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(c) Eminent Domain.--The power of eminent domain granted to a corporation of one State is not such a privilege as will be extended by comity alone to the corporation's transactions in another State.' But a State may confer upon a foreign corporation the right of eminent domain ;? and, by consent of the legislature, a foreign corporation may exercise it as a quasi successor of another corpo. ration to which it was originally granted.3 So, the same right may be conferred upon a consolidated company composed in part of a foreign corporation.4
v. Drew Theol. Sem.. 95 N. Y. 166; Mora- the delectus personarum is of little more wetz Corp. (2d Ed.) $ 961.
than theoretical importance, and is the 1. Eminent Domain. - Middle Bridge Co. least determining element in the more v. Marks, 26 Me. 326 ; State v. Boston, common cases where the power is conetc., R. Co., 25 Vt. 433. Compare Balti- ferred. A legislative contemplation that more, etc., R. Co. v. P.W. & Ky. R. Co., the road would not only connect but unite 17 W. Va. 812; s. C., 10 Am. & Eng. R. with roads without the State shows that R. Cas. 444.
power to sell was not confined to domes2. Lewis on Eminent Domain (1888), S tic purchasers. 242 : State of Ohio 7. Sherman, 22 Ohio An act is constitutional, although the St. 434 ; Morris Canal & Bkg. Co. 7'. lands appropriated are to be used by the Townsend, 24 Barb. (N. Y.) 658 ; Matter foreign corporation for the maintenance of Townsend, 39 N. Y. 171; New York of a navigable canal which runs along & Erie R. Co. v. Young, 33 Pa. St. 175; the border of the State, but without its Dodge v. Council Bluffs, 57 Iowa, 560; limits. Re Peter Townsend, 39 N. Y. Abbott v. N. Y., etc., R. Co., 145 Mass. 171, cited by the Massachusetts court in 450 ; s. C., 33 Am. & Eng. R. R. Cas. 146; Abbott v. N. Y. & N. E. R. Co.. 145 Gray 2. St. Louis, etc., R. Co., 81 Mo. Mass. 450 ; s. C., 33 Am. & Eng. R. R. 126.
Cas. 146. In Iowa, it was held that, although a 4. Toledo, etc., R. Co. v. Dunlap. 47 foreign corporation did not have power Mich. 456, 465 : Lewis on Eminent Do. to condemn land in that State, a domestic main (1888), S 242. Constitutional provicorporation, organized at the instance of sions in some States forbid the power to a foreign corporation, could condemn foreign corporations. Lewis on Eminent land for the purpose of leasing it to such Domain (1888), $ 242. The Nebraska con. foreign corporation. Lower v. Chi. & stitution denies the power to a foreign Quincy R. Co., 59 Iowa, 563. The Iowa corporation unless it organizes as a corstalute conferred power on “railroad poration under laws of that tate; and it corporations organized under the laws of was held that it could not proceed as lesthis State.” Held, necessarily, a denial see or otherwise of a domestic corporaof the right to foreign corporations. Hol- tion. State v. Scott, 22 Neb. 613 (1888); bert v. St. Louis, etc., R. Co., 45 Iowa, 23. Trester v. Missouri Pac. R. Co. (Neb.),
3. Abbott v. N. Y. & N. E. R. Co., 36 N. W. Rep. 502. 145 Mass. 450 ; s. C., 33 Am. & Eng. R. R. In Morris Canal & Bkg. Co. v. TownCas. 146.
send, 24 Barb. (N. Y.) 658, the legislature The defendant's grantor, a foreign cor- authorized the taking by the foreign corporation, purchased the franchise of the poration. The statute was held constitu. Midland R. Co., a Massachusetts corpora- tional. In Abbott v. N. Y. & New Eng. tion with general powers, and located in R., 145 Mass. 450 (1888); s. C., 33 Am. & March, 1866; held, that by a course of Eng. R. R. Cas. 146, it was held thal, legislation of nearly 20 years, Massachu- although the power to take land by the setts had dealt with defendant and its right of eminent domain, which has been predecessors as having good title to the granted by the legislature to a domestic road, and as having possessed the powers railroad corporation, will not pass to a assumed by them; and under such legis. foreign corporation succeeding by deed lation the location of the road bed was to the rights and powers of the domestic valid. The court say that, in the transfer corporation, without the assent of the of the power, the legislative consent may legislature, such assent may be gathered be inferred somewhat more readily than by implication from a series of acts of when the whole question is new ; since the legislature.
(d) Lease.—A foreign corporation may take a lease of premises. for its business. 1
(e) Trustees.-A foreign corporation may be made a trustee of property real and personal.2
6. POWERS MADE THOSE OF DOMESTIC CORPORATIONS.-In some States, the statutes regulating the management and transactions of foreign corporations subject them to the same duties, liabilities, and restrictions as domestic corporations, and confer upon them substantially the same powers.3
7. POWERS AS TO PERSONAL PROPERTY.—The power of foreign corporations, except as limited by their charters, to acquire and deal with personal property is unlimited.4
V. Constitutional Rights. - Those rights guaranteed by the Federal Constitution-protection of property, hearing of claims according to law, non-impairment of contracts, taking of property only by due process of law-belong to corporations independently of the franchise of acting in a corporate capacity and as an association of individuals who are citizens of the United States, whether recognized as a corporation or not.5
1. NOT CITIZENS UNDER FEDERAL CONSTITUTION.-A State having the power to entirely exclude foreign corporations, it follows.
1. Lease.—A foreign corporation may courts of that State appointed such trustake a lease of premises for its business. tee, under which the corporation took the Every corporation may contract; and, charge and management of all the real having purchased and paid for real estate, estate devised, including real estate in the vendor cannot take it back at his Illinois, filed a bill in Illinois to be appleasure, nor make the contract null and pointed trustee to carry out the provisions void as to him. The State, by virtue of of the will. But it was held that the its transcendental power, may escheat it. foreign corporation could not hold real esBut this principle does not extend to a tate in Illinois in trust, and that the bill lease or to a contract, express or implied, was properly dismissed. McAllister and for the purpose of enabling a corporation Sheldon, JJ., dissented. to carry on its business. Steamboat Co. 3. New York Penal Code, 1881, § 613;. v. McCutcheon, 13 Pa. St. 13. See North- Pennsylvania, Purd. Dig. 1883, title Cor. ern Trans. Co. v. Chicago, 7 Biss. (C. C.) porations, $ 132; Colorado Gen. Stat. 45; Black v. Delaware & R. Canal Co., 182, ch. 19, $ 24. 22 N. J. Eq. I30, 422.
The Illinois provision, Ill. Rev. Stat. In Baltimore, etc., Steamboat Co. v. (1 Starr & Curtis Stat.) ch. 32, § 26, has McCutcheon, 13 Pa. St. 13. Coulter, J., been held to imply that foreign and doobserved: “Some things lie too deep, in mestic corporations have the same powers. the common-sense and common honesty Barnes v. Suddard, 117 Ill. 237; Santa of mankind, to require either argument Clara Female Academy v. Sullivan, 116 or authority to supply them."
Ill. 375; Stevens v. Pratt, 101 Ill. 217. 2. Farmers' Loan & Trust Co. v. Chi. See also constitution of Arkansas. cago, etc., R. Co. (Ind.), 27 Fed. Rep. 4. Am. Mut. Life Ins. Co. v. Owen, 81 146.
Mass. 491; Lumbard v. Aldrich, 8 N. H. In United States Trust Co. v. Lee, 73 31; Thompson v. Waters, 25 Mich. 225; Ill. 142 (1874), the Illinois court held that Page v. Heineberg, 40 Vt. 81. a foreign corporation cannot purchase and 5. Importing Co. of Georgia v. Locke, hold real estate in Illinois beyond what is 50 Ala. 335; Society Prop. Gosp. v. New necessary for the transaction of its busi- Haven, 8 Wheat. (U. S.) 483; Lafayette ness or the collection of its debts, either Ins. Co. v. French, 18 How. (U. S.) 407; for its own benefit or in trust for others. Doyle v. Continental Ins. Co., 94 U. S.
In the case just cited, a New York cor- 539; Barclay v. Talman, 4 Edw. Ch. (N. poration, with power to act as trustee in Y.) 123; Vermont v. Soc. Prop. Gosp., I carrying out the provisions of a will de- Paine (C. C.), 653; Merrick v. Van Santvising real estate, and which was by the voord, 34 N. Y. 208.
that such corporations are not citizens within the purview of the Constitution of the United States, and are not entitled to privileges and immunities as citizens of the several States. 1
(a) Discrimination.-A State may therefore discriminate against corporations chartered by another State, and in favor of its own; and such discrimination is not against the individual citizens of the other State.
1. Paul v. Virginia, 8 Wall. (U. S.) 177; existence of the corporation or the exerDucat v. Chicago, 10 Wall. (U. S.) 410; cise of its powers is ' prejudicial to their Railway Co. v. Whitton, 13 Wall. (U. S.) interests or repugnant to their policy.' 270; Warren Mfg. Co. v. Ætna Ins. Co., And the court, speaking by Mr. Justice 2 Paine (C. C.), 501; Liverpool Ins. Co. Field, said: “Having no absolute right of v. Massachusetts, 10 Wall. (U. S.) 566; recognition in other States, but depending Doyle v. Continental Ins. Co., 94 U. S. for such recognition and the enforcement 535; Cooper Mfg. Co. v. Ferguson, 113 of its contracts upon their assent, it fol. U. S. 727; Philadelphia Fire Assoc. v. lows, as a matter of course, that such asNew York, 119 U. S. 110; s. C., 15 Am. sent may be granted upon such terms and & Eng. Corp. Cas. 421.
conditions as those States inay think Kentucky act, 1860, March 2 (Meyer proper to impose. They may exclude Supp. 228), requiring the agents of foreign the foreign corporation entirely; they may express companies doing business within restrict its business to particular localities, the State to first obtain a license therefor or they may exact such security for the perdoes not violate the provision of the Fed- formance of its contracts with their citieral Constitution that “The citizens of zens as in their judgment will best proeach State shall be entitled to all the iin- mote the public interest. The whole munities of citizens of the several States,” matter rests in their discretion.'” a corporation not being included in the Corporations are not citizens, within the term “ citizen.” Woodward v. Common- meaning of the clause of the United States wealth (Ky. 1887), 7 S. W. Rep. 613. Constitution declaring that the citizens of
2. Ducat v. Chicago. 10 Wall. (U. S.) each State shall be entitled to all privi. 414; Paul v. Virginia, 8 Wall. (U.S.) 168; leges and immunities of citizens in the Insurance Co. v. New Orleans, i Woods several States. Art. IV, § 2, cl. 1. (C. C.), 85; Bank of Augusta v. Earle, 13 A private corporation is indeed included Pet. (U. S.) 519; Lafayette Ins. Co. v. under the designation of “person" in French, 18 How. (U. S.) 404; Liverpool Amendment XIV, $1. The provisions in Ins. Co. v. Massachusetts, 10 Wall. (U.S.) said section that “ No State shall deny to 566; Doyle v. Continental Ins. Co., 94 any person within its jurisdiction the U. S. 535; Cooper Mfg. Co. v. Ferguson, equal protection of the laws” do not 113 U. S. 727; s. C., 8 Am. & Eng. Corp. prohibit a State from requiring, for the Cas. 178; Philadelphia Fire Assoc. v. admission within its limits of a corporaNew York, 119 U. S. 110; s. C., 15 Am. tion of another State, such conditions as & Eng. Corp. Cas. 421.
it chooses. The object of the amendment In Philadelphia F. Assoc. v. New York, is to prevent any person or class of per119 U. S. 110; s. C., 15 Am. & Eng. Corp. sons from being singled out as a special Cas. 421, Blatchford, J., observed, refer- subject for discriminating and hostile legisring to Paul v. Virginia, 8 Wall. (U. S.) lation. The equal protection is only such 168: “ The view announced was that accorded to similar associations within the corporations are not citizens within the jurisdiction of the State. A foreign corclause first cited, on the ground that the poration is not within the jurisdiction. privileges and immunities secured to the * The office it hires is within such juriscitizens of each State, in the several States, diction, and, on condition that it pays the are those which are common to the citi- required license tax, it can claim the same zens of the latter States, under their con- protection in the uses of the office that any stitutions and laws, by virtue of their be- other corporation having a similar office ing citizens; and that, as a corporation may claim. It would then have the equal created by a State is a mere creation of protection of the law so far as it had any. local law, even the recognition of its exist- thing within the jurisdiction of the State; ence by other States, and the enforcement and the constitutional amendment requires of its contracts made therein, depend nothing more. The State is not prohibpurely on the comity of those States-a ited from discriminating in the privileges comity which is never extended where the it may grant to foreign corporations as a
(6) Citizenship Assumed for Purposes of Federal Jurisdiction.For the purpose of jurisdiction, it is conclusively presumed that all the stockholders are citizens of the State which by its laws created the corporation. The fact that some of them are not citizens of such State is not material.2
(c) Standing as Citizens in State Courts.—The same construction of the citizenship of a foreign corporation seems to have been made in a suit in a State court—that, for purposes of suing and being sued, a corporation has the same rights as the citizens of which it is composed, who are presumed to be citizens of the State which incorporated it.3 condition of their doing business or hiring presumed, for purposes of jurisdiction, offices within its limits,” etc. Corpora- that all the stockholders are citizens of the tions lawful in their domicil may be un- State which, by its law, created the corpowelcome; as, a lottery company. And ration. Muller v. Dows, 94 U. S. 445. even where the business of the foreign It is well settled that a corporation crecorporation is lawful in the State it wishes ated by a State is a citizen of the State, to enter, the State may wish to limit their within the meaning of those provisions of number or regulate their business pursu- the Constitution and statutes of the United ant to the policy governing similar domes- States which define the jurisdiction of the tic corporations. “ The only limitation Federal courts. State of Wisconsin v. upon this power of the State to exclude a Pelican Ins. Co., 8 Sup. C. Rep. (U. S. foreign corporation from doing business 1880) 1370. within its limits or hiring offices for that A corporation, for jurisdictional purpurpose, or to exact conditions for allow- poses, is a citizen of the State by which it ing the corporation to do business or hire was created, even if all its business is offices there, arises where the corporation transacted elsewhere and all its offices is in the employ of the Federal govern- and places of business are outside of the ment, or where its business is strictly com- State. Pacific R. Co. v. Missouri Pac. merce, interstate or foreign. The con- R. Co. (Kan.), 23 Fed. Rep. 565. See trol of such commerce being in the Fed- Paul v. Virginia, 8 Wall. (U. S.) 177; Ineral government, is not to be restricted by surance Co. v. Francis, 11 Wall. (U. S.) State authority.” Pembina Mining Co. v. 210; Ohio, etc., R. Co. v. Wheeler, I Pennsylvania, 125 U. S. 181.
Black (U. S.), 286; Louisville, etc., R. Co. Conditions of entry may be reasonable 71. Letson, 2 How. (U S.) 514: Marshail z'. or unreasonable. They are absolutely in Baltimore, etc., R. Co., 16 How. (U. S.) discretion of the legislature. Hartford 314; Lafayette Ins. w. French, 18 Fire Ins. Co. V. Raymond (Mich.), 38 How. (U. S.) 404; Covington Drawbridge N. W. Rep. 482.
Co. v. Shepherd, 20 How. (U. S.) 227; 1. In Bank v. Deveaux, 5 Cranch (U.S.), Railway Co. v. Whetton, 13 Wall. (U.S.) 61, Marshall, C. J., said: · That invisible. 283; Railroad Co. v. Harris, 12 Wall. intangible, and artificial being, that mere (U. S.) 65; Eaton v. St. Louis, etc., Co. legal entity, a corporation aggregate, is (Mo.), 7 Fed. Rep. 139. So, also, a corpo. certainly not a citizen, and consequently ration chartered by a foreign State or cannot sue or be sued in the courts of the country may be treated as a citizen or United States unless the rights of the subject of such State or country. Steammembers in this respect can be exercised ship Co. v. Tugman, 106 U. S. 118. in their corporate name;" and decided 2. Louisville, etc., R. Co. v. Letson, 2 that the character of the individuals com- How. (U. S.) 497; Stafford v. Am. Mills posing the corporation could be looked to. Co., 13 R. I. 311. See also, infra, this Bank of Augusta v. Earle, 13 Pet. (U. S.) title, ACTIONS; REMOVAL OF CAUSES. 586.
3. B. & O. R. Co. v. Carey, 28 Ohio A corporation itself can be a citizen of no St. 208; Shaft v. Phænix Life Ins. Co., State, in the sensein which the word "citi- 67 N. Y. 544 ; Ziegler v. Central, etc., zen" is used in the Constitution of the R. Co., II Nev. 350; Railroad Co. v. United States. A suit may be brought in the Harris, 12 Wall. (U. S.) 65 ; Covington Federal courts by or against a corporation, Drawbridge Co. v. Shephard, 20 How. but in such case it is regarded as a suit (U. S.) 232; North Noonday, etc., R. brought by or against the stockholders of Co. v. Orient, etc., Co. (Cal.), i Fed. the corporation; and it is conclusively Rep. 522; Farmers', etc., Co. v. Maquil
2. INTERSTATE COMMERCE, POLICE LAWS, ETC.-Foreign corporations, in the course of their business dealings, are frequently confronted with State legislation which, it may be claimed, amounts to an attempted regulation of interstate commerce, within the constitutional prohibition. The subject is an extended one, and cannot be fully treated here. (See INTERSTATE COMMERCE; TAXATION, etc.). Most of these questions arise where a State imposes upon railroads, insurance companies, and other foreign corporations taxes and license fees. In other instances, the regulation of the freight charges of common carriers is undertaken,? or it is alleged that the police laws of the State amount to an interference with commerce. The decisions upon the latter branch of the subject are treated in a slightly different application under other portions of this title.3 It is settled that issuing a policy of insurance is not a transaction of commerce ; 4 and, in the latest development of this principle, it seems that the power of a State to impose upon foreign insurance companies the most exacting conditions is practically unlimited, and is regarded as almost exclusively a matter of State policy.
But these and similar decisions expressly recog. nize that a State act which imposes limitations upon the power of foreign corporations to make contracts within the State for the carrying on of commerce between the States would infringe upon the exclusive power of Congress. lan, 3 Dill. (C. C.) 379; Minnett v. Mil- tracts between parties, which are comwaukee & St. Paul R. Co., 3 Dill. (C. C.) pleted by their signature and the transfer 460.
of the consideration. Such contracts are 1. See, in fra, this title, LIABILITY TO not interstate transactions, though the TAXATION.
parties may be domiciled in different 2. See FREIGHT.
States. The policies do not take effect 3. See, supra, this title, STATUTORY are not executed contracts-until delivLIMITATIONS UPON POWERS; see, infra, ered by the agent in Virginia. They are this title, LIABILITY TO TAXATION. then local transactions, and are governed
Paul v. Virginia, 8 Wall. (U. S.) by the local law. They do not constitute 168; Ducat v. Chicago, 10 Wall. (U. S.) a part of the commerce between the 410; Liverpool Ins. Co. v. Massachusetts, States any more than a contract for the 10 Wall. (U. S.) 566; Doyle v. Continental purchase and sale of goods in Virginia Ins. Co., 94 U. S. 535: Philadelphia Fire by a citizen of New York while in Assoc. v. New York, 119 U. S. 110; s. c. Virginia would constitute a portion of 15 Am. & Eng. Corp. Cas. 421.
such commerce." In Paul v. Virginia, 8 Wall. (U. S.) 5. Philadelphia Fire Assoc. v. New 168, the court observed, by Field, J.: York, 119 U.S. 110; S. C., 15 Am. & Eng. “ Issuing a policy of insurance is not a Corp. Cas. 421. transaction of commerce. The policies 6. In Cooper Mfg. Co. v. Ferguson, are simple contracts of indemnity against 113 U. S. 727; s. C., 8 Am. & Eng. Corp. loss by fire, entered into between the cor- Cas. 178, the facts were that a corporaporations and the assured, for a consider- tion of Ohio contracted in Colorado to ation paid by the latter. These contracts manufacture machinery in Ohio to be
not articles of coinmerce in any there delivered for transportation to the proper meaning of the word. They are purchasers in Colorado. The majority of not subjects of trade and barter, offered the court, while reaffirming the principle in the market as something having an stated in the text, based its decision upon existence and value independent of the the fact that this did not amount to a parties to them. They are not com- transaction of business, within the Colomodities, to be shipped or forwarded from rado statute regulating foreign corporaone State to another, and then put up for tions. But Justices Matthews and Blatchsale. They are like other personal con- ford, in a separate concurring opinion,