APPEAL FROM THE SUPREME COURT OF APPEALS OF VIRGINIA.
McReynolds, Brandeis, Sutherland, Butler, Stone, Roberts, Cardozo, Black; Hughes took no part in the consideration or decision of this case.
MR. JUSTICE BRANDEIS delivered the opinion of the Court.
The Atlantic Refining Company is a Pennsylvania corporation engaged in refining and selling gasoline and petroleum which it markets throughout the United States and in foreign countries. In 1929 the year's sales aggregated more than $153,000,000. Prior to 1930 the company had never applied for permission to do business in Virginia. It had not done any intrastate business there; and had no property or place of business within the State. It had done some interstate business, but had not paid, or been requested by the State to pay, either an entrance fee or taxes. In January 1930 the company applied to the State Corporation Commission for a certificate of authority to do intrastate business. Its net assets were then $132,196,275; its authorized capital $100,000,000; its issued capital $67,049,500. The Commission granted the certificate; but, as prescribed by Chapter 53, § 38a of the Acts of Assembly of Virginia, 1910; Tax Code of Virginia (Michie, 1930) § 207, set forth in the margin,*fn1 exacted for the privilege $5,000 as an entrance
fee. Payment was made under protest. Having duly claimed that by requiring it the statute violated the Federal Constitution, the company requested refund of the amount paid. The Commission refused to make the refund; the highest court of the State affirmed its order, 165 Va. 492; 183 S. E. 243, and the case is here on the company's appeal.
Answering the company's statement under Rule 12, the Commonwealth opposed our taking jurisdiction. Its objection was that the appeal presented no substantial federal question, since, in 1918, the validity of the statute was challenged under similar circumstances and sustained by a unanimous Court in General Railway Signal Co. v. Virginia, 246 U.S. 500; and, in 1928, was again sustained, by a Per Curiam opinion, in Western Gas Construction Co. v. Virginia, 276 U.S. 597. The company asks us to overrule these decisions, contending that they are inconsistent with other and later cases. It asserts that in sustaining the Virginia statute this Court followed views expressed in Baltic Mining Co. v. Massachusetts, 231 U.S. 68, 87; and that the doctrine of the Baltic case has since been repudiated, in Alpha Portland Cement Co. v. Massachusetts, 268 U.S. 203, 218 and Cudahy Packing Co. v. Hinkle, 278 U.S. 460, 466. Consideration of the jurisdiction of this Court was postponed to the hearing on the merits.
By the statute foreign corporations are divided, for the purpose of fixing the amount of the entrance fee, into twelve classes. The fee for the lowest class -- those whose authorized capital stock is $50,000 or less -- is $30. The fee for the highest class -- those whose authorized capital stock exceeds $90,000,000 -- is $5,000. The company does not object to the subject or the occasion of the exaction. Its objection is solely to the measure. Its claim is that the statute imposes an unconstitutional condition because it determines the amount of the fee by the amount of the company's authorized capital. The contention is that a fee so determined necessarily burdens interstate commerce, denies due process, and denies equal protection of the laws.
Unlike the cases in which the doctrine of unconstitutional conditions has been applied, the condition here
questioned does not govern the corporation's conduct after admission. But it may be assumed that the rule declared in Terral v. Burke Construction Co., 257 U.S. 529, is applicable also to conditions to be performed wholly before admission; and that the $5,000 must be refunded if its exaction involved denial of any constitutional right. For we are of opinion that in refusing to grant the authority to carry on local business except upon payment of the $5,000 no constitutional right of the company was violated.
First. Virginia recognized the constitutional right of the company to carry on interstate business without paying an entrance fee. On the other hand, the company conceded that the Federal Constitution does not confer upon it the right to engage in intrastate commerce in Virginia unless it has secured the consent of the State. Compare Hemphill v. Orloff, 277 U.S. 537, 548. Whether the privilege shall be granted to a foreign corporation is a matter of state policy. Virginia might refuse to grant the privilege for any business, or might grant the privilege for some kinds of business and deny it to others.*fn2 It might grant the privilege to all corporations with small capital while denying the privilege to ...