City of New Orleans v. Southern Bank

Merrick, C. J.

The general banking law, approved April 30th, 1833, in regard to the privileges and immunities granted under it, is as much a contract with the individual corporations formed under the Act, as would be a special Act of incorporation containing the like provisions.

So long as nothing is said in the Act of incorporation on the subject of taxation, that power must be considered as reserved to the Legislature, it being one of the most important rights of sovereignty.

It must follow that the thirty-fifth section of the Act under consideration, was a useless provision if it were intended to secure to the State the right of taxation, for it was not necessary for the State to stipulate for this right with any of her citizens.

*42'We must therefore conclude, that this section was intended 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, that his stock should be taxed at the same rate as other personal property. It was an assurance that it should not be taxed in an}!- other manner. 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 the State.

A majority of the court, therefore, is of opinion that the banks organized under the above mentioned Free Ranking Law, are not subject to taxation in the form attempted.

It is, therefore, ordered, adjudged and decreed by the court, that the judgment of the lower court be avoided and reversed, and there be judgment against the plaintiff and in favor of the defendant, and that the plaintiff pay the costs of both courts.