PART ONE COMMENTARIES Chapter I. The Admittance of Foreign Corporations. PART TWO THE ANNOTATED ACT Chapter II. The Act for the Admission of Foreign Corporations. DIVISION III SYSTEM OF FOREIGN CORPORATION JURISPRUDENCE PART ONE-Commentaries CHAPTER I. THE ADMITTANCE OF FOREIGN CORPORATIONS. $338. Power of the State to Impose Conditions of Admittance. $339. Constitutional Limitations. $340. Comity. $341. Effect of Compliance with Local Law. $342. Extra-Territorial Force of Judgments. $343. Status of Foreign Corporations in Michigan Courts. $344. Service of Process upon Foreign Corporations. §338. Power of the State to Impose Conditions of Admittance. A corporation is a creature of local law. Because such laws have no extra-territorial force, the corporate children of a parent state need not be recognized by a sister state. Each state has power to admit foreign corporations without restriction, or to admit them upon conditions, or to admit some and exclude others, or to exclude all, except as the power is restricted by limitations expressed in the Federal Constitution1. 1. In the leading case of Paul v. Virginia 8 Wall. (U. S.) 168, 19 L. ed. 357-360, Justice Field said: "The corporation being the mere creation of local law can have no legal existence beyond the limits of the sovereignty where created.... Having no absolute right of recogrition in other states, but depending for such recognition and enforcement of its contracts upon their assent, it follows, as a matter of course, that such assent may be granted upon such terms and condi tions 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 perform ance of its contracts with their citizens as, in their judgment, will best promote the public interest. The whole matter is in their discretion." New York Mortgage Co. v. Secretary of State, 150 Mich. 197; Pollock v. German Fire Ins. Co., 132 Mich. 225-227; Waters-Pierce Oil $339. Constitutional Limitations. The only limitations upon the power of a state to exclude foreign corporations arise where the corporation is employed by the Federal Government in the exercise of governmental or quasigovernmental functions2, and in that other class of instances where the corporation is engaged exclusively in foreign or interstate commerce3. Corporations are not "citizens" within the meaning of the clause of the Federal Constitution providing that, "The citizens of each state shall be entitled to all the privileges and immunities of citizens in the several states", nor are statutes excluding, or imposing conditions upon, foreign corporations within the prohibitions of the Fourteenth Amendment5. $340. Comity. Comity, which in a word expresses a courteous disposition to accommodate, has led the sister states to forbear exercise of the power of total exclusion of foreign corporations, except in instances where admittance of a foreign company would transgress some principle of local public policy. In these instances the hand of the state is raised in defense of her citizens, but otherwise it is extended in dignified, if not in cordial, welcome. In recent years the tendency throughout the states has been to impose more or less onerous conditions upon the admittance of foreign corporations. This policy has been prompted by various motives sometimes by a spirit of retaliation, induced by the stringent laws of other states, and sometimes by a just desire to bring these ambulatory aliens under definite state control, and to fix upon them some fair portion of the common burden of state support. Except as to corporations employed by the federal government, and corporations engaged solely in foreign or inter-state commerce, the admittance of a foreign corporation within our state Co. v. Texas, 177 U. S. 28, 44 L. ed. 657; Attorney General V. A. Booth & Co., 143 Mich. 89-102. 2. Pembina etc. Mining & Milling Co. v. Pennsylvania, 125 U. S. 181, 31 L. ed. 650; Hooper v. California, 155 U. S. 648, 39 L. ed. 297300. 3. Neyens v. Worthington, 150 Mich. 580-587. 4. Pembina etc. Mining & Milling Co. v. Pennsylvania, ante.; Pollock v. German Fire Ins. Co., 132 Mich. 225-227; U. S. Const. Art. IV. 5. Attorney General v. A. Booth & Co., 143 Mich. 89-102: Pollock v. German Fire Ins. Co., ante. 6. New York Mortgage Co. V. Secretary of State, 150 Mich. 197. borders is purely a matter of comity. This comity may be extended, suspended or withheld upon such terms as the legislature may prescribe. §341. Effect of Compliance with Local Law. After a foreign corporation has been lawfully admitted to transact business in this state, it is upon practically the same footing as a domestic corporations. The terms of its charter are respected so far as they are in harmony with our laws, but powers and privileges withheld from domestic corporations cannot be lawfully exercised by foreign corporations in this state1o. By entering this state such corporations tacitly agree to submit to its laws. Statutes of a foreign corporation's home state relating to remedies, penalties and forfeitures do not follow the corporation across our borders11. To permit them to do so would be to give such statutes extra-territorial effect-to permit the laws of a foreign jurisdiction to override our own. §342. Extra-Territorial Force of Judgments. The "full faith and credit" clause12 of the Federal Constitution renders the judgment of a court of a foreign jurisdiction conclu 7. Stack v. Detour Lumber Co., 151 Mich. 21-29; New York Mortgage Co. v. Secretary of State, 150 Mich. 197-202; Attorney General v. A. Booth & Co., 143 Mich. 89-102; People v. Home Life Assurance Co., 111 Mich. 405; People v. Hawkins, 106 Mich. 479-482; Moline Plow Co. v. Wilkinson, 105 Mich. 57-60; Shafer Iron Co. v. Stone, 88 Mich. 464470; Isle Royale Land Co. v. Osmun, 76 Mich. 162; Hartford Fire Ins. Co. v. Raymond, 70 Mich. 485-501; Diamond Match Co. v. Powers, 51 Mich. 145-148; People v. Howard, 50 Mich. 239-247; State Treasurer Auditor General, 46 Mich. 224; Home Ins. Co. v. Davis, 29 Mich. 238; Thompson v. Waters, 25 Mich. 214-220; Glens Falls Ins. Co. v. Circuit Judge, 21 Mich. 579; Hooper v. California, 155 U. S. 648, 39 L. ed. 297-299; Floyd v. National Loan & Investment Co., 49 W. Va. 327, 54 V. L. R. A. 536. 8. Stack v. Detour Lumber Co., 151 Mich. 21-29; Isle Royale Land Co. v. Osmun, 76 Mich. 162-171; Floyd v. National Loan & Investment Co., 49 W. Va. 327-54 L. R. A. 536-544. 9. Warner v. Delbridge & Cameron Co., 110 Mich. 590-594. 10. People v. Howard, 50 Mich. 239-247; Thompson v. Waters, 25 Mich. 214, C. L. 1897, Sec. 10467. 11. It is the charter alone, not general legislation, that is given recognition. Thus a local statute of Illinois providing that Illinois corporations shall not interpose the plea of usury, will not be recognized in a suit brought by an Illinois corporation in a Michigan court upon a usurious contract made in Michigan. -Stack v. Detour Lumber Co., 151 Mich. 21-29. 12. U. S. Const. Art. IV., Sec. 1. |