§ 481. Same-On Rights of Shareholders.-Similarly it has been held that a decree adjudging a corporation bankrupt is in the nature of a decree in rem as respects the status of the corporation, and that an alien shareholder, since he forms an integral part of the corporation, is a party, as such, to the bankruptcy proceedings, and cannot, therefore, collaterally impeach them.'

Local Courts can Protect Local Assets.

§ 482. But while local courts cannot dissolve a foreign corporation, they have jurisdiction of persons and property within the State, and it often becomes their duty to protect and sometimes to administer corporate assets, upon which either the insolvency of the company or a decree of dissolution has impressed the character of a trust fund. Thus, it has been held that an officer of an insolvent company cannot avoid the obligation of an injunction order, entered at time of the dissolution, restraining all persons from interfering with the receiver in the discharge of his duties, or from meddling with the corporate assets, by going into another State and there attempting to possess himself of personal assets of the company, even though it appear that he himself is a creditor. It makes no difference whether the person holding such corporate assets, when they are sought to be charged with the company's debts, came by them fairly or by force or

1 Graham v. Boston, etc. R. Co., 118 U. S. 161, 178.

2 Ante, § 479. See also Barclay v. Talman, 4 Edw. Ch. 123; Tinkham v. Borst, 31 Barb. 407; Leipold v. Marony, 7 Lea, 128; Comfort v. Patterson, 2 Lea, 672; Smith v. St. Louis Mut. L. Ins. Co., 3 Tenn. Ch. 502, affirmed, 6 Lea, 564; Patterson v. Lynde, 112 Ill. 196; Hoyt v. Thompson, 5 N. Y. 320.

& Williams v. Hintermeister, 26 Fed. Rep. 889. See also Bidlack v. Mason, 26 N. J. Eq. 230.

fraud, unless he has a higher or better equity to such assets than the creditor. So, a court of equity will interfere by way of injunction, or receivership of such local assets, to prevent a fraud upon the company by their misappropriation,' and, also, when necessary to protect the interests of corporate creditors. But where no rights of local creditors intervene, and no fraud is being perpetrated, the court will not take jurisdiction of questions, arising from the internal organization of the company, and involving the relative rights of the shareholders among each other. Where directors of such dissolved foreign company, in dealing with its local assets, are only discharging their duty of winding up the company in the manner directed by the shareholders, and not in violation of the laws of the State which created it, the court will not interfere, at the instance of a shareholder, to direct a division of its assets, either in whole or in part, among its shareholders."

§ 483. Same-Creditors in Corporate Domicile.— Creditors of an insolvent company residing in the corporate domicile are bound by the action of their own court appointing a receiver, and cannot, by

1 Tinkham v. Borst, 31 Barb. 407. See also Day v. Postal Tel. Co., 66. Md. 354.

2 Redmond v. Endfield Mnfg. Co., 13 Abb. Pr. (N. S.) 332; Redmondi v. Hoge, 3 Hun, 171; National Trust Co. v. Miller, 33 N. J. Eq. 155; Leipold v. Marony, 7 Lea, 128. Compare Howell v. Chicago, etc. R. Co., 51 Barb. 378; Day v. United States Car Spring Co., 2 Duer, 608.

3 Williams v. Hintermeister, 26 Fed. Rep. 889; National Trust Co. v. Miller, 33 N. J. Eq. 155; De Bemer v. Drew, 57 Barb. 438; Murray v. Vanderbilt, 39 Barb. 140; Smith v. St. Louis Mut. L. Ins. Co., 3 Tenn. Ch. 502, affirmed 6 Lea, 564. Compare Bidlack v. Mason, 26 N. J. Eq. 230.

↑ Ante, §§ 226, 227.

5 Redmond v. Endfield Mnfg. Co., 13 Abb. Pr. (N. S.) 332.

attachment, recover assets in another State, which the receiver claims.'

§ 484. Actions by Receivers of Foreign Companies. The rule of comity, which accords the privilege of maintaining suits, in the local jurisdiction, to foreign corporations, does not apply to the case of a receiver of such a company, appointed in the foreign jurisdiction. This ruling, which is sustained by the weight of authority, is based upon the nature of the receiver's office. He is the executive arm of a court of chancery; the mere creature of the court, having no power beyond that conferred upon him by the order of his appointment and the course of practice of the court; no title to the debtors' property vests in him, nor any right of possession except as may be directed by the court; the court, not he, has care of the property in dispute; his appointment is a sequestration of the property confided to him, but the title is unaffected; it is like the levy of a sort of equitable execution, by which the court makes a general appropriation of the debtor's property, leaving questions of who may be finally entitled thereto to be determined thereafter; his functions, as the executive arm of a court of chancery, are very similar in principle to those of a sheriff of a court of common law. Manifestly such an officer cannot, on principle, be permitted to exercise his functions within a foreign jurisdiction, any more than a sheriff can be permitted to execute process there. On these principles it has been held by the Supreme Court of the United States, in the leading case of Booth v. Clark,' that a foreign receiver

1 Bagby v. Atlantic, etc. R. Co., 86 Pa. St. 291. 917 How. 322.

cannot maintain an action for the recovery of a demand due to his debtor's estate. This decision has been universally followed by the Federal courts, both in the case of a receiver appointed by a foreign State court,' and of one appointed in a Federal court in another State.' Its authority has also been very generally recognized by the State courts, and, in a line of able and well reasoned decisions, the right to sue in local courts has been withheld from foreign receivers. But, on the other hand, cases are not wanting which take the opposing view, and hold that, under the comity of States, foreign receivers ought to be permitted, in the interests of justice and convenince, to mantain suits in the local courts."

1 Hazard v. Durant, 19 Fed. Rep. 471. See dictum to same effect in Holmes v. Sherwood, 16 Fed. Rep. 725, 3 McCrary, 407. Compare Chandler v. Siddle, 3 Dill. 477.

2 Brigham v. Luddington, 12 Blatchf. 237. See also Olney v. Tanner, 10 Fed. Rep. 101, affirmed 21 Blatchf. 540, 18 Fed. Rep. 636.

8 Farmers', etc. Ins. Co. v. Needles, 52 Mo. 17; Warren v. Union Nat. Bk., 7 Phil. 156; Bartlett v. Wilbur, 53 Md. 485; Day v. Postal Tel. Co., 66 Md. 354; Moseby v. Burrow, 52 Tex. 396; Ayres v. Siebold, 82 Iowa, 347, 47 N. W. Rep. 989; Hope Mut. L. Ins. Co. v. Taylor, 2 Rob. (N. Y.) 278; Hunt v. Columbian Ins. Co., 55 Me. 290; Taylor v. Columbian Ins. Co., 14 Allen, 353; Filkins v. Nunnemacher, 81 Wis. 91, 51 N. W. Rep. 79.

4 Bank v. McLeod, 38 Ohio St. 174; Runk v. St. John, 29 Barb. 585; Hoyt v. Thompson, 5 N. Y. 320; Peters v. Foster, 10 N. Y. Sup. 389; Dyer v. Power, 14 N. Y. Sup. 873; Hurd v. City of Elizabeth, 41 N. J. L. 1; National Trust Co. v. Murphy, 30 N. J. Eq. 408; National Trust Co. v. Miller, 33 N. J. Eq. 155; Sobernheimer v. Wheeler, 45 N. J. Eq. 614, 18 Atl. Rep. 234; Metzner v. Bauer, 98 Ind. 425; Lycoming Fire Ins. Co. v. Wright, 55 Vt. 526; McAlpin v. Jones, 10 La. An. 552; Planters' Bank v. Bass, 2 La. An. 430; Bagby v. Atlantic, etc. R. Co., 86 Pa. St. 291; Winans v. Gibbs & Sterrett Mnfg. Co., 30 Pac. Rep. 163; Patterson v. Lynde, 112 Ill. 196; Falk v. Janes, 49 N. J. Eq. 484, 23 Atl. Rep. 813; Comstock v. Frederickson (Minn., Nov. 23, 1892), 53 N. W. Rep. 713; Boulware v. Davis, 90 Ala. 207. But see Chicago, etc. R. Co. v. Keokuk N. L. Pkt. Co., 108 Ill. 317; Iglehart v. Bierce, 36 III. 133; Toronto Gen. Trust Co. v. Chicago, etc. R. Co., 123 N. Y. 37, 25 N. E. Rep. 198.

§ 485. Suits by Assignees, Trustees, etc., of Foreign Companies.-A distinction must be made, however, where the representatives of the foreign company is vested with the title to the estate. In such a case, whether he is called receiver, assignee or trustee, and whether he takes title by assignment,' or by force of the statute under which he is appointed,' or by other appropriate means,' he may maintain an action by virtue of his title as owner of the property, and not under his authority as an officer of the court.

§ 486. Local Receivership.-We have referred above to the power of local courts to protect, preserve and, in a proper case, to administer local assets. Where the situation of the assets of the insolvent or dissolved company, within the jurisdiction, is such as to justify it, the court will appoint a receiver of its own to take charge of and administer them. If the situation of the assets in question is such as to demand the immediate action of the court for their protection, the order of

1 Graydon v. Church, 7 Mich. 36.

Relfe v. Rundle, 103 U. S. 222, 12 Cent. L. J. 130; Fry v. Charter Oak Life Ins. Co., 31 Fed. Rep. 197; Parsons v. Charter Oak Life Ins. Co., 31 Fed. Rep. 305; Rundel v. Life Assn., 10 Fed. Rep. 720; Davis v. Life Assn., 11 Fed. Rep. 781; Taylor v. Life Assn., 13 Fed. Rep. 493; Life Association v. Levy, 33 La. An. 1203; Bockhover v. Life Assóciation, 77 Va. 85, 6 Am. & Eng. Corp. Cas. 603; Leipold v. Marony, 7 Lea, 128; Lombard Bank v. Thorp, 6 Cow. 46. See also Willitts v. Waite, 25 N. Y. 577; Bishop v. Globe Co., 135 Mass. 132; Brigham v. Luddington, 12 Blatchf. 242.

3 See Chicago, etc. R. Co. v. Keokuk, etc. Pkt. Co., 108 Ill. 317; Iglehart v. Bierce, 36 Ill. 133; Cooke v. Town of Orange, 48 Conn. 401; Pond v. Cooke, 45 Conn. 126; Blake Crusher Co. v. Town of New Haven, 46 Conn. 473.

4 Ante, § 482.

5 Williams v. Hintermeister, 26 Fed. Rep. 889; National Trust Co. v. Miller, 33 N. J. Eq. 155; Redmond v. Hoge, 3 Hun, 171; Glines v. Order of Iron Hall, 20 N. Y. Sup. 275.