American Water Works Co. v. Farmers Loan & Trust Co.

Mr. Justice Elliott delivered the opinion of the court.' By the petition to dismiss the writ of error, the answer’ thereto, and the agreed statement of facts filed in connection therewith, all matters essential to the determination of this motion are admitted. 1. A corporation is a creature of the law. It is always subject to the law of its charter, or if it has no special charter, then to the incorporation laws of the state or sovereignty under and by virtu'e of which it has been created; and though it may transact business in other jurisdictions, j-et its charter or the laws to which it owes its existence have a paramount influence over its corporate powers wherever it undertakes to exercise them. Hence, to determine the capacity or disability of a corporation in a given case,' regard must primarily be had to the laws of the state or sovereignty from which it has derived its franchises. See Canada Southern Ry. Co. v. Gebhard, 109 U. S. 527; also Bank of Augusta v. Earle, 13 Peters, 585, et seq., and cases there cited. 2. It appears that plaintiff in error is a corporation duly organized under and by virtue of the laws of the state of New Jersey. From the agreed statement of facts it appears that plaintiflf in error, prior to the suing out of the writ of error in this cause, had become an insolvent corporation, and had been so adjudged bj'- a court of competent jurisdiction in the state of New Jersey; that by the judgment of said court under the laws of said state the petitioner E. Hyde Rust had become the duly appointed and qualified receiver of said cor [210] poration, with full powers to control and manage its affairs; and further that plaintiff in error as a corporation, its officers, directors, agents and attorneys, and each and every of them, had been absolutely enjoined from in any manner continuing the business of said corporation, or from attempting to use its name, privileges, or franchises for any purpose whatever. There is nothing in the petition, answer, or agreed statement of facts to show that plaintiff in error, or Mr. Venner, as one of its vice presidents, has ever been 'relieved from the disabilities‘of said'injunction, or that they, or either of them, have any power or authority to prosecute the writ of error herein. It seems clear that Mr. Rust, as receiver of the plaintiff in error, is justified in pleading the laws of New Jersey relating to insolvent corporations and the decrees of a court of competent jurisdiction of that state based thereon, in support of his motion to dismiss the writ of error herein. Such laws and decrees are admitted to be correctly set forth in the petition. 3. Against the granting of this motion to dismiss, it is urged that the laws of a state have no extraterritorial force. It is also urged that the receiver of a corporation cannot exercise Ids powers as such beyond the jurisdiction of the court appointing him. Conceding that the laws of a state do not have any extraterritorial force, as mere laws, nevertheless, the general rule is that things done in one state, in pursuance of the laws of that state, are to be regarded as valid and binding in other states. Moreover, Mr. Rust, by his petition to dismiss this writ of error, is not seeking to transact business or do any affirmative act by virtue of his authority as receiver of the corporation ; on the contrary, he seeks to prevent the corporation of which he has been invested with exclusive control from doing an affirmative act contrary to the laws of the state from which such corporation has derived its powers, and contrary to the judgment of a court having full jurisdiction in the premises; in other words, he seeks to prevent Mr. Venner from making an unauthorized use of the name of such, corporation. In taking this course Mr. Rust is undoubtedly [211] acting within the scope of his authority as the duly appointed and qualified receiver of plaintiff in error. Relfe v. Rundle, 103 U. S. 225; Bockover v. Life Assn. of America, 77 Va. 85. An extended discussion of the legal questions involved in this motion seems unnecessary. Whatever-may be the grievances of Mr. Venner, it is clear that he is not entitled to use the name of plaintiff in error in the further prosecution of this writ. The motion to dismiss must be sustained. Dismissed.