tax on official income of Prop. 61 Dominion government, or confer such a power on the municipalities. All the judges who supported the prevailing view in this case, rested their judgments upon the principle of the decision of Marshall, C. J., in McCulloch v. Maryland, in which it was held that a law of the State of Maryland imposing a tax upon a branch of the Bank of the United States established in that State was unconstitutional, and upon subsequent American cases upholding and Provincial illustrating the same principle. "The principles," says Harrison, C. J., "to be deduced from the Dominion (American) cases appear to be, that the National government and the State governments are, as it were, distinct sovereignties; that the means and instrumentalities necessary for the carrying on of either government are not to be impaired by the other; that as the power to tax involves the power to impair, the exercise of such a power by the one government on the income of the officers of the other is inconsistent with independent sovereignty of the other; and that in such cases exemption. from taxation, although not expressed in the national Constitution, exists by necessary impli officer. 1The reasoning in this case was much relied on by the judges of British Columbia in the Thrasher case, 1 B.C. (Irving) 153, (1882), to support their holding that it could not be the intention of the British North America Act that provincial legislatures should have control of the Superior Court judges, whom the Dominion government was entitled to use to carry into effect the powers conferred upon it. Their judgment, however, was over-ruled by the Supreme Court of Canada: Cass. Dig. S.C. 480, 3 Cart. 320, n. See, also, as to the Thrasher case, supra pp. 124-126. And Leprohon v. City of Ottawa, was followed in the New Brunswick case of Ex parte Owen, 4 P. & B. (20 N.B.)486, (1881), where the Supreme Court of the province held, (Allen, C.J., dubitante), that the income of an officer in the Customs who resided in the City of St. John, was not subject to taxation. And see Regina v. Bowell, 4 B.C. 498, (1896), noted infi a p. 676, n. 5. 24 Wheat. 316. 340 U.C. R. at p. 499, I Cart. at p. 654. C. J., on State powers cation; " while Hagarty, C.J., cites with approval1 Prop. 61 the words of Marshall, C.J., in McCulloch v. Maryland: "If we measure the power of taxation residing in a State, by the extent of sovereignty which the people of a single State possess and can confer on its government, we have an intelligible standard, applicable to every case to which the power may be applied. . . . We are relieved, as we ought to be, from clashing sovereignty; from interfering powers; from a repugnancy between a right Marshall, in one government to pull down what there is an limits of acknowledged right in another to build up; from of taxation. the incompatibility of a right in one government to destroy what there is a right in another to preserve. We are not driven to the perplexing enquiry so unfit for the judicial department, what degree of taxation is the legitimate use, and what degree may amount to the abuse of the power. The attempt to use it 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." Now it may, of course, be said that there is an obvious distinction between the case of the Bank of Toronto v. Lambe, and the case we have been reviewing of Leprohon v. The City of Ottawa, inasmuch as the former case brought into question. the validity of a provincial Act which merely imposed direct taxation on banks doing business in the province, whereas in the latter the question was whether the provincial legislature could tax the official income of an officer of the Dominion gov 12 O.A.R. at p. 536, 1 Cart. at pp. 607-8. In Ex parte Owen, 4 P. & B. (20 N.B.) at p. 493, (1881), Duff, J., also expresses approval of these words. See supra p. 672, n. I. 24 Wheat. 316, at pp. 428-9. between Prop. 61 ernment, a direct instrument whereby the Dominion government executed its power; and as Harrison, C.J., observes in the latter case, it does not follow from the principles laid down in the American cases relied on by himself and the other judges, "that railway corporations and other corporations, created by or under the authority of the Dominion legislature for other than government purposes, Distinction would be more free from municipal taxation than companies incorporated by the provincial legislature; " or as Burton, J.A., points out echoing the distinction drawn in National Bank v. The Commonwealth, "the doctrine which exempts the instruments of the Federal government from the influence of State taxation, being founded on the implied necessity for the use of such instruments by the government, such legislation as does not impair the usefulness or capability of such instruments to serve the government is not within the rule of prohibition.” taxing a bank and taxing a Dominion officer. But it is to be observed that McCulloch v. The State of Maryland1 and Osborn v. The Bank of the United States on which the Ontario judges in Leprohon v. The City of Ottawa principally based the decision in which so many of them concurred, were, as appears from the report of the argument in 140 U.C. R. at p. 499, 1 Cart. at p. 655. On the general subject of provincial power over Dominion railways see supra p. 596, n. 1. 22 O. A. R. at pp. 541-2, 1 Cart. at p. 614. 39 Wall. 353. 44 Wheat. 316. As to this case see supra p. 672. 9 Wheat. 738. In this case the Supreme Court of the United States, whose judgment was delivered by Marshall, C.J., adhered to its prior decision in McCulloch v. The State of Maryland, holding that a State cannot tax the Bank of the United States. Bank of Toronto v. Lambe1 with the further case Prop. 61 of Railroad Co. v. Paniston, the very cases which 2 Privy decision in Toronto ". were cited to the Board in Bank of Toronto v. Lambe, to show the invalidity of the provincial Act there in question, for that "it is impossible for the Dominion legislature to exercise these powers," (sc., those conferred upon it by section 91), “if banks, as such, are subject to taxation by the provincial legis- The basis latures. The power to tax involves the power to Council destroy." Yet the Privy Council drew no distinc- Bank of tion on the ground that these American cases were Lambe. cases of State legislation interfering with instruments of the Federal government, and that the banks they were concerned with could not be so considered, but they say that the principle which under the United States decisions limit the action of State legislatures at the point at which it comes into conflict with the power vested in Congress, is inapplicable to the Constitution of the 112 App. Cas. at p. 579, 4 Cart. at p. 12. 3 Railroad Co V. Paniston. 218 Wall. 5. In this case the doctrine is laid down, as appears by American the headnote, that the exemption of agencies of the Federal Govern- case of ment from taxation by the States is dependent, not upon the nature of the agents nor upon the mode of their constitution, nor upon the fact that they are agents, but upon the effect of the tax; that is, upon the question whether the tax does in truth deprive them of power to serve the government as they were intended to serve it, or hinder the efficient exercise of their power; that a tax upon their property merely, having no such necessary effect, and leaving them free to discharge the duties they have undertaken to perform, may be rightfully laid by the States; but that a tax upon their operations being a direct obstruction to the exercise of Federal powers may not be. And this doctrine was there applied to the case of a tax by a State upon the real and personal property, as distinguished from its franchises, of the Union Pacific railroad company, a corporation chartered by Congress for private gain, and all whose stock was owned by individuals, but which Congress assisted by donations and loans, and over which it reserved and exercised many special rights, and which amongst other things was bound at all times to transmit despatches and transport mails, troops, munitions of war, etc., for the governinent whenever so required. See on this point Osborn v. The Bank of the United States, 9 Wheat. at pp. 859-868. ple of the decisions not to the Prop. 61 Dominion. That principle is described in Dobbins. v. The Commissioners of Erie county,' quoted by Burton, J.A., in Leprohon v. City of Ottawa, as a necessarily implied restraint of the States in exercising their right of concurrent legislation with the United States, "when the exercise of the right by a State conflicts with the perfect execution of another sovereign power delegated to the United States"; and if this principle is inapplicable to the The princi- Constitution of the Dominion, there appears no American other upon which the decision in Leprohon v. City applicable of Ottawa can be rested. In this latter case, PatDominion. terson, J.A., refers to the fact that two of the learned judges, before whom the case had come in the Courts below, had held the Act in question ultra vires and two intra vires, and observes* :-"The difficulties indicated by this even balance of judicial opinion arise not so much from divergent views in the application of principles upon which all are agreed, as from the uncertainty as to the principles themselves upon which the solution should rest, and for this reason they can only be definitely removed by a Court of final resort." In Bank of Toronto v. Lambe the Court of final resort has determined the principle to be applied to such cases under the Dominion Constitution, and found it different to that applicable to similar cases in the United States."5 116 Peters 435, at p. 447. 222 O. A. R. at pp. 542-3, 1 Cart. at p. 615. See supra p. 668, n. 6. 42 O.A. R. at p. 549, 1 Cart. at p. 623. However, notwithstanding the Privy Council judgment in Bank of Toronto v. Lambe, Leprohon v. City of Ottawa has been followed in the recent case of Regina v. Bowell, 4 B. C. 498, (1896), where Drake, J., held that the imposition of a poll tax upon an officer of the Dominion |