Northern Indiana Railroad Company v. Michigan Central Railroad Company/Separate Catron

by John Catron

United States Supreme Court

56 U.S. 233

Northern Indiana Railroad Company  v.  Michigan Central Railroad Company

Mr. Justice CATRON.

The Northern Indiana Railroad Company and the Railroad Commissioners for the Western Division of the Buffalo and Mississippi Railroad Company, filed their bill against the Michigan Central Railroad Company, in the Circuit Court of the United States in the District of Michigan, seeking an injunction against the defendant to prevent the Michigan company from laying down and using a railroad around the southern end of Lake Michigan, and within the State of Indiana; which road crosses the road of the complainants, and runs near to, and parallel with it, and, as the complainants allege, will materially withdraw their profits. And the complainants insist that they have a monopoly by their charter to construct the only road near to and around the southern end of the lake, and that the defendant has violated the chartered rights secured to the complainants.

The bill was demurred to, and the demurrer was sustained by the Circuit Court. The first cause of demurrer set forth is, that the complainants have not, by their bill, made such case as entitles them to any discovery or relief against the defendant as to the matters contained in the bill, or any of them; and the judgment of the court is prayed whether the defendant shall be compelled to make further answer; and, on this state of pleadings, the question standing in advance of all others is, whether the Circuit Court had jurisdiction to entertain the bill, as between these parties, independent of the merits of the case set forth. The bill alleges that the Northern Indiana Railroad Company, and the Commissioners of the Buffalo company were, severally, corporations created by the State of Indiana, and were doing business in said State according to their charters; 'and are, in meaning and contemplation of the Constitution and laws of the United States, citizens of the State of Indiana, and entitled to be deemed and taken as such citizens for all the purposes of suing and being sued, and for the purposes of this bill of complaint.'

A corporation is composed of many individual members, having a joint interest, and a joint right to sue in their corporate name; and the consideration here presented is, whether a State law, creating the corporation, makes such corporation 'a citizen,' according to the Constitution, regardless of the fact where its members reside. If the corporation be such citizen, then every member of the corporate body might reside in Michigan, and yet have the right to sue citizens of Michigan there in the United States court.

The Constitution gives jurisdiction to the courts of the Union, 'between citizens of different States.' Now, if it be true, that corporations-such as for making roads, &c.-be citizens in the established sense of the Constitution, it must have been thus settled in the case of the Louisville Railroad Company v. Letson, 2 How. 497; as, previous to that decision, (made in 1844,) this court did not suppose that a corporation was a citizen. Nor was any such question presented in Letson's case; far from it.

Letson sued the railroad company in covenant, by their corporate name, distinctly averring that the members of the company were citizens of South Carolina, and that the plaintiff was a citizen of New York.

The defendant pleaded in abatement, that Rutherford and Baring, two of the stockholders, were citizens of North Carolina; and that the State of South Carolina was also a stockholder. To this plea there was a demurrer, which was sustained in the Circuit Court and in this court.

It was held, 1. That the State could not object, as she stood on the foot of every other individual stockholder and need not be sued; and,

2. That fugitive stockholders, who were changing every day, and quite too numerous to be included in a suit, need not be made parties of record.

This, from the report of the case, seems to have been the unanimous opinion of the members of this court, who were present at the time; certainly it was my opinion.

The president and directors of the railroad company were alleged to be, and admitted to be by their plea, citizens of South Carolina; they represented the stockholders, and were their trustees, and whose acts were binding on the stockholders. This state of parties conformed to the act of Congress of 1839, and the spirit of the 47th, 48th, 49th, and 50th rules for the government of chancery practice in the federal courts, adopted in 1842.

It is now assumed, that Letson's case overruled the decision in Strawbridge v. Curtis, 3 Cranch, 276. That decision undoubtedly proceeded on the true rule.

There were various complainants to a bill in equity; and the bill alleged that some of the complainants were citizens of Massachusetts, where the suit was brought; and that the defendants were also citizens of Massachusetts, except Curtis, who was stated to be of Vermont, and a subpoena was served on him in that State. There, it was held, 'that each distinct interest should be represented by persons, all of whom are entitled to sue, or may be sued, in the federal courts.' A bill thus framed could not at this day be treated seriously.

The next case supposed to be in conflict with Letson's case is that of the United States Bank v. Devereux, 5 Cranch, 61. The old Bank of the United States sued Devereux and Robertson, in the Circuit Court of Georgia, alleging that it was a corporation established under an act of Congress of 1791; and alleging, further, that the petitioners, the President, Directors, and Company of the Bank of the United States, were citizens of the State of Pennsylvania; and that Devereux and Robertson, the defendants, were citizens of Georgia; and this averment was held sufficient by the court.

That Letson's case overruled that of the R. R. Bank of Vicksburg v. Slocum and others, is true; and it was justly overruled, as I think. Slocum, Richards, & Company sued the Bank, alleging that they were citizens of Louisiana, and that the President, Directors, and Company of the Bank were citizens of Mississippi. The Bank pleaded in abatement, that Lambeth and Thompson, two of the stockholders, were citizens of Louisiana. And this court sustained that plea; whereas, according to Letson's case, it was quite immaterial where the stockholders resided, so that the president and directors were citizens of the State where the suit was brought.

What a corporation is, was very fully discussed in Devereux's case (5 Cranch); nor will I discuss it further here, as I do not feel called on to prove, to the legal profession of this country, that a corporation is not a citizen. And as no averment is made in the bill before us, that the president and directors of the corporations suing, are citizens of different States from the president and directors of the corporation sued, I think the demurrer ought to be sustained, and the court below instructed to dismiss the bill.

I view this assumption of citizenship for a corporation as a mere evasion of the limits prescribed to the United States courts by the Constitution. The profitable corporations are owned in a great degree in the cities; there the president and directors often reside; whilst the charter was granted in another State, and there the owners keep an agency, the business being in fact conducted in the city.

Now these owners and directors may sue their next neighbors of their own State and city, in the United States courts, according to the rule that the corporation is a citizen of the State where is was created, and that jurisdiction depends on this sole fact.

Could I consent to pronounce from this bench an opinion deemed by myself extrajudicial, and, therefore, without authority, I might attempt an argument to expose the irregularity and impotence of an adjudication confined, by law, within prescribed geographical limits, with respect to subjects purely local, whenever it should be attempted to extend the operation of such adjudication beyond the locus to which the law has allotted it. For of this character has been the action of the Circuit Court upon the controversy of these two corporations now before us. The Northern Indiana Railroad Company, incorporated by the State of Indiana, have complained of an invasion of their local rights, a tort to real property situated within the territory of Indiana, by a company incorporated by, and situated within, the State of Michigan; and the Circuit Court for the State of Michigan, limited in its cognizance of local matters to the territory of that State, has undertaken to adjudicate upon the merits of this complaint. But irregular and futile as is the action of the Circuit Court of Michigan, and as it is by all here admitted to have been, can it have been more irregular than is the undertaking, on the part of this tribunal, to pronounce authoritatively upon the character of the acts, or the relative rights and powers of the parties, over which the Circuit Court of Michigan has claimed cognizance? Is not the warrant for cognizance by the Circuit Court and by this tribunal essentially, nay, precisely, the same? Are they not both to be found, if existing at all, in the Constitution of the United States? And is it not indispensable that such cognizance should be regularly and certainly vested in the Circuit Court, before this court can sanction its validity? If it be asked, by what provision of the Constitution the Circuit Court could assume jurisdiction of the present controversy, it must, of necessity, be referred to that (2d sec. 3d Art.) provision which extends the judicial power to controversies between citizens of different States. This, indeed, is admitted; and the admission carries with it inevitably the implication that a corporation can and must, for certain purposes, become a citizen, and must, ex necessitate, possess the attributes of citizenship in order to obtain access to a court of the United States. Having, on a former occasion, (vide the case of Rundle et al. v. The Delaware and Raritan Canal Company, 14 Howard, 95,) endeavored to expose the incongruities involved in, and incident to, this anomalous conception, I will not now attempt a further enumeration of them beyond this obvious remark,-that citizenship and corporate existence, created by State authority, being decreed by this court to be, to some extent at least, identical, as must be the case to authorize this court to call the parties before them, it must follow that, to the same extent, a corporation can be a citizen, and a citizen can become a corporation. The process by which the latter transformation may be accomplished has not yet been pointed out. We are told, by the English jurists, and by the decisions of the English courts, and so, too, in the case of the Bank of the United States v. Devereux, it is laid down by Marshall, C.J., that a corporation is an invisible, intangible, artificial creature. In one sense, at least, the citizen may render himself invisible and intangible-he may abscond. In what signification he must become artificial, amongst the infinite varieties which may be imagined, will present a question more difficult to be determined. But in the possession of a portion even of his corporate attributes, the citizen may be deemed a quasi corporation, when it shall be thought convenient; and will, doubtless, in that chrysalis condition, furnish as just a representation of the integral legal entity, as the latter, in the shape of quasi citizen, can ever supply of the real, material, and social being with whom it is sought to identify it.

Powerless and vain as probably ever will be the 'still small voice' of an humble individual, in opposition to the united declaration of those justly considered the learned and the wise, still, under the most solemn conviction of duty, the effort can never be forborne to raise that humble voice in accents of alarm at whatever is believed to threaten even the sacred bark in which the safety both of the States and of the United States is freighted. I hold that, beyond the Constitution of the United States, there is no federal government, either in the mass or in the detail. That beyond the pale and limits prescribed by that instrument, to be interpreted, not by indirect or ingenious or forced constructions, or by remote implications, but by the plain and common-sense import of its language, a language familiar to the common and general understanding, all is unwarranted assumption and wrong-a termination of all legitimate federal power. Whilst therefore I profess, as I really feel, my belief in the wisdom and purity of those who think themselves justified in what I regard as an infringement upon the terms and objects of our only charter, I am constrained to record my solemn protest against their doctrine and their act.

On these grounds I dissent from the opinion just pronounced, and think that this cause should have been remanded to the Circuit Court, with directions to dismiss it, as one over which the courts of the United States can have no jurisdiction with respect to the parties.