TITLE 8

Corporations

CHAPTER 1. GENERAL CORPORATION LAW

Subchapter XIII. Suits Against Corporations, Directors, Officers or Stockholders


(a) Service of legal process upon any corporation of this State shall be made by delivering a copy personally to any officer or director of the corporation in this State, or the registered agent of the corporation in this State, or by leaving it at the dwelling house or usual place of abode in this State of any officer, director or registered agent (if the registered agent be an individual), or at the registered office or other place of business of the corporation in this State. If the registered agent be a corporation, service of process upon it as such agent may be made by serving, in this State, a copy thereof on the president, vice-president, secretary, assistant secretary or any director of the corporate registered agent. Service by copy left at the dwelling house or usual place of abode of any officer, director or registered agent, or at the registered office or other place of business of the corporation in this State, to be effective must be delivered thereat at least 6 days before the return date of the process, and in the presence of an adult person, and the officer serving the process shall distinctly state the manner of service in such person's return thereto. Process returnable forthwith must be delivered personally to the officer, director or registered agent.

(b) In case the officer whose duty it is to serve legal process cannot by due diligence serve the process in any manner provided for by subsection (a) of this section, it shall be lawful to serve the process against the corporation upon the Secretary of State, and such service shall be as effectual for all intents and purposes as if made in any of the ways provided for in subsection (a) of this section. Process may be served upon the Secretary of State under this subsection by means of electronic transmission but only as prescribed by the Secretary of State. The Secretary of State is authorized to issue such rules and regulations with respect to such service as the Secretary of State deems necessary or appropriate. In the event that service is effected through the Secretary of State in accordance with this subsection, the Secretary of State shall forthwith notify the corporation by letter, directed to the corporation at its principal place of business as it appears on the records relating to such corporation on file with the Secretary of State or, if no such address appears, at its last registered office. Such letter shall be sent by a mail or courier service that includes a record of mailing or deposit with the courier and a record of delivery evidenced by the signature of the recipient. Such letter shall enclose a copy of the process and any other papers served on the Secretary of State pursuant to this subsection. It shall be the duty of the plaintiff in the event of such service to serve process and any other papers in duplicate, to notify the Secretary of State that service is being effected pursuant to this subsection, and to pay the Secretary of State the sum of $50 for the use of the State, which sum shall be taxed as part of the costs in the proceeding if the plaintiff shall prevail therein. The Secretary of State shall maintain an alphabetical record of any such service setting forth the name of the plaintiff and defendant, the title, docket number and nature of the proceeding in which process has been served upon the Secretary of State, the fact that service has been effected pursuant to this subsection, the return date thereof, and the day and hour when the service was made. The Secretary of State shall not be required to retain such information for a period longer than 5 years from receipt of the service of process.

(c) Service upon corporations may also be made in accordance with § 3111 of Title 10 or any other statute or rule of court.

8 Del. C. 1953, § 321; 56 Del. Laws, c. 50; 64 Del. Laws, c. 112, § 57; 67 Del. Laws, c. 190, § 7; 71 Del. Laws, c. 339, §§ 65, 66; 77 Del. Laws, c. 290, § 27.;

Whenever any corporation shall refuse, fail or neglect to obey any order or decree of any court of this State within the time fixed by the court for its observance, such refusal, failure or neglect shall be a sufficient ground for the appointment of a receiver of the corporation by the Court of Chancery. If the corporation be a foreign corporation, such refusal, failure or neglect shall be a sufficient ground for the appointment of a receiver of the assets of the corporation within this State.

8 Del. C. 1953, § 322; 56 Del. Laws, c. 50.;

If any corporation fails to obey the mandate of any peremptory writ of mandamus issued by a court of competent jurisdiction of this State for a period of 30 days after the serving of the writ upon the corporation in any manner as provided by the laws of this State for the service of writs, any party in interest in the proceeding in which the writ of mandamus issued may file a statement of such fact prepared by such party or such party's attorney with the Attorney General of this State, and it shall thereupon be the duty of the Attorney General to forthwith commence proceedings of quo warranto against the corporation in a court of competent jurisdiction, and the court, upon competent proof of such state of facts and proper proceedings had in such proceeding in quo warranto, shall decree the charter of the corporation forfeited.

8 Del. C. 1953, § 323; 56 Del. Laws, c. 50; 71 Del. Laws, c. 339, § 67.;

(a) The shares of any person in any corporation with all the rights thereto belonging, or any person's option to acquire the shares, or such person's right or interest in the shares, may be attached under this section for debt, or other demands, if such person appears on the books of the corporation to hold or own such shares, option, right or interest. So many of the shares, or so much of the option, right or interest therein may be sold at public sale to the highest bidder, as shall be sufficient to satisfy the debt, or other demand, interest and costs, upon an order issued therefor by the court from which the attachment process issued, and after such notice as is required for sales upon execution process. Except as to an uncertificated security as defined in § 8-102 of Title 6, the attachment is not laid and no order of sale shall issue unless § 8-112 of Title 6 has been satisfied. No order of sale shall be issued until after final judgment shall have been rendered in any case. If the debtor lives out of the county, a copy of the order shall be sent by registered or certified mail, return receipt requested, to such debtor's last known address, and shall also be published in a newspaper published in the county of such debtor's last known residence, if there be any, 10 days before the sale; and if the debtor be a nonresident of this State shall be mailed as aforesaid and published at least twice for 2 successive weeks, the last publication to be at least 10 days before the sale, in a newspaper published in the county where the attachment process issued. If the shares of stock or any of them or the option to acquire shares or any such right or interest in shares, or any part of them, be so sold, any assignment, or transfer thereof, by the debtor, after attachment, shall be void.

(b) When attachment process issues for shares of stock, or any option to acquire such or any right or interest in such, a certified copy of the process shall be left in this State with any officer or director, or with the registered agent of the corporation. Within 20 days after service of the process, the corporation shall serve upon the plaintiff a certificate of the number of shares held or owned by the debtor in the corporation, with the number or other marks distinguishing the same, or in the case the debtor appears on the books of the corporation to have an option to acquire shares of stock or any right or interest in any shares of stock of the corporation, there shall be served upon the plaintiff within 20 days after service of the process a certificate setting forth any such option, right or interest in the shares of the corporation in the language and form in which the option, right or interest appears on the books of the corporation, anything in the certificate of incorporation or bylaws of the corporation to the contrary notwithstanding. Service upon a corporate registered agent may be made in the manner provided in § 321 of this title.

(c) If, after sale made and confirmed, a certified copy of the order of sale and return and the stock certificate, if any, be left with any officer or director or with the registered agent of the corporation, the purchaser shall be thereby entitled to the shares or any option to acquire shares or any right or interest in shares so purchased, and all income, or dividends which may have been declared, or become payable thereon since the attachment laid. Such sale, returned and confirmed, shall transfer the shares or the option to acquire shares or any right or interest in shares sold to the purchaser, as fully as if the debtor, or defendant, had transferred the same to such purchaser according to the certificate of incorporation or bylaws of the corporation, anything in the certificate of incorporation or bylaws to the contrary notwithstanding. The court which issued the levy and confirmed the sale shall have the power to make an order compelling the corporation, the shares of which were sold, to issue new certificates or uncertificated shares to the purchaser at the sale and to cancel the registration of the shares attached on the books of the corporation upon the giving of an open end bond by such purchaser adequate to protect such corporation.

(d) The money arising from the sale of the shares or from the sale of the option or right or interest shall be applied and paid, by the public official receiving the same, as by law is directed as to the sale of personal property in cases of attachment.

8 Del. C. 1953, § 324; 56 Del. Laws, c. 50; 59 Del. Laws, c. 106, § 17; 64 Del. Laws, c. 112, § 58; 71 Del. Laws, c. 339, §§ 68-70.;

(a) When the officers, directors or stockholders of any corporation shall be liable by the provisions of this chapter to pay the debts of the corporation, or any part thereof, any person to whom they are liable may have an action, at law or in equity, against any 1 or more of them, and the complaint shall state the claim against the corporation, and the ground on which the plaintiff expects to charge the defendants personally.

(b) No suit shall be brought against any officer, director or stockholder for any debt of a corporation of which such person is an officer, director or stockholder, until judgment be obtained therefor against the corporation and execution thereon returned unsatisfied.

8 Del. C. 1953, § 325; 56 Del. Laws, c. 50; 71 Del. Laws, c. 339, § 71.;

When any officer, director or stockholder shall pay any debt of a corporation for which such person is made liable by the provisions of this chapter, such person may recover the amount so paid in an action against the corporation for money paid for its use, and in such action only the property of the corporation shall be liable to be taken, and not the property of any stockholder.

8 Del. C. 1953, § 326; 56 Del. Laws, c. 50; 71 Del. Laws, c. 339, § 72.;

In any derivative suit instituted by a stockholder of a corporation, it shall be averred in the complaint that the plaintiff was a stockholder of the corporation at the time of the transaction of which such stockholder complains or that such stockholder's stock thereafter devolved upon such stockholder by operation of law.

8 Del. C. 1953, § 327; 56 Del. Laws, c. 50; 71 Del. Laws, c. 339, § 73.;

The liability of a corporation of this State, or the stockholders, directors or officers thereof, or the rights or remedies of the creditors thereof, or of persons doing or transacting business with the corporation, shall not in any way be lessened or impaired by the sale of its assets, or by the increase or decrease in the capital stock of the corporation, or by its merger or consolidation with 1 or more corporations or by any change or amendment in its certificate of incorporation.

8 Del. C. 1953, § 328; 56 Del. Laws, c. 50.;

(a) No corporation of this State and no person sued by any such corporation shall be permitted to assert the want of legal organization as a defense to any claim.

(b) This section shall not be construed to prevent judicial inquiry into the regularity or validity of the organization of a corporation, or its lawful possession of any corporate power it may assert in any other suit or proceeding where its corporate existence or the power to exercise the corporate rights it asserts is challenged, and evidence tending to sustain the challenge shall be admissible in any such suit or proceeding.

8 Del. C. 1953, § 329; 56 Del. Laws, c. 50.;

No corporation shall plead any statute against usury in any court of law or equity in any suit instituted to enforce the payment of any bond, note or other evidence of indebtedness issued or assumed by it.

8 Del. C. 1953, § 330; 56 Del. Laws, c. 50.;