consolidation with other corporations or individuals without the consent of the state, and that it should, therefore, be dissolved. The statutes of most states provide that non-user of corporate powers for a certain period, usually one year, is sufficient cause for the dissolution of a corporation in a proper action usually brought by the attorney general. A corporation is not necessarily dissolved by reason of its insolvency or bankruptcy. Indeed the bankruptcy law provides for the discharge of a corporation, and several cases of the discharge of a bankrupt corporation are known.1 460. Corporate receivers.-When a corporation becomes involved in financial difficulties and the rights of creditors, secured and unsecured, and of stockholders are endangered, a receiver is usually appointed. A receiver is a ministerial officer of an equitable court appointed as an impartial and indifferent person between the parties to a suit, to take possession of and to preserve during litigation, and for the benefit of those ultimately entitled, the fund or property which is the subject of the suit, whenever it does not seem equitable for any party to the contest to have possession and control thereof. 461. Classification of receivers.-There are two kinds of receivers, common law and statutory. At common law a receiver may be appointed before or after final judgment on the application of a party who establishes an apparent right to, or interest in certain property, where it is in the possession of an adverse party, and there is danger that it will be removed beyond the juris 1 The Marshall Paper Company, the Vehicle Equipment Company, and the Tenny Company, have all gone through bankruptcy and have been discharged. diction of the court, lost, materially injured or destroyed. In each state the statutes provide for the appointment of a receiver for various reasons, as for example, to preserve property during insolvency proceedings against a corporation. The cases in which equity without special statutory sanction will appoint a receiver may be enumerated as follows: 1. To right some fraud of corporate officers. 2. To set aside a fraudulent transfer of corporate property. 3. To convey corporate property for the benefit of creditors, which property by law cannot be seized in execution by a sheriff. 4. To foreclose a mortgage. 5. To carry on the affairs of a corporation where there is a dead-lock in the management of the corporation's business by reason of dissensions among the directors. 6. In insolvency proceedings, to take possession of the property and to distribute it amongst the creditors and those ultimately entitled to it. 462. Appointment of a receiver.-Receivers may be appointed on the petition of a secured creditor, an unsecured creditor or of a stockholder, although equitably courts are reluctant to grant the petitions of stockholders or unsecured creditors. Where, however, a stockholder is in the minority and the directors are guilty of gross mismanagement or fraud or manifest oppression the conduct of the corporation will be withdrawn from the directors and given to a receiver. Sometimes the corporation itself through its directors will apply for a receiver, to whom has been applied the term "friendly receiver." Inasmuch as a receiver should be an impartial and indifferent person it has been objected quite frequently that the term "friendly receiver" is a misnomer, and that where a person is appointed on the petition and on the nomination of the directors of a corporation the appointment is contrary to equitable rules and unjust. 463. Powers of receivers.-The powers of receivers are derived from three sources: 1. The common law or the statute under which he is appointed. 2. The order appointing him. 3. Subsequent directions from the court. When a receiver is in doubt as to the correct course to pursue he should apply for special direction from the court whose agent he is. The appointment of a receiver for an insolvent corporation suspends its right to exercise corporate functions, and the right to sue becomes vested in the receiver. Conversely, an action brought against the corporation should be brought against the receiver, although on this point authorities are not harmonious. A receiver may not be sued without the express permission of the court which appointed him. PART VI: PROPERTY CHAPTER XXVIII PROPERTY IN LAND 464. Definitions.-While the subject of real property has only a slight interest for the man in general business, it is important enough to deserve some space in this volume. The term "property" is used to indicate material objects or to designate the estate which one has in such objects. Property is usually divided into two classes, real and personal, the first of which consists of land and things so annexed thereto as to become a part of the land, and the second of which consists of movable things not so annexed to real property as to become a part thereof. Property in land may be real property or personal property. Where the estate is for the life of the possessor or descendible to his heirs, the possessor has a freehold estate. These estates are known to the law as real estates or real property; all other estates are personal property, and are known as estates less than freehold. Property may be corporeal or incorporeal, depending on whether it is tangible or intangible. EXAMPLE 390. A owns an acre of land together with a house and its fixtures. He grants to B a right of way over one corner of his acre of land. Here A's property is corporeal and B's is incorporeal. 390a. A owns a watch and a model of a machine he has just invented. He secures a patent and assigns it immediately to B, who also has a copyright on a book describing the patent. B has loaned A $500 which A promises to repay. B owns also shares of stock, bonds and promissory notes. Here A has corporeal personal and B has incorporeal personal property. 465. Duration of estates in land.-An estate in land is an interest which one has in it. At the same time many different estates may exist in the same land. These various interests will become apparent upon studying the various forms of estates hereafter mentioned. Estates may be divided: 1, As to quantity; 2, as to the number and connection of the owners; 3, as to whether they are qualified or unqualified in their nature, and 4, as to the time when the enjoyment begins. 466. Freehold estates.-Estates may be freehold or less than freehold. Freehold estates, which endure forever, or for a life, are again divided into estates of inheritance, called estates in fee, and life estates, whether for the life of the owner or for the life of some other person. Estates of inheritance at common law were divided into estates in fee simple, which descended generally to the heirs of the owner, collateral as well as lineal, and estates in fee tail which descended in a direct line only and which might be limited to particular heirs, as for example, the eldest male heir, etc. In this country estates in fee tail have been abolished or modified in most jurisdictions. Life estates are divided into conventional life estates and legal life estates. The former are created by deed or will and the latter by law. The conventional life |