Honduras Commercial Co. v. State Board of Assessors

1. The federal constitution will not invalidate a state tax upon a corporation merely because the corporation has power to engage in foreign or interstate commerce; the corporation must, be actually-engaged in such commerce to secure the immunity. 2. A franchise tax, imposed upon a company as the price of the right and' privilege of being a corporation, may be exacted by the state granting the franchise, no matter how the corporate property may be invested or employed, or where it may be situate. 3. The yearly license fee or tax levied upon miscellaneous corporations under the act of April 18th, 1884 (Rev. Sup., p. 1016), is such a franchise tax, and is constitutional even as against domestic corporations- ■ engaged in foreign commerce.

On certiorari. The Honduras Commercial Company was organized in October, 1887, under a statute of New Jersey entitled “An act concerning corporations,” approved April 7th, 1875. Rev., p. 175. Its certificate of incorporation is as follows: Certificate of Incorporation. To all to whom these presents shall come, Greeting: We, George M. Hall, of Hackensack, New Jersey, William A. Gay, of Newark, New Jersey, and William F. Chittenden, of Brooklyn, New York, citizens of the United States of America, do hereby associate ourselves together to create a corporation under and pursuant to the Act of the Legislature-of the State of New Jersey, approved April 7, 1875, entitled “An Act Concerning Corporations,” and the several Acts supplementary thereto and amendatory thereof, and in compliance with said Acts do hereby certify : First. That the name assumed to designate the Company hereby intended to be formed, and to be used in its business and dealings, is the HONDURAS COMMERCIAL COMPANY. Second. That the place where the business of such Company is to be conducted in the State of New Jersey is the City of Jersey City, County of Hudson. That the business of such Company is also to be conducted in the City of New York, State of New York, and within the Republic of Honduras, Central America. Third. That the objects and purposes for which said Company is formed is the acquisition, improvement and sale of lands in the Republic of Honduras; farming in all its branches; raising of fruits and stock of all kinds upon said lands, and the sale of the products and increase from such business, there and in foreign markets; the building and maintaining common roads, railroads, canals, lines of telegraph and telephone, in and upon said lands, and upon such other lands as this Company shall or may acquire in said Republic of Honduras, and to charge for the use of the same; the manufacture and sale of lumber and its transportation to foreign markets; to erect and maintain all fences and buildings necessary to carry on said business of farming, fruit growing and cattle raising, and for the storage and preservation of all farm products and fruits, and for their preparation for sale; and to erect and maintain all such yards, stables, abatoirs and other buildings as shall be necessary in the slaughtering of animals and the preparation and preservation of their meats as food for sale; the exploration, development and working of mines for gold, silver and other metals in and upon said lands, and the reduction and sale of the ores and metals taken therefrom; to purchase and charter steamships and sailing vessels, and the sailing of the same between said lands domestic and foreign ports in and about the business and operations to be carried on, on and about said lands by this Company; also to build and maintain wharves, warehouses and hotels upon said lands necessary in carrying on the several branches of business aforesaid; and to carry on a general manufacturing and mercantile business, both wholesale and retail. That the business incident to the aforesaid several branches of business is to be carried on partly at such agencies within the State of New York, in the City of New York, in which last named City, the Executive Offices of said Company are to be located, and the meetings of the Directors are to be held. That the principal part of the business of said Company within the State of New Jersey is tó be transacted at the City of Jersey City, in the County of Hudson aforesaid. That for the objects and purposes hereinbefore set forth, said company shall" have power, to hold,’ purchase and convey real and personal property within this State, beyond this State, and within the State of New York, and the Republic of Honduras, Central America, the same as if such real estate and personal property were all situated in the State of New Jersey, and to exercise such power in the manner provided by law; that the real estate to be purchased, held and conveyed by the Company in the Republic of Honduras, is hereby limited to five million acres of land; and the personal estate is hereby limited to the amount required from time to time by the corporation in carrying on its business. Fourth. The capital stock of said Company is one million ■of dollars, which, capital stock is divided into shares, of the par value of ten dollars each ; and that the amount with which said Company shall commence business is one thousand five hundred dollars. Fifth. The names and residences of the stockholders, and the number of shares held by each of them, are as follows: Names of Subscribers. Residences. No. of Shirs. George M. Hall, Hackensack, N. J. 25. Wm. A. Gay, Newark, N. J. • 25. W. F. Chittenden,' Brooklyn, N. Y. 50. ■ J. A. Gargiulo, New York City. 25. Andrew Wesley Kent, New York City. 25. Sixth. The period at which said Company shall commence, is the First day of October, 1887, and the period at which the «ame shall terminate, is the Twentieth day of September, 1937. ' ‘ In accordance with' “An act to provide for the imposition of state taxes upon certain corporations and for the collection thereof,” approved April 18th, 1884 (Rev. Sup., p. 1016), which, after imposing taxes upon certain classes of corporations -to which this company does not belong, enacts “ that all other corporations, incorporated under the laws of this state and not hereinbefore providéd for, shall pay a yearly license fee or tax of one-tenth of one per centum on the amount of the capital stock of such corporations,” the treasurer of the Honduras Commercial Company reported to the state board of assessors on May 5th, 1888, that the company had issued one thousand shares of stock for cash paid and seventy-five thousand five hundred shares for the purchase of property necessary for the business, at $10 for each share; and thereupon the state board assessed the license fee or tax for the year 1888 at $765. The present certiorari is sued out to test the legality of said •■tax. Argued at November Term, 1891, before Justices Dixon and Reed.