Blue Jacket Consol. Copper Co v. Scherr

Citation50 W.Va. 533,40 S.E. 514
PartiesBLUE JACKET CONSOL. COPPER CO. v. SCHERR, State Auditor.
Decision Date18 December 1901
CourtSupreme Court of West Virginia

40 S.E. 514
50 W.Va. 533

BLUE JACKET CONSOL. COPPER CO.
v.
SCHERR, State Auditor.

Supreme Court of Appeals of West Virginia.

Dec. 18, 1901.


ILLEGAL TAX—INJUNCTION—TENDER OF TAXES DUE—STATE OFFICERS—PERSONAL TRESPASS—CORPORATIONS—LICENSES—CONSTITUTIONAL LAW.

1. The collection of an illegal tax cannot be enjoined upon the sole ground that it is illegal.

2. A bill for an injunction to stay the collection of taxes must tender or offer to pay such taxes as are conceded to be due, or as the court can see ought to be paid, as a condition precedent to the granting of such relief.

3. State officers, who, under the color of the authority of unconstitutional state legislation, are guilty of personal trespasses and wrongs, may be sued, although the constitution of this state provides that the state shall never be made defendant in any suit at law or in equity; and suits may be maintained against such officers in their official capacity, to arrest or direct their official action, by injunction or mandamus, when said suits are authorized by law, and the act to be done or omitted is purely ministerial, in the performance or omission of which the plaintiff has a legal interest; but in other cases such suit cannot be maintained when such officer is only a nominal party, for such suit is then tantamount to a suit against the state.

4. Sections 86 and 87 of chapter 35 of the Acts of the Legislature of 1901, classifying corporations chartered under the laws of this state, and designating those having their principal places of business or chief works outside of the state as "nonresident corporations, " and imposing upon them a greater license tax than

[40 S.E. 515]

upon those having their principal places of business and chief works within the state, does not, in so classifying them and discriminating, violate section 1 of article 10 of the constitution of this state, nor clause 1 of section 10 of article 1 of the constitution of the United States, nor the fourteenth amendment to the constitution of the United States, and is therefore valid, and the charge of such greater tax upon such nonresident corporations legal. (Syllabus by the Court.)

Appeal from circuit court, Kanawha county; F. A. Guthrie, Judge.

Bill by the Blue Jacket Consolidated Copper Company against Arnold C. Scherr, auditor of the state of West Virginia. From a judgment sustaining a demurrer, plaintiff appeals. Affirmed.

Geo. A. McGlone, N. J. Waterbury, Cleon Moore, and Henry Weston, for appellant.

Brown, Jackson & Knight, for appellee.

POFFENBARGER, J. This is an appeal from a decree of the circuit court of Kanawha county sustaining a demurrer to a bill in equity filed by the Blue Jacket Consolidated Copper Company, a corporation organized and existing under the laws of this state, against Arnold C. Scherr, auditor of the state of West Virginia, praying that the said Scherr, as auditor of the state of. West Virginia, may be restrained from proceeding, or attempting to proceed, to collect the franchise or license tax imposed upon said corporation by section 87 of chapter 35, Acts 1901, amending certain sections of chapters 52, 53, 54, 32, and 66 of the Code, and from proceeding to institute or procure the institution of any action or actions for the forfeiture of the charter of said company pursuant to the laws of. this state. The payment of said tax is resisted on the ground that the act violates the provisions of section 1 of article 10 of the constitution of this state and the provisions of the constitution of the United States prohibiting any state from passing any law Impairing the obligation of contracts.

Section 1 of article 10 of the constitution of this state reads as follows: "Taxation shall be equal and uniform throughout the state, and all property, both real and personal, shall be taxed in proportion to its value, to be ascertained as directed by law. No one species of property from which a tax may be collected, shall be taxed higher than any other species of property of equal value; but property used for educational, literary, scientific, religious and charitable purposes; all cemeteries and public property may, by law, be exempted from taxation. The legislature shall have power to tax, by uniform and equal laws, all privileges and franchises of persons and corporations." It is claimed that said act violates the last clause of said section. The legislature, by section 8 of chapter 20 of the Acts of 1885, classified corporations chartered under the laws of this state for the purpose of taxa tion, imposing upon those which had their principal places of business or chief works outside of the state a much heavier license tax than those having their principal places of business or chief works located inside of the state. That provision of the act is as follows: "Upon every corporation which has heretofore obtained or which shall hereafter obtain a charter or certificate of incorporation from this state, and whose principal place of business or chief works are located inside of this state, there shall be an annual license tax of ten dollars, to be paid on or before the first day of May of each year, or at the time of obtaining such charter or certificate of incorporation, and on or before the first day of May thereafter, as the case may be, to the auditor, and by him turned into the general treasury. And upon every corporation which has heretofore obtained or which shall hereafter obtain a charter or certificate of incorporation from this state, and whose principal place of business or chief works are located outside of. this state, there shall be an annual license tax of fifty dollars, to be paid on or before the first day of May of each year, or at the time of obtaining such charter or certificate of incorporation, and on or before the first day of May thereafter, as the case may be, to the auditor, and by him turned over to the general treasury of the state." Chapter 35 of the Acts of 1901 preserves the same classification, and greatly increases the license tax upon both classes of corporations. For convenience, and by way of classification, it provides that those corporations whose principal places of business or chief works are located within this state shall be known as "resident corporations" for the purposes of said chapter, and that those whose principal places of business or chief works are located outside of this state should be known as "nonresident corporations" for the purposes of said chapter. As has been seen, the annual license tax on every corporation having its principal place of business or chief works located outside of the. state was $50 under the act of 1885, without regard to the amount of its capital, while the tax on every corporation having its principal place of business or chief works located within the state was only $10. By chapter 35 of the Acts of 1901, the annual license tax on both classes of corporations chartered under the laws of this state is graduated according to their authorized capital stock, on nonresident corporations beginning with $20, and going up to $1,010 and an additional $50 on each and every $1,000, 000 or fraction thereof in excess of $4,000, 000, when the authorized capital stock is more than $4,000, 000. The company complaining here has an authorized capital stock of $1,000, 000, which, under this act, makes its annual license tax $410 instead of $50. The tax on resident corporations is a great deal less. Its certificate of incorporation is dated January 25, 1901, and said chapter 35

[40 S.E. 516]

went into effect February 18, 1901. The principal administrative provisions of the license tax law are that the tax year shall begin on the 1st day of May and end on the 30th day of April next ensuing; that the tax shall be payable at the beginning of such year; that the auditor, on or before the 1st day of March in each year, shall notify every corporation liable to such tax of the amount thereof and the time of payment; that the auditor, within GO days after the 1st day of May of every year, shall publish, in some newspaper of general circulation published at the capital of. the state, a list of all such corporations as have failed to pay the license tax which became due on the 1st day of May preceding; that any such corporation may, within 60 days after such publication, or before the 1st day of September of that year, pay to the auditor such tax, and $5 in addition, and an additional 1 per cent, for each month of such failure, and thereby be relieved from the forfeiture of its charter; that failure to make such payment within such time shall work a forfeiture of the charter; that the auditor shall furnish the governor and secretary of state, within 30 days after the 1st day of September of each year, a list of all corporations which have so forfeited their charters; that the governor shall publish a proclamation containing a list of all such corporations, proclaiming such forfeiture, and thereafter the charter of such corporation shall be absolutely void and of no effect; that after the publishing of such proclamation the attorney general shall institute a suit or proceeding in the name of the state of West Virginia against such corporation, to have its charter judicially declared forfeited, and the failure of such corporation to pay any such license or penalty due the state shall be deemed, in such suit or proceeding, a misuse of its corporate privilege and franchises, and it shall be deemed as acting without authority of law after such failure; and that if, after any such suit or proceeding shall be instituted, such corporation shall appear therein, and pay the tax and penalty then due, and the costs of such suit or proceeding, the same shall be dismissed, and the corporation relieved from the effects of such forfeiture for failure to pay such tax or penalty. Appellant's bill shows that it has failed to pay the license tax assessed against it for the year beginning May 1, 1901, and ending April 30, 1902; that...

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