Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/574

 § 543.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. IX. tiou which the corporation could not have enforced at the time of his appointment; 1 for the corporation or corporate management, just as much as a receiver, represents the inter- ests of all persons, creditors as well as shareholders, the main difference being that, as a receiver is ordinarily appointed only when the corporation is insolvent, the rights of creditors in the corporate funds are then especially prominent ; and a receiver is more apt to be regarded as the representative of creditors. 2 "A receiver is appointed upon a principle of jus- tice for the benefit of all concerned. Every kind of property of such a nature that, if legal, it might be taken on execution, may, if equitable, be put into his possession. Hence the appointment has been said to be an equitable execution. He is virtually a representative of the court, and of all the parties in interest in the litigation wherein he is appointed." 3 It has been held that to a suit by a receiver to collect an unpaid subscription, a shareholder may aver that the receiver was improperly appointed by a decree not binding on the shareholder. 4 But this doctrine may perhaps be of question- able correctness, or at least application, since the shareholder could have intervened in the proceeding by which the receiver was appointed. 5 § 543. The discretionary authority of directors to make a railroad has not been and is not likely to be completed is no defence to an action on an unconditional sub- scription. Smith v. Gower, 2 Duv. (Ky.)17. 7 Sawyer v. Hoag, 17 Wall. 610; Upton v. Tribilcock, 91 U. S. 45; Shockley v. Fisher, 75 Mo. 498; Lionberger v. Broadway SVgs B'k, 10 Mo. App. 49'.»; Great Western Tel. Co. v. Gray, 122 111. 630; Gainey v. Gilson, 149 Ind. 58; Belknap, Rec'r, v. Adams & Rice, 49 La. Ann. 1350; Wyman v. Williams, 53 Neb. 670. 1 Cutting v. Damerel, 88 N. Y. 410; Billings v. Robinson, 28 Hun, 122. 554 2 A receiver represents not only the corporation, but also creditors and shareholders, and in his char- acter of trustee for the latter, may disaffirm illegal and fraudulent transfers of corporate property, and recover its funds and securities mis- applied. Attorney-General v. Guar- dian Mut. Ins. Co., 77 N. Y. 272. Compare Ellis v. Little, 27 Kan. 707. 3 Davis v. Gray, 16 Wall. 203, 218. Semble contra, Hemstad v. Hall, 64 Minn. 133. 5 Schoonoverv. Hinckley, 48 Iowa, 82; Fish, Rec'r, v. Smith, 73 Conn. 377.
 * Chandler v. Brown, 77 111. 333.