erence to one creditor standing in equal right with and having no acquired priorities over others.

It is held that he cannot allow the officers of the corporation the amount due them as salaries for past services except as debts to be paid ratably with other creditors.1

While a receiver has no right to waive a legal defence against the corporation or to settle demands upon equitable principles regardless of the rules of law, yet he may, in good faith, with a due regard to all the interests entrusted to him, compromise and settle disputed claims either against or in favor of the corporation.

§ 875. Suits by receivers.-A receiver derives his right to sue on all causes of action accruing in favor of the corporation, under the order of court appointing him.

Under such order, by virtue of statutes authorizing the party in interest to sue in his own name, independent of a special statute allowing him to sue, he may bring actions for all moneys due to the corporation, and to recover all its property held in violation of its rights or the possession of which has been acquired fraudulently or illegally.3

1 Matter of Croton Ins. Co., 3 Barb. Ch. 643. It was decided, however, in this case that an officer against whom the receiver holds a note may offset a sum due him as unpaid salary as a credit on the note.

2 Suydam v. Receivers, 2 H. W. Green (3 N. J. Eq.), 114; In re Croton Ins. Co., 3 Barb. Ch. 642. An order directing the sale of all the assets, property and business, of an insolvent corporation does not authorize the sale of causes of action which the receiver might have enforced only in the right of creditors. Such sale does not transfer the right to sue the stockholders for capital withdrawn in the shape of unearned dividends. Minnesota Thresher Manuf'g Co. v. Langdon, 46 N. W. 310; 44 Minn. 37.

3

Gray v. Lewis, 94 N. C. 392; Atty.-Gen. v. Guardian, etc., Ins. Co. N. Y. 272; Gillet v. Moody, 3 Comst. 479.

A receiver appointed by the chancellor to collect the assets of an insolvent savings institution may sue in his own name, although the statute authorizing his appointment does not expressly authorize him to do so. Wilkinson v. Ruthford (N. J.), 8 A. 507. In Farnsworth v. Western Un. Tel. Co., 53 Hun, 636; 6 N. Y. S. 735, it was held that the arrangement between defendant and the

An action brought by a receiver is considered as brought under the order of the court, and unauthorized suits against third parties under pretence of authority derived from the court are in abuse of the discretion and power entrusted to him. He will, therefore, be restrained on application to the court of parties against whom suits have been instituted without foundation or pretence of right, from further prosecution of such suits.1

corporation under its direction, a receiver thus appointed, pending an action on behalf of the corporation brought by its treasurer, is entitled to be made a party plaintiff in such action. Houston v. Hedwine (Ga.), 11 S. E. 662.

Upon an adjudication of the insolvency of a corporation and the appointment of a receiver of its property and effects under Gen. St. Minn., c. 76, the right to recover capital withdrawn in the guise of unearned dividend paid to the stockholders passes to the receiver as representing all the creditors, and the right of the creditors under chapter 34, sec. 139, to maintain such an action is suspended during receivership. Minnesota Thresher Manuf'g Co. v. Langdon, 44 Minn. 37; 46 N. W. 310.

A receiver in supplementary proceedings appointed "to take charge and custody of all property, choses in action, and things of value" belonging to the judgment debtors "with all the rights, powers, and privileges of a receiver under the law," may bring actions to recover the judgment debtors' property without special leave or direction of the court. Will v. First Nat. Bank, 106 N. C. 1; 11 S. E. 277.

Although the order appointing a receiver pendente lite in mortgage foreclosure proceedings authorized him to bring such suits as he might be advised, he cannot maintain his suit in equity to obtain an adjudication that certain real property is subject to the lien of the mortgage, and that all liens claimed thereon by parties in possession and parties out of possession are invalid against him, and to obtain possession thereof against one claiming adversely, where neither the mortgagor nor mortgagee is made a party, and no assignment by them to him of the property or cause of action is shown. Harland v. Bankers' & Merchants' Tel. Co., 32 F. 305.

A receiver appointed in an action to foreclose a mortgage given by a telegraph company, and claimed to cover all subsequently acquired property of the mort gagor, cannot maintain a bill for an accounting for damages suffered by the mortgagor, from breach of a contract to construct certain telegraph lines. Id. Under an order appointing a receiver pending foreclosure, and authorizing him to sue as he may be advised, he cannot sue for a decree declaratory of the right of the mortgagee and other lien holders in the property, and to obtain possession thereof, the relief being in the nature of an ejection, of which equity has no cognizance, even though plaintiffs' title is not such as to afford him a remedy at law, and the former a proper subject for a supplemental bill in the foreclosure. Harland v. Bankers' & Merchants' Tel. Co., 33 F. 199.

1 In Re Merritt, 5 Paige, 125.

But at common law he cannot maintain an action for the benefit of creditors against stockholders for unpaid balances on their subscription, and he can only acquire the right to bring such action under statutes. In the absence of such statutes the action should be brought in the name of the creditor against the corporation and the delinquent stockholders jointly.'

§ 876. Effect of the appointment upon the rights of creditors. etc. The statutes of the several states and the practice of the courts must be consulted for definite knowledge of the duties and powers of receivers and assignees in insolvency proceedings.2

Their general powers, however, are indicated by the

receiver, being in fact a lease of the A. company's lines for the private benefit of the defendant, although the agreement was designated as an agency, an action for damages for defendant's trespass is in no sense an action against the receiver requiring the consent of the court which appointed him. The receiver of a corporation appointed in a foreign jurisdiction will be allowed to sue to foreclose a mortgage given to the company on land in Alabama where no creditor of the corporation asserts any rights, and ample opportunity has been afforded for that purpose, and only the parties litigant are interested. Boulware v. Davis (Ala.), 8 So. 84.

After reversal on error of a judgment against a corporation which meantime has been dissolved and a receiver appointed, the judgment obtained in the new trial, to which the receiver was no party, is void as against the assets in his hands. People v. Knickerbocker Life Ins. Co., 106 N. Y. 619; 13 N. E. 447. Where receivers of a railroad company, under an order of court authorizing them to take charge of all the company's property of every description including leases, carry on the roads and have the use and benefit of certain sleeping cars, with knowledge of the terms of a lease under which the cars were held and used by the company, they became the assignees of the company, and are bound to perform its covenants, as to the care and return of the leased cars. Easton v. Houston T. C. Ry. Co., 38 F. 784. A corporation was dissolved for entering into a partnership for the illegal purpose of monopolizing the manufacture and sale of sugar, and a receiver of the corporation was appointed, with directions to convert its property into money. Held, that as the partnership agreement was illegal, the receiver was not entitled to an accounting of the partnership property. Gray v. Oxnard Bros. Co., 11 N. Y. S. 118.

1 See Adler v. Milwaukee, etc., Co., 13 Wis. 57; Stillman v. Dougherty, 44 Md. 380; Chandler v. Keith, 42 Iowa, 99; Pentz v. Hawley, 1 Barb. Ch. 122; Van Cott v. Van Brunt, 2 Abb. Pr. N. C. 283; Holmes v. Sherwood, 16 F. 125; Hodges v. Silver Hill Mining Co., 9 Oreg. 200.

2 Infra, Ch. XXXVI.

circumstances and nature of the cases calling for their appointment.

Their general duty to the corporation is to collect all its assets, to which the creditors are entitled, whether they be such as the corporation itself might collect or not; and to the creditors to pay them in the proportion and order required by law and directed by the orders of the court.

§ 877. Extent of right to sue.-There is no limit to the right of the receiver to bring actions other than that to which the corporation itself is subject. He may sue the directors of the corporation not only for breaches of trust, but for statutory penalties incurred by them where the penalty goes to the creditors generally.1

1 Bank of Niagara v. Johnson, 8 Wend. 645. Intervention by the receiver of a dissolved corporation, on hearing of a writ of error from a judgment obtained against a corporation before dissolution, for the purpose of protecting his interest and assets given as indemnity to the sureties on the bond in error, does not estop him to defend a claim against the assets in his hands, based on a judgment rendered after remand in a new trial on the merits, to which he was no party. People v. Knickerbocker Ins. Co., 106 N. Y. 619; 13 N. E. 447.

A receiver appointed in Alabama by the chancellor in a suit by certain stockholders of an insolvent bank, and "authorized and directed to institute such suits at law and in equity as in his judgment may be necessary against all persons who are indebted to said bank or against whom debts are claimed by said bank, and who fail or refuse to pay without suit," can file a bill as sole complainant to foreclose a mortgage given to the bank, but must join the bank as a party. Comer v. Bray, 83 Ala. 217; 3 So. 554.

But where the receiver of an insurance company applies for and obtains an order to bring suit on a guaranty given by another company, that it would fulfill all contracts entered into by the former company, he cannot maintain such suit on the ground of the misappropriation of assets of the company by defendant. Pierson v. Cronk, 54 Hun, 636; 7 N. Y. S. 573.

After the sale of the property of a railroad company under mortgage and a subsequent sale by the purchaser to a new company, the receiver of the old company cannot, by summary process, compel the officers of the new to turn over to him the books of the old company, which books passed into their possession when the property changed hands, and have been used as the books of the new company, though the same persons were the officers of the old company. Olmsted v. Rochester & P. R. Co., 46 Hun, 552.

Under Code Ga., sec. 1688, providing that on dissolution of a corporation the superior court may appoint a receiver properly to administer the assets of the

§ 878. Suits against receiver. Very little need be said concerning the right of parties to establish by suit claims. growing out of corporate transactions against the estate of a corporation in the hands of a receiver.

His liability to be sued is coextensive with his right to sue, and he is substituted as defendant in his representative capacity to the corporation over which he was appointed. And when a judgment has been rendered against him in any action, whether founded upon contract or tort, it constitutes a claim against the assets of the corporation in his hands.1

1 Combs v. Smith, 78 Mo. 32. Where, but for the existence of a receivership, the rights of an intervenor to double damage for stock killed by a railroad company would be determined by the laws of the state in which he resides as interpreted by its supreme court, the fact that a receivership has been instituted should not be allowed. to operate to increase his rights. Central Trust Company v. Wabash St. L. & P. R. Co., 30 F. 344.

A receiver duly appointed to take charge of the property and business of a corporation is the proper party in whose name suit by or against the corporation may be conducted. Frankle v. Jackson, 30 F. 398.

Where an action at law was begun against a railroad corporation while it was in the hands of a receiver, and afterwards the receiver was substituted as defendant in the place of the corporation, held, that the chancery court appointing a receiver would grant the plaintiff permission to proceed against the receiver and would restrain the receiver from setting up the statute of limitations, it appearing that the claim was outlawed when the original suit was begun. Lehigh Coal and Nav. Co. v. Central R. Co., 42 N. J. Eq. 591; 8 A. 648.

Where the entire control of a railroad company has passed to receivers as fully as it was before exercised by officers of the road, the receivers may be held answerable in their official capacity for injuries sustained in the same manner that the corporation would have been. Winborn's Case, 30 F. 167; Pope's Case, 30 F. 169.

Where a corporation is in the hands of a receiver, who has full possession of its property, and entire charge of its affairs, the corporation cannot be prosecuted for crimes or misdemeanors committed by the agents or servants of the receiver. State v. Wabash Ry. Co., 115 Ind. 466; 17 N. E. 909.

In an action against former directors of a corporation by stockholders, for loss incurred by defendants' unauthorized acts, it is not enough to show the failure or refusal of the receiver of the corporation to bring the action, but he must be made a party defendant in order that the corporation may be bound. Porter v. Savin, 36 F. 475.

Where a receiver answers the complaint without objecting that plaintiff failed to obtain leave to sue him, he cannot afterwards object that the complaint does not so aver. Elkhart Car Works Co. v. Ellis, 113 Ind. 215; 15 N. E. 249. A judgment for damages should be against a receiver of a railroad in his