(After holding that certificates of stock were not negotiable, that they were only evidence of title, and were not a representation that any one but the one to whom they were issued was the owner, and that if they should be found in the hands of another claimant, he would be estopped by laches in not claiming dividends for twelve years, the cause was remanded to court below to give judgment for plaintiff)

Note. See note to preceding case.

Sec. 497. Same. (c) To compel inspection of books.

See In Matter of Rappleye, 43 App. Div. 84, infra, p. 1651; Houston, J., in Richardson v. Swift, 7 Houst. 137, infra, p. 1653.

Note. See note to section 495, supra.

Sec. 498. (4) Receivers in state courts.

HENRY E. IRWIN v. THE GRANITE STATE PROVIDENT ASSOCIATION.1

1897. IN THE COURT OF CHANCERY OF NEW JERSEY. 56 N. J. Eq. 244-251.

[The Association, a New Hampshire corporation, sold shares and made loans in many states, including New Jersey, Irwin being one of the New Jersey shareholders. In 1896 the company became insolvent, and one Taggert was appointed assignee in New Hampshire. Irwin filed his bill in New Jersey alleging the insolvency and appointment of an assignee in New Hampshire, and asked for a receiv er,-one Gray being appointed. Upon petition, Taggert was afterward made a defendant, and filed his bill, alleging that as assignee he was entitled to all the assets in New Jersey, asked that he be substituted for Gray as receiver, and that the latter be required to follow the directions of Taggert and pay over to him all sums collected.]

REED, V. C. Assuming that Mr. Taggert, at this stage of the suit, is in a position to question the appointment of the New Jersey receiver, I am of the opinion that there is no substance in the objections raised. The insistence made on this behalf is, that all right in the assets of the insolvent corporation passed to him by force of his appointment as assignee in the state of New Hampshire. This proposition undoubtedly states the general rule. The right to collect personal assets everywhere passed to the receiver, but the exercise of that right beyond the limits of the state of his appointment is by virtue of 1 Statement abridged; part of opinion omitted.

the comity which may be extended to him by the court of the state in which the right is asserted. This comity will not be extended where the rights of the citizens of the state are likely to be prejudiced or where it would be in contravention of the policy of the state. Hurd v. Elizabeth, 12 Vr. 1; National Trust Co. v. Miller, 6 Stew. Eq. 155 Sobernheimer v. Wheeler, 18 Stew. Eq. 614.

In view of this admitted rule it follows, I think, that whenever application is here made for an appointment of a receiver for a foreign corporation which is already in the hands of a receiver at the płace of its domicile, the court in which the application is made can do one of the three things; first, it can refuse to appoint a receiver here and let the domiciliary receiver bring suit in this state to collect all the debts of the insolvent corporation within its limits; second, it can appoint the domiciliary receiver as ancillary receiver; third, it can appoint some one other than the domiciliary receiver.

In this instance the latter course was adopted. The receivership in this state is, however, but ancillary to the receivership in New Hampshire and constitutes a mere agency to collect assets here and forward them to the original receiver, unless it appears that creditors or stockholders in this state are asserting a special right in the local assets, which right should be settled by the courts here. Whether a receiver at all should be appointed in this state depends upon the volume of business and the kind of business which the foreign corporation was here transacting, and whether, if a receiver is appointed here, the appointee should be Mr. Taggert or another depends upon several considerations, the main one being whether the interest of New Jersey parties would be likely to antagonize in any respect the interest of the general shareholders and creditors.

One prayer only in the cross-bill need be referred to to justify the appointment not only of a receiver in this state, but a receiver other than the domiciliary officer. This prayer is that the New Jersey receiver be directed to pay over the proceeds of the money collected by him to the New Hampshire assignee, to be distributed by him according to the laws of New Hampshire.

Now, a part of the money to be collected is the sum of $30,000 deposited by the association with the secretary of state for the benefit of the creditors in this state.

This condition of affairs, therefore, raised a question of importance, namely, whether this part of the assets at least should not be retained in this state to answer the purpose for which it was deposited.

The existence of this question, however it may be decided, is sufficient to show the propriety of a separate receiver in this state.

(After holding that the New Jersey receiver should not be required to sue in the name of, or conform to the directions of, the New Hampshire assignee, proceeds:)

The important question discussed upon the hearing is raised by another prayer and the facts upon which it is based, namely, that Mr. Gray be directed to collect all debts and pay over all proceeds to Mr. Taggert, to be distributed according to the laws of New Hampshire. 2 WIL. CAS.-23

That, as a rule, the prayer states correctly the duty of the ancillary receiver is not controverted by the counsel of the New Jersey officer. It is now admitted, and has never been denied, that the general assets of the association should be distributed by the home assignee. But there is a part of the assets in this state regarding which it is doubtful whether this general rule applies. This portion consists of the mortgages deposited with the secretary of state as a condition precedent to the association obtaining a certificate of authority to do business in this state. This deposit is of securities amounting to $30,000, and is made under the provisions of section 3 of the act of 1890. Gen. Stat., p. 3250. The language of the statute is that the securities shall be held by the secretary of state in trust for the benefit of the creditors of such corporation within this state.

(After holding that shareholders would be creditors within the meaning of the statute, as to any distributive share after the debts were paid proceeds:)

The deposit of the fund in this state does not, in my judgment, change in the least the proportion to which New Jersey shareholders will be entitled. All the assets here are to be taken into account as a part of the fund to be distributed; but the right to control the fund deposited in this state for the purpose of securing the payment to shareholders in this state of their proportion of the assets to be distributed, resides in this court. Whether such fund is to be turned over to the domiciliary receiver or is to be retained here, or whether a part is to be so turned over and the remainder retained, will depend upon circumstances. All this court can reasonably exact is that its citizens shall not be driven into the court of another state to obtain their distributive shares and that the payment of such shares shall be secured, so far as the amount received from the securities deposited will furnish security.

The New Jersey officer will at once proceed to collect the amount of those securities. When they are all, or substantially all, collected, the New Hampshire assignee may file a petition, showing the amount of assets, as nearly as possible, the amount and character of his bond, and then this court will make an order, either that the assets in this state be paid over to Mr. Taggert, upon his giving bond in this state to pay to the New Jersey shareholders their distributive shares, or possibly upon the security of his original bond, taken together with the assumption that the court of New Hampshire will see that the shareholders everywhere are paid; or the order may be that sufficient assets may be retained here to be distributed through the hands of the receiver in this state, but according to the proportion fixed by the decree of the court of New Hampshire. The receipts of any collections by Mr. Gray, other than those thus deposited, will, after deducting expenses, be paid over at once.

Note. Receivers in state courts may be appointed for foreign corporations doing business there, and having property there; but if the corporation has no property, or no place of business, or no officers within the state, then a receiver can not be appointed: 1893, Gilman v. Hudson R. B. & S. Mfg. Co., 84 Wis. 60, 23 L. R. A. 52, note; 1894, Holbrook v. Ford, 153 Ill. 633, 46 Am. St. Rep. 917; 1899, Stockley v. Thomas, 89 Md. 663, 43 Atl. Rep. 766.

SUB. V. THE NATIONAL GOVERNMENT AND STATE CORPORATIONS.

Sec. 499. I.

Under the taxing power.

VEAZIE BANK v. FENNO.1

1869. IN THE SUPREME COURT OF THE UNITED STATES. 8 Wall. (75 U. S.) Rep. 533-556.

The

[On certificate of division for the circuit court for Maine. bank was chartered by the state of Maine with authority to issue bank notes for circulation; it was in no way the financial agent of the state. In 1866 (14 Stat. at L. 146) congress enacted "that every national banking association, state bank, or state banking association, shall pay a tax of ten per centum on the amount of notes of any person, state bank, or state banking association, used for circulation" after August 1, 1866. The bank refused to pay the tax imposed upon notes so issued by it, upon the ground that the tax was unconstitutional as being a direct tax not apportioned as required by the constitution, and also because it impaired a franchise granted by the state.]

THE CHIEF JUSTICE (CHASE). (After holding the tax was not a direct tax.) Is it, then, a tax on a franchise granted by a state, which congress, upon any principle exempting the reserved. powers of the states from impairment by taxation, must be held to have no authority to lay and collect?

We do not say that there may not be such a tax. It may be admitted that the reserved rights of the states, such as the right to pass laws, to give effect to laws through executive action, to administer justice through the courts, and to employ all necessary agencies for legitimate purposes of state government, are not proper subjects of the taxing power of congress. But it can not be admitted that franchises granted by a state are necessarily exempt from taxation; for franchises are property, often very valuable and productive property; and when not conferred for the purpose of giving effect to some reserved power of a state, seem to be as properly objects of taxation as any other property.

But in the case before us the object of taxation is not the franchise of the bank, but property created, or contracts made and issued under the franchise, or power to issue bank bills. A railroad company, in the exercise of its corporate franchises, issues freight receipts, bills of lading and passenger tickets; and it can not be doubted that the organization of railroads is quite as important to the state as the organization of banks. But it will hardly be questioned that these contracts of the company are objects of taxation within the powers of

1Only the part of the opinion relating to the single point given. Dissenting opinion of Nelson, J. (Davis, J., concurring) omitted, except a single paragraph.

congress, and not exempted by any relation to the state which granted the charter of the railroad. And it seems difficult to distinguish the taxation of notes issued for circulation from the taxation of these railroad contracts. Both descriptions of contracts are means of profit to the corporations which issue them; and both, as we think, may properly be made contributory to the public revenue.

It is insisted, however, that the tax in the case before us is excessive, and so excessive as to indicate a purpose on the part of congress to destroy the franchise of the bank, and is, therefore, beyond the constitutional power of congress.

The first answer to this is that the judicial can not prescribe to the legislative departments of the government limitations upon the exercise of its acknowledged powers. The power to tax may be exercised oppressively upon persons, but the responsibility of the legislature is not to the courts, but to the people by whom its members are elected. So if a particular tax bears heavily upon a corporation, or a class of corporations, it can not, for that reason only, be pronounced contrary to the constitution.

But there is another answer which vindicates equally the wisdom and the power of congress.

It can not be doubted that under the constitution the power to provide a circulation of coin is given to congress. And it is settled by the uniform practice of the government and by repeated decisions, that congress may constitutionally authorize the emission of bills of credit. It is not important here to decide whether the quality of legal tender, in payment of debts, can be constitutionally imparted to these bills; it is enough to say, that there can be no question of the power of the government to emit them; to make them receivable in payment of debts to itself; to fit them for use by those who see fit to use them in all the transactions of commerce; to provide for their redemption; to make them a currency, uniform in value and description, and convenient and useful for circulation. These powers, until recently, were only partially and occasionally exercised. Lately, however, they have been called into full activity, and congress has undertaken to supply a currency for the entire country.

The methods adopted for the supply of this currency were briefly explained in the first part of this opinion. It now consists of coin, of United States notes, and of the notes of the national banks. Both descriptions of notes may be properly described as bills of credit, for both are furnished by the government; both are issued upon the credit of the government; and the government is responsible for the redemption of both; primarily, as to the first description, and immediately upon default of the bank, as to the second. When these bills shall be made convertible into coin, at the will of the holder, this currency will, perhaps, satisfy the wants of the community, in respect to a circulating medium, as perfectly as any mixed currency that can be devised.

Having thus, in the exercise of undisputed constitutional powers, undertaken to provide a currency for the whole country, it can not be