contract for the life of a certain individual, and it was held that a mere notice to the executive department of the government that it claimed no further rights under its charter, and a vote of the majority of the stockholders to dissolve could not effect a dissolution, or terminate the contract in question.1609

1615

The surrender of a special charter could be made only by some formal act of the corporation, and then was of no avail until accepted by the government.1610 Neither an assignment for creditors,1611 nor insolvency,1812 nor a failure to choose officers,1613 or hold meetings,161 nor the failure to do any corporate act for two years,' nor the purchase by certain individuals of all the shares,1 1616 nor a sale of its assets," 1617 worked a dissolution of the corporation. Charters sometimes provide that they shall lapse if something is not done within a certain time, but the dissolution of the corporation cannot be determined in a suit between individuals.1618 'It is too well settled to admit of discussion that a corporation can be judicially determined to have ceased to exist only in a suit to which the commonwealth is a party. The act of incorporation is a contract between the commonwealth and the corporation; whether the corporation has complied with the conditions is a question of fact to be judicially determined. The commonwealth may waive a strict compliance with the terms of the act,

1609 Revere v. Boston Copper Co., 15 Pick. 351.

1610 Boston Glass Mfy. v. Langdon, 24 Pick. 49, 53; Stone v. Framingham, 109 Mass. 303, 305.

1611 Ibid.

1612 Boston Glass Mfy. v. Langdon, 24 Pick. 49.

1613 Ibid.; Russell v. McClellan, 14 Pick. 63; Knowlton v. Ackley, 8 Cush. 93; Revere v. Boston Copper Co., 15 Pick. 351; Oakes v. Hill, 14 Pick. 442; Packard v. Old Colony R. Co., 168 Mass. 92, 99; Hoboken Building Association v. Martin, 13 N. J. Eq. 427.

1614 Packard v. Old Colony R. Co., 168 Mass. 92, 99.

1615 Russell v. McClellan, 14 Pick. 63; Rollins v. Clay, 33 Me. 132; Baptist, etc., Proprietors v. Webb, 66 Me. 398.

1610 Russell v. McClellan, 14 Pick. 63; Newton Manuf. Co. v. White, 42 Ga. 148. But see Cook v. Kent, 105 Mass. 246, 254. Cf. England v. Dearborn, 141 Mass. 590, 6 N. E. Rep. 837; Oakes v. Hill, 14 Pick. 442. 1617 Rollins v. Clay, 33 Me. 132.

1618 Briggs v. Cape Cod Ship Canal Co., 137 Mass. 71; Knowlton v. Ackley, 8 Cush. 93, 95; Falmouth Bank v. Cape Cod Ship Canal Co., 166 Mass. 550, 568, 44 N. E. Rep. 617.

and may elect whether it will insist upon a forfeiture if there has been a breach of condition." 1619

d. Dissolution of a foreign corporation by the chartering State.

Although, in general, full faith is to be given to the judicial proceedings of another State, and there is a presumption that a particular proceeding is valid, yet such a presumption is not conclusive. Therefore, where a foreign corporation is dissolved by a decree of the chartering State, our courts will consider whether the foreign court had jurisdiction, and, if it had none, the dissolution will not be regarded in Massachusetts.1620

The Massachusetts statutes continuing a corporation in existence for three years after its dissolution, for the purpose of winding up its affairs, have no application to foreign corporations.1621

§ 52. Continuation for three years to close affairs.

"Every corporation whose charter expires by its own limitation or is annulled by forfeiture or otherwise, or whose corporate existence for other purposes is terminated in any other manner, shall nevertheless be continued as a body corporate for three years after the time when it would have been so dissolved, for the purpose of prosecuting and defending suits by or against it and of enabling it gradually to settle and close its affairs, to dispose of and convey its property and to divide its capital stock, but not for the purpose of continuing the business for which it was established." 1622

1619 Briggs v. Cape Cod Ship Canal Co., 137 Mass. 71, 72, per Colburn, J., citing Commonwealth v. Union Ins. Co., 5 Mass. 230; Boston Glass Mfy. v. Langdon, 24 Pick. 49; Heard v. Talbot, 7 Gray, 113; Folger v. Columbian Ins. Co., 99 Mass. 267, 274; Rice v. Nat. Bank of Commonwealth, 126 Mass. 300.

1620 Folger v. Columbian Insurance Co., 99 Mass. 267; Olds v. City Trust Co., 185 Mas. 500. Cf. Kelley v. Kelley, 161 Mass. 111, 112.

1621 Olds v. City Trust Co., 185 Mass. 500. Cf. R. L., c. 109, § 53, and infra, § 52.

1622 St. 1903, c. 437, § 52; R. L., c. 109, § 53; Pub. St., c. 105, § 41; Gen. St., c. 68, § 36; Rev. St., c. 44, § 7; St. 1819, c. 43.

a. Effect of continuation.

This provision is constitutional, and tends to enforce contracts rather than to impair them,1623 and the qualified prolongation of a corporation's existence is in the nature of an administration of its estate.1624

Dissolution "does not impair the obligation of contracts made by the corporation with other parties during its existence, or prevent its creditors or stockholders from asserting their rights against its property in a court of chancery, in accordance with the reasonable regulations of the legislature, or with the general principles and practice in equity.'

1625

It will be noticed that the continuation lasts only for three Citations. R. L., c. 109, § 53: Olds v. City Trust Co., 185 Mass. 500,

505.

Pub. St., c. 105, § 41: Stone v. Reed, 152 Mass. 180, 25 N. E. Rep. 49; Hale v. Cheshire R. R., 161 Mass. 445, 37 N. E. Rep. 307.

Gen. St., c. 68, § 36: In re New South Meeting House in Boston, 13 Allen, 504; Chamberlin v. Huguenot Mfg. Co., 118 Mass. 537; New Bedford R. R. v. Old Colony R. R., 120 Mass. 400; Thornton v. Marginal Freight Railway, 123 Mass. 32; Bigelow v. Union Freight Railroad, 137 Mass. 479.

Rev. St., c. 44, § 7: Com. v. Com. Bank, 22 Pick. 176; Crease v. Babcock, 23 Pick. 345; Atlas Bank v. Nahant Bank, 23 Pick. 480; Crease v. Babcock, 10 Met. 561.

St. 1819, c. 43: Foster v. Essex Bank, 16 Mass. 246, 270; Revere v. Boston Copper Co., 15 Pick. 353; Folger v. Chase, 18 Pick. 63. See also, generally, Heard v. Talbot, 7 Gray, 119; Treadwell v. Salisbury Mfg. Co., 7 Gray, 393; Pratt v. Jewett, 9 Gray, 34; Folger v. Columbian Ins. Co., 99 Mass. 267; In re Franklin Telegraph Co., 119 Mass. 447.

Historical. Under Rev. St., c. 44, § 31, those who were stockholders when the charter of a corporation expired were held liable for its debts, and it was held that they could not postpone their liability to the end of the three years, but that the charter expired at once upon its repeal. Crease v. Babcock, 23 Pick. 334, 336. Cf., s. c., 10 Met. 525, 561.

The present section is identical with the corresponding section of the Revised Laws.

1623 Foster v. Essex Bank, 16 Mass. 246, 270. See also Simmons v. Hanover, 23 Pick. 188, 193.

1624 Crease v. Babcock, 23 Pick. 334, 346; Richards v. Attleborough Nat. Bank, 148 Mass. 187, 191.

1625 Thornton v. Marginal Freight Railway, 123 Mass. 32, 34, per Gray, C. J., citing Foster v. Essex Bank, 16 Mass. 245; Read v. Frankfort Bank, 23 Me. 318; Merrill v. Suffolk Bank, 31 Me. 57; Mumma v. Potomac Co., 8 Pet. 281; Curran v. Arkansas, 15 How. 304; Bacon v. Robertson, 18 How. 480; Lum v. Robertson, 6 Wall. 277.

years. Therefore a judgment recovered against a corporation after three years from its dissolution, in a case where no receiver has been appointed, is void.1626 During the three years, the corporation can and must exercise all the functions necessarily incident to its limited and restricted action, including the holding of meetings, passing of votes, electing directors and other agents; and the title to its property remains in the corporation, and does not vest in the directors as trustees or otherwise.1627

The provision that the corporation still continues for the purpose of prosecuting and defending suits is declaratory of the previous law.1628

In the case of an ordinary liquidation or winding up, common and preferred stockholders stand on the same footing.1629 Although there can be no transfers of stock after dissolution, yet where the title to stock has been transferred on the books of the company, prior to the dissolution, the treasurer may sign the new certificate; 1630 and similarly the clerk may, it seems, sign the records of a meeting held before the dissolution, such acts being purely ministerial.16

b. Special provisions.

1631

Where there is some special legislative provision respecting a particular corporation, the general process of winding up provided in this act may not apply.1632 Where dissolution was formerly effected by a special act of the legislature, existing rights were usually protected by express provisions, and

1626 Thornton v. Marginal Freight Railway, 123 Mass. 32; Richards v. Attleborough Nat. Bank, 148 Mass. 188, 191. Cf. Bigelow v. Union Freight Railroad, 137 Mass. 478.

1627 Com. v. Commonwealth Bank, 22 Pick. 176, 180; Folger v. Chase, 18 Pick. 63. In many other jurisdictions the statutes provide otherwise. 1628 Richards v. Attleborough Nat. Bank, 148 Mass. 188, 191; National Bank v. Insurance Co., 104 U. S. 54.

1629 Hale v. Cheshire Railroad, 161 Mass. 443, 445.

1680 Sewall v. Chamberlain, 16 Gray, 581.

1681 Sewall v. Chamberlain, 16 Gray, 581.

1632 E. g., Cheshire R. R. Co. See Hale v. Cheshire R. Co., 161 Mass. 445, 37 N. E. Rep. 307.

BUS. COR. LAW-21

clauses similar to that in this section were usually contained or referred to in the repealing act.1633

c. Foreign corporations.

This section does not apply to corporations organized in other States; 1634 and query, whether, after a foreign corporation is dissolved by the chartering State, a Massachusetts creditor cannot treat the corporation as still existing in order to reach assets here.1835

Our courts will, at any rate, take jurisdiction where the statutes of the chartering State provide for its continuation in the hands of a receiver or trustee for the purpose of winding up. 1636

58. Receivers.

"If the charter of a corporation expires or is annulled, or if the corporation is dissolved, or if a judgment has been recovered against it, and it has neglected, for thirty days after demand made on execution, to pay the amount due, with the officer's fees, or to exhibit to the officer real or personal property belonging to it and subject to be taken on execution, sufficient to satisfy the same, and the execution has been returned unsatisfied, the supreme judicial court or the superior court shall have jurisdiction in equity upon application of a creditor or stockholder to appoint one or more receivers to take charge of its estate and effects and to collect the debts and property due and belonging to it; with power to prosecute and defend suits in its name or otherwise, to appoint agents under them and to do all other acts which might be done by such corporation, if in being, which may be necessary for the final settlement of its unfinished business. The powers of such receivers and the existence of the corporation may be continued as long as the court finds necessary for said purposes.'

"1637

1633 See Chamberlin v. Huguenot Mfg. Co., 118 Mass. 532, 537; Com. v. Com. Bank, 22 Pick. 176. Cf., as to an amalgamation, New Bedford R. R. v. Old Colony R. R., 120 Mass. 397, 400.

1634 Olds v. City Trust Co., 185 Mass. 500, 505.

1635 Ibid.

1636 Michigan State Bank v. Gardner, 15 Gray, 362, 373.

1637 St. 1905, c. 156; St. 1903, c. 437, § 53; R. L., c. 109, § 54; St. 1884, c. 203; Pub. St., c. 105, §§ 42, 43; Gen. St., c. 68, §§ 37, 38; St. 1852, c. 55, § 2; Rev. St., c. 44, §§ 8, 9; St. 1833, c. 145.