Summary
In Williams v. Williams, 83 Misc. 560, 145 N.Y.S. 564, a suit to dissolve a partnership and for accounting was filed in a court in New York, in which state the partners resided and the partnership had its principal office and place of business.
Summary of this case from Miller v. HowellOpinion
January, 1914.
Edgar T. Brackett, for plaintiffs.
J.B. McCormick and Joseph A. Kellogg, for defendant.
The parties to this action, at the time of the commencement thereof, were copartners in a quarry business. They resided in the village of Granville, county of Washington, in this state, where, also, were the principal office and the place of business of the copartnership. The quarry, operated under a lease in perpetuity, was in the town of Pawlet, county of Rutland, state of Vermont. The action is for a dissolution of the copartnership and for the appointment of a receiver. The summons and complaint therein were served upon defendant personally in Granville on November 15, 1913. An order appointing a receiver was thereupon granted by Mr. Justice Kellogg, after a hearing upon which defendant appeared by his attorney, who opposed. After qualifying, the receiver served a copy of the order, with notice of entry, upon defendant's attorney personally and a certified copy thereof upon defendant personally within this state and at the same time demanded compliance with the order. Defendant refused. He had removed the books, records, papers and property of the copartnership from its office in Granville to the place where the quarry was located in Vermont on the day which intervened between the granting and service of said order. It is now claimed that the order appointing the receiver was beyond the power of the justice to grant. However this may be, it has not been vacated. On November 17, 1913, defendant filed a bill in chancery in the state of Vermont, county of Rutland, against plaintiffs for the dissolution of said copartnership and for the appointment of a receiver. The papers in the action were served upon plaintiffs outside of the state of Vermont and in the village of Granville on November 18, 1913. Among them was an order of the chancellor directing plaintiffs to show cause before him at Rutland on November 21, 1913, why a receiver should not be appointed in that state. On that same day, plaintiffs commenced a second action against defendant in the state of New York to perpetually restrain and enjoin him from prosecuting or taking any steps or proceedings in the action brought by him in the state of Vermont. The summons and complaint in this action were also served upon defendant, personally, in said village of Granville, and with them was served an order to show cause, granted by the county judge of Saratoga county, with a preliminary injunction, restraining defendant until the return of said order from prosecuting such action or taking any steps or proceedings therein. Defendant thereupon went to Vermont and has remained out of the state of New York since that time. Notwithstanding the order, he thereafter caused an amended bill of complaint to be filed in his suit in the state of Vermont, by which certain creditors, who had attached the partnership property in that state, were added as parties, and he also appeared on the argument before the chancellor, on November 25, 1913, for the appointment of a receiver in that state and conferred with and directed his attorneys therein. Plaintiffs were represented on said argument by attorneys and sought to have the powers of the New York receiver extended to the property in Vermont. The chancellor, however, declined and appointed a Vermont receiver. Defendant, then, has deliberately violated two orders of this court and is in contempt.
The parties reside in this state. Plaintiffs have brought their actions in the Supreme Court of this state, and all of the papers in same have been served upon defendant personally in this state. This court has acquired jurisdiction of the person of defendant and acquired such jurisdiction before defendant filed his suit in chancery in the state of Vermont. And the papers in that suit were not served upon plaintiffs personally in that state, so that the Vermont court has not yet acquired jurisdiction of the persons of plaintiffs. Moreover, the action is an equitable one for the dissolution of a copartnership. The venue in such an action is determined by the residence of the parties and not by the locality of the copartnership assets, even when such assets include real estate, so that initial proceedings should be had at the place of domicile, and the other receivership should be ancillary thereto. 30 Cyc. 559, 717; Hutchinson v. American Palace Car Co., 104 Fed. Repr. 182. In the Hutchinson case the court says: "It is true that every state is entitled to take control, according to its own local rules, of property lying within it, and this independently of the question of domicile; so that under exceptional circumstances, there is no doubt that a local tribunal may properly constitute a receivership of assets actually within its jurisdiction, independently of any question of domicile. Nevertheless, where the purpose is to wind up a corporation, * * * on account of alleged insolvency or fraudulent transactions, or where it is desired to obtain a general receivership, as this expression is commonly understood, initial proceedings should be had at the place of domicile, and the other receivership should be ancillary thereto." While proceedings in this state for the dissolution of a copartnership and the appointment of a receiver have no extra-territorial effect over the disposition or possession of property situate in a sister state, except as they may be permitted to have effect through the courtesy of the courts of that state, nevertheless, it seems to be settled that the courts of this state have authority to act upon residents of this state personally with reference to suits in a sister state, as the ends of justice may require, and, with that view, to order them to take or to omit to take any steps or proceedings in the same state or a sister state. Story Eq. Juris. §§ 899, 900; Cole v. Cunningham, 133 U.S. 107; Phelps v. McDonald, 99 id. 298; Vail v. Knapp, 49 Barb. 299, 305.
In the McDonald Case, supra, the court says: "Where the necessary parties are before a court of equity, it is immaterial that the res of the controversy, whether it be real or personal property, is beyond the territorial jurisdiction of the tribunal. It has the power to compel the defendant to do all things necessary, according to the lex loci rei sitae, which he could do voluntarily, to give full effect to the decree against him. Without regard to the situation of the subject matter, such courts consider the equities between the parties and decree in personam according to those equities and enforce obedience to their decrees by process in personam." So that, notwithstanding the facts that the quarry and some or much of the property of the copartnership are located in the state of Vermont, this court may and, under the exceptional circumstances of the case, should, so far as it can, compel defendant to comply with its orders. The cases cited by defendant ( Montana Ore P. Co. v. Butte B.C.M. Co., 44 A.D. 136; Johnstown Mining Co. v. Butte B. An. M. Co., 60 id. 344; White v. Caxton Book Binding Co., 10 Civ. Pro. 146; Atlantic Pacific Tel. Co. v. B. O.R.R. Co., 46 N.Y. Super. Ct. 377; Matter of Hughes Co., decided by Mr. Justice Henry T Kellogg, unreported) did not involve the relations and conditions which exist in this case, and those were cases where efforts were made in the courts of this state to control the actions of courts or of officers of courts of sister states, after jurisdiction had been acquired by the latter.
The motion should be granted, with ten dollars costs.
Motion granted, with ten dollars costs.