City of Louisville v. Bank of Louisville Stone v. Same

• Decision Date: 15 May 1899
• Docket Number: Nos. 359 and 358,s. 359 and 358
• Citation: 19 S.Ct. 753,174 U.S. 439,43 L.Ed. 1039
• Parties: CITY OF LOUISVILLE v. BANK OF LOUISVILLE. STONE, Auditor, et al., v. SAME
• Court: U.S. Supreme Court

174 U.S. 439

19 S.Ct. 753

43 L.Ed. 1039

CITY OF LOUISVILLE

v BANK OF LOUISVILLE.

STONE, Auditor, et al.,

v. SAME.

Nos. 359 and 358.

May 15, 1899.

The Bank of Louisville in these two cases filed its bills to enjoin the collection of certain taxes. The matters to which the bill in the first case (No. 359) related were certain franchise taxes for the years 1893 and 1894, the assessment and certification of valuation whereof had been made prior to the filing of the bill. Those covered by the bill in the second case (No. 358) were, generally speaking, like those embraced in the preceding suit, but were for different years,—that is, for 1895, 1896, and 1897,—and by an amendment the taxes of 1898 were also included. These taxes, however, had not been certified at the time the bill was filed, and the relief contemplated was the enjoining of the valuation of the franchise, and the certification of the same for the purposes of taxation, as well as the subsequent collection of the taxes to be levied thereon. Omitting reference to the averments distinctly relating to the jurisdiction in equity, the case made by the bills was this:

It was alleged that the bank was chartered on February 2, 1833, to endure until January 1, 1853; that pursuant to an act approved February 16, 1838, the provisions of which had been complied with, the charter existence was extended for nine years; that by an act of February 15, 1858, duly accepted by the bank, its charter privileges were continued in full force for 20 years from the 1st of January, 1863; and finally that by an act of May 1, 1880, which the bank had duly accepted, its charter was extended for 20 years from January 1, 1883. It was alleged that by the sixth section of the original chart r it was provided, among other things, that the cashier of the bank 'shall on the first day of July, 1834, and on the same day annually thereafter, pay unto the treasurer of the state twenty-five cents on each share held by the stockholders in said bank, which shall be in full of all tax or bonus on said bank; provided, that the legislature may increase or reduce the same; but at no time shall the tax imposed on said stock exceed fifty cents on each share held in said bank.' The tax, the bills admitted, by an act approved February 12, 1836, and been increased to 50 cents a share.

In general language, it was averred that by certain decisions rendered by the courts of Kentucky in the years 1838, 1869, and 1888, it was held that similar language to that contained in the charter of complainant constituted a contract preventing a higher rate of taxation than that provided for in the charter, and that from all or some of these decisions it resulted that the extension of an original charter, under the law of Kentucky, carried with it all the rights and privileges, including the limit of taxation, contained in the original charter. No decision, however, prior to 1880, by the Kentucky court of appeals, was referred to, holding that the mere grant of a charter, or an extension thereof, was not subject to repeal, alteration, or amendment, if such power was reserved, by a general law in force when the charter was enacted or the extension was granted. There was no averment that the complainant was either a party or a privy to the suits in which the decisions referred to had been rendered.

In both bills it was averred at length that the general assembly of the state of Kentucky had enacted the statute known as the 'Hewitt Act,' and that the bank had accepted its provisions. This act and its acceptance, it was asserted, constituted an irrevocable contract, protected from impairment by the constitution of the United States, thus securing the bank against any form of taxation other than that provided in the Hewitt act. It was in both bills then declared that in 1894, the city of Louisville asserting a right to collect taxes from the bank in violation of the contract embodied in the Hewitt act, for the purpose of testing the right of the city to do so an agreement was entered into between the commissioners of the sinking fund, the city of Louisville, through the city attorney, and the attorneys of the complainant and of other banks and trust companies, by which representative suits were to be brought, and it was agreed that the liability of the complainant to any other taxation than that imposed by the Hewitt act should abide the result of the test suits in question; that in compliance with this agreement a suit was brought by the Bank of Kentucky, which, like the complainant, had been originally chartered before 1856, in which last- named year an act had been passed in Kentucky reserving the right to repeal, alter, or amend all charters subsequently granted, subject to certain exceptions provided expressly in the act of 1856, and that this suit had culminated in a final decree by the court of appeals of Kentucky holding that the Hewitt act was an irrevocable contract, and that the banks which had accepted it were not liable to any other taxation than...