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business. The legislative charter provided whatsoever so long as said tax shall be paid that the corporation should exist for a period during the corporate existence of such of thirty years from the date of the act, and

in section 7 it was provided that on the first day of January in each year the bank should pay "into the state treasury, for the benefit of revenue proper, fifty cents on each one hundred dollars of stock held and paid for in said bank, which shall be in full of all tax and bonus thereon of every kind."

At the time this charter was granted there existed on the statute books of Kentucky a law enacted February 14, 1856, providing as

follows:

"Sec. 1. That all charters and grants of or to corporations, or amendments thereof, and

banks.

"Sec. 5. The said bank may take the proceeding authorized by section 4 of this act at any time until the meeting of the next general assembly: Provided, They pay the tax provided in section 1 from the passage of this act.

"Sec. 6. This act shall be subject to the provisions of section eight (8), chapter sixtyeight (68), of the General Statutes.

"Sec. 7. If any bank, state or national,
shall fail or refuse to pay the tax imposed by
this act, or shall fail or refuse to make the [639]
consent and agreement as prescribed in section

all other statutes, shall be subject to amend-4, the shares of stock of such bank, institu-
ment or repeal at the will of the legislature, tion, or corporation, and its surplus, undi-
unless a contrary intent be therein plainly vided accumulations and undivided profits,
expressed: Provided, That whilst privi- shall be assessed as directed by section
leges and franchises so granted may be 2 of this act, and the taxes-state,
changed or repealed, no amendment or repeal county, and municipal-shall be imposed,

shall impair other rights previously vested.

"Sec. 3. That the provisions of this act shall only apply to charters and acts of incorporations to be granted hereafter; and that this act shall take effect from its passage."

It would seem that from the date of its creation until the year 1886 the bank was called upon to pay only the taxes provided in the seventh section of its charter. In 1886 (Session Acts of Kentucky 1885-6, pp. 144 to 147; Id. 201) the legislature of Kentucky [638]adopted what is designated in the *briefs of counsel as the Hewitt act, containing the following provisions as to the taxation of banks:

levied, and collected upon the assessed shares,
surplus, undivided profits, undivided accu-
mulations, as is imposed on the assessed tax-
able property in the hands of individuals:
Provided, That nothing herein contained
shall be construed as exempting from taxa-
tion for county or municipal purposes any
real estate or building owned and used by
said banks or corporations for conducting
their business, but the same may be taxed for
county and municipal purposes as other real
estate is taxed."

The Citizens' Savings Bank accepted the
Hewitt act in the mode provided, and there-
after paid the tax specified therein.

In 1891 Kentucky adopted a new Constitution, which contained the following:

"Sec. 174. All property, whether owned by natural persons or corporations, shall be taxed in proportion to its value, unless exempted by this Constitution; and all corporate property shall pay the same rate of taxation paid by individual property. Nothing in this Constitution shall be construed to prevent the general assembly from providing for taxation based on income, licenses, or franchises."

"Sec. 1. That shares of stock in state and national banks, and other institutions of loan er discount, and in all corporations required by law to be taxed on their capital stock, shall be taxed 75 cents on each share thereof, equal to $100, or on each $100 of stock therein owned by individuals, corporations, or societies, and said banks, institutions, and corporations shall, in addition, pay upon each $100 of so much of their surplus, undivided surplus, undivided profits, or undivided accumulations as exceeds an amount equal to 10 per cent of their capital stock, which shall be in full of all tax, state, coun-ties, and municipalities, of banking and

ty, and municipal.

"Sec. 4. That each of said banks, institutions, and corporations, by its corporate authority, with the consent of a majority in interest of a quorum of its stockholders, at a regular or called meeting thereof, may give its consent to the levying of said tax, and agree to pay the same as herein provided, and to waive and release all right under the act of Congress, or under the charters of the state banks, to a different mode or smaller rate of taxation, which consent or agreement to and with the state of Kentucky shall be evidenced by writing under the seal of such bank and delivered to the governor of this commonwealth; and upon such agreement and consent being delivered, and in consideration thereof, such bank and its shares of

The state of Kentucky, in 1892, enacted a
law providing, among other things, for the
assessment and taxation by the state, coun-

other corporations. This law was in abso-
lute conflict with the Hewitt act, and by
special provision as well as by necessary
legal intendment operated, if the Constitu-
tion had not already done so, to repeal the
system of bank taxation established by the
Hewitt act. Without detailing the scheme
of taxation created by the law of 1892, it
suffices to say that it organized a state
board whose duty it was to ascertain and fix
the value of what was termed the franchises
of banks and other corporations, referred to
in the law, and upon the amount so fixed the
general state tax was levied. It was besides
made *the duty of the board to certify its [640]
valuation of the property or franchises to
the proper county or municipality in which
the corporation was located, so that the sum
of this assessment might become the basis

stock shall be exempt from all other taxation upon which the local taxes should be laid.

The city of Owensboro, where the Citizens' Savings Bank was located, established by ordinances the rate of municipal taxes for the years 1893 and 1894, and the sum so fixed was assessed upon the valuation of the franchises or property of the bank which had been certified by the state board in claimed conformity to the statute of 1892. The bank refused to pay these taxes, and a levy was made by the tax collector upon some of its property, and garnishment process was also issued against several of its debtors. Thereupon this suit was commenced by a petition, on behalf of the bank, to enjoin the city of Owensboro and its tax collector from enforcing the taxes in question.

The averments of the petition, and of the amendments thereto-for it was twice amended-assailed the validity of the tax on several grounds, all of which are substantially included in the following summary:

First. That the board of state valuation had no power under the Constitution and laws of the state to make an assessment for local taxation, and, if it had such power, had

a

In further support of this ground the petition charged that at the time the Hewitt act was passed the bank had an irrevocable contract arising from section 7 of its charter limiting taxation to the sum there specified, which right the bank had surrendered in consequence of the contract embodied in the Hewitt act. It was averred that this surrender of its contract right to enjoy the limited taxation, conferred by its charter, was a valid consideration moving between the bank and the state, operating to cause the Hewitt act to become a contract upon adequate consideration.

A preliminary injunction restraining the collection of the taxes was allowed. The city of Owensboro demurred to the petition and to the various amendments thereof, and, reserving its demurrers, answered traversing the averments of the original petition and the amendments thereto. Motions were made to dissolve the injunction. On these motions testimony was taken and the case was heard on the motions to dissolve, and on the demurrers. The trial court dissolved the injunc

affirmed. [19 Ky. L. Rep. 248], 39 S. W. 1030.

The opinion of the Kentucky court of appeals contained, not only the reasons applicable to the case we are now considering, but also such as were by it considered relevant to several other cases which, it would seem, were either heard by that court at the same time or were decmed by the court to present so many cognate questions as to enable it to embrace the several cases in one opinion. In so far as it related to this cause, the opinion fully examined and disposed of the question of contract and the issues consequent thereon. An application on behalf of the appellant was thereafter filed, styled "Petition for extension of opinion and reversal." This application, whilst declaring that the appellant could not assent to the conclusion of the court on the question of the existence of an irrevocable contract, protected from impairment by the Constitution of the United States, asked no rehearing on that subject. The grounds for rehearing, which were elaborately pressed, related solely to certain questions of law which it was argued the record presented, and which it was claimed depended on the state law and Constitution. There was no contention that these issues invoived the Constitution or laws of the United States.

not exercised it lawfully, because the method tion, sustained the demurrers, and dismissed of valuation pursued by it was so arbitrary the suit. On appeal to the court of appeals [642] as to cause its action to be void. Second. of Kentucky the decree of the trial court was That no notice of the assessment had been given the officials, as required by the state law. Third. That the taxes violated the equality clause of the state Constitution, because, by the method adopted in making the assessment, the property of the bank had been valued by rule which caused it to be assessed at proportionately one third more than the sum assessed against other property in the city of Owensboro, and by one half more than the valuation at which the property of other taxpayers throughout the state was assessed. Fourth. That the taxes violated the state law and Constitution, because based upon an assessment made by the state board, and not on an assessment made by the city, and that they were likewise illegal, because the levy [641]of the tax predicated upon the assessment, by the state board, was dehors the powers of the city of Owensboro under the state laws. Fifth. That the taxes moreover violated the equality clause of the state Constitution, because, as there were certain national banks doing business in the city of Owensboro, against whom the franchise tax provided by the state law could not be enforced without a violation of the law of the United States, therefore these banks could not be taxed for the franchise tax, and not to tax them, whilst taxing the petitioner, would bring about inequality of taxation, and hence be a violation of the state Constitution. Sixth. The taxes were expressly and particularly attacked on the ground that the Hewitt act, and the acceptance of the terms thereof, constituted an irrevocable contract, between the state and the bank, exempting it from all taxation other than as specified in the Hewitt act, and therefore that the revenue act of 1892 and the levy of the taxes in question by the city of Owensboro violated the contract rights of the bank, which were protected from impairment by the Constitution of the United States.

All the assignments of error but the eighth and ninth relate to errors charged to have been committed by the court below in holding that there was no contract protected from impairment by the Constitution of the United States. The eighth assignment asserts that there was error in allowing a penalty for the nonpayment of the taxes, because such penalty was by the state law imposed only upon corporations and not on other taxpayers, and therefore the state law violated the Fourteenth Amendment to the Constitution of the United States. The ninth assignment charges that there was error in

in the Bank Tax Cases above cited, upon the question of contract, was not only in conflict with the settled adjudications of this court, but also inconsistent with sound principle, we will not adopt its conclusions.

of thought involved in the contention. It
was upon the distinction existing between
the implication of the power to amend, al-
ter, or repeal, and its express statement in
a contract, that the case of New Jersey ▼.
Yard, 95 U. S. 104 [24: 352], proceeded, and
that case is therefore wholly inapposite to
the controversy here presented.

It was earnestly argued that conceding the general rule to be that a reserved power to repeal, alter, or amend enters into and forms a part of all subsequent legislative enact- The argument predicated on what is said ments, nevertheless this case should not be to be the peculiar language of the act of controlled thereby, first, because of peculiar 1856 is this: That act, whilst reserving the conditions which it is asserted existed at the right to amend or repeal "all charters and time the Hewitt law was enacted, and, sec- grants of or to corporations, or amendments ond, because of the terms of the act of 1856 thereof, and all other statutes," accompanied by which the power to repeal, alter, or amend this reserved right with the restriction that was reserved. The conditions relied upon it should not be exercised where "a contrary[650] and stated in argument as removing this intent be therein plainly expressed (in the case from the operation of the general prin- act creating the right), provided, that whilst ciple are as follows: When the Hewitt law privileges and franchises so granted may be was enacted there existed much uncertainty changed or repealed, no amendment or reas to the power of the state of Kentucky to peal shall impair other rights previously tax banks within its borders. There were vested." The bank, it is asserted, had under banks claiming to be only subject to limited its charter a right to be taxed only to a taxation because of charters enacted prior to limited amount; and this, it is claimed, conthe act of 1856. Again, there were other stituted a contract which was surrendered banks asserting a like right because of char- on the theory that the Hewitt law was irrevters adopted since 1856, but which, it was ocable, and if it were not so, then there was said, were not dominated by that act. In no surrender of the right under the charter, consequence of these pretensions on behalf of and therefore it now exists. This contenstate banks which were then undetermined, tion, however, but states in another form the the national banks, organized in the state, claims which we have already disposed of. were insisting that they were subject only The charter was conferred on the bank subto the rate of taxation to which the most sequent to the act of 1856, and the limit of favored state bank was liable, because it was taxation stated in the charter was therefore urged that to tax such banks at a higher rate subordinated to that act and subject to the would be a discrimination in favor of these exercise of the power of amendment or rebanks and against the national banks, which peal. True it is in Franklin County Court was forbidden by the law of the United v. Deposit Bank of Frankfort (June, 1888, States. To add to this complexity, it is said, 87 Ky. 382) the court of appeals of Kenthe varying rate of local taxation was oper- tucky decided that a grant, after the act of ating inequality among banks, and driving 1856, of an exemption from taxation for a banking capital from the localities where the designated time, signified such a plain manitax was highest, thus producing a public festation of the will of the legislature that detriment. To assuage these difficulties and the grant should not be subject to alteration conflicts, to secure as to all banks, state and or amendment, that the right so conferred national, a uniform and higher rate of state was therefore not submitted to the parataxation than that existing as to other prop-mount power of repeal or amendment reerty, it is asserted that the Hewitt law tendered to all banks a contract giving freedom from local burdens if a higher state tax was voluntarily paid. This must have been contemplated to be irrevocable, for otherwise the very object of the law could not have been accomplished. Conceding, arguendo, to the fullest degree the situation to have been as described, the conclusion sought to be deduced from it is wholly unsound, since it disregards the fact that the contract proposed and which was actually entered into contained an express reservation of the right to repeal, alter, or amend. Indeed, the contention, when analyzed, amounts to this, that the plain letter of the contract should be disregarded upon the theory that the parties intended to make a different contract from that which they actually entered into. The distinction between the potentiality of a particular state of facts, for the purpose of preventing the implication of the reserved power to alter, amend, or repeal, and the impotency of such facts to overcome the express and unambiguous provisions of the contract, at once demonstrates the confusion

served by the act of 1856. This decision,
however, was rendered long after the enact-
ment of the charter of the bank, whose
rights are now before us, and has been ex-
pressly overruled by the court of appeals in
the case which we are reviewing. The doc-
rine settled by the adjudications of this
court is this: That the mere grant for a
designated time of an immunity from taxa-
tion does not take it out of the rule subject-
ing such grant to the general law retaining
the power to amend or repeal, unless the
granting act contain an express provision to
that effect. The doctrine on which the argu-
ment depends is that any grant for a desig-
nated time is by implication taken out of
the general rule, even although there be no
express provision to that end in the act mak-
ing the grant.

The assertion that wherever it is stated in
a legislative grant or charter that it is to[651]
last for a given period of time, therefore such
provision is a plain manifestation of the in-
tention of the legislature that the grant or
charter shall not be repealed or amended for
the time for which it was declared that it

The city of Owensboro, where the Citizens' Savings Bank was located, established by ordinances the rate of municipal taxes for the years 1893 and 1894, and the sum so fixed was assessed upon the valuation of the franchises or property of the bank which had been certified by the state board in claimed conformity to the statute of 1892. The bank refused to pay these taxes, and a levy was made by the tax collector upon some of its property, and garnishment process was also issued against several of its debtors. Thereupon this suit was commenced by a petition, on behalf of the bank, to enjoin the city of Owensboro and its tax collector from enforcing the taxes in question.

The averments of the petition, and of the amendments thereto for it was twice amended-assailed the validity of the tax on several grounds, all of which are substantially included in the following summary:

First. That the board of state valuation had no power under the Constitution and laws of the state to make an assessment for local taxation, and, if it had such power, had not exercised it lawfully, because the method of valuation pursued by it was so arbitrary as to cause its action to be void. Second. That no notice of the assessment had been given the officials, as required by the state law. Third. That the taxes violated the equality clause of the state Constitution, because, by the method adopted in making the assessment, the property of the bank had been valued by a rule which caused it to be assessed at proportionately one third more than the sum assessed against other property in the city of Owensboro, and by one half more than the valuation at which the property of other taxpayers throughout the state was assessed. Fourth. That the taxes violated the state law and Constitution, because based upon an assessment made by the state board, and not on an assessment made by the city, and that they were likewise illegal, because the levy [641]of the tax predicated upon the assessment, by the state board, was dehors the powers of the city of Owensboro under the state laws. Fifth. That the taxes moreover violated the equality clause of the state Constitution, because, as there were certain national banks doing business in the city of Owensboro, against whom the franchise tax provided by the state law could not be enforced without a violation of the law of the United States, therefore these banks could not be taxed for the franchise tax, and not to tax them, whilst taxing the petitioner, would bring about inequality of taxation, and hence be a violation of the state Constitution. Sixth. The taxes were expressly and particularly attacked on the ground that the Hewitt act, and the acceptance of the terms thereof, constituted an irrevocable contract, between the state and the bank, exempting it from all taxation other than as specified in the Hewitt act, and therefore that the revenue act of 1892 and the levy of the taxes in question by the city of Owensboro violated the contract rights of the bank, which were protected from impairment by the Constitution of the United States.

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In further support of this ground the petition charged that at the time the Hewitt act was passed the bank had an irrevocable contract arising from section 7 of its charter limiting taxation to the sum there specified, which right the bank had surrendered in consequence of the contract embodied in the Hewitt act. It was averred that this surrender of its contract right to enjoy the limited taxation, conferred by its charter, was a valid consideration moving between the bank and the state, operating to cause the Hewitt act to become a contract upon adequate consideration.

A preliminary injunction restraining the collection of the taxes was allowed. The city of Owensboro demurred to the petition and to the various amendments thereof, and. reserving its demurrers, answered traversing the averments of the original petition and the amendments thereto. Motions were made to dissolve the injunction. On these motions testimony was taken and the case was heard on the motions to dissolve, and on the demurrers. The trial court dissolved the injunetion, sustained the demurrers, and dismissed the suit. On appeal to the court of appeal-l of Kentucky the decree of the trial court was affirmed. [19 Ky. L. Rep. 248], 39 S. W. 1030.

The opinion of the Kentucky court of ap peals contained, not only the reasons applicable to the case we are now considering. but also such as were by it considered relevant to several other cases which, it would seen, were either heard by that court at the same time or were deemed by the court to present so many cognate questions as to enable it to embrace the several cases in one opinion. In so far as it related to this cause, the opinion fully examined and disposed of the question of contract and the issues consequent there on. An application on behalf of the appellant was thereafter filed, styled "Petition for extension of opinion and reversal." This application, whilst declaring that the appel lant could not assent to the conclusion of the court on the question of the existence of an irrevocable contract, protected from impair ment by the Constitution of the United States, asked no rehearing on that subject. The grounds for rehearing, which were elab orately pressed, related solely to certain questions of law which it was argued the ree ord presented, and which it was claimed de pended on the state law and Constitution. There was no contention that these issues invoived the Constitution or laws of the United States.

All the assignments of error but the eighth and ninth relate to errors charged to have been committed by the court below in holding that there was no contract protected from impairment by the Constitution of the United States. The eighth assignment asserts that there was error in allowing a peralty for the nonpayment of the taxes, be cause such penalty was by the state law im posed only upon corporations and not on other taxpayers, and therefore the state law vi olated the Fourteenth Amendment to the Constitution of the United States. The ninth assignment charges that there was error in

[642

holding the taxes to be valid because the acceptance by the banks constituted an irrev

property or franchise of the bank, on which the tax was levied, was assessed at its full value, whilst other taxpayers in the state were assessed at not more than seventy per cent of the value of their property, thus creating an inequality of taxation, equivalent [643]to a denial of the equal protection of the laws in violation of the Fourteenth Amendment to the Constitution of the United States.

We at the outset dispose of the eighth and ninth assignments just referred to. The questions which they raise are not properly here for consideration. They are not presented by the record nor do they result by necessary intendment therefrom. Indeed, they were excluded from the cause, as Federal questions, by the implications resulting from the pleadings. Whilst it was charged that the penalties were unlawful, there was no allegation that their enforcement would violate any Federal right. On the contrary, the petition and the amendments to it clearly placed the objection to the penalties on the ground that their enforcement would violate the state law and the state Constitution. The distinction between the state right thus asserted and the Federal right was clearly made when the only Federal issue which was relied on, the impairment of the obligation of the contract, was alleged, for then it was plainly stated to depend upon a violation of the Constitution of the United States. Even after the opinion of the court of appeals was announced there was not a suggestion made in the petition for rehearing that a single Federal question was considered by the parties as arising except the one which the court had fully decided, and as to which it was expressly declared a rehearing was not prayed. The assignments of error in question therefore simply attempt to inject injecti into the record a Federal question not lawfully therein found, never called to the attention of the state court by pleading or otherwise, and not nec

essarily arising for consideration in reviewing the judgment of the state court to which the writ of error is directed. But after a decision by the court of last resort of a state the attempt to raise a Federal question for the first time is too late. Miller v. Texas, 153 U. S. 535 [38: 812]; Loeber v. Schroeder, 149 U. S. 580 [37: 856]. It is also clear that where it is disclosed that an asserted Federal question was not presented to the state court or called in any way to its attention, and where it is not necessarily involved in the decision of the state court, such question will not be considered by this court. Louisville & N. R. Co. v. Louisville, 166 U. S. 709 [4]:1173]; Oxley Stave Co. v. Butler Coun[644]ty, 166 U. S. 648 [41: 1149]; "Kipley v. Illinois, 170 U. S. 182 [42:998]; Green Bay & Miss. Canal Co. v. Patten Paper Co. 172 U. S. 58 [ante, 364]; Capital Bank v. Cadiz Bank, 172 U. S. 425 [ante, 502]. We therefore decline to review the errors alleged in the eighth and ninth assignments, and passing their consideration are brought to the real Federal controversy which arises on the record that is the question of irrevocable contract.

The claim is that the Hewitt act and its

ocable contract, although at the time that
act was passed there was a general statute
of Kentucky reserving the right to repeal,
alter, or amend "all charters or grants of
or to corporations or amendments thereof
and all statutes" passed subsequent thereto,
and although this general statute was ex-
pressly made a part of the Hewitt act by the
sixth section thereof. The wording of the
sixth section accomplishing this result is:
"This act shall be subject to the provisions
of section 8, chapter 68, of the General Stat-
utes," the provision thus referred to being
the general law of 1856, reserving the power
to repeal, alter, or amend as above. When the
proposition relied upon is plainly stated and
its import clearly apprehended, no reasoning
is required to demonstrate its unsoundness.
In effect, it is that the contract was not sub-
ject to repeal, although the contract itself
in express terms declares that it should be
so subject at the will of the legislative au-
thority. The elementary rule is that if at
the time a corporation is chartered and given
either a commutation or exemption from tax-
ation, there exists a general statute reserv-
ing the legislative power to repeal, alter, or
amend, the exemption or commutation from
taxation may be revoked without impairing
the obligations of the contract, because the
reserved power deprives the contract of its
irrevocable character and submits it to leg-
islative control. The foundation of this rule
is that a general statute reserving the power
to repeal, alter, or amend is by implication
read into a subsequent charter and prevents
it from becoming irrevocable. In a case like
the one now considered where not only was
there a general statute reserving the power,
but where such general law was made by un-
ambiguous *language one of the provisions of[645]
the contract, of course the legislative power
to repeal or amend is more patently obvious
to the extent that that which is plainly ex-
pressed is always more evident than that
which is to be deduced by a legal implication.
In Tomlinson v. Jessup, 15 Wall. 454 [21:
204], in speaking of a contract exemption
from taxation arising from a charter, and of
the right to repeal the same springing from a
general law, reserving the power to alter or
amend, which existed at the time the charter
was conferred, the court, through Mr. Jus-
tice Field, said (p. 459 [21:206]):

"Immunity from taxation, constituting in these cases a part of the contract with the government, is, by the reservation of power such as is contained in the law of 1841, subject to be revoked equally with any other provision of the charter whenever the legislature may deem it expedient for the public interests that the revocation shall be made. The reservation affects the entire relation between the state and the corporation and places under legislative control all rights, privileges, and immunities derived by its charter directly from the state."

In Maine C. Railroad Co. v. Maine, 96 U. S. 499, 510 [24: 836, 841], the question was as to the liability to taxation of a consolidated corporation which came into existence while a general statute was in force, provid

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