§ 608.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. IX. Rights of share- holders in respect of winding up. § 608. Although it would seem that there is no method by which a shareholder can, against the will of the ma- jority, force the corporation to continue its opera- tions, a shareholder has important rights respecting the manner of discontinuing the business and winding up the corporate affairs. 1 On the dissolution of a corporation, as by expiration of its charter, any shareholder ordinarily may insist that its assets shall be turned into money ; 2 and where a statute provides a way for winding up a company or reducing its capital stock, the company cannot in a way unauthorized by the statute, against the will of a dis- sentient shareholder, purchase its own shares with a view to dividing its assets ; and in such a case a clause in the articles of association, that the shares of any shareholder who begins directly or indirectly a suit against the company or the directors, shall be forfeited on payment to him of their full market value, cannot avail the company. 3 It has also been held that the directors and a majority of shareholders cannot sell out the entire property of a solvent and paying railroad company against the consent of a minority. 4 And a railroad 1 But a subscriber who has never paid anything on his shares, and whose shares have been forfeited, has no standi ng as a shareholder to object to the disposition made of corporate funds on dissolution. St. Louis, etc., Coal, etc., Co. v. Sando- val Coal, etc., Co., 116 111. 170. 2 Mason v. Pewabic M'g Co., 133 U. S. 50. 8 Hope v. International Financial Society, L. 11. 4 Ch. Div. 327. 4 Kean v. Johnson, 9 N. J. Eq. 401. See People v. Ballard, 134 N. Y. 269; Morris v. Ely ton Land Co., 125 Ala. 263; Plant v. Macon Oil & Ice Co., 103 Ga. 666; Forresters B. & M. Min. Co., 21 Mont. 544. But see Waldoborough v. Railroad Co., 84 Me. 469. The owners of a majority of shares of a corporation under the form of dissolving it and disposing of its property and distributing the pro- 610 ceeds, became the purchasers of such property at an unfair price, through a new corporation, in which they were shareholders, to the exclusion of the minority shareholders in the old corporation. In a suit in ecpiity by the latter against the new corpo- ration, it was held that plaiutiffs had a lien, to the extent of the moneys of which they had been deprived by the sale, on the property of the old corporation in the hands of the new. Ervin v. Oregon Ry., etc., Co., 23 Blatchf. 517. The court followed the idea that when a majority com- bine, they constitute themselves the corporation, and so are bound to ex- ercise their powers with due regard to the interests of the minority. See, also, Meeker v. Winthrop Iron Co., 17 Fed. Rep. 48; cf. Phillips v. Providence S. E. Co., 21 R. I. 302; Bartholomew v. Derby Rubber Co., 69 Conn. 521.
