Samuel Gordon, Plaintiff In Error v. James Cheston, Plaintiff In Error v. the Appeal Tax Court
| Decision Date | 01 January 1845 |
| Citation | 11 L.Ed. 529,3 How. 133,44 U.S. 133 |
| Parties | SAMUEL GORDON, PLAINTIFF IN ERROR, v. . JAMES CHESTON, PLAINTIFF IN ERROR, v. THE APPEAL TAX COURT |
| Court | U.S. Supreme Court |
THESE were kindred cases, brought up by writ of error from the Court of Appeals of the state of Maryland, under the 25th section of the Judiciary Act of 1789.
The first case depended upon the constitutionality of a tax imposed by the legislature of Maryland in 1841, it being alleged to be in violation of a contract made by the legislature in 1821; and the second depended upon the same circumstance, with the addition that the plaintiff in error was entitled to the benefit of the same contract, by virtue of an act of the General Assembly, passed in 1834.
The facts in the case were these;——
At November session, 1804, the legislature of Maryland incorporated the Union Bank of Maryland. Samuel Gordon, the plaintiff in error in the first case, was, at the institution of the suit below, a stockholder in this bank. No bonus was required to be paid to the state, but five thousand shares were reserved for the use and benefit of the state of Maryland, to be subscribed for by the state, when desired by the legislature thereof. The charter was to last until 1816.
At the session of 1812, the legislature passed an act, entitled 'An act to incorporate a company to make a turnpike road leading to Cumberland, and for the extension of the charters of the several banks in this state, and for other purposes.' It proposed to extend the charters of the banks to 1835, upon condition, that they would subscribe for as much stock as would raise a fund necessary and sufficient to finish and complete the road, and upon the further condition, should bind themselves to pay into the Treasury the sum of $20,000 for each and every year that the charters should continue; the fund being pledged for the support of common schools.
The 12th section was as follows:
'That upon any of the banks in this state complying with the conditions of this act, the faith of the state is hereby pledged not to impose any further tax or bonus on the said banks during the continuation of their charters under this act.'
This act was not accepted by any of the banks.
At the session of 1813, the legislature passed another act, which was entitled a supplement to the aforegoing. The 1st section incorporated a company to make the road. The second was as follows: 'And for the purpose of raising a fund to make and complete said road: Be it enacted, That the charters of the several banks, &c., shall be, and they are hereby continued and extended to the 1st day of January, 1835, and to the end of the session of the General Assembly next thereafter, upon condition of the said several banks subscribing, in proportion to their respective capitals actually paid in at the time of such subscriptions, for as much stock as is necessary and sufficient to finish and complete said road,' &c., &c.
The 7th section enacted, that every bank should pay annually into the Treasury the sum of twenty cents on every hundred dollars of the capital stock actually paid in; and if this were neglected for six months after it was due, the bank so neglecting should forfeit its charter.
The 8th section continued the charters of such banks as complied with the act until 1835.
The 11th section ran thus: 'That upon any of the aforesaid banks accepting of and complying with the terms and conditions of this act, the faith of the state is hereby pledged not to impose any further tax or burden upon them during the continuance of their charters under this act; and in case of the acceptance of and compliance with the provisions of this act by the several banks hereby required to make the aforementioned road, the faith of the state is further solemnly pledged to the several existing banks in the city of Baltimore, not to grant a charter of incorporation to any other banking institution to be established in the city or precincts of Baltimore before the 1st day of January, 1835.'
At the session of 1815, an act was passed, 'declaring the continuation and extension of the charters of the several banks therein mentioned.' It recited, that several banks, and amongst them the Union Bank, had accepted the act of 1813, and then declared, that their charters were extended to 1835.
At the session of 1821, another act was passed, entitled 'An act to incorporate a company to make a turnpike road from Boonsborough to Hagerstown, and for the extension of the charters of the several banks in the city of Baltimore, and for other purposes.' The preamble was as follows: 'Whereas it is to the interest of the state that a turnpike road should be made, leading from Boonsborough to Hagerstown, in Washington county, and it is represented to the legislature, that the banks hereinafter mentioned are willing to make the same, if an extension of their several charters be granted to them, as they were heretofore extended by an act entitled a supplement to the act entitled, an act to incorporate a company to make a turnpike road, leading to Cumberland, and for the extension of the charters of the several banks in the city of Baltimore, and for other purposes, passed at December session, 1813: Therefore, Be it enacted,' &c.
The 1st section incorporated a company to make the road.
The 2d section was as follows: &c.
The 6th section was as follows: 'That if the said company shall not commence the making of the said turnpike road within two years from the passage of this act, and shall not complete the same in four years thereafter, the right of the said company to the said road shall revert to the state of Maryland, and the charters of the said banks are hereby declared not to be continued or extended by virtue of this act.'
The 7th section enacted, that the banks should annually pay to the treasurer the sum of twenty cents on every hundred dollars of the capital stock of each bank actually paid in; and in case of neglect, the bank was to forfeit its charter.
The 8th section renewed and continued the charters of the complying banks until 1845, and the session of the General Assembly next thereafter.
The 11th section was as follows: 'That upon any of the aforesaid banks accepting of and complying with the terms and conditions of this act, the faith of the state is hereby pledged not to impose any further tax or burden upon them during the continuance of their charters under this act; and in case of the acceptance of and compliance with the provisions of this act by the several banks hereby required to make the aforementioned road, the faith of the state is further pledged, to the aforesaid banks in the city of Baltimore, not to grant a charter of incorporation to any other banking institution to be established in the city or precincts of Baltimore before the 1st day of January, 1845.'
The 12th section was as follows: 'That the said banks, specified in the 7th section of this act, should they elect so to do, shall be, and they are hereby, exempt from the payment of the annual tax hereby imposed, upon condition of their paying to the treasurer of the Western Shore of Maryland, on or before the 1st day of January, 1823, the sum of $100,000, to be appropriated in the manner herein before provided for.'
The Union Bank, as was admitted in the court below, duly accepted and complied with the terms and conditions of this act of 1821.
At the session of the legislature of December, 1834, an act was passed (chap. 274) to 'extend the charters of several banks in the city of Baltimore,' by which, amongst other enactments, the charter of the Union Bank was extended to the end of the year 1859. It introduced some new provisions into the charter, required the payment of the school tax and a proportionate share of $75,000; but contained no stipulation like that of the 11th section of the act of 1821.
At the session of December, 1835, the Farmers' and Planters' Bank was incorporated. It was required to pay a bonus and school tax, but the charter contained no exemption from taxation.
At the same session, viz., December, 1835, an act (chap. 142) was passed, reciting that whereas, by the 11th section of the act of 1821, the faith of the state was pledged not to impose any further tax or burden upon certain banks, and it was equitable that other banks should stand on equal footing, and enacting that the faith of the state was pledged not to impose any further or other tax on banks incorporated since the year 1821 than might be imposed on the banks which had complied with the terms of that act.
The 3d section was as follows: 'And be it enacted, That in the said act of 1821, it was not, nor is it now, the intention of the General Assembly of Maryland, to exempt from taxation and equitable contribution to the common burdens for state purposes, the property, stock, or dividends severally held in or derived from any bank in this state, by any person or persons whatever; but that the true intent and meaning of the pledge given by the said act of Assembly was, to limit the taxation upon the franchises only of the banks therein mentioned.'
In April, 1841, an act was passed 'for the general valuation and assessment of property in this state, and to provide a tax to pay the debts of the state.' It directed, amongst other things, that 'all stocks or shares owned by residents of this state in any bank, institution, or company incorporated in any other state or territory: all stocks or shares in any bank, institution, or company...
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