A stockholder individually cannot maintain a bill in equity to compel the execution of a trust by a person holding corporate prop erty, who undertook to pay off its debts: Heath v. Ellis, 66 Mass. (12 Cush.) 601.

In Smith v. Hurd, 53 Mass. (12 Met.) 371, 46 Am. Dec. 690, it was held that a stockholder of a bank could not successfully sue its directors for so negligently conducting its affairs that its whole capital was lost, rendering the shares worthless. Chief Justice Shaw, in the course of his opinion, said: "The individual members of the corporation, whether they should all join, or each act severally, have no right or power to intermeddle with the property or concerns of the bank, or call any officer, agent or servant to account, or discharge them from any liability. Should all the stockholders join in a power of attorney to anyone, he could not take possession of any real or personal estate, any security or chose in action; could not collect a debt, or discharge a claim, or release damage arising from any default, simply because they are not the legal owners of. the property, and damage done to such property is not an injury to them." Nor can a stockholder sue out a writ of error in the name of the corporation without its consent: Chicago etc. R. Co. v. Northern Trust Co., 90 Ill. App. 460. That he may not bring a certiorari in the name of the corporation, without the consent of a majority of the stockholders, see Silk Mfg. Co. v. Campbell, 27 N. J. L. 539.

The principle that a stockholder, as such, cannot maintain a suit on his own behalf for an injury to the corporation does not apply, however, where the wrongful acts are not only wrongs against the corporation, but are also violations of a duty owing directly by the wrongdoer to the stockholders: Eldred v. Ripley, 97 Ill. App. 503, citing Ritchie v. McMullen, 79 Fed. 522. See, also, Nathan v. Tomkins, 82 Ala. 437, 2 South. 747; Meyers v. Scott, 50 Hun, 603, 2 N. Y. Supp. 753.

II. When Stockholder may Sue.

a. Must Exhaust Corporate Remedies.-While a stockholder cannot sue individually to enforce a duty or obligation owing the body corporate, he may, upon a proper showing, maintain a suit on its behalf: Metcalf v. American etc. Furniture Co., 122 Fed. 115. It therefore becomes necessary to determine what are the necessary conditions precedent to this right.

The leading case on this subject is that of Hawes v. Oakland, 104 U. S. 450, where it is said: "Before the shareholder is permitted in his own name to institute and conduct a litigation which usually belongs to the corporation, he should show to the satisfaction of the court that he has exhausted all the means within his reach to obtain, within the corporation itself, the redress of his grievances, or action in conformity to his wishes. He must make an earnest, not a simulated, effort, with the managing body of the corporation, to induce remedial action on their part, and this must be made apparent to the court. If time permits or has permitted, he must

show, if he fails with the directors, that he has made an honest effort to obtain action by the stockholders as a body, in the matter of which he complains. And he must show a case, if this is not done, where it could not be done, or it was not reasonable to require it."" The courts, therefore, will not entertain a suit of this character unless it plainly appears that all remedies within the corporation itself have been resorted to in vain; that the managing body has been applied to to induce action, and has wrongfully refused: Montgomery Light Co. v. Lahey, 121 Ala. 131, 25 South. 1006; Johns v. McLester (principal case), 137 Ala. 283, ante, p. 27, 34 South. 174; Smith v. Bulkley (Colo. App.), 70 Pac. 958; Home Min. Co. v. McKibben, 60 Kan. 387, 56 Pac. 756; Talbot v. Scripps, 51 Mich. 268; Hodgson v. Duluth etc. R. Co., 46 Minn. 454, 49 N. W. 197; Carpenter v. Roberts, 56 How. Pr. 216; Flynn v. Brooklyn City R. Co., 41 N. Y. Supp. 566, 9 App. Div. 269, affirmed in 158 N. Y. 493, 53 N. E. 520; Moore v. Silver Val. Min. Co., 104 N. C. 534, 10 S. E. 679; Holton v. New Castle Ry. Co., 138 Pa. St. 111, 20 Atl. 937; Wolf v. Pennsylvania R. Co., 195 Pa. St. 91, 45 Atl. 956; Mount v. Radford Trust Co., 93 Va. 427, 25 S. E. 244; Morgan v. Railroad Co., 1 Woods, 15, Fed. Cas. No. 9806; Newby v. Oregon Cent. Ry. Co., 1 Saw. 63, Fed. Cas. No. 10,145; Perdicaris v. Charleston Gaslight Co., Chase, 435, Fed. Cas. No. 10,974; Pond v. Vermont Val. R. Co., 12 Blatchf. 280, Fed. Cas. No. 11,265; Hutton v. Jos. Bancroft etc. Co., 83 Fed. 17; Greenwood v. Union Freight R. Co., 105 U. S. 13; Dimpfell v. Ohio etc. Ry. Co., 110 U. S. 209, 3 Sup. Ct. Rep. 573.

In Brewer v. Boston Theater, 104 Mass. 378, it is said, speaking of suits of this character: "It is only from the necessity of the case, and to prevent a failure of justice, that suits in equity in the form of these bills are allowed. To justify a suit in this form, the bill must show that suitable redress is not attainable through the action of the corporation. To this extent, all authorities agree. There is some diversity as to what will satisfy the requirement. Whether there must be an effort to move the corporate body to the redress of its own injuries, and, to that end, an attempt to procure a meeting and vote of the stockholders, or whether an application to the present board of officers by whom the corporate affairs are managed, and a refusal by them to allow proceedings in its name and behalf, would be sufficient, does not seem to have been determined by any clear concurrence of decision. It may depend somewhat upon the character of the corporate organization, and the extent of powers confided to its officers for the time being. Where the stockholders retain no control of the corporate business, except by means of an annual election of officers, those officers, during their term of service, represent the corporation for all purposes; and a refusal by them to take proper action for the protection of its interests, or to allow the use of the corporate name for that purpose, ought to be sufficient to justify a proceeding in behalf of the individual stockholders, making the corporation a party defendant." Where the

plaintiff could obtain the co-operation of a majority of stockholders, or was in control of the corporation, it was held that the corporation itself must sue: Miller v. Murray, 17 Colo. 408, 30 Pac. 46; Loomis v. Missouri Pac. Ry. Co., 165 Mo. 469, 65 S. W. 962.

b. Demand on, and Refusal to Act by Corporation Must be Alleged. These allegations of demand and refusal of the corporation itself to proceed must be alleged in the complaint: Ide v. Bascomb (Colo. App.), 72 Pac. 62; Wilkie v. Rochester etc. Ry. Co., 12 Hun, 242; and a failure to make such allegation gives a stockholder no standing in court: Ware v. Bazemore, 58 Ga. 316; and will render the pleading bad on demurrer: Vanderbilt v. Garrison, 3 Abb. Pr. 361.

So a stockholder cannot question a corporate deed in the absence of averments showing that the corporation itself has failed, after a proper application, to bring suit to set it aside: Savings etc. Co. v. Bear Valley Irr. Co., 112 Fed. 695. And where a mortgage made by the officers of a corporation had been foreclosed, a stockholder cannot obtain an injunction to restrain levy and sale under a fieri facias, without showing good reason why the corporation itself has not brought the bill: Henry v. Elder, 63 Ga. 347.

The averments of request upon the corporation to proceed must be clearly set forth, and vague and general allegations of fraud on the part of the directors are not sufficient: Ziegler v. Lake St. etc. R. Co., 76 Fed. 662, 22 C. C. A. 465, affirming 69 Fed. 176; nor is an allegation of the assumption of the expenses of suit by the stockholders such as will fulfill the requirements: Warren v. Shoe Co., 166 Mass. 97, 44 N. E. 112. A request and refusal must be shown, and it is not enough to say that the directors will not bring the suit: House v. Cooper, 30 Barb. 157, 16 How. Pr. 292; and the specific facts must be set forth, and not general allegations: Swope v. Villard, 61 Fed. 417.

c. On Whom It Should be Made.-The demand for action must be made upon the governing body, the directors or trustees, and this is not complied with by requesting the president to sue: Wallace v. Lincoln Sav. Bank, 89 Tenn. 630, 24 Am. St. Rep. 625, 15 S. W. 448. Such demand should be made upon the directors as a board, and not individually: Latimer v. Richmond etc. R. Co., 39 S. C. 44, 17 S. E. 258.

A demand is not necessary in order to enable a director to maintain a suit on behalf of his corporation, where express authority to sue is conferred upon him by statute: Miller v. Barlow, 79 N. Y. Supp. 964, 78 App. Div. 351.

d. Where a Receiver is in Charge.-No demand for redress upon the corporate authorities is necessary where the functions of the corporation have been suspended by the appointment of a receiver, its faculty for suing then no longer existing: Walter v. McAlister Co., 48 N. Y. Supp. 26, 21 Misc. Rep. 747, 27 Civ. Proc. Rep. 33. But in Am. St. Rep., Vol. 97-3

Cunningham v. Wechselberg, 105 Wis. 359, 81 N. W. 414, it was held that where a receiver was in charge of a corporation, a stockholder could not sue till the court had been appealed to to direct the receiver to bring action. A refusal by the receiver will not empower a stockholder to sue, and application should be made to the court: Swope v. Villard, 61 Fed. 417.

e. Excuses for Failure to Request Corporate Action.

1. Futility of Demand Must be Alleged.—An exception to the rule that a demand upon the corporation to proceed exists where such request would obviously be useless and unavailing, as the law does not require the doing of a vain and idle act: Memphis etc. R. Co. v. Woods, 88 Ala. 630, 16 Am. St. Rep. 81, 7 South. 108; Jefferson County etc. Bank v. Francis, 115 Ala. 317, 23 South. 48; Jasper Land Co. v. Wallis, 123 Ala. 652, 26 South. 659; Alexander v. Searcy, 81 Ga. 536, 12 Am. St. Rep. 337, 8 S. E. 630; City of Chicago v. Cameron, 120 Ill. 447, 11 N. E. 899, affirming 22 Ill. App. 91; Bruschke v. Der Nord etc. Verein, 145 Ill. 453, 34 N. E. 417; Schoening v. Schwenck, 112 Iowa, 733, 84 N. W. 916; Atchison etc. R. Co. v. Sumner County Commrs., 51 Kan. 617, 33 Pac. 312; Forrester v. Boston etc. Min. Co., 21 Mont. 544, 55 Pac. 229, 353; Barr v. New York etc. R. Co., 96 N. Y. 444; Wenzel v. Palmetto Brewing Co., 48 S. C. 80, 26 S. E. 1; Tazewell County v. Farmers' etc. Trust Co.. 12 Fed. 752.

The excuse must be alleged particularly and definitely, and the facts upon which it is based, mere conclusions not being sufficient: Bell v. Montgomery Light Co., 103 Ala. 275, 15 South. 569; Decatur etc. Land Co. v. Palm, 113 Ala. 531, 59 Am. St. Rep. 140, 21 South. 315; Albers v. Merchants' Exchange, 45 Mo. App. 206; and if no request, or excuse therefor, is alleged, the complaint states no cause of action: Beshoar v. Chappell, 6 Colo. App. 323, 40 Pac. 244.

2. Where the Officers are the Wrongdoers.-A valid excuse, often employed, is that the managing officers of the corporation are themselves the wrongdoers, against whose actions relief is sought; that in the litigation about to be commenced, they would be the defendants; and that it would be unavailing to request them to sue themselves. Where therefore, such officers are in control of the corporation, allegations setting forth those facts dispense with the necessity of a demand to sue: Bell v. Montgomery Light Co., 103 Ala. 275, 15 South. 569; Mayle v. Landers (Cal.), 21 Pac. 1133; Smith v. Dorn, 96 Cal. 73, 30 Pac. 1024; Brewer v. Boston Theater, 104 Mass. 578; Hannerty v. Standard Theater Co., 109 Mo. 297, 19 S. W. 82; Loomis v. Missouri Pac. Ry. Co., 165 Mo. 469, 65 S. W. 962; Albers v. Merchants' Exchange, 45 Mo. App. 206; Fitzgerald v. Fitzgerald etc. Co., 41 Neb. 374, 59 N. W. 838; Appleton v. American Malting Co. (N. J.), 54 Atl. 454; Robinson v. Smith, 3 Paige, 222, 24 Am. Dec. 212; Brewster v. Hatch, 10 Abb. N. C. 400; Davis v. Congregation, 57 N. Y. Supp. 1015, 40 App. Div. 424; Ithaca Gaslight Co. v. Tre

man, 30 Hun, 212; Stahn v. Catawba Mills, 53 S. C. 519, 31 S. E. 498; Loftus v. Farmers' etc. Assn., 8 S. Dak. 201, 65 N. W. 1076; Becker v. Real Estate Co., 80 Tex. 475, 15 S. W. 1094, citing Cates v. Sparkman, 73 Tex. 619, 15 Am. St. Rep. 806, 11 S. W. 846; Joy v. Fort Worth etc. Co. (Tex. Civ. App.), 58 S. W. 173; Crumlish v. Shenandoah Val. R. Co., 28 W. Va. 623; Eschweiber v. Stowell, 78 Wis. 316, 23 Am. St. Rep. 411, 47 N. W. 361.

Where the directors would pay no attention to a demand for relief, a stockholder may maintain a bill to vindicate the corporate rights: Fisher v. Patton, 134 Mo. 32, 33 S. W. 451, 34 S. W. 1096. So where the officers' interests are opposed to the suit, or they are confederating with the defendants in the misconduct, or the directors are under the control of the very persons who must be the defendants in the proposed action, no request is necessary: Knoop v. Bohmrich, 49 N. J. Eq. 82, 23 Atl. 118, affirmed in Bohmrich v. Knoop, 50 N. J. Eq. 485, 27 Atl. 636; Currier v. New York etc. R. Co., 35 Hun, 355; Meyers v. Scott, 50 Hun, 603, 2 N. Y. Supp. 753; Northern Trust Co. v. Snyder, 113 Wis. 516, 90 Am. St. Rep. 867, 89 N. W. 460. Where two of the four directors are in a conspiracy to defraud the corporation, and all four unite in resisting the assertion of corporate rights, a demand is useless, and suit may be instituted without it: Gerry v. Bismarck Bank, 19 Mont. 191, 47 Pac. 810. See, also, Tevis v. Hammersmith (Ind.), 66 N. E. 79, 912, affirmed in 67 N. E. 672. But the mere fact that the officers are pecuniarily interested adversely to the complainant does not of itself excuse proper efforts to obtain redress: Boyd v. Sims, 87 Tenn. 771, 11 S. W. 948.

3. Common Directors of Two Corporations.-Cases have arisen in which rival corporations have had common directors upon the managing boards, and have committed wrongful acts, detrimental to one of the companies, in order to advance the interests of the other. Boaz v. Sterlingworth etc. Co., 73 N. Y. Supp. 1039, 68 App. Div. 1, was a case of that kind, where the following language is used: "According to the complaint and the facts to be inferred therefrom by fair intendment, the officers and board of directors of the corporation in which plaintiff is a stockholder have given the use of all its property to a rival foreign corporation, of which they are also the officers and directors, without consideration, and without the consent of the stockholders. It is manifest that directors who would so betray their trust would not, by a mere demand and assertion of his rights on the part of a minority stockholder, be transformed into champions of the interests of the stockholders before the courts or elsewhere, or endeavor in good faith to undo the wrongs committed, or in process of commission, by themselves. In effect it would be requesting them to sue themselves. Such a demand, under these circumstances, would be futile and may well be dispensed with." See, also, George v. Central R. R. Co., 101 Ala. 607, 14 South.