Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/128

 x» ^t^~r& >^V^ &*ZO. %%?. 32 <?# § 138.] THE LAW OP PRIVATE CORPORATIONS. [CHAP. VII. trial on the merits has a similar effect. 1 In some states it is not necessary for a corporation plaintiff to allege its incorpo- ration. 2 ^ /^w§ 138. When in order to enforce corporate rights or avert wrongs threatening the corporate interests it is neces- tii'^rJnjr sarv to sue, the rule is thai the suit must be brought fnthename DV the corporate management in the name of the cor- 20!i<LS2j^ poration. This rule applies to suits both at law and poration. l. . L * in equity. 3 Individual shareholders are not the proper parties to sue or defend on behalf of corporate interests. 4 If, however, the corporate management refuses or fails to enforce Mississippi, etc., R. R. Co. v. Cross, 20 Ark. 443; Rockland, etc., Steam- boat Co. v. Sewall, 78 Me. 167. But this was not the English rule, nor has it been so held in all the states. See Williams v. Bank of Michigan, 7 Wend. 540, and, generally, Angell and Ames on Corp., §§ 632 et seq. 1 United States v. Insurance Cos., 22 Wall. 99; Conard v. Atlantic Ins. Co., 1 Pet. 386, 450; Lehigh Bridge Co. v. Lehigh Coal Co., 4 Rawle, 9; First Parish v. Cole, 3 Pick. 232, 245. 2 German Reformed Church v. Von Puechelstein, 27 N. J. Eq. 30; Phoenix Bank v. Donnell, 40 N. Y. 410; compare Baltimore & O. R. R. Co. v. Sherman, 30 Grat. (Va.)602, But see §§ 1775-6 of the New York Code of Civil Procedure, and Con- cordia Savings Ass'n v. Reed, 93 N. Y. 474. Where the name used by the plaintiff in pleading " argues a corporation," corporate organization need not be averred. Sayers v. First Nat. Bk., 89 lnd. 230. 3 Bradley v. Richardson, 2 Blatchf. 343; Mauney v. High Shoals M'f'g Co., 4 Ired. Eq. (N. C.) 11)5; see Insane Hospital u. Higgins, 15 111. 185; Campbell v. Brunk, 2.". 111. 225. 4 Silk M'f'g Co. a. Campbell, 27 N. J. L. 539; Blackman v. Central R. R. 108 Co., 58 Ga. 189; Henry v. Elder, 63 Ga. 347; see Bronson u. LaCrosse, etc., R. R. Co., 2 Wall. 283; Park v. Petroleum Co., 25 W. V. 108; Mayer v. Bristol Hotel Co., 163 Mo. 59. Shareholders who have been allowed to put in an- swers in the name of the corporation cannot be regarded as answering for the corporation itself. In a special case, where there is an allegation that the directors fraudulently refused to attend to the interests of the cor- poration, a court of equity will in its discretion allow a shareholder to become a party defendant in order to protect from unfounded claims against the corporation his own in- terests and those of such other share- holders as choose to join him in the defence. Bronson v. LaCrosse, etc., R. R. Co., 2 Wall. 283. See, also, Kanawha Coal Co. v. Ballard, etc., Coal Co., 43 W. Va. 721. A share- holder cannot prosecute an appeal from a judgment against the cor- poration. State of Florida v. Florida Central I J. R. Co., 15 Fla. 690. On the other hand, a stockholder is ordinarily bound by decrees against the corporation, although not per- sonally a party. Hawkins v. Glenn, 131 U. S. 319; Howard v. Glenn, 85 (la. 238; Heggie v. Bldg. Ass'n, 107 N. C. 581.