Stevens v. . the Phoenix Insurance Co. , 1869 N.Y. LEXIS 235 ( 1869 )

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.]

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] It was decided in the Bank of Augusta v. Earle (13 Peters, U.S.R., 512), that a corporation can have no legal existence out of the bounds of the sovereignty by which it is created; that it exists only in contemplation of law and by force of law; and when that law ceases to operate, the corporation can have no existence. It must dwell in the place of its creation. The same was affirmed in the case of the Louisville, Cincinnati and Chicago Railroad Company v.Letson (2 How. U.S.R., 497). It was also held in that case that a corporation, created by and transacting business in a State, is to be deemed an inhabitant of the State, capable of being treated as a citizen for all purposes of suing and being sued, and that the averment of the facts of its creation and the place of transacting business is sufficient to give the Circuit Court of the United States jurisdiction.

This question was very fully reconsidered in the case ofMarshall v. The Baltimore and Ohio Railroad Company (16 How. U.S.R., 314); and was reaffirmed, and it was held in that case, that a citizen of Virginia might sue the Baltimore and Ohio Railroad Company in the Circuit Court of the United States of Maryland, and that an averment that defendants are a body corporate, created by the legislature of Maryland, was sufficient to give the court jurisdiction.

The question was again considered in the case of the CovingtonBridge Company v. Shepherd (20 How. U.S.R., 227, 232), and it was there said that this must be regarded as the settled law of the court; and it was further held in that case, that an averment, that the Covington Bridge Company were citizens of Indiana, was sufficient to give jurisdiction to the Circuit Court of the United States, because the company was incorporated by a public statute of the State, which the court was bound judicially to notice. The jurisdiction in these cases was maintained upon the assumption, and the decision of the court was, that a corporation is a citizen within the meaning of the judiciary act. I know the earlier cases held otherwise, but they are disapproved by these cases, where the question was fully considered.

I do not think that the case of the Ohio and MississippiRailroad Company v. Wheeler (1 Black. R. 286), can be said to interfere with these cases, much less to overrule them. It is held in that case, that a corporation exists only in contemplation of law and by force of law, and can have no legal existence beyond the bounds of the sovereignty by which it is created, and that it must dwell in the place of its creation.

It is also held, that where a coporation is created by the laws of a State, the legal presumption is that its members are citizens of the State in which alone the corporate body has a legal existence, and that a suit by or against a corporation, in its corporate capacity, must be presumed to be a suit by or against citizens of the State which created the corporation body; and no averment or evidence is admissible for the purpose of withdrawing the suit from the jurisdiction of a court of the United States.

These views are confirmed in the opinion delivered in this court, so far as that case goes, in the case of Merrick v. VanSantvoord (34 N.Y.R., 218). It is there said, that a corporation is an artificial being, and has no dwelling, either in its office, its depots, or its ships. Its domicil is the legal jurisdiction of its origin, irrespective of the residence of its officers, or the place where its business is transacted. It is also said that a corporation cannot migrate from one sovereignty to another, so as to have a legal, local existence within the latter sovereignty. (See S.C., page 220.) The fact that this corporation appointed an agent within this State, and does business here, or that a portion of its directors reside here, does not in any manner affect its domicil or its right to be regarded a citizen of another State. (34 N.Y.R., 205; 2 Abbot N.S., 357; 3 Metcalf R. 564.)

By the express language of the 12th section of the judiciary act, when the defendant filed his petition, etc., in this case, it became the duty of the State court to accept the security and proceed no further in the cause.

This act is mandatory upon the State court; and when, as in this case, the defendant complies strictly with the act, the State court has no further jurisdiction to proceed in the cause. (Gordon v. Langest, 16 Peters R. 97.) And every step subsequently taken in the cause was coram non judice. (16 Peters R. 97.) It follows from the views above expressed that the judgment of the Supreme Court must be reversed.

All the judges concurred for reversal on this ground.

LOTT, J., also read an opinion for reversal, on the ground that the agents had no power to make verbal contracts; but this point was not passed upon by the court.

Judgment reversed.