Carson City daily appeal. [volume] (Carson City, Nev.) 1907-1930, 1908-06-27
IS THE OPINION OF
PROMINENT ATTORNEY
State Not Being Creditor Has
No Jurisdiction in the Mat
ter. Receiver WildeS
Merely Custodian Of
Banks Assets

stockhoider. and has no interest in
the funds or property of the bank.
The state has no authority or juris-
diction, except to forfeit its franchise
to be a corporation, and can act only
so far as it's Interests are involved.
In the early history of corporations,
when a corporation ceased to exist
from any cause, the assets of the cor
poration being reverted to the crown,
or eschewed to the state; but that
doctrine Icing found unjust. dishon-
orable and inequitab1e. is no longer
applicable to corporations, and the
rule is now universal. upon the in
solvency of a corporation or its death
from any cause, the assets of the cor
poration at once become a trust fund
to be administered by the directors
of the corporation in dissolution pro-
ceedings. for the benefit Of the cred
itors. and if these directors are un-
fit men the corporation can elect new
men for this purpose: but II both di-
rectors and stockholders occupy an
, invincible position and are untrust-
worthy. then the creditors. being the
persons who are entitled to the fund,
can prosecute suit in equity. In
which proceeding the court can ap-
pOint a receiver, who can be given
full authority in the premises.
! This is no new law or theory OF
mine. but 1t is and always has been
the law OF corporations. Corpora
tfons are simply the creations Of law.
=; and they can act only through the
powers conferred upon them. and the
power to acquire. own and possess
property is gwen to their corporation
by the law under which it is Gre
ated, and its articles Of incorpor
ation When 1t has acquired prop
erty. such property belongs to the
corporate entity and not to the state
The state has no interest in its prop.
erty any more than 1t has in the prop.
erty Of private individual, and thu
state can no more take charge Of II,
property. through the attorney gen
; eral and :. he courts, than it can TAX,
charge Of the property Of a private
individual. When the corporation
, dies from any cause. its propert
. passes nrst to the creditors. and
after the creditors are paid there re
: mains an asset. such asset passes t
. the stocA Aolders. The state has n
!. interest in 1t and no Jurisdiction owe
, It. The state having given the cor
!. pOration life may take away that life
!. In 30 doing 1t may appoint receiver
!. but such receiver can Oniy hold tn
!. property temporarily, until those VIII
I. have the right and upon whom
!. thrust the duty. shall proceed to win
;. mp the affairs Of the corporation. TIL
assets are the property Of the cred
. tors. the same as upon the death I
an individual the property Of the de
!, cedent passes to his heirs. AS
said by Chief Justice r~"tty, in Ha
:. ermeyer VS.. Superior Conrt, "a Ca
. 327: Notwithstanding the provi.
!, ions OF the code of California, iecla
- ing that receiver may be appointe
In cases where a corporation has bee
dissolved, or is insolvent or in dal
ger Of insolvency. or has forfeited /
rights, a court which enters a jud,
ment OF forfeiture, against a corpor
ton. or suit OF the state for abu
es Of its franchises has no power
appoint receiver of the corpora
assets. unless at the instance of son
person Interested as a creditor
stock -~.uer. When a corporate,
ceases to exist, no matter from VIII
cause its property is left to be d
posed OF according to law; It new
reterts to its grantors nor esches
to the state. The directors Of a &C
poration at the time of its disso
tion are trustees Of tie creditors a
stockholders and have full power
settle it's affairs. They may be ca
ed to account in a court of equity
an appropriate action by any party
interest, bnt until SO called to +;
count no court has any power to &
point receiver to take pOssess
OF the corporate property, or to 9th
wise exercise the functions of s,
directors. Upon the forfeiture OF
charter OF corporation for abuses
Its franchise. its property is not 1
feited to the state, but Is held by