Home Ins. Co. v. Morse

87 U.S. 445, 22 L. Ed. 365, 20 Wall. 445, 1874 U.S. LEXIS 1433
Supreme Court of the United States·Decided November 18, 1874·No. 35·Published·Cited by 258 cases

Opinions

Mr. Justice HUNT

delivered the opinion of the court.

The refusal of-the State corn! of Wisconsin to allow the removal of the case into the United States Circuit Court of Wisconsin, and its justification under the agreement of the company and the statute of Wisconsin form the subject of consideration in the present suit.

The State courts of Wisconsin held that this sfatute and their agreement under it justified a denial of the petition to remove the case into the United States court. The insurance company deny this proposition, and this is the point presented for consideration.

Is the agreement thus made by the insurance company one that, without reference to the statute, would bind the party making it?

Should a citizen of the State of New York enter into an agreement with the State of Wisconsin, that in no event would he resort to the courts of that State or to the Federal tribunals within it to protect his rights of property, it could not be successfully contended that such an agreement would be valid.

Should a citizen of New York enter into an agreement with the State of Wisconsin, upon whatever consideration, that he would in no case, when called into the courts of that State or the Federal tribunals within it, demand a jury to determine any rights of property that might be called in question, but. that such rights should in all such cases be submitted to arbitration or to the decision of a single judge, the authorities are clear that he would not thereby be debarred from resorting to the ordinary legal tribunals of the State. There is no sound principle upou which such agreements can be specifically enforced.

[451] We see no difference in principle between the cases supposed and the case before us. Every citizen'is entitled to resort to. all the courts of the country, and to invoke the protection which all the laws or all those courts .may afford him. A man may. not barter away his life or his freedom, or his substantial rights. In a criminal case, he cannot, as was held in Oancemi’s Case,* be fried in any other manner than by a jury of twelve men, although he consent in open court to be tried by a jury of eleven men. In a civil case .he m,ay submit his particular suit by his own consent to an arbitration, or to-tlie decision of a single judge. So he may omit to exercisje his right to remove his suit to a Federal tribunal, as often as he thinks fit, in each recurring, case. In these aspects any citizen may no doubt waive the rights to which' he may be entitled. He cannot, however, bind himself in advance by .'an agreement, which may be specifically enforced, thus to forfeit his rights at all times and on all occasions, whenever the case .may be presented.

' That the agreement of the insurance company is invalid upon, the principles mentioned, numerous cases may be cited to prove. They show that agreements in advance to oust the courts of the jurisdiction conferred by law are illegal and void.

In Scott v. Avery (one of the cases), the Lord- Chancellor says: “ There is no doubt of the general principle that par.ties cannot by contract oust the ordinary courts of their jurisdiction. That has been decided in many case's. . Perhaps the first case I need refer to was- a case decided about a century ago. That case was an action on a policy of insurance in which there was a clause that in case of any loss or dispute it. should be referred to arbitration. It was decided there that an action would lie, although there had [452] been no reference to arbitration. Then, after the lapse of hall' a century, occurred a ease before Lord Ken yon, and from the language that fell from that, learned judge, many other cases had probably been decided pvhich are not reported. But in the time of Lord Kenyon occurred the-case which is considered the leading case on the subject, of Thompson v. Charnock.* That was an action upon a charter-party, ill which it. was stipulated that if any difference should arise it should be referred to arbitration. That clause was pleaded in bar to the action brought upon breach of the contract, with an-averment that the defendant was, and always had been, ready to refer the.same to arbitration. This was held to be a bad plea, upon the ground that a right of action had accrued, and that the fact that the parties had agreed that the matter should be settled by arbitration did.not oust the' jurisdiction of the courts.” Upon this doctrine all the judges who delivered opinions in the House of Lords were agreed.

And the principle, Mr. Justice Story, in his Commentaries on Equity Jurisprudence, says is applicable in courts of equity as well as-in courts of law. “And where the stipulation-, though not against the policy of the law, yet is an effort to divest the-ordinary jurisdiction of the common tribunals-of justice, such as an agreement in case of dispute to refer the same, to arbitration, a court of equity will not any more than a court of law interfere to enforce the agreement, but it will leave the parties to their own good pleasure in regard to such agreements. The regular administration of justice might- be greatly impeded or interfered with by such stipulations if they were specifically enforced.”

In Stephenson v. P. F. and M. C. Ins. Co., the court say: “ While parties may impose as condition precedent to applications to the courts that they shall first have settled the amount to be recovered by an agreed mode, they cannot entirely close the access'to the courts of law. The law and not the contract prescribes the remedy,-and parties have no more right to enter'into stipulations against a resort to the [453] courts for their remedy in a given éase, than they have to próvido a remedy prohibited by law; such stipulations are repugnant to:the rest of ’the contract, and assume to divest courts of their established jurisdictions; as conditions-precedent to an appeal to the courts, they are void.” Many cases are cited in suppdrt of the rule thus laid down. Upon its own merits, this agreement, cannot be sustained.

, Does the agreement in question gain validity from the statute of Wisconsin, which has been-qnótcd ? Is the statute of the State of Wisconsin, which enacts-that a corporation organized in another State shall not transact business within its limits, unless it stipulates in advance that it will not remove' into the Federal courts any suit that may be commenced agaiiist it by á citizen of Wisconsin, a valid statute in respect to such requisition, under the Constitution of the United States?

The Constitution of,the United. States declares that the judicial power of the United States shall extend to all cases in law and equity arising under that Constitution, the laws of the United States, and to the treaties made or which shall be .made under their authority, ... / to controversies between a State and citizens of another State, and between citizens of different States.*

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Home Ins. Co. v. Morse, 87 U.S. 445, 22 L. Ed. 365, 20 Wall. 445, 1874 U.S. LEXIS 1433 (1874).

87 U.S. 445 (Home Ins. Co. v. Morse) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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