The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1899-07-23


between foreign corporations and oul
own citizens was removed into the Fed
eral courts with attendant delays and
expense created demand for some pre-
ventive legislation. This demand was
met by the preparation and passage OF
an act entitled An Act to provide a
manner in which foreign corporations
may become domestic corporation The
act might appropriately be called one to
compel foreign corporations to domesfl-
cate.
The law is a wise and wholesome one
and will remain on the statute book of
the State
No one, who has spoken of the Craig
Act, had attempted to disguise its palpa-
BILE design, its sole purpose. to prevent
the removal of causes to Federal courts
by certain class of foreign corporations.
Insurance companies rarely remove Il
cause to the Federal court. They pay a
thousand claims (of which the public
never hear without a resort to the courts
to one where there is Il suit, and III most
of the cases where they are sued, the
amount i'll controversy Is not large
enough to authorize Il removal. two thou
sand dollars being the limit. The franz
ers of the constitution of the United
States wisely foresaw what has come to
pass-that it was necessary to constitute
Il court for the trial of causes between
citizens of different States, in order that
justice might he done. They did not
consider the matter of the additional eX-
pense necessarily attending a trial of Il
cause in such court, Ito which both par
ties wotld be subjected, the nonresident
being quite as far away from home as
the citizen of the iState,) as sufficient
reason for committing the nonresident
to domestic forum where the citizen
would have every advantage of the for
eigner. The right of removal was secur-
ed to the nonresident corporation, SIM
ply in order to enable it to secure a fair
trial in IL court where there could be no
prejudice or local influence.
The question is, can Il State by legis-
lation defeat this right, which is re-
served by the Federal legislation under
the Federal Constitution. The courts
have spoken with no uncertain sound, i'll
holding that this cannot be done.
The State of South Carolina. on March
9th, 1896, enacted Il statute of which the
following is a copy:
Section /. BE it enacted by the Gen
eraI Assembly Of the State of South Car
Oliiia, that each and every railroad COM
pany, or railroad corporation created or
organized under or by virtue of any gov
ernment other than that of this State,
desiring to own property or carry on bus
mess, or exercise any corporate franchise
in this State of any kind whatsoever,
shall first file in the office of the Sec
retary of State a copy of its charter,
paying therefor such fees as may be re-
quired in the office of the register of
mesne conveyanccs or clerk Of common
pleas in each county in which such COM
,1,any or corporation desires or proposes
to carry on its business or to acquire or
own property. Such copy of the char
ter shall be authenticated i'm the manner
directed by law for the authentication of
the statutes of the State or country un-
der whose laws such corporation is char
tered or organized.
Section 2. That if any such charter
or any part thereof, filed as aforesaid in
the office of the Secretary of State, shall
be in contrayention or violation of the
laws of this State, such charter or such
parts thereof so in conflict with the laws
-
Section g. That when Il foreign cor
poration complies with the provisions and
requirements of this act it shall ipso fac
to become domestic corporation, and
shall enjoy the rights and be subject to
the jurisdiction of this State. as fully as
if it were originally created under the
laws of the State of South Carolina
Section t. That it shall be unlawful!
for any such foreign corporation to do
business or attempt to do business, IN
this State, without first having complied
with the requirements of this act, and
any violation Of this act shall be punish
ed by the forfeiture to the State by the
party offending of a penalty Of five hun
dred dollars. to be recovered by suit in
the court of common pleas for any cOun'
ty i'm which such offender does or at
tempts to do business, or in any other
court of competent jurisdiction.
Approved the ninth day of March. A.
D.. 1896"
The Southern Railway was sued in.the
State court Of South Carolina by one
Hollingsworth, after it had complied
with the provisions of the act The rail
road company removed the case to the
Federal court A motion to remand
was made. on the ground that by the
operation of the statute. and the action
Of the defendant Hereunder, it had be-
come in all respects a corporation of the
State of South Carolina. and had lost
any right of removal to the Federal
court.
Judge Simonton, Circuit Judge. held
in this case: that under the "Act March
9th. 1896 which nrescribes the necessary
steps to authorize n foreign corporation
to transact business in the State. and
provides that any foreign corporation
complying with such requirements shall
become a domestic corporation, may sue
and be sued in the State courts. and shall
be supject to the jurisdiction of the State
as fully as though originally created nm
der the laws of South Carolina a foreign
corporation. does not by complying with
such statute, become citizen of South
Carolina so as to affect the jurisdiction
Of the United States courts over it,"
He said: 'If the intent Of tbs statute
is to impose as a condition upon foreign