Ohio and Mississippi Railroad Company v. Wheeler/Opinion of the Court

We conclude, therefore, that the declaration is on its face bad, as not showing the jurisdiction; and that for this cause, whatever may be thought of our plea, the point in question should be decided in our favor.

Even though this court, on a demurrer to the plea to the jurisdiction, will not look into the declaration, still the decision must be for the defendant, because the plea on its face is good as showing that, so far as concerns jurisdiction, both the plaintiff and defendant are citizens of Indiana.

This plea says that this corporation was created by an act of the Legislature of Indiana, of February 14, 1848. That act is found in the Special Laws of Indiana of 1848, p. 619. By the first section of that act it is provided that it 'shall take effect and be in force from and after its passage, and shall be taken to be a public act, and construed liberally for the objects therein set forth, and the regular organization of the corporation under the same shall be presumed and considered as proven in all courts of justice.'

From this section of the plaintiff's charter the following conclusions seem inevitable:

First. That this act is a public act, of which all courts must, ex officio, take notice. Bac. Ab. Tit. Statutes, F; 5 Blackf. R., 170.

Second. That the corporation in question was created by this statute on the 14th day of February, 1848, and thereby became from that time an Indiana corporation.

Third. That the 'regular organization of the corporation,' under said Indiana charter, must, ex officio, 'be presumed and considered as proven' in this court. This court has, in a much weaker case, ex officio, taken notice of an Indiana charter, merely because the Indiana constitution makes all the statutes of that State public acts. Covington Drawbridge Company vs. Shepherd, (20 How., 231.) Indeed, it seems that since the court must officially note this fact, it is probable that in raising our objection to the jurisdiction, no plea at all was necessary; in other words, perhaps on the very face of the declaration the court is bound officially to take notice that this is an Indiana corporation, and that therefore the declaration is bad, as not showing jurisdiction; and so this court has expressly decided in Covington, &c., Co. vs. Shepherd, (20 How., 227, 231.)

We believe that it is not pretended by the plaintiff that any act of Ohio referring specially to this corporation was ever passed till after said Indiana act took effect. We suppose, indeed, that all the acts of Ohio concerning this corporation were private acts, and that, not being pleaded, they cannot be noticed by this court. It seems that acts creating private corporations, as this is, are private statutes, unless the Legislature makes them public. 5 Blackf., 78; Gould's Pl., 56.

But even if the court will officially notice the Ohio statutes recognising this corporation, it cannot aid the jurisdiction; for it is clear that, these statutes having all been passed after the Indiana charter took effect, they did not create the corporation.

We shall here notice all the Ohio acts of which we have any knowledge which have recognised the plaintiff as a corporation.

The first of these Ohio acts is that of March 15, 1849. Certainly it creates no corporation, but merely recognises the existence of the plaintiff as a corporation created in the State of Indiana. It only says that 'the Legislature of Indiana, on the 14th day of February, 1848, passed an act incorporating the Ohio and Mississippi Railroad Company,' and 'that the corporate powers granted to said company by the act of Indiana incorporating the same be recognised.' Here is evidence in the Ohio law itself that this is an Indiana corporation.

The only other Ohio act on the subject which we have found is an act passed January 24, 1851. It authorizes an extension of the road, by the corporation already existing, to the city of Cincinnati. It is true that the third section of this act undertakes declare that the intention of the first section of the act of March 15, 1849, 'was to recognise, confirm, and adopt the charter of the said Ohio and Mississippi Railroad Company as enacted by the Legislature of the State of Indiana.' But so far as the present controversy is concerned, there are two objections to this declaratory act:

First. The Ohio Legislature has no power to pass a declaratory act. To declare 'the intention' of a prior law is a judicial act; and the judicial power of Ohio has always, by her constitution, been vested in her courts. Her General Assembly has only legislative power; it may make laws, but cannot afterwards construe them. 'It seems to be settled, as the sense of the courts of justice in this country, that the Legislature cannot pass any declaratory law.' 1 Kent's Com., 456, note b, and authorities there cited.

Second. This Ohio act does not pretend to create a corporation. It only 'recognises, confirms, and adopts the charter of said company as enacted by the Legislature of the State of Indiana.' But the point is not, where has the corporation been recognised, but where was it created? It has never been pretended that, touching the question of the jurisdiction of the Federal courts, a corporation is a citizen of any State except that which created it. Indeed, this court has said, in the case of the Bank of Augusta vs. Earle, that a corporation 'must dwell in the place of its creation, and cannot migrate to another sovereignty.' 13 Pet., 588. And in Runyan vs. Lessee of Coster this court again said: 'A corporation can have no legal existence out of the sovereignty by which it was ereated.' 14 Pet., 129.

No matter what is stated in the pleadings, the court must judicially take notice that by the last section of the plaintiff's Indiana charter, the plaintiff is an Indiana corporation, and, therefore, cannot sue a citizen of that State in the Federal courts thereof.

Mr. Chief Justice TANEY.

This action was brought in the Circuit Court of the United States for the district of Indiana, to recover $2,400, with ten per cent. damages, which the plaintiffs alleged to be due for fifty shares of the capital stock of the company, subscribed by the defendant.

The declaration state that the plaintiffs are 'a corporation, created by the laws of the States of Indiana and Ohio, having its principal place of business in Cincinnati, in the State of Ohio; that the corporation is a citizen of the State of Ohio, and Henry D. Wheeler, the defendant, is a citizen of the State of Indiana.'

The defendant pleaded to the jurisdiction of the court, averring that he was a citizen of the State of Indiana, and that the plaintiffs were a body politic and corporate, created, organized, and existing in the same State, under and by virtue of an act of Assembly of the State.

The plaintiffs demurred to this plea; and the judges being opposed in opinion upon the question whether their court had jurisdiction, ordered their division of opinion to be certified to this court.

A brief reference to cases heretofore decided will show how the question must be answered. And, as the subject was fully considered and discussed in the cases to which we are about to refer, it is unnecessary to state here the principles and rules of law which have heretofore governed the decisions of the court, and must decide the question now before us.

In case of the Bank of Augusta vs. Earle, (13 Pet., 512,) the court held, that the artificial person or legal entity known to the common law as a corporation can have no legal existence out of the bounds of the sovereignty by which it is created; that it exists only in contemplation of law, and by force of law; and where that law ceases to operate, the corporation can have no existence. It must dwell in the place of its creation.

It had been decided, in the case of The Bank vs. Deviary, (5 Cr., 61,) long before the case of the Bank of Augusta vs. Earle came before the court, that a corporation is not a citizen, within the meaning of the Constitution of the United States, and cannot maintain a suit in a court of the United States against the citizen of a different State from that by which it was chartered, unless the persons who compose the corporate body are all citizens of that State. But, if that be the case, they may sue by their corporate name, averring the citizenship of all of the members; and such a suit would be regarded as the joint suit of the individual persons, united together in the corporate body, and acting under the name conferred upon them, for the more convenient transaction of business, and consequently entitled to maintain a suit in the courts of the United States against a citizen of another State.

This question, as to the character of a corporation, and the jurisdiction of the courts of the United States, in cases wherein they were sued, or brought suit in their corporate name, was again brought before the court in the case of The Louisville, Cincinnati and Charleston Railroad Company vs. Letson, reported in 2 How., 497; and the court in that case, upon full consideration, decided, that where a corporation is created by the laws of a State, the legal presumption is, that its members are citizens of the State in which alone the corporate body has a legal existence; and that a suit by or against a corporation, in its corporate name, must be presumed to be a suit by or against citizens of the State which created the corporate body; and that no averment or evidence to the contrary is admissible, for the purposes of withdrawing the suit from the jurisdiction of a court of the United States.

The question, however, was felt by this court to be one of great difficulty and delicacy; and it was again argued and maturely considered in the case of Marshall vs. The Baltimore and Ohio Railroad Company, (16 How., 314,) as will appear by the report, and the decision in the case of The Louisville, Cincinnati and Charleston Railroad Company vs. Letson reaffirmed.

And again, in the case of The Covington Drawbridge Company vs. Shepherd and others, (20 How., 232,) the same question of jurisdiction was presented, and the rule laid down in the two last-mentioned cases fully maintained. After these successive decisions, the law upon this subject must be regarded as settled; and a suit by or against a corporation in its corporate name, as a suit by or against citizens of the State which created it.

It follows from these decisions, that 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 lastmentioned 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 suit. 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 the Bank of Augusta vs. Earle, before referred to.

It is true, that a corporation by the name and style of the plaintiffs appears to have been chartered by the States of Indiana and Ohio, clothed with the same capacities and powers, and intended to accomplish the same objects, and it is spoken of in the laws of the States as one corporate body, exercising the same powers and fulfilling the same duties in both States. Yet it has no 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 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.

These questions, however, have been so fully examined in the cases above referred to, that further discussion can hardly be necessary in deciding the case before us. And we shall certify to the Circuit Court, that it has no jurisdiction of the case on the facts presented by the pleadings.