Bank of the United States v. Planters' Bank of Georgia9 Wheat. 904 1824
Mr. Chief Justice Marshall delivered the opinion of the Court.
In this case, the petition of the plaintiffs, which, according to the practice of the State of Georgia, is substituted for a declaration, is founded on promissory notes, payable to a person named in the note, "or bearer," and states, that the notes were "duly transferred, assigned and delivered" to the plaintiffs, "who thereby became the lawful bearer thereof, and entitled to payment of the sums therein specified; and that the defendants, in consideration of their liability, assumed," &c.
The Planters' Bank pleads to the jurisdiction of the Court, and alleges, that it is a corporation, of which the State of Georgia, and certain individuals, who are citizens of the same State with some of the plaintiffs, are members. The plea also alleges, that the persons to whom the notes mentioned in the petition were made payable, were citizens of the State of Georgia, and, therefore, incapable of suing the said Bank in a Circuit Court of the United States; and being so incapable, could not, by transferring the notes to the plaintiffs, enable them to sue in that Court.
To this plea the plaintiffs demurred, and the defendants joined in demurrer.
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1. Is the State of Georgia a party defendant in this case? If it is, then the suit, had the 11th amendment never been adopted, must have been brought in the Supreme Court of the United States. Could this Court have entertained jurisdiction in the case?
We think it could not. To have given the Supreme Court original jurisdiction, the State must be plaintiff or defendant as a State, and must, as a State, be a party on the [Volume 5, Page 446] record. A suit against the Planters' Bank of Georgia, is no more a suit against the State of Georgia, than against any other individual corporator. The State is not a party, that is, an entire party, in the cause.
If this suit could not have been brought originally in the Supreme Court, it would be difficult to show, that it is within the 11th amendment. That amendment does not purport to do more than to restrain the construction which might otherwise be given to the constitution; and if this case be not one of which the Supreme Court could have taken original jurisdiction, it is not within the amendment. This is not, we think, a case in which the character of the defendant gives jurisdiction to the Court. If it did, the suit could be instituted only in the Supreme Court. This suit is not to be sustained because the Planters' Bank is suable in the federal Courts, but because the plaintiff has a right to sue any defendant in that Court, who is not withdrawn from its jurisdiction by the constitution, or by law. The suit is against a corporation, and the judgment is to be satisfied by the property of the corporation, not by that of the individual corporators. The State does not, by becoming a corporator, identify itself with the corporation. The Planters' Bank of Georgia is not the State of Georgia, although the State holds an interest in it.
It is, we think, a sound principle, that when a government becomes a partner in any trading company, it devests itself, so far as concerns the transactions of that company, of its sovereign character, and takes that of a private citizen. Instead of communicating to the company its privileges and its prerogatives, it descends to a level with those with whom it associates itself, and takes the character which belongs to it associates, and to the business which is to be transacted. Thus, many States of this Union who have an interest in Banks, are not suable even in their own Courts; yet they never exempt the corporation from being sued. The State of Georgia, by giving to the Bank the capacity to sue and be sued, voluntarily strips itself of its sovereign character, so far as respects the transactions of the Bank, and waives all the privileges of that character. As a member of a corporation, a government never exercises its sovereignty. It acts merely as a corporator, and exercises no other power in the management of the affairs of the corporation, than are expressly given by the incorporating act.
The government of the Union held shares in the old Bank of the United States; but the privileges of the government were not imparted by that circumstance to the Bank. The United States was not a party to suits brought by or against the Bank in the sense of the constitution. So with respect to the present Bank. Suits brought by or against it are not understood to be brought by or against the United States. The government, by becoming a corporator, lays down its sovereignty, so far as respects the transactions of the corporation, and exercises no power or privilege which is not derived from the charter.
We think, then, that the Planters' Bank of Georgia is not exempted from being sued in the federal Courts, by the circumstance that the State is a corporator.
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Mr. Justice Johnson. . . . So, also, with regard to the State of Georgia. An original suit against that State for the recovery of a debt, could not be maintained. Yet, if an original suit against a corporation, be an original suit against each corporator, I see not wherein the case differs from that of a direct suit against the State. Suppose the case of a joint bond, given by a State and individuals, to an individual contractor, citizen of another State, what would except a suit on such a bond from the operation of the 11th amendment of the constitution? If it be said that the amendment alluded to has regard only to suits instituted against States in their sovereign capacity, I would ask, in what other capacity can a State appear, or even exist? In every possible form and shape, it is a sovereign State, or it is nothing. And this very stock, held in this Bank, is the property of the people of Georgia, held by them in the name and capacity of the State of Georgia. If any dispute were to arise on the title to the stock, in what capacity could they sue or be sued for the interest held by them in the stock, unless in their sovereign capacity? It is not because it imparts its own immunities to the other stockholders, that this action cannot be maintained, but because that the judicial power must reach each and every defendant, in order to bring a case within the prescribed limits of the constitution. Each defendant occupies his own peculiar rank, claims his own peculiar immunities; but they are not suable in the Courts of the United States, as long as any one of them is exempted from suit in those Courts.
I am here expressing a technical opinion, founded on the authority of the case of The Bank v. Deveaux. That decision brings it strictly within the letter of the 11th amendment; although I am ready to admit, that, unaffected by that decision, it is not within its purview. Although not responsible for that decision, I acknowledge its obligation, until overruled.
The Founders' Constitution
Volume 5, Amendment XI, Document 5
The University of Chicago Press