Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/740

 § 725.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. XIII. conditions prove his fulfillment of them: 1 and the shareholder precedent. l may plead improper or non-performance of them. 2 Thus, under the New York Manufacturing Companies Act of 1848, before referred to, it was a condition precedent to the maintaining of an action by creditors against stockholders that the former should have obtained a judgment against the corpo- ration, and that an execution should have been issued there- under and returned wholly or partially unsatisfied. 3 A pro- ceeding in rem, affecting only the corporate property attached, was not a compliance with this condition. 4 If, however, the conditions precedent to a liability of a stockholder under this statute were rendered impossible by the paramount law of the United States, set in operation by the stockholder himself, per- formance of them by creditors was excused. 5 § 725. It is a difficult matter to state rules of general ap- plicability regarding the joinder of parties in parties 10 actions to enforce the statutory liability of share- holders. For there is great diversity in the lan- guage of the different statutes ; and the decisions are hard to reconcile. When shareholders are made severally individually liable to the creditors of the corporation to an amount equal to the i Hirslifield v. Bopp, 145 N. Y. 84; Cuykendall v. Corning, 88 N. Y. 130, 137. 2 See Fourth Nat. Bank v. Franklin, 120 U. S. 747. Due diligence seems to be required of the creditor to dis- cover property of the corporation before a scire facias will be issued against a shareholder. Hitchens v. Kilkenny, etc., R. R. Co., 15 C. B. 459. Still, where the statute pro- vides that execution against the corporation must first have been returned unsatisfied, no greater dili- gence is required than is implied in obtaining judgment, suing out an execution, and getting a return of nulla bona thereunder. Thornton v. Lane, 11 Ga. 459, 514; Bank of U. S. v. Dallam, 4 Dana (Ky.), 574. But notice should be given the share- 720 holder, that he may point out cor' porate property. Lane v. Harris, 16 Ga. 217, 224. See, also, Lane o. Mor- ris, 8 Ga. 468; Paine ». Stewart, 33 Conn. 516, 531; Toucey v. Bowen, 1 Biss. 81 ; Grew v. Breed, 10 Mete. 569, 579. See § 713. 3 Handy v. Draper, 89 N. Y. 334, reversing S. C, 23 Hun, 256. See Kincaid ». Dwindle, 59 N. Y. 548; Dean t Mace, 19 Hun, 391. See § 55, ch. 688, N. Y. Laws of 1892. 4 Rocky Mountains National Bank v. Bliss, 89 N. Y. 338. 6 Shellington v. Howland, 53 N. Y. 371; followed in Flash v. Conn, 109 U. S. 371. The Nat. Bankruptcy Act is referred to. Compare Ansonia B. & C. Co. v. New Lamp Chimney Co., 53 N. Y. 123; Glass Co. v. Vary, 152 N. Y. 121.