Goodwin v. New York, N.H. & H.R. Co.

• Decision Date: 27 July 1903
• Docket Number: 1,290.
• Citation: 124 F. 358
• Parties: GOODWIN v. NEW YORK, N. H. & H. R. CO.
• Court: U.S. District Court — District of Massachusetts

124 F. 358

GOODWIN v. NEW YORK, N. H. & H. R. CO.

No. 1,290.

United States Circuit Court, D. Massachusetts.

July 27, 1903

S. A Fuller, for plaintiff.

Charles F. Choate, for defendant.

LOWELL District Judge.

This is an action of tort brought by a citizen of Massachusetts against 'the New York, New Haven & Hartford Railroad Company, a corporation duly established by the laws of the state of Connecticut,' to recover for injuries sustained in Massachusetts. The officer's return to the writ states that it was served 'by delivering in hand to Fayette S Curtis, fourth vice president thereof, at his office in said Boston, the original summons of this writ. ' The defendant has pleaded to the jurisdiction, and the issue raised by the plea has been tried upon agreed facts. The court has to determine if there is diversity of citizenship between the plaintiff and the defendant. The matter has been so much discussed in opinions rendered by the Supreme Court and by other federal courts, and the dicta, if not the decisions, are so contradictory, that a somewhat extended examination of the question must be made.

In the United States a single railroad system often extends into several states. The system is most conveniently operated by one organization, and the courts have had to determine what is the relation of this organization to the several states in which its lines are situated. In Martin v. B. & O R R., 151 U.S. 673, 677, 14 Sup.Ct. 533, 38 L.Ed. 311, it was said:

'A railroad corporation, created by the laws of one state, may carry on business in another, either by virtue of being created a corporation by the laws of the latter state also, as in Railroad Co. v. Vance, 96 U.S. 450 (24 L.Ed. 752); Memphis & Charleston Railroad Co. v. Alabama, 107 U.S. 581 (2 Sup.Ct. 432, 27 L.Ed. 518); Clark v. Barnard, 108 U.S. 436 (2 Sup.Ct. 878, 27 L.Ed. 780); Stone v. Farmers' Co. 116 U.S. 307; and Graham v. Boston, Hartford & Erie Railroad, 118 U.S. 161 (6 Sup.Ct. 1009, 30 L.Ed. 196); or by virtue of a license, permission or authority granted by the laws of the latter state to act in that state under its charter from the former state. Railroad Co. v. Harris, 12 Wall. 65 (20 L.Ed. 20); Railroad Co. v. Koontz, 104 U.S. 5 (26 L.Ed. 643); Pennsylvania Railroad v. St. louis, etc., Railroad, 118 U.S. 290 (6 Sup.Ct. 1094, 30 L.Ed. 83); Goodlett v. Louisville & Nashville Railroad, 122 U.S. 391 (7 Sup.Ct. 1254, 30 L.Ed. 1230); Marye v. Baltimore & Ohio Railroad, 127 U.S. 117 (8 Sup.Ct. 1037, 32 L.Ed. 94). In the first alternative it cannot remove into the Circuit Court of the United States a suit brought against it in a court of the latter state by a citizen of that state because it is a citizen of the same state with him. Memphis & Charleston Railroad v. Alabama, above cited. In the second alternative it can remove such a suit, because it is a citizen of a different state from the plaintiff. Railroad Co. v. Koontz, above cited.'

For purposes of convenience, the two classes of corporations above described will be designated in this opinion as the first and the second, respectively. It is not necessary here to consider by what marks the two classes are distinguished, because the Circuit Court for this district in Smith v. New York, New Haven & Hartford Railroad (C.C.) 96 F. 504, has decided that the railroad here in question is of the first class.

The classification just mentioned has been modified in one particular by later cases. A corporation of the second class, created by the laws of one state, may have become a corporation of another state into which its lines extend; but its incorporation in the latter state, though rendering it subject for many purposes to the laws of that state, is not deemed to affect its jurisdiction status. Thus in St. Louis & San Fran. Railway Co. v. James, 161 U.S. 545, 16 Sup.Ct. 621, 40 L.Ed. 802, the plaintiff in error was a railroad corporation created in Missouri, and therefore a citizen thereof. It owned and operated lines of railroad in Arkansas, and by virtue of the general statutes of Arkansas has 'become a railroad corporation of (Arkansas), subject to all the laws of the state now in force or hereafter enacted, the same as if formally incorporated in this state, anything in its articles of incorporation or charter to the contrary notwithstanding, and such acts on the part of such corporation shall be conclusive evidence of the intent of such corporation to create and become a domestic corporation. ' Yet it was held not to be a citizen of Arkansas, so as to permit suit in the Circuit Court in that state brought against it by a citizen of Missouri. Incorporation for some purposes in Arkansas was not deemed to affect the defendant's sole jurisdictional citizenship in Missouri. Again, in Louisville Railway Co. v. Louisville Trust Co., 174 U.S. 552, 563, 19 Sup.Ct. 817, 43 L.Ed. 1081, a corporation of Indiana sued as such, in the Circuit Court in Kentucky, a citizen of Kentucky. The defendant pleaded to the jurisdiction. The court said:

'But a decision of the question whether the plaintiff was or was not a corporation of Kentucky does not appear to this court to be required for the disposition of this case, either as to the jurisdiction or as to the merits. As to jurisdiction, it being clear that the plaintiff was first created a corporation of the state of Indiana, even if it was afterwards created a corporation of the state of Kentucky also, it was and remained, for the purposes of the jurisdiction of the courts of the United States, a citizen of Indiana, the state by which it was originally created. It could neither have brought suit as a corporation of both states against a corporation or other citizen of either state, nor could it have sued or been sued as a corporation of Kentucky, in any court of the United States.'

In other words, the Supreme Court has held that an organization may for some purposes be incorporated in a given state, and yet may not be a corporation of that state for purposes of jurisdiction. A corporation of the second class, though in some respects treated as a corporation of several states, yet remains for jurisdictional purposes a citizen of the state which originally created it, and of that state alone. Plainly, the railroads in the two cases last mentioned were of the second class, and the language just quoted is in accord with that used in R. R. v. Harris, 12 Wall. 65, 82, 20 L.Ed. 354, 358:

'Nor do we see any reason why one state may not make a corporation of another state, as there organized and conducted, a corporation of its own, quo ad hoc any property within its territorial jurisdiction.'

It cannot be supposed that the language of the court in these cases was intended to deny the existence of corporations of the first class, although, in the latest case, the Supreme Court was disposed to treat interstate railroads as corporations of the second class, where the classification was open to doubt. Southern R. R. v. Allison, 23 Sup.Ct. 713, 47 L.Ed.-- .

In Memphis R. R. Co. v. Ala., 107 U.S. 581, 2 Sup.Ct. 432, 27 L.Ed. 518, the Supreme Court held that the railroad, a corporation of the first class--that is to say, a corporation for jurisdictional purposes both of Alabama and Tennessee-- could not remove into the Circuit Court in Alabama a suit brought against it by a citizen of that state. In that case it was said:

'The defendant, being a corporation of the state of Alabama, has no existence in this state as a legal entity or person, except under and by force of its incorporation by this state; and, although also incorporated in the state of Tennessee, must, as to all its doings within the state of Alabama, be considered a citizen of Alabama, which cannot sue or be sued by another citizen of Alabama in the courts of the United States.' 107 U.S. 585, 2 Sup.Ct. 436, 27 L.Ed. 518.

The decision was rested on Railway Co. v. Whitton, 13 Wall. 270, 20 L.Ed. 571, and follows Muller v. Dows, 94 U.S. 444, 24 L.Ed. 207, in both of which cases the corporation must be taken to have been of the first class. In the former case it was said:

'The defendant is a corporation, and as such a citizen of Wisconsin by the laws of that state. It is not there a corporation or a citizen of any other state. Being there sued, it can only be brought into court as a citizen of that state, whatever its status or citizenship may be elsewhere.' 13 Wall. 283, 20 L.Ed. 576.

If, then, a plaintiff, citizen of one state, can maintain in the federal courts in another state a suit against a corporation of the first class, created in both states (Muller v. Dows, Railway Co. v. Whitton), and if that corporation cannot remove into the federal court in either state a suit brought against it by a citizen of that state (Memphis R.R. v. Ala.), it would seem to follow that this court is without jurisdiction in the case now before it. This is certainly true if an interstate railroad of the first class is to be treated in both states and under all circumstances as one and the same corporation.

But the plaintiff urges that in this defendant, there are in the corporation of the first class, such as this defendant, there are in the eye of the law two separate corporations, one having jurisdictional citizenship in Massachusetts, and one in Connecticut, and that he has chosen to sue the latter. In some of the cases cited there is language which strongly states the separate existence of two corporations. See R.R. v. Vance, 96 U.S. 450, 24 L.Ed. 752; Clark v. Barnard, 108 U.S. 436, 452, 2 Sup.Ct. 878, 27 L.Ed. 780; Graham v. B.H. & E.R.R., 118 U.S. 161, 169, 6 Sup.Ct. 1009, 30 L.Ed. 196.

In order to sustain its plea to the jurisdiction, the defendant may not be obliged to prove that a corporation of the...