Court Opinion

ID: 7901698
Source: CourtListenerOpinion
Date Created: 2022-09-08 21:56:21.090259+00
Date Added: 2024-06-11T16:32:16.920453
License: Public Domain

Johnston, C. J.
(dissenting) : In my.view the situs of the shares of stock owned by Miller was in Labette county, Kansas, the home and principal place of business of the corporation. While the authorities on the subject are not in harmony it is generally recognized that certificates of stock are not debts, credits, securities or chattels, but are simply evidences that the holder is a member of and has an interest in a corporation which itself owns all of its property. In a sense shares of stock are treated as property, but it is of a peculiar kind which gives the owner no right or title to the tangible property of the corporation. It is such an exceptional property right that it can only be enforced where the corporation is organized and has its place of business, and within the intention of the legislature the situs of the property for administration purposes is at the home of the corporation. In Thompson on Corporations it is said:
“The general rule is that shares'of stock in a corporation are personal property, whose location is in the state where the corporation is created. It is true that for purposes of taxation and some other similar purposes stock follows the domicil of its owner; but *826considered as property separated from its owner, stock is in existence only in the state of the corporation. On this point the supreme court of the United States has said: ‘The certificates are only evidence of the ownership of the shares, and the interest represented by the shares is held by the company for the benefit of the true owner. As the habitation or domicil of the company is and must be in the state that created it, the property represented by its certificates of stock may be deemed to be held by the company within the state whose creature it is, whenever it is sought by suit to determine who is its real owner.’ ” (4 Thompson on Corporations, 2d ed., § 3471.)
Counsel for appellee quote from and rely upon Cook on Corporations, but while that authority says that for purposes of taxation and a few other purposes shares of stock follow the domicile of the stockholder, this is upon the theory that such property may have a situs at more than one place at the same time, and it then adds:
“On the other hand, it has at the same time a situs where the corporation exists, and this situs may be for the purposes of suits concerning the title to the stock, for attachment and execution, and for various other similar purposes.” (2 Cook on Corporations, 7th ed., § 363.)
In Grayson, Admr., v. Robertson, Admx., 122 Ala. 330, 25 South. 229, 82 Am. St. Rep. 80, this question was directly involved, and it was expressly decided not on a local statute that for purposes of administration the situs of shares of stock of a corporation was in the state where the corporation was created and not at the domicile of the owner. In a still later case the supreme court of Alabama reaffirmed this holding and declared that:
“A certificate of corporate stock is merely evidence of ownership, and the situs of the interest which it represents must for the purposes of administration be in the state in which the corporation is organized and has its place of business.” (Warrior Coal & Coke Co. v. National Bank of Augusta, [Ala. 1910] 53 South. 997, headnote ¶ 3.)
*827In Richardson v. Busch, 198 Mo. 174, 95 S. W. 894, 115 Am. St. Rep. 472, the subject was discussed at considerable length and cogent reasons are given why the situs of such property is necessarily in the state of the corporation. In Murphy v. Crouse, 135 Cal. 14, 66 Pac. 971, 87 Am. St. Rep. 90, it was held that ordinarily choses in action adhere to the.person of the owner, but that for purposes of administration this is not true as to certificates of stock. In a question affecting the title to shares of stock the supreme court of the United States decided that the habitation or domicile of the corporation is in the state that creates it, and that the property represented by the certificates of stock is deemed to be within the state and to be held by the corporation for the benefit of the owner. (Jellenik v. Huron Copper Mining Co., 177 U. S. 1, 20 Sup. Ct. Rep. 559, 44 L. ed. 647.) In Andrews v. Guayaquil and Quito Railway Co., 69 N. J. Eq. 211, 60 Atl. 568, it was ruled that the situs of stock in a New Jersey corporation was in New Jersey and that any question relating to it might be determined there. In Fahrig v. Milwaukee & Chicago Breweries, 113 Ill. App. 525, it was declared that:
“The general rule is that shares of stock in a corporation are personal property whose location is in the state where the corporation is created.” (Syl. ¶ 3; Matter of Arnold, 114 N. Y. Supr. Ct., App. Div., 244, 99 N. Y. Supp. 740; Matter of Fitch, 160 N. Y. 87, 54 N. E. 701; Note, Ann. Cas. 1912 D, 954.)
In The State, ex rel., v. Davis, 88 Kan. 849, 129 Pac. 1197, where the inheritance-tax law was under consideration, it was said that: “Shares of stock are regarded as situated in the state of incorporation.” (p. 850.) Being property situated in the state it should not be withdrawn from the state until the claims of resident creditors are satisfied. As said in Denny v. Faulkner, 22 Kan. 89: “A state always has the right to protect *828home creditors by administration of the decedent’s property within its borders.” (p. 95.)
Our statute provides that if a person of another state dies intestate, leaving property in Kansas to be administered, the probate court of the county where the property is situated may grant administration. (Gen. Stat. 1909, § 3436.) In my view the legislature intended that property such as shares of stock situated in Kansas should be administered in Kansas, and that it was never the legislative intention that property of a decedent should be removed from the state until the debts due to its own citizens had been paid. The officers of the corporation are really the agents and representatives of the owners of the shares wherever they may be, and their claims must be presented in Kansas in order to obtain either the profits in the enterprise or a share of the assets in case of final dissolution and distribution. The property being situated in Kansas, the administrator appointed in Missouri did not acquire any title to the shares and has no authority to dispose of them.
I am authorized to state that Mr. Justice Mason and Mr. Justice Smith concur in this dissent.