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demands, the creditors need look no further. They are not bound to settle up all the affairs of this corporation, and the equities between its various stockholders, corporators, or debtors. If A. is bound to pay his debt to the corporation in order to satisfy its creditors, he cannot defend himself by pleading that these complainants might have got their satisfaction out of B. as well. It is true, if it be necessary to a complete satisfaction of the complainants that the corporation be treated as an insolvent, the court may appoint a receiver, with authority to collect and receive all the debts due to the company, and administer all its assets. In that way all the other stockholders or debtors may be made to contribute.” The court, therefore, directed a decree against the respondents severally for such amounts as appeared to be due and unpaid by each of them for their shares of the capital stock.
This case is directly in point, and it does not stand alone. In Bartlett v. Drew (57 N. Y. 587), it was ruled that when the property of a corporation had been divided amongst its stockholders before all its debts had been paid, a judgment creditor, after the return of an execution unsatisfied, might maintain an action, in the nature of a creditor's bill, against a stockholder to reach whatsoever was so received by him, and that he was not required to make all the stockholders parties to the action ; that he had nothing to do with the equities between the stockholders, unless he chose to intervene to settle them. This is much beyond what the complainant needs in this case. It is enforcing against stockholders in severalty what the corporation could not enforce, without any regard to the equities of one against the others.
So in Pierce v. The Milwaukee Construction Co. (38 Wis. 253), which was a proceeding analogous to a creditor's bill, and brought to enforce payment to a judgment creditor of the company of unpaid subscriptions to its capital stock, it was ruled that the complaint was not bad because all the stockholders were not made defendants. This, it is true, was a proceeding under a statute, but it was a statute enacting substantially this equity rule.
In Marsh v. Burroughs (1 Wonds, 468), a bill of certain creditors who had recovered judgments against a bank, to
recover from some stockholders who had not paid in full their subscriptions, non-joinder of parties was set up in defence. · Mr. Justice Bradley said: “ A judgment creditor who has
exhausted bis legal remedy may pursue in a court of equity any equitable interest, trust, or demand of his debtor, in whosesoever hands it may be. And if the party thus reached has a remedy over against other parties for contribution or indemnity, it will be no defence to the primary suit against him that they are not parties. If a creditor were to be stayed until all such parties could be made to contribute their proportionate share of the liability, he might never get his money.”
The case of Wood v. Dummer (3 Mas. 308), upon which the appellants largely rely, was not an attempt to reach unpaid stock subscriptions. It was sought to follow the property of a corporation paid over to its shareholders before its debts were paid. But even in that case the bill was sustained, though all the shareholders were not made defendants. Those not sued appear to have been treated only as convenient, not as necessary parties.
The cases of Pollard v. Bailey (20 Wall. 520) and Terry v Tubman (92 U. S. 156) are not in conflict with Ogilvie v. Knox Insurance Company. They arose under statutory provisions imposing upon the stockholders of banks a liability for the debts of the corporation, “ in proportion to their stock held therein.” It was this liability beyond the stock subscription which was sought to be enforced, and as it was only a proportional liability, its extent could be ascertained only when the obligation of the other shareholders was taken into consideration. Hence it was ruled that the proper mode of proceeding was by bill in equity in which an account of the debts and stock could be taken and a pro rata distribution could be made. Not a hint was given that the latter case was intended to be questioned or qualified. Indeed, Pollard v. Bailey and Terry v. Tubman have little analogy to it, or to the case we have now before us. They were both suits at law. The debt due by these appellants to the corporation of which they are members is a fixed and definite one, and it is neither more nor less because other debts may be due to the company from other stockholders.
We hold, therefore, that the complainant was under no obligation to make all the stockholders of the bank defendants in his bill. It was not his duty to marshal the assets of the bank, or to adjust the equities between the corporators. In all that he had no interest. The appellants may have bad such an interest, and, if so, it was quite in their power to secure its protection. They might have moved for a receiver, or they might have filed a cross-bill, obtained a discovery of the other stockholders, brought them in, and enforced contribution from all who had not paid their stock subscriptions. Their equitable right to contribution is not yet lost.
That the appellants are not protected by the fact, if such was the fact, that their subscriptions for stock were payable “as called for by the company,” we think is clear. Assuming that such a clause in the subscription meant more than an agreement to pay on demand, and that it contemplated a formal call upon all subscribers to the stock of the company, the subscriptions were still in the nature of a fund for the payment of the company's debts, and it was the duty of the company to make the calls whenever the funds were needed for such payment. If they were not made, the officers of the company violated their trust, held both for the stockholders and the company. And it would seem to be singular if the stockholders could protect themselves from paying what they owe by setting up the default of their own agents. But in this case the company went out of business before the complainant obtained his judgment, and it does not appear that since that time it has had any officers who could make the calls. Before that time its president was dead. However this may be, it is well settled that a court of equity may enforce payment of stock subscriptions though there have been no calls for them by the company. In Henry v. Railroad Company (17 Ohio, 187), a suit brought by a judgment creditor of a corporation to enforce payment by its stockholders of their unpaid subscriptions, for which calls had not been made, it was held that when a company ceases to keep up its organization, and abandons all action under the charter, a proceeding at the instance of the creditor becomes indispensable. It was further said : “ When a company, becoming insolvent, as in this case, abandons all action under its charter, the original mode of making calls upon the stockholders cannot be pursued. The debt, therefore, from that time must be treated as due without further demand.” This means, of course, as between the debtor and the creditor of the corporation. After all, a company call is but a step in the process of collection, and a court of equity may pursue its own mode of collection, so that no injustice is done to the debtor.
In the English courts a mandamus is sometimes awarded to compel the directors to make the necessary calls. Queen v. The Victoria Park Co., 1 Ad. & El. n. S. 544; Queen v. Ledgard, id. 616; The King v. Katharine Dock Co., 4 Barn. & Ad. 360. But this remedy can avail only when there are directors. The remedy in equity is more complete, and it is well recognized. Ward v. The Griswoldville Manufacturing Co., 16 Conn. 593. In such cases it is nowhere held, so far as we know, that a formal call must be made before a bill can be filed. Indeed, the filing of the bill is equivalent to a call. Before it is filed, the court has no jurisdiction of the matter. In bankruptcy, an assessment or a call may be made, for the assignee of a bankrupt corporation succeeds to its rights and becomes the legal owner. Not so in equity.
In The Dalton, fc. Railroad Co. v. McDaniel (56 Ga. 191), a creditor's bill very like the present was filed. It was objected by the stockholders, who were defendants, that it was for the directors of the company and not for the court to call in the stock subscriptions, and that their contract only obligated them to obey a call emanating from the company; but it was ruled that “principle and sound reason accord with authority that equity will grant relief in all such cases.”
In view of these considerations we think none of the assignments of error are sustained.
TERRY v. LITTLE.
1. Whicre a bank charter provides that on the failure of the bank “each stock.
holder shall be liable and held bound ... for any sum not exceeding twice the amount of ... his ... shares," – lleld, 1. That a suit in equity by or for all creditors is the appropriate mode of enforcing the liability incurred on such failure. 2. That, were an action at law maintainable by one cred.
itor, the stockholders must be separately sued, as their liability is several. 2. Pollard v. Builey (20 Wall. 520) cited and approved.
ERROR to the Circuit Court of the United States for the Western District of North Carolina.
By sect. 4 of the charter of the Merchants' Bank of South Carolina, at Cheraw, it was provided that, in case of the failure of the bank, “ each stock holder, copartnership, or body politic having a share or shares in the said bank at the time of such failure, or who shall have been interested therein at any time within twelve months previous to such failure, shall be liable and held bound individually for any sum not exceeding iwice the amount of his, her, or their share or shares.” It is alleged in the declaration that the bank failed March 1, 1865. The general assets have since been collected and applied to the payment of debts, under the provisions of an act of the legislature of South Carolina, passed March 13, 1869, placing the bank in liquidation. Debts to the amount of several hundred thousand dollars are still unpaid. The capital stock was $400,000, divided into shares of $100 each. Of these shares the defendant Benjamin F. Little owned at the time of the failure one hundred and ten, and Johın P. Little one hundred and fifty-eight. On the 21st of August, 1875, Terry, the plaintiff, commenced an action at law in the court below, against the defendants jointly, to recover from them, on account of their individual liability as stockhollers, *5,410, the amount due him from the bank on its bills which he held. The defendants demurred to the declaration, and among others assigned for cause, in substance, — 1, that the individual liability of the stockholders as created and defined by this charter could not be enforced in an action at law liy one creditor for his sole use to the exclusion of others; anii 2, that even if it could, the