Argument for Plaintiffs in Error.

199 U. S.

As to the force of the legislative characterization of such payments as "in the nature of a tax," see Alexander v. Mayor, 5 Cranch, 1, 8.

As to effect of "or," and its being equivalent to "and" see People ex rel. M. G. Co. v. Rice, 138 N. Y. 151, 156; United States v. Fisk, 3 Wall. 445; United States v. Freeman, 3 How. 556, 564; Stockdale v. Insurance Companies, 20 Wall. 323, 331; Cope v. Cope, 137 U. S. 682, 688; People v. Benton, 29 N. Y. 534, 537; Smith v. People, 47 N. Y. 330, 339; People ex rel. West. F. I. Co. v. Davenport, 91 N. Y. 574, 591.

The contemporaneous practical interpretation by Governor Cleveland in 1884, in the light of which the contracts. were made, supplemented as it is by the declaration of Governor Roosevelt in 1899, are likewise entitled to almost the force of law. Citizens' Bank v. Parker, 192 U. S. 73, 81; Potter v. Hall, 189 U. S. 292, 298; Southern Pacific Railroad Co. v. Bell, 183 U. S. 675, 682; Hewitt v. Schultz, 180 U. S. 139, 156; United States v. Pugh, 99 U. S. 265, 269. See also Easton v. Pickersgill, 55 N. Y. 310; People ex rel. Williams v. Dayton, 55 N. Y. 367; Power v. Village of Athens, 99 N. Y. 592, 602; Matter of W. S. A. & P. R. R. Co., 115 N. Y. 442, 447; Jennings v. Van Schaick, 108 N. Y. 530, 533; Babbage v. Powers, 130 N. Y. 281, 291; Lewis' Sutherland Statutory Construction, § 474.

Where there is a definite and fixed annual payment as one of the terms of the grant of a franchise, right, or privilege to use the streets of a city it is to be fairly implied that the payments stipulated for are not to be increased. New Jersey v. Yard, 95 U. S. 104, 115. As to doctrine announced in Provi·dence Bank v. Billings, 4 Pet. 514, 560, see Gordon v. Appeal Tax Court, 3 How. 133, holding that a franchise from the legislature cannot subsequently be taxed, if a price has been paid for it, which the legislature has accepted. This case has not been limited or overruled by this court on the point now involved and cases cited by defendant in error do not so hold. On the contrary in support of the Gordon case see West

199 U. S.

Argument for Plaintiffs in Error.

River Bridge Company v. Dix, 6 How. 507, 542; Planters' Bank v. Sharp, 6 How. 301, 332; Ohio Life Ins. Co. v. Debolt, 16 How. 416, 429; Home of the Friendless v. Rouse, 8 Wall. 430, 438; Salt Company v. East Saginaw, 13 Wall. 373; Erie Ry. Co. v. Pennsylvania, 21 Wall. 492, 498; New Orleans Gas Co. v. Louisiana Light Co., 115 U. S. 650, 664; Water Company v. Freeport, 180 U. S. 587, 608; Shelby County v. Union Bank, 161 U. S. 149, 159; Pearsall v. Great Northern Railway Co., 161 U. S. 646, 662; Grand Lodge v. New Orleans, 166 U. S. 143; Citizens' Bank v. Parker, 192 U. S. 73, 90. See also Union Bank v. State, 9 Yerg. 490; Farrington v. Tennessee, 95 U. S. 679, 689; Attorney General v. Bank, 4 Jones Eq. (N. Car.) 187; New Orleans v. Southern Bank, 11 La. Ann. 41.

For other contracts of this nature see State v. Southern Bank, 23 La. Ann. 271; New Orleans v. People's Bank, 32 La. Ann. 82; New Orleans v. Chaffaix, 106 Louisiana, 250, 255, citing the Gordon case; also Citizens' St. R. Co. v. Common Council, 125 Michigan, 673, 702; Los Angeles v. City Water Co.. 61 California, 65, aff'd 177 U. S. 558, 577; St. Louis v. West. Un. Tel. Co., 63 Fed. Rep. 68, 70; Los Angeles v. S. P. R. R. Co., 67 California, 433, 436; Sebastian v. Bridge Co., 21 Ohio St. 451, 459; Bridge Co. v. Mayer, 31 Ohio St. 317, 322.

The closest analogy exists between the two governmental powers or functions of taxation and regulation of rates and tolls. The reasoning and rules of construction and the principles of law and public policy which should be applied have been declared to be the same. In both cases nothing is to be presumed in limitation or restriction of legislative power except what is expressed or implied. Stanislaus County v. San Joaquin C. & I. Co., 192 U. S. 201, 211; Covington &c. Turnpike Co. v. Sandford, 164 U. S. 578, 587; Stone v. Farmers' L. & T. Co., 116 U. S. 307, 325; Charles River Bridge v. Warren Bridge, 11 Pet. 420, 548. In both cases the elementary rule of legal reasoning, that what is implied is as much a part of a contract or statute as what is actually expressed, has never been disregarded. County of Wilson v. National Bank, 103

Argument for Plaintiffs in Error.

199 U.S.

U. S. 770, 778; Supervisors v. Lackawanna Iron &c. Co.,93 U. S. 619, 624; National Bank v. Graham, 100 U. S. 699, 703; Township of Pine Grove v. Talcott, 19 Wall. 666, 676; Telegraph Company v. Eyser, 19 Wall. 419, 427; Davis v. Gray, 16 Wall. 203, 223; Lynde v. The County, 16 Wall. 6, 13; United States v. Hodson, 10 Wall. 395, 406; Butz v. City of Muscatine, 8 Wall. 575, 581; Croxall v. Shererd, 5 Wall. 268, 283; United States v. Babbit, 1 Black, 55, 61; Rogers v. Kneeland, 10 Wend. 219, 252.

It is settled by the adjudications of this court that a grant of power to a corporation to fix or collect tolls or rates does not of itself imply any exclusion of the power of the legislature thereafter to declare what shall be prima facie reasonable compensation for the services to be rendered; but it has never been even intimated by this court that, where the charter of a corporation or the agreement between a corporation and the State or a municipality has expressly provided for a fixed rate of toll or charge, such rate could be varied by the legislature or municipality without impairing the obligation of the contract. Reagan v. Farmers' Loan & Trust Co., 154 U. S. 362, 393; Detroit v. Citizens' Ry. Co., 184 U. S. 368; Cleveland v. City Railway Co., 194 U. S. 517, 526; Chicago v. Sheldon, 9 Wall. 50.

A city cannot, through the form of taxation or assessment for improvements, increase the obligation assumed by the railway company in respect of the subject which was in the minds of the parties and formed part of their express agreement. West. Paving and Supply Co. v. Citizens' Street Railroad Co., 128 Indiana, 525; State ex rel. v. Corrigan Street Ry. Co., 85 Missouri, 263; Billings v. Chicago, 167 Illinois, 340; West Chicago St. R. R. Co. v. Chicago, 178 Illinois, 344; CoastLine R. Co. v. Savannah, 30 Fed. Rep. 646; Pensacola v. Northrup, 63 Fed. Rep. 689.

As to the franchises which are not covered by the act of 1884 and subsequent similar legislation each one of them constituted a contract which entitled the grantee to be protected

199 U. S.

Argument for Plaintiffs in Error.

against the exaction of further payments to the State or to the city, within the principles of the decisions cited. Nor does the reservation of power to alter or amend the acts or charters uphold the additional payments now sought to be imposed. The legislature cannot in one breath insist that the terms of its grant shall be performed by the grantee according to the letter and in another breath say that it may under the reserved power release itself from any reciprocal duty and impose an additional tax while holding on to the contract. Stearns v. Minnesota, 179 U. S. 223.

Mayor &c. v. Twenty-third St. R. Co., 113 N. Y. 311, is clearly unsound and will not be followed by this court. See Union R. R. Co. v. Carter, 32 Hun, 458; aff'd 117 N. Y. 625.

This court will determine for itself the scope and effect and true meaning of any contract the legislature has seen fit to make in consideration of the grant of rights and privileges. Douglas v. Kentucky, 168 U. S. 488, 500; Jefferson Bank v. Skelly, 1 Black, 436, 443; Railroad Co. v. Maine, 96 U. S. 499; 510; New Jersey v. Yard, 95 U. S. 104, 111; McCullough v. Virginia, 172 U. S. 102, 109; Shelby County v. Union &c. Bank, 161 U. S. 149, 151; Houston and Tex. Cent. R. R. Co. v. Texas, 177 U. S. 66.

The reserved power to alter, amend, or repeal does not permit or sanction the destruction of vested property rights. People v. O'Brien, 111 N. Y. 1, 36; Sinking Fund Cases, 99 U. S. 700; Lake Shore Ry. v. Smith, 173 U. S. 684, 690; Woodward v. Cent. Vt. Ry. Co., 180 Massachusetts, 599, 604; Commonwealth v. Essex County, 13. Gray, 239; Planters' Bank v. Sharp, 6 How. 301, 327; Langdon v. Mayor, 93 N. Y. 129, 157; City Railway Co. v. Citizens' Railway Co., 166 U. S. 557, 567.

This court is called upon for the first time to determine the principles which should guide legislatures in taxing the owners of local or special franchises, such as the privilege to use a public highway or street for a public purpose.

It is now hardly open to question that the amendment affords practical and effective protection against arbitrary or

VOL. CXCIX-2

Argument for Plaintiffs in Error.

199 U. S.

unequal taxation, and that its spirit and its meaning alike require that taxes imposed upon property of substantially the same kind, in substantially the same situation, and used for substantially the same purposes, shall be equal so far as equality may be practically attainable. A statute which attempts to classify those engaged in the same business and owning similar property and to discriminate among them unfairly or unnecessarily is repugnant to the Fourteenth Amend

ment.

While unavoidable inequality may not render the statute unconstitutional, where substantial equality is readily attainable, and where it is plain that members of a class are unfairly and unjustly discriminated against in a manner easy to obviate, the statute cannot be permitted to stand.

The law before the court operates arbitrarily to deny plaintiffs in error the equal protection of the laws and due process in three separate and distinct aspects. It adds to the obligations of the contracts while preserving all the burdens of those contracts. It provides for the deduction of annual payments covered by existing contracts from the amount of tax levied, by reason of which deduction those who agreed to pay for their franchises lump sums or annual amounts less than the new tax are discriminated against. It discriminates against them and subjects them to taxation, while their competitors operating under the surfaces of many of the same streets are to be exempted.

The act is nothing but an arbitrary exercise of power, and comes within the condemnation of Stearns v. Minnesota, 179 U. S. 223. And see also Duluth &c. R. R. v. St. Louis County, 179 U. S. 302.

These cases present a mere arbitrary exercise of power. Plaintiffs in error are held to the obligations of existing contracts, but the State and city seek to repudiate any reciprocal obligation, and to subject them to a general law without releasing them from the obligations of their special contracts under which they and others similarly situated have paid to