While this disposes of the two assignments which are directly and specifically concerned with the interpretation of the statute, nevertheless the remaining seven also raise questions of law under the statute, since they all in one form or another rest upon the contention that error was committed by the trial court in not taking the case from the jury and instructing a verdict for the defendant upon the assumption that there was no evidence sufficient to justify the submission of the case to the jury for its consideration. Cresswill v. Knights of Pythias, 225 U. S. 246, 261; Southern Pacific Co. v. Schuyler, 227 U. S. 601, 611; St. Louis & Iron Mountain Ry. v. McWhirter, 229 U. S. 276, 277; Miedrich v. Lauenstein, 232 U. S. 236, 243, 244; Carlson v. Curtiss, 234 U. S. 103, 106. Considering the case from this point of view we think the contention cannot be said to be frivolous since its solution is by no means free from difficulty, a situation which was manifested by the division of opinion which arose on the subject in the court below and by the further fact that some members of this court now consider the proposition as affording adequate ground for reversal. But although the question is not free from complexity, a majority of the court is of opinion that the proof was sufficient to justify the submission of the case to the jury and therefore the proposition affords no basis for holding that reversible error was committed because that course was pursued. As the considerations by which this conclusion is sustained depend solely upon an analysis of the evidence, and as a statement upon the subject therefore would amount only to giving a summary of the proof in this case and its tendencies involving no matter of doctrinal importance, for this reason and additionally in view of the fact that both the courts below have concurred in holding that there was no sufficient ground to take the case from the jury, we think it is unnecessary to state the proof and its tendencies and we therefore content ourselves with saying VOL. CCXXXVI-43

that the contention that error was committed in not taking the case from the jury is found, after an examination of the record, to be without merit.

In the argument a contention was urged based upon some expression made use of by the trial court in refusing the request to take the case from the jury. Although we have considered the proposition and find it totally devoid of merit, we do not stop to further state the contention or the reasons which control us concerning it as we think it is manifestly an afterthought, as it was virtually not raised in the trial court and was not included in the assignments of error made for the purpose of review by the court below nor in those made in this court on the suing out of the writ of error.

WRIGHT,

COMPTROLLER

Affirmed.

GENERAL

OF

GEORGIA, v. CENTRAL OF GEORGIA RAILWAY COMPANY.

APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF GEORGIA.

No. 161. Argued January 28, 29, 1915.-Decided March 22, 1915.

This court will not presume that a state legislature in granting a charter containing exemptions would either practice deceit or make a futile grant.

A lessee of railroads which were built under special charters containing irrepealable contracts by which the property was not subject to be taxed higher than a specified per cent on the annual income derived therefrom is not subject to an ad valorem tax as the owner of such property.

The statutes of Georgia in regard to the taxation of railroads involved in this action are construed as making the fee exempt from other taxation than that provided for in favor of the lessee as well as of the lessor.

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Argument for Appellant.

While technical distinctions should be avoided as far as may be in matters of taxation in the interest of substantial justice, they should not be disregarded in order to enable a State to escape from a binding bargain; and so held in regard to distinctions between lessors and lessees where the protection of the latter is necessary in order to make good the promise of the State made to the former. The courts cannot take the place of the taxing power nor can taxes based on ownership of the property be enforced against a lessee of the property under the statutes of Georgia and the leases involved in this case.

206 Fed. Rep. 107, affirmed.

THE facts are stated in the opinion.

Mr. John C. Hart and Mr. Samuel H. Sibley for appellant. The contracts for exemptions are personal, are not vendible nor transferable, and are valid only so long as those companies as such conducted the business of common carriers. The state charter contracts limiting the tax rate is personal to these corporations to whom granted and did not run with the property, not having been transferred to the Central of Georgia Railway with the consent of the State at a time when the State could consent, and cannot be invoked by lessee, for its own benefit.

The person with whom the contract is made by the State may continue to enjoy benefits unmolested as long as he chooses, but there his rights end, and he cannot by any form of conveyance transmit the contract or its benefits to a successor. Rochester Ry. v. Rochester, 205 U. S. 247; Morgan v. Louisiana, 93 U. S. 217; Wilson v. Gaines, 103 U. S. 417; Louis. & Nash. R. R. v. Palmes, 109 U. S. 244; Pickard v. Tennessee &c., 130 U. S. 637; St. Louis &c. R. R. v. Gill, 150 U. S. 649; Nor. & West. Railroad Co. v. Pendleton, 156 U. S. 667.

The Constitution of the State forbids exemption. Article 7, § 2, par. 1; Rochester Ry. v. Rochester, 205 U. S. 247; Trask v. McGuire, 18 Wall. 391; Shields v. Ohio, 95 U. S. 319; Maine Central R. R. v. Maine, 96 U. S. 49; Railroad

Co. v. Georgia, 98 U. S. 359: Yazoo R. R. v. Adams, 180 U. S. 1; Grand Rapids &c. R. R. v. Osborn, 193 U. S. 17; San Antonio Traction Co. v. Altgeli, 200 U. S. 304.

Whether the exemption claimed is total or a commuted tax rate it stands upon the same principle. Great Northern Ry. v. Minnesota, 216 U. S. 207.

A lessee in perpetuity is the owner of property for the purpose of taxation. Civ. Code Georgia, 1911, § 1018; Penick v. Atkinson, 139 Georgia, 649; Wells v. Mayor, 87 Georgia, 397; Perry v. Norfolk, 220 C. S. 479: Cincinnati College v. Yeatman, 30 Oh. St. 276; Street v. Columbus, 75 Mississippi, 822; Washington Market Co. v. Dist. of Col., 4 Mackay, 416.

The lessee, now the appellee, contracted to pay the taxes in question.

Neglect to pay taxes in the past is no reason for future exemption. Wells v. Savannah, 181 C. S. 547.

Neither the action nor the inaction of the Tax Department could raise an exemption. Art. 4, § 1, par. 1.

Mr. A. R. Lawton and Mr. T. M. Cunningham, Jr., for appellee.

MR. JUSTICE HOLMES delivered the opinion of the court.

This is a bill in equity brought by the Railway Company, the appellee, to prevent the collection of certain taxes, which, it is alleged, would be contrary to Article I, § 10, and to the Fourteenth Amendment of the Constitution of the United States. The case was heard on bill, demurrer and answer and certain agreed facts, and the District Court issued an injunction as prayed. 206 Fed. Rep. 107. The facts stripped of details not material to the question before us, are as follows: In 1912 the defendant issued executions against the plaintiff to collect ad valorem taxes on the "real estate, road bed, and franchise value,

236 U.S.

after crediting

Opinion of the Court.

one-half of one per cent. of the net income, on that portion of its property known in its system" respectively as the Augusta and Savannah Railroad and the Southwestern Railroad. These roads were built under special charters admitted to constitute irrepealable contracts, by which the property was not subject to be taxed higher than one-half of one per cent. upon the annual income so that it may be assumed that the present taxes could not be sustained if the roads still were in the separate hands of the corporations that built them.

But in 1862, the Augusta and Savannah Railroad and in 1869 the Southwestern Railroad made leases of their respective roads and franchises to the Central Railroad and Banking Company of Georgia during the continuance of the charters of the lessors. In 1892 the property of the lessee went into the hands of a receiver, and the lessors, being allowed an election by the court, elected to allow the property to remain in his hands, which it did until a sale of the same and purchase, under a reorganization plan, by the appellee, the Central of Georgia Railway Company. In 1895 by agreement between the latter and the two lessors the leases were modified so as to run for one hundred and one years from November 1 of that year, renewable in like periods upon the same terms forever. Notwithstanding these leases the State has been content down to this time to collect from the lessors the tax provided for in their charter, but now, conceiving the State and its officers to have been mistaken, the Comptroller seeks to tax the whole property to the lessee.

The executions are for taxes on property of the plaintiff and must show jurisdiction to issue them. Harris v. Smith, 133 Georgia, 373, 374; Equitable Building & Loan Ass'n v. State, 115 Georgia, 746. Here the jurisdiction depends upon these roads being in effect the plaintiff's property as matter of law. If they are not, the attempt is an attempt