Railroad Company v. Koontz Railroad Company v. Funkhouser

• Citation: 26 L.Ed. 643,104 U.S. 5
• Parties: RAILROAD COMPANY v. KOONTZ. RAILROAD COMPANY v. FUNKHOUSER
• Decision Date: 01 October 1881
• Court: United States Supreme Court

104 U.S. 5

104 U.S. 5

26 L.Ed. 643

RAILROAD COMPANY v. KOONTZ.

RAILROAD COMPANY

v. FUNKHOUSER.

October Term, 1881

ERROR to the Supreme Court of Appeals of the State of Virginia.

These cases are substantially alike, and present the following facts:——

The Baltimore and Ohio Railroad Company was incorporated by the State of Maryland on the 28th of February, 1827, to build and operate a railroad from Baltimore, in Maryland, to some suitable point on the Ohio River. By the terms of the charter the annual elections of directors were to be held in Baltimore. On the 2d of March following, the State of Virginia granted the company the same rights and privileges in Virginia that had been granted to it in Maryland, except that no lateral road could be built in Virginia without the consent of the legislature, and the road was not to strike the Ohio at a point lower than the mouth of the Little Kanawha. Under this authority from the two States a road was built from Baltimore to Wheeling, in Virginia. When the State of West Virginia was formed, it took from Virginia all the territory occupied by the road in that State, and from that time no part of the original line has been within the present State of Virginia.

On the 20th of August, 1873, under a lease from the Washington City, Virginia Midland, and Great Southern Railroad Company, a Virginia corporation, of all its railroad lying between Strasburg and Harrisonburg, in Virginia, the Baltimore and Ohio company took the exclusive possession of and operated the leased property, using for that purpose the powers and franchises of the Virginia corporation. While so operating the leased road an accident happened to one of the passenger trains, which resulted in the death of several persons, whose administrators, the defendants in error, each of whom was a citizen of Virginia, thereupon brought in a State court of that State, under her statute, these suits to recover of the company damages for such death.

On the 2d of September, 1876, which is conceded to have been in time, the company filed its petitions in the State court for the removal of the cases to the proper Circuit Court of the United States, on the ground that the company was a citizen of Maryland and the several plaintiffs citizens of Virginia. The plaintiffs answered the petition in each case, denying that the company was a citizen of Maryland, and claiming that for all the purposes of these suits it was a citizen of Virginia. After hearing, the court refused to recognize the removal, because, as was held, by leasing and operating the road of the Virginia corporation under the Virginia charter, the company became, for all the purposes of that business, a citizen of Virginia. To this ruling exceptions were taken in due form and made part of the several records.

It nowthere appears that copies of the records of the State court were ever entered in the Circuit Court; but on the 19th of December, 1876, the company asked and obtained from the State court leave to plead, and in due time thereafter pleas of not guilty were put in. One case was tried in the State court on the 6th of April, 1877, another on the 10th of April, 1878, and the other on the 9th of December afterwards. Judgment was given in each case for the plaintiff. The company was represented at the trials, and exceptions of various kinds were taken. The causes were all carried to the Supreme Court of Appeals of the State, where the judgments were affirmed. The record in each case shows distinctly that errors were assigned on the ruling upon the petition for removal, and that the decision was adverse to the company. The cases are now here on writs of error.

For the purpose of suing and being sued, a corporation is a citizen of the State which created it, and it has no legal existence beyond her bounds. The presumption of law is that its members are all citizens of that State, and a suit by or against it is conclusively presumed to be by or against such citizens. No averment or evidence to the contrary is, therefore, admissible in order to defeat the jurisdiction of a court of the United States. It follows that a suit by or against the Baltimore and Ohio Railroad Company must, so far as the question of jurisdiction is involved, be considered as a suit by or against citizens of the State of Maryland. The Louisville, Cincinnati, & Charleston Railroad Co. v. Letson, 2 How. 497; Marshall v. Baltimore & Ohio Railroad Co., 16 id. 314; Ohio & Mississippi Railroad Co. v. Wheeler, 1 Black, 286; Railroad Company v. Harris, 12 Wall. 65; Railway Company v. Whitton, 13 id. 270. That company, by leasing and operating the road of a company incorporated by Virginia, did not become a citizen of that State. Baltimore & Ohio Railroad Co. v. Cary, 28 Ohio St. 208. Its right of removing a suit brought against it cannot be defeated by State enactments nor waived by implication, nor was it in this instance forfeited by the imputed laches of the company in regard to the filing in the Circuit Court of copies of the racord. The laches of which the defendants in error complain are the result of their efforts to defeat the acceptance by the State court of the petitions for removal. Their position is, therefore, inconsistent with their own acts.

A party entitled to removal who, notwithstanding his protests and exceptions, is held for the trial of his case in the State court loses none of his rights by his defence upon the merits. Gordon v. Longest, 16 Pet. 97; Kanouse v. Martin, 15 How. 198; Insurance Company v. Dunn, 19 Wall. 214; Removal Cases, 100 U. S. 457; Railroad Company v. Mississippi, 102 id. 135; Kern v. Huidekoper, 103 id. 485.

The prayer for the removal of these actions was properly denied. The plaintiff in error, by leasing and operating the road and exercising the franchises of a Virginia corporation, became a corporation of that State so far as the duties and responsibilities of the lessor and its liability to suit are concerned. Baltimore & Ohio Railroad Co. v. Gallahue's Adm'rs, 12 Gratt. (Va.) 655.

The doctrine of license and comity places a foreign corporation enjoying the license in a particular State upon substantially the same ground as if it were actually and originally created by such State, and determines its citizenship in respect to its right of removal of a suit pending against it. Lafayette Insurance Co. v. French, 18 How. 404; Bank of Augusta v. Earle, 13 Pet. 519; State v. Northern Central Railway Co., 18 Md. 193; Sprague v. Hartford, & c. Railroad Co., 5 R. I. 233; Pomeroy v. New York & New Haven Railroad Co., 4 Blatchf. 120; Continental Insurance Co. v. Kasey, 27 Gratt. (Va.) 216.

The right to remove these cases, if it ever existed, was lost by the failure of the company to file in the Circuit Court, on the 'first day of its then next session,' a copy of the records. Cobb v. Globe Mutual Insurance Co., 3 Hughes, 452; Removal Cases, 100 U. S. 457; Kern v. Huidekoper, 103 id. 485; Dillon, Removal of Causes, pp. 102-105.

Mr. Hugh W. Sheffey and Mr. E.J.D.Cross for the plaintiffs in error.

Mr. John Randolph Tucker and ,Mr. Moses Walton, contra.

MR. CHIEF JUSTICE WAITE, after stating the facts, delivered the opinion of the court.

The questions presented for our consideration are: 1. Whether a case for removal was made by the company; and, 2, if it was, whether, as it does not appear affirmatively that copies of the records have been entered in the Circuit Court, the company has lost its right to have the judgments reversed for the original errors in that behalf.

The Court of Appeals in Virginia held, as early as 1855, in Baltimore & Ohio Railroad Co. v. Gallahue's Adm'rs (12 Gratt. (Va.) 655), that the Baltimore and Ohio company could be sued in Virginia, and in the course of the opinion said that the effect of the Enabling Act of Virginia was to make the company a Virginia corporation as to its road within the territory of Virginia. Afterwards, in 1870, this court decided, in Railroad Company v. Harris (12 Wall. 65), that the company could be sued in the District of Columbia, into which a lateral road had been built with the consent of Congress, given through an enabling act much like that of Virginia. In that case we held the company to be a Maryland corporation only, and that no new corporation had been created by the Enabling Act either of Virginia or the District of Columbia. The ruling in the Virginia case was followed by the Supreme Court of Appeals of West Virginia in Goshorn v. Supervisors (1 W. Va. 308) and Baltimore & Ohio Railroad Co. v. Supervisors (3 id. 319), both of which cases were decided before Railroad Company v. Harris, in this court. That question is, however, unimportant here, as it is conceded that the part of the road originally in Virginia is now in West Virginia, and that the company no longer uses in Virginia any of the franchises conferred by the Enabling Act of that State. Neither the Court of Appeals nor counsel here make any claim on account of that legislation. Even conceding that the company was once a Virginia corporation, so far as its original road in that State was concerned, the most that can be said of it now is, that, in common with all citizens of the old State residing on the ceded territory, its citizenship was transferred by the organization of West Virginia from the old State to the new. Consequently, if it was once a corporation of Maryland and Virginia, it is now a corporation of Maryland and West Virginia. Any citizenship it may have had in Virginia has been lost.

It is not contended that this Enabling Act gave the company a right to lease another Virginia road and operate it as a lateral road, nor that in running the leased road the company uses any of the franchises conferred by the original grant. The present claim is that, by using the franchises of another Virginia corporation to run its leased road, it made itself a corporation of Virginia for all the purposes of that business, just...