Page:The Green Bag (1889–1914), Volume 17.pdf/733

 yoo

THE GREEN BAG

ity of each state from encroachment by all others" This limitation is not clear, and there never has been any decision which explains it, nor is it easy to imagine a state of facts to which the limitation might apply. "LIMITATION FOUR. The burden upon the foreign corporations must not violate the principles of natural justice which forbids con demnation without opportunity for defense." The above limitation is difficult to under stand. To illustrate: Would South Caro lina have the right to enact a law saying that no Kansas corporation should be per mitted to do business in the state of South Carolina? Or could Kansas pass a law that neither the Standard Oil Company nor any any other foreign company, refining petro leum, should be permitted to do business in Kansas? These questions have not yet been decided, but it would appear to violate the principles of natural justice, which for bids condemnation without opportunity for defense. In other words, can the state base its laws upon a whim or upon local preju dice, or must principles of natural justice govern? Suppose a black legislature to prevail in Mississippi, would a law be con stitutional that provided that no foreign corporation composed of white stockholders should be admitted? Or suppose a state draws the line on religious or political boundaries? These questions have not yet been decided, and we will refer again to this question under the head of Limitation Ten. In 1885 the United States Supreme Court decided the next case bearing upon this subject (Cooper v. Ferguson, 113 U. S. 727), from which is deduced : "LIMITATION FIVE. No burden may be placed upon foreign corporations which will prohibit or regulate commerce between the states." This is a subdivision of Limitation One, and only requires for its understanding a definition of what class of corporations are engaged in interstate commerce, within the commerce clause of the constitution.

The next case in the order of time is Barron v. Burnside (121 U. S. 186), decided in 1887. From it is deduced: "LIMITATION Six. The burden required of the foreign corporation must not be the sacrifice of a right or a privilege secured by the United States Constitution." It would, therefore, appear that a state might in a general way and for the protec tion of its home insurance companies deny the right of any foreign insurance company to do business within its borders, but the decision assumes that if the state makes a requirement in the law that the insurance company shall surrender a constitutional right then the law is unconstitutional. This would considerably limit the powers of the state and might almost be equivalent to saying that a state cannot exclude a foreign corporation except for some proper and legitimate reason, and that it cannot act on such terms as it pleases, as was stated in Paul v. Virginia, and that the exercise of the power is not a matter which rests within the discretion of the state. In other words, if the state can keep a foreign corporation out without giving a reason. why did the foreign corporation have a right to come in if the reason was not deemed by the Federal Court a good one? In 1888, the case of Pembina v. Penn was decided (125 U. S. 181). It contained three further propositions, first, "LIMITATION SEVEN. A state cannot re fuse admission to corporations engaged in interstate commerce." This was carrying Limitation Five further than it before had been carried. It (Limi tation Five) prevented burdens which pro hibited or regulated commerce between the states, but Limitation Seven denied to states the right to interfere with any inter state commerce corporation, although such corporation went into a state, regardless of state authority, and proceeded to do busi ness there. The case of Pembina v. Penn further announced :