Commercial & Railroad Bank of Vicksburg v. Slocomb, Richards & Co.

Citations: 39 U.S. 60; 10 L. Ed. 354; 14 Pet. 60; 1840 U.S. LEXIS 354

Court: Supreme Court of the United States; February 26, 1840; Federal Supreme Court; Federal Appellate Court

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In the case of The Commercial and Rail Road Bank of Vicksburg v. Slocomb, Richards and Company, the plaintiffs, citizens of Louisiana, sued the defendants, a Mississippi banking corporation, for a certificate of deposit totaling $3,541.34. The defendants filed a plea asserting that they were a corporation with stockholders from different states, specifically citing two Louisiana citizens as part of their company, and argued this should prevent the court from taking jurisdiction over the case. An affidavit from the bank's cashier supported this plea.

The plaintiffs responded with a demurrer, claiming the plea was not entitled to court consideration, the supporting affidavit was insufficiently attested, and the plea did not provide valid grounds to dismiss the lawsuit. The court sustained the demurrer and ruled in favor of the plaintiffs, prompting the defendants to appeal.

On appeal, the defendants' counsel argued several points: the alleged defects in the plea and affidavit should not constitute valid reasons for demurrer; even if they did, the plea was legally sufficient; and the facts presented in the plea undermined the court's jurisdiction, thus warranting a judgment for the defendants. The counsel referenced prior court decisions establishing that not all members of a corporation need to be citizens of the state where the lawsuit was filed for the court to maintain jurisdiction. The case underscores issues regarding corporate citizenship and jurisdiction in federal courts.

Jurisdiction in U.S. courts requires all corporators to be citizens of the state where the suit is filed. The cited cases, Strawbridge v. Curtis and The Bank of the United States v. Deveaux, support this requirement. The plaintiffs' representation by an attorney does not negate their right to challenge the court's jurisdiction. The 1839 act of Congress is relevant but does not alter the fundamental jurisdiction of the Circuit Courts; it only applies to parties who are properly joined in a suit but may not have been served with process. The Louisiana citizens involved have a vested interest in the outcome since the bank's funds could be used to satisfy the debt.

Objections raised regarding the jurisdiction were improperly presented, as a foreign minister must formally plead their exemption to invoke it. The failure to do so constitutes an admission of jurisdiction. Furthermore, a plea to contest jurisdiction must include a supporting affidavit, properly sworn by the individuals being sued. The 1839 act grants the Court jurisdiction in cases where parties may be absent, allowing proceedings to continue despite joint causes of action. Validity of the timing of the plea in abatement is noted, as it must be filed before any appearance; otherwise, it is disregarded. Courts require proper pleadings to establish jurisdictional challenges, as elaborated in various legal references. The opinion is delivered by Justice Barbour concerning a writ of error from the Circuit Court for the Southern District of Mississippi, involving a case brought by Louisiana citizens against the defendants.

Defendants in the lower court, represented by an attorney, challenged the court's jurisdiction by claiming they were a corporation with stockholders from different states, specifically mentioning William M. Lambeth and William E. Thompson, both citizens of Louisiana. The plaintiffs demurred, arguing the plea was improperly entitled, the supporting affidavit was insufficiently attested, and the plea did not adequately abate the suit. The court upheld the demurrer, ruling against the defendants for $3,575.54 in damages and costs. The appeal focuses on the third cause of demurrer regarding jurisdiction, particularly whether the court could hear the case given that both plaintiffs and some defendants were Louisiana citizens. The relevant law, under the Judiciary Act of 1789, requires complete diversity among parties to establish jurisdiction. Previous cases, including Strawbridge v. Curtis and The Bank of the United States v. Deveaux, establish that all plaintiffs must be able to sue each defendant and that the identity of the individuals behind a corporation is crucial for determining jurisdiction. Thus, since some defendants are Louisiana citizens, the court lacked jurisdiction over the case, supporting the lower court's judgment.

Plaintiffs from Louisiana brought a case against a corporation that included Louisiana citizens as defendants, creating a conflict of state citizenship that barred the defendants from being sued in Mississippi's Circuit Court. While it was argued that the defendants waived jurisdictional objections by appearing through an attorney, this is typically valid for individual defendants but not for corporations, which can only act through attorneys. Thus, asserting that a corporate appearance waives jurisdiction would unfairly compel the corporation to forfeit its legal rights.

Additionally, the act of Congress from February 28, 1839, aimed to address jurisdictional challenges when multiple defendants are involved, allowing courts to proceed with cases against those properly before them while excluding others who are not. However, this act does not alter the fundamental requirement that both plaintiffs must be capable of suing and defendants capable of being sued, as stipulated in the Judiciary Act. In this case, the presence of Louisiana citizen defendants means jurisdiction is not established, rendering the 1839 act inapplicable.

A judgment or decree will not affect parties that were not properly served or did not voluntarily participate in the case. Since the defendants are a corporation, any judgment against them must be made in their corporate capacity and funded by their corporate assets, which includes the interests of two Louisiana stockholders. Therefore, such a judgment inherently prejudices those stockholders, violating legal provisions. The Circuit Court's decision to uphold the plaintiffs' demurrer to the defendants' plea was found to be erroneous. Consequently, the Court reversed the Circuit Court's judgment, ordered that costs be assigned to the plaintiffs, and remanded the case back to the Circuit Court for further proceedings consistent with this opinion.