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217 U.S.

Syllabus.

INTERNATIONAL TEXTBOOK COMPANY v. PIGG.

ERROR TO THE SUPREME COURT OF THE STATE OF KANSAS.

No. 15. Argued April 21, 1909.—Decided April 4, 1910.

The reasonable construction of a state statute relating to foreign corporations doing business within the State does not include the doing of a single act or the making of a single contract, but does include a continuous series of acts by an agent continuously within the State. Cooper Manufacturing Company v. Ferguson, 113 U. S. 727. A foreign corporation engaged in teaching by correspondence and which continuously has an agent in a State securing scholars and receiving and forwarding the money obtained from them, is doing business in the State; and such a corporation does business in Kansas within the meaning of § 1283 of the general statutes of that State of 1901. Commerce is more than traffic; it is intercourse, and the transmission of intelligence among the States cannot be obstructed or unnecessarily encumbered by state legislation. Gibbons v. Ogden, 9 Wheat. 1; Pensacola Telegraph Co. v. Western Union Telegraph Co., 96 U. S. 1. Intercourse or communication between persons in different States through the mails and otherwise, and relating to matters of regular continuous business, such as teaching by correspondence, and the making of contracts relating to the transportation thereof, is commerce among the States within the commerce clause of the Federal Constitution.

A state statute which makes it a condition precedent to a foreign corporation engaging in a legitimate branch of interstate commerce to obtain what practically amounts to a license to transact such business is a burden and restriction upon interstate commerce and as such is unconstitutional under the commerce clause of the Federal Constitution; and so held as to the requirements of § 1283, General Laws of Kansas of 1901, when applied to a foreign corporation carrying on the business of teaching persons in that State by correspondence conducted from the State in which it is organized. Quare how far a foreign corporation carrying on business in a State may claim equality of treatment with individuals in respect to the right to sue and defend in the courts of that State; but where a condition precedent to a foreign corporation doing business at all in a State is unconstitutional, the further condition that it cannot

Argument for Plaintiff in Error.

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maintain any action in the courts of the State until it has complied with such unconstitutional condition is also stricken down as being inseparable therefrom.

Where a statute is unconstitutional in part the whole statute must be deemed invalid except as to such parts as are so disconnected with the general scope that they can be separably enforced; and so held as to the provisions in § 1283 of the General Laws of Kansas of 1901 against a foreign corporation maintaining any action until it has complied with another provision as to filing a detailed statement which is unconstitutional as to foreign corporations engaged in interstate commerce.

76 Kansas, 328, reversed.

THE facts, which involve the constitutionality of § 1283 of the General Statutes of Kansas of 1901, are stated in the opinion.

Mr. James M. Beck, with whom Mr. Seth T. McCormick and Mr. David C. Harrington were on the brief, for plaintiff in

error:

The contract between the plaintiff and the defendant for the shipment by the plaintiff from Scranton, Pennsylvania, to the defendant in Topeka, Kansas, of printed and documentary merchandise for a pecuniary consideration, was a transaction of interstate commerce. Rearick v. Pennsylvania, 203 U. S. 507, 512; Swift v. United States, 196 U. S. 375, 398.

Plaintiff's business is essentially and practically that of compiling, printing, selling and shipping educational publications. As such it is one of the greatest, if not the greatest, educational publication house in the world.

It was formed in October, 1891, and it now has $6,000,000 of paid up capital; 2,800 employees, including an instruction staff of 400 trained teachers; 200 courses of study; its pamphlets and text-books are protected by 5,700 copyrights; it has three home office buildings, of seven acres floor space, and its annual expenditures include $100,000 for postage, $350,000 for printing and $250,000 for preparation and revision of courses. It has enrolled to April 1, 1909, over 1,100,000 purchasers of its educational literature. Its printing establish

217 U.S.

Argument for Plaintiff in Error.

ment issues over 25,000,000 separate pieces of printed matter each year. In the first fifteen years of its existence, its receipts were over $28,000,000.

The case presents every element of a transaction of interstate commerce. There is a vendor and a vendee, a thing bought and a thing sold, a price paid and merchandise delivered. Such merchandise is physically delivered by the vendor directly to the vendee and such delivery is effected, as in the case under consideration, by a continuous and unbroken shipment from a destination in one State to a destination in another, forming "a current of commerce among the States." Swift v. United States, 196 U. S. 375, 399.

Even if the "instruction papers" were not regarded in common with all other educational publications as printed merchandise but simply as printed information of a peculiar or special character it would nevertheless be within the commerce clause of the Constitution. To sell information in a concrete and tangible form, as in a printed pamphlet, is as much a commercial transaction as to sell a bushel of wheat or a pound of iron. Gibbons v. Ogden, 9 Wheat. 1; and see Mr. Justice Johnson's concurring opinion in Gibbons v. Ogden, p. 222; Passenger Cases, 7 How. 282; Covington Bridge Company v. Kentucky, 154 U. S. 204, 218. Indeed, the mere transmission of intelligence or information is commerce, even without regard to its strictly commercial purpose. Pensacola Tel. Co. v. Western Un. Tel. Co., 96 U. S. 1; West. Un. Tel. Co. v. Pendleton, 122 U. S. 347; Lottery Cases, 188 U. S. 321. While policies of insurance have been held not to be articles of commerce, this is wholly for the reason that they are mere contracts for the ultimate and possible payment of

money.

Shipping newspapers from New York to Texas is a transaction of interstate commerce, Preston v. Finley, 27 Fed. Rep. 850, 857; also shipment of books from one State to another. In re Nichols, 48 Fed. Rep. 164; In re White, 43 Fed. Rep. 914; Culberson v. Am. T. & B. Co., 107 Alabama, 457.

Argument for Plaintiff in Error.

217 U.S.

Anything which can be bought and sold is a subject of commerce and it cannot be reasonably questioned that these educational pamphlets, prepared at so much expense, could be bought and sold like any other commodity. Butler Bros. Shoe Co. v. United States Rubber Co., 156 Fed. Rep. 1, 17.

The right to engage in interstate commerce includes the right to employ representatives to solicit contracts for the purchase of interstate commodities, and the mere fact that such an agent solicits a contract, and collects the price, does not give the State any larger power to burden or restrain such business by license taxes or police regulations. Robbins v. Shelby County Taxing District, 120 U. S. 489, 491, 493; Lyng v. Michigan, 135 U. S. 161, 166; Norfolk & Western R. R. Co. v. Pennsylvania, 136 U. S. 114; Crutcher v. Kentucky, 141 U. S. 47, 57-59; Caldwell v. North Carolina, 187 U. S. 622, 623.

The statutes of Kansas, requiring plaintiff to obtain its "permission" to engage in interstate commerce and burdening the exercise of its constitutional right to do so with license taxes, and fees, and penalizing the plaintiff for engaging in interstate commerce without the "permission" of the State by denying to the plaintiff equality of judicial relief in its courts, are unconstitutional.

The right of a State altogether to exclude foreign corporations or to impose conditions upon their right to do business within the State, is so far modified and restricted by the commerce clause of the Constitution that the State cannot exclude any foreign corporation from entering said State to engage in interstate commerce with its citizens. Stockton v. Balt. R. R. Co., 32 Fed. Rep. 9; Pensacola Tel. Co. v. Western Un. Tel. Co., 96 U. S. 1; Cooper Mfg. Co. v. Ferguson, 113 U. S. 727; Norfolk & Western R. R. Co. v. Pennsylvania, 136 U. S. 114, 118; Crutcher v. Kentucky, 141 U. S. 47, 57; Caldwell v. North Carolina, 187 U. S. 622; Brennan v. Titusville, 153 U. S. 289. See also Robbins v. Shelby Taxing District, 120 U. S. 489; Asher v. Texas, 128 U. S. 129; Stoutenburgh v.

217. U.S.

Argument for Plaintiff in Error.

Hennick, 129 U. S. 142; Pembina Mining Co. v. Pennsylvania, 128 U. S. 190.

In the absence of congressional action, the Constitution provides that interstate commerce be free. This rule applies no matter how salutary the police regulations might otherwise be, or however insignificant the tax. Any burden or condition is void except such purely local police regulations as refer strictly to the health or morals of the community.

The requirements of §§ 1260 and 1283 may not in themselves be unreasonable, but their fatal defect is that they exercise a power which belongs exclusively to Congress. Section 1283 is so inseparably linked with the other statutory requirements that the burden is much greater than merely filing these annual statements.

When the Kansas statutes state that a foreign corporation engaged in interstate commerce cannot as to a transaction in such commerce enforce its claims in the courts of Kansas, it in part, and in many cases altogether, prohibits the making of such contracts and therefore the carrying on of such com

merce.

The judicial enforcement of a contract is as much a part of the contract as vital motion is a part of vital existence. It cannot be argued that while Kansas could not prohibit the making of a contract in interstate commerce it could destroy its very life.

It matters not whether an attempted regulation of such commerce by the State is through its executive or judiciary, for the State may not "by any of its agencies, legislative, executive or judicial," impair or destroy a right under the Constitution of the United States. San Diego Land Co. v. National City, 174 U. S. 739, 753; C., B. & Q. R. R. Co. v. Chicago, 166 U. S. 226, 234.

A judicial regulation which directly burdens interstate commerce, is as invalid as an act of the executive. Security Ins. Co. v. Prewitt, 202 U. S. 246, distinguished, as not applying to a case where a Federal right was sought to be indirectly

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