
    GEORGE V. SIMS, Impleaded, Etc., Respondent v. EDWARD L. BONNER, et al., Impleaded, Etc., Appellants.
    
      Equity action—Eemun'er, interlocutory judgment overruling same.
    
    This action was brought by Sims in behalf of himself and other stockholders of the Montana Improvement Company, and he prays for a decree establishing his rights as a stockholder, and declaring void any certificates issued in place of certificates owned and held by him, and for an account, etc.
    
      Held, that the defendants having demurred, substantially, for all present purposes, admit the truth of all the allegations charged, and these sufficiently state a cause of action. The fact that the stock was not registered in Sims’ name does not disable him from maintaining this action. It must be assumed (nothing appearing to the contrary) that the plaintiff is a . resident, and the Code gives jurisdiction in an action by a resident against a foreign corporation for any cause. In cases of fraud, breaches of trust or contract, the jurisdiction of a court of equity is sustained wherever the person of the defendant is found, although property beyond the jurisdiction is affected by the judgment.
    Before McAdam and Gildersleeve, JJ.
    
      Decided December 15, 1891.
    Appeal from interlocutory judgment of the special term overruling a demurrer to the complaint.
    
      Charles W Gould, attorney, and W. Allaire Shortt of counsel, for appellants, argued :
    I.—The interlocutory judgment appealed from should he reversed, and the complaint of the plaintiff G. V. Sims dismissed for the misjoinder of parties plaintiff. (1.) The prayer of each complaint is : That the rights and interests of the plaintiff George Y. Sims (or plaintiff Gulliver), as a stockholder in the Montana Improvement Company, Limited, and of all other stockholders similarly situated, be established and decreed; that the alleged issue by that company of certain shares of stock be declared fraudulent and canceled; that there be an accounting of the profits, etc., of the defendant company since February, 1886, and a proportionate payment thereof to plaintiff ; that the defendants be enjoined from concealing or transferring the company’s books, records or property until the final decree of the court; and that the plaintiffs have such other relief as to the court may seem just, and the costs of action. (2) Ellen T. Sims in neither complaint alleges that she is a stockholder of the Montana Improvement Company, Limited; or that stock of that company is held in trust for her; or that she has been by the defendants or any of them fraudulently deprived of certificates of stock, so as to enable her to pray for an accounting, the avoidance of certificates of stock, an establishment by decree of her position as a stockholder, or an injunction against the company’s officers, dr any of the equitable remedies prayed for in either complaint. (3) The second complaint alleges that Ellen T. Sims is a judgment creditor of the co-plaintiff George Y. Sims; but neither complaint alleges in what capacity she sues as plaintiff in this action nor demands for her any specific relief. (4) The second complaint alleges that William C. Gulliver was appointed as receiver of the assets, etc., of the plaintiff George Y. Sims, in supplementary proceedings begun in her instance, by virtue of which appointment he brings this action as a stockholder in the defendant company. (5) The plaintiff Ellen T. Sims is therefore not a party in interest in this action, and so is improperly joined therein as a co-plaintiff. The plaintiff Gulliver may be called her representative. She alleges no ground of claim against the Montana Improvement Company, Limited, or against any of the defendants. Her cause of action is not alleged to be the same as that of the plaintiffs nor, as the case stands, can it be. The interest of one plaintiff in a joint action must be as nearly as possible identical with that of his co-plaintiffs, and at all events be an intelligible answer to the question of the reason of his name appearing on the complaint. See Weeks v. Cromwell, 9 Civ. P. R., 28. (6) It is proper for defendants to demur to the complaints herein for such “ a misjoinder of parties plaintiff.” Code Civ. Pro., § 478, Cl. 5.
    II.—The fact that a judicial order made Ellen T. Sims a party does not make her a proper party. It was claimed on argument that defendants by demurring to the complaint • thereby admitted the fact that Ellen T. Sims was made a party plaintiff by a judicial “ order * * * duly entered,” and that defendants were therefore estopped from objecting to her as improperly joined. The defendants deny this estoppel. Their demurrer admits the fact of her joinder by judicial order, but controverts the legal force of such a joinder ; and defendants urge that it is proper to take that objection by demurrer. If plaintiff’s contention were a sound one, a demurrer could be always overruled on the ground of estoppel as admitting every implication and inference of law contained in the complaint, as well as of fact.
    HI.—Admitting that Ellen T. Sims is properly joined, the facts stated in the complaint to not constitute a cause of action, so far as _ she is concerned, and the complaint should therefore be dismissed.
    IY.—The plaintiff G. V. Sims was guilty of laches in bringing this action, as it appears on the face of the complaint that this action was not brought till nearly five years after the alleged cause of action arose. Where great lapse of time, gross laches, or long and unexplained acquiescence on the plaintiff’s part appears on the bill, even where no statutory bar exists, defence may be taken by demurrer. Story Eq. Pl., § 503, note (6). See also, Humbert v. Trinity Church, 7 Paige, 195; Van Hook v. Whitlock, 7 Hi., 373; Coster v. Murray, 5 Johns. Ch., 522; Cooper Eq. Pl., 167; Truman on Execution, § 307.
    Y.—The court has not jurisdiction of the subject of the action. The court has no jurisdiction to grant the relief asked for in the complaint, or any part of it. It appears from the complaint that the identical stock under which the plaintiff claims any interest whatever in said corporation or its property or profits, was disposed of pursuant to the judgment of the district court of Missoula County, Montana. In February, 1886, plaintiff acquired the possession of three certificates of the stock of the company with blank assignments and powers of attorney (which was not even evidence of title, Dunn v. Comm. Bk., 11 Barb., 585), but never even presented them to be transferred on the books; and before any legal title was transferred, in obedience to an execution issued on said judgment the sheriff “ did levy upon and sell said one thousand shares of stock,” etc. This judgment and the sale by the sheriff are conclusive on any court in the United States. Story on Const., § 183; Hampton v. McConnell, 3 Wheat., 234; Mills v. Duryee, 7 Cranch, 481. This disposition of the stock, which appears ipso facto (as well as from the situs of the corporation as stated in the complaint) to have been within the jurisdiction of the Montana court, is of universal obligation. 1 Greenl. on Ev., § 541, and cases cited; Eisenlord v. Clum, 126 N. Y., 560. And no court of this state has jurisdiction to set aside the judgment or sale on the ground of fraud or otherwise, or to treat it as a nullity (unless for lack of jurisdiction, which is not pretended). Stat. U. S., March 27, 1804; Christmas v. Russell, 5 Wall, 290; Maxwell v. Stewart, 15 Ib., 77. The subject matter of the action is not within the jurisdiction of any court of this state, as is manifest from the complaint; and no judgment of this court can be enforced respecting it. The subject matter is clearly the stock of the Montana corporation, its property and assets, its books and records. These are all without the state of New York, so far as appears from the complaint. No presumption that such property is in the city or state of New York is created by § 266 of the Code of Civ. Pro. The presumption of law is that the property is in Montana. The judgment prayed for, if granted, would be nugatory and ineffectual. Fisher v. Charter Oak (supra). A superior city court in the state of New York cannot acquire jurisdiction of an action against a foreign corporation, where the cause of action did not arise within the city, or the subject matter of the action is not situated within it. The attempt of the legislature to confer such jurisdiction by service of the summons on an officer of the corporation within the city (Code C. P., § 263, subd. 7) was beyond its powers, which by the Constitution (art. 6) do not enable it to increase the territorial jurisdietion of those courts beyond those possessed at the time of the adoption of the article (1869). Landers v. Staten Island R. R. Co., 53 N. Y., 450. “ The terms employed (in the Constitution),” says Judge Allen in that case, “ in giving authority for the enlargement of the jurisdiction of the court, do not, ex in termini, give or necessarily imply an authority to give it jurisdiction either of subjects or causes of action or persons outside the boundary lines of the city” (p. 456). “ The jurisdiction attempted to be exercised here is in respect to a cause of action originating outside the city, and over a corporation not located or having a place of business within the city ” (p. 459); “ and it follows that the court had no jurisdiction of the cause of action or of the defendant, and the legislature could not * * * have given the court jurisdiction of the actions.” See also, Davidsburg v. Knickerbocker Life Ins. Co., 90 N. Y., 526; and P. ex rel. Ryan v. Green, 58 N. Y., 302.
    "VI.—The complaint does not state facts sufficient to constitute a cause of action. There is no cause of action here in this state, as the law does not give any remedy here for the things complained of, nor any of the relief demanded in the complaint. Fisher v. Charter Oak, 52 Super. Ct., 189, last paragraph. It is idle to claim on demurrer that some relief or judgment other than that asked for in the complaint may be given ; for example, a judgment for damages against Bonner for his alleged breach of contract, or against him or Conk-ling, or both, for their alleged tortious conduct. Code Civ. Pro., § 1207 ; Abbott, Brief on Pl., p. 112, and cases cited. A demurrer is not an answer within the meaning of this section (or 275 of the Code of Procedure), and where equitable relief is demanded, a judgment at law cannot be granted, a demurrer being interposed. Kelly v. Downing, 42 N. Y., 77; Fisher v. Charter Oak, supra; Edson v. Girvan, 29 Hun, 422.
    
      
      Holmes & Adams, attorneys, and Artemas H. Holmes of counsel, for respondent, argued.
    I. The first ground of demurrer, that the court has no jurisdiction of the subject of the action, is not well taken. The subject of the action, the action itself, is substantially the same as in Lawson v. Stanley, decided March 23, 1891, at the special term of this court reported in 15 N. Y. Supp., 707. The only substantial difference upon the question of the court’s jurisdiction, is that in the case at bar the corporation is a foreign corporation, while in the Lawson case the corporation was domestic. Section 1780 expressly gives jurisdiction in an action by a resident of the state against a foreign corporation, for any cause of action. The question of residence of plaintiff Sims is not raised by the demurrer. But if it were presented, the residence of the co-plaintiff, William C. Gulliver, as receiver, made a party by order of this court, disposes of any question of jurisdiction under section 1780. Fisher v. Charter Oak Co., in this court (14 Abb. N. C., 32), as to jurisdiction where the non-residence of a sole plaintiff does not appear on the face of the complaint, and the question arises on a demurrer, is precisely in point. The defendants who demur are sued as tort-feasors and the action might proceed against them, or either of them alone, without the presence of other defendants ; it is against directors, as trustees, to call them to account for the manner in which they have discharged their trust, and is one of which courts of equity always have jurisdiction, as said in Brinkerhoff v. Bostwick, 99 N. Y., 193. That this court, as a court of equity, has jurisdiction of the subject matters of the action, is abundantly established by the decision in Lawson v. Stanley, supra, and cases there cited by Judge McAdam. The following cases support the jurisdiction. Wardell v. Railroad Co., 103 U. S., 651; Ervin v. Oregon, etc., Co., 22 Blatch., 187; 23 Ib., 517. That the stock of a plaintiff, bringing such an action as a stockholder, has not been registered in his name, is no reason why he should not maintain the action. Ervin v. Oregon, etc., 62 How., 490.
    II. The second ground of demurrer is not well taken. Nothing appears in the complaint to warrant the claim that Ellen T. Sims, named as a party plaintiff, is a misjoinder. The only reference to her is in paragraph 1 of complaint. There the order of this court, that William C. Gulliver as receiver “ and Ellen T. Sims be' made parties plaintiff herein, and that the summons in this action be amended accordingly,” is pleaded. This allegation the demurrer admits; and also admits that the order was duly made and entered in the office of the clerk of this court. That order has not been appealed from. The power of the court, inherently and under section 452 of the Code, to bring in new parties, is sustained by Ladd v. Stevenson, 112 N. Y., 325, and cases there cited. Section 723 also empowers the court to amend a process, the summons in this case, by adding new parties. The only limitation on the exercise of this power of adding or striking out parties is that “ a sole defendant cannot be stricken out and another substituted in his place.” Riley v. Stern, 23 Abb. N. C., 435; 10 N. Y. Supp., 8; N. Y., etc., Co. v. Remington, etc., 89 N. Y. If defendants were aggrieved by the order adding new parties plaintiff, the remedy was by appeal from the order, not by demurrer. The order was not appealed from.
   Per Curiam.

The plaintiff Sims became the owner of three certificates of capital stock of the Montana Improvement Company, a foreign corporation, representing 750 shares of said capital stock of the value of $75,-000. The certificates were issued to George Conkling and were by him transferred to Sims, in fulfillment of a contract made by him with the corporation, of which transfer the corporation had timely notice.

The corporation subsequently instigated an action in favor of one Bobertson against Conkling, in the courts of Montana, in which judgment was suffered to go by default against Conkling, and on it the sheriff is said to have sold Sims stock as the property of Conkling and one Hammond purchased the same for the nominal consideration of $100. The judgment was fraudulently obtained by the procurement of the officers of the corporation and with its consent and connivance, and as part of a conspiracy to defraud Sims.

The officers of the corporation have wasted and appropriated its assets, pretend that it has ceased to exist or transact business.

The action is brought by Sims on his behalf as stockholder, and on behalf of all other stockholders.

He prays for a decree establishing his rights as a stockholder and declaring void any certificates issued in place of those held and owned by him, and that he have an account, etc. The defendants having demurred, have for all present purposes admitted the truth of the allegations charged and these sufficiently state a cause of action. The fact that the stock was not registered in Sims’ name, does not disable him from maintaining the action. Ervin v. Oregon R. & N. Co., 62 How., 490. It must be assumed (nothing appearing to the contrary), that the plaintiff is a resident of this state, Fisher v. Charter Oak L. I. Co., 14 Abb. N. C., 32, and section 1780 of the Code gives jurisdiction in an action by a resident of the state against a foreign corporation “for any cause.” As was said by the court, in Ervin v. Oregon R. & N. Co., 62 How., 492. “ In cases of fraud, breaches of trust or contract, the jurisdiction of a court of equity is sustained wherever the person of the defendant be found, although property beyond the jurisdiction be affected by the judgment. Citing Gardner v. Ogden, 22 N. Y., 327; March v. Eastern R. R. Co., 40 N. H., 548; Massie v. Watts, 6 Cranch, 148. It is not important now to indicate the specific relief to which the plaintiff may in the end he entitled. That will depend upon the facts established at the trial. The complaint makes out a cause of action. The relief within the power of the court to grant may he incomplete, and not commensurate with the injuries and loss sustained, growing out of the fact that material interests affected are outside of this jurisdiction, but that affords no adequate reason why an attempt in that direction should not be made. Efforts in such direction frequently afford only approximate justice. In so far at least as the defendant is personally concerned, and the property and assets within this state may be impressed, justice may be accomplished.”

An inspection of the books of a foreign corporation may be ordered, but if they are in constant use in a distant state sworn copies may suffice. Ervin v. Oregon R. & N. Co., 22 Hun., 566. This feature is referred to as incidentally bearing upon the remedies enforceable where jurisdiction is obtained against a foreign corporation. The observations made, answer the objections that the court has no jurisdiction of the subject of the action, and that the complaint does not state facts sufficient to constitute a cause of action. The next ground of demurrer is that there is a misjoinder of parties plaintiff, in that Ellen T. Sims is made a party plaintiff. The complaint shows that she was made a party by force of an order of the court.

This order appears in the appeal book, has not been appealed from, and remains in full force and effect, and concludes the parties to the extent, that she was rightfully brought in under section 452 of the Code. It was certainly not intended that where a party was joined under this section, and no appeal taken from the order, that the propriety of the order could be reviewed on demurrer assigning the misjoinder of the party added. The law has wisely afforded another mode of reviewing the action of the court, and if that mode is not employed, the right to test by demurrer the propriety of joining, the party is lost.

The Code provisions, though independent, must be so worked and construed that they may operate in harmony, that orderly rather than chaotic practice may prevail. It follows that the interlocutory judgment, overruling the demurrer, was properly made, and must be affirmed, with costs.  