within the jurisdiction, or privilege taxes, or license. fees, the payment of which is made a condition of the company's right to do business and exercise its functions within the State. The power to impose these two classes of taxes rests upon distinct grounds. The right to tax the property of the foreign company, cannot be distinguished from the power of taxing any property within the territorial jurisdiction of the State. On the other hand, the power to impose a privilege or license tax rests upon the power of the sovereignty to exclude the foreign company from its territory. This distinction does not coincide with the difference between taxes for revenue and license taxes; for many taxes in the form of license fees, which are in reality imposed for purposes of revenue, are frequently enforced against foreign companies by the alternative of exclusion.

§ 143. Privilege Taxes.-This power of taxing under the form of a license, whether it be exercised for revenue, or for purposes of regulation, is co-extensive with the power of the sovereignty to exclude foreign coporations from its jurisdiction; and that power, as we have seen, is subject only to the limitation that it must not encroach upon the exclusive power of Congress to regulate interstate commerce.' Since such a tax rests upon the power of exclusion, exclusion is the remedy usually provided to enforce payment.2 It is in no sense a tax upon property of the

1 Ante, §§ 3, 32-45; Ducat v. Chicago, 48 Ill. 172, 95 Am. Dec. 529, 10 Wall. 410; Paul v. Virginia, 8 Wall. 168; Western Union Tel. Co. v. Lieb, 76 Ill. 172; People v. Thurber, 13 Ill. 554; State v. Ins. Co., 115 Ind. 257, 17 N. E. Rep. 574; 20 Am. and Eng. Corp. Cases, 589.

2 Attorney General v. Bay State M. Co., 99 Mass. 148; Ducat v. Chicago, 48 Ill. 172; People v. Equitable Trust Co., 96 N. Y. 387; Leavenworth v. Booth, 15 Kans. 627; Liverpool Ins. Co. v. Massachusetts, 10 Wall. 566. Compare Connecticut Ins. Co. v.Commonwealth, 133 Mass. 161.

company, either within or without the State, and it makes no difference that the tax itself is estimated by a percentage of the whole amount of the dividends, or of the whole amount of capital stock, rather than by a percentage of dividends earned within the State, or of that portion of the capital stock employed within the State.' And so it is held that a tax is not invalid, because. a portion of the dividends, upon which it is computed, is derived from securities which are exempt by law from taxation. Conversely, if the tax is not a license or franchise tax, but is in its nature a tax upon the property and assets of corporations, its operation, when applied to foreign companies, will be limited to that portion of their capital stock or assets which they bring within the jurisdiction."

§ 144. License Fees-General Principles.—In another part of this chapter we have had occasion to consider when the granting and refusal of a license is a judicial act on the part of the State officials, and, therefore, not subject to control by the courts,* and when such officials act in a purely ministerial capacity. We have seen that a presumption is to be indulged in favor of the regularity of the issue of the license, and that if the paper itself be lost, parol evidence would be admissible to supply its contents,'

1 People v. Equitable Trust Co., 96 N. Y. 387; People v. Horn Silver Mining Co., 105 N. Y. 76, 11 N. E. Rep. 155; Attorney General v. Bay State M. Co., 99 Mass. 148; Southern Cotton Oil Co. v. Wemple, 44 Fed. Rep. 24; People v. Wemple, 131 N. Y. 64, affirming 61 Hun, 83, 15 N. Y. Sup. 446; Delaware R. R. Tax, 18 Wall. 206. See also Pipe Line Co. v. Berry, 53 N. J. L. 212, 19 Atl. Rep. 665.

2 People v. Home Ins. Co., 92 N. Y. 328.

3 Commonwealth v. Standard Oil Co., 101 Pa. St. 120.

▲ Ante, § 51.

Ante, § 52. • Ante, § 55.

7 Ante, § 56.

and that such a license, even when levied for the purpose of revenue, is not exclusive of other forms of taxation.' § 145. License Fees. Since the States in imposing conditions upon foreign companies are in the exercise of a sovereign power, and may make such regulations as they see fit, so long as they do not encroach upon the power of Congress to regulate interstate commerce, no question can arise as to the reasonableness or unreasonableness of the license fee which is exacted. They are under no obligations to make "reasonable" regulations for the admission of foreign companies, and no court has power to consider that question. But where the State delegates to a municipal corporation the legislative discretion of determining upon what terms a foreign company is to be admitted to do business within the city, such delegated power must, of course, be exercised reasonably with a view of accomplishing the end contemplated.'

Reasonableness and Unreasonableness of

3

§ 146. Distinction between a License Fee and a Tax for Revenue.-Ordinarily, the distinction between a tax, in the form of a license, imposed for revenue, and a license fee, exacted for purposes of regulation, which is so fine as to be scarcely capable of formulation, in general terms, is unimportant in these cases, but instances are not wanting in which the validity of the tax has depended upon whether it is to be regarded as a tax for revenue, or a license fee for regulation. Thus, in a case arising in California, where there is a constitutional provision that

1 Ante, § 54.

2 Insurance Co. v. New Orleans, 1 Woods, 85.

Cooley, Taxtion, 597.

the legislature shall have no power to impose taxes upon counties, cities, or towns, for municipal purposes, but may, by general laws vest, in the corporate authorities thereof, the power of such taxation,' it was urged that a statute, requiring the agent of every foreign fire insurance company to pay a percentage of premiums for property insured within the city or county to the treasurer thereof for the purpose of establishing a fireman's relief fund, was not invalid as being an act levying a tax, but rather imposed a license for purposes of regulation. The court, however, held otherwise, especially in view of the fact that before the statute in question was enacted, a complete system of licensing and regulating foreign companies was already in operation. The business being already licensed, the subsequent law subjecting it to a tax in the form of a license must be presumed to have been for revenue, and not intended as a condition. The statute was, therefore, declared void.' While it is true that such limitations are applicable only to the power of taxation, and are not, therefore, to be taken as limiting the police functions of government, when entirely different ends are in view, although it is sought to reach them by a regulation in the form of a tax, the statute must still conform to the limitations upon the taxing power, except in so far as a departure is necessary to make it regulative or prohibitory.

§ 147. Same-Municipal License.-The distinction between a license and a tax sometimes becomes

1 Const. Cal., art. 11, § 12.

2 San Francisco v. Liverpool, etc. Ins. Co., 74 Cal. 113, 15 Pac. Rep. 380.

3 San Francisco v. Liverpool, etc. Ins. Co., 74 Cal. 113, 15 Pac. Rep.

very material, too, in construing grants of powers to municipalities. The rule is that general power to license does not carry with it authority to impose a tax for revenue. "A license is issued under the police power, but the exaction of a license fee with a view to revenue would be an exercise of the power of taxation; and the charter must not assume it."'1 General power in the charter "to regulate the police of the city or village, and pass and enforce all necessary police ordinances," will not authorize the imposition of a license fee of two per cent. of the gross receipts of the agency in the city. And where an act provided that the agents of foreign insurance companies should annually return to the municipal authorities, the net receipts of their agencies, to be taxed at the same rate as other personal property, which tax should be in lieu of all town and municipal licenses, it was held that a proviso that the act did not prohibit cities having an organized fire department from levying a license. fee to be applied in support of that department, would have no effect to confer no power on such cities to require a license in the absence of its grant under some other laws."

But where the power granted by the charter is "to license, tax and regulate," the city may impose a license fee for revenue purposes upon foreign insurance companies, although a tax on their net in

1 St. Louis v. Independent Ins. Co., 47 Mo. 146; St. Louis v. Boatmen's Ins. & Tr. Co., 47 Mo. 150.

2 Chicago v. Phoenix Ins. Co., 126 Ill. 276, 18 N. E. Rep. 668, affirming 26 Ill. App. 650. Compare Springfield v. London, etc. Ins. Co., 21 Ill. App. 156.

3 Chicago v. Phoenix Ins. Co., 126 Ill. 276, 18 N. E. Rep. 668.