1. The court reaffirms the decision in
Insurance
Company v. Morse, 20 Wall. 445, that an agreement
to abstain in all cases from resorting to the courts of the United
States is void as against public policy and that a statute of
Wisconsin requiring such an agreement is in conflict with the
Constitution of the United States.
2. A state has the right to impose conditions, not in conflict
with the Constitution or the laws of the United States, to the
transaction of business within its territory by an insurance
company chartered by another state or to exclude such company from
its territory, or, having given a license, to revoke it with or
without cause.,
3. The Legislature of Wisconsin enacted that if any foreign
insurance company transferred a suit brought against it from the
state courts to the federal courts, the secretary of state should
revoke and cancel its license to do business within the state. An
injunction to restrain him from so doing because such a transfer is
made cannot be sustained. The suggestion that the intent of the
legislature is to accomplish an illegal result, to-wit the
prevention of a resort to the federal courts, is not accurate. The
effect of this decision is that the company must forego such resort
or cease its business in the state. The latter result is here
accomplished.
4. As the state has the right to exclude such company, the means
by which she causes such exclusion or the motives of her action are
not the subject of judicial inquiry.
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
sec. 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
Page 94 U. S. 536
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.
Sec. 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."
Secs. 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
Page 94 U. S. 537
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."
"SEC. 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 offense 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."
MR. JUSTICE HUNT delivered the opinion of the Court.
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
Page 94 U. S. 538
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
87 U. S. 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
Page 94 U. S. 539
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 has 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 said:
"A corporation created by Indiana can transact business in Ohio
only with the consent, express or implied, of the latter state.
38
U. S. 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 defense.
"
Page 94 U. S. 540
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 insurance company,
for what causes or upon what grounds its action in that respect may
be based. No such question arose upon the facts or was argued by
counsel or referred to in the opinion of the Court.
The case now before us does present that point, and with
distinctness.
The complainant alleges that a license had been granted to the
Continental Insurance Company, upon its executing an agreement that
it would not remove any suit against it from the tribunal of the
state to the federal courts; that in the case of Drake it did, on
the tenth day of March, 1875, transfer his suit from the Winnebago
Circuit of the state to the circuit court of the United States;
that Drake thereupon demanded that the defendant, who is Secretary
of State of Wisconsin, should revoke and annul its license in
accordance with the provisions of the act of 1872; that it is
insisted that he has power to do so summarily, without notice or
trial; that the complainant is fearful that he will do so, and that
it will be done simply and only for the reason that the complainant
transferred to the federal court the case of Drake, as above set
forth.
The cases of
Bank of Augusta v. Earle, Ducat v. Chicago,
Paul v. Virginia, and
Lafayette Insurance Co. v.
French establish the principle that a state may impose upon a
foreign corporation, as a condition of coming into or doing
business within its territory, any terms, conditions, and
restrictions it may think proper that are not repugnant to the
Constitution or laws of the United States. The point is elaborated
at great length by Chief Justice Taney in the case first named, any
by MR. JUSTICE FIELD in the case last named.
The correlative power to revoke or recall a permission is a
necessary consequence of the main power. A mere license by a state
is always revocable.
Rector v.
Philadelphia, 24 How. 300;
People v.
Roper, 55 N.Y. 629;
People v. Commissioners, 47 N.Y.
50. The power to revoke can only be restrained, if at all, by an
explicit contract upon good consideration to that effect.
Humphrey v.
Pegues, 16 Wall. 244;
Tomlinson
v. Jessup, 15 Wall. 454.
Page 94 U. S. 541
A license to a foreign corporation to enter a state does not
involve a permanent right to remain, subject to the laws and
Constitution of the United States. Full power and control over its
territories, its citizens, and its business belong to the
state.
If the state has the power to do an act, its intention or the
reason by which it is influenced in doing it cannot be inquired
into. Thus, the pleading before us alleges that the permission of
the Continental Insurance Company to transact its business in
Wisconsin is about to be revoked for the reason that it removed the
case of Drake from the state to the federal courts.
If the act of an individual is within the terms of the law,
whatever may be the reason which governs him or whatever may be the
result, it cannot be impeached. The acts of a state are subject to
still less inquiry, either as to the act itself or as to the reason
for it. The State of Wisconsin, except so far as its connection
with the Constitution and laws of the United States alters its
position, is a sovereign state possessing all the powers of the
most absolute government in the world.
The argument that the revocation in question is made for an
unconstitutional reason cannot be sustained. The suggestion
confounds an act with an emotion or a mental proceeding, which is
not the subject of inquiry in determining the validity of a
statute. An unconstitutional reason or intention is an
impracticable suggestion which cannot be applied to the affairs of
life. If the act done by the state is legal, is not in violation of
the Constitution or laws of the United States, it is quite out of
the power of any court to inquire what was the intention of those
who enacted the law.
In all the cases where the litigation of a state has been
declared void, such legislation has been based upon an act or a
fact which was itself illegal. Thus, in
Crandall v.
Nevada, 6 Wall. 35, a tax was imposed and collected
upon passengers in railroad and stage companies.
In
Almy v. State of
California, 24 How. 169, a stamp duty was imposed
by the legislature upon bills of lading, for gold or silver
transported from that state to any port or place out of the
state.
Page 94 U. S. 542
In
Brown v. State of
Maryland, 12 Wheat. 419, a license, at an expense
of $50, was required before an importer of goods could sell the
same by the bale, package, or barrel.
In
Henderson v. Mayor of New York, 92 U.
S. 265, the statute required the master to give a bond
of $300 for each passenger, conditioned that he should not become a
public charge within four years, or to pay the sum of $1.50.
In the
Passengers'
Case, 7 How. 572, the requirement was of a like
character.
In all these cases it was the act or fact complained of that was
the subject of judicial injury, and upon the act was the judgment
pronounced.
The statute of Wisconsin declares that if a foreign insurance
company shall remove any case from its state court into the federal
courts contrary to the provisions of the act of 1870, it shall be
the duty of the secretary of state immediately to cancel its
license to do business within the state. If the state has the power
to cancel the license, it has the power to judge of the cases in
which the cancellation shall be made. It has the power to determine
for what causes and in what manner the revocation shall be
made.
It is said that we thus indirectly sanction what we condemn when
presented directly, to-wit that we enable the State of Wisconsin to
enforce an agreement to abstain from the federal courts. This is an
"inexact statement." The effect of our decision in this respect is
that the state may compel the foreign company to abstain from the
federal courts or to cease to do business in the state. It gives
the company the option. This is justifiable because the complainant
has no constitutional right to do business in that state; that
state has authority at any time to declare that it shall not
transact business there. This is the whole point of the case, and
without reference to the injustice, the prejudice, or the wrong
that is alleged to exist, must determine the question. No right of
the complainant under the laws of Constitution of the United States
by its exclusion from the state is infringed, and this is what the
state now accomplishes. There is nothing, therefore, that will
justify the interference of this Court.
Decree reversed, and cause remanded with instructions to
dismiss the bill.
Page 94 U. S. 543
MR. JUSTICE BRADLEY, with whom concurred MR. JUSTICE SWAYNE and
MR. JUSTICE MILLER, dissenting.
I feel obliged to dissent from the judgment of the Court in this
case.
The following is a brief statement of the reasons for my
opinion:
Though a state may have the power, if it sees fit to subject its
citizens to the inconvenience, of prohibiting all foreign
corporations from transacting business within its jurisdiction, it
has no power to impose unconstitutional conditions upon their doing
so. Total prohibition may produce suffering and may manifest a
spirit of unfriendliness towards sister states, but prohibition,
except upon conditions derogatory to the jurisdiction and
sovereignty of the United States, is mischievous and productive of
hostility and disloyalty to the general government. If a state is
unwise enough to legislate the one, it has no constitutional power
to legislate the other. The citizens of the United States, whether
as individuals or associations, corporate or incorporate, have a
constitutional right in proper cases to resort to the courts of the
United States. Any agreement, stipulation, or state law precluding
them from this right is absolutely void -- just as void as would be
an agreement not to resort to the state courts for redress of
wrongs, or defense of unjust actions, or as would be a city
ordinance prohibiting an appeal to the state courts from municipal
prosecutions.
The questions arising upon these Wisconsin laws have already
been considered by this Court in the case of
Insurance Company
v. Morse, and we held and adjudged that the agreement which
the company was compelled to make not to remove a suit into the
federal courts was absolutely void. In principle, this case does
not differ a particle from that. The state legislation of 1872,
under which and in obedience to which the license of the appellees
is threatened to be revoked is just as unconstitutional and just as
void as the agreement was in the former case.
The argument used -- that the greater always includes the less,
and therefore if the state may exclude the appellees without any
cause, it may exclude them for a bad cause -- is not
Page 94 U. S. 544
sound. It is just as unsound as it would be for me to say that
because I may without cause refuse to receive a man as my tenant,
therefore I may make it a condition of his tenancy that he shall
take the life of my enemy or rob my neighbor of his property.
The conditions of society and the modes of doing business in
this country are such that a large part of its transactions is
conducted through the agency of corporations. This is especially
true with regard to the business of banking, insurance, and
transportation. Individuals cannot safely engage in enterprises of
this sort, requiring large capital. They can only be successfully
carried out by corporations, in which individuals may safely join
their small contributions without endangering their entire
fortunes. To shut these institutions out of neighboring states
would not only cripple their energies, but would deprive the people
of these states of the benefits of heir enterprise. The business of
insurance particularly can only be carried on with entire safety by
scattering the risks over large areas of territory, so as to secure
the benefits of the most extended average. The needs of the country
require that corporations -- at least those of a commercial or
financial character -- should be able to transact business in
different states. If these states can, at will, deprive them of the
right to resort to the courts of the United States, then in large
portions of the country the government and laws of the United
States may be nullified and rendered inoperative with regard to a
large class of transactions constitutionally belonging to their
jurisdiction.
The whole thing, however free from intentional disloyalty, is
derogatory to that mutual comity and respect which ought to prevail
between the state and general governments, and ought to meet the
condemnation of the courts whenever brought within their proper
cognizance.
In my judgment, the decree for injunction ought to be
affirmed.
