Rogers v. Guaranty Trust Co. - 288 U.S. 123 (1933)
U.S. Supreme Court
Rogers v. Guaranty Trust Co., 288 U.S. 123 (1933)
Rogers v. Guaranty Trust Co.
Argued December 15, 16, 1932
Decided January 23, 1933
288 U.S. 123
1. A stockholder, by becoming such, impliedly agrees that, in respect of its internal affairs, the corporation is governed by the laws of the its organization. P. 288 U. S. 130.
2. It is settled doctrine that a court, state or federal, sitting in one State will, as a general rule, decline to interfere with or control by injunction or otherwise the management of the internal affairs of a corporation organized under the laws of another State, but will leave controversies as to such matters to the courts of the the domicile. P. 288 U. S. 130.
3. Courts will exercise this discretion whenever considerations of convenience, efficiency and justice point to the courts of the the domicile as appropriate tribunals for the determination of the particular case. P. 288 U. S. 131.
4. Stockholders of a New Jersey corporation brought suit in New York against the corporation, some of its directors, and other persons to enjoin the issuing and selling of stock to the officers, directors, and certain employees of the corporation, and to annul the shares issued. Only a few of the company's directors were residents of New York, and only a few of the stock allottees were before the court, though the conditions entitling all to receive the stock had been complied with, and presumably some of it had been delivered. The corporation had its principal business office in New York and had its registered office in New Jersey, where stockholders' meetings were held, and had property in New Jersey and did business there and in other States and countries. The controversy depended on a construction of statutes of New Jersey which had not been passed upon by New Jersey courts, and involved grave doubts. The New Jersey law afforded a ready and complete remedy through an action in rem and service by publication.
(1) That the corporation could not be regarded as having been organized in New Jersey to do all of its business elsewhere, and could not be treated as a local concern in New York. P. 288 U. S. 131.
(2) That the case was within the general rule (par. 2, supra), and the District Court did not abuse its discretion in dismissing it without prejudice. P. 288 U. S. 132.
60 F.2d 114 reversed.
Certiorari to review the reversal of a decree dismissing the bills in two stockholders suits, which were begun in the Supreme Court of New York and removed to the District Court and consolidated. The opinion here directs that the decree of the District Court, 60 F.2d 106, be reinstated.