CORPORATIONS-FOREIGN CORPORATIONS-JURISDICTION IN DERIVATIVE SUITS

Authors

E. M. Deal S.Ed., University of Michigan Law SchoolFollow

Abstract

As an aftermath of the much publicized circus fire in Hartford, Connecticut, on July 6, 1944, owners of 37 per cent of the stock of the circus corporation brought a derivative action against the officers and directors alleging failure to observe proper precautions and asking that the corporation be indemnified for losses sustained and for an accounting for certain corporation funds spent for the benefit of one of the- defendant directors. The suit was instituted in New York where the corporation was licensed to do business although the circus was incorporated in Delaware, wintered in Florida, and the cause of action arose in Connecticut. Defendants moved to dismiss on the ground, inter alia, that New York ought not to assume jurisdiction because of the doctrine of forum non conveniens. Held, motion denied; derivative stockholders' actions can be properly brought in a state other than that of the corporation's domicile. The court recognized the general rule, grounded on considerations of public policy, convenience and expediency that courts decline jurisdiction of a suit to interfere with or control the internal affairs of a foreign corporation, but decided that the instant suit did not involve such attempted interference or control. North v. Ringling, (N.Y. 1946) 63 N.Y.S. (2d) 135.

Recommended Citation

E. M. Deal S.Ed., CORPORATIONS-FOREIGN CORPORATIONS-JURISDICTION IN DERIVATIVE SUITS, 45 Mich. L. Rev. 631 (1947).
Available at: https://repository.law.umich.edu/mlr/vol45/iss5/12