Texas Ry Co v. Cody

• Decision Date: 19 April 1897
• Docket Number: No. 246,246
• Citation: 166 U.S. 606,41 L.Ed. 1132,17 S.Ct. 703
• Parties: TEXAS & P. RY. CO. v. CODY
• Court: U.S. Supreme Court

166 U.S. 606

17 S.Ct. 703

41 L.Ed. 1132

TEXAS & P. RY. CO.

v CODY.

No. 246.

April 19, 1897.

This was an action commenced by Henry D. Cody against the Texas & Pacific Railway Company in the district court of Tarrant county, Tex., and removed by defendant to the circuit court of the United States for the Northern district of Texas.

Plaintiff alleged in his petition that on March 4, 1892, he was injured at the crossing of the track of the defendant company over Jennings avenue, in the city of Ft. Worth, Tex., by the carelessness and negligence of the defendant and its agents and servants. Defendant demurred generally, and pleaded the general issue, and, in special pleas, alleged the contributory negligence of plaintiff, and his failure to exercise due care under the circumstances. The issues were submitted to a jury, which found a verdict in favor of plaintiff for the sum of $7,500, on which judgment was rendered. The case was taken to the circuit court of appeals for the Fifth circuit, and the judgment affirmed (30 U. S. App. 183, 14 C. C. A. 310, and 67 Fed. 71), whereupon it was brought to this court by writ of error.

John F. Dillon, W. S. Pierce, and D. D. Duncan, for plaintiff in error.

E. B. Kruttschnitt, E. H. Farrar, B. F. Jonas, and Thomas F. West, for defendant in error.

Mr. Chief Justice FULLER, after stating the facts in the foregoing language, delivered the opinion of the court.

The railway company raises a preliminary said Tarrant county, and into and through himself in his petition as a resident of Tarrant county, Tex., and alleged the Texas & Pacific Railway Company to be 'a private corporation, created and existing under the laws of the state of Texas,' and that 'the defendant owns and operates a line of railway extending into and running through said Tarrant county, and into and ghtough the city of Ft. Worth, Tarrant county, Tex., and has, for the purpose of conducting and carrying on its business in the management and operation of said line of railway, an office and agency and an agent and representative in the city of Ft. Worth, in said Tarrant county, upon whom citation may be served in this case, the name of the said agent being J. T. Clements.'

The defendant company filed its petition for removal in due time, which, in addition to other necessary averments, stated 'that, at the commencement of this suit, plaintiff was then, and still is, a citizen and resident of the state of Texas, and that your petitioner was then, and still is, a corporation organized under and by virtue of certain acts of congress of the United States, to wit, an act entitled 'An act to incorporate the Texas and Pacific Railway Company, and to aid in the construction of its road and other purposes,' approved March 3rd, 1871, and an act supplementary thereto, approved March 2, 1872; and that this is a suit arising under the laws of the United States, within the meaning of the second section of an act of March 3, 1875, as amended by the acts of March 3, 1887, and August 13, 1888.'

Bond was tendered and approved, and the case removed accordingly. There is no controversy over the fact that the defendant corporation owed its existence to acts of congress, and was entitled to remove the cause as one arising under the laws of the United States, in accordance with the decision of this court in Pacific Railroad Removal Cases, 115 U. S. 1, 5 Sup. Ct. 1113; but the railway company expresses apprehension lest we may hold that jurisdiction was not maintainable within the rule laid down in Tennessee v. Union & Planters' Bank, 152 U. S. 454, 14 Sup. Ct. 654, and other cases, because plaintiff below did not allege that defendant was a federal corporation, but rather the contrary.

The rule thus referred to, and reiterated in Chappell v. Waterworth, 155 U. S. 102, 15 Sup. Ct. 34, Postal Tel. Cable Co. v. Alabama, 155 U. S. 482, 15 Sup. Ct. 192, and Railway Co. v. Skottowe, 162 U. S. 490, 16 Sup. Ct. 869, is that under the acts of March 3, 1887 (chapter 373), and August 13, 1888 (chapter 866), a case not depending on the citi- zenship of the parties, nor otherwise specially provided for, cannot be removed from a state court into the circuit court of the United States, as one arising under the constitution, laws, or treaties of the United States, unless that appears by the plaintiff's statement of his own claim, and that, if it does not so appear, the want cannot be supplied by any statement in the petition for removal or in the subsequent pleadings.

By the acts of congress of 1887 and 1888, the jurisdiction of the circuit court on removal by defendant (and defendants alone can remove) is limited to such suits as might have been originally brought in that court; and it is essential, if the jurisdiction is invoked on the ground that the cause of action arises under the constitution, laws, or treaties of the United States, that this should be asserted. If recovery directly depends upon a right claimed under the constitution, laws, or treaties, plaintiff's statement of his case must necessarily disclose the fact; and, if the action is brought in the state court, defendant can remove it. If, however, plaintiff asserts no such right, and defendant puts his defense on the possession of such right, or its denial to plaintiff, though essential to his recovery, then defendant is remitted to his writ of error from this court to the state court to test the federal questions thus raised.

It is obvious that in the instance of diverse citizenship a different question is presented. Plaintiff may run his own risk in respect of the cause of action on which he proceeds, but he cannot cut off defendant's constitutional right as a citizen of a different state than the plaintiff, to choose a federal forum, by omitting to aver or mistakenly or falsely stating the citizenship of the parties.

And this must be so also as to federal railroad corporations. It was held in the Pacific Railroad Removal Cases that, as all the faculties and capacities possessed by such corporations were derived from their acts of incorporation by congress, all their doings arose out of those laws, and therefore suits by and against them were 'suits arising under the laws of the United States.' Conceding this, the principle applicable to diverse citizenship may reasonably be applied to them.

If, in this case, plaintiff had simply described defendant by its name, without more, there would seem to be no question that, as the corporation was judicially known to be a federal corporation, defendant would be entitled to remove the case on proper allegations in its petition; and we think this necessarily follows, where, by some mistake or otherwise, the defendant is erroneously stated to be created under state laws. Here defendant was described as 'a private corporation, created and existing under the laws of the state of Texas'; and this was repeated in an amended petition, filed in the circuit court, but no motion to remand was made, nor was the propriety of the removal questioned in any way. Possibly the pleader did not intend to deny the federal character of the company, but, whether so or not, no issue was or could be made as to the source of its corporate existence.

Railway Co. v. Skottowe, 162 U. S. 490, 16 Sup. Ct. 869, is in harmony with these views. That was an action brought in a court of the state of Oregon to recover for personal injuries alleged to have been caused, in Oregon, by the negligence of the defendant company. A petition for removal was filed and denied, and this denial was approved by the supreme court of Oregon. Defendant was described in the complaint as 'a corporation duly organized, existing, and doing business in the state of Oregon.' In the removal petition, the defendant was alleged to be a consolidated company, composed of several railway corporations severally organized and created under the laws of the territories of Utah and Wyoming and of the state of Nevada, and under an act of congress approved Allgust 2, 1882, c. 372 (22 Stat. 185), entitled 'An act creating the Oregon Short Line Railway Company, a corporation in the territories of Utah, Idaho and Wyoming, and for other purposes,' and an act of congress, approved June 20, 1878, c. 352 (20 Stat. 241), making the Utah & Northern Railway Company a railway corporation in the territories of Utah, Idaho, and Montana.

This court held that, so far as appeared, the defendant company existed and was doing business in the state of Oregon solely under the authority of that state, whether express or permissive; that the acts of congress referred to did not disclose any intention or the part of congress to confer powers or right to be exercised outside of the territories named therein; and that the supreme court of Oregon committed no error in affirming the action of the trial court denying the petition for removal.

We are of opinion that the circuit court properly entertained jurisdiction.

Turning to the case on the merits, we find no reason for disturbing the judgment of the circuit court of appeals. Fourteen errors were assigned in that court to the judgment of the circuit court, which were reduced to six in this court, of which the first was merely that the court of appeals erred in affirming the judgment. The five specific grounds of error assigned are that the circuit court...