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The objection, however, which was the case in which that opinion was most pressed upon the court, and re pronounced, was removed into this lied upon by the counsel for the plain court by writ of error, not from the sutiff in error, was, that the effect of this
preme court of a state, but from a ciract was to devest rights which were cuit couit. vested by law in Satterlee. There is The strong expressions of the court certainly no part of the constitution of upon this point, in the cases of Vanthe United States which applies to a horne's lessee vs. Dorance, and The state law of this description ; nor are Society for the Propagation of the we aware of my decision of this, or Gospel vs. Wheeler, were founded of any circuit court, which has con expressly on the constitution of the redemned such a law upon this ground, spective states in which those cases provided its effect be not to impair the
were tried. obligation of a contract ; and it has We do not inean in any respect to been shown, that the act in question impugn the correctness of the senti. has no such effect upon either of the ments expressed in those cases, or to contracts which have been before question the correctness of a circuit mentioned.
court, sitting to administer the laws of In the case of Fletcher vs. Peck, it a state, in giving to the constitution of was stated by the chief justice, that it that state a paramount authority over might well be doubted, whether the a legislative act passed in violation of nature of society and of government it. We intend to decide no more than do not prescribe some limits to the le that the statute objected to in this case gislative power; and he asks, "if any is not repugnant to the constitution of be prescribed, where are they to be the United States, and that unless it be found, if the property of an individual, so, this court has no authority, under fairly and honestly acquired, may be the 25th section of the judiciary act, seized without compensation ?" It is to re-examine and to reverse the judg. no where intimated in that opinion, ment of the supreme court of Pennsyl. that a state statute, which devests a vania in the present case. vested right, is regugnant to the con That judgment, therefore, must be stitution of the United States; and affirmed with costs.
Plowden Weston & al. vs. the City Council of Charleston.
This was a writ of error to the Con stock of this state, and stock of the stitutional Court of South Carolina. incorporated banks of this state and
On the 20th of February, 1823, an the United States bank excepted,) ordinance was passed by the City twenty-five cents upon every hundred Council of Charleston, providing what dollars." the following species of property, own A prohibition was granted, upon the ed and possessed within the limits of suggestion of the plaintiffs, by the the city of Charleston, shall be sub Court of Common Pleas for the ject to taxation in the manner, and at Charleston district, restraining the the rate, and conformably to the pro City Council from levying this tax on visions hereinafter specified ; that is the six and seven per cent. United to say, all personal estate, consisting States stock, on the ground that the of bonds, notes, insurance stock, six ordinance, so far as it imposed a tax and seven per cent. stock of the United on United States stock, was unconstiStates, or other obligations upon which tutional. interest has been or will be received This prohibition was reversed by the during the year, over and above the Constitutional Court of the state, by a interest which has been paid, (funded majority of the judges (four being in
favour of the constitutionality of the sues that remedy in a court of justice, ordinance, and three against it. From which the law affords' him. The this decision, the relators appealed to modes of proceeding may be various, the Supreme Court of the United but if a right is litigated between parStates.
ties in a court of justice, the proceedMr. Hayne for the plaintiffs. Mr. ing by which the decision of the court Crugar and l1r. Legare for the de- is sought, is a suit. The question befendants.
tween the parties, is precisely the same Chief Justice Marshall delivered the as it would have been in a writ of reopinion of the court.
plevin, or in au action of trespass. This case was argued on its merits The constitutionality of the ordinance at a preceding term ; but a doubt ha. is contested; the party aggrieved by ving arisen with the court respecting it applies to a court; and at his sugits jurisdiction in cases of prohibition, gestion, a writ of prohibition, the apthat doubt was suggested to the bar, propriate remedy, is issued. The opand a re-argument was requested. It posite party appeals; and, in the highhas been re-argued at this term. est court, the judgment is reversed,
The power of this court to revise and judgment given for the defendthe judgments of a state tribunal, de- ant. This judgment was, we think, pends on the 25th section of the judi- rendered in a suit. cial act. That section enacts, “ that We think also that it was a final a final judgment or decree in any suit judgment, in the sense in which that in the highest court of law or equity term is used in the 25th section of the of a state in which a decision in the judicial act. If it were applicable to suit could be bad," “ where is drawn those judgments and decrees only in in question the validity of a statute or which the right was finally decided, of an authority exercised under any and could never again be litigated state, on the ground of their being re- between the parties, the provisions of pugnant to the constitution, treaties, the section would be confined within or laws of the United States, and the much narrower limits than the words decision is in favour of such their va- import, or than congress could have lidity," "may be re-examined and intended. Judgments in actions of reversed or affirmed in the Supreme ejectment, and decrees in chancery Court of the United States."
dismissing a bill without prejudice, In this case, the city ordinance of however deeply they might affect Charleston is the exercise of an rights protected by the constitution, thority under the state of South Caro- laws, or treaties of the United States, lina," “the validity of which has would not be subject to the revision been drawn in question on the ground of this court. A prohibition might of its being repugnant to the constitu- issue, restraining a collector from coltion,” and “the decision is in favour lecting duties, and this court would of its validity." The question, there- not revise and correct the judgment. fore, which was decided by the con- The word " final” must be understood, stitutional court, is the very question in the section under consideration, as on which the revising power of this applying to all judgments and decrees tribunal is to be exercised, and the which determine the particular cause. only inquiry is, whether it has been We think, then, that the writ of decided in a case described in the error has brought the cause properly section which authorizes the writ of before this court. error that has been awarded. Is a This brings us to the main question. writ of prohibition a suit ?
Is the stock issued for loans made to The term is certainly a very com- the government of the United States prehensive one, and is understood to liable to be taxed by states and corapply to any proceeding in a court of porations ? justice, by which an individual pur- Congress has power “to borrow
money on the credit of the United it is a right which, in its pature, ac: States." The stock it issues is the knowledges no limits. It may be carevidence of a debt created by the ex- ried to any extent within the jurisdicercise of this power.
The tax in tion of the state or corporation which question is a tax upon the contract imposes it, which the will of each state subsisting between the government and corporation may prescribe. A and the individual. It bears directly power which is given by the whole upon that contract, while subsisting American people for their common and in full force. The power operates good, which is to be exercised the upon the contract the instant it is most critical periods for the most imframed, and must imply a right to af- portant purposes, on the free exercise fect that contract.
of which the interests certainly, pero If the states and corporations haps the liberty of the whole inay dethroughout the Union, possess the pend; may be burthened, impeded, power lo tax a contract for the loan of if not arrested, by any of the organized money, what shall arrest this principle parts of the confederacy. in its application to every other con- In a society formed like ours, with tract? What measure can govern- one supreme government for national ment adopt which will not be exposed purposes, and numerous state governto its influence ?
inents for other purposes ; in many But it is unnecessary to pursue this respects independeni, and in the unprinciple through its diversified appli- controlled exercise of many important cation to all the contracts, and to the powers, occasional interferences ought various operations of government. No not to surprise us. The power of one can be selected which is of more taxation is one of the inost essential vital interest to the community than to a state, and one of the most extenthis of borrowing money on the credit sive in its operation. The attempt, of the United States. No power has to maintain a rule which shall liinit been conferred by the Ainerican peo- its exercise, is undoubtedly among the ple on their government, the free and most delicate and difficult duties which unburthened exercise of which more can devolve on tbose whose province deeply affects every member of our it is to expound the supreme law of republic. In war, when the honour, the land in its application to the cases the safely, the independence of the of individuals. This duty has more nation are to be defended, when all its than once devolved on this court. In resources are to be strained to the ut. the performance of it, we have conmost, credit must be brought in aid of sidered it as a necessary consequence, taxation, and the abundant revenue from the supremacy of the governof peace and prosperity must be an- mnent of the whole, that its action, in ticipated to supply the exigences, the the exercise of its legitimate powers, urgent demands of the moment. The should be free and unembarrassed by people, for objects the most important any conflicting powers in the posses which can occur in the progress of sion of its parts; that the powers of nations, have empowered their go- a state cannot rightfully be so exer vernment to make these anticipations, cised as to impede and obstruct the “to borrow money on the credit of free course of those measures which the United States." Can any thing the government of the states united be more dangerous, or more injurious, may rightfully adopt. than the admission of a principle This subject was brought before the which authorizes every state and court in the case of M'Cullough vs every corporation in the Union which the state of Maryland, when it was possesses the right of taxation, to bur- thoroughly argued and deliberately then the exercise of this power at their considered. The question decided in discretion !
that case bears a near resemblance to If the right to impose the tax exists, that which is involved in this. It was
discussed at the bar in all its relations, measures which may consequently afand examined by the court with its fect it; that is, that a law, prohibiting utmost attention. We will not repeat loans to the United States, would be the reasoning which conducted us to void ; but a tax on them,to any amount, the conclusion thus formed ; but that is allowable. conclusion was, that “all subjects over It is, we think, impossible not to which the sovereign power of a state perceive the intimate connexion which extends, are objects of taxation ; but exists between these two modes of actthose over which it does not extend, ing on the subject. are upon the soundest principles ex- It is not the want of original power empt from taxation." "The sovereign- in an independent sovereign state, to ty of a state extends to every thing prohibit loans to a foreign government, which exists by its own anthority, or which restrains the legislature from is introduced by its permission;" but direct opposition to those made by the not to those means which are em- United States. The restraint is imployed by congress to carry into exe. posed by our constitution. The Americution powers conferred on that body can people have conferred the power by the people of the United States." of borrowing money on their govern"The attempt to use" the power of ment, and by making that government taxation “on the means employed by supreme, have shielded its action in the government of the Union, in pur- the exercise of this power, from the suance of the constitutivn, is itself an action of the local governments. The abuse, because it is the risurpation of grant of the power is incompatible a power which the people of a single with a restraining or controlling powstate cannot give."
er, and the declaration of supremacy The court said in that case, that is a declaration that no such restrain" the states have no power by taxa- ing or controlling power shall be extion or otherwise, to retard, impede, ercised. burthen, or in any manner control the The right to tax the contract to any operation of the constitutional laws extent, when made, must operate upon enacted by congress, 10 carry into the power to borrow before it is exerexecution the powers vested in the cised, and have a sensible influence general government."
on the contract. The extent of this We retain the opinions which were influence depends on the will of a disthen expressed. A contract made by tinct governinent. To any extent, the government in the exercise of its however inconsiderable, it is a burpower, to borrow money on the credit then on the operations of government. of the United States, is undoubtedly It may be carried to an extent which independent of the will of any state in shall arrest them entirely. which the individual who lends may It is admitted by the counsel for the reside, and is undoubtedly an opera- defendants, that the power to tax stock tion essential to the important objects must affect the terms on which loans for wbich the government was created. will be made; but this objection, it is It ought, therefore, on the principles said, has no more weight, when urged settled in the case of M'Cullough vs. against the application of an acknowThe State of Maryland, to be exemptledged power to government slock, from state taxation, and consequently than if urged against its application to from being taxed by corporations de- lands sold by the United States. riving their power from states
The distinction is, we think, appaIt is admitted that the power of the
When lands are sold, no congovernment to borrow money cannot nexion remains between the purchaser -be directly opposed, and that any law and the government. The lands purdirectly obstructing its operation would chased become a part of the mass of be void ; but, a distinction is taken property in the country, with no imbetween direct opposition and those plied exemption from common bur
thens. All lands are derived from the ment, and the power which might be general or particular government, and exercised to its destruction was deall lands are subject to taxation.- nied. But property acquired by that Lands sold are in the condition of corporation in a state was supposed to money borrowed and re-paid. Its be placed in the same condition with liability to taxation, in any form it property acquired by an individual. may then assume, is not questioned. The tax on government stock is The connexion between the borrower thought by this court to be a tax on and the lender is dissolved. It is no the contract, a tax on the power to burthed on loans, it is no impediment borrow money on the credit of the to the power of borrowing, that the United States, and consequently to be money, when repaid, loses its exemp- repugnant to the constitution. tion from taxation. But a tax upon We are, therefore, of opinion that debts due from the government, stands, the judgment of the constitutional we think, on very different principles court of the state of South Carolina, from a tax on lands which the govern- reversing the order made by the court ment has sold.
of common pleas, awarding a prohi“ The Federalist" has been quoted bition to the city council of Charlesin the argument, and an eloquent and ton, to restrain them from levying a well merited eulogy has been bestowed tax imposed on six and seven per cent. on the great statesman who is sup- stock of the United States, under an posed to be the author of the number ordinance to raise supplies to the use from which the quotation was made. of the city of Charleston for the year This high authority was also relied 1823, is erroneous in this ; that the upon in the case of M'Cullough vs. said constitutional court adjudged that The State of Maryland, and was con
the said ordinance was not repugnant sidered by the court. Without re- to the constitution of the U. States ; peating what was then said, we refer whereas, this court is of opinion that to it as exhibiting our view of the sen- such repugnancy does exist. We are, timents expressed on this subject by therefore, of opinion, that the said the authors of that work.
judgment oughi to be reversed and It has been supposed that a tax on annulled, and the cause remanded to stock comes within the exceptions the constitutional court for the state of stated in the case of M,Cullough vs. South Carolina, that farther proceedThe State of Maryland. We do not ings may be had therein according to think so.
The bank of the United law. States is an instrument essential to Justices Johnson and Thompson the fiscal operations of the govern- dissenting.
William S. Buckner vs. Finley of Van Lear.
This action was commenced in the could not be transferred by the payee, Circuit Court for the Maryland dis- a citizen of the same state with the trict, on a bill of exchange, drawn by drawer, so as to give cognizance to the defendants at Baltimore, in favour the Circuit Court of the claim. of Rosewell L. Colt, or order, of Bal- Mr. David Hoffman appeared in timore, and endorsed to the plaintiff, a behalf of the defendants. citizen of New-York.
Justice Washington delivered the Judgment was consessed for the opinion of the court. amount of the bill, subject to the opin- This is an action of assumpsit, ion of the court on this objection, that founded on a bill of exchange drawn the bill was an inland and not a foreign at Baltimore, in the state of Marybill of exchange, and consequently land, upon Stephen Dever at New.