Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/130

 § 140.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. VII. § 140. Unless the facts stated in the complaint clearly show the corporation to be in no position to protect itself, Share- so th a t an y attempt of the shareholder to procure it must allege to act for its own protection would be utterly useless, 1 thecorpo- the shareholder must allege a demand by him on the sue.° n t0 corporate management to bring suit ; z and should set forth in his complaint facts showing to the court that his endeavors have been real and earnest, and that he has left undone nothing which in reason he might have done to pre- vail on the corporate management to bring the action. 3 More- over, it must be shown in the complaint that the refusal of the tute the suit in his own behalf, or for himself and other stockholders who may choose to join." Opinion of the Court per Nelson, J., in Mem- phis Cityc. Dean, 8 Wall. 64, 73; see, also, People v. State Treasurer, 24 Mich. 468; and see Hawes v. Oak- land, 104 U. S. 450, 459; cf. Dicker- man v. Northern Trust Co., 176 U. S. 181. 1 Barr v. New York, L. E. & W. R. R. Co., 96 N. Y. 444; S. C, 125 N. Y. 163; Perry v. Tuscaloosa Co., 93 Ala. 364. Where the corporation is prac- tically dissolved, and all its officers have absconded, a shareholder may sue a person to whom the officers have fraudulently and without con- sideration conveyed the corporate property; and under such circum- stances need not allege a previous application to the corporation. Wil- cox v. Bickel, 11 Neb. 154. See, also, People v. Hektograph Co., 10 Abb. N. C. (N. Y.) 358; Davis v. Rail- road Co., 1 Woods, 661; Crumlish v. Railroad Co., 28 W. Va. 623. Yet the United States Supreme Court holds that even where a corporation has passed the term of its corporate exist- ence — its existence, however, under the enabling act continuing for the purpose of winding up its business — a shareholder, to entitle him to bring suit, must allege efforts to prevail on 110 the corporation to sue. Taylor v. Holmes, 127 U. S. 489. 2 Detroit v. Dean, 106 U. S. 537; Hawes v. Oakland, 104 U. S. 450; Shawhan v. Zinn, 79 Ky. 300; Morgan v. Railroad Co., 1 Woods, 15; Ware v. Bazemore, 58 Ga. 316; Tubwiler v. Tuscaloosa Coal Co., 89 Ala. 391; Mack v. Coal Co., 90 Ala. 396; Roman v. Woolfolk, 98 Ala. 219; State v. Mitchell, 104 Tenn. 336; Ulmer v. Real Estate Co., 93 Me. 324; Wolf v. K. R. Co., 195 Pa. St. 91; Harding v. Amer. Glucose Co., 182 111. 551; cf. Kennedy v. Gibson, 8 Wall. 498. This proposition, it is said, does not apply to a bill filed by a creditor of the cor- poration against a wrongdoer. Loth rop v. Stedman, 42 Conn, 583 (U. S. Cir. Ct). 3 Hawes v. Oakland, 104 IT. S. 450. 461; Dimpfell v. Ohio, etc., R. Co., 110 U. S. 209; Bacon v. Irvine, 70 Cal. 221; Dannineyer ». Coleman, 11 Fed. Rep. 97; Pacific Railroad v. Missouri Pacific R. R. Co., 2 McCrary, 227; Boyd v. Sims, 87 Tenn. 771; Rathbone v. Gas Co., 31 W. Va. 798; Home Mining Co. v. McKibbin, 60 Kas. 387; Morgan v. King, 27 Colo. 539; L. & N. R. R. Co. v. Neal, adm., 128 Ala. 149. See, also, the cases in the preceding note. To give a small minority of shareholders a standing in equity to contest and set aside an /