Williams v. Green Bay & WR Co.
| Decision Date | 01 August 1944 |
| Citation | 59 F. Supp. 98 |
| Parties | WILLIAMS et al. v. GREEN BAY & W. R. CO. |
| Court | U.S. District Court — Southern District of New York |
Unger & Pollack, of New York City (William F. Unger and Ludwig Mandel, both of New York City, of counsel), for plaintiffs.
Cadwalader, Wickersham & Taft, of New York City (Merrill M. Manning and Walter Bruchhausen, both of New York City, of counsel), for defendant.
The defendant has made two motions. One is to set aside service of the summons and complaint on the ground that the defendant (a Wisconsin corporation) is not doing business in New York. The other is to dismiss the complaint because there is lack of jurisdiction of the subject matter, which concerns the internal affairs of the defendant.
The motions were the last item on the calendar at my recent sitting in the motion part. I was compelled to reserve decision in a considerable number of cases. So much attention was required on those having priority that time now is not available for extensive discussion in the instant case. I must content myself, therefore, with briefly indicating the reasons for my conclusions.
A suit against the defendant similar to this was brought in the Supreme Court, Kings County, New York, the short title of which is Sperling v. McGee, ___ Misc. ___, 49 N.Y.S.2d 477. The attorneys for the plaintiffs in Sperling v. McGee do not represent the plaintiffs in the present case (originally brought in the Supreme Court, New York County, and removed to this court).
The identical question raised by the pending first motion was also raised in Sperling v. McGee. The latter was ruled against by Mr. Justice Garvin. A copy of his opinion is annexed as Exhibit A to the affidavit herein of counsel for the plaintiffs verified July 12, 1944.
After study of all the papers bearing on the instant first motion, I concur in the substance of the findings of facts set out in the opinion of Mr. Justice Garvin. I concur also in his conclusion that the defendant "is present in the state;" that is, that in the sense of the applicable court decisions the defendant is and for some time past continuously has been doing business in New York. Pomeroy v. Hocking Valley Railway Co., 218 N.Y. 530, 533-536, 113 N.E. 504, and Tauza v. Susquehanna Coal Co., 220 N.Y. 259, 266, 115 N.E. 915. Cf. Frene v. Louisville Cement Co., 77 U.S. App.D.C. 129, 134 F.2d 511, 515-518.
The affidavits in this case add a good deal to the facts as summarized by Mr. Justice Garvin; but I do not think they materially alter the pertinent features of the situation as it stood when Sperling v. McGee was before him.
Section 229 of the New York Civil Practice Act prescribes how service in this State of a summons shall be made on a foreign corporation and designates those to whom a copy shall be delivered in order to effect the service. Among the individuals on whom subdivision 1 authorizes such service are an assistant treasurer and an assistant secretary of the corporation. Federal Rules of Civil Procedure, rule 4(d) (3) and (7), 28 U.S.C.A. following section 723c, provides that service on a foreign corporation shall be by delivering a copy of the summons and complaint, among others, to an officer "in the manner prescribed by the law of the state in which the service is made." In this case the service was made in that way in New York on an assistant treasurer, who was as well an assistant secretary, of the defendant.
In my view the service was good. Eddy v. Lafayette, 163 U.S. 456, 464, 16 S.Ct. 1082, 41 L.Ed. 225. Cf. Jacobowitz v. Thomson, 2 Cir., 141 F.2d 72, 74, 76. In consequence I think the first motion should be denied.
We turn now to the question whether there is, or should be exercised, jurisdiction of the subject matter.
The defendant has issued and there are outstanding (1) common stock, (2) class A debentures and (3) class B debentures. The holders of the first and second are entitled to payment of annual installments of 5% of their face prior to any payments to holders of the third.
As the plaintiffs assert, in the complaint (paragraph 6), by the terms of the defendant's articles of incorporation and of the class B debentures, the holders thereof are entitled "to receive in lieu of interest thereon any net earnings of the railroad and property in each year remaining after payment of five per cent upon the said Class A debentures and the said stock." In addition the complaint (paragraph 6) alleges that the articles of incorporation provide that "Such surplus net earnings, if any, to...
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Williams v. Green Bay Co
...was concerned with the internal affairs of a foreign corporation. The District Court denied the first motion, but granted the second. 59 F.Supp. 98. On appeal the Circuit Court of Appeals affirmed by a divided vote, holding that the District Court did not abuse its discretion in basing its ......
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... ... to cases of relief which calls for "such detailed and continuing supervision that the matter could be more efficiently handled nearer home." Williams v. Green Bay & Western R. Co., 66 S.Ct. 284, 287, and see Frank, J., dissenting below, 2 Cir., 147 F.2d 777, 779. Here, however, we have the question ... ...
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