St. Louis & San Francisco R. Co. v. James, 161 U.S. 545 (1896)

Published on May 2016 | Categories: Types, Business/Law, Court Filings | Downloads: 63 | Comments: 0 | Views: 226
of 24
Download PDF   Embed   Report

Filed: 1896-03-02Precedential Status: PrecedentialCitations: 161 U.S. 545Docket: 242

Comments

Content

161 U.S. 545
16 S.Ct. 621
40 L.Ed. 802

ST. LOUIS & S. F. RY. CO.
v.
JAMES.
No. 242.
March 2, 1896.

On December 24, 1892, Etta James, defendant in error, brought this action
in the circuit court for the Western district of Arkansas, against the St.
Louis & San Francisco Railway Company, plaintiff in error, for
negligence in maintaining a switch target at Monett, in Barry county, in
the state of Missouri, so near its tracks that her husband was struck and
killed by it on July 3, 1889, while employed as a fireman on one of the
company's engines. Her husband resided at Monett and died intestate. The
defendant in error was the widow and sole heir at law of her husband, and
no administrator of his estate was appointed in Arkansas. She recovered a
judgment of $5,000.
Etta James, the defendant in error, resided at Monett, and was a citizen of
the state of Missouri. Monett is a station in Missouri, on the railroad of the
plaintiff in error, about 50 miles from the southern border of that state.
The St. Louis & San Francisco Railway Company was organized and
incorporated under the laws of the state of Missouri in 1876, and soon
thereafter became the owner of, and has ever since owned and operated, a
railroad in that state, extending from Monett southerly to the southern
border of the state of Missouri.
Section 11 of article 12 of the constitution of the state of Arkansas, which
was adopted in 1874, provides that:

'Foreign corporations may be authorized to do business in this state under
such limitations and restrictions as may be prescribed by law: provided,
that no such corporation shall do any business in this state, except while it
maintains therein one or more known places of business and an authorized
agent or agents in the same upon whom process may be served; and, as to
contracts made or business done in this state, they shall be subject to the
same regulations, limitations, and liabilities as like corporations of this
state, and shall exercise no other or greater powers, privileges, or
franchises than may be exercised by like corporations of this state, nor
shall they have power to condemn or appropriate private property.'
Section 1 of article 17 of that constitution provides that:
'All railroads, canals, and turnpikes shall be public highways, and all
railroads and canal companies shall be common carriers. Any association
or corporation organized for the purpose shall have the right to construct
and operate a railroad between any points within this state, and to connect
at the state line with railroads of other states. Every railroad company
shall have the right with its road to intersect, connect with, or cross any
other road, and shall receive and transport each other's passengers,
tonnage, and cars loaded or empty, without delay or discrimination.'
Section 3 of an act passed by the general assembly of the state of
Arkansas, entitled 'An act in relation to certain railroads,' approved March
16, 1881 (Laws Ark. 1881, p. 83), provides:
'That every railroad corporation incorporated under the laws of this state,
whose road is wholly, or in part, constructed and operated, is hereby
authorized to sell, lease, or otherwise dispose of the whole or any part of
its roadways and rights of way, with the franchises thereto belonging, and
its other property, to any connecting railroad company, or to any railroad
corporation now or hereafter organized under the laws of this or any other
state, upon such terms and conditions as may be agreed upon by the board
of directors of said corporations, and ratified by a two-thirds vote of the
issued capital stock thereof, and to receive the bonds or stock of the
purchasing corporation in whole or in part payment of such purchase, and
corporations may be formed for the purpose of purchasing or leasing the
whole or any part of any railroad, and such purpose or object shall be
stated in articles of association, which shall be executed and filed in the
office of the secretary of state, the same to be as near as may be in
accordance with section 4918 of Gantt's Digest. All shares of stock issued
in payment of such purchase shall be deemed to be full-paid shares, and
the number and amount of shares so to be issued shall be stated in the
aforesaid articles of association, and said articles shall be otherwise
altered, if necessary, so as to conform to the facts.'

Section 5 of the same act 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 or
purchase shall carry with it the right of eminent domain held and acquired
by said company at the time of lease or sale, and thereafter hold, use,
maintain, build, construct, own, and operate the said railroad so leased or
purchased as fully and to the same extent as the company organized under
the laws of this state might or could have done; and the rights and powers
of such company, and its corporate name, may be held and used by such
foreign railroad company as will best subserve its purpose, and the
building of said line of railroad; but before any such lease or sale shall be
made, by any company organized under the laws of this state, two-thirds
in amount of the capital stock issued shall, at a meeting of the
stockholders thereof—of which sixty days' notice shall be given in some
newspaper published at the city of Little Rock, and in such other papers
published elsewhere as the president and directors of said company may
direct—consent thereto; and any railroad company organized under the
laws of any state, and having a line of railroad built, or partly built, to any
boundary of this state, and desiring to continue its line of road, or any
branch thereof, into or through this state, is hereby authorized and
empowered so to do, when it shall have acquired by lease or purchase the
corporate rights, privileges, and franchises of any railroad corporation in
the manner herein provided, formed under the laws of this state, and such
railroad company, upon filing a certified copy of its articles of
incorporation, or the special act incorporating the same, shall have,
possess, and enjoy all the rights, powers, privileges, franchises, and
immunities belonging to railroad corporations formed under the general
laws of this state, which are not in conflict with the constitution or laws of
this state; but nothing herein contained shall interfere with, or abridge the
right of, any railroad corporation acquired under section 4942 of Gantt's
Digest. * * * In all other matters said foreign railroad company shall be
subject to all the provisions of all acts in relation to railroads, the liabilities
and forfeitures thereby imposed, and may sue and be sued in the same
manner as other railroad corporations, and subject to the same service of
process, and shall keep an office or offices in said state as required by
section 11 of article 12 of the constitution of this state, and an agent or
agents upon whom process may be served, with the like force and effect
as is provided for the service of process in section 2 of this act.'

At the time of the accident complained of, the plaintiff in error owned and
operated the railroad from the southern border of the state of Missouri to
Ft. Smith, in the state of Arkansas, in connection with its original line
from Monett to the Missouri border, and these roads formed and were
operated as a continuous line of railroad from Monett to Ft. Smith. That
portion of this continuous line of railroad which was situated in Arkansas
had been built by corporations organized and incorporated under the laws
of that state. In the year 1882, the St. Louis & San Francisco Railway
Company purchased from these Arkansas corporations, under the act of
March 16, 1881, the railroad extending from the southern border of
Missouri to Ft. Smith, Ark., and all the railways, constructed and
unconstructed, and all the roads, franchises, and property which these
Arkansas corporations had. These Arkansas corporations have since
maintained their separate organizations as corporations of that state, but
have operated no railroads. From the time of this purchase to the present
time, the plaintiff in error has operated this continuous line of railroad
from Monett, Mo., to Ft. Smith, Ark., and has owned all the rolling stock
and other appurtenances used upon this railroad.
An act passed by the general assembly of the state of Arkansas, entitled
'An act relating to the consolidation of railroad companies and the
purchasing, leasing, and operation of railroads, and to repeal sections one,
two, three, four, and five of an act entitled 'An act to prohibit foreign
corporations from operating railroads in this state,' approved March 22,
1887,' approved March 13, 1889 (Laws Ark. 1889, p. 43), provided as
follows:
'Section 1. That sections one, two, three, four, and five of an act entitled
'An act to prohibit foreign corporations from operating railroads in this
state,' approved March 22, 1887, be and the same are hereby repealed.
'Sec. 2. Any railroad company in this state, existing under general or
special laws, may sell or lease its road, property, and franchises to any
other railroad company duly organized and existing under the laws of any
other state or territory, whose line of railroad shall so connect with the
leased or purchased road by bridge, ferry, or otherwise as to practically
form a continuous line of railroad, and any railroad company is this state
existing under general or special laws may buy or lease, or otherwise
acquire, any railroad or railroads, with all the property, rights, privileges,
and franchises thereto pertaining, or buy the stocks and bonds, or
guarantee the bonds of any railroad company or companies incorporated
or organized within or without this state whenever the roads of such
companies shall form in the operation thereof a continuous line or lines:
provided, that before any such lease or sale is valid, it must be approved
and ratified by persons holding or representing two-thirds of the capital

stock of each of such companies respectively, at a stockholders' meeting
called for that purpose; and any railroad company existing under the
general or special laws of any other state or territory may buy or lease or
otherwise acquire any railroad or railroads, the whole or part of which is
in this state, with all the rights, privileges, and franchises thereto
pertaining, or buy the stock and bonds, or guarantee the bonds of any
railroad company incorporated or organized under the laws of this state,
whenever the roads of such companies shall form in the operation thereof
a continuous line or lines: provided, that the road so purchased shall not be
parallel or competing with the purchasing road; and any railroad company
existing under the laws of any other state or territory may extend and
construct its railroad into or through this state: provided further, that any
agreement of any company existing under the general or special laws of
this state, or of any other state or territory, to lease or buy a railroad and
appurtenances, or to buy the stock or bonds, or guarantee the bonds of any
railroad company incorporated and organized within this state, heretofore
executed by the proper officers of such companies and ratified by the
companies parties thereto, by the assent of persons holding two-thirds of
the capital stock in each of such companies, expressed at a meeting of
such stockholders called for that purpose, shall be taken and held to be
binding from the date of its execution: provided further, that nothing in
the foregoing provisions shall be held or construed as curtailing the right
of state or counties through which said consolidated, leased, or purchased
road or roads may be located to levy and collect taxes upon the same and
the rolling stock thereof, pro rata, in conformity with the provisions of the
laws of this state upon that subject: provided further, that before any
railroad corporation of any other state or territory shall be permitted to
avail itself of the benefits of this act, or any part thereof, such corporation
shall file with the secretary of state of this state a certified copy of its
articles of incorporation, if incorporated under a general law of such state
or territory or a certified copy of the statute laws of such state or territory
incorporating such company, where the charter of such railroad
corporation was granted by special statute of such state; and upon the
filing of such articles of incorporation or such charter, with a map and
profile of the proposed line, and paying the fees prescribed by law for
railroad charters, such railroad company shall, to all intents and purposes,
become a railroad corporation of this state, subject to all the laws of the
state now in force or hereafter enacted, the same as if formally
incorporated in this state, anything in its articles of incorporation or charter
to the contrary notwithstanding, and such acts on the part of such
corporation shall be conclusive evidence of the intent of such corporation
to create and become a domestic corporation: And provided further, that
every railroad corporation of any other state, which has heretofore leased
or purchased any railroad in this state, shall, within sixty days from the
passage of this act, file a duly certified copy of its articles of incorporation

or charter with the secretary of state of this state, and shall, thereupon,
become a corporation of this state, anything in its articles of incorporation
or charter to the contrary notwithstanding, and in all suits or proceedings
instituted against any such corporation process may be served upon the
agent or agents of such corporation or corporations in this state, in the
same manner that process is authorized by law to be served upon the
agents of railroad corporations in this state organized and existing under
the laws of this state.
'Sec. 3. Any foreign corporation which has heretofore constructed,
purchased, leased, or acquired or now operates any railroad in this state,
shall within sixty days after the passage of this act comply with the
provisions thereof, by filing a copy of its articles of incorporation or of the
special act of the legislature incorporating such company in the office of
the secretary of state of this state, and for every day which any such
company shall fail to comply with the provisions of this act it shall pay a
penalty of one thousand dollars, which penalty may be recovered by the
district attorney in a civil action instituted in the proper court in any
county through which such railroad or any part thereof so owned,
purchased, leased, acquired, or operated by such foreign company may be
located.
'Sec. 4. This act shall take effect and be in force from and after its
passage.'
On May 6, 1889, the St. Louis & San Francisco Railway Company filed
with the secretary of state of the state of Arkansas a dulycertified copy of
its articles of incorporation under the laws of Missouri, as required by said
act of March 13, 1889, and has never been otherwise incorporated or
organized uncer the laws of the state of Arkansas.
The plaintiff in error properly and seasonably raised the objection in the
circuit court that that court had no jurisdiction of this action, on the
ground that the plaintiff in error was not a citizen of the state of Arkansas,
but was a citizen of the state of Missouri, of which state the defendant in
error was also a resident and citizen; but the plaintiff in error waived its
personal privilege of being sued in the district of which it was an
inhabitant. The question raised by that objection was, by proper exception
to the ruling below and assignment of error, presented to the circuit court
of appeals for determination.
And the said United States circuit court of appeals, to the end that it might
properly decide this and other questions arising in this case which are duly
presented by exceptions and assignments of error properly taken and filed,
the said court, desired the instruction of the supreme court of the United
States upon the following questions:

(1) In view of the provisions of the act of the general assembly of
Arkansas approved March 13, 1889, did the St. Louis & San Francisco
Railway Company, by filing a certified copy of its articles of incorporation
under the laws of Missouri with the secretary of state of Arkansas, and
continuing to operate its railroad through that state, become a corporation
and citizen of the state of Arkansas?
(2) In view of the provisions of the act of the general assembly of
Arkansas approved March 13, 1889, did the St. Louis & San Francisco
Railway Company, by filing a certified copy of its articles of incorporation
under the laws of Missouri with the secretary of state of Arkansas, and
continuing to operate its railroad through that state, become a citizen of
the state of Arkansas, so as to give the circuit court of the United States
for the Western district of Arkansas jurisdiction of this action, in which
the defendant in error was and is a citizen of the state of Missouri?
(3) In view of the provisions of the act of the general assembly of
Arkansas approved March 13, 1889, did the St. Louis & San Francisco
Railway Company, by filing a certified copy of its articles of incorporation
under the laws of Missouri with the secretary of state of Arkansas, and
continuing to operate its railroad through that state, become a citizen of
the state of Arkansas, so as to give the circuit court of the United States
for the Western district of arkansas jurisdiction of this action, in which
defendant in error was and is a resident and citizen of the state of
Missouri, and the cause of action accrued in the state of Missouri, and
arose from an accident that resulted from the operation of the railroad of
the company in that state?
(4) In view of the facts hereinbefore set forth, did the circuit court of the
United States for the Western district of Arkansas have jurisdiction of this
action?
Geo. R. Peck, A. T. Britton, A. B. Browne, and E. D. Kenna, for plaintiff
in error.
Frank W. Hackett, for defendant in error.
Mr. Justice SHIRAS, after stating the facts in the foregoing language,
delivered the opinion of the court.

1

Etta James, as a citizen of the state of Missouri, and having a cause of action
against the St. Louis & 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 & 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?

2

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 & 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.

3

It must be regarded, to begin with, as finally settled, by repeated decisions of
this court, that, for the purpose of jurisdiction in the federal courts, a state
corporation is deemed to be indisputably composed of citizens of such state. It
is equally true that, without objection so far from the federal anthority, whether
legislative or judicial, it has become customary for a state adjacent to the state
creating a railroad corporation to legislatively grant authority to such foreign
corporation to enter its territory with its road,—to make running arrangements
with its own railroads, to buy or lease them, or to consolidate with the
companies owning them. Sometimes, as in the present case, such foreign
corporation is declared, upon its acceptance of prescribed terms and conditions,
to become a domestic corporation of such adjacent state, and to be endowed
with all the rights and privileges enjoyed by similar corporations created by
such state.

4

We have already said that the rule that state corporations are indisputably
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.

5

In the case of Bank v. Deveaux, 5 Cranch, 61, where an action had been
brought against citizens of the state of Georgia in the circuit court of the United
States for the district of Georgia, by a petition of 'the president, directors, and
company of the Bank of the United States,' wherein it was alleged that the
petitioners were citizens of the state of Pennsylvania, it was held that a
corporation aggregate, composed of citizens of the state, may sue a citizen of
another state in the circuit court of the United States; and Chief Justice
Marshall, in giving the opinion of the court, said: 'Substantially and essentially,
the parties in such a case, where the members of the corporation are aliens or
citizens of a different state from the opposite party, come within the spirit and
terms of the jurisdiction conferred by the constitution on the national tribunals.'

6

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 of of citizens of a
different state from the defendant, the plaintiff, though suing in its corporate
name, could make the averment that the individuals who composed the
corporation were such aliens or citizens of a different state, and such averment,
if not traversed, would sustain the jurisdiction. The principal of the case makes
the individual corporators the real parties to the suit.

7

In Railroad Co. v. Letson, 2 How. 497, an action was brought, in the circuit
court of the United States for the district of South Carolina, by a citizen of the
state of New York, against a corporation whose members were alleged to be
citizens of South Carolina. A plea to the jurisdiction was set up that there were
members of the defendant company who were not citizens of the state of South
Carolina, but of another state than New York or South Carolina. In the opinion
in this case, Bank, v. Deveaux was said to have gone too far, and that
consequences and inferences had been argumentatively drawn from it which
ought not to be followed; and it was said that 'a corporation created by a state to
perform its functions under the authority of that state, and only suable there,
though it may have members out of the state, seems to us to be a person, though
an artificial one, inhabiting and belonging to that state, and therefore entitled,
for the purpose of suing and being sued, to be deemed a citizen of that state';
and accordingly the judgment of the circuit court, overruling the plea to its
jurisdiction, was sustained.

8

Marshall v. Railroad Co., 16 How. 314, was a case tried in the circuit court of
the United States for the district of Maryland, wherein the plaintiff alleged that
he was a citizen of the state of Virginia, and that the Baltimore & Ohio Railroad
Company, the defendant, was a body corporate by an act of the general
assembly of Maryland; and it was suggested, when the case came into this
court, that such an averment was insufficient to show jurisdiction in the courts
of the United States over the suits, and it was denied that the decision in
Railroad Co. v. Letson, 2 How. 297, sanctioned it, or, if some of the doctrines
there advanced seemed to do so, it was said that they were extrajudicial, and
therefore not authoritative. Several judges dissented, but the court, speaking
through Mr. Justice Grier, held that, 'if the declaration set forth facts from
which the citizenship of the parties may be presumed or legally inferred, it is
sufficient. The presumption arising from the habitat of a corporation in the
place of its creation being conclusive as to the residence or citizenship of those
who use the corporate name and exercise the faculties conferred by it, the
allegation that 'the defendants are a body corporate, by the act of the general
assembly of Maryland,' is a sufficient averment that the real defendants are
citizens of that state.'

9

In Drawbridge Co. v. Shepherd, 20 How. 233, Chief Justice Taney, speaking
for the court, said: 'The question as to the jurisdiction of the courts of the
United States in cases where a corporation is a party was argued and considered
in this court, for the first time, in the cases of Insurance Co. v. Boardman and of
Bank v. Deveaux, 5 Cranch, 57, 61. These two cases were argued at the same
term, and were, as appears by the report, decided at the same time. And in the
last-mentioned case the court held that in a suit by or against a corporation, in
its corporate name, this court might look beyond the mere legal being which the
charter created, and regard it as a suit brought by or against the individual
persons who composed the corporation; and an averment that they were
citizens of a particular state (if such was the fact) would be sufficient to give
jurisdiction to a court of the United States, although the suit was in the
corporate name, and the individual corporators were not named in the suit or
the averment.

10

'But in the case of Railroad Co. v. Letson, 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 as the
corporators were not parties to the suit in their individual characters, but merely
as members and component parts of the body or legal entity which the charter
created, the members who composed it ought to be presumed, so far as its
contracts and liabilities are concerned, to reside where the domicile of the body
was fixed by law, and where alone they could act as one person; and to the
same extent, and for the same purposes, be also regarded as citizens of the state
from which this legal being derived its existence and its faculties and powers.'

11

The previous cases were reviewed in Railroad Co. v. Wheeler, 1 Black, 286.
That was the case of an action brought in the circuit court of the United States
for the district of Indiana against Wheeler, a citizen of that state, to recover the
amount due on his subscription to stock of the Ohio & Mississippi Railroad
Company. The declaration described the plaintiffs as 'the president and
directors of the Ohio and Mississippi Railroad Company, a corporation created
by the laws of the states of Indiana and Ohio, and having its principal place of
business in Cincinnati, in the state of Ohio, a citizen of the state of Ohio.' The
defendant pleaded to the jurisdiction by alleging that the plaintiff company,
although a corporation of the state of Ohio in the first instance, had been
incorporated by an act of assembly of the state of Indiana, and thus had become
a body corporate of the same state whereof he was a citizen.

12

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 style by which they are described. The averments in the
declaration would seem to imply that the plaintiffs claim to have been created a
corporate body, and to have been endued with the capacities and faculties it
possesses by the co-operating legislation of the two states, and to be one and
the same legal being in both states. If this were the case, it would not affect the
question of jurisdiction in this case. But such a corporation can have no legal
existence upon the principles of the common law or under the decision of this
court in the case of Bank v. Earle. It is true that a corporation by the name and
style of the plaintiffs appears to have been chartered by the states of Ohio and
Indiana, clothed with the same capacities and powers, and intended to
accomplish the same objects, and it is spoken of in the laws of those states as
one corporate body, exercising the same powers and fulfilling the same duties
in both states. Yet it has not legal existence in either state, except by the law of
the state. And neither state could confer on it a corporate existence in the other,
nor add to or diminish the powers to be there exercised. It may, indeed, be
composed of and represent, under the corporate name, the same natural
persons. But the legal entity or person which exists by force of law can have no
existence beyond the limits of the state or sovereignty which brings it into life,
and endues it with its faculties and powers. The president and directors of the
Ohio & Mississippi Railroad Company are therefore a distinct and separate
corporate body in Indiana from the corporate body of the same name in Ohio,
and they cannot be joined in a suit as one and the same plaintiff, nor maintain a
suit in that character against a citizen of Ohio or Indiana in a circuit court of the
United States. * * * And we shall certify to the circuit court that it has no
jurisdiction of the case on the facts presented by the pleadings.'

13

Memphis & C.R. Co. v. State, 107 U. S. 581, 2 Sup. Ct. 432, was where an
action had been brought by the state of Alabama, for the use of a county of that
state, in a court of that state, against a railroad corporation whose road passed
through that state and county, to recover the amount of a county tax assessed
upon its property; and the cause was removed into the circuit court of the
United States for the Northern district of Alabama; and, upon motion, the cause
was remanded to the state court, upon the ground that the defendant, although
incorporated in Tennessee also, was a corporation of the state of Alabama. On
error, the judgment of the court below was affirmed, and this court, per Mr.
Justice Gray, said: 'The defendant, being a corporation of the state of Alabama,
has no existence in this state as a legal entity or person, except under and by
force of its incorporation by this state, and, although also incorporated in the
state of Tennessee, must, as to all its doings within the state of Alabama, be
considered a citizen of the state of Alabama, which cannot sue or be sued by
another citizen of Alabama in the courts of the United States.'

14

In this case Railroad Co. v. Wheeler, 1 Black, 286, and Railway Co. v. Whitton,
13 Wall. 270, were cited. The former has already been noticed, and of the latter
it may be said, by way of distinguishing it from the present case, that while it
was held that a citizen of Illinois might sue the railroad company in the circuit
court of Wisconsin, although the company had been likewise incorporated in
Illinois, yet the cause of action arose in Wisconsin; nor does it appear in the
report of that case what was the character of the legislation by which the
Wisconsin company was created, nor was the question now before us there
considered. It is also observable that in the latter case Railroad Co. v. Wheeler
was cited with approval.

15

One phase of the subject was before the court in the case of Pennsylvania R.
Co. v. St. Louis, A. & T. H. R. Co., 118 U. S. 290, 6 Sup. Ct. 1094. A suit had
been brought in the circuit court of the United States for the district of Indiana,
by the St. Louis, Alton & Terre Haute Railroad Company, alleging that it was a
corporation organized under the laws of the state of Illinois, and a citizen of that
state, against the Indianapolis & St. Louis Company, a corporation organized
under the laws of the state of Indiana, and a citizen of that state, and against
other corporations mentioned in the bill as citizens of Indiana, or of other states
than Illinois. An objection to the jurisdiction was made on the ground that the
St. Louis, Alton & Terre Haute Railroad Company was organized under laws of
both Illinois and Indiana, and was therefore a citizen of the latter state. In
treating this question, this court said, by Mr. Justice Miller: '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 become a citizen
of this state also. And so a corporation of Illinois, authorized by its laws to build
a railroad across the state from the Mississippi river to its eastern boundary,
may, by permission of the state of Indiana, extend its road a few miles within
the limits of the latter, or, indeed, through the entire state, without thereby
becoming a corporation or a citizen of the state of Indiana. Nor does it seem to
us that an act of the legislature conferring upon this corporation of Illinois, by
its Illinois corporate name, such powers to enable it to use and control that
portion of the road within the state of Indiana as have been conferred on it by
the state which created it, constitutes it a corporation of the state of Indiana. It
may not be easy in all such cases to distinguish between the purpose to create a
new corporation which shall owe its existence to the law or statute under
consideration and the intent to enable the corporation already in existence under
laws of another state to exercise its functions in the state where it is so received.
The latter class of laws are common in authorizing insurance companies,
banking companies, and others to do business in other states than those which
have chartered them. To make such a company a corporation of another state,
the language must imply creation or adoption in such form as to confer the
power usually exercised over corporations by the state or by the legislature, and
such allegiance as a state corporation owes to its creator. The mere grant of
powers and privileges to it as an existing corporation, without more, does not
do this, and does not make it a citizen of the state conferring such powers.'

16

So, in Nashna & L. R. Corp. v. Boston & L. R. Corp., 136 U. S. 356, 10 Sup.
Ct. 1004, it was held that railroad corporations created by two or more states,
though joined in their interests, in the operation of their roads, in the issue of
their stock, and in the division of their profits, so as practically to be a single
corporation, do not lose their identity; but each has its existence and its standing
in the courts of the country only by virtue of the legislation of the state by
which it was created, and the union of name, of officers, of business, and
property does not change their distinctive character as separate corporations.

17

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.'

18

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.

19

Such corporations may be treated by each of the states whose legislative grants
they accept as domestic corporations.

20

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 such other state as a citizen of
the state of its original creation.

21

We are now asked to extend the doctrine of indisputable citizenship so that, if a
corporation of one state, indisputably taken, for the purpose of federal
jurisdiction, to be composed of citizens of such state, is authorized by the law of
another state to do business therein, and to be endowed, for local purposes, with
all the powers and privileges of a domestic corporation, such adopted
corporation shall be deemed to be composed of citizens of the second state, in
such a sense as to confer jurisdiction on the federal courts at the suit of a citizen
of the state of its original creation.

22

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 of 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.

23

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.'

24

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 or purchase
shall carry with it the right of eminent domain held and acquired by said
company at the time of lease or sale, and thereafter hold, use, maintain, build,
construct, own, and operate the said railroad so leased or purchased as fully and
to the same extent as the company organized under the laws of this state might
or could have done; and the rights and powers of such company, and its
corporate name, may be held and used by such foreign railroad company as will
best subserve its purpose, and the building of said line of railroad. * * * In all
other matters said foreign railroad company shall be subject to all the
provisions of all acts in relation to railroads, the liabilities and forfeitures
thereby imposed, and may sue and be sued in the same manner as other railroad
corporations, and subject to the same service of process, and shall keep an
office of offices in said state as required by * * * the constitution of this state.'

25

It was under the provisions of this section that the St. Louis & San Francisco
Railroad Company, in 1882, purchased from corporations of Arkansas the
railroad already built by them, extending from the southern boundary of
Missouri to Ft. 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.

26

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 60 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 in its articles of incorporation or charter to
the contrary notwithstanding; and it appears that the defendant company did
accordingly file a copy of its articles of incorporation with the secretary of the
state. But whatever may be the effect of such legislation, in the way of
subjecting foreign railroad companies to control and regulation by the local
laws of Arkansas, we cannot concede that it availed to create an Arkansas
corporation out of a foreign corporation in such a sense as to make it a citizen
of Arkansas within the meaning of the federal constitution, so as to subject it as
such to a suit by a citizen of the state of its origin. In order to bring such an
artificial body as a corporation within the spirit and letter of that constitution, as
construed by the decisions of this court, it would be necessary to create it out of
natural persons, whose citizenship of the state creating it could be imputed to
the corporation itself. But it is not pretended in the present case that natural
persons, resident in and citizens of Arkansas, were, by the legislation in
question, created a corporation, and that therefore the citizenship of the
individual corporators is imputable to the corporation.

27

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.

28

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 in the courts
of either state, the question of the jurisdiction of the federal court still remains.
The defendant was not content to leave that question to be decided by the
plaintiff's allegations, but pleaded that it was in law a corporation of the state of
Missouri, and that, therefore, an action could not be maintained against it, in the
federal court, by a citizen of that state. In other words, the defendant company
claimed that while it had voluntarily subjected itself to the laws of Arkansas, as
interpreted and enforced by the courts of that state, it still remained a
corporation of the state of Missouri, disabled from suing or being sued by a
citizen of that state in a federal court, and that such disability was not, and
could not be, removed by state legislation.

29

The result of these views is that we answer the second question put to us by the
circuit court of appeals in the negative, and to render it unnecessary to answer
the other questions.

30

Mr. Justice HARLAN, dissenting.

31

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.

32

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 & San Francisco Railway Company, is
sued as a corporation of Arkansas.

33

Is there an Arkansas corporation by the name of the St. Louis & San Francisco
Railway Company? The Missouri corporation of the same name complied with
the Arkansas statute of March 13, 1889, by filing in the office of the secretary
of state of Arkansas a certified copy of its articles of incorporation; and
therefore, if effect be given to the statute as a valid enactment, it became, also,
a corporation of Arkansas. This is made clear by the last proviso of section 2 of
the Arkansas statute, declaring: 'And provided further, that every railroad
corporation of any other state which has heretofore leased or purchased any
railroad in this state shall, within sixty days from the passage of this act, file a
duly certified copy of its articles of incorporation or charter with the secretary
of state of this state, and shall thereupon become a corporation of this state,
anything in its articles of incorporation or charter to the contrary
notwithstanding, and in all suits or proceedings instituted against any such
corporation, process may be served upon the agent or agents of such
corporation or corporations in this state in the same manner that process is
authorized by law to be served upon the agents of railroad corporations in this
state, organized and existing under the laws of this state.'

34

We have, then, two distinct corporations,—one being the St. Louis & San
Francisco Railway Company, a Missouri corporation; the other, the St. Louis &
San Francisco Railway Company, an Arkansas corporation. If a citizen of
Tennessee, being a passenger on the St. Louis & 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 & 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 a 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.

35

In the particular just mentioned, the present case is not substantially different
from that of Railroad Co. v. Wheeler, 1 Black, 286, 297, 298. The report of that
case shows that a corporation by the name of the Ohio & Mississippi Railroad
Company was chartered by the states of Indiana and Ohio. Chief Justice Taney
said: 'The president and directors of the Ohio and Mississippi Railroad
Company is, therefore, a distinct and separate corporate body in Indiana from
the corporate body of the same name in Ohio, and they cannot be joined in a
suit as one and the same plaintiff, nor maintain a suit in that character against a
citizen of Ohio or Indiana in a circuit court of the United States.' If the present
suit had been brought against the St. Louis & San Francisco Railway Company,
as incorporated both in Missouri and Arkansas, the complaint, under the
decision in the Wheeler Case, would have disclosed, upon its face, a want of
jurisdiction, for one of the defendant corporations and the plaintiff, in such a
case, would be citizens of the same state. In Railroad Co. v. Harris, 12 Wall.
65, 82, the court said: 'Nor do we see any reason why one state may not make a
corporation of another state, as there organized and conducted, a corporation of
its own, quoad any property within its territorial jurisdiction. That this may be
done was distinctly held in Railroad Co. v. Wheeler, 1 Black, 297.'

36

The same point arose and was decided in Railway Co. v. Whitton, 13 Wall.
270. It appears from thereport of that case, but more distinctly from the original
record, which I have examined, that the Chicago & Northwestern Railway
Company was a corporation of Wisconsin, and also of Illinois and Michigan,
respectively. The plaintiff sued, in a court of Wisconsin, as a citizen of Illinois.
The defendant was the Chicago & Northwestern Railway Company,
incorporated in Wisconsin. The question was whether that case was removable
to the federal court, sitting in Wisconsin, upon the ground of diverse
citizenship. That question was decided in the affirmative. It was objected that
the Chicago & Northwestern Railway Company, although a corporation of
Wisconsin, was also a corporation under the laws of Illinois, of which state the
plaintiff was a citizen. This court, speaking by Mr. Justice Field, said: 'The
answer to this position is obvious. In Wisconsin the laws of Illinois have no
operation. The defendant is a corporation, and as such a citizen of Wisconsin,
by the laws of that state. It is not there a corporation or a citizen of any other
state. Being there used, it can only be brought into court as a citizen of that
state, whatever its status of citizenship may be elsewhere. Nor is there anything
against this view, but, on the contrary, much to support it, in the case of
Railroad Co. v. Wheeler, 1 Black, 286.' Referring to the decision of the
Wheeler Case, the court held that the Chicago & Northwestern Railroad
Company must be regarded, for all purposes of jurisdiction in the federal
courts, as a distinct corporation in each of the states of Wisconsin, Illinois, and
Michigan.

37

So, in Nashua & L. R. Corp. v. Boston & L. R. Corp., 136 U. S. 356, 372, 373,
10 Sup. Ct. 1004, it was held that a corporation created by the laws of
Massachusetts, bearing the same name, composed of the same stockholders,
and designed to accomplish the same purposes as a New Hampshire
corporation, was not the same corporation with the one in New Hampshire. The
court said: 'Identity of name, powers, and purposes does not create an identity
of origin or existence, any more than other statutes, alike in language, passed by
different legislative bodies, can properly be said to owe their existence to both.
To each statute and to the corporation created by it there can be but one
legislative paternity.'

38

To the same effect are Muller v. Dows, 94 U. S. 444, 447; Railroad Co. v.
Vance, 96 U. S. 450, 453, 457; Clark v. Barnard, 108 U. S. 436, 448, 452, 2
Sup. Ct. 878: Farnum v. Canal Co., 1 Sumn. 46, Fed. Cas. No. 4,675; St. Louis,
A. & T. H. R. Co. v. Indianapolis & St. L. R. Co., 9 Biss. 144, Fed. Cas. No.
12,237.

39

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 controversy between her and the St. Louis & San Francisco Railway
Company, a corporation of Arkansas.

40

We 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 same 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 & 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.

41

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,
Mo., to Ft. Smith, Ark., 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 other words, the St. Louis & 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.

42

Are not both corporations liable to the plaintiff under the authority of Railroad
Co. v. Jones and Railroad Co. v. Stewart, 155 U. S. 333, 15 Sup. Ct. 136? The
facts in that case were these: The plaintiffs were personally injured by a
railroad collision between a train of the Virginia Midland Railway Company
and a train of the Alexandria & Fredericksburg Railway Company. The injury
occurred near Washington, but in Virginia, on the tracks of the Alexandria &
Washington Railroad Company. The suit was brought against the latter
company, which was then in the hands of a receiver, as well as against several
other companies. One of the questions in the case was whether any company
was liable except the one whose negligence was the immediate cause of the
injury. This court, speaking by Mr. Justice Shiras, said: 'Our views respecting
the exceptions urged on behalf of the other plaintiffs in error are briefly
expressed as follows: There was evidence from which the jury might properly
infer that the railroad between the cities of Alexandria and Washington was
managed and controlled for the common use of the Baltimore and potomac
Railroad Company (owning that portion of the route that lies between
Washington and the south end of the Long Bridge), the Alexandria andria and
Washington Railroad Company (owning that portion between the south end of
the Long Bridge and St. Asaph's Junction), and the Alexandria and
Fredericksburg Railway Company (owning the line between St. Asaph's
Junction and Alexandria); that the gross earnings of these companies, derived
from this line between Alexandria and Washington, including what the Virginia
Midland Railway Company paid for the privilege of running its trains over
these tracks, and what was received for transportation of mails, went into the
hands of a common treasurer, and were by him, after paying operating
expenses, divided among the three companies, according to some rule not very
definitely shown, but apparently in proportion to the miles of track of each
road; that the operating and accounting officers of the three companies were the
same; that the freight train in question was, at the time of the collision, on that
portion of the road which belonged to the Alexandria and Washington
Company; that the engineer and fireman were employes of the Baltimore and
Potomac Railroad Company; that the engine was that if the Alexandria and
Fredericksburg Railway Company; that the conductor and brakemen were
employees of that company; and that the passenger train was in charge of a pilot
employed and paid by the three companies, in pursuance of an arrangement to
that effect.' These facts, the court said, if proved, would warrant a finding of
joint liability of the three companies to the plaintiff. Consequently, either
company can be sued. I am unable to perceive why, under the principles of that
case, the Arkansas corporation is not liable to the plaintiff for personal injuries
received through the negligence of the Missouri corporation. The two
corporations have a common management and a common treasury, and they
unite in operating the lines of road, situated in Missouri and Arkansas, as one
continuous road.

43

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.

44

To sum up: There is an Arkansas corporation by the name of the St. Louis &
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, Mo., with Ft.
Smith, Ark., 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.

45

For these reasons, I am unable to concur in the opinion of the majority.

Sponsor Documents

Or use your account on DocShare.tips

Hide

Forgot your password?

Or register your new account on DocShare.tips

Hide

Lost your password? Please enter your email address. You will receive a link to create a new password.

Back to log-in

Close