M. &. ST. P. RY.
FALES, Adm'x, v. CHICAGO, M. & ST. P. Ry. 90.
«}irouit OOurt, No D. Iowa, .E. D. November Term, 1887.)
REMOVAL OF CAUS.ES-CrfIZENSHIP-AoT OF MARCH ·3,
1887. Act of congress of March S, 1887, § 1, provides that the circuit courts of the United States sball have jurisdiction of civil causes between citizens of different states,Bnd .that, when the jurisdiction is founded only on diverse citizenship, the suit may be brought in the district where either the plaintiff or the defendant resides. Id. § 2, provides that civil suits of which the circuit court has jurisdiction. and which are brought in the state courts. may be removed to the circuit courts by the defendant if a J!9n-resident of the state. An action was brought in the' district court of Dubuque county, Iowa. the amount involved being over $2.000. The plaintiff was a citiien of Iowa, and the defendant of Wisconsin. On the application of the defendant the cause was removed to· the circuit court of the United States. Held. that the removal was authorized by the statute, the defendant not being a resident of Iowa, and the cause could not now be remanded to the state courts.
Corporations 'are citizens and residents of the state under the laws of which they were created. and they cannot, by engaging in business in another state, acquire a residence there. 8. SAME-PLACE OF BRINGING SUIT-AOT OF MARCH S. 1887. The provisions of act of congress of March 3, 1887, § 1, regarding the place of bringing suit by original process in the circuit courts of the United States, do not applyin determining the question of jurisdiction on an application for removal of causes from the state courts.
At Law. Motion to remand cause to state court. H(!/flderson, Hurd, Daniils Keisel, for petitioners. W. J. Knight, for defendant. - SHIRAS, J. This action was originally brought in the district court of Dubuque county, and upon the application of defendant was removed to this court, whence it is sought to have the same remanded for want of Jurisdiction. . The motion to remand requires for its determination a construction of the second section of the act of March 3, 1887. To ascertain the true reading of this section, it is necessary to collate with the several clauses thereof portions oOhe first section of the act, as that section is expressly referred to in the second section, and is thereby made part thereof. Reading the one, therefore, in connection with the other, it appears that removals from the state to the federal courts may be had in the following classes of cases: . (1) Suits of a civil nature, at law or in equity, arising under the constitution, laws, or treaties of the Dnited States, involving over $2,000, exclusive of costs or interest, may be removed by the defendant, whether hebe or not a resident of the state wherein suit is brought. (2) Suits 'of a civil nature, at law or in equity, in which the United States are plaintiffs, .without reference to the amount involved, may be removed by the defendant, ifhe ian non-resident of the state wherein suit is brought. (3) Suits of a civil nature, at law or in equity, between citizens of different states, involving over $2,000, exclusive of interest and costs, v.32F.no.1l-43
may be removed by the defendant, if he is a non-resident ()f the state wherein suit'is brought. " (4) Suits, of a civil nature, at law C!r citizens of the same state, claiming lands under grants of different states, irrespective of tbll, aplount illvolved, may be removed by the defeIidant, if he is a non-resident of the state wherein brought., ' ' (5) Suits ofacivil'nature,atilawor in equity, between citizens ofa state ancl over $2,000; exclusive of interestand,costs, mayberemoved,bythe defendan,t, if he is a non-resiwherein, suit is '.. ' dent (6) IIi sllHs,ofa in which there is a controversy between a citizen of the state in which the suit is brought and,a, <iitizen'of,anotherstate,itny defendant being a citizen of a state other than' theonewhereih suit is brought, may, irrespective of. the amount involved, remove said cause, by making i(to appear to the United_ States circuit' dourt that, owing to prejudice influence, he cannot obtain justice III the state court inwhibh the'J)liuse is pending, or to , which it may, under the state laws, be removed for trial. ." (7) <>fa civil nature, at law or inequity,:between citizens of the same the tiqetoland, theaIllOutit in dispute $2,000 exClusive of interest and may bererilQved by. either plaintiff or defendant, if it be made to appear, in the mode provided in the statute, that the adverse' parties title under gra11ts from different
From this classification of the cases removable under the provisions of theactJnquestion, it,appears that a plaintiff is, not granted the right, except in the class of dil:ses falHng under thesev()nth head, which covers cases invoivipg title'to land clilimed under grants fr01Il1'differeIitstates. In all other 'removable cases, under this act, the defendant alone can ex<lrcise the right removal, right is limited in the majorityofinstances. ..',. . ." ; Thus in cases falling in the first class named, thos!larising under the constitlition, laws, and treaties of. the United States, the defendant may remove the cause without reference to the citizenship 9r residenceof the parties. . ." In within the second, third, fourth, and fifth classes, the defendant cannot remove the cause, unless he is a non-resident of the state wherein suit is brought. In under the sixthllead, or locialprejudice ptovision, the defenda;l;t m'tix'remove the causeifhe isa citizen of anothet state. ' In caseS 'lti'u!;i'ng under,the first, third, fifth, and seventh classes, the amount involr,ed must exceed: $2,000, exclusive of interest and costs. In cases arisiqfrtindet the second, fourth,' and slith classes, the removal be had of the amount invoNed in the controversy. In this case, of Catherine Fales, Adm;'x, v. Chicago, M. P. Ry;Co., the plaintiff is and was" when the action was broughtin the state court, lJ. citizen of thestate of Iowa, alldthe defendant compa'uy was and is a corporation created and organlzedurider the laW's of'theetate ofWisc6nsiri,
M. &: ST. P. RY. CO.
and, tl1el'efore;\for jurisdictiona.l pu.rposes, isdeenilJd alid held to be a citizen of that state. The amount involved in the controversy exceeds .exclusNe: of interest·. and '. costs, .and the. case" therefore, .falls :the third class .of removtlble cases; that is to it .is a case which is J;eIilc)vable by ithe defebdant, jf the latter is a non-resident of the state. of Iowa; In eQ,1P'Portofithe illoti<i>Q to ralland it is arguedthaUhe United States courts cannot take jurisdiction, by removal, of any case which could n0t have been' Qrigin811y brought in such court, and in support of this view is cited thecase.<:lfthe OountyofYuba v. Mining Oo.;-decided,by the.circuit court forthe Northern district of California, and reported in 32 Fed. Rep. 183. ,. It willce.min}yseem anaet ofpresnmption oil my part to question the correctnl¥ls of the views expressed by the learned court in that case; yet t4e conclusion therein. reached, it seems to me, completely nullifies a large part of the provisions of the act of congress, and I cannot yield assent to it correct exposition of the statute in question. In principle, also, the conclusion reached is at variance with that announced by the citctl.it judge of this circuit in the .case of Telegraph Co. v; Brawn, 32 Fed,. Rep. 3 3 7 . , · The doctrine oithe .California case is, that section 2 of the act of 1887 does not authorize the removal of a suit from a state to a federal court, which could:not have been originally brought in the latter tribunal; .that a corporMioncan be an inhabitant only of the state under whose laws it is created, anli that under the act of 1887 the United States courts have not jurisdiction of actions between citizens of different states, except in the state whereof the defendant is.an inhabitant· .In the firstsecti,onof the act it 'is declared "NopemoIi'shalt be arrested inane district fortrial in another, in any civU action before a circuit or district court; and no civiI suit shall be brought ba fore either of·811.id. courts against· any person by any original process of proceeding in any other district than that whereof he is an but 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 or defendant." . The latterseptence expresaly declares that where the jurisdiction is founded on diverse. citizenship, the suit may be brought only; in the tricts of the residence of either plaintiff or defendant. Uqder the express language 9f the act of 1875, suit by original process might have been brought in any district whereof the defendant an inhabitant, Of in which he should be found at the time of serving process. IleJilce if, by reason of diverse citizenship, or by reaSOn of the subje.et-matter1 the cause was one cognizable by a federal ·ca!le might, under the act of ;1.875, have been brought in any distriCT wherein the defendant could be. found for purpose of service., ..Under the act of. 1887, the place wherein the suit may be brought is limited to the district which the defendant fll8ides,SllivedQ-!cases jurisdicU9D depends rsolely on the fact of diverso
and in these the suit may be brought in the district of the residence of either pll\.intiff or defendant. We must not confound the question of federal jurisdiction with that of the place of bringhig suit. The first section of the act of 1887 was intended to define the classes of cases of which 'the United States circuit courts should have original cognizance, concurrent with the courts of the several states, and also to define the place or places where such suits might be brought by original process. Two general grounds of federal jurisdiction are recognized in the statute. to-wit, subject-matter and diverse citizenship. Oases arising under the constitution, laws, or treaties of the United States, or in which the title of land is involved, claimed under grants from different states, are cognizable in the United States courts by reason of the subject-matter, whereas controversies between citizens of different states, or between citizens of and aliens, are cognizable in the federal courts by reason of diverse citizenship. In addition to these general grounds of federal jurisdiction the statute also includes cases wherein the United States are plaintiffs or petitioners. Having thus defined the classes of cases of which the/United States circuit courts have jurisdictIon, the section then proceeds ,to define the place or district within which'such suits may be brought by original process, it being declared that no civil suit shall be brought against any person by any original process in ll.uy district other than that of which he is an inhabital1t;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 wherein plaintiff or defendant resides. 'l'he latter clause of the section cannot be ignored. It is the latest declaration of the legislative will, and, if irreconcilable with the preceding clause, it must beheld to control, but it is not necessary to resort to purely technical. rules in construing the statute., Force can be given to both clauses of the section by holding that the first one establishes the general rule that, in bringing suits byorigil1lil prooess in the United States courts, the same must be brought in ,the district wherein the defendant resides; and the secorid clause provides an exception, to-wit, that where the jurisdiction is based solely on diverse citizenship, suit may be brought in tbedistrictof the residence of either plaintiff or defendant, but not elsewhere.Whatever may be the true construction of these clauses, they affect, not the question of federal cognizance, but solely the question of the place of bringing suit by original process, in cases of federal cognizance. The second section of the act defines under what circumstances causes brought originally in the state courts may be removed for trial into the federal courts. lf the case is one of federal cognizance, as defined in the first section of the act, because it arises under the constitution, laws, or treaties of the United States, then the' defendant, without reference to place of residence, may remove'thesarne. If the case does not arise un<ler the constitution, laws, or treaties of the United States, but is otherwise of federal cognizance, as defined in the first section, it may bere-
CRICAGO, M. &: ST. P. RY. CO.
moved by the defendant, if a non-resident of the state wherein suit is brought. Suits of a civil nature. at law or in equity,in which there is a controversy between a citizen of the state wherein suit is brought, and a citizen of another state, may be removed on the ground of prejudice or local in. fluence. by a defendant, if he is a citizen of a state other than that in which suit is brought. " Suits between citizens of the same state, involving the title to land claimed under grants from different states, may be removed by either . plaintiff or defendant, irrespective of residence. If the ruling made in the case of Yuba County v. Mining Co., 81.tpra,. is the correct interpretation of the statute, it follows that, in all cases wherein original jurisdiction is conferred on the United States courts by reason of diverse citizenship, no removal thereof can be had if suit is brought in the state court, because the statute declares that only non-resident defendants can remove such cases, and the court holds that the United States court has not jurisdiction of cases wherein a non-resident is a defendant. It seems to me that the question of federal cognizance is confounded with the question of the place of bringing suit by original process. The latter question has nothing to do with the right of removal. The question whether the.action might have been brought by original process in any federal court was material, in order to determine whether it was a case of federal cognizance, but that question being decided in favor of the federal jurisdiction, the question of the proper place or district in which the suit might have been brought by original process is wholly immaterial on the question of removal. In the Yuba County Case the complainant, as a California corporation, might have brought. the suit in the federal court of the district of Nevada, the defendants being corporations, and therefore citizens of that state and district. The case, therefore, was one of federal cognizance, under the provisions of the first section of the act of 1887. If the complainant had brought suitin a state court of Nevada, the case could not have been removedj not because the case was not one of original federal . cognizance, but because the defendants were residents and citizens of Nevada. When brought, however, in a state court of' California, being a case of federal cognizance, the right of removal exists under the statute, because the defendants were non"residents of California. Having defined the classes of cases in which federal cognizance, concurrent with that of the states,exists, the first section of the act restricts the place in which suit may be brought by original proces'l, to the district wherein defendant resides, save in cases where citizenship is the sole ground of federal cognizance, in which event suit J;llay be brought in the district of the residence of either plaintiff or defendant. The statute confers upon a party, having a cause of federal cognizance, the right to bring suit thereon in a federal courtjbut, for the protection of the defendant, requires suit to be brought in the district or districts hamed, and no other, thus essentially changing the law in this particular. If, however, the plaintiff, having a cause of federal cognizance by rea-
. son of diyerse cbp.oses to bring; suit thereon in thr. state court, then he has made his election, and he cannot afterwards remove the case brought in the courts of the unto the.federal tribunaJ...lfs:\lch state of ;Which ,a, resident, then it. cannot be removed. be.cause,iUs supposed the dEjfendant can have, no objection to a trial by the courts of the state of which he is a resident. If, however, a suit is brought in a case of federal cognizance in a court of a state of which de-fend ant is not a then the. election is given to such non-resident defendant to car,ry the case b)j'. removal into the federal court. It is also said that the. statute. recognizes a distinction between citizenship and residency ,and tliat, in a .given case, while the citizenship of t4e parties. may be diverse, the, defendant may' be in fact a resident, though notacitizen, of s.tatewherein suit is Qrought,and that thereby the right of removal will be. defeated, save in .cases arising under the seventh of the hereinbefore.given. In the particular Case now :under consideration, the argument is that the railway company, though deemed to be a citizen of the state of Wisconsin, is nevertheless in fac.t a resident of Iowa, by reason of the fact that it is engaged in the management and operation of part of its railway .system in state, and has by reason thereof become a resident of this ' state. It is well established that citizenship and residence are not synonymous terms, when used in. connection with the question of juriSdiction. Parker v. Ot'erman, 18 How. 137 In other words, a person may be a cit- . izen of one state, and yet acquire a residence in another. Can thiS', however, be truthfully said ofa corporation? The earlier doubts on the question of the citizenship of corporations were finally settled by the decision in Railroad Co. v. Harris, 12 Wall. 65, in which is held that"For the purposes of federal jurisdiction it is regarded as if it were a citizen of the state ,where it was created, and no averment or proof as to the citizen,ship of its members elsewhere will be permitted. ,This is a presumption ot law that is conclusive." , . In a large number of cases, beginning with that of Bank v. Earle, 13 I'et. 588, the supreme court has held that a corporation cannot emigrate; that while .may enlarge the territory in which it does business, and carryon the same in other states, yet it remairisa citizen of the state wherein it was created, without the legal powerto change its citizenship, home, or ,residence, or aEl is said in Ex parte SchoUenberger, 96 U. S. 369: ..A corportion cannot cbange .its. residence or its citizeuship. It can have its legal home at, the place,where it is located by or under the authority of its charteJ,'; but it may by its agents transact business anywhere, unless by its charter, or excluded by local laws. " ' In other the fact that a corporationis engaged-in business in a s1;ate otlwr than that under whose laws it was created, does not change itslegal or residence. . . .· . In Pennsylvania (lo. v. Railroad 00., 118 U. S. 290, 6 Sup. Ct. Rep. 644, and GfJ.qdlett v. Railroad, 122 S. 391,7 Sup. Ct. Rep. 779,it .is held that a corporation, by owning property and doing business in
CmCAGO,M.'& ST. P. RY. CO.
another state, under the provisions of state legislation to that end, does not thereby become a citizen of the latter state, so flS to lose the right of removal under the act of 1875. The real reason underlying these decisions is clearly stated in the case of Mulkr v. Dows, 94 U. S. 444, in which it is said: " A corporation itself can be a citizen of no state, in the sense in which the word ·citizen' is used in the constitution of the United States. A suit may be brought in the federal courts by or against a corporation, but in such a case it is regarded as a suit brought by or against' the stockholders of the corporation; and for the purpose of jurisdiction, it is conclusively presumed that all the stockholders are citizens of the state which by its laws creates the corporation." It being, then, a conclusive presumption of the law. irrespective of the actual facts, that the stockholders in a corporati.on are citizens of the state under whose laws the corporation is created, and that the corporation itself, as a legal entityI cannot become a citizen of any state, it follows that the corporation, by engaging in business in other states, cannot acquire citizenship or residence therein, nor ,can the acts, of the corporation change the citizenship or residence of the stockholders. When, therefore, the act of March 3, 1887, was enacted, it was ijle settled law of the land that corporations could not, by engaging in business in a state other than that whereiI;l they had been created, change either their J;esidence,or citizenship. It was well known that nearly all the more important railroad corporations were engaged in the operation of lines of railway extending into states other than the one of their legal existence, and it was equally well known that by repeated decisions of the supreme court it has been held that by thus engaging in business in other state!,! the corporation did not change its citizenship or residence. With this kn9wledge, had congress to chl\nge law in particular,and to declare that corporations shoulq be deemed residents of the states wherein they engaged in business, certainly some indication of such a purpose would have been found in the express language of the act. The fact no such declaration is made in the act clearly shows that in this particular congress, intended to leave the law 1,1llchanged, and therefore the same construction, nmst hold good 'Under the. act of 1887 as under previous acts, to-wit, that corporations are deemed, to be citizens and residents only of the state under whose laws they are created., , t ' , ' From the record in this cause it clearly appears; that the plaintiff, and,h¥continued to be when the suit was brought, and ever since, a citizen ofthestate onowa" and that the Clefen<iant was and ii;! acorporation created uuder the l""ws of the state of Wisconsin, and therefQre is and was a citizen and resident of that state, ,and of no, other. It !Uso appearing that the matter in controversy, the sum of $2,000, exclusive of interest ,and costs, it,follows that. the cause was erly removed to t4is court, and the motion to be overrwed.
SMITH'll. MITCHET,I. . SAME
and others· others.
October 3, 1887.)
'v. HIVELEY and
(Oircuit Oourt, 8. D. Oalifornia.
PtmLIC LANDS-IsSUANCE OF PATENT-CERTIFICATES OF PURCHASE.
Plaintiff, in ejectment, ;relied upon a. certificate of purchase for the land in controversy, regularly issued by the state of California. Defendant relied upon a patent from the same source, also in due form. Held, that under Pol. Code Cal. § 3li56, before due foreclosure. the land-office could not issue a. pat· ent for land for which a. certificate had been regularly issued.
Edward" R. Taylor, for plaintiff. Wella, Van Dyke &: Lee, for defendants.
Ross, J. The cases above entitled are' of the same nature, and were tried and submitted The land involved in one is a part of a sixteenth, and in the other, a part of a thirty-sixth. section. The plaintiff in each case relies for a recovery upon a certificate of purchase, regularly issued by the state of California to one whose interest in the premises vested by assignment in the plaintiff, prior to the commencement of the action. By the terms of the statute under which these certificates were issued, such certificates are made prima facie evidence of title, and they, together with all rights acquired thereunder, are also expressly made subject to sale by deed or assignment. Clearly. therefore, plaintiff is in each case entitled to recover, unless the prima facie case thus made out has been overcome. In each, the defendants pleaded the statute of limitatidus, but the proof adduced in support of the plea was insufficient to show adverse possession on the part of the defendants, or either ofthem. Defendants in each case also pleaded title in themselves, and in support thereof introduced in evidence a patent (in form) for the land, fromtne state to the grantors of the defendants, together with the proceedings upon which such patents were based. Those proceedings 'Were initiated long subsequent to the issuance of the certificates of purchase under which the plaintiff claims, and were, in my judgment, without authority of law, and therefore void. While a patent is an instrument of great solemnity, and, in a court of law, is conclusive of all matters properly determinable by the land department, when its action is within the scope ofits autherity, nevertheless, if, under the law, the officers of that department have no jurisdiction to act, their pretended conveyance of the land is of no validity. even though it be issued in the form ora patent. Smelting (Jo. v. Kemp, 104 U. S. 636. In the cases at bar, at the time of the initiation of the proceedings upon which the patents are based, there were outstanding certificates of purchase for the same land, which had been duly and regularly issued, and which were then in full force and effect. Under such circumstances there was no authority in the officers of the land department to entertain any application for the purchase, or to take any step looking to the sale, of