241 Pa. 65 | Pa. | 1913
Opinion by
The Loan Society of Philadelphia is a corporation chartered September 3,1908, under the laws of the State
The bill is quite lengthy and sets forth in detail the charges against the defendants for which relief is sought. The substance of the averments is contained in the clause preceding the prayer for relief and is as follows: “The plaintiff charges that the defendants have acted negligently in some regards, and in other respects they acted fraudulently, in their capacity of directors of the said corporation; that solely due to their negligence and fraudulent conduct, the said corporation has lost from August 31st, 1908, to August 31st, 1911, the sum of $137,196.53, for which sum the defendants and each of them are in law responsible to the treasury of the plaintiff corporation.” The prayers of the bill are: (a) for a decree declaring each of the defendants to be liable and accountable to the plaintiff for the sum of money which the court may find to have been lost and to have been fraudulently paid out by the neglect or connivance of the defendants; (b) for an account showing the amounts for which the defendants are liable, and a decree directing the payment of such sums to the plaintiff; (c) for discovery by each defendant of all sums
At the hearing the learned court below dismissed the bill on motion of defendants’ counsel for the reason, as stated by it, “that we are without jurisdiction of the-subject matter, the questions involved being questions which, in view of the court, must be decided almost entirely under the laws of Delaware, the corporation plaintiff being a Delaware corporation, and all the der fendants having been formerly officers of the corporation.” In other words, as held by the court in the opinion dismissing exceptions to its findings, to investigate the charges contained in the bill “would necessitate the inquiry by us as to whether the internal management of the affairs of this corporation was legal and proper. This in our judgment we have no right to do.” The plaintiff has taken this appeal.
We do not agree with the learned court below in its conclusion that it did not have jurisdiction of the cause averred in the bill. We have frequently held and it may now be considered as settled in this State that our courts will not take jurisdiction of a case involving the internal management of a foreign corporation. In all matters relating merely to corporate management an injured party will be required to seek his redress in the domicile of the corporation. Our courts will not exercise visitorial power over corporations chartered in another state, nor will they interfere in any way in detex^ mining the rights or duties of the directors or officers of the corporation under the laws of a foreign jurisdiction. These are matters wholly within the jurisdiction of the courts of the state which create the corporation. If the facts averred in the bill disclosed that the plaintiff is seeking to control or interfere with the management of the corporation the rule just announced would apply and the decree dismissing the bill would have to be affirmed.
This suit was instituted by the corporation itself to enforce redress for injuries which it alleges it has sustained by the wrongful acts of the defendants. If it were not for the fact that an accounting and discovery were necessary to afford the plaintiff full relief, the appropriate remedy would be an action at law. The defendants occupy the same position as any third party who has committed tortious acts resulting in injury to the plaintiff. In such case there could be no question as to the jurisdiction of the court. The plaintiff is authorized by the laws of this State to bring the action, and the defendants are all within the reach of the process of the court. The mere fact, however, that the plaintiff was required to go into equity instead of bringing an action on the law side of the court cannot oust the jurisdiction. The court has jurisdiction of the parties and may, therefore, enforce any decree or judgment entered against them. Hence, it is immaterial whether the suit is at law or in equity. The form of the action is not determinative of the jurisdiction.
There is every reason why the court should take jurisdiction in this case. The plaintiff corporation, though chartered in another state, has the right to sue in this State. The business of the corporation is carried on in this State. The defendants against whom relief is sought reside in this State. This is an action to enforce the common law liability of the seven directors, resident within the jurisdiction of the court, for mismanagement and misfeasance in conducting the affairs of the company. If jurisdiction is denied, it deprives the
We are not impressed with the argument of the appellees’ counsel that the bill should be dismissed because the complainant has an adequate remedy at law, because the bill is multifarious, because there is no reason for an accounting, and because fraud is insufficiently averred. As intimated above, both discovery and an accounting are necessary to afford relief to the plaintiff, and hence an action at law will not furnish the plaintiff corporation an adequate remedy for the injuries it has sustained. The bill seeks to require the defendants to account for the losses which resulted from their negligent and fraudulent management of the plaintiff’s affairs. The relief asked against all the defendants is the same and while acting in the same official capacity as directors of the corporation.
An examination of the cases cited and relied on by the learned court below to sustain its action in dismissing the bill discloses a misapprehension of the facts and of the decisions in those cases. In each case the bill was filed by a stockholder, and the visitorial powers of the court were invoked to give the plaintiff the redress he sought. In neither of the cases was the corporation the plaintiff seeking redress for wrongs or injuries sustained
The decree of the court below is reversed, the bill is reinstated, and a procedendo is awarded.