Case Name: Anton Kranshaar et al. plaintiffs and respondents, vs. The New Haven Steamboat Company, defendants and appellants
Court: New York Superior Court
Jurisdiction: New York
Decision Date: 1868-04
Citations: 7 Rob. 356
Docket Number: 
Parties: Anton Kranshaar et al. plaintiffs and respondents, vs. The New Haven Steamboat Company, defendants and appellants.
Judges: 
Reporter: Reports of cases argued and determined in the Superior Court of the city of New York
Volume: 30
Pages: 356–386

Head Matter:
Anton Kranshaar et al. plaintiffs and respondents, vs. The New Haven Steamboat Company, defendants and appellants.
1. Corporations, for the purposes of jurisdiction, must be regarded as citizens of the state which created them.
2. A natural person cannot claim citizenship in two places; neither can a corporation be made ubiquitous. In this sense domicil and citizenship are equivalent; and a person can have but one domicil.
3. The transaction of a part of its business in another state, even where it is authorized by the laws of such other state, will not deprive a corporation of its citizenship in the state which created it.
4. The defendants were a corporation created by the laws of the state of Connecticut, having its principal office for the transaction of its business at New Haven, in that state, where the meetings of its stockholders, and the sessions of its directors were held, and its records were kept, and where the governing power of the corporation acted and issued its orders. The corporation was created for the purpose of carrying freight and passengers, by steamboats, for hire, between the cities of New York and New Haven, and was the proprietor of a line of steamboats plying between those cities. Held that an action brought against the corporation, in a court of this state, by a citizen thereof, was a proper case for removal into the Circuit Court of the United States, under the judiciary act of the United States; notwithstanding it appeared that the corporation had its agencies, docks, warehouses, &c. necessary to the carrying on of its said business, established at Peck slip in the city of New York.
(Before Robertson, Ch. J., and Monell and Garvin, JJ.)
Heard June —, 1867;
decided April —, 1868.
Appeal from an order made at special term.
The order in this case denied a motion to remove the cause from this court into the Circuit Court of the United States.' The petition upon which the motion was founded stated that the defendants were a corporation created "by the- laws of the state of Connecticut, and had its principal office, for the transaction of its business, at Hew Haven, in that state; that the meetings of its stockholders, and the sessions of its directors, were held at Hew Haven, in which city the records of the company were kept, and where the governing power of the corporation acted and issúed its orders.
In opposition to the motion, the plaintiffs showed that the defendants’ corporation was created for the purpose of carrying freight and passengers, by steamboat, for hire, between the cities of Hew York and Hew Haven, and that it was the proprieter of a line of steamboats which carried freight and passengers between those cities; and that the defendants have their agencies, docks, warehouses, and every thing necessary to the carrying on of said business, established at Peck slip in the city of Yew York.
S. P. Nash, for the appellants..
I. Yo question was raised in the court below, as to the regularity of the proceedings, nor but that the defendants are a corporation duly created under and by virtue of the laws of the state of Connecticut, and have their principal place of business in Yew Haven, in said state, but the motion was denied upon the grounds, (1.)' That it was a necessary qualification of the citizenship of a corporation in the state from which it derives its charter, that its business must be transacted within such state. (2.) That a foreign corporation which does business in this state, and appoints an agent upon whom process can be served, is ¿stopped from setting up citizenship, or rather location of its place of ‘Business elsewhere; and (3.) Where such agent consents to acknowledge process, such acknowledgment is an admission of citizenship in this state, for the purpose of such action. This appeal, it will be seen, raises a question of great importance to a very large portion of the community, and is of moment in the present case, for if the defendants are citizens of the state of Connecticut, then it was the duty of the court below to have granted the motion, and to proceed no further in the case; and any step hereafter taken in the case in this court will be coram non judice, and assignable for error in any appellate court of the Hnited States, in consequence of its involving the construction of the above statute.
II. The court below erred in the view that the defendants are not citizens of the state of Connecticut, within the meaning of the above statute.
1. In the strict sense of language, a corporation is not a “ citizen ” of any state, but as these artificial persons have so greatly increased in number' throughout the coun try, it has been deemed proper to afford them the same rights and privileges, in respect to the selection of tribunals, as any “citizen.” Accordingly, it has been decided by the Supreme Court of the United States, in the interpretation of this statute, that a corporation is to be regarded as a “ citizen ” within its true meaning; that if a corporation exercises its powers in the state which chartered it, that is its residence, and such an averment would be sufficient to give the Circuit Court jurisdiction; and that a suit by or against a corporation in its corporate name must be presumed to be a suit by or against citizens of the state which created the corporate body, and 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. (The Louisville R. R. Co. v. Letson, 2 How. 497. Marshall v. Balt. and Ohio R. R. Co., 16 How. 324. Covington Drawbridge Co. v. Sheppard, 20 How. 227. Ohio and Miss. R. R. Co. v. Wheeler, 1 Black, 286.) Upon the foregoing principles, which are now the settled law of the land, and controlling upon this court, as being decisions of a constitutional tribunal upon the construction of a statute of the United States, it is insisted, upon the part of the defendants, without further argument, that it is entitled to the benefits of the said act in like manner, and to the same extent, as if this suit was against a citizen .of the state of Connecticut.
2. The court below, however, considered that it was a necessary qualification of a citizenship of a corporation of the state -from which it derives its charter, that its business must be transacted within such state. Bow, it is very evident, from a consideration of the cases above cited, that the Supreme Court have not considered this essential for the very corporations therein named, and who were held to be citizens of the state from which théy obtained their corporate powers, notwithstanding they were trans acting business in- states other than those of their incor poration. Besides, there are many corporations in this country which, like the defendants .herein, run between or through two or more states, having depots, agencies and employees in each. They must be citizens of but one or each of such states, and certainly it would be claiming very much to assume that they can be citizens of more than one of such states. And yet, upon the theory of the decision of the court below, they would be citizens of each of the states wherein they had an office or agency; or, in other words, a corporation is capable of migration. And, carrying the case still further, a foreign corporation, having an agency m this state, would be so far divested of its citizenship in the state of its creation, as not to be subject to attachment of its property. If a corporation exercises its powers in the state of its creation, it must be necessarily a citizen of-that state, and such “exercise of its powers ” is the only qualification, if any, of its citizenship. It may transact business in a dozen states, but where it exercises its corporate powers, is its dwelling place. It has been well said, in a late case in the Court of Appeals, (Merrick v. Van Santvoord, 34 N. Y. Rep. 218,) “that a corporation is an artificial being, and has no dwelling, either in its office, its warehouses, its depots, or its ships. Its domicil is the legal jurisdiction of its origin, irrespective of the residences of its officers, or the place where its business is transacted.”
3. It is uncontroverted that the defendants have their principal place for the transaction of their business at Hew Haven, Connecticut; that they exercise their powers at that place, and that the government and direction of their business are carried on there. They also have an agency and dock at the city of Hew York, incidental to the prosecution of their business as common carriers between those two places. Upon the principle laid down in the cases we have above cited, the citizenship of the defendants is to be found only in their domicil in the state which gave them origin, and has legal jurisdiction over their chartered privileges. If it were not so, it would be exceedingly disastrous to our common community when from the .controlling tendencies -of commerce, and the necessities of foreign and domestic intercourse the agencies and offices of many corporations • are necessarily located in our seaboard cities, that such location should deprive them of equal rights and privileges under the law with other “ citizens.” So far has the tendency of our courts been carried in applying the rules of general comity, that it has been held in Massachusetts, where the books and records of a Florida corporation were kept, and where its president and other officers resided, that such fact did not divest it of its character as a foreign corporation. (Danforth v. Penny, &c. 3 Metc. 564.)
Id. The court below also erred in the' view that when a foreign corporation, doing business in this state, appoints an agent upon whom process may be served, and such agent agrees to receive process, this constitutes an admission of citizenship in this state for the purpose of such action.
1. The act of our state law, to which the court referred, (Laws of 1855, ch. 279, p. 470,) was framed to facilitate the service of process upon foreign corporations in our state. (Cumberland Coal Co. v. Sherman, 8 Abb. Pr. 243.) Before the passage of this act a summons could only be served upon the “president, secretary or treasurer” of such corporation. (Code, § 134.) The act extends this service so that it shall be valid if made upon “ any person who shall be found within this state acting as the agent of said corporation, or doing business for them,” (§ 2,) and by section 3 of the act such service is decreed to be as effectual as if made in the manner and form required by law. If foreign corporations, doing business in this state, fail to exercise the power of appointment of an agent under this act, they are not prohibited from transacting business in the state. The only possible object of the act, it is plain, was to give our citizens the privilege of obtaining a prompt service of a summons or other writ on such corporations. It neither directly or indirectly deprives them of any rights or privileges growing out of their relations as citizens of the states of their incorporation.
2; The plaintiff, therefore, had the right to have served process upon any person they could find acting as agent for the defendants, without any action on the part of the defendants, but they unnecessarily chose to first inquire of the agent whether hé would accept process, to which he replied that he would “ acknowledge the service of any papers ” that might be left at the defendants’ office. In other words, the agent merely expressed his willingness to receive what he was bound by law to receive. This “ acknowledgment ” of the agent is held by the court below to be an “ admission of citizenship in this state.” It seems hardly to need argument that such decision is in this respect erroneous. Citizenship cannot be so easily transferred from state to state. Besides, this suit could not be removed into the United States court until process was served out of this court, and whether service of process was made upon the agent, with or without his expressed willingness to receive the same, could not change the position of the defendants in respect to their citizenship.
IV. The court below also erred in the view that foreign corporations, in order to obtain the privilege of transacting business in this state, must appoint such agent. It will be seen that the act last above referred to, nowhere prohibits the transaction of business in this state without such appointment. If no appointment is made, it merely provides for a proper service upon any person found acting as agent. The case in 24 Howard’s Practice, 517, referred to by the court below, and decided at special term, was an action against a foreign insurance company, which, by the laws of 1853, chapter 466, was compelled, in order to do business in this state, to comply with certain regulations, and its authority to do business within this state was subject to revocation at any time. The decision in that case is inapplicable to the present case, as, even admitting its correctness, the defendants in the present case are in no way restricted in its business by any law of this state, as are foreign insurance companies. But it seems evident, upon the principles above cited, that such decision was clearly erroneous and entitled to no weight in this court.
Y. If the Circuit Court of the United States, to which this cause was sought to be removed, could have had original cognizance of this action, it was obligatory on this court to grant the defendants’ application to remove it. The courts of the United States have invariably, since the decision of the case in 2 Howard, held that a corporation is a “ citizen ” within the meaning of the act in question, and it is declared to be the settled law of the land “ that a suit by or against a corporation in its corporate name is a suit by or against citizens of the state which created it.” It is, therefore, a legal presumption, conclusive, and which cannot be controverted, that the defendants, sued by the corporate name which it bears under the laws of the state of Connecticut, is a citizen of that state equally and to the same extent as if the suit had been brought against citizens of that state. The Circuit Court of the United States had, therefore, original cognizance of this action.
G. W. Cotterill, for the respondents.
I. It would seem exceedingly strange that a corporation created by the laws of another state, by the very terms of its charter for the express purpose of transacting business in this state, having its docks, warehouses, agencies, and everything necessary to the carrying on of its business here, and the cause of action actually arising here, can escape the jurisdiction of this court' and remove suits against such corporation into the United States Court as against citizens of this state. We apprehend that there is no warrant for such a proceeding, and that not a single adjudged ease so decides. The defendants hold the affirmative on their motion to remove, and they must clearly show to this court that they are right in their views, for even in doubtful cases the motion should be denied. (Anderson v. Manuf. Bank, 14 Abb. 436. Cooley v. Lawrence, 5 Duer, 605.) And where the state courts improperly remove, the United States courts will remand. (Id.)
II. Bearing this in mind, let us first consider the application made by the defendants. They say: “ That your petitioner is a corporation, created by and existing under and by virtue of the laws of the state of Connecticut, and has its principal office for the transaction of its business, at Hew Haven, in the state of Connecticut, and that the meetings of its stockholders, and the sessions of its directors, are held at Hew Haven, and the records of the company are kept at Hew Haven, and .the governing power of the corporation acts and issues its orders from said Hew Haven, in the state of Connecticut.” All this resolves itself into a single proposition, viz. that the defendants are created by the laws of the state of Connecticut. Being so created, the meetings of its stockholders must necessarily be in that state, so far only, however, as the rights of the members are concerned. (Angell & Ames on Corporations, p. 91.) As regards all the other features they could exist equally as well in this state as in Connecticut, for they would simply be the expression of the acts of agents and not of the corporation in its legal capacity, and by the acts of those agents the corporation could be bound. (Id.) It does not follow, however, that the fact of creation makes a corporation a citizen. It only raises a presumption, which, like all presumptions, can be repelled.
III. And this brings us to the only point. Is this corporation a citizen of Connecticut, and of Connecticut only, within the meaning of the statute providing for cases of removal of causes under the admitted facts in the plaintiffs’ affidavit, which show:
1st. That this corporation was expressly chartered to transact its business in this state.
2d. That it has its docks, warehouses, agencies and every thing necessary to the carrying on of its business here.
3d. That its agent admitted service of process here, agreeably to the statute.
4th. That the cause of action originated in this state.
IV. The design and object of the statute. The reasons for conferring jurisdiction on the courts of the United States as between citizens of the different states are thus correctly stated by a cotemporary writer, (Federalist, 80:) “It may be esteemed as the basis of the unit that the citizens of each state shall be entitled to the immunities and privileges of the citizens of the several states.” “ And if it be a just principle that every government ought to possess the means of executing its own provisions by its own authority, it will follow that in order to the inviolable maintenance of that equality of privileges and immunities the national judiciary ought to preside in all cases in which one state or its citizens are opposed to another state or its citizens.” ' (Marshall v. Baltimore and Ohio R. R. Co., 16 How. 326.) The object then of this statute, as to removal being based upon the above constitutional provision, the term citizen, as used in the constitution, would naturally have the same meaning as the same term in this statute.
V. The construction of this term, under the authorities. “ The earlier cases held that the mere creation of a corporation by the laws of a state, did not necessarily make it as a person a citizen of that state, because its corporators might belong to different states. (The Hope Ins. Co. v. Boardman, 5 Cranch, 57. The Bank of U. S. v. Deveaux, Id. 61.) And it was so held in Bank of Vickshurgh V. Slocum, (14 Peters, 60.) And these cases have never been overruled, but the question is still an open one; for Chief Justice Marshall says: “ That if the point of jurisdiction was an original one, the conclusion would be different.” (Louisville R. R. Co. v. Letson, 2 How. 358.) But in these cases the right even to sue in the United States Courts was denied. In the latter ease the court held that as matter of pleading, an averment of being incorporated implied that the members of the corporation were citizens of the state by which the corporation was created, but the head note distinctly says: An averment' of the facts of its creation and the place of transacting business is sufficient to give the United States courts jurisdiction. (2 How. 497.) The few other cases that bear upon this subject, merely settle precisely the same questions of pleading, and leave the question of jurisdiction untouched, where the members of the corporation are citizens of different states. These cases show that the mere fact of creation does not control this question.
VI. But the fact of residence does control; yet it must be, of course, such a residence* as would impart a corresponding character to a natural person. How a citizen of one state becomes a citizen of another state when he makes such other place his actual residence. (De La Vergne v. Evertson, 1 Paige, 182. Gassie v. Ballou, 6 Peters, 761. Bouvier’s Law Dict. def. “Citizen.”) And residence is determined by the animus, not upon duration of time. (Id.) The residence of a corporation is most obviously where it is actively present in the operations of its enterprise. (Gazie v. S. C. R. R. Co., 1 Strobhart, 70.) Lord Coke says “ that every corporation residing in any county, riding, city or town, or having lands or tenements in any shire are said to be inhabitants there within the purview of the statute (taxation.”) (Louisville R. R. Co. v. Letson, 2 How. 559.) , In law, corporations are treated as natural persons, and are treated for many purposes as citizens and inhabitants. (Conroe v. The Nat. Protect. Ins. Co., 10 How. Pr. 404. Louisville R. R. Co. v. Letson, 2 How. 497.) A railroad company must be treated as an inhabitant and freeholder in each county where its track is laid, and a summons before a justice of the peace must be,made returnable not less than six, nor more than twelve days from time of service. (Sherwood v. The Saratoga and Wash. R. R. Co., 15 Barb. 650.) The same principles apply under section 125 of the Code, which requires the place of trial to be in the county where one of the parties resides, holding that “ a railroad is a resident of every county through which its road passes.” (Railroad Co. v. Northern R. R. Co., 6 How. 106. Sherwood v. S. and W. R. R. Co., 15 Barb. 650. Belden v. N. Y. and H. R. R. Co., 15 How. 17. The People v. Pierce, 31 Barb. 138.)
VII. The fact that the corporation was expressly created for the purpose of transacting its business in this state is conclusive against the right of removal. Being created for such purpose, the very objects of the charter would be defeated if the defendants should not do business in this state. In fact, they could otherwise have no legal life nor entity as a corporation. Their very existence would depend upon their residence here. The fact above mentioned makes this case much stronger against the right of removal than the case of Stevens v. Phenix Ins. Co., (24 How. Pr. 517,) for in that case the company could fulfill all the ends of its incorporation by confining its business within the bounds of the sovereignty that created it. VIII. The defendants are precluded from removing this cause, on the ground of estoppel. Having their docks, warehouses, agencies, &c. in this city, accepting service of process by their agent, appointed for that purpose under the statute, they are estopped from alleging that the corporation is a citizen of another state. Otherwise they would have rights paramount to those of an individual. If a .person should locate a house directly across the boundary line between this state and the state of Connecticut and in that house should reside, he would necessarily be estopped from insisting that he was not a citizen of the state of Hew York within the meaning of the statute. But a foreign corporation has less rights than an individual. A corporation is only tolerated. It has no rights except by comity, outside of the sovereignty that created it. It cannot sue in our courts except by the exercise of-that comity. And a state can direct under what conditions such a monopoly should do business here. The legislature of this state has virtually so directed by compelling the appointment of an agent for the service of process, and the United States" Court would not and ought not to interfere. (Stevens v. Phenix Ins. Co., 24 How. Pr. 517.)
IX. The above principles are ably and thoroughly discussed in the opinion of the court below, and the above case of Stevens v. Phenix Ins. Co., (supra,) shows conclusively that the defendants’ motion should be denied, and that the order at the special term, should be affirmed:

Opinion:
By the Court, Monell, J.
The judiciary act of the United States provides for the removal into the Circuit Court of the United States, of an action brought in a state court, by a citizen of one state, against a citizen of another state, and the citizenship of the defendants is the only question to be determined in this case; which question must be decided upon the weight or preponderance of judicial decision. It is not a new question which we can examine upon principle and determine by reason. It has engaged the attention of the courts, more or less for over half a century, and ought by this time to .be considered as settled.
I propose to examine the different decisions which have been made, and endeavor, as far as possible, to ascertain on»which side of the question the weight of decision lies, and determine this appeal accordingly.
Commencing with the 'earliest cases, (Strawbridge v. Curtiss, 3 Cranch, 267; The Hope Ins. Co. v. Boardman, 5 id. 57, and Bank of U. S. v. Deveaux, Id. 61,) we find the Supreme Court of the United States to have decided that a corporation aggregate cannot, in its corporate capacity, be a citizen. In the latter case Chief Justice Marshall used this language: " That invisible, intangible, and artificial being, that mere legal entity, a corporation aggregate, is certainly not a citizen ; and consequently cannot sue or be sued in the courts of the United States, unless the rights of the members in this respect can be exercised in their corporate name. If the corporation be considered as a. mere faculty, and not as a company of individuals who in transacting their joint concerns may use a legal name, they must be excluded from the courts of the union."
These cases were followed by Bank of Vicksburg v. Slocum, (14 Peters, 60,) where it was held that the artificial being, a corporation aggregate, was not, as such, a citizen of the United States, yet the courts of the United States would look beyond the mere corporate character, to the individuals of whom it was composed; and if they were citizens of a state different from that in which the party sued resided, they were competent to sue in the courts of the United States, but that all the corporators must be citizens of a state different from that in which the party sued resided.
The next case in the federal court, is The Louisville Railroad Co. v. Letson, (2 How. 497,) where the question was very elaborately discussed and carefully examined. The action was brought by Letson against the railroad company, in the Circuit Court of the United States for the district of South Carolina. The defendants filed a plea to the jurisdiction of the court, to which plea there was a general demurrer. The objections raised to the jurisdiction were several, among them, and that is the only one necessary to notice, was, that a citizen of one state cannot sue a corporation in the Circuit Court of the United States in another state, unless all the members of the corporation sued are citizens of the state in which the suit is brought. The opinion of the court was delivered by Justice Wayne, and so much of the decision in Bank of Vicksburg v. Slocum, (supra,) as held that all the corpora-tors must be citizens of a state different from that in which the party sued resided, was overruled. That learned justice says: "A suit brought by a citizen of one state against a corporation by its corporate name, in the state of its locality, by which it was created, and where its business is done, by any of the corporators who are chosen to manage its affairs, is a suit, so far as jurisdiction is concerned, between citizens^ of the state where the suit is brought, and a citizen of another state. The corporators, as individuals, are not defendants in the suit, but they are parties having an interest in the result, and some of them being citizens of the state where the suit is. brought, jurisdiction attaches over the corporation, nor can we see how it can be defeated by some of the members who cannot be sued, residing in a different state." And farther on, he says ; " A corporation created by and doing business in a particular state, is to be deemed to all intents and pur poses a person, although an artificial person, an inhabitant of the same state, for the purposes of its incorporation, capable of being treated as a citizen of that state, as much as a natural person." The point, and the only point decided by this case, was, that the Circuit Court of the United States had jurisdiction in an action against a corporation in the state in which it was created, notwithstanding some of the corporators were not citizens of such state. As a decision, however, it is somewhat weakened by the want of unanimity in the court which made it. In the' subsequent case of Rundle v. Delaware and Raritan Canal Co., (14 How. 80,) two if not three of the judges entirely dissented. Two wrote opinions. Mr. Justice Daniel, in an able review of the cases, and particularly of the cases of Bank of the United States v. Deveaux, and of the Louisville and Cincinnati R. R. Co. v. Letson, and in an abler argument founded on reason and principle, entirely rejected the idea that a corporation was a citizen, within the meaning of the constitution of the United States or the act of congress, and after an elaborate and searching examination of the whole subject, came to these conclusions: "1st. That by no sound or reasonable interpretation, can a corporation—a mere faculty in law—be transformed into a citizen, or treated as a citizen. And' 2d. That the second section of the third article of the constitution, investing the courts of the United States with jurisdiction in controversies between citizens of different states, cannot be made to embrace controversies to which corporations and not citizens are parties, and that the assumption by these courts of jurisdiction in such cases, must involve a palpable infraction of the article and section just referred to." Mr. Justice Catron, who also wrote an opinion, explained his understanding of. the Letson case; namely, that if the president and directors are citizens of the state where the corporation was. ere ated, and the other party to the suit is a citizen of a different state, then the courts of the United States can exercise jurisdiction under the third article of the constitution.
The next case in order is Marshall v. Baltimore and Ohio Railroad Company, (16 How. 314,) which was brought in the Circuit Court of the United States for the district of' Maryland. The declaration alleged that the defendant " is a body corporate by an act of the general assembly of Maryland." Mr. Justice Grier, delivered the opinion of the court, fully sustaining and distinctly recognizing the Letson case as the settled law of the court. But here again three justices, (Catron, Daniel and Campbell,) dissented. Justice Catron said he had at all times denied that a corporation is a citizen within the sense of the constitution. Justices Daniel and Campbell each delivered elaborately prepared opinions. •
The question was again presented in The Covington Drawbridge Company v. Shepherd, (20 How. 227,) where the Letson case was again recognized as the settled law of the court. Justices Campbell and Daniel again dissenting.
The last case I am aware of, is Ohio and Mississippi Railroad Company v. Wheeler, (1 Black, 286,) which was brought in the Circuit Court of the United States for the district of Indiana. The plaintiffs were a corporation created by the •laws of the states of Indiana and Ohio. .Chief Justice Taney, after referring to the several decisions of the court, including and subsequent to the Letson case, says: " After these successive decisions the law upon this subject must be regarded as settled; and a suit by or against a corporation in its corporate name, is a suit by or against citizens of the state which created it."
In the Letson case, and in all the subsequent cases cited, except the last, the.court sustained the jurisdiction on the ground that a suit by or against a corporation in the state where it received its corporate creation, was a suit by or against a citizen of that state. Leaving it perfectly clear, that the federal courts would exercise jurisdiction, if the action was pending in those courts. 0
There is, however, some diversity of decision in the state courts. The question has not often arisen. Against the jui'isdiction is a strong case in Pennsylvania, decided in 1860, (Wheeden v. Camden and Amboy Railroad Company, 1 Grant's Cases, 420,) where the rule adopted in Bank of United States v. Deveaux, (ubi sup.) as explained by Justice Catron in the Bundle case, is recognized—namely, that the governing officers, by whatever name called, are.the substantial party; and if they are citizens of the state which created the corporation, and the other party is a citizen of another state, the federal courts have jurisdiction, and the cause is removable, under the judiciary act.
. The only case in this state which denies citizenship to corporations is Stevens v. Phenix Ins. Company, (24 How. Pr. 517,) a special term decision. While a very recent case in the second judicial district decided at general term, (Brooklyn Perry Company v. Norwich and New York Transportation Company, MS. opinion by Lott, J.) fully recognizes the rule as established in the Supreme Court of the United States. To this may be added Dennistoun v. N. Y. and N. H. Railroad Company, (1 Hilton, 62,) and Shelly v. Hoffman, (7 Ohio, N. S. 450,) which decide the same way. I am not aware of any other case bearing directly upon the question.
The array of cases which I have thus marshalled weigh heavily on the side of jurisdiction. In the federal courts, since the Letson case in 1844, the rule has been uniform and undisturbed; and in the state courts interrupted by only two decisions.
I have not criticised or commented on any of these cases, as I proposed in the outset, to discover if I could, on which side of the question was the greatest number and weight of decision, and to be governed accordingly. Having examined the cases, I have come to the conclusion that the rule whi§h has been adopted in the federal courts, must be applied in this state, and that corporations for the purposes of jurisdiction, must be regarded as citizens of the state which created them.
It is however said, that inasmuch as the defendants' corporation was created for the purpose of carrying freight and passengers by steamboats for hire, between the cities of Hew York and Hew Haven, and were the proprietors of a line of steamboats, which carried freight and passengers between those cities, having their agencies, docks, warehouses and" everything necessary to carrying on their said business, in the city of Hew York, the defendants were citizens of each or either state, and could not claim exclusive citizenship in one or the other. A natural person cannot claim citizenship in two places; and I cannot see how a mere artificial being can be made ubiquitous. In this sense domieü and citizenship are equi-n valent; and a person can have but one domicil. Heither does the transaction of a part of its business in another state, even where it is authorized by the laws of such other state, deprive a corporation of its citizenship in the state which ereated.it. This was involved and decided in each of the two cases in this state to which I have already referred. (Dennistoun v. N. Y. and N. H. Railroad Co. and Brooklyn Ferry Co. v. N. and N. Y. Trans. Co., supra.) And "having their principal place of business therein," was recommended, as a sufficient averment to show citizenship in the state which created the corporation, in the case of Covington Drawbridge Company v. Shepherd, (sup. p. 234.)
The learned chief justice, in his opinion delivered at special term in this case,, seemed to understand that Wright, the defendants' agent in this city, had been ap pointed in pursuance of the laws of this state, (Sess. Laws 1855, chap. 279, p. 470,) requiring the designation of some person in each county where a foreign corporation transacts business, upon whom process may be served; and he argued that such appointment, for such a purpose, was an admission of citizenship in. this state for the purposes of the action. Without questioning the soundness of the con-. elusion, it is enough to say, that I do not find any evidence of such appointment. The statute referred to, requires the corporation tó file such designation in the office of the secretary of state, and an authenticated copy is made evidence,, and service on such designated person is lawful. The allegation in the plaintiffs' papers is, that " Wright is the general agent of the defendants at the city of Hew York," and being informed of the intended suit, and requested to accept service of process, consented to do so. Ho such request or consent would have been necessary had Wright been the person designated under the statute, upon whom process might be served. Hence the point made by the learned chief justice, as was also made in Sterns v. Phenix Insurance Company, (sup.) is inapplicable and not supported by the facts of the case.
In conclusion, I am of opinion that the defendants are , entitled to an order removing the action into the Circuit Court of the United States, upon complying with the requirements of the judiciary act, and therefore concur in reversing the order appealed from.
Robertson, Ch. J.
The decision in the case of the Ohio and Mississippi R. R. Co. v. Wheeler, (1 Black, 286,) which escaped my attention when this case was before me at special term, has induced me to make a more thorough investigation of the authorities upon the question of the nature of the cases in which suits, brought in state courts, may be removed into the courts of the United States, in order to reconcile their real or apparent diversity. If the' principle, claimed to have been laid down by the late eminent chief justice of the Supreme Court of the United States, (Taney,). in that case, as to the possibility of a corporation becoming a citizen of the state creating it, by force of that creation alone, be as applicable, under the judiciary act of the United States, (1 U. S. Stat. at Large, p. 78,) to suits brought in the state courts, as to those which may be brought originally in the United States courts, is to be understood as universally applicable, without any limitation or qualification, and was actually essential to the decision of that case, it must govern this. But I apprehend, on a close examination of the prior cases, cited and commented upon by him, as settling the law upon the subject, no such universal principle was decided, or was necessary for the decisions therein. Uor was it necessary for the decision of the case then before the court, or, if it were, it was not applicable to causes to be removed to, as well as those originally brought in, the United States courts.
The proposition laid down by Chief Justice Taney in the case just alluded to, in reference to corporations, is stated by him in these words: " The law upon- this subject must be regarded as settled, and a suit by or against a corporation, in its corporate name, is a suit by or against citizens of the state which created it." I have not been able to bring myself to believe that so learned and careful a judge could not have meant to go farther than to hold that such suit was to he presumed to he, or was prima facie, against citizens of the state creating the corporation, a presumption which, if unrebutted, would have been equally fatal to the jurisdiction of the federal courts in that case. The question there arose entirely upon the pleadings; and there was, therefore, no opportunity for raising any issue of fact; and it has long been settled law that the' United States courts, being of special jurisdiction, the'facts giving it must appear on the record. It appeared on the face of the declaration in that case, that a corporation chartered by the state of Indiana, was joined with a corporation chartered by the state of Ohio as plaintiffs, and that the defendant was a citizen of a different state from that in which he was sued.
The constitution of the United States declares that its judicial power shall extend " to controversies * between citizens of different states." (Art. 3, § 2.) The Federalist (No. 80) sustained the grant of that power by the argument, that it might " be esteemed as the basis of the unit, that the citizens of each state" should "be entitled to the immunities and privileges of the citizens of the sevei'al states, and if it" wez-e "a just principle that every government ought to possess the means of executing its own provisions by its own authority, it" would "follow that, in order to the inviolable.maintenance of that equality of privileges and immunities, the national judiciary ought to preside in all cases in which .one state or its citizens" should be " opposed to another state or its citizens." This reasoning, by itself, would lead to the conclusion that the United States courts ought not only to have original jurisdiction, or be capable of acquiring jurisdiction in all cases of controversies between citizens of different states, but also to have sole jurisdiction of them, so as to exclude state courts from the exercise of any over them. If that were the true interpretation of such clause in the constitution, no act of congress has provided for its exercise. The judiciary act of 1789, (1 Stat. at Large, 78,) by its eleventh section, provides only for the exercise of concurrent jurisdiction with the courts of the several states by the circuit courts of the United States, of all civil suits " between a citizen of the state where the suit is brought, and a citizen of another state." And the twelfth section . of the same act provides for the removal, by the defendant, of a suit commenced in a state court "by a citizen of the state in which the suit is brought, against a citizen of another state."' But no provision is made for the removal of a cause by any plaintiff, or by a defendant, who is a citizen of the state in which the suit is brought. Such statute was undoubtedly intended to carry out the whole object of the constitutional provision, which was to secure an impartial tribunal, and enable a citizen of one state, who had been sued in another by a citizen of the latter, to free himself from the risk of any bias in favor of the party who belonged to the same state as the tribunal he had selected. The principle, too, has been constantly applied, from the earliest date to the latest, to the construction of both the constitution and the judiciary act, that the jurisdiction of the federal courts being specially defined for special purposes, nothing can be taken by implication, except for those purposes; so that a suit, in which the parties on each side - are not all citizens of a different state from that of all those on the other; in other words, unless each plaintiff could sue each defendant in a United States court, is either not a controversy between citizens of different states, within the meaning of the constitution, or else not within the judiciary act, a suit between a citizen of the state where the suit is brought and a citizen of another state, so as either to give a circuit court jurisdiction over it, or authorize its removal from a state court. (Strawbridge v. Curtis, 3 Cranch, 267. Cameron v. McRoberts, 3 Wheat. 591. North River Steamboat Co. v. Hoffman and others, 5 John. Ch. 300. Fairchild v. Durand, 8 Abb. 305. Prentiss v. Brennan, 2 Blatchf. C. C. 162. Denniston v. N. Y. and New Haven R. R. Co., 2 Abb. 278, 415. 1 Hilt. 62.) It was in the application of that rule alone that the court held, in The Ohio and Mississippi R. R. Co. v. Wheeler, (ubi sup.) that the plaintiffs being in cor porated by the same name by two states, (Ohio and Indiana,) were to be considered in the light of citizens of those states severally, and that if both of them, as such, would not be citizens of different states from those' of which all the defendants were citizens, jurisdiction over it could not be maintained. There was nothing, therefore, in that case, or the reasoning contained or principles laid down in it, to require, as necessary to sustain the jurisdiction of the court, that the " artificial faculty," or " invisible, intangible and artificial being" or "legal entity" known as a corporation, (per Marshall, Ch. J. Bank of U. S. v. Deveaux, 5 Cr. 61; Daniels, J. in Rundle v. Delaware and Rar. Canal Co., 14 How. 80,) consisting of a mere grant of a body of privileges to certain individuals, their successors or assigns, denied to the rest of the community, should, by the mere act of its creation, be rendered actually and absolutely a eitizen of the state which created it, within the meaning of the constitution and the judiciary act, and that too distinct from any citizenship of its corpora-tors, managers or officers. Such a doctrine, carried out, would not only enable a state to naturalize aliens, but give it the power of conferring upon the citizens of any other state the right to imjzlead citizens of their own state in the federal courts. And, as corporations may be made sole as well as aggregate, it would lead to the extraordinary, if not absurd i'esult, that any one might acquire from every state the privileges of a corporation, under a particular name. It would then depend upon the mere form of the transaction out of which a cause of action arose, and the name in which it was conducted, whether courts of the United States would have jurisdiction or not. It is a pure legal fiction, that the grant by the legislature of a state for a definite time, or forever, to particular individuals and their assigns, or those who succeed to their lights, of an aggregate of privileges denied to the x'est of the community, such as that of suing and being sued by a particular name, holding and taking property by that name, having a common seal and the like, creates a new-legal entity, designated as an artificial person. To indue which with rights of citizenship apart from those of the persons upon whom such privileges are conferred, and in whom they are vested, would be a great stretch of imagination. I do not understand that the constitution of the United States' was ever designed to recognize such abstractions. It was framed to regulate the rights, powers and duties of living persons alone forming the people of the United States, in whose name it speaks, who were already the citizens of different states or capable of becoming so. As was well observed in the opinion of the court in the case of The People v. Imlay, (20 Barb. 80,) in reference to the second section of the next article (fourth) which secures to citizens of each state the privileges and immunities of citizens of the several states, "An incorporated company is not a citizen within the meaning of this section. Such a company is a creation of the state which incorporates it, which has no power to legislate for other states, or to give to the artificial bodies which it creates powers to act in other states. Such companies act in other states than those which incorporate them, only by the comity of such other states." The same reasoning is equally applicaple to the second section of the third article, and to the recognition of the right of corporations to sue by their corporate name in courts of the United States. For that depends either upon the provision of the judiciary act adopting the previous practice of state courts, or a practice established by the courts of the United States to that effect, growing out of comitj'- and a desire to assimilate the practice of tribunals created under state and United states authorities, where feasible and not conflicting with other provisions of law.
I cannot, therefore, believe that the learned and vene rated chief justice intended, in the case already referred to, (Ohio and Miss. R. R. Co. v. Wheeler, ubi supra,) abrubtly to adopt as an original doctrine so startling a principle, and recognize in the states such an anomalous power of conferring jurisdiction on the United States courts by a grant of privileges to the citizens of other states, without ' furnishing some cogent reasoning to sustain the doctrine, aimed directly at the objections to it, or sustained by an analysis of previous decisions to show a previous sanction of it.
An analysis of the cases previous to that last referred to, will show that while consistent with the idea that upon.a question of jurisdiction of the United States courts, a corporation created by a state may be prima facie assumed to consist entirely of corporators who are citizens of that state, they do not sustain the view, that such corporation is absolutely' and de facto a citizen of that state, within the meaning of the constitution and the judiciary act, without regard to the state or country of which its corporators may be citizens or subjects. Nor does the language of Chief Justice Taney in the case alluded to, go to that extent, for he merely says " that a- suit by or against a corporation in its corporate name, is a suit by or against citizens of the state which created it." This is peculiarly and carefully w orded, and in view of his usually nervous and direct diction, could hardly have been intended as a periphrasis to convey the idea that " every corporation is absolutely a citizen of the state that creates it, within the meaning of the constitution and the.judiciary act." The introduction of the words "prima facie " or "presumptively " after the word "is," relieves the proposition from all ambiguity, and makes it what it was intended to be. The decision at special term in the recent case of The Brooklyn Ferry Company v. The Norwich and New York Transportation Company, (supra,) in the Supreme Court of this state, in the second district, somewhat corresponded with such a view, but was overruled at a general term of the same court. The learned judge, however, who delivered the opinion of the court for raising such decision on that occasion, (Lott, J.) while he conceded therein that the rule, as stated, was founded upon a presumption, held that it was one of law and not of fact, and therefore conclusive. That would bring it back to a simple positive declaration. Ko ground for raising such conclusive presumption is to 'be found in any thing contained in the constitution of the United States, or any relation between the federal government, or any department thereof and the states or any department of their goverment or the people thereof. And it certainly is not based upon any long continued or wide spread usage of the legislatures of the states, limiting the corporators of a corporation to citizens of the state which created it, to warrant its judicial adoption by a court. Such opinion relied upon the fact therein stated, that evidence to repel such presumption was excluded in the case of the Louisville Cin. and Charleston R. R. Co. v. Letson, (2 How. U. S. 497.) It appears to me, however, that the learned judge who delivered that opinion was mistaken in such view. That case came up entirely upon an issue of law, by a demurrer to a plea to the jurisdiction. One objection taken by the defendants' counsel, it is true, was that a citizen of one state cannot sue a-corporation in a Circuit Court of the United States in another state, unless all of the members of the corporation sued are citizens of the state in which the suit is brought, meaning, doubtless, thereby " appear hy the record to he such citizens," for that was all- the question which could be raised on demurrer. That case overruled a dictum in the previous case of The Bank of Vicksburgh v. Slocum, (14 Pet. 60,) not necessary to its decision, that all the corporators, in a suit hy a corporation, must he citizens of a different state from that of the party sued, but only so far as regarded corporators who were not in reality parties to the suit. Justice Wayne, who delivered the opinion of the court in the first case, (Louisville R. R. Co. v. Letson,) says: "A suit brought by a citizen of one state against a corporation by its corporate name in the state of its locality where it was created, and where its business is done, by any (qu. some) of the corporators who are chosen to manage its affairs," is a suit, so far as jurisdiction is concerned, between citizens of the state where the suit is brought and citizens of another state. The corporators as individuals are not defendants in the suit, but they are parties having an interest in the result, and some of them, (i. e. the managers,) being citizens of the state where the suit is brought, jurisdiction attaches over the corporation. Uor can we see how it can be defeated by some of the members," (i. e. not managers,) " who cannot be sued, residing in a different state." That learned jurist undoubtedly meant by the last phrase, members resident in the same state with some of the adverse parties, which would-be necessary to defeat the jurisdiction. In the business of a corporation being done in the state where it was created, by his allusion to " corporators chosen to manage the affairs of the corporation," he undoubtedly meant those who were citizens of the state by which the corporation was created as they conducted its business there; otherwise the allusion to such management was entirely unnecessary, and he might as well have stopped at the fact of the mere creation. He evidently argued .that a state might and was presumed to vest all the property or right of controlling it, and the right of contracting either of a corporation or an individual citizen of such state, as trustees, who would necessarily be the real parties in every suit by or against them, respecting the subject of the trust, while the cestuis que trust, although interested in the result, need not be parties to such suit. (Story on the Const. § 1695.) He undoubtedly considered the persons hy whom such affairs were to be managed, as virtually the trustees and only parties to the record in any suit respecting the liabilities or rights of the corporation, so far as jurisdiction depended on the citizenship of parties, as in the case of executors and administrators. (Chappedelaine v. Cheveaux, 4 Cr. 306. U. S. Bank v. Deveaux, ubi sup. Chedress v. Emory, 8 Wharton, 668.) Such was the interpretation put in a subsequent case, (Rundle v. Delaware and Raritan Canal Company, 14 How. U. S. 80,) upon the decision in that case by one of the very justices who took, part in it, (Catron, J.) who explained it to mean that courts of the United States could exercise jurisdiction over cases where a president and directors of a company which is a party to a suit, (being the parties managing its business,) are citizens of the state by whom it was incorporated and the other party is a citizen of a different state, while in a subsequent ease, (Marshall v. Baltimore and Ohio Railroad Company, 16 How. 314,) sustaining that same decision, he took occasion to say that he had always denied that a corporation was a citizen within the meaning of the constitution. In the same case of Bundle v. Delaware and Raritan Canal Company, (ubi sup.) Justice Daniel came to the same conclusion,- after a thorough review of all the authorities and a forcible presentation of the reasons leading to that result. But in that case he went further, and insisted that a United States court could have no jurisdiction where a corporation was a party, meaning of course when composed of citizens of different states. This of course would go too far the other way, as it would not only deprive the representatives of a corporation of availing themselves of a federal court, but shield them from being reached by it. Besides the cases of Marshall v.' Baltimore and Ohio Railroad Company, (16 How. 314,) in which Justices Daniel and Campbell delivered elaborate dissenting opinions, the doctrine laid down in the case of the Louisville Railroad Company, v. Letson, (ubi sup.) was followed in the case of the Covington Drawbridge Company v. Shepherd, (20 Row. U. S. 227.) In none of those cases, however, is the principle maintained that a corporation can be a citizen within the meaning of the constitution of the United States.'; nor is any answer put forth in any case to the able argument of Justice Daniel against it in the case of Rundle v. Delaware and Raritan Canal Company, (ubi sup.) I feel fully satisfied, therefore, that the learned chief justice in the case first cited, of The Ohio and Mississippi Railroad Company v. Wheeler, (ubi sup.) did not mean to go beyond where the previous eases reversed by him therein, had gone, of sustaining the views of Justice Waynein the case of The Louisville Railroad Company v. Letson, (ubi sup.) to wit, that in a suit to which a corporation, managed and controled by some of its corporators as officers, who-were citizens of the state by which it was created was a nominal party, such managers were the real parties, and the other corporators whose interest they represented were not parties at all, although interested in the result, and that their citizenship in a different state from that creating such corporation had no effect on the jurisdiction of the United States courts over the parties. This would admit of evidence to show that the managers or representatives of the corporation were citizens of a different state from that which created it, and if in this case they resided in this state, of course the action could not be removed to the federal court.
The petition in this case for removal showed not only that the defendants were incorporated by the state of Connecticut, but that the meetings of their corporators take place in that state, and their governing power issues their orders therefrom. There was nothing presented in opposition, to show that any of their officers or even corpora-tors were citizens of this state so as to take the case out of the twelfth section of the judiciary act. I therefore now consider it a case for removal. If I were still satisfied that the decisions in The Ohio and Mississippi Railroad Company v. Wheeler, and Lousville Railroad Company v. Letson, went so far as to declare that a corporation could he a citizen of a state distinct from that of which its corporators were citizens, I should be inclined to avoid what appears to me a monstrous proposition, that its mere creation made it, without any thing else, forever a citizen of the state creating it, by adhering to the qualification apparently laid down by Justice Wayne in the latter case as to residence, and sustained by Justice Allen in Stevens v. Phenix Fire Insurance Company, (24 How. 517,) and which I adopted in the opinion given by me at special term. As it is, I am satisfied the order refusing to allow a removal should be reversed, without costs.