A citizen of Virginia may sue the Baltimore & Ohio Railroad
Company in the Circuit Court of the United States for Maryland, and
an averment that the defendants are a body corporate, created by
the Legislature of Maryland, is sufficient to give the court
jurisdiction.
The constitutional privilege which a citizen of one state has to
sue the citizens of another state in the federal courts cannot be
taken away by the erection of the latter into a corporation by the
laws of the state in which they live. The corporation itself may
therefore be sued as such.
The preceding cases upon this subject, examined.
Where a contract was made to obtain a certain law from the
Legislature of Virginia, and stated to be made on the basis of a
prior communication, this communication is competent evidence in a
suit upon the contract.
A contract is void as against public policy, and can have no
standing in court by which one party stipulates to employ a number
of secret agents in order to obtain the passage of a particular law
by the Legislature of a state, and the other party promises to pay
a large sum of money in case the law should pass.
It was also void if, when it was made, the parties agreed to
conceal from the members of the legislature the fact that the one
party was the agent of the other, and was to receive a compensation
for his services in case of the passage of the law.
And if there was no agreement to that effect, there can be no
recovery upon the contract, if in fact the agent did conceal from
the members of the legislature that he was an agent who was to
receive compensation for his services in case of the passage of the
law.
Moreover, in this particular case, the law which was passed was
not such a one as was stipulated for, and upon this ground there
could be no recovery.
There having been a special contract between the parties by
which the entire compensation was regulated and made contingent,
there could be no recovery on a count for
quantum
meruit.
Marshall, a citizen of Virginia, sued the railroad company, to
recover the sum of fifty thousand dollars, which he alleged that
they owed him under a special contract, for his services in
obtaining a law from the Legislature of Virginia, granting to the
company a right of way through Virginia to the Ohio River.
The declaration set out the special contract, and also contained
a count for a
quantum meruit.
The circumstances of the case are related in the opinion of the
Court.
Inasmuch as one of the instructions of the circuit court was
that if
"the services of the plaintiff were to be of the character and
description set forth in his letter to the president of the
company, dated November 17, 1846, and the paper therein
enclosed"
no "action could be maintained on the contract," it is proper,
for future reference, that both of those papers should be inserted.
They were as follows:
Letter from A. J. Marshall to L. McLane, 17th November,
1846
"WARRENTON, November 17"
"DEAR SIR: In an interview with you a few days since, I
promised
Page 57 U. S. 315
to submit in writing a plan, by which I thought your much
desired 'right of way' through this state might be procured from
our legislature. I herewith enclose my views on that subject, and
shall respectfully await your reply."
"In offering myself as the agent of your company to manage so
delicate and important a trust, I am aware I lack that commanding
reputation which of itself would point me out as best qualified for
such a post. Of my qualification and fitness it is not for me to
speak, and, in consequence of the absolute secrecy demanded, I
cannot seek testimonials of my capacity, lest I should excite
inquiry. If your judgment approves my scheme, it is probable you
might get satisfactory information respecting me by a cautious
conversation with John M. Gordon, A. B. Gordon, Dr. John H. Thomas,
or Joseph C. Wilson, all of your city. Without impropriety, I may
say for myself I have had considerable experience as a lobby member
before the Legislature of Virginia. For several winters past, I
have been before that body with difficult and important measures,
affecting the improvement of this region of the country, and I
think I understand the character and component material of that
honorable body."
"I shall have to spend six or eight weeks in Richmond next
winter to procure important amendments to the charter of the
Rappahannock Company. This will furnish reason for my presence in
Richmond."
"There is an effort in progress to divide our county, to which
we of Warrenton are violently hostile. This furnishes another
reason for myself, and also for one or two other agents, to remain
in the City of Richmond during the winter."
"Col. Walden and myself are interested in large bodies of land
in western Virginia, near which the track of your railroad will
pass. This is an ostensible reason for our active interference. I
live in a range of country whose representation ought to be
entirely disinterested on this question of the 'right of way.'
Notwithstanding which, I believe a plurality of our representatives
have heretofore been in opposition. I know the influences that
effected this, and am happy to say they will not exist next
winter."
"Edmund Broaddus, for many years a representative from
Culpepper, a shrewd, intelligent man, influenced this result.
Broaddus was a sort of protege of the Richmond and James River
whigs, was distinguished and promoted by them, and habitually acted
with them. His place is now filled by Slaughter, a personal friend
of mine. I should have little fear to carry this section of the
state."
"The proposed plan best speaks for itself; if you think it
feasible,
Page 57 U. S. 316
there is no time to be lost. I hope to hear from you at your
earliest leisure. With entire respect, I am your humble servant
&c."
"A. J. MARSHALL"
"I tax you with the postage, as I do not wish to be known as in
correspondence."
"
Document accompanying the foregoing
letter"
"In explanation of the plan I wish to submit, it is necessary to
indulge some latitude of remark on the causes which have heretofore
thwarted the just pretensions of your company."
"Richmond City, the Petersburg, Richmond & Potomac Railroad,
the James River Canal, and the Wheeling interests, acting in
concert, have heretofore successfully combated 'the right of way.'
These interests fall far short of a majority in the two branches of
the Virginia Legislature. There is no sufficient ground, in the
numeric force of this antagonist interest, to discourage the hope
of an eventual success. On an examination of their arguments, based
either upon justice or expediency, I find nothing to challenge a
conviction of right, or an assurance of high state policy. On the
contrary, standing heretofore as a disinterested spectator of the
struggle, I have condemned the emptiness and arrogance of their
pretensions, and felt indignant at the success of their narrow,
selfish, and bigoted policy."
"I have observed no superiority of talent, no greater zeal or
power of advocacy in the opposition than in favor of the 'right of
way.' The success of a cause before our legislature, having neither
justice, greater expediency, stronger advocacy, or greater numeric
strength, is matter of just amazement to the defeated party. The
elements of this success should be a subject of curious and deeply
anxious investigation, for when the cause is known, a remedy or
counteracting influence may be readily applied. I have no idea that
any dishonorable measures or appliances further than log-rolling
may be one have been used to defeat the 'right of way.' As to
log-rolling, I am sorry to say it has grown into a system in our
legislature. Members openly avow and act on it, and never conceal
their bargain, except where publicity would jeopard success. No
delegation are more skillful or less scrupulous at this game than
our western right-of-way men; so in that regard there is a stand
off. It seems to me the great secret of this success is the
propinquity, the presence on the ground, of your opponents. The
legislature sits in their midst. They exercise a vigilant,
pressing, present out-of-door influence upon the members. If the
capitol were located at Weston or Clarksburg, who would question
success? The Richmond interest is ever present and ever pressing;
her associates of the railroad
Page 57 U. S. 317
and canal are at hand and equally active. You have no
counteracting influence, and hence the success and triumph of your
opponents. If I am right in these views, your claims, resting alone
on justice, sectional necessity, or even high state policy, will be
urged in vain, and must become as mere sounding clamor in the hall
unless you meet your opponents with the weapons they use so
successfully against yourselves. Experience shows that something
beyond what you have heretofore done is necessary to success, and
in this necessity the plan I have to submit has its origin."
"The mass of the members in our legislature are a thoughtless,
careless, light-hearted body of men who come there for the '
per
diem' and to spend the '
per diem.' For a brief space
they feel the importance and responsibility of their position. They
soon, however, engage in idle pleasures, and, on all questions
disconnected with their immediate constitutents, they become as
wax, to be moulded by the most pressing influences. You need the
vote of this careless mass, and if you adopt efficient means you
can obtain it. I never saw a class of men more eminently kind and
social in their intercourse. Through these qualities they may be
approached and influenced to do anything not positively wrong, or
which will not affect prejudicially their immediate constituency.
On this question of the 'right of way,' a decided majority of the
members can vote either way without fear of their constituents. On
this question, therefore, I consider the most active influences
will ever be the most successful."
"Before you can succeed, in my judgment, you must re enforce the
'right-of-way' members of the house with an active, interested,
well organized influence about the house. You must inspire your
agents with an earnest -- nay an anxious -- wish for success. The
rich reward of their labors must depend on success. Give them
nothing if they fail -- endow them richly if they succeed. This is,
in brief space, the outline of my plans. Reason and justice are
with you; an enlarged expediency favors your claim. You have able
advocates, and the best of the argument; yet with all these
advantages, you have been defeated. I think I have pointed out the
cause. Your opponents better understand the nature of the tribunal
before which this vast interest is brought. They act on individuals
of the body out of doors and in their chambers. Your adversaries
are on the spot, and hover around the careless arbiters of the
question in vigilant and efficient activity. The contest as now
waged is most unequal. My plan would aim to place the
'right-of-way' members on an equality with their adversaries, by
sending down
Page 57 U. S. 318
a corps of agents stimulated to an active partisanship by the
strong lure of a high profit."
"In considering the details of the plan, I would suggest that
all practicable secrecy is desirable. It strikes me the company
should have or know but one agent in the matter, and let that agent
select the subagents from such quarters and classes and in such
numbers as his discreet observation may dictate."
"I contemplate the use of no improper means or appliances in the
attainment of your purpose. My scheme is to surround the
legislature with respectable and influential agents whose
persuasive arguments may influence the members to do you a naked
act of justice. This is all. I require secrecy from motives of
policy alone, because an open agency would furnish ground of
suspicion and unmerited invective, and might weaken the impression
we seek to make."
"In regard to the cost of all this, it must necessarily be
great. The sub-agency must be extensive, and of first influence and
character. All your agents must be inspired by an active zeal and a
determined purpose of success. This can only be accomplished for
you by offers of high contingent compensation."
"I will illustrate this point by a single example. Were I to
become your agent on my plan, I should like to have the services of
Major Charles Hunton, of this county. Hunton for many years was a
member of our state senate. His last year of service was as
president of that body. He is an unpretending man, of good
understanding and excellent address. He is a great favorite with
his own party, democratic, and universally esteemed as a gentleman
of highest character. He is in moderate circumstances, with a large
family. I have no doubt if I would bear his expenses and secure him
a contingent of one thousand dollars, he would spend the winter in
Richmond and do good service, but if I could offer him two
thousand, it would become an object of great solicitude. It would
pay all his debts and smooth the path of an advancing old age. Two
thousand dollars would stimulate his utmost energies. If I am
enabled to offer such inducements, I should have great confidence
of success. Under this plan, you pay nothing unless a law be passed
which your company will accept. Of what value would such a law be
to you? Measure this value, and let your own interests, in view of
the high stake you play for, fix the price. There is no use in
sending a boy on a man's errand; a low offer, and that contingent,
is bad judgment; high service can't be had at a low bid."
"I have surveyed the difficulties of this undertaking, and think
they may be surmounted. The cash outlay for my own expenses and
those of the subagents, would be heavy. I know the
Page 57 U. S. 319
effective service of such agents as I would employ cannot be had
except on a heavy contingent. Taking all things into view, I should
not like to undertake the business on such terms unless provided
with a contingent fund of at least fifty thousand dollars, secured
to my order on the passage of a law and its acceptance by your
company."
"If the foregoing views are deemed worthy of consideration, I
hold myself in readiness to meet any call in that behalf that may
be made upon me."
"Respectfully &c."
"A. J. MARSHALL"
After the evidence had been closed, the counsel for the
plaintiff asked the court to instruct the jury as follows:
"1. That there is nothing in the terms or provisions of the
agreement embraced in the resolution of the committee of
correspondence, dated 12 December, 1846 which is set forth in the
opinion of the court offered in evidence, which renders the same
void on grounds of public policy."
"2. That the plaintiff is not precluded from recovering under
the agreement aforesaid, dated 12 December, 1846, as modified by
the agreement stated in the letter of 11 February, 1847, by reason
merely of the second proviso contained in the first section of the
Act of 6 March, 1847, which has been offered in evidence, provided
the jury shall find that the route, entering the ravine of the Ohio
River at the mouth of Fish Creek, and running so as to pass from a
point in the ravine of Buffalo Creek, at or near the mouth of
Pile's Fork, to a depot to be established by the defendant on the
northern side of Wheeling Creek, in the City of Wheeling, upon
minute estimates made in the manner and on the basis prescribed in
said act, and made after full examination and instrumental surveys
of the feasible or practicable routes, appeared to be the cheapest
upon which to construct, maintain, and work said railroad; and
provided they shall also find that the City of Wheeling did not
agree to pay the difference of cost, as specified in said act, but
on the contrary renounced the right to do so as early as the 10th
of July, 1847, and provided they shall also find that said act was
accepted by the stockholders of the defendant, as a part of its
charter, on the 25th of August, 1847."
"3. Upon the evidence aforesaid, the plaintiff prays the court
to instruct the jury:"
"That if they find the contract contained in the resolution of
the committee of correspondence of 12th of December, 1846, and in
the resolution of the committee of correspondence of the 18th of
January, 1847, and in the letter of Louis McLane of the 11th of
February, 1847, aforesaid, to have been made with
Page 57 U. S. 320
the plaintiff by the defendant, and also that the Act of
Virginia of the 6th of March, 1847, was passed at the session of
the Legislature of Virginia for 1846-1847, in the contract
mentioned, and also that the Baltimore & Ohio Railroad, by the
cheapest route to the City of Wheeling, entering the ravine of the
Ohio at or north of Grave Creek, was ascertained, by such estimates
as the law prescribed, to be more costly to construct, maintain,
and work than said road would be by the route passing into the
ravine of the Ohio at or near the mouth of Fish Creek, and then to
the City of Wheeling, and that the difference of said probable cost
was then in like manner ascertained; that the defendants accepted
the said law within six months from the passage thereof, and also
that when the difference of probable cost between said two routes
was ascertained according [to] said act, the City of Wheeling did
not agree to pay to the defendant such difference of cost by the
time specified in said act, and that the plaintiff did attend at
Richmond during the session aforesaid, and did then and there
superintend and further the applications and other proceedings to
obtain the right of way through the State of Virginia, on behalf of
the defendant, then the plaintiff is entitled to recover, on the
special contract contained in the instrument aforesaid, the value
of the contingent compensation therein stipulated."
"And the defendants, by their counsel, prayed the court to
instruct the jury that the plaintiff was not entitled to recover,
because the contract, which stipulated for the payment of a
contingent fee of fifty thousand dollars, in the event of the
obtaining from the Legislature of Virginia such a law as is
described therein, was against public policy, and void."
"2. That if the jury shall believe that it was agreed between
the parties to the said contract that the same should be kept
secret, either in the terms of it or otherwise, from the
Legislature of Virginia or the public, such contract, if otherwise
proper and legal, was invalid as against public policy, and the
plaintiff is not entitled to recover."
"3. If the jury find that the special contract offered in
evidence by the plaintiff was proposed to be entered into by
plaintiff from the reasons and motives, and to be executed by him
in the way suggested in his communication of the 17th of November,
and its enclosure, offered in evidence by the defendant, if the
jury shall find that such communication was so made by plaintiff,
and if they shall find that the contract aforesaid was entered into
accordingly, and that said contract, or plaintiff's agency under
it, was not made known to the Legislature of Virginia, but in fact
concealed, that then said contract was illegal and void, upon
grounds of public policy. "
Page 57 U. S. 321
"4. That the contract between the plaintiff and defendants of
12th of December, 1846, looked to the obtaining of a law
authorizing the defendants to extend their road through the State
of Virginia to a point on the Ohio River as low down the river as
Fishing Creek, which law should be afterwards accepted by the
defendants with a determination to act under it, or to the
incorporation of an independent company, which the defendants
should determine to accept and adopt, or of whose charter they
should become the proprietors, authorizing the construction of a
railroad from any point on the Ohio River between the mouth of
Little Kenawha and Wheeling, and that no such law having been
obtained, the plaintiff is not entitled to recover."
"5. That the modified contract of the 11th of February looked to
the obtaining of the passage of Hunter's substitute, with the
adoption of Fish Creek instead of Fishing Creek, as the point of
striking the Ohio. That the law which was passed on the 6th of
March, 1847, was a law which did not, in its terms or effect,
fulfill the stipulations of the modified agreement of February
11th, 1847."
"6. That the acceptance of the law of March 6, 1847, by the
defendants, even supposing it to be substantially the same as
Hunter's substitute, did not entitle the plaintiff to recover
unless the jury should believe that such law was obtained through
his agency, under the agreement with the defendants."
"7. That even if the jury should believe that the law of March
6, 1847, was obtained through the plaintiff's agency, the plaintiff
is not entitled to recover if they shall believe that it was
accepted by the defendants in consequence of the waiver, by the
City of Wheeling, of the privileges accorded to it therein, and the
stipulations contained in the agreement between the City of
Wheeling and the defendants of March 6, 1847."
"8. That the modified agreement of February 11, 1847, which made
Hunter's substitute, modified as stated in the foregoing prayer,
the standard of the law which was to be obtained to entitle the
plaintiff to the stipulated compensation, made it necessary that
such law should give to the defendants the absolute right to
approach the City of Wheeling by way of Fish Creek; should release
them from the necessity of continuing their road to Wheeling unless
the city should, within one year, or the citizens of Ohio County
should, in the same time, subscribe one million dollars to the
stock of the defendants; should enable the defendants to open and
bring into use, as they progressed, the sections of their road as
they were successively finished, and should authorize the
defendants to charge, in proportion to distance, upon passengers
and goods taken from Baltimore to Wheeling, should the road be
continued to the
Page 57 U. S. 322
latter place, while the law that was actually passed made it the
right of the defendants to take the Fish Creek route depend upon
its being the cheapest, and even then placed the defendants' right
to go to Fish Creek at the option of the City of Wheeling; made it
imperative that Wheeling should be the terminus of the road,
without any subscription on the part of herself or others;
prevented the opening of any portion of her road west of
Monongahela until the whole road could be opened to Wheeling, and
obliged the defendant to charge no more for passengers or tonnage
to Wheeling than they charged to a point five miles from the river;
and that before the defendant accepted the law thus differing from
that referred to in the modified agreement of February 11, 1847,
the City of Wheeling waived its control of the route, leaving it to
depend upon its comparative cost, agreed to subscribe five hundred
thousand dollars to the stock of the defendants and provided a
depot for the defendants at the terminus of the road; and that the
adoption and acceptance of the law of March the 6th, 1847, thus
differing from Hunter's substitute, and induced by the waiver and
stipulation of Wheeling, already mentioned, and action under it,
was not such an acceptance, adoption, and action, as entitled the
plaintiff to recover."
"9. That if the jury shall believe that the plaintiff received
from the defendants the six hundred dollars given in evidence in
full discharge of his claims for compensation under the agreement
in question, then the plaintiff is not entitled to recover."
But the court refused to give the instructions as prayed by
either plaintiff or defendant, but instructed the jury as
follows:
"1. If at the time the special contract was made upon which this
suit is brought it was understood between the parties that the
services of the plaintiff were to be of the character and
description set forth in his letter to the president of the
railroad company, dated November 17, 1846, and the paper therein
enclosed, and that in consideration of the contingent compensation
mentioned in the contract, he was to use the means and influences
proposed in his letter and the accompanying paper, for the purpose
of obtaining the passage of the law mentioned in the agreement, the
contract is against the policy of the law, and no action can be
maintained."
"2. If there was no agreement between the parties that the
services of the plaintiff should be of the character and
description mentioned in his letter and communication referred to
in the preceding instruction, yet the contract is against the
policy of the law, and void if at the time it was made, the parties
agreed to conceal from the members of the Legislature of Virginia
the fact that the plaintiff was employed by the defendant
Page 57 U. S. 323
as its agent to advocate the passage of the law it desired to
obtain, and was to receive a compensation in money for his services
in case the law was passed by the legislature at the session
referred to in the agreement."
"3. And if there was no actual agreement to practice such
concealment, yet he is not entitled to recover if he did conceal
from the members of the legislature, when advocating the passage of
the law, that he was acting as agent for the defendant and was to
receive a compensation, in money, in case the law passed."
"4. But if the law was made upon a valid and legal
consideration, the contingency has not happened upon which the sum
of fifty thousand dollars was to be paid to the plaintiff -- the
law passed by the Legislature of Virginia being different in
material respects from the one proposed to be obtained by the
defendant by the agreement of February 11, 1847, and the passage of
which, by the terms of that contract, was made a condition
precedent to the payment of the money."
"5. The subsequent acceptance of the law as passed, under the
agreement with the City of Wheeling stated in the evidence was not
a waiver of the condition, and does not entitle the plaintiff to
recover in an action on the special contract."
"6. There is no evidence that the plaintiff rendered any
services or was employed to render any under any contract, express
or implied, except the special contract stated in his declaration,
and as no money is due to him under that contract, he cannot
recover upon the count upon a
quantum meruit."
"And thereupon the plaintiff excepts as well to the refusal of
his prayers as to the granting of the instructions aforesaid given,
and tenders this his second bill of exceptions, and prays that the
same may be signed and sealed by the court, which is accordingly
done ___ day of November, 1852."
"R. B. TANEY [SEAL]"
The first bill of exceptions was to the admissibility of the
evidence above mentioned.
Page 57 U. S. 325
MR. JUSTICE GRIER delivered the opinion of the Court.
A question, necessarily preliminary to our consideration of the
merits of this case, has been brought to the notice of the Court,
though not argued or urged by the counsel.
The plaintiff in error, who was also plaintiff below, avers in
his declaration that he is a citizen of Virginia, and that "The
Baltimore & Ohio Railroad Company, the defendant, is a body
corporate by an act of the General Assembly of Maryland." It has
been objected that this averment is insufficient to show
jurisdiction in the courts of the United States over the "suit" or
"controversy." The decision of this Court in the case of
Louisville Railroad v.
Letson, 2 How. 497, it is said, does not sanction
it, or if some of the doctrines advanced should seem so to do, they
are extrajudicial and therefore not authoritative.
The published report of that case (whatever the fact may have
been) exhibits no dissent to the opinion of the Court by any member
of it. It has for the space of ten years been received by the bar
as a final settlement of the questions which have so frequently
arisen under this clause of the Constitution, and the practice and
forms of pleading in the courts of the United States have been
conformed to it. Confiding in its stability, numerous controversies
involving property and interests to a large amount have been heard
and decided by the circuit courts, and by this Court, and many are
still pending here, where the jurisdiction has been assumed on the
faith of the sufficiency of such an averment. If we should now
declare these judgments to have been entered without jurisdiction
or authority, we should inflict a great and irreparable evil on the
community. There are no cases where an adherence to the maxim of
stare decisis is so absolutely necessary to the peace of
society as those which affect retroactively the jurisdiction of
courts. For this reason alone, even if the Court were now of
opinion that the principles affirmed in the case just mentioned and
that of
Page 57 U. S. 326
Bank v. Deveaux,
5 Cranch 61, were not founded on right reason, we should not be
justified in overruling them. The practice founded on these
decisions, to say the least, injures or wrongs no man while their
reversal could not fail to work wrong and injury to many.
Besides the numerous cases with similar averments over which the
Court have exercised jurisdiction without objection, we may mention
that of
Rundle v. Delaware &
Raritan Canal, 14 How. 80, as one precisely in
point with the present. The report of that case shows that the
question of jurisdiction, though not noticed in the opinion of the
Court, was not overlooked, three of the judges having severally
expressed their opinion upon it. Its value as a precedent is
therefore not merely negative. But as we do not rely only on
precedent to justify our conclusion in this case, it may not be
improper once again to notice the argument used to impugn the
correctness of our former decisions and also to make a brief
statement of the reasons which in our opinion fully vindicate their
propriety.
By the Constitution, the jurisdiction of the courts of the
United States is declared to extend,
inter alia, to
"controversies between citizens of different states." The Judiciary
act confers on the circuit courts jurisdiction "in suits between a
citizen of the state where the suit is brought and a citizen of
another state."
The reasons for conferring this jurisdiction on the courts of
the United States are thus correctly stated by a contemporary
writer (Federalist, No. 80).
"It may be esteemed as the basis of the Union 'that the citizens
of each state shall be entitled to all the privileges and
immunities of the citizens of the several states.' And if it be a
just principle that every government ought to possess the means of
executing its own provisions by its own authority, it will follow
that in order to the inviolable maintenance of that equality of
privileges and immunities, the national judiciary ought to preside
in all cases in which one state or its citizens are opposed to
another state or its citizens."
Now if this be a right or privilege guaranteed by the
Constitution to citizens of one state in their controversies with
citizens of another, it is plain that it cannot be taken away from
the plaintiff by any legislation of the state in which the
defendant resides. If A, B, and C, with other dormant or secret
partners, be empowered to act by their representatives to sue or to
be sued in a collective or corporate name, their enjoyment of these
privileges, granted by state authority, cannot nullify this
important right conferred on those who contract with them. It
was
Page 57 U. S. 327
well remarked by MR. JUSTICE CATRON in his opinion delivered in
the case of
Rundle, already referred to, that
"If the United States courts could be ousted of jurisdiction and
citizens of other states 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, 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."
Let us now examine the reasons which are considered so
conclusive and imperative that they should compel the Court to give
a construction to this clause of the Constitution practically
destructive of the privilege so clearly intended to be conferred by
it.
"A corporation, it is said, is an artificial person, a mere
legal entity, invisible and intangible."
This is no doubt metaphysically true in a certain sense. The
inference also that such an artificial entity "cannot be a citizen"
is a logical conclusion from the premises which cannot be
denied.
But a citizen who has made a contract and has a "controversy"
with a corporation may also say with equal truth that he did not
deal with a mere metaphysical abstraction, but with natural
persons; that his writ has not been served on an imaginary entity,
but on men and citizens; and that his contract was made with them
as the legal representatives of numerous unknown associates or
secret and dormant partners.
The necessities and conveniences of trade and business require
that such numerous associates and stockholders should act by
representation, and have the faculty of contracting, suing, and
being sued in a factitious or collective name. But these important
faculties, conferred on them by state legislation, for their own
convenience, cannot be wielded to deprive others of acknowledged
rights. It is not reasonable that those who deal with such persons
should be deprived of a valuable privilege by a syllogism, or
rather sophism, which deals subtly with
Page 57 U. S. 328
words and names without regard to the things or persons they are
used to represent.
Nor is it reasonable that representatives of numerous unknown
and ever-changing associates should be permitted to allege the
different citizenship of one or more of these stockholders in order
to defeat the plaintiff's privilege. It is true that these
stockholders are corporators, and represented by this "juridical
person," and come under the shadow of its name. But for all the
purposes of acting, contracting, and judicial remedy, they can
speak, act, and plead only through their representatives or
curators. For the purposes of a suit or controversy, the persons
represented by a corporate name can appear only by attorney,
appointed by its constitutional organs. The individual or personal
appearance of each and every corporator would not be a compliance
with the exigency of the writ of summons or distringas. Though
nominally, they are not really parties to the suit or controversy.
In courts of equity, where there are very numerous associates
having all the same interest, they may plead and be impleaded
through persons representing their joint interests. and as in the
case between the northern and southern branches of the Methodist
Church lately decided by this Court, the fact that individuals
adhering to each division were known to reside within both states
of which the parties to the suit were citizens was not considered
as a valid objection to the jurisdiction.
In courts of law, an act of incorporation and a corporate name
are necessary to enable the representatives of a numerous
association to sue and be sued.
"And this corporation can have no legal existence out of the
bounds of the sovereignty by which it is created. It exists only in
contemplation of law and by force of the law, and where that law
ceases to operate, the corporation can have no existence. It must
dwell in the place of its creation."
Bank of Augusta v.
Earle, 13 Pet. 512. The persons who act under these
faculties and use this corporate name may be justly presumed to be
resident in the state which is the necessary habitat of the
corporation and where alone they can be made subject to suit, and
should be estopped in equity from averring a different domicil as
against those who are compelled to seek them there, and can find
them there and nowhere else. If it were otherwise, it would be in
the power of every corporation, by electing a single director
residing in a different state, to deprive citizens of other states
with whom they have controversies of this constitutional privilege
and compel them to resort to state tribunals in cases in which, of
all others, such privilege may be considered most valuable.
But it is contended that notwithstanding the court in deciding
the question of jurisdiction, will look behind the corporate
Page 57 U. S. 329
or collective name given to the party to find the persons who
act as the representatives, curators, or trustees, of the
association, stockholders, or
cestui que trusts, and in
such capacity are the real parties to the controversy, yet that the
declaration contains no sufficient averment of their citizenship.
Whether the averment of this fact be sufficient in law is merely a
question of pleading. If the declaration sets forth facts from
which the citizenship of the parties may be presumed or legally
inferred, it is sufficient. The presumption arising from the
habitat of a corporation in the place of its creation being
conclusive as to the residence or citizenship of those who use the
corporate named and exercise the faculties conferred by it, the
allegation that the "defendants are a body corporate by the act of
the General Assembly of Maryland" is a sufficient averment that the
real defendants are citizens of that state. This form of averment
has been used for many years. Any established form of words used
for the expression of a particular fact is a sufficient averment of
it in law.
In the case of
Gassies v.
Ballon, 6 Pet. 761, the petition alleged that
"the defendant had caused himself to be naturalized an American
citizen, and that he was at the time of filing the petition
residing in the parish of West Baton Rouge."
This was held to be a sufficient averment that he was a citizen
of the State of Louisiana. And the Court said, "A citizen of the
United States residing in any state of the Union, is a citizen of
that state." They also express their regret that previous decisions
of this Court had gone so far in narrowing and limiting the rights
conferred by this article of the Constitution. And we may add that
instead of viewing it as a clause conferring a privilege on the
citizens of the different states, it has been construed too often
as if it were a penal statute, and as if a construction which did
not adhere to its very letter without regard to its obvious meaning
and intention would be a tyrannical invasion of some power supposed
to be secured to the states or not surrendered by them.
The right of choosing an impartial tribunal is a privilege of no
small practical importance, and more especially in cases where a
distant plaintiff has to contend with the power and influence of
great numbers and the combined wealth wielded by corporations in
almost every state. It is of importance also to corporations
themselves that they should enjoy the same privileges in other
states where local prejudices or jealousy might injuriously affect
them.
With these remarks on the subject of jurisdictional we will now
proceed to notice the various exceptions to the rulings of the
court on the trial.
The declaration, besides a count for work and labor done and
Page 57 U. S. 330
services rendered in procuring certain legislation in Virginia,
demands the sum of fifty thousand dollars on a special contract
made with the defendants, through a committee of the board of
directors, dated 12th of December, 1846, as follows:
"On motion it was resolved that the President be and is hereby
authorized, in addition to the agent heretofore employed by the
committee for the same purpose, to employ and make arrangements,
with other responsible persons to attend at Richmond during the
present session of the legislature in order to superintend and
further any application or other proceeding to obtain the right of
way through the State of Virginia on behalf of this company, and to
take all proper measures for that purpose; that he also be
authorized to agree with such agent or agents in case a law shall
be obtained from the said legislature during its present session
authorizing the company to extend their road through that state to
a point on the Ohio River as low down the river as Fishing Creek,
and the stockholders of this company shall afterwards accept such
law as may be obtained and determine to act under it. or, in case a
law should be passed authorizing the construction of a railroad
from any point on the Ohio River above the mouth of the Little
Kenawha and below the City of Wheeling, with authority to intersect
with the present Baltimore & Ohio Railroad, and the
stockholders of the Baltimore & Ohio Railroad Company shall
determine to accept and adopt said law or shall become the
proprietors thereof and prosecute their road according to its
provisions, then in either of the said cases the president shall be
and is authorized to pay to the agent or agents whom he may employ
in pursuance of this resolution the sum of fifty thousand dollars
in the six percent bonds of this company at their par value, and to
be made payable at any time within the period of five years.
Resolved that it shall be expressly stipulated in the agreement
with the said agent or agents employed pursuant to this resolution,
and as a condition thereof, that if no such law as aforesaid shall
pass, or if any law that may be passed shall not be accepted or
adopted or used by the stockholders, the said agents shall not be
entitled to receive any compensation whatever for the service they
may render in the premises or for any expense they may incur in
obtaining such law or otherwise."
And also the following resolution of January 18, 1847:
"On motion it was unanimously resolved that the right of Mr.
Marshall to the compensation under the existing contract shall
attach upon the passage of a law at the present session of the
legislature giving the right of way to Parkersburg or to Fishing
Creek either to the Baltimore & Ohio Railroad Company or to an
independent company, provided this company
Page 57 U. S. 331
accept the one and adopt and act under the other as contemplated
by the contract."
And also a letter from the president of the company of February
11, 1847, containing a further modification of the terms as
exhibited in the following extract:
"In this crisis, if after the utmost exertion nothing better can
be done, if it were practicable to pass Mr. Hunter's substitute
with Fish Creek instead of Fishing Creek, we would not undertake to
prevent the passage of such a law. We would then refer the whole
question to the stockholders, and I am authorized to say that
everything else failing, if such a law as is indicated pass, and
the stockholders adopt it and act under it in the manner
contemplated by the contract, your compensation shall apply to that
as to any other aspect of the case."
The defendants gave notice of the following grounds of defense,
as those upon which they intended to rely:
"1. That the agreement sought to be enforced by the plaintiff,
admitting his ability to make it out by legal proof to the extent
of his pretensions, was an agreement contrary to the policy of the
law, and which cannot be sustained."
"2. That, admitting the said agreement to be a valid one which
the courts would enforce, yet the plaintiff is not entitled to
recover, because he failed to accomplish the object for which it
was entered into."
"3. That the law of Virginia, which was accepted by the
defendants after it had been modified by the waiver of the City of
Wheeling, as mentioned in the plaintiff's notice, was not obtained
through the efforts of the plaintiff, but against his strenuous
opposition, and furnishes him no ground for his present claim."
"4. That there was a final settlement between the plaintiff and
defendants, after the passage of the Virginia law aforesaid, which
concludes him on this behalf."
On the trial, the plaintiff, after giving in evidence the
contract as above stated, produced various letters and documents
tending to show the measures pursued, and their result -- a
particular recapitulation of these facts is not necessary and would
encumber the case. A very brief outline will suffice to an
understanding of the points to be considered.
It appears that the defendants were desirous to obtain from the
Legislature of Virginia the grant of a right of way so as to strike
the Ohio River as low down as possible in view of a connection from
thence towards Cincinnati. It was the interest of the people of
Wheeling to prevent, if possible, the terminus on the road on the
Ohio from being anywhere else but at their city. In the winter of
1846-1847, the antagonist parties came into
Page 57 U. S. 332
collision again before the Legislature of Virginia at Richmond.
In this contest, the plaintiff acted as general agent of the
defendants under the contract in question. The bills granting the
desired franchise to the defendants were defeated in every form
proposed by them, and a substitute, altered and amended to suit the
interests of Wheeling, was finally passed in face of the strenuous
opposition of the defendants.
The plaintiff afterwards admitted his defeat and want of success
in fulfilling the conditions of his contract. He at the same time
demanded and received the sum of six hundred dollars for expenses
of agents &c. But as Wheeling and defendants both desired the
extension of the road to the Ohio, they finally agreed to a
compromise, modifying the operation of the act under which the road
has since been completed.
The defendants then offered in evidence in support of their
defense, on the ground of illegality of the contract, a letter from
the plaintiff to the president of the board, dated 17 November,
1846, with an accompanying document, in which plaintiff proposes
himself as agent and states his terms, and the course he advises to
be pursued, and the means to be used to ensure success, and also a
letter from the president in answer thereto stating his inability
to act on his individual responsibility and inviting an interview,
together also with a letter from the same dated 12 December in
which he says: "I am now prepared to close an arrangement with you
on the basis of your communication of the 17th of November."
The plaintiff's objection to the admission of these documents in
evidence and the reception of them form the subject of the first
bill of exceptions.
In order to judge of the competency and relevancy of these
documents to the issue in the case, it will be necessary to give a
brief statement of some portion of their contents.
The letter of November 17th commences by referring to a former
interview and a promise to submit a plan, in writing, by which it
was supposed the much desired right of way through Virginia might
be procured from the legislature. It proposes that the writer
should be appointed, as agent of the company, to manage "the
delicate and important trust." It states that, as the business
required "absolute secrecy," he could not safely get testimonials
as to his qualifications, but that he had "considerable experience
as a lobby member" before the Legislature of Virginia, and could
allege "an ostensible reason" for his presence in Richmond, and his
active interference, without disclosing his real character and
object.
The accompanying document explains the cause of previous
failures and shows what remedy or counteracting influence
Page 57 U. S. 333
should be employed. It announces that "log-rolling" was the
principal measure used to defeat them before. That it has grown
into a system; that however "skillful and unscrupulous" the friends
of defendants may have been in this respect, still their opponents
had got the advantage, being present on the ground, and "using
outdoor influence." That it was necessary to meet their opponents
with their own weapons. That the mass of the members of the
legislature were "careless and good natured," and "engaged in idle
pleasures," capable of being "moulded like wax" by the "most
pressing influences." That to get the vote of this careless mass,
"efficient means" must be adopted. That through their "kind and
social dispositions" they may be approached and influenced to do
anything not positively wrong, "where they can act without fear of
their constituents." That to the accomplishment of success it was
necessary to have "an active, interested, and well organized
influence about the house." That these agents "must be inspired
with an earnest -- nay, anxious -- wish for success," "and have
their whole reward depending on it." "Give them nothing if they
fail, endow them richly if they succeed." "Stimulate them to active
partisanship by the strong lure of high profit."
That in order to the "requisite secrecy," the company should
know but one agent, and he select the others; that the cost of all
this will "necessarily be great," as the result can be obtained
"only by offers of high contingent compensation;" that "high
services cannot be had at a low bid," and that he would not be
willing to undertake the business unless "provided with a fund of
at least $50,000."
As the contract was made "on the basis of this communication,"
there can be no doubt as to its legal competence as evidence to
show the nature and object of the agreement. As parts of one and
the same transaction, they may be considered as incorporated in the
contract declared on. The testimony is therefore competent. Is it
relevant?
As the first three propositions contained in the charge of the
court have reference to the question of the relevancy of this
matter to the issues, they may well be considered together.
They are as follows:
"1. If at the time the special contract was made upon which this
suit is brought, it was understood between the parties that the
services of the plaintiff were to be of the character and
description set forth in his letter to the president of the
railroad company dated November 17, 1846, and the paper therein
enclosed, and that, in consideration of the contingent compensation
mentioned in the contract, he was to use the means and influences
proposed in his letter and the accompanying paper
Page 57 U. S. 334
for the purpose of obtaining the passage of the law mentioned in
the agreement, the contract is against the policy of the law and no
action can be maintained."
"2. If there was no agreement between the parties that the
services of the plaintiff should be of the character and
description mentioned in his letter and communication referred to
in the preceding instruction, yet the contract is against the
policy of the law and void if at the time it was made, the parties
agreed to conceal from the members of the Legislature of Virginia
the fact that the plaintiff was employed by the defendant as its
agent to advocate the passage of the law it desired to obtain, and
was to receive a compensation, in money, for his services in case
the law was passed by the legislature at the session referred to in
the agreement."
"3. And if there was no actual agreement to practice such
concealment, yet he is not entitled to recover if he did conceal
from the members of the legislature, when advocating the passage of
the law, that he was acting as agent for the defendant, and was to
receive a compensation, in money, in case the law passed."
It is an undoubted principle of the common law that it will not
lend its aid to enforce a contract to do an act that is illegal or
which is inconsistent with sound morals or public policy or which
tends to corrupt or contaminate, by improper influences, the
integrity of our social or political institutions. Hence all
contracts to evade the revenue laws are void. Persons entering into
the marriage relation should be free from extraneous or deceptive
influences; hence the law avoids all contracts to pay money for
procuring a marriage. It is the interest of the state that all
places of public trust should be filled by men of capacity and
integrity, and that the appointing power should be shielded from
influences which may prevent the best selection; hence the law
annuls every contract for procuring the appointment or election of
any person to an office. The pardoning power, committed to the
executive, should be exercised as free from any improper bias or
influence as the trial of the convict before the court;
consequently the law will not enforce a contract to pay money for
soliciting petitions or using influence to obtain a pardon.
Legislators should act from high considerations of public duty.
Public policy and sound morality do therefore imperatively require
that courts should put the stamp of their disapprobation on every
act, and pronounce void every contract the ultimate or probable
tendency of which would be to sully the purity or mislead the
judgments of those to whom the high trust of legislation is
confided.
All persons whose interests may in any way be affected by
Page 57 U. S. 335
any public or private act of the legislature have an undoubted
right to urge their claims and arguments, either in person or by
counsel professing to act for them, before legislative committees
as well as in courts of justice. But where persons act as counsel
or agents or in any representative capacity, it is due to those
before whom they plead or solicit that they should honestly appear
in their true characters, so that their arguments and
representations, openly and candidly made, may receive their just
weight and consideration. A hired advocate or agent assuming to act
in a different character is practicing deceit on the legislature.
Advice or information flowing from the unbiased judgment of
disinterested persons will naturally be received with more
confidence and less scrupulously examined than where the
recommendations are known to be the result of pecuniary interest,
or the arguments prompted and pressed by hope of a large contingent
reward, and the agent "stimulated to active partisanship by the
strong lure of high profit." Any attempts to deceive persons
entrusted with the high functions of legislation by secret
combinations, or to create or bring into operation undue influences
of any kind, have all the injurious effects of a direct fraud on
the public.
Legislators should act with a single eye to the true interest of
the whole people, and courts of justice can give no countenance to
the use of means which may subject them to be misled by the
pertinacious importunity and indirect influences of interested and
unscrupulous agents or solicitors.
Influences secretly urged under false and covert pretenses must
necessarily operate deleteriously on legislative action, whether it
be employed to obtain the passage of private or public acts.
Bribes, in the shape of high contingent compensation, must
necessarily lead to the use of improper means and the exercise of
undue influence. Their necessary consequence is the demoralization
of the agent who covenants for them; he is soon brought to believe
that any means which will produce so beneficial a result to himself
are "proper means," and that a share of these profits may have the
same effect of quickening the perceptions and warming the zeal of
influential or "careless" members in favor of his bill. The use of
such means and such agents will have the effect to subject the
state governments to the combined capital of wealthy corporations,
and produce universal corruption, commencing with the
representative and ending with the elector. Speculators in
legislation, public and private, a compact corps of venal
solicitors, vending their secret influences, will infest the
capital of the Union and of every state, till corruption shall
become the normal condition of the body politic, and it will be
said of us as of Rome --
omne Romae venale.
Page 57 U. S. 336
That the consequences we deprecate are not merely visionary, the
Act of Congress of 1853, c. 81, "to prevent frauds upon the
Treasury of the United States" may be cited as legitimate evidence.
This act annuls all champertous contracts with agents of private
claims.
2d. It forbids all officers of the United States to be engaged
as agents or attorneys for prosecuting claims or from receiving any
gratuity or interest in them in consideration of having aided or
assisted in the prosecution of them, under penalty of fine and
imprisonment in the penitentiary.
3d. It forbids members of Congress, under a like penalty, from
acting as agents for any claim in consideration of pay or
compensation, or from accepting any gratuity for the same.
4th. It subjects any person who shall attempt to bribe a member
of Congress to punishment in the penitentiary, and the party
accepting the bribe to the forfeiture of his office.
If severity of legislation be any evidence of the practice of
the offenses prohibited, it must be the duty of courts to take a
firm stand, and discountenance, as against the policy of the law,
any and every contract which may tend to introduce the offenses
prohibited.
Nor are these principles now advanced for the first time.
Whenever similar cases have been brought to the notice of courts
they have received the same decision.
Without examining them particularly, we would refer to the cases
of
Fuller v. Dame, 18 Pick. 470;
Hatzfield v.
Gulden, 7 Watts 152;
Clippinger v. Hepbaugh, 5 Watts
& Serg. 315;
Wood v. McCan, 6 Dana 366; and
Hunt
v. Test, 8 Ala. 719.
The Commonwealth v. Callaghan, 2
Va. 460.
The sum of these cases is --
1st. That all contracts for a contingent compensation for
obtaining legislation, or to use personal or any secret or sinister
influence on legislators, is void by the policy of the law.
2d. Secrecy, as to the character under which the agent or
solicitor acts, tends to deception, and is immoral and fraudulent;
and where the agent contracts to use secret influences, or
voluntarily, without contract with his principal, uses such means,
he cannot have the assistance of a court to recover
compensation.
3d. That what in the technical vocabulary of politicians is
termed "log-rolling," is a misdemeanor at common law, punishable by
indictment.
It follows, as a consequence that the documents given in
evidence under the first bill of exceptions were relevant to the
issue, and that the court below very properly gave the instructions
under consideration.
Page 57 U. S. 337
We now come to the last three exceptions to the instructions of
the court, which were as follows:
"4. But if the contract was made upon a valid and legal
consideration, the contingency has not happened upon which the sum
of fifty thousand dollars was to be paid to the plaintiff -- the
law passed by the Legislature of Virginia being different, in
material respects, from the one proposed to be obtained by the
defendant by the agreement of February 11, 1847; and the passage of
which, by the terms of that contract, was made a condition
precedent to the payment of the money."
"5. The subsequent acceptance of the law as passed, under the
agreement with the City of Wheeling, stated in the evidence, was
not a waiver of the condition, and does not entitle the plaintiff
to recover in an action on the special contract."
"6. There is no evidence that the plaintiff rendered any
services, or was employed to render any, under any contract,
express or implied, except the special contract stated in his
declaration, and as no money is due to him, under that contract, he
cannot recover upon the court of
quantum meruit."
We do not think it necessary, in order to justify these
instructions of the court below, or to vindicate our affirmance of
them, to enter into a long and perplexed history of the various
schemes of legislative action, and their results, as exhibited by
the testimony in the case. It would require a map of the country,
and tedious and prolix explanations. Suffice it to say that after a
careful examination of the admitted facts of the case, we are fully
satisfied of the correctness of the instructions.
1. Because the plaintiff, by his own showing, had not performed
the conditions which entitled him to demand this stipulated
compensation.
2. The act of assembly which was passed, and afterwards used by
defendant for want of better, was obtained by the opponents of
defendants, and in spite of the opposition of plaintiff, and the
fact that the company were compelled to accept the act under
modifications, by compromise with their opponents, would not
entitle plaintiff to his stipulated reward.
3. By the stipulations of his contract he is estopped from
claiming under a
quantum meruit, as his whole compensation
depended on success in obtaining certain specified legislation,
which he acknowledged he had failed to achieve.
The judgment of the circuit court is therefore affirmed,
with costs.
MR. JUSTICE Catron, MR. JUSTICE Daniel, and MR. JUSTICE Campbell
dissented.
MR. JUSTICE CATRON said that he concurred with his
Page 57 U. S. 338
brother, MR. JUSTICE Campbell in the opinion which he was about
to pronounce, and had authorized him so to state. But inasmuch as
reference had been made in the opinion of the Court, which had just
been delivered, to an opinion which he himself had given in the
case of
Rundle v. Delaware &
Raritan Canal Company, 14 How. 80, he felt it to be
a duty to himself to remark, that he had at all times denied that a
corporation is a citizen within the sense of the Constitution, and
so he had declared in the opinion just referred to. He had there
stated the necessity of the existence of jurisdiction in the
federal courts as against corporations, but held that citizenship
of the president and directors must be averred to be of a different
state from the other party to the suit; without which averment,
this Court could not proceed, according to the settled practice of
fifty years standing.
Letson's Case, which is the
foundation of the new doctrine contained the necessary averment
within the settled practice, and consequently it was not necessary
to give a separate opinion in that case.
He remarked further that according to the assumption that a
corporation was a citizen of the state where it was incorporated, a
company having a charter for a railroad in two states and there
were many such might sue citizens of the state and place where the
president and directors resided, averring that the company was a
citizen of the other state, and
vice versa. In such case
the corporation could sue in every federal court in the Union.
MR. JUSTICE DANIEL.
From the opinion just delivered I must declare my dissent. In
the settlement of the discreditable controversy between the parties
to this cause, I take no part. If I did, I should probably say that
it is a case without merits, either in the plaintiff or in the
defendants, and that in such a case they should be dismissed by
courts of justice to settle their dispute by some standard which is
cognate to the transaction in which they have been engaged.
My participation in this case has reference to a far different
and more important ingredient involved in the opinion just
announced, namely, the power of this Court to adjudicate this cause
consistently, with a just obedience to that authority from which,
and from which alone, their being and their every power are
derived.
Having in former instances, and particularly in the case of the
Rundle v. Delaware & Raritan Canal Company, endeavored
to expose the utter want of jurisdiction in the courts of the
United States over causes in which corporations shall be
parties
Page 57 U. S. 339
either as plaintiffs or defendants, I hold it to be unnecessary
in this place to repeat or to enlarge upon the positions maintained
in the case above mentioned, as they are presented in
55 U. S. 14 How.
95. Indeed, from any real necessity for enforcing the general
fundamental proposition contended for by me in the case of
Rundle v. Delaware & Raritan Canal Company, namely
that under the second section of the third article of the
Constitution, citizens only -- that is to say men, material,
social, moral, sentient beings -- must be parties, in order to give
jurisdiction to the federal courts, I am wholly relieved by the
virtual, obvious, and inevitable concessions, comprised in the
attempt now essayed, to carry the provision of the Constitution
beyond either its philological, technical, political, or vulgar
acceptation. For in no one step in the progress of this attempt, is
it denied that a corporation is not and cannot be a citizen, nor
that a citizen does not mean a corporation, nor that the assertion
of a power by an individual outside of the corporation, and
interfering with and controlling its organization and functions,
whatever might be the degree of interest owned by that individual
in the corporation, would be incompatible with the existence of the
corporate body itself. Nothing of this kind is attempted. But an
effort is made to escape from the effect of these concessions, by
assumptions which leave them in all their force, and show that such
concessions and assumptions cannot exist in harmony with each
other.
Thus it has been insisted that a corporation, created by a
state, can have no being or faculties beyond the limits of that
state, and if its president and officers reside within that state
such a conjuncture will meet and satisfy the predicament laid down
by the Constitution.
The want of integrity in this argument is exposed by the
following questions:
1. Does the restriction of the corporate body within particular
geographical limits, or the residence of its officers within those
limits, render it less a corporation, or alter its nature and legal
character in any degree?
2. Does the restriction of the corporate faculties within given
bounds, necessarily or by any reasonable presumption, imply that
the interest of its stockholders, either in its property or its
acts, is confined to the same limits? If it does, then a change of
residence by officers, agents, or stockholders, or a transfer of a
portion of the interests of the latter, would destroy the
qualification of citizenship depending upon locality. If it would
not have this effect, then this anomalous citizen may possess the
rights of both plaintiff and defendant, nay, by a sort of plural
being or ubiquity, may be a citizen of every state in the
Union,
Page 57 U. S. 340
may even be a state and a citizen of the same state at the same
time.
Again it has been said that the Constitution has reference
merely to the interests of those who may have access to the federal
courts, and that provided those interests can be traced, or
presumed to have existence in persons residing in different states,
it cannot be required that those by whom such interests are legally
held and controlled, or represented, should be alleged or proved to
be citizens, or should appear in that character as parties upon the
record. In reply to this proposition it may be asked, upon what
principle anyone can be admitted into a court of justice apart from
the interest he may possess in the matter in controversy, and
whether it is not that interest alone and the position he holds in
relation thereto, which can give him access to any court? But,
again, the language of the Constitution refers expressly and
conclusively to the civil or political character of the party
litigant, and constitutes that character the test of his capacity
to sue or be sued in the courts of the United States.
In strict accordance with this doctrine has been the
interpretation of the Constitution from the early, and what may in
some sense be called the cotemporaneous, interpretation of that
instrument, an interpretation handed down in an unbroken series of
decision, until crossed and disturbed by the anomalous ruling in
the case of
Letson v. Louisville Railroad Company.
Beginning with the case of
Bingham v.
Cabot, 3 Dall. 382, and running through the cases
of
Turner v. Bank of North
America, 4 Dall. 8;
Turner's
Admr. v. Enrille, 4 Dall. 7;
Mossman v.
Higginson, 4 Dall. 12;
Abercrombie v.
Dupuis, 1 Cranch 343 [0mitted];
Wood v. Wagnon, 2
Cranch 1 [omitted];
Capron v. Van
Noorden, 2 Cranch 126;
Strawbridge
v. Curtis, 3 Cranch 267;
Bank of the
United States v. Deveaux, 5 Cranch 61;
Hodgson v. Bowerbank, 5
Cranch 303;
Corporation of New Orleans v.
Winter, 1 Wheat. 91;
Sullivan
v. Fulton Steamboat Company, 6 Wheat. 450 -- the
doctrine is ruled and reiterated, that in order to maintain an
action in the courts of the United States, under the clause in
question, not only must the parties be citizens of different
states, but that this character must be averred explicitly, and
must appear upon the record, and cannot be inferred from residence
or locality, however expressly stated, and that the failure to make
the required averment will be fatal to the jurisdiction of a
federal court, either original or appellate; and is not cured by
the want of a plea or of a formal exception in any other form. But
the decisions have not stopped at this point; they have ruled that
to come within the meaning of the Constitution, the cause of
action
Page 57 U. S. 341
must have existed
ab origine between citizens of
different states, and that the article in question cannot be evaded
by a transfer of rights which, by their primitive and intrinsic
character, were not cognizable in the courts of the United States
as between citizens of different states.
See Turner v. Bank of
North America, already cited, and the cases of
Montalet v.
Murray, 4 Cranch 46; and
Gibson v.
Chew, 16 Pet. 315. It is remarkable to perceive how
perfectly the case of
Turner v. Bank of North America
covers that how under consideration, and how strongly and
emphatically it rebukes the effort to claim by indirect and violent
construction, powers for the federal courts which not only have
never been delegated to them, nor implied by the silence of the
Constitution, but still more powers assumed in defiance of its
express inhibition. In the case last mentioned, the plaintiffs were
well described as citizens of Pennsylvania, suing Turner and
others, who were properly described as citizens of North Carolina,
upon a promissory note made by the defendants, and payable to
Biddle and Company, and which, by assignment, became the property
of the plaintiffs. Biddle & Co. were not otherwise described
than as "using trade and partnership" at Philadelphia or North
Carolina. Upon an exception upon argument, taken for the first time
in this Court, Ellsworth, Chief Justice, pronounced its decision in
these words:
"A circuit court is one of limited jurisdiction, and has
cognizance not of causes generally, but only of a few specially
circumstanced, amounting to a small proportion of the cases which
an unlimited jurisdiction would embrace. And the fair presumption
is not as with regard to a court of general jurisdiction, that a
cause is within its jurisdiction unless the contrary appears, but
rather that a cause is without its jurisdiction till the contrary
appears."
This renders it necessary, inasmuch as the proceedings of no
court can be valid farther than its jurisdiction appears or can be
presumed, to set forth upon the record of a circuit court the facts
or circumstances which give it jurisdiction either expressly or in
such manner as to render them certain by legal intendment. Amongst
those circumstances it is necessary, where the defendant appears to
be a citizen of one state, to show that the plaintiff is a citizen
of some other state, or an alien, or if, as in the present case,
the suit be upon a promissory note by an assignee, to show that the
original promisee is so, for by a special provision of the statute
it is his description as well as that of the assignee which
effectuates the jurisdiction; but here the description given of the
promisee only is that he used trade at Philadelphia or North
Carolina, which, taking either place for that where he used trade,
contains no averment that
Page 57 U. S. 342
he was a citizen of a state other than that of North Carolina,
or an alien, nor anything which by legal intendment can amount to
such an averment. Let it be remembered, that the statute alluded to
by Chief Justice Ellsworth is nothing more nor less than an
assertion in terms of the second section of the third article of
the Constitution, and it may then be asked what becomes of this
awkward attempt to force upon both the Constitution and statute a
construction which the just meaning of both absolutely repels?
Everyone must be sensible that the seat of a man's business, of his
daily pursuits and occupations, must probably if not necessarily,
be the place of his residence; yet here we find it expressly ruled
that such a commorancy by no just legal intendment, any more than
by express language, constitutes him a citizen of that community or
state in which he may happen to be then residing or transacting his
business; moreover, it is familiar to every lawyer or other person
conversant with history that during the periods of greatest
jealousy and strictness of the English polity, aliens were
permitted, for the convenience and advancement of commerce, to
reside within the realm and to rent and occupy real property; but
it never was pretended that such permission or residence clothed
them with the character or with a single right pertaining to a
British subject.
Nor has the doctrine ruled by the cases just cited been applied
to proceedings at law alone, in which a peculiar strictness or an
adherence to what may seem to partake of form is adhered to. The
overruling authority of the Constitution has been regarded by this
Court as equally extending itself to equitable as to legal rights
and proceedings in the courts of the United States. Thus, in the
case of
Course v. Stead,
4 Dall. 22. That was a suit in equity in the Circuit Court of the
United States for the District of Georgia, in which it was deemed
necessary to make a new party by a supplemental bill. This last
bill recited the original bill, and all the orders which had been
made in the cause, but omitted to allege the citizenship of the
newly made defendant. In this case, when brought here by appeal
from the court below, this Court said, in reference to the omission
to aver the citizenship of the new party, "it is unnecessary to
form or to deliver any opinion upon the merits of this cause; let
the decree of the circuit court be reversed." The case of
Jackson v.
Ashton, in 8 Pet. 148, is still more in point. This
also was a suit in equity. The caption of the bill was in these
words: "Thomas Jackson and others, citizens of the State of
Virginia v. Rev. William E. Ashton, a citizen of Pennsylvania."
What said this Court by its organ, Marshall, Chief Justice, upon
this state of the case?
"The title or
Page 57 U. S. 343
caption of the bill is no part of the bill, and does not remove
the objection of the defects in the pleadings. The bill and
proceedings should state the citizenship of the parties to give the
court jurisdiction."
In these last decisions must be perceived the most emphatic
refutation of this newly assumed version of the Constitution, which
affirms that, although by the language of that instrument
citizenship and neither residence nor property, but citizenship,
the civil and political relation or status independently of either,
is explicitly demanded, yet this requisition is fully satisfied by
the presumption of a beneficiary interest in property apart either
from possession or right of possession or from any legal estate or
title makes the interest thus inferred equivalent with citizenship
of the person to whom interest is thus strangely imputed. Perhaps
the most singular circumstance attending the interpolation of this
new doctrine is the effort made to sustain it upon the rule
stare decisis. After the numerous and direct authorities
before cited, showing the inapplicability to this case of this
rule, it would have been thought
a priori that the very
last aid to be invoked in its support would be the maxim
stare
decisis. For this new class of citizen corporations,
incongruous as it must appear to every legal definition or
conception, is not less incongruous nor less novel to the relation
claimed for it, or rather for its total want of relation to the
settled adjudications of this Court. It is strictly a new creation,
an alien and an intruder, and is at war with almost all that has
gone before it, and can trace its being no farther back than the
case of
Letson v. Louisville Railroad Company.
The principle
stare decisis, adopted by the courts in
order to give stability to private rights and to prevent the
mischiefs incident to mutations for light and insufficient causes,
is doubtless a wholesome rule of decision when derived from
legitimate and competent authority, and when limited to the
necessity which shall have demanded its application; but, like
every other rule, must be fruitful of ill when it shall be wrested
to the suppression of reason or duty, or to the arbitrary
maintenance of injustice, of palpable error, or of absurdity. Such
an application of this rule must be necessarily to rivet upon
justice, upon social improvement and happiness, the fetters of
ignorance, of wrong, and usurpation. It is a rule which, whenever
applied, should be derived from a sound discretion, a discretion
having its origin in the regular and legitimate powers of those who
assert it. It can never be appealed to in derogation or for the
destruction of the supreme authority, of that authority which
created and which holds in subordination the agents whose functions
it has defined, and bounded by clear and plainly marked limits.
Page 57 U. S. 344
Wherever the Constitution commands, discretion terminates.
Considerations of policy or convenience, if ever appealed to -- I
had almost said if ever imagined in derogation of its mandate --
become an offense. Beyond the Constitution or the powers it
invests, every act must be a violation of duty, an usurpation.
There cannot be a more striking example than is instanced by the
case before us, of the mischiefs that must follow from disregarding
the language, the plain words, or what may be termed the body, the
corpus, of the Constitution, to ramble in pursuit of some
ignis fatuus of construction or implication, called its
spirit or its intention -- a spirit not unfrequently about as
veracious, and as closely connected with the Constitution, as are
the spirits of the dead with the revolving tables and chairs which,
by a fashionable metempsychosis of the day, they are said to
animate.
The second section of the third article of the Constitution
prescribes citizenship as an indispensable requisite for obtaining
admission to the courts of the United States -- prescribes it in
language too plain for misapprehension. This Court, in the case of
Deveaux v. Bank of the United States, yielded obedience,
professedly at any rate, to the constitutional mandate, for it
asserted the indispensable requisite of citizenship; but in an
unhappy attempt to reconcile that obedience with an unwarranted
claim to power, it utterly demolished the legal rights -- nay, the
very existence of one of the parties to the controversy -- thereby
taking from that party all standing or capacity to appear in any
court. This was
ignis fatuus, No. 1. This was succeeded by
the case of
Letson v. Cincinnati & Louisville Railroad
Company, in which, by a species of judicial resurrection, this
party the corporation was
deterree, raised up again, but
was not restored to the full possession of life and vigor, or to
the use of all his members and faculties, nor even allowed the
privilege of his original name, but semi-animate, and in virtue of
some rite of judicial baptism, though "curtailed of his natural
dimensions," he is rendered equal to a release from the thraldom of
constitutional restriction, and made competent at any rate to the
power of commanding the action of the federal courts. This is
ignis fatuus, No. 2. Next in order is the case of
Marshall v. Baltimore & Ohio Railroad Company. This is
indeed the
chef d'oeuvre amongst the experiments to
command the action of the spirit in defiance of the body of the
Constitution.
It is compelled, from the negation of that instrument, by some
necromantic influence, potent as that by which, as we read, the
resisting Pythia was constrained to yield her vaticinations of an
occult futurity. For in this case is manifested the most
Page 57 U. S. 345
entire disregard of any and every qualification, political,
civil, or local. This company is not described as a citizen or
resident of any state; nor as having for its members the citizens
of any state; nor as a
quasi-citizen; nor as having any of
the rights of a citizen; nor as residing or being located in any
state, or in any other place. No intimation of its "whereabout" is
alluded to. It is said to have been incorporated by the State of
Maryland; but whether the State of Maryland had authority to fix
its locality or ever directed that locality, and whether that be in
the moon or
in terra incognita, is no where disclosed. It
is said that because this company was incorporated by the
Legislature of Maryland, we may conjecture, and are bound to
conjecture, that it is situated in Maryland, and must possess all
the qualifications appertaining to a citizen of Maryland to sue or
be sued in the courts of the United States; and this inference we
are called upon to deduce, in opposition to the pleadings, the
proofs, and the arguments, all of which demonstrate, that this
corporation claims to extend its property, its powers, and
operations, and of course its locality, over a portion of the State
of Virginia, and that it was in reference to its rights and
operations within the latter state, that the present controversy
had its origin.
Thus does it appear to me that this Court has been led on from
dark to darker, until at present it is environed and is beaconed
onward by varying and deceptive gleams, calculated to end in a
deeper and more dense obscurity. In dread of the precipices to
which they would conduct me, I am unwilling to trust myself to
these rambling lights, and if I cannot have reflected upon my steps
the bright and cheering day-spring of the Constitution, I feel
bound nevertheless to remit no effort to halt in what, to my
apprehension, is the path that terminates in ruin. And in
considering the tendencies and the results of this progress, there
is nothing which seems to me more calculated to hasten them than is
the too evidently prevailing disposition to trench upon the barrier
which, in the creation by the several states of the federal
government, they designed to draw around and protect their
sovereign authority and their social and private rights; and to
regard and treat with affected derision every effort to arrest any
hostile approach, either indirectly or openly, to the consecrated
precincts of that barrier. It is indeed a sad symptom of the
downward progress of political morals, when any appeal to the
Constitution shall fail to "give us pause," and to suggest the
necessity for solemn reflection. Still more fearful is the
prevalence of the disposition, either in or out of office, to meet
the honest or scrupulous devotion to its commands with a sneer, as
folly unsuited to the times, and condemned by that
Page 57 U. S. 346
new-born wisdom which measures the Constitution only by its own
superior and infallible standard of policy and convenience. By the
disciples of this new morality it seems to be thought that the
mandates or axioms of the Constitution, when found obstructing the
way to power, and when they cannot be overstepped by truth or
logic, may be conveniently turned and shunned under the
denomination of abstractions or refinements; and the loyal
supporters of those mandates may be borne down under the reproach
of a narrow prejudice or fanaticism incapable of perceiving through
the letter, and, in contradiction of the language of the charter,
its true spirit and intent, and as being wholly behind the sagacity
and requirements of the age.
We cannot, however, resist the disposition to ask of those whose
expanded and more pervading view can penetrate beyond the palpable
form of the charter, what it is they mean to convey by the term
"abstraction," which is found so well adapted to their purposes? We
would, with becoming modesty, inquire whether every axiom or
precept, either in politics or ethics, or in any other science, is
not an abstraction? Whether truth itself, whether justice or common
honesty is not an abstraction? And we would farther ask those who
so deal with what they call abstractions, whether they design to
assail all general precepts and definitions as incapable of
becoming the fixed and fundamental basis of rights or of duties.
The philosophy of these expositions may easily embrace the
rejection of the decalogue itself, and might be particularly
effectual in reference to that injunction which forbids the
coveting of all that appertains to our neighbor. The Constitution
itself is nothing more than an enumeration of general abstract
rules, promulgated by the several states, for the guidance and
control of their creature or agent, the federal government, which
for their exclusive benefit they were about to call into being.
Apart from these abstract rules the federal government can have no
functions and no existence. All its attributes are strictly
derivative, and any and every attempt to transcend the foundations
those proscribed abstractions on which its existence depends, is an
attempt at anarchy, violence, and usurpation. Amongst the most
dangerous means, perhaps, of accomplishing this usurpation, because
its application is noiseless whilst it is persevering, is the
habitual interference, for reasons entirely insufficient, by the
federal authorities with the governments of the several states; and
this too most commonly under the strange (I had almost called it
the preposterous) pretext of guarding the people of the states
against their own governments, constituted of and administered by
their own fellow citizens, bound to them by the sympathies arising
from a community or identity of interests,
Page 57 U. S. 347
from intimate intercourse, and selected by and responsible to
themselves. Or it may be said, under the excuse of protecting the
people of the states against themselves, converting the federal
government in reference to the states into one grand commission,
"De lunatico inquirendo." The effect of this practice is
to reduce the people of the states and their governments under an
habitual subserviency to federal power, and gives to the latter
what ever has been and ever must be, the result of intervention by
a foreign, a powerful, and interested mediator, the lion's share in
every division. For myself, I would never hunt with the lion. I
would anxiously avoid his path, and as far as possible keep him
from my own, always bearing in mind the pregnant reply told in the
Apologue as having been made to his gracious invitation to visit
him in his lair; that although in the path that conducted to its
entrance, innumerable footprints were to be seen, yet in the same
path there could be discerned
"Nulla vestigia retrorsum."
The vortex of federal encroachment is of a capacity ample enough
for the engulfing and retention of every power, and inevitably must
a catastrophe like this ensue, so long as a justification of power,
however obtained, and the end of every hope of escape or redemption
can, to the sickening and desponding sense, in the iron rule of
stare decisis, be proclaimed. A rule which says to us,
"The abuse has been already put in practice; it has, by practice
merely, become sanctified; and may therefore be repeated at
pleasure." The promulgation of a doctrine like this does indeed cut
off all hope of redress, of escape, or of redemption, unless one
may be looked for, however remote, in a single remedy -- that sharp
remedy to be applied by the true original sovereignty abiding with
the states of this Union, namely a reorganization of existing
institutions such as shall give assurance that if in their
definition and announcement their rights can, by their appointed
agents, be esteemed as abstractions merely, yet in the concrete --
that is in the exercise and enjoyment -- these rights are real and
substantive, and may neither be impaired nor denied.
My opinion is that this cause should have been dismissed by the
circuit court for want of jurisdiction, and should now be remanded
to that court with instruction for its dismission.
MR. JUSTICE CAMPBELL.
I dissent from that portion of the opinion of the court which
affirms the jurisdiction of the circuit court in this case. The
question involves a construction of a clause in the Constitution,
and arises under circumstances which make it proper that I should
record the reasons for the dissent.
Page 57 U. S. 348
The conditions under which corporations might be parties to
suits in the courts of the United States engaged the attention of
this Court not long after its organization. At the session of the
Court in 1809, three cases exhibited questions of jurisdiction in
regard to them, under three distinct aspects.
The Bank of the
United States v. Deveaux, was the case of a corporation
plaintiff, whose corporators were described as citizens of
Pennsylvania suing a citizen of Georgia in the federal court of
that state. The case of
Wood v. Maryland Insurance Company
was that of a corporation defendant, whose corporators were
properly described, sued in the state of its charter. And the case
of
Hope Insurance Company v. Boardman was that of a
"legally incorporated body," sued in the state from which it
derived its charter, and was "legally established," but of whose
corporators there was no description,
9
U. S. 5 Cranch 57,
9
U. S. 61.
The cases were argued together by counsel of eminent ability,
with preparation and care, and were decided by the court with much
deliberation and solemnity. Chief Justice Marshall declared the
opinion of the Court to be
"that the invisible, intangible, and artificial being, the 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 the corporate name."
As it appeared in the two cases first mentioned that the
corporators might sue and be sued in the courts of the United
States under the circumstances of the cases, the Court on those
cases treated them "as a company of individuals who, in transacting
their joint concerns, had used a legal name," and for the
reason
"that the right of a corporation to litigate depended upon the
character as to citizenship of the members which compose it, and
that a body corporate cannot be a citizen within the meaning of the
Constitution. The judgment in the last case was reversed for want
of jurisdiction."
In
Sullivan v. Fulton Steamboat
Company, 6 Wheat. 450, the defendant was described
as a body corporate "incorporated by the Legislature of the State
of New York, for the purpose of navigating, by steamboats, the
waters of East River or Long Island Sound in that state." This
corporation was sued in New York. Upon appeal, this Court
determined that the circuit court had no jurisdiction of the
defendant. In
Breithaupt v. Bank of Georgia, that
corporation was sued in that state, but this Court certified
"that as the bill did not aver that the corporators of the Bank
of Georgia are citizens of the State of Georgia, the circuit court
had no jurisdiction of the case."
In
Vicksburg Bank v.
Slocomb, 14 Pet. 60, a corporation was sued by a
citizen of a different state, in the state of its
Page 57 U. S. 349
charter, but it appearing by plea that two of its corporators
were citizens of the same state as the plaintiff, this Court
declined jurisdiction for the federal tribunals. This was in
accordance with the circuit decisions, 4 Wash.C.C. 597; 3 Summ.
472; 1 Paine; and their doctrine was repeated in
Irvine v.
Lowrey, 14 Pet. 293. Such was the condition of the
precedents in this Court when, in 1844, the case of
Louisville Railroad Company v.
Letson, 2 How. 497, arose. The case was one of a
New York plaintiff suing a South Carolina corporation, in that
state, and describing its corporators as citizens. It appeared by
plea, among other things, not material to the present discussion,
"that two of the corporators were citizens of North Carolina."
In similar pleas, before this, it had appeared that the
corporators belonged to the state of the adverse party, and
consequently were within the exclusion of the eleventh section of
the Judiciary Act of 1789. In the present case, the plaintiff was a
citizen from a different state from these corporators. The court
notices this fact as a peculiarity. "The point," they say,
"has never before been under the consideration of this Court. We
are not aware that it ever occurred in either of the circuits until
it was made in this case. It has not then been directly ruled in
any case."
The court proceeded then to decide that there was jurisdiction
under the Constitution, for the parties were citizens of different
states, and that the Judiciary act did not exclude it. Thus was
this point in the plea disposed of, upon grounds which unsettled
none of the cases before cited. The Court avows this, and says,
"that the case might be safely put upon these reasonings,"
conducted "in deference to the doctrines of former cases." It then
proceeds,
"but there is a broader ground, upon which we desire to be
understood upon which we altogether rest our present judgment,
although it might be maintained upon the narrower ground already
suggested. It is that a corporation created by and doing business
in a particular state, is to be deemed, to all intents and
purposes, as a person, although an artificial person, an inhabitant
of the same state, for the purposes of its incorporation, capable
of being treated as a citizen of that state, as much as a natural
person."
Since the decision of
Letson's Case, there have been
cases of corporations, suing in the federal courts beyond the state
of their location, and suing and being sued in the state of their
location, in which this question might have been considered in this
Court. But there was no argument at the bar, and no notice of it in
the opinion of the Court. In one of these, one of the six judges
who assisted in the decision of
Letson's Case expressed
strongly a disapprobation of its doctrine, while another
limited
Page 57 U. S. 350
the conclusions of the court to the decision of the case then
before it.
Rundle v. Delaware Canal
Company, 14 How. 80.
The case of
Indiana Railroad Company v.
Michigan Railroad Company, 15 How. 233, presented
the question now before us, and at that time I was favorable to its
reexamination, but this was expressly waived by the Court, and the
case decided upon another question of jurisdiction.
In the case of the Methodist Church, there was but one
corporation before the Court as a party. The two corporators who
composed that were defendants in their corporate, as well as
individual capacity. The citizenship of all the parties to the
record was legally declared; and the parties to the record legally
represented, all the interests of the voluntary association at
issue. In reference to jurisdiction, Justice Washington says,
"The cases of a voluntary association, trustees, executors,
partners, legatees, distributees, parishioners, and the like are
totally dissimilar to a corporation, and this dissimilarity arises
from the peculiar character of a corporation, 4 Wash.C.C. 595, and
this is clear by the decisions of this Court.
8 U. S.
4 Cranch 306;
21 U. S. 8 Wheat. 642."
I have been thus specific in the statement of the precedents in
the court, that it may appear that this dissent involves no attempt
to innovate upon the doctrines of the court, but the contrary, to
maintain those sustained by time and authority in all their
integrity.
The declaration before us describes the defendant "as a body
corporate by act of the General Assembly of Maryland," and
corresponds therefore with the cases cited from
9
U. S. 5 Cranch 57;
19 U. S. 6 Wheat.
450;
26 U. S. 1 Pet.
238, and in those cases jurisdiction was first questioned and
disclaimed in this Court. These cases were not cited in
Letson's Case, and are decisive of this.
If we search the record for facts to sustain the jurisdiction,
we can collect that the defendant has been recognized as a body
corporate by the Legislature of Virginia, is commorant, and
transacts business there by its authority, has for its corporators
citizens and a city of that state, and that the plaintiff is also a
citizen of Virginia. If these facts are considered with reference
to the question of jurisdiction, all the cases decided by this
Court on this subject have principles which would exclude it. Even
Letson's Case prescribes that the corporation should carry
on its business in the state of its charter, and that case hardly
contemplated an estoppel such as is described in the opinion of the
Court.
I am compelled to consider this case as uncontrolled by the
declaration of doctrine in
Letson's Case, nor do I
consider the cases in which the decision of the question has been
waived as obligatory. I cannot look for the conclusions of this
Court or
Page 57 U. S. 351
any of its members, except from the public, authorized and
responsible opinions delivered here in cases legitimately calling
for them. For this conclusion I have the sanction of the highest
authority. Chief Justice Marshall, replying to the argument that
corporations under no circumstances and by no averment could be a
party to a suit in the courts of the United States, says
"repeatedly has this Court decided cases between a corporation and
an individual without feeling a doubt of its jurisdiction," and
adds, "those decisions are not cited as authority, for they were
made without a consideration of the particular point."
The inquiry now presented is shall I concur in a judgment which
removes the ancient landmarks of the Court in reference to its
jurisdiction, and which it established with care and solemnity, and
maintained for so long a period with consistency and
circumspection? I am compelled to reply in the negative.
A corporation is not a citizen. It may be an artificial person,
a moral person, a juridical person, a legal entity, a faculty, an
intangible, invisible being, but Chief Justice Marshall employed no
metaphysical refinement, nor subtlety, nor sophism, but spoke the
common sense, "the universal understanding," as he calls it, of the
people, when he declared the unanimous judgment of this Court,
"that it certainly is not a citizen."
Nor were corporations within the contemplation of the framers of
the Constitution when they delegated a jurisdiction over
controversies between the citizens of different states. The
citation by the Court from the Federalist proves this. It is said
by the writers of that work
"that it may be esteemed as the basis of union that the citizens
of each state shall be entitled to all the immunities and
privileges of citizens of the several states. And if it be a just
principle that every government ought to possess the means of
executing its own provisions, by its own authority, it will follow
that in order to the inviolable maintenance of that equality of
immunities and privileges to which citizens of the Union will be
entitled, the national judiciary ought to preside in all cases in
which one state or its citizens are opposed to another state or its
citizens."
Thus to administer the rights and privileges of citizens of the
different states, held under a constitutional guarantee, when
brought into collision or controversy -- rights and immunities
derived from the constitutional compact, and forming one of its
fundamental conditions -- was the object of this jurisdiction. The
commonplace that it resulted as a concession to the possible fears
and apprehensions of suitors, that justice might not be impartially
administered in state jurisdiction, soothing as it is to the
official sensibilities of the federal courts, furnishes no
satisfactory explanation of it.
Page 57 U. S. 352
Hence the interpretation of that instrument which transferred to
the artificial persons created by state legislation, the rights or
privileges of the corporations, derived from the Constitution of
the United States, as citizens of the Union, and held independently
and without any relation to their rights as corporators -- was, to
say no more, a broad and liberal interpretation. Nor did the Court
in
Deveaux's Case affect the least self-denial or
diffidence in making the bounds of its power. It declared that "the
duties of the Court to exercise a jurisdiction where it is
conferred, and not to usurp it where it is not conferred, are of
equal obligation," and in this spirit rejected a jurisdiction over
a case exactly like the present.
The doctrine of the Court in
Earle's
Case, 13 Pet. 519, and
Runyan's
Case, 14 Pet. 122, to the result that corporations
have no extraterritorial rights, but that the legal exercise of
their faculties, extraterritorially, was the effect of a rule of
comity among the states, dependent upon their policy and
convenience and revocable at their pleasure, was in harmony with
these judgments of the Court and the constitutional principles I
have stated. The administration of the rules of domestic policy
adopted by the several states in reference to these artificial
creatures of a domestic legislation belonged to state jurisdictions
and were ascertainable from its laws and judicial interpretations.
But when, from the later case of
Letson, it was supposed
that these legal entities had a status which admitted them to the
federal tribunals by a constitutional recognition, the inquiry at
once arose, for what purpose was this privilege held? The
interdependence between the sections of the Constitution which
defined the privileges and immunities of citizens of the Union, and
the jurisdiction of the federal courts in controversies between
citizens of the states, was known and felt. It was argued that the
capacity to sue was only a consequent of the right to contract, to
hold property, and to perform civil acts. They commenced,
therefore, an agitation of the state courts for their rights as
"citizens of the Union." The Supreme Court of Kentucky, 12 B.Mon.
212, repelling these pretensions and exposing their perilous
character, thus refers to
Letson's Case, which had been
relied on for their support:
"There are some expressions in that opinion which indicate that
corporations may be regarded as citizens to all intents and
purposes. But in saying this, the court went far beyond the
question before them, and to which it may be assumed that their
attention was particularly directed."
So too, in New Jersey, 3 Zabris. 429, it was argued that the
existence of the extraterritorial rights of corporations "is not
now a question of comity in the United States, but a constitutional
principle incapable of being altered by state legislation."
Page 57 U. S. 353
And opinions from jurists of preeminence in Massachusetts and
New York were laid before the court to sustain the argument founded
upon the relaxing doctrines of this Court.
Thus the introduction of new subjects of doubt, contest, and
contradiction, is the fruit of abandoning the constitutional
landmarks.
Nor can we tell when the mischief will end. It may be safely
assumed that no offering could be made to the wealthy, powerful,
and ambitious corporations of the populous and commercial states of
the Union so valuable, and none which would so serve to enlarge the
influence of those states, as the adoption, to its full import, of
the conclusion,
"that to all intents and purposes, for the objects of their
incorporation, these artificial persons are capable of being
treated as a citizen as much as a natural person."
The Supreme Court of Kentucky says truly,
"The apparent reciprocity of the power would prove to be a
delusion. The competition for extraterritorial advantages would but
aggrandize the stronger to the disparagement of the weaker states.
Resistance and retaliation would lead to conflict and confusion,
and the weaker states must either submit to have their policy
controlled, their business monopolized, their domestic institutions
reduced to insignificance, or the peace and harmony of the states
broken up and destroyed."
To this consummation this judgment of the court is deemed to be
a progress. The word "citizen," in American Constitutions, state
and federal, had a clear, distinct, and recognized meaning,
understood by the common sense, and interpreted accordingly by this
Court through a series of adjudications.
The court has contradicted that interpretation, and applied to
it rules of construction which will undermine every limitation in
the Constitution, if universally adopted. A single instance of the
kind awakens apprehension, for it is regarded as a link in a chain
of repetitions.
The litigation before this Court, during this term, suffices to
disclose the complication, difficulty, and danger of the
controversies that must arise before these anomalous institutions
shall have attained their legitimate place in the body politic.
Their revenues and establishments mock at the frugal and stinted
conditions of state administration; their pretensions and demands
are sovereign, admitting impatiently interference by state
legislative authority. And from the present case we learn that
disdainful of "the careless arbiters" of state interests, they are
ready "to hover about them" in "efficient and vigilant activity,"
to make of them a prey, and, to accomplish this, to employ
corrupting and polluting appliances.
Page 57 U. S. 354
I am not willing to strengthen or to enlarge the connections
between the courts of the United States and these litigants. I can
consent to overturn none of the precedents or principles of this
Court to bring them within their control or influence. I consider
that the maintenance of the Constitution, unimpaired and unaltered,
a greater good than could possibly be effected by the extension of
the jurisdiction of this Court, to embrace any class either of
cases or of persons.
MR. JUSTICE CATRON authorizes me to say that he concurs in the
conclusions of this opinion.
Our opinion is that the judgment of the circuit court should
be
Affirmed 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 District of
Maryland, 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.