Insurance Company v. Morse - 87 U.S. 445 (1874)
U.S. Supreme Court
Insurance Company v. Morse, 87 U.S. 20 Wall. 445 445 (1874)
Insurance Company v. Morse
87 U.S. (20 Wall.) 445
1. 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 twelfth section of the Judiciary Act.
2. The obstruction to this right imposed by a statute of a state, which enacts
"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 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."
is repugnant to the Constitution of the United States and the laws in pursuance thereof, and is illegal and void.
3. The agreement of the insurance company, filed in pursuance of the act, derives no support from a statute thus unconstitutional, and is as void as it would be had no such statute been passed.
A statute of Wisconsin passed in 1870 [Footnote 1] 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. [Footnote 2] 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.