143 A. 495 | Pa. | 1928
Argued May 21, 1928. The sole question in this appeal is whether the State may require the treasurer of a foreign corporation that does business here to assess and collect the four-mill loan tax on corporate loans held by residents. The tax is imposed under section 17 of the Act of June 17, 1913, P. L. 507, amended July 13, 1923, P. L. 1085. Section 1 provides for tax on loans by residents where the company does no business here. The court below held that it could.
The Sun Oil Company is a New Jersey corporation, and maintains an office in Camden. It is registered and does business in Pennsylvania, having its home or principal office in the City of Philadelphia, where it maintains its executive staff, keeps its general corporate books, files and records, and determines the general policy of company business. The president lives in Philadelphia and the treasurer, while a resident of New Jersey, has his office at Philadelphia, where he performs most all of his executive duties, receiving bills and drawing checks there; some part of the treasurer's time is employed in other states. The company has certain mortgage indebtedness, evidenced by bonds, and, in the payment of interest, this distinction may be mentioned: some of the interest is paid in New York from funds *102 drawn from New York depositories, part is paid in New York from funds drawn on Philadelphia depositories, and the remainder is paid in Philadelphia. But all of the interest payments are on checks originally drawn in Philadelphia. Funds are transferred to the proper banking institutions for the payment of this interest, and are kept on deposit with banking institutions in Philadelphia and New York. The company is registered to do business in twenty or more states in the Union. Interest is payable, some in Philadelphia and some in New York.
Section 4 of the Act of June 30, 1885, P. L. 193, makes it the duty of the treasurer of every corporation doing business in this Commonwealth to assess and collect the four-mill tax imposed on corporate loans, and deduct it from the interest paid to individual residents on bonds held by them. The tax is not on the corporation, but on resident owners of bonds. The treasurer is the agent of the State for the assessment and collection of the tax, and, if he fails, the corporation becomes liable: Com. v. Phila., etc., C. I. Co.,
The Act of June 17, 1913, P. L. 507, left unchanged the collection of taxes as in section 4 of the Act of 1885, but the Act of July 15, 1919, P. L. 958, amended section 18 of the Act of 1913 by adding these words: "The provision of this section shall apply to all foreign corporations, duly registered and doing business in this State, without regard to whether the treasurers or other fiscal officers of such corporations whose duty it may be to pay the interest on obligations of the character aforesaid *103 may be residents or nonresidents of this Commonwealth."
It is urged that Pennsylvania cannot require this duty to be performed by the treasurer of this company, who is a nonresident. It must be admitted that, if appellant's contention is correct, all that foreign corporations need do to evade the duty is to keep part of its funds out of the State and have its treasurer claim residence in another state, eating a few meals and sleeping there occasionally. Appellant's chief reliance is placed on N.Y., L. E. W. R. R. Co. v. Pa.,
Before a state may compel a corporation of another state to submit to its jurisdiction in any aspect, it must be within the state in some form. Registration, which is but a license to do business, is not alone sufficient to warrant the imposition of this duty on the treasurer of a foreign corporation, and the acts evidencing "doing business" within the state must be such as to bring the treasurer within the control of the state. The act is not an effort to force a foreign corporation doing little or no business here to do something in the state of its creation for the benefit of Pennsylvania, nor does it force the treasurer of such corporation, living outside the state where its principal business is transacted and its offices are located, to perform a similar duty. In this *106 state, the corporation owned property, did business and performed executive functions.
Much stress is laid on the fact that the treasurer of the corporation lives in New Jersey, and is, therefore, a nonresident. A man may have a number of residences. He may have private dwellings in more than one place, and his official residence in another. If he is a member of a corporation as an officer, as part of its official household, his official domicile is where he performs the duties of his office. As an executive officer of the corporation, it is his official capacity at which the Act of Assembly is directed, not his individual capacity. This official residence is customarily where the executive offices are located, and here Philadelphia, it is admitted, is the place. His official acts were all in the State of Pennsylvania. Residence for all purposes must not be confused with citizenship, nor limited to a man's home. But we do not understand that the constitutionality of the section in question depends solely on the question of residence. It may be a factor, and, with other facts, conclusive: N.Y., L. E. W. R. R. Co. v. Pa., supra. The reasons pointed out in that case for holding the regulation unreasonable do not all exist in the present case. This contract of mortgage was not made prior to the taxing act in force. There are no restrictions such as a contract limiting the regulatory control of the state. Further, it is not impossible in this day to ascertain who bondholders are; every corporation must know its bondholders because of federal income tax laws. When the Sun Oil Company came into the state, it had full knowledge of this law. The mere fact that the treasurer happens to eat and sleep outside the state will not relieve it from answering for the neglect of its treasurer. The question, so far as we are concerned, is, Where does he carry on his official business?
The question is very similar to that in Travis v. Yale
Towne Mfg. Co.,
Justice PITNEY, in that case, reviews N.Y., L. E. W. R. R. Co. v. Pa., supra, holding that it was decided solely on the question of whether or not it was an unreasonable regulation, of such a grave character as to amount to an impairment of the obligation of the contract. The decision is conclusive of the constitutional question. There is no reaching out into New York or New Jersey, or anywhere else; it is simply a case where the State of Pennsylvania lays its hand on the officer of the company, whose official domicile is in this state, and requires him to do certain things.
Judgment affirmed.