Central Company of New Jersey v. Mills/Opinion of the Court

The controversy in this caase is not between citizens of different states. In truth, as well as in form, the parties on one side of the controversy are citizens of New Jersey, and those on the other side of the controversy are a New Jersey corporation and other citizens of New Jersey, as well as a Pennsylvania corporation and citizens of Pennsylvania and of Maryland. The bill is filed by stockholders in the New Jersey corporation, in behalf of themselves and other stockholders similarly situated, to set aside a lease made by that corporation, acting in concert the other defendants, of i its railroad and property, in excess of its corporate powers and in fraud of the rights of the plaintiffs. All the defendants unite in defending the acts complained of, and in denying the illegality and fraud charged against them. The New Jersey corporation is in no sense a merely formal party to the suit, o a party in the same interest with the plaintiffs; but is rightly and necessarily made a defendant. Hawes v. Oakland, 104 U.S. 450, 460; Atwool v. Merryweather, L. R. 5 Eq. 464, note; Menier v. Hooper's Tel. Co. L. R. 9 Ch. App, Cas. 350; Mason v. Harris, L. R. 11 Ch. Div. 97. There is no separate controversy bet een the plaintiffs and those directors who are citizens of Pennsylvania. The bill seeks affirmative relief against the directors, as well as against the two corporations, for one and the same illegal and fraudulent act. The single matter in controversy between the plaintiffs and all the defendants is the validity of that act; and unless it is determined that the action of the New Jersey corporation was invalid as against the plaintiffs, there can be no decree against any of the other defendants. All the parties on one side of this controversy not being citizens of different states from all those upon the other side, the citizenship of the parties did not bring the case within the jurisdiction of the circuit court. Ayres v. Wiswall, 112 U.S. 187; S.C.. ante, 90.

No controversy has arisen under the constitution and laws of the United States. Neither the bill nor the answer, in terms or in effect, claims any right or involves any question under that constitution or those laws. The question whether a party claims a right under the constitution or laws of the United States is to be ascertained by the legal construction of its own allegations, and not by the effect attributed to those allegations by the adverse party. The bill, while alleging the lease made by the New York corporation to be inconsistent with its charter, illegal, and void, does not assert or imply an intention to impugn the validity of any statute of the state for repugnancy to the constitution or laws of the United States. And the counsel for the plaintiffs, at the hearing in the circuit court, as well as in this court, disclaimed the intention to do so. Should any such question arise in the progress of the cause, and be decided by the state court against a right claimed under the national constitution and laws, relief may be had by writ of error from this court. But, in the present condition of the case, the circuit court rightly held that it did not involve a controversy properly within its jurisdiction. Gold Washing Co. v. Keyes, 96 U.S. 199; Smith v. Greenhow, 109 U.S. 669; S.C.. 3 SUP. CT. REP. 421.

Judgment affirmed.