FARGO V. L., N. A. & C. BY. CO.
Another satisfactory answer to this objection is the fact that, upon the evidence now in the case, or that is ever likely to be, and the knowledge which is open to everyone, that in all probability this injunction must be finally sustained. If the injunction is not now issued, and the defendant is allowed to go on and finish the bridge ·before the final determination of this suit, it would then have to be removed, if the court so adjudged, as it probably would, unless congress, in the m:'ean time, should see fit to authorize it, as it did the Wheeling bridge, which, considering the character of the obstruction, is not at all probable. The amount of the bond to be given by the plaintiffs I will leave to be settled before the district judge.
Dlllt\DY, D. J. For the convenience of parties, I now say that I think the bond ought to be given ina sum not exceeding $25,000, and that, unless cause is shown to the contrary, the order of the court will be that the injunction issue upon the plaintiffs giving bond in that sum, with sufficient sureties, to be executed before and to the approval' of the of this court; Mr. William B. Gilbert.
(Oircuit Court, D. Indiana. May 3,1881.)
JOINT-STOCK (JO:MlPABY-CITIZENBHIP-SUIT IN NAME OF PRESIDENT.
A New York joint-stock company possessing the right, by the law under which it was organized, to sue and be sued in the name of its president or treasurer, is a citizen of the state of New York in the same sense that corporations are citizens of the states under whost! laws they are organized; and such joint-stock company may, by the of states, sue and be sued in the name of such officer in· the federal courts as a citizen of New York, even though shareholders of such joint-stock are citizens of the same state as the adverse party to the suit.
Indetermining what such joint-stock companies are, regard is to be had to their essential attributes rather than to any mere name by
which they may be known. If the essential franchises of a corporation are conferred upon a joint-stock company, it is none the less 8 corporation because the statute calls it something else, or even designates it as an "unincorporated association." 3.
The reasons which induced the supreme court to hold that. for the purposes of federal jurisdiction, corporations are to be regarded as citizens of the states whose creatures they are, call with equal force for a similar ruling as to joint-stock companies organized under the laws of New York.
In Equity. Motion to Dismiss Suit for Want of Jurisdiction.
baac Oaldwell and E. F. Trabue, for respondent, cited the following authorities: The American Express Company, not being a corporation, cannot sue as one in its corporate name or by its president. Louisville, etc., R. 00. v. Letson, 2 How. 497; Marshall v. B. dO. R. 00.16 How. 314; O. d M.R. 00. v. Wheeler, 1 Black, 286. All shareholders must there. fore be citizens of other states than Indiana. Hope Ins. 00. v.Boardman, 5 Cranch, 57; Bank of U. s. v. Deveaux, Id. 85; Breithaupt v. Bank of Georgia, 1 Pet. 238; Bank of Oum· b£rland v. Willis, 3 Sumn. 472; North River 00. v. Hojfm/an, 5 John. Ch. 300; Bank of Vicksburg v. Slocum, 14 Pet. 60; Whitney v. Mayo, 15 Ill. 254; Baldwin v. Lawrence, 2 Simon & Stuart, 18; Leigh v. Thomas. 2 Vesey, Sr. 312; Strowbridge v. Ourtis, 3 Cranch, 257; Oameron v. McRoberts, 3 Wheat. 591. The president of such a ,joint-stock company is practical(y a corporation sale 'for th'e purpose of suing and being sued. Life Ass'n of Americav. Rundle, (U. S. Supreme Court, 1881,) 12 Cent. Law J. 130; 13 Chic. Leg. N. 185; Reddish v. Pinnock, 10 Exch. 220; Ohapman v. Milvain, 5 Exch. 61; Hybart v. Parker, 93 E. C. L. 212; Westcott v. Fargo, 61 N. Y. 547; Overseers v. Sears, 22 Pick. 125; Liverpool, etc., Ins. v. Massachusetts, 10 Wall. 566. S. Rogers and A. W. Hendricks, for complainant, cited the following authorities: There is no want of juris<i ;tiori unless the Indiana shareholders are indispensable parties. West v. Randall, 2 Mason, 196; Payne v. Hook, 7 Wall. 431; Hotel .00. v. Wade, 97 U. S. 13-21; Story's Eg. Pl. §§ 72-100; Horn v. Lockhart, 17 Wall. 570; Shields v.
FARGO V. L., N. A. & O. RY. 00.
Btu-row. 17 How. 130. It would be a denial of justice to require all the shareholders to be made parties. Hickens v. Congreve,4 Russell, 562; Walworth v. Holt, 4 Mylne & Craig, 619; Richardson v. Hastings, 7 Beav. 323, 11 Beav. 17. As to the character of joint-stock corporations. Waterbury v. Merchants' Union Ex. Co. 50 Barb. 158. The American Express Company, notwithstanding the residences of its shareholders, is, for the purpose of federal jurisdiction, a citizen of New York. Fargo v. McVicker, 55 Barb. 438-443. The bill must show that all shareholders are citizens of other states than Indiana. Anderson v. Jackson,. 2 Paine, 426; Keeley v. Harding, 5 Blatchf. 502; Wood v. Mann, 1 Sumn. 580; Binghamv. Cabot, 3 Dallas, 382; Enville, 4 Dallas, Pomeroy on Reme7 ; "$o'byshall v.' Oppenheimer, 4 ates, etc., § 392. A circuit court is of limited jurisdiction, anq a cause will be presumed to be without its jurisdiction appear fro,m the record. Turner v. Bank unless the of North America, 4 Dall. 11. , GRESHAM, .This is a suit in equity brought by W,illiam G. Fargo, ,a citize;n of the state of New York, individually, and as president of the American Express Company, a.ga.inst the Louisville, New Albany & Chicago Railway Company for an injunction and other relief. The gro:unds of.jurisdic·. tion assigned in the bill ,That the right of the Express Company to sue and be su,ed in the name of its president is a conferred upon it legislature of New York, which, by comity, follows it into other states where it is permitte4 to do business; also, that the president is a natural person .and a citizen of the state of New York, and the defendant is a citizen of the state of Indiana. (2) That if it be held that the complainant, as such under the laws president, is not entitled to maintain the of New York, then he brings the suit,not only in his own name behalf individually as a shareholder in the company, but also in behalf of such of the other numerous shareholders not citizens of the state of Indiana as shall come in and be made parties to the suit, and share in the expense thereof.
The defendant's objections to the jurisdiction of the court are that the American Express Company is not a corporation, but a mere voluntary association, with no existence as an entity separate from the existence of its members; that, not being a citizen in the sense in which a corporation is, it can sue only with the names of all its associates, who, upon the face of the bill, must appear to be citizens of states other than the state of Indiana; that the New York Statutes, which, it is claimed, authorized this suit to be brought in its present form, permit the president to sue only when all the stockholders can sue, and that all the stockholders of this company could not sue, because they are all of the same class, iLnd some of them are citizens of the same state as the defendant; that the laws of New York, which confer upon this company certain corporate franchises, have no extraterritorial effect, and that the jurisdiction of this court is not of comity, but of constitutional right. The judicial power of the United States is extended by the constitution to' "controversies between citizens of different states," and by the judiciary act jurisdiction is donferred upon the circuit courts of the United States when'''the suit is between a citizen of'the state where the suit is brought and a citizen of another state." It is now settled that for the purposes of federal j u'risdiction corporations are regarded' as citizens of the states where they are created, and no averment as to the citizenship of the members else*here will be permitted. Is the American Express Company, which is a joint-stock company, organized under the laws of New York, a citizen in the samfl sense and for the same purpose? In chapter 258 of the laws of 1849 of the state of New York, and in subsequent amendatory acts, joint-stock companies may sue and be sued in the name of the president and treasurer when the nature of the cause of action is such that the suit might be maintained by or against all the shareholders. Such companies are endowed with perpetual succession, dissolution not resulting from changes in membership produced by death or otherwise. A pending suit by or against the president or treasurer of the company is not abated by the death, resigna-
FARGO V. L., N. A. & O. BY. 00.
tion, or removal of such officers; and a judgment against the their indipresident or treasurer, as such, is not a lien vidual property, but execution is levied upon the property of the company only, the shareholders being liable individually after an ineffectual effort to thus collect the debt from the company. These are privileges that are not enjoyed by natural persons or partnerships. While these companies have no common seal, it is difficult, in other respects, .to distinunder guish them from corporations. They are general laws very much as incorporations are now usually organized. Their stock is divided up into sbares and aold on the stock boards, just as the stock of corporations is divided up and sold. Corporations are artifichtl persQns-ideal creatures of the state-and so are New York joint-stock companies. It is of no consequence that in the statutes under which these companies are organized they are called "unincorporated associations." . In determining what such instituti()ns really are, regard is to be had to their essential attributes rather than ,to any mere name by which they ma.y be If. the, essen- . tial franchises of a are conferred uponllo.j()intstock company, it is none the .less a for, being called something else. .Sectio.n 3, art. 8, of the constitution of New York declares that "the term corporation, as used in this article, shall be to include associations and joint-stock companies,.having any of the powers and privileges of corporations not possessed by individuals or partnerships, and all corporations shall have the right to shall be subject to being sued, in all courts, in like as natural persons," It is urged, however, by counsel for .the defendant that the statute which confers the right u,pon these companies to.sue and be sued in the name of the president or treasurer ,relates to the remedy only, and that it can have no extraterritorial effect. Experience demonstrated the usefulness of these institutions in carrying on trade and business, and convenience required that they should be allowed to sue. and besubjectJo suit in the name of an individual who should represent the
companies as distinct from the individuals composing them. The right of such companies to sue, and of others, including their own shareholders, to sue them, could not be acquired by agreement between the associates. In England, by an act of parliament, a public officer is designated to represent the iLdividuals composing joint-stock companies in the courts, both as plaintiff and defendant, and a judgment taken against him, in his representative capacity, binds only the property of the company. In New York, where the same necessity was felt for a representative of joint-stock companies in litigation both by and with them, the legislature provided that suits might be brought by and against such companies in thf' name of the president or treasurer. Aside from considerations of convenience, it would be a practical denial of justice to hold that such organizations, representing as they do large interests, with numerous and ever-changing shareholders, can sue and be sued only in the names of all their associates, as in the case of partnerships. It is only by comity that a corporation which has been created by one state is permitted to carry on its business in other states, and there sue in its corporate name; and it is not easy to assign a reason why the same rule of comity should not apply in favor of joint-stock companies, which in character are not unlike corporations. In 1855 the legislature of Indiana passed an act (1 Davis, 466) relating to express companies. At that time, and ever since, the express business in this state has been done by foreign companies organized as this company was. By this act it is declared that all such companies, (and clearly foreign companies are contemplated,) before entering upon business in any county in this state, shall file in the clerk's office of that county a statement of their membership, the amount of capital invested in their business, and an agreement tha1 service of process upon any agent of the company shall bi deemed good service on the company. Here was a recogni tion by the state of the existence of express companies like the American, with all the privileges which they enjoyed where organized, one of which was the right to sue in a representative or common name.
L., N. A. & O. RY. CO.
The legislature of Massachusetts passed a statute which imposed upon each fire, marine, and fuealld marine insurance company, incorporated or associated under the laws of any government or state other than one of the United States, a tax of 4 per cent. upon all premiums charged or received on contracts made in that state for insurance of property. With this statute in force, the state of Massachusetts a bill in its supreme judicial court against the Liverpool & London Life & Fire Insuranoe Company to collect a tax of 4: per cent. on its premiums upon contracts made in Massachusetts, and to restrain the company from doing further. business until the tax was paid. Payment of the tax was resisted on the ground that the defendant was an associationqf natural persons, under certain deeds of settlement and acts of parliament, and not a corporation. In these acts of parliament, conferring privileges on the company, it was declared not to be the intention to make it a corporation. The supreme court of Massachusetts gave a decree against the company. In affirming the case on appeal the supreme court of the United States held (10 Wallace, 566) that, as the law of corporations is understood in this country, the Liverpool & London Life & Fire Insurance Company was exercising corporate franchises in Massachusetts, and that it was liable as a corporatlon to pay the tax under the statute ()f that state. In the case of Westcott v. Fargo, 61 N. Y. 542, it was held that under section 8, art. 8, of the constitution of New York, and under the legislation of that state, already alluded to, the president of the American Express Company was to be deemed a corporation sole for the purpose of suing and being sued in the courts of that state. The reasons which the supreme court to hold that, for the purposes of federal jurisdiction, corporations. are to be regarded as citizens of the states whose creatures they are, call with equal force for a similar ruling in favor of joint-stOCk companies which are organized under the laws of New York. It is no less convenient for the public than it is for these companies that they should be allowed to sue and be sued in the name of the presi-
dent Or treasurer. If they are not allowed the privilege of thus suing they cannot be thus sued. The American Express . Company has a capital stock of $18,000,000, with more than 3,000 Its right to sue and its liability to suit in the name of its president or treasurer is a franchise conferred upon it by the laws of New York, which by comity should and does follow it into other states, and William G. Fargo, who brings the suit as president, is a citizen of New York, and the defendant is 'an Indiana corporation and a citizen of that sta.te. For these reasons I think the suit is properly brought, and, without deciding other questions which were argued by coun· sel, the motion to dismiss for want of jurisdiction is over·
CHAPIN v. WALKER and others.
(Circuit Court, D· .Arkansas. --,1881.)
AFFIRMATIVE RELIEF IN EQUITY-CROSs-BILL.
Any affirmative Telief sought by a defendallt in an equity suit must be by cross-bill, and can never be granted upon the facts stated in the answer. 2.
BILL TO FORECLOSE MORTGAGE-MORTGAGEE'S TITLE CANNOT BE QUESTIONED.
According to the practice which prevails in the federal courts in a suit to foreclose a mortgage, the. mortgagee's title cannot be questioned: it must be investigated at law.
STATEMENT OF CASE.....:.DECREE.
The answer of a respondent to a bill in equity to foreclose a mortgage denied the complainant's title, set up an adverse title as mortgagee, and prayed that complainant's mortgage be declared void, and that the respondent's lien be declared a first and prior lien on said land. Held, that the title of complainant could not be questioned in the proceedings to foreclose, but .the decree in this case would be modified so as to provide that the decree and sale thereunder should be without prejudice to respondent's right to contest the title to the land in question by an action at law.