269 Pa. 500 | Pa. | 1921
Opinion by
The bill in this case alleges that the defendant corporation is organized and exists under the laws of the ■State of West Virginia, that its corporate meetings are held, its business transacted and its records and money kept in Pennsylvania; that all of its incorporators, officers and directors have been and are citizens and residents of this State, and none of its stockholders reside in West Virginia; that it has no officer or agent in the latter state upon whom service of process can be made. The individual defendants are three of its directors and the plaintiff is a stockholder; Complaint is made that these three persons have organized another corporation for the purpose of buying and selling coal and coke, in which they are largely interested as stockholders; that at a meeting of defendant’s directors, they, constituting a majority of the board, voted in favor of a resolution providing that the company which they had organized should act as selling agent for all of defendant’s coal and coke, at a commission of five per cent on the selling price of the entire output, to be paid to the selling company, whether sales were made by it or not; and that this was done at a time when there was before them the proposition of another concern to sell defendant’s products at a lower figure.
It is alleged that the resolution just recited is illegal and a fraud on the rights of the stockholders of defend
The single question for determination is, whether the acts complained of involve the internal management of a foreign corporation. It is obvious that the resolution affects the complainant solely in his capacity as a stockholder of the corporation; and the illegality which he avers is that the three directors, in voting for the resolution, violated a West Virginia statute.
In Loan Society v. Eavenson, 241 Pa. 65, this court said: “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 determining 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 creates the corporation.”
To sustain his bill, plaintiff relies upon the case of Kelly v. Thomas, 234 Pa. 419. We fail to see how it avails him, as the rule against which his case breaks is
The doctrine laid down in the cases heretofore cited was reannounced in Hogue v. American Steel Foundries, 247 Pa. 12, and had its origin, so far as this court is concerned, in Madden v. Penn Electric Co., 181 Pa. 617. What was said by Chief Justice Mitchell in McCloskey v. Snowden, 212 Pa. 249, has pertinence in the pending case, “For all that appears it is merely a difference of views and judgment between the complainants as individual or minority stockholders and the constituted board of management of the corporate affairs.”
No case can well be imagined which more clearly involves the internal management of a corporation than the one in hand. The plaintiff in his bill says that two selling companies made propositions to the defendant company to sell its product, and that a majority of the board of directors gave the preference to the company asking the larger commission on the sales; he asks a court of equity to investigate this transaction, and, if it finds it to be as stated, to declare it void. We can conceive of nothing more certainly supervisory over the management of the internal affairs of a corporation than review of such an act as this. Furthermore, we think the present case vindicates the rule we have laid down. We are asked to construe a West Virginia statute, regulating the internal management of corporations created in that state and involving a broad question of its public policy; our construction might not be in full accord with the views of the courts of that jurisdiction, in which event there would be presented to corporations there created, and doing business here, the anomalous and confusing situation that management in their home state is regulated in one way and here in another.
The learned chancellor was correct in sustaining the demurrer and dismissing the bill.
The decree is affirmed at appellant’s cost.