The Constitution of the United States of America: Analysis and Interpretation Part 125

Appearing to revive Williams II, and significant for the social consequences produced by the result decreed therein, is the recent case of Rice _v._ Rice.[69] To determine the widowhood status of the party litigants in relation to inheritance of property of a husband who had deserted his first wife in Connecticut, had obtained an _ex parte_ divorce in Nevada, and after remarriage, had died without ever returning to Connecticut, the first wife, joining the second wife and the administrator of his estate as defendants, pet.i.tioned a Connecticut court for a declaratory judgment. After having placed upon the first wife the burden of proving that the decedent had not acquired a _bona fide_ domicile in Nevada, and after giving proper weight to the claims of power by the Nevada court, the Connecticut court concluded that the evidence sustained the contentions of the first wife; and in so doing, it was upheld by the Supreme Court. The cases of Sherrer _v._ Sherrer, 334 U.S. 343 (1948) and Coe _v._ Coe, 334 U.S. 378 (1948), previously discussed, were declared not to be in point; inasmuch as no personal service was made upon the first wife, nor did she in any way partic.i.p.ate in the Nevada proceedings. She was not, therefore, precluded from challenging the finding of the Nevada court that the decedent was, at the time of the divorce, domiciled in that State.[70]

STATE OF THE LAW TODAY: QUAERE

Upon summation one may speculate as to whether the doctrine of divisible divorce, as developed by Justice Douglas in Estin _v._ Estin, 334 U.S.

541 (1948), has not become the prevailing standard for determining the enforceability of foreign divorce decrees. If such be the case, it may be tenable to a.s.sert that an _ex parte_ divorce, founded upon acquisition of domicile by one spouse in the State which granted it, is effective to destroy the marital status of both parties in the State of domiciliary origin and probably in all other States and therefore to preclude subsequent prosecutions for bigamy, but not to alter rights as to property, alimony, or custody of children in the State of domiciliary origin of a spouse who was neither served nor personally appeared.

DECREES AWARDING ALIMONY, CUSTODY OF CHILDREN

Resulting as a by-product of divorce litigation are decrees for the payment of alimony, judgments for accrued and unpaid instalments of alimony, and judicial awards of the custody of children, all of which necessitate application of the full faith and credit clause when extrastate enforcement is sought for them. Thus a judgment in State A for alimony in arrears and payable under a prior judgment of separation which is not by its terms conditional, nor subject by the law of State A to modification or recall, and on which execution was directed to issue, is ent.i.tled to recognition in the forum State. Although an obligation for accrued alimony could have been modified or set aside in State A prior to its merger in the judgment, such a judgment, by the law of State A, is not lacking in finality.[71] As to the finality of alimony decrees in general, the Court had previously ruled that where such a decree is rendered, payable in future instalments, the right to such instalments becomes absolute and vested on becoming due, provided no modification of the decree has been made prior to the maturity of the instalments.[72] However, a judicial order requiring the payment of arrearages in alimony, which exceeded the alimony previously decreed, is invalid for want of due process, the respondent having been given no opportunity to contest it.[73] "A judgment obtained in violation of procedural due process," said Chief Justice Stone, "is not ent.i.tled to full faith and credit when sued upon in another jurisdiction."[74]

A recent example of a custody case was one involving a Florida divorce decree which was granted _ex parte_ to a wife who had left her husband in New York, where he was served by publication. The decree carried with it an award of the exclusive custody of the child, whom the day before the husband had secretly seized and brought back to New York. The Court ruled that the decree was adequately honored by a New York court when, in _habeas corpus_ proceedings, it gave the father rights of visitation and custody of the child during stated periods, and exacted a surety bond of the wife conditioned on her delivery of the child to the father at the proper times,[75] it having not been "shown that the New York court in modifying the Florida decree exceeded the limits permitted under Florida law. There is therefore a failure of proof that the Florida decree received less credit in New York than it had in Florida."

COLLATERAL ATTACK BY CHILD

A Florida divorce decree was also at the bottom of another recent case in which the daughter of a divorced man by his first wife, and his legatee under his will, sought to attack his divorce in the New York courts, and thereby indirectly his third marriage. The Court held that inasmuch as the attack would not have been permitted in Florida under the doctrine of _res judicata_, it was not permissible under the full faith and credit clause in New York.[76] On the whole, it appears that the principle of _res judicata_ is slowly winning out against the principle of domicile.

Decrees of Other Types

PROBATE DECREES

Many judgments, enforcement of which has given rise to litigation, embrace decrees of courts of probate respecting the distribution of estates. In order that a court have jurisdiction of such a proceeding, the decedent must have been domiciled in the State, and the question whether he was so domiciled at the time of his death may be raised in the court of a sister State.[77] Thus, when a court of State A, in probating a will and issuing letters, in a proceeding to which all distributees were parties, expressly found that the testator's domicile at the time of death was in State A, such adjudication of domicile was held not to bind one subsequently appointed as domiciliary administrator c.t.a. in State B, in which he was liable to be called upon to deal with claims of local creditors and that of the State itself for taxes, he having not been a party to the proceeding in State A. In this situation, it was held, a court of State C, when disposing of local a.s.sets claimed by both personal representatives, was free to determine domicile in accordance with the law of State C.[78] Similarly, there is no such relation of privity between an executor appointed in one State and an administrator c.t.a. appointed in another State as will make a decree against the latter binding upon the former.[79] On the other hand, judicial proceedings in one State, under which inheritance taxes have been paid and the administration upon the estate has been closed, are denied full faith and credit by the action of a probate court in another State in a.s.suming jurisdiction and a.s.sessing inheritance taxes against the beneficiaries of the estate, when under the law of the former State the order of the probate court barring all creditors who had failed to bring in their demand from any further claim against the executors was binding upon all.[80]

What is more important, however, is that the _res_ in such a proceeding, that is, the estate, in order to ent.i.tle the judgment to recognition under article IV, section 1, must have been located in the State or legally attached to the person of the decedent. Such a judgment is accordingly valid, generally speaking, to distribute the intangible property of the decedent, though the evidences thereof were actually located elsewhere.[81] This is not so, on the other hand, as to tangibles and realty. In order that the judgment of a probate court distributing these be ent.i.tled to recognition under the Const.i.tution, they must have been located in the State; as to tangibles and realty outside the State, the decree of the probate court is entirely at the mercy of the _lex rei sitae_.[82] So, the probate of a will in one State, while conclusive therein, does not displace legal provisions necessary to its validity as a will of real property in other States.[83]

ADOPTION DECREES

That a statute legitimizing children born out of wedlock does not ent.i.tle them by the aid of the full faith and credit clause to share in the property located in another State is not surprising, in view of the general principle--to which, however, there are exceptions (_see_ pp.

675-682)--that statutes do not have extraterritorial operation.[84] For the same reason adoption proceedings in one State are not denied full faith and credit by the law of the sister State which excludes children adopted by proceedings in other States from the right to inherit land therein.[85]

GARNISHMENT DECREES

A proceeding which combines some of the elements of both an _in rem_ and an _in personam_ action is the proceeding in garnishment cases. Suppose that A owes B and B owes C, and that the two former live in a different State than C. A, while on a brief visit to C's State, is presented with a writ attaching his debt to B and also a summons to appear in court on a named day. The result of the proceedings thus inst.i.tuted is that a judgment is entered in C's favor against A to the amount of his indebtedness to B. Subsequently A is sued by B in their home State, and offers the judgment, which he has in the meantime paid, in defense. It was argued in behalf of B that A's debt to him had a _situs_ in their home State, and furthermore that C could not have sued B in this same State without formally acquiring a domicile there. Both propositions were, however, rejected by the Court, which held that the judgment in the garnishment proceedings was ent.i.tled to full faith and credit as against C's action.[86]

FRAUD AS A DEFENSE TO SUITS ON FOREIGN JUDGMENTS

As to whether recognition of a State judgment can be refused by the forum State on other than jurisdictional grounds, there are _dicta_ to the effect that judgments, for which extraterritorial operation is demanded under article IV, section I and acts of Congress, are "impeachable for manifest fraud." But unless the fraud affected the jurisdiction of the court, the vast weight of authority is against the proposition. Also it is universally agreed that a judgment may not be impeached for alleged error or irregularity,[87] or as contrary to the public policy of the State where recognition is sought for it under the full faith and credit clause.[88] Previously listed cases indicate, however, that the Court has in fact permitted local policy to determine the merits of a judgment under the pretext of regulating jurisdiction.[89] Thus in one case, Cole _v._ Cunningham,[90] the Court sustained a Ma.s.sachusetts court in enjoining, in connection with insolvency proceedings inst.i.tuted in that State, a Ma.s.sachusetts creditor from continuing in New York courts an action which had been commenced there before the insolvency suit was brought. This was done on the theory that a party within the jurisdiction of a court may be restrained from doing something in another jurisdiction opposed to principles of equity, it having been shown that the creditor was aware of the debtor's embarra.s.sed condition when the New York action was inst.i.tuted. The injunction unquestionably denied full faith and credit and commanded the a.s.sent of only five Justices.

PENAL JUDGMENTS: TYPES ENt.i.tLED TO RECOGNITION

Finally, the clause has been interpreted in the light of the "incontrovertible maxim" that "the courts of no country execute the penal laws of another."[91] In the leading case of Huntington _v._ Attrill,[92] however, the Court so narrowly defined "penal" in this connection as to make it substantially synonymous with "criminal," and on this basis held a judgment which had been recovered under a State statute making the officers of a corporation who signed and recorded a false certificate of the amount of its capital stock liable for all of its debts, to be ent.i.tled under article IV, section 1, to recognition and enforcement in the courts of sister States. Nor, in general, is a judgment for taxes to be denied full faith and credit in State and federal courts merely because it is for taxes.[93]

Recognition of Rights Based Upon Const.i.tutions, Statutes, Common Law

THE EARLY RULE

As to the extrastate protection of rights which have not matured into final judgments, the full faith and credit clause has never abolished the general principle of the dominance of local policy over the rules of comity.[94] This was stated by Justice Nelson in the Dred Scott case, as follows: "No State, * * *, can enact laws to operate beyond its own dominions, * * * Nations, from convenience and comity, * * *, recognizes [sic] and administer the laws of other countries. But, of the nature, extent, and utility, of them, respecting property, or the state and condition of persons within her territories, each nation judges for itself; * * *" He added that it was the same with the States of the Union in relation to another. It followed that even though Dred had become a free man in consequence of his having resided in the "free"

State of Illinois, he had nevertheless upon his return to Missouri, which had the same power as Illinois to determine its local policy respecting rights acquired extraterritorially, reverted to servitude under the laws and judicial decisions of that State.[95]

DEVELOPMENT OF THE MODERN RULE

In a case decided in 1887, however, the Court remarked: "Without doubt the const.i.tutional requirement, Art. IV, -- I, that 'full faith and credit shall be given in each State to the public acts, records, and judicial proceedings of every other State,' implies that the public acts of every State shall be given the same effect by the courts of another State that they have by law and usage at home."[96] And this proposition was later held to extend to State const.i.tutional provisions.[97] More recently this doctrine has been stated in a very mitigated form, the Court saying that where statute or policy of the forum State is set up as a defense to a suit brought under the statute of another State or territory, or where a foreign statute is set up as a defense to a suit or proceedings under a local statute, the conflict is to be resolved, not by giving automatic effect to the full faith and credit clause and thus compelling courts of each State to subordinate its own statutes to those of others, but by appraising the governmental interest of each jurisdiction and deciding accordingly.[98] Obviously this doctrine endows the Court with something akin to an arbitral function in the decision of cases to which it is applied.

TRANSITORY ACTIONS: DEATH STATUTES

The initial effort in this direction was made in connection with transitory actions based on statute. Earlier, such actions had rested upon the common law, which was fairly uniform throughout the States, so that there was usually little discrepancy between the law under which the plaintiff from another jurisdiction brought his action (_lex loci_) and the law under which the defendant responded (_lex fori_). In the late seventies, however, the States, abandoning the common law rule on the subject, began pa.s.sing laws which authorized the representatives of a decedent whose death had resulted from injury to bring an action for damages.[99] The question at once presented itself whether, if such an action was brought in a State other than that in which the injury occurred, it was governed by the statute under which it arose or by the law of the forum State, which might be less favorable to the defendant.

Nor was it long before the same question presented itself with respect to transitory action _ex contractu_, where the contract involved had been made under laws peculiar to the State where made, and with those laws in view.

ACTIONS UPON CONTRACT: WHEN GOVERNED BY LAW OF PLACE OF MAKING

In Chicago and Alton R.R. _v._ Wiggins,[100] referred to above, the Court, confronted with the latter form of the question, indicated its clear opinion that in such situations it was the law under which the contract was made, not the law of the forum State, which should govern.

Its utterance on the point was, however, not merely _obiter_; it was based on an error, namely, the false supposition that the Const.i.tution gives "acts" the same extraterritorial operation as the act of 1790 does "judicial records and proceedings." Notwithstanding which, this dictum is today the basis of "the settled rule" that the defendant in a transitory action is ent.i.tled to all the benefits resulting from whatever material restrictions the statute under which plaintiff's right of action originated sets thereto, except that courts of sister States cannot be thus prevented from taking jurisdiction in such cases.[101]

However, a State court does not violate the full faith and credit clause by mere error in construing the law upon which a transitory action from another state depends;[102] nor is a court of the forum State guilty of a disregard thereof when it entertains a suit based on a statute of another State, albeit the statute in terms limits actions thereunder to courts of the enacting State.[103] Moreover, in actions on contracts made in other States, a State const.i.tutionally may decline to enforce in its courts, as contrary to its own policy, the laws of such States relating to the right to add interest to the recovery as an incidental item of damages.[104]

STOCKHOLDER--CORPORATION RELATIONSHIP

Nor is it alone to defendants in transitory actions that the full faith and credit clause is today a shield and a buckler. Some legal relationships are so complex, the Court holds, that the law under which they were formed ought always to govern them as long as they persist.[105] One such relationship is that of a stockholder and his corporation. Hence, if a question arises as to the liability of the stockholders of a corporation, the courts of the forum State are required by the full faith and credit clause to determine the question in accordance with the Const.i.tution, laws and judicial decisions of the corporation's home State.[106] Ill.u.s.trative applications of the latter rule are to be found in the following cases. A New Jersey statute forbidding an action at law to enforce a stockholder's liability arising under the laws of another State, and providing that such liability may be enforced only in equity, and that in such a case the corporation, its legal representatives, all its creditors, and stockholders, should be necessary parties, was held not to preclude an action at law in New Jersey by the New York State superintendent of banks against 557 New Jersey stockholders in an insolvent New York bank to recover a.s.sessments made under the laws of New York.[107] Also, in a suit to enforce double liability, brought in Rhode Island against a stockholder in a Kansas trust company, the courts of Rhode Island were held to be obligated to extend recognition to the statutes and court decisions of Kansas whereunder it is established that a Kansas judgment recovered by a creditor against the trust company is not only conclusive as to the liability of the corporation but also an adjudication binding each stockholder therein. The only defenses available to the stockholder are those which he could make in a suit in Kansas.[108]

FRATERNAL BENEFIT SOCIETY--MEMBER RELATIONSHIP

And the same principle applies to the relationship which is formed when one takes out a policy in a "fraternal benefit society." Thus in Royal Arcanum v. Green,[109] in which a fraternal insurance a.s.sociation chartered under the laws of Ma.s.sachusetts was being sued in the courts of New York by a citizen of the latter State on a contract of insurance made in that State, the Court held that the defendant company was ent.i.tled under the full faith and credit clause to have the case determined in accordance with the laws of Ma.s.sachusetts and its own const.i.tution and by-laws as these had been construed by the Ma.s.sachusetts courts.

Nor has the Court manifested lately any disposition to depart from this rule. In Sovereign Camp _v._ Bolin[110] it declared that a State in which a certificate of life membership of a foreign fraternal benefit a.s.sociation is issued, which construes and enforces said certificate according to its own law rather than according to the law of the State in which the a.s.sociation is domiciled denies full faith and credit to the a.s.sociation's charter embodied in the statutes of the domiciliary State as interpreted by the latter's court. "The beneficiary certificate was not a mere contract to be construed and enforced according to the laws of the State where it was delivered. Entry into membership of an incorporated beneficiary society is more than a contract; it is entering into a complex and abiding relation and the rights of membership are governed by the law of the State of incorporation. [Hence] another State, wherein the certificate of membership was issued, cannot attach to membership rights against the society which are refused by the law of domicile." Consistently therewith, the Court also held, in Order of Travelers _v._ Wolfe,[111] that South Dakota, in a suit brought therein by an Ohio citizen against an Ohio benefit society, must give effect to a provision of the const.i.tution of the society prohibiting the bringing of an action on a claim more than six months after disallowance by the society, notwithstanding that South Dakota's period of limitation was six years and that its own statutes voided contract stipulations limiting the time within which rights may be enforced. Objecting to these results, Justice Black dissented on the ground that fraternal insurance companies are not ent.i.tled, either by the language of the Const.i.tution, or by the nature of their enterprise, to such unique const.i.tutional protection.

INSURANCE COMPANY, BUILDING AND LOAN a.s.sOCIATION--CONTRACTUAL RELATIONSHIPS

Whether or not distinguishable by nature of their enterprise, stock and mutual insurance companies and mutual building and loan a.s.sociations, unlike fraternal benefit societies, have not been accorded the same unique const.i.tutional protection; and, with few exceptions,[112] have had controversies arising out of their business relationships settled by application of the law of the forum State. In National Mutual B. & L.

a.s.so. _v._ Brahan,[113] the principle applicable to these three forms of business organization was stated as follows: Where a corporation has become localized in a State and has accepted the laws of the State as a condition of doing business there, it cannot abrogate those laws by attempting to make contract stipulations, and there is no violation of the full faith and credit clause in instructing a jury to find according to local law notwithstanding a clause in a contract that it should be construed according to the laws of another State.

Thus, when a Mississippi borrower, having repaid a mortgage loan to a New York building and loan a.s.sociation, sued in a Mississippi court to recover, as usurious, certain charges collected by the a.s.sociation, the usury law of Mississippi rather than that of New York was held to control. In this case, the loan contract, which was negotiated in Mississippi subject to approval by the New York office, did not expressly state that it was governed by New York law.[114] Similarly, when the New York Life Insurance Company, which had expressly stated in its application and policy forms that they would be controlled by New York law, was sued in Missouri on a policy sold to a resident thereof, the court of that State was sustained in its application of Missouri rather than New York law.[115] Also, in an action in a federal court in Texas to collect the amount of a life insurance policy which had been made in New York and later changed by instruments a.s.signing beneficial interest, it was held that questions: (1) whether the contract remained one governed by the law of New York with respect to rights of a.s.signees, rather than by the law of Texas, (2) whether the public policy of Texas permits recovery by one named beneficiary who has no beneficial interest in the life of the insured, and (3) whether lack of insurable interest becomes material when the insurer acknowledges liability and pays the money into court, were questions of Texas law, to be decided according to Texas decisions.[116]

Consistent with the latter holdings are the following two involving mutual insurance companies. In Pink _v._ A.A.A. Highway Express,[117]