CHICAGO,. M.
& ST. P.
RY. CO. 'II.
V.
BECKER.
.849
CHICAGO, M. & ST. P. Ry. CO.
BECKER and others.
(Ct'rcuit Court, D. Minnesota. December Term, 1887.)
2.
8.
4.
5.
Minn!lsota act of March 9, 1885. entitled" An act relating to foreign corporations doing business in this state," provides that in suits or proceedings :arising in that state in which a foreign corporation shall be a party, if such corporation shall make application to remove any such suit 1Oto a federal court, it shall be liable, to certain penalties. Held, that the act is repug-nant to the constitution oithe United States, and void, as being designed to deprive a citizen of another state of the right to sue and be sued in a federal court. CORPORATIONS-DoUESTIC CHARACTER-LAWS MINN. 1881",oH. 221. The Chicago, Milwaukee & St. Paul Railway Company, a Wisconsin corporation', is not constituted a domestic corporation by Laws Minn. 1881,c. 221, which authorizes that company to construct and operate'roads in Minnesota, provided that it shall be deemed a domestic corporation in all procedings upon causes of action arising in .that state; following Mahoney v.Railway (}o., 21 Fed. Rep. 817. ' CONSTITUTIONAL LAW-INTERSTATE COMMERCE-REGULATION OF SWITCHING CHARGES. l;lailroad ,service known as "switchin.ll;" is local. and the charge made for it is not a part the through rate fixed beforehand. and has no ref!lrence to intel'state shipment, but may be regulated by a commission appointed 'under a state act by virtue olthe police power of the state. SAME. If railroad known as "switching" be an act of interstate commerce, the price to be charged for it may neverthllless be regulated by a commission appointed under ,a state act, as such regulation would not refer to the carrying of f'reight the limits of the state. 1 ..... SAME.:..;.REGtn.A'rION OF SWITCIUNG CHARGES-COMPULSORY PnOCEEDINGSDUE PROCEss OF LAW. The compelling of a railroad company to comply with an order 1'ates made by a commission appointed under the Minnesota act of'March 7, 1887,for regulating common carriers, isa due process of law, and in such a case tbe company cannot be heard to complain that the act of the commissioners operated to take the property of the company for public uses without process of law.
On Motion for an Injunction to restrain defendants, George L. Becker, Horace Austin, and John L. Gibbs, as the railroad and warehouse Commission of the state of Minnesota, from enforcing a certain order directed to the complainants, the Chicago, Milwaukee & St. Paul Railway Company, made by said commission for regulating the rll.tes to be charged for switching in the city of Minneapolis. Flandrau, SquireB Outcheon; for complainants. M08e8 E. Olapp and Geo. P. Flanery, for defendant. NELSON, J. This suit is brought by the complainant against the rail.road commissioners of the state of Minnesota, and a motion is made for lAs to what is a regulation of comJ;Ilerce b!ltween the states, within the constitulional provision reservinll: the exclusive right to cOllll'ress to regulate such commerce, see Pearsen v. Distillery; (Ipwll,)M N. W. Rep. 1, and note.
v.32F.no.14.-.;54
850
FEDERAL REPORTER.'
"
, an injunction on the bill of complaint and supporting affidavits to restrain the defendants·from enforcing ,an ,order made by them:fixing the maximum charge for certain services rendered in the city of Minneapolis " called "switching.'" The bill ofcomplaint is as follows, in substance: First, it alleges that the complamant is a railway corporation orgitnized, and existing by and under the laweof the ofWiscpI1'sin. Th,at Said defendants co mpose and are a body politic, created under an act' of the legislafure of the state of Minnesota,. approved March 7, 1887, and entitled" An act to reguu+te common. carriers, and crell,ting the.railroad an,d ware40use commission of the state of Minnesota, and defining the duties of such sion in relation to common carriers," and that said defendants are vested -with all the powers granted by said act, and none:bther. The bill then .sets out t4at the complainant has,cpnstr.ucted and owns a from .chicago to Minneapolis j Minnesota, .with many other lines running through other states and territories;a.nd iSR common carrier of pa!:lsengers and, {rf?ightj that at Minneapolis it is in the ()rdinarl 'tninsaction of its duties and business, to receive and deliver man.y cars ,from and to shippers of freight, an4':fromandto other railroads, many ,'!?{;\'1';l\ich said 6ity,.imd,are also cpmmon in the receipt and delivery of such cars it is compelled to move them short the,m. .and long distances, and take them out of the trains of cars, into othertraine of cars destined for other points, and' to deliver them to' ffreight, and reeeiye them from shippers or freight,.lUI of which requires many movements of such cars by the aid and use of 10.-comotive .,engines, and many, in such. service; ,that such workis knowaaand called"switching," and is usually perfornied,in and ,ibot)t the: lermipal. pfcotllplainant, but inmariy.cases ·requires such cars to be moved and hauled to considerable distances outOf and Buch yar41l terminal grourids,and' other. tracks ofcoinplaimintand of other railroad companies; that to enable this switching to be properly and satisfactorily performed complainant trfl:qks in and about said city of l\'Iinne&P()lis',and .proyi4ed mal1:Y l()comotives" .l¥ld empJoys mep). alld has furni,shed large spd. terminll,l grounds, ,and many 'proV,ided nece.ssarYJ all of which involve aJ;lq. ,cqptiI}\la,lly ,necessitll:teee;penditure of very Xarge sums of mone)f;tha.t for the sp,mplainant hasalways:cp'-arged performance of this switching a reasonable and fair conwen$Jl,tion, to those for whom said wo'was done, to-wit, $1.50. percar, and never charged more than a rE¥lsonable and fair compensation therefor; that the said defendants on the seventh -day of, July, 1887 ,acting as such railrQad and warehollse commissioners ,the ilJ,the of a .thori£y claimed by them to be conferred upon this commission by the laws of. the. staw .of Mionesota.,but, as asserts, and avers, .'withQut' any jurisdiction whatever, issued an {)rder which is in the wOl'dsand following; t'hatistosat: ;
CHICAGO,
¥.
& ST. P. RY· .cO.
'I).
851
"OFFICE OF WAREHOUSE .t RA,lLROAD COMMISSION. "ST. PAUL, July 7,1887. "To the Ohicago, Milwaukee & St. Paul Railway Oompany: Whereas,
all railroad owning and operating terminal and switching facilities at or within the city of Minneapolis within th,is state, with the exception of the Chicago, Milwaukee & St. Paul Railway Company, pursuant to subdiVision ' D ' of section 8 of an act entitled 'An act to regulate common carriers, and creating the railroad and warehouse 'commission of the state of Minnesota, and defining the duties of such commission in relation to common carriers,' approved March 7,1887, have filed with this commission, Gopies of their several schedules of rates and charges for switching cars on their respective tracks at and within said city; and whereas, it appears from the said schedules that the rates,and Qharges made by said companies vary from 25 cents per car for empty CIWSto two dollars pel; ,car for loaded cars; and whereas, said cqmmission"aner due and careful inquI'ry andconsideraticln, do find, that each and every charge in excess of one dollar per car for switching within the limits of said city of Minneapolis isu,nreasonable and, excessive compensation for the sel'viceperformed: now, therefore, it is ordered and determined by thiseommiSSion, pursullnt to the authorj.ty in them by the aforesaid legislative act, that all such schedules be changed by striking therefrom all chargPB or rates in excess of one dollar per car for the switching or transfer thereof, and inserting in roolli of the words and' figures stricken out the words ·one dollar,' or the appropriate sign or figure therefor. It is the object and purpose of this order to establish one dollar the maximum charge forthe SWitching 01' transfer of any c,arat or within the limits of said city, without regard to distance, or the, kind or merchandise with which the car so switched or transferred mar be loaded. " "By order of the commission."
The compl!lrinant further, alleges that the defendants claim and insist, and will attempt to enforce their claim against the complainant; and that made and fixed ,by the defendants for these services .are utterly inadequate to compensate the complainant for the perfol'll1ance of such services. They further allege that they have procured appliances and instrumentalities for this switching work, and that, if said order were enforced, it would amount to a confiscation and destruetiOIi of, said tracks, appliances, yardS, instrumentalities; so procured for the purposes of switching;' a.nd would damage this complainant many thousands of dollars; further, that it would involve complainants, in numeroUs lawsuits, and would hinder and obstruct the complainant in the performance of its duties to the public as a common carrier. They also allege that fully three-fOUrths of all such switching done by the complainant is of cars to be transported to other states, and that this.is an act of interstate commerce, subject to the control of congress alone. A plea to the jurisdiction of this court is interposed by defendants, and an answer has been filed by the commissionersdeqying substantially all the allegations in complainant's bill. " .: The· plea to the jurisdiction,allegingas a reason for, a .dismissal ,of the bill of complaint that the complainant, by of the act of the Minnesota legislature,· (Laws 1881, p. 782,) isa dOqlestic corporation, CarinotpreVail. ;,This court jl,l ,the case. ofMahpney y. Railway 0<>. J 21
852
FEDERAL REPORTER.
Fed. Rep. 817, on a motion to remand, considered the act of the legislature referred to, alid held that it did not create a domestic corporation, and "that the C., M. & St. P. Ry. Co., which was a Wisconsin corporation, was still one." The plea is not sustained. But it is urged on the argument, in opposition to the motion for an injunction, that the complainant is a domestic corporation by virtue of the ,act of the Minnesota legislature approved March 9, 1885. This act applies to all foreign corporations, and is intended to apply to this complainant. The act is entitled "An act relating to foreign corporations doing business in this state." Section 1: "Where by the general or special laws of this state relating, or in any way appertaining, to any foreign corporation, it is provided, in substance or effect,that, in suits and proceedings upon causes of action arising in this sllchcorporation shall be a party, such corporation shall be deemed'to be a domestic corpbration, it·is hereby provided that, if-such corpOl'atlon shall mak!.' application to remove any such suit or proceeding into the United States circuit or district or federal court, it shall be liable to a penalty of not less than one hundred dollars, nor more than ten thousand dollars, f6r each application so made, and for each offense committed in making such application;" The second section provides that, in addition to the said penalty, such corporation shall forfeit all right to transact business within this state, and shall be liable to a penalty of not less than $1,000, nor more than $10,000, day for each and eYery day that it shall do business within this sta te after such forfeiture. Sections 3 and 4 provide for the issuance of a certificate or permit upon which business may be done, and provide for penalties to be imposed il;l case sU(lh corporation remove any case from the state to the federal court. This applies also to insurance companies. Section 6 reads as follows: "No foreign corporation now or hereafter doing business in this state shall have, possess, or exercise any right, privileges, or immunities, not possessed by domestic corporations; but, unless otherwise provided by law, shall in all respects be deemed, if it remain in this state for sixty days next ensuing after the passage of this act, to be a domestic corporation, and entitled to all the rights, privileges, al,ld immunities of domestic corporations, SUbject to all the laws of this state which are now in force, or may hereafter be enacted." The next section provides penalties for violation of the preceding seetionjprovides for the' forfeiture of any license or certificate that has been given to foreign corporatiol1s, if they transact any business thereafter; also provides that no foreign corporation shall seek the federal courts in any suit, under penalty of having its license revoked, and being liable to fine, as contained in section 1. Previous to the passage of this act) the complainant had for years maintained and operated a railway in the state of Minnesota by license, and it hadacquired, by consent·ofthe state, property and franchises of existing railroads, and had been required as early as 1872 to connect in the city 'Of St. Paul two of itg' roads thus obtained as its road'in St. PatH; and other roads traversing westwll.rdly to the state line had been had purchased With the sanction of the state, and other vast
CHICAGO, M. !I: ST. P. RY. CO. 'V. BECKER.
853
been granted. Its charter is obtained from the state of Wisconsin, and there is no contract between the company and this state by virtue of which it derived corporate rights on condition that it became a domestic corporation. Yet by this legislative act of 1885, after it had operated its railway for years in the state of Minnesota, and invested large amounts of money, not merely by tacit consent, but by express legislative sanction, it is declared to be a domestic corporation, as a penalty for remain. ing and transacting business in the state. While a corporation is a citizen of the state in which it is created, it is not entitled to recognition, as an absolute'right, in any other state, and conditions not inconsistent with the constitution of the United States can be imposed by another state which recognizes it; but its right to sue in the federal court depends alone upon the federal constitution, and no state law can restrict it. This is a constitutional privilege,-an absolute right,-and any state law which would limit it, and which provides that it is unlawful for a foreign corporation .to seek the federal court in pursuance of the constitutional privilege; is repugnant to that instrument, and is void. The purpose of this state law of 1885 manifestly is to interfere with the jurisdiction of the federal court, and, as a condition of transacting business in Minnesota, it deprives the foreign corporation of its constitutional privilege by declaring it a domestic corporation if it remains in the state 60 days after the passage of the act. The first section of the act announces its purpose, and penalties are fixed in other sections; indeed, in nearly every part of the act the purpose is distinctly expressed to interfere with the jurisdiction of the federal court. It is not possible to separate the statute into parts, and find a section which does not avow that the purpose and object of the act is to prevent foreign corporations transacting business in the state of Minnesota fromexercizing a privilege conferred upon them by the constitution and laws of the United States. The act is an attempt to oust the jurisdiction of the federal court, and to compel a foreign corporation, without an election in fact, to become a citizen of the state,and to forM it to abandon the benefit contemplated by the federal constitution. This E'tatute falls within the decisions of the United States supreme court in the cases of Insurance Co. v. Marse, 20 W811. 445; Doyle v.Insurance Co.· 94 U. S. 535; Barron v.Burwide, 121 U. S. 186, 7 Sup. Ct. Rep. 931. ThE:' statute makes the right of a foreign corporation doing business in the state dependent upon its consent to forfeit its constitutional privilege. Such a statute is repugnant to the constitution and laws of the United States, and is void. '1'hi8 brings me to the principal question involved in this controversy. It is claimed by the complainant that the order of the commission set up in the bill is a regulation of interstate commerce, and imposes no obligation to obey it, and consequently the attempted enforcement should be restrained. The supporting affidavits show that the cars switched by the complainant in the majority of cases are loaded with goods ll.nd;nierchandise destined to points outside the limits of the state of Minnesota. The complainant alleges that three-fourths of the traffic is interstate com..; mel-ceo If this is so, itjanot important. The underlying queStion pre.:.
854 sented
FEDERAL Rll;PORTER.
order of thesttttecommission regulate interstate comlfind'no warrant for the claima,dvanced that it is an interference with, or regl;llation ofl interstate commerce, and encroaches upon the .powers of the Jedel'al government. It is true that the loaded cars· switched·contain freight tobe transported to other8tates, or received from' other states, as well as local freight foroI'. from points within the state of Minnesota; but unles8the switching service is performed by the complainant; and cars are.trimsferred from a: shipper's warehouse or mill to betI'llnSportedoqt of ·the state over a line of railway other than its .own, nocbarge is made. The Case presented is this: In .order to afford facilities to shippers,.the complainant has constructed short lines of road, or side-tracks or switches, so called,from its yard or depot or main lines, running .over and acl'OSS the streets .and highways to the various mills and manufacturing establishments in the city of Minneapolis; and its switches are so b.uilt as to enable it to take carS from the shippers at the mills; .and deliver them to other lines of railway, or deliver cars to signees ,receivedbyit from other roads. When service is performed, and the cars are to be transported from the city of l'tfinneapolis over other roads, and. when carsooming into that city over other roads are taken by the cOmplainant ovel,' its own switches, and delivered to other roads or to consignees, a chargl:l orone dollar and fifty cents per car is exacted . for this switching service rendered, which is claimed to be reasonable and · but if the cars are to be transported over its own line to the point of destination, or come into the city over complainant's main road, the service is free, and this separate and distinct charge, when made, is only, fOr this local .switching. This charge. is not a part of the through rate fixed and determined beforehand, and has no reference to interstate shipment. ,The-transportation of cars over the switches from the warehouses or mills to the depot, or from the depot to these mills, can be regulated in many respects by the commissioners, and the rate for performing theservice fi:x:ed by virtue of the police power of the state, in the same manner as the carriage by dray per load or distance is established for the public good. And I see no difference in the principle to be applied in such cases, although, incidentally, they ma.y be connected with interstate commerce. The service is local, l;tnd there is nothing upon the faoe of the order oBhe commissioners indicating that it isintencled to regulate interstate oommerce. Even if it is conceded that this carrying of freight over thel>witohes is an act of interstate commerce, it does not necessarily follow that the order of the commission affecting this traffic is in violation of the constitution of the United States. It is not every act that afleets such COIllmerce thltt amounts to a regull;l.tion of it; and this order fixing the price per. cat foo:s.ervice rendered, and to which the orderapplies, is not related to the, for carrying the freight outside the limitsof the state of Mjnnesota, and is not apttrtrof it. ' .. . It is urged that the charge fixed by, the commission is less than the cost of sElrvicerendered, and that, the act of the· commissioners is a. taking of priva,te property for public use without just compensation, and' without due ;process of.Jaw. The, 1887 p;rovides that when the
ANDERSON' fl. APPLETON.
855
rates are fixed by the commission, Hille cotnpany do not obey it within 10 days, proceedings ,by mandamus can be instituted 'by the commissioners to compel the railroad company to comply with the provisions
of the act in regard to posting in their several depots the prices and rates fixed by the commission; and, if such proceeding is not instituted by the 10 days, the corporation feeling itself thereby may take an appeal to the district, court of the state; and when the appeal is taken, and proceedings are brought in the district, it may be proceeded with as a civil action. This is due process of law. The bill and affidavits introduced by complainant tend to show that the rate fixed ,the commission. iii less thlm the cost of service, and should not be enforced, but the answer qf the defendant denies it. A q nestioll is thus presented which I shall not determine upon this motion, but leave it until the final· hearing,. . . ..'. The motion, f()r a. preliihinary injunction is denied, and the restraining order vacated. .'. . T1)e case of.the St. Paul, Minneapolis & Omll;ha. Railroad Com.pany against the defendants is 8ul>stantially the same,lI.nd the same be entered.' " , '.' . . "
ANDERSON tI. ApPLETON
and Decembl:!r 1, 1887.)
«(}IrQuit OfY!ll1't, 8. D. NtnlJ York.
1. "
. , "iI: .·. REMOVAL OJ!' CAUSES-PETITION J!'OR ENTIW OJ!' COpy OJ!' I\S, a
I
, .Defendant made the objection to theplai'ntijf'smotion to remand the cause to the state:.:court.that. p.,n. J.hill :mQtion. onlY. the. pe.ti.tion for t.ll e rempva\'"of . the cause to the Unitlld court could be Held, that a ae· fendant,'1lnp,ot.make .his Cause bY'. tilerelyassertingth'a.t 'itig. If disputeJs jurisdiction of the .federal federal court will; ott motion, rem,and the case' as soon as it sees the complaInt. 8. SAYE-CI'KZENSHIP-AcT OJ!'MARCJ1'S; 1887. , One of the.defendants resided in the state of New York. She removed a cause begun in the .. Y.0.. rk supreme. court to the Unit.ed State.s for the BOijthern dlstrtct (>f New York, Held. that uuller theVnlted St,ates 8, to the removalof ',Cl'l!1ses, proyides . that any suit '* *.*1Jl&ybe removed by the defendant a hon-residelit of that state, she was not authorized to remove the SUIt.
t.
Plaintijf commenced suit in the New York supreme court toestlibtish II. wfll wilLof,realestate., One of the defen<,la.I),ts rllmov:ed, the the United States, circuit court fOr the Southern district of New York, but did not enter the record. Delri, that plaintiff could, without leave, enter a copy of i.i.iOn. order,and.bond, ",nd move 't.o reman.d the cause und.er. a rule of $is ado,pted' October 1, 1883, Which prOVides that. wh.en a cause 11as been temond from; a 'state court, either party: may, forthWith, causeI' copy of the ,record to be ,filed in this court, .etc.
S:Ut:E....."MOTION TO REMAND-WHAT CoNSIDERED.
In an action to estaWisb a will as a will of rfilal estate, where $ere were a large JIumber of defendants in'different states, one of the defendahtSlremoved cause 'ftom the state 'court to the United States circuit court. Held, ,tbat lIoJlilIgle, coy,t,,,O!ersy', and an action to establish a will is not a itl removal is not authorized by the United States act of 1887, relatmg to the
CONTRoVJ!lR&y-ACT OJ!' MARCH