City of Chicago v. Cameron

Citations

• 120 Ill. 447
• 11 N.E. 899

Syllabus

<p>1. Trust—wrongful application of securities by officers of a corporation-purchaser with notice. The appropriation of the bonds of a railway company, by its president and general manager, to the payment of the debts of other corporations, from which the railway company derives no practical benefit, is a breach of trust, and illegal and void as to the railway company; and-such bonds will be void in the hands of all persons acquiring them with notice of the facts showing the illegality of them delivery for unauthorized purposes.</p> <p>2. Corporations —stockholders—preserving the corporate property and interests—rights and remedies of the stockholders. Where a corporation having a right of action against directors, officers or others, for wrongfully dealing with corporate property, or wrongfully exercising corporate franchises, either actually or virtually refuses to institute or prosecute a suit, in order to prevent a failure of justice an action may be brought and maintained by a stockholder or stockholders, either individually or suing on behalf of themselves and all others similarly situated, against the wrongdoing directors, officers and other persons; but it is absolutely necessary that the corporation shall be joined as a party, usually defendant.</p> <p>3. Where there is a reasonable certainty that a demand on the corporation to bring suit will be nugatory, the stockholder, as one of the beneficial parties in interest, may bring the suit without first having requested the managing body of the corporation to do so.</p> <p>i. The remedy of stockholders against the wrongful acts of the directors or other officers of a corporation is not confined to the prevention of an unlawful act, but in a case where an act would be enjoined, a court of equity may declare the same act, if consummated, void. So if corporate bonds are delivered for improper purposes, by an officer having charge of them, a court of equity may declare them void, and cancel them, and set aside a d