Page:Harvard Law Review Volume 8.djvu/40

24 24 HARVARD LAW RE VIE IV. corporation, it is not necessary to hold the deed void, in order to accomplish the end sought to be attained, namely, to prevent the corporation from carrying on a business in a State, in violation of the settled policy of that State. This end may be reached by a more equitable process. It is not necessary to perpetrate the iniquity of allowing a party to recover or transmit title to property, which he has voluntarily conveyed for a full consideration, without returning that consideration. It is not necessary, by declaring a deed void, to restrict a grantor in his choice of an alienee, that is, in his right of alienation, thereby also creating the absurdity that the title still remains in the alienor, in spite of his own will and contract. And finally, it is not necessary to compel innocent stockholders, though guilty of no wrong or fault, to lose both the property purchased and the price paid. The proper officers of the State, by quo tvarranto, or other appropriate process, may proceed against the offending corporation to oust it from the exercise of its franchises in the State, and to have a receiver appointed to sell the lands improperly held by it, applying the proceeds for the benefit of stockholders and creditors. The cases seem to establish the authority for such procedure.^ In construing a prohibitory statute or in applying a rule of policy in any one of the cases cited, the Courts should, if possible, protect and preserve the rights of innocent stockholders. Each stockholder of a business corporation contributes his share of the capital for the common benefit of all, and the corporation itself holds the corporate property as a trustee for the shareholders.'^ The corporate entity, therefore, being regarded as the trustee of the stockholders, it would seem that a disability on the part of the corporation to take should not destroy the rights of the beneficial owners, assuming always of course that the law itself does not explicitly so declare. Thus, where the officers of a savings-bank invest its funds in a manner forbidden by statute, such illegal action of the officers does not impair the validity of the invest- ment; and the remedy, either of the trustee or of the cestuis que trust, in availing themselves of the security so improperly taken, is not affected.^ This principle was applied in Insurance Company v. 1 Havemeyer v. Superior Court, 84 Cal. 327; s. c. 18 Amer. St. Reports, 192, 211; Wright V. Lee, So. Dakota, 51 N. W. Rep. 706; 55 Id. 931 ; State v. Fidelity Co., 39 Minn. 538; State v. Insurance Co., 47 Ohio State, 167. lege Case, 6 Harvard Law Review, p. 172; Taylor v. Miami Co., 5 Ohio, 162. » Ilolden V. Upton, 134 Mass. 177 ; Great Eastern R. R. v. Turner, L. R. 8 Ch. 149.
 * Morawetz on Corporations, sects. 237, 1032; Ch. J. Doe, on the Dartmouth Col.