Roberts & Schaefer Co. v. Emmerson,
271 U.S. 50 (1926)

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U.S. Supreme Court

Roberts & Schaefer Co. v. Emmerson, 271 U.S. 50 (1926)

Roberts & Schaefer Company v. Emmerson

No. 210

Argued March 12, 1926

Decided April 12, 1926

271 U.S. 50


1. Quaere: whether, as between its domestic corporations, a state may not constitutionally measure their franchise taxes by the amounts of their authorized capital stock without regard to the amounts issued? Air-Way Corp. v. Day, 266 U. S. 71, distinguished. P. 271 U. S. 53.

2. A corporation is not in a position to raise this question under the equal protection clause of the Fourteenth Amendment if all of its authorized capital stock has been issued. P. 271 U. S. 54.

3. As applied to domestic corporations doing only intrastate business, a state franchise tax measured by a flat rate on authorized capital stock, adopting the par value for par-value stock and $100 per share for no-par stock, is not such a discrimination as infringes the equal protection clause of the Fourteenth Amendment, either (1) as between corporations whose authorized no-par shares may be of like number but represent very different capital values, or (2) as between corporations with par-value stock and corporations with no-par value stock. Pp. 271 U. S. 55-57.

So held where the law permitted par value shares to be issued only for money or property equivalent to the par value, but no-par value stock for money or property of any value not less than $5 nor more than $100 per share. Ills.Rev.Stats.1925, c. 32, as amended by Ls. 1921, p. 365; 1923, p. 280.

4. The fact that a corporation issued no-par stock when the law valued it at a lower figure for the purpose of measuring the corporation's

Page 271 U. S. 51

franchise tax did not give rise to a contractual obligation preventing the state from adopting a higher valuation, increasing the tax. P. 271 U. S. 58.

5. If the Illinois corporate franchise tax law may be deemed part of a corporation's charter, it may nevertheless be amended under the power reserved by § 146 of the Illinois General Corporation Act. Id.

313 Ill. 137 affirmed.

Error to a judgment of the Supreme Court of Illinois which affirmed a judgment dismissing the bill in a suit by a corporation for a mandatory injunction to compel the Illinois Secretary of State to accept a sum specified as the plaintiff's annual franchise tax.

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