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8010. Actions against Foreign Corporations which have Migrated from the Domestic State. Let us suppose a case where, either with or without the sanction of the laws of the domestic State, or of the State of its creation, a corporation bodily migrates from the State of its creation into another State, where a majority of its stockholders have always resided, where it has held all its meetings, where it keeps its books, and where, at the time of the action against it, it is doing what are called constituent acts within the domestic State, – that is to say, a notice for a meeting of its stockhold. ers within such State is pending, — and where it has no office or place of business anywhere in the State of its creation. In such a case it is liable to actions upon its contracts by citizens


20 N. Y. Supp. 891); for an injury by & York had jurisdiction of an action by maritime collision by the joint owners one of them to restrain a proceeding of a vessel, part of whom are non-reg- for arbitration thereunder: Direct idents, against a foreign corporation U. S. Cable Co. v. Dominion Tel. Co., (Brooks v. Mexican Construction Co., 84 N. Y. 153; reversing 8. c. 22 Hun 49 N. Y. Super. 234; 8. c. 50 N. Y. (N. Y.), 568. Where some of the Super. 281); to recover damages for plaintiffs were residents, and others personal injuries received without the non-residents, it was held that the State (Crowley v. Royal Exchange action might be dismissed as to the Shipping Co., 2 Civ. Proc. Rep. (N. Y.) non-residents, and proceed as to the 174). The same courts have held that residents: Ervin v. Oregon Rail. & actions lie under this statute against Nav. Co., 28 Hun (N. Y.), 269; afforeign corporations in respect of firming s. C. 62 How. Pr. (N. Y.) 490. business transacted within the State: Where a national bank, organized in Bradley Fertilizer Co. v. South. Pub. Louisiana, purchased a draft drawn Co. (N. Y. City Ct.), 21 N. Y. Supp. on bankers in the city of New York, 472. Upon an insurance policy issued payable to the order of such national by a foreign corporation, to a resident bank, which draft was duly presented who died within the State: Griesa v. in New York, and payment refused, Massachusetts Ben. Asso., 15 N. Y. and was protested for non-payment, Supp. 71. Between two foreign corpo- and due notice given thereof, - it was rations to recover shares of stock on held that the cause of action arose the ground of the invalidity of a trans- within the State of New York for the fer made within the domestic State: purpose of sustaining the jurisdiction Toronto Trust Co. v. Chicago &c. R. of a court of that State, of an action Co., 32 Hun (N. Y.), 190. Where two by the national bank to attach the foreign corporations entered into an funds in New York belonging to the agreement, by one clause of which, in bank drawing the draft: Hibernia case of differences between them, they Bank v. Lacombe, 84 N. Y. 367; 8. C. were to appoint an arbitrator in New 38 Am. Rep. 518. York, the Supreme Court of New i Ante, 9 694.

of the domestic State, - and it would equally seem by nonresidents upon contracts made within the domestic State, although at the time of the bringing of such action it has ceased doing business within the domestic State. A foreign corporation cannot thus be allowed to migrate into the domestic State, do business there, incur liabilities there, and then, by the mere act of suspending its business, escape the process of the domestic courts.

8 8011. Jurisdiction of Actions by Stockholders to Redress Grievances in Corporate Management. — As a general rule, actions brought by stockholders, generally in equity, to restrain or redress frauds or breaches of trust committed by the directors or officers of the corporation, or by a majority of its shareholders in the management of its business and proporty, can only be brought in the courts of the State under whose laws the corporation was created. This rule rests partly on jurisdictional grounds, and partly on grounds of policy and expediency. It is indispensable, in such an action, that the corporation should be made a party in its corporate name and character. This reason alone, in many cases, drives the stockholders to the forum of the State of the corporation, because service of process cannot be had upon the corporation in other jurisdictions. It also rests upon a consideration of the inexpediency of opening the doors of the courts of the State to litigations in respect of rights depending upon transactions taking place outside the State and governed by foreign law. It rests upon the further consideration that, in many cases, by reason of the fact of the property of the corporation being situated outside the State, it will be impossible for the court

1 National Bank v. Southern Por- New Haven Horse Nail Co.o. Linden celain Man. Co., 55 Ga. 36. Compare Spring Co., 142 Mass. 349; Smith o. Bawknight v. Liverpool &c. Ins. Co., Mutual Life Ins. Co., 14 Allen 55 Ga. 194.

(Mass.), 336. Compare Halsey u. · As to such actions, see ante, McLean, 12 Allen (Mass.), 438; 8. C. 94479, et seg.

90 Am. Dec. 167. * Wilkins v. Thorne, 60 Md. 253; Ante, $ 4578; Wilkins v. Thorne, Moore v. Silver Valley Min. Co., 104 60 Md. 253. N. C. 534, 545; 8. c. 10 S. E. Rep. 679;

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to effectuate its judgment if it should render any. But it is obvious that many cases will arise where these reasons will not be controlling. Take, for instance, such a case as that stated in a preceding section, where a manufacturing corporation migrated with its entire business, corporate books, and personnel, from the State of its creation into another State, and there did all its business and held all its corporate meetings. Clearly, the courts of the State in which it had thus, lawfully or unlawfully, acquired a de facto domicile, would be better able to take jurisdiction of an action by its stockholders for the redress of grievances in respect of corporate management, than would a court of the jurisdiction from which it migrated. Indeed, the courts of that State might not be able to acquire jurisdiction at all, from the mere fact of no one being left upon whom process could be served. We accordingly find judicial opinions which more or less modify the general rule of jurisdiction above stated. One of them is to the effect that, though such an action must in general be prosecuted in the State under whose laws the corporation has been created, yet injunctions and other auxiliary remedies may be had in the courts of other States. Another is to the effect that where an unlawful transfer of the shares of stock of a foreign corporation is made within the domestic State, through an agency there maintained by the corporation for the transfer of its shares, the wrongful act is committed within the domestic State, so that it may be redressed, under a statutory provision elsewhere considered, giving the courts of the domestic State jurisdiction of actions by non-residents against foreign corporations, where the transaction which is the subject of the action happened within the State. Still another, rendered by a court of subordinate jurisdiction, is to the effect that an action by a resident stockholder of a foreign corporation to obtain specific performance of a contract of another for

· Moore v. Silver Valley Min. Co., · Toronto General Trust Co. v. 104 N. C. 534, 545; 8. C. 10 s. E. Rep. Chicago &c. R. Co., 82 Hun (N. Y.), 679.

190. • Ante, 99 8002, 8009.

eign corporation, to issue stock to the former corporation or its stockholders, pursuant to an agreement for the consolidation of the two corporations, is within the jurisdiction of the courts of the domestic State. On the contrary, a foreign corporation cannot maintain a suit in equity in Massachusetts against a foreign railroad corporation and a citizen of that Commonwealth, to enforce specific performance of a covenant in a contract for the delivery of bonds and certificates of stock in payment of work to be performed by the plaintiff corporation in a foreign State, and to restrain by injunction the citi. zen of Massachusetts from disposing, in that State, of shares of stock and bonds of the foreign railroad company alleged to have been delivered to him in violation of the plaintiff's rights, although the foreign railroad has an office in Massachusetts for the transfer of shares of its capital stock, and has appeared by attorney in the suit.'

$ 8012. Actions against Corporations Created by the Concurrent Legislation of Several States. As already seen in various relations, corporations which have been created by the concurrent action of two or more States, are deemed to be domestic corporations within each of the States by whose legislation their corporate existence has been created. From this, the conclusion has been deduced that it has a residence in each of the States for the purpose of being sued, and without reference to the question of the residence of the plaintiff in the action, and seemingly without reference to the question of the place where the cause of action arose, it being a personal action. Thus, the Baltimore & Ohio Railroad Company, originally chartered in Maryland, and re-incorporated, as was held, by the Legislature of Virginia in respect of so much of its property as lay within that State, was held liable in a proceeding in garnishment in Virginia, on the theory of its being

Babcock v. Schuylkill &c. R. Co., 31 N. Y. St. Rep. 643; 8. C. 9 N. Y. Supp. 845.

? Kansas &c. Construction Co. v. Topeka &c. R. Co., 135 Mass. 34.

s Ante, $$ 47, 319, 320, 688, 7438, 7452, 7472, 7490, 7799, 7817, 7891; post, 08 8020, 8128.

a domestic corporation. The same railroad had extended a branch of its line into the District of Columbia under the authority of Congress, and it was consequently held liable to an action in that District for an injury done to the plaintiff while traveling on its cars in the State of Virginia.

1 Baltimore &c. R. Co. o. Gallahae, (U. 8.) 65. Compare Goshorn a. 12 Gratt. (Va.) 655; 3. C. 65 Am. Dec. Supervisors, 1 W. Va. 308; and Bal254.

timore &c. R. Co. . Supervisors, 3 • Railroad Co. o. Harris, 12 Wall. W. Va. 319.


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