court of the United States having jurisdiction of the parties, against the corporation or its officers or agents to enjoin it or them from engaging in, or carrying on, or continuing in an ultra vires executory undertaking or transaction.

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(2.) Wrongs and frauds of corporate authorities,-Any bona fide shareholder, who, after making diligent effort to obtain a remedy through the officers, directors, or shareholders of the corporation, fails to obtain such relief; or who is able to show that it would be impossible to obtain such remedy through such channels; or who can show it would be unsafe to wait until such remedy could be so obtained or would be unreasonable to require him to seek such a remedy, may, upon behalf of himself and all other shareholders who have not been a party to such wrongful acts as hereinafter set forth, and who shall share in the expenses of such suit, maintain a suit in equity in any circuit court of the United States having jurisdiction of the parties, against such corporation and the wrongdoers or any of them, for wrongs threatened, or done to, or suffered by, such corporation arising from, (1) some action or threatened action of its board of directors beyond the authority conferred upon them; or (2) any fraudulent transaction, or transaction in breach of the trust confided in them, completed or contemplated by the directors, officers, managers or agents of such corporation, with other parties, among themselves, or the other shareholders, as will result in serious injury to the corporation, or to the interests of the complaining shareholders; or (3) where such directors, officers, managers or agents wilfully misapply or divert the corporate funds, or in breach of the trust confided in them, negligently allow the corporate funds to be misapplied or diverted so as to seriously injure the interests of the corporation or the shareholders; or (4) where such directors, officers, managers or agents, or a majority of them are acting for their own interests in a manner destructive of the corporation itself or of the rights of the shareholders; or (5) where the majority of the shareholders themselves are oppressively and illegally pursuing a course in the name of the corporation which is in violation of the rights of the other shareholders; to enjoin the completion or continuance of such threatened wrong and to compel restitution and compensation to be made therefor.

§ 160. Distribution on Dissolution. In case of dissolution or the reduction of the capital stock of the corporation, and a distribution of part of the capital, the shareholders shall share in the division of the sum

to be distributed in accordance with the preferences provided in the issue of the shares, if any; but if no such preference was provided for, the payments made on the shares shall first be equalized, and the balance distributed pro rata according to the face value of the shares; and the same method shall be applied, unless otherwise originally provided, in the distribution among the owners of shares entitled to preferences.

§ 161. Contribution. In case any shareholder shall be held to pay more than his proportionate amount in discharge of the debts of the corporation, he shall be entitled to contribution from the other shareholders, and may maintain actions against the same for their proportional amounts.

§ 162. Enjoin Changes. Any bona fide shareholder may enjoin any change, amendment, or modification of the charter or by-laws of the corporation, unless the same shall be made in accordance with the provisions of this Act; and in any case of a material amendment made as provided in section 94, or consolidation as provided in sections 96, 97, or selling out as provided in section 99, any dissenting shareholder who declares his dissent in writing at the meeting authorizing such amendment, consolidation, or selling out, may enjoin the same, until such corporation first pays him the full market value of his shares to be fixed by three disinterested appraisers appointed by the circuit court of the district in which the registered office of the corporation is located upon application of such shareholder or shareholders, and on reasonable notice to be fixed by the court and given to the corporation.

2. Liabilities.

§ 163. On Unpaid Shares. Every shareholder whose shares have not in fact been fully paid, whether issued for cash, property, services or otherwise, and whether part of the original issue or an increase thereof, or whether held by the original owner or a subsequent transferee, shall be liable to pay up, if necessary to discharge the corporate obligations incurred after the issue of such stock, the full face value thereof, or such part thereof as may be needed therefor, after the other corporate assets are exhausted. But trustees shall be liable only to the extent of the trust estate.

§ 164. Withdrawing Assets. Any stockholder who shall receive any part of the capital of such corporation by way of dividend, loan, or otherwise, unless the same shall have been paid to him in the

redemption of his shares or by way of reduction of the capital stock of such corporation as provided in sections 44, 95, herein, shall be liable to refund the amount so received, or so much thereof as may be needed therefor, to the corporation whenever the same shall be necessary to discharge the obligations of the corporation existing at the time of, or incurred subsequent to such dividend or payment. X. OFFICERS' RIGHTS AND LIABILITIES.

1. Rights.

§ 165. Manage. The directors, officers, and agents of the corporation, so long as they hold their offices shall have power, in good faith, within the scope of the authority delegated to them, to manage the ordinary corporate affairs in accordance with the provisions of this Act, without interference on the part of shareholders or others.

§ 166. Contracts With Corporation. Any contract made by or on behalf of the corporation by an officer thereof, in which he shall have a personal interest, or in which the directors or any of them may be personally interested, and whose presence was necessary to constitute a quorum of directors, or whose vote was necessary to such action, or between corporations represented by the same persons, or having common directors whose presence was necessary to a quorum, or whose votes were necessary to such action, may be avoided by the corporation, or by any shareholder thereof not a party thereto, on behalf of the corporation, provided the same shall not be, or have been, authorized by the shareholders before, or ratified or acquiesced in by a majority of the shareholders, after full report thereof and of such officers' interest therein has been made to a meeting of the shareholders. But nothing herein shall prevent the making of a valid contract between such corporation and any of its corporate officers and agents when such corporation is fully and completely represented by corporate officers and agents having no interest in such contract, and having the authority to make the same on behalf of the corporation.

§ 167. Salaries. The directors and general officers of the corporation shall be entitled only to such salaries as may be fixed in the by-laws, or by resolution of the shareholders; but, subject to the approval of the shareholders, the salaries of all other officers and agents may be fixed by the directors.

§ 168. Resignation. Every director and officer shall have the power at any time to resign from his office, and no acceptance shall be necessary to complete the same, providing such officer shall file notice thereof in the registered office of the corporation; and within thirty days thereafter a like notice in the office of the Commissioner of Corporations, and in the office of the Secretary of the Department of Commerce and Labor, for which no fees shall be charged. Until such notices are so filed, and until all the obligations incurred by such officer before his resignation, are fulfilled, he shall not be in any wise relieved from responsibility upon such obligations.

§ 169. To the Corporation. (1.) Fraud and negligence,―The directors and officers of such corporation shall be deemed to stand in a fiduciary relation thereto, and shall be bound to exercise good faith and the ordinary skill and diligence that prudent business men exercise in the conduct of their own affairs of like kind in the management, control, and supervision of the affairs, business, and the subordinate officers and agents of such corporation, and shall be jointly and severally liable in damages for fraud, embezzlement, wilful misconduct, or breach of trust committed for their benefit; ultra vires acts and transactions; giving away or disposing of the corporate funds without proper consideration; inattention, nonattendance or negligence allowing fraud or misconduct on the part of agents, officers, or co-directors, or resulting in the diversion, misapplication, dissipation, or waste of the corporate funds, and which could have been prevented by the exercise of ordinary care and attention to the corporate business; but no director, or officer, shall be so liable unless his own act, default, or negligence has contributed to, or made possible, such loss or damage to the corporation.

(2.) Enforcement,-Such liability may be enforced by the corporation in any proper form of action in any circuit court of the United States, having jurisdiction of the parties; or in case the corporation cannot or will not act, then a shareholder not consenting thereto may bring such action on behalf of the corporation as provided in section 159; or the receiver of the corporation appointed to wind up the corporate affairs, may maintain an action against such offending officers, on behalf of the corporation, its shareholders and creditors.

§ 170. To Shareholders and Purchasers.. (1.) False statements,The promoters, directors, president and secretary, who sign the Articles of Organization, or the Prospectus, shall be jointly and severally liable to any shareholder or purchaser of shares, bonds, debentures, for actual damages caused by the falsity of any statement contained in such documents, and which they know, or could by ordinary care know, to be false.

(2.) Watered stock and bonds,-For issuing stock, bonds, or debentures, unless cash, property, services, or expenses equal to the face value of such stock, bonds, or debentures (§§ 46 to 48) have been received or incurred by, or conveyed to the corporation, the president, secretary, and directors consenting thereto, shall be jointly and severally liable to any non-consenting shareholder or bona fide purchaser for value, for actual damages caused thereby. But any such officer may cause his dissent to be registered on the records at the time such action is taken, and if so entered in good faith, he shall not be liable thereon.

(3.) Particular wrongs to shareholders, -For failure or refusal to issue a certificate as provided in sections 153, or to receive the vote of a shareholder as provided in section 154, or to declare or pay dividends according to section 155, or to allow the records, papers, and books to be inspected or copied, or to furnish the copies required by section 156, or to transfer shares according to section 157, or to allow subscriptions to increases of stock to be made according to section 158, the officers or agents whose duty it is to recognize these rights of, or perform these functions for, the shareholders shall be liable for the actual damages to any shareholder resulting from such failure, refusal, or neglect, to be enforced in any court having jurisdiction.

§ 171. To Creditors. The officers and directors of every corporation, who authorize, participate in, or consent to any of the following acts or defaults, done or suffered during their period of holding office, shall in the event of the insolvency of such corporation, be jointly and severally liable for the debts and contracts of such corporation to the extent indicated:

(1.) Watered stock and bonds,—If stock, bonds or debentures are issued in violation of sections 46 to 48, to the extent necessary to pay the debts in full.

(2.) False reports,-If any certificate, notice, statement, or report, which is required by the provisions of this Act to be filed