A foreign corporation, for lump sums, made and performed
contracts to furnish completed automatic railway signal systems in
Virginia, in the performance of which the materials, supplies,
machinery, devices, and equipment were brought from without, but
their installation, as structures permanently attached to the soil,
required employment of local labor, digging of ditches,
construction of concrete foundations, and painting. Held
that local business was involved, separate and distinct from
interstate commerce, and subject to the licensing power of the
state. Browning v. Waycross, 233 U. S.
. The Virginia law imposing a fee for the privilege of
doing local business of $1,000 on foreign corporations with capital
over $1,000,000 and not exceeding $10,000,000 (Acts 1910, c. 53, §
as not arbitrary or unreasonable under all
the circumstances, though the case is on the border line.
118 Va. 301 affirmed.
Page 246 U. S. 501
The case is stated in the opinion.
Page 246 U. S. 508
MR. JUSTICE McREYNOLDS delivered the opinion of the Court.
Plaintiff in error seeks reversal of a judgment of the Supreme
Court of Appeals of Virginia which affirmed an order of the
Corporation Commission imposing a fine upon it for doing business
within the state without first obtaining proper authority.
Page 246 U. S. 509
The essential facts concerning business done as found by the
Commission and approved by Supreme Court are these:
"The defendant is a corporation of the State of New York, having
an authorized capital of $5,000,000. Its principal office and
factory is at Rochester, N.Y. where it owns and operates a large
manufacturing plant devoted to the manufacture of materials chiefly
used in the construction of railway signals which it sells and
constructs all over the world. It has a branch factory at Montreal,
Canada, and maintains branch offices in New York City, Chicago, and
"By contract dated the 5th day of May, 1914, with the Southern
Railway Company, the defendant agreed to furnish certain materials,
supplies, machinery, devices and equipment, as well as all
necessary labor, and to install, erect, and put in place certain
signals and apparatus shown on the plans described in the
specifications, from Amherst to Whittles, Virginia, fifty-eight
miles, and to 'complete the entire system and turn same over to the
railway company as a finished job,' subject to inspection and
acceptance, for $85,597. Similar contracts had been previously made
and fully performed, one dated September 6, 1911, covering the
lines of the Southern Railway in Virginia from Monroe to Montview,
Virginia, thirteen miles, for $16,015, and one dated July 18, 1913,
from Orange to Seminary, Virginia, seventy-six miles, for $112,428.
The aggregate distance in this state covered by these contracts
being 147 miles, and the total consideration being $214,040."
"The purpose of these signals is to promote safety of railway
operation, and they operate automatically."
"In order to construct these signals as required by the
contract, it was necessary to employ in this state labor, skilled
and unskilled, to dig ditches in which conduits for the wires are
placed, to construct concrete foundations,
Page 246 U. S. 510
and to paint the completed structures. The completed structures
are along the side of the railway track, about two miles apart, and
are twenty-two or twenty-three feet high. In the language of the
"It is necessary to erect the signal mechanism, the masts
supporting the mechanism, the houses for protecting the relays,
reactors, reactants, and other similar electrical devices protected
from the weather, then the transformers, high tension line
arresters, and low tension line arrestors."
"The completed structures are permanently attached to the
freehold upon concrete bases."
We think the recited facts clearly show local business separate
and distinct from interstate commerce within the doctrine announced
and applied in Browning v. Waycross, 233 U. S.
It is further insisted that, as the amount of prescribed
entrance fee is based upon maximum capital stock, it constitutes a
burden on interstate commerce, contrary to the federal
Section 38a, c. 53, Acts of Virginia 1910 (copied in margin
), requires every
foreign corporation with capital
Page 246 U. S. 511
over one million and not exceeding ten million dollars when it
obtains a certificate of authority to do local business to pay a
fee of one thousand dollars. Inspection of the statute shows that
prescribed fees do not vary in direct proportion to capital stock,
and that a maximum is fixed. In the class to which plaintiff in
error belongs, the amount specified is one thousand dollars and,
under all the circumstances, we cannot say this is wholly arbitrary
Considering what we said in Baltic Mining Co. v.
Massachusetts, 231 U. S. 68
St. Louis Southwestern Ry. Co. v. Arkansas, 235 U.
; Kansas City, Fort Scott & Memphis Ry.
Co. v. Kansas, 240 U. S. 227
Kansas City, Memphis & Birmingham R. Co. v. Stiles,
242 U. S. 111
two characteristics of the statute just referred to must be
regarded as sufficient to save its validity. It seems proper,
however, to add that the case is on the border line. See Looney
v. Crane Co., 245 U. S. 178
International Paper Co. v. Massachusetts, ante,
246 U. S. 135
Locomobile Co. v. Massachusetts, ante, 246 U. S. 146
The judgment of the court below is
"Sec. 38a. Every foreign corporation, when it obtains from the
state Corporation Commission a certificate of authority to do
business in this state, shall pay an entrance fee into the treasury
of Virginia, to be ascertained and fixed as follows:"
"For a company whose maximum capital stock is fifty thousand
dollars or less, thirty dollars; for a company whose capital stock
is over fifty thousand dollars, and not to exceed one million
dollars, sixty cents for each one thousand dollars or fraction
thereof; over one million dollars, and not to exceed ten million
dollars, one thousand dollars; over ten million dollars, and not to
exceed twenty million dollars, one thousand two hundred and fifty
dollars; over twenty million dollars, and not to exceed thirty
million dollars, one thousand five hundred dollars; over thirty
million dollars, and not to exceed forty million dollars, one
thousand seven hundred and fifty dollars; over forty million
dollars, and not to exceed fifty million dollars, two thousand
dollars; over fifty million dollars, and not to exceed sixty
million dollars, two thousand two hundred and fifty dollars; over
sixty million dollars, and not to exceed seventy million dollars,
two thousand five hundred dollars; over seventy million dollars,
and not to exceed eighty million dollars, two thousand seven
hundred and fifty dollars; over eighty million dollars, and not to
exceed ninety million dollars, three thousand dollars; over ninety
million dollars, five thousand dollars, provided, however, that
foreign corporations without capital stock shall pay fifty dollars
only for such certificate of authority to do business in this
"For the purpose of this act, the amount to which the company is
authorized by the terms of its charter to increase its capital
stock shall be considered its maximum capital stock."