Court Opinion

ID: 5194165
Source: CourtListenerOpinion
Date Created: 2022-01-06 15:40:46.960735+00
Date Added: 2024-06-11T08:27:01.102748
License: Public Domain

Hatch, J. (dissenting):
I concur fully in the views of Mr. Justice Patterson. While foreign corporations are not amenable to the visitatorial power of the courts of this State, yet those courts have not hesitated to compel directors of such corporations to perform -acts directly relating to the management of their corporate affairs, such as the declaration of dividends. (Boardman v. Lake Shore & Mich. Southern Ry. Co., 84 N. Y. 157.) It is obvious that in many cases, unless the courts of this State will interfere to prevent acts of waste and the fraudulent disposition of property of foreign corporations doing business within this State, stockholders and creditors of such corporations may be defrauded with impunity. It is well known that corporations organized under the laws of other States, notably of West Virginia and Hew Jersey, transact all their business in the city of Hew York, and never act within the territory of the States under the laws of which they are organized, unless it possibly may be to hold a merely formal annual meeting. Those corporations are essentially, with respect to everything except their formal creation, corporations of this State. Hnless wrongs threatened or per*538petrated by directors may be prevented or redressed in the courts of this State, stockholders and creditors are remediless, Sections 1781 and 1782 of the Code, so far as they may apply to foreign corporations under the provisions of sections 1809,. 1810,1811 and 1812 of the Code, furnish protection to creditors and stockholders'; and section 1782 provides for a qualified plaintiff to institute proper and timely proceedings to prevent or to redress acts of rapine and fraud by officers or directors. Stockholders and creditors may not receive information in time to act effectively, while a director, trustee, manager or other officer of a corporation may be able to act at once.
I think this demurrer should be overruled. .
Judgment reversed, with costs, and demurrer sustained, with costs, with leave to plaintiff to amend complaint upon payment of costs in this court and in the court below,