43 F. 695 | U.S. Circuit Court for the Southern District of Iowa | 1890
When the bill in this cause was filed, the complainants were, and have ever since continued to be, citizens of Iowa. The defendant Murray, Nelson & Co. was and is a corporation created under the laws of the state of Illinois, and the defendant It. G. Phelps was and is a citizen of the state of Iowa. The suit was brought in the district court of Cass county, Iowa, and, upon the petition of the defendant corporation, Murray, Nelson & Co., the same was removed to this court. Complainants now move to remand the cause, on the ground that R. G. Phelps, one of the defendants, was and is a citizen of Iowa, of which state the complainants are likewise citizens. ■ The averments of the bill show that Phelps is merely the attorney of the corporation; that he has no personal interest in the controversy; that he holds possession of certain of the notes and collaterals involved in the litigation, not in his own right, but solely for the defendant corporation. The facts presented on the record bring the case within the rule laid down in Wood v. Davis, 18 How. 467, in which it is held that the presence upon the record of one who is merely an agent or attorney for the principal defendant will not affect the right of removal as between the principal parties to the controversy. That case, in its facts, is similar to the one now under consideration, and the ruling therein made sustains the right of removal in the present suit.
It is urged, as a further objection, that although Murray, Nelson & Co. is a corporation created under the laws of the state of Illinois, and so averred to be upon the record, yet that it is not made to appear that the corporation is not a resident of Iowa; and, in support of this contention, reliance is placed upon the ruling made by Mr. Justice Miller in Hirschl v. Threshing-Machine Co., 42 Fed. Rep. 803. Until this decision was made, it had been the settled, doctrine in this circuit that a corporation could be a resident only of the state under whose laws it was created. Fales v. Railroad Co., 32 Fed. Rep. 673; Booth v. Manufacturing Co., 40 Fed. Rep. 1. In the latter case Judge Brewer cites several of the decisions of the supreme court upon the point, and holds that thereby the rule is established that a corporation cannot acquire a residence in any state other than that under whose laws it was created. In the conflict of the rulings in the circuit, resort must be had to the decisions of the supreme court. I cite a few thereof:
In Insurance Co. v. Francis, 11 Wall. 210, it is said:
“A corporation can have no legal existence outside the sovereignty by which it was created. Its place of residence is there, and can be nowhere*697 else. Unlike a natural person, it cannot change its domicile at will; and, although it may be permitted to transact business where its charter does not operare, it cannot, on that account, acquire a residence there.”
In Ex parte Schollenberger, 96 U. S. 377, it is declared that-— ’
“A corporation cannot change its residence or its citizenship. It can have its legal home only at the place where it is located by or under the authority of its charter.”
In Railroad Co. v. Koontz, 104 U. S. 5, it is again affirmed that—
“By doing business away from their legal residence, they do not change their citizenship, but simply extend the field of their operations. They reside at home, but do business abroad.”
In Pennsylvania R. Co. v. St. Louis, A. & T. H. R. Co., 118 U. S. 290, 6 Sup. Ct. Rep. 1094, it is said:
“It does not seem to admit of question that a corporation of one state, owning property and doing business in another state by permission of the latter, does not thereby become a citizen of this state also. ”
In Goodlett v. Louisville & N. R. Co., 122 U. S. 391, 7 Sup. Ct. Rep. 1254, it appeared that a corporation, originally created under the laws of the state of Kentucky, had been, by an act of the legislature of Tennessee, authorized to construct and operate an extension of its line in the state of Tennessee; and the supreme court, after an exhaustive examination of the authorities, held that the company must still be deemed to be a Kentucky corporation, and as such io be entitled to remove a suit brought against it in a state court of Tennessee. The ground upon which it was, after some conflict in the earlier cases, finally decided that corporations could sue or be sued in the courts of the United States was that it would be conclusively presumed that a suit by or against a corporation is a suit by or against citizens of the state which created it; it being assumed that the corporators or stockholders are citizens of that state. It is now settled that this is a legal presumption, w'hich cannot be gainsaid. Railroad Co. v. Letson, 2 How. 497; Railroad Co. v. Harris, 12 Wall. 65; Railroad Co. v. Whitton, 13 Wall. 270; Muller v. Dows, 94 U. S. 444.
In the latter case it is said:
“A corporation itself can be a citizen of no state, in the sense in which the word is used in the constitution of the United States. A suit may be brought in the federal courts by or against a corporation, but in such caso it is regarded as a suit brought by or against the stockholders of the corporation; and for the purposes of jurisdiction it is conclusively presumed that all the stockholders are citizens of the state, which by its laws created the corporation.”
Therefore, when, in a petition for removal by a corporation, it is averred that the corporation vras created under the laws of a given state, the legal effect of such averment is that the suit is to be regarded as brought against the stockholders of such corporation, who are all conclusively deemed to be citizens of the state creating the corporation. If, then, it bo true that, as applied to an individual, the averment that ho is a citizen of a named state necessarily includes the averment that he is a resident of such state, residence being the test of state citizenship, the same
Much of the doubt and uncertainty thrown around this class of questions arises, it seems to me, from not keeping in mind the distinction be-^ tween national and state citizenship. Thus it is said that citizenship and residence are not synonymous terms. As applied to national citizenship, this is true. An alien cannot become a citizen of the United States by mere residence in this country. Therefore, when the question of national citizenship is under consideration, proof that a person resides in the United States does not necessarily prove that he is a citizen of the United States. Notwithstanding such residence, he may be an alien, and therefore, when the issue is as to national citizenship, the proof must be upon the point whether the person is native born, or, if born an alien, whethei&he has since been naturalized according to the requirements of the statute. When the issue is as to the state citizenship of one who is admitted or proven to be a citizen of the United States, then the point of inquiry is, of what state is the person a legal resident? A citizen of the United States, native born or naturalized, is a citizen of that state in which he has his legal residence.' He may to-day be a resident in, and therefore a citizen of, the state of Illinois, but if to-morrow he should remove to Iowa, with the intent to take up his permanent abode in the latter state, he would then become a citizen of Iowa. If he does not reside in Iowa, he cannot be said to be a citizen of Iowa. If he does in fact reside in Iowa, he is a citizen of Iowa, and cannot, so long as he is a citizen of Iowa, become a citizen of any other state. An individual cannot, within the meaning of the removal statutes, be a citizen of two or more states at one and the same time. He must be deemed to be a citizen of the state in which he has his fixed, permanent, or legal residence, and he cannot be a citizen of any state other than the one in which he resides. Therefore, when it is averred that A. B. is a citizen of the state of Iowa, such averment clearly includes the idea that A. B. is a resident of that state; and, as he ean be a resident of but one state at a time, the averment that A. B. is a citizen of Iowa negatives the idea that he is a legal resident of any other state.
Article 14 of the amendments to the constitution of the United States declares that “all persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States, and of the state wherein they reside.” So far as applicable to the question under consideration, this constitutional provision only recognizes the rule alreadj in existence, to-wit, that a citizen of the United States is a citizen of the state wherein he resides; but it puts the proposition beyond question or cavil. Therefore an averment, that A. B. is a citizen of a given state, of necessity includes the averment that he is a resident of that state, and precludes the assumption that he may be a resident of any other state. The same is true of the averment that a corporation was created under the laws of a named state.. So far, therefore, as it is held in Hirschl v. Threshing-Machine Co., that the same rule is applicable to corporations as to natural persons, no exception can be taken thereto; but
In the face of the repeated utterances of the supreme court upon that question, and the reasons given therefor, it does not seem to me that it can be held to be an open question, and that safety lies in following the rules thus given us. Therefore, I hold that the averment in the record, that the defendant corporation was created a corporation Under the laws of the state of Illinois in legal intendment precludes the idea that it could become a resident of Iowa, and it is thus sufficiently made to appear that the removal was sought by a non-resident defendant, within the meaning of the removal act.
The motion to remand is overruled.