Sec. 10.-Powers Denied to States Cl. 1.-Contracts-Miscellaneous Payment of private debts.-Prior to the passage of the bank guarantee law of Kansas (Laws 1909, c. 61), a banking corporation of that State had no authority under the statutes to use its property for the payment of the private debt of a third party for which it was in no way liable. By such act any such banking corporation having the required qualifications was authorized to accept its provisions by a vote of its directors, authorized by its stockholders, and on such acceptance was required to make a deposit of bonds or cash with the State treasurer and to pay assessments annually to create a State fund to be used to secure the payment in full of certain classes of depositors in any insolvent bank which had accepted its provisions. Held that, as against a nonconsenting stockholder of a bank previously organized which accepted its provisions, such act was unconstitutional and void, as impairing the obligation of his contract as a stockholder, since the State, having no power to take the property of the corporation to pay the private debt of another, such as that of another bank to a depositor, could not authorize the corporation to so use it as against a dissenting stockholder. Larabee v. Dolley, 175 Fed. 305, order reversed in Dolley v. Abilene Every valuable privilege given by the charter of a bank and which conduced to an acceptance of it and an organization under it, is a contract which cannot be changed by the legislature where power to do so is not reserved in the charter. the State Bank of Ohio v. Knoop, 16 How. 380. See also Crawford v. Branch Bank, 7 How. 282, as to authorizing suits on notes. Escheat of deposits to State.-Law escheating, through appropriate procedure, deposits long unclaimed does not violate contract rights of banks. Security Bank v. California, 263 U. S. 282. State Bank of Ohio v. Knoop, 16 How. 377. Mechanics' etc., Bank v. Debolt, 18 How. 380. See also Providence Bank v. Billings, 4 Pet. 558, as to taxation of capital stock. Clement Nat. Bank v. Vermont, 231 U. S. 120, as to tax on bank deposits. Bank of Kentucky v. Kentucky, 207 U. S. 258, as to changing date of assessment of bank for taxation. Bank of Oxford v. Love, 250 U. S. 603, as to providing for reasonable examinations and reports and an enforced contribution of the bank therefor. National Safe Deposit Co. v. Stead, 232 U. S. 58, as to contracts of safe deposit companies. 1 See same subject, pp. 74, 180, 315, 600, 636, 707, 728, and 745. Sec. 10.-Powers Denied to States Cl. 1.-Contracts-Miscellaneous A State legislature has no power to legalize the suspension of specie payments by a bank, nor to extend the time for such payments, as any such law would impair contracts. Godfrey v. Terry, 97 U. S. 171. Contracts of bridge and ferry companies.-A charter granted to a bridge or ferry corporation is a contract. A new ferry or bridge materially diverting travel or business from an old one established under a prior charter is not unconstitutional unless the franchise under such charter is expressly made exclusive. A franchise to operate a ferry in the neighborhood of a prior ferry does not impair any obligation in the ferry franchise, and the licensing of one ferry can not preclude the licensing of a second parallel ferry. A franchise may be, in terms, exclusive, and when this is so a contract exists which the legislature can not impair. Bridge Proprietors v. Hoboken Co., 1 Wall. 116. Charles River Bridge v. Warren Bridge, 11 Pet. 544. East Hartford v. Hartford Brdg. Co., 10 How. 533. Mills v. St. Clair County, 8 How. 581. See also The Binghamton Bridge, 3 Wall. 51. Covington, etc., Co. v. Sandford, 164 U. S. 578. Conway v. Taylor, 1 Black 603. Wheeling, etc., Brdg. Co. v. Wheeling Brdg. Co., 138 U. S. 292. Williams v. Wingo, 177 U. S. 601. Where New York and Canadian companies, after consolidation, constructed a bridge over Niagara River for railroad uses only, held, that new company had no contract immunity from being required to add foot and carriage ways in New York, as contemplated by both original charters, irrespective of whether the duty, expressed positively in the Canadian charter, attached to the consolidation in New York. International Bridge Co. v. New York, 254 U. S. 126. Contracts of turnpike and canal companies.-The charters of turnpike and canal companies, like other charters, are contracts within the meaning of the obligation clause. The licensing of a new road or canal materially diverting travel or business from an old one established under a prior charter is not unconstitutional unless the franchise is defined or made exclusive. Chesapeake & Ohio Canal Co. v. Baltimore, etc., R. Co., 4 Gill. & J. 1. Carondelet Canal, etc., Co. v. Louisiana, 233 U. S. 362. Columbia Water Power Co. v. Columbia St. R., etc., Co., 172 U. S. 475. A claim of immunity from legislative control of tolls to be exacted by a corporation authorized to construct a road is subject to the same rule of strict interpretation as a grant of immunity from taxation, and an exemption from the exercise of the State's right in this regard will never be implied from anything short of an explicit unequivocal provision. Covington Turnpike Co. v. Sandford, 164 U. S. 578. Pennsylvania R. Co. v. Miller, 132 U. S. 84. Perrine v. Chesapeake, etc., Canal Co., 9 How. 192. Sec. 10.-Powers Denied to States Cl. 1.-Contracts-Miscellaneous Contracts of subway companies.-A State statute creating a board of commissioners of electrical subways, and requiring all companies to obtain its approval of their plans and specifications before commencing work, and during the progress thereof, to submit to such modifications and regulations as the board may prescribe, is applicable to a company organized under a prior act, though it had previously obtained permission from the city by an ordinance providing minute regulations as to the form, size, and location of the subways, and requiring the work to be done under the supervision of the commissioner of public works, and no substantial right and the obligation of no contract is impaired by the act. New York v. Squire, 145 U. S. 175. Clause 2.-IMPOSTS AND DUTIES. No State shall, without the Consent of the Congress, lay any Imposts or Duties on Imports or Exports, except what may be absolutely necessary for executing its inspection Laws: and the net Produce of all Duties and Imposts, laid by any State on Imports or Exports, shall be for the Use of the Treasury of the United States; and all such Laws shall be subject to the Revision and Control of the Congress. Leading Cases Pittsburg Coal Co. v. Louisiana (156 U. S. 590), where the court said that "The terms "imports' and 'exports' apply only to articles imported from foreign countries or exported to them." Woodruff v. Parham (8 Wall. 123), where it was held that the term "imports" in this sense refers to articles imported from foreign countries into the United States and not to articles imported from one State into another. Low v. Austin (13 Wall. 33), in which the court said: When the importer has so acted upon the thing imported that it has become incorporated and mixed up with the mass of property in the country, it has, perhaps, lost its distinctive character as an import, and has become subject to the taxing power of the State. May v. New Orleans (178 U. S. 508), the "original package" doctrine in connection with imports.1 Nathan v. Louisiana (8 How. 81), establishing the rule that "Before the article becomes an export, or after it ceases to be an import, by being mingled with other property in the State, it is a subject of taxation by the State." See also American Steel, etc., Co. v. Speed, 192 U. S. 500. 1 See also same subject, pp. 139 and 193. Sec. 10.-Powers Denied to States Cl. 2.-Imposts and Duties Turner v. Maryland (107 U. S. 54), in which the court said: It is a circumstance of weight that the laws referred to in the Constitution are by it made "subject to the revision and control of Congress." Congress may, therefore, interpose, if at any time any statute, under the guise of an inspection law, goes beyond the limit prescribed by the Constitution, in imposing duties or imposts on imports or exports. McLean v. Denver, etc., R. Co. (203 U. S. 38), holding that the language "except what may be absolutely necessary for executing its inspection laws" is not violated by a State inspection law, which applies to goods shipped only from one State to another. Construction and Application In General States can not lay imposts or duties on imports or exports, except what may be absolutely necessary to execute their inspection laws, not because Congress may lay and collect taxes, duties, imposts, and excises, but because the Constitution expressly provides that no State shall exercise that power without the consent of the Congress. Hamilton Company v. Massachusetts, 6 Wall. 639. The sole limitation upon the taxing power of the State is the inhibition upon duties of tonnage or imposts upon exports and imports. Railroad Co. v. Peniston, 18 Wall. 29. Application to Persons Inspection laws, and the words "imports or exports" as used in this clause, refer to property and not to persons, and can have no reference to free human beings. People v. Compagnie Gen, Transatlantique, 107 U. S. 59. Imports and Exports "Imports" within the Constitutional prohibition upon the States against taxing imports means goods from a foreign country. The prohibition does not embrace goods brought from other States, and a tax upon such goods is not invalidated by this clause. The term "imports" being applied to articles brought from foreign countries, e converso the term "exports" is applicable, under this clause, only to goods sent to foreign countries. Brown v. Maryland, 12 Wheat. 419. Woodruff v. Parham, 8 Wall. 123. Patapsco Guano Co. v. North Carolina, 171 U. S. 350. License Cases, 5 How. 594. Hinson v. Lott, 8 Wall. 148. Case of State Freight Tax, 15 Wall. 232. Guy v. Baltimore, 100 U. S. 434. Brown v. Houston, 114 U. S. 628. Pittsburgh Coal Co. v. Bates, 156 U. S. 587. Pittsburgh, etc., Coal Co. v. Louisiana, 156 U. S. 600. Dooley v. U. S., 182 U. S. 222. McLean v. Denver, etc., R. Co., 203 U. S. 38. 12703°-S. Doc. 157, 68-1 -27 Sec. 10.-Powers Denied to States Cl. 2.-Imposts and Duties Goods in the lower harbor of Mobile, bought so as to remain at the risk of the vendor and being entered and the duty secured before transshipment, are imported before purchase, and a tax upon the purchaser is not a tax on imports; but a statute taxing imports as imports on their way to become incorporated with the general mass of property is unconstitutional. So with exports; goods collected at the entrepot are not yet exports nor in process of exportation; exportation does not begin until goods are committed to a carrier for transportation or have started on their ultimate passage to their destination. Waring v. Mayor, 8 Wall. 118. Emert v. Missouri, 156 U. S. 313. Coe v. Errol, 116 U. S. 525. State Tax on Railway Gross Receipts, 15 Wall. 284. Leisy v. Hardin, 135 U. S. 108. In Austin v. Tennessee (179 U. S. 351) the court said: A casual remark, however, made by Chief Justice Marshall in that case (Brown v. Maryland, 12 Wheat. 419) that "we suppose the principles laid down in this case to apply equally to importations from a sister State," was subsequently considered in Woodruff v. Parham (8 Wall. 123) and was held to have no application to commerce between the States, the court deciding that the term "import," as used in that clause which declares that "no State shall levy any imposts or duties on imports or exports," did not refer to articles imported from one State into another, but only to articles imported from foreign countries into the United States. In that case an ordinance of the city of Mobile, authorizing a tax upon sales at auctions, was held to be applicable to products of States other than Alabama, although the articles were sold in the original and unbroken packages. Whatever primary meaning be indicated by its derivation, the word "export," as used in the Constitution and laws of the United States, generally means the transportation of goods from this to a foreign country. Swan & Finch Co. v. U. S., 190 U. S. 143. State Taxation 1 Definition of "Impost" An "impost is a tax levied on articles brought into the country; it is not merely a duty on the act of importation but a duty on the thing imported; it is a duty on imported goods and merchandise. Brown v. Maryland, 12 Wheat. 419. Hinson v. Lott, 8 Wall. 148. Definition of "Duties" "Duties" are defined to be things due and recoverable by law. Applied in its widest signification, the term is hardly less comprehensive than "taxes," and in its most restricted meaning as to customs it is almost the synonym of "imposts." The 1 See same subject, pp. 180, 315, 362, 600, 636, 707, 728, and 745. |