Western Union Telegraph Company v. State of Kansas On the Relation of Coleman

CourtUnited States Supreme Court
Citation216 U.S. 1,30 S.Ct. 190,54 L.Ed. 355
Docket NumberNo. 4,4
Decision Date17 January 1910

[Syllabus from pages 1-3 intentionally omitted] This action was brought by the state of Kansas in one of its courts against the Western Union Telegraph Company, a New York corporation, to obtain a decree ousting and restraining that corporation from doing, in Kansas, any telegraphic business that was wholly internal to that state, and not pursuant to some arrangement, or to meet its contracts with, or obligations to, the government of the United States. Upon the petition of the telegraph company the case was removed to the circuit court of the United States for the district of Kansas. But it was thereafter remanded to the state court, where, upon a demurrer to the answer, a final decree was rendered, prohibiting and enjoining the telegraph company from transacting intrastate business in Kansas as a corporation, the decree, however, not to affect the company's duties to or contracts with the United States. From that decree the present writ of error was prosecuted.

The state contends that the decree is in exact conformity with certain provisions of the Kansas statutes to be found in the General Statutes of that state of 1901, title, 'Corporations,' p. 280, and the General Statutes of 1905, p. 284. Those provisions, or the ones directly involved here, originated in an act known as the Bush act, passed at a special session of the legislature in 1898. Laws of Kansas, Special Session, p. 27.

The issues raised by the pleadings arise out of the above statutes. Under those statutes, a state charter board was organized and its powers defined. That board was authorized to receive applications from corporations of other states, territories, or countries seeking permission to engage in business as foreign corporations in Kansas. Any such corporation was required in its application to set forth a certified copy of its charter or articles of incorporation, the place where its principal office or place of business was to be located, the full nature and character of the business in which it proposed to engage, the names and addresses of its officers, trustees, or directors and stockholders, with a detailed statement of its assets and liabilities, and such other information as the board might require in order to determine the solvency of the corporation. The statute further provided that the application should be accompanied by a fee of $25, to be known as an application fee, and that it should be a condition precedent to obtaining authority to transact business in the state that the corporation should file in the office of the secretary of state its written consent, irrevocable, that actions might be brought against it in the proper court of any county in the state (in which the cause of action arose, or in which the plaintiff resided), by service of process on the secretary of state, and stipulating that such service should be valid and binding as if due service had been made upon the president or chief officer of the corporation. Every foreign corporation then doing business in the state was required, within thirty days from the taking effect of the act, to file with the secretary of state the specified written consent. Kan. Gen. Stat. 1901, § 1261. If the charter board determined that the foreign company seeking to do business in the state was organized in accordance with the laws under which it was created, that its capital was unimpaired, and that it was organized for a purpose for which a domestic corporation might be organized in Kansas, then the board was directed to grant the application, and by its secretary issue a certificate, setting forth the granting of the application to engage in business in the state, as provided in the statute Id. § 1262.

Then come these important sections: 'Each corporation which has received authority from the charteer board to organize shall, before filing its charter with the secretary of state, as provided by law, pay to the state treasurer of Kansas, for the benefit of the permanent school fund, a charter fee of 1/10 of 1 per cent of its authorized capital, upon the first $100,000 of its capital stock, or any part thereof; and upon the next $400,000, or any part thereof, 1/20 of 1 per cent; and for each million or major part thereof over and above the sum of $500,000, $200. . . . In addition to the charter fee herein provided, the secretary of state shall collect a fee of $2.50 for filing and recording each charter containing not to exceed ten folios, and an additional fee of 25 cents for each folio in excess of ten contained in any charter. The fee for filing and recording a charter shall also entitle the corporation to a certified copy of its charter. All the provisions of this act, including the payment of the fees herein provided, shall apply to foreign corporations seeking to do business in this state, except that, in lieu of their charter, they shall file with the secretary of state a certified copy of their charter, executed by the proper officer of the state, territory, or foreign country under whose laws they are incorporated; and any corporation applying for a renewal of its charter shall comply with all the provisions of this act in like manner, and to the same extent, as is herein provided for the chartering and organizing of new corporations.' 'Any corporation organized under the laws of another state, territory, or foreign country, and authorized to do business in this state, shall be subject to the same provisions, judicial control, restrictions, and penalties, except as herein provided, as corporations organized under the laws of this state.' Id. §§ 1264, 1267.

By another section it is made the duty of each corporation doing business for profit in Kansas, except banking, insurance, and railroad corporations, annually, on or before August 1st, 'to prepare and deliver to the secretary of state a complete detailed statement of the condition of such corporation on the 30th day of June next preceding. Such statement shall set forth and exhibit the following, namely: 1st. The authorized capital stock. 2d. The paid-up capital stock. 3d. The par value and the market value per share of said stock. 4th. A complete and detailed statement of the assets and liabilities of the corporation. 5th. A full and complete list of the stockholders, with the postoffice address of each, and the number of shares held and paid for by each. 6th. The names and postoffice addresses of the officers, trustees, or directors and mana- ger elected for the ensuing year, together with a certificate of the time and manner in which such election was held. . . . And such failure to file such statement by any corporation doing business in this state, and not organized under the laws of this state, shall work a forfeiture of its right or authority to do business in this state, and the charter board may, at any time, declare such forfeiture, and shall forthwith publish such declaration in the official state paper. . . . No action shall be maintained or recovery had in any of the courts of this state by any corporation doing business in this state without first obtaining the certificate of the secretary of state that statements provided for in this section have been properly made.' § 1283.

Under this statute, the Western Union Telegraph Company made application to the charter board for permission to engage in business in Kansas as a foreign corporation, stating that the amount of its capital stock, fully paid up in cash, was $100,000,000. With that application the company deposited with the secretary of state the specified fee of $25, and also its written consent, irrevocable, in the prescribed form, as to suits brought against it, in the courts of the state, by service of process on that officer. In reference to that consent, the company, in its answer, said: 'It made such written submission to service and paid such application fee voluntarily, and ex gratia, and out of a desire to avoid the appearance of not complying with the reasonable regulations of the state of Kansas, made with reference to its own corporations; but denies that said payment and that said written submission were obligatory upon it, or were necessary or essential as a condition precedent to its continuing to transact business within the state of Kansas, both state and interstate.'

The charter board granted the application of the telegraph company, but its order to that effect, made April 5th, 1905, recited that the application be granted and the applicant au- thorized and empowered to transact the business of receiving and transmitting messages by telegraph within the state of Kansas, and transacting within the said state its business of a telegraph company, provided that the order should not take effect and no certificate of authority should issue or be delivered to the company 'until such applicant shall have paid to the state treasurer of Kansas, for the benefit of the permanent school fund, the sum of twenty thousand one hundred dollars ($20,100), being the charter fee provided by law necessary to be paid by a foreign corporation having a capital of $100,000,000. It is further understood, ordered, and provided that nothing herein contained shall apply to nor be construed as restricting in any wise the transaction by the said applicant of its interstate business nor its business for the Federal government; but that this grant of authority and requirement as to payment relate only to the business transacted wholly within the state of Kansas. The above fee of $20,100 was the specified per cent of the authorized capital of the company which the statute required it to pay before doing or continuing to do any local business in Kansas.

The company refused to pay the fee thus required, and continued, as before, to do...

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