Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/63

 CHAP. IV.] RESKMBLANCES TO OTHER INSTITUTIONS. [§ 69. times advantageously, if guardedly, used for purposes of il- lustration. But if inferences are to be drawn from such anal- ogies, too great care cannot be taken to determine wherein the analogy consists ; an inquiry which may often resolve itself into an inquiry how far the reasons for the application of the rule to the one legal institution hold good for the application of the rule to the other. To illustrate Jtakelhe instance of a corporation, the shareholders of which^an^ affected with per- sonal liability for the debts of the corporation, judgment hav- ing first been obtained against the corporation, execution levied thereunder and returned unsatisfied. Suppose suit to have been brought against the corporation, judgment obtained, the execu- tion thereunder returned unsatisfied, and that suit is brought against the shareholders personally. Some courts, reasoning from analogy, have held the shareholders liable as guarantors, while in other courts they have been held liable as partners. But the general analogy between the liability of a surety and that of a shareholder is as misleading as the analogy between the liability of a shareholder and that of a partner. On the one hand, acts may be clone which would discharge a surety from his liability, which do not discharge a shareholder from his ; and, on the other hand, by a bona fide transfer of shares the liability of the shareholder may cease, while a partner, by sell- ing out his interest in the firm, cannot free himself from his liability to partnership creditors. No ; the liability of a share- holder in respect of his shares in such a corporation is the lia- bility neither of a surety nor of a partner, for the reasons which led to the formation of the rules regulating the liability of a surety or of a partner are not necessarily, or even probably, present. The liability in question is, properly speaking, the liability of a shareholder in that particular corporation, and is determined by the rules contained in the corporate constitu- tion. 1 § 69. There are, however, elements in the liability of a share- holder in such a corporation which are in truth analogous to certain elements in the liability of a surety or partner. But these elements are the manifestation of legal rules common to all three kinds of institutions, and, therefore, to be regarded 1 See, for a fuller discussion of this question, §§ 712-720. 43