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than of right. It is within the power of the out due process of law, nor deny to any person local sovereign either to exclude foreign cor- within its jurisdiction the equal protection porations altogether from doing business of the laws. Art. 14, sec. 1, amendments. within its jurisdiction, or it may prescribe | Foreign Corporations Are Not Entitled to regulations under which they may be ad the Privileges and Immunities of Citizens.mitted. Its power in this direction is lim. | Treating the last two restrictions, first, the ited only by a proper interpretation of the most difficult question will be to determine federal constitution.”
how far and for what purposes a foreign Professor Kirchner, in his lectures on Pri corporation may be said to be a citizen. vate International Law, says: “Comity is The law is well settled now "that a corporathe self-imposed duty of the state to apply tion may, for the purposes of suit, be by its courts to controversies between pri said to be born when, by law, it is created or vate parties, the laws or acts of a foreign organized, and to reside, where, by or under jurisdiction when and in so far as they may the authority of its charter, its principal ofbe pertinent to the matter in hand.” He fice is.” A corporation, therefore, created thus makes it more than mere courtesy, but, by or organized under the laws of a particular if the duty be self-imposed, there is no state and having its principal office there, is, power outside of the state to enforce it, and, under the constitution and laws of this hence, the state may extend or withhold it at country for the purpose of suing and being will. This, too, is the view held by Mr. sued, a citizen of that state, possessing all Justice Field in the opinion above referred the rights and having all the powers its to, for, after saying that the recognition of charter confers.” In the earlier cases it the existence of a foreign corporation de was held that the citizenship of a corparation, pended purely on comity, he continues: “A for the purposes of the suit, was determined comity which is never extended where the by the citizenship of its members, and that in existence of a foreign corporation or the ex order to be a citizen of a certain state all its ercise of its powers is prejudicial to the inter members must be citizens of that state.' ests of the state or repugnant to its policy." This rule, however, was changed, and the Comity is attended by no legal sanction. It unquestioned rule now is that laid down in is merely the good will of one state extended Louisville, Cincinnati, & Charlestown Ry. to a sister state at the will of the former. Co. v. Letson, 10 «that where a corporation “It may extend it or refuse it or, having once is created by the laws of a state the legal extended it, it may revoke or modify it, and presumption is that its members are citizens this is the law, and all the cases which of that state in which alone its corporate enunciate the doctrine of comity enunciate body has a legal existence; and that a suit the power to exclude.” The constitutional. by or against a corporation in its corporate limitations are five in number: (1) Con name must be presumed to be a suit by or gress shall have power to regulate commerce against citizens of the state which created with foreign nations, among the several the corporate body, and that no averment or states, and with the Indian tribes. Art. 1, evidence to the contrary is admissible for sec. 8. (2) No state shall lay any imposts or | the purpose of withdrawing the suit from the duties on imports or exports except what jurisdiction of the courts of the United may be absolutely necessary for executing States."11 its inspection laws. Art. 1, sec. 10, cl. | A foreign corporation is a citizen within 2. (3) No state shall without the consent the meaning of the constitution, when, after of congress lay any duty of tonnage. Art. it has entered a foreign state and been per1, sec. 10, cl. 3. (4) The citizens of each
8 Ry. Co. v. Koontz (1881), 104 U. S. 5. state shall be entitled to all privileges and 9 Bank v. Deveaux, 5 Cranch, 61. immunities of citizens of the several states.
10 2 How. 497, 558.
11 Ohio & Miss. Ry. Co. v. Wheeler (1861), 11 Black, Art. 4, sec. 2. (5) No state shall make or en
236; Marshall v. Balt. & 0. Ry. Co. (1853), 16 How. force any law which shall abridge the priv 314; Covington Drawbridge Co. v. Shepherd (1857), ileges and immunities of citizens of the
20 How. 227; Paul v. Va. (1868), 8 Wall. 168; Railway
Co. v. Harris (1870), 12 Wall. 65; Kailway Co. v. United States; nor shall any state deprive
Koontz (1881), 104 U. S. 5; Steamship Co. y. Tugman, any person of life, liberty, or property with | (1882), 106 U. 8. 118.
mitted to do business there, the state seeks to limit the number of corporations doing to deprive it of its property without due business therein. They could not charter a process of law; but farther than this the company for any purpose, however restricted, courts have not gone, and there is a long without opening the door to a flood of forline of decisions holding that it is not a citi eign corporations to engage in the same purzen, within the meaning of the constitution, suits.” “They could not repel an intruding excluding the two exceptions noted. “What corporation except on the condition of reever may be the implied powers of aggregate fusing incorporatioa for a similar purpose to corporations by the common law and the their own citizens, and it may be of the modes by which these powers were to be highest public interest that the number of carried into operation, corporations created corporations in the state be limited; that they by statute must depend both for their powers be required to give publicity to their transand mode of exercising them upon the true actions; that they submit their affairs to construction of the statutes creating them.”)2 proper examination; to submit to forfeiture "Being," then, "a mere creature of the i of their corporate rights in case of mislaw" and not a citizen, “it possesses only management; and that their officers be held those properties which the charter of its to a strict accountability for the manner in creation confers upon it, either expressly or which the business of the corporation is caras incidental to its very existence.”13 In the ried on and be liable to summary removal.” case of Paul v. Virginia,14 the court said : ! Neither Are Foreign Corporations Entitled “If, on the other hand, the provisions of the to the Privileges and Immunities of Domestic constitution could be construed to secure to Corporations.—The principal reasons are citizens of each state, in other states, the that "the grant of a franchise to a corporapeculiar privileges conferred by their laws, tion is nothing more than the grant of a an extraterritorial operation would be given special privilege given to it by the sovereign to local legislation utterly destructive of the creating it. The corporation exists entirely independence and harmony of the states. by virtue of this privilege expressed in its At the present day corporations are multi- charter, and the laws of the state granting plied to an almost indefinite extent. There this can have no force or effect outside of its is scarcely a business pursuit requiring the own boundaries. Mr. Justice Field, in renexpenditure of large capital, or the union of dering the opinion of the court in Paul v. large numbers, that is not carried on by cor- | Virginia, said: “The privileges and im-. porations. It is not too much to say that the munities secured to citizens of each state in wealth and business of the country are to a the several states by the provision in quesgreat extent controlled by them. And if, tion, are those privileges and immunities when composed of citizens of one state, | which are common to the citizens of the their corporate powers and franchises could latter state under their constitution and laws be exercised in other states without re- by virtue of their being citizens of that state, striction, it is easy to see that with the ad- and special privileges enjoyed by citizens vantages thus possessed the most important in their own states are not secured in other business of those states would soon pass into states by this provision.” * * their hands. The principal businesses of every “Special privileges which are conferred state would, in fact, be controlled by corpora- | must, therefore, be enjoyed at home only tions created by other states.” “If the right unless the assent of the foreign state to their asserted of the foreign corporation, when enjoyment be given.” Hence, it follows that composed of citizens of one state, to transact a corporation possessing special privileges business in other states, was even restricted granted by one state cannot demand that to such businesses as corporations of those their privileges as granted be recognized in a states were authorized to transact, it would í foreign jurisdiction, nor that they be perstill follow that those states would be unable | mitted to enjoy the same rights, even that
like corporations created in such foreign 12 Brown v. State of Md. (1827), 12 Wheat. 64. state enjoy. As was said in State v. La13 Trustees Dartmouth College v. Woodward (1819), Lobo
chrop:15 “It is a mere confusion of ideas to 4 Wheat. 636. 14 Supra.
15 (1855), 10 La. Ann. 398.
put foreign corporations which are creatures acted, then the Illinois law ceases to be of of foreign laws on the same footing as corpo any force or effect. Again, if the subjectrations which are the creatures of our own matter requires a uniform system between laws of the state from the simple fact of their the states, then Illinois can in no way restrict being like corporations.” “It can do no or forbid farther than is absolutely necesacts and make no contracts within or without sary to carry out its police or inspection the state which creates it except such as are regulations. 17 The vital question will thus authorized by its charter." * * "It be seen to be, What is or what is not interexists only in contemplation of the law and by state commerce? If the foreign corporation force of the law, and where that law ceases is engaged in interstate commerce then the to operate and is not longer obligatory the state cannot restrict or forbid, tax regulate, corporation can have no existence. That law or discriminate against its doing business must designate the place of its creation and within its (the state's) territory. If it is it cannot migrate to another sovereignity.”16 not engaged in interstate commerce and is The cases arising under the second and not a national corporation, nor a private corthird restrictions may be treated within the poration engaged in carrying out some nadiscussion of the first or what is commonly tional purpose or duty, the state may forbid called the "Commerce Clause." .
absolutely; or discriminate against ;18 or imThe Commerce Clause--". Congress shall Have pose conditions upon ;19 or charge a license Power to Regulate Commerce with Foreign fee ;20 or tax ;21 or restrict its operations to Nations among the States and with the Indian certain territory ; 22 or, having once admitted Tribes.”—This has been by far the most the foreign corporation, the state may refruitful source of litigation of any of the re voke its license and expel.23 strictions imposed by the federal constitu Our inquiry must be, then, “What is intion. A corporation organized by and un terstate commerce?”:24 “Commerce," says der the laws of Michigan and domiciled Chief Justice Marshallin Gibbons v. Odgen, 25 there, seeks to transact business in Illinois. “undoubtedly is traffic, but it is something Illinois wishes to restrict or forbid it doing more, it is intercourse. It describes the combusiness there. One of the first questions mercial intercourse between nations and that might arise is, “Is the Michigan cor parts of nations in all its branches.” poration engaged in interstate commerce?”. "It includes navigation and facilities for If it is, the way is comparatively clear, for the transmission of intelligence by telegraph the constitution and laws of the United | and telephone."'26 “It is not confined to States are the supreme laws of the land and the instrumentalities of intercourse known any clause or article in a state constitution or in use when the constitution was adopted, or statute passed by the state legislature but keeps pace with the advancement, the that comes in conflict therewith must yield development of time and circumstances." to the paramount law. It is true that if the | The power to regulate all these agencies of Michigan corporation is engaged in inter- | intercourse “among the several states” has state commerce and its business is of a been expressly or impliedly granted to con. nature such that different rules may be suit | gress, and whenever by constitutional or legable to regulate the business in the different | islative action a state seeks to interfere with localities and the federal government has the operations of a foreign corporation ennot acted, then the Illinois legislature may gaged in one of these pursuits, its enactregulate and to that extent restrict—though ments must fail. It would be useless to give it can never forbid-until the general gov
17 Leisy v. Hardin (1890), 135 U. S. 100. ernment has acted. But when it has once
18 Bank of Augusta v. Earle (1839), 13 Pet. 519. 16 Bank of Augusta v. Earle (1839), 13 Pet. 586; 19 Ducat v. Chicago (1875), 76 Ill. 172. Paul v. Va. (1868), 8 Wall. 168; Pensacola Tel. Co. v. 20 Pembina Mining Co. v. Pa. (1888), 125 C. S. 181. West. U. Tel. Co. (1877), 96 U. S. 1; Cooper Mfg. Co. 21 Paul v. Va. (1868), 8 Wall. 158. v. Ferguson (1885), 113 U. S. 727; Gloucester Ferry 22 Lafayette Ins. Co. v. French (1855), 18 How. 405. Co. v. Pa. (1885), 114 U. S. 196; Robbins v. Shelby Co. 23 Potter v. Bank of Ithaca (1843), 5 Hill, 490. Taxing District (1887), 120 U. S. 489; Pembina Min. 24 Pierce v. People of the State of III. (1883), 106 ing & Milling Co. v. Pa. (1888), 125 U. 8. 181; McCall 111. 13. v. Cal. (1890), 136 U. S. 114; Crutcher v. Ky. (1891), 25 (1824), 9 Wheat. 1. 141 U. S. 47; People v. Wemple (1892), 131 N. Y. 64. 26 96 U. S. 1.
all the cases bearing on this point. Enough of the first section of the fourteenth amendonly will be given to show that when it is ment.” “The only limitations upon the once determined that the business in which power of the state to exclude foreign the foreign corporation is engaged, which is corporations from doing business within sought to be regulated, is interstate com its limits, the * * * or to exact condimerce, then the state's right to control has tions for allowing the corporation to do busi. been granted to a higher authority, and any ness, arises where the corporation is in the act by the state by way of regulation is void, employ of the federal government or where unless it be some act necessary to the en its business is strictly commerce, interstate forcement of its police regulations or in or foreign.” This rule was reiterated by spection laws. 27
Mr. Justice Brewer in 29 Kan. 672, where The law in relation to foreign insurance he says: “Corporations created by other companies gives us, perbaps, the clearest states have no adherent right to enter into view of the power of a state over foreign cor this state and transact business. Each state porations; the cases being almost entirely | may determine for itself what corporations free from complications arising out of the of other states may transact business within limitations upon state power found in the its borders and upon what conditions they federal constitution.
may so transact business." The State may Exclude. This doctrine was In Noble v. Mitchell,29 which was a suit to laid down in Paul v. Virginia.28 After
recover on an insurance policy issued by a deciding that the issuing of a policy
Philadelphia company without having first of insurance was not a transaction
complied with the Alabama law, the court of commerce, the court, speaking of
says: “It is well settled that the legislature foreign corporations, says: “Having no ab
of the state has authority to exclude foreign solute right of recognition in other states,
insurance companies altogether, and may imbut depending for such recognition upon
pose any restriction it may deem proper as a their assent, it follows, as a matter of course,
condition upon which foreign corporations that such assent may be granted upon such
may do business.” The Illinois courts terms and conditions as those states may
unwaveringly maintain the doctrine and seem think proper to impose. They may `exclude
even to go a step farther. In Pierce v. The the foreign corporation entirely; they may
People of the State of Illinois, 30 the court restrict its business to certain localities; or
says, “it is competent for the legislature to they may exact such securities for the per
declare all contracts of insurance made by a formance of its contracts with their citizens
citizen of this state with a foreign company as, in their judgment, will best promote the
having no right to do business here, void, on public interest. The whole matter rests in
the ground of being contrary to the public their discretion.” This rule does not con
policy of the state.” The Micbigan court flict with the first section of the fourteenth
held in Home Ins. Co. v. Davis, 31 that, amendment, says Mr. Justice Field's in Pem
bowhile for a certain jurisdictional purposes bina Silver Mining and Milling Co.
a corporation is called a citizen of the state v. Pennyslvania. The states may re
which charters it, the authorities are uniform quire for the admission within their
in denying it the rights of actual citizenship limits of the corporations of other
anywhere else. It is competent for any state states, or any number of them, such
to prescribe any condition it chooses to preconditions as they may choose, without act
scribe, within which foreign corporations ing in conflict with the concluding provision
must act if they act at all. It may exclude 87 Gibbons v. Ogden (1824), 9 Wheat. 1; Brown v.
them entirely if it seems fit so to do, and State of Md. (1827), 12 Wheat. 419; Passenger Cases may invalidate all their acts done within its (1848), 7 How. 283; Crandall v. Nevada (1877), 6 Wall.
borders and without its permission.” Sec25; State Freight Cases (1872), 15 Wall. 232; Pennsa. cola Tel. Co. v. W. U. Tel. Co. (1877), 96 U. S. 12;
ond, the state may tax: “The state legislaWalling v. Mich. (1885), 116 U. S. 446; Robbins v. ture may tax foreign corporations to any Shelby Co. Taxing Dist. (1887), 120 U. S. 592; Leisy v. Hardin (1890), 135 U, S. 100; Minnesota v. Barber 29 (1993), 100 Ala. 519. (1890), 136 U. S. 313.
80 106 Ill. 11. 18 8 Wall. 168.
61 (1874), 29 Mich. 238.
extent it may, in its discretion, choose, as forbid foreign corporations doing business the condition upon which the corporation within their limits. Many others might shall be allowed to exercise its functions and
be given, but the doctrine is so well estabprivileges in the state.”32 Third, the state lished that the compilation of cases would may impose a license. This power is un serve no valuable purpose. Briefly, then, the doubted.38 Fourth, it may discriminate foreign corporation is a mere creature of a against.34 “Taxation against a foreign cor foreign law. Its powers and liabilities are poration need not be uniform. A state may such only as are conferred upon it by its discriminate between its own corporations
charter and the laws of the state creating it. and those created by other sovereignties. It exists only in contemplation of the law The legislature may classify for the purpose and by force of the law, and where that law of taxation and license, and if such classifi ceases to operate and is no longer obligatory cation exclude foreign corporations and is the corporation can have no existence. It not arbitrary but fair and just there can be must dwell in the place of its creation and no constitutional objection to it.35 Fifth : cannot migrate to another sovereignty. The state may pass retaliatory statutes. If it is engaged in interstate commerce or
This, perhaps, is one of the least tried commerce with foreign nations, or is a napowers, but it has been sustained in New | tional corporation, or is one engaged in carryYork, Michigan, Ohio, Indiana and Kansas. ing out some federal need, purpose, or duty, One of the cases most often cired in the or, if it possesses some special privileges State v. Ins. Co.,36 and as the provis granted by congress, then its rights and ions are very similar in all the states we liabilities are controlled by the supreme law will quote Indiana statute brought in ques of the land, and the state cannot restrict or tion in the case. In 1877 Indiana en forbid their doing business within its limits. acted a statute wbich provided tbat, If these conditions do not exist, the power “when obligation or probibitions are, by of the state is plenary. It may exclude the the laws of any other state, imposed upon foreign corporation entirely, restrict its insurance companies of tbis state greater business to certain localities, exact license than are required by the laws of this state ; fees, tax, impose conditions upon, discrimthen such obligations or prohibitions shall inate against, or make them subject to rebe imposed upon insurance companies of taliatory statutes. Having once admitted it, that state doing business here.” Penn the state may appeal its license and again sylvania imposed a fee of $500 upon exclude it subject only to the rule that in all insurance companies doing business in tax cases the law must apply to all of class that commonwealth. Indiana officials im. and not be purely arbitrary. And this we mediately demanded a like fee of the Penn believe to be the law. sylvania companies doing business in In | Springfield, Ill.
T. E. Lyon. diana and the court sustained the statute holding, that it depended only on the happening of a contingency, and when
PERSONAL INJURIES-DAMAGES- MENTAL
SUFFERING. the contingency happened the statute could be enforced.
HORN v. BOISE CITY CANAL CO. These are the principal measures resorted to by the states in enforcing
Supreme Court of Idaho, May 20, 1901. their right or power to restrict or 1. In case of personal injury resulting from care.
lessness, mental and physical suffering are elements 32 West. U. Tel. Co. v. Lieb, 76 III. 172; Gloucester of damage, the amount of which must be left to the Ferry Co. v. Pa. (1885), 114 U. S. 96; Nelma v. Edin. good sense and sound judgment of the jury, whose burg Am. Mort. Co. (1890), 92 Ala. 157; Paul v. Va. verdict should not be disturbed, except in case of (1868), 8 Wall. 168.
a clear abuse of discretion. 83 Paul v. Va. (1868), 8 Wall. 168; Pembina Mining 2. The owner of a ditch, which is upon a public & Milling Co. v. Va. (1888), 125 U. S. 181; Liverpool street in a city, is under obligation to keep it in such Ins. Co. v. Mass. (1870), 10 Wall. 566; State v. Lath. condition as the safety of persons traveling upon the rop (1885), 10 La. Ann. 398.
street, and exercising reasonable care to avoid dan. 84 Ducat v. Chicago (1875), 48 III. 172.
ger, demand; and the failure to keep same in such 35 29 Kan. 672.
safe condition is negligence, and renders the owner 36 (1888) 115 Ind. 257.
1 liable to damages for personal injuries resulting from