Home Insurance Company v. Morse

ERROR to the Supreme Court of Wisconsin; the case being thus:

A statute of Wisconsin, passed in 1870, enacts as follows:

'It shall not be lawful for any fire insurance company, association, or partnership, incorporated by or organized under the laws of any other State of the United States, or any foreign government, for any of the purposes specified in this act, directly or indirectly to take risks or transact any business of insurance in this State, unless possessed of the amount of actual capital required of similar companies formed under the provisions of this act; and any such company desiring to transact any such business as aforesaid by any agent or agents, in this State, shall first appoint an attorney in this State on whom process of law can be served, containing an agreement that such company will not remove the suit for trial into the United States Circuit Court or Federal courts, and file in the office of the secretary of state a written instrument, duly signed and sealed, certifying such appointment, which shall continue until another attorney be substituted.'

This statute being in force, the Home Insurance Company of New York, a corporation organized under the laws of the State of New York, and having its office and principal place of business in the city of New York, being desirous of doing business in the State of Wisconsin, established an agency there, and in compliance with the provisions of the above-quoted statute, filed in the office of the secretary of state of Wisconsin an appointment of H. S. Durand as their agent in it, on whom process might be served. The power of attorney thus filed contained this clause:

'And said company agrees that suits commenced in the State courts of Wisconsin shall not be removed by the acts of said company into the United States Circuit or Federal courts.'

Being thus established in the State, the company issued a policy of insurance to one Morse, and a loss having occurred, as was alleged, under it, Morse sued the company in the County Court of Winnebago, one of the State courts of Wisconsin, to recover the amount alleged to be due on the policy. The company entered its appearance in the suit and filed its petition to remove the case, under the twelfth section of the Judiciary Act of 1789, into the Circuit Court for the district. The section under which the company filed its petition for removal is in these words:

'If a suit be commenced in any State court. . . by a citizen of the State in which the suit is brought against a citizen of another State,. . . and the defendant shall at the time of entering his appearance in such State court, file a petition for the removal of the cause for trial into the next Circuit Court to be held in the district where the suit is pending. . . and offer good and sufficient surety for his entering in such court on the first day of its session copies of said process against him, and also for his there appearing,. . . it shall then be the duty of the State court to accept the surety and proceed no further in the cause.'

The petition was in proper form and was accompanied by the required bond and bail.

The State court of Wisconsin in which the suit was brought held that the statute above quoted, of the State, and the agreement under it justified a denial of the petition to remove the case into the Circuit Court of the United States; and a trial having been had, gave judgment for the plaintiff on a verdict found in his favor. A similar view as to the effect of the statute of the State and the agreement under it, was taken by the Supreme Court of Wisconsin, and the judgment was there affirmed. Thereupon the insurance company brought the case here; and whether the statute and the agreement were sufficient to justify the refusal to remove the case was the point now presented for consideration.

The Constitution of the United States ordains as follows:

'This Constitution and the laws of the United States which shall be made in pursuance thereof. . . shall be the supreme law of the land; and the judges in every State shall be bound thereby; anything in the constitution or laws of any State to the contrary notwithstanding.

'The judicial power of the United States. . . shall extend to. . . controversies between citizens of different States.'

The case was twice argued.

Mr. J. W. Cary, in support of the judgment below:

That corporations created by the laws of one State have not the absolute right to recognition, and to do business in another State, is not a subject for argument; the question has been adjudicated by this court.

In the recent case of Paul v. Virginia, this court, speaking through Field, J., says:

'Having no absolute right of recognition in other States, but depending for such recognition and the enforcement of its contracts upon their assent, it follows, as a matter of course, that such assent may be granted upon such terms and conditions as those States may think proper to impose. They may exclude the foreign corporation entirely, they may restrict its business to particular localities, or they may exact such security for the performance of its contracts with their citizens as in their judgment will best promote the public interest.'

This case did but recognize what Taney, C. J., had expressed in behalf of the court in Bank of Augusta v. Earle, and what Curtis, J., said equally for it in The Lafayette Insurance Company v. French.