Central R. Co. of NJ v. Mills

Supreme Court of the United States
Central R. Co. of NJ v. Mills, 113 U.S. 249 (1885)
5 S. Ct. 456; 28 L. Ed. 949; 1885 U.S. LEXIS 1676

Central R. Co. of NJ v. Mills

Opinion

Mr. Justice Gray

delivered the opinion of the court. He recited the facts as above stated, and continued:

The controversy in this case is not between citizens of different States. In truth, as well as in form, the parties on one side of the controversy are citizens of New Jersey, and those on the other side of the controversy are a New-Jersey corporation and other citizens of New Jersey, as well ,as a Pennsylvania corporation and citizens of Pennsylvania and of Maryland. The bill is filed by stockholders in the New Jersey corporation, in behalf of themselves and other stockholders similarly situated, to set' aside a lease made by that corporation, acting in concert with the other defendants, of its railroad and property, in excess of its corporate powers, and in fraud of the rights of the plaintiffs. All the defendants unite in defending the acts complained of, and in denying the illegality and fraud charged against them. The New Jersey corporation is in no sense a merely formal party to the suit, or a party in the same interest with the plaintiffs; but is rightly and necessarily made a defendant. Hawes v. Oakland, 104 U. S. 450, 460; Atwool v. Merryweather, L. R. 5 Eq. 464, note; Menier v. Hooper’s Telegraph Co., L. R. 9 Ch. 350; Mason v. Harris, 11 Ch. D. 97. There is-no separate controversy between the plaintiffs and those directors who are citizens of Pennsylvania. The' bill seeks affirmative relief against the directors, as well as against the two corporations,, for one and the same illegal and fraud'u- *257 lent act; the single matter in controversy between the plaintiffs and all the defendants is the validity of that act; and unless it is determined that the action of the New Jersey corporation' was invalid as against the plaintiffs, "there can be no decree against any of 'the other defendants. All the parties on one side of this controversy not being citizens of different States from all those upon the other side, the citizenship of the parties did not bring the case within the jurisdiction of the Circuit Court. Ayres v. Wiswall, 112 U. S. 187.

No controversy has arisen under the Constitution and laws of the United States. Neither the bill nor the answer, in terms or in effect, claims any right or involves any question under that Constitution or those laws. The question whether a party claims a right under the Constitution or laws of the United States is to be ascertained by the legal construction of its own allegations, and not by the effect attributed to those allegations by the adverse party. ■ The bill, while alleging the lease made by the New Jersey corporation to be inconsistent with its charter, illegal and void, does not assert or imply an intention to impugn the validity of any statute of the State for repugnancy to the Constitution or laws of the United States. And the counsel for the plaintiffs, at the hearing in the Circuit Court, as well as in this court, disclaimed the intention to do so. Should any such question arise in the progress of the cause, and be decided by the State court against a right claimed under the national Constitution and laws, relief may be had by writ of error from this court. But in the present condition of the case, the Circuit Court rightiy held that it did not involve a controversy properly within its jurisdiction. Gold Washing Co. v. Keyes, 96 U. S. 199; Smith v. Greenhow, 109. U. S. 669.

Judgment affirmed.

Reference

Full Case Name
The CENTRAL RAILROAD COMPANY OF NEW JERSEY v. MILLS & Another, Executors
Cited By
63 cases
Status
Published
Syllabus
A bill in equity, filed in the Court of Chancery of the State of New Jersey by citizens of that State, stockholders in a New Jersey railroad corporation, against- that corporation, and a Pennsylvania railroad corporation, and ’ several individuals, citizens respectively of New Jersey and Pennsylvania, and directors in one or both corporations, alleged that, without authority of law, and in fraud of the rights of the plaintiffs, and with the concurrence of the individual defendants, the New Jersey corporation, pursuant to votes of a majority of its stockholders, -made, and the Pennsylvania corporation took, alease of the railroad and property of the New Jersey corporation ; and prayed that the lease might be set aside, the Pennsylvania corporation ordered to account with the New Jersey corporation for all profits received, the amount found due ordered to be paid to the New Jersey corporation by the Pennsylvania corporation, or, upon its failure to do so, by the individual defendants, and the New Jersey corporation ordered to administer the property in conformity with its charter, and to pay over to the plaintiSs their share of that amount. The defendants answered jointly, denying the illegality of the lease, and removed the case into the Circuit Court of the United States, under the act of March 3,1875, ch'. 137, as involving a controversy between citizens of different States, arid a controversy arising under the Constitution and laws of'the United States. The Circuit Court, upon the plaintiffs’ motion, remanded the case to the State court. Held, That the case was rightly reihanded.