Court Opinion

ID: 6232610
Source: CourtListenerOpinion
Date Created: 2022-02-17 20:25:22.530982+00
Date Added: 2024-06-11T08:57:55.661552
License: Public Domain

The opinion of the court was delivered, by
Woodward, C. J.
A sharp conflict of opinion upon the citizenship of state corporations prevailed for many years in the Supreme Court of the United States, and finally culminated in what appears to have been an unanimous judgment in the case of The Ohio and Mississippi Railroad Co. v. Wheeler, reported in 1 Black 286.
In that case the railroad company claiming to be a citizen of Ohio, had brought suit in the Circuit Court of the United States against Wheeler, a citizen of Indiana, and the question was upon the jurisdiction of the court under the clause of the constitution which gives the Federal courts jurisdiction in controversies between “ citizens of different states.” It appeared that the company had been incorporated by concurrent legislation of the two states of Ohio and Indiana, and that the road ran through both states, but that the principal office and place of business of the company was in Ohio. The residence of the directors and- stockholders was not stated in the report. Chief Justice Taney, after a rapid review of the adjudged cases, stated with great clearness the following principles :—
1. That the artificial person or legal entity known to the common law as a corporation, can have no legal existence out of the bounds of the sovereignty by which it was created. It must dwell in the place of its creation.
2. That the corporation in question was chartered by the two states of Ohio and Indiana, by the same name and style, clothed with the same capacities and powers, and intended to accomplish the same objects, and is -spoken of in the laws of both states as one corporate body exercising the same powers and fulfilling the same duties in both states ; and yet that it had no legal existence in either state except by laws of the states, and neither state could confer on it a corporate existence in the other, nor add to or diminish the powers there exercised. Therefore, that it was a distinct and separate corporate body in Indiana from the corporate body of the same name in Ohio.
3. That where a corporation is created by the laws of a state, the legal presumption is, that its members are citizens of the state in which alone the corporate body has a legal existence ; and that a suit by or against a corporation in its corporate name, must be presumed to be a suit by or against citizens of the state which created the corporate body, and that no averment or evidence to *232the contrary is admissible, for the purpose of withdrawing the suit from the jurisdiction of a court of the United states.
4. It followed from these principles, that a suit by a corporation created by the concurrent legislation of two states was*, in legal contemplation, the suit of the individuals who compose it, and must, therefore, be treated as a suit in which citizens of each state are joined as plaintiffs. If the defendant was a citizen of either of those states, such a suit could 'not be maintained in the Federal courts where jurisdiction of the case depended altogether on the citizenship of the parties, and, consequently, the plea to the jurisdiction in that case was sustained.
These principles admit of ready application to the case in hand, and decide it at once. The Cleveland and Pittsburgh Railroad Company was first incorporated by the state of Ohio and then by Pennsylvania. It became thus a separate corporation in each state. The legal presumption that results from such legislation is, that the members of'the corporation are citizens of both states, and no averment or evidence is to be received to countervail this presumption. The averments and affidavits we have upon the record corroborate the presumption, which, for purposes of jurisdiction, would be conclusive without corroboration. A suit then against this corporation by a citizen of Pennsylvania, is a suit against citizens of Ohio and Pennsylvania who have united themselves in business under the shadow of the corporate name, and because some of the defendants are citizens of the same state as the plaintiff, the Federal courts have not jurisdiction, and the application to certify into that jurisdiction was properly refused.
Affirmed.