Norris Safe & Lock Co. v. Weaver

Mr. Justice Burnett, delivered the opinion of the court. 1, 2. When the obligation was incurred, if at all, it was only to the extent of implied balances on their several subscriptions to its capital stock that stockholders could be made liable for the debts of their corporation. This is the principle enunciated in Article XI, Section 3, of the original state Constitution, reading as follows: “The stockholders of all corporations and joint-stock companies shall be liable for the indebtedness of said corporation to the amount of their stock subscribed and unpaid, and no more.” A different rule would make their association nothing more than a mere partnership, wherein each member is responsible for all just claims against it. By the plebiscite of November 5, 1912 (see Laws 1913, p. 8), this part of the organic act was amended by adding to it this language: “Excepting that the stockholders of corporations or joint-stock companies conducting the business of banking shall be individually liable equally and ratably and not one for another, for the benefit of the depositors of said bank, to the amount of their stock, at the par value thereof, in addition to the par value of such shares. ’ ’ Whatever may be the meaning of this provision it certainly cannot be extended to include those who are not depositors, but only creditors of the institution for merchandise sold to it. Neither can it be made to impair the obligation of a subscription contract made before its adoption so as to double the original liability. So far as the increased responsibility is concerned, the utmost effect it can have is to operate in favor of the depositors in a bank incorporated since the Constitution was so amended. Even then the only change is in [673] the amount and not in the basic principle of the claim against the stockholders. 3. In an action of this sort, therefore, it is necessary to show, among other things, not only for how many shares each defendant subscribed, but also how much ’ remains unpaid upon his subscription, whether measured by the original or the amended constitutional rule, so that the court may be made aware of the extent of the award to be made against him. The complaint is utterly wanting in these particulars, and hence does not state a cause of action. For aught that appears, each defendant, if a stockholder, may have paid to the corporation the full par value of his subscription and an equal amount besides. Moreover, the testimony reported as part of the bill of exceptions reveals no more than that two of the defendants signed some kind of paper, which is not in evidence and the absence of which is not legally explained. No showing whatever is made of the organization of a corporation or the issuance of stock to anyone, so as to give rise to the accountability of a delinquent stockholder. The judgment of the Circuit Court must therefore be affirmed. Affirmed.