Tennessee, to sell their goods to that corporation upon such terms in respect of payment as might be agreed upon, and to ship them to the corporation at its place of business in that state. But the enjoyment of these rights is materially obstructed by the statute in question; for that statute, by its necessary operation, excludes citizens of other states from transacting business with that corporation upon terms of equality with citizens of Tennessee. By force of the statute alone, citizens of other states, if they contracted at all with the British corporation, must have done so subject to the onerous condition that, if the corporation became insolvent, its assets in Tennessee should first be applied to meet its obligations to residents of that state, although liability for its debts and engagements was "to be enforced in the manner provided by law for the application of the property of natural persons to the payment of their debts, engagements, and contracts." But, clearly, the state could not in that mode secure exclusive privileges to its own citizens in matters of business. If a state should attempt, by statute regulating the distribution of the property of insolvent individuals among their creditors, to give priority to the claims of such individual creditors as were citizens of that state over the claims of individual creditors citizens of other states, such legislation would be repugnant to the constitution, upon the ground that it withheld from citizens of other states, as such, and because they were such, privileges granted to citizens of the state enacting it. Can a different principle apply, as between individual citizens of the several states, when the assets to be distributed are the assets of an insolvent private corporation lawfully engaged in business, and having the power to contract with citizens residing in states other that the one in which it is located?

It is an established rule of equity that, when a corporation becomes insolvent, it is so far civilly dead that its property may be administered as a trust fund for the benefit of its stockholders and creditors (Graham v. Railroad Co., 102 U. S. 148, 161),-not simply of stockholders and creditors residing in a particular state, but all stockholders and creditors, of whatever state they may be citizens. In Railway Co. v. Ham, 114 U. S. 587, 594, 5 Sup. Ct. 1081, it was said that the property of a corporation was a trust fund for the payment of its debts, in the sense that when the corporation was lawfully dissolved, and all its business wound up, or when it was insolvent, all its creditors were entitled, in equity, to have their debts paid out of the corporate property before any distribution thereof among the stockholders. In Hollins v. Iron Co., 150 U. S. 371, 385, 14 Sup. Ct. 127, It was observed that a private corporation, when it becomes insolvent, holds its assets subject to somewhat the same kind of equitable lien and trust in favor of its creditors that exist in favor of the creditors of a part

nership after becoming insolvent, and that in such case a lien and trust will be enforced by a court of equity in favor of creditors. These principles obtain, no doubt, in Tennessee, and will be applied by its courts in all appropriate cases between citizens of that state, without making any distinction between them. Yet the courts of that state are forbidden by the statute in question to recognize the right in equity of citizens residing in other states to participate upon terms of equality with citizens of Tennessee in the distribution of the assets of an insolvent foreign corporation lawfully doing business in that state.

We hold such discrimination against citizens of other states to be repugnant to the second section of the fourth article of the constitution of the United States, although, generally speaking, the state has the power to prescribe the conditions upon which foreign corporations may enter its territory for pur poses of business. Such a power cannot be exerted with the effect of defeating or im| pairing rights secured to citizens of the sev eral states by the supreme law of the land. Indeed, all the powers possessed by a state must be exercised consistently with the privileges and immunities granted or protected by the constitution of the United States.

In Insurance Co. v. French, 18 How.404, 407, Mr. Justice Curtis, speaking for this court, said: "A corporation created by Indiana can transact business in Ohio only with the consent, express or implied, of the latter state. This consent may be accompanied by such conditions as Ohio may think fit to impose; and these conditions must be deemed valid and effectual by other states, and by this court, provided they are not repugnant to the constitution and laws of the United States, or inconsistent with those rules of public law which secure the jurisdiction and authority of each state from encroachment by all others, or that principle of natural justice which forbids condemnation without opportunity for defense." It was accordingly adjudged in Barron v. Burnside, 121 U. S. 186, 200, 7 Sup. Ct. 931, that an Iowa statute requiring every foreign corporation named in it, as a condition of obtaining a license or permit to transact business in that state, to stipulate that it would not remove into the federal courts suits that were removable from the state courts under the laws of the United States, was void, because it made the right to do business under a license or permit dependent upon the surrender by the corporation of a privilege secured to it by the constitution. This principle was recognized in Steamship Co. v. Kane, 170 U. S. 100, 111, 18 Sup. Ct. 526, in which, after referring to the constitutional and statutory provisions defining the jurisdiction of the circuit courts of the United States, this court said: "The jurisdiction so conferred upon the national courts cannot be abridged or impaired by any statute of a state. Hyde v. Stone, 20 How. 170, 175; Smyth v. Ames, 169 U. S.

*256

466, 516, 18 Sup. Ct. 418. It has therefore been decided that a statute which requires all actions against a county to be brought in a county court does not prevent the circuit court of the United States from taking juris diction of such an action; Chief Justice Chase saying that 'no statute limitation of suability can defeat a jurisdiction given by the constitution.' Cowles v. Mercer* Co., 7 Wall. 118, 122; Lincoln Co. v. Luning, 133 U. S. 529, 10 Sup. Ct. 363; Chicot Co. v. Sherwood, 148 U. S. 529, 13 Sup. Ct. 695. So statutes requiring foreign corporations, as a condition of being permitted to do business within the state, to stipulate not to remove into the courts of the United States suits brought against them in the courts of the state, have been adjudged to be unconstitutional and void. Insurance Co. v. Morse, 20 Wall. 445; Barron v. Burnside, 121 U. S. 186, 7 Sup. Ct. 931; Southern Pac. Co. v. Denton, 146 U. S. 202, 13 Sup. Ct. 44." See Ducat v. Chicago, 10 Wall. 410, 415.

We must not be understood as saying that a citizen of one state is entitled to enjoy in another state every privilege that may be given in the latter to its own citizens. There are privileges that may be accorded by a state to its own people, in which citizens of other states may not participate, except in conformity to such reasonable regulations as may be established by the state. For instance, a state cannot forbid citizens of other states from suing in its courts, that right being enjoyed by its own people; but it may require a nonresident, although a citizen of another state, to give bond for costs, although such bond be not required of a resident. Such a regulation of the internal affairs of a state cannot reasonably be characterized as hostile to the fundamental rights of citizens of other states. So, a state may, by rule uniform in its operation as to citizens of the several states, require residence within its limits for a given time before a citizen of another state, who becomes a resident thereof, shall exercise the right of suffrage or become eligible to office. It has never been supposed that regulations of that character materially interfered with the enjoyment by citizens of each state of the privileges and immunities secured by the constitution to citizens of the several states. The constitution forbids only such legislation affecting citizens of the respective states as will substantially or practically put a citizen of one state in a condition of alienage when he is within or when he removes to another state, or when asserting in another state the rights that commonly appertain to those who are part of the political community known as the People of the United States, by and for whom the government of the Union was ordained and established.

Nor must we be understood as saying that a state may not, by its courts, retain within its limits the assets of a foreign corporation, in order that justice may be done to its own

citizens, nor, by appropriate action of its judicial tribunals, see to it that its own citizens are not unjustly discriminated against by reason of the administration in other states of the assets there of an insolvent corporation doing business within its limits. For instance, if the Embreeville Company had property in Virginia at the time of its insolvency, the Tennessee court administering its assets in that state could take into account what a Virginia creditor, seeking to participate in the distribution of the company's assets in Tennessee, had received or would receive from the company's assets in Virginia, and make such order touching the assets of the company in Tennessee as would protect Tennessee creditors against wrongful discrimination arising from the particular action taken in Virginia for the benefit of creditors residing in that commonwealth.

It may be appropriate to observe that the objections to the statute of Tennessee do not necessarily embrace enactments that are found in some of the states requiring foreign insurance corporations, as a condition of their coming into the state for purposes of business, to deposit with the state treasurer funds sufficient to secure policy holders in its midst. Legislation of that character does not present any question of discrimination against citizens forbidden by the constitution. Insurance funds set apart in advance for the benefit of home policy holders of a foreign insurance company doing business in the state are a trust fund of a specific kind, to be administered for the exclusive benefit of certain persons. Policy holders in other states know that those particular funds are segregated from the mass of property owned by the company, and that they cannot look to them to the prejudice of those for whose special benefit they were deposited. The present case is not one of that kind. The, statute of Tennessee did not make it a condition of the right of the British corporation to come into Tennessee for purposes of business that it should, at the outset, deposit with the state a fixed amount, to stand exclusively or primarily for the protection of its Tennessee creditors. It allowed that corporation, after complying with the terms of the statute, to conduct its business in Tennessee as it saw fit, and did not attempt to impose any restriction upon its making contracts with, or incurring liabilities to, citizens of other states. It permitted that corporation to contract with citizens of other states, and then, in effect, provided that all such contracts should be subject to the condition (in case the corporation became insolvent) that creditors residing in other states should stand aside, in the distribution by the Tennessee courts of the assets of the corporation, until creditors residing in Tennessee were fully paid, not out of any funds or property specifically set aside as a trust fund, and at the outset put into the custody of the state, for the exclusive benefit, or for the benefit primarily, of Tennessee cred

itors, but out of whatever assets of any kind the corporation might have in that state when insolvency occurred. In other words, so far as Tennessee legislation is concerned, while this corporation could lawfully have contracted with citizens of other states, those citizens cannot share in its general assets upon terms of equality with citizens of that state. If such legislation does not deny to citizens of other states, in respect of matters growing out of the ordinary transactions of business, privileges that are accorded by it to citizens of Tennessee, it is difficult to perceive what legislation would effect that result.

We adjudge that when the general property and assets of a private corporation lawfully doing business in a state are in course of administration by the courts of such state, creditors who are citizens of other states are entitled, under the constitution of the United States, to stand upon the same plane with creditors of like class who are citizens of such state, and cannot be denied equality of right simply because they do not reside in that state, but are citizens residing in other states of the Union. The individual plaintiffs in error were entitled to contract with this British corporation, lawfully doing business in Tennessee, and deemed and taken to be a corporation of that state; and no rule in the distribution of its assets among creditors could be applied to them as resident citizens of Ohio, and because they were not residents of Tennessee, that was not applied by the courts of Tennessee to creditors of like character who were citizens of Tennessee.

As to the plaintiff in error, the Hull Coal & Coke Company of Virginia, different considerations must govern our decision. It has long been settled that, for purposes of suit by or against it in the courts of the United States, the members of a corporation are to be conclusively presumed to be citizens of the state creating such corporation (Railroad Co. v. Letson, 2 How. 497; Drawbridge Co. v. Shepherd, 20 How. 227, 232; Railroad Co. v. Wheeler, 1 Black, 286, 296; Steamship Co. v. Tugman, 106 U. S. 118, 120, 1 Sup. Ct. 58; Steamship Co. v. Kane, above cited); and therefore it has been said that a corporation is to be deemed, for such purposes, a citizen of the state under whose laws it was organized. But it is equally well settled, and we now hold, that a corporation is not a citizen within the meaning of the constitutional provision that "the citizens of each state shall be entitled to all privileges and immunities of citizens in the several states" (Paul v. Virginia, 8 Wall. 168, 178, 179; Ducat v. Chicago, 10 Wall. 410, 415; Liverpool Ins. Co. v. Massachusetts, Id. 566, 573). The Virginia corporation, therefore, cannot invoke that provision for protection against the decree of the state court denying its right to participate upon terms of equality with Tennessee creditors in the distribution of the assets of the British corporation in the hands of the Tennessee court.

Since, however, a corporation is a "person,"

within the meaning of the fourteenth amendment (Santa Clara Co. v. Southern Pac. R. Co., 118 U. S. 394, 396, 6 Sup. Ct. 1132; Smyth v. Ames, 169 U. S. 466, 522, 18 Sup. Ct. 418), may not the Virginia corporation invoke for its protection the clause of the amendment declaring that no state shall deprive any person of property without due process, nor deny to any person within its jurisdiction the equal protection of the laws?

We are of opinion that this question must; receive a negative* answer. Although this court has adjudged that the prohibitions of the fourteenth amendment refer to all the instrumentalities of the state, to its legislative, executive, and judicial authorities (Ex parte Virginia, 100 U. S. 339, 346, 347; Yick Wo v. Hopkins, 118 U. S. 356, 373, 6 Sup. Ct. 1064; Scott v. McNeal, 154 U. S. 34, 45, 14 Sup. Ct. 1108; and Chicago, B. & Q. Ry. Co. v. City of Chicago, 166 U. S. 226, 233, 17 Sup. Ct. 581), it does not follow that, within the meaning of that amendment, the judgment below deprived the Virginia corporation of property without due process of law, simply because its claim was subordinated to the claims of the Tennessee creditors. That corporation was not, in any legal sense, deprived of its claim, nor was its right to reach the assets of the British corporation in other states or countries disputed. It was only denied the right to participate upon terms of equality with Tennessee creditors in the distribution of particular assets of another corporation doing business in that state. It had notice of the proceedings in the state court, became a party to those proceedings, and the rights asserted by it were adjudicated. If the Virginia corporation cannot invoke the protection of the second section of article 4 of the constitution of the United States, relating to the privileges and immunities of citizens in the several states, as its co-plaintiffs in error have done, it is because it is not a citizen within the meaning of that section; and, if the state court erred in its decree in reference to that corporation, the latter cannot be said to have been thereby deprived of its property without due process of law, within the meaning of the constitution. It is equally clear that the Virginia corporation cannot rely upon the clause declaring that no state shall "deny to any person within its jurisdiction the equal protection of the laws." That prohibition manifestly relates only to the denial by the state of equal protection to persons "within its jurisdiction." Observe that the prohibition against the deprivation of property without due process of law is not qualified by the words "within its jurisdiction," while those words are found in the succeeding clause relating to the equal protection of the laws. The court cannot assume that those words were inserted without any object, nor is it at liberty to eliminate them from the constitution, and to interpret the clause in question as if they were not to be found in that instrument. Without at. tempting to state what is the full import of

the words, "within its jurisdiction," it is safe to say that a corporation not created by Tennessee, nor doing business there under conditions that subjected it to process issuing from the courts of Tennessee at the instance of suitors, is not, under the above clause of the fourteenth amendment, within the jurisdiction of that state. Certainly, when the statute in question was enacted, the Virginia corporation was not within the jurisdiction of Tennessee. So far as the record discloses, its claim against the Embreeville Company was on account of coke sold and shipped from Virginia to the latter corporation at its place of business in Tennessee. It does not appear to have been doing business in Tennessee under the statute here involved, or under any statute that would bring it directly under the jurisdiction of the courts of Tennessee by service of process on its officers or agents. Nor do we think it came within the jurisdiction of Tennessee, within the meaning of the amendment, simply by presenting its claim in the state court, and thereby becoming a party to this cause. Under any other interpretation, the fourteenth amendment would be given a scope not contemplated by its framers or by the people, nor justified by its language. We adjudge that the statute, so far as it subordinates the claims of private business corporations not within the jurisdiction of the state of Tennessee (although such private corporations may be creditors of a corporation doing business in the state under the authority of that statute) to the claims against the latter corporation of creditors residing in Tennessee, is not a denial of the "equal protection of the laws" secured by the fourteenth amendment to persons within the jurisdiction of the state, however unjust such a regulation may be deemed.

What may be the effect of the judgment of this court in the present case upon the rights of creditors not residing in the United States It is not necessary to decide. Those creditors are not before the court on this writ of error. The final judgment of the supreme court of Tennessee must be affirmed as to the Hull Coal & Coke Company, because it did not deny to that corporation any right, privilege, or immunity secured to it by the constitution of the United States. Rev. St. § 709. As to the other plaintiffs in error, citizens of Ohio, the judgment must be reversed, and the cause remanded for further proceedings not inconsistent with this opinion. It is so ordered.

Mr. Justice BREWER, dissenting.

I am unable to concur in the opinion of the court in this case. In my judgment it misconceives the language of the statute. the issues presented by the pleadings, and the decision of the state court. The act does not discriminate between citizens of Tennessee and those of other states. Its language is, creditors "residents of this state shall have a

priority

over all simple contract creditors being residents of any other country or countries." The allegation of the amended bill is, "Your orators are all residents of the state of Tennessee, and were such at the time the various debts sued on in this cause were created," and that by virtue of the statute they are entitled to priority over the "defendant Rogers, Brown & Co., and all other creditors of said insolvent corporation who do not reside in the state of Tennessee, or did not so reside at the time their credits were given." The intervening petition of the plaintiffs in error Blake and Rogers, Brown & Co. alleges "that they are residents of the state of Ohio, and were at the times and dates hereinafter named engaged in business in said state, their resi dences, offices, and places of business being at the city of Cincinnati." The decree of the court of chancery appeals adjudges "that all of the creditors of said company who resided in the state of Tennessee are entitled to priority of payment, out of all of the assets of the company of every kind, over all of the creditors of said company who do not reside in the state of Tennessee." And the decree of the supreme court of the state is; in substantially the same language, adjudging "that all of the creditors of the Embreeville Freehold Land, Iron and Railway Company, Limited, who resided in the state of Tennessee, are entitled to priority of payment out of all of the assets of said company, both real and personal, over all of the other creditors of said company who do not reside in the state of Tennessee, whether they be residents of other states of the United States or of the kingdom of Great Britain." So that neither the statute, the pleadings, nor the decree raise any question of citizenship, or give any priority of right to citizens of Tennessee over citizens of other states, but only discriminate between residents, and give residents of the state a priority. I think it improper to go outside of a case to find a question which is not in the record simply because it may be discussed by counsel for one party, who apparently decline to recognize any difference between residence and citizenship. For all this record discloses, the plaintiffs in error other than the corporation may have been citizens of the state of Tennessee, temporarily residing and doing business in Ohio, and the controversy one simply between citizens of the same state. It is not necessary in this court to refer to the difference be tween residence and citizenship. Neither is synonymous with the other, and neither inIcludes the other. A British subject or a citizen of Ohio may be a resident of Tennessee, and entitled to the benefit of this statute. A citizen of Tennessee may, like these plaintiffs in error, be a resident of and doing business in Ohio, and not entitled to its benefit. It will be time enough to consider the question discussed in the opinion when it appears that a state has attempted to discriminate be

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tween its own citizens and citizens of other states, and the courts of the state have af firmed the validity of such discrimination.

Taking the statute as it reads, and assuming that the legislature of Tennessee meant that which it said, the question is whether a state, permitting a foreign corporation which is not engaged in interstate commerce to come into its territory, and there do business, has the power to protect all persons residing with in its limits who may have dealings with such foreign corporation by requiring it to give them a prior security on its assets within the state. The principle underlying this statute is that a state, which can have no jurisdiction beyond its territorial limits, has the power, in reference to foreign corporations permitted to do business therein, to protect all persons within those limits, whether citizens or not, in respect to claims upon the property thereof also within those limits. That a state may keep such a corporation out of its territory is conceded; and that, in permitting it to enter, the state may impose such conditions as it sees fit, is, as a general proposition, also admitted. In Crutcher v. Kentucky, 141 U. S. 47, 59, 11 Sup. Ct. 854, it was said:

"The insurance business, for example, cannot be carried on in a state by a foreign corporation without complying with all the conditions imposed by the legislation of that state. So with regard to manufacturing corporations, and all other corporations whose business is of a local and domestic nature, which would include express companies whose business is confined to points and places wholly within the state. The cases to this effect are numerous. Bank v. Earle, 13 Pet. 519; Paul v. Virginia, S Wall. 168; Liverpool Ins. Co. v. Massachusetts, 10 Wall. 566; Manufacturing Co. v. Ferguson, 113 U. S. 727, 5 Sup. Ct. 739; Philadelphia Fire Ass'n v. New York, 119 U. S. 110. 7 Sup. Ct. 108."

Every one dealing with a foreign corporation is bound to take notice of the statutes of the state imposing conditions upon that corporation in respect to the transaction of its business within the state, just as he must take notice of any mortgage or other incumbrance placed by the corporation upon its property there situated. A state may, and often does, provide that persons furnishing supplies to and doing work for a corporation shall have a lien upon the property of that corporation prior to any mortgage. The validity of such legislation has always been sustained, and they who loan their money to the corporation do so with notice of the limitation, and have no constitutional right of complaint if their mortgage is thereafter postponed to simple contract obligations. If, voluntarily, the corporation placed a mortgage upon all its assets within the state to secure a debt to a single creditor residing within the state, and such mortgage was duly recorded, no one would have the hardihood to say that a resident or citizen of another state could challenge its validity or its priority over his unsecured debt, simply because he was a citizen of another

state, or did not, in fact, know of its existence. And that which is true in case of a mortgage to a single creditor would be equally true in case such foreign corporation placed a mortgage upon its assets to secure every creditor within the state. The number of creditors secured does not change the validity of the security, or affect the matter of notice, or relieve the foreign creditor from the consequences of notice. If the corporation may voluntarily place a mortgage upon all its assets within the state to secure its creditors within the state, why may not the legislature require. as a condition of its doing business, that it give such a mortgage? Is the corporation more powerful than the state? Is a voluntarily executed mortgage more valid than a statute? If, in fact, in pursuance of such a statute, a mortgage to each separate creditor was given and recorded as fast as the corporation came under obligation to him, could a nonresident creditor question the validity of the mortgage or the priority given thereby? And is the effect of the statute in controversy anything other than the imposition upon the assets of the corporation within the state of a single mortgage in favor of home creditors? If written out and recorded, who could question its validity or its priority? The statute, in its spirit and effect, does nothing more. That it is prospective in its operation is immaterial; statutes generally are. The validity of an after-acquired property clause in a mortgage has become settled; none the less valid is it in a statute.

It is conceded, in the opinion of the court, that a foreign insurance corporation might be required to make a special deposit with the state treasurer to secure local policy holders; but if it is within the constitutional power of the state to require such special deposit, and. when made, it becomes in fact a security to the home policy holders, I am unable to appreciate why the state may not require a general mortgage on all the assets within the state as like security. Looking at it simply' as a question of power on the part of the state, what difference can there be between a pledge of a special fund and a mortgage of the entire fund within the state? And that which is true in respect to an insurance corporation must also be true of any other corporation not engaged in interstate commerce business.

Indeed, aside from the demand made by the statutes of certain states of deposits by foreign corporations to secure home creditors, there are frequent illustrations of discrimination based upon the matter of residence. Often nonresident plaintiffs are required to give se curity for costs when none is demanded of resi dent suitors. Attachments will lie in the be ginning of an action, authorizing the seizure of property upon the ground that the defendant is a nonresident, when no such seizure is permitted in case of resident defendants. These and many similar illustrations, which might be suggested, only disclose that it has been accepted as a general truth that a state may discriminate on the ground of residence,