be pursued at law, and there only; and by the statutes of New York, the mode of prosecution by information is directed, where there has been a misuser of the charter, or the franchises of the company are forfeited. (c) A court of chancery never deals with the question of forfeiture. It may hold trustees of a * 314 corporation accountable for abuse of trust, but the court cannot, without special statute authority, divest corporations of their corporate character and capacity. It has no ordinary jurisdiction in regard to the legality or regularity of the election or amotion of corporators. These are subjects exclusively of commonlaw jurisdiction. (a)

The mode of redress in New York, when incorporated companies abuse their powers, or become insolvent, has been the subject of several statute regulations, which have committed the cognizance of such cases to the court of chancery. (b) The Acts of 1817 and

(c) The New York Revised Statutes, vol. ii. pp. 581, 583, provide, that an information in the nature of a quo warranto, be filed by the attorney-general, upon his own relation, or upon the relation of others, when any person or association usurps or unlawfully holds any public office or franchise, or against any corporate body for misuser or nonuser of its franchises, or which does or omits acts which amount to a surrender thereof, or whenever they shall exercise any privilege not conferred by law. So the chancellor, on a bill filed by the attorney-general, may restrain, by injunction, any corporation from assuming powers not allowed by its charter, as well as restrain any individuals from exercising corporate rights or privileges not conferred by law. The neglect or refusal of a corporation to perform the duties enjoined by the statute creating it, is a cause of forfeiture, though the neglect or refusal should not proceed from a bad or corrupt motive.2 The People v. Kingston and Middleton T. R. Co. 23 Wendell, 193. And the information lies for any cause of forfeiture, and the remedy is not limited to scire facias. The People v. Bristol & R. T. Co., Ibid. 222. Thompson v. The People, 23 Wendell, 537. If only a single act of nonfeasance be relied on as a cause of forfeiture, it must be averred and proved to be a wilful neglect, but not so if there be a general state of neglect or default. The People v. Hillsdale & C. T. Co., Ibid. 254.

(a) Van Ness J., 3 Johns. 134. Slee v. Bloom, 5 Johns. Ch. 380. Attorney-General v. Earl of Clarendon, 17 Vesey, 491. Attorney-General v. Reynolds, 1 Eq. Cas. Abr. 131, pl. 10. Attorney-General v. Utica Insurance Company, 2 Johns. Ch. 376, 378, 388. The King v. Whitwell, 5 Term Rep. 85.

(b) The provisions in the New York Revised Statutes, relative to proceedings in equity against corporations, received a minute analysis and judicial construction by the

1 See, also, N. C. Rev. Code, p. 137. In Mass. (Stat. 1852, c. 312, § 42,) any person whose rights are endangered by the exercise of a franchise, not conferred by law, may apply to the Supreme Court for leave to file an information in the nature of a quo warranto. See Goddard v. Smithett, 3 Gray, 116.

2 See ante, p. [312,] notes.

.1821 (c) provided for the dissolution of incorporated insurance companies, by order of the chancellor, upon application of the directors, and for good cause shown; and the court of chancery, when it decreed a dissolution of the corporation, was to direct a due distribution of the funds, and to appoint trustees for that purpose. The Act of April 21st, 1825, (d) was much broader in its provisions. It contained many directions calculated to check abuses in the management of all moneyed incorporations, and to facilitate the recovery of debts against them. All transfers, by incorporated companies, in contemplation of bankruptcy, were declared void; and if any incorporated bank should become * 315 insolvent or violate its charter, the chancellor was authorized, by process of injunction, to restrain the exercise of its powers, and to appoint a receiver, and cause the effects of the company to be distributed among the creditors. This was a state of bankruptcy, in relation to incorporated banks; and it was an unusual provision, for the English bankrupt laws or the general insolvent laws of the several states never extended to corporations. (a) The New York Revised Statutes (b) have continued and enlarged the provision. When any incorporated company shall have remained insolvent for a year, or for that period of time neglected or refused to pay its debts, or suspended its ordinary business, it shall be deemed to have surrendered its franchises, and to be dissolved. (e) And whenever any corporation, having

*

vice-chancellor of New York, in the case of Mann, Receiver, &c. v. Pentz, 2 Sandf. Ch. 257, and again at p. 301; but such local regulations can only be referred to in a work of so general a nature as the present one.

(c) L. N. Y. sess. 40, ch. 146, and sess. 44, ch. 148.

(d) Sess. 48, ch. 325. See, also, to S. P. 1 N. Y. R. S. 603.

(a) There is a statute of bankruptcy in New Jersey, passed as early as 1810, in relation to insolvent banks and other corporations, with similar powers conferred upon the chancellor in respect to them. Elmer's Digest, p. 31. So also in Michigan, by Act of 1837, and by R. S. of New Jersey, 1847, p. 129.

(b) Vol. i. p. 603, sec. 4. Vol. ii. p. 462, sec. 31; p. 463, sec. 38.

(c) N. Y. Revised Statutes, vol. ii. p. 463, sec. 38. So, by a general law in North Carolina, (see their Revised Statutes, tit. Corporations,) when any corporation shall, for two years together, cease to act as a body corporate, such disuse of their corporate powers and privileges shall be considered and taken as a forfeiture of the charter. The statutes of Louisiana of 1842 and 1843 have provided for the facilities of the liquidation of banks solvent or insolvent, and whether their liquidation be forced or voluntary.

1 Such acts or neglect do not work a dissolution ipso facto, but entitle any stockholder or creditor to take proceedings to have its dissolution judicially declared. A judgment recov

banking powers, or power to make loans on pledges, or to make insurances, shall become insolvent, or violate any of the provisions of its charter, the court of chancery may restrain the exercise of its powers by injunction, and appoint a receiver. (d) 2 If the corporation proves, on investigation, to be insolvent, its effects are to be distributed among the creditors ratably, subject to the legal priority of the United States, and to judgments. (e) And whenever any incorporated company shall become insolvent, or it shall appear to the trustees or directors thereof that a dissolution of the corporation would be beneficial, application may be made voluntarily to the chancellor by petition, for a dissolution; and all sales, assignments, transfers, mortgages, and conveyances of any part of their corporate estate, real or personal, made after filing such petition, or any judgments confessed after that time, are declared to be void, as against the receivers to be appointed, and as against the creditors. (f) This last provision is to be taken as a qualification and limitation of the generality of a similar provision already mentioned in the Act of 1825. (g)

(d) New York Revised Statutes, vol. ii. pp. 463, 464, sec. 39, 41.

(e) Ibid. vol. ii. p. 465, sec. 48.

(f) Ibid. vol. ii. p. 469, sec. 71. In Missouri, by statute, upon the dissolution of any corporation, the president and directors, or managers thereof, at the time of its dissolution, are made ex officio trustees to settle its concerns. R. S. of Missouri, 1835.

(g) Under the English bankrupt system, a voluntary payment to a creditor, under circumstances which must reasonably lead the debtor to believe bankruptcy probable, is deemed a fraud upon the other creditors, within the meaning of the bankrupt law, and the money can be recovered back by the assignees. Poland v. Glyn, 2 Dowl. & Ryl. 310. The New York provision falls far short of the English rule in the check given to partial payments, but it has the merit of giving a clear and certain test of an act of insolvency. In Indiana, it has been held that a bank forfeited its charter, 1. When it contracts debts to a greater amount than double that of the deposit; 2. For the issuing of more paper, with a fraudulent intention, than the bank could redeem; 3. When it made large dividends of profits, while the bank refused to pay specie for its notes; 4. Embezzling large sums of money deposited in bank for safe-keeping. State Bank v. The State, 1 Blackf. (Ind.) 267.

ered against the corporation, at any time before the institution of such proceedings, and a sale of the corporate property, will be valid. Mickles v. Rochester City Bank, 11 Paige, 118. A lease made by a corporation of its works, with the intention of discontinuing its ordinary business for more than one year, and so subjecting the corporation to dissolution, is “ an act of self-destruction which the law will not tolerate," and is void. Conro v. Port Henry Iron Co. 12 Barb. (N. Y.) 27.

But the statute must, in all its requisitions, be strictly construed, or the court has no jurisdiction, and the appointment of the receiver will be void. Bangs v. McIntosh, 23 Barb. (N. Y.) 591.

A corporate body, as well as a private individual, when in failing circumstances, and unable to redeem its paper, may, without any statute provision, and upon general principles of equity, assign its property to a trustee, in trust, to collect its debts and pay debts, and distribute as directed. It has unlimited power over its property to pay its debts. A corporation may also, like an individual, give preferences among creditors, when honestly and fairly intended and done. The doctrine is well established in equity. Union Bank of Tennessee v. Ellicott, 6 Gill & Johns. 363. The State of Maryland v. Bank of Maryland, Ibid. 205. Revere v. Boston Copper Co. 15 Pick. 351. Catlin v. Eagle Bank of New Haven, 6 Conn. 233. See also, infra, p. 532. Conway, ex parte, 4 Ark. 302. Flint v. Clinton Company, 12 N. Hamp. 430. Dana v. The Bank of the United States, 5 Watts & Serg. 223. Bank of U. S. v. Huth, 4 B. Monr. 423. In Robins v. Embry, 1 Smedes & Marsh. (Miss. Ch.) 207, the chancellor admits that a corporate body may make an assignment of the corporate property in trust, equally and ratably, to pay its debts; but as their assets are a trust fund for all the creditors, he ably examined and opposed the doctrine that corporations, like individuals, may give preference among creditors. Ibid. pp. 259–266.

I have, in this lecture, gone as far into the law of corporations as was consistent with the plan and nature of the present work; and for a more full view of the subject, I would refer to the Treatise on Private Corporations Aggregate, by Messrs. Angell & Ames, as containing an able and thorough examination of every part of the learning appertaining to this head, and as being a performance which deserves and will receive the respect and patronage of the profession. A new and enlarged 3d edition of that treatise appeared in 1846, and the work is vastly improved and admirably digested.

3 De Ruyter v. St. Peter's Church, 3 Comst. 238. S. C. 3 Barb. Ch. 119. But it seems that the franchise itself cannot be passed by assignment. It was so held in Arthur v. Commercial, &c., Bank, 9 Smedes & Marsh. 394. The assignment of a bank is not, under the statutes of Mississippi, a dissolution of the corporation; yet if it prevents the bank from fulfilling the purposes of its charter, it may work a forfeiture for nonuser. State v. Commercial Bank, 13 S. & M. 569. Cooper v. Curtis, 30 Maine, 488.

✦ And stockholders taking advantage of their position to obtain security for debts due themselves from the corporation, are not guilty of fraud. Whitwell v. Warner, 20 Vermont, 425-444.

PART V.

OF THE LAW CONCERNING PERSONAL

PROPERTY.

LECTURE XXXIV.

OF THE HISTORY, PROGRESS, AND ABSOLUTE RIGHTS OF PROPERTY.

· HAVING concluded a series of Ïectures on the various rights of persons, I proceed next to the examination of the law of property, which has always occupied a preeminent place in the municipal codes of every civilized people. I purpose to begin with the law of personal property, as it appears to be the most natural and easy transition from the subjects which we have already discussed. This is the species of property which first arises, and is cultivated in the rudest ages; and when commerce and the arts have ascended to distinguished heights, it maintains its level, if it does not rise even superior to property in land itself, in the influence which it exercises over the talents, the passions, and the destiny of mankind.

To suppose a state of man prior to the existence of any notions of separate property, when all things were common, and when men throughout the world lived, without law or government, in innocence and simplicity, is a mere dream of the imagination. It is the golden age of the poets which forms such a delightful picture in the fictions, adorned by the muse of Hesiod, Lucretius, Ovid, and Virgil. It has been truly observed, that the first * man who was born into the world killed the second; * 318 and when did the times of simplicity begin? And yet we