Kelley v. American Sugar Ref. Co.

• Decision Date: 29 May 1942
• Citation: 42 N.E.2d 592,311 Mass. 617
• Parties: KELLEY v. AMERICAN SUGAR REFINING CO.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

311 Mass. 617

42 N.E.2d 592

KELLEY

v.AMERICAN SUGAR REFINING CO.

Supreme Judicial Court of Massachusetts, Suffolk.

May 29, 1942.

Action by Patrick Henry Kelley against the American Sugar Refining Company, involving the validity of an attempted extension of the life of the company.From rulings, refusals to rule and orders for decrees, and interlocutory decrees and final decree, the plaintiff appeals and brings exceptions.

Appeals from rulings, refusals to rule and orders for decrees dismissed, exceptions overruled, interlocutory decrees and final decree affirmed.Appeal from Superior Court, Suffolk County; Goldberg and Fosdick, judges.

Before FIELD, C. J., and DONAHUE, QUA, DOLAN, and RONAN, JJ.

J. L. Hall, and R. Wait, both of Boston, for defendant.

P. H. Kelley, of Boston, pro se.

QUA, Justice.

The gist of the bill in this case is that the plaintiff, a resident of Boston in this Commonwealth, owns 200 shares of the common stock of the defendant out of a total of 900,000 shares of preferred and common; that the defendant operates a sugar refinery in Boston; that it was incorporated in New Jersey in 1891, with a corporate life limited to fifty years, which expired in January, 1941; that in November, 1940, the defendant held a stockholders' meeting, and by more than a two-thirds majority of each class of stock there was passed a vote purporting to authorize an extension of the defendant's corporate existence for a second period of fifty years, ending in 1991, and to authorize an amendment to that effect to the original certificate of incorporation; that the plaintiff attended the meeting and voted against the change; that, as the result of various statutes and decisions of the State of New Jersey from the ‘Corporate Act of 1875,’Revision 1877, p. 175, under which it is alleged the defendant was chartered, down to the ‘Revised Statutes 1937’, the attempted extension of the life of the corporation was invalid as against a protesting stockholder; and that the plaintiff's rights as a stockholder were fixed by the terms of the original incorporation, which became a contract binding upon the defendant that could not be affected by subsequent legislation without the plaintiff's consent.He prays that the defendant be required to accept a surrender of his certificates of stock and to pay him the value of the original investment and accrued profits represented by the certificates as of the expiration of the original fifty-year period.The bill contains an elaborate exposition of the law of New Jersey, practically in the form of a brief, occupying about thirteen pages of the printed record.

An inspection of the bill shows clearly that the issues presented involve the internal structure of the defendant and its relations to its stockholders, if not its existence as a corporation.The bill involves the questions whether the extension was valid, whether stockholders who voted against it are still stockholders, and if they are not whether they have now become creditors and what their rights are.If the plaintiff's contention should be sustained, questions as to liquidation or as to methods of ascertaining liquidation values would become involved.All these problems are to be solved, not primarily by the application of principles of the common law or of general equity jurisprudence, but with special reference to the statute law of New Jersey and its history, development, and construction by the courts of New Jersey.Such questions ought to be decided authoritatively by the courts most familiar with the particular problems and in the best position to solve them correctly-the courts of the State of incorporation.They ought not to be decided, with possibly inconsistent results, by the courts of each different State in which it may be possible to obtain service upon the defendant.There is nothing to suggest that the plaintiff cannot secure in the courts of New Jersey a full and adequate investigation of his claims and complete vindication of any rights he may have.The case belongs to a class of cases concerning the internal affairs and the rights of stockholders of foreign corporations as to which it is settled that a court may in its sound discretion refuse to entertain jurisdiction.¹In Electric Welding Co., Ltd., v. Prince, 195 Mass. 242, at page 256, 81 N.E. 306, at page 310, this court said, ‘the question whether as between the company and a shareholder a person is or is not a shareholder is a question of law so peculiarily to be decided by the laws of the country by which the company is incorporated that ordinarily the courts of this state will not entertain jurisdiction of a case involving that question.’The court below rightly declined to hear the case and rightly dismissed the bill without prejudice to any rights of the plaintiff in respect to the merits of his claim.

The plaintiff insists that the defendant could not properly raise the question of Forum non conveniens by means of its motion ‘that the court decline jurisdiction.’In the Superior Courtthe plaintiff attacked the motion as not in such form that it could properly be treated as a demurrer, plea, or answer, and he appealed from the allowance of the motion and from the refusal of the court to expunge it and to order the defendant to answer to the bill.If the motion to dismiss was not a strictly proper method of raising this issue, Rothstein v. Commissioner of Banks, 258 Mass. 196, 155 N.E. 7;E. S. Parks Shellac...