Markwood v. Southern Ry. Co.

• Decision Date: 02 March 1895
• Parties: MARKWOOD v. SOUTHERN RY. CO.
• Court: U.S. District Court — Eastern District of Tennessee

65 F. 817

MARKWOOD v. SOUTHERN RY. CO.

United States Circuit Court, E.D. Tennessee, Northern Division.

March 2, 1895

Henderson Jourolman, Welcker & Hudson, W. S. Dickinson, and Kirkpatrick, Williams & Bowman, for plaintiff.

Hacker Deadrick & Epps and Borrow Bros., for defendant.

CLARK District Judge.

This action for damages for personal injury was brought in the circuit court of Washington county, and removed on defendant's application into the circuit court of the United States for the Northern division of the Eastern district of Tennessee, upon the ground that defendant is a corporation created and organized under the laws of the state of Virginia, and a citizen of that state, and a nonresident of Tennessee. The plaintiff filed a plea to the jurisdiction setting up, in substance, that under certain statutes of Tennessee, and compliance with the provisions thereof by the defendant, it 'was, and still is, by adoption and domestication, a Tennessee corporation, ' with averment that this was so at and before the suit was instituted. To this plea defendant demurred. No question is made on the form or sufficiency of the pleadings by which the issue is presented, and the court is left to treat, as squarely raised, the question whether the defendant company, admitted to have been originally created by statute of Virginia, has been made a corporation and citizen of Tennessee also, and therefore not entitled to remove the case. This depends on the effect of the legislation referred to, being the act of the general assembly of the state of 1877 (chapter 31), and the amendatory act of 1891 (chapter 122). Such parts of the acts as materially affect the matter now under consideration are as follows:

'An act to declare the terms on which foreign corporations organized for mining and manufacturing purposes may carry on their business, and purchase, hold and convey real estate and personal property in this state.'

The first section provides that such corporations 'may become incorporated in this state, and may carry on in this state the business authorized by their respective charters, or the articles under which they are or may be organized, and may enjoy the rights, and to do the things therein specified, upon the terms and conditions, and in the manner and under the limitation herein declared.'

Section 2 requires a copy of the charter to be filed in the office of the secretary of state, and an abstract thereof to be recorded in the office of register in each county where business is to be carried on or lands acquired.

'Sec. 3. Be it further enacted, that such corporations shall be deemed and taken to be corporations of this state and shall be subject to the jurisdiction of the courts of this state, and may sue and be sued therein in the mode and manner that is, or may be, by law directed in the case of corporations created or organized under the laws of this state.'

Section 4 confers power to acquire and convey real estate for corporate purposes, and releases the right of escheat.

Section 5 makes the property of the corporation liable for its debts, just as that of natural persons, but provides that resident creditors of the state shall have priority in the distribution of assets or subjection of the same, or any part thereof, to be payment of debts over all simple contract creditors, being residents of any other country or countries, 'and also over mortgage or judgment creditors, for all debts, engagements and contracts which were made or owing by the said corporations previous to the filing and registration of such valid mortgages, or the rendition of such valid judgments. ' The corporation is then made liable to taxation just as a natural person.

Section 6 grants the right to operate railroads and other methods of transportation to and from mines.

Section 7 limits the time for beginning operations, and provides that the company 'shall in good faith continue the same under the powers of said corporation in this said charter or articles of association as in this act declared; it being a chief object of this act to secure the opening and development of the mineral resources of the state, and to facilitate the introduction of foreign capital, and upon the failure of any such corporation to commence in good faith to develop and work some portion of its property within this state within one year after filing its said charter or articles of association in the office of the secretary of state, all rights and privileges conferred by this act, shall lapse and become void and of no effect.'

Section 8 grants power to establish towns and villages.

'Sec. 9. Be it further enacted, that if any such charter or articles of association, or any part thereof, filed as aforesaid in the office of the secretary of state, should be in contravention or violation of the laws of this state, all such parts thereof as may be found to be in conflict with the laws of this state shall be null and void.'

The amendatory act may as well be given in full:

'Section 1. Be it enacted, by the general assembly of the state of Tennessee, that chapter 31 of the Acts of 1877 be so amended and enlarged as that the provisions of said act shall apply to all corporations chartered or organized under the laws of other states or counties for any purpose whatsoever which may desire to do any kind of business in this state.

'Sec. 2. Be it further enacted, that each and every corporation created or organized under or by virtue of any government other than that of this state, for any purpose whatever, desiring to own property or carrying on business in this state of any kind or character, shall first file in the office of the secretary of state a copy of its charter and cause an abstract of same to be recorded in the office of the register in each county in which such corporation desires, or proposes to carry on its business, or to acquire or own property, as now required by section 2 of chapter 31 of Acts of 1877.

'Sec. 3. Be it further enacted, that it shall be unlawful for any foreign corporation to do, or attempt to do, any business or to own or to acquire any property in this state, without having first complied with the provisions of this act, and a violation of this statute shall subject the offender to a fine of not less than $100.00 nor more than $500.00, at the discretion of the jury trying the case.

'Sec. 4. Be it further enacted, that when a corporation complies with the provisions of this act, it shall then be, to all intents and purposes, a domestic corporation, and may sue and be sued in the courts of this state, and subject to the jurisdiction of the courts of this state just as though it were created under the laws of this state.

'Sec. 5. Be it further enacted, that when such corporation has no agent in this state upon whom process may be served by any person bringing suit against such corporation, then it may be proceeded against by attachment, to be levied upon any property owned by the corporation, and publication, as in other attachment cases. But for the plaintiff to obtain an attachment he, his agent or attorney, need only make oath of the justness of his claim, that the defendant is a corporation organized under this act, and that it has no agent in the county where the property sought to be attached is situated, upon whom process can be served.

'Sec. 6. Be it further enacted, that the said chapter 31 of the Acts of 1877, except in so far as the same is amended, enlarged and extended by this act, be and the same is declared to be in full force.'

Of course, the word 'counties,' in the first section, is an error in copying or printing, and should be 'countries.' It is not controverted, but admitted that defendant has filed a copy of its charter in the office of the secretary of state, and otherwise complied with this legislation. Whether defendant is a corporation engaged in interstate commerce, and therefore not subject to the provisions of the acts, and whether having voluntarily complied with the law renders it continuously subject to the provisions and penalties of the statutes, are questions not made in argument. The statutes have been before the supreme court of the state in Young v. Iron Co., 85 Tenn. 189; ^[1] State v. Phoenix Ins. Co., 92 Tenn. 420, 21 S.W. 893; Lumber Co. v. Thomas, 92 Tenn. 587, 22 S.W. 743; and Manufacturing Co. v. Gorten, 93 Tenn. 590, 27 S.W. 971. But the question now raised was not involved in any of those cases, and has never been decided by that court. The interpretation of the acts, with respect to the point now presented, is left, therefore, to be determined by the rules established by the federal courts. The question of the effect of similar legislation has often been before the United States supreme court, as well as the courts at circuit, and has been much considered. The plaintiff's contention is that the legislation is not merely a license or authority to foreign corporations to carry on business in this state, but that its effect is to make them corporations and citizens of Tennessee in the fullest sense possible. Various difficulties are suggested affecting the validity of the legislation, construed as plaintiff insists it must be. It will be observed that the amendatory act, in its caption, does not purport to do more than extend the original act to all foreign corporations, and both acts stand under the caption of the original act so far as that is important. Whether under the title, expressing the purpose to prescribe terms on which these corporations may do business in the state, it would be germane and competent to create them corporations of Tennessee, and thereby completely change their relations to the state, I do not find it necessary to decide. It is also argued...