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Argument for Appellee.
If a corporation existing under the laws of two States, and as much a citizen of one as of the other, is to be treated when sued either in the state court or in the Federal court of the State as a citizen of that State only on the ground that it cannot there be a corporation of any other State, then it necessarily follows that when such a corporation brings a suit, either in the state courts or in the Federal court of one of the States, it must in like manner be treated as a corporation of that State only, because it cannot there be a corporation of any other State. It is impossible to say that such a corporation cannot be sued in one of the States as a corporation of another State, and at the same time to say that it can sue in the State as a citizen of another State.
Under these decisions, it is clear that the Boston and Lowell Railroad Corporation, a citizen of Massachusetts, could not sue the Nashua and Lowell Railroad Corporation in the Circuit Court of the District of Massachusetts as a citizen of New Ilampshire ; and that if the Nashua and Lowell Railroad Corporation should sue the Boston and Lowell Railroad Corporation in the state court of Massachusetts, the suit could not be removed to the Circuit Court upon the ground that the Nashua and Lowell Company is a citizen of New Hampshire.
How, then, can the Nashua and Lowell Railroad Corporation maintain this suit as a citizen of New Hampshire, in the Circuit Court for the District of Massachusetts? If it is to be taken as a citizen of Massachusetts alone, in any suit which is brought against it in the State of Massachusetts, or in the Circuit Court for the District of Massachusetts, is it not equally to be taken as a citizen of Massachusetts alone, in any suit which it brings in either of those courts?
II. It cannot be assumed that the shareholders of the plaintiff are all citizens of New Hampshire. It has long been settled law that the jurisdiction of the Federal courts in suits by or against corporations, depended upon the citizenship of the shareholders of the corporation, who, in case of corporations, created by one State, are conclusively presumed to be all citizens of that State.
To say that a corporation is not a citizen, and therefore
Argument for Appellee.
cannot sue or be sued as such, and then to say that it is to be conclusively presumed that its members are citizens of the State by which it is created, and therefore it can be sued or sue as a citizen of that State, although its members are not in fact citizens of that State, is in effect to say that it may sue or be sued as a citizen of that State. As an original proposition it would seem that as the jurisdiction of the Federal courts in such cases depends upon the citizenship of the members of the corporation, that membership should be established as a matter of fact by the party invoking the jurisdiction of the court, and not by an absolute legal presumption, without reference to the fact.
But it is not necessary to discuss that question in this case, for, however proper it may be to absolutely presume that the members of a corporation created by one State are all citizens of that State, no such presumption can in the nature of things arise in the case of a corporation created by the concurrent legislation of two States, and having one franchise and one set of stockholders.
The fact that under the laws by which the plaintiff corporation was created its stockholders must be common stockholders in both States, necessarily prevents the presumption that they are citizens of one State only.
The Circuit Court could have jurisdiction of the cause of action in this suit only by reason of the citizenship of the parties; and, unless it is to be conclusively presumed that all the shareholders of the plaintiff are citizens of New Hampshire, the court had no jurisdiction. How can it be conclusively presumed that the shareholders of a corporation existing under the legislation of two States, and who are in fact identical, are citizens of one State rather than of the other. See Railroad Co. v. Vance, 96 C. S. 450, 458; Attorney General v. Petersburg Railroad, 6 Iredell, 456 ; Philadelphia & Baltimore Railroad v. Maryland, 10 How. 376; Railroad Co. v. Ilarris, 12 Wall. 65, 82; Tilmer v. Atlanta &c. Railroad, 2 Woods, 447; Burger v. Grand Rapids &c. Railroad, 22 Fed. Rep. 561 ; Copeland v. Memphis & Charleston Ruilroad, 3 Woods, 651; Railroad Co. v. Georgia, 98 U. S.
Opinion of the Court.
359; St. Louis &c. Railway Co. v. Berry, 113 U. S. 465 ; Pullman Car Co. v. Missouri Pacific Railway, 115 U. S. 587.
MR. JUSTICE FIELD delivered the opinion of the court.
This is a suit in equity to compel the defendant, the Boston and Lowell Railroad Corporation, to account for various sums of money alleged to have been received by it and used for its benefit, to which the complainant was entitled, and also to charge the defendant Hosford personally with the amount diverted by him to that corporation. The controversy relates to certain transactions growing out of a joint traffic contract between the plaintiff and the defendant corporations.
The plaintiff, the Nashua and Lowell Railroad Corporation, is alleged in the bill to have been duly established as a corporation under the laws of New Hampshire, and to be a citizen of that State. It will be convenient hereafter in this opinion to designate it as the Nashua Corporation. On the 1st of February, 1857, it owned and operated a railroad extending from Nashua, in New Hampshire, to Lowell, in Massachusetts, a distance of thirteen miles, of which five miles were in New Hampshire, and eight miles in Massachusetts. The suit was brought not only against the Boston and Lowell Railroad Corporation, alleged in the bill to be a corporation duly established by the laws of Massachusetts and a citizen of that State, but against Hocum Hosford, its treasurer, and Charles E. A. Bartlett, of the city of Lowell, also citizens of that State, but as to Bartlett it has been dismissed. On the 1st of February, 1857, this corporation, which for convenience we shall call the Lowell Corporation, owned and operated a railroad extending from Boston to Lowell, Massachusetts, a distance of twenty-six miles, with a branch to the town of Woburn a mile and a half in length.
On the 1st of February, 1857, the two corporations entered into a contract in writing with each other," for the promotion of their mutual interest through a more efficient and economical joint operation and management of their roads and for the better security of their respective investments as well as for
Opinion of the Court.
the convenience and interest of the public,” that their roads with their branches should be worked and managed as one road,” under certain conditions and stipulations which were stated at length. The contract recited that a large portion of the business of the two roads was joint business passing over the roads and through the branches of both parties, making desirable a common policy and unanimity of management, and that in the transaction of their business there was a mutual interest, both as to the mode of transaction and as to the tariff upon the same, as well as in all other matters relating thereto, and that the two corporations, by operating under a common management, would thereby be enabled to do business with greater facility, greater regularity, and at a greater saving of expense.
The Nashua Corporation had at this time leases of the Stony Brook Railroad, extending from its line at North Chelmsford to Groton Junction, about fourteen miles in Massachusetts, and of the Wilton Railroad extending from Nashua to Wilton, about thirteen miles in New Hampshire. The contract was originally for three years, but by a supplemental agreement of October 1, 1858, it was extended to twenty years. Among other things, it provided:
That the roads of the parties should be “operated and managed by one agent, to be chosen by the concurrent vote of a majority of the directors of each party, and who might be removed by a like vote or by the unanimous vote of either board;” and that the respective boards of directors should, " by such concurrent action, exercise the same control over the management as is usual with boards of railroad directors in ordinary cases."
That the corporations should each surrender to the joint management thus constituted “the entire control of their respective roads, shops, depots, furniture, machinery, tools, or other property necessary for the proper maintenance and working of the joint roads,” reserving only certain specified property, necessary for the operation of the roads, consisting principally of real estate.
That the contracts of the Nashua Corporation with the
Opinion of the Court.
Wilton and Stony Brook roads should be assumed by the joint management and carried out; and that the contract with the Wilton road, which was to expire on the 1st of April, 1858, might be renewed during the continuance of the joint management.
That the Nashua Corporation should within the year 1857, at its own cost, erect a freight depot, with the necessary approaches and furniture, in the city of Lowell, upon its site at Western Avenue, which, during the continuance of the agreement, might be used for the accommodation of the joint business.
That the Lowell Corporation should complete within the year 1857, at its own separate cost, the new passenger depot at Causeway Street in Boston, then under construction, together with the tracks, bridges, and all necessary fixtures connected with the extension into that city, and at its separate expense make such alterations in the existing Boston passenger depot as had been designed by the Lowell Corporation for converting it into a freight depot; and also, without charge to the Nashua Corporation, complete at the earliest practicable time the crossing over the Fitchburg Railroad and the connection with the Grand Junction Railroad.
That the road-bed, bridges, superstructure, depots, buildings and fixtures of each road should be kept as near as might be in like relative repair from their then state and condition, and that all casualties and damages to the same, except fire risks on buildings, should be at the common risk, and charged in the current joint account, and in case of the destruction by fire of any buildings or injury to the same, that the owner should rebuild or replace them at his own cost.
That the income and expense accounts of the joint roads should be made up, as nearly as conveniently might be, by estimate to the close of each month, and the net balance should be divided and paid over, on account, to the respective treasurers of the two corporations, thirty-one per cent to the Nashua Corporation and sixty-nine per cent to the Lowell Corporation, subject to a final adjustment at the semi-annual closing of accounts; and that on the first days of April and