The mere construction by a state court of a statute of another
state and its operation elsewhere, without questioning its
validity, does not necessarily involve a federal question, or deny
to the statute the full faith and credit demanded by § 709,
Rev.Stat., in order to give this Court jurisdiction to review.
The statutes of New York and Pennsylvania prohibit foreign
corporations from doing business in those states respectively
unless certain specified conditions are complied with. In an action
in New Jersey, the state court held that contracts made in New York
and Pennsylvania by a corporation which had not complied with the
statutes of either state were not
ipso facto void, and
might be enforced in New Jersey. On writ of error,
held
that
The writ must be dismissed as the validity of the New York and
Pennsylvania statutes was not denied, but the case turned only upon
their construction and the effect to be given them in another
state.
Whether, aside from a federal question, the courts of one state
should have sustained the action upon principles of comity between
the states is a matter within the exclusive jurisdiction of the
state court.
This was a suit begun in the Supreme Court of New Jersey by the
Alleghany Company to recover the amount due upon a promissory note
dated at New York, July 16, 1900, given by the plaintiffs in error,
under the firm name of I.N.E. Allen & Co., for $1,989.54, upon
which payments amounting to $1,000 were indorsed. The declaration
was upon the common counts, but annexed was a copy of the note,
with a notice that the action was brought to recover the amount due
thereon. The defendants pleaded four several pleas:
1. General issue.
2. That the note was executed and delivered in the State of New
York to the plaintiff company, a business corporation created under
the laws of North Carolina. That, when said note was executed and
delivered, it was provided by the statute of the State of New York
that:
Page 196 U. S. 459
"No foreign corporation . . . shall do business in this state
without having first procured from the Secretary of State a
certificate that it has complied with all the requirements of law
to authorize it to do business in this state, and that the business
of the corporation to be carried on in this state is such as may be
lawfully carried on by a corporation incorporated under the laws of
this state. . . . No foreign stock corporation doing business in
this state shall maintain any action in this state upon any
contract made by it in this state unless, prior to the making of
such contract, it shall have procured such certificate."
The plea further averred that, at the time of the making of the
note, the plaintiff was a business stock corporation, foreign to
the State of New York, and had not theretofore procured from the
Secretary of State a certificate that it had complied with all the
requirements of the law to authorize it to do business within the
state, and that the business of said plaintiff was such as might be
lawfully carried on by a corporation incorporated under the laws of
said state for such or similar business, according to the form of
the statute of New York in such case made and provided.
3. The third plea sets out that the note was made and executed
in the State of Pennsylvania to the plaintiff company, a foreign
corporation created under the laws of North Carolina.
That, when said note was executed and delivered, it was provided
by the State of Pennsylvania that --
"1. No foreign corporation shall do any business in this
commonwealth until said corporation shall have established an
office or offices and appointed an agent or agents for the
transaction of its business therein. 2. It shall not be lawful for
any such corporation to do any business in this commonwealth until
it shall have filed in the office of the Secretary of the
Commonwealth a statement, under the seal of said corporation, and
signed by the president or secretary thereof, showing the title and
object of said corporation, the location of its office or offices,
and the name or names of its authorized
Page 196 U. S. 460
agent, or agents therein, and the certificate of the secretary
of the commonwealth, under the seal of the commonwealth, of the
filing of such statement, shall be preserved for public inspection
by each of said agents in each and every of said offices. 3. Any
person or persons, agents, officers, or employees of any such
foreign corporation who shall transact any business within this
commonwealth for any such foreign corporation without the
provisions of this act's being complied with shall be guilty of a
misdemeanor, and upon conviction thereof, shall be punished by
imprisonment not exceeding thirty days, and by a fine not exceeding
one thousand dollars, or either at the discretion of the court
trying the same."
The plea further averred that, at the making of the note, the
plaintiff was a corporation foreign to the said commonwealth, and
had not theretofore filed in the office of the secretary a
statement showing the title and object of said plaintiff, the
location of its office, and the name of its authorized agent
therein, according to the form of said statute; yet,
notwithstanding the premises, the plaintiff, at the time of the
making of the said note, did business in the said Commonwealth of
Pennsylvania contrary to the form of the said statute.
The plaintiff demurred to the second and third pleas, and, the
demurrer being overruled, the cause was sent down to the Circuit
Court of Hudson County for trial on an issue of fact raised by the
fourth plea, which is not material here.
The trial judge there directed a verdict for the plaintiff, and
upon appeal to the Court of Errors and Appeals of New Jersey, the
judgment of the lower court was affirmed. 69 N.J.L. 270.
Page 196 U. S. 462
MR. JUSTICE BROWN delivered the opinion of the Court.
The defendants, plaintiffs in error here, pleaded that the note
upon which suit was brought was executed in the State of New York,
and that, under laws of that state, no foreign corporation could do
business there without a certificate of the Secretary of State that
it had complied with all the requirements of law to authorize it to
do business there, and that no such corporation could maintain any
action in that state unless, prior to the making of such contract,
it had procured such certificate; that plaintiff was a foreign
corporation within the meaning of the law, and had not procured a
certificate.
The third plea was similar in terms, averring the note to have
been made in Pennsylvania, whose statutes provided that foreign
corporations should do no business in the state without filing a
certain statement in the secretary's office and procuring the
certificate of the Secretary of the Commonwealth, and further
providing that the agent of any foreign corporation transacting
business within the state without complying with the provisions of
the law should be deemed guilty of a misdemeanor. The plea also
averred noncompliance with those provisions.
Both the supreme court and the Court of Errors and Appeals held
that a contract made in contravention of these statutory
regulations, though not enforceable in the courts of
Page 196 U. S. 463
New York and Pennsylvania, was not
ipso facto void, and
might be, notwithstanding such statutes, enforced in New
Jersey.
Plaintiffs in error insist that, by this, ruling full faith and
credit was denied by the courts of New Jersey to the statutes of
New York and Pennsylvania, in contravention to § 1, Article IV, of
the Constitution.
By § 709 of the Revised Statutes, authorizing writs of error to
the state courts, it is declared that final judgments, where is
drawn in question the
validity of a statute of any state
or any authority exercised under any state on the ground of their
being repugnant to the Constitution, etc., and the decision is in
favor of their validity, may be reexamined here.
But the validity of these statutes was not denied. The case
turned upon their construction and the effect to be given to them
in another state. The New York statute directly, and the
Pennsylvania indirectly, forbade the maintenance of actions "in
this state." The Pennsylvania statute made it a misdemeanor to
transact business without complying with the law. Neither statute
declared the contract so made to be void, and it was apparently
upon this ground that the New Jersey courts held that the case did
not fall within those decisions wherein it is declared that a
contract void by the
lex loci contractus is void
everywhere.
In several cases, we have held that the construction of a
statute of another state, and its operation elsewhere, did not
necessarily involve a federal question. The case is practically
governed by that of the
Chicago & Alton R. Co. v. Wiggins
Ferry Co., 119 U. S. 615. In
that case, suit was brought in a state court by the ferry company
against the railroad to recover damages for not employing the ferry
company for the transportation of persons and property across the
river, as by its contract it was bound to do. The defendant pleaded
that it had no power to make the contract; that the same was in
violation of the laws of Illinois, contrary to the public
policy
Page 196 U. S. 464
thereof, and was void. The statutes were put in evidence, but
their construction and operative effect were disputed. The supreme
court of the state held that the contract was interpreted correctly
by the court below, and that it was not
ultra vires,
contrary to public policy, or in restraint of trade. It was argued
here by the railroad company that, by law and usage of Illinois,
the charter of the company in that state made the contract
ultra vires. We held that the law of Illinois to that
effect should have been proved as a fact either by decisions of its
courts or by law or usage in that state; that state courts are not
charged with a knowledge of the laws of another state, but they
have to be proved, and that, while federal courts exercising their
original jurisdiction are bound to take notice of the laws of the
several states, yet this Court, when exercising its appellate
jurisdiction from state courts, whatever was the matter of fact in
that court is matter of fact here, citing
Hanley v.
Donoghue, 116 U. S. 1. We
said:
"Whether the charter of this company, in its operation on the
contract now in suit, had any different effect in Illinois from
what it would have according to the principles of general law which
govern like charters and like contracts in Missouri and elsewhere
throughout the country was, under this rule, a question of fact in
the Missouri court as to which no testimony whatever was
offered."
No proof having been offered to support the averment that the
contract was in violation of the laws of Illinois, the defense
relying on the general claim that the contract was illegal, it was
held that no federal question was involved, and the case was
dismissed. It was said that it should have appeared on the face of
the record that the facts presented for adjudication made it
necessary for the court to consider the act of incorporation, in
view of the peculiar jurisprudence in Illinois, rather than the
general law of the land.
Since the above case, we have repeatedly held that the mere
construction by a state court of a statute of another state,
without questioning its validity, does not, with possibly some
Page 196 U. S. 465
exceptions, deny to it the full faith and credit demanded by the
statute in order to give this Court jurisdiction.
Glenn v.
Garth, 147 U. S. 360;
Lloyd v. Matthews, 155 U. S. 222;
Bankolzer v. New York Life Insurance Co., 178 U.
S. 402;
Johnson v. New York Life Insurance Co.,
187 U. S. 491;
Finney v. Guy, 189 U. S. 335.
The Court of Errors and Appeals, conceding the general rule both
in New Jersey and New York to be that a contract void by the law of
the state where made will not be enforced in the state of the
forum,
Columbia Fire Insurance Co. v. Kinyon, 37 N.J.L.
33, and
Hyde v. Goodnow, 3 N.Y. 266, held that the state
statute of New York did not declare the contract void, and that
there was no decision in that state holding it to be so. In fact,
the only case in the Court of Appeals in New York,
Neuchatel
Asphalt Co. v. New York, 155 N.Y. 373, is the other way. The
Court of Appeals in that case held that the purpose of the act was
not to avoid contracts, but to provide effective supervision and
control of the business carried on by foreign corporations; that no
penalty for noncompliance was provided, except the suspension of
civil remedies in that state, and none others would be implied.
This corresponds with our rulings upon similar questions.
Fritts v. Palmer, 132 U. S. 282.
With respect to the Pennsylvania statute, the court held that,
although the Pennsylvania courts had held that a contract made in
violation of the Pennsylvania statute was void, yet that the third
plea did not contain allegations which showed that the note was
given in pursuance of business carried on in Pennsylvania, and not
in consummation of a single transaction, and although it was
averred that plaintiff did business in that state, it was not
averred that the note had any connection with the business carried
on in Pennsylvania or that it was given for goods sold in
Pennsylvania. The admitted averments may be true and yet the note
may have been given for an obligation contracted out of the State
of Pennsylvania, and consequently, not in violation of its
laws.
Page 196 U. S. 466
Construing the third plea most strongly against the pleader, the
conclusion was that it disclosed no defense in the action. This was
purely a local question, and is not assignable as error here.
Whether, aside from the federal question discussed, the courts
of New Jersey should have sustained this action upon principles of
comity between the states was also a question within the exclusive
jurisdiction of the state court.
Finney v. Guy,
189 U. S. 335.
The writ of error must therefore be
Dismissed.
