Matter of Dunn
212 U.S. 374 (1909)

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U.S. Supreme Court

Matter of Dunn, 212 U.S. 374 (1909)

Matter of Dunn

No. 10, Original

Argued January 11, 1909

Decided February 23, 1909

212 U.S. 374

Syllabus

As a corporation created by act of Congress derives all its rights from the law creating it, suits brought against it, on account of its action, arise under the Constitution and laws of the United States and are removable into the federal court. Osborn v. Bank of United States, 9 Wheat. 738.

This Court will judicially notice that a defendant corporation was incorporated by an act of Congress, even though the petition fails so to do.

The right to remove depends upon whether the suit could have been brought originally in the Circuit Court of the United States. Cochran v. Montgomery County,199 U. S. 260.

Where the Circuit Court has jurisdiction by reason of the fact that the defendant is a corporation created by an act of Congress, the joinder of other defendants, citizens of plaintiff's state does not prevent removal to the Circuit Court if there is no separable controversy and all the defendants unite in the petition: the federal character permeates the entire case and affects all parties defendant.

When this Court is called upon to exercise its own judgment, it will not be controlled by decisions of state courts.

Page 212 U. S. 375

Notwithstanding that it maintains an office in another state, the defendant corporation, which was organized under an act of Congress, is suable in the district designated by it as where its office is located and in which its agent resides and its directors meet to affirm their acts adopted in the other state.

The application of § 10 of the Act of March 11, 1902, 32 Stat. 68, c. 183, is not limited to local actions described in § 8 of the Act of March 3, 1875, c. 137, 18 Stat. 470.

This is an original application to this Court for a rule, directed to the District Judge of the United States for the Northern District of Texas, directing him, and also the circuit court of the United States for that district, to show cause why a mandamus should not issue commanding that judge and that court, and each of them, to remand a certain action at law to the District Court of Dallas County, Texas, and to desist from exercising any further jurisdiction in the action, except the entering of the order remanding it to the state court. Upon such application, a rule was made by this Court that the judge and the court should show cause, in accordance therewith.

Upon service of the rule being made, a return has been duly filed by the district judge, acting for himself and as judge of the circuit court.

In the papers used upon the application for the writ and in the return of the district judge made thereto the following facts are set forth:

An action was brought in the state court in the County of Dallas and State of Texas on the first day of August, 1907, against the Texas & Pacific Railway Company and two individuals, C. W. Slayter and Carl Rasmussen, who were, respectively, engineer and fireman on the Texas & Pacific Railway, to recover damages for the negligent killing of J. J. Dunn, the husband of one of the plaintiffs and the father of others. The action was brought against the company and the individual defendants jointly, and the petition in the state court alleged that plaintiffs resided in Dallas County, Texas, of which county the plaintiffs were inhabitants and residents, and that

Page 212 U. S. 376

the defendant the Texas & Pacific Railway Company was a corporation duly incorporated, with an office and local agent in Dallas County, Texas; that the defendant Slayter was a resident and citizen and inhabitant of Harrison County, in said state, and that the defendant Rasmussen was also a resident, citizen, and inhabitant of Harrison County, in the said state. The petition then alleged that Dunn was killed directly and proximately through the negligence of the defendants, who were guilty of negligence in permitting and causing the engine and train to run into, against, and over the said Dunn, and injuring him so that he was instantly killed. The petition then averred certain particular acts of negligence on the part of the defendants and sought to recover from them on account of such negligent killing the sum of $85,000. All of the defendants were duly served with process, and within the time required by law they all joined in a petition to the state court to remove the cause to the Circuit Court of the United States for the Northern District of Texas (which included Dallas County), and presented bonds for such removal. The ground for the removal was alleged to be that the Texas & Pacific Railway Company was a corporation organized and existing under the laws of the United States by virtue of "An Act to Incorporate the Texas & Pacific Railroad Company, and to Aid in the Construction of Its Road, and for Other Purposes," approved March 3, 1871, and acts amendatory thereof and supplemental thereto, by one of which the name and style of the company was changed to the Texas & Pacific Railway Company. The petition alleged that the matter in dispute in the case exceeds, exclusive of interest and costs, the sum of $2,000, and that the suit arose under the laws of the United States, and more especially under the law of the United States constituting the charter of the defendant and under which it was incorporated; that, under the laws of the United States, the Circuit Court of the United States for the Northern District of Texas had original jurisdiction of the suit. To the granting of this application the plaintiffs objected, among other things, upon the ground that

Page 212 U. S. 377

the plaintiffs had not the right at the time of the commencement of the suit, to bring it in the Circuit Court of the United States for the Northern District of Texas against either of the defendants Slayter and Rasmussen, and that it appears, from the plaintiffs' petition in the case, that it is not removable to the Circuit Court of the United States for the Northern District of Texas at the instance of either of the individual defendants, nor at the instance of the railway company, and that it also appears from the defendants' own petition for the removal that the case is not removable to the Circuit Court of the United States for the Northern District of Texas at the instance of either the defendants Slayter or Rasmussen, or even at the instance of the defendant railway company, or of all of them together.

The state court, while holding that the petition to remove to a federal court was in all respects regular, and that it was filed in due time, and that a good and sufficient bond had been filed, held that the petition did not show proper grounds for removal of the suit, and the application for removal was denied.

Thereupon the defendants in the suit in the state court, on January 13, 1908, filed in the office of the clerk of the Circuit Court of the United States for the Northern District of Texas at Dallas, Texas, a copy of the record in that suit. Before any other proceedings were had in the case in the circuit court of the United States, and on the twentieth of January, 1908, the plaintiffs filed in that court a motion to remand the case. While expressly denying that the circuit court had jurisdiction of the case, the plaintiffs moved the court to remand it for the reason that the suit did not properly involve a dispute or controversy properly within the jurisdiction of the court, because, as was said, it did not appear from the record or from the defendants' petition to remove the cause, that any of the defendants were inhabitants of the Northern District of Texas, and that there was no denial by the defendants of plaintiffs' allegation that the individual defendants, Slayter and Rasmussen, were inhabitants of Harrison County, Texas, which county is in Eastern District

Page 212 U. S. 378

of Texas. It was also averred that it appeared upon the face of the record that there was no separable controversy as to either or any of the defendants. The plaintiffs further averred that the railway company had its principal office in the City of New York, in the Southern District of New York and State of New York, of which district it was an inhabitant, and that it was not an inhabitant of the Northern District of Texas, and could not be sued by the plaintiff in that district by reason of its being a federal corporation; hence it had not the right to remove the cause to the federal court.

The defendants answered the petition to remand, and averred that the railway company was a resident of and had its domicil in the Northern District of Texas, and that the individual defendants were jointly sued with the railway company, a resident of the District of Dallas. That no claim of separable controversy or diverse citizenship was made, but the application to remove was based upon the existence of a federal question as to all of the defendants. That, although the plaintiffs' petition in the case simply alleged that the railway company was a corporation duly incorporated, yet defendants alleged that it had an office and local agent in Dallas County, Texas, and it was urged that the court would take judicial notice of the federal character of the defendant, notwithstanding the plaintiffs had neglected to allege it, and that the record showed a general liability charged by the plaintiffs as against all the defendants, and that the federal question as to all of such defendants was thereby raised.

The motion made by the plaintiffs to remand the cause came on to be heard by the district judge holding the circuit court, and was overruled and denied.

No further proceedings have been had in the case in the circuit court of the United States, and the case also stands upon the docket of the state court, subject to call and disposition.

Upon application, the circuit court issued an injunction restraining the plaintiffs from continuing any proceedings in the state court in the action.

Page 212 U. S. 379

A motion was made to dissolve the injunction, which was denied. Madisonville &c. v. St. Bernard &c.,196 U. S. 239.

The plaintiffs insist that mandamus is the only adequate remedy under the facts stated, by which they can obtain relief and proceed with the trial of their cause in the state court.

Page 212 U. S. 383

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