Bank of State of Indiana v. City of New Albany
Citation | 11 Ind. 114 |
Parties | The Bank of the State of Indiana v. The City of New Albany |
Decision Date | 24 November 1858 |
Court | Supreme Court of Indiana |
From the Floyd Circuit Court.
The judgment is reversed with costs. Cause remanded with instruction to grant the injunction.
T. L Smith and M. C. Kerr, for the Bank.
J. H Stotsenburg and T. M. Brown, for appellee.
This was an application for an injunction to restrain the city of New Albany from collecting a tax levied by that corporation upon the capital stock of the branch of the bank therein located. The injunction was refused, and the complaint dismissed upon demurrer. The tax was held legal. The existing constitution of Indiana authorizes the legislature to charter a bank with branches. Art. 11, § 4.
Under this authority, the legislature did charter a bank, one of the sections of the charter of which reads thus:
It is claimed that the latter clause of this section is unconstitutional.
The former constitution of this state conferred upon the legislature power to charter a bank with branches. Art. 10.
Under that authority, the legislature created such a bank, and, in the charter of the corporation, inserted limitations upon the power of taxing its capital stock. Those limitations were held valid. State v. State Bank, 7 Blackf. 393.--State Bank v. Brackenridge, 7 Blackf. 395.--State v. State Bank, 6 Blackf. 349.--State Bank v. Madison, 3 Ind. 43. Nor could the municipal corporations in which branches were situated complain of the limitations as an infringement of their rights. In the case last cited, Judge Blackford, in delivering the opinion of the Court, said:
.
The unqualified grant, then, of power, in a constitution, to a legislature, to charter a bank, carries with it the power to fix the conditions upon and under which the corporation shall exist and act, one of which conditions may be an enlargement or curtailment of the right to tax it, as compared with other objects of taxation. Gardner v. State, 21 N.J.L. 557.--State Bank v. Knoop, 16 How. (U.S.) 369.--Ohio Life Ins. &c., Company v. Debolt, 16 How. 416.
It now becomes necessary to inquire whether such unqualified, unlimited grant of power is conferred, by the constitution, upon the legislature of Indiana. It is not. There are limitations upon the power of creating a state bank. The legislature cannot create such a bank, the stockholders in which shall not, to a certain extent, be personally liable; nor in which the branches shall not be liable for each other; nor one that shall not be specie paying, &c. Article 11, passim. But is there any limitation which prohibits the creation of such a bank, whose capital stock shall be exempt from taxation by corporations, for corporate purposes?
It is claimed that such limitation is contained in three several provisions of the constitution, viz., in § 23, art. 1; in § 19, art. 4; and in § 1, art. 10.
The first of these provisions is, that "The General Assembly shall not grant to any citizen, or class of citizens, privileges or immunities which, upon the same terms, shall not equally belong to all citizens."
We shall not here attempt to indicate the application this section of the constitution is to have in the cases that may arise; but as touching the present, the only effect to be given to it is, that in creating a bank, the legislature must provide that, so far as the state is concerned, every citizen shall have an equal right to obtain stock in it, till the amount authorized is taken. Whether that was done in the charter of the Bank of the State of Indiana, is not made a point in the case now being considered. See Debates in Ind. Conv., vol. 2, pp. 1393 to 1399. A different construction would have the effect to annul the section authorizing the creation of a bank, altogether; but the two sections, being in the same constitution, must be reconciled and given effect to if possible. We think they can be.
As to § 19, art. 4, referred to, it provides that "every act shall embrace but one subject and matters properly...
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