Hyde v. Scott

75 Misc. 487, 133 N.Y.S. 904
CourtNew York Supreme Court
DecidedFebruary 15, 1912
StatusPublished
Cited by2 cases

This text of 75 Misc. 487 (Hyde v. Scott) is published on Counsel Stack Legal Research, covering New York Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hyde v. Scott, 75 Misc. 487, 133 N.Y.S. 904 (N.Y. Super. Ct. 1912).

Opinion

Seabuby, J.

Two motions are now before the court. • One motion is made to compel J ames McNaught to answer certain interrogatories under a subpoena, and the other motion is made by McNaught to vacate the subpoena. The Great Northern Construction Company, on March 22, 1899, entered into a contract with the Great Northern railway of Canada to construct and equip a portion of the line of the railway company in- the Provinces of Ontario and Quebec, and at the same time entered into a contract with á copart[489]*489nership doing business under the name of ¡Ross, Barry & McRae, under which contract the copartnership agreed to perform all the work of constructing the road pursuant to the contract between the Great Northern Construction Company and the railway, company. A further contract between the Great Northern Construction Company and Ross, Barry & McRae was' entered into on October 22, 1911. On October 16, 1903, Ross, Barry & McRae instituted a suit in the Superior Court of Lower Canada, Province of Quebec, District of Montreal, against the Great Northern Construction Company to recover certain moneys alleged to be due to them under their contracts. During the pendency of that action, Ross, Barry & McRae, on October 17, 1904, filed a petition in the Superior Court of "Lower Canada, Province of Quebec, District of Montreal, to wind up and dissolve the Great Northern Construction Company under the Canadian Winding-Up Act. In that proceeding the officers of the Great Northern Construction Company were served by publication. In that liquidation proceeding and under the act referred to a winding-up order was made appointing John Hyde liquidator of the Great Northern Construction Company. This order acted as a stay of the action of Ross, Barry & McRae against the Great Northern Construction Company. The action in which the present motions are made was brought by John Hyde in his quality of liquidator of the Great Northern Construction Company under the order of the Canadian court as aforesaid against the defendant Scott, who is alleged to be a stockholder of the Great Northern Construction Company, to recover certain bonds alleged to have been unlawfully distributed among the shareholders of said company in order that they may be applied in satisfaction of the claims of Ross,- Barry & McRae against said company. A commission upon closed interrogatories was issued in this action to certain commissioners named therein and within this. jurisdiction. • It was to obtain the testimony of McNaught before these commissioners that the present subpoena was issued. McNaught was sworn as a witness under the subpoena and refused to answer the interrogatories pro[490]*490pounded to him and refused to producé the books and papers of the Great Northern Construction Company. The disposition of the motion to direct McN aught to answer and to punish him for contempt for his refusal so to do must follow the determination of the motion of McNaught to vacate the subpoena. Several questions of importance are raised by this motion and several grounds upon which it is claimed .the subpoena should have been vacated are urged. These grounds it is now necessary to consider. First. It 'is urged “ that the Canadian court had no jurisdiction in law or in fact to wind up-the Great Northern Construction Company, a West Virginia corporation, in liquidation proceedings, and its orcle? appointing Hyde liquidator is a nullity.” At the outset it should be appreciated that the liquidation proceeding in Canada does not attempt to dissolve or to liquidate the Great Northern Construction Company. The purpose of that proceeding is merely to wind up thé affairs'of that company in so far as they are within the Canadian jurisdiction. No extra-territorial effect is claimed,- so far'as the corporate existence, assets or property of the Great Northern Construction Company is concerned. The liquidation proceeding, is brought under section 3 of chapter 129 of the Revised Statutes of Canada. This section was enacted in 1886, and specifies the incorporated trading companies to which the act applies, and provides that it shall be applicable to such companies “ doing business in Canada, wheresoever incorporated.” The clause providing that the act shall apply to companies doing business in Canada wheresoever incorporated was an amendment added to section 3 of the Winding-Hp Act by 52 Viet., chapter 32. That there is no conflict between the original act and the statute amendatory thereto has been squarely held in Ontario Forge. & Belt Co., Lim., 25 Ontario Rep. 407, where the court said: “ There is no clashing between section 3 of the Winding-Hp Act, R. S. C., chapter 129, and section 3 of the Winding-Hp Amended Act, 52 Viet., chapter 32; the. latter act provides for the voluntary winding up of companies falling within its provisions, and not for their compulsory liquidation, which is provided for by the former. A company [491]*491incorporated under the Act of Province of Ontario and carrying on business' in Ontario is £ doing business in Canada ’ Within the meaning of .section 3 of the original act.” The right of Hyde as liquidator to maintain this action in which this commission was issued was upheld in the Superior Court of Lower Canada and by the Court of King’s Bench of Montreal. ■ See opinions submitted on this motion. That court also passed upon the question of the jurisdiction of the Canadian court to appoint the liquidator, and the right of the liquidator to institute this action. It is true that the adjudication of a foreign court upon the question of its jurisdiction is never conclusive upon a court of another jurisdiction. Unless the foreign court in fact had jurisdiction of the person and subject-matter its judgment in whatever form it may be expressed is a nullity. It is, therefore, necessary for us to determine, apart from the adjudication of the Canadian courts, as to the fact of jurisdiction. I think there can be no doubt of the jurisdiction of the Canadian courts of the subject-matter. As pointed out above, the liquidation proceeding contemplates reaching only such property of the West Virginia corporation as is within the jurisdiction of the Canadian courts. The property to be affected being within the territorial jurisdiction of the court, jurisdiction of the person may be obtained by service by publication. The fact that the Great Northern Construction Company owes its existence to the State of West Virginia and was incorporated under the laws of that State does not preclude it from owning property in other jurisdictions. It is equally clear that its right to do business in a * foreign State and the conditions upon which it may do busi- ’ ness in such a foreign jurisdiction are subject to the laws of that jurisdiction. The Canadian courts do not assume to forfeit the corporate life of the Great Northern Construction Company. They merely assume to subject its property within their jurisdiction to the law of that jurisdiction. That such a regulation is within its right, cannot be questioned. The claim that the Great Northern Construction Company had no property in Canada and was not “ doing business ” there is not supported by the proof. It appears from the [492]*492papers presented upon this motion that the property, in the form of bonds which are sought to be reached in this action,' is in the possession of the defendant, who is a resident of Canada; It also appears that the Great Northern Construe-, tion Company made a contract to built a railroad in Canada and had a place of business in Canada, and that although they have since withdrawn their office from that jurisdiction they-left unpaid obligations behind them.

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Bluebook (online)
75 Misc. 487, 133 N.Y.S. 904, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hyde-v-scott-nysupct-1912.