corporation, and statute will run in favor of stockholders from such time; but insolvency in the sense of insufficient property to pay debts, or appointment of receivers to carry on business, is not sufficient. Younglove v. Lime Co., 49 Ohio St. 663; Bronson v. Schneider, 49 Ohio St. 438; Peter v. The Farrell Foundry and Machine Co., 53 Ohio St. 534.

§ 3260a. Action by court-Receiver

The court shall proceed thereon, as in other cases, and, when necessary, shall cause an account to be taken of the property and obligations due to and from such corporation, and may appoint one or more receivers. 94 O. L. 359.

§ 3260b. Enforcement of liability upon insolvent corporation

If, on the coming in of the answer or upon the taking of such account, it appears that such corporation is insolvent, and has not sufficient property or effects to satisfy such creditor, the court may proceed to ascertain the respective liabilities of the directors, officers and stockholders, and enforce the same by its judgment, as in other cases. 94 O. L. 359.

§ 3260c. Nonresident stockholders-Collection of unpaid installments

In all cases in which the directors or other officers of a corporation, or the stockholders thereof, are made parties to an action in which a judgment is rendered, if the property of such corporation is insufficient to discharge its debts, the court shall give notice to nonresident stockholders as provided in sections five thousand and forty-eight, five thousand and forty-nine, five thousand and fifty, five thousand and fifty-one and five thousand and fifty-two of the Revised Statutes, and shall first proceed to compel each stockholder to pay in the amount due and remaining unpaid on the shares of stock held by him, or so much thereof as is necessary to satisfy the debts of the company. 94 O. L. 359.

§ 3260d. Liabilities of officers and stockholders-Prosecutions by receiver

If the debts of the company remain unsatisfied, the court shall proceed to ascertain the respective liabilities of the directors or other officers and of the stockholders, and to adjudge the amount payable by each, and enforce the judgment, as in other cases. The court may authorize and direct the receiver to prosecute such

action in his own name as receiver, as may be necessary, in other jurisdictions to collect the amount found due from any officer or stockholder. 94 O. L. 359.

§ 3260e. Notice to creditors

Whenever any action is brought against any corporation, its directors or other superintending officers, or stockholders, according to the provisions of this chapter, the court, whenever it appears necessary or proper, may order notice to be published, in such manner as it shall direct, requiring all the creditors of such corporation to exhibit their claims and become parties to the action, within a reasonable time, not less than six months from the first publication of such order, and, in default thereof, to be precluded from all benefit of the judgment which shall be rendered in such action, and from any distribution which shall be made under such judgment. 94 O. L. 359.

§ 3260f. Distribution of assets of insolvent corporationUpon a final judgment in any such action against an insolvent corporation, the court shall cause a just and fair distribution of the property and assets of such corporation or the proceeds thereof to be made among its creditors. 94 O. L. 359.

§ 3261. Trustees personally liable for all debts

The trustees of a corporation created for a purpose other than profit, shall be personally liable for all debts of the corporation by them contracted. 52 v. 44, § 78; S. & C. 310.

The declaration in the articles of incorporation of a chamber of commerce that it "is formed not for profit" is not inconsistent with a provision for capital stock, nor with a declaration that it is intended to promote the prosperity of the city in which it is located; and the trustees or directors of such corporation are personally liable for all its debts by them contracted. Snyder v. Chamber of Commerce, 53 Ohio St. 1.

This does not cover loss under a certificate of membership and insurance under sec. 3686, even though such certificate was in part ultra vires, if issued in good faith. Manf'rs Fire Ass'n v. Lynchburg Drug Mills, 8 C. C.

I12.

Where indebtedness is incurred in behalf of the corporation and for its benefit, and afterward the trustees authorized the giving of a note of the corporation for the debt, but the creditor refused to take it, and took the note of the individuals, which on renewal later was changed into the note of the corporation, the trustees are personally liable. Mahaffy v. Rogers, IO C. C. 24; affirmed in 37 B. 292.

Trustees are not liable for money lost by failure of a bank where the trust funds are deposited to their credit as trustees (in this case a treasurer), the bank being reputable, etc. Odd Fellows Ben. Ass'n v. Ferson, 3 C. C. 84.

§ 3262. Increase of capital stock

A corporation for profit, after its original capital stock is fullly subscribed for, and an installment of ten per cent on each share of stock has been paid thereon, or a corporation not for profit, having a capital stock, may increase its capital stock or the number of shares into which its capital stock is divided, by the unanimous written consent of all original subscribers, if done prior to organization, and after organization then by a vote of the holders of a majority of its stock, at a meeting called by a majority of its directors, at least thirty days' notice of the time, place and object of which has been given by publication in some newspaper of general circulation, and by letter addressed to each stockholder whose place of residence is known; or such increase may be made at any meeting of the stockholders at which all the holders of such stock are present in person, or by proxy, and waive in writing such notice by publication and by letter; and also agree in writing to such increase, naming the amount of increase to which they agree; and a certificate of such action of the corporation shall be filed with the secretary of state.

L. 141.

90 0.

Agreement to take shares of increase stock may be enforced, though whole stock never taken. Clarke v. Thomas, 34 Ohio St. 46.

When irregularities in proceedings to increase stock will not defeat action on subscription. Ib.

Court may order receiver to collect such proportion of subscription as is necessary to pay debts. Ib.

§ 3263. May increase stock by preferred stock

Upon the assent, in writing, of three-fourths in number of the stockholders of any company, representing at least three-fourths of the capital stock of the company, the company may issue and dispose of preferred stock, and may stipulate that the holders of such stock shall be entitled to a dividend not exceeding six per centum per annum, out of the annual profits of the company, in preference to all other stockholders, and that they may convert such preferred stock into common stock of the company at their election; and upon any such increase of stock, a certificate shall

be filed with the secretary of state, as provided in the preceding section.

71 v. 69, §§ 1, 2.

Holders of preferred stock are liable under statutory liability. R. R. Co. v. Smith, 48 Ohio St. 219.

Under the act of March 25, 1870, holders of "preferred stock," so called, were held not to be stockholders, but preferred creditors. Burt v. Rattle, 31 Ohio St. 116.

§ 3264. Reduction of capital stock

The board of directors of any such corporation may, with the written consent of the persons in whose names a majority of the shares of the capital stock thereof stands on the books of the company, reduce the amount of its capital stock and the nominal value of all the shares thereof, and issue certificates therefor; but the rights of creditors shall not be affected or impaired thereby; and a certificate of such action shall be filed with the secretary of state. S3 v. 134.

§ 3265. Change of bonds authorized

A corporation which has lawfully issued, or may hereafter lawfully issue, its registered or coupon bonds, may, upon the request of the holder thereof, change such registered bonds into coupon bonds, or such coupon bonds into registered bonds, either by substitution, or proper indorsement thereon; and all liens, securities, and rights which existed or accrued to such original bonds shall continue to such substituted or indorsed bonds, the same as if such substitution or indorsement had not been made. 73 V. 123, § 1, 2.

§ 3266. Property to be employed only for objects of corporation

No corporation shall employ its stocks, means, assets, or other property, directly or indirectly, for any other purpose whatever than to accomplish the legitimate objects of its creation. 274, 73; S. & C. 309.

50 v.

Bill or note made or received by a corporation is prima facie within its corporate powers. Straus v. Eagle Ins. Co., 5 Ohio St. 59.

One incorporated company cannot subscribe to stock of another company. Ry. Co. v. Iron Co., 46 Ohio St. 44.

Foreign corporations may do business in this state through principles of comity. Petroleum Co. v. Weare, 27 Ohio St. 343; Telegraph Co. v. Mayer, 28 Ohio St. 522; Lewis v. Bank of Kentucky, 12 Ohio, 132. And may sue

and be sued here same as in the states where they were created. Smith v. Sewing Machine Co., 26 Ohio St. 562. And as to jurisdiction of federal courts, foreign corporations are regarded as citizens of the states in which they are organized. Shelby v. Hoffman, 7 Ohio St. 451; Railroad Co. v. Corry, 28 Ohio St. 208.

Foreign corporation may take real estate in Ohio by devise, although disabled to do so in its home state. Am. Bible Soc. v. Marshall, 15 Ohio St. 537

Foreign corporation may be ousted by proceedings in quo warranto from exercising its franchises in contravention of the laws of this state. State v. W. U. M. Life Ins. Co., 47 Ohio St. 167; State v. Ins. Co., 49 Ohio St. 440. Where a corporation organized under a special act, with capital stock, but not for profit and having made no profits, issued certificates of "shares of the real estate property of the college, drawing an interest of six per cent:" Held, that an action for a money judgment for interest on such shares is not maintainable, the only property of the corporation being indispensable to its existence. Ohio College, etc., v. Rosenthal, 45 Ohio St. 183.

§ 3267. Change in number of directors

A company may, by a vote of a majority of its stock, at any regular meeting of the company, increase the number of directors to any number not greater than fifteen, or decrease the number before or after such increase to any number not below five; provided, that at any stockholders' meeting, called in the manner and as provided in section three thousand two hundred and fortysix, and notice of which has been given in accordance with the provisions thereof, any corporation, incorporated for manufacturing purposes, may, by a vote of a majority of its stock, increase the number of its directors as hereinbefore provided, who shall hold their offices respectively until the next annual election for directors, and until their successors are elected and qualified. 83 O. L. 163.

§ 3268. Annual statement

Every corporation organized under the laws of this state shall make a statement annually of its financial condition, setting forth its assets and liabilities, and shall furnish to each stockholder a true copy of the same, together with a list of the stockholders thereof and their place of residence.

§ 3269. When provisions of this chapter do not apply— The provisions of this chapter do not apply when special provision is made in the subsequent chapters of this title, but the