, 1885-03-07


ty out Of the handA Of its constituted man
Rgoment and to place II In tho hands Of
receiver. II the provision can have effect
only as supplemental to some such statute
It would be wholly unnecessary because
cumulatively for what the statute itself
provided. II cannot DO denied thai any
individual may sue a corporation a. he
would sue another individual. II there is
any exemption 10 the corporation In such
suit from 4 demonstration Of its property
In the hands Of q receiver Il can only be
upon the ground that It's corporate powers
boing derived from tho sovereign and ex-
ercised for the benefit Of tho public can
not be lnterfered with by the courts at the
suit Of an individual. This exemption, n
thore be any such, H. for tho benefit Of the
sovereign, not for that Of tho corporation.
May not the provision which the Callfor-
mia court rojecied as without effect, bo
considered a. the giving up by the sover-
eign Of this emption in tho particular cases
specified. This interpretation would be
much strengthened II tho position % 4
sound one that courts Of equity have no
authority In any casqsby virtue of their
ordinary equitable jniis1ict 70 appoint
reoolvor, for corpornfions.
Tho plain molninQ of thls provision. IN
my opinion, with al deference 10 so ~
specialize tribunal as the Supreme Court
OF ofCalifornia, Is that receivers may be ap-
pointed for corporations IN suits againsi
such corporations when, according 10 the
ordinary practice Of the court, recolvera
may he appointed IN suits botwcon lndi-
viduals, With the proviso that the corpOr-
alton mast be insolvont, or In danger Of
Insolvency.
The next ground Of demurrer 4 that
there is a defect Of parties defendant In
that the action Is brought against a single
ka1Aaa Il a
alton and all the delinquent stockholders
should have been made parties defendant
The receiver represents tho corporation,
and II would be worse than useless TO re-
quire the latter 10 como into court 10 de-
fend an action brought by lis own repre-
sentative 10 enforce a liability 10 taelf.s Il
is already party 70 another action 10
which this action Is but auxiliary and in
which all its interest In any thing Of value
recovered In shis action may be fully pro-
tectod.
As 10 the claim that the receiver should
have sued all Of tho delinquent stock
holders in an action, Il seems a sufficient
answer to say that It does not appear
from the complaint that there arc other
delinquent stockholders. But concodlur
that there are other delinquents, / do not
think the receiver obliged 10 move against
all Of them IN one action. Tho complaint
80 oAN NAN NAAlA VI NAAl N0AAN IN AAU 0NlN@
idal action, directing an assessment Of Is
por cent. upon all unpaid subscriptions,
and directing the bringing Of suit against
all ockholdors, who should fail AFTER no.
tice to pay the assessment. The nature Of
the original action IL not described IN the
complaint, but every presumption as 10
its character will be indulged which will
uphold the validity Of the order. / think
we may conclude therefore; That the A.
. fs.g. L.. - -
take an account Of the debts and assets Of
the corporation, OF the amount Of capital
not paid in, and OF the amount duo from
each stockholder, and from all this could
intelligently detormlne the amount re-
quired to bo paid BY each Delinquent 10
make up fund for the liquidation u tho
corporaie debts. Upon ali Of tho cues
tons which the court had before L In
making the order Of assessment, the stock
holders are concluded.
Singer vs.. Upton, assignee, Of, U. 8. IS.
In the case last cited, which was an action
by an assignee In bankruptcy for the ro-
covery Of unpaid stock subscriptions TO
the bankrupt corporation, the court says:
. She lthe delinquent stoclholderl might
have applied TO tho district court 70 revoke
or modify the order. Had she done 20,
she would have been entitled to be heard,
but 4 does not appear that any such APP
Fae~NAea WsA4 AAaAaas ~ n nAuNAnQAuNN NuC
was an integral part Of the corporation,
and in the view Of the law she was before
the court In all the proceedings touching
the body1 Of which she was a member.
In point Of fact stockholders In such cases
can hardly be ignorant Of the measures
taken % reach the effects Of the corpora
ton. II they choose TO rost suplno until
cases against them like this one on trial
they must take the consequences. Not
having spoken before they cannot be per-
mitted TO speak then, especially 10 make
an objection which looks rather TO embar-
rassment and delay than to the right and
Justice OF the case"
This reasoning docs not proceed upon
any doctrine peculiar 70 bankrupt courta,
but 10 applicable to all courts dealing with
corporations and their stockbolders-
II this position be correct, there arc but
two questions left open TO the stockholders
to litigate in this case.
These questions are;
charged a Stoclholderf
2. II be is a stockholdor does he owe