St Francisco Ry Co v. Middlekamp, LOUIS-SAN

• Decision Date: 02 May 1921
• Docket Number: No. 636,LOUIS-SAN,636
• Citation: 41 S.Ct. 489,256 U.S. 226,65 L.Ed. 905
• Parties: ST.FRANCISCO RY. CO. v. MIDDLEKAMP, State Treasurer of Missouri, et al
• Court: U.S. Supreme Court

256 U.S. 226

41 S.Ct. 489

65 L.Ed. 905

ST. LOUIS-SAN FRANCISCO RY. CO.

v MIDDLEKAMP, State Treasurer of Missouri, et al.

No. 636.

Argued March 2 and 3, 1921.

Decided May 2, 1921.

Messrs. Edward T. Miller, of St. Louis, Mo., and Henry S. Conrad, of Kansas City, Mo., for appellant.

[Argument of Counsel from page 227 intentionally omitted] Mr. Frank W. McAllister, of Paris, Mo., for appellees.

Mr. Justice HOLMES delivered the opinion of the Court.

This is a bill to restrain the collection of a franchise tax imposed by the statutes of Missouri upon domestic corporations. Laws of 1917, pp. 237-242.¹ The plaintiff, a corporation of Missouri, filed with the State Tax Com mission a report, as required by law, showing the value of its assets within the State to be $122,826,652, and the amount of its stock employed within the State $21,625,830. The State Tax Commission accepted these figures and following the statute levied a tax measured by 3/40 of one per cent. of the capital stock employed within the State, and also the same tax in respect of the excess in value of the assets within the State over that of such stock, treating that as the 'surplus' which the statute takes as the measure along with the stock. The result of course was a tax of 3/40 of one per cent. upon $122,826,852, equal to $92,119.99. The plaintiff contests the constitutionality of the Act under the Fourteenth Amendment and the Commerce Clause (art. 1, § 8), and under a supposed prohibition of double taxation in the Constitution of Missouri. It also contends that if the Act was valid it was misconstrued in the ascertainment of the surplus over the value of the capital stock in the State. A preliminary injunction was denied by three judges sitting in the District Court and the plaintiff appealed.

The objection most insisted upon in this Court was that the statute made no provision for a hearing, and that although the plaintiff applied to the Tax Commission for a hearing and had one, the statute was bad because it did not provide one in terms. Central of Georgia Ry. Co. v. Wright, 207 U. S. 127, 138, 28 Sup. Ct. 47, 52 L. Ed. 134, 12 Ann. Cas. 463. The mode of collecting the tax is by a suit where, of course, the present plaintiff would be heard, but it is said that the judgment of the Commission can be attacked only for want of jurisdiction and fraud. We cannot suppose however that any question of law apparent on the face of the record would not be open. The constitutional objection mainly relied upon necessarily would be. And as in this case the Commission accepted the plaintiff's figures and the contest is wholly upon matters of law, we see nothing of which the plaintiff can complain in this respect. There is to be sure one charge involving matter of fact dehors the record. It is alleged that the plaintiff was taxed disproportionately as compared with other railroads. But the plaintiff was taxed upon its own figures in accordance with the statute and could not complain of that. If it had made out a case of fraud against the Commission we presume that the State Courts would have been open to it, as well as the District Court of the United States. But nothing of that kind was proved. Sunday Lake Iron Co. v. Wakefield, 247 U. S. 350, 353, 38 Sup. Ct. 495, 62 L. Ed. 1154.

The next objection to the tax has assumed greater importance than any other because it induced the same judges who sat in this case to change their opinion and issue a temporary injunction in a suit like this brought by the Southwestern Bell Telephone Company. We will consider it although it hardly is open on the bill. It now has been decided by the Supreme Court of Missouri that corporations with stock having no stated par value can be admitted to do business in the State, State ex rel. Standard Tank Co. v. Sullivan (Mo.) 221 S. W. 728, and that decision was taken to mean that all such corporations fall within a provision imposing a tax of only twenty-five dollars upon foreign corporations without a capital stock. On that ground it was held that the Southwestern Bell Telephone Company was denied the equal protection of the laws. We hesitate to differ from judges presumably familiar with local conditions, but we cannot read the careful discussion by the Missouri Court as having the meaning supposed. It is true that it adverts to the 'lump annual tax' imposed upon foreign corporations without a capital stock while arguing that the policy and laws of Missouri do not forbid their entering the State. But at a...