Case ID: ohio-st_28/html/0208-01.html
Source: Caselaw Access Project
Author: {"author": "Day, J. Johnson, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Baltimore and Ohio Railroad Co. v. John Cary.
    1. Under the clause of the constitution of the United States, extending the judicial power of the United States to controversies between citizens of different states, a corporation, in respect to the jurisdiction of the Federal courts, is regarded as a citizen of the state where it was created.
    2. A foreign railroad corporation, by merely leasing, possessing, and operating in this state, the property of a domestic railroad corporation, does not thereby become an Ohio corporation, nor such citizen of the state.
    3. The proviso of the 24th section of the act for the creation and regulation of incorporated companies in Ohio, as amended March 19,1869 (66 Ohio L. 32), so far as it provides, that the leasing, purchasing, or operating a railroad in this state by a railroad company of another state shall be regarded as a waiver of the right of such foreign company to remove cases brought against it in the state courts to those of the United States, is repugnant to the constitution and laws of the United States, and is, therefore, ineffective as a statutory waiver of the right of such removal.
    4. When a corporation of another state, not being a citizen of Ohio, is sued by a citizen of the state, in the state court, it is entitled to have the case, under the 12th section of the judiciary act of Congress of 1,789, removed from the state court to a United States court.
    Error to the District Court of Belmont county.
    John Cary brought his action against the Baltimore and Ohio Railroad Company in the Court of Common Pleas of Belmont county, to recover of the company five thousand dollars, as damages for excavations and structures of the company in a street of the city of Bellaire, so as to obstruct the passage to and from the street of his city lots and buildings thereon.
    On coming into court, the railroad company filed its petition, setting forth, among other things, that John Cary is a citizen of Ohio; that on the 21st day of June, 1871, he brought said action against the Baltimore and Ohio Railroad Company, which is, and then was, a corporation created by the State of Maryland, and is a citizen of that state; that tihe company offers good and sufficient surety to clo all things required by the act of Congress, approved September 24, 1789, to entitle it to have the ease removed to the Circuit Court of the United States ; and prays that, the case may be removed into the next Circuit Court of the United States for the Southern District of Ohio, and that no further proceedings be had in the court of common pleas.
    A bond in the sum of a thousand dollars, with proofs of the .sufficiency of the surety, was duly filed, as described,, and tendered in the petition for removal.
    To this petition of the company Cary filed the following-answer :
    “ J ohn Cary, for answer to the petition of said defendant,, says: It is true, as alleged in said petition, that said Baltimore and Ohio Railroad Company is a corporation, originally created by the laws of the State of Maryland, and that the said plaintiff is, and was at the time of the bringing this.suit, a citizen of the State of Ohio.
    “ The plaintiff further says: That on or about the 21st day of November, a. d. 1866, there was a certain railroad,, commonly known as 1 The Central Ohio Railroad/ commencing at the city of Columbus, in the State of Ohio, and terminating at Bellaire, in said county and state, said railroad being then and there owned, controlled, and operated by a certain company, known as the Central Ohio Railroad Company, said company having been organized under the laws of the State of Ohio.
    “ The plaintiff further says: That on the 21st day of November, a. d. 1866, the said Central Ohio Railroad Company, as reorganized, entered into a contract with the said Baltimore and Ohio Railroad Company, by which the latter company was to have the possession of the said Central Ohio Railroad, and control and operate the same for a. period of twenty years from the first day of December, a. d. 1866. '
    “ The plaintiff for further answer says that m pursuance of the contract entered into by and between the Central Ohio Railroad Company, as reorganized, and the said Baltimore and Ohio Railroad Company, on the 21stof November, 1866, the said defendant entered into an agreement, on the 1st day of December, 1866, with the said Central Ohio Railroad Company, as reorganized, for operating said Central Ohio Railroad, which agreement provided in article first, ‘ that the said Baltimore and Ohio Railroad Company should take possession of the entire railroad, appurtenances, and property of every description belonging to the said Central Ohio Railroad Company for twenty years from the first day of December, a. d. 1866;’ which said article of agreement was, on the 13th day of February, a. d. 1869, modified in this, to wit, ‘ that the term and possession of the said Baltimore and Ohio Railroad Company to the Central Ohio Railroad and property of the Central Ohio Railroad Company, as reorganized, shall be continued for other periods of twenty years, indefinitely,’ etc.
    “ The plaintiff further says that the said defendants, by virtue of the articles of agreement referred to above, became the lessees and owners of the Central Ohio Railroad, and operated, used, and controlled said road from the first day of December, 1866, to the commencement of proceedings herein, to wit, June 21, 1871, and are still the lessees and operators of said railroad, and that on the-day of July, A. D. 1867, being then and there the lessees of said railroad, the said defendant, by an article of agreement executed by the town council' of Bellaire, and of the Baltimore and Ohio and Central Ohio Railroad Companies (a full copy of the terms and stipulations of which article of agreement is hereto attached as part of this answer) agreed to construct and build a railroad bridge over the Ohio river, through First street and across Crescent, Water, Belmont, and Guernsey streets, and the intersecting alleys in said town of Bellaire, in said county and state, for the purpose of continuing said bridge to and connecting the same with the Central Ohio Railroad, and by virtue of said article of agreement, did enter upon said First street, and the above streets and alleys, and made large excavations, built and ■constructed, a railroad bridge in front of said lots in said petition described (as will more fully appear by reference to tbe petition of said plaintiff, which is here referred to ■and made a part of this answefi).
    “ Therefore, and by reason of the premises aforesaid, the said John Cary, plaintiff, avers that the said defendant, the Baltimore and Ohio Railroad Company, is, and was at the time of bringing this suit, a citizen of the State of Ohio, and ought not to have this suit removed into the circuit court of the United States, to be held in the southern district of the State of Ohio, as prayed for in said petition of said defendant.”
    To this answer the railroad company demurred, and the court overruled the demurrer and dismissed the petition for the removal of the case, to all which the company excepted.
    Thereupon the company filed its petition in error in the district court, to reverse the judgment of the common pleas; but that court gave judgment affirming that of the common pleas, and this petition in error was filed in the Supreme Court to reverse the judgments of the courts below.
    
      J. H. Collins, for plaintiff in error.
    
      D. D. T. Cowen, for defendant in error.
   Day, J.

The Baltimore and Ohio Railroad Company, a foreign corporation,, having been sued in the state court by a citizen of the state, sought to remove the case to the United States Court, under the twelfth section of the federal judiciary act of 1789, which provides that if a suit be commenced in a state court by a citizen of the state against a citizen of another state, when the matter in dispute ex ceeds five hundred dollars, and the defendant at the time of entering his appearance shall file a petition for the removal of the cause for trial into the next Circuit' Court of the United States, and shall offer good and sufficient security for his proceeding therein, it shall be the duty of the state court to accept such security, and proceed no further in the case.”

It is ordained by the constitution of the United States' that the judicial power of the United States shall extend to-controversies “ between citizens of different states;” that the laws of the United States, made in pursuance of the constitution, “shall be the supreme law of the land, and that the judges in every state shall be bound thereby, anything in the constitution or laws of any state to the contrary notwithstanding.”

It is not disputed but that the requisitions of the statute were fully complied with to authorize the removal of the case, if the company was in law entitled to have the case transferred. But the right of the company to have the case removed to the federal court is disputed on two-grounds: 1. That the company is a citizen of Ohio ; 2. If not such citizen, it has waived the right of removal.

1. The railroad company is a corporation, and is sued by its corporate name. A corporation is an ideal existence, created by legislative enactment, and, in general, it is incapable of being a citizen; but, being endowed by law with the capacity of suing and of being sued, it may become a party to suits in court; and, inasmuch as the jurisdiction of the federal courts is made, in some cases, to depend upon the citizenship of the parties litigant, a corporation, in respect to such jurisdiction, is regarded as a citizen of the state which creates it, and this presumption is now held by the Supreme Court of the United States to be conclusive. Railroad Co. v. Wheeler, 1 Black. 286; Railroad Co. v. Harris, 12 Wall. 65; Railway v. Whitton, 18 Wall. 270.

The Baltimore and Ohio Railroad Company was incorporated by the State of Maryland, and, therefore, so far as relates to the jurisdiction of the federal courts, is a citizen of that state, and, being sued here by a citizen of this state, is entitled to have the case transferred to the federal court, unless, as it is claimed, under the facts of the case, the company may also be regarded as a citizen of Ohio.

If it be assumed that a corporation, within the meaning ■of the federal judiciaryjact, may be a citizen of more, than one state, do the facts developed by the record in this case warrant a conclusion that the company is such citizen of this state ?

It is not pretended that its existence as a corporation depends, in any manner, upon the legislation of this state; but the claim for regarding the company as a citizen of Ohio is based wholly upon the fact that the company has leased and operates a railroad in this state, owned by another railroad company, which is a corporation created by the State of Ohio, whose corporate existence and powers are in no wise affected by the lease. It is, then, nothing more than the case of a foreign corporation leasing, possessing, and operating, in this state, the property of a domestic corporation, which does not necessarily constitute the lessee, though a corporation, a citizen of Ohio, for judi-. cial purposes, any more than the same transaction with an individual, being and remaining a citizen of another state, would have that effect.

A corporation is never regarded as a citizen of a state, other than that to which it, at least in some measure, owes its being. If, therefore, the corporate existence of this •company in no sense depends upon the laws of Ohio, it -can not be regarded as a citizen of the state.

It was held by the Supreme Court of this state in The State v. Sherman, 22 Ohio S.t. 411, that a corporation of another state, though by purchase lawfully vested with the property and all the franchises of a corporation created by this state, without a new organization as a corporation of Ohio, does not become an Ohio corporation ; much less would a foreign corporation be constituted an Ohio corporation by becoming the mere lessee of the property of a •domestic corporation. The Baltimore and Ohio Railroad Company can not, therefore, be held to be an Ohio corporation, nor, on that ground, a citizen of this state.

Moreover, it has long been the policy of this state, as manifested by both its judicial and legislative departments, to recognize and protect foreign corporations, in owning property and doing business in this state, under corporate-powers derived from their respective states. In The State v. Sherman, before referred to, it was held that “under the present laws of Ohio, foreign railroad corporations, whose roads lie partly in this state, are accorded the right to own, operate, and maintain their roads in Ohio, in the same manner as domestic railroad companies.”

That foreign corporations, allowed to own property and do business in Ohio,are not considered as citizens of the-state is evinced by legislative enactments, in some instances requiring them, as a condition precedent to their right to do business in the- state, to waive their right, as citizens of other states, to remove cases brought against them in the state courts to the federal courts.

The act authorizing the leasing and operating of railroads in this state by foreign railroad corporations expressly provides that such leasing and operating shall be regarded as a waiver of their right, as citizens of other-states, to avail themselves of the jurisdiction of the federal courts.

So far, then, from regarding a foreign railroad corporation, leasing and operating a railroad in this state, as a cit izen of the state, the legislature expressly recognizes it to-be a citizen of another state, and provides against the exercise of its rights, as such, foreign citizen, in this state.

After all, the question of federal jurisdiction, dependent upon the citizenship of the parties, like all questions relating to such jurisdiction, must be controlled by the decisions-of the federal court of- last resort. Insurance Co. v. Dunn, 19 Wall. 214; Insurance Co. v. Morse, 20 Wall. 445. In the-light of these decisions, we are constrained to hold that, with reference to the jurisdiction of the federal courts, the-Baltimore and Ohio Railroad Company, as a corporation of the State of Maryland, is a citizen of that state; that as 3 uch corporation, it could not migrate, but might, if permitted by its charter, exercise its faculties in Ohio in accordance with and so far as allowed by the laws of the state; and that,, under the facts of this case, it can not be regarded as a corporation or citizen of Ohio. Railroad Co. v. Harris, 12 Wall. 65.

2. But it is claimed that, if the company is not held to be a citizen of Ohio, it must nevertheless be regarded as having waived its right, as a citizen of another state, to remove cases brought against it in the state courts to those of the United States.

This claim is founded alone upon the concluding proviso of the twenty-fourth section of the act providing for the creation and regulation of incorporated companies, as amended March 19, 1869 (66 Ohio L. 82), which is as follows: “Provided further, that it shall be regarded as one of the conditions upon which a railroad company of another state may lease or purchase a railroad, the whole or any part of which is in this state, or make any arrangement for operating the same under the provisions of this section, that such railroad company of another state thereby waives the right to remove any case from any of the courts of this state to any of the courts of the United States, or to bring a suit in any of the courts of the United States against any citizen of this state; and a violation of such condition shall operate as a forfeiture of all rights acquired under such lease, purchase, or arrangement.”

Apart from all considerations to the contrary, growing out of the fact that all the rights of the Baltimore and Ohio Railroad Company were acquired by contract before the enactment of this proviso, if it be viewed as applicable to the ease before us, so far as regards the waiver provided for, it is open to the objection made to a similar provision, which was considered in the ease of the Assurance Co. v. Pierce, 27 Ohio St. 155. In that case it was held by this court, upon the authority of the tribunal of last resort upon the question, that a statute of Ohio, which requires a foreign insurance company, as a condition precedent to its right to transact business in the state, to waive its right to remove cases brought against it in the state courts to the federal courts, is, so far as regards such waiver, repugnant to the constitution and laws of the United States, and therefore void.

The case of the Home Ins. Co. v. Morse, 20 Wall. 445, which was followed in that case, embraces, in the principles determined, all foreign corporations alike, and is as clearly conclusive of the invalidity of the statutory waiver relied upon in this case, as it was of the invalidity of the statute relied upon in that. We are, therefore, equally bound to follow it in this case, and must, for the reasons stated in that case, hold the proviso in question ineffective as a waiver of the right to remove cases to the federal courts.

It results that the judgment of the district court and that of the common pleas must be reversed.

The cause will be remanded to the court of common pleas, to be proceeded with according to law.

Ashburn, J.,„ dissented from the third point in the syllabus.

Johnson, J.

I am unable to concur in the opinion announced in this case.

The magnitude of the interests, both public and private, •affected by the conclusions reached, warrants me in placing upon record the reasons for this dissent.

The action below was brought by Cary, a citizen of Ohio, in the Court of Common Pleas of Belmont county, to recover damages for injuries to his real estate, committed by the defendant, a corporation styled “ The • Baltimore and Ohio Railroad Company,” while that corporation 'was engaged in extending the Central Ohio Railroad track .to connect the same with a bridge across the Ohio river, at Bellaire, in said county.

The damages claimed exceeded five hundred dollars. The defendant filed a petition for a removal to the circuit court of the United States, on the ground that it is “a corporation created by the laws of the State of Maryland, and was therefore, at the time the suit was brought, and now is, a citizen of the State of Maryland, and is to be so regarded for the purposes of this petition.

The plaintiff’s answer admits that the Baltimore and Ohio Railroad Company was originally created by the laws of the State of Maryland, but avers that as to this action it was and is a citizen of the State of Ohio; that such corporation, under authority of the laws of Ohio, leased, from the Central Ohio Railroad Company as reorganized, its road, with all its corporate powers conferred by Ohio law, and as such lessee it derives all its powers, franchises, and privileges from such lease, and the laws of Ohio, under which said road is owned and operated by defendant.

It appears from the answer that this lease is in perpetuity, and therefore it is averred that the defendant is the lessee and owner of the road, and as such committed the grievances complained of, on the line of the Central Ohio Railroad, in the State of Ohio. To this the defendant demurred. This demurrer presented the single question, whether, upon the facts thus admitted, the defendant in this action is to be regarded as a citizen of Ohio or of Maryland, within the meaning of article 3, section 2, of the constitution of the United States, and of the act of 1789.

Is a corporation,'originally created by the State of Maryland, and subsequently authorized by the laws of Ohio, to become the lessee of an Ohio road, constructed, operated, •and leased solely under Ohio laws, which confer on the lessees no further or greater powers, franchises, or privileges -than was possessed by the lessors, responsible as a citizen ■of Ohio for acts committed within this state in the exercise of the powers and franchises conferred by such lease, where under such laws it is liable to be served with process within this state ?

When narrowed down, the question resolves itself into this: What is the test of citizenship of a corporation, within the meaning of the judiciary article of the Constitution of the United States?

In the case of the Bank of Augusta v. Earle, 13 Peters, 512, it was 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 legal existence. It must dwell in the place of its creation.” This doctrine has been repeatedly affirmed, and especially in Paul v. Virginia, 8 Wallace, 168; Lafayette Insurance Co. v. French, 18 Howard, 407; Ohio and Mississippi Railroad Co. v. Wheeler, 1 Black. 295.

Long before the case of the Bank of Augusta v. Earle, it had been decided that a corporation was not a citizen, within the meaning of this article of the Constitution of the United States, unless the persons who compose the corporate body were all citizens of the state wherein it exercises its corporate powers.

In such case it was regarded as the joint suit of the individuals acting under the name conferred upon them, and consequently entitled to maintain such suit against the citizen of another state in the corporate name. Hope Insurance Company v. Boardman, 5 Cranch, 57; U. S. Bank v. Devaux, 5 Cranch, 61; U. S. v. Planters’ Bank, 9 Wheat. 410; Commercial Bank v. Slocom, 14 Pet. 60.

In the case of The Louisville, C. & C. R. R. Co. v. Letson, 2 Howard, 497, after grave consideration, it was held,, modifying the former ruling, that the court would not look to the actual residence of the members of the corporation,, hut would presume they were citizens of the same state, in which alone the corpoi’ate 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 creating the corporate body; and that no averment or evidence to the contrary is admissible, for the purpose of withdrawing the suit from the jurisdiction of a court of the United States.

In that case, which was ably argued and carefully considered, it was sought to oust the federal court of jurisdic - tion because some of the stockholders were not citizens of the state where the corporation existed, and was sued.

The syllabus on this point was: “A corporation created by, and transacting business in a state, is to be deemed an inhabitant of the state, capable of being treated as a citizen, for all the purposes of suing and being sued, and an averment of the facts of its 'creation and the place of transacting business is sufficient to give the circuit courts jurisdiction.”

In the opinion of the court, it is said: “ 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 pei-son, 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.” Again: “Like a citizen it makes contracts, and though in regard to what it may do in some particulars, it differs from a natural person, and in this especially, the manner in which it can sue and be sued, it is substantially, within the meaning of the law, a citizen of the state which created it and where its business-is done, for all the purposes of suing and being sued.”

This subject again came before the court in Marshall v. The B. & O. R. R. Co., 16 Howard, 314. That was a suit by a citizen of Virginia, in the circuit court of Maryland^ against the defendant, as a body incorporated by the laws-of Maryland.

In that case the court say: “ The necessities and conveniences of trade and business require that such numerous-associates and stockholders should act by representation, and have the faculty of contracting, suing and being sued in a fictitious or collective name. It is not reasonable that those who deal with such persons should be deprived of valuable privileges by a syllogism, or rather sophism, which deals subtly with words and names, without regard to the* things or persons they represent.” . . . “ Eor all the purposes of acting, contracting, and judicial remedy, they can speak, and act, and plead only through their representatives or curators.”

“ The persons who act under these faculties, and use this corporate name, may be justly presumed to be resident in the state, which is the necessary habitat of the corporation.”

Perhaps no case throws more light on the problem before us than The Ohio & Mississippi R. R. Co. v. Wheeler, 1 Black. 295. That was an action by the corporation, described as having been “ 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 Ohio,” brought in the United States Circuit Court of Indiana, against the defendant, a citizen of Indiana, who pleaded to the jurisdiction on the ground that the defendant was also a citizen of the same state, being a body corporate, by virtue of a law of the State of Indiana, under which the road was built and operated. The plea was sustained, on the ground that the corporation was, in fact, a citizen of Indiana. It was held: That a coi'poration, endued,with capacities and faculties by the co-operating legislation of two states, can not have one and the same legal being in both states ; that the legal entity or person which exists by force of law can have no existence beyond the limits of the state which gives it life and power to act, and that the corporation in Indiana is a separate and distinct body from that of the same name in Ohio, and that “ they can not be joined in a suit as one and the same plaintiff.\ nor maintain a suit in that name against a citizen of Indiana or Ohio in a Circuit Court of the United States.”

The significance of this decision consists in the holding that, although this corporation was operating one continuous line of railway in two states, with its principal office and place of business in Ohio, yet, because it owed its right to build and operate its road in Indiana to the legislation of that state, it was, in fact, for the purposes of citizenship, ■two distinct corporations, one a citizen of that state, the ■other of Ohio, and could sue in neither state in the courts •of the United States. In legal effect, it was two corporations uniting as one plaintiff, the one being a citizen of Indiana, the other of Ohio.

Insurance Company v. Francis, 11 Wall. 415, presented this question, upon this state of facts : The Germania Eire Insurance Company, which was incorporated by and had its head office in New York, established an agency»in Aberdeen, Mississippi, and the averment was, “ a corporation of New York, located in Aberdeen, and doing business there.” The court held that this allegation was, in legal effect, that the company was a citizen of New York, following the cases of O. & M. R. R. Co. v. Wheeler, and Louisville R. R. Co. v. Litson, adding, as the reason : “ Because a corporation can have no legal existence outside of the sovereignty which created it. Its place of residence is there, and nowhere else.”

The next case in order is that of The B. & O. R. R. Co. v. Harris, 12 How. 65, which was twice argued. The company had a charter from the State of Maryland, to build and operate a road from Baltimore to the Ohio river, and from the same point, by subsequent grant, to run a branch to the District of Columbia.

Subsequently, the State of Virginia granted to that corporation the same rights in that state as it had in Maryland.

Congress also authorized the company to extend its branch into the District of Columbia. The question was, whether the corporation could be sued in the courts of the District of Columbia for injuries received as a passenger on the road in the State of Virginia. The office of the corporation, where its board met and transacted business, was in Baltimore. The writ was served on the president of the company, within the district. The jurisdiction of the court was limited to “ inhabitants of the district, or persons found within the district.”

It was claimed by the company, on the authority of The O. & M. R. R. Co. v. Wheeler, that, as a corporation of Maryland, it was not an inhabitant of the District of Columbia ; but it was held: That the acts of Congress, and of the State of Virginia, were in the nature of enabling acts, and not, as in the Wheeler case, acts creating new corporations, when the unity of the road was unchanged in nam,e, locality, election, and power of officers, mode of declaring dividends, and doing all its business, and that, in such case, no new corporation was created, and that in view of such unity, it was liable as an inhabitant of the District of Columbia.

The same question that arose in the Wheeler case was again before the court in Railway v. Whitten, 13 Wall. 270. That was an action against the Chicago and Northwestern Railway Company brought in one of the state courts of Wisconsin to recover over $500. After service, the plaintiff, who was a citizen of Illinois, moved for a transfer to the Circuit Court of the United States for the district of Wisconsin. The motion was resisted on the ground that the defendant was a corporation existing under the laws of Illinois, Wisconsin, and Michigan, and its line of railway was located and operated in each of those states; that its entire line of railway was managed and controlled by a single corporation; that all its powers and franchises were exercised and its affairs managed and controlled by one board of directors and officers; that its principal office and, place of business was at the city of Chicago in Rlinois, and that there was no office for the control or management of the general business and affairs of the corporation in Wisconsin.

The grounds for the motion were that the plaintiff was a citizen of Illinois, and the defendant was a citizen of Wisconsin. The company resisted the removal on the ground that it was a corporation by the laws of Illinois, Wisconsin, and Michigan, with its board of officers and headquarters at Chicago, and with no office for the management of its corporate business in the latter state. It was held, upon this state of facts, that the corporation being sued in Wisconsin, it could only be brought into court as a citizen of that state, whatever its citizenship ivas elsewhere.

The language of the court was: “ The plaintiff' is a citizen of the State of Illinois, and the defendant is a coi’poration created under the laws of Wisconsin. Although a corporation, being an artificial body created by legislative power, is not a citizen within several provisions of the constitution ; yet it has been held, and that must now be regarded as settled law, that where rights of action are to be enforced, it will be considered as a citizen of the state where it was created, within the clause extending the judicial power of the United States to controversies between citizens of different states. The defendant, therefore, must be regarded for the purposes of this action as a citizen of Wisconsin. But it is said, and here the objection to the jurisdiction arises, that the defendant is also a corporation under the laws of Illinois, and therefore is also a citizen of the same state with the plaintiff. The answer to this proposition is obvious. In Wisconsin the latos of Illinois have no operation. The defendant is a corporation, and as such a citizen of Wisconsin by the laws of that state. Being there sued, it can only be brought into court as a citizen of that state, whatever its status or citizenship may be elsewhere.” 13 Wall. 283.

Referring to the case of the O. & M. R. R. Co. v. Wheeler, the court says, that neither state could confer on the company corporate existence in the others, nor add to or diminish the powers then exercised, and although composed of and representing under the corporate name the same natural persons, yet its legal entity, which existed by forge of law, could have no legal existence beyond the state which brought it into life, and endowed it with its faculties and powers.

Here was a corporation with a continuous line of road and principal office, where all its corporate powers were exercised in one state, but owing its right to operate the road to the legislation of several states through which it passed, held to be a citizen of any one of such states where, by the law authorizing it to do so, it could be sued. In Lafayette v. French, 18 How. 404, it was held that a state could impose on a foreign corporation, as a condition to its doing business in such state, that it should be liable to be sued therein, and the court say, “ being sued there, it can only be brought into court as a citizen of that state, whatever its status elsewhere.” We think this case is decisive of the one at bar. In both eases, the court looks to the state which endowed the corporation with its faculties and powers and where it may be sued, to determine its citizenship regardless of its status elsewhere.

In The B. & O. R. R. Co. v. Gallahur, 12 Gratt. 655, it was held that the Baltimore and Ohio Railroad Company was a Virginia corporation by virtue of the legislation of that state, wherein it was provided (after reciting the charter of the company as enacted by the State of Maryland), that the corporation thus created should have all the rights and be subject to all the obligations in Virginia, as conferred or imposed on the company in the (State of Maryland.

So in Maryland v. The Northern Central R. R. Co., 18 Md. 193, it was held that a corporation owing its existence in part to the State of Maryland, and in part to the State of Pennsylvania, formed by the consolidation of corporations existing by separate acts of those states, and exercising its franchises and owning and operating its line of road in ea%h state, must, for the purposes of justice, be regarded in the ■courts of each state from which it derives its being as a domestic corporation to the extent of the state in which it acts, and as a foreign corporation as to the other sources of its existence.

’Where there was one corporation, owning and operating a continuous line of railway through two states, formed by uniting two distinct corporations, one created by each state, and both united by the acts of the two states, it was held that this constituted it a domestic corporation of each of the states. Sprague v. The H. P. & F. R. R. Co., 5 R. I. 233.

In Goshorn v. Supervisors, 1 West Va. 308, the Hemp-held Railroad Co. was incorporated by Pennsylvania to build a road from Greensburg, in that state, to the boundary line; and the State of Virginia afterward authorized it to extend its road to Wheeling, in the latter state.

It was held that the act of Virginia conferred on the Hempheld company such rights and privileges as to make it a Virginia corporation. It is said no particular or precise-form of words is necessary to the creation of a corporation,, but it may result from implication and intendment.

■ It is laid down in the text books that no particular form of words is essential to create or confer corporate power.. Any language, clearly manifesting the legislative intent,, whether in general terms or by special enactment, is sufficient. Angel & Ames on Corp.

It is also now well settled, that the lease of the franchises- and property, of one railroad corporation by another in* Ohio does not confer on the lessee powers not possessed by the lessor.

This question was directly before the Supreme Court in Campbell v. M. & C. R. R. Co., 23 Ohio St. 168. There the M. & C. R. R. Co., which had been constructed under a special charter granted in 1845, had, under section 24 of the-general corporation law of May 1, 1852 (which is the same-law under which the present lease was made), purchased the Scioto and Hocking Valley Railroad, which had been constructed under the law of 1848. The vendee claimed the right to operate the road under its own charter, and not under the charter of the vendor.

The question before the court was, whether the purchased road was governed, as to rates for transportation, by the law under which it was built, the act of 1848, or by the law governing the M. & C. R. R.

The 24th section provides for leasing as well as purchasing T and the same rules must be applicable to both. It is said : “ As the power of the purchasing company to receive tolls, as conferred by its own charter, is limited to roads constructed under its charter, it must be inferred that the legislature intended the purchasing company to succeed to the powers and privileges of the vending company, and to none other. . . . That by a sale of the road no greater rights therein can pass to the vendee than were owned by the vendor.”

The same is equally true as between lessor and lessee, under the same statute.

This question, .as between lessor and lessee, -was decided in The Penn. R. R. Co. v. Sly, 65 Penn. St. 205, where it was 'held, that the Pennsylvania R. R. Co. leasing the road of the Philadelphia and Erie Railroad Co., with all their rights, powers, and privileges, was not subject to the •charges fixed by its own charter, but to the regulation in -the charter of its lessors. It is said: “ By a lease a corporation as well as a natural person would succeed to all the rights and be subject to all the limitations imposed on the lessor,” and that, “ the lessee is the assignee, for a term or period,of the lessor, and is his bailiff to hold possession for him.” “ The legislature, by authorizing another corporation to take such lease, have, by necessary implication, conferred them.”

Both reason and authority establish the proposition that the vendor or lessee of a railroad derives all its powers and -franchises to operate the road from the charter and legislative provisions conferred on the vendor or lessor.

The B. & O. R. R. Co. derives all its powers to lease and •operate this road, from the State of Ohio. Its Maryland •charter was inoperative here. It can do no act as a .corporation except such as the Central O. R. R. Co. was authorized to do.

Prom a careful analysis of the foregoing cases, the followfing rules are deducible:

1. That a corporation created by the laws of a given ■•state, as a legal entity, can have no legal existence outside of that state; and that if the state of its creation permits •or authorizes it to transact any of its corporate business •outside of such state, it can only exercise such extra-territorial powers by the license or permission of other states, •or under principles of comity between states.

2. That where such á corporation, deriving all its corporate power to act from the state of its creation, exercises "these granted powers in other states, it is conclusively presumed to be a citizen of the state of its creation for the purposes of determining the jurisdiction of the United States.

3. But where a corporation, as for instance a railroad company, created by the separate but concurrent acts of two or more states, and by each is authorized to construct a road in each state, making together one continuous line of road, all operated by one corporation, with one board of officer’s, and one place of- business in one of such states; it is nevertheless a citizen of each of the states granting it such powers, and in which it may be served.

4. So, where existing corporations of different states, owning and operating roads in their respective states, are authorized by their respective states to consolidate and form one company, the latter takes the place of each original company, and is, as to that part of the road and business in any one of the states, a citizen of that state, whatever may be its status in the other state or states.

That where the matter in controversy is the result of the exercise of its franchises in any one of such states, it is an inhabitant and citizen of that state if by the law of that state it can be served there. .

5. Where a coi’poration originally created by one state, with authority to construct and operate a road therein, is authorized by another state to extend its road through the latter state, or to purchase or lease such a road already constructed, it thereby becomes a corporation of such latter state, as to all exercise of corporate powers therein. Its powers and franchises are measured by the laws of the state wherein it exercises its functions, and not by those of the state of its original creation.

6. Apply these principles to the case at bar. The lessee succeeds only to the powers and franchises of the lessor, and is subject to the same liabilities. All these are derived from the laws governing the Central Ohio Railroad Company as reorganized. By the lease they were transferred to +he Baltimore & Ohio Railroad Company. It was thus clothed with authority to own and operate'a road in Ohio. It conferred on a corporation, originally created by the State of Maryland, the right to be a corporation in Ohio.

In legal effect, it was an authority to an existing foreign corporation to become an Ohio corporation, and enjoy the corporate powers conferred on the Central Ohio Railroad Company.

It was a legislative authority for a foreign corporation to-become an Ohio corporation by lease or purchase from a domestic corporation, its charter and property, with all its powers, immunities and privileges. The lessee became the bailiffs of the lessor for part of the term of the lessor, and therefore stands in his stead. Co. Lit. 239 b., note 2.

The legislature adopts a corporation of another state, so-far as to permit it to take the place of one created by Ohio law. Instead of requiring the stockholders of the Maryland corporation to take out a certificate and become-a de jure corporation under our statute, it permits a corporation already formed to dispense with this step in the ci’eation of a domestic corporation to become such under*its existing name.

It is claimed that the case of Ohio ex rel. v. Sherman, 22 Ohio St. 411, is in conflict with the conclusion hex-e x’eaehed, but a careful examinatioxx of the issue there presented will show that such is not the fact.

There the questioxi was by what authority certaixx persons wex’e assuming to act as directors of the Pittsburgh, Ft. Wayne and Chicago Railway Compaxxy, which was the owner of and opex-ating a road thx’ough the state. That company was the vendee or grantee of the road and franchises of the Pittsbui’gh, Ft. Wayne and Chicago Railroad Company, which had been formed by the consolidation of distinct companies and roads existing by the laws of Pennsylvania, Ohio, Indiana and Illinois. The road, while-owned by the consolidated company, was sold by order of coux’t, and passed to the Pittsburgh, Ft. Wayne and Chicago Railway Company.

The inquix’y was based on the expi’essed assumption that the consolidated company was an Ohio corporation, and the real question was, did the conveyance passffo the railway company its right tobe an Ohio corpox’ation? The court held that this deed of conveyance, made under the act of 1863 to this Pennsylvania corporation, did not tx’ansfer the right of the Pittsburgh, Et. Wayne and Chicago Railroad Company, an Ohio corporation, to be an Ohio corporation, because the law of 1863 did not provide for the individual liability of its members.

But for this it is implied, though not expressed, that this is the only reason why it is not a legal corporation of Ohio. The whole reasoning of the court rests upon this ground.. It is held that the transfer of the franchises to be a corporation under the Ohio law was in legal effect a surrender of the old charter and taking out a new, similar to the grantee; but as such grant of this new charter could not be made, •except incumbered with the individual liability imposed by the constitution of Ohio, and as this was not done, the .grantee was not a “legal.Ohio corporation.”

But for this constitutional provision there can scarcely be a doubt the court would have held that this transfer of the franchise and property of the Pittsburgh, Et. Wayne .and Chicago Railroad Company to the Pittsburgh, Et. Wayue and Chicago Railway Company, under Ohio laws, made the vendee an Ohio corporation, as was held in the numerous cases cited.-

There, the real question was, whether, by the deed of •conveyance, under the act of 1863, the vendees became an •Ohio corporation. The answer is in the negative for the reason stated, and not because, upon common law principles, it was not competent for the legislature, in the absence of the constitutional provision, to authorize such transfer.

In the ease at bar, the question of individual liability is wholly immaterial to the questiou at bar.

Here, the sole question is, whether the defendant, within the meaning of the constitution of the United States, is in fact a citizen of Ohio.

This does not depend on individual liability clauses, or absence of them, in state constitutions, but on the meaning of the word citizen as found in the judiciary article of ■the constitution of the United States. Upon the facts ¡stated, there can be no doubt that, under the rules laid down in O. & M. R. R. Co. v. Wheeler, and in Railway v. Whitten, and the numerous other cases cited, the Pittsburgh, Et. Wayne and Chicago Railway Company was in fact a citizen of each of the states through which its road runs, and from which it-has derived its corporate powers within such state. And upon the question of jurisdiction of the federal courts, this corporation is in fact- an inhabitant and citizen of each of.such states, although, under the peculiar provisions of the constitution of Ohio, it is not de jure a domestic corporation.

Again, it is said the decision of this court, in Passenger Ass’n Co. v. Pierce, 27 Ohio St. 155, controls this case. That case follows that of Insurance Co. v. Morse, 20 How. (U. S.) 455.

Both these cases turn on the validity of an act of a state requiring a foreign corporation to waive its right, as a citizen of another state, to remove a case to the federal courts.

In both, the foreign citizenship is admitted, and the right of a state to exact a waiver of such citizenship was the only point. • -

Here the foreign citizenship is denied, and the claim is made that it is a domestic citizen. The question of waivei does not arise upon the record in the case before us.

Again, those cases were unlike this. They were all cases of foreign corporations, exercising in other states, through courtesy or by legislative permission, the powers and franchises conferred by the state of their creation. They derived none of their corporate franchises from the state where doing business, but acted entirely under their home charters, while in this case they derive none of their powers from their home charters, but all from the state where the business is done.

But for that provision of our constitution as to the individual liability of■ stockholders, there can be no doubt that the plaintiff in error became a de jure as well as a de facto domestic corporation, subject to the sovereign control of the state as fully as the lessor corporation. It assented to the legislation authorizing it to have and operate the road under its Ohio charter. By this legislation a condition was imposed that it'might be sued in Ohio. It thus, to all intents, became de facto, if not de jure, an Ohio corporation — a citizen of Ohio — as fully as if the stockholders of this Maryland corporation had taken out an Ohio charter. Eor these reasons the judgment of the common pleas and district court should have been affirmed.