Page:Federal Reporter, 1st Series, Volume 1.djvu/380

 S72 TBDEBAIi BEPOBTBB. �Bankbupt Stockholdbb— CoNTisniNG LiiLBitiTT— Indemnitt of As- aiGSBB m BANKBtTPTCT. — A Stipulation by a purchaser of such bonds to indemnify the assignee in bankruptcy of the original holder of a part of such bonds against ail liability as a stockholder in said corporation, doea not relieve the bankrupt or other members of the corporation from their Personal obligation to the purchaser of such bonds. �The American File Company was incorporated by an act of the legislature of Ehode Island in May, 1863, and was organized in the June foUowing. The company bought a pat- ent under whioh the manufacture of files had been before carried on in Baltimore, and the persons who sold them the patent took nearly one-half the stock of the new company. The capital appears to bave been insufficient for the business, and for some years money was raised or credit was obtained upon the notea of the company, indorsed by the stockholdeis, aU of whom were liable for the debts of the company under the statutes of Ehode Island, relating to manufacturing cor- porations, by reason of the omission to file certain statements necessary to relieve that liability. �In 1870 the company dulyresolved to issue bondg, secured by a mortgage of ail their corporate property, real and per- sonal, to be olïered to the stockholders, pro rata, until April 1, 1870, and such as were not then taken were to be disposed of "in the order of applicants." The bonds and mortgage were made accordingly. The bonds were payable to bearer in five years from January 1, 1870, with interest at 10 per cent, per annum, for which coupons were attached to them. Allen A. Chapman was the principal stoekholder in Balti- more, and he took and paid for, in the indorsed notes of the company, the fuU proportion of bonds allotted to the stock- holders in that city. The notes with which he paid for them belonged to his firm of Kirkiand, Chase & Co. Several of the smaller stockholders ref ased to subscribe, and he, or his firm, retained the bonds. �Kirkiand Chase & Co. were merchants doing a large busi- ness in Baltimore, and for 30 years or more they had dealt with the plaintiffs, Eobert Garrett & Sons, bankers, of Balti- more, and among other things they used to borrow money of the bankers upon collateral security. In the summer of 1872 ��� �