Plimpton v. Bigelow, 93 N.Y. 592 (1883)

Shares of stock in a foreign corporation are not subject to attachment in a state where the corporation is not domiciled, even if the certificates representing those shares are physically present within that state.

Summary

This case addresses whether shares of stock in a foreign corporation can be attached in New York when the certificates are held within the state. The Court of Appeals held that such an attachment is invalid because the stock itself is located in the state of incorporation, not where the certificates happen to be. The court reasoned that the shares represent an interest in the corporate assets held in the foreign state, and New York courts lack jurisdiction over those assets. This decision highlights the principle that jurisdiction over property generally requires the property itself to be located within the jurisdiction.

Facts

The plaintiff, Plimpton, sought to attach shares of stock owned by Bigelow, a non-resident, in a foreign (Pennsylvania) corporation. The certificates representing these shares were physically located in New York. Plimpton attempted to levy on the stock by serving a warrant of attachment on the individual in possession of the certificates in New York.

Procedural History

The lower court upheld the validity of the attachment. The General Term reversed this decision, holding the attachment invalid. The New York Court of Appeals affirmed the General Term’s decision, finding that the shares of stock were not properly subject to attachment in New York.

Issue(s)

Whether shares of stock in a foreign corporation are subject to attachment in New York simply because the certificates representing those shares are physically present in New York.

Holding

No, because the situs of the stock is in the state where the corporation is domiciled, and therefore, not subject to attachment in New York based solely on the presence of the stock certificates.

Court’s Reasoning

The Court of Appeals reasoned that shares of stock represent an ownership interest in the corporation, and that interest is tied to the corporation’s assets and domicile. The court stated: “The general rule that the situs of personal property is the domicile of the owner is subject to many exceptions, and it is clear that for the purposes of taxation, and for other purposes where the sovereignty of the state is to be exercised, personal property may have an actual or constructive situs within the state, although the domicile of the owner is elsewhere.” However, this principle does not automatically apply to attachments. The court distinguished between the certificates, which are merely evidence of ownership, and the shares themselves, which represent an interest in the corporation’s assets. The court emphasized that the corporation exists under the laws of Pennsylvania, and New York courts cannot exercise direct control over the corporation’s internal affairs or assets. The court noted, “The foreign corporation is not here; it has no property in this state which can be taken by virtue of the attachment. The certificates of stock are not the property itself, they are but evidence of property… The shares are held by the company in Pennsylvania.” The court further observed that to allow attachment based solely on the presence of the certificates would create significant practical problems, as multiple states could potentially claim jurisdiction over the same shares. The dissenting opinion argued that the certificates, when endorsed, effectively transfer the property they represent, and thus should be subject to attachment where found. The majority, however, rejected this argument, emphasizing the importance of the corporation’s domicile in determining the situs of the stock. The court relied on the principle that a state’s jurisdiction generally extends only to property located within its borders, and that shares of stock are deemed to be located in the state of incorporation.