Court: Supreme Court of the United States; February 24, 1858; Federal Supreme Court; Federal Appellate Court
Mr. Chief Justice Taney delivered the court's opinion regarding a writ of error from a judgment favoring Shepherd and others against the Covington Drawbridge Company in the U.S. Circuit Court for Indiana. The sole error claimed was that the Circuit Court lacked jurisdiction based on the parties' description in the declaration. The plaintiffs, citizens of Ohio, sued the defendants, described as citizens of Indiana. The defendant argued that the declaration failed to indicate that the Covington Drawbridge Company was an Indiana-chartered corporation with its principal place of business in that state, which was essential for establishing jurisdiction.
The court countered that under Indiana's Constitution, statutes are public laws, and the incorporation of the Covington Drawbridge Company is a public law that courts must recognize without needing it explicitly pleaded or evidenced. Thus, the claim that the company was composed of Indiana citizens sufficed to establish jurisdiction. This position aligns with prior rulings, notably in the case of Louisville, Cincinnati, and Charleston Railroad Company v. Letson, where it was held that in corporate suits, the court could acknowledge the individuals behind the corporation when determining citizenship, allowing jurisdiction based on the state of incorporation.
Furthermore, the court clarified that a corporation cannot claim jurisdictional abatement based on the citizenship of its members differing from that of the state of incorporation. Members are presumed to be citizens of the state where the corporation is domiciled, preventing either party from contradicting this presumption.
Corporators of a company are considered to act as a single legal entity, residing where the corporation is legally domiciled. This presumption applies to contracts and liabilities, establishing that they are citizens of the state that granted the corporation its charter. The case of Bank of Augusta v. Earle emphasizes that a corporation's legal existence is confined to the jurisdiction of the state that created it. Thus, the Covington Drawbridge Company, chartered in Indiana, is deemed to have its home and business in that state, with jurisdiction established by the citizenship of its members. Although the Lafayette Insurance Company v. French case rejected the notion of a corporation being a constitutional citizen, it acknowledged that the corporation's chartering and principal business location in Indiana implied that its members are citizens of the same state. This principle was upheld in similar cases, such as Marshall v. Baltimore and Ohio Railroad Company. In the present case, the citizenship of the corporators is explicitly stated, avoiding ambiguity and fulfilling jurisdictional requirements. The court affirms the lower court's judgment, with Justice Campbell concurring.
