Ohio Life Insurance & Trust Company v. Debolt
57 U.S. 416 (1853)

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U.S. Supreme Court

Ohio Life Insurance & Trust Company v. Debolt, 57 U.S. 16 How. 416 416 (1853)

Ohio Life Insurance & Trust Company v. Debolt

57 U.S. (16 How.) 416

Syllabus

There being no opinion of the Court as such, in this case, the reporter can only state the laws of Ohio which were drawn into question.

In 1834, the Legislature of Ohio passed an act incorporating the Ohio Life Insurance & Trust Company, with power, amongst other things, to issue bills or notes until the year 1833. One section of the charter provided that no higher taxes should be levied on the capital stock or dividends of the company than are or may be levied on the capital stock or dividends of incorporated banking institutions in the state.

In 1836, the legislature passed an act to prohibit the circulation of small bills. This act provided, that if any bank should surrender the right to issue small notes, the treasurer should collect a tax from such bank of five percent upon its dividends; if not, he should collect twenty percent. The Life Insurance & Trust Company surrendered the right.

In 1838, this law was repealed.

In 1845, an act was passed to incorporate the State Bank of Ohio and other banking companies. The 60th section provided that each company should pay, annually, six percent upon its profits, in lieu of all taxes to which such company or the stockholders thereof, on account of stocks owned therein, would otherwise be subject.

In 1851, an act was passed to tax banks and bank and other stocks, the same as other property was taxable by the laws of the state.

There was nothing in previous legislation to exempt the Life Insurance & Trust Company from the operation of this act.

This case was brought up from the District Court of the State of Ohio, in and for the County of Hamilton, by a writ of error issued under the 25th section of the Judiciary Act. The court was held by the Honorable John A. Corwin, Chief Justice of the Supreme Court of the State of Ohio, presiding, and the Honorable Alfred G. W. Carter, and the Honorable Edward Woodruff, and the Honorable John B. Stalle, Judges of the Court of Common Pleas, in and for the county of Hamilton, associates.

The following certificate, which was a part of the record, explains the nature of the case:

"And thereupon, on motion of the counsel for the said The Ohio Life Insurance & Trust Company, defendants, it is ordered to be certified and made a part of the record that the said company did set up, by way of defense to the prayer of the bill of complainants, a certain act of the general assembly of this state, entitled 'An act to incorporate the Ohio Life Insurance & Trust Company,' passed the twelfth day of February in the year eighteen hundred and thirty-four, and also a certain other act of the general assembly, entitled 'An act to prohibit the circulation of small bills,' passed the fourteenth day of March, in the year eighteen hundred and thirty-six; and thereupon

Page 57 U. S. 417

claimed, that in virtue of the said acts, and of the instrument of writing, 'Exhibit B,' attached to its answer, the general assembly of this state had entered into a contract with the said company never to impose upon the property of the said company a greater or different burden of taxation than five percent upon its dividends of net profits, and that therefore the act of the general assembly, 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,' passed the twenty-first day of March, in the year eighteen hundred and fifty-one, impaired the obligation of a contract, and therein was repugnant to the Constitution of the United States; but the court decided that there was no conflict between the said several acts, for the reason that the said act passed the fourteenth day of March, in the year eighteen hundred and thirty-six, expired, and ceased to have any effect or operation as respects The Ohio Life Insurance & Trust Company, on the first day of January, in the year eighteen hundred and forty-three, when the power of the said company to issue bills of notes for circulation expired and ceased by the terms of the said act passed the twelfth day of February, in the year eighteen hundred and thirty-four; and that there was, therefore, at the date of the said act passed the twenty-first day of March, in the year eighteen hundred and fifty-one, no such contract, agreement, pledge, or understanding as the said company claimed; and that the said act passed the twenty-first day of March, in the year eighteen hundred and fifty-one, was, in that respect, constitutional and valid; and it was ordered to be further certified on the same motion that the said company did likewise set up by way of defense to the prayer of said bill a certain act of the general assembly of this state, entitled 'An act to incorporate the State Bank of Ohio and other banking companies,' passed the twenty-fourth day of February, in the year eighteen hundred and forty-five, and thereupon claimed that in virtue of the said last-mentioned act, and of the said act passed the twelfth day of February, in the year eighteen hundred and thirty-four, the general assembly of this state had entered into a contract with the said company not to impose upon the property of the said company a greater or different burden of taxation than six percent upon its dividends of net profit, until after the first day of May, in the year eighteen hundred and sixty-six, and that therefore the act of the said general assembly, 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,' passed the twenty-first day of March, in the year eighteen hundred and fifty-one, impaired the obligation of a contract, and therein was repugnant to the Constitution of the United States;

Page 57 U. S. 418

but the court decided that the said act passed the twenty-fourth day of February, in the year eighteen hundred and forty-five, contained no pledge on the part of the state not to alter the amount, or the mode of taxation therein specified, but that the taxing power of the general assembly of this state over the property of companies formed under that act, was and is the same as over the property of individuals, and that there was, consequently, no such contract, agreement, pledge, or understanding as the said company claimed, and that whether the franchises of companies organized under the said last-mentioned act could not be revoked, changed, or modified, the said act passed the twenty-first day of March, in the year eighteen hundred and fifty-one did not, upon any construction, impair any right secured to such companies, by the said act passed the twenty-fourth day of February, in the year eighteen hundred and forty-five, and that the said act passed the twenty-first day of March, in the year eighteen hundred and fifty-one, was therefore a constitutional and valid law. And it is ordered to be certified also that the question of the validity of the said act passed the twenty-first day of March, in the year eighteen hundred and fifty-one, was material and necessary to the decision of this cause, and that the validity of the said act was drawn in question in the manner and to the intent herein before specified as being repugnant to the Constitution of the United States, and that the decision of the court was in favor of the validity of the said law. And it is further certified that this Court is the highest court of law and in equity in the State of Ohio, in which a decision in this suit can be had."

The several acts mentioned in the above certificate are stated in the opinions delivered by the judges of this Court, and it is not necessary to set them forth in extenso.

Page 57 U. S. 427

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