Court Opinion

ID: 5207292
Source: CourtListenerOpinion
Date Created: 2022-01-06 16:05:03.338686+00
Date Added: 2024-06-11T08:27:18.848544
License: Public Domain

Ingraham, J. (dissenting):
By section 1780 of the Code of Civil Procedure an action against a foreign corporation may be maintained by a resident of the State *761or by a domestic corporation for any cause of action. The plaintiffs are residents of this State and have commenced this action to enforce their rights as stockholders of the Cobre Grande Copper Company, a foreign corporation. Their cause of action is based upon wrongs done to the corporation of which they are stockholders by its officers and directors acting for and on behalf of other foreign corporations in whom the said officers and directors are interested. The prevailing opinion seems to base its conclusion upon a statement that the plaintiffs must allege a cause of action against this corporation in whose favor they seek to enforce a cause of action. I do not understand that such is the rule. No relief is asked against this defendant Cobre Grande Copper Company, and no cause of action can be stated against it; what must be stated is a cause of action in its favor. It is a necessary party to determine the claim of the plaintiffs that it has been defrauded by its officers and directors for their own benefit or for the benefit of their associates, or the other corporations in which they are interested, and its presence as a party to the action is essential for the purpose of having a proper enforcement of a decree that the court could make as against the other defendants for whose wrongful acts relief is sought. Whether or not the facts alleged would sustain a cause of action in favor of the Cobre Grande Copper Company as against the other defendants is a question which should be determined upon demurrer or upon the trial, and not upon a motion to bring the corporation in whose favor the claim is sought to be asserted into court. If this action cannot be maintained in this State it is difficult to see where it can be as the same objection against obtaining jurisdiction over these various corporations could be urged in any State in which an action to redress these wrongs could be brought. When this court (Grant v. Cananea Consolidated Copper Co., 117 App. Div. 576) vacated the service of a summons and complaint in this action upon the Cananea Consolidated Copper Company the Court of Appeals reversed the order (189 N. Y. 241), expressly sustaining the jurisdiction of the court, holding that the Supreme Court of this State had jurisdiction over the cause of action alleged in the complaint, the court saying: “ If it (Cananea Company) has property or profits arising from the mining of ores in the hands of the Greene Consolidated corporation which in equity belongs to *762our own. citizens, they may apply to the courts, either State or Federal, to recover that which belongs to them, and such application is the due process of law which the Constitution recognizes and requires.” It seems to me that to reverse this order would be in direct opposition to the decision of the Court of Appeals when it expressly decided that the courts of this State had jurisdiction over an action to compel the foreign corporations who are defendants in this action to account to the Cobre Grande Copper Company for money that it has in their possession belonging to that company. It is quite true that as was said by the Court of Appeals the situation here presented is peculiar and differs from that of any other reported case; but what was said by the Court of Appeals on the former appeal I think applies equally to this: “ The Cananea Company certainly is a proper party in an action for an accounting. Whether it be a necessary party we do not now determine. If it is a necessary party and the courts of this State have not acquired jurisdiction of it by the service of a summons in the manner set forth, it is not apparent how the minority stockholders of the Cobre Grande Company can obtain relief. Should they commence their action in the Federal court, they would be met with thé same difficulty with reference to the acquiring of jurisdiction over the Mexican corporation, and should they go to Mexico and institute their action there, they would meet with a similar difficulty with reference to acquiring jurisdiction over the Cobre Grande and the Greene Consolidated corporations.” And when the court has acquired jurisdiction over the parties who have committed the wrongful acts alleged, and over the corporations in whose hands the property of the corporation of which the plaintiffs are stockholders has come, it seems to me clear that the court then has jurisdiction to bring in a defrauded company into court as a proper party to a complete determination of all the questions presented, and that it has alleged such a cause of action as justified the court in directing the summons to be served by publication.
I, therefore, dissent.
Ladghlin, J., concurred.
Order reversed, with ten dollars costs and disbursements, and motion granted, with ten dollars costs.