COWLES
v.
MERCER COUNTY
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A board of supervisors created by Illinois as a corporation was sued in federal court by citizens of other states on a contract dispute, raising the question of whether such a local government corporation could be subjected to federal jurisdiction. The Supreme Court held that a corporation created by a state and conducting business within that state must be treated as a citizen of that state for purposes of federal diversity jurisdiction, and that the power to contract with out-of-state citizens necessarily implies liability to suit by those citizens in federal court, regardless of any state law restrictions on suability.
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The CHIEF JUSTICE delivered the opinion of the court.
The record presents but one question which has not been heretofore fully considered and repeatedly adjudicated. That question is, whether the'board of supervisors of Mercer-County can be sued in the Circuit Court, of the United' States.by citizens of other States than Illinois. It presents but little difficulty.
The board of supervisors is a corporation created'by acts of the legislature of Illinois.
It has never, been doubted 'that a corporation, all the members of which reside in the State creating it, is liable to suit upon its contracts by the citizens of other States;'but it was for many years much controverted whether an alié-. gation in a¿ declaration that a corporation defeudan t was incorporated by a State other than that of the plaintiff, and established within its limits, was a sufficient averment of jurisdiction. And in all the cases, prior to 1844, it was held necessary to aver the requisite citizenship of the corporators. Then the whole question underwent a thorough, re-examination in the case of The Louisville, Cincinnati, and Charleston Railroad Company v. Letson;
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and it was held that a corporation created by the laws of a State, and having its place-of business within that State, must, for the purposes of suit, be - regarded as a citizen within the meaning of the Constitution giving jurisdiction founded upon citizenship. This decision has been since reaffirmed, and must now be taken as the settled construction of the Constitution.
In the case before us ,the corporators are all citizens of Illinois, and the corporation is liable to suit within the narrowest construction of the Constitution.
But it was argued that counties in Illinois, by the-law of their organization, were exempted from suit-elsewhere than in the Circuit Courts of the county. . And this seems to be the construction given to the statutes concerning counties by the Supreme Court of Illinois. But that court has never decided that a county in Illinois is exempted from liability to suit in National courts. It is unnecessary, therefore, to consider what would be the effect of such a decision. It is enough for this case that we find the board of supervisors to be a corporation authorized to contract for the county. The power to contract with citizens of other States implies liability to suit by citizens of other States, and no statute limitation of suability can defeat a jurisdiction given by the Constitution. ¥e cannot doubt the constitutional right of the defendant in error to bring suit in the Circuit Court of the .United States upon the obligations of the County of Mercer against the plaintiff in error. And we find no error in the judgment of that ¡court. It must, therefore, be
Aeeirmed.
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2 Howard, 497.
Cases With Similar Vibessemantic neighbors from the corpus
Citator
Cited By (38 total)
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Monell v. Dep't of Soc. Servs. of the City of N.Y., 436 U.S. 658 (U.S. 1978)…word “person” “to be used in a more limited sense,” as Monroe concluded. It is true that this Court had held that both commercial corporations, Louisville R. Co. v. Letson, 2 How. 497, 558 (1844), and municipal corporations, Cowles v. Mercer County, 7 Wall. 118, 121 (1869), were “citizens” of a State within the meaning of the jurisdictional provisions of Art. III. Congress, however, also knew that this label did not apply in all contexts, since this Court, in Paul v. Virginia, 8 Wall. 168 (1869), had held…1 / 2
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Owen v. City of Independence, 445 U.S. 622 (U.S. 1980)…ate corporations — were treated as natural persons for virtually all purposes of constitutional and statutory analysis. In particular, they were routinely sued in both federal and state courts. See 436 U. S., at 687-688. Cf. Cowles v. Mercer County, 7 Wall. 118 (1869). Local governmental units were regularly held to , answer in damages for a wide range of statutory and constitutional violations, as well as for common-law actions for breach of contract.19 And although, as we discuss below,20 a municipalit…
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City of Okla. City v. Tuttle, 471 U.S. 808 (U.S. 1985)…corporations were routinely sued in the federal courts and this fact was well known to Members of Congress.” Id., at 688 (footnotes omitted). See, e. g., Louisville, C. & C. R. Co. v. Letson, 2 How. 497, 558 (1844); see also Cowles v. Mercer County, 7 Wall. 118, 121 (1869). Thus William Blackstone wrote the following in 1765: “As for those things which a servant may do on behalf of his master, they seem all to proceed upon this principle, that the master is answerable for the act of his servant, if done…
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