2

courts with jurisdiction, which, in their turn, are viewed with no favor by the Federal judiciary who are the final arbiters of questions involving questions as to their own jurisdiction. Said MR. JUSTICE MILLER, in Trust Company v. Maquillan:' "The history of the State court decisions on the subject of the Federal jurisdiction, from the case of Cohens v. Virginia, shows that, if the State courts could have defined the limits of that jurisdiction, the fabric of Federal jurisprudence, as it exists to-day in this country, would have been shorn of its beauty and symmetry, and the system of its efficacy and usefulness." To go into the merits of this controversy between the courts of the two systems, would be foreign to the purposes of this book. It is noted at this place only by way of introduction to the discussion of certain legislation, as to the rights of foreign corporations, to which it has given rise, and of the decisions which have grown out of such legislation.

§ 326. Statutory Waiver of Right of Removal.View of the State Courts.-With the manifest purpose of protecting and preserving the jurisdiction of the State courts, statutes have been enacted from time to time designed to prevent foreign corporations, doing business within the State, when sued in the State courts on causes of action arising within the State, from exercising the right of removal to Federal courts. The validity of such statutes requiring foreign companies as a condition upon which they shall be admitted to do business in the State, to waive the right of removal, has generally been sus

13 Dill. 380.

26 Wheat. 264.

tained by the State courts, when uncontrolled by Federal decisions.' The principles upon which these cases proceed present strong arguments in favor of the correctness of the result reached. They hold that a foreign corporation is not, and cannot be, a citizen of the sovereignty creating it, except in a qualified sense and for jurisdictional purposes; that being an artificial person, created by a foreign sovereignty, it cannot demand admission into the territory of the State, nor claim any rights there, except in so far as permitted by the comity of States existing between that State and the State of its creation; that it is a matter solely within the legislative discretion whether that comity shall be modified, extended, or withdrawn altogether. There can be no question but that abundant authority for all of these propositions is to be found in the decisions of the Supreme Court of the United States,' and they are sustained by a practical unanimity of the previous cases in the State courts.' The conclusion, deduced from them, that the State may exercise a legislative discretion in prescribing the terms upon which the foreign company may be admitted to the State, would seem to be inevitable.

§ 327. Such Waiver Cannot be Required—View of Federal Courts.-The judgment of the Supreme Court of Wisconsin in Morse v. Home Insurance Co.,' cited above, was reviewed in the Supreme Court of

1 Glen Fall Ins. Co. v. Judge, 21 Mich. 577; Home Insurance Co. v. Davis, 29 Mich. 238. Morse v. Home Ins., 30 Wis. 496. See also State ex rel. v. Doyle, 40 Wis. 175.

2 Paul v. Virginia, 8 Wall. 168; Ducat v. Chicago, 10 Wall. 410; Lafayette Ins. Co. v. French, 18 How. 404; Bank of Augusta v. Earle, 13 Pet. 519.

3 Ante, §§ 1-4; 32-45; 293-299.

430 Wis. 496.

the United States on writ of error. That case arose under a State statute providing that any foreign insurance company, desiring to transact business in the 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 or Federal courts," and that it should not be lawful for any such company to do business in the State without first complying with the statute.' The decision of the Wisconsin court holding this to be a valid exercise of the legislative power to admit or exclude foreign corporations, was reversed by the Supreme Court of the United States on the grounds: 1. That the stipulation, without the support of the statute, was void and of no effect; that agreements in advance to oust the courts of the jurisdiction conferred by law are illegal and void;' and 2. That the stipulation could derive no support from the statute because the statute itself was void; that foreign corporations are citizens, within the judiciary acts; that State legislation cannot abridge or take away the right of removal, when sued in State courts, which is secured to such citizens by the constitution and laws of the United States; and that a statute passed in the attempt to accomplish that purpose must be held void.' The decision was by a divided court, the minority being MR. CHIEF JUSTICE WAITE, and MR. JUSTICE DAVIS.

1 Tayl. St. Wis. 958, § 222.

2 Citing Nute v. Hamilton Ins. Co., 6 Gray, 174; Cobb v. New England Marine Ins. Co., 6 Gray, 192; Hobbs v. Manhattan Ins. Co., 56 Me. 421; Stephenson v. P., F. & M. Ins. Co., 54 Me. 70; Scott v. Avery, 5 H. L. Cas. 811; Kill v. Hollister, 1 Wilson, 129; Thompson v. Charnock. 8 Durnf. & E. 139.

3 Insurance Co. v. Morse, 20 Wall. 445.

In an able dissenting opinion by the Chief Justice it is said: "A State has the right to exclude foreign insurance companies from the transaction of business within its jurisdiction. Such is the settled law of this court. 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 own citizens. That is no more than saying that the foreign company must, for the purposes of all litigation, growing out of 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."""

§ 328.

But Foreign Company's License may be Revoked. Subsequently the subject came again before the Supreme Court of Wisconsin upon an original proceeding for mandamus to compel the secretary of State to revoke the license of a foreign insurance company in accordance with the terms of another statute,' on the ground that it had made application for removal to the United States Circuit Court, of a suit which had been brought against it in the State court, in violation of its stipulation, made upon its application for license, in accordance with the statute. The court held that it was not concluded by the decision of the Federal Supreme

1 Citing Paul v. Virginia, 8 Wall. 181; Ducat v. Chicago, 10 Wall. 410; Bank of Augusta v. Earle, 13 Pet. 586.

2 Insurance Co, v. Morse, 20 Wall. 445, 458.

3 Laws Wis. 1872, ch. 64, § 1.

Court in Insurance Company v. Morse,' but that the only question really before the court in that case was as to the right of removal, in spite of the stipulation given by defendant company, and, consequently, as to whether the proceedings in the State court after the application for removal were to be regarded as coram non judice and void; whether the stipulation, as a stipulation, was inoperative and the jurisdiction of the State court was ousted by that of the Federal tribunal; and conceded that the decision of the Federal court was final on that question. It held that the State had the right to make such a stipulation, which though not binding in law must be taken to be binding in conscience and good morals—a condition upon which in the exercise of its sovereign authority it sees fit to license foreign corporations within its limits. Says the opinion, by RYAN, C. J.: "The statute extended to these foreign insurance companies the privilege of doing business in this State on equal footing with domestic companies. Experience showed their power to harass the citizens of the State, doing business with them, by removing actions on their policies from courts of the vicinage, to distant and expensive tribunals. Hence, the provisions of both statutes. And, conceding to the fullest extent the right of removal of actions commenced, we can see no pretense for questioning the power of the State, in the exercise of its absolute discretion on the sub

ject, to revoke the license of a company exercising the right. The State has power to make its voluntary license subject to forbearance of a right, and

120 Wall. 445.