Court Opinion

ID: 6961351
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:46:08.313933+00
Date Added: 2024-06-11T16:08:27.124718
License: Public Domain

Mr. Justice Dickey delivered the opinion of the Court: This is a suit in chancery, brought by Harper against the Union Manufacturing Company and Taylor Williams, and others, constituting all the stockholders of that company, to coerce the payment to the complainant of a judgment of over $2000, recovered in the circuit court of Whiteside county in September, 1877, against the corporation and in favor of one Hotchkiss, for the use of the complainant. The debts were contracted in the months of March and May, 1876. It is alleged in the hill that the defendant stockholders were each stockholders of the corporation at the time these debts were contracted by the corporation, each to the- extent of at least $3000. In June, 1877, the corporation had become insolvent, and made an assignment for the benefit of it's creditors of all of its property and effects to George W. Nance. The liability of the defendant stockholders, mentioned in the bill, is placed upon two grounds: The first ground rests upon the allegation that each of the defendant stockholders was indebted to the corporation upon a stock subscription,— this allegation is not supported by the proofs. The second ground rests upon the allegation that, at the time these debts were contracted by the corporation, the whole amount of its capital stock had not been paid in, and a certificate thereof made and filed in the office of the clerk of the circuit court of the county wherein the business of the company was transacted. The liability, on this account, of the defendant stockholders is claimed upon the provisions of the 9th and 10th sections of the act of 1857, relating to corporations of this character. Section 9 declares: “All the stockholders of every such company shall be severally individually liable to the creditors of the company to an amount equal to the amount of stock held by them, respectively, for all debts and contracts made by such company prior to the time when the whole amount of its capital stock shall have been paid in, and a certificate thereof made and filed as hereinafter required. ” Section 10 provides for the making, by a. majority of the directors of the company, of a sworn certificate, stating the amount of the capital stock, and that it has all been paid in; and for the filing of the same in the office of the clerk of the circuit court of the proper county. The 16th section of chapter 32 of the Revised Statutes of 1874, is as follows: “If the indebtedness of any stock corporation exceed the amount of its capital stock, the directors and officers of said corporation assenting thereto, shall be personally and individually liable for such excess to the. creditors of such corporation. In the case of Low v. Buchanan, 94 Ill. 76, this court, in construing this latter section, held that the phrase “to the creditors, ” meant to “all the creditors; ” and that the liability in such case of such directors and officers was “not to some particular creditor, but to all the creditors.” It is not perceived that the language of the 9th section of the .act of 1857 can admit of any other or different construction than that given to the 16th section by this court in the case of Low v. Buchanan.. It follows, whatever may be said in relation to other questions raised and discussed by counsel in this case, that the relief sought in this behalf could only be had upon a bill brought by, or at least in behalf of, all the creditors of the corporation. This bill being brought but by one creditor, and in his own behalf, alone, and no application having been made to the court for leave to amend in this respect, the circuit court was clearly right in dismissing the bill. The assignee of the corporation was also a necessary party. It would clearly be inequitable to require the individual stockholders to pay any portion of the liability of the corporation until the assets of the corporation were exhausted. These, as shown by the record, were in the hands of an assignee. We are also inclined to think that the provisions of the act of 1857, upon which this claim rests, were superseded and became inoperative by reason of the general law of 1872, upon the same subject; but we find it unnecessary in disposing of this case to adjudge that question. The judgment of the Appellate Court is therefore affirmed. Judgment affirmed.