The opinion of the court was delivered by: Matthews, J.
A. T. Britton, J. H. McGowan, A. B. Browne, and John F. Dillon, for plaintiff in error.
U. M. Rose, for defendants in error.
The legislature of Arkansas passed an act, January 12, 1853, to incorporate the Cairo & Fulton Railroad Company, with power to construct, maintain, and operate a railroad from a point on the Mississippi river opposite the mouth of the Ohio, in the state of Missouri, by way of Little Rock, to the Texas boundary line, near Fulton, in Arkansas, with one or more branches to the western boundary line of that state, with the view of entering the north-eastern and north-western portions of Texas, and there connecting with projected railroads in that state, from the bay of Galveston, running up the valleys of the Brazos and Trinity rivers; and with power to construct branches to any other point or points within the state of Arkansas. The capital stock of the company was fixed at $1,500,000, to be increased from time to time to any sum not exceeding the entire amount expended on account of said road.
The act contained the following sections:
'Sec. 10. Said corporation shall have power to unite their road with the southern end of the Missouri road at some suitable point on the line which divides these two states, and its southern end with any road coming in from Texas, at such point on the boundary line which divides that state and Arkansas that may be deemed most eligible; and to make any contract or agreement with any other railroad company in reference to their business that may best insure the early construction of said road and its successful management; and also to make joint stock with any other railroad company in this or any other state, and to form one board of directors for the management of their affairs. If it should be found necessary to facilitate the early construction of of the respective boards shall form affairs. If it should be found necessary a part of their respective charters whenever the same may be entered into and recorded with their charters.
'Sec. 11. That the capital stock and dividends of said company shall be forever exempt from taxation; the road, fixtures, and appurtenances shall be exempt from taxation until after it pays an interest of not less than ten per cent. per annum.'
'Sec. 13. This act shall be deemed a public act, and shall be favorably construed for all the purposes therein expressed and declared, in all courts and places whatsoever, and shall be in force from and after its passage: provided, that all the rights, privileges, immunities, and franchises contained in the charter granted at this session of the legislature of this state to 'The Mississippi Valley Railroad Company,' and not restricting or inconsistent with this act, are hereby extended to and shall form a part of this incorporation as fully as if the same was inserted herein.'
The reference to the charter of the Mississippi Valley Railroad Company need not be further considered, as it does not seem to be material in the present controversy. Railway Co. v. Loftin, 98 U. S. 559. At the time of the passing of the act incorporating the Cairo & Fulton Railroad Company, the constitution of Arkansas contained no restriction upon the power of the legislature to grant such an exemption from taxation as the charter contains. But the constitution of the state, which took effect April 1, 1868, and was in force until October, 1874, contained the following provisions: 'The general assembly shall pass no special act conferring corporate powers. Corporations may be formed under general laws, but all such laws may from time to time be altered or repealed.' Article 5, § 48. 'The general assembly shall not grant to any citizen or class of citizens privileges or immunities which upon the same terms shall not equally belong to all citizens.' Article 1, § 18. 'The property of corporations now existing or hereafter created shall forever be subject to taxation the same as property of individuals.' Article 5, § 48.
On July 23, 1868, an act was passed by the general assembly of the state of Arkansas 'to provide for a general system of railroad incorporation,' in which is the following:
'Sec. 43. Any railroad company now chartered under existing laws, or which may hereafter become incorporated under this law, shall have power and authority to purchase and hold any connecting railroad and operate the same, or to consolidate their companies and make one company, under the name of one or both or any other name; but when such purchase is made or consolidation is effected, the said company shall have and be entitled to all the benefits, rights, franchises, lands and tenements, and property of every description, belonging to said road or roads so sold or consolidated, and shall be liable to all the pains and penalties imposed by their respective charters.'
On January 1, 1874, the main line of the Cairo & Fulton Railroad Company was completed and was in ac ual operation; but the branches authorized by the charter were not completed until after the consolidation between that company and the St. Louis & Iron Mountain Railroad Company, a corporation of Missouri which took effect on May 4, 1874, and resulted in the formation of the St. Louis, Iron Mountain & Southern Railway Company, the complainant and plaintiff in error in this suit. This consolidation was effected by means of certain proceedings and an agreement between the parties, the parts of which, pertinent to the present controversy, are as follows:
The board of directors of the Cairo & Fulton Railroad Company, on May 4, 1874, adopted these resolutions, viz.:
'Resolved, that this company will enter into an agreement with the St. Louis & Iron Mountain Railroad Company for uniting and consolidating this company with the said St. Louis & Iron Mountain Railroad Company, and for making joint stock of the two companies and forming one board or directors for the management of the affairs of said companies on the basis jointly recommended by the committees on consolidation, and embraced in the agreement executed by the said St. Louis & Iron Mountain Railroad Company, and now here submitted for execution on the part of this company.
'Resolved, further, that the president of this company be, and he is hereby, authorized and directed to execute the agreement submitted, to be, however, subject to the approval and confirmation of the stockholders of this company, called to be holden on Monday, the fourth day of May inst., or any other day thereafter, and, when approved that the president cause the same to be carried into effect, and call in the certificates of stock in this company outstanding, and exchange them for stock in the new company according to the terms of the agreement.' The agreement of consolidation referred to was approved and adopted by the stockholders of the company on the same day. It purports to be an agreement entered into April 13, 1874, between the St. Louis & Iron Mountain Railroad Company, a corporation organized and existing under and by virtue of the laws of the state of Missouri, ...