Orange Nat. Bank v. Traver

7 F. 146, 7 Sawy. 210, 1881 U.S. App. LEXIS 2197
United States Circuit Court·Decided May 16, 1881·Published·Cited by 3 cases

Opinion

Deady, D. J.

On December 21, 1877, the defendants, George W. Traver and Emma S., his wife, made their two joint and several promissory notes at Portland for the sum of $600 each, payable, with interest at the rate of 3J per centum per annum, to Johnson, Clark & Co., or order, at the [147] First National Bank, Portland,—one in 18 months and tho other 24 months after date. Each of the notes contained tho following stipulation:

“ This obligation is given for the benefit of George W. Travel- and Emma S. Travel-, and taken on the credit of the separate estate of Emma S. Travel- and the property of George W. Travel-.”

Before maturity the notes passed by indorsement into the hands of the plaintiff, who brought this suit in the state circuit court against the husband and wife to subject certain real property, situated in this city and county, and now, and at the date of said notes, belonging to the latter “as her own statutory separate property,” to tho payment of the amount due thereon, alleging the insolvency of the husband. The defendants appeared and answered separately, and then caused the suit to be removed to this court. The answer of the wife, among other things, contains the following defence:

That llie defendant, at tho date of said notes, was the wife of her co-defendant, George W. Travel-, and signed them “as surety for husband only;” that no part of the consideration thereof was paid to her, or enured to her benefit, or that of her estate; that said notes were given for a pre-existing indebtedness incurred, “ in part at least,” prior to her marriage with said Travel-.

To this defence the plaintiff demurs for insufficiency. Upon the argument of this demurrer, the question was also made and submitted by counsel:

Can the plaintiff maintain this suit without having first complied with sections 8 and 9 of the act of October 24,1804, (Or. Laws, 017,) concerning foreign corporations “transacting business in this state?”

Upon the argument of a demurrer, the court will, notwithing the insufficiency of the pleading demurred to, give judgment against the party whose pleading is first defective in substance, (1 Chit. Plead. 707;) and as it does not appear from the hill that the plaintiff has complied with such act, the point may be considered and decided upon this demurrer to the defendant’s plea. In support of the negative of this question counsel cite In re Comstock, 3 Sawy. 218, and Semple v. Bank of B. C. 5 Sawy. 88, in which this court held that a foreign corporation is not authorized to transact business in this state without first appointing a resident agent, upon [148] whom process may be served in actions against-it, as provided in said act; and that acts done by it without such appointment are void.

But the “business” which the plaintiff is prohibited from doing in this state is that of banking, which does not, in my judgment, include the right to follow its debtor here and sue him in the courts of the state. Such an act, although strictly speaking it might be included in the phrase “transacting business in this state,” is certainly not within the mischief intended to be prevented by the statue, and therefore I do not think it ought to be so construed as to prohibit it. And such was the conclusion of this court in the case of the N. W. Mut. Life Ins. Co v. Elliot, Dec. 28, 1880.*

■Ample provision is otherwise made by the state for the protection of its citizens who may be involved in such litigation, in the provisions of its statutes requiring non-resident plaintiffs to give security for costs, and for all damages caused by an attachment or other provisional remedy before it can be allowed.

But the plaintiff, if a foreign corporation at all, is a citizen of Massachusetts, the place of its organization and business, and is therefore entitled, under the constitution and laws of the United States, to sue in this court on account of its citizenship; and this right cannot be limited or restrained by the state. Cowles v. Mercer Co. 7 Wall. 121. But whether this suit, in this respect, should now be considered as one brought in this court maybe a question; yet I think it should. Although commenced in the state court, it has been removed to this, and that by the act of the defendants, which itself is an assertion by them that the plaintiff, may lawfully sue or be sued in this court.

Again, the plaintiff is a corporation not formed under the law of any state of the union or foreign country, but under a law of the United States,—the national banking act of June 3, 18'64,—but located at Orange, Massachusetts.

It has been finally settled that a suit in a national court by or against a corporation, for the purpose of jurisdiction, is [149] to be conclusively presumed to be a suit by or against citizens of the state under whose laws such corporation was formed; and therefore it is deemed a citizen of the state which created it. O. &. M. Ry. Co. v. Wheeler, 1 Black, 295; Cowles v. Mercer Co. 7 Wall. 121. Strictly speaking, then, the plaintiff is a citizen of the United States, but not of any state. Still, the plaintiff, though organized under a law of the United States, is by such organization and law “located” in the state of Massachusetts, and by a parity of reasoning its stockholders may he presumed to be citizens of said state, and the corporation be entitled to sue and be sued as a citizen of Massachusetts. This is the conclusion reached by Mr. Justice Blatchford, after a thorough investigation of the subject, in the Manuf’rs N. B. of Chicago v. Black, 8 Batchf. 137. And, doubtless, the plaintiff is a foreign corporation, within the mischief sought to bo remedied by the act of October 24-, 1864, supra, and if it is held to be a citizen of Massachusetts it must be so regarded.

But, admitting this, I do not think the local statute should bo construed so as to prevent a foreign corporation from maintaining a suit in the state court, and it is very clear that the state cannot prevent such corporation from maintaining a suit in this court. Upon the showing in the bill the plaintiff is entitled to sue in this or the state court. As these contracts were made in 1877, the act of October 21,1880, (Sess. Law's, 6, entitled “An act to establish and protect the rights of married women,”) 'which is supposed to have altogether relieved the wife from the “disabilities” or protection, as the case may bo, of coverture, does not affect this case. By marriage, at common law, the property of the wife became that of the husband—the personalty absolutely, and the realty during the marriage. But, in time, the doctrine was established in equity that the wife could hold property to her separate use and benefit, and this has, in effect, become the fundamental law of this state. Or. Const, art. 15, § 5. With the capacity to acquire and hold property to her separate use, she was allowed to have the power to dispose of the same as if she -were unmarried, unless the instrument or means [150] whereby she acquired the title provided otherwise. Yale v. Dederer, 18 N. Y. 265.

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Orange Nat. Bank v. Traver, 7 F. 146, 7 Sawy. 210, 1881 U.S. App. LEXIS 2197 (uscirct 1881).

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