Tioga R.R. v. Blossburg & Corning R.R., 87 U.S. (20 Wall.) 137

Tioga Railroad v. Blossburg and Corning Railroad.

^theT* 11 a jU<^cial Proceeding, the matter passed upon is the right under

anguage of a certain contract to take receipts on a railroad, the

the cluestion of the meaning of the contract on a 2. ThBh-°KSU Sequen'* tolls received under the same contract. that St *fSt t°UrtS °f NeW York’ construing the statutes of limitations of of them 8’Ve.^ec’^e<^ that a foreign corporation cannot avail itself a railrn.^^xr^’ n°twithstanding such corporation was the lessee of mana • GW,^ork’ an<^ had property within the State, and a 8 g agent residing and keeping an office of the company.

3. These decisions upon the construction of the statutes are binding upon this court, whatever it may think of their soundness on general principles. 4. No error can be assigned on a general finding.

Error to the Circuit Court for the Northern District of New York.

The Tioga Railroad Company was a corporation duly organized under the laws of Pennsylvania, and was the proprietor of a railroad extending from Blossburg, a town iu that State, a little south of the line between Pennsylvania and New York, up to that said line. The Blossburg and Corning Railroad Company was a corporation organized under the laws of the State of New York, and was the proprietor of a railroad connecting with the abovementioned road at the State line and extending thence to Corning in New York; the two roads forming a complete line of railroad from Blossburg to Corning. The latter company had acquired its part of the road by purchase in 1855, succeeding to the rights of a former company called the Corning and Blossburg Railroad Company. By contract made in 1851 the Corning or New' York end of the hue was leased to the Tioga Railroad Company under certain terms and stipulations, amongst which was the following:

“ For the use of the said railroad of the said Corning and Blossburg Railroad Company, and the use of their depots, engine-houses, machine-shops, grounds, water-stations, &c., t ie loga Railroad Company agrees to pay to the Corning an oss urg Railroad Company two-thirds of the receipts for passenge > mails, and freights which shall be taken for t e sai o• and Blossburg Railroad, the expenses charge customeis loading and unloading coal, lumber, and other the warehousing, and such additional charges, by way of discrm nation, as shall be made for short distances for matwe power, not to be included in the term receipts, as abovementioned.

Previously to the bringing of this, the present suit, that is to say, in January, 1855, the Blossburg company had brought a suit in the Supreme Court of New York against the Tioga company on the contract in question, in which this question of difference was litigated. The record of that case, which went to final judgment (see 1st Keyes, 486), was given in evidence in this one.

The present suit was brought for the same class of receipts which had accrued since the commencement of the former action. Besides the defence abovementioned, the Tioga company in this case pleaded the statute of limitations as to all receipts which accrued more than six years before the commencement of the suit. The plaintiff replied that the defendant was a corporation organized under the laws of Pennsylvania, and not created or existing under the laws of the State of New York, and that when the supposed cause of action accrued in favor of the plaintiff*, the defendant (the Tioga company) was out of the State of New York, and so remained until this action was commenced. The efendant denied that at or since the commencement of the action it had been out of the State.

The significance of these pleadings was derived from the , !w York statute of limitations. The period limited for ringing an action of this kind is six years. But by the °ne undiedth section of the Code of Practice it is enacted as follows:

he ^le cau8e °f action shall accrue against any person, within t Slate, such action may be commenced such n«. 6 termS herein re8Pecfcively limited after the return of shall ha SOn ^i8 Stale; an(l if, after such cause of action of this St acc™ed, such person shall depart froni and reside out taken as & ° ^me a^8ence shall not be deemed or 8uch action ” ^nie limited for the commencement of

ssbuig company insisted that as the Tioera com-

Tioga R. R. v.* Blossburg & Corning R. R. [Sup. Ct.**

pany was a Pennsylvania corporation, it could have no legal residence or existence in any other State than Pennsylvania, and hence that it was not in the State of New York when the action accrued, and had not been therein at any time since; and, therefore, could not claim the benefit of the statute of limitations. This the Tioga company disputed; and its counsel relied on certain sections of the Code of Practice of New York, which showed that foreign corporations might be sued in New York under certain circumstances, as where they had property in the State, or where their officers, agents, or directors are found within it, and were served with process. Thus, by act of 1851 (§ 134 of the Code), after providing for service of process on a corporation by delivering a copy to the president, secretary, treasurer, director, or managing agent, it is said:

“Such services can be made in respect to a foreign corporation only where it has property within this State, or the cause of action arose therein.”

Or, by the act of 1859,

“ Where such service shall be made within this State personally upon the president, treasurer, or* secretary thereof.”

The case, according to the New York practice, in cases which it is anticipated may involve the examination of long accounts, was referred to and tried by a referee.

Evidence was given which, as the counsel of the defendant asserted, showed—what he alleged was not denied “ that during all the time of the existence of the contract of 1851, the Tioga company had property within the State of New York, an office at Corning, directors, officers, and agents, constantly within that State and at all times amenable to the process of its courts, and in fact, in 1855, that the Blossburg company availed itself of this condition of things by bringing a suit against the defendant for a portion of the demand claimed under the contract now’ in controversy, recovered judgment and collected the same, and that in fact this suit was commenced by personal service of a summons upon the defendant’s agent at Corning.

Oct. 1873.] Tioga R. R. v. Blossburg & Corning R. R. 141

Argument for the Tioga company.

The referee refused to find as facts what is above stated in regard to the Tioga company, and found generally in favor of the plaintiff. Judgment being entered on the find-ingo the case was now here on error.

Mr. J. H. Reynolds, for the. plaintiff in error (after arguing the case on merits):

I. The same matter disposed of in the Court of Appeals of New York, in 1855, does not come in question here. No portion of the claim there made is embraced in this action. It is true that the claim arises under the same contract, but that circumstance is not of consequence if this court is not concluded by its construction in the courts of New York, which it clearly is not under the decision in Swift v. Tyson,* and Chicago v. Robbins.} Moreover, it is not easy to see that the same question was decided in the New York courts. A reference to the cases will show this.

II. The antiquated rule that a corporation cannot migrate must now be regarded as a legal fiction rather than a substantial reality. In actual practice, corporations created by the laws of one State do travel into other States, carry t eir property, establish offices, locate agents, transact business, and accumulate money, and they are recognized outside of the territorial limits of their creation as legal beings, having legal rights.

It was at one time questioned in this court, whether a coiporation created by the laws of a State, made the corporate body a citizen of the State creating it, when the corporators actually resided beyond its territorial jurisdiction, Wlt’n meaning of the act of Congress in respect to the icmoval of causes from a State to a Federal court for trial.

is nowr the settled law of this court, that a corporation is a °f the State creating it, and entitled to all the rights n immunities accorded to a citizen by the Constitution and the law.J J

* 16 Peters 1 ' ' -------------------------------------------- t Railp t 2 Black, 418-428. suranoo omPany Letson, 2 Howard, 497; Stevens v. Phoenix In-

If it be, as it must be, assumed that a corporation is a citizen of the State by which it is created, then itmusfbe accorded the rights of a citizen in all courts and places.

We are aware of certain decisions in New York notin accordance with these views. But there is no greater reason for this court’s following the decision of State courts in respect to the limitation of actions, than for its following the laws and decisions respecting the validity of bonds in aid of railroads or any other local improvements. These, certainly, it has not followed.

It was proved and conceded that during all the time of the existence of the contract of 1851, the defendant had property within the State of New York, an office at Corning, New York, directors, officers, and agents constantly within this State, and at all times amenable to the process of its courts; and in fact in 1855 the plaintiff availed itself of this condition of things by bringing a suit against the defendant for a portion of the demand claimed under the contract now in controversy, recovered judgment, and collected the same, and that in fact this suit was commenced by personal service of a summons upon the defendant’s agent at Corning. It is, therefore, apparent that the Tioga company has been at all times subject to a suit at law, for any debt it owed to the Blossburg company or any other party.

Mr. Justice BRADLEY, having stated the case, delivered the opinion of the*court.

Court of Appeals, to which court the case was carried. This point, then, is res judicata between the parties. It cannot be litigated again on the same contract.*

We pass, then, to the matter of the statute of limitations.

The counsel for the plaintiff in error (the defendant below) insists “that it was proved and conceded that during all the time of the existence of the contract of 1851, the defendant had property within the State of New York, an office at Corning, New York, directors, officers, and agents, constantly within this State, and at all times amenable to the process of its courts; and, in fact, in 1855, the plaintiff availed itself of this condition of things by bringing a suit against the defendant for a portion of the demand claimed under the contract now in controversy, recovered judgment and collected the same, and that in fact this suit was commenced by personal service of a summons upon the defendant’s agent at Corning; and that it is, therefore, apparent that the Tioga company has been, at all times, subject to a suit at law for any debt it owed to the Blossburg company or any other party,” and he argues that the statute of limitations is therefore a defence.

Opinion of Hunt and Field, JJ., concurring.

But the facts on which the plaintiff in error relies are not spread upon the record in such a manner that the court can take cognizance of them. They are not found specially by the referee; he refuses to find them. He finds generally in favor of the plaintiff, namely, that the statute of limitations was not a bar to the action. No error can be assigned upon such a finding.

Judgment is affirmed.

Mr. Justice HUNT, concurring in the judgment.

The question whether, upon the merits, the plaintiff is entitled to recover is no longer an open question. It was settled by the adjudication of the point by the highest courts of New York in an action between the same parties and upon precisely the same facts. The record in the former suit was given in evidence in this suit, and is conclusive.* The point with which we are principally concerned at this time arises upon the statute of limitations. This action was commenced on the 6th day of May, 1864, and it was insisted that all that part of the claim which became due on or before May 6th, 1858, was barred by the statute of linaitations of the State of New York. The court below held against this claim, but it is repeated and renewed on this appeal.

The Civil Code of New York repeals the former laws on the subject of the limitation of actions and enacts as follows:

“ Section 74. Civil actions can only be commenced within the periods prescribed in this title, after the cause of action shall have accrued, except where, in special cases, a different limitation is prescribed by statute.

“ Section 89. The periods prescribed in section seventy four for the commencement of actions, other than for the recovery of real property, shall be as follows:

Opinion of Hunt and Field, JJ., concurring.

tract, obligation, or liability, express or implied (excepting judgments and sealed instruments).

“Section 100. If, when the cause of action shall accrue against any person, he shall be out of the State, such action may be commenced within the terms herein respectively limited after the return of such person into this State; and if, after such cause of action shall have accrued, such person shall depart from and reside out of this State, the time of his absence shall not be deemed or taken as any part of the time limited for the commencement of such action.”

An examination of the statutes of the different States shows a great similarity in their provisions. They generally provide that if a person shall be out of the State when the cause of action accrues against him the statute does not begin to run until he returns into the State; if, after the cause of action has accrued, such person shall depart from and reside out of the State, the time of his absence shall not be taken to be a part of the time limited for the commencement of the action. As to a resident of the State where the action is brought, his temporary absences after the cause of action shall have accrued do not suspend the running of the statute. As to a non-resident debtor, however long his absence may be continued, he takes no benefit from the statute. Temporary returns do not put the statute in motion. So long as he continues to reside in another State, so long he is liable to an action in the State in which he is sued. These provisions are found in substance in the statutes of Maine, Massachusetts, New Jersey, Vermont, New Hampshire, Michigan, Wisconsin, Arkansas, Oregon, and Iowa.

The State of New York is not singular, therefore, in providing or in holding that although a debtor may have been iom time to time within the State, yet while he is a resident o another State, and until he becomes a resident of New ork, he cannot ask the protection of the statute of limitation.

Opinion of Hunt and Field, J J., concurring.

New York, directors, officers, and agents within the State; that it was at all times amenable to the process of its courts; and that in 1855 the plaintiff availed itself of this condition of things to bring a suit against the defendant for a portion of the demand claimed under the contract now in controversy, and that the present suit was commenced by the service of a summons upon the defendant’s agent at Corning, New York.

In 1848 the code of New York authorized the commencement of a suit by the delivery of a copy of the summons to the defendant, and if the suit was against a corporation, to the president or other head of the corporation, secretary, cashier, or managing agent thereof.

In 1851 this section was amended by adding thereto the words “ but such service can be made in respect to a foreign corporation only when it has property within this State, or the cause of action arose therein.”

In 1859 this subdivision was further amended by adding, at the end, the words “ or where such service shall be made within the State, personally upon the president, treasurer, or secretary thereof.”

It would appear from this analysis that the legislature intended to authorize the commencement of a suit against a corporation by the delivery of a summons to its president or other officer, without regard to the facts: 1st, whether it was a domestic or a foreign corporation; or 2d, whether it had property within the State; or 3d, whether the cause of action arose within the State; or 4th, whether such service was made within this State or without the State. It amended the proceeding, first by limiting this mode of commencing a suit against a foreign corporation to a case where it ha property within this State or where the cause of action arose therein; and second, by requiring such service to be made within this State.

In commenting upon these provisions, the counsel for e plaintiff in error says: “It is then apparent that evei since 1848, it has been in the power of any. creditor of the Tioga company to sue it in the courts of New York, and recover a

Opinion of Hunt and Field, JJ., concurring.

judgment against it as effectual and conclusive as any that could be obtained against any citizen or domestic corporation, for it has had during all that time property within the State and officers upon whom process could have been personally served; and in this case, the cause of action, if any, arose within the State of New York.”

That a judgment could be obtained during that period is apparent, but that an effectual and conclusive judgment could be obtained by the service of a New York summons upon an officer of a Pennsylvania corporation in that State, as was authorized by the code until the year 1859, is not so apparent. The process of the New York courts does not and cannot run beyond the. territorial limits of that State. A service of such process within the State of Pennsylvania would be void.* The broad language used in these statutes justifies the construction given it by the New York courts, that they were intended to provide for a judgment not complete and effectual but limited and restricted like that obtained upon publication or by attachment proceedings. The statutes give no evidence that a more perfect judgment was expected to be obtained where the service of the summons was made upon the officer within this State than when it was made without it. A suit was authorized to be commenced against a foreign corporation by any of these various modes, or by attachment and publication. In the latter case no pretence is made that the judgment is effectual and conclusive, and the fact that the cause?of action arose within this State or that the corporation had property within the

State, can give but little addition to its conclusiveness, uch is the doctrine announced not only in Rathbun v. 0)them Central Railroad Cb.,f hut in many previous cases.

Opinion of Hunt and Field, JJ, concurring.

commenced by the service of a summons upon an officer of a foreign corporation while in this State is not a personal judgment, that it can only be enforced against property in this State.

In Rathbun v. Northern Central Railroad Co.* in delivering the unanimous opinion of the court, Folger, J., after citing the statutes upon the subject and discussing the decisions of the State heretofore made, bases the decision that the statute did not limit the action against the defendant in that suit upon the principle that the judgment to be obtained by service upon the officer of a foreign corporation would not be a full and perfect judgment prevalent against it in a State other than New York. The case as reported in the series does not contain the opinion, but a copy certified by the reporter has been handed to us, and it is full and explicit upon the point now suggested.

The cases establish, that a corporation has its existence and domicile only within the jurisdiction of its origin, and that in its nature it is incapable of migration to another jurisdiction.

In the Bank of Augusta v. Earle,it was said: “ The artificial person or legal entity known to the common law as a corporation, can have no .legal existence out of the bounds of the sovereignty by which it is created, that it exists only in contemplation of law and by force of law, and where that law ceases to operate the corporation can have no existence. It must dwell in the place of its creation.”

The same doctrine was reiterated and the above language quoted with approbation by Taney, C. J., in Ohio and Mississippi Railroad Co. v. Wheeler.J

In Day v. Newark India-Rubber Manufacturing Company$ Mr. Justice Nelson held that a corporation of New Jersey, although it had a place for the store and sale of its goods in New York, was not an inhabitant of that city, and that it could have no corporate existence beyond the territory of

j- 13 Peters, 521.

* 50 New York, 656.

§ 1 Blatchford, 628.

J 1 Black, 295.

Opinion of Hunt and Field, JJ., concurring.

New Jersey. These principles have never been disturbed, although other doctrines contained in these cases in regard to the residence of a corporation, when plaintiff in an action, have been reconsidered.

It is also established in the courts of New York,* that a foreign corporation is a citizen of the State from which it obtains its charter, and that it is incapable of immigration.

We do not say that a corporation cannot run its cars in a State other than that where it is incorporated and where it is domiciled, nor that it cannot by its lawful agents make contracts and do other business in such State. We assume that it can. In doing these things it does not lose its residence in the former State nor become a resident of the latter. It still resides in the State where it is incorporated and does not depart therefrom.

We assume, also, that a foreign corporation may appoint an attorney to appear for it when sued in a foreign State, and that a judgment obtained against it, upon such appearance, would be perfect and complete. We are not aware that this proposition has ever been doubted.f

By section one hundred of the New York code, already quoted in full, the statute of limitations does not apply to the case of a person who shall be “ out of the State when t e cause of action shall accrue against him.” If he “ depait fiom and reside out of the State after such cause of action shall have accrued, the time of his absence shall not e taken as any part of the time limited for the commence-such action.” Although a natural person who has thus departed may return frequently and remain long, yet 1 is domicile continues in another State, the time of his non-residence forms no part of the time limited by the state.J It was legally impossible for the Tioga Railroad Comit la ePai^rorn ^ie State of Pennsylvania. Of course, could not bring its residence into the State of New York.

nix lisiirlCk V'rVan Santvoord’ 34 New York, 208; see also Stevens v. Phoenix In uranceCo., 41 Id 149, to the same purport.

t Burroi^h' ^ales, 9 Wallace, 31-2; Chaffee v. Hayward, 20 Howard, 208. + oughs v. Bloomer, 5 Denio, 532.

Tioga R. R. v.* Blossburg & Corning R. R.** [Sup. Ct.

Opinion of Hunt and Field, JJ., concurring.

It was resident out of the State when the cause of action accrued against it, and has ever since so continued. There is no limitation of the time in which the action may be brought in such a case.

Statutes of limitation are in their nature arbitrary. They rest upon no other foundation than the judgment of a State as to what will promote the interests of its citizens. Each determines such limits and imposes such restraints as it thinks proper.

In Angell on the Limitation of Actions at Law,* the author says: “ Under the thirty-fourth section of the Judiciary Act of 1789, the acts of limitations of the several States, where no special provision has been made by Congress, form a rule of decision in the courts of the United States, and the same effect is given to them as is given in the State courts. In accordance besides to a steady course of decision for many years, the Federal judiciary feel it an incumbent duty carefully to examine and ascertain if there be a settled construction by the State courts of the statutes of the respective States where they are exclusively in force, and to abide by and follow such construction when found to be settled. There is no unwritten or common law of the Union, lhe rule of action is found in the different States as it may have been adopted and modified by legislation and a course of judicial decisions. The rule of decision must be found in the local law, written or unwritten.”!

Opinion of Miller and Strong, JJ., dissenting.

same purport; Olcott v. Tioga Railroad Company * and Rathbun v. Northern Central Railroad Company,^ together with the cases already cited, showing that a judgment obtained by service of a summons upon the agent or officer of a foreign corporation is not personal and conclusive; and Blossburg Railroad Company v. Tioga Railroad Company^ in the Circuit Court of the United States, heretofore referred to, all tend to the same conclusion.

We have not been referred to a single decision of the New York courts in conflict with these authorities, nor are we aware of any. We are not at liberty to depart from this settled construction were we inclined to do so.§

There is nothing in the rulings upon the trial in regard to the admission or exclusion of evidence that requires our interference.

Mr. Justice FIELD concurred in this opinion.

Mr. Justice MILLER, dissenting:

I dissent from that part of the opinion of the court which relates to the defence of the statute of limitations.

If the State courts of New York have construed their statute concerning service of process, to mean that no such service will authorize a judgment against a corporation of another State, 'which will be valid beyond the limits of the tate of New York, it is a most extraordinary and unneces-8fF\ e^8^on’ f°r i® the province of those other States, or the Federaf judiciary, to declare the effect of such judgment, outside of the State of New York. Besides it is not ss®lte aiiy such decision has ever been made, except i reference to its effect upon the right of such corporaofN t0J? ea^ tlle 8tatllte °f limitations in the State courts of th^TT 01 C ^°r I ^e^eve tliat the courts of any State son d • nii°U .excePt -^ew York, have ever held that a per-01ng usiness within the State and liable at all times

z GpI^Z Y°rk ’ 210' t 50 Id- 656‘ t