State v. Cadigan

• Decision Date: 17 May 1901
• Citation: 50 A. 1079,73 Vt. 245
• Court: Vermont Supreme Court
• Parties: STATE v. CADIGAN.

50 A. 1079

73 Vt. 245

STATE

v. CADIGAN.

Supreme Court of Vermont. Windsor.

May 17, 1901.

Exceptions from Windsor county court; Tyler, Judge.

F. D. Cadigan was convicted of acting as agent for a foreign partnership in selling bonds, without such partnership having compiled with the state laws, and he excepts. Reversed.

Argued before TAFT, C. J., and MUNSON, START, WATSON, and STAFFORD, JJ.

Charles Tarbell, State's Atty., for the State.

Dillingham, Huse & Howland, for respondent.

STAFFORD, J. Cadigan is Informed against for acting as agent of a partnership organized under the laws of the state of New York, in selling certain municipal bonds here, without said partnership having complied with the statute of this state requiring firms organized under the laws of other states to procure a license from the inspector of finance, to file a bond with him, and to submit to his examination, before conducting such business here. The case was heard below on demurrer to the information, which was held sufficient. The decision depends upon the constitutionality of sections of chapter 175 of the Vermont Statutes, entitled "Loan and Investment Companies," which may be summarized as follows: The first section declares that every corporation organized under the laws of this state for the purpose of selling its own choses in action, or of selling, guarantying, or negotiating those of other persons or corporations, as investments or as a business, shall be under the supervision of the inspector of finance. V. S. § 4132. Then follow sections under the division title "Foreign Corporations," but in all these, when the word "corporation" is used, it is supplemented by the words "company or firm"; the phrase, in full, being, "such corporation, company or firm organized under the laws of another state." No person, it is declared, shall act in this state as agent or representative of such corporation, company, or firm, or sell, offer for sale, or negotiate choses in action owned, issued, negotiated, or guarantied by it, unless such corporation, company, or firm has filed with the inspector of finance a bond to the state for such an amount as he requires, not more than $10,000 and not less than $500, with such sureties or security as he may approve, conditioned for the making of such returns as may be required, and the payment of all taxes that may be assessed against it, and in all things to comply with the laws of this state, and has submitted itself and its financial condition to an examination by the inspector in such manner as to enable him to make a report thereof, as specified in this chapter, "in case of like corporations in this state." V. S. § 4133. The inspector is required to notify the state's attorney of violations of this chapter, and such are made punishable by a fine of not less than $50, nor more than $1,000. V. S. § 4134. When it appears to the inspector that such corporation, company, or firm is conducting its affairs in a safe and authorized manner, and has filed the required bond, he shall issue to it a license good until the 1st day of the next January; and, within 30 days of the date of its license, it shall file in his office its certificate stating the names and addresses of all who are to act as its agents in this state, which certificate shall be amended by it in case of any change. V. S. § 4135. Before it can do business here, it must make the inspector its attorney, upon whom process may be served. V. S. § 4136. It shall file semiannual reports, under penalty of having its license revoked. V. S. § 4138. If it conducts its business in an unsafe or unauthorized manner, the inspector shall direct it to desist, and to at once provide for the safety and security of all such business transactions. V. S. § 4139. If it fails to comply with such order, or to report when requested, or if it appears to the inspector that it is unsafe or inexpedient for it to continue business, he shall revoke its license. V. S. § 4140. All services and expenses under this chapter shall be approved by the state auditor, and paid by the licensees upon an equitable apportionment to be made by the inspector. V. S. § 4142.

The respondent, by demurring, admits that he did the thing prohibited by the statute, for no question is raised as to the form or sufficiency of the information, except as hereinafter stated; but he says it was no offense, because he was acting as agent for citizens of New York, who, as such, were entitled toall the privileges and Immunities of citizens of Vermont; that citizens of Vermont might lawfully do, by themselves or agent, all that he did in behalf of his principals; consequently it was lawful for him to do the same. The statute is thus challenged as in contravention of Const. U. S. art. 4, § 2: "The citizens of each state shall be entitled to all privileges and immunities of citizens in the several states." It is not claimed that the citizenship of the respondent is of any materiality, under the statute, but tha't the citizenship of his principals is material; that the statute is aimed at firms whose members are residents of other states; and that it requires of such firms what it does not require of resident firms. It will be observed that the statute itself says nothing about citizenship or residence. The test is whether the firm was "organized under the laws of another state." It is alleged that the respondent's firm was organized under the laws of New York, but its members may all be citizens of Vermont. On the other hand, if a firm is organized under the laws of Vermont, it is exempt from these requirements, even though all of its members resided in New York. So, looking at the letter only, there is no distinction between citizens of Vermont and citizens of other states. But ...