The record discloses no instructions to L. 708, chap. 126), to the agreement or compact between the states of New Jersey and the jury requested by defendant below, and New York respecting their territorial limits and jurisdiction, vested exclusive jurisdicand jurisdiction, vested exclusive jurisdietion in the Federal government over the sea adjoining the two states, does not raise a Federal question which will sustain a writ of error from the Federal Supreme Court to a state court, where there is nothing in the agreement and confirmatory state statutes abdicating rights in favor of the United States, and the transaction simply amounted to fixing the boundaries between the two states. A contention, on a motion for a directed verdict, that the cession to the United States, in N. J. act March 12, 1846, of jurisdiction over a certain strip of land at Sandy Hook, vested in the United States exclusive legislative jurisdiction over the littoral waters extending 3 miles to the eastward of the coast line, presents a question respecting the exclusive legislative power of Congress under U. S. Const. art. I., § 8, cl. 17, which will sustain a writ of error from the Federal Supreme Court to a state court. B. The public laws of New Jersey are in force in the littoral waters of Sandy Hook peninsula below low-water mark, whether enacted prior or subsequently to the cession to the United States, by N. J. act March 12, 1846, of jurisdiction over a portion of that peninsula for military purposes. [No. 411.] no exceptions were taken by it to the charge of the court, which was not included in the bill of exceptions or case made. Defendant moved the court to direct a verdict in its favor upon the following grounds: "Defendant claims the right, under the statute of the United States confirming and approving the agreement as to boundaries between the state of New York and the state of New Jersey, to be free in navigating the main sea to the eastward of Sandy Hook peninsula, from the operation of any law of the state of New Jersey giving a right of action for injuries causing death, and claims that, under the statutes aforesaid, the jurisdiction of that state extends only to the main sea; that is to say, low-water mark along its exterior coast line, and to a line drawn from headland to headland across the entrance to the bay of New York. It therefore asks the court to direct the jury to return a verdict for the defendant, on the ground that it appears by uncontradicted evidence that the collision between the steamship Alene and the schooner James Gordon Bennett, to recover damages for. which this suit is brought, occurred upon the main sea and to the eastward of the Submitted January 16, 1905. Decided Feb- Sandy Hook peninsula, and at a distance of ruary 20, 1905. IN N ERROR to the Supreme Court of the State of New York to review a judgment of that court at a term held in and for the County of New York, in favor of plaintiff, in an action to recover damages for death occasioned by the sinking of a vessel as the result of a collision in waters alleged to be subject to the exclusive legislative jurisdiction of the United States, which judgment was affirmed by the Appellate Division of the Supreme Court for the First Depart ment, leave to appeal to the Court of Ap peals being denied. On motion to dismiss or affirm, Affirmed. Statement by Mr. Chief Justice Fuller: This action was brought in the supreme court of New York by Minnie Grube, as administratrix of John Grube, against the Hamburg American Steamship Company, to recover damages for his death, under the statute of New Jersey in that behalf, occasioned by the sinking of the James Gordon Bennett, a vessel owned by a New Jersey corporation, by the steamship Alene, belonging to the steamship company. There was a conflict of evidence as to the place of the collision, evidence being given, on the one hand, that it occurred in waters beyond the 3-mile limit of the coast of the state of New Jersey, and, on the other, that it occurred within the 3-mile limit along that coast. 25 S. C.-23. more than a mile to the eastward of low water mark upon the exterior line there of. "Defendant claims the right, by reason of the purchase by the United States of the Sandy Hook peninsula, and the cession to the United States by the state of New Jersey of jurisdiction over the same, and the the main sea to the eastward of it, for mililong continued use of that peninsula, and of tary purposes, to be free in navigating the main sea to the eastward of that peninsula from the operation of any law of the state of New Jersey, giving a right of action for injuries causing death, and claims that the main sea to the eastward of said peninsula to a distance of 3 miles from the shore is subject to the exclusive jurisdiction of the United States. United States. It therefore asks the court to direct the jury to return a verdict for the defendant on the ground that it appears by uncontradicted evidence that the collision between the steamship Alene and the schooner James Gordon Bennett, to recover damages for which this suit is brought, occurred upon the main sea and to the eastward of the Sandy Hook peninsula, and at a distance of more than a mile to the eastward of low-water mark, upon the exterior line thereof." The court denied the motion, and defendant excepted. The jury found a general verdict for plaintiff below, and assessed the damages. Judgment was entered thereon, | may be regarded as having been properly inwhich was affirmed by the appellate divi-voked by the second proposition, we feel sion of the supreme court, and a writ of justified in declining to sustain the motion error from the court of appeals was denied. to dismiss; and, retaining jurisdiction, we This writ of error was then allowed, and think the judgment must be affirmed. the case submitted on motions to dismiss or affirm. The jurisdiction of the United States over Sandy Hook is derived from the act of the legislature of New Jersey of March 12, 1846, Mr. Everett P. Wheeler for plaintiff in set forth below. N. J. Laws 1846, p. 146. error. In 1806 and 1817 deeds of the land included Mr. Gilbert D. Lamb for defendant in in Sandy Hook were given the United States, error. Mr. Chief Justice Fuller delivered the opinion of the court: The assertion by plaintiff in error that Federal questions were decided by the action of the courts below turns on the denial of the motion to direct a verdict on the two grounds above set forth. As to the first ground, the contention is that the act of Congress of June 28, 1834 (4 Stat. at L. 708, chap. 126), giving consent to the agreement or compact between the states of New Jersey and New York in respect of their territorial limits and jurisdiction, dated September 16, 1833, vested exclusive jurisdiction in the Federal government over the sea adjoining the two states. But there is absolutely nothing in the agreement and confirmatory statutes abdicating rights in favor of the United States, and the transaction simply amounted to fixing the boundaries between the two states. N. Y. Laws 1834, p. 8, chap. 8; N. J. Laws 1834, p. 118. The first proposition raised no Federal question. As to the second ground, the contention is that the cession by New Jersey to the United States of jurisdiction over a certain strip of land at Sandy Hook vested in the United States exclusive legislative jurisdiction over the littoral waters extending 3 miles to the eastward of the coast line thereof. Yet there was evidence introduced on behalf of defendant that the collision took place outside of that limit; and the trial court was not requested to instruct the jury that, if they found the collision to have occurred within that limit, the verdict should be for the defendant. The charge of the court is not before us, nor was any exception taken to any part of it, and the verdict and judgment must be held to have been rendered on the facts according to law. Hamburg-American S. 8. Co. v. Lennan, 194 U. S. 629, 48 L. ed. 1157, 24 Sup. Ct. Rep. 857. This being the situation, we hesitate to retain jurisdiction. Nevertheless, as clause 17 of 8 8 of article I. of the Constitutiont being simple conveyances of real estate for named money consideration. The New Jersey act of 1846 was merely one of cession, and the operation of the gen eral laws of New Jersey was reserved as therein provided. Ft. Leavenworth R. R. Company v. Lowe, 114 U. S. 525, 29 L. ed. 264, 5 Sup. Ct. Rep. 995; Chicago, R. I. & P. R. Co. v. McGlinn, 114 U. S. 542, 29 L. ed. 270, 5 Sup. Ct. Rep. 1005. Moreover, as was held by the circuit court of appeals for the second circuit, in Middleton v. La Compagnie Générale Transatlantique, 41 C. C. A. 98, 100 Fed. 866, the act did not purport to transfer jurisdiction over the littoral waters beyond low-water mark, and for the purposes of this case the public laws of New Jersey must be regarded as obtaining there, whether enacted prior or subsequent to the cession. Judgment affirmed. ever, over such district (not exceeding 10 miles and the acceptance of Congress, become the seat square) as may, by cession of particular states of government of the United States, and to exercise like authority over all places purchased by the consent of the legislature of the state in which the same shall be, for the erection of forts, magazines, arsenals, dockyards, and other needful buildings." 1. "That the jurisdiction in and over all that portion of Sandy Hook, in the county of Monmouth, owned by the United States, lying north of an east and west line through the mouth of Young's creek at low water, and extending across the island or cape of Sandy Hook from shore to shore, and bounded on all other sides by the sea and Sandy Hook bay, be, and the same is hereby, ceded to the said United States for military purposes; and the said United States shall retain such jurisdiction so long as the said tract shall be applied to the military or public purposes of said United States, and no longer." 2. "That the jurisdiction ceded in the 1st section of this act shall not prevent the execution on the said tract of land of any process, civil or criminal, under the authority of this state, except so far forth as such process may affect any of the real or personal property of the United States of America within the said tract; nor shall it prevent the operation of the public laws of this state within the bounds of the said tract, so far as the same may not be incompatible with the free use and enjoyment of the said premises by the United States for the purposes above "The Congress shall have power to exercise exclusive legislation in all cases whatso-specified." (196 U. S. 579) BERTHA DOCTOR and Katherine Sayles, defendant as would confer jurisdiction upon Appts., v. the United States circuit court for the southern district of New York in the cause within the meaning of the United States ReJOHN HARRINGTON, Dennis A. Harring-vised Statutes, and that, in arranging the ton, Sol Sayles Company, and Sayles, parties to this cause relatively to the conZahn Company. Courts-jurisdiction of Federal circuit court-diversity of citizenship. 1. The presumption that the stockholders of a corporation are citizens of the state which created it does not preclude them from asserting their actual citizenship to sustain the jurisdiction of a Federal circuit court of a suit brought by them as such stockholders. 2. The fact that the ultimate interest of a cor porate defendant may be the same as that of the complaining stockholders does not require, in arranging the parties to a cause, for the purpose of determining the jurisdiction of a Federal circuit court, invoked on the ground of diversity of citizenship, that such corporation be grouped on the side of complainants, where the bill alleges that the corporation is under a control antagonistic to complainants, and is made to act in a way detrimental to their rights. [No. 477.] troversy, the Sol Sayles Company must be grouped on the side of the complainants, with the result that citizens of the same state would thus be parties on both sides of the litigation, and thus deprive this court of jurisdiction." The bill is very voluminous, and, as it is agreed by appellees that the statement of appellants substantially states its allegation, We quote from appellants' brief as follows: "This action was brought by the appellants, as stockholders of the Sol Sayles Company, a corporation organized under the laws of the state of New York, for the purpose of vacating and setting aside a judg ment obtained by the appellees Harrington against the Sol Sayles Company in the supreme court of the state of New York, on October 28, 1902, and the levy and sale under an execution issued thereunder, and of requiring the appellees Harrington to deliver to the Sol Sayles Company certain shares of stock in the Sayles, Zahn Company, and certain bonds, belonging to the Submitted January 25, 1905. Decided Feb- Sol Sayles Company, which had been sold ruary 20, 1905. under such execution, and for other equitable relief. "In substance, the complainants allege in PPEAL from the Circuit Court of the their bill of complaint that they are citiA United States for the Southern Diszens of Morris county, New Jersey; that the trict of New York to review the dismissal, defendants Harrington are citizens of the for lack of the requisite diversity of citi-state of New York, and that the defendants zenship, of a suit brought by some of the stockholders of a corporation, in which the corporation is made a party defendant. Re versed. Statement by Mr. Justice McKenna: The bill in this case was dismissed by the circuit court on the ground that it had no jurisdiction upon the fact alleged, and certified to this court the question of jurisdiction. The following is the question certified. "Whether or not the complainants' bill of complaint showed that there was such diversity of citizenship between the parties complainant and parties defendant in this cause as would be sufficient, under the provisions of the United States Revised Statutes, to confer jurisdiction upon the United States circuit court for the southern district of New York, of this cause." The court further certified that it entered a decree dismissing the bill, "holding that it appeared from the said bill of complaint that there was no such diversity of citizenship between the parties complainant and Sol Sayles Company and Sayles, Zahn Company are likewise citizens of said state, both being incorporated under the laws of that state; that the Sol Sayles Company was organized with a capital stock of $100,000, divided into 1,000 shares of the par value of $100 per share, of which the complainants owned 500 shares and the defendants Harrington 500 shares; that, by an arrangement made between the owners of the stock, the voting power on a majority thereof was given to the defendant John J. Harrington, who directed the management of the affairs of the corporation, dictated its policy, and selected its directors; that on January 26, 1898, the defendant John J. Harrington caused the defendant Sayles, Zahn Company to be organized, for the purpose of taking over the business of the defendant Sol Sayles Company and of one Henry Zahn, and thereupon the property of the Sol Sayles Company and of Zahn were transferred to the Sayles, Zahn Company, which likewise was controlled by the defendant John J. Harrington; that the Sol Sayles Company received, in consideration of the transfer of its property, $50,000 of the capital stock | is not a collusive one to confer upon a court of the Sayles, Zahn Company, and subse- of the United States jurisdiction of a case quently subscribed for $50,000 additional of which it would not otherwise have cogstock. "It is further alleged that about February 1, 1899, the defendants Harrington, for the purpose of cheating and defrauding the Sol Sayles Company and the complainants of their interest in the assets of the Sayles, Zahn Company, fraudulently caused the Sol Sayles Company to execute and deliver to them, without any consideration whatsoever, its promissory notes, aggregating $23,700, which were utterly fictitious, and thereafter, and on October 3, 1902, the defendants Harrington, in furtherance of their fraudulent scheme, caused an action to be instituted, and a judgment to be recovered against the Sol Sayles Company, for the amount of the said promissory notes and interest which was alleged to have accrued thereon, the Sol Sayles Company being in utter ignorance of the nature of the action, and omitting to interpose any defense thereto. "This scheme resulted in the recovery of a judgment against the defendant Sol Sayles Company on October 28, 1902, for $27,357.28, in favor of the defendants Harrington, who thereupon caused an execution to be issued to the sheriff of the county of New York, against the property and assets of the Sol Sayles Company, under which execution the said sheriff levied on the shares of stock in the Sayles, Zahn Company, and also two bonds of the New Jersey Steamboat Company, which belonged to the Sol Sayles Company, and sold all of the right, title, and interest of the Sol Sayles Company in the said certificates of stock and in the said bonds, the said defendants Harrington causing them to be purchased for their own benefit; said shares of stock being then, as the defendants Harrington well knew, and have ever since continued to be, worth upwards of $200,000. nizance. The complainants are unable to secure any corporate action on the part of the defendant Sol Sayles Company to redress the wrongs hereinbefore set forth, nor are they able to obtain any redress at the hands of the stockholders of the said defendant Sol Sayles Company. The board of directors of said corporation is under the absolute control and domination of the defendant John J. Harrington, and the said Harrington, by reason of having possession of a majority of the capital stock of the said corporation likewise controls the action of the stockholders. Although requested for information with regard to the facts hereinbefore set forth, he has refused to give any information with regard thereto, and has declined to redress the wrongs of which complaint is herein made, or to give to the complainants any opportunity to lay before the board of directors or the stockholders of the defendant Sol Sayles Company the facts herein set forth."" To sustain the action of the circuit court in dismissing the bill the argument is as follows: (1) By a conclusive presumption of law the stockholders of a corporation are deemed to be citizens of the state of the corporation's domicil. (2) Granting that the complainants are citizens of New Jersey, yet, as they are suing for the Sol Sayles Company, a New York corporation, that corporation, although in form a defendant, is, "It further alleged that the complainants in legal effect, on the same side of the concaused a demand to be made upon the de- troversy as the complainants, and since it fendants Harrington, that they transfer the is a citizen of the same state as the other said shares of stock and the said bonds to defendants, the circuit court had no juristhe Sol Sayles Company, but that they have diction, as the suit does not involve a conrefused to do so, and have insisted that these troversy between citizens of different states. shares of stock and bonds are their personal 1. This is based on the assumption adoptand individual property, and that neither ed by this court, that stockholders of a corthe Sol Sayles Company nor their complain-poration are citizens of the state which creants have any right, title, or interest in ated the corporation,-an assumption physieither the said shares of stock or the said cally possible, but hardly true in a single inbonds, or any part thereof. stance; and appellants here contend that it "The twentieth paragraph of the bill of should be classed with the fictions of the complaint is as follows: ""The complainants were and each of them was a shareholder of the defendant Sol Sayles Company at the time of the transactions herein complained of. This suit law, and subject to one of their fundamental maxims, and cannot be carried beyond the reasons which caused its adoption necessarily require. It is, however, more of a presumption than a fiction, but whether we re gard it as either, it cannot be pushed to the | cial power." end contended for by appellees. The reason of the presumption (we will so denominate it) was to establish the citizenship of the legal entity for the purpose of jurisdiction in the Federal courts. Before its adoption difficulties had been encountered on account of the conditions under which jurisdiction was given to those courts. A corporation is constituted, it is true, of all its stockholders; but it has a legal existence separate from them,-rights and obligations separate from them; and may have obligations to them. It can sue and be sued. At first this could be done in the circuit court of the United States only when the corporation was composed of citizens of the state which created it. Bank of United States v. Deveaux, 5 Cranch, 61, 3 L. ed. 38; Hope Ins. Co. v. Boardman, 5 Cranch, 57, 3 L. ed. 36. But the limitation came to be seen as almost a denial of jurisdiction to or against corporations in the Federal courts, and in Louisville, C. & C. R. Co. v. Letson, 2 How. 497, 11 L. ed. 353, prior cases were reviewed, and this doctrine laid down: The presumption that the citizenship of the corporators should be that of the domicil of the corporation was not then formulated. That came afterwards, and overcame the difficulty and objection that the legal creation, the corporation, could not be a citizen within the meaning of the Constitution. Marshall v. Baltimore & O. R. Co. 16 How. 314, 14 L. ed. 953. This, then, was its purpose, and to stretch beyond this is to stretch it to wrong. It is one thing to give to a corporation a status, and another thing to take from a citizen the right given him by the Constitution of the United States. Disregarding the purpose of the presumption, it is easy to represent it, as counsel does, as illogical if not extended to every stockholder; but as easy it would be to show its falseness if so applied. But such charges and countercharges are aside from the question. To the fact and place of incorporation the law attaches its presumption for a special purpose. Perhaps, as intimated in St. Louis & S. F. R. Co. v. James, 161 U. S. 545, 563, 40 L. ed. 802, 808, 16 Sup. Ct. Rep. 621, this "went to the verge of judi Against the further step urged by appellees we encounter the Constitution of the United States. 2. The ninety-fourth rule in equity contemplates that there may be, and provides for, a suit brought by a stockholder in a corporation, founded on rights which may properly be asserted by the corporation. And the decisions of this court establish that such a suit, when between citizens of different states, involves a controversy cognizable in a circuit court of the United States. The ultimate interest of the corporation made defendant may be the same as that of the stockholder made plaintiff; but the corporation may be under a control antagonistic to him, and made to act in a way detrimental to his rights. In other words, his interests and the interests of the corporation may be made subservient to some illegal purpose. If a controversy hence arise, and the other conditions of jurisdiction exist, it can be litigated in a Federal court. In Detroit v. Dean, 106 U. S. 537, 27 L. ed. 300, 1 Sup. Ct. Rep. 500, Dean, who was a citizen of New York and a stockholder in the Mutual Gaslight Company, a Michigan corporation, in order to protect its right and property against the threatened action of a third party, brought suit against the latter and the corporation in the circuit court of the United States for the eastern district of Michigan. This court ordered the bill dismissed, not because Dean and the corporation had identical interests, but because the refusal of the directors of the corporation to sue was collusive. The right of a stockholder to sue a corporation for the protection of his rights was recognized, the condition only being the refusal of the directors to act, which refusal, it is said, must be real, not feigned. Hawes v. Oakland (Hawes v. Contra Costa Water Co.) 104 U. S. 450, 26 L. ed. 827, was cited, where a like right was decided to exist. See also Dodge v. Woolsey, 18 How. 331, 15 L. ed. 401; Davenport v. Dows, 18 Wall. 626, 21 L. ed. 938; Memphis v. Dean, 8 Wall. 73, 19 L. ed. 328; Greenwood v. Union Freight R. Co. 105 U. S. 16, 26 L. ed. 963; Quincy v. Steel, 120 U. S. 241, 30 L. ed. 624, 7 Sup. Ct. Rep. 520. It was said that in Dodge v. Woolsey, that the refusal of the directors to sue caused them and Woolsey, who was a stockholder in a corporation of which they were directors, "to occupy antagonistic grounds in respect to the controversy, which their refusal to sue forced him to take in defense of his rights." Dodge v. Woolsey was modified by Hawes v. Oakland, as to what circumstances would justify a suit by a stockholder if the directors refuse to sue. See also Quincy v. Steel, 120 U. S. 241, 30 L. ed. 624, 7 Sup. Ct. Rep. 520. |