State v. The Western Union Telegraph Company.
| Citation | 75 Kan. 609,90 P. 299 |
| Decision Date | 11 May 1907 |
| Docket Number | 14,636 |
| Parties | THE STATE OF KANSAS, ex rel. C. C. Coleman, as Attorney-general, v. THE WESTERN UNION TELEGRAPH COMPANY. [*] |
| Court | United States State Supreme Court of Kansas |
Decided January, 1907.
Original proceeding in quo warranto.
Judgment rendered in favor of state.
SYLLABUS BY THE COURT.
1. FOREIGN CORPORATIONS--Conditions Imposed by the State--Police Power. The act of the legislature of 1898, commonly known as the Bush act (Laws 1898, ch. 10), requiring foreign corporations to comply with certain conditions, including the payment of charter fees computed upon the amount of their authorized capital stock, for the privilege of exercising their franchises within the state, was enacted primarily to protect the people of the state from imposition, deception, fraud and wrong arising from the abuse of corporate privileges and the mismanagement of corporate affairs, and is a measure which the state had authority to adopt under the police power which has been reserved to it.
2. FOREIGN CORPORATIONS--Charter Fee. The requirement of the law that a charter fee be paid fixes one of the conditions precedent to the granting of permission to a foreign corporation to do business within the state. It levies no tax upon property or franchises, is not an attempt to extend the taxing power of the state to subjects outside of its jurisdiction, and does not affect the character of the act as a police regulation, although it may produce some revenue.
3. FOREIGN CORPORATIONS--Conditions Imposed Apply Only to Domestic Business. The provision of the Bush act that "any corporation organized under the laws of any other state, territory or foreign country and seeking to do business in this state" (Laws 1898, ch. 10, § 2) shall perform the conditions precedent required of it before obtaining permission to do business in this state is to be interpreted in subordination to the provisions of the constitution of the United States, and as intended to apply to subjects within the lawful jurisdiction of the legislature; and so interpreted the law has no application to interstate commerce carried on by foreign corporations, or to business transacted for the federal government, and foreign corporations may engage in such commerce and transact such business in this state without observing any of the requirements of the act.
4. FOREIGN CORPORATIONS--Conditions Apply to All Corporations Doing Intrastate Business. The generally inclusive terms of the Bush act are to be interpreted with reference to the state's plenary power over its purely internal commerce, and over foreign corporations seeking to engage in such commerce; and so interpreted the law applies to all foreign corporations not engaged in interstate commerce or business for the federal government, and to all foreign corporations engaged in interstate commerce or business for the federal government to the extent that they must comply with its requirements in order to engage in non-governmental intrastate business.
5. FOREIGN CORPORATIONS--Ouster. For failure to comply with the law a foreign corporation engaged in interstate commerce and transacting business for the federal government may be ousted from the privilege of engaging in non-governmental intrastate business.
6. FOREIGN CORPORATIONS--Interstate Commerce Not Affected. The law is not obnoxious to the provision of the constitution of the United States granting to congress the exclusive power to regulate commerce between the states and with foreign nations.
7. FOREIGN CORPORATIONS--Corporations Doing Business in the State when the Statute Took Effect. It was the intention of the legislature that the law should apply to foreign corporations which were doing business in the state at the time it took effect.
8. FOREIGN CORPORATIONS--Exemption from the Operation of the Law--Vested Rights. Foreign corporations which as a matter of comity have been permitted to enter a state, or a territory which afterward becomes a state, without restriction, have no vested right to remain there unlicensed, and must secure an express exemption or exemption by implication equally clear with express words or they will be subject to all subsequent regulations which the state may see fit to adopt in the exercise of its police power.
9. TELEGRAPH COMPANIES--Foreign Corporation--Regulation by the State. Although the Western Union Telegraph Company, a corporation of New York, came into the region now included within the state's boundaries when it was yet a territory of the United States, has remained here ever since, has enjoyed the protection of general laws and the advantages of certain acts passed for the special benefit of telegraph companies, and has expended large sums of money in equipping itself to supply the need of the people of Kansas for means of telegraphic communication, it is subject to the provisions of the Bush act.
10. TELEGRAPH COMPANIES--Police Powers of the State--Limitation. Foreign telegraph companies are not only subject to the provisions of the Bush act, but the state has authority under its police power to make and enforce all local regulations of their business in the state which the public comfort, convenience and welfare render necessary, provided only such regulations do not directly impinge upon interstate commerce or governmental business.
11. TELEGRAPH COMPANIES--Doing Intrastate Business Not Compulsory. The statute of Kansas requiring telegraph companies, under a penalty, to establish and maintain stations at county seats traversed by their lines, with the usual appointments and facilities for the convenience of the public in sending telegrams, and other statutes regulating the business of the Western Union Telegraph Company in Kansas, do not compel it to continue the conduct of non-governmental intrastate business notwithstanding the Bush act, and it may freely withdraw from such business to avoid payment of the charter fee prescribed by that act.
12. TELEGRAPH COMPANIES--Effect of Authority Granted by Congress. The Western Union Telegraph Company is not relieved from the conditions of the Bush act because of its acceptance of the restrictions and obligations contained in the act of congress of July 24, 1866, granting it permission to construct and operate its lines over the public domain and navigable waters of the United States and along the military and post-roads of the United States.
13. CORPORATIONS--Local and Foreign--Equal Protection of the Law. Although the state had authority to prefer its own corporations in granting the right to exercise corporate franchises within its limits, the Bush act requires that both foreign and domestic corporations shall pay, before being authorized to do business, a charter fee computed at a fixed rate upon the amount of their authorized capital stock, irrespective of where such capital may be employed; and such requirement does not deprive foreign corporations of the equal protection of the laws, although the bulk of their capital may be invested in property outside the state.
14. TELEGRAPH COMPANIES--Ouster from Doing Local Business--Interstate Commerce. A judgment of ouster from local non-governmental business against the Western Union Telegraph Company because it has not complied with the Bush act will not constitute a regulation of interstate commerce or of government business, although the receipts at many offices from interstate and government business alone are not sufficient to keep them open.
15. TELEGRAPH COMPANIES--Due Process of Law. A judgment of ouster from local non-governmental business for failure to comply with the Bush act will not deprive the Western Union Telegraph Company of property without due process of law, although many of its offices must be closed and its poles and wires are not removable without great loss.
C. C. Coleman, attorney-general, and Fred S. Jackson, assistant attorney-general, for The State.
Rossington & Smith, and Henry D. Estabrook, for defendant; John F. Dillon, Rush Taggart, and George H. Fearons, of counsel.
The state, on the relation of the attorney-general, brings this action to oust the defendant from the exercise of the corporate franchise of receiving, transmitting and delivering intrastate telegraphic messages for pay. The defendant is a foreign corporation, and the action is predicated upon its refusal to pay the charter fee prescribed by section 6 of chapter 10 of the Laws of 1898, section I of chapter 125 of the Laws of 1901 (Gen. Stat. 1901, § 1264), which payment is made a condition precedent to the granting of authority to do business within this state. The defense is that the law referred to, commonly known as the Bush act, was not intended to apply to the defendant or the portion of its business affected by this suit; but, if such were the intention of the legislature, the statute invades rights secured to the defendant by the constitution of the United States and by paramount laws enacted in pursuance thereof.
The cause is submitted upon a demurrer to the defendant's answer. From the admissions and affirmative allegations contained in the answer it appears that the defendant is a corporation with a capital stock of $ 100,000,000, organized and existing under and by virtue of the laws of the state of New York for the purpose of transacting a general telegraph business. It receives and transmits messages and communications by means of the electric telegraph over and upon wires connecting various points within the state of Kansas, and connecting points in the state of Kansas with points in other states of the United States, in the territories of the United States and in foreign countries. It has agents and stations in more than eight hundred cities in Kansas and...
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