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DOYLE v. CONTINENTAL INSURANCE COMPANY.

October 1, 1876

DOYLE
v.
CONTINENTAL INSURANCE COMPANY.



APPEAL from the Circuit Court of the United States for the Western District of Wisconsin. The bill of complaint alleges that the complainant, the Continental Insurance Company of the city of New York, is a corporation organized and existing under the laws of the State of Connecticut, and a citizen of that State. That prior to the passage of the act of the legislature of the State of Wisconsin, entitled 'An Act to provide for the incorporation and government of fire and inland navigation insurance companies,' approved March 4, 1870, the complainant had established agencies, opened offices, and made considerable expenditures of money in advertising the business of insurance against loss by fire in the State of Wisconsin. That soon after the passage of said act complainant complied with the provisions of sect. 22 thereof, and procured from the State treasurer and secretary of State the certificates and license to do business in said State as therein provided, and did subsequently fully comply with said act; but that, upon filing appointment of an agent upon whom process of law could be served, complainant was compelled to add an agreement, on its part, not to remove into the Federal courts suits brought against it in the State courts, which agreement to that effect was made. That after the decision of this court in Insurance Company v. Paige, 20 Wall. 445, the complainant removed a suit brought on one of its policies against it in the State court, into the Federal court. That because of such removal a demand was made upon the defendant, Peter Doyle, as secretary of State, to revoke the certificate or license authorizing the complainant to do business in said State of Wisconsin. That complainant had a large number of agencies in the State engaged in the conduct of its business, and a revocation of its license would work great and irreparable injury to the complainant in its business in said State, and the complainant feared that said defendant would revoke said license, unless restrained by injunction. A temporary injunction was issued restraining the defendant from revoking the license of the complainant, because of the removal of said suit from the State to the Federal court. A demurrer to the bill was overruled, and a decree entered making the injunction perpetual. From this decree the defendant appealed. Sect. 22, c. 56, Laws of Wisconsin, 1870, provides as follows:–– 'That any fire insurance company, association, or partnership, incorporated by or organized under the laws of any other State of the United States, 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 in the United States Circuit 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.' Sects. 1 and 3, c. 64, are in the following words:–– 'SECTION 1. If any insurance company or association shall make application to change the venue, or remove any suit or action heretofore commenced, or which shall be hereafter commenced, in any court of the State of Wisconsin, to the United States Circuit or District Court, or to the Federal court, contrary to the provisions of any law of the State of Wisconsin, or contrary to any agreement it has made and filed, or may make and file, as provided and required by section number twenty-two of chapter fifty-six of the General Laws of Wisconsin for the year A.D. 1870, or any provision of law now in force in said State, or may hereafter be enacted therein, it shall be the imperative duty of the secretary of State, or other proper State officer, to revoke and recall any authority or license to such company to do and transact any business in the State of Wisconsin, and no renewal or new license or certificate shall be granted to such company for three years after such revocation, and such company shall thereafter be prohibited from transacting any business in the State of Wisconsin until again duly licensed.' 'SECT. 3. If any insurance company or association shall make application to remove any case from the State court into the United States Circuit or District Court or Federal court, contrary to the provisions of chapter fifty-six of the General Laws of Wisconsin for the year A.D. 1870, or any other State law, or contrary to any agreement which such company may have filed in pursuance of said chapter fifty-six of the General Laws of Wisconsin for the year A.D. 1870, or any other law of the State of Wisconsin, it shall be liable, in addition, to a penalty of not less than $100 or more than $500 for each application so made, or for each offence so committed for making such application, the same to be recovered by suit in the name of the State of Wisconsin; and it shall be the imperative duty of the attorney-general of the State of Wisconsin to see and attend that all of the provisions of said chapter fifty-six of the General Laws of 1870, and the provisions of this act, are duly enforced.'

The opinion of the court was delivered by: Mr. Justice Hunt delivered the opinion of the court.

Mr. George B. Smith for the appellant.

Mr. William Allen Butler, Mr. B. J. Stevens, and Mr. I. C. Sloan, for the appellee.

The case of Insurance Company v. Morse, 20 Wall. 445, is the basis of the bill of complaint in the present suit. We have carefully reviewed our decision in that case, and are satisfied with it. In that case, an agreement not to remove any suit brought against it in the State courts of Wisconsin into the Federal courts had been made by the company, in compliance with the Wisconsin statute of 1870. The company, nevertheless, did take all the steps required by the United States statute of 1789 to remove its suit with Morse from the State court into the Federal courts. Disregarding that action, the Supreme Court of Wisconsin allowed the action in the State court to proceed to judgment against the company, as if no transfer had been made. When the judgment thus obtained was brought into this court, we held it to be illegally obtained, and reversed it. It was held, first, upon the general principles of law, that although an individual may lawfully omit to exercise his right to transfer a particular case from the State courts to the Federal courts, and may do this as often as he thinks fit in each recurring case, he cannot bind himself in advance by an agreement which may be specifically enforced thus to forfeit his rights. This was upon the principle that every man is entitled to resort to all the courts of the country, to invoke the protection which all the laws and all the courts may afford him, and that he cannot barter away his life, his freedom, or his constitutional rights.

As to the effect of the statutory requirement of the agreement, the opinion, at page 458 of the case as reported, is in these words:––

'On this branch of the case the conclusion is this:––

'1st, The Constitution of the United States secures to citizens of another State than that in which suit is brought an absolute right to remove their cases into the Federal court, upon compliance with the terms of the act of 1789.

'2d, The statute of Wisconsin is an obstruction to this right, is repugnant to the Constitution of the United States and the laws in pursuance thereof, and is illegal and void.

'3d, The agreement of the insurance company derives no support from an unconstitutional statute, and is void, as it would be had no such statute been passed.'

The opinion of a court must always be read in connection with the facts upon which it is based. Thus, the second conclusion above recited, that the statute of Wisconsin is repugnant to the Constitution of the United States and is illegal and void, must be understood as spoken of the provision of the statute under review; to wit, that portion thereof requiring a stipulation not to transfer causes to the courts of the United States. The decision was upon that portion of the statute only, and other portions thereof, when they are presented, must be judged of upon their merits.

We have not decided that the State of Wisconsin ha not the power to impose terms and conditions as preliminary to the right of an insurance company to appoint agents, keep offices, and issue policies in that State. On the contrary, the case of Paul v. Virginia, 8 Wall. 168, where it is held that such conditions may be imposed, was cited with approval in Insurance Company v. Morse. That case arose upon a statute of Virginia, providing that no foreign insurance company should transact business within that State until it had taken out a license, and had made a deposit with the State treasurer of bonds varying in amount from $30,000 to $50,000, according to the amount of its capital. This court sustained the power of the legislature to impose such conditions, and sustained the judgment of the State court, convicting Paul upon an indictment for violating the State law, in issuing policies without having first complied with the conditions required.

Ducat v. Chicago, 10 Wall. 410, decided that the statute of the State of Illinois, requiring a license to be taken out by foreign insurance companies, for which six dollars each should be paid, and the filing of an appointment of an attorney, with power to accept service of process, was a legal condition; and a requirement, that, when such company was located in the city of Chicago, it should also pay to the treasurer of that city two dollars upon the one hundred dollars upon the amount of all premiums received, was held to be legal.

In Lafayette Insurance Co. v. French, 18 How. 404, the court say:––

'A corporation created by Indiana can transact business in Ohio only with the consent, express or implied, of the latter State. 13 Pet. 519. This consent may be accompanied by such conditions as Ohio may think fit to impose; and these conditions must be deemed valid and effectual by other States and by this court, provided they are not repugnant to the Constitution or laws of the United States, or inconsistent with those rules of public law which secure the jurisdiction and authority of each State from encroachment by all others, or that principle of natural justice which forbids condemnation without opportunity for defence.' Neither did Insurance Company v. Morse, supra, undertake to decide what are the powers of the State of Wisconsin, in revoking a license previously granted to an ...


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