Source: https://www.legalcrystal.com/case/90959/western-union-telegraph-co-vs-kansas
Timestamp: 2019-04-23 10:26:47+00:00

Document:
by the states, but a constitutional right of every citizen of the United States, and Congress alone can limit the right of corporations to engage therein. Crutcher v. Kentucky, 141 U. S. 47 .
" until such applicant shall have paid to the State Treasurer of Kansas, for the benefit of the permanent school fund, the sum of twenty thousand one hundred dollars ($20,100), being the charter fee provided by law necessary to be paid by a foreign corporation having a capital of $100,000,000. It is further understood, ordered, and provided that nothing herein contained shall apply to nor be construed as restricting in any wise the transaction by the said applicant of its interstate business nor its business for the federal government, but that this grant of authority and requirement as to payment relate only to the business transacted wholly within the State of Kansas."
"The object and effect of his soliciting agency were to swell the volume of the business of the road. It was one of the ' means ' by which the company sought to increase, and doubtless did increase, its interstate passenger traffic. It was not incidentally or remotely connected with the business of the road, but was a direct method of increasing that business. The tax upon it therefore was, according to the principles established by the decisions of this Court, a tax upon a means or an occupation of carrying on interstate commerce, pure and simple."
At the same time, in Norfolk & Western R. Co. v. Pennsylvania, 136 U. S. 114 , the Court held that a license tax exacted by Pennsylvania upon a railroad corporation of another state, engaged in interstate commerce, for keeping an office in Philadelphia was a tax on such commerce, and invalid.
province of the state legislature to exact conditions on which they should carry on their business, nor to require to take out a license therefor. To carry on interstate commerce is not a franchise or a privilege granted by the state; it is a right which every citizen of the United States is entitled to exercise under the Constitution and laws of the United States, and the accession of mere corporate facilities, as a matter of convenience in carrying on their business, cannot have the effect of depriving them of such right, unless Congress should see fit to interpose some contrary regulation on the subject. It has frequently been laid down by this Court that the power of Congress over interstate commerce is as absolute as it is over foreign commerce. Would anyone pretend that a state legislature could prohibit a foreign corporation -- an English or a French transportation company, for example -- from coming into its borders and landing goods and passengers at its wharves, and soliciting goods and passengers for a return voyage, without first obtaining a license from some state officer, and filing a sworn statement as to the amount of its capital stock paid in? And why not? Evidently because the matter is not within the province of state legislation, but within that of national legislation. Inman Steamship Co. v. Tinker, 94 U. S. 238 ,,"
"Nor does it make any difference whether such commerce is carried on by individuals or by corporations. Welton v. Missouri, 91 U. S. 275 ; Mobile County v. Kimball, 102 U. S. 691 ."
"Neither the state courts nor the legislatures, by giving the tax a particular name or by the use of some form of words, can take away our duty to consider its nature and effect. If it bears upon commerce among the states so directly as to amount to a regulation in a relatively immediate way, it will not be saved by name or form. Stockard v. Morgan, 185 U. S. 27 , 185 U. S. 37 ; Asbell v. Kansas, 209 U. S. 251 , 209 U. S. 254 -256. "
"Of course, it does not matter that the plaintiffs in error are domestic corporations, or that the tax embraces indiscriminately gross receipts from commerce within as well as outside of the state. "
To the same effect is Caldwell v. North Carolina, 187 U. S. 622 .
in fact on the value of its property situated within the state. " Postal Telegraph Co. v. Adams, 155 U. S. 688 , 155 U. S. 696 ; Leloup v. Mobile, 127 U. S. 640 , 127 U. S. 649 . On the contrary, it is to be deduced from the adjudged cases that a corporation of one state, authorized by its charter to engage in lawful commerce among the state, may not be prevented by another state from coming into its limits for all the legitimate purposes of such commerce. It may go into the state without obtaining a license from it for the purposes of its interstate business, and without liability to taxation there on account of such business.
" Minnesota v. Barber, 136 U. S. 313 , 136 U. S. 319 ; Robbins v. Shelby County Taxing District, 120 U. S. 489 , 120 U. S. 497 . If the object of Virginia had been to obstruct the bringing into that state, for use as human food, of all beef, veal, and mutton, however wholesome, from animals slaughtered in distant states, that object will be accomplished if the statute before us be enforced."
"We are aware that, in Paul v. Virginia, supra, this Court decided that a state might exclude a corporation of another state from its jurisdiction, and that corporations are not within the clause of the Constitution which declares that 'the citizens of each state shall be entitled to all privileges and immunities of citizens in the several states.' Art. IV, § 2. That was not, however, the case of a corporation engaged in interstate commerce, and enough was said by the Court to show that, if it had been, very different questions would have been presented. "
"A corporation created by Indiana can transact business in Ohio only with the consent, express or implied, of the latter state, 13 Pet. 38 U. S. 519 . 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 or laws of the United States. "
"As the Iowa statute makes the right to a permit dependent upon the surrender by the foreign corporation of a privilege secured to it by the Constitution and laws of the United States, the statute requiring the permit must to held to be void. . . . In all the cases in which this Court has considered the subject of the granting by a state to a foreign corporation of its consent to the transaction of business in the state, it has uniformly asserted that no conditions can be imposed by the state which are repugnant to the Constitution and laws of the United States. "
We need not stop to discuss at length the specific question whether the state can by any regulation make the property of the company outside of Kansas contribute directly to the support of its schools, such being the effect of the requirement that it pay into the state treasury, for the benefit of the state school fund, a given percent of all its capital stock as a condition of its doing local business in Kansas. It is firmly established that, consistently with the due process clause of the Constitution of the United States, a state cannot tax property located or existing permanently beyond its limits. Louisville &c.; v. Kentucky, 188 U. S. 385 , 188 U. S. 398 ; Union Transit Co. v. Kentucky, 199 U. S. 194 , 199 U. S. 209 .
It is said that the conclusions here announced are not in harmony with some cases heretofore decided by this Court. This suggestion is one of serious import, and cannot be passed without consideration, although the careful examination of the cases may greatly extend this opinion. In support of the view just stated, reliance is placed particularly on Osborne v. Florida, 164 U. S. 650 ; Pullman Co. v. Adams, 189 U. S. 420 ; Allen v. Pullman's Palace Car Co., 191 U. S. 171 , and Security Mutual Life Ins. Co. v. Prewitt, 202 U. S. 246 , 202 U. S. 248 .
would seem to be true that the state constitution and the statute combined would impose a burden on commerce between the states analogous to that which was held bad in Crutcher v. Kentucky, 141 U. S. 47 . On the other hand, if the Pullman Company, whether called a common carrier or not, had the right to choose between what points it would carry, and therefore to give up the carriage of passengers from one point to another within the state, the case is governed by Osborne v. Florida, supra. The company cannot complain of being taxed for the privilege of doing local business which it is free to renounce. Both parties agree that the tax is a privilege tax. As the validity of the tax is thus bound up with the effect of the section of the state constitution, we think that the Pullman Company was entitled to know how it stood under the latter, and that a judgment against it could not be justified by reasoning which leaves that point obscure . We are somewhat embarrassed in dealing with the case, because we are not quite certain whether we rightly interpret the intimations upon the subject in the judgment under review. If the Constitution of Mississippi should be read as imposing an obligation to take local passengers, the question for us might be which, if not both, the clause of the Constitution or the tax act, is invalid. But we assume that the opinion of the Supreme Court of Mississippi intends to meet the difficulty frankly, and when it says that the argument against the tax drawn from the above interpretation of the Constitution is fallacious, we take it as meaning that no such interpretation will be attempted in the future, and we take it so the more readily that we can see no ground for a different view. If we are right in our understanding, the judgment of the supreme court was correct for the reason sufficiently stated above."
the state, but not confined to its limits. The cars of the Pullman Company run into and beyond the state as well as between points within the state. The act in its terms applies to cars running through the state as well as those whose operation is wholly intra state. It applies to all alike, and requires payment for the privilege of running the cars of the company, regardless of the fact whether used in interstate traffic or in that which is wholly within the borders of the state. . . . The statute now under consideration requires payment of the sum exacted for the privilege of doing any business, when the principal thing to be done is interstate traffic. We are not at liberty to read into the statute terms not found therein or necessarily implied, with a view to limiting the tax to local business, which the legislature, in the terms of the act, impose upon the entire business of the company. We are of opinion that taxes exacted under the act of 1887 are void as an attempt by the state to impose a burden upon interstate commerce."
"a state has the right to prohibit a foreign corporation from doing business within its borders unless such prohibition is so conditioned as to violate some provision of the federal Constitution, "
I think that the judgment of the Supreme Court of Kansas was right, and it will not take me long to give my reasons. I assume that a state cannot tax a corporation on commerce carried on by it with another state, or on property outside the jurisdiction of the taxing state, and I assume further that, for that reason, a tax on or measured by the value of the total stock of a corporation like the Western Union Telegraph Company is void. But I also assume that it is not intended to deny or overrule what has been regarded as unquestionable since Bank of Augusta v. Earle, 13 Pet. 519, that, as to foreign corporations seeking to do business wholly within a state, that state is the master, and may prohibit or tax such business at will. Security Mutual Life Ins. Co. v. Prewitt, 202 U. S. 246 , 202 U. S. 249 ; Waters-Pierce Oil Co. v. Texas, 177 U. S. 28 ; Paul v. Virginia, 8 Wall. 168. I make the same assumption as to what has been decided twice, at least, since I have sat on this bench -- that the right to prohibit, regulate, or tax foreign corporations in respect of business done wholly within a state is not taken away by the fact that they also are engaged there in commerce among the states. Pullman Co. v. Adams, 189 U. S. 420 ; Allen v. Pullman's Palace Car Co., 191 U. S. 171 .
local business at a loss, for the sake of popularity or other indirect sources of gain. In the last case, the fee would come out of earnings that the state has no right to touch. But these considerations do not reach their aim. To deny the right of Kansas to do as it chooses with the local business is to require the local business to help to sustain that between the states. If the latter does not pay alone, that is no reason for cutting down powers that, up to this time, the states always have possessed. If the telegraph company chooses to pay the fee out of its other earnings, that is its affair. It is master of the situation, and can stop if it sees fit. Exactly this argument was pressed in Pullman Co. v. Adams, 189 U. S. 420 , 189 U. S. 421 , and was rejected without dissent. See Ashley v. Ryan, 153 U. S. 436 , 153 U. S. 444 .
without giving any reason, sees fit simply to prohibit the Western Union Telegraph Company from doing any more local business there, or from doing local business until it has paid $20,100, I shall be curious to see upon what ground that legislation will be assailed. I am aware that the battle has raged with varying fortunes over this matter of unconstitutional conditions, but it appears to me ground for regret that the Court so soon should abandon its latest decision ( Security Mut. Life Ins. Co. v. Prewitt, 202 U. S. 246 ).
204 U. S. 364 , 204 U. S. 394 . In Horn Silver Mining Co. v. New York, 143 U. S. 305 , the corporation showed by its answer that it had employed part of its capital in manufacturing in New York. It had got into the state and was at work there, yet it was held liable to pay a percentage of its entire capital, although the greater part was outside the state. But furthermore, it is a short answer to this part of the argument that, in the present case, according to decisions relied upon by the majority, the state could not have prevented the entry of the corporation, because it entered for the purpose of commerce with other states.

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