Southern Railway Co. v. Allison
190 U.S. 326 (1903)

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U.S. Supreme Court

Southern Railway Co. v. Allison, 190 U.S. 326 (1903)

Southern Railway Company v. Allison

No. 232

Argued April 8, 1903

Decided May 18, 1903

190 U.S. 326

Syllabus

Although a statute of North Carolina provides that a foreign railroad company desiring to own property or carry on business, or exercise any corporate franchise within the state must comply with certain specified provisions of the statute, and on complying therewith shall become a domestic corporation, such fact does not affect the character of the original corporation, and it does not thereby become a citizen of North Carolina so far as to affect the jurisdiction of the federal courts upon a question of diverse citizenship.

Where a corporation which has complied with such provisions is sued in the state courts of North Carolina, an order of removal made by the Circuit Court of the United States operates to withdraw from the state court the right to hear and determine the case.

The Supreme Court of the State of North Carolina affirmed a judgment against the railway company which was entered on a verdict of a jury upon a trial in the state court, and the railway company has brought the case here by writ of error.

The plaintiff below brought his action in the state court against the railway company to recover damages suffered by reason of the alleged negligence of the defendant. The defendant answered and averred that it was a corporation created and organized under the laws of the State of Virginia; it denied the various allegations of the complaint as to its negligence and as to the damages suffered by the plaintiff, and also set up as a defense plaintiff's contributory negligence. After answer

Page 190 U. S. 327

and under the provisions of the second section of the Act of Congress, chapter 866, approved August 13, 1888, 25 Stat. 433, the defendant, alleging that it was a corporation created under the laws of Virginia, submitted a petition to the United States Circuit Court in North Carolina for for the removal of the case from the state to the United States court, and the ground for removal, as stated in the petition, was because of "prejudice or local influence" to such an extent that it would

"not be able to obtain justice in such state court or in any other state court to which the said defendant may, under the laws of the state, have the right, on account of such prejudice or local influence, to remove said cause."

The petition was supported by an affidavit that set up facts from which the court might find that defendant could not obtain justice in the state court.

The circuit court decided that the proof submitted to it was sufficient; that defendant was a citizen of Virginia, and that it could not, on account of local prejudice and influence, obtain a fair trial in the state court, and it therefore ordered the removal of the cause to the United States Circuit Court for the Western District of North Carolina. The court also ordered that its clerk should certify to the state court the order of removal,

"together with copies of the petition, bond, and affidavit, to the end that the state court may be advised of the action of this court and of its order of removal, and to the further end that the said state court may proceed no further with the said suit or action, and to the end also that the said state court may direct the clerk of the Superior Court of the County of McDowell to make a full and complete transcript of the record of said action and to certify the same to this Court for trial."

Upon the filing of this order in the state court, that court declined to grant the motion to surrender jurisdiction, holding that the case could not be legally removed to the circuit court of the United States, and it made the following order:

"In this case, it appears to the court that the circuit court of the United States has caused an order for the removal of the case to the circuit court of the United States upon petition setting forth that the defendant is a nonresident of the State of North Carolina, and it further appearing to the court, by

Page 190 U. S. 328

the admission of defendant, through its counsel, that the defendant has complied with the terms of the act of the Legislature of the State of North Carolina, being chapter 62 of the acts of the General Assembly of North Carolina at its session of 1899; it is thereupon considered by the court that the defendant is a corporation of this state by virtue of said act, and that it is not entitled to remove this cause to the federal court. It is further considered by the court that the courts of the State of North Carolina have jurisdiction of this cause, and this Court declines to surrender jurisdiction thereof. It is ordered by the court that a copy of this order be sent to the clerk of said circuit court of the United States by the clerk of this court."

The act of the Legislature of North Carolina, referred to in the foregoing order is set forth in full in the margin. *

Page 190 U. S. 329

It was admitted that defendant had complied with the terms of the act before the cause of action set out in the complaint of plaintiff had accrued.

When the case was thereafter called for trial in the state court,

Page 190 U. S. 330

a motion was again made to dismiss the same from that court because of the removal to the United States circuit court. The motion was again denied, and an exception taken by the defendant. The case was then tried in the state court, and resulted in a verdict for the plaintiff, upon which judgment was entered and exception taken to the verdict and to the entry of judgment. Defendant appealed from the judgment to the Supreme Court of the State of North Carolina, and assigned as error, among other things, the refusal of the trial court to recognize the removal and its trial of the cause after it had been legally removed to the federal court. The Supreme Court of North Carolina affirmed the judgment, 129 N.C. 336, and decided against the right claimed by defendant to a removal of the cause under the statute of the United States above referred to.

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