Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/684

 § 665.] THE LAW OP I'UIVATE CORPORATK )NS. [CHAP. XI. passed into the hands of bon a fide purchasers. 1 "A corpora- tion, by the very terms and nature of its political existence, is subject to dissolution, by a surrender of its corporate fran- chises and by a forfeiture of them for wilful misuser and non-user. Every creditor must be presumed to understand the nature and incidents of such a body politic, and to contract with reference to them. And it would be a doctrine new in the law that the existence of a private contract of the corpora- tion should force upon it perpetuity of existence contrary to public policy and the nature and objects of its charter." 2 § 665. Neither can creditors prevent the alteration or repeal of the charter of a corporation, 3 as under such circumstances the capital of the corporation remains charged with their equitable liens. 4 And finally, creditors cannot prevent a consolidation of their debtor corporation with another. But a corporation cannot compel its creditors to give up their lien on its funds, and accept in lieu thereof the personal liability of the consolidated cor] (oration. 5 The equitable lien of the creditors of a consolidating corporation survives, and they Nor altera^ tiou of charter; liDi- consoli- dation. Survival of creditors' lien. 1 Mumnia 0. Potomac Co., 8 Pet. 281, 286; Howe v. Robinson, 20 Fla. 352. See Panhandle Nat. B'k v. Emery, 78 Tex. 498. But it has been held that the plaintiff in a suit in equity may enjoin a corporation, de- fendant in the suit, which might be held liable to respond pecuniarily to the plaintiff, and which had made one attempt to procure its dissolu- tion, from dissolving, or having a receiver appointed, or distributing its assets among its shareholders or from making any disposition of its property. Fisk v. Union Pacific R. R. Co., 10 Blatchf. 518. 2 Mumma v. Potomac Co., 8 Pet. 281, 287, opinion of the court per Story, J. A corporation, composed of two other corporations, had been dis- solved after the recovery of a judg- ment against it. By the dissolution, the two original companies resumed 664 their corporate existence. It was held that such dissolution did not affect the rights of the judgment creditor, nor the validity of his judg- ment; and tbat upon notice to the two companies he was entitled to an execution against them. Ketcham v. Madison, etc., R. R. Co., 20 Ind. 2G0. 8 Road ij. Frankfort Bank, 23 Me. 318. See Pennsylvania College Cases, 13 Wall. 190, 218-220; Lothrop v. Stedman, 13 Blatchf. 184, 143. As to the repeal of provisions inserted in a charter specially for the benefit of creditors, see Hawthorne v. Calef, 2 Wall. 10, and §§ 500, 501. 4 See cases in preceding note. 5 In re Manchester, etc., Life Ass. Ass'n, L. R. 9 Eq. 643; In re Family Endowment Society, L. R. 5 Cb. 118; Griffith's Case, L. R. 6 Ch. 374; In re India, etc., Life Ass. Co., L. R. 7 Ch. G51. Compare Terhune u. Potts, 47 N. J. L. 218. See §§ 425-427.