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Timestamp: 2019-04-22 17:10:56+00:00

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Chapeze Wachen, J. D. Atchison, and Robert S. Todd, for defendants in error.
'Section 1. That all charters and grants of or to corporations, or amendments thereof, and all other statutes, shall be subject to amendment or repeal at the will of the legislature, unless a contrary intent be therein plainly expressed: provided, that whilst privileges and franchises so granted may be changed or repealed, no amendment or repeal shall impair other rights previously vested.
'Section 1. That shares of stock in state and national banks, and other institutions of loan or discount, and in all corporations required by law to be taxed on their capital stock, shall be taxed 75 cents on each share thereof, equal to $100, or on each $100 of stock therein owned by individuals, corportions or societies, and said banks, institutions and corporations shall, in addition, pay upon each $100 of so much of their surplus, undivided surplus, undivided profits or undivided accumulations as exceeds an amount equal to 10 per cent. of their capital stock, which shall be in full of all tax, state, county and municipal.
'Sec. 4. That each of said banks, institutions and corporations, by its corporate authority, with the consent of a majority in interest of a quorum of its stockholders, at a regular or called meeting thereof, may give its consent to the levying of said tax, and agree to pay the same as herein provided, and to waive and release all right under the act of congress, or under the charters of the state banks, to a different mode or smaller rate of taxation, which consent or agreement to and with the state of Kentucky shall be evidenced by writing under the seal of such bank and delivered to the governor of this commonwealth; and upon such agreement and consent being delivered, and in consideration thereof, such bank and its shares of stock shall be exempt from all other taxation whatsoever so long as said tax shall be paid during the corporate existence of such banks.
'Sec. 5. The said bank may take the proceeding authorized by section 4 of this act at any time until the meeting of the next general assembly: provided, they pay the tax provided in section 1 from the passage of this act.
'Sec. 6. This act shall be subject to the provisions of section eight ( 8), chapter sixty-eight (68), of the General Statutes.
The Citizens' Savings Bank accepted the Hewitt act in the mode provided, and thereafter paid the tax specified therein.
The state of Kentucky, in 1892, enacted a law, providing, among other things, for the assessment and taxation by the state, counties, and municipalities of banking and other corporations. This law was in absolute conflict with the Hewitt act, and by special provision, as well as by necessary legal intendment, operated, if the constitution had not already done so, to repeal the system of bank taxation established by the Hewitt act. Without detailing the scheme of taxation created by the law of 1892, it suffices to say that it organized a state board, whose duty it was to ascertain and fix the value of what was termed the 'franchises' of banks and other corporations, referred to in the law; and upon the amount so fixed the general state tax was levied. It was, besides, made [173 U.S. 636, 640] the duty of the board to certify its valuation of the property or franchises to the proper county or municipality in which the corporation was located, so that the sum of this assessment might become the basis upon which the local taxes should be laid. The city of Owensboro, where the Citizens' Savings Bank was located, established by ordinances the rate of municipal taxes for the years 1893 and 1894, and the sum so fixed was assessed upon the valuation of the franchises or property of the bank which had been certified by the state board in claimed conformity to the statute of 1892. The bank refused to pay these taxes, and a levy was made by the tax collector upon some of its property, and garnishment process was also issued against several of its debtors. Thereupon this suit was commenced by a petition, on behalf f the bank, to enjoin the city of Owensboro and its tax collector from enforcing the taxes in question.
First. That the board of state valuation had no power, under the constitution and laws of the state, to make an assessment for local taxation, and, if it had such power, had not exercised it lawfully, because the method of valuation pursued by it was so arbitrary as to cause its action to be void. Second. That no notice of the assessment had been given the officials, as required by the state law. Third. That the taxes violated the equality clause of the state constitution, because, by the method adopted in making the assessment, the property of the bank had been valued by a rule which caused it to be assessed at proportionately one- third more than the sum assessed against other property in the city of Owensboro, and by one-half more than the valuation at which the property of other taxpayers throughout the state was assessed. Fourth. That the taxes violated the state law and constitution, because based upon an assessment made by the state board, and not on an assessment made by the city; and that they were likewise illegal because the levy of the tax predicated [173 U.S. 636, 641] upon the assessment by the state board was dehors the powers of the city of Owensboro under the state laws. Fifth. That the taxes, moreover, violated the equality clause of the state constitution, because, as there were certain national banks doing business in the city of Owenboro against whom the franchise tax provided by the state law could not be enforced without a violation of the law of the United States, therefore these banks could not be taxed for the franchise tax, and not to tax them, while taxing the petitioner, would bring about inequality of taxation, and hence be a violation of the state constitution. Sixth. The taxes were expressly and particularly attacked on the ground that the Hewitt act, and the acceptance of the terms thereof, constituted an irrevocable contract between the state and the bank, exempting it from all taxation other than as specified in the Hewitt act, and therefore that the revenue act of 1892 and the levy of the taxes in question by the city of Owensboro violated the contract rights of the bank, which were protected from impairment by the constitution of the United States.
In further support of this ground the petition charged that, at the time the Hewitt act was passed, the bank had an irrevocable contract arising from section 7 of its charter, limiting taxation to the sum there specified, which right the bank had surrendered in consequence of the contract embodied in the Hewitt act. It was averred that this surrender of its contract right to enjoy the limited taxation conferred by its charter was a valid consideration moving between the bank and the state, operating to cause the Hewitt act to become a contract upon adequate consideration.
The opinion of the Kentucky court of appeals contained, not only the reasons applicable to the case we are now considering, but also such as were by it considered relevant to several other cases, which, it would seem, were either heard by that court at the same time, or were deemed by the court to present so many cognate questions as to enable it to embrace the several cases in one opinion. In so far as it related to this cause, the opinion fully examined and disposed of the question of contract, and the issues consequent thereon. An application on behalf of the appellant was thereafter filed, styled 'Petition for Extension of Opinion and Reversal.' This application, while declaring that the appellant could not assent to the conclusion of the court on the question of the existence of an irrevocable contract, protected from impairment by the constitution of the United States, asked no rehearing on that subject. The grounds for rehearing, which were elaborately pressed, related solely to certain questions of law which it was argued the record presented, and which it was claimed depended on the state law and constitution. There was no contention that these issues involved the constitution or laws of the United States.
All the assignments of error but the eighth and ninth relate to errors charged to have been committed by the court below in holding that there was no contract protected from impairment by the constitution of the United States. The eighth assignment asserts that there was error in allowing a penalty for the nonpayment of the taxes, because such penalty was by the state law imposed only upon corporations, and not on other taxpayers; and therefore the state law violated the fourteenth amendment to the constitution of the United States. The ninth assignment charges that there was error in holding the taxes to be valid, because the property or franchise of the bank on which the tax was levied was assessed at its full value, while other taxpayers in the state were assessed at not more than 70 per cent. of the value of their property; thus creating an inequality of taxation, equivalent to a denial of [173 U.S. 636, 643] the equal protection of the laws, in violation of the fourteenth amendment to the constitution of the United States.
We, at the outset, dispose of the eighth and ninth assignments, just referred to. The questions which they raise are not properly here for consideration. They are not presented by the record, nor do they result by necessary intendment therefrom. Indeed, they were excluded from the cause as federal questions, by the implications resulting from the pleadings. While it was charged that the penalties were unlawful, there was no allegation that their enforcement would violate any federal right. On the contrary, the petition and the amendments to it clearly placed the objection to the penalties on the ground that their enforcement would violate the state law and the state constitution. The distinction between the state right thus asserted and the federal right was clearly made when the only federal issue which was relied on-the impairment of the obligation of the contract-was alleged, for then it was plainly stated to depend upon a violation of the constitution of the United States. Even after the opinion of the court of appeals was announced, there was not a suggestion made in the petition for rehearing that a single federal question was considered by the parties as arising except the one which the court had fully decided, and as to which it was expressly declared a rehearing was not prayed. The assignments of error in question therefore simply attempt to inject into the record a federal question not lawfully therein found, never called to the attention of the state court by pleading or otherwise, and not necessarily arising for consideration in reviewing the judgment of the state court to which the writ of error is directed. But, after a decision by the court of last resort of a state, the attempt to raise a federal question for the first time is too late. Miller v. Texas, 153 U.S. 535 , 14 Sup. Ct. 874; Loeber v. Schroeder, 149 U.S. 580 , 13 Sup. Ct. 934. It is also clear that where it is disclosed that an asserted federal question was not presented to the state court, or called in any way to its attention, and where it is not necessari y involved in the decision of the state court, such question will not be considered by this court. Louisville & N. R. Co. v. Louisville, 166 U.S. 709 , 17 Sup. Ct. 725; Oxley Stave Co. v. Butler Co., [173 U.S. 636, 644] 166 U.S. 648 , 17 Sup. Ct. 709; Kipley v. Illinois, 170 U.S. 182 , 18 Sup. Ct. 550; Green Bay & M. Canal Co. v. Patten Paper Co., 172 U.S. 58 , 19 Sup. Ct. 97; Capital Nat. Bank of Lincoln v. First Nat. Bank of Cadiz, 172 U.S. 425 , 19 Sup. Ct. 202. We therefore decline to review the errors alleged in the eighth and ninth assignments, and, passing their consideration, are brought to the real federal controversy which arises on the record; that is, the question of irrevocable contract.
The conclusions stated in these cases are but the expression of many other adjudged causes. Railroad Co. v. Georgia, 98 U.S. 359 , 365; Hoge v. Railroad Co., 99 U.S. 348 , 353; Sinking Fund Cases, Id. 700, 720; Greenwood v. Freight Co., 105 U.S. 13 , 21; Close v. Glenwood Cemetery, 107 U.S. 466, 476 , 2 S. Sup. Ct. 267; Louisville Gas Co. v. Citizens' Gaslight Co., 115 U.S. 683, 696 , 6 S. Sup. Ct. 265; Gibbs v. Gas Co., 130 U.S. 396, 408 , 9 S. Sup. Ct. 553; Sioux City St. Ry. Co. v. Sioux City, 138 U.S. 98, 108 , 11 S. Sup. Ct. 226.
Undoubtedly, in the Bank Tax Cases, 97 Ky. 597, 31 S. W. 1013, the court of appeals of Kentucky decided that the Hewitt law created an irrevocable contract, and that the assembly of that state could not repeal, alter, or amend it without impairing the obligations of the contract, despite the existence of the act of 1856, and despite the circumstance that that act was in express terms incorporated in, and made part of, the Hewitt law. But the reasoning by which the court reached this conclusion is directly in conflict with the settled line of decisions of this court just referred to, and the case has been specifically overruled by the opinion announced by the Kentucky court of appeals in the cause now under review. It is not, and cannot be, asserted that the Bank Tax Cases were decided before the contract evidenced by the Hewitt law was accepted; hence it cannot be urged that such [173 U.S. 636, 648] decision entered into the consideration of the parties in forming the contract. It is not pretended that the bank whose rights are here contested was either a party or privy to the Bank Tax Cases. And even if such were the case, we must not be understood as intimating that the construction of the Hewitt act which was announced in the Bank Tax Cases would be binding in controversies as to other taxes between those who were parties or privies to those cases. On this subject we expressly abstain from now intimating an opinion. In determining whether, in any given case, a contract exists, protected from impairment by the constitution of the United States, this court forms an independent judgment. As we conclude that the decision in the Bank Tax Cases, above cited, upon the question of contract, was not only in conflict with the settled adjudications of this court, but also inconsistent with sound principle, we will not adopt its conclusions.
It was earnestly argued that, conceding the general rule to be that a reserved power to repeal, alter, or amend enters into and forms a part of all subsequent legislative enactments, nevertheless this case should not be controlled thereby-First, because of peculiar conditions which it is asserted existed at the time the Hewitt law was enacted; and, second, because of the terms of the act of 1856, by which the power to repeal, alter, or amend was reserved. The conditions relied upon and stated in argument as removing this case from the operation of the general principle are as follows: When the Hewitt law was enacted, there existed much uncertainty as to the power of the state of Kentucky to tax banks within its borders. There were banks claiming to be only subject to limited taxation because of charters enacted prior to the act of 1856. Again, there were other banks asserting a like right because of charters adopted since 1856, but which, it was said, were not dominated by that act. In consequence of these pretensions on behalf of state banks which were then undetermined, the national banks organized in the state were insisting that they were subject only to the rate of taxation to which the most favored state bank was liable, because it was urged that to tax such banks at a higher rate [173 U.S. 636, 649] would be a discrimination in favor of these banks and against the national banks, which was forbidden by the law of the Unites States. To add to this complexity, it is said the varying rate of local taxation was operating inequality among banks, and driving banking capital from the localities where the tax was highest; thus producting a public detriment. To assuage these difficulties and conflicts, to secure as to all banks, state and national, a uniform and higher rate of state taxation than that existing as to other property, it is asserted that the Hewitt law tendered to all banks a contract giving freedom from local burdens if a higher state tax was voluntarily paid. This must have been contemplated to be irrevocable, for otherwise the very object of the law could not have been accomplished. Conceding, arguendo, to the fullest degree, the situation to have been as described, the conclusion sought to be deduced from it is wholly unsound, since it disregards the fact that the contract proposed, and which was actually entered into, contained an express reservation of the right to repeal, alter, or amend. Indeed, the contention, when analyzed, amounts to this: that the plain letter of the contract should be disregarded upon the theory that the parties intended to make a different contract from that which they actually entered into. The distinction between the potentiality of a particular state of facts for the purpose of preventing the implication of the reserved power to alter, amend, or repeal, and the impotency of such facts to overcome the express and unambiguous provisions of the contract, at once demonstrates the confusion of thought involved in the contention. It was upon the distinction existing between the implication of the power to amend, alter, or repeal and its express statement in a contract that the case of New Jersey v. Yard, 95 U.S. 104 , proceeded, and that case is, therefore, wholly inapposite to the controversy here presented.
The argument predicated on what is said to be the peculiar language of the act of 1856 is this: That act, while reserving the right to amend or repeal 'all charters and grants of or to corporations, or amendments thereof, and all other statutes,' accompanied this reserved right with the restriction that it [173 U.S. 636, 650] should not be exercised where 'a contrary intent be therein plainly expressed [in the act creating the right], provided, that whilst privileges and franchises so granted may be changed or repealed, no amendment or repeal shall impair other rights previously vested.' The bank, it is asserted, had under its charter a right to be taxed only to a limited amount; and this, it is claimed, constituted a contract which was surrendered on the theory that the Hewitt law was irrevocable, and, if it were not so, then there was no surrender of the right under the charter, and therefore it now exists. This contention, however, but states in another form the claims which we have already disposed of. The charter was conferred on the bank subsequent to the act of 1856, and the limit of taxation stated in the charter was, therefore, subordinated to that act, and subject to the exercise of the power of amendment or repeal. True it is, in Franklin Co. Court v. Deposit Bank of Frankfort (June, 1888) 87 Ky. 387, 9 S. W. 212, the court of appeals of Kentucky decided that a grant, after the act of 1856, of an exemption from taxation for a designated time, signified such a plain manifestation of the will of the legislature that the grant should not be subject to alteration or amendment, that the right so conferred was, therefore, not submitted to the paramount power of repeal or amendment reserved by the act of 1856. This decision, however, was rendered long after the enactment of the charter of the bank whose rights are now before us, and has been expressly overruled by the court of appeals in the case which we are reviewing. The doctrine settled by the adjudications of this court is this: That the mere grant, for a designated time, of an immunity from taxation, does not take it out of the rule subjecting such grant to the general law retaining the power to amend or repeal, unless the granting act contain an express provision to that effect. The doctrine on which the argument depends is that any grant for a designated time is, by implication, taken out of the general rule, even although there be no express provision to that end in the act making the grant.
The assertion that, wherever it is stated in a legislative grant [173 U.S. 636, 651] or charter that it is to last for a given period of time, therefore such provision is a plain manifestation of the intention of the legislature t at the grant or charter shall not be repealed or amended for the time for which it was declared that it should exist, is fallacious, since it overlooks the consideration that the limit of time fixed for the duration of the charter or grant, like every other provision therein, is qualified by the reserved power to alter, amend, or repeal. It hence results that where, in a charter or grant enacted, when there is a general statute reserving the power to repeal, alter, or amend, a time is stated, the granting act must be read just as if it declared that the charter or grant should exist for a designated time, unless sooner repealed, altered, or amended. Indeed, reduced to its final analysis, the argument that because, in a grant or charter, a time is designated for its duration, it cannot, therefore, until the expiration of such time, be repealed, altered, or amended, is equivalent to saying that the reserved power cannot be exercised in any case of contract; for, if every case of charter or grant where a time is fixed, either expressly or by necessary construction, in the charter or grant, is taken out of the reach of the reserved power, it would follow that only those charters or grants which were determinable at will would come under the control of the power reserved. But to say this simply amounts to declaring that the reserved power applies and can be enforced only in those cases where it would be entirely unnecessary or useless to do so.
The source of the reservation by many of the states, in general laws, of the power to amend, alter, or repeal, was fully reviewed in Greenwood v. Freight Co., 105 U.S. 13 , where it was shown that such legislation had its origin in the purpose to provide for a case exactly like the one before us. Referring to the decision in Dartmouth College v. Wood-ward, 4 Wheat. 518, the court, through Mr. Justice Miller, said (page 20): 'It was, no doubt, with a view to suggest a method by which the state legislatures could retain in a large measure this important power [the power to repeal or amend] without violating the federal constitution that Mr. Justice Story, in his concurring opinion in the Dartmouth College [173 U.S. 636, 652] Case, suggested that, when the legislature was enacting a charter for a corporation, a provision in the statute reserving to the legislature the right to amend or repeal it must be held to be a part of the contract itself, and the subsequent exercise of the right would be in accordance with the contract, and could not, therefore, impair its obligation. And he cites with approval the observations we have already quoted from the case of Wales v. Stetson, 2 Mass. 143. It would seem that the states were not slow to avail themselves of this suggestion. ...' As, then, the limitation in the charter of the bank was subject to repeal by the legislature, it cannot be claimed that such exemption was vested in the bank, and was, therefore, subject to be reinstated if the Hewitt act was not an irrevocable contract, even if the correctness of the claim that this result would legally arise if the charter had been an irrevocable contract be, arguendo, conceded.
It is urged that, as the act of 1856 provides that other rights previously vested could not be taken away by the repealing act, therefore the exemption from taxation could not be withdrawn; but this is a mere form of restating the arguments already examined, and is tantamount to the reassertion of the proposition that the limited taxation established by the Hewitt act, or the one conferred by the charter, could not be taken away at all. Referring to this subject, this court, in Greenwood v. Freight Co., ubi supra, said (page 17): 'Such an act may be amended; that is, it may be changed by additions to its terms, or by qualifications of the same. It may be altered by the same power, and it may be repealed. What is it that may be repealed? It is the act of incorporation. It is this organic law on which the corporate existence of the company depends which may be repealed, so that it shall cease to be a law; or the legislature may adopt the milder course of amending the law in matters which need amendment, or altering it when it needs substantial change. All this may be done at the pleasure of the legislature. That body need give no reason for its action in the matter. The validity of such action does not depend on the necessity for it, or on the soundness of the reasons which prompted it.' In [173 U.S. 636, 653] considering what constituted vested rights, the court clearly pointed out that rights of this character did not embrace mere privileges or franchises conferred by the granting act, and such rights obviously came within the power to repeal and amend, and were not within the category of those taken out of the reach of such power.
In the Greenwood Case the reserved power was, by the general statute, authorized to be exercised 'at the pleasure of the legislature.' But this qualification was decided in Hamilton Gaslight & Coke Co. v. Hamilton City, 146 U.S. 271 , 13 Sup. Ct. 90, to be no more comprehensive than the power which would be implied from a general law simply reserving the right to repeal, alter, or amend.
Finally, it is said that as, at the time the Hewitt act was passed, the rate of state taxation was lower than the sum of taxation fixed by that act on the banks giving their assent to it, therefore this increased sum over and above the amount of state taxes paid by other taxpayers to the state constituted a consideration received by the state, and created a vested right of such a nature that the state could not repeal the Hewitt act without providing for the refunding of the sum paid the state in excess of the state taxes paid by other taxpayers. But this disregards the patent fact that, while the amount of the state taxes paid by the bank under the Hewitt act was larger than the taxes paid by other taxpayers to the state, the bank was, by the Hewitt act, relieved from all obligation to pay county and municipal taxes. As the bank had, at the time of the Hewitt act, no contract limiting the taxing power of the state which could not have been repealed, it therefore could have been subjected by the state to the same rate of county and municipal taxes resting upon other taxpayers. It is not asserted that if this legislative power had been exerted, and the bank been compelled to pay the same amount of taxation for all governmental purposes that other property owners were obliged to pay, it would not have contributed more than it was called upon to do under the Hewitt act. The claim, therefore, amounts to this: That because the Hewitt act relieved the bank from a part of the burden of taxation which rested upon the other taxpayers of the state, and this relief from burden was purely the result of the voluntary act of the lawmaker, the power to remove the privilege cannot be exerted without refunding to the bank a portion of the lesser burden which it has paid. Thus to analyze the proposition is to answer it.
Our conclusion being that there was no irrevocable contract protecting the bank from taxation, and therefore that the taxing law of Kentucky did not violate the contract clause of [173 U.S. 636, 655] the constitution of the United States, it follows that the decree below must be, and it is, affirmed.
The cogency with which the opinion of the court is expressed is calculated to awaken a distruct as to the soundness of any conflicting views; but the very fact that the court to which this writ of error was issued, only two years before the decree was pronounced which this court has affirmed, came to a precisely opposite conclusion upon the same state of facts, indicates, at least, that the question is not free from a reasonable doubt. Indeed, the judiciary of Kentucky appears to be about equally divided upon the subject.
The dominant question in the case is whether the written acceptance by the bank of the proposition contained in the act of 1886, known as the 'Hewitt Act,' constituted a contract which neither the legislature nor the bank could repudiate at pleasure. As stated in the opinion of the court, the bank was chartered in 1884, with a provision that its life should continue for 30 years, and that a payment of 50 cents on each $100 of stock should 'be in full of all tax and bonus thereon of every kind.' This charter fell under the provisions of the prior act of 1856, declaring that all such charters should be subject to amendment or repeal at the will of the legislature. There seems, however, to have been some dispute as to whether, under the power to amend, it was within the competency of the legislature to increase this tax during the life of the charter, without a violation of the fourteenth amendment to the federal constitution. To settle this question beyond peradventure, the legislature, in 1886, inaugurated a new policy, and in the Hewitt act made a distinct proposition that, if the banks and corporations interested, with the consent of the majority in interest of their stockholders, at a regular meeting thereof, should give their consent to the levying of a tax of 75 cents on each share equal to $100, and agree to pay the same as therein provided, and would agree to waive and release all [173 U.S. 636, 656] right under the act of congress, or under their charters, to a different mode or smaller rate of taxation, and should evidence such consent by writing under the seal of the bank delivered to the governor of the commonwealth, 'such bank and its shares of stock should be exempt from all other taxation whatever, so long as said tax shall be paid during the corporate existence of such bank.' There was a further provision that, in case of refusal to enter into this compact, the bank should be assessed as directed by a previous section, and such state, county, and municipal taxes imposed as were imposed on the assessed taxable property in the hands of individuals.
It is true that this act was made expressly subject to the prior act of 1856, declaring that all charters and grants to corporations should be subject to amendment or repeal at the will of the legislature; but this very act limited the power to repeal and amend to cases where a 'contrary intent' was not 'therein plainly expressed.' In other words, that while such charters or grants were generally subject to amendment or repeal, if language were used by the legislature indicating clearly an intention that the privileges and franchises therein granted should not be subject to amendment or repeal, it was perfectly competent to do so, and the stipulation was binding. There was a further provision that no amendment or repeal should 'impair other rights previously vested.' How, then, could such intent to limit its own powers be manifested by the legislature? It will probably be conceded that, if the grant or charter contained a clause to the effect that any particular privilege therein granted should not be subject to amendment or repeal, it would be sufficient; but it seems to me equally clear that if it contained other language plainly evincing an intent that a particular clause should be irrepealable for a certain length of time, or if it contained a proposition from which the legislature could not withdraw without a breach of faith towards those who had accepted its terms, it could not be intended that such con ract, if accepted, should be subject to repudiation. Conceding to its fullest extent the doctrine of the Dartmouth College Case, that the charter of [173 U.S. 636, 657] a corporation is a contract, it follows that so far as it is a charter it is, under the act of 1856, subject to amendment or repeal; but so far as the legislature departs from the main object of the charter of granting privileges and franchises, and invites its corporations to enter into written contracts with it, requires such contracts to be executed in an unusual form, and to receive the consent, not only of the directors, but of a majority of its stockholders, and, further, that they be made under seal and delivered to the governor of the commonwealth, that then it evinces an intent, as clearly as language can express it, that such contract shall be binding, and that, in respect thereto, it yields up its right to amendment or repeal. New Jersey v. Yard, 95 U.S. 104 . To hold that a contract thus solemnly entered into may be repudiated at the next session of the legislature is practically to say that the legislature may set a trap for its corporations, and that, after it has enticed them into it by the offer of more favorable terms than they otherwise could obtain, it may repudiate its own obligations, without restoring to the corporations what it had previously induced them to give up.
The difficulty with the position of the court is that it renders it impossible for the commonwealth to enter into a contract with one of its own corporations which it may not repudiate at the next session of its legislature. If capital may be enticed into the state under its solemn promise that certain privileges shall be granted, or that it shall be subject to a certain specified rate of taxation, which may be withdrawn at any moment, it can scarcely complain if foreign capital refuses to be tempted by such illusory offers. I see no reason why, under the decision of the court, if the legislature should enter into a compact with one of its own corporations to perform a great public work, it may not, after capital has been largely invested therein, and the work entered upon, under the guise of amending the grant, abrogate its contract and leave the corporation practically defenseless. Indeed, it seems to me that it is not creditable to the legislature to impute to it an intent to subject corporations, which had accepted the benefits of the Hewitt act, to the rate of taxation prescribed by the act of 1892 [173 U.S. 636, 658] providing for wholly different mode of assessment and taxation, and that it is more reasonable to assume that the taxing officers of the city of Owensboro exceeded their authority in attempting to exact the taxes in question.
The cases cited in the opinion of the court are not in conflict with the position here assumed. In Tomlinson v. Jessup, 15 Wall. 454, it was decided that an act of the legislature of South Carolina, passed in 1851, incorporating the Northeastern Railroad Company, and a subsequent act passed in 1855, providing that its stack should be exempt from taxation during the continuance of the charter, were subservient to a general act passed in 1841, reserving the right to amend, alter, or repeal every such charter, unless the act granting such charter should, in express terms, except it. As the amended charter in question contained no clause excepting it from the provisions of the general act of 1841, it was held that its property might be taxed by subsequent legislation. The case differs from the one under consideration, in the fact that the amended charter contained no exception taking it out of the act of 1841, and that there was no express contract in that charter that no tax should be subsequently imposed. There was nothing to indicate that this charter was not intended to fall within the restrictions of the act of 1841.
In Railroad Co. v. Maine, 96 U.S. 499 , there was a similar general law, passed in 1831, declaring any act of incorporation liable to be amended, altered, or repealed at the pleasure of the legislat re, unless there was 'an express limitation or provision to the contrary.' It was held that an act of the legislature passed in 1856, authorizing corporations to consolidate and form a new corporation, was an act of incorporation of a new company, and, there being in this act no limitation upon the power of amendment, alteration, and repeal, the state retained the power to alter it in all particulars, constituting the grant of corporate rights, privileges, and immunities to the new company, and that a limitation upon the taxing power of the state prescribed in the charters of the old companies ceased upon their consolidation, though it was said that 'rights and interests acquired by the company, not constituting a part of [173 U.S. 636, 659] the contract of incorporation, stand upon a different footing.' In its application to this case it is subject to the same criticism as that of Tomlinson v. Jessup.
The case of Water Co. v. Clark, 143 U.S. 1 , 12 Sup. Ct. 346, arose under the same act of Kentucky of 1856. In that case an immunity from taxation, conferred upon the water company by an act passed in 1882, was withdrawn by a subsequent act passed in 1886, and it was held that, as the act of 1882 contained no clause that 'plainly expressed' an intention not to exercise the power reserved by the statute of 1856 to amend or repeal, at the will of the legislature, all charters or grants to corporations, the act was subject to that general statute, for the very reason that there was no 'contrary intent' 'plainly expressed.' The opinion harmonizes completely with the position here assumed, and contains a clear inference that, where a subsequent act plainly evinces an intention on the part of the legislature that the general statute of 1856 should not apply, such intention will be respected and will control the operation of the general statute. If the Hewitt act does not evince such intention, of course the whole argument falls to the ground, but it seems to me that its language in this particular is too clear to be disregarded.
Such intent was found by this court in New Jersey v. Yard, 95 U.S. 104 , in the fact that there was in the supplemental charter of the corporation, precisely as in the Hewitt act, (1) a subject of dispute, and fair adjustment of it, for a valuable consideration, on both sides; (2) the contract assumed, by legislative requirement, the shape of a formal written contract; (3) the terms of the contract, that 'this tax shall be in lieu and satisfaction of all other taxation or imposition whatsoever by or under the authority of this state or any l w thereof,' excluded, in view of the whole transaction, the right of the state to revoke it at pleasure. There was the same provision as in the Hewitt act, that the section providing for a commutation of taxes should not go into effect, or be binding upon the company, until it had signified its assent under its corporate seal, and filed it in the office of the secretary of state. The language of Mr. Justice Miller is so pertinent that I cannot forbear quoting the following paragraph: 'Can it be believed that it was intended by either party to this contract that, after it was signed by both parties, one was bound forever, and the other only for a day? That it was intended to be a part of the contract that the state of New Jersey was, at her option, to be bound or not? That there was implied in it, when it was offered to the acceptance of the company, the right on the part of the legislature to alter or amend it at pleasure? If the state intended to reserve this right, what necessity for asking the company to accept in such formal manner the terms of a contract which the state could at any time make to suit itself?' I find it difficult to see how that case and the one under consideration can stand together.
I desire only to add that in Com. v. Farmers' Bank of Kentucky, 97 Ky. 590, 31 S. W. 1013, it was held, by the same majority of the court which subsequently overruled it, that there existed in the Hewitt act 'every element of a contract between the state and the banks, and, with such a consideration as will uphold it, no reasonable doubt can be entertained that such was the purpose of the parties to it.' 'We are satisfied,' said the court, 'after a careful consideration of this question, that the parties making the contract never contemplated or intended that the act of 1856 should apply to this contract after its acceptance by the banks, and that such an acceptance was necessary to make the contract complete between the parties.' The argument is a powerful demonstration of the existence of an irrevocable contract; but the court of appeals subsequently overruled this decision, and this court has affirmed its action, and in addition thereto has pronounced an opinion seemingly so inconsistent with New Jersey v. Yard as to practically amount to an overruling of that case. These cases, however, are but a reaffirmance of a [173 U.S. 636, 662] principle which the same court had previously laid down in Commissioners of Sinking Fund v. Green & Barren River Nav. Co., 79 Ky. 73, and Com. v. Owensboro & N. R. Co., 95 Ky. 60, 23 S. W. 868, that a distinct contract contained in a charter was not subject to the act of 1856. Indeed, I do not understand upon what other theory a positive acceptance of the taxation imposed by the Hewitt act was required of these banks.

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