CHAPTER 117. violation of their duties as such directors, managers, trustees or other HLXI. officers: 3. To suspend any such trustee or officer from exercising his of fice, whenever it shall appear that he has abused his trust: 4. To remove any such trustee or officer from his office, upon proof or conviction of gross misconduct: 5. To direct new elections to be held by the body or board duly authorized for that purpose, to supply any vacancy created by such removal: 6. In case there be no such body or board, or all the members of such board be removed, then to report the same to the governor, who shall be authorized, with the consent of the senate, to fill such vacancies: 7. To set aside all alienations of property made by the trustees or other officers of any corporation, contrary to the provisions of law, or for purposes foreign to the lawful business and objects of such corporation, in cases where the person receiving such alienation knew the purpose for which the same was made: and, 8. To restrain and prevent any such alienation in cases where it may be threatened, or there may be good reason to apprehend that it is intended to be made. SEC. 4. When any of the visitatorial powers enumerated in the pre- Construction of ceding section, over any corporation, are or shall be vested, by sta- last section. tute, in any corporate body or public officer, the provisions of that section shall not be construed to divest or impair the powers so vested. SEC. 5. The jurisdiction conferred by the third section of this chap- Proceedings to ter, shall be exercised as in ordinary cases, on bill or petition, as the execute powers. case may require, or as the court may direct, at the instance of the attorney general prosecuting in behalf of the people of this state, or at the instance of any creditor of such corporation, or at the instance of any director, trustee or other officer of such corporation, having a general superintendence of its concerns. erty. SEC. 6. Whenever a judgment at law, or a decree in chancery, Sequestrating shall be obtained against any corporation, incorporated under the corporate proplaws of this state, and an execution issued thereon shall have been returned unsatisfied in part or in whole, upon the petition of the person obtaining such judgment or decree, or his representatives, the circuit court within the proper county may sequestrate the stock, property, things in action and effects of such corporation, and may appoint a receiver of the same. decree. SEC. 7. Upon a final decree on any such petition, the court shall Distribution upon cause a just and fair distribution of the property of such corporation, and of the proceeds thereof, to be made among the fair and honest creditors of such corporation, in proportion to their debts respectively, who shall be paid in the same order as provided in the next succeeding chapter, in the case of a voluntary dissolution of a corpora tion. SEC. 8. Whenever any incorporated company shall have remained Surrender of insolvent for one whole year, or for one year shall have neglected or corporate rights refused to pay and discharge its notes or other evidences of debt; or for one year shall have suspended the ordinary and lawful business of such corporation; it shall be deemed to have surrendered the rights, privileges and franchises granted by any act of incorporation or ac TITLE XXIV; quired under the laws of this state, and shall be adjudged to be dis CHAPTER 117. Proceedings against certain insolvent corporations. 1 Paige, 511. 2 do 451. Who may apply for injunction, &c. Court may appoint receivers. Powers and obli vers. solved. SEC. 9. Whenever any corporation having banking powers, or having the power to make loans, on pledges or deposites, or authorized by law to make insurances, shall become insolvent or unable to pay its debts, or shall neglect or refuse to pay its notes or evidences of debt on demand, or shall have violated any of the provisions of its act or acts of incorporation, or of any other act binding on such corporation, any court having equity jurisdiction, may, by injunction, restrain such corporation and its officers, from exercising any of its corporate rights, privileges or franchises, and from collecting or receiving any debts or demands, and from paying out, or in any way transferring or delivering to any person, any of the moneys, property or ef fects of such corporation, until such court shall otherwise order. SEC. 10. Such injunction may be issued on the application of the attorney general in behalf the people of this state, or on the application of any creditor or stockholder of such corporation, upon bill or petition, filed for that purpose, and upon due proof of any of the facts in the last section required, to authorize the issuing of the same. Whenever such injunction shall issue against any bank, for any violation of its charter, on the application of any creditor, the court shall proceed to final decree in such case, and adjudge a forfeiture if the proof is sufficient, notwithstanding such creditor may settle with such corporation, and relinquish his claim against said corporation, and in all such cases, the attorney general, under the direction of the governor, or any creditor, shall have the right to appear and prosecute such suit, and such suit shall not be discontinued if either of them so appear and prosecute such suit to final judgment. SEC. 11. Upon such application being made, and in any stage of the proceedings thereupon, the court may appoint one or more receivers, to take charge of the property and effects of such corporation, and to collect, sue for and recover the debts and demands that may be due, and the property that may belong to such corporation, who shall, in all respects, be subject to the control of the court. SEC. 12. Such receivers shall possess all the powers and authority gations of recei- conferred, and be subject to all the obligations and duties imposed in the next succeeding chapter, upon receivers appointed in case of the voluntary dissolution of a corporation. 4 Paige, 224. When stockholdere, &c., may be made parties. Making directors, &c., parties after docree. SEC. 13. If such application be made by a creditor of any corporation, whose directors or stockholders are made liable by law for the payment of such debt in any event or contingency, such directors or stockholders may be made parties to the bill or petition, either on the filing thereof, or in any subsequent stage of the proceedings, whenever it shall become necessary to enforce such liability. SEC. 14. If any creditor of a corporation desire to make such directors or stockholders parties to the suit, after a decree therein against the corporation, he may do so, on filing a supplemental bill against them, founded upon such decree, and if such decree was rendered in a proceeding instituted by the attorney general, such creditor may, on his application, be made complainant therein, with or instead of the attorney general, and may, in like manner, make the directors and stockholders sought to be charged, defendants in such suit. SEC. 15. Whenever any creditor of a corporation shall seek to CHAPTER 117. charge the directors, trustees or other superintending officers of such TITLE XXIV. corporation, or the stockholders thereof, on account of any liability created by law, he may file his bill for that purpose in any court hav- Bill against stock. ing chancery jurisdiction, which shall possess jurisdiction to enforce holders, &c. such liability. SEC. 16. The court shall proceed thereon as in other cases, and Proceedings when necessary, shall cause an account to be taken of the property thereon. and debts due to and from such corporation, and shall appoint one or more receivers, who shall possess all the powers conferred, and be subject to all the obligations imposed on receivers, by the next succeeding chapter, in case of the voluntary dissolution of a corporation. SEC. 17. But if, on the coming in of the answer, or upon the taking of any such account, it shall appear that such corporation is insolvent, insolvent. and that it has no property or effects to satisfy such creditor, the court may proceed, without appointing any receiver, to ascertain the respective liabilities of such directors, and stockholders, and enforce the same, by its decree, as in other cases. Proceedings if corporation be property. SEC. 18. Upon a final decree being made upon any such applica- Distribution of tion to restrain a corporation, or upon any such bill filed against directors or stockholders, the court shall cause a just and fair distribution of the property of such corporation, and of the proceeds thereof, to be made among its fair and honest creditors, in the order and in the proportions prescribed by the next chapter, in the case of a voluntary dissolution of a corporation. SEC. 19. In all cases in which the directors or other officers of a When stockholdcorporation, or the stockholders thereof, shall have been made parties pay on stock held ers compelled to to a suit in which a decree shall be rendered, if the property of such by them. corporation shall be insufficient to discharge its debts, the court shall proceed to compel each stockholder to pay in the amount due and remaining unpaid on the shares of stock held by him, or so much thereof as shall be necessary to satisfy the debts of the company. ment by direct SEC. 20. If the debts of the company shall remain unsatisfied, the Enforcing pay. court shall proceed to ascertain the respective liabilities of the direc- ors, &c. tors or other officers, and of the stockholders, and to decree the amount payable by each, and enforce such decree as in other cases. SEC. 21. Upon any application to the court having jurisdiction, in Discovery by any of the cases provided in this chapter, such court may compel such corporation to discover any stock, propery, things in action or effects alleged to belong, or to have belonged to it, the transfer and disposition thereof, and the consideration, and all the circumstances of such disposition. 3 Paige, 231 ficers, &c. SEC. 22. Every officer, agent or stockholder of any corporation, against which proceedings shall be instituted, according to the pro- Discovery by of visions of this chapter, and every person to whom it shall be alleged that any transfer of any property or effects of such corporation has been made, or in whose possession or control any such property or effects shall be alleged to be, may be compelled, in the discretion of the court, to answer a bill filed to obtain any discovery in the preceding section specified, noth withstanding such answer may expose the corporation of which he is a member, to a forfeiture of its corporate rights, or any of them. SEC. 23. The answers of the officers and agents of any corporation, Answers, how shall be evidence against the corporation, in the same manner, and to far evidence, and how compelled. the same extent as if such answers had been given upon an examina CHAPTER 118. TITLE XXIV. tion of such officers or agents, as witnessess in the cause, and such officers or agents may subsequently be examined as witnesses by either party, under the order of the court, but no such answer shall be compelled, unless by special order of the court. Answer, &c., not dictment. SEC. 24. Neither the answer of any such officer or agent, nor his to be used on in- testimony upon any such subsequent examination, shall be used as evidence upon any indictment, or other criminal prosecution or proceeding against him. Staying proceed. ings at law. Certain corpora- SEC. 25. Whenever any bill shall be filed, or any application made against any corporation, its directors or other superintending officers, or its stockholders, according to the provisions of this chapter, the court may, by injunction, on the application of either party, and at any stage of the proceedings, restrain all proceedings at law, by any creditor against the defendants in such suit; and whenver it shall appear necessary or proper, may order notice to be published in such manner as the court shall direct, requiring all the creditors of such corporation to exhibit their claims and become parties to the suit, within a reasonable time, not less than six months from the first publication of such order, and in default thereof, to be precluded from all benefit of the decree, which shall be made in such suit, and from any distribution which shall be made under such decree. SEC. 26. The provisions of this chapter shall not extend to any incorporated library or lyceum society; to any religious corporation, or any incorporated academy or select school; nor to the proprietors of any burying ground incorporated under the laws of this state. Who may apply for dissolution. CHAPTER 118. OF THE VOLUNTARY DISSOLUTION OF CORPORATIONS, AND OF THE SECTION 1. Whenever the directors, trustees or other officers hav1839, p. 94, &c. ing the management of the concerns of any corporation, or the majority of them, shall discover that that the stock, property and effects of such corporation have been so far reduced by losses or otherwise, that it will not be able to pay all just demands to which it may be liable, or to afford a reasonable security to those who may deal with such corporation, or whenever such directors, trustees or officers, or a majority of them, shall for any reason, deem it beneficial to the stockholders that such corporation should be dissolved, they may ap ply to any court having equity jurisdiction, by petition for a decree dissolving such corporation, pursuant to the provisions of this chapter. Contents of application, &c. SEC. 2. Every such application shall contain a statement of the reasons which induce the applicants to desire a dissolution of the corporation; and there shall be annexed thereto, 1. A full, just and true inventory of all the estate, both real and personal, in law and equity, of such corporation, and of all the books, vouchers and securities relating thereto : 2. A full, just and true account of the capital stock of such corporation, specifying the names of the stockholders, their resi dence when known, the number of shares belonging to each, the amount paid in upon such shares respectively, and the amount still TITLE XXIV. due thereon: 3. A statement of all incumbrances on the property of such corporation : 4. A full and true account of all the creditors of such corporation, and of all engagements entered into by such incorporation, which may not have been fully satisfied and canceled, specifying the place of residence of each creditor and of every person to whom such engagements were made, if known, and if not known, the fact to be so stated; the sum owing to each creditor; the nature of each debt or demand; and the true cause and consideration of such indebtedness in each case. CHAPTER 118. SEC. 3. To every such petition there shall also be annexed an affi- Affidavit. davit of the applicants, that the facts stated in such application, and the accounts, inventories and statements contained therein or annexed thereto, are just and true, so far as the applicants respectively know or have the means of knowing. cause. OF THE AMRARY SEC. 4. Upon such petition, accounts, inventories and affidavits be- Order to show ing filed, an order shall be entered requiring all persons interested in such corporation, to show cause, if any they have, why such corporation should not be dissolved, before some master in chancery, to be named in such order, at some time and place to be therein specified, not less than three months from the date thereof. paper as the lished. SEC. 5. Notice of the contents of such order shall be published, Notice, how pubonce in each week for three weeks successively, in such court may direct, and in a newspaper published in the county where the principal place of conducting the business of such corporation shall be situated, if any newspaper be published in such county. SEC. 6. On the day appointed in such order, such master shall pro- Proceedings of ceed to hear the allegations and proofs of the parties, and shall take testimony in relation thereto, and shall, with all convenient speed, report the same to the court, with a statement of the property, effects, debts, credits and engagements of such corporation, and of all other matters and things pertaining to such corporation. master. Master to have SEC. 7. Such master shall be entitled to the use of the original pe- petition, &c. tition and schedules annexed thereto, if he require the same, by an order on the register of the court with whom they may be deposited, and shall return the same with his report. tion to be dissolv SEC. 8. Upon the coming in of the report of the master, if it shall When corporaappear to the court that such corporation is insolvent, or that for any reason, a dissolution thereof will be beneficial to the stockholders, 1 Paige. 258. and not injurious to the public interest, a decree shall be entered, dissolving such corporation, and appointing one or more receivers of its estate and effects; and such corporation shall thereupon be dissolved, and shall cease. ed receivers, to SEC. 9. Any of the directors, trustees or other officers of such cor- Directors, &c., poration, or any of its stockholders, may be appointed receivers, who may be appointupon entering upon the duties of their appointment, shall give such give security. security to the people of this state, and in such penalty as the court shall direct, conditioned for the faithful discharge of the duties of their appointment, and for the due accounting for all moneys and effects received by them as such receivers. SEC. 10. Such receivers shall be vested with all the estate, real and Rights of recei personal, of such corporation, from the time of their having filed the vers. |