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ART. I. IN GENERAL. 88 7928-7944.



SECTION 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, ar

ticles of association, etc. 7934. Statutes requiring agents of

such corporations to file evi

dence of their authority. 7935. Statutes requiring such corpo

rations to keep known place of business and resident

agent. 7936. What constitutes “ doing busi


ness" in violation of such

probibitions. 7937. Citizens of the State procuring

insurance from foreign com

panies. 7938. Evidence of compliance with

such statutes. 7939. Proceedings against agents for

penalties for doing business in violation of such stat

utes. 7940. Restrictions upon foreign insur

ance companies. 7941. Whether such statutes apply to

foreign mutual benefit com

panies. 7942. Statutes prohibiting the dealing

in bank bills of corporations

created in other States. 7943. State statutes not applicable

to corporations vending pa

tented articles. 7944, Ousting foreign corporations by

quo warranto.

§ 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. ?

§ 7929. Statutes Providing that Foreign Corporations shall Enjoy No Greater Rights than Domestic Corporations. - Con. stitutional ordinances and statutes in many of the States are to the effect that foreign corporations shall not enjoy greater

1 Ante, $ 7875, et seg.

which he should do business, a sum * Pembina Consolidated Silver Min- equal to one percentum upon the ing &c. Co. v. Pennsylvania, 125 U.S. amount of all premiums received, etc., 181. That a State may in its laws to constitute a fireman's relief fund. make distinctions between resident San Francisco v. Liverpool &c. Ing. and non-resident citizens in regard to Co., 74 Cal. 113; 8. c. 5 Am. St. Rep. the right of action in its courts against 425; 15 Pac. Rep. 380. The decision foreign corporations, as for instance, is a strange aberration. The court in regard to the right of action for an ignored the only question essentially injury resulting in death, -see Robe involved, which was whether the coninson v. Oceanic Steam Nav. Co., 112 stitutional provision included under N. Y. 315. But the wisdom of a ma- the word “inhabitant,” foreign corjority of the Supreme Court of Cali- porations, as no other word is emfornia has discovered a prohibition braced in it wbich, by the utmost upon the legislature of that State from stretch of the imagination, could be passing a law exacting such a tax or supposed to refer to such bodies. But fee, in the following constitutional a foreign corporation is manifestly not provision: “The legislature shall an inhabitant of the State, but accord. have no power to impose taxes upon ing to all theories is an inhabitant of counties, cities, towns, or other public the State in which it was created, or municipal corporations, or upon though under some theories it is perthe inhabitants or property thereof, mitted to migrate into other States. for county, city, town, or other muni- Ante, $ 7890, et seq. The judge who cipal purposes ; but may, by general wrote the opinion wasted public time laws, vest in the corporate authorities over an irrelevant question, whether thereof, the power to assess and col- the imposition was or was not a tax. lect taxes for such purposes.” Const. It is past all doubt that the framers Cal., art. XI., $12 This provision, in of the provision in question never inthe view of the court, restrains the tended to lay an inhibition upon the legislature from passing an act requir- legislature of the State from imposing ing every agent of a foreign insurance taxes and license fees upon foreign company doing business within the

corporations, which were not imposed State, to pay into the hands of the upon domestic corporations. treasurer of the city or county, within

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.'

8 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 laws of New York to insure lives on California provides: “No corportaion the assessment plan, where it aporganized outside the limits of this pears that, by the laws of New York, State shall be allowed to transact Ohio companies, organized to do the business within this State on more business contemplated in section 3630 favorable conditions than are pre- of the Revised Statutes of that State, scribed by law to similar corpora- are not entitled as of right to a certions organized under the laws of this tificate of authority to do business State." Cal. State Const. 1879, art. therein. Ohio v. Moore, 39 Ohio St. 12, g 15. A similar provision is found 486. in the constitution of Idaho (Const. * The following, from the statute Idaho, 1889, art. XI., ġ 10), of Mon- books of Ohio, may also be cited as an tana (Const. Montana, 1889, art. example: “When, by the laws of any XV., 11), and no doubt in many other State or nation, any taxes, fines, other States. Const. Ark. 1874, art. penalties, license fees, deposits of XII., $ 11; Rev. Stat. Ohio, 9 3630 e. money, or of securities, or other obli

· State v. Western &c. Life Ins. gations or prohibitions, are imposed Co., 47 Ohio St. 167; 8. C. 24 N. E. on insurance companies of this State, Rep. 392; 8 L. R. A. 129. So, it doing business in such State or nation, has been held under the Ohio stat- or upon their agents therein, so long ute (Rev. Stat. Ohio, $ 3630 e), as as such laws continue in force, the amended by a later act (Ohio Act same obligations and prohibitions, of April 18, 1883; 80 Ohio Laws, 180), whatever kind, shall be imposed upon that the insurance commissioner of all insurance companies of such other Ohio cannot be compelled by man- State or nation doing business within damus to issue his certificate of au- this State, and upon their agents thority to do business in that State here." Rev. St. Ohio, | 282. to a corporation organized under the

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

· Home Ins. Co. v. Swigert, 104 Ill. where any foreign State imposes 653; Phonix Ins. Co. v. Welch, 29 upon insurance companies of the Kan. 672; People v. Fire Association, domestic State, doing business there92 N. Y. 311; 8. C. 44 Am. Rep. 380. in, a higher rate of taxation than is

: Home Ins. Co. v. Swigert, 104 III. imposed by such general statute, 653; Phoenix Ins. Co. v. Welch, 29 in which case the domestic State Kan. 672. Nor is it a valid objection will, by way of retaliation, impose to such a statute that it may have the higher rate of taxation. When lain dormant for many years until the contingency happens, the higher life has been infused into it by the rate of taxation is to be imposed by legislature of another State in enact- the proper taxing officer of the State, ing a statute which creates the con- and taxes collected from the foreign tingency upon which it is to take corporation upon the basis of such effect; nor does this involve the ab- higher rate cannot be recovered back dication by the legislature of the State in an action against the taxing officer. enacting such a statute, of its legis- Home Ins. Co. v. Swigert, 104 Ill. 653. lative functions, and a surrender of Nor is a statute which lays a uniform them to the legislature of a foreign rate of taxation upon foreign insurState. Home Ins. Co. v. Swigert, 104 ance companies, except those organIll. 653, 664; denying Clark v. Port of ized in a State which imposes a higher Mobile, 10 Ins. L. J. 357.

rate of taxation upon similar corpoState v. Insurance Co., 115 Ind. rations organized in the domestic 257; Blackmer v. Royal Ins. Co., 115 State, and which provides that, in Ind. 291; 8. c. 17 N. E. Rep. 580; respect of the corporations of such Blackmer v. Home Ins. Co., 115 Ind. foreign State, the same rate of taxa596; 8. C. 17 N. E. Rep. 583; People tion shall be imposed which such 0. Fire Association, 92 N. Y. 311; 8. C. State imposes upon the corporations 44 Am. Rep. 380. See also Goldsmith of the domestic State, unconstituv. Home Ins. Co., 62 Ga. 379. A stat- tional on the ground that it imposes ute is valid which provides for a gen- different rates of taxation upon differeral rate of taxation to be paid by ent corporations of the same class, insurance

companies, but which and thereby violates the constitumakes an exception in the case tional mandate that taxes shall be


license, and when the classification is in its nature not arbitrary, but just and fair, there can be no constitutional objection to it. .... Here, foreign insurance corporations are classified by the States from which they come; and when we consider the purposes of such classification, it cannot be held that there is anything arbitrary or unjust therein. But, doubtless, this charge is not to be considered as within the constitutional restrictions as to taxation, but rather in the nature of a license or condition of entering this State and transacting business within its limits.”

$ 7931. Distinction between Statutes of Retaliation and Statutes of Reciprocity. - In the construction of these statutes a distinction has been taken between them and statutes of reciprocity, in that while the statutes of reciprocity are to be liberally construed, these statutes of retaliation are to be strictly construed; and it has been said that a statute of the latter kind is “not applied to a case that does not fairly fall within its letter.”2 Upon this principle of 'strict construction, it has been held that a judgment of ouster, in a proceeding by quo warranto against a foreign corporation which has complied with the laws of Minnesota, will not be granted, as a

uniform. It is not, for instance, in court saying: “Reciprocity expresses violation of a constitutional provision the act of an interchange of favors which empowers the legislature to between persons or nations; retalilay certain taxes “in such manner ation, that of returning evil for evil, as it shall, from time to time, direct or disfavors for disfavors. Accurately by general law, uniform as to the class speaking, we reciprocate favors and upon which it operates.” Const. Ill., retaliate disfavors. This, then, is a art. IX, $ 1; Home Ins. Co. v. Swi- retaliatory statute. It treats the gert, 104 III. 653, 658.

companies of other States as Ohio 1 Phenix Ins. Co. ". Welch, 29 companies are treated in those States; Kan. 672, 678. See also State v. In- but the moment it is made to appear surance Co., 115 Ind. 257, 267, where that Ohio companies are not treated this language is quoted with full ap- with the same favor in another State proval.

that companies of that State are State v. Insurance Co., 49 Ohio treated in Ohio, a case is made for St. 440, 444; 8. C. 34 Am. St. Rep. 573. the application of its provisions, and In respect of the difference between retaliation follows as a result." State a reciprocal and a retaliatory statute, ♡. Insurance Co., 49 Ohio St. 440, the statute above quoted was held to 444; 8. C. 34 Am. St. Rep. 573. be a statute of the latter kind, the

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