Fehr v. Black Petroleum Corp.

• Decision Date: 14 October 1924
• Docket Number: Case Number: 14062
• Citation: 229 P. 1048,103 Okla. 241,1924 OK 903
• Parties: FEHR v. BLACK PETROLEUM CORPORATION et al.
• Court: Oklahoma Supreme Court

1924 OK 903

229 P. 1048

103 Okla. 241

FEHR v. BLACK PETROLEUM CORPORATION et al.

Case Number: 14062

Supreme Court of Oklahoma

Decided: October 14, 1924

Syllabus

¶0 1. Courts--Jurisdiction --How Questioned and Determined.

The question of juridiction of the court of the subject-matter of the action is properly raised by motion to dismiss for want of jurisdiction, and even in the absence of such a motion, it is the bounden duty of the court to examine into its jurisdiction, whether raised by any party or not, and sua sponte, to determine its own jurisdiction.

2. Same--Definition.

Jurisdiction is the power of courts and judicial officers to take cognizance of and hear and determine the subject-matter in controversy between the parties to a proceeding pending and to adjust or exercise judicial power over them.

3. Corporations--Foreign Corporation--Petition for Receiver--Lack of Jurisdiction.

Where plaintiff, a resident of the state of Ohio, being a stockholder of a corporation chartered under the laws of the state of Delaware, but owning gas and oil mining leases in Oklahoma, files his petition in the courts of this state, praying the appointment of a receiver of the property of the foreign corporation "until such time as he may file an action in the courts of the state of Delaware, to have the defendant corporation declared insolvent." this court will refuse to assume jurisdiction based solely upon such grounds.

Fred M. Carter and C. M. Gordon, for plaintiff in error.

Keaton, Wells & Johnston and R. A. Hockensmith, for defendants in error.

RUTH, C.

¶1 This action was filed by the plaintiff in error, as plaintiff below, against the defendants in error, and from an order of the trial court sustaining the motion of the defendants to dismiss the plaintiff's petition for want of jurisdiction of the court of the subject-matter, the plaintiff appeals. Plaintiff alleges in his petition that each defendant is a corporation created under the laws of the state of Delaware, and each is engaged in buying and selling oil and gas mining leases, developing oil and gas mining leases, and producing and selling crude petroleum and natural gas in the state of Oklahoma, and were engaged in the same kind of business, and prior to July 27, 1921, were competitive corporations, and were licensed to do business in the state of Oklahoma as provided by law. That the authorized capital stock of the Black Petroleum Corporation is 3,000,000 shares of the par value of $ 1 each, and 1,374,937 shares have been issued and sold, and E. R. Black owned about 1,000,000 shares of the stock issued, and on July 27, 1921, E. R. Black sold 982,000 shares of stock of the Black Petroleum Corporation to the defendant Noco Petroleum Company. Plaintiff further alleges that on July 27, 1.921, he was owner of 8,425 shares of the Black Petroleum stock, that the general offices of the Noco Petroleum Company are at 329 Broadway, New York, and the general offices of the Black Petroleum Corporation were, prior to July 27, 1921, in the city of Okmulgee, Okla., and since the last named date the offices of the Black Petroleum Corporation have been transferred and have ever since been at 329 Broadway, New York. That the president, officers, directors and persons having the actual management and control of the business affairs of the Black Petroleum Corporation since July 27, 1921, are the officers, directors, and persons having actual control of the affairs of the Noco Petroleum Company, and in truth and in fact the Black Petroleum Corporation has been under the absolute control of the Noco Petroleum Company since July 27, 1921. Plaintiff further alleges the sale and transfer of the majority of the stock issued by the Black Petroleum Corporation to a competitive corporation, to wit, the Noco Petroleum Company, was in violation of section 41, art. 9, of the Constitution of Oklahoma, and of section 8233, Rev. Laws 1910, and the sale thereof was illegal, null, and void, that the officers, directors, and persons who have been elected or appointed to have charge of the affairs and management of the business of the Black Petroleum Corporation since July 27, 1921, are the men who were elected or appointed by the Noco Petroleum Company, as the holder and owner of the said 982,000 shares of the stock of the Black Petroleum Company, and therefore all the acts of the said officers are null and void, and are in violation of the Constitution and laws of the state of Oklahoma. Plaintiff further alleges the financial statement issued to the minority stock of the Black Petroleum Corporation shows a deficit or net loss to the corporation in the sum of $ 165,958.14, and such deficit was caused by the sale to the Black Petroleum Corporation of cheap and worthless oil and gas mining leases far removed from production at prices greatly in excess of their actual value, and greatly in excess of the cost or price at which the officers and managers purchased the same; that the Black Petroleum Corporation has never paid any dividends and is insolvent; that it is being operated by its officers, they being the officers of the Noco Petroleum Company, solely for the benefit of the Noco Petroleum Company so that any losses sustained by the Noco Petroleum Company can be charged to the Black Petroleum Corporation, and any profits made by the Black Petroleum Corporation can be taken by the Noco Petroleum Company, and unless a receiver is appointed to take charge of the affairs and assets of the Black Petroleum Corporation and liquidate the same as an insolvent corporation under authority of the court, plaintiff and other minority stock holders of the Black Petroleum Corporation will suffer great and irreparable injury, damage, and loss.

¶2 Plaintiff then prays for a receiver to take charge of all the assets, books, and business of the Black Petroleum Corporation; that the Noco Petroleum Company be required to produce the books and accounts and assets of the Black Petroleum Corporation, and make an accounting of all the assets of the Black Petroleum Corporation coming under its control since July 27, 1921, Second, that the court decree the sale of 982,000 shares of the capital stock of the Black Petroleum Corporation by E. R. Black to the Noco Petroleum Company to be illegal, null, and void, and in violation of the Constitution and laws of the state of Oklahoma, and that by reason thereof the election and appointment of the officers, directors, and managers of the Black Petroleum Corporation since July 27, 1921, was illegal, null and void, and the salaries and expenses paid to such officers be declared a violation of law, and that a complete accounting be made. Plaintiff in his third prayer asks that the Black Petroleum Corporation be decreed insolvent, and for liquidation, embodying therein an alternative prayer that in the event the Black Petroleum Corporation cannot under the laws of this state be declared insolvent and liquidated and wound up, that it be declared insolvent and the receiver be authorized and directed to continue in charge of the assets and affairs of the Black Petroleum Corporation until such time as proper steps can be taken in the manner provided by law for the liquidation and winding up the affairs of the Black Petroleum Corporation, as an insolvent corporation.

¶3 The defendants appeared specially and filed their, "special appearance and objection to jurisdiction" in the following words:

"Comes now the Black Petroleum Corporation and appear specifically and for the purpose of this motion only and object to the jurisdiction of this court and move the court to dismiss this action for the reason that this court has no jurisdiction of the subject matter of this action."

¶4 From the judgments of the court sustaining the plea to the jurisdiction of the court of the subject-matter of the action, the plaintiff appeals, and assigns as error the court's refusal to appoint a receiver, and the dismissal of plaintiff's suit. Plaintiff contends there is no such pleading known to our procedure as is filed by defendants; that the only pleadings allowed under the statute are, first, the petition; second, answer or demurrer by defendant; third, demurrer or reply by plaintiff; and, fourth, demurrer by defendant to the reply of the plaintiff. The plaintiff's contention is without merit, as the motion of the defendants directly raises the question of the jurisdiction of the court over the subject-matter of the action, and the question can be raised at any stage of the proceedings, either by motion, or the court may, of its own motion, or whenever its attention is called to the fact, refuse to proceed further and dismiss the case. Model Clothing Company v. First Nat. Bank of Cushing, 61 Okla. 88, 160 P. 450. It is the bounden duty of the court to examine into its jurisdiction, whether raised by any party or not, and sua sponte to determine its own jurisdiction, Howard et al. v. Arkansas et ux., 59 Okla. 206, 158 P. 437. The fundamental question of jurisdiction, first of the appellate court, and then of the court from which the record comes, presents itself on every writ of error or appeal. and must be answered by the court, whether propounded by counsel or not. Defiance Water Company v. Defiance, 191 U.S. 184. 24 S. Ct. 63, 48 L. Ed. 140; Cutler v. Rae, 48 U.S. 729, 7 How. 729, 8 How. 615, Appx., 12 Law Ed. 890, 1221; M'Kinney v. Carroll, 12 Pet. 66, 9 L. Ed. 1002: Perez v. Fernandez, 202 U.S. 80, 26 S. Ct. 561, 50 L. Ed. 942; Mansfield C. & L. M. R. Co v. Swan, 111 U.S. 379, 4 S. Ct. 510, 28 L. Ed. 462; Bors v. Preston, 111 U.S. 252 4 S. Ct. 407, 28 L. Ed. 419; Thomas v. Ohio St. University, 195 U.S. 207, 25 S. Ct. 24, 49 L. Ed. 160; Myers v. Berry, 3 Okla. 612, 41 P. 580; Cummings v. Mc Dermid, 4 Okla. 272, 44 P. 276; Beach v. Beach, 4 Okla. 359, 399, 46 P. 514; Parlin v. Schram, 4 Okla. 651, 46 P. 490; Parker v. Lynch et al., 7 Okla. 650, 59 P. 1082: Rhyne v. Manchester Assurance Co., 14 Okla....