Marconi Wireless Tel. Co. of America v. Com.

Decision Date08 October 1914
Citation106 N.E. 310,218 Mass. 558
PartiesMARCONI WIRELESS TELEGRAPH CO. OF AMERICA v. COMMONWEALTH.
CourtUnited States State Supreme Judicial Court of Massachusetts Supreme Court

Oct. 8 1914.

COUNSEL

Chas A. Snow and Wm. P. Evarts, both of Boston, for petitioners.

Thos J. Boynton, Atty. Gen., and Roger Sherman Hoar, Asst. Atty. Gen., for the Commonwealth.

OPINION

RUGG, C.J.

These are petitions brought by corporations organized under the laws of other states to recover excise taxes paid by each for the privilege of transacting business within the commonwealth.

1. The foreign corporation tax law, St. 1909, c. 490, part 3, § 56 et seq., has been upheld as a constitutional exercise of the power of the state after extended argument and thorough deliberation. Atty. Genl. v. Electric Storage Battery Co., 188 Mass. 239, 74 N.E. 467, 3 Ann. Cas. 631; Keystone Watch Case Co. v. Com., 212 Mass. 50, 98 N.E. 1063; Baltic Mining Co. v. Com., 207 Mass. 381, 93 N.E. 831; S. S. White Dental Co. v. Com., 212 Mass. 35, 98 N.E. 1056, Ann. Cas. 1913C, 805. On writ of error the judgments in the last two cases were affirmed in 231 U.S. 68, 34 S.Ct. 15, 58 L.Ed. 127. The only question to be determined in the cases at bar is whether under the principles already established the several plaintiffs were subject to the excise laid upon each. The tax sought to be recovered is strictly an excise tax and in no sense a property tax. It is a license fee exacted from foreign corporations for the privilege of doing in this state business other than interstate commerce. So far as any of the plaintiffs' requests for rulings seek for a re-examination or reversal of the principles established in these decisions, they rightly were denied.

2. The commonwealth urges that each of the plaintiffs is estopped now from denying that it is within the scope and purview of this law. The ground for this contention is that each seasonably, voluntarily and without protest filed with the secretary of the commonwealth the certificate of its condition as a foreign corporation required by section 54, and likewise appointed the commissioner of corporations its agent for the service of process in accordance with St. 1903, c. 437, § 58, and hence has acknowledged itself to be subject to the law. The principle invoked is that where one of his own volition asks for a privilege or license, he cannot be heard to say afterward that his payment of the fee exacted was illegal and on that account seek to recover it. It relies upon Cook v. Boston, 9 Allen, 393, 394, Emery v. Lowell, 127 Mass. 138, 141, and like cases, and especially upon Ficklen v. Shelby Co., 145 U.S. 1, 24, 12 S.Ct. 810, 36 L.Ed. 601. But all these were cases where a fee was exacted in advance for a license issued for the transaction of a particular branch of business. In the Ficklen Case the precise point decided was that a resident commission broker, who, after paying the required fee, had taken out a general license to do all kinds of commission brokerage for both foreign and domestic correspondents for 1887 and also had given a bond to pay in addition a percentage on all sales during that year, could not resort to the courts to compel the issuance to him of a license for the ensuing year by municipal authorities who refused because he had not complied with the bond of the earlier year on the ground that as the event had proved business had been done only for nonresident principals. The cases at bar in this respect come within the principle applied to a somewhat similar state of facts in Atchison, Topeka & Santa Fé Railway v. O'Connor, 223 U.S. 280, 32 S.Ct. 216, 56 L.Ed. 436, Ann. Cas. 1913C, 1050, where it was held that a foreign corporation paying an excise tax was not acting voluntarily in a legal sense but was under implied duress when it was put to a serious disadvantage against the sovereignty by reason of liability to heavy penalties if in the end its contention for exemption should not be sustained. Severe penalties are provided by section 73 for each day's delay in filing returns, and by section 74 the business of the corporation may be enjoined, while by St. 1903, c. 437, § 60, the delinquent corporation is denied the privilege of maintaining actions in our courts. Somewhat summary remedies are given in the event of a failure to pay the tax. See St. 1909, c. 490, part 3, §§ 58, 62, 69. The provision of section 70 under which these petitions are brought is that relief may be had by any corporation within six months after paying the tax, which shall be the exclusive remedy. It does not require any preliminary protest or statement of objection before filing the petition. From all these considerations the conclusion follows that the several plaintiffs are not prevented from maintaining these petitions because they complied with the requirements of the law as its scope was contended to be by the officers of the commonwealth, in order to avoid the consequences of being mistaken in their own interpretation of it. The provisions of St. 1903, c. 437, §§ 58, 60, may apply in whole or in part to corporations engaged exclusively in interstate commerce. International Harvester Co. v. Ky., 234 U.S. 579, 34 S.Ct. 944, 58 L.Ed. 1479. But that question is not now before us and does not affect the point here decided.

3. It was said in the course of the opinion in Attorney General v. Electric Storage Battery Co., 188 Mass. 239, at pages 240-241, 74 N.E. 467, at page 468 (3 Ann. Cas. 631):

'If the statute before us applied to the maintenance of a place of business solely for the purpose of engaging in interstate commerce it would be unconstitutional. * * * We are of opinion that the Legislature cannot have intended to include in this statute corporations whose usual place of business is established and maintained solely for use in interstate commerce.'

After that decision St. 1909, c. 490, was enacted without material change in this respect, from which the inference flows that the Legislature was content with the law as interpreted by that decision. In Baltic Mining Co. v. Com., 207 Mass. 381, at page 390, 93 N.E. 831, at page 834, it was said, referring to the case last cited:

'In our former adjudication upon it [the statute now under consideration] we expressed the opinion that it was inapplicable to cases where a foreign corporation had its place of business here only for use in interstate commerce. It is not to be inferred that the Legislature intended the statute to go beyond the constitutional authority of the commonwealth.'

What was said in these two decisions was adverted to and apparently adopted in part as the basis of decision in Baltic Mining Co. v. Mass., 231 U.S. 68, where it was stated, at page 84, 34 S.Ct. 15, at page 18 (58 L.Ed. 127):

'And the statute, it is held, does not apply to corporations which have places of business for the transaction solely of interstate commerce.'

See, also, S. S. White Dental Mfg. Co. v. Com., 212 Mass. 35, at page 46, 98 N.E. 1056, Ann. Cas. 1913C, 805.

The contention of the commonwealth that these sentences were not intended to apply to and do not apply to corporations doing a commercial or trading business, but only to transportation corporations cannot be supported. The decisions in which they occur did not relate to transportation corporations but to purely business corporations. The statements cannot be treated as dicta, for they are used as essential links in a chain of reasoning by this court upholding the constitutionality of the statute. We regard ourselves as bound by them in interpreting and applying this statute. The attorney General has argued in substance that the maintenance of a local office solely for a purpose connected with interstate commerce is such a doing business within the state as subjects a corporation to the license fee required by this statute. Reliance in this regard is placed especially upon the words in Pembina Mining Co. v. Penn., 125 U.S. 181, at page 184, 8 S.Ct. 737, at page 738 (31 L.Ed. 650), to the effect that the state has a right to exact a license fee of a foreign corporation for maintaining 'an office in the commonwealth for the use of its officers, stockholders, agents, or employés.' But as was explained in McCall v. California, 136 U.S. 104, at page 112, 10 S.Ct. 881, at page 883 (34 L.Ed. 391), that decision was not intended to impinge upon the equally well-settled principle that:

'The only limitation upon this power of the state to exclude a foreign corporation from doing business within its limits, or hiring offices for that purpose, or to exact conditions for allowing the corporation to do business or hire offices there, arises where the corporation is in the employ of the federal government, or when its business is strictly commerce, interstate or foreign. The control of such commerce, being in the federal government, is not to be restricted by state authority.'

Expressions to be found in Horn Silver Mining Co. v. N. Y., 143 U.S. 305, 317, 12 S.Ct. 403, 36 L.Ed. 164; Wolff Dryer Co. v. Bigler, 192 Pa. 466, 43 A. 1092; Davis v. Dix (C. C.) 64 F. 406, 413, and Atty. Gen. v. Bay State Mining Co., 99 Mass. 148, 153, 96 Am. Dec. 717, relied on by the Attorney General, must be regarded as subject to this limitation. In principle that question is concluded by Norfolk & Western R. R. v. Penn., 136 U.S. 114, 10 S.Ct. 958, 34 L.Ed. 394, and McCall v. California, 136 U.S 104, 10 S.Ct. 881, 34 L.Ed. 391, when read in the light of the numerous definitions (presently to be examined) given by that court of commerce between the states. Such a place of business in common with all others, whether of citizens or aliens, perhaps might be required to pay a license fee, but that question is not presented. The conclusion is that the...

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