
    The New York Life Insurance Company v. Fannie A. Best et al.
    1. Section 18 of the act of April 27, 1872 (69 Ohio L. 155), by which incor porated life insurance companies of other states are allowed to trans act business in this state only on condition that they become, so far a; remedies are sought against them here, subject to the exclusive jurisdiction of the courts of this state, is not, in the particular named, in violation of the seventh clause of section 2 of article 3 of the constitution of the United States, which provides that the judicial power of the United States shall extend to controversies between citizens of different states.
    2. Such companies complying with the requirements of the statute referred to, and doing business in this state under licenses thus obtained, become, in suits brought against them here, personally amenable to the jurisdiction of the courts of this state, and are to be treated, for purposes of suit, as corporations of this state.
    Petition in error to reverse a judgment of the Superior Court of Cincinnati.
    The action in the Superior Court was brought by the defendants in error to recover $5,000 upon a policy of insurance issued by plaintiff in error upon the life of George Best, for the benefit of defendants in error, who are his widow and children. The policy was issued at Cincinnati, Ohio, April 19, 1867. The assured died June 10, 1871, and the suit was commenced April 9, 1872.
    The plaintiff in error entered its appearance in the case May 6, 1872, by filing a petition in due form, alleging that it was a corporation of the State of New York, and a citizen of that state; that the defendants in error were citizens, of the State of Ohio, and praying for the removal of the ease to the Circuit Court of the United States for the Southern District of Ohio. The petition was submitted to the court, and in connection with it an agreed statement, of which the following is a copy:
    “It is agreed between the parties to the action that the petition and motion, made by the defendants in this action, are to be considered by the court in view of the following state of facts: That when the application was made and the policy issued in this case, the insured and her husband were, and the plaintiffs now are, citizens and residents of the State of Ohio, where the defendant was then, through its agents, carrying on business, it being a foreign corporation created by the laws of the State of New York. .That the defendant was, at the time of filing the petition in this case, and is now, through agents duly appointed by it, engaged in carrying on the business of life insurance in the-city of Cincinnati, Ohio. That since the filing of the petition and motion to. remove this cause to the Circuit Court of the United States for the Southern District of Ohio, in compliance with the provisions of the acts passed'by the general assembly of the State of Ohio, April 10 and 27, 1872, the defendant, for the purpose of obtaining a license to carry on business in Ohio, has filed, in the office of the-auditor of state, with the superintendent of insurance, a. written instrument and statement, duly signed and sealed, waiving all claim or right to transfer or remove any cause then or thereafter pending in any of the courts in this state, wherein said company may be a party, to any of the courts of the United States, and which is in the words and figures-following, to wit:
    
      “Know all men by these presents:
    
    “That the New York Life Insurance Company, located at New York,,in the State of New York, does hereby agree to waive all right to transfer or remove any cause, now or hereafter pending in any of the courts of the State of Ohio,. wherein said company is or may be a party, to any of the courts of the United States.
    “ This waiver is executed in compliance with the laws-of the State of Ohio, but under compulsion, under protest against the unconstitutionality of such laws, and denying-the legal validity and binding effect of such waiver, and reserving the right to test the validity of the law.
    “Witness our hands, and seal of the company, this 30th-day of May, 1872.
    “Morris Franklin,
    
      “President.
    
    [seal.] “Wm. Barton,
    
      “Chairman of Finance Committee."
    
    “It is further agreed that by the prosecution of the motion and petition to remove, the defendant'does not wish to-be understood as withdrawing its said waiver, or desiring to release itself from any of the obligations imposed on it by reason of the same pits object being simply to test the' power of the legislature to impose such obligation on it,, and to assert its right to remove said cause notwithstanding-the filing of said waiver. This agreement is to be filed and made a part of the record in said cause.
    “Sage & Hinkle,
    
      For Defendants.
    
    “John C. IIealy,
    
      Attorney for Plaintiffs."
    
    The question thus presented was reserved to the general term of the Superior Court for. decision, and being there-heard, the petition for the removal of the case to the Circuit Court was dismissed, and the case remanded for trial. This ruling of the court is assigned for error, and presents the only question made in the case.
    
      Sage & Hinkle, for plaintiff in error:
    I. A corporation has, equally with a citizen, the right to litigate in -the courts of the United States. Hope Ins. Co. v. Boardman, 5 Cranch, 57; Bank of United States v. 
      
      Deveaux, Ib. 61; Louisville R. R. Co. v. Letson, 2 How. 497; Marshall v. B. & O. R. R. Co., 16 How. 314; Lafayette Ins. Co. v. French, 18 How. 404; O. & M. R. R. Co. v. Wheeler, 1 Black, 286; Cowles v. Mercer Co., 7 Wal. 118; Express Co. v. Kountze Bros., 8 Wall. 342; Shelby v. Hoffman, 7 Ohio St. 450.
    The citizenship of a corporation is not changed or extended by the residence of its officers or agents in other states, or by extending its business into other states. Danforth v. Perry, 3 Met. 564; Knorr v. Home Ins. Co., 25 Wis. 143; Merritt v. Van Santvoord, 34 N. Y. 218; Hatch v. C., R. I. & P. R. R. Co., 6 Blatchf. 105.
    II. This right can not be affected by state legislation. Constitution United States, art. 3, secs. 1, 2 — art. 10; Livingston v. Jefferson, 1 Brock. Marsh. 203; The St. Lawrence, 1 Black, 522; The Moses Taylor, 4 Wal. 411; Whiton v. Ch. & N. W. R’y Co., 25 Wis. 424; Allen v. Allen’s Ex’r, 3 Wall., Jr. 248. See also Hatch v. Chicago, etc., R. R. Co., 6 Blatchf. 105; Fisk v. Union Pacific R. R. Co., Ib. 362; Hobbs v. Manhattan Ins. Co., 56 Maine, 417; Morton v. Mutual Ins. Co., 105 Mass. 141; Herryford v. Etna Ins. Co., 42 Mo. 148.
    Every judiciary act contains provisions for removal to the United States courts, if the suit bo commenced in any state court by a citizen of the state in which the suit is brought, against a citizen of another state. Act of September 24, 1789, sec. 12, 1 Stat. at Large, 79; act of July 12, 1866, 14 Ib. 306; act of March 2, 1867, 14 Ib. 558.
    III. State legislation, requiring corporations transacting Business in the state, and chartered by other states, to waive the right to litigate in the courts of the United States, is unconstitutional and void, and the waiver can not be enforced.
    As to all matters of contract, and the transaction of business. a corporation is subject to the legislation of any state to which it migrates, for the reason, that in these regards 'it is not a citizen ; but as to all matters of litigation it has the rights of citizenship, and therefore can not be interfered with by state legislation. This distinction is clearly recognized by the decided cases. Bank of Augusta v. Earle, 13 Peters, 519. Here the distinction is clearly stated; but,, as we have already seen, when the contract, having been made, becomes the basis of an action and the corporation a litigant, it is invested, in that capacity, with all the rights-of citizenship. Does it not necessarily fallow, that it can. not, any more than a citizen, be compelled by state legislation to yield, or “ waive” a right secured by the constitution and the laws of the United States ? Has the state any power whatever over the matter ? See Field, J., in Paul v. Virginia, 8 Wal. 168; Liverpool Ins. Co. v. Massachusetts, 10 Wal. 566; Lafayette Ins. Co. v. French, 18 How. 404.
    Again, the provisions of the judiciary acts of Congress, for removal of causes from state to federal courts, are mandatory on the state courts; and when, as in this ease, the defendant complies strictly with the act, the state court, has no further jurisdiction to proceed in the cause. Gordon v. Langest, 16 Pet. 97; Stevens v. Phoenix Ins. Co., 41 N. Y. 149; 16 Pet. 97; Shelby v. Hoffman, 7 Ohio St. 450.
    And now as to the force and effect of the “ waiver,” as a stipulation, or voluntary relinquishment of the right to litigate in the courts of "the United States. "What right has-the State of Ohio to become a party to the “ waiver,” considered as- a stipulation or matter of contract? The state-was not organized for any such purpose. The conduct of the business transactions of her citizens is not an attribute of her sovereignty. She speaks by law, not by contract, If her enactments are invalid as laws, they are of no value as contracts. If this waiver is not good as a condition imposed by legislation, it is not good at all. The plaintiffs in this action were not parties to it. No consideration moved from them to obtain it. They can not plead it, nor claim any advantage from it unless they can sustain it by showing that the statute requiring it is constitutional and valid. As an agreement merely, it can have no force or effect. See Pearsall v. Dwight, 2 Mass. 89; Hill v. Hollister, 1 Wils. 129. Thompson v. Carnoch, 8 Term, 139; Mitchell v. Harris, 
      2 Ves. Jr., Amer. ed. 129, and cases cited; Scott v. Avery, 8 Exch. 487, 500; Conner v. Drake, 1 Ohio St. 166; 2 Parsons on Cont. 707, and cases cited; Nute v. Hamilton Mut. Ins. Co., 6 Gray, 174. See also Amesburg v. Bowditch Mut. F. Ins. Co., 6 Gray, 596.
    Moreover, when this action was brought there was no law in Ohio requiring any such waiver, and the policy sued on was issued more than five years before the passage of the statute under which it was demanded. The defendant was in the State of Ohio, so far as this case w&s concerned, only to litigate, and it had the constitutional light of a citizen to be here as a litigant, and to demand that the litigation should be conducted in the courts of the United States. We insist that the “ waiver,” filed under protest, exacted, under penalty of being shut out from the transaction of a business extending back over many years, and built up within the state, by the consent of the state, is of no validity.
    
      John C. Healy, for defendant in error:
    1. A corporation is an artificial being, and where the 'law of the sovereignty which created it ceases to be obligatory, it can have no existence, except such existence be recognized by the comity of another state, but it has no absolute right of recognition whatever. Bank of Augusta v. Earle, 13 Peters, 519; Lafayette Ins. Co. v. French, 18 How. 404; Covington Draw-brdige Co. v. Sheppard, 20 How. 227; O. & M. R. R. Co. v. Wheeler, 1 Black, 295; Paul v. Virginia, 8 Wallace, 168.
    It follows, then, that a foreign corporation comes into the State of Ohio to do business with its citizens, only with the consent of the state, and that consent it may withhold altogether, or it may impose such conditions or restrictions which may appear to it reasonable to preserve and secure its citizens from imposition and fraud. The Lafayette Ins. Co. v. French, 18 How. 404; Paul v. Virginia, 8 Wallace, 168.
    2. The right of removal, like any other legal right, can be waived, either by failure to take advantage of it, or by express agreement. Heighway v. Pendleton, 15 Ohio, 753; 16 Ohio, 29; 15 Ohio St. 159; Wilcox v. May, 19 Ohio, 410; Heath v. Tyson, Wright, 442; Nate v. Hamilton Mut. Ins. Co., 6 Gray, 174.
    3. The plaintiff in error, having accepted the provisions of the law, and enjoyed the benefits and privileges to which it would not otherwise have been entitled by virtue of such acceptance, is estopped from denying its constitutionality. Ferguson v. Landrum & Co., 5 Bush, 230; 4 Kent, 261; 3 Hill, 219; Moran v. Comm’rs of Miami Co., 2 Black. 722.
   Stone, J.

Of the statutes referred to in the agreed statement, the earlier one, that of April 10, 1872, is an amendment of section 20 of the act of April 16, 1867. S. & S. 218. The act of April 27, 1872 (69 Ohio L. 155), repealed the act of April 16, 1867; but the repeal does not seem to have included the twentieth section as amended by the first-named act. As, however’, these two statutes are, so far as they affect the question here arising, of substantially the same-import, the provisions of the later one, only, need to be specially considered. By section 18 of this act it is made unlawful for any life insurance company, organized by or under the laws of any other state of the United States, to transact any business of insurance within this state without first procuring from the superintendent of insurance'a certificate of authority so to do, and unlawful for any person to act within this state as the agent of such company in the business of insurance without first procuring from the superintendent a license for that purpose. It provides that no such certificate or license shall be issued until certain conditions are complied with by the company seeking to obtain such authority. Among these are, that certain securities be deposited for the protection of policy-holders; that it authorize its agents to accept service of process in the counties in which they may be authorized to act, and consent that service upon such agent shall be a valid service upon the company; and that such company file with the superintendent of insurance a written, instrument, duly signed and sealed, “ waiving all claim or right to transfer or remove any cause, then or thereafter pending in any of the , courts of this state wherein such company may be a party, to any of the courts of the United States.”

It is important to notice that the cases referred to in this-statute are not those of which the federal courts have exclusive jurisdiction. They are cases which, with respect to the subject matter and the character of the questions involved, fall within the exclusive jurisdiction of the state-courts, and of which the federal courts have jurisdiction, if at all, only by reason of the fact that the parties litigant are citizens of different states.

The right, upon this ground, to remove cases commenced in the state courts to the courts of the United States for trial and final adjudication, is one which the party entitled to may' exercise or not, at his option. It is a right, therefore, which may be waived, or may be lost by neglect; and we see no reason why a party entitled to it may not, upon sufficient consideration, waive it in advance, or be, in a proper case, estopped from asserting it. Bank of Columbia v. Okely, 4 Wheat. 235; Ladd v. Hildebrant, 27 Wis. 135; Phyfe v. Eimer, 45 N. Y. 102.

But it is evident that the question here involved does not depend upon the validity or effect of the instrument, filed with the superintendent of insurance, considered merely as a covenant to waive the exercise of the alleged right.

The statute prescribes the conditions upon which the-corporations referred to are permitted to do business in Ohio, and its force and effect is to subject the companies-accepting the conditions to the jurisdiction of the courts of the state; thus placing them, for purposes of suit, upon the footing of domestic corporations. The instrument referred to is to be executed and filed as evidence that they' accept the condition to which it relates, and bring themselves voluntarily 'within the operation of the statute.

Upon acceptance of this, and the other prescribed conditions, such corporations become entitled to prosecute-their business in this state — a right which could not be conferred by the law of their creation, and to which, as corporations of other states, they could make no claim. In case they fail to comply with the prescribed conditions, they are forbidden to transact any business of insurance in this state. The right of the state thus wholly to exclude-them is well settled, and is not denied. Paul v. Virginia, 8 Wal. 168.

Having, as corporations of other states, no power to do any corporate act in this state without its consent, express- or implied, it follows that such consent may be conditional, and that, with respect to the business transacted here, the-conditions may be such as the legislature may, in their discretion, prescribe. The true doctrine upon this subject is well stated in Paul v. Virginia, supra. Mr. Justice Field,, delivering the opinion of the court in that case, says:

“ Having 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 thé 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. The whole matter rests in their discretion.”

In Lafayette Ins. Co. v. French, 18 How. 404, it was decided by the same court that when a corporation of the State of Indiana was allowed by a statute of this state to trausact business here, upon condition that in suits upon contracts made here, service upon its agent in this state should be good service upon the company itself; a judgment obtained in a court of this state by means of such service-was a valid judgment in personam against the corporation— as valid as if the corporation had had its habitat in this state.

In this case, the plaintiff in error having complied with the requirements of the statute in question, prosecutes its corporate business here with the assent of the state, and subject to the conditions upon which that assent is given. For the purpose of availing itself of the license thus conditionally granted, it brings itself voluntarily within the operations of the statute, and under its provisions is to be regarded and treated, for purposes of suit, as a corporation of this state. Glen Falls Ins. Co. v. The Judges, etc., 21 Mich. 577.

We think the ruling of the Superior Court was right, and its judgment is affirmed.  