author:
Brinkerhoff, J.
      Bartley, C. J.,

text:
    Elias Kumler, and others v. Henry Traber, Treasurer of Butler County.
   Brinkerhoff, J.

This case, arising out of a grant to, and a leasing of lands by-the Miami University, resting, as it does, on a similar state of facts and pleadings, and involving the same questions as the preceding case of Matheny v. Golden, there will be a like decree for complainants.

Bartley, C. J.,

dissented.

Upon the general question, upon which the decision of this case is made, I have given my views at length, in the foregoing case of Matheny v. Golden, coming to the following conclusions:

1st. That the circumstances of the case disclose no relation between the State and the lessees, which, properly construed, can constitute a contract on the part of the State with the lessees ; and that if a contract arise in the case, it must be between the State and the corporation.

2d. That a legislative exemption from taxation is not a competent subject matter of sale, or contract.

3d. That the power of taxation, and the power of altering and repealing existing laws, are essential functions of sovereignty, a surrender or abridgment of which, by legislative act, cannot be made the subject matter of contract.

4th. That the legislative power of the State, including the power of taxation, as well as the power of altering and repealing existing laws, must remain perfect and complete in the general assembly, at every session, as a continuing body. And one legislature cannot, by the authority of the constitution, in the enactment of laws, provide by contract against their amendment or repeal by a subsequent legislature.

5th. The power of amendment and repeal, not being expressly prohibited in the law, its surrender (if at all feasible) cannot be derived from mere implication or construction.

6th. If this legislative exemption from taxation could constitute a contract, it would be subject to the necessary incidental condition, that the power could be resumed by the State whenever the general assembly should determine that public policy required it, and repeal the exemption.

7th. By the adoption of the new constitution, the people of the State, in the exercise of their original sovereignty, resumed the power of taxation (if it had been to any extent impaired by legislative relinquishment), by the express provision in the constitution requiring taxation to be by an equal and uniform rule on all property in the State.

This case differs from the case of Matheny v. Golden, in the following particulars, to wit:

1st. The exemption from taxation, in this case, is a simple exemption, unaccompanied Toy any language of perpetuity, which is made a material and controlling circumstance in the opinion of the majority of the court, in the other case. Section 13 of the “ act to establish the Miami University.”

2d. By the 15th section of the law, legislative control over the powers of the corporation is expressly reserved.

3d. By the 10th section of the law, it is expressly provided, as to the extent of the rights and privileges of the lessees, that the said tenants or lessees shall enjoy and exercise all the rights and privileges which they would be entitled to enjoy, did they hold the said lands in fee simple, any law to the contrary notwithstanding.”

4th. And the exemption from taxation, by the express terms of the 13 th section of the law, is only applicable to the lands as appropriated and vested in the corporation,” and, therefore, an exemption simply of the corporation from taxation on its interest in the lands, and not an exemption of the lessees from taxation on their interest.


source: Caselaw Access Project

author: Bowen, J. Bartley, C. J., Brinkerhoee, J.,

license: Public Domain

text:
    The State of Ohio, ex rel. William D. Morgan, Auditor of State, v. Eliakim H. Moore, Auditor of Athens County.
    The Supreme Court of the United States, having decided that the 60th section of the act to incorporate the State Bank of Ohio, and other banking companies, passed Feb. 24, 1845, prescribes a rule of taxation for companies that organize under said act, which cannot, without the consent of the corpora-tors, be changed by future legislation, this court will be governed by such decision, in cases arising under said section.
    The tax law of 1852, in requiring of a bank, organized under said act of 1845, payment of a rate of taxes different from that provided for in the 60th section of the charter, is unconstitutional; and the county auditor may, in that particular, disregard it.

      Motion for a writ of peremptory mandamus.
    The Attorney Q-eneral for the relator.
   Bowen, J.

This is a motion for a peremptory mandamus, filed by the Attorney General, at the instance of the Auditor of State, to issue to the defendant, commanding him to proceed to ascertain the amount for which the Athens branch of the State Bank of Ohio should be entered upon the duplicate for taxation, and to enter the amount so ascertained upon the duplicate.

The Athens branch of the State Bank was organized, and went into operation, under a law of the general assembly, passed February 24, 1845, entitled “ an act to incorporate the State Bank of Ohio, and other banking companies.”

The 60th section of the act prescribes the rate of taxes which shall be paid by the bank, and then declares that such rate “ 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.”

The “ act for the assessment and taxation of all property in this State, and for levying taxes thereon, according to its true value in money,” passed April 13,1852, defines a different rule of taxation from that fixed in the charter. It provides for the collection from the bank of a larger amount of taxes than is required by said 60 th section.

The president and cashier have refused to list and return the capital and property of the bank, according to the act of 1852. It is made the duty of the county auditor, by the provisions of the tax law, to enter upon his duplicate, for taxation, the capital stock of such bank, and to ascertain the average amount of notes and bills discounted or purchased, and all other moneys, effects, or dues of every description, belonging to such bank, loaned, invested, or otherwise used, with a view to profit; and to the capital, and the amount so ascertained, of notes, bills, etc., to add fifty per cent.; which sum, thus made up, is to be placed on the county duplicate, and assessed with taxes.

The county auditor declined to perform this requirement of the law, and the auditor of State moves for the allowance of this writ, to compel him to perform the duty thus imposed on him.

The question raised by this proceeding has been several times before the courts of this State for adjudication. It is this :

Can the legislature, under the constitution of 1802, after creating by enactment a private corporation, and delegating to it special privileges, and declaring a rule by which it shall be taxed, and, in terms or by implication, excluding the right to alter or change such rule, without the consent of the incorporation, by subsequent legislation, repeal or modify the charter thus granted ?

The State v. Commercial Bank of Cincinnati, 7 Ohio Rep. 125, determined the question against such authority on the part of the legislature.

In Piqua Branch Bank v. Knoop, 1 Ohio St. Rep., the question was again under consideration before this court, and was ruled adversely to the claim of the corporation, and in favor of the power of the legislature to apply any principle of taxation to individuals or incorporated companies, which shall be equal, notwithstanding any former law on the subject, or any qualifying clause contained in a private charter, and overruled. State v. Commercial Bank, 7 Ohio Rep.

That case was removed into the Supreme Court of the United States, 16 How. 369, and the judgment of this court was, by that tribunal, reversed. It involved the construction of the same charter, and of a tax law similar to the one upon which this motion is predicated. The court say they were brought to the conclusion that in the acceptance of the charter, on its terms, and the payment of the capital stock, under an agreement to pay six per cent., semi-annually, on the dividends made, in lieu of all taxes, a contract was made binding on the State and on the bank, and that the tax law under which a higher tax was assessed on the bank than was stipulated in its charter, impairs the obligations of the contract, which is prohibited by the constitution of the United States, and consequently that the act, as regards the tax thus imposed, is void.

At the present term of this court, we have decided the case of Matheny v. Golden, in accordance with the principle laid down in 7 Ohio Rep., and in the above case, decided by the Supreme Court of the United States. Being entirely satisfied with the ruling in these cases, and that it should govern us in the disposal of this motion, we deem it unnecessary here to repeat the arguments or reasons which tend to convince us of its correctness. The views of the court are fully stated in Matheny v. Golden, above referred to.

Motion denied.

Bartley, C. J.,

dissenting.

I have given my views fully on the questions involved in this case, in my dissenting opinions in other cases decided at the present term. On the question of the appellate power of the Supreme Court of the United States over this court, and the authority of that court to reverse the judgment of this court, especially in regard to the interpretation of a State law, and the constitutional powers of the State legislature, I refer to the views expressed by me at full length, in the case of the Piqua Bank v. Knoop, 6 Ohio St. Rep. 344. And as to the grounds of my dissent on the other questions, I refer to my views expressed in the case of Matheny v. Golden, supra, and also the case of the Toledo Bank v. Bond, 1 Ohio St. Rep. 626, wherein the questions were decided in this court contrary to the decision in the case now before us.

Brinkerhoee, J.,

also dissented for reasons stated in his dissent in the next following case.


author: Scott, J. Bartley, C. J., Brinkerhoff, J.,

text:
    The Ross County Bank in Chillicothe v. Henry S. Lewis.
    The act of March 21, 1851, “ To tax banks, and bank and other stocks,” etc., in providing for a different modo and measure of taxation in regard to plaintiff's capital stock, etc., from that prescribed in the 60th section of the act of 1815, under which the plaintiff was incorporated, impairs the obligation of a contract.
    Trespass. Reserved in the District Court of Ross county.

      The plaintiff is a branch pf the State Bank of Ohio, organized under the act of February 24, 1845, to incorporate the State Bank of Ohio, and other banking companies.
    For the year 1851, a tax was levied upon the capital stock, and surplus and contingent fund of the plaintiff, in pursuance of the provisions of the act of March 21, 1851, “ to tax banks, and bank and other stocks, the same as other property is now taxable by the laws of this State,” and placed by the county auditor upon the grand duplicate of Ross county, for collection.
    The defendant, as treasurer of said county, having demanded of the plaintiff the payment of the tax thus levied, and the plaintiff having refused to pay the same, proceeded, on the 1st of January, 1852, to seize, distrain, and sell certain goods and chattels of the plaintiff to pay said tax.
    Counting upon this seizure and sale, the plaintiff brought its action of trespass against the defendant.
    The defendant pleaded the assessment of the tax, and the demand and refusal, as above stated, as a protection against liability for said seizure and sale.
    The plaintiff replied that, as against the plaintiff, the act of March 21,1851, in pursuance of which said tax was levied, was unconstitutional and void — the plaintiff having been organized under the provisions of the act of February 24, 1845, which thereby became a contract between itself and the State, and which prescribed a different rule and rate of taxation from that provided for in the law under which this tax was assessed ; and having on its part fully complied with the provisions of said act of February 24, 1845.
    The defendant demurred to this -replication, and thereby raised the following question of law:
    Does the act of March 21,1851, as against thé plaintiff, conflict with the provision of the constitution of the United States, and the like provision of the Ohio constitution of 1802, prohibiting all laws which impair the obligation of contracts ?

      T. Ewing, H. H. Hunter, and Henry Stanbery, for plaintiff.

      George E. Pugh, and Lewis & Safford, for defendant.
   Scott, J.

The plaintiff was organized under the act of 1845, “ to incorporate the State Bank of Ohio, and other banking companies,” the 60th section of which prescribes the mode and measure of taxation to which the banks thereby incorporated should be subjected. The act of March 21, 1851, to tax banks, and bank and other stocks the same as other property is now taxable by the laws of this State,” provides for a different mode and measure of taxation ; and the sole question arising in the case, is : Does the enactment of 1851 impair the obligations of a contract, and so fall within the prohibition of the tenth section of the first article of the constitution of the United States ?

This question, raised in this case by the pleadings, is identical with that decided by the Supreme Court of the United States in the case of the Piqua Branch of the State Bank of Ohio v. Knoop, 16 How. Rep. 369.

The same question, in effect, was before this court at its present term, and decided in the same way, in the case of Ohio, on relation of Morgan, v. Auditor of Athens county.

The power of the legislature, under the constitution of 1802, to bind the State by such a charter as the bank law of 1845, has also been fully considered and affirmed by this court at its present term, in the case of Matheny v. Golden.

In accordance with these decisions, both of this court and the Supreme Court of the United States, and for the reasons on which those decisions are based, judgment must be entered for the plaintiff.

Bartley, C. J.,

dissenting:

I have stated my views, at full length, on the main question involved in this case, in my dissenting opinion in the case of Matheny v. Golden, reported in this volume, page 375. And I refer to that opiniomfor the main reasons of my dissent in this case.

Brinkerhoff, J.,

also dissented, on the ground that the sixtieth section of the act to incorporate the State Bank of Ohio, did not contain the legal elements of, and was not a contract; and holding that this case was clearly distinguishable from that of Matheny v. Golden, where the existence of a contract was beyond question.