Sandusky City Bank v. Wilbor.

The plaintiff can not, therefore, rest a claim of exemption from taxation under the law of March 21, 1851, upon a mere vested right derived by the bank under section 60 of the act of 1845. The claim of the bank to a continuance in future of the privileges conferred by section 60, after the passage of the tax law of March 21, 1851, if valid, must rest solely in contract. It must be maintained by the plaintiff, over the act of March 7, 1842, and all the other objections suggested to such a construction, that section 60 was and is a valid contract, obligatory upon the state, restraining the legislature from imposing any other tax upon the bank. And this character for the law of 1845, can only be made out, as it seems to me, from ingenious and illogical reasoning, instead of a plain reading of the several acts of the legislature under consideration.

There remains a still further objection to the construction insisted upon, on the part of the plaintiff. If by any reasoning section 60 of the general banking law of 1845, can be considered a contract, precluding the state from varying the mode and measure of taxing the banks thereby expressed, by analogy of reasoning it would seem inevitably to follow that there must be other exemptions. This rule of construction, once established, would be insisted upon, and seems equally applicable under other statutes. Taxes assessed upon lands within the state at the time of their purchase, especially upon the lands sold by the state, could not, for the same reason, be varied or increased by the legislature.

Let us illustrate the correctness of this proposition by its application to preceding acts of legislation in this state.

acres.

On the 27th of January, 1806, the legislature passed a law providing that all lands of individuals should be subject to tax as follows: That the lands should be rated according to their value *in a state of nature, into three classes; that lands of the first [500 class should be taxed at the rate of ninety cents, the second class at sixty-five cents, and the third rate at forty cents per hundred After enacting this law, and while it was in full force, the legislature passed another law authorizing certain lands belonging to the state to be sold at public auction to the highest bidder, at not less than two dollars per acre. Notice of the sale of these lands was required by the law to be given as well in certain newspapers of adjoining states as in this state, in order to invite competition. Now upon the day of sale was it not as reasonable to suppose that the farmer who had come from another state to invest his capital

Sandusky City Bank v. Wilbor.

in the purchase of unimproved lands, to be cultivated and rendered valuable, and thereby to increase as well that of the state, as his own wealth, would not look to the probable amount of tax to be paid to the state on the land, as well as the purchase money to be paid to

the state for the land?

The only difference observable between these laws relating to the farming interests, and those under consideration relating to the banking interests, is certainly in favor of the former, if natural persons are entitled to the same respect as artificial persons under our government. The reasons to be rendered are in favor of the farmers' tax law, in the case proposed, not being increased, when compared with those urged against an increase of the tax upon the banking interests. The state received a stipulated consideration, not less than two dollars per acre for the land, from the purchaser, and a tax of perhaps ninety cents per hundred acres to be certainly paid, under such purchase, in all time future, and also the consequent necessary increase of the strength and wealth of the state by the settlement, cultivation, and improvement of the lands so purchased.

The banking companies paid no consideration, and in their contemplated operations promised no such prospective advantages to the state as did the farmers. Why, then, might not the farmer, who, accepting the published invitation of the state, had complied with the proposition so advertised, and purchased and paid for his farm-why might he not object to an increase of the tax 501] *after improving his lands, beyond that imposed by the existing law under which he had so purchased.

But it has never been pretended or claimed by the purchasers of lands under such circumstances, that the mode and measure of taxing the lands so purchased could not be varied and increased by future legislation. The legislature has exercised this right, repealed the tax law imposing only from forty to ninety cents per hundred acres, and in some cases has increased the tax upon the lands a hundred fold. And this action of the legislature has been cheerfully and unanimously acquiesced in by those affected thereby.

Neither the language of section 60 of the general banking law, nor of any other section in that act, expresses any intention of the legislature to prohibit future legislatures from amending or

Sandusky City Bank v. Wilbor.

varying the mode and measure of taxing the banks. And such intention can never be presumed.

But if there could otherwise be inferred any doubt as to the understanding and intention of the legislature that section 60 was in fact subject to future amendment like other tax laws, that doubt would seem to be dissipated by another statute already referred to. At the time of the passage of the general banking law of February 24, 1845, the statute of March 7, 1842, was in full force, providing that all subsequent corporations, whether possessing banking powers or not, were to hold their charters subject to alteration, suspension, and repeal, in the discretion of the legislature. See 40 Ohio L. 70.

It appears, therefore, that when the legislature enacted section 60, instead of thereby intending an unalterable contract, they enacted that section under an existing statute law authorizing any subsequent legislature to correct the rule of taxation thereby established; to modify and reduce the tax thereby imposed, if found too high, or to increase the tax if too low.

Unless, therefore, legislators are exceptions to the general maxim, that "all men are presumed to know the law," it follows that the legislature, at the time of enacting section 60, had certain knowledge that the same was, like other laws, subject to revision and *amendment by future legislatures. It is evident, then, that [502 when the act of February 24, 1845, called the general banking law, was enacted, section 60, prescribing the mode and measure of taxing banks organized under that law, was not a contract, but a simple legislative enactment, susceptible of amendment or repeal, like all other tax laws.

It is therefore certain, if section 60, at the time of the enactment of the tax law of March 21, 1851, was a contract on the part of the state, so as to preclude further legislation upon the same subject, invalidating section 60, it must have changed from an amendable and repealable statute into a contract, at some time subsequent to its enactment, and previous to the passage of the law of March 21, 1851.

At what time, and by what agency, then, was section 60 of the general banking law of 1845 changed from its admitted character of an amendable and repealable law when enacted, into a contract obligatory upon the state, in March, 1851, so as to then be, like the laws of the Medes and Persians, unchangeable? It appears, there

Sandusky City Bank v. Wilbor.

fore, evident, both from the language used, and the provisions contained in the act of February 24, 1845, and also from the fact of the statute of March 7, 1842, authorizing its future amendment or repeal, that the legislature, at the time of enacting the banking law of 1845, did not regard section 60 of the act as a contract; but supposed the same amendable by subsequent legislatures, like other tax laws.

It is not, perhaps, material whether the banking companies, organizing under that act, did or did not regard any of the sections of the act as amendable. But if the companies organizing and commencing operations under the act, gave the matter any attention, it would seem that they must necessarily have regarded section 60 of the act as amendable, for the following reasons, among others:

1. Independent of the consideration of want of power in the legislature to inhibit a future amendment of a revenue law, there had been upon the statute book, ever since the session of 1841-1842 of the legislature, a statute providing "that the charter of every corporation, of every description, whether possessing *banking [503 powers or not, that [should thereafter] be granted by the legislature [should], be subject to alteration, suspension, or repeal." And this act was not repealed until March 12, 1845.

2. The provisions of the act itself indicated no more intention of perpetuity of the particular mode and measure of taxation, expressed by section 60, than previous laws imposing taxes upon different classes of persons and property, and which had all been subject to repeal or amendment, in the discretion of future legislatures.

3. Those organizing under the provisions of the act of February 24, 1845, knew that they had paid the state no bonus, no consideration, for the mode and measure of taxation imposed by section 60, and therefore must have supposed it expressive of a rule which was intended to impose a just and equal tax upon the property to be invested in banking; and subject to any proper correction by future legislatures.

But the act of February 24, 1845, now under consideration, has already received the construction of this court. That act, for the first time, came before this court, for a judicial construction, at the January term, 1853. By the unanimous opinion of all the members of the court, section 60 of the act was then held to be no contract,

Sandusky City Bank v. Wilbor.

but a statutory law, subject to amendment or repeal, like other statutory tax laws, which have been from time to time enacted and amended, or repealed, in the discretion of successive legislatures.

This court has, subsequently, had occasion, in quite a number of cases, to give a construction to that act; and the construction given by the court has uniformly been the same.

It is true, some of these cases have been taken before the Supreme Court of the United States for revision; and a bare majority of the members of that court gave a different construction to the statutes of this state from that given by the undivided opinion of this court.

In pronouncing the opinion upon the construction of the statute, in one of those cases, C. J. Taney says: "It is true that this court always follows the decisions of the state courts in the construction of their own constitution and laws. But where those *decisions [504 are in conflict, this court must determine between them."

Mr. Justice Catron states the rule in even stronger language. Speaking of the construction given by this court to our statutes and the constitution of this state, he says: "It must be conceded, as I think, that the Supreme Court of Ohio has the uncontrollable right to declare what that meaning is; and that this court has just as little right to question that construction, as the Supreme Court of Ohio has to question our construction of the constitution of the United States."

But even if we concede all that is claimed by the distinguished Chief Justice, that where the decisions of the state court upon the construction of the laws of the state, relating to its own domestic police, are in conflict, that court should dictate a construction; we do not recognize this as such a case. We are not aware that the statutes under consideration ever came before the Supreme Court of this state for a judicial construction previous to 1853. And all the members of the court were then unanimous in the construction given to these statutes; and from that construction this court has never departed. We do not, therefore, in view of the rules held by that eminent court in such cases, with all the respect and deference entertained toward the opinion of the majority of that court, feel at liberty to depart from our own settled convictions of the correctness of the construction heretofore uniformly given to the statutes under consideration by this court.

Judgment must therefore be entered for the defendant.