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SOUTHERN RAILWAY COMPANY v. ALLISON

May 18, 1903

SOUTHERN RAILWAY COMPANY
v.
ALLISON



ERROR TO THE SUPREME COURT OF THE STATE OF NORTH CAROLINA

Fuller, Harlan, Brewer, Brown, White, Peckham, McKenna, Holmes, Day

Author: PECKHAM

[ 190 U.S. Page 330]

 MR. JUSTICE PECKHAM, after making the foregoing statement of facts, delivered the opinion of the court.

The state court refused to recognize the validity of the order of removal of this case to the Federal court solely because of the state statute, and because of the admitted compliance of defendant with its provisions. It held that by complying with the statute the defendant became a citizen of North Carolina, so far at least as to prevent it from applying for removal as a citizen of another State. We therefore, assume the sufficiency of the facts to warrant the decision of the Circuit Court of the United States removing the case to that court, provided the defendant company was a citizen of Virginia and did not become a citizen of North Carolina by virtue of its compliance with the state statute.

The ruling of the state court, by which it proceeded to judgment.

[ 190 U.S. Page 331]

     in the case notwithstanding the order of removal to the Federal court, is reviewable here under section 709, Revised Statutes. Stone v. South Carolina, 117 U.S. 430; Missouri Pacific Railway Company v. Fitzgerald, 160 U.S. 556.

Two propositions were argued at the bar: (1) Whether the state court had the right to pass upon the question of the validity of the order of the Circuit Court of the United States removing the case to that court? (2) Did the defendant company, which was originally incorporated in the State of Virginia, have the right as a citizen of Virginia to remove the case into the Federal court, notwithstanding the defendant company had complied with the statute of North Carolina, which declared that upon doing the things therein mentioned the defendant became a domestic corporation of North Carolina?

In the view are take of this case it is unnecessary to dwell upon the first of these questions. We, therefore, address ourselves to the second.

The statute of North Carolina provides in substance that a railroad company incorporated under the laws of any State or government, other than North Carolina, which desires to own property or carry on business, or to exercise any corporate franchise within that State, shall become a domestic corporation of the State of North Carolina "by filing in the office of the Secretary of State a copy of its charter duly authenticated in the manner directed by law for the authentication of statutes of the State of country under the laws of which such company or corporation is chartered and organized, and a copy of its bylaws duly authenticated by the oath of its secretary." Section 3 of the act provides:

"That when any such corporation shall have complied with the provisions of this act above set out, it shall thereupon immediately become a corporation of this State and shall enjoy the rights and privileges and be subject to the liability of corporations of this State the same as if such corporation had been originally created by the laws of this State. It may sue and be sued in all courts of this State and shall be subject to the jurisdiction of the courts of this State as fully as if such corporation were originally created under the laws of the State of North Carolina."

[ 190 U.S. Page 332]

     It is further provided by section 4 that it shall be unlawful for such foreign corporation to do business or attempt to do business in North Carolina after the first day of June, 1899, without having fully complied with the requirements of the act. It is admitted that the company did comply with the provisions of the act in relation to filing its charter, by-laws, etc., with the Secretary of State.

It early became material to inquire into the nature of the status of corporations with regard to the jurisdiction of the Federal courts under the Constitution and laws of the United States. A recent statement of the law on that subject is contained in the case of St. Louis & San Francisco Railway Company v. James, 161 U.S. 545. It was said by Mr. Justice Shiras, in delivering the opinion of the court in that case, that after considerable contention in the courts, it was finally determined by this court that the citizenship of a corporation was that of the State originally creating it, and that it was a presumption of law that the members of the corporation were citizens of the same State.

The facts upon which the decision of the court in that case was based, so far as important to be here observed, were these: The St. Louis and San Francisco Railway Company was a corporation originally created under the laws of the State of Missouri, and it operated a railroad from Monett in the State of Missouri to the southern border of that State. Subsequently, and under provisions of the laws of Arkansas, it entered that State for the purpose of operating its road therein from the southern boundary of the State of Missouri to Fort Smith in the State of Arkansas; the portion of the railroad in Arkansas was operated by the leasing of a railroad already or partly built in that State. The State of Arkansas had provided by its legislation that before any railroad corporation of any other State or Territory should be permitted to avail itself of the benefits of the act allowing the purchasing or leasing of any road within that State, the foreign corporation should "file with the Secretary of State of this State a certified copy of its articles of incorporation, if incorporated under a general law of such State or Territory, or a certified copy of the statute

[ 190 U.S. Page 333]

     laws of such State or Territory incorporating such company, where the charter of such railroad corporation was granted by special statute of such State; and upon the filing of such articles of incorporation or such charter, with a map and profile of the proposed line, and paying the fees prescribed by law for railroad charters, such railroad company shall, to all intents and purposes, become a railroad corporation of this State, subject to all of the laws of the State now in force or hereafter enacted, the same as if formally incorporated in this State, anything in its articles of incorporation or charter to the contrary notwithstanding, and such acts on the part of such corporation shall be conclusive evidence of the intent of such corporation to create and become a domestic corporation: And provided further, That every railroad corporation of any other State, which has heretofore leased or purchased any railroad in this State, shall, within sixty days from the passage of this act, file a duly certified copy of its articles of incorporation or charter with the Secretary of State of this State, and shall, thereupon, become a corporation of this State, anything in its articles of incorporation or charter to the contrary notwithstanding, and in all suits or proceedings instituted against any such corporation process may be served upon the agent or agents of such corporation or corporations in this State, in the same manner that process is authorized by law to be served upon the agents of railroad corporations in this State organized and existing under the laws of this State."

The railroad company, pursuant to that act, filed with the Secretary of State of the State of Arkansas a duly certified copy of its articles of incorporation under the laws of Missouri. After this had been done and while the company was operating its railroad from Monett, Missouri, to Fort Smith, Arkansas, one Etta James brought an action in the Circuit Court of the United States for the Western District of Arkansas against the company for negligence in maintaining a switch track at Monett, in Barry County, Missouri, so near its tracks that the husband of plaintiff was struck and killed ...


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