161 U.S. 545 (1896), 242, St. Louis and San Francisco Railway Co. v. James

Docket NºNo. 242
Citation161 U.S. 545, 16 S.Ct. 621, 40 L.Ed. 802
Party NameSt. Louis and San Francisco Railway Co. v. James
Case DateMarch 02, 1896
CourtUnited States Supreme Court

Page 545

161 U.S. 545 (1896)

16 S.Ct. 621, 40 L.Ed. 802

St. Louis and San Francisco Railway Co.

v.

James

No. 242

United States Supreme Court

March 2, 1896

Submitted October 15, 1895

CERTIFICATE FROM THE CIRCUIT COURT

OF APPEALS FOR THE EIGHTH CIRCUIT

Syllabus

There is an indisputable legal presumption that a state corporation, when sued or suing in a circuit court of the United States, is composed of citizens of the State which created it, and hence such a corporation is itself deemed to come within that provision of the Constitution of the United States which confers jurisdiction upon the federal courts in "controversies between citizens of different States."

It is competent for a railroad corporation organized under the laws of one state, when authorized so to do by the consent of the state which created it, to accept authority from another state to extend its railroad into such state and to receive a grant of powers to own and control, by lease or purchase, railroads therein, and to subject itself to such rules and regulations as may be prescribed by the second state, and such legislation on the part of two or more states is not, in the absence of inhibitory legislation by Congress, regarded as within the constitutional prohibition of agreements or compacts between states.

Such corporations may be treated by each of the states whose legislative grants they accept as domestic corporations.

The presumption that a corporation is composed of citizens of the state which created it accompanies such corporation when it does business in another state, and it may sue or be sued in the federal courts in such other state as a citizen of the state of its original creation.

That presumption of citizenship is one of law, not to be defeated by allegation or evidence to the contrary.

The provision in the Arkansas statute of March 13, 1889, that a railroad corporation of another state which had leased or purchased a railroad in Arkansas and filed with the secretary of state of that state, as provided by the act, a certified copy of its articles of incorporation, should become a corporation of Arkansas does not avail to create an Arkansas corporation out of a foreign corporation complying with those provisions in such a sense as to make it a citizen of Arkansas within the meaning of the federal Constitution, and subject it to a suit in the Federal courts sitting in the state of Arkansas brought by a citizen of the state of its origin.

[16 S.Ct. 621] On December 24, 1892, Etta James, defendant in error, brought this action in the Circuit Court for the Western District

Page 546

of Arkansas against the St. Louis and San Francisco Railway Company, plaintiff in error, for negligence in maintaining a switch target at Monett, in Barry County, in the State of Missouri, so near its tracks that her husband was struck and killed by it on July 3, 1889, while employed as a fireman on one of the company's engines. Her husband resided at Monett and died intestate. The defendant in error was the widow and sole heir at law of her husband, and no administrator of his estate was appointed in Arkansas. She recovered a judgment of $5,000.

Etta James, the defendant in error, resided at Monett, and was a citizen of the State of Missouri. Monett is a station in Missouri, on the railroad of the plaintiff in error, about fifty miles from the southern border of that state.

The St. Louis and San Francisco Railway Company was organized and incorporated under the laws of the State of Missouri in 1876, and soon thereafter became the owner of, and has ever since owned and operated, a railroad in that state extending from Monett southerly to the southern border of the State of Missouri.

Section 11 of Article XII of the Constitution of the State of Arkansas, which was adopted in 1874, provides that:

Foreign corporations may be authorized to do business in this state under such limitations and restrictions as may be prescribed by law, provided that no such corporation shall do any business in this state except while it maintains therein one or more known places of business and an authorized agent or agents in the same upon whom process may be served, and, as to contracts made or business done in this state, they shall be subject to the same regulations, limitations, and liabilities as like corporations of this state, and shall exercise no other or greater powers, privileges, or franchises than may be exercised by like corporations of this state, nor shall they have power to condemn or appropriate private property.

Section 1 of Article XVII of that constitution provides that:

All railroads, canals, and turnpikes shall be public highways, and all railroads and canal companies shall be common

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carriers. Any association or corporation organized for the purpose shall have the right to construct and operate a railroad between any points within this state and to connect at the state line with railroads of other states. Every railroad company shall have the right with its road to intersect, connect with, or cross any other road, and shall receive and transport each other's passengers, tonnage, and cars, loaded or empty, without delay or discrimination.

Section 3 of an Act passed by the General Assembly of the State of Arkansas, entitled "An act in relation to certain railroads," approved March 16, 1881 (Laws Ark. 1881, No. 43, at p. 83), provides:

[16 S.Ct. 622]

That every railroad corporation incorporated under the laws of this state whose road is wholly or in part constructed and operated is hereby authorized to sell, lease, or otherwise dispose of the whole or any part of its roadways and rights of way, with the franchises thereto belonging, and its other property, to any connecting railroad company, or to any railroad corporation now or hereafter organized under the laws of this or any other state, upon such terms and conditions as may be agreed upon by the board of directors of said corporations and ratified by a two-thirds vote of the issued capital stock thereof, and to receive the bonds or stock of the purchasing corporation in whole or in part payment of such purchase, and corporations may be formed for the purpose of purchasing or leasing the whole or any part of any railroad, and such purpose or object shall be stated in articles of association, which shall be executed and filed in the office of the Secretary of State, the same to be as near as may be in accordance with section 4918 of Gantt's Digest. All shares of stock issued in payment of such purchase shall be deemed to be full-paid shares, and the number and amount of shares so to be issued shall be stated in the aforesaid articles of association, and said articles shall be otherwise altered, if necessary, so as to conform to the facts.

Section 5 of the same act provides that:

Any railroad company incorporated by or under the laws of any other state and having a line of railroad built or

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partly built to or near any boundary of this state and desiring to continue its line of railroad into or through this state or any branch thereof may, for the purpose of acquiring the right to build its line of railroad, lease or purchase the property, rights, privileges, lands, tenements, immunities, and franchises of any railroad company organized under the laws of this state, which said lease or purchase shall carry with it the right of eminent domain held and acquired by said company at the time of lease or sale, and thereafter hold, use, maintain, build, construct, own, and operate the said railroad so leased or purchased as fully and to the same extent as the company organized under the laws of this state might or could have done, and the rights and powers of such company, and its corporate name, may be held and used by such foreign railroad company as will best subserve its purpose, and the building of said line of railroad; but before any such lease or sale shall be made by any company organized under the laws of this state, two-thirds in amount of the capital stock issued shall at a meeting of the stockholders thereof -- of which sixty days' notice shall be given in some newspaper published at the City of Little Rock and in such other papers published elsewhere as the president and directors of said company may direct consent thereto, and any railroad company organized under the laws of any state, and having a line of railroad built or partly built to any boundary of this state, and desiring to continue its line of road or any branch thereof into or through this state is hereby authorized and empowered so to do when it shall have acquired by lease or purchase the corporate rights, privileges, and franchises of any railroad corporation in the manner herein provided, formed under the laws of this state, and such railroad company, upon filing a certified copy of its articles of incorporation, or the special act incorporating the same, shall have, possess, and enjoy all the rights, powers, privileges, franchises, and immunities belonging to railroad corporations formed under the general laws of this state which are not in conflict with the constitution or laws of this state; but nothing herein contained shall interfere with or abridge the right of any railroad corporation acquired under

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section 4942 of Gantt's Digest. . . . In all other matters said foreign railroad company shall be subject to all the provisions of all acts in relation to railroads, the liabilities and forfeitures thereby imposed, and may sue and be sued in the same manner as other railroad corporations, and subject to the same service of process, and shall keep an office or offices in said state as required by section 11 of article 12 of the constitution of this state, and an agent or agents upon whom process may be served, with the like force and effect as is provided for the service of process in section two of this act.

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