§ 324. “Between States, or between Residents of Different States, or between a State and a Resident of Another State.”

The original jurisdiction of the High Court extends to “all matters between States,” &c.—words which are wide enough to include controversies of all kinds between a State or a resident of a State on the one hand, and another State or a resident of another State on the other hand. In cases of this class “the jurisdiction depends entirely on the character of the parties. … If these be the parties, it is entirely unimportant what may be the subject of the controversy. Be it what it may, these parties have a constitutional right to come into the courts of the union.” (Per Marshall, C.J., Cohens v. Virginia, 6 Wheat. at p. 378.)

COMPARISON WITH UNITED STATES.—The whole of this provision is adapted with important modifications from the Constitution of the United States; and for a proper

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application of the American authorities it is necessary to examine the points of difference between the words of the two Constitutions.

The provision in the Constitution of the United States is a gift of “judicial power,” and in 1793 it was held (Chisholm v. Georgia, 2 Dall. 419) that it enabled a State to be sued in assumpsit by a citizen of another State. This decision gave such intense dissatisfaction that the eleventh amendment was passed declaring that the judicial power should not be construed to extend to any suit brought against a State by citizens of another State, or by aliens. Notwithstanding this amendment, however, a State can still be sued by another State of the Union, though enjoying immunity from being sued by citizens of such other State. The result of this distinction was that attempts were made by States, whose citizens had claims against another State, to prosecute these claims on behalf of their citizens; but these attempts were defeated, it being held that a State could not in this way create a controversy with another State. (New Hampshire v. Louisiana, New York v. Louisiana, 108 U.S. 76.) The provisions of this Constitution, however, make no distinction between a plaintiff State and a plaintiff resident of that State.

Again, though the Supreme Court of the United States has original jurisdiction in cases where a State is a party, it has only appellate jurisdiction in cases “between citizens of different States.” Accordingly in an action of ejectment between citizens of different States in respect of land over which both States claimed jurisdiction, it was held that the Supreme Court had no original jurisdiction, inasmuch as a State was neither nominally nor substantially a party; and it was not sufficient that the State might be consequentially affected by having to compensate its grantee. (Fowler v. Lindsey, 3 Dall. 411; see Kent, Comm. i. 323.)

The judicial power of the United States extends to controversies “between a State, or the citizens thereof, and foreign States, citizens, or subjects.” In this Constitution there is no such provision.

SUITS AGAINST A STATE.—It is submitted that — notwithstanding Chisholm v. Georgia, cited above—this sub-section, like the rest of the section, only confers a jurisdiction, and not a right of action where no right of action existed before; that it does not extend the category of cases in which a State, or a resident of a State, may be sued, but merely enables certain suits, which might otherwise have been brought in some other court, to be brought in the High Court. (See remarks of Messrs. Barton, Symon, and Isaacs in connection with mandamus; Conv. Deb., Melb., pp. 1875–85.) Apart from express words in the Constitution, a State would not be suable without its own consent. This section does not appear to affect this immunity; but an important limitation has been put upon it by sec. 78, which provides that “in respect of matters within the limits of the judicial power” the Federal Parliament may make laws conferring rights to proceed against a State. The express provision that the Parliament may confer these rights seems to show that they are not conferred by the Constitution itself; and there is thus a guide to the intention of the framers which was absent in the Constitution of the United States. It seems, therefore, that no suit can be brought against a State, either by another State or by a resident of another State, except (1) by consent, expressed by legislation or otherwise, of the State sued, or (2) under a right given by the Federal Parliament under sec. 78.

It has been decided in the United States that a State may waive its immunity, and by appearing in a Federal court, in a suit in which it has an interest, does waive it. (Clark v. Barnard, 108 U.S. 436.) And a State may be sued with its own consent. (Hans v. Louisiana, 134 U.S. 1.) Such consent may be given on such terms and conditions as the State chooses to impose, and may be withdrawn. (Re Ayers, 123 U.S. 505; Railroad Co. v. Tennessee, 101 U.S. 337; Beers v. Arkansas, 20 How. 527.)

“When a State submits itself, without reservation, to the jurisdiction of a Court in a particular case, the jurisdiction may be used to give full effect to what the State has, by its act of submission, allowed to be done; and if the law permits coercion of the

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public officers to enforce any judgment that may be rendered, then such coercion may be employed for that purpose. But this is very far from authorizing the courts, when a State cannot be sued, to set up their jurisdiction over the officers in charge of the public moneys, so as to control them as against the political power in their administration of the finances of the State.” (Per Waite, C.J., Louisiana v. Jumel, 107 U.S. at p. 728.)

PARTIES.—Jurisdiction under this sub-section depends on the character of the parties; and where that is the case, it has been held in the United States that only the parties on the record must be looked to. (See Story, Comm. §§ 1685–8; Kent, Comm. i. 350; and Notes, § 323, supra.)

BETWEEN STATES.—It seems that this jurisdiction, except by consent of the defendant State, can only be exercised under the authority of federal legislation conferring the right to sue a State. (See Notes, supra; and § 338, infra.)

“The spectacle of a people submitting public controversies to the same mode of settlement as private law suits, and acquiescing in the decisions, has set an example which foreign nations are about to imitate, not only in internal discords, but in those which are international.” (Foster, Const. of the U.S. i. 45.)

“This power seems to be essential to the preservation of the union,” says Story, Comm. § 1679. After illustrating this from the experience of the Confederation, he proceeds:—

“Some tribunal exercising such authority is essential to prevent an appeal to the sword and a dissolution of the government. That it ought to be established under the national, rather than under the State government, or, to speak more properly, that it can be safely established under the former only, would seem to be a position self-evident, and requiring no reasoning to support it. It may justly be presumed that under the national government, in all controversies of this sort, the decision will be impartially made according to the principles of justice; and all the usual and most effectual precautions are taken to secure this impartiality, by confiding it to the highest judicial tribunal.” (§ 1681.)

In the United States, this jurisdiction has been chiefly employed in cases of disputed boundaries. (See opinion of the Court in Wisconsin v. Pelican Insurance Co., 127 U.S. 265.) It has been decided that the Supreme Court of the United States has jurisdiction to determine questions of boundary between States, and that the jurisdiction is not defeated because of the fact that in deciding the question the court must examine and construe compacts between States, or because the jurisdiction affects the territorial limits of the political jurisdiction and sovereignty of the States. (Virginia v. West Virginia, 11 Wall. 39; Rhode I. v. Massachusetts, 12 Pet. 657; and see other cases cited by Baker, Annot. Const. p. 138.)

The Courts of the United States have declined, as between States, to compel the performance of obligations which, between independent nations, could not have been enforced judicially, but only through the political departments. (Kentucky v. Dennison 24 How. 66; New York v. Louisiana, 108 U.S. 76; and see Wisconsin v. Pelican Ins. Co., 127 U.S. 265.)

In a recent case, it was held that the words “controversies between States” were intended to include something more than controversies over territory or jurisdiction; but that the jurisdiction was of so delicate and grave a character that its exercise was not contemplated save when the necessity was absolute and the matter itself properly justiciable. To maintain jurisdiction, the controversy must arise directly between the States, and must not be a controversy in the vindication of grievances between private individuals. A bill by the State of Louisiana against the State of Texas, complaining that Texas by unnecessary and unreasonable quarantine regulations was intentionally and absolutely interdicting inter-state commerce, was held to be bad, as its gravamen was not a special and peculiar injury such as would sustain an action by a private person, but Louisiana presented herself in the attitude of parens patriœ, trustee, guardian, or representative of her citizens. Nor could the bill be sustained as a controversy between a State and the citizens of another State. (Louisiana v. Texas [1899], 176 U.S. 1.)

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BETWEEN RESIDENTS OF DIFFERENT STATES.—These words (and also those following—“between a State and a resident of another State”) were only inserted at a late stage in the Convention. (See Conv. Deb., Melb., p. 1885.) They are taken from the United States Constitution, with the substitution of the word “residents” for “citizens.” The reasons for the jurisdiction being given in the United States are explained by Story, Comm. §§ 1690–2, and are based on the advantage of giving the parties in such cases recourse to a national and impartial tribunal.

The word “resident” is undefined, and must be interpreted according to the scope and spirit of the Constitution. (See Notes, § 131, supra, and § 463, infra.) There are numerous English and colonial cases defining “residence” differently for the purpose of different enactments. Thus where residence is required for an electoral qualification, the guiding principle is that a voter should have some local interest. (Beal v. Ford, 3 C.P.D. at p. 78.) Where jurisdiction depends upon the residence of the defendant (as in County or District Court Acts) the principle is that of seeking out the defendant in his own jurisdiction—in the forum rei. Here the considerations are somewhat different from both; the principle is that of providing a forum which is neither solely the plaintiff's nor solely the defendant's, but belongs impartially to both. The object of the jurisdiction, in fact, is to avoid any suggestion of partiality which might arise if a litigant with a resident in another State had no option but to resort to the courts of that State. The jurisdiction is thus based on the existence of those local citizenships and local patriotisms which are characteristic of a Federation. Residence in a State, for the purposes of this section, should therefore be interpreted as involving a suggestion of State membership, and perhaps even of domicile.

An instructive parallel expression occurs in sec. 117, where “a subject of the Queen resident in any State” is protected from disabilities in other States. That clause as it stood in the Bill of 1891, and also in the Adelaide draft of 1897, referred to the privileges and immunities of “citizens” of the States (see Notes to sec. 117); but at the Melbourne Convention (Debates, pp. 664–691) difficulties were raised in connection with the meaning of the clause, and it was struck out—many members expressing the opinion that citizenship, both of the Commonwealth and of the States, should be defined in the Constitution. Afterwards (Debates, pp. 1750–68) Dr. Quick proposed to give the Federal Parliament power to make laws as to “Commonwealth citizenship.” Some members thought this power unnecessary, whilst others still thought that the proper plan was to define citizenship. On Mr. Symon's motion to reinsert a provision for protecting the rights of citizens (Debates, pp. 1780–1802; and see Historical Note, sec. 117) Dr. Quick proposed a definition of Commonwealth citizenship; but this was struck out. Considerable objection being made to the use of the word “citizen,” the phrase “subject of the Queen resident in any State” was substituted. It was after the adoption of that phrase that the words “between residents,” &c. (adapted from the American “between citizens,” etc.) were inserted.

It appears then that the residence in a State contemplated by the Constitution is such residence as, if combined with British nationality, would constitute citizenship of the State, in the general sense of the term. It is not meant by this that the residence should be such as is required by the laws of the particular State for the exercise of any political franchise, but merely that it should be of a character to identify the resident to some extent with the corporate entity of the State.

For the meaning of citizenship of a State in the United States, see Story, Comm. §§ 1693–5; Kent, Comm. i. 345. In its broad sense, the word “citizen” is synonymous with “subject” and “inhabitant,” and is understood as conveying the idea of membership of a nation and nothing more. (Minor v. Happerset, 21 Wall. 162.)

The question arises whether, in order to give jurisdiction under this sub-section, it is necessary that all the plaintiffs should be residents in a different State or States from all the defendants. The American decisions turn not only on the words in the Constitution, “between citizens of different States,” but also on the more precise words

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of the Judiciary Act, which give the Circuit Courts jurisdiction “where the suit is between a citizen of the State where the suit is brought, and a citizen of another State.” It has been held that those words mean that each distinct interest must be represented by persons all of whom are entitled to sue, or liable to be sued, in the Federal Courts. (Strawbridge v. Curtiss, 3 Cranch, 267; Coal Co. v. Blatchford, 11 Wall. 172.) Where jurisdiction depends on the parties, the parties to the record are meant, and not the parties in interest. (See Note, § 323, supra.) Trustees and executors are no exception; their residence, and not the residence of the beneficiaries whom they represent in the suit, is material. (Coal Co. v. Blatchford, 11 Wall. 172.) In the United States, an allegation that the plaintiffs “as such executors” were citizens of a State was held insufficient, inasmuch as citizenship was a personal, not an official quality. (Amory v. Amory, 95 U.S. 186.) Where, however, a party to the record is wholly formal, and has no interest in or control over the suit, but is a mere “conduit”—as where a sheriff's bond had to be sued out in the name of the Governor of the State—the residence of the party interested, and not of the formal party, is material. (McNutt v. Bland, 2 How. 9.) And jurisdiction cannot be ousted by the joinder of a mere nominal defendant, who has not the requisite character. (Carneal v. Banks, 10 Wheat. 181; Walden v. Skinner, 101 U.S. 577; Kent, Comm. i. 346.) Where jurisdiction depends on the residence of the parties, the jurisdiction must appear on the record. (Bingham v. Cabot, 3 Dall. 382; Abercrombie v. Dupuis, 1 Cranch 343; Kent, Comm. i. 344.)

The federal courts have no jurisdiction of a suit between a resident of a territory and a resident of a State; nor where a resident of the federal district is a party. (New Orleans v. Winter, 1 Wheat. 91; Barney v. Baltimore, 6 Wall. 280.)

CHANGE OF RESIDENCE.—If a resident of one State changes his domicile to another State, with a bona fide intention to reside there, even though his object was to avail himself of the federal jurisdiction, he may sue as a resident of the latter State. (Jones v. League, 18 How. 76; Kent, Comm. i. 345.) But a merely colourable conveyance will not give jurisdiction. (Ib.)

RESIDENCE OF CORPORATION.—In the United States, it was held in some early cases that a corporation aggregate was not, in its corporate capacity, a citizen, and that its right to sue in the federal courts depended on the citizenship of its members, which must be averred on the record. (Hope Ins. Co. v. Boardman, 5 Cranch 57; Bank of U.S. v. Deveaux, 5 Cranch 61.) These decisions were reviewed and overruled in Louisville R. Co. v. Letson, 2 How. 497, where it was held that a corporation created and doing business in a State is an inhabitant of the State, capable as being treated as a citizen for all purposes of jurisdiction. And the mischief of the earlier decision is now whittled away by a legal fiction; the members of a corporation being conclusively presumed, for purposes of jurisdiction, to be citizens of the State in which the corporation was created. (Steamship Co. v. Tugman, 106 U.S. 118; Memphis, &c., R.R. Co. v. Alabama, 107 U.S. 581; Kent, Comm. i. 346.) “It is well settled that a corporation created by a State is a citizen of the State, within the meaning of those provisions of the Constitution and statutes of the United States, which define the jurisdiction of the federal courts.” (Wisconsin v. Pelican Ins. Co. 127 U.S. p. 287.) But such a corporation is not a citizen of the State, so as to be “entitled to all privileges and immunities of citizens in the several States.” (Blake v. McClung, 172 U.S. 239.)

A corporation may clearly be a “resident” within the meaning of this section. “Residents” are resident persons; and by the (Imperial) Interpretation Act, 1889 (which governs this constitution), the expression “person,” unless the contrary intention appears, includes any body of persons corporate or unincorporate. (Sec. 19.)

According to writers on International Law, supported by English decisions, the residence of an incorporated company is determined by the place in which its administrative business is chiefly carried on. (See Westlake, Priv. Internat. Law, 285; Lindley, Company Law, p. 910.)

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BETWEEN A STATE AND A RESIDENT OF ANOTHER STATE.—The object of this jurisdiction also is to avoid partiality, or the suspicion of partiality. (Story, Comm. § 1682; Kent, Comm. i. 323; Wisconsin v. Pelican Ins. Co., 127 U.S. p. 265.) In that case it was held that similar words do not give federal jurisdiction in an action by a State upon a judgment recovered by it, in one of its own courts, against a citizen of another State. “The grant is of ‘judicial power’ and was not intended to confer upon the courts of the United States jurisdiction of a suit or prosecution by the one State, of such a nature that it could not, on the settled principles of public and international law, be entertained by the judiciary of the other State at all.” (Per Gray, J., at p. 289.)

“The courts of no country execute the penal laws of another.” (Per Marshall, C.J., The Antelope, 10 Wheat. 123.) This rule “applies not only to prosecutions and sentences for crimes and misdemeanours, but to all suits in favour of the State for the recovery of pecuniary penalties for any violation of statutes for the protection of its revenue or other municipal laws, and to all judgments for such penalties.” (Wisconsin v. Pelican Ins. Co., cited above.)