A corporation aggregate composed of citizens of one state may
sue a citizen of another state in the circuit court of the United
States.
Where the jurisdiction of the courts of the United States
depends not on the character of the parties, but upon the nature of
the case, the circuit courts derive no jurisdiction from the
Judiciary Act except in case of a controversy between citizens of
the same state claiming lands under grants from different
states.
No right is conferred on the bank by its act of incorporation to
sue in the federal courts. A corporation aggregate cannot, in its
corporate capacity, be a citizen.
The duties of this Court to exercise jurisdiction where it is
conferred and not to usurp it where it is not conferred are of
equal obligation. The Constitution therefore and the law are to be
expounded without a leaning the one way or the other, according to
those general principles which usually govern in the construction
of fundamental or other laws.
A constitution, from its nature, deals in generals, not in
detail. Its framers cannot perceive minute distinctions which arise
in the progress of the nation, and therefore confine it to the
establishment of broad and general principles.
The Judicial Department was introduced into the American
Constitution under impressions and with views which are too
apparent not to be perceived by all. However true the fact may be
that the tribunals of the states will administer justice as
impartially as those of the nation to parties of every description,
it is not less true that the Constitution itself either entertains
apprehensions on this subject or views with such indulgence the
possible fears and apprehensions of suitors that it has established
national tribunals for the decision of controversies between aliens
and a citizen or between citizens of different states.
The declaration, or petition, as it is there called, was as
follows:
"
District of Georgia"
"To the Honorable the Judges of the Sixth Circuit
Page 9 U. S. 62
Court of the United States in and for the District
aforesaid."
"The petition of The President, Directors and Company of the
Bank of the United States, which said bank was established under an
act of Congress entitled 'An act to incorporate the subscribers to
the Bank of the United States,' passed 25 February, 1791,
showeth,"
"That Peter Deveaux and Thomas Robertson, both of the City of
Savannah, Esquires, have endamaged your petitioners in the sum of
three thousand dollars for this, to-wit, that the said Thomas
Robertson, then acting under authority from the said Peter Deveaux,
on 20 April, 1807, at Savannah, in the district aforesaid and
within the jurisdiction of this honorable court, with force and
arms entered into the house and premises of your petitioners at
Savannah aforesaid and then and there seized, took, and detained
two boxes (the goods and chattels of your petitioners) containing
each one thousand dollars in silver, then and there found in the
possession of your petitioners, and being of the value of two
thousand and four dollars, and carried the same away, and converted
and disposed thereof to their own use, and other wrongs to your
petitioners then and there did against the peace of the district
and to the great damage of your petitioners, therefore your
petitioners say they are injured and have sustained damage to the
value of three thousand dollars, and therefore they bring suit. And
your petitioners aver that they are citizens of the State of
Pennsylvania, and the said Peter Deveaux and Thomas Robertson are
citizens of the State of Georgia. Wherefore your petitioners pray
process, &c."
"And the said Peter and Thomas, by R.L., their attorney, come
and defend the force and injury, when, &c., and pray judgment
of the declaration aforesaid, because they say that the Sixth
Circuit Court of the United States ought not to have and
Page 9 U. S. 63
entertain jurisdiction of the said declaration and the matters
therein contained, for that the said president, directors, and
company of the bank of the United States aver themselves to be a
body politic and corporate, and that in that capacity these
defendants say they cannot sue or be sued, plead, or be impleaded
in this honorable court by anything contained in the Constitution
or laws of the same United States, and this they are ready to
verify; wherefore, for want of jurisdiction in this behalf, they
pray judgment, and their costs, &c."
To this plea there was a demurrer and joinder, and judgment in
favor of the defendants upon the demurrer.
Page 9 U. S. 84
MR. CHIEF JUSTICE MARSHALL delivered the opinion of the Court as
follows:
Two points have been made in this cause.
1. That a corporation composed of citizens of
Page 9 U. S. 85
one state may sue a citizen of another state in the federal
courts.
2. That a right to sue in those courts is conferred on this bank
by the law which incorporates it.
The last point will be first considered.
The judicial power of the United States, as defined in the
Constitution, is dependent 1st on the nature of the case, and 2d on
the character of the parties.
By the Judicial Act, the jurisdiction of the circuit courts is
extended to cases where the constitutional right to plead and be
impleaded in the courts of the union depends on the character of
the parties; but where that right depends on the nature of the
case, the circuit courts derive no jurisdiction from that act
except in the single case of a controversy between citizens of the
same state claiming lands under grants from different states.
Unless, then, jurisdiction over this cause has been given to the
circuit court by some other than the Judicial Act, the Bank of the
United States had not a right to sue in that court upon the
principle that the case arises under a law of the United
States.
The plaintiffs contend that the incorporating act confers this
jurisdiction.
That act creates the corporation, gives it a capacity to make
contracts and to acquire property, and enables it "to sue and be
sued, plead and be impleaded, answer and be answered, defend and be
defended, in courts of record or any other place whatsoever."
This power, if not incident to a corporation, is conferred by
every incorporating act, and is not understood to enlarge the
jurisdiction of any particular court, but to give a capacity to the
corporation to
Page 9 U. S. 86
appear as a corporation in any court which would by law have
cognizance of the cause if brought by individuals. If jurisdiction
is given by this clause to the federal courts, it is equally given
to all courts having original jurisdiction and for all sums,
however small they may be.
But the 9th article of the 7th section of the act furnishes a
conclusive argument against the construction for which the
plaintiffs contend. That section subjects the president and
directors, in their individual capacity, to the suit of any person
aggrieved by their putting into circulation more notes than is
permitted by law, and expressly authorizes the bringing of that
action in the federal or state courts.
This evinces the opinion of Congress that the right to sue does
not imply a right to sue in the courts of the union unless it be
expressed. This idea is strengthened also by the law respecting
patent rights. That law expressly recognizes the right of the
patentee to sue in the circuit courts of the United States.
The Court, then, is of opinion that no right is conferred on the
bank by the act of incorporation to sue in the federal courts.
2. The other point is one of much more difficulty.
The jurisdiction of this Court being limited, so far as respects
the character of the parties in this particular case, "to
controversies between citizens of different states," both parties
must be citizens to come within the description.
That invisible, intangible, and artificial being, that mere
legal entity, a corporation aggregate, is certainly not a citizen,
and consequently cannot sue or be sued in the courts of the United
States unless the rights of the members in this respect can be
exercised in their corporate name. If the corporation
Page 9 U. S. 87
be considered as a mere faculty, and not as a company of
individuals who, in transacting their joint concerns, may use a
legal name, they must be excluded from the courts of the union.
The duties of this Court to exercise jurisdiction where it is
conferred and not to usurp it where it is not conferred are of
equal obligation. The Constitution, therefore, and the law are to
be expounded without a leaning the one way or the other, according
to those general principles which usually govern in the
construction of fundamental or other laws.
A Constitution, from its nature, deals in generals, not in
detail. Its framers cannot perceive minute distinctions which arise
in the progress of the nation, and therefore confine it to the
establishment of broad and general principles.
The Judicial Department was introduced into the American
Constitution under impressions and with views which are too
apparent not to be perceived by all. However true the fact may be
that the tribunals of the states will administer justice as
impartially as those of the nation to parties of every description,
it is not less true that the Constitution itself either entertains
apprehensions on this subject or views with such indulgence the
possible fears and apprehensions of suitors that it has established
national tribunals for the decision of controversies between aliens
and a citizen or between citizens of different states. Aliens or
citizens of different states are not less susceptible of these
apprehensions, nor can they be supposed to be less the objects of
constitutional provision, because they are allowed to sue by a
corporate name. That name, indeed, cannot be an alien or a citizen,
but the persons whom it represents may be the one or the other, and
the controversy is, in fact and in law, between those persons suing
in their corporate character, by their corporate name, for a
corporate right, and the individual against whom the suit may be
instituted. Substantially
Page 9 U. S. 88
and essentially, the parties in such a case, where the members
of the corporation are aliens or citizens of a different state from
the opposite party, come within the spirit and terms of the
jurisdiction conferred by the Constitution of the national
tribunals.
Such has been the universal understanding on the subject.
Repeatedly has this Court decided causes between a corporation and
an individual without feeling a doubt respecting its jurisdiction.
Those decisions are not cited as authority, for they were made
without considering this particular point; but they have much
weight, as they show that this point neither occurred to the bar or
the bench, and that the common understanding of intelligent men is
in favor of the right of incorporated aliens, or citizens of a
different state from the defendant, to sue in the national courts.
It is by a course of acute, metaphysical, and abstruse reasoning,
which has been most ably employed on this occasion, that this
opinion is shaken.
As our ideas of a corporation, its privileges, and its
disabilities, are derived entirely from the English books, we
resort to them for aid in ascertaining its character. It is defined
as a mere creature of the law, invisible, intangible, and
incorporeal. Yet when we examine the subject further we find that
corporations have been included within terms of description
appropriated to real persons.
The statute of Henry VIII concerning bridges and highways enacts
that bridges and highways shall be made and repaired by the
"inhabitants of the city, shire, or riding," and that the justices
shall have power to tax every "inhabitant of such city," &c.,
and that the collectors may "distrain every such inhabitant as
shall be taxed and refuse payment thereof, in his lands, goods and
chattels."
Under this statute, those have been construed inhabitants who
hold lands within the city where the
Page 9 U. S. 89
bridge to be repaired lies, although they reside elsewhere.
Lord Coke says
"Every corporation and body politic residing in any county,
riding, city, or town corporate or having lands or tenements in any
shire,
quae propriis manibus et sumptibus possident et
habent, are said to be inhabitants there within the purview of
this statute."
The tax is not imposed on the person, whether he be a member of
the corporation or not, who may happen to reside on the lands, but
is imposed on the corporation itself, and consequently this ideal
existence is considered as an inhabitant when the general spirit
and purpose of the law requires it.
In the case of
King v. Gardner, reported by Cowper, a
corporation was decided, by the Court of King's bench, to come
within the description of "occupiers or inhabitants." In that case,
the poor rates, to which the lands of the corporation were declared
to be liable, were not assessed to the actual occupant, for there
was none, but to the corporation. And the principle established by
the case appears to be that the poor rates on vacant ground
belonging to a corporation may be assessed to the corporation as
being inhabitants or occupiers of that ground. In this case Lord
Mansfield notices and overrules an inconsiderate
dictum of
Justice Yates that a corporation could not be an inhabitant or
occupier.
These opinions are not precisely in point, but they serve to
show that for the general purposes and objects of a law, this
invisible, incorporeal creature of the law may be considered as
having corporeal qualities.
It is true that as far as these cases go, they serve to show
that the corporation itself, in its incorporeal character, may be
considered as an inhabitant or an occupier, and the argument from
them would be more strong in favor of considering the
corporation
Page 9 U. S. 90
itself as endowed for this special purpose with the character of
a citizen, then to consider the character of the individuals who
compose it as a subject which the court can inspect, when they use
the name of the corporation for the purpose of asserting their
corporate rights. Still the cases show that this technical
definition of a corporation does not uniformly circumscribe its
capacities, but that courts for legitimate purposes will
contemplate it more substantially.
There is a case, however, reported in 12 Mod., which is thought
precisely in point. The Corporation of London brought a suit
against Wood by its corporate name in the mayor's court. The suit
was brought by the mayor and commonalty, and was tried before the
mayor and aldermen. The judgment rendered in this cause was brought
before the Court of King's bench and reversed because the court was
deprived of its jurisdiction by the character of the individuals
who were members of the corporation.
In that case, the objection, that a corporation was an
invisible, intangible thing, a mere incorporeal legal entity in
which the characters of the individuals who composed it were
completely merged, was urged and was considered. The judges
unanimously declared that they could look beyond the corporate name
and notice the character of the individual. In the opinions, which
were delivered
seriatim, several cases are put which serve
to illustrate the principle, and fortify the decision.
The case of
Mayor and Commonalty v. Wood is the
stronger, because it is on the point of jurisdiction. It appears to
the Court to be a full authority for the case now under
consideration. It seems not possible to distinguish them from each
other.
If, then, the Congress of the United States had in terms enacted
that incorporated aliens might sue
Page 9 U. S. 91
a citizen or that the incorporated citizens of one state might
sue a citizen of another state in the federal courts by its
corporate name, this Court would not have felt itself justified in
declaring that such a law transcended the Constitution.
The controversy is substantially between aliens, suing by a
corporate name, and a citizen, or between citizens of one state,
suing by a corporate name, and those of another state. When these
are said to be substantially the parties to the controversy, the
Court does not mean to liken it to the case of a trustee. A trustee
is a real person capable of being a citizen or an alien, who has
the whole legal estate in himself. At law, he is the real
proprietor, and he represents himself and sues in his own right.
But in this case the corporate name represents persons who are
members of the corporation.
If the Constitution would authorize Congress to give the courts
of the union jurisdiction in this case in consequence of the
character of the members of the corporation, then the Judicial Act
ought to be construed to give it. For the term "citizen" ought to
be understood as it is used in the Constitution and as it is used
in other laws -- that is, to describe the real persons who come
into court, in this case under their corporate name.
That corporations composed of citizens are considered by the
legislature as citizens under certain circumstances is to be
strongly inferred from the registering act. It never could be
intended that an American registered vessel, abandoned to an
insurance company composed of citizens should lose her character as
an American vessel, and yet this would be the consequence of
declaring that the members of the corporation were, to every intent
and purpose, out of view and merged in the corporation.
The Court feels itself authorized by the case in 12 Mod. on a
question of jurisdiction, to look to
Page 9 U. S. 92
the character of the individuals who compose the corporation,
and it thinks that the precedents of this Court, though they were
not decisions on argument, ought not to be absolutely
disregarded.
If a corporation may sue in the courts of the union, the Court
is of opinion that the averment in this case is sufficient.
Being authorized to sue in it corporate name, it could make the
averment, and it must apply to the plaintiffs as individuals,
because it could not be true as applied to the corporation.
Judgment reversed, plea in abatement overruled, and cause
remanded.
Judge LIVINGSTON, having an interest in the question, gave no
opinion.