§ 150. Who may bring suit.-Incorporation confers upon the board of directors in the first instance the authority to institute and direct a suit;1 and there must be a clear default on their part, involving a breach of duty, before a stockholder can institute a suit against a wrongdoer whose acts operate to the prejudice of the interests of the stockholders.2 But where the board of directors are themselves the wrongdoers, or they refuse to prosecute to restrain or redress the wrong, stockholders may institute the suit. Such refusal must however be shown, in order to give the stockholder any standing in court, unless the complaint shows matter of excuse for not averring it, which renders the averment needless. In respect of a proceeding which is strictly ultra vires of the corporation, any single corporator has a right to sue, either to prevent its being done, or to restrain its continuance or repetition.7 And he may sue on behalf of himself, and not on behalf of himself and others, if he only be aggrieved; 8 but when the wrong is to a class or number of the corporators, suit should be instituted by him or them on behalf of all. If the directors, or some of them, so act as to prevent a majority of the members from exercising a proper control over the affairs of the company, a suit against them is properly brought by a single shareholder on behalf of himself and all other shareholders, except the defendants, 10 So, one shareholder may bring suit on behalf of the others and against the company, where the majority of a company attempt to benefit themselves at the expense of the minority.11 But a person cannot be sole plaintiff in such suit, who is not actually a full and complete member of the company.12 One having a mere inchoative right of membership, 13 or who has sold his shares, though he may be still under liabilities, cannot, therefore, institute the proceedings. 14 Nor can a simple contract creditor institute such a suit. 15

Memphis v. Dean, 8 Wall. 64; and see Railway Co. v. Alling, 99 U.S. 463; Greaves v. Gouge, 69 N. Y. 154.

2 Memphis v. Dean, 8 Wall, 64.

3 Pond v. Vt. Valley R. R. Co. 12 Blatchf. 280; Hersey v. Veazie, 24 Me. 9; Brown e. Vandyke, 4 Halst. Ch. 755.

4 Dodger. Woolsey, 13 How. 331; Hodges v. New England Screw Co. IR. I. 312; Allen v. Curtis, 26 Conn. 456.

5 Memphis v. Dean, 8 Wall 64; Davenport v. Dows, 18 id. 626: Wilkle v. Rochester etc. R. R. Co. :2 Hun, 242; Ware v. Bazeinore, 53 Ga. 316; Newby v. Oregon etc. Railw. Co. 1 Sawyer, 63; Hazard v. Durant, 11 R. I. 195.

6 Heath v. Erie Railw. Co. 8 Blatchf. 347; Cogswell v. Bull, 39 Cal. 320; Talbot r. Scripps, 31 Mich. 268; Black v. Huggins. 2 Tenn. Ch. 780; Mussim v. Goldthwaite, 35 Tex. 125; Foroes r. Memphis etc. R. R. Co. 2 Woods, 323; Brewer v. Boston Theatre, 104 Mass. 378.

7 March . Eastern R. R. Co. 40 N. H. 566; Zabriskie v. Cleveland etc. R. R. Co. 23 How. 381; Samuel v. Holladay, 1 Woolw. 400; Bliss v. Anderson, 31 Ala. 613; Russeil v. Wakefield Water Woks Co. Law R.20 Eq. 474; Foss r. Harbottle, 2 Hare, 451; and see Wright r. Oroville etc. Min. Co. 40 Cal. 20; Mills r. North. Railw. etc. Co. Law 1.5 Ch. App. 621.

8 Stevens v. South Devon Railw. Co. 9 Hare, 313; Carlisle v. Southeastern Railw. Co. 2 Hall & T. 366; 6 Lug. Ranw. Cas. 679.

9 See Cunningham v. Pell, 5 Paige, 637; Young v. Drake, 8 Hun. 61; Masonr. York etc. R. R. Co. 52 Me. 107; Gray v. N. Y. etc. Steamship Co.5homp. & C. 224; West v. Randall, 2 Mas. C. C. 118; Smith r. Swornstedt. 16 How. 302; Craig v. Gregg, 83 Pa. St. 19; Yetts v Norfoix Ratiw. Co. 3 De Gex & S. 23; Coates r. Nottingham Water Works Co. 30 Beav. 86; Henry v. Great Northern Railw. Co. 4 Kay & J. 1; 1 De Gex & J. 606; Sweny r. Smith, Law R. 7 Eq. 324; Davidson v. Grange, 4 Grant (Up. Can.) 377.

10 Macdougal v. Gardiner, Law R. 20 Eq. 383; and see Mussina v. Goldthwaite, 34 Tex. 125; 7 Ain. R. 281.

11 Meniere. Hooper's Tel. Works, Law R.9 Ch. App. 350; and see Sal mon v. Randall, 3 Mylne & C. 444; Gifford v. N. J. R. R. Co. 2 Stockt. Ch.

171.

12 See Walker v. Devereaux. 4 Paige, 229; Randall v. Crystal Palace Co. 4 Kay & J. 326; Evans v. Corp. of Avon, 29 Beav. 144; Adley v. Whitstable Co. 19 Ves. 304.

13 Busey v. Hooper, 35 Md. 15; Spackman v. Lattimore, 3 Giff. 16; Lake Superior Nav. Co. v. Morrison, 22 Up. Can. C. P. 217.

14 Doyle r. Muntz, 5 Harc, 509. See Burt v. British etc. Life Assoc. 4 De Gex & J. 158; Hubbell v. Warren, 8 Allen, 173.

15 Mills r. North. Railw. Co. Law R. 5 Ch. 621; and see Evans v. Coven. try. 5 De Gex M. & G. 911; Kearns v. Leaf, i Hem. & M. 681. But compare Lothrop v. Stedman, 42 Conn. 553.

§ 151. Against whom suit should be brought.In a suit to prevent or restrain acts or proceedings of any kind which are ultra vires, the corporation itself must be made a party; and if other parties are immediately concerned in the ultra rires proceeding, they should also be represented. Thus, where two corporations enter into an ultra vires agreement, and a suit is brought by a share holder in one of the companies, to restrain the execution of the agreement, both companies should be made defend.

ants; but directors and shareholders who promoted the agreement need not be joined as defendants, unless direct relief is required against them,5 or it is sought to hold them responsible for damage caused by the ultra vires proceedings. In a suit against the directors, for a fraudulent breach of trust, the corporation itself, if in existence, is a necessary party; but it is not necessary to make all the fraudulent directors parties, which is an exception to the general rule, that in a proceeding against trustees all must be made parties." The rule that precludes a person from being both plaintiff and defendant to the same action, 10 has no application to actions brought by corporations; and a corporation may sue its own members, although the names of defendants appear on the record as plaintiffs.12

1 See Heath v. Erie Railw. Co 8 Blatchf. 347; Tyson v. Virginia R. R. Co. 1 Ilughes, 80; Greaves v. Gouge, 6) N. Y. 154; 49 How. Pr. 79; Gregory e. Patchett, 33 Beav. 5.5.

2 Ward v. Sittingbourne Railw. Co. Law R. 9 Ch. 488; Ferguson v. Wilson, Law R. 2 Ch.10; Johnson v. Candage, 31 Me. 23; Att.-Gell. v. To ronto Street Railw. Co. 14 Grant (Up. Can.) 673.

3 Winch . Birkenhead etc. Railw. Co. 5 De Gex & S. 562; Hare v. London etc. Railw. Co. 1 Johns. & II. 252.

4 Winch v. Birkenhead etc. Railw. Co. 5 De Gex & S. 562; and see People v. Sturtevant, N. Y. 263; Heath v. Erie Railw. Co. 8 Blatchf. 347.

5 Fawcett v. Laurie, 1 Drew. & S. 192.

6 Hardy v. Metrop. Land etc. Co. Law R. 7 Ch. 427; Heath v. Erie Railw. Co. 8 Blatchf. 347. See East Rome Town Co. v. Nagle, 58 Ga. 474.

7 Greaves v. Gouge, 69 N. Y. 154; Ferris v. Strang, 3 Edw. Ch. 127; and see Smith v. Poor, 40 Me. 415.

8 Mayner. Griswold, 3 Sand. 463; Cunningham v. Pell, 5 Paige, 607; People v. Sturtevant. 9 N. Y. 263. A court of equity has jurisdiction to make the officers of a corporation purtles for the purpose of discovery. McIntyre r. Trustees etc. 6 Paige, 239; MeKim v. Odoni, 3 Bland, 421; Hatch v. Chcago etc. R. R. Co. 6 Blatchf. 105; Bevans v. Dingman's Turup. 10 Pa. St. 174.

9 Protection Ins. C. v. Dummer, cited in 5 Paige, 612; Wilson v. Moore, 1 Mylne & K. 127.

10 See Fichards v. Richards, 2 Barn. & Adol. 47; Sherwood v. Barton, 36 Barb. 284; 23 How. Pr. 538; Engliss v. Furniss, 2 Abb. Pr. 333; 4 E. D. Smith, 587.

11 Connell v. Woodward, 5 How. (Miss.) 665.

12 Connell v. Woodward, 5 How. (Miss.) 665; and see Barnstead v. Empire Min. Co. 5 Cal. 2 9; Waring v. Catawba Co. 2 Bay, liv; Culbertson v. Wabash Nav. Co. 4 McLean, 547.

§ 152. Appearance by corporation.-A corporation can appear only by attorney;1 but the usual practice of permitting appearance without producing a warrant of attorney, extends to appearance for a corporation, as well as for a natural person;2 and a corporation, like a natural person, may appear voluntarily by attorney, and such appearance gives jurisdiction to the same extent as if there was actual service of process.3 Process against a corporation should be served on its head or principal officer; and service upon a private individual member is not, in general, sufficient to charge the corporation; 5 and the individual served may plead the want of notice to the corporation. Officers de facto are competent to receive service. A statute directing service of process on the "managing agent" of a corporation, has reference to such agents as have a general supervision over the affairs of the corporation,8 in distinction from the management of a particular branch or department of its business. It is no objection to the service of a writ in favor of a corporation, that it was made by an officer who is a member.10

1 Osborne v. Bank of U. S. 9 Wheat. 738. In a plea to the juris diction of the court a corporation may appear by its president: Quarrier v. Peabody Ins. Co. 10 W. Va. 507.

2 Osborne v. Bank of U. S. 9 Wheat. 738; and see Republic of Mexico v. Arrangois, 1 Abb. Pr. 437; 5 Duer, 643; Commissioners of Excise v. Purdy, 13 Abb. Pr. 434; 36 Barb. 266; Gillespie's Case, 3 Yerg.

825.

3 McCormick v. Penn'a R. R. Co. 49 N. Y. 303; Att.-Gen. v. Guard, Mut. Life Ins. Co. 77 N. Y. 272; see also De Bemer v. Drew, 57 Barb. 438; 39 How. Pr. 466; Latimer v. Union Pacif. Railw. 43 Mo. 105.

4 M'Quinn v. Middletown Manuf. Co. 16 Johns. 5; and see McCall . Byram Manuf. Co. 6 Conn. 428; Chamberlin v. Mammoth Min. Co. 20 Mo. 96; Boyd v. Chesapeake etc. Canal Co. 17 Md. 195; Gillig v. Independent etc. Min. Co. i Nev. 247.

5 O'Brien v. Shaw's etc. Canal Co. 10 Cal. 343; Willamette etc. Co. v. Williams, 1 Oreg. 112; and see Peirce v. Somersworth, 10 N. H. 369; Oxford Iron Co. v. Sprodby, 42 Ala. 24; St. Louis etc. Railw. Co. v. Dorsey, 47 Ill. 288.

6 Rand v. Proprietors of Locks, 3 Day, 441.

7 McCall v. Byram Manuf. Co. 6 Conn. 428; Berrian v. Meth. Soc. 4 Abb. Pr. 424.

8 Upper Miss. Transp. Co. v. Whittaker, 16 Wis. 220. See also Parke v. Commonw. Ins. Co. 44 Pa. St. 422; American Express Co. v. Johnson, 17 Ohio St. 641.

9 Brewster v. Mich. Cent. R. R. Co. 5 How. Pr. 183; Emerson v. Auburn etc. R. R. Co. 13 Hun, 150.

10 Merchants' Bank v. Cook, 4 Pick. 405.

§ 153. Averment and proof of incorporation.It was held to be the rule of the common law in many of the earlier decisions, that a corporation when suing must, at the trial, under the general issue, prove the fact of incorporation. On the other hand, the rule established in many of the states was, that a plea of the general· issue to a declaration by a corporation pleading as such, was an admission of the plaintiff's corporate capacity to sue,2 which dispensed with the necessity of any proof as to that point; 3 and that decisions in support of a general rule to the contrary were exceptional cases, in which the plaintiff was a foreign corporation.4 Generally, in modern practice, proof of incorporation is dispensed with, unless the fact of incorporation is specially denied in pleading. And when proof of incorporation is necessary, a complaint in the name of the incorporation is a sufficient averinent of incorporation to let in such proof on the trial, unless the provisions of the charter are material to the cause of action, in which case the charter should be set forth in the declaration. A corporation may, in general, be declared against by what purports to be a corporation name, without alleging it to be chartered or incorporated, or setting forth by averment how it acquired that name. And by appearing and answering to the merits, a corporation admits its corporate existence, and that the defendant is correctly named. 10

1 See Henriques v. Dutch West India Co. 2 Ld. Raym. 1532; Jack sonv. Plumbe, 8 Johns. 373; U. S. Bank v. Stearns, 15 Wend. 314; Taylor v. Bank of Alexandria, 5 Leigh, 471; Wolf v. Goddard, 9 Watts, 544; Lewis r. Bank of Ky. 12 Ohio, 132; Buncombe Turnp. Co. v. Carson, í Dev. & B. 306; Central Manuf. Co. v. Hartshorne, 3 Conn. 199; Trustees etc. v. Hills, 6 Cowen, 23.

2 Orono v. Wedgewood, 44 Me. 49; Whittington v. Farmers' Bank, 5 Har. & J. 489; Miss. R. R. Co. v. Cross, 20 Ark. 443; Zion Church v. St. Peter's Church, 5 Watts & S. 215; McIntyrer. Preston, 5 Gilm. 48; Carpenter r. Mercantile Bank, 17 Ind. 253; West Winsted Savings Bank v. Ford, 27 Coun. 282.

3 Prince r. Commercial Bank, 1 Ala. 241; Christian Soc. v. Macom. ber, 3 Met. 235; Insurance Co. v. Peck, 28 Vt. 93.