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SUMMARY OF EVENTS.

UNITED STATES.

STATE TAX ON DEPOSITS IN SAVINGS BANKS. SUPREME COURT.- Provident Institution for Savings v. Commonwealth of Massachusetts.- In error to the Supreme Court of Massachusetts. Mr. Justice Clifford delivered the opinion of the court as follows:

"Institutions for savings, incorporated under the laws of Massachusetts, are required by law to pay to the Treasurer of the Commonwealth a tax on account of their depositors of three-fourths of one per cent per annum on the amount of their deposits. Half the amount of such annual tax is to be assessed on the average amount of such deposits for the six months preceding the first day of November in each year. Semi-annual returns are required to be made by the corporation, specifying the amount of their deposits on those days, and the average amount for the six months next preceding, and the provision is that the property taxed under that section, or under the section preceding it, 'shall be otherwise exempt from taxation for the current year in which the tax is paid.' (St. 1862, c. 224, § 4; St. 1863, c. 164.) The average amount of deposits in the institution standing to the credit of the depositors for the six months preceding the first day of May, 1865, was $8,047,652.19, of which $1,327,000 was invested in the public funds of the United States. Due returns were made by the corporation defendants, and they paid the percentage on the whole amount of the deposits not invested in the national public funds. Corporations neglecting to pay such a tax are made liable, by the 11th section of the act, for the amount withheld, with costs and interest, in an action of assumpsit in the name of the Commonwealth.

"Proceedings were accordingly commenced, and the parties submitted the controversy to the State Court upon an agreed statement of facts, which is exhibited on the record. Judgment was rendered for the plaintiff for the balance of the tax, with costs and interest, and the defendants sued out a writ of error under the 25th section of the Judiciary Act, and removed the cause into this court.

"By their charter, the corporation defendants were empowered to receive deposits from any person or persons disposed to become depositors, and to use and improve the same to the best advantage; but they were required to apply and divide the income or profit thereof, with reasonable deductions, among the persons making the deposits. (5 Special Laws, 172.) Such corporations may receive on deposit, for the use and benefit of depositors, all sums of money offered for that purpose; but recent legislation provides that they shall not hold of one depositor, other than a religious or charitable corporation, more than $1,000 at the same time. They may invest such deposits in first mortgages of real estate, or in the stock of the State banks, or in the public funds of the State, or of certain other States, or of the United States, or the deposits may

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be loaned to any city, county, or town in the State, or on notes, with a pledge of any of those securities as collateral. (General Statutes, c. 57, §§ 141, 142.)

"Most of the questions involved were very carefully considered in the case. The Society of Savings v. Corte was argued at the present term, and received the conclusive determination of the court. Extended argument in support of the judgment is unnecessary, as we are entirely satisfied with our conclusions, and with the reasons assigned therefor at the time the judgment was rendered.

"Taxation in that State is regulated to a certain extent by the Constitution of the State, adopted in 1780, and which is still in force, and in that respect without alteration. Full power and authority are therein given to the legislature, 'to impose and levy proportional and reasonable assessments, rates, and taxes upon all the inhabitants of, and persons resident, and estates lying within, the said Commonwealth, and also to impose and levy reasonable duties and excises upon any produce, goods, wares, merchandise, and commodities whatsoever, brought into, produced, manufactured, or being within the same.' The first judicial exposition of that clause was given in the year 1815, in a case which was fully considered, and of much importance, and which remains unquestioned to the present time. (Portland Bank v. Apthorp, 12 Mass. 252.) Incorporated banks were required by the act of the legislature, passed June 23, 1812, to pay annually to the Treasurer of the State, for the use of the same, a tax of one half of one per cent on the amount of the original stock issued to the stockholders. (4 Mass. Laws, 317.) Due assessment of the tax was made, and the bank failing to pay the amount, it was collected by warrant of distress, and the bank instituted an action of trespass against the Treasurer of the State who issued the warrant.

"Several objections were taken to the assessment, which it becomes important to notice :

"1. That the tax was illegal, because it was not equal and proportional, as required by the Constitution.

"2. That the bank could not be made liable to the tax, because their charter was granted long before the statute imposing the tax was passed.

"3. That the legislature could not select any specific property as the subject of taxation, and assess the owner for it separately and distinctly from his equal and proportional share of such taxes as was required of all other inhabitants.

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The views of the court were, however, that the law was perfectly consistent with the Constitution, with the rights of the complaining corporation, and with the practice of the State under the Constitution, from the time of its adoption. Although such was the unanimous conclusion of the court in the case, still they all distinctly held that, under the first branch of the power conferred, the requisition upon the bank could not be justified, because the condition annexed to the power to impose and levy assessments, rates, and taxes, as given in the Constitution, is, that the taxes shall be proportional upon all the inhabitants of, persons resident, and estates lying within, the Commonwealth;' that the due exercise of that power requires an estimate or valuation of all the property in the State, and that the assessment upon each individual shall be according to his proportion of that property.

"The express determination of the court was, that the legislature could not select any company or individual, or any specific article of property, and assess them by themselves, as that would be a violation of that provision of the Constitution which requires that the taxes shall be proportioned. They also held, that the object of the charter was to enable the corporation to conduct their business as an individual, to make contracts and enforce them as such, avoiding the inconvenience of a copartnership; that inasmuch as there was no express waiver in the charter of the power to impose a duty or exercise it, it could not be held that the legislature had relinquished

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that right, and that a tax upon all the banks in the State was justifiable under the sec ond branch of that clause; the operation and effect of the term 'excise,' as used in that clause, are limited to any produce, goods, wares, merchandise, and commodities;' but the court regarded the latter word as, perhaps, embracing every thing which may be the subject of taxation, and stated that it had been applied by the legislature from the earliest practice under the Constitution as authorizing a tax upon the privilege of pursuing particular branches of business and employment. They defined the term to mean 'convenience, privilege, profits, and gains,' and affirmed that the legislature, by virtue of it, had exercised the right for thirty years, without complaint, of exacting annually a sum of money from auctioneers, attorneys, tavern-keepers, and retailers in spirituous liquors. Money exacted in such cases, says the court, is not a proportional tax, nor is it an excise or duty upon any produce, goods, wares, or merchandise; but 'it is a commodity, convenience, and privilege which the legislature, by contemporaneous construction of the Constitution, assumed the right to sell at a reasonable price, and by parity of reason it may impose the same conditions upon every other employment or handicraft.'"

Judge Clifford proceeds to say that this usage is decisive of the question, unless the presumption, which he rejects, is adopted, that any such tax is in violation of the Constitution of the State.

He then examines the argument of the defence that the act authorizing the tax in this case lays a direct assessment on property, including securities exempted from taxation, using many of the arguments used by the court in Massachusetts, and concludes by affirming the judgment of the State Court.

Mr. Justice Miller, dissenting: "I think the tax was a tax on the property, and not upon the franchises and privileges of the plaintiff in error, and therefore dissent from the opinion of the court. In this dissent, I am authorized to say, the Chief Justice and Mr. Justice Grier concur."

BANKRUPT LAW. - Mr. Jenckes succeeded, on April 22, in carrying the amendment to the Bankrupt Law, postponing until the 1st of January next the operation of the clause which provides that no debtor shall receive his discharge unless his assets are equal to fifty per cent of his debts, or a majority of his creditors assent to the discharge.

The extension of time was strenuously opposed in the House of Representatives, so that the mover of the bill was obliged to accept an amendment limiting the time to the 1st of January instead of the 1st of June, 1869, as the bill was originally presented to the House.

REGULATION OF RAILROADS.

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- We have received the majority and minority reports of the Committee on Roads and Canals, to whom was referred last April the question whether Congress has the power to make laws regulating the rates of fare, freight charges, arrangements for the safety of passengers, and other rules of the railroads throughout the country. The majority of the committee report, through Mr. Cook, of Illinois, that, under the clause of the Constitution providing that "Congress shall have power to regulate commerce among the several States," the power to regulate traffic carried on between the several States is clearly given; and support their opinion by some language used by Mr. Justice Miller, in a recent case. Mr. Kerr, of Indiana, for the minority, ably argues

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the other side of the question, and shows by the case of Veazie v. Moor, 14 How. 573, that where a railroad is exclusively within the State, Congress has no control whatever over it. He further discusses, at some length, the more extensive question of the power of Congress to create a railroad corporation.

ALABAMA.

SUPREME COURT. ILLEGAL CONTRACT.- Patton v. Gilmer et al. This action was brought by the Governor, on a bond given to the State to secure the execution of a contract on the part of the "Arms Manufacturing Company," which was made by the company and the State during the war, and by which the company undertook, in consideration of an advance of State bonds to the amount of $250,000, to construct an armory, and to repay the bonds in firearms and munitions of war, to be manufactured by it; and, in case it failed to do so, the value of the bonds, or any deficiency of payment in the manner aforesaid, was to be paid to the State. The contract was authorized by the legislature. The company never furnished any arms or munitions of war; but did commence operations under the contract, and afterwards abandoned it.

The defence was, that the contract was against public policy, and that, as the State had repudiated its bonds, there was a failure of consideration.

The court, Byrd, J., held the act of the government of Alabama to be in violation of the Constitution of the United States, and the judgment for the defendants in the court below was therefore affirmed.

This decision, given at the June term of the court, seems to be one of the last official acts of Mr. Justice Byrd; for on July 18th he issued a protest to the people of Alabama against the intrusion of Messrs. Peck, Peters, and Saffold into the office of judges of the Supreme Court. "In the face of bayonets," he says, "you and I are alike without remedy, and we must submit to military power."

CONNECTICUT.

THE case of Flint v. Norwich & N.Y. Transportation Co., mentioned ante, 2 Am. Law Rev. p. 569, was tried again at the April term of the U.S. Circuit Court, in June last. Shipman, J., gave the jury a similar charge to that given on the former trial, and they returned a verdict for the plaintiff, for $10,000 damages A motion for a new trial, for a misdirection, &c., was filed, and is now pending.

THE General Assembly, at their late session, elected Hon. William T. Minor, of Stamford, a judge of the Superior Court, in the place of Hon. Gideon Hall, deceased.

IDAHO TERRITORY.

DISTRICT COURT. EQUITY POWERS OF TERRITORIAL DISTRICT AND CIRCUIT COURTS. The case of Stacy v. Abbott, in the Third Judicial District, raises the question, whether the district courts of the territory can exercise equitable jurisdiction under the laws of the territory, or whether such jurisdiction is confined to the circuit and district courts of the United States, under the Constitution and

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laws of the United States and the chancery rules of the Supreme Court. Judge Cummins, after a long and able examination of the law, says, "From the foregoing consideration, I conclude, that, in all cases arising under the laws of the territory, it is competent for the legislature to regulate the practice which shall obtain in the territorial courts, including chancery as well as common law cases. It will be necessary, of course, to keep the two jurisdictions separate. That is, they cannot be blended in the same complaint; but the practice in chancery, as well as at common law, may be and is properly regulated by legislative enactment. That the jurisdictions simply must be kept separate, is obvious from the fact that writs of error and appeals in all cases are taken from our Supreme Court to that of the United States, under the same regulations as are observed in taking causes from the circuit courts, where, it is well known, the distinction between chancery and common law must be kept up, that is, cannot be blended in the same suit or action. But in chancery cases, of which the Territorial District Court takes jurisdiction, exercising the powers of a circuit and district court of the United States, the chancery practice must be observed which is provided for the circuit courts, unaffected by the local legislation in that respect."

MASSACHUSETTS.

SUPREME JUDICIAL COURT. STOCK DIVIDENDS CAPITAL, NOT INCOME.Minot v. Paine et al. A trustee under a will held stock in a railroad in trust, to pay the income to A., remainder to B.; and the question was, whether new shares, issued by the road to represent accumulated profits expended in permanent improvements, were capital of the trust fund.

The court, Chapman, C.J., made an extensive review of authorities, and came to the conclusion that the new shares should be held as capital for the legatee in remainder, their income to be paid to the legatee for life.

"The court do not regard the fact that the dividends were made from net earnings of the roads as material. The net earnings of a railroad corporation remain the property of the company as fully as its other property, till the directors declare a dividend. A shareholder has no title to them prior to the dividend being declared. In most of our prosperous railroad corporations the directors apply a considerable portion of their net income to the laying of additional tracks, the building of new depots, the increase of their rolling stock, and sometimes to the purchase of land which they deem important to the accommodation of their business, or to other permanent improvements of the road; and they have discretionary power to do so. It is true that they may abuse their power, and refuse to make any dividends, though their net income may be large, and apply their funds to the permanent improvement of the road, and thereby deprive a life tenant of all benefit from the shares, and reserve the whole income for the benefit of the remainder-man. But in the present case it is not alleged that there has been an abuse of power; and it need not be decided whether, in case of such abuse, the trustee could protect the interests of the tenants for life in any other way than by selling the shares and investing the trust fund in some other way by which he may obtain a reasonable income.

"It is obvious that if the directors had made no stock dividend, but had invested the income in permanent improvements, making no increase of the number of shares, the improvements would have been capital, belonging to the legatees in remainder. So if they had thus invested it, and, instead of increasing the number of shares, had

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