Under the Act of March 3, 1887, c. 373, § 1, as corrected by the
Act of August 13, 1888, c. 866, a corporation incorporated in one
state only cannot be compelled to answer, in a circuit court of the
United States held in another state in which it has a usual place
of business, to a civil suit, at law or in equity, brought by a
citizen of a different state.
This was a petition for a writ of mandamus to the judges of the
Circuit Court of the United States for the Southern District of New
York to command them to take jurisdiction against the Quincy Mining
Company upon a bill in equity filed in that court on September 3,
1891, by the petitioner, described in the bill as a citizen of
Massachusetts, in behalf of himself and other stockholders of the
Quincy Mining Company, against
"the Quincy Mining Company, a corporation duly organized under
the laws of the State of Michigan, and having a usual place of
business in the City, County, and State of New York,"
and against certain individuals described in the bill as
citizens of the State of New York. Upon that bill a subpoena was
issued, directed to the Quincy Mining Company, and, as appeared by
the marshal's return thereon, was
Page 145 U. S. 445
served upon it within the Southern District of New York by
exhibiting to its secretary the original subpoena and leaving with
him a copy. The Quincy Mining Company appeared specially, and moved
for an order to set aside the service.
At the hearing of the motion, it appeared that the Quincy Mining
Company was a corporation organized for the purpose of mining in
the County of Houghton in the upper peninsula of the State of
Michigan, under the statute of Michigan of May 11, 1877, c. 113, by
§ 30 of which
"It shall be lawful for any company associating under this act
to provide in the articles of association for having the business
office of such company out of this state, and to hold any meeting
of the stockholders of board of directors of such company at such
office so provided for, but every such company having its business
office out of this state shall have an office for the transaction
of business within this state, to be also designated in such
articles of association,"
and that this company, in its articles of association, did
provide as follows:
"The business office of the company here by constituted and
formed shall be in the City, County, and State of New York, and
another business office is hereby established at the Quincy mine,
in the County of Houghton and State of Michigan."
The order to set aside the service was granted by the court,
upon the ground (as stated in its return to the rule to show cause
why the writ of mandamus should not issue)
"that said Quincy Mining Company is a corporation created and
existing under the law of the State of Michigan, and is an
inhabitant of the Western District of Michigan, and not an
inhabitant of the Southern District of New York. "
Page 145 U. S. 446
MR. JUSTICE GRAY, after stating the case as above, delivered the
opinion of the Court.
The single question in this case is whether, under the Act of
March 3, 1887, c. 373, § 1, as corrected by the Act of August 13,
1888, c. 866, the material parts of which are copied in the margin,
* a corporation
incorporated in one state of the union and having a usual place of
business in another state in which it has not been incorporated,
may be sued in a circuity court of the United States held in the
latter state by a citizen of a different state.
This question, upon which there has been a diversity of opinion
in the circuity courts, can be best determined by a review of the
acts of Congress and of the decisions of this Court regarding the
original jurisdiction of the circuit courts of the United States
over suits between citizens of different states.
In carrying out the provision of the Constitution which declares
that the judicial power of the United States shall extend to
controversies "between citizens of different states,"
Page 145 U. S. 447
Congress, by the Judiciary Act of September 24, 1789, c. 20, §
11, conferred jurisdiction on the circuit court of suits of a civil
nature at common law or in equity, "between a citizen of the state
where the suit is brought and a citizen of another state," and
provided that
"no civil suit shall be brought . . . against an inhabitant of
the United States . . . in any other district than that whereof he
is an inhabitant, or in which he shall be found at the time of
serving the writ."
1 Stat. 78, 79.
The word "inhabitant" in that act was apparently used not in any
larger meaning than "citizen," but to avoid the incongruity of
speaking of a citizen of anything less than a state, when the
intention was to cover not only a district which included a whole
state, but also two districts in one state, like the districts of
Maine and Massachusetts in the State of Massachusetts, and the
districts of Virginia and Kentucky in the State of Virginia,
established by § 2 of the same act. 1 Stat. 73. It was held by this
Court from the beginning that an averment that a party resided
within the state or the district in which the suit was brought was
not sufficient to support the jurisdiction, because in the common
use of words a resident might not be a citizen, and therefore it
was not stated expressly and beyond ambiguity that he was a citizen
of the state, which was the fact on which the jurisdiction depended
under the provisions of the Constitution and of the Judiciary Act.
Bingham v.
Cabbot, 3 Dall. 382;
Turner v.
Bank, 4 Dall. 8;
Abercrombie v. Dupuis, 1
Cranch 343 [omitted];
Hodgson v. Bowerbank, 5 Cranch 303;
Brown v.
Keene, 8 Pet. 112,
33 U. S. 115.
The same rule has been maintained to the present day, and has been
held to be unaffected by the Fourteenth Amendment of the
Constitution, declaring that
"all persons born or naturalized in the United States, and
subject to the jurisdiction thereof, are citizens of the United
States and of the state wherein they reside."
Robertson v. Cease, 97 U. S. 646;
Grace v. American Ins. Co., 109 U.
S. 278;
Timmons v. Elyton Land Co.,
139 U. S. 378;
Denny v. Pironi, 141 U. S. 121.
By the Act of May 4, 1858, c. 27, § 1, it was enacted that, in a
state containing more than one district, actions not local
Page 145 U. S. 448
should "be brought in the district in which the defendant
resides," or, "if there be two or more defendants residing in
different districts in the same state," then in either district. 11
Stat. 272. The whole purport and effect of that act was not to
enlarge, but to restrict and distribute, jurisdiction. It applied
only to a state containing two or more districts, and directed
suits against citizens of such a state to be brought in that
district thereof in which they or either of them resided. It did
not subject defendants to any new liability to be sued out of the
state of which they were citizens, but simply prescribed in which
district of that state they might be sued.
These provisions of the acts of 1789 and 1858 were substantially
reenacted in sections 739 and 740 of the Revised Statutes.
The Act of March 3, 1875, c. 137, § 1, after giving the circuit
courts jurisdiction of suits "in which there shall be a controversy
between citizens of different states" and enlarging their
jurisdiction in other respects, substantially reenacted the
corresponding provision of the act of 1789 by providing that no
civil suit should be brought "against any person . . . in any other
district than that whereof he is an inhabitant or in which he shall
be found" at the time of service, with certain exceptions not
affecting the matter now under consideration. 18 Stat. 470.
The act of 1887, both in its original form and as corrected in
1888, reenacts the rule that no civil suit shall be brought against
any person in any other district than that whereof he is an
inhabitant, but omits the clause allowing a defendant to be sued in
the district where he is found, and adds this clause:
"But where the jurisdiction is founded only on the fact that the
action is between citizens of different states, suit shall be
brought only in the district of the residence of either the
plaintiff or the defendant."
24 Stat. 552; 25 Stat. 434. As has been adjudged by this Court,
the last clause is by way of proviso to the next preceding clause,
which forbids any suit to be brought in any other district than
that whereof the defendant is an inhabitant, and the effect is
that
"where the jurisdiction is founded upon any of the causes
mentioned in this
Page 145 U. S. 449
section except the citizenship of the parties, it must be
brought in the district of which the defendant is an inhabitant;
but where the jurisdiction is founded solely upon the fact that the
parties are citizens of different states, the suit may be brought
in the district in which either the plaintiff or the defendant
resides."
McCormick Co. v. Walthers, 134 U. S.
41,
134 U. S. 43.
And the general object of this act, as appears upon its face and as
has been often declared by this Court, is to contract, not to
enlarge, the jurisdiction of the circuit courts of the United
States.
Smith v. Lyon, 133 U. S. 315,
133 U. S. 320;
In re Pennsylvania Co., 137 U. S. 451,
137 U. S. 454;
Fisk v. Henarie, 142 U. S. 459,
142 U. S.
467.
As to natural persons, therefore, it cannot be doubted that the
effect of this act, read in the light of earlier acts upon the same
subject and of the judicial construction thereof, is that the
phrase "district of the residence of" a person is equivalent to
"district whereof he is an inhabitant," and cannot be construed as
giving jurisdiction by reason of citizenship to a circuit court
held in a state of which neither party is a citizen, but, on the
contrary, restricts the jurisdiction to the district in which one
of the parties resides within the state of which he is a citizen,
and that this act, therefore, having taken away the alternative,
permitted in the earlier acts, of suing a person in the district
"in which he shall be found," requires any suit the jurisdiction of
which is founded only on its being between citizens of different
states to be brought in the state of which one is a citizen and in
the district therein of which he is an inhabitant and resident.
In the case of a corporation, the reasons are, to say the least,
quite as strong for holding that it can sue and be sued only in the
state and district in which it has been incorporated, or in the
state of which the other party is a citizen.
In
Bank v. Earle,
13 Pet. 519,
38 U. S. 588,
Chief Justice Taney said:
"It is very true that a corporation can have no legal existence
out of the boundaries 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 and is no longer obligatory, the
corporation can have no existence.
Page 145 U. S. 450
It must dwell in the place of its creation, and cannot migrate
to another sovereignty. But although it must live and have its
being in that state only, yet it does not by any means follow that
its existence there will not be recognized in other places, and its
residence in one state creates no insuperable objection to its
power of contracting in another."
This statement has been often reaffirmed by this Court, with
some change of phrase but always retaining the idea that the legal
existence, the home, the domicile, the habitat, the residence, the
citizenship of the corporation can only be in the state by which it
was created, although it may do business in other states whose laws
permit it.
In
Lafayette Inc. Co. v.
French, 18 How. 404, in which an Indiana
corporation was sued in Indiana upon a judgment recovered in an
action against it in a state court of Ohio upon a contract made in
that state, this Court, speaking by Mr. Justice Curtis and
referring to
Bank of Augusts v. Earle, said: "This
corporation, existing only by virtue of a law of Indiana, cannot be
deemed to pass personally beyond the limits of that state," and
held that it was bound by the judgment because it had been allowed
by the State of Ohio to make contracts in that state only upon the
reasonable and lawful condition of its agent, residing and making
contracts there, being deemed its agent to receive service of
process in suits upon such contracts, and therefore that such a
judgment, recovered after such a notice, was "as valid as if the
corporation had had its habitat within the state." 18 How.
59 U. S.
407-408.
"A corporation," said Chief Justice Waite,
"created by and organized under the laws of a particular state
and having its principal office there is, under the Constitution
and laws, for the purpose of suing and being sued, a citizen of
that state. . . . By doing business away from their legal
residence, they do not change their citizenship, but simply extend
the field of their operations. They reside at home, but do business
abroad."
Railroad Co. v. Koontz, 104 U. S.
5.
See also Paul v.
Virginia, 8 Wall. 168,
75 U. S. 181;
Railroad Co. v.
Harris, 12 Wall. 65,
79 U. S. 81;
St. Clair v. Cox, 106 U. S. 350,
106 U. S.
354-356;
Canadian Southern Railway v. Gebhard,
109 U. S. 527,
109 U. S.
537.
Page 145 U. S. 451
The same doctrine has been constantly maintained by this Court
in applying to corporations the Judiciary Acts conferring on the
circuit courts of the United States jurisdiction of suits between
citizens of different state.
Those acts have never named corporations, and for half a century
after the passage of the first act, corporations were allowed to
sue and be sued in the circuit courts only when all the members of
the corporation were, and were alleged to be, citizens of the state
which created the corporation.
Bank of United States v.
Deveaux, 5 Cranch 61;
Hope Ins.
Co. v. Boardman, 5 Cranch 57;
Sullivan
v. Fulton Steamboat Co., 6 Wheat. 450;
Breithaupt v. Bank of
Georgia, 1 Pet. 238;
Commercial
Bank v. Slocomb, 14 Pet. 60.
But in
Railroad Co. v. Letson, in 1844, it was
adjudged, upon great consideration that it is sufficient to sustain
the jurisdiction that the corporation is created by a different
state from that of which the opposite party is a citizen, and Mr.
Justice Wayne stated that the Court rested its judgment upon the
ground
"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,"
and
"is substantially, within the meaning of the law, a citizen of
the state which created it and where its business is done for all
the purposes of suing and being sued."
43 U. S. 2 How.
497,
43 U. S. 558.
And it has ever since been treated as settled that for these
purposes, the members of a corporate body must be conclusively
presumed to be citizens of the state in which the corporation is
domiciled.
Marshall v. Baltimore &
Ohio Railroad Company, 16 How. 314,
57 U. S. 328;
Covington Drawbridge Co. v.
Shepherd, 20 How. 227,
61 U. S. 233;
Ohio & Mississippi
Railroad v. Wheeler, 1 Black 286,
66 U. S. 296;
Muller v. Dows, 94 U. S. 444;
Steamship Co. v. Tugman, 106 U. S. 118,
106 U. S. 121;
Memphis & St. Charles Railroad v. Alabama,
107 U. S. 581,
107 U. S.
585.
In
Insurance Co. v. Francis, it was held that the Act
of March 2, 1867, c.196, 14 Stat. 558; Rev.Stat. § 639, cl. 3,
Page 145 U. S. 452
authorizing the removal into the courts of the United States of
suits "between a citizen of the state in which the suit is brought
and a citizen of another state," did not warrant the removal of an
action brought in a court of the State of Mississippi in which the
plaintiff, a citizen of Illinois, alleged that the defendant was a
corporation created by the laws of New York, located and doing
business in Mississippi under its laws, and Mr. Justice Davis, in
delivering judgment, said:
"This, in legal effect, is an averment that the defendant was a
citizen of New York, because a corporation can have no legal
existence outside of the sovereignty by which it was created. Its
place of residence is there, and can be nowhere else. Unlike a
natural person, it cannot change its domicile at will, and although
it may be permitted to transact business where its charter does not
operate, it cannot on that account acquire a residence there."
78 U. S. 11 Wall.
210,
78 U. S.
216.
In
Ex Parte Schollenberger, 96 U. S.
369,
96 U. S. 377,
Chief Justice Waite said:
"A corporation cannot change its residence of its citizenship.
It can have its legal home only at the place where it is located by
or under the authority of its charter, but it may by its agents
transact business anywhere, unless prohibited by its charter or
excluded by local laws."
The jurisdiction of the circuit court in that case, as well as
in
New England Ins. Co. v. Woodworth, 111 U.
S. 138,
111 U. S. 146,
was maintained upon the ground that the defendant corporation,
though incorporated in another state, yet, by reason of doing
business in the state in which the suit was brought and having
appointed an agent there as required by its laws, upon whom process
against the company might be served, was found in that state within
the meaning of the Act of March 3, 1875, c. 137, § 1, then in force
and hereinbefore cited.
The statute now in question, as already observed, has repealed
the permission to sue a defendant in a district in which he is
found, and has peremptorily enacted that
"where the jurisdiction is founded only on the fact that the
action is between citizens of different states, suit shall be
brought only in the district of the residence of either the
plaintiff or the defendant."
In a case between natural persons, as has been
Page 145 U. S. 453
seen, this clause does not allow the suit to be brought in a
state of which neither is a citizen. If Congress, in framing this
clause, did not have corporations in mind, there is no reason for
giving the clause a looser and broader construction as to
artificial persons who were not contemplated than as to natural
persons who were. If, as it is more reasonable to suppose, Congress
did have corporations in mind, it must be presumed also to have had
in mind the law, as long and uniformly declared by this Court, that
within the meaning of the previous acts of Congress giving
jurisdiction of suits between citizens of different states, a
corporation could not be considered a citizen or a resident of a
state in which it had not been incorporated.
The Quincy Mining Company, a corporation of Michigan, having
appeared specially for the purpose of taking the objection that it
could not be sued in the Southern District of New York by a citizen
of another state, there can be no question of waiver, such as has
been recognized where a defendant has appeared generally in a suit
between citizens of different states brought in the wrong district.
Gracie v.
Palmer, 8 Wheat. 699;
St. Louis & San
Francisco Railway v. McBride, 141 U.
S. 127,
141 U. S. 131,
and cases cited.
This case does not present the question what may be the rule in
suits against an alien or a foreign corporation, which may be
governed by different considerations. Nor does it affect cases in
admiralty, for those have been adjudged not to be within the scope
of the statute.
In re Louisville Underwriters,
134 U. S. 488.
All that is now decided is that under the existing act of
Congress, a corporation, incorporated in one state only, cannot be
compelled to answer, in a circuit court of the United States held
in another state in which it has a usual place of business, to a
civil suit at law or in equity brought by a citizen of a different
state.
Writ of mandamus denied.
MR. JUSTICE HARLAN dissented.
*
"The circuit courts of the United States shall have original
cognizance, concurrent with the courts of the several states, of
all suits of a civil nature at common law or in equity where the
matter in dispute exceeds, exclusive of interest and costs, the sum
or value of two thousand dollars, and arising under the
Constitution or laws of the United States, or treaties made, or
which shall be made, under their authority, or in which controversy
the United States are plaintiffs or petitioners, or in which there
shall be a controversy between citizens of different states, in
which the matter in dispute exceeds, exclusive of interest and
costs, the sum or value aforesaid, or a controversy between
citizens of the same state claiming lands under grants of different
states, or a controversy between citizens of a state and foreign
states, citizens or subjects, in which the matter in dispute
exceeds, exclusive of interest and costs, the sum or value
aforesaid. . . . But no person shall be arrested in one district
for trial in another in any civil action before a circuit or
district court, and no civil suit shall be brought before either of
said courts against any person by any original process or
proceeding in any other district than that whereof he is an
inhabitant; but where the jurisdiction is founded only on the fact
that the action is between citizens of different states, suit shall
be brought only in the district of the residence of either the
plaintiff or the defendant."
25 Stat. 434.