The distinction between corporations *158that are mere agencies of the State, and corporations based on contract, is fully established, Mills v. Williams 11 Ire. 558.
It is equally well settled that contracts made by the State with individuals, in granting charters, are not to be construed by the same rules as contracts between individuals. In the latter, the rule of the common law, which is the same as common sense, is, “words are to be taken in the strongest sense against the party using them;'’ on the idea that self-interest induces a man to select words most favorable for himself. It is otherwise when the State is a party ; for it is known that in obtaining charters, although the sovereign is presumed to use the words, in point of fact the bills are drafted by individuals seeking to procure the grant, and that “the promoters,” as they are styled in England, or the “lobby members,” as they are styled on this side of the Atlantic, have the charters or acts of incorporation drafted to suit their own purposes; and a matter of this kind, instead of being, in its strict sense, a contract, is more like the act of an indulgent head of afamilydispensingfavorstoitsdifferentmem-bers, and yielding to importunity. So the Courts, to save the oíd gentleman from being stripped of the very means of existence, by sharp practice have been forced to reverse the rule of construction, and to adopt the meaning most favorable to the grantor. In contracts between individuals itjs often difficult to say, what was intended to be a part of the contract, Baum v. Stevens, 2 Ire. 411, Foggart v. Blackweller 4 Id. 238; or was only an affirmation, “chaffering” (a Anglo Saxon word meaning a chat about .the matter,) but not in the bwrgain. A horse is offered for sale; the man says, “this is as sound an animal as ever worked in harness;” Do you warrant him to be sound? There is a magic in that word wa/rrant; so he says, “The horse is sound as far as I know or have reason to believe, but if you take him at my price, it is no part of the. bargain that I am to stand good, if it turns out that he is not sound; pay me a consideration for the warranty, and that will make a difference.”
*159Snob is the law between individuals. Reverse the rule, and see how it ought to be when the State is granting charters. It is known that the State is obliged to have the means of support, and that ho one set oí members of the General Assembly, have power to impoverish the State for all time to come, or to throw the burthen of taxation more heavily upon one class of citizens, than on another. So the terms of the charter must be construed in reference to this known state of facts, and the State must be considered as saying: “As things now seem, a certain amount from your corporation is enough to meet the estimates.”
Suppose, however, a disastrous war, or that the State loses by being security, or by the fraud of agents : Is the State to perish, and be without the means of support; or may it not be heard to say: “ This talk about the sum you have to pay annually, was no part of the bargain. Eor the general good as was supposed, — the franchise of being a corporation, and the right to take the land necessary for your purposes, was granted, in consideration of the labor and outlay of money on your part necessary to construct the work; what was said about the sum you were to pay annually, for the support of the government, was simply an incident to the contract, based on rough estimates, and was no part of the contract; no consideration was paid for it, and it is ungrateful on your part to make a question about it, under this unforeseen change in the consideration of things.”
These suggestio'ns are made as fit matter for reflection and as tending in a great degree, to justify the refinements made in many of the cases, of dividing corporations into several parts for the purposes of taxation : 1. The franchise privilege of association for a common purpose, 2. The stock of the corporation, 3. The shares of the members, 4. The dividends or profits; and, in this way, supporting a power to impose a tax on one of the parts, notwithstanding the power of taxation was seemingly exhausted, by having been made on one of the other parts, so as by implication to *160exempt the whole, except for the rule, that in the construction. of charters the words are to be taken most strongly against the grantees.
These refinements are evidently resorted to in order to avoid an expression of the plain fact: A State cannot by contract or in any other mode, surrender the power of taxation necessary for its existence. A question like this was presented in State v. Matthews, 3 Jon. 451. By the words of charter, the Bank of Fayetteville was authorized to issue bills of a denomination less than $3. This charter was granted in 1848. In 1854, “for the purpose of regulating the currency,” an Act passed prohibiting the circulation of small notes, viz: under $3. The court say “ these positions have been stated, to clear the way, and present the naked question. Is authority to issue small notes, conferred by the charter as a part of the essence of the contract, with the intent to put it beyond the control of all future legislation: or is it conferred as a mere incident, with the intention that it should be subject to such limitation as the Legislature might at any time thereafter, deem expedient to make for the purpose of regulating the currency of the JState ? This is a mere question of construction; and a plain statement seems sufficient to dispose of it. With the exception of the powers surrendered to the United States, each State is absolutely sovereign, and, with the exception of the restraints imposed by the constitution of the States and the Bill of Bights, all legislative powers' are vested in the General Assembly. It is consequently unreasonable to suppose that the General Assembly, admitting that it has the power, would alien or surrender and make subject to any individual or corporation, a portion of its sovereignty; and thereby disqualify itself from doing that for which these ample powers are conferred on it.
As is said in McRee v. W. & R. R. R. Co., 2 Jon. 186, we should hesitate long before bringing our minds to the conclusion that it was the intention of the Legislature to take from itself the power of doing that for yhich all gov*161ernments are organized; “ promoting tlie general welfare, .&c.”
-This case and the authorities by which it is supported, fully sustain the conclusion to which we have arrived, upon a broad and liberal view of the powers of government; that all contracts between the sovereign and its citizens in Bank and Railroad charters, are presumed to be made, subject to the change of circumstances that future events may develope, and to the right and duty of the State to regulate the currency and to preserve its own existence by equal taxation.
Taking a more narrow view of the subject, and descending to the refinement by which corporations are treated hi the courts as divisible into four parts : The charter provides that the railroads and all engines, &c., and all profits, and all the property of the company, shall be exemp't from any public charge or tax whatsoever for the term of fifteen years, “ and thereafter the Legislature may impose a tax not exceeding twenty-five cents per annum on each sha/re of the capital stock held by individuals, whenever the annual profits shall exceed eight per cent.”
The question is, does the express right, after fifteen years, to impose a tax of twenty-five cents, on each share of the capital stock, exclude, by implication, the right to tax the franchise or the land on which the road is constructed, and the depots, &c., are built, with the rolling stock, &c.
No one can entertain a doubt on the subject, after reading the authorities, unless he loses sight of the fact that in railroad and bank charters and the like, the words are to be taken most strongly against the corporation, and that no in-tendment or implication is to be made by which a sovereign can divest itself of the right of taxation and the duty to regulate the currency, and so to govern, as to provide for and protect the general welfare.
State v. Petway, 2 Jon. Eq. 366, which was ably argued and well considered by the court, fixes the principle: A tax *162in the charter, of twenty-five cents on each share of the capital stock, does not exhaust the power of taxation; and the-General Assembly may impose an additional tax on the dividends, &c., &c.
Here is a corporation owning land that, to suit its convenience, is located to reach from Baleigh to Weldon; on this land is constructed a road bed; the company likewise owns, parcels of land at suitable distances, on which depots, warehouses, &c., are erected; it also owns rolling stock, &c., of great value: Why should not the franchise and all of this property be liable to an ad valorem, tax f
The plaintiff answers: — “It was exempted from taxation for fifteen years, and individuals are supposed to have bought stock on the idea that no tax would he imposed, except the twenty-five cents on the share whenever the profits exceed eight per cent.”
But, until recently, horses, and farming utensils have never been taxed, and it may as well he said that this kind of property was bought on the idea that it would never be made the subject of an ad. valorem tax.
For a second reason the plaintiff says: — “ After the expiration of fifteen years, it is in the power of the Legislature to impose a tax not exceeding twenty-five cents on each share: but here is an attempt to exceed that amount, and to disregard the qualification that even twenty-five cents on the share can be exacted only when the profits exceed eight per cent.”
It may be, that, according to the ruling in Attorney General v. Bank of Charlotte, 4 Jon. Eq. 386, the tax on the shares could not have been increased, from twenty-five cents, say, to fifty cents; but this case recognizes the power to tax any other subject on which the tax is not imposed by the charter. As in our case, the tax spoken of in the charter is that upon the shares of stock, how can that exhaust the power of taxation in regard to the franchise, or on the land, and personal property of the corporation Í
*163It does not, -unless like King Lear, the State lias divested itself of all of the attributes of sovereignty and divided “the • kingdom ” among ungrateful children.
Order in the court below reversed. This will be certified.
Peb Cubiam. Reversed.