At a comparatively early date, the claim was made that a corporation chartered by a state and consisting of its citizens was entitled to the benefits of the comity clause in the transaction of business in other states. It was argued that the Court was bound to look beyond the act of incorporation and see who were the incorporators. If it found these to consist solely of citizens of the incorporating state, it was bound to permit them through the agency of the corporation to exercise in other states such privileges and immunities as the citizens thereof enjoyed. In Bank of Augusta v. Earle,178 this view was rejected. The Court held that the comity clause was never intended “to give to the citizens of each State the privileges of citizens in the several States, and at the same time to exempt them from the liabilities which the exercise of such privileges would bring upon individuals who were citizens of the State. This would be to give the citizens of other States far higher and greater privileges than are enjoyed by the citizens of the State itself.”179 A similar result was reached in Paul v. Virginia,180 but by a different course of reasoning. The Court there held that a corporation, in this instance, an insurance company, was “the mere creation of local law” and could “have no legal existence beyond the limits of the sovereignty”181 which created it; even recognition of its existence by other states rested exclusively in their discretion. Later recent cases held that this discretion is qualified by other provisions of the Constitution notably the Commerce Clause and the Fourteenth Amendment.182 By reason of its similarity to the corporate form of organization, a Massachusetts trust has been denied the protection of this clause.183


38 U.S. (13 Pet.) 519 (1839). back
38 U.S. at 586. back
75 U.S. (8 Wall.) 168 (1869). back
75 U.S. at 181. back
Crutcher v. Kentucky, 141 U.S. 47 (1891). back
Hemphill v. Orloff, 277 U.S. 537 (1928). back