In Re Mercantile Guaranty Co.

State of California appeals from summary judgment dismissing its complaint in intervention in the voluntary dissolution proceedings of Mercantile Guaranty Company.

Questions Presented

1. Have the California courts jurisdiction to wind up the affairs of a foreign corporation as to its property within the State ?

2. Has the State an interest in this proceeding ?

Record

Mercantile is a Delaware corporation organized in 1924 with its principal place of business in San Francisco. Since 1960 it has become inactive in the business of finance for which it was organized except for the holding of the stocks comprising its assets and the collection of dividends thereon.

Mercantile’s capital structure consists of 4,000 shares of issued and outstanding $25 par value 8 per cent cumulative redeemable preferred stock, and 4,000 shares of no par value common stock. Its bylaws provide that whenever the cumulative dividend is 18 months in arrears the preferred shares are entitled to voting rights. As no dividends have been paid on the preferred stock since 1929 all preferred shares are now entitled to vote. Mercantile’s articles provide that on dissolution its assets shall be distributed,…