Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/715

 CHAP. XIII.] SHAREHOLDERS AND CREDITORS. [§ 701. scribed for by them respectively. 1 However, as it is the law that when a certain amount of stock is mentioned in the charter or articles of incorporation, a contract to subscribe cannot be enforced by the corporation before the total amount is subscribed, so creditors canuot compel a subscriber to pay up his subscription when the same implied condition is un- fulfilled and the subscriber has done nothing to estop him- self from setting up such defence. 2 But a subscriber does 1 See § 513. The original holder of stock in a corporation is liable for unpaid in- stalments of stock without an ex- press promise to pay them, and a contract made by him with the cor- poration or its agents, limiting bis liability therefor, is void as to cred- itors of the company and its assignee in bankruptcy who represents them. Upton v. Tribilcock, 91 U. S. 45; Tuckerman v. Brown, 33 X. Y. 297; Jewell v. Rock River Paper Co., 101 111. 57; Union Mut. Life Ins. Co. v. Frearstone M'f'g Co., 97 111. 537; Keystone Bridge Co. v. Barstow, 8 Mo. App. 494; Wight Co. v. Steinke- meyer, 6 Mo. App. 574; Farnsworth v. Bobbins, 36 Minn. 369; Goodwin v. McGehee, 15 Ala. "232. Compare Ross v. Kelly, 36 Minu. 38. Tbe charter of a trust company provided: "If at any time the capital stock paid into said corporation shall be impaired by losses or otberwise, the directors sball forthwith repair the same by assessment." The company being insolvent and in the hands of a receiver, it was beld that a per- sonal liability was not imposed on the shareholders, and that they could not be assessed to pay creditors, and that the purpose of said pro- vision was to prevent the continuance of business with impaired capital. Dewey v. St. Albans Trust Co., 57 Vt. 332. The shareholders of a corporation who were under no personal liability to its creditors, at a time when the corporation was insolvent made an agreement to pay the treasurer "the sums set opposite our names, respec- tively, for the purpose of liquidating the debt against said association." All but one paid the amount, and the business was continued three years. It was held that an action of assumpsit, in the name of the treasurer, could be maintained on behalf of those who were creditors at the time of the above agreement, the corporation having ceased to do business, and transferred its assets to its creditors. Haskell v. Oak, 75 Me. 519. A corporation was organ- ized, the members agreeing that its liabilities should not exceed an amount much less than its nom- inal capital stock; they then dis- tributed its capital stock among themselves, paying for it only a small fraction of its face. Held, a shareholder who was a party to the original agreement could not recover against other shareholders for debts owing him by the corporation be- yond the limited amount; but seems an outside creditor could. Haider- man v. Ainslie, 82 Ky. 395. 2 Temple v. Lemon, 112 111. 51; Hawkins v. Citizens' Inv. Co., 38 Or. 544. See § 518. But the subscriber may estop himself by delay from in- 695