insolvency and liquidation of the bank.17 Nor can he set off against such an assessment the value of property delivered to the bank while it was in a failing condition under an agreement with its officers and the bank examiner that, in case of a failure, such property should be applied upon a stock assessment.18 Nor is the liability of a stockholder of a state bank discharged by the payment of an assessment on his stock levied by a bank examiner or other similar officer for the purpose of enabling it to continue in business, even though the funds so obtained are applied to the payment of creditors.19 But he may set off against his liability the amount of an assessment levied for the purpose of enabling the corporation to resume business, where it never does so, and the money collected is used to pay the claims of creditors in liquidation, pursuant to an order of court.20 Payments made to a receiver of a national bank, pursuant to a plan for the settlement of the claims of creditors, may be applied in reduction of the statutory liability on a subsequent assessment, where it appears that they were made with that intention.21 And a stockholder in a national bank may set off the value of property turned over by him to a temporary receiver after the insolvency of the bank, under an agreement that it should be used, if necessary, in liquidating the bank's indebtedness, and that if so used its value should be credited on any assessment subsequently levied upon the defendant's stock, where it is in fact so used; 22 or a claim against the receiver of such a nature that it is entitled to be paid in full before distribution of the assets among the general creditors.2 23 A receiver, with the approval of the court, may compromise or settle with stockholders who are willing to pay a certain amount with 17 Delano v. Butler, 118 U. S. 634, 30 L. Ed. 260, aff'g 23 Fed. 217. 18 Witters v. Sowles, 32 Fed. 130. 19 The assessment is not in the interest of creditors, but rather to place the bank in a position for the future transaction of business. Northwestern Trust Co. v. Bradbury, 117 Minn. 83, Ann. Cas. 1913 D 69, 134 N. W. 513. 20 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. Supp. 298. 21 In Korbly v. Springfield Inst. for Savings, 245 U. S. 330, 62 L. Ed. 326, aff'g judgment 218 Fed. 814, it was out litigation where their liability or their ability to pay the full amount is doubtful, and such a course is for the interest of the estate.24 § 4262. Recovery of judgment against stockholder. When the statute is such as to allow any creditor to proceed against any stockholder, and thereby obtain priority over other creditors,25 a judgment recovered against a stockholder by a creditor for the full amount of his liability discharges him from liability to other creditors, although the judgment has not been paid.26 This is true of a judgment by confession, if it is in favor of a bona fide creditor,27 and of a judgment recovered in another state.28 If the liability of the stockholders is several,29 a judgment against one, so long as it is unsatisfied, does not release the others,30 and it has been held that, under such circumstances, the court may render judgment against the stockholders served or appearing, and retain the cause for the purpose of proceeding against other stockholders, as to whom, by reason of nonresidence or otherwise, no jurisdiction was originally acquired.31 § 4263. Recovery of judgment against corporation. If stockholders are liable only upon the original indebtedness of the corporation, and there is nothing in the statute to show an intent to render inapplicable the principle that a debt is merged in a judgment recovered thereon, a stockholder is necessarily discharged from liability on a debt of the corporation, if the creditor sues the corporation and recovers a judgment against it, and the stockholder is not a party to the action. And the same is true if a judgment is recovered, after a person has ceased to be a stockholder, on a debt existing while he was VII Priv. Corp.-12 As to the effect of confessing judgment in favor of persons induced to buy up claims after the institution of an action against the stockholder to enforce his liability, see § 4261, supra. 28 Cushing v. Perot, 175 Pa. St. 66, 34 L. R. A. 737, 52 Am. St. Rep. 835, 34 Atl. 447. 29 See § 4179, supra. 30 Hanson v. Davison, 73 Minn. 454, 76 N. W. 254; Harper v. Carroll, 66 Minn. 487, 69 N. W. 610, 1069. 31 Toll v. Cobbey, 22 Colo. App. 244, 124 Pac. 357; Mason v. Alexander, 44 Ohio St. 318, 7 N. E. 435. a stockholder, and for which he was liable.32 Under a statute making stockholders individually liable for labor debts of the corporation, and allowing an action for such a debt to be brought against the corporation alone, or against the corporation and any or all of the stockholders jointly, a judgment recovered by a creditor in an action. against the corporation alone is a bar to an action on the same debt against the corporation and stockholders jointly.33 Generally, however, the statutes imposing individual liability for corporate debts upon stockholders are not such as to render the recovery of judgment against the corporation a discharge of the stockholders.34 Sometimes the statute expressly makes them liable only on judgments recovered against the corporation, and not on the original debts, or expressly or impliedly requires that a creditor shall sue the corporation and recover a judgment against it, and have an execution thereon returned unsatisfied, before proceeding against stockholders, etc.35 And in these cases, of course, recovery of a judgment against the corporation will not discharge the stockholders from their liability.36 § 4264. Insolvency or bankruptcy proceedings with respect to the corporation. Whether the discharge of an insolvent corporation in insolvency proceedings discharges the stockholders from their statutory personal liability for its debts depends upon the terms of the 32 See § 4197, supra. 33 Milroy v. Spurr Mountain Iron Min. Co., 43 Mich. 231, 5 N. W. 287. 34 In California a judgment against the corporation does not extinguish or merge the liability of the stockholders. Young v. Rosenbaum, 39 Cal. 646; Buttner v. Adams, 236 Fed. 105. "A judgment against the corporation does not extinguish or suspend the liability of the stockholders, and it clearly does not merge it. The remedy against the corporation may, for some cause, be suspended, or, perhaps, barred, without impairing the remedy against the stockholders, because the liability of the latter is primary, and is conditional or contingent only in this: that there must be a subsisting debt against the corporation. When the debt accrues against the corporation, it also accrues against the stockholders, and they remain such debtors until the debt is paid or satisfied. See also § 4197, supra. 36 See Dodge v. Minnesota Plastic Slate Roofing Co., 16 Minn. 368; Rocky Mountain Nat. Bank v. Bliss, 89 N. Y. 338; Handy v. Draper, 89 N. Y. 334; Kincaid v. Dwinelle, 59 N. Y. 548; Shellington v. Howland, 53 N. Y. 371. See also § 4231, supra. statute and the nature of the liability. It has been held that the stockholders are not discharged under a statute providing that the release of any debtor in insolvency proceedings shall not operate to discharge any other party liable "as surety, guarantor, or otherwise for the same debt.'' 37 The presentation of a claim by a laborer for wages in such a manas to entitle him to receive a dividend from the assignee of an insolvent corporation is not a waiver of his personal claim against the stockholders,38 unless there is some statutory provision to this effect.39 In a jurisdiction where the pendency of receivership proceedings does not affect the right of a creditor to proceed against stockholders of the insolvent corporation,40 it has been held that payment of a dividend to creditors by the receiver pending an action by a creditor against stockholders operates to discharge their liability pro tanto.41 Creditors who join in insolvency proceedings against a corporation, and accept dividends out of the assigned estate, and thereby accept the benefit of a statute providing that, on the execution of an assignment by an insolvent corporation of all of its assets for the benefit of creditors, its stockholders shall be released from personal liability for its debts, waive their right to hold the stockholders liable for a balance of their debts remaining unpaid, although their debts were contracted before enactment of the statute, and they might, if they had not accepted the benefit of it, have successfully attacked the statute as unconstitutional as to them.4 42 Where holders of notes and mortgages guaranteed by the corporation prove their claims under its guaranties in sequestration proceedings and assign the notes and mortgages to the receiver, who collects enough on them to pay such claims in full, but instead of doing so turns all of the proceeds into the general fund, which is distributed pro rata among all of the creditors, they are entitled, in subsequent proceedings against the stockholders, to be treated as creditors for the balance of their claims remaining unpaid.43 "Congress has not undertaken to provide that the discharge in bankruptcy of a corporation should release the stockholders."44 On the contrary the Bankruptcy Act now expressly provides that the bankruptcy of a corporation shall not release its stockholders "from any liability under the laws of a state or territory of the United States"; 45 and under this provision it has been held that the discharge of the corporation in bankruptcy does not work such a release. And the same was apparently true under the provision of the original act of 1898 that "the liability of a person who is a codebtor with, or guarantor or in any manner a surety for a bankrupt shall not be altered by the discharge of such bankrupt," before the specific provision 47 relative to the liability of stockholders was added 43 Flynn v. American Banking & Trust Co., 104 Me. 141, 19 L. R. A. (N. S.) 428, 129 Am. St. Rep. 378, 69 Atl. 771. 44"Congress has not undertaken to provide that the discharge in bankruptcy of a corporation should release the stockholders." Selig v. Hamilton, 234 U. S. 652, 58 L. Ed. 1518, Ann. Cas. 1917 A 104. See also Courtney v. Croxton, 239 Fed. 247. 45 This provision was added to the act by Act Feb. 5, 1903, c. 487, § 3, 32 Stat. 797. Way v. Barney, 116 Minn. 285, 38 L. R. A. (N. S.) 648, Ann. Cas. 1913 A 719, 133 N. W. 801; Firestone Tire & Rubber Co. v. Agnew, 194 N. Y. 165, 24 L. R. A. (N. S.) 628, 16 Ann. Cas. 1150, 86 N. E. 1116, rev'g judgment 128 N. Y. App. Div. 518, 112 N. Y. Supp. 907. 46 Finch, Van Slyck & McConville v. Vanasek, 132 Minn. 9, 155 N. W. 754; Way v. Barney, 116 Minn. 285, 38 L. R. A. (N. S.) 648, Ann. Cas. 1913 A 719, 133 N. W. 801. In Firestone Tire & Rubber Co. v. Agnew, 194 N. Y. 165, 24 L. R. A. (N. S.) 628, 16 Ann. Cas. 1150, 86 N. E. 1116, rev'g judgment 128 N. Y. App. Div. 518, 112 N. Y. Supp. 907, it was held that the discharge of the cor- 47 This provision is found in sec. 16 In In re Marshall Paper Co., 102 Fed. 872, the court held that the discharge of a corporation in bankruptcy would not prevent its creditors from taking judgment against it in the state court in such limited form as was necessary to enable them to enforce the individual liability of directors, and reversed the judgment of the lower court (95 Fed. 419) which refused a discharge on the ground that it would have that effect. In Elsbree v. Burt, 24 R. I. 322, 53 Atl. 60, it was held that under this provision a previous adjudication in bankruptcy of the corporation was not a bar to an action by a judgment creditor to enforce the liability of a stockholder. It does not appear from the opinion that the corporation had been discharged, although the syllabus states that the discharge of the |