Case Name: WILSON v. SOUTHERN RY. CO.
Court: Supreme Court of South Carolina
Jurisdiction: South Carolina
Decision Date: 1900-08-02
Citations: 64 S.C. 162
Docket Number: 
Parties: WILSON v. SOUTHERN RY. CO.
Judges: Mr. Justice Pope dissents, and reserves the privilege of hereafter filing a dissenting opinion.
Reporter: South Carolina Reports
Volume: 64
Pages: 162–177

Head Matter:
WILSON v. SOUTHERN RY. CO.
1. Appeal will not be dismissed for failure to serve “Case” and exceptions in time, where delay has been occasioned by unavoidable failure of stenographer to furnish transcript of evidence and charge.
2. Removal oe Causes — Non-resident—Diverse Citizenship. — A railroad corporation created by a foreign State, but doing business in this State as a domestic corporation, under the provisions of 22 Stat., 114, is a non-resident of this State, and may remove into the U. S. Circuit Court under U. S. Statute, on the ground of diverse citizenship, a suit brought against it in a State Court by a citizen of this State. Mathis v. Southern Ry.,. 53 S. C., 257, overruled.
3. Appeal — Removal oe Causes. — Upon refusal by State Court of motion to remove cause to U. S. Circuit Court and notice of appeal therefrom, the State Court may, under Code, 356, proceed to try the case, the return not having been filed in Supreme Court. Not considered by whole Court en banc.
4. Railroads — Ordinances—Negligence—Charge.—Where there is no controversy as to the validity of a town ordinance as to speed of trains of its terms, or violation, there is no error in instructing the jury that its violation is negligence per se. Not considered by whole Cotirt en banc.
Before Buci-ianan, J., Fairfield, September, 1899.
Reversed.
Action by John Wilson, administrator of Noah Y. Wilson, for negligent killing, against Southern Ry. Co.
A motion was made in this case to dismiss appeal because appellant had not served tifie “Case” and exceptions in the time prescribed by the rules of Court. Notice of intention to appeal was served on 9th October, 1899, and case containing exceptions not until December 5, 1899. At bear-1 ing, it appeared that trial Judge on ex parte application of appellant had extended time for such service at one time for twenty days and at another for ten days, on ground that Court duties of stenographer prevented his furnishing the evidence and charge. The motion was refused in-open Court.
From judgment on Circuit, defendant appeals.
Mr. B. L. Abney, for appellant,
cites: As to removal of causes: 161 U. S., 545; 48 S. C., 49; U. S. Con., art. III., sec. 2; art. VI., subd. 2; art. I., sec. 8; U. S. Stat., March 3, 1887; 5 Cranch, 68; 2 How., 497; 16 How., 314; 174 U. S., 552; 167 U. S., 663; 86 Fed. R., 353; 170 U. S., 106; 172 U. 5., 259; 89 Fed. R., 119; 96 Fed. R., 504. Oral argument before Court en banc.
Messrs. G. T. Graham and Ragsdale & Ragsdale, contra,
cite before both Courts: On same point: 53 S. C., 246; 174 U. S., 552; 94 U. S., 4445 136 U. S., 356; 31 U. S. App., 325; 13 C. C. A., 668; 66 Fed. R., 665; 32 U. S. App., 691; 29 Fed. R., 609; 39 Fed. R., 227; 44 Fed. R., 573; 45 Fed. R., 812; 10 Bliss, 122; 5 Fed. R., 19; 25 Bliss, 144; 136 U. 5., 356; 161 U. S., 545-
August 2, 1900.

Opinion:
The opinion of the Supreme Court was delivered by
Mr. Justice Jones.
This action was brought in the Court of Common Pleas for Fairfield County for damages for the alleged negligent killing of plaintiff's intestate by the defendant corporation, and resulted in a judgment in favor of the plaintiff for $4,500. A petition and bond for the removal of the cause to the Circuit Court of the United States for the District of South Carolina on the ground of diverse citizenship was duly filed, and op the call of the case for trial, the Court, Hon. O. W. Buchanan, presiding, was asked to proceed no further except to- pass an order for removal. This was refused and notice of appeal and exceptions was immediately served. After judgment on the verdict of the jury, exceptions were taken to the order refusing to remove, to ruling compelling' defendant to proceed to trial, and to the judgment and rulings of the Court.
The first question presented is whether there was error in refusing to remove the cause to the United States Court. The plaintiff was a citizen of South Carolina, and alleges in the complaint that the defendant was a corporation under the laws of this State. The petition for removal alleged that the defendant, at the commencement of the suit and at the filing' of the petition, was a citizen and resident of the State of Virginia, being a corporation created under the laws of that State. It is not disputed that the defendant was originally created a corporation under the laws of Virginia, and thereafter complied with the act of the General Assembly of this State, approved March 19, 1896, 22 Stat., 114, entitled "An act to provide the manner in which railroad companies incorporated under the laws of other States or countries may become incorporated in this State." This act was construed, in connection with sec. 8, art. IX., of the Constitution, in the case of Southern Railway Co. v. Tompkins, 48 S. C., 58, wherein the Court, speaking by Judge Witherspoon, A. A. J., said: "A State by its legislature may impose upon foreign corporations, which seek to come within its limits to conduct their business, -the condition that they shall be subjected to the duties and obligations of domestic corporations. In short, that they shall be, when so acting within the territorial limits of the State, domestic corporations for the purpose of jurisdiction. The question whether the legislature of a State has adopted and domesticated a corporation created by another State, is in any case purely a question of legislative intent. 6 Thompson on Corp., sec. 7890; Murfree on Foreign Corp., sec. 455. It was competent for the legislature of this State to provide by the act under consideration for the adoption of foreign- corporations as domestic corporations, without violating the section of the Constitution above quoted (sec. 8, art. IX.). The title of the act under consideration, and the third section thereof, clearly shows that such was the intention of the legislature. Under the third section of said act, a foreign corporation complying with the provisions of said act, ipso facto becomes a domestic corporation, enjoyingthe rights and subject to the liabilities of domestic corporations 'as fully as if it were originally created under the laws of this State.' " In that case it was also held that the Southern Railway Company had complied with said statute. Thereafter, in the case of Mathis v. Southern Railway Company, 53 S. C., 257, this Court held that said Southern Railway Company having become a domestic corporation by compliance with said act, was not entitled to< the benefit of the provisions of the act of Congress of the United States governing the removal of causes from the State Courts to- the United States Circuit Court, because of diverse citizenship. We have been induced to review the case of Mathis v. Southern Railway, supra, and after careful consideration have reached the conclusion that it is not in harmony with the recent decisions of the United States Supreme Court, by which this Court must be controlled on questions of this kind. The Mathis case was supposed to be in harmony with the decisions in Memphis R. Co. v. Alabama, 1 and 2 Supt. Ct. Rep., 432, wherein it seemed to hold that the Memphis and Charleston Railroad Company, previously incorporated in Tennessee and aftewards made an Alabama corporation by the statutes of Alabama, could not remove into' the Circuit Court of the United States a suit brought against it in Alabama by a citizen of Alabama. But this Court failed to observe the distinction between the creation of a new corporation out of natural persons, and the mere adoption of a foreign corporation as a domestic corporation for local purposes. A corporation is indisputably presumed to' be composed of citizens of the State creating it, and, for purposes of federal jurisdiction, the citizenship of its corporators is imputed to the corporation. In the case of St. Louis & S. F. Ry. Co. v. James, 16 Sup. Ct. Rep., 627, the Supreme Court of the United States refused "to extend the doctrine of indisputable citizenship, so that if a corporation of one State, indisputably taken, for the purpose of federal jurisdiction,to be composed of citizens of such State, is authorized by the law of another State to do business therein, and to be endowed for local purposes with all the powers and privileges of a domestic corporation, such adopted corporation shall be deemed to be composed of citizens of the second State, in such sense as to confer jurisdiction on the Federal Court, at the suit of a citizen of the State of its original creation." As the right of removal depends upon diverse citizenship, we take it that the United States Court, upon the principle announced above, would not extend the doctrine of indisputable citizenship to a corporation originally created in one State and afterwards adopted as a domestic corporation in another State, so as to make such adopted corporation a "citizen" also of the second State. This, we think, is made clear by the following language of the Court in the James case, referring to an act by the legislature of Arkansas similar to the South Carolina act, under which defendant became a domestic corporation: "It is true, that by the subsequent act of 1889, by the proviso to< the second section, it was provided that every railroad corporation of any other State, which had-theretofore leased or purchased any railroad in Arkansas, should w-i'thin sixty days from the passage of the act file a certified copy of its articles of incorporation or charter with the secretary of State, and shall thereupon become a corporation of Arkansas, anything in its articles of incorporation or charter to the contrary notwithstanding; and it appears that the defendant company did accordingly file a copy of its articles of incorporation with the secretary of State; but whatever may be the effect if such legislation in the way of subjecting foreign railroad companies to control and regu lation by the local laws of Arkansas, we cannot concede that it availed to create an Arkanses corporation out of a foreign corporation in such a sense as to make it a citizen of Arkansas, within the meaning of the Federal Constitution, so as to subject it as such to a suit by a citizen of the State of its origin. In order to bring such an artificial body as a corporation within the spirit and letter of that Constitution, as construed by the decisions of this Court, it would be necessary to create it out of natural persons, whose citizenship of the State creating it could be imputed to the corporation itself. But it is not pretended in the present case that natural persons, resident in and citizens of Arkansas, were, by the legislature in question, created a corporation, and that, therefore, the citizenship of the individual corporators is imputable to the corporation." By reference to the South Carolina Statute referred to, it will be seen that it did not undertake to create a new corporation out of natural persons, but merely provided a mode by which foreign corporations might become domestic corporations. Sec. 3 provides: "That when a foreign corporation complies with the provisions and requirements of this act (by filing in the office of the secretary of State a copy of its charter, paying therefor such fees as may be required by law, and causing a copy of such charter to be recorded in the office off the register of mesne conveyances or clerk of the Court of Common Pleas in each county in which such company or corporation desires or proposes to carry on -its business or acquire or own property), it (the foreign corporation) shall, ipso facto, become a domestic corporation, and shall enjoy the 'rights and be subject to the liabilities of such domestic corporation; it may sue and be sued in the Courts of this State, and shall be subject to the jurisdiction of this State as fully as if it were originally created under the laws of the State of South Carolina." Inasmuch as this legislation and the proceedings thereunder created no new corporation out of natural persons, but merely domesticated or adopted an existing corporation', there can be no "citizenship" of corporators imputed to the corporation as adopted, except the indisputable citizenship of the original corporation. So in the case of Louisville & C. Ry. Co. v. Trust Co., 19 Sup. Ct. Rep., 817, the Court, citing James' case, supra, held that for purposes of federal jurisdiction, a corporation remains a citizen of the State originally creating it, notwithstanding it be afterwards also made a corporation of another State.
In the argument of the case of William McCabe v. Southern Railway Company, which was heard during the present term, and involved also the question of removal, counsel for appellant, Messrs. Andrew Crawford and J. S. Muller, raised a point not directly raised in this case at bar, but which we deem proper to be considered now, viz: whether the defendant can be considered a "non-resident" of this State, in the sense of the federal statute of 1887-8, governing removal of causes. In the first place, the petition for removal alleges that the defendant is a non-resident of this State. This allegation of fact was not traversed, and, as we understand, is not properly traversible except in the Circuit Court of the United States after removal; therefore, for the purposes of the present contention, it appears as a fact that the defendant is a non-resident of this State. In the second place, while "citizenship" and "residence" are not alwa}rs synonymous, we are of opinion that a foreign corporation, though domesticated in this State, being a citizen of the State originally creating it, must be deemed to- have its domicile or residence in the State of its creation, and so is a non-resident of this State, in the sense of the statute governing removals, whatever may be the view as relating to mere local matters not affecting federal jurisdiction. As stated in Ex parte Shaw, 12 Sup. Ct. Rep., 937: "The-legal existence, the home, the domicile, the habitat, the residence, the citizeship of a corporation, can only be in the State by which it was created, although it may do business in other States whose laws permit it."
We must, therefore, hold that the defendant was entitled to remove the cause to- the Circuit Court of the United States, being a citizen and resident of Virginia, and that it was error to proceed with the trial in the State Court.
May 6, 1902.
This conclusion renders it unnecessary to- consider any other question presented.
The judgment of the Circuit Court is reversed.
Mr. Justice Pope dissents, and reserves the privilege of hereafter filing a dissenting opinion.
Remittitur stayed on petition for rehearing and submission to Court en banc. The petition was granted and case ordered submitted to Court en banc, August, 1901.
The opinion of the Court en banc was delivered by
Mr. Justice Jones.
For reasons stated in am opinion prepared by me in the case of W. A. Calvert v. Southern R. R. Co., which was heard with this case, and stated also in an opinion in this case and reported herewith on its original hearing, I think the Circuit Court committed reversible error in refusing to remove the cause to the Federal Court, and in proceeding with the trial.
Under this view, the other questions presented by the exceptions do- not properly arise and need not be considered.
Judgment reversed.
Mr. Chiee Justice McIver and Circuit Judge Aldrich concur.
Mr. Justice Pope and Circuit Judge Townsend dissent.