216 U.S. 146 (1910), 45, Ludwig v. Western Union Telegraph Company

Docket Nº:No. 45
Citation:216 U.S. 146, 30 S.Ct. 280, 54 L.Ed. 423
Party Name:Ludwig v. Western Union Telegraph Company
Case Date:February 21, 1910
Court:United States Supreme Court
 
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Page 146

216 U.S. 146 (1910)

30 S.Ct. 280, 54 L.Ed. 423

Ludwig

v.

Western Union Telegraph Company

No. 45

United States Supreme Court

February 21, 1910

Argued April 13, 14, 1909

APPEAL FROM THE CIRCUIT COURT OF THE UNITED STATES

FOR THE EASTERN DISTRICT OF ARKANSAS

Syllabus

On the authority of Western Union Telegraph Co. v. Kansas, ante, p . 1, and Pullman Car Co. v. Kansas, ante, p. 55, held that:

A state statute which requires a foreign corporation engaged in interstate commerce to pay, as a license tax or fee for doing intrastate business, a given amount on its entire capital stock, whether employed within the state or elsewhere, directly burdens the interstate business of such corporation and its property outside the jurisdiction of the taxing state and is unconstitutional and void, and so held as to the Wingo Law of Arkansas of May 13, 1907.

Publication by proclamation by a state officer in his official capacity that a foreign corporation engaged in interstate and local business is not authorized, but is forbidden from continuing, to do local business would produce irreparable injury to such corporation, and, in order to prevent such contemplated or threatened injury, a court of equity may enjoin the state officers from issuing such proclamation if the state statute on which the contemplated action is based is unconstitutional.

An action brought by a corporation against a state officer to obtain such an injunction is not an action against the state within the meaning of the Eleventh Amendment. Western Union Telegraph Company v. Andrews, post, p. 165.

The facts, which involve the constitutionality of certain provisions of the Wingo Act of Arkansas applicable to foreign corporations, are stated in the opinion.

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HARLAN, J., lead opinion

MR. JUSTICE HARLAN delivered the opinion or the court:

The Western Union Telegraph Company, a corporation of New York, doing business, both interstate and intrastate, in Arkansas, as it had done for many years, brought this [30 S.Ct. 281] suit against O. C. Ludwig, Secretary of State of Arkansas, for the purpose of obtaining a decree that the statute of that state of May 13th, 1907, entitled, "An Act to Permit Foreign Corporations

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to Do business in Arkansas, and Fixing Fees to Be Paid by All Corporation," Acts of Ark.1907, p. 744, was unconstitutional, null, and void, and enjoining the defendant, in his official capacity, from attempting to revoke, or proclaiming through official newspaper publications that he had revoked, the authority of the plaintiff to do business in Arkansas, or that it had no right to continue doing business in that state. The plaintiff, in its bill, asked such other and further relief as the case might require and as might seem just.

A temporary injunction was issued, and thereafter the defendant demurred and answered at the same time. The demurrer was on these grounds: that the court was without jurisdiction to hear and determine the case, "the same being, in effect, a suit against the state" by a citizen of another state, to prevent the enforcement of one of its criminal or penal statutes; that the facts stated in the bill are not sufficient to constitute a cause of action nor to warrant the relief asked, and that the bill was wholly without equity. The answer denied all the material allegations of the bill.

Subsequently, the plaintiff, by leave of the court, filed an amendment of its bill. To that amendment no answer was made, but, all parties being present, the cause was heard, without objection, on the demurrer to the bill. The demurrer was overruled, and the defendant having elected not to plead further, the injunction previously granted was made perpetual. From that order the present appeal was prosecuted.

The above statute, known as the Wingo Act, whose constitutionality is questioned by the plaintiff, is as follows (the italics being ours):

§ 1. Every company or corporation incorporated under the laws of any other state, territory, or country, including foreign railroad and foreign fire and life insurance companies, now or hereafter doing business in this state, shall file in the office of the Secretary of State in this state a copy of its charter or articles of incorporation or association, or a copy of its certificate of incorporation, duly authenticated and certified by the

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proper authority, together with a statement of its assets and liabilities and the amount of its capital employed in this state, and shall also designate its general office or place of business in this state, and shall name an agent upon whom process may be served. Provided, before authority is granted to any foreign corporation to do business in this state, it must file with the Secretary of State a resolution adopted by its board of directors, consenting that service of process upon any agent of such company in this state, or upon the Secretary of State of this state, in any action brought or pending in this state, shall be a valid service upon said company; and, if process is served upon the Secretary of State, it shall be his duty to at once send it by mail, addressed to the company at its principal office, and if any company shall, without the consent of the other party to any suit or proceeding brought by or against it in any court of this state, remove said suit or proceeding to any federal court, or shall institute any suit or proceeding against any citizen of this state in any federal court, it shall be the duty of the Secretary of State to forthwith revoke all authority to such company and its agents to do business in this state, and to publish such revocation in some newspaper of general circulation published in this state, and if such corporation shall thereafter continue to do business in this state, it shall be subject to the penalty of this act for each day it shall continue to do business in this state after such revocation.

§ 2. Any foreign corporation which shall fail to comply with the provisions of this act, and shall do any business in this state, shall be subject to a fine of not less than $1,000, to be recovered before any court of competent jurisdiction, and all such fines so recovered shall be paid into the general revenue fund of the county in which the cause of action shall accrue, and it is hereby made the duty of the prosecuting attorneys to institute said suits in the name of the state, for the use and benefit of the county in which the suit is brought, and such prosecuting attorney shall receive as his compensation one-fourth of the amount recovered, and as an additional penalty, any

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foreign corporation which shall fail or refuse to file its articles of incorporation or certificate as aforesaid, cannot make any contract in this state which can be enforced by it either in law or in equity, and the complying with the provisions of this act after suit is instituted shall in...

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