it is only meant that such demand shall have been made upon the managing agents or their refusal be shown.1

The mere refusal of the agents of the corporation to bring suit will not authorize a shareholder to himself conduct such suit. Their refusal must appear to have been wrongful, and to have been made by a majority of the board of directors; the refusal of the president alone is not sufficient.2

And where, as is often the case, such managing agents are the parties whose wrongful conduct or default constitutes the cause of complaint, it is apparent that a demand upon them to sue themselves would be absurd, and might defeat the object of the suit. When, therefore, the complaint shows that a previous demand would, from any cause, have been useless or unavailing, it is not demurrable on the ground that it does not allege a previous demand on the corporation to bring the suit.3

1 M., etc., R. Co. v. Wood, 88 Ala. 630; 7 So. 108.

2 Wallace v. Lincoln Sav. B'k (Tenn.), 15 S. W. 448, holding also that where a corporation is in the hands of a trustee in insolvency, and he declines to sue, deeming himself unauthorized, a shareholder may conduct the suit.

3 Currier v. N. Y., etc., R. R. Co., 35 Hun, 355; Robinson v. Smith, 3 Paige, 222; Peabody v. Flint, 6 Allen, 52; Brewer v. Boston Theatre Co., 104 Mass. 378, 387; City of Chicago v. Cameron, 120 Ill. 447; 11 N. E. 899; Mussina v. Goldwaithe, 34 Tex. 125; Nathan v. Tompkins, 82 Ala. 437; 2 So. 747; Pond v. Vt. Val. R. R. Co., 12 Blatchf. 280; Hardon v. Newton, 14 Blatchf. 376; Eschweiller v. Stowell (Wis.), 47 N. W. 361; Hazard v. Durant, 11 R. I. 195; Salomons v. Laing, 12 Beav. 377; Heath v. Erie Ry. Co., 8 Blatchf. 410; Rogers v. Lafayette Agricultural Wks., 52 Ind. 296; Deaderick v. Wilson, 8 Baxter (Tenn.), 108; Moore v. Schoppert, 22 W. Va. 282, 290. A demand will be excused where it is shown that the corporation is under the control of the defaulting directors. such demand being in that case useless. Moyle v. Landers, 78 Cal. 99; 20 P. 241. Where one corporation acquires a majority of the stock of a rival corporation, and a bill is filed by a stockholder of the latter company to enjoin the other company from voting in an election of directors, which fails to allege a demand and refusal upon the part of the directors of complainant's company to bring the suit in the corporate name, such failure is excused if the directors of defendant company had constituted a majority of the governing board of complainant company. Mack v. De Bardelaben C. & I. Co. (Ala.), 8 So. 150. But until it is shown that every reasonable effort has been made to obtain redress, through the regularly constituted agents and controlling power of the corporation, or that any such effort would be useless, a shareholder cannot sue in his own name

But in order to entitle a stockholder to institute and maintain a suit in equity against a solvent corporation, to redress a corporate injury committed infra vires in the full exercise of its franchises and in carrying on its corporate business, it must appear not only that the directors are disabled by their misconduct to sue, or that they have wrongfully refused to do so upon proper demand, but, when the matter will admit of the necessary delay, and it is practicable to call upon the stock. holders to act, this must also be done. So if all the directors have resigned or cannot be found, a previous

alone, nor on behalf of himself and other stockholders. Rathbone v. Gas Co., 31 W. Va. 798.

1 Rathbone v. Gas. Co., 21 W. Va. 798; 8 S. E. 570; Byers v. Rollins, 26 Am. & Eng. Cor. Cas. 117, n.; Nathan v. Tompkins, 19 Am. & Eng. Cor. Cas. 336; Dunphy v. Trav. Newsp. Ass'n, Id. 346; Rothwell v. Robinson, 21 Id. 408, n., to p. 409; Lang Syne Min. Co. v. Ross, 21 Id. 410; Taylor v. Holmes, 21 Id. 419. Where a stockholder of an insolvent corporation in the hands of a receiver desires to sue the former directors for a loss incurred by the corporation on account of their malfeasance, it is not enough to show the failure or refusal of the receiver to bring the action, but he must, as the representative of the corporation, be made a party defendant to the suit. Porter v. Sabin, 35 Fed. Rep. 475. See Ayer v. Seymour, 5 N. Y. Supp. 650, where injunction was granted and receiver pendente lite appointed in a case of fraudulent combination and deprivation of rights of shareholder. Davis v. Gemmell, 70 Md. 356; demand excused because officers themselves guilty of the wrong-doing. Boyd v. Sims, 3 Pickle (Tenn.), 771; 11 S. W. 948, where it was held that a stockholder could not without a demand upon the directors and their refusal sue another company charged with wrongfully interfering with the rights of their company, simply because a majority of their directors were stockholders to a larger extent in the defendant company than in their own, and a minority were also directors in the defendant company; Alexander v. Searcy, 81 Ga. 536; 8 S. E. 630, holding that the minority stockholders cannot maintain a bill to prevent a foreclosure of a mortgage where the only ground alleged is the mismanagement of the corporation in the interest of the principal bondholders and stockholders, without also alleging a demand upon and refusal by the directors, and no excuse for not so doing is shown except that the officials were in collusion with the persons seeking the foreclosure; East Rome Town Co. v. Brower, 80 Ga. 258, where it was held that the complaint did not show facts sufficient to excuse demand. And where the treasurer held a majority of the stock, that was held not to excuse a demand upon the directors to bring suit, but that it did excuse a demand upon a stockholder's meeting: Dunphy v. Trav. Newsp. Ass'n, 146 Mass. 495; 16 N. E. 426. See also Rothwell v. Robinson, 39 Minn. 1; 38 N. W. 772.

demand is impossible, and a sufficient reason exists for not making it.1

§ 613. True basis of jurisdiction. The principle on which a simple shareholder is allowed to sue in equity is, that there is no legal remedy available, and that where there is a wrong a party will not be left without a remedy, if it be in the power of a court of equity to furnish one. But this principle cannot be invoked where the corporation is both willing and able to proceed; and it will never be presumed either that it is unable or unwilling.

The primary and best evidence of its unwillingness is proof of a demand upon the proper agents and their refusal. Evidence of the existence of such facts, as mentioned in the last preceding section, is but an excuse for the absence of the demand, or the unwillingness or inability of the corporation to sue, In some way, it must be made to appear that the proper agents or officers are either unable or unwilling to bring the suit on behalf of the corporation.3 But this rule has been held not to apply

1 Wilcox v. Bickel, 11 Neb. 154; 8 N. 436.

2 Bill v. Western Un. Tel. Co., 16 Fed. Rep. 14; Hersey v. Veazie, 24 Me. 11; Foss v. Harbottle, 2 Hare, 495; Re London, etc., Discount Co., L. R. 1 Eq. 277. A stockholder cannot obtain an injunction to prevent a slander upon the title of the corporation there being a complete legal remedy in an action for damages. Langdon v. Hillside C. & I. Co., 41 F. 609. See also, Thomas v. Mus. Mut. P. Un., 121 N. Y. 45; 24 N. E. 24; Rogers v. Phelps, 9 N. Y. S. 886; 56 Hun, 649. 3 Hersey v. Veazie, 24 Me. 9; Cogswell v. Bull, 39 Cal. 324; Hodgson v. Duluth H. & D. R. Co. (Minn.), 49 N. W. 197 (Aug., 1891); Boyd v. Sims, 3 Pickle (Tenn.), 771; 11 S. W. 948; McMurray v. Northern Ry. Co., 22 Grant, (U. C.), Ch. 476; Moore v. S. V. Min. Co., 104 N. C. 534; 10 8. E. 679; Holton v. New Castle, etc., R. Co. (Pa.), 20 A. 937; Memphis City v. Dean, 8 Wall. 73. To the same effect see Greaves v. Gouge, 69 N. Y. 154; Morgan v. R. R. Co., 1 Woods, 15; Newby v. Oregon, etc., R. Co., 1 Sawy. 63; Samuel v. Holladay, 1 Woolw. 414; Wilkie v. Rochester, etc., Ry. Co., 12 Hun, 242; Black v. Huggins, 2 Tenn. Ch. 780; Ware v. Bazemore, 58 Ga. 316; Talbot v. Scripps, 31 Mich. 268; Lothrop v. Stedman, 42 Conn. 583; Hawes v. Oakland, 104 U. S. 450, 460. In action by a stockholder against a railroad corporation and its directors, the bill alleged a violation of agreements between the corporation and

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where a remedy is sought, not for the corporation, but for the shareholders themselves, though it is difficult to see a distinction between the one case and the other.1 If the facts, as alleged, show that the defendants charged with the wrong-doing, or some of them, constitute a majority of the directors or managing body at the time of commencing the suit, or that the directors, or a majority thereof, are still under the control of the wrongdoing defendants, so that a refusal of the managing body, if requested to bring a suit in the name of the corporation, may be inferred with reasonable certainty, then an action by a stockholder may be maintained without alleging or proving any notice, request, demand or express refusal. In like manner, if the plaintiff's pleading discloses any other condition of fact which renders it reasonably certain that a suit by the corporation would be impossible, and that a demand therefor would be nugatory, the action may be maintained without averring a demand, or any other similar proceeding on the part of the stockholder plaintiff.""

others, the use of its credit for unauthorized purposes, the wasting and diversion of its assets from their proper purpose, and the aiding in the construction of a competitive line. It was averred that protests were made against such action, but it was not alleged that they were made by or on behalf of complainant or other stockholder. It was held that the action being founded on rights which the corporation might properly assert, a preliminary injunction would not be granted, since it did not appear what particular efforts had been made by complainant to secure action by the directors in respect to the matters complained of, nor the causes for his failure to obtain relief from them. Weidenfeld v. Alleghany & K. R. Co., 47 F. 11 (Oct., 1891).

1 Barry v. Plate-Glass Co., 40 F. 412; Myers v. Scott, 7 N. Y. S. 753; 50 Hun, 603.

2 Pomeroy's Equity Jurisprudence, sec. 1075, and cases cited in note. See also, Averill v. Barber, 6 N. Y. S. 255; 53 Hun, 636; Ashton v. Dashaway Ass'n, 84 Cal. 61; 22 P. 660; 23 P. 1091; Ives v. Smith, 8 N. Y. S. 46; 55 Hun, 606. The principle governing in such cases has been thus clearly expressed :"An application by plaintiff to them (the agents) to prosecute the wrong would be an application to bring suit against themselves in the name of the corporation. So absurd a requirement cannot be imposed on plaintiff as a condition of affording relief for so clear a wrong." Rothwell v. Robinson, 39 Minn. 1; 38 N. W. 772, per GILFILLAN, Ch. J. See also, Mussina v. Goldwaithe, 34 Tex. 125;

§ 614. Where plaintiff owns shares in two corporations.— This principle has an important application where the same persons are stockholders in two separate and distinct corporations. Stockholders of one cannot maintain a suit against the other for an alleged injury to their own company unless the latter has been asked to sue and refused or failed to do so. If this were not the rule corporation A might be sued by any or every stockholder of corporation B, who considered that the latter was aggrieved by the acts of the former.1

§ 615. Injunction and specific performance.-Cancellation, etc.-An injunction will always be granted at the suit of members or shareholders of a corporation, to restrain its officers and agents from doing ultra vires or illegal acts whereby an injury is threatened to their interest in the corporate enterprise, no matter in what the unwarranted attempt consists. But a clear excess of corporate power must be shown, and an attempt to carry out an enterprise foreign to the purposes for which the corporation was formed, and which if consummated

March v. Eastern R. R. Co., 40 N. H. 548. "Where the corporate affairs are mismanaged by a majority of the directors conspiring together, a stockholder need not demand that the directors bring suit against the conspirators before suing therefor in his own name.". Wayne Pike Co. v. Hammons (Ind.), 27 N. E. 487.

1 Boyd v. Sims, 26 Am. & Eng. Cor. Cas. 109; 3 Pickle, 771; 11 S. W. 948; Botts v. S. & B. C. Tp. Co. (Ky.), 10 S. W. 134. See also, Huntington v. Palmer, 104 U. S. 482; Memphis, etc., Gas Co. v. Williamson, 9 Heisk. (Tenn.) 314, 338. The stockholders of a corporation sued the officers of the company. the company itself, and another company, with which it had been consolidated by the officers, praying for the appointment of a receiver, and a recovery in their own behalf as stockholders. The petition alleged the misappropriation of the corporate funds by the president and directors, and the fraudulent transfer of the stock and property to another corporation, and that one of plaintiffs demanded of the president and officers that the property be restored to the corporation, and the business of the company be placed on its former footing. Held, that it sufficiently showed that plaintiffs made a proper effort to obtain redress within the corporation before bringing the suit. Becker v. Directors of Gulf City St. Ry. & Real-Estate Co. (Tex.), 15 S. W. 1094.