Udylite Corp. v. Mich. Corp. & Sec. Comm'n, No. 5.

CourtSupreme Court of Michigan
Writing for the CourtNORTH
Citation29 N.W.2d 132,319 Mich. 1
PartiesUDYLITE CORPORATION v. MICHIGAN CORPORATION AND SECURITIES COMMISSION.
Docket NumberNo. 5.
Decision Date13 October 1947

319 Mich. 1
29 N.W.2d 132

UDYLITE CORPORATION
v.
MICHIGAN CORPORATION AND SECURITIES COMMISSION.

No. 5.

Supreme Court of Michigan.

Oct. 13, 1947.


Appeal from the Corporation Tax Appeal Board.

The Michigan Corporation and Securities Commission determined that the Udylite Corporation, a Delaware corporation, was indebted in certain sums for privilege fees, and the corporation appealed to the Michigan Corporation Tax Appeal Board. The determinations were affirmed by the Michigan Corporation Tax Appeal Board, and the corporation brings certiorari.

Determinations affirmed.

[29 N.W.2d 133]

Before the Entire Bench, except DETHMERS and BUTZEL, JJ.

Butzel, Levin & Winston, of Detroit, for appellant Udylite Corporation.


Eugene F. Black, Atty. Gen., Edmund E. Shepherd, Sol. Gen., of Lansing, and Daniel J. O'Hara and Gregory H. Frederick, Asst. Attys. Gen., for appellee.

NORTH, Justice.

This appeal in the nature of certiorari by the Udylite Corporation, a Delaware

[29 N.W.2d 134]

corporation, pertains to a controversy concerning the determinations by the Michigan corporation and securities commission that the Udylite Corporation, in addition to payments already made, is indebted in the sum of $613.58 for its privilege fee on its 1943 annual report, and in the sum of $603.37 on its 1944 annual report, which determinations were affirmed by the Michigan corporation tax appeal board on appeal thereto. Appellant claims that the computation of its privilege fees for the respective years was erroneous in so far as there was involved therein the corporation's intangible property consisting of its holdings in United States Treasury notes, its investment in the stock of the Bright Nickel Corporation (for which appellant exchanged its own stock), and its estimated post-war refund of corporation federal excess profit taxes. The controverted issue is the right of the State of Michigan to include the intangible items just above noted in the computation of appellant's annual privilege fees payable to the State of Michigan for the years 1943 and 1944. The requirement in Michigan that a foreign corporation shall pay an annual privilege fee for the right to do business in Michigan and the basis of computing such privilege fee is statutory; and hence decision in the instant case turns upon the construction of the pertinent statutory provisions, which we quote:

‘Sec. 4. Every corporation organized or doing business under the laws of this state, (with certain exceptions) shall, * * * for the privilege of exercising its franchise and of transacting it business within this state, pay to the secretary of state an annual fee of two and one-half mills upon each dollar of its paid-up capital and surplus, but such privilege fee shall in no case be less than ten dollars nor more than fifty thousand dollars.’ 2 Comp.Laws 1929, § 10140, as amended, Comp.Laws Supp.1940, § 10140, Stat.Ann. § 21.205.

‘Sec. 5. In the case of computing the franchise and privilege fees * * * both as to domestic and foreign corporations, such computation shall be made upon the corporation's property, both tangible and intangible, owned or used in Michigan in the ratio that such property bears to the entire property of the corporation, and such ratio shall be applied by the secretary of state to determine the amount of the authorized capital stock owned or used in Michigan, and to determine what portion of the corporation's paid-up capital and surplus, severally, are owned or used in Michigan. * * * None of the property or capital of any corporation subject to paying the privilege fee prescribed in section four which is located without the state of Michigan * * * shall in any case enter into the computation of the net amount of the authorized capital, or the capital and surplus, as the case may be, upon which the computation of the privilege fees shall be made: Provided, That in determining the amount or value of intangible property, including capital investments, owned or used in this state by either a domestic or foreign corporation, such property shall be considered to be located, owned or used in this state for the purposes hereof, if used in or acquired from the conduct of its business in this state, irrespective of the domicile of the corporation. * * *’ 2 Comp.Laws 1929, § 10143, as amended, Comp.Laws Supp.1940, § 10143, Stat.Ann. § 21.208.

Hereinafter we refer to the above italicized portion of the statute as the 1929 amendment. In the instant case the material facts are stipulated. The business of the Udylite Corporation is that of buying and selling metals, chemicals and other commodities used in electroplating, polishing and other surface treatment of metal objects or parts. It also manufactures and sells electroplating and polishing machinery and equipment. Outside of Michigan this corporation does business of a national scope. It maintains offices and warehouses in the states of New York, Ohio, Illinois and California. Of appellant's 1942 total volume of business $1,570,580.79 was from Michigan transactions, and $5,346,988.70 from transactions outside of Michigan. For 1943 appellant's Michigan transactions amounted to $2,060,867.95, and its transactions outside of Michigan amounted to $7,172,728.41. However, appellant's principal office and manufacturing facilities are located in

[29 N.W.2d 135]

Detroit. The books and records of the corporation's business are kept in Detroit. All of its officer's and director's meetings are held in Detroit; and all of its officers reside there, and with one exception the same is true as to the residence of its six directors. The facts are such that Detroit may well be considered to be the location of the headquarters or the main business office of the Udylite Corporation. The contention of the appellee is that, under the circumstances of this case, the corporate domicile in Delaware is nothing more than a paper domicile, and therefore does not control decision herein. And further,...

To continue reading

Request your trial
8 practice notes
  • Cleveland-Cliffs Iron Co. v. Michigan Corp. and Securities Commission, CLEVELAND-CLIFFS
    • United States
    • Supreme Court of Michigan
    • June 1, 1957
    ...us. Fargo v. Hart, 193 U.S. 490, 24 S.Ct. 498, 48 L.Ed. 761; Udylite Corporation v. Michigan Corporations & Securities Commission, 319 Mich. 1, 29 N.W.2d 132.) Where we have, as here, an integrated economic unit, operating as a functional entity, to say that the book value of its capita......
  • Duluth, S.S. & A.R. Co. v. Michigan Corp. and Securities Commission, No. 45
    • United States
    • Supreme Court of Michigan
    • September 10, 1958
    ...fact of the board when they are supported by competent evidence. Udylite Corporation v. Michigan Corporation & Securities Commission, 319 Mich. 1, 29 N.W.2d 132, Chicago, Duluth & Georgian Bay Transit Co. v. Michigan Corporation & Securities Commission, 319 Mich. 14, 29 N.W.2d S......
  • Dooley v. City of Detroit, Nos. 53
    • United States
    • Supreme Court of Michigan
    • May 9, 1963
    ...Detroit Properties Corp., 254 Mich. 523, 236 N.W. 850; Udylite Corp., v. Michigan Corporation & Securities [370 Mich. 206] Commission, 319 Mich 1, 29 N.W.2d 132; and Chicago, Duluth & Georgian Bay Transit Co. v. Michigan Corporation & Securities Commission, 319 Mich. 14, 29 N.W.......
  • Humble Oil & Refining Co. v. Calvert, No. A--11574
    • United States
    • Supreme Court of Texas
    • March 15, 1967
    ...81 L.Ed. 1061 (1937); Wheeling Steel Corporation v. Fox, supra; Southern Pacific Co. v. McColgan, supra; Udylite Corp. v. Michigan Corp., 319 Mich. 1, 29 N.W.2d 132 (1947); In re Wheeling Steel Corp. Assessment, 115 W.Va. 553, 177 S.E. 535, 104 A.L.R. 802 (1934); Altman & Keesling, Allo......
  • Request a trial to view additional results
8 cases
  • Cleveland-Cliffs Iron Co. v. Michigan Corp. and Securities Commission, CLEVELAND-CLIFFS
    • United States
    • Supreme Court of Michigan
    • June 1, 1957
    ...us. Fargo v. Hart, 193 U.S. 490, 24 S.Ct. 498, 48 L.Ed. 761; Udylite Corporation v. Michigan Corporations & Securities Commission, 319 Mich. 1, 29 N.W.2d 132.) Where we have, as here, an integrated economic unit, operating as a functional entity, to say that the book value of its capita......
  • Duluth, S.S. & A.R. Co. v. Michigan Corp. and Securities Commission, No. 45
    • United States
    • Supreme Court of Michigan
    • September 10, 1958
    ...fact of the board when they are supported by competent evidence. Udylite Corporation v. Michigan Corporation & Securities Commission, 319 Mich. 1, 29 N.W.2d 132, Chicago, Duluth & Georgian Bay Transit Co. v. Michigan Corporation & Securities Commission, 319 Mich. 14, 29 N.W.2d S......
  • Dooley v. City of Detroit, Nos. 53
    • United States
    • Supreme Court of Michigan
    • May 9, 1963
    ...Detroit Properties Corp., 254 Mich. 523, 236 N.W. 850; Udylite Corp., v. Michigan Corporation & Securities [370 Mich. 206] Commission, 319 Mich 1, 29 N.W.2d 132; and Chicago, Duluth & Georgian Bay Transit Co. v. Michigan Corporation & Securities Commission, 319 Mich. 14, 29 N.W.......
  • Humble Oil & Refining Co. v. Calvert, No. A--11574
    • United States
    • Supreme Court of Texas
    • March 15, 1967
    ...81 L.Ed. 1061 (1937); Wheeling Steel Corporation v. Fox, supra; Southern Pacific Co. v. McColgan, supra; Udylite Corp. v. Michigan Corp., 319 Mich. 1, 29 N.W.2d 132 (1947); In re Wheeling Steel Corp. Assessment, 115 W.Va. 553, 177 S.E. 535, 104 A.L.R. 802 (1934); Altman & Keesling, Allo......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT