1. In Erie R. Co. v. State, 31 N. J. L. 531, the court observed: "It is not denied that the corporate existence of a company is recognized, not by right, but of grace, in foreign jurisdictions, nor that each government has the competence to refuse to recognize such existence except on its own conditions. The principle is universally acknowledged. Hence, laws requiring insurance companies and other foreign corporations to file bonds and submit to other exactions, as a prerequisite to their admission in an incorporated capacity into the State. Such laws, when rightfully made, are evidently mere police regulations designed to protect the citizens of the State in which they are enacted from loss or imposition; and on this ground their legality cannot be drawn in question. But a tax law, having revenue for its ob ject, is based upon a principle entirely dif ferent. The right to tax for revenue is the right of the government to take so much of the property of the person or company upon which the tax falls as such government may deem necessary for its public wants. The act of taking the property, therefore, must of necessity be an acknowledgment of the legal status of the person or company whose property is taken. To assert that the company whose property is thus taken has no rights but such as the government taking it chooses to confer is to assert that such company has no title to its property but such as may be conceded to it by the taxing power. It seems to be utterly inconsistent with legal principles, which have always been deemed axiomatic, to hold that a government can recognize the legal existence of a foreign corporation for the purpose of taxation, and at the same time can deny such legal existence for the purpose of depriving it of those rights which belong to every individual or company known to the law. Such a doctrine would obviously offer the entire property of foreign corporations as a prize to the rapacity of any State in whose territories it might be or over which it might happen to be carried."

A foreign corporation is not required, by the Louisiana constitution, to be

licensed by a different mode from that provided for home companies. The constitution is not imperative, but simply permissive of such mode. Such corporation cannot complain that the license claimed is based on the system adopted for home organizations. State v. Liverpool & London & G. Ins. Co. (La. 1888), 4 South. Rep. 504.

2. In McKeen v. County of Northampton, 49 Pa. St. 519, it was held that capital stock owned be a citizen of Pennsylvania, in a manufacturing corporation located in another State, is taxable for State and county purposes. See also Whitsell v. Northampton County, 49 Pa. St. 536; Nashua Savings Bank v. Nashua, 46 N. H. 389; Smith v. Exeter, 37 N. H. 556; Conwell v. Connersville, 15 Ind. 150; Seward v. Rising Sun, etc., Co., 79 Ind. 351; State v. Branin, 3 Zab. (N. J.) 484; State v. Bentley, 3 Zab. (N. J.) 532; Great Barrington v. County Comrs., 16 Pick. (Mass.) 572; Newark City Bank v. Assessor, 30 N. J. L. 13; Dyer v. Osborne, 11 R. I. 321; City and County of San Fransisco v. Fry, 63 Cal. 470; s. c., I Am. & Eng. Corp. Cas. 431. Compare Minot . Philadelphia, etc., R. Co., 18 Wall. (U. S.) 206.

In Sturges v. Carter, 114 U. S. 511, it was decided that stock held by a citizen of Ohio, in a foreign corporation, is taxable, notwithstanding the payment by the corporation of a tax on its property situated in the State.

In San Francisco 7. Mackey, 22 Fed. Rep. 602; s. c., 10 Sawy (C. C.) 431, it was held that the California constitution prohibits double taxation. Where, therefore, the tangible property of a corporation is in Nevada, and is there taxed, the shares cannot be assessed to the holders in California. Compare City, etc., of San Francisco v. Fry, 63 Cal. 490.

3. North Carolina R. Co. v. Alamance Co. Commissioners, 91 N. Car. 454 ; Union Bank v. State, 9 Yerg. (Tenn.) 490; Railroad Co. v. Pennsylvania, 15 Wall. (U. S.) 146.

As to whether a State may impose a tax on the shares of a corporation of its own creation, held by non-citizens,

see State Tax on Foreign-held Bonds; Buchanan v. Smith, 16 Wall. (U. S.) 309; Maltby v. Reading, etc., R. Co., 52 Pa. St. 140.

Statutory Liability of Agent for Taxes. --It is competent for the legislature, in levying a tax upon the gross receipts of the business conducted in the State by a foreign corporation, to require it to be paid by the resident agent; and this liability, on default by him, may be enforced by action against him personally. Alabama v. Sloss (Alabama, 1888), 83 Ala. 93; citing Sumter Co. v. Bank, 62 Ala. 464: "The liability of the agent is not imposed in the nature of a penalty for failure to return the sworn statement, but is the mode provided to collect the taxes."

1. In Leloup v. Port of Mobile, 127 U. S. 640; s. c., 21 Am. & Eng. Corp. Cas. 26, the court, by Bradley, J., observes: "No State has the right to lay a tax on interstate commerce in any form, whether by way of duties laid on the transportation of the subjects of that commerce, or on the receipts derived from that transportation, or on the occupation or business of carrying it on; and the reason is that such taxation is a burden

On

that commerce, and amounts to a regulation of it. which belongs solely to Congress. This is the result of so many recent cases, that citation is hardly neces sary. As a matter of convenient reference, we give the following list: Case of State Freight Tax, 15 Wall. (U. S.) 232; Pensacola Telegraph Co. v. Western Union Telegraph Co., 96 U. S. 1; Mobile v. Kimball, 102 U. S. 691; Western Union Telegraph Co. v. Texas, 105 U. S. 460; Moran v. New Orleans, 112 U. S. 69; s. c., 5 Am. & Eng. Corp. Cas. 311; Gloucester Ferry Co. v. Pennsylvania, 114 U. S. 196; s. c., 13 Am. & Eng. Corp. Cas. 365; Brown v. Houston, 114 U. S. 622; Walling v. Michigan, 116 U. S. 446; Picard v. Pullman Southern Car Co., 117 U. S. 34; s. c., 24 Am. & Eng. R. R. Cas.

3

511; Wabash Railway Co. v. Illinois, 118 U. S. 557; s. c., 26 Am. & Eng. R. R. Cas. 1; Robbins v. Shelby County Taxing District, 120 U. S. 489; s. c., 16 Am. & Eng. Corp. Cas. 1; Philadelphia & Southern Steamship Co. v. Pennsylvania, 122 U. S. 326; s. c., 18 Am. & Eng. Corp. Cas. I; Western Union Telegraph Co. v. Pendleton, 122 U. S. 347; s. c., 18 Am. & Eng. Corp. Cas. 56; Ratterman v. Western Union Telegraph Co., 127 U. S. 411; s. c., 21 Am. & Eng. Corp. Cas. I.”

2. State Freight Tax Cases, 15 Wall. (U. S.) 232; Minot v. Philadelphia, etc., R. Co., 18 Wall. (U. S.) 206; Ogilvie v. Crawford Co. (Iowa), 7 Fed. Rep. 745 ; Walling v. Michigan, 116 U. S. 446; Erie R. Co. v. State, 31 N. J. L. 531; State v. Carrigan, 39 N. J. L. 35; Standard Oil Co. v. Bachelor, 89 Ind. 1; Blount v. Monroe Co., 60 Ga. 61; Appeal Tax Court v. Pullman Car Co., 50 Md. 452.

3. Crandall v. Nevada, 6 Wall. (U. S.) 35; Henderson v. Mayor, 92 U. S. 259; Gloucester Ferry Co. v. Pennsylvania, 114 U. S. 196.

It was held in Hays v. Steamship Co., 17 How. (U. S.) 596, that a vessel registred in New York, plying between Panama and San Fransisco, was not taxable in California; in St. Louis v. Ferry Co., II Wall. (U. S.) 423, that ferry-boats running to a city, but owned in another State, are not taxable in the city as property within it. See also State v. Haight, 30 N. J. L. 428; People v. Comrs., II Alb. L. J. 401; Morgan v. Parham, 16 Wall. (U. S.) 471; Commonwealth v. Hays, 8 B. Mon. (Ky.) 1.

In Gloucester Ferry Co. v. Pennsylvania, 114 U. S. 197, decided in 1885, the United States supreme court held that the business of receiving and landing of passengers and freight in interstate passage is incident to the transportation, and that a State tax on such receiving and landing is a tax on transportation and on commerce inter-State or foreign; and that the ferry company, whose only property

in Pennsylania was the ferry-slip, was not taxable in that State upon its capital stock under pretence of existence in Pennsylvania.

64

Michigan Laws, 1885, No. 153. § 2, provide that "all shares in foreign corporations (except national banks) owned by inhabitants of this State" shall be taxed. Shares in corporations, the property in which is taxable to itself, shall not be assessed to the shareholders." Section 4 provides all corporate property, except where some other provision is made by law, shall be assessed to the corporation as to a natural person, where its principal office is in that State. Section 13, subd. 2, requires each person to set forth, as property liable to taxation, all shares in foreign corporations (except national banks), and their value." And, by § 2, it is provided that, for the purpose of taxation, personal property shall include all goods and chattels within the State; all ships, boats, and vessels belonging to inhabitants of this State;" and that the personal property of a non-resident cannot be taxed unless it has an actual situs in the State. Plaintiff, a resident of defendant township, was taxed on stock in a foreign corporation, whose boats lying at Benton, in the State, were taxed there. Held, that, as the boats were improperly taxed, the stock was liable to be taxed by defendant. Graham v. St. Joseph Township, (Mich.) 35 N. W. Rep. 808.

1. Federal Const., art. 1, §§ 8, 9, etc.; Patterson on Federal Restraints on State Action, 141-143; Pensacola Tel. Co. v. West. Un. Tel. Co., 96 U. S. 1; W. Un. Tel. Co. v. Texas, 105 U. S. 460: W. Un. Tel. Co. v. Pendleton, 122 U. S. 347; Am. Un. Tel. Co. v. W. Un. Tel. Co., 67 Ala. 26.

A State statute which authorizes an injunction to be issued to restrain a corporation, organized under the laws of another State, whose taxes are in arrear, from prosecuting its business within the State until the taxes are paid is void so far as it assumes to confer power upon a court to so restrain a telegraph company which has accepted the provisions of U. S. Rev. St., § 5263, from operating its lines over military and post roads of the United States. West. Un. Tel. Co. v. Massachusetts, 125 U. S. 530. The court say: We do not deprive the State of the power to assess and collect the tax. If a resort to a judicial proceeding to collect it is deemed expedient, there remains to the court all the ordinary means of enforcing

its judgment-executions, sequestration, and any other appropriate remedy in chancery."

If it could be ascertained what telegrams were confined wholly within the State, a tax on those might be imposed by it. The privilege carries no exemption from the ordinary burdens of taxation in a State within which they may own or operate lines of telegraph. West. Un. Tel. Co. v. Texas, 105 U. S. 460; West. Un. Tel. Co. v. Massachusetts, 125 U. S. 548.

The laws of Massachusetts imposed a tax upon the Western Union Telegraph Company on account of the property owned and used by it within that State, the value of which is to be ascertained by comparing the length of its lines in that State with the length of its entire lines. Such a tax was essentially an ex-. cise tax upon the capital of the corporation, in an attempt to ascertain the just amount which the corporation should pay upon the amount and value of the capital so employed by it in the State, and was valid. Western Union Telegraph Co. v. Massachusetts, 125 U. S. 530.

And it has been held, in a State court, that the act of Congress above alluded to, authorizing telegraph companies to use any military or post roads, etc., in any State, does not prevent the giving of ef fect, as to such companies, of the State law providing that no foreign corporation shall do business without having at least one known place of business, and an authorized agent therein. It was accordingly held that a court of equity will not interfere, by injunction at the suit of a foreign telegraph company, to prevent a rival company from obstructing the erection of its poles and wires when the bill does not show that the complainant has any known place of business or any agent in the State, nor that it has acquired any property or rights of property there. American Union Tel. Co. v. West. Un. Tel. Co., 67 Ala. 26

Telegraph companies may prosecute their business into any State, upon the public domain of the United States, or along the military and post roads of the United States, which may have been, or may hereafter be, declared such by act of Congress, and over, under, or across the navigable streams or waters of the United States, on certain conditions, including, inter alia, a concession by the company of priority to messages of the United States government at rates to be fixed annually by the Postmaster-general, a

1

3

reservation to the government of the privilege of purchasing the lines, etc., of the company at an appraised value, and a written acceptance by the company of the restrictions and obligations of the act. Act of Congress of July 24, 1886, 14 Stat. at L. 221 (Rev. St. § 5263 et seq.).

The act is not limited in its operation to such military and post roads as are upon the public domain. Pensacola Tel. Co. v. West. Un. Tel. Co., 96 U. S. 1.

Congress, by act of June 8, 1872, ch. 335, 17 Stat. at L. 308 (Rev. St. §. 3964 et seq.), declares all railway lines in the United States to be post-roads. Patterson, Federal Restraints on State Action,

141.

Under this legislation, it was held that a telegraph company of New York, which had secured a right of way, by private arrangement with a railroad company owning a line through certain counties in Florida, could not be debarred from using the line in said counties by the State of Florida. Nor was a monopoly granted by Florida to a Pensacola corporation valid as against such a foreign corporation. And this, irrespective of whether certain Florida statutory invitation, subsequent to the grant of the monopoly, inviting foreign corporations into the State, affected the question or not. Pensacola Tel. Co. v. West. Un. Tel. Co., 96 U. S. I.

Massachusetts Pub. St. c. 13. § 40, provide that every railroad and telegraph company shall pay annually a tax upon its corporative franchise, at a valuation thereof equal to the aggregate value of the shares in its capital stock, after deducting from such valuation such portion as is proportionate to the length of the line lying without the State; and also an amount equal to the value of the real estate and machinery located and subject to local taxation within the State. Held, that the right to tax telegraph companies, under this statute, is not impaired by U. S. Rev. St. SS 5263-5266, relating to telegraph lines over military and post roads, under navigable waters, etc. At torney-general 7. West. Un. Tel. Co. (Mass.), 33 Fed. Rep. 129. And see Delaware Railroad Tax Case, 18 Wall. (U. S.) 206: Fargo v. Michigan, 121 U. S. 230; Phila., etc., Co. v. Pa., 122 U. S. 326.

1. An Alabama statute requiring locomotive engineers in that State to be examined and licensed by a board appointed for the purpose, and subjecting offenders to penalty and imprisonment, was held not to be contrary to the United States Constitution so far as it affected engineers engaged on trains running from a point in Alabama to a point in Mississippi. Smith 7. Alabama, 124 U. S. 465.

2. Paul v. Virginia, 8 Wall. (U. S.) 168; Ducat v. Chicago, 10 Wall. (U. S.) 410; Liverpool Ins. Co. v. Massachusetts, 10 Wall. (U. S.) 566; Doyle v. Continental Ins. Co., 94 U. S. 535; Philadelphia Fire Assoc. v. New York, 92 N. Y. 311; s. c., I Am. & Eng. Corp. Cas. 1; Philadelphia Fire Assoc. v. New York, 119 U. S. 110; s. c., 15 Am. & Eng. Corp. Cas. 421.

3. Pennsylvania act, June 7, 1879, prohibiting foreign corporations, except insurance companies, which do not invest or use their capital in that State, from keeping an office in that State for the use of its officers, stockholders, agents, or employees unless it shall have first obtained a license therefor by paying one mill on each dollar of its authorized capital stock, is not in violation of U. S. Const. art, I,

8,-the commerce clause.—there being no attempt to prohibit the transportation or sale of the corporation's products in the States. Pembina Consol. Silver-mining Co. v.Pennsylvania, 125 U. S. 181.

Kentucky Taxing Act Does Not Repeal License Act.-Kentucky act, 1864, Feb. 20 (Myer, Supp. 480), requiring the payment of a tax of 6 per cent upon the net profits of the business done by any express company within the State does not repeal, either expressly or by implication, act, March 2, 1860 (Myer, Supp. 22), requiring agents of foreign express companies to take out licenses before transacting business within the State. Woodward v. Commonwealth (Ky., 1887), 7 S. W. Rep. 613.

Kentucky act, 1870, March 2d, requiring foreign express companies doing business within the State to pay certain fees each year upon renewing their licenses, does not affect the provisions of act, 1860, March 2d, which requires each agent of such companies to take out a license before doing business. Woodward v. Commonwealth (Ky., 1887), 7 S. W. Rep. 613.