interstate commerce. The power to regulate the business of these corporations lies with congress."

217

Besides being subjected to these statutory regulations, a foreign corporation can be taxed in the state where it conducts its business. Thus, the several states make provision for taxing foreign corporations doing business within each state respectively. Generally, the provision is to tax so much of the property of foreign corporations doing business in any state, as is situated in the state. Another method,

often adopted, is to tax so much of its capital stock as is represented by the proportionate amount of business done by it within that state.

POWER TO HOLD LAND

66. The question of the power of a foreign corporation to take, hold, and transmit title to land is one of public policy, and no general rule can be formulated from the decisions and statutes which must, as in most matters affecting land titles, be referred to with reference to a particular state. Enabling statutes will be found in many states, either general, or, where such legislation is permissible, for special cases. The conclusion has, however, been reached that, in the absence of prohibitory local law, there is much authority that, if authorized to do so in the state of their creation, corporations may hold land in other states.'

218

MAY SUE AND BE SUED

67. It is clearly a principle, settled by many decisions, that, unless prohibited by local statutory law, a corporation of one state may sue in another by its corporate title. In the absence of the prohibition, this right of action extends to all cases and causes of action as to which remedy exists in favor of other persons or domestic corporations."1o

217 See The Law of Business and Commerce: Interstate Commerce.

218 Bouv. Law Dict., citing 117 Ill. 237 (1886); 19 Fed. Rep. 73 (1884); 25 Vt. 433 (1853). 219 Thomp. Corp., Vol. 6, Sec. 7,978.

220

The statutes of the various states generally provide for the method of bringing suit against foreign corporations within its borders. In such suits, the question of jurisdiction is of first importance, and it is the general rule that a corporation, like a natural person, cannot be sued in person in a state within whose limits it has never been found.*** This conclusion springs naturally from the principle that a corporation, being the creation of the local law, can have no legal existence beyond the limits of the sovereignty where created." But this rule is subject to exceptions growing out of the theory that, under certain circumstances, such corporations will be held in law to have acquired a domicil within a state, at least so far as to subject them to suit.""1

221

220 Thomp. Corp., Vol. 6, Sec 7.988.

221 Bouv. Law Dict., citing & Wall.

(U. S.) 181 (1868).

THE LAW OF BUILDING

ASSOCIATIONS

DEFINITION AND NATURE

1. A building association or, as it is commonly called, a building and loan association, is an organized union of persons for the purpose of accumulating money to be loaned to its members to aid them in the purchase of real estate, the erection or improvement of buildings, or for the payment of encumbrances thereòn. The money is accumulated by monthly payments on the shares of stock subscribed by the members, called dues, and from penalties imposed for the non-payment of such dues, and from the profits realized from investments. Loans to members deserving them are made upon good security, usually mortgages on the real estate purchased or improved by them, and are extinguished by the successive payments of dues on the stock and premiums charged for the loans.

2. The means by which the funds of these associations are accumulated are: (1) Each member, upon joining the association, subscribes for one or more shares of stock; that is, he undertakes to make certain periodical payments (dues), for instance, fifty cents or one dollar per month for each share of stock held by him, until the time for final distribution. (2) When the amount of funds collected by the society from these stock payments, or dues, reaches a certain sum fixed by the by-laws of the association or otherwise, the money is loaned to such of the members as desire to borrow; but as there may be several anxious to secure a loan, their

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competition is turned to the advantage of the association by charging a premium for the privilege of priority, which is, in some cases, fixed in amount by the by-laws of the society, and, in others, it is determined by active competition among members of the association at an open auction sale. (3) Upon all such loans, interest is charged from the date of the loan until the final distribution of the fund to the members. (4) Fines of a fixed amount are imposed upon a member's default in stock payments, or in the payment of the premium or interest upon loans. (5) Lastly, certain small fees are charged as incidental to a member's entering or withdrawing from the association, or having a transfer of his stock made upon its books.

From these sources a fund is gradually accumulated which, while no single payment is extensive in amount, rises to very considerable proportions; and when the value of the fund equals the face value of all the shares of stock subscribed in a certain series of shares, which is fixed and determined at the beginning of the association itself, and when the fund accumulated in the treasury of the association is sufficiently large to pay to the holder of each share the face value of his stock, the object of the association is accomplished, and each member is entitled to receive the amount for which his stock calls. If, however, a member have, at any time previously, received from the association the face value of his shares as a loan or advance, he is not entitled to receive any portion of the fund to be distributed; he is merely relieved from the payment of interest upon his loan, and becomes entitled to a cancelation of the mortgage, or other security, given for the loan.

The building associations of the United States number more than six thousand, representing an aggregate capital of nearly six hundred million dollars. Two million citizens of this country are directly interested in their welfare as members and borrowers.'

உ

19th Annual Report of the U. S. Commissioner of Labor, 1893, pp. 14, 15, Bldg. & Loan Assns.

CLASSIFICATION

3. Building associations are classified as terminating, serial, and permanent, or as local and national; also, as incorporated and unincorporated.

TERMINATING ASSOCIATIONS

4. A terminating association is one in which a single series of stock is issued, and all the shares mature at the same time; the association is, therefore, ready to have its affairs wound up on the maturity of the stock. This plan has several serious defects: (1) The association is necessarily dissolved at the maturity of the stock; (2) a stockholder who becomes a member after the association has been running for some time is obliged to pay a large amount of back dues in order to place himself in the position he would have occupied had he taken his stock at the date of the first issue; and, (3) in order that the dues paid in from month to month shall not remain uninvested, the association is given the power to make forced loans; that is, to compel a shareholder to become a borrower whether he desire to do so or not.

The terminating plan has now been almost wholly abandoned, and only exists where the stock of associations originally formed upon this plan has not yet had time to mature. Its defects are obviated by either the serial or the permanent plan.

SERIAL ASSOCIATIONS

5. A serial association is one in which a new series of stock is issued at the beginning of each

year, or half

year, or at more frequent periods. By this plan one may become a member at any stated period for the issue of the

4

2 19 W. Va. 695 (1882).