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Attempts to separate the voting power of their stock from its beneficial enjoyment having thus ended in failure, these associations were forced to the present step of forming themselves into a corporation to which their stock shall be assigned, and which shall assimilate them as nearly as possible to the position of a single individual. This step is a very easy one. It involves not even an application to any legislative department. It involves nothing but the preparation of a few comparatively simple papers and the payment of comparatively trifling fees. Certain of the States of our Union have found it profitable to engage in the promotion, on a large scale, of corporations intended to operate entirely without their limits. The promoting States, of whom New Jersey is the most successful, vie with each other in the breadth of their invitations, in the simplicity of their requirements, and in the moderation of their fees. Their progeny are born full fledged. They promptly leave their native territory and settle down wherever permission can be obtained, bringing with them their attribute of artificial individuality. The sole object of the fledgling may be the destruction of competition and defeat of the public policy of the United States and of the State where it builds its nest; but if complaint is made, it answers simply that a corporation is a person, that a block of stock is just a piece of property, that a corporation may own property, and that a person, corporate or individual, may vote any stock that he owns according to his private judgment.

Now the personality of a corporation is a very ancient legal fiction, and one which for many purposes has very high authority. A corporation is deemed to be a person within the meaning even of certain provisions of the United States Constitution." "But fictions of law hold only in respect of the ends and purposes for which they were invented; when they are urged to an intent and purpose not within the reason and policy of the fiction, the other party may show the truth." This fiction therefore never should be used as an engine for thwarting the interests of the State. However often and properly a corporation is called a person, it really is a collection of

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'Hon. S. E. Baldwin in 1 Yale L. J. 1; E. W. Moore in 36 Am. Law Rev.

2 United States v. Amedy, 11 Wheat. 392, 412; Providence Bank v. Billings, 4 Pet. 514, 562; Dartmouth College v. Woodward, 4 Wheat. 517, 636, 667; People v. Assessors, 1 Hill, 616, 620.

Lord Mansfield in Morris v. Pugh, 3 Burr. 1242.

'State v. Standard Oil Co., 49 Ohio St. 137, 177; People v. North River

Sugar Refining Co., 121 N. Y. 582, 621.

persons, and while it has some of the attributes of personality, others are lacking.1

Legal fictions, like other fictions, stand cross-examination with difficulty. Nowhere is the confusion resulting from the use of a legal fiction better illustrated than by the development of the doctrine which gave corporations their standing in suits in the Federal Courts. The Constitution permits a citizen of one State to sue or be sued by a citizen of another. In 1809 the question whether a corporation was a citizen was argued at the bar of the Supreme Court, in a series of cases presenting the question in various lights and employing the leading counsel of the day. On the one hand it was argued that a corporation is different from the individuals which compose it; that it may do business although they are all infants; that it may own land although they are all aliens; that the individuals cannot be noticed because they are lost in the corporation; that the stock shifts so rapidly that the members at any particular date are unascertainable; that the corporation sues and not its members. On the other hand it was argued that a corporation is a fiction of law, and that a fiction cannot shut out the truth; that the corporation is the form, while the individuals are the substance; that whenever justice or convenience requires the individuals are disclosed. Chief Justice Marshall, delivering the opinion of the court, said that a corporation was certainly not a citizen, and would be excluded altogether if "considered as a mere faculty and not as a company of individuals," but that the Constitution refers to "the real persons who come into court," and hence that when the members of the corporation are all citizens of a single State they can sue or be sued by a citizen of another State, notwithstanding the corporate form in which they are enveloped. For thirty-five years this authority stood unshaken, and so eminent a lawyer as Daniel Webster seems not to have attempted to question it. Suddenly, in the case of the Louisville, Cincinnati and Charleston Railroad vs. Letson, the earlier decisions were

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11Kyd on Corporations, 13; Taylor on Private Corporations, Sec. 51; I Morawetz on Private Corporations, Sections 1, 227-234.

'Hope Insurance Co. v. Boardman, 5 Cranch, 57, and Maryland Insurance Co. v. Wood, id. 78, where the corporation disputed the jurisdiction; United States v. Deveaux, id. 61, where the corporation claimed the jurisdiction.

'Sullivan v. Fulton Steam Boat Co., 6 Wheat. 450; Breithaupt v. Bank of Georgia, 1 Pet. 238; Commercial Bank v. Slocomb, 14 Pet. 60; Bank of Cumberland v. Willis, 3 Sumn. 472.

*2How. 497. Mr. Alfred Russell, in his attack on this case, calls it the first railroad case that made its appearance in the Supreme Court (Reports of American Bar Association 1891 p. 221), but this is not quite accurate (13 Pet.

overruled, and the contrary doctrine was announced that a corporation is not only an artificial person but a citizen within the meaning of the Constitution. There is something a little mysterious about this Letson case. The opinion is reported as the unanimous opinion of the six justices' who sat in the case, and there is nothing of record to the contrary. It speaks of the case as having been argued by counsel as able as those who appeared before Chief Justice Marshall; but these counsel did not question the earlier decisions. Their main point was that the corporation is sufficiently represented by its officers and directors for purposes of suit, and that the citizenship of a mere stockholder is not important enough to divest jurisdiction. One of the justices who concurred in the opinion afterwards stated that he understood the court to have decided the case on this ground, and half of them subsequently dissented from the views in which they had been recorded as concurring. These views were never again repeated by the court, but the jurisdiction was maintained. Chief Justice Taney, in the cases which finally settled the law upon the jurisdictional point, says that it is based upon a presumption which, no matter how contrary to the truth, the courts will not permit in future to be rebutted—a presumption that although the suit of the corporation is really "the suit of the individual persons who compose it," these persons all reside in the State in which the Company is incorporated. These propositions are still recognized by the Supreme Court as established, and in difficult cases the court still reasons from the premise that it is the individual members who sue. No attempt, so far as I am aware, has been made to reconcile this doctrine with the numerous cases where an individual stockholder sues his corporation in the Federal courts, basing jurisdiction upon diversity of citizenship; but these cases must be regarded

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1p. 558.

216 How. at p. 349. The records in the clerk's office show that Taney, C. J., McLean, Baldwin, Wayne, Catron and Daniel JJ., were on the bench when it was submitted in March, 1843. The other three were ill and had left for the term. (1 How. p. 71.)

McLean, Catron and Daniel, JJ. (Rundle v. Delaware & Raritan R. R. Co., 14 How. 80, 94, 95; Northern Indiana R. R. Co. v. Michigan Central R. R. Co., 15 How. 233, 248, 249; Marshall v. Baltimore & Ohio R. R. Co., 16 How. 314, 338). Campbell, J., joined in the subsequent dissent (16 How. at p. 347). Kent regarded the decision as salutary (1 Kent Comm. 347 n). 'Covington Drawbridge Co. v. Shepherd, 20 How. 227, 233; Ohio & Mississippi R. R. Co. v. Wheeler, I Black, 286, 296, 297.

"Lehigh Co. v. Kelly, 160 U. S. 327, 338-9; St. Louis & San Francisco Railway v. James, 161 U. S. 545, 563, 565.

as anomalous, and resting upon precedents in which the jurisdictional question was not properly presented to the court. The Supreme Court has recently, and with emphasis, repeated the rule that when a corporation is incorporated first in one State and then in another, its members are presumed to be citizens of the former State, and therefore it cannot be recognized for purposes of Federal jurisdiction as a corporation of the latter.1

It is indeed often said that the consent of the stockholders, acting individually, is not equivalent to the consent of the corporation; but this is not always true, nor does it mean that the corporation is anything different from the sum of the individual stockholders. It merely means that, when they bind themselves for corporate purposes, they must act as provided by the law of their incorporation. When they attempt to circumvent and violate that law, its vindication will not be restricted by any legal fictions."

The Northern Securities Company is an association of individuals, few of whom, and none of any importance, are citizens of New Jersey. This association is clothed with the attributes of an artificial individuality so far as New Jersey undertook to confer them, and so far as she had power to do so. By availing themselves of the corporation laws of New Jersey they identified themselves with that State; but when the New Jersey corporation invested its entire property in the stock of a Minnesota and of a Wisconsin corporation it identified itself and its shareholders with Minnesota and Wisconsin. It can never come into contact with the outside world except when in the stockholders' meetings of the Minnesota and Wisconsin corporations it meets the minority stockholders of those companies. Its connection with New Jersey is nominal. Its sphere of action is confined to the States through which the Great Northern and Northern Pacific railway systems extend, and to any other State where their corporate meetings may be held. Its railway stock as is shown in tax and foreign attachment cases may be treated by the States which incorporated the railways as located within their respective boundaries."

'Louisville, New Albany & Chicago Railway Co. v. Louisville Trust Co., 174 U. S. 552, 565-6.

21 Morawetz on Private Corporations, Section 228; Woodbridge v. Pratt & Whitney Co., 69 Conn. 304, 330.

'State v. Standard Oil Co., 49 Ohio St. 137.

Under the principle of Covington Drawbridge Co., v. Shepard, supra, and cases following it.

"State v. Travelers Insurance Co., 70 Conn. 590; In re Bronson, 150 N. Y. 1; Winslow v. Fletcher, 53 Conn. 390; Plimpton v. Bigelow, 93 N. Y.

What then are the attributes of artificial individuality which pertain to this New Jersey concoction? Upon the face of the papers they are very complete, but they are limited by the general restriction in the New Jersey Corporation Act,' that the purpose or purposes of the incorporation must be lawful. We cannot impute to New Jersey the intent to manufacture and export corporations whose purposes, while lawful if sought in New Jersey, would be unlawful if sought where the corporations are intended to operate. Hence if the sole object of the Northern Securities Company had been to bring two Northwestern railroads under a single control, and if that object had been stated in the papers filed by the corporators, and if the object was illegal under the laws of the United States and of the Northwestern States, we are entitled to infer that the corporation would be illegal in New Jersey itself, and that the Attorney General of New Jersey would bring an action to annul the corporation. It is unnecessary however to trouble ourselves with the true construction of the New Jersey statute, for New Jersey can grant no privileges to be exercised in other States against the laws or policies of those States, or without their permission expressed or implied. Corporate privileges must be exercised within the State which grants them, unless they receive extension elsewhere from some other sovereignty. Any act performed elsewhere must point for its sanction to some provision of the Federal constitution or statutes, or to the consent, expressed or implied, of the State within whose limits the act occurs. No State can authorize a combination of men to act as a corporation within another State without that other State's consent; nor can any State give privileges which in the slightest degree obstruct the policy of the National Government in matters of interstate or foreign commerce. If, then, Congress wills that men shall not combine to restrain competition in interstate commerce, what possible authority can they obtain from any State to that end, whether by the particular form of license called an incorporation certificate or any other? And if Minnesota wills that men shall not combine to restrain competition in the local railway traffic of her own territory, what document can they obtain from an official of New Jersey which can lawfully be used to thwart that will? I know

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1 Section 6.

2 Lafayette Insurance Co. v. French, 18 How. 404, 407; Doyle v. Continental Insurance Co., 94 U. S. 535, 540; Pinney v. Nelson, 183 U. S. 144.

3 Runyan v. Coster's Lessee, 14 Pet. 122, 129-30; Thompson v. Waters, 25 Mich. 214, 221.

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