to collect the assets and make distribution through the instrumentality of a receiver representing the corporation he will be directed to make the call, and generally has discretionary power to make it without specific directions to do so when found necessary to satisfy the claims of creditors.1 The act of the director in such cases may well be considered the act of the court, which does no more than it was the duty of the corporation to do.2 1 See Cartwright v. Dickinson, 88 Tenn. 476, infra. 2 Scoville v. Thayer, 105 U. S. 143; Glenn v. Williams, 60 Md. 93; Glenn v. Semple, 80 Ala. 159; Hatch v. Dana, 101 U. S. 205; March v. Burroughs, 1 Woods, 463; Boeppler v. Menown, 7 Mo. App. 447; Adler v. Milwaukee Pat. B. Mfg. Co., 13 Wis. 57; Glenn v. Dodge, 3 Cent. Rep. 283; Gt. W. Tel. Co. v. Gray (Ill.), 14 N. E. Rep. 214; Ward v. Griswoldville Mfg. Co., 16 Conn. 593; Miller's Case, 54 L. J. Ch. 141; Henry v. Vermillion, etc., R. R. Co., 17 O. 187; Ogilvie v. Knox Ins. Co., 22 How. 380; Curry v. Woodward, 53 Ala. 371; Chandler v. Keith, 42 Ia. 99; Shackley v. Fisher, 75 Mo. 498. And it has been held that the filing of the bill was itself equivalent to a call. Hatch v. Dana, supra; Thomson v. Reno. Sav. Bank, 19 Nev. 103, 171, 242, 291, 293. See also, Glenn v. Saxton, 68 Cal. 353; Yarger v. Scranton, etc., Bank, 14 Wkly. N. Cas. 296. The court may prescribe proper formalities as regards notice, demand, etc., and these must be strictly pursued in order to entitle the receiver to maintain the action. Sav. Bk. v. Fatzirger (Pa.), 4 Atl. Rep. 912. After some conflict in New York the rule stated in the text became established there as elsewhere. Sagory v. Dubois, 3 Sandf. Ch, 466. 1011. Dissolution by consolidation with another corporation. 1013. Recognition of the fact of dissolution by the state. 1015. Property rights preserved in equity. 1016. Effect upon title to real estate. 1017. Property acquired by eminent domain. 1018. 1019. 1020. Where there are no shareholders or creditors. A court of equity will preserve rights of parties. 1021. Adaptability of equitable remedies. § 1006. Meaning.-Some confusion exists as to what constitutes the termination of corporate existence, and a corporation has often been said to be dissolved upon a state of facts not warranting such conclusion. All the seeming uncertainty in this matter, grows out of confounding the practical effect of a cessation of the business and abandonment of the enterprises for which a corporation was formed by the members composing it with its legal dissolution. The question is purely legal. A court of equity may acquire jurisdiction to wind up the affairs of a corporation, distribute its assets and thus put an end to its business career in some instances, before or generally after its dissolution, but has no power to destroy the legal entity whose estate it has thus administered.1 And even where given jurisdiction by statute to dissolve corporations an order of dissolution of a corporation engaged at the time in active business with a large amount of assets and a full board of directors will be set aside on appeal.2 Again the body of corporators may elect to abandon the corporate enterprise, sell its property, and become members of another corporation, and by so doing subject the franchises of the original corporation to forfeiture for nonuser but until a judgment of forfeiture or voluntary formal dissolution in the manner pointed out by statute, the corporate entity does not become extinct.3 Common law writers have sometimes attempted to illustrate what they considered other means of accomplishing dissolution than by surrender and forfeiture. But the instances given when closely examined, present nothing more than acts or conditions amounting to either a surrender or a cause of forfeiture which, if urged, would warrant legal dissolution by judgment of court. It is true that a corporation may surrender its franchises as such under statutory provisions and could do so at common law, and may still do so in the absence of statutory direction. But at common law, no mode of surrendering a char 1 Neall v. Hill, 16 Cal. 145; French B'k Case, 53 Id. 495; Swan, L. etc., Co. v. West, 39 Fed. Rep. 456. In Illinois courts of equity have jurisdiction to dissolve corporations. 1 Star, etc., Stat. Ill. C. 22, Sec. 25; St. Louis, etc., S. C. M. Co. v. Sandoval, C. & M. Co., 116 Ill. 170; 5 N. E. 370. 2 In re Mart, 52 Hun, 227. 3 Sullivan v. Triunfro S. M. Co., 39 Cal. 459; Kohl v. Lillienthal, 81 Cal. 378; 22 P. 689. ter was pointed out, and it could be done either by a deliberate and formal proceeding, or by other equivalent action. And the instances given by common law writers of acts which are sometimes at the present day claimed to amount to dissolution were no more than surrenders of franchises. consisting of a The case of the loss of its integral parts by a corporation aggregate, was cited from Rolle,' by Chancellor Walworth in Phillips v. Wickham,2 in support of a conclusion that by such loss the corporation was thereby dissolved. But the learned chancellor evidently lost sight of the fact that whatever view may be taken of the relation and function of members in a corporation in equity, they are considered at law as entirely distinct from it. In the case supposed of a corporation certain number of brothers and a certain number of sisters, in which the sisters or brothers have died to say in this case, that their death meant the death of the corporation because it cannot subsist by halves, is but to commit the common mistake of confounding the corporate entity with the membership. It is well established that all the members may abandon the corporate entity and become lost to the corporation without destroying it; then why should the loss of one half or less than all, or even of all, have the effect of dissolution? But while in strict legal contemplation, the loss of all or of an essential part of the members does not destroy or dissolve the corporate entity, yet the administration of justice will proceed to the same results as if actual dissolution by surrender or forfeiture had occurred. Indeed, non-user for a long time, justifies a presumption of a surrender. A statute allowing con 1 Rolle Abr. 514. 2 1 Paige, 596. 8 State v. Vincennes University, 5 Ind. 77; Brandon Iron Co. v. Gleason, 24 tinuance of their powers after dissolution for the purpose of winding up the business does not take away the common law method of dissolving a corporation.1 It is sometimes necessary to treat incorporated clubs and societies whose members are elected by vote of existing members, but which have disorganized or otherwise lost their membership, just as if the corporation were dissolved. But the mere death of members has ceased to be a matter of any importance in the case of corporations whose capital is represented by shares. of stock transferable by assignment or operation of law. Such shares will, while outstanding, always be the property of individuals who, for the time being, will constitute the membership of the corporation. § 1007. Abandonment not dissolution. By adhering to the legal definition of terms there should be no difficulty in determining when a termination of corporate existence has taken place. The franchise of being a corporation aside from its more extensive legal definition as a political agency, is a species of property belonging to the incorporators. This right of property like that to an estate, is not extinguished or divested by mere nonuser, but may be abandoned and remain in abeyance and be again resumed. The body of corporators after disbanding, may, if they see fit, subsequently reorganize and again set the legal entity in motion under its original name and in the exercise of all its former powers.2 Courts have, in several instances, treated corporations as having been dissolved for the purpose of attaining Vt. 238; Strickland v. Pritchard, 37 Vt. 324; See Regents of University v. Williams, 9 G. & J. 365. 1 School Dist. v. Greenfield, 64 N. H. 84 2 Featherstonehaugh v. Le Moor, etc., Clay Co., L R. 1 Eq. 318. |