Nashua River Paper Co. v. Hammermill Paper Co.

223 Mass. 8
CourtMassachusetts Supreme Judicial Court
DecidedFebruary 12, 1916
StatusPublished
Cited by44 cases

This text of 223 Mass. 8 (Nashua River Paper Co. v. Hammermill Paper Co.) is published on Counsel Stack Legal Research, covering Massachusetts Supreme Judicial Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Nashua River Paper Co. v. Hammermill Paper Co., 223 Mass. 8 (Mass. 1916).

Opinion

Rugg, C. J.

The question is whether, in a contract between a manufacturer and its sales agent, a provision is valid to the effect that “no action at law, equity or chancery shall be instituted or maintained by the Corporation in any Court of any State of the United States or in any circuit or district court of the courts of the United States against the Company other than in the courts of the Common Pleas of the State of Pennsylvania.” This stipulation occurs in an ordinary commercial contract between a corporation incorporated and domiciled in this Commonwealth and another corporation incorporated under the laws of Pennsylvania.

It becomes necessary to review some of the cases. Nute v. Hamilton Mutual Ins. Co. 6 Gray, 174, was an action upon a policy of insurance, one stipulation of which, incorporated in the contract by reference to the by-laws of the company, was in substance that any “action shall be brought at a proper court in the county of Essex.” It was held that this stipulation was not binding and that an action could be brought in any county where the venue properly might be laid. The general principle on which this decision was made to rest was that it was not within the province of parties to enter into an agreement concerning the remedy [14]*14for a breach of contract, which is created and regulated by law. Considerations of public policy were adverted to as supporting the conclusion, but not given decisive weight. Chief Justice Shaw, in concluding the discussion, said: “The greatest inconvenience would be in requiring courts and juries to apply different rules of law to different cases, in the conduct of suits, in matters relating merely to the remedy, according to the stipulations of parties in framing and diversifying their contracts in regard to remedies.” In Hall v. People’s Mutual Fire Ins. Co. 6 Gray, 185, the provision of the contract of insurance was explicit to the effect that no action should be brought upon the policy except in the county of Worcester. Chief Justice Shaw, in giving the opinion of the court, after adverting to Nute v. Hamilton Mutual Ins. Co. as substantially deciding the question, said: “The court were of opinion that a stipulation in an original contract, that in case of breach the suit shall be brought in a particular county, or, in other words, that a suit shall not be brought in a county in which it is directed by law to be brought, is not a proper matter of contract. After a contract has been made and broken, the remedy is regulated by law, and of course must be governed by the law of the forum where the remedy is sought. . . . It is a well settled maxim, that parties cannot, by their consent, give jurisdiction to courts, where the law has not given it; and it seems to follow from the same course of reasoning, that parties cannot take away jurisdiction, where the law has given it.” The same point was decided in Amesbury v. Bowditch Mutual Fire Ins. Co. 6 Gray, 596, 603. In Roberts v. Knights, 7 Allen, 449, it was held that a British subject, who had shipped in England as seaman for an entire voyage under a statutory law which provided that under such contract no seaman should sue for wages in any court abroad except in case of discharge or danger to life, nevertheless might bring an action against the master of the vessel although both parties were residents of Great Britain. It commonly has been thought that “such law enters into the terms of the contract and becomes a part of its obligation.” Hanscom v. Malden & Melrose Gas Light Co. 220 Mass. 1, 7. Therefore, the refusal of the court to give any heed to the British statute is significant, although there was no discussion of the point here raised. These cases generally have been understood as supporting the proposition [15]*15that parties could not contract that their disputes arising under the contract should be litigated in a single court or in the courts of a particular jurisdiction.

It was held in Home Ins. Co. v. Morse, 20 Wall. 445, that a statute making it a condition precedent to the granting of the privilege to a foreign corporation to do business within a State, that it would not remove suits from State to federal courts, was unconstitutional and a contract to that effect was invalid. It there was said, at page 451: “A man may not barter away his life or his freedom, or his substantial rights. ... In a civil case he may submit his particular suit by his own consent to an arbitration, or to the decision of a single judge. So he may omit to exercise 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.” This point was reaffirmed expressly in Doyle v. Continental Ins. Co. 94 U. S. 535. This principle has been followed in numerous decisions of circuit and district federal courts. Prince Steam-Shipping Co. v. Lehman, 39 Fed. Rep. 704. Slocum v. Western Assurance Co. 42 Fed. Rep. 235. The Etona, 64 Fed. Rep. 880. Gough v. Hamburg Amerikanische Packetfahrt Aktiengesellschaft, 158 Fed. Rep. 174. United States Asphalt Refining Co. v. Trinidad Lake Petroleum Co. Ltd. 222 Fed. Rep. 1006.

It was held in Benson v. Eastern Building & Loan Association, 174 N. Y. 83, 86, in substance that parties cannot in the ordinary case by contract deprive courts of competent jurisdiction of their power to adjudicate causes on the ground that that jurisdiction is prescribed by law and it cannot be increased or diminished by agreement of parties. In Mutual Reserve Fund Life Association v. Cleveland Woolen Mills, 27 C. C. A. 212, at page 214, it was said by Lurton, J.: “The policy [of insurance] . . . contained a stipulation that no suit in law or equity should be brought upon it except in the circuit court of the United States. This provision, intended to oust the jurisdiction of all State courts, is clearly invalid. Any stipulation between contracting parties distinguishing between the different courts of the country is contrary to [16]*16public policy, and should not be enforced.” To the same effect, see Savage v. People’s Building, Loan & Savings Association, 45 W. Va. 275, 282; Bartlett v. Union Mutual Fire Ins. Co. 46 Maine, 500; Reichard v. Manhattan Life Ins. Co. 31 Mo. 518; Indiana Mutual Fire Ins. Co. v. Routledge, 7 Ind. 25; Baltimore & Ohio Railroad v. Stankard, 56 Ohio St. 224; Owsley v. Yerkes, 109 C. C. A. 250; First National Bank of Kansas City v. White, 220 Mo. 717, 737; Healy v. Eastern Building & Loan Association, 17 Penn. Sup. Ct. 385, 392, 393; Matt v. Iowa Mutual Aid Association, 81 Iowa, 135; Shuttleworth & Co. v. Marx & Co. 159 Ala. 418, 428.

In many of these cases the opinion of this court by Chief Justice Shaw in Nute v. Hamilton Mutual Ins. Co. 6 Gray, 174, has been cited and relied on as an authority.

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Bluebook (online)
223 Mass. 8, Counsel Stack Legal Research, https://law.counselstack.com/opinion/nashua-river-paper-co-v-hammermill-paper-co-mass-1916.