Ohio & Mississippi Railroad v. Wheeler

. 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.”

Tlie 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 befóre us.

In the ease 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 d citizen, within the meaning of the' Constitution of the United States, and *296 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 coi'poration, 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 whibh 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 ease 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 *297 name, as a suit by or against citizens of the State which created it.

It follows from these decisions,' that this suit in the corpora ate 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 ün a court of the United States, where jurisdiction of the ease depends altogether on the citizenship of the parties. And, ip such a suit, it can make no\ difference whether the plaintiffs sue in their own proper names, or by the corporate name aiid 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, ancl to have been endued with the capacities and faculties it possesses by the co-operáting 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 jurisdiétion 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 powei’s, anti intended to accomplish the same objects, and it is sp'oken of in the laws of the States as one eox’poratb body, exercising the same powei’s and fulfilling the sainé duties in both Slates. 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 and represent, under the corporate name, the same natural persons. But the legal entity or pei’son, which exists by force of law, can ñave no existence beyond the limits of the St»te or sovereignty which brings it into life and endues it with, its faculties and powers-. The President’ and Directors *298 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.