Case Name: CUDAHY PACKING COMPANY v. HINKLE, SECRETARY OF STATE, et al.
Court: Supreme Court of the United States
Jurisdiction: United States
Decision Date: 1929-02-18
Citations: 278 U.S. 460
Docket Number: No. 278
Parties: CUDAHY PACKING COMPANY v. HINKLE, SECRETARY OF STATE, et al.
Judges: Mr. Justice Holmes joins in this opinion.
Reporter: United States Reports
Volume: 278
Pages: 460–470

Head Matter:
CUDAHY PACKING COMPANY v. HINKLE, SECRETARY OF STATE, et al.
No. 278.
Argued January 7, 1929.
Decided February 18, 1929.
Messrs. J. Harry Covington and S. W. Brethorst, with whom Messrs. E. B. Palmer, Thomas M. Askren, and Thomas Creigh were on the brief, for appellant.
Mr. Levi B. Donley, Assistant Attorney General of Washington, with whom Mr. John H. Dunbar, Attorney General, was on the brief, for appellees.

Opinion:
Mr. Justice McReynolds
delivered the opinion of the Court.
Appellant is incorporated under the laws of Maine. Its authorized capital stock is $45,000,000. Less than $30,000,000 has been issued and the total value of the corporate property does not exceed that sum. It does an extensive business in meats and foodstuffs throughout the Union and abroad. During 1916 when the capital stock was $20,000,000 the articles of incorporation were duly filed with the proper state officer and the corporation began to carry on closely associated interstate and intrastate business in Washington. Its property therein is now worth $40,000. Gross sales by the corporation for the year ended October 31, 1926, were $231,750,000. Of these $1,313,275 were made in Washington, less than half bbing intrastate.
The statutory provisions here important appear in the sections of Remington's Compiled Statutes of Washington mentioned below.
Sec. 3852 authorizes foreign corporations to .do business within the State as those organized under her laws upon compliance with conditions prescribed by Secs. 3853-3854.
Sec. 3853 requires every foreign corporation to file with the Secretary of State a certified copy of its charter, etc., and Sec. 3854 requires appointment of a local agent.
Sec. 3836 (as amended by Chap. 149, Extraordinary Session, 1925) directs that every local and foreign corporation required by law to file its articles with the Secretary of State shall pay graduated filing fees, not above $3,000, reckoned upon its authorized capital stock.
Sec. 3837 requires every corporation, foreign or domestic, desiring to file with the Secretary of State articles amendatory or supplemental articles increasing its capital stock to pay the fees prescribed in the preceding section less any sum theretofore paid.
Sec. 3841, (as amended by Chap. 149, Extraordinary Session, 1925) requires corporations, foreign and domestic, to pay annual license fees, not above $3,000, reckoned upon authorized capital stock.
Secs. 3842, 3843, 3844, 3846, 3855, and 3861 provide heavy penalties for failure to pay prescribed filing fees .and license taxes.
Filing fees because of the increased capital, and license taxes for 1927, both reckoned upon the authorized capital stock, were demanded of appellant. Penalties for failure to comply were threatened. By an original bill in the-United States District Court, Western District of Washington, it set up the above-stated facts and asked an appropriate injunction to prevent enforcement of the demands. A court of three judges heard the cause, denied a preliminary injunction, and dismissed the bill for want of equity.
Looney v. Crane Co., 245 U. S. 178, 187, examined Texas statutes which required foreign corporations to pay permit and franchise taxes graduated according to authorized capital stock and declared them in conflict with the Federal Constitution because they imposed "direct burdens upon interstate commerce, and, moreover, exerted the taxing authority of the State over property and rights which were wholly beyond the confines of the State, and not subject to its jurisdiction, and therefore constituted a taking without due process." These statutes prescribed no maximum tax. In other respects they were not unlike the acts here under consideration.
Unless saved by the $3,000 limitation, the Washington enactments are subject to the constitutional objections pointed out in Looney v. Crane Co., and must be denied effect.
Baltic Mining Co. v. Massachusetts, 231 U. S. 68, upheld a tax based upon authorized capital stock, but limited to $2,000, imposed by Massachusetts upon foreign corporations for the privilege of doing local and domestic business therein. Consideration was given to the fact that the corporate assets, were four times the authorized capital and to the limitation. Weighing all the circumstances, the Court concluded that no direct substantial burden was imposed upon interstate commerce and that property beyond the State was not taxed.
In Alpha Portland Cement Co. v. Massachusetts, 268 U. S. 203, 218, we said:
" It must now be regarded as settled that a State may not burden interstate commerce or tax property beyond her borders under the guise of regulating or taxing intrastate business. So to burden interstate commerce is prohibited by the commerce clause; and the Fourteenth Amendment does not permit taxation of property beyond the State's jurisdiction. The amount demanded is unimportant when there is no legitimate basis for the tax. So far as the language of Baltic Mining Co. v. Massachusetts, 231 U. S. 68, 87, tends to support.a different view it conflicts with conclusions reached in later opinions and is now definitely disapproved."
Baltic Mining Co. v. Massachusetts had sometimes been regarded as lending support to the theory that a tax which really burdens interstate commerce and reaches property beyond the State may be sustained if relatively small. This view did not harmonize with the principles approved by Looney v. Crane Co., and was expressly disapproved by Alpha Portland Cement Co. v. Mass.
It follows that the decree of the court below is erroneous and must be reversed.
Whether, because reckoned upon authorized and not upon actual capital stock, the challenged legislation fails to require like fees for equal privileges within the doctrine of Air-Way Electric Appliance Corp. v. Day, 266 U. S. 71, we need not now consider.
Reversed.
Section 3836. Every corporation incorporated under the laws of this state, or of any state or territory of the United States or of any foreign state or country, required by law to file articles of incorporation in the office of the secretary of state, shall pay to the secretary of state a filing fee in proportion to its authorized capital stock as follows: '
Capital not exceeding $50,000, fee $25;
Capital of more than $50,000, and less than $100,000, fee $40;
Capital of $100,000, or more, and less than $150,000, fee $75;
Capital of $150,000, or more, and less than $200,000, fee $100;
Capital of $200,000, or more, and less than $300,000, fee $150;
Capital of $300,000, or more, and less than $400,000, fee $200;
Capital of $400,000, or more, and less than $500,000, fee $250;
Capital of $500,000, or more, and less than $1,000,000, fee $500;
Capital of $1,000,000, or more, and less than $2,000,000, fee $750;- and $10 additional for each $1,000,000, or major fraction thereof, of capital stock in excess of $2,000,000; Provided, however, That the total filing fee for filing such articles of incorporation shall in no case exceed the sum of $3,000.
Section 3837. Every corporation, foreign or domestic, desiring to file in the office of the secretary of state articles amendatory or supplemental articles increasing its capital stock, or certificates of increase of capital stock, shall pay to the secretary of state the.fees prescribed in the preceding section for the total amount to which the capital stock of the corporation is so increased,' less the amount already paid for filing the original articles of incorporation, .or original articles and amendatory or supplemental- articles, or- cer-' tificates of increase, and every such corporation desiring to file amendatory or supplemental articles decreasing, or' certificates of decrease of capital stock, shall pay to the secretary of state a filing fee of $25. For filing of other amendatory or supplemental 'articles, it shall pay a fee of $10; Provided, however, That the total amount paid by any corporation for filing its original articles of. incorporation and all of its articles amendatory or supplemental articles increasing its capital stock or certificates of increase of capital' stock, shall in the aggregate in ,no case exceed the sum of $3,000, plus $10 for each separate instrument .filed in addition to its original articles of incorporation.'-
Section 3841. Every corporation incorporated under the laws of this state, and every foreign corporation, having its articles of incorporation on file in the office of the secretary of state, shall, on- or before the first' day of July of each and every year, pay to the secre tary of state, for the use of the state, the following license fees in proportion to its authorized capital stock, as follows:
Capital of $50,000, or less, fee $15;
Capital in excess of $50,000, and up to and including $100,000, fee $25;
Capital in excess of $100,000, and up to and including $500,000, 'fee $50;
Capital in excess of $500,000, and up to and including $1,000,000, fee $100; -
Capital in excess of $1,000,000, and up to and including $2,000,000, fee $150; and $10 for each $1,000,000, or fraction thereof of capital in excess, of $2,000,000: Provided, however, That the total amount of such annual license fee shall in no case exceed $3,000. -Every'corporation failing to pay the said annual license fee, on or before the first day of July of any year, and desiring to pay the same thereafter, and before the first day of January next following; shall pay to the secretary of-state, for the use of the state, in addition'to the said license fee the following further fee, as a penalty for such failure, the sum of two dollars and'fifty cents: Provided, however, That building and loan and savings and loan associations paying special fees provided for in the act under which same are incorporated shall not be required to pay the regular fee provided herein: Provided, further, That the annual fee required to be paid to the Department of Public Works by any public service company shall lie deducted from the annual fee provided herein, and the excess only shall be collectéd under this act.