Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/780

 § 764.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. XIV. action occasioning the claims of such person against the corpo- ration, than to the relations with such persons after the latter have become creditors of the corporation. Statutes of this class create a liability arising through no fault of the directors, but sounding in contract ; and to repeal one of them so as to affect the relations between creditors whose debts have already arisen, and directors holding office at the time of the repeal would conflict with the Federal constitution. 1 Many of them create a liability of directors as shareholders, and indeed seem hardly applicable to directors as such. § 763. A single instance of statutes of the second class will Second suffice : " The directors or trustees of corporations c]ass - .... shall be jointly and severally liable to the creditors and shareholders for all moneys embezzled or mis- appropriated by the officers of such corporations .... during the term of office of such directors or trustees." 2 This provi- sion, which creates a liability on the part of directors for wrong- ful acts of other corporate agents far in excess of any common law or equitable liability, apparently proceeds on the idea that it is a duty, for the non-fulfillment of which a director would be liable to all persons interested, to see that the corporate funds are not misapplied. In fact, it makes him an insurer against their misapplication. And a director held to the liability imposed by a statute of this nature, himself innocent of all misfeasance, would seem entitled to contribution from his co-directors. 3 § 764. The statutes of the third and fourth classes, wmether all debts of the corporation by them contracted.' 1 Rev. Stat, of Ohio, § 3261. 1 See Hawthorne v. Calef, 2 Wall. 10; Corning v. McCullough, 1 N. Y. 47. 2 Cons, of California, 1870, art. xii. § 3. See Winchester v. Mabury, 122 Cal. 522, which holds that under this provision the only proper rem- edy is a bill in equity on behalf of all the creditors, and not an action at law on behalf of an individual creditor. 760 3 See Ash hurst v. Mason, L. R. 20 Eq. 225. Where by statute direct- ors are liable "to the creditors and stockholders of said corporations for any loss which may he sustained in consequence of any incompetency, unfaithfulness, or remissness in the discharge of their official duties . . . and any number of such directors may be sued in the same action by any claimant under these provi- sions;" the action must be brought in a court of equity. Crown v. Brainerd, 57 Vt. 625.