Kranshaar v. New Haven Steamboat Co.

7 Rob. 356
CourtThe Superior Court of New York City
DecidedApril 15, 1868
StatusPublished
Cited by11 cases

This text of 7 Rob. 356 (Kranshaar v. New Haven Steamboat Co.) is published on Counsel Stack Legal Research, covering The Superior Court of New York City primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kranshaar v. New Haven Steamboat Co., 7 Rob. 356 (N.Y. Super. Ct. 1868).

Opinion

By the Court, Monell, J.

The judiciary act of the United States provides for the removal into the Circuit Court of the United States, of an action brought in a state court, by a citizen of one state, against a citizen of another state, and the citizenship of the defendants is the only question to be determined in this case; which question must be decided upon the weight or preponderance of [369]*369judicial decision. It is not a new question which we can examine upon principle and determine by reason. It has engaged the attention of the courts, more or less for over half a century, and ought by this time to .be considered as settled.

I propose to examine the different decisions which have been made, and endeavor, as far as possible, to ascertain on»which side of the question the weight of decision lies, and determine this appeal accordingly.

Commencing with the 'earliest cases, (Strawbridge v. Curtiss, 3 Cranch, 267; The Hope Ins. Co. v. Boardman, 5 id. 57, and Bank of U. S. v. Deveaux, Id. 61,) we find the Supreme Court of the United States to have decided that a corporation aggregate cannot, in its corporate capacity, be a citizen. In the latter case Chief Justice Marshall used this language: That invisible, intangible, and artificial being, that mere legal entity, a corporation aggregate, is certainly not a citizen ; and consequently cannot sue or be sued in the courts of the United States, unless the rights of the members in this respect can be exercised in their corporate name. If the corporation be considered as a. mere faculty, and not as a company of individuals who in transacting their joint concerns may use a legal name, they must be excluded from the courts of the union.”

These cases were followed by Bank of Vicksburg v. Slocum, (14 Peters, 60,) where it was held that the artificial being, a corporation aggregate, was not, as such, a citizen of the United States, yet the courts of the United States would look beyond the mere corporate character, to the individuals of whom it was composed; and if they were citizens of a state different from that in which the party sued resided, they were competent to sue in the courts of the United States, but that all the corporators must be [370]*370citizens of a state different from that in which the party sued resided.

The next case in the federal court, is The Louisville Railroad Co. v. Letson, (2 How. 497,) where the question was very elaborately discussed and carefully examined. The action was brought by Letson against the railroad company, in the Circuit Court of the United States for the district of South Carolina. The defendants filed a plea to the jurisdiction of the court, to which plea there was a general demurrer. The objections raised to the jurisdiction were several, among them, and that is the only one necessary to notice, was, that a citizen of one state cannot sue a corporation in the Circuit Court of the United States in another state, unless all the members of the corporation sued are citizens of the state in which the suit is brought. The opinion of the court was delivered by Justice Wayne, and so much of the decision in Bank of Vicksburg v. Slocum, (supra,) as held that all the corpora-tors must be citizens of a state different from that in which the party sued resided, was overruled. That learned justice says: “A suit brought by a citizen of one state against a corporation by its corporate name, in the state of its locality, by which it was created, and where its business is done, by any of the corporators who are chosen to manage its affairs, is a suit, so far as jurisdiction is concerned, between citizens^ of the state where the suit is brought, and a citizen of another state. The corporators, as individuals, are not defendants in the suit, but they are parties having an interest in the result, and some of them being citizens of the state where the suit is. brought, jurisdiction attaches over the corporation, nor can we see how it can be defeated by some of the members who cannot be sued, residing in a different state.” And farther on, he says ; “ A corporation created by and doing business in a particular state, is to be deemed to all intents and pur[371]*371poses a person, although an artificial person, an inhabitant of the same state, for the purposes of its incorporation, capable of being treated as a citizen of that state, as much as a natural person.” The point, and the only point decided by this case, was, that the Circuit Court of the United States had jurisdiction in an action against a corporation in the state in which it was created, notwithstanding some of the corporators were not citizens of such state. As a decision, however, it is somewhat weakened by the want of unanimity in the court which made it. In the' subsequent case of Rundle v. Delaware and Raritan Canal Co., (14 How. 80,) two if not three of the judges entirely dissented. Two wrote opinions. Mr. Justice Daniel, in an able review of the cases, and particularly of the cases of Bank of the United States v. Deveaux, and of the Louisville and Cincinnati R. R. Co. v. Letson, and in an abler argument founded on reason and principle, entirely rejected the idea that a corporation was a citizen, within the meaning of the constitution of the United States or the act of congress, and after an elaborate and searching examination of the whole subject, came to these conclusions: “1st. That by no sound or reasonable interpretation, can a corporation—a mere faculty in law—be transformed into a citizen, or treated as a citizen. And' 2d. That the second section of the third article of the constitution, investing the courts of the United States with jurisdiction in controversies between citizens of different states, cannot be made to embrace controversies to which corporations and not citizens are parties, and that the assumption by these courts of jurisdiction in such cases, must involve a palpable infraction of the article and section just referred to.” Mr. Justice Catron, who also wrote an opinion, explained his understanding of. the Letson case; namely, that if the president and directors are citizens of the state where the corporation was. ere[372]*372ated, and the other party to the suit is a citizen of a different state, then the courts of the United States can exercise jurisdiction under the third article of the constitution.

The next case in order is Marshall v. Baltimore and Ohio Railroad Company, (16 How. 314,) which was brought in the Circuit Court of the United States for the district of' Maryland. The declaration alleged that the defendant “ is a body corporate by an act of the general assembly of Maryland.” Mr. Justice Grier, delivered the opinion of the court, fully sustaining and distinctly recognizing the Letson case as the settled law of the court. But here again three justices, (Catron, Daniel and Campbell,) dissented. Justice Catron said he had at all times denied that a corporation is a citizen within the sense of the constitution. Justices Daniel and Campbell each delivered elaborately prepared opinions. •

The question was again presented in The Covington Drawbridge Company v. Shepherd, (20 How. 227,) where the Letson case was again recognized as the settled law of the court. Justices Campbell and Daniel again dissenting.

The last case I am aware of, is

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Bluebook (online)
7 Rob. 356, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kranshaar-v-new-haven-steamboat-co-nysuperctnyc-1868.