Bankers Trust Co. v. Texas & Pacific Ry. Co.
241 U.S. 295 (1916)

Annotate this Case

U.S. Supreme Court

Bankers Trust Co. v. Texas & Pacific Ry. Co., 241 U.S. 295 (1916)

Bankers Trust Company v.

Texas & Pacific Railway Company

No. 889

Argued April 12, 13, 1916

Decided May 22, 1916

241 U.S. 295

Syllabus

In a suit brought by a corporation existing under the laws of New York, and therefore a citizen of that state, against the Texas & Pacific Railway Company, incorporated and existing under an act of Congress and certain supplemental and amendatory acts, held that:

The provision in § 1 of the Act of 1871 under which the Texas & Pacific

Page 241 U. S. 296

Railway was incorporated, that such company may sue and be sued in all courts of law and equity within the United States, was not intended to confer jurisdiction upon any particular court, but merely to render the company capable of suing and being sued in any court whose jurisdiction as otherwise competently defined was adequate to the occasion.

It is reasonable to presume that, if Congress has the purpose to take a class of suits out of usual jurisdictional restrictions relating thereto, it will make its purpose plain.

Under the Constitution, Congress possesses power to invest subordinate federal courts with original jurisdiction of suits at law or equity arising under the Constitution, laws, or treaties of the United States, and this power has been exercised at various times. Such jurisdiction has, by § 24, Judicial Code, been given to and is now vested in the district courts subject to a restriction as to the amount in controversy.

A corporation chartered by an act of Congress is not only a creature of that law, but all its rights are dependent thereon, and a suit by or against such a corporation is one arising under a law of the United States.

Section 5 of the Act of January 28, 1915, c. 22, 38 Stat. 583, providing that no court of the United States shall have jurisdiction of any suit by or against any railroad company on the ground that it was incorporated under an act of Congress, is amendatory of the Judicial Code, and renders the fact of incorporation under an act of Congress a negligible factor in determining whether a suit by or against a railroad company is one arising under a law of the United States so as to give the district court jurisdiction thereof.

A corporation such as the Texas & Pacific Railway Company, incorporated under acts of Congress and whose activities and operations are not by its charter confined to any state, but are intended to be and are carried on in different states, is not a citizen of a state within the meaning of the jurisdictional statute.

While such a corporation is a citizen of the United States in the sense that a corporation organized under the law of a state is a citizen of that state, it is not within the declaration of the Fourteenth Amendment that native born and naturalized citizens of the United States are citizens of the state in which they reside.

Congress has not clothed railroad corporations organized under acts of Congress with state citizenship for jurisdictional purposes, as it has done in respect to National banks.

A suit by a citizen of a state against a railroad corporation organized

Page 241 U. S. 297

and existing under an act of Congress is not a suit between citizens of different states of which the district court has jurisdiction under § 24, Judicial Code, as amended by the Act of January 28, 1915.

The facts, which involve the jurisdiction of the district court of a suit against a corporation incorporated by a statute of the United States, are stated in the opinion.

Page 241 U. S. 301

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