in respect of the mode in which the conveyance is made, the local law governs; though the question whether the directors have received power from the stockholders to authorize the mortgage must be determined by reference to the charter, governing statute, or by-laws of the corporation. For instance, it has been held in Massachusetts that a statute of that State, providing that a corporation shall not convey or mortgage its real estate, or give a lease therefor for more than a year, unless authorized by a vote of the stockholders at a meeting called for the purpose, does not apply to foreign corporations, nor invalidate a mortgage made by a New Hampshire corporation of its lands situated in Massachusetts, where there has been no such vote of the stockholders. So, the question whether such a mortgage was void by reason of the fact that the meeting of the directors at which it was authorized had been held, not in New Hampshire, the State of the domicile of the corporation, but in Massachusetts, the State of the situs of the land, was determined, with reference to the laws of New Hampshire and the by-laws of the corporation, in favor of the validity of the mortgage." though they are not recorded and were unknown to parties advancing money on mortgage of the corporate property, who acted with due diligence. Holland Trust Co. v. Taos Valley Co., 11 Rail. & Corp. L. J. 74. 1 Saltmarsh v. Spaulding, 147 Mass. 224; 8. c. 17 N. E. Rep. 316; 4 Rail. & Corp. L. J. 151. 2 Ibid. A foreign corporation called a mortgage company, created for the sole business of lending money on mortgages, might lend its money in Illinois on mortgages, notwithstanding the fact that the laws of Illinois did not provide for the formation of such companies. Nor is this con clusion changed by the language of the incorporation law of that State of 1872, that "corporations may be formed, . . . . for any lawful purpose, except banking, insurance, real estate brokerage, the operation of railroads, and the business of loaning money." This statute refers only to the formation of domestic corporations, and is held not to indicate a policy on the part of the legislature to exclude foreign corporations from the State which are organized for the prosecution of business for which domestic corporations cannot be permitted. Stevens v. Pratt, 101 Ill. 206. 6303 CHAPTER CXCV. STATE LAWS IMPOSING CONDITIONS UPON FOREIGN CORPORATIONS. ART. I. II. SECTION IN GENERAL. §§ 7928-7944. EFFECT OF VIOLATING THESE RESTRAINTS UPON CONTRACTS, AND RIGHTS OF ACTION THEREON. 88 79507970. ARTICLE I. IN GENERAL. 7928. Constitutional limitations upon the State legislatures. 7929. Statutes providing that foreign corporations shall enjoy no greater rights than domestic corporations. 7930. Retaliatory statutes. 7931. Distinction between statutes of retaliation and statutes of reciprocity. 7932. Restrictions upon exercising the right of eminent domain. 7933. Statutes requiring foreign cor porations to file charter, certificate of incorporation, articles of association, etc. 7934. Statutes requiring agents of such corporations to file evidence of their authority. 7935. Statutes requiring such corporations to keep known place of business and resident agent. 7936. What constitutes "doing busi § 7928. Constitutional Limitations upon the State Legislatures. We have considered this subject in another connection, in so far as it relates to limitations imposed by the Federal constitution;' and we have seen that there is no prohibition in the Federal constitution which operates to restrain the legislature of a State from exacting from foreign corporations, as a condition precedent to their being admitted to do business within the State, license fees or taxes which are not imposed upon similar domestic corporations.2 § 7929. Statutes Providing that Foreign Corporations shall Enjoy No Greater Rights than Domestic Corporations. — Constitutional ordinances and statutes in many of the States are to the effect that foreign corporations shall not enjoy greater 1 Ante, § 7875, et seq. 'Pembina Consolidated Silver Mining &c. Co. v. Pennsylvania, 125 U. S. 181. That a State may in its laws make distinctions between resident and non-resident citizens in regard to the right of action in its courts against foreign corporations, as for instance, in regard to the right of action for an injury resulting in death,-see Robinson v. Oceanic Steam Nav. Co., 112 N. Y. 315. But the wisdom of a majority of the Supreme Court of California has discovered a prohibition upon the legislature of that State from passing a law exacting such a tax or fee, in the following constitutional provision: "The legislature shall have no power to impose taxes upon counties, cities, towns, or other public or municipal corporations, or upon the inhabitants or property thereof, for county, city, town, or other municipal purposes; but may, by general laws, vest in the corporate authorities thereof, the power to assess and collect taxes for such purposes." Const. Cal., art. XI., § 12 This provision, in the view of the court, restrains the legislature from passing an act requiring every agent of a foreign insurance company doing business within the State, to pay into the hands of the treasurer of the city or county, within 395 which he should do business, a sum equal to one percentum upon the amount of all premiums received, etc., to constitute a fireman's relief fund. San Francisco v. Liverpool &c. Ins. Co., 74 Cal. 113; s. c. 5 Am. St. Rep. 425; 15 Pac. Rep. 380. The decision is a strange aberration. The court ignored the only question essentially involved, which was whether the constitutional provision included under the word “inhabitant,” foreign corporations, as no other word is embraced in it which, by the utmost stretch of the imagination, could be supposed to refer to such bodies. But a foreign corporation is manifestly not an inhabitant of the State, but according to all theories is an inhabitant of the State in which it was created, though under some theories it is permitted to migrate into other States. Ante, § 7890, et seq. The judge who wrote the opinion wasted public time over an irrelevant question, whether the imposition was or was not a tax. It is past all doubt that the framers of the provision in question never intended to lay an inhibition upon the legislature of the State from imposing taxes and license fees upon foreign corporations, which were not imposed upon domestic corporations. 6305 privileges than those granted to domestic corporations of a similar class. In a proceeding by quo warranto in Ohio to oust an insurance company organized under the laws of Michigan from doing business on the assessment plan in Ohio, it appeared that the laws of Michigan did not permit Ohio companies to do business within that State on the same plan, and judgment of ouster was accordingly entered." § 7930. Retaliatory Statutes. These retaliatory statutes have been enacted in many of the States. Roughly stated, they provide that whatever restrictions are imposed by the laws of another country or State upon corporations of the domestic State doing business in such other country or State, shall be imposed upon corporations of such country or State within the domestic State. The constitutionality of these stat 1 For instance, the constitution of California provides: "No corportaion organized outside the limits of this State shall be allowed to transact business within this State on more favorable conditions than are prescribed by law to similar corporations organized under the laws of this State." Cal. State Const. 1879, art. 12, § 15. A similar provision is found in the constitution of Idaho (Const. Idaho, 1889, art. XI., § 10), of Montana (Const. Montana, 1889, art. XV., § 11), and no doubt in many other States. Const. Ark. 1874, art. XII., 11; Rev. Stat. Ohio, § 3630 e. State v. Western &c. Life Ins. Co., 47 Ohio St. 167; s. c. 24 N. E. Rep. 392; 8 L. R. A. 129. So, it has been held under the Ohio statute (Rev. Stat. Ohio, § 3630 e), as amended by a later act (Ohio Act April 18, 1883; 80 Ohio Laws, 180), that the insurance commissioner of Ohio cannot be compelled by mandamus to issue his certificate of authority to do business in that State to a corporation organized under the laws of New York to insure lives on the assessment plan, where it appears that, by the laws of New York, Ohio companies, organized to do the business contemplated in section 3630 of the Revised Statutes of that State, are not entitled as of right to a certificate of authority to do business therein. Ohio v. Moore, 39 Ohio St. 486. The following, from the statute books of Ohio, may also be cited as an example: "When, by the laws of any other State or nation, any taxes, fines, penalties, license fees, deposits of money, or of securities, or other obligations or prohibitions, are imposed on insurance companies of this State, doing business in such State or nation, or upon their agents therein, so long as such laws continue in force, the same obligations and prohibitions, of whatever kind, shall be imposed upon all insurance companies of such other State or nation doing business within this State, and upon their agents here." Rev. St. Ohio, § 282. utes has been upheld against the objection that they invalidate the passing of laws which take effect upon the contingency of certain legislation in other States; since it is competent for the legislature of a State, in its providence, to enact statutes which become operative only upon the happening of the contingencies named therein. And although the statute may long remain dormant, yet it springs into life and becomes completely operative as an expression of the legislative will as soon as the contingency arises. Such statutes are also upheld against the objection that they violate constitutional provisions against unequal taxation.' "The legislature may classify," said Brewer, J., "for the purposes of taxation or 1 Home Ins. Co. v. Swigert, 104 Ill. 653; Phoenix Ins. Co. v. Welch, 29 Kan. 672; People v. Fire Association, 92 N. Y. 311; s. c. 44 Am. Rep. 380. Home Ins. Co. v. Swigert, 104 Ill. 653; Phoenix Ins. Co. v. Welch, 29 Kan. 672. Nor is it a valid objection to such a statute that it may have lain dormant for many years until life has been infused into it by the legislature of another State in enacting a statute which creates the contingency upon which it is to take effect; nor does this involve the abdication by the legislature of the State enacting such a statute, of its legislative functions, and a surrender of them to the legislature of a foreign State. Home Ins. Co. v. Swigert, 104 Ill. 653, 664; denying Clark v. Port of Mobile, 10 Ins. L. J. 357. State v. Insurance Co., 115 Ind. 257; Blackmer v. Royal Ins. Co., 115 Ind. 291; 8. c. 17 N. E. Rep. 580; Blackmer v. Home Ins. Co., 115 Ind. 596; s. c. 17 N. E. Rep. 583; People v. Fire Association, 92 N. Y. 311; s. c. 44 Am. Rep. 380. See also Goldsmith v. Home Ins. Co., 62 Ga. 379. A statute is valid which provides for a general rate of taxation to be paid by insurance companies, but which makes an exception in the case where any foreign State imposes upon insurance companies of the domestic State, doing business therein, a higher rate of taxation than is imposed by such general statute, in which case the domestic State will, by way of retaliation, impose the higher rate of taxation. When the contingency happens, the higher rate of taxation is to be imposed by the proper taxing officer of the State, and taxes collected from the foreign corporation upon the basis of such higher rate cannot be recovered back in an action against the taxing officer. Home Ins. Co. v. Swigert, 104 Ill. 653. Nor is a statute which lays a uniform rate of taxation upon foreign insurance companies, except those organized in a State which imposes a higher rate of taxation upon similar corporations organized in the domestic State, and which provides that, in respect of the corporations of such foreign State, the same rate of taxation shall be imposed which such State imposes upon the corporations of the domestic State, unconstitutional on the ground that it imposes different rates of taxation upon different corporations of the same class, and thereby violates the constitutional mandate that taxes shall be |