276 F. 728 | D. Me. | 1921
This case comes before the court upon defendants’ motion to vacate the order of service and dismiss the bill, for the reason that the court has no jurisdiction over the defendants, because:
(1) A certified copy of the order of notice was not served on Horace PI. McDowell.
(2) The Doherty Securities Company, one of the defendants, has no property in Maine. All its corporate business is transacted outside of Maine except the annual meeting of stockholders.
(3) All the certificates of stock of the Doherty Securities Company owned by the defendants are held and owned by them within the Western district of Pennsylvania and the Southern district of Texas.
Section 57 of the Judicial Code (Comp. St. §1 1039), provides, among other things, that when a suit is commenced in a District Court of the United States to enforce any legal or equitable claim upon, or claim to, or to remove any lien or cloud upon the title to real or personal property within the district where the suit is brought, one or more of the defendants therein shall not be an inhabitant of or found within the district, or shall not voluntarily appear thereto, it shall be lawful for the court to make an order directing the absent defendant to appear and plead, answer, or demur by a day certain, which order shall lx: served upon such absent defendant or defendants, if practicable, wherever found, and also upon the person or persons in possession or charge of such property. I have briefly stated that part of the section which is material to the consideration of the questions involved in this motion.
The plaintiff’s bill is brought to establish a claim to and upon certain shares of stock of the Doherty Securities Company. The bill shows that the corporation is a Maine corporation; that the plaintiffs arc residents of New York state; that the three individual defendants in whose name the shares are alleged to stand are residents of Pennsylvania and Texas; that the defendant Jesse C. McDowell was the agent and employe of the plaintiffs, and that: it was part of his duty, as such agent, to negotiate transactions for the purchase of property; that he took advantage of this to add large amounts to the alleged purchase price, and, having obtained from the plaintiffs payment of these large amounts, he had such payment turned over to himself. A specific case is alleged in the bill in detail, in which transaction McDowell is alleged to have obtained $250,000. There is another allegation that McDowell, during the term of his employment, defrauded the plaintiffs in the same way, receiving thereby a large amount of money;
“The term ‘to certify’ as used with reference to legal documents, means to testify to a thing in writing; and in the absence of statutory provision de-*731 daring the particular form of certification, any form which affirms the fact to writing is sufficient.”
Jt appears clear that the intention of the court order was to provide for a true copy of the order to be served on the individual defendant. I think this intention of the court was substantially carried out.
The defendants’ motion to vacate the order is denied. ■
The record shows that this is a Maine corporation. The shares in it are property, regardless of the place where the corporation conducts its business, or where its assets are located, or where the certificates of stock owned by the individual defendants are kept. In this state shares of stock in a corporation are distinctly recognized as personal property. I do not need to cite the various Maine statutes which provide for the attachment of such shares and for the assessment of inheritance tax on them, although owned by deceased nonresidents. The cases in the federal court hold that the stock of a corporation organized under the laws of a state has its situs in such state, and is property within a federal judicial district in the state. See 1 U. S. Compiled Statutes (1916) Annotated, p. 1167; Hudson Co. v. Murray (D. C.) 236 Fed. 419. In Hutchins v. State Bank, 12 Metc. (Mass.) 421, 426. Chief Justice Shaw held that the share of a bank, corporation was In the nature of a chose in action, and that the certificates of stock are simply evidences of the holders’ title.
In Jellenik v. Huron Copper Mining Company, 177 U. S. 1, 13, 14, 20 Sup. Ct. 559, 563 (44 L. Ed. 647), in speaking for the court, Mr. Justice Harlan 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 to the state that created it, the property represented by Us certificates of stock may be deemed to be held by the company within ihe state whose creature if is, whenever it is sought' by suit to determine who is Its real owner. This principle is not affected by the fact that the defendant is authorized by the laws of Michigan to have an office to another state, at which a book showing the transfers of stock may be kept. ® * * The corporation being brought into court by personal service of process in Michigan, and a copy of the order of court being served upon the defendants charged with wrongfully holding certificates of the stock in question, every interest involved in the issue as to the real ownership of the stock will be represented before the court Wo think the Circuit Court may rightfully proceed under the act of 1875, for the purpose of determining such ownership.”
.1 find that the shares of stock described by the plaintiffs, and sought to be held by them as their property, constitute property within the state of Maine.
“On a motion to dismiss for want of juris diction it is not to be expected that the court will ordinarily enter on a discussion of the merits. If the case shows a bona fide claim within the jurisdiction of the court, with a reasonable plausibility in support thereof, it behooves the court to pass on the merits on a formal plea, demurrer, or answer, rather than summarily on a motion to dismiss. * * * As it is apparent that the complainant, in good faith, seeks to proceed in a controversy which it in good faith regards as within our jurisdiction, we feel authorized, on a motion to dismiss for want of jurisdiction, to decline any discussion of the merits so far as it is possible for us so to do. Not only is this the more convenient practice, but it protects against a hasty adjudication on a summary proceeding with reference to substantial questions.”
In Ralston Steel Car Co. v. National Dump Car Co. (D. C.) 222 Fed. 590, this court held that, under our practice, the federal courts are inclined to allow a case in equity, involving important questions, to proceed to answer and proofs where a doubtful question is raised by the pleadings, and that it has been the practice to overrule a demurrer unless it is founded upon an absolutely clear proposition; that, taking the allegations to be true, the bill must be dismissed at the hearing.
Upon examination of the bill I find that the attack upon the jurisdiction of the court cannot be sustained. The motion to dismiss is denied.