Court Opinion

ID: 7277423
Source: CourtListenerOpinion
Date Created: 2022-07-25 20:01:50.761518+00
Date Added: 2024-06-11T16:18:55.337509
License: Public Domain

Mr. Justice Van Oksdel
delivered the opinion of the Court:
At the threshold of this inquiry, we are confronted with a question of jurisdiction, which we think will dispose of this appeal. It is insisted that the complainants did not have legal notice of the meetings in London of the stockholders of the English company. Section 97, table A, of the first schedule of the •companies act, is as follows: “Any notice, if served by post, shall be deemed to have been served at the time when the letter containing the same would be delivered in the ordinary course of the post, and, in proving such service, it shall be sufficient to prove that the letter containing the notice was properly addressed and put in to the postoffice.” Section 15 of the same act provides: “In the case of a company limited by shares, if the memorandum of association is not accompanied by articles of association, or in so far as the articles do not exclude or modify the regulations contained in the table Marked “A” in the first schedule hereto, the last-mentioned regulations shall, so far a8 *43tbe same are applicable, be deemed to be regulations of tbe company in the same manner and to tbe same extent as if they bad been inserted in articles of association, and tbe articles bad been duly registered.”
It is urged that, inasmuch as the English corporation was organized as a company limited by shares in accordance with, and subject to, tbe companies acts, tbe above statutory regulations as to notice do not apply to this corporation, but that notice may be given as provided by tbe articles of association or bylaws ; in other words, that tbe statute as to notice only applies to corporations organized under tbe companies act having no by-laws or articles of association on this point. Tbe articles of association of tbe old English company contained tbe following provisions as to notice:
“148. Any notice may be served by tbe company upon any member whose registered place of address is in tbe United Kingdom, either personally or by sending it through tbe post in a prepaid letter addressed to such member at bis registered place of address.
“149. A member whose registered place of address is not in tbe United Kingdom may, from time to time, notify in writing to tbe company some place in England to be called bis address for service, which shall be deemed bis registered place of address for tbe purpose of tbe last preceding clause hereof, and any notice may be served by tbe company upon such member by sending it through tbe post in a prepaid letter addressed to him at such address.
“150. As regards members (if any) who have no registered address, a notice posted up in tbe office shall be deemed to be duly served on them at tbe expiration of twenty-four hours after it is so posted up.
“153. Any notice sent by post shall be deemed to have been served at tbe time when tbe letter containing the same is posted, and, in proving such service, it shall be sufficient to prove that tbe letter containing tbe notice was properly- addressed and put in a postoffice letter box or banded in at a postoffice.”
On this point, we agree with counsel for defendant that the *44provisions of the by-laws relative to notice govern, and not the provisions of the statute, which were only intended to apply in the absence of by-laws. It is alleged in the answer, and consequently admitted, that the notices here in question were sent out and posted in strict compliance with the by-laws of the company. When complainants became stockholders of this company, they were conclusively presumed to know its articles of association or by-laws, as well as the law under which it was incorporated; and any failure on their part to so acquaint themselves with the organization of the corporation will not be excused. They cannot escape the force and effect of these provisions by disclaiming knowledge of their existence. The complainants must be deemed to have had sufficient notice of the meetings of the company.
But it is contended that, under the circumstances here detailed, the complainants, without any affirmative action on their part, became dissentient stockholders. With this we do not agree. The statute does not automatically create a dissentient stockholder. There is no vested right in a stockholder to become such by mere operation of the statute. The right can only be obtained by the affirmative action of the stockholder himself. The way is pointed out in the act, and only by following its provisions strictly can a stockholder become 'a creditor of the corporation to the extent of the value of his stock at the date of the liquidation of the company. Complainants received the first notice on the 16th of May, 1904, — twenty-one days before they were required to file their dissent under the statute; and the second notice was received on or about the 30th of May, at least seven dáys before they were required to file their dissent. But it is said that they could not foresee what the results of the meetings would be. They were charged with knowledge of both the requirements of the law and the by-laws of the company, and with the proposed scheme of reorganization; and, as a protection, could have given notice of their dissatisfaction with the proposed change and their desire to dissent in the event such change should be approved. The second notice gave notice of the approval at the former meeting of the resolution providing *45for the change, and ordinary prudence would have indicated the necessity of at once forwarding their dissent which had yet time to reach London within the time required by statute. Instead, they ignored these notices, as well as the subsequent notices to comply with the new arrangement for the issuance of their stock, for a period of almost two years. In the meantime, their shares of stock, in compliance with the plan of reorganization, were sold by the liquidator, and checks for the purchase price remitted to them. They retained the checks without giving notice of any dissatisfaction. Many of the stockholders in the old company accepted the stock of the new company and paid their aassessments, and many new stockholders were added by purchase of stock in the new company. These stockholders had a right to rely upon the adjustment made with complainants as being satisfactory to them, in the absence of notice to the contrary. Some months later, and prior to the filing of this bill, the liquidator concluded the reorganization and filed his report as required by law. We think complainants were guilty of such laches as may be justly imputed to them in a court of equity. It is well settled that, independent of any statute of limitations on the subject for the guidance of courts of law, equity may refuse to grant relief when it is sought after an unreasonable and unexplained delay. Galliher v. Cadwell, 145 U. S. 372, 36 L. ed. 740, 12 Sup. Ct. Rep. 373; Abraham v. Ordway, 158 U. S. 420, 39 L. ed. 1039, 15 Sup. Ct. Rep. 894.
But, independent of the above objection, we are of the opinion that, since the complainants cannot be regarded as dissentient shareholders, and, as such, creditors of the corporation, there is an entire lack of jurisdiction to maintain this action in the courts of this District. What the English company did was to •evolve and carry through a scheme of reconstruction. It was done under the laws of Great Britain. It is not apparent to us how this action could have been interfered with by the courts of this District. As suggested in the brief of appellee: “Suppose, on the 16th day of May, when complainants received their first notice, they had come into court and asked for an injunction to prohibit the English company from going forward with the *46scheme of reconstruction. Would not this court have said to them, ‘You must appeal to the courts of that country where your company was organized V How may this court substitute itself for the liquidators as provided for by the English act? We submit it cannot.” The proceeding was had under the law of Great Britain, and related entirely to the internal affairs of the corporation. At most, there could only be an action for the conversion of the stock, and that would have to be brought against the liquidator who converted the stock of the old corporation to the use of the new, with the new company joined as a party defendant. It is not clear just how a court of the District of Columbia could get service upon and enforce process against these parties in Great Britain, especially for the purpose of reviewing the acts of a corporation which were done under the laws of that country, and for which they are there exclusively answerable.
It is well settled in this country that the courts of a State where a corporation is organized have alone jurisdiction to inquire into and regulate the internal affairs of such company. The law on this subject is extensively and ably reviewed with many citations by Chief Justice Alvey in Clark v. Mutual Reserve Fund Life Asso. 14 App. D. C. 154, 48 L.R.A. 390. In that case, at page 179, the court said: “It is thus apparent, from the statement of the facts alleged in the bill, and from the several prayers based thereon, that the relief sought, if it could be granted, would require the control, direction, and revision of the internal affairs of the corporation by a court of equity of this District. This, we think, upon the clearest authority, cannot be done. The law would seem to be too well settled to admit of a question that, where the acts complained affect the plaintiff in his rights of corporator, or stockholder, or as a member of a mutual benefit or insurance company or other corporation, and the acts are those of the corporation, done and performed in the course of the administration of the corporate affairs, and especially when claimed to have been done and performed, or authorized to be done, by virtue of authority derived from its charter or by-laws, the courts of another state or jurisdiction will not *47interfere or attempt to exercise jurisdiction to direct, control, or revise corporate action. To assume jurisdiction over the affairs of a foreign corporation, would inevitably lead to conflicting decisions, resulting in confusion and needless litigation, and the making of orders and decrees simply to be contemned, because not capable of being enforced. The court, if it were to undertake to act in such cases, has no power, and therefore cannot bring the officers, or the corporate books, or the assets of the corporation within its jurisdiction, to be subject to its process.”
The judgment of the trial court dismissing the bill was right. It is affirmed with costs, and it is so ordered. Affirmed.