for service is incurred because it hires an office and employs an agent for the merely incidental business of solicitation of freight and passenger traffic.80 Nor is a railroad company doing business in a State simply because another railroad company, of which it owns practically the entire capital stock, does do business therein, nor is the latter company or its officers and employees agents of the former company for the purpose of service of process even though such agents may at times also represent that company as to business done in other States. There is no partnership liability under such circumstances by which the company owning or controlling the capital stock of the other can be brought into court to respond for a tort by serving the latter company with process.81

§ 354. Same Subject-Instances Continued-Interstate Commerce-Insurance, Railroad and Other Corporations.— If a corporation of one State enters into a contract with a citizen of another State concerning a transaction which is interstate commerce, such act does not constitute a carrying on of business in the State where the contract work is to be completed so as to necessitate the performance by the foreign corporation of conditions precedent, such as registering its charter before doing business in the State.82 But that section of the penal code of California 83 which makes it a misdemeanor for a person in that

80 Green v. Chicago, Burlington & Quincy Ry. Co., 205 U. S. 530, 51 L. ed. 916, 27 Sup. Ct. 594, aff'g 147 Fed. 767. See next following note herein. 81 Peterson v. Chicago, Rock Island & Pac. Ry. Co., 205 U. S. 364, 51 L. ed. 841, 27 Sup. Ct. 513. Neither in this case nor in the Green case cited under the last preceding note, was the question of the right to impose conditions before the court. In the Peterson case the question of jurisdiction rested upon fact, divided into two propositions viz.: 1. Was the railroad company doing business in the State of Texas? 2. Were the alleged

agents served with process in that State duly authorized as such and competent to be thus served? The point as to partnership as noted in the text was also decided. Sayles, Civ. Stat., art. 1194, § 25, and art. 1223, also the act of March 13, 1905, Gen. Laws Tex., 1905, p. 30, §§ 2, 5, were the statutes considered. In the Green case the question was whether the service upon the agent was sufficient, as set forth in the above text.

82 Davis v. Rankin Bldg. & Mfg. Co. v. Caigle (Tenn. Ch. App., 1899), 53 S. W. 240.

State to procure insurance for a resident in the State from an insurance company not incorporated under its laws and which had not filed the bond required by the laws of the State relative to insurance, is not a regulation of commerce, and does not conflict with the Constitution of the United States, when enforced against the agent of a New York firm in California who, through his principals, procured for a resident in California applying for it there, marine insurance on an ocean steamer, from an insurance company incorporated under the laws of Massachusetts, and which had not filed the bond required by the laws of California.84 The State may require that life insurance companies shall pay losses within a certain time, and the requirement may be validly applied to foreign corporations under the legislative power to prescribe conditions upon which such foreign companies may transact business wthin the State.85 Where a state Supreme Court held that a foreign mutual insurance company, which had not been authorized to carry on business in such State as provided by its statutes, could not maintain a suit to collect assessments due on a policy issued by one of its agents in another State on request of an insurance broker of the State rendering the decision, who was unable to place the whole line in his own authorized companies, it was held that such State could prohibit foreign insurance companies from doing business within its limits or allow them to carry on business under such conditions as it might choose to prescribe; and that the state court having decided, as above stated, no Federal question was involved, and a request to find that the state statute could not prevent the insured from going without the State and obtaining insurance on property within the State did not raise a Federal question where the fact was otherwise; and the writ of error was dismissed.86 If a state statute requires insurance comLouisiana, 165 U. S. 578, 583, 17 Sup. Ct. 427, 41 L. ed. 832; Noble v. Mitchell, 164 U. S. 367, 370, 17 Sup. Ct. 110, 41 L. ed. 472.

84 Hooper v. California, 155 U. S. 648, 39 L. ed. 297, 15 Sup. Ct. 207, cited in Waters-Pierce Oil Co. v. Texas, 177 U. S. 28, 46, 44 L. ed. 657, 20 Sup. Ct. 518; Hopkins v. United States, 171 U. S. 578, 602, 19 Sup. Ct. 40, 43 L. ed. 290; Allgeyer v.

85 Merchants' Life Assoc. of U. S. v. Yoakum (C. C. A.), 98 Fed. 251. se Swing v. Weston Lumber Co.,

panies to make full and specified returns to the proper state officers of their business condition, liabilities, losses, premiums, taxes, dividends, expenses, etc., such enactment is an exercise of the police power of the State, and may be enforced against a company organized under a special charter from the state legislature, which does not in terms require it to make such return, without thereby depriving it of any of its rights under the Federal Constitution.87 Foreign railroad corporations may be required by statute to become resident corporations as a condition to the operation of a part of its road within a State, and such requirement does not deny the equal protection of the laws.88 A foreign railroad, insurance or other corporation cannot be unjustly discriminated against as to the right of appeal, as where a certain per cent damages are by statute to be added to money judgments against corporations created in other States whether the appeal be affirmed or dismissed.89

§ 355. Power of State to Impose Conditions Upon Foreign Corporations-Agreement not to Remove Suit to Federal Court-Waiver of Right.-A statute is repugnant to the Federal Constitution and the laws in pursuance thereof and is illegal and void where it provides: "That any fire insurance company, association, or partnership, incorporated by or organized under the laws of any other State of the United States, desiring to transact any such business as aforesaid by any agent or agents, in this State, shall first appoint an attorney in this State on whom process of law can be served, containing an agreement that such company will not remove the

205 U. S. 275, 51 L. ed. Ct. aff'g 140 Mich. 344, citing R. Co., 23 Ky. L. Rep. 784, 64 S. W. Chicago, Indianapolis & Louisville 451, 54 L. R. A. 916. Ry. Co. v. McGuire, 196 U. S. 128, 132, 49 L. ed. 413, 25 Sup. Ct. 200; Allen v. Allegheny County, 196 U. S. 458, 49 L. ed. 551, 25 Sup. Ct. 311, to last point.

- 27 Sup. 88 Commonwealth v. Mobile & O.

"Eagle Ins. Co. v. Ohio, 153 U. S. 446, 38 L. ed. 773, 14 Sup. Ct.

80 Mutual Fire Ins. Co. v. Hammond (Ky.), 51 S. W. 151. See also Blake v. McClung, 172 U. S. 239, 43 L. ed. 486, 19 Sup. Ct. 226. Examine §§ 299, 300, herein.

90

suit for trial into the United States Circuit Court, or Federal courts, and file in the office of the Secretary of State a written instrument, duly signed and sealed, certifying such appointment, which shall continue until another attorney be substituted." The agreement filed by the insurance company in pursuance of such enactment derives no support from a statute thus unconstitutional and is as void as it would be had the statute not been passed. The statute obstructs the absolute right, which the Constitution of the United States secures to citizens of another State than that in which the suit is brought, to remove their cases into the Federal court under the provisions of the Judiciary Act. The doctrine of this case was reaffirmed under a decision holding that an agreement to abstain in all cases from resorting to the Federal courts was void as against public policy, and a statute requiring such an agreement was unconstitutional; but this same case also holds that as the State has the right to exclude a foreign corporation, the means by which she causes such exclusion or the motives of her action are not the subject of judicial inquiry. Thus, where a state legislature enacted that if any foreign insurance company transferred a suit brought against it from the state courts to the Federal courts, the Secretary of State should revoke and cancel its license to do business within the State, it was held that an injunction to restrain him from so doing, because such a transfer was made, could not be sustained; that the suggestion that the intent of the legislature was to accomplish an illegal purpose, by preventing a resort to the Federal court, was not accurate, therefore, the company must forego such resort or cease its business in the State.91 This decision is, however,

* Insurance Co. v. Morse, 20 Wall. (87 U. S.) 445, 22 L. ed. 365, cited in Blake v. McClung, 172 U. S. 239, 256, 43 L. ed. 432, 19 Sup. Ct. 165; Barrow Steamship Co. v. Kane, 170 U. S. 100, 111, 42 L. ed. 964, 18 Sup. Ct. 526; Goldey v. Morning News, 156 U. S. 518, 523, 15 Sup. Ct. 559, 39 L. ed. 517; Martin v. Baltimore &

Ohio Rd. Co., 151 U. S. 673, 684, 14 Sup. Ct. 533, 38 L. ed. 311; Southern Pacific Co. v. Denton, 146 U. S. 202, 207, 13 Sup. Ct. 44, 36 L. ed. 942; United States Life Ins. Co. v. Cable, 98 Fed. 767; Reimers v. Seatco Mfg. Co., 70 Fed. 575.

91 Doyle v. Continental Ins. Co., 94 U. S. 535, 24 L. ed. 148

explained in another case in the same court, which also approves the doctrine of the principal case.92 But under a still later decision it is held that since a State has power to prevent a foreign corporation from doing business at all within its borders, unless such prohibition is so conditioned as to violate the Federal Constitution, a state statute which, without requiring a foreign insurance company to enter into any agreement not to remove into the Federal courts cases commenced against it in the state court, provides that if the company does so remove such a case its license to do business within the State shall thereupon be revoked, is not unconstitutional.93

§ 356. Condition as to License, Privilege, Business or Occupation Charge, Rental, Fee or Tax-Interstate Commerce -Equal Protection of Law.-Various names have been given to the charges imposed upon the franchise right of corporations to carry on their business within a State. Some of the cases variously hold that such charges are a license, not a license, a rental, a tax, not a tax, taxes for the privilege of exercising corporate franchises, a privilege tax, occupation tax, taxes on corporate franchises, tax on business, or merely a charge on business; other decisions avoid a discussion as to the nature or character of the charges imposed, but sustain the enactment or ordinance. By whatever name called, however, the validity of such legislative act of the State or a municipality is as a rule sustained in favor of the municipality or State, and the exceptions to the rule will be found to rest upon some special conditions or facts in the case, or upon the fact that the license, privilege, business or occupation tax, rental, or license fee is so excessive as to be prohibitive or grossly unjust or unreasonable.94 So it must be regarded as finally settled in the Federal Supreme Court by frequent decisions that, subject to 92 Barron v. Burnside, 121 U. S. S. 535 (above cited), followed, and 186, 7 Sup. Ct. 931, 30 L. ed. 915.

3 Security Mutual Life Ins. Co. v. Prewitt, Ins. Commr., 202 U. S. 246, 50 L. ed. 1013, 26 Sup. Ct. 619; Doyle v. Continental Ins. Co., 94 U.

held not to be overruled by Barron v. Burnside, 121 U. S. 186 (above cited), or by any other decision.

94 See Joyce on Electric Law (2d ed.), §§ 97-113a, 186b, 937-939.