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Case: National Council Junior Order United American Mechanics (JOUAM) of US v.

State Council of
Virginia, Junior Order of United American Mechanics of the State of Virginia

Facts:
The State Council of Virginia, JOUAM is a Virginia corporation, while the National Council JOUAM is a
Pennsylvania corporation. The Pennsylvania corporation’s charter, established in 1893, provides that it
protects America from foreign interference, especially from foreign corporations, establishes public
schools, prevents sectarian interference with public schools, among other goals. The Virginia corporation
used to act under a charter provided by the Pennsylvania corporation, the latter being considered the
national council and the supreme head of the order of the JOUAM in the United States. Because of internal
conflicts, however, the Virginia corporation broke off from the Pennsylvania corporation and established
its own charter in 1900, with closely similar objects as the Pennsylvania corporation, omitting only those
related to public schools. This grant was given by the Virginia legislature to the Virginia corporation The
Virginia corporation (State Council of Virginia, JOUAM) now claims exclusive authority to issue charters
within the State of Virginia; this was opposed by the National Council, JOUAM, which claimed that it was
they, as the national council, which had the exclusive right to issue charters. The National Council filed an
injunction suit against the Virginia corporation before the courts of Virginia, hoping to stop the Virginia
corporation from issuing exclusive charters in the state. For their main argument, they claimed that the
State Council of Virginia, JOUAM, used their name, their logos, and their charter to further the same case,
in violation of the rights of the National Council of Virginia, JOUAM. They also claimed that the move of
the Virginia legislature in granting the exclusive charter to the Virginia corporation was a violation of their
constitutional property rights.
Issue: WON the injunction should issue against the State Council of Virginia, JOUAM, stopping the latter
from issuing exclusive charters within the State of Virginia.
Held: NO. It was within the power of the Virginia legislature to issue a charter in favor of the State Council
of Virginia, JOUAM, which granted the latter the right to issue charters to the exclusion of the National
Council.
First, it is true that an unconstitutional law no more binds foreign corporations than it binds others. And
no doubt a law specially directed against a foreign corporation might be unconstitutional, for instance, as
depriving it of its property without due process of law. But when the so-called property consists merely
in the value that there might be in extending its business or membership into a state, that property, it
hardly needs to be said, depends upon the consent of the state to let the corporation come into the state.
The state of Virginia had the undoubted right to exclude the Pennsylvania corporation and to forbid its
constituting branches within the Virginia boundaries. As it had that right before the corporation got in, so
it had the right to turn it out after it got in. It follows that the state could impose themore limited
restriction that simply forbade the granting of charters to ‘subordinate councils, JOUAM, in the state of
Virginia.’
Second, it is argued that the power of the state in this case was less than it otherwise might have been,
because it did not turn the Pennsylvania corporation out. It is said that the general statutes recognized
the defendant and authorized such associations to continue within the state. A subordinate council of the
order had been granted a special charter, which is not revoked. The conclusion is drawn that the
restrictions upon the Pennsylvania corporation which flow from the charter to the Virginia corporation
amount to a denial of the equal protection of the laws of Virginia to a person within its jurisdiction. But
the power of the state as to foreign corporations does not depend upon their being outside of its
jurisdiction. Those within the jurisdiction, in such sense as they ever can be said to be within it, do not
acquire a right not to be turned out except by general laws. A single foreign corporation, especially
one unique in character, like the national council, might be expelled by a special act. It equally could be
restricted in the more limited way.
Thus, a State statute incorporating a local society with the same name (i.e., the State Council of Virginia,
JOUAM) as that of a previously existing voluntary state association (i.e., the National Council, JOUAM),
whose charter from the foreign corporation had been withdrawn, and conferring upon it the exclusive
right of granting sub-charters in the state held valid.