Court Opinion

ID: 7201076
Source: CourtListenerOpinion
Date Created: 2022-07-24 17:08:10.541055+00
Date Added: 2024-06-11T16:16:31.629011
License: Public Domain

ELLIOTT, J.,
concurring. It is not alleged nor shown that the present suit was authorized by a " board of directors as provided for by Act 267 of 1914, Sections 9 and 12. The amount due on his ’subscription by a stock subscriber is an asset of the corporation while the corporation is operating, and is -a going concern, but when it ceases to function and passes into the hands of a receiver, then the balance due by a stock subscriber on account of his subscription can be called in for' the purpose of paying creditors or for the purpose of an adjustment between the stockholders themselves, but not otherwise.
Plaintiff’s action is -therefore inhibited by Section 13 of -Act 267 of 1914. Section 13 was cited by the Court in State vs. Atchafalaya-Teche-Vermilion Co., 155 La. 882, 99 So. 633, but the present question was not before' the Court and was not decided.
. A similar question was considered and decided by the Supreme Court of the United States in Fourth National Bank vs. Franklyn, 120 U. S. 747, and Evans *95vs. Nellis, 187 U. S. 271. The first case involved an interpretation and application of a statute of Rhode Island, which according to the report must have contained a provision similar to Section 13. The other case involved the interpretation and application of a statute of Kansas, which according to the report must also have contained a provision similar to Section 13 of Act 267 of 1914. It was substantially held in both cases that as a prerequisite to a suit in equity against a stockholder to enforce his liability for a stock subscription, a judgment must generally be obtained against a corporation and an execution issued and returned nulla bona, as stated in Ruling Case Law, Vol. 7, ■ Subject,' Corporations, Section 376, page 391.
I, therefore, contend that the judgment appealed from is correct and should be affirmed.