act or certificate, or renewal of the same, creating the corporation, on the ground that such act or certificate or renewal was procured upon some fradulent suggestion, or concealment of a material fact, by the persons incorporated, or by some of them or with their knowledge and consent, or annulling the existence of a corporation, other than municipal, whenever such corporation shall

Attorney general can not of his own motion bring action to vacate charter: Atty. General v. R. R., 134-481.

Corporation can not endure for longer time than prescribed in charter, and no judicial proceedings necessary to declare forfeiture: Asheville Div. v. Aston, 92-578-but for any other cause of forfeiture direct proceedings by state necessary to enforce same, Ibid.

If legislature, with knowledge of grounds of forfeiture, by act remits penalty and continues its existence or deals with corporation as lawfully existing, such conduct is waiver of forfeiture: Atty. General v. R. R., 28-469.

As to pleadings and procedure, see Ibid. For action to annul charter upon ground of fraud under this section before amendment, see Atty. General v. R. R., 134-483.

1. Offend against the act creating, altering, or renewing such corporation; or,

See Mining Co. v. Goodhue, 118-985.

2. Violate any law by which such corporation shall have for feited its charter by abuse of its powers; or,

See Atty. Gen. v. R. R., 28-456.

3. Whenever it shall have forfeited its privileges or franchises by failure to exercise its power; or,

4. Whenever it shall have done or omitted any act which amounts to a surrender of its corporate rights, privileges and franchises; or, 5. Whenever it shall exercise a franchise or privilege not conferred upon it by law; or,

That corporation transcends chartered powers is a matter to be taken advantage of by state in direct proceedings to vacate charter: Banking Co. v. Tate, 122-313. For action under this subsection before amendment of section, see Atty. General v. R. R., 134-483.

6. For nonuser of its powers for two or more years consecutively; or,

7. For insolvency, manifested by the return of an execution unsatisfied, upon a judgment against the company docketed in the superior court of the county where it has its principal place of business.

Merely referred to in Simmons v. Steamboat Co., 113-152.

And it shall be the duty of the attorney general, whenever he shall have reason to believe that any of these acts or omissions can be established by proof, to bring the action, in every case of public interest, and also in every other case in which satisfactory

security shall be given to indemnify the state against the costs and expenses to be incurred thereby.

Code, ss. 604, 605; 1889, c. 533.

1199. Service of summons in actions for. In any action for the dissolution of a corporation, or for the appointment of a receiver thereof, the summons must be served on the corporation by service on an officer or agent thereof upon whom other process can be served, and shall be served on the stockholders, creditors, dealers and others interested in the affairs of the company, by publishing a copy thereof at least weekly for not less than three successive weeks in some newspaper printed in the county in which such corporation has its principal place of business, or if there be no such newspaper published, then by posting a copy of such summons at the door of the courthouse of such county, and publishing a copy thereof for the time and in the manner aforesaid in the newspaper published nearest the county seat of the county in which such corporation has its principal place of business, or in some newspaper published in the city of Raleigh; and such publication shall be deemed and held sufficient service on all the stockholders, creditors of, or dealers with, such corporation, and upon the corporation, if no officer can after due diligence be found in the state and it shall have no process agent in the state; and all such stockholders, creditors or dealers or other parties interested may intervene in said proceedings and become parties thereto for themselves, or for others in like interest under such rules as the court for the purpose of justice shall prescribe.

Code, s. 695.

1200. Corporate existence continued three years for winding up. All corporations whose charters shall expire by their own limitation, or shall be annulled by forfeiture or otherwise, shall nevertheless be continued bodies corporate for the term of three years after the time when they would have been so dissolved, for the purpose of prosecuting and defending actions 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; but not for the purpose of continuing the business for which such corporation may have been established: Provided, that in any pending action the court, in its discretion, may extend the time for winding up the affairs of such corporation.

Code, s. 667; 1901, c. 2, s. 58. Section relates to corporations whose charters expire by limitation or are annulled by forfeiture or otherwise: Heggie v. B. & L. Asso., 107-581-and statutory remedy must be pursued within three years or corporation and individual stockholders released from liability. VonGlahn v. DeRossett, 81-467.

Judgment against corporation rendered upon process issued after it has ceased to exist is of no validity, Dobson v. Simonton, 86-492-and where old corporation merged into new this section does not apply so as to make old corporation necessary party to action against succeeding corporation, Friedenwald v. Tobacco Works, 117-544.

Section merely referred to in Smathers v. Bank, 135-413; Kruger v. Bank, 123-19; Wilson v. Leary, 120-92; Asheville Div. v. Aston, 92-586; Marshall v. Railroad, 92-332.

1201. Upon dissolution, directors to be trustees; powers and duties; debts not extinguished. Upon the dissolution in any manner of any corporation, unless otherwise directed by an order of the court, the directors shall be trustees thereof, with full power to settle the affairs, collect the outstanding debts, sell and convey the property and divide the moneys and other property among the stockholders, after paying its debts, as far as such moneys and property shall enable them. They shall have power to meet, and act under the by-laws of the corporation, and, under regulations to be made by a majority of said trustees, to prescribe the terms and conditions of the sale of such property, and may sell all, or any part for cash, or partly on credit, or take mortgages or bonds for part of the purchase price for all or any part of said property. In case of the dissolution of a corporation, the debts due to and from it shall not be thereby extinguished.

Code, s. 687; 1901, c. 2, s. 59. See sections 846-849; 1219-1232. Duty of directors to preserve assets of corporation and administer them for benefit of creditors: McIver v. Hardware Co., 144-478; Bank v. Cotton Mills, 115-507; Electric Light Co. v. Electric Light Co., 116-119; Hill v. Lumber Co., 113-173-and they can not sell practically entire assets for own advantage and to prejudice of creditors, and in case they do they are jointly and severally liable, together with purchaser, for corporate debts, Ibid.

Confession of judgment by insolvent corporation in favor of director who is a creditor, upon debt theretofore existing, is void as against other creditors: Hill v. Lumber Co., 113-173.

Failure to proceed under statute within three years releases corporation and stockholders from liability for debts: VonGlahn v. De Rossett, 81-467.

1202. Directors as trustees may sue and be sued. The directors, constituted trustees as aforesaid, shall have power to sue for and recover the aforesaid debts and property, in the name of the corporation, and shall be suable by the same name for the debts owing by such corporation, and shall be jointly and severally responsible for such debts, only to the amount of moneys and property of the corporation which shall come to their hands or possession as such trustees.

1901, c. 2, s. 60.

1203. Jurisdiction of superior court; may appoint directors or others as receivers; powers and duties. Whenever any corporation shall be dissolved in any manner whatsoever, the superior court, on application of any creditor, or stockholder, at any time, may either continue the directors trustees as aforesaid, or appoint one or more persons to be receivers of such corporation, to take charge of the estate and effects thereof, and to collect the debts and property due and belonging to the corporation, with power to prosecute and defend, in the name of the corporation, or otherwise, all suits 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 its unfinished business; and the powers of such trustees or receivers may be continued as long as the court shall think necessary for such purposes.

Code, ss. 619, 668; 1901, c. 2, s. 61. See sections 846-849; 1219-1232. Remedy of creditors is by creditor's bill to have assets administered for their benefit: Latta v. Catawba Co., 146-; Holshouser v. Copper Co., 138251; Hill v. Lumber Co., 113-173.

As to appointment of receiver, see Latta v. Catawba Co., 146-; Smathers v. Bank, 135-413; Huet v. Lumber Co., 138-443; Bank v. Bank, 127-432; Black v. Gentery, 119-504; Bank v. Cotton Mills, 115-115; Guilford v. Georgia Co., 112-34; Marshall v. R. R., 92-322; Young v. Rollins, 85-485; 90-125; Railroad v. Rollins, 82-523; Dobson v. Simonton, 78-66. If, during existence of corporation, its officers fraudulently or unlawfully dispose of any of its property, creditors are entitled to receiver: Latta v. Catawba Co., 146-. Where receiver appointed at suit of one creditor, it is for benefit of all creditors: Lenoir v. Imp. Co., 117-471.

As to title of receiver to the assets of corporation, and the lien gained thereon by creditor's bill, see Bank v. Bank, 127-432; Fisher v. Bank, 132-769. Receiver represents the corporation: Howe v. Harper, 127-358.

For general powers and duties of receivers hereunder, see Davis v. Industrial Mfg. Co., 114-326; Atty. General v. Roanoke Nav. Co., 84-710. Receiver may sue either in own name or in that of corporation: Smathers v. Bank, 135-413; Davis v. Mfg. Co., 114-321; Gray v. Lewis, 94-392and can collect assets, and prosecute and defend suits after corporation ceases to exist by expiration of charter: Asheville Div. v. Aston, 92-578moreover power of receiver may be continued as long as court may think necessary for settlement, Ibid; also Young v. Rollins, 90-125. For action by receiver to collect assets alleged to have been wasted, see Dunn v. Johnson, 115-258. For sufficiency of pleadings in suit by receiver to collect unpaid subscriptions, see Worth v. Wharton, 122-376. For liability of officers of defunct corporation to account with receiver for assets, see McIver v. Hardware Co., 144-478; Young v. Rollins, 90-125.

Statutory remedy under this section is exclusive and ousts former equity jurisdiction: VonGlahn v. DeRossett, 81-467.

Judgments rendered upon process issued after corporation ceased to exist are of no validity: Dobson v. Simonton, 86-492.

Section merely referred to in Wilson v. Leary, 120-92; Bank v. Cotton Mills, 115-487; Foundry Co. v. Killian, 99-503.

1204. Jurisdiction of judge. The judge of the superior court shall have jurisdiction of such application and of all questions arising in the proceedings thereon, and make such orders, injunctions, and decrees therein as justice and equity shall require at any place in the district.

Code, s. 669; 1901, c. 2, s. 62. Claims of insolvent bank and its debtor who is also depositor, may be adjusted under this section: Davis v. Mfg. Co., 114-321.

1205. Injunction; when notice and undertaking required. An injunction to suspend the general and ordinary business of a corporation or to appoint a receiver shall not be granted without due notice of the application therefor to the corporation, except where the state is a party to the proceeding, unless the plaintiff shall give a written undertaking, executed by two sufficient sureties, to be approved by the judge, to the effect that the plaintiff will pay all damages, not exceeding the sum to be mentioned in the undertaking, which such corporation may sustain by reason of the injunction, or the appointment of the receiver, if the court shall finally decide that the plaintiff was not entitled thereto. The damages may be ascertained by a reference, or otherwise, as the court shall direct.

Code, s. 343; C. C. P., s. 194. See, for annotations on injunctions generally, section 806. See also sections 818; 846-849; 1219-1232. Facts sufficient to sustain cause of action must be alleged before injunction will issue: Moore v. Mining Co., 104-534; Jones v. Comrs., 107-265, and cases cited. Where, directors who are authorized to issue and sell stock, make sale and sell stock it is too late for injunction: Huet v. Lumber Co., 138-443.

Individual stockholders in their own name are not proper parties to assert rights of corporation: Moore v. Mining Co., 104-534-unless they resort to remedy specified by charter and fail to secure same, Ibid.

As to remedy of creditors by creditor's bill, see Holshouser v. Copper Co., 138-251; Hill v. Lumber Co., 113-173.

1206. Wages for two months lien on assets. In case of the insolveney of any corporation the laborers and workmen and all persons doing labor or service of whatever character in the regular employment of such corporation, shall have a first and prior lien upon the assets thereof for the amount of wages due to them respectively for all labor, work, and services done, performed or rendered within two months next preceding the date when proceedings in insolvency shall be actually instituted and begun against such insolvent corporation, which lien shall be prior to all other