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as a condition of the continuance of the corporate existence, the observance of whatever police regulation it may see fit to establish, in the same manner, and to the same extent, that it may impose conditions of every sort and kind, in the original grant of the charter. When the power to amend or repeal is not reserved, the question becomes important, whether the corporation may be subjected to this regulation. In regard to police regulations generally, we have seen that the corporation occupies no vantage ground above the individual ; that both corporations and natural persons may be subjected to the same regulations under like circumstances; and that the institution of new and more burdensome regulations, after the creation of the corporation, does not constitute any infringement of the corporate rights, provided no attempt is made, under the guise of police regulation, to destroy or impair any of the substantial rights of the corporation. It is, therefore, not difficult, under the principles explained and set forth in a previous section, to justify the regulation of the rates and charges of railroads, turnpikes, telegraph and telephone companies, and other corporations, to which the government has granted some special franchise — to each of the corporations named is given the right to appropriate land in the exercise of the right of eminent domain, without which it would be almost impossible to construct their lines or road — for the grant of the franchise made these corporations legal monopolies, as against the public, and consequently they became subject to police regulation, in order to protect the public from extortion. It has been generally held, with only one or two exceptions, that the legislature may regulate the charges of corporations of this kind.3
See ante, $ 189.
$ 98. 3 Railroads — Chicago, etc., R. R. v. Iowa, 94 U. S. 115; Peck o. Chi. cago, etc.,R.R., 94 U. S. 164, 176; Union Pac. Ry. v. U. S., 99 U. S. 700; Cin., H. & D. R. R. Co. o. Cole, 29 Ohio, 125; Iron R. R. Co. v. Lawrence
Whether corporations, which receive no franchise or privilege from the government, may be subjected to State regulation of their charges in the conduct of their business, for example, a corporation engaged in the four milling or cotton manufacturing business, depends upon other grounds. Under the principle established in Munn v. Illinois, such a regulation may be easily justified, where the business under peculiar circumstances has become a virtual monopoly. So, also, may a corporation of this kind be subjected to such a regulation, because the very creation of the corporation, which constitutes an authority for the compact combination of the capital of many persons in one business, may be considered a special franchise, increasing the power of those who compose the corporation, over the property and the necessities of others. There has been no need for the regulations of the charges of such corporations, and consequently we have no adjudications upon the subject, except the case of Munn v. Illinois.
It has been stated, as the generally accepted doctrine, that the State cannot make a valid contract in limitation of the exercise of its police power. But a disposition is displayed by the authorities to make of the power to regulate the charges of corporations an exception to this general rule, by denying to the legislature the power to regulate such charges by subsequent laws, where the power to do so
Furnace Co., 29 Ohio St. 208; Chicago & Alton R. R. Co. v. People, ex rel Koerner, 67 mi. 11 (16 Am. Rep. 599); Ruggles v. People, 91 III. 256; Hlinois Cent. R. R. Co. 0. People, 95 Ill. 313; Blake 0. Winona etc., R. R. Co., 19 Minn. 418 (18 Am. Rep. 345); $. c. 94 U. S. 180; Mobile & M. R. R. Co. v. Steiner, 61 Ala. 559. Contra, Atty-Gen. v. Chicago, etc., R. R. Co., 35 Wis 425; Philadelphia, etc., R. R. Co. e. Bowers, 4 Houst. 506. Gas and water companies — Spring Valley Water. works v. Schottler, 110 U. S. 347; State v. Columbus Gaslight, etc., Co., 34 Ohio St. 216 (32 Am. Rep. 390). Ferry companies — Parker 0. Metropolitan R. R. Co., 109 Mass. 507. Telephone Companies - Hockett D. State, Sup. Ct. Ind. Cent. L. J., July 9, 1886.
1 94 U. S. 113.
is denied by the charter, or where the lawful charges are stipulated in the charter. Chief Justice Waite, of the Supreme Court of the United States, expressed the opinion of the court on this point, in the following language :
“ This company, in the transaction of its business, has the same rights and is subject to the same control as private individuals under the same circumstances. It must carry when called upon to do so, and can charge only a reasonable sum for the carriage. In the absence of any legislative regulation upon the subject, the courts must decide for it, as they do for private persons when controversies arise, what is reasonable. But when the legislature steps in and prescribes a maximum of charge, it operates upon this corporation the same as it does upon individuals engaged in a similar business. It was within the power of the company to call upon the legislature to fix permanently this limit and make it a part of the charter, and, if it was refused, to abstain from building the road and establishing the contemplated business. If that had been done the charter might have presented a contract against future legislative interfer
But it was not; and the company invested its capital, relying upon the good faith of the people and the wisdom and impartiality of the legislators for protection against wrong under the form of legislation regulation.” 1
$ 193. Police regulation of foreign corporations. — It is provided by the United States constitution that the citi
2 zens of each State shall be entitled to all the privileges and immunities of citizens of the several States ;” and under this clause of the constitution the citizen of one State is
Ch. J. Waite in Chicago, etc., R. R. Co. v. Iowa, 94 U. S. 157. See, also, Spring Valley Water Works v. Schottler, 110 U. S. 347; Hamilton v. Keith, 5 Bush, 458; Ilinois Cent. R. R. Co. v. People, 95 Ill. 113; Sloan v. Pacific R. R. Co., 61 Mo. 24 (21 Am. Rep. 397;) Farmers' Loan, etc. v. Stone, et. al., U. S. C. C. Miss., 18 Cent. L. J. 472. 2 U. 8. Const., art. IV., § 2, cl. 1.
protected against any discrimination in another State between himself and the citizens of the latter State. He is entitled to the equal enjoyment of the privileges of the citizen, and any arbitrary discrimination between him and the citizen of the latter State in the matter of police regulations, would be in violation of this constitutional provision. But corporations are not considered to be citizens within the operation of this guaranty. The legal existence of a corporation is confined to the territory of the State which brings the corporation into existence. The corporations of one State are not entitled to the privileges or immunities of the citizens of the several States, and consequently they cannot claim the right to transact business in any other State but the one in which they were created. If they are permitted to exercise their corporate powers in any other State, it is a privilege and not a guaranteed right. A State may, without violating any provision of the constitution of the United States, prohibit altogether the doing of business by foreign corporations within its territory; and if the privilege is granted, it may be coupled with all sorts of conditions, the performance of which constitutes a condition precedent to the enjoyment of the privilege; and these requirements will not be open to constitutional objection, because they are not made applicable to domestic corporations. It is even permissible for the State legislature to
Liverpool Ins. Co. v. Mass., 1 Wall. 506; Bank of Augusta o. Earle, 13 Pet. 519; Purdy ở. N. Y. & N. H. R. R. Co., 61 N. Y. 353; Tatem c. Wright et al., 23 N. J. L. 429; Slaughter v. Commonwealth, 13 Gratt. 767; Osborn v. Mobile, 44 Ala. 493; Commonwealth v. Milton, 12 B. Mon. 212; People v. Thurber, 13 III. 554; Wood Mowing Machine Co. o. Caldwell, 54 Ind. 270 (23 Am. Rep. 641); Am. Union Tel. Co. o. W. U. Tel. Co., 67 Ala. 26 (42 Am. Rep. 90). It is very common to subject foreign insurance companies to special and strict police regulations. Exempt Firemen's Fund v. Roome, 93 N. Y. 313 (45 Am. Rep. 217); Thorne o. Travelers' Ins. Co., 80 Pa. St. 15 (21 Am. Rep. 89); Cincinnati M. H. Assurance Co. v. Rosenthal, 55 III. 85 (8 Am. Rep. 626); Pierce v. People, 106 Ill. 11 (46 Am. Rep. 683); Fire Department of Milwaukee v. Helfenstein, 16 Wis. 136. See Doyle o. Ins. Co., 94 U. S. 535.
provide for the exaction of a penalty from any agent of a foreign corporation (in this case it was an insurance company), who shall act without authority from the State, although the contract is made out of the State, and provides that he shall be deemed the agent of the other party to the contract. But a foreign corporation cannot be taxed for the purchase of raw material, which is shipped from the taxing State to its native State for manufacture, for that cannot be considered a “ doing of business within the commonwealth." 2 In the absence of special regulations, whenever a corporation does business in another State, it is so far considered a corporation of that State as to be amenable to its ordinary police regulations.3
§ 194. Police regulation of railroads. — The police regulation of the management of railroads is extremely common and varied, and consequently the exercise of police power over them has more frequently been the subject of litigation. But there is no more need for a judicial determination of the limitations upon police power in this phase of its exercise than in any other. The same principles govern its exercise in every case. Every one, whether a corporation or a natural person, must so enjoy and make use of his rights as not to injure another; and the State may institute whatever reasonable regulations may be necessary to prevent injury to the public or private persons. Here, as elsewhere, however, the exercise of police power must be confined to those regulations which may be needed, and which do actually tend, to prevent the infliction of injury upon others. And it is a judicial question whether a particular regulation is a reasonable exercise of police power. The public necessity of the exercise of the police power
i Pierce v. People, 106 Ill. 11 (46 Am. Rep. 683).
etc., R. R. Co., 53 N. Y. 164; McGregor v. Erie Railway, 35 N. J. L. 115.