Source: https://openjurist.org/160/us/327
Timestamp: 2019-04-18 16:22:39+00:00

Document:
LEHIGH NIN. & MANUF'G CO.
Action by the Lehigh Mining & Manufacturing Company against J. J. Kelly, Jr., James C. Hubbard, Le Roy Day, and others. The action was dismissed by the circuit court (64 Fed. 401), and plaintiff, brings error. Affirmed.
The agreed statement of facts was as follows: '(1) That the land in controversy in this case was prior to March 1, 1893, claimed by the Virginia Coal & Iron Company, and had been claimed by said last-named company for some 12 years prior to said date. (2) That said Virginia Coal & Iron Company is a corporation organized and existing under the laws of the state of Virginia, and is a citizen of Virginia. (3) That on March 1, 1893, said Virginia Coal & Iron Company executed and delivered a deed of bargain and sale to said Lehigh Mining & Manufacturing Company, by which it conveyed all its right, title, and interest in and to the land in controversy to said last-named company in fee simple. (4) That said Lehigh Mining & Manufacturing Company is a corporation duly organized and existing under the laws of the state of Pennsylvania; that it was organized in February, 1893, prior to said conveyance, and is, and was at the date of commencement of this action, a citizen of the state of Pennsylvania, and that it was organized by the individual stockholders and officers of the Virginia Coal & Iron Company. (5) That the purpose in organizing said Lehigh Mining & Manufacturing Company, and in making to it said conveyance, was to give to this court jurisdiction in this case, but that said conveyance passed to said Lehigh Mining & Manufacturing Company all of the right, title, and interest of said Virginia Coal & Iron Company in and to said land, and that since said conveyance said Virginia Coal & Iron Company has had no interest in said land, and has not, and never has had, any interest in this suit, and that it owns none of the stock of said Lehigh Mining & Manufacturing Company, and has no interest therein whatever.' It was also agreed that the two pleas should be tried by the court, without a jury, upon the above statement of facts, with the right in either party to object to any fact stated in it on the ground of irrelevancy or incompetency.
The plaintiff, by counsel, objected and excepted to the statement in the first part of the fifth clause of the foregoing statement, viz. 'that the purpose of organizing the Lehigh Mining & Manufacturing Company, and in making to it said conveyance, was to give to this court jurisdiction in this case,' because the same was irrelevant and immaterial.
The circuit court, Judge Paul presiding, dismissed the action for want of jurisdiction in the circuit court. 64 Fed. 401.
Mr. Justice Shiras, Mr. Justice Field, and Mr. Justice Brown dissenting.
R. A. Ayers, J. F. Bullitt, Jr., and R. C. Dale, for plaintiff in error.
F. S. Blair and H. S. K. Morrison, for defendants in error.
Some of the paragraphs of the agreed statement of facts are so drawn as to leave in doubt the precise thought intended to be expressed in them. But it is clear that the individual stockholders and officers of the Virginia corporation, in February, 1893, organized the Pennsylvania corporation; that immediately thereafter, on the 1st day of March, 1893, the lands in controversy, which the Virginia corporation had for many years claimed to own, and which, during all that period, were in the possession of and claimed by the present defendants, who are citizens of Virginia, were conveyed by it in fee simple to the Pennsylvania corporation so organized; and that the only object, for which the stockholders and officers of the Virginia corporation organized the Pennsylvania corporation, and for which the above conveyance was made, was to create a case cognizable by the circuit court of the United States for the Western district of Virginia. In order to accomplish that object, the present action was commenced on the 2d day of April, 1893. Although the parties have agreed that the above conveyance passed 'all of the right, title, and interest' of the Virginia corporation to the corporation organized under the laws of Pennsylvania, it is to be taken, upon the present record, and in view of what the agreed statement of facts contains, as well as of what it omits to disclose, that the conveyance was made without any valuable consideration; that, when it was made, the stockholders of the two corporations were identical; that the Virginia corporation still exists, with the same stockholders it had when the conveyance of March 1, 1893, was made; and that, as soon as this litigation is concluded, the Pennsylvania corporation, if it succeeds in obtaining judgment against the defendants, can be required by the stockholders of the Virginia corporation, being also its own stockholders, to reconvey the lands in controversy to the Virginia corporation without any consideration passing to the Pennsylvania corporation.
Was the circuit court bound to take cognizance of this action, as one that involved a controversy between citizens of different states, within the meaning of the constitution and the acts of congress regulating the jurisdiction of the courts of the United States? This question can be more satisfactorily answered after we shall have adverted to the principal cases cited in argument. The importance of the question before us, to say nothing of the ingenious and novel mode devised to obtain an adjudication of the present controversy by a court of the United States, justifies a reference to those cases.
The first case is that of Maxfield v. Levy, 2 Dall. 381, Fed. Cas. No. 9,321, decided in the circuit court of the United States for the Pennsylvania district. That was an action of ejectment. The lessor of the plaintiff was a resident and citizen of Maryland, the defendant being a resident and citizen of Pennsylvania. A bill of discovery was filed against the lessor of the plaintiff, in which it was alleged that the conveyance of the premises in controversy was made by one Morris, a citizen of Pennsylvania, for no other purpose than to give jurisdiction to the circuit court. The answer to that bill admitted that 'the lessor of the plaintiff had given no consideration for the conveyance; that his name had been used by way only of accommodation to Morris.' Upon a rule to show cause why the action of ejectment should not be stricken from the docket, Mr. Justice Iredell held that the conveyance was 'colorable and collusive; and, therefore, incapable of laying a foundation for the jurisdiction of the court.' The full opinion is reported in 4 Dall. 330, Fed. Cas. No. 9,321.
None of these cases sustain the contention of the plaintiffs. All of them concur in holding that the privilege of a grantee or purchaser of property, being a citizen of one of the states, to invoke the jurisdiction of a circuit court of the United States for the protection of his rights as against a citizen of another state,—the value of the matter in dispute being sufficient for the purpose,—cannot be affected or impaired merely because of the motive that induced his grantor to convey, or his vendor to sell and deliver, the property, provided such conveyance or such sale and delivery was a real transaction, by which the title passed without the grantor or vendor reserving or having any right or power to compel or require a reconveyance or return to him of the property in question. We adhere to that doctrine.
In harmony with the principles announced in former cases, we hold that the circuit court properly dismissed this action. The conveyance to the Pennsylvania corporation was without any valuable consideration. It was a conveyance by one corporation to another corporation,—the grantor representing certain stockholders, entitled collectively, or as one body, to do business under the name of the Virginia Coal & Iron Company, while the grantee represented the same stockholders, entitled collectively, or as one body, to do business under the name of the Lehigh Mining & Manufacturing Company. It is true that the technical legal title to the lands in controversy is, for the time, in the Pennsylvania corporation. It is also true that there was no formal agreement upon the part of that corporation 'as an artificial being, invisible, intangible, and existing only in contemplation of law,' that the title should ever be reconveyed to the Virginia corporation. But when the inquiry involves the jurisdiction of a federal court,—the presumption in every stage of a cause being that it is without the jurisdiction of a court of the United States, unless the contrary appears from the record (Grace v. Insurance Co., 109 U. S. 278, 283, 3 Sup. Ct. 207; B ors v. Preston, 111 U. S. 252, 255, 4 Sup. Ct. 407),—we cannot shut our eyes to the fact that there exists what should be deemed an equivalent to such an agreement, namely, the right and power of those who are stockholders of each corporation to compel the one holding the legal title to convey, without a valuable consideration, such title to the other corporation. In other words, although the Virginia corporation, as such, holds no stock in the Pennsylvania corporation, the latter corporation holds the legal title, subject at any time to be divested of it by the action of the stockholders of the grantor corporation who are also its stockholders. The stockholders of the Virginia corporation,—the original promoters of the present scheme, and, presumably, when a question of the jurisdiction of a court of the United States is involved, citizens of Virginia,—in order to procure a determination of the controversy between that corporation and the defendant citizens of Virginia, in respect of the lands in that commonwealth, which are here in dispute, assumed, as a body, the mask of a Pennsylvania corporation for the purpose, and the purpose only, of invoking the jurisdiction of the circuit court of the United States, retaining the power, in their discretion, and after all danger of defeating the jurisdiction of the federal court shall have passed, to throw off that mask and reappear under the original form of a Virginia corporation; their right, in the meantime, to participate in the management of the general affairs of the latter corporation not having been impaired by the conveyance to the Pennsylvania corporation. And all this may be done, if the position of the plaintiffs be correct, without any consideration passing between the two corporations.
It is not decisive of the present inquiry that, under the adjudications of this court, the stockholders of the Pennsylvania corporation—the question being one of jurisdiction-must be conclusively presumed to be citizens of that commonwealth. Nor is it material, if such be the fact, that the Pennsylvania corporation could not have been legally organized, under the laws of that commonwealth, in February, 1893, unless some of the subscribers to its charter were then citizens of Pennsylvania. We cannot ignore the peculiar circumstances which distinguish the present case from all others that have been before this court. The stockholders who organized the Pennsylvania corporation were, it is agreed, the same individuals who, at the time, were the stockholders of the Virginia corporation. And under the rule of decision adverted to, the stockholders of the Virginia corporation, just before they organized the Pennsylvania corporation, as well as when the Virginia corporation conveyed the legal title, were presumably citizens of Virginia. If the rule which has been invoked be regarded as controlling in the present case, the result, curiously enough, will be that immediately prior to February, 1893, before the Pennsylvania corporation was organized, the stockholders of the Virginia corporation were, presumably, citizens of Virginia; that, a few days thereafter, in February, 1893, when they organized the Pennsylvania corporation, the same stockholders became, presumably, citizens of Pennsylvania; and that, on the 1st day of March, 1893, at the time the Virginia corporation conveyed to the Pennsylvania corporation, the same persons were presumably citizens, at the same moment of time, of both Virginia and Pennsylvania.
It is clear that the record justifies the assumption that there was no valuable consideration for the conveyance to the Pennsylvania corporation. Why should a valuable consideration have passed at all, when the stockholders of the grantor corporation and the stockholders of the grantee corporation were, at the time of the conveyance, the same individuals? Could it be expected that those stockholders, acting as one body, under the name of the Virginia Coal & Iron Company, would take money out of one pocket for the purpose of putting it into another pocket, which they had and used only while acting under the name of the Lehigh Mining & Manufacturing Company? A valuable consideration cannot be presumed merely because the agreed statement of facts recites that the Virginia corporation executed and delivered a deed of 'bargain and sale' conveying all its right, title, and interest to the Pennsylvania corporation. In view of the admitted facts, that recital must be taken as meaning nothing more than that the deed was, in form, one of bargain and sale, conveying the technical legal title. The deed cannot be regarded even as a deed of gift, unless we suppose that a body of stockholders, acting under one corporate name, solemnly made a gift of property to them selves acting under another corporate name. When it is remembered that the plaintiff in error stipulates that all that was done had for its sole object to create a case cognizable in the federal court, which would otherwise have been cognizable only in a court of Virginia, it is not difficult to understand why the agreed statement of facts failed to state, in terms, that a valuable consideration was paid by the grantee corporation.
The arrangement by which, without any valuable consideration, the stockholders of the Virginia corporation organized a Pennsylvania corporation and conveyed these lands to the new corporation for the express purpose—and no other purpose is stated or suggested—of creating a case for the federal court, must be regarded as a mere device to give jurisdiction to a circuit court of the United States, and as being, in law, a fraud upon this court, as well as a wrong to the defendants. Such a device cannot receive our sanction. The court below properly declined to take cognizance of the case.
The organization of the Pennsylvania corporation and the conveyance of it by the Virginia corporation, for the sole purpose of creating a case cognizable by the circuit court of the United States, is, in principle, somewhat like a removal from one state to another with a view only of invoking the jurisdiction of the federal court. In Morris v. Gilmer, just cited, the court said: 'Upon the evidence in this record, we cannot resist the conviction that the plaintiff had no purpose to acquire a domicile or settled home in Tennessee, and that his sole object in removing to that state was to place himself in a situation to invoke the jurisdiction of the circuit court of the United States. He went to Tennessee without any present intention to remain there permanently or for an indefinite time, but with a present intention to return to Alabama as soon as he could do so without defeating the jurisdiction of the federal court to determine his new suit. He was, therefore, a mere sojourner in the former state when this suit was brought. He returned to Alabama almost immediately after giving his deposition. The case comes within the principle announced in Butler v. Farnsworth, 4 Wash. C. C. 101, 103, Fed. Cas. No. 2,240, where Mr. Justice Washington said: 'If the removal be for the purpose of committing a fraud upon the law, and to enable the party to avail himself of the jurisdiction of the federal courts, and that fact be made out by his acts, the court must pronounce that his removal was not with a bona fide intention of changing his domicile, however frequent and public his declarations to the contrary may have been." 129 U. S. 328, 329, 9 Sup. Ct. 289.
Other cases in this court show the object and scope of the above provision in the act of 1875. In Farmington v. Pillsbury, 114 U. S. 138, 139, 145, 5 Sup. Ct. 807,—which was a suit upon coupons of bonds issued in the name of Farmington, a municipal corporation of Maine, the bonds themselves being owned by citizens of that state,—it appeared that the bonds were purchased and held by such citizens while a suit was pending in one of the courts of Maine to test their validity. The state court decided that they were void and inoperative. After that decision coupons of the same amount, gathered up and held by citizens of Maine, were transferred, by their agent, to Pillsbury, a citizen of Massachusetts, under an arrangement by which he gave his promissory note for $500, payable in two years from date, with interest, and agreed, 'as a further consideration for said coupons,' that if he succeeded in collecting the full amount thereof he would pay the agent, as soon as the money was gotten from the corporation, 50 per cent. of the net amount collected above the $500. Pillsbury then brought his suit on these coupons, he being a citizen of Massachusetts, against the town of Farmington, in the circuit court of the United States for the district of Maine. Here was, in form, a sale and delivery of coupons for a valuable consideration. This court regarded the whole transaction as a sham, and, speaking by Chief Justice Waite, said: 'It is a suit for the benefit of the owners of the bonds. They are to receive from the plaintiff one-half of the net proceeds of the case they have created by their transfer of the coupons gathered together for that purpose. The suit is their own in reality, though they have agreed that the plaintiff may retain one-half of what he collects for the use of his name and his trouble in collecting. It is true the transaction is called a purchase in the papers that were executed, and that the plaintiff gave his note for $500, but the time for payment was put off for two years, when it was, no doubt, supposed the result of the suit would be known. No money was paid, and, as the note was not negotiable, it is clear the parties intended to keep the control of the whole matter in their own hands, so that if the plaintiff failed to recover the money he could be released from his promise to pay.' The court, adopting the language of Mr. Justice Field, in City of Detroit v. Dean, 106 U. S. 537, 541, 1 Sup. Ct. 560, adjudged the transfer of the coupons to be 'a mere contrivance, a pretense, the result of a collusive arrangement to create,' in favor of the plaintiff, 'a fictitious ground of federal jurisdiction.' Referring to the above provision in the act of 1875, the court, after declaring it to be a salutary one, said that 'it was intended to promote the ends of justice, and is equivalent to an express enactment by congress that the circuit courts shall not have jurisdiction of suits which do not really and substantially involve a dispute or controversy of which they have cognizance, nor of suits in which the parties have been improperly or collusively made or joined for the purpose of creating a case cognizable under the act.' 114 U. S. 144, 5 Sup. Ct. 807.
The case before us is one that congress intended to exclude from the cognizance of a court of the United States. The Pennsylvania corporation neither paid nor assumed to pay anything for the property in dispute, and was invested with the technical legal title for the purpose only of bringing a suit in the federal court. As we have said, that corporation may be required, by those who are stockholders of its grantor, and who are also its own stockholders, at any time, and without receiving therefor any consideration whatever, to place the title where it was when the plan was formed to wrest the judicial determination of the present controversy from the courts of the state in which the land lies. It should be regarded as a case of an improper and collusive making of parties for the purpose of creating a case cognizable in the circuit court. If this action were not declared collusive, within the meaning of the act of 1875, then the provision making it the duty of the circuit court to dismiss a suit, ascertained at any time to be one in which parties have been improperly or collusively made or joined, for the purpose of creating a case cognizable by that court, would become of no practical value, and the dockets of the circuit courts of the United States will be crowded with suits of which neither the framers of the constitution nor congress ever intended they should take cognizance.
In April, 1893, the Lehigh Mining & Manufacturing Company, asserting itself to be a corporation organized and existing under the laws of the state of Pennsylvania, and a citizen and resident of said state, brought, in the circuit court of the United States for the Western district of Virginia, an action of ejectment for a tract of land in Wise county, state of Virginia, and within the jurisdiction of that court, against J. J. Kelly, James C. Hubbard, and others, all of whom were averred to be citizens of the state of Virginia, and residents of the Western district thereof.
The defendants filed two special pleas which were traversed by replications. The record shows that, subsequently, the cause was submitted to the court on the issues thus made, and with an agreed statement of facts, and that the court, on May 30, 1893, sustained the pleas, found that it had no jurisdiction of the case, and dismissed the action for want of jurisdiction, but without prejudice. Upon exceptions duly taken, this judgment was brought to this court.
It is admitted, in the agreed statement of facts, that the Lehigh Mining & Manufacturing Company was, in February, 1893, duly organized as a corporation of the state of Pennsylvania, and was existing as such at the time of the commencement of this action.
The constitution of Pennsylvania, of which we take judicial notice, provides, in the seventh section of article 3, that such a corporation cannot be created by any local or special law, and we are thus given to know that the company in question was organized under a general law of the state. On resorting to that law, being the act of April 29, 1874 (1 Purd. Dig. p. 335), and of the contents of which we also take judicial notice, we find it provided that, to become duly organized as a mining and manufacturing company, the charter must be subscribed by five or more persons, three of whom, at least, must be citizens of Pennsylvania; that the certificate must set forth that 10 per centum of the capital stock has been paid in cash to the treasurer of the intended corporation; and these facts, as to citizenship and the payment of the requisite proportion of the capital in cash, must be sworn to by at least three of the subscribers. Upon such proof the governor is authorized to direct letters patent to be issued, but no corporation shall go into operation without first having the name of the company, the date of the incorporation, the place of business, the amount of capital paid in, and the names of the president and treasurer registered in the office of the auditor general of the state. While, therefore, it is stated in the agreed statement of facts that the said company was organized by the individual stockholders and the officers of the Virginia Coal & Iron Company, such statement is by no inconsistent with the other statement that the Lehigh Mining & Manufacturing Company was duly organized, and therefore included in its membership citizens of Pennsylvania.
The presumption, therefore, must be that the Lehigh Mining & Manufacturing Company was, in all respects, a corporation regularly and legally organized, and the concession of the agreed statement is that, as matter of fact, at least three of its corporators are citizens of the state of Pennsylvania. As matter of law, as we shall presently see, all of its corporators are to be indisputably deemed, for the purpose of jurisdiction in the circuit court of the United States, citizens of that state.
The record, therefore, discloses that a regularly organized body corporate of the state of Pennsylvania, seeking to assert its title to a tract of land situated in Wise county, Va., as against certain citizens of Virginia in possession of said tract, and having brought an action at law in the circuit court of the United States, has been dismissed from that court for alleged want of jurisdiction.
If these cases correctly state the law, was it competent for the court below, upon the facts agreed upon, to disregard the corporate character of the plaintiff company, and to find that it was composed, in a jurisdictional sense, of citizens of Virginia? It is true that the defendants, in their second plea, alleged that 'there was no such legally organized corporation as the plaintiff company at the date of the institution of this suit.' But, as we have seen, the statement of facts, agreed upon after the pleas were filed, states that the plaintiff company was a duly-organized corporation of the state of Pennsylvania, and was existing as such at the time of the bringing of the suit.
It is said that because it is conceded, in the agreed statement of facts, that the land in controversy had been claimed by the Virginia Coal & Iron Company, a corporation organized under the laws of the state of Virginia, and that said company had executed and delivered a deed a bargain and sale to the Lehigh Mining & Manufacturing Company, by which it conveyed all its right, title, and interest in and to the land in controversy to the Lehigh Mining & Manufacturing Company in fee simple, and because it is admitted that the Pennsylvania company was organized by the individual stockholders and officers of the Virginia company, and that the purpose in organizing said Lehigh Mining & Manufacturing Company, and in making to it said conveyance, was to give the circuit court jurisdiction in the case, the legal effect of such a state of facts would constitute a fraud upon the court, and would justify it in dismissing the suit.
It is difficult to see, in the first place, how this could be a case of fraud. The facts were conceded; not concealed, not falsely stated. It would be one thing to say that an acknowledged state of facts failed to confer jurisdiction; another thing to say that such acknowledged state of facts, though formally conferring jurisdiction, constituted fraud on the court, not because untrue and pretended, and intended to deprive a court of jurisdiction, but because intended to bring a legal cause of action within its jurisdiction. We have seen that, ex necessitate, and as matter of fact, there were citizens of Pennsylvania who had, as members of a corporation of that state, an interest in the subject-matter of the suit; and we have seen that, by a well-settled proposition of law, the Pennsylvania company must, for jurisdictional purposes, be indisputably deemed to be wholly composed of citizens of the state that created it. How, then, in the absence of misstatement or suppression of facts, can it be said that the Pennsylvania company was guilty of any fraud in invoking the jurisdiction of the federal court?
I submit that the true question, under the pleading and statement of facts, was whether the transaction, whereby title to the land in dispute was granted and conveyed by the Virginia company to the Pennsylvania company, was an actual one,—was really what it purported to be. If the conveyance by the Virginia company really and intentionally conferred its title on the Pennsylvania company, so that the latter company could legally assert its title against the parties in possession in a state court, no reason existed why the same cause of action might not be asserted in a federal court. That, if the transaction were an actual one, and the conveyance one intended to vest an absolute title, unqualified by any trust, the jurisdiction of the circuit court validly attached, has been frequently declared, even if the purpose was to make a case cognizable by the federal court.
It therefore follows, in the present case, that the concession in the agreed statement of facts, that the purpose was to give jurisdiction to the circuit court, will not defeat that jurisdiction unless it appears that the conveyance was not real but fictitious. This presents a question of fact. Stated in directterms, the question is this: given a Pennsylvania corporation, indisputably composed of citizens of that state, and a conveyance in fee simple to such company of a tract of land, situated in the state of Virginia, by a corporation of that state, the land being in possession of citizens of the latter state, was this apparent jurisdiction defeated by the admitted facts? It has been established, by the cases cited, that the mere purpose or intention to put the claim into an owner who would be entitled to go into a federal court would not be objectionable if the conveyance were an actual one, and where the interest asserted belonged wholly to the plaintiff.
This contention—and the fate of the case turns upon it—can be readily met. It assumes two facts, neither of which is found in the record, and both of which, if found, would be immaterial. First, it is said that the conveyance was without any valuable consideration. But it is distinctly admitted that the Virginia company 'executed and delivered a deed of bargain and sale to the Lehigh Mining & Manufacturing Company, by which it conveyed all its right, title, and interest in the land in controversy in fee simple.' It is not found that no consideration was given, and in the absence of such a finding the presumption would be that a deed of conveyance under seal, and granting an estate in fee simple, implies a consideration. But it is unnecessary to consider this, because it is wholly immaterial whether the grantee paid a consideration or not. The deed, even if it were a deed of gift, was executed and delivered, and an executed gift is irrevocable. Nor does it concern the defendants whether the grant by deed was or was not for a valuable consideration.
It is admitted, in the opinion of the majority, that 'the legal title to the lands in controversy is in the Pennsylvania corporation, and that there was no formal agreement or understanding upon its part that the title shall ever be reconveyed to the Virginia corporation.' But it is said that 'there exists what should be deemed an equivalent to such an agreement, namely, the right and power of those who are stockholders of each corporation to compel the one holding the legal title to convey, without a valuable consideration, that title to the other corporation.' This seems to me to be a strained conjecture. Stock in a corporation is continually changing hands, and to suppose that, at the end of a pending litigation, the holders will be the identical persons who held it at the beginning is too uncertain and fanciful to form a basis for a judicial action. As was well said by Mr. Justice Grier, in Marshall v. Railroad Co., 16 How. 327: '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 factitious or collective name. * * * It is not reasonable that representatives of unknown and ever-changing associates should be permitted to allege the different citizenship of one or more of these stockholders,' in order to defeat the jurisdiction of federal courts.
Some expressions used in the opinion of the court below, and likewise in the majority opinion, seem to imply that the act of March 3, 1875 (18 Stat. 470), has operated to change the law in respect to the jurisdiction of the circuit courts of the United States. I do not so understand the purpose of that enactment. I have supposed that it only operates as a rule of practice. As the law previously stood, if the face of the record disclosed a suit between citizens of different states, and thus within the jurisdiction of the circuit court, it was necessary to traverse the averment of citizenship by a plea in abatement, and if the defendant went to trial on a plea to the merits he could not afterwards question the truth of such averment. Smith v. Kernochen, 7 How. 198; Barney v. Baltimore, 6 Wall. 280.
But since the passage of the act of March 3, 1875, 'it is competent for the court at any time, during the trial of the case, without plea and without motion, to stop all further proceedings and dismiss the suit the moment a fraud on its jurisdiction is discovered.' Hartog v. Memory, 116 U. S. 588, 6 Sup. Ct. 521.
As, then, the plaintiff company is conceded to be a duly organized and existing body corporate of the state of Pennsylvania; as the land in dispute is within the jurisdiction of the court, and the defendants in possession thereof are citizens of the state of Virginia; and as it is conceded that, by a deed of conveyance in fee simple, the Virginia company passed all its right, title, and interest in said land, and has since had 'no interest in said land, or in the suit,'—I think the jurisdiction of the circuit court ought not to be defeated by the conjecture that the presons owning the stock of the corporation when the deed of conveyance was made might continue to own it years afterwards when the suit should terminate, and might choose, as such owners, to cause another transfer and conveyance of the land to be made. Such conjectures are very far from furnishing for judicial action that 'legal certainty' which, in Barry v. Edmunds, is said to be the proper basis upon which to deprive parties of their right of access to the national tribunals.
If we are permitted to enter into the realm of supposition, it is easy to suggest that the present stockholders, so far as they are citizens of Virginia, might dispose of their stock in good faith and absolutely to citizens of Pennsylvania. Then, upon another action brought in the same court, the same pleas being interposed, it would be competent, according to the views which prevail in the present case, to meet the pleas by a replication averring that the individual stockholders are citizens of Pennsylvania, and thus the jurisdiction would be sustained. What, in such a case, would have become of the long-settled rule that the status, as to citizenship, of the individual stockholders is not a matter of allegation and proof? Has the court retraced its steps, and can state corporations be turned out of the federal courts on a plea that one or more of the stockholders is a citizen of the same state in which the litigation is pending?

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