Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/752

 § 736.] THF LAW OF PRIVATE CORPORATIONS. [CHAP. XIII. repealed before suit was brought against the shareholder. 1 And when, a statute, on failure to comply with which share- holders are made liable, has been substantially complied with, this, where the creditor is not injured, may absolve a share- holder from liability. 2 § 736. When, according to the construction put on the statute, the individual liability of shareholders is fimitatlons primary or co-ordinate with that of the corporation, and not contingent on the inability of the creditor to satisfy his claim from the corporate assets, the statute of limitations begins to run from the time when the debt matures against the corporation. 3 And under a statute providing that " if any loss or deficiency of the capital stock in any bank shall arise from the official mismanagement of the directors, the stockholders at the time of such mismanagement shall in their individual capacities be liable to pay the same," the Massa- chusetts Supreme Court holds that the statute begins to run from the happening of the loss or deficiency in respect of which the liability exists. 4 If, however, the liability of share- holders is contingent on the inability of the corporation to discharge the debt and the exhaustion of the legal remedies of the creditor against it, then the statute of limitations does not run against the liability of the shareholders until the creditor has had a reasonable time to exhaust his remedies against the corporation. 5 1 Jerman v. Benton, 79 Mo. 148. a Booth v. Campbell, 37 Md. 522. 3 Davidson v. Rankin, 34 Cal. 503; Hyman v. Coleman, 82 Cal. 650 ; Lindsay v. Hyatt, 4 Edw. Ch. (N. Y.) 97; compare Allibone v. Hager, 46 Pa. St. 48. See, also, Terry v. Mc- Lure, 103 U. S. 442; Carroll v. Green, 92 U. S. 509. But see Mitchell v. Beckman, 64 Cal. 117 ; Hawkins v. Furnace Co., 40 O. St. 507; Young- love v. Lime Co., 49 O. St. 663. 182. 5 Longley v. Little, 26 Me. 162. See Handy o. Draper, 89 N. Y. 334: Kilton Warren Co. v. Prov. Tool Co., 732 22 R. I. 605. Where a statute enacts that when "a corporation has un- lawfully made a division of its prop- erty, or has property which cannot be attached or is not by law attach- able, any judgment creditor may file a bill in equity" to obtain the satis- faction of his debt from such prop- erty, the right of action conferred does not accrue until the return of execution unsatisfied; and not till then does the statute of limitations begin to run. Taylor v. Bowker, 111 U. S. 110. Wben a bank charter contains provision making shareholders lia- ble for the " ultimate redemption of
 * Baker v. Atlas Bank, 9 Mete.