Standard Oil Co. v. Commonwealth , 104 Va. 683 ( 1905 )

Harrison, J.,

delivered the opinion of the court.

This is an appeal from a judgment of the State Corporation Commission, imposing a fine of ten dollars and cost, under section 1105 of the Code, as amended by the act of May 15, 1903, upon the Standard Oil Company for the alleged offense of transacting business within the State of Virginia without having first obtained from the Corporation Commission the certificate of authority required by law.

It appears from the record that the Standard Oil Company is a foreign corporation,* created and organized under the laws of Hew Jersey, with an authorized capital stock of one hundred and ten million dollars. It further appears that the appellant company is authorized by its charter to exercise some of the franchises and powers of a public service corporation.

The solution of the present controversy involves a construction of section 31 of the revenue law of Virginia, (Code, 1904, p. 2214) which provides as follows: “Every domestic corporation authorized by its charter to exercise the powers of -a transportation or transmission company, or to own, lease, construct, maintain and operate a public service line or road of any kind, upon the granting or extension of its charter, and every foreign corporation authorized by its charter to exercise the powers of a transportation or transmission company, or to own, lease, construct, maintain and operate a public service line or road of any kind, when it obtains from the State Corporation Commission a certificate of authority to do business in this State, shall pay a fee into the treasury of the State of Virginia to be ascertained and fixed as followsThen follows a table of the fees 'to be paid, graded according to the maximum capital stock authorized by the terms of the charter.

According to this table, the fee for the appellant company, having a maximum authorized capital of $110,000,000, is fixed at $5,000.

It will not be denied that a State has unlimited power in the matter of prescribing the terms and conditions upon which a foreign corporation shall be permitted to do business within her limits, and that, if she chooses, such corporations can be ■excluded entirely. Bank of Augusta v. Earle, 13 Peters 519, 10 L. Ed. 274; Lafayette Insurance Co. v. French, 18 How. 404, 15 L. Ed. 451; Paul v. Virginia, 8 Wall. 168, 19 L. Ed. 357; Lucat v. Chicago, 10 Wall. 410, 19 L. Ed. 972. Therefore, the sole question to be determined in this case is what are the terms and conditions upon which the appellant corporation is permitted to do business in this State ?

These are prescribed by section 37 of the revenue law as follows: “Every foreign corporation authorized by its charter to exercise the powers of a transportation or transmission company, etc., when it obtains from the State Corporation Commission a certificate of authority to do business in this State, shall pay a fee into the treasury of the State of Virginia to be ascertained and fixed as follows

It is clear from this language that a foreign corporation which is authorized by its charter to do the business of a public service corporation must,.in order to carry on business of any kind in this State, obtain from the State Corporation Commission a certificate of authority to do such business, and pay into the State treasury the fee prescribed for sneb certificate; the test of its liability for such fee being, not whether it can or intends to carry on the business of a public service corporation, but whether its charter authorizes it to carry on that business, bio matter which of the numerous businesses authorized by its charter it may be carrying on or proposing to conduct in Virginia, if it is authorized by its charter to carry on the business of a public service corporation, her condition is that the fee prescribed by the section mentioned shall be paid into her treasury.

It is insisted on behalf of the appellant' company, that the language of section 37 of the revenue law, “to do business in this State,” has reference only to doing the business of a public service corporation; that if appellant was asking for authority to carry on the business of a public service corporation, it would be liable for the fee imposed by section 37, because it is “the business in this State” which is contemplated to be done, or possible for the corporation to do, for which the “certificate of authority” is issued and the fee' “'ascertained and fixed;” that, inasmuch as appellant cannot carry on the business of a public service corporation in Virginia, by reason of the inhibition of section 163 of her Constitution, therefore it follows that the Corporation Commission could not have granted it authority to exercise any such powers; that it never could have been the intention of the Legislature of the State to tax the petitioner on a business which it did not ask the privilege of doing, and which the Legislature could not empower it to carry on in the State.

The object of this revenue law was not in our opinion, to confer upon foreign corporations authority to exercise any particular power granted by their respective charters. The language of section 37 was employed as a means of designating and classifying certain foreign corporations, and fixing the rate of fee that should he paid by such corporations for the certificate of authority to carry on any business in Virginia. The intent of the statute is that corporations, whether created under the laws of Virginia, or coming into the State as foreign corporations, having under their charters extensive powers in connection with the operation of transportation and transmission companies, shall pay a larger fee than ordinary industrial companies. The Legislature might well have enacted that a foreign corporation having powers of this character in its charter, should be required to pay more than one not having such powers, although these powers could be exercised in some other State or States but not in Virginia.

Giving the language of section 37 its literal and natural interpretation, it seems plain that the fee prescribed had no relation or reference to the character or the amount of business to be transacted by the foreign corporation in this State, but was ascertained and determined first by the character of the chartered powers of the corporation in the State of its domicil, and second, by the maximum amount of its authorized capital. The fact that a foreign company possessed, among others, the great powers of a public service corporation was doubtless regarded by the Legislature as sufficient evidence of its capacity and importance as a business enterprise, no matter what business it might conduct, to justify its being placed in a higher class than its less pretentious neighbors.

Whether the criterion adopted be arbitrary or not, it is a method - of determining the fee to be paid which the General Assembly chose to adopt, and had the right to prescribe.

Nor did the business to be carried on by the foreign corporation in. this State have any bearing upon the question, whether a particular, corporation was embraced within the class of corporations mentioned in section 37. That question was to he determined solely by. the inquiry, whether such corporation had, by virtue of its charter, the powers of a public service corporation. If it had those powers, then it belonged to the class, and came within the terms of section 37, and must pay the fee there prescribed.

It is further contended that appellant belongs to the class of corporations named in section 38 of the revenue law, and, therefore, is only liable to pay a fee of $600, as prescribed by that section.

It is only neccessary to say, that appellant being, .as we have held, included in the class designated by section 37, it is by the express terms of section 38, excluded from that class ‘of cor: porations there referred to; the language of section 38 being, that every foreign corporation other than such as are described in the last preceding section (87) shall pay, etc.

It is suggested that in case of doubt as to the validity of a tax, the doubt should be solved in. favor of the citizen. We recognize the soundness of this principle when applied to the State and her citizens; but it has, we think, no application to this case’ where the party complaining is not a citizen of Virginia but a foreign corporation, merely asking for the privilege of doing business in this State. We have, however, no doubt of the correctness of the construction placed upon section 37 by the State Corporation Commission. If we entertained doubt merely, our hesitation would have to be solved in favor of the State, as the Constitution requires us to regard the action of the Corporation Commission as prima facie correct. Const., sec. 156, cl. f. ■

For these reasons, the judgment complained of must be affirmed.

Id the case of the American Can Company v. Commonwealth, Harrison, J., speaking for the Court, said:

This appeal from the State Corporation Commission involves the precise question decided to-day in the case of Standard Oil Company v. Commonwealth, and for the reasons there given and filed with the record, the judgment here complained of must be affirmed.