re the court considers that he
is and he is not at the same time a citizen of Ohio, and it would have
no jurisdiction unless it considered that he both was and was not at the
same time a citizen both of Ohio and Kentucky."[532]

The Black and White Taxicab Case

These fictions of corporate citizenship make it easy for corporations to
go into the federal courts on matters of law that are purely local in
nature, and they have availed themselves of the opportunity to the full.
For a time the Supreme Court tended to look askance at collusory
incorporations and the creation of dummy corporations for purposes of
getting cases into the federal courts,[533] but as a result of the
Kentucky Taxicab Case,[534] decided in 1928, the limitation of collusion
lost much of its force. Here the Black and White company, a Kentucky
corporation, dissolved itself and obtained a charter as a Tennessee
corporation in order to get the benefit of a federal rule which would
condone an exclusive contract with a railroad to park its cabs in and
around a station whereas the State rule forbade such contracts. The only
change made was of the State of incorporation. The name of the company,
its officers, and shareholders, and the location of its business all
remained the same. Yet no collusion was found, and the company received
the benefit of the federal rule--a measure of salvation by being born
again in Tennessee. The odd result in the Taxicab Case, whereby citizens
of Kentucky could conduct business there contrary to State law with the
sanction of the Supreme Court of the United States, did not stem solely
from the rule that the citizenship of a corporation is determined by the
State of its incorporation, but also from this rule combined with the
rule of Swift _v._ Tyson,[535] another by-product of diversity
jurisdiction.

THE LAW APPLIED IN DIVERSITY CASES: SWIFT _v._ TYSON

Section 34 of the Judiciary Act of 1789 provided that in diversity cases
at common law the laws of the several States should be the rules of
decision in the United States courts. However, in Swift _v._ Tyson[536]
the Supreme Court refused to apply this section on the ground that it
did not extend to contracts or instruments of a commercial nature, the
interpretation of which therefore ought to be according to "the general
principles and doctrines of jurisprudence"; and while the decisions of
State courts on such subjects were entitled to and would receive
attention and