Although a corporation is the creation of a State which reserves the power to amend or repeal corporate charters, the retention of such power will not support the taking of the corporate property without due process of law. To terminate the life of a corporation by annulling its charter is not to confiscate its property but to turn it over to the stockholders after liquidation.[284] Conversely, unreasonable regulation, as by the imposition of confiscatory rates, although it ostensibly falls short of termination of the corporate existence, entails an invalid deprivation.[285]
Foreign Corporations
Foreign corporations also enjoy the protection which the due process clause affords; but such protection does not entitle them to enter another State or, once having been permitted to enter, to continue to do business therein.[286] The power of a State to exclude or to expel a foreign corporation being almost plenary as long as interstate commerce is not directly affected, it follows that a State may subject such entry or continued operation to conditions. Thus, a State law which requires the filing of articles with a local official as a condition prerequisite to the validity of conveyances of local realty to such corporations is not violative of due process.[287] Neither is a State statute which requires a foreign insurance company, as part of the price of entry, to maintain reserves computed by a specific percentage of premiums, including membership fees, received in all States.[288] Similarly a statute requiring corporations to dispose of farm land not necessary to the conduct of their business is not invalid as applied to a foreign hospital corporation, even though the latter, because of changed economic conditions, is unable to recoup its original investment from the sale which it is thus compelled to make.[289]
"The Constitution does not guarantee the unrestricted privilege to engage in a business or to conduct it as one pleases. Certain kinds of business may be prohibited; and the right to conduct a business, or to pursue a calling, may be conditioned. * * * Statutes prescribing the terms upon which those conducting certain businesses may contract, or imposing terms if they do enter into agreements, are within the State's competency."[290]
Laws Prohibiting Trusts, Discrimination, Restraint of Trade.—A State act prohibiting trusts, etc., is not in conflict with the Fourteenth Amendment as to a person combining with others to pool and fix prices, divide net earnings, and prevent competition in the purchase and sale of grain.[291] Nor does the Fourteenth Amendment preclude a State from adopting a policy against all combinations of competing corporations and enforcing it even against combinations which may have been induced by good intentions and from which benefit and not injury may have resulted.[292] Nor is freedom of contract unconstitutionally abridged by a statute which prohibits retail lumber dealers from uniting in an agreement not to purchase materials from wholesalers selling directly to consumers in the retailers' localities,[293] nor by a law punishing combinations for "maliciously" injuring a rival in his business profession or trade.[294] Similarly, a prohibition of unfair discrimination by any one engaged in the manufacture or distribution of a commodity in general use for the purpose of intentionally destroying competition of any regular dealer in such commodity by making sales thereof at a lower rate in one section of the State than in another, after equalization for distance, effects no invalid deprivation of property or interference with freedom of contract.[295] Liberty of contract is infringed, however, by a law punishing dealers in cream who pay higher prices in one locality than in another. Although high bidding by strong buyers tends toward monopoly, the statute has no reasonable relation to such bidding, but infringes private rights whose exercise is not shown to produce evil consequences.[296] A law sanctioning contracts requiring that commodities identified by trade mark will not be sold by the vendee or subsequent vendees except at prices stipulated by the original vendor does not violate the due process clause.[297]
Statutes Preventing Fraud in Sale of Goods.—Laws and ordinances tending to prevent frauds and requiring honest weights and measures in the sale of articles of general consumption have long been considered lawful exertions of the police power.[298] Thus, a prohibition on the issuance by other than an authorized weigher of any weight certificate for grain weighed at any warehouse or elevator where State weighers are stationed, or to charge for such weighing, is not unconstitutional.[299] Nor is a municipal ordinance requiring that commodities sold in load lots by weight be weighed by a public weigh-master within the city invalid as applied to one delivering coal from State-tested scales at a mine outside the city.[300] A statute requiring merchants to record sales in bulk not made in the regular course of business is also within the police power.[301]
Similarly, the power of a State to prescribe standard containers to protect buyers from deception as well as to facilitate trading and to preserve the condition of the merchandise is not open to question. Accordingly, an administrative order issued pursuant to an authorizing statute and prescribing the dimensions, form, and capacity of containers for strawberries and raspberries is not arbitrary inasmuch as the form and dimensions bore a reasonable relation to the protection of the buyers and the preservation in transit of the fruit.[302] Similarly, an ordinance fixing standard sizes of bread loaves and prohibiting the sale of other sizes is not unconstitutional.[303] However, by a case decided in 1924, a "tolerance" of only two ounces in excess of the minimum weight of a loaf of bread is unreasonable when it is impossible to manufacture good bread without frequently exceeding the prescribed tolerance and is consequently unconstitutional;[304] but by one decided ten years later, regulations issued in furtherance of a statutory authorization which impose a rate of tolerance not to exceed three ounces to a pound of bread and requiring that the bread maintain the statutory minimum weight for not less than 12 hours after cooling are constitutional.[305] Likewise a law requiring that lard not sold in bulk should be put upon in containers holding one, three, or five pounds weight, or some whole multiple of these numbers, does not deprive sellers of their property without the process of law.[306]