Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/743

 CHAP. XIII.] SHAREHOLDERS AND CREDITORS. [§ 727. bility of stockholders in a corporation is always a creature of statute. It does not exist at common law. The first thing to be determined in all such cases is, therefore, what liability has been created. There will always be difficulty in attempt- ing to reconcile cases of this class in which the general ques- tion of remedy has arisen, unless special attention is given to the precise language of the statute under consideration. The remedy must always be such as is appropriate to the lia- bility to be enforced. The statute which creates the liability may declare the purpose of its creation and provide directly or indirectly a remedy for its enforcement. If the object is to provide a fund out of which all creditors are to be paid, share and share alike, it needs no argument to show that one cred- itor should not be permitted to appropriate to himself, without regard to the rights of others, that which is to make up the fund. " The language of the charter is peculiar. The stockhold- ers are not made directly liable to the creditors. They are not in terms obliged to pay the debts, but are ' liable and held bound .... for any sum not exceeding twice the amount of .... their .... shares.' This we think means that on the failure of the bank, each stockholder should pay such sum, not exceeding twice the amount of his shares, as shall be his just proportion of any fund that may be required to discharge the outstanding obligations. The provision is, in legal effect, for a proportionate liability by all stockholders. Undoubtedly the object was to furnish additional security to creditors, and to have the payments when made applied to the liquidation of debts. So, too, it is clear that the obligation is one that may be enforced by the creditors ; but as it is to or for all creditors, it must be enforced by or for all. The form of the action, there- fore, should be one adapted to the protection of all. A suit at law by one creditor to recover for himself alone is entirely in- consistent with any idea of distribution. As the liability of a stockholder is not to any individual creditor, but for contribu- tion to a fund, out of which all creditors are to be paid alike, the appropriate remedy is by suit to enforce the contribution, and not by one creditor alone to appropriate to his own use that which belongs to others equally with himself." § 727. The Federal Supreme Court has also rendered an 723