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§ 1217. The failure of a corporation to comply with the statute requiring foreign corporations, before they do business in a state, to file in the office of the secretary a certificate, is a good defense to an action on a contract sued upon by said corporation before complying with the statute, even though the corporation do not engage in general business within the state, or assume to use its corporate powers in any other instance than with reference to the particular contract sued upon. Cooper Mfg. Co. v. Ferguson,* 4 Fed. R., 498.
$ 1218. Where a state statute provides that no foreign insurance company shall do business within the state unless it agrees that service of process upon its designated agent in the state shall be considered service on the company, an agreement to that effect applies as well to the process of the federal courts within the state as to that of the state courts. Knott l'. Southern Life Ins, Co., 2 Woods, 480.
$ 1219. A statute of the state of Indiana, prohibiting foreign insurance and other corporations from doing business in that state until they had first conformed to certain regulations made by such statute, does not prohibit the soliciting in Indiana of subscriptions to the capital stock of a foreign insurance company. Payson v. Withers, 5 Biss., 269 (SS 215219).
$ 1220. Limitations.- A foreign corporation whose members all reside beyond the seas is within the exception of the statute of limitations. Society for Propagation of the Gospel v. Town of Pawlet, 4 Pet., 502.
§ 1221. A judgment rendered in one state against a corporation of another state is not valid in the state of the corporation's domicile, unless a judgment be recovered there upon it. Sumner v. Marcy,* 3 Woodb. & M., 10.5.
$ 1222, Becoming a corporation of another state.- An act of the legislature authorizing a foreign railway corporation to construct a road in a state does not incorporate such com. pany in the latter state, Callahan v. Louisville & N. R. Co., 11 Fed. R., 539. See SS 1116, 1118, 1119, 1121.
& 1223. A foreign corporation that leases a road in a state does not thereby become a domestic corporation of such state. Ibid.
$ 1224. A corporation which goes into another state and leases the property of another company situate in such state, and operates it as such company would operate it if the lease had not been made, does not thereby become a citizen of such state. Railroad Co. v. Koontz, 14 Otto, 13.
$ 1225. The legislature of Alabama created a railroad corporation, with power to extend its road into other states, under such restrictions and with such privileges as such states might impose or grant. The legislature of Mississippi passed an act recognizing the corporation created by Alabama, approving and adopting the provisions of the incorporating act of Alabama, and conferring the privileges granted by it, and authorizing the company to construct its road over the territory of that state. It provided that the corporation might sue and be sued in the courts of the state in the same manner and form as corporations of the state. It declared that process should be served on the president, secretary, treasurer, or any other member of the board of directors, or upon any agent of the corporation within the state. It required the company to designate such an agent. It was held that this act did not create the corporation a corporation of Mississippi, and further, that service of procéss on the agents of the corporation in Mississippi, in a suit against it by a corporation of the same state, could not give a United States court jurisdiction. So. & Atlantic Tel. Co. v. New Orleans, etc., R. Co.,* 2 Cent. L. J., 88.
$ 1226. Neither by running its cars in another state from that in which it is incorporated and domiciled, nor by appointing agents to do its business and make its contracts in such foreign state, does a railroad corporation become a resident therein. It still continues to reside in the state where it was incorporated, and does not depart therefrom. (Per Hunt and FIELD, JJ.) Tioga Railroad v. Blossburg & Corning Railroad, 20 Wall., 149.
$ 1227. Where the act of a state provided for the organization and incorporation of a company it thereby became a corporation of that state, and in that state is a citizen thereof for the purposes of suit, although the same persons, by the same corporate name, have been incorporated with the same powers and for the same object by another state; but when the act does not create the corporation, but recognizes it as already existing by the laws of another state, and extends to it like powers (or such of them and with such limitations and on sucb conditions as may be named) as are given it by the laws of the state incorporating it, such act must be construed to be only a license enlarging the field of operations of the company; and such company, upon extending its operations under such act into the state passing such an act, does not become a corporation of that state, but goes there as the corporation of another state, liable to be sued in the state embracing the new field of its operations, but shorn of its qualities as a corporation of another state. Missouri, K. & T. R’y Co. v. Texas & St. L. R'y Co., 10 Fed. R., 497 (SS 1552–55).
1228. An Indiana railway company leased an Illinois railroad. Some doubt being expressed as to the validity of the lease, the Illinois legislature passed an act providing that “The said lessees, their associates, successors and assigns, shall be a railroad corporation in this state under the said style of The Indianapolis & St. Louis Railroad Company,' and shall possess the same or as large powers as are possessed by said lessor corporation and such other powers as are usual to railroad corporations. Said Indianapolis & St. Louis Railroad Company may, and are hereby authorized to, extend said line of road from any point on the same between the cities of Pana and Litchfield, on said road, or from either of said points, westward to the Mississippi river opposite Louisiana, or any point below not exceeding fifteen (15) miles, in the state of Missouri, with a branch thereof to the city of Quincy, in the state of Illinois, and the same to connect with the railroad bridge over said river at said city of Quincy.” Held, that this was more than a mere license to an Indiana corporation to exert its corporate powers and enjoy its corporate rights and privileges in another state. It makes the lessee company sufficiently an Illinois company to be subject to taxation by that state. Railroad v. Vance, 6 Otto, 457.
$ 1229. Right to sue in federal court.— A state cannot deprive a foreign corporation doing business within its borders of the right to institute its litigation in, or remove it to, the federal courts. Doyle v. Continental Ins. Co., 4 Otto, 542.
$ 1230. But where a foreign corporation is granted a license to do business in a state upon condition that it will not institute its litigation in, or remove it to, a federal court, the state may revoke its license for a failure or refusal to comply with such condition. (BRADLEY, SWAYNE and MILLER, JJ., dissenting.) Ibid.
$ 1231. A corporation created by the laws of one state has the right to maintain an action in the federal courts, or in the courts of other states, the same as natural persons. Insurance Co. v. The “C. D., Jr.," 1 Woods, 73.
$ 1232. A state has authority at any time to declare that foreign insurance companies shall not transact business within its limits, for a foreign corporation has no constitutional right to do business there. A state has also the power to declare that if any foreign insurance company shall remove any case from its state court into the federal courts, it shall be the duty of the secretary of state immediately to cancel its license to do business within the state. (BRADLEY, SWAYNE and MILLER, JJ., dissent from the last proposition.) Doyle v. Continental Ics. Co., 4 Otto, 535.
$ 1233. Saits against.— Although it is true in some sense that a corporation has no existence beyond the jurisdiction of the district or state creating it, yet it is competent for the legislature of a state to authorize the commencement of a suit by service of process upon the president, secretary or treasurer of a foreign corporation, having a place of business or making contracts within the state. Weymouth v. Washington, Georgetown, etc., R. Co., * 1 MacArth., 19.
$ 1234. A foreign corporation may be “found," within the meaning of the judiciary act, and served with the process of a federal court, in a state other than that in which it was created. Knott v. Southern Life Ins. Co., 2 Woods, 481.
$ 1235. A corporate body created by the law of a state can have no corporate existence beyond the limits of the territory within which the law creating it can operate. It cannot be sued in the federal courts in another state, even where an attachment is levied on its property in that state and its president served with process there. . Day v. Newark India-Rubber Manuf'g Co., 1 Blatch., 628.
$ 1236. A corporation created by the laws of another state, although it may be associated with a corporation in the state where suit is brought, and their interests may be common, will, however, be recognized as being within the jurisdiction of a federal court. Chicago & N. W. R. Co. v. Chicago & Pacific R. Co., 6 Biss., 219 (SS 1556-58).
$ 1237. The actual appearance of a foreign corporation as a defendant gives to a court the same right to grant a proper decree upon the case made that it would have the right to make under like circumstances against a natural person proceeded against for the same cause of action. Winans v. McKean R. & Nav. Co., 6 Blatch., 221.
$ 1238. A federal circuit court, sitting in Indiana, is powerless to grant an injunction against a corporation in Michigan. A corporation cannot be sued out of the state in which it is established, and in which its functions are exercised. Northern Indiana R. Co. v. Michigan Central Railroad,* 5 McL., 444.
$ 1289. A foreign insurance company, having an agent and place of business in Ohio, is amenable to process in that state, under a statute of the Ohio legislature providing that “where the principal office of such insurer is located out of this state, in all suits instituted by virtue of this act, the service of process upon the agent of such insurer for the time being, in the county in which such contract shall be made, shall be as effectual as though the same was made upon the principal;” and under another statute declaring that the summons may be served on the president or other chief officer, or any clerk, secretary, treasurer, director or agent of such foreign corporation. French v. Lafayette Ins. Co., 5 McL., 461.
$ 1240. A foreign insurance company was doing business in Pennsylvania under authority of that state, and under a stipulated agreement that any legal process affecting the company, served on the insurance commissioner, or the party designated by bim, or the agent specified by the company to receive service of process, should have the same effect as if served personally on the company within the state. The term “process” was stated in this agreement to include any writ of summons, etc., issued in any proceeding brought in any court of the commonwealth having jurisdiction of the subject-matter. It was held that service of process on the agent of the corporation within the state according to the agreement, in a suit by a citizen of the state, gave the circuit court jurisdiction of the parties, notwithstanding the act of congress providing that no suit shall be brought by any original process against any person whọ shall not be an inhabitant of or found within the district at the time of serving the writ. Ex parte Schollenberger, 6 Otto, 369.
$ 1241. A corporation has no legal existence outside of the limits of the state creating it, and cannot be sued outside of such state, except by express legislation, authorizing such suits against foreign corporations having agents within the state conducting the general business for which it was organized. Lathrop v. Union Pac. R. Co., * 1 MacArth., 234.
$ 1242. Under an act of congress, in reference to the District of Columbia, which declares that “in actions against foreign corporations, doing business in the District, all process may be served on the agent of such corporation, or person conducting its business, or in case he is absent and cannot be found, by leaving a copy at the principal place of business in the District,” no foreign corporation can be sued in the District, unless it has an established place of business there. Dallas v. Railroad Co.,* 2 MacArth., 146.
$ 1243. British corporations.— The Society for the Propagation of the Gospel in Foreign Parts is to be considered as a private eleemosynary corporation, although it was created by a charter from the crown for the administration of a public charity and endowed by private benefactions. Society for Propagation of Gospel v. New Haven,* 8 Wheat., 461.
$ 1244. The destruction of civil rights of corporations, including their capacity to hold lands, was not a consequence of the American revolution, even though the corporation was of British creation and membership. Ibid.
$ 1245. The fact that a corporation was of British creation and membership, and therefore exempt from the jurisdiction of a court of one of the United States to forfeit its franchise or to interfere in its management of a charity, does not destroy or in any manner affect the civil rights of the corporation or its capacity to hold and enjoy property in the United States legally vested in it. Ibid.
$ 1246. The treaty of peace of 1783, between the United States and England, protects the property of a British corporation from forfeiture for alienage. Ibid.
$ 1247. In 1794 the Society for the Propagation of the Gospel in Foreign Parts, a British corporation, had a complete though defeasible title to its lands in the United States, and could not be deprived of them except by an inquest of office, and no grant of such lands by the state could be valid until the title of the state to them was thus established. Ibid.
$ 1248. Action defeated by a state of war.- If a corporation established in a foreign country sue in our courts, and war arises between this country and that of which the corporation is a citizen, the action will be defeated, unless the case be within one of the exceptions permitting an alien enemy to sue. Society for Propagation of the Gospel v. Wheeler, 2 Gall., 132.
X. REGULATION AND CONTROL.
SUMMARY — Power to repeal or modify; obligation of contracts, SS 1249, 1254, 1259, 1265,
1267, 1268, 1271, 1278, 1281.- Right to use bridge, SS 1250, 1251, 1253. — Power to fix tolls, $ 1252.– Rights of stockholders in case of repeal, $ 1254.- Destroyed by repeal, SS 1253– 1257.– Right of stockholder to prevent repeal, gs 1258, 1270, 1273.- Transfer of property by repealing act, $ 1260.– New charter created by repealing act, $ 1261. — Property may be taken for public use, $ 1262. – Taking custody of assets, s 1263. – Contingent pepeal; delegation of authority, $ 1264. — Division of assets, $ 1265.— Repeal not a judicial act, $ 1266. — Trustee to manage affairs, SS 1269, 1277.- Repeal not reviewable, $ 1272.- Whether a judicial proceeding is necessary, $ 1273.— Rights of creditors, $ 1274.- State a stockholder, Ss 1275, 1276, 1279.— Unlawful appropriation of property of company, $ 1280.Exclusive privileges, & 1282.– Forfeiture by misuser, $ 1283.- Grant construed agaiust grantee, $ 1284.— Expiration of charter, § 1285.— Rights of new company formed by consolidation, $ 1286.
$ 1249. On March 5, 1867, the legislature of Illinois authorized the town of Hyde Park to abate nuisances, but restrained it from interfering with persons carrying offal or other animal refuse or matter from Chicago to be manufactured into fertilizer. March 8, 1857, three days later, the Northwestern Fertilizing Company was chartered for fifty years, but the charter contained no exemption from punishment for creating a nuisance if it should do so. It established works within the town of Hyde Park for the conversion into fertilizer of offal and other animal refuse and dead matter, which were subsequently carried on the cars through Hyde Park, thereby creating an intolerable stench and nuisance. In March, 1869, the charter of the village was revised by the legislature and the largest police powers were conferred, the trustees being expressly authorized to " define and abate nuisances which are or may be injurious to the public health,” but providing that this power should not for two years thereafter be exercised against the fertilizing company. On the expiration of that time, the nuisance still continuing, the village proceeding to enforce an ordinance which it had passed authorizing the imposition of a fine upon any one who should transport putrid animal matter through the village, and the engineer and other employees of the railway company were arrested and fined for so doing, whereupon the fertilizing company filed a bill to enjoin the prosecutions on the ground that it had a right under its charter so to carry such putrid matter through the village, which right was impaired by the ordinance under which the prosecutions were had. Held, that the charter was to be construed niost strongly against the fertilizing company, and nothing conceded except what was expressly granted or necessarily implied ; that the charter did not give the company a right for fifty years to continue the nuisance it had created; that the act of March 5, 1867, restraining the powers of the village as to interference with the transportation of fertilizing matter from Chicago, was not part of the charter of the fertilizing company and might be repealed by the legislature at its discretion; that the ordinance prohibiting the nuisance and authorizing prosecution therefor was lawful and valid as an exercise of police power. Fertilizing Co. v. Hyde Park, SS 1287-91. See $ 1374.
$ 1250. The International Bridge Company was created by charters of Canada and the state of New York, subject to an act of congress providing substantially that all railroad companies desiring to use its bridge over the Niagara river should be permitted to do so, “upon such terms and conditions as shall be prescribed by the district court of the United States" sitting in New York. On application of the Canada Southern Railway Company to that court to determine the terms and conditions upon which it might be permitted to use the bridge, held, that this act of congress did not authorize the district court to fix the compensation which should be paid to the bridge company for the use of the bridge by the railroad company in advance of any difference arising between the railroad company and the bridge company as to the amount of such compensation; that such compensation was meant to be fixed in the first place by agreement of the companies themselves, after which any difference as to the justice of the compensation required might be litigated as prescribed by the act of congress. Canada Southern R’y Co. v. International Bridge Co., SS 1292-95.
$ 1251. A corporation created by the New York state legislature and the Canadian parliament, for the purpose of constructing a bridge over the Niagara river, acquires a right to build such bridge only after securing the sanction of congress thereto; and congress may, in sanctioning the undertaking, impose any conditions as to the use of the bridge by the public, and the compensation therefor, as may seem to it wise and expedient. Ibid.
$ 1252. An act of congress delegating to a federal court the power to fix tolls upon a public highway, in case of disagreement between the parties using such highway and the company controlling it, is not unconstitutional as being a delegation of legislative powers. Ibid. See $ 1371.
§ 1253. The determination of the terms and conditions upon which railroad companies may be allowed to use a public bridge built by a private company over a public highway is a judicial act, since it is to be made upon hearing proofs and allegations of the parties, whose rights are to be ascertained by evidence and adjudicated upon under the sanctions of precedents and in conformity with the established rules of law. Ibid.
$ 1234. Personal and real property acquired by the corporation during its lawful existence, and rights of contract or choses in action so acquired, which do not in their nature depend upon the general powers conferred by the charter, are not destroyed by its repeal; and the courts may, if the legislature does not provide some special remedy, enforce such rights by the means within their power. The rights of the shareholders of such a corporation to their interest in its property are not annihilated by such repeal, and there must remain in the courts the power to protect those rights. Greenwood v. Freight Co., SS 1296-1301.
$ 1255. A repeal of a charter destroys the corporation. It can originate no new transactions dependent on powers conferred by the charter repealed. Ibid. $ 1256. The repeal of a bank charter destroys its power to lend money or issue notes. Ibid.
$ 1257. The repeal of a street railway company's charter destroys its right to use the streets or operate a railway thereon. Ibid.
$ 1258. If a state legislature passes an act by which the existence of a corporation will be destroyed and its corporate powers annihilated, a shareholder may maintain a suit to prevent such a disaster, if the corporation peremptorily refuses to move in the matter. Ibid.
$ 1259. A “reservation clause,” authorizing the “ amendment, alteration or repeal, at the pleasure of the legislature,” of corporate charters, authorizes the repeal of charters subsequently granted. Ibid.
$ 1260. A repeal of a charter authorized by a “reservation clause" is not invalidated by the transfer, upon compensation, by other sections of the repealing act, of the property of the corporation whose charter is repealed, to another company. Ibid.
§ 1261. Where a legislature can repeal the charter of a corporation, it can charter a new one by the repealing act and confer upon it all the powers of the old company. Ibid.
$ 1262. The property of a corporation, and even its franchises, may be taken for public use under the right of eminent domain, upon compensation being made, and conferred upon another company. Ibid.
$ 1263. A legislature having absolute control of a corporation may take away the custody of its assets from its directors and intrust the custody to an officer of the state pending an investigation into its solvency and the determination of the fact whether an event has happened upon which the repeal will take effect. Lothrop v. Stedman, SS 1302-11.
$ 1264. A legislative resolve, that a charter shall be repealed on a given future date, provided, if the company shall before that day receive a certificate that a deficiency in its assets has been supplied, then the charter shall remain in full force; and in case of disagreement between a commissioner and the company as to the amount of its assets, the chief justice and his associate shall determine and siate the amount to be paid in, and if the amount so found shall be paid within thirty days the resolve shall be inoperative and void, is a contingent repeal of such charter by the legislature. It is not a delegation of the power of repeal to third persons. Ibid.
§ 1265. When a charter is repealed the legislature cannot prescribe such rules for the management of the affairs of the corporation and the disposition of its assets as will divert the latter from, or divide them unfairly and unequally among, its creditors. Nor can it sequester a portion of the assets belonging to shareholders. It can neither impair contracts nor injure vested rights. Ibid.
S 1266. The repeal of a charter under an absolute, unconditional “reservation clause " is not a judicial act. It is not a finding of facts and a declaration of forfeiture. Therefore, the statement in the preamble of such a repealing act of facts that are disputed by the company, but which are given as reasons for the repeal, does not invalidate the act. Ibid.
$ 1267. The legislature may repeal a charter whether or not a court has passed upon the insolvency of the company and without regard to its finding. Ibid.
$ 1268. Repeal of a charter does not per se violate or impair the obligations of any contract which the corporation has entered into. Ibid.
$ 1269. The legislature may appoint a trustee to take the assets and manage the affairs of a corporation whose charter has been repealed, in conformity with general, just, prescribed rules, or with rules prescribed by a court of equity. If no such trustee is appointed by the legislature, equity will appoint one. Ibid.
$ 1270. A policy holder in an insurance company, being its creditor, may maintain a suit to protect its interests and prevent an injury to it, e. g., by forfeiture of its charter. Ibid.
$ 1271. A repeal of a cliarter under a “reservation clause " giving an absolute, unconditional right of repeal at the pleasure of the legislature, may be summary and at will. Ibid.
$ 1272. An absolute repeal of a charter, not being a judicial act, is not reviewable by the courts, unless the legislature should exercise its power of repeal so wantonly and causelessly as palpably to violate the principles of natural justice; its action may then be reviewed. Ibid.
$ 1273. A railway charter provided that “If the state can show at any time misuse or abuse of any of the privileges herein granted, the legislature may resume all and singular the rights and privileges hereby granted to such corporation.” The city of Baltimore advanced money to the company, which was expended upon the road. The legislature in 1864 revoked the charter so far as to restrict the company from building a portion of the road which it might have constructed. The city of Baltimore, fearing the acceptance by the corporation of the act of revocation would diminish the security for the repayment of its advance, filed a bill to restrain the company from accepting the act. Held, that the city, being a creditor of the corporation, might properly resort to such a proceeding quia timet. That the legislature might retain for its If an absolute or unconditional power to revoke, alter or repeal any charter granted by it; but that since this charter could be revoked only for misuse or abuse of any of