CORPORATIONS-FOREIGN CORPORATIONS-JURISDICTION IN DERIVATIVE SUITS

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\u27 actions can be properly brought in a state other than that of the corporation\u27s 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

EXECUTORS AND ADMINISTRATORS-PRIORITY OF PAYMENT OF UNITED STATES CLAIMS

When decedent died in 1940, his personal estate was consumed by the widow\u27s exemption and expenses of administration, leaving only a one-sixth interest in certain real estate formerly owned by his deceased father. Proceedings to partition this property resulted in a sum of $2,306.17 payable to decedent\u27s widow, subject to the payment of his debts. The executors of one Davidson who had obtained a$24,588.00 judgment against decedent in 1933 claimed the entire fund as did the United States under tax liens entered in 1940 and 1941 of $2,202.89 and$8,904.67. The government based its claim on section 3466 of the Revised Statutes which provides that whenever any estate of a deceased debtor is insufficient to pay the debts, the amount due the United States shall be first satisfied. Section 3670 of the Internal Revenue Code makes the amount of the tax a lien on all a taxpayer\u27s property when he refuses or neglects to pay the tax after demand has been made, however the judgment creditor claimed a prior lien under section 3672 of the code 8 which provides that the lien of the United States in such a case should not be valid against any judgment creditor until notice had been filed. Held, the judgment creditor is entitled to the fund. The court, pointing out that Congress had power to grant priority over federal liens to judgment lien creditors and to provide that first in lien should be first in right, reasoned that section 3672 must be construed with section 3466 and shows an intent on the part of Congress to modify the broad language of that section. The court regarded the judgment lien as sufficiently perfected and specific to defeat the government\u27s claim. In re Meyer\u27s Estate, 159 Pa. Super. 296, 48 A. ( 2d) 210 ( 1946)