Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/791

 CHAP. XV.] LEGAL RELATIONS AMONG SHAREHOLDERS. [§ 780. back the part of his subscription already paid, and to be re- leased from further payments, is a fraud on other shareholders : and when on the insolvency of the corporation, the receiver is enforcing subscriptions for the benefit of creditors, and is not including as shareholders the fraudulent subscribers, any share- holder may bring a bill for himself and others who may join, to compel such subscribers to assume their liabilities as share- holders. 1 § 780. Likewise is it as essentially a right of shareholders as of creditors that no shareholder shall withdraw or be released from any liability arising out of the Transfers corporate enterprise, except in accordance with the constitution of the corporation ; 2 and, except in accordance with that constitution, it is beyond the powers of the body corporate to release any of their number. 3 But it would seem that a shareholder whom the body corporate had voted to release, might, under some circumstances, have the right to be 1 Melvin v. Lamar Ins. Co., 80 111. 446. But an agreement among subscribers that one of their num- ber who subscribed as "trustee," shall not be held liable on his sub- scription, is valid as to such sub- scribers. Winston v. Dorsett Pipe Co., 129 111. 64. 2 Spackman ». Evans, L. R. 3 H. L. 171; Dixon's Case, L. R. 5 Ch. 79; Gill v. Balia, 72 Mo. 424; Bedford R. R. Co. v. Bowser, 48 Pa. St. 29. See Houldsworth v. Evans, L. R. 3 H. L. 263; Miller v. Hanover Junction R. R. Co., 87 Pa. St. 95. But see Shoe- maker v. Washburn Lumber Co., 97 Wis. 585. A decree is objectionable which confers on the receiver discretionary powers to compromise with share- holders; for each shareholder has a vested right in the subscription con- tract of every other shareholder; and it is beyond the power of a court of equity to invest any one with a discretionary right to release it. At least this cannot be done by a de- cree to which all the shareholders are not parties. Chandler v. Brown, 77 111. 333. 3 An arrangement allowing mem- bers of a company to retire under certain conditions agreed to by a public meeting of the shareholders, convened after due notice to all the shareholders, is not in itself valid unless made in accordance with the provisions of the deed of settlement; and if not assented to directly or in- directly, after due notice, by all the shareholders, it may be impeached by any one of them. But if the means of notice to all appear suffi- cient, so as to raise a clear presump- tion of knowledge and acquiescence, and the arrangement is left unim- peached for a great number of years, the shareholder who has been al- lowed to retire, and whose name has been removed from the lists of the company, will be held to be relieved from his liability as a shareholder. Evans ». Smallcomb, L. R. 3 H. L. 249. See §§ 549, 550. 771