Davis' Adm'r v. Chesapeake & O. Ry. Co.

• Decision Date: 17 June 1903
• Citation: 75 S.W. 275,116 Ky. 144
• Parties: DAVIS' ADM'R v. CHESAPEAKE & O. RY. CO. et al.
• Court: Kentucky Court of Appeals

75 S.W. 275

116 Ky. 144

DAVIS' ADM'R v. CHESAPEAKE & O. RY. CO. et al.

Court of Appeals of Kentucky.

June 17, 1903

"To be officially reported."

On rehearing. Rehearing granted, and former opinion withdrawn.

PAYNTER J.

This is an action to recover damages for the loss of the life of the intestate by the alleged negligence of the Chesapeake & Ohio Railway Company. It presented its petition and asked for the removal of the case to the federal court, and the motion was sustained. Owing to our duplex system of government perplexing and delicate questions as to the respective jurisdiction of the federal and state courts arise; and the judiciary should meet and dispose of them with fairness and in the orderly manner which should characterize the proceedings of courts of justice. It will not be our purpose to discuss the questions considered by the Supreme Court of the United States, but to state its conclusions and follow them, as that court has jurisdiction to adjudicate the question involved.

Section 1, art. 3, of the Constitution of the United States provides that "the judicial power of the United States shall be vested in one Supreme Court and in such inferior courts as the Congress may from time to time ordain and establish." Section 2 of the same article provides that "the judicial power shall extend to all cases in law and equity, arising under this Constitution, *** to controversies *** between citizens of different states." When a case decided by a supreme court of a state involves the question of diverse citizenship, the Supreme Court of the United States has held in many cases that it will review the judgments of those courts on the question. That court having adjudged the precise question here involved, and adversely to the view of this court, expressed in the former opinion delivered herein, we feel that the petition for a rehearing should be granted, and the opinion withdrawn, which is done.

The appellant is a citizen of Kentucky. It is substantially averred in the petition that the Chesapeake & Ohio Railway Company is a corporation organized under the laws of Virginia, and became a corporation, citizen, and resident of this state by filing in the office of the Secretary of State and in the office of the Railroad Commission, pursuant to section 211 of the Constitution and section 841 of Kentucky Statutes of 1899 copies of its articles of incorporation. The Chesapeake & Ohio Railway Company is a Virginia corporation. It complied with section 841, Ky. St. 1899, which reads as follows: "No company, association or corporation created by, or organized under, the laws or authority of any state or country other than this state, shall possess, control maintain or operate any railway, or part thereof, in this state until, by incorporation under the laws of this state, the same shall have become a corporation, citizen and resident of this state. Any such company, association or corporation may, for the purpose of possessing, controlling, maintaining or operating a railway or part thereof in this state, become a corporation, citizen and resident of this state by being incorporated in the manner following, namely: By filing in the office of the Secretary of State, and in the office of the Railroad Commission, a copy of the charter or articles of incorporation of such company, association or corporation, authenticated by its seal and by the attestation of its president and secretary, and thereupon, and by virtue thereof, such company, association or corporation shall at once become and be a corporation, citizen and resident of this state. The Secretary of State shall issue to such corporation a certificate of such incorporation." This section of the statute was based upon section 211 of the Constitution of the state, which reads as follows: "No railroad corporation organized under the laws of any other state, or of the United States, and doing business, or proposing to do business, in this state, shall be entitled to the benefit of the right of eminent domain or have power to acquire the right of way or real estate for depot or other uses, until it shall have become a body corporate pursuant to and in accordance with the laws of this commonwealth." When the Chesapeake & Ohio Railway Company complied with the terms of this section of the statute, it at once became "a corporation, citizen and resident of this state," for it is therein so provided.

But the question then arises whether it remained a citizen of the state where it was organized in the meaning of section 2, art. 3, of the Constitution of the United States. In Bank v. Deveaux, 5 Cranch, 86, 3 L.Ed. 38, Chief Justice Marshall said: "That invisible, intangible, and artificial being, that mere legal entity, a corporation aggregate, is certainly not a citizen, and consequently cannot sue or be sued in the courts of the United States, unless the rights of members in this respect can be exercised in their corporate capacity." In Covington Drawbridge Co. v. Shepherd, 20 How. 227, 15 L.Ed. 896, it was said: "No one, we presume, ever supposed that the artificial being, created by an act of incorporation, could be a citizen of a state in the sense in which that word is used in the Constitution of the United States." In Muller v. Dows, 94 U.S. 444, 24 L.Ed. 207, the court said: "A corporation itself can be a citizen of no state, in the sense in which the word 'citizen' is used in the Constitution of the United States. A suit may be brought in the federal courts by or against a corporation, but in such a case it is regarded as a suit brought by or against the stockholders of the corporation; and for the purpose of jurisdiction it is conclusively presumed that all the stockholders are citizens of the state which by its laws created the corporation." At first the Supreme Court held that, in order to give federal courts jurisdiction of an action by or against corporations, it was necessary to aver citizenship of the incorporators. Subsequently it held that the individuals composing a corporation were conclusively presumed to be citizens of the state creating the corporation.

There is no averment in the petition that the individuals composing the Chesapeake & Ohio Railway Company were associated together for the purpose of organizing a corporation of the same name in this state. The corporation which they organized in another state is, by an act of the General Assembly declared to be a citizen and corporation of Kentucky, by reason of its compliance with certain constitutional and statutory regulations. In St. Louis R. Co. v. James, 161 U.S. 545, 16 S.Ct. 621, 40 L.Ed. 802, it appeared that the St. Louis Railroad Company had been incorporated by the state of Missouri, and had subsequently filed its articles of incorporation with the Secretary of State of the state of Arkansas, under a statute like the one under...