Gt. West. Sugar Co. v. Mitchell , 119 Mont. 328 ( 1946 )

The question involved is whether the fee for filing the annual report for the year 1944 should be calculated according to the schedule of fees prescribed by section 1, Chapter 37, Laws of 1915, the statute in effect at the time plaintiff qualified to do business, or according to the schedule prescribed by section 1, Chapter 169, Laws of 1931, the statute in effect at the time of filing the report. Respondent suggests the incidental question of the constitutionality of Chapter 169, Laws of 1931, should the schedule of fees therein provided control.

Section 1, Chapter 37, Laws of 1915, prescribes a graduated scale of fees to be paid by every foreign corporation upon filing its Articles in the office of the secretary of state. Section 2 of that statute provides for the filing of an annual report by such corporation, stating the proportion of its capital stock located and business transacted therein during the preceding year. Section 3 provides the method of computing the increase in the capital stock represented. Section 4 provides:

"Whenever such report shall show a greater proportion of the capital stock of such foreign corporation represented by its property and business in Montana than that upon which the fee for filing * * * was based, such foreign corporation at the time of filing such report, shall pay such additional fee as it wouldhave been required to pay for filing if such fee had beencalculated on the basis of the proportion of the capital stockrepresented by its business and property in Montana as shown bysuch report." (Emphasis mine.)

Section 1, Chapter 169, Laws of 1931, now section 145.1, Rev. Codes, provides a schedule of fees for the filing of Articles of incorporation by foreign corporations, in double the amounts prescribed by the 1915 Act, except that the minimum fee is fixed at $50 instead of $20. Section 4 of the 1931 Act is identical with section 4 of the 1915 Act, with the exception that the words "the charter or articles of incorporation" were inserted after the word "filing" first appearing in the latter Act.

Prior to the enactment of Chapter 37, Laws of 1915, the fee schedule of both domestic and foreign corporations was prescribed by section 165, Revised Codes of 1907, which was declared unconstitutional by this court in Chicago, M. St. P. P. Ry. Co. v. Swindlehurst, 47 Mont. 119, 130 P. 966. Thereafter, the Legislature enacted Chapter 37, Laws of 1915. Chapter 91, Laws of 1921, amended section 165, Revised Codes, 1907, and repealed Chapter 37, Laws of 1915. In J.I. Case Threshing Mach. Co. v. Stewart, 60 Mont. 380, 199 P. 909, this court declared Chapter 91 invalid, and consequently, Chapter 37, Laws of 1915, remained in effect. In the 1923 session the Legislature enacted Chapter 132, with provisions essentially similar to Chapter 37, Laws of 1915, with the exception of increased fees. Chapter 95, Laws of 1925, re-enacted the provisions of Chapter 132, Laws of 1923, except that it provided for calculation of fees on the "authorized capital stock" instead of on the "capital stock." The 1923 Act was declared unconstitutional by this court in Chicago M., St. P. P.R. Co. v. Harmon, 89 Mont. 1, 295 P. 762. Section 4 of this Act was identical with section 4 of the 1915 Act. In construing that section the court in that case, said: "The fees in suit were demanded pursuant to the provisions of Chapter 95, Laws of 1925, which are, in part, as follows: `* * * Section 4. Whenever such report shall show a greater proportion of the authorized capital stock * * * represented by its property and business in Montana than that upon which the fee for filing was based, such foreign corporation at the time of filing such report, shall pay such additional fee as it would have been required to pay for filing if such fee had been calculated' at the time of filing itsarticles." (Emphasis mine.)

Under this construction the additional fees are to be calculated according to the schedule in effect at the time of filing the Articles. In other words, the amount of the additional fee is the difference between what was actually paid when the Articles were filed, and the amount which would have been required at that time had the original capital stock represented been equivalent to that shown in the report in question. The schedule of fees in effect at the time the Articles were filed was, of course, that prescribed by Chapter 37, Laws of 1915. Since section 4 of the 1915 and the 1931 Acts are identical, it would seem to follow that the result would be the same no matter which of these statutes is used as the basis for calculation. It is true that this was not the precise question presented and determined in the Harmon case, and the statement quoted may be regarded as dictum. Nevertheless I think it is a correct interpretation of section 4 of both Acts, the plain wording of which requires calculation of such additional fees in accordance with the fee schedule in effect at the time of filing the Articles of incorporation or charter of the foreign corporation involved. This may be demonstrated by the addition of a few words hereinafter italicized, to clarify the obvious meaning, making section 4 read thus:

"Whenever such annual report shall show a greater proportion of the capital stock of such foreign corporation represented by its property and business in Montana than that upon which the fee for filing its articles was based, such foreign corporation, at the time of filing such annual report, shall pay such additional fee as it would have been required to pay for filingits articles if such fee for filing its articles had been calculated on the basis of the proportion of the capital stock represented by its business and property in Montana as shown by such annual report." The Articles of plaintiff corporation were filed only once, in 1916, and obviously the increase in fee collectable now is the additional amount plaintiff would have been required to pay in 1916, if the fee had been calculated in that year on the basis of the proportion of its capital stock now employed in Montana. This construction was placed on the section by the secretary of state, the defendant here, when in 1934 he calculated the additional amount due from plaintiff on the fee schedule prescribed by the 1915 Act. The wording is not ambiguous. This being so, this court has no right to guess that the Legislature intended some meaning other than it clearly expressed by its language. Neither can this court safely substitute its notion of what the law should be for what the Legislature has so plainly declared it to be.

Appellant in his brief, after reviewing the legislative and judicial history of the Act, concludes that, "It will thus be seen that the same fees required of domestic corporations on increase of capital stock, is required of foreign corporations when its annual report shows an increase of capital stock." I am unable to perceive the logic of this conclusion. While undoubtedly the Legislature had and has power to provide for the achievement of such a result, I think it has not done so. The language of section 4 is not ambiguous; consequently the intention of the legislature must be determined from the clear import of that language. It is not argued that the section is invalid as resulting in discrimination against domestic corporations, and that question is not presented. Should the situation existing require correction, proper legislative action is the remedy.

As stated, if the provisions of sections 145 and 145.4, result in discrimination against domestic corporations, that situation has no bearing in this case. It would seem that if either of those sections is invalid on the ground of discrimination it must be the former, and the question can be raised only by a party affected thereby. The logical and simple method of correcting this seeming inequity is by legislative amendment of one or the other of these sections. The achievement of the result contended for by the defendant here could be easily effected by the substitution of about one-quarter of the number of words presently used in section 145.4.

I cannot concur with the majority that the proviso found in section 4, Chapter 132, Laws of 1923 constitutes "a legislative interpretation of what the legislature meant by what precedes the proviso." As stated in the majority opinion, Chapter 132 of the Laws of 1923 was repealed and the proviso is not found in the present Act, section 145.4, Revised Codes of 1935. The legislative reason for eliminating the proviso is not apparent, and it might well be that the elimination was effected to avoid the prospect of having the law declared unconstitutional, as violative of contracts between the state and foreign corporations, pursuant to the holding of the Supreme Court in the case of American Smelting Refining Co. v. People of State of Colorado ex rel. Lindsley, 204 U.S. 103, 27 S. Ct. 198,51 L. Ed. 393, 9 Ann. Cas. 978.

I feel strongly that courts should remain alert against the infringement upon the prerogatives and functions of the legislative branch of the state government. It seems to me that the majority opinion places an interpretation on the meaning of section 145.4 clearly not intended by the legislature.