Phoenix Fire & Marine Insurance v. Tennessee

delivered the opinion of the court.

This was a bill filed by the plaintiffs below in the Chancery Court of Tennessee for Shelby County, in October, 1891, to recover taxes alleged to be due from the corporation, plaintiff in error, or its stockholders, to the city of Memphis for the years 1888 to 1891, inclusive. The complainant’s bill alleged that neither the defendant company nor its shareholders had any immunity from taxation, and that if any such ■ immunity existed it could not operate to protect both the shareholders and the capital stock. Judgment was accordingly prayed in the alternative against the corporation or the stockholders according as the taxes might be held to' have been laid upon one or the other. A demurrer was interposed to the bill, which was sustained in the court below, but upon appeal to

By its answer the defendant company claimed immunity from taxation, both for itself and its shareholders, and also set up a plea of res judicata, and alleged various objections to the validity of the several assessments upon which complainant claimed taxes due to the State. The case was duly tried, and judgment for the complainant was rendered by the trial court, in which it was adjudged that by the charter neither the defendant company nor its shares of stock had any immunity from taxation, and that both were, for the years mentioned in the bill, subject to the taxing power of the State. The court decided the. Federal question made by the defendants below against them, and adjudged that the state tax laws set up in the record, under which the taxes were levied, were not violative of the Constitution of the United States, or void as claimed by the defendants. This judgment was in substance affirmed by the Supreme Court, and the defendants below su'ed out a writ of error, and the reoord is now here for review.

The question first arising is as to the correctness of the judgment holding that the plaintiffs in error were not entitled to any immunity from taxation either as to the capital stock or the shares of stock in the hands of stockholders. The

It will thus be seen that the Bluff City Insurance Company was to pay to the State a certain annual tax on each share of capital stock subscribed, which was declared to be in lieu of all other taxes, and the question is now presented, whether by virtue of these..various statutes the. plaintiff in error was granted an iminunity from taxation to the same extent as that given to the Bluff City Insurance Company and to the De Soto Insurance Company. Is immunity from taxation granted to plaintiff in error under language which grants “ all the rights and privileges ” of a company which has such immunity? In statutes, as is sometimes the case in legal

The learned counsel for plaintiff in error have cited many statutes of the State of Tennessee in which it is said the word “ immunities ” is sometimes used where no exemption from taxation was intended, and he quotes a section from one act, (Acts 1866-7, Private, section 49 of an act, page 155,) which grants “ all the powers, privileges and immunities ” of another company that had no exemption, and in another case there was granted “ all the rights, franchises and privileges ” of a railroad company which had an exemption from taxation. Many other instances of a like nature are cited. The result of it is to occasion great difficulty in determining what was really intended by the legislature in these various acts. The learned counsel for plaintiff in error also state that about the time these charters in question were granted the legislature customarily expressed the purpose to tax corporations when no exemption was intended. The inference is sought to be drawn in favor of exemption, if the legislature did not affirm atively grant the right to tax. ¥e cannot assent to any such view, and we could come to no such Conclusion from an examination of the general statutes cited by counsel. It is a complete overturning of the universal rule in regard to taxation. -The power and the right to tax are always presumed, and the exemption is to be clearly granted. Mere silence is the same as a denial of exemption.

We can see nothing in the “surrounding circumstances” which counsel claim should influence our examination and conclusion. as to the meaning of these statutes, that in any way induces the belief that an exemption was plainly intended. Our attention has not been called to circumstances which we should regard as of that nature, nor is our judicial knowledge of them sufficient in kind or degree to cause us to conclude that this exemption was intended to be granted to plaintiff in error. We do not find that at this time there was, as counsel insist, any settled rule of the courts that the word “ privileges ” always embraced exemption from taxation, or that “rights and privileges ” and “ privileges and immunities ” were used

In Wilson v. Gaines, 9 Bax. 546 , it was held by the Supreme Court of Tennessee that as the State in its constitution (article 11, section 7, constitution 1834) used in the same connection all the words “ rights,” “ privileges,” “ immunities ” and “ exemption,” each of these words was to .be given, in statutory interpretation, a meaning so limited as not to include anything expressed by the others, and that when any. one of them is found in a statute the legislature must be conclusively presumed to have used it in its restricted sense. This decision of the Tennessee court tends very strongly to the idea that the words “immunity” or “exemption” would have been required to secure the exemption to a company in a case like this. It is true that this view was not assented to by this court as being the correct one, Tennessee v. Whitworth, 117 U. S. 139 , 146, and it is simply cited for the purpose of showing what the Tennessee court did decide in regard to the meaning of its own constitution in reference to this subject.

' • That the legislature was, about the time in question, freely incorporating various companies and granting them exemption from taxation with considerable liberalityis not a sufficient reason to induce this court to depart from the universal and well established rule making a claim for exemption a matter to be proved beyond all doubt. The circumstance which we regard as very significant and which has already been alluded to, consists in the, omission of the word “ immunities ” in the grant to plaintiff in error. That omission we attach great weight to, and the least that can be said of it is that it involves the question in doubt.

It cannot be denied that the decisions of this court are

Looking at the other side, we find the case of Humphrey v Pegues, 16 Wall. 244 , where there was a grant to a railroad company of “ all the rights, powers and privileges ” granted by the charter of another company which exempted the property of such other company from taxation, and it was held that the property of the first company was thereby also exempted. Mr. Justice Hunt, in delivering the opinion of the court, said that “a more important or more comprehensive privilege than a perpetual immunity from taxation can scarcely be imagined. It contains the essential. idea of a peculiar benefit or advantage or special exemption from a burden falling upon others.” Again, in Tennessee v. Whitworth, 117 U. S. 139 , it was held that a right to have shares in its capital stock exempt from taxation within the State was conferred upon a railroad corporation by a state statute granting to it “all the rights, powers and privileges,” or granting it “all the powers and privileges” conferred upon another corporation named, if the latter corporation possessed by law such right of exemption. The question in that case

The later cases of Pickard v. Tennessee &c. Railroad, 130 U. S. 637 , and Wilmington &c. Railroad v. Alsbrook, 146 U. S. supra, show that there must be other language than the mere word “ privilege ” or other provisions in the statute removing all doubt as to the intention of the legislature before the exemption will be admitted. The case of Mobile & Ohio Railroad v. Tennessee, 153 U. S. 486 , adds nothing to the discussion on either side. The particular point was not in that case, but it seems to be cited by counsel for plaintiffs in error for the purpose of showing what was the general condition of the State at' the time of the adoption of the constitution in 1834, and what was the policy of the State in regard to internal improvements, which the constitution declared ought to be encouraged. The incorporation of ah insurance company would hardly come within the most liberal meaning of the term “ internal improvements.”

Second. Concluding, as we have, that this plaintiff in error, insurance company, is not exempt from taxation by the language of the statutes above mentioned, we come to the consideration of the second defence interposed by its shareholders. It seems that some time in the year 1873 the shareholders or some of them were sued by the city of Memphis to collect from them certain taxes alleged to be due that city for the year 1872 upon the shares of stock held by them. By the decision of the Supreme Court of Tennessee the city recovered a judgment. A stipulation was then entered into between the parties to that suit, which is in the record, by which it appears that the same questions involved in that suit were fully and fairly presented in the case decided in favor of the plaintiffs, at that term of court, wherein the State of Tennessee and Shelby County were complainants and Napoleon Hill and others, stockholders in the Memphis Fire and General Insurance Company, were defendants, and which action had been carried to the Supreme Court of the United States by writ of error for its decision of the questions, and, therefore, to save the expense’ of argument in the case, it was agreed by counsel for all parties that the Memphis city case should abide by the decision of Tennessee v. Hill, which should be conclusive upon the parties to the stipulation in all things the same as though actually rendered in that case. If the decree in the Hill case were affirmed, then this decree was to be affirmed, and if the other should be reversed, then.this was to be reversed. After the signing of that stipulation, the Hill case-was duly prosecuted by writ of error and argued before the Supreme Court of the United States, where the judgment in. favor of complainant was reversed and the cause remanded to the Supreme Court of Tennessee with directions to enter its decree therein for the defendant Hill. This was done, and, in accordance

We think the decision of the Supreme. Court as to the, weight to be given the judgment is not reviewable by us because it is not a Federal question. The former judgment determined that, as between the city and the shareholders, the latter were not subject to pay the taxes for the years specified. In the action now under consideration we have determined that there was no immunity conferred either upon the corporation or the stockholders by the statutes cited. On the trial of this action the former judgment was offered in evidence by the shareholders, and it was held to constitute no bar to the maintenance of this action by the plaintiff, nor did it operate as an estoppel upon their right to claim taxes for subsequent years. The judgment offered in evidence was the judgment of a state court, and the refusal to accord to it all that was claimed for it in the nature of an estoppel by counsel for plaintiffs in error was, in any event, ¿ó more than

If it were otherwise, every decision of a state court, claimed to be erroneous, which involved the failure to give, what the defeated party might claim to be the proper weight to one of its own judgments, would .present a Federal question, and would be reviewable here. There is no question of contract in the case. It is wholly one,of evidence as to whether or not a prior judgment in a state court operated as an estoppel against the plaintiff below, and prevented the state court from granting it the relief to which it would otherwise be entitled. In granting relief it was bound to consider the Federal question, as to whether there was or was not a contract of immunity, and that question was open to review here and we have

It is said that a suit for taxes for one year is no bar to a suit for taxes for another year; that it is not the same transaction, and the judgment in a prior action can never operate as an estoppel other than as to those matters which were in issue and controverted, and upon the determination of which a finding or verdict was rendered. It is not necessary in this case, however, to determine whether there was any one particular fact in issue and litigated in the first case, and which would be closed from further controversy, and which, as thus decided, would preclude a recovery in this case. ¥e hold that the question in any event, as presented in this case, was not a Federal one.

These views render a discussion of any other question in the case unnecessary and lead to an affirmance of the judgment herein.

Affirmed.

Mr. Justice White dissented.