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

court has reversed itself in the cas-,
of the British and American Mort
gage Company and Attorney Genera
Lyon has won distinct legal victory
The court several months ago ren
dcrcd decision which in effect de-
clarcd 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 rchear-
ing, which was granted, and upon
this hearing the court has filed sec
ond 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
ease, was before Mr.. Lyon entered
the Attorney Generals Office.
The ease was brought by the British
and American Mortgage Company, a
l5rltlsh corporation, to secure an in
Junction restraining the Comptroller
General from collecting the tax Of
onc-half of one mill upon the proper
ty OF the company in this slate, it be-
ln% alleged in the petition that the
company did not transact its business
IN this state, the contracts being per-
icctcd 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.
1lc was one Of the legislative commits
sion which framed the Act Of 1904
and he had no idea Of upsctting 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 a previous Act under which
foreign corporations were licensed
they were given all the privileges and
lmmunitics Of citizens of this state.
1t was held, however, that the SUI
prcme court had interpreted the Act
OF 1908 enormously in that the said
Act does not, in licensing foreign cor
roratlons, confer upon them all the
rights and immunitics Of private cit
liens Of this state, but confers upon
such Foreign corporations The rights
and lmmunitics cnjoycd by private
citizens OF other states and Of foreign
countries doing business in this state.
1T WAS also pointed out that the license
issued to Il Foreign corporation under
the Act Of 1893 expires after twelve
months and is renewed for each year,
and that the court overlooked this
point, which differentiated the ease of
the British and American Mortgage
Company from the Colorado ease on
which the supreme court had relied !;
III this ease the license granted by the
state I" the Smcltcr Company being
for Il term Of twenty years.
The Attorney General on the re-
hearing contendcd that in renewing
the license each year thc company
did SO with the restrictions and quail
ticatlons of tue laws Of this state i'm
force at that time: consequently when
the license WAS taken out Tor 1901 il
was subject to the provisions Of the
franchise Tax Act Of that year, which
had been enacted before the license
Tor that year was granted The su-
pr"mr court now suStainS the con-
trnti"ns Of ihr Attorney General ON
beth these points. which had not been
taken into consideration in the for
mer opinion.
The case, as stated above, was ar
gucI for the state by Attorney Gener-
al Lyon and his assistant. Mr.. NJ. p.
DrBmhl.
While the FIRST opinion rendered did
not apply directly to any corporation
except the British and American
Mortgage Company. il did in effect
apply to all foreign corporations do
in" business in this state. any one Of
which could have applied for and OBJ
tanned similar order. As a result
the state w"ul'. have lost about $10,-
600 revenue from the license tax.
Soon after the first decision was rcnd-
cred the Ware Shoals Company, do
nestle corporation, applied for Il sim
liar order. claiming that the domestic
corporations would he otherwise dis
criminatcd against in favor Of foreign
corporations under this interpretation
of the 1904 Act and this ease is now
pending.
Attorney General Lyon was gencr-
ally congratulated today on the win
ming Of this case.