Court Opinion

ID: 6543043
Source: CourtListenerOpinion
Date Created: 2022-07-19 22:17:20.190494+00
Date Added: 2024-06-11T15:55:46.605969
License: Public Domain

BatteE, J. The White Sewing Machine Company was a corporation organized and doing business under the laws of the State of Ohio, and was engaged in the selling of sewing machines and other goods at Cleveland, in that State. A. I. Julian and N. H. Gunn were citizens of Raulkner county, in this State. On or about the 6th day of August, 1888,- the Sewing Machine Company entered into a contract with Julian, by which the company undertook and bound itself to sell sewing machines and the component parts thereof to Julian at stipulated prices, on a credit, and Julian agreed to canvass Raulkner county or cause it to be canvassed “ with horse and wagon, exclusively, for the sale of the White sewing machines.” Julian was to order the machines, or the component parts of the same, when he desired them to be sent to him. At the same time Julian, as principal, and Gunn, as surety, executed a bond to the Sewing Machine Company, conditioned, among other things, that Julian would pay all sums of money that he would be owing to the company for sewing machines or otherwise. After this the company, pursuant to the terms of its contract and on the faith of the bond executed to it, sold and shipped to Julian a large number of sewing machines and other property, and Julian became indebted to it on account thereof in a large sum of money. Julian failing to pay, the company brought this action on the bond against Gunn to recover the same, or a part thereof. The only defense made by Gunn was, the company had not, at the time the bond was executed, filed any certificate in the office of the Secretary of the State of Arkansas, designating an agent upon whom process could be served, and its principal place of business in this State. Evidence was, however, adduced at the trial tending to prove, among other things, the facts before stated, and that the machines and other property were sold by the company in Ohio and shipped to Julian in this State. The court below held that thése transactions were a part of the inter-state commerce of the United States, and were not affected by the laws of this State, and rendered judgment in favor of plaintiff against the defendant, and he appealed. Appellant contends that the bond sued on is void under the act of the general assembly of April 4th, 1887. That act declares that, before any foreign corporation shall begin to carry on business in this State, it shall, by a certificate under the hand of the president and seal of such company, filed in the office of the Secretary of State, designate an agent, who shall be a citizen of the State, upon whom process may be served, and also state therein its principal place of business in this State ; and provided that if any such corporation shall fail to file such certificate, all its contracts with citizens of this State shall be void as to the corporation, and shall not be enforced in any of the courts of this State in favor of the corporation. It is conceded that the certificate required by that act was not filed by the appellee until after the debt sued on matured. Was the bond void ? In Paul v. Virginia, 8 Wall. 168, the court, speaking of a foreign corporation, said : “ 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 recognition. 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 may be 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. ” But this rig'ht of the State cannot be so exercised as to interfere with the power of Cong'ress to reg'ulate inter-state commerce. In Paul v. Virginia the corporation involved in litigation was.an insurance company, and was not engaged in inter-state commerce. In speaking of the power to regulate commerce, in that case, the court further said : “It is undoubtedly true, as stated by counsel, that the power conferred upon Congress to regulate commerce includes as well commerce carried on by corporations as commerce carried on bjr individuals. * * * This state of facts forbids the supposition that it was intended in the grant of power to Cong'ress to exclude from its control the commerce of corporations. The language of the grant makes no reference to the instrumentalities by which commerce may be carried on ; it is g'eneral, and includes alike commerce by individuals, partnerships, associations, and corporations.” In Gloucester Ferry Co. v. Pennsylvania, 114 U. S. 196, the court, speaking- of inter-state commerce, said : “ The power to regulate that commerce, as well as commerce with foreigm nations, vested in Congress, is the power to prescribe the rules by which it shall be governed, that is, the conditions upon which it shall be conducted; to determine when it shall be free and when subject to duties or other exactions. The power also embraces within its control all the instrumentalities by which that commerce maybe carried on, and the means by which it may be aided and encouraged. The subjects, therefore, upon which the power may be exerted are of infinite variety. While with referelice to some of them, which are local and limited in their nature or sphere of operation, the States may ■ prescribe regulations until Congress intervenes and assumes control of them ; yet, when they are national in their character, and require uniformity of regulation affecting alike all the states, the power of Congress is exclusive. * * *. Nor does it make any difference whether such commerce is carried on by individuals or by corporations.” In Pembina Mining Co. v. Pennsylvania, 125 U. S. 181, the court, after discussing- this power at length, said: “The only limitation upon this power of the State to exclude a foreigm corporation from .doing business within its limits, or hiring offices for that purpose, or to exact conditions for allowing the corporation to do business or hire offices there, arises where the corporation is in the employ of the federal government, or where its business is strictly commerce, inter-state or foreign. The control of such commerce, being in the federal government, is not to be restricted by State authority.” Pensacola Telegraph Co. v. Western Union Telegraph Co. 96 U. S. 1; Cooper Manufacturing Co. v. Ferguson, 113 U. S. 727. In Robbins v. Shelby Taxing District, 120 U. S. 489, the court said : 1 ‘ Certain principles have been already-established by the decisions of this court which will conduct us to a satisfactory decision. Among those principles are the following: (1). The Constitution of the United States having given to Congress the power to regulate commerce, not only with foreign nations, but among- the several States, that power is necessarily exclusive whenever the subjects of it are national in their character, or admit only of one uniform system, or plan of regulation. * * * * (2). Another established doctrine of this court is, that where the power of Congress to regulate is exclusive, the failure of Congress to make express regulations indicates its will that the subject shall be left free from any restrictions or impositions ; and any regulation of the subject by the States, except in matters of local concern only, as hereafter mentioned, is repugnant to such freedom.” “Of the former class may be mentioned all that portion of commerce with foreign countries or between the States which consists in the transportation, purchase, •sale, and exchange of commodities. Here there can of necessity be only one system or plan of regulations, and that Congress alone can prescribe.” County of Mobile v. Kimball, 102 U. S. 691; Escanaba Co. v. Chicago, 107 U. S. 678. “Of the class of subjects local in their nature, or intended as mere aids to commerce,” on which it has been held that the authority of the States may be exerted for their regulation and management until Congress interferes and supersedes it, ‘ ‘ may be mentioned harbor pilotage, buoys, beacons to guide mariners to the proper channels in which to direct their vessels,” bridges over navigable streams, wharfs, wharfage, and quarantine. “State action upon such subjects,” said the court, in County of Mobile v. Kimball, 102 U. S. 691, “can constitute no interference with the commercial power of Congress, for when that acts the State authority is superseded. Inaction of Congress upon these subjects of a local nature or operation, unlike its inaction upon matters affecting- all the States and requiring uniformity of regulation, is not to be taken as a declaration that nothing- shall be done in respect to them, but is rather to be deemed a declaration that for the time being, and until it sees fit to act, they may be reg-ulated by State authority.” A few cases will serve to show the character of some of the statutes which have been held by the courts to be unconstitutional because they interfered with the exclusive power of Congress to regulate inter-state commerce, and thereby what constitutes, in part, the commerce over which such power extends. In Hall v. De Cuir, 95 U. S. 485, a statute of the State of Louisiana, which attempted to reg*ulate the carriage of passengers upon railroads, steamboats and other public conveyances, and which provided that no regulation of any companies engaged in that business should make any discrimination on account of race or color, was considered. The case presented under the statute was that of a person of color who took passage from New Orleans for Hermitage, both places being within the limits of the State of Louisiana, and was refused accommodations in the general cabin on account of color. In regard to this the court declared that, “for the purposes of this case, we must treat the act of Louisiana of February 23, 1869, as requiring- those engaged in inter-state commerce to give all persons traveling in that State upon the public conveyances employed in such business, equal rights and privileges in all parts of the conveyance, without distinction or discrimination on account of race or color.' * * * We have nothing whatever to do with it as a- reg-ulation of internal commerce, or as affecting anything- else than commerce among-the States.” And, speaking in reference to the right of the States in certain classes of inter-state commerce to pass laws regulating them, the court said : “ The line which separates the powers of the States from this exclusive power of Congress is not always distinctly marked, and oftentimes it is not easy to determine on which side a particular case belongs. * * * But we think it may safely be said that State legislation which seeks to impose a direct burden upon inter-state commerce, or to interfere directly with its freedom, does encroach upon the exclusive power of Congress. The statute now under consideration, in our opinion, occupies that position. It does not act upon the business through the local instruments to be employed after coming within the State, but directly upon the business as it comes into the State from without or g'oes out from within. While it purports only to control the carrier when engaged within the State, it must necessarily influence his conduct to some extent in the management of his business throughout his entire voyage.” In Robbins v. Shelby Taxing District, 120 U. S. 489, the taxing district of Shelby county, Tennessee, which included the city of Memphis, acting under the authority of a statute of that State, attempted to impose a license tax upon a drummer for soliciting, within that district, the sale of goods for a firm in Cincinnati which he represented ; but the court decided that such a soliciting of business constituted a part of inter-state commerce, and that the statute of Tennessee imposing a tax upon such business was in conflict with the commerce clause of the Constitution of the United States, and was therefore void. In McCall v. California, 136 U. S. 104, the plaintiff in error was convicted of violating an order of the city and county of San Francisco, in the State of California, which made it a misdemeanor for any one to act as an agent of a railroad company without having first paid the sum of twenty-five dollars as a license fee. He was an agent in said city and county for the New York, Hake Brie and Western Railroad Company, a corporation having its principal place of business in the city of Chicago, and which operated a continuous line of road between Chicago and New York. As such ag'ent his duties consisted in soliciting passeng'er traffic in that city and county over the road he represented. He did not sell tickets for his company ; neither did he receive nor pay out money on account of it. His sole offense consisted in soliciting passengers to go over his company’s road, without having paid the license tax imposed upon him by said order as a condition precedent to his right to act as such agent in said county. The court held that the license fee as to such agency was a tax upon inter-state commerce, and in that respect was unconstitutional. The court, speaking of the agency and tax, said: “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 inter-state 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 inter-state commerce, pure and simple.” In this case the contract between the corporation and Julian and the bond sued on were executed in this State and were business transacted in Arkansas. But no sales or indebtedness were created by them. The contract was only an agreement to sell, and the bond was a condition upon which the corporation agreed to sell and a means adopted to secure the indebtedness to be contracted by sales, and both constituted a contract. They were made a foundation of a future trade between a corporation of one State and a citizen of another and were a direct method devised to increase the business of the former, and as to them served as a basis of inter-state commerce. Relying- on them the corporation sold the machines and other property and shipped them from the State of Ohio, its place of manufacture and business, to Julian in Arkansas, the place of sales being in Ohio. Until they ceased, according to their terms or by agreement of the parties, to be of any force, they were an inducement to, and entered into, every sale and formed a part of it. According to the principles firmly established by numerous decisions of the Supreme Court of the United States, they {the bond and contract) the sales and shipment of the machinery and other property were a part of the inter-state commerce of the United States, which Congress has the exclusive rig'ht to regulate, and were not and could not be affected by the act of April 4th, 1887. Judgment affirmed.