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BARRON v. BURNSIDE.

decided: April 11, 1887.

BARRON
v.
BURNSIDE.



ERROR TO THE SUPREME COURT OF THE STATE OF IOWA.

Author: Blatchford

[ 121 U.S. Page 195]

 MR. JUSTICE BLATCHFORD, after stating the case as above reported, delivered the opinion of the court.

The statute manifestly applies to the Chicago and North-Western Railway Company as an Illinois corporation. The first section provides, that a foreign corporation, desiring to continue the transaction of its business in Iowa, is required, on and after September 1, 1886, "to file with the secretary of state a certified copy of its articles of incorporation duly attested, accompanied by a resolution of its board of directors or stockholders, authorizing the filing thereof, and also authorizing service of process to be made upon any of its officers or agents in this state engaged in transacting its business, and requesting the issuance to such corporation of a permit to transact business in this state; said application to contain a stipulation that said permit shall be subject to each of the provisions of this act; and thereupon the secretary of state shall issue to such corporation a permit in such form as he may prescribe, for the general transaction of the business of such

[ 121 U.S. Page 196]

     corporation; and, upon the receipt of such permit, such corporation shall be permitted and authorized to conduct and carry on its business in this state."

The initial step required is a resolution authorizing the filing of the copy of the articles of incorporation, and authorizing service of process in the manner specified, and requesting the issue of the permit, the application to be accompanied by a stipulation that the permit shall be subject to each of the provisions of the act. This proceeding is a unit. The filing of the articles of incorporation and the provision in regard to service of process are to be authorized by the same resolution which requests the issue of the permit, and this request or application is to contain the stipulation above mentioned. These various things are not separable. They are all indissolubly bound up with the application for a permit, which is to be subject to every provision of the act. The permit cannot be issued unless such a stipulation is given, and the corporation is not to be permitted to carry on its business in the State unless the permit is issued to it and received by it.

Section 3 of the act provides, that, if the permit is issued, and the foreign corporation, being thereafter sued in a court of Iowa, upon a contract made or executed in Iowa, or to be performed in Iowa, or for any act or omission, public or private, arising, originating or happening in Iowa, shall remove the suit from the state court into any Federal court in Iowa, because the corporation is a non-resident of Iowa, or a resident of a state other than the state of the adverse party, or because of local prejudice against the corporation, that fact shall forfeit the permit and render it void, such forfeiture to be determined from the record of removal, and to date from the filing of the application on which the removal is effected.

Section 4 imposes a penalty of $100 a day on the corporation for carrying on its business in Iowa without having complied with the statute, and having a valid permit, and provides that any agent, officer or employe who shall knowingly act, or transact such business, for the corporation, when it has no valid permit, shall be guilty of a misdemeanor, and for each offence shall be fined not to exceed $100, or be imprisoned

[ 121 U.S. Page 197]

     in the county jail not to exceed thirty days, and pay all costs of prosecution.

It is apparent that the entire purpose of this statute is to deprive the foreign corporation, in suits such as those mentioned in ยง 3, of the right conferred upon it by the Constitution and laws of the United States, to remove a suit from the state court into the Federal court, either on the ground of diversity of citizenship or of local prejudice. The statute is not separable into parts. An affirmative provision requiring the filing by a foreign corporation, with the secretary of state, of a copy of its articles of incorporation, and of an authority for the service of process upon a designated officer or agent in the state, might not be an unreasonable or objectionable requirement, if standing alone; but the manner in which, in this statute, the provisions on those subjects are coupled with the application for the permit, and with the stipulation referred to, shows that the real and only object of the statute, and its substantial provision, is the requirement of the stipulation not to remove the suit into the Federal court.

In view of these considerations, the case falls directly within the decision of this court in Home Insurance Co. v. Morse, 20 Wall. 445. In that case, which was twice argued here, a statute of Wisconsin provided that it should not be lawful for any foreign fire insurance company to transact any business in Wisconsin unless it should first appoint an attorney in that state, on whom process could be served, by filing a written instrument to that effect, containing an agreement that the company would not remove a suit for trial into the Federal court. The Home Insurance Company, a New York corporation, filed the appointment of an agent containing the following clause: "And said company agrees that suits commenced in the state courts of Wisconsin shall not be removed by the acts of said company into the United States Circuit or Federal courts." A loss having occurred on a policy issued by the company, it was ...


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