1. This Court has not jurisdiction of an appeal from the circuit
court of appeals where the jurisdiction of the district court was
invoked solely on the ground of diversity of citizenship. P.
268 U. S.
36.
2. A Maryland railway corporation, having purchased at
foreclosure the property and franchise of a West Virginia
corporation, declaring, pursuant to West Virginia statutes, that it
"would become a corporation as to said property" by the name of the
West Virginia corporation, and having become also the sole
stockholder of the latter, sued a West Virginia municipality to
enforce an alleged exemption of the property from taxes.
Held, that the district court had no jurisdiction, whether
the plaintiff were treated as in effect the West Virginia
corporation, suing as property owner, or as the Maryland
corporation suing as stockholder, since, in the latter case, the
West Virginia corporation would be an indispensable party
plaintiff, and in either case diversity of citizenship would be
lacking. P.
268 U. S.
38.
296 F. 74 reversed.
Review of a decree of the circuit court of appeals which
reversed a decree of the district court in favor of the railroad in
a suit to enjoin the city from levying taxes on certain railroad
property. The writ of certiorari was granted.
Page 268 U. S. 36
MR. JUSTICE BRANDEIS delivered the opinion of the Court.
This suit was commenced in the Circuit Court of the United
States for the District of West Virginia in 1894. The plaintiff is
the Baltimore & Ohio Railroad, alleged to be a Maryland
corporation; the defendant is the City of Parkersburg, a West
Virginia corporation. The relief sought was to enjoin the levying
of taxes assessed upon certain railroad property. The federal
jurisdiction was invoked solely on the ground of diversity of
citizenship. A temporary injunction issued upon the filing of the
bill. In 1895, the case was heard upon demurrer to the bill and
upon a motion to dissolve the injunction. In 1897, a decree was
entered which overruled the demurrer but made no order respecting
the injunction. Within 30 days thereafter, an answer was filed by
leave. Then the cause stood without further action for 23 years. In
1921 activities were resumed leisurely. In 1923, upon demurrers and
motions, the District Court for the Northern District of West
Virginia (to which the case had been transferred pursuant to § 290
of the Judicial Code), entered a final decree for the plaintiff.
The decree was reversed by the circuit court of appeals.
City
of Parkersburg v. Baltimore & O. R. Co., 296 F. 74. The
railroad appealed to this Court. It also filed a petition for a
writ of certiorari, consideration of which was postponed until the
hearing on the appeal.
The decision in both lower courts was rendered on the merits.
These we have no occasion to consider. There is no right of appeal
to this Court, because the jurisdiction of the trial court was
invoked solely on the ground
Page 268 U. S. 37
of diversity of citizenship. Judicial Code, § 128. The writ of
certiorari is granted. But, as the bill does not show that the
trial court had jurisdiction of the controversy, the decree of the
circuit court of appeals must be reversed with directions to remand
the cause to the district court.
The claim asserted by the bill is this. In 1855, the
Northwestern Virginia Railroad Company, a corporation organized
under the laws of Virginia, acquired from the Town of Parkersburg
an exemption from, or commutation of, municipal taxes on certain
property within its limits. In 1863, the railroad and the
municipality became domestic corporations of West Virginia upon the
organization of that state. In 1865, the property and franchises of
the railroad were purchased by the Baltimore & Ohio at a
foreclosure sale. Pursuant to the statutes of West Virginia then in
force, the Baltimore & Ohio declared "that it would become a
corporation as to said property, by the name of the Parkersburg
Branch Railroad Company." The immunity from taxation asserted in
the bill was claimed as an incident of the property acquired on
foreclosure, and also as having been conferred by ordinances
adopted and contracts made with the Parkersburg Branch Railroad.
The levy seems to have been made upon property of that company. It
was a West Virginia corporation.
* The bill sought
to enforce its right. The capacity in which the Baltimore &
Ohio sued to enforce the right to immunity was not stated clearly
in the bill. Apparently it sued either in its capacity as
Page 268 U. S. 38
owner (sole stockholder) of the West Virginia corporation or on
the theory that, as to the property purchased on foreclosure, it
became itself the Parkersburg Branch Railroad Company. In neither
view did the trial court have jurisdiction of the controversy.
If the plaintiff sued as the corporate owner of the property --
that is, as the Parkersburg Branch Railroad Company -- but under
the name of the Baltimore & Ohio, the trial court was without
jurisdiction as a federal court, because both the Branch Railroad
and the defendant were West Virginia corporations, and hence the
controversy was wholly between citizens of the same state. If the
Baltimore & Ohio sued as the Maryland corporation, owner of all
the stock in the Parkersburg Branch Railroad Company, the trial
court was without jurisdiction of the controversy because the
latter corporation, an indispensable party plaintiff, was not
joined.
Compare 85 U. S. Dows,
18 Wall. 626. And it could not have been joined.
Niles-Bement-Pond Co. v. Iron Moulders Union, 254 U. S.
77. For then one of the plaintiffs would have been a
citizen of West Virginia, there would no longer have been complete
diversity of citizenship, and the jurisdiction of the trial court
would have been ousted.
So far as appears, the Branch Railroad was neither merged in nor
consolidated with the Baltimore & Ohio. Nor was there a
compulsory domestication of the latter in West Virginia.
Martin's Administrator v. Baltimore & Ohio R. Co.,
151 U. S. 673. We
have therefore no occasion to consider the questions involved in
St. Louis & San Francisco v. James, 161 U.
S. 545;
Louisville, New Albany & Chicago Ry. Co.
v. Louisville Trust Co., 174 U. S. 552;
Southern Ry. Co. v. Allison, 190 U.
S. 326,
190 U. S. 337;
Missouri Pacific Ry. Co. v. Castle, 224 U.
S. 541.
Compare Memphis & Charleston R. Co. v.
Alabama, 107 U. S. 581;
Patch v. Wabash R. Co., 207 U. S. 277.
It would seem that the district court must, upon the remand of
the case to it, enter a decree of dismissal. But,
Page 268 U. S. 39
as the question whether the trial court had jurisdiction does
not appear to have been considered by either of the lower courts
and was not discussed by the parties here, our direction to the
circuit court of appeals is to remand the case to the district
court for further proceedings not inconsistent with this
opinion.
Reversed.
* Code of Virginia 1860, Tit. 18, c. 61, §§ 28, 29; Constitution
of West Virginia (1863) Art. 11, § 8; Baltimore & Ohio R. Co.,
Corporate History (1922) Vol. 1, pp. 243, 247.
See Chesapeake
& Ohio Ry. Co. v. Miller, 114 U.
S. 176,
114 U. S. 182,
114 U. S. 185,
and Acts of West Virginia -- 1891, c. 32, p. 57; 1889, c. 23, p.
81; 1887 (extra session) c. 73, p. 218; 1883, c. 12, p. 13; 1882,
c. 97, § 30, p. 277; 1881, c. 17, § 72, p. 237, and § 82, p. 240;
1877, c. 106, p. 138; 1872-73, c. 88, § 23, p. 228, c. 227, § 16,
p. 724; 1865, c. 73, p. 62.