I understand the rule of chancery in reference to such a case to be that no suit can be maintained by an individual stockholder for a wrong done, or threatened, to such a corporation, unless it appears that the plaintiff has no means of procuring a suit to be instituted in the name of the corporation; and that the rule is universal, applicable as well to the cases where the acts which afford the ground for complaint were either such as a majority might sanction, or whether it belonged to the category of those acts by which no stockholder could be bound, except by his own consent. This principle has the highest sanction in the decisions of that court. (Foss v. Harbottle, 2 Hare 461—affirmed 1 Phil. 790; 2 Phil. 740; 7 Hare 130.) The principle is an obvious consequence from the relations between the officers and members of a chartered corporation and the corporation itself. These are explained in Smith v. Hurd, 12 Met. 371. The court says: "There is no legal privity, relation or immediate connection between the holders of shares in a bank in their individual capacity on the one side and the directors of the bank on the other. The directors are not the bailees, the factors, agents or trustees of such individual stockholders. The bank is a corporation and body politic, having a separate existence as a distinct person in law, in whom the whole stock and property of the bank are vested, and to whom all agents, debtors, officers and servants are responsible for all contracts, express or implied, made in reference to such capital, and for all torts and injuries diminishing or impairing it." The corporation, therefore, must vindicate its own wrongs and assert its own rights, in the modes pointed out by law. I do not say that a court of chancery will never permit an individual stockholder to come before it to assert a right of the corporation in which he is a shareholder, where there is an obstacle of such a nature that the name of the corporation can not be employed before legitimate tribunals in their regular modes of proceeding, but the burden is thrown upon the plaintiff to establish the existence of an urgent necessity for such a suit. The consideration of analogous cases will strengthen this conclusion; cases where courts of chancery are more free to intervene, from the fiduciary relations between the parties and the extent of its general jurisdiction over them. Such are cases of danger to the interests of a creditor of an estate from the collusion of an executor with the debtor of the estate, or the insolvency of the executor; or where an executor wrongfully fails to make a settlement with a surviving partner, and a residuary legatee seeks one entire settlement of the estate against the executor and partner; or where a decedent in his life has fraudulently conveyed assets, and his executor is estopped to impute fraud, and there are creditors; or where the managers of a joint stock company have been guilty of fraud, illegality, waste, and their stockholders desire relief. In all these cases the court of chancery will suffer a party remotely interested to institute the suit which his trustee, or other representative, should have brought, and will grant the relief on that suit which would have been appropriate to the case of him who should have commenced it. Sir John Romilly, in a late case belonging to one of these categories, says: "To support such a bill as this it is not sufficient to prove that it may be an unpleasant duty to the executors and trustees to take the necessary steps for protecting the property intrusted to them. It is not sufficient to show that it will be for their interests not to take such steps. It is necessary to show that they prefer their own interests to their duty, and that they intend to neglect the performance of the obligation incidental to the office imposed upon them, and which they assumed to perform; or, as said in Travis v. Mylne, that a substantial impediment to the prosecution by the executors of the rights of the parties interested in the estate against the surviving partner exists.” Stainton v. Carron Co., 23 L. & Eq. 315; Travis v. Mylne, 9 Hare 141; Hersey v. Veazie, 11 Shep. 1; Colquitt v. Howard, 11 Geo. 556. These cases afford no support to this suit. The Cleveland Bank has betrayed no purpose to abandon its corporate duty. The interests and obligations of the directors coincide to support its pretensions. There is no supineness in their past conduct, nor indifference to the existing peril. The evidence, at the most, convicts them only of a present disinclination to commence suits, which were likely to be unproductive, at the request of a single shareholder. The answer shows that the taxes for 1852 had not been recovered by the state, but had been retaken by an assignee of the bank. Nor does the correspondence show that the directors had decided to abandon the contest. The case here does not at all fulfill the conditions on which the interposition of a shareholder is allowable. Elmslie v. McAulay, 3 Bro. C. C. 224, 1 Phil. 790; Law v. Law, Coll. 41; Walker v. Trott, 4 Ed. Ch. Rep. 38. But the evidence does not allow me to conclude that any impediment whatever existed to a suit in the name of the corporation, from any disposition of the directors to resist the claims of the state. Their protest appears at every successive stage of the action of the fiscal officers. This suit is evidently maintained with their consent; there has been no appearance either by the directors or the corporation, but they abide the case of the stockholder. The decree is for the benefit of the corporation. The question then is, can a corporation belonging to a state, and whose officers are citizens, upon some hope or assurance that the opinions of the courts of the United States are more favorable to their pretensions, by any combination, contrivance or agreement with a non-resident shareholder, devolve upon him the right to seek for the redress of corporate grievances, which are the subjects of equitable cognizance in the courts of the United States, by a suit in his own name? In my opinion, there should be but one answer to the question. Decree of circuit court affirmed. Note. The rights of members of a corporation is the subject of chapter 17, infra. See page 1706, et seq., where this topic is further discussed. A few references are here given: 1843, Foss v. Harbottle, 2 Hare (English Vice Chancel lor's Court) 461; 1844, Hersey v. Veazie, 24 Maine 9, 41 Am. Dec. 364; 1847, Smith v. Hurd, 12 Met. (Mass.) 371; 1867, Seaton v. Grant, L. R. 2 Chan. App. 459; 1881, Hawes v. Oakland, 104 U. S. 450, infra, p. 1716; 1890, Eschweiler v. Stowell, 78 Wis. 316, 23 Am. St. Rep. 411; 1896, Decatur M. L. Co. v. Palm, 113 Ala. 531, 59 Am. St. 140; 1903, Corbus v. Gold Mining Co., 187 U.S. 455. Pleading, see Quincy v. Steel Co., 120 U. S. 241. Sec. 20. Same. (c) When the corporate organization is used as a cloak to aid in the commission of frauds. METCALF v. ARNOLD.1 1895. IN THE SUPreme Court of Alabama. 110 Ala. 180-185; Appeal from the chancery court of Montgomery. The bill in this case was filed by the appellees, who were judgmentcreditors, for the benefit of themselves and all other creditors of the Metcalf Drug Company who might desire to come in and make themselves parties. The bill avers that complainants recovered a judgment against H. B. Metcalf and F. G. Weatherly, who were doing business under the firm name of H. B. Metcalf, and that executions on each of said judgments were issued and returned no property found. It was further averred in the bill that after the debts which were the basis of the judgment in favor of each of the complainants were contracted, and while said H. B. Metcalf and F. G. Weatherly were indebted to complainants and other creditors, the said H. B. Metcalf and F. G. Weatherly were conducting a drug business in the city of Montgomery, Alabama, and had a large stock of goods and assets in said business, none of which were exempt to them, or either of them; that after the creation of the indebtedness to the complainants, but prior to the rendition of the judgment in their favor, "the said H. B. Metcalf and F. G. Weatherly, with the intention to hinder, delay and defraud complainants and others of their creditors, attempted to form a corporation, with a capital stock of $8,000," and put into the said corporation as its only capital stock, the stock of goods, wares and merchandise and notes and accounts, which were the assets of the firm of H. B. Metcalf; that "said H. B. Metcalf and F. G. Weatherly, carrying out their hitherto formed intention of hindering, delaying and defrauding complainants and their other creditors, had the stock of said corporation, consisting of eighty shares, of the par value of $100 each, issued as follows: thirty-six shares of par value of $3,600, to A. P. Metcalf, the wife of H. B. Metcalf; eighteen shares of par value of $1,800, to H. B. Metcalf; seventeen shares of the par value of $1,700, to M. M. Weatherly, the wife of F. G. Weatherly; and nine shares of the par value $900, to F. G. Weatherly." It was further averred that the corporation so attempted to be formed was known and called the "Metcalf Drug Company," but that the said A. P. Metcalf and M. M. Weatherly had no interest whatever in the effects put into the formation of the capital stock of said corporation; that all of said property put into the said corporation belonged to H. B. Metcalf and F. G. Weatherly, doing business in the firm name of H. B. Metcalf; and that the property so put into the corporation constituted all, or substantially all, of the property belonging to said firm and to each member thereof, upon which property the complainants had an equitable lien for the payment of their debts. It was further averred "that on, to wit, April 18, 1894, by a collusion between H. B. Metcalf and F. G. Weatherly and a small creditor of theirs, a judgment was allowed to be taken against the said defendants, H. B. Metcalf and F. G. Weatherly, in a justice court, for an amount less than one hundred dollars, upon which judgment execution was issued and levied upon seventeen shares of stock in the name of H. B. Metcalf and eight shares in the name of F. G. Weatherly, and the said H. B. Metcalf and F. G. Weatherly, with the still further fraudulent intent of placing all their property beyond the reach of their creditors, allowed all of said shares to be sold at public outcry, and they pretended that said shares were bought in by their respective wives, but your orators allege that in truth and in fact the amount so bid at such sale for said stock was paid by the said H. B. Metcalf and F. G. Weatherly. The bill further averred "that according to the stock-books of the Metcalf Drug Company, the said H. B. Metcalf now owns one share of stock and the said F. G. Weatherly owns one share of stock, but upon said stock-books, notice is given that the one share of H. B. Metcalf is transferred as collateral security to his wife for a pretended debt, and the one share of F. G. Weatherly is transferred to his wife as collateral security for a pretended debt." The prayer of the bill was for the issuance of an injunction restraining the defendants and each of them from disposing of, transferring or incumbering any of the property referred to in the bill, and for the appointment of a receiver of the goods, wares, merchandise and the notes, accounts and books of the Metcalf Drug Co., and "that on a final hearing of this cause, your honor will decree that the formation of said corporation was fraudulent and void as to your orators, and that the issue of stock and pretended interest therein of A. P. Metcalf and M. M. Weatherly is illegal and void as to your orators, and that your orators have a lien upon said property to the extent of debts due them, and that your honor will order a reference to ascertain the amount of debts due your orators and any other creditors who may come in and make themselves parties hereto; and will order the receiver to sell and dispose of said stock of goods, and to collect the notes and accounts, and pay your orators out of the proceed thereof." The respondents demurred to the bill, and assigned many grounds, the substance of which were the following: (1) The said bill seeks to forfeit the charter of the Metcalf Drug Company, and fails to show that it was not duly organized according to law. (2) The bill seeks to forfeit the charter of the Metcalf Drug Company, and fails to set forth any grounds for the forfeiture of said charter. (3) The bill seeks to condemn the assets of the Metcalf Drug Company to the payment of debts for which it is not liable. (4) The bill shows on its face that the debts which are sought to be collected in this suit are due from H. B. Metcalf and F. G. Weatherly, as partners, under the firm name of H. B. Metcalf, and are not due from the Metcalf Drug Company, and yet the bill seeks to condemn the property of the Metcalf Drug Company, and not the property of said debtors. (5) The bill seeks to fasten a specific lien on the goods, wares, merchandise, notes and accounts delivered in payment of the corporate stock in the Metcalf Drug Company, but fails to state that all, or any part, or what part of said assets were in the possession of the defendants, or any one of them, at the time of the filing of the bill in this cause. On the submission of the cause on the demurrer, the chancellor overruled the said demurrer. The defendants appeal from this decree, and assign the same as error. BRICKELL, C. J. The demurrer was properly overruled. The bill is not, as is supposed by several of the causes of demurrer, a bill assailing collaterally the incorporation of the Metcalf Drug Company and seeking a forfeiture of its charter. It is a bill by judgment creditors, seeking the aid of a court of equity to remove obstacles and hindrances to the enforcement of their judgments, which the judgment. debtors have fraudulently interposed. Whatever may be the character of the obstacle or hindrance; whatever may be the scheme or device to which the debtor resorts, it lies within the province of a court of equity to remove it. The formation of a corporation, investing it with the legal title to all the property and rights of property of the judgment-debtors, and parcelling out the stock of the corporation to the debtors and their wives, may be a new device for hindering, delaying and defrauding creditors. The novelty of the device is not of consequence; the fraud of its conception and consummation vitiates it, as fraud vitiates all transactions tainted with it. The bill does pray that the formation of the corporation be deemed fraudulent and void as to the complainants. Such a decree would be proper in granting to the complainants the full measure of relief to which they are entitled if the allegations of the bill be true. But it would not work a forfeiture of the charter, or a dissolution of the corporation; it would simply be ancillary to the divestiture of the title to the property, liable to the debts of the complainants, with which it had been invested by the judgment-debtors. Let the decree of the chancellor be affirmed. Note. See also: 1865, Booth v. Bunce, 33 N. Y. 139, 88 Am. Dec. 372; 1878, Des Moines Gas Co. v. West, 50 Iowa 16; 1882, Hibernia Insurance Co. v. St. Louis, etc., Trans. Co., 13 Fed. Rep. 516; 1886, Slatterly v. St. Louis, etc., T. Co., 91 Mo. 217, 60 Am. Rep. 245; 1890, Montgomery Web Co. v. Dienelt, 133 Pa. St. 585; 1891, Breman, etc., Bank v. Branch, etc., Co., 104 Mo. 425, 16 S. W. 209; 1892, Vance v. McNabb, 92 Tenn. 47; 1892, Miner v. Belle Isle Ice Co., 93 Mich. 97, 53 N. W. 218; 1896, Austin v. Tecumseh Natl. Bank, 49 |