1

right to tax national corporations, and may impose conditions upon such grants. It has done so in the case of the national banks. If a national corporation is a party conducting interstate commerce, Congress may exempt it from State taxation also on that ground. If so engaged, it would be exempt from State taxation, in many cases, under the Federal constitution, without any action by Congress. Interstate commerce conducted by a corporation is entitled to the same protection against State exactions as is given to such commerce conducted by individuals.3

4

§ 672. Power to Confer Right of Eminent Domain within a State. — The national government may exercise the power of eminent domain within the States, whenever necessary to carry into execution the powers conferred upon it by the constitution. The case of Kohl v. United States, has settled the point. Congress has delegated to national corporations the right of eminent domain, to be exercised within the territories.5 And it is probable, judging from the settled practice of the States towards corporations created by themselves, that Congress has power to delegate the right of eminent domain to national corporations, to be exercised within a State without its consent. In the case of some of the national railway corporations, all controversy was avoided by provisions in the statutes creating them, forbidding or rendering impossible the construction of roads within the boundaries of a State without its assent. However, in one case at least, the assent of the State was obtained after the construction of the road. The charter of another national railway corporation provides for the condemnation of private property within States, according to the law of the State in which the property is situated."

§ 673. May Confer on Federal Courts Exclusive Jurisdiction of Suits by and Against. -Congress has power, under the

constitution, to give the Federal courts jurisdiction of all suits by or against national corporations,1 and to authorize such corporations to remove to the Federal courts suits brought against them in the State courts.2 Congress may undoubtedly make the jurisdiction of Federal courts, over suits by or against national corporations, exclusive. The creation of a corporation by Congress is held by the United States Supreme Court, to make any controversy to which such corporation may be a party, a controversy arising under the laws of the United States, and hence a controversy to which the judicial power of the United States extends, irrespective of the citizenship of the parties.3 And it is settled that Congress may make exclusive the jurisdiction of the Federal courts over all controversies arising under a law of the United States, if not, indeed, over all controversies to which the judicial power of the United States extends. Congress may confer a special jurisdiction on a Federal court to try a special matter, and it has exercised such power with reference to a national corporation. In this instance it prescribed that matters and defendants might be joined in a manner which, but for the special authorization, would have constituted multifariousness.5

§ 674. Protection under the Fourteenth Amendment. Apart from the shelter afforded by other clauses of the Federal constitution, a national corporation is probably protected against unreasonable State exactions by the clause of the fourteenth amendment to the Federal constitution, which prohibits a State from denying to any person the equal protection of the laws. It is settled by the decisions of the United States Supreme Court, that a domestic corporation of a State of the Union, is, as to such

1 Osborn v. Bank of United States, 9 Wheat. (U. S.) 738; accord, Kennedy v. Gibson 8 Wall. (U. S.) 498; Pacific Railroad Removal Cases, 115 U. S. 2.

2 Pacific Railroad Removal Cases, supra.

3 Osborn v. Bank of United States, supra; Pacific Railroad Removal Cases, supra.

The Moses Taylor, 4 Wall. (U.S.) 411; Gaines v. Fuentes, 92 U. S. 10; Claflin v. Houseman, Assignee, 93 U. S. 130. These cases by implication overrule Cook v. State Nat. Bank, 52 N. Y. 96.

5 United States v. Union Pacific R. Co. (1878), 98 U. S. 569; for report of case below, see 11 Blatch. (U.S.) 385.

State, a person within the meaning of this constitutional amendment,' although a sister State or foreign corporation is not.2

3

§ 675. Status of National Corporations within the State: Jurisdiction over them. -The status of a national corporation, within a State where it acts, depends upon several circumstances. As we have seen, Congress may exempt a national corporation from State control, so far as such control would impair its efficiency as an agency of the Federal government, and so far as such corporation is a party conducting interstate commerce. In New York, a national corporation is by statute defined to be a domestic corporation of the State, and it may sue in the State courts as citizen of the State. In Pennsylvania, it has been held that a national corporation is not a foreign corporation within the meaning of a State statute imposing a tax on foreign corporations. In another case, a Pennsylvania court, acting upon the rule that a corporation has in general a legal existence everywhere within the limits of the sovereignty from which its corporate existence is derived, decided that a national corporation was, in Pennsylvania, neither an alien nor a citizen of another State of the Union, nor a foreign corporation, and hence that a Federal statute, governing the removal of causes from a State to a Federal court by an alien, did not apply to an application for removal by a national corporation. What has been said of the status of national corporations does not apply to such corporations chartered by Congress, in the exercise of its powers of local legislation over the territories and the District of Columbia. The jurisdiction of the Federal courts over suits by and against national banks is, by Federal statute of March 3, 1887, the same, except as to suits by the United States and in one or two other specified cases, as the jurisdiction of suits by

1 Santa Clara County v. Southern Pacific R. Co., 118 U. S. 394, 396; Pembina &c. Co. v. Pennsylvania, 125 U. S. 181; Minneapolis &c. R. Co. v. Beckwith, 129 U. S. 26.

2 Philadelphia Fire Association v. New York, 119 U. S. 110; Pembina &c. Co. v. Pennsylvania, 125 U. S. 181, 189.

3 N. Y. Code of Civil Procedure, § 3343, clause 18.

• Market National Bank v. Pacific Nat. Bank (1882), 64 How. Pr. (N.Y.) 1. 5 Commonwealth v. Texas &c. R. Co. (1881), 98 Pa. St. 90.

Eby v. Northern Pacific R. Co. (1879,) 36 Leg. Int. 164.

U.S. Stat. 1886-7, page 552,ch. 273.

and against banks not organized under a law of the United States. For the purpose of determining the jurisdiction, a national bank is deemed a citizen of the State in which it is located. The power of a national corporation, other than a banking corporation, to sue, and its liability to be sued, are, since the repeal in 1887 of R. S., § 640, without express regulation by general statute. If the United States Supreme Court adheres to its former decision, any suit by or against a national corporation will continue to be deemed a suit involving a Federal question.2

§ 676. Further of this Subject. An injunction lies to protect a national corporation in the enjoyment of its franchises.3 For example, an injunction lies against the agent of a State, threatening to prevent the exercise of such franchises by the execution of void State laws. And a stockholder of such a corporation may have such remedy.5 A State tax, collected in violation of a Federal franchise, from a stockholder in a national corporation, may be recovered back. The validity of a de facto national corporation will be inquired into only in a direct proceeding for that purpose. Congress has provided, in a particular instance by statute, that a national corporation may be compelled to perform its duties by mandamus, and the courts have enforced such statute. Congress has also provided in a particular instance for the enforcement of rights against a national corporation by the recovery of treble damages in a civil suit and by the fine and imprisonment of the officers of the corporation in a criminal suit.9 It has been held on circuit that the property of a national corpo

1 Ibid.

2 Consult cases cited ante, § 671.

3 Osborn v. Bank of U. S., 9 Wheat. (U. S.) 737; Pelton v. Nat. Bank (1879), 101 U. S. 143; Hills v. Exchange Bank (1881), 105 U. S. 319.

4 Osborn v. Bank of U. S., supra. 5 Evansville Bank v. Britton (1881), 105 U. S. 322.

6 Supervisors v. Stanley, 105 U. S. 305.

Pacific Railroad Removal Cases, 115 U. S. 2. A quo warranto suit, by a State against a corporation originally

chartered by such State, to test the validity of the merger of such corporation into a national corporation, is a suit arising under the laws of the United States. Ames v. Kansas, 111 U. S. 449.

8 Union Pacific R. Co. v. Hall (1875), 91 U. S. 343. Same case below, Hall v. Union Pacific R. Co., 3 Dill. (U. S.) 515.

9 Act of June 20, 1874, 18 St. 111; Pelton v. Nat. Bank (1879), 101 U. S. 143; Hills v. Exchange Bank (1881), 105 U. S. 319.

ration may be appropriated by a State, within whose limits such property is situated, under the State's right of eminent domain, for the use of a State corporation. In this case, merely a crossing for the line of a State railway corporation was taken. It is probable that the property of a national corporation cannot be appropriated by a State, under any circumstances which would impair the efficiency of such corporation as a Federal agent. Land occupied by a national corporation is in general subject to the criminal jurisdiction of the State where the land lies.2

§ 677. How Dissolved. We come now to the consideration of the question, how national corporations may be dissolved. To the present time, the only mode in which such corporations have ceased to exist is by the expiration of the terms for which their charters were granted, as was the case with the first and second United States Banks, or by some other method expressly provided for in their charters, as in the case of banks formed under the national banking statutes. The merger of the Union Pacific Railroad Company in the Union Pacific Railway Company was accomplished by a consolidation made in pursuance of the charter of the original company and with its consent. A national corpo

ration may probably be dissolved, like other corporations, by an accepted surrender of its franchise to exist, by a judicial forfeiture of such franchise for non-user or misuser of it,3 or by the appropriation of such franchise by the Federal government under its rights of eminent domain. It is possible that such a corporation may be dissolved by the operation of some future Federal statute governing bankruptcy. And such a corporation may be dissolved, as before indicated, by any method provided for in its charter.

§ 678. Power of Congress to Revoke their Charter. The question, whether a franchise to be a corporation and such franchises as are given with it, conferred by one Congress without conditions, are irrevocable by a future Congress, is one of speculative interest rather than practical importance, as the charters of

1 Union Pacific R. Co. v. Burlington &c. Co. (1880), 1 McCrary (U. S.), 452.

2 In re O'Connor, 37 Wis. 379.

8 Post, Ch. 152.