A Pennsylvania fire insurance corporation began doing business
in New York in 1872, and continued it afterwards till 1882,
receiving from year to year certificates of authority from the
proper officer under a statute of New York passed in 1853. Chapter
694 of the laws of New York of 1865, as amended by c. 6O of the
laws of 1870, provided that whenever the laws of any other state
should require from a New York fire insurance company a greater
license fee than the laws of New York should then require from the
fire insurance companies of such other state, all such companies of
such other state should pay in New York a license fee equal to that
imposed by such other state on New York companies. In 1873,
Pennsylvania passed a law requiring from every insurance company of
another state, as a prerequisite to a certificate of authority, a
yearly tax of three percent on the premiums received by it in
Pennsylvania during the preceding year. In 1882, the insurance
officer of New York required the Pennsylvania corporation to pay,
as a license fee, a tax of three percent on the premiums received
by it in New York in 1881. In a suit against such corporation in a
court of New York to recover such tax, it was set up as a defense
that the tax was unlawful because the corporation was a "person"
within the "jurisdiction" of New York, and "the equal protection of
the laws" had been denied to it in violation of a clause in the
Fourteenth Amendment to the Constitution of the United States. On a
writ of error to review the judgment of the highest court of New
York overruling such defense,
held that such clause had no
application, because, the defendant, being a foreign corporation,
was not within the jurisdiction of New York until admitted by the
state on a compliance with the condition of admission imposed --
namely the payment of the tax required as a license fee.
The business carried on by the corporation in New York was not a
transaction of commerce.
The opinion of the highest court of New York, duly authenticated
by the proper officer and transmitted to this Court with the record
in compliance with the 8th Rule, was examined to aid in determining
whether that court decided such federal question against the
defendant.
This is a writ of error to the supreme court of the State of New
York. Under the provisions of § 1279 of the Code of Civil
Procedure of New York, the people of the State of New York and the
Fire Association of Philadelphia, a
Page 119 U. S. 111
Pennsylvania corporation, being parties to a question in
difference which might be the subject of an action, agreed upon a
case containing a statement of the facts on which the controversy
depended and presented a written submission of it to the supreme
court of New York, so that the controversy became an action. The
material facts set forth in the case are these:
"The defendant, the Fire Association of Philadelphia, is a
corporation created and organized in the year 1820 by and under the
laws of the State of Pennsylvania for the transaction of the
business of fire insurance, and having its principal place of
business in the City of Philadelphia. In the year 1872, it
established an agency in the State of New York, which it has ever
since maintained. No question is here raised but that it has
uniformly complied with all the requirements and conditions imposed
by the laws of this state upon fire insurance companies from other
states establishing and maintaining agencies in this state except
the payment of the tax now in dispute upon premiums received by it
in 1881 upon risks located within the State of New York, and which
is the subject of this controversy, and has received from year to
year certificates of authority from the Superintendent of the
Insurance Department of this state as provided to be issued under
the act, chapter 466 of the Laws of 1853, and the subsequent acts
amendatory thereof."
"The act of the people of the State of New York passed May 11,
1865, three-fifths being present, being chapter 694 of the Laws of
1865, entitled 'An act in relation to the deposits required to be
made, and the taxes, fines, fees, and other charges payable by
insurance companies of sister states,' as amended by the act of
1875, c. 60, provides as follows,
viz.,"
" Whenever the existing or future laws of any other state of the
United States shall require of insurance companies incorporated by
or organized under the laws of this state, and having agencies in
such other states or of the agents thereof any deposit of
securities in such state for the protection of policyholders or
otherwise, or any payment for taxes, fines, penalties, certificates
of authority license fees
Page 119 U. S. 112
or otherwise, greater than the amount required for such purposes
from similar companies of other states by the then existing laws of
this state, then and in every such case, all companies of such
states establishing, or having heretofore established, an agency or
agencies in the state shall be, and are hereby, required to make
the same deposit for a like purpose in the insurance department of
the state, and to pay the superintendent of said department, for
taxes, fines, penalties, certificates of authority, license fees,
and otherwise, an amount equal to the amount of such charges and
payments imposed by the laws of such state upon the companies of
this state, and the agents thereof, and the Superintendent of the
Insurance Department is hereby authorized to remit any of the fees
and charges which he is required to collect by existing laws,
except such as he is required to collect under and by virtue of
this act,
provided, however, that no discrimination shall
be made favor of one company over any other from the same
state."
"The State of Pennsylvania, by an act passed April 4, 1873, and
ever since in force, enacted as follows,
viz.,"
" Section 10. No person shall act as agent or solicitor in this
state of any insurance company of another state or foreign
government in any manner whatever relating to risks until the
provisions of this act have been complied with on the part of the
company or association and there has been granted to said company
or association by the commissioner a certificate of authority
showing that the company or association is authorized to transact
business in this state, and it shall be the duty of every such
company or association authorized to transact business in this
state to make report to the commissioner in the month of January of
each year under oath of the president or secretary thereof showing
the entire amount of premiums of every character and description
received by said company or association in this state during the
year or fraction of a year ending with the thirty-first day of
December preceding, whether said premiums were received in money or
in the form of notes, credits, or any other substitute for money,
and pay into the state treasury a
Page 119 U. S. 113
tax of three percent upon said premiums, and the commissioner
shall not have power to grant a renewal of the certificate of said
company or association until the tax aforesaid is paid into the
state treasury."
"In the year 1881, the defendant, through its authorized agents
in the State of New York, received for insurance against loss or
injury by fire upon property located within the State of New York
premiums to the aggregate amount of $196,170.22. The Superintendent
of the Insurance Department of New York claimed that the defendant
ought to pay as a tax for the year 1881 $1,848.45, with proper
interest, being the amount arrived at by deducting from $5,885.10
(which would be a tax of three percent on $196,170.22) the sum of
$4,036.65, which the defendant, as a Pennsylvania corporation, had
paid as a tax on premiums during 1881 under laws of New York in
force in 1881, other than the act of 1865, as amended by the act of
1875. The case then states that"
" The controversy between the parties is as to whether the
defendant is liable to pay any tax to the Superintendent of the
Insurance Department of the state upon the said premiums received
by it in the year 1881, and, if any, what amount;"
"that"
" The defendant claims that it is not liable to the plaintiffs
for any amount, insisting first that the said act of 1865, as
amended by the act of 1875, is unconstitutional and void, and not a
legitimate exercise of legislative power,"
"and making further claims as to the amount due from it if the
act in question is valid; that"
"the question submitted to the court for decision upon the
foregoing statement of facts is whether the defendant is liable to
pay to the plaintiffs, or to the superintendent, the whole or any,
and if any, what part, of the"
"$1,848.45, and that judgment is to be entered according to its
decision."
The agreed case having been heard by the supreme court in
general term, as required by law, it rendered a judgment to the
effect that the defendant was not liable to pay any part of such
amount claimed by the superintendent. Two of the three judges
holding the court concurred in that judgment.
Page 119 U. S. 114
The third dissented. The opinions of the majority and minority
accompany the record. The majority held that the statutes of New
York in question were void because in conflict with the
Constitution of New York, and did not discuss any question arising
under the Constitution of the United States. The dissenting judge
differed with the majority as to the question adjudged by them, and
further said: "Nor can I agree with the claim that this statute is
contrary to the Fourteenth Amendment to the Constitution of the
United States."
The plaintiffs having appealed to the Court of Appeals of New
York, that court reversed the judgment of the supreme court and
rendered judgment for the plaintiffs for $1,848.45, with interest
an costs, and remitted the record to the supreme court, where a
judgment to that effect was entered, to review which the defendant
has brought a writ of error. The Court of Appeals, in its decision,
92 N.Y. 311, after overruling the view taken by the majority of the
judges of the supreme court as to the validity of the statute under
the Constitution of New York, proceeds to consider its
constitutionality under that clause of the Fourteenth Amendment to
the federal Constitution which commands that no state shall "deny
to any person within its jurisdiction the equal protection of the
laws." It holds that that clause has no application to the rights
of the defendant because, being a foreign corporation, it was not
within the jurisdiction of New York until it was admitted by the
state upon a compliance with the conditions of admission which the
state imposed and had the right to impose.
Page 119 U. S. 115
MR. JUSTICE BLATCHFORD, after stating the case as above
reported, delivered the opinion of the Court.
The defendant claims here the benefit of the Fourteenth
Amendment, and a question has occurred as to whether the record
presents that point for our review. There being no pleadings, the
obvious place to look for the claim would be the
Page 119 U. S. 116
agreed statement of facts. But all that is there said is that
the defendant insists that the statute is "unconstitutional and
void, and not a legitimate exercise of legislative power." The
question was considered in both the supreme court and the Court of
Appeals as to the validity of the statute under the Constitution of
New York as being a law made to depend for its operation on the
legislation of a foreign state, and thus an illegitimate exercise
of legislative power. This contention is fairly within the words of
the agreed statement, and if it depended wholly on that statement
to determine whether the record raises a federal question, some
doubt might exist. But in view of what was said in
Murdock v.
Memphis, 20 Wall. 590,
87 U. S. 633,
in
Gross v. United States Mortgage Co., 108 U.
S. 477; and in
Adams County v. Burlington &
Missouri Railroad Co., 112 U. S. 123, we
think that we are at liberty to look into the opinion of the Court
of Appeals, a copy of which, duly authenticated by the proper
officer, is transmitted to us with the record in compliance with
our eighth rule, for the purpose of aiding in determining what was
decided by that court. From that opinion it appears that the court
not only decided against the defendant all the questions other than
federal which were raised, including two under the Constitution of
New York, but also decided against it the federal question referred
to. If the court had decided in its favor any one of the other
questions which went to the whole cause of action, there would have
been no necessity for considering the federal question. But as it
was, the decision of that question became necessary to the
disposition of the case, and was fully considered, not
sua
sponte, but as a point presented by the defendant.
The provision of the Fourteenth Amendment, which went into
effect in July, 1868, is that no state shall "deny to any person
within its jurisdiction the equal protection of the laws." The
first question which arises is whether this corporation was a
person within the jurisdiction of the State of New York with
reference to the subject of controversy, and within the meaning of
the amendment.
The defendant, on the assumption that if it was within the
jurisdiction of the State of New York, it was, though a foreign
Page 119 U. S. 117
corporation, a "person," and so entitled to the benefit of the
amendment, contends that it was within such jurisdiction. The
argument is that it established an agency within the state in 1872
which it had ever since maintained; that it complied from year to
year with all the requirements and conditions imposed by the laws
of the state on foreign fire insurance companies doing business in
the state; that it received from year to year certificates of
authority from the Superintendent of the Insurance Department, as
provided by statute; that under those circumstances, it was legally
within the state and within its jurisdiction; that being in the
state, by permission of the state, continuously from 1872 to 1882,
the state imposed on it, while there, in 1882, an unequal and
unlawful burden, and that the New York act of 1865 did not come
into effect as to Pennsylvania corporations until the Pennsylvania
act of 1873 was passed, at which time the defendant had already
been a year in the state.
But we are unable to take that view of the case. In
Paul v.
Virginia, 8 Wall. 168, at December Term, 1868, a
statute of Virginia required that every insurance company not
incorporated by Virginia should, as a condition of carrying on
business in Virginia, deposit securities with the state treasurer,
and afterwards obtain a license, and another statute made it a
penal offense for a person to act in Virginia as agent for an
insurance company not incorporated by Virginia without such
license. A person having acted as such agent without a license and
been convicted and fined under the statute, this Court held that
there had been no violation of that clause of Article IV, Section
2, of the Constitution of the United States which provides that
"the citizens of each state shall be entitled to all privileges and
immunities of citizens in the several states," nor any violation of
the clause in Article I, Section 8, giving power to Congress "to
regulate commerce with foreign nations and among the several
states." The view announced was that corporations are not citizens
within the clause first cited, on the ground that the privileges
and immunities secured to the citizens of each state in the several
states are those which are common to the citizens of the latter
states
Page 119 U. S. 118
under their constitutions and laws by virtue of their being
citizens, and that as a corporation created by a state is a mere
creation of local law, even the recognition of its existence by
other states and the enforcement of its contracts made therein
depend purely on the comity of those states -- a comity which is
never extended where the existence of the corporation or the
exercise of its powers is "prejudicial to their interests or
repugnant to their policy." And the Court, speaking by MR. JUSTICE
FIELD, said:
"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 an in their judgment will best
promote the public interest. The whole matter rests in their
discretion."
As to the power of Congress to regulate commerce among the
several states, the Court said that while the power conferred
included commerce carried on by corporations as well as that
carried on by individuals, "issuing a policy of insurance is not a
transaction of commerce." This decision only followed the
principles laid down in the earlier cases of
Bank of
Augusta v. Earle, 13 Pet. 519,
38 U. S. 588,
and
Lafayette Ins. Co. v.
French, 18 How. 404.
The same rulings were followed in
Ducat v.
Chicago, 10 Wall. 410, where it was said that the
power of a state to discriminate between her own corporations and
those of other states desirous of transacting business within her
jurisdiction being clearly established, it belonged to the state to
determine as to the nature or degree of discrimination, "subject
only to such limitations on her sovereignty as may be found in the
fundamental law of the union." Other cases to the same effect are
Liverpool Ins. Co. v.
Massachusetts, 10 Wall. 566;
Doyle v.
Continental Ins. Co., 94 U. S. 535, and
Cooper Mfg. Co. v. Ferguson, 113 U.
S. 727.
Page 119 U. S. 119
As early as 1853, the State of New York, by a statute, c. 466,
required of every fire insurance company incorporated by any other
state or any foreign government, as a prerequisite to doing
business in the state, that it should file an appointment of an
attorney on whom process was to be served, and a statement of its
pecuniary condition, and procure from a designated public officer a
certificate of authority stating that the company had complied with
all the requisitions of the statute, and also required the renewal,
from year to year, of the statement and evidence of investments,
and provided that such public officer, on being satisfied that the
capital of the company and its securities and investments remained
secure, should furnish a renewal of the certificate of authority. A
violation of the provisions was made a penal offense. This act,
with immaterial amendments, is still in force.
This Pennsylvania corporation came into the State of New York to
do business, by the consent of the state, under this act of 1853,
with a license granted for a year, and has received such license
annually, to run for a year. It is within the state for any given
year under such license, and subject to the conditions prescribed
by statute. The state, having the power to exclude entirely, has
the power to change the conditions of admission at any time for the
future and to impose as a condition the payment of a new tax or a
further tax as a license fee. If it imposes such license fee as a
prerequisite for the future, the foreign corporation, until it pays
such license fee, is not admitted within the state or within its
jurisdiction. It is outside at the threshold, seeking admission,
with consent not yet given. The act of 1865 had been passed when
the corporation first established an agency in the state. The
amendment of 1875 changed the act of 1865 only by giving to the
superintendent the power of remitting the fees and charges required
to be collected by then existing laws. Therefore the corporation
was at all times after 1872 subject, as a prerequisite to its power
to do business in New York, to the same license fee its own state
might thereafter impose on New York companies doing business in
Pennsylvania. By going into the State of New York in 1872, it
assented to such prerequisite as a
Page 119 U. S. 120
condition of its admission within the jurisdiction of New York.
It could not be of right within such jurisdiction until it should
receive the consent of the state to its entrance therein under the
new provisions, and such consent could not be given until the tax,
as a license fee for the future, should be paid.
It is not to be implied from anything we have said that the
power of a state to exclude a foreign corporation from doing
business within its limits is to be regarded as extending to an
interference with the transaction of commerce between that state
and other states by a corporation created by one of such other
states. Judgment affirmed.
MR. JUSTICE HARLAN, dissenting.
Under the decision just rendered, the State of New York is
permitted to subject a corporation of another state, within her
limits by her consent, to higher taxes in respect to its business
than is imposed there upon similar corporations of other
states.
At the last term of this Court, when counsel were about to enter
upon the argument of the case of
Santa Clara County v. Southern
Pacific Railroad, 118 U. S. 396,
involving the validity of a system devised by one of the states for
the taxation of railroad corporations of a certain class, THE CHIEF
JUSTICE observed:
"The Court does not wish to hear argument on the question
whether the provision in the Fourteenth Amendment to the
Constitution which forbids a state to deny to any person within its
jurisdiction the equal protection of the laws applies to these
corporations. We are all of opinion that it does."
This, it is true, was said in regard to corporations of the
particular state whose legislation was assailed as
unconstitutional, but it is equally clear that a corporation of one
state, doing business in another state by her consent, is to be
deemed at least in respect to that business, a "person" within the
jurisdiction of the latter state in the meaning of the Fourteenth
Amendment.
The denial of the equal protection of the laws may occur in
Page 119 U. S. 121
various ways. It will most often occur in the enforcement of
laws imposing taxes. An individual is denied the equal protection
of the laws if his property is subjected by the state to higher
taxation than is imposed upon like property of other individuals in
the same community. So, a corporation is denied that protection
when its property is subjected by the state under whose laws it is
organized to more burdensome taxation than is imposed upon other
domestic corporations of the same class. So also, a corporation of
one state, doing business by its agents in another state by the
latter's consent, is denied the equal protection of the laws if its
business there is subjected to higher taxation than is imposed upon
the business of like corporations from other states within her
jurisdiction. These propositions seem to me to be indisputable.
They are necessarily involved in the concession that corporations,
like individuals, are entitled to the equal protection of the
laws.
The plaintiff in error is a corporation of Pennsylvania. In
1872, it established and has ever since maintained an agency in the
State of New York. It had its agents there when the taxes for 1881,
here in question, were assessed.
The laws of New York prescribe certain conditions precedent to
the right of a fire insurance company from another state to
transact business there. It must possess a certain amount of actual
capital; appoint an attorney in the state, service of process upon
whom is to be "deemed a valid personal service upon the
corporation" in any action "upon a policy or liability issued or
contracted while such corporation transacted business" there; file
in the insurance department a certified copy of its charter,
together with a statement, verified by the oath of its chief
officer and secretary showing the name of the company, place where
located, amount of its capital and assets, the extent to which its
real estate is encumbered, the par and market value of all shares
of stock held by it, the estimated value of its bonds, mortgages,
and other securities, the extent of its indebtedness, the amount of
its losses, adjusted and unpaid, or incurred and in process of
adjustment, the losses disputed, and the claims existing against
it. It is also provided that no business shall be transacted in
Page 119 U. S. 122
the state by the agent of any company from another state while
its capital is impaired to the extent of twenty percent. It further
requires from such companies an annual statement showing in detail
the items making up their capital and the deductions to be made
therefrom. It was made the duty first of the state comptroller and
subsequently of the superintendent of insurance -- these
requirements of the statute being first complied with -- to issue
to the company thus seeking admission into the state a certificate
showing its lawful right to transact business within her limits.
Laws of N.Y. 1853, c. 466; Laws of 1862, c. 6, § 1, and c.
367, § 5; Laws of 1871, c. 888; Laws of 1874, c. 331, §
1; Laws of 1875, c. 555, § 1.
That the plaintiff in error conformed to these statutory
provisions and was admitted into New York for the transaction of
business is shown by the agreed case, from which it appears that
it
"has uniformly complied with all the requirements and conditions
imposed by the laws of this state upon fire insurance companies
from other states establishing and maintaining agencies in this
state, except the payment of the tax now in dispute, upon premiums
received by it in 1881 upon risks located within the State of New
York, and which is the subject of this controversy, and has
received from year to year
certificates of authority from the
Superintendent of the Insurance Department of this state, as
provided to be issued under the act, c. 466 of the Laws of 1853,
and the subsequent acts amendatory thereof."
In view of these admitted facts, how can it be said that this
Pennsylvania corporation was not, in respect to its corporate
business, within the jurisdiction of State of New York during the
year when the tax in dispute accrued? That a corporation of one
state, doing business in another state by the latter's consent,
evidenced by the official certificate given by her insurance
department in conformity with her laws and liable, precisely as
domestic corporations are, to be brought into her courts through
service of process upon its duly appointed attorney or agent in
reference to any business transacted or liability incurred by it
there, is to be deemed within the jurisdiction of that state seems
to me entirely clear. In
Ex
Parte
Page 119 U. S. 123
Schollenberger, 96 U. S. 374,
it was decided that a foreign insurance company doing business in
Pennsylvania under the authority of a statute of that commonwealth
requiring, as a condition precedent to its being there, an
agreement that judicial process served upon its agent should have
the same effect as if served upon the corporation, was, within the
meaning of the act of Congress of 1875, "found" in that state so as
to give jurisdiction to the courts of the United States sitting in
that state of suits brought there against such company accompanied
by service of process upon its agent. The subject was again
considered in
St. Clair v. Cox, 106
U. S. 357, where it was said that there was no sound
reason why, in the case of an insurance company doing business in
another state by an agent under statutes such as those referred to
should not be deemed to be represented in the latter by such agent
and held responsible for its obligations and liabilities there
incurred.
See also Railroad Co. v.
Harris, 12 Wall. 65;
Railway Co. v.
Whitton, 13 Wall. 285.
It was said in argument that the plaintiff in error entered New
York with the knowledge, derived from the act of 1865, that if
Pennsylvania thereafter subjected New York insurance companies to
higher taxes than the latter state imposed upon Pennsylvania
corporations of the same class doing business in New York, the
taxes levied upon it would be correspondingly increased; therefore,
it is argued, the entrance of the plaintiff in error into New York
was subject to the reserved right of that state thus to increase
the taxes upon its business. The same idea is embodied in the
suggestion that New York made it a prerequisite, from and after
1865, to the right of a fire insurance corporation of another state
to transact business in New York that it should pay such increased
taxes, however much they might be in excess of the taxes imposed
there upon corporations of the same class from the remaining
states. Now it is submitted:
1. That no such obligation was imposed by the statute upon the
plaintiff in error as a prerequisite to its right to enter New York
and transact business there. The agreed case shows not only that
the Insurance Department of New York has certified its right to do
business in that state,
Page 119 U. S. 124
but that the certificate was made as provided in the act of
1853, and the acts amendatory thereof. Besides, there is no clause
in the statute directing that department to withhold or to revoke a
certificate upon the failure or refusal of the company to pay these
increased taxes. The regularity and validity of that certificate
was not questioned in argument, is not now disputed, and there is
not a word in the statute to the effect that the
payment
of these increased taxes is a
prerequisite to the right of
the company to remain in the state and transact business. Indeed,
it is evident that the state purposely avoided establishing any
such prerequisite to the right to enter her limits. She only seeks,
after admitting the plaintiff in error and certifying its right to
do business, to subject it to the taxation in question.
2. The power of New York to impose this increased tax surely
cannot depend upon the fact that she gave notice of what she would
do in the contingency expressed in the act of 1865. Such notice
neither creates a power to do that which the state could not
otherwise constitutionally do nor makes it the duty of the
plaintiff in error to submit to an illegal exaction. At last, the
real question presented is whether Pennsylvania corporations can be
subjected to higher taxes in New York than are imposed there upon
corporations of the same class from other states.
It is said that a state may exclude altogether from its borders
a corporation of another state, or may admit it upon such terms or
conditions as she may elect to prescribe. It is quite true that
general language to that effect was employed in
Paul v.
Virginia, 8 Wall. 168, where the only question
necessary to be determined was as to the validity of a statute of
Virginia providing that, before an insurance company not
incorporated by that state should carry on business there, it must
obtain a license therefor and deposit with the state treasurer, as
security for its engagements, bonds of a specified character and
amount. In the course of the opinion which disposed of that
question, it was said that a corporation of one state,
"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
Page 119 U. S. 125
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 interests. The whole matter
rests in their discretion."
But I submit that it is the settled doctrine of this Court that
the terms and conditions so prescribed must not be repugnant to the
Constitution of the United States or inconsistent with any right
granted or secured by that instrument. In
Ducat v.
Chicago, 10 Wall. 410,
77 U. S. 415,
it was said by Mr. Justice Nelson, speaking for the Court, that in
respect to the nature or degree of discrimination which a state may
make between her own corporations and those of other states, "it
belongs to the state to determine, subject only to such limitations
on her sovereignty as may be found in the fundamental law the
union." It was so decided in
Insurance Co. v.
Morse, 20 Wall. 445,
87 U. S.
455-456, where the question was as to the validity of a
statute of Wisconsin relating to the admission into that State of
fire insurance companies incorporated by other states. Besides the
condition that they should designate some attorney in Wisconsin
upon whom process against the company could be served, it imposed
the further one that it should file in the proper office an
agreement stipulating that it would not remove to the courts of the
United States any suit brought against it in the local courts. An
insurance company of New York established an agency in Wisconsin
and complied in all respects with these conditions; it filed the
required agreement. In support of the validity of those conditions,
the state relied upon the very language above quoted from
Paul
v. Virginia. But the Court was careful to say that that
language must be understood with reference to the facts in the case
and to the question to be decided, which was stated to be
simply
"whether the state might require a foreign insurance company to
take a license for the transaction of its business, giving security
for the payment of its debts."
Care was taken to further announce that the general language
employed in
Paul v. Virginia was not intended
Page 119 U. S. 126
to impair the language in
Lafayette Ins. Co. v.
French, 18 How. 407, where the Court, speaking by
Mr. Justice Curtis, said:
"A corporation created by Indiana can transact business in Ohio
only with the consent, express or implied, of the latter state.
This consent may be accompanied by such conditions as Ohio may
think fit to impose, and these conditions must be deemed valid and
effectual by other states, and by this Court, provided they are not
repugnant to the Constitution and laws of the United States or
inconsistent with those rules of public law which secure the
jurisdiction and authority of each state from encroachment of all
others or that principle of natural justice which forbids
condemnation without opportunity for defense."
Upon these grounds, it was held in
Insurance Co. v.
Morse that the Wisconsin statute, so far as it required
insurance companies of other states to stipulate that they would
not exercise the right to have suits against them removed to the
national courts, was void, equally because it created an
obstruction to the exercise of a privilege granted by the
Constitution and laws of the United States and tended to oust the
courts of the union of a jurisdiction conferred upon them. Much
that was said in that case is pertinent to the present one. After
observing that the courts would not enforce an agreement between a
citizen of New York and a citizen of Wisconsin, that the former
would in no event resort to the federal courts sitting in Wisconsin
for the protection of his rights of property, or an agreement
between the same parties, upon whatever consideration, that the
citizen of New York would in no case, when called into the courts
either of Wisconsin or of the federal courts sitting in that state
demand a jury to determine his rights of property, but would submit
such rights to arbitration or to the decision of a single judge,
the court said:
"We see no difference in principle between the cases supposed
and the case before us. Every citizen is entitled to resort to all
the courts of the country, and to invoke the protection which all
the laws or all those courts may afford."
The court further said that the right of the insurance company
to remove the suit was
"denied to it by the state court on the ground that it had made
the agreement referred
Page 119 U. S. 127
to, and that the statute of the state authorized and required
the making of the agreement. We are not able to distinguish this
agreement and this requisition, on principle, from a similar one
made in the case of an individual citizen of New York. A
corporation has the same right to the protection of the laws as a
natural citizen and the same right to appeal to all the courts of
the country. The rights of an individual are not superior in this
respect to that of a corporation. The State of Wisconsin can
regulate its own corporations and the affairs of its own citizens,
in subordination, however, to the Constitution of the United
States. The requirement of an agreement like this from their own
corporations would be
brutum fulmen, because they possess
no such right under the Constitution of the United States. A
foreign citizen, whether natural or corporate, in this respect
possesses a right not pertaining to one of her own citizens. There
must necessarily be a difference between the status of the two in
this respect."
The only difference between
Insurance Co. v. Morse and
the present case is that in the former, the New York corporation
expressly agreed in writing that it would not exercise its
constitutional privilege of removing suits against it into the
courts of the union, while the Pennsylvania corporation received an
official certificate of its right to transact business in New York
with notice, derived from the act of 1865, that that state would
after 1873 -- the date of the Pennsylvania statute -- claim from it
higher taxes than she imposed upon like corporations from the
remaining states doing business in her limits by her consent. If
the plaintiff in error, by merely maintaining its agencies in New
York, is to be held to have impliedly agreed to submit to such
increased taxation, is that anything more than an implied agreement
that it would not assert a right secured to it by the Constitution
of the United States? Can it be that a corporation is estopped to
claim the benefit of the constitutional provision securing to it
the equal protection of the laws simply because it voluntarily
entered and remained in a state which has enacted a statute denying
such protection to it, and to like corporations from the same
state? Is the right to that protection any less valuable or
fundamental than the right to
Page 119 U. S. 128
remove a suit into the courts of the union for trial? Will it be
held that an express agreement by a corporation not to exercise the
latter right is void and not enforceable, but that a local statute
denying the equal protection of the laws to a corporation of the
state which because that corporation came within the jurisdiction
of the state which assumed to make such denial, and received from
her officers, acting in conformity with her laws, a certificate of
its right to transact business there? Will effect be given in one
case to what (erroneously, I think) is called an implied agreement
to surrender a constitutional right, while an express agreement in
the other to surrender a constitutional right is held to be
invalid?
Even if it were conceded that a state which provides for the
organization, under her own laws, of corporations for the
transaction of every kind of business could arbitrarily exclude
from her limits similar corporations from the remaining states and
declare all contracts made within her jurisdiction with
corporations from other states to be void -- concessions to be made
only for the purposes of this case -- it would not follow that she
could subject corporations of other states, doing business within
her limits under a license from the proper department, to higher
taxes than she imposes upon other corporations of the same class
from the remaining states. The plaintiff in error having been, in
1881, lawfully within New York by its agents, cannot be denied
there the equal protection of the laws because the state which
created it may have adopted a system of taxation different from
that devised by New York. The case, in its legal aspects, is
precisely the same as if Pennsylvania had never passed the statute
of 1873, but New York had, in that year, imposed upon fire
insurance companies from Pennsylvania higher taxes than she imposed
upon similar corporations from other states.
It would seem to be the result of the decision in this case that
New York may prescribe such varying rates of taxation upon
insurance corporations of the remaining 37 states, within her
jurisdiction, as she chooses, the rate for corporations from each
state differing from the rate established for corporations of the
same class from all other states,
Page 119 U. S. 129
and the rate in respect to corporations of other states being
higher than she imposes upon her own corporations of the same
class. Such legislation would be a species of commercial warfare by
one state against the others, and would be hostile to the whole
spirit of the Constitution, particularly the Fourteenth Amendment,
securing to all persons within the jurisdiction of the respective
states the equal protection of the laws.
For the reasons which have been stated, I feel obliged to
withhold my assent to the opinion and judgment of the Court.
