Case Name: Johnson vs. The Brewers' Fire Insurance Company of America
Court: Wisconsin Supreme Court
Jurisdiction: Wisconsin
Decision Date: 1881-03-24
Citations: 51 Wis. 570
Docket Number: 
Parties: Johnson vs. The Brewers’ Fire Insurance Company of America.
Judges: Taylor, J., concurred in the view expressed by Cassoday, J.
Reporter: Wisconsin Reports
Volume: 51
Pages: 570–591

Head Matter:
Johnson vs. The Brewers’ Fire Insurance Company of America.
March 8
March 24, 1881.
State and Federal Courts. Validity of judgment in state court after attempted removal to federal court.
Where a proper petition and sufficient bond for the purpose are filed by the defendant in a cause commenced in a state court, and a motion thereupon made by him for a removal of the cause to the proper federal court, if the state court erroneously denies such motion and proceeds to judgment in the cause, the judgment is not void, but, if not set aside or reversed, must be treated as valid in all collateral actions.
Oassoday and Taylor, JJ., dissent.
APPEAL from the County Court of Mil/wauJsee County.
Action upon a Michigan judgment. The following statement of facts was prepared by Mr. Justice Oassoday as the basis of his dissenting opinion. A briefer outline of the facts will be found in the opinion of Mr. Chief Justice Cole.
On the 29th of June, 1874, Boswell, assignor of the plaintiff, Johnson, commenced a suit against the defendant company, in the circuit court for the county of Menominee in the state of Michigan, to recover upwards of $2,000 damages caused by loss from fire, upon a policy of insurance issued by the defendant. Process was served on the Commissioner of Insurance of Michigan; and the proofs of service showed that the defendant was a corporation of Wisconsin, located at Milwaukee, and that Jacob Oberman was president thereof and Joseph Schlitz was its secretary. The declaration was filed July 27, 1874; on the 22d of August, 1874, it was amended; and on the 24th of the same month, at the time for the defendant to plead, it appeared by attorney and filed its plea, and at the same time presented to the court a petition for the removal of said cause to the circuit court of the United States for the western district of Michigan. This petition was in the usual form, showing the amount in controversy, and that the parties were residents and citizens of different states; and it was accompanied by the usual affidavit of merits and prejudice, and the usual bond. Said state court of Michigan took the petition under advisement, and on the 11th of September, 1874, entered an order in the cause denying the prayer for a removal; and on the next day, upon the defendant’s application, an order was entered continuing the cause in said court until the next term thereof. On the 3d of May, 1875, being the first day of the next term of said state court, the defendant again appeared therein, and filed with the clerk thereof a new verified petition, in the form required by the act of March 3,1875, accompanied by an affidavit of prejudice and showing citizenship in different states, and the usual bond, signed by the officers of said defendant and one surety, who justified, all residing in and being citizens of Wisconsin; and such verification, affidavit and justification were each sworn to before a notary public at and residing in Milwaukee, Wisconsin. On the 5th of May, 1875, said state court of Michigan, after having heard and considered said petition, ordered that the prayer thereof be denied; and thereupon, and after said defendant declined to further proceed in said state court, it caused damages to be assessed against the defendant and in favor of said Boswell, in the sum of $2,140, besides his costs and charges in the action, and, upon motion of said Boswell’s attorney, rendered judgment in Boswell’s favor against the defendant, for the damages so assessed, together with the costs and charges aforesaid, to be taxed.
On the 17th of May, 1875, the clerk of said state court furnished certified copies of the several papers for removal so filed with him. On the 19th of the same month, F. W. Cotz-hausen made his affidavit, from which it appeared that he was the general attorney and counsel of the defendant company; that, when informed of the order of the state court on the petition for removal, he caused repeated requests to be made to the clerk thereof 'for copies of the pleadings, proceedings and record in said cause, and also caused the legal fees for such copies to be tendered, but had been able to procure only a portion of the records of said cause; and also that he had “ caused further requests to be made for copies of all the other papers, pleadings and of the record in said case,” but had not yet received the same. This affidavit, with copies of a portion of said records, were filed with the clerk of said United States court May 20, 1875; and on the 28th of the same month, certified eopies of the whole of said records were filed with said clerk. From certified copies of the records of said United States court, it appears, that on the 26th of January, 1876, Boswell, by his attorneys, filed his appearance in that court and moved said court upon the transcript on file therein, sent from said state court, to remand the cause to said state court; that this motion was denied; and that on the same day Boswell’s attorneys entered a rule in said court for the defendant to appear and plead to the declaration. In September, 1879, Boswell assigned to the plaintiff the judgment so entered in said state court of Michigan. This action was afterwards brought in the county court of Milwaukee county, upon said judgment. The defendant pleaded nul tiel reoorcl. Upon the trial, the court ruled out said removal papers, and directed a verdict for the plaintiff, upon which judgment for $3,015.74 was entered. The defendant appealed from that judgment.
For the appellant there were briefs by Gotzhausen, Sylvester dé Scheiber, and oral argument by Mr. Gotzhausen.
For the respondent there was a brief by Dixon, Noyes dé Dixon, and oral argument by Mr. Noyes.

Opinion:
Cole, C. J.
This is an appeal from the judgment of the county court of Milwaukee county in favor of the plaintiff and against the defendant. The action in the county court was founded upon a judgment recovered in the circuit court for Menominee county, in the state of Michigan, in favor of one Boswell against the defendant, which judgment had been assigned to the plaintiff below before suit brought. The defendant answered in this action, nul tiel record. Upon the trial, the plaintiff introduced an exemplified copy of the record of the suit in the Michigan court, showing the rendition of the judgment sued upon, and also proved an assignment of the same to the plaintiff. It appeared, by the judgment roll in evidence, that a verified petition and bond for removal of the cause to the United States circuit court were filed in the state court on the 24th of August, 1874, and a motion by the defendant for a removal was made, which was denied on the 11th of September following. Thereupon the defendant made a motion for the continuance of the cause, which motion was granted. It appears that a second petition and bond for removal to the United States court were filed on the 3d day of May, 1875. A motion for a removal was again made, which was denied on the 5th of that month. Thereafter the case was called for trial, damages were assessed by a jury in the absence of the defendant, and the judgment sued upon was rendered. These are the material facts apon which the real question, of law arises upon this appeal. That question is, Do these matters set forth in the record of the state court of Michigan show that the judgment of that court was not merely voidable for error, but absolutely void? It is apparent that that is the only question which is open for our consideration — whether, indeed, the Michigan court lost all jurisdiction to proceed in .the cause, after the application was made, under the provisions of the act of congress for its removal into the circuit court of the United States. Mere error in the proceedings of the state court cannot be corrected by this court, or reviewed here, for the obvious reason that we have no revisory power over that court. But it is claimed by the learned counsel for the defendant, that, as soon as application was made to the state court, in conformity to the acts of congress, for a removal of the cause, eo instanti the state court lost all jurisdiction over it, and every subsequent step therein was coram non judice, and the judgment rendered was null and void.
In this case counsel insists that the application for the removal was sufficient in form and reasonable in time, and ousted the jurisdiction of the state court, and that in this collateral action we should hold that the record shows an entire want of jurisdiction to render the judgment sued upon. A majority of the court is not prepared to adopt this view of the law. In dissenting from it we hold that when the case is within the act of congress, and an application in proper form for its removal is made, it is the duty of the state court to accept the petition and bond, and proceed no further in the suit. This is the mandate of the statute. But if the state court declines to relinquish its jurisdiction, and proceeds to judgment, such judgment is not void, but erroneous merely. Until it is reversed or set aside in a proper manner by an appellate court, it is valid and must be respected; certainly, in a collateral action upon it. The defendant had an ample remedy to correct the decision of the state court refusing to remove the cause and proceeding to judgment. It might have brought the case before the supreme court of the state by appeal or writ of error; and if the decision of the court below had been affirmed, it could have taken the case to the supreme court of the United States. But if the position of defendant's counsel is sound, that the judgment rendered by the state court was coram non judice and void, it doubtless may be assailed in this collateral action; for, as we understand the law, a void judgment can be the foundation of no legal right, and its validity may be challenged wherever it is attempted to be enforced. But a voidable or erroneous judgment can be questioned only in a direct proceeding, and, until avoided, may be the foundation of valuable rights. The distinction, therefore, between a void and voidable judgment is of great practical importance, especially in cases of this nature. " Whatever may he avoided, may, in good sense, to this purpose, be called void, and this use of the term void is not uncommon in the language of statutes and of courts. But, in regard to the consequences to third persons, the distinction is highly important; because nothing can be founded upon what is absolutel/y void, whereas, from those which are only voidable, fair titles may flow. These terms have not alwávs been used with nice discrimination; indeed, in some books, there is a great want of precision in the use of them." Parker, C. J., in Somes v. Brewer, 2 Pick., 184; Crocker v. Bellangee, 6 Wis., 645; Bromley v. Goodrich, 40 Wis., 131.
We are not aware that the precise question we are considering has ever been passed upon by the supreme court of the United States. There are doubtless some dicta and many expressions to be found in the decisions of the federal courts, to the effect that, if the case is removable and the proper application is made therefor, the jurisdiction of the state court is ousted, and all subsequent proceedings in the cause in that court are coram non judice. But it is doubtful if this language, in the connection in which it is generally used, really means anything moré than that such subsequent proceedings were erroneous. Judge Dillon, a very high authority on this point, in his monograph on the removal of causes, uses this language: " If the case be within the act of congress, and the petition is in due form, accompanied with the offer of the required surety or bond, the statute is that the state court must accept the surety, or the petition and bond, and proceed no further in the case. Under such circumstances the state court has no power to refuse the removal, and can do nothing to affect the right, and its rightful jurisdiction ceases eo instanti, no order for the removal is necessary, and every subsequent exercise of jurisdiction by the state court, including its judgment, if one is rendered, is erroneous." 3d rev. ed. 1881, § 75. In a note to the text he says: "We purposely use the phrase, 'the rightful jurisdiction ceases eo instanti] and a subsequent judgment of the state court 'iserroneous;' we do not say null and void. Such a judgment is perhaps valid unless reversed or set aside, but in many of the cases every subsequent exercise of jurisdiction is said to be null and void, and every step coram non judiceP
In the Removal Cases, 100 U. S., 457, the court held that the suit in the state court was within the act of congress, and that a proper application, both as to form and time, for its removal to the circuit court of the United States, was made. The state court had denied the removal upon grounds which the United States supreme court pronounced untenable or insufficient. In considering the sufficiency of the bond, the learned chief justice says: "The question here is not whether the court below had the right to pass upon the sufficiency of the surety, but whether, upon the facts as they appear in this record, it was justified in refusing to accept the bond. We are now examining the case, after j u'dgment below, in reference to errors which are alleged to have occurred in the progress of the cause. If the state court refuses to accept a bond offered by a petitioner for removal which has 'good and sufficient surety' in law, it is error that may be reviewed here. The court has no discretion in such a matter. Its action is governed by fixed rules. Here, as no objection was made to the pecuniary responsibility of the one person who signed as surety, and was competent under the laws of Iowa to do so, it was clearly error for the court to refuse to accept the bond because a second surety was an attorney of the court. Such being the case, we are clearly of opinion that, so far as the form of the application was concerned, the state court was not justified in refusing to accept the petition and bond, and in proceeding further in the cause." Page 472.
In another part of the opinion, when considering whether it appeared that the controversy about which the suit in the state court was brought was between citizens of one or more states on one side, and citizens of other states on the other side, he said: "We fully recognize the principle, heretofore asserted in many cases, that the state court is not required to let go its jurisdiction until a case is made which, upon its face, shows that the petitioner can remove a cause as a matter of right. But here, to say nothing of the statements in the petition which were not disputed, the record is full of evidence that Dennison was a citizen of Ohio. . . . Under these circumstances, it was certainly error for the state court to retain the cause because it was not shown that the citizenship of the adverse parties was in different states. . , . We must therefore hold that the supreme court of the state erred in not reversing the-judgment of the circuit court of the county, and sending the-cause back with instructions to that court to proceed no further with the suit."
It will be seen that the distinguished chief justice, in these-remarks, ex industria, as it were, avoids declaring the proceed- ings in the state court, after the application for removal was; made, void for want of jurisdiction. He does say: "We are now examining a case, after judgment below, with reference to errors; " declares that " it was clearly error for the court. below to refuse to accept the bond;" that "it was certainly error for the state court to retain the case; " but says nothing about the judgment being void, or the proceedings being corantnon judiee.
It is true that in The New Orleans, M. & T. Railway v. State of Mississippi, Ch. Legal News, Dec. 4, 1880, Mr. Justice Hablait, while considering the question whether the controversy in that case came within the acts of congress so as to entitle the defendant corporation to a removal of the suit from the state court to the United States circuit court, says: " Whether we look to the federal question raised by the state in its original petition, or to the federal question raised by the company in its answer, the inferior state court erred, as well in not accepting the petition and bond for the removal of the suit to the circuit court of the United States, as in thereafter proceeding to hear the cause. It was entirely without jurisdiction to proceed after the presentation of the petition and bond for removal." But this was said in reviewing the decision of the supreme court of the state on error in the suit itself, and the learned judge may have only meant, by this language, that ¡the state court could exercise no " rightful jurisdiction " over the cause subseqxient to the application for removal. Indeed, ¡all the cases which have come before the United States supreme court involving this question of removal, have been brought there either by writ of error to the highest state court, or on appeal from or error to the United States circuit court. Consequently, that court has had no occasion to pass upon the distinct question arising on this record. It is important that there should be an authoritative decision of that court upon the point. The majority of this court do not think it a fair interpretation of the decisions of that court, as they now stand, to say that it has decided that if the state court asserts its jurisdiction after a proper application for a removal is made, and renders a judgment, such judgment is absolutely null and void.
In my opinion in Knorr v. Ins. Co., 25 Wis., 143, I stated that the supreme court of the United States would doubtless pronounce all of the proceedings in the state court, after a proper application for a removal was made, as coram non faciice. In the light of the later decisions of that court, I think such an inference unwarranted.
The learned counsel for the plaintiff contended that the state court of Michigan properly denied both applications for a removal, because the conditions of the act of congress were not complied with in either case. In the view we have taken we have not felt called upon to consider that question. We have assumed that the state court erred in not removing the cause on the application made. But we hold that its subsequent judgment was not rendered void for that reason. If the state court erred in its decision upon that point, this court, in an action upon its judgment, has no power to correct that error. The state court certainly obtained jurisdiction over the person and subject matter of the action; and, unless that jurisdiction was completely ousted by the applications for removal, its judgment, though erroneous, was not void.
The judgment of the county court must therefore be affirmed.