Jennings v. Idaho Ry., Light & Power Co.

• Decision Date: 20 January 1915
• Citation: 146 P. 101,26 Idaho 703
• Court: Idaho Supreme Court
• Parties: E. H. JENNINGS, Respondent, v. IDAHO RAILWAY, LIGHT & POWER COMPANY et al., Appellants

146 P. 101

26 Idaho 703

E. H. JENNINGS, Respondent, v. IDAHO RAILWAY, LIGHT & POWER COMPANY et al., Appellants

Supreme Court of Idaho

January 20, 1915

FOREIGN CORPORATIONS-NONRESIDENT ALTHOUGH COMPLYING WITH LAWS OF STATE-NOT EXEMPT FROM ATTACHMENT-IMMATERIAL ASSIGNMENTS OF ERROR WILL NOT BE CONSIDERED AND DETERMINED.

1. Under sec. 2792, Rev. Codes, which provides "That foreign corporations complying with the provisions of this section shall have all the rights and privileges of like domestic corporations, including the right to exercise the right of eminent domain, and shall be subject to the laws of the state applicable to like domestic corporations," such corporation is not a citizen or resident of this state within the meaning of the foreign attachment laws, and is not exempt from attachment as a nonresident.

2. A corporation organized under the laws of a foreign jurisdiction, although engaged in business in this state and having complied with the constitution and all the laws of this state affecting foreign corporations, is a nonresident and subject to attachment as such.

3. Where counsel for respective parties agree that should the conclusion of the court be adverse to the contention of appellant upon one question, the remaining objections assigned become immaterial, and when it appears from the record that a consideration of said questions is not necessary to a final determination of the cause under consideration, the same will not be decided by the court.

APPEAL from the District Court of the Third Judicial District, in and for Ada County. Hon. Chas. P. McCarthy, Judge.

Action to recover on a promissory note. Attachment issued and the court refused to discharge the attachment. Affirmed.

Order of the district court affirmed. Costs awarded to respondent.

Cavanah Blake & MacLane, for Appellants.

No attachment can be issued against a domestic corporation in an action on a secured debt, and, therefore, if foreign corporations have the same rights and privileges, and are subject to like laws, no attachment can be issued against them in such cases. (6 Thompson on Corporations, ed. 1895, p 6420, sec. 8060; Farnsworth v. Terre Haute etc. Ry Co., 29 Mo. 75; Martin v. Mobile etc. R. Co., 7 Bush (Ky.), 116; Burr v. Co-operative Construction Co., 162 Ill.App. 512; Hackettstown Bank v Mitchell, 28 N.J.L. 516.)

Nonliability to attachment is a right or privilege of domestic corporations, and it is further certain that the attachment law is one of the laws of the state applicable to domestic corporations. If the statute is to be given meaning and effect, the construction here suggested would seem to be the only possible one. Furthermore, this construction is in harmony with the spirit of the attachment laws against nonresidents, the purpose of which is to enable a citizen of the state to acquire jurisdiction against a nonresident defendant to the extent of property of the nonresident within the state. The attachment is allowed in order to compel the defendant to come forth and allow his indebtedness to be litigated. (Blair v. Winston, 84 Md. 356, 35 A. 1101; Herbert v. Herbert, 49 N.J. Eq. 70, 22 A. 789; Munroe v. Williams, 37 S.C. 81, 16 S.E. 533, 19 L. R. A. 665.)

Richards & Haga and McKeen F. Morrow, for Respondent.

The authorities are uniform that the domicile, residence and citizenship of a corporation are in the state where it is created, and that where the corporation is not domesticated, that is, reincorporated in other states where it does business, it can have but one domicile, one residence, and one citizenship, and that is in the state issuing its charter and maintaining supervision and control over the corporation. (Cowardin v. Universal Life Ins. Co., 32 Gratt. (Va.) 445; Barbour v. Paige Hotel Co., 2 App. Cas. (D. C.) 174.)

"A corporation chartered by a foreign state is a foreign corporation and is liable to attachment as a nonresident debtor, although it may have an office and do business in the state in which the attachment is issued." (Boyer v. Northern Pacific Ry. Co., 8 Idaho 74, 66 P. 826, 70 L. R. A. 691; Shinn on Attachments, sec. 105; New York Life Ins. Co. v. Pike, 51 Colo. 238, 117 P. 899; 5 Thompson on Foreign Corporations, 2d ed., sec. 6629; Cook on Corporations, 7th ed., sec. 1.)

The domicile, residence and citizenship of a corporation are in the state where it is created. (Beale on Foreign Corporations, secs. 111, 113, 211; Waechter v. Atchison, T. & S. F. Ry. Co., 10 Cal.App. 70, 101 P. 41; Voss v. Evans Marble Co., 101 Ill.App. 373.)

Appellants should not be heard to contend that respondent holds security and cannot therefore attach the railway company's property. The evidence is uncontradicted that the appellant railway company has done everything in its power to destroy the security which it pledged with respondent. The lien must be a lien of a fixed, determinate character, capable of being enforced with certainty, and depending on no conditions. (Porter v. Brooks, 35 Cal. 199; Watson v. Loewenberg, 34 Ore. 323, 56 P. 289; Bowman v. Wade, 54 Ore. 347, 103 P. 72.)

BUDGE, J. Sullivan, C. J., and Morgan, J., concur.

OPINION

BUDGE, J.

On the 6th of November, 1911, the Idaho Railway, Light & Power Company, a corporation organized under the laws of the state of Maine, made, executed and delivered its promissory note to one E. H. Jennings for $ 180,000, payable two years after date, bearing interest at the rate of six per cent per annum from July 6, 1912. In order to secure the payment of the above obligation, the Idaho Railway, Light & Power Company deposited with the said Jennings as collateral security 1,200 shares of the preferred stock and 2,884 shares of the common stock of the Boise Railroad Company, Ltd. After the loan had been negotiated and the stock of the Boise Railroad Company pledged, as aforesaid, the Idaho Railway, Light & Power Company, being then the owner of all of the stock of the Boise Railroad Company, elected its employees or officers as directors and officers of the Boise Railroad Company, and immediately thereafter caused said officers to convey by proper conveyance all of the property, assets, franchises and privileges of the Boise Railroad Company to the Idaho Railway, Light & Power Company. This being done, the necessity for the existence of the Boise Railroad Company as a corporation ceased, and thereafter the annual license tax of said company was not paid to the state by either the Boise Railroad Company or the Idaho Railway, Light & Power Company, and on the 1st of December, 1913, the charter of the said Boise Railroad Company was forfeited to the state.

At the date of the commencement of this action in the trial court, the capital stock of the Boise Railroad Company, which had theretofore been pledged as collateral security for the payment of the respondent's note, was the stock of a corporation which had forfeited its charter and conveyed all of its physical properties, rights, assets and franchises to the appellant corporation herein. The Idaho Railway, Light & Power Company, by its officers, executed a mortgage or deed of trust to the Guaranty Trust Company of New York, securing an issue of bonds aggregating thirty millions of dollars, which said mortgage or deed of trust covered all the property then owned by the Idaho Railway, Light & Power Company, or which it might thereafter acquire, and under which bonds of said company of the par value of about $ 9,095,000 had been actually issued. The property transferred to the Idaho Railway, Light & Power Company, which had previously constituted the security as represented by the stock pledged to Jennings, was now claimed by the Idaho Railway, Light & Power Company as owner, and by the Guaranty Trust Company of New York as trustee under the thirty million dollar mortgage above referred to.

On December 23, 1913, a receiver for the Idaho Railway, Light & Power Company was duly appointed by an order of the United States court for the district of Idaho, southern division.

The answer of the appellant admits the indebtedness of $ 180,000 to the respondent, and also admits the appointment of a receiver by an order of the United States district court, and the insolvency of the appellant corporation.

This is a brief statement of what appears to be the facts in this case:

At the time of the issuance of summons in this action, the respondent, upon affidavit and sufficient bond, secured a writ of attachment and caused to be attached all of the properties, assets and franchises of the Idaho Railway, Light & Power Company. On May 28, 1914, appellant by its counsel moved in the trial court to discharge the attachment theretofore issued, for the following reasons, to wit:

1. That the affidavit of attachment shows upon its face that the debt upon which action is brought was secured by pledge of stock of the Boise Railroad Company, and fails to show that such security has become valueless.

2. That the defendant Idaho Railway, Light & Power Company is not a nonresident of the state of Idaho within the meaning of the attachment law, but is a foreign corporation that has complied with the constitution and all the laws of Idaho respecting foreign corporations, and as such, by the terms of such statutes is entitled to all the rights and privileges, and subject to the laws applicable to domestic corporations.

3. That the undertaking for attachment is insufficient.

It was conceded upon the argument of this cause that the appellant corporation had fully complied with the constitution and laws of this state respecting foreign corporations. That being true, the appellant insists that it is exempt from attachment under the laws of this state authorizing the attachment of the property of nonresidents.

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