THE CENTRAL RAILROAD COMPANY OF NEW JERSEY
v.
MILLS & ANOTHER, EXECUTORS

U.S. | 1885-01-19
113 U.S. 249 Supreme Court of the United States (1885) Caution
Also reported at: 28 L. Ed. 949 · 5 S. Ct. 456 · SCDB 1884-108 · 1885 U.S. LEXIS 1676
Cited by 60 cases

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Synopsis

Stockholders of a New Jersey railroad corporation sued to invalidate a lease of the company's property, but the federal circuit court lacked jurisdiction because all parties were citizens of the same states (New Jersey, Pennsylvania, and Maryland) and the case involved no federal constitutional or statutory question. The Supreme Court affirmed the dismissal, holding that diversity jurisdiction required all plaintiffs to be citizens of different states from all defendants, and that a claim must expressly arise under the Constitution or federal laws to invoke federal question jurisdiction.

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Opinion of the Court
Mr. Justice Gray

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- 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.

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Cited By (19 total)

  • Tennessee v. Union & Planters' Bank, 152 U.S. 454 (U.S. 1894)
    …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.” Central Railroad v. Millst, 113 U. S. 249, 257. Even under the act of 1875, the jurisdicti&n of the Circuit'' Court of the United States could not be sustained over a suit originally brought in that court, upon the ground that the suit was one arising under the Constitution, laws or treati…
  • Smith v. Sperling, 354 U.S. 91 (U.S. 1957)
    …s of wrongdoing but to determine the issue of antagonism on the face of the pleadings and by the nature of the controversy. The bill and answer normally determine whether the management is antagonistic to the stockholder, as Central R. Co. v. Mills, 113 U. S. 249, and Doctor v. Harrington, supra, indicate.3 The management may refuse or fail to act for any number of reasons. Fraud may be one; the reluctance to take action against a close business associate may be another; honest belief in the wisdom of the co…
  • Venner v. Great N. Ry. Co., 209 U.S. 24 (U.S. 1908)
    …iff’s controversy is with both, and both are rightfully and necessarily made defendants, and neither can, for jurisdictional purposes, be regarded otherwise than as a defendant. Davenport v. Dows, 18 Wall. 626; The Central Railroad Company v. Mills, 113 U. S. 249; Railroad v. Grayson, 119 U. S. 240; Doctor v. Harrington, 196 U. S. 579; Groel v. United Electric Co., 132 Fed. Rep. 252, and see Chicago v. Mills, 204 U. S. 321. The case of Doctor v. Harrington is precisely in point on this branch of the case, an…

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