Opinion
Decided January 3d 1941.
1. By service of subpoena upon the defendant company, a New Jersey corporation, Chancery obtained such jurisdiction of the res — the property of the corporation — as to enable it to inquire into and determine complainant minority stockholders' rights in the property. The individual defendants, as stockholders, are proper parties to the proceedings and if brought into court by reasonable notice, will be bound by the adjudication of complainants' rights in the res.
2. Chancery acquired jurisdiction over the individual non-resident defendant stockholders through publication and mailing.
On appeal from an order of the Court of Chancery advised by Vice-Chancellor Bigelow, who filed the following opinion:
"Complainants are minority stockholders of defendant Colt Bros., Inc., a New Jersey corporation. The other defendants are the majority stockholders, and claim to be the sole stockholders. They have failed and refused to call or hold stockholders' or directors' meetings for the last two years, or to inform complainants about its profits and transactions. They refuse to allow complainants to inspect the books of the company which indeed they have removed to California.
"The bill prays a discovery of the transactions, profits and present condition of the corporation; that the books be brought back to New Jersey, and complainants be permitted to inspect them; that an account be taken and defendants be decreed to pay whatever be found owing complainants.
"One of the individual defendants resides in Virginia, another in California. The court, last December, pursuant to R.S. 2:29-29, made an order to bring them into court by publication and mailing. This was done. Now these two defendants, by leave of the court, appear specially and move to vacate the order of publication and to quash the substituted service of process, on the ground that the court can acquire jurisdiction over them only by service of process within the state.
"The defendant Colt Bros., Inc., is domiciled in the State of New Jersey and the assets of the company are deemed to be within this state. By service of subpoena upon the corporation, the court obtained such jurisdiction of the res, namely, the property of the corporation, as will enable the court to inquire into and determine complainants' rights in the property. To this proceeding, the individual defendants as stockholders are proper parties. Brought into court by reasonable notice, they will be bound by the adjudication of complainants' rights in the res. Andrews v. Guayaquil and Q.R. Co., 69 N.J. Eq. 211; 71 N.J. Eq. 769; Sohege v. Singer Manufacturing Co., 73 N.J. Eq. 567; Amparo Mining Co. v. Fidelity Trust Co., 74 N.J. Eq. 197; 75 N.J. Eq. 555; Hartman v. Gindorff, 125 N.J. Eq. 325; Jellinik v. Huron Copper Mining Co., 177 U.S. 1; 20 S.Ct. 559; Holmes v. Camp (N.Y.) 114 N.E. Rep. 841. Whether in the absence of personal service upon them within this state, or of their voluntary appearance in the suit, the court could made a decree in personam against them, is another question.
"The motion to vacate the order of publication and to set aside the process is denied. In accordance with the condition, upon which the defendants were given leave to appear specially, their general appearance in the cause will be entered and they will be given twenty days to answer the bill or make such motion addressed to the bill as they may deem advisable."
Mr. J. Branton Wallace, for the appellants.
Mr. Frederick P. Schenck, for the respondents.
The order appealed from will be affirmed, for the reasons stated in the opinion delivered by Vice-Chancellor Bigelow in the Court of Chancery. For affirmance — THE CHIEF-JUSTICE, CASE, BODINE, DONGES, HEHER, PERSKIE, PORTER, DEAR, WELLS, WOLFSKEIL, RAFFERTY, HAGUE, JJ. 12.
For reversal — None.