
    Rowland Ellis and William R. Morton v. Francis Linck and Charles Thomas.
    The decision already made by this court in the case of the Exchange Bank of Columbus v. Hines, having settled that the 10th section of the tax law of April 13, 1852, is unconstitutional and void, it follows that private bankers, even if they are not the bankers contemplated by the 3d section of article 12 of the constitution, can not deduct their debts from their moneys and credits.
    But if the correctness of that d'ecision could be doubted, it is the opinion of the court that private bankers could not make such deduction. Persons having money employed in the buisness described in the 15th section of the act in question are bankers, such as are forbidden to make deductions by the constitution, article 12, section 3.
    Moneys deposited with a bank or banker (unless, specially deposited) become the moneys of the bank or bankers, appertaining to the business of banking, and proper to be listed with the other moneys belonging to that business ; and this is equally true of general deposits, whether they happen to be used in the discounting of paper, or held in reserve to .pay probable current demands.
    67] *This is a petition, in error, filed in the ¡Supreme Court, by leave of one of the judges thereof. The transcript attached, on which the errors are assigned, is of the record of a judgment rendered by the court of common pleas for Hamilton county, in favor of the defendants, upon an agreed case, submitted by the parties to that court for determination and judgment, in pursuance to section 495 of the code of civil procedure.
    
      The facts agreed upon are as follows: That the plaintiffs are an unincorporated partnership, engaged in the business described in the fifteenth section of the act entitled an act for the assessment and taxation of all property in this state, and for levying taxes thereon according to its true value in money, passed April thirteenth, .eighteen hundred and fifty-two, as natural persons, not ex-, ercising any franchise or special privilege not common to all other citizens,1 and that they had been so engaged for more than a year prior to the first day of May, in the year eighteen hundred and fifty-two, in the second ward in the city of Cincinnati, in this state:
    That, in compliance with the requisition of the assessor for the said ward, the plaintiffs returned under oath as the average value of their property, including moneys, notes, bills of exchange, bonds, and stocks, appertaining to their business aforesaid, which they had had from time to time in their possession or under their control during the year next previous to the time of making such statement, for taxation in the year eighteen hundred- and fifty-two, the sum of ninety thousand three hundred ($90,300) dollars:
    That the said amount was returned to the office of the auditor of the county of Hamilton, placed upon the tax duplicate, and the plaintiffs charged thereon with a tax for the year eighteen hundred and fifty-two, of fourteen hundred and eighty-nine 95-100 ($1,489.-95) dollars, for all purposes, being at the rate of sixteen and a half mills on the dollar, which was the legal rate of taxation for the said year:
    That on the thirtieth day of December, eighteen hundred and fifty-two, the said auditor listed the plaintiffs for taxation *upon [68 the tax duplicate, in the further sum of eight hundred and eighty thousand ($880,000) dollars, making altogether the sum of nine hundred and seventy thousand and three hundred ($970,300) dollars, as the amount of property appertaining to the business of the plaintiffs as aforesaid, subject to taxation, and charged the plaintiffs with an additional tax of fourteen thousand five hundred and twenty ($14,520) dollars, being at the rate of sixteen and a half mills on the dollar on the said sum^of eight hundred and eighty thousand ($880,000) dollars, making the entire tax charged against the plaintiffs, sixteen thousand and- nine dollars and ninety-five cents ($16,009.95):
    ■ That the said sum of ninety thousand three hundred ($90,300). dollars is a correct statement of the average value of all the property appertaining to the business of the plaintiffs as aforesaid, which they had had from time to time in their possession or under their control, during the year next previous to the first day of May, eighteen hundred and fifty-two, estimated as provided in the fifteenth section of the act aforesaid, after deducting from the gross amount of their moneys and credits, the correct amount of money deposited with them by others, subject to be withdrawn on demand by the depositors, and that the said sum included the value of all moneys and credits belonging to the plaintiffs, or which they had had from time to time in their possession or under their control, during the said year, after making the deductions aforesaid:
    That the plaintiffs tendered to the defendant, Charles Thomas, treasurer of Hamilton county, as their taxes for the said year, the said sum of fourteen hundred and eighty-nine,95-100 ($1,489.95) dollars on the twentieth day of December, eighteen hundred and fifty-two, which he refused to accept; but on the nineteenth day of October, eighteen hundred and fifty-three, forcibly and against the consent and protest of the plaintiffs, took from them, for their taxes for the said year, the sum of sixteen thousand and nine 95-100 ($16,009.95) dollars, together with the sum of eight hundred 49-100 69] ($800.49) ^dollars, being five per cent, penalty thereon, making in all, the sum of sixteen thousand eight hundred and ten 44-100 ($16,810.44) dollars.
    The controversy between the parties depends upon the following questions, to wit:
    1. Whether under the act aforesaid, entitled “ an act for the assessment and taxation of all property in this state, and for levying taxes thereon according to its true value in money,” passed April 13,1852, the plaintiffs are entitled to deduct from the gross amount of their moneys and credits, including those appertaining to their business as aforesaid, the amount bona fide owing by them to depositors and others, for consideration actually received.
    2. Whether the act aforesaid is contrary to the constitution of the State of Ohio, so far as regards the rule proscribed by it for taxing persons engaged in the business described in the fifteenth section thereof.
    If the court shall determine either of these questions in the affirmative, judgment is to be entered in favor of the plaintiffs for fifteen thousand three hundred and twenty and 49-100 ($15,320.49) dollars, with interest from the day it was taken; if it shall determine both, questions in the negative, judgment is to be entered in favor of defendants for cost of suit.
    
      All other questions are, by agreement, waived.
    
      Worthington & Matthews, for plaintiff.
    
      George E. Pugh, attorney-general, and Warden & Paddack, for defendants.
   Corwin, J.

The case is submitted upon the points shown in the foregoingjStatement.

Upon these points, counsel on either side have favored us with extended and elaborate arguments as to the construction to be given to various sections of the “ act for the assessment and taxation of all property in this state, and for levying taxes thereon, according to its true value in money,” passed April *13, 1852; and as to [70 the conformity of said act to the provisions of the new constitution of Ohio, all of which are, in effect, decided at the present term of this court, in the case of the Exchange Bank of Columbus v. Oliver P. Hines, Treasurer, etc., and which do not require further notice here. For, even if it be true, as contended by plaintiffs, that they do not come within the provisions of the third section of the twelfth article of the constitution, yet they are still individuals, and liable to pay taxes as other individuals; and it being settled that the provisions of the tenth section of said act, allowing deductions of the debts owing by the taxpayer, from his moneys and credits, are inconsistent with the provisions of the constitution, every citizen is to be taxed upon his property without deduction or exemption, except as provided in section 2 of article 12 of the constitution.

But if a doubt should anywhere exist as to the correctness of this conclusion, or the policy and justice of the rule thus established, still these plaintiffs would have no occasion to complain that a right of deduction of their debts from the amount of their assessment for taxation has been denied to them; the agreed statement of facts before recited clearly and conclusively showing them to be of the description of persons provided for by section 3 of article 12 of the constitution, which expressly prohibits the deduction they here claim.

The language of the section is: “ The general assembly shall provide by law for taxing the notes and bills discounted or purchased, moneys loaned, and all other property, effects, or dues of every description (without deduction), of all banks now existing or hereafter created, and of all bankers, so that all property employed in banking shall always bear a burden of taxation equal to that imposed on the property of individuals.”

The taxation, without deduction, of every conceivable description of property of all banks which may at any time exist in Ohio, is thus clearly and fully provided for without the introduction into 71] the section of the words, “and of all ^bankers and in giving construction to the section we are to conclude that the framers of the constitution have adopted an unmeaning description of persons, or that they intended to provide for the taxation by the same rule, of the same property in other hands as well as though it were the property of chartered banks.

And leaving the circle of incorporated banks, and going out into the world to look for bankers, where will they be found, unless they are described in the agreed statement here presented ? They are thus shown to be engaged in every department of banking business, except the mere thing of issuing notes intended to circulate as money — a privilege almost always exercised by an incorporated bank, but which is not at all essential to the existence of a bank, and which does not necessarily enter into its definition. Every business man in community knows that the class of persons to which these plaintiffs belong, transact the greater part of the banking business of the country; and if we were not forbidden, by every rule of construction, to exempt them from the operation of the section of the constitution referred to — if it were possible to adopt the conclusion for which they contend, it is manifest that property employed in banking in Ohio, instead of being taxed, without deduction, as the constitution has plainly intended, would utterly escape taxation. Chartered banks would become at once mere banks of issue; and if they should find themselves in that condition, attended with difficulties as to taxation, by a mere change of location beyond our territorial limits, they would furnish the currency to be put into circulation by the actual banker at home, who would himself own the bank of issue, become indebted to it for the amount of his issues, and claiming the right to deduct such indebtedness from his moneys and credits, he would avoid his proper contribution toward the support of the government; an<] while this extensive interest would be permitted, by such subterfuge, to avoid, as it has too long managed to do heretofore, the support of the government whose protection it enjoys, the burdens *of taxation must be [72 devolved, with increased weight, upon the labor and industry of the country.

It was to avoid this unequal, unjust, and oppressive result, that the framers of the constitution have wisely provided, that all property employed in banking shall always bear a proportion of taxation “ equal to that imposed on the property of individuals.” We are of opinion that the plaintiffs are bankers within the meaning of the constitution, and that their property has been properly listed for taxation, without deduction.”

A question is also made by counsel, as to whether deposits of money with bankers are to be considered as the property of the bankers, and as such, liable to taxation.

It is well known that the current deposits of 'most of these private bankers constitute the principal capital employed by them in banking operations; and in the absence of special agreement to the contrary, the moneys deposited go into the general fund which constitutes the basis of all their business operations — the person receiving the deposit becoming liable, not for the return of the specific money deposited, but indebted to the depositor generally for the amount. And whether these deposits are used in the discounting of paper, in the purchase of notes and bills, or held in reserve to pay current demands, they are equally the money of the banker, and are equally employed in the business of banking. And we are all of opinion that neither chartered banks nor unincorporated bankers can eon-constitutionally deduct from the gross amount of their moneys and credits the amount due to depositors.

The taxes due from the plaintiffs having been fully paid, as shown by the agreement, the judgment of the court below is affirmed, with costs.

Bartle.t, C. J.

I fully concur in the conclusion adopted in the opinion of the court, that the tax was properly assessed; that the plaintiffs had no right, under the constitution of the state, to exempt any part of their taxable moneys and ^credits from thó [73 assessment, by deducting from the amount thereof, their liabilities, either to depositors or others, that the provision of the tenth section of the tax law of the 13th April, 1852, allowing such deductions, is unconstitutional, and was, therefore, very properly treated as a nullity; and that, upon this ground, the judgment of the court below should be affirmed. On the subject of the invalidity of the provision of the tenth section of the law, my opinion is fully expressed in the case of the Exchange Bank of Columbus v. Oliver P. Hines, decided at the present terra.

But I differ from the opinion of the majority of the court touching the construction to be given to the third section of the twelfth article of the constitution. To my mind, it is very clear that this provision of the constitution has an exclusive application to banks and bankers endowed by law with the special privilege connected with the business of banking, the exorcise of which, by other persons, is prohibited. I do not think that the term “bankers,” as used in this section, can, by any fair and satisfactory interpretation, include exchange brokers, and unincorporated or private bankers, not authorized to issue paper money, or exercise any special pi'ivilege connected with the business of banking.

The second and third sections of this article of the constitution are as follows:

“ Sec. 2. Laws shall be passed, taxing, by a uniform rule, all moneys, credits, investments in bonds, stocks, joint stock companies, or otherwise; and also all real and personal property, according to its true value in money; but burying-grounds, public school-houses, houses used exclusively for public worship, institutions of purely public charity, public property used exclusively for any public purpose, and personal property to an amount not exceeding in value two hundred dollars for each individual, may, by general laws, be exempted from taxation; but all such laws shall be subject to alteration or repeal; and the value of all property, so exempted, shall, from time to time, be ascertained and published, as may be directed by law.
“ Sec. 3. The general assembly shall provide by law for taxing the notes and bills discounted or purchased, moneys loaned, and all other property, effects, or dues, of every description (without deduction), of all banks, now existing, or hereafter created, and of all bankers, so that all property employed in banking shall always bear a burden of taxation equal to that imposed on the property of individuals.”

74] *The seond section provides a basis for taxation general in its terms, and broad enough to comprehend all property of every description; and in the absence of the third section, it would have reached the property of the incorporated banks by a fair construction. • It requires that all property, without exemption or deduction, should be taxed, exempting only the specified charitable exemptions, and the exemption in favor of individuals. But the framers of the constitution deemed it proper, through abundant caution, to insert the provision of the third section, with a specific and exclusive reference to “property employed in bankingThe reason of this is made apparent by reference to the legislation of the state on the subject of taxing incorporated banks for several years preceding the adoption of the constitution. The incorporated banks, or banks exercising special privileges, claimed to be beyond the reach of the legislative power under the former constitution of the state, and were in fact resisting the general tax laws of the state at the time of the formation of the present constitution. And it was claimed that there was something peculiar in the condition and nature of the property of the banks of issue essentially different from other investments in property. For this reason, and to prevent any implication or inference in favor of exempting property invested by the incorporated banks from equal taxation, this third section of the constitution was provided.

The brokers, stock-jobbers, and private bankers, are unincorporated — mere individuals, carrying on a private business, which every person in the community may engage in if he sees proper. Now, this third section expressly distinguishes between the persons engaged in the business of banking, within its true intent, and individuals. The tax imposed on the property of individuals, as distinguished from banks and bankers, is made the standard. , All property employed in banking by banks and bankers, is required to bear a burden of taxation equal to that imposed on the property of individuals. The term “bankers,” therefore, as here *used, [75 is expressive of persons having investments in the special and exclusive business of banking, as distinguished from the business and investments of individuals.

The seventh section of the thirteenth article of the constitution furnishes an interpretation to the language of the constitution which I have been considering. The banks and bankers, within the meaning of this third section, are of course persons in the exercise of “ banking powers,” within the contemplation of the constitution. And this seventh section expressly provides the inode by which these “ banking powers ” may be acquired by an act of the general assembly.

The property employed in the business of banking, therefore, which is subjected to taxation by the third section of the twelfth article of the constitution, is that which is invested in the special and exclusive business of banking, as distinguished from investments made in those pursuits which are common to all. "With all proper deference, therefore, for the opinion of the majority of the court, I entertain the opinion that the provision of the third section in the twelfth article of the constitution does not apply to the property of the broker and private banker, but that their property is taxable under the authority of the second section.

Ranney, J.,

concurred in the judgment,.but dissented as to some of the reasons given for it. See his dissenting opinion in Exchange Bank v. Hines, ante.  