First National Bank of Carlisle v. Graham. cases First Nat. Bank of Lyons v. Ocean National Bank, 60 N. Y. 278; s. c., 19 Am. Rep. 181; s. c., Thomp. N. B. Cas. 728, and Wiley v. First Nat. Bank of Brattleboro, has never been adopted here, so far as it is in conflict with the rule. If the question here had grown out of an act prohibited by law, the principle of these recent authorities would be applicable, as it was applied in Fowler v. Scully, 72 Penn. St. 456; s. c., 13 Am. Rep. 699; Thomp. N. B. Cas. 854; but the question arises out of au act which has been neither directly nor impliedly forbidden by statute.' This, we think, is begging the question. The 8th section of the act of Congress, under which National banks are organized, makes them banking corporations, with all such incidental powers as shall be necessary to carry on the business of banking by discounting and negotiating promissory notes, drafts, bills of exchange, and other evidences of debt; by receiving deposits; by buying and selling exchange, coin, and bullion; by loaning money on personal security; and by obtaining, issuing, and circulating notes according to the provisions of this act.' The deposits' here referred to are deposits of money received by banks in the usual course of business, and have none of the qualities of a bailment. The money deposited becomes the property of the bank, and the relation of debtor and creditor is created between the depositor and the bank. The powers of National banks being enumerated in the act of Congress by which they are created, the maxim, expressio unius est exclusio alterius, if applied in the interpretation of this act, would prohibit National banks from entering into such a contract of bailment as the one in question, as a depositary, unless it is an implied power, necessary to carrying on the business of banking. We do not think it is. On the other hand, it would be hazardous for banks to possess and exercise this power; and it is no more incidental to them than to an insurance company, or a manufacturing company or any other corporation, to receive and keep in their vaults special deposits of securities and other property of great value, for safe-keeping, without compensation, for the benefit of the depositors, and thereby have resting upon them the liabilities of such depositary or bailee. As was well said by ALLEN, J., in First National Bank v. Ocean National Bank, 60 N. Y. 289; s. c., 19 Am. Rep. 181; Thomp. N. B. Cas. 728: The deposit of these bonds cannot be distinguished from a deposit of jewelry, or plate, or other valuable property, and was a special transaction, not within the ordinary course and business of banking, or necessarily incident to it. If authorized, it added greatly to the risk of loss to the shareholders, without adding to their gains. It was a holding out of greater inducement to burglars and robbers from without, and might prove of greater temptation to dishonesty on the part of clerks and employees within the bank.' And the learned judge also says, that he fully concurs in the views expressed in the opinion of WHEELER, J., in Wiley V. Bank, supra. The views expressed by Agnew, J., in Fowler v. Scully, supra, referred to by the learned judge who delivered the opinion of the court in National Bank v. Graham, supra, hardly sustain the rule laid down by the latter as the law in Pennsylvania upon this subject. The act of Congress, pursuant to which National banks are incorporated, provides in the eighth section for their loauing money on personal security; and also in a subsequent section, that they can purchase and convey such real estate as shall be mortgaged to them in good faith by way of security for debts previously contracted. validity of a mortgage given to a National bank to secure a loan was the The First National Bank of Carlisle v. Graham. question before the court in Fowler v. Scully, supra. In the very able opinion of AGNEW, J., in that case, following an enumeration of the powers of National banks contained in the eighth section of the act of Congress in question, we find this language: 'In view of the interpretation of such charters given to us by the Federal courts, and the maxim, 'expressio unius est exclusio alterius,' the argument might close with the terms of the power to loan money on personal security.' In the very valuable work of Angell and Ames on Corporations, § 256, we find the following rule for determining what contracts a corporation can make: In deciding whether a corporation can make a particular contract, we are to consider in the first place whether its charter, or some statute binding upon it, forbids or permits it to make such a contract; and if the charter and valid statutory law are silent upon the subject, in the second place, whether the power to make such a contract may not be implied on the part of the corporation, as directly or incidentally necessary to enable it to fulfill the purpose of its existence, or whether the contract is entirely foreign to that purpose.' The act of Congress in question being silent upon this subject, is the power to make the alleged contract implied, on the part of the defendant corporation, as directly or incidentally necessary to enable it to fulfill the purpose of its existence? For the reasons before stated, we think not. In our opinion, the alleged contract of bailment is entirely foreign to that purpose; and if made by or in behalf VOL. II-10 of the defendant bank, was ultra vires, and imposed no legal obligation or duty upon the corporation as bailee. See Pearce v. Madison & Indianapolis R. R. Co., 21 How. 441; Vt. & Canada R. R. Co. v. Vt. Central R. R. Co., 34 Vt. 47; Bullard v. Bank, 18 Wall. 389; Thomp. N. B. Cas. 93; Head & Armory v. Prov. Ins. Co., 2 Cr. 167; Weckler v. First National Bank, 42 Md. 581; Thomp. N. B. Cas. 533; First National Bank v. Ocean National Bank, supra. It was claimed in the argument, that the act contemplates receiving both general and special deposits, from the fact that the forty-sixth section makes it lawful for banks, after they have stopped business and while winding up their affairs, to deliver special deposits.' But this same point was made in Wiley v. Bank, supra; and what was said by WHEELER, J., on this point in his very able opinion in that case, fully answers the argument for the plaintiff upon the same point in this case. The term 'special deposits' is generic, and we think, as used in this section, refers only to such class of special deposits as are incidental to the business of banking; for example, money deposited for a specific purpose, as to pay a note or bill of exchange, made payable at the bank. However much we may dislike to differ with so able a court as the Supreme Court of Pennsylvania, the cases to which we were referred by the learned counsel for the plaintiff, in our opiniou, furnish no reason why Wiley v. Bank, supra, shouid be overruled. On the other hand, that case still has the approval of all the members of this court." Cummings v. Merchants' National Bank. CUMMINGS V. MERCHANTS' NATIONAL BANK.* (21 Albany Law Journal, 226.) Taxation -jurisdiction. The Constitution of Ohio declares that "laws shall be passed taxing by a uniform rule all moneys, credits, investments in bonds, stocks, joint-stock companies, or otherwise; and also all the real and personal property, according to its true value in money." And the legislature has passed laws providing separate State boards of equalization for real estate, for railroad capital, and for bank shares, but there is no State board to equalize personal property, including all other moneyed capital. The equalizing process as to all other personal property and moneyed capital ceases with the county boards. Throughout a large part of the State of Ohio, including Lucas county, in which the plaintiff bank is located, perhaps all over the State, the officers charged with the valuation of property for purposes of taxation adopted a settled rule or system, by which real estate was estimated at one-third of its true value, ordinary personal property about the same, and moneyed capital at six-tenthis its true value. The State board of equalization of bank shares increased the valuation of these shares to their full value. This court holds: (1.) That the act creating the board for equalizing bank shares is not void as a violation of the Constitution of Ohio, because if the local assessors would discharge their duty by assessing all property at its actual cash value the operation of the equalizing board would work no inequality of taxation, and a law cannot be held to be unconstitutional which in itself does not conflict with the Constitution, because of the injustice produced by its maladministration. (2.) The rule or principle of unequal valuation of different classes of property for taxation, adopted by local boards of assessment, is in conflict with the Constitution of Ohio and works manifest injustice to the owners of bank shares. (3.) When a rule or system of valuation for purposes of taxation is adopted by those whose duty it is to make the assessment, which is intended to operate unequally, in violation of the fundamental principles of the Constitution, and when this principle is applied not solely to one individual, but to a large class of individuals or corporations, equity may properly interfere to restrain the operation of the unconstitutional exercise of power. (4.) The appropriate mode of relief in such cases is, upon payment of the amount of the tax which is equal to that assessed on other property, to enjoin the collection of the illegal excess. *See s. c., Thomp. N. B. Cas. 926. A Cummings v. Merchants' National Bank. PPEAL from the Circuit Court of the United States for the Northern District of Ohio. The opinion states the case. MILLER, J. The appellee, being a banking association organized under the National Banking Law of the United States, brought in the Circuit Court for the Northern District of Ohio its bill in equity, to restrain the treasurer of Lucas county from collecting a tax wrongfully assessed against the shares of its stockholders, payment of which was demanded of the bank. The feature of the assessment of which plaintiff complains is that in the valuation of the shares of the bank for the purpose of taxation they were estimated at a much larger sum in proportion to their real value than other property, real and personal, in the same city, county, and State, and that this was done under a statute of the State, and by a rule or system deliberately adopted by the assessors for the avowed purpose of discriminating against the shares of all bank stock. Though there is in the argument of counsel an attempt to invoke the aid of the act of Congress relating to the taxation of the shares of the National banks, we are unable to see, either in the original or supplemental bill, any sufficient allegation on that subject. One clause of the bill asserts that the law of the State (which is the principal subject of the complaint), and the tax and assessments under it, are in violation of the Constitution of Ohio and of the act of Congress, but the vice charged against the assessment is that it is "three times the proportionate amount which is charged to real property, moneys, and credits, listed for taxation in said county of Lucas and charged upon said duplicate." The standard of comparison in the act of Congress is, "other moneyed capital in the hands of individual citizens of the State." We do not think we are called on to decide whether a tax which is assailed on the ground of violating that statute is void for that reason until the case, by positive averment, or by necessary implication of such averment, is shown to be within the prohibitory clause. But the bank has the same right under the laws and Constitution of Ohio to be protected against unjust taxation that any citi Cummings v. Merchants' National Bank. zen of that State has, and by virtue of its organization under the act of Congress it can go into the courts of the United States to assert that right; so that if the assessment on its shares was a violation of the constitutional provision of that State concerning uniformity of taxation, the Circuit Court had jurisdiction of that question, concurrent with the State courts, and we must review its decision. It is however manifest from the form of the bill in this case and the tenor of the argument in this court, that its object is to have a decision that the State statute of 1876, which provides specifically for taxation of bank shares, and for nothing else, is void as a violation of the Constitution of that State, as the purpose of the suit against the treasurer of Cuyahoga county by the bank at Cleveland is designed to test the subsequent statute of 1877, which is a substitute for that of 1876. The two cases were advanced on our docket out of their order and heard at the same time by this court, on the ground that they both involved the revenue law of the State. We have expressed in that case the reasons which induced us to avoid deciding that question if it can be done without prejudice to the rights of the parties involved, and we shall see as we progress in the examination of this case whether it can be done. But we must dispose of some preliminary questions, the first of which is the supposed incapacity of the bank to sustain this or any other action for the alleged grievance, because as the persons taxed are the individual shareholders, the damage, if any, is theirs, and they alone can sue to recover for it or to prevent its collection. The statutes of Ohio under which the taxes are assessed require the bank officers to report to the county auditor who makes the original assessment, the names of all its stockholders, their places of residence, and the amount held by each of them, and all the other facts necessary to a fair assessment. It also authorizes the bank to pay the tax on the shares of its stockholders and deduct the same from dividends or any funds of the stockholders in its hands or coming afterward to its possession, and it forbids the bank to pay any dividends on such stock or to |