The Pensacola journal. (Pensacola, Fla.) 1898-1985, 1908-01-22
State Authority
Over Foreign Corporations.


A very important decision was rem
:. dered Monday by Judge Mcpherson in
the United States district court al
Kansas City, which will, if sustained
set at naught one of the chief conten,
tions of the advocates of states rights
corporations doing business within the
state.
The decision handed down declared
unconstitutional the Missouri statute
prohibiting foreign corporations from
transferring suits brought against
them from state to federal courts. The
Missouri law, it is stated, provides
specifically that if any foreign or non
resident railway corporation, created
and existing under the laws of any
other state, and doing railway bust
ness from any point in the state to an
other point within the state, shall,
without the written consent of the
other party, remove case from the
or shall without said written consent
Institute any suit against a citizen of
the state in any federal court, then
the secretary of state shall revoke the
license to do business from one point
in the state to any other point in the
state, either in carrying passengers or
freight And, doing such business
shall subject it to a penalty of not
less than $4,000 and not more than
$4,000 for each offense. And such dis
ability shall continue for five years"
Judge Mcpherson, after discussing
the argument of the states rights side
of the case briefly, goes on to give
his reasons for an opposite opinion as
follows:
In the case at bar, license to do
business is not the question. Each of
i the companies invested millions of dol
lars, and it is now III the state and
can not be removed. To prevent it
from doing business means appropri-
ating its property or destroying 1t
without making any compensation
therefor 1t was invited to come into
the state, and was told bv the laws
in force that it should have the same
and like standing. as resident compa-
MES. with benefits as great and with
burdens no greater. After these invest
ments had been made, and which can
not be withdrawn, it is declared by
legislation that no kind of litigation
shall be carried on by it in any court
other than the state courts, but leav-
ing to the railway corporations or
ganized under the laws of the state
the right to go TO the national courts,
70 Foil A.
tions organized under the laws of the
state the right to go to the national
courts with it's litigation of all kinds
arising under the laws or legislation
of the United States.
The state corporation organized I'M
der its laws may sue or be sued IN any
court, state or national, if there is
federal question, but foreign corpo-
ration doing business as competitor
must at all times be subject to the
state courts, or. If it ventures into
national court, then all investors lose
all"
In concluding, Mcpherson holds as
follows:
'sThe Missouri statute of 1907 is void
because it allows a resident company
to sue in the federal court if there is
a federal question. and denies that
d
Regardless of the last preceding
statement, the statute is void because
It seeks to take from the complainant
its right TO bring or remove a case
TO the United States court, which rieht |
IS given by the constitution, and the !
act of congress which by articles !
OF the constitution is declared to be
the supreme law of the land. ANYTHING
in the constitution or laws of anv state |
TO the contrary Notwithstanding"
Perhaps. under tie circumstances |
cited, wherein it is contended that the |
law discriminates between the for
eign and the domestic corporation, |
Judge McPherson's decision will hold |
good. Perhaps also the quasi ex-post |
facto nature of the law itself may |
make its validity a question of grave
doubt
But eliminating these two features
from the case, it is certainly a very |
and a very dangerous prop
osition TO the interests of the people,
that state shall have no authority |
to enforce obedience to its own laws, I
through its own courts, ana no juris- |
diction over the acts of persons or
businesses which are wholly and exs