last to the question, whether an incorporated bank can enjoy their privileges and immunities denied to the citizens of that State. The only adjudications in point are, Beaty. Knowler, 4 Peters, 167, 168; and the Marietta Bank, 2 Rand. 465; the argument of the Virginia court in the latter; the judgment, as well as the argument of this court in the former. The act of the State of Ohio is likewise full to the point, as a practical recognition of the law. The cases sustaining suits on contracts in the States creating the corporations are no contradictions of these two cases. The only pertinent English case, in Lord Raym. & Strange, has been explained. The case of The Propagation Society v. Wheeler, in 8 Wheat. 464, was no more than a question of suit. The Greystock College case, that of The Bank of Marietta, and Beaty v. Knowler, are coincident acknowledgments of the great principle that a corporation has no corporate power beyond the State to which it owes being. In the earnest and sincere advocacy of that principle of universal, international, and municipal law, Mr. Ingersoll said he felt cheered by the assurance that his country is his client.

It would be disastrous to say a corporation cannot go out of Alabama to buy paper to be used in its operations at home. But this is a different case from authorizing a corporation to carry on the business for which it was in corporated in Pennsylvania, out of that State. Could a bank of the State of Pennsylvania go to Mobile, and carry on the business of banking there, to the injury of the domestic banks? The rule of comity has never been applied so as to allow it to interfere with all the laws of a State: its application has ever and only been to particular cases.

If a court has declared that the rule of com. ity does not apply in a particular case, there is a final adjustment of the question as to the force of the foreign law in that case; and the question is settled by the decision of the court. No cases which have been cited for the plaintiffs in error show that by the laws or the decisions of the courts of Alabama, corporations have extraterritorial powers or privileges. The case of the Marietta Bank, decided in Virginia, and reported in 2 Rand. Rep. shows that comity in favor of corporations does not exist. This is evidence that there is no general law which allows the existence of corporations out of the State in which they are chartered.

rations borrow money to enable them to transact and carry on the business for which they were incorporated at home.

The inquiry is whether the United States Bank of the State of Pennsylvania could go into Alabama, and there carry on the business of banking. The Legislature of Alabama would, in positive terms, have refused this privilege, if it had been applied for. A judge in Alabama, knowing this, should have felt himself bound by his judicial duties to apply a principle which would have been applied by the Legislature.

Mr. Vande Gruff, for J. B. Earle, one of the defendants in error, stated that the act of the Legislature of Alabama which declared the All the questions of the rights of corporastatutes of the State in force as they are con- tions to go abroad to borrow money, do not aptained in Aiken's Digest, provides that all stat-ply to the case before the court. Those corpoutes, laws, and parts of laws, not included in the Digest, are repealed. This repealed the Act of 1827 relative to banking, and other laws on the same subject. This Act was passed in 1832 Aiken's Digest, 301. There is another act of the Legislature of Alabama which makes bills of exchange and promissory notes negotiable, and declares them to be prima facie evidence of consideration. Aiken's Digest, 327. Two questions have been agitated in these One may not be necessary to their decision. The question of comity may be one which on general principles may embarrass. It is believed that comity between nations is as necessary to their intercourse, as our breath is to our existence; but it is not understood how it is to be limited. Is a law of Pennsylvania to be applied over the whole world? The rule that corporations have not an extraterritorial 583*] existence is established: but the principles wnich are claimed on the part of the plaintiffs in error, would give a universal existence and unlimited privileges to such institu

causes.

tions.

The general rule is, that the laws of a particular State have authority only within the territory of the State; and the exception to the rule prevails only when the laws have been adopted in a foreign, or another State or country. If this principle is correct, it will be the duty of the counsel for the plaintiff in error to show that the law of Pennsylvania incorporating the United States Bank is a law which has been adopted in the State of Alabama.

A railroad company may buy iron abroad, for the purpose of constructing their railroad at home. This appears to be a contract which will be sustained by the comity of nations. It presents a different question from this; which is, whether the United States Bank of Pennsylvania can go abroad to do acts which are only authorized in the State.

Is it reasonable that if large profits are to be made in Alabama, that a part of these profits should not be paid to the State of Alabama, for the privilege of carrying on banking? This is just, and it has been the course of leg- [*584 islation in all the States to receive a bonus from banking corporations, or to claim a portion of the profits of their operations on granting charters of incorporation.

In England corporations can only exist by prescription, or be established by grants from the king, or legislative enactment. Could a foreign corporation go to England and carry on its business there, until it should be expressly excluded by the decision of a court, or by an act of Parliament?

Another point in this case is to be regarded. The act of the Legislature of Pennsylvania establishes the United States Bank at Philadel phia, and authorizes branches in the State. The law gives it no powers to be exercised out of the State. This is a sufficient evidence of the restriction of its existence to the State of Pennsylvania.

As to that feature in the case before the court which depends on the existing constitution and laws of Alabama prohibiting banking, the court will be obliged to decide what banking is. The agreed case shows that a part of the capital of the bank was transferred to Alabama

to buy bills of exchange; and the question is, whether buying bills of exchange is banking.

Discounting bills and notes, and receiving money on deposit, are not exclusively banking. Every bank, at the time of the incorporation of the State bank of Alabama, dealt in bills of exchange. The object of the charter of the bank was to include the discounting and purchase of bills of exchange, as a part of the operations of the bank. The bank was to have every opportunity of making profits which any other bank possessed.

It is not necessary to go into the question of the rights of individuals to purchase bills of exchange. The question before the court is, whether foreign corporations have such rights. Speculations on the rights of individuals only embarrass the case. To show that the dealing in bills of exchange is banking, Mr. Vande Gruff cited Postlethwait's Universal Dictionary of trade and commerce, titles Discount, Banking; 15 Johns. Rep. 390; Tomlin's Law Dictionary, title Bank.

purchase the said bill sued on, in the city of Mobile, State aforesaid, for the benefit of said bank, and with their funds, and to remit said funds to the said plaintiffs."

If the court shall say that the facts consti. tute a defense to this action, judgment will be given for the defendant, otherwise for plaintiffs, for the amount of the bill, damages, interest, and cost; either party to have the right of appeal or writ of error to the Supreme Court upon this statement of facts, and the judgment thereon."

Upon this statement of facts the court gave judgment for the defendant; being of opinion that a bank incorporated by the laws of Georgia, with a power, among other things, to pur chase bills of exchange, could not lawfully ex ercise that power in the State of Alabama; and that the contract for this bill was therefore void, and did not bind the parties to the payment of the money.

It will at once be seen that the questions brought here for decision are of a very grave How can the plaintiff say the purchase of character, and they have received from the bills of exchange is not banking, when the law court an attentive examination. A multitude of their existence gives them no other powers of corporations for various purposes have been but those of a bank. They are here found re- chartered by the several States; a large portion mitting their funds of the bank to Alabama to of certain branches of business has been transbuy bills. Can they say this is not a banking acted by incorporated companies, or through operation? It was the object of the act incor- their agency; and contracts to a very great porating the bank to give it the advantages of amount have undoubtedly been made by differ buying bills of exchange, which composes a ent corporations out of the jurisdiction of the large part of the profits of banking operations; particular State by which they were created. and this is precisely what they have done in the In deciding the case before us, we in effect deThe constitution of termine whether these numerous contracts are case before the court. Alabama on this subject should receive a liberal valid or not. And if, as has been argued at the construction, as the whole support of the gov-bar, a corporation, from its nature and charac ernment of Alabama is derived from the banking operation of the State banks.

Mr. Chief Justice Taney delivered the opinion of the court:

These three cases involve the same principles, 585*] and have been brought before us by writs of error directed to the Circuit Court and southern district of Alabama. The two first have been fully argued by counsel, and the last submitted to the court upon the arguments offered in the other two. There are some shades of difference in the facts as stated in the different records, but none that can affect the decision. We proceed therefore to express our opinion on the first case argued, which was The Bank of Augusta v. Joseph B. Earle. The judgment in this case must decide the others.

The questions presented to the court arise upon a case stated in the Circuit Court in the following words:

"The defendant defends this action upon the following facts, that are admitted by the plaintiffs: that plaintiffs are a corporation, incorporated by an act of the Legislature of the State of Georgia, and have power usually conferred upon banking institutions, such as to That the bill purchase bills of exchange, etc. sued on was made and indorsed, for the purpose of being discounted by Thomas M'Gran, the agent of said bank, who had funds of the plaintiffs in his hands for the purpose of purchasing bills, which funds were derived from bills and notes discounted in Georgia by said plaintiffs, and payable in Mobile; and the said M'Gran, agent as aforesaid, did so discount and 306

ter, is incapable of making such contracts; or if they are inconsistent with the rights and sovereignty of the States in which they are made, they cannot be enforced in the courts of justice.

*Much of the argument has turned [*586 on the nature and extent of the powers which belong to the artificial being called a corporation; and the rules of law by which they are to be measured. On the part of the plaintiff in error, it has been contended that a corporation composed of citizens of other States are entitled to the benefit of that provision in the Constitution of the United States which declares that "The citizens of each State shall be entitled to all privileges and immunities of citizens in the several States;" that the court should look behind the act of incorporation, and see who are the members of it; and, if in this case it should appear that the corporation of the Bank of Augusta consists altogether of citizens of the State of Georgia, that such citizens are entitled to the privileges and immunities of citizens in the State of Alabama: and as the citiizens of Alabama may unquestionably purchase bills of exchange in that State, is is insisted that the members of this corporation are entitled to the same privilege, and cannot be deprived of it even by express provisions in the Constitution or laws of the State. The case of The Bank of the United States v. Deveaux, 5 Cranch, 61, is relied on to support this posi tion.

It is true, that in the case referred to, this court decided that in a question of jurisdiction they might look to the character of the persons Peters 13.

precisely what the incorporating act has made it to derive all its powers from that act, and to be capable of exerting its faculties only in the manner which that act authorizes.

"To this source of its being, then, we must recur to ascertain its powers, and to determine whether it can complete a contract by such communications as are in this record."

In the case of Dartmouth College v. Woodward, 4 Wheat. 636, the same principle was again decided by the court. "A corporation," said the court, "is an artificial being, invisible, intangible, and existing only in contemplation of law. Being a mere creature of the law, it possesses only those properties which the charter of its creation confers upon it, either expressly, or as incidental to its very existence."

composing a corporation; and if it appeared that they were citizens of another State, and the fact was set forth by proper averments, the corporation might sue in its corporate name in the courts of the United States. But in that case the court confined its decision, in express terms, to a question of jurisdiction; to a right to sue; and evidently went even so far with some hesitation. We fully assent to the propriety of that decision, and it has ever since been recognized as authority in this court. But the principle has never been extended any farther than it was carried in that case, and has never been supposed to extend to contracts made by a corporation, especially in another sovereignty. If it were held to embrace contracts, and that the members of a corporation were to be regarded as individuals carrying on business in their corporate name, and therefore And in the case of The Bank of the United entitled to the privileges of citizens in matters States v. Dandrige, 12 Wheat. 64, where the of contract, it is very clear that they must at questions in relation to the powers of corporathe same time take upon themselves the liabili- tions and their mode of action were very careties of citizens, and be bound by their contracts fully considered, the court said: "But whatev in like manner. The result of this would be to er may be the implied powers of aggregate cormake a corporation a mere partnership in busi-porations by the common law, and the modes ness, in which each stockholder would be liable by which those powers are to be carried into to the whole extent of his property for the debts operation, corporations created by statute must of the corporation; and he might be sued for depend both for their powers and the mode of them in any State in which he might happen to exercising them, upon the true construction of be found. The clause of the Constitution re- the statute itself." ferred to certainly never intended to give to the citizens of each State the privileges of citizens in the several States, and at the same time to exempt them from the liabilities which the exercise of such privileges would bring upon individuals who were citizens of the State. This would be to give the citizens of other States far higher and greater privileges than are enjoyed by the citizens of the State itself. Besides, it would deprive every State of all control over 587*] the extent of corporate franchises proper to be granted in the State; and corporations would be chartered in one, to carry on their operations in another. It is impossible upon any sound principle to give such a con-izes it, in general terms, to deal in bills of exstruction to the article in question. Whenever a corporation makes a contract, it is the contract of the legal entity; of the contract of created by the charter; and not the contract of the individual members. The only rights it can claim are the rights which are given to it in that character, and not the rights which belong to its members as citizens of a State; and we now proceed to inquire what rights the plaintiffs in error, a corporation created by Georgia, could lawfully exercise in another State; and whether the purchase of the bill of exchange on which this suit is brought was a valid contract, and obligatory on the parties.

The nature and character of a corporation created by a statute, and the extent of the powers which it may lawfully exercise, have upon several occasions been under consideration in this court.

In the case of Head and Amory v. The Providence Insurance Company, 2 Cranch, 127, Chief Justice Marshall, in delivering the opinion of the court, said, "without ascribing to this body, which in its corporate capacity is the mere creature of the act to which it owes its existence, all the qualities and disabilities annexed by the common law to ancient institutions of this sort, it may correctly be said to be

It cannot be necessary to add to these authorities. And it may be safely assumed that a corporation can make no contracts, and do no acts either within or without the State which creates it, except such as are authorized by its charter; and those acts must also be done by such officers or agents, and in such manner as the charter authorizes. And if the law creating a corporation, does not by *the [*588 true construction of the words used in the charter, give it the right to exercise its powers beyond the limits of the State, all contracts made by it in other States would be void.

The charter of the Bank of Augusta authorchange; and, consequently, gives it the power to purchase foreign bills as well as inland; in other words, to purchase bills payable in another State. The power thus given, clothed the corporation with the right to make contracts out of the State, in so far as Georgia could confer it. For whenever it purchased a foreign bill, and forwarded it to an agent tc present for acceptance, if it was honored by the drawee, the contract of acceptance was neces sarily made in another State; and the general power to purchase bills without any restriction as to place, by its fair and natural import, authorized the bank to make such purchases, wherever it was found most convenient and profitable to the institution; and also to employ suitable agents for that purpose. The purchase of the bill in question was, therefore, the exercise of one of the powers which the bank possessed under its charter; and was sanctioned by the law of Georgia creating the corporation, so far as that State could authorize a corporation to exercise its powers beyond the limits of its own jurisdiction.

But it has been urged in the argument that, notwithstanding the powers thus conferred by the terms of the charter, a corporation, from the very nature of its being, can have no au

So far as any of them have acted on this subject, it is evident that they have regarded the comity of contract, as well as the comity of suit, to be a part of the law of the State, unless restricted by statute. Thus a law was passed by the State of Pennsylvania, March 10, 1810, which prohibited foreigners and foreign corporations from making contracts of insurance against fire and other losses mentioned in the law. In New York, also, a law was passed, March 18, 1814, which prohibited foreigners and foreign corporations from making in that State insurances against fire; and by another law, passed April 21, 1818, corporations chartered by other States are prohibited from keeping any office of deposit for the purpose of discounting promissory notes, or carrying on any kind of business which incorporated banks are authorized by law to carry on. The prohibition of certain specified contracts by corporations in these laws, is by necessary implication an admission that other contracts may be made by foreign corporations in Pennsylvania, and New York; and that no legislative permission is necessary to give them validity. And the language of these prohibitory acts most clearly indicates that the contracts for- [*592 bidden by them might lawfully have been made before these laws were passed.

Maryland has gone still farther in recognizing this right. By a law passed in 1834, that State has prescribed the manner in which corporations not chartered by the State, "which shall transact or shall have transacted business" in the State, may be sued in its courts upon contracts made in the State. The law assumes in the clearest manner that such contracts were valid, and provides a remedy by which to enforce them.

otherwise. The intimate union of these States, We turn in the next place to the legislation as members of the same great political family; of the States. the deep and vital interests which bind them so closely together; should lead us, in the absence of proof to the contrary, to presume a greater degree of comity, and friendship, and kindness towards one another, than we should be authorized to presume between foreign nations. And when (as without doubt must occasionally happen) the interest or policy of any State requires it to restrict the rule, it has but to declare its will, and the legal presumption is at once at an end. But until this is done, upon what grounds could this court refuse to administer the law of international comity between these States? They are sovereign States, and the history of the past, and the events which are daily occurring, furnish the strongest evidence that they have adopted towards each other the laws of comity in their fullest extent. Money is frequently borrowed in one State by a corporation created in another. The numerous banks established by different States are in the constant habit of contracting and dealing with one another. Agencies for corporations engaged in the business of insurance and of banking have been established in other States, and suffered to make contracts without any objection on the part of the State authorities. These usages of commerce and trade have been so general and public, and have been practiced for so long a period of time, and so generally acquiesced 591*] *in by the States, that the court cannot overlook them when a question like the one before us is under consideration. The silence of the State authorities, while these events are passing before them, show their assent to the ordinary laws of comity which permit a corporation to make contracts in another State. But we are not left to infer it merely from the general usages of trade, and the silent acquiescence of the States. It appears from the cases cited in the argument, which it is unnecessary to recapitulate in this opinion, that it has been deeided in many of the State courts, we believe in all of them where the question has arisen, that a corporation of one State may sue in the courts of another. If it may sue, why may it not make a contract? The right to sue is one of the pow-Congress of June 23, 1836, 4 Story's Laws, ers which it derives from its charter. If the courts of another country take notice of its existence as a corporation, so far as to allow it to maintain a suit, and permit it to exercise that power, why should not its existence be recognized for other purposes, and the corporation permitted to exercise another power which is given to it by the same law and the same Bovereignty-where the last-mentioned power does not come in conflict with the interest or policy of the State? There is certainly nothing in the nature and character of a corporation which could justly lead to such a distinction, and which should extend to it the comity of suit, and refuse to it the comity of contract. If it is allowed to sue, it would, of course, be permitted to compromise, if it thought proper, with its debtor; to give him time; to accept something else in satisfaction; to give him a release, and to employ an attorney for itself to conduct its suit. These are all matters of contract, and yet are so intimately connected with the right to sue, that the latter could not be effectually exercised if the former were denied.

In the legislation of Congress, also, where the States and the people of the several States are all represented, we shall find proof of the general understanding in the United States that by the law of comity among the States, the corporations chartered by one were permitted to make contracts in the others. By the Act of

2445, regulating the deposits of public money, the Secretary of the Treasury was authorized to make arrangements with some bank or banks, to establish an agency in the States and territories where there was no bank, or none that could be employed as a public depository, to receive and disburse the public money which might be directed to be there deposited. Now, if the proposition be true that a corporation created by one State cannot make a valid contract in another, the contracts made through this agency in behalf of the bank, out of the State where the bank itself was chartered, would all be void, both as respected the contracts with the government and the individuals who dealt with it. How could such an agency, upon the principles now contended for, have performed any of the duties for which it was established?

But it cannot be necessary to pursue the argument further. We think it is well settled that by the law of comity among nations, a corporation created by one sovereignty is permitted to make contracts in another, and to sue in its courts; and that the same law of comity