Statement of the Case.

Under authority granted by the act of March 16, 1872, c. 75, of the legislature of Mississippi, the auditor conveyed to the Selma, Marion and Memphis Railroad Company the lands in question here, by deeds which recited that they had been "sold to the State of Mississippi for taxes due to the said State," and that the company had paid into the state treasury two cents per acre in full of all state and county taxes due thereon to present date." No reference was made in those deeds to levy taxes or assessments. Held, that those deeds were no evidence of the prior payment and discharge of such levy taxes and assessments.

It is well settled that the punctuation of a statute is not decisive of its meaning.

The decision of the Supreme Court of Mississippi in Green v. Gibbs, 151 Mississippi, 592, followed, as it was, by subsequent decisions of that court, is not only binding on this court, but also commends itself to the judgment of this court as a just recognition of the force of legislative contracts.

THIS was a bill in equity filed in the Circuit Court of the United States for the Southern District of Mississippi, on February 27, 1889, by the appellants as complainants to quiet their title to certain lands therein described. Upon final hearing, on August 15, 1890, a decree was entered dismissing the bill, 43 Fed. Rep. 181, from which decree the complainants have appealed to this court.

Complainants' chain of title is as follows: 1st. A patent on March 13, 1853, from the United States to the State of Mississippi, under the act of September 4, 1841, c. 16, 5 U. S. Stat. 453, and September 28, 1850, c. 84, 9 U. S. Stat. 519. 2d. Conveyances from the State of Mississippi made during the years 1853 to 1856, inclusive, to E. F. Potts and others, these grantees having entered the lands with scrip issued by the secretary of state, under the acts of March 15 and March 16, 1852, providing for the construction of levees upon the Mississippi River. Laws Miss. 1852, c. 14, pp. 33, 41. 3d. Deeds from the grantees of the State and their privies in interest, in the years 1871 and 1872, to the Selma, Marion and Memphis Railroad Company, made under the authority of an act of the legislature of the State, approved July 21, 1870, authorizing the conveyance of lands to such company in payment of subscription to its capital stock. Laws Miss. 1870, c. 220, p. 566. 4th. Deeds from the State of Missis

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sippi to the railroad company, of date March 18, 1873, executed under authority of an act of the legislature, approved March 16, 1872, Laws Miss. 1872, c. 75, p. 313, providing that all lands which had been sold to the railroad company, and which had become forfeited to the State for non-pay ment of taxes, might be bought by that company from the State at two cents per acre, upon satisfactory proof that not less than twenty-five miles of the company's road had been built; and also that in all cases in which the lands had been forfeited to or purchased by the levee boards in any of the levee districts in the State and were held and claimed by them for the non-payment of levee taxes the said boards were required to arrange for the payment of such taxes by receiving therefor the bonds of the said districts. 5th. Deeds from the United States marshals for the Northern and Southern Districts of Mississippi to the complainants, executed August 1, 1887, and February 5, 1889, under sales made pursuant to a judgment and decree rendered on July 6, 1886, by the Circuit Court of the United States for the Northern District of Mississippi in the case of Timpson, Trustee, &c. v. Selma, Marion & Memphis Railroad Company.

The title of the defendant was based upon various statutes of the State of Mississippi, providing for repairing and perfecting the levees of the Mississippi River in certain counties, and making assessments upon all the lands within certain boundaries for the cost of such improvements, and originated in tax sales made for the non-payment of such assessments.

Mr. Casey Young for appellants. Mr. Michael F. McMullen was with him on his brief.

Mr. Frank Johnston for appellee.

MR. JUSTICE BREWER delivered the opinion of the court.

We premise by saying that this case involves over 200 different tracts of land in nine separate counties, and amounting to 112,160 acres; that the titles to these various tracts as claimed

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by complainants are not all deraigned by the same conveyances or subject to the same conditions; that in consequence the many questions discussed so elaborately by counsel in their brief and in oral arguments do not affect alike all the tracts. We shall not attempt to consider all the questions presented, but have endeavored to select those which are necessary for a final determination of the case. We believe that the title to every tract falls within the scope of those we shall discuss, and that the propositions laid down are decisive of the rights of the parties hereto.

It is insisted that the lands, while held by the railroad company were, by virtue of certain clauses in its charter, exempt from the levee assessments, and we understood counsel, in their argument at the bar, to state that this question stands in the forefront of the case, and that upon its decision in favor of the complainants their rights depend. The lands were, in the years 1871 and 1872, conveyed by their former owners to the railroad company in payment of stock subscriptions. The company, originally known as the Memphis, Holly Springs and Mobile Railroad Company, was chartered by an act of the legislature of the State, of date November 23, 1859. Laws Miss. 1859, c. 14, p. 51. Sections 19 and 21 of that act are as follows:

"SEC. 19. That the capital stock, and all the property and effects of said company shall be exempt from taxation until said road is completed: Provided, said road is commenced within two years and completed within ten years from and after the passage of this act.

"SEC. 21. That said road shall be commenced in three years and completed in twelve years after the passage of this act."

The civil war interfering with the construction of the road, on February 20, 1867, Laws Miss. 1867, c. 464, p. 635, an act was passed reviving the corporation. Section 2 reads: "That said company shall have sixteen years in which to construct the said road, and shall commence the same in three years from and after the passage of this act." Section 3 provides: "That it shall and may be lawful for the said corporators to

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receive subscriptions in land to the capital stock of the company: Provided, The lands shall be within five miles of the line of said road." On July 21, 1870, Laws Miss. 1870, c. 220, p. 566, a further act was passed, the second section of which is: "That said Selma, Marion and Memphis Railroad Company are hereby authorized to receive, in the way of subscription to the capital stock of said company, lands lying anywhere within the limits of the State of Mississippi." Under the authority of this statute these lands, being all more than five miles from the line of the road, were conveyed to the company. Now, the contention is that section 19 of the original statute was operative to exempt these lands from any charge. for levee assessments. It is contended that the general language, "the capital stock and all the property and effects of said company," includes all the property belonging to the railroad company, whether used for railroad purposes or not; that it includes not only all the property which it acquired under the authority of its original charter, but also all property which it acquired under the authority of the amendment of July 21, 1870; and, finally, that the exemption from taxation means not merely exemption from all taxes levied for ordinary purposes by State, county or city, but also all assessments for local improvements. These propositions are denied by the defendant, and certainly present the most important if not the vital questions in the case.

It is abundantly established by the decisions of this as of other courts that exemptions from taxation are to be strictly construed, and that no claim of exemption can be sustained unless within the express letter or the necessary scope of the exempting clause. Vicksburg &c. Railroad v. Dennis, 116 U. S. 665, 668; Chicago &c. Railroad v. Guffey, 120 U. S. 569; Yazoo &c. Railroad v. Thomas, 132 U. S. 174; Yazoo &c. Railroad v. Delta Commissioners, 132 U. S. 190; N. O. & Lake Railroad v. New Orleans, 143 U. S. 192; Schurz v. Cook, 148 U. S. 397, 409; Keokuk &c. Railroad v. Missouri, 152 U. S. 301, 306; Winona &c. Land Company v. Minnesota, 159 U. S. 526.

Indeed, there has been strong judicial dissent from the doctrine of the power of the state legislature to create a permanent

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exemption from taxation. Washington University v. Rouse, 8 Wall. 439, 443.

It has been frequently decided that a general exemption of the property of a corporation from taxation is to be construed as referring only to the property held for the transaction of the business of the company. Ramsey County v. Chicago, Milwaukee &c. Railway, 33 Minnesota, 537; Todd County v. St. Paul, Minneapolis &c. Railway, 38 Minnesota, 163; Illinois Central Railroad v. Irvin, 72 Illinois, 452; In re Swigert, 119 Illinois, 83; State v. Mansfield Commissioners, 23 N. J. Law, 510; State v. Newark, 25 N. J. Law, 315; Vermont Central Railroad v. Burlington, 28 Vermont, 193; Railroad Company v. Berks County, 6 Penn. St. 70; Worcester v. Western Railroad, 4 Met. 564; Tucker v. Ferguson, 22 Wall. 527; Bank v. Tennessee, 104 U. S. 493, 497. In this latter case, after referring to several of the authorities just cited, it was said: "The doctrine declared in them, that the exemption in cases like the one in the charter before us extends only to the property necessary for the business of the company, is founded in the wisest reasons of public policy. It would lead to infinite mischief if a corporation, simply by investing its funds in property not required for the purpose of its creation, could extend its immunity from taxation, and thus escape the common burden of government."

The rule in Mississippi is the same. McCulloch v. Stone, 64 Mississippi, 378. In that case a railroad company, as here, was authorized to take subscriptions to its capital stock, payable in land. The charter also provided "that all taxes to which said company shall be subject for the period of thirty years are hereby appropriated and set apart, and shall be applied to the payment of the debts and liabilities which the said company may have incurred in the construction of said road or for money borrowed, . . and it shall be the duty of the tax collector in every county, in each and every year, to give to said company a receipt in full for the amount of said taxes upon receiving from the company an affidavit made by the president or cashier of said company that the amount of said taxes have actually been paid and applied by said company during the