Page:Harvard Law Review Volume 9.djvu/126

98 HARVARD LAW REVIEW. corporations to transact a particular business which clearly indi- cates a legislative policy to prevent foreign corporations from transacting the business in question in the State. Thus, in the Texas case of Empire Mills v. Allston Grocery Company,^ the defendants, vi^ho were citizens of Texas, had formed a corporate organization under a general law of the State of Iowa for the pur- pose of carrying on a mercantile business in the State of Texas. The constitution of Texas prohibits the creation of private corpo- rations except under general laws. By an act of the legislature provision was made for the creation and operation of mercantile companies. This provision was subsequently repealed. The re- peal, it was held, was a denial of the right to form, and a prohibi- tion of the operation of such corporations in Texas. The Statute granted the privilege and then revoked it, thereby superseding the rule of comity. The court accordingly refused to recognize the legality of the corporation, and the defendants were held liable as partners to the plaintiff. The question of the public policy of a State in the matter of the holding of lands for speculation or revenue by a foreign corpora- tion has been directly presented and decided in Illinois, New York, New Hampshire and Ohio.^ In the case of Carroll v. East St. Louis,^ a Connecticut land company had purchased real estate in Illinois, which it subse- quently sold and conveyed to the city of East St. Louis. The plaintiff, who claimed under the grantor of the land company, brought a suit of ejectment against the city, contending that it was against the public policy of the State of Illinois to permit a foreign corporation, created for the sole purpose of buying and selling lands, to take title to land in IlHnois. At the outset of the discussion the court properly limited itself to a consideration of the legislation applicable to the subject. " In this investigation," the court said, '* it must be remembered that the law-making p^wer of the State, where the authority is proposed to be exercised, is alone invested with the authority, and must determine its public policy. With this power the courts have not been intrusted. It is for them to ascertain and apply the law and the legislative policy, and not to inaugurate it. The public policy of the State may be 1 15 S. W. Reporter, 200, 505. 2 Lumbard v. Aldrich, 8 N. H. 31 ; American Bible Society z/. Marshall, 15 Ohio St. 537 ; supra, p. 94; N. H. Land Co. v. Tilton, 19 Fed. Rep. 73. 8 67 111. 568.