Newspaper Page Text
THE LICENSE TAX
HIS BEEN UPHELD
SUPREME COURT RENDERS IM
Petition of British-American Mort
gage Co. Claiming Exemption
Dismissed by the Court.
News and Courier.
Columbia, August 2.-The supreme
court has reversed itself in the case
of the British and American Mort
gage Company and Attorney General
Lyon has won a distinct legal victory.
The court several months ago ren
dered a decision which in effect de
clared the Franchise License Act of
1904 unconstitutional and would have
deprived the state of a large revenue
annually. Attorney General Lyon,
representing Comptroller General
Jones, filed a petition for a rehear
ing, which was granted, and upon
this hearing the court has filed a see
ond decision sustaining the position
taken by Mr. Lyon and holding the
*ct of 1904 valid. The first hearing
of the case, when the state lost its
case, was before Mr. Lyon entered
the Attorney General's 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 commis
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 discriminated between
foreign and domestic corporations,
whereas in a previous Act under which
foreign corporations were licensed
they weret 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 1903 erroneously 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 confers upon
rsuch 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 1893 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 a 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 quali
ficationis 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
The case, as stated above, was ar
gued for the state by Attorney Gener
al Lyon and his assistant, Mr. M. P.
'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 ob
tained a similar order. As a result
the state would have lost about $70,
000 revenue from the license tax.
Soon after the first.decision was rend
ered the Ware Shoals Company, a do
mestic corporation, applied for a sim
ilar order, claiming that the domestie
corporations would be otherwise dis
criminated against in favor of foreign
corporations under this interpretation
of the 2904 Act and this case is now
Attorney General Lyon was gener*
ally congratulated today on the win.
ning of this case.
Text of the Opin.ion.
The opinion of the court, which is
unanimous. is 'written by Associate
Justice Gary. who also wrote the pre.
Viouls opinion of the court in this case.
This is an application to the court,
in the exercise of its original jurisdie
tion. for an order of injunction re
strainin:r the Comptroller Genera'
Act entitled "An Act to require the
payment of annual license fees by
corporations doing business in this
state, and reports to the Comptroller
The petitioner is a foreign corpora
tion, the principal business of* which
is lending money upon mortgages of
real estate. On the 26th of Novem
ber, 1894, the petitioner filed a de
claration in the office of the secretary
of state, in pursuance of an Act de
claring the terms on which foreign
corporations may carry on business
and own property within this state,
the Act being approved December 23,
1893. The petitioner stated that it
was the owner of property in this
staite; referring to the investments
made by it upon mortgages of real
estate, and designated its place of
business in this state as the office of
its agent, Mr. E. K. Palmer, of Co
lumbia. The declaration set forth
the manner of doing business to be as
follows: A person in South Carolina
desiring to make a loan forwards his
application to the home office in New
York, and if the application is ac
cepted the notes and mortgages are
prepared in New York and sent to
this state to the applicant, who exe
cutes them in South Carolina and for
wards them to New York with draft
attached, which draft is paid in New
York. According to the terms of the
contract the debt is payable in New
York and is collected and paid in that
The first question considered by the
court was whether the facts show that
the petitioner was doing business in
this state, Justice Gary quotes Sec
tion 1787 of the Code, which provides
that it shall be a condition precedent
to the right of any foreign corpora
tion to do business in this state that
it shall be presumed as a fact and
part of any contract between such
corporation and any citizen of this
state that the taking of any fee or
payment from any citizen or corpora
tion of this state shall constitute the
doing of its corporate business in
this state, and that the place of the
making and of the performance of
such contract shall be deemed to be
within this state, and that anything
contained in the contract or the rules
of the corporation to the contrary
shall not be of force. This section
learly shows that the petitioner was
doing business in this state. Even if,
this statute had not been enacted the
exercise by the petitioner of the cor
porate functions before mentioned
would have constituted the doing of
business in this state. Chattanooga
National Bank vs Denson 198, U. S.
40S. This decision is considered at
some length in its application to the
ase under discussion.
The next question is whether the
Act of 1904 is in violation of the con
tract by which the petitioner was per
mitted to do business in this state.
When the petitioner was granted per-'
mission to carry on its business in this
state the Act of 1888 and 1892 were
of force, certain provisions of which
were incorporated in the Code of 1902
as Section 1,800, providing that for
eign corporations doing an insurance
or loan business shall pay to the comp
troller general an annual license fee
of $100 on or before the 31st day of
March. The petitioner paid the li
ense fee. When the petitioner was
granted permission to do business the
Act of 1893 was also effective, provid
ing that foreign corporations duly in
corporated under the laws of other
states or countries are permitted to
locate and carry on business in this
state in like manner "as the natural
born citizens of the states of the Unit
ed States, or of such foreign country
might do under the law existing at
the time, subject nevertheless to the
terms and conditions in this Act here
after set forth.'' This provision be
came Section 1,779 of the Code. Sec
1tion 7 of the Act of 1893 provides.
that foregin corporations doing busi
ness in this state shall be subject to
the laws of this state, but are not per
mitted to exercise any franchise or
enjoy any privilege or immunity oth
er han the right to own property
and carry on business in like manner
as individuals, natural born citizens
of such state of t.he UTnited States or
of foreign counties might do and sub
jet to the. termas and conditions of
this chapter. This is now Section 1,
790 of the Code. The Act of 1S93 was
amended in 1904 by an Act which
provides that every corporation or
zanized under the laws of this state
to do business for profit, excepting
railroad and express companies, etc.,
shall upon the filing of the report re
quired of them in Section 1 of the
same Act, pay to the State Treasurer
on or before the first day of April in
each year an annual license fee of
one-half of one mill upon each dollar
;aid into the capital stock of said
corporaion. said fee to be not less
'han $5 in any case. every foreign
aroraiondoi j usineCss inl this
state is required to pay g license fee
of 1-2 of one mill on each dollar of
*he valute 'f its prop erty in this state.
colorado ex rel. Linid.-ley. 27 Siip
Ct. Rep, 108. in whivh it was held
that the right to () business in the
state. without being subjeet to any
greater liabilities than those imposed
on domestic corporations was aequir
ed by a foreign corporation upon its
admission into the state of Colorado
under the laws then of force, which
subjected foreign corporations to the
liabilities, restrictions and duties im
posed on domestic corporations of
like character, and that such right
was impaired by an Act of that state
subsequently enacted, which required
such corporation to pay an annual li
eense fee in double the amount impos
ed on domestie corporations.
The respondents' attorneys con
tended that Section 7 of the Aet of
1893 prescribes the terms upon which
foreign corporations are permitted to
do business in this state, to wit, that
they should be subject to the laws of
this state. The opinion points out
that Sections 1 and 7 of this Act are
inconsistent, and it would be difficult
to reconcile them. It appears, says
Justice Gary, that the Legislature
did not hold the view that it had
placed foreign and domestie corpora
tions on the same footing, hence the
necessity for passing the Act of 1904.
But conceding that such was the ef
feet of Section 7, the.Act of 1904 dis
tinguishes between foreign and do
mestic corporations. Section 4 of the
Act of 1904 places a tax of one-half
of one mill upon each dollar paid in
to the capital stock of a domestic cor
poration, but in the case of a foreign
corporation this tax is placed on the
value of the property within the state
belonging to the foreign corporation.
The respondent's attorneys con
tended that the state has the right to
prescribe the conditions upon which
a foreign corporation may do bu,i
ness in this state; even when they are
more burdensome than those placed
on a domestie corporation, which the
court holds cannot be denied; also
that the license granted the petition
er in 1894 expired on the 31st of
March, 1895, and when the license
was granted in each subsequent year
it expired within twelve months; that
the granting of the license each year
was a new contract, and when the
petitioner took out a new license in
1904 it was subject to the Act of
104, which was approved on the
29th of February, 1904. ''After most
careful consideration.'' says the opin
ion, ''we have reached the conclu
sion that this objection must be suls
It is the judgment of the court,
therefore, that the petition be dis
missed. J- H
The patrons of Vaughnsville schoo]
will meet at the Vaughnsville school
house on August 10th., at 3 p. in., to
elect a teacher for the coming year.
Salary $40 per month, scho,ol to run
7 or 8 months. Those wishing to ap
ply for the 'school will please send
their applications to the undersigned
C. A. Brook'.
E. C. Saller.
The undersigned desire to seeure a
teacher for the coming year for Lcng
Lane school. -Opens October 1. Term
seven months. Salary, thirty dollars
Dr. M. A. Renwick,
C. K. Baker,
H. T. Brock,
Barbecue at Keitt's Grove.
We, the undersigned, will give a
first class barbecue in the oak grove
of T. W. Keitt, Thursday, August 8.
The guns of the county are invited
to be present, Newberry, St. Phillips,
Silver Street a- d Whitmire.
Jos. L. Keitt,
Jas. D. Nance,
C. L. Leitzsey,
Jno. A. Cromer,
S. J. D. Price.
Arrival and Departure of Trains.
Schedules of passenger trains in
and out of the Union Station, New
berry, S. C.
No. 15 for Greenville .. .. 8.56 a. m.
No. 12 for Columbia .... 10 32 a. m.
No. 18 for Columbia ... . 1.50 p. m.
No. 19 for Greenvil-le .. .. 1.35 p. m.
No. 11 for Greenville . ... 4.42 p. m.
No. 16 for Columbia .... 9.47 p. m.
C., N.'& L. Trains.
No. 85 for Laurens .... 5.19 a. m.
No. 22 for Columbia .... 8.47 a. m.
No. 52 for Greenville . .12 46 p. m.
No. 53 for Columbia .... 3.10 p. m.
No. 21 for Laurens .... 7.23 p. m.
No. 84 for Columbia .... 8.30 p. m.
The foregoing schedules are givenl
teed and are subject to change wid
July 15, 1907.
G. L Robinson,
nasty taste in mouth, sick
headache, sallow compler.
ion, the world your venmy.
Cause. Constipation, inact..
ive liver, overflow of bile
into the system.
Relief. Treatment for two
nights before retiring with
A TONIC PELLEIS
One a night, don't worry, sleep
well and Nature'll do the reat.
Entire Treatment 25 Cta.
Rates from Newberry S. C., as fol
Season Ticket $19.55. Sold daily
April 19th to November 30th.
60 Day ticket $16.30. Sold daily
April 19th to November 30th.
15 day tieket $14.30. Sold daily
April 19th to November 30th.
Coach Excursion $3.55. Sold each
Tuesday; limit 10 days. Endorsed.
"Not good in parlor or sleeping
Through -Pullma:: sieeping cars, via
Athi: tie Co;;t Line Railroad company.
Write for a Oeaitifn: illustrated
folder en:ainii ma'.'s. d escriptive
mater, li..t of Hotel, etc.
For reservations or any infoima
T. C. White,
General Passenger Agt.
W. J. Craig,
Passenger Tieffic Manager.
Wilmington, N. C.
is your best friend or your worst
enemy. Active it's your frend.
Torpid it's your enemy, and its
army is Constipation, Bdiouaw
Sick Headache, etc.
make active, strong. and healthy
livers, preventing and relieving
'Complete Treatment 25.
W. G. Mayes & Prosperity Drug Co.
Sample tube and ~okIet by mail xoc.
St. LuMo. GO.aur1liTeaa.
I S a delicious chew,
5made from the best
North Carolina leaf;
a leaf that has a spec
ial texture, a special
flavor an d w ich
makes RED EYE a
specially fine and satis
Most people prefer it
to tobacco costing one
dollar per pound.
Ask your dealer for it and
insist on him keeping it.
1Write for Special Prices.
CHARLESTON & WESTERN CAR
Schedule in effect June 9th, 1907.
Tv. Nwherryv(C N & L.) 12:46 p. m,
A r. Lauirens 1:52 p. m.
Lv. Laurens (C. & W. C.) 2:15 p. m.
Ar. Greenville 3:40 p. m.
Lv. Laurens 1:58 p. m.
Ar. Spartanburg 3:30 p. m.
Lv. Spartanburg (So. Ry.) 3:40 p. m.
Ar. Hendersonville 6:25 p. m.
Ar. Asheville 7:30 p. m.
Lv. Laurens (C. & W. C.) 2:00 p. m.
Ar. Greenwood 2:56 p. m.
Ar. McCormick 3:55 p. m.
Ar. Augusta 5:40 p. m.
Pullman Chair Cars between Au
gusta, Laurens and Ashevillp, tri
And Intermediate. Poin
Tickets to be sold for
gust 6th and limited to
on any regular train no
Opportunity to visit r1
the Atlantic coast; alsc
of the historic old city<
App'y to any agent.
Expenses very modera
surpassed. For catalo
POINTS OF EXCELLENCI
IThorough instruction. University n
library. Excellent laboratories. I
fulness. Honor system, Full lite
courses. Degrees of A. B. and B. J
Next session opens September 18th,
- LEE DAVIS L
* ry Goods, Cl
e Oxfords, Ores
+ something spe
* We ar elocated in '5
stand opposite New
,next door to Geo.
E. L BAILES
weekly. Leave Augusta Tuesdais,
Thursday and Saturdays ;leave Ashe
ville Mondays, Wednesdays and Fri-.
Note: The above arrivals and de
partures, as well as connections with
other companies, are given as infor
mation, and are not guaranteed.
Cen. Pa-s. Art.,
Geo. T. Bryan,
Greenville, S. C.
ts as far as, and includ
any regular train of Au
return from Charleston
t later than August I th,
ost delightful resort on
enjoy the attractions
R. W. H UNT,
~gt., Charleston, S. C.
itific! . .
te. Health record un
gue address the Presi
S. A. B. SCH ERER,
Newberry, S. C.
~:-Hiigh Standard. Able faculty,
ethods. Fine equipment. Splendid
eautiful site. Unsurpassed health
ary, scientific, musical and artistic
if. Winnie Davis School of Hidtory.
1907. Send for catalogue.
3DGE A. M., Ph. D. -President.
othing, Shoes, +
s- Goods, Odd *
cial every dlay. +
. T. Tarrant's old
erry Savings Bank, *
D.n Davenport's old*