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part for cash, or partly on credit, or take mortgages and bonds for part of the purchase price for all or any part of said property. In case of a vacancy or vacancies in the board of directors of such corporation existing at the time of dissolution or occurring subsequent thereto, the surviving directors or director shall be the trustees or trustee thereof, as the case may be, 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, and to do and perform all such other acts as shall be necessary to carry out the provisions of this act relative to the winding up of the affairs of such corporation and to the distribution of its assets.

Act of 1875, §57. As amended P. L. 1910, p. 51.

As to the duty of the court to remove trustees and appoint a receiver in their place under certain conditions, see Fitzgerald v. State Mutual Building & Loan Ass'n, 69 Atl. Rep., 564.

This section seems to give directors power to sell at private sale. Freeman v. Sea View Hotel Co., 57 N. J. Eq., 68.

Where the directors on dissolution of a corporation divide the assets -more than sufficient to reimburse the complainant-among its stockholders, without providing for a debt due by the corporation, they are personally chargeable with such debt, and under §§54 and 55 the creditor may maintain a bill in chancery against the directors as trustees for discovery and relief. Keen v. Maple Shade Land & Improvement Co., 63 N. J. Eq., 321.

Directors may not use their positions of trust to obtain for their own debts an inordinate share of the assets. Tennant v. Appleby, 41 Atl. Rep., 110; Headley v. Ocean City Imp. Ass'n, 10 Atl. Rep., 471. Directors as trustees for the general creditors cannot prefer one above another, or so dispose of the property as to create preferences in their own favor. Richards v. Haliday, 92 Fed. Rep., 798.

55. Powers and liabilities of such trustees.

The directors, constituted trustees as aforesaid, shall have authority to sue for and recover the afore

said debts and property, by the name of the corporation, and shall be sueable by the same name, or in their own names or individual capacities, for the debts owing by such corporation, and shall be jointly and severally responsible for such debts, to the amount of the moneys and property of the corporation which shall come to their hands or possession as such trustees.

Act of 1875, §58; P. L. 1892, p. 35; P. L. 1894, p. 136; P. L. 1895, p. 609.

Quaere. Whether, after the formal dissolution of a corporation by proclamation for failure to pay state franchise tax, its directors as trustees have power to vote stock of other corporations owned by it. In re Delaware River & A. R. Co., 76 N. J. Law, 163.

56. Court of Chancery may continue directors as trustees or appoint receivers of dissolved corporation. When any corporation shall be dissolved in any manner whatever, the court of chancery, 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.

P. L. 1846, p. 73; P. L. 1849, p. 308; Act of 1875, §60.

The authority of the Chancellor to interpose and take from the

directors the power to close up the business of the corporation, and place its affairs in charge of a receiver, is a discretionary power, to be exercised only on good cause shown-upon circumstances disclosed by the proof which show the need of the interference of the court for the protection of creditors or stockholders from breaches of trust by the directors in the performance of their duties. Newfoundland R. R. Construction Co. v. Schack, 40 N. J. Eq., 222, 229; Rawnsley v. Trenton Mut. Life Ins. Co., 9 N. J. Eq., 95, 347.

A corporation which has defaulted in the payment of state taxes and whose charter has been declared void by proclamation of the Governor is within the provisions for winding up corporations contained in Sections 53-60 of the Corporation Act, and the Chancellor in his discretion may continue directors as trustees to settle the corporate affairs or may appoint a receiver for that purpose. Discretion to appoint a receiver should not be disclaimed because of failure of proof of breaches of trust by the directors since the Governor's proclamation, but should be exercised upon proof of such breaches of trust or of previous breaches of trust or misconduct or incapacity evincing the unfitness of directors to properly discharge the duties of such trust. American Surety Co. v. Great White Spirit Co., 58 N. J. Eq., 526.

See Silvestro v. E. Side Co-op. Bldg. & Loan Ass'n, 53 Atl. Rep., 823.

57. Jurisdiction of Court of Chancery.

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

P. L. 1846, p. 73; P. L. 1849, p. 309; Act of 1875, §61.

58. Disposition of proceeds by trustees or receivers.

The said trustees or receivers shall pay ratably, as far as its moneys and property shall enable them, all the creditors of the corporation who prove their debts in the manner directed by the court; and if any balance remain after the payment of such debts and necessary expenses, the same shall be distributed among the stockholders.

P. L. 1846, p. 73; P. L. 1849, p. 309; Act of 1875, §62.

See Edwards v. Nat'l Window Glass Jobbers' Ass'n, 58 Atl. Rep., 527; s. c. 68 Id., 800.

On final distribution of assets, a payment of shares to the shareholders of record is a valid payment as against a holder of the certifi cate by assignment who has not applied for a transfer on the books. Campbell v. Perth Amboy, etc., Loan Ass'n, 76 N. J. Eq., 347.

59. Actions not to abate on dissolution.

Any action, now pending or to be hereafter begun, against any corporation which may become dissolved before final judgment, shall not abate by reason thereof, but no judgment shall be entered therein except upon notice to the trustees or receivers of the corporation.

P. L. 1852, p. 140; Act of 1875, §§65, 92.

60. Copy of decree of dissolution to be filed in office of secretary of state.

A copy of every decree or judgment dissolving a corporation or forfeiting its charter shall be forthwith filed by the clerk of the court in the office of the secretary of state, and a note thereof shall be made by the secretary of state on the charter or certificate of incorporation, and in the index thereof, and be published by him in the annual volume of laws.

VI.-Execution Against Corporation.

61. On execution schedule of property to be furnished to officer.

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

P. L. 1846, p. 71; P. L. 1849, p. 307; Act of 1875, $66.

62. Execution may be satisfied by debts due the corporation.

If any officer, holding an execution, shall be unable to find other property belonging to the corporation. liable to execution, he or the judgment creditor may elect to satisfy such execution, in whole or in part, by any debts due to the corporation; and it shall be the duty of any agent or person having 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 the corporation, subject to such equitable set-offs on the part of the debtor as in other assignments; and every agent or person who shall neglect or refuse to comply with the provisions of this and the last preceding section, shall be himself liable to pay to the execution creditor the amount due on said execution, with costs.

P. L. 1846, pp. 71-72; P. L. 1849, pp. 307, 308; Act of 1875, §§67-68.

Where a corporation had no bank account, and the treasurer deposited the amounts which he received for the company in his own account in the bank, in his individual name, and not as an officer of the company, held, that this was a debt due the corporation within the meaning of this section, and was not cash in bank belonging to the corporation and going to the receiver on his appointment. So far as a corporation and its receiver are concerned, the debts are bound for the application of the execution creditor's debt by the service upon the corporation of the notice of election. Van Steenberg v. Parsell Pearl Button Co., 19 N. J. L. J., 151.

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