Kimbrough v. Davies

Smith, C. J., delivered the opinion of the court. The Indianola Compress & Storage Company was a corporation engaged in the compress business at Indianola, Miss., and appellant was one of its stockholders, owning five of its shares, each of the par value of one ^hundred dollars. On November 17, 1908, its plant was destroyed by fire, and some time in the early spring or summer following, at a meeting of its stockholders, it was decided to liquidate and wind up its affairs. After setting aside from the money in its treasury a sum then deemed sufficient to pay the outstanding indebtedness of the company, there remained sufficient for the payment to each stockholder of the sum of twenty-five dollars on each share of- stock held by them. The money set aside for the payment of the debts due by the company proved to be insufficient, by reason of the fact that several suits were afterwards instituted against the company, which it seems to have successfully defended, but which necessitated the incurring of unexpected expense. Appellee, one of the creditors of this corporation, obtained a judgment against it for the sum of. six hundred and fourteen dollars and seventeen cents, and upon the return of the execution thereon nulla bona filed this bill in the court below seeking to recover from appellant and several other stockholders of the corporation their alleged unpaid subscriptions to the capital stock thereof, and also the money paid to them upon its dissolution. After-wards the bill was dismissed as to all of the defendants except appellant, and the effort to hold appellant on an unpaid subscription was practically abandoned; but a decree was asked for and obtained directing bim to pay [735] to appellee one hundred and twenty-five dollars received hy him from the corporation upon its dissolution. Appelee’s main contention is that, when he received his distributive share of the capital stock of the corporation, it was not, nor did it thereby become, insolvent, and therefore he is not liable under the provisions of section 923 of the Code. This section does not contain the full measure of the liability of a stockholder upon the withdrawal by him of a portion of the capital stock of the corporation. The capital stock of a corporation is a fund set apart, among other purposes, for that of paying the debts of the corporation; and whether or not it be a trust fund, impressed with all of the attributes of such a fund, it seems to he universally held, upon sound and plain principles of common honesty, that it cannot he withdrawn by the stockholders until all of the debts then owing by the corporation have been paid. But is is said further by appellant that, even if liable to account for the money received by him, he cannot be held to account therefor in this proceeding, because of appellee’s failure to make the other stockholders of the corporation parties defendant to his bill. In this appellant is in error. His liability to creditors is independent of the other stockholders. Again, it is said that this bill cannot be maintained,, for the reason that appellant can only be held liable, if at all, by means of a creditors ’ bill in which all of the creditors of the corporation have joined. This point seems, not to have been raised in the court below. It was not,, and of course could not have been, raised by the demurrer interposed to the bill, nor does it appear from the pleadings that there are now any creditors of this corporation other than ajppellee. This question, therefore,, is not presented by the record. Affirmed..