CHICAGO GREAT WESTERN RAILWAY COMPANY
v.
STATE OF MINNESOTA
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The Chicago Great Western Railway Company challenged Minnesota's 1903 gross earnings tax law, arguing that a tax provision in the original charter of its predecessor railroad company created an irrepealable contract limiting the state's taxing power. The Supreme Court affirmed the state court's judgment, holding that the state was not prevented by contract from enacting the 1903 tax statute and that taxation provisions in a railroad charter did not create an unchangeable contractual obligation binding on successor companies or restricting the state's authority to modify tax rates.
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Mr. Justice Harlan,
after making the foregoing statement, delivered the opinion of the court.
The rights of the plaintiff in error depend primarily upon the. construction of the act incorporating the Minnesota and Northwestern Railroad Company, Territorial Laws, 1854, c. 47, the amendatory act of 1855, c. 58, the amendatory act of 1856, c. 47, and the act of 1883, Special Laws, c. 83. That act of 1856 imposed a two per cent gross earnings tax in lieu of all other taxes. The Supreme Court of the State observed that until the present case arose it had never had occasion to construe the charter of the original company, and the acts amenda-tory thereof, nor determine whether the State could change the rate of taxation thereby imposed. It was of opinion that the question of taxation, here involved, was substantially the same as the one involved in Great Northern Railway Company v. State of Minnesota. That court consequently adjudged, upon the authority of that case, that the defendant, as a successor in interest of the Minnesota and Northwestern Railroad Company, could not claim the benefit of an irrepealable, unchangeable contract relating to taxation that passed or could, under the state constitution, have passed, unimpaired from the old company to a successor in interest, or that prevented the State from enacting the statute of 1903, chapter 253, General Laws of 1903. Without repeating what was said in the former case, we hold, upon the grounds set forth in the opinion in that case, that the state court rightly held that the State was not prevented by contract from passing the gross earnings tax law of 1903, and it properly reversed the judgment of the court of original jurisdiction, with directions xto enter judgment in favor of the State for the amount claimed in its complaint. The judgment herein must be affirmed.
It is so ordered.