Court Opinion

ID: 7040259
Source: CourtListenerOpinion
Date Created: 2022-07-24 06:49:32.841845+00
Date Added: 2024-06-11T16:11:19.658907
License: Public Domain

Buskirk, C. J.
I concur in the judgment rendered, but I am not satisfied with the ground upon which the ruling is placed. I think the legislature intended to provide for the taxation of the stock of the appellee, but failed to provide the necessary machinery to effectuate the purpose proposed. It is very manifest to me that the legislature had no right to impose a tax upon the entire stock of the company,'and having failed to provide the proportionate part which should be subject to taxation in this State, the assessment made can not be sustained. The appellee is a foreign corporation, created by the laws of the State of New York. It must continue to exist in that state. It can not emigrate to this State. Corporations are citizens within the meaning of the clause of the Constitution of the United States which extends the judicial power of the courts of the United States to controversies between the citizens of different states; but they are not citizens within the meaning of that clause which «declares that “the citizens of each state shall be entitled to all the privileges and immunities of citizens in the several states.” They are creatures of local law, and have not even an absolute right of recognition in other states, but depend for that and for the enforcement of their contracts upon the assent of those states, which may be given accordingly on ■such terms as they please. The Farmers, etc., Ins. Co. v. Harrah, ante, p. 236, and the authorities there cited.
In Paul v. Virginia, 8 Wal. 168, the court say: “The recognition of its existence even by other states, and the enforcement of its contracts made therein, depend purely upon the comity of those states—a comity which is never extended where the existence of the corporation or the exercise of its powers are prejudicial to their interests or repugnant to their policy. Having no absolute right of recogni*518tion in other states, but depending for such recognition and the enforcement of its contracts upon their assent, it follows, as a matter of course, that such assent maybe 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.
“ If, on the other hand, the provision of the Constitution could be construed to secure to citizens of each state in other-states the peculiar privileges conferred by their laws, an extraterritorial operation would be given to local legislation, utterly destructive of the independence and harmony of the states. At the present day, corporations are multiplied to an. almost indefinite extent. There is scarcely a business pursued requiring the expenditure of large capital, or the union, of large numbers, that is not carried on by corporations. It is not too much to say that the wealth and business of the country are to a great extent controlled by them. And iij when composed of citizens of one state, their corporate powers and franchises could be exercised in other states without restriction, it is easy to see that, with the advantages thus possessed, the most important business of those states would soon pass into their hands. The principal business of every state would, in fact, be controlled by corporations created by other states.”
In the case of The Western Union Telegraph Co. v. Leib, supra, the Supreme Court of Illinois held that there can be no doubt of the power of the legislature to impose taxation on foreign corporations, to whatever extent it may in its discretion choose, as the condition upon which such corporations shall be allowed to exercise their franchises in the state.
The power of the State being undoubted, in my opinion, a proper regard for the independence of the State, as well as *519the protection of our own citizens in their business affairs, makes it the imperative duty of the legislature to impose upon all foreign corporations exercising their powers and franchises in this State, as conditions to their recognition in this State and the enforcement of their contracts made herein, such restrictions and burdens as justice and sound policy may require.