Rhodes v. New York Life Insurance

148 S.E. 439, 197 N.C. 337, 1929 N.C. LEXIS 229

• Court: Supreme Court of North Carolina
• Decided: June 12, 1929
• Status: Published

Opinion

Brogden, J.

Is a foreign life insurance company, permitted to transact business in North Carolina by complying with tbe insurance law, precluded by C. S., 6295, from filing a petition for removal in a pending suit ?

On 8 April, 1901, the defendant filed an' application to transact business in the State of North Carolina in accordance with the insurance law then in force. The application stated: “And said company hereby agrees that suits commenced in the State courts of North Carolina against it shall not be removed by the acts of. said company into the United States Circuit or District courts,” etc. This language' in the application was designed to comply with the provisions of the statute. C. S., 6295, provides that if any foreign life insurance company shall undertake to remove a pending suit to the Federal Court that the Insurance Commissioner shall revoke the authority to transact business in this State. Tbe statute was construed in the case of Insurance Co. v. Commissioner, 141 N. C., 442, 57 S. E., 120, and held constitutional. The decision was planted squarely upon the authority of Insurance Co. v. Prewitt, 202 U. S., 246, 50 L. Ed., 1013. However, the Prewitt case was expressly overruled in Terral v. Burke Construction Co., 257 U. S., 529, 66 L. Ed., 352. Chief Justice Taft, writing for the Court, said: “Tbe 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 sucb right, whether waived in advance or not. The principle does not depend for its application on the character of the business the corporation does, whether state or interstate, although that has been suggested as a distinction in some cases. It rests on the ground that the Federal Constitution confers upon citizens of one state the right to resort to Federal Courts in another; that state action, whether legislative or executive, necessarily calculated to curtail the free exercise of right thus secured, is void because the sovereign power' of a state in excluding foreign corporations, as in the exercise of all others of its sovereign powers, is subject to the limitations of the supreme fundamental law.” Fidelity & Deposit Co., v. Tafoya, 270 U. S., 426, 70 L. Ed., 664; Frost v. R. R. Commission, 271 U. S., 583, 70 L. Ed., 1101; Hanover Fire Ins. Co. v. Carr, 272 U. S., 494, 21 A. L. R., 188.

It is clear therefore that the removal provisions of C. S., 6295, is unconstitutional and void. Hence the defendant had a right to remove the ease, and the judgment of the Superior Court is

Affirmed.