By the law of Pennsylvania, the River Delaware is a public
navigable river, held by its joint sovereigns in trust for the
public.
Riparian owners in that state have no title to the river or any
right to divert its waters unless by license from the states.
Such license is revocable, and in subjection to the superior
right of the state to divert the water for public improvements,
either by the state directly or by a corporation created for that
purpose.
The proviso to the provincial acts of Pennsylvania and New
Jersey, of 1771 does not operate as a grant of the usufruct of the
waters of the river to Adam Hoops and his assigns, but only as a
license, or toleration of his dam.
As, by the laws of his own state, the plaintiff could have no
remedy against a corporation authorized to take the whole waters of
the river for the purpose of canals, or improving the navigation,
so neither can he sustain a suit against a corporation created by
New Jersey for the same purpose, who have taken part of the
waters.
The plaintiffs, being but tenants at sufferance in the usufruct
of the water to the two states who own the river as tenants in
common, are not in a condition to question the relative rights of
either to use its waters without consent of the other.
This case is not intended to decide whether a first licensee for
private emolument can support an action against a later licensee of
either sovereign or both, who, for private purposes, diverts the
water to the injury of the first.
The facts in the case are set forth in the opinion of the
Court.
Page 55 U. S. 87
MR. JUSTICE GRIER delivered the opinion of the Court.
The plaintiffs in error, who were plaintiffs below, are
owners
Page 55 U. S. 88
of certain mills in Pennsylvania opposite to the City of
Trenton, in New Jersey. These mills are supplied with water from
the Delaware River by means of a dam extending from the
Pennsylvania shore to an island lying near and parallel to it and
extending along the rapids to the head of tidewater.
The plaintiffs, in their declaration, show title to the property
under one Adam Hoops, who had erected his mill and built a dam in
the river previous to the year 1771. In that year, the Provinces of
Pennsylvania and New Jersey, respectively, passed acts declaring
the River Delaware a common highway for purposes of navigation up
and down the same, and mutually appointing commissioners to improve
the navigation thereof, with full power and authority to remove any
obstructions whatsoever, natural or artificial, and subjecting to
fine and imprisonment any person who should set up, repair, or
maintain any dam or obstruction in the same, provided
"that nothing herein contained shall give any power or authority
to the commissioners herein appointed, or any of them, to remove,
throw down, lower, impair, or in any manner to alter a mill dam
erected by Adam Hoops, Esq., in the said River Delaware between his
plantation and an island in the said river nearly opposite to
Trenton, or any mill dam erected by any other person or persons in
the said river, before the passing of this act, nor to obstruct, or
in any manner to hinder the said Adam Hoops, or such other person
or persons, his or their heirs and assigns from maintaining,
raising, or repairing the said dams respectively or from taking
water out of the said river for the use of the said mills and
waterworks erected as aforesaid, and none other."
The declaration avers that by these acts of the provincial
legislatures, the said Hoops, his heirs and assigns, became
entitled to the free and uninterrupted enjoyment and privilege of
the River Delaware for the use of the said mills &c., without
diminution or alteration by or from the act of said Provinces, now
States of Pennsylvania and New Jersey, or any person or persons
claiming under them or either of them. Nevertheless, that the
defendants erected a dam in said river above plaintiffs' mills and
dug a canal and diverted the water, to the great injury &c.
The defendants are a corporation chartered by New Jersey for the
purpose of "constructing a canal from the waters of the Delaware to
those of the Raritan, and of improving the navigation of said
rivers." They admit the construction of the canal and the diversion
of the waters of the river for that purpose, but demur to the
declaration, and set forth as causes of demurrer:
"That the Act of the Legislature of the then Province of
Page 55 U. S. 89
Pennsylvania passed March ninth in the year of our Lord one
thousand seven hundred and seventy one, and the Act of the then
Province of New Jersey passed December twenty-first in the year of
our Lord one thousand seven hundred and seventy-one, as set forth
in said amended fifth count, do not vest in the said Adam Hoops or
in his heirs or assigns the right and privilege to the use of the
water of the River Delaware without diminution or alteration, by or
from the act of the then Province, now State, of Pennsylvania, or
of the then Province, now State, of New Jersey or of any person or
persons claiming under either of them or of any person or persons
whomsoever, as averred in the said amended fifth count of the said
declaration. And also for that it does not appear, from the said
amended fifth count that the same George Rundle and William
Griffiths are entitled to the right and privilege to the use of the
water of the River Delaware in manner and from as they have averred
in the said amended fifth count of their declaration."
"And also that as it appears from the said amended fifth count
that the said River Delaware is a common highway and public
navigable river, over which the States of Pennsylvania and New
Jersey have concurrent jurisdiction, and a boundary of said states,
these defendants insist that the legislative acts of the then
Province of Pennsylvania and New Jersey, passed in the year of our
Lord seventeen hundred and seventy one, as set forth in the said
amended fifth count, were intended to declare the said River
Delaware a common highway, and for improving the navigation
thereof, and that the provision therein contained, as to the mill
dam erected by Adam Hoops in the said River Delaware, did not and
does not amount to a grant or conveyance of water power to the said
Adam Hoops, his heirs or assigns, or to a surrender of the public
right in the waters of the said river, but to a permission only to
obstruct the waters of the said river by the said dam without being
subjected to the penalties of nuisance; that the right of the said
Adam Hoops was, and that of his assigns is, subordinate to the
public right at the pleasure of the Legislature of Pennsylvania and
New Jersey, or either of them."
On this demurrer the court below gave judgment for the
defendants, which is now alleged as error.
It is evident that the extent of the plaintiff's rights as a
riparian owner, and the question whether this proviso operates as
the grant of a usufruct of the waters of the river, or only as a
license of toleration of a nuisance, liable to revocation or
subordinate to the paramount public right, must depend on the laws
and customs of Pennsylvania as expounded by her own courts. It will
be proper, therefore, to give a brief sketch of
Page 55 U. S. 90
the public history of the river and the legislative action
connected with it, as also of the principles of law affecting
aquatic rights, as developed and established by the courts of that
state.
The River Delaware is the well known boundary between the States
of Pennsylvania and New Jersey. Below tidewater, the river, its
soil and islands, formerly belonged to the Crown; above tidewater,
it was vested in the proprietaries of the coterminous provinces --
each holding
ad medium filum aquae. Since the Revolution,
the states have succeeded to the public rights both of the Crown
and the proprietaries. Immediately after the Revolution, these
states entered into the compact of 1783, declaring the Delaware a
common highway for the use of both and ascertaining their
respective jurisdiction over the same. For thirty years after this
compact, they appear to have enjoyed their common property without
dispute or collision. When the legislature of either state passed
an act affecting it, they requested and obtained the concurrence
and consent of the other. Their first dispute was caused by an Act
of New Jersey passed February 4, 1815, authorizing Coxe and others
to erect a wing dam and divert the water for the purpose of mills
and other machinery. The consent of the State of Pennsylvania was
not requested; it therefore called forth a protest from the
legislature of that state. This was followed by further
remonstrance in the following year. A proposition was made to
submit the question of their respective rights to the Supreme Court
of the United States, which was rejected by New Jersey. After
numerous messages and remonstrances between the governors and
legislatures, commissioners were mutually appointed to compromise
the disputes. But they failed to bring the matter to an amicable
conclusion. The dispute was never settled, and the wing dam
remained in the river.
In 1824, New Jersey passed the first act for the incorporation
of the Delaware & Raritan Canal Company, for which the company
gave a bonus of $100,000. This act requires the consent of the
State of Pennsylvania, and on application's being made to her
legislature, she clogged her consent with so many conditions that
New Jersey refused to accept her terms, returned the bonus to the
company, and so the matter ended for that time.
Both parties then appointed commissioners to effect, if
possible, some compact or arrangement by which each state should be
authorized to divert so much water as would be necessary for these
contemplated canals. After protracted negotiations, these
commissioners finally, in 1834, agreed upon terms, but the compact
proposed by them was never ratified by either party.
Page 55 U. S. 91
In the meantime, each state appropriated to itself as much of
the waters of the river as suited its purpose. In 1827 and 1828,
Pennsylvania diverted the River Lehigh, a confluent of the
Delaware, and afterwards, finding that stream insufficient, took
additional feeders for her canal, out of the main stream of the
Delaware. On the 4th February, 1830, the Legislature of New Jersey
passed the act under which the defendants were incorporated and in
pursuance of which, they have constructed the dam and feeder, the
subject of the present suit.
The canals in both states, supplied by the river, are intimately
and extensively connected with their trade, revenues, and general
property -- while the navigation of the river above tidewater, and
the rapids at Trenton, is of comparatively trifling importance,
being used only at times of the spring freshets for floating timber
down the stream when the artificial diversions do not affect the
navigation. The practical benefits resulting to both parties, from
their great public improvements appear to have convinced them that
further negotiations, complaints, or remonstrances would be useless
and unreasonable, and thus, by mutual acquiescence and tacit
consent, the necessity of a more formal compact has been
superseded.
The law of Pennsylvania by which the title and rights of the
plaintiffs must be tested differs materially from that of England
and most of the other states of the Union. As regards her large
fresh water rivers, she has adopted the principles of the civil
law. In the case of
Carson v. Blazer, the supreme court of
that state decided that the large rivers, such as the Susquehanna
and Delaware, were never deemed subject to the doctrines of the
common law of England applicable to fresh water streams, but that
they are to be treated as navigable rivers; that the grants of
William Penn, the proprietary, never extended beyond the margin of
the river, which belonged to the public, and that the riparian
owners have therefore no exclusive rights to the soil or water of
such rivers
ad filum medium aquae.
In
Shrunk v. Schuylkill Navigation Company, the same
court repeats the same doctrine, and Chief Justice Tilghman, in
delivering the opinion of the court, observes:
"Care seems to have been taken from the beginning to preserve
the waters of these rivers for public uses both of fishery and
navigation, and the wisdom of that policy is now more striking than
ever, from the great improvements in navigation, and others in
contemplation, to effect which, it is necessary to obstruct the
flow of the water in some places and in others to divert its
course. It is true that the state would have had a right to do
these things for the public benefit even if the rivers had been
private property, but then compensation must have been made to
the
Page 55 U. S. 92
owners, the amount of which might have been so enormous as to
have frustrated or at least checked these noble undertakings."
In the case of
Monongahela Navigation Company v. Coons,
the defendant had erected his mill under a license given by an act
of the legislature in 1803 to riparian owners to erect dams of a
particular structure, "provided they did not impede the
navigation," &c.. The Monongahela Navigation Company, in
pursuance of a charter granted them by the state, had erected a dam
in the Monongahela, which flowed back the water on the plaintiff's
mill in the Youghiogany and greatly injured it. And it was adjudged
by the court that the Company were not liable for the consequential
injury thus inflicted. The court, speaking of the rights of
plaintiff consequent on the license granted by the act, of 1803,
observed:
"That statute gave riparian owners liberty to erect dams of a
particular structure on navigable streams without being indictable
for a nuisance, and their exercise of it was consequently to be
attended with expense and labor. But was this liberty to be
perpetual, and forever tie up the power of the state? Or is not the
contrary to be inferred from the nature of the license? So far was
the legislature from seeming to abate one jot of the state's
control that it barely agreed not to prefer an indictment for a
nuisance except on the report of viewers to the Quarter Sessions.
But the remission of a penalty is not a charter, and the alleged
grant was nothing more than a mitigation of the penal law."
The case of
Susquehanna Canal Company v. Wright
confirms the preceding views and decides, "that the state is never
presumed to have parted with one of its franchises in the absence
of conclusive proof of such an intention." Hence a license,
accorded by a public law to a riparian owner, to erect a dam on the
Susquehanna River and conduct the water upon his land for his own
private purposes is subject to any future provision which the state
may make with regard to the navigation of the river. And if the
state authorize a company to construct a canal which impairs the
rights of such riparian owner, he is not entitled to recover
damages from the company. In that case, Wright had erected valuable
mills under a license granted to him by the legislature, but the
court said:
"He was bound to know that the state had power to revoke its
license whenever the paramount interests of the public should
require it. And in this respect a grant by a public agent of
limited powers, and bound not to throw away the interests confided
to it, is different from a grant by an individual who is master of
the subject. To revoke the latter after an expenditure in the
prosecution of it would be a fraud. But he who accepts a
Page 55 U. S. 93
license from the legislature knowing that he is dealing with an
agent bound by duty not to impair public rights does so at his
risk, and a voluntary expenditure on the foot of it gives him no
claim to compensation."
The principles asserted and established by these cases are
perhaps somewhat peculiar, but as they affect rights to real
property in the State of Pennsylvania, they must be treated as
binding precedents in this Court. It is clear also from the
application of these principles to the construction of the proviso
under consideration that it cannot be construed as a grant of the
waters of a public river for private use or a fee simple estate in
the usufruct of them "without diminution or alteration." It
contains no direct words of grant which would operate by way of
estoppel upon the grantor. The dam of Adam Hoops was a nuisance
when it was made, but as it did little injury to the navigation,
the commissioners, who were commanded to prostrate other nuisances,
were enjoined to tolerate this. The mills of Hoops had not been
erected on the faith of a legislative license, as in the cases we
have quoted, and a total revocation of it would not be chargeable
with the apparent hardship and injustice which might be imputed to
it in those cases. His dam continues to be tolerated, and the
license of diverting the water to his mills is still enjoyed,
subject to occasional diminution from the exercise of the superior
right of the sovereign. His interest in the water may be said to
resemble a right of common, which by custom is subservient to the
right of the lord of the soil, so that the lord may dig clay pits,
or empower others to do so, without leaving sufficient herbage on
the common.
Bateson v. Green, 5 T.R. 411.
Nor can the plaintiff claim by prescription against the public
for more than the act confers on him, which is at best impunity for
a nuisance. His license, or rather toleration, gives him a good
title to keep up his dam and use the waters of the river as against
everyone but the sovereign, and those diverting them by public
authority, for public uses.
It is true that the plaintiff's declaration in this case alleges
that the waters diverted by defendants' dam and canal are used for
the purpose of mills and for private emolument. But as it is not
alleged or pretended that defendants have taken more water than was
necessary for the canal or have constructed a canal of greater
dimensions than they were authorized and obliged by the charter to
make, this secondary use must be considered as merely incidental to
the main object of their charter. We do not, therefore, consider
the question before us whether the plaintiff might not recover
damages against an individual or private corporation diverting the
water of this river
Page 55 U. S. 94
to their injury for the purpose of private emolument only, with
or without license or authority of either of its sovereign owners.
The case before us requires us only to decide that by the laws of
Pennsylvania, the River Delaware is a public navigable river, held
by its joint sovereigns in trust for the public; that riparian
owners of land have no title to the river or any right to divert
its waters unless by license from the state. That such license is
revocable and in subjection to the superior right of the state to
divert the water for public improvements.
It follows necessarily from these conclusions that whether the
State of Pennsylvania claim the whole river, or acknowledge the
State of New Jersey as tenant in common and possessing equal rights
with herself, and whether either state, without consent of the
other has or has not a right to divert the stream, it will not
alter or enlarge the plaintiff's rights. Being a mere tenant at
sufferance to both as regards the usufruct of the water, he is not
in a condition to question the relative rights of his superiors. If
Pennsylvania chooses to acquiesce in this partition of the waters
for great public improvements or is estopped to complain by her own
acts, the plaintiff cannot complain or call upon this Court to
decide questions between the two states which neither of them sees
fit to raise. By the law of his own state, the plaintiff has no
remedy against a corporation authorized to take the whole river for
the purpose of canals or improving the navigation, and his tenure
and rights are the same as regards both the states.
With these views, it will be unnecessary to inquire whether the
compact of 1783 between Pennsylvania and New Jersey operated as a
revocation of the license or toleration implied from the proviso of
the colonial acts of 1771, as that question can arise only in case
the plaintiffs' dam be indicted as a public nuisance.
Nor is it necessary to pass any opinion on the question of the
respective rights of either of these co-terminous states to whom
this river belongs to divert its waters without the consent of the
other.
The question raised is not without its difficulties, but being
bound to resolve it by the peculiar laws of Pennsylvania as
interpreted by her own courts, we cannot say that the court below
has erred in its exposition of them, and therefore
Affirm the judgment.
MR. JUSTICE McLEAN and MR. JUSTICE DANIEL dissented.
MR. JUSTICE CATRON gave a separate opinion; and MR. JUSTICE
CURTIS dissented from the judgment of the court, on the merits, but
not from its entertaining jurisdiction.
Page 55 U. S. 95
The following are the opinions of MR. JUSTICE CATRON and MR.
JUSTICE DANIEL.
MR. JUSTICE CATRON.
My opinion is and long has been that the mayor and aldermen of a
city corporation, or the president and directors of a bank, or the
president and directors of a railroad company and of other similar
corporations, are the true parties that sue and are sued as
trustees and representatives of the constantly changing
stockholders. These are not known to the public and not suable in
practice by service of personal notice on them respectively, such
as the laws of the United States require. If the president and
directors are citizens of the state where the corporation was
created, and the other party to the suit is a citizen of a
different state or a subject or citizen of a foreign government,
then the courts of the United States can exercise jurisdiction
under the Third Article of the Constitution. In this sense I
understood
Letson's Case, and assented to it when the
decision was made, and so it is understood now.
If all the real defendants are not within the jurisdiction of
the court, because some of the directors reside beyond it, then the
Act of February 28, 1843, allows the suit to proceed regardless of
this fact, for the reasons stated in
Letson's Case.
43 U. S. 2 How.
597.
If the United States courts could be ousted of jurisdiction and
citizens of other states and subjects of foreign countries be
forced into the state courts without the power of election, they
would often be deprived, in great cases, of all benefit
contemplated by the Constitution, and in many cases be compelled to
submit their rights to judges and juries who are inhabitants of the
cities where the suit must be tried, and to contend with powerful
corporations in local courts where the chances of impartial justice
would be greatly against them and where no prudent man would engage
with such an antagonist if he could help it. State laws, by
combining large masses of men under a corporate name, cannot repeal
the Constitution; all corporations must have trustees and
representatives, who are usually citizens of the state where the
corporation is created, and these citizens can be sued and the
corporate property charged by the suit; nor can the courts allow
the constitutional security to be evaded by unnecessary refinements
without inflicting a deep injury on the institutions of the
country.
MR. JUSTICE DANIEL.
In the opinion of the Court just announced in this cause I am
unable to concur.
Were the relative rights and interests of the parties to
this
Page 55 U. S. 96
controversy believed to be regularly before this Court, I should
have coincided in the conclusions of the majority for the reason
that all that is disclosed by the record either of the traditions
or the legislation of the States of Pennsylvania and New Jersey
shows an equal right or claim on the part of either of those states
to the River Delaware and to the uses to which the waters of that
river might be applied. From such an equality in each of those
states it would seem regularly to follow that no use or enjoyment
of the waters of that river could be invested in the grantees of
one of them to the exclusion of the like use and enjoyment by the
grantees of the other. The permission, therefore, from Pennsylvania
to Adam Hoops or his assignees to apply the waters of the Delaware
in the working of his mill, whatever estate or interest it might
invest in such grantee as against Pennsylvania, could never deprive
the State of New Jersey of her equal privilege of applying the
waters of the same river, either directly, in her corporate
capacity, or through her grantee, the Delaware & Raritan Canal
Company. My disagreement with my brethren in this case has its
foundation in a reason wholly disconnected with the merits of the
parties. It is deducible from my conviction of the absence of
authority, either here or in the circuit court, to adjudicate this
cause, and that it should therefore have been remanded with
directions for its dismission for want of jurisdiction.
The record discloses the fact that the party defendant in the
circuit court and the appellee before this Court is a corporation,
styled in the declaration, "a corporation created by the State of
New Jersey." It is important that the style and character of this
party litigant, as well as the source and manner of its existence,
be borne in mind, as both are deemed material in considering the
question of the jurisdiction of this Court and of the circuit
court. It is important, too, to be remembered that the question
here raised stands wholly unaffected by any legislation, competent
or incompetent, which may have been attempted in the organization
of the courts of the United States, but depends exclusively upon
the construction of the 2d section of the 3d article of the
Constitution, which defines the judicial power of the United States
-- first with respect to the subjects embraced within that power,
and secondly with respect to those whose character may give them
access, as parties, to the courts of the United States. In the
second branch of this definition, we find the following enumeration
as descriptive of those whose position as parties will authorize
their pleading or being impleaded in those courts, and this
position is limited to
"controversies to which the United States are a party;
Page 55 U. S. 97
controversies between two or more states -- between citizens of
different states -- between citizens of the same state, claiming
lands under grants of different states -- and between the citizens
of a state and foreign citizens or subjects."
Now it has not been and will not be pretended that this
corporation can in any sense be identified with the United States
or is endowed with the privileges of the latter, or if it could be,
it would clearly be exempted from all liability to be sued in the
federal courts. Nor is it pretended that this corporation is a
state of this Union, nor, being created by, and situated within the
State of New Jersey, can it be held to be the citizen or subject of
a foreign state. It must be, then, under that part of the
enumeration in the article quoted which gives to the courts of the
United States jurisdiction in controversies between citizens of
different states that either the circuit court or this Court can
take cognizance of the corporation as a party, and this is, in
truth, the sole foundation on which that cognizance has been
assumed or is attempted to be maintained. The proposition, then, on
which the authority of the circuit court and of this tribunal is
based is this: the Delaware & Raritan Canal Company is either a
citizen of the United States or it is a citizen of the State of New
Jersey. This proposition, startling as its terms may appear either
to the legal or political apprehension, is undeniably the basis of
the jurisdiction asserted in this case and in all others of a
similar character, and must be established or that jurisdiction
wholly fails. Let this proposition be examined a little more
closely.
The term "citizen" will be found rarely occurring in the writers
upon English law, those writers almost universally adopting, as
descriptive of those possessing rights or sustaining obligations,
political or social, the term "subject" as more suited to their
peculiar local institutions. But in the writers of other nations
and under systems of polity deemed less liberal than that of
England, we find the term "citizen" familiarly reviving, and the
character and the rights and duties that term implies particularly
defined. Thus, Vattel, in his 4th book, has a chapter, cap. 6th,
the title of which is: "The concern a nation may have in the
actions of her citizens." A few words from the text of that chapter
will show the apprehension of this author in relation to this term.
"Private persons," says he,
"who are members of one nation may offend and ill treat the
citizens of another; it remains for us to examine what share a
state may have in the actions of her citizens and what are the
rights and obligations of sovereigns in that respect."
And again: "Whoever uses a citizen ill indirectly offends the
state, which is bound to protect this citizen." The meaning of the
term
Page 55 U. S. 98
"citizen" or "subject," in the apprehension of English jurists,
as indicating persons in their natural character in
contradistinction to artificial or fictitious persons created by
law, is further elucidated by those jurists in their treatises upon
the origin and capacities and objects of those artificial persons
designated by the name of corporations. Thus, Mr. Justice, in the
18th chapter of his 1st volume, holds this language:
"We have hitherto considered persons in their natural
capacities, and have treated of their rights and duties. But as all
personal rights die with the person, and as the necessary forms of
investing a series of individuals, one after another, with the same
identical rights, would be inconvenient, if not impracticable, it
has been found necessary, when it is for the advantage of the
public to have any particular rights kept on foot and continued, to
constitute artificial persons who maintain a perpetual succession
and enjoy a kind of legal immortality. These artificial persons are
called 'corporations.'"
This same distinguished writer, in the first book of his
Commentaries 123, says,
"The rights of persons are such as concern and are annexed to
the persons of men, and when the person to whom they are due is
regarded, are called simply 'rights;' but when we consider the
person from whom they are due, they are then denominated,
'duties.'"
And again, cap. 10th of the same book, treating of the "people,"
he says,
"The people are either 'aliens' -- that is, born out of the
dominions or allegiance of the Crown -- or 'natives' -- that is,
such as are born within it."
Under our own systems of polity, the term "citizen," implying
the same or similar relations to the government and to society
which appertain to the term, "subject" in England, is familiar to
all. Under either system, the term used is designed to apply to man
in his individual character and to his natural capacities -- to a
being or agent possessing social and political rights and
sustaining social, political, and moral obligations. It is in this
acceptation only, therefore, that the term "citizen," in the
article of the Constitution, can be received and understood. When
distributing the judicial power, that article extends it to
controversies between "citizens" of different states. This must
mean the natural physical beings composing those separate
communities, and can by no violence of interpretation be made to
signify artificial, incorporeal, theoretical, and invisible
creations. A corporation, therefore, being not a natural person,
but a mere creature of the mind, invisible and intangible, cannot
be a citizen of a state, or of the United States, and cannot fall
within the terms or the power of the above mentioned article, and
can therefore neither plead nor be impleaded in the courts of the
United States. Against this position it may be urged that the
Page 55 U. S. 99
converse thereof has been ruled by this Court, and that this
matter is no longer open for question. In answer to such an
argument, I would reply that this is a matter involving a
construction of the Constitution, and that wherever the
construction or the integrity of that sacred instrument is
involved, I can hold myself trammeled by no precedent or number of
precedents. That instrument is above all precedents, and its
integrity everyone is bound to vindicate against any number of
precedents if believed to trench upon its supremacy. Let us examine
into what this Court has propounded in reference to its
jurisdiction in cases in which corporations have been parties, and
endeavor to ascertain the influence that may be claimed for what
they have heretofore ruled in support of such jurisdiction.
The first instance in which this question was brought directly
before this Court was that of
Bank of the United States v.
Deveaux, 5 Cranch 61. An examination of this case
will present a striking instance of the error into which the
strongest minds may be led whenever they shall depart from the
plain, common acceptation of terms or from well ascertained truths
for the attainment of conclusions which the subtlest ingenuity is
incompetent to sustain. This criticism upon the decision in the
case of
Bank v. Deveaux may perhaps be shielded from the
charge of presumptuousness by a subsequent decision of this Court
hereafter to be mentioned. In the former case, the Bank of the
United States, a corporation created by Congress, was the party
plaintiff, and upon the question of the capacity of such a party to
sue in the courts of the United States this Court said, in
reference to that question,
"The jurisdiction of this Court being limited, so far as
respects the character of the parties in this particular case, to
controversies between citizens of different states, both parties
must be citizens, to come within the description. That invisible,
intangible, and artificial being, that mere legal entity, a
corporation aggregate, is certainly not a citizen, and consequently
cannot sue or be sued in the courts of the United States unless the
rights of the members in this respect can be exercised in their
corporate name. If the corporation be considered as a mere faculty,
and not as a company of individuals who, in transacting their
business, may use a legal name, they must be excluded from the
courts of the Union."
The Court having shown the necessity for citizenship in both
parties in order to give jurisdiction, having shown further, from
the nature of corporations, their absolute incompatibility with
citizenship, attempts some qualification of these indisputable and
clearly stated positions, which, if intelligible at all, must be
taken as wholly subversive of the positions so laid down. After
stating the requisite of citizenship and showing that a
Page 55 U. S. 100
corporation cannot be a citizen, "and consequently that it
cannot sue or be sued in the courts of the United States," the
Court goes on to add, "unless the rights of the members can be
exercised in their corporate name." Now it is submitted that it is
in this mode only,
viz., in their corporate name, that the
rights of the members can be exercised; that it is this which
constitutes the character, and being, and functions of a
corporation. If it is meant beyond this that each member, or the
separate members, or a portion of them, can take to themselves the
character and functions of the aggregate and merely legal being,
then the corporation would be dissolved; its unity and perpetuity,
the essential features of its nature, and the great objects of its
existence, would be at an end. It would present the anomaly of a
being existing and not existing at the same time. This strange and
obscure qualification attempted by the Court of the clear legal
principles previously announced by it forms the introduction to and
apology for the proceeding adopted by it by which it undertook to
adjudicate upon the rights of the corporation through the supposed
citizenship of the individuals interested in that corporation. It
asserted the power to look beyond the corporation, to presume or to
ascertain the residence of the individuals composing it, and to
model its decision upon that foundation. In other words, it
affirmed that in an action at law, the purely legal rights asserted
by one of the parties upon the record might be maintained by
showing or presuming that these rights are vested in some other
person who is no party to the controversy before it.
Thus stood the decision of
Bank of the United States v.
Deveaux, wholly irreconcilable with correct definition and a
puzzle to professional apprehension until it was encountered by
this Court in the decision of
Louisville & Cincinnati
Railroad Company v. Letson, reported in 2 How. 497.
In the latter decision, the Court, unable to untie the judicial
entanglement of
Bank v. Deveaux, seem to have applied to
it the sword of the conqueror; but unfortunately, in the blow they
have dealt at the ligature which perplexed them, they have severed
a portion of the temple itself. They have not only contravened all
the known definitions and adjudications with respect to the nature
of corporations, but they have repudiated the doctrines of the
civilians as to what is imported by the term "subject" or "citizen"
and repealed, at the same time, that restriction in the
Constitution which limited the jurisdiction of the courts of the
United States to controversies between "citizens of different
states." They have asserted that
"a corporation created by and transacting business in a state is
to be deemed an inhabitant of the state, capable of being
treated
Page 55 U. S. 101
as a citizen for all the purposes of suing and being sued, and
that an averment of the facts of its creation, and the place of
transacting its business, is sufficient to give the circuit courts
jurisdiction."
The first thing which strikes attention in the position thus
affirmed is the want of precision and perspicuity in its terms. The
Court affirms that a corporation created by, and transacting
business within a state is to be deemed an inhabitant of that
state. But the article of the Constitution does not make
inhabitancy a requisite of the condition of suing or being sued;
that requisite is citizenship. Moreover, although citizenship
implies the right of residence, the latter by no means implies
citizenship. Again, it is said that these corporations may be
treated as citizens for the purpose of suing or being sued. Even if
the distinction here attempted were comprehensible, it would be a
sufficient reply to it that the Constitution does not provide that
those who may be treated as citizens may sue or be sued, but that
the jurisdiction shall be limited to citizens only -- citizens in
right and in fact. The distinction attempted seems to be without
meaning, for the Constitution or the laws nowhere define such a
being as a
quasi-citizen, to be called into existence for
particular purposes -- a being without any of the attributes of
citizenship, but the one for which he may be temporarily and
arbitrarily created, and to be dismissed from existence the moment
the particular purposes of his creation shall have been answered.
In a political or legal sense, none can be treated or dealt with by
the government as citizens but those who are citizens in reality.
It would follow, then, by necessary induction from the argument of
the Court that as a corporation must be treated as a citizen, it
must be so treated to all intents and purposes, because it is a
citizen. Each citizen if not under old governments certainly does,
under our system of polity, possess the same rights and faculties,
and sustain the same obligations, political, social, and moral,
which appertain to each of his fellow citizens. As a citizen, then,
of a state or of the United States, a corporation would be eligible
to the state or federal legislatures, and if created by either the
state or federal governments, might, as a native born citizen,
aspire to the office of President of the United States -- or to the
command of armies, or fleets, in which last example, so far as the
character of the commander would form a part of it, we should have
the poetical romance of the specter ship realized in our Republic.
And should this incorporeal and invisible commander not acquit
himself in color or in conduct, we might see him, provided his
arrest were practicable, sent to answer his delinquencies before a
court martial, and subjected to the penalties
Page 55 U. S. 102
of the articles of war.
Sir Edward Coke has declared, that a corporation cannot commit
treason, felony, or other crime; neither is it capable of suffering
a traitor's or felon's punishment, for it is not liable to
corporeal penalties -- that it can perform no personal duties, for
it cannot take an oath for the due execution of an office; neither
can it be arrested or committed to prison, for its existence being
ideal, no man can arrest it; neither can it be excommunicated, for
it has no soul. But these doctrines of Lord Coke were founded upon
an apprehension of the law now treated as antiquated and obsolete.
His lordship did not anticipate an improvement by which a
corporation could be transformed into a citizen, and by that
transformation be given a physical existence, and endowed with soul
and body too. The incongruities here attempted to be shown as
necessarily deducible from the decisions of the cases of
Bank
of the United States v. Deveaux and of
Cincinnati &
Louisville Railroad Company v. Letson afford some illustration
of the effects which must ever follow a departure from the settled
principles of the law. These principles are always traceable to a
wise and deeply founded experience; they are therefore ever
consentaneous and in harmony with themselves and with reason, and
whenever abandoned as guides to the judicial course, the aberration
must lead to bewildering uncertainty and confusion. Conducted by
these principles, consecrated both by time and the obedience of
sages, I am brought to the following conclusions:
1st. That by no sound or reasonable interpretation, can a
corporation -- a mere faculty in law, be transformed into a citizen
or treated as a citizen.
2d. That the second section of the Third Article of the
Constitution, investing the courts of the United States with
jurisdiction in controversies between citizens of different states,
cannot be made to embrace controversies to which corporations and
not citizens are parties, and that the assumption by those courts
of jurisdiction in such cases must involve a palpable infraction of
the article and section just referred to.
3d. That in the cause before us, the party defendant in the
circuit court having been a corporation aggregate created by the
State of New Jersey, the circuit court could not properly take
cognizance thereof, and therefore this cause should be remanded to
the circuit court with directions that it be dismissed for the want
of jurisdiction.
Order
This cause came on to be heard on the transcript of the record
from the Circuit Court of the United States for the
Page 55 U. S. 103
District of New Jersey, and was argued by counsel. On
consideration whereof, it is now here ordered and adjudged by this
Court, that the judgment of the said circuit court in this cause be
and the same is hereby affirmed with costs.