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whatever name they may be known in law, shall be trustees of such corporation, with full power to settle the affairs, collect the outstanding debts, and divide the moneys and other property among the stockholders, after paying the debts due and owing by such corporation, at the time of its dissolution, as far as such moneys and property shall enable them.

58. Powers and liabilities of such trustees.

The persons constituted trustees as aforesaid, shall have authority to sue for and recover the aforesaid debts and property, by the name of the trustees of such corporation, describing it by its corporate name, and shall be suable by the same name, or in their own names or individual capacities, for the debts owing by such corporation at the time of its dissolution, and shall be jointly and severally responsible for such debts, to the amount of the moneys and property of such corporation at the time of its dissolution, and which shall come to their hands or possession.

59. Continuance of corporate existence for settling up business.

All such corporations whether they expire by their own limitation, or shall be annulled by the legislature or otherwise dissolved, shall nevertheless be continued bodies corporate for the purpose of prosecuting and defending suits by or against them, and of enabling them gradually to settle and close their concerns, to dispose of and convey their property, and to divide their capital stock, but not for the purpose of continuing the business for which such corporation may be established.

60. On dissolution directors may be continued as trustees, or a receiver may be appointed.

When any corporation shall be dissolved in any manner whatever, the chancellor, on application of any creditor or stockholder of such corporation at any time, may either continue such directors trustees as aforesaid, or appoint one or more persons to be receivers (h) of and for such corporation, to take charge of the

company. 3 Dutch. 198, 296; 4 Id. 532. Vide sections 30-32. Where the company pays for property purchased with its capital stock, such sale cannot be set aside, on the ground that the value of such property was not equal to the value of the stock. There must be actual fraud in the transaction to enable creditors of the corporation to call the stockholders to account. Bickley v. Schlag, 1 Dick. Ch. Rep. 533; Coit v. Gold Amalgamating Co., 119 U. S. 345.

(h) The power of the chancellor to interpose and take from the directors the power to close up the business of the corporation, and to put its affairs in the hands of a receiver, is a discretionary power to be exercised only on good cause shown, upon proofs which show the need of the interference of the court

estate and effects thereof, and to collect the debts and property due and belonging to the company, with power to prosecute and defend, in the name of the corporation or otherwise, all such suits as may be necessary or proper for the purposes aforesaid, and to appoint an agent or agents under them, and to do all other acts which might be done by such corporation, if in being, that may be necessary for the final settlement of the unfinished business of the corporation; and the powers of such trustees or receivers may be continued as long as the chancellor shall think necessary for the purposes aforesaid.

61. Chancellor has full jurisdiction.

The chancellor shall have jurisdiction of said application and of all questions arising in the proceedings thereon, and may make such orders, injunctions, and decrees therein as justice and equity shall require.

62. Receivers to pay debts and distribute balance among stockholders.

The said trustees or receivers shall pay all debts due from the corporation, if the funds in their hands shall be sufficient therefor, and if not, they shall distribute the same ratably (i) among all the creditors who shall prove their debts in the manner that shall be directed by an order or decree of the court for that purpose; and if there shall be any balance remaining after the payment of such debts and necessary expenses, they shall distribute and pay the same to and among those who shall be justly entitled thereto, as having been stockholders of the corporation, or their legal representatives.

63. Lien of workmen in case of insolvency.

[This section is given as amended by the supplement of March 31st, 1887. P. L., 2.99.]

In case of the insolvency of any corporation the laborers then or theretofore in the employ thereof shall have a lien upon the assets thereof for the amount due to them respectively, which shall be paid prior to any other debt or debts of said company; and the word "laborers" shall be construed to include all persons doing labor or service of whatever character for or as work

for the protection of creditors or stockholders from breaches of trust by the directors in the performance of their duties. Newfoundland R. R. Const. Co. v. Schaack, 13 Stew. Eq. 222. On the appointment of a receiver of an insolvent corporation, its title to its property is divested by force of law. Freeholders, &c., v. State Bank, 2 Stew. Eq. 268. S. C., 3 Id. 311. But see sections 83, 131. (i) The State of New Jersey does not possess the crown's common law prerogative to have its debts paid in preference to the debts of other creditors. Freeholders, &c., v. State Bank, 2 Stew. Eq. 268. S. C., 3 Id. 311.

men or employes, in the employ of such corporation; (j) and the lien shall have reference to and comprise all claims for such labor or services rendered for or in behalf of such corporations before the date which the court adjudges to be the time when the insolvency occurred which gives it jurisdiction whether such "laborers" were in the actual employ of such corporation at that time or not. (See section 80.)

This act shall not only apply to all proceedings in insolvency hereafter begun, but as well to any now pending where the assets have not been distributed.

64. On dissolution property vests in stockholders.

On the final dissolution of any corporation created under this act, all its real and personal estate, not legally disposed of, shall be vested in the individuals who may be stockholders at the time of such dissolution, in their respective proportions, and they shall hold the same as tenants or owners in common.

65. Suits do not abate on dissolution.

In any action, now pending or to be commenced in any court of record of this state, against any corporation now or heretofore existing, or that may be created hereafter, if said corporation become dissolved, by the expiration of its charter or otherwise, before final judgment obtained therein, the said action shall not abate by reason thereof; but the dissolution of said corporation being suggested, and the names of the trustees of said corporation being entered upon the record, the said action shall proceed to final judgment against the said trustees, by the name of the corporation. (See sections 92, 149.)

(j) As to who are included. 1 C. E. Gr. 117. This provision is in derogation of the right of creditors to be paid equally, and must not be extended by construction. A contractor cannot have the benefit of it. The preference is a personal one, adhering to the person who does the work. 2 Stew. Eq. 252. And it will not be extended so as to impair existing liens. 4 Id. 105. A drayman in the regular employment of the company, and whose services are of a kind necessary to the continuance of the business, is preferred. 3 Id. 588. The lien comes into existence as of the date which the court adjudges to be the time when the insolvency occurred which gives it jurisdiction. The laborers have a lien upon the assets. The acceptance of a promissory note without security does not operate as a waiver of the lien; nor does the proving of a claim for a sum in excess of the amount really due work a forfeiture of the right of lien. D., L. and W. R. R. Co. v. Oxford Iron Co., 6 Id. 192. Where A entered into agreement with a corporation to serve it for a term of years at a fixed salary, and before the term expired the corporation became insolvent and a receiver was appointed, A is entitled to damages for breach of contract, but his claim for the amount of such damages is not preferred. Spader v. Mural Dec. Co., 2 Dick. Ch. Rep. 18.

66. On execution against corporation schedule of property to be shown sheriff.

Every agent or other person having charge of any property of a corporation, on request of any public officer, having for service a writ of execution against it, shall furnish the names of the directors and secretary, or stockholders thereof, and a schedule of all its property, including debts due or to become due to such corporation, so far as he may have knowledge of the same.

67. Execution may be satisfied by debts due the company. If any such officer, holding an execution shall be unable to find other property belonging to such corporation liable to execution, he or the judgment creditor, may elect to satisfy such execution, in whole or in part, by any debts due the same, not exceeding the amount thereof; and it shall be the duty of any agent or other person having the custody of any evidence of such debt, to deliver the same to the officer, for the use of the creditor; and such delivery, with a transfer to the officer in writing, for the use of the creditor, and notice to the debtor, shall be a valid assignment thereof; and such creditor may sue for and collect the same in the name of such corporation, subject to such equitable set-offs on the part of the debtor as may be in other assignments.

68. Penalty for refusing to comply with above two sections. Every such agent or other person, who shall neglect or refuse to comply with the provisions of the two preceding sections, shall be himself liable to pay to the execution creditor the amount due on said execution, with costs.

69. When a company becomes insolvent, directors must call a meeting of stockholders.

Whenever any incorporated company in this state shall become insolvent, it shall be the duty of the directors or managers thereof, within ten days thereafter, to call a public meeting of the stockholders, and to lay before them for inspection and examination all the books of accounts, by-laws and minutes of the said corporation, and to exhibit to the said meeting a full and true statement of all the estate, funds and property of the said company, and of all the debts due and owing to the said company, and by whom, and of all the debts owing by the said company, and to whom, as far as the said directors and managers can at that time make out the same; so as to exhibit to the stockholders a full,

fair and true account of the situation of the affairs of the said

company.(k)

70. Bill in chancery for injunction and receiver in case of insolvency.

Whenever any incorporated company shall have become insolvent or shall suspend its ordinary business for want of funds to carry on the same, it shall and may be lawful for any creditor or stockholder to apply, by petition or bill of complaint, to the chancellor, setting forth the facts and circumstances of the case, for a writ of injunction, and the appointment of a receiver or receivers, or trustees; whereupon, the chancellor, being satisfied of the sufficiency of said application, and also of the truth of the facts, and allegations contained in the said petition or bill, by affidavit or otherwise, and upon giving, when so ordered, such reasonable notice, to be served or published, as the chancellor in an order to be made for that purpose shall direct, the chancellor may proceed in a summary way to hear the affidavits, proofs and allegations which may be offered by or on behalf of the parties; and if upon such inquiry into the matters or cause of complaint it shall be made to appear to the chancellor that the said company has become insolvent, and shall not be about to resume its business in a short time thereafter with safety to the public and advantage to the stockholders, it shall and may be lawful for the chancellor to issue an injunction to restrain the said company and its officers and agents from exercising any of the privileges or franchises granted by its certificate or by the act incorporating the said company, and for collecting or receiving any debts, or from paying out, selling, assigning or transferring any of the estate, moneys, funds, lands, tenements or effects of the said company, until the court shall otherwise order.

71. What shall be evidence of insolvency.

Whenever two or more of the directors, or the cashier of any banking company shall admit that the said bank is insolvent or unable to pay its debts, and the said bank shall neglect or refuse to pay its just debts, when demanded within the usual and proper hours of business; or whenever such banking company shall have stopped payment, by neglecting or refusing to redeem their bills, notes or other evidences of debt, in specie or in the notes of some

(k) Since the Revision of 1875 a corporation may prefer one creditor over another. Wilkinson v. Bauerle, 14 Stew. Eq. 635. But it must be done in a lawful manner. Bissell v. Besson, 2 Dick. Ch. Rep. 580.

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