WALTCEBi, J.
Provision is made in tliis State for the voluntary dissolution of any private corporation, organized under the general law, at the instance of a majority of the stockholders, owning tliree-fourtbs of the stock. The existence of the corporation may be terminated though there is no ground for vacating its charter or forfeiting its franchises, whether it is solvent or insolvent, and whether it has beensuc-essful or unsuccessful in the business for the prosecution of which it was organized. The law makes it one of the terms of the agreement which binds the stockholders together as a body corporate that the association may be disbanded and the business stopped and wound up whenever a majority of the stockholders, owning three-fourths of the stock, choose to do so, and take the steps prescribed by the statute for the accomplishment of this result. We copy from the Code the sections containing the provisions on this subject: “1683. (2054). Petition for dissolution. — Whenever a majority of the stockholders of any private corporation, owning three-fourths of the stock, wish to dissolve the corporation, they may do so in the following manner. They shall file a petition in the Chancery Court of the division in which the cor[242]*242poration is located, or has its principal place of business, — , setting forth tbe names of all the stockholders and their residences, the amount of stock owned by each stockholder, as nearly as practicable all the property, real and personal, of the corporation, and stating that it is the wish of the petitioners to dissolve the corporation. 1684. (2055.) Notice by register. — Upon the filing of such petition, the register shall give notice by subpoena to all the stockholders not joining in the petition to appear within thirty days after service and contest the same; and if any stockholder residing out of the State does not join in the petition, he shal-be made a party by advertisement in the manner non-resil dent defendants are made parties, and he has thirty days after the perfecting of such notice to answer and contest the petition. 1685. (2056.) When dissolution decreed. — If, at a regular term of the Chancery Court, after the cause is at issue, it be made to appear to the chancellor that a majority of the stockholders wish to dissolve the corporation, proof being made as in chancery cases, the chancellor shall decree the corporation dissolved. 1686. (2057, 2059.) Receiver appointed; his duties. — Upon decree of dissolution, the chancellor shall appoint a receiver of all the property and assets of the corporation. The chancellor shall direct the receiver to collect, by suit or otherwise, all the debts due the corporation, and sell property, real or personal, belonging to the corporation, and how he shall make the title thereto to the purchaser; the chancellor may, in his discretion, authorize the receiver to proceed; without suit, to sell any or all of the debts, and assets of the corporation at public sale for cash, or on such terms as in his judgment the interest of the parties may require. 1687. (2058.) Hoto selected: bond. — The person nominated by the majority of the stockholders must be appointed receiver, if they can agree; but if they fail to agree for ten days after tíre decree of dissolution, the chancellor, in term time or vacation, or the register in his absence, must appoint such receiver, requiring proper bond and sureties for the performances of of his duties. 1688. (2060, 2061.) — Receiver pays debts; contested claims. — In the performance of his duties under the decree, the receiver shall pay the debts of the corporation in full or ratably, as the funds realized may permit. If any claim is contested, it must be filed by the claimant in the court, and the genuineness thereof ascertained as in other contested claims in chancery. The residue, after the debts and costs are paid, shall be divided among the stockholders according to the amount of stock owned by each. [243]*2431689. (2062.) Appeal. — Any party dissatified with tbe decree of dissolution may appeal, giving bond and sureties, as prescribed by tbe chancellor or register.”
A majority of tbe stockholders, owning more than three-fourtlis of the stock, in tbe domestic corporation known as Adams Cotton Mills filed their petition on tbe equity side of tbe City Court of Montgomery, for tbe dissolution of that corporation, under tbe statute above quoted. A single stockholder who did not join in tbe petition was tbe only party defendant thereto. Tbe proceeding was conducted in strict conformity with tbe provisions of tbe statute, and on tbe 5th day of January, 1892, a decree was made dissolving tbe corporation. On the 8th day of January, 1892, W. B. Tanner, who bad been nominated by a majority of tbe stockholders, was appointed receiver; but, it appearing to tbe court that said Tanner bad a lease on tbe property of tbe dissolved corporation, it was provided in tbe decree appointing him receiver that be should not act as receiver or be responsible as such until be should file in tbe court an instrument in writing surrendering all rights as such- lessee, and until be should give bond as provided for in tbe decree.
On tbe 13th day of January, 1892, eight days after tbe date of tbe decree dissolving tbe corporation, tbe trustees in a mortgage or deed of trust alleged to have been made by tbe corporation on tbe 1st day of May, 1889, filed their independent original bill of complaint on the equity side of tbe same court, for tbe execution of tbe trusts of that instrument and for its foreclosure. Tbe corporation itself and its stockholders were named as parties defendant to this bill. Tbe petitioners in tbe dissolution proceeding and tbe same persons as defendants to tbe original bill filed by tbe trustees made a motion in each of those causes to dismiss tbe bill filed by tbe trustees as an independent bill of complaint, that said bill of complaint be treated as a claim filed in tbe dissolution proceeding, and that an order be made that tbe receiver when appointed in tbe dissolution proceeding should examine into tbe claim and contest tbe same if be should see proper to do so. These motions were overruled, and tbe trustees were permitted to proceed with their suit as an independent cause. This action is assigned as error. In support of this assignment, it is contended that, after tbe dissolution of tbe corporation, claims against it can not be enforced by suit against tbe corporation, but, if contested, must be filed by the claimant in tbe dissolution proceeding. A review of tbe ruling on tbe motions above [244]*244mentioned involves a consideration of tbe effect of tbe decree of dissolution, and a determination of tbe proper mode of enforcing claims against tbe dissolved corporation.
Tbe dissolution of a corporation implies its utter extinction and obliteration as a body capable of suing or being-sued, or in whose favor obligations exist or upon wbicb liabilities are imposed. For all legal purposes tbe dissolution is tbe death of tbe corporation; thereafter, it is a mere non-entity. Tbe effect at common law was that its real estate remaining unsold reverted to the original grantor or bis heirs, its personal estate went to tbe crown, or to tbe State in this country, and tbe debts due to and from it were totally extinguished. — Paschall v. Whitsett, 11 Ala. 472 ; Saltmarsh v. P. & M. Bank, 14 Ala. 668. Such is tbe effect at law, where only legal rights or titles are recognized. But courts of equity regard a business corporation as bolding tbe legal title to its property in trust for its stockholders and its creditors. Equity treats its property as appropriated and devoted to certain purposes, to which it is to be applied though tbe existence of tbe corporation itself is terminated, and legal remedies against it are extinguished. Tbe rights of those who are beneficially interested in tbe property of tbe corporation survive and are enforced, though tbe artificial being in wbicb tbe legal title is vested passes out of existence. It is plain, upon a consideration of tbe real nature and object of tbe corporate association, that its property is held and used in its business for tbe ultimate profit or advantage, not of tbe corporation itself, but of those who as stockholders have embarked their means in tbe enterprise; and that tbe reliance of those who have demands against it is not upon tbe responsibility of tbe mere legal entity in tbe name of wbicb tbe business is transacted, but upon tbe material resources wbicb are pledged for tbe satisfaction of tbe liabilities wbicb may be incurred in its name. A court of equity sees to it that tbe property is applied to tbe purposes to wbicb it was devoted, though tbe agency wbicb was specially provided for the execution of the trust has been totally destroyed. Tbe trust is not allowed to fail for tbe want of a trustee. — Murnma v. Patomac Co., 8 Pet. (U. S.), 281; Curran v. Arkansas, 15 How. (U. S.), 311; Broughton v. Pensacola, 93 U. S. 266; 2 Morawetz on Private Corporations, §§ 1032, et séq.; 4 Am. & Eng. Encyc. of Law, 306. In Broughton v. Pensacola, supra, it was said: “Tbe ancient doctrine that, upon tbe repeal of a private corporation, its debts were extinguished, and its real property reverted to its grantors, and its personal property [245]*245Tested in tlie State, lias been so far modified by modern adjudications, that a court of equity will now lay bold of tbe property of a dissolved corporation, and administer it for tbe benefit of its creditors and stockholders. Tbe obligation of tbe contracts, made whilst tbe corporation was in existence, survives its dissolution; and tbe contracts may be enforced by a court of equity, so far to subject, for their satisfaction, any property possessed by tbe corporation at tbe time. In view of “equity, its property constitutes a trust fund pledged to tbe payment of tbe debts of creditors and stockholders.”
Upon tbe dissolution of a corporation, unless some statute regulates tbe succession to its property and prescribes tbe mode of administering upon its assets and winding up its' affairs, recourse must be bad, for tbe protection of the rights of creditors and stockholders, to tbe ordinary and established remedies of courts of equity for the enforcement of trusts upon property which is left without a trustee entitled to bold and dispose of it. In such case tbe defunct corporation itself could no more be proceeded against, than could a dead man in reference to obligations incurred by him in bis life-time. Frequently, under statutes on tbe subject, tbe dissolution of a corporation is effected in such a way that, after all its powers of carrying on tbe business for which it was chartered are withdrawn, its life is yet preserved for a defined period for tbe purpose of prosecuting and defending suits and settling its affairs. But such prolongation of tbe existence of the corporation, after its dissolution in a mode authorized by law, can not be recognized unless it is specially provided for by legislative enactment. Tbe dissolution of a corporation works an abatement of suits then pending against it, and presents an insuperable impediment to tbe institution of new suits against it, unless some clear statutory provision prevents tbe termination of its existence, for the purposes of its organization, from having this effect. — Saltmarsh v. P. & M. Bank, 17 Ala. 761; National Bank v. Colby, 21 Wal. 609 ; Nevitt v. Bank of Fort Gibson, 6 S. &M. (Miss.), 513; Harvemeyer v. Superior Court, 18 Amer. St. Rep. 192-211.
. There is a provision in our statutes for tbe prolongation of tbe corporate existence in certain cases and for certain specified purposes. Section 1690 of tbe Code, which immediately follows tbe provisions above quoted in reference to tbe voluntary dissolution of corporations, is in these words : “All corporations whose powers expire by limitation, all which are dissolved by forfeiture or any other cause, exist [246]*246as bodies corporate for the term of five years after such dissolution, for the purpose of prosecuting or defending suits, settling their business, disposing of their property, and dividing their capital stock, but not for the purpose of continuing their business.” The question now presented is : Does this provision apply in the case of a corporation which has been dissolved at the instance of a majority of its stockholders, under the provisions of the preceding sections, which have already been copied into thil opinion ?
There is some plausibility in the suggestion that a corporation which has been dissolved by the voluntary action of its stockholders is not within the terms of the section last copied, as its powers did not expire by limitation, and it was not dissolved by forfeiture, and it can not properly be regarded as dissolved for “any other cause,” when its dissolution is brought about by the mere wish of a majority of its stockholders expressed in the manner prescribed by the statute. The statute does not, however, seem to require that a corporattion, to come within the class last mentioned, must have been dissolved “for cause.” We think that on a fair interpretation of the language of the first part of the section, if not read in connection with what follows, the 'enumeration is so expressed as to include all corporations which have been dissolved in any manner whatsoever. But in the latter part of the section the purposes to subserve which the existence of the enumerated classes of corporations is extended are clearly expressed. They are kept alive solely “for the purpose of prosecuting or defending suits, settling their business, disposing of their property, and dividing their capital stock.” Could this provision have been intended to apply to the case of a corporation which has been dissolved under a law which clearly provides for the accomplishment of all the purposes mentioned by an agency other than the corporation itself? That is the case of a corporation which is dissolved at the instance of a majority of its stockholders, pursuant to the provisions of the preceding sections of the same chapter of the Code. To the receiver, who must be appointed in such case when the dissolution is decreed, are entrusted the duties and powers of prosecuting suits or claims in favor of the corporation, of collecting claims against it, of settling its business, of disposing of its property, and of dividing its capital stock. — -Code, §§ 1686-1688, copied above. The provisions for the accomplishment of all these purposes by the receiver, acting under the orders of the court in the dissolution proceeding, involve the withdrawal from the corpora[247]*247tion itself of the right to do the samé thing. The performance by the corporation, after the decree of dissolution, of the functions mentioned in section 1690, can not be reconciled with the exercise by a receiver appointed under the preceding sections of the powers plainly conferred upon him.. The several sections are, if possible, to be so construed as not to conflict in their provisions. There is a field for the operation of section 1690 in all cases where the law does not specially provide for the termination of the right of a corporation to continue business under its charter having the effect of devolving upon some other agency the power and duty of prosecuting and defending claims in favor of and against it, and of winding up its affairs in other respects. But that general provision does not apply when all the purposes of its enactment, as expressed upon its face, are specially provided for otherwise. The conclusion is, that a corporation which has been dissolved- under the preceding sections no longer exists for the purposes mentioned in the latter section. It can no longer sue or be sued, as its powers in this regard have been surrendered, and must be conferred upon another.
The statute under which the corporation in question, Adams Ootton Mills, was dissolved, supplies a complete scheme, or system of procedure, for the winding up of its affairs. This statute does not purport to undo the valid acts of the corporation while it was in existence, to disturb its previous dispositions of property, or to impair the obligation of contracts into which it had entered. On the contrary, it specially provides for the devolution of its property, and charges the trustee, to whom the administration of its assets, under the orders of the court, is confided, with the duty of applying them to the purposes to which, according to rules already recognized in couts of equity, the a.ssets of dissolved corporations should be applied. A statute providing for the voluntary dissolution of corporations, and for the administration of their assets for the benefit of their creditors and stockholders, can not be regarded as impairing the obligations of their contracts. This is obviously true as to contracts which were made while such statute was in force. Persons dealing with the corporation are to be regarded as doing so in contemplation of the possibility that the corporation may at any time be dissolved in the mode authorized by the statute. The statute provides for such a contingency as fully as if it had been specified in the contract itself as one of its conditions. In such case, one to whom the corporation is bound by contract has no more right to complain [248]*248of its dissolution in tbe mode prescribed by tbe statute tban be would have to complain of tbe death of a natural person wbo was bis debtor. And, wben be desires to enforce bis demands by suit, be is as mucb bound to take notice of tbe dissolution of tbe corporation and to proceed in tbe mode prescribed by tbe statute to subject its assets to tbe satisfaction of bis claim, as be would be to take notice of tbe death of bis individual debtor and to proceed against bis estate in tbe manner tbe law directs. Tbe prolongation of tbe existence of tbe corporation, after its right to continue its regular business is terminated, with only such powers as are necessary to enable it to wind up its own affairs; tbe imposition upon the persons wbo were the managers of tbe corporation at tbe time of its dissolution of tbe power and duty of collecting its assets and settling up its business; and tbe appointment of a receiver, wbo must, under tbe orders of tbe court, administer upon tbe estate of tbe defunct institution — -are merely different methods of doing tbe same thing. "Whether a statute adopts one or another of such methods, it merely recognizes the rights of creditors and stockholders, of which, prior to such statute, only courts of equity took cognizance, and provides a new remedy for their enforcement in a manner perhaps more efficacious tban was Possible under tbe ordinary rules of chancery procedure. ucb statutes do not impair tbe obligation of contracts, or disturb vested rights; and tbe remedy which tbe statue prescribes for a particular class of cases must be pursued in such cases, as tbe statutory remedy must be considered as superseding and substituted for all others directed to tbe same end.— Von Glahn v. De Rossel, 81 N. C. 467; Mobile & Ohio Railroad Co. v. State, 29 Ala. 573; People v. O’Brien, 111 N. Y. 1; 7 Am. St. Rep. 684, and note; Thompson v. Marginal Freight Railway, 123 Mass. 32; Foster v. Essex Bank, 16 Mass. 245; 2 Morawetz on Corps. § 1036, et seq.; 4 Amer. & Eng. Encyc. of Law, 307.
What has been said above leads to tbe conclusion that tbe bill filed by tbe trustees in the mortgage or deed of trust could not be maintained against the corporation itself after its dissolution. Tbe claim thereby set up could be asserted and enforced only in tbe dissolution proceeding. It is not denied that tbe powers conferred upon tbe trustees by tbe instrument could be exercised by them after tbe dissolution of tbe corporation, if like powers granted by an individual could have been exercised by bis donees after bis death. But judicial proceedings against tbe estate of tbe dissolved, corporation must follow the course prescribed by [249]*249the statute for suob oases. Tlie court should have treated the bill as a claim filed in tlie dissolution proceeding, as it must be so treated to be regarded as properly presenting tbe claim sought to be enforced. The failure of the person nominated by the majority of the stockholders to accept the appointment and to qualify as receiver did not lessen the effect of the decree of dissolution in terminating the existence of the corporatian. The affairs of the defunct corporation remained to be administered under the orders of the court in the dissolution proceeding. One person having-declined to accept the trust, it was the duty of the court to appoint some one else receiver.
Though the questions as to the validity of the mortgage or deed of trust and of the right of the trustees therein named, on the facts alleged by them, to demand a foreclosure of that instrument, are raised in the name of a corporation which has been dissolved; yet, as those questions must be determined in the contest between the parties who are before the court, they will be briefly considered.
It is alleged that the issue of the bonds and mortgage was authorized by a resolution adopted “at a meeting of the stockholders of said company, held for that purpose, at its office and principal place of business at its mills, after thirty days notice of the time, place and purpose of the meeting given to each stockholder personally and by publication for thirty days in the Montgomery Advertiser, a newspaper published in said city of Montgomery.” T.he publication of the thirty days notice prescribed by the statute must be “for four consecutive weeks in the newspaper published nearest to the place of business of the corporation.”' — Code, §§ 1562 and 1664. A publication for thirty days may be by insertions of the notice in the newspaper “for four consecutive weeks.” The allegation above quoted does not show in what manner the publication for thirty days was made. It certainly does not show that the publication was not made “for four consecutive weeks.” In the absence of allegations to the contrary, the execution of the mortgage, as it presupposes the giving of the notice as directed by the statute, is presumptive proof that the requisition of the statute in that regard was complied with. The omission of such prerequisite is defensive matter. It was not necessary to allege affirmatively that the publication was “for four consecutive weeks.” — Arrington v. Sav. & W. R. Co., 95 Ala. 434; Thorington v. Gould, 59 Ala. 461.
The corporation in question had the power “to borrow money, and to mortgage, or otherwise convey or pledge its [250]*250property, real or personal, and its franchises, to secure tlie payment of the money so borrowed, or any other debt contracted by it.” — Code, §§ 1562 and 1664. This power was subject to the condition prescribed by the fundamental law that “no corporation shall issue stock or bonds, except for money, labor done, or money or proper^ actually received ; and all fictitious increase of stock or indebtedness shall be void.” — Const. Ala. Art. XIY, § 6. The statutory provisions governing subscriptions for stock in business corporations and the mode of paying such subscriptions are such as to require that the amount subscribed thall be paid in money, when, by the terms of the subscription, no privilege is reserved of discharging the same by the rendition of stipulated necessary services, or the performance of stipulated necessary labor for the corporation, or in property which the corporation has the capacity to acquire and hold; or, when such privilege is reserved, in services, labor, or property of a value to correspond with the amount subscribed; and the creditors of the corporation have such an interest in the subscriptions as to entitle them, for the enforcement of their claims, to demand a 'bom fide compliance with the terms of the contracts of subscription. — Code, §§ 1560, 1561, 1662, 1663; Elyton Land Co. v. Birmingham Warehouse & Elevator Co., 92 Ala. 467. The constitutional provision, standing by itself, does not require that the amount of money, or the value of the labor or property, for which stock or bonds are issued, shall correspond with the face value of the stock or bonds for which it is issued. It is the statute, reinforcing the- constitutional provision, which requires such correspondence in value in the case of subscriptions for stock. In the absence of such statutory provisions, the section of the Constitution above quoted would be conrplied with, in the case of stock, which was not a fictitious increase, but was issued for money, labor done, or money or property actually received. In the case of bonds, there is not, as there is in the case of stock subscribed, any statutory provision requiring the value of the consideration received by the corporation to correspond with the amount, or nominal or face value, of the bonds issued therefor. Such bonds are not issued in contravention of the provision contained in the first sentence of the above mentioned section of the Constitution, if the issue does not effect a “fictitious increase of indebtedness,” and if they can properly be regarded as issued “for money, labor done, or money or property actually received.” The constitutional provision in question operates to invalidate evidences of indebtedness when there is in fact no debt; to [251]*251require every issue of stocks or bonds of private corporations to represent substantial values received by tbe corporations; to impose upon those charged with the disposition of corporate securities the duty to procure therefor a fair and reasonable equivalent in money, labor or property actually contributed to the corporation. Courts of the highest authority, which have considered the effect of such provisions, have not construed them, when not fortified by more stringent statutory requirements, as invalidating issues of stocks and bonds in exchange for money, property or labor, upon such terms as the corporate authorities, in the fair exercise of their judgment and discretion, may deem proper, though the amount received therefor was less than the face value of the securities. The negotiation of bonds must be a real transaction carried through to promote legitimate corporate purposes, and not a mere trick or device to evade the law and impose greater obligations upon the corporation than there is any occasion for it to assume in order to obtain the consideration received thereof. Issues of stocks and bonds have been sustained under constitutional or statutory provisions of the same import as the one under consideration, when they were disposed of for the best price that could be obtained, though for considerably less than their face value. — Memphis & Little Rock R. Co. v. Dow, 120 U. S. 287; Peoria & Springfield R. Co. v. Thompson, 103 Ill. 187; Stein v. Hoiuard, 65 Cal. 616; Handley v. Stutz, 139 U. S. 417; Clark v. Bever, Ib. 96; Fogg v. Blair, Ib. 118. The power “to borrow money, and to mortgage, or otherwise convey or pledge its property, real or personal, and its franchises, to secure the payment of the money so borrowed, or any other debt contracted by it,” includes the power to pledge the bonds of the corporation, secured by its mortgage on property, as collateral security for debts of the corporation presently created or already owing. — In re Tallassee Man. Co., 64 Ala. 567; Duncomb v. N. Y. H. & N. R. Co., 84 N. Y. 190; 1 Morawetz on Corporations, § 349. And we do not think that such pledge, if made without fraud, and solely for the bona fide purpose of satisfactorily securing the payment of corporate debts, can properly be regarded as effecting a fictitious increase of indebtedness or as not issued for money, labor done, or money or property actually received, though the amount of the bonds pledged exceeds the amount of the indebtedness to be secured.
The same section of the State Constitution further provides that “the stock and bonded indebtedness of corporations shall not be increased, except in pursuance of general [252]*252laws, nor without the consent o'! the persons holding the larger amount in value of stock, first obtained at a meetiug to be held after thirty days notice is given in pursuance of law.” The general statutes authorize the increase of stock and bonded indebtedness, and establish definite requirements as to the mode of giving the thirty days notice to the stockholders. — Code, §§ 1562,1372, 1664 and 1667. The language of the constitutional provision requiring the giving of such notice indicates that the provision was intended for the benefit of stockholders and to secure them against any impairment of the value of their interests in the corporation, by the increase of its stock or bonded indebtedness, otherwise than with the consent of those holding the larger amount in value of the stock, expressed at a meeting of which, and of the purpose thereof, each stockholder shall have had notice for such length of time as to afford him full opportunity for deliberation. The thing to be insured is that such corporate acts shall be done only with the deliberate consent of the persons interested in the corporations as its stockholders, all of whom shall have the opportunity to object. If such consent is obtained, no one else has the right to complain of the increase of the stock or bonded indebtedness. No purpose is disclosed to have these provisions serve the end of securing the giving of notice to the public generally, or to persons dealing with corporations, of the enlargement of the interests therein represented by issues of stock, or of incumbrances upon their property. Other provisions secure publicity to the fact that a corporation has been authorized to increase its capital stock. And general laws, applicable alike in the cases of corporations and of individuals, protect persons dealing with them against incumbrances on their property of which there is not notice, either actual or. constructive. The view generally accepted by other courts, which have had occasion to determine the effect of similar provisions for notice to stockholders of a proposed increase of stock or bonded indebtedness, is that the only object of the prescribed notice is to inform the shareholders, and to afford them the opportunity of protecting their interests by demanding a compliance with the prescribed formalities. It has, accordingly, been held that the persons for whose protection the formalities are prescribed may waive a compliance therewith, and consent that the corporation be bound by acts informally done. In other words, there can be no complaint by others, when the stockholders themselves acquiesce in the disregard of formalities prescribed for their [253]*253benefit alone. — Beecher v. Marquette Bolling Mill Co., 45 Mich. 103; Manhattan Hardware Co. v. Phalen, 128 Pa. St., 110; Wood v. Corry Water Works, Co., 44 Fed. Rep., 146; Thomas v. Citizens Horse R’wy. Co., 104, Ill. 462 ; 2 Morawetz on Priv. Corp. § 635. The general law of Michigan under which a manufacturing company was incorporated contained a provision that no alienation, diversion, sale or mortgage of any part of the real estate of any company formed under the act should “have any force or effect, or pass any title thereto, or interest therein, unless expressly authorized by vote of tliree-fifths in interest of the entire stock ‘of said company,” at a meeting called in a designated manner, and of which the stockholders were to have a prescribed notice. In Beecher v. Marquette Rolling Mill Co., supra, it was held, that a mortgage which had not been expressly authorized by a meeting of the stockholders called in the prescribed manner was valid, the stockholders having waived the irregularity. Cooley, J. said: “The statute under consideration was passed to protect the interests of stockholders in mining companies. It intends that their, mining property shall not be conveyed away or mortgaged except by their deliberate action after they have been notified of a proposal to do so, and have had the time to deliberate upon and fully consider it. But the matter does not concern the public at large; no principle of public policy is at stake; no wrong, direct or indirect, is done to any human being if a conveyance is made or mortgage given without the exact notice required, unless it be a wrong to the stockholders themselves. And as others are not concerned, why should the statute give them the right to raise questions of regularity which the stockholders elect to waive ? We are satisfied such was not its purpose. . . . The corporators may possibly have had a right to take advantage of the exact words of the statute, repudiate their action, and treat the mortgage as of no force and effect, but they had an equal right to treat it as effective and valid. They have chosen the latter course, and this is conclusive upon the corporation, and upon any one claiming under it.” We think that acts done in disregard of such formalities when prescribed may be avoided at the instance of any stockholder who has not waived the right to raise such an objection. But when all those persons whose interests can be protected by the giving of the prescribed notice deliberately waive the benefit of the provision, all reason for requiring a compliance with it is removed.
The allegations in the present case clearly show that the [254]*254pledge of tbe bonds and tbe manner in wbicb tbe pledge was made were witb tbe knowledge and consent and at tbe instance of all tbe persons baying any beneficial interest in tbe corporation as stockholders thereof; and that this disposition of tbe bonds was solemnly ratified by them witb full knowledge of tbe facts. In these circumstances, tbe pledge is binding, though it was not authorized by tbe terms of tbe resolution adopted at tbe meeting of tbe stockholders of wbicb, and of tbe purpose thereof, notice bad been given in tbe manner directed by tbe statute.
On tbe foreclosure of the mortgage securing tbe bonds pledged, the' pledgee has no claim upon that part of tbe proceeds of the sale of tbe mortgaged property wbicb is left after applying a sufficiency thereof to tbe satisfaction of tbe debt secured by tbe pledge.
By tbe terms of tbe mortgage or deed of trust tbe trustees are authorized, upon such default as is therein mentioned in tbe payment of tbe principal or interest on tbe bonds secured, to take possession of tbe mortgaged property and to use and operate tbe factory, and, upon the sale of tbe property, to be reimbursed from tbe proceeds of tbe sale for all expenses, advances or liabilities incurred in operating or maintaining tbe factory and premises, or in managing tbe business while in possession thereof. Tbe provisions referred to secured a property right or interest wbicb survived tbe dissolution of tbe corporation. They- authorize tbe trustees to borrow money necessary to preserve, protect and operate tbe property. It would be competent for tbe court to direct tbe exercise of this power under its orders.
Tbe parties beneficially interested in tbe contract evidenced by tbe mortgage are tbe corporation as tbe mortgagor and tbe holders of tbe bonds secured by tbe mortgage. Tbe duties and powers of tbe trustee are fixed by tbe terms of tbe deed, and, as thus fixed, are to be exercised in behalf of tbe cestuis que trustent, who are tbe bondholders. Tbe provisions of tbe instrument enure to tbe benefit of all tbe bondholders alike. There can be no change in tbe terms of tbe contract, without tbe consent of all who are to be considered as parties thereto. It is not to be supposed that any prudent man would buy a bond in tbe market if tbe provisions of tbe instrument for its security could be altered without bis consent. Tbe corporation can not confer or take away, and tbe trustees can not acquire or surrender, any powers involving a change in tbe terms of tbe mortgage, without tbe consent of all persons for whose security it [255]*255stands. All tbe bonds issued under tbe mortgage were not pledged to tbe bank Some of them have been negotiated or disposed of to other persons. Tbe terms of tbe mortgage could not be changed without tbe consent of such other persons. No alterations in tbe conditions constituting a default authorizing a foreclosure could be effected by an arrangement between the mortgagor and tbe bolder of only a portion of tbe issue of bonds. Such attempted arrangement could confer no additional power on tbe trustees. The objection suggested by tbe 17th ground of demurrer was well taken.
Tbe decree of tbe City Court, rendered in tbe two causes considered together, must be reversed, and tbe cause will be remanded for further proceedings in conformity with this opinion. Tbe costs will be taxed against tbe trustees in tbe mortgage or deed of trust.
Reversed and remanded.