Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/761

 CHAP. XIII.] SHAREHOLDERS AND CREDITORS. [§ 747. § 746. A hona fide compromise between a shareholder and the corporation has, however, been sustained. 1 And if the company actually forfeits the shares for non- payment of calls, creditors cannot hold the person whose shares have been forfeited liable for the re- maining instalments, unless the forfeiture was collusive. 3 § 747. Upon a transfer of shares made in accordance with the constitution and by-laws of the corporation, the liability of a shareholder to creditors ordinarily ceases; 3 and the transferee succeeds to all the rights and liabilities of the transferrer. 4 The transfer, however, in order to free the transferrer from further liability on account either of unpaid subscriptions or stat- utory liability, must be absolute so that the transferee does not become a trustee for the transferrer ; 5 and, moreover, must be to a person capable of succeeding to all the liabilities of the transferrer. Accordingly, a transfer to an infant leaves the transferrer liable/' as does a transfer to the corporation or its nominee; 7 for it is held that the person succeeding to the Compro- mises. Forfeit- ures. Effect of transfers of shares. Transfer to corpo- ration. who surrenders unpaid shares to the corporation is not liable thereon to creditors whose claims accrue after such surrender. Johnson v. Lull- man, 88 Mo. 567. 1 New Albany v. Burke, 11 Wall. 90; New Haven Trust Co. v. Nelson, 73 Conn. 477. See Gelpke v. Blake. 19 Iowa, 263, 267; but compare Put- nam v. New Albany, 4 Biss. 365. 2 Mills v. Stewart, 41 N. Y. 384; Allen v. Montgomery, etc., R. R. Co., 11 Ala. 437. 8 Huddersfield Canal Co. v. Buck- ley, 7 T. R. 36; Cole v. Ryan, 52 Barb. 168; Tucker v. Gilman, 121 N. Y. 189. Except according to the cases holding otherwise in regard to statutory liability. See § 718. 4 Hartford and N. H. R. R. Co. ». Boorman, 12 Conn. 530. Transferee is liable to creditors for unpaid sub- scriptions. Webster ». Upton, 91 U. S. 65. See §§ 719, 720. 5 National Bank i Case, 99 U. S. 1628; Davis v. Stevens, 17 Blatchf. j 259. Cf. Matteson v. Dent, 176 U. S. I 521. To relieve a stockholder in a ! manufacturing corporation from per- j sonal statutory liability, his stock i must have been transferred on the books of the company, and such transfer must have been made in pursuance of an actual bona fide sale, without any secret understand- ing or trust in favor of the trans- ferrer. Veiller v. Brown, 18 Hun, 571. 6 Symon's Case, L. R. 5 Ch. 298; Weston's Case, ib. 614; Costello's Case, L. R. 8 Eq. 504. See Reave- ley's Case, 1 De G. & Sm. 520; S. C, aff'd 1 Ha. & Tw. 168; Richardson's Case, L. R. 19 Eq. 588. 7 Morgan's Case, 1 De G. & Sm. 750; Bennett's Case, 5 De G. M. & G. 284; Zulueta's Claim, L. R. 5 Ch. 444; Richmond's Exrs Case, 2 De G. & Sm. 244; Ex parte Henderson, 19 Beav. 107; Daniell's Case, 22 Beav. 741