Citizens' Savings & Trust Co. v. Illinois Central Railway Co.

Last updated

Citizens' Sav. & Trust Co. v. Illinois Central R. Co.
Seal of the United States Supreme Court.svg
Argued December 3–4, 1906
Decided March 4, 1907
Full case nameCitizens' Sav. & Trust Co. v. Illinois Central R. Co.
Citations205 U.S. 46 ( more )
27 S. Ct. 425; 51 L. Ed. 703
Court membership
Chief Justice
Melville Fuller
Associate Justices
John M. Harlan  · David J. Brewer
Edward D. White  · Rufus W. Peckham
Joseph McKenna  · Oliver W. Holmes Jr.
William R. Day  · William H. Moody

Citizens' Sav. & Trust Co. v. Illinois Central R. Co., 205 U.S. 46 (1907), was a suit brought in the United States District Court for the Eastern District of Illinois against the Illinois Central Railroad Company, the Belleville & Southern Illinois Railroad Company, the St. Louis, Alton & Terre Haute Railroad Company (205 U.S. 46, 47), all Illinois corporations (to be hereafter called, respectively, the Illinois, the Belleville, and Terre Haute companies), and the United States Trust Company, a New York corporation. The last named corporation was never served with process and did not appear in the suit. [1] The case presents a question as to the jurisdiction of the court below.

Contents

Arguments and rulings

The plaintiff, an Ohio corporation, was the holder of 400 shares of the common stock of the Belleville company, and sued on its own and on behalf of all other stockholders of that company.

The bill charged that certain deeds were illegally and fraudulently procured by the Illinois Central Railroad Company, and by means of those instruments, and by various improper schemes, it had acquired not only complete control over and possession of the Belleville company and all its properties, but managed those properties in its own interest and in total disregard of the rights of holders of the common stock of the Belleville company. It was charged that the Illinois Central Railroad Company had practically destroyed the value of such stock.

The plaintiff also asked for a decree ordering the defendant, the Illinois Central Railroad Company, to account for and pay over to the Belleville company, or to a receiver to be appointed for that company, such proportion of the yearly gross earnings as the Belleville company is entitled to under the lease executed by and between the Belleville company and the Terre Haute Railroad Company, bearing date October 1, 1866; such accounting to cover each fiscal year, or part thereof, from the time when the Illinois Central Railroad Company first acquired the railroad properties of the Belleville company as lessee or sublessee under the lease executed on or about the 1st of April, 1896, up to the time of such accounting; further, for 'an order appointing a receiver for the Belleville & Southern Illinois Railroad Company, with the usual powers of such receivers; and that the Illinois Central Railroad Company, through its officers and agents, be ordered to surrender and deliver to said receiver all the corporate assets (205 U.S. 46, 49), books, papers, and everything that rightfully belongs to the Belleville & Southern Illinois Railroad Company, and that the Illinois Central Railroad, Company be ordered to account to such receiver, as is hereinbefore prayed. That the defendant, the Illinois Central Railroad Company, its officers and agents, be restrained from further violating the rights of your orator, and be ordered, directed, and restrained in particular from interfering in any way with said receiver, or with the operation of said Belleville company as an independent and separate railroad company; and for such other and further relief as the equity of the case may require.'

The Belleville company pleaded under protest that the court below was without jurisdiction to proceed against it, in that the defendant was an inhabitant of the northern division of the northern district of Illinois, having its residence in that division and district at Chicago, where its corporate meetings were held and its corporate business transacted.

By its final order the court sustained the pleas to the jurisdiction, and dismissed the suit. (205 U.S. 46, 50) Messrs. Edward C. Eliot and William B. Sanders for appellant.

The plaintiff contends that this condition was waived, and the general appearance of the defendants entered, when their counsel, at the hearing as to the sufficiency of the pleas to the jurisdiction, argued the merits of the case as disclosed by the bill. This is too harsh an interpretation of what occurred in the court below. There was no motion for the dismissal of the bill for want of equity. The discussion of the merits was permitted or invited by the court in order that it might be informed on that question in the event it concluded to consider the merits along with the question of the sufficiency of the pleas to the jurisdiction. We are satisfied that the defendants did not intend to waive the benefit of their qualified appearance at the time of filing the pleas to the jurisdiction.

The high court found that the suit was of such a nature as to bring it within the jurisdiction of the circuit court for the eastern district, under the Jurisdiction and Removal Act of 1875. The judgment must was reversed and the cause remanded, that the plaintiff may proceed, as it may be advised, with the preparation of its case under the act of 1875

It was so ordered.

See also

Related Research Articles

In law as practiced in countries that follow the English models, a pleading is a formal written statement of one party's claims or defenses in response to another party's complaint(s) in a civil action. The parties' pleadings in a case define the issues to be adjudicated in the action.

Santa Clara County v. Southern Pacific Railroad Company, 118 U.S. 394 (1886), is a corporate law case of the United States Supreme Court concerning taxation of railroad properties. The case is most notable for a headnote stating that the Equal Protection Clause of the Fourteenth Amendment grants constitutional protections to corporations.

<span class="mw-page-title-main">Diversity jurisdiction</span> U.S. court jurisdiction over persons of different states or nationalities

In the law of the United States, diversity jurisdiction is a form of subject-matter jurisdiction that gives United States federal courts the power to hear lawsuits that do not involve a federal question. For a federal court to have diversity jurisdiction over a lawsuit, two conditions must be met. First, there must be "diversity of citizenship" between the parties, meaning the plaintiffs must be citizens of different U.S. states than the defendants. Second, the lawsuit's "amount in controversy" must be more than $75,000. If a lawsuit does not meet these two conditions, federal courts will normally lack the jurisdiction to hear it unless it involves a federal question, and the lawsuit would need to be heard in state court instead.

Forum non conveniens (FNC) is a mostly common law legal doctrine through which a court acknowledges that another forum or court where the case might have been brought is a more appropriate venue for a legal case, and transfers the case to such a forum. A change of venue might be ordered, for example, to transfer a case to a jurisdiction within which an accident or incident underlying the litigation occurred and where all the witnesses reside.

<span class="mw-page-title-main">Federal question jurisdiction</span> Type of U.S. court subject-matter jurisdiction

In United States law, federal question jurisdiction is a type of subject-matter jurisdiction that gives United States federal courts the power to hear civil cases where the plaintiff alleges a violation of the United States Constitution, federal law, or a treaty to which the United States is a party. The federal question jurisdiction statute is codified at 28 U.S.C. § 1331.

Louisville & Nashville Railroad Company v. Mottley, 211 U.S. 149 (1908), was a United States Supreme Court decision that held that under the existing statutory scheme, federal question jurisdiction could not be predicated on a plaintiff's anticipation that the defendant would raise a federal statute as a defense. Instead, such jurisdiction can only arise from a complaint by the plaintiff that the defendant has directly violated some provision of the Constitution, laws, or treaties of the United States. This reading of the federal question jurisdiction statute is now known as the well-pleaded complaint rule.

International Shoe Co. v. Washington, 326 U.S. 310 (1945), was a landmark decision of the Supreme Court of the United States in which the Court held that a party, particularly a corporation, may be subject to the jurisdiction of a state court if it has "minimum contacts" with that state. The ruling has important consequences for corporations involved in interstate commerce, their payments to state unemployment compensation funds, limits on the power of states imposed by the Due Process Clause of the Fourteenth Amendment, the sufficiency of service of process, and, especially, personal jurisdiction.

A non-suit or nonsuit is a legal procedure. A plaintiff drops his or her suit, under certain circumstances that do not prevent another action being brought later on the same facts.

American Well Works Co. v. Layne & Bowler Co., 241 U.S. 257 (1916), was a United States Supreme Court case governing the scope of federal question jurisdiction.

World-Wide Volkswagen Corp v. Woodson, 444 U.S. 286 (1980), is a United States Supreme Court case involving strict products liability, personal injury and various procedural issues and considerations. The 1980 opinion, written by Justice Byron White, is included in the first-year civil procedure curriculum at nearly every American law school for its focus on personal jurisdiction.

Caterpillar Inc. v. Lewis, 519 U.S. 61 (1996), held that federal jurisdiction predicated on diversity of citizenship can be sustained even if there did not exist complete diversity at the time of removal to federal court, so long as complete diversity exists at the time the district court enters judgment.

Chicago & Northwestern R. Co. v. Crane, 113 U.S. 424 (1885), was a suit brought by a taxpayer and resident in the Town of Polk City, Iowa, on behalf of himself and all other resident voters, taxpayers and property holders, commenced suit in a state court of Iowa against two companies, praying for a peremptory writ of mandamus to compel the reconstruction and operation of the old line after the Chicago and North Western Railway, an Illinois corporation. changed the line and made it avoid the city, constructing a branch to the latter. C&NW Railway was leased the line by the D&M Railroad Company, an Iowa Corporation, who had received from a township in Iowa, in consideration of its agreement to construct and maintain a railroad to a city in the township, the proceeds of a special tax and a conveyance of a large amount of swamp lands. It constructed the railroad and operating it for a time before leasing it to C&N Railway.

Chase v. Curtis, 113 U.S. 452 (1885), was a suit brought under the provisions of §12 of the Act of the Legislature of New York of February 17, 1848, as amended June 7, 1875, where trustees of corporations formed for manufacturing, mining, mechanical, or chemical purposes are made liable for debts of the company on failure to file the reports of capital and of debts required by that section, is penal in its character, and must be construed with strictness as against those sought to be subjected to its liabilities. Suit was brought to recover from the trustees of such a corporation the amount of a judgment against the corporation, the judgment roll is not competent evidence to establish a debt due from the corporation to the plaintiff.

A claim in tort against a corporation formed under that act, as amended, is not a debt of the company for which the trustees may become liable jointly and severally under the provisions of the Act. In a proceeding to enforce a liability created by a state statute, the courts of the United States give to a judgment of a state court the same effect, either as evidence or as cause of action, which is given to it in like proceedings in the courts of the state whose laws are invoked in the enforcement.

The complaint in this action, after alleging that the plaintiff in error was a citizen of Pennsylvania, and the defendants citizens of New York, proceeded as follows:

"Wherefore the plaintiffs demand judgment against the above-named defendants in the sum of $40,828.97, with interest on $40,500.00 from the 30th day of July, 1874, and on $328.97 from the 3d day of October, 1874, besides the costs and disbursements of this action."

To this complaint the defendants severally demurred on the ground that it did not state facts sufficient to constitute a cause of action. The demurrer was sustained and judgment rendered in favor of the defendants dismissing the complaint, to reverse which this writ of error is prosecuted.

The statute on which the action is founded is as follows:

"SECTION 1. The twelfth section of the 'Act to authorize the formation of corporations for manufacturing, mining, mechanical, or chemical purposes,' passed February 17, 1848, as said section was amended by chapter 657 of the Laws of 1871, is hereby further amended, so that section 12 shall read as follows:"

"§ 12. Every such company shall, within twenty days from the first day of January, if a year from the time of the filing of the certificate of incorporation shall then have expired, and if so long a time shall not have expired, then within twenty days from the first day of January in each year after the expiration of a year from the time of filing such certificate, make a report, which shall be published in some newspaper published in the town, city, or village, or, if there be no newspaper published in said town, city, or village, then in some newspaper published nearest the place where the business of the company is carried on, which shall state the amount of capital, and of the proportion actually paid in, and the amount of its existing debts, which report shall be signed by the president and a majority of the trustees, and shall be verified by the oath of the president or secretary of said company, and filed in the office of the clerk of the county where the business of the company shall be carried on, and if any of said companies shall fail so to do, all the trustees of the company shall be jointly and severally liable for all the debts of the company then existing, and for all that shall be contracted before such report shall be made. But whenever under this section a judgment shall be recovered against a trustee severally, all the trustees of the company shall contribute a ratable share of the amount paid by such trustee on such judgment, and such trustee shall have a right of action against his co-trustees, jointly or severally, to recover from them their proportion of the amount so paid on such judgment, provided that nothing in this act contained shall affect any action now pending.

It is finally insisted that a judgment against the corporation, although founded upon a tort, becomes ipso facto a debt by contract, being a contract of record or a specialty in the nature of a contract. But we have already seen that the settled course of decision in the New York Court of Appeals rejects the judgment against the corporation as either evidence or ground of liability against the trustees, and founds the latter upon the obligation of the corporation on which the judgment itself rests. And it was decided by this Court in the case of Louisiana v. New Orleans, 109 U. S. 285, that a liability for a tort, created by statute, although reduced to judgment by a recovery for the damages suffered, did not thereby become a debt by contract in the sense of the Constitution of the United States forbidding state legislation impairing its obligation, for the reason that the term 'contract' is used in the Constitution in its ordinary sense as signifying the agreement of two or more minds, for considerations proceeding from one to the other, to do or not to do certain acts. Mutual assent to its terms is of its very essence."

The same definition applies in the present instance, and excludes the liability of the defendants, as trustees of the corporation, for its torts, although reduced to judgment.

The court found no error in the judgment of the circuit court, and it was accordingly affirmed.

Union Pacific Railway Co. v. Cheyenne, 113 U.S. 516 (1885), was an appeal from the Supreme Court of the Territory of Wyoming regarding a bill charging that the collection of an illegal tax would involve the plaintiff in a multiplicity of suits as to the title of lots being laid out and sold, which would prevent their sale, and which would cloud the title to all his real estate, states a case for relief in equity.

Perkins v. Benguet Mining Co., 342 U.S. 437 (1952), was a United States Supreme Court case which held that an Ohio state court could exercise general personal jurisdiction over a foreign corporation on the basis of that company's "continuous and systematic" contacts with the state of Ohio. Benguet Consolidated Mining Co. was a Philippine mining corporation, owned by American John W. Hausermann, that temporarily stopped its mining operations and relocated its president to Ohio during the World War II Japanese occupation of the Philippines. The Court held that the president's use of his office in Ohio to carry on continuous business activities during this period allowed Ohio to properly assert general jurisdiction over his company.

The Virginia Circuit Courts are the state trial courts of general jurisdiction in the Commonwealth of Virginia. The Circuit Courts have jurisdiction to hear civil and criminal cases. For civil cases, the courts have authority to try cases with an amount in controversy of more than $4,500 and have exclusive original jurisdiction over claims for more than $25,000. In criminal matters, the Circuit Courts are the trial courts for all felony charges and for misdemeanors originally charged there. The Circuit Courts also have appellate jurisdiction for any case from the Virginia General District Courts claiming more than $50, which are tried de novo in the Circuit Courts.

American Electric Power Company v. Connecticut, 564 U.S. 410 (2011), was a United States Supreme Court case in which the Court, in an 8–0 decision, held that corporations cannot be sued for greenhouse gas emissions (GHGs) under federal common law, primarily because the Clean Air Act (CAA) delegates the management of carbon dioxide and other GHG emissions to the Environmental Protection Agency (EPA). Brought to court in July 2004 in the Southern District of New York, this was the first global warming case based on a public nuisance claim.

<span class="mw-page-title-main">Arnstein & Lehr</span> American law firm

Arnstein & Lehr was a national law firm founded in Chicago in 1893, with offices in Chicago, and Springfield, Illinois; Milwaukee, Wisconsin; Boca Raton, Fort Lauderdale, Miami, Tampa, and West Palm Beach, Florida. The firm represented business enterprises in significant legal victories in the United States and Puerto Rico. Its representation of Sears, Roebuck and Co. since 1895 is one of the country's longest continuous attorney-client relationships. On September 1, 2017, Arnstein & Lehr, LLP combined with Saul Ewing to form Saul Ewing Arnstein & Lehr, LLP with 14 offices and over 400 attorneys.

Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco County, 582 U.S. ___ (2017), was a United States Supreme Court case in which the Court held that California courts lacked personal jurisdiction over the defendant on claims brought by plaintiffs who are not California residents and did not suffer their alleged injury in California. It is part of a group of six cases decided since 2011 that have greatly changed the application of personal jurisdiction.

TC Heartland LLC v. Kraft Foods Group Brands LLC, 581 U.S. ___ (2017), was a United States Supreme Court case concerning the venue in patent infringement lawsuits.

References

  1. Citizens' Sav. & Trust Co. v. Illinois Central R. Co., 205 U.S. 46 (1907).