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corporation is thereafter bound by a special provision in the deed to pay over the profits arising from its business to the trust board. All the profits are blended into one grand mass, from which dividends are paid by the board to each cestui que trust, regardless of the amount of the profits which his particular company may have contributed to the aggregate fund. To obviate the difficulty that the directors and officers of corporations are required by statute to be stockholders thereof, the trust deed further provides that "the said board may transfer from time to time to such persons as it may desire to constitute trustees or directors, or other officers of corporations, so many of the shares as may be necessary for that purpose, to be held by them subject to the provisions of this instrument. Such transfers may be executed by the president and treasurer of the board in behalf of, and as attorneys for, the board for that purpose, and to be retransferred when so requested by the board."

1 Chap. XX, parts II and III.

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2 See cases there cited, and also Pennsylvania R. R. Co. v. St. Louis etc. N. R. 118 U. S. 290; Thomas v. Railroad Co. 101 U. S. 71; Troy etc. R. R. Co. v. Boston etc. R. R. Co. 86 N. Y. 107; Abbott v. Johnstown etc. R. R. Co. 80 N. Y. 27; 36 Am. Rep. 572; People v. Albany etc. R. R. Co. 77 N. Y. 232; Barclay v. Talman, 4 Edw. Ch. 123, 129.

3 People v. North River Sugar Refining Co. (N. Y. Supr. Ct. Jan. 9, 1889) 5 R'y & Corp. Law J. 56, affirmed by the General Term, Nov. 4, 1889. 4 Vide supra, § 458.

§ 589. The same subject, continued-Acts of the shareholders imputed to the corporation.-The defendant plead that the act complained of was the mere individual act of its stockholders, in no wise binding upon it, and at all events a harmless association, constituting nothing more serious than an unusually large partnership. "The first question,

BEACH ON RAILWAYS-61

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then, to be considered," said the court, "is, whether the corporation, as such, has entered into this combination; for if it has not, clearly it cannot be deprived of its franchises because of independent and several acts, however illegal, of its stockholders." After a minute analysis of the deed of trust and the evidence, the court held that everything pointed irresistibly to the complete practical identity of the shareholders and corporation. From the fact that a dividend had been declared and paid upon the trust certificates, it was manifest that the corporations had so far executed the contract as to pay over to the board the funds from which that dividend had been declared. Further, it appeared that all the capital stock of the corporations had been actually transferred to the trust board, which at once, under the statute, disqualified every director, unless a single share was reserved or transferred to each director under the authority of the clause of the trust deed above quoted. If that was done, and, as these directors had continued to perform their ordinary functions, it must be assumed that it was done, then the deed again became an executed contract, and the directors held their offices, or continued to perform their duties, by the force of its provisions. The contract, claimed to be the act of the individual shareholders, being thus shown to have been executed by the corporation, was manifestly in the first instance an act of the corporation itself. In conclusion, it was said that it is quite impossible to sever the acts of the persons solely interested in these corporations from that of the corporations themselves. The purpose to effect corporate combination cannot be disguised. When the

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whole body of stockholders offend the law of the
corporate being, they thereby forfeit their franchise,
and are to be punished by a decree of forfeiture and
dissolution.1

1 People v. North River Sugar Refining Co. (N. Y. Supr. Ct. Jan. 9,
1889) 5 R'y & Corp. Law J. 59, affirmed by the General Term, Nov. 4, 1889.

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$590. Proceedings to forfeit, to be brought
in the name of the State.-Proceedings to forfeit
the charter of a corporation can be instituted only
by the State;' unless there be a statute authorizing
private persons to maintain actions for that pur-
pose. The courts will not decree a forfeiture at
the suit of a creditor of the corporation; nor can
the owner of land condemned for a right of way
take advantage of a railroad company's failure to
construct its road within the time prescribed by its
charter alone.* The Pennsylvania statute, provid-
ing that a bill may be filed in equity by a private
citizen for compelling a corporation to prove its
authority to act in a particular case, does not em-
power a private citizen to show a forfeiture of the
corporate charter by a mere failure to exercise a
franchise granted thereby."

1 Buffalo etc. R. R. Co. v. Cary, 26 N. Y. 75; Thompson v. New York
etc. R. R. Co. 2 Sand. Ch. 625; Barclay v. Talman, 4 Edw. Ch. 123, 129;
State v. Butler, 15 Lea, 104; Selma etc. R. R. Co. v. Tipton, 5 Ala. 787; 39
Am. Dec. 344; Union Branch R. R. Co. v. East Tennessee etc. R. R. Co. 14
Ga. 327; Bayiess v. Orne, Freem. Ch. (Miss.) 173; Bohannon v. Binns, 31
Miss. 355; Chesapeake etc. Canal Co. v. Railroad Co. 4 Gill & J. 1; Hamil-
ton v. Annapolis etc. R. R. Co. 1 Md. Ch. 107: Day v. Stetson, 8 Me. 372;
Connecticut etc. R R. Co. v. Bailey, 21 Vt. 465; 58 Am. Dec. 181; Pierce
v. Somersworth, 10 N. H. 369; Briggs v. Cape Cod etc. Canal Co. 137 Mass.
72; Johnson v. Bently, 16 Ohio, 97; Receivers v. Renick, 15 Ohio, 322; Webb
v. Moler, 8 Ohio, 548.

2 Gaylord v. Fort Wayne etc. R. R. Co. 4 Biss. 286; Gilman v. Green-
point etc. Co. 4 Lans. 482; Commonwealth v. Alleghany Bridge Co. 20 Pa.
Bt. 185; Baker v. Backus, 32 III. 79.

3 Gaylord v. Fort Wayne etc. R. R. Co. 6 Biss. 286.

4 Cincinnati etc. R. R. Co. v. Clifford, 113 Ind. 460.

5 Pa. Act of June 19, 1871.

6 Western Pennsylvania R. R. Co's Arpeal, 104 Pa. St. 399.

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591. Of the writs scire facias and quo warranto. Forfeiture proceedings may be either by a writ of scire facias or of quo warranto. former is appropriate when there is a legal existing body capable of acting, but which has abused its powers; the latter, when the action is against persons who have assumed, without authority or without legal organization under their charter, to act in a corporate capacity. This distinction, however, is not always observed, and proceedings in the nature of quo warranto are frequently instituted to remedy not only an illegal assumption of corporate capacity, but also an abuse of corporate powers and franchises.2 It is said that quo warranto proceedings to dissolve a corporation or declare a forfeiture of its charter, or to oust it from the exercise of franchises which it usurps, "must be brought against the corporation itself, and not merely against its individual members." Such an information against the corporation by name is considered descriptive merely, and not as an affirmation that the defendants are a corporation, but that "using that name they have done the acts in the information alleged." But if the information has for its object to test the fact of legal corporate existence, it should be filed against the individuals assuming to act as a corporation; for, it is said, to make the pseudo corporation itself the defendant, would be to acknowledge its existence." In a proceeding to forfeit the franchise of a corporation, and restrain its members from exercising the franchise, an allegation that defendants never had the franchise, is sufficient, without specifying in what respects their right thereto is defective." But

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where a count in a petition prays for the forfeiture of franchises then being exercised by a company of persons acting as a corporation, and alleges that if it ever had, as a corporation, any legal existence, privilege, or franchise, they have become forfeited, the previous existence of the corporation not being alleged, no cause of action is stated." The attorney-general may proceed of his own motion, without express authority from the legislature.R The court cannot inquire, before granting leave to sue, whether the attorney-general has acted wisely in instituting it, but merely whether he alleges a prima facie case of such gravity that it should be judicially determined. A judgment of forfeiture does not of itself work a dissolution. There must be an execution also for seizure of the franchises, before the penalty takes effect." A decree of dissolution obtained by fraud may be opened and vacated at the suit of a shareholder."

1 Kent's Commentaries, 313; Ames v. Kansas, 111 U. S. 449; 31 Am. Dec. 72, 111; People v. Utica Ins. Co. 15 Johns. 378; 8 Am. Dec. 249; State v. St. Paul etc. R. R. Co. 35 Minn. 222.

2 Parish of Bellport v. Tooker, 21 N. Y. 267; S. C. 29 Barb. 256; People v. Kingston Turnpike Co. 23 Wend. 193; State v. Milwaukee etc. R. R. Co. 45 Wis. 579; Reed v. Cumberland etc. Canal Co. 65 Me. 132. See, also, cases cited in note to Folger v. Columbia Ins. Co. 96 Am. Dec. 747, 757.

3 State v. Atchison etc. R. R. Co. 24 Neb. 143; 4 R'y & Corp. Law J. 86, 89; citing State v. Taylor, 25 Ohio, 208; People v. Bank, 6 Cow. 217; Mickles v. Rochester City Bank, 11 Paige, 118; 24 Am. Dec. 103, 107; State v. Jefferson Iron Co. 60 Texas 312.

4 People v. Bank, 6 Cow. 217, cited in State v. Atchison etc. R. R. Co. 24 Neb. 143; 4 R'y & Corp. Law J. 86, 89. Contra, People v. Rensselaer etc. R. R. Co. 15 Wend. 115; 30 Am. Dec. 33, and Mud Creek etc. Co. v. State, 43 Ind. 236, which hold that proceeding against the corporation by name is an implied admission of its legal existence.

5 Draining Co. v. State, 43 Ind. 236; Le Roy v. Cusacke, 2 Rolle, 113; "How Corporate Existence Attacked by Quo Warranto" (1889), 40 Abb. Law J. 10; People v. Railway Co. 15 Wend. 114; People v. Richardson, 4 Cow. 97; Commonwealth v. Central Passenger R'y Co. 52 Pa. St. 506; People v. Stanford (1883), 77 Cal. 360. But see People v. Flint, 64 Cal. 49. 6 People v. Stanford (1888), 77 Cal. 360. 7 People v. Stanford (1888), 77 Cal. 360,

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