The herald and news. [volume] (Newberry S.C.) 1903-1937, 1907-08-06
THE LICENSE TAX
HAS BEEN UPHELD
SUPREME COURT RENDERS IM-
PORTANT DECISION.
Petition of British-American Mort
gage Co. Claiming Exemption
Dismissed by the Court.
News and Courier.

court has reversed Itself IN Inc case
of the British and American Mort
gage Company and Attorney General
Lyon has won distinct legal victory.
The court several months ago rem
dered a decision which in effect de-
clared the Franchise License Act Of
1904 unconstitutional and would have
deprived the state Of large revenue
annually. Attorney General Lyon,
representing Comptroller General
Jones, filed a petition for rehear-
ing, which was granted, and upon
this hearing the court has filed Sec
c1d decision sustaining the position
taken by Mr.. Lyon and holding the
Act of 1904 valid. The first hearing
of the case, when the state lost its
case, was before Mr.. Lyon entered
the Attorney Generals Office.
The case was brought by the British
and American Mortgage Company, a
British corporation, to secure an in
junction restraining the Comptroller
General from collecting the tax Of
one-half Of one mill upon the proper
ty of the company in this state, it be-
ing alleged in the petition that the
company did not transact its business
in this state, the contracts being per-
fected in New York. This was the
main point upon which the company's
attorney, Mr.. John P. Thomas, Jr., Of
Columbia, expected to win the case.
He was one Of the legislative commits
sion which framed the Act Of 1904
and he had no idea Of upsetting that
law. But the court decided the case
upon an other point, holding that the
Act Of 1904 disseminated between
foreign and domestic corporations,
whereas in previous Act under which
foreign corporations were licensed
they were' given all the privileges and
immunities of citizens Of this state.
It was held, however, that the su-
preme court had interpreted the Act
Of 1908 enormously in that the said
Act does not, in licensing foreign cor
porations, confer upon them all the
rights and immunities Of private cit
izens Of this state, but eonfers upon
such foreign corporations the rights
and immunities enjoyed by private
citizens Of other states and of foreign
countries doing business in this state.
It was also pointed out that the license
issued to a foreign corporation under
the Act Of 1898 expires after twelve
months and is renewed for each year,
and that the court overlooked this
point, which differentiated the case Of
the British and American Mortgage
Company from the Colorado case on
which the supreme court had relied;
in this case the license granted by the
state to the Smelter Company being
for term Of twenty years.
The Attorney General on the re-
hearing contended that in renewing
the license each year the company
did so with the restrictions and quail
fcations Of the laws Of this state IN
force at that time: consequently when
the license was taken out for 1904 it
was subject to the provisions Of the
Franchise Tax Act Of that year, which
had been enacted before the license
for that year was granted. The su-
preme court now sustains the con-
tentions Of the Attorney General on
both these points, which had not been
taken into consideration in the for
mer opinion.
The case, as stated above, was ar
gued for the state by Attorney Gener-
al Lyon and his assistant, Mr.. NJ. Z.
DeBruhl.
While the first opinion rendered did
not apply directly to any corporation
except the British and American
Mortgage Company, it did in effect
apply to all foreign corporations do
ing business in this state, any one OF
which could have applied for and OBJ
tanned similar order. AS a result
the state would have lost about $780,
900 revenue from the license tax.
Soon after the first decision was rend-
cred the Ware Shoals Company, a do
mestic corporation, applied for a sim
liar order, claiming that the domestic
corporations would be otherwise dis
eriminated against in favor Of foreign
CORPORATIONS under this Interpretation
Of the 1904 Act and this case is now
pending.
Attorney General Lyon was gener-