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poses of this action, as a citizen of Wisconsin. But it is said, and here the objection to the jurisdiction arises, that the defendant is also a corporation under the laws of Illinois, and therefore is also a citizen of the same state with the plaintiff. The answer to this proposition is obvious. In Wisconsin, the laws of Illinois have no operation. The defendant is a corporation, and as such a citizen of Wisconsin by the laws of that state. Being there sued, it can only be brought into court as a citizen of that state, whatever its status or citizenship may be elsewhere." 13 Wall. 283.

Referring to the case of the O. & M. R. R. Co. v. Wheeler, the court says, that neither state could confer on the company corporate existence in the others, nor add to or diminish the powers then exercised, and although composed of and representing under the corporate name the same natural persons, yet its legal entity, which existed by force of law, could have no legal existence beyond the state which brought it into life, and endowed it with its faculties and powers.

Here was a corporation with a continuous line of road and principal office, where all its corporate powers were exercised in one state, but owing its right to operate the road to the legislation of several states through which it passed, held to be a citizen of any one of such states where, by the law authorizing it to do so, it could be sued. In Lafayette v. French, 18 How. 404, it was held that a state could impose on a foreign corporation, as a condition to its doing business in such state, that it should be liable to be sued therein; and the court say, "being sued there, it can only be brought into court as a citizen of that state, whatever its status elsewhere." We think this case is decisive of the one at bar. In both cases, the court looks to the state which endowed the corporation with its faculties and powers and where it may be sued, to determine its citizenship regardless of its status elsewhere.

In The B. & O. R. R. Co. v. Gallahur, 12 Gratt. 655, it was held that the Baltimore and Ohio Railroad Company was a Virginia corporation by virtue of the legislation of that state, wherein it was provided (after reciting the charter of the company as enacted by the State of Maryland), that the corporation thus created should have all the rights and be subject to all the obligations in Virginia, as conferred or imposed on the company in the State of Maryland.

So, in Maryland v. The Northern Central R. R. Co. 18 Md. 193, it was held that a corporation owing its existence in part to the State of Maryland, and in part to the State of Pennsylvania, formed by the consolidation of corporations existing by separate acts of those states, and exercising its franchises and owning and operating its line of road in each state, must, for the purposes of justice, be regarded in the courts of each state from which it derives its being as a domestic corporation to the extent of the state in which it acts, and as a foreign corporation as to the other sources of its existence.

Where there was one corporation, owning and operating a continuous line of railway through two states, formed by uniting two distinct corporations, one created by each state, and both united by the acts of the two states, it was held that this constituted it a domestic corporation of each of the states. Sprague v. The H. P. & F. R. R. Co. 5 R. I. 233.

In Goshorn v. Supervisors, 1 West Va. 308, the Hempfield Railroad

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Co. was incorporated by Pennsylvania to build a road from Greensburg, in that state, to the boundary line; and the State of Virginia afterward authorized it to extend its road to Wheeling, in the latter state.

It

It was held that the act of Virginia conferred on the Hempfield company such rights and privileges as to make it a Virginia corporation. is said no particular or precise form of words is necessary to the creation of a corporation, but it may result from implication and intendment.

It is laid down in the text-books that no particular form of words is essential to create or confer corporate power. Any language, clearly manifesting the legislative intent, whether in general terms or by special enactment is sufficient. Angel & Ames on Corp.

It is also now well settled, that the lease of the franchises and property of one railroad corporation by another in Ohio does not confer on the lessee powers not possessed by the lessor.

This question was directly before the supreme court in Campbell v. M. & C. R. R. Co. 23 Ohio St. 168. There the M. & C. R. R. Co., which had been constructed under a special charter granted in 1845, had, under section twenty-four of the general corporation law of May 1, 1852 (which is the same law under which the present lease was made), purchased the Scioto and Hocking Valley Railroad, which had been constructed under the law of 1848. The vendee claimed the right to operate the road under its own charter, and not under the charter of the vendor.

The question before the court was, whether the purchased road was governed, as to rates for transportation, by the law under which it was built, the Act of 1848, or by the law governing the M. & C. R. R.

The twenty-fourth section provides for leasing as well as purchasing, and the same rules must be applicable to both. It is said: "As the power of the purchasing company to receive tolls, as conferred by its own charter, is limited to roads constructed under its charter, it must be inferred that the legislature intended the purchasing company to succeed to the powers and privileges of the vending company, and to none other. . . by a sale of the road no greater rights therein can pass to the vendee than were owned by the vendor."

That

The same is equally true as between lessor and lessee under the same statute.

This question, as between lessor and lessee, was decided in The Penn. R. R. Co. v. Sly, 65 Penn. St. 205, where it was held, that the Pennsylvania R. R. Co. leasing the road of the Philadelphia and Erie Railroad Co., with all their rights, powers, and privileges, was not subject to the charges fixed by its own charter, but to the regulation in the charter of its lessors. It is said: "By a lease a corporation as well as a natural person would succeed to all the rights and be subject to all the limitations imposed on the lessor," and that "the lessee is the assignee, for a term or period, of the lessor, and is his bailiff to hold possession for him." "The legislature, by authorizing another corporation to take such lease, have, by necessary implication, conferred them."

Both reason and authority establish the proposition that the vendor or lessee of a railroad derives all its powers and franchises to operate the road from the charter and legislative provisions conferred on the vendor or lessor.

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The B. & O. R. R. Co. derives all its powers to lease and operate this road from the State of Ohio. Its Maryland charter was inoperative here. It can do no act as a corporation except such as the Central O. R. R. Co. was authorized to do.

From a careful analysis of the foregoing cases, the following rules are deducible :

1. That a corporation created by the laws of a given state, as a legal entity, can have no legal existence outside of that state; and that if the state of its creation permits or authorizes it to transact any of its corporate business outside of such state, it can only exercise such extra-territorial powers by the license or permission of other states, or under principles of comity between states.

2. That where such a corporation, deriving all its corporate power to act from the state of its creation, exercises these granted powers in other states, it is conclusively presumed to be a citizen of the state of its creation for the purposes of determining the jurisdiction of the United States.

3. But where a corporation, as for instance a railroad company, created by the separate but concurrent acts of two or more states, and by each is authorized to construct a road in each state, making together one continuous line of road, all operated by one corporation, with one board of officers, and one place of business in one of such states; it is nevertheless a citizen of each of the states granting it such powers, and in which it may be served.

4. So, where existing corporations of different states, owning and operating roads in their respective states, are authorized by their respective states to consolidate and form one company, the latter takes the place of each original company, and is, as to that part of the road and business in any one of the states, a citizen of that state, whatever may be its status in the other state or states.

That where the matter in controversy is the result of the exercise of its franchises in any one of such states, it is an inhabitant and citizen of that state if by the law of that state it can be served there.

5. Where a corporation originally created by one state, with authority to construct and operate a road therein, is authorized by another state to extend its road through the latter state, or to purchase or lease such a road already constructed, it thereby becomes a corporation of such latter state, as to all exercise of corporate powers therein. Its powers and franchises are measured by the laws of the state wherein it exercises its functions, and not by those of the state of its original creation.

6. Apply these principles to the case at bar. The lessee succeeds only to the powers and franchises of the lessor, and is subject to the same liabilities. All these are derived from the laws governing the Central Ohio Railroad Company as reorganized. By the lease they were transferred to the Baltimore and Ohio Railroad Company. It was thus clothed with authority to own and operate a road in Ohio. It conferred on a corporation, originally created by the State of Maryland, the right to be a corporation in Ohio.

In legal effect, it was an authority to an existing foreign corporation to become an Ohio corporation, and enjoy the corporate powers conferred on the Central Ohio Railroad Company.

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It was a legislative authority for a foreign corporation to become an Ohio corporation by lease or purchase from a domestic corporation its charter and property, with all its powers, immunities, and privileges. The lessee became the bailiffs of the lessor for part of the term of the lessor, and therefore stands in his stead. Co. Lit. 239 b, note 2.

The legislature adopts a corporation of another state, so far as to permit it to take the place of one created by Ohio law. Instead of requiring the stockholders of the Maryland corporation to take out a certificate and become a de jure corporation under our statute, it permits a corporation already formed to dispense with this step in the creation of a domestic corporation to become such under its existing name.

It is claimed that the case of Ohio ex rel. v. Sherman, 22 Ohio St. 411, is in conflict with the conclusion here reached, but a careful examination of the issue there presented will show that such is not the fact.

There the question was by what authority certain persons were assuming to act as directors of the Pittsburg, Ft. Wayne, and Chicago Railway Company, which was the owner of and operating a road through the state. That company was the vendee or grantee of the road and franchises of the Pittsburg, Ft. Wayne, and Chicago Railroad Company, which had been formed by the consolidation of distinct companies and roads existing by the laws of Pennsylvania, Ohio, Indiana, and Illinois. The road, while owned by the consolidated company, was sold by order of court, and passed to the Pittsburg, Ft. Wayne, and Chicago Railway Company.

The inquiry was based on the expressed assumption that the consolidated company was an Ohio corporation, and the real question was, did the conveyance pass to the railway company its right to be an Ohio corporation? The court held that this deed of conveyance, made under the Act of 1863 to this Pennsylvania corporation, did not transfer the right of the Pittsburg, Ft. Wayne, and Chicago Railroad Company, an Ohio corporation, to be an Ohio corporation, because the law of 1863 did not provide for the individual liability of its members.

But for this it is implied, though not expressed, that this is the only reason why it is not a legal corporation of Ohio. The whole reasoning of the court rests upon this ground. It is held that the transfer of the franchises to be a corporation under the Ohio law was in legal effect a surrender of the old charter and taking out a new, similar to the grantee; but as such grant of this new charter could not be made, except incumbered with the individual liability imposed by the Constitution of Ohio, and as this was not done, the grantee was not a "legal Ohio corporation."

But for this constitutional provision there can scarcely be a doubt the court would have held that this transfer of the franchise and property of the Pittsburg, Ft. Wayne, and Chicago Railroad Company to the Pittsburg, Ft. Wayne, and Chicago Railway Company, under Ohio laws, made the vendee an Ohio corporation, as was held in the numerous cases cited.

There, the real question was, whether, by the deed of conveyance, under the Act of 1863, the vendees became an Ohio corporation. The answer is in the negative for the reason stated, and not because, upon com

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BALTIMORE & OHIO RAILROAD CO. v. CARY.

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mon law principles, it was not competent for the legislature, in the absence of the constitutional provision, to authorize such transfer.

In the case at bar, the question of individual liability is wholly immaterial to the question at bar.

Here, the sole question is, whether the defendant, within the meaning of the Constitution of the United States, is in fact a citizen of Ohio.

This does not depend on individual liability clauses, or absence of them, in state constitutions, but on the meaning of the word citizen as found in the judiciary article of the Constitution of the United States. Upon the facts stated, there can be no doubt that, under the rules laid down in O. & M. R. R. Co. v. Wheeler, and in Railway v. Whitten, and the numerous other cases cited, the Pittsburg, Ft. Wayne, and Chicago Railway Company was in fact a citizen of each of the states through which its road runs, and from which it has derived its corporate powers within such state. And upon the question of jurisdiction of the federal courts, this corporation is in fact an inhabitant and citizen of each of such states, although, under the peculiar provisions of the Constitution of Ohio, it is not de jure a domestic corporation.

Again, it is said the decision of this court, in Passenger Ass'n Co. v. Pierce, 27 Ohio St. 155, controls this case. That case follows that of

Insurance Co. v. Morse, 20 How. (U. S.) 455.

Both these cases turn on the validity of an act of a state requiring a foreign corporation to waive its right, as a citizen of another state, to remove a case to the federal courts.

In both, the foreign citizenship is admitted, and the right of a state to exact a waiver of such citizenship was the only point.

Here the foreign citizenship is denied, and the claim is made that it is a domestic citizen. The question of waiver does not arise upon the record in the case before us.

Again, those cases were unlike this. They were all cases of foreign corporations, exercising in other states, through courtesy or by legislative permission, the powers and franchises conferred by the state of their creation. They derived none of their corporate franchises from the state where doing business, but acted entirely under their home charters, while in this case they derive none of their powers from their home charters, but all from the state where the business is done.

But for that provision of our Constitution as to the individual liability of stockholders, there can be no doubt that the plaintiff in error became a de jure as well as a de facto domestic corporation, subject to the sovereign control of the state as fully as the lessor corporation. It assented to the legislation authorizing it to have and operate the road under its Ohio charter. By this legislation a condition was imposed that it might be sued in Ohio. It thus, to all intents, became de facto, if not de jure, an Ohio corporation a citizen of Ohio-as fully as if the stockholders of this Maryland corporation had taken out an Ohio charter. For these reasons the judgment of the common pleas and district court should have been affirmed.