Blair v. Gray/Opinion of the Court

The charter of the Republic Life Insurance Company of Chicago contains the following section:--

'SECT. 6. The real and personal property of each individual     stockholder shall be held liable for any and all liabilities      of the company, to the amount of stock subscribed and held by      him and not actually paid in. In all cases of losses exceeding the means of the     corporation, each stockholder shall be held liable to the      amount of unpaid stock held by him.'

The defendant, Gray, subscribed $10,000 to the capital stock of the company. He has paid only $2,000 on his subscription, and still owes the company for the rest. Under the foregoing section of the charter some appropriate action for the benefit of creditors may undoubtedly be maintained against him for the recovery of this unpaid balance, if the losses of the company are in excess of its means.

This suit was at law by a policy-holder of the company, against the defendant as a stockholder, to recover an amount claimed to be due on the policy. There is no averment in the declaration to the effect that the losses of the company, or its liabilities, exceed its assets. The case stands on demurrer to the declaration. Without, therefore, determining whether, under the decisions of the courts of Illinois, if it appeared that there was a deficiency of assets, an action like this might be maintained, we affirm the judgment below, because we are all of opinion that, until such contingency arises, a creditor cannot sue a stockholder to enforce this liability.

Judgment affirmed.