Des Moines Navigation & R. Co. v. Iowa Homestead Co.

123 U.S. 552 (1887)


The Iowa Homestead Co. (P), an Iowa corporation, sued the Des Moines Navigation and Railway Co. (D), an Iowa corporation, and other defendants, all New York citizens, in Iowa state court. This suit was brought for unpaid taxes. The New York defendants removed the suit to federal court based on diversity. There was not complete diversity between the parties because the two corporations, P and D were citizens of the same state. P did not object and contested the matter in federal court without any objection to federal jurisdiction. On appeal, the case went all the way to the Supreme Court. P lost and then sued again in Iowa state court against D claiming that the federal verdict was null and void as there was no complete diversity of citizenship. Iowa courts agreed with P in that that the federal court jurisdiction was improper and therefore the judgment was not binding. The case went back to the U.S. Supreme Court.