§23. Status of Foreign Corporations.

There is more uncertainty as to the extent of the obligation to recognize the legal capacity of foreign corporations. Two systems have been in vogue, the one restrictive, which gives a foreign corporation few if any rights and scarcely even recognizes its civil personality, the other liberal, which grants a foreign corporation, within certain specified limitations, the same rights as a natural person, its civil personality being fully recognized.

The restrictive system, supported vigorously by Laurent and his school, is founded upon the Roman "fiction" theory of the nature of juridical personality. The corporation is considered as having an existence only in the territory which has given it legal birth, and recognition of its personality abroad is deemed to require an express act of the local sovereign power, a decree, a statute or a treaty. The fallacies of this system, which with the necessities of modern international commercial relations is rapidly being discarded, consist in overemphasis of the fiction theory of the corporation, and a failure to distinguish between civil and functional capacity.

A corporation, certainly a commercial corporation, is composed of human beings and has a real personality, which is a reality in every state. Its civil capacity, consisting of its right to sue and be sued, to enter into contracts and own property, is essential to its existence, and may be recognized quite apart from any permission to transact business or fulfill its functions. With these facts in mind, the liberal system founds its doctrine upon an assimilation between foreign corporations and natural persons. The corporation's civil capacity and status are governed by its personal law and only its functional capacity is under the control and regulation of the territorial state. This control is limited to those relations of the corporation which concern the citizens of the state, its public policy, or the interests of third parties. Thus, all questions of internal management are matters of personal law and are free from interference by the territorial state. The func'Laurent, Droit civil international, IV, 119 et seq.; Taney, Ch. J., in The Bank of Augusta v. Earle, 13 Peters, 519 is sometimes (correctly, it is believed) cited in support of this view. See also the agreement of June 25, 1904 between the United States and Russia recognizing the civil capacity of corporations, Malloy's Treaties, 1910, II, 1534.

tional capacity of a corporation is limited by its charter and the law of the state where it transacts business.

At the present day, practically all states recognize the civil capacity of foreign corporations as they do that of natural persons. With the growth of commerce, local limitations on functional capacity are gradually being removed, either by statute or treaty, those that still exist being dictated by interests of public policy. Foreign corporations, like aliens generally, are subject to local regulations of registration and other provisions of penal and police laws.1

§ 24. Other Rights of the Alien.

Assuming that the alien has not fallen within the excluded classes and that by treaty or by legislation his right to admission is recognized, the state, it would appear, must grant him in addition rights of sojourn and trade. Some continental writers reduce these into, first, the right of international communication; and second, the right of circulation and residence. The right of communication implies the use of the mails, transportation facilities, secrecy of correspondence, etc. The right of circulation and residence is subject to the requirement of passports and the possibility of expulsion, should the alien's presence become a menace to the public interests of the state. From the rights of residence and circulation spring the right to security of person and property, always subject, however, to the penal laws and local ordinances.

"Civil rights" being a term of uncertain definition, numerous publicists have adopted a category of rights, which they call public rights, the

1 This important subject, the status of foreign corporations, cannot here be treated exhaustively. Full discussions will be found in the excellent monograph of Edward H. Young, Foreign companies and other corporations, Cambridge, 1912, and particularly in his article: Status of foreign corporations and the legislature, 23 Law Quarterly Review (1907), 151-164, 290-303. See also Pillet, A., Des personnes morales en droit international privé, Paris, 1914; Haladjian, B., Des personnes morales étrangères, Paris, 1901; and Mamelok, A., Die juristische Person im internationalen Privatrecht, Zurich, 1900, and the works cited in the general and national bibliographies in the Appendix, infra, especially the works by Diena, Diritto commerciale internazionale, I, p. 229 et seq., Bar, op. cit., 227 et seq.; Dicey, op. cit., 485, and for American cases, 487-489; Pillet, op. cit., 181 et seq.; Moore's Dig., IV, 19 and Annuaire of the Institute of Int. Law, v. XI (1891 session), 171, and for public and quasi-public corporations, v. XVI (1897 session), 279 et seq.

2 Pillet, op. cit., 186; see also Baty, T., International law, London, 1909, 41.

enjoyment of which must be granted to every alien. A list of these rights is difficult to draw. They include personal and religious liberty and inviolability of domicil, liberty of the press, and other rights. In particular, the alien has the right to equal protection of the laws, which involves access to the courts and the use of the executive arm of the government in the enforcement of the rights granted.

MAXIMUM POWER OF STATE OVER ALIENS

$24a. Matters of Public Law.

Just as there is a minimum limit of rights and concessions which the state must grant to aliens, so there is a maximum limit of control by the state which it cannot exceed without violating the rights of other states. The obligations due by the alien to his national state and the rights incident to the bond of nationality constitute the raison d'être of this superior limit of the action of the state with respect to aliens. In greater part it operates as a check upon the state of residence in the grant of political rights and the exaction of political duties. Thus, the alien as a general rule cannot become a voter and is ineligible to public office. Similarly, he is unable to practice those professions or occupations which involve the taking of an oath of allegiance; so in many countries, he cannot become a judge, an attorney at law, a juryman, or witness to certain transactions. The bond of nationality in other respects inhibits the freedom of action of the state over the alien. Thus, it cannot confer citizenship upon him against his will, or without his manifesting an intention to change nationality. States have by agreement and concession fixed among themselves the conditions under which they will recognize the denationalization of a citizen and his naturalization in another state. The attempts of Venezuela in 1855 and Brazil in 1889 to force citizenship on resident aliens met with vigorous protest.1 So the state likewise cannot require military service from the alien, nor subject him to the extraordinary taxes and military burdens which citizens must bear. These exemptions are usually provided for by treaty and will be more fully discussed presently.

117 Clunet (1890), 766; Thomas in 4 R. G. D. I. P. (1897), 641. See, however, W. W. Willoughby in 1 A. J. I. L. (1907), 924. See also infra, § 232.

$25. Matters of Private Law.

In private law, the maximum limit of action has been fixed by the obligation to respect the "personal statute" of the alien. As affecting alienage, this limitation is more important in Europe, where nationality usually controls capacity and status, than in the United States and Great Britain, where domicil is the criterion of the personal statute. A state frequently declines to give effect to acts done by the alien to escape the penalties of his national law. So in some states a marriage or divorce in fraud of the alien's national law is not recognized. In general, it may be said that the clause of equality between national and alien, incorporated either in treaty or statute, operates simply as a limitation upon the arbitrary power of the local legislature and relieves the alien from the inferior position in which the municipal law might have placed him. It does not relieve him from those exceptions to equal treatment which the public interest in many countries is believed to dictate, e. g., limitations upon his right to own real property, or to own shares in national vessels. Likewise, the effect and force of many acts of the alien may be different from those of the national. He may be required to register his alienage, to comply with various matters of form, as, e. g., in case of marriage, and in other respects accept rules different from those applying to nationals. So long as his position is not one of inferiority, the clause of equality is not considered as having been violated.

Before it is possible to establish the obligations of a state toward aliens, which must be done before the responsibility of the state can be determined, it is necessary to examine in somewhat greater detail the relations between the state and the alien, the rights and obligations of the state, and the rights, duties and disabilities of the alien.

ADMISSION AND EXCLUSION

§ 26. State's Right of Exclusion.

The first point of contact between a state and an alien is at the frontier or port where he presents himself for admission. The first inquiry, therefore, before examining the rights of the alien within. the country, will be directed toward the right of the state to exclude and expel the alien. The vast extent of immigration within the last

half century and the growth of commercial intercourse, accompanied by a general recognition of the right of emigration and expatriation, have lent considerable importance to this inquiry.1

Publicists have disagreed as to the governing principles and governments as to the expedient policy. Those writers who base their conclusions upon the assumption that there is a fundamental right of international intercourse between states, maintain that no state can absolutely forbid entrance to aliens, although it may exclude those whose presence is a menace to the welfare of the state. On the other hand, taking the sovereignty of the state and its right of self-preservation as the point of departure, other publicists, by far the more numerous, agree that there is an inherent right of the state to exclude aliens at its pleasure. As Hall justly remarks, however:

3

"The exercise of the right is necessarily tempered by the facts of modern civilization. For a state to exclude all aliens would be to withdraw from the brotherhood of civilized peoples; to exclude any without reasonable or at least plausible cause is regarded as so vexatious and oppressive, that a government is thought to have the right of interfering in favour of its subjects in cases where sufficient cause does not in its judgment exist." 4

Courts in the United States and Great Britain which have had to pass upon the question, on writs of habeas corpus or in actions against administrative officers for preventing a landing or for the enforcement of an order of deportation, have affirmed the right of the state

1See the Resolutions on emigration of the Institute of International Law, Annuaire, XVI, 242 et seq.

2

Bluntschli, Dr. int. codifié, § 381; Pözl and Mohl, cited by Stoerk in Holtzendorff's Handbuch, II, 637; Liszt, Völkerrecht, 9th ed., 1912, § 25, p. 187.

The Institute of International Law adopted the following resolution: "The free entrance of aliens on the territory can only be prohibited in a general and permanent manner for reasons of public interest and extremely grave motives, e. g., by reason of a fundamental difference of morals or civilization, or by reason of an organization or dangerous accumulation of aliens who appear en masse. Annuaire, XII, 192, 220. See Oppenheim, I, 390 and bibliography there cited. See also von Overbeck, A., Niederlassungsfreiheit u. Ausweisungsrecht, Karlsruhe, 1907; Jeancourt-Galignani, A., L'immigration en droit international, Paris, 1908; Bouvé, C. L., Exclusion and expulsion of aliens in the United States, Washington, 1912; Regulations and resolutions of the Institute of International Law, Annuaire, XI, 277, 41, 273; XVI, 262 and 276. See also § VI, Control of immigration, in Moore's Dig. IV, 142 et seq. 'Hall, 6th ed., 211.