Court Opinion

ID: 9841668
Source: CourtListenerOpinion
Date Created: 2023-09-22 20:01:18.208636+00
Date Added: 2024-06-11T09:02:04.179604
License: Public Domain

Mr. Justice CAMPBELL.
I dissent from the opinion of the court.
The question disclosed by the record, is contained in the sixtieth.section of an act of the General Assembly of Ohio, “to incorporate the State Bank of Ohio and other banking companies of that State,” adopted February, 1845.
The section-provides, that every banking company organized by the act, or complying with its provisions, shall semiannually, at designated days, set off to the State, six per cent, of the net profits for the six months next preceding, “ which sum or amount so set off shall be in lieu of all taxes to which such company, or the stockholders thereof, on account of stock owned therein, would otherwise be subject; ” and the cashier was required to report the amount to the auditor and to pay it to the treasurer; but in computing the profits of the company for the purposes *406aforesaid, the interest received on the certificates of the funded debt held by the company, of deposited with and transferred to the treasurer of the State, or to the board of control by such company, shall not be taken into the account.” I have extracted the last clause merely because it forms a- part of the section.
It is not usual for governments to levy taxes upon the certificates of their funded debt, and Ohio.had, in an early statute, forbidden taxation of hers. This clause was a cumulative precaution, wholly unnecessary.. Swan Stat. 747, § 5. .
The case lies in the solution of the question whether the clause directing the banks to set apart semiannually, upon the profits for the six months preceding, six per cent, in lieu of all other taxes to which the company or the stockholders would otherwise be subject on account of the stock, institutes an unalterable rule of taxation for the whole time of the corporate existence of these banks ? The General Assembly of Ohio thinks otherwise, and has imposed a tax upon the stock of the banks, corresponding with the taxes levied upon other personal property held in the State. The payment of this tax has been resisted by the banks. The Supreme Court of Ohio, by its judgment, affirms the validity of the act of the general assembly, and has condemned the bank to the payment. This judgment is the matter of consideration.
The section of the act above cited furnishes a rule of taxation, and while it remains in force a compliance with it relieves the banks from all other taxes to which they would otherwise be subject. Such is the letter of the section.
The question is, has the State of Ohio inhibited herself from adopting any other rule of taxation either for amount or mode of collection, while these banks continue in existence ? It is not asserted that such a prohibition has been imposed by the ( xpress language of the section. The term for which this rule of taxation is to continue is not plainly declared. The amounts paid according to it discharge the taxes for the antecedent six months. Protection is given in advance of.exaction.
The clause in the section, that this “ sum or amount, so set off, shall be in lieu of all taxes to which such company or the stockholders thereof would otherwise be subject,” requires an addition to ascertain the duration of the rule. It maybe completed in adding, “ by the existing laws for the taxation of banks,” or till otherwise provided by law,” or at “ the date of such apportionment or dividend.” Or, following the argument of the banks, in adding, “ during the existence of the banks.” Whether we. shall select from the one scries of expressions, leading to one result, or the expression leading to another altogether different, depends upon the rules of interpretation applicable to the subject.
*407The first inquiries are of the relations of -the parties to the supposed contract to its subject-matter, and the form in which it has been concluded. The sixtieth section of the act of 1845, was adopted by the General ■ Assembly of Ohio in the exercise of legislative powers, as a part its public law. The powers of that assembly in general, and that of taxation especially, are trust powers, held by them as magistrates, in deposite, to be returned, after a short period, to their constituents without abuse or diminution.
The nature of the legislative authority is inconsistent with an inflexible stationary system of administration. Its office is one of vigilance over the varying wants and changing elements of the association, to the end of ameliorating its condition. Every general assembly is organized with the charge of the legislative powers of the State; each is placed under the same guidance, experience, and observation; and all are forbidden to impress finally and irrevocably then ideas or policy upon the political body. Each, with the aid of an experience, liberal and enlightened, is bound to maintain the State in the command of all the resources and faculties necessary to a full and unshackled self-government. No implication can be favored which convicts a legislature of a departure from this law of its being.
The subject-matter of this section is the contributive share of an important element of the productive capital of the State to the support of its government. The duty of all to make such a contribution'in the form of an equal and apportioned taxation, is a consequence of the social organization. The right to enforce it is á sovereign right, stronger than any proprietary claim to property. The amount to be taken, the mode of collection, and the duration of any particular assessment or form of collection, are questions of administration submitted to the discretion of the legislative authority ; and variations must frequently occur, according to the mutable conditions, circumstances, or policy of the State. These conditions are regulated for the time, in the sixtieth section of this act. That, section comes from the law maker,-who ordains that the officers of certain hanking corporations, at stated periods, shall set apart from their property a designated sum as their share of the public burden, in lieu of other sums or modes of payment to which they would be subject; but there is no promise that the same authority may not, as it clearly had a right to do, apportion a different rate of contribution.- I will not say that a contract may not be contáined in a law, but the practice is not to be encouraged, and courts discourage the interpretation which discovers them. A common informer sues for a penalty, or a revenue officer makes a seizure under a promise that on conviction the recovery shall be shared, and yet the State *408-discha-rg"s the-forfeiture, or prevents the recovery by a repeal of the law, violating thereby no vested right nor impairing the obligation of any contract. 5 Cranch, 281; 10 Wheat. 246; 6 Pet. 404.
A captor may be deprived of his share of prize-money, pensioners of their promised bounty, at any time before their payment. 2 Russ. & M. 35.
Salaries may be reduced, offices having a definite tenure, though filled, may be abolished, faculties may be withdrawn, the inducements to vest capital impaired and defeated by the varying legislation of a State, without impairing constitutional obligation. 8 How. 163; 10 lb. 395; 3 lb. 534.; 8 Pet. 88; 2 Sanf. S. C. R. 355. The whole society is under the dominion of law, and acts, which seem independent of its authority, rest upon its toleration. The multifarious interests of a civilized State must be continually subject to the legislative control. General regulations, affecting the public order, or extending to the administrative arrangements of the State, must overrule individual hopes and calculations, though they may have originated in its legislation. It is only when rights have vested under laws that the citizen can claim a protection to them'as property. Rights do not vest until all the conditions of the law have been fulfilled with exactitude during its continuance, or a direct engagement has been made, limiting legislative power over .and producing an obli.gation. In this case it may be conceded that at the end of every six months the payment then taken is a discharge for all antecedent liabilities for taxes. That there could be no retrospective legislation. But beyond this the concessions of the section do not extend.
A plain distinction exists between the statutes which create' hopes, expectations, faculties, conditions, and those which form contracts. These banks might fairly hope that without a change in the necessities- of the State, their quota of taxes would not be increased; and-that while payment was punctually made the form of collection would not be altered. But the general assembly represents a sovereign, and as such designated this rule of taxation upon existing considerations of policy, without annexing restraints on its will, or abdicating its' prerogative, and consequently was free to modify, alter, or repeal the entire disposition..
I have thus far considered the sixtieth section of the act as a distinct act, embodying a State regulation with the view of ascertaining its precise limitatations.
I shall, however, examine the general scheme and object of ' the act, of which it forms a part, to ascertain whether a different signification can be given to it. Before doing so, it .is a matter of consequence to.ascertain on what principles the inquiry must be conducted.
*409Three cases occurred in this court, before either of the. members who now compose it belonged to it, in which taxation acts of the States or its municipal authorities, involving questions of great feeling and interest, were pronounced invalid. In the last of these the court said, “ that in a society like ours, with one supreme government for national purposes, and numerous State governments for other purposes, in many respects independent and in the uncontrolled exercise of many important powers, occasional interferences ought not to surprise us. The power of taxation is’ one of the most essential to a State, and one of the most extensive in its operation. The attempt to maintain a rule which shall limit its exercise is undoubtedly among the most delicate and difficult duties-which can devolve on those whose province it is to expound the supreme law of the land, in its application to individuals.” The court in each of these cases affirm, “ that the sovereignty of the State extends to every thing which exists by its authority, or is introduced by its permission, and' all on subjects of' taxation.” 2 Pet. 449; 9 Wheat. 738; 4 lb. 316.
The limitations imposed by the court in these cases excited a deep and pervading discontent, and must have directed the court to a profound consideration of the question in its various relations. The case of the Providence Bank v. Billings, 4 Pet. 514, enabled the court to give a practical illustration of sincerity with which the principle I have quoted was declared. A bank, existing by the authority of a State legislature, claimed an immunity from taxation against the authority of its creator.
The court then said “ however absolute the rigid, ol’ an individual (to property) may be, it is still in the nature of that right, that it must bear a portion of the public burdens, and that portion is determined by the legislature.” The court declared that the relinquishment of the power of taxation is never to be assumed. “ The community has a right to insist that its abandonment ought not to be presmned in a case ill which the deliberate purpose of the State to abandon it does not plainly appear.”
These principles were .reaffirmed, their sphere enlarged,.and their authority placed upon broad and solid foundations of constitutional law and general policy, in the opinion of this court, in the case of the Charles River Bridge, li Pet. 420. No opinion of the court more fully satisfied the legal judgment of the country, and consequently none has exercised more influence upon its legislation. The Supreme Court of Pennsylvania, speaking of these cases, says, “ they are binding on the • State courts not merely as precedents, and therefore, proving what the law is, but as the deliberate judgment of that tribunal *410with whom the final decision of all such questions, rests. The State courts have almost universally followed them. But no tribunal of the Union has acceded to the rule they lay down with ’a more earnest appreciation of its justice than did this court.” 7 Har. 144; 10 Barr, 142.
The Supreme Court of Georgia says, “the decision, based as it is upon a suoject particularly within the cognizance and jurisdiction of the Supreme Court of the United States, is entitled to the highest deference.” And the eminent Chief Justice of that court adds, “ that the- proposition it establishes commands my entire assent and approbation.” 9 Georgia Rep. 517; 10 N. H. 138 ; 17 Conn. 454; 21 Verm. 590 ; 21 Ohio, (McCook’s .Rep,) 564; 9 Ala. 235; 9 Rob. 324; 4 Corns. 419; 6 Gill, 288.
The chief justice, delivering the opinion of this court in that, case, quotes with approbation the principle, that the abandonment of the power of taxation ought not to be presumed-in a case in which the deliberate purpose to do so did. not. appear, and says, “ The .continued existence of a goveri ment would be of no great .valúe, if, by implications and presumptions, it was disarmed of the powers necessary to accomplish the ends of its creation, and the functions it Was designed to perform transferred to the hands of privileged corporations. The rule of construction announced by the court was not confined to the taxing power; nor is it so limited in the opinion delivered. On .the contrary it was distinctly placed on the ground that the interests of the commúnity were concerned in preserving, undiminished the power in question ; and whenever any power of the State is said to be surrendered or diminished, whether it be the taxing power pr any other affecting the public interest, the same principle applies, and the rule of construction must be the same.”
The court only declared those principles for which the commons of England had struggled for centuries, and which were only established by magnanimous and heroic efforts. The rules that public grants convey nothing by implication, are construed strictly in favor of the sovereign, do not pass any thing not described nor referred to, and when the thing granted is described • nothing.else passes; that general words shall never be so con-_ strued as to deprive him of a greater amount of revenue than he intended to grant, were not the inventions of the craft of crown lawyers, but were established in contests with crown favorites and impressed upon the administration, executive and judicial as checks for the people. The invention of crown lawyers was employed about such phrases, as ex speciali gratia, cerca scientia mero motu; and '¡ion obstante, to undermine the strength of such rules, and to enervate the force of wholesome statutes. A writer of the seventeenth century soys, “from the time of William *411Rufus, our kings have thought they might alienate and dispose of. the crown lands at will and pleasure; and in all ages, not only charters of liberty, but likewise letters-patent for lands and manors, have actually passed in every reign. Nor would it have been convenient that tlie prince’s hands, should have been absolutely bound up by any law, or that what had once got into the crown should have been forever separated from private possession. For then by forfeitures and attaintures he must have become lord of the whole soil in a long course of time. The constitution, therefore, seems to have left him free in this matter; but upon this tacit trust, (as he has all his other power,) that he shall do nothing which may tend to the destruction of his subjects. Hoivever, though he.be thus trusted, it is only as head of the commonwealth ; and the people of England have in no age been wanting to put .in their claim to that to which they conceived themselves to have a remaining interest; which claims are the acts of resumption that from time to time have been made in parliament, when such gifts and grants were made as become.burdensome and hurtful to the people. Nor can any government or State divest itself of the means of its own preservátion; and if our kings should have had an unlimited power of giving away their whole revenue, and if no authority could have revoked such gifts, every profuse prince, of which we have had many in this kingdom, would have ruined his successor, and the people must have- been destroyed with new and repeated taxes; for by our duty we are likewise to support the next prince. So that if no authority could look into, this, a nation must be utterly undone without any way of redressing' itself, which is against the nature and essence of any free establishment.
Our constitution, therefore, seems to have been, that the king always might make grants, and. that these grants, if passed according to the forms prescribed by the law, were valid and plead-able, against not only him, but his successors. However, it is likewise manifest that the legislative power has had an uncontested right to look into -those grants, and to make them void whenever they were thought exorbitant.”
Nor were 'they • careless -or indifferent to precautionary measures for the preservation of the revenues of the State from spoliation or waste. ' Official responsibility was established, and .the Lords High Treasurer and Chancellor, through whose offices the grants were to pass, were severally sworn “ that they would neither know nor suffer the king’s hurt, nor his disheriting, nor that the' rights of his crown be distressed by any means as far forth as ye may let; and if ye may not let it, ye shall máke knowledge thereof clearly and explicitly to the king with your true advice and counsel.”
*412The responsibility of these high officers, as the history of England abundantly shows, was something more than nominal; nor did the frequent enforcement of that, rule of responsibility, nor the adoption by the .judges of the stringent rules I have cited, protect the revenues of the State from spoliation. “ The wickedness of men,” continues this ’writer, “was either too cunning or too powerful for the wisdom of laws in- being. And from time to time great men, ministers, minions, favorites, have broken down the fences contrived and settled in our constitution., They have made a prey of the commonwealth, plumed the prince, and converted to their own use what was intended for the. service and preservation of the State. That to obviate this mischief, the legislative authority has interposed with inquiries, accusations, and impeachments., till at last such dangerous heads were reached.” ' Davenant’s Dis. passim.
Nor let it be said that this history contains no lessons nor instructions • suitable to our condition. The discussions before this court in the Indiana Railroad and-the Baltimore Railroad ca^es exposed to us the sly and stealthy arts to which State legislatures are exposed, and the greedy appetites of adventurers, for monopolies and immunities from the State right of-government. We cannot close our- eyes to their insidious efforts to ignore the fundamental laws and institutions of the States, and to subject the highest popular interests to their central boards of control and directors’ management.
This is not the time for the relaxation of those time-honored maxims, under the rule of which free institutions have acquired their reality, and liberty and property their most stable guaranties. The Supreme Court of Pennsylvania says, with great force, “ that if acts of incorporation are to be so construed as to make them imply grants of privileges,, immunities, and exemptions, which are not expressly given, every company of .adventurers may carry what they wish, without letting the legislature know their designs. Charters would be framed in doubtful or ambiguous language, on purpose to deceive those who grant them; and laws, which seem perfectly harmless on their face, and which plain men would suppose to mean no more than what, they say, might be converted into engines of infinite mischief. There is no safety to the public interest except in the rule which declares that the privileges not expressly granted' are withheld.” 7 Harris, 144.
The principles of interpretation, contained in these cases, control the decision of this, if applied to this act. Indeed, the argument of the plaintiff rests upon rules created for, and’ adapted to, -a class of statutes entirely dissimilar.- We were invited to consider the antecedent legislation of Ohio, in reference to its *413banks, the discouraging effects of that legislation, -and then to deal with this act, as a medicinal and curative measure• as an act recognizing past error, and correcting for the future the consequences. It is proper to employ this argument to its just limit. The legislation of Ohio since 1825 certainly manifests a distinct purpose of the State to maintain its powers over these corporations, in the matter of taxation, unimpaired. With a very few exceptions this appears in all the statutes. It is seen in the act of 1825, in the charters granted in 1834, in the acts of 1841-2-3, the two -last being acts embracing the whole subject-matter of banking. It is said this austerity was the source of great mischief, depreciated the paper currency of the State, and occasioned distress to the people, and that the change apparent in the act of 1845 was the consequence.
The existence of a consistent and uniform purpose for a long period is admitted. The abandonment of such a purpose, and one so in harmony with sound principles of legislation, cannot be presumed. If the application of these principles in Ohio was productive of mischief, we should have looked for an explicit and unequivocal disclaimer. We have seen that the act contains no renunciation of this important power. And it may be fairly questioned whether the ■ people of Ohio' would have sanctioned such a measure. I know of no principle which enables me to treat the sixtieth section of -this act as a remedial statute. Even the dissenting opinions in the Charles River and Louisa Railroad cases, which have formed the repertory from which the arguments of the plaintiffs have been derived, do not . in terms declare such a rule, and the opinions delivered by' the authority of the court repel such a conclusion. Nor can I consider the decision in 7 Ohio R.. 125 of consequence in this discussion. That case was decided upon a form of doctrine which after the judgments of this court, before cited, had no title to any place in the legal judgment of the country. The case was decided in advance of the most important and authoritative of those decisions. It is not surprising to hear that the judges who gave the judgment, afterwards renounced its principle, or that another State court has disapproved it, (7 Harris, 144.) or that it has not been followed in kindred cases, 11 Ohio, 12, 393; 19 lb. 110; 21 lb. (McCook,) 563,604, 626; and at the first time when it came up for revision it was overruled.
It remains for me to consider the act of 1845, its purpose and details, in connection with the sixtieth section of the act, to ascertain whether it is proper to assume that the State has relinquished its rights of taxation over the banking capital of the State.
The act of 1845 was designed to enable any number, rtot *414fewer than five persons, to form associations to carry on the business of banking.
The legislature determined the whole amount of the capital which should be employed under the act — that it should be distributed over the State, according to a specified measure of apportionment; that the bills to circulate as currency should have certain marks of uniformity, and be in a certain proportion to capital and specie on hand, and that a collateral security should be given for their redemption. The act contains measures for organization, relating to subscriptions for stock, the appointment of officers and boards of managemént; sections, of a general interest, referring to the frauds of officers, the insolvency of the corporations, their misdirection and forfeiture; sections containing explicit and clear statements of corporate right and privilege, the capacities they can exercise, the functions they are to perform, and the term of their existence.
. The act initiates a system of banking of which any five of its citizens may avail, and which provides for the confederacy of these associations under the general title, of the State Bank .of Ohio, and its branches; and their subjection to a board of control, appointed by them.
More than fifty banks have been formed under this act, and thirty-nine belong to the confederacy. Some of the banks over whose charters the State has reserved a plenary control, are by the act permitted to join it. It is said “ that the whole of this act is to be taken; the purpose of the act and the time of the act. It is a uniti” It will not' be contended that the fifty-first section of this act, by which this multitude of banking companies are adjudged to be corporations, with succession for twenty years, places every other relation established by the act, •beyond the legislative .domain for the same period of time. For there are in the act measures designed for organization and arrangement for the convenience and benefit of the corporators . only; there are concessions creating hopes and expectations out of which rights may grow by subsequent events; there are sections which convey present rights, or from -which rights may possibly arise in the form of a contract; there are others which enter into the general system of administration, affect the public order, and tend to promote the common security. Some of these provisions may be dispensed with by those for whose exclusive benefit they were made. Some may be altered, modified, or repealed, to meet other conditions of the public interest, and'some perhaps may not be-alterable except with the consent of the corporators ' themselves. To determine ' the class to. which one enactment or another belongs, we are referred to those general principles I have already considered. In this act, *415of seventy-five sections, which organizes a vast machinery for private banking, which directs the delicate and complex arrangements for the supply of a paper currency to the State, and determines the investment of millions of capital, we find this sixtieth, section. The act is enabling and permissive. It makes it lawful for persons to combine and to conduct business in a particular manner. It forms no partnership for the State,, compels no one to embrace or to continue the application of industry and capital according to its scheme. It grants licenses under certain conditions and reservations, but is nowhere coercive'. Among the general regulations is the one which directs the banks at the end of every six months to ascertain their net profits for the six months next preceding and to set apart six per cent. for. the State in the place of the other taxes or contributions to which they would be liable. But the legislature imposes no limit to its power, nor term to the exercise of its will, nor binds itself to. adhere to this or any other rule of taxation.
' The subject affects the public order and general administration. It is not properly a matter for bargain or barter; but- the enactment is in the exercise of a sovereign power, comprehending "within its scope every individual interest in the State. It is a power which every department of government knows that the community is interested in retaining unimpaired, and that every corporator understood its abandonment ought not to be presumed in a case in which the deliberate purpose to abandon it does not appear.”
I have sough' in vain in the sixtieth section of the act, in the act itself, and in the legislation and jurisprudence of Ohio, for the expression of such a deliberate purpose.
My opinion is that the Supreme Court of Ohio has faithfully applied the lessons inculcated by this court, and that its judgment should be affirmed.

Order.

This cause came on to be heard on the transcript of the record from the Supreme Court of Ohio, and was argued by counsel. On consideration whereof, it is' now here ordered, and adjudged by this court that the judgment of the said Supreme Court .of Ohio in this cause be, and the same is hereby reversed-with costs, and that this cause be and the same is hereby remanded to the said Supreme Court of Ohio for further proceedings to be had therein in conformity to the opinion of this court.