115 U.S. 2 | SCOTUS | 1885
delivered the opinion of the court.
The principal question involved’ in these cases is whether a suit brought in a State court against a corporation of the United States maybe removed By'such corporation into the Circuit Court of the'United States, on the ground of its being a corporation organized- under a law of- the United States. The plaintiff in error in -four of the cases is the Union Pacific Railway Company, and in the other three cases is the Texas & Pacific Railway Company. They contend that they have such a right of removal, either- under the removal act of July 27, 1868, 15 Stat. 227, now forming § 640 of Revised Statutes; or under the act of March 3, 1875, entitled “ An Act to determine the-jurisdiction of Circuit Courts of the United States, and to regulate the removal of causes from State courts, and for other purposes,’” 18 Stat. 470; or both. -Whether the corporations of the United States, organized under acts of Congress, have or have not this right of removal is the principal question in these cases.
The suits were all brought in State. courts against the said corporations severally. In the first case, Myers, a switchman at Armstrong, in Kansas, in the employ of the Union Pacific Railway Company, sued the company for'an injury alleged to
The petition then proceeded as follows:
“ That February 1st, 1880, pursuant to sec. 16 of the said act of July 1, 1862, and of the act of July 2d, 1864, the Kansas Pacific Railway Company, a corporation created by the Territorial Legislature of Kansas, and organized under the laws of said Territory, and the Denver Pacific Railway & Telegraph Company, a corporation created and organized under the laws of the Territory of Colorado, both of which said companies are mentioned in said acts of Congress and their said railroads by said acts made a part of the Union Pacific Railroad system, were, by agreement, consolidated with the Union Pacific Railroad Company.- Your petitioner and said consolidated company, by agreement, as by said acts authorized, assumed and adopted the name of The Union Pacific Railway Company, which company, consolidated, assumed, took, and from thenceforth had and has, by virtue of said agreement of consolidation, possession and ownership of all the - railroads and other property, real and personal, of said constituent companies, and has and does operate and manage the same under and by authority of said acts of Congress, and is governed and controlled by said acts, and is to all intents and purposes and. in fact a corporation under the laws of the United States.
*5 “ That the plaintiff, Abram Myers, has sued your petitioner, the Union Pacific Railway Company, process in this suit having been served on its agents, and your petitioner has appeared thereto and filed its answer; that the matter and amount in this suit above entitled exceeds, exclusive of costs, the sum or value of five hundred dollars; that your petitioner has a defence to said action arising under and by virtue of the aforesaid laws of the United States; that said suit has not been tried, nor has it been ready or stood for trial-, and the present is the first term of the court at which it could have been tried.”
The petition concluded with the proffer of the proper bond, and a prayer for an order of removal, and that the court would proceed no further in the cause. The bond was approved and an order of removal was made.. On filing the record in the Circuit Court of the United States, a motion was made to remand the cause to the State court, and it was remanded accordingly, the circuit judge holding that the suit was not one arising “ under the Constitution and laws of the United States,” within the meaning of the act of Congress of March 3, 1875, and that a suit cannot be removed from a State to a federal court upon the sole ground that it is a suit by or against a corporation organized under the laws of the United States. To the judgment remanding the cause, the writ of error was sued out in this court.
The next case, Union, Pacific Railway Company v. The City of Kansas, was a proceeding instituted by the common council of said city by ordinance passed in April, 1880, for widening a street through the depot grounds of the company, and thereby taking a portion of its said grounds and the property of many other persons. A jury was summoned in November, 1880, before the mayor, to inquire and find the value of the property taken for the street, and to assess the amount upon surrounding property benefited thereby. On December 12, 1880, this jury found the value of the company’s property taken equal to $7,305, and assessed, as benefits, upon the remaining property of the company the sum of $12,325 towards paying the damages for widening the street. The verdict was confirmed by the mayor and common coui'cil, February 25,1881. The laws
“And your petitioner, by agreement of said constituent companies, succeeded to, had, and possessed all the rights and privileges and property, real and personal, which was of said constituent companies, or either of them, and that at the time of commencement of this proceeding your petitioner had owned and possessed, exclusive of all other rights and claims, the tract of land described in said proceeding, as follows: ” (it then describes .the land of the company taken for the street, and then states as follows:) “ and that • the same had been acquired by the Kansas Pacific Railway Company for depot and other railway purposes by authority of law, and that your petitioner held said land for said purposes, and was occupying the. same in part for such purposes at the time of the commencement of the proceedings, and was about to appropriate the residue thereof to such use, the increase of business of your petitioner making it imperatively necessary that it should be so occupied..
“ Tour petitioner distinctly avers that it is a corporation, not banking, organized under the laws of the United States; that it holds and possesses said property pursuant to such laws; that it has a defence in this action arising under and by virtue of*7 the laws of the United States hereinbefore referred to; and your petitioner desires that said cause may be removed into said Circuit Court of the United States for trial pursuant to section 640 of the Revised Statutes of the United States. Your petitioner further states that the matter in dispute .in this cause, in wrhich your petitioner is interested, exceeds the sum of five hundred dollars, exclusive of costs; and further, that this suit has not been tried, but is now pending for trial on appeal in the Circuit Court of Jackson County, Missouri.”
The petition concluded with the ordinary proffer of a bond and prayer for removal of the case, &c., and an order of removal was made by the State court. Motion was then made to the Circuit Court of the United States to remand the cause, and that court, after holding the motion under consideration for some time, gave judgment to remand, which judgment is brought here by writ of error.
Before rendering judgment, the Circuit Court of the United States allowed the company to file an additional statement of facts for the purpose of showing that the cause was removable, averring its acceptance of the acts of Congress, and the passage of an act by the Legislature of Missouri, authorizing the company to extend its .track within -the limits of Missouri, and to acquire depot grounds there, which it did; and the fact that said grounds are essential to the operations of the company in carrying out the objects declared in the acts of Congress relating thereto; that the United States- loaned its bonds on said portion of the road and has a lien thereon for their payment.
The third suit, Union Pacific Railway Company v. Lucia Knuth, was an action brought by the defendant in error against the company in the District Court of Dodge County, Nebraska, in July, 18S3, to recover damages for injuries sustained by her at the company’s depot at North Bend, between Omaha and Ogden. A petition for removal of the cause to the Circuit Court of the United States for the District of Nebraska was filed in -due time, alleging the incorporation and organization of the company under and by virtue of the acts of Congress of 1862 and 1864, before referred to; that the matter in dispute exceeds $500 exclusive of costs; that the- de
The fourth case is that of Frank Harwood, who brought a suit against the Union Pacific Railway Company in the District Court of Davis County, Kansas, in July, 1882, to recover damages for an injury received by him at the company’s depot at Junction City, Kansas, whilst loading hogs in a car. A petition for removal of the cause was filed in due time, alleging the organization of the company under the act of Congress of July 1, 1862, and the amendments thereto, and other acts of Congress; and that the petitioner had a defence arising under the laws of the United States, and concluding with tendering the proper bond, and a prayer for removal. The State court approved the bond offered, but denied the petition and proceeded with the cause. A verdict being found for plaintiff, the case was taken to the Supreme Court of Kansas by appeal. One of the reasons assigned on the appeal was the denial of the petition to remove the cause. The Supreme Court affirmed the judgment, and a writ of error to the judgment of that court brings the case here.
The three cases of the Texas and Pacific Railway Company were as follows: The first was a suit brought by A. F. McAlister against the company in the District Court of Harrison County, Texas, in April, 1879, to recover damages-for an injury to the plaintiff whilst a passenger in one of the company’s trains. ' A petition for removal was filed in due time, alleging that the suit arose under the laws of the United States, and that the defendant was a corporation organized under and by virtue of certain acts of Congress of the United States,' to wit an act entitled “ An Act to incorporate the Texas Pacific Railroad Company, and to aid in the Construction of its Road, and for other Purposes,” approved March 3, 1871, 16 Stat. 573,
The third and last case of the Texas and Pacific Railway Company was a suit brought by James Murphy against the company .(or rather against one of its constituent companies, and afterwards, by amendment against the company itself) in the District Court of Harrison County, Texas, in 1873, to recover damages for an injury received by the plaintiff in getting upon the cars of the company at Jonesville, Texas. The pleadings were amended from time to time on both sides, and the cause was continued, until finally an amended original petition was filed in October, 1878, followed by a petition for removal filed November 1, 1878. .The prayer of the petition was denied. The case was afterwards tried, and a verdict and judgment rendered for the plaintiff; and in May, 1883, this judgment was affirmed by the Supreme Court of Texas on appeal. On the question of removal the court followed the decision in the. McAlister case above stated. No question was raised in this case on account of the time at which the petition for removal was filed. The application for removal was treated by the court as made under § 640 of the Revised Statutes.
With some diversification of details, it will be perceived that all of these cases depend principally on two questions:
First, whether the fact that the plaintiffs in error are corpo
Secondly, whether, if not removable on that ground, they are removable under § 640 of the Revised Statutes, upon the allegation contained in the several petitions of removal, that the defendant has a defence to the action arising under and by virtue of a law of the United States, naming, in seme cases, the act of incorporation as the law referred to.
We are of opinion that corporations of the United States, created by and organized under acts of Congress like the plaintiffs in error in these cases, are entitled as such to remove into the Circuit Courts of the United States suits brought against them in the State courts, under and by virtue of the act of March 3, 1875, on the ground that such suits are suits “ arising under the laws of the United States.” We do not propose to go into a lengthy argument on the subject; we think that the question has been substantially decided long ago by this court. The. exhaustive argument of Chief Justice Marshall in the case of Osborn v. Bank of the United States, 9 Wheat. 738, 817-828, delivered more than sixty years ago, and always acquiesced in, renders any further discussion unnecessary to show that- a suit' by or against a corporation of the United States is a suit arising under the laws of the United States. ‘ That argument was the basis of the decision on the jurisdictional question in that case. The precise question, it is true, was as to the power of Congress to authorize the bank to sue and be sued in the United States courts. The words of its charter were* that the bank should be made able and capable in law to “ sue and be sued, plead and be impleaded, answer and be answered, defend and be defended, in all State courts having competent jurisdiction, and in any Circuit Court of the United States.” The • power to create such a jurisdiction in the’ federal courts rested solely on the truth of the proposition, that a suit by or against the bank would be a suit arising under the laws of the United States; for the Constitution confined the judicial power of the United
. ‘iWe think, then, that when a question to which the judicial power of the Union is extended by the Constitution, forms an ingredient of the original cause, it is in the power of Congress to give the Circuit Courts jurisdiction of that cause, although other questions of fact or law may be involved in it.
“ The cáse of the bank is, we think, a very strong case of*13 this description. The charter of incorporation not only creates it, but gives it every faculty which it possesses. The power to acquire rights of any description, to transact business of any description, to make contracts of any description, to sue on those contracts,'is given and measured by its charter, and that charter is a law of the United States. This being can acquire -no right, make no contract, bring no suit which is not authorized by a law of the United States. It is not only itself the mere creature of a law, but all its actions and all its rights are dependent on the same law. Can a .being, thus. constituted, have a case which does not arise literally as well as substantially under the law? Take the case of a contract, which-is put as the strongest against the bank.*
' “ When a bank sues, the first question which presents itself, and which lies at the foundation of the causeáis, has this legal entity a right to sue? Has it a right to come, not into this court .particularly, but into any court? ’ This depends on a law of the United States. The next question is, has this being a right to make' this particular contract? If this question be decided in the negative, the cause is determined against the plaintiff; and this question, too, depends entirely on a law of the United States. These are important questions, and they exist in every possible case. ...
• “The question forms, an original ingredient in every cause. Whether it be in fact relied on or not, in the defence, it is still a part of the cause, and may be relied on. The right of the plaintiff to sue cannot depend on the defence which the defendant may choose to set up. His right to sue is anterior to that defence, and must depend on the state of things when the action is brought. The. questions which the case involved, then, must determine its character, whether those questions be made in the cause or not.” pages 823, 824.
“ It is said that a clear distinction exists between the party •and the cause: that the party may originate.under a law with which the cause has no connection; and that Congress m.ay, with the same propriety, give a.naturalized citizen, who is the mere creature of law, a right to sue in the courts of the United States, as give that right to the bank.
*14 “ This distinction is not denied; and if the act of Congress was a simple act of incorporation, and contained nothing more, it might be entitled to great consideration. But the act does not stop with incorporating the bank. It proceeds to bestow upon the being it has made all the faculties and capacities which that being possesses. Every act of the bank grows out of this law, and is tested by it. To use the language of the Constitution, every act of the bank arises out of this'law.” page 827.
If the case of Osborn v. The Bank of the United States, is to be adhered to as a sound exposition of the Constitution, there is no escape from the conclusion that these suits against the plaintiffs in error, considering the said plaintiffs as corporations created by and organized under the acts of Congress referred to in the several petitions for removal in these cases, were and are suits arising under the laws of the United States. An examination of Those acts of Congress shows that the corporations now before us, not' only derive their existence,' but their powers, their functions, their- duties, and a large portion of their resources, from those acts, and," by virtue thereof sustain important relations to the Government of the United States.
A question is made in the cases coming from Kansas about the constitution of the company owning and controlling the line of railroad running through 'that State. The allegations of the petition for removal in the Myers case (and the others are substantially the same) are: That on February 1, 1880, pursuant to § 16 of the Act of Congress of July 1, 1862, and § 16 of the act of July 2, 1864, the Kansas Pacific Railway Company, a corporation created by the territorial legislature of Kansas, and organized under the laws of said Territory, and the Denver Pacific Railway and Telegraph Company, a corporation created and organized under the laws of the Territory of Colorado, both of which companies are mentioned in the said acts of Congress, and their roads by said acts made a part of the Pacific Railroad system, were by agreement consolidated with the Union Pacific Railroad Company, and said consolidated company assumed and adopted the name of The
With regard to transactions occurring in Nebraska, on the original line of the Union Pacific Railroad Company, it is not disputed that the present company derives all its corporate and other powers from the acts of Congress and is strictly and purely a United States corporation; and the Texas and Pacific Railway Company stands in the same predicament and occupies the same, position in Texas, in relation to consolidation with State organizations, as the Union Pacific does in Kansas, and the same considerations apply to' both. It was originally incorporated by the name of the Texas Pacific Railroad Company by act of Congress, approved March 3, 1871, 16 Stat. 573, with power to construct a railroad from Marshall, Texas, to San Diego on the Pacific Coast, and to purchase, or consolidate with, any railroad company, chartered by Congressional, State, or Territorial authority on the same route. Under this act, and by authority of the Legislature of Texas, a consolidation was effected with the Southern Pacific Railroad Company and the Southern Transcontinental Railway Company, corporations of Texas, and by act of Congress of May 2, 1872, 17 Stat. 59, the name of the company was changed to the Texas and Pacific Railway Company. The powers, privileges and advantages • given to the company, by Congress, and the duties imposed
If we are correct, therefore, in the conclusion to which we have come,' that suits by and against such corporations are-“suits arising under the laws of, the United States,” then they are, in terms, embraced in § 2 of the act of March 3,1875, and the cases now under consideration were removable to the respective Circuit Courts of the United States, to which it was sought to remove them, unless any of them were obnoxious to some other objection peculiar to the individual cases.
The point suggested by the Supreme. Court of Texas in the case of McAlister, that the’ petition was not verified by oath,would not be tenable if it were raised by the defendant in error, since it was evidently waived by him at the time, having never been raised or mentioned in any way. The same may be said of the delay in filing the petition in the case of Murphy. See Ayers v. Watson, 113 U. S. 591.
In the Kansas City case, of proceedings for widening a street running through the depot grounds of the company at that place, brought here by writ of error to the Circuit Court of the United States, for the Western District of Missouri, it is contended by the City of Kansas, the defendant in error, first, that the consolidated railway company must be regarded as having the same status as if it were still the Kansas Pacific Railway Company, a corporation of the State of Kansas; secondly, that the case had already been tried once before the Mayor and a jury, and an appeal had been taken to the Circuit Court of Jackson County before the petition for removal was filed, and, therefore, the application came too late; and, thirdly, that the proceeding was not a separate one against the railway company, but a joint one against that company and many other persons, and the appeal of the railway company and other parties carried the whole case to the Circuit Court of Jackson County to be retried in toto ; and a removal of the case by the railway company to the Circuit Court of the United States must be a removal of the whole case, and .not merely the case of the railway company, which would cast upon
The first of these points has already received consideration. But it may be added, as bearing on this particular case, that the original Kansas company was authorized'by § 9 of the-Pacific Railroad act of July 1, 1862, to extexfd its road into the State of Missouri — that is, “ to construct , a railroad and telegraph line from the Missouri River, at the mouth of the Kansas River, on. the south side thereof [which is in the State of Missouri}, so as to connect with the Pacific Railroad of Missouri, to the aforesaid point on the one hundredth meridian of longitude,” namely, the point where the Union Pacific was to commeiice. This provision looked to the establishment of a continuous line of railroad from the Mississippi River, at St. Louis (the eastern terminus of the Pacific Railroad of Missouri), to the Pacific Ocean. The power assumed by Congress in giving this authority to the Kansas company was, undoubtedly, assumed - to be within the power “to regulate commerce among the several states;” and,,although by an act of the Legislature of Missouri, passed in February, 1865, the consent of that State was also given to the-extension of the road into its territory, arid to its connection with the Missouri road, the fact remains that the company claimed and assumed to exercise its powers under the act of Congress, as well as by the consent of the Legislature of Missouri. So that the right of appropriating the very property in question in this case was claimed under authority of an act of Congress. This circumstance adds strength to the claim of the plaintiff in error that the case was one “arising under the laws of the United States.”
The second-ground of objection, that the cause had been once tried before the mayor by a jury, and an appeal taken, before a petition for removal was filed, and therefore the application was too late, is answered by the reasoning of this court in the case of The Boom Company v. Patterson, 98 U. S. 403, which was a case very similar' in this respect to the present. It was there held that the preliminary proceedings were in the nature of an inquest to ascertain the value of the prop
A more embarrassing question arises under the third objection raised by the defendant in error, to wit, that the whole case relating to the widening of the street was carried before the Circuit Court of Jackson County by the appeal, and must also be carried to the Circuit Court of the United States in the same condition if the application for a removal is sustained, whereby the latter court will be called upon to exercise administrative functions of a local character to which it is incompetent.
To understand the bearing of this objection, it is necessary to inquire, first, the condition of the case in the Circuit Court of Jackson County on the appeal; and, secondly, the rules which must govern the case on its removal to the federal court, if such a removal should be effected.
The condition of the case in the-Circuit Court of Jackson County on the appeal depends upon the statute of Missouri
We have not been furnished by the counsel on either side with reference to any decisions of the Missouri courts giving construction to this section. Whether the direction that the cause shall be tried de novo requires that all the valuations and assessments are to be retried, or only those affecting the appellants, is not expressly stated. The principle of valuation and assessment to be followed by the jury is laid down in § 3 of the act, as follows:
“ Seo. 3. The jury shall first ascertain the actual damages done to each person or corporation in consequence of the taking of their property for such purposes, without reference to the proposed improvement, as the just compensation to be made therefor; and, second, to pay such compensation, assess against*22 the city the amount of benefit to the city and public generally, inclusive of benefit to any property of the city, and against the several lots and parcels of private property deemed benefited, as determined according to the last section, by the proposed improvement, the balance of such compensation; each lot or parcel of ground to be assessed with an amount bearing the same ratio to such balance as the benefit to each lot or parcel bears to the whole benefit to all the private property assessed. Parties interested may submit proof to the jury, and the latter shall examine personally the property to be taken and assessed. . . .”
From-this it would seem that the balance of damages for property taken, after deducting the amount to be paid by the city, is to be divided and assessed pro rata upon those whose property is benefited, in proportion to the benefit to each. But each piece of property taken is valued by itself, without reference to the proposed improvement,” and the amount of benefit to each piece of property benefited is ascertained separately without reference to the other pieces benefited. It is only after this has been done that the aggregate amounts are ascertained and the damages are assessed pro rata against the pieces of property benefited according to the benefit to each, which is the result of a mere arithmetical calculation. In the State Circuit Court the jury ascertains and finds all these facts, and reports them in one general verdict.
"What, then, is the relation in which the .railway company, as an appellant, stands towards the city of Kansas in this litigation ? Clearly, it has two distinct issues, or grounds of controversy ; first, the value of its property taken for the street; secondly, the amount of benefit which the widening of the street will create to its remaining property, not so taken. It may have a third issue, and, judging from the course of the argument, it has a third issue, still more important to it than either of the others, to wit, the right of a city to open a street at all across its depot grounds. Now this controversy involving these three issues, is a distinct controversy between the company and the city. It may be settled in the same trial with the other appeals, and by a single jury; but the controversy is
If this view of the subject is correct, we see no difficulty in removing the controversy between the city of Kansas and the railway company for trial in the Circuit Court of the United States. The proceedings for widening the street, pending in the State court, may have to await the decision of the case in the federal court; and the result of those proceedings may be materially affected by the decision of that case; but that consideration does not affect the separate and distinct character of the controversy between the city and the railway company, although it might raise a question of proper parties in a pure chancery proceeding as between the city and the company. This controversy is to all intents and purposes “ a suit.” The indirect effect upon the general proceedings for widening the street which would ensue in case the federal court should determine that the City of Kansas had no right to widen the street in the company’s depot grounds, or that the valuation of its property was much too small, or the assessment of benefits against it was much too large, furnishes no good reason for depriving the company of its right to remove its suit into a United States court. We think that the case was removable to that court under the act of March 3, 1875.
This disposes of all the cases now before us, and renders it unnecessary to inquire whether the allegations in the several petitions of removal were, or were not, sufficient to bring the cases within Rev. Stat. § 640; or whether this section still remains in force.
The judgments are reversed in all the cases, a/nd the causes will he remanded, with instructions to enter judgments in accordance with this opinion.
The "acts of incorporation made no provision for the removal to the courts of the United States of suits begun in a State' court. The act of July 27, 1868, ch. 255, § 2, 15 Stat. 227, now Rev. Stat. § 640, did, however, give authority for that purpose in suits brought against the company in a State .court “ upon the petition of' such defendant, verified by oath, stating that such defendant has a defence arising under or by virtue of the Constitution or of any treaty or law of the United States.” If all suits by or against, and all defences by, a federal corporation necessarily arise under the lgws of the United States because the charter of incorporation not only creates it, but gives it every faculty which it possesses,” why require the corporation, when asking for a removal, to cause an oath to be filed with its petition that it. has a defence in the .-suit which arises under the Constitution or laws ? If, “ because the power to acquire rights of any description, to transact business of any description, to make contracts of any description, to sue on those contracts, is given and measured by its charter, and
The act of 1868, Rev. Stat. § 640, related specifically to this class of corporations and this class of suits, and it shows distinctly that the words arising under the laws of the United States” were there used in a restricted’sense. I see no evidence of any intention by Congress to use them in any other sense in the act of 1875, when applied to the same kind of suits and to the same kind of corporations.
I am authorized to say that Mr. Justice Miller unites with me in this dissent.