Cudahy Packing Co. v. Hinkle

• Decision Date: 09 January 1928
• Docket Number: No. 330.,330.
• Citation: 24 F.2d 124
• Parties: CUDAHY PACKING CO. v. HINKLE, Secretary of State of Washington, et al.
• Court: U.S. District Court — Western District of Washington

24 F.2d 124 (1928)

CUDAHY PACKING CO. v. HINKLE, Secretary of State of Washington, et al.

No. 330.

District Court, W. D. Washington, S. D.

January 9, 1928.

Palmer, Askren & Brethorst, of Seattle, Wash., for plaintiff.

John H. Dunbar, Atty. Gen., and L. B. Donley, Asst. Atty. Gen., for defendants.

Before the statutory court, composed of DIETRICH, Circuit Judge, and BOURQUIN and CUSHMAN, District Judges.

CUSHMAN, District Judge.

Plaintiff, a corporation organized under the laws of the state of Maine, sues to enjoin the enforcement of the statutes of Washington requiring of corporations the payment of certain amounts of money, called in the acts, the one "a filing fee," and the other an "annual license fee." While plaintiff asks an interlocutory injunction, the matter is before the court upon motion to dismiss for want of equity and a failure of the bill to state facts entitling plaintiff to relief.

Complaint is made that these acts in question will deprive plaintiff of property without due process of law, and that they deny to plaintiff equal protection of the law, and violate the commerce clause (article 1, § 8, cl. 3) of the Constitution. It is alleged that plaintiff about 40 years ago engaged in business in the state of Washington, and has since been engaged therein, in interstate and foreign commerce; that it has been actively engaged in interstate commerce between each and every one of the states, and foreign commerce; that its principal office is in the city of Portland, Me., and that for the purpose of facilitating the transaction of its interstate business it has established agencies in all the states of the Union; that in Washington its only agency is a warehouse and sales office; that its only property in Washington is a lease of a warehouse and refrigeration system and fixtures therein, which is of a total value of about $40,000; that none of its traveling salesmen take orders for goods, save such as plaintiff ships into the state direct to the purchaser, or to its warehouse for the purpose of filling orders therefor; that its goods, warehoused in Washington, consist in most part of original and unbroken packages shipped into the state, and which are in large part reshipped and resold in original and unbroken packages in foreign commerce; that its intrastate and interstate commerce are so inextricably interwoven that they cannot be separated; that of its goods sold in the year ending in October, 1926, less than six-tenths of 1 per cent. of its entire business was done in the state of Washington (in round numbers), its goods sold for such year being in excess of $231,000,000, and its Washington sales less than $1,325,000, and that more than one-half of its sales made in the state of Washington, and more than one-half of its merchandise handled in its branch office in Washington, were in interstate and foreign commerce; that less than four-tenths of 1 per cent. of its wages and salaries paid were earned in the state of Washington, such amount being a little less than $67,000.

Subsequent to 1919, plaintiff increased its capital stock from $35,000,000 to $45,000,000, of which authorized capital but $29,800,000 have been issued, and that all of its property does not exceed in value the amount of its capital stock issued. The supplemental articles evidencing such increase have not been filed with the secretary of state of Washington. Until the law of 1925, presently to be mentioned, no law of the state required the filing of a certificate of the increase or decrease of capital stock. Sections 1 and 2, chapter 149, of the Laws of the State of Washington, of the Extraordinary Session of 1925 (Laws of 1925, p. 417), amended sections 3836 and 3837 of Remington's Comp. Stat. to read:

Section 3836: "Every corporation incorporated under the laws of this state, or of any state or territory in the United States or of any foreign state or country, required by law to file articles of incorporation in the office of the secretary of state, shall pay to the secretary of state a filing fee in proportion to its authorized capital stock as follows: * * * Capital of $1,000,000.00, or more, and less than $2,000,000.00, fee $750.00; and $10.00 additional for each $1,000,000.00, or major fraction thereof, of capital stock in excess of $2,000,000.00: Provided, however, that the total filing fee for filing such articles of incorporation shall in no case exceed the sum of $3,000.00."

Section 3837: "Every corporation, foreign or domestic, desiring to file in the office of the secretary of state articles amendatory or supplemental articles increasing its capital stock, or certificates of increase of capital stock, shall pay to the secretary of state the fees prescribed in the preceding section for the total amount to which the capital stock of the corporation is so increased, less the amount already paid for filing the original articles of incorporation, or original articles and amendatory or supplemental articles, or certificates of increase, and every such corporation desiring to file amendatory or supplemental articles decreasing, or certificate of decrease of capital stock, shall pay to the secretary of state a filing fee of $25.00. For filing of other amendatory or supplemental articles, it shall pay a fee of $10.00: Provided, however, that the total amount paid by any corporation for filing its original articles of incorporation and all of its articles amendatory or supplemental articles increasing its capital stock or certificates of increase of capital stock, shall in the aggregate in no case exceed the sum of $3,000.00, plus $10.00 for each separate instrument filed in addition to its original articles of incorporation."

Chapter 147 of the Laws of the Extraordinary Session (Laws of 1925, p. 410) amended section 3853 of Remington's Comp. Stat. to read as follows:

"Such corporation shall cause to be filed * * * in the office of the secretary of state * * * a certified copy of each and all of its certificates of increase * * * of its capital stock."

Section 3855 provides:

"Any foreign corporation doing business in this state which shall fail to comply with the provisions of the two preceding sections, shall be subject to a penalty of two hundred and fifty dollars to be recovered in a civil action to be instituted by the Attorney General in the name of the state of Washington, upon his being furnished with a sworn statement of facts sufficient to justify such action."

Section 3861 provides:

"Any agent of any foreign corporation, conducting or carrying on business within the limits of this state, for and in the name of such corporation, contrary to any of the provisions of this chapter, shall be deemed guilty of a misdemeanor, and upon conviction thereof shall be punished by a fine not exceeding two hundred dollars, or by imprisonment in the county jail for a term not exceeding three months, or by both such fine and imprisonment."

It is alleged that in 1926 plaintiff tendered the secretary of state for filing its certificate of increase of capital stock, together with a filing fee of $10, which was refused; the secretary demanding $580, less $35 in fees already paid. It is to be inferred that such demand was made under the foregoing provisions of law.

It is alleged that plaintiff has scores of traveling salesmen in the state of Washington and scores of other employés; that plaintiff, upon refusing to pay the filing fee provided for by chapter 149, was informed by the secretary of state and state treasurer of the state of Washington that, unless paid, they would request the Attorney General to institute a civil action against plaintiff under section 3855, supra, and to prosecute the agents of plaintiff carrying on business in the state, under section 3861, supra, and that such suits are about to be brought. It is alleged that the prosecution of such agents would ruin plaintiff's business in the state.

Section 3 of chapter 149 of the Laws of the Extraordinary Session of 1925 (Laws of 1925, p. 418) amended section 3841 of Remington's Comp. Stat. to read as follows:

"Every corporation incorporated under the laws of this state, and every foreign corporation, having its articles of incorporation on file in the office of the secretary of state, shall, on or before the first day of July of each and every year, pay to the secretary of state, for the use of the state, the following license fees in proportion to its authorized capital stock as follows: * * * Capital in excess of $1,000,000.00 and up to and including $2,000,000.00, fee $150.00; and $10.00 for each $1,000,000.00 or fraction thereof of capital in excess of $2,000,000.00: Provided, however, that the total amount of such annual license fee shall in no case exceed $3,000.00. Every corporation failing to pay the said annual license fee, on or before the first day of July of any year, and desiring to pay the same thereafter, and before the first day of January next following, shall pay to the secretary of state, for the use of the state, in addition to the said license fee the following further fee, as a penalty for such failure, the sum of two dollars and fifty cents. * * *"

Section 3842, Remington's Comp. Stat., provides:

"No corporation shall be permitted to commence or maintain any suit, action or proceeding in any court of this state, without alleging and proving that it has paid its annual license fee last due. * * * The state board of tax commissioners may institute suits to enforce the payment of any license fee, due from any corporation under this or any other law. Failure upon the part of any corporation to pay its annual license fee for a period of one year, from and after the date when such payment first became due, shall be prima facie evidence of the insolvency of such corporation, and the fact of such insolvency may be shown by the state or by any private person or corporation. * * * It shall be the duty of the secretary of state to...