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Bata v. Hill

Court of Chancery of Delaware, New Castle County

March 8, 1955

Thomas J. BATA, Thomas J. Bata and David H. Graham, as Executors of the Estate of Mary T. Bata, and Western Investment and Trading Company, Limited, a Bermuda corporation, Plaintiffs,
v.
Donald M. HILL, Donald M. Hill., Jr., Donald M. Hill and Donald M. Hill., Jr., as Voting Trustees under Voting Trust Agreement for North River Securities Corporation, a Delaware Corporation, dated October 22, 1940, Charles Jucker and Hans Berger, individually, as mandatories in accordance with the law of Switzerland, and as a partnership, North River Securities Corporation, a Delaware corporation, Walter Runge, Louis F. Sperry and Frank A. Seller, Edward N. Goodwin, Nicholas Danforth, A. Turney Savage, Harold J. Faulkner, William F. Clare, Jr., and A. Pennington Whitehead, partners in the practice of law under the firm name of ‘ Goodwin, Danforth, Savage & Whitehead’ successor firm to a partnership which practiced law under the firm name of ‘ Campbell, Harding, Goodwin & Danforth’, Edward N. Goodwin and Harold J. Faulkner, as surviving Voting Trustees under a Voting Trust Agreement for Westhold Corporation, a Delaware corporation, dated October 14, 1940, Cagodan Corporation, a New York corporation, Westhold Corporation, a Delaware corporation, New World Investments Limited, a Canadian corporation, Roycan & Co., a Canadian partnership, N. V. Hollandsche Handelmaatschappij Bave, a Dutch corporation, Per Norgren, as Liquidator of N. V. Hollandsche Handelmaatschappij Bave, a Dutch corporation, N. V. Nederlandsche Schoen-en Lederfabrieken Bata-Best, a Dutch corporation formerly bearing the name N. V. Schoen-en Lederindustrie Amsterdam, Jan A. Bata, Transoceanique S. A., a Luxembourg corporation, Hans Berger, as Liquidator of Transoceanique S. A., a Luxembourg corporation, and Leader A. G., a Swiss corporation, Defendants.

Suit for declaratory judgment as to ownership of stock of two Delaware corporations, principal assets of one of which consisted of bearer certificates representing 890 shares of stock of Swiss corporation which had purported to supersede these bearer certificates by registering the same 890 shares to second Swiss corporation, where ultimate control of second Swiss corporation was in same party who owned stock of the Delaware corporation in question. The Court of Chancery, Seitz, Chancellor, held that where court had obtained possession of original certificates, and where all parties in interest were before court, stay of trial would be denied on condition that parties convey to or deposit with receiver such interests in the 890 shares held by the second Swiss corporation as would enable receiver to transfer that interest in accordance with the ultimate determination of the court.

Ordered accordingly.

Page 520

[35 Del.Ch. 155] Aaron Finger (of Richards, Layton & Finger), Wilmington, and Inzer B. Wyatt and Robert MacCrate (of Sullivan & Cromwell), New York City, for plaintiffs.

George Tyler Coulson (of Morris, Steel, Nichols & Arsht), Wilmington, and Henry Cohen, New York City, for defendants, Donald M. Hill, Donald M. Hill, Jr., Donald M. Hill and Donald M. Hill, Jr., as voting trustees, Jan A. Bata and North River Securities Corp.

Henry A. Wise, Jr. (of Wise & Suddard), Wilmington, for defendant, Westhold Corp.

William Poole (of Berl, Potter & Anderson), Wilmington, for Charles Jucker and Hans Berger, individually, as mandatories in accordance with the law of Switzerland, and as a partnership.

The other defendants have either not been served or not appeared.

SEITZ, Chancellor.

After reading the various papers filed with the Court, I believe I now have in focus the presently relevant facts in a most complicated situation. However, I believe no purpose would now be served by narrating facts beyond those necessary to this decision. I particularly desire to avoid the expression of any unconscious or conscious evaluation of facts beyond the necessities of the present application.

[35 Del.Ch. 156] Plaintiffs ultimately seek a declaratory judgement that they own the stock of two Delaware corporations, defendants herein. The corporation with which this interim application is concerned is the defendant, North River Securities Corporation. It is conceded that one of the matters for decision after trial will be whether the plaintiffs, Tom Bata and the executors of his mother's estate, or the defendant Jan Bata, owns the North River shares. It is not now necessary to relate the theories upon which the conflicting claims are made.

The principal asset of North River consists of bearer certificates representing 890 shares of stock of Leader A. G., a Swiss corporation. Leader controls all of the operating companies in the Bata enterprise with some minor exceptions. Plaintiffs recently applied to this Court for a receiver for North River on the ground, inter alia, that the conduct of North River's officials in permitting the Leader bearer certificates to remain in Switzerland threatened to nullify any decision by this Court as to the ownership of the North River stock; it being obvious that the real value of North River stock is in North River's ownership of the Leader shares. Plaintiffs sought a receiver so that such receiver might get possession of the Leader certificates. This Court denied the receivership on the condition that the Leader certificates be brought back from Switzerland and deposited with the clerk of this Court. This condition was promptly met by the officials of North River and the Leader certificates are now subject to this Court's control.

It appears, however, that some time during World War II an attempt was made by the Swiss mandatories of Leader[1] (now the defendants Jucker and Berger) to supersede these bearer Leader certificates held by North River. The reasons for so doing are not now important. The attempt to supersede came about by causing the same shares of Leader allegedly held by North River to be registered on Leader's books as belonging to B. S. F. Stiftung, a Swiss corporation. [35 Del.Ch. 157] Registered certificates for the 890 shares plus others were issued to B. S. F. and such certificates are still in Switzerland. B. S. F. is admittedly controlled by the same Swiss mandatories who

Page 521

control Leader. However, they are not parties defendant here in their capacities as ...


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