Court Opinion

ID: 6474208
Source: CourtListenerOpinion
Date Created: 2022-06-26 22:33:33.888678+00
Date Added: 2024-06-11T15:53:54.914429
License: Public Domain

FRANKLIN, J.
The defendant in this action is a resident of the state of Ohio. He was served by registered mail, and also had actual notice by being served personally in that state with a copy of the summons and complaint herein. The defendant appeared specially under the statute for the purpose of objecting to the jurisdiction. The ground of objection being that in this kind of action the court could acquire no jurisdiction of the person of defendant by this mode of service, such service not being due process of law, within the meaning of the Constitution of Arizona and the Constitution of the United States. The court sustained the objection, and the appeal is prosecuted from the order.
*543Criticism is made of the allegations of the complaint, which, is in two counts, and the prayer for relief. But for the purpose of determining the question of jurisdiction presented, we will consider the complaint as presenting what we believe it was intended to present; that is, the ownership of certain shares of stock in a corporation organized and existing under the laws of Arizona, the corporation having its principal place for the transaction of business at Bisbee, Arizona, and certificates representing said stock being held by the defendant. The court should, we think, look to the substance rather than' to the form of actions, or to the manner in which plaintiff may have characterized it, and not, as under the common-law procedure, pay strict regard to the technical distinction between different forms of action. 1 Corpus Juris, Actions sec. 133. It is clear that in substance the object of the complaint seeks to establish the ownership of the plaintiff in the stock described. It is premature to consider now the sufficiency of the complaint to state a cause of action, or the difficulties which may beset the plaintiff in the progress of the cause, should she be successful in the present action.
There is but one question, then, to be determined: Is the court enabled to obtain jurisdiction in this action to decide the ownership of the stock by constructive service of process upon the nonresident defendant ? The mere fact that a party-asks a greater measure of relief than can be given without personal service does not deprive the court of jurisdiction to-grant such relief as is proper under constructive notice. Very often, especially in equity suits, parties ask for more relief than they are entitled to, but it would be a peculiar doctrine to hold that the mere asking for too much relief would be an obstacle to rendering a decree to which the plaintiff is entitled. It is only necessary to determine whether, upon such service, the court can grant any relief at all. Smith v. Smith, 123 Minn. 431, 52 L. R. A. (N. S.) 1061, 144 N. W. 138; Reeves v. Pierce, 64 Kan. 502, 67 Pac. 1108; Porter Land etc. v. Baskin (C. C.), 43 Fed. 323.
The laws of Arizona provide for constructive service of process. Paragraphs 447 to 451 of the Revised Statutes of Arizona 1913 provide, without any qualification whatever, that, when- any party to a suit shall make affidavit that the defendant is a nonresident of the state, service of the sum*544mons, if the residence of the defendant be known to affiant, may be made by publication in a newspaper, and depositing in the postoffiee a copy of the summons and complaint, addressed to such defendant at his residence. The personal service of a copy of the summons and complaint upon such defendant out of the state shall be equivalent to such publication and deposit in the postoffice. It also provides for such service by registered mail. Either of the methods pursued will be effective as constructive notice.
While the statute quoted is general and may in terms apply to all actions, it is not invalid when applied to a suit partaking of the nature of an action in rem. Arndt v. Griggs, 134 U. S. 316, 33 L. Ed. 918, 10 Sup. Ct. Rep. 557; Roller v. Holly, 176 U. S. 398, 44 L. Ed. 520, 20 Sup. Ct. Rep. 410; Perkins v. Wakeman, 86 Cal. 580, 21 Am. St. Rep. 67, 25 Pac. 51; Silver Camp M. Co. v. Dickert, 31 Mont. 488, 3 Ann. Cas. 1000, 67 L. R. A. 940, 78 Pac. 967.
Of course, upon constructive service of summons, no judgment against defendant personally may be given; that is, to determine merely the personal rights and obligations of the defendant. Nor can the court require the defendant to do some specific act, such as was the effect of the judgment in Hart v. Sansom, 110 U. S. 151, 28 L. Ed. 101, 3 Sup. Ct. Rep. 586. In that case the judgment against a nonresident was based on service only by publication in a newspaper. Such judgment rendered on service by publication against the nonresident defendant was held to be beyond the jurisdiction, since it was in the ordinary form of a decree for the removal by the nonresident defendant of a cloud upon the plaintiff’s title. Where the suit is brought against a nonresident by constructive service, it must partake of the nature of an action in rem, or jurisdiction will not be acquired to render a valid judgment: In fine, if the suit is merely in personam, constructive service upon a nonresident is ineffectual. Pennoyer v. Neff, 95 U. S. 714, 24 L. Ed. 565.
Regarding the plaintiff’s suit in this aspect—that it is one brought for the purpose of establishing her interest in certain shares of stock in an Arizona corporation—we shall first get some general idea of the nature and characteristics of this peculiar species of property. We shall then ascertain, if possible, whether or not the analogies of decided eases and the *545principle of law actuating the decision may serve as our guide in determining the plaintiff’s right to maintain this action to judgment upon the mode of service adopted. In short, we shall strive to obtain by the process of abstraction and induction some conception of the ratio decidendi or principle to be extracted from the judicial decisions bearing upon this interesting problem.
The distinction between shares of stock and a certificate for the stock, which is its muniment of title or mere evidence and symbol of it, must be preserved, as also the nature of this proceeding, else somewhat of the matter may be obscure. “A certificate of stock,” Mr. Cook says, “is from one point of view a mere muniment of title, like a title deed. It is not the stock itself, but evidence of the ownership of the stock; that is to say, it is a written acknowledgment by the corporation of the interest of the stockholder in the corporate property and franchises. It operates to transfer nothing from the corporation to the stockholder, but merely affords to the latter evidence of his rights. It should be clearly understood that the certificate is not the stock, but merely written evidence of the ownership of stock. ... ”1 Cook, Corporations, 8th ed., sec. 13. “Stock is one thing and certificates another. The former is the substance, and the latter is the evidence of it.” Hawley v. Brumagin, 33 Cal. 394. See, also, 2 Clark & Marshall, Private Corporations, pp. 1160, 1161; Morawetz on Private Corporations, secs. 173, 226; Machen, Modern Law of Corporations, sec. 867; Jellenik v. Huron Copper Min. Co., 177 U. S. 1, 44 L. Ed. 647, 20 Sup. Ct. Rep. 559.
Certificates for stock are, of course, tangible property, and, owing to the facility with which the shares may be transferred by indorsement upon the certificate, they have become the basis of commercial transactions in all the large cities of the country. While not negotiable instruments, they are considered as having many, if not all, the elements of negotiability, or, as so often expressed, a quasi negotiability. “It may be said in general that, by the operation of the law of estoppel, the purchaser of a certificate of stock, in good faith and for value, may take it free from many claims of previous holders which would be allowed to come in, in the case of the sale of an ordinary chose in action.” 1 Cook, Corporations, see. 13. Inter partes, a transfer, however disconnected from the *546certificate, would have the same effect as if indorsed upon it. Indeed, in England the transfer of shares is usually separate and distinct from the share certificate. But the practice in America, having origin in convenience merely, of transferring shares by indorsement upon the share certificate, has* emphasized the importance of the share certificate, and naturally produces' the impression among business men that the certificate is the shares instead of being merely convenient evidence of ownership of shares.
Now, what is this kind of property called shares of stock? It is property of a peculiar kind. It is an incorporeal and intangible thing. It is in the nature of that kind of property technically known as choses in action. Clark & Marshall, Private Corporations, sec. 376; Machen, Modern Law of Corporations, see. 504. And, in general, a share of the capital stock of a corporation may be defined as the interest or right which the owner, who is called a “shareholder” or “stockholder,” has in the management of the corporation, and in its surplus profits, and, on a dissolution, in all of its assets remaining after the payment of its debts. Clark & Marshall, Private Corporations, sec. 376. In Plimpton v. Bigelow, 93 N. Y. 592, in answering the question, “What are shares of stock, and what right does the owner thereof enjoy?” it is said:
“The right which a shareholder in a corporation has by reason of his ownership of shares is a right to participate according to the amount of his stock in the surplus profits of a corporation on a division, and ultimately on its dissolution, in the assets remaining after payment of the debts.”
Chief Justice SHAW answered it when he said that:
“The right is, strictly speaking, a right to participate, in a certain proportion, in the immunities and benefits of the corporation ; to vote in the choice of their officers, and the management of their concerns; to share in the dividends or profits; and to receive an aliquot part of the proceeds of the capital, on winding up and terminating the active existence and operations of the corporation.” Fisher v. Essex Bank, 5 Gray (Mass.), 373, 378.
In what we have to say, we do not aspire to mark precisely all distinctions that may exist in these kinds of property denominated certificate for stock and shares of stock, nor is it *547necessary, in preserving the distinction, so far as essential to the case in hand, to ignore the fact that, in the transaction of modern business, a purchaser of a certificate for stock for value and in good faith in the ordinary course of business must be accorded such protection as may be consistent with a character of property that passes from hand to hand by assignment. But here it is only necessary to emphasize that such transactions do not preclude the courts of this state in a proper case from entertaining an action which has for its subject matter the ownership of specific shares of stock in a corporation created and domiciled here. To this extent transactions in stock certificates must be subordinated to the laws of this jurisdiction. Nor should the principle of law be obscured that shares of stock are property of such a peculiar nature that such shares may, for certain purposes, have a situs at two separate places at the same time. The decisive question here, however, is to ascertain whether an action which has for its subject matter ownership of stock should be brought in the home of the holder of the certificate for the shares, or may such action be brought where the shares are located, and jurisdiction obtained by constructive service.
All property must have its situs; that is, its situation or location. Real estate has always a fixed situs, while personal estate has no such fixed situs. The law rei sitae regulates real, but not the personal, estate. Story, Conflict of Laws, sec. 379.
Real property has such a fixed situs because it is immovable and indestructible. It must always be and always will remain in the same locatio'n. Tangible chattels, however, are movable and also destructible, and therefore their situs is of the place where they may happen to be at. any particular time. They may be at one place to-day and another place tomorrow, or else have been totally destroyed. But ordinary choses in action separated from the ownership thereof have no local situs, and so this kind of property is usually said to be governed by the law of the place of the owner’s domicile. This is not because they have any local situs in themselves, but because they follow the person of their owner, and that place is commonly the only place where courts have jurisdiction over him.
*548The rule applicable to the situs of shares of stock was applied by the supreme court of the United States, in the case of Jellenik v. Huron Copper Min. Co., reported in 177 U. S. 1, 44 L. Ed. 647, 20 Sup. Ct. Rep. 559. In that case, speaking of the shares in a Michigan corporation, it was 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 domicile 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.”
The text of Mr. Cook is in accord with the Jellenik case, He says:
“Legal proceedings against the stock may be initiated at the domicile of the corporation. A claimant of stock in a corporation may institute suit at the place where the company is incorporated for the purpose of obtaining possession of the stock, even though the holders of the stock are nonresidents and are brought into the case only by publication and substituted service. The court acquires jurisdiction over the defendants.” 1 Cook on Corporations, sec. 12.
Again the author says:
“It is a well-established principle of law that shares of stock may, for certain purposes, have a situs at two separate places at the same time. For the purpose of suits concerning rights to its title, for taxation, and for a few other purposes, shares of stock follow the domicile of the stockholder. 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 title to the stock, for attachment and execution, and for various other similar purposes.”
The language of Mr. Cook just quoted may be reconciled by keeping in view the distinction between the certificate for the shares and the shares themselves. The certificate for the stock, being tangible and movable property, is presumed to accompany the holder of the legal title thereto, and such certificate may so far represent the shares themselves as to give the latter the situs of the certificate for certain purposes.
*549■ Speaking of the jurisdiction over a certificate as jurisdiction over the stock, Clark & Marshall have this to say:
“A court can exercise jurisdiction over a certificate of stock—that is, over the certificate itself, as distinguished from the stock it represents—if the certificate is within its jurisdiction. For example, there can he no doubt that replevin will lie to recover possession of a certificate of stock, if the certificate is within thé jurisdiction of the court, although the corporation may be in another state, so that the situs of the shares of stock is in the other state. In the nature of things, however, since a certificate of stock is not the stock itself, but mere evidence of the stockholder’s interest in the corporation—a distinction which is thoroughly well settled—jurisdiction over a certificate of stock can confer no jurisdiction over the stock itself, where the stock is not within the jurisdiction of the court. The situs of shares of stock is at the residence of the corporation, and does not follow the certificate. As we have seen, the situs of shares of stock for the purpose of execution or attachment is in the state where the corporation resides, and not in the state where the stockholder resides, or where the certificate may be found, and, in the absence of peculiar circumstances, they cannot be taken in execution or attachment in any other state. Shares of stock cannot be taken on execution or attachment by levying upon or seizing the certificate only, and a court can acquire no jurisdiction over stock by virtue of an attachment merely because the certificate of stock is within its jurisdiction.” Clark & Marshall, Private Corporations, see. 378h.
It is apparent from a careful analysis of the Jellenik case, supra,, that the supreme court of the United States has announced the doctrine that, in a suit to determine who is the real owner of stock in a corporation, the stock may be deemed to be immovably fixed in the domicile of the corporation, and that, notwithstanding the nonresidence of a defendant, who has the evidence of such ownership, to wit, the certificate for the stock, that jurisdiction to determine who is the real owner thereof may be obtained by constructive service. The Jellenik decision, in the feature pertaining to constructive service, was based upon the act of March 3, 1875 (chapter 137, section 8, 18 Stat. 472 [U. S. Comp. Stats. 1901, p. 513]), authorizing a United States court to obtain jurisdiction of defendants by *550publication of notice or service of process outside of its territory in an action “to enforce any legal or equitable lien upon, or claim to, or to remove any encumbrance or lien or cloud upon the title to real or personal property within the district where such suit is brought.” This statute is similar in its essentials and grounded upon a sense of the same public policy as those of the several states authorizing substituted service. The statute and decision applying it being in accord with the public policy found in the enactments of most, if not all, of the states, which requires the status of its inhabitants and their rights of property localized within their respective territorial dominions to be settled by the tribunals of such locality, and that the inhabitants of a state or district of the United States may not be compelled to go elsewhere to litigate such questions with persons not subject to such local jurisdiction.
In the Jellenik case, suit was brought in a United States court for a district in Michigan by certain stockholders in a Michigan corporation against the corporation and certain nonresident defendants. It was charged that, by reason of certain fraudulent transactions set forth in the bill in equity, the nonresident defendants had acquired the legal title to certain shares of the capital stock of the company owned by the complainants, who prayed to be reinstated as full owners of the legal and equitable title to the shares. Service on the nonresident defendants was had by publication, but they did not appear, and the district court dismissed the bill, saying it was powerless to afford any effective aid to the complainants. The supreme court set aside the order dismissing the action and remanded the case, with directions to the lower court to proceed, holding that the complainants were entitled to the relief asked on the ground that the stock must be regarded as legally situate in Michigan, and therefore within the jurisdiction of the court, although the defendants, the legal owners of it, were residents of other states and had not appeared. Jellenik v. Huron Copper Min. Co., 177 U. S. 1, 44 L. Ed. 647, 20 Sup. Ct. Rep. 559. See, also, Smith v. Smith, 123 Minn. 431, 52 L. R. A. (N. S.) 1061, 144 N. W. 138; Jones v. Gould, 149 Fed. 153, 80 C. C. A. 1; McKane v. Burke (C. C.), 132 Fed. 688; Gamble v. Dawson, 67 Wash. 72, Ann. Cas. 1913D, 501, 120 Pac. 1060; People’s National Bank *551v. Cleveland, 117 Ga. 908, 44 S. E. 20; Patterson v. Farmington St. Ry. Co., 76 Conn. 628, 57 Atl. 853; Fahrig v. Milwaukee etc. Breweries, 113 Ill. App. 525; Fowler v. Jenks, 90 Minn. 74, 95 N. W. 887, 96 N. W. 914; Andrews v. Guayaquil etc. R. Co., 69 N. J. Eq 211, 60 Atl. 568; Sohege v. Singer Mfg. Co., 73 N. J. Eq. 567, 68 Atl. 64.
In the instant ease we have an action calling upon the courts of this state to determine who is the real owner of certain shares of the capital stock of a corporation organized under and having its domicile in this jurisdiction, and the capital stock of which is property existing only by virtue of the laws of this state, and notwithstanding a certificate for the stock is treated for some purposes as property of a quasi-negotiable character, the stock itself, by the very law that created it, can only be transferred on the books of the company in this state. We feel convinced that such an action is so far an action in the nature of a proceeding in rem that it authorizes the courts of this state, so far as such property is affected only, to bind all persons with respect to their interest in such property upon giving them reasonable notice in the manner prescribed by law. The res being within the-jurisdiction of the court, and immovably situate in such jurisdiction, the substituted service will give such jurisdiction over the person of the nonresident defendant as to bind him in the determination, of the ownership of the res, provided that the property be either seized into the possession of the court or brought within its grasp by suitable allegations in the complaint. Especially is this so where by statute expressly or impliedly the decree of the court may operate as a conveyance of the property. Paragraph 552 of the Givil Code of Arizona provides:
“When the judgment is for the conveyance of real estate, or for the delivery of personal property, the decree may pass the title to such property without any act to be done on the part of the party against whom the judgment is rendered. ’ ’
The following authorities may also be consulted: Loaiza v. San Francisco, 85 Cal. 11, 20 Am. St. Rep. 197, 9 L. R. A. 376, 24 Pac. 707 ; 26 Am. & Eng. Ency. of Law, 2d ed., p. 132; Epperly v. Ferguson, 118 Iowa, 47, 91 N. W. 816; Wait v. Kern River M. M. & D. Co., 157 Cal. 21, 106 Pac. 98,
*552Where the property is movable and destructible, there may be good reason for seizing it into the possession of the court, so that the final judgment may have something to operate upon; but where the res is immovable property within thé jurisdiction of the court, and is brought within its grasp by being made the subject matter of the action, and the object of the action is to reach and dispose of such property or some interest therein, the nonresident defendant having actual notice thereof by being served out of the state personally with a copy of the summons and complaint, it would appear that the necessity for a seizure of the res is wanting. The views we have expressed are fully consistent with the principle recognized in Pennoyer v. Neff, 95 U. S. 714, 24 L. Ed. 565. That jurisdiction to hear and determine in this class of cases may be obtained wholly and entirely by substituted service, see Arndt v. Griggs, 134 U. S. 316, 323, 33 L. Ed. 918, 10 Sup. Ct. Rep. 557; Corson v. Shoemaker, 55 Minn. 386, 398, 57 N. W. 134; Shepherd v. Ware, 46 Minn. 176, 24 Am. St. Rep. 212, 48 N. W. 774; Bennett v. Fenton, 41 Fed, 286, 10 L. R. A. 500; Perkins v. Wakeham, 86 Cal. 580, 21 Am. St. Rep. 67, 25 Pac. 51; Lane v. Innes, 43 Minn. 141, 45 N. W. 5 ; Robinson v. Kind, 23 Nev. 330, 340, 47 Pac. 1, 977; Ormsby v. Ottman, 85 Fed. 496, 29 C. C. A. 295; Porter Land & Water Co. v. Baskin, 43 Fed. 328; Gallum v. Weil, 116 Wis. 236, 92 N. W. 1091; Gassert v. Strong, 38 Mont. 18, 98 Pac. 497; Brown Iron Works v. George B. Swift Co., 53 Ind. App. 630, 100 N. E. 584, 860; also extended note to Hollander v. Central M. & S. Co. (109 Md. 131, 71 Atl. 442), annotated in 23 L. R. A. (N. S.) 1135.
■ The Pennoyer case was a mere personal action, in which a purely personal judgment for the recovery of a money demand was sought and given, and upon notice given merely by publication and without a seizure of specific property; the lack of reasonable notice by such a method being strongly emphasized. The eminent American jurist who wrote that decision spoke for the court in Galpin v. Page, 3 Saw. 93, Fed. Cas. No. 5206, which is cited in the Pennoyer case. In the Galpin case Judge FIELD, after alluding to the authority of courts being necessarily circumscribed by the limits of the sovereignty creating them, said: ‘
*553“But over property and persons within those limits the authority of the state is supreme, except as restrained by the federal Constitution. When, therefore, property thus situated is held by parties resident without the state, or absent from it, and thus beyond the reach of the process of its courts, the admitted jurisdiction of the state over the property would be defeated, if a substituted service upon the parties were not permitted. Accordingly, under special circumstances,upon the presentation of particular proofs, substituted service, in lieu of personal service, is allowed by statute in nearly all the states, so as to subject the property of a nonresident or absent party to such disposition by their tribunals as may be necessary to protect the rights of their own citizens. . . . But so far as the statute authorizes, upon such substituted service, a personal judgment against a nonresident, except as a means of reaching property situated at the time within the state, or affecting some interest therein, or determining the status of the plaintiff with respect to such nonresident, it cannot be sustained as a legitimate exercise of legislative power. ’ ’
Judge FIELD, in the progress of the opinion, puts suits in rem into four classes, thus:
“First, those which are directed primarily against particular property, and are intended to dispose of it without reference to the title of individual claimants; second, those which are instituted to determine the status of particular property or persons; third, those which are, in form, personal suits, but which seek to subject property brought by existing lien or by attachment, or some collateral proceeding, under the control of the court, so as to give effect to the rights of the parties; and, fourth, those which seek to dispose of property, or relate to some interest therein, but which touch the property or interest only through the judgment recovered.”
After giving an illustration of each class, but not pretending to comprehend all, the court proceeds:
“The third and fourth classes mentioned are not strictly proceedings in rem; but, so far as they affect property in the state, they are treated as substantially such proceedings.”-
*554Actions in rem apply not only to realty, but to personal property. In Woodruff v. Taylor, 20 Vt. 65, 73, the court said:
“But proceedings in rem may be and often are upon personal chattels, directly declaring the right to them. ’ ’
Primarily rights in rem are those which avail against persons generally”and rights in personam are those which avail exclusively against certain or determinate persons, and the duties which correlate with rights in rem were negative (that is to say, the duty to forbear or abstain), and the obligations which correlate with rights in personam some were negative, but some, and most, were positive (that is to~say, obligations to do or perform). This distinction pervades the writings of the Roman lawyers, and these terms were devised to comprehend a division of civil actions according to the nature of the duties to be enforced. Ownership or property is given as an instance of a right in rem, as a species of jus in rem, and in an action to vindicate this “jus in rem” we catch historically a marked distinction observed in kinds or sorts of property, as .it has the attribute of movability or immovability. The distinction between real, or immovable and indestructible property, and personal, or movable and destructible property, which runs all through our law, is thus, in a measure, an accidental development in the evolution of actions. The Roman law had its actions which partook of the nature of both an action in rem and an action in personam, or, in other words, actions to vindicate the kinds of rights comprehended in a blending of the expressions “jus in personam” and “jus ad rem.” Mr. Austin says:
“All rights in personam are rights to acts and forbearances and nothing more. The species of rights which have been termed jus ad rem form no exception. What has been styled jus ad rem is an elliptical expression, and is more properly rendered jus ad rem acquirendum, or, still more completely, jus in personam ad jus in rem acquirendum. That is to say, the person entitled has á right, availing against a determinate person, to the acquisition of a right availing against the world at large, and, by consequence, his- right is a right to an act of conveyance or transfer on the part of the person obliged.” Austin’s Jurisprudence, sec. 528.
*555So, too, the English lawyers were compelled to make a division of actions and to classify their actions which partook of the nature of both real actions and personal actions. Accordingly, as in Blackstone, actions were classified ás real, personal and mixed, because the two classes of actions, real and personal, were not comprehensive or satisfactory, so this triple division of civil actions was introduced, and a class called mixed actions added. “ ‘Mixed’ is a blessed word,” say the historians of our early law. “The impatient student who looks down on medieval law from the sublime heights of ‘general jurisprudence’ will say that most of our English actions are mixed and many of them very mixed.” 2 Poll. & Mait. Hist. Eng. Law, 2d ed., 572. For an interesting discussion of the distinction between in rem and in personam, see 1 Austin, Jurisprudence (Campbell’s ed.), 408 et seq., in which the jus in rem is contradistinguished to jus in .personam, and in which the somewhat obscure and ambiguous expression “jus in rem,” when standing by itself, catches a borrowed clearness from the expression “jus in personam,” to which it is opposed.
Another learned author says:
“Turning to the actions in rem, Bracton brings with him from his excursion into Roman law only the expression itself, ‘actio in rem/ and one or two ideas which lie plainly on the surface. Thus he perceives that the action is not based upon obligation in the Roman sense, and that the plaintiff demands a certain thing, not the value or equivalent of it. But Brae-ton goes further than this, and in a bold, though apparently casual, utterance restricts the action in rem in English law to the recovery of immovables (real property) and interests incident thereto, such as the right of advowson and right of common. This departure of Bracton from Roman ideas was perhaps due to a mere caprice of independence rather than to any necessary distinction between the Roman and English law of actions. This whim of Bracton, if it were a mere whim, has had far-reaching effects, and the marks of it are found to-day in that distinction between real and personal property which is peculiar to English law. What reason does he give for the proposition that, in English law, an action for the recovery of a specific chattel cannot be an action in rem? ‘If,’ says he, ‘the thing sought to be recovered is a *556movable, such as a lion, ox, ass, garment, or other thing determinable by weight or measure, it would seem at first sight that the action would be in rem rather than in personam, because a specific thing is sought, and because the possessor is in duty bound to restore the thing sued for. But, on the contrary, the action will be in personam only because he from whom the recovery is sought is not held exactly to the restoration of the thing, but, in the alternative, either'to the return of the thing or its value; and, by paying the value only, he will be discharged whether the thing is produced or not.’ Bracton here clearly missed the true principle of classification, for, instead of determining the nature of the action by the duty which it is brought to enforce, he finds the criterion in the nature of the redress which was to be or might be obtained. It would seem that the proposition to which he was here committing English law was a principle erroneously deduced from the fact that, in writs of debt in the detinet, the plaintiff was required to state the value of the chattel sued for. To state the value was certainly highly proper, and indeed necessary, for it might transpire that the chattel was lost or destroyed, or animal dead, in which case it could not 'be restored. Movables are necessarily destructible, but this furnishes no reason why the action for their recovery should not be classed as an action in rem. In Roman law the circumstance that the plaintiff might be. compelled, as a last resort, to accept a money compensation instead of the chattel sued for did not result in changing the action from one category to another. It still remained an action in rem because of the nature of the fundamental duty. If the defendant failed to restore the thing, he was condemned to pay its value as damages. If Bracton had been content faithfully to copy from the Roman sources, he could have said with perfect consistency that detinue is an action in rem, and that it based directly on ownership. Instead of this, our law of ownership in chattels blunders around for two or three centuries, and the right clue to the subject has hardly yet been discovered. Prom the viewpoint which classifies according to the nature of the duties to be enforced, a triple division of actions is the only proper one—actions based on ownership, actions ex contractu, and actions ex delicto. The actions based on ownership might be called proprietary actions, or, to use a *557Roman term, recuperatory actions. There is no reason in nature or law why the proprietary actions should be restricted to actions for the recovery of immovable property, but such was the result of Bracton’s theory. The English law consequently acknowledged no purely proprietary writ for chattels; and detinue, which ought by all means to have been placed in this .lost category, has since wandered around among the common-law actions, unable to find its proper place in the procedural system. Bracton and those who came after him would have it that the only actions in rem were those brought to vindicate a right to immovables. The action in rem, being thus permanently associated with real property, came to be spoken of as a real action.” 3 Street, Foundations of Legal Liability, p. 39.
While, properly speaking, actions or proceedings in rem are against the thing itself, and for the purpose of disposing thereof without reference to the title of particular claimants, the term has in a larger and broader sense been applied to certain actions and proceedings between parties, where the object is to reach and dispose of property owned by them or in which they have an interest; but, as these are not strictly in rem, they have frequently and more properly been termed quasi in rem, or in the nature of actions or proceedings in rem. 1 Corpus Juris., see. 171, In Rem and In Personam. See, also, 1 Cyc. 730, 731.
The appellee reviewing the cases, and after abstracting therefrom the peculiarities of the particular case before the court, proceeds to tear them into very tatters. It is urged that such cafes are not in point, because the subject matter of the action was either real estate, immovably situate within the state, or, if personal property, it was seized into the possession of the court, or, where the subject matter of the action was shares of stock the corporation itself was brought before the court, or the stock has in some manner been directly attached, impounded or sequestered to await the court’s final decision. The appellee admits that the cardinal distinction between real property and personal property rests in the immovability of the former and the movability of the latter, and says that personal property, under the old fiction, is deemed to follow the owner, and it would be strange, indeed, if any class of personal property could be held to be immov*558able; that the term “immovable personal property” is a solecism. If this peculiar species of property may be likened to real estate, the application of many of the cases cited is not resisted,> and that, if the corporation had been made a party, the Jellenik case would be in point, does not seem to be controverted. But we have learned that the cardinal distinction between real and personal property is the immovability and indestructibility of the former and the movability and destructibility of the latter, and that, for the purpose of determining the true ownership of stock, it is considered immovably situate in the domicile of the corporation which created it and in the state under and by virtue of whose laws it has its being.
In Ashley v. Quintard (C. C.), 90 Fed. 84, this resemblance was pointed out. The court says:
“Indeed, in my view, shares of stock more clearly resemble land than movables in the quality of being fixed within the boundaries of the state which created them, and regulates all their qualities and incidents, as property. It is a question of resemblances and analogies, and is capable of no other treatment. ’ ’
It is no more of a solecism to say immovable personal property than it is to say removable fixtures, nor more contradicting than in the division of actions to use the term “in rem,” when, under the particular state of facts, the action is primarily “in personam.” In the development of the law it is seldom possible, or, when possible, seldom expedient, to discard established terms. In this connection an observation by Mr. Justice HOLMES is peculiarly applicable:
“As long as the matter to be considered is debated in artificial terms, there is danger of being led by a technical definition to apply a certain name, and then to deduce consequences which have no relation to the grounds on which the name was applied. ’ ’ Guy v. Donald, 203 U. S. 406, 51 L. Ed. 245, 27 Sup. Ct. Rep. 63.
Instead of rejecting convenient terms because they are ambiguous or not comprehensive, it is better to explain their meanings, or, in the language of old Hobbes, “to snuff them with distinctions and definitions, ” so as to give a better light. When we snuff out the cardinal distinction—immovability—■ between real property, and a certain kind of personal prop*559erty, we liave a better and truer light thrown upon the term “immovable personal property.” In the development of the law of fixtures, the wisdom of such a course is indicated, and our meaning may gather a borrowed clearness from its. consideration.
“No definition has been formulated which meets the general approval of the courts, and some of our ablest writers treat the rules without attempting a definition. The great dispute in terms is that on one side a removable fixture is said to be a solecism, while, on the other, its better meaning is said to be things accessory or affixed but removable. Trade fixtures, agricultural fixtures, gas fixtures, ornamental fixtures, are terms of common, popular and commercial use to indicate things which may be removed; and there is no settled consistent practice in the courts confining the term to things not removable. Practically it matters little whether the name ‘fixture’ is applied to something removable, or we affirm that things removable are not fixtures, the question always being the same, viz., under what circumstances of relation of parties, purpose or interest of annexation and condition of annexation is the thing removable?” Andrews, American Law, see. 597, “Fixtures.” So what matters it whether we use the term “real estate” or “personal property,” so far as concerns the matter before us. It is the situs of the thing and its quality of immovability that determines the jurisdiction to proceed.
After all, “the reason and spirit of eases make law, not the letter of particular precedents.” So said Lord MANSFIELD, a great English judge, in Fisher v. Prince (1763), 3 Burr. 1363, at page 1364. And so did another great judge (Chief Justice KENYON) in the case of Lord Walpole v. Earl of Cholomondeley, 7 Term Rep., at page 148, make a like observation:
“The principle is the thing which we are to extract from cases, and to apply it to the decision of other cases.”
If we have perceived the general reasons or principles of these judicial decisions herein referred to, as abstracted from any peculiarities of the particular case before the court, we have ascertained their ratio decidendi to be this: That the jurisdiction of our courts is coextensive with the sovereignty of the state, embracing the property and persons within its *560limits; that, as to such property and persons within those limits, the authority of the state is supreme, except as restrained by the federal Constitution; that it is not repugnant to the due process clause of the Constitution of the United States for this state to provide for reasonable notice to a nonresident defendant by‘serving him outside of this state personally with a copy of the summons and complaint, where the subject matter of the action is directed against, or only affects, property located in this state; that, where the situs of this property is immovably fixed within its territorial jurisdiction, the court may acquire jurisdicton of the res by the filing of a bill in equity having for its subject matter said property and for its purpose an adjudication as between the parties as to who is the real owner thereof; and that shares of stock—this peculiar species of property, though denominated as of the nature of a chose in action, and classified as personal property—has by the analogy of its immobility a strong resemblance to realty, so that, for the purpose of such a suit, it may be governed by like considerations.'
It is manifest that, in an action to establish the ownership of the stock, the statute does not provide any means of hold-* ing it. Civ. Code 1913, par. 1647. - The plaintiff could not have attached the certificate or garnished the company, or otherwise seized the property into the possession of the court; and, from the views we have expressed, we do not deem such a course to. be necessary. .The certificate is presumably in the possession of the defendant in Ohio.
Nor can we see any reason upon principle or authority, so far as affecting the jurisdiction.of the court over the res is concerned, the necessity of making the company a party defendant.
Story, in his work on Equity Pleading, states the rule as to when the objection for want of parties may be taken, and the consequence of not bringing the proper parties before the court, thus:
“If the proper parties are not made, the defendant may either demur to the bill, or take the objection by way of plea or answer; or, when the cause comes on to a hearing, he may object that the proper parties are wanting; or the court itself may state the objection, and refuse to proceed to make a decree; or, if a decree is made, it may, for this very defect, be *561reversed on a rehearing or an appeal; or, if it be not reversed, yet it will bind none bnt the parties to the suit, and those claiming under them, so that all the evils of a fruitless or inadequate litigation may sometimes be visited upon the successful party in the original suit, by leaving his title still open to future question and controversy.” Section 75.
Judge STORY further observes that:
“The mere nonjoinder of a proper party cannot avail the defendant in a bill of review, unless it appears to his prejudice; and there is the more reason for this rule, because the absent person is not barred by the decree, but may in another suit vindicate his rights.”
The matter of raising an objection to a defect of parties plaintiff or defendant is regulated by statute. Civ. Code 1913, pars. 468 (4), 469. The Code further provides:
“The court may, on motion of either party, order additional parties brought in upon such terms as the court may prescribé, and may prescribe the process and manner by which such additional parties shall be brought in.” Civ. Code 1913, par. 409.
Also that: “The court may determine any controversy between parties before it, when it can be done without prejudice to the rights of the others or by saving their rights; but, when a complete determination of the controversy cannot be had without the presence of other parties, the court shall order them to be brought in.” Civ. Code 1913, par. 410.
Generally speaking, a corporation has no interest in the individual ownership of its shares; and, while the corporation was a party, the plaintiff might be enabled to more efficiently guard his interests by injunction or other provisional remedy, such as was invoked in the Jellenik case cited. But this would be for the protection of the plaintiff, not that the defendant is in any way concerned, or by the lack of such a proceeding is any right of his defeated.
The distinction between an action concerning real estate and an action to establish the ownership of shares of stock is sought to be made in the doctrine of lis pendens. The function of a lis pendens is not to preserve or impound property, hut it is to impart notice to third persons in their dealings with it. So far as we are aware, the doctrine of lis pendens has never been applied as affecting the question of *562jurisdiction. The doctrine of lis pendens has no application to sales of shares of stock. Cook, Corporations, sec. 364. If so applied, it would destroy the element of negotiability. Machen, Modern Law of Corporations, sec. 844.
It may be true that, while this suit is pending, the defendant may transfer the certificate, and the bona fide transferee may perhaps take good title to the stock, and so, if no temporary injunction or other provisional remedy be obtained, a transfer on the books of the corporation may be good. But these are matters with which we are not now concerned. The appellant’s rights are cognizable only in equity, and, the subject matter of this suit being immovably fixed within this jurisdiction, the courts of this state are not powerless to proceed by reason of the nonresidence of the appellee.
Recognizing the power of the legislature of this state by virtue of the location within its boundaries of the property which is the subject matter of the action to enable its courts to take jurisdiction upon constructive service of process against the nonresident defendant, and the object of the suit being to establish an ownership in said property, we are of opinion the judgment of the superior court is erroneous.
The judgment is reversed and the cause remanded, with directions to overrule the objections to the jurisdiction, and have such further proceedings, not inconsistent with this opinion,- as the law may direct; the defendant to be granted a period of thirty days in which to make his general appearance in the action, if he be so advised.
Reversed and remanded.
ROSS, C. J., concurs.