qive.nmwhen .the actionwas commenced did not prevent :the Cims'efrQ:ru federalchatflcter and jurisdiction after thestate was (i;dmitted, ifthecitizenshipwas diverse when the state was admi,hed an,4:the Cause ,Hia solely a question ,of and succession. The territory had ceased: to eXist,and it became a controversy between a citizen of this state anli,the citi,zen of anothe.r state the established' ,the when, by theact of transfer effected. The antecedent date, the date of the cpmmencement of the action, neither'establisned nor deprived the of fi:x;ed when was.admiUed. . . ,Hare courts an:y Congresa succession qf penqing in territ<?t:ial ,the the :follow,ing words: etc. )' .,ab!lotC) py the admi!¥lioq of (LD,Y !!luch. ,into,the.lJJ,lion, but sh(l;ll P:I:Oceeq.ed. witljl.;in Stl!.t,esci);,q,istrict, state Qe," etc., with the ',prqyisp .iJ:l req\WSt..", .' '0 ,,;I; By of the eiilJ,bliqgll-ct"',,in th,e q( sucb prqper stQ.tewurts.", .'rbis the statEl CO\,llt or,in the worQS; of.th,eact, to of the to.tbe ,state qo»r,t, ,Thiscourt, then,)s t/llronlycourt ,tion ,qf clll&S of cases jn tbe. territorill.l.coqrt a.t tbEl time, of where the i Il ,theprovi80 23 of the en,l;\pliIlg fl,lilthave'beellobserv,ed. In, courtjnrisdi<r and pos::.iply, have the, jurisdicAfter;,the of the provisq of 23, ,exclusiv(l..jl1risdiction .onthe federal in 11.119 ...st;t..te jnits,qrdinance qas, ratified, th Consequently either this court has the exclusive jurisdiction, orEllse no court,1;l)ulj).lrisdiction. '.. , i " : " , " ", . copgressionallegislatiQn in: rGference. to the !Jurvival ,of this class of, ,there is no for their . and theY,musia,bate.T116,cl\se hasbeenl to tllilJco.qrtby CQurt. pi. SO\ltll the. provisions of the l}ct and ·t,he constitution of tbis . 1 tiI;l,<! ,no
and
j
"
':: ·
·
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. . : , ;
,
i
" ' . I '
./ MYERS
6t i, }]
MURRAY,N.ELBON
&
Co.,
(ctrcuu 'CIl1Lrt; 8.1J.'1O'Wa,W;D. 'September Term,l800:) . L RB¥OVAL OJ' CAUSES-RESID,EXCE OJ'
.A corporation, though carrying on 'business in several states, can have a residence only in the state in wbich it ,was (lreated; so·that the averment that .. corporation was created u,ndeJ;' the laws of IIrollll,rtllin state J)recludesthe idea have become a residllDt of 'another state; and Is 'sufficient in a petition for removal from .,state Ur81 court<-:' 'Dissenting from 'TlWetMng,.: ' " "tj
'FE:DERALREP01tT:tl:R t
vol. 48. . ,"':
S.
SAlIIE-NO)[INAL PARTIES.
'l'li,e: of alJill ,showed that. person joined as defenl1ant of record W8.ll merely the attornay of tha dafendant corporation; that he had no personal interest in the controversy; that he !;Ield of certain notes Jnvolved in the litigatioj),nottn, his ,own right, but solely for the corporation. Beld,. that the presence onth'e record of such person would not affect the right of the defendant corporation to,haverthe calle removed ;from. 8tatetO a federal court.
In Motion L. L. "De LaM and WiUard ,& Willard, for complainants. Berr'uNl?i!c llenry and R. G. 'Phelpa, for defendant. SHIRAs,J;When the bill in this cause was filed, the complainants were; and 'have ever since continued to be, citizens oHowa. The dewas and iss corporation created under fendanf'MurraYt the lliw:sof1;h-estate of Illinois, and the defendant R. G,' Phelps was snd is a citizen'oftbestate oflowa. The suit was brought in the'district court ofCasscounty tIowa; aud,'upon the petition of the defendant corporation, Murray;Ndson & Co., the samewas':retnoved to this 'court. Complainants now move to remand the cause, on the ground that R. G. Phelps, one'ofthe defendants, "'as"andis a. citizen of Iowa,of which state the eorn plainan'&arelikewise 'citizens.': The averments of the bill showthst Phelps:is thea.ttorney of the corporation; he has no perof sonal interest i in' the coritro\7ersy;tbat' he holds possession of ,the notes'ande611ateraIs involved inthelitigation, not in his own right, but solely fbr the defendant corporation. The facts presented on the record IlHng'tfle ease the rule laid down in Wood v. Davis, 18 How. 487/1n "Which it is held that the presence upon the record of one who ismerely'imagentor'attomey'for the principal defendant will not affect the, of removal the principal pal'ties to the controversy;J:Tl:ilit'&se, in itSfacts,is ahrtilar to theone>tiowunder consideration,ltrid-the ruling therein made,sustains the right of removal in the present 8tHt. It is .as a further objection, that although: Murray, Nelson & 00. ia8,: CQTpotiition created- under the laws of the state of Illinois, and SO averred to! be'upon the record, yet th'atit is not made to appear that, the corpt>ralidil is not a· resident of Iowa; and, in support of. this contenti6n;: tieliance is placed upon theruli,ng made by Mr. Justice MILLER. in 42 Fed. Rep. 803; Until this decision was made, it had been the settled doctrine in this circuit that a corporation could be n resident only of the state under whose laws it was created. Fales v. Railroad Co., 32 Fed. Rep. 673; Booth v. Manufacturing Co., 40 Fed,. Rep.!. In the latter case Judge BREWER cites several of the decil'llons ofthe supreme courfupon the point, and holds that is tbata a resithereby dence in any state other than that under whose laws it was created. In thll in, the circuit,resort must be had to the decisions of the supreme court.,· I cite,a few thereof: In V, Francis t 11 Wa.IL 210, it is .. A.corp0rl\tion can, have no legal. existence outside the sovereignty by which it. was created. Its place of residence isther6js!ldcanbe nowhere
MYERS fl. MURRAY, !iELSON &
eo.
697
else. Unlike a natural person, it cannot change its domicile at will;and, although it may.be permitted to transact business where its charter does not . operate. it cannot, on that aecount, acquire a residence there." In Ex parte Sclwllenberger, 96 U. S. 377, it is declared thatits legal home only at the place where it is located by or under the authority of its charter." In Railroad Co. v. Koontz, 104 U. S. 5, it is again affirmed that"By doing business. away from their lpgal residence, they do not change their citizenship, but simply extend the field of their operations. They reside at home, biIt do business abroad." In Pennsylvania R. Co. v. St. Louis, A. T. H. R. Co., 118 U. S. 290, 6 Sup. Ct.. ,Rep. 1094, it is sa\d,: "It does not-seem to admit of question that a corporation of one state, own· ing property and doing business in another state by permission of the latter, does not thereby become a citizen of this state also." In Goodlett v. &:N. R. 00.,"122 U. S. 391,7 Sup. Ct. Rep. 12.54, it appeared that a corporation, originally created under the laws of the state of Kentucky, had been, by an act of the legislature ofTennessee,authorized to construct and operate an extension ofits line in the state of Tennessee; and the supreme court, after anexhaustiveexamination of the authorities, held that the company. must still be deemed to be a Kentucky corporation, and as such to· be entitled to remove a suit bro'ught against it in a stateeourt of Tennessee. The ground upon which it was,after some conflict in the earlier cases,finally decided that corporations could sue or be sued in the courts oUhe United States was thaUt would be conclusively presumed that a suit by or against a corporatioh is a suit by or against citizens of the state which created it; it being assumedthat the corporators or stockholders are citizens of that state. It is now settled that this is a If'gal presumption, whieh eimnot be gainsaid. Railroad Co. v.Letson, 2 How. 497; Railroad Co. v. Harris, 12 Wall. 65; Railroad Co. v. Whitton, 13 Wall. 270; MuUer v. Dows,.94 U. S. 444. In the latter case it is said: .. A corpobttion itself can be a citizen of no· state. in the sense in which the word is Used in the constitution of the United State". Asuit may bebronght in the federal courts by or against a corporation, but in such case it is regarded as a suit prought by or against the stockholders of the corporation; and for the purposes of jurisdiction it is conclusively presumed that all the stockholders are citizens of the state, which by its laws created the corporation." Therefore, when, in a petition for removal by a corporation, it is averred that the corporation was created under the laws of a given state, the legal effector such averment is that the suit is to be regarded as brought against the stockholders of such corporation, who are all conclusively deemed to be citizens of the state creating the corporation. If, then,it be true that,as applied to an individual, the averment thatheil;l aeitizen of a named state necessarily includes the averment that he .is a resident ofsucl;l iltate, residence being the test of state citizenship, tl;leaame "A corporation cannot change its residence or its citizenship. It can have
,·7lmERAL,.RElIORTEa,
vol.
;" .
case of a-vern1ent that' tb'e corl)(jraholl was cre«t¢d, under .tlie1awsof the gIVen ilfute. " , . Much of the doubt andllhcertall1ty!thro,vn around 'this class 6f ques-' tions arises ,it seems totnei f!riom .not keeping in mind the distinction bealld · Thus it a,ndresidence,.are terms. As applied .to national citi-, An alien cannot become a citizen of the United zenship, this is a
of the United States. ' be an ali,en, whfn is, as,. to ?itizenshjP, uponfhe' point' person If born an alien, whether he has since beenfiitturalized according to the re:" of the When ',thlHsBue is as citizenship ofl a. ?itizEm of then the pomt of mqUlry'is, 'of IS the person- a legal resIdent? liorn or naturalized,; is a: citizen of A citizeI1 of the.United thatJ state in which· he has his legal ilTesideoce. He ,may,oo-qay be a res;. a·. citizen· of, the sbite of Illinois, butMto-morrow he:shouldi Nmov:etotloww" ,with the intent to take up . his .permanent abodemothtdatter state,he,wbuld then become a citizen of Iowa. If he does,net·,teside inIQ'lV8.', :he cannot be said to be: aeitizenof Iowa. Iit'.'he;does3n'faehesidelin,.[owa, ,he iBa.citizenoflo;wa; arid cannot, so ]ongaa'the ii>,a of1!owa,become, a! citizen \)f an1otherstate. ,An individual::cannot,..witbin, the meaning of the removal staJtutes, be .9, cittW:o ,017}n:1Ore-staites at"orteiiand the same tirne. :.wHe must be izen deemedrto:be;aicitizen of, t1;le .tate in. Which ·he has his fixed, permanent, or: leg81·!randence,·and .beoannot beJacitizen ofariy'stateother than the one:in;whichhe·re8ides:: Therefore, when it .is: avernedthat A. B. of the state,'of.lowa, such avermentclearlyiJlcludes the AI m,isa resideht.of that state; and, as he can be a resident of but: .statelat a.time,tbie &verment:that A.. B. dsli citizen of Iowa negatives the idea that he is a legal resident of any other state. constitutionqfi the United,States declares ,that, ,'fall. persops,bo1lllor naturalized in the United ·States,. and l3ubjecttor are' oitha United States, and of' 'as the unaer thiSqqnstltllt19ilal' pi'OVlSlononJy tecogmzes the rule already in existence, to.:wit, that 'it Citizen of the States is a citizen of the'state wherein he residesjbut it puts the proposition beyond question or cavil. Therefote "an Il.\terment, that A. B.is acitizeli ofa givenetat-Ef, bfnecessity'in<\luides theaverttlent thafihe'ill:8; resident of that state,IMltl: '{)rEkludes 'the assumption' thl1thema:y. ba'tt 'resident Of any othertlJtate.'!I'hIe same 'ls"true of the averment th!itR!corporlition was laWEldf'a:tiamedstatei' tSofar,therefore, as it is held in Hi'l'8Chl''': 'Ph:reshing--Machine' 00., that;the sametule is applicable to corpcirations,u tonaitural persoDs, no:exception can 'be tabn theretojbut
lS a CItizen
re-
J.lY,¢lls .,. ,MURRAY, NELSON &00.
699
when it is said that either natural persons or corporations can be deemed of which they are citizens, or to be residents of under whose laws the corporations were created, such statement is clearly adverse to the uniform 'rule 'given us in the decisioIl.e\of the supreme court. Furthermore, if it be true that, within the meaning of th,e ute the jurisdiction, original and by removal, of the United a corporation may be' a i'\'lsident of every' $'tate wheteih"it carries on business, then it follows that, under the provisions of theaet of 1888,the number pf districts in which the' corporation may suit ,islal;gely increased.. Section 1 of that act provicles>that, in cases wherein federal jurisdiction exists by reasou of the diversity of statecitizctiship, suit hrought in the dist'rict C)f the residence of either, plaintiff or .defendant·. If railroad, insurance, commerci'al, and other corpot,ntioDs are to b.e deemed to be of the Iltates in which they carryon business, as well as of the states under whose lawl,'l' they were created,,: a single corporation may have the right to sue in the federal courts of every state in the Union., . Again, if a corporation may become a resident of a state by engaging in business therein, what character or amount of business must it carryon before it acquires a ,ret;>idence in the state. Neither the statu.te nor the. authbrities give us any guide or rule by which the fact of residence is to be thus established. The difficulties and uncertainties that would be created ,in the attelupt introduee this new rule u von. the question of residence can hardly oeestimated,butthat they would be of the most serious character is. apparent to everY0'Qe, and that f$.ct should have great.weight in deterrqin,ing whether congrl'lBS, in adopting the act of 1887 :and the amendatory act of 1888, intended to introduce a radical change in the previously well-settled rule that corporations are deemed to be residents of the state under whose laws they are created, and: cannot, by engaging in in other states, Qhange or affect such residence. In the face of the repeated utterances of the supreme court upon that question, an4the. therefor, it does not seem to me that it can be held to be an open question, and that safety lies in following the rules thus,given us. Therefore, I hold that the averment in. the record that the defendant corporation was created a corporation under the laws of the of Illinois in legal intendment precludes the idea that it could becoDle a resident ofIow;a, and it is thus sufficiently made to appear that the removal was sought by a non-resident defendant, within the meaning of the removal act. The mQtiQll.toremand is overruled.
700
J'EDERAL REPORTER I
vol. 43. et 01. "
SOWLESti;WITrERS
(Circuit
L
REMOVAL OJ' CAUSES-FEDERA.L
na,tlonal by authority the United States. &,l'ises under the laws . of the United States, within the ll1eailing of the removal act of 1888, (25 St. U. S·
A suit to recover property aequlred by the removing defendant,as t"6ceiver of a .'
s., SAlliE-Tum OP
.·..4 8 4 . ) · .
····<i,·f' . .
Said aot provides that the petltl(ln f(lrremoval shall be, file,d at or before the timE' the defendant 1s required to 'plead.' A rule of the chancery oonrtprovided that the 8ubpoona sh(l1l1d require defendant's on the first day of a stated term, and. that lie sh,ould answer witIJJn.oW days from the or the day fixed for entering appearance. A subprena required the defendant to· answer on the first day of the·April term, but theS\l:itW"lIfiot entered until tll,e last day of court. The next stated term began on second in SepW'll,'er, Held. that a petition for removal filed September 4th wasln apt tlme. '"
:In Equity. i[
011 motion to remand. Edward' A. Sowles, for complainant. Chester W. Witters, for defendants.
See 28 Fed. Rep. 121, 218.
WHEEI,ER, J. 'This suit wits brought in the court of chancery of the state, was removed into this court 60 petition of the defendant receiver, and has been heltTd on motion of the'oratrix to remand, because, as said, not arising·under.the constitution' or laws of the United States, and removed o'ut'oftime. 'l'h'ebill onitsfa:ce shows the suit to be brought to recover .property solely acquired by the removing defendant, as receiverof a national bank,under direction of the comptroller of the currency, by: force:o{ thelaw8 of the' United States, and that his defense must restrif jaflyhe has, upon authority given by' those Jaws. The words in the not 'of 1888 (25 St.' 434) on which this question arises are the same as thoseofthe act of 1875, (18 St. 470,) upon which Tennessee v;. Davi8,r100U. ,8.257, and Railtoad Co. v. Mis8i8sippi, 102 U. S. 135, were decided. ,Those decisions seem to: settle that when the acts complained ann a suit are done under a la wof the United States, or the defensemrishest· upon such a law; the suit arises under the laws of the UnitedStntes. ! . The a<lt. 'of 1888 provides for filing' the petition for removal in the '!state court,i)ill:fhe,timeor any time before the deferidant is required by the laws of thestftte,or the rule of.. the state court in which such suit is brought, to answer or plead to the declaration or complaint of the plaintiff." The rules of the court of chancery of the state provide that every stated term shall be treated as continuing, though in recess, until the next stated term; that the subprena shall require the appearance of the defendant on the first day of a stated term, or the bill will be taken as confessed; and that the defendant shall answer withill'40 days from the return-day of the· process, or the day fixed for entering an appearance. Rules, 1, 9, 24. The sllbprena required the defendants to appear on the second Tuesday in April,-the first day of the April term. The petition was filed on the 4th day of September. The next stated