Opinion
No. 49-270-744.
02-21-1921
APGAR v. ALTONNA GLASS CO. et al.
Burnett, Sorg, Murray & Duncan, of Newark, for the motion. Homan & Buchanan, of Trenton, opposed.
Suit by W. Holt Apgar, receiver of the Independent Glass Company, against the Altonna Glass Company and others, praying that an assessment be levied against defendants for the par value of the amount of stock for which they subscribed and that they be decreed to pay the assessment to plaintiff receiver. Decree for the defendants. On rehearing. Original decree adhered to.
Burnett, Sorg, Murray & Duncan, of Newark, for the motion.
Homan & Buchanan, of Trenton, opposed.
BACKES, V. C. The receiver of the defunct Independent Glass Company (window glass trust) filed its bill against 32 foreign corporations, setting up that they were stockholders of the company, and praying that an assessment be levied against them "for the par value of the amount of stock for which they subscribed," and that they be decreed to pay the assessment to the receiver, so that he may satisfy the company's debts and the cost of the administration. Process issued and was returned non est, and thereupon an order for substituted service upon the defendants was entered, and published and posted as therein provided. Later a second subpoena issued against them and was returned by the sheriff of Atlantic county served upon three, the Dunkirk Window Glass Company, Camp Class Company, and Smethport Glass Company, service being made upon the president of the first two and upon the vice president of the third. They entered special appearances, and upon the return of an order to show cause the service was quashed, it appearing by the proofs that the defendants were not authorized and never had in fact transacted any business in this state, which was not controverted, and that the officers upon whom process was served were at the time temporarily in this state upon business of their own. Service under such circumstances was obviously abortive. Camden Rolling Mill Co. v. Swede Iron Co., 32 N. J. Law, 15; Puster v. Parker Mercantile Co., 70 N. J. Eq. 771, 67 Atl. 1102.
An appeal was taken, which was withdrawn to make this motion for a rehearing. The receiver has taken on new counsel, whose plea is, in effect, that if given another chance he could make a better showing of facts, and a more persuasive argument upon the facts and the law, than his predecessor had made. There are no newly discovered facts, and for that reason the motion must go down. Kirschbaum v. Kirschbaum, 111 Atl. 697.
A motion for a reargument on the caseas made comes too late after the entry of the order or decree.
Jurisdiction of the court over the persons of the defendants was properly raised by motion to quash the writ. Brimberg v. Hartenfeld Bag Co., 89 N. J. Eq. 425, 105 Atl. 68.
The officers of the defendant corporations were at the time process was served attending a convention of the National Association of Window Glass Manufacturers at the Traymore, Atlantic City, of which they individually were members. So it appeared by the proofs. Present counsel says that, if given the opportunity, he believes he can show that the corporations were members of the association, that the officers were their representatives, and that their mission into this state was upon business of their companies, the convention, the object of which, admittedly, was to confer and act upon matters involving solely the policy of the confreres in their common calling. He further says that this would have been shown upon the original hearing had the affiants been put to a cross-examination upon their depositions, and for the first time calls my attention to a request to that effect in the affidavit of the receiver. Counsel at that time neither presented nor pressed the application.
I fail to see how these developments would change the result. Section 88 of the Corporation Act provides that service of process in personal actions against foreign corporations may be made "upon any officer, director, agent, clerk or engineer of such corpo-ration" personally or at his dwelling house. C. S. p. 1653. But, that such service have legal vitality and constitutional sanction, the corporation must be "found" in this state; that is, it must have subjected itself to the jurisdiction by "doing business" in this state. Carroll v. N. Y., etc., R. R Co. 65 N. J. Law, 124, 46 Atl. 708; St. Clair v. Cox, 106 U. S. 350, 1 Sup. Ct. 354, 27 L. Ed. 222.
In Doctor v. Desmond, 80 N. J. Eq. 77, 82 Atl. 522, Vice Chancellor Learning quashed the service of a subpœna ad respondendum served upon the director of a Pennsylvania corporation attending a stockholders' meeting in this state of a corporation of this state. He found that the officer represented the foreign corporation at the meeting, and that to that extent the corporation was transacting business in this state, but he held, citing numerous authorities, that
"It appears to be well settled that the rule that a corporation by transacting business in a foreign state voluntarily subjects itself to the laws of that state regulating the service of process on foreign corporations has reference to the transaction of some substantial part of its ordinary business by its officers or agents selected for that purpose, and that the transaction of an isolated business act is not carrying on or doing business within the meaning of the rule."
See Interstate Amusement Co. v. Albert, 239 U. S. 560, 36 Sup. Ct. 168, 60 L. Ed. 439; Knapp et al. v. Bullock Tractor Co. (D. C.) 242 Fed. 543.
A single or isolated transaction is not doing business. D. & H. Canal Co. v. Mahlenbrock, 63 N. J. Law, 281, 43 Atl. 978, 45 L. R. A. 538; Von Seyfried v. Vollers, 75 N. J. Law, 405, 67 Atl. 930. Moreover by "business" is meant trading, in its broadest sense, commercially, financially, or otherwise, within the scope of corporate capacity. The business of the convention was that of the association, and the participation therein by the defendant corporations cannot by any stretch of fancy be looked upon as doing business in this state so as to render the foreign corporations amenable to our jurisdiction and subject to a decree in personam.
Counsel next insists that it was not pointed out to me that the contract sued on was made in this state, and consequently it was not argued thot the case comes within an exception to the general rule, viz. and where a foreign corporation, not authorized to do business in this state, engages in a single transaction, it is subject to process, in respect of such transaction, by service upon its officers who afterwards come into this state on either corporate or private business. He cites as authority Moulin v. Trenton Life & Fire Ins. Co., 24 N. J. Law, 222, and Mr. Justice Dixon's interpretation of that decision in National Condensed Milk Co. v. Brandenburgh, 40 N. J. Law, 111, that
"Since the case of Moulin v. Insurance Co., 4 Zab. 222, and 1 Dutcher, 57, it must be regarded as the settled law of this court that, if a corporation makes a contract in a state other than that in which it was chartered, it thereby submits itself to the jurisdiction of such foreign sovereignty so far as to be liable to suit therein in regard to that contract, when summoned according to the laws of the state."
Were it not for the opinion of this excellent judge, it would be my impression, that the Moulin Case holds that jurisdiction over a foreign corporation doing business within the state continues after the corporation has withdrawn, with respect to contracts made in the state, while doing business there, and that the jurisdiction may be enforced by process served according to the law of the state. If, however there is this exception to the rule, as the Supreme Court holds there is, it is not applicable here; for nowhere in the record does it appear that the contract was made in this state.
Of course, a rehearing will not be granted because of an error of judgment or mistake of law by counsel as to the pertinency of force of certain evidence. Warner v. Warner, 31 N. J. Eq. 549; McDowell v. Perrine, 36 N. J. Eq. 632; Patterson v. Read, 43 N. J. Eq. 18, 10 Atl. 807 (cited with approval in White v. Smith, 72 N. J. Eq. 701,65 Atl. 1017); Cumberland, etc., Co. v. Clinton, etc., Co., 84 N. J. Eq. 557, at page 566, 94 Atl. 647.
The receiver's bill alleges that the defunct company was incorporated in 1900, with an authorized capital stock of $300,000, divided into 3,000 shares of the par value of $100 each, that it commenced business with $1,000, and "that the said corporation, in pursuance of the powers conferred upon it by said articles of incorporation, did thereafter sell and dispose of its capital stock to the following named defendants residing at the places set opposite their respective names the amount of stock of the par value set opposite their names." Then follows the names of the corporations and the amount in money of stock. There is no allegation that the sales were negotiated in this state, and it is not to be implied that they were. Nor is it now contended that they were, except upon the theory that, as corporate stock has its situs in the state of its origin (Amparo Mining Co. v. Fidelity Trust Co., 74 N. J. Eq. 197, 71 Atl. 605, and 75 N. J. Eq. 555, 73 Atl. 249), and as it is to be assumed that the stock was issued there, it is to be presumed that the contract of purchase was made where issued. It is manifest that the' defendants did not subscribe for the stock, and it is inferable that the sales were made in the home states of the defendant corporations, and this inference is strengthened by the rule that pleadings must be construed most strongly against the pleader. Stephens, etc., Transportation Co. v. Central R. R. Co., 33 N. J. Law, 229.
Counsel also insists that the service would have been permitted to stand, if not as process, as notice to the nonresident defendants of the proposed assessment, as he says was done by Vice Chancellor Stevens in Puster v. Parker Mercantile Co., 64 N. J. Eq. 599, 55 Atl. 817. That was not a case for an assessment upon corporate stock, and the practice there pursued was disapproved in Wilson v. American Palace Car Co., 64 N. J. Eq. 534, 54 Atl. 415. The course now indicated might have been adopted with propriety had it been suggested, but the complainant would have had no cause for complaint had it been refused, as the defendant corporations had already been served with notice as directed by the order of publication.