Hyperlawhypertext legal database Plimpton v. Bigelow 12 Abb. N. Cas. 202

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Plimpton v. Bigelow

12 Abb. N. Cas. 202 Court N. Y. Supreme Court, First Department, First District; General Term, English

Decision Majority — Daniels, J. · Concurring — Davis, P. J.

Contents

Majority

p. 202
PLIMPTON v. BIGELOW.
N. Y. Supreme Court, First Department, First District; General Term,
March, 1883.
[Reversing 11 Abb. N. C. 180 .]

Headnote

Action against Non-resident.—Attachment as a Provisional Remedy.—Foreign Corporation Stock liable in Action by Non-resident, against Non-resident Owner.—Code Civ. Pro. §§644, 647, 3843, subd. 18.—Defense of Statute of Limitations must be Pleaded.—Provisional Remedies.
Stock of a foreign corporation having its office and principal business within this State, is subject to attachment here as property within this State, although the owner be a non resident, and his certificate has never been within this State.[1]
The construction and effect of the provisions of the Code of Civil Procedure, as to attaching interests of a debtor in the stock of a corporation, and as to definition of domestic and foreign corporations,—considered.[2]
p. 203
The objection that the cause of action has been barred by the statute of limitations, cannot be taken by affidavits interposed as ground for vacating an attachment, but only (as prescribed by Code Civ. Pro. § 413) by answer.
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Appeal from an order.
Charles T. Plimpton and George A. .Sawyer sued John Bigelow on several promissory notes.
p. 205
The parties were all non-residents, and the notes were made and dated and therefore payable in Massachusetts.
An attachment against defendant’s property, in usual ■ form, was granted as a provisional remedy May 11, 1882, on affidavits to the cause of action and defendant’s non-residence. Subsequently an order for service of summons by publication was made, on further affidavits setting forth inability to make personal service within the State.
The motion to vacate the attachment and proceedings thereunder was founded on the original papers on which it was granted, and on counter-affidavits of defendant stating that the attachment had been served by the sheriff “upon an officer of the Hat Sweat Manufacturing Company at an office kept by said company for the sale of its goods in the city of New York,” and that the sheriff had given the company notice and required its secretary to certify the number of shares defendant held; that the company was “a Pennsylvania corporation, having its principal office and manufactory in the said State, and is, as to the State of New York, a foreign corporation; that none of deponent’s shares of stock in said corporation are, or have been at any time, in the State of New York, nor has said corporation at any time had any property of deponent’s within the State of New York, nor does said corporation owe deponent any debt.”
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“Deponent farther avers, that he has no property within the State of Hew York, and that he is and has been since 1880, a resident of the State of Pennsylvania, and domiciled in the said State of Pennsylvania, and has not resided in the State of Hew York since the year 1868.’’
Defendant’s affidavit farther alleged, that the notes sued on were made after 1868, stating dates, &c., . adding:
“That both of the plaintiff’s- herein are non-residents of the State of Hew York, but reside in Massachusetts ; and that none of the causes of action alleged in the complaint arose within the State of Hew York ; and that the subject of the said action is not situated within the State of Hew York; and that all the causes of action alleged in said complaint, if any such ever existed, are barred by the statute of limitations of the state of Pennsylvania, where deponent resides, and by the statute of the State of Hew York.
“That the summons in said action has not been served on deponent, nor has deponent appeared therein.
“That deponent apprehends that should said attachment not be vacated and set aside, the said sheriff said will assume to sell deponent’s shares and interest in corporation ; and that said corporation may refuse to recognize deponents rights as a stockholder, to his great loss and damage; and that said attachment is a cloud upon deponent’s title to said stock.”
There was also, an affidavit that the certificates of his stock had been issued, and always remained in Philadelphia.
Annexed were affidavits of a member of the Philadelphia bar, to the Pennsylvania statute of limitations, and the fact that the causes of action were barred under that law ; and that by the Pennsylvania law the corporation in question was exclusively located-
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within that State, and stock in the corporation subject to execution and attachment there, and that by the law of that State no proceeding by a foreign court, could operate to transfer the title or possession ; and that by that law the locality of a certificate of stock even if in a foreign State, did not subject it to attachment. Citing Christmas ». Biddle, 13 Pa. St. 223 .
, In opposition to the motion,to vacate, plaintiffs presented affidavits, alleging that the company’s articles of association, provided that its business was “ to be transacted in Philadelphia with branches in New York city and elsewhere,” that the only thing-done in the Philadelphia office was the annual meeting, and that its chief place of business was in the city of New York where it “manufactures goods, makes all its business arrangements, pays all its bills, and carries on its general business,” and where two of its three directors resided and its directors frequently held meetings.
The court at Special Term and Chambers, set aside the levy on the ground that these shares were not properly within the city and county of New York as to be leviable under CodeCiv. Pro. §647, &c. [Reported in 11 Abb. B. C. 180.]
Plaintiffs appealed.
Edward D. Bettens (Bettens & Lilienthal, attorneys), for plaintiffs, appellants.
Simon Sterne (Sterne & Thompson, attorneys), for defendant, respondent.
I. There is no living cause of action to support the attachment. The court will not compel payment in any form of proceeding when it is made to "appear that there is nothing due according to the law of the land (Van Tassel v. Van Tassel, 31 Barb. 439 ; People ex rel. Whillis v. Brotherson, 36 Id. 662; People v. Everest, 4 Hill, 71 ). The statute of limitations is to be applied by analogy even where not expressly applicable (Kane v. Bloodgood, 7 Johns.
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Ch. 90 ; Souzer v. DeMeyer, 2 Paige, 574, 587 ; Paff v. Kinney, 1 Bradf. 1 ; McCartee v. Camel, 1 Barb. Ch. 455 ).
II. The rights or shares mentioned in Code Civ. Pro. § 647, refer to the rights or shares in domestic corporations only, and not in foreign corporations. The rights and shares in a foreign corporation are not within this State, even in the case where the certificate is within the State (Christmas v. Biddle, 13 Pa. St. 223 ; Moore v. Gennett, 2 Tenn. Ch. 375), much less where the certificate is not here. The whole Code is to be construed together, and whenever it gives jurisdiction in regard to foreign corporations, it describes them as such. Moreover, from the nature of the property, section 647 could only refer to shares in a domestic corporation ; because rights or shares i'n foreign corporations are not within the jurisdiction of the court, and it would' have been manifestly absurd in the law to have drawn the distinction between domestic and foreign corporations in the wording of this act, for over the rights and shares of foreign corporations the courts of New York, could exercise no jurisdiction. Hence, such general terms as corporation or association, are used not as terms of enlargement. From the nature of the circumstances, domestic associations or corporations, as to their stock, are the only ones. which are subject to the jurisdiction of the court. To have inserted the word “domestic” before “corporation,” would have been clearly superfluous. Section 647 is a re-enactment of a provision of the previous Code of Procedure (§ 234), and in the particular having a bearing upon this case has not been changed. Therefore the decisions under section 234 of the prior Code of Procedure are authoritative upon this question. A further illustration of the fact, that the words “association or corporation,” in section 647, are intended to apply exclusively to domestic corporations is given by the following section wherein
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writs of attachment are given on bonds, promissory notes or instruments for the payment of money only, executed by a foreign or domestic6 government, state, county, public officer, association, municipality, or other corporation, and by the section preceding in which a right to issue warrant of attachment is given upon subscriptions to foreign corporations which are yet unpaid, or to enforce the same upon one or more shares of stock therein held by such a person, or transferred by him for the purpose of avoiding payment of his subscription. Whenever jurisdiction is intended to be given over foreign corporations, it is specifically given and cannot be inferred. That the Hat Sweat Manufacturing Company is a foreign corporation under the definition of the Code (§§ 33, 43, subd. 18),.is too clear for argument. Section 648 of the Code was intended to supersede the ruling in the case of Bates v. New Orleans, &c. R. R. Co., in 4 Abb. Pr. 72 , and the case of Willet v. Equitable Ins. Co., 10 Abb. Pr. 193 , wherein it was held that a debt, due from a debtor not within the State, is not liable to attachment here, although the evidence of the debt, the bond, note, &c., may be within the State, on the ground that the evidence of the debt is not the debt itself, and that the debt follows the person of the creditor, it having no situs of its own. Had, therefore, the Hat Sweat Manufacturing Company been indebted to the defendant, and the bond or evidence of indebtedness been in the jurisdiction of the court, an attachment might have been levied in favor of the plaintiffs, under section 648 of the Code, notwithstanding the prior decisions. Shares of stock of a corporation are not debts of the corporation, and the exception to the general rule made by section 648, being an exception to the common law principle, must be strictly construed, and its provisions confined to choses in action arising upon contract, including the evidences thereof then found within the county at the time of the attach-
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ment, if they apply to foreign corporations. In Moore v. Gennett, 2 Tenn. ch. 375, a judgment had been recovered in the State of New York, by Robert Moore & Co., against Spencer, on attachment of shares of stock in a Tennessee insurance company, the certificates of shares of stock then actually being in New York. Robert Moore & Co., sought upon this judgment to compel, in Tennessee, the Tennessee Insurance Co., to transfer the stock to them, and on an interpleader by Gennett, who claimed title thereto by attachment subsequently made with the State, the court of last resort of that State held that the stock in controversy, being the stock of an insurance company chartered by and located within the State of Tennessee, the garnishees, Ranney & Co., in whose hands the certificate had been attached, held only an evidence of the stock issued to Spencer. “If the certificate,” says the court, “had been attached, the court would only have had control of the paper, not of the res. It could not acquire a right to the stock under our laws as against the creditors of Spencer, except by notice to the company, and it would seem to be as contrary to sound principles for the court of one State to undertake to sell the stock of the corporation of another State as to undertake to acquire jurisdiction of the person of a citizen of another State by service of process upon him in such State. The title to stock in such incorporated company and the mode of reaching it by judicial proceedings must depend upon the laws of the State in which the corporation is situated. In this State such stock could not be reached by legal proceedings in inmtum except by statute.” Brake on Attachment, § 244, lays down the rule as an accepted proposition that, under attachment laws authorizing attachment of stock of corporations, there is no right to attach stock in foreign corporations. Section 471, Id. says: “Rules governing liability of corporations as a garnishee do not differ from those
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applicable to the case of an individual The corporation must either have personal property of the defendant in its possession, capable of being seized under execution or be indebted to him. Neither of these conditions is fulfilled by the mere fact of defendant being a stockholder in the corporation; and the corporation cannot be charged as his garnishee on that account” (Planters’ & Merchants’ Bank v. Leavens, 4 Ala. N. S. 753; Ross v. Ross, 25 Geo. 297; Section 474, Drake on Attachments). In this country the uniform tenor of the adjudication establishes the doctrine that, whether the defendant resides or not in the State in which the attachment is obtained, a non-resident cannot be subjected to garnishment there, unless when garnished, he have in that State property of the defendant in his hands, or be bound to pay the defendant money, or deliver to him goods at some particular place in the State. As in many other questions in the law of attachment, Massachusetts was first to pass upon this point, in a case where both defendant and garnishee were non-residents (Tingley v. Bateman, 10 Mass. 343 ). The same ground has been taken in Maine, New Hampshire, Vermont, Connecticut, New York ( 4 Abb. Pr. 72 ) and District of Columbia {Id, § 478.) The principles which would exempt non-residents from garnishment would produce the same result in the case of a foreign corporation. This was so determined in Massachusetts, though the officers of the corporation resided, and its books and records were kept, in that State, and though the statute there declares that “all corporations may be summoned as trustees.” The very generality of the term is considered to require some qualification. “It cannot,” said the court (Danforth v. Penny, 3 Metc. 564 ), ‘£ be construed literally all corporations, in whatever part of the world established, and transacting business. The answer is to be found in the statutes in pari materia then existing.
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The statute in question was only an extensión of the then existing system, it was intended, we think, to put corporation on the same ground as individuals,” &c. In the case of Christmas v. Biddle, 13 Pa. St.. 223 , it was held that a certificate of stock in. a bank of another state sent to a resident in Philadelphia, with authority to sell it, was not subject to foreign attachment, under the laws of the State of Pennsylvania, There, as in-the Tennessee case, there was an element much stronger than any that exists in this case, to wit: The certificate of stock sought to be attached was actually within the jurisdiction of the court, and in the Pennsylvania case there was the additional element, that the Bank of the United States, situated in Philadelphia was the transfer agent of the Commercial Bank of Natchez, the stock of which was sought to be attached in an action brought by Christmas against the Planters’ Bank, which was the owner of the stock, and had sent the stock to Biddle & Co., bankers in Philadelphia, for sale. Judge Oottlteb, delivering the opinion'of the court, says : “ The attachment process is a proceeding in rem, and the matter and thing attached must be in .the power and jurisdiction of the court. You might as well, by an ideal and constructive service on the person of the defendant, resident in Mississippi, summon him to appear in our court, as to attach him to compel an appearance by attaching his bank stock in a bank located and established by law. in Missisippi. This stock is held and is transferable according to the law of its creation, the statute of Missisippi, on the books of the bank only, either in person by the holder or his attorney duly appointed. It will hardly be contended that lands in Mississippi, could be attached because the owner had sent on to this city his title deeds, with power to a broker to sell the same and raise money. “Yet there is,” says the court, “in fact
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no difference. It is the stock of the bank which is attached in this case, and the individual to whom the certificate of stock was sent with power to sell was made the garnishee. Bank stock is made subject to levy and attachment recently by our statutes, but then, it is bank stock of our own State subject to our own laws, and transferable by a judicial sale under them, and not British or French bank stock, or the bank stock of any other State which, in this respect, is to be considered as a different sovereignty; and the property created by its laws must be considered as subject to those laws, because its banks can exist in no other mode nor in any other place than prescribed by its laws. To hold the contrary would do absolute injustice to our own citizens, by making them accountable for the whole value of the stock which they were empowered to sell, inasmuch as they could not produce it to be sold on ft. fa. as the sale on such process would be an idle and void ceremony. Moreover, it would discourage commerce and trade to hold that such a power to sell bank stock was attachable without being of any service to the attaching creditor, for the process would be wholly valueless and insufficient in Mississippi to transfer the title of the stock in the Planters’ Bank of that State.”
This case was affirmed in Childs v. Digby, 24 Pa. St. 26 . in which Lewis, J., delivering the opinion of the court, says upon the subject of attachment in relation to bank stock : 1 ‘ Real estate follows the law of its situs and bank stock the law of- its creation. Where the one is located in a foreign jurisdiction or the other created by a foreign law, neither is the subject of attachment here.”
The timited power of attachment, given in cases against foreign corporations under section 646, for unpaid subscription to such foreign corporations when the foreign corporation is a party defendant, is given
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simply as a means of compelling the payment of debts due to a foreign corporation, to a domestic creditor of the corporation so that upon stock which has been partially subscribed .for, the stock itself may be attached as security for the payment of subsequent subscriptions ; and as the corporation to which the subscriptions are due would have had the power to confiscate such stock for its unpaid subscription, the power to attach the stock for unpaid subscription is given to the creditor of a foreign corporation as an equivalent, to place him, by the power of attachment, in a position analogous to that held by the foreign corporation to whom the subscription is due, in its power to appropriate stock, not fully paid up, for failure to pay subsequent calls.
III. The mere existence of an agency in the city of New'York, for the sale of goods manufactured by the Hat Sweat Manfacturing Company, does not bring the stock into the State. Stockholders are not partners. They have a mere interest in dividends. The property is vested in the corporation. The stockholders are wholly unknown to the law, in so far as the property of the ^corporation is concerned (Montgomery County Bank v. Marsh, 7 N . Y. 481 ; Hyatt v. Allen, 56 Id. 553 ). Although a corporate body carry on business beyond the territorial limits of the State which created it, it has no corporate existence beyond those limits (Day v. Newark India Rubber Mf’g. Co., 1 Blatchf. 628 ; Bank of Augusta v . Earle, 13 Pet. 519 , 588 ; Ohio & Mississippi R. R. Co. v. Wheeler, 1 Black, 286 ). The individual members of a corporation are not owners of the personal property vested in the corporation, nor is each of them owner of any part of it, nor are they joint owners of the whole. Although they are each interested in the property, as they may derive individual benefit from its increase, or loss from its destruc
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tion. But the abstract entity, the corporation, is the owner and the only owner of the property (Pacific Steam. Nav. Co. v. Arnaud, 16 Law J. N. S. Q. B. 50). It must be perfectly clear to the court, that any attempt to have levied upon the property of the Hat Sweat Manufacturing Company on the ground of Bigelow’s interest therein, would have been futile, because Bigelow’s interest was not an interest in the property but in the capital stock; and as the product of the manufacturing process of the garnishee was the only property within the j nrisdiction of the State upon the basis of which the stock is attempted to be reached, this attachment, if it holds, holds only upon the theory that property beyond the jurisdiction of this State, to wit: stock in a foreign corporation, can be attached through the instrumentality of property within the jurisdiction of the State, to wit: sweat hat-bands, which themselves are not subject-matter liable to attachment in the action against this defendant Bigelow. The stock of Bigelow was doubtless in a proper case subject ,to attachment in Philadelphia. The corporation had its being there, and the certificate of stock was situated there. Now how can that property be at the same time in two places ? If it was in New York, subject to attachment here, it could not have been so in Philadelphia. If it was in Philadelphia, as it doubtless was, on the day when this attachment was levied, it could not be the subject matter of attachment in New York. The certificate of the treasurer and secretary who seems, accidentally, or incidentally, to have been in New York city, certifying that the defendant has 469 shares of the capital stock of the foreign corporation, does not create any property within the State, but is simply the giving of information as to property of the defendant situated elsewhere. Had Mr. Lester been the agent of the defendant to sell in the city of New York lands situated in Pennsylvania, Mississippi and Iowa and
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had in his possession powers of attorney to make transfers of such lands and abstracts of titles and deeds showing where the lands were situated, it could not be for one moment pretended that, leaving an attachment upon such lands in his hands and getting from him a certificate of the number of acres owned by the defendant in sister States, would give this court the slightest jurisdiction by way of attachment over such land, although Lester had power to sell them and had every possible information in. relation thereto. The certificate, therefore, containing information to the plaintiffs of the situation of property of the defendant, may possible be of service to the plaintiff when he recovers a judgment against the defendant in a court having jurisdiction over the person or property of the defendant, but cannot be the basis of jurisdiction.
IV. If this action is permitted to proceed, to judgment, the court will be utterly without jurisdiction to enforce the transfer of the shares in question in behalf of the plaintiffs in this action. The plaintiffs in this action are non-residents of the State. The defendant is a foreign corporation, and this court, under section 1780 of the Code, hás no jurisdiction to enforce its decree in favor of these plaintiffs against the .Hat Sweat Manufacturing Company. In the case of Cumberland Coal Co. v. Sherman, 8 Abb. Pr. 243 , it was held that, in an action against a foreign corporation, it must appear, in order to give the court1 jurisdiction, either that the cause of. action arose, or the subject matter of the action is situated, within this State, or that the plaintiff is a resident of this State and the defendant has property within it; and that the act of 1855 (since incorporated into the Code), requiring foreign corporations doing business within this State, to designate a- person to . receive service of process, merely facilitates the service in a class of cases in which the court already had jurisdiction. It does not operate to give the court jurisdic
p. 217
tion of cases not included in sections, 134 and 427 of the (old) Code. The court in that case says : “ The main relief, which the plaintiff does not ask for in this complaint, but which the plaintiff requires, to wit: restoration of the real estate (the real estate of the corporation), must be had in the courts or through the authorities in'Marvland, and it may well be doubted whether much of the relief asked for in the complaint against the Hoffman Company is not incident to or can be separated from an action for such possession.” In these last cases the court substantially says, that where it is shown to the court that the proceedings will be wholly ineffectual, and that the court ultimately will have no jurisdiction over the property intended to be recovered and cannot enforce its mandate, it will refuse to take jurisdiction and set the proceedings aside. It is a waste of time on the part of the judicial, organization of this State to carry on proceedings which are destined to be wholly ineffectual in consequence of a want of power in the court to excute its decree. That it is a rule that general terms. in laws are not extended to include foreign corporations, and that they must be specially named as such' to be included within the term of any law, is indicated by the course of decisions in the United States supreme court, interpreting the meaning of the United States constitutional provision, giving to citizens of each State the privileges and immunities of citizens in the several States. This current of decisions holds, that corporations are not citizens within the constitutional provision that the citizens of each State shall be entitled to all of the privileges and immunities of citizens in the several States, in such sense as to prevent a State from imposing payment of a license fee as a condition of permitting a foreign insurance company to do business within her limits. They are creatures of local law, and have not even an absolute right of recognition in other States, but depend for that and for
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the enforcement of their contracts, upon the assent of such States, which may be given on such terms as the States may respectively prescribe (Paul v. Virginia, 8 Wall. 168 ; and see 48 Ill. 172 ; Ducat v. Chicago, 10 Wall. 410 ; Farmers’ & Merchants’ Ins. Co. v. Harrah, 47 Ind. 236 ; Phoenix Ins. Co. v. Commonwealth, 5 Bush {Ky.) 68 ; State v. Fosdick, 21 La. Ann. 434 ; Western Union Tel. Co. v. Mayer, 28 Ohio St. 521 ).
V. This attachment has been procured by non-residents against a defendant who is a non-resident and who has no property within the State and where a judgment by default could not be enforced, and it has been procured on a claim barred by the statute of limitations. This court should discountenance such use of their time by non-residents. If plaintiffs have any cause of action the courts of Pennsylvania, where defendant resides, are open to them. Defendant is there and his property is there, and it will be no hardship for Massachusetts plaintiffs to go so much farther from home. If plaintiffs have allowed the statute of limitations to run, they alone are at fault. The order appealed from should be affirmed because: 1. Plaintiffs have no right to levy on defendant’s interest in a foreign corporation. 2. Unless defendant appears generally in the action, the levy cannot ripen into a judgment which can be enforced, under the decision in Willet v. Equitable Ins. Co., 10 Abb. Pr. 193 . 3. Plaintiffs have no cause of action which they can maintain by reason of the statute of limitations.
VI. The doctrines that an attachment may be allowed to stand for what it is worth, although no property is found (Donnell v. Williams, 21 Hun, 216 -219 ; Staats v. Bristow, 73 N. Y. 264 ); that a foreign corporation having an agency for the transaction of business within a State is “found” there within the meaning of the U. S. statute regulating the place where defendants may be sued (Ex parte Schollenberger, 96 U. S. (6 Otto) 369; R. &
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Merchants’ M’f’g Co. v. Grand Trunk R’y Co., 63 How. Pr. 459 ), are not controverted; but the line is drawn precisely in section 1780, when a non-resident may sue a foreign corporation. And we do not dispute that an attachment may stand “for what it is worth,” even where no property is found, but not where no living cause of action exists.

The plaintiffs, who resided in the State of Massachusetts, brought this action to recover the amount unpaid upon promissory notes made by the defendant. The demands were such as were the proper subject of an attachment under the provisions of the Code, and the plaintiffs were entitled to institute their suit for the recovery of the amounts claimed in this court. And for the purpose of obtaining satisfaction they could lawfully avail themselves of all the legal remedies provided by the Code for that purpose (Hibernia National Bank v. Lacombe, 84 N. Y. 367 , 385; S. C., 38 Am. R. 518 ; aff’g 21 Hun, 166 ). Under this authority they had a right to seize whatever property or interests the law of this State rendered the subject of attachment. And by virtue of its provisions the sheriff in form levied upon the shares owned by the defendant in a corporation formed under the laws of the State of Pennsylvania, and known as the Hat Sweat Manufacturing Company.

This seizure was set aside on motion of the defendant, for the reason that the shares were not deemed subject to the power or operation of the attachment.

Whether this decision was correct is the chief point in controversy upon this appeal.

Ordinarily, when neither the owner of the shares nor the corporation itself can be found within this State, the attempt to make a seizure of this nature would be entirely ineffectual. For the sheriff in executing an attachment can only seize the property of the debtor

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which may be found in his county, and where the owner of the shares, as well as the' corporation issuing them reside and is located in another State, the shares themselves would not be within the county in which the attachment might be issued, and for that reason would be incapable of being levied upon by means of it. But this was not á case of that description. For," while the corporation was formed under the laws of the State of Pennsylvania, one of its objects was to transact business in the city of New York, and as a matter of fact its chief place of business was there located, where it manufactured goods, made its business arrangements, paid its bills and carried on its general business; and two of its three directors were residents of the city of New York. 'For this purpose its capital, to a very considerable extent certainly, must have been brought to this State and invested in such business, and the profits to be derived by it and from which the dividends would be made upon its stock would in that manner be obtained from this State. To that extent it enjoyed all the rights and privileges of a domestic corporation, and placed itself, by its opera- • tions, within the county in which the plaintiff’s attachment was afterwards issued.

So far as defendant was the owner of the shares of the corporation he himself was interested through them ’ in its capital and the business carried on by it (Burrall v. Bushwick R. R. Co., 75 N. Y. 211 ). His stock, of which the certificates held by him were evidence of his title, was actually therefore within this State, and as such should be subjected to the satisfaction of his obligations to his creditors. There could be no more reason for exempting his shares from his obligations than there would be if the corporation itself had been organized and existed under the laws of this State. For its business pursuits were carried on substantially the same as if this particular corporation had been created

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under its laws. There was clearly ho substantial difference upon which the owner of such shares could claim immunity. The purpose and object of the corporation was the manufacture and sale of its fabrics,' and that business is shown to have been confined to the city of New York. It was here carried on by the corporation through its officers and agents. To that extent, it located itself in this city, as it was contemplated it might under its articles of incorporation, and it was consequently a corporation within this county.

The law has provided, in general language, that.the 61 rights or shares which the defendant has in the stock, of an association or corporation, together with the interests and profits thereon, may be levied upon” under an attachment {Code Civ.' Pro. § 647). This section has in no manner been confined in its effect to corporations formed under the laws of this State. It is of course to be construed with section. 644, requiring the property to be levied upon to be within the county, and that is the only restraint to which this general enactment has been subjected. And the association or corporation whose shares may be so levied upon, may as well, under this language, be one formed under the laws of another State as though it was formed under the laws of this State. And that this section was intended to be so construed is evinced by the circumstance that when a discrimination is intended to be made, the Code by its provisions has designated the particular corporations as either domestic or foreign corporations. And care has .been taken to preserve this distinction by a definition to that effect given in the Code itself {Code Civ. Pro. § 3343, subd. 18). By this definition, what shall be known as a domestic corporation has been declared, and every other is denominated a foreign corporation. Where no such discrimination as that has been made, and the language is appropriate for that purpose, it is, therefore, to be

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presumed that it was intended to include all corporations, and that employed in the section already referred to is of that character. A provision of a like general nature was considered in Southern Life Ins. Co. v. Packer ( 17 N. Y. 51 ), and it was held to include corporations formed in other States as well as those created under the laws of this State, and no reason appears for' distinguishing the present case from the principle of construction established by that authority. The Code has prescribed the particular manner by which the shares of the defendant in a corporation may be seized under an attachment, and that is the only qualification to which the exercise of this authority has been subjected. To make such a seizure, a copy of the attachment, with notice showing the property attached, is to be left with the president or other head of the association or corporation, or secretary, cashier or managing agent thereof (Code Givi Pro. § 649, subd. 3).

Whenever .the corporation, by means of its operations in business, may be within the county in which the attachment has been issued, and these requirements can be observed there, the Code has provided for the seizure of the shares owned in it by the defendant. This is all that has been provided for to constitute a literal compliance with all the provisions made on this subject by the statute. When that may be done, it was clearly the intention of the law that such shares might be effectually levied upon by means of the attachment.

It has been stated generally, in a recent work upon this subject, that' the right to attach the shares of a defendant in a corporation is restricted to those corporations existing under the laws of the State in which the attachment may be issued {Drake on Attachment, 5th ed. § 244). This general statement of the law was made upon the authority of Moore v. Grennett (2 Tenn.

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Ch. 375). And ifc was so generally considered in the opinion of the court; but the case was not determined upon that point, for it appeared that the interest of the defendant in the shares themselves was neither in fact nor in form levied 'upon under the attachment. No lien upon or title to the shares could therefore be maintained, and for that reason principally the right and claim of the creditor was rejected.

The inability of the creditor to attach the debtor’s shares in a corporation created under the laws of another State was maintained, so far as it was considered, substantially upon the authority of Steel v. Smith ( 7 Watts & S. 447 ). But that is in no sense an authority upon this point. It was an action upon a judgment recovered in the State of Louisiana, where the suit was commenced by a seizure of the debtor’s property; and this was held to create no personal liability against the debtor upon which the action could be maintained. These authorities, consequently, do not maintain the general statement of the law made by this authority. It undoubtedly would be a correct statement of it where neither the debtor himself, nor the corporation by which the stock was issued to him, should be within the State when the attachment was issued. But such were not the facts of this case as they have been presented by the affidavits for here the corporation had voluntarily placed itself within this State, where its active and principal business operations were contracted. The case of Danforth v. Penny (3 Met. [44 Mass.] 564) is entitled to no broader application. For the statute under which it arose was so construed as to be intended to place corporations on -the same footing as to liability as that of individuals, which had previously been held not to include the residents and inhabitants of any other State. It is no authority for limiting the provisions of the Code so far as to exclude a case of the nature of that now before the court.

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What the law maybe upon this subject is necessary for the legislature to declare, and when that .declaration has been plainly made it is the duty of the courts to follow and enforce it, even though it may not be in strict accord with the views expressed upon the same subject by the courts of a neighboring State. The legislative purpose as to attachment proceedings has been clearly defined by the provisions which have been made in this State, and by them the shares of a defendant in a corporation have been rendered the subject of seizure by virtue of an attachment, whenever the proceeding particularly specified can be taken and followed. This was a case of that description, for one of the resident directors of the corporation whose shares were owned by the defendant was its treasurer and secretary, and in the seizure of the shares, a copy of the attachment, together with a notice that those shares were levied upon, was served upon this officer, and, to promote the proceedings as he was required by the law to do, he made his certificate stating the number of shares owned by the defendant in this corporation. The terms, as well as the spirit of the statute, were fully complied with ; and as the corporation carried on its business, and had the bulk of its property in this county, that was all which could be required for the lawful seizure of the shares under the attachment.

The fact that by the provisions of the statute, the time within which an action for the collection of a debt may be instituted may appear to have expired before this suit was commenced, will not justify the order from which the appeal has been taken ; for, by section 412 of the Code of Civil Procedure, this objection can only be taken by answer. This section is clearly imperative, and renders an examination of the authorities relied upon by the respondent on this subject unnecessary at this time.

The case is an important one, and it is known as a

Concurrence

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matter of fact that the learned judge by whom the order was directed from which the appeal has been taken, entertained grave doubts as to its propriety. If it should be sustained in this instance, then every creditor, whether a resident or not a resident of the State, would be deprived in cases of this description of the power, through the intervention of its tribunals, to obtain satisfaction of their debts, simply because the corporation, prosecuting its business enterprises within this State, had elected to organize itself under the laws of another State. The distinction between this corporation and a corporation formed under the laws of this State, in view of the other facts made to appear, was simply nominal, and the consequence should be held legally to follow, that the debtor, profiting in the same manner by the operations of the corporation as he would if it had been formed under the laws of this State, should not be exempt from the compulsory means provided by law for satisfying his debt. Such a distinction should not be made without some provision in the law indicating the necessity of its adoption. No such provision has been inserted in the Code as it now exists. But those which have been enacted, plainly require a different view to be taken of their effect.

The order, for these reasons, should be reversed, and an order entered denying the motion made by defendant, but without costs.

I concur on the ground that, for all practical purposes, the Hat Sweat Manufacturing Company may be treated in this case as though it were a domestic corporation. Though organized under the laws of Pennsylvania, yet its office, factory, business and affairs are located and conducted in this State. Its stock may be properly deemed to be in this State, so that it may be attached here by a creditor of its owner.

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The question is not free from doubt, but it seems to me proper to solve the doubt in favor of the plaintiff.

Order reversed.

Note on the Locality of a Corporation.

A survey of the recent decisions upon the question of the status of foreign corporations, indicates that the great extension of corporate business and relations has brought under debate again, questions, formerly deemed well settled, in regard to what may be called the attribute of locality; and this decision, although turning upon the phraseology of our new statute, is in harmony with the views now-mo'st frequently finding expression in the decisions of our courts throughout the country.

To some extent the decisions are irreconcilable; but viewed, connectedly they indicate a marked and general tendency to recognize the existence in each State, and even the presence there, of corporations created by other States, and which under the language of earlier authorities could not be conceived as having any existence beyond the territorial limits of the State of their creation.

Coupled with this dispositiou to recognize the presence of foreign corporations, is the disposition of the courts to go as far as local law permits, in recognizing their substantial rights and powers (except," perhaps, as to tenure of real property), and the validity of acts in exercise of those powers, although done without the State of creation. At the same time, the restrictions formerly observed against subjecting foreign corporations to the jurisdiction of the courts, have been proportionately relaxed; and many of the cases which extend the legal conception of the existence of a corporation beyond the limits of the State giving it its existence, have done so for the purpose of subjecting it to the legal responsibility involved by its possession of property, and transaction of business within the State.

Formerly, a corporation, in contemplation of law, had no existence out of the State in which created, and as Judge Taney said (in the Bank of Augusta v. Earle, 13 Pet. 519 ), “ it must dwell in the State of its creation, and cannot migrate to another sovereignty.”

This was said in an action where it was sought to recover on transactions of a foreign corporation; and the court held, that notwithstanding this general principle, since the corporation may have agents, and act by them, their acts on its part without the State maybe valid.

The question came up some twenty-five years later, in a much more decided form, in Merrick v. Van Santvoord, 34 N. Y. 208 ,

p. 227
where it appeared that a Connecticut corporation existed for the purpose of doing a navigation business on the Hudson river, in this State, and an action wah brought here against some of the corporators individually, and others concerned in the transportation, to charge them with negligence. The defense litigated by the defendant who was a member of the corporation, was that the corporation was the proper defendant in his place. The supreme court refused to recognize the shield of the corporate existence in this State, deeming this the necessary result of the doctrine that a corporation cannot migrate (38 Barb.574). But the court of appeals, in a luminous opinion by Judge Porter, vindicated the necessity of recognizing corporations as having a legal existence irrespective of the place of creation, and sustained full-y the principle that if a corporation of one State establishes even its entire business in another State, and has its officers and agents there (the local law not being infringed), its charter, ¿hough a foreign one, shields them and its stockholders, and the courts of the State where it thus does business must deal with it as & corporation, and cannot treat its members as mere partners; subject, however, of course, to whatever disabilities the local law imposes upon foreign corporations.

The most significant recent expression of this conception of corporations as capable of extra-territorial existence, was given in 1880, by Chief Justice Waite, in the case of Relfe v. Rundle, 103 U. S. (13 Otto) 222, where he said: “No State need allow the corporations of other States to do business within its jurisdiction unless it chooses, with perhaps the exception of commercial corporations; but if it does, without limitation express or implied, the corporation comes in as it has been created. Every corporation necessarily carries its charter wherever-it goes, for that is the law of its existence. It may be restricted in the use of some of its powers while doing business away from its corporative home, but every person who deals with it everywhere is bound to take notice of the provisions which have been made in its charter for the management and control of its affairs, both in life, and after dissolution.” This case arose on a controversy between Louisiana creditors and policy-holders of a Missouri insurance company, and the officer and statutory representative in Missouri, the State superintendent of- the insurance department, exercising the powers conferred upon him by the law of that State. And the court held that the law which clothed him with this trust was, in legal effect, part of the charter of the corporation; that the creditors and policy-holders were bound by his rights as such; and that these provisions of law must, in effect, control the courts of Louisiana in dealing with its local assets there, as the property of a foreign corporation.

p. 228
This decision has been since approved and applied in the supreme court of appeals, in Virginia (Nov. 1882, Bockover v. Life Association of America, 6 Va. L. J. 694); and to the same effect is a decision in the U. S. circuit court, for the western district of Tennessee. Taylor v. Life Association of America, 13 Fed. Rep. 493 . Compare, however, Commonwealth v. Standard Oil Co., Penn., November 20, 1882, 15 Reporter, 59.

In consonance with this view are the recent cases turning on statutes, etc., applicable to corporations “within ” or “ in ” or “ found in ” the State. Statutes referring to corporations “in ” or “within” the State, are not necessarily confined in application to domestic corporations. They are usually construed in support of the remedy, as applicable against foreign corporations having within the State property and agents on whom service can be made. Libbey v. Hodgdon, 9 N. H. 394 ; McGregor v. Erie Ry. Co., 35 N. J. L. 115 . Compare Wright v. Douglass, 10 Barb. 97 .

So also, under the act of Congress of 1875 (18 Stat. at L. 470), — which provides that no civil suit shall be brought in the U. S. circuit court, under the provisions giving concurrent jurisdiction with the State courts, “against any person by any original process, or proceeding in any other district than that whereof he is an inhabitant, or in which he shall be found at the time of serving such procees or commencing such proceeding” etc., (Same stat. Rich Supp. to U. S. R. S. 173),—a foreign corporation is deemed “found ” for the • purpose of service of process, wherever they have managing agents within the district, transacting business there. Matthews, J., in Mohr, &c. Distilling Co. v. Insurance Companies, 12 Fed. Rep. 474 , with note. Followed in case of a railroad company, in McCoy v. Cin. Ind. St. L. &c., R. R. Co., 13 Id. 3. To the same effect, Mohr, &c. Distilling Co. v. Lamar Ins. Co., Cincinnati Superior Court, 12 Fed. Rep. 476 , note.

So in Johnson v. Hanover Fire Ins. Co., 15 Fed. Rep. 97 , and cases cited, foreign corporations have been deemed within the meaning of statutes providing for the service of process on corporations, not expressly limited to domestic corporations.

An important application of this view has recently arisen under the statute of limitations. It was formerly well settled that a foreign corporation, since it was deemed always absent from the State, was within the exception in the statute of limitations precluding absentees from taking advantage of it. The leading cases are Olcott v. Tioga R. R. Co., 20 N. Y. 210 ; Mallory v. The same, 3 Abb. Ct. App. Dec. 139 ; approved and followed in Robinson v. Imperial Silver Mining Co., 5 Nev. 44 , 74. To the same effect, Blossburg, &c. R. R. Co. v.

p. 229
Tioga R. R. Co., 5 Blatchf. 387 ; 20 Wall. 137 ; State v. Central Pac. R. R. Co., 10 Nev. 47 ; Barstow v. Union Con. S. M. Co., Id. 386.

But this doctrine has recently been very emphatically disapproved in the ease of McCabe v. Illinois Cent. R. R. Co., 13 Fed. Rep. 827 ; where it was held that a foreign corporation, which, by the laws of the State within which it carries on business, can sue 'and be sued, is not a non-resident in the sense that would prevent it from setting up the statute of limitations as a defense in an action against it; and section 2533 of the Code of Iowa, that provides that “ the" time during which a defendant is a non-resident of the State shall not be included in computing the period of limication,” has no reference to such a case. [Citing decisions of Illinois and Iowa, to the effect that even a foreign corporation is to be deemed a resident wherever it exercises its franchise.]

The most recent decisions in this State, however, adhere to the rule in the Tioga case. Rathbun v. Northern Cent. Ry. Co., 50 N. Y. 656 ; Boardman v. Lake Shore & M. S. Ry. Co., 84 N. Y. 157 ; 8 Weekly Dig. 347; Prouty v. Lake Shore & M. S. R. R. Co., 85 N. Y. 272 , 274.

Under the peculiar language of the Code of Civil Procedure, however, a corporation of another State sued here on our statute for causing death, may plead the short limitation peculiar in that statute (Code Oh. Pro. § 1902), for this is “a different limitation prescribed by law ” (| 414), and this takes the ease of a foreign corporation out of the general rule by which (being deemed a non-resident under § 401) the ordinary limitations do not avail it. N. Y. Super. Ct. Sp. T., Londriggan v. N. Y. & New Haven R. R. Co., reported at p. 272 of this vol.

As to pleading the foreign statute of limitations, see Code Civ. Pro. § 390.

As to double charters, see also Aspinwall v. Ohio & Miss. R. R. Co., 20 Ind. 492 , 496; Sprague v. Hartford, Prov. & F. R. R. Co., 5 R. I. 233 ; Covington v. Covington, &c. Bridge Co., 10 Bush, 69 , 79; Fisk v. Chicago, &c. R. R. Co., 53 Barb. 513 ; Nashua & Lowell R. R. Co. v. Boston & Lowell R. R. Co., Circuit Court, Dist. Ma s. August 27, 1881; Ohio & Miss. R. R. Co. v. Wheeler, 1 Black, 286 ; Bishop v. Brainerd, 28 Conn. 289 ; Columbia Del. B. Co. v. Geisse, 38 N. J. L. 39 ; Goldsmith v. Home Ins. Co., 62 Geo. 379.

As to organization and corporate meetings without the State of original creation, see also Graham v. Boston, Hartford & Erie R. R„ Co., 14 Fed. Rep. 753 ; Ohio & Miss. R. R. Co. v. McPherson, 35 Mo. 13 ; Miller v. Ewer, 27 Me. 509 ; Hanna & Finley v. International Petrol. Co., 23 Ohio St. 622 ; Aspinwall v. Ohio & Miss. R. R. Co., 20 Ind. 492 , 495.

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As to the right to hold real property without the State, which involves additional objections of public policy, see Alward v. Holmes, 10 Abb. N. C. 96 , and cases cited; Thompson v. Waters, 25 Mich. 214 , 231; N. Y. Dry Dock v. Hicks, 5 McLean, 111 , 115; State v. Boston, Concord, &c. R. R. Co., 25 Vt. 433 ; Coleman v. San Rafael, &c. Turnpike Road Co., 49 Cal. 517 ; White v. Howard, 38 Conn. 342 ; United States Trust Co. v. Lee, 73 Ill. 142 ; Starkweather v. American Bible Socy., 72 Ill. 50 ; Carroll v. City of East St. Louis, 67 Ill. 568 ; Leasure v. Union Mut: Life Ins. Co., 91 Pa. St. 491 ; Farmers’ Loan, &c. Co. v. Harmony Fire, &c. Ins. Co., 51 Barb. 33 ; Cowell v. Springs Co., 100 U. S. 55 ; Zantzingers v. Gunton, 19 Wall. 32 .

As to the power to take mortgages of real property, see also, national Trust Co. v. Murphy, 30 N. J. Eq. 408 ; Smith v. Little, 67 Ind. 549 ; Woods v. People’s Nat. Bank of Pittsburg, 83 Penn. St. 57 ; Leasure v. Union Mut. Life Ins. Co., 91 Penn. St. 491 ; Northwestern Mut. Life Ins. Co. v. Overholt, 4 Dill. 287 ; U. S. Mortgage Co. v. Gross, 93 Ill. 483 ; Western Reserve Bank v. Potter, Clarke, 432; Taylor v. Bruen, 2 Barb. Ch. 301 ; United States Exp. Co. v. Lucas, 36 Ind. 361 .

Cases cited