Layden v. Endowment Rank Knights of Pythias of the World

39 S.E. 47, 128 N.C. 546, 1901 N.C. LEXIS 427
CourtSupreme Court of North Carolina
DecidedJune 7, 1901
StatusPublished
Cited by8 cases

This text of 39 S.E. 47 (Layden v. Endowment Rank Knights of Pythias of the World) is published on Counsel Stack Legal Research, covering Supreme Court of North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Layden v. Endowment Rank Knights of Pythias of the World, 39 S.E. 47, 128 N.C. 546, 1901 N.C. LEXIS 427 (N.C. 1901).

Opinion

Douglas, J.,

after stating the facts. The point directly presented to us- is- whether a corporation originally organized under’ the laws of the United States, but which has become a domestic corporation of this State, under the provisions of ch. 62 of the Public Laws of 1899, can remove a cause into the Circuit Count of tire United -States- when expressly sued as a domestic corporation. That such a corporation, originally organized under the laws of 'another State, can not do so, is settled in the recent case of Debnam v. Telephone Company, 126 N. C., 831, which is adopted as a part of this opinion. Whether the present defendant comes within the- operation of that decision, is the question before us. We think it does.

We are not prepared to- say that the United States are on a level in all respects with the States, which are considered as foreign jurisdictions. The National Government, while a distinct sovereignty, is not a foreign State, because it is composed of all the States, and is equally at home in all of them. The line of deroarkati-on between State and Federal authority does not depend upon territorial limits, but entirely upon the subject-matter of legislation or judicial construction as defined by the Constitution of the United States. This doctrine applies -to the Federal Government only in its relation to the States, as it is controlled by principles essentially dif *551 ferent when dealing with the District oí Columbia, or other territories of the United States. Congress is the Supreme law-making power of all territories, certlain-ly unresltrained by any local arrthority, and it would seem but indefinitely so even by the Redera! Constitution. In such cases it seems to us that Congress acts, not in its national capacity, but as a local Legislature, and its acts, unless otherwise clearly expressed, are confined in their binding operation to the jurisdictions for which they were originally intended. We therefore think that corporations, chartered primarily to do business in the District of Columbia, have no right, beyond that of comity, to operate in any of the States, unless expressly authorized by their charters. They therefore stand on the same footing as corporations of other States so far as the Act of 1899 is concerned. By that act the right of comity was withdrawn from them in common with ¡all other foreign corporations, and they were forbidden to exercise their corporate powers within this State, unless they became domestic corporations. It is admitted that the defendant domesticated under that act, and as we have held that the legal effect of the act "was to charter, and nob to license,” we are compelled to hold that the defendant has no right to remove the case at bar into the Federal Court.

We can find no provision in the Constitution of the United States directly authorizing the formation of corporations by the Federal Government. That it has the implied authority to do so whenever necessary and proper for carrying into effect its express powers, was finally settled by the case of McCulloch v. Maryland, 4 Wheat., 316, but it is interesting to note the limitations placed upon such authority in the opinion of -the Court. Chief Justice Marshall, speaking for the Court, says, on page 411: “The power of creating a corporation is never used for its own sake, but for the purpose of effecting something else. No sufficient reason is *552 therefore perceived, why it may not pass as incidental to those powers' which are expressly given, if it be a direct mode of executing'them.” And 'again, on page 421, alluding to the fact that the Constitution gave to Congress no express authority to create corporations, he says: “Had it been intended to grant this power (of creating corporations), as one which should be distinct 'and independent, to be exercised in any case whatever, it would have found a place among the enumerated powers of the government. But being considered merely as a means, to be employed only for the purpose of carrying into execution tlxe given powers, there could be no motive for* particularly mentioning it.”

Again, the great. Chief Justice, speaking for the Court, in Osborn v. Bank, 9 Wheat., 738„ 860, says: “The bank is not considered 'as a private corporation, whose principal object is individual trade and individual profit; hut as a public corporation, created for public and national purposes. That the mere business of banking is, in its own nature a private business, and may be carried on by individuals or comp>anies having no political connection with the government, is admitted ; but the bank is not such an individual or company. It was not created for its own salce, or for private purposes. It has never been supposed that Congress could create such a corporation. The whole opinion of the Court, in the case of McCulloch v. The State of Maryland, is founded on and sustained by, the idea that the bank is an instrument which is 'necessary and proper for carrying into effect the powers vested in the government of 'the United States.’ ”

"These questions become important in construing the opinion in Union Pa. Railway Co. v. Myers, 115 U. S., 1, wherein the Court says: “We'are of opinion that corporations of the United States, created by and organized under Acts of Congress., like the plaintiffs in error in these cases, are entitled as such to remove into the Circuit Court of the. United States *553 suits brought 'against them in the State counts, under and by virtue of 'the Adfc of March 3, 1875, on the ground that such suits are suits ‘arising under the laws of the United States.’ We do not propose to go into 'a lengthy argument on the subject; we think that the question has been substantially decided long agio by this Court. The exhaustive argument by Chief Justice Marshall in the case of Osborn v. The Bank of the U. S., 9 Wheat., 817, 828, delivered maro than sixty years ago, and always acquiesced in, renders any further discussion unneeesslary to show that a suit by or against a corporation of the United States i's a suit arising under the laws of the United States.”

The words “like 'the plaintiffs in error,” which we have italicised, taken in connection with the limitations in the cited opinion of Osborn v. Bank, would indicate that there might be other classes of corporations organized under the authority of Congress that would not have the inherent power of removal in all eases. Such, for instance, would be the corporations authorized by Congress under its special powers of legislation for territories directly under its control, and not intended to be used in any way as governmental agencies or in furtherance of Interstate Commerce. The petitioner at bar, whether viewed as a life insurance company or as a fraternal organization, is in no sense a governmental agency, and we do not think that life or fire insurance can be brought within the definition of Interstate Commerce. We think that the petitioner was incorporated by Congress to operate primarily in the District of Columbia, with only such incidental powers outside of said District 'as it might have by the law of comity. Therefore, we think that i-t comes within the principle of the decision in Oregon Short Line Railway v. Skottowe, 162 U.

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39 S.E. 47, 128 N.C. 546, 1901 N.C. LEXIS 427, Counsel Stack Legal Research, https://law.counselstack.com/opinion/layden-v-endowment-rank-knights-of-pythias-of-the-world-nc-1901.