Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/730

 § 715.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. XIII. shareholders under statutes imposing individual liability for corporate indebtedness is the liability of shareholders under such statutes, and to speak of it as the liability of guarantors, or the liability of partners, is to call it what it is not. 1 § 715. That it is not the liability of guarantors seems too evident to require argument. Suretyship is a legal institution composed of peculiar rules based on the general notion that a surety is a man conferring a benefit and receiving none in re- turn, whose contract, therefore, is to be construed strictly in his own favor. 2 It is evident that the situation of a share- holder is very different, 3 and the decision in the Michigan case, 4 that the shareholder was a guarantor who was discharged because time was given the corporation, is against the weight of authority, and apparently a mistaken decision. 5 limits of the state chartering the corporation; at least, if the necessary parties can be brought within the jurisdiction of the foreign court. Hodgson v. Cheever, 8 Mo. App. 318. Compare Lowry v. In man, 46 N. Y. 119. See § 394. Thus liability attaching to share- holders until the total capital stock is paid in, and a certificate to that effect filed will be enforced outside the state. Cuykendall v. Miles, 10 Fed. Rep. 342. On the other hand, any liability of shareholders or officers contingent on the failure of the latter to pub- lish or file reports is held penal and not enforceable outside the state. Wood v. Wicks, 7 Lea (Teun.), 40. But see §§ 764, 765. Sucli penal lia- bility will be strictly construed in favor of the shareholders. Cady v. Smith, 12 Neb. 628, 630. Compare Smith o. Steele, 8 Neb. 115. And it has been held not to survive the death of the person affected with it. Di- versey v. Smith, 103 111. 378. 1 The nature of this liability in any particular case depends, of course, on the intent of the statute creat- ing it. Under some statutes it will 710 resemble the liability of guarantors, and under others that of partners. But neither the rules of suretyship nor the rules of partnership law will ever be wholly and exclusively appli- cable. 2 Mobile, etc., R. R. Co. v. Nicholas, 98 Ala. 92, 125. See Ward v. Stahl, 81 N. Y. 406. 3 See Emerson v. Slater, 22 How. 28. 4 Hanson v. Donkerly, 37 Mich. 184. See Ball El. L't Co. v. Child, 68 Conn. 522. Cf. Nat. Loan Ass'nw. Lichten- waluer, 100 Pa. St. 100; Milroy v. Spur Mountain Iron M'g Co., 43 Mich. 231. 5 Directly contra to Hanson v. Don- kerly are Harger v. McCullough, 2 Denio (N. Y. ), 119; Moss v. Averell, 10 N. Y. 449; Aultman's Appeal, 98 Pa. St. 505; Young v. Rosenbaum, 39 Cal. 646; Sonoma Valley Bank v. Hill, 59 Cal. 107; Hatch v. Burroughs, 1 Woods, 439; Hyman v. Coleman, 82 Cal. 650; Boice v. Hodge, 51 Ohio St. 236. The view taken in Hanson v. Donkerly seems overruled in Grand Rapids Sav'gs Bank v. Warren, 52 Mich. 557. To be sure, where, under the stat- ute, suit must be commenced against