Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/723

 CHAP. XIII.] SHAREHOLDERS AND CREDITORS. [§ 705. § 705. The corporation being insolvent, no doubt any cred- itor not made a party to the bill has a right to come in and in- sist on a ratable distribution of the corporate assets, which include unpaid subscriptions. 1 And a creditor's bill that is properly framed will be in a form to enable any creditor to join. 3 It would, however, work hardship if a creditor who sues in a court of equity to reach assets of the corporation which he cannot subject to his claim in an action at law, were in all cases obliged to make all the shareholders parties, or even to bring his suit on behalf of all the creditors. To insist on this would practically force a creditor seeking such equitable relief to bring a bill for the winding up of the corporation ; which is certainly not incumbent on him. 3 Thus, in Marsh v. Burroughs, 4 a bill was brought by certain judgment creditors of a bank against a portion of the share- holders, to compel them to satisfy the plaintiffs' judgments from the unpaid subscriptions due on the defendants' shares. The bill alleged that the stock of the bank was divided into twentv thousand shares, held by a great number of share- holders in different states, some of whom were insolvent. Although the objection was made that the proper parties were not before the court, Justice Bradley sustained the bill, saying in the course of his opinion : " A judgment creditor who has exhausted his legal remedy, may pursue in a court of equity any equitable interest, trust, or demand of his debtor, in whosesoever hands it may be. And if the party thus reached has a remedy over against other parties for contribution or indemnity, it will be no defence to the primary suit against him that they are not parties. If a creditor were to be stayed until all such parties could be made to contribute their pro- portionate share of the liability, he might never get his money. " 5 1 See Pfohl v. Simpson, 74 N. T. 137; Marru. Bank of West Tennes- see, 4 Coldw. (Tenn.) 471; Adler v. Milwaukee Patent Brick MTg Co., 13 Wis. 57; Osgood v. Lay tin, 3 Keyes (N. Y.), 521. 2 Suck was the form in Hatch v. Dana, 101 U. S. 205, and Ogilvie v. Knox Ins. Co., 22 How. 380. 3 See Crawford v. Rohrer, 59 Md. 599; Martin v. South Salem Land Co., 94 Va. 28. 4 1 Woods, 463. 5 Marsh v. Burroughs, 1 Woods, 463, 468. See, also, Bartlettv. Drew, 57 N. T. 587. 703