actions by and against them, and to place such actions exclusively within the cognizance of the Federal tribunals.'

§ 7450. Effect of This Rule on Domestic Corporations. Where a corporation, created by one State, has been domesticated by another State,2 the true principle seems to be that it does not become a "citizen" of the State domesticating it, unless it is re-endowed, so to speak, by such State with the franchise of being a corporation, so as to become, to all intents and purposes, a domestic corporation of that State, subject to its laws, and to the jurisdiction of its courts, as such. Since the decision of the Supreme Court of the United States in the leading case of Bank of Augusta v. Earle, it has been a doctrine constantly repeated by judges, that a corporation can have no legal existence out of the territorial limits of the sovereignty by which it was created. "Its place of residence is there," observed Mr. Justice Davis, "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." And this is the law as settled by the highest court of England."

4

§ 7451. Further of This Rule. — The artificial rule of juris. diction which we are now considering is such that a corporation cannot acquire a residence within a particular State for the purposes of Federal jurisdiction, founded on diverse citi. zenship, unless it is reincorporated in such State. The mere fact that the statutes of a State allow foreign corporations, under certain circumstances, to be sued in the courts of the State, has no application to courts of the United States, and no influence upon this rule of jurisdiction. So, for the purposes of this rule of jurisdiction, a corporation organized in one State does not become a citizen of another State, by reason of establishing its principal place of business there, and appointing, under a statute of such State, an attorney or agent upon whom process in actions against it may be served. On the other hand, the fact that a corporation has established an agency in another State, and is doing business there, under statutes of the latter State requiring it to receive service of process made upon such agency, and to comply with State regulations as to its mode of doing business, does not impair its right to appear in the national courts as a citizen of the State of its creation, or to remove to a court of the United States an action brought against it in a court of the State where it has thus acquired a domicile for the purposes of its business. But, as already seen, whenever the effect of the legislation of a State is to adopt or re-create a foreign corporation as one of its own, it becomes a citizen of the State adopting it, as well as of the State to which it owes its original creation.

§ 7452. Rule where the Corporation is Created by the Concurrent Legislation of Two States. — We have already had occasion several times to consider the status of this species of corporation, with the conclusion, universally acquiesced in,

v

· Southern Pac. Co. v. Denton, 146 U.S. 202.

: St. Louis R. Co. v. Pacific R. Co., 52 Fed. Rep. 770.

• Hatch v. Chicago &c. R. Co., 6 Blatchf. (U. 8.) 105.

* Ibid.; Stevens v. Phoenix Ins. Co., 41 N. Y. 149; Hobbs v. Manhattan Ins. Co., 56 Me. 417; 8. C. 96 Am. Dec. 472,

• James v. St. Louis R. Co., 46 Fed. Rep. 47; ante, $ 7438.

that it is a domestic corporation of each of the two States by whose concurrent legislation it is created, in so far as it can exercise its franchises within such State. This doctrine, as already seen, has been always recognized by the Supreme Court of the United States; and yet that court, extending its artifi. cial rule of jurisdiction still further, has held that it may be regarded as a foreign corporation for the purpose of suing a domestic citizen or corporation of either of the States by which it is created.

§ 7453. All the Substantial Parties must be of Diverse Citizenship.— In a suit by or against a corporation, if one of the parties opposed to the corporation is a citizen of the same

1

Ante, $$ 47, 319, 320, 688, 7438; porations. Ibid., 136 U. 8. 382. Thus, post, 99 7472, 7490, 7799, 7817, 8012, the corporation has an existence as a 8020, 8128.

domestic corporation in each one of the * Nashua &c. R. Corp. v. Boston States, and at the same time it is en&c. R. Corp., 136 U. S. 356; 8. C. 42 dowed by the Federal judiciary with Am, & Eng. Rail. Cas. 688. This de- the additional faculty of being a forcision reversed a decree of the Circuit eign corporation for the purpose of Court of the United States for the suing a citizen or corporation in District of Massachusetts, and three either one of the States under whose of the judges of the Supreme Court laws it exists as a domestic corpora(Fuller, C. J., and Gray and Lamar, tion. The case was that of a railJJ.), dissented. Blatchford, J., did road corporation extending its railnot sit, or take any part in the deci- road from a place in New Hampshire sion. It was therefore a decision of to a place in Massachusetts. It was a bare majority of the court, and can- allowed, on the ground of diverse citnot be regarded as settling the propo- izenship, to maintain an action in a sition of jurisdiction involved therein. Federal tribunal in the State of Mas. The theory of the decision is that sachusetts. Such a corporation may railroad corporations thus created, thus fire across the line from either although joined in their interests, of its domiciles. Perched upon either and in the operation of their roads, of its eyries, it may be either and at in the issuing of their stock, and in once both a domestic and a foreign the division of their profits, so as corporation. It may sue a citizen of practically to be a single corporation, Massachusetts in a Federal tribunal do not lose their identity; that each in that State on the ground of its beone has its existence and its standing ing a citizen of New Hampshire; and in the courts of the country only by it may sue a citizen of New Hampshire virtue of the legislation of the State in a Federal tribunal in that State on by which it is created; and that the the ground of its being a citizen of union of name, of officers, of business, Massachusetts. Compare Minot v. and of property does not change their Philadelphia &c. R. Co., 2 Abb. (U. distinctive character as separate cor- 8.) 323.

State wherein the corporation has its legal existence, there is not that requisite diversity of citizenship between the parties to the controversy, which is necessary to give a Federal court jurisdiction of the case.' So, in an action by a corporation against several other corporations, one of which has its legal existence in the same State as the plaintiff, the Federal court has not jurisdiction. But a Federal court will not suffer its jurisdiction to be ousted by the joinder or non-joinder of merely formal parties. It will decide upon the merits of the case between the substantial parties to the suit, whenever this can be done without prejudice to the rights of others. A plaintiff bringing an action in a State court against a corporation created under the laws of a State other than that in which the suit is instituted, cannot prevent the removal of the cause to the Federal court by joining as parties defendant certain directors or officers of the corporation, citizens of the same State as the complainant, against whom no specific relief is prayed in the nature of a personal liability, nor any discorery sought in regard to matters peculiarly within their knowledge. “The test of this is,” said Blatchford, J., " that, if any one of the directors or the treasurer were to resign his office, he would necessarily cease, ipso facto, to be a proper party to the suit, and the plaintiff would be obliged to make his successor in office a party, and so on with every change. The reason for this would be that, there being no relief prayed against the individual in his individual capacity, and the injunction asked being to restrain him merely from doing or not doing what his official relation to the company alone enables him to do, or to refrain from doing, when such official

Coal Co. v. Blatchford, 11 Wall. (U. S.) 421; Carneal v. Banks, 10 (U. S.) 172; Dormitzer v. Illinois &c. Wheat. (U. S.) 181. Bridge Co., 6 Fed. Rep. 217; Walsh • Hatch v. Chicago &c, R. Co., 6 v. Memphis &c. R. Co., 6 Fed. Rep. Blatchf. (U. S.) 105. Thus, the di797; Donohoe v. Mariposa L. & M. rectors and treasurer of a railroad Co., 5 Sawy. (U. S.) 163. See also corporation are merely nominal parMyers v. Dorr, 13 Blatchf. (U.S.) 22. ties to a bill seeking to restrain the

• The Sewing Machine Companies' corporation from extending its line Case, 18 Wall. (U. S.) 553.

and from using any of its moneys or • Wormley v. Wormley, 8 Wheat property for that purpose.

relation ceases, the relief asked and the injunction issued, become, as to him, utterly futile.” 1

§ 7454. Application of This Rule of Jurisdiction to Jointstock Companies. It has been held, in one of the departments of the Supreme Court of New York, on a question of the right to remove an action to a court of the United States, that a voluntary association, unincorporated, but composed of many members, and organized similarly to a corporation, and authorized by the laws of its State to sue and be sued in the name of one of its officers, stands upon the same ground with a corporation in respect to the right to sue and be sued in the national courts. But it is apparent that this doctrine can only apply to a joint-stock company which has one of the faculties of a corporation, and which is, quoad hoc, a corporation, namely, to such a company as has been invested, by the law of the State of its creation, with the faculty of suing and of being sued by an artificial name. The court reason that, in respect to the power to sue and defend, an association of persons authorized to sue by one name representing the whole body, is the same as a corporate body, by whatever designation it may be known. The reason why the members of a legal corporation are treated, for the purposes of Federal ju. risdiction, as citizens of the State, applies aptly to every aggregation of persons invested by State law with the faculty of suing and being sued by a new name.

§ 7455. Federal Jurisdiction in the Case of Corporation Owned by a State. — The jurisdiction of courts of the United States is not affected by any interest which a particular State may have in the suit, unless the State is a party on the record.' The mere fact that the State has an interest in a corporation does not render the State a necessary party to the record in a suit by or against the corporation, nor in any manner distin

· Hatch v. Chicago &c. R. Co., 6 Blatchf. (U. S.) 105.

• Fargo v. McVicker, 55 Barb. (V. Y.) 137.

3 Ibid.

• Osborn v. Bank, 9 Wheat. (U. S.) 738, 852.