[§ 2943 remedies.39 If a certificate has been lost and has come into possession of another or has been wrongfully transferred to him, the person aggrieved may sue for a retransfer or reinstatement of his rights, and may join the corporation with the wrongdoer or the holder.40 If fictitious or fraudulent stock be issued, the corporation must respond in damages to the person ignorantly taking it for value.41 A denial of the right to share in new issues may be redressed by an action for damages or by an injunction against defeating it by imposing unlawful conditions.42

In proper cases not trenching on the discretion of the directors in that regard equity may compel them to declare proper dividends on preferred as well as on common stock. Preferred holders have the additional remedy of a suit to prevent or redress payment to common stockholders in violation of the preference. After declaration the remedy is by assumpsit against the corporation, not the directors or officers unless circumstances of a personal liability have intervened. Mandamus is not the proper remedy either to compel declaration or payment.43

For a denial of the right to inspect books and papers the usual remedy is mandamus against the corporation and the officers, or either, or else by statutory remedy for like relief, or in exceptional cases equitable relief will be afforded. Action for damages will also lie; and a penalty is sometimes imposed to be recovered by the stockholder or the public. A stockholder who stands as a creditor, or who has a con

39 See chapter on Stock and Stockholders, subd. Refusal to Transfer, infra.

40 See chapter on Stock and Stockholders, subd. Forged and Unauthorized Transfers, infra.

41 See chapter on Stock and Stockholders, subd. Rights, etc., on Ficti tious Certificates, infra.

42 May sue for damages for refusal of privilege of sharing in new issue unless an illegal premium be paid. De la Cuesta v. Insurance Co. of North America, 136 Pa. St. 62, 658, 9 L. R. A. 631, 20 Atl. 505, 26 Wkly. Notes Cas. 377.

Cunningham's Appeal, 108 Pa. St.

546.

Remedies of stockholders as to rights in new stock, see chapter on Stock and Stockholders, subd. Increase and Reduction of Stock, infra. 43 See chapter on Stock and Stockholders, subd. Dividends, infra.

44 See Chapter 46, Inspection of Books and Papers, and chapter on Stock and Stockholders, subd. Right to Inspect Books and Papers, infra.

45 A stockholder who is also a creditor may sue as such to enforce his debt in priority to a mortgage made by it. Langston v. Greenville Land & Improvement Co., 120 N. C. on 132, 26 S. E. 644. See also § 2944, infra.

May have injunction against exaction of unlawful premium right to share in new issue.

In re

tract with the corporation 46 may have the usual remedies for the enforcement of his rights in that respect.

§ 2944. Remedies of creditors. It has already been seen that the corporation is amenable to the ordinary actions for the recovery of debts.47 Hence a creditors' bill will lie against a corporation, and its judgment purchasers who took subject to plaintiff's lien.40 The remedies of creditors of natural persons are equally available to creditors of corporations with the addition of remedies against the stockholders and officers to follow stock liabilities or official liabilites, given by the common law or by statutes; but, ordinarily, these remedies do not take over the management of the corporation except as that is incidentally interfered with by receivership or other like custody or by liquidation and dissolution.50 Generally if the corporation is insolvent or being liquidated the remedies of creditors are worked out through the receiver or other liquidator.51 In some states, as in New York, a remedy by sequestration of assets is given against certain kinds of corporations, and is applied for by petition or by suit as the statute

46 A member who has a contract with the corporation incident to membership may have an accounting of money paid into the coporation thereon, though the scheme is illegal, he not being in equal wrong. Edwards v. Michigan Tontine Inv. Co., 132 Mich. 1, 92 N. W. 491, 9 Det. L. N. 502.

The fact that on learning of defendant's fraud plaintiff ceased payments does not affect his remedy. Bale v. Michigan Tontine Inv. Co., 132 Mich. 479, 93 N. W. 1071, 9 Det. L. N. 707.

47 See $2939, supra.

48 See generally chapter on Execution, Supplementary Proceedings, and Creditors' Suits, infra; and see also, Kittel v. Augusta, T. & G. R. Co., 65 Fed. 859.

A creditor's bill will lie against the corporation and its stockholders where its assets have been divided among them and it is solvent but execution proof leaving plaintiff unpaid. Brewer v. Michigan Salt Ass'n, 58 Mich. 351, 25 N. W. 374.

49 A creditor of a defunct railroad corporation may sue in equity to subject the railroad in the hands of execution purchasers to his claim for work done in construction of the road, it being by law a charge or lien which follows the property to a successor. Shamokin Valley & P. R. Co. v. Malone, 85 Pa. St. 25.

50 Creditors' actions to reach unpaid subscriptions, see chapter on Insolvency, infra.

Creditors' actions to reach statutory liability of stockholders, see chapter on Stock and Stockholders, subd. Personal Liability to Creditors, infra.

Creditors' actions to hold officers for debts, see Chapter 42, supra.

51 Receivers' and assignees' suits against stockholders, on subscription or on statutory liability, see Chapter 17, supra, chapters on Insolvency; Receivers; Bankruptcy; Forfeiture and Dissolution, infra.

admits of.52 Statutory proceedings by a creditor to wind up and dissolve the corporation at the suit of a creditor also are prescribed in some of the states.5 53 When a creditor's suit is based on a judgment against a foreign corporation, it is important to distinguish between judgments in personam and those in rem by attachment only. The latter are not binding as to any personal liability and charge only the property attached and thus subjected to the judgment. Other assets cannot be subjected without establishing the debt and exhausting legal remedies.54 A single bond holder may sue on his bond in assumpsit although it is one of an issue equally and without priority secured by mortgage to a trustee as recited in both bond and mortgage; but the judgment recovered, if any, cannot be enforced against the security.55

§ 2945. Ancillary remedies and proceedings; discovery, injunction, receivers, etc. Where the corporation is plaintiff the incidental and ancillary remedies may be invoked without raising any question of corporation law, but where it is defendant and they are invoked against it questions arise of its capacity to be subjected to the process by which such remedies are applied, and of the propriety of applying them when visitation and management would be involved. It is well settled that while the corporation itself is incapable of making a discovery, or a disclosure before trial which is the modern statutory substitute, yet its officers and stockholders may be joined or subpoenaed for that purpose, provided there is a case made in the bill for equity, or a suit shown to be pending or about to be brought, to which such discovery is necessary or proper.56 The remedies of in

52 See N. Y. Code Civ. Proc. §§ 1784, 1793, now Gen. Corp. Law, §§ 100, 112.

The statutory remedy of sequestration extends only to corporations of the kind specified, not to a library corporation. In re Brooklyn Lyceum, 3 Edw. Ch. (N. Y.) 392.

A sequestration may be sought by bill through the statute allowed it to be prayed for by petition. Judson v. Rossie Galena Co., 9 Paige (N. Y.) 598, 38 Am. Dec. 569.

53 See N. Y. Code Civ. Proc. § 1785 et seq., now Gen. Corp. Law, § 101 et seq., and see also chapter on Forfeiture, Dissolution and Winding Up, infra.

54 Thomas v. Merchants' Bank, 9 Paige (N. Y.) 216.

IV Priv. Corp.-57

55 Western Pennsylvania Hospital v. Mercantile Library Hall Co., 189 Pa. St. 269, 42 Atl. 183, 43 Wkly. Notes Cas. 340; Com. v. Susquehanna & D. R. R. Co., 122 Pa. St. 306, 1 L. R. A. 225, 15 Atl. 448.

56 Though it cannot take an oath, discovery and an answer under oath binding on it may be had by joining members as co-defendants for that purpose. McKim v. Odom, 3 Bland (Md.) 407.

The bill must be one for relief against the corporation. Many v. Beekman Iron Co., 9 Paige (N. Y.) 188.

Discovery may be had against members and officers even though no relief is asked against them. Wright

junction and receivership as against the corporation are fully discussed elsewhere, and reference thereto will show when and how such remedies are to be had.57 They will not be allowed pendente lite if full, adequate and complete relief can be had without.58 A receiver will not be appointed merely to make a defense for the corporation against its majority stockholders suing it, but the minority applying for such receiver will be relegated to their right to make such defense by a stockholders' suit anticipating the threatened litigation or by an intervention to defend therein, if it shall be brought.59

§ 2946. Intervention and interpleader. The right and practice in intervention is governed either by equity practice or by statute, neither of which it seems treats corporations in any way different from natural persons.60 Corporations may file a bill of interpleader in a proper case, as where there are adverse claims to a dividend.61 When the corporation is sued and cannot or will not make a proper defense because of hostile control or adverse interest of officers or of the majority, a stockholder may intervene in its behalf on a proper showing and make the defense.62

v. Dame, 42 Mass. (1 Metc.) 237.

Discovery may be had of stockholders on a bill to charge them for the corporate debts; but if the case for relief fails the bill will not be retained for other relief purely legal. It will be retained when a case of fraud, account, accident or mistake appears. Middletown Bank v. Russ, 3 Conn. 135, 8 Am. Dec. 164.

Discovery as to corporate matters will not be allowed before judgment as a pure bill for discovery unless it is required to prosecute or defend a law action and also to be used therein. United New Jersey Railroad & Canal Co. v. Hoppock, 28 N. J. Eq. 261. Joining parties for discovery, see § 3026, infra.

Making discovery and effect thereof, see § 3110, infra.

57 See chapters on Injunction and Receivers, infra.

58 Injunction and receivership against transfer of stocks by a defendant corporation will not be decreed pendente lite if without its aid plaintiff can obtain full adequate

and complete relief. Hunnewell v. New York Cent. & H. River R. Co., 196 Fed. 543.

59 On a bill by minority stockholders against the corporation to regulate its affairs and defend it against a suit threatened by majority stockholders, a receiver will not be appointed on motion solely to defend such suit. The minority may do so. Blake v. Blake & Knowles Steam Pipe Works (N. J. Ch.), 94 Atl. 419.

See generally chapter on Stock and Stockholders, subd. Redemies of Stockholders, etc., infra.

60 A bill of intervention for receiver may be regarded as an original bill and tried and determined as such. Farwell v. Great Western Tel. Co., 161 Ill. 522, 44 N. E. 891. Parties in intervention, see § 3037, infra.

61 Salisbury Mills v. Mass. 115.

Townsend, 109

Parties on interpleader, see § 3037, infra.

62 See chapter on Stock and Stockholders, infra.

§ 2947. Admiralty and probate proceedings. Corporations have the same right as a natural person to maintain a libel in admiralty, in rem or in personam, to recover for salvage services or to enforce any other maritime contract, or to recover for a maritime tort. It appears to have been questioned only in the case of The Camanche, cited below, and the question there was not upon the capacity of the corporation to stand as a party in admiralty but as to the right of any but a person actually laboring or furnishing services to recover as a salvor. The books abound with cases where corporations have been libelants and also libelees in admiralty,63 and it may be assumed as settled that they may be libelees. But a libel will not lie to enforce a penalty under a statute which provides its own penal action.64 There also appears to have been no question that a corporation might prosecute or defend such rights as it may have in the courts of probate.65

§ 2948. Actions and proceedings of a penal nature. The capacity of the corporation to incur penalties is settled as has been shown in another chapter,66 and the procedure in penal actions will be governed by the rules applicable to natural persons, unless the penal statute itself defines a special procedure. At common law debt or a special action on the case is the appropriate form of remedy according to the nature of the penalty.67 A libel in admiralty will not lie to enforce a

63 The Camanche, 8 Wall. (U. S.) 448, 19 L. Ed. 397.

A corporation may perform salvage services in the same way that an owner of a vessel may by using his vessel though not personally laboring. The Camanche, 8 Wall. (U. S.) 448, 19 L. Ed. 397, citing The Island City, 1 Black (U. S.) 121, 17 L. Ed. 70. The court cites a number of other cases in which owners recovered salvage. Of them the following from England show that corporations were owners. The Pensacola, 1 Browning & Lush. 306; The Paul, Law Rep. 1 Ad. & Ec. 57; The Minnehaha, 1 Lush. 335.

Libel by corporation was entertained without question in The Guy C. Goss, 53 Fed. 839.

64 A libel in admiralty will not lie to recover a penalty under a statute providing a remedy, and if it might,

the corporation, it seems, ought to be a party with the vessel. Virginia & M. Steam. Nav. Co. v. United States, Taney 418, Fed. Cas. No. 16,973.

65 A church alleged to be a corporation, which is not denied, may sue for construction of a will containing a bequest to petitioner. First Bapt. Church v. Robberson, 71 Mo. 326.

66 Penalties, liability and capacity of corporation to incur, see chapter on Penalties and Crimes, infra.

67 3 Bl. Comm. 161.

For an example of a penal liability for damages under a statute requiring the fencing of railways, and of a procedure thereon, see Iba v. Hannibal & St. J. R. Co., 45 Mo. 469, wherein it was held that the statutory remedy was not exclusive of a common-law action for damages for negligence.