other assets-at least to the extent that they are necessary for the payment of its debts.-Smathers v. Western Carolina Bank, 47 S. E. 893, 135 N. C. 410. (Ohio) The creditors of an incorporated company, and all who may be interested in its safety or solvency, may well ask that the fund on which they rely shall really exist, not on paper, but in money, and be held sacred to discharge corporate liabilities. Hence, if a stockholder has not fully paid the amount stipulated for the shares he has subscribed, the sum yet due may be reached by a creditor of the corporation, should it become necessary to charge it; and it is no answer to such a demand by the creditor that the interest upon installments already paid should be allowed to extinguish the principal sum still due.-Wood v. Pearce, 2 Disn. 411.

(Tex.) The unpaid subscriptions of corporate stock form a part of the assets of the corporation to which the holders of its bonds may look for satisfaction of their claims.-United States & Mexican Trust Co. v. Delaware Western Const. Co., 112 S. W. 447.

(Utah) A corporation was organized under Comp. Laws 1888, § 2268, amended by Laws 1896, c. 87, permitting the payment of stock to be made in property. There was no evidence of fraud, and the mining claims in the leases and bonds transferred in payment of stock were situated in a mining district where there was much activity at the time. One of the claims had been a heavy producer, and had been extensively worked, and there was still much low-grade ore in sight, and about $10,000 in ore was afterwards extracted. The stockholders paid into the treasury voluntary assessments in cash, which, together with sales of ore, aggregated $35,000, which was expended in operating and developing the mine. Held, that the evidence did not show that the subscriptions remained unpaid and subject to the claims of creditors. -Richardson v. Treasure Hill Min. Co., 65 Pac. 74, 23 Utah, 366.

(Utah) Const. art. 12, § 5, provides that corporations shall not issue stock, except to bona fide subscribers therefor, or their assignee, or issue any obligation for payment of money, except for money or property received, or labor done, and that all fictitious increase of stock, or indebtedness, shall be void. Section 11 provides that no corporation shall issue stock or bonds, except for money paid, labor done, or property actually received. Comp. Laws 1907, § 316, provides that property may be received in payment for stock, but if so, it must be described in the articles of incorporation, and its fair cash value stated, which statement, except for corporations created for mining and irrigation, must be supplemented by affidavit that the property is reasonably worth the amount in cash stated, for which it is received. Section 432, relating exclusively to railroads, provides that a certificate of incorporation shall not be issued to any railroad company until it appears by affidavit that $1,000 for each mile of the proposed railroad has been subscribed, and that 10 per cent. of the amount subscribed by each subscriber has been paid. Section 331 provides that the property of a corporation and the unpaid capital stock shall be liable for the debts of the corporation. Held, that the capital stock of corporations, except those created for mining and irrigation, must represent full actual value, either in money or property, and the subscribers for stock must pay 100 cents on the dollar, or its equivalent, for their stock, and until so paid they are liable to creditors of the corporation for any balance remaining unpaid on their subscriptions.-Rolapp v. Ogden & N. W. R. Co., 110 Pac. 364.

II. FORMATION OF NEW COMPANY OR ISSUANCE OF NEW STOCK.

(Ill.) Defendant, a stockholder in a corporation, on the latter's merging in another company, exchanged his stock for stock in the new company. His note for unpaid subscription, given to the first company and secured on real estate, came into the hands of the new company. Defendant sold the real estate and the purchaser gave the company a new note, and received defendant's note from them. The new note being negotiated, defendant purchased it for a trifle. The court having found that these transactions were a device of defendant to escape liability, and that defendant was a stockholder in the new company owing subscriptions to the amount of the note less what he had paid on it, held, that though the company, having ratified the transactions, was

bound thereby, its creditors were not.-Bouton v. Dement, 123 Ill. 142, 14 N. E. 62.

(Ill.) Where a corporation issued no certificates of stock until the stock was fully paid for, and certain subscribers paid nothing on their subscriptions, or only a small portion thereof, and afterwards assigned their stock to the corporation or surrendered their stock to the company, and it was declared and treated by the company as forfeited to it, and afterwards the company took new subscriptions for all this surrendered, assigned, and forfeited stock, and such new subscriptions were paid in full, so that the corporation received full payment for the entire amount of its capital stock, there remains no fund of capital stock unpaid to which a creditor can resort in equity; and it was immaterial, as affecting such right, that the company undertook to prefer the payment of dividends on the new stock.-First Nat. Bank v. Peoria Watch Co., 93 Ill. App. 502, judgment affirmed 191 Ill. 128, 60 N. E. 859.

(Iowa) A stockholder who had subscribed and paid for three shares of stock allowed three additional shares, which were issued to him, to stand in his name on the books of the corporation, and did not offer to return the certificates or disclaim ownership. He testified that he did not agree to pay for such additional stock, and did not know why it was issued, unless there was an arrangement to give each subscriber a double amount. Held, that he was liable on the additional shares, as for an unpaid subscription, to corporate creditors.-Tuthill Spring Co. v. Smith, 90 Iowa, 331, 57 N. W. 853.

(Ky.) The liability of stockholders to creditors for unpaid subscriptions under Ky. St. 1903, § 547, is not affected by the fact that their subscriptions were to be paid by the surrender of old stock, but in such case they will be held liable for the difference between the amount they actually paid and the amount of stock they received at par value.-Kentucky Mut. Inv. Co.'s Assignee v. Schaefer, 85 S. W. 1098, 120 Ky. 227.

(Me.) When, on payment of 60 per cent. of its par value, as many shares of new stock as they have of old are duly allotted to stockholders, the unpaid 40 per cent. is a part of the assets of the corporation, and "stands for the security of all creditors thereof," within the meaning of Rev. St. c. 46, § 45.McAvity v. Lincoln Pulp & Paper Co., 82 Me. 504, 20 Atl. 82.

III. EFFECT OF ARTICLES OF ASSOCIATION OR CONTRACTS.

(U. S.) Under the articles of association the original subscribers to the stock of a railroad corporation undertook to pay for the shares mentioned in their several subscriptions, but with the qualification that if a certain city should be a subscriber for a certain amount, it should accept what they had subscribed above a certain amount. Held, that such subscribers were not liable to the creditors of the corporation for such excess as for unpaid subscriptions, the city having subscribed for the requisite amount and accepted a transfer of stock from the subscribers, to the amount of such excess.-Burke v. Smith, 83 U. S. (16 Wall.) 390, 21 L. Ed. 361.

(U. S.) A provision in stock notes, that dividends should be applied on the notes, does not affect the rights of creditors of a bankrupt corporation to the full amount of subscriptions.-Wilbur v. Stockholders, Fed. Cas. No. 17,636. (U. S.) Laws N. J. 1896, p. 284, c. 185, § 21, declares that where the whole capital of a corporation shall not have been paid in, and the capital paid shall be insufficient to satisfy its debts, each stockholder shall pay on each share held by him the sum necessary to complete the amount of such share, as fixed by the charter of the corporation, or such proportion thereof as is necessary to satisfy corporate debts. Held, that where a corporation directed the sale of certain of its stock of the par value of $100 per share at $25, and that the proceeds be used for regular expenses, the original purchasers of such stock were subject to assessment for the balance of the par value thereof, or so much as was necessary for the payment of corporate debts. Order (D. C.) 139 Fed. 766, modified.-In re Remington Automobile & Motor Co., 153 Fed. 345, 82 C. C. A. 421.

(Ill.) Where a contract of subscription for corporate stock provides that, on payment of 40 per cent. of the par value of the stock, the subscribers shall receive certificates of stock, a decree directing the issuance of such certificates

on payment of said 40 per cent. does not relieve the subscribers, as against creditors of the corporation, from liability for the remaining 60 per cent.— Bates v. Great Western Tel. Co., 134 Ill. 536, 25 N. E. 521, following Great Western Tel. Co. v. Gray, 122 Ill. 630, 14 N. E. 214.

(Ind.) Where the articles of a corporation organized under the manufacturing and mining acts-Burns' Rev. St. 1894, §§ 5051-5063 (Rev. St. 1881, §§ 3851-3863; Horner's Rev. St. 1897, §§ 3851-3863)—and recorded in the office of the county recorder and secretary of state, as required by such act, provide that only 15 per cent. of the par value of the stock subscribed by the stockholders shall be collected, and that such limitation shall not be changed except by the unamimous consent of the stockholders, and show the amount of stock subscribed by each stockholder, and the cash paid therefor, the unpaid portion of such stock is not an asset for the benefit of the corporation creditors on its becoming insolvent, since the recorded articles give notice of the liability of the stockholders.-Bent v. Underdown, 60 N. E. 307, 156 Ind. 516. (Iowa) Code 1873, § 1082, which provides that nothing contained in the chapter on corporations, nor any provision in the articles of incorporation, shall exempt the stockholder from individual liability to the amount of his unpaid subscriptions, does not apply where, by a valid agreement, to which the original creditor was a party, nothing is due or collectible on the stock.— Callanan v. Windsor, 78 Iowa, 193, 42 N. W. 652.

(Mo.) Where persons become stockholders of a corporation with the understanding that calls are not to exceed a certain per cent., and afterwards calls are made in excess of that amount, to compensate for which second mortgage bonds are issued to these stockholders, they are liable to the creditors of the corporation for unpaid stock to the amount realized by the sale of the bonds.-Skrainka v. Allen, 7 Mo. App. 434; Id., 76 Mo. 384.

(Mo.) Where by the plan of organization of a corporation, to which plaintiff, who loaned the corporation the money with which to do its business, was a party, it was agreed that defendant should pay for his stock by giving the corporation a contract that it might for a fixed period sell all the product of his furnaces, which he did, he is not liable to plaintiff for part of the debt, as not having paid for his stock.-Euston v. Edgar, 105 S. W. 773, 207 Mo. 287.

(Or.) Under Hill's Ann. Laws, § 3587, declaring that all moneys bear interest after they become due, subscriptions to corporate stock under a contract that payments thereon shall be in monthly installments, without demand, a decree in favor of creditors of a corporation against members for unpaid subscriptions properly charged interest from the date the last installments were due, as the subscriptions were assets, and the creditors were entitled to interest thereon.-Hawkins v. Citizens' Real-Estate & Investment Co., 64 Pac. 320, 38 Or. 544.

(R. I.) Civ. Code Mont. 1895, § 470, provides that stockholders of a corporation shall be severally liable to its creditors for all its acts and contracts to the amount of unpaid stock held by them, respectively. Section 410 declares that the directors of a corporation may purchase mines and other properties for its business, and issue stock in payment thereof, to the amount of the sum arbitrarily fixed as the value thereof, and that the holders of such stock shall not be liable for further payments under section 470. Promoters of a corporation held an option on mining land in Montana for $30,000, and said amount was paid to a director, to be paid to the owner of the mine. Under an agreement with other subscribers, the mine and equipment were to be turned over to the company in full payment of their stock subscriptions amounting to $57,000, but there was no actual purchase, nor issue of stock. Held that, the deal not being consummated, said promoters were liable for the $27,000 unpaid on their stock subscriptions.-Crowley v. Walton, 50 Atl. 385, 23 R. I. 331.

(Tex.) Under a charter imposing on a stockholder only a liability to pay for the stock subscribed, the portion of his subscription remaining unpaid may be reached by a creditor of the corporation, upon proper allegations as to the amount, etc.-Walker v. Lewis, 49 Tex. 123.

(Wash.) Where a subscription contract for stock of a corporation provided that the subscriber was to pay par value for each share, and, in addition, $50

to go into a surplus fund, the stockholder was liable to creditors for any unpaid balance on the part going to the surplus fund, as well as on that going to the capital stock.-Johns v. Clother, 139 Pac. 755.

IV. ENFORCEMENT IN EQUITY.

(U. S.) Unpaid subscriptions to capital stock of a corporation are corporate property, and where the corporation does not choose to exercise its right to call in the stock subscriptions, a court of equity, at the instance of the creditors of the corporation, will exercise that right.-Marsh v. Burroughs, Fed. Cas. No. 9,112 (1 Woods, 463).

(Ark.) A stockholder is liable in equity for the debts of the corporation to the amount of his unpaid stock subscription.

-Ford Hardwood Lumber Co. v. Clement, 135 S. W. 343;

(Cal.) Harmon v. Page, 62 Cal. 448.

(Ill.) A corporation was organized to build dams across two rivers. A city delivered to one of the subscribers $60,000 in its bonds, to be applied in this work or to be returned. Thé subscriber turned over the bonds to the corporation upon its guaranty so to use them. The dams were built and stock issued to the several subscribers, for which they paid nothing, and some of which they sold. Held, that creditors of the corporation who could not collect their judgments from the corporation could pursue the subscribers in equity. Hickling v. Wilson, 104 Ill. 54.

(Ill.) Under a Michigan statute providing that the board of directors of a mining corporation may call in the subscription to the capital stock by installments, and, if a stockholder fails to pay, the stock may be sold, no personal liability for unpaid subscriptions exists in favor of creditors of the corporation, and a bill will not lie in Illinois by creditors to compel the payment of stockholders of their claims out of the unpaid subscriptions.-Farwell v. Wadsworth, 35 Ill. App. 469.

(Mo.) In a suit in equity by a creditor of a corporation to enforce a stockholder's liability for unpaid stock subscriptions, it is not necessary to show fraud. Shields v. Hobart, 72 S. W. 669, 172 Mo. 491, 95 Am. St. Rep. 529.

(N. J.) Five persons bought a tract of land, paying therefor $50,000, a part being the bond and mortgage for $25,000 of their corporation afterwards organized. They conveyed it to the corporation for $100,000, thereby giving themselves credit for $50,000, or 50 per cent. of the capital stock ($100,000), the resolution stating that the company took the lands subject to a mortgage of $50,000. No money was ever paid on account of the stock subscribed, the five persons being equal corperators. The holder of the bond, the mortgagee, recovered a judgment against the corporation thereon, and, on bill filed in chancery for relief, held that, in order to satisfy such judgment, the stock was assessable to the extent of 50 per cent. of its par value.-Wetherbee v. Baker, 32 N. J. Eq. (5 Stew.) 537.

(N. M.) Unpaid subscriptions to the stock of a corporation are, in equity, a trust fund for the benefit of creditors.-Albright v. Texas, S. F. & N. R.. Co., 40 Pac. 448, 8 N. M. 422.

(N. Y.) Where the proper agents of a manufacturing corporation, in New York, neglect to call in debts due by the stockholders, so as to enable it to pay its debts, a creditor of the corporation is entitled to a bill in chancery to compel such agents to enforce contribution from the stockholders according to their subscriptions.-Briggs v. Penniman, 8 Cow. 387, 18 Am. Dec. 454.

(Or.) In a suit in equity against stockholders who have not paid for their stock, where no evidence of the insolvency of any of them is presented, the decree should be against each of them in proportion to his unpaid stock.Hodges v. Silver Hill Min. Co., 9 Or. 200.

V. ENFORCEMENT IN BANKRUPTCY OR ON INSOLVENCY.

Stockholders of an insolvent corporation are liable to the creditors for unpaid subscriptions to stock.

(U. S.) Stockholders of a bankrupt corporation are liable to creditors to the full amount of their unpaid subscriptions, although by their charter no one assessment could be for more than 50 per cent. of their subscription.— Wilbur v. Stockholders, Fed. Cas. No. 17,636.

(U. S.) The provision of the New Jersey general corporation act (P. L. 1896, p. 283, c. 185, § 18) that "in no event shall a holder of preferred stock be personally liable for the debts of the corporation, but in case of insolvency its debts or other liabilities shall be paid in preference to the preferred stock," does not affect the liability of preferred stockholders to calls and assessments made by the directors, or the court in case of insolvency, for unpaid installments up to the par value of the stock, to which such stockholders are subject under sections 21 and 22 of the act (P. L. 1896, p. 284), equally with holders of common stock.-Kirkpatrick v. American Alkali Co., 140 Fed. 186. (U. S.) It was no defense to a stockholder's liability for calls levied by a receiver to pay creditors that he had made an unlawful compromise of a claim by the corporation against an officer.-Brown v. Allebach, 166 Fed. 488.

(Cal.) Since Civ. Code, § 322, declaring that, if any stockholder pays his proportion of any corporate debt, he is thereby released from any further personal liability therefor, does not affect the stockholder's liability to the corporation for unpaid subscriptions, a stockholder's payment to a corporate creditor of the amount due on his unpaid subscription, in reduction of the corporation's debt, he knowing it to be insolvent, will not relieve him from liability in an action by other creditors to recover such unpaid subscription, in the absence of evidence of a corporate act authorizing such creditor to make such application of the amount due.-Welch v. Sargent, 59 Pac. 319, 127 Cal. 72.

(Ga.) Where stockholders of a corporation indebted to it on account of unpaid stock subscriptions, while the corporation was insolvent, by resolutions declared dividends on the basis of assets which were not profits, though so called in the proceedings, and caused to be entered on the corporate books the amounts so declared as dividends to the credit of the stockholders respectively, and thus sought to reduce their liability on account of such stock, such attempted reduction of liability was not valid as against creditors of the corporation or a trustee in bankruptcy.-Crawford v. Roney, 61 S. E. 117, 130 Ga. 515.

(Ga.) In an action by a trustee in bankruptcy of a corporation to recover a balance due on a subscription to the corporation's stock, the subscriber is not entitled to a credit of dividends unless they have been earned by the corporation when declared.-Roney v. Crawford, 68 S. E. 701.

(Ga.) One who subscribes for stock in a corporation under a contract providing for special terms and conditions of payment, which constitute a legal fraud upon other stockholders or creditors, is liable to the creditors, after the insolvency of the corporation, for the unpaid balance due on his subscription, irrespective of the conditions.-Spratling v. Westbrook, 79 S. E. 536, 140 Ga. 625.

(Ga.) In an action by a receiver of an insolvent corporation organized before the minimum capital stock had been subscribed, under Civ. Code 1895, § 1856, providing that persons organizing a corporation and transacting business under such circumstances shall be liable to creditors to make good the minimum capital stock, with interest, the measure of liability was the difference between the amount of stock subscribed and the amount required by the charter to be subscribed as the minimum capital before the transaction of any business, such amount or portion thereof being necessary to the payment of corporate debts.-Walters v. Porter, 59 S. E. 452, 3 Ga. App. 73; Porter v. Walters, Id.

(Ga.) Whether an unpaid subscription to the stock of an insolvent corporation shall be enforced to equalize stockholders who have paid their subscriptions in full is within the discretion of the court administering the corporation's affairs.-Graves v. Denny, 84 S. E. 187.

(Ill.) A stockholder in an insurance company is not legally bound to pay more of his subscription, or notes given therefor, than may be necessary to satisfy outstanding debts, when the corporation is insolvent, and its effects are placed under the control of a receiver.-Lamar Ins. Co. v. Moore, 84 Ill. 575.