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BALTIMORE & Ohio RAILROAD Co. v. CARY.
the Act of 1875 has repealed the Act of 1866. If it has, the case is ended here. If it has not, then the removal may perhaps be supported by the latter act.
The Act of 1875 does not profess to repeal any acts, or parts of acts, which are in conflict with it. Is that part of the Act of 1866, which authorizes one defendant, if a citizen of another state, to separate his case from that of the other defendants who are citizens of the state where, the suit is brought, and to remove it into the federal court, in conflict with anything in the Act of 1875 ? Cannot both stand together? In a case like the present, the Act of 1875, as I understand it, would authorize all the plaintiffs or all the defendants, collectively, to remove the whole suit. The Act of 1866 authorizes a defendant, not being a citizen of Georgia, to remove the case as to him, if there can be a final determination of the controversy, so far as he is concerned, without the presence of the other defendants as parties in the cause. It seems to me that there is no conflict here, no reason why both acts should not stand. I conclude, therefore, that the Act of 1866, so far as it authorizes a defendant to remove a cause as to him, is not repealed by the Act of 1875.
And I see no reason why the controversy between the complainants and Moore cannot be finally terminated without the presence of the other defendants. Had the complainants filed the bill against Moore alone, he could have demurred to it for want of parties. He had obtained an order to issue a fi. fa. for sale of the mortgaged premises, and had issued the writ, and the sheriff had advertised the property for sale. The bill, on the facts alleged in it, would well have lain against him alone to enjoin him from selling the property, and to establish the trust as against his mortgage. The other defendants would have been proper parties, but I think they would not have been necessary parties to the case.
If this view is correct, this controversy between him and the complainants may be determined without the presence of the other defendants as parties in the cause.
The motion to remand the cause is refused.
BALTIMORE AND OHIO RAILROAD CO. vs. CARY.
1. Under the clause of the Constitution of the United States, extending the judicial
power of the United States to controversies between citizens of different states, a corporation, in respect to the jurisdiction of the federal courts, is regarded as a
citizen of the state where it was created. 2. A foreign railroad corporation, by merely leasing, possessing, and operating in this
state the property of a domestic railroad corporation, does not thereby become an Ohio corporation, nor such citizen of the state.
BALTIMORE & Ohio RAILROAD Co. v. CARY.
3. The proviso of the 24th section of the act for the creation and regulation of incor
porated companies in Ohio, as amended March 19, 1869 (66 Ohio L. 32), so far as it provides that the leasing, purchasing, or operating a railroad in this state by a railroad
company of another state shall be regarded as a waiver of the right of such foreign company to remove cases brought against it in the state courts to those of the United States, is repugnant to the Constitution and laws of the United States, and is,
therefore, ineffective as a statutory waiver of the right of such removal. 4. When a corporation of another state, not being a citizen of Ohio, is sued by a citizen
of the state, in the state court, it is entitled to have the case, under the 12th section of the Judiciary Act of Congress of 1789, removed from the state court to a United States court.
JOHN CARY brought his action against the Baltimore and Ohio Railroad Company in the court of common pleas of Belmont County, to recover of the company five thousand dollars, as damages for excavations and structures of the company in a street of the city of Bellaire, so as to obstruct the passage to and from the street of his city lots and buildings thereon.
On coming into court, the railroad company filed its petition, setting forth, among other things, that John Cary is a citizen of Ohio; that on the 21st day of June, 1871, he brought said action against the Baltimore and Ohio 'Railroad Company, which is, and then was, a corporation created by the State of Maryland, and is a citizen of that state; that the company offers good and sufficient surety to do all things required by the act of Congress, approved September 24, 1789, to entitle it to have the case removed to the circuit court of the United States ; and prays that the case may be removed into the next circuit court of the United States for the Southern District of Ohio, and that no further proceedings be had in the court of common pleas.
A bond in the sum of a thousand dollars, with proofs of the sufficiency of the surety, was duly filed, as described, and tendered in the petition for removal.
To this petition of the company Cary filed the following answer:
“ John Cary, for answer to the petition of said defendant, says: is true, as alleged in said petition, that said Baltimore and Ohio Railroad Company is a corporation, originally created by the laws of the State of Maryland, and that the said plaintiff is, and was at the time of the bringing this suit, a citizen of the State of Ohio.
“ The plaintiff further says: That on or about the 21st day of November, A. D. 1866, there was a certain railroad, commonly known as
- The Central Ohio Railroad,' commencing at the city of Columbus, in the State of Ohio, and terminating at Bellaire, in said county and state, said railroad being then and there owned, controlled, and operated by a certain company, known as the Central Ohio Railroad Company, said company having been organized under the laws of the State of Ohio.
" The plaintiff further says: That on the 21st day of November, A. D. 1866, the said Central Ohio Railroad Company, as reorganized, entered into a contract with the said Baltimore and Ohio Railroad Company, by which the latter company was to have the possession of the said Central Ohio Railroad, and control and operate the same for a period of twenty years from the 1st day of December, A. D. 1866.
“ The plaintiff for further answer says: That in pursuance of the con
6 It Vol. IV.)
BALTIMORE & Ohio RAILROAD Co. v. Cary.
tract entered into by and between the Central Ohio Railroad Company, as reorganized, and the said Baltimore and Ohio Railroad Company, on the 21st of November, 1866, the said defendant entered into an agreement, on the 1st day of December, 1866, with the said Central Ohio Railroad Company, as reorganized, for operating said Central Ohio Railroad, which agreement provided in article first, That the said Baltimore and Ohio Railroad Company should take possession of the entire railroad, appurtenances, and property of every description belonging to the said Central Ohio Railroad Company for twenty years from the 1st day of December, A. D. 1866 ;' which said article of agreement was, on the 13th day of February, A. D. 1869, modified in this, to wit, . That the term and possession of the said Baltimore and Ohio Railroad Company to the Central Ohio Railroad and property of the Central Ohio Railroad Company as reorganized, shall be continue for other periods of twenty years, indefinitely,' &c.
“ The plaintiff further says: That the said defendants, by virtue of the articles of agreement referred to above, became the lessees and owners of the Central Ohio Railroad, and operated, used, and controlled said road from the 1st day of December, 1866, to the commencement of proceedings herein, to wit, June 21, 1871, and are still the lessees and operators of said railroad, and that on the day of July, A. D. 1867, being then and there the lessees of said railroad, the said defendant, by an article of agreement executed by the town council of Bellaire, and of the Baltimore and Ohio and Central Ohio Railroad Companies (a full copy of the terms and stipulations of which article of agreement is hereto attached as part of this answer), agreed to construct and build a railroad bridge over the Ohio River, through First Street and across Crescent, Water, Belmont, and Guernsey streets, and the intersecting alleys in said town of Bellaire, in said county and state, for the purpose of continuing said bridge to and connecting the same with the Central Ohio Railroad, and by virtue of said article of agreement did enter upon said First Street, and the above streets and alleys, and made large excavations, built and constructed a railroad' bridge in front of said lots in said petition described (as will more fully appear by reference to the petition of said plaintiff, which is here referred to and made a part of this answer).
“ Therefore, and by reason of the premises aforesaid, the said John
66 Cary, plaintiff, avers that the said defendant, the Baltimore and Ohio Railroad Company, is, and was at the time of bringing this suit, a citizen of the State of Ohio, and ought not to have this suit removed into the circuit court of the United States, to be held in the Southern District of the State of Ohio, as prayed for in said petition of said defendant.”
To this answer the railroad company demurred, and the court overruled the demurrer and dismissed the petition for the removal of the case, to all which the company excepted.
Thereupon the company filed its petition in error in the district court, to reverse the judgment of the common pleas; but that court gave judgment affirming that of the common pleas, and this petition in error was filed in the supreme court to reverse the judgments of the courts below.
J. H. Collins, for plaintiff in error.
BALTIMORE & Ou10 RAILROAD Co. v. CARY.
DAY, J. The Baltimore and Ohio Railroad Company, a foreign corporation, having been sued in the state court by a citizen of the state, sought to remove the case to the United States court, under the twelfth section of the federal Judiciary Act of 1789, which provides that if a suit be commenced in a state court by a citizen of the state against a citizen of another state, when the matter in dispute exceeds five hundred dollars, and the defendant at the time of entering his appearance shall file a petition for the removal of the cause for trial into the next circuit court of the United States, and shall offer good and sufficient security for his proceeding therein, “ it shall be the duty of the state court to accept such security, and proceed no further in the case.
It is ordained by the Constitution of the United States that the judicial power
of the United States shall extend to controversies “between citizens of different states ;” that the laws of the United States, made in pursuance of the Constitution, “ shall be the supreme law of the land, and that the judges in every state shall be bound thereby, anything in the Constitution or laws of any state to the contrary notwithstanding.”
It is not disputed but that the requisitions of the statute were fully complied with to authorize the removal of the case, if the company was in law entitled to have the case transferred. But the right of the company to have the case removed to the federal court is disputed on two grounds : 1. That the company is a citizen of Ohio; 2. If not such citizen, it has waived the right of removal.
1. The railroad company is a corporation, and is sued by its corporate name. A corporation is an ideal existence, created by legislative enactment, and, in general, it is incapable of being a citizen ; but, being endowed by law with the capacity of suing and of being sued, it may become a party to suits in court; and, inasmuch as the jurisdiction of the federal courts is made, in some cases, to depend upon the citizenship of the parties litigant, a corporation, in respect to such jurisdiction, is regarded as a citizen of the state which creates it, and this presumption is now held by the supreme court of the United States to be conclusive. Railroad Co. v. Wheeler, 1 Black, 286; Railroad Co. v. Harris, 12 Wall. 65; Railway v. Whitton, 13 Wall. 270.
The Baltimore and Ohio Railroad Company was incorporated by the State of Maryland, and, therefore, so far as relates to the jurisdiction of the federal courts, is a citizen of that state, and being sued here by a citizen of this state, is entitled to have the case transferred to the federal
court, unless, as it is claimed, under the facts of the case, the company may . also be regarded as a citizen of Ohio.
If it be assumed that a corporation, within the meaning of the federal judiciary act, may be a citizen of more than one state, do the facts developed by the record in this case warrant a conclusion that the company is such citizen of this state?
It is not pretended that its existence as a corporation depends in any manner upon the legislation of this state ; but the claim for regarding the company as a citizen of Ohio is based wholly upon the fact that the company has leased and operates a railroad in this state, owned by another railroad company, which is a corporation created by the State of Ohio, whose corporate existence and powers are in nowise affected by the lease.
BALTIMORE & Ohio RAILROAD Co. v. CARY.
It is, then, nothing more than the case of a foreign corporation leasing, possessing, and operating, in this state, the property of a domestic corporation, which does not necessarily constitute the lessee, though a corporation, a citizen of Ohio, for judicial purposes, any more than the same transaction with an individual, being and remaining a citizen of another state, would have that effect.
A corporation is never regarded as a citizen of a state other than that to which it, at least in some measure, owes its being. If, therefore, the corporate existence of this company in no sense depends upon the laws of Ohio, it cannot be regarded as a citizen of the state.
It was held by the supreme court of this state in State v. Sherman, 22 Ohio St. 411, that a corporation of another state, though by purchase lawfully vested with the property and all the franchises of a corporation created by this state, without a new organization as a corporation of Ohio, does not become an Ohio corporation; much less would a foreign corporation be constituted an Ohio corporation by becoming the mere lessee of the property of a domestic corporation. The Baltimore and Ohio Railroad Company cannot, therefore, be held to be an Ohio corporation, nor, on that ground, a citizen of this state.
Moreover, it has long been the policy of this state, as manifested by both its judicial and legislative departments, to recognize and protect foreign corporations, in owning property and doing business in this state, under corporate powers derived from their respective states. In State v. Sherman, before referred to, it was held that "under the present laws of Ohio, foreign railroad corporations, whose roads lie partly in this state, are accorded the right to own, operate, and maintain their roads in Ohio, in the same manner as domestic railroad companies.”
That foreign corporations, allowed to own property and do business in Ohio, are not considered as citizens of the state is evinced by legislative enactments, in some instances requiring them, as a condition precedent to their right to do business in the state, to waive their right, as citizens of other states, to remove cases brought against them in the state courts to the federal courts.
The act authorizing the leasing and operating of railroads in this state by foreign railroad corporations expressly provides that such leasing and operating shall be regarded as a waiver of their right, as citizens of other states, to avail themselves of the jurisdiction of the federal courts.
So far, then, from regarding a foreign railroad corporation, leasing and operating a railroad in this state, as a citizen of the state, the legislature expressly recognizes it to be a citizen of another state, and provides against the exercise of its rights, as such foreign citizen, in this state.
After all, the question of federal jurisdiction, dependent upon the citizenship of the parties, like all questions relating to such jurisdiction, must be controlled by the decisions of the federal court of last resort. Insurance Co. v. Dunn, 19 Wall. 214; Insurance Co. v. Morse, 20 Wall. 415. In the light of these decisions, we are constrained to hold that, with reference to the jurisdiction of the federal courts, the Baltimore and Ohio Railroad Company, as a corporation of the State of Maryland, is a citizen of that state ; that as such corporation, it could not migrate, but might, it permitted by its charter, exercise its faculties in Ohio, in accordance with