Page:Federal Reporter, 1st Series, Volume 1.djvu/382

 874 7BDEBAL BEPOBTBB. �also hereby agree to indemnify the said assignees, and the estate of Kirkland, Gbase & Go., and the estate of A. A. Chapman, against loss or damage of any kind, for releas- ing their claim to said bonds of the American File Company, now held by Messrs. Eobert Garrett & Sons, and agree to hold said assignees and said estates harmless for said transfer and release." �The affairs of said Kirkland, Chase & Co. had been nearly settled, and the several bankrupts had been discharged, before this case was begun. �In June, 1876, Garrett & Sons brought an action upon the bonds in the supreme court of Ehode Island, and recorered judgment against the American File Company, the amount of principal and interest $132,611.33, with $51.10 costs. �As the law then stood, creditors reeovering judgment against a manufacturing corporation, whose stockholders were liable for its debts, might levy their execution upon the persons and property of such stockholders, as if for their own proper debts. The Ehode Island stockholders of the file oompany thereupon filed a bill in equity in the supreme court of Ehode Island to enjoin Garrett & Sons from levying their execution upon them or their property, alleging that when the bonds of the corporation were issued, in 1870, the arrangement was that the bonds were a final payment of the debts of the Com- pany, relieving the stockholders from liability, and requir- ing them to look for payment of the bonds only to the prop- erty which was mortgaged to seeure them, or at ail eventa to the property of the company, and not to the personal respon- eibility of the stockholders ; that Garrett & Sons had notice of this equity when they acquired their title to the bonds, and stood in the place of Chapman, or Kirkland, Chase & Co. ; that the plaintiffs had besides agreed to indemnify the assignees of those shareholders, and that a court of equity would enforce that liability in a suit between the plaintiffa and defendants, to save the oircuity of action which would ensue if the defendants should call on the assignees for con- tribution, and they again on the plaintiffs for indemnity. To ��� �