Jurisdiction of a Circuit Court of the United States must appear
affirmatively from distinct allegations, or facts clearly proven,
and is not to be established argumentatively or by mere inference,
and when jurisdiction depends upon diverse citizenship, absence of
sufficient averments, or of facts in the record, showing such
diversity is fatal, and the defect cannot be waived by the parties,
nor can consent confer jurisdiction.
For the purpose of suing and being sued in the circuit court of
the United States, the members of a local corporation are
conclusively presumed to be citizens of the state by whose law it
was created and in which alone the corporate body has a legal
existence.
While this Court is not conclusively bound by the judgment of
the highest court of a state as to what is and is not a corporation
of that state within
Page 195 U. S. 208
the jurisdictional rule, it will accept such judgment unless a
contrary view is demanded by most cogent reasons.
An averment that a board of trustees of a state institution was
created by and exists under the laws of a state other than that of
complainant, and is a citizen of that state, without alleging that
it is a corporation of the state, or that each individual member of
the board is a citizen of that state, and where the highest court
of the state has decided that the board, although possessing some
of the attributes of a corporation, is not a corporation of such
state, and
held insufficient to sustain the jurisdiction
of the Circuit Court on the ground of diverse citizenship.
Where a board of trustees of an institution can by the
legislative act creating it, sue and be sued collectively and is
bound by the judgment, a citizen of another state can sue it as
such board collectively, without bringing in all the members
thereof, in a circuit court of the United States, provided it
affirmatively appears that each member of the board is a citizen of
a state other than that of complainant.
The facts are stated in the opinion of the Court.
MR. JUSTICE HARLAN delivered the opinion of the Court.
This case is before us upon certified questions relating to the
jurisdiction of the circuit court.
The suit is in equity, and the plaintiff is a citizen of
Michigan. The defendants are George Folsom, a citizen of
California, and the Board of Trustees of the Ohio state
University.
The object of the bill was to effect the partition of certain
lands claimed by the plaintiff and the defendant Folsom as tenants
in common, but held adversely by the defendant board of trustees.
The plaintiff sought to have the title determined as preliminary to
partition.
The board of trustees appeared and demurred to the bill as not
making a case entitling the plaintiff to any relief against it.
Page 195 U. S. 209
The demurrer was sustained, and the bill dismissed, the decree
reciting that neither the plaintiff nor the defendant Folsom had
any title or interest in the lands described in the bill, or in the
rents or profits thereof, but that the same belonged to the Board
of Trustees of the Ohio State University. Folsom entered his
appearance in circuit court, but made no defense, nor was any
decree taken by default against him.
From that decree the plaintiff and the defendant Folsom prayed
and perfected an appeal.
It is certified that the jurisdiction of the circuit court was
wholly dependent upon diversity of citizenship, and that neither
defendant objected in the circuit court that the case was not of
equitable cognizance, or that the court, as a federal court, was
without jurisdiction to determine it. But in the circuit court of
appeals, Folsom insisted, among other things, that the circuit
court
"had no cognizance of the cause because the requisite diversity
of citizenship does not exist, the Board of Trustees of the Ohio
state University not being a corporation of Ohio within the
jurisdictional rule imputing to the members of that board
citizenship of the state under whose law it is organized."
The circuit court of appeals propound the following
questions:
1. Does the bill sufficiently aver that the Board of Trustees of
Ohio State University is a corporation of the State of Ohio, or
does it aver facts which, in legal intendment, constitute said body
a corporation of the State of Ohio, within the rule that a suit by
or against a corporation in a court of the United States is
conclusively presumed, for the purpose of litigation, to be one by
or against citizens of the state creating the corporation?
2. If the said board of trustees be not such a corporation as is
required by the jurisdictional rule referred to, may this suit be
maintained against it as "The Board of Trustees of the Ohio State
University," without bringing the persons constituting the board
before the court as defendants?
Page 195 U. S. 210
3. If the said board may sue or be sued in a federal court by
the name of "The Board of Trustees of the Ohio State University,"
although not constituting a corporation of the State of Ohio,
within the jurisdictional rule referred to in the first question,
do the facts stated on the face of the bill sufficiently show that
the persons composing said board of trustees are citizens of Ohio,
or should the court take notice of the law creating said board of
trustees, and of other laws of Ohio defining the qualification of
such trustees, and by legal intendments find that the persons
constituting said board when this bill was filed were in fact
citizens of Ohio, and that the requisite diversity of citizenship
existed to give jurisdiction to the circuit court?
That the jurisdiction of a circuit court of the United States is
limited in the sense that it has no jurisdiction except that
conferred by the Constitution and laws of the United States; that a
cause is presumed to be without its jurisdiction unless the
contrary affirmatively appears; that such jurisdiction, or the
facts upon which, in legal intendment, it rests, must be distinctly
and positively averred in the pleadings, or should appear
affirmatively and with equal distinctness in other parts of the
record, it not being sufficient that jurisdiction may be inferred
argumentatively, and that, for the purposes of suing and being sued
in a circuit court of the United States, the members of a local
"corporation" are conclusively presumed to be citizens of the state
by whose laws it was created, and in which alone the corporate body
has a legal existence, are propositions so firmly established that
further discussion of them would be both useless and inappropriate.
Brown v.
Keene, 8 Pet. 112,
33 U. S. 115;
Louisville, Cincinnati &
Charleston R. Co. v. Letson, 2 How. 497;
Marshall v. Baltimore &
Ohio R. Co., 16 How. 314;
Lafayette
Insurance Co. v. French, 18 How. 404,
59 U. S. 405;
Covington Drawbridge Co. v.
Shepherd, 20 How. 227;
Ohio &
Mississippi R. Co. v. Wheeler, 1 Black 286,
66 U. S. 296;
Insurance Co. v.
Ritchie, 5 Wall. 541;
Robertson v. Cease,
97 U. S. 646,
97 U. S. 648;
Steamship Co. v. Tugman, 106 U. S. 118,
106 U. S.
120;
Page 195 U. S. 211
King Bridge Co. v. Otoe County, 120
U. S. 226;
Parker v. Ormsby, 141 U. S.
81;
Continental Nat. Bank v. Buford,
191 U. S.
120.
It is equally well established that when jurisdiction depends
upon diverse citizenship, the absence of sufficient averments or of
facts in the record showing such required diversity of citizenship
is fatal, and cannot be overlooked by the court, even if the
parties fail to call attention to the defect, or consent that it
may be waived.
Mansfield, C. & L.M. Ry. Co. v. Swan,
111 U. S. 379;
Martin v. Baltimore & Ohio R. Co., 151 U.
S. 673,
151 U. S. 689;
Powers v. Chesapeake & Ohio Ry. Co., 169 U. S.
92,
169 U. S. 98. As
late as in
Minnesota v. Northern Securities Co.,
194 U. S. 48,
194 U. S. 62-63,
we said, both parties insisting upon the jurisdiction of the
circuit court:
"Consent of parties can never confer jurisdiction upon a federal
court. If the record does not affirmatively show jurisdiction in
the circuit court, we must, upon our own motion, so declare and
make such order as will prevent that court from exercising an
authority not conferred upon it by statute."
So that the fact stated in the certificate, that neither party
in the circuit court objected to its jurisdiction, is of no
consequence.
Two other cases illustrating the above rules may be specially
referred to.
In
Chapman v. Barney, 129 U. S. 677,
129 U. S. 682,
which was a suit in the Circuit Court for the Northern District of
Illinois by the United States Express Company against a citizen of
Illinois, the declaration alleged that the company was organized
under and by virtue of the laws of New York, and was a citizen of
that state. The Court said:
"On looking into the record, we find no satisfactory showing as
to the citizenship of the plaintiff. The allegation of the amended
petition is that the United States Express Company is a joint-stock
company, organized under a law of the State of New York, and is a
citizen of that state. But the express company cannot be a
citizen of New York within the meaning of the statutes
regulating jurisdiction unless it be a corporation. The allegation
that the company
Page 195 U. S. 212
was organized under the laws of New York is not an allegation
that it is a corporation. In fact, the allegation is that the
company is not a corporation, but a joint-stock company -- that is,
a mere partnership. And, although it may be authorized by the laws
of the State of New York to bring suit in the name of its
president, that fact cannot give the company power, by that name,
to sue in a federal court. The company may have been organized
under the laws of the State of New York, and may be doing business
in that state, and yet all the members of it may not be citizens of
that state. The record does not show the citizenship of Barney or
of any of the members of the company."
In
Great Southern Fire Proof Hotel Co. v. Jones,
177 U. S. 449,
177 U. S.
456-457, the bill alleged that the plaintiffs Jones and
others were members of a limited partnership association, doing
business, by their firm name, under the authority of a Pennsylvania
statute, and that such association was a citizen of that state.
Although the Constitution of Pennsylvania provided that the term
"corporation," as used in a certain article of that instrument,
should be construed as including all joint-stock companies or
associations having any of the powers or privileges of corporations
not possessed by individuals or partnerships, and although the
Supreme Court of Pennsylvania had held that it would not be
improper to call a limited partnership, created under its statutes,
a
quasi-corporation, having some of the characteristics of
a corporation, this Court, without considering the merits of the
case, said:
"When the question relates to the jurisdiction of a circuit
court of the United States as resting on the diverse citizenship of
the parties, we must look, in the case of a suit by or against a
partnership association, to the citizenship of the several persons
composing such association. . . . That a limited partnership
association created under the Pennsylvania statute may be described
as a '
quasi-corporation,' having some of the
characteristics of a corporation, or as a 'new artificial person,'
is not a sufficient reason for regarding it as a corporation within
the jurisdictional rule
Page 195 U. S. 213
heretofore adverted to. That rule must not be extended. We are
unwilling to extend it so as to embrace partnership associations. .
. . We therefore adjudge that, as the bill does not make a case
arising under the Constitution and laws of the United States, it
was necessary to set out the citizenship of the individual members
of the partnership association of Jones & Laughlins, Limited,
which brought this suit."
The judgment was reversed upon the ground that the jurisdiction
of the circuit court did not affirmatively appear from the record.
Upon the return of the cause to the court of original jurisdiction,
the bill was amended, and it was alleged that each member of the
partnership was a citizen of Pennsylvania. The case was then heard
upon its merits, and was again brought here and determined.
Great Southern Fire Proof Hotel Co. v. Jones, 193 U.
S. 532.
In the light of these decisions, we come to the question whether
the jurisdiction of the circuit court affirmatively appears in this
case. If it does not, it must be held that that court had no
authority to take cognizance of it.
The bill alleges that the defendant the Board of Trustees of the
Ohio State University
"was created by, and exists under and by virtue of, a law duly
passed and enacted by the Legislature of said State of Ohio, on
March 22, 1870, and now known and designated as sections 4105-4109
and following of the Revised Statutes of said State of Ohio, and
the subsequent acts amendatory of and supplementary thereto;"
that said board,
"under and by virtue of the aforesaid laws and enactments, and
at all times since its creation and establishment, is fully
authorized and empowered to sue and be sued, to contract and be
contracted with, to make and use a common seal, and to alter the
same at its pleasure, and to adopt bylaws, rules, and regulations
for the government of said college, and to have the general
supervision of all lands, buildings, and other property belonging
to said college, and of receiving by gift, devise, or bequest,
moneys, lands, and other properties for its benefit and for the
benefit of those under its charge, subject,
Page 195 U. S. 214
however, to the provisions, exceptions, and restrictions
contained in section twenty and five thousand nine hundred and
fifteen of the Revised Statutes of the State of Ohio,"
and is "a citizen of and domiciled in the State of Ohio." 67
O.L. 20; 75 O.L. 126; R.S. Ohio §§ 4105
et seq.
Do those averments, taken in connection with the statutes of
Ohio relating to the defendant board -- of the provisions of which
statutes judicial notice may be taken,
Hanley v. Donoghue,
116 U. S. 1,
116 U. S. 6 --
sufficiently show that the circuit court was entitled to take
cognizance of this case?
If the defendant board had been specifically averred to be, and
was in fact, a corporation created by and existing under the laws
of Ohio, then, within the meaning of the adjudged cases, the
controversy would have been one between citizens of different
states, and consequently within the jurisdiction of the circuit
court; for, in that case, the legal presumption would be that the
trustees were citizens of the state by which the corporation was
brought into existence, and no averment or evidence to the contrary
would be admissible for the purpose of withdrawing the suit from
the jurisdiction of the circuit court.
Ohio &
Miss. R. Co. v. Wheeler, 1 Black 286,
66 U. S. 296.
Here, the averment is only that the defendant board of trustees is
a citizen of and domiciled in Ohio, not that the trustees
themselves are citizens of that state. That averment alone is not
sufficient. In
Lafayette Ins. Co. v.
French, 18 How. 404,
59 U. S. 405,
which was a suit brought in the Circuit Court of the United States
for the District of Indiana, the declaration alleged that the
plaintiffs were citizens of Ohio, and that the defendant, the
Lafayette Insurance Company, was a citizen of Indiana. This Court,
speaking by Justice Curtis, said:
"This averment is not sufficient to show jurisdiction. It does
not appear from it that the Lafayette Insurance Company is a
corporation, or, if it be such, by the law of what state it was
created. The averment that the company is a citizen of the State of
Indiana can have no sensible meaning attached to it. This Court
does not hold that either a voluntary association of
Page 195 U. S. 215
persons or an association into a body politic, created by law,
is a citizen of a state within the meaning of the
Constitution."
It is vital that the corporate character of the collective body
should be averred or shown.
The fundamental inquiry, therefore, is whether the defendant
board of trustees is a "corporation" within the jurisdictional rule
that admits of a corporation's being regarded, for purposes of
suing and being sued in the courts of the United States, as a
citizen of the state under and by the laws of which it was created.
The pleadings, we have seen, do not in terms aver the board to be a
corporation -- only that it is a citizen of and domiciled in Ohio,
and to have been created as a collective body by the laws of that
state, with power to sue and be sued by the name of the Board of
Trustees of the Ohio State University. Those laws must therefore be
examined in order to ascertain whether, for purposes of suit in the
circuit court of the United States, the board may be deemed a
corporation of Ohio within the meaning of the above cases.
In determining this question, we are confronted with the fact
that the statute creating the defendant board was clearly a
special, as distinguished from a general, act, and that the
Constitution of Ohio forbade the passage of any special act
conferring corporate powers. Ohio Const. Art. XIII, § 1. So that
the board of trustees cannot be held to have been made a
corporation or endowed with corporate powers without holding that
the act by which it was created was invalid under the Constitution
of Ohio, whereas the Supreme Court of Ohio have adjudicated that
the act was valid as not conferring, and as not intended to confer,
corporate powers on the board.
This question was presented in
Neil v. Ohio Agricultural and
Mechanical College, (1876) 31 Ohio St. 15, 21, which was the
original name of the Ohio State University. The validity of the act
creating the board was there brought in question as having, to all
intents and purposes, created a corporation, and clothed it with
corporate powers and privileges. But the Supreme Court of Ohio
said:
Page 195 U. S. 216
"We are not able to yield our assent to this construction of the
statute. The act is entitled 'An Act to Establish and Maintain an
Agricultural and Mechanical College in Ohio.' It creates a board of
trustees, to be appointed by the governor, by and with the advice
and consent of the senate, and commits to such board the
government, control, and general management of the affairs of the
institution, and while the statute authorizes the board to make
contracts for the benefit of the college, and to maintain actions,
if necessary, to enforce them, and to exercise other powers similar
to those conferred on bodies corporate, it does not assume to, nor
does it in fact, create or constitute such board of trustees a
corporation, and hence does not clothe it with corporate functions
or powers.
State ex Rel. Attorney General v. Davis, 23
Ohio St. 434. The college is a state institution, designed and well
calculated to promote public educational interests, established for
the people of the whole state, to be managed and controlled by such
agencies as the legislature, in its wisdom, may provide. Similar
powers, but perhaps less extensive, because less required, are
conferred on the trustees of the various hospitals for the insane
(73 O.L. 80), and on the board of managers of the Ohio Soldiers'
and Sailors' Orphans' Homes (67 O.L. 53), and other institutions of
the state. The powers thus conferred are essentially necessary to
accomplish the objects for which these institutions were
established. The power to establish them is found clearly granted
in the seventh article of the constitution."
The article here referred to gave the legislature power to
establish benevolent and other state institutions.
Thus, upon an issue distinctly made, the Supreme Court of Ohio
has adjudged that the defendant board is not, and was not intended
to be made, a corporation of the state, but only an agency to
manage and control a state institution as the state may direct or
provide. And the interpretation of the state constitution upon
which that judgment rests has never been modified by that
court.
While the state court may not conclusively determine for
Page 195 U. S. 217
this Court what is and what is not a corporation within the
meaning of the jurisdictional rule that a corporation, for purposes
of suing and being sued in the courts of the United States, is,
under the Constitution and laws of the United States, to be deemed
a citizen of the state by whose laws it is created, nevertheless,
this Court should accept the judgment of the highest court of a
state upon the question whether a particular body created by its
laws is or is not a corporation, by virtue of those laws, unless a
contrary view is demanded by most cogent reasons involving or
affecting the constitutional and statutory jurisdiction of the
federal courts. No such reasons exist in this case, and, accepting
the above decision of the Supreme Court of Ohio as correctly
interpreting the Constitution and laws of that state, we hold that,
while the defendant board is clothed with some, it is not clothed
with all, of the functions belonging to technical corporations, and
is not such a corporation as may sue and be sued in a circuit court
of the United States as a citizen of Ohio. A contrary ruling would,
we apprehend, produce confusion and embarrassment in litigation
relating to those public state institutions or agencies in Ohio
which, according to the decision of its highest court, were not
endowed, nor intended to be endowed, with corporate powers.
It is contended, however, that the bill sufficiently shows that
the persons constituting the Board of Trustees of the Ohio State
University were in fact citizens of Ohio, and therefore, as the
board had power to sue and be sued, and to contract and be
contracted with, in its collective name, the requisite diversity of
citizenship sufficiently appeared from the pleadings. This
contention is not warranted by any distinct averments in the bill.
The bill contains no such averment. As already stated, it alleges
that the board is a citizen of Ohio, not that the trustees are
citizens of the state. As already stated, the bill does not in
terms even allege that the board is a corporation, although it
shows that it possesses some of the characteristics of
corporations. The Constitution of Ohio provides
Page 195 U. S. 218
that no person shall be elected or appointed to any office in
the state unless he possesses the qualifications of an elector, and
an elector must be a citizen of the state, Const. Art. XV, § 4,
Art. V, § 1; therefore it must be taken not only that each trustee
of the Ohio State University holds an office within the meaning of
the state constitution, but is in fact a citizen of that state, and
the allegation that the board was created by, and existed as, an
organized body under the laws of Ohio was equivalent to an
allegation that the trustees are each and all citizens of Ohio.
Such is the process of reasoning by which it is attempted to
support the jurisdiction of the circuit court in the present case.
But it is settled that the jurisdiction of a court of the United
States must appear from distinct allegations, or from facts clearly
proven, and is not to be established argumentatively or by mere
inference. The presumption is that a cause is without the
jurisdiction of a circuit court of the United States unless the
contrary affirmatively and distinctly appears.
Brown
v. Keene, 8 Pet. 115, and other cases above
cited.
For the reasons stated, the first question must be answered in
the negative. To the second question, our answer is that as the
board was entitled to sue and be sued by their collective name, and
would be bound by any judgment rendered against it in that name,
the jurisdiction of the circuit court would have sufficiently
appeared, so far as the pleadings were concerned, without bringing
the several persons constituting the board before the court as
defendants, provided the bill had contained the additional
allegation that each individual trustee was a citizen of Ohio. Each
branch of the third question must be answered in the negative.
These answers will be certified to the circuit court of appeals,
with liberty to that court to authorize such amendment of the bill
in the circuit court as will show jurisdiction.
It is so ordered.