Hill & Merry v. Jackson Stores

Eish, C. j. 1. The Civil Code (1910), § 2220, declares that “Persons who organize a company and transact business in its name, before the minimum capital stock has been subscribed for, are liable to creditors to make good the minimum capital stock with interest.” Reid: (1) That the liability imposed by this statute constitutes a fund for the benefit of all creditors, so far as the condition of the company renders a resort to it necessary for the payment of its'debts. (2) That an action at law can not he maintained by one creditor among many for the appropriation of the whole or any part of such liability to his own benefit, to the possible exclusion of all or any of the other creditors, but that the remedy is in equity by a petition brought at the instance of one or more creditors and in behalf of all other creditors who may come in and be made parties plaintiff to the action. Horner v. Henning, 93 U. S. 228 (23 L. ed. 879), and cases cited; also 8 Rose’s Notes U. S. Rep. 498, and 1 Supp. Rose’s Notes U. S. Rep. 1207; Winchester v. Mabury, 122 Cal. 522 (55 Pac. 393). See Schley v. Dixon, 24 Ga. 273 (71 Am. D. 121). (a) The decisions of this court to the effect that, under charters making each stockholder in hanking corporations liable to redeem his proportionate share of the outstanding bills or indebtedness of the bank, a single creditor may sue at law any individual stockholder, are not in conflict with the ruling above announced; for there the liability of the stockholder is several, and is limited to the amount of his stock, a fixed sum easily ascertained. See Horner v. Henning, supra.. 2. Accordingly, the court properly sustained a general demurrer to a petition brought by a copartnership for its sole benefit to enforce the liability, imposed by the statute quoted in the first headnote, to the extent of plaintiff’s claim against the company, it appearing from the petition that there were other creditors of the company. Judgment affirmed. All the Justices concur, except Rill, J., not presiding.