Corporation—Stock Issued in Payment op Property—Conspiracy.— It is within the power of a corporation to issue all of its stock in payment of .property conveyed to it, and no illegal or fraudulent conduct is shown in such a transaction, on the parts of the grantors, by merely designating the transfer as the outcome of a conspiracy.

Id.—Fraudulent Representations by Stockholders to Purchasers— Wrong Against Corporation.—Fraudulent representations by the holders of the stock in a corporation, made for the purpose of inducing the public to purchase it, to the effect that the stock was treasury stock and that the proceeds of its sale would go into the treasury of the company and be used in developing its properties, do not constitute a wrong against the corporation, which could be made the basis of an action by a stockholder suing on its behalf. The right of the individual stockholder thus defrauded is simply the right to proceed against the wrongdoers who had made the fraudulent representations to his injury.

Id.—Injuries to Corporation—Action by Stockholder on Behalf of Corporation—Accounting—-Fraud.—Stockholders of a corporation, who in pursuance of a conspiracy between themselves and by means of a control of the corporation by a dummy directorate, caused false dividends to be declared and paid out of the proceeds of the sale of the corporate stock, and false credits to be entered on the company’s books, whereby their individual indebtednesses to the company were made to appear to have been paid and canceled, and who took commissions for the sale of treasury stock without authority from the corporation, and for the purpose of stilling the alarms of the stockholders and lulling them into repose, issued false statements as to the financial condition of the corporation, are guilty of wrongs against the corporation itself, for which an action will lie by a stockholder, suing on behalf of the company, for an accounting and a recovery into the treasury of the company of the amount of which it might be determined that the company had been defrauded.

Id.—Statute of Limitations—Discovery of Fraud,—The provision of the statute of limitations applicable to such action by a stockholder is subdivision 4 of section 338 of the Code of Civil Procedure, providing that actions for relief on the ground of fraud or mistake must be commenced within three years, but that the cause of action is not to be deemed to have accrued until the discovery, by the aggrieved party, of the facts constituting the fraud or mistake.

Id.—Knowledge of Fraud by Other Stockholders not Suing.—The right of a stockholder to maintain such an action on behalf of the corporation, which is commenced timely after the discovery by him I of the facts constituting the fraud, is not affected by the fact that other stockholders had notice of the fraud and failed to bring action within the statutory limitation.

Id.—Stockholder Suing is Trustee—Authority to Compromise Liability to Corporation.—A stockholder who institutes such an action sues purely in a representative capacity and as a trustee to redress corporate injuries. His position in the litigation is similar to that of a guardian ad litem, and he has no authority, without the sanction of the trial court, to enter into a composition agreement with certain of the defendants for the release of their liability to the corporation.

Id.—Costs—Accrued Costs cannot be Charged to Intervener.—In , such action costs which accrued before an intervener connected him-I self with the litigation should not be awarded against him.