In re Fryeburg Water Co.

• Decision Date: 07 January 1919
• Docket Number: No. 1533.,1533.
• Citation: 106 A. 225
• Parties: In re FRYEBURG WATER CO.
• Court: New Hampshire Supreme Court

106 A. 225

In re FRYEBURG WATER CO.

No. 1533.

Supreme Court of New Hampshire.

Jan. 7, 1919.

Transferred from Public Service Commission.

Petition by the Fryeburg Water Company to the Public Service Commission for approval of stock dividends. The commission transferred the case. Case discharged.

Case transferred from the Public Service Commission under Laws 1917, c. 205. The Fryeburg Water Company is a public utility incorporated under the laws of Maine and furnishes water to the public in both Maine and New Hampshire. It has accumulated from its earnings a surplus of $8,000 which it has used in improving its plant in both states. Under the laws of Maine, it has been authorized to issue a stock dividend of $8,000 to take up the surplus so invested. This proceeding is a petition to the Public Service Commission for its approval of so much of the stock dividend as is represented by investment in the company's plant property in this state. This commission submits the following questions for determination: (1) Whether its approval is necessary to validate the stock dividend referred to; and (2) whether, if such approval is necessary, it has authority to approve a stock dividend.

WALKER, J. The first question presented by the case is whether the Public Service Commission of this state has the power or jurisdiction to approve the proposed issue of additional stock by the Fryeburg Water Company, a corporation organized under the laws of the state of Maine. It is a well-recognized principle of law that the courts of one state have no visitorial power over corporations of another state and no jurisdiction to determine questions relating to their internal affairs. Clark, Corp. 635. Whether the object of a proceeding is intrinsically to regulate the internal affairs of a foreign corporation or whether it is merely to enforce a contractual obligation or to prevent a fraud (Westminster National Bank v. Electrical Works, 73 N. H. 465, 62 Atl. 971, 3 L. R. A. [N. S.] 551, 111 Am. St. Rep. 637), it is not always easy to determine; and the result is that there is some apparent conflict in the authorities. See Kansas, etc., Construction Co. v. Railroad, 135 Mass. 34, 46 Am. Rep. 439; Madden v. Electric Light Co., 181 Pa. 617, 37 Atl. 817, 38 L. R. A. 638; Guilford v. Telegraph Co., 59 Minn. 332, 61 N. W. 324, 50 Am. St. Rep. 407; Harding v. Glucose Co., 182 Ill. 551, 633, 55 N. E. 577, 64 L. R. A. 738, 74 Am. St Rep. 189.

Little doubt, however, can be entertained that the issuing of stock is a corporate act which is regulated and controlled by the laws of the incorporating state, and which, relating to the internal conduct and management of the corporation, is exclusively subject to the local laws. "From the nature of corporate stock, which is created by and under the authority of the state, the right or duty to issue it, like the other attributes of the corporation, is governed by...