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GILA BEND RESERVOIR & IRRIGATION | dence,"-the decree and opinion of the su

COMPANY, Appt.,

V.

GILA WATER COMPANY.

Judgment-res judicata-jurisdiction.

The jurisdiction of a territorial court to order a sale of property by a receiver appointed in an earlier action without formally extending the receivership to the suit in which the decree of sale was made cannot be collaterally attacked by a party to such suit after unsuccessfully prosecuting appeals to both the territorial supreme court and the Supreme Court of the United States, in which the jurisdictional question was not presented. *

[No. 226. October Term, 1905.]

preme court, and a statement of facts pre-
pared for the review by this court. The
opinion was filed March 26, 1904, and the
statement of facts allowed February 21,
1905, nearly a year after the decision. In
addition there appears a motion made in
the supreme court by the appellee to strike
from the files the abstract of record for
several reasons, one of which was that it
did not contain the findings of fact and the
conclusions of law of the district court.
This is followed by the suggestion of a dim-
inution of the record in what purports to be
these findings and conclusions. It does not
appear that any action was taken by the
supreme court upon this motion, or any
leave given to amend the record by the addi-

Petition for rehearing filed January 7, 1907. tion of the findings and conclusions.
Decided April 8, 1907.

APPEAL from the Supreme Court of the

Territory of Arizona to review a decree which affirmed a decree of the District Court of Maricopa County, in that Territory, in favor of defendant in a suit to quiet title. Petition for rehearing denied.

We copy in full the statement of facts prepared and allowed by the supreme court: "Statement of facts in this case in the nature of a special verdict made by the supreme court of the territory of Arizona, and also rulings of the court below on the admission and rejection of evidence as excepted to on the foregoing transcript of the record in the above-entitled cause, to be used by appellant herein in its appeal to the Su

See same case below (Ariz.) 76 Pac. 990.
The facts are stated in the opinion.
Messrs. Hugh T. Taggart and William C. preme Court of the United States.

Prentiss for appellant.

Mr. C. F. Ainsworth for appellee.

"That the above-entitled cause was tried in the court below upon the complaint, which was the statement of a cause of

Mr. Justice Brewer delivered the opinion action to quiet title to the property deof the court:

During the October term, 1905, and on May 14, 1906 (202 U. S. 270, 50 L. ed. 1023, 26 Sup. Ct. Rep. 615), the decree of the supreme court of the territory of Arizona in this case was affirmed. On May 26 (the last day of the term) an order was entered which in effect continued the jurisdiction of this court to the present term, giving opportunity to appellant to present a petition for rehearing during the vacation. That petition was presented, and, in the early part of this term, after full consideration, was denied. Subsequently, lest in the confused state of the record it might be supposed by either of the parties that the facts had been misapprehended, we, on January 7, 1907, entered an order withdrawing the memorandum denying the petition for rehearing, and granting leave to counsel on both sides to file such additional briefs as they desired. In pursuance of this leave briefs on both sides have been filed, and we have again examined the record.

scribed in said complaint against the defendants therein mentioned; the amended answer of the Gila Water Compary, one of the said defendants, denying the plaintiff in said complaint being the owner of the property therein described, said defendant further alleging peaceable and adverse possession of the property described in plaintiff's complaint under the title and color of title for more than three years preceding the date of the commencement of the above action, and also alleging peaceable and adverse possession of said property for more than five years before the commencement of the suit, using and enjoying the same, paying taxes thereon, claiming under deeds duly recorded; the cross complaint of said defendant, Gila Water Company, claiming to be the owner in fee simple of all the property described in plaintiff's complaint in said cause, and the answer of appellant herein to said Gila Water Company's cross complaint;

"That all of the other defendants mentioned in said complaint answered and disclaimed any right, title, and interest in and to the property described in said complaint;

This consists of the pleadings, the decree in favor of the defendant, a bill of exceptions divided into two parts,-one being a statement of exceptions, and the other a narrative of the "circumstances and evi*Ed. Note. For cases in point, see vol. 30, Cent. Dig. Judgment, § 1237.

"That this supreme court adopts and makes a part of this statement of facts the bill of exceptions in this case, part I., ex

"That no order was made in the court below consolidating the case known as No. 1728 in the trial court and the case known as No. 1996 in the same court, said cases being those the record of which is referred to in the above-mentioned bill of exceptions; "That the receiver appointed in said case No. 1728 made the sale and executed the deed under which the Gila Water Company, appellee, claims title to the property in dispute; that no order was in terms made extending the receivership in said case No. 1728 to said case No. 1996, the latter case being the one in which said receiver made said sale, and, by the judgment rendered therein, assumed to convey the title to said property; that the only orders made in said case No. 1996 relating to said receivership are those dated May 29, 1894, November 23, 1898, July 21, 1894, November 20, 1894, and January 10, 1895, referred to in said bill of exceptions.

ceptions, part II., circumstances and evi- plete, but it is helped by a reference to the dence, as certified and signed on the 24th | bill of exceptions in the trial court, which day of November, 1902, by Hon. Edward is adopted and made part of the statement. Kent, the presiding judge who tried this True, much of the matter in this bill is a cause below, the same as if it were set mere recital of testimony, but we find in it forth at length herein; copies of certain orders and decrees. Putting all together, we are enabled to see clearly the scope of the inquiry. It appears that prior to this litigation two suits were brought in the trial court, one numbered 1728 and the other 1996. The appellant was defendant in the latter. In the first an order was made December 6, 1893, appointing James McMillan receiver of the property now in question. The complaint in suit No. 1996, alleging that the court had already appointed a receiver in the prior case, prayed the appointment of a receiver or an enlargement of the powers of the one then acting, and that he take possession of the property and sell the same to pay the debts. No order appears of record in terms either consolidating the two cases or extending the receivership in case No. 1728 to case No. 1996. A decree was entered in suit No. 1996, of date November 20, 1894, which, after finding the amounts due certain creditors, adjudged and decreed "that James McMillan, the receiver heretofore appointed by this court, and now in possession of said premises, under the orders of this court, proceed to advertise and sell said property and distribute the proceeds as directed in the decree." On January 3, 1895, a report, bearing a double heading, to wit. the titles and headings of both suits Nos. 1728 and 1996, and purporting to be of a sale of the property by James McMillan, receiver, under the order and decree in suit No. 1996, was filed in the court, and on January 10, 1895, an order bearing the same double heading of the two suits was entered, confirming that sale. Subsequently a deed of the property to the purchaser was executed, purporting to be from the receiver duly appointed in the two equity suits, with titles and numbers as above.

"That from the foregoing record and facts, the court finds that plaintiff and appellant herein, Gila Bend Reservoir & Irrigation Company, a corporation, has not and did not have, at the commencement of this action, any cause of action in respect to, nor did it have and has not now any right, title, or interest in and to the property or any part thereof mentioned and described in the complaint herein; that the defendant appellee, Gila Water Company, a corporation, was, at the time of the commencement of this action and is now, the owner in fee simple and in possession of all the property mentioned and described in plaintiff's complaint herein."

Appellant invokes the doctrine laid down in Herrick v. Boquillas Land & Cattle Co. 200 U. S. 96, 98, 50 L. ed. 388, 389, 26 Sup. Ct. Rep. 192; Harrison v. Perea, 168 U. S. 311, 323, 42 L. ed. 478, 482, 18 Sup. Ct. Rep. 129, and cases cited in the opinion, to the effect that our jurisdiction on an appeal from the supreme court of a territory, "apart from exceptions duly taken to rulings on the admission or rejection of evidence, is limited to determining whether the findings of facts support the judgment." Of course, if there are no findings or statement of facts and no exceptions in respect to the introduction or rejection of testimony, the decree will be affirmed, if responsive to the allegations of the pleadings.

The decree in suit No. 1996 was appealed to the territorial and United States Supreme Courts, and affirmed by each of them. The briefs of appellant in the territorial supreme court show that the question of the jurisdiction of a court, in a particular case, over property in its actual possession, was not presented. In the brief of appellant filed in this case this statement appears:

"So confident were counsel of the lack of equity in the bill and of reversal by the appellate courts that the fundamental question of jurisdiction, now urged, was overlooked.

The statement of facts prepared by the "Indeed, the attention of counsel was so supreme court, standing by itself, is incom-centered upon that point and the question

of change of venue that in the brief in this | court it was even stated that the receiver had been appointed upon motion of the plaintiffs in suit No. 1996, and that the decree therein of November 20, 1894, provided for the appointment of a receiver."

It is now contended that, inasmuch as the question is one of jurisdiction, neither the omission to call attention to the matter in the prior litigation nor the misrecital of fact operates to render the decree in that case res judicata upon the question, but leaves the matter open for present inquiry. Counsel are mistaken. In that litigation the present appellant was the defendant. The property was in the possession of the court, even if held under a prior receivership. The decree directed its sale. It was sold. The sale was confirmed, the deed made, and the property delivered to the purchaser. The appellant at least cannot now question the jurisdiction of the court in that suit, or the title which it conveyed to the purchaser at the sale. A failure to make a defense by a party who is in court is, generally speaking, equivalent to making a defense and having

it overruled.

JAMES B. SWING, as Trustee for the Cred-
itors of the Union Mutual Fire Insurance
Company of Cincinnati, Ohio (Formerly a
Corporation), Plff. in Err.,

V.

WESTON LUMBER COMPANY. Error to state court-Federal questionhow raised. A decision of the Michigan supreme court that a foreign mutual insurance company which had not been authorized to do business in the state as provided by the state statutes could not maintain a suit to collect assessments due on a policy issued by one of its agents in another state igan who was unable to place the whole line on request of an insurance broker in Michin his own authorized companies cannot be reviewed in the Supreme Court of the United States, where the only showing of a Federal question raised before judgment is made by a request for a finding as matter of law that the state statutes do not, and could not, under the Federal Constitution, outside the state and there procuring insurprohibit the insured from going or sending ance on its property located in the state from an insurance company not authorized to do business therein, which is entirely inadequate for the purpose. *

[No. 145.]

1907.

N ERROR to the Supreme Court of the

Further, in the opinion heretofore filed, after referring to the declaration of the supreme court of the territory that the trial "court, by its action, ratified the acts of the receiver in the second suit, and thereby, in Argued January 10, 1907. Decided April 8, effect, extended his power and authority as such receiver to such second suit," we said (p. 274, L. ed. p. 1025, Sup. Ct. Rep. p. 616): "The objection made by the appellant to it is, as we have indicated, that suit No. 1996 was a proceeding in rem, and that the court and not acquire jurisdiction of the property for the reason that it was in the custody of the court in suit No. 1728, and that the court in the latter case did not extend the receivership to the No. 1996, nor consolidate the suits, and, therefore, had no power to order the sale of the property by the receiver in No. 1728.

"This is tantamount to saying that the absence of formal orders by the court must prevail over its essential action. It is clear from the record that the district court considered the cases pending before it at the same time, considered No. 1996 as the complement of No. 1728, regarded the cases in fact as consolidated, and empowered the receiver appointed in 1728 to sell the property and distribute the proceeds as directed by the decree in 1996."

Nothing further need be added to show that the case was rightly decided. The petition for a rehearing is denied.

State of Michigan to review a judgment which affirmed a judgment of the Circuit Court of Schoolcraft County, in that state, in favor of defendant in a suit to collect assessments due on a policy of insurance issued by a foreign insurance company not entitled to do business in the state. Dismissed for want of jurisdiction.

See same case below, 140 Mich. 344, 103 N. W. 816.

The facts are stated in the opinion. Messrs. Patterson A. Reece and Virgil I. Hixson for plaintiff in error.

Mr. Edward C. Chapin for defendant in

error.

Mr. Chief Justice Fuller delivered the opinion of the court:

This action was brought in the circuit court of Schoolcraft county, Michigan, by Swing, trustee of the Union Mutual Fire Insurance Company, a corporation of Ohio, against the Weston Lumber Company, a corporation of Michigan, to collect its share as a policy holder of an assessment made by the order of the supreme court of Ohio

Mr. Justice Moody took no part in the in liquidating the liabilities of the insurance decision of this case.

company.

*Ed. Note.-For cases in point, see vol. 13, Cent. Dig. Courts, § 1080.

27 S.C.-32

The assessment against defendant was in, rectly or indirectly, in transacting or sorespect of a policy for $5,000 and a renewal liciting within this state any insurance busithereof on defendant's lumber and other ness for any person, persons, firm, or copartproperty at Manistique, Michigan. The in-nership who are nonresidents of this state, surance company was never licensed to do business in Michigan, and the defense was pleaded that it was a foreign corporation, not authorized to transact business in that state, and that the policies were issued in direct violation of the laws of Michigan, the company not having complied with those relating to foreign insurance companies doing business in the state; and that the contracts of insurance were at variance with and contrary to the settled policy of the state.

The case was tried by the court without a jury. At the conclusion of the trial plaintiff made requests for certain findings as matters of law, including this:

"11. That the statutes of this state do not and could not, under the Constitution of the United States, prohibit this defendant from going or sending outside of this state and there procuring insurance on property belonging to the defendant and located in this state, from an insurance company not authorized to do business in this state;" which the court refused.

Findings of fact and conclusions of law were made and filed. It was found, among other things, that

"In the latter part of the summer of 1889 defendant desired to increase the amount of insurance carried upon lumber accumulated in its yards, and made application to a local agency conducted by a banking institution of the town for a considerable addition to the line of its insurance already held in that agency. Not being able to write, in one risk, in its own companies, the amount of additional insurance desired, the local agency, through W. C. Marsh, an employee of the bank, who attended to its insurance business, placed twelve different policies with outside agencies. Part of this line of insurance was sent to George R. Lewis & Company, an agency of Minneapolis, Minnesota, through which concern the $5,000 insurance involved in this case was placed with the said Union Mutual Fire Insurance Company of Cincinnati, Ohio."

It was admitted that the insurance company had never complied with any of the requirements imposed by the statutes of Michigan on insurance companies of other states seeking to transact business in Michigan.

or for any fire or inland navigation insurance company or association, not incorporated by the laws [or] of this state, or to act for or in behalf of any person or persons, firm or corporation, as agent or broker, or in any other capacity, to procure, or assist to procure, a fire or inland marine policy or policies of insurance on property situated in this state, for any nonresident person, persons, firm, or copartnership, or in any company or association without this state, whether incorporated or not, without procuring or receiving from the commissioner of insurance the certificate of authority provided for in § 23 of an act entitled 'An Act Relative to the Organization of Fire and Marine Insurance Companies Transacting Business within This State,' approved April third, eighteen hundred and sixty-nine, as amended. Such certificate of authority shall state the name or names of the person, persons, firm, or copartnership, or the location of the company or association, as the case may be, and that the party named in the certificate has complied with the laws of this state, regulating fire, marine, and inland navigation insurance, and the name of the duly appointed attorney in this state on whom process may be served." Act of 1881, § 1.

(10467.) "But when, by the laws of this state, any act is forbidden to be done by any corporation, or by any association of individuals, without express authority by law, and such act shall have been done by a foreign corporation, it shall not be authorized to maintain any action founded upon such act, or upon any liability or obligation, express or implied, arising out of, or made or entered into in consideration of, such act."

Judgment was entered in favor of defendant, and affirmed, on error, by the supreme court of Michigan. 140 Mich. 344, 103 N. W. 816.

The supreme court held that a foreign mutual insurance company which had not been authorized to do business in Michigan as provided by its statutes could not maintain a suit to collect assessments due on a policy issued by one of its agents in another state on request of an insurance broker of Michigan who was unable to place the whole line in his own authorized companies. Seamans v. Temple Co. 105 Mich. 400, 28 L.R.A. 430, 55 Am. St. Rep. 457, 63 N. W. 408, citing many cases, was referred to and quoted (5157.) "That it shall be unlawful for from. It appeared therefrom that it had any person or persons, as agent, solicitor, been for years the policy of the state to surveyor, broker, or in any other capacity, limit the business of insurance to such corto transact or to aid in any manner, di-porations, domestic and foreign, as should

Sections 5157 and 10467 of the Compiled Laws of Michigan of 1897 are as follows:

be authorized to do business, after compli- | dences of such credits are kept at the home ance with certain regulations and conditions office at all times when not needed in the prescribed by law, and that the statutes state. *

were intended to be prohibitory in their character.

[No. 199.]

1907.

The power of the state to prohibit foreign | Argued January 31, 1907. Decided April 8, insurance companies from doing business within its limits, or, in allowing them to do wo, to impose such conditions as it pleases, is undoubted. Hooper v. California, 155 U. S. 648, 39 L. ed. 297, 5 Inters. Com. Rep. 610, 15 Sup. Ct. Rep. 207; Security Mut. L. Ins. Co. v. Prewitt, 202 U. S. 246, 50 L. ed. 1013, 26 Sup. Ct. Rep. 619; Chattanooga Nat. Bldg. & L. Asso. v. Denson, 189 U. S. 408, 47 L. ed. 870, 23 Sup. Ct. Rep. 630.

What was held here on the facts was that the contract was brought about and completed in Michigan by a representative of the foreign corporation. So far as defendant was concerned its application for insurance was made and the business was done with the home office at Manistique, with

which it was in the habit of doing business. It was not a case of defendant "going or sending outside of this state and there procuring insurance on property belonging to the defendant and located in this state from an insurance company not authorized to do business in this state," as supposed in plaintiff's eleventh request for finding. That request is the only pretense in the record of a Federal question being raised prior to the judgments below, and was entirely inadequate for that purpose. Naturally enough, neither the circuit court nor the supreme court referred to any Federal question what

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Taxes-situs-property of nonresidents.

State of Louisiana to review a judgment which, reversing in part a judgment of the Civil District Court of the Parish of Orleans, in that state, sustained a tax on credits arising out of loans made by the local agent of a foreign insurance company to its

policy holders. Affirmed.

See same case below, 115 La. 698, 39 So. 846.

The facts are stated in the opinion. Messrs. Charles Pollard Cocke, William Wirt Howe, and Walker B. Spencer for plaintiff in error.

Messrs. H. Garland Dupré, George H. Ter

riberry, F. C. Zacharie, and Samuel L. Gil

more for defendants in error.

Mr. Justice Moody delivered the opinion of the court:

This is a writ of error to review the judgment of the supreme court of Iouisiana, which sustained a tax on the "credits, money loaned, bills receivable," etc., of the plaintiff in error, a life insurance company incorporated under the laws of New York, where it had its home office and principal place of business. It issued policies of life insurance in the state of Louisiana, and, for the purpose of doing that and other business, had a resident agent, called a superintendent, whose duty it was to superintend the company's business generally in the state. The agent had a local office in New Orleans. The company was engaged in the business of lending money to the holders of its policies, which, when they had reached a certain point of maturity, were regarded as furnishing adequate security for loans. The money lending was conducted in the following manner: The policy holders desiring to obtain loans on their policies applied to the company's agent in New Orleans. If the agent thought a loan a desirable one he advised the company of the application by communicating with the home office in New York, and requested that the loan be granted. If the home office approved the loan the company forwarded to the agent a check for the amount, with a note, to be signed by the borrower. The agent procured the note to be signed, attached the policy to it, and forwarded both note and policy to the home of

State taxation of credits arising out of loans made in the regular course of business by the local agent of a foreign insurance company to its policy holders is not forbidden by U. S. Const. 14th Amend., where the loans were negotiated, the notes signed, the security taken, the interest collected, fice in New York. He then delivered to the and the debts paid within the state, because borrower the amount of the loan. When inthe promissory notes which are the evi- terest was due upon the notes it was paid *Ed. Note.-For cases in point, see vol. 45, Cent. Dig. Taxation, §§ 8, 9, 439.

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