ERROR TO THE SUPREME COURT OF THE STATE OF ILLINOIS.
Taft, Holmes, Van Devanter, McReynolds, Brandeis, Sutherland, Butler, Sanford, Stone
MR. JUSTICE STONE delivered the opinion of the Court.
The plaintiff in error, a corporation organized under the laws of Illinois, and doing business in that State, filed its bill in the Circuit Court of Sangamon county, Illinois, for a mandatory injunction to compel the defendant in error, as Secretary of State for Illinois, to accept the sum of $75.00 in full discharge of its liability for an annual franchise tax for the year 1923, imposed by § 105 of the Illinois Corporation Act, and to enjoin the defendant in error from collecting more than that amount.
The plaintiff corporation was originally organized with an authorized capital stock of $100,000, divided into one thousand shares of the par value of $100. In 1921, the Illinois Corporation Act was amended so as to allow corporations to issue shares of no par value. Ill. Rev. Stats., (Cahill, 1925) c. 32, § 32, as amended by Act of June 11, 1921, Laws of 1921, p. 365. Shortly after the passage
of this Act, the corporation, by amendment of its charter, converted its outstanding stock into preferred stock, and authorized and issued forthwith, 10,000 shares of common stock of no par value.
Section 105 of the Corporation Act then provided:
"Each corporation for profit . . . organized under the laws of this State or admitted to do business in this State, and required by this Act to make an annual report, shall pay an annual license fee or franchise tax to the Secretary of State of five cents on each one hundred dollars of the proportion of its capital stock, authorized by its charter in the office of the Secretary of State, represented by business transacted and property located in this State. . . ."
The Secretary of State demanded of the plaintiff corporation, under this statute, the payment of five cents on each share of no-par stock, on the assumption that for the purpose of the tax, no-par shares were to be valued at $100. The plaintiff took the position that there was no statutory authority for the assessment of the tax on that basis, and that, since its no-par value shares had been issued as "fully paid up and non-assessable upon the payment of five dollars for each share in cash or property," it was liable to a tax only on the basis of that valuation; and tendered the tax so computed to the Secretary of State. In a mandamus proceeding brought by the plaintiff corporation, the Supreme Court of Illinois upheld this contention and ordered the Secretary of State to accept the lesser sum in satisfaction of the tax. People ex rel. Roberts & Schaefer Co. v. Emmerson, 305 Ill. 348.
After this decision, the legislature of Illinois amended § 105 (Laws 1923, p. 280) by adding the sentence:
"In the event that the corporation has stock of no par value, its shares, for the purpose of fixing such fee, shall be considered to be ...