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VI. Liability for Torts.-Foreign corporations may be sued for torts, and are liable to the same extent as domestic corporations. 1

An action for a tort may also be maintained by a foreign corporation.2

VII. Liability to Taxation.-- That foreign corporations are liable to taxation, is too well settled to admit of question.3 The character and amount of these taxes, the method of assessment and collection, are matters of local policy which are regulated in


take a different view: “Whatever power ter v. Glazener, 27 Ala. 391: Texas, etc.,' may be conceded to a State, to prescribe R. Co. v. Richards (Tex.), 4 S. W. Rep. conditions on which foreign corporations 627; Willis v. Missouri Pac. R. Co., 61 may transact business within its limits, Tex. 432; s. C., 48 Am. Rep. 301; Needit cannot be admitted to extend so far ham v. Grand Trunk R. Co., 38 Vt. 294;.

to prohibit or regulate commerce Whitford v. Panama R. Co., 3 Bosw. (N. among the States; for this would be to Y.) 67; S. C., 23 N. Y. 465; Beach v. Bay invade the jurisdiction which, by the terms State Co., 30 Barb. (N. Y.) 433; Richardof the Constitution of the United States, son v. N. Y. Cent. R. Co., 98 Mass. 85; is conferred exclusively upon Congress.” Woodward v. Michigan, etc., R. Co., 10 After reciting the facts, the opinion con- Ohio St. 121. Compare Shedd 7'. Moran, tinues: “That was commerce; and, to 10 Ill. App. 618; Hyde v. Wabash, etc., prohibit it, except upon conditions, is to R. Co., 61 Iowa, 411; s. C., 47 Am. Rep. regulate commerce between Colorado 820. See also authorities cited, CONFLICT and Ohio, which is within the exclusive OF LAWS, 3 Am. & Eng. Encyc. of Law, province of Congress. It is quite com- 521. petent, no doubt, for Colorado to prohibit 3. Western Union Tel. Co. v. Mayer, a foreign corporation from acquiring a 28 Ohio St. 521; British, etc., Life Ins. domicil in that State, and to prohibit it Co. v. Commissioners, etc., 31 N. Y. 32; from carrying on within that State its Western Union Tel. Co. v. Lieb, 76 Ill. business of manufacturing machinery; 172; Boston Loan Co. v. Boston, 137 but it cannot prohibit it from selling in Mass. 332; Liverpool, etc., Ins. Co. 7. Colorado, by contracts made there, its Massachusetts, 1o Wall. (U. S.) 566, machinery manufactured elsewhere, for In Western Union Tel. Co. v. Massathat would be to regulate commerce chusetts, 125 U. S. 549, referring to the among the States."

taxation of foreign corporations, the court 1. Torts.--Austin v. N. Y., etc., R. Co., said: “Its property in the State is subject 25 N. J. L. 381; Bissell v. Mich. Southern, to taxation the same as other property, etc., R. Co., 22 N. Y. 258; Ahern v. Nat. and it may undoubtedly be taxed in a S. S. Co., 3 Daly (N. Y.), 399: People v. proper way on account of its occupation N. Y. Cent. R., 30 Ilow. Pr. (N. Y.) and its business.” See also Telegraph Co. 148; State v, Northern R. Co., 18 Md. v. Texas, 105 U. S. 460. 193.

It is undoubtedly competent for the 2. Portsmouth Livery Co. v. Watson, legislature to lay a franchise or license tax 10 Mass. 91; Am. Mut. Life Ins. Co. v. upon foreign corporations for the priviOwen, 81 Mass. 491.

lege of doing business within the State. Statutory Actions for Negligence Causing Commonwealth v. Standard Oil Co., 101 Death.-In Crowley v. Panama R. Co., 30 Pa. St. 145. As to what are franchise Barb. (N. Y.) 99, where a railroad was char- taxes, see Cooley on Taxation (Ed. of tered for the purpose of operating outside 1886), pp. 379, 380. of the State of New York, it was held that Pennsylvania act, April 4, 1873, $ 17, a statute constituting the killing of a per providing that “ It shall not be lawful for son an actionable tort had no extra-territo. any city, county, or municipality to impose rial force, and the company was not liable or collect any license fee or tax upon infor the death of such person in a foreign surance companies or their agents authorState. See also Selma, Rome & D. R. ized to transact business under this act” Co. v. Lacey, 43 Ga. 401.

applies to domestic and to foreign corpoIn Alabama, it was said that, though the rations, but does not constitute such a statutes of the two States were the same; contract as will prevent future taxation of an enforcement of the remedy, by comity, companies so organized. Ætna Fire Ins. would be none the less impracticable. Fos- Co. v. Reading City, 119 Pa. St. 417. 8 C. of L.-24


the several States by statute. It has been held that a State can. not tax a foreign corporation upon a principle different from that under which it may tax a domestic corporation. (See TAXATION.)

A stockholder's interest in his shares of stock is personal, and is controlled by the law of his domicil in the matter of taxation; and it is accordingly settled that a citizen of a State may be there taxed upon the amount of stock held by him in a foreign corporation.” But corporate shares of non-residents are not taxable.3

1. In Erie R. Co. v. State, 31 N. J. L. licensed by a different mode from that 531, the court observed: “ It is not denied provided for home companies. The conthat the corporate existence of a company stitution is not imperative, but simply is recognized, not by right, but of grace, permissive of such mode.

Such corporain foreign jurisdictions, nor that each gov- tion cannot complain that the license ernment has the competence to refuse to claimed is based on the system adopted recognize such existence except on its for home organizations. State v. Liverown conditions. The principle is univer- pool & London & G. Ins. Co. (La. 1858), sally acknowledged. Hence, laws requir- 4 South. Rep. 504. ing insurance companies and other foreign 2. In McKeen v. County of North corporations to file bonds and submit to ampton, 49 Pa. St. 519, it was held that other exactions, as a prerequisite to their capital stock owned be a citizen of Pennadmission in an incorporated capacity into sylvania, in a manufacturing corporation the State. Such laws, when rightfully located in another State, is taxable for made, are evidently mere police regula. State and county purposes. See also tions designed to protect the citizens of Whitsell v. Northampton County, 49 Pa. the State in which they are enacted from St. 536; Nashua Savings Bank v. Nashua, loss or imposition; and on this ground 46 N. H. 389; Smith v. Exeter, 37 N. H. their legality cannot be drawn in question. 556 ; Conwell v. Connersville, 15 Ind. But a tax law, having revenue for its ob- 150 ; Seward v. Rising Sun, etc., Co., 79 ject, is based upon a principle entirely dif- Ind. 351 ; State v. Branin, 3 Zab. (N. J.) ferent. The right to tax for revenue is 484 ; State v. Bentley, 3 Zab. (N. J.) 532; the right of the government to take so Great Barrington v. County Comrs.. 16 much of the property of the person or Pick. (Mass.) 572 ; Newark City Bank 2. company upon which the tax falls as such Assessor, 30 N. J. L. 13; Dyer v. Os. government may deem necessary for its borne, si R. I. 321; City and County cf public wants. The act of taking the prop- San Fransisco v. Fry, 63 Cal. 470; s. C., I erty, therefore, must of necessity be an Am. & Eng. Corp. Cas. 431. Compare acknowledgment of the legal status of Minot v. Philadelphia, etc., R. Co., 18 the person or company whose property is Wall. (U. S.) 206. taken. To assert that the company whose In Sturges v. Carter, 114 U. S. 511, it property

is thus taken has no rights but was decided that stock held by a citizen such as the government taking it chooses of Ohio, in a foreign corporation, is taxto confer is to assert that such company able, notwithstanding the payment by the has no title to its property but such as corporation of a tax on its property situmay be conceded to it by the taxing ated in the State. power. It seems to be utterly inconsist- In San Francisco v. Mackey, 22 Fed. ent with legal principles, which have Rep. 602 ; s. C., 10 Sawy (C. C.) 431, it always been deemed axiomatic, to hold was held that the California constitution that a government can recognize the legal prohibits double taxation. Where, there. existence of a foreign corporation for the fore, the tangible property of a corporapurpose of taxation, and at the same time tion is in Nevada, and is there taxed, the can deny such legal existence for the pur- shares cannot be assessed to the holders pose of depriving it of those rights which in California. Compare City, etc., of San belong to every individual or company Francisco v. Fry, 63 Cal. 490. known to the law. Such a doctrine would 3. North Carolina R. Co. v. Alamance obviously offer the entire property of for- Co. Commissioners, 91 N. Car. 454 ; eign corporations as a prize to the rapa- Union Bank v. State, 9 Yerg. (Tenn.) city of any State in whose territories it 490; Railroad Co. v. Pennsylvania, 15 might be or over which it might happen Wall. (U. S.) 146. to be carried."

As to whether a State may impose A foreign corporation is not required, a tax on the shares of a corporation of by the Louisiana constitution, to be its own creation, held by non-citizens, (a) State Taxation and Interstate Commerce.--It is equally well settled that a State cannot impose such taxation upon foreign corporations as will amount to a regulation of interstate commerce. This subject must be more fully treated elsewhere. (See INTERSTATE COMMERCE.) This prohibition extends to every form of taxation, such as duties laid upon the transportation of subjects of interstate commerce, receipts derived from such transportation, or taxation of the occupation or business of carrying it on. Thus, statutes have been held unconstitutional which attempted to tax goods and merchandise in transportation from or to a State,? or passenger traffic of railroads and other carriers,3 or the transmissee State Tax on Foreign-held Bonds ; 501; Wabash Railway Co. v. Illinois, 118 Buchanan v. Smith, 16 Wall. (U. S.) 309; U. S. 557 ; s. C., 26 Am. & Eng. R. R. Maliby v. Reading, etc., R. Co., 52 Pa. Cas. 1; Robbins v. Shelby County TaxSt. 140.

ing District, 120 U. S. 489; s. c., 16 Am. Statutory Liability of Agent for Taxes. & Eng. Corp. Cas. 1; Philadelphia & --It is competent for the legislature, in Southern Steamship Co.v. Pennsylvania, levying a tax upon the gross receipts of 122 U. S. 326 ; s. C., 18 Am. & Eng. Corp. the business conducted in the State by a Cas. 1 ; Western Union Telegraph Co.v. foreign corporation, to require it to be Pendleton, 122 U. S. 347; S. C., 18 Am. & paid by the resident agent; and this li- Eng. Corp. Cas. 56 ; Ratterman v. Westability, on default by him, may be en- ern Union Telegraph Co., 127 U.S. 411; forced by action against him personally. S. C., 21 Am. & Eng. Corp. Cas. 1." Alabama v. Sloss (Alabama, 1885), 83 Ala. 2. State Freight Tax Cases, 15 Wall. 93 ; citing Sumter Co. v. Bank, 62 Ala. (U. S.) 232; Minot v. Philadelphia, etc., 464: “The liability of the agent is not R. Co., 18 Wall. (U. S.) 206; Ogilvie v. imposed in the nature of a penalty for Crawford Co. (Iowa), 7 Fed. Rep. 745 ; failure to return the sworn statement, but Walling v. Michigan, 116 U. S. 446; Erie is the mode provided to collect the R. Co. v. State, 31 N. J. L. 531; State v. taxes.

Carrigan, 39 N. J. Ļ. 35 ; Standard Oil 1. In Leloup v. Port of Mobile, 127 Co. v. Bachelor, 89 Ind. 1; Blount z'. U. S. 640 ; s. c., 21 Am. & Eng. Corp. Monroe Co., 60 Ga. 61; Appeal Tax Cas. 26, the court, by Bradley, J., ob- Court v. Pullman Car Co., 50 Md. 452. serves : “No State has the right to lay 3. Crandall v. Nevada, 6 Wall. (U. S.) a tax on interstate commerce in any form, 35; Henderson v. Mayor, 92 U. S. 259; whether by way of duties laid on the trans- Gloucester Ferry Co. v. Pennsylvania, portation of the subjects of that com- 114 U. S. 196. merce, or on the receipts derived from It was held in Hays v. Steamship Co., that transportation, or on the occupation 17 How. (U. S.) 596, that a vessel regis. or business of carrying it on; and the tred in New York,plying between Panama reason is that such taxation is a burden and San Fransisco, was not taxable in on that commerce, and amounts to a California ; in St. Louis v. Ferry Co., II regulation of it, which belongs solely to Wall. (U. S.) 423, that ferry-boats runCongress. This is the result of so many ning to a city, but owned in another recent cases, that citation is hardly neces. State, are not taxable in the city as sary. As a matter of convenient refer- property within it. See also State V. ence, we give the following list : Case of Haight, 30 N. J. L.428; People v. Comrs., State Freight Tax, 15 Wall. (U. S.) 232 ; II Alb. L. J. 401 ; Morgan v. Parham, Pensacola Telegraph Co. v. Western 16 Wall. (U. S.) 471; Commonwealth Union Telegraph Co., 96 U.S. 1; Mobile v. Hays, 8 B. Mon. (Ky.) 1. V. Kimball, 102 U. S. 691 ; Western In Gloucester Ferry Co. v. PennsylUnion Telegraph Co. v. Texas, 105 U. S. vania, U+ U. S. 197, decided in 1885, the 460; Moran v. New Orleans, 112 U. S. United States supreme court held that the 69 ; s. C., 5 Am. & Eng. Corp. Cas. 311; business of receiving and landing of pasGloucester Ferry Co. z'. Pennsylvania, sengers and freight in interstate passage 114 U. S. 196; s. C., 13 Am. & Eng. Corp. is incident to the transportation, and that Cas. 365; Brown v. Houston, 114 U. S. a State tax on such receiving and landing 622 ; Walling v. Michigan, 116 U. S. 446; is a tax on transportation and on comPicard v. Pullman Southern Car Co., 117 merce inter-State or foreign; and that U. S. 34; s. C., 24 Am. & Eng. R. R.Cas. the ferry company, whose only property sion of telegrams, or locomotive engineers under the form of liin Pennsylania was the ferry-slip, was its judgment-executions, sequestration, not taxable in that State upon its capital and any other appropriate remedy in stock under pretence of existence in chancery." Pennsylvania.

If it could be ascertained what tele. Michigan Laws, 1885, No. 153. & 2, grams were confined wholly within the provide that “all shares in foreign cor- Stale, a tax on those might be imposed porations (except national banks) owned by it. The privilege carries no exemption by inhabitants of this State " shall be from the ordinary burdens of taxation in taxed. “Shares in corporations, the prop- a State within which they may own or erty in which is taxable to itself, shall not operate lines of telegraph. West. Un. be assessed to the shareholders." Section Tel. Co, v. Texas, 105 U. S. 460; West. 4 provides all corporate property, except

Un. Tel. Co. v. Massachusetts, 125 U. S. where some other provision is made by 548. law, shall be assessed to the corporation The laws of Massachusetts imposed a as to a natural person, where its prin- tax upon the Western Union Telegraph cipal office is in that State. Section 13, Company on account of the property subd. 2, requires each person to set forth, owned and used by it within that State, as property liable to taxation, all shares the value of which is to be ascertained in foreign corporations (except national by comparing the length of its lines in banks), and their value.' And, by $ 2, that State with the length of its entire it is provided that, for the purpose of lines. Such a tax was essentially an ex- . taxation, personal property “shall in- cise tax upon the capital of the corpora. clude all goods and chattels within the tion, in an attempt to ascertain the just State ; all ships, boats, and vessels be- amount which the corporation should pay longing to inhabitants of this State;" and upon the amount and value of the capital that the personal property of a non-resi- so employed by it in the State, and was dent cannot be taxed unless it has an valid. Western Union Telegraph Co. actual situs in the State. Plaintiff, a v. Massachusetts, 125 U. S. 530. resident of defendant township, was And it has been held, in a State court, taxed on stock in a foreign corporation, that the act of Congress above alluded to, whose boats lying at Benton, in the authorizing telegraph companies to use State, were taxed there. Held, that, as any military or post roads, etc., in any the boats were improperly taxed, the State, does not prevent the giving of ef stock was liable to be taxed by defend- fect, as to such companies, of the State

Graham v. St. Joseph Township, law providing that no foreign corpora(Mich.) 35 N. W. Rep. 808.

tion shall do business without having at 1. Federal Const., art. 1, SS 8, 9, etc.; least one known place of business, and an Patterson on Federal Restraints on State authorized agent therein. It was accordAction, 141-143; Pensacola Tel. Co. v. ingly held that a court of equity will not West. Un. Tel. Co., 96 U. S. 1; W. Un. interfere, by injunction at the suit of a Tel. Co. v. Texas, 105 U. S. 460: W. Un. foreign telegraph company, to prevent a Tel. Co. v. Pendleton, 122 U. S. 347; rival company from obstructing the erecAm. Un. Tel. Co. v. W. Un. Tel. Co., tion of its poles and wires when the bill 67 Ala. 26.

does not show that the complainant has A State statute which authorizes an in- any known place of business or any agent junction to be issued to restrain a cor- in the State, nor that it has acquired any poration, organized under the laws of property or rights of property there. another State, whose taxes are in arrear, American Union Tel, Co. v. West. Un. from prosecuting its business within the Tel. Co., 67 Ala. 26 State until the taxes are paid is void so Telegraph companies may prosecute far as it assumes to confer power upon a their business into any State, upon the court to so restrain a telegraph company public domain of the United States, or which has acccpted the provisions of U. along the military and post roads of the S. Rev. St., $ 5263, from operating its United States, which may have been, or lines over military and post roads of the may hereafter be, declared such by act of United States. West. Un. Tel. Co. v. Congress, and over, under, or across the Massachusetts, 125 U. S. 530. The court navigable streams or waters of the United say: “ We do not deprive the State of the States, on certain conditions, including, power to assess and collect the tax. If a inter alia, a concession by the company resort to a judicial proceeding to collect it of priority to messages of the United is deemed expedient, there remains to the States government at rates to be fixed court all the ordinary means of enforcing annually by the Postmaster-general, a


censes, 1 On the other hand, taxes imposed upon foreign corpora. tions have been sustained as constitutional in such instances as the following: Taxes and license fee regulations imposed upon foreign insurance companies ;' the licensing of foreign corporations doing business within a State; 3 sewing-machine companies manufactur


reservation to the government of the priv- 1. An Alabama statute requiring locoilege of purchasing the lines, etc., of the motive engineers in that State to be excompany at an appraised value, and a amined and licensed by a board appointed written acceptance by the company of the for the purpose, and subjecting offenders restrictions and obligations of the acte to penalty and imprisonment, was held Act of Congress of July 24, 1886, 14 Stat. not to be contrary to the United States at L. 221 (Rev. St. $ 5263 et seq.).

Constitution so far as it affected engineers The act is not limited in its operation engaged on trains running from a point to such military and post roads as are in Alabama to a point in Mississippi. upon the public domain. Pensacola Tel. Smith 2. Alabama, 124 U. S. 465. Co. 2. West. Un. Tel. Co., 96 U. S. I. 2. Paul v. Virginia, 8 Wall. (U. S.) 168;

Congress, by act of June 8, 1872, ch. Ducat v. Chicago, 10 Wall. (U. S.) 410; 335, 17 Stat. at L. 308 (Rev. St. S. 3964 Liverpool Ins. Co. 2. Massachusetts, 10 et seq.), declares all railway lines in the Wall. (U. S.) 566; Doyle 7". Continental United States to be post-roads. Patter. Ins. Co., 94 U. S. 535; Philadelphia Fire

Federal Restraints on State Action, Assoc. v. New York, 92 N. Y. 311; s. C., 141.

I Am. & Eng. Corp. Cas. 1; Philadelphia Under this legislation, it was held that Fire Assoc. 2. New York, 119 U. S. 110; a telegraph company of New York, which s. C., 15 Am. & Eng. Corp. Cas. 421. had secured a right of way, by private 3. Pennsylvania act, June 7, 1879, proarrangement with a railroad company hibiting foreign corporations,except insurowning a line through certain counties in ance companies, which do not invest or Florida, could not be debarred from using use their capital in that State, from keepthe line in said counties by the State of ing an office in that State for the use of Florida. Nor was a monopoly granted by its officers, stockholders, agents, or emFlorida to a Pensacola corporation valid ployees unless it shall have first obtained as against such a foreign corporation. a license therefor by paying one mill on And chis, irrespective of whether certain each dollar of its authorized capital stock, Florida statutory invitation, subsequent is not in violation of U. S. Const, art, 1, to the grant of the monopoly, inviting $ 8,--the commerce clause. -there being foreign corporations into the State, af- no attempt to prohibit the transportation fected the question or not. Pensacola or sale of the corporation's products in Tel. Co. v. West. Un. Tel. Co., 96 U. the States. Pembina Consol. Silver-minS. I.

ing Co. v.Pennsylvania, 125 U. S. 181. Massachusetts Pub. St. C. 13. $ 40, pro- Kentucky Taxing Act Does Not Repeal vide that every railroad and telegraph License Act. --Kentucky act. 1864. Feb. company shall pay annually a tax upon 20 (Myer, Supp. 480), requiring the payits corporative franchise, at a valuation ment of a tax of 6 per cent upon the net thereof equal to the aggregate value of profits of the business done by any exthe shares in its capital stock, after de press company within the State does not ducting from such valuation such portion repeal, either expressly or by implicaas is proportionate to the length of the tion, act, March 2, 1860 (Myer, Supp. 22), line lying without the State ; and also an requiring agents of foreign express comamount equal to the value of the real panies to take out licenses before transestate and machinery located and subject acting business within the State. Woodto local taxation within the State. Held, ward 2. Commonwealth (Ky., 1887), 7 S. that the right to tax telegraph companies, W. Rep. 613. under this statuie, is not impaired by U. Kentucky act, 1870, March 2d, requiring S. Rev. St. SS 5263-5266, relating to foreign express companies doing business telegraph lines over military and post within the State to pay certain fees each roads, under navigable waters, etc. At. year upon renewing their licenses, does torney-general v. West, Un. Tel. Co. not affect the provisions of act, 1860, (Mass.), 33 Fed. Rep. 129. And see Dela- March 2d, which requires each agent of ware Railroad Tax Case, 18 Wall. (U. S.) such companies to take out a license be206: Fargo v. Michigan, 121 U. S. 230; fore doing business. Woodward v. ComPhila., etc., Co. v. Pa., 122 U. S. 326. monwealth (Ky.,1887), 7 S. W. Rep. 613.

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