Piqua Brance of State Bank of Ohio v. Knoop - 57 U.S. 369 (1853)
U.S. Supreme Court
Piqua Brance of State Bank of Ohio v. Knoop, 57 U.S. 16 How. 369 369 (1853)
Piqua Brance of State Bank of Ohio v. Knoop
57 U.S. (16 How.) 369
In 1845, the Legislature of Ohio passed a general banking law, the fifty-ninth section of which required the officers to make semiannual dividends, and the sixtieth required them to set off six percent of such dividends for the use of the state, which sum or amount so set off should be in lieu of all taxes to which the company, or the stockholders therein, would otherwise be subject.
This was a contract fixing the amount of taxation, and not a law prescribing a rule of taxation until changed by the legislature.
In 1851, an act was passed entitled "An act to tax banks, and bank and other stocks, the same as property is now taxable by the laws of this state." The operation of this law being to increase the tax, the banks were not bound to pay that increase.
A municipal corporation, in which is vested some portion of the administration of the government, may be changed at the will of the legislature.
But a bank, where the stock is owned by individuals, is a private corporation. Its charter is a legislative contract, and cannot be changed without its assent.
The preceding case upon this subject examined, and the case of Providence Bank v. Billing, 4 Pet. 561, explained.
In the record there was the following certificate from the Supreme Court of Ohio, which explains the nature of the case:
"And thereupon, on motion of the defendant, it is hereby certified by the court and ordered to be made a part of the record herein that in the above entitled cause the petitioner claimed to collect, and prayed the aid of the court to enforce the payment of, the tax in the petition mentioned under an Act of the General Assembly of the State of Ohio, passed March 21, 1851, entitled 'An act to tax banks, and bank and other stocks,
the same as other property is now taxable by the laws of this state,' a certified copy of which is filed as an exhibit in this cause, marked 'A.' The said defendant, by way of defense to the prayer of said petitioner &c., set up an act, entitled 'An act to incorporate the State Bank of Ohio and other banking companies,' enacted by the General Assembly of the State of Ohio, February 24, 1845, a certified copy of which is filed as an exhibit in this cause, marked 'B,' under which act the defendants organized, and became and was a branch of the State Bank of Ohio, exercising the franchises of such bank prior to and ever since the year 1847, and that the defendant claimed that, by virtue of the operation of said act last mentioned, the State of Ohio had entered into a binding contract and obligation, whereby the State of Ohio had agreed and bound herself not to impose any tax upon the defendant, and not to require the defendant to pay any tax for the year 1851, other or greater than six percent on its dividends or profits, as provided by the sixtieth section of the said Act of February 24, 1845. And it is further certified that there was drawn in question in said cause the validity of the said statute of the State of Ohio passed March 21, 1851, hereinbefore mentioned, the said defendant claiming that it was a violation of the said alleged agreement and contract between the State of Ohio and the said defendant, and on that account repugnant to the Constitution of the United States, and void, but the court here held and decided:"
"1st, that the sixtieth section of said Act of February 24, 1845, to incorporate the State Bank of Ohio, and other banking companies, contains no pledge or contract on the part of the state not to alter or change the mode or amount of taxation therein specified, but the taxing power of the General Assembly of the State of Ohio over the property of companies formed under that act is the same as over the property of individuals."
"And 2d, that whether the franchises of such companies may be revoked, changed, or modified, or not, the Act of March 21, 1851, upon any construction, does not impair any right secured to them by the act of 1845, and is a constitutional and valid law. And it is further certified that the decision of the question as to the validity of the said statute of 1851 was necessary to the decision of said cause, and the decision in the premises was in favor of the validity of said statute. The court does further certify, that this court is the highest court of law and equity of the State of Ohio in which a decision of this suit could be held. And it is ordered that said exhibits A and B be made parts of the complete record in this cause."
The contents of exhibits A and B are stated in the opinion of the Court.