Allen v. Alleghany Co.
196 U.S. 458
SCOTUS
1905
Check Treatment
Mr. Justice Brown-,

after, making the foregoing statement, delivered the opinion of the ..court.

The 'defendants,- plaintiffs in error -here,. pleaded .that the ■note upon which-suit was brought was executed in the State of New York, and that under the laws of that State no-foréign corporation^ could do business thefe without a certificate of the .Secretary of State that it had complied with all the requirements of law to authorize it to'do'business there; and that no such corporation could maintain any action in that State unless, prior to the making of Such contract, it had procured such certificate; that plaintiff was a foreign corporation within the meaning of- the law,, and had not procured a certificate.

-The third plea wás similar in. terms, averring the 'note to have been made in Pennsylvania, whose statutes 'provided, that foreign corporations should do no" business' in the State ■without fifing .a certain statement in the Secretary’s office and procuring the certificate of the Secretary of the Commonwealth, and further providing-that the agent .of-any foreign corporation transacting business within the State, without complying-with- the provisions of the law, should be' deemed guilty 6f a misdemeanor. The plea also averred non-compliance With ..-those provisions..

■ Both the Supreme Court' and the Court of Errors and Appeals held that a contract, made in contravention - of these '.statutory regulations, though not enforcible in the-courts of *463 New York and Pennsylvania,.-. was not ipso facto void, and might be,, notwithstanding such statutes, énforced in New Jersey.

Plaintiffs ■ in error insist that by this ruling full faith-and credit was denied by-the courts of New Jersey to. the statutes of New York and-Pennsylvania, in contravention' to. section -1, Article IV, of the Constitution.' ' .

By section 709 of the Revised Statutes, authorizing writs of error t'o the state courts,- it is declared-that final judgments,, .where is drawn in question the validity of a statute of any State, or any ■ authority 'exercised under any State,, on the. ground .of their being repugnant to the Constitution, etc., and . the decision is in favor of their validity, may be reexamined' here.

But the validity of these statutes was riot denied. The case turned upon -their construction and the effect to be given to them.in another State. The New York statute directly,-and the Pennsylvania indirectly, forbade the.maintenance of act.ioris "in this State.” The Pennsylvania statute made it a-misdemeanor to transact business without complying with-the daw. Neither statute declared the contract so made to be. void, and it was apparently upon this ground that -the ■ New Jersey courts held that the case did not fall within those decisions,-wherein it is declared that a . contract void by the lex loci contractus is void everywhere.

In several cases wé have held that the construction of a statute of another State and its operation elsewhere did not necessarily involve a Federal question. The case is practically governed by that of the Chicago & Alton R. R. v. Wiggins Ferry Co., 119 U. S. 615. In that.case suit was brought-in á state court by the ferry coinpany against' .the railroad to recover -damages' for not employing the, ferry company for the transportation of persons and property across the river, as by'jts contract.it was bound to do. The defendant pleaded that it had np power to make the contract; that the-same was in violation of the laws of Illinois, contrary to the public policy *464 thereof and was void. The statutes were put in evidence, but their construction and operative effect w'ere disputed. The Supreme Court of the State held that the contract was interpreted correctly by the court below, and that it was not ultra vires, contrary to public policy, or in restraint of trade. It was argued here by the railroad company that by law and usage of Illinois, the charter of the company in that State made the contract ultra vires. 'We held that the law of Illinois to that effect should have been proved as a fact, either by decisions of its courts or by law or usage in that State; that state, courts are not charged with a knowledge of the laws of another State; but they have to be proved, and that while Federal courts, exercising their original jurisdiction are bound to take notice of the laws of the several States, yet this court, when exercising its appellate jurisdiction from state courts, whatever'was the matter of fact in that court is'matter of fact here, citing Hanley v. Donoghue, 116 U. S. 1. We said: “Whether the charter of this company, in its operation on the contract now in suit, had any different effect in Illinois from what it would have, according to the principles of general-law which govern like charters and like contracts, in Missouri and elsewhere throughout the country, was, under this rule, a question of fact in the Missouri court, as to which no testimony whatever was offered.”

No proof having been offered to support the. averment that the contract was in violation of the laws of Illinois, the defense relying on the general claim that the contract was illegal, it was held that no Federal question was involved, and the case was dismissed. It was said that it should have appeared on the face of the record that the facts presented for adjudication made i.t necessary for the court to consider the act of incorporation in view of the peculiar jurisprudence in Illinois, rather than the general law of the land.

Since the above case we have repeatedly held that the mere construction by a state court of a statute of another State without questioning its validity, does not, with possibly some *465 exceptions, deny to it the full faith and credit demanded by the statute in order to give this court jurisdiction. Glenn v. Garth, 147 U. S. 360; Lloyd v. Matthews, 155 U. S. 222; Banholzer v. New York Life Insurance Co., 178 U. S. 402; Johnson v. New York Life-Ins. Co., 187 U. S. 491; Finney v. Guy, 189 U. S. 335.

The Court of Errors -and Appeals, conceding the general rule both in .New Jersey and New York to be that a contract, void by the law of the State where made; will not be enforced in the State of the forum. Columbia Fire Insurance Co. v. Kenyon, 37. N. J. Law 33 and Hyde v. Goodnow, 3 N. Y. 266 held that the state statute of New York did not declare the contract void, and that there was no decision in that State holding it to be so. In fact the only case in the Court of Appeals in New York, Neuchatel Asphalte Co. v. Mayor, 155 N. Y. 373, is the other way. The Court of Appeals in that case held that the purpose of the aut was not to avoid contracts, but to provide effective supervision and control of the business carried on by foreign corporations; that no penalty for non-compliance was provided,- except the suspension of civil remedies in that State, and none others would be implied. This, corresponds with our rulings upon similar questions. Fritts v. Palmer, 132 U. S. 282.

With respect'to the Pennsylvania statute, the court held that, although the Pennsylvania courts had held that a contract. made in violation of the Pennsylvania statute was void, yet that the third plea did not contain allegations which showed -that the note was given -in pursuance of business carried on in Pennsylvania, and not in consummation of a single transáctión; and although it was averred that plaintiff did business in .that State, it was not averred that the note had any connection with the business carried on in Pennsylvania, or that it was given for goods sold in Pennsylvania. The admitted averments may be true, and yet the note may have been given for an obligation contracted out of the State of Pennsylvania, and consequently, not in violation of its laws. *466 Construing the third plea most strongly against the pleader, the conclusion was that it disclosed no defense in the action. This was purely a local question, and is not assignable as error here.

Whether, aside from the Federal question discussed, the courts of New Jersey should have sustained this action upon principles of comity'between the States, was also a question within the exclusive jurisdiction of the state court. Finney v. Guy, 189 U. S. 335.

The writ of error must, therefore, be

Dismissed.