Source: https://supreme.justia.com/cases/federal/us/127/265/
Timestamp: 2019-04-24 12:01:04+00:00

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Justia › US Law › US Case Law › US Supreme Court › Volume 127 › Wisconsin v. Pelican Ins. Co.
This Court has not original jurisdiction of an action by a state upon a judgment recovered by it in one of its own courts against a citizen or a corporation of another state for a pecuniary penalty for a violation of its municipal law.
"The plaintiff, The State of Wisconsin and one of the states of the United States, now comes and complains of the defendant, The Pelican Insurance Company of New Orleans, a corporation duly organized and existing under the laws of the Louisiana, in a plea of debt --"
the said Pelican Insurance Company, a judgment in favor of the said plaintiff for the sum of eight thousand five hundred dollars damages, together with the further sum of forty-five dollars and thirty-nine cents for costs and disbursements, amounting in all to the sum of eight thousand five hundred and forty-five dollars and thirty-nine cents, which said judgment still remains in that court in full force and effect, and not in any wise modified, reversed, set aside, appealed from, or otherwise vacated, and the said plaintiff, the said State of Wisconsin, hath not obtained any satisfaction upon the said judgment, but on the contrary the whole thereof, together with interest thereon from said date of such judgment, remains wholly unpaid and owing, whereby an action hath accrued unto the said plaintiff, the said State of Wisconsin to demand and have from and of the said defendant the said sum of eight thousand five hundred and forty-five dollars and thirty-nine cents, with interest."
"Wherefore the said plaintiff, the said State of Wisconsin, saith that the plaintiff is injured and hath sustained damage to the said amount of eight thousand five hundred and forty-five dollars and thirty-nine cents, with interest, and therefore it brings this suit."
Annexed to the declaration was a copy of the record of the judgment therein described which showed that it was rendered on default of the defendant, after service of summons on three persons, each of whom was stated in the officer's return to be a resident and citizen of Wisconsin and an agent of the defendant, upon a complaint alleging that the defendant had done business in the state for thirty months without having itself, or by any officer, agent or other person in its behalf, prepared or deposited in the office of the commissioner of insurance of the state annual statements of its business, as required by the provision of § 1920 of the Revised Statutes of Wisconsin, and that the defendant had thereby become indebted to the plaintiff in the sum of $15,000 according to that provision.
"for any failure to make and deposit such annual statement or to promptly reply in writing to any inquiry addressed by the commissioner of insurance in relation to the business of any such corporation, or for willfully making any false statement therein, every such corporation or officer so failing or making such false statement shall forfeit five hundred dollars, and for neglecting to file such annual statement an additional five hundred dollars for every month that such corporation shall continue thereafter to transact any insurance business in this state until such statement be filed."
"made the duty of the commissioner of insurance to prosecute to final judgment in the name of the state, or to compromise, settle or compound, every forfeiture incurred by an insurance corporation by its failure to comply with, or for its violation of, any law of the state, of which he may be credibly informed,"
"one-half of every sum collected, paid or received by virtue of section 1 of this act shall be paid into the state treasury, and the remainder shall belong to the commissioner of insurance, who shall pay all expenses incurred in prosecuting all actions brought to enforce the payment of such forfeitures, both in and out of the state, and shall pay all expenses incident to the collection of such forfeitures."
the punitive nature as shown by this record. Wherefore this defendant submits to this Court that the complaint of this plaintiff does not show a cause within the original jurisdiction of the court, nor within the terms of the statutes of the United States."
To this plea the plaintiff filed a general demurrer, upon which the case was set down for argument.
the insurance commissioner of the state as required by that statute. The leading question argued at the bar is whether such an action is within the original jurisdiction of this Court.
The ground on which the jurisdiction is invoked is not the nature of the cause, but the character of the parties, the plaintiff being one of the states of the union and the defendant a corporation of another of those states.
"to controversies between two or more states, between a state and citizens of another state, between citizens of different states between citizens of the same state claiming lands under grants of different states, and between a state, or the citizens thereof, the foreign states, citizens, or subjects,"
"The judicial power of the United States shall not be construed to extend to any suit, in law or equity, commenced or prosecuted against one of the United States by citizens of another state, or by citizens or subjects of any foreign state."
By the Constitution, therefore, this Court has original jurisdiction of suits brought by a state against citizens of another state as well as of controversies between two states, and it is well settled that a corporation created by a state is a citizen of the state within the meaning of those provisions of the Constitution and statutes of the United States which define the jurisdiction of the federal courts. Kansas Pacific Railroad v. Atchison &c. Railroad, 112 U. S. 414; Paul v. Virginia, 8 Wall. 168, 75 U. S. 178; Pennsylvania v. Wheeling Bridge, 13 How. 518.
Yet notwithstanding the comprehensive words of the Constitution, the mere fact that a state is the plaintiff is not a conclusive test that the controversy is one in which this Court is authorized to grant relief against another state or her citizens, and a consideration of the cases in which it has heretofore had occasion to pass upon the construction and effect of these provisions of the Constitution may throw light on the determination of the question before us.
"a state, when suing in this Court for the prevention of a nuisance in a navigable river of the United States, must not aver and show that it will sustain some special and peculiar injury therefrom, such as would enable a private person to maintain a similar action in another court,"
and dismissed the bill because no unlawful obstruction of navigation was proved. Id., 93 U. S. 14.
As to "controversies between a state and the citizens of another state." The object of vesting in the courts of the United States jurisdiction of suits by one state against the citizens of another was to enable such controversies to be determined by a national tribunal, and thereby to avoid she partiality, or suspicion of partiality, which might exist if the plaintiff state were compelled to resort to the courts of the State of which the defendants were citizens. Federalist, No. 80; Chief Justice Jay, in Chisholm v. Georgia, 2 Dall. 419, 2 U. S. 475; 2 Story on the Constitution §§ 1638, 1682. The grant is of "judicial power," and was not intended to confer upon the courts of the United States jurisdiction of a suit or prosecution by the one state of such a nature that it could not, on the settled principles of public and international law, be entertained by the judiciary of the other state at all.
except when extended by express treaty or statute to offenses committed abroad by its own citizens, and they must be administered in its own courts only, and cannot be enforced by the courts of another country. Wheaton's International Law (8th ed.) §§ 113, 121.
Chief Justice Marshall stated the rule in the most condensed form, as an incontrovertible maxim: "the courts of no country execute the penal laws of another." The Antelope, 10 Wheat. 66, 23 U. S. 123. The only cases in which the courts of the United States have entertained suits by a foreign state have been to enforce demands of a strictly civil nature. The Sapphire, 11 Wall. 164; King of Spain v. Oliver, 2 Wash.C.C. 429, and Pet.C.C. 217, 276.
Westlake's International Law (1st ed.) § 388; Piggott on Foreign Judgments 209, 210.
"But this includes not a decree decerning for a penalty, because no court reckons itself bound to punish, or to concur in punishing, any delict committed extra territorium."
2 Kames on Equity (3d ed.) 326, 366; Story's Conflict of Laws, §§ 600, 622.
It is true that if the prosecution in the courts of one country for a violation of its municipal law is in rem, to obtain a forfeiture of specific property within its jurisdiction, a judgment of forfeiture, rendered after due notice and vesting the title of the property in the state, will be recognized and upheld in the courts of any other country in which the title to the property is brought in issue. Rose v. Himely, 4 Cranch 241; Hudson v. Guestier, 4 Cranch 293; Bradstreet v. Neptune Ins. Co., 3 Sum. 600, 605; Piggott on Foreign Judgments 264. But the recognition of a vested title in property is quite different from the enforcement of a claim for a pecuniary penalty. In the one case, a complete title in the property has been acquired by the foreign judgment; in the other, further judicial action is sought to compel the payment by the defendant to the plaintiff of money in which the plaintiff has not as yet acquired any specific right. The application of the rule to the courts of the several states and of the United States is not affected by the provisions of the Constitution and of the act of Congress by which the judgments of the courts of any state are to have such faith and credit given to them in every court within the United States as they have by law or usage in the state in which they were rendered. Constitution, Article IV, Section 1; Act of May 26, 1790, c. 11, 1 Stat. 122; Rev.Stat. § 905.
"The Constitution did not mean to confer any new power upon the states, but simply to regulate the effect of their acknowledged jurisdiction over persons and things within their territory. It did not make the judgments of other states domestic judgments to all intents and purposes, but only gave a general validity, faith, and credit to them as evidence. No execution can issue upon such judgments without a new suit in the tribunals of other states. And they enjoy not the right of priority or lien which they have in the state where they are pronounced, but that only which the lex fori gives to them by its own laws in their character of foreign judgments."
Story's Conflict of Laws § 609; Thompson v. Whitman, 18 Wall. 457, 85 U. S. 462-463.
"does not carry with it into another state the efficacy of a judgment upon property or persons, to be enforced by execution. To give it the force of a judgment in another state, it must be made a judgment there, and can only be executed in the latter as its laws may permit."
technical rules which regard the original claim as merged in the judgment, and the judgment as implying a promise by the defendant to pay it, do not preclude a court to which a judgment is presented for affirmative action (while it cannot go behind the judgment for the purpose of examining into the validity of the claim) from ascertaining whether the claim is really one of such a nature that the court is authorized to enforce it. Louisiana v. New Orleans, 109 U. S. 285, 109 U. S. 288, 109 U. S. 291; Louisiana v. St. Martin's Parish, 111 U. S. 716; Chase v. Curtis, 113 U. S. 452, 113 U. S. 464; Boynton v. Ball, 121 U. S. 457, 121 U. S. 466.
country does not extend to a suit by a state to recover penalties for a breach of her own municipal law. This is shown both by the nature of the cases in which relief has been granted or sought and by acts of Congress and opinions of this Court more directly bearing upon the question.
The earliest controversy in this Court, so far as appears by the reports of its decisions, in which a state was the plaintiff, is that of Georgia v. Brailsford.
action had confederated together to defraud the state. Upon the filing of the bill, this Court, without expressing any opinion upon the merits of the case, granted a temporary injunction to stay the money in the hands of the marshal of the circuit court until the title to the bond as between the State of Georgia and the defendants could be tried. 2 Dall. 2 U. S. 402.
At February term, 1793, upon a motion to dissolve that injunction, this Court held that if the State of Georgia had the title in the debt (upon which no opinion was then expressed), she had an adequate remedy at law by action upon the bond, but in order that the money might be kept for the party to whom it belonged, ordered the injunction to be continued till the next term, and if Georgia should not then have instituted her action at common law, to be dissolved. 2 Dall. 2 U. S. 415.
Such an action was brought accordingly, and was tried by a jury at the bar of this Court at February term, 1794, when the Court was of opinion, and so charged the jury, that the act of the State of Georgia did not vest the title in the debt in the state at the time of passing it, and that by the terms of the act the debt was not confiscated, but only sequestered, and the right of the obligees to recover it revived on the treaty of peace, and the jury returned a verdict for the defendants. 3 U. S. 3 Dall. 1.
It thus appears that in Georgia v. Brailsford, the state did not sue for a penalty or upon a judgment for a penalty imposed by her municipal law, but to assert a title, claimed to have absolutely vested in her not under an ordinary act of municipal legislation, but by an act of war done by the State of Georgia as one of the United States (the Congress of which had not then been vested with the power of legislating to that effect) to assist them against their common enemy by confiscating the property of his subjects, and that the only point decided by this Court, except as to matters of procedure, was that the title had not vested in the State of Georgia by the act in question.
"In the present case, the State of Pennsylvania claims nothing connected with the exercise of its sovereignty. It asks from the court a protection of its property on the same ground and to the same extent as a corporation or individual may ask it."
13 How. 54 U. S. 560-561. So, Chief Justice Taney, who dissented from the judgment, said: "She proceeds, and is entitled to proceed, only for the private and particular injury to her property which this public nuisance has occasioned." 13 How. 54 U. S. 589. And Mr. Justice Daniel, the other dissenting judge, took the same view. 13 How. 54 U. S. 596.
Mississippi v. Johnson, 4 Wall. 475, and Georgia v. Stanton, 6 Wall. 50, were cases of unsuccessful attempts by a state, by a bill in equity against the President or the Secretary of War, described as a citizen of another state, to induce this Court to restrain the defendant from executing, in the course of his official duty, an act of Congress alleged to unconstitutionally affect the political rights of the state.
State of Alabama against a pecuniary liability which she alleged that she had incurred by reason of fraudulent acts of the defendants, and upon the facts of the case the bill was not maintained.
In Pennsylvania v. Quicksilver Co., 10 Wall. 553, an action brought in this Court by the State of Pennsylvania was dismissed for want of jurisdiction without considering the nature of the claim, because the record did not show that the defendant was a corporation created by another state.
In Wisconsin v. Duluth, 96 U. S. 379, the bill sought to restrain the improvement of a harbor on Lake Superior according to a system adopted and put in execution under authority of Congress, and was for that reason dismissed without considering the general question whether a state, in order to maintain a suit in this Court, must have some proprietary interest that has been affected by the defendant.
The cases heretofore decided by this Court in the exercise of its original jurisdiction have been referred to not as fixing the outermost limit of that jurisdiction, but as showing that the jurisdiction has never been exercised or even invoked in any case resembling the case at bar.
"The supreme court shall have exclusive jurisdiction of controversies of a civil nature where a state is a party, except between a state and its citizens, and except also between a state and citizens of other states or aliens, in which latter case it shall have original but not exclusive jurisdiction."
1 Stat. 80. That act, which has continued in force ever since, and is embodied in § 687 of the Revised Statutes, was passed by the first Congress assembled under the Constitution, many of whose members had taken part in framing that instrument, and is contemporaneous and weighty evidence of its true meaning. Ames v. Kansas, 111 U. S. 449, 111 U. S. 463-464.
"The Constitution is particular in expressing the parties who may be the objects of the jurisdiction in any of these cases, but, in respect to the subject matter upon which such jurisdiction is to be exercised, uses the word 'controversies' only. The act of Congress more particularly mentions civil controversies, a qualification of the general word in the Constitution, which I do not doubt every reasonable man will think was well warranted, for it cannot be presumed that the general word 'controversies' was intended to include any proceedings that relate to criminal cases, which, in all instances that respect the same government only are uniformly considered of a local nature, and to be decided by its particular laws."
2 Dall. 2 U. S. 431-432. None of the other judges suggested any doubt upon this point, and Chief Justice Jay, in summing up the various classes of cases to which the judicial power of the United States extends, used "demands" (a word quite inappropriate to designate criminal or penal proceedings) as including everything that a state could prosecute against citizens of another state in a national court. 2 Dall. 2 U. S. 475.
instituted in any of the federal courts, not to those cases in which an original suit might not be instituted in a federal court. Of the last description is every case between a state and its citizens, and perhaps every case in which a state is enforcing its penal laws. In such cases, therefore, the Supreme Court cannot take original jurisdiction."
6 Wheat. 19 U. S. 398-399.
The soundness of the definition given in the Judiciary Act of 1789 of the cases coming within the original jurisdiction of this Court by reason of a state being a party as "controversies of a civil nature" was again recognized by this Court in Rhode Island v. Massachusetts, 12 Pet. 657, 37 U. S. 722, 37 U. S. 731, decided at January term, 1838.
The statute of Wisconsin under which the state recovered in one of her own courts the judgment now and here sued on was, in the strictest sense, a penal statute imposing a penalty upon any insurance company of another state doing business in the State of Wisconsin without having deposited with the proper officer of the state a full statement of its property and business during the previous year. Wisconsin Rev.Stat. § 1920. The cause of action was not any private injury, but solely the offense committed against the state by violating her law. The prosecution was in the name of the state, and the whole penalty, when recovered, would accrue to the state and be paid one-half into her treasury and the other half to her insurance commissioner, who pays all expenses of prosecuting for and collecting such forfeitures. Wisconsin Stat. 1885, c. 395. The real nature of the case is not affected by the forms provided by the law of the state for the punishment of the offense. It is immaterial whether, by the law of Wisconsin, the prosecution must be by indictment or by action or whether under that law a judgment there obtained for the penalty might be enforced by execution, by scire facias, or by a new suit. In whatever form the state pursues her right to punish the offense against her sovereignty, every step of the proceeding tends to one end -- the compelling the offender to pay a pecuniary fine by way of punishment for the offense.
This Court therefore cannot entertain an original action to compel the defendant to pay to the State of Wisconsin a sum of money in satisfaction of the judgment for that fine. The original jurisdiction of this Court is conferred by the Constitution without limit of the amount in controversy, and Congress has never imposed -- if, indeed, it could impose -- any such limit. If this Court has original jurisdiction of the present case, it must follow that any action upon a judgment obtained by a state in her own courts against a citizen of another state for the recovery of any sum of money, however small, by way of a fine for any offense, however petty, against her laws could be brought in the first instance in the Supreme Court of the United States. That cannot have been the intention of the convention in framing, or of the people in adopting, the federal Constitution.
Judgment for the defendant on the demurrer.

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