Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/717

 CHAP. XIII.J SHAREHOLDERS AND CREDITORS. [§ 702. affected by the facts that the corporation was insolvent when the shares were issued, and that they were issued in payment of a debt owed by it. 1 If, however, shares are issued as fully paid up, when in fact the corporation has never received the par value of them, creditors cannot compel a person who buys them in good faith as full paid, to pay the difference between their par value and the value of whatever property was given for them originally. 2 Though possibly the creditors could hold the original subscriber who took the shares as fully paid up, Land Co. v. Birmingham Warehouse Co., 92 Ala. 407; Romau ». Dimmick, 115 Ala. 233; Pickering v. Town- send, 118 Ala. 351; Lea v. Iron Belt Mercantile Co., 119 Ala. 271, 276; Roman v. Dimmick, 123 Ala. 366; Shickle v. Watts, 94 Mo. 410; Van Cleve v. Berkey, 143 Mo. 109; Kelly v. Clark, 21 Mont. 291; Coleman v. Howe, 154 111. 458; Hastings Malt- ing Co. v. Iron Range Co., 65 Minn. 28; Marshal Foundry Co. v. Killian, 99 N. C. 501; Clayton v. Ore Knob Co., 109 N. C. 385. Compare White- hill i>. Jacobs, 75 Wis. 474; Gogebic Inv. Co. v. Iron, etc., Co., 78 Wis. 427; In re South Mountain Con- solidated M'g Co., 14 Fed. Rep. 347; Sprague v Nat. Bank, 172 111. 149. Actual fraud on the part of the cor- poration and stockholders need not be shown. Gillin v. Sawyer, 93 Me. 151. When a person receives shares as a gift, in consideration of his in- fluence and service in recommend- ing the goods of the corporation, creditors may compel him to pay in the amount of his subscription. Savings Bk. v. Stove Co., 105 Mich. 535. See, also, Eddystone Ins Co., 7a re, L. R. Ch. Div. 1893, III. 9. Where stock is issued in good faith for property supposed to equal in value the amount of stock issued for it, the subscriber will not be liable to creditors because subsequent events show that the property was worth less. Coit v. Gold Amalgamating Co., 14 Fed. Rep. 12; S. C, aff'd 119 U. S. 343; Fort Madison Bank v. Al- den, 129 U. S. 372; Brant v. Ehlen, 59 Md. 1; Penfield v. Dawson Town & Gas Co., 57 Neb. 231; Kroenert v. Johnston, 19 Wash. 96. See Cofhn v. Ransdell, 110 Ind. 417, and § 723. The stockholder who receives bonds as a bonus upon paying for his stock in property cannot be charged there- for. The bonds may not be enforce- able, but no obligation to pay for them exists in favor of the creditor of the corporation. Romau v. Dim- mick, 123 Ala. 366. 1 Jackson v. Traer, 64 Iowa, 469. In this case $350,000 of stock were issued in payment of a debt of $70,000. Contra, Clark v. Bever, 139 U. S. 96. 2 Brant v. Ehlen, 59 Md. 1; Phelan o. Hazard, 5 Dill. 45; Steacy v. Little Rock, etc., R. R. Co., ib. 348; Fore- man v. Bigelow, 4 Cliff. 508; Erskine o. Loewenstein, 82 Mo. 301; Johnson w. Lullman, 15 Mo. App. 55; S. C, 88 Mo. 567; Keystone Bridge Co. v. Mc- Cluney, 8 Mo. App. 496; West Nash- ville Mill Co. v. Bank, 86 Tenn. 252; Morgan n. Howland, 89 Me. 484; see Waterhouse v. Jamieson, L. R. 2 H. L. Sc. 29. Compare Peck v. Coal- field Coal Co., 11 111. App. 88; Rail- road Co. v. Howard, 7 Wall. 392; Troup v. Horbach, 53 Neb. 795. § 522c. 697