State v. Southern Bank

Ludeling, C. J. This suit is to compel the defendant to pay one thousand dollars as a license for the year 1S70, for the privilege of banking. The bank avers that by its charter and the law authorizing free banks to be established (which forms a part of the charter), free banks are exempted from paying a license for carrying on their business. There was judgment in favor of the plaintiff, and the defendant has appealed. It is admitted by the Attorney General that this question was decided in the case of New Orleans v. Southern Bank, 11 An. 42, but he insists, in the brief filed, that we should overrule it. In that case the court said: “We must, therefore, conclude that this section was intended [272] for the security-of the capitalist and an assurance to him that, if he invested his money in the banks, under this general banking law, his stock should be taxed at the same rate as other personal property. So far, then, this section possesses the force of an obligation, binding alike upon the State and all municipal and other corporations deriving their authority from this State. We are unable to concur with those who contend that this opinion is erroneous. To induce capitalists to invest their funds in institutions which would meet the public wants, the Legislature proffered that they might do so, upon certain terms and conditions and under the liabilities and penalties stipulated. The proposition was accepted. It is, therefore, a contract, binding upon the State as well as the bank. “ A contract between the State and individuals is as obligatory as any other contract. Until a State is lost to all sense of justice and propriety she will scrupulously abide by her contracts, more scrupulously than she will exact their fulfillment by the opposite contracting party.” In Fletcher v. Peck, 6 Cranch 135, Chief Justice Marshall said: “ If an act be done under a law, a succeeding Legislature cau not undo it.” . Article seventeen of section three of the revenue act of 1869, which imposes a license tax upon the occupation of defendant, is violative of section ten of article one of the Constitution of the United States. . It is therefore ordered and adjudged that the judgment of the court •a gw be avoided and reversed, and that there be judgment rejecting the plaintiff's demand, with costs of both courts.