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Fact that a single creditor may pursue unpaid stock by action at law, does not forbid his suit in equity.
Eames v. Doris, 102 Ill. 350. Simple contract creditors may bring bill under Section 25 to wind up a corporation-pursuing assets.
King v. Interior Bldg. Co., 2 Ill. C. C. R. 72. Creditor's bill to dissolve must be filed on behalf of all creditors. Preferences set aside enure to proportionate benefit of all.
King v. Interior Bldg. Co., 2 III. C. C. R. 72.
Assignment, voluntary, or of property.
Voluntary assignment by a corporation, unauthorized by the directors is not good, but may be ratified by such directors and will date back, but will not affect rights of creditors attaching before ratification.
Friedman, Assignee, v. Lesher, 198 Ill. 21. An assignee of stock who has notice that it is not fully paid, though issued fully paid, is liable to creditors for the unpaid balance.
Higgins v. Ill. T. & S. Bank, 193 Ill. 394. A debtor formed a corporation and transferred all his property to it, himself holding most of the stock. Held proper where creditors had notice and did not object.
Kingman & Co. v. Mowry, 182 111. 257. Assignment of corporate accounts to a trustee with notice to the debtors is good though made the day before bill for a receiver is filed, under Section 25—when in good faith and without harm to creditors.
C. T. & T. Co. v. Smith, 158 Ill. 417 (424). Creditors are not required to investigate as to ownership of stock, but may hold those who subscribe.
Winston v. Dorsett Pipe & P. Co., 129 Ill. 64 (71).
CRIMES AND TORTS.
The provision of the Criminal Code forbidding the use of a corporate name without incorporating (1 Starr & Curtis, p. 1332) does not apply to a name assumed before that statute was enacted (1869), and has regard only to the fraudulent use of a corporate name in such a way as to deceive the public. The deception, not the use, constitutes the fraud.
People v. Rose, 219 Ill. 46 (62-3).
Diversey v. Smith, 103 Ill. 378.
People v. Potter, et al., 3 I. C. C. Rep., 393.
Dividends are the profits realized from the conduct of the corporate business. They arise from the net profits and are payable to the owners of the stock at the time the dividend is declared as shown by the corporate books. is authorized to pay dividends to the owners appearing on its books. Dividends are declared monthly, quarterly, semi-annually or otherwise as directed by the by-laws. In the absence of a by-law on the subject the board of directors may declare dividends at such times as it may deem advisable.
Declaring dividends is done by the board by resolution duly passed.
After the resolution is passed each owner of stock has an action against the company for the dividend on his stock. Dividends are paid by the treasurer on receipts to be signed by the stockholder.
Stock dividends are dividends declared by the board and made payable in stock of the company. This is done when the profit has become sufficiently large to justify an increase. It is an extra dividend and does not take the place of the regular cash dividend.
Stockholders have no claim to the corporate profits until a dividend has been declared; but in case directors fail to declare a dividend where one is rightfully due, mandamus by a stockholder would doubtless lie to compel such declaration.
Statute as to-Chap. 32.
Dividends of Insolvent Company-Liability.) § 19. If the directors or other officers or agents of any stock corporation shall declare and pay any dividends when such corporation is insolvent, or any dividend the payment of which would render it insolvent, or which would diminish the amount of its capital stock, all directors, officers or agents assenting thereto shall be jointly and severally liable for all the debts of such corporation then existing, and for all that shall thereafter be contracted, while they shall respectively continue in office.
Law in general.
Stock issued as a dividend upon stock held by the executor of an estate, belongs, as between a life tenant and remainderman, to the principal of the estate and goes to the remainderman.
Billings v. Warren, 216 Ill. 281. Where the dividends of bank stock are willed to a wife for life, title to the stock does not pass to her.
Mortimer v. Potter, Receiver, 213 Ill. 178. Undivided profits held in the treasury until after a stockholder's death, and then declared as dividends, are part of the "net income” of his estate and not of the corpus.
DeKoven v. Alsop, 205 Ill. 309. A "stock dividend” is part of the corpus of the estate of a deceased stockholder, and goes to the remainder-man.
DeKoven v. Alsop, 205 III. 309. A stockholder who receives dividends cannot deny the corporate existence.
Lincoln Park Chap. R. A. M. v. Swatek, 204 Ill. 228. Preferred stock dividends are not considered in determining the financial condition of a railroad company as regards its earnings.
People v. St. L. A. & T. H. R. R. Co., 176 111. 512.
DISSOLUTION OF CORPORATIONS.
Dissolution may be effected in one of three ways:
1. By voluntary action of the stockholders at an annual or special meeting. The general procedure is the same as for changing name, etc., and is fully outlined in the statute. (For forms, see Nos. 10 to 17a.) (See Changing Name, etc.)
2. By suit brought by the Attorney-General where the corporation has ceased doing business.
3. By creditors under Section 25, Chapter 32, when the company has ceased doing business with debts unpaid or has fraudulently sold its property, etc.
Voluntary-By vote of stockholders.
49a. $ 1. Be it enacted by the People of the State of Illinois, represented in the General Assembly: That an act entitled "An Act concerning corporations," approved April 18, 1872, in force July 1, 1872, be and the same is hereby amended so as to provide for the voluntary dissolution of corporations organized or hereafter organized upon the stock plan thereunder, by adding thereto the following sections to be numbered section 50, section 51, section 52 and section 53 respectively:
49b. Meeting of Stockholders—Notice.) § 50. Whenever two-thirds of the stockholders of any corporation organized or hereafter organized under the provisions of this act upon the stock plan may desire to abandon the corporate enterprise,