The plaintiff brought this action in the district court of Salt Lake county pursuant to the provisions of the Uniform Declaratory Judgments Act passed by the Legislature of Utah 1925. Laws Utah 1925, c. 24, p. 40. The defendant filed a general demurrer to the complaint. The demurrer was overruled. Upon the defendant refusing to answer or further plead judgment was rendered declaring that section
1271, Laws of Utah 1925, c. 112, is violative of and contrary to the provisions of section 6, art. 12, of the Constitution of Utah, and therefore void as applied to domestic corporations. The defendant appeals.
The sole question presented for determination on this appeal is whether or not section 1271, Comp. Laws Utah 1917, as amended by Laws of Utah 1919, c. 17, as amended by Laws of Utah 1923, c. 66, as amended by Laws of Utah 1925, c. 112, is constitutional as applied to domestic corporations. The act in question as amended in 1925 provides:
"All domestic corporations and all foreign corporations (except insurance companies) hereafter engaging in any business in this State, before engaging in, or continuing to transact business after the 15th day of November, 1915, shall procure a certificate from the secretary of state of this state, authorizing such corporation to engage in, or to continue to transact its corporate business within this state, and each of the corporations aforesaid, not coming within the exceptions hereinbefore stated, shall pay to the secretary of state a corporation license tax as follows: All corporations with an authorized capital stock of $10,000 or less $5.00."
Then follows an enumeration of the tax that shall be paid by corporations with various amounts of authorized capital stock. The amount of tax required to be paid is increased as the amount of authorized capital stock is increased. A corporation with an authorized capital stock of $4,000,000 or more is required to pay $750. The act then provides:
"That the provisions of this section shall not apply to insurance companies, to religious, charitable, benevolent and educational organizations, or to corporations not organized for pecuniary profit, or to water, canal or irrigation companies furnishing water for culinary and domestic purposes, exclusively by members thereof, or to water users associations organized to comply with the rules of the United States reclamation service, or to any corporations operated by federal control during the continuance of such control, or to building and loan associations, except to the extent of the liabilities on all outstanding capital stock of building and loan associations when a sworn statement of the amount of such liabilities on said outstanding capital stock is filed with the secretary of state on or before the 15th day of November, of each year."
It is also provided in the corporation license tax law that the tax is due and payable to the secretary of state on the 15th day of November of each year. When the tax is paid, the secretary of state is directed to issue to the corporation paying the tax a certificate authorizing it to transact business within the state. A failure to pay the tax works a forfeiture of the right of the corporation to do business within the state. Comp. Laws Utah 1917, §§ 1272, 1273. It will be noted that the annual license tax is not based upon either the amount of property owned, capital employed, or business done within the state, but is determined solely from the amount of the authorized stock of the corporation. It will also be observed that the annual license tax required to be paid is the same for both foreign and domestic corporations so long as the amount of authorized capital stock is the same.
The validity of our corporation license tax law has heretofore been assailed in two proceedings before this court. Badger v.Crockett et al., 259 P. 921; Minneapolis Steel MachineryCompany v. H.E. Crockett et al., 263 P. 926. In both those cases this court held the law requiring the payment of a corporation license tax invalid, because it places an unwarranted burden on interstate commerce and in effect places a tax on property outside of the state. In this case it is not claimed that the plaintiff is engaged in interstate commerce, or that it owns any property outside of the state. On the contrary, the plaintiff, according to the allegations of its complaint, is a domestic corporation with an authorized capital stock of $2,500,000. It owns 20 patented mining claims situated in the North Tintic mining district, Utah county, Utah. The claims are undeveloped, and the company is not and has not been engaged in the development of its claims. So far as appears from the complaint, plaintiff is not engaged in any other business. The amount of annual tax which the plaintiff is required to pay under the provisios of the corporation license tax act is $400.
It is plaintiff's contention that, if the secretary of state
may not lawfully exact from a foreign corporation a corporation license tax, then likewise he may not lawfully exact such tax from a domestic corporation; that to do so offends against the provisions of section 6, art. 12, of the Constitution of Utah, which reads as follows:
"No corporations organized outside of this state, shall be allowed to transact business within the state on conditions more favorable than those prescribed by law to similar corporations organized under the laws of this state."
Neither in the case of Badger v. Crockett et al., supra, nor in the case of Minneapolis Steel Machinery Company v.Crockett et al., supra, were the corporations relieved from the payment of the corporation license tax because they were foreign corporations. The results reached in those 1, 2 two cases were in no sense controlled by the fact that the corporations assailing the validity of the tax were foreign corporations. Had they been corporations organized under the laws of this state, the other facts remaining the same, the results could not well have been different. The law which prohibits a state from imposing a tax upon interstate commerce and upon property without the state applies equally to domestic and to foreign corporations. Neither in the case of Badger v.Crockett et al., supra, nor in the case of Minneapolis Steel Machinery Company v. Crockett et al., supra, was any rule announced to the contrary. The law under review in the Badger and Minneapolis Steel Machinery Company Cases made no distinction between foreign and domestic corporations. The law here involved makes no distinction. The corporation license tax as originally passed, as well as the various amendments thereto, fixes the amount of the tax upon the basis of the amount of authorized capital stock without regard to whether it is a foreign or a domestic corporation. It cannot be said that Laws of Utah 1925, c. 112, § 1271, is violative of or contrary to the provisions of section 6, art. 12, of the Constitution of Utah.
There is, however, an insuperable difficulty which prevents our holding that the act here involved is constitutional as applied to the plaintiff. In the case of United States v.Reese et al., 92 U.S. 214, 23 L.E. 563
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The plaintiff brought this action in the district court of Salt Lake county pursuant to the provisions of the Uniform Declaratory Judgments Act passed by the Legislature of Utah 1925. Laws Utah 1925, c. 24, p. 40. The defendant filed a general demurrer to the complaint. The demurrer was overruled. Upon the defendant refusing to answer or further plead judgment was rendered declaring that section
1271, Laws of Utah 1925, c. 112, is violative of and contrary to the provisions of section 6, art. 12, of the Constitution of Utah, and therefore void as applied to domestic corporations. The defendant appeals.
The sole question presented for determination on this appeal is whether or not section 1271, Comp. Laws Utah 1917, as amended by Laws of Utah 1919, c. 17, as amended by Laws of Utah 1923, c. 66, as amended by Laws of Utah 1925, c. 112, is constitutional as applied to domestic corporations. The act in question as amended in 1925 provides:
"All domestic corporations and all foreign corporations (except insurance companies) hereafter engaging in any business in this State, before engaging in, or continuing to transact business after the 15th day of November, 1915, shall procure a certificate from the secretary of state of this state, authorizing such corporation to engage in, or to continue to transact its corporate business within this state, and each of the corporations aforesaid, not coming within the exceptions hereinbefore stated, shall pay to the secretary of state a corporation license tax as follows: All corporations with an authorized capital stock of $10,000 or less $5.00."
Then follows an enumeration of the tax that shall be paid by corporations with various amounts of authorized capital stock. The amount of tax required to be paid is increased as the amount of authorized capital stock is increased. A corporation with an authorized capital stock of $4,000,000 or more is required to pay $750. The act then provides:
"That the provisions of this section shall not apply to insurance companies, to religious, charitable, benevolent and educational organizations, or to corporations not organized for pecuniary profit, or to water, canal or irrigation companies furnishing water for culinary and domestic purposes, exclusively by members thereof, or to water users associations organized to comply with the rules of the United States reclamation service, or to any corporations operated by federal control during the continuance of such control, or to building and loan associations, except to the extent of the liabilities on all outstanding capital stock of building and loan associations when a sworn statement of the amount of such liabilities on said outstanding capital stock is filed with the secretary of state on or before the 15th day of November, of each year."
It is also provided in the corporation license tax law that the tax is due and payable to the secretary of state on the 15th day of November of each year. When the tax is paid, the secretary of state is directed to issue to the corporation paying the tax a certificate authorizing it to transact business within the state. A failure to pay the tax works a forfeiture of the right of the corporation to do business within the state. Comp. Laws Utah 1917, §§ 1272, 1273. It will be noted that the annual license tax is not based upon either the amount of property owned, capital employed, or business done within the state, but is determined solely from the amount of the authorized stock of the corporation. It will also be observed that the annual license tax required to be paid is the same for both foreign and domestic corporations so long as the amount of authorized capital stock is the same.
The validity of our corporation license tax law has heretofore been assailed in two proceedings before this court. Badger v.Crockett et al., 259 P. 921; Minneapolis Steel MachineryCompany v. H.E. Crockett et al., 263 P. 926. In both those cases this court held the law requiring the payment of a corporation license tax invalid, because it places an unwarranted burden on interstate commerce and in effect places a tax on property outside of the state. In this case it is not claimed that the plaintiff is engaged in interstate commerce, or that it owns any property outside of the state. On the contrary, the plaintiff, according to the allegations of its complaint, is a domestic corporation with an authorized capital stock of $2,500,000. It owns 20 patented mining claims situated in the North Tintic mining district, Utah county, Utah. The claims are undeveloped, and the company is not and has not been engaged in the development of its claims. So far as appears from the complaint, plaintiff is not engaged in any other business. The amount of annual tax which the plaintiff is required to pay under the provisios of the corporation license tax act is $400.
It is plaintiff's contention that, if the secretary of state
may not lawfully exact from a foreign corporation a corporation license tax, then likewise he may not lawfully exact such tax from a domestic corporation; that to do so offends against the provisions of section 6, art. 12, of the Constitution of Utah, which reads as follows:
"No corporations organized outside of this state, shall be allowed to transact business within the state on conditions more favorable than those prescribed by law to similar corporations organized under the laws of this state."
Neither in the case of Badger v. Crockett et al., supra, nor in the case of Minneapolis Steel Machinery Company v.Crockett et al., supra, were the corporations relieved from the payment of the corporation license tax because they were foreign corporations. The results reached in those 1, 2 two cases were in no sense controlled by the fact that the corporations assailing the validity of the tax were foreign corporations. Had they been corporations organized under the laws of this state, the other facts remaining the same, the results could not well have been different. The law which prohibits a state from imposing a tax upon interstate commerce and upon property without the state applies equally to domestic and to foreign corporations. Neither in the case of Badger v.Crockett et al., supra, nor in the case of Minneapolis Steel Machinery Company v. Crockett et al., supra, was any rule announced to the contrary. The law under review in the Badger and Minneapolis Steel Machinery Company Cases made no distinction between foreign and domestic corporations. The law here involved makes no distinction. The corporation license tax as originally passed, as well as the various amendments thereto, fixes the amount of the tax upon the basis of the amount of authorized capital stock without regard to whether it is a foreign or a domestic corporation. It cannot be said that Laws of Utah 1925, c. 112, § 1271, is violative of or contrary to the provisions of section 6, art. 12, of the Constitution of Utah.
There is, however, an insuperable difficulty which prevents our holding that the act here involved is constitutional as applied to the plaintiff. In the case of United States v.Reese et al., 92 U.S. 214, 23 L.E. 563, the Supreme Court of the United States laid down the rule that, when language is used in a penal statute enacted by Congress broad enough to cover wrongful acts without as well as wrongful acts within the constitutional power of Congress, the courts may not introduce words of limitation so as to make it specific, when, as expressed, it is general only. In the course of the opinion the court said:
"It would certainly be dangerous if the legislature could set a net large enough to catch all possible offenders, and leave it to the courts to step inside and say who could be rightfully detained, and who should be set at large. This would, to some extent, substitute the judicial for the legislative department of the government."
For more cogent reasons it would be dangerous if the Legislature could set a net large enough to catch all possible property represented by the authorized capital stock of a corporation and leave it to the courts to step inside and say what part of the authorized capital stock of a corporation could rightfully be taxed and what part should be exempt from the tax. A rule of similar import is thus stated in 6 R.C.L. § 122, p. 123:
"If * * * the constitutional and the unconstitutional portions are so dependent on each other as to warrant the belief that the legislature intended them to take effect in their entirety, it follows that if the whole cannot be carried into effect, it will be presumed that the legislature would not have passed the residue independently, and accordingly the entire statute is invalid. This is simply another way of stating the familiar rule that if the parts of a law are divisible, and some of them are constitutional and others not, the constitutional provisions cannot be held valid if it appears that they would not have been adopted without the other parts."
A long list of cases supporting the text is collected in footnotes. See, also, Cella Commission Company v. Bohlinger
(C.C.A.) 147 F. 419, 8 L.R.A. (N.S.) 537, and the cases
there collected. The rule, however, does not apply where the constitutional and unconstitutional parts are 3, 4 capable of being separated so that each may be read and made to stand by itself. The provisions of the act under review does not admit of separation. The language of section 1271 is plain and unambiguous. It requires the the payment of a specific license tax by both foreign and domestic corporations as a condition to the right of the corporation to transact business in this state. The amount of the license tax is based solely upon the authorized capital stock of the corporation without regard to the amount or location of its property and without regard to the extent of its business or whether such business is intrastate or interstate. When the unconstitutional part of the act is taken out of the act, there is nothing left. It cannot be said that the Legislature intended that the amount of the tax required to be paid should depend upon the location of the corporate property or whether the corporation was or was not engaged in interstate commerce. The language of the act is not susceptible of any such construction. In the Badger and Minneapolis Steel Machinery Company Cases this court held that the language used in the corporation license tax act was so broad that it, in effect, placed a tax upon property without the power of the Legislature to tax. We may not restrict the plain meaning of the language of the act so that it will include within its terms only such a corporation license tax as the Legislature is empowered to enact. To do so would require this court to make a new statute. Such power is with the Legislature and not with the courts.
THE JUDGMENT IS AFFIRMED.
STRAUP and EPHRAIM HANSON, JJ., concur.