119 N.C. 918 | United States District Court | 1897
This action was instituted inthe State Court for the County of McDowell to recover damages for personal injuries occurring in this State; and defendant availed itself of the right given by the Act of Congress of the 13th of August, 1888, to non-resident defendants, to remove an action pending in a State Court to the United States Circuit Court on the grounds of local prejudice, &e.
The application was received and considered, and this court adjudged that local prejudice did exist in said county as alleged and proved by evidence; and an order was made for the removal of this case from the State Court to this Court at Charlotte.
In the said order leave was granted to plaintiff to file a motion to remand at the next term of this Court; and such motion was duly made, and is now before this Court for determination.
“ 1st. That the O. R. & C. R. R. Co. is a corporation and citizen of North Carolina.
“2d. That this fact also appears in the record and pleadings.”
Prom this order in the State Court the defendant prayed an appeal, which was allowed, and the clerk was directed to send up a full transcript of the record, and all papers filed in the case.
On a hearing in the Supreme Court in the term just closed the Court affirmed the order of the Court below ; not upon the grounds stated in the order appealed from, although fully presented in the record, briefs and argument before the court; but upon a defect that appeared in the proceedings of this Court for the removal of the cause.
I concur in this decision of the Supreme Court founded upon the fact that “ it does not affirmatively appear, either in the petition, or in the order of removal, or anywhere else in the record, that the diverse citizenship of the parties existed also at the time of the commencement of the action.”
This decision is not important if the substantial grounds set forth in the order of the State Court are not well founded; for as the case was properly retained and is still pending in the State Court, and this Court acquired no jurisdiction, by reason of its defective proceedings, the defect mentioned could be remedied by the defendant filing a new petition, alleging the facts omitted by inadvertence, and obtaining a correct and legal order of removal; for common justice would require that the defendant should not be deprived of a substantial legal right by the nonobservance of his counsel and the court of a matter that is to some extent often refined and technical.
It is insisted on the part of the plaintiff that defendant is 'a domestic corporation for the purposes of this action, because in its answer it did not specifically answer to a positive allegation in the complaint that “it is a corporation incorporated under the laws of North Carolina, owning and operating a railway and doing business in said State as a common carrier of passengers and freight,” &c.
To this allegation the defendant made answer that it “ has not sufficient knowledge or information to deny or admit this allegation of the complaint, and denies the same.”
This Court is of opinion that this general denial by the defendant of the allegation of its legal existence as a domestic corporation is sufficient, and the only matters of fact admitted were due service of process and that it was an organized association acting as a corporation within this State. The plaintiff, on objection to this general denial of matter of law as indefinite and uncertain, could not on motion have obtained an order on defendant to make the answer more specific as to the legality of its domestic corporate existence, for the allegation contains matter of law. Matters of law, or mere inferences of law, are questions to be judicially noticed and determined by the Court, and such matters which are not proper subjects of traverse are not taken as admitted by pleading over. This matter of law was distinctly presented in the order of the State Court appealed from, and was the material point in the case; and the fact that the State Supreme Court, after full argument of counsel, failed to make adjudication of the point, tends strongly to show that the Court regarded the question of law as a matter of some difficulty and importance.
If the defendant is not a domestic but a foreign corporation, its failure in its answer to make specific denial of a direct and positive allegation of matters of law in the complaint, did not estop it from claiming a right of removal of this case from the State Court to this Court, under the provisions of the Act of Congress of the 13th of August, 1888.
The chief ground for the motion to remand — strongly insisted upon by counsel of plaintiff — is that the defendant, at the time of the injury sustained by plaintiff’s intestate, was a domestic corporation duly incorporated under the laws of the State of North Carolina, owning and operating a railway, and doing business in said State as a carrier of passengers and freight, &c.-; and being in fact and in law such domestic corporation it was not entitled, under the said Act of Congress, to the order of removal heretofore made by this Court, which has not now jurisdiction to retain and dispose of this case.
I have examined and considered this question of law with more than ordinary care, as the counsel of defendant in their briefs and arguments insisted that this Court, in the case of Hudson v. The C. C. C. R. R. Co., decided “that, for jurisdictional purposes, the C. C. C. R. R,. Co. was a foreign corporation within the State of North Carolina, and was a citizen of South Carolina; and that the act of the General Assembly of this State amounted only to a license, and did not create a new corporation.”
Many motions were made in this Court before the trial, and in some of them I may have expressed views as stated by counsel, and according to my recollection such were my impressions, but'the question was not fully argued and decided.
It now' appears from documentary proofs before this Court that the General Assembly of South Carolina, by an amendatory act of 22d December, 1885, recognized the pre-existing corporation of the Georgetown} and North Carolina Narrow Gauge Railroad Company, and gave it the name of the Charleston, Cincinnati and Chicago Railroad Company. Previous to this date there were existing in the State of North Carolina two duly chartered and organized domestic corporations, respectively known as the Rutherford Railway Construction Company, and the Rutherfordton, Marion and Tennessee Railway. These domestic corporations were desirous of consolidating with and merging into the said Charleston, Cincinnati and Chicago Railroad Company, so as to make a continuous line, and to extend the said road into and across the State of North Carolina, and to enable said road to be continued across the States of Tennessee, Virginia and Kentucky to the Ohio River.
By this act the Charleston, Cincinnati and Chicago Railroad Company was recognized and adopted as one corporation, with its consolidated organization for the purposes of the general management of its property, and conducting its business in the several States through which its railway should be constructed and operated. As it acquired the property and franchises of two domestic railway corporations of this State; and was also in express terms authorized and empowered to have and exercise all the powers, privileges and franchises to the extent conferred on the North Carolina Pailroad Company and other railroads in the Chapters of the State Code entitled “ Corporations ” and “ Railroads,” it became a domestic corporation, to be governed by the laws of this State as to its property and business situated and transacted therein ; and it also became liable to answer for all acts done within such territorial limits as a domestic corporation. Missouri Pacific Railway v. Mich, 69 Fed. Rep., 753, and cases cited.
This act was not a mere enabling act, granting a license to a foreign corporation to operate a railroad and transact other business in this State under chartered powers derived from the State of South Carolina; for this legislative grant conferred other important franchises which were accepted and exercised in this State in the construction and opera-tian of its railway to as full an extent as could have been done by a North Carolina corporation under the most liberal charters ever granted. Clark v. Barnard, 108 U. S., 436.
This act expressly authorized this consolidated corpora
In this decree it was ordered, adjudged and decreed “ That the Charleston, Cincinnati and Chicago ’.Railroad Company is a corporation organized and chartered by the States of North Carolina, South Carolina, Tennessee and Kentucky for the purpose of constructing, owning, controlling and operating a railroad, &c.” and the special master appointed was authorized and directed to advertise the premises, property and franchises of said company, and make sale as provided in decree. This decree was also entered as a decree of the Circuit Court of this district in the ancillary jmoceedings which had been regularly instituted and conducted. By virtue of this decree the Special Master made sale on the 2d May, 1893, and executed a
The said Charles E. Ilillier, after having been put in possession of said property and franchises, determined to form a new corporation in accordance with the laws of the State of North Carolina. 1 N. 0., Code, Section 697, 698, and 2005. In compliance with these sections, on the 20th of June, 1894, he executed under his hand and seal a declaration constituting a new corporation, to be invested with all the rights, powers, privileges and franchises of the Charleston, Cincinnati and Chicago R. R. Co., in this State. For the purpose of effecting a complete working organization he gave this new corporation, the name of Ohio River and Charleston Railroad Company of North Carolina ; appointed six directors and designated the amount of capítol stock, and the number of shares into which the capítol stock should be divided; and caused a certificate of such organization to be duly filed in the several counties of North Carolina in which the said railroad was situated.
On the 13th of November, 1894, the said Charles E. Eillier executed and delivered a deed to the Ohio River and Charleston Railway Company of North Carolina, conveying to said company so much of the property and the rights, privileges and franchises of the Charleston, Cincinnati^ and Chicago Railroad Company as were conveyed to him as purchaser by the Special Master, which are situated in the State of North Carolina, or were derived from the laws of said State.
The granting of the rights, privileges and powers which constitute the franchises of a corporation are matters under the control of the Legislature; and within the limits of constitutional power the Legislature may adopt by statute any mode of conferring and investing such corporate franchises ; or continuing the existence of those fran-
I have carefully examined and considered the cases cited by counsel of defendant and have the opinion that the principles announced do not conflict with the legal views I have expressed in relation to the facts of the case before the Court. I will cite only one case mentioned in briefs, as it refers to other cases relied upon by counsel of defendant. Goodlett v. L. & R. R. R., 122 U. S., 391.
I concur with counsel of defendant in their opinions that
The defendant in its petition for removal claimed to be a citizen-and resident of the State of South Carolina. It could not found this claim upon any relation which it had to the C. C. C. R. R. Co., for all of the title, estate, interest and equity of redemption of this company to the mortgaged premises, rights, property, assets and franchises were barred and forever foreclosed by the decree for sale and foreclosure made in the Circuit Court which was duly executed by the Special Master.
In the briefs of counsel residence and citizenship in South Carolina are founded upon the alleged facts that Charles E. Iiillier after his purchase “ obtained a charter by special act of the Legislature of Virginia, approved February 12, 1894, and filed certain articles of incorporation with the Secretary of State of South Carolina under the laws of said State. He, the said Iiillier, having conveyed the property and franchises of his said railroad purchase to the Ohio River and Charleston Railway Co.”
Conceding these alleged facts to be fully established, I
As the proceedings for removal of this case were defective and ineffectual, and the case is now rightfully pending’ in the State Court, I cannot make an order to remand.
It is therefore considered and ordered that the proceedings in this Court for removal be dismissed with costs, to be taxed against the petitioner, the defendant in this case.