2Q8

FEDERA.L

vol, .49.

are required to construct, maintain, or operate telegraph lines, and all COUl panies ti;ng 8Q.Q!l. :telegraph: 1il!Jls"Shall forthwith and henceforward, by and through their Qwn respective corporate maintain aJid ope:rate, for railro.all. governmental, commercial, and all other purposes, telegraph lines, and exercise by themselves alone all the telegraph UP01;1 theman(i obligations by ,tilem under, the acts making,tbe grants, as aforellai1i.", 25 St. p. 882, e.:'1?2,§rl; 12, St.p.':489, c.12f);1:S;St.p. 356, c. 216.

This suit was brought'pursuant to 'that act, its fourth

declaring

!.hrhatln,Qrder tQ prel!el've to:i.heUnited Statlls'the full value and, beneJlt of -its ,liens upon all the ,telegraph lines required to be COIlby .iUld and tJ)e first to thlll\llme pOEll!lessed, used, and operatl'd in ot of the 8everalact8:to which tbis act,is:supple,mentary. it is hereby made the duty of eqijities i)ftlte;United States And, and u.nder alla-ets of congress relating to such railroads and telegraph lines,and,to,have legally ascertained and finally adjUdicated all alleged rights of all persons and corporatiQnllW a:fltIv.er.. .. . .. g..tp.,.a.. n.,y, m . '.. !l,ontrolor.. . re,st.9f . in. I,lDy telegravhjines or or rights Of way the lands ,of to have all contracts VISions otcontraetsse't'aslde and Which llave-bee,n unlawfully and beyond their powers entered into b)':llald ratlroad or telegraph companies,or any of tllemi'with iany otberperson; company, or corporation."
n.,.

p'rbper'

prevent

'-'The 1lailroad under Jhe laws of CitlHorpia;

isacorphfatipn organized allege'd,ln tespect to its road; to 'rights $ranted; and: sUbject'toaU the conditions prescribed, b;ytbe, Ilbts of'Cb9$reSS relating to the Atlantic & cific RAilroad Company/and to be treated as if its railroad and telegraph line had been constructed as a part of the main line of that complmy. ' The Southern Pacific Company of Kentucky, but it has no propertydr busIness in that 8tt\tEl, nor or agerit there, except an assistant Clerk,bolding a' s'hbordinate positi6n, and maintained for the' pu,rpose of'pres6rviilg the charter of the companY' under the laws con-ipttn.y has a large 'amount ofpToperty in California, and is operating lines' of railroad' in. this district. Its general. offices are, and lior tnanyyeara bavebeen, hi8an Francisco, where its pl'ipcipal executive officers reside.l . The bill alleges that the So'u,the-rri Pacific Railto!ld Company claims to have transferred to this its property, ralll, pers()nal, and mixed. '.' .' ' The Atlantic & Pacifio 'Railroad Company is a corporatibn organized underaIl" act pf'congrells'approved July 27, 1866,with authority to construct '8 iofraiH:oad l and to on' its business, in 'po 292. Its general officers reside,here, this o('thissuit'itwas operating,Jits'railroad and and at maintaining'6fficesin,{)alffbrnia. ::: ; " ii'" i The Western Union Telegraph Company is a New York c01'Jl0ration, aJarge ill pp'erii\tng.1iIies of tel-

alltne

UNITEDllTATES y.

R. CO,

299

egraphin this district, whereitmaintliins general offices for the transacwith the tiou·of-business. ThebBl alleges that it Southern Pacific Railroad Company, urtderwl1icb tM latter corporation ha.s ceased to maintain and operate a telegraph line for public or commercial purposes, and under which the former company has acquired a mOl1opoly of all such business on the lines of railroad in question. The relief sought is a decree annulling, not only thelease, if such there be, by which the Southern Pacific Railroad Company assigned all its property to the Southern Pacific. Company, but certain contracts oflease and sale by the former to the Atlantio& Pacific Railroad Company, as well as the above contract between the Southern Pacific Railroad Company and the Western Union Telegraph Company; and requiring the' Scuthern Pacific Railroad Companyhenceforth l . and through its own officers and employes. to maintain and operate telegraph lines along its entire main roadand··branches for railroad, governmental, commercial,· and all other purposes, itself exercising all the telegraph franchises conferred upOn it, and performing all the obligations assumed by it under the grants from congreSs. The subprena in this case was served on the secretaries, respectively, of the Southern Pacific Railroad Company and the &luthem Pacific Company, on the general passenger and treigbtagent of the Atlantic & Pacific Railroad Company, and on the general snpellin1endentof the Western Union' Telegraph Company for the Pacific coast. The officers and agents on, whom service was made were at. the time located. in San Francisco. Among the suits of a civil.nature.atcommon law orin equity I of which the circuit courts of the United States have original jurisdiction, under (.he act of March 3, 1887, amending that of March: 3, 1875, 'are those inrolving the sum or value of than $2;000, exclusive of interest and costs, and arisinguhder the constitution or laws of the United· States, or. treaties made under their authority"or in, which the United S.tates are pl/l.intiffs or petitiontlrsi those involving the above sum in which . states,citi. , there is a co.ntroversy between citizens of a state and zens, and subjects, or a controversy between citj.zens of different The same act provides : "But no person shall in one Oistriet for trial in another in Rny civil actiori before a circuit 01' district court. arid no ciVil suit shall be brought before either of said courts against any person, by lIny original process or proceeding', jn any other district than that whereofll.e is an inhabitant; but w.ht're .the jurijld,iction is founded only on ·the fact the actIOn is between cit;zens o.f dift',erent sMes.suit shall be brought only.in the distl'ict aBhe the plaintiff or. the defendant. .. .. "!' 25 St. p. 4J4. c. 866 i 24 8t: lp'. 552, c. 8 7 a . ' ·. . .' The provision in the original act of 1875. in respect to the district in . which suits, ml1stbe brought,. was as follows: persojl one fot trial in in aptcW#) aetlonMol'e -II Circnit oi'disLi'ict court.' . ADd no ei vilsu i t sHldl be 1I.ro'Ught' before eUIMU;,.,of saidcpUTtH !aglli:t1st any person, by any origi'l1ld' proces8'O't

300,

FEDERAL REPORTER,

vol. 49.

proceeding.lnany other dJl:!trict than ,that whereof be is'an inhabitant, or 1n sha}l, found at the time of such pfocess or commencing spc,hJ?roceedmg. 18 Sh:t,>.,470, c. 137. ' ," The'Judiciary Act of 1789 contained substantially the same provision. lSt.p.79" c. 20. It thus appears that the provision in the act of 1875 permitting suitthe plaintiff and the defendant being citizens of different states-to be brought!in the district where the defendant was "found" was stricken out by the act of 1887, and that the right to bring a civil suit by original process in, the district of which the defendant is an "inhabitant" is now subject to ,the condition that, where jurisdiction is acquired only by reacitizenship, the suit must be brought in the district of the . residenee ofeither the plaintiff or theldefendant. , Tp6;firstpointW1\de by the defendants is that the of the tlnited;States ,possess no pOlV,arsexcept euchas theiconstitution andihe actso£oongl'ess concurin conferringiriponthem, and ibatthe legal:prethat every cause iswithotit their jurisdictron, until and unless the contrary affirmatively appears. No douht!JAn' exist as,to the principle. ,Sheldoov. Sill, 8 How. 441, 4:49;Stedml06U. S.,118,lStip. Ct. Rep. 58; Bors v. Preston, 11:1 Ut. &.i2li2,4 Sup. Ct-Rep. 407; &ilwayOo. v. Stoan,'lllU. S. ,379, 38r3,Vt Sup.,.Ct. Rep. 51Q. ' : ." , I Tohe':pleas and motions to dismiss proceed upori 'the grouhd that a corpomtiion.is an:"inbabitant" only ofthe state which created'it,:and, although doing business in another state, under its license or with its passage:oNbe act of 1887, subject to the jurisdiction:aJidflpower;Qf: a circuit court oftiiaUnited States held in the latter state, tEl'J(ill:lpt in suits in whicb jurisdiction 'is founded' wholly on diverse and in which the corporation is' sued as a citizen' of the state o£its:cl'eation byacitizenoHhe stateiin,which the'court sits. I .The' act of 1887 1 thus' construed,. would work results not to have been expected: from tbeaction !ofthe legiS1ativebranoh of the government. (t) If, wi:lihinthemeaning of that act, a corporation is an "inhabitant" only of the;s'tatie creating it, a corpora:tion of a foreign country must be deemed an "inhabitant" only oftbat country; and, as the ,words, in the' act of 188.7,__ the jurisdiction founded only on the fact that tile citiZens of di,fferen.t states,suit,shall be brought oply in. tpe of the residence of either the plaintiff or the defend,only. to suits injudicial distriots established by congress, of different states of the and therefOl'eonly to suits between Unfoll, "qu14 'follow', frorpthe tbat, a'circuit conrt 'of' the ''Ullited States'c6uld never 'acquire jurisdicteion, :over a European corporation, doing business in this country; for the' act of 1887 e,xp1ei!I'lk1:probibits the bringing of any. suit in the circuit or district court "against any person, by any original process or proceedinK, in any other that whereof, he is .(2),; the ,defenda4ts are indisPlilI;lsablE3 pa,rtiesb9 the relief sought by the bill,. seem to be,-:the;govermnent eowd not proceed.agMnst thelD '

301
in court ofjbeUnite-d the tion now urged agaulst.thEljurisdiction ofthlS court; and it would be compelled, in order to enforce the, pr()villions of the telegrl\ph act, to invoke the jurisdiction of a state court, without the privilege of removing the suit, after it was brought, into the circuit court; the right of removal being' given,by the act of 1887, only t6 defendants. (3) A citizen of California can bring suit in ,this court against a corporation of another whiclldoes businesjl'here by agents located in this state and district, if jurisdiction be founded only on the, diverse citizenShip of thepartiesj according to the defendants' interpretation of Jhe act of congress, 1hiscourt cannot entertain jurisdiction of a suit brought by the United under the authority of Ian act of-congress, against the same corPotation, upon a like actiOn. While it iseompetent for congress to declare what part of thejudicia.l power of the 'Unitetl States, as defined by the triaf be by it establi'sh¢s, liot lightly presume tnat ifiwas' intendedto prodnee the reslilt.s .frbin' the upon the act of for the ": " ..' . '. : The is 'df th,e6pinion that the cltflise' iIitbefirst section of the ,1887', requiring sUi'ts to be hrougHt· in, the district of the 'rtlsidenee either of the plaintiff or of tfie defendant where jurisdiction is fot1Iid:edrinly on' ill of CitizensHi;p, applies only ,to" suits in which the' 'parties, 'Whethet ot aI'tificial persons, are of different 'states," arid :camiot applyto 'suits brought by the UnitedStaties.;:The generai'g'6verriment'is 'prlolsent everywher¢ withiri tHe ;terfit6riaI limits 6f th¢ United under statutcll;may invoketbe juijsd,idti()li'Of ;any Circuit court of thetTnited States in respect to 'allY cause of action it nilly have. against a natural or artificial -person, subject only 'to thecori'dition'that it§suit must be brought 'in the district of which the defend'therefore, to be is ant is an '''iitbabitimt." -whether' a corporation created bytbe 'laws of' another state, but doing h'ere, and ba*,ing'its agents located within the territ9tialjurisdiction of this 'court; 'may not,withiri the meaning of the statute, be :deemed an'tinhabitant" of this state abddistrict. i . ; 'Numerous <lases have been cited bythe.cOUI1sel of defelldantsas showing that a corporation of one state is an inhabitant only of the state ere,atingit. Upon'a careful examination of those cases, the court IS of no one Of :them determines tbe precise question now before 'opinion :it. The in principles:. '. ',. ' 1. While a,'corporation is domicHedin' the' state by whose laws iit mis -created, itslegalexisterice in that state may be recognized elsewhere; so that, within the scope of its limited powers, it may make imd enforce ,(lontracts in: other states which are by the laws of such iltates. B'z'nlC'v. EiLrle, 13 pet.519,588:, 589j Ohristian Union v. Yount, 101 U. S. 352;356. , In,the latter case, it was said thilt--";In otcomity obtaining tile Union!; thevr,esumption ;ilhould be induIgeii,thata, of onestate,-'not forbIdden by the laW of its being, may exercise Wltbinany