La Crosse & M. Railroad Co. 102 U. S. 148, statute requiring every foreign corporation 161 [26: 106, 111]),-not simply of stock-named in it, as a condition of obtaining a liholders and creditors residing in a particular cense or permit to transact business in that state, but all stockholders and creditors of state, to stipulate that it would not remove whatever state they may be citizens. In into the Federal courts suits that were reWabash, St. L. & P. Railway Co. v. Ham, movable from the state courts under the laws 114 U. S. 587, 594 [29: 235, 238], it was said of the United States, was void because it made that the property of a corporation was a the right to do business under a license or trust fund for the payment of its debts, in permit dependent upon the surrender by the the sense that when the corporation was law-corporation of a privilege secured to it by the fully dissolved and all its business wound up, Constitution. This principle was recogor when it was insolvent, all its creditors nized in Barrow Steamship Co. v. Kane, 170 were entitled in equity to have their debts U. S. 100, 111 [42: 964, 968], in which, after paid out of the corporate property before referring to the constitutional and statutory any distribution thereof among the stock provisions defining the jurisdiction of the holders. In Hollins v. Brierfield Coal & Iron circuit courts of the United States, this Co. 150 U. S. 371, 385 [37: 1113, 1117], court said: "The jurisdiction so conferred it was observed that a private corporation, upon the national courts cannot be abridged when it becomes insolvent, holds its assets or impaired by any statute of a state. Hyde subject to somewhat the same kind of equi- v. Stone, 20 How. 170, 175 [15: 874, 876]; table lien and trust in favor of its creditors Smyth v. Ames, 169 U. S. 466, 516 [42: 819, that exist in favor of the creditors of a part-838]. It has therefore been decided that a nership after becoming insolvent, and that statute which requires all actions against a in such case a lien and trust will be enforced county to be brought in a county court does by a court of equity in favor of creditors. not prevent the circuit court of the United These principles obtain, no doubt, in Ten-States from taking jurisdiction of such an nessee, and will be applied by its courts in action; Chief Justice Chase saying that 'no all appropriate cases between citizens of that statute limitation of suability can defeat a state, without making any distinction be- jurisdiction given by the Constitution.' tween them. Yet the courts of that state Cowles v. Mercer County, 7 Wall, 118, 122[256] are forbidden, by the statute in question, to [19: 86, 88]; Lincoln County v. Luning, 133 recognize the right in equity of citizens re- U. S. 529 [33: 766]; Chicot County v. Shersiding in other states to participate upon wood, 148 U. S. 529 [37: 546]. So statutes terms of equality with citizens of Tennessee requiring foreign corporations, as a condiin the distribution of the assets of an in-tion of being permitted to do business within solvent foreign corporation lawfully doing business in that state. We hold such discrimination against citizens of other states to be repugnant to the second section of the fourth article of the Constitution of the United States, although, generally speaking, the state has the power to prescribe the conditions upon which foreign corporations may enter its territory for purposes of business. Such a power cannot be exerted with the effect of defeating or [255]impairing rights secured to citizens of the several states by the supreme law of the land. Indeed, all the powers possessed by a state must be exercised consistently with the priv. ileges and immunities granted or protected by the Constitution of the United States. the state, to stipulate not to remove into the courts of the United States suits brought against them in the courts of the state, have been adjudged to be unconstitutional and void. Home Ins. Co. v. Morse, 20 Wall, 445 [22: 365]; Barron v. Burnside, 121 U. S. 186 [30: 915, 1 Inters. Com. Rep. 295]; Southern Pacific Co. v. Denton, 146 U. S. 202 [3C943]." See Ducat v. Chicago, 10 Wall. 410, 415 [19: 972, 973]. We must not be understood as saying tha a citizen of one state is entitled to enjoy in another state every privilege that may be given in the latter to its own citizens. There are privileges that may be accorded by a state to its own people in which citizens of other states may not participate except in In Lafayette Ins. Co. v. French, 18 How. conformity to such reasonable regulations 404, 407 [15: 451, 453], Mr. Justice Curtis, as may be established by the state. For inspeaking for this court, said: "A corpora-stance, a state cannot forbid citizens of other tion created by Indiana can transact business in Ohio only with the consent, express or implied, of the latter state. This consent may be accompanied by such conditions as Ohio may think fit to impose; and these conditions must be deemed valid and effectual by other states and by this court, provided they are not repugnant to the Constitution and laws of the United States, or inconsistent with those rules of public law which secure the jurisdiction and authority of each state from encroachment by all others, or that principle of natural justice which forbids condemnation without opportunity for defense." It was accordingly adjudged in Barron v. Burnside, 121 U. S. 186, 200 [30: 915, 920, 1 Inters. Com. Rep. 295], that an Iowa' states from suing in its courts, that right being enjoyed by its own people; but it may require a nonresident, although a citizen of another state, to give bond for costs, 81though such bond be not required of a resident. Such a regulation of the internal affairs of a state cannot reasonably be characterized as hostile to the fundamental rights of citizens of other states. So, a state may, by rule uniform in its operation as to citizens of the several states, require residence within its limits for a given time before a citizen of another state who becomes a resident thereof shall exercise the right of suffrage or become eligible to office. It has never been supposed that regulations of that character materially interfered with the en joyment by citizens of each state of the privileges and immunities secured by the Constitution to citizens of the several states. The Constitution forbids only such legislation affecting citizens of the respective states as will substantially or practically put a citizen of one state in a condition of alíenage when he is within or when he removes to another state, or when asserting in another state the rights that commonly appertain to those who are part of the political community known as the people of the United [257]States, by and for whom the government of the Union was ordained and established. Nor must we be understood as saying that a state may not, by its courts, retain within its limits the assets of a foreign corporation, in order that justice may be done to its own citizens; nor, by appropriate action of its judicial tribunals, see to it that its own citizens are not unjustly discriminated against by reason of the administration in other states of the assets there of an insolvent corporation doing business within its limits. For instance, if the Embreeville Company had property in Virginia at the time of its insolvency, the Tennessee court administer ing its assets in that state could take into account what a Virginia creditor, seeking to participate in the distribution of the company's assets in Tennessee, had received or would receive from the company's assets in Virginia, and make such order touching the assets of the company in Tennessee as would protect Tennessee creditors against wrongful discrimination arising from the particular action taken in Virginia for the benefit of creditors residing in that commonwealth. It may be appropriate to observe that the objections to the statute of Tennessee do not necessarily embrace enactments that are found in some of the states requiring foreign insurance corporations, as a condition of their coming into the state for purposes of business, to deposit with the state treasurer funds sufficient to secure policy holders in its midst. Legislation of that character does not present any question of discrimination against citizens forbidden by the Constitution. Insurance funds set apart in advance for the benefit of home policy holders of a foreign insurance company doing business in the state are a trust fund of a specific kind to be administered for the exclusive benefit of certain persons. Policy holders in other states know that those particular funds are segregated from the mass of property owned by the company, and that they cannot look to them to the prejudice of those for whose special benefit they were deposited. The present case is not one of that kind. The statute of Tennessee did not make it a condition [258] of the right of the British corporation to come into Tennessee for purposes of business that it should, at the outset, deposit with the state a fixed amount to stand exclusively or primarily for the protection of its Tennessee creditors. It allowed that corporation, after complying with the terms of the statute, to conduct its business in Tennessee as it saw fit, and did not attempt to impose any restriction upon its making contracts with or incurring liabilities to citizens of other states. It permitted that corporation to contract with citizens of other states, and then, in effect, provided that all such contracts should be subject to the condition (in case the corporation became insolvent) that creditors residing in other states should stand aside, in the distribution by the Tennessee courts of the assets of the corporation, until creditors residing in Tennessee were fully paid-not out of any funds or property specifically set aside as a trust fund, and at the outset put into the custody of the state, for the exclusive benefit, or for the benefit primarily, of Tennessee creditors, but-out of whatever assets of any kind the corporation might have in that state when insolvency occurred. In other words, so far as Tennessee legislation is concerned, while this corporation could lawfully have contracted with citizens of other states, those citizens cannot share in its general assets upon terms of equality with citizens of that state. If such legislation does not deny to citizens of other states, in respect of matters growing out of the ordinary transactions of business, privileges that are accorded to it by citizens of Tennessee, it is difficult to perceive what legislation would effect that result. We adjudge that when the general property and assets of a private corporation lawfully doing business in a state are in course of adminstration by the courts of such state, creditors who are citizens of oth er states are entitled, under the Constitution of the United States, to stand upon the same plane with creditors of like class who are citizens of such state, and cannot be denied equality of right simply because they do not reside in that state, but are citizens residing in other states of the Union. The individual plaintiffs in error were entitled to contract with this British corporation, lawfully doing business in Tennessee, and deemed and taken to be a corporation of that state; and[259] no rule in the distribution of its assets among cerditors could be applied to them as resident citizens of Ohio, and because they were not residents of Tennessee, that was not applied by the courts of Tennessee to creditors of like character who were citizens of Tennessee. As to the plaintiff in error, the Hull Coal & Coke Company of Virginia, different considerations must govern our decision. It has long been settled that, for purposes of suit by or against it in the courts of the United States, the members of a corporation are to be conclusively presumed to be citizens of the state creating such corporation (Louisville, Cincinnati & Charleston Railroad Co. v. Letson, 2 How. 497 [11: 353]; Covington Drawbridge Co. v. Shepard, etc., 20 How. 227, 232 [15: 896, 898]; Ohio & Mississippi R. R. Co. v. Wheeler, 1 Black, 286, 296 [17: 130, 133]; National Steamship Co. v. Tugman, 106 U. S. 118, 120 [27: 87, 88]; Barrow Steamship Co. v. Kane, above cited); and therefore it has been said that a corporation is to be deemed, for such purposes, a citizen of the state under whose laws it was organized. But it is equally well settled, and we now hold, that a corporation is not a citizen within the meaning of the constitutional provision that "the citizens of each state shall be entitled to all privileges and immunities of citizens in the several states." Paul v. Virginia, 8 Wall. 168, 178, 179 [19: 357, 359, 360]; Ducat v. Chicago, 10 Wall. 410, 415 [19: 972, 973]; Liverpool Ins. Co. v. Massachusetts, 10 Wall. 566, 573 [19: 1029, 1031]. The Virginia corporation, therefore, cannot invoke that provision for protection against the decree of the state court denying its right to participate upon terms of equality with Tennessee creditors in the distribution of the assets of the British corporation in the hands of the Tennessee court. Since, however, a corporation is a "person" within the meaning of the Fourteenth Amendment (Santa Clara County v. Southern Pacific Railroad Co. 118 U. S. 394, 396 [30: 118]; Smyth v. Ames, 169 U. S. 466, 522 [42: 819, 840]), may not the Virginia corporation invoke for its protection, the clause of the Amendment declaring that no state shall deprive any person of property without due process, nor deny to any person within its jurisdiction the equal protection of the laws? poration cannot rely upon the clause declaring that no state shall "deny to any person within its jurisdiction the equal protection of the laws." That prohibition manifestly relates only to the denial by the state of equal protection to persons "within its jurisdiction." Observe that the prohibition against the deprivation of property without due process of law is not qualified by the words "within its jurisdiction," while those words are found in the succeeding clause relating to the equal protection of the laws. The court cannot assume that those words were inserted without any object, nor is it[261] at liberty to eliminate them from the Constitution and to interpret the clause in question as if they were not to be found in that instrument. Without attempting to state what is the full import of the words, "within its jurisdiction,” it is safe to say that a corporation not created by Tennessee, nor doing business there under conditions that subjected it to process issuing from the courts of Tennessee at the instance of suitors, is not, under the above clause of the Fourteenth Amendment, within the jurisdiction of that state. Certainly, when the statute in question was enacted the Virginia corporation was not within the jurisdiction of Tennessee. So far as the record discloses, its claim We are of opinion that this question must against the Embreeville Company was on acJreceive a negative answer. Although this count of coke sold and shipped from Virginia court has adjudged that the prohibitions of to the latter corporation at its place of busithe Fourteenth Amendment refer to all the ness in Tennessee. It does not appear to instrumentalities of the state, to its legisla- have been doing business in Tennessee under tive, executive, and judicial authorities (Ex the statute here involved, or under any statparte Virginia, 100 U. S. 339, 346, 347 [25: ute that would bring it directly under the 676, 678, 679]; Yick Wo. v. Hopkins, 118 U. jurisdiction of the courts of Tennessee by S. 356, 373 [30: 220, 227]; Scott v. McNeal, service of process on its officers or agents. 154 U. S. 34, 45 [38: 896, 901]; and Chicago, Nor do we think it came within the jurisdicBurlington & Q. R'd Co. v. Chicago, 166 U. tion of Tennessee, within the meaning of the S. 226, 233 [41: 979, 983]), it does not fol- Amendment, simply by presenting its claim low that within the meaning of that Amend- in the state court and thereby becoming a ment the judgment below deprived the Vir- party to this cause. Under any other interginia corporation of property without due pretation the Fourteenth Amendment would process of law, simply because its claim was be given a scope not contemplated by its subordinated to the claims of the Tennessee framers or by the people, nor justified by its creditors. That corporation was not, in any language. We adjudge that the statute, so legal sense, deprived of its claim, nor was its far as it subordinates the claims of private right to reach the assets of the British cor- business corporations not within the jurisporation in other states or countries dis- diction of the state of Tennessee (although puted. It was only denied the right to par- such private corporations may be creditors ticipate upon terms of equality with Tennes- of a corporation doing business in the state see creditors in the distribution of particu- under the authority of that statute), to the lar assets of another corporation doing busi- claims against the latter corporation of credness in that state. It had notice of the pro-itors residing in Tennessee, is not a denial of ceedings in the state court, became a party to those proceedings, and the rights asserted by it were adjudicated. If the Virginia corporation cannot invoke the protection of the second section of article IV. of the Constitution of the United States relating to the privileges and immunities of citizens in the several states, as its coplaintiffs in error have done, it is because it is not a citizen within the meaning of that section; and if the state court erred in its decree in reference to that corporaton, the latter cannot be said to have been thereby deprived of its property without due process of law within the meaning of the Constitution. It is equally clear that the Virginia cor the "equal protection of the laws" secured What may be the effect of the judgment *The final judgment of the Supreme Court[262] of Tennessee must be affirmed as to the Hull Coal & Coke Company, because it did not deny to that corporation any right, privilege, or immunity secured to it by the Constitution of the United States. (Rev. Stat. § 709.) As to the other plaintiffs in error, | simply between citizens of the same state. ion. [262] *Mr. Justice Brewer, with whom the Chief Justice concurred, dissenting: It is not necessary in this court to refer to the difference between residence and citizenship. Neither is synonymous with the other and neither includes the other. A British subject or a citizen of Ohio may be a resident of Tennessee, and entitled to the benefit of this statute. A citizen of Tennessee may, like these plaintiffs in error, be resident of and doing business in Ohio and not entitled to its benefit. It will be time enough to consider the question discussed in the opinion when it appears that a state has attempted to discriminate between its own citizens and citizens of other states, and the courts of the state have affirmed the validity of such discrimination. I am unable to concur in the opinion of the court in this case. In ny judgment it misconceives the language of the statute, the issues presented by the pleadings, and the decision of the state court. The act does not discriminate between citizens of Tennessee and those of other states. Its language is creditors "residents of this state shall have a priority over all simple contract creditors being residents of any other country or countries." The allegation of the amended bill is, "your orators are all residents of the state of Tennessee, and were such at the time the various debts sued on in this cause were created," and that by virtue of the statute they are entitled to priority over the "defendant, Rogers, Brown, & Co., and all other creditors of said insolvent corporation who do not reside in the state of Tennessee, or did not so reside at the time their credits were given." The intervening petition of the plaintiffs in error, Blake and Rogers, Brown, & Co., alleges "that they are residents of the state of Ohio, and were at the times and dates hereinafter named engaged in business in said state, their residences, offices, and places of business being at the city of Cincinnati." The decree of the court of chancery appeals adjudges "that all of the creditors of said company who re-enter, the state may impose such conditions sided in the state of Tennessee are entitled to as it sees fit, is, as a general proposition, priority of payment out of all of the assets of also admitted. In Crutcher v. Kentucky, the company of every kind over all of the 141 U. S. 47, 59, [35: 649, 653], it was said: creditors of said company who do not reside "The insurance business, for example, canin the state of Tennessee." And the decree not be carried on in a state by a foreign corof the supreme court of the state is in sub-poration without complying with all the con[263]stantially the same language,_adjudging "that all of the creditors of the Embreeville Freehold Land, Iron, & Railway Company, Limited, who resided in the state of Tennessee, are entitled to priority of payment out of all of the assets of said company, both real and personal, over all of the other creditors of said company who do not reside in the state of Tennessee, whether they be residents of other states of the United States or of the Kingdom of Great Britain." So that neither the statute, the pleadings, nor the decree raise any question of citizenship, or give any priority of right to citizens of Tennessee over citizens of other states, but only discriminate between residents, and give residents of the state a priority. I think it improper to go outside of a case to find a question which is not in the record simply because it may be discussed by counsel for one party, who apparently decline to recognize any difference between residence and citizenship. For all this record discloses, the plaintiffs in error other than the corporation may have been citizens of the state of Tennessee, temporarily residing and doing business in Ohio, and the controversy one Taking the statute as it reads, and assuming that the legislature of Tennessee meant that which it said, the question is whether a state, permitting a foreign corporation which is not engaged in interstate commerce to come into its territory and there do business, has the power to protect all persons residing within its limits who may have dealings with such foreign corporation, by requiring it to give them a prior security on its assets within the state. The principle[2644 underlying this statute is that a state, which can have no jurisdiction beyond its territorial limits, has the power in reference to foreign corporations permitted to do business therein to protect all persons within those limits, whether citizens or not, in respect to claims upon the property thereof also within those limits. That a state may keep such a corporation out of its territory is conceded; and that, in permitting it to ditions imposed by the legislation of that state. So with regard to manufacturing corporations, and all other corporations whose business is of a local and domestic nature, which would include express companies whose business is confined to points and places wholly within the state. The cases to this effect are numerous. Bank of Augusta v. Earle, 13 Pet. 519 [10: 274]; Paul v. Virginia, 8 Wall. 168 [19: 357]; Liverpool & L. L. & F. Insurance Company v. Massachusetts, 10 Wall. 566 [19: 1029]; Cooper Manufacturing Company v. Ferguson, 113 U. S. 727 [28: 1137]; Philadelphia Fire Association v. New York, 119 U. S. 110 [30: 342]." Everyone dealing with a foreign corporation is bound to take notice of the statutes of the state imposing conditions upon that corporation in respect to the transaction of its business within the state, just as he must take notice of any mortgage or other encumbrance placed by the corporation upon its property there situated. A state may, and often does, provide that persons furnishing supplies to and doing work for a corporation shall have a lien upon the property of that foreign corporations to secure home creditors, there are frequent illustrations of discrimination based upon the matter of resi dence. Often nonresident plaintiffs are required to give security for costs when none is demanded of resident suitors. Attachments will lie in the beginning of an action, authorizing the seizure of property upon the ground that the defendant is a nonresident, when no such seizure is permitted in case of resident defendants. These and many similar illustrations, which might be suggested, only disclose that it has been accepted as a general truth that a state may discrim inate on the ground of residence, and that such discrimination is not to be condemned as one between citizens; and yet, if the doctrine of the opinion of the court in this case be correct, I cannot see how those statutes can be sustained, for surely they discriminate between nonresident and resident suitors in the matter of fundamental rights, to wit, the right of equal entrance into the courts and equal security in the possession of property. corporation prior to any mortgage. The validity of such legislation has always been sustained, and they who loan their money to the corporation do so with notice of the limitation, and have no constitutional right of complaint if their mortgage is thereafter postponed to simple-contract obligations. If voluntarily the corporation placed a mortgage upon all its assets within the state to secure a debt to a single creditor residing within [265]*the state, and such mortgage was duly recorded, no one would have the hardihood to say that a resident or citizen of another state could challenge its validity or its priority over his unsecured debt simply because he was a citizen of another state, or did not, in fact, know of its existence. And that which is true in case of a mortgage to a single creditor would be equally true in case such foreign corporation placed a mortgage upon its assets to secure every creditor within the state. The number of creditors secured does not change the validity of the security or affect the matter of notice or relieve the foreign creditor from the consequences of notice. If the corporation may vountarily place a mortgage upon all its assets within the state to secure its creditors within the state, why may not the legislature require as a condition of its doing business that it give such a mortgage? Is the corporation more power-thingsful than the state? Is a voluntarily exe- "Sec. 260. Foreign corporations shall, becuted mortgage more valid than a statute? fore they are authorized or permitted to do If, in fact, in pursuance of such a statute a any business in this state, make and file a mortgage to each separate creditor was given certificate signed by the president and secand recorded as fast as the corporation came retary of such corporation, duly acknowlunder obligation to him, could a nonresident edged, with the secretary of state, creditor question the validity of the mort- and no corporation doing business in gage or the priority given thereby? And the state, incorporated under the laws of is the effect of the statute in controversy any other state, shall be permitted to anything other than the imposition upon the mortgage, pledge, or otherwise encumber assets of the corporation within the state of its real or personal property situated in this a single mortgage in favor of home creditors? state, to the injury or exclusion of any citIf written out and recorded, who could ques-izen, citizens, or corporations of this state tion its validity or its priority? The statute in its spirit and effect does nothing more. That it is prospective in its operation is immaterial-statutes generally are. The validity of an after-acquired property clause in a mortgage has become settled; none the less valid is it in a statute. It may not be uninteresting to notice the case of Fritts v. Palmer, 132 U. S. 282 [33: 317]. That case came from Colorado. The statutes of that state, as quoted in the opinion of the court, provided, among other who are creditors of such foreign corpora-[267] tion, and no mortgage by any foreign corporation, except railroad and telegraph companies, given to secure any debt created in any other state, shall take effect as against any citizen or corporation of this state until all its liabilities due to any person or corporation in this state at the time of recording such mortgage have been paid and extinguished." Commenting upon this section, and others, this court said (p. 288): It is conceded in the opinion of the court that a foreign insurance corporation might be required to make a special deposit with the state treasurer to secure local policy holders, but if it is within the constitutional power of the state to require such special deposit, and when made it becomes in fact a security to the home policy holders, I am unable to appreciate why the state may not require a general mortgage on all the assets within the state as like security. Looking [266]at it simply as a question of power on the part of the state. what difference can there be between a pledge of a special fund and a mortgage of the entire fund within the state? And that which is true in respect to an insurance corporation must also be true of any other corporation not engaged in in-court.'" terstate commerce business. Indeed, aside from the demand made by the statutes of certain states of deposits by In "No question is made in this case-Indeed, there can be no doubt-as to the validity of these constitutional and statutory provisions, so far, at least, as they do not directly affect foreign or interstate commerce. Cooper Manufacturing Co. v. Ferguson, 113 U. S. 727, 732 [28: 1137, 1138], this court said that 'the right of the people of a state to prescribe generally by its Constitution and laws the terms upon which a foreign corporation shall be allowed to carry on its business in the state, has been settled by this It will be perceived that the statute of Colorado restrained a foreign corporation from mortgaging, pledging, or otherwise encum |
