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unless the act of the legislature made them so, but were mere agencies of the principal corporation. Upon any contract made with the corporation through such a branch, the action was against the principal bank, that is to say, against the corporation itself, and not against the branch bank, which was the mere agent.1

§ 7440. Actions in the County in Which the Agent with Whom the Contract was Made Resides. Some of the States have, in their legislation, adopted the principle that an action may be brought against a corporation in the county in which the agent resides, with whom the contract, which is the subject of the action, was made; and under statutes of Kentucky, an action may be so brought, although the plaintiff resides in another county.

ARTICLE II. FEDERAL JURISDICTION AS DEPENDENT UPON DIVERSE CITIZENSHIP.

SECTION

7447. Early doctrine that a corporation was not a "citizen," under Federal Constitution and Judiciary Act.

7448. New doctrine that a corporation is a "citizen" of the State creating it, for the purposes of Federal jurisdiction.

7449. Conclusively presumed to be a citizen of the State creating it. 7450. Effect of this rule on domestic corporations.

7451. Further of this rule.

7452. Rule where the corporation is

SECTION

created by the concurrent legislation of two States.

7453. All the substantial parties must be of diverse citizenship. 7454. Application of this rule of jurisdiction to joint-stock companies.

7455. Federal jurisdiction in the case of corporation owned by a State.

7456. Manner of pleading Federal jurisdiction.

7457. Further of this subject.

7458. Manner of averring citizenship.

fect was not aided by verdict, nor cured by any statute of jeofails, and neither party could have judgment for costs: Mason v. Farmers' Bank, 12 Leigh (Va.), 84.

1 Bank of Virginia v. Craig, 6 responsible on the contract. The deLeigh (Va.), 399; Tompkins v. Branch Bank, 11 Leigh (Va.), 372; Mason v. Farmers' Bank, 12 Leigh (Va.), 84. Where an action was brought against the president and directors of a branch bank, the defect was not merely a misnomer, but there was no action against the party

Owen v. Howard Ins. Co., 87 Ky. 571; 8. c. 10 S. W. Rep. 119; 10 Ky. L. Rep. 608.

§ 7447. Early Doctrine that a Corporation was not a "Citizen,” under Federal Constitution and Judiciary Act.—The constitution of the United States provides that the judicial power of the United States shall extend to all controversies between citizens of different States. Under this provision, the eleventh section of the Judiciary Act of 1789 defined the jurisdiction of Circuit Courts of the United States to be a jurisdiction existing in suits "between a citizen of the State where the suit is brought, and a citizen of another State." It was early decided that a corporation, as such, could not be a "citizen " within the meaning of the Federal constitution. At the same time, the concession was made that corporations might litigate in the Federal courts when, as between the opposing party and the members of the corporation, there was the requisite diversity of citizenship. Chief Justice Marshall said: "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 members, in this respect, can be exercised in their corporate name. If the corporation be considered as a mere faculty, and not as a company of individuals, who, in transacting their joint concerns, may use a legal name, they must be excluded from the courts of the Union." Under the rule as thus established, the members of the corporation, suing or sued in the corporate name, were regarded as joint plaintiffs or defendants, and subject to the rule established in an earlier case, that where there are two or more joint plaintiffs and two or more joint defendants, each of the plaintiffs must be capable of suing each of the defendants in the courts of the United States in order to support the jurisdiction. In other words, in an action by or against a corporation, it was necessary that there should be a diversity of citizenship existing between the

Const. U. S., art. 3, § 2. Bank v. Deveaux, 5 Cranch (U.S.), 61; Hope Ins. Co. v. Boardman, 5 Cranch (U. S.), 57.

Bank v. Deveaux, 5 Cranch (U.S.), 86.

Strawbridge v. Curtiss, 3 Cranch (U.S.), 267. See also Ward v. Arredondo, 1 Paine (U. S.), 410.

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opposing party and every member of the corporation. This position was reluctantly assented to by the Supreme Court of the United States; but when later the position was taken that a corporation created by one State could not be sued in the Circuit Courts of the United States by a citizen of another State, unless all the members of the corporation were citizens of the State in which the suit was brought, the court, in a weak and inconclusive opinion,2 reversed a rule of interpretation and of jurisdiction to which it had long adhered, and astonished the country with the proposition that a corporation aggregate is a "citizen."3

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§ 7448. New Doctrine that a Corporation is a Citizen" of the State Creating It, for the Purposes of Federal Jurisdiction. That the judges of the Supreme Court of the United States assented reluctantly to the doctrine stated in the preceding section illustrates one of the most pitiable characteristics of judicial administration,—the habitual greed of jurisdiction exhibited by courts and judges, and the insincerity manifested by them in interpreting constitutional provisions and statutes relating to their own jurisdiction. The

1 Commercial &c. Bank v. Slocomb, 14 Pet. (U. S.) 60.

Louisville &c. R. Co. v. Letson, 2 How. (U. S.) 497.

A majority of the court, although recognizing the authority of the case of Bank v. Deveaux, 5 Cranch (U. S.), 61, from the year 1809 up to the present time, 1844, had done so most reluctantly. Per Mr. Justice Wayne in Louisville &c. R. Co. v. Letson, 2 How. (U. S.) 497, 555. See in this connection Sullivan v. Fulton Steamboat Co., 6 Wheat. (U. S.) 450; Breithaupt v. Bank, 1 Pet. (U. S.) 238; Commercial &c. Bank v. Slocomb, 14 Pet. (U. S.) 60; Irvine v. Lowry, 14 Pet. (U.S.) 293; Bank of Augusta v. Earle, 13 Pet. (U. S.) 519, 586; Kirkpatrick v. White, 4 Wash. C. C. (U.

S.) 595; Bank v. Willis, 3 Sumn. (U. S.) 472; Com. v. Milton, 12 B. Mon. (Ky.) 212, 227 ; s. c. 54 Am. Dec. 522. Speaking of the case of Bank v. Deveaux, 5 Cranch (U. S.), 61, and that of Strawbridge v. Curtiss, 3 Cranch (U. S.), 267, Mr. Justice Wayne said: "By no one was the correctness of them more questioned than by the late Chief Justice who gave them. It is within the knowledge of several of us, that he repeatedly expressed regret that those decisions had been made, adding, whenever the subject was mentioned, that if the point of jurisdiction was an original one, the conclusion would be different." Louisville &c. R. Co. v. Letson, 2 How. (U. S.) 555.

question was one of extreme simplicity. It related solely to the meaning with which the framers of the constitution and of the Judiciary Act had used one of the plainest, simplest, and best-understood words in our language, the word "citizen." Never before had it been regarded as referring other than to a single person endowed with the ordinary political privileges and franchises of the country of which he was a resident. Never before had it been used to designate a body of persons, collected or organized in any manner, or with any faculty whatever. The judges knew this. They knew that the men who used the word "citizen" in those instruments had no idea that they were describing an artificial collection of persons. The Federal courts were courts of limited jurisdiction. It was the true office of interpretation, in doubtful cases, to repel rather than absorb jurisdiction, on the well-understood principle that presumptions are against the jurisdiction of courts whose powers are limited. It is to be borne in mind that the question did not involve the mere question of the jurisdiction of the national courts; it involved something more. All jurisdiction had been apportioned between the national and the State judicatories; and hence the Federal judicatories, in seizing upon a jurisdiction which had not been conferred upon them by the constitution or the Judiciary Act, seized a portion of the jurisdiction belonging to the States, and defrauded the State tribunals of a portion of their rightful jurisdiction. It was a plain case of a theft of jurisdiction. It illustrated a charge which Mr. Jefferson in one of his letters, written some years before, had made against the tendencies of the Federal judiciary, "working like gravity, by night and by day, gaining a little today and a little tomorrow, and advancing its noiseless step like a thief, over the field of jurisdiction, until all shall be usurped from the States, and the government of all be consolidated into one." Overruling their former decisions, and under a miserable pretext which involved the distortion of a plain word from its natural meaning to

1 Letter of Mr. Jefferson to Mr. Hammond, Aug. 18, 1821; reprinted in 28 Am. Law Rev. 148.

a meaning which had never before been assigned to it, the court now announced the following rule: "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. Like a citizen it makes contracts, and though in regard to what it may do in some particulars, it differs from a natural person, and in this especially, the manner in which it can sue and be sued, it 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." This statement of the law was probably extra-judicial, but its authority was established by later decisions against the vigorous dissent of a minority of the court.2

§ 7449. Conclusively Presumed to be a Citizen of the State Creating It. The jurisdiction thus seized upon, to continue in the language of Mr. Jefferson, continued to "advance its stealthy step like a thief," until the court had reached the doctrine that, for the purposes of Federal jurisdiction, a corporation is conclusively presumed to be a citizen of the State under whose laws it is created, and conversely that it cannot be a citizen of a State other than the State under whose laws it has been created. Stated in another way, this doctrine is

Louisville &c. R. Co. v. Letson, 2 How. (U. S.) 558.

2 Rundle v. Delaware &c. Canal Co., 14 How. (U. S.) 80; Marshall v. Baltimore &c. R. Co., 16 How. (U. S.) 314. See also Nashua &c. Corp. v. Boston &c. Corp., 136 U. S. 356; Booth v. St. Louis Fire Engine Man. Co., 40 Fed. Rep. 1; Maltz v. American Express Co., 1 Flip. C. C. (U. S.) 611; Covington Drawbridge Co. v. Shepherd, 20 How. (U. S.) 227; Ohio &c. R. Co. v. Wheeler, 1 Black (U. S.), 286; West

ern Union Tel. Co. v. Dickinson, 40 Ind. 444; s. c. 13 Am. Rep. 295; Herryford v. Ætna Ins. Co., 42 Mo. 148.

Letter to Mr. Hammond, Aug. 18, 1821; reprinted 28 Am. Law Rev. 148.

Steamship Co. v. Tugman, 106 U. S. 118; Fish v. Chicago &c. R. Co., 53 Barb. (N. Y.) 472; Park Bank v. Nichols, 4 Biss. (U. S.) 315; Williams v. Missouri &c. R. Co., 3 Dill. (U.S.) 267.

Southern Pac. Co. v. Denton, 146 U. S. 202; Williams v. Missouri &c. R. Co., 3 Dill. (U. S.) 267.

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