Germania Insurance Company v. State of Wisconsin

This is a writ of error brought under section 5 of the act of March 3, 1875, (chapter 137, 18 St. 470,) for the review of an order of the circuit court remanding a suit which had been entered in that court as a suit removed from a state court. The record shows a suit brought by the state of Wisconsin, in one of its own courts, against the Germania Insurance Company of New Orleans, an insurance company incorporated by the state of Louisiana, and having its principal office and place of business in New Orleans, to recover certain statutory penalties for doing business in Wiscon in without complying with the laws of that state in reference to foreign insurance companies. The only process in the cause was served December 29, 1885, on L. D. Harmon, a citizen of Wisconsin, and described in the sheriff's return as 'being then and there an agent of the said defendant.'

On the twelfth of April, 1886, the insurance company came, and, entering 'its special appearance in the action * * * for the purpose of this motion only,' moved the court 'to vacate and set aside the pretended service of summons' as above stated, 'and all and every proceeding in said action subsequent thereto, for want of jurisdiction, and irregularity in said pretended service of process.' In support of this motion an affidavit of the vice-president and of the secretary of the company was filed, to the effect that Harmon was never the agent of the company, and that the company had no agent in the state, and had had no agent, and had not transacted insurance business, there for 10 years then last past. Before any action was had upon this motion, the company, on the same twelfth of April, presented to the court its petition for the removal of the suit to the circuit court of the United States for the Eastern district of Wisconsin, in which is set forth the motion to set aside the service of the summons in the action, and the special appearance of the company for the purposes of that motion only, and the grounds of the motion. The petition then states 'that the suit arises out of a controversy between the parties in regard to the operation and effect of certain provisions of the laws of the state of Wisconsin, said to be in conflict with the constitution of the United States in various particulars, and necessitating a construction thereof, among which subjects of controversy are the following, to-wit: 'Whether the attempt of the state to prevent the company from doing business in the way it was done was not in conflict with section 1, art. 14, and with section 8, art. 1, of the constitution; and whether the aforesaid proceedings in said court, and the attempt to proceed against your petitioner by service of summons or process upon one not authorized to represent it, without appearance in court, constitutes 'due process of law,' within the meaning of the constitution of the United States.'

The state court refused to allow a removal, and thereupon the company took a copy of the record to the circuit court, where proceedings were had on the twenty-ninth of May in accordance with the following docket entry:

'The State of Wisconsin vs. The Germania Insurance Company of     New Orleans.

'And comes the defendant, specially appearing by Cotzhausen,     Sylvester, Scheiber & Sloan, for purposes of pending motion      only, and moves the court for an order docketing this cause,      which motion was granted ex parte; and the defendant,      appearing specially for the purposes of this pending motion,      gives notice that on the seventh day of June, A. D. 1886, at      the opening of court on that day, or as soon thereafter as      counsel can be heard.' the plaintiff will be required to show      cause 'why the pending motion to set aside the pretended      service of summons, and all subsequent proceedings in said      cause, should not be taken up, heard, and considered.'

On the twenty-fourth of June the circuit court remanded the cause, whereupon this writ of error was sued out.

F. W. Cotzhausen, for the insurance company.

H. W. Chynoweth, for the State.

WAITE, C. J.

A suit by a state in one if its own courts cannot be removed to a circuit court of the United States, under the act of 1875, unless it be a suit arising under the constitution or laws of the United States, or treaties made under their authority, (Ames v. Kansas, 111 U.S. 449; S.C.. 4 Sup. Ct. Rep. 437;) and a suit cannot be said to be one arising under the constitution or laws of the United States until it has in some way been made to appear, on the face of the record, that 'some title, right, privilege, or immunity, on which the recovery depends, will be defeated by one construction of the constitution or a law of the United States, or sustained by an opposite construction,' (Starin v. New York, 115 U.S. 257; S.C.. 6 Sup. Ct. Rep. 28.) This record shows no such thing; for, as the case now stands, the right of recovery depends alone on the question whether service of summons has been made on a person who was at the time an agent of the company within the state on whom process might legally be served, so as to bind the company, and bring it within the jurisdiction of the court. This is a mixed question of laws and fact, and in no way dependent on the construction of the constitution or any law of the United States. If decided in one way, the suit will be at an end, and the company relieved from all necessity of appearing to defend. If in another, the company must appear, or suffer the consequences of a default. As yet no suit arising under the constitution or laws of the United States has been brought, within the meaning of that term as used in the statute. There is nothing in the complaint which discloses any such case, and, until the company submits itself to the jurisdiction of the court for the trial of the suit, it cannot be permitted to allege any new matter. All further proceedings have been stopped by the company on its own motion until it can be determined whether any suit at all has in law been begun so as to require the company to appear and defend. The case stands, therefore, on the summons, the alleged service, the complaint, the special appearance of the company for the purposes of its motion to vacate the service, and the petition for removal, which must be limited in its statements to such as are consistent with the special appearance which has been entered. No new matter in the nature of a defense to the action can be introduced. The only question which can be considered in the case as it now stands is whether Harmon, on whom this process was served, was in fact an 'authorized agent.' The suit, therefore, does not, as yet, 'really and substantially involve a dispute or controversy properly within the jurisdiction of the circuit court,' and and it was properly remanded.