Case Name: BEARD v. BEARD
Court: Oregon Supreme Court
Jurisdiction: Oregon
Decision Date: 1913-07-15
Citations: 66 Or. 512
Docket Number: 
Parties: BEARD v. BEARD.
Judges: Mr. Chief Justice McBride, Mr. Justice Eakin and Mr. Justice McNary concur.
Reporter: Oregon Reports
Volume: 66
Pages: 512–525

Head Matter:
Argued July 1,
decided July 15,
rehearing denied September 23, 1913.
BEARD v. BEARD.
(133 Pac. 797: 131 Pac. 1196.)
Corporations — Foreign Corporations — Internal Affairs — Jurisdiction.
1. The rule that courts decline jurisdiction of controversies relating to the management of the internal affairs of a foreign corporation is not strictly a question of jurisdiction, but of discretion in the exercise of jurisdiction, since except in eases involving the exercise of visitorial powers, the rule rests more on grounds of public policy and expediency than on jurisdictional grounds.
[Jurisdiction of foreign corporations is the subject of a note in 85 Am. St. Rep. 905.]
Corporations — Foreign Corporations — Internal Affairs — Recovery of Property.
2. Where a suit was brought by the secretary of a foreign corporation on its behalf, to require a resident of Oregon to deliver property in his possession to plaintiff as his successor in office, and all the parties interested were residents of Oregon, so that the court’s authority could be exercised on the person of the defendant, the court would take jurisdiction, and determine the controversy without remanding the plaintiff to a foreign jurisdiction, in which it was shown that service of process could not be had.
Corporations — Foreign Corporations — Regulation—Visito rial Powers— Defenses.
3. The rule which restricts interference by a court in the internal affairs of a foreign corporation is for the protection of the corporation, and is not available as a defense to a suit at the instance of the corporation, or on its behalf.
Quo Warranto — Corporations—Right to Office.
4. The remedy to determine the right to an offiee in a private corporation is by an action in the nature of giio warranto.
Mandamus — Corporate Officers — Indicia of Office.
5. An officer whose term of office has expired cannot defeat his successor’s right to mandamus .for possession of the indicia of the offiee and the property of the corporation, by raising the question of the validity of his successor’s title.
Corporations — Officers—Election—Rights of Successor.
6. Until the election of an incoming secretary of a corporation has been declared void by a court of the state of the corporation’s domicile, the election will be held valid, and the officer’s rights thereunder protected by the courts of Oregon;
Mandamus — Corporate Books and Records — Delivery to Officer Elect.
7. Mandamus is available to compel the outgoing secretary of a foreign corporation to deliver the corporation’s books, records, and personal property to the secretary-elect.
Mandamus — Other Remedy — Foreign Corporations — Books and Papers —Replevin.
8. Replevin, being a local action which lies only for the possession of goods situated within the county .in which the venue is laid, and requiring great particularity of description, did not furnish an adequate remedy by which an incoming secretary of a foreign corporation might recover from his predecessor the books, papers, and personal property belonging to the offiee, so as to prevent the obtaining of such relief by mandamus.
Mandamus — Nature of Proceeding — Action at Law.
0. A mandamus proceeding is an action at law.
Mandamus — Findings—Review.
10. Findings of a trial court in a mandamus proceeding have the force and effect of a verdict, and should not be set aside on appeal, where there is any evidence to sustain them.
Mandamus — Corporate Records — Recovery.
11. While quo warranto, and not mandamus, is the proper remedy to try the disputed title to a corporate office, one elected secretary of a corporation in a manner and by procedure conformable to its by-laws and existing laws, and who therefore had a prima facie title to the office which he was then holding, could compel a former secretary by mandamus to deliver to him the books and papers of the corporation.
Mandamus — Corporate Records — Recovery—Scope of Inquiry.
12. In a mandamus proceeding by one having a prima facie title to the office of secretary of a corporation to compel a former secretary to deliver the books and papers of the corporation, the question whether plaintiff’s election was irregular was not open to determination, since quo warranto must be employed to search the records of an election.
From Multnomah: Henry E. McGinn, Judge-
Department 2. Statement by Me. Justice Bean.
This is a mandamus proceeding commenced July 19, 1912, by S. Roseoe Beard, as secretary of the Beard Fruit Company, against A. Edgar Beard, to compel the defendant to deliver to the plaintiff, as secretary of the Beard Fruit Company, certain books, papers, and promissory notes. The writ sets forth, in substance, as follows: The Beard Fruit Company is a foreign corporation, organized under the laws of the State of Washington, and the plaintiff is and has been since July 9, 1912, the duly qualified and acting secretary of the corporation, and entitled to the books and choses in action of the company, some of which are without the State of Oregon, and all under the control of the defendant. The defendant resides in Multnomah}, County, Oregon, and cannot be served personally in j the State of Washington. For a long time prior to ¡ July 9,1912, the defendant was secretary of the Beard ! Fruit Company, and had and claimed the records and I papers as such secretary. Plaintiff demanded the1 possession of the same, but the defendant did not comply therewith.
The latter demurred to the writ for want of jurisdiction and sufficient facts. The Circuit Court overruled the demurrer. The defendant answered, denying all the allegations of the writ, except that the company is a Washington corporation, and that the defendant resides in Oregon, and was secretary prior to July 9, 1912. The first defense alleges in effect that the defendant is and has been since November 17, 1901, secretary of the corporation, and sets forth in detail facts from which the defendant claims that the election of the plaintiff as secretary was illegal. The second defense shows that the books and papers are in the possession of Gilbert Daniels, the resident trustee of the company at Yancouver, Washington. The third defense alleges in effect that there is controversy existing among the stockholders as to the ownership of the shares of stock in the corporation; that this proceeding is a plan to obtain control of the corporation illegally, in furtherance of a conspiracy; that the title of the plaintiff to the office has not been adjudicated, and that the court has no jurisdiction over the subject matter, or over the defendant; that the proceeding relates entirely to the management of the internal affairs of a foreign corporation.
Plaintiff filed a reply putting in issue the material allegations of the answer. Upon the trial the Circuit Court made findings in favor of the plaintiff. The defendant requested certain findings of facts, which were refused and exceptions duly saved. Judgment was entered making the writ peremptory and . the defendant appeals.
Affirmed : Rehearing Denied.
For appellant there was a brief over the name of Griffith, Leitér & Allen, with an oral argument by Mr. Rufus A. Leiter.
For respondent there was a brief over the name of Snow & McCamant, with an oral argument by Mr. Wal- ' lace McCamant.

Opinion:
Mr. Justice Bean
delivered the opinion of the court.
The first point urged by the defendant's counsel is raised by the demurrer and by the third separate answer, to wit, that it is not within the judicial province of a court of this state to supervise the internal affairs of a corporation of the State of Washington. The Beard Fruit Company was organized under the laws of the State of Washington by S. M. Beard, now deceased, who was the equitable owner of nearly all the assets of the corporation. In 1906 he moved from Vancouver, Washington, to Portland, Oregon. Until July 6, 1912, all the stockholders of the company resided at the latter place. At that time a share of stock was assigned to E. S. Biesecker, of Vancouver, as trustee. The by-laws of the Beard Fruit Company were amended July 13,1909, so that they required four directors. It was also necessary, under the Washington laws, that there should be a Washington stockholder, who should also be a member of the board of directors. One share of the stock was therefore assigned to each of the following: Captain Griffith, E. S. Biesecker, and W. L. Gray, who executed certificates of trust therefor to Mary B. Gray. They were chosen directors. The authorized capital stock of the company was 100 shares. At the time of the organization 50 shares of the stock were issued to Mary E. Beard, whose present name is Mary B. Gray, 40 shares to A. Edgar Beard, and 10 to S. M. Beard. The latter died January 8,1910. The ownership of the 10 shares is in litigation, the defendant claiming them as his own, and the plaintiff claiming that they belong to the estate of S. M. Beard. These shares were involved in an action for the possession thereof, in which an opinion has just been rendered by this court, to wit, in the case of Beard, as Executor, v. Beard, post, p. 526 (133 Pac. 795). The estate of S. M. Beard is being administered in the probate court of Multnomah County, Oregon. S. Boscoe Beard is the sole executor. The devisees under S. M. Beard's will are S. Boscoe Beard, Mary B. Gray, A. Edgar Beard, and Carrie Ella Cadwell, who are brothers and sisters, and were the nephews and nieces of S. M. Beard, deceased, and Susan Beard, the mother of the four devisees just mentioned, and a sister in law of the deceased. These parties, by the will, were each given a one-fifth interest in the estate for the payment of certain small legacies.
1. The doctrine that courts decline jurisdiction of controversies relating to the management of the internal affairs of a foreign corporation is not strictly a question of jurisdiction, but rather of discretion in the exercise of jurisdiction. Except in cases involving the exercise of visitorial powers, the rule rests more upon grounds of public policy and expediency than upon jurisdictional grounds, and more upon a want of power to enforce a decree than upon jurisdiction to make it.
2. Where the relief sought amounts to requiring a resident of the state, who has been an officer in the corporation, to deliver property to his successor in office, who has been duly elected, in order that the property may be cared for and protected, and where all the parties interested are residents of this state, and where the authority of the court is to be exercised upon the person of the defendant, and the action is brought in behalf of the corporation, the court should exercise the power of determining the controversy without remanding the suitor to a foreign jurisdiction in which it is shown that services of process cannot be had upon the defendant: Babcock v. Farwell, 245 Ill. 14 (91 N. E. 683, 137 Am. St. Rep. 284, 19 Ann. Cas. 74); Edwards v. Schillinger, 245 Ill. 231 (91 N. E. 1048 137 Am. St. Rep. 308, 33 L. R. A. (N. S.) 895); Ernst v. Rutherford etc., 38 App. Div. 388 (56 N. Y. Supp. 403, 405); Richardson v. Clinton Wall etc. Co., 181 Mass. 580 (64 N. E. 400); Beale, Foreign Corporations, § 300-312.
This is not an action where it is claimed that an officer of a corporation has offended solely against the majesty of the State of Washington. It appears from the pleadings and all the evidence that the action is brought to protect the rights of stockholders.and citizens of this State to the property in the corporation. No good reason appears why they are not entitled to receive full relief in our courts, in so far as such relief can be accomplished by acting directly on the person of the defendant. Should there be a question as to the enforcement of the judgment, we should be inclined to apply the suggestion made in the ease of Kalyton v. Kalyton, 45 Or. 116, 131 (74 Pac. 491, 78 Pac. 332), and declare the law irrespective of consequences that may result therefrom.
3. Courts will not exercise visitorial powers over foreign corporations or interfere with the management of their strictly internal affairs. The difficulty is in drawing the line of demarcation between matters which do and others which do not, pertain to the management of the internal affairs of the corporation: Guilford v. Western Union Tel. Co., 59 Minn. 332 (61 N. W. 324, 50 Am. St. Rep. 407). .The purpose of the rule which-restricts interference by a court in the internal affairs of a foreign corporation is the protection of the foreign corporation. The defense, therefore, is available only to the corporation; it cannot be maintained as against the corporation in a proceeding brought on its behalf and at its instance: Babcock v. Farwell, 245 Ill. 14 (91 N. E. 683, 137 Am. St. Rep. 284, 19 Ann. Cas. 74); Ernst v. Elmira Co., 24 Misc. Rep. 583 (54 N. Y. Supp. 116).
4. In the case at bar this court is not called upon to finally determine the validity of the election of the secretary of the corporation, nor to consider that question only in so far as the present necessities may require, but to find who has prima facie title to the office of secretary and entitled to the present possession of the property of the corporation, and grant relief accordingly, leaving the contest, if any there be as to the election to be determined in a proper proceeding. In this state such contest would be in an action in the nature of quo warranto.
5, 6. An officer whose term of office has expired cannot defeat his successor's right to a writ of mandamus for possession of the indicia of the office and the property of the corporation by raising a question as to the validity of the latter's title: Stevens v. Carter, 27 Or. 553, 561 (40 Pac. 1074, 31 L. R. A. 342). In this case the plaintiff instituted a proceeding in mandamus to obtain possession of the office to which she'had been prima facie elected. The question was raised under the Constitution as it then existed, as to the right of the plaintiff to hold the office. The court declined to pass upon that question, and sustained the writ. In a proceeding properly raising that question, it was determined that, under the Constitution before the amendments which have since been made, the plaintiff, being a woman, was not authorized to hold the office in question: State ex rel. v. Stevens, 29 Or. 464, 473 (44 Pac. 898). Until the election of tíre secretary of the Beard Fruit Company is declared to be void by the court of the State of Washington, we shall hold it to be valid, and protect the rights thereunder: See State ex rel. Ryan v. Cronan, 23 Nev. 437 (49 Pac. 41); Cruse v. State ex rel., 52 Neb. 831 (73 N. W. 212); State ex rel. v. Kipp, 10 S. D. 495 (74 N. W. 440); Ernst v. Rutherford etc. Co., 38 App. Div. 388 (56 N. Y. Supp. 403, 405).
7. It is contended by tbe defendant that tbe plaintiff lias a plain, speedy and adequate remedy at law by an action for possession of the personal property. High, Extraordinary Remedies, section 306, states: "And the rule is well established both upon principle and authority, that mandamus will lie to compel the surrender and delivery of corporate books and records to the officers properly' entitled thereto. And where the term of office has expired, either by removal, or by lapse of time, and the officer refuses to surrender the corporate records and documents to his successor duly elected and entitled to their custody and control, mamdamus will go to compel the delivery": See, also, Cook, Corporations, § 515.
8. It is apparent that an action of replevin would not be an adequate remedy, for the reason that only a portion of the property is situate in one jurisdiction. In order to adjust the property rights pertaining to S. M. Beard's estate, the parties have already prosecuted an action at law: Beard, as Executor, v. Beard, post, p. 526 (133 Pac. 795); and a suit in equity: Mary B. Gray and S. Roscoe Beard v. A. Edgar Beard, ante, p. 59 (133 Pac. 791), opinions in which have been lately rendered. A portion of the property involved in those cases was held by the Beard Fruit Company. Replevin is a local action, and lies only for the possession of the goods situate in the county in which venue is laid: Kirk v. Matlock, 12 Or. 319 (7 Pac. 322); Prescott v. Heilner, 13 Or. 200 (9 Pac. 403); Moorhouse v. Donaca, 14 Or. 430 (13 Pac. 112); Byers v. Ferguson, 41 Or. 77, 79 (65 Pac. 1067, 68 Pac. 5). In a replevin action it is necessary to describe the personalty with greater particularity of description than is required in a proceeding in mandamus, trover, or trespass: 34 Cyc. 1471; Foredice v. Rinehart, 11 Or. 208, 209 (8 Pac. 285); Fox v. Tift, 57 Or. 268, 271 (111 Pac. 51, Ann. Cas. 1912D, 845).
9, 10. The Circuit Court found that at a meeting of the stockholders of the Beard Fruit Company, held on the 9th day of July, 1912, Mary B. Gray, W. L. Gray, J. H. Griffiths and E. S. Biesecker were duly elected trustees of said corporation for the year beginning July 9, 1912; that at said meeting, Mary B. Gray rightfully voted 47 shares of stock of the corporation; that S. Roscoe Beard, as executor of the estate of S. M. Beard, deceased, rightfully voted 10 shares of stock of the corporation, and that W. L. Gray, J. H. Griffiths, and E. S. Biesecker rightfully voted one share each of the stock of the corporation; that after their election the trustees duly qualified by taking the trustees' oath prescribed by the State of Washington. We think there was sufficient evidence to support the finding. A proceeding in mandamus is an action at law: In re Vinton, 65 Or. 422 (132 Pac. 1165). The findings of the lower court have the force and effect of a verdict, and should not he set aside where there is evidence to sustain them: Giaconi v. Astoria, 60 Or. 12, 28 (113 Pac. 855, 118 Pac. 180); Aerne v. Gostlow, 60 Or. 113, 119 (118 Pac. 277); Van De Wiele v. Garbade, 60 Or. 585 (120 Pac. 752).
Finding no error, the judgment of the lower court will be affirmed. Affirmed.
Mr. Chief Justice McBride, Mr. Justice Eakin and Mr. Justice McNary concur.