198 U. S.

Argument for the City of Covington.

Mercantile Bank, 186 U. S. 458; Hammond v. Massachusetts &c., and Churchill v. Utica, 154 U. S. 550; and see 3 Wall. 387; People v. Commissioners, 4 Wall. 244.

As to the alleged contract of exemption, the estoppel proposed by the bank should not prevail in this court because the same would not prevail in the courts of Kentucky. Section 905, Rev. Stat.; Mills v. Duryee, 7 Cr. 484; Hampton v. McConnell, 3 Wheat. 234; McElmoyle v. Cohen, 13 Pet. 326; Christmas v. Russell, 5 Wall. 290; Thompson v. Whitman, 18 Wall. 457; Phoenix Ins Co. v. Tennessee, 161 U. S. 184; Abrahams v. Casey, 179 U. S. 218; Newport v. Commonwealth, 21 Ky. L. R. 47; Metcalf v. Watertown, 153 U. S. 671; Negley v. Henderson, 59 S. W. Rep. 19; Bell Co. Coke Co. v. Pineville, 23 Ky. L. R. 933; Cooper v. Newell, 173 U. S. 555; Union Planters' Bank v. Memphis, 111 Fed. Rep. 570; S. C., 189 U. S. 71; Hilton v. Guyot, 159 U. S. 113; Chicago & A. R. R. Co. v. Wiggins F. Co., 108 U. S. 118; Chase v. Curtis, 113 U. S. 452; Renaud v. Abbott, 116 U. S. 227; Embry v. Palmer, 107 U. S. 3; New Orleans v. Citizens' Bank, 167 U. S. 371; Freeman on Judgments, § 576; Wills' Res Judicata, § 531; Deposit Bank v. Frankfort, 191 U. S. 499; Bergman v. Bly, 66 Fed. Rep. 40, 43; Lavin v. Emigrant Savings Bank, 1 Fed. Rep. 641, 650; Shelby v. Gay, 11 Wheat. 367; Green v. Neal's Lessees, 6 Pet. 299; Morley v. Lake Shore Ry. Co., 146 U. S. 166; Insurance Company v. Iron Company, 42 Fed. Rep. 376; Railroad Company v. Blossburg, 20 Wall. 137, 143; Bank v. Bank, 136 U. S. 235; Lawton v. Young, 52 Fed. Rep. 439; Sanford v. Roe, 69 Fed. Rep. 546; Bauserman v. Blunt, 147 U. S. 647; Thompson v. Sawyer Co., 57 Fed. Rep. 1030; Luther v. Borden, 7 How, 1; Christy v. Pidgeon, 4 Wall. 196; Leffingwell v. Warren, 2 Black, 603; Railroad Company v. Trust Company, 82 Fed. Rep. 124; Hill v. Hite, 85 Fed. Rep. 268; Railroad Company v. Reed, 80 Fed. Rep. 234; Rice v. Adler, 71 Fed. Rep. 151; Hodgson v. Burleigh, 4 Fed. Rep. 121; Durden v. Malloy, 43 Fed. Rep. 407; Railroad Company v. Guest, 84 Fed. Rep. 628; Southerland v. Village of Ernst, 86 Fed. Rep. 597;

Argument for First National Bank.

198 U. S.

Thomas v. Burney, 35 Fed. Rep. 115; Talliaferro v. Barnett, 47 Arkansas, 359.

Mr. Shelley D. Rouse and Mr. Edmund F. Trabue, with whom Mr. James S. Pirtle, Mr. John C. Doolan and Mr. Attila Cox, Jr., were on the brief, for First National Bank:

The act of March 21, 1900, so far as it is retroactive, infringes the Fourteenth Amendment, in taking the property of the bank and its shareholders without due process, and denying it the equal protection of the law; and so far as it authorizes the assessment and taxation either previously or subsequently to March 21, 1900, discriminates against national banks and their shareholders, and offends $5219 of Rev. Stat. Commonwealth v. Citizens' Nat. Bk., 25 Ky. L. R. 2100, 2254; Scobee v. Bean, 109 Kentucky, 526; Baldwin v. Shine, 84 Kentucky, 502; Lexington v. Fishback, 109 Kentucky, 170; Frankfort v. Fidelity Trust Co., 111 Kentucky, 667; National Bank v. Owensboro, 173 U. S. 664; Ferry Co. v. Kentucky, 188 U. S. 385, 395; Bellevue v. Peacock, 89 Kentucky, 495; Van Allen v. Assessors, 3 Wall. 573; Railroad Co. v. Commonwealth, 24 Ky. L. R. 2124; Commonwealth v. Nute, 24 Ky. L. R. 2138; Franklin County Court v. L. & N. R. R. Co., 84 Kentucky, 59; Commonwealth v. L. & N. R. R. Co., 89 Kentucky, 139.

The judgment of the Campbell Circuit Court, affirmed by the Kentucky Court of Appeals, adjudging in the bank's favor an irrevocable contract under the "Hewitt law" exempting the bank from all taxation, except by that law imposed, is res judicata of that question, and prevents its relitigation here. Owensboro National Bank case, 173 U. S. 648; Bank of Kentucky v. Stone, 88 Fed. Rep. 383; S. C., 174 U. S. 799; New Orleans v. Citizens' Bank, 167 U. S. 371; Sou. Pac. Co. v. United States, 168 U. S. 45; Baldwin v. Maryland, 179 U. S. 220; Newport v. Commonwealth, 50 S. W. Rep. 845; S. C., 51 S. W. Rep. 433; Frankfort v. Deposit Bank, 111 Kentucky, 950; S. C., 191 U. S. 499.

MR. JUSTICE DAY, after making the foregoing statement, delivered the opinion of the court.

That the acceptance of the provisions of the so-called Hewitt law did not constitute an irrevocable contract, releasing the bank from taxes upon compliance with its terms, has been settled. Bank Tax Cases, 102 Kentucky, 174; Citizens' Savings Bank v. Owensboro, 173 U. S. 636. Reference is made to the various cases leading up to this result in Deposit Bank v. Frankfort, 191 U. S. 499, 508. We are, therefore, left upon this branch of the case to consider the effect of the judgment of the state court of Kentucky, set up in the complainant's bill as an adjudication of the rights of the parties and a final determination that the acceptance of the Hewitt law had the effect of a valid contract. When this case was before the Circuit Court for the second time, 129 Fed. Rep. 792, Judge Cochran, after an elaborate review of the Kentucky cases, reached the conclusion that as the taxes involved in the case in which the adjudication was had were for a different year than those involved in this suit, the former judgment did not have the effect of an estoppel between the parties, being only conclusive, under the Kentucky decisions, as to taxes in the years involved in the suit in which the judgment was rendered. We do not doubt that this is the settled law of the Supreme Court of Kentucky. Nor does it make any difference, in the view which that court takes of the matter, that the adjudication as to the right to collect the taxes involved the finding of an exemption by contract, which included not only the taxes for the years in suit, but all taxes which might be levied under the authority of the contract. The ground upon which the court based its decision with reference to the effect of such adjudication is stated in the case of City of Newport v. Commonwealth, 106 Kentucky, 434, 444, as follows:

"The only question remaining for decision is upon the plea of res judicata.

"The plea in this case avers that the subject matter of the

former suit was identical with that involved in this action, and that the facts were the same in both actions, except that the former action attempted to collect a tax for the year 1893, and the present action was attempting to collect a tax for the year 1894.

"The authorities seem to hold that when a court of competent jurisdiction has, upon a proper issue, decided that a contract, out of which several distinct promises to pay money arose, has been adjudged invalid in a suit upon one of those promises, the judgment is an estoppel to a suit upon another promise founded on the same contract. But taxes do not arise out of contract. They are imposed in invitum. The taxpayer does not agree to pay, but is forced to pay; and the right to litigate the legality of a tax upon all grounds must, of necessity exist, regardless of former adjudications as to the validity of a different tax."

It is unnecessary to cite the cases; they will be found in Judge Cochran's opinion. It is sufficient to say that if this case had been decided in the state court in Kentucky the adjudication pleaded herein, not involving taxes for the same years as those now in controversy, would not avail as an estoppel between the parties. It is true that a different rule prevails in the courts of the United States. The reasons therefor were stated in an opinion by Mr. Justice White, speaking for the court, in the case of New Orleans v. Citizens' Bank, 167 U. S. 371, and in cases arising in a Federal jurisdiction the doctrine therein announced will doubtless be adhered to. The learned counsel for the plaintiff in error refer to the decision of this court in Deposit Bank v. Frankfort, 191 U. S. supra, as authority for the doctrine that where a contract right has been adjudicated which involves an exemption from all taxation such adjudication will conclude the parties as to the right to legally tax for other years, although the particular year was not directly involved in the suit in which the adjudication was made. But in that case the court was dealing with the effect to be given to a judgment of a Federal court in which such

contract right had been adjudicated, when the Federal judgment was set up in a state court; and in that case it was recognized, in the opinion of the court as well as in the dissenting opinion, that the courts of Kentucky, in giving effect to the judgments of their own courts, were guided by a different rule, and in that State an adjudication involving taxes for one year cannot be pleaded as an estoppel in suits involving taxes for other years. 191 U. S. 514, 524.

The case of Deposit Bank v. Frankfort was only concerned with the effect to be given to a Federal judgment adjudicating a contract right, when pleaded in a state court. We are now dealing with the weight to be attached to a state judgment when pleaded as res judicata in a Federal court. That was the very question decided by this court in the case of Union & Planters' Bank v. Memphis, 189 U. S. 71, wherein it was held that the Federal courts were not required to give to such judgments any greater force or effect than was awarded to them. by the courts of the State where they were rendered. Upon this branch of the case the question then is, What effect is given in the courts of Kentucky to such pleas of estoppel? As we have seen, it is there settled that the judgment would not be effectual to protect the alleged contract rights of the complainant as to the taxes involved for years other than the one directly involved in the adjudication set up. We, therefore, find no error in the judgment of the Circuit Court refusing an injunction upon the ground of an estoppel by judgment.

As to the taxes for the years prior to the passage of the act of March 21, 1900, it is argued by the bank that to give this retroactive effect to the law will be to deprive it and its stockholders of their property without due process of law, and will be in violation of section 5219 of the Revised Statutes, prohibiting discrimination against national banks and their stockholders. The act of March 21, 1900, as stated in the preamble, was passed because of a decision of this court holding prior legislation of the State undertaking to tax the property of national banks unconstitutional. Owensboro National Bank v.