bility is several, or joint and several, some courts have held that all the stockholders need not be joined, especially where they are very numerous, and to require the joinder of all of them would be virtually to deny any remedy to the complainant.10 Those sued may bring in the others by cross-bill, however.11 Assignees of insolvent stockholders are proper parties. 12 And heirs and legatees of a deceased stockholder who have received their estates are necessary parties.13 But they cannot represent the estate, and hence are not proper parties where they are made liable only on claims which have been established may be brought in, by leave of court, by a supplemental summons and complaint. Warth v. Moore Blind Stitcher and Overseamer Co., 146 App. Div. 28, 130 N. Y. Supp. 748, aff'd 207 N. Y. 673, 100 N. E. 1135. North Carolina. Von Glahn v. De Rossett, 76 N. C. 292; Von Glahn v. Harris, 73 N. C. 323. Ohio. Bullock v. Kilgour, 39 Ohio St. 543; Umsted v. Buskirk, 17 Ohio St. 113; Irvine v. Elliott, 203 Fed. 82; Middletown Nat. Bank v. Toledo, A. A. & N. M. Ry. Co., 113 Fed. 587. Questions certified to Supreme Court, 127 Fed. 85, which decided them in accordance with the opinion of the Circuit Court. 197 U. S. 394, 49 L. Ed. 803. Oklahoma. The stockholders are necessary parties to an action to enforce the liability of stockholders to the extent of the amount unpaid on their stock, under the Oklahoma statute. Smith v. Kastor, 195 Ill. App. 458. Washington. New York Nat. Exch. Bank v. Metropolitan Sav. Bank, 28 Wash. 553, 68 Pac. 905. Wisconsin. Rehbein v. Rahr, 109 Wis. 136, 85 N. W. 315; Eau Claire Nat. Bank v. Benson, 106 Wis. 624, 82 N. W. 604; Finney v. Guy, 106 Wis. 256, 49 L. R. A. 256, 82 N. W. 595, judgment aff'd 189 U. S. 335, 47 L. Ed. 839; Foster v. Posson, 105 Wis. 99, 81 N. W. 123; Coleman v. White, 14 Wis. 700, 80 Am. Dec. 797. 9 Palmer v. Woods, 149 Ill. 146, 35 N. E. 1122; Gamewell Fire Alarm Tel. Co. v. Fire & Police Tel. Co., 116 Ky. 759, 76 S. W. 862; Pettibone v. MeGraw, 6 Mich. 441; Mosler Safe Co. v. Guardian Trust Co., 208 N. Y. 524, 101 N. E. 786, modifying and aff'g judgment 153 N. Y. App. Div. 117, 138 N. Y. 298. See also Young v. Farwell, 139 Ill. 326, 332, 28 N. E. 845. And see § 4127, supra. Where the liability is several the court may decree against those of the defendants who have been served, and continue the cause as to the others. Castleman v. Holmes, 4 J. J. Marsh. (Ky.) 1. In Brundage v. Monumental Gold & Silver Min. Co., 12 Ore. 322, 7 Pac. 314, it was held that a suit to enforce a statutory liability for the amount unpaid on the stock would not abate for failure to join all of the stockholders, where it is not sought to wind up the affairs of the corporation. 10 Pettibone v. McGraw, 6 Mich. 441; Brundage v. Monumental Gold & Silver Min. Co., 12 Ore. 322, 7 Pac. 314. 11 Palmer v. Woods, 149 Ill. 146, 35 N. E. 1122. See also Young v. Farwell, 139 Ill. 326, 332, 28 N. E. 845. And see § 4127, supra. 12 Barton Nat. Bank v. Atkins, 72 Vt. 33, 47 Atl. 176. And see § 4264, infra. 13 Barton Nat. Bank v. Atkins, 72 Vt. 33, 47 Atl. 176. against the estate, and its liability has not been established.14 Nor is a residuary legatee who has received nothing from the estate a proper party, since he has no interest in the estate which can prevent its application to the payment of the testator's debts.15 It is a sufficient excuse for omitting certain stockholders as parties defendant, that some of them were dead, and their estates unrepresented, and that others cannot be found within the jurisdiction of the court.16 And stockholders whose stock has been forfeited, or who have not paid the percentage of their subscriptions necessary to make them stockholders, need not be joined.17 But the fact that the plaintiffs elect to omit certain stockholders, because of their insolvency, or for any other reason, does not preclude any of the other parties from bringing them in, if their presence can protect any rights of contribution or otherwise.18 The objection that all the stockholders are not joined as parties defendant is waived if not raised by answer or demurrer. 19 A decree fixing the liability of stockholders not served and not appearing is erroneous.20 The final judgment excludes all creditors from any demand against omitted stockholders, 21 and it has been held that stockholders who are joined have no right of contribution against stockholders who are not joined, whether within the jurisdiction or not.22 The corporation is a proper party defendant, and generally it is a 14 Brinkworth v. Hazlett, 64 Neb. 592, 90 N. W. 537. See also § 4195, supra. 15 Starkweather & Shepley v. Brown, 25 R. I. 142, 55 Atl. 201, rehearing denied 25 R. I. 176, 55 Atl. 324. 16 Wheatley v. Glover, 125 Ga. 710, 54 S. E. 626; Brobston v. Downing, 95 Ga. 505, 22 S. E. 277; Mahoney v. Bernhard, 27 N. Y. Misc. 339, 58 N. Y. Supp. 748, aff'd 45 N. Y. App. Div. 499, 63 N. Y. Supp. 612, aff'd 169 N. Y. 589, 62 N. E. 1097. See also Guilbert v. Kessinger, 173 Mo. App. 680, 160 S. W. 17; Rehbein v. Rahr, 109 Wis. 136, 85 N. W. 315. 17 Ford v. Chase, 118 N. Y. App. Div. 605, 103 N. Y. Supp. 30, aff'd 189 N. Y. 504, 81 N. E. 1164. As to the effect of a forfeiture of stock for nonpayment of assessments on the liability of the stockholder, see § 665, supra. As to the effect of the nonpayment of the required percentage on the validity of the subscription, see § 708 et seq., supra. 18 Rehbein v. Rahr, 109 Wis. 136, 85 N. W. 315. 19 Arthur v. Willius, 44 Minn. 409, 46 N. W. 851. 20 Dunn v. Bank of Union, 74 W. Va. 594, L. R. A. 1915 B 168, 82 S. E. 758. 21 Rehbein v. Rahr, 109 Wis. 136, 85 N. W. 315; Finney v. Guy, 106 Wis. 256, 49 L. R. A. 486, 82 N. W. 595, judgment aff'd 189 U. S. 335, 47 L. Ed. 839. 22 See § 4265, infra. necessary party.23 And if the assets of the corporation are in the hands of an assignee for the benefit of creditors, he should be made a 23 United States. Irvine v. Elliott, 203 Fed. 82; Goss v. Carter, 156 Fed. 746; Elkhart Nat. Bank v. Northwestern Guaranty Loan Co., 87 Fed. 252, aff'g 84 Fed. 76; Flour City Nat. Bank v. Wechselberg, 45 Fed. 547; Walser v. Memphis, C. & N. W. Ry. Co., 19 Fed. 152. Arkansas. Jones v. Jarman, 34 Ark. 323. Minnesota. In re Martin's Estate, 56 Minn. 420, 57 N. W. 1065. New York. Masters v. Rossie Lead Min. Co., 2 Sandf. Ch. 301. Ohio. Umsted v. Buskirk, 17 Ohio St. 113. Pennsylvania. Bates v. Day, 198 Pa. St. 513, 82 Am. St. Rep. 811, 48. Atl. 407; Patterson v. Wyomissing Mfg. Co., 40 Pa. St. 117. West Virginia. Nimick v. Mingo Iron Works Co., 25 W. Va. 184. Wisconsin. Rehbein v. Rahr, 109 Wis. 136, 85 N. W. 315; May v. Black, 77 Wis. 101, 45 N. W. 949; Coleman v. White, 14 Wis. 700, 80 Am. Dec. 797. The corporation may be joined as a defendant in a suit to enforce the statutory liability of persons who organize a corporation and transact business in its name before the minimum capital stock is subscribed. John V. Farwell Co. v. Jackson Stores, 137 Ga. 174, 73 S. E. 13. And in Commercial Bank of Augusta v. Warthen, 119 Ga. 990, 47 S. E. 536, it is held that it is a necessary party. The corporation is a necessary party to a suit under the Oklahoma statute to enforce the liability of stockholders to the extent of the amount remaining unpaid on their stock. Smith v. Kastor, 195 Ill. App. 458. For the purpose of a final adjudication of all matters involved, the cor poration is a necessary party, but it is not a necessary party where the only relief sought is the ascertainment of the liability of the stockholders and judgment accordingly. The stockholders cannot plead in bar that it is not joined. Kipp v. Miller, 47 Colo. 598, 135 Am. St. Rep. 236, 108 Pac. 164. See also Clark v. Knowles, 187 Mass. 35, 105 Am. St. Rep. 376, 2 Ann. Cas. 26, 72 N. E. 352. The ascertainment of the liabilities of an insolvent bank, which is necessary before an action can be maintained by a receiver to enforce the liability of its stockholders, can be had only in an action to which the bank is a party, and in which it is served with notice of the pendency of the proceeding or has voluntarily appeared. Holcomb v. Tierney, 79 Neb. 660, 113 N. W. 204. But the corporation is not a necessary party to a suit to enforce the liability of the stockholders, brought after the ascertainment of the corporate indebtedness and the application of its assets to the payment of the same. German Nat. Bank of Lincoln v. Farmers' & Merchants' Bank, 54 Neb. 593, 74 N. W. 1086; Hazlett v. Woodhead, 28 R. I. 452, 67 Atl. 736, 27 R. I. 506, 63 Atl. 952. But it is not an improper party. German Nat. Bank of Lincoln V. Farmers' & Merchants' Bank, 54 Neb. 593, 74 N. W. 1086. The corporation is a necessary party only where there are corporate assets which ought to be applied to the payment of the debts. Otherwise it is a proper party, but only for the purpose of establishing against it as a finality the amount of the indebtedness for which the stockholders are liable. Finney v. Guy, 106 Wis. 256, 49 L. R. A. 486, 82 N. W. 595, judg party defendant.24 But it has been held that a receiver is not a necessary party 25 § 4229. Joinder of causes of action. When the statute imposing individual liability upon stockholders for corporate debts is intended. to provide a common fund for the benefit of all creditors ratably, so that it may be enforced by a suit in equity, as explained in a former section, a creditor in bringing such a suit on behalf of himself and other creditors who may come in may unite in the same bill or complaint with the claim to enforce the statutory liability of stockholders a claim to compel them to pay in the balance due on their subscriptions.26 And a cause of action in favor of a receiver to enforce the statutory liability of a stockholder may be joined with one to recover the amount remaining unpaid on his stock when issued.27 A bill in behalf of all the creditors to enforce the statutory liability of all the stockholders and also against another corporation to compel it to make good a deficiency in the corporate assets is multifarious.28 But where the double liability is enforceable by a trustee for the benefit of creditors, it has been held that such liability and the liability of officers and directors for neglect and mismanagement may be enforced by him in a single suit.29 ment aff'd 189 U. S. 335, 47 L. Ed. 839. 24 Harper v. Union Mfg. Co., 100 IlI. 225. See also Kipp v. Miller, 47 Colo. 598, 135 Am. St. Rep. 236, 108 Pac. 164. 25 Mahoney v. Bernhard, 27 N. Y. Misc. 339, 58 N. Y. Supp. 748, aff'd 45 N. Y. App. Div. 499, 63 N. Y. Supp. 642, aff'd 169 N. Y. 589, 62 N. E. 1097. 26 New York Life Ins. Co. v. Beard, 80 Fed. 66; Northwestern Railroader v. Prior, 68 Min. 95, 70 N. W. 869; Barrick v. Gifford, 47 Ohio St. 180, 21 Am. St. Rep. 798, 24 N. E. 259; Warner v. Callender, 20 Ohio St. 190. "The primary purpose of a suit being to wind up an insolvent corporation and distribute its assets ratably among its creditors, the enforcement of all liabilities of officers and stockholders to the corporation, whether created by law or otherwise, and all liabilities of directors and stockholders to creditors created by law, are germane to the main purpose of the litigation and not only may be joined therewith as a part thereof under the established rules of equity jurisdiction, but, under the scheme of the Code for working out the various liabilities in which creditors of a corporation as a class are interested, must be so joined, and the liabilities of all others to creditors, of a trust nature, may be so joined." Harrigan v. Gilchrist, 121 Wis. 127, 239, 99 N. W. 909. 27 Fish v. Chase, 114 Minn. 460, 131 N. W. 631. 28 Golden v. Cervenka, 278 Il. 409, 116 N. E. 273. 29 If the trustee does not ask to have the liability of officers and directors enforced in a suit against the stockholders, the latter may do so by answers in the nature of cross-bills. Clark v. Bank of Union, 72 W. Va. 491, 78 S. E. 785. § 4230. Discontinuance of suit. It has been held that, although a suit instituted by a creditor on behalf of himself and such other creditors as may come in, is a representative suit for the benefit of all creditors ratably, the plaintiff does not become a trustee or representative of the other creditors "to such an extent as to require him to carry on the litigation for their interests in opposition to his own, or after he has settled his claim," and that he may discontinue the suit, unless other creditors have actually come in and been made parties, so as to acquire a right to take part in the management of the suit.30 But there is also authority to the contrary.31 Of course, if other creditors have actually come in and become parties, they may continue the suit.32 one, § 4231. Necessity for exhausting assets of the corporation and remedies against it—General principles. If the liability is a primary ,33 creditors need not resort to the assets of the corporation before proceeding against the stockholders,34 and may sue and collect from them to the extent of their liability, without first exhausting their remedies against the corporation by recovering a judgment against it and issuing an execution thereon, or otherwise.35 On the other 30 Hirshfeld v. Fitzgerald, 157 N. Y. 166, 46 L. R. A. 839, 51 N. E. 997, rev'g Hirshfeld v. Bopp, 27 N. Y. App. Div. 180, 50. N. Y. Supp. 676. And see generally, Belmont Nail Co. v. Columbia Iron & Steel Co., 46 Fed. 336; Derby v. Yale, 13 Hun (N. Y.) 273; Tremain v. Guardian Mut. Life Ins. Co., 11 Hun (N. Y.) 286; Innes v. Lansing, 7 Paige Ch. (N. Y.) 583. 31 Atlas Bank v. Nahant Bank, 23 Pick. (Mass.) 480. 32 See the cases above cited. 33 See 4180, supra. 34 Eva v. Andersen, 166 Cal. 420, 137 Pac. 16; Shafer v. Moriarty, 46 Ind. 9. See also Marion Tp. Union Draining Co. v. Norris, 37 Ind. 424. Where the liability is a primary one, it may be enforced without waiting until the assets of the corporation have been collected and converted into money and applied to the payment of its debts. Pate v. Bank of Newton, 116 Miss. 666, 77 So. 601. Creditors of an insolvent bank are not required to exhaust the assets of the bank before suing stockholders on their liability fixed by law. Buist v. Williams, 81 S. C. 495, 62 S. E. 859. See also the cases cited in the following note. 35 California. McGowan v. McDonald, 111 Cal. 57, 52 Am. St. Rep. 149, 43 Pac. 418; Knowles v. Sandercock, 107 Cal. 629, 40 Pac. 1047; Morrow v. Superior Court, 64 Cal. 383, 1 Pac. 354; Faymonville v. McCollough, 59 Cal. 285; Young v. Rosenbaum, 39 Cal. 646; Prince v. Lynch, 38 Cal. 528, 99 Am. Dec. 427; Davidson v. Rankin, 34 Cal. 503; Lininger v. Botsford, 32 Cal. App. 386, 163 Pac. 63; Trindade v. Atwater Canning & Packing Co. (Cal. App.), 128 Pac. 756; Buttner V. Adams, 236 Fed. 105; Dolbear v. Foreign Mines Development Co., Ltd., 196 Fed. 646. Florida. Gibbs v. Davis, 27 Fla. 531, 8 So. 633. Illinois. Standard Distilling & Distributing Co. v. Springfield Coal Min |