Messrs. R. R. Vermilion and W. F. Evans for plaintiffs in error.
Messrs. James P. Coleman, W. P. Montgomery, John L. Hunt, and Mr. S. M. Brewster, Attorney General of Kansas, for defendant in error.
Mr. Paul E. Walker, as amicus curiae, on behalf of the Chicago, Rock Island, & Pacific Railway Company. [240 U.S. 236, 237]
Mr. Justice Hughes delivered the opinion of the court:
The plaintiffs in error, the receivers of a railroad corporation organized under the laws of the state of Missouri, brought this action to recover the sum of $2,500, alleged to have been paid under protest to the secretary of state of the state of Kansas as a tax upon foreign corporations imposed by chapter 135 of the Laws of 1913. A general demurrer to the petition was sustained, and, as the plaintiff declined to plead further, judgment was rendered in favor of the defendant. This judgment was affirmed by the supreme court of the state. 95 Kan. 271, 147 Pac. 794.
The act above mentioned ( 2) requires 'every foreign corporation, for profit, now or hereafter doing business in this state, and owning or using a part or all of its capital in this state, and subject to compliance with the laws relating to the admission of foreign corporations to do business in Kansas' to make annual report, setting forth certain facts, to the secretary of state. It is further provided that 'upon the filing of such report the secretary of state, from the facts thus reported and any other facts coming to his knowledge bearing upon the question, shall determine the proportion of the issued capital stock of the company represented by its property and business in Kansas, and shall charge and collect from such company, in addition to the initial fees, for the priviledge of exercising its franchise in Kansas, an annual fee upon that proportion of such foreign corporation's issued capital stock as is devoted to its Kansas business.' The amount of the fee is graduated according to the amount of the issued capital stock 'used in Kansas.' The minimum annual fee is $10, when the issued capital stock so used does not exceed $10,000; and the maximum annual fee is $2,500, when the issued capital stock so used exceeds $5,000,000. [240 U.S. 236, 238] Construing these provisions of the act, and answering the objection that, as to a railroad company, and other foreign corporations, doing both a local and interstate business, the act was invalid because it undertook to regulate interstate commerce, the supreme court of Kansas said in State ex rel. Dawson v. Sessions, 95 Kan. 272, 275, 147 Pac. 789:
In the instant case, the objections to the tax upon the foreign corporation rest entirely upon the asserted invalidity of the tax imposed by the same statute upon domestic corporations; it is insisted that the foreign corporation had complied with statutory conditions entitling it to be treated not less favorably, and that, if the tax laid by the statute upon domestic corporations is invalid, the tax laid upon the foreign corporation cannot be sustained. Apparently, no other contention was presented to the supreme court of the state (95 Kan. 271). And, accordingly, in the brief of the plaintiffs in error in this court, the questions involved are stated to be: (a) that the act under which the tax was demanded is unconstitutional because 'when applied to railroad [240 U.S. 236, 239] companies organized under the laws of the state of Kansas,' owning lines extending into other states, the act places a burden upon interstate commerce and undertakes to tax property outside the state; (b) that the act seeks 'to place a tax upon the entire capital stock of domestic corporations owning and operating railroads in Kansas and other states,' that it thereby attempts to tax property outside the state, in contravention of the 14th Amendment, and that it 'is therefore void as to domestic corporations;' and (c) that the compliance by the Missouri corporation (of which the plaintiffs in error are receivers) with the terms of chapter 186 of the Laws of 1887, of Kansas, 'constituted a contract between the railroad company and the state, by which the state bound itself not to subject the railroad company or the plaintiffs in error to any greater liabilities than those imposed upon railroad corporations organized under the laws of Kansas, and conferred upon such foreign corporation complying with said act 'all the rights, privileges, and franchises' of Kansas railroad corporations;' and that it follows that, if the tax act is unconstitutional as to domestic corporations, the imposition of the tax in question upon the Missouri corporation 'would violate the obligations of the contract' and would deny to it 'the equal protection of the laws.'
In the case of Kansas City, Ft. S. & M. R. Co. v. Botkin, decided this day [ 240 U.S. 227 , 60 L. ed. --, 36 Sup. Ct. Rep. 261], we have considered the arguments against the tax imposed by the statute upon domestic corporations, and we have found the objections to be untenable. Thus, the sole basis for the attack made by the plaintiffs in error upon the statute fails, and the judgment must be affirmed.