State Ex Rel. State Corp. Commission v. Old Abe Co.

The titles to legislative acts are made part thereof by Sec. 16 of Art. 4 of the State Constitution, which is:

"The subject of every bill shall be clearly expressed in its title, and no bill embracing more than one subject shall be passed * *; but if any subject is embraced in any act which is not expressed in its title, only so much of the act as is not so expressed shall be void * * *."

"Where the constitution of the state provides that each act of the legislature shall relate to but one subject, which shall be expressed in the title, the effect is to make the title a part of the enactment, * * *. In this case, it is very clear that the title may be resorted to as an aid in the interpretation of the statute, and that it will be entitled to greater weight than belongs to it in the absence of this constitutional provision; since it must be presumed that the mind of the legislature was directed to the title no less than to the provisions of the enacting clause. * * * But if the constitution requires it to express the subject of the act this objection is removed. ``The constitutional mandate that the object of every law shall be expressed in its title has given the title of an act a two-fold effect. It has added additional force to the title as an indication of legislative intent in aid of the construction of a statute couched in language of doubtful import, and it also operates as a constitutional limitation upon the enacting part of the law.'" Black on Interpretation of Laws, 2d Ed., pages 250-251, Ch. 6, § 83.

"Titles to legislative acts have, in some of the states, come to possess very great importance, by reason of constitutional provisions which not only require that they shall correctly indicate the purpose of the law, but which absolutely make the title to control and exclude from effect and operation as law everything which is incorporated in the body of the act but is not within the purpose indicated by the title. Under such provisions, the title is a part of the act and should be construed as such in determining the subject designed to be regulated by the act." 25 R.C.L. § 267, "Statutes".

"In such jurisdictions as require by constitutional provision the expression of the subject of the act in the title thereof, the title is a part of the act to be considered in construing it * * *" 59 C.J. "Statutes" § 599.

See annotations in 37 A.L.R. pp. 947 et seq. The writer of this annotation stated: "The preponderance of authority, it will be observed, is very decidedly in favor of an affirmative answer to this question (whether the title is a part of the act). It is difficult to perceive any satisfactory ground upon which a definite statement which the organic law requires a legislature to prefix to a statute, and which not only purports to specify the contents of the formal enacting clauses, but also operates so as to invalidate any of those clauses which are outside the scope indicated by it, can be placed in any other category than that of a portion of the statute itself." pp. 948, 949. Also see: State ex rel. City of Mobile v. Board of Revenue and Road Com'rs,202 Ala. 303, 80 So. 368; Commonwealth v. Barney, 115 Ky. 475,74 S.W. 181; Dart v. Bagley, 110 Mo. 42, 19 S.W. 311; People, etc., v. Davenport, 91 N.Y. 574; State v. Robinson, 32 Or. 43,48 P. 357; Lovett v. Ferguson, 10 S.D. 44, 71 N.W. 765; Missouri, K. T.R. Co. v. Mahaffey, 105 Tex. 394, 150 S.W. 881; People v. Fensky, 297 Ill. 440, 130 N.E. 689; Glaser v. Rothschild,221 Mo. 180, 120 S.W. 1, 22 L.R.A., N.S., 1045, 17 Ann.Cas. 576.

If the title is a part of the act, then following a recognized rule of construction, the whole act (including the title) should be construed together when necessary to determine the legislative intent. Not all courts agree that such constitutional provision gives any higher significance to the probative strength of titles in construing acts; but I believe that it is supported by reason as well as good authority. While this court has not specifically passed upon the question, such is the effect of its holding in State ex rel. Sedillo v. Sargent, 24 N.M. 333, 171 P. 790, 791; wherein, through Mr. Justice Roberts, we stated: "In construing statutes, if the meaning thereof is doubtful, the title, if expressive, may have the effect to resolve the doubts by extension of the purview or by restraining it, or to correct an obvious error."

The following cases seem to sustain this view:

"The caption is a part of the law, and must be considered in construing it. Cohn v. People, 149 Ill. 486, 37 N.E. 60, 23 L.R.A. 821, 41 Am.St.Rep. [304], 308; People v. Davenport,91 N.Y. 574; 2 Lewis' Sutherland, Stat. Const., 2d Ed., § 340, which we copy:

"``The constitutional provision that no law shall embrace more than one subject, and requiring that to be expressed in the title, has given the title of legislative acts more importance. It is not, however, required or intended that the title shall contain a full index to all the contents of the law. It is permitted to be general in its terms, and therefore it will seldom occur that it will afford a clue to the intention when the text of the statute is uncertain. But the title of an act is now so associated with it in the process of legislation that when, in performing its constitutional functions, it affords means of determining the legislative intent, in cases of doubt, its help cannot be rejected for being extrinsic and extra-legislative. The language of an act should be construed in view of its title and its lawful purposes. Broad language should be confined to lawful objects.' The effect of the rule is that the title must have the same effect as if it were in the body of the bill." Missouri, K. T.R. Co. v. Mahaffey, 105 Tex. 394, 150 S.W. 881, 883.

"It [the title] is essentially a part of the act, not only because it has been selected and adopted by the Legislature as one of the tests of their meaning as expressed in the bill, but because the Constitution has made it a part, and the controlling part, of the law to which it applies. It is therefore not only useful, in affording a fair index of the legislative intent in case of ambiguity in the context, but it must be read in connection with the remainder of the act — as a part of it — in determining what is the law." Commonwealth v. Barney, 115 Ky. 475, 74 S.W. 181, 182.

"* * * We have herein set out the title of the two acts. These are an aid to determine the legislative intent and to resolve any doubts as to their meaning." State v. Moore, 40 N.M. 344,59 P.2d 902, 903.

"In ruling as to the precise meaning of the language employed in a statute, nothing, as we have said before, is more pertinent towards ascertaining the true intention of the legislative mind in the passage of the enactment than the Legislature's own interpretation of the scope and purpose of this act as contained in the caption. The caption of an act of the Legislature is properly an index to the contents of the statute as construed by the Legislature itself — a summarizing of the act made right at the time when the discussion of every phase of the question is fresh in the legislative mind." Wimberly v. Georgia S. F.R. Co., 5 Ga. App. 263, 63 S.E. 29, 30.

"Under a constitutional provision, such as exists in this state, requiring the subject of the legislation to be expressed in the title (section 19, art. 4), that portion of an act is often the very window through which the legislative intent may be seen." State ex rel. Western Const. Co. v. Board of Com'rs of Clinton County, 166 Ind. 162, 76 N.E. 986, 996.

"Since every act must have a title expressing the subject-matter, the title necessarily becomes a part of the act, and offers valuable help in construing the act and determining the legislative intent." Eugene School Dist. No. 4 v. Fisk,159 Or. 245, 79 P.2d 262, 267.

"In view of the provision of paragraph 4 of section 7 of article 4 of the State Constitution that ``every law shall embrace but one subject, and that shall be expressed in the title,' the title is a part of the act, and is of necessity to be regarded in construing it." Addotta v. Blunt, etc., 114 N.J.L. 85,176 A. 105, 106.

"The title is in a legal sense a part of every statute and may be considered in determining its construction." Wheelwright v. Trefry, 235 Mass. 584, 127 N.E. 523, 524, 37 A.L.R. 920.

"In construing an act, we must look both to the title and the body of the act. We think the title of the act, when considered with the body, gives a clear idea of the intention of the Legislature." State ex rel. 1625 East Washington Realty Co. v. Markey, 212 Ind. 59, 7 N.E.2d 989, 991.

The Constitution of New York requires that the subject of all bills of local or private nature shall be expressed in the title. It is said in People v. Davenport, 91 N.Y. 574: "It was formerly held [in England] that the title of an act was no part of the act itself, and was of little legislative import, but by the Constitution of this State it is made, in some cases [local and private bills], of controlling importance * * *."

For decisions of the English, Federal and state courts on the question, and application of the rules to specific classes of legislation, see annotation in 37 A.L.R. at pages 927 et seq.

The title of the act is: "An Act to Levy an Annual Franchise Tax on Domestic and Foreign Corporations for Profit Doing Business in This State, for the Privilege of Carrying on, Doing Business, or the Continuance of its Charter Within This State; to Provide for Reports to the State Corporation Commission by Said Corporations, and to Provide for the Determination and Collection of Said Tax; to Provide for Penalties for Failure to Comply with the Provisions of This Act; to Provide for the Payment of the Same into the ``Relief Fund', and to Repeal Chapter 10, of the Laws of 1935." Laws 1935, c. 116.

That part of the purview levying the tax is: "Every domestic or foreign corporation for profit engaged in any business in this state, beginning with the calendar year 1935, shall pay to the Corporation Commission on or before the first day of May of each year, an annual franchise tax at the rate of One ($1.00) for each One Thousand ($1,000.00) Dollars, or fraction thereof, of the par value of that proportion of its authorized and issued capital stock represented by its property and business in this state, to be assessed by the State Corporation Commission as provided in this Act. The tax hereby imposed shall be in addition to all property taxes and other taxes and fees now or hereafter required by law."

The words "franchise tax" as applied to corporations have more than one meaning. Some of the definitions are as follows: A tax on intangible property, Chesapeake O.R. Co. v. Commonwealth of Ky., 190 Ky. 552, 228 S.W. 15; Arkansas Memphis Ry. Bridge Terminal Co. v. State ex rel. Atty. Gen., 174 Ark. 420,295 S.W. 378; it is not a tax on property but on the right to do business, State, etc., v. State Tax Comm., 282 Mo. 213, 221 S.W. 721; it is a tax on the privilege of exercising the franchise of the corporation, whether exercised or not. Michigan v. Michigan Trust Co., 286 U.S. 334, 52 S. Ct. 512, 76 L. Ed. 1136, and New York v. Jersawit, 263 U.S. 493, 44 S. Ct. 167, 68 L. Ed. 405; it is a tax for the transaction of business within a state. People, etc., v. Sohmer, 217 N.Y. 443, 112 N.E. 181; McCoach v. Minehill, etc., R. Co., 228 U.S. 295, 33 S. Ct. 419, 57 L. Ed. 842; it is a tax for the continuation of a corporate charter; that is, the right "to be" in contradistinction to the right "to do." People of State of New York v. Hopkins, 2 Cir., 18 F.2d 731; Marsden Co. v. State Board of Assessors, 61 N.J.L. 461, 39 A. 638.

Now what is the purpose of the franchise tax that is levied by the terms of the statute quoted? It is a franchise tax, so it is stated in sec. 2 of the act; but this does not identify the nature, or specific purpose, of the tax. If the title may be construed as a part of the act, it is made perfectly plain that it is an annual franchise tax levied "for the Privilege of Carrying on, Doing Business, or the Continuance of its [the corporation's] Charter Within This State."

But we need not hold the title to be a part of the act, and yet reach the same conclusion. The titles to acts of Congress, and of legislative acts of a number of the states, are only formal, and are not required by constitutional mandate. In such jurisdictions the title is no part of an act; yet it is generally held that, while not controlling, recourse may be had to the title to clear ambiguities, or resolve doubts as to the meaning of words. Fairport, P. E.R. Co. v. Meredith, 292 U.S. 589, 54 S. Ct. 826,78 L. Ed. 1446; Rector, etc., of Holy Trinity Church v. United States, 143 U.S. 457, 12 S. Ct. 511, 36 L. Ed. 226, 228; In re American Surety Co., 319 Pa. 549, 181 A. 364; Thomas v. Buchanan County, 330 Mo. 627, 51 S.W.2d 95. In fact I have resorted to the title of the act only for the purpose of making definite and certain the intent of the legislature in the use of the words "franchise tax;" not to add to or take from the purview of the act.

It is perfectly clear that the legislature intended to levy a franchise tax "for the Privilege of Carrying on, Doing Business, or the Continuance of its [the corporation's] Charter Within This State;" that is upon the right or privilege to do business in the state, or the continuation of the corporation's charter within the state.

The majority assert that the tax in question is a privilege tax; but that it is only levied against a corporation when actively engaged in the principal business for which it was organized. In other words, the majority hold that it is a privilege tax, but that it is not a tax upon the privilege, but upon the doing of business; which is not a privilege tax.

Certain decisions are cited from other jurisdictions, which lend no aid to the construction of the New Mexico statute, unless they assist in construing the words "engaged in any business." The Federal statute is entirely unlike that of New Mexico. The Act of 1909, construed in Flint v. Stone Tracy Co., 220 U.S. 107,31 S. Ct. 342, 346, 55 L. Ed. 389, Ann.Cas. 1912B, 1312, reads: "That every corporation, * * * organized for profit * * shall be subject to pay annually a special excise tax with respect to the carrying on or doing business by such corporation, * * * equivalent to one per centum upon the entire net income over and above five thousand dollars, received by it from all sources during such year, * * *."

The court stated:

"The tax is to be equivalent to 1 per cent of the entire net income over and above $5,000 received by such corporation or company from all sources during the year. * * *

"It is therefore apparent, giving all the words of the statute effect, that the tax is imposed not upon the franchises of the corporation, irrespective of their use in business, nor upon the property of the corporation, but upon the doing of corporate or insurance business, and with respect to the carrying on thereof, * * *."

No other conclusion was possible, as the tax was imposed upon the net income above $5,000. There could be no net income in the absence of the transaction of business.

The Georgia statute construed by the courts of that state in the cases cited provides for a "gross receipts" tax, not at all similar. No tax could be levied in the absence of income from its business.

The cases cited from the Massachusetts courts are based upon a statute very similar to the Federal statute. Taxes are levied "with respect to the carrying on or doing of business", G.L.Mass. c. 63, § 32, by the corporation within the commonwealth. Carlos Ruggles Lumber Co. v. Commonwealth, 261 Mass. 450, 158 N.E. 899.

Nor does Hardwick Sav. Bank Trust Co. v. Drenan, 71 Vt. 289,44 A. 347, cited by the majority, sustain their conclusion.

The tax levied under the Vermont statute against trust companies is "At the rate of 7/10 of one percent annually upon the average amount of its deposits." Such company must necessarily be transacting business if it is liable to the tax. The trust company was in the hands of a receiver and it was held that it was not liable to the tax unless the corporation itself was transacting business. This does not seem to be in harmony with Lowden et al. v. State Corporation Commission, 42 N.M. 254,76 P.2d 1139; nor with Lehigh Valley R. Co. v. Martin, Tax Com'r, 3 Cir., 100 F.2d 139, which seems to support our conclusion in the Lowden case.

The only other cases in support of the majority's conclusion are cases from New York, construing a statute of that state, to which I will hereafter refer.

The majority opinion is bottomed upon a construction of the words, "engaged in any business in this state;" which it is asserted means the carrying on of the principal business for which the corporation was chartered, to-wit: that of mining and the extraction of metal from ore. The majority state:

"Only on one basis could a different rule be contended for, and that must be based on the fact that the title to the act, by its language purports to levy a tax ``for the Privilege of Carrying on, Doing Business, or the Continuance of its Charter Within This State.' If there was nothing contained in the enactment which led us to a contrary conclusion, we might, basing our conclusions on the language of the title, arrive at the same result as the United States Supreme Court did in the case of N.Y. v. Jersawit, supra, where the tax was ``for the privilege of exercising its franchise', as nothing appears to be said about engaging in business.

"However, it is our view that the nature and extent of this enactment should not be determined upon an examination of the title alone, and that it is necessary that we look to the substance of the act as well."

But their conclusion was based entirely upon definitions of the words "engaged in business" found in the decisions of the courts of a number of the states, construing statutes, without giving the slightest weight to the title (which is a part of the act), or to the fact that in nearly every instance the decisions cited as authority had construed statutes quite unlike those of New Mexico, and from other language of the statutes no other conclusion could have been reached.

The Supreme Court of the United States, in Flint v. Stone Tracy Co., supra, in construing the Federal statute, stated: "While the mere declaration contained in a statute that it shall be regarded as a tax of a particular character does not make it such if it is apparent that it cannot be so designated consistently with the meaning and effect of the act, nevertheless the declaration of the lawmaking power is entitled to much weight, and in this statute the intention is expressly declared to impose a special excise tax with respect to the carrying on or doing business by such corporation, joint stock company or association, or insurance company. It is therefore apparent, giving all the words of the statute effect, that the tax is imposed not upon the franchises of the corporation, irrespective of their use in business, nor upon the property of the corporation, but upon the doing of corporate or insurance business, and with respect to the carrying on thereof, * * *."

The question, then, is not the meaning of the words "engaged in business," as used in statutes of other states; but the meaning of "every domestic * * * corporation * * * engaged in any business in this State," in connection with the words "for the Privilege of Carrying on, Doing Business, or the Continuance of its Charter Within This State," as intended by the New Mexico legislature.

As suggested by the majority, if we looked to the title, and ignored the words "engaged in any business in this State," we would conclude that the tax was upon the privilege, and the continuance of its charter; to be paid whether any business was transacted or not. But the question is what did the legislature intend by the use of the language in the title and in section 2 considered together?

The majority's comment on and quotation from the Arkansas case of Arkansas Anthracite Coal Co. v. State is misleading, as I will endeavor to show.

The original New Mexico act was Ch. 100, N.M.L. 1919. It is apparent that it and the act of 1935 are an adaptation of the Arkansas statutes to our conditions. Much of the New Mexico act is a literal copy of the Arkansas statutes (see Arkansas Acts, 1911, p. 67; 1913, p. 518, and 1917 p. 392. Also Digest of the Statutes of Arkansas 1937, Sec. 13488 et seq).

The statutes of Arkansas, material to a decision and which were construed by the Supreme Court of that state in cases hereafter cited, are as follows: "Each corporation organized and doing business under the laws of this State, for profit, shall make a report in writing to the Arkansas Tax Commission annually on or before June 1, on such forms as the commission may prescribe. The report shall be signed and sworn to before an officer authorized to administer oaths by the president, vice president, secretary or general manager of the corporation." Sec. 9799, Ch. 168, Ark.Sts. 1921.

Sec. 9800 provides for a report quite similar to that required by the New Mexico statute.

Sec. 9801 is:

"Upon the filing of the report provided for in §§ 9799 and 9800, the commission, after finding such report to be correct, shall on or before July 1, report to the Auditor of State who shall charge and certify to the Treasurer of State for collection as herein provided for from such corporation a tax of one-tenth of one per cent. upon that part of its subscribed and issued and outstanding capital stock employed in this State, except as hereinafter provided." Sec. 9801, Ch. 168, Ark. Sts. 1921.

"Each foreign corporation doing business in this State, for profit, and owning or using a part or all of its capital or plant in this State, and subject to compliance with all other provisions of law, and in addition to all other statements required by law, shall make a report in writing to the Arkansas Tax Commission annually, on or before June 1." Sec. 9802, Ch. 168, Ark.Sts. 1921.

Sec. 9803 provides for the contents of such report.

"Upon the filing of the report provided for in §§ 9802 and 9803, the commission, from the facts thus reported and any other facts coming to its knowledge bearing upon the question, shall determine the proportion of the authorized capital stock of the corporation represented by its property and business in this State on or before July 1, and shall report the same to the Auditor of State, who shall charge and certify * * * annually from said corporation * * * for the privilege of exercising its franchise in this State, a tax on one-tenth of one per cent. each year upon the proportion of the subscribed, issued and outstanding capital stock of the corporation represented by property owned and used in business transacted in this State." Sec. 9804, Ch. 168, Ark.Sts. 1921.

"The Secretary of State shall prepare and keep a correct list of all corporations subject to the provisions of §§ 9799 to 9819, inclusive, and engaged in business within the State, and shall on April 15, each year, certify a copy of this list to the Arkansas Tax Commission, * * *." Sec. 9808, Ch. 168, Ark.Sts. 1921.

These statutes were amended in some particulars in 1925 (Sts.Ark. 1937, Secs. 13488 et seq.), but immaterial to a decision of the question here being considered.

We conclude from these statutes that domestic corporations "organized and doing business under the laws of this State (Ark.)," and foreign corporations "doing business in this State * * * and owning or using a part or all of its capital or plant in this State," are subject to the tax; and that the tax is imposed "for the privilege of exercising its (the corporation's) franchise" in the state. If the words "doing business in this State," had been controlling it may be that the Supreme Court of Arkansas would have reached the same conclusion that the majority has in this case. But that court did not overlook the fact that the tax was not levied on account of, or with respect to "doing business," in the state, but for the privilege of exercising its franchise in the state. We have the exact question here; except that our statute applies to all corporations "engaged in any business" in the state.

The Supreme Court of Arkansas, in a number of decisions, has held that the meaning of "doing business" as used in the statutes from which I have quoted, had no reference to the prosecution of the business for which the corporation was chartered, but that the tax was exacted for the exercise of the franchise and necessarily must be paid by all corporations that were not entirely dormant. I quote from them, as follows:

"Our court has held that a corporation owes its existence to the state, and the right to enjoy this privilege is a subject of taxation; and that upon the power of the Legislature to impose such a tax there exists no restriction in our Constitution. In the case of a foreign corporation the tax or license is paid for the privilege of exercising its corporate powers in the state. Baker v. State, 44 Ark. [134] 138, and cases cited. * * *

"In the passage of the act in question, no doubt the Legislature had in mind the fact that the right or privilege to be or exist as a corporation, although a matter of value to the stockholders of the corporation, is not an asset of the corporation and transferable as such, and that its value cannot, under ordinary rules, be ascertained for the purpose of taxation as property; but, since it is a privilege or right granted by the state, a franchise tax may be imposed upon this right or privilege, for the purpose of raising revenue." St. Louis Southwestern R. Co. v. State ex rel., 106 Ark. 321, 152 S.W. 110,112.

"The contention is that the corporations have been and are holding the property in which the capital stock is invested merely for the purpose of doing business in the future, and that this does not fall within the terms of the statute. Counsel argue that the words ``doing business' as used in the statute should be interpreted to mean activity in the prosecution of the business specified in the charter. We do not so interpret the statute. The purpose is to exact the payment of a tax on the exercise of the franchise. (St. Louis Southwestern R. Co. v. State ex rel.,106 Ark. 321, 152 S.W. 110), and a corporation necessarily exercises its franchise in the investment of its capital in other property, for it derives its authority to make the investment from the franchise granted by the state. It cannot function at all except under the powers granted to it in the franchise. The statute applies to all active corporations — those which are functioning and not those which are dormant. A corporation must be both organized and active in order to be liable for the franchise tax. A corporation may have been duly organized and may remain or become inactive and dormant, but if it functions at all it is, as before stated, alive and active. This view of the meaning of the statute is strengthened by the fact that the tax is laid according to the amount of capital stock ``employed' in this state, which shows that the employment of capital stock was construed as constituting the doing of business in the exercise of the franchise. * * * The decisions of the Supreme Court of the United States cited by counsel are not applicable, for they relate to a federal statute imposing an excise tax on the net income of corporations doing business in any of the states or territories of the United States." Arkansas Anthracite Coal Co. v. State, 149 Ark. 28, 231 S.W. 184, 185.

"``* * * all of the assets of the defendant are located in the state of Arkansas. The market value of all of the property of the defendant is $92,500. It is further agreed that the defendant has not been actively engaged in business, and its property consists of largely cut-over land, lying and being situated in Cleveland, Grant, and Jefferson counties, and said land is for sale by the defendant, and that the company has no agents in Arkansas authorized to sell said lands, and the lands which have been sold were sold and conveyed from Chicago, Ill.' * * *

"It admits that it had a franchise or authority to do business in this state for the years mentioned, but denies that it did any business under said franchise within the meaning of the act requiring foreign corporations to make report and pay the tax. Section 9802 of Crawford Moses' Digest reads as follows:

"``Each foreign corporation doing business in this state, for profit, and owning or using a part or all of its capital or plant in this state, and subject to compliance with all other provisions of law, and in addition to all other statements required by law, shall make a report in writing to the Arkansas tax commission annually, on or before June 1. Act March 3, 1913, p. 518, § 4.'

"This section was amended by section 5 of Act 236 in 1925, so as to require the making of the report on or before March 1st, instead of June 1st. By section 9803, the form of the report is provided for. By section 9804 the Railroad Commission is directed to determine from the report the proportion of the authorized capital stock of the corporation represented by its property and business in this state on or before July 1st, and shall report the same to the auditor of state, or shall charge and certify to the treasurer of state on or before July 10th, for collection —

"``annually from said corporation, in addition to the initial fee otherwise provided by law, for the privilege of exercising its franchise in this state, a tax on one tenth of one per cent. each year upon the proportion of the subscribed, issued and outstanding capital stock of the corporation represented by property owned and used in business transacted in this state. Act February 15, 1917, p. 392, § 2.' * * *

"It will thus be seen that a foreign corporation is required, ``for the privilege of exercising its franchise in this state,' to pay a franchise tax of ``one-tenth of 1 per cent. each year upon the proportion of the subscribed, issued and outstanding capital stock of the corporation represented by property owned and used in business transacted in this state.' * * *

"It is not contended by the appellee that the act authorizing and directing the collection of a franchise tax is unconstitutional, but its contention is that it is not doing business in the state, and therefore is not subject to the tax. The answer to that proposition is that the tax is not based upon the doing of business in the state, but the right or privilege of doing business in the state. * * *

"We are therefore of the opinion that the tax in question was a valid exercise of the powers of the state, and was intended to be a tax on ``the privilege of exercising its franchise in this state.' * * *

"If the appellee desires to avoid the payment of its franchise tax in this state, it may do so by surrendering to the state its franchise or right to do business herein, and either hold its property in its own name, or transfer it in trust to another to be held for it. But, so long as it holds its franchise and has from the state of Arkansas the right to do business herein, it is liable for the tax. * * *" State ex rel. Attorney General v. Chicago Land Timber Co., 173 Ark. 234, 292 S.W. 98, 100.

"Appellant's first contention is that it is engaged in no sort of business in the state of Arkansas. The stipulation, however, entered into between the parties, provides that the bridge company is a corporation chartered, organized, and existing under the laws of the state of Tennessee, authorized to do business in the state of Arkansas. * * *

"This court has repeatedly held that in case of a foreign corporation, the tax or license is paid for exercising its corporate powers within the state. The bridge company in this case has the privilege of exercising its corporate powers in this state, and is daily engaged in business in repairing and maintaining the bridge and approaches.

"But this court has recently held that the tax is not based upon the doing of business in the state, but the right or privilege of doing business in the state. State ex rel. Attorney General v. Chicago Land Timber Co. [173 Ark. 234] 292 S.W. 98." Arkansas Memphis Ry. Bridge Terminal Co. v. State ex rel. Attorney General, 174 Ark. 420, 295 S.W. 378, 379.

I agree that the case of People ex rel. Lehigh N.Y.R. Co. v. Sohmer, 217 N.Y. 443, 112 N.E. 181, 183, cited in the majority opinion, supports appellee. But Judge Seabury, in his dissenting opinion in that case (concurred in by Judge Pound), was of the opinion that the corporation was liable to the tax, in that it had exercised its general franchise in the state, stating: "The tax imposed by section 182 of the Tax Law is imposed upon a corporation ``for the privilege of doing business or exercising its corporate franchises in this state.' The tax thus imposed has no relation to the special franchises which such a corporation may enjoy. The special franchises are assessed and taxed by a different method. The tax imposed by section 182 is solely upon the privilege of doing business or exercising its general franchise of the right to be a corporation in this state. The law imposes the tax not on the extent of its business, but merely upon the exercise of its general franchise in this state."

The difference between the two opinions in that case divides us here. The majority treat the exaction (notwithstanding statements to the contrary) as a tax upon the carrying on of business, while I assert that it is a tax on the privilege and for the continuance of the corporation's charter within the state. This conclusion is borne out by the provision that the failure to pay the tax or to make the statutory reports subject domestic corporations to dissolution and foreign corporations to the cancellation of its permit to do business in the state.

If the words "any business" have reference only to the business of mining, then it is in no sense a tax upon the privilege but a tax upon the actual doing of the principal business for which the corporation was organized. But having come to the conclusion that the tax is in fact a privilege tax, then the words "any business" should be resolved in favor of a construction that will in effect support that conclusion, if it can consistently be done.

I conclude that the words "any business" are not limited in meaning to the business of mining and the extraction of metal from ore; but have reference to any act of business by which the franchise of the corporation is exercised, and applies to all corporations that are not entirely inactive or dormant, and these are excluded because the tax would not be collectible if imposed.

The practical effect is the exaction of a privilege tax.

I have found no cases construing similar statutes, except those by the courts of New York and Arkansas. I prefer the disposition made of the question by the Supreme Court of Arkansas from whence comes our statute.

The appellee should be held liable to the tax.