Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/389

 PART V.] CORPORATE ACTS WITHOUT THE STATE. [§ 386. § 385. The general rule is subject to the following qualifica- tions : The comity between states does not extend so far that a state will allow a foreign corporation to J£fe comity. (1) exercise any extraordinary franchise, or (2) do any act contrary to the laws, or the public policy of the state as indicated by its legislation, or (3) any act unauthorized by the constitution of the corporation. Moreover, in applying general principles of corporation law to contracts made or to be performed by a foreign corporation within the state, its courts will not necessarily follow the decisions of the state that incor- porated the corporation. 1 § 386. (1) A foreign corporation cannot exercise any extra- ordinary franchise or special privilege granted by the state incorporating it ; as, for instance, the right of eminent domain, or the privilege of exemption from taxation.' 2 It has even been said that a contract of a foreign corporation to be valid " must be one which Foreign corpora- tions can- not exer- cise special franchises ; Dana (Ky.), 114; New York Dry Dock v. Hicks, 5 McLean, 111; Farmers' Loan and Trust Co. v. Mc- Kinney, 6 McLean, 1; Life Ins. Co. v. Overholt, 4 Dill. 287. See Leasure v. Union Mut. Life Ins. Co., 91 Pa. St. 491. A foreign corporation, in whose favor a foreclosure decree is render- ed, may hold and convey real estate purchased under the decree, when there is no prohibitory statute. Els- ton v. Piggott, 94 Ind. 14. Though a statute forbid foreign corporations to purchase real estate, only the state can take advantage of it. Car- low v. Aultman, 28 Neb. 672. See § 388, n. 5. This rule does not enable a cor- poration to exercise in a foreign state powers not granted to it by its constitution. Pierce v. Crompton, 13 R. I. 312. See Thompson v. Waters, 25 Mich. 214, and §§ 389-391, post. The comity of a state does not ex- tend so far as to allow a foreign cor- poration, authorized by its constitu- 24 tion to do business in any state except the state incorporating it, to transact business within the limits of the former state. Land Grant Ry. Co. v. Commissioners, 6 Kan. 245; Compare Hanna i International Petroleum Co., 23 Ohio St. 622. But no principle of public policy forbids citizens of New York to form a cor- poration in another state and do business in New York as a foreign corporation. Demarest v. Flack, 128 N. Y. 205 ; Lancaster v. Amsterdam Imp. Co., 140 N. Y. 576. Oakdale Mfg. Co. v. Garst, 18 R. I. 484. No principle of law requires all or any of the shareholders to be residents of the state incorporating the cor- poration. Rolling Stock Co. v. Peo- ple, 147 111. 234. 1 Milnor v. N. Y., etc., R. R. Co., 53 N. Y. 303. 2 Foreign railroad company can- not exercise the right of eminent domain. Holbert v. St. L. R. C. and N. R. Co., 45 Iowa, 23. See State v. Boston, Concord, etc., R. R. Co., 25 369