Nathan Clifford

“ On the 8th of April, 1865, a convention of the people of Missouri adopted 'An ordinance for the payment of State and railroad indebtedness.' This ordinance levied on the railroad company an annual tax of ten per centum of all its gross receipts for the transportation of freight and passengers, and directed that it should be appropriated by the General Assembly to the payment of the principal and interest now due, or hereafter to become due, upon the bonds of the State, and the bonds guaranteed by the State, issued to the company. ”

“ Express exemption is not pretended, nor does the act to provide for the completion of the railroad contain any provision which, when properly construed, affords any support to the proposition that any such contract exists between the company and the State, either express or implied, even if it could be admitted that mere implication is sufficient, which may well be questioned, as the current of the decisions of this court warrant the conclusion that if such an exemption be claimed it must be made to appear in clear, explicit, and unequivocal terms. ”

“ Power is also reserved to the State to enforce the lien on the railroad for the failure on its part to pay punctually principal and interest on the bonds issued for its benefit, as herein and heretofore provided for in such cases; and the company shall pay at the times herein specified, 'to the treasurer of the State one and a quarter per cent., in addition, in each year, on each thirty-year bond, and two and a half per cent. in each year on each twenty-year bond so sold or hypothecated, to be invested at not less than seven per cent. ”

“ Pursuant to that theory the plaintiffs contend that the legislative act to complete the railroad enacted a mode of making payments by the company to the State, which, when the act was accepted by the company, became a binding contract between the parties, within the protection of that provision of the Constitution, and that as such it could not be rescinded by any subsequent legislation, and that the ordinance does impair the obligation of that contract by providing another and a different mode of enforcing the payments without the consent of the company. ”

“ You must discharge that debt and liability by turning over ten per cent. of your gross receipts until we are satisfied that the debt is paid, and if you do not we will sell your franchise and all your property.' What is this but resuming the position of first mortgagee? The ordinance goes farther. It not only makes the State a first mortgagee, in violation of the provisions of the act of 1865, but it changes the mode and time of payment. Can this be considered a tax? Has it any of the elements of a tax?
Taxes are burdens imposed upon persons or property to raise money for public purposes. ”

“ Such aid was granted by the act of the twenty-third of December, 1851, in terms as follows: that when evidence is produced satisfactory to the governor that the company has collected fifty thousand dollars on their capital stock, and that they have expended the same in the survey, lecation, and construction of the railroad, the governor shall cause to be issued and delivered to the company special bends of the State to the same amount, as a loan of public credit, bearing interest and payable as therein provided. ”

“ The railroad company was a corporation, vested with certain franchises under a charter from the State, and the act of 1865 gives certain other franchises, and imposes certain restrictions, which required the assent of the corporation to make them valid, and the contract was: That the State would release its lien to a certain extent ”

“ The money here raised is to be applied to the payment of a particular debt. The road had already been placed, by the act of 1865, in the hands of a receiver or fund commissioner, and the company was required to pay all the gross earnings and daily receipts into his hands under penalty of $10,000 for each instance of neglect to do so.
Calling a thing a tax does not make it a tax ”