National Steam-Ship Company v. Tugman/Opinion of the Court

by by John Marshall Harlan

United States Supreme Court

106 U.S. 118

National Steam-Ship Company  v.  Tugman

The underlying question in this case is whether, within the meaning of the constitution and of the statutes determining the jurisdiction of the circuit courts of the United States, and regulating the removal of causes from state courts, a corporation created by the laws of a foreign state may, for the purposes of suing and being sued in the courts of the Union, be treated as a 'citizen' or 'subject' of such foreign state.

In Ohio & M. R. Co. v. Wheeler, 1 Black, 296, the court, speaking by Chief Justice TANEY, said that, in the previous case of Louisville, C. & C. R. Co. v. Letson, 2 How. 497, it had been decided, upon full consideration, '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 the contrary is admissible for the purposes of withdrawing the suit from the jurisdiction of a court of the United States.' Marshall v. Baltimore & O. R. Co. 16 How. 314; Covington Drawbridge Co. v. Shepherd, 20 How. 232; Ins. Co. v. Ritchie, 5 Wall. 542; Paul v. Virginia, 8 Wall. 178; Railroad Co. v. Harris, 12 Wall. 82.

To the rule, thus established by numerous decisions, the court adheres. Upon this branch of the case it is therefore only necessary to say that if the individual members of a corporation, created by the laws of one of the United States, are, for the purposes of suit by or against it in the courts of the Union, conclusively presumed to be citizens of the state by whose laws that corporation is created and exists, it would seem to follow, logically, that the members of a corporation, created by the laws of a foreign state, should, for like purposes, be conclusively presumed to be citizens or subjects of such foreign state. Consequently, a corporation of a foreign state is, for purposes of jurisdiction in the courts of the United States, to be deemed, constructively, a citizen or subject of such state.

But it is suggested that the petition for the removal of the action into the circuit court of the United States is radically defective, in that it does not show that the National Steam-ship Company was a corporation of a foreign state at the commencement of the action; that the allegation upon that point refers only to the time when the removal was sought. If, in suits in which the jurisdiction of the courts of the United States depends upon the character of the parties, it is material, under the act of March, 3, 1875, to show what the citizenship of the parties was at the commencement of the action, it is sufficient to say that the averment in the original complaint that the company is a foreign corporation, supplemented by the averment in the petition for removal that it is a corporation created by and existing under the laws of the united kingdom of Great Britain and Ireland, covers the whole period from the commencement of the action to the application for removal. It is not always necessary that the citizenship of the parties be set out in the petition for removal. The requirements of the law are met if the citizenship of the parties to the controversy sought to be removed is shown, affirmatively, by the record of the case. Ry. Co. v. Ramsey, 22 Wall. 322; Robertson v. Cease, 97 U.S. 648.

The only remaining question which need be considered is whether the jurisdiction of the state court was, in any form, restored, after the company filed its petition and bond for removal. The defendant in error insists that it was. The petition was accompanied by a bond which, it is conceded, conformed to the statute, and was ample as to security. Upon the filing, therefore, of the petition and bond,-the suit being removable under the statute,-the jurisdiction of the state court absolutely ceased, and that of the circuit court of the United States immediately attached. The duty of the state court was to proceed no further in the cause. Every order thereafter made in that court was coram non judice, unless its jurisdiction was actually restored. It could not be restored by the mere failure of the company to file a transcript of the record in the circuit court of the United States within the time prescribed by the statute. The jurisdiction of the latter court attached, in advance of the filing of the transcript, from the moment it became the duty of the state court to accept the bond and proceed no further; and whether the circuit court of the United States should retain jurisdiction, or dismiss, or remand the action because of the failure to file the necessary transcript, was for it, not the state court, to determine.

Nor was the jurisdiction of the state court restored when the company, subsequently, consented to the order requiring the issues to be heard and determined by a referee selected by the parties, or when it appeared and contested the case, as well before the referee as in the state courts, up to final judgment. The right of the company to have a trial in the circuit court of the United States became fixed upon the filing of the petition and bond. But the inferior state court having ruled that the right of removal did not exist, and that it had jurisdiction to proceed, the company was not bound to desert the case, and leave the opposite party to take judgment by default. It was at liberty, its right to removal being ignored by the state court, to make defense in that tribunal in every mode recognized by the laws of the state, without forfeiting or impairing, in the slightest degree, its right to a trial in the court to which the action had been transferred, or without affecting, to any extent, the authority of the latter court to proceed. The consent, by the company, to a trial by referee was nothing more than an expression of its preference-being compelled to make defense in the state court-for that one of the several modes of trial permitted by the laws of the state. It is true that when the cause was taken up by the referee, as well as when heard in the supreme court of the state and in the court of appeals, the company protested that the circuit court of the United States alone had jurisdiction after the petition and bond for removal were filed. But no such protests were necessary, and they added nothing whatever to the legal strength of its position. When the state court adjudged that it had authority to proceed, the company was entitled to regard the decision as final, so far as that tribunal was concerned, and was not bound, in order to maintain the right of removal, to protest, at subsequent stages of the trial, against its exercise of jurisdiction. Indeed, such a course would scarcely have been respectful to the state court after its ruling upon the point of jurisdiction had been made.

What we have said upon this subject is fully sustained by our former decisions, particularly Railroad Co. v. Koontz, 104 U.S. 5; Railroad Co. v. Mississippi, 102 U.S. 135; Kern v. Huidekoper, 103 U.S. 485; and Ins. Co. v. Dunn, 19 Wall. 214.

The judgments herein of the court of appeals of New York, and of the supreme court of New York, are reversed, and the cause is remanded, with directions that the latter court accept the bond tendered by plaintiff in error for the removal of the cause to the circuit court of the United States for the eastern district of that state, and proceed no further in the cause.

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