217 U.S. 91 (1910), 15, International Textbook Company v. Pigg

Docket Nº:No. 15
Citation:217 U.S. 91, 30 S.Ct. 481, 54 L.Ed. 678
Party Name:International Textbook Company v. Pigg
Case Date:April 04, 1910
Court:United States Supreme Court
 
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217 U.S. 91 (1910)

30 S.Ct. 481, 54 L.Ed. 678

International Textbook Company

v.

Pigg

No. 15

United States Supreme Court

April 4, 1910

Argued April l, 1909

ERROR TO THE SUPREME COURT

OF THE STATE OF KANSAS

Syllabus

The reasonable construction of a state statute relating to foreign corporations doing business within the state does not include the doing of a single act or the making of a single contract, but does include a continuous series of acts by an agent continuously within the state. Cooper Manufacturing Company v. Ferguson, 113 U.S. 727.

A foreign corporation engaged in teaching by correspondence and which continuously has an agent in a state securing scholars and receiving and forwarding the money obtained from them is doing business in the state, and such a corporation does business in Kansas within the meaning of § 1283 of the general statutes of that 1901.

Commerce is more than traffic; it is intercourse, and the transmission of intelligence among the states cannot be obstructed or unnecessarily encumbered by state legislation. Gibbons v. Ogden, 9 Wheat. 1; Pensacola Telegraph Co. v. Western Union Telegraph Co., 96 U.S. 1.

Intercourse or communication between persons in different states through the mails and otherwise, and relating to matters of regular continuous business, such as teaching by correspondence, and the making of contracts relating to the transportation thereof, is commerce among the states within the commerce clause of the federal Constitution.

A state statute which makes it a condition precedent to a foreign corporation's engaging in a legitimate branch of interstate commerce to obtain what practically amounts to a license to transact such business is a burden and restriction upon interstate commerce and as such is unconstitutional under the commerce clause of the federal Constitution, and so held as to the requirements of § 1283, General Laws of Kansas of 1901, when applied to a foreign corporation carrying on the business of teaching persons in that state by correspondence conducted from the state in which it is organized.

Quaere how far a foreign corporation carrying on business in a state may claim equality of treatment with individuals in respect to the right to sue and defend in the courts of that state; but where a condition precedent to a foreign corporation's doing business at all in a state is unconstitutional, the further condition that it cannot

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maintain any action in the courts of the state until it has complied with such unconstitutional condition is also stricken down as being inseparable therefrom.

Where a statute is unconstitutional in part, the whole statute must be deemed invalid except as to such parts as are so disconnected with the general scope that they can be separably enforced, and so held as to the provisions in § 1283 of the General Laws of Kansas of 1901 against a foreign corporation's maintaining any action until it has complied with another provision as to filing a detailed statement which is unconstitutional as to foreign corporations engaged in interstate commerce.

76 Kan. 328 reversed.

The facts, which involve the constitutionality of 1283 of the General Statutes of Kansas of 1901, are stated in the opinion.

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HARLAN, J., lead opinion

MR. JUSTICE HARLAN delivered the opinion of the Court.

This action was brought by the International Textbook Company in one of the courts of Kansas -- the court of Topeka -- to recover from Pigg, the defendant in error, the sum of $79.60, with interest, as due the plaintiff under a written contract between him and that company, made in 1905. The case was tried upon agreed facts, and judgment was rendered in favor of the defendant for his costs. That judgment was affirmed in a state district court, which held that the plaintiff was not entitled to maintain the action, and the latter judgment was affirmed by the Supreme Court of Kansas.

It is assigned for error that the final judgment -- based upon certain provisions of the statutes of Kansas, to be presently referred to -- was in violation of the company's rights under the Constitution of the United States.

The facts agreed to, using substantially the language of the parties make substantially the following case:

The International Textbook Company is a Pennsylvania corporation, and the proprietor of what is known as the International Correspondence Schools at Scranton, in that commonwealth. Those schools have courses in architecture, chemistry, civil, mechanical, electrical, and steam engineering, English branches, French, German, mathematics and mechanics, pedagogy, plumbing, heating, telegraphy, and many other subjects. It has a capital stock, and the profits arising from its business are distributed in dividends, or applied otherwise, as the company may elect. The executive offices of the company, as well as the teachers and instructors employed by it, reside and exercise their respective functions at Scranton.

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Its business is conducted by preparing and publishing instruction papers, textbooks, and illustrative apparatus for courses of study to be pursued by means of correspondence, and the forwarding, from time to time, of such publications and apparatus to students. In the conduct of its business, the company employs local or traveling agents, called solicitor-collectors, whose duties are to procure and forward to the company at Scranton, from persons in a specified territory, on blanks furnished by it, applications for scholarships in its correspondence schools, and also to collect and forward to the company deferred payments on scholarships. In order that applicants may adapt applications to their needs, each solicitor-collector is kept informed by correspondence with the company of the fees to be collected for the various scholarships offered, and of the contract charges to be made for cash or deferred payments, as well as the terms of payment acceptable to the company. In conformity with the contract between the company and its scholars, the scholarship and instruction papers, textbooks and illustrative apparatus called for under each accepted application are sent by the company from Scranton directly to the applicant, and instruction is imparted by means of correspondence through the mails, between the company at its office in that city, and the applicant at his residence in another state.

During the period covered by the present transaction, the company had a solicitor-collector for the territory that included Topeka, Kansas, and he solicited students to take correspondence courses in the plaintiff's schools. His office in Kansas was procured and maintained at his own expense, for the purpose of furthering the procuring of applications for scholarships and the collection of fees therefor. The company had no office of its own in that state. The solicitor-collector was paid a fixed salary by the company and a commission on the number of applications obtained and the collections made. He sent daily reports to the company for his territory, those reports showing that for March, 1906, the aggregate collections

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on scholarships and deferred payments on subscriptions approached $500.

At the date of the agreement sued on, and at the time this suit was brought, numerous persons in Topeka were taking the plaintiff's course of instruction by correspondence through the mails. The contracts for those courses were procured by its solicitor-collector assigned to duty in Kansas, and, as stated, payments thereon were collected and remitted by him to the plaintiff at Scranton.

The written contract in question, signed by the defendant at Topeka, Kansas, and accepted by the company at Scranton, showed that he had subscribed for a scholarship covering a course of instruction by correspondence in commercial law, and had agreed to pay therefor $84, in installments. When this suit was brought, there remained unpaid on the principal of that subscription the sum of $79.60.

The present action was brought to recover that sum, with interest, as due the company under the defendant's contract with it. The defendant did not deny making the contract, nor that he was indebted to the company in the amount for which he was sued. But it was adjudged, in conformity with his contention, that, by reason of the company's failure to comply with certain provisions of the statutes of Kansas, it was not entitled to maintain this action in a court of Kansas.

We will now refer to the provisions of the...

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