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Opinion of the Court.
by the common law, and the modes by which those powers are to be carried into operation, corporations created by statute, must depend, both for their powers and the mode of exercising them, upon the true construction of the statute itself.' "
The power of the bank to deal in bills of exchange in the State of Alabama was sustained, but it was put upon the ground that neither the policy of the State nor its laws forbade it, and that the law of international comity which prevailed there sustained it.
In Paul v. Virginia, 8 Wall. 168, 181, the dependent and derivative rights of corporations were again declared. Bank of Augusta v. Earle was quoted from, and it was again decided that a corporation is the mere creation of local law, and can have no legal existence beyond the limits of the sovereignty where created, and the recognition of its existence in other States and the enforcement of its contracts made therein depend purely upon the comity of those States.
“Having no absolute right of recognition in other States, but depending for such recognition and enforcement of its contracts upon their assent, it follows, as a matter of course, that such assent may be granted upon such terms and conditions as those States may think proper to impose. They may exclude the foreign corporation entirely; they may restrict its business to particular localities, or they may exact such security for the performance of its contracts with their citizens as in their judgment will best promote the public interest. The whole matter rests in their discretion."
And it was also decided that a corporation did not have the rights of its personal members, and could not invoke that provision of section 2, article 4, of the Constitution of the United States, which gave to the citizens of each State the privileges and inninunities of citizens of the several States. See also Pembina Mining Co. v. Penn, 125 U. S. 181 ; Ducat v. Chicago, 10 Wall. 410. And it has since been held in Blake v. McClung, 172 U. S. 239, and in Orient Insurance Company v. Daggs, 172 U. S. 557, that the prohibitive words of the Fourteenth Amendment have no broader application in that respect.
In Blake v. McClung, a Virginia corporation was denied the
Opinion of the Court.
right to participate upon terms of equality with Tennessee creditors in the distribution of the assets of a British corporation in the hands of a Tennessee court.
In Orient Insurance Co. v. Daggs, the right of the company, a Connecticut corporation, to limit by contract its liability to the actual damages caused by fire, notwithstanding a provision in a statute of Missouri making the measure of damages in case of total loss the value of the property stated in the policy, was denied.
See also Pembina Mining Co. v. Penn, 125 U. S. 181.
In Hooper v. California, 155 U. S. 648, conditions upon a foreign corporation were considered, and a statute of California sustained, making it a misdemeanor for a person in that State to procure insurance for a resident in the State from an insurance company not incorporated under its laws, and which had not filed a bond required by the law of the State. . All preceding cases were cited, and it was assumed as settled “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.” And the exception to the rule was stated to be “only cases where a corporation created by one State rests its right to enter another and engage in business therein upon the Federal nature of its business."
This exception was recognized in the case at bar and the business of the plaintiff in error of a Federal nature excluded from the operation of the judgment.
The pending case might be rested on Fooper v. California, simply as authority, and we have entered upon the reasoning upon which it was based, because its application to the contentions of the plaintiff in error is not properly estimated in the arguments of counsel.
Nor can the plaintiff in error claim an exemption from the principle on the ground that the permit of the company was a contract inviolable against subsequent legislation by the State. That contention was presented to the Court of Civil Appeals, and the court properly replied : “ After the act of 1889 went into effect the State granted to appellant [plaintiff in error here] authority to engage in its business within the State for a
Opinion of the Court,
period of ten years. The act of 1889, as well as that of 1895, provides for the forfeiture of the permit of a foreign corporation which may violate any of the provisions of the statute.
The act in force when the appellant entered the State informed it that for a violation of its terms the permit to do business here would be forfeited. This provision of the law was as much a part of the obligation, and as binding upon the appellant, as if it had been expressly made part of the permit.”
The statute of 1889, therefore, was a condition upon the plaintiff in error within the power of the State to impose, and whatever its limitations were upon the power of contracting, whatever its discriminations were, they became conditions of the permit and were accepted with it.
The statute was not repealed by the act of 1895. The only substantial addition made by the latter was to exclude from its provisions organizations of laborers, for the purpose of maintaining a standard of wages. The Court of Civil Appeals said of it, p. 18:
“If the clause in the act of 1895 which exempts from its operation labor organizations for the purpose of maintaining their wages would render that statute obnoxious to the Fourteenth Amendment to the Constitution, wbich we do not think the case, the entire act would be void, and could not operate as a repeal of the former law of 1889; and so that if it should be determined that this latter act was unconstitutional, the former act would be in force, and would not be subject to the objections urged against it, for the reasons stated by us in passing upon these objections, and therefore the State could maintain a case under this act."
In other words, as to that act the situation is this: It is either constitutional or unconstitutional. If it is constitutional, the plaintiff in error has no legal cause to complain of it. If unconstitutional, it does not affect the act of 1889, and that, as we have seen, imposes valid conditions upon the plaintiff in error, and their violation subjected its permit to do business in the State to forfeiture.
MR. JUSTICE HARLAN dissented.
Opinion of the Court.
IN RE GROSSMAYER, PETITIONER.
No. 4. Submitted Febuary 26, 1900. – Decided March 26, 1900.
If the Circuit Court of the United States, after sufficient service on a defend.
ant, erroneously declines to take jurisdiction of the case or to enter judgment therein, a writ of mandamus lies to compel it to proceed to a determination of the case, except where the authority to issue a writ of
mandamus has been taken away by statute. Under articles 1223 and 1224 of the Revised. Statutes of Texas of 1895, an
action cannot be maintained against a partnersbip, consisting of citizens of other States, by service upon an agent within the State.
The statement of the case will be found in the opinion of the court.
Mr. Thomas Harvey Clark for Grossmayer.
Mr. William W. MacFarland opposing.
MR. Justice Gray delivered the opinion of the court.
This is a petition for a writ of mandamus to the District Judge of the United States for the Eastern District of Texas, holding the Circuit Court of the United States for that district, to enter judgment by default for the petitioner in an action brought by him in that court.
The proceedings in that action, as appearing by the petition for mandamus, and by the judge's return to a rule heretofore issued by this court, were as follows: The petitioner, a citizen of the State of Texas, and a resident of Galveston in the Eastern District of Texas, brought an action in that court to recover damages in the sum of $30,000, against Robert G. Dun, a citizen of the State of New York, and Robert D. Douglas, a citizen of the State of New Jersey, alleging that the defendants carried on business in that district, and throughout the United States, as an association under the name of R. G. Dun and Company,
Opinion of the Court.
and praying for a summons to said R. G. Dun and Company, to be served upon John Fowler, alleged to be a resident of Galveston and the local agent of said R. G. Dun and Company. A summons was issued accordingly, and the marshal returned that he bad served it upon Fowler as such local agent. The defendants baving filed no plea, answer or demurrer in the action, the plaintiff moved for a judgment by default. The defendants then, appearing specially for the purpose, filed a plea to the jurisdiction of the court, because the defendants were not and never had been a corporation, but were private individuals, citizens of the States of New York and New Jersey respectively and not of the State of Texas; and in support of this plea filed an affidavit of Fowler to the truth of the facts therein stated. And the court thereupon entered the following order: “On this day came the plaintitf, by his attorney, and moved the court that judgment by default be entered against the defendant herein for the want of an appearance or answer, as required by law; and the said motion having been heard and argued before the court, and the court being sufficiently advised, it is considered and ordered by the court that the said motion be denied."
Two objections are made to the issue of a writ of mandamus: 1st. That, if the decision of the Circuit Court was erroneous, the remedy was by writ of error, and not by mandamus. 2d. That the Circuit Court had no jurisdiction of the action, for want of due service upon the defendants.
The objection to the form of remedy cannot be sustained. A writ of mandamus, indeed, cannot be used to perform the office of an appeal or writ of error, to review the judicial action of an inferior court. A final judgment of the Circuit Court of the United States for the defendant upon a plea to the jurisdiction cannot therefore be reviewed by writ of mandamus. But if the court, after sufficient service on the defendant, erroneously declines to take jurisdiction of the case or to enter judgment therein, a writ of mandamus lies to compel it to proceed to a determination of the case, except where the authority to issue a writ of mandamus has been taken away by statute. Ex parte Schollenberger, 96 U. S. 369; Pennsylvania Co., petitioner, 137 U. S. 451–453; American Construction Co. v. Jacksonville &c.,