Sioux Remedy Co. v. Cope, 235 U.S. 197 (1914)

Sioux Remedy Company v. Cope

No. 37

Submitted March 13, 1914
Decided November 30, 1914
235 U.S. 197

ERROR TO THE CIRCUIT COURT OF TURNER COUNTY,

STATE OF SOUTH DAKOTA

Syllabus

When the writ of error from this Court is not allowed until after the record has been sent back by the state appellate court to the trial court, the writ is directed to that court.

It is within the province of the highest court of a state in construing a state statute to depart from prior decisions upon the subject if deemed untenable, and in such event, this Court, upon a writ of error to that court, accepts the latest construction and confines its attention to determining whether the statute, as so construed, violates the federal Constitution.

While a state may adopt a reasonable police measure, even though interstate commerce be incidentally or indirectly affected, it has no power to exclude from its limits foreign corporations or other engaged in interstate commerce or to impose such conditions as will fetter their right to carry on such commerce, or subject them in respect to their transactions therein to unreasonable requirements.

The right to demand and enforce payment for goods sold in interstate commerce is directly connected with, and essential to, such commerce, and the imposition of unreasonable conditions on such right operates as a burden and restraint upon interstate commerce.

While a state may restrict the right of foreign corporations to sue in its courts and to engage in business within its limits, its power in this respect, like all other state powers, can only be exerted within the limitations placed on state action by the federal Constitution.

A corporation authorized by the state of its creation to engage in interstate commerce may not be prevented from coming into the limits of another state for all legitimate purposes of such commerce.

A state may require a foreign corporation seeking to enforce rights in its courts to conform to prevailing modes of procedure and usual rules respecting costs, security therefor, and the like, but it may not impose conditions such as filing its certificate, paying recording fees, and appointing a resident agent which have no bearing on mere question of procedure or costs. Such conditions, by their necessary operation, are burdens on interstate commerce.

A requirement that a foreign corporation appoint a resident agent on whom process may be served in an action against it, as a condition precedent to suing in the courts of the state to collect a claim arising out of interstate commerce transactions, is a burden on interstate commerce, because it necessarily operates to thwart the purpose of the Constitution to secure and maintain the freedom of such commerce by whomsoever conducted.

The South Dakota statute, §§ 883-885, Rev.Codes 1903, as the same has been construed by the state courts, requiring foreign corporations, before bringing suit on claim arising in interstate commerce in the courts of the state, to file certificate of incorporation and other papers and pay recording fees and also to appoint resident agents on whom process can be served, is an unconstitutional burden on interstate commerce.

The facts, which involve the constitutionality under the commerce clause of the federal Constitution of a statute of South Dakota regarding the right of foreign corporations to sue in the courts of the state, and prescribing conditions to be performed in regard thereto, are stated in the opinion.