Barrow Company v. Kane/Opinion of the Court

by Horace Gray

United States Supreme Court

170 U.S. 100

Barrow Company  v.  Kane

This action was brought in the circuit court of the United States for the Southern district of New York against the Barrow Steamship Company, by a passenger on one of its steamships on a voyage from Londonderry, in Ireland, to the city of New York, for an assault upon him by its agents in the port of Londonderry. The certificate of the circuit court of appeals shows that the plaintiff is a citizen and resident of the state of New Jersey; that the defendant is a corporation organized and incorporated under the laws of the United Kingdom of Great Britain and Ireland, and a common carrier running a line of steamships from ports in that kingdom to the port of New York, and does business in the state of New York, through a mercantile firm, its regularly appointed agents, and upon whom the summons in this action was served.

It was contended in behalf of the steamship company that, being a foreign corporation, no suit could be maintained against it in personam in this country without its consent, express or implied; that by doing business in the state of New York it consented to be sued only as authorized by the statutes of the state; that the jurisdiction of the courts of the United States held within the state depended on the authority given by those statutes; that the statutes of New York conferred no authority upon any court to issue process against a foreign corporation in an action by a nonresident, and for a cause not arising within the state; and, therefore, that the circuit court acquired no jurisdiction of this action brought against a British corporation by a citizen and resident of New Jersey.

The constant tendency of judicial decisions in modern times has been in the direction of putting corporations upon the same footing as natural persons, in regard to the jurisdiction of suits by or against them.

By the constitution of the United States, the judicial power, so far as depending upon citizenship of parties, was declared to extend to controversies 'between citizens of different states,' and to those between 'citizens' of a state and foreign 'citizens or subjects.' And congress, by the judiciary act of 1789, in defining the original jurisdiction of the circuit courts of the United States, described each party to such a controversy, either as 'a citizen' of a state, or as 'an alien.' Act Sept. 24, 1789, c. 20, § 11 (1 Stat. 78); Rev. St. § 629. Yet the words 'citizens' and 'aliens,' in these provisions of the constitution and of the judiciary act, have always been held by this court to include corporations.

The jurisdiction of the circuit courts over suits between a citizen of one state and a corporation of another state was at first maintained upon the theory that the persons composing the corporation were suing or being sued in its name, and upon the presumption of fact that all those persons were citizens of the state by which the corporation had been created, but that this presumption might be rebutted by plea and proof and the jurisdiction thereby defeated. Bank v. Deveaux, 5 Cranch, 61, 87, 88; Insurance Co. v. Boardman, Id. 57; Bank v. Slocomb, 14 Pet. 60.

But the earlier cases were afterwards overruled, and it has become the settled law of this court that, for the purposes of suing and being sued in the courts of the United States, a corporation created by, and doing business in, a state, is, although an artificial person, to be considered as a citizen of the state, as much as a natural person; and there is a conclusive presumption of law that the persons composing the corporation are citizens of the same state with the corporation. Railroad Co. v. Letson, 2 How. 497, 558; Marshall v. Railroad Co., 16 How. 314, 329; Muller v. Dows, 94 U.S. 444; Steamship Co. v. Tugman, 106 U.S. 118, 1 Sup. Ct. 58; Railway Co. v. James, 161 U.S. 545, 555-559, 16 Sup. Ct. 621.

In Bank v. Earle, 13 Pet. 519, decided before the case of Bank v. Deveaux, above cited, had been overruled, and while that case was still recognized as authority for the principle that in a question of jurisdiction the court might look to the character of the persons composing a corporation, Chief Justice Taney, in delivering judgment, said that the principle had 'never been supposed to txtend to contracts made by a corporation, especially in another sovereignty,' but that, 'whenever a corporation makes a contract, it is the contract of the legal entity, of the artificial being created by the charter, and not the contract of the individual mambers.' Id. 586, 587.

In Bank v. Earle it was adjudged that a corporation created by one state, and acting within the scope of its charter, might do business and make contracts in another state, when permitted to do so by the laws thereof, and might sue upon such contracts in the courts of that state. As was said in the opinion: 'It is sufficient that its existence, as an artificial person, in the state of its creation, is acknowledged and recognized by the law of the nation where the dealing takes place, and that it is permitted by the laws of that place to exercise there the powers with which it is endowed.' 13 Pet. 589. And it was declared to be well settled that, by the law of comity among nations prevailing among the several states of the Union, 'a corporation created by one sovereignty is permitted to make contracts in another, and to sue in its courts,' except as to contracts repugnant to its own policy. Id. 592.

The manifest injustice which would ensue if a foreign corporai on, permitted by a state to do business therein, and to bring suits in its courts, could not be sued in those courts, and thus, while allowed the benefits, be exempt from the burdens, of the laws of the state, has induced many states to provide by statute that a foreign corporation making contracts within the state shall appoint an agent residing therein, upon whom process may be served in actions upon such contracts. This court has often held that, wherever such a statute exists, service upon an agent so appointed is sufficient to support jurisdiction of an action against the foreign corporation, either in the courts of the state, or, when consistent with the acts of congress, in the courts of the United States held within the state; but it has never held the existence of such a statute to be essential to the jurisdiction of the circuit courts of the United States. Insurance Co. v. French, 18 How. 404; Ex parte Schollenberger, 96 U.S. 369; Insurance Co. v. Woodworth, 111 U.S. 138, 146, 4 Sup. Ct. 364; Shaw v. Mining Co., 145 U.S. 444, 452, 12 Sup. Ct. 935.

In Insurance Co. v. French the court said: 'We limit our decision to the case of a corporation acting in a state foreign to its creation, under a law of that state which recognized its existence, for the purposes of making contracts there and being sued on them, through notice to its contracting agents.' But it was cautiously added: 'The case of natural persons, or of other foreign corporations, is attended with other considerations, which might or might not distinguish it. Upon this we give no opinion.' 18 How. 408, 409.

The liability of a foreign corporation to be sued in a particular jurisdiction need not be distinctly expressed in the statutes of that jurisdiction, but may be implied from a grant of authority in those statutes to carry on its business there.

Accordingly, in Railroad Co. v. Harris, 12 Wall. 65, the Baltimore & Ohio Railroad Company, a corporation chartered by the state of Maryland, and authorized by the statutes of the state of Virginia to extend its railroad into that state, and also by the act of congress of March 2, 1831, c. 85 (4 Stat. 476), to extend, construct, and use a lateral branch of its railroad into and within the District of Columbia, and to exercise the same powers, rights, and privileges, and be subject to the same restrictions in regard thereto, as provided in its charter, was held, by reason of the act of congress, and of service upon its president in the District of Columbia, to be liable to an action in the District by a passenger for an injury happening in the state of Virginia, although the railroad company was a corporation of the state of Maryland only and neither the act of congress authorizing it to construct and use a branch railroad in the District of Columbia, nor any other act of congress, had made any provision for bringing suits against foreign corporations; the action having been brought before the passage of the act of February 22, 1867, c. 64, § 11 (14 Stat. 404); Rev. St. D. C. § 790. Mr. Justice Swayne, in delivering judgment, said: 'If the therory maintained by the counsel for the plaintiff in error be correct, however large or small the cause of action, and whether it were a proper one for legal or equitable cognizance, there could be no legal redress short of the seat of the company in another state. In many instances the cost of the remedy would have largely exceeded the value of its fruits. In suits local in their character, both at law and in equity, there could be no relief. The result would be, to a large extent, immunity from all legal responsibility. It is not be supposed that congress intended that the important powers and privileges granted should be followed by such results. But turning our attention from this view of the subject, and looking at the statute alone, and reading it by its own light, we entertain no doubt that it made the company liable to suit, where this suit was brought, in all respects as if it had be n an independent corporation of the same locality.' Id. 83, 84.

In that case, it is to be observed, the cause of action arose neither in the state of Maryland, where the defendant was incorporated, nor in the District of Columbia, where the action was brought, but in the state of Virginia. The decision, in principle and in effect, fect, recognizes that a corporation of one state, lawfully doing business in another state, and summoned in an action in the latter state by service upon its principal officer therein, is subject to the jurisdiction of the court in which the action is brought.

In England, the right of a foreign corporation doing business in England to sue in the English courts was long ago recognized; and its liability to be subjected to suit in those courts, by service made upon one of its principal officers residing and representing it within the realm, has been fully established by recent decisions. Newby v. Von Oppen, L. R. 7 Q. B. 293; Haggin v. Comptoir d'Escompte de Paris, 23 Q. B. Div. 519.

In the courts of several states of the Union, the like view has prevailed. Libbey v. Hodgdon, 9 N. H. 394; March v. Railroad Co., 40 N. H. 548, 579; Day v. Bank, 13 Vt. 97; Moulin v. Insurance Co., 25 N. J. Law. 57; Bushel v. Insurance Co., 15 Serg. & R. 173; Railroad Co. v. Akers, 4 Kan. 453, 469; Council Bluffs Canning Co. v. Omaha Tinware Mfg. Co., 49 Neb. 537, 68 N. W. 929. The courts of New York and Massachusetts, indeed, have declined to take jurisdiction of suits against foreign corporations, except so far as it has been expressly conferred by statutes of the state. McQueen v. Manufacturing Co., 16 Johns. 5; Robinson v. Navigation Co., 112 N. Y. 315, 19 N. E. 625; Desper v. Meter Co., 137 Mass. 252. But the jurisdiction of the circuit courts of the United States is not created by, and does not depend upon, the statutes of the several states.

In the circuit courts of the United State, there have been conflicting opinions; but the most satisfactory ones are those of Judge Drummond and Judge Lowell, in favor of the liability of foreign corporations to be sued. Packing Co. v. Hunter, 8 Biss. 429, Fed. Cas. No. 17,852; Hayden v. Androscoggin Mills, 1 Fed. 93.

In Insurance Co. v. French, above cited, this court, speaking by Mr. Justice Curtis, after saying that a corporation created by one state could transact business in another state only with the consent, express or implied, of the latter state, and that this consent might be accompanied by such conditions as the latter state might think fit to impose, defined the limits of its power in this respect by adding, 'and these conditions must be deemed valid and effectual by other states, and by this court, provided they are not repugnant to the constitution or laws of the United States, or inconsistent with those rules of public law whih secure the jurisdiction and authority of each state from encroachment by all others, or that principle of natural justice which forbids condemnation without opportunity for defense.' 18 How. 407.

The object of the provisions of the constitution and statutes of the United States in conferring upon the circuit courts of the United States jurisdiction of controversies between citizens of different States of the Union, or between citizens of one of the states and aliens, was to secure a tribunal presumed to be more impartial than a court of the state in which one of the litigants resides.

The jurisdiction so conferred upon the national courts cannot be abridged or impaired by any statute of a state. Hyde v. Stone, 20 How, 170, 175; Smyth v. Ames, 169 U.S. 466, 516, 18 Sup. Ct. 418. It has therefore been decided that a statute which requires all actions against a county to be brought in the county court does not prevent the circuit court of the United States from taking jurisdiction of such an action; Chief Justice Chase saying that 'no statute limitation of suability can defeat a jurisdiction given by the constitution.' Cowles v. Mercer Co., 7 Wal . 118, 122; Lincoln Co. v. Luning, 133 U.S. 529, 10 Sup. Ct. 363; Chicot Co. v. Sherwood, 148 U.S. 529, 13 Sup. Ct. 695. So statutes requiring foreign corporations, as a condition of being permitted to do business within the state, to stipulate not to remove into the courts of the United States suits brought against them in the courts of the state, have been adjudged to be unconstitutional and void. Insurance Co. v. Morse, 20 Wall. 445; Barron v. Burnside, 121 U.S. 186, 7 Sup. Ct. 931; Railroad Co. v. Denton, 146 U.S. 202, 13 Sup. Ct. 44.

On the other hand, upon the fundamental principle that no one shall be condemned unheard, it is well settled that in a suit against a corporation of one state, brought in a court of the United States held within another state, in which the corporation neither does business, nor has authorized any person to represent it, sevice upon one of its officers or employees found within the state will not support the jurisdiction, notwithstanding that such service is recognized as sufficient by the statutes or the judicial decisions of the state. St. Clair v. Cox, 106 U.S. 350, 1 Sup. Ct. 354; Construction Co. v. Fitzgerald, 137 U.S. 98, 106, 11 Sup. Ct. 36; Goldey v. Morning News, 156 U.S. 518, 15 Sup. Ct. 559. See, also, Railway Co. v. Pinkney, 149 U.S. 194, 13 Sup. Ct. 859.

By the existing act of congress defining the general jurisdiction of the circuit courts of the United States, those courts 'shall have original cognizance, concurrent with the courts of the several states, of all suits of a civil nature, at common law or in equity, when the matter in dispute exceeds, exclusive of interest and costs, the sum or value of two thousand dollars,' 'in which there shall be a controversy between citizens of different states,' 'or a controversy between citizens of a state and foreign states, citizens or subjects'; and, as has been adjudged by this court, the subsequent provisions of the act, as to the district in which suits must be brought, have no application to a suit against an alien or a foreign corporation, but such a person or corporation may be sued by a citizen of a state of the Union in any district in which valid service can be made upon the defendant. Act March 3, 1887, c. 373, § 1, as corrected by Act Aug. 13, 1888, c. 866, § 1 (24 Stat. 552; 25 Stat. 434); Shaw v. Mining Co., 145 U.S. 444, 453, 12 Sup. Ct. 935; In re Hohorst, 150 U.S. 653, 14 Sup. Ct. 221; Railway Co. v. Gonzales, 151 U.S. 496, 503, 14 Sup. Ct. 401; In re Keasbey & Mattison Co., 160 U.S. 221, 229, 230, 16 Sup. Ct. 273.

The present action was brought by a citizen and resident of the state of New Jersey, in a circuit court of the United States held within the state of New York, against a foreign corporation doing business in the latter state. It was for a personal tort committed abroad, such as would have been actionable if committed in the state of New York, or elsewhere in this country, and an action for which might be maintained in any circuit court of the United States which acquired jurisdiction of the defendant. Railroad Co. v. Harris, above cited; Dennick v. Railroad Co., 103 U.S. 11; Huntington v. Attrill, 146 U.S. 657, 670, 675, 13 Sup. Ct. 224; Stewart v. Railroad Co., 168 U.S. 445, 18 Sup. Ct. 105. The summons was duly served upon the regularly appointed agents of the corporation in New York. In re Hohorst, above cited. The action was within the general jurisdiction conferred by congress upon the circuit courts of the United States. The fact that the legislature of the state of New York has not seen fit to authorize like suits to be borught in its own courts by citizens and residents of other states cannot deprive such citizens of their right to invoke the jurisdiction of the national courts under the constitution and laws of the United States.

The necessary conclusion is that the circuit court had jurisdiction to try the action, and to render judgment therein against the defendant, and that the question certifie must be answered in the affirmative.

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