Year: 1879

FOREIGN CORPORATIONS IN INDIANA.


II has been recently observed that the State
of Indiana has no flag. There seems to be
good reason for this. One hardly understands
WHY State should have flag. or any other
emblem or pretence of existence as BODY
capable of ruling itself or anything or any
body else which can place on Its statute
books such an act as the one relating to for
eign corporations, passed by the Indiana
Legislature at its last session The language
of this act Is so peculiar, and its spirit so
remarkable, that it may be well to copy 1t IN
full.


An Act Touching Foreign Corporations, and provid-


Ing that certan acts thereof shall Work forfeitures


SECTION l. Be enacted by the General Assembly Of
the STATE of Indiana that foreign corporation now
doing or ransactng that shall hereafter do or trans
acl any business in this State or acquire any right le'
interest In or lien upon real estate in this state that
shall transfer or be transferred from any court
of this state to any OF the United states save by
regular OF appeal after trial in the state courts
any action commenced by against such corporation
In any conrt OF this State by any citizen Of
resident thereof, or that shai commence Ill
any court of the Unlted States I'm this State
ON any contract made in this state La
bIlty accrued therein any suit action against any
resident OF the state Of Indiana snail tHereny
forfeit all right and auhOryto do or transact business
In this state, and all contracts between su2h corpora
tons and residents OF TINS state maze aItei


the Of this snail he rendered void as In favor
Of such corporation but enforceable b. such cizen AT
his election.


SEC The provisions OF this act shall be and the same
arc hereby made conditions upon which such CORPORA
lions may be authorized to do business in TINS State or
hold iitIe liens on real estate therein.


Obviously the intention Of this enactment
was TO deprive foreign corDorltioDS, which
had loaned money in the State Of Indiana
upon real estate mortgages, OF the remedy to
which they have by experience been taught
to look for redress. As long as a corporation,
being nonresident of the State, could enforce
lts rights against citizens of the State, or its
claims against their property mOrtgaged to il,
by proceedings in United States Courts, there
was reasonable prospect that well-secured
claims could be enforced. The object of the
act was not so much to defeat as to prevent
a resort TO the United States Courts In this
respect it differs from the enrichment in Mis-
souri,, recently mentioned, which was obviously
intended to bring about direct conflict of
authority between the State and the United
States Courts.


Indiana proposes to deprive foreign corpo-
rations of any right TO do business III that
State, or to hold any real estate, or liens
thereon, if it shall exercise the rights to which
it is entitled under the laws of the United
States. 1t furlher provides that /" all con-
tracts between such corporations and citi-
"zens and residents of this State, made after
"the passage of this act, shall be rendered
:" void rs in favor OF such corporation, but
enforceable by such citizen at his election"
Undoubtedly State enactment of this char
actcr is unconstitutional. IL assumes in the
b0ldest manner possible not only TO impair
the obligation OF contracts, bat to set aside
and nullify altogether any contracts that
may be made In favor of certain
corporations. The State has no power to in
terfere with single one of those contracts,
or to prevent their enforcement, and still less
has it the power TO interfere with any or all
contracts that may be made by corporations
Nevertheless it is probable thar few foreign
corporations will care tn contest the question
further than may be necessary to enforce
claims now existing. On account of this act,
we learn that several Of the largest Eastern
insurance companies, which have loaned many
millions each year III the State of Indiana,
have determined to withdraw their business
from that State altogether, and are closing
all loans there existing rs speedily as posi-
ble 1t is easy to understand that a great
deal Of personal hardship aud suffering must
result, but those are responsible who have
placed 50 foolish an act upon the statute
book, aud not those who are thereby COM
PEELED to withdraw their business. 1t would
be wanton rlShness for insurance companies to
continue to loan money in a State which pro-
vides that il they resort to the remedies
which the Constitution md the laws of the
country give them, contracts between them
and citizens of the Stite shall be void as in
favor of the corporations, and yet enforceable
by the citizens at their choice. Mean
while, the people of other States may see, in
this most extraordinary performance, another
Illustration OF the beauties of Democratic rule.
Aud it will not surprise any Que to find that
a measure of kindred character designed to
promote in all the States a similar resistance