Bank of Augusta v. Earle, 38 U.S. 519

Lead Opinion

Mr. Chief Justice Taney

delivered the' opinion of the Court.

These three cases involve the same principles, and have been brought before, us by writs of error directed to the Circuit Court and southern district of Alabama. Thé two first have' been fully argued by counsel; and the last submitted to the Court upon the arguments offered in the other two. There are some shades of difference in the facts as stated in the different records, but none that can affect the decision. We proceed therefore to express our opinion on the first case argued, which was the Bank of Augusta vs. Joseph B. Earle, The judgment in this case must decide the others.

• The questions. presented to the Court arise upon a case stated in the Circuit Court in the following words:—

“ The defendant defends this action upon the following facts, that are admitted by the plaintiffs: that plaintiffs are a corporation, incorporated by an act of the legislature of the state of Georgia, and have power usually conferred upon banking institutions, such as to purchase bills of exchange, &c. That the bill sued, on was made and endorsed, for the purpose of being discounted by. Thomas M£Gran, the agent of said bank, who had funds of the plaintiffs in his hands for .the purpose of purchasing bills, which funds were derived from bills and notes discounted in Georgia by said plaintiffs, and payable in Mobile; and the said M£Gran, agent as aforesaid, did so discount and purchase the said bill .sued on, in the city of Mobile, state aforesaid, for the benefit of said bank, and with their funds, and to remit said funds to the said plaintiffs.

If thé Court shall say that the facts constitute a defence to this action, judgment will be given for the defendant, otherwise for plaintiffs, for the amount of the bill, damages, interest, and cost; either party to have the right of appeal or writ of error to the Supreme Court upon this statement of facts, and the judgment thereon.” i, . . -

Upon this statement of facts the Court gave judgment for the defendant; being of opinion that a bánk incorporated by the laws of Georgia, with a power among other things to purchase bills of exchange, could not lawfully exercise that power in the state of Alabama; and that the contract for this bill was therefore void, and did not bind the parties to the payment of the money. °

It will at once be seen that the questions brought here for decision are of a very grave character^ and they have received from the Court an attentive examination. A multitude of corporations for various purposes have been chartered by the several states; a large portion of certain branches of business has been transacted by incorporated‘companies, or through their agency; and contracts to a very great amount have undoubtedly been made by different corporations out of the jurisdiction of the particular state by which they were created. In deciding the case before us, we in effect determine whether these numerous contracts are valid, or not. And if, as has been argued at the bar, a corporation, from its nature and character, is incapable of making such contracts; or if they are inconsistent' with the rights and. sovereignty of the states in which they are made, they cannot be enforced in the Courts of justice.

Much of the argument has turned on the nature and extent of the powers which belong to the artificial being called a corporation; and the rules of law by which they are to be measured. On the part of the plaintiff in error, it has been contended that a corporation composed of citizens of other states are entitled to the benefit of that provision in the Constitution of the United States which declares. that “ The citizens of each state shall be entitled to all privileges and immunities of citizens in the several states;” that the Court should look behind the act of incorporation, and see who are the members of it; and, if in this case it should appear that the corporation of the Rank of Augusta consists altogether of citizens of the state of Georgia, that such citizens are entitled to the privileges and immunities of citizens in the state of Alabama: and' as the citizens of Alabama may unquestionably purchase bills.of exchange in that state, it is insisted that the members of this corporation.are entitled to the same privilege, and cannot be deprived of it even by express provisions in tlie Constitution or laws of the state. The case of the Bank of the United States vs. Deveaux, 5 Cranch, 61, is relied on to support this position. •

, It is true, that in the case referred to, this Court decidéd that in a question of jurisdiction they might look to the character of the persons composing a corporation; and if it appeared that they were citizens of another state, and the fact was¡ set forth by proper averments, the corporation might sue in its corporate) name in the'Courts of the United States. But in' that case the Court confined its decision,^ express'terms, to a question of jurisdiction; to a right to sue; and evidently went even so far with- some hesitation. We fully assent to the propriety of that decision; and it has ever since been recognised as authority in this Court. But the principle has never been extended any farther than it was carried in that case; and has never been supposed to extend to contracts made by a corporation; especially in another sovereignty. If it \yere held, to embrace contracts, and that the members of a corporation were to be regarded as individuals carrying on business in their corporate name, and therefore entitled to the privileges of citizens in matters of contract, it is very -clear that they must at the Same time take upon them-. selyes the liabilities of citizens, and be bound by their contracts in like manner. The result of this would be to make a corporation a mere partnership in business, in which each stockholder would be liable to the whole' extent of his property for the debts of the corporation; and he might be sued for them, in any state in which he might happen to be found. The clause of the Constitution referred to certainly never intended to give to the. citizens of each state the privileges of citizens in the several states, and at the same .time to exempt them from the liabilities which the exercise of such privileges would bring upon individuals who were citizens of the state. This would be to give the citizens of other states far higher and greater privileges than are enjoyed by the citizens of the state itself. Besides, it would deprive every state of all control over the extent of corporate franchises proper to be granted in the state; and corporations would be chartered in one, to carry on their operations in another. It is impossible upon any sound principle to give such a construction to the article in question. Whenever a corporation makes a contract, it is the contract of the legal entity; of the artifi-' cial being created by the charter-; and not the contract of the individual members. The only rights it can claim are the rights which are given to it in that character, and not the rights which belong to its members as citizens of a state: and we now proceed to inquire what rights the plaintiffs in error, a corporation created by Georgia,. could lawfully exercise in another state; and whether the purchase of the bill of exchange on which this suit is brought was a valid contract, and obligatory on the parties.

The nature and character of a corporation created by a statute, and the extent of the powers which it'may lawfully exercise, have upon several occasions been under consideration in this Court. ■■

In the case of Head and Amory vs. the Providence Insurance Company, 2 Cranch, 127, Chief Justice Marshall, in delivering the opinion of the Court, said, “ without ascribing to this body, which in its corporate capacity is the mere creature of the act to which it owes its existence, all the qualities and disabilities annexed by the common law to ancient institutions of this sort, it may correctly be said to be precisely what the incorporating "act has made it; to derive all its powers from that act, and to be capable of exerting its faculties only in the manner which that act authorizes.

To this source of its being, then, we must recur to ascertain its powers; and to determine whether it can complete a contract by such communications as are in this record.”

In the case of Dartmouth College vs. Woodward, 4 Wheat. 636, the same principle was again decided by the Court. “ A corporation,” said the Court,- “ is an artificial being, invisible, intangible, and existing only in contemplation of law. Being a mere creature of the law, it possesses only those properties which the charter of its creation confers upon it, either expressly, or as incidental to its very 'existence.” . .

And in the case of the Bank of the United States vs. Dandridge, 12 Wheat. 64, where the questions in relation to the powers of corporations and their mode of action, were very carefully considered; the Court said, “ But whatever may be the implied powers of aggregate corporations by the common law, and the modes, by which those powers are to be carried into operation; corporations created by statute, must depend both for their powers and the mode of exercising-them, upon the true construction of the statute itself.”

' It cannot be necessary to add- to these authorities. And it may be safely assumed that á corporation can make no contracts, and do no acts either within or without ■ the state which creates it, except such as are authorized by its charter; and those acts must also be done, by such officers or agents, and in such manner as the charter authorizes. And if the law creating a corporation, does' not, by the true construction of the words used in the charter, give it the right to exercise its powers beyond the limits of the state, all contracts made by it in other states would be void;

The charter of the Bank of Augusta authorizés it, in general terms, to deal in bills of exchange ; and, consequently,'gives it the power to purchase foreign bills as well as inland; in other words,, to purchase bills payable in another state. The power thus given, elothed the corporation with the right to make contracts out of the state, in so far as Georgia could confer it. ■. For .whenever it purchased a foreign’bill, and forwarded it to an agent to present for .acceptance, if it was honoured by the drawee, the contract of acceptance was necessarily made in another state; and the general power to purchase bills without any .restriction as to place, by its fair and natural import, authorized the bank to make such purchases, wherever’it was found most-convenient and profitable to the institution; and also to employ suitable agents for that purpose.' The purchase of the bill in question was, therefore, the exercise .of one of the powers which the bank pbssessed .under its charter; and was sanctioned by.the law of Georgia-creating the corporation, so far as that state could authorize a corporation to exercise its powers beyond the limits of its own jurisdiction.

But it has bpen urged.in the argument, that notwithstanding the powers thus conferred by the terms of the charter, a corporation,-, from the very nature of its being, can have no authority to contract out of the limits of the state ; that the laws.of a state can have no extra-territorial operation; and that as. a corporation is the mere . creature of a law of the state, it can have no existence beyond the. limits in which that law- operates; and that it. must necessarily be incapable Af making a contract in another place;

It is very true that a corporation can have no legal existence out of the boundaries of the sovereignty by which it is created. It exists only in contemplation of law, and by force of the law; and where that law ceases to operate, and is no longer obligatory, the cbporation can have no existence. It must dwell in the place of its creation, and cannot migrate to another sovereignty. B.Ut although it must live and have its'being in that state, only, yet it does not by any means follow that its existence there will not be recognised in other places; and its residence in one state creates no insuperable objection to its power of contracting in another. It is indeed a mere artificial being, invisible and intangible; yet it is a person, for cer-, tain purposes in contemplation of law, and has been recognised as such by the decisions of this- Court; It was so held in the case of The United States vs. Amedy, 11 Wheat. 412, and in Beaston vs. The Farmer’s Bank of Delaware, 12 Peters, 135. Now, natural persons through the' intervention of agents, ¿re continually making contracts in countries in which they, do not reside.; and where they are not.personally present when -the contract is made; and nobody has ever doubted the validity of these agreements. And what greater objection can there be to the capacity of an artificial person-; by its agents, to maké a contract' within the scope of its limited powers, in a sovereignty in which it does not reside; provided such contracts are permitted to be made by them by the laws of the place ?

. The corporation must no doubt show, that the law of its creation gave it authority to make such contracts, through such agents. 'Yet, as in the case of a natural person, it is not necessary that it should actually exist in the sovereignty in which the contract is made. It is sufficient that its existence as.' an artificial person, in the state of its creation, is acknowledged and recognised by the law of-the nation where the dealing takes place; and that it is permitted by the laws of that place -to exercise there the powers with which it is endowed.'

Every power, however, of the description of which we are speaking, which a corporation exercises in another state, depends for it)?. validity upon the laws of, the sovereignty fii which it .is exefcised; and a corporation can make no valid contract without their sanction, express or implied. And this brings us to the question which- has been. so elaborately discussed; whether, by the Comity of nati ns and bétween these states, the corporations of one state are'permitted to iriake contracts in another. It is needless to enumérate here , the instances in which, by the general praétice of civilized countries, the laws of tpe one, will, by the comity of nations, be recognised and executed in another, where the right of individuals are concerned. The cases of contracts made in a foreign country are familiar examples.; and Courts of justice- have always expounded arid executed them, according to.the laws of the plañe in which theyuvere made; provided that, law; was not repugnant to the laws or'policy tif their own country. The comity thus extended to other nations is ho impeachment of sovereignty . It is the voluntary act of the ifetion by which it is offered.; and is'inadmissible ,w;hen. contrary to its policy," or prejudicial to its interests; Büt it contributes so largely to promote justice between individuals, and to producé a friendly intercourse between the sovereigntiés to which they belong; that Courts of jus-' ticé jbave continually actpd Uppn it, as. A part of the voluntary jaw-of nations. It is truly said, in Story’s Conflict of Laws, 37, that “In the silence of any positive rule, affirming, or denying] -r restraining the operation of foreign laws, Courts of justice pres’ 'me the tacit adoption .of them by-their own government; unless they are repugnant to its policy, or prejudicial to its .interests. It is riot the comity -of the Courts, but the cornity of the nation which is administered, and ascertained in the same.way, and guided by the same reasoning by. which all other'principles pf-municipal law are ascertained and guided.” . "

Adopting, as we do, the principle here stated, we proceed to inquire whether, by the comity of nations, foreign corporations .aré permitted o make contracts within their jurisdiction;- ahd we can per*, ceive no . sufficient reason for excluding them, when they" are. not contrary to the known policy of the state, or injurious to its. mterests. Ibis nothing more than the admission of the existence of an artificial person created by the law of another state, arid clothed with the power of making certain contracts. It is but the usual comity of recognising the law of another state. . In England, from which we have received our general principles of,jurisprudence, no doubt appears to have been entertained of the right of a foreign corporation to sue in its Courts; since the case Henriquez vs. The Dutch West India Company, decided in 1729, 2 L. Raymond, 1532. And it is a matter of history, which this Court are bound to notice, that corporations, created in this country, have been in the open practice for many years past, of making contracts in England of various kinds, and to very large amounts; and we have never seen a doubt suggested there of the validity of those contracts, by any Court or any jurist. It is impossible to imagine .that any Court in-the United States would refuse to execute á contract, by which an American corporation had borrowed money in England ;'yet if the contracts of corporations made out of the state by which they were created, are void, even contracts of that description could not bé enforced.

It has, however, been supposed that the rules of comity between foreign nations do not apply to the states'of this’Union; that they extend to one another no other rights than those which are given by the Constitution of the United States; and that the Courts of the general government are not at liberty to presume, in-the absence of all legislation on the subject, that a state has adopted the comity of nations towards the other states, as a part of its jurisprudence; or that it acknowledges any rights but those which are secured by the Constitution of the United States. The Court think otherwise. The intimate union of these states, as members of the’ same great political family; the deep and vital interests which bind them so closely together; should lead us, in the absence of proof to the contrary, to presume a greater degree of comity, and friendship, and kindness towards one another, than we should be authorized to presume between foreign nations. And when (as without doubt must occasionally happen) the interest or policy'of any state requires it to restriebthe rule, it has but to declare its will, and the legal presumption is at once at an end. But until this is done, upon what grounds could this Court refuse to administer the law of international comity between these states ? They are sovereign states; and the history of the past, and the events which are daily occurring, furnish the .strongest evidence that they have adopted towards each other the laws of comity in their fullest • extent. Money is frequently borrowed in one state, by a corporation created in another. The numerous banks established by different states are in the constant habit of contracting’ and dealing with one another. Agencies for corporations engaged in the business of insurance and of banking have been.established in other states, and. suffered to make contracts without any objection on-the part of the state authorities. These usages of commerce and trade have been so general and public, and have been practised for so long-a period of time, ancfso generally acquiesced in by the states, that the Court cannot overlook them when a question Idee the one before us is under consideration. The silence of the state authorities, while these events are passing before them, show their assent to the ordinary laws of comity which permit a corporation to make contracts in another state. But we are not left ■to infer, it merely .from the general usages of trade, and the silent acquiescence of the states. It appears from the cases cited in the argument, which it is' unnecessary to recapitulate in this opinion; .that it has been decided in many of the state Courts, we believe in ad of-them where the question has arisen, that a. corporation of one state ma'y sue in the Courts of another. If it may sue, why may it not make' a contract ? The right- to sue is one of the powers which' it derives from its charter. - If the Courts of another country take notice of its existence as a corporation, so far as to allow it to maintain a suit, and permit it to exercise that power; why should not its existence be recognised for other purposes, and the corporation permitted to exercise another power which is given to it by the same law-and the s.ame sovereignty — where ..the last mentioned power does not come in conflict with the interest or policy of the state ? There is certainly nothing in the nature and character of a corpora-tion which could justly lead to such a distinction; and which should extend to it the comity of suit, and refuse to- it the comity of contract. If it is allowed to sue, it would of course be'permitted to compromise, if it thought proper, with its debtor ;"to give him time-; to accept something else in satisfaction; to give him a release; and to employ an attorney for itself to' conduct its suit. These are all matters of contract, and yet are so intimately connected -with the' right to sue, that the latter could not be effectually exercised if the former were denied.

/We turn in the next place to the legislation of the states.

/ So far as any of them have acted on this subject, it is evident that -they have regarded the comity, of contract, as well as the comity suit, to be a part of the law of the state, unless restrictéd by statute. Thus a law was passed by the state of Pennsylvania, March 10, 1810, which prohibited foreigners and foreign corpora/ tions from making contracts of insurance against fire, and other losses mentioned in the law, In New York, also, a law was passed, March 18, 1814, which prohibited foreigners and foreign corporations from making in that stare insurances- against fire;' and by another law., passed April 21, 1S18, corporations chartered by other' states are prohibited from keeping any óffice of deposit for the purpose of discounting promissory notes, or carrying oñ any kind of business which incorporated banks are authorized by law to carry on. The prohibition of certain specified contracts by corporations in these laws, is by necessary implication an admission that other contracts -may be made by foreign corporations in Pennsylvania, and New .Yórk; arid that-no legislative permission is necessary to give them validity. And the language of these .‘prohibitory acts most clearly indicates that .the contracts forbidden by .them might lawfully . have been made before these laws were passed.

Maryland has gone still farther in recognising this right. By a law passed in 1834, that- state has prescribed the manner in which corporations riot chartered by the state, “ which .shall transact or shall .have transacted business” in the state, may be sued in its. Courts upon contracts made in the state. The law assumes in the clearest manner, that' such contracts were valid, and.provides a remedy by which to enforce them.

In the legislation of Congress, also, where the states .and the people of the several states are all represented, we shall find proof of the general understanding in the United States, that by the law of comity among the states, the corporations chartered by one were permitted to make contracts in the others. By the act- of Congress of June'23, 1836, (4 Story’s Laws, 2445,) regulating the deposites of public money, the Secretary of the Treasury was authorized to make arrangements with some bank or banks, to establish' an.agency in the stateá and territories where there, was no bank, or none that could be employed as a public depository, to receive and -disburse the. public money which might be directed to be there ■ deposited. Now if the proposition be' true that a corporation created by one state cannot make a valid contract in another, the contracts made through this agency in behalf of the bank, out of the state where the bank itself was chartered, would all be void, both as respected the contracts with the government and the individuals who dealt with it. Hów could such an agency, upon the principles now contended for, have performed any of the duties for which it was established ?

But it caiínot be pecessary to pursue .the argument- further. We think it is. well settled, that by the law of comity among-fiations, a corporation created by one sovereignty is permitted to make contracts in another, and to sue in its Courts; and that the same law. of -comity prevails among the several sovereignties of this Union. The' public and well known, and long continued usages of trade.; the general acquiescence of the states; the particular legislation of some of them, as-well as the legislation of Congress; - all concur in proving, the truth of this proposition.

But we. have already said that this, comity is presumed from the silent acquiescence of the state. Whenever a state sufficiently indicates that contracts which derive their validity from its comity are repugnant to its policy, or are considered as injurious to its interests; the presumption in favour of its adoption can no longer, be made. And it remains to inquire, whether there is any thing in the constitution'or laws of Alabama, from which- this -Court would be justified in concluding that the purchase of the bill in question' was contrary to its policy.

The constitution of-Alab&ma contains the following provisions in relation to banks

“ One state bank may be established, with such -number of branches as the General Assembly may from time to time deem expedient, provided that no branch bank shall be established, ndf bank charter renewed, under the authority of this state, without the concurrence of two-thirds of both houses of the General Assembly; and provided also that not more than one bank or branch bank shall be established, nor bank charter renewed, but 'in conformity to the following rules:

“ l. At least two-fifths of the capital stock shall be reserved for the state.

“ 2. A proportion of power, in the direction of the bank, shall be reserved to the state, equal at least to its proportion of stock therein.

- “ 3. -The state-and individual stockholders shall be liable respectively for the. debts of the bank, in proportion to their stock hólden therein.

. “ 4. The remedy for collecting debts shall be J reciprocal, for and against the bank.

“ 5. No bank shall commence operations until half of the capital stock subscribed for be actually paid in gold and silver; which amount shall, in no case, be less than one hundred thousand ■dollars.” ’

Now from these provisions in the constitution, it is evidently the policy of Alabama to restrict the power of the legislature'in relation to bank charters, and to secure to the state a large portion of. the profits of banking, in order to provide a public revenue; and, also to make safe the debts which should be contracted by the banks. The meaning too in.which that state used the word bank, in her constitution, is sufficiently plain from its subsequent'legislation. All of the banks chartered by it, are authorized to receive deposits of'money, to discount notes, to purchase bills of exchange, and to issue their own notes payable on demand to bearer. These , are the usual powers conferred on the banking corporations in the different states of the Union; and when we are dealing with the business of banking in Alabama, w.e must undoubtedly attach to it the meaning in which it is used in the constitution and laws of the state. Upon so much of the policy of Alabama, therefore, in relation to banks as is dis=<■closed by its constitution, and upon the meaning which that-state attaches to the word bank,, we can have no reasonable doubt. But before this Court-can undertake to say that the discount of the bill-in question-was illegal, many-other inquiries must be made, and many other difficulties must be solved.- ’ Was it' the policy of Alabama to exclude all competition with its own banks by the corpora-* tions of other states? Did the state.intend, by these provisions*in its constitution, and these charters to its banks, to inhibit the circulation of the notes of other banks,, the discount of notes, the loan of money, and the purchase of bills of exchange? Or did it désigri to go still further, and forbid the banking corporations of other states from making a contract of any kind .within its territory? Did it, mean to prohibit its own banks from.keeping mutual accounts with the banks of other states, and' from entering into any contract with them, express or implied? Or did she mean to give to ‘her banks the power of contracting within the limits of the state with foreign corporations, and deny it to individual citizens ? She may believe it to be the interest of her citizens to' permit the competition of other banks in the circulation of notes, in the. purchase,and. sale of bills of exchange, and in the loan of money. Or she may think it to be her interest to prevent :tne circulation of the notes of other banks; and to prohibit them from sending money there- to be' employed in the purchase of exchange; or making contracts of any other description.

The state has not made known its policy upon any of these points. And how can this Court,-with, no other lights before, it, undertake to mark put by a definite and distinct line the policy which .Alabama has adqpted in relation to this complex and intricate .question of political economy? It.is true that the state is the principal stockholder in her own banks. She has created seven; and’ in five of them the state owns the-whole stock; -and.in the others two-fifths. This proves that the state is deeply interested in the sjceessful operation of her banks, and it may be her policy to sh it out all interference with them. In another view of the subject, however, she may believe it to be her policy to extend the utmost liberality to the banks of .other states;-in the expectation that it would produce a corresponding comity in other states towards the -banks in which she is so much interested. In. this respect it- is a question chiefly Of revenue, and of fiscal policy. How can this Court, With no other aid than the general principles asserted in her constitution, and her investments in the stocks of her own banks, undértaké- .to carry out. the policy of the state upon-such a subject in all of its details, and decide how far it extends, and what qualifications and.limitations are imposed upon it ? These questions must be determined by the state itself, and not by.the Courts of the'-Unite'd Sates. Every sovereignty would witholit doubt choose to- designate its own line of policy;- and-would never consent to leave it as a problem to be worked out by the-Courts of. the United States, from a few general principles, -which might very naturally be misunderstood or misap"-.plied by the Court. It would hardly be respectful- to a state for this Court'-tq forestall its decision, and to say, in advance of her legislation, what-her interest or policy demands. Such a course would savour more of legislation than of judicial interpretation.

If we proceed from the constitution and bank charters to other acts of legislation by the state, we find nothing that should lead .us to a contrary conclusion. By an act of Assembly of the state, passed January 12th, 182-7,-it was declared unlawful for any*person, body corporate, company, br association, to issue aoy'note for circulation as a bank note, without -the authority of law j^and a fine was imposed upon anyone offending against this statute. ..Now this act protected the privileges of her own banksj in- relation to bank notes only; and contains no prohibition against the- purchase of bills of exchange, or against any other busiriess by foreign banks, which might interfere with her own banking corporations. And if we were to form our opinion- of the policy of Alabama from the pro»•visions of this law, we should be bound to say that' the législature. deemed it to be the interest and policy of the state, not to p'otect its own banks from competition .in the purchase of exchange, or in any thing but the issuing of notes for circulation. 'But this law was repealed by a subsequent- law, passed in 1833, repealing all acts of Assembly not comprised in a digest then prepared and adopted "by the. legislature. The law of 1837 above' mentioned was not contained in this digest, and was consequently repealed. It has been said at the bar, in the argument, that it was omitted from the digest by mistake, and was not intended to be repealed. But this Court cannot act judicially upon such an assumption. We must take their la-ws and policy t&be such as we find them nr their statutes. And the. only inference that we can draw .from these two laws, is, that after having- prohibited under a penalty any competition with their.banks by the issue of notes for circulation, they changed their policy, and determhied to leave the whole "business of banking open to the rivalry of others. The other laws of the state, therefore, in addition to the constitution and charters, certainly would not authorize this Court to say, that the purchase of bills by the corporations of another state was a violation of its policy.

. The decisions of-its judicial tribunals lead tp the same result. It is true that in the case of The State vs. Stebbins, 1 Stewart’s Alabama Reports, 312, the Court said that since the adoption of their, constitution banking in that state was to be regarded as a franchise. And this case "has been much relied on by the defendant in error.

Now we are satisfied,-from a careful examination of the case, that the word franchise was not used, and could not have been, used by the Court in the broad sense i'mputeS to it in the argument. For if banking includes the purchase of bills of exchange, and all banking is to be regarded as the "exercise of a franchise', the decision of the Court would amount to this — that no. individual citizen of Alabama could purchase such a bill. For franchises are special privileges conferred by government upon individuals, and which do not belong •to the citizens of the country, generally, of common right. It is essential to the character of a franchise that it should be a grant from the sovereign authority,. and in this country no franchise' can be ’held which is not derived from a law of -the state.

But -it cannot be supposed that the constitution of Alabama' intended to prohibit its merchants and traders from purchasing or* selling bills of -exchange; and to make it a monopoly in the hands-of their banks. An.d it is- evident that the Court of Alabama, in the case of The State vs. Stebbins, did not mean to assert such a principle. In the passage relied on they are speaking of a paper circulating currency, and asserting the right of the state to regulate and to limit it.

The .institutions of Alabama, like those of the other' states, are founded upon the great principles of the. common law; and it is very clear that at common law, the right of banking in all of its ramifications, belonged to individual citizens; and might be exercised by them at their pleasure. And the correctness of this' principle is not questioned in the case of The State vs. Stebbins. Undoubtedly, the sovereign authority may regulate and restrain this right: but thé constitution of Alabama purports to be nothing more than a restriction upon the power of the legislature, in relation to banking corporations; and does not appear to have been intended as a restriction .upon the rights of individuals. - That part of the subject appears to have been left, as is usually done, for the action of the legislature, to be modified according to circumstances; and the pro-sedition against Stebbins was'not founded on the provisions contained in the constitution, but was under the law of 1337 above mentioned, prohibiting the issuing of bank notes. We are fully satisfied that the state never intended by its constitution to interfere with the right of purchasing or selling bills of exchange; and that the ■opinion of the Court does not refer to transactions of that description, when it speaks of banking as a franchise.

The question then recurs — r-Does. the policy of Alabama' deny to the corporations of other states the ordinary comity between nations? or does it permit such a corporation to make those contracts which from their nature and subject matter, are consistent with its policy, and are allowed to individuals ? In making such contracts a corpqratioii nq doubt exercises its corporate franchise. But it must-do this whenever it acts as a corporation, for its existence is a franchise. Now it has been held in the Court of Alabama itself, in 2 Stewart’s Alabama Reports, 147, that the corporation of another state may sue in its Courts; and the decision' is put directly on the ground of national comity. ■ The state therefore has not merely acquiesced by ■silence, but her judicial tribunals have declared the adoption of the law of international comity in the case of a suit. We have already shown that the-comity of suit brings with it the comity of contract; and where the one is expressly adopted by its Courts, the other must also be presumed according tq the usages of nations, unless the .contrary can be shown.

The cases cited from 7 Wend. 276, and from 2 Rand. 465, cannot influence the decision in the case before us. The decisions of these .two state Courts were founded upon the legislation of their respective states, which was sufficiently explicit to-enable their judicial tribunals to pronounce judgment on their line of. policy. But because two states have adopted a particular policy in relation to the banking corporations of other states, we cannot infer that the same rule prevails in all of the other states.

Each state must decide for itself.. And it will be remembered, that it is not the state of Alabama which appears here to complain of an infraction of its policy. Neither the state, nor any .of its constituted authorities, have interfered in this controversy. The objection is taken by persons who were parties to those contracts; and who participated in the transactions, which are now alleged to have been in violation of the laws of the state.

It is but justice to all the parties concerned to suppose that these contracts were made in good faith, and that no suspicion was entertained by either of them that these engagements could not be enforced. Money was paid ■ on them by one party, and received by the other. - And when we see men dealing with one another openly in this manner, and making contracts to a large amount,, we can hardly doubt as to what was the generally received opinion in Alabama at that time, in relation to the right of the plaintiffs to make such contracts. Every thing now urged as proof of her policy, \Vas equally public and well known when these bills were negotiated. And when.a Court is called on to declare contracts thus made to be void upon the ground that they conflict with the policy of the state; the line of that policy should be very dear and distinct to justify the Court in sustaining the defence. Nortfi ,ig can be more vagué and indefinite than that now insisted on as the policy of Alabama. It rests altogether on speculative reasoning as to her supposed interests; and is not supported by any positive legislation. There is no law of tlie state which attempts to define -the rights of foreign corporations.

We, however, do not mean to say that there are not many’subjects.-upon which the policy of the several states is abundantly evident, from the nature of their institutions, and the general scope of their legislation; and which do not heedíhe aid of a positive and special law to guide the decisions of the Courts. When'the policy of a state is thus manifest, the Courts of the United States would be1 bound to notice it as a part of its code of laws; and to declare all contracts in the state repugnant to it, to bé illegal ánd void. _ Nor do we mean to say whether there may not be some rights under the Constitution of the United States, which a corporation might claim under peculiar circumstances, in a state other than'that in which it was chartered. The reasoning, as well as-the judgment'of the Court, is applied to the matter before us; and we think,the eon-tracts in question, were valid, and -that the defence relied? on by fhe defendants cannot be sustained.

’ The judgment of the Circuit 'Court in these cases, must therefore be reversed with costs.

Mr. Justice Bakdwin

delivered an opinion assenting to the judgment of the Court, on principles which were stated at large in the opinion. This opinibn was not delivered to the reporter.

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Dissenting Opinion

Mr. Justice M'Kinley

delivered an opinion, dissenting from the judgment of the Court.

I dissent from so much of the opinion of the majority of the Court as decides that the law of nations furnishes a rule by which validity can.be given to the contracts in these cases; and from 'so much as decides that the contracts, which were the subjects of the suits, were not against the policy of the laws of. Alabama.

•This is the first time since the adoption of the Constitution of the United States, that any federal Court has, directly or indirectly, imputed national power to any of the states of the Union; and it is the first time that validity has been given to such contracts, which, it is acknowledged, would otherwise have been void, by the application .of a principle of the necessary law of nations. This principle has been adopted and administered by the Court as part of the-.municipal law of the state of Alabama, although no such principle has been adopted or admitted by that state. And whether the law of nations still prevail? among the states, notwithstanding the Constitution of the. United States; or the right and authority to administer it in these cases are derived from that instrument; are questions not distinctly decided by the majority of the Court. But whether attempted to be derived from one source or the other, I deny the existence of it anywhere, for any such purpose.

Because .the municipal laws of nations cannot operate beyond -their respective territorial limits4 and because one nado 1 has no right to legislate for another; certain rules founded in the law of nature and'the immutable principles of justice have, for the promotion of harmony and commercial intercourse, been adopted by the consent of civilized nations. But no necessity exists for such a law among the several states. In their character of states they are governed by written constitutions and municipal laws. It has been admitted by the counsel, and decided by the majority of the Court, that without, the authority of the statutes of the states chartering these banks, they,would have no power whatever to purchase a bill of exchange, even in the state where .they are established. If it requires the exertion of the legislative power of Pennsylvania, for instance, to enable the United States Banlcto purchase a bill of exchange in that state; why should it not require the same legislative authority to enable it to do the same act in Alabama ? It has been contended jn argument, that the power granted to the bank to purchase a bill of exchange at Philadelphia, in Pennsylvania, payable at.Mobile, in Alabama, would be nugatory, unless the power existed also to make contracts at both ends of the line of exchange. ■ The authority to' deal in exchange may very well be exercised by having command of one end of the line of exchange only. To buy and sell the same bill at the bank is dealing in exchange, and. may be exercised with profit to the bank; but not perhaps- as conveniently as if it could make contracts in Alabama as well as at the bank. “

But if it has obtained authority to command but one end of the line of exchange, it certainly has no right to complain that it cannot control the other; when that other is within the jurisdiction of another state, whose authority or consent it has -not even asked for. The bill of exchange which is the subject of controversy between the Bank of Augusta and Earle, and that which is the subject of controversy between the. United States Bank and Primrose, were both drawn at Mobile, and made payable at New York. Neither of the banks had authority from any state, to make a contract at either end of the line of exchange here, established. Here, then, they claim, and have exercised, all the rights and privileges. of natural persons, independent of their charters; and claim the right, by the comity of nations, to make original contracts everywhere, because they have a right, by their, charters, to make like contracts in the states where they were created, and have “ a local habitation and a name.’? ■

It is difficult to conceive of the exercise of national comity, by a state having no national power. Whatever national power the old thirteen state's possessed previous to the adoption of the Constitution of the United States, they ^conferred, by that instrument, upon the federal government. And to remove all doubt upon’the question* whether the power thus conferred was exclusive' or concurrent, the states are, by the tenth section of the first article of the. Constitution, expressly prohibited from entering into any- treaty, alliance, or confederation ; ■ and, without the consent of. Congress, from entering into any ágreement.or compact with another state, or with.a foreign power. By these provisions, the' states have, by their own voluntary act, and for wise purposes, deprived themselves of all national power, and of all the means of international' communication ; and cannot even enter into an agreement or compact with a sister state, for any purposte- whatever, without' the consent of Congress. ■ The comity of nations is defined by Judge Story, in his Conflict of Laws, to be the obligations of the laws of one- nation in the territories of another, derived, altogether from the voluntary consent of the latter. And in the absence of any positive rule, affirming, or denying, or restraining the operation of foreign laws, Courts of justice.présume the tacit adoption of them by their own government, unless they are repugnant to its policy or prejudicial to its mterests. Conflict Of Laws, 37. '

Now, I ask again, what is the necessity for such a rule of law as this ? Have not the states full power to adopt or reject what laws of their sister states they please ? And why. should the Courts interfere in this caste, when the states have full power to legislate for themselves, and to adopt or reject such laws of their sister states as they think proper ? If Alabama had adopted these laws, no difficulty could have arisen- in deciding between these parties. This Court would not then have been under the necessity of resorting to a doubtful presumption for a rule to guide-its decision. But when the Court have determined that they have the power to presume that Alabama has adopted the laws of the states chartering these banks, other difficult questions arise. How much of the charter of .each bank has been adopted ? * This is á question of legislative discretion, which, if submitted to the legislature of the state, would be decided upon reasons of policy, and public convenience. ■ And the question of power, to pass such a law under the Constitution of Alabama, would have to be considered and decided. These are very inconvenient questions for a judicial tribunal to determine. As the majority of'the Court have ndt expressly stated whether Alabama has adopted the whole‘charters of the banks, or what parts they have adopted, there is now no certainty what the law of Alabama is on the subject of these charters. *

But these are not all the difficulties that arise in the exercise of this power by the judiciary. Many questions very naturally present themselves in the investigation of this subject, and the first is, To what government does, this power belong ? • Secondly, Has it been conferred upon the United States ? or has it been reserved to the states' by the tenth amendment of the Constitution ? If it be determined that the power belongs .to the United States, in what provision of the Constitution is it to be found ? And how is it to be exercised ? By the judiciary, or by Congress? The counsel foy the banks contended, that the power of Congress to regulate commerce among the several states, deprives Alabama of the power to pass any law restraining the sale and purchase of a. bill of exchange; and, by consequence, the whole power belongs to Congress. The Court, by the opinion of the majority, does not recognise this doctrine, in terms. But if .the power which the Court exercised, is not derived from that provisión of the- Constitution, in my opinion it does not exist.

.If .ever Congress shall exercise this power to the broad extent contended for, the power of the states over commerce, and contracts relating to commerce; .will be reduced to very narrow' limits. The creation of. banks, the making and endorsing of bills of exchange and promissory notes,'and the damages on bills of exchange, all relate, more or less, to the commerce among the several states. Whether the exercise of thesi) powers amounts to regulating the commerce among the several states, is not a question for niy determination on this occasion. The majority of the Court have decided that the comity of Rations gives validity to these contracts.

. And what are the reasons upon which this doctrine is now established? Why, the counsel for the banks say: We are obliged to concede that these banks had no authority to make these contracts in the- state of Alabama, in virtue of the laws of. .the states creating them, or by the laws of Alabama. • Therefore, unless, this Court will extend to them the benefit of the comity of nations; they must lose all the money now in controversy,-¡they will be deprived hereafter of the benefit of a very profitable branch of their business as bankers,, and great public inconvenience will result to the commerce of the country. And besides all this, there are maiiy corporations in the north, which were created for the purpose of carrying on various branches of manufactures, and particularly that of cotton Those engaged in the manufacture of. cotton will be unable to send their agents to the south to sell their manufactured articles, and to purchase cotton to carry on their business: and may lose debts already created. - This is the whole amount of the argument, upon which the benefit of this doctrine is claimed. Because banks carinot make money in places-, and by means not authorized by their 'charters ; because' they may lose by contracts made in unauthorized places; because the commerce of the country may be subjected to temporary inconvenience; and because corporations in the north, creatéd for manufácturihg purposes only, cannot, by.the authority of their charters, engage" iii commerce also; this' doctrine, which has not heretofore found a place in our civil code, is to be established'. Notwithstanding, it is conceded' that the states hold ample" legislative power over the same subject, it is deemed necessary, on this occasion, to settle this, doctrine by the supreme tribunal.'' The majority of the Court having, in the'ir opinion, conceded that Alabama might make laws to prohibit foreign banks to. make contracts, thereby admitted, by implication, that she. could make laws to permit such contracts.' I think it would have been proper to have left thé power there, to be exercised or-not, as Alabama, in her sovereign discretion, might judge best for her interest or her comity. The majority of the Court thought and decided otherwise. And here arises the radical and essential difference between them and me.

They maintain a power in the federal government, and in-tibe judicial department of it, to do that which in my judgment belongs, . exclusively, to the state governments; and to be exercised by the legislative and not the judicial departments thereof. A difference so radical and -important, growing out of the fundamental law of 'the land, has imposed om me the unpleasant necessity of maintaining, single handed, my opinion, against the opinion of all the other members of the Court. However unequal, the conflict, duty impels me to maintain it firmly; and, although I stand' alone here,-I have the good fortune to be sustained, to the whole extent of my opinion,, by the very able opinion of the Court of Appeals of Virginia, in the case of the Marietta Bank vs. Pendell and others, 2 Ran. Rep. 465. If Congress have the power to pass laws on. this subject, it is an exclusive powerj and the states would-then have nc power to prohibit contracts of any kind within'their jurisdictions. If the gpvernment pf the United States 'have -power to restrain the states, under the power to regulate commerce, whether it be exerted by the' legislative, or the judicial department of the government is not material; it being the paramount law, it paralyses all, state power on the same subject. And this brings me to the consideration of the second ground on which I dissent.

It was. contended by the counsel for the banks, that all the restraints imposed by the constitution of Alabama, in relation to banking, were designed to operate upon the legislature of. the state, and not upon the citizens of that or any .other state. To comprehend' the whole scope and intention of that instrument, it' will be necessary to ascertain from the language used, what was within the contemplation and design of the convention. The provision in the constitution on the subject of banking is this: “.One state bank may, be. established, with such number of branches as the General Assembly may, from time to time, deem expedient; provided, thaf riO branch bank shall .be established, nor bank charter rehewed, finder the authority of. this state, without the concurrence of two-thirds of both house's of the General Assembly; and provided, also, that not moré than one bank nor branch bank, shall be established, nor bank charter renewed, at any one session of the General Assembly, nor shall any bank or branch" bank be established, or bank charter renewed, but in conformity with the following rales :

1. At least two-fiths of the capital stock shall be reserved for the. state.

2. A- proportion of power in the direction of the bank shall, be reserved to the state, equal at least to its proportion of stock therein.'

•3. The'state, and the individual stockholders, shall be liable, respectively, for the debts of the- bank, in proportion to their stock holden therein.

4. The remedy for collecting debts -shall be reciprocal for and against the bank.

- 5. No bank shall commence operations- until half of the capital stock subscribed for shall be actually paid- in gold or silver, which amount shall in no case be less than one hundred thousand dollars.”

There are a few other unimportant rules laid down, but they are not material to the present inquiry'.' The inquiry naturally suggests itself to the.mind, Why did Alabama introduce into her constitution these very unusual and specific rules ? If they had not been deemed of great importance, they would. not have been found there. Can any one say, therefore, that this regularly organized system, to which . all banks within the state of Alabama were to conform, did not establish'for the state, her legislature, or .other authorities a clear and unequivocal policy on the subject of banking ? It has been conceded in the argument, and by the opinion of the majority of the Court, that these constitjitional provisions dp restrict and limit the power of the'legislature of the state. Then the legislature cannot establish a bank in Alabama, but in conformity with the rules 'here laid down. They have established seven banks; five of them belonging exclusively to the state, and two-fifths of the stock of the o'ther two, with a proportionate power in the direction, reserved to the state. Each of. these banks is authorized to deal in- exchange.

It is proper to stop here, and inquire whether the subject of exchange is proper to enter into the policy of the legislation of a state; and whether it is a part of the customary and legitimate business of- .banking. All the authorities on the subject show that in modern times it is a part of the business of banking. See Postlethwaite’s Commercial Dictionary, title Bank; Tomlin’s Law Dictionary, title Bank; Rees’ Cyclopædia, title Bank; Vatt. 105. This last author quoted, after showing that it is the duty of the sovereign of a nation to furnish for his subjects a sufficiency of money for the purposes of commerce, to preserve it from adulteration, and to punish those who counterfeit it, proceeds to say] “There is another cus: tom more modern, and of no less “use to commerce, than the establishment of money, namely, exchange, or the business, of the bankers; by means of whom a merchant remits immense sums from one end of the world to the other with very little expense, and, if he pleases, without danger. For the same reasons that, sovereigns are obliged to protect commerce, they are obliged to protect this custom by good laws, in which every merchant1 foreigner, or citizen may find security.” From these authorities it appears that exchange is a part of modern banking, or at least so intimately connected with it that all modern banks have authority to deal in it.. And it also appears that it is as much the duty of a state to provide for exchange, as for money or, a circulating medium, for its subjects or citizens.

When the state of Alabama reserved to herself, by her fundamental law, at least two-fifths of the capital and control of all banks to be created in the state, and, by her laws, has actually appropriated to herself the whole of the capital, management, and profits of five out of seven banks, and two-fifths of the other two; had she not the same right to appropriate the banking right, to deal in exchange, to herself, to the same extent ? While performing her duty, under' the constitution, by providing a circulating medium for the citizens, she was not unmindful of her'duty in relation to exchange, and that is .also provided for. Has she not provided increased security and safety to the merchant by making herself- liable for the payment of every bill of exchange sold by the five banks belonging to her, and for two-fifths of all sold by the other two ? ' And has she not also provided by law, that all the profits derived from thus dealing in bills of exchange shall go into the public.treasury, for the common benefit of the people of the state ? And has she not, by the profits arising from her banking, including the profits on exchange, been enabled to pay the whole expenses of the government, and thereby to abolish all direct or other taxation? See Aikin’s Digest, 651.

It was not the intention of the legislature,by conferring the power upon these banks to purchase and sell bills of exchange, to deprive the citizens of the state, or any other natural person, of the right to do the same thing. But it was the intention to exclude all accu-. nmlated bank capital which did not belong to the state, in whole or in part, according to the constitution, from dealing in exchange j and such is the inevitable and legal effect of those laws. Let us test this principle. It is admitted by the majority of the Court, in their opinion, that these constitutional provisions were intended as a restraint upon the legislature of the state; If so intended, the legislature can pass no law contrary to the spirit and intention of the constitution; or contrary to the spirit- and intention of the charters of the banks, created in pursuance of its provisions. Now were the laws chartering the banks which are parties to this suit, contrary to the spirit, and intention of the constitution and ■ laws of Alabama ? That is the precise question.

It must he borne in mind that these were banks, and nothing but banks that made the contracts in Alabama; and in that character, and that only, , have they been considered in the opinion of the majority of the Court. Were those banks chartered by the legis-' lature of Alabama, two-thirds of both houses concurring ? Was, at least, twó-fifths of the capital stock, and of the management of these banks reserved to the state ? Did the profits arising from the'purchase of these bills of exchánge go into'. the treasury of Alabama ? All these questions must be answered in the negative. Then these are not constitutional banks in Alabama, and cannot contract there ? The majority of the Cohrt have'decided these causes, upon the presumption that Alabama had adopted the laws of Georgia, Louisiana,. and Pennsylvania chartering these banks. And this presumption rests for its support upon the fact that there is nothing in .the laws or the policy of the laws of Alabama to resist this presumption. I 'suppose it will hot be contended that the power of this Court, to •presume that Alabama had adopted these laws, is greater than the power of Alabama to adopt the laws for herself. Suppose these banks,had made a direct application to the legislature of Alabama to pass a law to authorize them to deal in bills of exchange in that state, could the legislature have passed such a law without violating the constitution of the state ?

An incorporated bank in Alabama is not only the mere creature pf the law creating it, as banks are in other states; but it is the . creature of a peculiar fundamental law; and if its charter is not in conformity to the provisions of the fundamental’law,'it. is void. It-, must be recollected that the banks, which qre the plaintiffs in these suits, when they present themselves to the legislature, asking permission to use their corporate privileges. there, are not demanding a right, but asking a favour, which the .legislature may grant or refuse as it pleases. If it should refuse, it would violate no duty, incur no responsibility. If, however, the Court exercise the power, it ~ is upon the positive obligation of Alabama, that.'the presumption must arise, or the right does not exist. A positive rule of law cannot arise out of an imperfect obligation,.by presumption or' implication. But to put it on the foot of bare repugnance of the law, presumed ,to be adopted, to the laws of the country adopting, if there -be any repugnance the Court ought not .to presume the adoption. .Story’s Conflict of Laws, 37. The charter of every bank hot created in conformity with the constitution of Alabama, must, at least, be repugnant to it. The presumption is, that-the. charters of all these banks were repugnant, there being no. reason or inducement to make them conform in.the states where they were created. The power of the Court to adopt the laws creating these banks, as they actually existen, and the power of the legislature of Alabama to adopt them in a modified form, or to grant the banks a mere permis-. ■siOn to do a specified act, present very different questions, and involve very different powers. • If, therefore, the legislature could'not adopt' thq charters in the least-objectionable form, nor authorize the banks to deal'in exchange, without violating the constitution of Alabama:, - how can it be said that the contracts in controversy are not against the policy of' the laws .of Alabama ? And by what authority does the majority of this Court presume that Alabama has adopted those laws ? The general rule is, that slight evidence and circumstances shall defeat a mere legal presumption of law.- This case will be .a sigual exception to that rule.

In the case of Pennington vs. Townsend, 7 Wend. Rep. 278, the Protection and Lombard Bank, chartered by New Jersey, by agents, undertook to do banking business in New York, and there discounted the, check which was the subject of the suit, in ^violation of the restraining acts of 1813 and 1818; the first of which enacts that no person unauthorized by law shall become a member of any association for the purpose of issuing notes or transacting any other business which incorporated banks may or' do transact. The act of 1818 enacts that it shall not be lawful for any person, association, or body corporate to keep any office of deposit for discounting, or. for carrying on any kind of banking business, and affixes a penalty of $1000, to be recovered, &c. Under these laws the contract between the. parties was held to be void ; and the Court says, “ The protection against the evil intended to be remedied, to wit, preventing banking without the authority of the legislature of the state, is universal in its application within the state, and without exception; unless qualified by the sátae power which enacted it, or by some other paramount law. Such is not the law incorporating this bank.”

Is there any thing in these laws which more positively prohibits banking in New York, without the authority of the legislature of. that state, than there, is in the constitution of Alabama, prohibiting all banking except in the manner prescribed by the constitution ? Can it be believed that she intended to protect herself against the encroachments of her own legislature only, and to leave herself exposed to the encroachments of all her sister states ? Does the language employed in these provisions of the constitution justify any such construction?' It is general, comprehensive, and'not only restrictive, but expressly prohibitory. Whatever is forbidden by the. • constitution of Alabama, can be done by no one within her jurisdiction and it was sufficient for her to know that no bank could do any valid banking act there without violating her constitution. It was contended, by the counsel for the banks, that no law could be regarded as declaring the policy of the state, unless it was penal; and inflicted some punishment • for its violation. This doctrine is as novel as it is unfounded in principle. I know of no such- exclusive rule by which to reach the mind and intention of the legislature. If the language used shows clearly that particular acts were intended to be prohibited, and the .act is afterwards done, it is against the policy of the law and void. , Suppose the legislature of Alabama were to establish "a bank, disregarding all the conditions and restrictions' imposed by the constitution: would it not violate that instrument, and therefore the act be void ? And can Georgia, Louisiana, or Pennsylvania, by their respective legislatures, do in Alabama what her.own legislature cannot do? The relations which these states hold towards each other, in their individual capacity of states, under' the Constitution of the United States, is that of perfect independence. In the casé of Buckner vs. Finley and Van Lear, 2 Peters’ Rep. 590, Chief Justice Marshall said, “For all national purposes embraced by the federal Constitution, the states and the citizens ^hereof are q&q 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.” ' It is in this foreign and independent relation that these four states stand before this Court in these cases. The condition .of Alabama, taken with a view to this relation,' cannot be worse than that of an independent nation, in like circumstances. What that would be we will see from authority.

“ Nations being- free and independent of each other in the same manner as men are naturally free and independent, the second general law of their society is-that each nation ought to be left in -the peaceable enjoyment of that liberty it has derived from nature. The natural society’of nations cannot subsist, if the rights which •each has received from- nature are not respected. None would willingly, renounce its liberty: it would father break off all commerce with those that should attempt to violate it. From .this liberty and-independence it follows that every nation is to judge of -what it's conscience demands, of what it can orcannot do, of what is.proper or improper to be done; .and consequently to examine and determine whether it can perform any office for another without being wanting in what it owes to itself. In all cases, then, where a nation has the liberty of judging what its duty requires, another cannot oblige it to' act in such or such a manner. For the attempting this would "be doing an injury to- the liberty of nations. A right jo offer constraint to a free- person can only be invested in us in such cases .where.that person is bound to-perform some-particular • thing for us,' or from a particular reason that does not depend -on his judgment; or, in.a word, where we have a complete authority over him.” Vatt. 53, 54.

Now apply these Just and reasonable principles to Alabama,- in her relation of a foreign and independent state, reposing upon the rights reserved to- her by the tenth amehdrnent'pf the Constitution of the United States-; and then show the power that can compel her to pass penal laws to guard and protect those perfect, ascertained, constitutional rights from the illegal invasion of a bank created by any other state. If this power exists at all, it can be shown, and' the' authority by which it acts. But not even a reasonable pretence for any such power or authórity has been shown. The conclusion, must therefore be, that Alabama, as an independent foreign state; owing no duty, nor being' under, any obligation to either of the states", by whose corporations she was invaded; was the sole and exclusive judge of what was proper. or improper to be done; and consequently had a right- to examine and determine whether she 'pould'gxañt a favour to - eí-thér of those states without injury to her- • self; unless indeed there be a controlling power in this Court, derived from some provision of the Constitution of the- United States. As none such has been set up, or relied upon in the opinion -of the majo'rity-'of the Court; for the present Í have a right to conclude that none such exists? And without considering any of the minor points discussed in. the argument, or noticed in the opinion, I'dismiss the-subject.

Case Details

Case Name: Bank of Augusta v. Earle

Court Name: Supreme Court of the United States

Date Published: Mar 18, 1839

Citations: 38 U.S. 519; 10 L. Ed. 274; 1839 U.S. LEXIS 455; 13 Pet. 519

Court Abbreviation: SCOTUS