Weekly North Carolina standard. [volume] (Raleigh, N.C.) 1850-1858, 1857-07-22

COurt on the Suoect OF taxing Oank dlVlQenoS we
could present nothing which would be more inter-
estng at this time to the sherifs and our citizens
generally.
THE STATE to the use Of the Public Treasurer rs
". d. Petsoay.
BATTLE, j. The Act which incorporates the
President and Directors of the Commercial Bank Of
Wilmington" (act of l846 ch. ~ after comforting
upon it the usua! powers, privileges ard immuntes
of bank, with a capital stock Of $500, ,OOO pro-
vides, in the 18th section, "that the President or
Cashier of said bank shall annually pay into the
treasury of the State, twenty five cents on each
share of said capital stock which may have been
subscribed for and paid in and the first payment of
the said tax shall be made twelve months after the
said bank shall have commenced operations" The
Revised Code, chapter 80, section 60 imposes a tax
OF three cents upon every dollar more than six dol
lars of net dividend profit upon money vested
in stocks of any kind, in shares of any incorpo
rated or trading company whether in or out of the
State; and herein shall be included all bank divi-
dends, bonds and certificates of debt of any other
State or country, or Of any public corporation
ated by this or any other State"
The question presented by the pleadings in this
is, whether the Legislature had the power after
the reservation Of twenty-five cents on each share
of the actual capital stock of the bank to impose
additional tax the dividends received by the in
dvidual stockholders.
The counsel for the defendant contends that had
islature of the bank charter created contract be-
tween the State and the corporation that, by fair
construction term of that contract that the
bank should pay into the public treasury twenty
five cents each share of its actual capital stock in
consideration Of which other or further tax should
ever be imposed upon it, or upon the dividends or
profits of any of the individual members who COM
posed it; and that the Constitution of the United
States prohibits the State from passing any law to
impair the obligation of the contract, or of any
scntial part it.
We admit that the grant by the Legislature of
charter to banking corporation creates a contract
between the State and tho corpo-atioa which brings
it under the protection Of the Constitution of the
United States. This conservative principle has been
repeatedly recognized by this Court in decisions, of
which it is necessary to refer only to the of
Mills o. Williams, IL Ire. Rep. 55s, and State o.
Matthews, Jones' R. 451. The same protection
which is extended to the whole contract must be
extended to every essential part of it; and if it be
term of the contract that the State shall not impose
any other tax upon the capital stock of the bank,
upon the dividends profits of the stockholders
than that which is expressly mentioned in the char
ter then, freely admit that the clause of the Rev.
enue Act, to which we have referred, is imperative
in its application to the holders of stock in the Com
mercial Bank of Wilmington. The question, then,
ceases to be one of constitutional power, and be-
comes one of construction merely. The question
which has been thus presented, has, in late years,
been often the subject Of discussion and decision
in the Supreme Court Of the United States, and in
the Courts of the several States, that it would be
work of supererogation to 60 into extended argu
ment upou it. We shall confne ourselves to brief
enunciation of the principles upon which our judg-
ment, in the present case, is founded.
1t is now well settled rule of construction that
" the grant of privileges and exemptions to cor
poration strictly construed against the corpora.
ton, and in favor of the public. Nothing passes
but what is granted in clear and explicit terms.
And neither the right of taxation any other
power Of sovereignty which the community have an
interest in preserving undimnished, will be held to
be surrendered, unless the intention to surrender IS
manifested in words too plain to be mistaken" Ohio
Life Insurance and Trust Company v. Debolt, l6
How. Gu. S. Rep. 4S5; Billings v. The Providence
Bank, 4 Peters, Rep. 561; Charles Ricer Bridge "
The Warren Bridge II Peters Rep. 545. 1t can
not be denied that the taxing power is one of the
highest and most important attributes of sovereign
ty. 1t is essential to the establishment, and the
continued existence of the government. Without
it, all political institutions would be dissolved, the
social fabric would be broken up, and civilization
would relapse into barbarsm No government can,
then, divest ITSELF altogether, of power which is
essential to its existence; it cannot commit political
suicide; but it is conceded that it may, by contract
for adequate consideration, bind ITSELF for long
shorter PERIOD not to exercise its taxing power
at ALL not beyond q certain extent upon certain
persons things. This is, however, often q dan.
gerous restriction upon its power, because the ne
cessities Of the government cannot always be fore
seen. In the changes and chances of time and
things, those who have charge of the administration
may have need of all the possible resources of the
country to save it from great disaster if not from
ruin. These considerations force upon the mind the
proprety, nay, the absolute necessity, of the rule
that every grant from the Legislature, by which the
integrity Of the power to raise revenue is impaired
must be construed strictly in favor of the public and
against the grantee. Let US apply this rule to the
case before US. The Legislature has granted char
ter to the bank in question, in which there is stip.
ulation for certain tax to be paid by the officers of
the bank, upon each and every share of its actual
capital stock, into the treasury of the State There
is no express provision that no other or higher tax
shall ever be exacted but it is contended that there
is an implied one to that effect Why should there
be 1t is certainly not in cases very analogous
to this. citizen takes grant from the State for q
tract Of land and pays the stipulated price, He has
Immediately to pay tax Of twelve cents upon every
hundred dollars value of it, by the general revenue
law of the STAGE. That is precisely the same if q
tax of that amount reserved in the grant. The
State cannot violate its contract contained in the
grant, any than it can violate its contract in
volved in the grant of bank-charter; and yet,
whoever doubted that the Legislature may, from
time to time increase the tax upon the land? The
same may be said of any taxable personal chattes
| which the State may sell to an individual. Why
should money vested in corporation be more fa.
| vored? It would be difficult to assign good rea.
son for the preference.
But if it be admitted that the capital stock of the
bank is by its charter, exempted from additional
taxation it by no means follows that the dividends
or profits of the individual stockholders shall be
exempt Bank stock or stock owned by individuals
in bank, is different thing from the capital stock
of the bank. By the first is meant d" the individual
interest in the dividends they declared, 8nG