119 Ky. 196 | Ky. Ct. App. | 1904
Opinión óe tiie court by
Revebsins.
•'This xvas a'proceeding in the Franklin circuit court by'the auditor’s agent, under section -1241 of the Kentucky Statutes of 1903, to collect from the appellant an organization tax of dn’Vtenth of one per cent, of the face, value of its' authorized capital stock. • The case xvas; submitted on the pleadings to the circuit judge for an adjudication as to the merits o'f the claim, xvith the result that'a'judgment xvas rendered
There is, of course, no controversy as to the facts'; the question being one purely of law, which must be solved by á proper construction of' the statutes bearing on the subject: For convenience we deem it advisable to insert herein so much of the statutes of the State as appear necessary for the solution of the question before us:
Ky. St., 1903, section 763: “Any .number of persons, not less than seven, may associate to form a corporation for the purpose of constructing, operating, and maintaining a railroad. Such persons shall execute articles of incorporation,which shall specify the name of the proposed railroad, the number of years the corporation is to continue, the amount of its capital stock, and the number of shares into which the same shall be divided; the number of directors, which shall not be' less than five nor more than fifteen, and their names, the places from and to which, and the name of each county into- or through which, it is intended to be constructed, and its length as near as may be. Each subscriber to such articles shall set opposite his name his place of residence and the number of shares subscribed by him. Whenever two hundred and fifty dollars per mile has in good faith been subscribed, and twenty per cent, thereof paid in in cash, to the persons named in the articles as directors, and an affidavit made to that' effect by two of said named directors and attached thereto, a copy of said articles and affidavit shall be filed in’ the office of the Railroad Commission, and in the office of the secretary of State; and when a certificate of such fact is delivered by the said officers to the incorporators,'the' persons who have subscribed such articles shall be ¿ body' corporate b3r the name specified in the articles, and as such1
Heel ion 765: “No raidroad corporation, organized or created by or under the laws of any other State, shall have the right io condemn land for, or acquire the right of way for, or purchase or hold land for itsi depots, tracks, or other purposes, until it shall have first filed in the office of the secretary of State of this State, in the manner provided in the first article of this chapter, its acceptance of the Constitution of this State, and shall have become organized as a corporation under the laws of this State, which it may do by filing in the offices of the Secretary of State and the Railroad commission articles of incorporation in the manner and form provided in section 763 uf this article.”
Section Kdl : “No company, association or corporation created by, or organized under, the laws or authority of any State or county other than this State, shall possess, control, maintain or operate any railway, or part thereof, in this State until, by incorporation under the laws of this State, (he «ame shall have become a corporation, citizen and resident of this State. Any such company, association or corporation may, for the purpose of possessing, controlling, maintaining or operating a railway or part thereof in this State, become a corporation, citizen and resident of this State by being incorporated in the manner following, namely: By filing in the office of the secretary of State, and in the office of the Railroad Commission, a copy of the charter’ or
Section 842: “Any company, association or corporation that, after the first day of August, one thousand eight hundred and ninety-three, possesses, controls, maintains or operates any railway, or part thereof, in-this State, without becoming incorporated as a corporation, citizen and resident of this State, as permitted by section 841, shall be guilty of a misdemeanor, punishable by a fine of not less than one i housand dollars for each day, or part thereof, that any railway, or part thereof, in this State, is possessed, controlled, maintained or operated by it. Any person that in anywise aids or assists, either as officer, agent, servant or employe in so possessing, controlling, maintaining or operating any railway, or part thereof, in this State, shall be guilty of a misdemeanor, punishable by a fine of not less than one hundred dollars for each day or part thereof that he so assists or aids.”
Section 422-5: “Every corporation which may be incorporated by or under the laws of this State, having a capital stock divided into shares, shall pay into the State treasury one-tenth of one per centum upon the amount of capital stock which such corporation is authorized to have, and a like tax upon any' subsequent increase thereof. Such tax shall be due and payable on the incorporation of the company and on the increase of the capital thereof, and no such corporation shall have or exercise any corporate powers until
Appellant is a foreign corporation, organized under the laws ■ of Ohio, operating, as lessee, a railroad through • the State;, of Kentucky, known as the “Cincinnati- Southern,” upper a .-contract, made, in 1881; the road so operated having-been constructed under an act of the General Assembly oftpe. .Commonwealth of Kentucky, .entitled “An act to authorise, the trustees of the Cincinnati Southern Railway to’acquire tp,e right of. way, and extend, a .line of railway through certain qo,unties in this . Commonwealth,” approved. February 13,-1872, and. -contained in Acts 1871-72, vol. 1, p. 23, c. 2.72. Ry.this act certain named trustees were authorized to extend, construct, and maintain a line of railroad within the-Commonwealth of Kentucky, with single or double tracks, with all the usual appendages, including a line of .telegraph, and to exercise such powers vested in them under and by virtue of an act of the General Assembly of the State of Ohio-, subject to the provisions and restrictions this act provides. These trustees were, given the power to acquire rights of why by gift, grant, or purchase, or proceedings by ad quod damnum, to be exercised in the mode pointed out in the act and also to lease its railroad, for the purpose of being operated, to other persons or companies-. The trustees and their lessees were prohibited by the terms of the grant from instituting any action in the federal courts against a citizen of this State, or of removing any action instituted against" them to the federal courts. No question is made as to the reg- ’ ularity of the organization of either the lessor or lessee company or as to the latter being in lawful possession of the franchises leased by it from the former, the sole question be-, ingpas to whether the latter is subject to pay the organization tax under section 4225, because it complied' with the provisions
An inspection of section 4225 will show that by its very: terms it applies only to such corporations as have -been in-' corporated- by or under the laws of this’ State, having a' capital stock divided.into shares, while section 841 applies' only to companies, associations, or corporations created' by or organized under the laws or authority of any Staté or ; country other than this State, and without regard to whether they are, or not, stock corporations. Section 763' provides-' exactly how many number of persons, not less than seven,: may associate to form a corporation for the purpose of constructing, operating, and maintaining a railroad. A compari-! son of the terms of 'section 763 with those of 841 will show the vast difference between what is required'by the former" to create railroad corporations by the laws of: this State,'’
We are not questioning the right of the State to prescribe any terms it pleases as a condition precedent to the exercise of business by foreign corporations within its boundary. The question is, not what the State may do, , but-what it has done; and while the argument of hardship,is not always decisive as to the. proper construction of a statute, and should never be allowed to overturn its plain letter, yet it is. often
Tliis provision in section 55G was enacted in 1Ó02, and is a legislative construction against the blind and indiseriminati'ng policy, sought to be maintained by appellee, of requiring • every foreign corporation- which ¡does business in the State to pay an organization tax, without' regard' to the fact that it has already paid one at home;.. Undei; ¡section 558, although that which had been a foreign.' corporation, by' being consolidated and recreated, haé' been' iTally' dnd in •truth organized under the laws of this State, y.et so tender was die Legislature on'the subject of double Taxation that it in express terms-declined to require so ' jpüéh of the constituent element -of the new corporation as-, may-¡hare .paid an organization tax to its native Slate wh'eh if:was originally created to’pay agaiii to tliis State.. If fh¿\ (-(msTru.e’tiou,. contended .for by appellee had been the policy; of- the State, the proviso in section 55G would not have been enacted. Section 76’3 relates to the c-reation of corporations, and these latter only are required by section 4225 to pay an organization tax. . ; . -
For the reasons indicated, the- judgment is -reversed, with directions to -dismiss the proceedings against a'ppéllaní.
Petition for rehearing by appellee'overruled.