The opinion
Dixon, J.
(dissenting). I concur in' the decision of this court that the statute approved March 23d, 1865 (Pamph. L., p. 555), and the assent thereto filed April 24th, 1865, formed a contract between New Jersey and the Morris and Essex Railroad Company, the obligation of which no state law could impair, and that by force of the lease made December 10th, 1868, and the statute approved February 9th, 1869 (Pamph. L., p. 28), to ratify and confirm said lease, all the rights of the Morris and Essex Railroad Company, under its contract with New Jersey, passed to the Delaware, Lackawanna and Western Railroad Company.
*223 The next inquiry presented relates to the scope of the contract. Its terms are that a certain tax to be paid by the company “ shall be in lieu and satisfaction of all other taxation or imposition whatsoever, by or under the authority of this state or any law thereof;” and the exact question to be decided is, What taxation or imposition is to be prevented or satisfied by payment of the stipulated tax ?
In my judgment, the taxation or imposition intended was such as otherwise might have been levied upon the company as it then existed, endowed with the powers and capacities which it then possessed.
The contract cannot reasonably be limited to the property, stock and business which the company then had, because under that rule such contracts in original charters, where they are commonly found, would be meaningless, for of course there would be no stock, business or property to which they could apply.
On the other hand, the contract should not be extended to powers and capacities conferred after the contract, for reasons wüich to me seem cogent. It is not claimed that by the statute of 1865 the state became bound to make any further grant to the Morris and Essex Railroad Company or its assigns. Undoubtedly the state was left at perfect liberty to do as it might choose in that respect. Hence, if we hold that the contract of 1865 embraced the powers and capacities that might afterwards be delegated to the company, we must hold that, although the state was under no obligation to bestow further powers or capacities, yet it had bound itself that, if any such were bestowed, one of the terms of bestowal should be to relieve the company from taxation in their exercise. An obligation of this nature, between parties situated towards each other as were the state and the company, would be most remarkable. The company, if it expected to ask further grants from the state (and only on the hypothesis that it did can these grants be supposed to have been within its contemplation in making this contract), would scarcely desire to set up a barrier which might prevent the state from conceding *224 the favors; and the legislature of 1865 must have foreseen that any subsequent legislature having favors to give would itself define the conditions of its gift. A contract between the company and the legislature of 1865 that if any subsequent legislature should desire to give anything to the company, it should be compelled to give more than it was willing to give, would manifestly be nugatory, if not absurd, and its existence is not to be credited. Whether the company is exempted from the prerogative of taxation in the exercise of powers and capacities granted to it after the contract of 1865, should be ascertained, not by the terms of that contract, but by the just interpretation of the laws under which the grants were made. Suppose those laws expressly declared that the company, in the exercise of all powers under them, should be subject to taxation at legislative discretion, would any one pretend that the company might accept the benefit and repudiate the burden ? If not, it must be because each legislature can fix the terms of its own grant, and the company must take the grant with the terms, or else take nothing.
We come then to consider the laws affecting the company passed after the contract; and of these, as of all laws creating corporate privileges, it must be remembered that by no implication can they derogate from the sovereign power to tax ; express terms are necessary for that purpose. The only enactment having any appearance of contracting with the company for exemption from taxes is that approved March 5th, 1867. Pamph. L., p. 144. This statute authorizes the company to increase its capital stock to any amount not exceeding $10,000,000, to straighten its railroad, reduce the grades thereof and make the necessary sidings and facilities for railroad purposes, and then adds section 3, as follows:
“And be it enacted, that no tax by or under the authority of this state shall be imposed upon any property purchased, held or used by said company for the purposes of their charter or any of the supplements thereto, except the tax of one-half of one per centum on the cost of their road, which by the said charter and the supplement thereto, approved on the *225 twenty-third day of March, eighteen hundred and sixty-five, was required to be paid by said company in lieu of all other taxes, any act to the contrary notwithstanding.”
The question is, Was this a contract or an act of legislation only ? I deem it the latter for the following reasons :
First. There is always a strong presumption that a statute is an act of legislation and not a contract.
Second. This presumption is intensified in the present case by the fact that when contracting with the Morris and Essex Railroad Company by the statute of 1865, the state had carefully cast its agreement into the form of a contract, by making a written offer on one side and requiring a written acceptance on the other, while the statute of 1867 retains the form of a law merely.
Third. There was no consideration to support any legal obligation on the part of the state. There was no dispute pending; no right was surrendered by the company; no duty was imposed by the state; the statute of 1867 is simply an enlargement of the company’s privileges, of which it might or might not avail itself, at its pleasure.
Fourth. This provision in the statute of 1867, regarded as legislation only, could have due effect in saving the company from all taxes under existing laws, whether the taxes were such.as the contract of 1865 precluded or not; hence, it -need not be adjudged a contract in order to make it operative.
I find, therefore, no contract between the state and the Morris and Essex Railroad Company which exempts from the taxing power that company or its assigns, in the exercise of any power or capacity granted after the act of March 23d, 1865, and whatever property that company or the Delaware, Lackawanna and Western Railroad Company, as its lessee, possessed in 1884, which had been acquired by the exercise of powers or capacities conferred after March 23d, 1865, should be deemed subject to taxation under the Railroad Taxation act of 1884.
So far as the judgment of the Supreme Court holds to the contrary, it should be reversed. .
*226 For affirmance — The Chancellor, Depue, Parker, Reed, Scudder, Brown, Cole. 7.
For reversal — Dixon, Clement, McGregor. 3.