Wilson v. Celestial Greetings, Inc.

896 S.W.2d 759, 1995 Mo. App. LEXIS 865, 1995 WL 250994
CourtMissouri Court of Appeals
DecidedMay 2, 1995
DocketNo. WD 49862
StatusPublished
Cited by4 cases

This text of 896 S.W.2d 759 (Wilson v. Celestial Greetings, Inc.) is published on Counsel Stack Legal Research, covering Missouri Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Wilson v. Celestial Greetings, Inc., 896 S.W.2d 759, 1995 Mo. App. LEXIS 865, 1995 WL 250994 (Mo. Ct. App. 1995).

Opinion

PER CURIAM.

This appeal involves a proceeding by a dissenting stockholder in a Delaware corporation for the appraisal of her stock after the merger of the Delaware corporation into a Missouri corporation. The appraisal proceeding was created by Delaware statute. The question is whether the appraisal proceeding may be brought in Missouri, or whether it must be brought in Delaware.

The plaintiff shareholder is Zerelda Wilson, who owned 10 shares of the 40 outstanding shares of stock of Celestial Greetings, Inc. Celestial Greetings, Inc., was in the business of greeting card distribution. Its headquarters was at Versailles, Missouri. The other 30 shares were owned by Copeland’s, Inc., a Missouri corporation. There was a proposal that Celestial Greetings, Inc., be merged into Copeland’s. Zerelda Wilson resisted the merger, but Copeland’s 30 shares were voted for the merger and it was approved.

Zerelda then filed this appraisal proceeding in the Circuit Court of Morgan County, the object of which is to obtain an appraisal of her shares of stock, and judgment against Copeland’s for its appraised value. The appraisal proceeding was one count of a four-count petition, which sought damages from Copeland’s and from Copeland’s shareholders on various claims. This appeal is concerned only with the appraisal proceeding, not with the other three counts. The trial court, on Copeland’s motion, dismissed the appraisal proceeding — leaving the other counts pending — and Zerelda has appealed.

Copeland’s successfully maintained in the trial court that it had no jurisdiction of the appraisal proceeding — that the cause of action created by the Delaware statute was a “local” cause of action, to be brought only in the Delaware Court of Chancery, rather than a “transitory” cause of action, which could be brought in any state where personal jurisdiction of the defendant could be obtained. A transitory cause of action, whether created by statute or common law may be brought in any court of competent jurisdiction where jurisdiction over the defendant can be obtained. State ex rel. U.S. Fidelity & Guar. v. Mehan, 581 S.W.2d 837, 838 (Mo.App.1979). “If the statute provides for a specific remedy, limited and prescribed, and tied to a local court, the cause of action created is local.” Id.

The plaintiff maintains that the appraisal proceeding provided in section 262 of the Delaware corporation code, Del.Code Ann. tit. 8, § 262 (1994), is a transitory cause of action which can be brought in any state where jurisdiction of the corporation can be obtained. She minimizes the significance of section 262’s specification of the “Court of Chancery,” and the requirement for publication of notice in a Wilmington newspaper. She points out that the appraisal procedure is easily adaptable to Missouri legal machinery.

The Delaware corporation code, in section 262 thereof, provides an elaborate procedure for the appraisal of the stock of a dissenting stockholder in the merged corporation.

The corporation laws of the state of incorporation are a salient consideration in selecting a state of incorporation. Delaware is a favorite state for incorporation because of its accommodative corporation code, and because of knowledgeable administrative officials and its courts. Harry G. Henn, Law of Corporations, § 93, at 138-39 (2d ed. 1970). Professor Henn lists the appraisal remedy as a relevant factor in selecting the state of incorporation. Id. at 138.

The meaning of this statute is clear enough. The right of appraisal is given by the very first sentence of this statute. It says:

Any stockholder of a corporation of this State who holds shares of stock on the date of the making of a demand pursuant to subsection (d) of this section with respect to such shares, who continuously [761]*761holds such shares through the effective date of the merger or consolidation, who has otherwise complied with subsection (d) of this section and who has neither voted in favor of the merger or consolidation nor consented thereto in writing pursuant to § 228 of this title shall be entitled to an appraisal by the Court of Chancery of the fair value of his shares of stock under the circumstances described in subsections (b) and (c) of this section.

It is unmistakable that the appraisal right given the dissenting stockholder is the right to have an appraisal “by the Court of Chancery.” The appraisal right so given is not a right that can be enforced (as in the Missouri statute, section 851.455, RSMo 1986), “in any court of competent jurisdiction.”

There is nothing in the rest of the statute that gives any support to the idea that the dissenting shareholder’s right of appraisal is enforceable in any court except the “Court of Chancery.” It is clear the statute contemplates the “Court of Chancery” as the forum of the appraisal proceeding. It refers to the role of the “Register of Chancery,” and requires notice to be published in a newspaper published in the City of Wilmington, Delaware, or (a provision which is emphasized by plaintiff) “such publication as the Court deems advisable.” It provides that the Court’s decree may be enforced “as other decrees in the Court of Chancery may be enforced, whether such surviving or resulting corporation be a corporation of this State or of any state.” Del.Code Ann. tit. 8, § 262(i) (1994).

The meaning of the statute is clear, but is it competent for the State of Delaware to place this restriction upon the enforcement of the appraisal right? Plaintiff says it is not permissible for Delaware to restrict enforcement of the right to its own courts, for the right to appraisal is a transitory cause of action, and a transitory cause of action may not be restricted to the courts of the state which created it. For this proposition, plaintiff cites Husted, v. Missouri Pacific Railway Co., 143 Mo.App. 623, 128 S.W. 282 (1910). Husted was a wrongful death ease, where the accident and death occurred in Kansas, and the question was whether Kansas had restricted the wrongful death claim so that it could be brought only in certain counties in Kansas. As a matter of statutory construction, the Kansas City Court of Appeals held that it was the intent of the statute to confíne enforcement to those Kansas counties only if the case were brought in Kansas; it did not mean to exclude the courts of other states.

All the cases we have examined which hold that a state may not confine to its own courts the enforcement of a right it has created by statute, have involved personal injury cases, or wrongful death cases. Claims for damages for personal injuries and wrongful death are in their nature transitory. As the court pointed out in Tennessee Coal, Iron, & R.R. Co. v. George, 233 U.S. 354, 34 S.Ct. 587, 58 L.Ed. 997 (1914):

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Cite This Page — Counsel Stack

Bluebook (online)
896 S.W.2d 759, 1995 Mo. App. LEXIS 865, 1995 WL 250994, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wilson-v-celestial-greetings-inc-moctapp-1995.