DODGE v. WOOLSEY 18 Howard 331 (1856)

The piqua branch bank v. knoop (1854) decision striking down the tax on banks enraged the people of Ohio. They exercised sovereignty by amending their state constitution to empower and require their legislature to tax all banks, regardless of any tax-immunity or tax-preference clauses in their charters. Woolsey, a stockholder of a bank, sued the bank, as well as the tax collector, in a state court to enjoin the collection of a tax authorized by the state legislature under the new amendment to the state constitution. The Supreme Court, by a vote of 6–3, for the first time sustained its jurisdiction in a stockholder ' ssuit and ruled that the state could no more impair the obligation of a contract, contrary to the contract clause, by its constitution than by a statute. Justice john a. campbell, one of the dissenters, angrily asserted that his brethren had established the doctrine that the final power over public revenues was to be found not in the people "but in the numerical majority of the judges of this court.…" Besides his heat, he raised a profound question: "Should it be that a state of this Union had become the victim of vicious legislation, its property alienated, its powers of taxation renounced in favor of chartered associations, and the resources of the body politic cut off, what remedy has the people against the misgovernment?" Chief Justice roger b. taney answered for the majority by saying that the people govern themselves, wisely or not, and are bound to their contracts by the Constitution. By 1862 the Court handed down five more decisions involving the taxation of Ohio banks. The state finally capitulated, and the Court irrevocably committed itself to the doctrine that a grant of tax privileges could not be repealed for the life of the contract.

Leonard W. Levy
(1986)