created by Congress there is a diversity. Where the corporation is national in its nature, that is to say, created by Congress acting as the legislature of the nation, it is said to be domestic in each state where the franchise is exercised. Thus, in Pennsylvania v. Texas & Pacific R. R. Co., 98 Pa. St. 90, it was held that the term "foreign corporation” in a revenue law had no application to the appellee,-created by Act of Congress. On the other hand, where Congress, acting as the legislature of the District of Columbia and the territories, authorizes the formation of corporations, these are foreign to the several states.

Obviously a state can

§ 169. Repeal and amendment. not repeal or amend a charter which it did not grant; moreover, it will not, by its courts, attempt to regulate the internal management of a foreign corporation, doing business. within its borders. The practical questions that arise, therefore, are those which touch the power of the state to impose conditions upon the right of foreign corporations to enter and do business within its limits; to regulate their

1 Condon v. Reserve Asso., 89 Md. 99, 44 L. R. A. 149; North State Copper Co. v. Field, 64 Md. 151; Wilkins v. Thorne, 60 Md. 253. A state may, however, provide that a foreign corporation shall not dispose of its land situated therein except by the vote of the stockholders, the theory being that such a requirement is not a regulation of the internal affairs of the corporation, but has reference to the conduct of business. Williams v. Gaylord, 186 U. S. 157. A resident stockholder in a foreign corporation may sue its officer and agent, also a resident, to compel an accounting to the corporation. Sloan v. Clarkson, 105 Md. 171; and an inspection of the books of a foreign corporation, kept within the local jurisdiction, may be enforced by mandamus. Machen v. Mayer Elec. Co., 85 Atl. 100 (Pa.). Much is to be said for the tendency of these recent cases,—especially where the corporation is a local enterprise with a foreign charter.

intercourse with its citizens; and to collect from them revenue and taxes.

§ 170. Exclusion.

Where the foreign corporation is not an instrumentality of the federal government or of interstate commerce, the right of exclusion is absolute. In the leading case of Paul v. Virginia, 8 Wall. 168, a statute of the appellee discriminated between domestic and foreign insurance companies. The appellant was the agent of a New York company, and was indicted for doing business in Virginia without paying the tax imposed by the statute. The contentions were: (a) That being a citizen of New York the corporation was therefore entitled in Virginia to all the privileges and immunities of citizens of that state; and (b) that the statute of Virginia was an interference with interstate commerce. The court held that the term “citizen,” in the clause of the Constitution invoked, applies only to natural persons; and also that the business of insurance is not commerce. In Hooper v. California, 155 U. S. 648, a statute of the appellee made it a misdemeanor for any person in that state to procure insurance for a resident from a foreign company which had not qualified for doing business therein; and the appellant, an insurance broker, had violated the statute. The court said: "The principle that the right of a foreign corporation to engage in business within a state other than that of its creation depends solely upon the will of such other state, has long been settled and many phases of its application have been illustrated by the decisions of this court. Whilst there are exceptions to this rule, they embrace only cases where a corporation created by one state rests its right to enter another and to engage in business therein upon the federal nature of its business. As, for instance, where it has derived its being from an Act of Congress, and has become a lawful agency for the perform

ance of governmental or quasi-governmental functions, or where it is necessarily an instrumentality of interstate commerce, or its business constitutes such commerce, and is therefore, solely within the paramount authority of Congress. In these cases, the exceptional business is protected against interference by state authority. The con

* * *

tention here is that, inasmuch as the contract was one for marine insurance, it was a matter of interstate commerce, and as such beyond the reach of state authority and included among the exceptions to the general rule. The business of insurance is not commerce. The contract of insurance is not an instrumentality of commerce. The making of such a contract is a mere incident of commercial intercourse, and in this respect there is no difference whatever between insurance against fire and insurance against the perils of the sea. The State of California has the power to exclude foreign insurance companies altogether from her territory, whether they were formed for the purpose of doing a fire or a marine business. She has the power, if she allows any such companies to enter her confines, to determine the conditions on which the entry shall be made. And, as a necessary consequence of her possession of these powers, she has the right to enforce any conditions imposed by her laws as preliminary to the transaction of business within her confines by a foreign corporation, whether the business is to be carried on through officers or through ordinary agents of the company, and she has also the further right to prohibit a citizen from contracting within her jurisdiction with any foreign company which has not acquired the privilege of engaging in business therein, either in his own behalf or through an agent empowered to that end. ** * * One more contention remains to be noticed. It is said that the right of a citizen to contract for insurance

for himself is guaranteed by the Fourteenth Amendment, and that, therefore, he cannot be deprived by the State of the capacity to so contract through an agent. The Fourteenth Amendment, however, does not guarantee the citizen the right to make within his State, either directly or indirectly, a contract, the making whereof is constitutionally forbidden by the State. The proposition that, because a citizen might make such a contract for himself beyond the confines of his State, therefore he might authorize an agent to violate in his behalf the laws of his State, within her own fimits, involves a clear non sequitur and ignores the vital distinction between acts done within and acts done beyond a state's jurisdiction."

1 Accordingly, in Allgeyer v. Louisiana, 165 U S. 578, where the appellant had been fined under a statute of the appellee, which in effect "prevented an owner of cotton in that State from sending to an insurance company of another state not authorized to do business in Louisiana, an order by mail for insurance on the cotton to be shipped to a foreign port, in pursuance of a valid contract for such insurance previously made and to be performed in the other state," -the statute was held to be a violation of the Fourteenth Amendment, in that it deprived the appellant of his liberty without due process of law. "The liberty mentioned in that amendment means not only the right of the citizen to be free from mere physical restraint of his person as by incarceration, but the term is deemed to embrace the right of the citizen to be free in the enjoyment of all his faculties; to be free to use them in all lawful ways; to live and work where he will; to earn his livelihood by any lawful calling; to pursue any livelihood or avocation, and for that purpose to enter into all contracts which may be proper, necessary and essential to his carrying out to a successful conclusion the purposes above mentioned."

Compare with the cases in the text, International Text Book Co. v. Pigg, 217 U. S. 91,-holding that the business of a correspondence school is interstate commerce.

§ 171. Conditions. It being lawful, then, for a state, within the constitutional limits mentioned, to prescribe the conditions upon which a foreign corporation may enter and do business therein,-such conditions have been very generally enacted; and a large volume of litigation has arisen over them. It is usually required that, as a condition precedent, the foreign corporation must file with some state officer a copy of its charter and a statement, to be renewed periodically, of its financial condition; appoint a resident agent upon whom process may be served; and pay prescribed entrance fees and periodical franchise taxes. The penalties for non-observance are various. Usually, fines are imposed upon the agents of the offending corporation, but the chief difficulty arises when it sues, in the courts of the state, on contracts made in disregard of a statute conditioning the right to "do business" within the state. What constitutes "doing business"; where was the contract made; what conditions upon the right to do business amount to a regulation of interstate commerce or are otherwise void? The way in which these and similar questions are answered by the courts will be considered; but first, the statutory provisions in Maryland will be stated.

Maryland statutes. The Act of 1908, ch. 240 (Code 1911, Art. 23), provides:

Sec. 93. Every foreign corporation which has a usual office or place of business in this state, except insurance companies hereinafter provided for, but including any corporation which is engaged in this state permanently or temporarily, and with or without a usual place of business therein, in the construction, alteration, erection or repair of any building, bridge, railroad, railway or structure of any kind, shall, before doing business herein, file with the secretary of state, who shall record the same, (1) a certified