Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/133

 PART I.] CONSTRUCTION OP CORPORATE POWERS. [§ 143. the corporation to act, may bring a suit against an outsider on any ordinary right of action pertaining to the cor- poration, to recover damages for injuries which have S hare-° already been suffered. 1 The shareholder must show that he would suffer irremediable loss were he not allowed to bring suit ; 2 and this will be more difficult to show when the right of action results from past injuries. § 143. Kegarding service of process on corporations, little may be said of general applicability, as this is largely a matter of local practice, regulated in nearly all the process on states by statutes which designate the mode of ser- JJKf 8 " vice and the officer to whom it may be made. 3 A corporation may appear voluntarily by attorney, and such ap- holder to sue in respect of injuries already accrued. sive one to confer on a court of the United States jurisdiction of a case of which it would not otherwise have cognizance. It must also set forth with particularity the efforts of the plaintiff to secure such action as he desires on the part of the managing directors or trustees and, if neces- sary, of the shareholders, and the causes of his failure to obtain such action." 104 U. S. IX. See Quincy v. Steel, 120 U. S. 241. Possibly with a view to protecting Federal courts from a mass of cases in which the request and refusal are collusive, and gone through with merely that the suit may be brought in a Federal court, the Supreme Court of the United States limits strictly the right of shareholders to sue for the corpo- ration. The state courts are not so strict. In the majority of cases where this question arises, suit is brought by shareholders against the corporation or its officers to prevent improper or ultra vires acts, or ob- tain damages for the same. For the competency of shareholders to sus- tain suits against the corporation under such circumstances, see §§ 554 -560; and for the competency of 8 shareholders to sue the wrongfully acting officers of a corporation, see §§ 685-691. 1 Samuels ». Central Overland Ex- press Co., McCahon (Kaus. ), 214; S. C. under name of Samuel v. Holla- day, 1 Woolw. 400. Compare Carter o. Ford Plate Glass Co., 85 Ind. 180. Yet this distinction seems question- able. It is disapproved in City of Chicago v. Cameron, 120 111. 447, 458, in which case the lapse of eleven years was held, under the circum- stances, not to constitute laches on the part of the shareholders. 2 See Detroit v. Dean, 106 U. S. 537, 542. In general, the English authorities accord with what has been stated in the text; see Russel v. Wakefield Waterworks Co., L. R. 20 Eq. 474; Gray v. Lewis, L. R. 8 Ch. 1035 ; Foss v. Harbottle, 2 Hare, 461; Mozley v. Alston, 1 Phill. 790. They are more fully discussed in §§ 553-557. 3 See, e. g., Great West. M'g Co. v. Woodmas, etc., Co., 11 Col. 46. For a discussion of the validity of ser- vice on foreign corporations, see §§ 395-399. 113