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vent its going into effect. They virtually concede, however, that the Legislature might sanction a consolidation which should go into effect against their protest. Since the consolidation has gone into effect, they cannot now maintain a claim for better terms to themselves than have been voted."

There is no further discussion of the broad question involved, and, indeed, no point was raised in argument except how much the plaintiff was entitled to receive for his stock. Manifestly, the court could not make a different contract as to that from the one which the corporation, of which he was a member, had made when he conceded that the corporation had a right to make it.

I, therefore, conclude that the Legislature has no power to compel the minority in an existing co-operative bank, which is not a stock corporation, to give up their interest in it for an interest in a consolidated bank in the manner prescribed by this bill. This is not saying, however, that the bill as it stands is unconstitutional. If enacted, it certainly will govern the rights of all members of co-operative banks organized after its passage. Even as to existing banks, it authorizes their consolidation, and, if all the members assent, a consolidation under it will be binding upon all. See Nugent v. Supervisors, 19 Wall. 249; Dickinson v. Consolidated Traction Co., 114 Fed. 232, 252.

Very truly yours,

HERBERT PARKER, Attorney-General.

Taxation Foreign Express Company - Interstate Commerce. St. 1903, c. 437, § 75, imposing an excise tax upon foreign corporations admitted to transact business within this Commonwealth under the provisions of section 58 of such statute, is not applicable to an express company organized under the laws of a foreign State and receiving no goods in Massachusetts for delivery within the Commonwealth, the business transacted by such company being interstate commerce, and as such exempt under the Constitution of the United States, Article I, § 8, from State regulation and control.

APRIL 25, 1904.

Hon WILLIAM D. T. TREFRY, Commissioner of Corporations.

DEAR SIR-In your letter of February 4 you desire my opinion upon the question whether an express company organized under the laws of a foreign State and receiving no goods in Massachusetts for delivery at other points within the Commonwealth is liable to a tax under St. 1903, c. 437, § 75.

The business of such company is interstate commerce, and is exempt under the federal constitution from State regulation and control. The State may not attach conditions to the right of

transacting it beyond local regulations made in the proper exercise of the police power. It may not enjoin the corporation from the transaction of its business. See Western Union Telegraph Company v. Massachusetts, 125 U. S. 530, 554; Crutcher v. Kentucky, 141 U. S. 47; Opinion of the Attorney-General, June 5, 1903.

The corporation is liable, however, to be taxed upon all its property, both tangible and intangible, within the jurisdiction of the Commonwealth in return for the protection which its property receives under our laws. While indirectly affecting interstate commerce, taxation is not considered as a burden on its free exercise. Pittsburgh, etc., Railway Company v. Backus, 154 U. S. 421; Adams Express Company v. Ohio, 165 U. S. 194; Western Union Telegraph Company v. Texas, 105 U. S. 460.

The franchise of the corporation is property, and not being derived from the United States is subject to taxation either directly or indirectly. Atlantic & Pacific Telegraph Company v. Philadelphia, 190 U. S. 160, 163, and citations. In assessing a tax upon such corporation the State is not restricted to the property physically located within its limits, but since the value of this property is enhanced by the manner of its use in connection with the system of the company's business throughout the country, it may tax the corporation upon a proportion of its total value, including all its franchises, if such proportion is based upon the property within the State. Adams Express Company v. Ohio, 165 U. S. 194; Adams Express Company v. Ohio (on petition for rehearing), 166 U. S. 185; Adams Express Company v. Kentucky, 166 U. S. 171.

Further, the court has held that the form of the tax is not essential. It may be framed as an excise tax upon the privilege of doing business within the State, provided the exaction be not susceptible of exceeding the sum which might be levied directly on its property, and that payment be not made a condition precedent to the right to carry on the business, but that the enforcement of the tax be left to the ordinary means devised for the collection of taxes. The ascertainment of the amount, whatever the tax be called, must be made dependent in fact on the value of the corporation's property situated within the State. Postal Telegraph Cable Company v. Adams, 155 U. S. 688; Maine v. Grand Trunk Railway Company, 142 U. S. 217; New York v. Roberts, 171 U. S. 658. The tax in question is imposed in the following terms:

SECTION 75. Every foreign corporation of the classes described in section fifty-eight shall, in each year, at the time of filing its annual certificate of condition, pay to the treasurer and receiver general, for the use

of the commonwealth, an excise tax to be assessed by the tax commissioner of one hundredth of one per cent. of the par value of its authorized capital stock as stated in its annual certificate of condition; but it may deduct from such tax the amount of taxes upon property paid by it to any city or town in the commonwealth during the preceding year, and the amount of such excise tax shall not in any one year exceed the sum of two thousand dollars.

This tax is not founded in any way upon the property of the company situated in Massachusetts. It can only be regarded as an excise tax based upon the fact of doing business in the Commonwealth. Pratt v. Street Commissioners of Boston, 139 Mass. 559, 562. Like the tax held invalid in Leloup v. Mobile, 127 U. S. 640, which overruled Osborne v. Mobile, 16 Wall. 479, it affects all the property of the corporation, wherever situated. While it is far smaller in amount than a valid property tax might be, yet the mode of assessment cannot be sustained if we apply it to this corporation. The Legislature might make the tax any percentage of the capital stock it desired, and in case of ordinary foreign corporations such tax would be valid, subject only to the requirement of the Massachusetts Constitution that it be a reasonable excise. But in taxing a corporation which is engaged wholly in the business of interstate and foreign commerce, the amount of tax must be based upon the company's property subject to the jurisdiction of this Commonwealth.

I therefore advise that the tax imposed by section 75 does not apply to the company in question.

Very truly yours,

HERBERT PARKER, Attorney-General.

Corporation - Organization beyond the Limits of the Common


Persons associating together under the provisions of St. 1903, c. 437, §§ 9, 10, to form a business corporation, may not legally hold the meeting at which the organization of such corporation is to be effected beyond the jurisdiction of the Commonwealth.

APRIL 28, 1904.

Hon. WILLIAM D. T. TREFRY, Commissioner of Corporations.

DEAR SIR: In answer to your inquiry as to whether or not "the associates who form a corporation under the provisions of chapter 437 of the Acts of 1903, sections 9 and 10, may hold the meeting for organization outside the Commonwealth," I have to advise you that in my opinion such meeting may not be held beyond the limits of the Commonwealth.

The statute above referred to contains, it is true, no express

provision with regard to the place where such first meeting shall be held, but the doctrine that a corporation can have no legal existence beyond the limits of the sovereignty by which it is created is well established. See Bank of Augusta v. Earle, 13 Peters, 519. The precise issue presented by your inquiry has been passed upon in many jurisdictions, with the uniform result, that an organization effected beyond the jurisdiction of the State by virtue of whose law the incorporation is authorized has been held to be void and without effect. Miller v. Ewer, 27 Maine, 509; Smith v. Silver Valley Mining Co., 64 Maryland, 85; Camp v. Bryne, 41 Missouri, 525; and see 1 Op. Atty-Gen., 185.

This conclusion is strengthened by the provisions of St. 1903, c. 437, § 18, that the clerk of a corporation organized thereunder shall be a resident of the Commonwealth; and in section 20, that all meetings of the stockholders shall be held within its limits.

These provisions, although not in themselves decisive of the question submitted, in my judgment tend to show that the Legislature did not contemplate that any of the meetings of a Massachusetts corporation should be held beyond the jurisdiction of the Commonwealth.

Very truly yours,

Constitutional Law

HERBERT PARKER, Attorney-General.

Hours of Labor on Public Works. It would seem, in view of the decision of the Supreme Court of the United States in Atkin v. Kansas, 191 U. S. 207, that a proposed bill regulating the hours of labor of workmen employed by the Commonwealth, by the several counties and by certain cities and towns, or by persons contracting with the Commonwealth, the counties and such cities and towns, would not, if enacted, be open to objection upon constitutional grounds.

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MAY 6, 1904.

Hon. LOUIS A. FROTHINGHAM, Speaker of the House of Representatives. SIR: I have the honor to acknowledge the receipt of an order of the Honorable House of Representatives passed on the second day of May, 1904, which is of the tenor following: "Ordered, that the Attorney-General be requested to furnish to the House of Representatives his opinion as to the constitutionality of the provisions of House Bill No. 1320, which regulates the hours of labor of workmen employed by the Commonwealth, or by any county, or by certain cities and towns, or by persons contracting with the Commonwealth or with any county or with certain cities and towns," with which order the bill referred to was transmitted to The act referred to is substantially the same in its provisions as that which received my consideration in an opinion under date


of June 15, 1903, and the attention of my predecessor, AttorneyGeneral Knowlton, in his opinion of April 24, 1901.

I have the honor to advise the House of Representatives that in my opinion the bill is constitutional, so far as it applies to the Commonwealth. So far as it applies to municipalities and counties within the Commonwealth, the reasons for holding it to be unconstitutional as in effect taking property without compensation and without due process of law, and as authorizing the appropriation of taxpayers' money for private purposes, have been already set forth in the opinions above referred to.

Since the last opinion of the Attorney-General above cited, a majority of the Supreme Court of the United States, in an opinion written by Mr. Justice Harlan, have decided that an act of the State of Kansas, similar in its provisions to the act now submitted to me, did not conflict with the fourteenth amendment of the federal Constitution. The Chief Justice and Justices Brewer and Peckham dissented from the opinion of the court above cited.

Though the opinion is by a divided court, and though the adjudication of the majority is not necessarily or conclusively binding upon the courts of the Commonwealth, since the decision of that majority was in favor of the constitutionality of the Kansas act, it is, nevertheless, manifest that the decision itself must be of commanding if not controlling influence upon other tribunals. I should, therefore, deem it presumptuous and perhaps an exhibition of undue hardihood if I assumed to reaffirm my former opinion, which is approved by a minority of the justices of the United States Supreme Court.

It is to be noted that since the decision of the Supreme Court of the United States in the Kansas case (Atkin v. Kansas, 191 U. S. 207), an elaborate and most carefully considered decision has been made by the Court of Appeals of New York in Ryan v. the City of New York, 177 N. Y. 271. The majority of that court hold to the view of the majority of the Supreme Court of the United States in the Kansas case. O'Brien, Bartlett and Vann, JJ., however, dissent in a long opinion based upon the same reasons which have influenced the Attorneys-General of Massachusetts in their opinions upon the unconstitutionality of the legislation embodied in the act now referred to me.

In view of the opinions of the Supreme Court of the United States and of the appellate court of New York above cited, I must advise the Honorable House of Representatives that there now appears judicial determination of high authority holding that the proposed legislation is within the constitutional limitations.

Very truly yours,

HERBERT PARKER, Attorney-General.

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