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LOUISVILLE, CINCINNATI & CHARLESTON R. CO. V. LETSON, 43 U. S. 497 (1844)
U.S. Supreme Court
Louisville, Cincinnati & Charleston R. Co. v. Letson, 43 U.S. 2 How. 497 497 (1844)
Louisville, Cincinnati & Charleston Railroad Company v. Letson
43 U.S. (2 How.) 497
A citizen of one state can sue a corporation which has been created by and transacts its business in another state (the suit being brought in the latter state) although some of the members of the corporation are not citizens of the state in which the suit is brought and although the state itself may be a member of the corporation.
The cases of Curtis v. Strawbridge, 3 Cranch 267; Bank United States v. Deveaux, 5 Cranch 84; Commercial and Railroad Bank of Vicksburg v. Slocomb, 14 Pet. 60, reviewed and controlled.
The Act of Congress passed on 28 February, 1839, making it
"lawful for a court to entertain jurisdiction and proceed to the trial and adjudication of a suit between parties who may be properly before it, although there may be other defendants, any one or more of whom are not inhabitants of, or found within, the district where the suit is brought, or do not voluntarily appear thereto"
is an enlargement of jurisdiction as to the character of the parties. The clause exempting absent defendants from the operation of the judgment or decree is an exception to this enlargement of jurisdiction, and must be strictly applied.
A corporation created by and transacting business in a state is to be deemed an inhabitant of the state, capable of being treated as a citizen for all purposes of suing and being sued, and an averment of the facts of its creation and the place of transacting business is sufficient to give the circuit courts jurisdiction.
Letson, a citizen of New York, brought an action of covenant against the Louisville, Cincinnati & Charleston Railroad Company, alleging that they had not fulfilled a contract with him relating to the construction of the road
The suit was brought in November, 1841.
In April, 1842, the defendants filed a plea to the jurisdiction, which was afterwards amended to read as follows:
"And the said the Louisville, Cincinnati & Charleston Railroad Company come and say that this court ought not to have or take further cognizance of the action aforesaid, because they say that the said the Louisville, Cincinnati & Charleston Railroad Company is not a corporation whose members are citizens of South Carolina, but that some of the members of the said corporation are citizens of South Carolina, and some of them, namely John Rutherford and Charles Baring, are and were at the time of commencing the said
action citizens of North Carolina, and the State of South Carolina is and was at the time of commencing the said action a member of the said corporation, and the Bank of Charleston, South Carolina, is also and was at the time of commencing the said action a member of the said corporation, which said the Bank of Charleston, South Carolina, is a corporation, some of whose members, namely, Thomas Parish and Edmund Lafau, are and were at the time of commencing the said action citizens of New York. And the Charleston Insurance & Trust Company is now and was at the time of commencing the said action a member of the said Louisville, Cincinnati & Charleston Railroad Company, which said Charleston Insurance & Trust Company is a corporation some of whose members, namely Samuel D. Dickson, Henry R. Dickson, Henry Parish, and Daniel Parish, are now and were at the time of commencing the said action, citizens of the State of New York."
"And this the said Louisville, Cincinnati & Charleston Railroad Company are ready to verify. Wherefore they pray judgment whether this Court can or will take further cognizance of the action aforesaid."
To this plea there was a general demurrer, which, upon argument, was sustained by the court.
The railroad company then pleaded the general issue, and the cause went on to trial. The jury found a verdict for the plaintiff and assessed his damages at $18,140.23.
The writ of error was brought to review the opinion of the court upon the demurrer.
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