In Dodge v. Woolsey, 18 How. (U. S.) 331, 15 L. Ed. 401, the right of a stockholder to bring a suit was said to be founded on a right of action existing in the corporation it self as the appropriate plaintiff and must be based upon some injurious action or threat ened action upon the part of the corporation or the stockholders, destructive of the cor poration or the rights of stockholders. A stockholder cannot sue except on a refusal to sue 'on the part of the corporation. This was said be the leading case on the subject; Hawes v. Oakland, 104 U. S. 450, 26 L. Ed. 827, which followed Dodge v. Woolsey, and at the same term of the court rule 94 of the su preme court equity rules was promulgated, embodying substantially the language of the opinion of the court in Hawes v. Oakland. It provides that every bill brought by a stock holder against a corporation and other par ties, founded on rights which may be proper ly asserted by the corporation, must be veri fied by oath and must contain an allegation that the plaintiff was a shareholder at the time of the transaction of which he com plains, or that his share had devolved on him since by operation of law, and that the suit is not a collusive one to confer upon courts of the United States jurisdiction of a case of Which it would not otherwise have cogniz ance. It must also set forth with particulari ty the efforts of the plaintiff to secure such action as he desires on the part of the direc tors and, if necessary, of the shareholders, and the cause of his failure to secure such action.
See, also, Detroit v. Dean, 106 U. S. 537, 1 Sup. Ct. 500, 27 L. Ed. 300 ; Taylor v. Holmes, 127 U. S. 489, 8 Sup. Ct. 1192, 32 L. Ed. 179 ; Porter v. Sabin, 149 U. S. 473, 13 Sup. Ct. 1008, 37 L. Ed. 815, where it is held that the corporation is a necessary party.
The complaining stockholder is entitled to his costs from the corporation ; 2 Spell. Pr. Corp. 643.
A single stockholder can enjoin the use of the funds of the corporation in a project not authorized by charter or certificate when he became a shareholder ; Stevens v. R. Co., 29 Vt. 545 ; this is protection to minority share holders, but it at times becomes inconven ient, hence it is generally provided by statute or in the articles of incorporation that a change in the specified objects can be made by a certain number.
A stockholder has the right to prevent the sale or lease of all the corporate assets, when the corporation is in financial difficulty, for he has the right that the enterprise shall not be unnecessarily abandoned just as much as enlarged ; Elyton Land Co: v. Dowdell, 113 ' Ala. 177, 20 South. 981, 59 Am. St. Rep. 105; but where the corporation is in an em barrassed financial condition, then the direc tors may lease or sell the assets if the same is done properly and ratified by the majority 'shareholders ; Bartholomew v. Rubber Co., 69
Conn. 521, 38 Atl. 45, 61 Am. St. Rep. 57.
The court will not inquire into the stock holder's motive for bringing his bill against the corporation unless the same is admitted to be bad ; L. R. 2 Ch. App. 459 ; but the suit must be brought on his own behalf and not as suing for some one else ; Forrest v. Manchester Ry. Co., 4 De G., F. & J. 125; but it is held, where a share of stock is in the hands of a bona fide purchaser, he shall not be subject to any personal exception that was binding on his transferror; Parsons v. Jo seph, 92 Ala. 403, 8 South. 788.
Where a corporation issues stock at an over-valuation for property to promoters who were the only existing shareholders, the sub sequent shareholders, buying such stock, can not sue through the corporation such promot ers, since a corporation should not be allowed to disregard its assent previously given, and hence there is no wrong done to the corpora tion ; Old Dominion Copper M. & S. Co. v. Lewisohn, 210 U. S. 206, 28 Sup. Ct. 634, 52 L. Ed. 1025; contra; Old Dominion Conger Co. v. Bigelow, 188 Miss. 315, 74 N. E. 653, 108 Am. St. Rep. 479.
Six distinct classes of creditors' bills against .stockholders: 1. He may have sub scribed for stock to be paid for in money, and by the terms of his subscription no call has to be made to render him liable, or the call has already been made ; Hadden v. Spad er, 20 Johns. (N. Y.) 554. (2) Under the same contract of subscription, a call has to be made before the stockholder will be liable to pay; Hatch v. Dana, 101 U. S. 205, 25 L. Ed. 885. (3) The corporation has agreed that the stock issued to the stockholder for money, at less than par, shall be considered as fully paid; Coffin v. Ransdell, 110 Ind. 417,11 N. E. 20 ; or the corporation has issued its stock as fully paid for property conveyed to it in lieu of money; Bank of Ft. Madison v. Alden, 129 U. S. 372, 9 Sup. Ct. 332, 32 L. Ed. 725. (4) The corporation has issued its stock as fully paid for property conveyed to it in lieu of money, (a) such property being grossly over-valued by the corporation, or (b) being materially over-valued, but the corporation acting in good faith, and in the exercise of its best judgment, or (c) the difference be tween the valuation assigned and the true value being immaterial. This class of cases sometimes involves statutory and constitu tional provisions against "watered" stock, giving rise to further distinctions; Hastings Malting Co. v. Brewing Co., 65 Minn. 28, 67, 8 N. W. 652; Bank of Ft. Madison v. Ald en, 129 U. S. 372, 9 Sup. Ct. 332, 32 L. Ed. 725 ; Bickley v. Schlag, 46 N. J. Eq. 533, 20 Atl. 250; Van Cleve v. Berkey, 143 Mo. 109,