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discussed at the bar in all its relations, and examined by the court with its utmost attention. We will not repeat the reasoning which conducted us to the conclusion thus formed; but that conclusion was, that "all subjects over which the sovereign power of a state extends, are objects of taxation; but those over which it does not extend, are upon the soundest principles exempt from taxation." "The sovereignty of a state extends to every thing which exists by its own authority, or is introduced by its permission;" but not "to those means which are employed by congress to carry into execution powers conferred on that body by the people of the United States." "The attempt to use" the power of taxation on the means employed by the government of the Union, in pursuance of the constitution, is itself an abuse, because it is the usurpation of a power which the people of a single state cannot give."

The court said in that case, that "the states have no power by taxation or otherwise, to retard, impede, burthen, or in any manner control the operation of the constitutional laws enacted by congress, to carry into execution the powers vested in the general government."

We retain the opinions which were then expressed. A contract made by the government in the exercise of its power, to borrow money on the credit of the United States, is undoubtedly independent of the will of any state in which the individual who lends may reside, and is undoubtedly an operation essential to the important objects for which the government was created. It ought, therefore, on the principles settled in the case of M'Cullough vs. The State of Maryland, to be exempt from state taxation, and consequently from being taxed by corporations deriving their power from states

It is admitted that the power of the government to borrow money cannot be directly opposed, and that any law directly obstructing its operation would be void; but, a distinction is taken between direct opposition and those

measures which may consequently affect it; that is, that a law, prohibiting loans to the United States, would be void; but a tax on them,to any amount, is allowable.

It is, we think, impossible not to perceive the intimate connexion which exists between these two modes of acting on the subject.

It is not the want of original power in an independent sovereign state, to prohibit loans to a foreign government, which restrains the legislature from direct opposition to those made by the United States. The restraint is imposed by our constitution. The American people have conferred the power of borrowing money on their government, and by making that government supreme, have shielded its action in the exercise of this power, from the action of the local governments. The grant of the power is incompatible with a restraining or controlling power, and the declaration of supremacy is a declaration that no such restraining or controlling power shall be exercised.

The right to tax the contract to any extent, when made, must operate upon the power to borrow before it is exercised, and have a sensible influence on the contract. The extent of this influence depends on the will of a distinct government. To any extent, however inconsiderable, it is a burthen on the operations of government. It may be carried to an extent which shall arrest them entirely.

It is admitted by the counsel for the defendants, that the power to tax stock must affect the terms on which loans will be made; but this objection, it is said, has no more weight, when urged against the application of an acknowledged power to government stock, than if urged against its application to lands sold by the United States.

The distinction is, we think, apparent. When lands are sold, no connexion remains between the purchaser and the government. The lands purchased become a part of the mass of property in the country, with no implied exemption from common bur

thens. All lands are derived from the general or particular government, and all lands are subject to taxation.Lands sold are in the condition of money borrowed and re-paid. Its liability to taxation, in any form it may then assume, is not questioned. The connexion between the borrower and the lender is dissolved. It is no burthen on loans, it is no impediment to the power of borrowing, that the money, when repaid, loses its exemption from taxation. But a tax upon debts due from the government, stands, we think, on very different principles from a tax on lands which the government has sold.

"The Federalist" has been quoted in the argument, and an eloquent and well merited eulogy has been bestowed on the great statesman who is supposed to be the author of the number from which the quotation was made. This high authority was also relied upon in the case of M'Cullough vs. The State of Maryland, and was considered by the court. Without repeating what was then said, we refer to it as exhibiting our view of the sentiments expressed on this subject by the authors of that work.

It has been supposed that a tax on stock comes within the exceptions stated in the case of M,Cullough vs. The State of Maryland. We do not think so. The bank of the United States is an instrument essential to the fiscal operations of the govern

ment, and the power which might be exercised to its destruction was denied. But property acquired by that corporation in a state was supposed to be placed in the same condition with property acquired by an individual.

The tax on government stock is thought by this court to be a tax on the contract, a tax on the power to borrow money on the credit of the United States, and consequently to be repugnant to the constitution.

We are, therefore, of opinion that the judgment of the constitutional court of the state of South Carolina, reversing the order made by the court of common pleas, awarding a prohi bition to the city council of Charleston, to restrain them from levying a tax imposed on six and seven per cent. stock of the United States, under an ordinance to raise supplies to the use of the city of Charleston for the year 1823, is erroneous in this; that the said constitutional court adjudged that the said ordinance was not repugnant to the constitution of the U. States; whereas, this court is of opinion that such repugnancy does exist. We are, therefore, of opinion, that the said judgment ought to be reversed and annulled, and the cause remanded to the constitutional court for the state of South Carolina, that farther proceedings may be had therein according to law.

Justices Johnson and Thompson dissenting.

William S. Buckner vs. Finley & Van Lear.

This action was commenced in the Circuit Court for the Maryland district, on a bill of exchange, drawn by the defendants at Baltimore, in favour of Rosewell L. Colt, or order, of Baltimore, and endorsed to the plaintiff, a citizen of New-York.

Judgment was confessed for the amount of the bill, subject to the opinion of the court on this objection, that the bill was an inland and not a foreign bill of exchange, and consequently

could not be transferred by the payee. a citizen of the same state with the drawer, so as to give cognizance to the Circuit Court of the claim.

Mr. David Hoffman appeared in behalf of the defendants.

Justice Washington delivered the opinion of the court,

This is an action of assumpsit, founded on a bill of exchange drawn at Baltimore, in the state of Maryland, upon Stephen Dever at New

Orleans, in favour of R. L. Colt, a citizen of Maryland, who endorsed the same to the plaintiff, a citizen of New-York. The action was brought in the circuit court of the United States for the district of Maryland; and upon a case agreed, stating the above facts, the judges of that court were divided in opinion, whether they could entertain jurisdiction of the cause upon the ground insisted upon by the defendants' counsel, that the bill was to be considered as inland. The difficulty which occasioned the adjournment of the cause to this court, is produced by the 11th section of the judiciary act of 1789, which declares, that no district or circuit court shall have "cognizance of any suit to recover the contents of any promissory note, or other chose in action, in favour of an assignee, unless a suit might have been prosecuted in such court to recover the said contents, if no assignment had been made, except in cases of foreign bills of exchange."

The only question is, whether the bill on which the suit is founded, is to be considered a foreign bill of exchange?

It is to be regretted that so little aid, in determining this question, is to be obtained from decided cases, either in England or in the United States.

Sir William Blackstone, in his Commentaries, distinguishes foreign from inland bills, by defining the former as bills drawn by a merchant residing abroad upon his correspondent in England, or vice versa; and the latter as those drawn by one person on another, when both drawer and drawee reside within the same kingdom. Chitty, p. 16, and the other writers on bills of exchange, are to the same effect; and all of them agree, that until the statutes of 8 and 9 W. III. ch. 17, and 3 and 4 Anne, ch. 9, which placed these two kinds of bills upon the same footing, and subjected inland bills to the same law and custom of merchants which governed foreign bills; the latter were much more regarded in the eye of the law

than the former, as being thought of more public concern in the advancement of trade and commerce.

Applying this definition to the political character of the several states of this Union, in relation to each other, we are all clearly of opinion, that bills drawn in one of these states, upon persons living in any other of them, partake of the character of foreign bills, and ought so to be treated. For all national purposes embraced by the federal constitution, the states and the citizens thereof are one, united under the same sovereign authority, and governed by the same laws. In all other respects, the states are necessarily foreign to, and independent of each other. Their constitutions and forms of government being, although republican, altogether different, as are their laws and institutions. This sentiment was expressed, with great force, by the president of the court of appeals of Virginia, in the case of Warder vs. Arrell, 2 Wash. 298; where he states, that in cases of contracts, the laws of a foreign country, where the contract was made, must govern; and then adds as follows:-"The same principle applies, though with no greater force, to the different states of America; for though they form a confederated government, yet the several states retain their individual sovereignties, and, with respect to their municipal regulations, are to each other foreign."

This character of the laws of one state in relation to the others, is strongly exemplified in the particular subject under consideration; which is governed, as to the necessity of protest and rate of damages, by different rules in the different states. In none of these laws, however, so far as we can discover from Griffith's Law Register, to which we were referred by the counsel, except those of Virginia, are bills, drawn in one state upon another, designated as inland; although the damages allowed upon protested bills of that description, are generally, and with great propriety, lower than upon bills drawn upon a country fo

reign to the United States, since the disappointment and injury to the holder must always be greater in the latter, than in the former case. It is for the same reason, no doubt, that, by the laws of most of the states, bills drawn in and upon the same state, and protested, are either exempt from damages altogether, or the rate is lower upon them, than upon bills drawn on some other of the states.

the same courts upon the subject of judgments rendered in the tribunals of the sister states. In the case of Hitchcock vs. Aicken, 1 Caines, 460, all the judges seem to have treated those judgments as foreign in the courts of New-York; and the only point of difference between them grew out of the construction of the 1st section of the 4th article of the constitution of the United States, and the act of congress of the 26th of May, 1790, ch. 38, respecting the effect of those judgments, and the credit to be given to them in the courts of the sister states.

It would seem, from a note to the case of Bartlett vs. Knight, 1 Mass. Rep. 430, where a collection of state decisions on the same subject is given, that these judgments had generally, if not universally, been considered as foreign by the courts of many of the states. If this be so, it is difficult to understand upon what principle bills of exchange drawn in one state upon another state can be considered as inland; unless in a state where they are declared to be such by a statute of that state.

The only case, which was cited at the bar, or which has come to our knowledge, to show that a bill drawn in one state upon a person in any other of the states, is an inland bill, is that of Miller vs. Hackley, 5 Johns. Rep. 375. Alluding to this case, in the third volume of his Commentaries, p. 63, in a note, Chancellor Kent remarks very truly, that the opinion was not given on the point on which the decision rested; and he adds, that it was rather the opinion of Mr. Justice Van Ness than that of the court. It is not unlikely, besides, that that opinion was, in no small degree, influenced by what is said by Judge Tucker in a note to 2 Black. Com. 467; which was much relied upon by one of the counsel in the argument, where the author would appear to define an inland bill, as being one drawn by a person residing in one state on another within the United States. He is so understood by Chancellor Kent, in the passage which has been referred to: but this is undoubtedly by a mistake, as the note manifestly refers to the laws of Virginia; and by an act of that state, passed on the 28th of December, 1795, it is expressly declared, that all bills of exchange drawn by any person residing in that state, on a That it is so, in respect to the neperson in the United States, shall be cessity of protesting bills of that deconsidered, in all cases, as inland scription, was not very strenuously bills. The case of Miller vs. Hackley, controverted by the counsel for the therefore, can hardly be considered as defendant. But he insists, that under an authority for the position which it a just construction of the 11th section was intended to maintain. We think of the judiciary act, concerning the it cannot be so considered by the jurisdiction of the federal courts, these courts of New-York, since the prin- bills ought to be considered and treatciple supposed to be decided in thated as inland. The argument is, that case, would seem to be directly at va- the mischief intended to be remedied riance with the uniform decisions of by the provisions in the latter part of

It has not been our good fortune to see the case of Duncan vs. Course, 1 South Carolina Constitutional Reports, 100; but the note above referred to in 8 Kent's Com. informs us, that it decides that bills of this description are to be considered in the light of foreign bills; and the learned commentator concludes, upon the whole, and principally upon the ground of the decision just quoted, that the weight of American authority is on that side.

that section, by the assignment of promissory notes and other choses in action, is the same in relation to bills of exchange of the character under consideration.

We are of a different opinion. The policy which probably dictated this provision in the above section, was to prevent frauds upon the jurisdiction of those courts by pretended assignments of bonds, notes, and bills of exchange strictly inland; and as these evidences of debt generally concern the internal negotiations of the inhabitants of the same state, and would seldom find their way fairly into the hands of persons residing in another state; the prohibition, as to them, would impose a very trifling restriction, if any, upon the commercial intercourse of the different states with

each other. It is quite otherwise as to bills drawn in one state upon another. They answer all the purposes of remittances, and of commercial facilities, equally with bills diawn upon other countries, or vice versa; and if a choice of jurisdictions be important to the credit of bills of the latter class, which it undoubtedly is, it must be equally so to that of the former.

Nor does the reason for restraining the transfer of other choses in action apply to bills of exchange of this description, which, from their comInercial character, might be expected to pass fairly into the hands of persons residing in the different states of the Union. We conclude, upon the whole, that in no point of view ought they to be considered otherwise than as foreign bills.

David Wilkinson vs. Thomas Leland & al. ·

In this cause, a bill of exceptions was taken, on which a judgment pro forma was entered, to obtain the final decision of the supreme court, as to the validity of an act of the legislature of Rhode Island.

The facts are stated in the opinion of the court.

Mr. Whipple and Mr. Wirt appeared for the plaintiff.

Mr. Webster and Mr. Hubbard for the defendant.

Mr. Justice Story delivered the opinion of the court.

This is a writ of error to the circuit court of the district of Rhode Island, in a case where the plaintiff in error was defendant in the court below. The original action was an ejectment, in the nature of a real action, according to the local practice, to recover a parcel of land in North Providence in that state. There were several pleas pleaded of the statute of limitations, upon which it is unnecessary to say any thing, as the questions thereon have been waived at the bar. The cause was tried upon the general issue; and, by consent of the parties, a ver

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dict was taken for the plaintiffs, and a bill of exceptions allowed upon a pro forma opinion given by the court in favour of the plaintiffs, to enable the parties to bring the case before this court for a final determination. The only questions which have been discussed at the bar arise under this bill of exceptions.

The facts are somewhat complicated in their details, but those which are material to the points before us may be summed up in a few words.

The plaintiffs below are the heirs at law of Cynthia Jenckes, to whom her father, Jonathan Jenckes, by his will in 1787, devised the demanded premises in fee, subject to a life estate then in being, but which expired in 1794. By his will, Jonathan Jenckes appointed his wife Cynthia, and one Arthur Fenner, executrix and executor of his will. Fenner never accepted the appointment. At the time of his death, Jonathan Jenckes lived in New-Hampshire, and after his death his widow duly proved the will in the proper court of probate in that state, and took upon herself the administration of the estate

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