Lead Opinion
after stating the case, delivered the opinion of the court.
Etta James, as a citizen of the State of Missouri, and having a cause of action' against the St. Louis and San Francisco Railway Company, a corporation of the State of Missouri, could, of course, sue the latter in the courts of that State, but equally, of course, could not sue such state corporation in the Circuit Court of the United States for the District'of Missouri. Can she, as such citizen of the State of Missouri, lawfully assert her cause of action in the Circuit Court of the United States for the District of Arkansas against the St. Louis and San Francisco Railway Company by showing that the latter had availed itself of the rights and privileges conferred by the State of Arkansas on railroad corporations of other States coming within her borders and complying with the terms and conditions of her statutes ?
Before addressing ourselves directly to this question, it must be conceded that the plaintiff’s cause-of action, though arising in Missouri, is transitory in its nature, and that the St. Louis and San Francisco Railway Company, though denying the plaintiff’s right to sue it in the Circuit Court of Arkansas, waives its statutory privilege of being sued only in the district in which it has its habitat.
It must be regarded, to begin with, as finally settled, by repeated decisions of this court, that, for the purpose of juris
We have already said that the rule that state corporations are undisputably composed of citizens of the States creating them is finally settled. But, in view of the question now before us, it may be well to briefly review some of the cases.
In the case of Bank of the United States v. Deveaux,
Before leaving this case it should be noted that the United States Bank was not a corporation of the State of Pennsylvania, but of the United States: The decision, therefore, was to the effect that where it appeared that a corporation plaintiff, regardless of its origin, was composed of aliens or of
In Louisville, Cincinnati &c. Railroad v. Letson,
Marshall v. Baltimore & Ohio Railroad,
In Covington Drawbridge Co. v. Shepherd,
“ But in the case of the Louisville Railroad Company v. Let-son the court overruled as much of this opinion as authorized a corporation to .plead in abatement that one or more of the corporators, plaintiff or defendants, were citizens of a different State from the one described, and held that the members, of the corporate body must be presumed to be citizens of the State in which the corporation was domiciled, and that both parties were estopped from denying it. And that inasmuch.
The previous cases were reviewed in Ohio & Mississippi Railroad v. Wheeler,
The question thus raised was on a certificate of a division of opinion between the judges of the Circuit Court, brought to this court, and was answered as follows: “ This suit in the corporate name is, in contemplation of-law, the suit of the individual persons who compose it, and must, therefore, be regarded and treated as a suit in which citizens of Ohio and Indiana are joined as plaintiffs in an action against a citizen of the last mentioned State. Such an action cannot be maintained in a court of the United States, where jurisdiction of the case depends altogether on the citizenship of the parties. And, in such a suit, it can make no difference whether the plaintiffs sue in their own proper names, or by the corporate name and
Memphis & Charleston Railroad v. Alabama,
In this case, Ohio & Mississippi Railroad v. Wheeler,
One phase of the subject was before the court in the case of the Pennsylvania Co. v. St. Louis &c. Railroad,
So in Nashua Railroad v. Lowell Railroad,
To fully reconcile all the expressions used in these cases would' be no easy task, but we think the following propositions may be fairly deduced from them: There is an indisputable legal presumption that a state corporation, when sued or suing in a Circuit Court of the United.States, is composed of citizens of the State which created it, and hence such a corporation is itself deemed to come within that provision of the Constitution of the United States which confers jurisdiction upon the Federal courts in “ controversies between citizens of different States.”
It is competent for a railroad corporation organized under the laws of one State, when authorized so to do by the consent of the State which created it, to accept authority from another State to extend its. railroad into, such State and to receive a grant' of powers to own and control, by lease or purchase, railroads therein, and to subject itself to such rules and regulations as may be prescribed by the second State. Such legislation on the part of two or more States is not, in the absence of inhibitory legislation by Congress, regarded as within the constitutional prohibition of agreements or compacts between States.
Such corporations may be treated by each of the States whose legislative grants they accept as domestic corporations.
The presumption that a corporation is composed of citizens of the State which created it accompanies such corporation when it does business in another State, and it may sue or be sued in the Federal courts in súch other State as a citizen of the State of its original creation.
We are now asked to extend the doctrine of indisputable citizenship, so that if a corporation of one State, indisputably
We are unwilling to sanction such an extension of a doctrine which, as heretofore established, went to the very verge of judicial power. That doctrine began, as we have seen, in the assumption that State corporations were composed of citizens df the State which created them; but such assumption was one of fact, and was the subject of allegation and traverse, and thus the jurisdiction of the Federal courts might be defeated. Then, after a long contest in this court, it was settled that the presumption of citizenship is one of law, not to be defeated by allegation or evidence to the contrary. .There we are content to leave it.
It should be observed that, in the present case, the corporation defendant was not incorporated as such by the State of Arkansas. The legislation of that State was professedly dealing with the railroad corporation of other States. The constitution of Arkansas provides that “ foreign corporations may be authorized to do business in this State under such limitations and restrictions as may be prescribed by law,” but “ they shall not have power to condemn or appropriate private property.”
Section 5 of the act of March 16, 1881, as shown in. the preliminary statement, provides that “ any railroad company, incorporated by or under the laws of any other State, and having a line of railroad built, or partly built, to or near, any boundary of this State, and desiring to continue its line of railroad into or through this State, or any branch thereof, may, for the purpose of acquiring the right -to build its line of railroad, lease or purchase the property, rights, privileges, lands, tenements, immunities and franchises of any railroad company organized under the laws of this State, which said lease
It was under the provisions of this section that the St. Louis, and San Francisco Railway Company, in 1882, purchased from corporations of Arkansas, the railroad already built by them extending from the southern boundary of Missouri to Fort Smith in Arkansas. These Arkansas corporations have since maintained their separate organizations as corporations of that State, but do not operate railroads. It is, therefore, obvious that such purchase by the Missouri corporation of the railroad and franchises of the Arkansas companies did not convert it into an Arkansas corporation. The terms of the statute show that it merely granted rights and powers to an existing foreign corporation, which was to continue to exist as such, subject only to certain conditions — among others that of keeping an office in the State, so as to be subject to process of the Arkansas courts.
It is true that by the subsequent act of 1889, by the proviso to the second section, it was provided that every railroad corporation of any other State, which had theretofore leased or purchased any railroad in Arkansas, should, within sixty days from the passage, of the act, file a certified copy of its articles of incorporation or charter with the secretary of state, and shall thereupon become a corporation of Arkansas, anything
It is further contended, on behalf of the defendant in error, the plaintiff below, that, as the plaintiff described herself as a citizen of Missouri, and the defendant company as a citizen of Arkansas, and as the cause of action, though arising in Missouri, was transitory in its nature, jurisdiction was thus formally conferred upon the Circuit Court of the United States for the District of Arkansas, and that the only question left for inquiry was whether the defendant company, alleged to be a citizen of Arkansas, was legally responsible for the conduct of the Missouri company of the same name, and such responsibility is supposed to be found in the fact that the railroad running through both States was under the common management of both companies.
But even if it be admitted that a common management of a railroad running through two States, and participation in its earnings and losses, by two companies, might make both responsible, jointly and severally, for a tortious cause of action, and that such cause of action might be maintained
The result of these views is that we answer the second question put to us by the Circuit Court of Appeals in the negctr tive, and this renders it unnecessary to answer the other questions.
Dissenting Opinion
dissenting.
I am of opinion that this action is one of which the Circuit Court of the United States for the "Western District of Arkansas could properly take cognizance, and that the fourth question propounded by the Circuit Court of Appeals should be answered in the affirmative; in which case it will become unnecessary to answer the other questions.
The statement of the case, to which the certified questions are appended, does not distinctly show whether the railway .company is described, in the complaint or declaration, as a corporation of Missouri or as a corporation of Arkansas. • But I take it that the able judges who joined in the certificate did not intend to ask this court whether the court below had jurisdiction of an action brought by a citizen of Missouri against a corporation of that State. It must be assumed that the defendant company, the St. Louis and San Francisco Railway Company, is sued as a corporation of Arkansas.
Is there an Arkansas corporation by the name of the St. Louis and San Francisco Railway Company ? The Missouri
We have, then, two distinct corporations, one being the St. Louis and San Francisco Railway Company, a Missouri corporation, the other, the St. Louis and San Francisco Railway Company, an Arkansas corporation. If a citizen of Tennessee, being a passenger on the St. Louis and San Francisco Railway, as operated in Arkansas, be injured by the negligent conduct of those who operated the road in Arkansas, it is clear, if the amount in dispute be sufficient, that he could sue the St. Louis and San Francisco Railway Company, as a corporation organized .under the laws of Arkansas, in the Federal Circuit Court sitting in that State. The right to maintain such suit shows that there is an Arkansas corporation distinct as to its corporate existence from the Missouri corporation of the same name, and having, for purposes of suit, a citizenship in Arkansas.
In the particular just mentioned, the present case is not substantially different from that of Ohio & Mississippi Railroad v. Wheeler,
The same point arose and was decided in Railway Company v. Whitton,
So, in Nashua Railroad v. Lowell Railroad,
To the same effect are Muller v. Dows,
I submit, with confidence, that if the defendant company is a corporation of Arkansas, and wholly distinct, as a corporate body, from the corporation in Missouri of the same name, the jurisdiction of the court below to determine the controversy between the present parties is not defeated by the fact that the Missouri corporation and the plaintiff are both citizens of Missouri. If this view be sound, it results that the plaintiff, a citizen of Missouri, can invoke the jurisdiction of the United States Circuit Court, sitting in Arkansas, to determine a con
¥e are here met with the suggestion that the cause of action arose in Missouri, and that the injuries, of which the plaintiff complains, were committed in Missouri by the Missouri corporation bearing the samé name as that of the present defendant. But the question still remains whether, in view of the relations of the Arkansas corporation to the St. Louis and San Francisco Railway in Missouri, the Arkansas corporation could be separately sued.in the Federal court, sitting in Arkansas. The jurisdiction of the court below existed by reason of the diverse citizenship of the parties. If, upon the facts disclosed at the trial, the court was of opinion that the Arkansas corporation was not liable to the plaintiff upon a cause of action arising in Missouri, it would not dismiss the action for want of jurisdiction, but would direct the jury to return a verdict for the defendant.
Was not the Arkansas corporation liable to the plaintiff, albeit the cause of action arose in Missouri ? It appears from the record that the road from Monett, Missouri, to Fort Smith, Arkansas, is and for many years has been operated as one continuous line. The entire line is under the joint management of the Missouri and Arkansas corporations. In othér words, the St. Louis and San Francisco Railway Company, as a Missouri corporation, manages the property situated in Missouri, and, as an Arkansas corporation, manages the property situated in Arkansas.
Are not both corporations liable to the plaintiff under the authority of Pennsylvania Railroad v. Jones and Pennsylvania Railroad v. Stewart,
At first blush, it may seem strange that the plaintiff did not sue the Missouri corporation in one of the courts of Missouri. .But that cannot affect the jurisdiction of the court below, if the defendant is an Arkansas corporation. And her right to a judgment cannot be denied, if the Arkansas corporation is liable for injuries caused, in Missouri, by the negligence of the Missouri corporation. It may be that the line in Missouri is covered by mortgages for very large amounts, so that a judgment against the Missouri corporation would be of no real value. That perhaps is the reason why the plaintiff brought suit against the- Arkansas corporation. But, as already said, this view is not at all material on the present hearing.
To sum up: There is an Arkansas corporation by the name of the St. Louis and San Francisco Railway Company; that corporation, being a citizen of Arkansas, can be sued in the court below by a citizen of Missouri; the court below has, consequently, jurisdiction to determine any controversy between those parties, citizens of different States (the amount in dispute being sufficient) which has been raised by the plaintiff’s complaint; the Arkansas corporation, by reason of its relation to the-Missouri corporation in the operation, as one continuous road, of the lines connecting Monett, Missouri, with Fort Smith, Arkansas, is liable for the acts and defaults of the Missouri corporation in the management of that part of the continuous road which lies in Missouri; and, even" if the Arkansas corporation is held, under the evidence, not to be liable, the case should not be dismissed for want of jurisdiction in the court below, but the jury should be instructed to find for the defendant.
For these reasons I am unable to concur in the opinion of the majority.
