Whether Chief Justice Marshall had in mind a constitutional amendment or an act of Congress when he spoke of legislative consideration is not clear. At any rate, not until 1940 did Congress enact a statute to confer on federal district courts jurisdiction of civil actions (involving no federal question) "between citizens of different States, or citizens of the District of Columbia, the Territory of Hawaii, or Alaska and any State or Territory."[510] In National Mutual Insurance Co. v. Tidewater Transfer Co.,[511] this act was sustained by five judges, but for widely different reasons. Justice Jackson, in an opinion in which Justices Black and Burton joined, was for adhering to the rule that the District of Columbia is not a State, but held the act to be valid nevertheless because of the exclusive and plenary power of Congress to legislate for the District and its broad powers under the necessary and proper clause.[512] Justice Rutledge, in a concurring opinion, in which Justice Murphy joined, agreed that the act was valid and asserted that the Ellzey case should be overruled.[513] Chief Justice Vinson in a dissent in which Justice Douglas concurred[514] and Justice Frankfurter in a dissent in which Justice Reed joined[515] thought the act invalid and would have adhered to the rule in the Ellzey case. The net result is that the Ellzey case still stands insofar as it holds that the District of Columbia is not a State, but that under Congressional enactment citizens of the District may now sue citizens of States in the absence of a federal question, on the basis of no statable constitutional principle, but through the grace of what Justice Frankfurter called "conflicting minorities in combination."[516]
CITIZENSHIP, NATURAL PERSONS
For purposes of diversity jurisdiction State citizenship is determined by domicile or residence, for the determination of which various tests have been stated: removal to a State, acquiring real estate there, and paying taxes;[517] residence in a State for a considerable time;[518] and removal to a State with the intent of making it one's home for an indefinite period of time.[519] Where citizenship is dependent on intention, acts may disclose it more satisfactorily than declarations.[520] The fact that removal to another State is motivated solely by a desire to acquire citizenship for diversity purposes does not oust the federal courts of jurisdiction so long as the new residence is indefinite or the intention to reside there indefinitely is shown.[521] But a mere temporary change of domicile for the purpose of suing in a federal court is not sufficient to effectuate a change in citizenship.[522] Exercise of the right of suffrage is a conclusive test of citizenship in a State, and the acquisition of the right to vote without exercising it is sufficient to establish citizenship.[523]
CITIZENSHIP, CORPORATIONS
In Bank of United States v. Deveaux,[524] Chief Justice Marshall declared: "That invisible, intangible, and artificial being, that mere legal entity, a corporation aggregate, is certainly not a citizen; and consequently cannot sue or be sued in the courts of the United States, unless the rights of the members, in this respect, can be exercised in their corporate name." He proceeded then to look beyond the corporate entity and hold that the bank could sue under the diversity provisions of the Constitution and the Judiciary Act of 1789 because the members of the bank as a corporation were citizens of one State and Deveaux was a citizen of another. This holding was reaffirmed a generation later, in Commercial and Railroad Bank of Vicksburg v. Slocomb,[525] at a time when corporations were coming to play a more important role in the national economy. The same rule, combined with the rule that in a diversity proceeding all the persons on one side of a suit must be citizens of different States from all persons on the other side,[526] could in the course of time have closed the federal courts in diversity cases to the larger corporations having stockholders in all or most of the States.
If such corporations were to have the benefits of diversity jurisdiction, either the Deveaux or the Strawbridge rule would have to yield. By 1844, only four years after the Slocomb Case, the interests of corporations in docketing cases in the federal courts as citizens of different States appeared more important to the Supreme Court than the weight to be attached to precedents, even those set by John Marshall, and in Louisville, Cincinnati, and Charleston R. Co. v. Letson,[527] both the Deveaux and Slocomb cases were overruled. After elaborate arguments by counsel, the Court, speaking through Justice Wayne, held that "a corporation created by and doing business in a particular State, is to be deemed to all intents and purposes as a person, although an artificial person, an inhabitant of the same State, for the purposes of its incorporation, capable of being treated as a citizen of that State, as much as a natural person."[528]
In the Letson Case the emphasis is upon the place of incorporation of a joint stock company as something completely separate from the citizenship of its members. In succeeding cases, however, this fiction of corporate personality has undergone modifications so that a corporation, though still a citizen of the State where it is chartered, is such by virtue of the jurisdictional fiction that all the stockholders are citizens of the State which by its laws created the corporation.[529] This presumption is conclusive and irrebuttable and resembles in many ways the English jurisdictional fiction that for providing remedies for wrongs done in the Mediterranean "the Island of Minorca was at London, in the Parish of St. Mary Le Bow in the Ward of Cheap."[530] This fiction creates a logical anomaly, which the Letson rule had avoided, in those cases in which a stockholder of one State sues a corporation chartered in another State. Although all stockholders are conclusively presumed to be citizens of the State where the corporation is chartered, an individual stockholder from a different State may nevertheless aver his actual citizenship so as to maintain a diversity suit against the corporation.[531] These rulings lead to some extraordinary results, as John Chipman Gray has indicated: "The Federal courts take cognizance of a suit by a stockholder who is a citizen, say, of Kentucky, against the corporation in which he owns stock, which has been incorporated, say, by Ohio. Since he is a stockholder of an Ohio corporation, the court conclusively presumes that he is a citizen of Ohio, but if he were a citizen of Ohio, he could not sue an Ohio corporation in the Federal courts. Therefore the court considers that he is and he is not at the same time a citizen of Ohio, and it would have no jurisdiction unless it considered that he both was and was not at the same time a citizen both of Ohio and Kentucky."[532]
The Black and White Taxicab Case
These fictions of corporate citizenship make it easy for corporations to go into the federal courts on matters of law that are purely local in nature, and they have availed themselves of the opportunity to the full. For a time the Supreme Court tended to look askance at collusory incorporations and the creation of dummy corporations for purposes of getting cases into the federal courts,[533] but as a result of the Kentucky Taxicab Case,[534] decided in 1928, the limitation of collusion lost much of its force. Here the Black and White company, a Kentucky corporation, dissolved itself and obtained a charter as a Tennessee corporation in order to get the benefit of a federal rule which would condone an exclusive contract with a railroad to park its cabs in and around a station whereas the State rule forbade such contracts. The only change made was of the State of incorporation. The name of the company, its officers, and shareholders, and the location of its business all remained the same. Yet no collusion was found, and the company received the benefit of the federal rule—a measure of salvation by being born again in Tennessee. The odd result in the Taxicab Case, whereby citizens of Kentucky could conduct business there contrary to State law with the sanction of the Supreme Court of the United States, did not stem solely from the rule that the citizenship of a corporation is determined by the State of its incorporation, but also from this rule combined with the rule of Swift v. Tyson,[535] another by-product of diversity jurisdiction.
THE LAW APPLIED IN DIVERSITY CASES: SWIFT v. TYSON