O'BRIEN v. THE CHICAGO, ROCK ISLAND AND PACIFIC RAILROAD COMPANY

O’BRIEN against THE CHICAGO, ROCK ISLAND AND PACIFIC RAILROAD COMPANY. Supreme Court, First District ; Special Term, Aug., 1868. Foreign Corporations.—Conflict of Laws. In an action drawing in question the powers of a foreign corporation, the powers are to be determined by the law of the States by which the corporation was created; and acts are to be deemed by the courts of this State as valid which áre so by such foreign law, though they would be held without’the power of the corporation by our law. Motions for a receiver; and counter-motions to dissolve injunctions. Three actions were brought against the Chicago, Rock Island and Pacific Railroad Company and others, by O’Brien, Musgrave and Grates, respectively. The plaintiffs in these cases sued as holders of the original stock of the Chicago, Rock Island and Pacific Railroad Company, a corporation formed and existing under the laws of Illinois and Iowa. The complaints were substantially like those of the previous cases of Fisk, and other plaintiffs, last above reported (p. 378). The plaintiffs in the present actions now moved for the appointment of a receiver of the proceeds of the 49,000 new shares of stock issued and sold by the executive committee of the company. The defendants also moved to dissolve the preliminary injunctions restraining the use of such proceeds. It now appeared, among other things, that the former suits had been discontinued ; that the legislature of Iowa had passed an act fully confirming the issue of the 49,000 shares of stock; and that the supreme court of Illinois, in an action brought by the attorney-general of Illinois against the company, had decreed that such issue was legal and valid, and.also that, while the former suits were sustained by the petition of a majority of the stockholders, the present suits were opposed by a large majority, about three-fourths in amount, of all the stockholders. All the motions were heard together. G. W. Wingate, E. W. Stoughton, and L. R. Marsh, for the plaintiffs. C. Tracy, and W. Fullerton, for the defendants. [MAJORITY — Cardozo, J.] Cardozo, J. If these cases presented only similar circumstances to those which existed when the cases of Fisk, Fanshawe and others (which have since been discontinued) were decided, of course I should make the same disposition. of them as I did of those cases, my confidence in the accuracy of the views I then expressed not only being undiminished, but being sustained by the unanimous judgment of the general term. The corporation defendant here is subject to the jurisdiction of the States of Iowa and Illinois, and by the laws of those States its powers must be tested. The former State had ratified the action of the defendant when the other cases came before me; and now a decision of the courts of Illinois, which I feel bound to respect as an authoritative exposition of the law of that State, is cited, showing that the acts of this corporation, though they would not be within its power according to our law, are so according to the law of the State of Illinois. No decision of that State bearing upon the point existed when the other cases were argued. This puts the present applications in an entirely different position from that which the previous cases occupied, and necessitates that the injunctions should be dissolved, and the motion for receiver denied—a conclusion which I reach the more willingly, from the circumstance that a large proportion of the stockholders, instead of, as on the argument of the previous cases, asking that the injunctions be continued, and a receiver appointed, now elect to ratify the acts of the corporation and its officers, and ask that the injunctions be dissolved. The motion for receiver must be denied, and the injunction's vacated without costs; and under the circumstances, the plaintiffs must have leave to discontinue these suits without costs, if they desire. The vacating of the injunctions will render any action upon the petition in the cases of Fisk, &c., unnecessary.