Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/741

 CHAP. XHI.] SHAREHOLDERS AND CREDITORS. [§ 725. amount of stock held by the shareholders respectively, a single creditor may sue one or more shareholders as he deems proper in an action at law. 1 Where, however, the share- holders are simply made individually liable for the corporate indebtedness, to an amount equal either to the par value of the shares held by them respectively or in the proportion which their shares bear to the total amount of the capital stock, the rule applied in many cases is that all the shareholders, so far as practicable, should be joined in an action in equity ; which should be brought by all the creditors, or in such a form that all the creditors may come in. 2 " The creditors should all join because they have a common interest in the funds to be realized ; or, if the action is commenced by one or more of i Flash v. Conn, 109 U. S. 371; Garrison v. Howe, 17 New York, 458; Mathezv. Neidig, 72 New York, 100; Weeks v. Love, 50 New York, 568; Mann v. Pentz, 3 N. Y. 415; Bank of Poughkeepsie v. Ibbotson, 24 Wend. 473; Wincock v. Turpin, 96 111. 135; Hull v. Burtis, 90 111. 213; Smith v. Londoner, 5 Colorado, 365; Culver v. Third National Bank, 64 111. 528; Norris v. Johnson, 34 Md. 485; Perry v. Turner, 55 Mo. 418; Gruud v. Tucker, 5 Kan. 70; Gibbs v. Davis, 27 Fla. 531; Scbalucky v. Field, 124 111. 617. See Merchants' Nat. Bank v. Bailey Mfg. Co., 34 Minn. 323. Compare Abbey v. Dry Goods Co., 44 Kan. 415; Wood worth v. Bolles, 61 Kas. 569. When the charter provides that " each stock- holder shall be jointly and severally liable to the creditors in an amount," etc., a single creditor can sue a single shareholder at law. Hall & Co. v. Kliuck, 25 S. C. 348; Sadler v. Nichol- son, 49 S. C. 7. But see Harper v. Union Manufacturing Co., 100 111. 225. These cases hold that an action at law is open to the creditor although he might have sued in equity. But under a Pennsylvania statute an action at law has been 46 held the exclusive remedy. Brinham v. Wellersburg Coal Co., 47 Pa. S. 43. See Deming v. Bull, 10 Conn. 409; Simonson v. Spencer, 15 Wend. 548. 2 Coleman v. White, 14 Wis. 700 Overmyer v. Cannon, 82 Ind. 457 Von Glahn v. Harris, 73 N. C. 323 Johnson v. Fisher, 30 Minn. 173 Terry u. Martin, 10 S. C. 263; Eames v. Doris, 102 111. 350; Tunesma v. Schuttler, 114 111. 156; Gianella v. Bigelow, 96 Wis. 185. See Smith v. Huckabee, 53 Ala. 191; Jones v. Jarmau, 34 Ark. 323; and cases in following notes. Compare Hull v. Burtis, 90 111. 213. Semble contra, Morrow v. Supreme Court, 64 Cal. 383. Where stockholders are made lia- ble to pay up their shares and also to an amount equal to the amount of their stock, a creditor may, on behalf of himself and other cred- itors, bring a suit in equity against the stockholders, the assignee in bankruptcy of the corporation and such creditors as have brought suits at law, to collect the sums due from the stockholders, distribute the same, and restrain the prosecution of the other suits. Pfhol v. Simp- son, 74 N. Y. 137. 721