CHAP. VIII.] CORPORATION AND STATE. [§ 490. accumulated profits; and the state may tax them further. 1 Moreover, to give rise to such a contract there must be some consideration therefor from the corporation ; as a statute passed subsequently to the creation of a corporation, providing that the corporation shall not be taxed beyond a certain rate, is a mere gratuity, and may be repealed b} r the state at any time. 2 So a statute of one state permitting a corporation of another state to exercise part of its franchises in the former state, and laying a tax on the corporation at the same time, does not preclude further taxation on the part of the former state. 3 And an exemption from taxation in the nature of a " bounty " has been held repealable, even as to corporations formed subsequently to its passage and with a view to its pro- visions. 4 § 490. An exemption of the property and franchises of a corpo- ration from taxation is a privilege pertaining to the corporation, which does not follow its property and franchises into the hands of subsequent owners ; unless subsequent ^"^axa^ owners succeed to the property and franchises of the tion not corporation under special authority from the state se- able, curing to them all the rights and privileges of the cor- poration. 5 Thus, upon the sale of the property and franchises 1 Shelby Co. v. Union, etc., Bk., 161 U. S. 149. Cf. Bank of Com- merce v. Tennessee, ib. 134; Farring- tun v. Tennessee, 95 U. S. 679. So exempting the capital stock does not exempt shares in hands of share- holders. New Orleans v. Citizens' Bank, 167 U. S. 371; contra, as to same bank, Penrose v. Chaffraix, 106 La. 250. 2 Christ Church v. County of Phila., 24 How. 300. An act of the legisla- ture exempting property from tax- ation is not a "contract" unless there is a consideration for it, but a nude pact and revocable. Tucker v. Ferguson, 22 Wall. 527 ; West Wis- consin R. R. Co. v. Supervisors, 93 U. S. 595 ; Penna. R. R. Co. v. Bow- ers, 124 Pa. St. 183. But if the ex- emption be contained in an amend- ment to the charter accepted by the corporation, the exemption consti- tutes a contract binding on the state. University v. People, 99 U. S. 309 ; Commonwealth ». Pottsville Water Co., 94 Pa St. 516. 3 Erie Railway Co. v. Pennsylvania, 21 Wall. 492 ; Home insurance Co. v. City Council, 93 U. S. 116. 4 Salt Co. v. E. Saginaw, 13 Wall. 373. 5 Railway Co. v. Gill, 156 U. S. 649. See Tennessee v. Whitworth, 117 U. S. 139 ; Nichols v. New Haven and N. Co., 42 Conn. 103 ; State Board of As- sessors v. Morris & E. R. R. Co., 49 N. J. L. 193. A mortgage by a rail- road company of its charter, rights, privileges, and franchises, made in pursuance of authority to mortgage "its charter and works," does not 495
