This section is from the book "The Constitutional Law Of The United States", by Westel Woodbury Willoughby. Also available from Amazon: Constitutional Law.
It was early decided that a corporation is not a citizen within the meaning of the clause providing that the federal judicial power shall extend to controversies between citizens of different States, and in theory this is still the law; but if each corporation was conclusively presumed to be a citizen of the State by which it is chartered the practical results would be precisely the same as it now is and for many years has in fact been. Until about 1840, however, the doctrine prevailed that a corporation being an artificial unit, the court would look behind its corporate personality to see whether the individuals of which it was -composed were, each and every one of them, citizens of a State different from that of each of the parties sued.32 But in later cases this doctrine was repudiated, and the principle stated, first, that the citizenship of the individuals composing the corporation is to be presumed to be that of the State by which the company was chartered, and, still later, that this presumption is one that may not be rebutted. In Ohio & Mississippi R. R. Co. v. "Wheeler33 the court say, citing Louisville, C. & C. R. R. Co. v. Letson:34 "Where a corporation is created by the laws of a State, the legal presumption is, that its members are citizens of the State in which alone the corporate body has a legal existence; and that a suit by or against a corporation, in its corporate name, must be presumed to be a suit by or against citizens of the State which created the corporate body; and that no averment or evidence to the contrary is admissible, for the purpose of withdrawing the suit from the jurisdiction of a court of the United States."
29 New Orleans v. Winter, 1 Wh. 91; 4 L. ed. 44; Hepburn v. Ellzey, 2 Cr. 445; 2 L. ed. 332.
30 3 Cr. 267; 2 L. ed. 435.
31 See Hooe v. Jamieson, 166 U. S. 395; 17 Sup. Ct. Rep. 596; 41 L. ed. 1049, and cases there cited.
This presumption, conclusive as to the citizenship of the corporation, is no presumption at all as to the citizenship of one of the individual stockholders in case that individual stockholder sues or is sued by the corporation even when such suit is brought to enforce rights or liabilities directly resulting from his relation as a stockholder. In such case a stockholder, if a plaintiff, may assert that he is a citizen of the State in which his citizenship actually is, and he may describe himself as a stockholder of the defendant corporation and yet the federal courts will conclusively presume that every stockholder of the defendant corporation is a citizen of the same State as that which chartered the corporation.
32 Baak of United States v. Deveaux, 5 Cr. 61; 3 L. ed. 38; Bank of Vicksburg v. Slocomb. 14 Pet. 60; 10 L. ed. 354. 33 1 Black. 286; 17 L. ed. 130. 34 2 How. 497; 11 L. ed. 353.
A corporation organized in two or more States cannot sue in the federal courts a citizen of any one of those States.35
In St. Louis & San Francisco Ry. v. James36 the doctrine was advanced, but rejected by the court, that a corporation chartered in one State and authorized by the law of another State to do business therein and to have there all the privileges of a domestic corporation, might, as a citizen of the latter State, bring a suit in the federal courts against a citizen of the State of its incorporation.37
In Patch v. Wabash Ry. Co.38 it is held that a corporation organized under the laws of several States, including the one in which suit against it is brought, may not obtain removal into the federal courts by reason of its citizenship also of another State.
 
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