And so, when the Chief Justice, in 1812, held, without argument, that a
grant of land by a State, with a privilege of exemption from taxation,
contained a contract against future taxation, protected, even in the
hands of subsequent holders, by the constitutional provisions against
impairing the obligation of contracts, something was done which would
probably not be done to-day, if the question came up for the first time.
Certainly the soundness of the doctrine has been frequently denied by
judges of the Supreme court, and it has only survived through the device
of construing all grants in the narrowest manner. “Yielding,” says the
Court in a recent case, “to the doctrine that immunity from taxation
may be granted, that point being already adjudged, it must be considered
as a personal privilege, not extending beyond the immediate grantee,
unless otherwise so declared in express terms.” And again the court has
recently remarked on the “well-settled rule that exemptions from
taxation are ... not to be extended beyond the exact and express
language used, construed _strictissimi juris_.”
Again, in Dartmouth College _v._ Woodward, in 1819, when it was held
that a legislative grant of incorporation was a contract protected by
the same clause of the Constitution, something was done from which the
court was subsequently obliged to recede in an important degree. Acts of
incorporation for the manufacture of beer, for carrying on
slaughter-houses, for dealing in offal, and for conducting a lottery,--a
reputable business in 1819, when the Dartmouth College case was
decided,--such acts as these have been treated by the Supreme Court as
not being thus protected. It is held that no legislative body can
contract to part with the full power to provide for the health, morals,
and safety of the community. Such things, it is said, are not the proper
subject-matter of legislative contract,--a doctrine which it has been
widely thought should, originally, have been applied to all acts of
incorporation. “The State,” says a distinguished judge, and writer on
constitutional law, in speaking of the Dartmouth College doctrine and
its development, “was stripped, under this interpretation, of
prerogatives that are commonly regarded as inseparable from sovereignty,
and might have stood, like Lear, destitute before her offspring, had not
the police power been dexterously declared paramount, and used as a
means of rescinding improvident grants.”[34]
Public-domain text, read in full here on John Shaqi.
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