Railway v. Stringer.

RAILWAY V. STRINGER.

1. The several rulings in the case of the Baltimore and Ohio Railroad Co. v. Cary, 28 Ohio St. 208, are reaffirmed.

2. Where, in an action pending in a state court, the petition of the defendant for the transfer of the case to a Circuit Court of the United States is improperly overruled, such defendant is not bound, in order to preserve his right of removal, to disregard the overruling of his application, and proceed to perfect the transfer of the case; but may, without abandoning such right, remain in the state court, and prevent, if possible, the prejudicial effect of its erroneous ruling, by all the means authorized by the laws of the state.

ERROR to the District Court of Ashland county.

On the 2d day of June, 1870, the defendant in error filed his petition in the Court of Common Pleas of Ashland county, against the Erie Railway Company, to recover damages for being wrongfully ejected from a passenger train by the conductor of the defendants' train. He claimed damages in the sum of $5,000. Process was issued and duly served upon one of the company's station agents. On the 5th day of September the plaintiff in error, being a corporation created and organized under the laws of the State of New York, filed its petition, in the ordinary form, to remove the case for trial into the Circuit Court of the United States, and at the same time tendered a bond, in accordance with the act of congress.

The defendant in error filed an answer to this petition, on the 12th day of September, which is as follows:

"Now comes E. T. Stringer, and for answer to the pctition filed by the defendant to remove this case from this court to the next Circuit Court of the United States within and for the Northern District of Ohio, says that it is true, as stated in said petition, that the said Erie Railway Company were, at the time of the commencement this action, a corporation organized and doing business under the laws of the State of New York, and that the matter in dispute

Railway . Stringer.

between said Erie Railway Company and the said E. T. Stringer, exceeds the sum of $500, exclusive of costs."

Said E. T. Stringer, further answering said petition, says: "That the Erie Railway Company is a company of another state than Ohio, to wit, of the State of New York, and that on the day of —, A. D. 1870, said Erie Railway Company did lease from the Atlantic and Great Western Railway Company the exclusive right to the use and control of said road for the term of years from and after the making of said lease; that a portion of the said Atlantic and Great Western Railway, so leased to the said Erie Railway Company as aforesaid, is in the State of Ohio."

And, further answering, he says: "That at the time of the committing of the grievances complained of by him in his petition filed in this case, and for which he has brought suit, the said Erie Railway Company were the lessees of the Atlantic and Great Western Railway Company, and as such lessees waived their right to remove this cause from this court, as prayed for in said petition."

To this answer, the plaintiff in error replied on the same day, as follows:

"And now comes the said Erie Railway Company, and for replication to the answer of the said E. T. Stringer says: It ought not to be barred of its right to remove said action to the Circuit Court of the United States, as prayed for in its said petition, because it says that it does not run and operate said Atlantic and Great Western Railroad under the lease from the said Atlantic and Great Western Railroad Company, such as is contemplated by the said statute, but under a permission or lease made and given by Reuben Hitchcock, a receiver of the said Atlantic and Great Western Railroad Company, appointed by the Court of Common Pleas of Summit county, Ohio, and under the authority of the said last-named court, during the pendency of a certain action therein pending, a copy of which lease or permit is hereto attached, marked 'A,' and made a part hereof; that it runs and operates said railroad solely

Railway v. Stringer.

under and by virtue of said instrument, and not otherwise; that it in no manner, by the tenor of said instrument, waived its right to have said action removed, as prayed for, nor that it in any manner waived or lost its right under the lease to remove said action, and it prays as in said petition."

The lease referred to, attached to this reply, bears date February 24, 1870, and is a contract between Reuben Hitchcock, as the receiver of the Atlantic and Great Western Railroad Company, setting forth that it is made in pursuance of an order of the Court of Common Pleas of Summit county, Ohio, and an order of the Supreme Courts of the States of New York and of Pennsylvania. The lease, by its terms, is to continue through the receivership of said Hitchcock, the lessor, unless sooner put an end to by order of the court, upon cause shown, and by the terms of the lease the Erie Railroad Company, is to maintain the road in good order, and operate it for seventy per cent. of the gross earnings thereof.

At the October term of 1870, the cause came on to be heard upon the petition of the Erie Railway Company to remove the action to the circuit court, and the following is the journal entry of the decision of the court:

"This case came on to be heard upon a petition, answer, reply, and exhibits, on consideration whereof, the court find that the petitioner is a citizen of the State of New York; that the said E. T. Stringer is a citizen of the State of Ohio; that the amount in controversy exceeds $500, exclusive of costs; that the said Atlantic and Great Western Railway Company is an Ohio corporation, and railroad in the State of Ohio, and that the petitioner is in possession of and running and operating said Atlantic and Great Western Railroad under the lease or instrument attached to the replication; and therefore the court hold and adjudge that, by virtue of the act of the legislature of Ohio, passed March 19, 1869, the petitioner waived its right to remove said cause to the Circuit Court of the United States, and refused to allow the prayer of the petitioner, and ordered the said

Railway v. Stringer.

petition to be dismissed, to which ruling of the court the said Erie Railway Company excepted."

Afterward, upon the 9th day of November, 1870, and after the overruling of its petition for removal, the Erie Railway Company filed, under protest, its answer to the petition of the defendant in error against it, to which the defendant in error replied, and the issue thus made up between the parties was twice tried by a jury, the plaintiff in error having demanded a second trial under the statute.

On the second trial, at the March term, 1871, the jury rendered a verdict in favor of the plaintiff below.

A motion was made to set aside the verdict, which was overruled by the court, and judgment was entered against the plaintiff in error. A bill of exceptions was taken upon the trial, and the evidence is set forth in the record.

A petition in error was filed in the district court by the plaintiff in error, and the judgment of the court of common pleas was affirmed. A petition in error has been filed in this court to reverse the judgment of the district court and court of common pleas.

Among the errors assigned, both in the district court and here, the plaintiff in error alleges that the court of common pleas erred in overruling its petition for removal, and in proceeding with the action after the filing of such petition.

S. Burke, for plaintiff in error:

On the subject of removal from a state to a United States court, see Insurance Co. v. Morse, 29 Wall. 445; Railroad Co. v. Cary, 28 Ohio St. 208. As to waiver, the common pleas lost all jurisdiction in the case after the petition to remove was filed, and its subsequent acts were void. 19 Wall. 214; 20 Wall. 445.

John McSweeney, for defendant in error.

SCOTT, J. The plaintiff in error is a corporation created solely by the State of New York, and is therefore to be regarded as a citizen of that state. And the fact that it is

Railway v. Stringer.

operating a railroad of another corporation, part of which lies within this state, under a lease from the receiver of the latter corporation, does not give it the character of an Ohio corporation, or affect its status as a citizen of New York. It was so held by this commission in the case of the B. § O. R. R. Co. v. Cary, 28 Ohio St. 208. And we see no reason to doubt the correctness of the views there expressed, and do not hesitate to reaffirm the doctrine of that case. Indeed, it would not be otherwise, even if the plaintiff in error were the absolute purchaser of the property and franchises which it is now operating and using as a lessee. State v. Sherman, 22 Ohio St. 411. The laws of this state which authorize foreign corporations to make contracts and transact business within their appropriate spheres of action, in this state, do not purport to create domestic corporations, but merely to permit and regulate the action within this state, of existing foreign corporations.

The plaintiff in error, then, being sued by a citizen of this state, in the Court of Common Pleas of Ashland county, had a right, as a citizen of another state (the amount in controversy being more than $500), to ask for the removal of the case into the Circuit Court of the United States. Such right is clearly conferred by the judiciary act of congress of 1789. Plaintiff in error, in due time, exercised this right, by petitioning, in due form, for such removal, and complying in all respects with the requirements of the act of congress in that behalf. The court of common pleas overruled the application for removal, on the sole ground that, by virtue of the act of the legislature of Ohio, passed March 19, 1869, the petitioner had waived its right to such removal. The statutory provision referred to is as follows: "Provided that it shall be regarded as one of the conditions upon which a railroad company of another state may lease or purchase a railroad, the whole or any part of which is in this state, or make any arrangement for operating the same, under the provisions of this section, that such railroad company of another state thereby waives the right to remove any case from any of the courts of this state to any