thereof as is necessary to satisfy the debts of the corporation. 1795. If it appears, that the property of the corpo- 153 N. Y. 199. ration, and the sums collected or collectible from the stockholders, upon their stock subscriptions, are or will be insufficient to pay the debts of the corporation, the court must ascertain the several sums, for which the directors, trustees, or other officers, or the stockholders of the corporation, being parties to the action, are liable; and must adjudge that the same be paid into court, to be applied, in such proportions and in such order as justice requires, to the payment of the debts of the corporation. § 1796. This article does not repeal or affect any special provision of law, prescribing that a particular kind of corporation shall cease to exist, or shall be dissolved, in a case or in a manner, not prescribed in this article; or any special provision of law, prescribing the mode of enforcing the liability of the stockholders of a particular kind of corporation. ARTICLE FOURTH. ACTION BY THE PEOPLE TO ANNUL A CORPORATION. 1797. Action by Attorney-Gen eral, when legislature 1798. Id.; by leave of court. granted. § 1800. Action triable by a jury. 1802. Injunction may issue. 1797. The Attorney-General, whenever he is so direct- 134 N Y. 290 ed by the legislature, must bring an action against a corporation created by or under the laws of the State, to procure a judgment, vacating or annulling the act of incorporation, or any act renewing the corporation, or continuing its corporate existence, upon the ground that the act was procured upon a fraudulent suggestion, or the concealment of a material fact, made by or with the knowledge and consent of any of the persons incorporated. $1798. Upon leave being granted, as prescribed in the next section, the Attorney-General may bring an action against a corporation created by or under the laws of the State, to procure a judgment, vacating the charter or annulling the existence of the corporation, upon the ground that it has, either 1. Offended against any provision of an act, by or under which it was created, altered, or renewed, or an act amending the same, and applicable to the corporation; or, 2. Violated any provision of law, whereby it has forfeited its charter, or become liable to be dissolved, by the abuse of its powers; or, 3. Forfeited its privileges or franchises, by a failure to exercise its powers; or, 121 N.Y.582. 125 1a. 513. 128 Id. 240. 131 N. Y. 140. 134 Id. 290. 4. Done or omitted any act, which amounts to a surrender of its corporate rights, privileges, and franchises; or, 5. Exercised a privilege or franchise, not conferred upon it by law. 1799. Before granting leave, the court may, in its discretion, require such previous notice of the application as it thinks proper, to be given to the corporation, or any officer thereof, and may hear the corporation in opposition thereto. § 1800. An action, brought as prescribed in this article, is triable, of course and of right, by a jury, as if it was an action specified in section nine hundred and sixty-eight of this act, and without procuring an order, as prescribed in section nine hundred and seventy of this act. § 1801. Where any of the matters, specified in section one thousand seven hundred and ninety-seven or section one thousand seven hundred and ninety-eight of this act, are established in an action, brought as prescribed in either of those sections, the court may render final judgment that the corporation and each officer thereof, be perpetually enjoined from exercising any of its corporate rights, privileges, and franchises; and that it be dissolved. The judgment must also provide for the appointment of a receiver, the taking of an account, and the distribution of the property of the corporation, among its creditors and stockholders, as where a corporation is dissolved upon its voluntary application, as prescribed in chapter seventeenth of this act. § 1802. In an action, brought as prescribed in this article, an injunction order may be granted, at any stage of the action, restraining the corporation, and any or all of its directors, trustees, and other officers, from exercising any of its corporate rights, privileges, or franchises; or from exercising certain of its corporate rights, privileges, or franchises specified in the injunction order; or from exercising any franchise, liberty, or privilege, or transacting any business, not allowed by law. Such an injunction is deemed one of those specified in section six hundred and three of this act, and all the provisions of title second of chapter seventh of this act, applicable to an injunction specified in that section, apply to an injunction granted as prescribed in this section, except that it can be granted only by the court. § 1803. Where final judgment is rendered against corporation, in an action, brought as prescribed in this article, the Attorney-General must cause a copy of the judg ment-roll to be forthwith filed in the office of the secretary of State; who nust useotice of the substance and effect of the judgment, to be published, for four weeks, in the newspaper printed a Albany, in which legal notices are required to be published, and also in a newspaper printed in the county, wherein the principal place of busi ness of the corporation was located. ARTICLE FIFTH. MORE OF THE PROVISIONS APPLICABLE TO TWO OR 1804 Certain corporations ex- 1807. Creditors may be brought in. 1808. When Attorney-General must bring action. 1809. Requisites of injunction against corporations in certain cases. 1810. Id.; of order appointing cases. certain 1811. Id.; of judicial suspen- 1812. Application of the last 1813. In action against stock. § 1804. Articles second, third, and fourth of this title 134 N.Y. 290 do not apply to an incorporated library society; to a religious corporation; to a select school or academy, incorporated by the regents of the university, or by an act of the legislature; or to a municipal or other political corporation; created by the constitution, or by or under the laws of the State. § 1805. In an action, brought as prescribed in article second, third, or fourth of this title, a stockholder, officer, alienee, or agent of a corporation, is not excused from answering a question, relating to the management of the corporation, or the transfer or disposition of its property, on the ground that his answer may expose the corporation to a forfeiture of any of its corporate rights, or will tend to convict him of a criminal offence, or to subject him to a penalty or forfeiture. But his testimony shall not be used, as evidence against him, in a criminal action or special proceeding. § 1806. In such an action, the court may, in its dis- 31 Hun, 324 cretion, on the application of either party, at any stage of the action, before or after final judgment, and with or without security, grant an injunction order, restraining the creditors of the corporation from bringing actions against the defendants, or any of them, for the recovery of a sum of money, or from taking any further proceedings in such actions, theretofore commenced. Such an injunction has the same effect, and, except as otherwise expressly prescribed in this section, is subject to the same provisions of law, as if each creditor, upon whom it is served, was named therein, and was a party to the action in which it is granted. § 1807. [Am'd 1886.] In such an action the court may, at any stage of the action, before or after final judgment, make an order requiring all the creditors of the corporation to exhibit and prove their claims, and thereby make themselves parties to the action, in such a manner and in such a The Union Surety and Gun reasonable time, not less than six months from the first publication of notice of the order as the court directs; and that the creditors who make default in so doing shall be precluded from all benefit of the judgment and from any distribution which may be made thereunder, except as hereinafter provided. Notice of the order must be given, by publication, in such newspapers and for such a length of time as the court directs. Notwithstanding such order any such creditor who shall exhibit and prove his claim in the manner directed thereby, with proof, by affidavit or otherwise, that he has had no notice or knowledge thereof in time to comply therewith, any time before an order is made directing a final distribution of the assets of such corporation, shall be entitled to have his claim received, and shall have the same rights and benefits thereon, so far as the assets of such corporation then remaining undistributed may render possible, as if his claim had been exhibited and proved within the time limited by such order. § 1808. Where the Attorney-General has good reason to believe, that an action can be maintained in behalf of the people of the State, as prescribed in article second, third, or fourth of this title, except section one thousand seven hundred and ninety-seven of this act, he must bring an action accordingly, or apply to a competent court for leave to bring an action, as the case requires if, in his opinion, the public interests require that an action should be brought.. In a case where the action can be brought only by the AttorneyGeneral in behalf of the people, if a creditor, stockholder, director, or trustee of the corporation, applies to the Attorney-General for that purpose, and furnishes the security required by law, the Attorney-General must bring the action, or apply for leave to bring it, if he has good reason to believe that it can be maintained. Where such an application is made, section one thousand nine hundred and eighty-six of this act applies thereto, and to the action brought in pursuance thereof. 1809. An injunction order, suspending the general and ordinary business of a corporation, or of a joint-stock association, consisting of seven or more persons, or suspending from office, or restraining from the performance of his duties, a trustee, director, or other officer thereof, can be granted only by the court, upon notice of the application therefor, to the proper officer of the corporation or association, or to the trustee, director, or other officer enjoined. If such an injunction order is made, otherwise than as prescribed in this section, it is void. 1810. A receiver of the property of a corporation can be appointed only by the court, and in one of the following cases: 1. An action, brought as prescribed in article second, third, or fourth, of this title. 2. An action brought for the foreclosure of a mortgage upon the property, of which the receiver is appointed, where the mortgage debt, or the interest thereupon, has remained unpaid, at least thirty days after it was payable, and after payment thereof was duly demanded of the proper officer of the corporation; and where either the income of the property is specifically mortgaged, or the property itself is prob ably insufficient to pay the mortgage debt. 3. An action brought by the Attorney-General, or by a stockholder, to preserve the assets of a corporation, having no officer empowered to hold the same. 4. A special proceeding for the voluntary dissolution of a corporation. Where the receiver is appointed in an action, otherwise than by or pursuant to a final judgment, notice of the appli cation for his appointment, must be given to the proper officer of the corporation. 1811. A trustee, director, or other officer of a corpo- 131 NY. 200 ration shall not be suspended or removed from office, by a court or judge, otherwise than by the final judgment of a competent court, in an action brought by the Attorney-General, as prescribed in section one thousand seven hundred and eighty-one of this act. 1812. The last three sections apply to an action or a special proceeding. against a corporation, or joint-stock association, created by or under the laws of the State, or a trustee, director, or other officer thereof; or against a corporation, or joint-stock association created by or under the laws of another state, government, or country, or a trustee, director, or other officer thereof, where the corporation or association does business within the State, or has, within the State, a business agency or a fiscal agency, or an agency for the transfer of its stock. § 1313. Where an action, authorized by a law of the State, is brought against one or more persons, as stockholders of a corporation or joint-stock association, an objection to any of the proceedings cannot be taken, by a person properly made a defendant in the action, on the ground that the plaintiff has joined with him, as a defendant in the action, a person, whose name appears on the stock-books of the corporation or association, as a stockholder thereof, by the name so appearing; but who is misnamed, or dead, or is not liable for any cause. In such a case, the court may, at any time before final judgment, upon motion of either puty, amend the pleadings and other papers, without prejudice to the previous proceedings, by substituting the true name of the person intended, or by striking out the name of the person who is dead, or not liable, and, in a proper case, inserting the name of his representative or successor 23 Civ Pro R. 192 |