Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/718

 § 7025.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. Xm. assets a " trust fund?" Recent cases. knowing them not to be so, liable for such difference, 1 or for the difference between what he gave and what he received for them. 2 § 702a. The doctrine that corporate assets constitute a "trust fund" has recently been impugned; 3 and as certain decisions of the Supreme Court of the United States might give Corporate the impression that this doctrine and principles flowing from it had been given up, that court has felt itself called on to use the following language : " It is the settled doctrine of this court that the trust arising in favor of creditors by subscriptions to the stock of a corporation cannot be defeated by any simulated payment of such subscription, nor by any device short of an actual payment in good faith. And while any settlement or satis- faction of such subscription may be good as between the corporation and the stockholders, it is unavailing as against the claims of creditors. Nothing that was said in the recent cases of Clark v. Bever, 139 U. S. 96 ; Fogg v. Blair, 139 U. S. 118; or Handley v. Stutz, 139 U. S. 417, was intended to overrule or qualify in any way the wholesome principle adopted by this court in the earlier cases, especially as applied to the original subscribers to stock. The later cases were only intended to draw a line beyond which the court was unwilling to go in affixing a liability upon those who had purchased stock of the corporation, or had taken it in good faith in satisfaction of their demands." i § 702b. One of the points decided in the case of Handley v. Stutz was that only subsequent creditors could s'tod< nuS " be presumed to have given credit to the company on the faith of an issue of stock, and that conse- » See Boyton v. Hatch, 47 N. T. 225; Tallmadjre v. Fishkill Iron Co., 4 Barb. 382; Poll's Case, L. R. 5 Ch. 11 ; cf. Tulare Sav. B'k v. Talbot, 131 Cal. 45. 2 Eyerman v. Krieckhaus, 7 Mo. App. 455. Christensen v. Eno, 106 N, Y. 97, appears to hold that a cor- poration may present shares of its stock to shareholders, and that on its subsequent insolvency creditors can- 698 not compel shareholders who have received shares as a gratuity to pay up the par value thereof. Compare Clark v. Bever, 31 Fed. Rep. 670. 3 Hospes v. Northwestern Mfg. Co., 48 Minn. 174; see § 7026. The present discussion is to be read in connection with §§ 522a-522c, and note to § 655. 4 Camden v. Stuart, 143 U. S. 104, 113. See Kelly v. Clark, 21 Mont. 291. Compare Lloyd v. Preston, 146