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, and doing business in another state, is not thereby
liable to be sued in a circuit court of the United States held in
the latter state.
The want of the requisite citizenship of parties to give
jurisdiction to a circuit court of the United States, when apparent
on the face of the petition, may be taken advantage of by
demurrer.
An objection to the jurisdiction of a circuit court of the
United States for want of the requisite citizenship of the parties
is not waived by filing a demurrer for the special and single
purpose of objecting to the jurisdiction or by answering to the
merits upon that demurrer being overruled.
The right of a corporation, sued in a circuit court of the
United States, to contest its jurisdiction for want of the
requisite citizenship of the parties is not affected by a statute
of the state in which the court is held, requiring a foreign
corporation, before doing business in the state, to file with the
secretary of state a copy of its charter, with a resolution
authorizing service of process to he made on any officer or agent
engaged in its business within the state and agreeing to be subject
to all the provisions of the statute, one of which is that the
corporation shall not remove any suit from a court of the state
into the circuit court of the United States, nor by doing business
and appointing an agent within the state under that statute.
A statute of a state which makes an appearance in behalf of a
defendant, although in terms limited to the purpose of objecting to
the jurisdiction of the court, a waiver of immunity from
jurisdiction by reason of nonresidence is not applicable to actions
in a circuit court of the United States held within the state under
Rev.Stat. § 914.
Motion to dismiss or to affirm. The case is stated in the
opinion.
Page 146 U. S. 203
MR. JUSTICE GRAY delivered the opinion of the court.
This was an action brought January 29, 1889, in the Circuit
Court of the United States for the Western District of Texas,
against the Southern Pacific Company by Elizabeth Jane Denton to
recover damages to the amount of $4,970 for the death of her son by
the defendant's negligence near Paisano, in the County of Presidio,
on January 31, 1888. The petition alleged that
"the plaintiff is a citizen of the State of Texas, and resides
in the County of Red River in said state; that the defendant is a
corporation duly incorporated under the laws of the State of
Kentucky, is a citizen of the State of Kentucky, and is and at the
institution of this suit was a resident of El Paso County in the
State of Texas;"
that at the day aforesaid and ever since,
"the defendant was and is engaged in the business of running and
propelling cars for the conveyance of freight and passengers over
the line of railway extending eastwardly from the City of El Paso,
Texas, into and through the Counties of El Paso and Presidio and
the City of San Antonio, all of the State of Texas; that the
defendant is now doing business as aforesaid, and has an agent for
the transaction of its business in the City and County of El Paso,
Texas, to-wit, W. E. Jessup."
The County of Red River is in the Eastern District, and the
Counties of El Paso and Presidio, as well as the County of Bexar,
in which is the City of San Antonio, are in the Western District,
of Texas. Act of February 24, 1879, c. 97, §§ 2, 3, 20 Stat.
318.
The defendant, by leave of court, filed "an answer or demurrer,"
"for the special purpose, and no other, until the question herein
raised is decided, of objecting to the jurisdiction of this Court,"
demurring and excepting to the petition because, upon the
allegations above quoted,
"it appears that this suit ought, if maintained at all in the
State of Texas, to be brought in the district of the residence of
the plaintiff -- that is to say in the Eastern District of Texas,
and the defendant prays judgment whether this Court has
jurisdiction, and it asks to be dismissed, with its costs; but
should the court overrule this demurrer and exception, the
defendant then asks time
Page 146 U. S. 204
and leave to answer to the merits, though excepting to the
action of the court in overruling said demurrer."
The court overruled the demurrer and allowed a bill of
exceptions tendered by the defendant which stated that the
defendant by the demurrer raised the question of the jurisdiction
of the court,
"and that the court having inspected the same, as well as the
pleadings of the plaintiff, and it appearing therefrom that the
plaintiff is alleged to be a citizen of Texas, residing in Red
River County in the Eastern Judicial District of said state, and
that the defendant is a corporation created and existing under and
by virtue of the laws of Kentucky, and is a citizen of that state,
but operating a line of railway, doing business in, and having an
agent on whom process may be served in, the county and judicial
district in which this suit is pending, and the court, being of
opinion that the facts alleged show this cause to be in the
district of the residence of the defendant, and that it ought to
take cognizance of the same, overruled said demurrer."
The defendant, after its demurrer had been overruled, answered
to the merits, and a trial by jury was had, resulting in a verdict
and judgment for the plaintiff in the sum of $4,515. The defendant,
on May 10, 1890, sued out this writ of error on the question of
jurisdiction only, under the Act of February 25, 1889, c. 236, 25
Stat. 693. The plaintiff has now moved to dismiss the writ of error
or to affirm the judgment, and the motion has been submitted on
briefs under Rules 6 and 32 of this Court.
By the Act of March 3, 1887, c. 373, § 1, as corrected by the
Act of August 13, 1888, c. 886,
"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."
24 Stat. 552; 25 Stat. 434.
Page 146 U. S. 205
This is a case "where the jurisdiction is founded only on the
fact that the action is between citizens of different states." The
question whether under that act the Circuit Court of the United
States for the Western District of Texas had jurisdiction of the
case is a question involving the jurisdiction of that court, which
this Court is empowered, by the act of February 25, 1889, c. 236,
to review by writ of error, although the judgment below was for
less than $5,000.
The allegations made in the petition and admitted by the
demurrer bearing upon this question are that the plaintiff was a
citizen of Texas, and resided in the Eastern District thereof, and
that the defendant was a corporation incorporated by the law of
Kentucky and a citizen of that state, and was a resident of the
Western District of Texas, doing business and having an agent in
this district. The necessary legal effect of these allegations is
that the defendant was a corporation and a citizen of Kentucky
only, doing business in the Western District of Texas, and
consequently could not be compelled to answer to an action at law
in a circuit court of the United States except either in the State
of Kentucky, in which it was incorporated, or in the Eastern
District of Texas, in which the plaintiff, a citizen of Texas,
resided. It has long been settled that an allegation that a party
is a "resident" does not show that he is a "citizen," within the
meaning of the Judiciary Acts, and to hold otherwise in this case
would be to construe the petition as alleging that the defendant
was a citizen of the same state with the plaintiff, and thus
utterly defeat the jurisdiction. The case is governed by the
decision of this Court at the last term by which it was adjudged
that the act of 1887, having taken away the alternative, permitted
in the earlier acts, of suing a person in the district "in which he
shall be found," requires an action at law, the jurisdiction of
which is founded only upon 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,
and that a corporation cannot, for this purpose, be considered a
citizen or a resident of a state in which it has not been
incorporated.
Shaw v. Quincy Mining Co., 145 U.
S. 444,
145 U. S. 449,
145 U. S.
453.
Page 146 U. S. 206
It may be assumed that the exemption from being sued in any
other district might be waived by the corporation by appearing
generally or by answering to the merits of the action without first
objecting to the jurisdiction.
St. Louis & San Francisco
Railway v. McBride, 141 U. S. 127;
Texas & Pacific Railway v. Cox, 145 U.
S. 593.
But in the present case, there was no such waiver. The want of
jurisdiction, being apparent on the face of the petition, might be
taken advantage of by demurrer, and no plea in abatement was
necessary.
Coal Co. v.
Blatchford, 11 Wall. 172. The defendant did file a
demurrer, for the special and single purpose of objecting to the
jurisdiction, and it was only after that demurrer had been
overruled, and the defendant had excepted to the overruling thereof
that an answer to the merits was filed. Neither the special
appearance for the purpose of objecting to the jurisdiction nor the
answer to the merits after that objection had been overruled was a
waiver of the objection. The case is within the principle of
Harkness v. Hyde, in which MR. JUSTICE FIELD, speaking for
this Court, said:
"Illegality in a proceeding by which jurisdiction is to be
obtained is in no case waived by the appearance of the defendant
for the purpose of calling the attention of the court to such
irregularity, nor is the objection waived when, being urged, it is
overruled and the defendant is thereby compelled to answer. He is
not considered as abandoning his objection because he does not
submit to further proceedings without contestation. It is only
where he pleads to the merits in the first instance without
insisting upon the illegality that the objection is deemed to be
waived."
98 U. S. 98 U.S.
476,
98 U. S. 479. The
case at bar is not affected by either of the statutes of Texas on
which the counsel for the defendant in error relies.
He contends that the plaintiff in error had consented to be sued
in the Western District of Texas by doing business and appointing
an agent there under the statute of Texas of 1887, c. 128,
requiring a foreign corporation, desiring to transact business in
the state,
"to file with the Secretary of State a certified copy of its
articles of incorporation, duly attested, accompanied by a
resolution of its board of directors or stockholders,
Page 146 U. S. 207
authorizing the filing thereof, and also authorizing service of
process to be made upon any of its officers or agents in this state
engaged in transacting its business, and requesting the issuance to
such corporation of a permit to transact business in this state,
said application to contain a stipulation that said permit shall be
subject to each of the provisions of this act,"
one of which was that any foreign corporation sued in a court of
the state, which should remove the case into a court of the United
States held within the state,
"for the cause that such corporation is a nonresident of this
state or a resident of another state from that of the adverse
party, or of local prejudice against such corporation, shall
thereupon forfeit and render null and void any permit issued or
granted to such corporation to transact business in this
state."
General Laws of Texas of 1887, pp. 116, 117.
But that statute requiring the corporation, as a condition
precedent to obtaining a permit to do business within the state, to
surrender a right and privilege secured to it by the Constitution
and laws of the United States, was unconstitutional and void, and
could give no validity or effect to any agreement or action of the
corporation in obedience to its provisions.
Insurance
Co. v. Morse, 20 Wall. 445;
Barron v.
Burnside, 121 U. S. 186;
Texas Land Co. v. Worsham, 76 Tex. 556. Moreover, the
supposed agreement of the corporation went no further than to
stipulate that process might be served on any officer or agent
engaged in its business within the state. It did not undertake to
declare the corporation to be a citizen of the state, nor (except
by the vain attempt to prevent removals into the national courts)
to alter the jurisdiction of any court as defined by law. The
agreement, if valid, might subject the corporation, after due
service on its agent, to the jurisdiction of any appropriate court
of the state.
Lafayette Ins. Co. v.
French, 18 How. 404. It might likewise have
subjected the corporation to the jurisdiction of a circuit court of
the United States held within the state, so long as the Judiciary
Acts of the United States allowed it to be sued in the district in
which it was found.
Ex Parte Schollenberger, 96 U. S.
369;
New England Ins. Co.
v.
Page 146 U. S. 208
Woodworth, 111 U. S. 138;
In re Louisville Underwriters, 134 U.
S. 488. But such an agreement could not, since Congress
(as held in
Shaw v. Quincy Mining Co., above cited) has
made citizenship of the state, with residence in the district, the
sole test of jurisdiction in this class of cases, estop the
corporation to set up noncompliance with that test when sued in a
circuit court of the United States.
It is further contended on behalf of the defendant in error that
the case is controlled by those provisions of the statutes of Texas
which make an appearance in behalf of a defendant, although in
terms limited to the purpose of objecting to the jurisdiction of
the court, a waiver of immunity from the jurisdiction by reason of
nonresidence, and which have been held by this Court not to violate
the Fourteenth Amendment of the Constitution of the United States,
forbidding any state to deprive any person of life, liberty, or
property without due process of law. Rev.Stats. of Texas of 1897,
arts. 1241-1244;
York v. State, 73 Tex. 651;
s.c. nom.
York v. Texas, 137 U. S. 15;
Kauffman v. Wootters, 138 U. S. 285;
St. Louis &c. Railway v. Whitley, 77 Tex. 126;
Aetna Ins. Co. v. Hanna, 81 Tex. 487.
But the question in this case is not of the validity of those
provisions as applied to actions in the courts of the state, but
whether they can be held applicable to actions in the courts of the
United States. This depends on the true construction of the act of
Congress, by which
"the practice, pleadings, and forms and modes of proceeding in
civil causes, other than equity and admiralty causes, in the
circuit and district courts, shall conform, as near as may be, to
the practice, pleadings, and forms and modes of proceeding existing
at the time in like causes in the courts of record of the state
within which such circuit or district courts are held."
Rev.Stat. § 914; Act June 1, 1872, c. 255, § 5; 17 Stat.
197.
In one of the earliest cases that arose under this act, this
Court said:
"The conformity is required to be 'as near as may be' -- not as
near as may be possible, or as near as may be practicable. This
indefiniteness may have been suggested by a purpose: it devolved
upon the judges to be affected the
Page 146 U. S. 209
duty of construing and deciding, and gave them the power to
reject, as Congress doubtless expected they would do, any
subordinate provision in such state statutes which, in their
judgment, would unwisely encumber the administration of the law, or
tend to defeat the ends of justice, in their tribunals."
Indianapolis & St. Louis Railroad v. Horst,
93 U. S. 291,
93 U. S.
300-301.
Under this act, the circuit courts of the United States follow
the practice of the courts of the state in regard to the form and
order of pleading, including the manner in which objections may be
taken to the jurisdiction and the question whether objections to
the jurisdiction and defenses on the merits shall be pleaded
successively or together.
Delaware County v. Diebold Safe
Co., 133 U. S. 473,
133 U. S. 488;
Roberts v. Lewis, 144 U. S. 653. But
the jurisdiction of the circuit courts of the United States has
been defined and limited by the acts of Congress, and can be
neither restricted nor enlarged by the statutes of a state.
Toland v.
Sprague, 12 Pet. 300,
37 U. S. 328;
Cowles v. Mercer
County, 7 Wall. 118;
Railway
Co. v. Whitton, 13 Wall. 270,
80 U. S. 286;
Phelps v. Oaks, 117 U. S. 236,
117 U. S. 239.
And whenever Congress has legislated upon any matter of practice,
and prescribed a definite rule for the government of its own
courts, it is to that extent exclusive of the legislation of the
state upon the same matter.
Ex Parte Fisk, 113 U.
S. 713,
113 U. S. 721;
Whitford v. Clark County, 119 U.
S. 522.
The acts of Congress prescribing in what districts suits between
citizens or corporations of different states shall be brought
manifest the intention of Congress that such suits shall be brought
and tried in such a district only, and that no person or
corporation shall be compelled to answer to such a suit in any
other district. Congress cannot have intended that it should be
within the power of a state by its statutes to prevent a defendant,
sued in a circuit court of the United States in a district in which
Congress has said that he shall not be compelled to answer, from
obtaining a determination of that matter by that court in the first
instance and by this Court on writ of error. To conform to such
statutes of a state would "unwisely encumber the administration of
the
Page 146 U. S. 210
law," as well as "tend to defeat the ends of justice," in the
national tribunals. The necessary conclusion is that the provisions
referred to in the practice act of the State of Texas have no
application to actions in the courts of the United States.
Judgment reversed, and case remanded, with directions to
render judgment for the defendant upon the demurrer to the
petition.