and Wall. 244, 21 L. ed. 326, it appeared that the it was provided that “all the rights, privcharter of the Northeastern Railroad Com. ileges, and property [of the Muscogee Railpany, granted by the state of South Caro- road Company] shall be part and parcel of lina, originally contained no exemption from the Southwestern Railroad,” it was held taxation, but that, by amendment to the that the immunity from taxation enjoyed charter, some years later, the real estate by the Muscogee Railroad passed with its and stock of the company were exempted property to the Southwestern Railroad. from all taxation during the continuance of In Tennessee v. Whitworth, 117 U. S. 139, its charter. Subsequently the legislature 29 L. ed. 833, 6 Sup. Ct. Rep. 649, it was granted the charter of the Cheraw & Dar- held that a statute conferring upon a rail. lington Railroad Company, and provided | road corporation "all the rights, rowers, that "all the powers, rights, and privileges and privileges” of another railroad corpogranted by the charter of the Northeastern ration, and “all the powers and privileges” Railroad Company are hereby granted to of a third railroad corporation, included the the Cheraw & Darlington Railroad Com- | immunities from taxation enjoyed repany.” The state of South Carolina at- spectively by the latter corporations, the tempted to tax the stock and property of ground of the decision being that an exempthe Cheraw & Darlington Railroad Com- tion from taxation is, in the common acpany, and the validity of that taxation was ceptation of the term, a privilege. the question in the case. The court held If the authority of these four cases, supthat the powers, rights, and privileges ported by some dicta which need not be granted to the Cheraw & Darlington Rail. cited, remained unimpaired, it would justify road Company were those contained in the the opinion that a legislative transfer of amendment of the charter, as well as those the "privileges” of a corporation includes an contained in the original charter, and said, exemption from the taxing or other governby Mr. Justice Hunt: "All the 'privileges,' mental power granted by a contract with as well as powers and rights, of the prior the state. But other and later cases have company, were granted to the latter. A essentially modified the rule which may be more important or more comprehensive deduced from them. privilege than a perpetual immunity from In the case of the Chesapeake & O. R. taxation can scarcely be imagined. It con- Co. v. Miller, 114 U. S. 176, 29 L. ed. 121, tains the essential idea of a peculiar benefit 5 Sup. Ct. Rep. 813, it was held that the or advantage, of a special exemption from foreclosure of a mortgage on railroad propa burden falling upon others." Upon this erty under the provisions of a statute reasoning it was held that the stock and which authorized the purchaser under a real estate of the Cheraw & Darlington foreclosure sale to become a corporation, Railroad Company

exempt from and provided that it should "succeed to all taxation. See Gunter v. Atlantic Coast such franchises, rights, and privileges” as Line R. Co. 200 U. S. 273, 50 L. ed. 477, 26 were possessed by the mortgagor company, Sup. Ct. Rep. 252.

did not vest in the purchasing corporation În Chesapeake & 0. R. Co. v. Virginia, 94 an immunity from taxation.

. U. S. 718, 24 L. ed. 310, it was said that an

In Picard v. East Tennessee, V. & G. R. act conferring upon a railroad corporation Co. 130 U. S. 637, 32 L. ed. 1051, 9 Sup. Ct. “the benefits of the charter" of another Rep. 640, Mr. Justice Field, in delivering corporation which had an immunity from the opinion of the court, said: “The later, taxation, and “the rights, privileges, fran- and, we think, the better, opinion, is that chises, and property” of another corpora unless other provisions remove all doubt of tion, which, when formed, would have the

the intention of the legislature to include "rights, privileges, and franchises and

the immunity in the term 'privileges,' it property” of the corporation holding the immunity, was sufficient to transfer the will not be so construed. It can have its immunity from taxation. But this ex

full force by confining it to other grants to pression of opinion was unnecessary to the

the corporation." decision of the case, which merely decided

In Wilmington & W. R. Co. v. Alsbrook, that where a railroad corporation acquired 146 U. S. 279, 36 L. ed. 972, 13 Sup. Ct. Rep. the property of another railroad corpora- | 72, Mr. Chief Justice Fuller, in delivering tion, to which was attached an immunity the opinion of the court, said, on page 297, from taxation, that immunity did not ex L. ed. page 979, Sup. Ct. Rep. page 77:

. tend beyond the property thus acquired. In "We do not deny that exemption from Southwestern R. Co. v. Georgia, 92 U. S. taxation may be construed as included in 876, note, 23 L. ed. 762, where a statute al- 'the word 'privileges,' if there are other pro

were

visions removing all doubt of the intention sa former corporation does not include an of the legislature in that respect.”

immunity from taxation." In Keokuk & W. R. Co. v. Missouri, 152 We think it is now the rule, notwithU. S. 301, 38 L. ed. 450, 14 Sup. Ct. Rep. standing earlier decisions and dicta to the 592, Mr. Justice Brown, in delivering the contrary, that a statute authorizing or opinion of the court, said: “Whether, directing the grant or transfer of the under the name 'franchises and privileges,' "privileges” of a corporation which enjoys an immunity from taxation would pass to immunity from taxation or regulation the new company, may admit of some doubt, should not be interpreted as including that in view of the decisions of this court, which, immunity. We, therefore, conclude that the upon this point, are not easy to be recon- words “the estate, property, rights, privi. ciled.”

leges, and franchises" did not embrace These conflicting views were before the within their meaning the immunity from court in Phænix F. & M. Ins. Co. v. Tennes- the burden of paving enjoyed by the see, 161 U. S. 174, 40 L. ed. 660, 16 Sup. Ct. Brighton Railroad Company. Nor is there Rep. 471. The plaintiff in error in that anything in this, or any other statute, case claimed to have an immunity from which tends to show that the legislature taxation by virtue of a provision in its used the words with any larger meaning charter granting it "all the rights and privi- than they would have standing alone. The leges” of the De Soto Insurance Company, meaning is not enlarged, as faintly sug. which had an immunity from taxation by gested, by the expression in the statute that virtue of a provision in its charter granting they are to be held by the successor "fully it "all the rights, privileges, and immuni- and entirely, and without change and ties” of the Bluff City Insurance Company, diminution,”-words of unnecessary empha

whose charter contained an expressed im- sis, without which all included in "estate, munity from taxation. Mr. Justice Peck- property, rights, privileges, and franchises" ham, in delivering the opinion of the court, would pass, and with which nothing more stated the question for decision in these could pass. On the contrary, it appears, as. words: “Is immunity from taxation grant- clearly as it did in the Phænix Fire Insured to plaintiff in error under language ance Company Case, that the legislature inwhich grants 'all the rights and privileges' tended to use the words "rights, franchises, of a company which has such immunity?" and privileges” in the restricted sense. The Much significance was given to the fact that law under which this transfer was made the word "immunity," which clearly in was enacted in 1867 and amended in 1879. cludes an exemption, was used in the char- In 1869 an act was passed authorizing the ter of the De Soto company, and not used in merger and consolidation of railroad corpothe charter of the plaintiff in error, granted rations (chap. 917, Laws of 1869), which seven years later. But the decision was not provided that, upon the consolidation, "all rested on this circumstance, although the and singular the rights, privileges, exomission was thought to cast a grave doubt emptions, and franchises should be transupon the plaintiff's claim. The opinion referred to the new corporation.” In 1876 an views all the cases, cites the foregoing act. was passed (chap. 446, Laws of 1876) quotations from the opinions of Mr. Justice which authorized the purchasers of the Brown, Mr. Justice Field, and of the Chief rights, privileges, and franchises of railJustice, and, after saying: “There must be road corporations (except street railroad other language than the mere word 'privi corporations) under a foreclosure sale to be. lege, or other provisions in the statute re

come a corporation, and thereupon have "all

the franchises, rights, powers, privileges, moving all doubt as to the intention of the legislature before the exemption will be ad- and immunities” of the corporation whose mitted,” concludes that: “If this were an

property was sold. The omission in the

statute under consideration of the words original question we should have no hesita- "exemptions” or “immunities," either of tion in holding that the plaintiff in error which would be apt to transfer the imdid not acquire the exemption from taxation munity claimed, is significant, in view of claimed by it, and we think at the present the fact that each of these words was emtime the weight of authority, as well as the ployed by the legislature about the same better opinion, is in favor of the same con time in other statutes dealing with the clusion which we should otherwise reach."

transfer of corporate property, and raises a In Gulf & S. I. R. Co. v. Hewes, 183 U. S. doubt of the intention of the legislature, 66, 46 L. ed. 86, 22 Sup. Ct. Rep. 26, Mr. which, in cases of the interpretation of a Justice Brown, in delivering the opinion of statute claimed to devest the state of a the court, said, citing this case as au- governmental power, is equivalent to a dethority: “The better opinion is that a nial. subrogation to the rights and privileges' of The conclusion that the exemption of the