Lohman v. Kansas City Southern Ry. Co.

• Decision Date: 25 November 1930
• Citation: 33 S.W.2d 112,326 Mo. 819
• Parties: Ira H. Lohman, Ancillary Administrator in Missouri of Estate of Carl F. W. G. Upmann, Appellant, v. Kansas City Southern Railway Company, A Missouri Corporation
• Court: Missouri Supreme Court

33 S.W.2d 112

326 Mo. 819

Ira H. Lohman, Ancillary Administrator in Missouri of Estate of Carl F. W. G. Upmann, Appellant, v. Kansas City Southern Railway Company, A Missouri Corporation

Supreme Court of Missouri

November 25, 1930

Appeal from Jackson Circuit Court; Hon. Samuel A. Dew Judge.

Affirmed.

D W. Peters and Barnett & Hayes for appellant.

(1) Shares of stock in a Missouri corporation are personal property and have their situs in the State of Missouri. It is within the power of the State of Missouri to declare the legal relations between a Missouri corporation and its stockholders. It has declared that the situs of such stock is in Missouri and passes to the Missouri administrator or executor without regard to the residence of the deceased or the location of the certificate. Troll v. Third Natl Bank, 278 Mo. 74; Richardson v. Busch, 198 Mo. 174; Troll v. Third Natl. Bank, 216 S.W. 922; Troll v. Railway Co., 216 S.W. 923; Troll v. Natl. Bank of Commerce, 216 S.W. 923. (2) When courts of different states disagree as to the situs of personal property, and each court attempts to render judgment upon the theory that the situs of the property is within its own jurisdiction, one of the two states must give way to the other by virtue of the full-faith-and-credit clause of the Constitution. Therefore, when such a conflict arises the rule laid down by the Supreme Court of the United States must be followed. It has been decided by the Supreme Court of the United States that it is within the power of a state to declare the situs of shares of stock of a corporation chartered by the state, and that the residence of the owner and the location of the stock certificates are immaterial. Jellenik v. Mining Co., 177 U.S. 1; Chrichton v. Wingfield, 258 U.S. 66; Chase v. Wetzlar, 225 U.S. 79; Baker v. Baker, Eccles & Co., 242 U.S. 394; Doherty v. McDowell, 276 F. 631; Columbia Brewing Co. v. Miller, 281 F. 290; Harvey v. Harvey, 290 F. 653; United Cigarette Match Co. v. Ry. Co., 12 F.2d 634; Hardy v. Tobacco Co., 14 F.2d 170; Rhode Island Hospital Trust Co. v. Doughton, 46 S.Ct. 259; Hammond v. Hastings, 134 U.S. 401; Supreme Council of Royal Arcanum v. Green, 237 U.S. 531; Second Russian Ins. Co. v. Miller, 268 U.S. 552; Modern Woodman of America v. Mixer, 267 U.S. 544. When a personal representative, claiming title to corporate stock under the law of the place of deceased's domicile and the location of the stock certificate, obtains judgment in that state against the claim of the administrator in the state where the corporation was chartered, such judgment is neither res judicata nor entitled to any faith or credit in a subsequent action brought by the administrator in the state where the corporation was chartered. When such a conflict arises the law of the state that chartered the corporation must control. Baker v. Baker, Eccles & Co., 242 U.S. 394. (3) The right of a state to declare the relation between the corporation and its shareholders and the situs of the stock in the corporation is not an undue burden upon interstate commerce. Those relations and that situs must be declared by some law. It is a less burden to have the relation and the situs determined by the one law of the state which chartered the corporation than to have it determined by the forty-nine laws of the forty-eight states and the District of Columbia. The fact that a corporation is engaged in interstate commerce does not give it any special exemptions or special privileges not accorded by the general law. International Harvester Co. v. Kentucky, 234 U.S. 579; State ex rel. Railroad v. Taylor, 298 Mo. 474, affirmed (U.S.) 45 S.Ct. 47; State ex rel. Foraker v. Hoffman, 309 Mo. 625, affirmed (U.S.) 47 S.Ct. 485. (4) The Circuit Court of Jackson had no right in this independent proceeding to question the action of the Probate Court of Cole County in appointing plaintiff as administrator. The appointment was valid unless set aside by an action instituted in the Probate Court of Cole County. R. S. 1919, sec. 4; In re Estate of Davidson, 100 Mo.App. 263; Rowden v. Brown, 91 Mo. 429; Johnson v. Beasley, 65 Mo. 250; Cox v. Boyce, 152 Mo. 576; Griesel v. Jones, 123 Mo.App. 45; Troll v. Third National Bank, 278 Mo. 74.

Frank H. Moore, Cyrus Crane, Hugh E. Martin and A. F. Smith for respondent; S. W. Moore of counsel.

(1) The transfer of the stock of the defendant in the State of New York being valid under New York law, and the New York courts having jurisdiction of the property, and the necessary parties, is valid everywhere. (a) Certificates of stock in a corporation are tangible property and have a situs where they are located, for purposes of taxation, administration, attachment and execution. Sec. 202, Surrogate's Court Act, New York; Cummings v. Clark, 282 F. 305; DeGanay v. Lederer, 250 U.S. 381; Frick v. Pennsylvania, 268 U.S. 497; Vidal v. South American Sec. Co., 276 F. 868; New England etc. Co. v. Woodworth, 111 U.S. 138; Beal v. Carpenter, 235 Fed. (C. C. A. 8 Circ.) 273; Black v. Foreman Bros., 218 Fed. (D. C. Ill.) 266; Klein v. Wilson, 7 F.2d 769; 2 Williston on Contracts, 1957; Franz v. Buder, 11 F.2d 859; Norrie v. Lohman, 16 F.2d 355; Fairchild v. Lohman, 13 F.2d 252; Simpson v. Jersey City, etc. Co., 165 N.Y. 193; Cook on Corporations (8 Ed.), sec. 845. (b) Since the executors were in New York, and the defendant had an office there for the transfer of stock, the executors had the right to secure personal service on defendant, and to compel the transfer to themselves of the stock in New York. Lockwood v. U.S. Steel Corp., 209 N.Y. 375; Norrie v. Ry. Co., 7 F.2d 159, 16 F.2d 358. Plaintiff was not a necessary party to the New York proceedings. 24 C. J. 1135, sec. 2714. (c) The doctrine announced by the New York courts is also the doctrine of the Supreme Court of the United States. Direction Der Disconto-Gesellschaft v. U.S. Steel Corp., 300 F. 741, 267 U.S. 22. (d) Shares of stock, being personal property, and subject to purchase and sale within and without the State of Missouri, questions concerning the ownership of such stock are to be determined by the laws of the state where the certificates of stock are owned and held. Direction, etc. v. U.S. Steel Corp., 267 U.S. 28; London, etc. Bank v. Aronstein, 117 F. 601; Guilford v. W. U. Telegraph Co., 59 Minn. 332, 61 N.W. 324; Washington-Alaska Bank v. Dexter etc. Bank, 263 F. 304; Williams v. Gaylord, 186 U.S. 157. States may not, by local law, regulate transitory rights, outside of their own boundaries. Atchison etc. Co. v. Sowers, 213 U.S. 55; Chicago etc. Railroad Co. v. Sturm, 174 U.S. 710. (2) The decisions of this court upon which plaintiff relies are based upon authorities from other jurisdictions, which authorities have been distinguished or explained, and do not now declare the law of those jurisdictions upon this proposition. The plaintiff's contentions are in direct conflict with the general policy of the State of Missouri regarding shares of stock. (a) The State of Missouri has never adopted legislation limiting the right of free disposition of shares of stock in a Missouri corporation. On the contrary, it has expressly provided by statute that such stock shall be personal property. R. S. 1919, sec. 9743; Wilson v. St. Louis etc. Co., 108 Mo. 606; Brinkerhoff etc. Co. v. Home Lumber Co., 118 Mo. 458; Kretzer v. Cole Bros. etc. Co., 193 Mo.App. 99, 181 S.W. 1066; Mitchell v. Newton Co. Bank (Mo. App.), 282 S.W. 732. (b) If this court has ruled that stock in a Missouri corporation can have its situs only in Missouri, such ruling was made, not as evidencing a matter of state policy, but in the belief that the court was following a rule of law general throughout the land. Richardson v. Busch, 198 Mo. 183; Troll v. Third Natl. Bank, 278 Mo. 74; Armour, etc. Co. v. Nat. Bank, 113 Mo. 12; Dean, etc. Co. v. Howell, 162 Mo.App. 100. (3) The authorities upon which the plaintiff relies do not support his contentions. (4) The stock in question having come into the possession of the New York courts, the Missouri courts have no jurisdiction. It is a well recognized rule of law that where a court has acquired jurisdiction over property in dispute, it has a right to retain control and dispose of the entire dispute. 15 C. J. 1134; Merritt v. Am. Steel Barge Co., 79 F. 228; Palmer v. Texas, 212 U.S. 118; Farmers', etc. Co. v. Lake Street, etc. Co., 177 U.S. 59 (5) The proceedings of the New York courts are entitled to full faith and credit under the Constitution of the United States. Tilt v. Kelsey, 207 U.S. 43; Michigan Trust Co. v. Ferry. 228 U.S. 346; Chicago etc. Railroad Co. v. Wiggins Ferry Co., 119 U.S. 622; Brown v. Equitable etc. Co., 112 F. 845; Biddle v. Wilkins, 1 Pet. 686. (6) A compulsory, unnecessary and expensive administration upon the stock of a common carrier engaged in transporting traffic moving in interstate commerce would put an undue burden upon interstate commerce by restricting the sale of the stock of such corporation, and impairing the financial structure of such carrier, in violation of Section 8 of Article I of the Constitution of the United States. Davis v. Farmers' etc. Co., 262 U.S. 312, 317, 67 L.Ed. 996, 999; Atchison etc. Co. v. Wells, 265 U.S. 101, 68 L.Ed. 928; Union Tank Line Co. v. Wright, 249 U.S. 282; Wallace v. Hines. 253 U.S. 66. (7) Under the Missouri law, plaintiff is not entitled to any relief hereunder, inasmuch as there is no occasion for administration in Missouri. Richardson v. Cole, 160 Mo. 372; Troll v. Landgraf, 183 Mo.App. 251; In re Estate of Brinkworth, 268 Mo. 86; Fairchild v. Lohman, 13 F.2d 252; Slater v. Thompson, 255 F. 768; Griswold v. Tire Co., 94 N.J.Eq. 308.

OPINION

Blair, J.

This is an action instituted in the Circuit Court of Jackson County by plai...