Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/745

 CHAP. XIII.] SHAREHOLDERS AND CREDITORS. [§ 729 - stock held by all the shareholders ; (2) the amount of the de- ficit to be paid after exhausting all the assets of the bank ; (3) then to apply the rule that each shareholder shall contribute such sum as will bear the same proportion to the whole amount of the deficit as his stock bears to the whole amount of the capital stock of the bank at its par value." i § 728. Under statutes by which shareholders are made lia- ble to a certain limited amount, determined either by the number of shares held by them respectively, guish-" or by the proportion borne by that number to the ^binty. total capital stock, a shareholder may extinguish his liability by paying a debt of the corporation equal in amount to the sum for which he is liable. 2 § 729. A shareholder, however, indebted to an insol- vent corporation for unpaid subscriptions, cannot, against his liability therefor, set off a debt owing him Set-off. Unpaid subscrip- tions. 1 United States v. Knox, 102 U. S. 425. After such an assessment on the shareholders of a national bank has been made, a suit at law may properly be brought by the receiver to collect it. Bailey «. Sawyer, 4 Dill. 463. Sec. 50 of the National Banking Act of 1864, which provides that suits to which officers or agents of the United States are parties shall be conducted by the district attorney, is so far but directory that it cannot be set up by shareholders to defeat a suit brought against them by a receiver, who, with the approval of the Treasury Department, had employed private counsel. In such a suit it is neces- sary that action on the part of the comptroller of the currency touching the personal liability of the share- holders, should precede the institu- tion of any suit by the receiver, and the fact must be averred in the bill. It is no objection to such a bill that shareholders without the jurisdic- tion of the court are not made par- ties; and creditors are not proper parties to it. Kennedy v. Gibson, 8 Wall. 498, followed in Casey v. Galli, 94 U. S. 673. The liability of share- holders in national banks survives the death of a shareholder, and at- taches to his representatives. Rich- mond v. Irons, 121 U. S. 27. But it does not arise in respect to debts contracted after the bank has gone into liquidation. lb. 3 Garrison v. Howe, 17 N. Y. 458; Woodruff, etc., Iron Works v. Chit- tenden, 4 Bos. (N. Y. ) 406; Jones v. Wiltberger, 42 Ga. 575; Boyd v. Hall, 56 Ga. 563; San Jose Savings Bank v. Pharis, 58 Cal. 380; Thomp- son v. Meisser, 108 111. 359. When shareholders are liable to the amount of their stock, and a shareholder pays a corporate debt equal to the amount of his shares, he cannot be held liable again as to those shares, nor can the assignee of them be held liable. Trebus v. Smiley, 110 111. 316. After a creditor, however, has be- gun a suit against a shareholder, then the latter cannot defeat him by paying another debt of the corpora- tion. Jones v. Wiltberger, supra. 725