Paul v. Virginia

Supreme Court of the United States · 1868 · Constitutional Law

75 U.S. 168 (1868)

Overruled by United States v. South-Eastern Underwriters (1944)

Updated July 29, 2026

Constitutional LawPrivileges and ImmunitiesCommerce ClauseCorporationsInsuranceforeign corporationsPrivileges and Immunities Clauseinsurance contracts

Facts

Virginia had a statute containing discriminating provisions between its own corporations and corporations of other states. The validity of those provisions was attacked as violating the constitutional guarantee that citizens of each state are entitled to the privileges and immunities of citizens in the several states, and as infringing Congress's power to regulate commerce among the states. The case involved New York insurance companies doing business in Virginia through policies delivered there. The challenged business consisted of issuing policies of insurance against loss by fire.

Issue

Whether Virginia could impose discriminatory conditions on corporations created by other states without violating the Article IV Privileges and Immunities Clause or the Commerce Clause. Also, whether the issuing of fire insurance policies by out-of-state corporations is interstate commerce protected from such state regulation.

Rule

The term "citizens" in Article IV's Privileges and Immunities Clause applies only to natural persons, not corporations. A corporation exists only by force of the law of the sovereign that created it and has no absolute right to recognition in another state; another state may exclude it entirely or admit it on such conditions as it chooses. Issuing a policy of insurance is a personal contract of indemnity, not an article or transaction of commerce among the states.

🔒

See the holding & full analysis

Create a free KwikCourt account to unlock the rest of this brief — and practice the case.

The court's holding and reasoning
Doctrine tests, pitfalls & exam hypotheticals
10 practice questions + 4 AI-graded essays on this case

Free sample · practice this case

Test yourself

One of 10 multiple-choice questions for this case. Pick an answer to see why.

Lakeview Casualty Association, a corporation chartered in Ohio, seeks to sell fire-loss policies in Georgia through an office in Atlanta. Georgia allows its own insurance corporations to operate freely but requires out-of-state insurance corporations to post a substantial bond before issuing any policy. Lakeview argues the bond requirement violates Article IV because its shareholders are all Ohio citizens.

Is Lakeview likely to prevail on its Article IV challenge?

Explanation. The majority held that the term "citizens" in Article IV applies only to natural persons, not artificial entities created by state law. A corporation cannot claim Privileges and Immunities protection by pointing to the citizenship of its shareholders. Accordingly, Georgia may impose different conditions on a foreign corporation without violating Article IV.