Page:Harvard Law Review Volume 12.djvu/371

RECENT CASES. 351 One would have thought it settled by Chicago <Sv Northwestern Ry. Co- V. Whittoit, 13 Wall. 270, that, from the point of view of federal jurisdic- tion, such a corporation is looked upon in every respect as belonging to the State within whose limits the action in question is brought. Strange as it may seem that the same stockholders are conclusively presumed in Illinois to be citizens of Illinois and in Kentucky to be citizens of Ken- tucky, this paradox is no stranger than is the conclusive presumption in any State that the shareholders in its corporations are citizens, when in fact they are not. And the proposition of Whitton's case is equally true whether the incorporation in the State where the action is brought took place at the same time as in another State, or at a subsequent time. The acts in either case were wholly distinct, and the resulting corporations are two, not one. If this is true, the defendant was a Kentucky corpora- tion so far as the present action was concerned, and the federal court had no jurisdiction. The only decision of the Supreme Court of the United States which trenches upon the theory here laid down is St. L. &* S. F. Ry. Co. v. James., 161 U. S. 545. The defendant corporation in that case was first incorporated in Missouri, and later in Arkansas. The plaintiff, too, was a citizen of Missouri, and sued upon a cause of action arising in Missouri, in the federal court sitting in Arkansas. He sued the railroad as an Arkansas corporation. The whole matter was so extreme, so palpable the subterfuge, that the court may well have hesitated. They may well have deemed it improper in such a case for a citizen of the first State to use the new incorporation as a stepping-stone to the federal courts. Stress is laid in the opinion on the fact that not only was the plaintiff a citizen of the State where the stockholders first became a body corporate, but the cause of action arose there as well. On this ground the case of Chicago &* Northwestern Ry. Co. v. Whitton, supra, is distinguished. A careful reading of the opinion reveals no intention on the part of the court to overrule a case, which is cited with approval — M. 6f C. R. R. Co. V. Alabama, 107 U. S. 581 — where the facts were similar to the principal case, the precise question was expressly discussed, and the opposite conclusion reached. The only modification of the accepted •, rule intended by the court was in a suit obviously collusive. The rule was left intact that a corporation such as the present one belongs to the second State for the purposes of actions brought by citizens of that State upon causes of action arising within its limits. RECENT CASES. Bankruptcy — Effect of National Act upon State Insolvency Laws. — The United States bankruptcy law declares that the act shall go into full force and effect upon its passage, but provides that no voluntary petition shall be filed within one month, and no involuntary petition shall be filed within four months from that time. Held, that the act superseded State insolvent laws from the date of its passage. Parnienter Mfg. Co. v. Namiltoit, 51 N. E. Rep. 529 (Mass.). The previous United States bankruptcy act of 1867 was generally construed so as to permit actions under the State insolvency laws during the period which elapsed between the passage of the law and the date when petitions could be filed. Day v, Bardwdl, 97 Mass. 246 ; Martin v. Berry, 37 Cal. 208. The different conclusion reached in the principal case was based largely upon the construction of the words.