U.S. Supreme Court
Hammond Packing Co. v. Arkansas, 212 U.S. 322 (1909)
Hammond Packing Company v. Arkansas
Argued February 24, 25, 1908
Decided February 23, 1909
212 U.S. 322
The right of a state to prevent foreign corporations from continuing to do business within its borders is the correlative of its right to exclude them therefrom, and, as this power is plenary, the state, so long as no contract is impaired, may exert it from consideration of acts done in another jurisdiction.
If the power exists to revoke a permit, the question of motive is immaterial for the purpose of determining the constitutionality of the legislative action exerting the power.
The difference between the extent of the power which the state may exert over the doing of business within its borders by an individual and that which it can exercise as to corporations furnishes a distinction authorizing a classification between the two which does not violate the equal protection clause of the Fourteenth Amendment.
Where, as in this case, penal provisions as to individuals are separable, and the state court has so construed the statute, any lack of constitutional authority to enact the statute as to individuals would not render the statute unconstitutional as to corporations.
The chartered right of a corporation to do business does not operate to deprive the state of its police power, and the franchise to do business is qualified by the duty to do so conformably to lawful and proper police regulations thereafter enacted.
The claim of an irrepealable contract cannot be predicated upon a contract which is repealable, and where the reserved power to repeal, alter and amend charters is only to be exercised without injustice, it is within the province of the state court to determine whether it has been so exercised, and its decision cannot be reviewed by this Court unless a contract has been impaired or some other and fundamental right within the protection of the federal Constitution has been denied.
Where the state court has decided that the penal provisions of a statute relate to both domestic and foreign corporations, a foreign corporation cannot claim that the contract between it and the state admitting it, on payment of the franchise tax, to do business on the same chanroblesvirtualawlibrary
terms as a domestic corporation has been impaired by the revocation of its permit for violation of such statute. Am. Smelting Co. v. Colorado, 204 U. S. 403, distinguished.
A state statute requiring corporations to produce books and papers which has been construed by the highest court of the state to the effect that its requirements are satisfied by a bona fide effort to comply with its provisions or a reasonable showing of inability to comply therewith is not an arbitrary and unjust exercise of authority repugnant to the due process clause of the Fourteenth Amendment, and so held as to such provisions in the Arkansas Anti-Trust Law.
Relief cannot be afforded by this Court to one who violates the provisions of a state statute from an erroneous conception of what the statute requires.
Under the visitorial powers of a state over corporations doing business within it borders, it is competent for it to compel such corporations to produce their books and papers for investigation and to require the testimony of their officers and employees to ascertain whether its laws have been complied with, and this power extends to the production of books and papers kept outside of the state, and a statute requiring such production does not amount to an unreasonable search or seizure or a denial of due process of law. Consolidated Rendering Co. v. Vermont, 207 U. S. 541.
Quaere, and not decided, whether the due process clause of the Fourteenth Amendment embraces in its general terms a prohibition of unreasonable searches or seizures.
An order made pursuant to statute in a suit for penalties for violations of a state antitrust law requiring a corporation to produce books and papers does not deny due process of law because thereunder the state may elicit proof not only as to the liability of the corporation, but also proof in its possession relevant to its defense. Consolidated Rendering Co. v. Vermont, 207 U. S. 541; Hale v. Henkel, 201 U. S. 43.
If a state statute requiring the production of papers is constitutional, the motive of the state for acting thereunder is immaterial.
Statutory regulations dealing exclusively with persons or property not within the borders of the state, if otherwise valid, are not unconstitutional as denying equal protection of the law. Central Loan & Trust Co. v. Campbell, 173 U. S. 84.
The wider scope of the power of the state over corporations than over individuals affords a basis for separate classification as to the production of books and papers.
A state statute requiring corporations to produce, and creating a presumption of fact as to bad faith and untruth of a defense by reason chanroblesvirtualawlibrary
of suppression of material evidence, doe not deny due process of law; nor does an order of the court based on such a statute striking out the answer of a defendant corporation which has refused to produce material evidence deny due process and condemn him unheard. Hovey v. Elliott, 167 U. S. 409, in which the order striking the answer from the files was in the nature of a punishment for contempt, distinguished.
81 Ark. 519 affirmed.
The facts, which involve the constitutionality of certain provisions of the antitrust statute of the Arkansas and the validity of proceedings in the courts of the state thereunder, are stated in the opinion. chanroblesvirtualawlibrary