
222 U.S. 448 (1912)
TREAT, TREASURER OF COCONINO COUNTY, ARIZONA,
v.
GRAND CANYON RAILWAY COMPANY.
No. 86.
Supreme Court of United States.
Argued December 8, 11, 1911.
Decided January 9, 1912.
APPEAL FROM THE SUPREME COURT OF THE TERRITORY OF ARIZONA.
*449 Mr. Elias S. Clark and Mr. William C. Prentiss, with whom Mr. Henry F. Ashurst was on the brief, for appellants.
Mr. Robert Dunlap, with whom Mr. T.J. Norton and Mr. Gardiner Lathrop were on the brief, for appellee.
*450 MR. JUSTICE HOLMES delivered the opinion of the court.
This is a bill brought by the Railway Company, the appellee, to restrain the collection of taxes from which it says that it is exempt. The facts in brief are these: A predecessor of the appellee, the Santa Fe and Grand Canyon Railroad Company, between August, 1899, and October, 1900, built over fifty-six miles of the road concerned. In July, 1901, this road was sold on foreclosure sale to purchasers *451 who organized the appellee and in August conveyed the road to it. The new company finished the road to the edge of the Grand Canyon and laid out stations and hotel grounds at the end. In 1906 the Territorial Board undertook to levy the tax complained of. The Supreme Court held that the appellee was exempt. 12 Arizona, 69; 95 Pac. Rep. 187; 12 Arizona, 117; 100 Pac. Rep. 438.
The railroad company was organized under Act No. 3, February 8, 1897, of the Territory (Laws 1897, p. 5) which authorized such corporations to be formed for the purpose of buying the property of railroads sold on foreclosure, and to buy and exercise "all the rights, privileges, franchises, immunities and powers" of their predecessors. By § 7 such corporations were to have all rights, immunities, &c., then or thereafter given to any railroad organized under the general laws; but by § 8 it was provided that the act should not be construed "to give to any corporation created under it, any exemption from taxation created by any existing or future exemption laws of the Territory of Arizona." The question does not stand on this act alone, however, and the cases discussed in Rochester Railway Co. v. Rochester, 205 U.S. 236, for by a later statute of March 16, 1899, No. 68 (Laws 1899, p. 79) "for the purpose of inducing and encouraging the construction of railroads" it was provided that the "property used or necessary in the construction and operation of railroads," of roads thereafter constructed, "whether owned or operated by a person or persons, association or railway corporation, his their or its successors or assigns," should be exempt from all manner of taxation for ten years from the date of the act. The Supreme Court held that this exemption was in rem, so to speak, went with the land, and extended to the assigns of the first road.
No doubt a strong argument can be made and was made for a different view, based on the passage before and on the date of the act of 1897 of statutes like that of 1899. *452 But the considerations that prevailed also are cogent and so obvious as not to need statement. Moreover, the question is not whether the later statute constituted a contract, Damon v. Hawaii, 194 U.S. 154, 160; Wisconsin & Michigan Ry. Co. v. Powers, 191 U.S. 379. The courts of the Territory have given to the railroad the rights that it claims, as against the territorial authorities seeking to levy the tax. The only question is whether any sufficient reason appears for not following the construction given to a local statute by the territorial court, when that construction is inherently reasonable, is at least the first to strike the mind, and is one that protects private rights. It is enough to answer that, on the principle followed so far as may be by this court, there is no such manifest error as to warrant us in reversing the decision below. Fox v. Haarstick, 156 U.S. 674, 679. English v. Arizona, 214 U.S. 359, 361, 363.
Judgment affirmed.
