Case Name: Ayres vs. The Western Railroad Corporation
Court: New York Supreme Court
Jurisdiction: New York
Decision Date: 1866-11-05
Citations: 48 Barb. 132
Docket Number: 
Parties: Ayres vs. The Western Railroad Corporation.
Judges: 
Reporter: Barbour's Supreme Court Reports
Volume: 48
Pages: 132–142

Head Matter:
Ayres vs. The Western Railroad Corporation.
An action commenced in the Supreme Court, by one foreign corporation against another, cannot be removed for trial, into the Circuit Court of the United States, under the Act of Congress of 1789.
But where the assignee of a foreign corporation, suing another foreign corporation, is a citizen of this state, the action may be removed, provided the claim is of such a nature [that the United States court can take cognizance of it.
Tim 17th section of the Act of Congress, which provides that the Circuit Courts of the United States shall not “ have cognizance of any suit to recover the contents of any promissory note or other chose in action in favor of an assignee, Unless a suit might have been prosecuted in such court, to recover the said contents, if no assignment had been made,” applies to a claim against a railroad company, as a common carrier, to recover the value of goods entrusted to it for transportation; such a claim being a chose in action. Geo. G. Baenaep, J. dissented.
Where a defendant applies for, and obtains, an order from the court giving him time to answer, and serves that order, with a notice signed by an attorney, as “ attorney for the defendant,” this is doing an act in the progress of the cause, and submitting to the jurisdiction of the court; which is equivalent to an appearance.
The decision in Stevens v. The Phamix Ins. Co. (24 Sow. Pr. 617,) questioned. Per Baknabd,' J.
THIS is an appeal by the plaintiff from an order made by Mr. Justice Barnard, removing this cause for trial to the circuit court of the United States for the southern district of Hew York. The action was brought by the plaintiff, a citizen of New York, in the supreme court, as the assignee of the Southworth Manufacturing Company, a Massachusetts corporation, to recover the value of certain property, delivered in 1861, hy the Southworth company, at Springfield, in Massachusetts, to the defendant, for transportation as a common carrier, to consignees in a western state. The goods thus delivered were, in fact, destroyed by fire by the burning of the defendants’, depot at East Albany, in July, 1861, and were of the value of more than $500. The defendant is a railroad corporation created under the laws of Massachusetts, ■and is a common carrier, and the action is the usual one against a common carrier for the loss of goods. The defendant, claiming to be a citizen of Massachusetts, made application under the act of congress for the removal of the cause for trial to the circuit court of the United States, and the order was' granted. Among other things it was shown that the defendant was the lessee under a perpetual lease, and operated the Albany and West Stockbridge Railroad Company, a New York corporation, having a railroad between Albany and the Massachusetts line, and for this reason, it was claimed that the defendant had lost the right of removing the cause into the federal court.
After service of the summons and complaint, the defendant, upon an affidavit made by C. W. Reynolds, in which he swore that he had been- retained as the attorney of the defendant, in this cause, applied to a justice of this court, at chambers, for, and obtained an. order, dated June 25, 1866, extending the time for putting in an answer, twenty days. A copy of this order was served upon the plaintiff’s attorneys, with a notice thereof, signed “ C. W. Reynolds, Deft’s Att’y.”
Bliss efe Gadwalader, for the appellant.
John H. Reynolds, for the respondent.
I. The authority for the removal of this case for trial to the circuit court of the United States, is given by the act of congress of 1789. (1 St at. at Large, 79, § 19. Brightly’s Dig. 128. Conk-ling’s Treatise, 3d ed. pp. 123, 126, 173, 179,475, 476, dec.)
II. The defendant, being a corporation created by and under the laws of Massachusetts, is a citizen of that state, and entitled to the same rights in respect to the right to the removal of a cause as a natural person. (The Louisville, &c. R. R. Co. v. Latsen, 2 How. (U. S.) R. 497, 554, 555, 558. Rundle v. Del. and Raritan Canal Co., 4 id. 80. Salmon Falls Man. Co. v. Goddard, 14 id. 446. Philadelphia, &c. R. R. Co. v. Derby, Id. 468. Marshall v. The Baltimore and Ohio R. R., 16 id. 314. Dennistoun v. N. Y. and N. H. R. R. Co., 1 Hilton, 62. Conroe v. National Ins. Co., 10 How. Pr. R. 403, per Bockes, J. People v. Utica Ins. Co., 15 John. 359. Mott v. Hicks, 1 Cowen, 573. State of Indiana v. Woram, 5 Hill, 33, 38. Ontario Bank v. Bunnell, 10 Wend. 186. Sherwood v. Sar. and W. R. R., 15 Barb. 650. Angelí dc Ames on Gorporations, § 467. Whedan v. Camden and Amboy R. R. Co., Philadelphia Legal Intelligencer.) 1. The fact that the defendant transacts business in this state is of no importance. The right of removal depends upon citizenship, and a party cannot at the same time be a citizen of two states. 2. The case of Stevens v. The Phœnix Ins. Co. (24 How. Pr. R. 517,) does not apply to this, even if it was a sound decision. The application in that case was refused to a foreign insurance company, upon the ground that by appointing an agent under our statutes upon whom process might be served, it had waived the benefit of the act of congress. The correctness of this we deny. 3. But it will be seen that the general scope of the opinion favors a right of removal in a case like the present, save the intimation that a foreign corporation by sending its agents here and transacting business in this state may lose its citizenship in the state where created and to that extent acquire a residence here. This remark was wholly obiter, and was obviously made without due consideration and is against the reason of the thing and the adjudged cases. A corporation is by the law of its being doomed to reside within the jurisdiction creating it, and incapable of migrating.
III. It is said also that the plaintiff is an assignee, and for that reason there can be no removal. This objection rests upon the words of the 11th section of the act of 1789, (Statutes at Large, 78 ; Brightly’s Digest, 12,) which is as follows : “Nor shall any district or circuit court have cognizance of any suit to recover the contents of any promissory note or other chose in action, in favor of an assignee, unless a suit might have been prosecuted in such court, to recover the said contents if no assignment had been made/' The answer to this objection is that this is not a suit to recover the contents of a promissory note or other chose in action, but to recover damages for the wrongful detention of property, and the statute does not apply. (Deshler v. Dodge, 16 How. 622. Clark v. The City of Zanesville, 4 Am. Law Reg. 501.)

Opinion:
Ingraham, J.
The defendants are incorporated under the laws of Massachusetts. The plaintiff is a citizen of New York, and was assignee of a company incorporated under a law of Massachusetts. The defendants moved for an order to remove the cause into the United States Court. The motion was, granted, and the plaintiff appealed.
It is clear that between the original parties, as both were corporations created by the laws of Massachusetts, this action could not have been removed. But inasmuch as the plaintiff, who is assignee of the claim, is a citizen of New York, the case is within the statute, unless the United States Court is prevented from taking cognizance of the action under the 17th section of the United States statute, which says the court shall not have cognizance of any suit to recover the contents of a promissory note, or o.ther chose in action, in .favor of an assignee, unless a suit might have been prosecuted if no assignment had been made. The question, then, arises, is this action brought to recover upon a chose in action ? A chose in action, or a thing in action, is a term used in contradistinction to a chose, or thing, in possession, and is applicable to cases where the title to the money or property is in one person and the possession is in another, which, by contract, he is bound to deliver to the owner.
In Campbell v. Perkins, (8 N. Y. Rep. 430,) it was held, that a claim against common carriers, although in form for a wrong, was founded on contract. It was founded on an engagement, and is technically a claim. If so, then the claim is a chose in action transferred to the assignee, and bringing the case within the exception of the statute. It is similar in its nature to that of Anderson v. The Manufacturers' Bank, (14 Abb. Pr. R. 436.) That action was against the defendant for not protesting a note. The ground was negligence. So, here, the action is for not delivering goods according to agreement.
I think, also, there is good ground for holding that the defendant, by obtaining time to answer, by an order from the court, and serving that, with a notice signed by an attorney, as attorney for. the defendant, did what was equivalent to an appearance. It was doing an act in the progress of the cause, and submitting to the jurisdiction of the state court, and was equivalent to an appearance. (Cooley v. Lawrence, 5 Duer, 610.)
The order should be reversed.
Clerks, J. concurred.