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§ 88

the same to the president or other head officer, or to the secre-
tary or clerk thereof, personally, or by leaving the same at his
dwelling-house or place of abode; and the plaintiff, if he shall be
entitled to costs in the cause, shall be allowed for such service
the sum of two dollars for each defendant so served, not exceed-
ing three, and the same to be included in the taxed bill of costs.
"An act to regulate the practice of courts of law. (Revision of 1874),”
§ 106.
See Gen. Statutes, p. 2551.

88. Process against foreign corporations.-In all personal suits or actions hereafter brought in any court of this state, against any foreign corporation, process may be served upon any officer, director, agent, clerk or engineer of such corporation, either personally or by leaving a copy thereof at his dwelling-house or usual place of abode, or by leaving a copy at the office, depot or usual place of business of such foreign corporation.

Act of 1875, § 88.

In 1891 it was decided that a justice's court had no jurisdiction of a foreign corporation. (Wheeler & Wilson Mfg. Co. v. Carty, 53 N. J. Law, 336. The next year, however, the Legislature amended the Small Causes Act so as to confer jurisdiction upon the justice's court, providing "that any body politic or corporate of this State, or of any other State, "may sue and be sued in any court for the trial of small causes, in any "action or proceeding over which said court has jurisdiction."

P. L. 1892, p. 182; Gen. Stat., p. 1896.

Service of process on foreign corporation. The person to whom a foreign corporation commits the management and control of its business here becomes the agent of the corporation for the purpose of receiving service of process in all actions arising in this State out of the conduct of the business. (Moulin v. Insurance Co., 24 N. J. Law, 222, 234; S. C., 25 N. J. Law, 57, 65; National Condensed Milk Co. v. Brandenburgh, 40 N. J. Law, 111; Norton v. Berlin Iron Bridge Co., 51 N. J. Law, 442.)

The line between those who represent and those who do not represent a foreign corporation for the purposes of this act is defined in Mulhearn v. Press Pub. Co., 53 N. J. Law, 150.

An officer of a foreign corporation casually within the State on business of his own, where the corporation has never transacted any business within the State, is not a proper person to serve with process against the company. (Freeholders of Mercer v. Penna. R. R. Co., 42 N. J. Law, 490; Moulin v. Ins. Co., 25 N. J. Law, 57, 61.)

An officer of a foreign corporation who comes into the State for the purpose of giving testimony is privileged from service of a summons in an action against the corporation while he is so in attendance as a witness, and a service made under such circumstances will be set aside. (Mulhearn v. Press Pub. Co., 53 N. J. Law, 153.)

As to the service of prerogative writs against foreign corporations, see Sections 102 and 103, post.

89. When defendant in court.-When the sheriff or other officer shall return such summons "served" or "summoned," the defendant shall be considered as appearing in court, and may be proceeded against accordingly.

Act of 1875, § 39.

Where a sheriff in making his return added other words after the statutory indorsement "served," such words were held to be surplusage. (Norton v. Berlin Iron Bridge Co., 51 N. J. Law, 442.)

90. Proceedings when summons not served. In case the sheriff or other officer shall return a summons issued against any corporation of this state, "not served" or "not summoned." and an affidavit shall be made to the satisfaction of the court that process cannot be served upon it, the court shall make an order directing the defendant to cause its appearance to be entered to the action, on a day to be specified in the order, a copy of which order shall be inserted in one of the newspapers published in this state, for at least three weeks, once in each week, and a copy thereof shall also be posted in three public places in this state, as shall be ordered by the court, for at least three weeks, and if the defendant shall not appear within the time limited by the order, or within such further time as the court shall limit, then, on proof of the publication and posting of the order, the court shall order the clerk to enter appearance for the defendant, and thereupon the action shall proceed as if the defendant had entered its appearance to the action.

Act of 1875, $ 90.

No corporation against which an order for publication shall be made, as aforesaid, shall grant, bargain, sell, alien or convey any lands, tenements or real estate in this state (in case the said summons issued out of the supreme court), or in the county in which the said summons shall have been issued (in case the said summons issued out of the circuit court or the court of common pleas), of which it shall be seized or entitled to at the time of making such order, until the plaintiff in the action shall be satisfied his legal demand, or until judgment shall be entered for the defendants; and the said action shall be and remain a lien on such lands, tenements and real estate, from the

§ 89-91

96

REMEDIES AGAINST OFFICERS AND STOCKHOLDERS.

$92-94 time of entering the said order for publication in the minutes of the court, and the said lands, tenements and real estate shall and may be sold on execution, as if no conveyance had been made by the said corporation.

Act of 1875, § 91.

IX.-Remedies Against Officers and Stockholders.

92. Action for liability imposed by act ; remedy in chancery.— When the officers, directors or stockholders of any corporation shall be liable to pay the debts of the corporation, or any part thereof, any person to whom they are liable may have an action against any one or more of them; and the declaration shall state the claim against the corporation, and the ground on which the plaintiff expects to charge the defendants personally; or the person to whom they are liable may have his remedy by bill in chancery. P. L. 1846, pp. 70-71; P. L. 1849, p. 307; Act of 1875, $$ 93-94. Sections 92 and 94 relate to cases where officers, directors or stockholders are made specifically liable by the provisions of the act for the payment of the debts of the company, and provide in such cases for actions by the creditor. (See Section 52, p. 75, ante). They do not relate to actions against stockholders to enforce payment of subscriptions for stock. Such proceedings must be by general creditors' bill for the benefit of all. (Wetherbee v. Baker, 35 N. J. Eq., 501, 505.)

Waters v. Quimby is an action under these sections. (27 N. J. Law, 296; 28 Id., 533.)

93. Stockholders, etc., who pay company's debts may recover. -Any officer, director or stockholder who shall pay any debt of a corporation for which he is made liable by the provisions of this act, may recover the amount so paid, in an action against the corporation for money paid for its use, in which action only the property of the corporation shall be liable to be taken, and not the property of any stockholder.

P. L. 1846, p. 71; P. L. 1849, p. 307; Act of 1875, § 95.

94. Property of director, etc., not to be sold for company's debt until remedy against the company has been exhausted. - No sale or other satisfaction shall be had of the property of any director or stockholder for any debt of the corporation of which he is such director or stockholder till judgment be obtained therefor against such corporation and execution thereon returned

unsatisfied, but any suit brought against any director or stockholder for such debts shall stay after execution levied, or other proceedings to acquire a lien, until such return shall have been. made.

P. L., 1846, p. 71; Act of 1875, § 96.

X.-Foreign Corporations.

95. Foreign corporation may hold and convey lands, etc.— Any corporation created by any other state or by any foreign state, kingdom or government may acquire by devise or otherwise and hold, mortgage, lease and convey real estate in this state for the purpose of prosecuting its business or objects. or such real estate as it may acquire by way of mortgage or otherwise, in the payment of debts due such corporation; provided, such foreign state, kingdom or government, under whose laws such corporation was created, shall not be at the time of such purchase at war with the United States.

P. L. 1873, p. 76; Act of 1875, § 99; P. L. 1882, p. 137; P. L. 1883, p. 220; P. L. 1887, p. 157.

96. Foreign corporations subject to this act.-Foreign corporations doing business in this state shall be subject to the provisions of this act, so far as the same can be applied to foreign corporations.

P. L. 1873, p. 76; Act of 1875, § 103.

The question whether an aggregation of individuals is a corporation, or not, is to be determined rather by the faculties and powers conferred upon the body than by the name or description given to it. Thus a joint stock association formed under the New York statute was held to be a corporation in New Jersey, and, as such, empowered to sue and be sued, not, as is usual, however, in a corporate name, but in the name of designated officers, as prescribed by the law of its creation. (Edgeworth v. Wood, 58 N. J. Law, 463.)

97. Foreign corporations to file copy of charter, statement, etc., before commencing business. Every foreign corporation, except banking, insurance, ferry and railroad corporations, before transacting any business in this state, shall file in the office of the secretary of state a copy of its charter or certificate of incorporation, attested by its president and secretary, under its corporate seal, and a statement attested in like manner of the amount of its capital stock authorized and the amount actually issued, the character of the business which it is to transact in this state,

§ 95-97

97 and designating its principal office in this state and an agent who shall be a domestic corporation or a natural person of full age actually resident in this state, together with his place of abode, upon which agent process against such corporation may be served, and the agency so constituted shall continue until the substitution, by writing, of another agent; upon the filing of such copy and statement the secretary of state shall issue to such corporation a certificate that it is authorized to transact business in this state, and that the business is such as may be lawfully transacted by corporations of this state, and he shall keep a record of all such certificates issued.

P. L. 1894, p. 346; P. L. 1895, p. 293.

These laws imposing the terms on which foreign corporations are permitted to do business in the State are the outcome of similar legislation in other States. The validity of such laws has been upheld by the Supreme Court of the United States in several important cases. The first case that came before that court on this subject was Paul v. Virginia, 8 Wall, 168. It was held that a corporation is not a citizen within the meaning of that provision of the Constitution which declares that the citizens of each State shall be entitled to all the privileges and immunities of citizens of the several States. And Mr. Justice Field in delivering the opinion of the court said: "Now, a grant of corporate existence is a grant of special privileges "to the corporators, enabling them to act for certain designated purposes "as a single individual, and exempting them (unless otherwise specially "provided) from individual liability. The corporation being the mere creation of local law can have no legal existence beyond the limits of the "sovereignty where created. As said by this court in Bank of Augusta "v. Earle, It must dwell in the place of its creation and cannot migrate “'to another sovereignty. The recognition of its existence even by other "States, and the enforcement of its contracts made therein, depend purely

upon the comity of those States-a comity which is never extended "where the existence of the corporation or the exercise of its powers are "prejudicial to their interests or repugnant to their policy. Having no "absolute right of recognition in other States, but depending for such "'recognition and the enforcement of its contracts upon their assent, it "follows, as a matter of course, that such assent may be granted upon "such terms and conditions as those States may think proper to impose. "They may exclude the foreign corporation entirely; they may restrict "its business to particular localities; or they may exact such security 'for the performance of its contracts with their citizens as in their 'judgment will best promote the public interest. The whole matter "'rests in their discretion.' ”

This doctrine was reaffirmed by the Supreme Court in the case of Horn Silver Mining Co. v. New York, 143 U. S., 305, in which Mr. Justice Field, after quoting from the opinion of the former case, adds: This doctrine has been so frequently declared by this court that it must "be deemed no longer a matter of discussion, if any question can ever be "considered at rest.' He further declared: Having the absolute power "of excluding the foreign corporation the State may, of course, impose "such conditions upon permitting the corporation to do business within "its limits as it may judge expedient; and it may make the grant or "privilege dependent upon the payment of a specific license tax, or a sum proportioned to the amount of its capital." (See also Liverpool Ins. Co. v. Oliver, 10 Wall, 56; Pembina, &c., Mining Co. v. Pennsylvania, 125

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