Engineering and Contracting Company, assignee of Joseph B. Cheshire, Jr., receiver of the Carolina Electrical Company." The complaint set forth that the Carolina Electrical Company (a North Carolina corporation) had furnished to the contractor certain material and labor for which there remained unpaid the sum of $498.69; that on October 4, 1912, Joseph B. Cheshire, Jr., was appointed receiver of that company; and that on March 1, 1913, its claim had been "assigned and transferred for value" to the above-named plaintiff by the receiver, and that the plaintiff was the sole owner of the account and had succeeded to all the rights incident thereto which had belonged to the Carolina Electrical Company. The alleged transfer was denied. Evidence was introduced to show the incorporation, and the appointment of the receiver. The district judge found that the order proved was insufficient to establish the authority of the receiver to assign the claim, but held that the proceeding in the case was a sufficient filing of the claim on behalf of the Carolina Electrical Company. Judgment was awarded in favor of that company with direction that it should be paid "only to such person as may be authorized by law to receive it for said Carolina Electrical Company," and the judgment to this effect was affirmed.

In this, we think the court erred. The Carolina Electrical Company was not one of the plaintiffs and there was no intervention on its behalf. The trial court in its findings sets forth the interventions of certain other parties and states that no more interventions appear to have been filed in the cause. It is true, of course, that the real party in interest who is entitled to enforce the cause of action may be substituted as plaintiff. See McDonald v. Nebraska, 101 Fed. Rep. 171, 178. But the present case is not one of misnomer, or of a nominal plaintiff for whom the real party in interest is substituted, or indeed of any proper substitution. The plaintiff, the Electrical En

gineering & Contracting Company was not a nominal party, nor was the action in any sense brought for the benefit of the Carolina Electrical Company. The record shows that it was brought, so far as this claim is concerned, solely for the benefit of the Electrical Engineering & Contracting Company upon the allegation that the claim had been assigned to it for value and that it was the exclusive and beneficial owner. According to the record, the Carolina Electrical Company was not made a party at any stage of the action unless this was accomplished by the decision and the judgment. But at the time of the decision, November 10, 1913, by reason of the express limitation of the statute, it was too late for that company to intervene.

The judgment is modified by striking out the provision in favor of the Carolina Electrical Company, and as thus modified is affirmed.

Judgment affirmed.

KANSAS CITY, FORT SCOTT & MEMPHIS RAILWAY COMPANY v. BOTKIN, SECRETARY OF STATE OF THE STATE OF KANSAS.

ERROR TO THE SUPREME COURT OF THE STATE OF KANSAS.

No. 450. Submitted January 7, 1916.-Decided February 21, 1916.

The State cannot lay a tax on interstate commerce in any form by imposing it either upon business constituting such commerce or on the privilege of engaging in it, or upon the receipts as such derived therefrom.

Whether a state tax has such a direct relation to interstate commerce as to be an exercise of power prohibited by the commerce clause depends upon the operation and effect of the tax as enforced and

Argument for Plaintiff in Error.

240 U.S.

not upon the manner in which the taxing scheme has been characterized.

The State has authority to tax a domestic corporation for the privilege of being a corporation, and such a tax is not necessarily invalid because measured by the capital stock, part of which may represent capital not subject to the taxing power of the State.

A State is not debarred from imposing a tax upon the granted privilege of being a corporation, because the corporation may be engaged in interstate commerce.

The validity of each tax must be decided upon its own facts, and a tax within the taxing power of the State will not be condemned as repugnant to the Federal Constitution unless its natural operation and effect render it a prohibited exaction.

The tax imposed by chapter 135, Kansas Laws of 1913, on the privilege of being a corporation is not laid upon interstate commerce or receipts therefrom or fluctuating with the volume of interstate business, but is simply graduated according to paid up capital with a reasonable maximum; and it is not, as to a domestic corporation engaged in both interstate and intrastate commerce, invalid either as a violation of the commerce clause as taxing interstate commerce or of the due process clause of the Fourteenth Amendment, as taxing property beyond the jurisdiction of the State. 95 Kansas, 261, affirmed.

THE facts, which involve the constitutionality. under the commerce and due process clauses of the Federal Constitution and the construction of the statute of Kansas of 1913 imposing annual taxes on corporations, are stated in the opinion.

Mr. R. R. Vermilion and Mr. W. F. Evans for plaintiff in error:

The tax involved is not in lieu of property tax. The statute provides no method for ascertaining proportion of stock of domestic corporations devoted to Kansas business. The statute imposes a burden on interstate commerce and seeks to tax property beyond the jurisdiction of the State of Kansas. West. Un. Tel. Co. v. Kansas, 216 U. S. 31.

There is no distinction between foreign and domestic

240 U.S.

Argument for Defendant in Error.

corporations. West. Un. Tel. Co. v. Kansas, 216 U. S. 36; Phila. & Southern S. S. Co. v. Pennsylvania, 122 U. S. 326; Galveston, Harrisburg &c. Ry. v. Texas, 210 U. S. 217; Meyer v. Wells, Fargo & Co., 223 U. S. 298; Ludwig v. West. Un. Tel. Co., 216 U. S. 146.

A corporation may pay under protest and recover taxes. Atchison, Topeka &c. Ry. v. O'Connor, 223 U. S.

280.

This court cannot reshape the statute. Meyer v. Wells, Fargo & Co., 223 U. S. 298; United States Exp. Co. v. Minnesota, 223 U. S. 335; Baltic Mining Co. v. Massachusetts, 231 U. S. 68; Crane Co. v. Looney, 218 Fed. Rep. 260, can be distinguished and do not apply.

The statute denies due process and equal protection of the laws.

Mr. S. M. Brewster, Attorney General of the State of Kansas, Mr. James P. Coleman, Mr. W. P. Montgomery and Mr. J. L. Hunt for defendant in error:

It

The act in question, as applied to plaintiff in error, does not regulate or burden interstate commerce. imposes an excise tax upon the right or privilege of the plaintiff in error to exist as a corporation under the laws of the State. Railway Co. v. Sessions, 95 Kansas, 261; Society for Savings v. Coite, 6 Wall. 594; Hamilton Mfg. Co. v. Massachusetts, 6 Wall. 632; Provident Inst. for Savings v. Massachusetts, 6 Wall. 611; Home Ins. Co. v. New York, 134 U. S. 594.

The State has full power to impose such a privilege tax. Cases supra and Horn Silver Mining Co. v. New York, 143 U. S. 305; Philadelphia R. R. v. Pennsylvania, 15 Wall. 284; Philadelphia S. S. Co. v. Pennsylvania, 122 U. S. 326; Minot v. Railway Co., 18 Wall. 206.

Such a franchise tax, if otherwise valid, may be computed or measured in amount by the amount of the capital stock of the corporation employed in part in carrying on

interstate commerce. Flint v. Stone Tracy Co., 220 U. S. 107; U. S. Exp. Co. v. Minnesota, 223 U. S. 335; Baltic Mining Co. v. Massachusetts, 231 U. S. 68.

The statute imposing the tax provides that the amount to be paid for the privilege for which it is required shall be determined by reference to the capital employed in exercising that privilege, and such capital, or the property in which such capital is invested, is not itself taxed. Home Ins. Co. v. New York, 134 U. S. 594; Cornell Steamboat Co. v. Sohmer, 235 U. S. 549.

The statute in question, as applied to domestic railway corporations, does not burden interstate commerce. Philadelphia R. R. v. Pennsylvania, 15 Wall. 284; Philadelphia S. S. Co. v. Pennsylvania, 122 U. S. 326; Minot v. Railway Co., 18 Wall. 206; Ferry Co. v. East St. Louis, 107 U. S. 365; Ashley v. Ryan, 153 U. S. 436; Railroad Co. v. Maryland, 21 Wall. 456.

The question involved is not within the rule of law determined in West. Un. Tel. Co. v. Kansas, 216 U. S. 1; Pullman Co. v. Kansas, 216 U. S. 56; see Railway Co. v. Sessions, 95 Kansas, 261.

The other cases cited by plaintiff in error can be distinguished.

There is no denial of due process or equal protection of the laws.

MR. JUSTICE HUGHES delivered the opinion of the court.

By Chapter 135 of the Laws of 1913, of Kansas, every domestic corporation is required to pay to the Secretary of State an annual fee which is graduated according to the amount of its paid-up capital stock. When this capital stock does not exceed $10,000, the fee is $10; when it exceeds $10,000 but is not over $25,000, the fee is $25; and there are further increases, graduated as stated, until the maximum fee of $2,500 is reached, that sum