become proverbial, were, of course, in the mind of the legislature, and were included in this legislation. Indeed they are the principal people to be affected by it.

The manufacturer of a patented article, who also sells it in the usual course of business in his store or factory, would probably come within the exception of § 4. He may be none the less a dealer, selling in the usual course of his business, because he is also a manufacturer of the article dealt in. Exceptional and rare cases, not arising out of the sale of patented things in the ordinary way, may be imagined where this general classification separating the merchants and dealers from the rest of the people might be regarded as not sufficiently comprehensive, because in such unforeseen, unusual and exceptional cases the people affected by the statute ought, in strictness, to have been included in the exception. See opinion of Circuit Court herein, 127 Fed. Rep., suprà. But we do not think the statute should be condemned on that account. It is because such imaginary and unforeseen cases are so rare and exceptional as to have been overlooked that the general classification ought not to be rendered invalid. In such case there is really no substantial denial of the equal protection of the laws within the meaning of the amendment.

It is almost impossible, in some matters, to foresee and provide for every imaginable and exceptional case, and a legislature. ought not to be required to do so at the risk of having its legislation declared void, although appropriate and proper upon the general subject upon which such legislation is to act, so long as there is no substantial and fair ground to say that the statute makes an unreasonable and unfounded general classification, and thereby denies to any person the equal protection of the laws. In a classification for governmental purposes there. cannot be an exact exclusion or inclusion of persons and things. See Gulf &c. Co. v. Ellis, 165 U. S. 150, and cases cited; Missouri &c. Co. v. May, 194 U. S. 267. We can see reasons for excepting merchants and dealers who sell patented things, in the usual course of business, from the provisions of the statute,

and we think the failure to exempt some few others, as above suggested, ought not to render the whole statute void as resulting in an unjust and unreasonable discrimination.

The case of Connolly v. Union Sewer Pipe Co., 184 U. S. 540, one of the cases cited by the Circuit Court, is not in our opinion applicable. The statute did not apply to agricultural products or livestock while in the hands of the producer or raiser. It was held that this exemption rendered the statute void, as denying to persons within the jurisdiction of the State the equal protection of the laws. The statute was held to create a classification of an arbitrary nature, applicable to large numbers of people, and yet not based upon any reasonable ground. Those who were exempted from its provisions were numerous and stood practically in the same relation to the subject matter of the statute as did the other class upon whom the statute acted, and no valid reason could be given why, if one were included, the other should be exempted. The same reasons applied to all the classes, and should have led to the same results with regard to all. There was no room for a proper or fair discrimination.

We think there is a distinction, founded upon fair reasoning, which upholds the principle of exemption as contained in the fourth section, and that, consequently, the statute does not violate the Fourteenth Amendment on the ground stated.

The case was decided by the courts below solely upon constitutional grounds, and upon those grounds the decision cannot rest. It must, therefore, be remanded, and if there be any other facts to be urged they can be presented on another trial.

The judgments of the Circuit Court and the Circuit Court of Appeals must be reversed and the case remanded to the Circuit Court for further proceedings not inconsistent with this opinion.

Reversed.

VOL. CCVII-17

Argument for Plaintiffs in Error.

207 U.S.

BANK OF KENTUCKY v. COMMONWEALTH OF KENTUCKY.

ERROR TO THE COURT OF APPEALS OF THE STATE OF KENTUCKY.

No. 87. Argued October 23, 1907.-Decided December 2, 1907.

A municipal corporation is not necessarily bound by the decree in a suit against another municipality because officers of the State were parties thereto.

The relation of the state board of valuation to the counties and other municipalities is a matter of state regulation.

In Kentucky, neither a sheriff, nor assessor, nor the board of valuation has control of the fiscal affairs of the county and a judgment against them does not bind the county.

A judgment against a county of Kentucky and the members of the state board of valuation restraining the collection of taxes of that county as impairing the obligation of a contract created by a law of the State and within the protection of the Federal Constitution is not, because such state officers were parties, res judicata as to the validity of taxes imposed by another county, nor is such other county privy to the judgment. It is competent for the legislature of a State to change the day that a bank shall report its property for assessment and to provide that the lien of the assessment shall follow the property in the hands of a vendee. 94 S. W. Rep. 620, affirmed.

THE facts, which involve the liability of certain banks in Kentucky to be assessed for back taxes under the revenue law of the State of Kentucky, are stated in the opinion.

Mr. Alexander P. Humphrey for plaintiffs in error:

This court has finally determined, in a case of similar import, that the thing established by the Federal decree was the binding and conclusive character of the contract embodied in the Hewitt law and its acceptance. Deposit Bank v. Frankfort, 191 U. S. 499 (514). See also dissenting opinion in same case.

This court has therefore decided the proposition that under the Hewitt law the Bank of Kentucky had a valid and binding contract which the Commonwealth of Kentucky could not alter or change, and that by the terms of that contract the property

207 U.S.

Argument for Plaintiffs in Error.

of the Bank of Kentucky and its shares of stock could not, during its corporate existence, be assessed for taxation for state purposes in a different mode or at a greater rate of taxation than is prescribed in said act, and could be assessed for taxation and taxed for county and municipal purposes only upon its real estate used by it in conducting its business.

It is further expressly decided that the provisions of the present constitution of the Commonwealth of Kentucky and the act of November 11, 1892, in so far as they were intended to provide or did provide any assessment for taxation of the property of the Bank of Kentucky, its rights of property or franchise or shares of stock, except to the extent and in the manner provided by §§ 1, 2 and 3 of Article II of the Hewitt law, and except to assess a tax for county and municipal purposes upon its real estate used in conducting its business, are in violation of, and repugnant to, the Federal Constitution and void.

Property is always required to be assessed as of a certain date. Commonwealth v. Riley's Curators, 24 Ky. Law Rep. 2006; Baldwin v. Shine, 84 Kentucky, 507; Wangler v. Black Hawk Co., 56 Iowa, 384; S. C., 9 N. W. Rep. 314; Coal Co. v. Porth, 63 Wisconsin, 77; S. C., 23 N. W. Rep. 105; Southern Ins. Co. v. Board of Assessors, 49 La. Ann. 401; S. C., 21 So. Rep. 913. A proceeding under § 4221 of the Kentucky Statutes is in plain contradiction of the decree of the Federal court and breaks down the contract which that decree establishes as having been made by the Bank of Kentucky.

The county of Jefferson was clearly bound by the decree of the Federal court, as privy thereto, and has no stronger case than the Bank of Kentucky.

There was no lien on the assets of the Bank of Kentucky when they were acquired by the National Bank of Kentucky. Until assessment day it cannot be known what property exists subject to assessment, or against whom the assessment is to be made. There may be an inchoate lien after assessment day and before an actual assessment. But there can be no

Argument for Defendant in Error.

207 U.S.

inchoate lien prior to assessment day. If the day of assessment had arrived then it was the duty of the Bank of Kentucky to report its property subject to assessment and pay the taxes. If the day of assessment had not arrived, it was not the duty of the Bank of Kentucky to report or pay, and there could be no lien for taxes. The report to be made under the Hewitt law was to be made as of July 1. The condition of the bank then governed the assessment. What assets it had on the preceding 15th of September or December 31 was entirely immaterial.

The property owned by the taxpayer upon the assessment day must necessarily govern his assessment. If he parts with his property before assessment day, he cannot be liable for the taxes, nor can there be any lien for the taxes.

- Mr. Henry Lane Stone, with whom Mr. Samuel B. Kirby was on the brief, for defendant in error:

The plea of res judicata as to the Jefferson county taxes is totally inapplicable, and the demurrer thereto, as well as to the whole answer of plaintiffs in error was properly sustained. § 4241, Kentucky Statutes (Carroll's Compilation, 1903); Bank of Kentucky et al. v. Commonwealth of Kentucky, 29 Ky. Law Rep. 643; Bank of Kentucky v. Stone et al., 88 Fed. Rep. 383, 386; Stone, Auditor &c. v. Bank of Kentucky and City of Louisville v. Same, 174 U. S. 799; § 51, Civil Code of Kentucky; Northern Bank v. Stone et al., 88 Fed. Rep. 413, 418; Farmers' Bank of Kentucky v. Stone et al., 88 Fed. Rep. 987; aff'd 174 U. S. 409; Joyes v. Jefferson County Fiscal Court, 106 Kentucky, 615; County of Henderson v. Henderson Bridge Co., 116 Kentucky, 164; Deposit Bank of Frankfort v. Frankfort, 88 Fed. Rep. 986; aff'd 174 U. S. 800; 191 U. S. 499; Bank Tax Cases, 97 Kentucky, 590; Stone v. Louisville, 22 Ky. Law Rep. 423; Equity Rule 48; § 25, Civil Code of Kentucky; Apsden v. Nixon, 4 How. 467; Hale v. Finch, 104 U. S. 265; DuPasseur v. Rochereau, 21 Wall. 130; Metcalf v. Watertown, 153 U. S. 671; Hancock National Bank v. Farnum, 167 U. S. 640.

The owner of property located within the State of Kentucky,