Sandusky City Bank v. Wilbor. A contract is, as defined by Sir William Blackstone, and as usually understood, "an agreement, upon sufficient consideration, to do or not to do a particular thing." The following are the provisions of that section: "Each banking company organized under this act, or accepting thereof, and complying with its provisions, shall semi-annually, on the days designated in the 59th section for declaring dividends, set off to the state six per centum of the profits, deducting therefrom the expenses and ascertained losses of the company, 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 shall, within ten days thereafter, inform the auditor of state of the amount so set off, and shall pay the same to the treasurer of state on the order of said auditor; but in computing the profits of the company for the purposes aforesaid, the interest received on the 494] certificates of the funded debt of this state held *by the company, or deposited with, and transferred to the treasurer of state, or to the board of control by such company, shall not be taken into account." Is the foregoing section a contract within the meaning of the constitution of the United States and the constitution of this state? The 10th section of the 1st article of the constitution of the United States provides that "no state shall pass any law impairing the obligation of contracts;" and the 16th section of article 8 of the constitution of Ohio (1802), provides that "no ex post facto law, or law impairing the validity of contracts, shall ever be made." If, therefore, section 60 be a contract binding the state to impose no other tax than the one therein expressed upon the bank, the tax law of March 21, 1851, would be obviously in conflict with the provisions of the constitution referred to. In the case of Fletcher v. Peck, 6 Cranch, 135, Chief Justice Marshall defines the term contract, as used in the constitution of the United States, in the following language: "A contract is a compact between two or more persons, and is cither executory or executed. An executory contract is one in which a party binds himself to do or not to do a particular thing. A contract executed is one in which the object of the contract is performed; and this,' says Blackstone, 'differs in nothing from a grant.'" Sandusky City Bank v. Wilbor. If, then, section 60 be a contract, it is an executory contract, a compact or mutual agreement between these two artificial persons, the state and the bank. And this contract, if it be one, must possess the requisites of all contracts to render it obligatory. There must be: 1. Parties capable to contract; 2. A legal subject-matter of contract; 3. A sufficient consideration; and, 4. Sufficient and apt words to express the terms of the contract, and to render the same obligatory upon both parties. Does section 60 possess these several requisites, indispensable to constitute a valid contract? There are, it is true, the necessary parties; and perhaps capable to contract; but, to say nothing of the legality of the subject-matter-exemption from taxation *to [495 be contracted for, there seems utterly wanting every other requisite of a valid contract. 1. As to the consideration. It is not pretended that the company paid the state any bonus for its franchise; nor that exemption from taxation constitutes any necessary part or incident of the franchise of an incorporated banking company. Nor is the company bound to exercise its franchise or to declare any dividend of profits. It may, from time to time, invest the entire proceeds of the business in state stocks, "certificates of the funded debt of this state," dividing only the interest thereof during the continuance of their business; and which, by the terms of the law, is excluded from the estimate of profits. Thus the bank, with a large capital and doing a lucrative business, might not pay, nor the state receive, any tax whatsoever. And if such a right of exemption should be denied, the only redress for the state, or penalty to the bank, would be, that after a tedious litigation the franchise of the bank might possibly be adjudged forfeited. There is then no consideration, not even that of mutual promises or mutual obligation between the parties. 2. There are no apt and sufficient words used making definite the terms of any contract, and imposing obligations upon both parties respectively to each other. No obligation is thereby imposed upon the banking company to either commence or continue business at or for any definite time. Again, it may be remarked that neither the legislature nor the banking companies, after the passage of the act of February 24, 1845, seemed to regard or construe the act to be a contract. The next legislature that convened passed the act of January 6, Sandusky City Bank v. Wilbor. 1846, amending the 5th section of the law, and to take effect upon a majority of the board of control filing their assent to the amendment. And yet the amendment only affected the banking companies respectively, and in no manner the board of control. If section five was then to be regarded as a contract, the board of control was in fact no more a party to that contract than was the board of county commissioners. Other amendments of the law of 1845 have also, since its enactment, been made by the legislature 496] *inconsistent with the idea of the law being regarded as a contract. See the amendments of March 12, 1845; January 22, 1846; March 8, 1850, and March 19, 1850. It appears, therefore, from the long received general understanding and acceptation of the term contract, and the construction given by successive legislatures to the act, and accepted by the banks organized under it, that section sixty of the act to incorporate the State Bank of Ohio, etc., passed February 24, 1845, is not a contract. It does not possess the indispensable requisites to constitute a contract. It is, however, suggested that, even if it be conceded that this act of the legislature is not a contract in the common acceptation of the term, section sixty of the act may be regarded as a law in the nature of a contract-a law so like a contract as to be protected against repeal or amendment by the constitutional provision inhibiting the legislature from passing any law impairing the obligation of a contract. To this it might be sufficient to reply, that if the law be only in the nature of a contract, like a contract, the maxim "nullum simile est idem" would apply. If only like, it is not the same; and so not included within the constitutional prohibition. But it may certainly be doubted whether either the constitution of this state, or that of the United States, ever contemplated any statutory enactment being included by the term contract, in the prohibition contained in those instruments against passing any law invalidating a contract. In my judgment, however, it is not doubtful, but certain that those prohibitions were neither of them ever designed, nor should they be understood, to include in the term contract a statute passed by the state for revenue purposes, so as to preclude the legislature from revising, repealing, or amending the same to meet the exigencies of the state government. And this too, whether such revenue statute consists of an entire act de448 Sandusky City Bank v. Wilbor. voted to the subject of revenue, or of a single section, like that of section sixty under consideration. Nor do the foregoing views at all conflict with the idea of vested rights under statutory provisions. Rights becoming vested under a statute while in force, are not impaired by its appeal. *When vested and fully acquired, such rights are to be re- [497 garded as executed contracts, differing in no material respect from grants. As in the present case, so long as section 60 remained in force, and the banks paid their tax under that section, they thereby acquired the benefit of its provisions, and could not be subjected to any further liability to a tax for the time past, if the section had been, immediately after such payment, repealed. Yet such right of exemption under the law for time future, depending upon the law and the payment according to its provisions, not yet having become vested, would necessarily terminate with the repeal of the section or its amendment, as by the law of March 21, 1851. So of all rights vested under a statute, it is a general rule, that the statute may be repealed or amended; and by a like general rule, all rights vested or acquired under the statute while in force, remain unimpaired by such repeal. Thus, in the case of Fletcher v. Peck, 6 Cranch, 135, C. J. Marshall remarks: "The. principle asserted, is, that one legislature is competent to repeal any act which a former legislature was competent to pass; and that one legislature can not abridge the power of a succeeding legislature." The correctness of this principle, so far as respects general legislation, can never be controverted. "But if an act be done under a law, a succeeding legislature can not undo it... Where, then, a law is in the nature of a contract, where absolute rights have vested under that contract, a repeal of that law can not divest those rights." It has also been suggested that the act of February 24, 1845, may at least be regarded as a proposition, on the part of the state, inviting organization under the law; and being followed by the provision, that "such sum or amount to 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," it is insisted that upon the organization of the company the provision ought to become obligatory upon the state. To this view of the case there are two answers. In the first place, the language of the act does not admit of its being regarded as a proposition inviting organization. And secondly, if otherwise, 449 VOL. VII Sandusky City Bank v. Wilbor. 498] *the company has never so accepted the proposition as to be bound to the performance for any definite time in future. If the act be regarded as a proposition for an exemption from taxation, the important inquiry at once arises-for what length of time is the exemption to continue? and by the supply of what words is the answer to be expressed? Shall it be the words, during the continuance of the organization of the company," or, by the words, "so long as said company shall continue to set off and pay to the state said six per centum on her profits;" or, shall the uniform understanding under all other tax laws obtain under this; and the answer be supplied by these words, " until otherwise provided by law?" Even conceding the unreasonable proposition, that the entire act of February 24, 1845, should be regarded as a charter, it would not follow that the mode and measure of taxation expressed by section 60, could not be changed. "Charters are to be expounded as the law was understood when the charter was granted." 2 Inst. 282. And the history, situation, and past legislation of a state may be resorted to, in order to expound its legislative intention. Preston v. Boude, 1 Wheat. 115; Charles River Bridge v. Warren Bridge, 11 Pet. 420. The effect of the act of March 7, 1842, providing expressly for the future amendment or repeal, therefore, necessarily had the same effect as if its provisions constituted one section of the charter. And if it could be shown (as we think it can not) that the tax law of March 21, 1851, divested a vested right of the bank to taxation only under the provisions of section 60, during its continued organization and future operations, unless the right so claimed rested in contract, the act of March 21, 1851, would still be obligatory upon the bank. In pronouncing the opinion of the court in the case of Charles River Bridge v. Warren Bridge, 11 Pet. 539, C. J. Taney says: "It is well settled by the decisions of this court that a state law may be retrospective in its character, and may divest vested rights, and yet not violate the constitution of the United States, unless it also impairs the validity of a contract.” 499] To the same effect are opinions expressed in the case of Satterlee v. Matthewson, 3 Pet. 413, and in the case of Watson and others v. Mercer, 8 Pet. 110. Nor can the contract so alleged to be impaired by a statute, ever be sustained by implication. See United States v. Arredondo, 6 Pet. 738, and the cases there fully collected. |