Rev.Stat., § 1011, providing that there shall be no reversal in
this Court upon a writ of error for error in ruling on any plea of
abatement other than one to the jurisdiction of the court, does not
apply to writs of error to state courts, but only to lower federal
courts.
The subdivision and rearrangement of § 22 of the Judiciary Act
of 1789 in the Revised Statutes of 1873 did not work any change in
the purpose and meaning of the original act.
The statute of Kansas of 1905, requiring certain classes of
foreign corporations to file statements is an invalid restriction
and burden and unconstitutional as to foreign corporations engaged
in interstate commerce, under the commerce clause of the federal
Constitution.
International Textbook Co. v. Pigg,
217 U. S. 91.
80 Kan. 29 reversed.
The facts, which involve the application of § 1011, Rev.Stat.,
to writs of error to state courts and also the constitutionality of
a statute of Kansas affecting the right
Page 226 U. S. 206
of corporations of other states to do business in Kansas, are
stated in the opinion.
Page 226 U. S. 211
MR. JUSTICE VAN DEVANTER delivered the opinion of the Court.
By suits begun in the District Court of Morris County, Kansas,
and consolidated for purposes of trial and judgment, seven judgment
creditors of one Vickers sought to set aside, as fraudulent, a
conveyance by him, and to
Page 226 U. S. 212
subject the land included therein to the satisfaction of their
several judgments. The plaintiffs were corporations organized under
the laws of states other than Kansas, and four of them were doing a
purely interstate business in that state, but without complying
with its laws presently to be mentioned. The defendants set up this
noncompliance by an answer in the nature of a plea in abatement,
and the court sustained the plea and dismissed the suits as to the
four plaintiffs. As to the other three plaintiffs, relief was
denied for other reasons, which need not be stated. The judgment
was affirmed by the supreme court of the state against the
contention that the laws of Kansas under which the plea in
abatement was sustained are violative of the commerce clause of the
Constitution of the United States, 80 Kan. 29, and then the case
was brought here.
Some minor questions of appellate practice were urged upon our
attention, but their statement and consideration have become
unnecessary through the concession of counsel for plaintiffs in
error, made during the oral argument and acted upon at the time,
that the writ of error might be dismissed as to the Aultman and
Miller Buckeye Company, the Consolidated Steel & Wire Company,
and the Galveston Rope Company. Therefore, attention need be given
only to the ruling upon the plea in abatement.
Our power to review this ruling is challenged because of the
statutory provision that there shall be no reversal in this Court
upon a writ of error "for error in ruling any plea in abatement,
other than a plea to the jurisdiction of the court." Rev.Stat. §
1011. This provision has been part of the judiciary acts from the
beginning, and often has been applied upon writs of error to the
circuit and district courts, but never to a case coming here from a
state court.
Piquignot v. Pennsylvania
Railroad Co., 16 How. 104, and
Stephens v.
Monongahela Bank,, 111 U. S. 197,
illustrate its application in cases brought here from
Page 226 U. S. 213
circuit courts, and
International Textbook Co. v. Pigg,
217 U. S. 91, and
International Textbook Co. v. Lynch, 218 U.
S. 664, are cases in which it was not applied upon writs
of error to state courts. This difference in the treatment of the
two classes of cases has not been inadvertent, but deliberate, and
the reason for it is at once apparent when § 22 of the original
Judiciary Act, 1 Stat. 84, c. 20, is examined. The provision
originated in that section, and was there associated with other
provisions which unmistakably show that it was intended to embrace
only writs of error to the circuit and district courts. At the time
of the revision in 1873, § 22 was divided into several shorter
sections, and included in the revision according to an arrangement,
adopted for purposes of convenience only, whereby the several parts
of the original section became more or less separated; but that, in
the absence of some substantial change in phraseology, did not work
any change in their purpose or meaning. Rev.Stat. § 5600;
Hyde
v. United States, 225 U. S. 361;
McDonald v. Hovey, 110 U. S. 619.
This is a writ of error to a state court, and so our power to
review the ruling upon the plea in abatement is not affected by §
1011.
The statute of Kansas under which the plea was sustained is
embodied in the General Statutes of 1905, and provides, in §§
1332-1336, that to entitle a corporation organized under the laws
of another state to do business in Kansas, it must (a) make
application to, and obtain the permission of, the Charter Board of
the state, (b) accompany its application with a fee of $25, (c)
file with the Secretary of State its irrevocable consent that
process against it may be served upon that officer, (d) be
organized for a purpose for which a domestic corporation may be
organized, (e) pay to the State Treasurer, for the benefit of the
permanent school fund, a specified percent of its authorized
capital, and (f) file with the Secretary of State a certified copy
of its charter. And, by § 1358 the
Page 226 U. S. 214
statute provides that each corporation for profit, doing
business in the state, except banking, insurance, and railroad
corporations, shall annually prepare and deliver to the Secretary
of State a complete and detailed statement, exhibiting:
"1st. The authorized capital stock. 2d. The paid-up capital
stock. 3d. The par value and the market value per share of said
stock. 4th. A complete and detailed statement of the assets and
liabilities of the corporation. 5th. A full and complete list of
the stockholders, with the post office address of each, and the
number of shares held and paid by each. 6th. The names and post
office addresses of the officers, trustees, or directors and
manager elected for the ensuing year, together with a certificate
of the time and manner in which such election was held."
This section further provides that a failure to file such
statement by and corporation doing business in the state, and not
organized under its laws, shall work a forfeiture of the right or
authority to do business in the state, and that
"no action shall be maintained or recovery had in any of the
courts of this state by any corporation doing business in this
state without first obtaining the certificate of the Secretary of
State that statements provided for in this section have been
properly made."
The four corporations against which the plea was sustained were
corporations for profit, organized under the laws of states other
than Kansas, were not banking, insurance, or railroad corporations,
were doing business in Kansas -- a purely interstate business --
and had not complied with the statute just described. There can be
no doubt, therefore, that if the statute, especially § 1358, is
valid as against such corporations, the plea was rightly sustained
-- otherwise, it should have been overruled. So the question for
decision is whether, consistently with the commerce clause of the
Constitution of the United States, a state may thus restrict and
burden the right to do interstate business within its limits. This
precise
Page 226 U. S. 215
question was presented to this Court and decided in the negative
in the case of
International Textbook Co. v. Pigg,
217 U. S. 91 -- a
case in which the Supreme Court of Kansas had applied the
provisions of § 1358 (§ 1283, Gen.Stat. 1901) to a corporation of
another state, doing an interstate business in Kansas. And the
decision of this Court in that case was shortly thereafter followed
in the similar case of
International Textbook Co. v.
Lynch, 218 U. S. 664,
brought here on error to the Supreme Court of Vermont. It is due to
the Supreme Court of Kansas to observe that this Court's decision
in the
Pigg case had not been made when that court's
decision in the present case was given; but, in saying this, we
would not be understood as implying that this case announced any
new doctrine in the
Pigg case, for it but reiterated and
applied principles which were already well recognized, as was shown
in the earlier cases of
Paul v.
Virginia, 8 Wall. 168,
75 U. S. 182;
Cooper Mfg. Co. v. Ferguson, 113 U.
S. 727,
113 U. S. 734,
and
Crutcher v. Kentucky, 141 U. S.
47,
141 U. S.
56.
As accurately reflecting what was held in the
Pigg
case, we excerpt the following from the opinion of the court,
delivered by Mr. Justice Harlan (pp.
217 U. S. 109,
217 U. S.
112):
"To carry on interstate commerce is not a franchise or a
privilege granted by the state; it is a right which every citizen
of the United States is entitled to exercise under the Constitution
and laws of the United States, and that the accession of mere
corporate facilities, as a matter of convenience in carrying on
their business, cannot have the effect of depriving them of such
right, unless Congress should see fit to interpose some contrary
regulation on the subject"
"
* * * *"
"How far a corporation of one state is entitled to claim in
another state, where it is doing business, equality of treatment
with individual citizens in respect of the right
Page 226 U. S. 216
to sue and defend in the courts is a question which the
exigencies of this case do not require to be indefinitely decided.
It is sufficient to say that the requirement of the statement
mentioned in § 1283 [§ 1358, Gen.Stat. 1905] of the statute imposes
a direct burden on the plaintiff's right to engage in interstate
business, and therefore is in violation of its constitutional
rights. It is the established doctrine of this Court that a state
may not, in any form or under any guise, directly burden the
prosecution of interstate business. But such a burden is imposed
when the corporation of another state, lawfully engaged in
interstate commerce, is required, as a condition of its right to
prosecute its business in Kansas, to make and file a statement
setting forth certain facts which the state, confessedly, could not
control by legislation. It results that the provision as to the
statement mentioned in § 1283 [§ 1358, Gen.Stat. 1905] must fall
before the Constitution of the United States, and with it --
according to the established rules of statutory construction --
must fall that part of the same section which provides that the
obtaining of the certificate of the Secretary of State that such
statement has been properly made shall be a condition precedent to
the right of the plaintiff to maintain an action in the courts of
Kansas."
Following the decision in that case, we held that the statute
upon which the plea in abatement was rested is unconstitutional and
void, and that the plea should not have been sustained, but
overruled.
The judgment is reversed as to the remaining plaintiffs in
error, and the case is remanded for further proceedings not
inconsistent with this opinion.
Reversed.
MR. JUSTICE PITNEY did not hear the argument or participate in
the decision of this case.