ART. II.-LAW OF FOREIGN CORPORATIONS.

Opinion of Mr. Justice Thompson, in the case of the Warren Manufacturing Company v. Etna Insurance Company, delivered at the September term, 1837, of the Circuit Court of the United States in Connecticut.

THIS is an action of debt brought by the Warren Manufacturing Company, a body corporate, duly incorporated by a law of the state of Maryland, located and doing business in Baltimore, and all the stockholders, residents and citizens of the state of Maryland, against the Etna Insurance Company, a body corporate, duly incorporated by a law of the state of Connecticut, doing business in Hartford, in the state of Connecticut, the stockholders residing in and being citizens of the state of Connecticut, and the action is founded upon a judgment recovered in the county court of the sixth judicial district of the state of Maryland on the first day of January in the year 1836, for the sum of twenty thousand dollars. The defence set up in the case is embraced under four pleas.

1st. Nil debit.

2nd. Nul tiel record.

3d and 4th. Special pleas. Stating in substance that the defendants at the time of the commencement of the suit were, and ever since have continued to be inhabitants of the state of Connecticut, located, established, and resident at Hartford, and were not during said time, or at any other time inhabitants of, or located, established, or resident in the state of Maryland or within the jurisdiction of the said state, or the laws thereof, or any of the courts thereof. And the defendants were never served with any process in said suit, nor had any notice thereof, and never answered thereto or appeared or defended therein, nor in any wise

authorized any other person, in their behalf to appear and answer and defend the same. That they were incorporated by the legislature of the state of Connecticut, and were never in any otherwise incorporated, than by the legislature of Connecticut.

The plaintiffs demur to the plea of nil debit, and take issue upon the plea of nul tiel record, and to the third and fourth pleas the plaintiffs reply, setting out the incorporation of the defendants, and that from the time of their incorporation up to the time of the commencement of the suit in the Maryland county court, they had an agent residing in Baltimore, invested with powers to receive proposals for insurance against loss by fire, policies signed by the president of said company, and attested by their secretary, and countersigned by their agent in Baltimore; and that by virtue of said authority the policy of insurance upon which the Maryland judgment was obtained, was duly effected and from time to time renewed, and the premium paid to the said agent, and by him paid over to the defendants; and the plaintiffs in their replication further allege and set out an act of the legislature of Maryland, passed on the seventh day of March, in the year 1835, by which it is declared that any insurance company not incorporated by the state of Maryland, which shall effect or shall have effected insurance upon property within that state, and shall transact business within that state, shall be deemed to hold and exercise franchises within the state, and that every such corporation which shall hold and exercise, or which shall have held and exercised franchise within the state, shall be liable to be sued within the state, in the courts of the state, upon contracts of insurance on property within the state, or on any dealings or transactions within the state; and that when any suit shall be instituted against any such insurance company, service of the writ issued in such cause upon the president, or any directors of such company, or

upon any agent of such company, shall be deemed sufficient service, and that judgment may be thereupon rendered by default, if such company shall fail to appear; and that if any such company, after any liability shall occur, or shall have occurred, withdraw its agent from the state, or shall revoke the authority of the agent, and shall not appoint another, and no president or directors of the company can be found within the state upon whom to serve any writ or process, that service thereof upon the person last the agent of the company shall be deemed sufficient service with a proviso that when such service shall be made upon an agent after his authority shall be revoked, before judgment by default shall be rendered, proof shall be made in the mode pointed out in the act, that a copy of such writ or process has been delivered to the president, or two directors of the company within the state where such company shall have been incorporated. And the replication then avers that the writ in the Maryland suit was duly served upon the said agent of the defendants, as provided by the act aforesaid. And the replication further avers that before rendering the said judgment, a copy of the writ or declaration was at the town of Hartford, in the state of Connecticut, served upon Thomas K. Brace, president of the company, whereby notice of the said suit was given to the defendants.

In this replication the defendants rejoin, denying that they had any agent in the city of Baltimore, vested with the powers set forth in the replication, and denying also that the writ in the Maryland suit was served upon such supposed agent, as required by the Maryland law, and that the court did not thereby become invested with jurisdiction in and over said suit, or authorized thereby to render the said supposed judgment; and denying that a copy of the said writ and declaration was served on Thomas K. Brace, or actual notice thereby of the pendency of said suit was

given to the defendants, or full opportunity afforded them of defending therein, and this they pray may be inquired of by the jury.

The cause came on to argument upon the demurrer to the plea of nil debit, and upon the admission of certain facts in relation to the issues of facts, made by the pleadings in the cause. From the transcript of the record in the Maryland judgment, it appears that the writ was commenced on the tenth day of April, in the year 1835. And the declaration is upon a policy of insurance against fire, bearing date the sixteenth day of October, in the year 1830, and renewed from time to time, according to the provisions in the policy, and continued until the sixteenth day of October, in the year 1834. And the loss is alleged to have occurred on the twenty-fourth day of January, in the year 1834. And from the said record and the return of the sheriff of Baltimore county it appears that the writ was served on William Hope, agent of the Etna Insurance Company, on the eleventh day of April 1835, and that a copy of the writ and declaration was served on Thomas K. Brace, president of the Etna Insurance Company, on the fifteenth day of April, in the year 1835. And the agency of William Hope under the power of attorney set out in the transcript of the record, is admitted bearing date on the eighteenth day of March 1833, giving him full powers to receive proposals for insurance against loss by fire, to act as surveyor of buildings, and insurance thereon to make, by policies signed by the president and attested by the secretary, and countersigned by the said William Hope. It is admitted that Thomas K. Brace was president of the company, and that service of the writ and declaration was made on him, and the other proceedings had as set forth in the transcript of the record, and that the court of Maryland had jurisdiction of the subject matter of the suit in which judgment was rendered. The law of Maryland is also admitted.

Under this state of the pleadings and the admitted facts in the case, the cause must turn principally upon the effect and operation of the Maryland judgment and the construction to be given to the law of that state regulating proceedings against foreign corporations doing business within the

state.

Prior to the adoption of the confederation and the constitution of the United States, the several states were considered entirely independent of each other, and the judgments recovered in their respective courts, were foreign judgments in every respect, as in any separate and independent government, and whatever changes now exist in this respect must be sought for in the constitution and laws of the United States. The constitution declares that full faith and credit shall be given in each state to the public acts, records, and judicial proceedings of every state, and the congress may prescribe the manner in which such acts, records, and proceedings shall be proved, and the effect thereof, and the act of congress of 1790, passed in exercise of this power, declares, that judgments in the states shall have the same faith and credit given to them in every court within the United States, as they have by law or usage in the courts of the states from whence the record shall be taken. There has been considerable diversity of opinion prevailing in the courts of the different states, with respect to the construction of the constitution, and the act of congress upon this subject. Some holding that the act of congress relates only to the mode of authentication, and that the legal import and effect, and obligations of judgments of another state, is still open to be decided by the rules and principles of the common law. Others have held that the terms faith and credit, as used in the act of congress, mean the same thing as the term effect, and that this effect being the same in the state where they are used, as in the state where the judgments are rendered, they are in all respects