Travis v. Knox Terpezone Co.

Laughlin, J.: The plaintiff alleges, among other'things, that the defendant is a foreign corporation organized under the laws of the State of New Jersey, and that it has an office for the regular transaction of business in the city of New York; that plaintiff is a resident of the city and State of New York, and- that the individual defendants Eogers and Skinner have offices for the regular transaction of business in the city of New York, and are respectively the president and treasurer of the company; that the defendant Schelling is the vice-president and duly registered transfer agent of the defendant corporation for the State of New Jersey; that on the 18th day of February, 1914, the plaintiff, was the owner of 57,500 shares of the capital stock of the defendant corporation, represented by six certificates which had been -duly assigned by him with power of attorney to transfer the same duly attached thereto, as required by the laws of New Jersey and the by-laws of the corporation, and on that day through his agent delivered the same to the defendant Schelling in the city of New York with a request that they be transferred to the name of the plaintiff on the books of the corporation; that Schelling thereupon signed and delivered to the plaintiff’s agent a receipt for the certificates of stock, reciting that he had received them for the purpose of transferring them as requested; that on the 31st day of March, 1914, the defendant corporation notified the plaintiff that it refused to transfer the stock and assigned as a ground for such refusal that it claimed some right, title or interest “in or against the said stock;” that the corporation still retains the stock and refuses to transfer it; that the defendant Schelling is the vice-president, and he and Eogers and Skinner are the only persons authorized by the by-laws of the corporation to sign and issue certificates of stock, and that Schelling has the custody and control of the stock transfer books, stock ledger and stock certificate book of [158] the corporation, and that said three individual defendants constitute a majority of the hoard of directors of the corporation, and they together with members of their families own 113,000 shares of the total 248,000 shares of the capital stock; and that this action was commenced on the 1st day of June, 1914, by the service of the summons and complaint on the defendant corporation and the individual defendants Rogers and Skinner. The plaintiff demands judgment, among other things, that the defendant corporation, by its president and treasurer or proper officers, be directed to transfer the said shares of stock to the name of the plaintiff on its books, in the manner required by the laws of the State of New Jersey, and to deliver to bim new certificates of stock therefor in due and proper form. There are other allegations with respect to acts of the corporation in derogation of the rights of the plaintiff as a stockholder and concerning the election of officers; and there are other prayers for relief with respect thereto which we do not deem it necessary to consider. The grounds of the demurrer are (1) that the complaint fails to state facts sufficient to constitute a cause of action; (2) that the court has not jurisdiction of the subject of the action; (3) that there is a defect of parties defendants, in that the corporation only is responsible, the defendants Rogers and Skinner “if acting at all, acting only as officers of said corporation; ” and (4) that two causes of action have been improperly united, in that the corporation is sued for specific performance and another cause of action is for tort against the defendants Rogers and Skinner for the detention of the stock, or for defrauding the plaintiff with respect to the stock. There is no merit in the contention that the complaint fails to state facts sufficient to constitute a cause of action, for it is well settled that a suit in equity will lie to compel the transfer upon the books of the company of stock to the true owner. (Cushman v. Thayer Mfg. Jewelry Co., 76 N. Y. 365; Bedford v. American Aluminum Co., 51 App. Div. 537.) The contention that the court is without jurisdiction of the subject of the action is based on the claim that all the relief demanded for which a foundation is laid by the allegations of fact relates to the internal affairs of a foreign corporation, [159] over which the courts of another State either have not jurisdiction or do not exercise jurisdiction. This is merely an action to enforce the contract rights of the plaintiff, and I am of opinion that upon principle and authority the Supreme Court of this State, acquiring jurisdiction over a foreign corporation and its officers by service of process within this State, has jurisdiction in a suit by a resident of this State to compel the transfer on the books of the company of capital stock owned by him into his name, and the issue of stock to him therefor. (Babcock v. Schuylkill & L. V. R. Co., 9 N. Y. Supp. 845; Westminster Bank v. Electrical Works, 73 N. H. 465. See, also, Prouty v. Michigan S. & N. I. R. R. Co., 1 Hun, 665; Ernst v. Rutherford & B. S. Gas Co., 38 App. Div. 388; Miller v. Quincy, 179 N. Y. 301; Jacobs v. Mexican Sugar Refining Co., Ltd., 104 App. Div. 242; Hallenborg v. Greene, 66 id. 590.) The individual defendants, being within the jurisdiction of the State and representing the corporation therein, are properly joined as defendants, for the reason that they are the officers who are authorized to make the transfer and to issue the stock, and whose duty it is to do so, and jurisdiction over them personally may he required to enforce the judgment. I think there is no merit in the contention that causes of action have been improperly united, for the allegations with respect to damages sustained by the plaintiff owing to the failure of the defendant corporation and its officers to transfer the stock are incidental to the equitable relief demanded, and the damages are demanded against all defendants. It follows, therefore, that the order should be affirmed, with ten dollars costs and disbursements, with leave to the demurring defendants to withdraw demurrer and to answer on payment within twenty days of costs in this court and in the court below. Clarke and Dowling, JJ., concurred; McLaughlin and Scott, JJ., dissented. Order affirmed, with ten dollars costs and disbursements, with leave to demurring defendants to withdraw demurrer and to answer on payment of costs.