420 ARK. & MEMPHIS By . .BRIDGE & TERMINAL [174 CO. V. STATE EX REL ATTY. GEN. Again it has been . held by this court : "Mere inadequacy of price is not ground for setting aside a judicial sale, unless it is so gross as to raise a presumption . of fraud • Or unfairness." Gleason v. Boone, 123 Ark. 523, 185 S. W. 1093. The attorney for the plaintiff very probably intended to communicate with either the chancellor er .the .clerk, and either request that a bid be put in for his client or that the sale be postponed, but . .he..neglected• to do this. He says it was his usual practice; but does not give any reason why he failed to let the chancellor or clerk know what his wishes were in this case. He says that he thought the sale would not be made until he returned, and, although he did not say so, he probably overlooked the fact that he himself had provided in the decree he prepared for a sale within ten days from the date of the decree. If there had been any fraud or any unfairness proved it would have justified a refusal on the part of the court to confirm the . sale. But, as there was none, the chancery court was correct in refusing to set aside the sale, and the decree is therefere affirmed. ARKANSAS & MEMPHIS RAILWAY BRIDGE & TERMINAL COM-.
PANY V. STATE EX REL. ATTORNEY GENERAL. Opinien delivered June 13, 1927. TAXATION-BRIDGE COMPANY DOING BUSINESS IN STATE.-A bridge company incorporated in Tennessee, constructing a bridge across the Mississippi River under authority of the act of Congress 'of July 20, 1912 (37 Stat. 195), held to be doing business within the State, so as to be subject to the franchise tax imposed upon corporations doing .business within the State. 2. CORPORATIONS—BASIS OF FRANCHISE rAx.—The franchise tax on foreign corporations is not based on doing business in the State, but on the right or privilege of doing business in the State. 8. COMMERCE—LIABILITY OF BRIDGE COMPANY TO FRANCHISE TAX.—A bridge ciimpany which constructed a bridge across the Mississippi River, and leased it to interstate commerce carriers, held fait engaged solely in interstate commerce, or solely in the main-
ARK.] ARK. & MEMPHIS RY. BRIDGE & TERMINAL 421
-Co. V. STATE EX REL. ATTY.. GEN. tenance, ownership, and operation of an instrumentality of such commerce, in a suit by the State . to collect the franchise tax. 4. TAXATION-TAX ON FEDERAL FRANCHISE.-A franchise tax upon a company building a bridge across the Mississippi River under authority of the act of Cong. July 20, 1912 (37 Stat. 195), held not a tax on a Federal franchise, where the company received its corporate franchise from the State of Tennessee and the Federal authority was secondary and permissive, being granted merely because the stream is navigable. Appeal from Pulaski Chancery Court; :Frank H. Dodge, Chancellor ; affirmed. J. W. Ccurtada, for appellant. E. B. Dillon, H. W. Applegate, Attorney General, and Robinson, House. & Moses, for appellee. MEHAFFY, J. This is a suit by the State of•Arkansas against the bridge company to collect a franchise tax from the bridge company. The bridge company, a corporation organized under the laws of the State of Ten-nessee, was authorized by act of Congress, approved JulY 20, 1912, to construct, maintain and operate a bridge and all approaches thereto across the Mississippi River at Memphis, Tennessee, in accordance with the provision of the act entitled "An act to regulate the construction of bridges over, navigable waters," apProved _March 23, 1906. The act of July 20 was amended by act of Congress of August 23, 1912, but the amendment to the -act is not important, we think, in determining whether or not tbe bridge company is liable for the franchise tax sued , for herein. The complaint alleged that the bridge company, though a foreign corporation, organized under the laws of Tennessee, was doing business-for profit in the State of Arkansas, and has a capital stock of $1,260,000 actually engaged in business in Arkansas,.and it is also alleged in the complaint that the Arkansas Tax Commission had assessed the defendant with a one-tenth of 1 per cent. tax on that amount of its capital stock operating and doing business in Arkansas, for the privilege of exercising its franchise in the State of Arkansas. ,
422 ARK. & MEMPHIS Ry. BRIDGE 86 TERMINAL [174
Co..v. STATE EX REL. ATTY.. G.FEN. The defendant alleged that it received its franchise from. Tennessee and not from Arkansas, and that therefore the State of Arkansas had no right to impOse a franchise -fa* unless it was doing business within the State of Arkansas of such a character that the State could impose and collect a tax for that privilege. It alleged that the sole business in which it was engaged was the maintenance, ownership and operation of an interstate bridge across the Mississippi River, one end and the aPproaches thereof being located on the Tennessee shore and the other end and the approaches thereto being located on the Arkansas shore, and that said bridge was leased to three interstate carriers, which three owned the, entire capital stock of the bridge company and paid, as a rental for the use ot the bridge, only such sum as was necessary to take ° care Of maintenance, taxes and other fixed charges, and that, therefore the defendant was not engaged in any sdrt of business in the State of Arkansas. _That,' if 'engaged in business, if was engaged 'exclusively in interstate comnaerce, or in maintaining , an . instrumentality 'of such comnierce. That it did not engage in any Sort *Of' intrastate commerce in 'Arkansas. ,That it con-.structed the bridge under special license and -franchise Of fhe CongreSs of the tnited States, and that for Arkan-'Sas to impose a franchise tax was a tax upon thiS Federal franchise, 'as it had no franchise from the State of Arkan-sas, and needed none. That the franchise tax impbsed bY the State of Arkansas was necessarily a' tax upon interstate cemmerce, as the defendant was not in any manner, shape or form engaged in intrastate commerce Within the State of Arkansas.. There was no proof taken, but the parties entered into a 'stipulation which provided, among •ther things, that, 'if the bridge company should be-held liable for the 1918 tax, the taxes for • subsequent years would be 'controlled by the decree of The court, and therefore, upon an adverse decree being entered against the bridge'company, it . inclnded taxes for . the year 1918 and the taxes for all snbsequent years down to the date of the decree, making a total of $17,408.49.
ARK.] ARK. & MEMPHIS R. BRIDGE .& TERMINAL 423
Co.- v. STATE EX REL. ATTY. GEN/. The Pulaski Chancery. Court entered a :decree on January. 21, 1927, holding the bridge . company -liable for the -franchise tax, and : gave jUdgMent- for. the above amount. From this decree the bridge . company prayed an appeal, which was granted.' - ‘ . . : : -- Appellant's first contentio'r is that ; it . is engaged in no sort of business in the State of-Arkan§as. The stipu, lation, ho-Wever, entered into betWeen the parties pro-vides-that the bridge company is a corporation chartered, organized and existing under the laws. of the .State..of Tennessee, authorized to do business in the State of Ark-ansas fOr the purpose of constructing, owning, controlling and maintaining a railway bridge, approaches and terminals over and across the Mississippi River. The stipulation further provides that, after filing the proper papers and making , the proper. showing pursuant to the statutes of the State of Arkansas, it was admitted ,into the State of Arkansas on May 27, 1927, and since that time has been authorized to do business in the . State of Arkansas.. On •hat - date Thonias S., Buzbee•was appointed as agent -for service, purstant to the statutes of Arkataas, and said appointment has not been canceled, 1 and said bridge company:paid its franchise tax for the , year 1917: - It is also f stipulated that :66 per cent. of the entire -structure is . in Arkansas and the track And tt aPprbaches of the said bridge in-Arkansas ar6 4.39 miles, It still has authority tO do business in *the. State of . Arkansas. _While the bridge company - does no.t use,-the bridge itself, but leases it to others; it iA leasing,it, main, taining it, keeping: it ' and tits approaches .repaired,- and constantly emPloying labor -and capital in the State-of Arkansas; and in this way is doing.business in Arkansas. This court has rePeatedly held . that,in • ca§e of a foreign corpbration; the tax or license-is paid :for exercising i6 dorriokate powert within the State: : The bridge corapany in thi. case has -the privilege i of eiercising its corporate powers in this Stath, arid;is daily engaged in business in- repairing and maintaining the bridge:'mid hmiroaehés. - ,Ii-J
424 ARK. & MEMPHIS RIC. BRIDGE & TERMINAL [174 Co. V. STATE EX REL. ATTY. GEN. But this court has recently held that the tax is not based upon the doing of business in tbe State, but the right or privilege of doing business in the State. State ex rel. Attorney General v. Chicago Land & Timber Co., 173 A.rk. 234, 292 . S. W. 98. The above case, discusses the constitutional questions and the statutes, and collects many of the authorities which are applicable in this case. It was also stated in the case last referred to: "It will thus be seen that a foreign corporation is required, 'for the privilege of exercising its franchise in this State,' to pay a franchise tax of one-tenth of 1 per cent, each year upon the proportion of the subscribed, issued and outstanding capital stock of the corporation represented by property owned and used in business transacted in this State. "It is stated generally that, to render a foreign corporation subject to the jurisdiction of a State, the business done by the company in the State must be of such a character and extent as to warrant the inference that the company has subjected itself to the jurisdiction and laws of the State. There is no precise test of the nature or extent of the business that must be done. All that is • requisite is that enough be done to enable the Court to say that the corporation is present in the State. The business which a foreign corporation is conducting in the State, in order to give the courts of the State jurisdiction over it by proper service of process, must . be a part of the business for which it was organized. Some courts take the view that it is essential that the foreign corporation transact a substantial part of its ordinary business in the State. Other courts, while recognizing that the transaction of an ordinary portion of the business of tbe corporation by authorized agents in the gtate is sufficient to render the corporation subject to the jurisdiction .of the courts of the State, hold that it is not necessary that the transactions in the State of the foreign corporation shall be the performance of those particular acts which constitute the characteristic feature of the business for which it was organized, or that the chief
ARK.] ARK. & MEMPHIS RY. BRIDGE & TERMINAL 425
Co. V. STATE EX REL. ATTY.. GEN. or principal part of the business of the corporation shall be transacted in the State. A continuous course of business, as distinguished from a single transaction, conducted by authorized agents within the State, constitutes a doing of business so that the corporation may be fairly said to be present in the State- and amenable to the process of the courts." . 14A C. J. 1372 et seq. The seCtion of the law above quoted is sustained by authorities, many of Which are cited . under the section. We think there is• no question but what the bridge company is doing business in the State of Arkansas, and not only that, but the bridge company itself recognized the fact that it must do business in Arkansas and; for that reason, complied with the laws of the . State of Arkansas entitling it to do business in . this State. Appellant's next contention is that, if engaged in business in Arkansas, it is engaged solely in interstate commerce or solely in the maintenance, ownership and operation of an instrumentality of such commerce. According to the stipulation and agreements in this case, the bridge company is not only not engaged in interstate commerce, but it is not engaged in any kind of commerce. It does not operate the bridge and does not carry either passengers or goods. In fact, it does nothing in the way of commerce, either intrastate or interstate. It owns, leases, repairs and maintains the bridge across the Mississippi River, and, while . the bridge may be an' instrumentality of interstate commerce so far as the carriers are concerned, the bridge company has nothing whatever to do with carrying either freight or passengers, and therefore does not use the bridge as an instrumentality for interstate . commerce or any other kind of commerce.. Appellant calls attention to the case of Norfolk •ce Western Ry. Co. V. Penn., 136 U. S. 115, 10 S. Ct. 958, 34 L. ed. 394, and states that this is a conclusive Case. The difference between that case and this is that the Nor-folk & Western Railway Company was actually engaged in interstate commerce itself; and, for that reason, the
426 ARK. & MEMPHIS Ea r . BRIDGE & TERMINAL [174
Co.,v. STATE EX REL. -ATTY. GEN. court held that the tax on keeping an office in Philadelphia was a tax on . interstate commerce. The railway company in-that case was engaged in commerce exclusively, was a comnion carrier,and engaged-in interstate commerce, and we think that the case has no application here at all, and the same'may be said of other cases cited with reference to interstate commerce., As we have said, the bridge company merely owns the bridge, leases it and maintains it. If a company owned a boat or a number of boats; and leased them to a carrier or to any person or corporation who used the boat in • carrying persons or freight in interstate commerce, the boat would be used in interstate commerce, the carrier would - be engaged in interstate -commerce, but the owner of the .boat would lave no connection whatever witkinterstate commerce. And we therefore think that the bridge company in this case is not engaged in interstate commerce, and it is not engaged in the operation of an instrumentality used in interstate commerce. Appellant's next contention is that, if the maintenance of a bridge in Arkansas is carrying on business, it is interstate commerce. We think that what we have already said answers this contention and that the authorities cited by appellant in support of this contention have no application. Of course r , if the bridge company was a carrier, then whatever was done by the carrier with reference tO -the bridge, in relation to its busineSs as, carrier, would be in interstate commerce, but we have no. such case here. , The appellant next contends that the tax is a tax on a- Federal franchise. • The - bridge company . received its 'franchise .fr • om the State of Tennessee and not from the Federal Congress, or, if the authority to build the bridge granted by -Congress can be called a franchise at "all, it not a primary franchise; but a secondary: The act granting authority. 'to build the bridge expressly states that the bridge company is a Tennessee corporation, • and. grants the authority to build the 'bridge to a corporation already creatqd under the laws of the State of
ARK. ARK: & MEM ring ' R. 1371IDGE & TERthNAL 427
Co. v. STATE EX REL. ATTY. GEN. Tennessee. ' The 'sable reqiiiremea .. i;votid haVe been necessary fOf any person whd 'de'sifed tO'bnild 'a bridge across a haVigable . 'strewn,' whether' 'the streaM `Was between tWO' states' o'r"whollY Within one State. !The grant of authority is necessary in all cases where a,bridke is built aeroSS'arnavigable strewn,' and it is itia aS necessary where there is no interstate commerce' pasSing ov'er the bridge as where it is between two states and all the commerce going over it is interstate. It is merely permission, and anthority, necessary to be granted ,because the stream is . navigable,, and the tax here is not in any sense a tax on' a Federal' franchiSe 'and is' not a burden on interstate commerce -The , bridge company ist not engaged in commerce . .1 .,` -' The act granting authority 'Provides 'as 'follows "Be it enacted 'by the Senate 'and House Of Representatives of the United States of America in Congress asseinbled, , that . , the Arkansas .& Memphis Railway Bridge & Terminal Company, a ‘ corporation organized under the laws of the State of Tennessee, its successors and assigns, be and are hereby authorized tO' cells-Cruet, maintain and' operate a bridge and all aPProaches thereto, across the Mississippi Rier at, , MemphiS,, Ten-nesiee," etc. The word "authorized" used , in the act . evidently means clothed with authority, warrant or legal:power. .It gives a right to , the bridge company to act, empowers it to build the bridge, and ' does not mean that it is required to build 'itHit'is We take it that no one would contend that,. even after the act was passed and the authoritY granted, there was any obligation on the bridge coniPanY to bnild the bridge. It could build it 'or not; as it -Wished, but, if it desired to build a bridge, it would have the authority to , do so. , , The appellant has not only complied with the laws of Arkansas anthbriing,it to' do bu i sin*eSs in this`State, 'but it has neVer withdraWn . froM.the ' S fate in 'the mariner .provided by la*. Whether itS failure to do , s'olk beeanse it wOuld thereby' 'Snbjec't itself to the `penaltieS f
business in the State without complying with the law, or for any other reason, is immaterial. The fact is it that is authorized upon its own application to do business in Arkansas and is continuing to do business under that authority. The decree of the chancery court is correct, and is therefore affirmed.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.