Detreville v. McMahan, Ins. Com. ( 1926 )

October 30, 1926. The opinion of the Court was delivered by This is a petition in the original jurisdiction of the Court for a writ of mandamus requiring the insurance commissioner to revoke the license of the Prudential Insurance Company to do business in this State, upon the ground that the insurance company has removed a case brought against it by the petitioner, DeTreville, to the United States District Court, on the ground of diverse citizenship, the plaintiff in that action being a resident of this State and the defendant a foreign corporation.

The petitioner claims that the removal is in violation of the company's agreement that all suits against it should be tried exclusively in the State Courts (which was a condition of the securing of the license) and in violation of Sections 4033, 4034, 4035, and 4068 of the Code of 1922.

The insurance commissioner making return to a rule to show cause why the mandamus prayed for should not issue, signed by Mr. Justice Watts on June 19, 1926, admits the allegations of fact contained in the petition, but submits that, in refusing to revoke the license of the company, he has acted under the advice of the Attorney General of the State to the effect that, under the decisions of the Supreme Court of the United States, the statutes referred to and the consent required of the company are ineffectual to deprive it of the constitutional right, in a proper case, of removal to the Federal Court.

The Sections of the Code referred to make it a condition precedent to the transaction of any business by a foreign corporation in this State that it shall submit to the jurisdiction of the State Courts in all matters connected therewith, and that this condition shall be a part of every contract made by the corporation in this State.

While there has been some variation in the decisions of the United States Supreme Court upon this subject, it has been finally settled by that Court that neither the express or implied consent of the foreign corporation nor any Statute of the State is effectual to deprive the corporations, as a citizen of another State, from exercising its constitutional right of removal. In the latest case upon the subject,Terral v. Construction Co., 257 U.S. 529; 42 S.Ct., 188;66 L.Ed., 352; 21 A.L.R., 186 (Feb, 27, 1922), the Court said:

"The principle established by the more recent decisions of this Court is that a State may not, in imposing conditions upon the privilege of a foreign corporation's doing business in the State, exact from it a waiver of the exercise of its constitutional right to resort to the Federal Courts or thereafter withdraw the privilege of doing business because of its exercise of such right, whether waived in advance or not."

See, also, extended note to this case, as reported in 21 A.L.R., 188.

The return to the rule is adjudged sufficient, and the petition is dismissed.

MESSRS. JUSTICES WATTS, BLEASE, and STABLER, and MR. ASSOCIATE JUSTICE RAMAGE concur.

MR. CHIEF JUSTICE GARY did not participate.