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Vol. II.]

HOME INSURANCE Co. v. MORSE.

[No. 1.

citizens of other states, to wit, foreign corporations, that they shall not exercise that right, and prohibits them from transacting their business within that state, unless they first enter into an agreement in writing that they will not claim or exercise that right.

The Home Insurance Company is a citizen of New York, within this provision of the Constitution. As such citizen of another state, it sought to exercise this right to remove to a federal tribunal a suit commenced against itself in the state court of Wisconsin, where the amount involved exceeded the sum of $500. This right was denied to it by the state court on the ground that it had made the agreement referred to, and that the statute of the state authorized and required the making of the agreement.

We are not able to distinguish this agreement and this requisition, in principle, from a similar one made in the case of an individual citizen of New York. A corporation has the same right to the protection of the laws as a natural citizen, and the same right to appeal to all the courts of the country. The rights of an individual are not superior in this respect to that of a corporation.

The State of Wisconsin can regulate its own corporations and the affairs of its own citizens, in subordination, however, to the Constitution of the United States. The requirement of an agreement like this from their own corporations would be brutum fulmen, because they possess no such right under the Constitution of the United States. A foreign citizen, whether natural or corporate, in this respect possesses a right not pertaining to one of her own citizens. There must necessarily be a difference between the status of the two in this respect.

We do not consider the question whether the State of Wisconsin can entirely exclude such corporations from its limits, nor what reasonable terms they may impose as a condition of their transacting business within the state. These questions have been before the court in other cases, but they do not arise here. In Paul v. Virginia, 8 Wall. 168, Mr. Justice Field used language, in speaking of corporations, which has been supposed to sustain the statute in question. “Having,” he says, “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."

So in the Bank of Augusta v. Earle, 13 Peters, 519, the language of Chief Justice Taney has been invoked for the same purpose.

In each of these cases the general language of the learned justice is to be expounded with reference to the subject before him. They lay down principles in general terms which are to be understood only with reference to the facts in hand. Thus the case in which the opinion was delivered by Mr. Justice Field was one involving the construction of that clause of the United States Constitution which declares that “the citizens of each state shall be entitled to all the privileges and immunities of citizens in

HOME INSURANCE Co. v. MORSE.

Vol. II.)

(No. 1.

the several states," and of that clause regulating commerce among the states, not of the one now before us. It involved the question whether the state might require a foreign insurance company to take a license for the transaction of its business, giving security for the payment of its debts, and decided that taking insurance risks was not a transaction of commerce, within the meaning of the two clauses of the Constitution cited. It had no reference to the clause giving to the citizens of other states the right of litigation in the United States courts, and certainly had no bearing upon the right of corporations to resort to those courts, or the power of the state to limit and restrict such resort.

It was not intended to impair the force of the language used by Mr. Justice Curtis in the Lafayette Ins. Co. v. French, 18 How. 407, where he says : “A corporation created by Indiana can transact business in Ohio only with the consent, express or implied, of the latter state. 13 Peters, 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 and 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." Nearly the same language is used by Mr. Justice Nelson in Ducat v. The City of Chicago, 10 Wall. 400.

None of the cases so much as intimate that conditions may be imposed which are repugnant to the Constitution and 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 others.

The case of the Bank of Columbia v. Okely, 4 Wheat. 235, is relied upon by the court below to sustain the statute and the agreement in question. In that case it was provided in the fourteenth section of the charter of the bank that whenever a borrower of the bank should make his note by an agreement in writing negotiable at the bank and neglected its payment when due, the president of the bank should cause a demand in writing to be served upon the delinquent, and if the money was not paid within ten days after such demand, it was made lawful for the bank to present to the county clerk the note so unpaid, with proof of the demand, and to require him to issue an execution or attachment against the debtor. Before such execution could issue, the bank was required to file an affi. davit of the amount due on the note. “If the defendant shall dispute the whole or any part of the debt (the statute adds], on the return of the execution, the court shall order an issue to be joined and a trial to be had, and shall make such other proceedings that justice may be done in the speediest manner.” This statute was sustained in the case cited. Mr. Key, for the plaintiff, argued in its support on the theory that the whole effect of the provision was to authorize the commencement of a suit by attachment instead of the usual common law process. Mr. Jones, contra, contended that it was in violation of the provision of the Constitution of Maryland and of the United States, securing to parties the right of trial by jury, when the value in controversy exceeded $20. In rendering the decision the court says: “ This court would ponder long before it would

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Vol. II.]

HOME INSURANCE Co. v. MORSE.

(No. 1

sustain this action, if we could be persuaded that the act in question produced a total prostration of the trial by jury, or even involved the defendant in circumstances which rendered that right unavailing for his protection. . . . . If the defendant does not avail himself of the right given to him of having an issue made up and the trial by jury, which is tendered to him by the act, it is presumable that he cannot dispute the justice of the claim."

We are not able to discover in this case any countenance for the statute of Wisconsin which we are considering.

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.

We are of opinion, for the reasons given, that the Winnebago County court erred in proceeding in the case after the filing of the petition and the giving the security required by the act of 1789, and that all subsequent proceedings in the state court are illegal and should be vacated. The judgment in that court, and the judgment in the supreme court of Wisconsin, should be reversed, and the prayer of the petition for removal should be granted, and it is ordered accordingly.

Mr. Chief Justice WAITE dissenting. I cannot concur in the judgment which has just been announced. A state has the right to exclude foreign insurance companies from the transaction of business within its jurisdiction. Such is the settled law in this court. Paul v. Virginia, 8 Wal. 181; Ducat v. Chicago, 10 Ib. 410; Bank of Augusta v. Earle, 13 Peters, 519. The right to impose conditions upon admission follows, as a necessary consequence, from the right to exclude altogether. The State of Wisconsin has made it a condition of admission that the company shall submit to be sued in the courts she has provided for the settlement of the rights of her citizens. That is no more than saying that the foreign company must, for the purposes of all litigation growing out of the business transacted there, renounce its foreign citizenship and become pro tanto a citizen of that state. There is no hardship in this, for it imposes no greater burden than rests upon home companies and home insurers.

This insurance company accepted this condition, and was thus enabled to make the contract sued upon. Having received the benefits of its renunciation, the revocation comes too late.

The state court had jurisdiction to try the question of citizenship upon the petition to transfer. Upon the facts, I think it was authorized to find that the company was, for all the purposes of that action, a citizen of Wisconsin, and refuse the order of removal.

Mr. Justice DAVIS. I concur in this dissent.

oma thaw in this Bank of A admission to The

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Where a party purchased cotton of an agent of the government of the Confederate

States, without knowing to whom the cotton belonged, it was held that the sale was void on the ground of public policy, being, in contemplation of law, an act in aid of rebellion.

Mhis is an appeal fris claim to theandoned property

MR. JUSTICE MILLER delivered the opinion of the court.

This is an appeal from the judgment of the court of claims against the appellant, rejecting his claim to the proceeds of the sale of cotton under the act in regard to captured and abandoned property. That court made the following finding of facts and conclusions of law:

I. At different times during the years 1864 and 1865 large quantities of cotton were purchased by the agents of the Confederate States for the treasonable purpose of maintaining the war of the rebellion against the government of the United States. Of cotton thus purchased by various agents in Claiborne County, Mississippi, three hundred bales were sold to the claimant by one agent in March, 1865, for ten cents a pound, in the currency of the United States. The sale was made by the agent as of cotton belonging to the Confederate States, and it was understood by the claimant at the time of the purchase to be the property of the rebel government, and was purchased as such. The agent had been specially instructed by the Confederate government to sell any and all cotton he could for the purpose of raising money to purchase munitions of war and supplies for the Confederate army ;” but the purpose of the sale was not disclosed to the claimant, whose purpose was not to aid the Confederate States, buying the cotton at its market value, and regarding it as a mere business transaction of " cotton for cash.” The cotton was delivered to him at the time when the money was paid, he then being a resident of Claiborne County, within the Confederate lines.

II. The cotton was captured in May, 1865, and the proceeds or some portion thereof are in the treasury.

And the court of claims, upon the foregoing facts, decides as conclusions of law:

1. The government of the Confederate States was an unlawful assemblage without corporate power to take, hold, or convey a valid title to property, real or personal.

2. The claimant was chargeable with notice of the treasonable intent of the sale by the Confederate government, and the transaction was forbidden by the laws of the United States, and wholly void, so that the claimant acquired no title to the property which is the subject of suit.

We do not think it necessary to say anything in regard to the first proposition of law laid down by that court. Whether the temporary govVol. II.]

SPROTT v. UNITED STATES.

[No. 1.

ernment of the Confederate States had the capacity to take and hold title to real or personal property, and how far it is to be recognized as having been a de facto government, and if so, what consequences follow in regard to its transactions as they are to be viewed in a court of the United States, it will be time enough for us to decide when such decision becomes necessary. There is no such necessity in the present case. We rest our affirmance of the judgment of the court of claims upon its second proposition,

It is a fact so well known as to need no finding of the court to establish it, a fact which, like many other historical events, all courts take notice of, that cotton was the principal support of the rebellion, so far as pecuniary aid was necessary to its support. The Confederate government early adopted the policy of collecting large quantities of cotton under its control, either by exchanging its bonds for the cotton, or, when that failed, by forced contributions. So long as the imperfect blockade of the Southern ports and the unguarded condition of the Mexican frontier enabled them to export this cotton, they were well supplied in return with arms, ammunition, medicine, and the necessaries of life not grown within their lines, as well as with that other great sinew of war, gold. If the rebel government could freely have exchanged the cotton of which it was enabled to possess itself for the munitions of war or for gold, it seems very doubtful if it could have been suppressed. So when the rigor of the blockade prevented successful export of this cotton, their next resource was to sell it among their own people, or to such persons claiming outwardly to be loyal to the United States, as would buy of them for the money necessary to support the tottering fabric of rebellion which they called a government.

The cotton which is the subject of this controversy was of this class. It had been in the possession and under the control of the Confederate government, with claim of title. It was captured during the last days of the existence of that government by our forces, and sold by the officers appointed for that purpose, and the money deposited in the treasury.

The claimant now asserts a right to this money on the ground that he was the owner of the cotton when it was so captured. This claim of right or ownership he must prove in the court of claims. He attempts to do so by showing that he purchased it of the Confederate government, and paid them for it in money. In doing this he gave aid and assistance to the rebellion in the most efficient manner he possibly could. He could not have aided that cause more acceptably if he had entered its service and become a blockade-runner, or under the guise of a privateer had preyed upon the unoffending commerce of his country. It is asking too much of a court of law sitting under the authority of the government then struggling for existence against a treason, respectable only for the numbers and the force by which it was supported, to hold that one of its own citizens, owing and acknowledging its allegiance, can by the proof of such a transaction establish a title to the property so obtained. The proposition that there is in many cases a public policy which forbids courts of justice to allow any validity to contracts because of their tendency to affect injuriously the highest public interests, and to undermine or destroy the safeguards of the social fabric, is too well settled to admit of dispute. That any person owing allegiance to an organized government can make

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