Opinion
(Filed 22 May, 1913.)
Foreign Corporations — Purchaser at Foreclosure Sale — Domestic Corporations — Removal of Causes — Diversity of Citizenship — Interpretation of Statutes — Jurisdiction.
A railroad corporation of another State purchasing the property of a railroad corporation of this State at a foreclosure sale under a mortgage or deed in trust becomes a new corporation of this State to the extent of the franchise, etc., of the domestic corporation thus acquired (Code, sec. 679), and may not remove a cause of action against it to the Federal court upon the ground of diversity of citizenship, brought by a citizen of North Carolina; and this being so, as a matter of law, the State courts, upon petition and bond for removal filed, are not deprived of their jurisdiction to pass upon this question when the uncontradicted facts are made to appear upon the face of the proceedings.
APPEAL by plaintiff from Long, J., at October Term, 1912, of SWAIN.
Frye, Gant Frye for plaintiff.
Mastin, Rollins Wright for defendant.
CLARK, C. J., concurring; WALKER and BROWN, JJ., dissenting.
This is a motion to remove the action from the Superior Court of Swain County to the Federal Court upon the ground that the defendant is a Virginia corporation. The motion was allowed, and the plaintiff excepted and appealed.
The plaintiff has followed the allegations of the complaint in Ice Co. v. R. R., 144 N.C. 732, and the allegations in the petition for removal are substantially as those made in a similar petition filed in that case.
The question now presented is not, therefore, a new one, but was fully considered in the case referred to in a learned and exhaustive opinion by Justice Connor, concurred in by all the members of the Court, and decided in favor of the contention of the appellant, and we have no disposition to disturb that decision.
It is alleged in the complaint that the defendant became the purchaser of the Western North Carolina Railroad Company under foreclosure proceedings, and the conclusion reached by the Court in the coal company case was: "A suit cannot be removed from (369) the State to the Federal court upon the ground of diversity of citizenship by a corporation of another State which became the purchaser of a corporation of this State under a sale made pursuant to a deed of trust or mortgage, by virtue of The Code, sec. 679, providing, upon the conveyance being made to `the purchaser, the said corporation shall ipso facto be dissolved and the said purchaser shall forthwith be a new corporation, by any name which may be set forth in the conveyance,' etc."
The case of Herrick v. R. R., 158 N.C. 310, is not in conflict with this view.
It was there held that "all issues of fact made upon the petition for removal must be tried in the Circuit Court, but the State court is at liberty to determine for itself whether, on the face of the record, a removal has been effected," and that the theory on which the rule as to removal rests is "that the record closes, so far as the question of removal is concerned, when the petition for removal is filed and the necessary security furnished. It presents, then, to the State court a pure question of law, and that is, whether, admitting the facts stated in the petition for removal to be true, it appears on the face of the record, which includes the petition and the pleadings and proceedings down to that time, that the petition is entitled to a removal of the suit. That question the State court has the right to decide for itself."
Applying this rule to the record before us, it appears that there is no dispute as to the facts, and that the real controversy is whether, upon these facts, the defendant is, as matter of law, a North Carolina corporation under our statutes, by reason of its purchase of the Western North Carolina Railroad Company, and this question the State courts can decide.
Reversed.