Riverdale Cotton Mills v. Alabama & Georgia Mfg. Co. - 198 U.S. 188 (1905)
U.S. Supreme Court
Riverdale Cotton Mills v. Alabama & Georgia Mfg. Co., 198 U.S. 188 (1905)
Riverdale Cotton Mills v. Alabama
and Georgia Manufacturing Company
Argued April 5-6, 1905
Decided May 8, 1905
198 U.S. 188
A federal court exercising a jurisdiction apparently belonging to it, may thereafter, by ancillary suit, inquire whether that jurisdiction in fact existed, and may protect the title which it has decreed as against all parties to the original suit and prevent any of such parties from relitigating questions of right already determined.
Where parties litigate in a federal court whose jurisdiction is invoked
on the ground of diverse citizenship, alleged and admitted, the judgment or decree which is entered is conclusive, and cannot be upset by either of them in any other tribunal on the mere ground that diverse citizenship did not actually exist.
In an ancillary suit, a party to the original action cannot challenge the jurisdiction of the circuit court in the original action on the ground that its admission of citizenship was an error and that a correct statement would have disclosed a lack of jurisdiction.
Although, where two corporations of the same name, chartered by different states, exist and there has been no merger, the corporations are separate legal persons, the court may, where the circumstances as in this case justify it, look beyond the formal and corporate differences and regard substantial rights, rather than the mere matter of organization.
Federal tribunals are not moot courts, and parties having substantial rights must, when brought before those tribunals, present those rights, or they may lose them.
On February 7, 1866, an act passed the Alabama Legislature incorporating five persons named, their associates and successors, as "The Alabama & Georgia Manufacturing Company." On March 21, 1866, the Georgia Legislature incorporated the same individuals under the same name, "The Alabama & Georgia Manufacturing Company." The purposes of the two corporations were identical. Among others, the use of the water power of the Chattahoochee River, the boundary line between Alabama and Georgia, was contemplated, and the Georgia act specifically authorized the corporation
"to carry on any of the business and manufactures, or any branch or branches of the same, in this state, that said charter authorizes them to engage in or carry on in the State of Alabama."
On January 2, 1884, the Alabama & Georgia Manufacturing Company executed a trust deed conveying property situate partly in Georgia and partly in Alabama, but practically only a single plant, to J. J. Robinson, W. C. Yancey, and W. T. Huguley, as trustees, to secure the payment of sixty-five thousand dollars of the mortgage bonds. There is nothing in the trust deed to indicate whether it was executed by the Alabama corporation or the Georgia corporation, except it be the mention of West Point, Georgia, as the location of the company's office.
On February 28, 1890, the Huguley Manufacturing Company was incorporated under the laws of the State of Alabama, and subsequently acquired by purchase all the property included within the trust deed. Default having been made in the payment of interest on the bonds, Robinson, one of the trustees, and a citizen of Alabama, on January 21, 1891, filed a bill of foreclosure in the Circuit Court of the United States for the Northern District of Georgia against the Alabama & Georgia Manufacturing Company, the Huguley Manufacturing Company, each of which was alleged to have been created under the laws of the State of Georgia, and a resident and citizen of that state, and against W. T. Huguley, also averred to be a citizen of the State of Georgia, and all three residing within the Northern District of Georgia. In the bill, the plaintiff alleged that Yancey, one of the trustees, was dead; that Huguley, the other trustee, was interested adversely to the bondholders, and that plaintiff was therefore the only one authorized to bring the suit. A vast amount of litigation concerning the property has followed the commencement of this foreclosure suit, as partially appears from the following references: Robinson v. Alabama & G. Mfg. Co., 48 F. 12 (1891); Robinson v. Alabama & G. Mfg. Co., 51 F. 268; Alabama & G. Mfg. Co. v. Robinson, 56 F. 690 (1893); Robinson v. Alabama & G. Mfg. Co., 67 F. 189 (1894); Alabama & G. Mfg. Co. v. Robinson, 72 F. 708 (1896); Robinson v. Alabama & G. Mfg. Co., 89 F. 218; Huguley Mfg. Co. v. Galeton Cotton Mills, 175 U. S. 726 (1899); Riverdale Cotton Mills v. Alabama & G. Mfg. Co., 11 F. 431 (1901); Huguley Mfg. Co. v. Galeton Cotton Mills, 184 U. S. 290 (1902); In re Huguley Mfg. Co., 184 U. S. 297 (1902); In re Huguley Mfg. Co., 127 F. 497 (1904).
On May 2, 1901, the Alabama & Georgia Manufacturing Company of Alabama and the Huguley Manufacturing Company
of the same state filed their bill in the chancery court of the First District of the Northeastern Division of the State of Alabama, in which they alleged that the plaintiff the Alabama & Georgia Manufacturing Company was at one time the owner of the property included within the trust deed hereinbefore referred to; that it executed that deed to the parties named as trustees; that a foreclosure suit was commenced by one of the trustees, J. J. Robinson, in the United States Circuit Court for the Northern District of Georgia; that the parties named as defendants therein were the Alabama & Georgia Manufacturing Company, alleged to be a corporation organized under the laws of Georgia, the said Huguley Manufacturing Company, and W. T. Huguley. The bill set out with some detail the proceedings in the Circuit Court of Georgia, but alleged that they were null and void so far as concerns the title of the plaintiffs in that suit. The bill sought to redeem the property described from the lien of the bonds and trust deed. On June 10, 1901, this petitioner, a corporation which had acquired all the title to the property described in the trust deed, passing under the foreclosure proceedings hereinbefore referred to, filed in the Circuit Court for the Northern District of Georgia an ancillary bill to restrain the further prosecution of the suit in the state court in Alabama. A temporary injunction was issued which, on final hearing, was made perpetual. Thereupon defendants took an appeal to the Circuit Court of Appeals for the Fifth Circuit, which reversed the decree of the circuit court and ordered that the case be remanded to that court with instructions to dismiss the bill. The case was then brought here on certiorari.