rights, and at the same time not offend the referee. A referee to whom a case was sent informed the parties at the first sitting, that his fees would be $5 per hour, and that he would not try the case for the statutory fee. The counsel for one of the parties said he had not authority to agree to such a compensation, but would for that sitting pay as required out of his own pocket. At the next sitting the counsel said he had been directed to consent to no more than the statutory fee. The referee said his charge would be $5 per hour, and that he should hold the prevailing party for that rate, and retain his report as security. The counsel thereupon refused to go on, and moved at Special Term for the vacation of the order of reference, and the appointment of another referee, which motion was denied. An appeal has been taken to the General Term of the Common Pleas, where the case has just been argued.

The Court of Appeals has reversed the judgment of the General Term in the famous "Shaker Seed Case," White v. Miller, reported below, 7 Hun, 427. There are numerous interesting points involved in the case, but the decision of the court of last resort is based upon questions relating to the admission of evidence.

IN

NOTES OF CASES.

the case of Gunther v. Lee, 45 Md. 60, an action was brought against Lee and two other persons as joint tort-feasors. Pending the suit the plaintiff executed to Lee a release under seal, in which it was declared that it was not to prejudice or impair plaintiff's claim against the other two defendants. The release was executed in consideration of five hundred dollars, and in terms released and discharged Lee from all claims of every description for damages accruing or accrued by reason of the wrongs complained of, the plaintiff thereby acknowledging himself "to be fully paid and satisfied for all and singular the trespasses complained of" by him in the suit then pending against the defendants jointly. The court held that the release inured to the benefit of all the defendants, and was a bar to the action; and further, that the proviso in the release by which the right to recover for the same injury against the defendants other than Lee was attempted to be reserved to the plaintiff was simply void, being repugnant to the legal effect and operation of the release itself. In the decision of this case the court apply to the agreement of release the same rule as obtains when a judgment is recovered against one tort-feasor and is satisfied. In such a case no action is maintainable against the others. Livingston v. Bishop, 1 Johns. 290; Lovejoy 7. Murray, 3 Wall. 1. The rule in England goes still farther, and holds that a judgment in an action against one of two joint tort-feasors of itself, with

out satisfaction or execution, is a sufficient bar to an action against the other for the same cause. The leading cases on this subject are Brown v. Wootten, Yelv. 67; King v. Hoare, 13 M. & W. 494; Brinsmead v. Harrison, L. R., 6 C. P. 584. Sec, also, as supporting the application of the same rule to instruments of release, Lovejoy v. Murray, supra; Coke's Littleton, 232; Cocke v. Jennor, Hob. 66; Ruble v. Turner, 2 H. & Mun. 38; Gilpatrick v. Hunter, 24 Me. 18; Thurman v. Wild, 11 Ad. & El. 453. The principle is that when the plaintiff has accepted satisfaction in full for the injury done him, from whatever source it may come, he is so far affected in equity and good conscience that the law will not permit him to recover again for the same damages. And as a consideration is always implied in a release under seal, a release by deed of one joint trespasser will release all. See, also, Ellis v. Bitzer, 2 Ohio, 89; Kiffin v. Willis, 4 Mod. 380.

In the case of State to the use of Allen v. Pittsburg, etc., Railroad Co., 45 Md. 41, the action was for death by negligence, and was brought in Maryland, under the provisions of a statute which gives a right of action by the State for the use of the widow and child of a person whose death shall be caused by the wrongful act, neglect or default of another, "and the act, neglect or default is such as would, if death had not ensued, have entitled the party injured to maintain an action and recover damages in respect thereof." The defendant was a corporation operating a railroad lying partly in Pennsylvania and partly in Maryland, and was chartered by the laws of both States, and the deceased, who resided in Maryland, and was employed by it, was killed by an accident occurring in Pennsylvania. The court held that the statute did not apply to the case of a wrongful act or neglect occurring in another State, and that it was immaterial that the deceased was a citizen of Maryland at the time of his death. The ground of the decision was, that the statute in question had no extra-territorial force. In this the case accords with decisions in several of the States based

upon similar statutes. See Whitford v. Panama Railroad Co., 23 N. Y. 465, 484; Vandeventer v. N. Y. & N. H. Railroad Co., 27 Barb. 244; Crowley v. Panama Railroad Co., 30 id. 99; Woodward v. M. S. & N. I. Railroad Co., 20 Ohio St. 121; Richardson v. N. Y. C. Railroad Co., 98 Mass. 85; Needham v. G. T. Railway Co., 38 Vt. 294; G. W. Railway Co. v. Miller, 19 Mich. 305. The case of Northern Cent. Railway Co. v. Scholl, 16 Md. 331, which was claimed by plaintiff to afford a precedent for sustaining the action, was held to be distinguishable from this case, on the ground that the wrong there complained of was in violation of a right that the wrong-doer was bound to respect everywhere within the limits of the United States. But the statute in question giving a new right not merely a new remedy, acts committed in contravention of it beyond the jurisdiction of the State were not made tortious and actionable thereby. See Blake v. Midland Railway Co., 10 Eng. L. & Eq. 443.

THE CITIZENSHIP OF CORPORATIONS.

BY SAMUEL T. SPEAR, D. D.

CORPORATIONS or bodies corporate are in so

many respects analogous to natural persons, that for certain purposes they are deemed to be persons. They are known by specific names, have a local habitation within the limits of the sovereignty that created them, and may there exercise the powers and assert the rights vested in them. They can acquire, hold and dispose of property; they can make contracts; they can sue and be sued; and, though plural in membership, they can, nevertheless, act as if they were single individuals. Being created by law, they are subject to its regulation. They are aggregates of natural persons, holding such relations to each other and to the general public that a perpetual succession of many persons is legally regarded as one and the same person.

It is on the ground of these facts that a corporation, to the full extent necessary to the exercise of its powers, the maintenance of its rights, and the enforcement of its obligations, is deemed to be a citizen of the State within whose jurisdiction it has its domicile. The rights of an individual citizen are not superior to those of a corporation; and in many respects both have the same character.

How far, then, do corporations, created by and existing under the authority of State laws, possess the rights which under the Constitution of the United States belong to the citizens of the several States, and how far under this instrument are they subject to the legal responsibilities of such citizens? To ascertain and state the answer to this question, as given by the Supreme Court of the United States, is the object of this article.

1. The Constitution, in article 4, section 2, provides that "the citizens of each State shall be entitled to all privileges and immunities of citizens in the several States." Has this section any relation to corporate citizenship?

In The Bank of Augusta v. Earle, 13 Pet. 519, it was claimed by the plaintiff that the bank, being composed of citizens of the State of Georgia, was, as a corporation, entitled to the privileges and immunities of such citizens in the State of Alabama, and that this right, being based on the National Constitution, was one of which it could not be deprived by the latter State. This claim assumed that the citizenship of the individual corporators attached to the corporation itself, and, hence, that their rights as individuals, under the Constitution, were the measure and criterion of its rights. In answer to this view the court laid down the following propositions: 1. That a corporation can do no acts and make no contracts, either within or without the State which created it, except such as are authorized by its charter. 2. That the powers of a corporation, conferred by the laws of one State, can

have no operation in another State save through that comity which is part of the law of nations. 3. That though all the corporators are citizens of the State which created the corporation, the artificial being created by the charter cannot claim the rights of the corporators, as citizens of the United States, to make contracts in other States. 4. That, while a corporation can exist only within the limits of the sovereignty that created it, it may act elsewhere through agents if the laws of other countries permit. 5. That, by the law of comity among nations, corporations created by one sovereignty are permitted to make contracts in another, and to sue in its courts, and that this law prevails among the several sovereignties of this Union, subject at any time to be modified at their pleasure.

These propositions are equivalent to a rejection of the theory set up by the Bank of Augusta with reference to the constitutional clause in question. Chief Justice Taney, in stating the opinion of the court, said that the theory would "give the citizens of other States far higher and greater privileges than are enjoyed by citizens of the State itself. Besides, it would deprive every State of all control over the extent of corporate franchises proper to be granted in the State; and corporations would be chartered in one, to carry on their operations in another. It is impossible, upon any sound principle, to give such a construction to the article in question. 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 members. The only rights it can claim are the rights given to it in that charter, and not the rights which belong to its members as citizens of a State."

In Paul v. Virginia, 8 Wall. 168, the plaintiff in error claimed that a law of Virginia which required insurance companies, not incorporated under the laws of that State, before attempting to carry on business therein, to obtain a license, and make a deposit of guaranty bonds with the treasurer of the State, was in conflict with that clause of the Constitution which declares that "the citizens of each State shall be entitled to all privileges and immunities of citizens in the several States." Justice Field, in delivering the opinion of the court, said: "The term 'citizens' as then used applies only to natural persons, members of the body politic, owing allegiance to the State, not to artificial persons created by the legislature, and possessing only the attributes which the legislature has prescribed." After alluding to the language used in The Bank of Augusta v. Earle, supra, in regard to the rights of a corporation, he proceeded to say: "Having no absolute right of recognition in other States, but depending for such recognition, and the enforcement of its contracts, upon their assent, it follows as a matter of course, that such assent may be granted

upon such terms and conditions as those States may think proper to impose. They may exclude the foreign corporation entirely, they may restrict its business to particular localities, or they may exact such security for the performance of its contracts with their citizens as in their judgment will best promote the public interest. The whole matter rests in their discretion."

These cases settle the question that no right of citizenship attaches to a corporation outside of the State in which it is organized, under the clause of the Constitution which guarantees to the citizens of each State the privileges and immunities of citizens in the several States. The guaranty applies only to natural persons. A corporation is not a citizen within its meaning, and, of course, can claim no rights under it.

2. The judiciary article of the Constitution provides that the judicial power of the United States shall extend to "controversies between citizens of different States." The jurisdiction here granted depends not on the nature or subject-matter of the controversy, but on the character of the parties. They must not only be citizens, but also citizens of different States.

Congress, for the purpose of vesting this power, has provided that the Circuit Courts of the United States shall have original jurisdiction in "all suits of a civil nature at common law or in equity, where the matter in dispute, exclusive of costs, exceeds the sum or value of five hundred dollars, and * the suit is between a citizen of the State where it is brought and a citizen of another State." U. S. Rev. Stat., § 629. Are corporations citizens for the purposes of this jurisdiction?

*

This question came before the Supreme Court of the United States in 1809, in The Bank of the United States v. Deveaux et al., 5 Cranch, 61. Chief Justice Marshall, in delivering the opinion of the court, said that one of the points involved in the case was whether "a corporation, composed of citizens of one State, may sue a citizen of another State in the Federal courts." In respect to this question he said: "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." The ruling in this case was that "the capacity of a corporation aggregate to sue in" the courts of this United States "depends upon the citizenship of its members," and that the averment "must apply to the

plaintiffs as individuals, because it could not be true as applied to the corporation."

In Hope Insurance Company of Providence v. Boardman et al., 5 Cranch, 57, the court referred to the above case as having settled the question that "the right of a corporation to litigate in the courts of the United States depended upon the character (as to citizenship) of the members which compose the body corporate, and that a body corporate as such cannot be a citizen within the meaning of the Constitution." The judgment of the court below was reversed for the want of jurisdiction. In both of these cases it was held that, in order to give jurisdiction at all, it was necessary to aver the requisite citizenship of the corporators.

This continued to be the doctrine of the Supreme Court until 1844, when, in The Louisville, Cincinnati and Charleston Railroad Co. v. Leston, 2 How. 497, the whole question was subjected to a thorough examination, resulting in the adoption of a different view. Justice Wayne, in delivering the opinion of the court, said: "A suit, then, 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." The court held that the jurisdiction would still remain, though some of the members of the corporation resided in a different State. "A corporation," said Justice Wayne, "created by a State to perform its functions under the authority of that State, and only suable there, though it may have members out of the State, seems to us be a person, though an artificial one, inhabiting and belonging to that State, and therefore entitled, for the purpose of suing and being sued, to be deemed a citizen of that State." This ruling modified the ground taken in the preceding cases.

In Marshall v. The Baltimore and Ohio Railroad Company, 16 How. 314, it was held that the jurisdiction of the Circuit Courts of the United States attaches where a corporation is a party when the averment on the record shows that a citizen of one State sues a corporation created by the legislature of another State. Justice Grier, in stating the opinion of the court, said: "The persons who act under these [corporate] faculties, and use this corporate name, may justly be presumed to be resident in the State which is the necessary habitat of the corporation, and where alone they can be made subject to a suit, and should be estopped in equity from

averring a different domicile as against those who are compelled to seek them there, and can find them there and nowhere else. * * The presumption

arising from the habitat of a corporation in the place of its creation being conclusive as to the residence or citizenship of those who use the corporate name, and exercise the faculties conferred by it, the allegation that the defendants are a body corporate by the act of the General Assembly of Maryland, is a sufficient averment that the real defendants are citizens

of that State." The domicile of the corporation, according to this ruling, is a conclusive presumption as to the domicile of the corporators, for all purposes connected with the question of jurisdiction. In The Covington Drawbridge Company v. Shepherd, 20 How. 227, it was held that, "where the act creating a corporation is a public act of which the court takes judicial notice, it is sufficient to describe it as a citizen of the State by which it is so created." In The Ohio and Mississippi Railroad Company v. Wheeler, 1 Black, 286, it was decided that "a suit by or against a corporation, in its corporate capacity, is a suit by or against citizens of the State which created it," and that "no averment to the contrary will be heard to defeat the jurisdiction of the Circuit Court." In Cowles v. Mercer County, 7 Wall. 118, it was held that "a municipal corporation created by one State within its own limits may be sued in the courts of the United States by citizens of another State." In Railway Company v. Whitton, 13 Wall. 270, it was held that "although a corporation, being an artificial body created by legislative power, is not a citizen within several provisions of the Constitution, yet, when rights of action are to be enforced by or against a corporation, it will be considered as a citizen of the State where it was created, within the clause extending the judicial power of the United States to controversies "between citizens of different States."

Judge Dillon, in his Removal of Causes, p. 49, remarks that "the settled rule now is that a corporation, for all purposes of Federal jurisdiction, is conclusively considered as if it were a citizen of the State which created it, and no averment or proof as to citizenship of its members elsewhere is competent or material." Chief Justice Chase, in Cowles v. Mercer County, supra, said that this "must now be taken as the settled construction of the Constitution." The original ground of the Supreme Court was that the jurisdiction depended upon and was determined by the citizenship of the corporators, and hence that it was necessary to aver this citizenship. The ground subsequently taken, and now held, is that, for all the purposes of jurisdiction, a corporation is a citizen of the State creating it within the meaning of that clause of the Constitution which refers to "controversies between citizens of different States."

This doctrine applies not only to private corpo

rations, but also to public and municipal corporations, as cities, towns and counties. The latter, for the purpose of Federal jurisdiction, are deemed to be citizens of the State under whose laws they were organized; and as such they may sue or be sued in Federal courts, where the adverse party is a citizen of another State. This was affirmed in Cowles v. Mercer County, supra. Judge Dillon, supra, p. 50, quotes the language of Justice Grier in McCoy v. Washington County, who said "that though the metaphysical entity called a corporation may not be physically a citizen, yet the law is well settled that it may sue and be sued in the courts of the United States, because it is but the name under which a number of persons, corporators and citizens, may sue and be sued. That the defendant is a municipal corporation, and not a private one, furnishes a stronger reason why a citizen of another State should have his remedy in this court, and not in a county where the parties against whom the remedy is sought would compose the court and jury to decide their own case." "The power to contract with citizens of other States," said Chief Justice Chase in Cowles v. Mercer County, supra, "implies liability to suit by citizens of other States, and no statute limitation of liability can defeat a jurisdiction given by the Constitution."

* * *

3. Congress, in legislatively vesting the judicial power of the United States, has provided that any "final judgment, or decree, in any suit in the highest court of a State in which a decision in the suit could be had," may, in the three cases specified, but not necessary to be here repeated, "be re-examined and reversed or affirmed in the Supreme Court upon a writ of error." U. S. Rev. Stat., § 709. This right, accruing after a trial and judgment in a State court, enables either party, within the limits stated, to bring the question involved before the Supreme Court of the United States for final determination.

So, also, Congress has provided for the transfer or removal of suits from State courts to the Circuit Courts of the United States, in certain described cases, by a compliance with the method prescribed. The principal statutes relating to this subject are found in the twelfth section of the Judiciary Act of 1789, the act of July 27, 1866, the act of March 2, 1867, and the act of March 3, 1875. The first three of the above acts are, for substance, re-enacted in section 639 of the Revised Statutes of the United States. All of them, including the act of 1875, give the right of removing a suit commenced in any State court to a Circuit Court of the United States, when the amount in dispute, exclusive of costs, exceeds the sum or value of five hundred dollars, and when the controversy is between citizens of different States. The acts differ in minor details, but they all embrace these principles. In Gaines v. Fuentes et al., 2 Otto, 10, it was held that "in cases

where the judicial power of the United States can be applied only because they involve controversies between citizens of different States, it rests with Congress to determine at what time, and upon what conditions, the power may be invoked, whether originally in the Federal court, or after suit brought in the State court, and, in the latter case, at what stage of the proceedings - whether before issue or trial by removal to a Federal court, or after judgment upon appeal or writ of error." The statutes above referred to constitute a legislative expression of the wisdom of Congress on this subject.

Thus the citizens of each State may, in the cases specified, both before and after judgments in State courts, seek judicial relief in the courts of the United States. A certain class of judgments may be brought before the Supreme Court by a writ of error; and so a certain class of suits commenced in State courts may be transferred to the Circuit Courts of the Union. How do these provisions operate in relation to corporations? We wer this question by giving a single illustration.

In Morse v. The Home Insurance Co., 30 Wis. 496, it was held by the Supreme Court of Wisconsin, that a statute of that State, requiring insurance corporations organized in other States, before doing business in that State, to agree not to remove into the Federal courts any suits that may be brought against them in the courts of that State, is not inconsistent with the Constitution or laws of the United States. The Home Insurance Company, a corporation organized under the laws of the State of New York, executed such an agreement; and, being subsequently sued in the Circuit Court of Winnebago county, the company sought to remove the suit to the United States Circuit Court for the Eastern District of Wisconsin, by a compliance with the legal provisions for that purpose. The court refused to grant the petition of the defendant, proceeded with the trial, and gave judgment against the company. The case was appealed to the Supreme Court of the State, and the judgment was there affirmed, the court holding that the company had, by its own agreement, waived the right of removal.

The case was then, by writ of error, brought to the Supreme Court of the United States, and the judgment was there reversed. See Insurance Company v. Morse, 20 Wall. 445. The view adopted by the Supreme Court embraces these points: 1. That "the Constitution of the United States secures to citizens of another State other than that in which the suit is brought an absolute right to remove their cases into the Federal court, upon compliance with the terms of the act of 1789." 2. That "the statute of Wisconsin is an obstruction to this right, is repugnant to the Constitution of the United States and the laws in pursuance thereof, and is illegal and void." 3. That "the agreement of the insur

ance company derives no support from an unconstitutional statute, and is void, as it would be had no such statute been passed."

The Supreme Court treated the Home Insurance Company as a citizen of the State of New York, having a controversy with a citizen of the State of Wisconsin, and hence entitled as such to remove its case into a Federal court, and then to have the case heard upon a writ of error in the Supreme Court itself. The corporation, for all these remedial purposes, was deemed to be a citizen of the State creating it, as fully as if it had been a natural person. Justice Hunt, in delivering the opinion of the court, said that " a corporation has the same right to the protection of the laws as a natural citizen, and the same right to appeal to all the courts of the country."

Such is the doctrine of the Supreme Court of the United States in regard to the citizenship of corporations. Though not citizens for all purposes and in all respects, yet, under the National Constitution, they are citizens within the meaning of the clause that relates to "controversies between citizens of different States," and within the meaning of the legal provisions that refer to the removal of suits from State to Federal courts, and to the right by writ of error to have a case re-examined and decided in the Supreme Court as against any judgment or decree, in the case specified, rendered by the highest court of a State in which the decision can be made. Their citizenship in these particulars, and for these purposes, is as complete as that of natural persons. It secures to them the same rights of suit, and subjects them to the same liability of being sued in the courts of the United States.

THE ENGLISH BENCH-MAJOR AND MINOR SCANDALS.

אן

LONDON, October 31, 1877. IN my last letter I mentioned some reports that were current about the successor of Sir Richard Amphlett on the bench of the Appeal Court, and gave my own impression in favor of the promotion of Mr. Justice Lush. We were all of us very much mistaken. On the day after my letter was dispatched, it was confidently asserted in legal circles, that the vacancy had been offered to Mr. Alfred Henry Thesiger, Q. C., and on the next day that statement appeared prominently in The Times. To those not in the confidence of the Prime Minister or the Lord Chancellor, this announcement came like a peal of thunder out of a clear sky. Mr. Thesiger had never been thought of; and one very good friend of the government-the Pall Mall Gazette -said: "It may be so, but for the present we hesitate to believe it. The objections to such an appointment are so patent and so serious - the report that it has been made is, in plain language, so incredible - that we prefer to reserve our comments on this extraordinary piece of news until it has received official confirmation."