American Can Co. v. Emmerson

• Decision Date: 18 June 1919
• Docket Number: No. 12684.,12684.
• Citation: 288 Ill. 289,123 N.E. 581
• Parties: AMERICAN CAN CO. v. EMMERSON, Secretary of State.
• Court: Illinois Supreme Court

288 Ill. 289

123 N.E. 581

AMERICAN CAN CO.

v.EMMERSON, Secretary of State.

No. 12684.

Supreme Court of Illinois.

June 18, 1919.

Appeal from Circuit Court, Sangamon County; E. S. Smith, Judge.

Suit by the American Can Company against Louis L. Emmerson, Secretary of State. From decree dismissing the bill, complainant appeals. Affirmed.

Tenney, Harding & Sherman, of Chicago (Horace Kent Tenney and Harry A. Parkin, both of Chicago, of counsel), for appellant.

Edward J. Brundage, Atty. Gen., and Clarence N. Boord and James W. Gullett, both of Springfield, for appellee.

STONE, J.

This cause is brought to this court on appeal from a decree of the circuit court of Sangamon county sustaining the demurrer of the appellee to the bill of complaint of the appellant and dismissing the bill for want of equity. By the bill of complaint the appellant seeks to restrain the secretary of state of Illinois from paying over to the state treasurer the license fee collected from the appellant by the secretary of state under the amendment to the Corporation Act approved June 22, 1917 (Laws 1917, p. 306). Upon demand by the secretary of state the appellant, under protest, paid the fees under said act as amended in the amount demanded. A stipulation was entered into that the money should be retained by the secretary of state pending the determination of this cause, and a temporary injunction was ordered by the court continued pending this appeal.

The appellant is a foreign corporation organized under the laws of New Jersey. On July 8, 1901, it filed an application on the form provided by the secretary of state for a license as a foreign corporation to do business in the state of Illinois, and fully complied with the statute then in force and with the requirements of the secretary of state. A licese was issued to the appellant under the provisions of the act of May 26, 1897, as amended by the act of April 22, 1899, entitled:

‘An act to amend an act entitled ‘An act to require every foreign corporation doing business in this state to have a public office or place in this state at which to transact its business, subjecting it to a certain condition, and requiring it to file its articles or charter of incorporation with the secretary of state, and to pay certain taxes and fees thereon.’' Laws 1899, p. 118.

Section 3 of said act reads in part as follows:

‘Such corporation, by its president, secretary or any officer thereof, shall make and forward to the secretary of state, with the articles or certificate above provided for, a statement duly sworn to of the proportion of capital stock of the said corporation which is represented in the state of Illinois by its property located and business transacted therein and such statement shall further show the name and address of the agent or representative of said corporation in this state; and such corporation shall be required to pay into the office of the secretary of this state, upon the proportion of its capital stock represented by its property and business in Illinois, fees equal to those required of similar corporations formed within and under the laws of this state. Upon a compliance with the above provisions by said corporation, the secretary of state shall give a certificate that said corporation has duly complied with the laws of this state, and is authorized to do business therein, stating the amount of its entire capital and of the proportion thereof which is represented in Illinois; and such certificates shall be taken by all courts in this state as evidence that the said corporation is entitled to all the rights and benefits of this act, and such corporation shall enjoy those rights and benefits for the time set forth in its original charter or articles of association, unless this shall be for a greater length of time than is contemplated by the laws of this state, in which event the time and duration shall be the limit of time set out in the laws of this state. Such corporations having complied, as aforesaid, shall be required to promptly report to the secretary of state any change in the name and address of its agent or representative in this state, and any increase or decrease in its capital stock, and any increase or decrease of the proportion of its capital stock represented in this state by its property and business therein, by filing in the office of the secretary of state a statement properly sworn to, setting forth the facts.’

The application thus filed with the secretary of state set forth the authorized capital stock at $88,000,000, and the proportion of the stock represented by the property located in and the business transacted in Illinois at the time the application was placed, at $1,000,000. The fee was based upon one eighty-eighth of its authorized capital stock, and was fixed at $1,045, which was paid by the applicant and a license issued to it under the seal of the state of Illinois, setting forth that appellant had filed a copy of its charter and had in all respects complied with the law governing foreign corporations, and that--

‘said American Can Company is from the date hereof duly authorized to do business in the state of Illinois for a term of ninety-nine years and is entitled to all the rights and privileges granted to foreign corporations under the laws of this state; that the amount of capital stock of said corporation is $88,000,000 and the amount of capital stock represented in the state of Illinois is $1,000,000.’

Thereupon the appellant began transacting business in the state of Illinois, and has been carrying on a large volume of intrastate and interstate business, invested large sums in factories, having an appraised value of several million dollars, including real estate, plants, machinery, etc., and employed a large number of persons in its business. In March, 1918, the secretary of state submitted to appellant interrogatories under the amendment of June 22, 1917, to which appellant filed answers, showing in detail the total value of all its property, both real and personal, the assessed and appraised value of its tangible property in Illinois, the total amount of its entire business for the preceding year, both in and out of Illinois, the location of its principal places of business in the different states, its authorized capital stock to be $88,000,000, of which $82,466,600 had been issued, the estimated annual business transacted by appellant at and from places of business in Illinois, including sales to residents of Illinois, to be $19,536,930.37, and the amount of sales made to residents of Illinois to be $10,029,000. On receipt of these answers submitted by appellant the secretary of state wrote to appellant as follows:

‘From the answer to the interrogatories it would appear that .09745 of the tangible property and business of the corporation is represented in Illinois. This will require the corporation to pay upon $8,576,000 of the capital stock, or a fee of $8,621. Allowing a credit of $1,045 (the fee paid heretofore), there is a balance of $7,576 due the state, which you will please remit in accordance with section 5c of the Foreign Corporation Act.’

The only change in the situation of appellant since the license was issued is in the amount of its property and business in the state of Illinois, upon which it has paid to the state the taxes regularly assessed.

It is contended by the appellant that the license issued to do business in this state under the Corporation Act in force at the time is a contract between the state and appellant, which cannot be changed or modified to require appellant to make further payments, unless by a general law similar payments are required of domestic corporations under the same circumstances; that the amendment of 1917 impaired the obligations of this contract and imposed a tax, which amounted to an interference with interstate commerce, denied appellant the equal protection of the laws, and took its property without due process of law, and that the act of 1917 is void under the state and federal Constitutions; that the fee should be based upon the capital stock actually issued, and not upon the authorized capital stock; that the amendment of 1917 creates a different basis for the license fee than was fixed by the statute at the time the license was issued.

It is contended by the appellee that the words ‘capital stock’ in the Foreign Corporation Act at the time the license was issued to appellant, as well as in the amendment of 1917, mean the authorized capital stock fixed by the charter, and not the capital stock actually issued at the time the license was granted; that foreign corporations are subjected to all the liabilities, restrictions, and duties that are or may be imposed upon corporations of like character organized under the general laws of this state, and that said tax is not a discrimination; that the charging of additional fees in case of change in the capital stock represented in this state was permitted under the law in force at the time the license was issued to appellant; that the amendment of 1917 is not a new basis upon which the fees shall be based, but is a method or rule whereby to compute and determine the capital stock represented.

Section 5b, as amended in 1917, is the section of the act complained of. That section made it the duty of the secretary of state from time to time to ascertain by interrogatories propounded to foreign corporations doing business in this state--

‘the proportion of capital stock actually being represented by property located and business transacted in the state of Illinois, which proportion shall be determined by averaging the percentage of the total business of the corporation transacted in Illinois with the percentage of the total tangible property located in this state. If no tangible property is used in the business of the corporation, the proportion of capital stock represented shall be determined with reference only to the percentage...