Ohio Life Insurance and Trust Company v. Debolt

THIS case was brought up from the District Court of the State of Ohio, in and for the county of Hamilton, by a writ of error issued under the 25th section of the Judiciary Act. The court was held by the Honorable John A. Corwin, Chief Justice of the Supreme Court of the State of Ohio, presiding, and the Honorable Alfred G. W. Carter, and the Honorable Edward Woodruff, and the Honorable John B. Stalle, Judges of the Court of Common Pleas, in and for the county of Hamilton; associates.

The following certificate, which was a part of the record, explains the nature of the case:

And thereupon, on motion of the counsel for the said The Ohio Life Insurance and Trust Company, defendants, it is ordered to be certified and made a part of the record that the said company did set up, by way of defence to the prayer of the bill of complainants, a certain act of the general assembly of this State, entitled An act to incorporate the Ohio Life Insurance and Trust Company, passed the twelfth day of February, in the year eighteen hundred and thirty-four; and also a certain other act of the general assembly, entitled An act to prohibit the circulation of small bills, passed the fourteenth day of March, in the year eighteen hundred and thirty-six; and thereupon claimed, that in virtue of the said acts, and of the instrument of writing, 'Exhibit B,' attached to its answer, the general assembly of this State had entered into a contract with the said company never to impose upon the property of the said company a greater or different burden of taxation than five per cent. upon its dividends of net profits, and that therefore the act of the general assembly, entitled An act to tax banks, and bank and other stocks, the same as other property is now taxable by the laws of this State, passed the twenty-first day of March, in the year eighteen hundred and fifty-one, impaired the obligation of a contract, and therein was repugnant to the Constitution of the United States; but the court decided that there was no conflict between the said several acts, for the reason that the said act passed the fourteenth day of March, in the year eighteen hundred and thirty-six, expired, and ceased to have any effect or operation as respects The Ohio Life Insurance and Trust Company, on the first day of January, in the year eighteen hundred and forty-three, when the power of the said company to issue bills of notes for circulation expired and ceased by the terms of the said act passed the twelfth day of February, in the year eighteen hundred and thirty-four; and that there was, therefore, at the date of the said act passed the twenty-first day of March, in the year eighteen hundred and fifty-one, no such contract, agreement, pledge, or understanding as the said company claimed; and that the said act passed the twenty-first day of March, in the year eighteen hundred and fifty-one, was, in that respect, constitutional and valid; and it was ordered to be further certified on the same motion, that the said company did likewise set up by way of defence to the prayer of said bill a certain act of the general assembly of this State, entitled An act to incorporate the State Bank of Ohio and other banking companies, passed the twenty-fourth day of February, in the year eighteen hundred and forty-five, and thereupon claimed that in virtue of the said last-mentioned act, and of the said act passed the twelfth day of February, in the year eighteen hundred and thirty-four, the general assembly of this State had entered into a contract with the said company not to impose upon the property of the said company a greater or different burden of taxation than six per cent. upon its dividends of net profit, until after the first day of May, in the year eighteen hundred and sixty-six, and that therefore the act of the said general assembly, entitled An act to tax banks, and bank and other stocks, the same as other property is now taxable by the laws of this State, passed the twenty-first day of March, in the year eighteen hundred and fifty-one, impaired the obligation of a contract, and therein was repugnant to the Constitution of the United States; but the court decided that the said act passed the twenty-fourth day of February, in the year eighteen hundred and forty-five, contained no pledge on the part of the State not to alter the amount, or the mode of taxation therein specified, but that the taxing power of the general assembly of this State over the property of companies formed under that act, was and is the same as over the property of individuals, and that there was, consequently, no such contract, agreement, pledge, or understanding as the said company claimed; and that whether the franchises of companies organized under the said last-mentioned act, could not be revoked, changed, or modified, the said act passed the twenty-first day of March, in the year eighteen hundred and fifty-one, did not, upon any construction, impair any right secured to such companies, by the said act passed the twenty-fourth day of February, in the year eighteen hundred and forty-five, and that the said act passed the twenty-first day of March, in the year eighteen hundred and fifty-one, was therefore a constitutional and valid law. And it is ordered to be certified, also, that the question of the validity of the said act passed the twenty-first day of March, in the year eighteen hundred and fifty-one, was material and necessary to the decision of this cause, and that the validity of the said act was drawn in question (in the manner and to the intent herein before specified) as being repugnant to the Constitution of the United States, and that the decision of the court was in favor of the validity of the said law. And it is further certified that this court is the highest court of law and in equity in the State of Ohio, in which a decision in this suit can be had.

The several acts mentioned in the above certificate, are stated in the opinions delivered by the judges of this court, and it is not necessary to set them forth in extenso.

The case was argued by Mr. Worthington and Mr. Stanberry, for the plaintiff in error, and by Mr. Spalding and Mr. Pugh, for the defendant in error.

The following points, on behalf of the plaintiff in error, are taken from the brief of Mr. Worthington, filed for himself and Mr. Mathews.

Points for Plaintiff.-I. Our first point involves the taxing power, the objects and subjects of taxation, and the manner and extent of its exercise. This power, under the Constitution of Ohio, of 1802, is legislative, and placed under the control of the general assembly, subject only to the few limitations put upon it by the instrument of its creation, and by the Constitution of the United States. Constitution of Ohio, of 29th of Nov. 1802, Art. 1, § 1; Ib. Art. 8, § 23; McCulloch v. State of Maryland, 4 Cond. Pet. Rep. 475, 486; Nathan v. Louisiana, 8 How. Rep. 82; Mager v. Grima et al. 8 Ib. 490; The People v. Mayor, &c. of Brooklyn, 4 Coms. Rep. 419, 423; Loring et al. v. The State of Ohio, 16 Ohio Rep. 590; Gazlay v. The State of Ohio, 5 Ib. 14; State of Ohio v. Hibbard, 3 Ib. 63; License Cases, 5 How. Rep. 516, 593; Loughborough v. Blake, 4 Cond. Pet. Rep. 660; ''Prov. Bank v. Billings,'' 4 Pet. Rep. 563; 1 Ohio State Rep. 102.

II. The only limitation placed upon the exercise of the taxing power is by the 23d section of the 8th article of the constitution of Ohio, which declares, 'That the levying taxes by the poll is grievous and oppressive; wherefore the legislature shall never levy a poll-tax for county or state purposes.' This being the only limit, the power can be exercised to any and every extent, for any and every purpose, and upon any and every object or thing, at discretion, subject only to the limitation given. Constitution of Ohio of 29th of November, 1802, Art. 8, § 23; McCulloch v. State of Maryland, 4 Cond. Pet. Rep. 475, 488; Osborne v. Bank United States, 5 Ib. 771; Nathan v. Louisiana, 8 How. Rep. 82; Mayer v. Grima et al. 8 Ib. 490; The License Cases, 5 Ib. 593; Gazlay v. State of Ohio, 5 Ohio Rep. 21; Loring et al. v. The State of Ohio, 16 Ib. 590; People v. Mayor, &c. of Brooklyn, 4 Coms. Rep. 426; 1 Ohio State Rep. 77, 102.

III. The taxing power comes to the legislature from the people, and is measured by the authority the people possess and can confer upon their government, and have actually conferred. Their authority being unlimited, as to themselves and their resources, and their exigencies without bounds, they can exercise this power at will and at discretion, without limit or measure, as to themselves and their property. And if they confer the authority they have upon their general assembly or legislative department of their government with or without limit, it can be exercised within the grant, just as the people themselves could have exercised it. McCulloch v. State of Maryland, 4 Cond. Pet. Rep. 484; Loughborough v. Blake, 4 Ib. 660; Osborne v. Bank United States, 5 Ib. 771; Weston et al. v. City of Charleston, 2 Ib. 465; Providence Bank v. Billings et al. 4 Ib. 559; Charles River Bridge v. Warren Bridge, 11 Pet. Rep. 546, 567; Vaughn v. Northup et al. 15 Ib. 4; ''Dobbins v. Com. of Erie County,'' 16 Ib. 447; License Cases, 5 How. Rep. 575, 588, 592, 627; West River Bridge v. Dix et al. 6 Ib. 523, 539; Passenger Cases, 8 Ib. 407, 421, 447, 530, 531; Nathan v. Louisiana, 8 Ib. 80, 82; Mayer v. Grima et al. 8 Ib. 490; The People v. Mayor, &c. Brooklyn, 4 Coms. Rep. 419; 1 Ohio State Rep. 10.

IV. The legislative power of a State, as given by its constitution, can be exercised only upon what belongs to the State in actual or constructive right, and can never extend to what belongs to another government. The same person or thing cannot at the same time be under the power of both. Vaughn v. Northup et al. 15 Pet. Rep. 1; McCulloch v. Rodrick, 2 Ohio Rep. 234; Rogers et al. v. Allen, 3 Ib. 488; Mager v. Grima et al. 8 How. Rep. 490; Holmes v. Remsen, 20 Johns. Rep. 254; Gordon v. Appeal Tax, 3 How. Rep. 150.

V. The charter of The Ohio Life Insurance and Trust Company, and the charter of the State Bank of Ohio, and other banking companies, are contracts obligatory upon the State of Ohio, in all their parts, and as such, protected by the Constitution of the United States, from violation or invasion, upon the part of the State of Ohio. Constitution of the United States, Art. 1, § 10; Fletcher v. Peck, 2 Con. Pet. Rep. 321; New Jersey v. Wilson, 2 Ib. 457; Terett et al. v. Taylor et al. 3 Ib. 256; Town of Pawlet v. Clark et al. 3 Ib. 408; Sturgis v. Crowninshield, 4 Ib. 415; Dartmouth College v. Woodward, 4 Ib. 538; McCulloch v. State of Maryland, 4 Ib. 470; Providence Bank v. Billings, 4 Pet. Rep. 559; Charles River Bridge v. Warren Bridge, 11 Ib. 540, 611; Gordon v. Appeal Tax, 3 How. Rep. 133; Planters Bank v. Sharp et al. 6 Ib. 318; West River Bridge v. Dix, 6 Ib. 531, 536, 539, 542; Paup et al. v. Drew, 10 Ib. 218; Woodruff v. Trapnall, 10 Ib. 204, 208, 214; Baltimore and Susquehanna Railroad Company v. Nesbit, 10 Ib. 395; East Hartford v. Hartford Bridge, 10 Ib. 535.

VI. The 25th section of the charter of The Ohio Life Insurance and Trust Company, and the 60th section of the charter of the State Bank of Ohio, and other Banking companies, are contracts, limiting the exercise of taxation upon the part of the State, and, as such, are protected by the Constitution of the United States from invasion. Constitution of the United States, Art. 1, § 10; Fletcher v. Peck, 2 Con. Pet. Rep. 231; New Jersey v. Wilson, 2 Ib. 457; ''Providence Bank v. Billings et. al.'' 4 Ib. 559; Charles R. Bridge v. Warren Bridge, 11 Ib. 540; Gordon v. Appeal Tax, 3 How. Rep. 133, 146; ''West Bridge v. Dix et al. 6 Ib. 531, 544; Woodruff v. Trapnell,'' 10 Ib. 207, 208; Mills v. St. Clair Co. 8 Ib. 580.

VII. The 25th section of the charter of The Ohio Life Insurance and Trust Company, being a contract prohibiting higher taxes upon the property or dividends of the Company, other than were, or might be levied on the property or dividends of incorporated banking institutions of the State, no higher tax could be levied upon the property, or dividends of the company than could be levied upon the property or dividends of incorporated banks of the State. A question arises as to the banking institutions here referred to. The reference must be to incorporated banks, existing at the time the charter was enacted, or that may exist at the time of the levy. In either case, no higher tax could be levied against the company than could be levied against such incorporated banks. If such banks be subject to different rates of taxation, then the prevailing rates of the greater proportion of such institutions, would control the rates of taxation against the company. If the former rule prevail, then the rate of taxation against the old banks in Ohio furnishes the rule against the company; but if the latter rule prevail, then the rate of taxation against the State Bank of Ohio, and other banking companies, under the 60th section of their charter of the 24th of February, 1845, furnishes the rule of taxation against the company. The act to authorize free banking, of 21st March, 1851, (49 Gen. Laws of Ohio, 41,) has no application to the present tax, because, aside from other considerations, no banks were organized under it when the tax against the company was authorized to be assessed, under the act of 21st March, 1851, to tax banks, &c. 49 Gen. Laws of Ohio, 56; 44 Ib. 108, 121, sec. 60; 48 Ib. 88.

VIII. All the banking institutions in operation in Ohio, at the time The Ohio Life Insurance and Trust Company was chartered, except the Commercial Bank of Cincinnati, which paid four per cent. on her dividends,-and the Franklin Bank of Cincinnati, which paid five per cent. upon her dividends-were, by their charters, not exempt from general taxation under a general law. And all the banks incorporated at the same session of the general assembly in which The Ohio Life Insurance and Trust Company was incorporated, were by their charters made subject to the tax imposed by the act of 12th March, 1831, to tax banks, & c., (Swan's Statutes, 916,) and such taxes as might be imposed by law. The Ohio Life Insurance and Trust Company prior to July, 1836, that is, in 1835, was taxed under the act of 12th March, 1831, if taxed at all, five per cent. upon her dividends. 3 Chase Stat. 2010 to 2083, c. 100-133, inclusive; 2 Ib. 913-924, c. 351, § 42, 1463, c. 655; 32 Local Laws of Ohio 76, § 21, Bank of Wooster; 32 Ib. 197, § 21, Bank of Massillon; 32 Ib. 283, § 6, Bank of Xenia; 32 Ib. 293, § 17, Bank of New Lisbon; 32 Ib. 299, § 6, Lafayette Bank of Cincinnati; 32 Ib. 407, § 22 Bank of Cleveland; 32 Ib. 412, § 6, Bank of Sandusky, 32 Ib. 419, § 6, Clinton Bank of Columbus.

IX. The Ohio Life Insurance and Trust Company must declare dividends on the first Mondays in January and July, annually, from the profits of said company, so as not to impair, or in anywise lessen the capital stock. These dividends are upon the entire profits of the company, and are not divisible, or declared separately from any special business of the company. Charter of The Ohio Life Insurance & Trust Co. § 27.

X. The Ohio Life Insurance and Trust Company, and all the banks in Ohio, except the Commercial Bank of Cincinnati, and the Franklin Bank of Cincinnati, being bound to report to the Auditor of State, under the act of 12th March, 1831, to tax banks, &c., were embraced in the act of 14th March, 1836, 'To prohibit the circulation of small bills,' as that act, in express terms, included all banks that made returns to the auditor of State under said act of 12th March, 1831, to tax banks, &c. 34 Gen. Laws of Ohio, 42, § 1, of the act to prohibit the circulation of small bills.

XI. All banks, including The Ohio Life Insurance and Trust Company, coming under the act of 14th March, 1836, 'to prohibit the circulation of small bills,' were, by the terms of the act and their charters, subject to a tax of twenty per cent. upon their dividends, unless they surrendered by the 4th July, 1836, as therein directed, their rights to issue or circulate notes or bills, less than $3, after 4th July, 1836, and $5, after 4th July, 1837; and 'then and in that case, the Auditor of State shall thereafter draw on such banks only for the amount of five per cent. upon their dividends, declared after such surrender.' The act of 14th March, 1836, repealed so much of the act of 12th March, 1831, to tax banks, &c. as was inconsistent with it. 32 General Laws of Ohio, 42; Mills v. St. Clair County, 8 How. Rep. 581.

XII. The Ohio Life Insurance and Trust Company having accepted the provisions of the act of 14th March, 1836, 'to prohibit the circulation of small bills,' and made the surrender in due form required by said act, is entitled to the benefit or consideration tendered by said act to obtain said surrender, and can be taxed only five per cent. upon her dividends declared after such surrender. This surrender upon her part, under said act, constitutes a valid contract between her and the State, and its invasion is prohibited by the Constitution of the United States. Gordon v. Appeal Tax, 3 How. Rep. 133; Woodruff v. Trapnall, 10 Ib. 204; ''Rich. R. R. Co. v. Lou. R. R. Co.'' 13 Ib. 81, 86, 90; Searight v. Stokes, 3 Ib. 167; Neil, Moore & Co. v. Ohio, 3 Ib. 742; Achison v. Huddleson, 12 Ib. 296; Huidekeper v. Douglas, 1 Con. Pet. Rep. 452; U. States v. Fisher, 1 Ib. 423; Sturgis v. Crowninshield, 4 Ib. 418, 481.

XIII. The Supreme Court of the United States, as a general rule, in the construction of the statutes and constitutions of the States, follows the construction of their courts, but when the construction of a statute in conflict with the Constitution of the United States is involved, then the rule is reversed, and the State courts must follow the construction given to the statute by the Supreme Court of the United States. Luther v. Bowen, 7 Howard's Rep. 1, 40, 219, 818; East Hartford v. Hartford Bridge Co. 10 Ib. 539; Strader et al. v. Graham, 10 Ib. 94; Elmendorf v. Taylor, 6 Con. Pet. Rep. 50; Swift v. Lyson, 16 Pet. Rep. 1; 2 Ib. 378.

XIV. The repeal of the act of 14th March, 1836, 'to prohibit the circulation of small bills,' by the act of 13th March, 1838, (36 General Laws of Ohio, 55,) does not annul or abrogate the contract of surrender of 22d June, 1836, made by The Ohio Life Insurance and Trust Company, by which she lost the right to issue and circulate small notes, and the State lost the right thereafter to tax her beyond five per cent. on her dividends. Woodruff v. Trapnell, 10 How. Rep. 204, 206, 207; East Hartford v. Hartford Bridge Co. 10 Ib. 535; ''Briscoe v. Bank of Com. of Ky.'' 11 Pet. Rep. 257; ''Charles R. Bridge v. War. Bridge,'' 11 Ib. 420; ''Balt. & Susq. R. R. v. Nesbitt,'' 10 How. Rep. 395; Satterlee v. Matthewson, 2 Pet. Rep. 412; Bronson v. Kinzie et al. 1 How. Rep. 311; Watson et al. v. Mercer, 8 Pet. Rep. 110; Fletcher v. Peck, 2 Con. Pet. Rep. 321; Neil, Moore & Co. v. Ohio, 3 Howard's Rep. 742; Acheson v. Huddleson, 12 Ib. 296; 10 Ib. 395, 402.

For the defendant in error, the points will be given as stated by Mr. Spalding, and also the third and fourth points of Mr. Pugh.

Mr. Spalding's points for defendant in error.

First. The taxing power is of such vital importance, and is so essentially necessary to the very existence of a State government, that its relinquishment or diminution for a fixed period, cannot be made the subject-matter of a binding contract between the legislature of a State, and individuals or private corporations. It is one of the highest attributes of sovereignty, and under our form of government, belongs to the people. They have lodged it in the hands of the law-making power, to be exerted for their benefit, not to be impaired or destroyed. It must of necessity always be exerted according to present exigencies, and therefore must necessarily continue to be held by each succeeding legislature undiminished and unimpaired.

Second. The act of the general assembly of the State of Ohio, entitled 'An act to incorporate the State Bank of Ohio and other banking companies,' passed February 24, 1845, is not a contract in the sense in which that term is used in the Constitution of the United States, Art. 1, § 10. It is a general law upon the subject of banking; it prescribes rules for the government of all the citizens of the State who may choose, within certain limits, to embark in the business of banking, and is as mandatory in its character as any law upon the statute book. These mandates are some of them enforced under the severest penalties known to the law.

Third. This act was made subject to alteration, suspension, and repeal, for, at the time of its enactment, February 24, 1845, there was a general law in full force in Ohio, which was passed March 7, 1842, entitled 'An act instituting proceedings against corporations not possessing banking powers and the visatorial powers of courts, and to provide for the regulation of corporations generally,' that provided in section nine as follows: 'That the charter of every corporation of every description, 'whether possessing banking powers or not,' that shall hereafter be granted by the legislature, shall be subject to alteration, suspension, and repeal, in the discretion of the legislature.' Ohio Laws, vol. 40, page 70.

Fourth. The 60th section of the act of February 24th, 1845, provides only a measure of taxation for the time being, and does not relinquish the right to increase the rate as the future exigencies of the State may require.

Fifth. The record shows (pages 24, 25) that the Supreme Court of the State decided nothing more than that the proviso to the act of March 14, 1836, ceased to affect the plaintiff when the power to issue bills for circulation ceased in January, 1843; and that the act of February 24, 1845, contained no pledge on the part of the State not to after the amount and mode of taxation therein specified. And in so doing, said court has done no more than to give a construction to the statutes of Ohio. With such a construction, this court has always manifested a reluctance to interfere. But more especially will it feel that reluctance when such interference may bring the acts of the State legislature in conflict with the Constitution of the United States.

Mr. Pugh's third and fourth points.

III. The Supreme Court of Ohio rightly construes the statutes.

1. The proviso to the first section of the act 'to prohibit the circulation of small bills,' passed March 14th, 1836, does not contain any stipulation or promise. It merely exempted such banks as complied with its terms, before a certain day, from the operation of the principal clause. Minis v. The United States, 15 Pet. Rep. 445; The Commissioners of Kensington v. Keith, 2 Penn. State Rep. 220; The Treasurer of Vermont v. Clark, 19 Vermont Rep. 129.

2. The proviso does not operate as a contract, or stipulation, merely because the consent of the banks is invoked. The Cincinnati, Wilmington, and Zanesville Railroad Company v. The Commissioners of Clinton County, 21 Ohio Rep. 77; The Cargo of the Brig Aurora v. The United States, 7 Cranch, 382.

3. The benefit of the proviso (if construed as a contract) only applied to the plaintiff in error, whilst it was authorized, by its charter, to issue bills or notes for circulation. Hildebrand v. Fogle, 20 Ohio Rep. 147; Bradley v. The Washington, Alexandria, and Georgetown Steam Packer Company, 13 Pet. Rep. 97; Synder v. Leibengood, 4 Penn. State Rep. 308; Washburn v. Gould, 3 Story, 162; Case v. Cushman, 3 Watts & S. 544; The Commercial Bank v. Pleasants, 6 Wharton, 375; Loring v. The City of Boston, 7 Metcalf, 409; Robinson v. Fiske, 25 Maine Rep. 405; Brown v. Slater, 16 Conn. Rep. 192; Porter v. Breckenridge, Hardin, 26; Sayre v. Peck, 1 Barbour's S.C.. Rep. 468, 469. And see 5 Cruise's Digest, 44, 45; Bozoun's Case, 4 Rep. 35; Case of the Abbot of Strata Mercella, 9 Rep. 30; Ford and Sheldon's Case, 12 Rep. 2; The Earle of Shrewsbury's Case, 9 Rep. 46.

4. The sixtieth section of the act 'to incorporate the State Bank of Ohio and other banking companies,' passed February 24th 1845, provides only a present measure and system of taxation, and does not relinquish, expressly or impliedly, the power of the State to alter the measure, as well as the system, at any future period. The Commonwealth v. The Easton Bank, 10 Penn. State Rep. 442; Bank of Pennsylvania v. The Commonwealth, 19 Penn. State Rep. 144; Brewster v. Hough, 10 New Hampshire Rep. 138; The Richmond Railroad Company v. The Louisa Railroad Company, 13 How. Rep. 71; Shorter v. Smith, 9 Georgia Rep. 517; Armstrong v. The Treasurer of Athens County, 16 Pet. Rep. 281; The Providence Bank v. Billings, 4 Ib. 514.

The following cases are distinguishable: Gordon v. The Appeal Tax Court, 3 Howard, 133; The Union Bank v. The State, 9 Yerger, 490; Johnson v. The Commonwealth, 7 Dana, 338; The State v. Berry, 2 Harrison, 80; Municipality Number One v. The Louisiana State Bank, 5 Louis. Annual Rep. 394; The Mayor of Baltimore v. The Baltimore and Ohio Railroad Company, 6 Gill, 288.

Statutes of Ohio, in pari materia, to be examined: Act 'To tax bank, insurance and bridge companies,' passed March 12th, 1831, section 1st, Swan's Statutes, 916, 917. Act 'For levying taxes on all property in this State according to its true value,' passed March 2d, 1846, sect. 10th, 44 General Laws, 90, 91. Act 'To exempt revolutionary soldiers from taxation,' passed February 8th, 1847, 45 General Laws, 51. Act 'To exempt from taxation a branch of the New York Methodist Episcopal Church Book Concern in Cincinnati and for other purposes,' passed February 17th, 1834, 32 Local Laws, 91. Act 'To incorporate The Milan and Richland Plank Road Company,' passed January 31st, 1845, section 9th, 43 Local Laws, 51. See, also, The Constitution of Ohio, adopted June 17th, 1851, article first and section second; article twelfth and sections second and third; article thirteenth and section fourth. Constitution of Ohio, adopted November 29th, 1802, article eighth and sections first, eighteenth, nineteenth, twenty-fourth, twenty-seventh, and twenty-eighth. As to the effect of these provisions in construing both the act of March 14th, 1836, and the act of February 24th, 1845, see Rex v. Loxdale, 1 Burrow, 447.

5. It does not follow, because the provision was made part of an act to incorporate the State Bank of Ohio and other banking companies, that the design was to create a permanent measure or system of taxation. The Preble County Bank v. Russell, 21 Ohio Reports, 313; The Bank of Columbia v. Okely, 4 Wheaton, 235; Young v. The Bank of Alexandria, 4 Cranch, 397; Crawford v. The Bank of Mobile, 7 Howard, 279; The Baltimore and Susquehanna Railroad Company v. Nesbit, 10 How. 396.

6. All grants in derogation of common right (including all exemptions from the payment of taxes) must be strictly construed. The Proprietors of the Charles River Bridge v. The Proprietors of the Warren Bridge, 11 Peters, 545, 546; The Providence Bank v. Billings, 4 Peters, 561; The United States v. Arredondo, 6 Peters, 738; Mills v. St. Clair County, 8 How. 581; Perrine v. The Chesapeake and Delaware Canal Company, 9 How. 185; The Cincinnati College v. The State, 19 Ohio Reports, 110; The Richmond Railroad v. The Louisa Railroad, 13 How. 81.

IV. The right of taxation is a preeminent and indispensable right, and cannot be so aliened by a mere statute or by any grant (other than a treaty or compact between sovereigns) as to prevent its resumption, by the legislature, whenever the public necessities require. And the legislature is the judge of public necessity in such cases. The West River Bridge Company v. Dix, 6 How. 507; Mills v. St. Clair County, 8 How. 584, 585; Butler v. The State of Pennsylvania, 10 How. 402; The People v. The Mayor of Brooklyn, 4 Comstock, 423; The Providence Bank v. Billings, 4 Peters, 563; Brewster v. Hough, 10 N. Hamp. R. 138; Mack v. Jones, 1 Foster, 393; Russell v. The Mayor of New York, 2 Denio, 474; Maleverer v. Spinke, 1 Dyer, 36, b; Coates v. The Mayor of New York, 7 Cowen, 585; The Brick Presbyterian Church v. The City of New York, 5 Cow. 538; Vanderbilt v. Adams, 7 Cow. 351, 352. Cases to be examined: The State of New Jersey v. Wilson, 7 Cranch, 164; Armstrong v. The Treasurer of Athens, 16 Peters, 290; Fletcher v. Peck, 6 Cranch, 87; The York and North Midland Railway Co. v. The Queen, 1 Ell. & B. 858.

Mr. Chief Justice TANEY.