for the same was made or suit begun, when it would be too late to make objection.

To obviate this hardship, it has been provided by statute in Illinois that the stockholder shall be made a party to the original proceeding; and it is held that, in order to bind him by the original proceeding, the receiver must, in an action on his subscription, show his appointment by a decree which is conclusive against the defendant.1

§ 858. When want of notice excused.-Where it is clearly shown that the delay which would result from giving notice would defeat the rights of plaintiff or would cause great injury to him, the court may appoint a receiver upon ex parte application without notice to the adverse party.2

But in order to warrant the appointment without notice the participants and circumstances rendering such summary proceeding necessary must be specified in the application, and a mere statement of opinion as to such necessity will not be sufficient."

A departure from the rule requiring notice is also allowed when a defendant has absconded for the purpose of avoiding service of process.*

But unless it is shown that the defendant has left the country or is concealing himself to avoid the service

1 Chandler v. Brown, 77 Ill. 33.

2 Maynard v. Railey, 2 Nev. 313. That a receiver was appointed without notice to the adverse parties is immaterial where the question of propriety of such appointment has been heard before the judge of district court and both parties have had ample opportunity of being heard. Elwood v. First Nat. Bank, 41 Kan. 475; 21 P. Esr.

3 Verplank v. Mercantile Ins. Co., 2 Paige, 438. In this case the application was founded upon an affidavit, which stated that affiant was satisfied of the necessity of the appointment. The court said: "He should have stated the facts on which his opinion was founded to enable the court to judge of its correctness."

4 Maguire v. Allen, 1 Ball. & B. 75; Dowling v. Hudson, 14 Beav. 423.

of process or from other cause, it cannot be served, or that particular hardship would result from delay, an ex parte application for a receiver should not be entertained.1

This rule requiring notice to defendant applies as well to the cases of applications for receivers of insolvent corporations as in other cases, and a copy of an order must be served upon the proper officers, directing them to appear at a future day therein named to show cause, if any, why the application should not be granted.2

§ 859. The fiduciary relation of receivers. The law recognizes a receiver's character of trustee and will not permit him to derive a personal profit or advantage in the execution of the trust any more than in the case of other trustees.

He may not, for instance, purchase for his own benefit property connected with or forming a part of the trust fund in his possession, for he would thus be subjecting himself to temptations arising from a conflict between the interest and duty of a trustee.

And after he has made a purchase of property pertaining to his receivership, he will not be allowed to retain the benefit of it unless it appears that it would be clearly for the benefit of the parties in interest that he should do so. Such purchase will be binding or voidable at their option. And the right to void the purchase by the receiver is entirely independent of the question whether or not the sale was effected by any actual fraud.1

1 Stratton v. Davidson, 1 Russ. & M. 484.

2 Devoe v. Ithaca, etc., R. Co., 5 Paige, 521.

3 Carr v. Houser, 46 Ga. 477; Jewett v. Miller, 10 N. Y. 402; Anderson v. Anderson, 9 Ir. Eq. 23; Alven v. Bond, Flan. & K. 196; 3 Ir. Ch. N. S. 534. 4 Jewett v. Miller, supra.

The equitable rules which govern receivers and restrain their actions to a strict and faithful execution of the trust, and of which the above is one illustration, are those which apply to other trustees except that owing to the numerous and conflicting interests which they often represent their duties are often more complicated and difficult of performance.

§ 860. Parties and interests represented by receivers of insolvent corporations.-We have seen that the jurisdiction of courts of equity has in most of the states been extended to the appointment of receivers in behalf of creditors and shareholders of insolvent corporations.

A receiver of an insolvent corporation stands as the representative both of its creditors and shareholders.1

And while in technical strictness he also represents the corporation as its agent, it would be difficult to conceive of any equitable interest which the legal entity has in the trust held by him which is not also that of the other two classes of cestuis

que trust.

But while with respect to the beneficial interests he represents only the creditors and shareholders, yet neither those interests nor the nature and extent of his title can be determined without regarding him as representing only the corporate entity and vested with the legal title to the property of the corporation and of none other.

It may be said very properly, in a general sense, in this as in other cases, that he represents the creditors and stockholders, but for all the purposes of inquiring into his title he really represents the corporation.

He takes merely such rights of the corporation as could be asserted in its own name and on that basis

1 Libby v. Rosekrans, 55 Barb. 203, 217; Gilbert v. Moody, 3 N. Y. 479; Talmadge v. Pell, 7 N. Y. 347.

only can he litigate for the benefit of either stockholders or creditors except when acts have been done in fraud of the rights of the latter but valid as to the corporation itself.1

The rule that in actions he represents the corporation holds good where actions are brought against him in his official or representative character.

He can only interpose such defences as the corporation might have interposed and none other. Where a statute prohibited a corporation from setting up usury as a defence to any action brought against it, it was. held that the receiver could not interpose such defence any more than the corporation itself could have done.2

§ 861. He acquires rights of action. As constituting part of and falling within the definition of the term property which he acquires by virtue of his appointment, a receiver takes all rights of action which the corporation itself originally had, and may enforce them by the same legal remedies. No statutes with respect to

1 Curtis v. Leavitt, 15 N. Y. 44. In delivering the opinion, COмSTоck, J., said: "He is by law vested with the estate of the corporate body, and takes his title under and through it. It is true, indeed, that he is declared to be a trustee for creditors and stockholders, but this only proves that they are the beneficiaries of the funds in his hands, without indicating the sources of his title or the extent of his powers. If, then, in a controversy between the receiver and third parties in respect to the corporate estate, it is possible to form a conception of rights, legal or equitable, belonging to the shareholders as individuals, which the corporation itself could not assert in its own name, the receiver does not represent those rights. So far as shareholders are concerned, he can litigate respecting the fund upon precisely the grounds which would be available to the corporation, if it were still in existence, solvent, and no receivership had been constituted. In regard to creditors, I should certainly incline to take the same view of his rights and powers under the statutes referred to." See also, Alexander v. Relfe, 74 Mo. 495; Billings v. Robinson, 94 N. Y. 415; Cutting v. Damerel, 88 Id. 410, reversing s. c. 23 Hun, 339; Bristol v. Sandford, 12 Blatchf. 341; Arenz v. Weir, 89 Ill. 25.

2 Curtis v. Leavitt, supra.

3

Osgood v. Laytin, 48 Barb. 464; Brouwer v. Hill, 1 Sandf. 629; White v. Haight, 16 N. Y. 310; Stark v. Burke, 5 La. Ann. 740; New Orleans Gas-Light Co. v. Bennett, 6 La. Ann. 457; Shaughnessy v. The Rensselaer Ins. Co., 21

rights of action or defences are affected by the appointment of a receiver.1 The receiver is also entitled to the benefit of contracts entered into by the corporation and performed by him after its affairs were placed in his hands.2

And his right to money due on contracts of the corporation which have been carried out by him, for the benefit of the creditors generally, cannot be defeated by an individual creditor who serves a garnishee process upon the debtor.3

§ 862. Title to property in foreign jurisdictions.—A receiver of an insolvent corporation appointed in one state to administer the assets there has no power to transfer to a foreign jurisdiction any question touching the distribution of such assets. He cannot deprive the court which appointed him of its authority over him, and over the fund which he holds as its officer.*

Barb. 605; Gas-Light & Banking Co. v. Haynes, 7 La. Ann. 114; Hyde v. Lynde, 4 N. Y. 387; Lawrence v. McCready, 6 Bosw. 329; Berry v. Brett, Ib. 627.

1 Moise v. Chapman, 24 Ga. 249; Dovendorf v. Beardsley, 23 Barb. 656. In the latter case Mr. Justice JAMES observes, p. 659, as follows: "The plaintiff, as receiver of the American Mutual Insurance Company, takes its notes and assets subject to all the conditions and legal disabilities with which they were trammeled in the hands of the corporation itself; he cannot impeach or disaffirm its authorized acts, nor the authorized acts of its agents. If a note in the hands of the corporation was void, or incapable of enforcement, by reason of fraud or illegality in its procurement or inception, passing it into the hands of a receiver does not purge it of these defects." See Williams v. Babcock, 25 Barb. 109; Bell v. Shibley, 33 Barb. 610. And see Shaughnessy v. The Rensselaer Ins. Co., 21 Barb. 605; Savage v. Medbury, 19 N. Y. 32.

2 The right to maintain an action under Rev. St. U. S., § 5239, to recover of a bank director the damages sustained by his bank in consequence of excessive loans made by him while serving in the capacity of director, is not affected by the fact that the comptroller has or has not procured a forfeiture of the bank's charter. Stephens v. Overstolz, 43 F. 771.

3 Blake, etc., Co. v. New Haven, 46 Conn. 473; Cooke v. Orange, 48 Conn. 401; Ellis v. Boston, etc., R. R. Co., 107 Mass. 1. In the first case here cited no notice had been given to the debtor not to pay the money; but the court held that no actual notice to him was required of the receiver. Receivers are usually required, however, to give general notice of their appointment and authority.

+ Reynolds v. Stockton (N. J.), 10 A. 385; Parsons v. Chester Oak L. Ins.