Marshall County Democrat. (Plymouth, Ind.) 1855-1859, 1858-01-07
Important Decision for Cities.

The case the Bank of the State OF Indiana, for
the use of her New Albany Branch. against the
CITY OF New Albany and her present Treasurer
was decided Yesterday III the Floyd Circuit Court
in favor of the city.
The court held that the 18th section Of the Bank
charter, far it cxcmpts its capital stock from
taxation for municipal purposes, null and void
The case came before the court Oh an applica
ton By the Bank. through her Attorneys, Judge
Smith and Judge OTTO. for injunction to re
strain the City Treasurer from collecting the taN
for the yerr 1851 upon her capital stock by distress
and sale.
The points raised BIZ the City Attorney upon de
murror We three: First, that the exemptine
clause Was contrary to article IL. section lst see
ond, that il is contrary to section ID, article lst
and third, That the whole section passed in vIo-
aun ef article 4, section l3th, OF the Constitution
/ Of Indiana.
sNe give below the opinion Of Judge Bcknell
/ The counsel for the Bank have prayed an appea
TO The Supreme Court:
SfIte Bank Us. City Of Nc,c 4iLany-On com
plajnt tor Injunction -faxation is an incident o
sovereignty In the absence of constitutional re
strction, the Legislature has right to tax, anC
also TO exempt from taxation, any property within
the jurisdiction of the State. There is nothing il
the nature of the capital stock OF bank, that ex
cludes il from the operation of the taxing power
but IL bank charter is a legislative contract and i
that contract contain an cXemI ton from taxation
a subsequent law imposing the tax Will be void
because 1t will impair the obligation of the con
tract. These principles have been settled by tn
( Supreme Court of the United States in well known
gases, and besides, the 9lst section of the Banl
Charter expressly provides that the charter shall
not be altered except by consent of the Bank.
Therefore, the exemption in the bank charter i
not repealed by the general power to tax contane,
in the city charter, notwithstanding the latter i
the later law.
The exemption is good, unless the Constitution
forbade the Legislature to consent TO it. The cx
emption is in substance as follows: "The capita
stock of the bank shall be subject to taxation 70
State and county purposes, the real estate anc
other property OF the bank i'll any city or town shall
be taxable for municipal purposes, but the capita
stock shall not be taxable for municipal purposes
Defendants insist that this exemption violates
section |, of article 10, OF the Constitution of In
diana. That section is as follows: 1.-The Gen
cral Assembly shall provide by law for uniform
and equal rate of assessment and taxation anC
shall prescribe such regulations as shall secure a
just valuation Tor the taxation OF all property boil
real and personal, excepting such only for munici
PAL educational, literary, scientific, religious, OF
charitable purposes, as may be specially exempted
by law W
1t seems to me to be the plain meaning of th.
language, that all the property, zeal and personal
in the State, must be taxed at just, uniform ant
equal rate, provided, however, that property de
voted to municipal, educational, literary, scientific
religious or charitable purposes, may by law bs
specially exempted from taxation. Ii was claimed
by the plaintiff that these provisions of the consti
tuition were msreiy directory, but our Supreme
Court has not regarded them as directory merely
In the case of Webb VS.. Baird, q Ind. Is, the Su
preme Court uses this language. The law which
requires gratuitous services from particular class
in effect imposes tax upon such class-clearly il
violation of the fundamental law, which provides
fora uniform aud equal rate OF assessment ant
taxation"
The plaintiff further claimed that if these provi
sions were not directory, they were intended t.
apply only to State taxes. II so. then the reason
Ing of the Supreme Court in Wcbbvs. Baird is d
well iounded but apart from that the language Of
the constitution is general call property, real AM
PERSONAL shall be taxed at a uniform and equal
rate, except certain specified property which may
be exempted" There are State taxes, count,
taxes, and city taxes, and no reason has been sus
gested nor can | discover any, why the general
provision to secure the taxation of all property.
real and personal, except certain specified sorts
OF which Bank capital stock moi one, should be
held operative to taxation for State purposes
and imperative as to taxation for county city