Pennsylvania Co v. St Louis Co St Louis Co v. Indianapolis St Ry Co

• Decision Date: 26 April 1886
• Citation: 118 U.S. 290,30 L.Ed. 83,6 S.Ct. 1094
• Parties: PENNSYLVANIA R. CO. and others v. ST. LOUIS, A. & T. H. R. CO. ST. LOUIS, A. & T. H. R. CO. v. INDIANAPOLIS & ST. L. RY. CO. and others. Filed
• Court: U.S. Supreme Court

118 U.S. 290

6 S.Ct. 1094

30 L.Ed. 83

PENNSYLVANIA R. CO. and others v. ST. LOUIS, A. & T. H. R. CO.

ST. LOUIS, A. & T. H. R. CO.

v. INDIANAPOLIS & ST. L. RY. CO. and others.

Filed April 26, 1886.

[Syllabus from pages 290-291 intentionally omitted] Mr. John M. Butler and Mr. Joseph E. McDonald for St. Louis, Alton & Terre Haute Railroad Company.

[Argument of Counsel on pages 291-294 intentionally omitted] John T. Dye, Stevenson Burke, and Ashley Pond, for Pennsylvania R. Co. and others, and Indianapolis & St. L. R. Co. and others.

John M. Butler and J. E. McDonald, for St. Louis, A. & T. H. R. Co.

MILLER, J.

These are cross-appeals from a decree of the circuit court for the district of Indiana. The suit was brought in that court by a bill in chancery, filed by the St. Louis, Alton & Terre Haute Railroad Company, alleging that it was a corporation organized under the laws of the state of Illinois, and a citizen of that state, against the Indianapolis & St. Louis Company, a corporation similarly organized under the laws of the state of Indiana, and a citizen of that state, and against the other corporations mentioned in the bill, as citizens of Indiana, or of other states than the state of Illinois. A final decree was rendered in favor of plaintiff for the sum of $664,874.70, with costs, and an injunction against several of the defendants, from which both complainants and defendants in the court below have appealed.

1. The first question arising on the record is that of the jurisdiction of the circuit court of the Indiana district, as founded on the citizenship of the parties. This question was raised at an early stage of the controversy by a distinct plea to the jurisdiction, and was overruled by the court. Afterwards, and before the decree, the defendant corporations who had filed this plea withdrew it, and desired to have the case decided on the merits. As it is not competent to any parties to confer jurisdiction on the circuit court by a waver of objections to it, the question is one which lies at the threshold of any further proceeding, and must be decided. The objection arises out of the admitted fact that the Indianapolis & St. Louis Railroad Company is a corporation organized under a statute of Indiana, and is a necessary party to the suit, and the assumption that the St. Louis, Alton & Terre Haute Railroad Company is organized under laws of both Illinois and Indiana, and is therefore a citizen of the latter state, as is its principal opponent in the controversy. The complainant company owns a road extending from the Mississippi river, opposite St. Louis, to Terre Haute, Indiana, of which only a very few miles—10 or 12—are within the state of Indiana. The controversy grows out of a lease of this road by the complainant company to the Indianapolis & St. Louis Company. As the complainant company was chartered originally by the state of Illinois, and is undoubtedly a citizen of that state, and in that character would have the right to sue the other companies in the circuit court for Indiana, do the other facts in the case defeat this right by making it also a citizen of Indiana?

It does not seem to admit of question that a corporation of one state, owning property and doing business in another state by permission of the latter, does not thereby become a citizen of this state also. And so a corporation of Illinois, authorized by its laws to build a railroad across the state from the Mississippi river to its eastern boundary, may, by the permission of the state of Indiana, extend its road a few miles within the limits of the latter, or, indeed, through the entire state, and may use and operate the line as one road by the permission of the state, without thereby becoming a corporation or a citizen of the state of Indiana; nor does it seem to us that an act of the legslature conferring upon this corporation of Illinois, by its Illinois corporate name, such powers to enable it to use and control that part of the road within the state of Indiana as have been conferred on it by the state which created it, constitutes it a corporation of Indiana. It may not be easy, in all such cases, to distinguish between the purpose to create a new corporation which shall owe its existence to the law or statute under consideration, and the intent to enable the corporation already in existence under laws of another state to exercise its functions in the state where it is so received. The latter class of laws are common in authorizing insurance companies, banking corpanies, and others to do business in other states than those which have chartered them. To make such a company a corporation of another state, the language used must imply creation or adoption in such form as to confer the power usually exercised over corporations by the state, or by the legislature, and such allegiance as a state corporation owes to its creator. The mere grant of privileges or powers to it as an existing corporation, without more, does not do this, and does not make it a citizen of the state conferring such powers. In a case where the corporation already exists, even if adopted by the law of another state, and invested with full corporate powers, it does not thereby become such new corporation of another state until it does some act which signifies its acceptance of this legislation, and its purpose to be governed by it.

We think what has occurred between the state of Indiana and this Illinois corporation falls short of this. The origin of this corporation was a special act of the Illinois legislature of January 28, 1851, chartering the Terre Haute & Alton Railroad Company to construct a road from the state line, near Terre Haute, to Alton; and by an act of the Indiana legislature, passed a few days later, this Illinois corporation was permitted to extend its road through Indiana to Terre Haute. Some changes took place in the name and power of this company by statutes of Illinois, but none which affected its powers derived from the Indiana statute of February 11, 1851. But the property of the corporation was sold out under foreclosure of a mortgage to Robert Bayard, Samuel J. Tilden, Russell Sage, and others, who, under an act of the Illinois legislature, reorganized the purchasers into the corporation called the St Louis, Alton & Terre Haute Railroad Company, which is the present company, and which, by the Illinois statute, succeeded to all the franchises of the original Terre Haute, Alton & St. Louis Company. As these included all the powers necessary to operate the few miles of the road in Indiana under the act of February 11, 1851, it was unnecessary to seek an act of incorporation from that state. It appears, however, that Bayard, Tilden, and their associates did file in the office of the secretary of state of Indiana a certificate of the organization of the new company, with the names of the first directors of it, who were to serve until 1863; and it is argued that this made the st. Louis, Alton & Terre Haute Company a corporation of the state of Indiana. A critical examination of this certificate renders it very doubtful whether that was its purpose, but rather indicates that it was intended to secure and perpetuate the rights granted to the Terre Haute & Alton Company by the act of February 11, 1851. At all events, no evidence exists of the agreement of the new Illinois company to accept of or act under this attempt at organization under Indiana laws. They never held an election for directors of the Indiana corporation, if one existed, and they never in any other manner recognized the existence of an Indiana corporation of the same name.

Without going into the question whether the plaintiff in this case, if it were clearly a corporation of both states, could maintain this suit in the circuit court under the decisions in this court, we are satisfied that, with reference to its right to sue as a citizen of Illinois, it is not, also, a corporation and citizen of Indiana, under the facts found in this record.

As regards the asserted existence of the Indianapolis & St. Louis Company, under the law of Illinois, by which it is asserted to be a citizen of the same state with plaintiff, the objection is the same as that which was overruled in Railway Co. v. Whitton, 13 Wall. 270, and in Muller v. Dows, 94 U. S. 444.

2. The next objection to the decree is that the bill does not present a case for equitable relief, and should have been dismissed for want of jurisdiction in chancery. To understand the force of this proposition clearly, it is necessary to make a statement of the case as made by the bill.

It seems that in May, 1867, the St. Louis, Alton & Terre Haute Railroad Company, plaintiff in the bill, had nearly completed, and was operating, from Terre Haute to St. Louis, by way of Alton, a road about 189 miles long. From Terre Haute to Indianapolis (about 70 miles) a corporation had been organized under the laws of Indiana to build a road, and probably had built the whole or a part of it. Indianapolis was then a railroad center of importance, from which roads ran to Chicago and other lake towns, and to Louisville, Cincinnati, and other towns on the Ohio river, and to all the principal cities of the Atlantic coast. At St. Louis the Terre Haute & Alton road connected with the railroad system of the Mississippi river. Several of these railroad companies whose traffic was east of Indianapolis, and all of whom had connection, direct or indirect, with that city, were desirous of reaching St Louis with their business, and made proposal to the complainant company for the purpose of accomplishing this result. The companies who executed the agreements to secure this purpose, all of whom were made defendants to the bill, were the Indianapolis, Cincinnati & Lafayette Railroad Company, the Pittsburgh, Fort Wayne & Chicago Railway Company, the Pennsylvania Company, the Bellefontaine Company, the Cleveland, Columbus & Cincinnati Company, and...