filed by any stockholder or creditor of the corporation."

The term, "insolvent," as used in this provision, means the inability of the corporation to pay its debts as they mature, in the ordinary course of business.1 The consequences of dissolution and the powers of the receivers thereupon appointed, are as in the case of voluntary dissolution, above discussed.2

§ 164. Winding up of insurance companies. By Code (1911), Art. 23, sec. 178, the state insurance commissioner is vested with the power to institute "necessary proceedings under the laws of this State to close the affairs of any insurance company of this State which shall appear to him, upon examination, to be insolvent or to be fraudulently conducted"; and such proceedings are to be instituted "either by the attorney general or such other attorney as the attorney general may select." It is further provided that "the insurance commissioner is a necessary party to any proceedings for the purpose of closing up the affairs of any insurance company, when the same shall not be in the name of the State of Maryland."

§ 165. Dissolution otherwise than by judicial proceedings. The Act of 1908, ch. 240, Code (1911), Art. 23, sec. 80, reproduces the following provision which originally appeared in the general incorporation law of 1868:

1 Howeth v. Coulbourne, 115 Md. 115.

2 In Davis v. Gemmell, 73 Md. 536, it is said to be "perfectly clear that the Circuit Court of Baltimore City had no authority to wind up and dissolve the North Branch Company. That company was located in Garrett County and was not within the jurisdiction of the Court, which was asked by the amended bill to declare its dissolution."

3 As to state banks and trust companies, see Code (1911), Art. 11, and Act of 1912, ch. 194.

"Upon the dissolution of any corporation of this State in any manner otherwise than by judicial proceedings, and until other persons shall be appointed as receivers by some court of competent jurisdiction, the directors at the time of dissolution shall become and be trustees for the creditors, stockholders and members of the corporation so dissolved. They shall take title to its assets, real and personal, and shall have full power to wind up and settle its affairs, to use1 for and collect its assets and to pay its debts; and they shall divide among the stockholders or members, the money and other property that shall remain after the payment of the debts and necessary expenses; and the said trustees shall be jointly and severally liable to the creditors, stockholders and members of such corporation to the extent of its property and effects that shall come into their hands."

§ 166. Chancery receivers. A court of equity has, of course, the inherent power to appoint for the benefit of the parties interested, a receiver for property in danger of loss or waste; and it makes no difference whether such property belongs to a natural person or to a fictitious person, except that in the latter case, mere insolvency is sufficient to justify the intervention of the court.2 Such a receiver is a mere custodian, vested with no title and having no powers of action or disposition other than those given by

1 Error for "sue."

2 The power to appoint a receiver for a solvent corporation is a discretionary one, to be exercised with great circumspection, and only in cases where there is fraud or spoliation, or imminent danger of the loss of the property if immediate possession is not taken by the court; and the existence of these conditions must be clearly proved. Internal dissensions among the stockholders, or differences or disputes as to the corporate management, will not warrant interference with the acts of the majority by the appointment of a receiver. Howeth v. Coulbourne, 115 Md. 121.

the court appointing him. His appointment does not work a dissolution of the corporation, nor can the court vest him with greater rights than the corporation itself could exercise.1 Whatever would estop it, estops him. This is not the case, as has been shown, with statutory receivers appointed in forfeiture or dissolution proceedings.2

1 In the case of a public service corporation, the court may authorize the receiver to borrow money and issue certificates which will displace existing liens. This is a power sparingly exercised and not unless the corporation is engaged in the public service.— Hooper v. Central Trust Co., 81 Md. 591, 29 L. R. A. 262.

2 Compare Hughes v. Hall, 117 Md. 547.

CHAPTER XXIII.

FOREIGN AND FEDERAL CORPORATIONS.

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§ 167. Preface. The modern and comparatively complex relation between one state and the corporations of another, has its origin in several sources: (1) Theoretically, the courts still recognize the doctrine of Bank of Augusta v. Earle, 13 Pet. 519 (1839): "It is very true that a corporation can have no legal existence out of the boundaries of the sovereignty by which it is created. It must dwell in the place of its creation. * * But although it must live and have its being in that State only, yet it does not by any means follow that its existence there will not be recognized in other places; and its residence in one State creates no insuperable objection to its power of contracting in another. ** * * Now, natural persons through the intervention of agents are continually making contracts in countries in which they do not reside. And what greater objection can there be to the capacity of an artificial person, by its agents, to make a contract within the scope of its limited powers, in a sovereignty in which it does not reside provided such contracts are permitted to be made by them by the laws of the place? * * * Every power, however, of the description of which we are speaking, which a corporation exercises in another State, depends for its validity upon the laws of the sovereignty in which it is exercised, and a corporation can make no valid contract

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without their sanction express or implied." (2) Unless and until forbidden, a foreign corporation may do business outside of its domicil, and, having entered another state, it is there a person within the Fourteenth Amendment and entitled to the guaranties thereof. (3) If the corporation is national by creation or adoption, or is engaged in interstate commerce, no state may exclude it or so impose conditions as to interfere with its federal or interstate business. (4) While not a citizen entitled to "all privileges and immunities of citizens in the several States"-under the Fourth Article, a corporation is nevertheless within the jurisdiction conferred upon the federal courts in cases of diverse citizenship; and it is conclusively presumed to be, for this purpose, a citizen of the creating state. The questions of law and procedure, state and federal, raised by the interaction of these principles are not settled; the field of discussion is a large one; and nothing more than a bird's eye view will be attempted here.

§ 168. What corporations are foreign. The general rule is that corporations not created by the laws of a particular state, are foreign to it; but in the case of those

1 Per Taney, C. J. The question was whether the appellant, a corporation of Georgia, could sue on a note bought by its agent in Alabama. The reversed opinion of the lower court was that: "A bank incorporated by the laws of Georgia with the power among other things to purchase bills of exchange, could not lawfully exercise that power in the State of Alabama; and that the contract for this bill was therefore void and did not bind the parties to the payment of the money."

2 The Act of 1908 (Code 1911, Art. 23, sec. 90), provides that "The term, foreign corporation, as used in this article, shall mean every corporation, association or organization, other than a national bank, which has been established, organized or chartered under laws other than those of this State."