be required to be filed of the removal of any office from one point to another in the same town, township or city in this state. Upon the adoption of a resolution as aforesaid, a copy thereof shall be filed in the office of the secretary of state, signed by the president and secretary of such corporation, and sealed with its corporate seal; for filing the said certificate, the secretary of state shall charge a fee of five dollars. Supplement of April 8, 1897; P. L. 1897, p. 175. See Stinson v. Cedar Grove Cemetery Co., 40 Atl. Rep., 116. 29. Decrease of Capital Stock. The decrease of capital stock may be effected by retiring or reducing any class of the stock, or by drawing the necessary number of shares by lot for retirement, or by the surrender by every shareholder of his shares, and the issue to him in lieu thereof of a decreased number of shares, or by the purchase at not above par of certain shares for retirement, or by retiring shares owned by the corporation or by reducing the par value of shares; and when any corporation shall decrease the amount of its capital stock hereinbefore provided, the certificate decreasing the same shall be published for three weeks successively, at least once in each week, in a newspaper published in the county in which the principal office of the corporation is located; the first publication to be made within fifteen days after the filing of such certificate, and in default thereof the directors of the corporation shall be jointly and severally liable for all debts of the corporation contracted before the filing of the said certificate, and the stockholders shall also be liable for such sums as they may respectively receive of the amount so reduced; provided, no such decrease of capital stock shall release the liability of any stockholder, whose shares have not been fully paid, for debts of the corporation theretofore contracted, nor effect any reduction of the taxes that may be required to be paid by the charters of corporations incorporated by special acts. P. L. 1846, p. 68; P. L. 1849, p. 305; P. L. 1882, p. 139; P. L. 1885, p. 140. A liberal construction must be given to sections 27 and 29 in order to give effect to the comprehensive grant of the Legislature. A corporation has implied power to purchase its own shares when necessary to forward the legitimate business of the company, but if the purpose is to retire the stock the statutory provisions must be strictly followed. Berger v. U. S. Steel Corporation, 63 N. J. Eq., 809. The fact that retirement of certain shares of stock and issuance of bonds to pay for the shares so retired renders the stock of the dissentient stockholders subject to the prior lien of those who take the bonds, does not affect the power to retire the stock. Even if the purchase were for cash, the shares of dissentients would still be subject to greater burdens. Id. When the surplus, created by a reduction of capital stock, is invested in the stock of other companies, the stock itself may be distributed. The Continental Securities Co. v. The Northern Securities Co., 66 N. J. Eq., 274. 30. Unlawful Reductions of Capital and Unlawful Dividends. The directors of a corporation shall not make dividends except from its surplus, or from the net profits arising from the business of such corporation, nor shall it divide, withdraw, or in any way pay to the stockholders or any of them, any part of the capital stock of such corporation, or reduce its capital stock except as authorized by law; in case of any wilful or negligent violation of the provisions of this section, the directors under whose administration the same may have happened, except those who may have caused their dissent therefrom to be entered at large upon the minutes of such directors at the time, or who not then being present, shall have caused their dissent therefrom to be so entered upon learning of such action, shall jointly and severally be liable at any time within six years after paying such dividend, to the stockholders of such corporation, severally and respectively, to the full amount of any loss sustained by such stockholders, or in case of insolvency to the corporation or its receiver to the full amount of any loss. sustained by the corporation, by reason of such withdrawal, division or reduction. 2. This act shall take effect immediately, but shall not affect any action or proceeding pending in any court at the time it takes effect, or any right of any corporation, or of any creditor or stockholder of any corporation, against any director under existing law. (As amended by Chap. 143, Laws of 1904; P. L. 1904, p. 275.) P. L. 1846, p. 17; P. L. 1846, p. 68; P. L. 1846, p. 69; P. L. 1849, p. 305; Act of 1875, §7. This section should be read in connection with sections 27 and 29. Neither the directors nor a majority of the stockholders can waive the right of the company to recover the amount of the dividends wrongfully declared under this section. The directors cannot, by an erroneous determination of whether or not net earnings or surplus exist for the payment of dividends, confer either upon themselves or upon the corporation powers which are prohibited by statute. A declaration of dividends, the effect of which is to reduce the capital stock, is ultra vires the corporation because prohibited by law. Siegman v. Electric Vehicle Co., 72 N. J. Eq., 403; aff'd Id., 435. Affirming Siegman v. Kissell, 71 N. J. Eq., 123. See also 140 Fed. Rep., 117. The term "capital stock" seems to be used in two senses in this section. When the Legislature forbids the dividing, withdrawing, or paying to the stockholders any part of the capital stock, it means the capital actually invested; when it forbids the reduction of capital stock, it means the share capital subscribed, or the authorized capital. Goodnow v. American Writing Paper Co., 73 N. J. Eq., 692; Audenried v. East Coast Milling Co., 68 N. J. Eq., 450, 470. Consequently a dividend may be declared where the company has profits over and above the actual assets with which it began business, although the total assets may not exceed the debts and the nominal share capital. Goodnow v. American Writing Paper Co., supra. This section imposes a liability because of the misfeasance of a director. Where a judgment is recovered against a corporation by default, in an action where the director was not a party, an attempt to hold the director on the ground that the corporation ought not to have the power to suffer a recovery is too severe a construction of the Act. Audenried v. East Coast Milling Co., 68 N. J. Eq., 450. In the case of Williams v. Boice, 38 N. J. Eq., 364, Chancellor Runyon, relying on the theory that stock is regarded as a trust fund for all the debts of the corporation and that no stockholder can entitle himself to any dividend or share of it until the debts are paid, held, that this statute did not exonerate the stockholders from liability to repay dividends paid out of the capital. In an exhaustive opinion by Vice-Chancellor Pitney, in the case of Siegman v. Maloney, 63 N. J. Eq., 422, affirmed, 65 N. J. Eq., 372, the same general rule was followed and after a careful review of authorities the Vice-Chancellor concluded that the true construction of this section limits its operation to cases where the assets of the corporation are insufficient to pay its creditors. He further held that if the action provided for by this section could be maintained by the corporation without regard to its financial condition, the statute would be highly penal and the court would not entertain a suit for its enforcement, although by reason of peculiar circumstances of the case the stockholders might have no remedy in another court. In such cases the stockholders may not recover from the directors the very money which they have received. But in Appleton v. American Malting Co., 65 N. J. Eq., 375, the opinion of Vice-Chancellor Pitney in Siegman v. Maloney seems to have been modified. The Court of Errors and Appeals held that the statute was not solely for the benefit of creditors after the insolvency of a corporation, but that stockholders may maintain an action on behalf of the corporation after the refusal of the directors to sue, and while retaining the illegal dividends distributed to them, compel the repayment by the directors of the amounts thus illegally distributed. "The words of the statute give this full measure of protection. For disobedience of its mandate 'the directors shall be jointly and severally liable to the corporation and to its creditors in the event of its dissolution or insolvency,' to the corporation in any event, to the creditors in the event expressed in the statute." The court aptly remarks that if the statute applies only in cases of dissolution or insolvency the remedies cannot be applied until the corporation is forced into liquidation as a condition of enabling it to recover from its directors the money necessary to make good the impairment of its capital by them. A stockholder may sue in behalf of the corporation provided he shows a refusal either actual or presumptive by the directors to do so. In case there has been no actual refusal by the board, the burden is upon the stockholder to show such facts as would warrant the conclusion that a request to the board to prosecute would be useless. Siegman v. Maloney, 65 N. J. Eq., 372. The same rule was stated in Appleton v. American Malting Co., 65 N. J. Eq., 375, and followed in Herrick v. Dempster, 75 Atl. Rep., 810. In the latter case the question of practice in making the corporation a party defendant arises, and the inconsistencies of such a position are shown. The creation by the Legislature of the precise method by which, under certain conditions, stock may be retired and cancelled, is a clear expression of an intention that such corporation shall accomplish the same result in no other way. Knickerbocker Imp. Co. v. Assessors, 74 N. J. Law, 583. In Siegman v. Electric Vehicle Co., 140 Fed. Rep., 117, it is held that this section imposes an absolute duty on a succeeding board of directors to enforce the liability of the prior directors for their violations impairing the capital of the corporation; and that the question of enforcing the liability is not one of internal management, as to which the discretion of the directors is controlling, even though exercised in good faith. A stockholder receiving dividends out of the capital of a corporation without knowledge of that fact is not liable to the receiver after six years. Directors and officers declaring such dividends are not only liable for the return of the assets wrongfully used, but also for the dividends unlawfully received by them as stockholders and the statute of limitations will not be interposed against this latter liability. Mills v. Hendershot, 70 N. J. Eq., 258. Persons purchasing the capital stock of a corporation have no power to mortgage the assets of the company to pay their individual debt for the stock, thereby depleting its capital and impairing the rights of creditors, and a mortgage so given is void, and there remains an implied promise of the purchaser to pay the agreed price for the stock. Hess v. Reick, 69 Atl. Rep., 1090. Reversed on particular facts of case, 78 N. J. Law, 645. Since this section provides an adequate remedy at law for declaration of dividends out of capital stock, a preliminary injunction against a proposed declaration of dividends will not issue unless it is shown that the directors are insolvent or that the circumstances are such as to warrant an injunction. Schoenfeld v. American Can Co., 55 Atl. Rep., 1044. The remedies provided for in this section may be enforced against a director in a foreign jurisdiction where a similar statute exists. Hutchinson v. Stadler, 85 App. Div., N. Y., 424; Hutchinson v. Curtiss Amer. Malting Co., 45 Misc. N. Y., 484, |