Sims v. Cox. of cotton, in good order, averaging in weight four hundred pounds to the bale, and averaging in quality middling; and said Sims guaranteed to said Cox, that said cotton would be worth to him sixteen and one-half cents per pound, in the common currency of the country. When the time for payment came, cotton was worth twenty six and one-half cents per pound in the market. Sims refused to deliver the cotton, and tendered to Cox its value, estimated at sixteen and one-half cents per pound, in payment of the claim. This Cox refused to receive, and brought this suit for the market value of the cotton at the time it was due. And the question for adjudication in the court below was as to the measure of damages. The court held, that the value of the cotton at the time it was due was the amount to which plaintiff was entitled, which the jury found. And this ruling is assigned as error. Construing the two contracts together, and looking to all the facts and circumstances of this transaction, we think the parties intended to stipulate what should be the measure of damages, in case of the non-delivery of the cotton, or in case it should not be worth sixteen and one-half cents per pound when due. Sims had Furchased the plantation and stock for two hundred bales of cotton, to be delivered as stipulated in the first contract, and had guaranteed that the first hundred bales should be worth $100 per bale, in gold, with the privilege to pay that sum per bale in lieu of the cotton. It is a well-known fact that the price of cotton had declined very rapidly, and Sims, no doubt, found himself unable to deliver the cotton and make good the guarantee, or to pay the $10,000 in gold. Cox then required one hundred bales of cotton, onehalf of the whole number agreed upon as the price of the plantation, as a consideration for the rescission of the contract. And as Sims could pay but eighty bales, he agreed to take them, and give him one year to make the other twenty bales, but required a guarantee from Sims that the cotton on which he gave the indulgence should be worth to him sixteen and one-half cents per pound. In other words, he fixed the price of a rescission of the contract at eighty bales of cotton, paid down, and twenty more, to be worth sixteen and one-half cents per pound, payable in twelve months thereafter. We think the just and fair construction of the contract is, that the parties agreed upon eighty bales of cotton to be delivered then, and twenty more, worth sixteen and one-half cents per pound, the VOL. II.-71. Sims v. Cox. next February, as full satisfaction to Cox. In case the cotton had been worth only six and a half cents per pound when due, the measure of damages stipulated for would have been sixteen and onehalf cents per pound, or ten cents per pound more than market value. On the other hand, as it was worth twenty-six and one-half cents, we think sixteen and one-half cents, or ten cents less than the market value, was still the measure of damages stipulated by the parties. This was mutual and just. Chipman on Contracts lays down the rule, as follows: "If A. give B. a note for $100, payable in wheat, at a future day, at seventy-five cents per bushel, and wheat, on the day of payment, be $1 per bushel, A. may, at his election, pay in wheat of an average quality, at seventy-five cents per bushel, or pay $100 in money. "All agreements to pay in specific articles are presumed to be made in favor of the debtor, and he may, in all cases, pay the amount of the debt in money, in lieu of the articles, which, by the terms of the contract, the creditor had agreed to receive instead of money. Poth. on Obl., No. 497. This case falls within the same principle, and the debtor may pay the money instead of the wheat, for the nature of the contract is this: The creditor agreed to receive wheat instead of money, and as the parties concluded that the price of wheat would, at the time of payment, be seventy-five cents pe bushel, to avoid any dispute in relation to the price, fixed it in the contract at seventy-five cents per bushel, and if wheat at the time of payment be at fifty cents per bushel, still the debtor may pay in wheat at seventy-five cents." See Chipman on Contracts, 35 and 36; 3 Conn. 60; 5 Wend. 393. We think this case falls within the rule laid down by this author, and the decisions referred to. Judgment reversed. Reid v. The Eatonton Manufacturing Company. REID et al., plaintiff in error, v. THE EATONTON MANUFACTURING COMPANY et al. (40 Ga. 98.) Corporations-Personal liability of stockholders. ▲ corporation cannot, by resolution or by-laws, impose personal and individual liability upon its members, unless the power is specifically granted in the charter or by general statute. The capital stock is the fund out of which the debts of a corporation must be paid, and dividends of profits already paid to the stockholders cannot be reached by creditors of the corporation. Funds due to a corporation (as for rent) may be reached by proper process. CREDITOR'S BILL. The Eatonton Manufacturing Company was incorporated in 1835, and, having no capital except that invested in buildings and machinery, relied on borrowing money for running the factory. Their charter imposed no personal liability on the stockholders, and in order to obtain credit said stockholders, in 1849, met and enacted a series of by-laws, by which they pledged their individual credit in proportion to the shares held by each. On this understanding Reid became the creditor of the company and obtained judgment to the amount of $20,000. In 1861 the company suspended operations, and during the following year the factory was hired and run by the Putnam Manufacturing Company, at a rent of $2,000, which was never paid, although the profits were very large. In 1862 the corporation again resumed operations and continued until 1864 (when the factory was destroyed by Sherman's army), making immense profits, and distributing dividends regardless of Reid's claim of $20,000. In one year the dividends were $240,000 and the subsequent year, $250,000. A mill belonging to the corporation has been run by the president thereof since the suspension in 1864. The company is dissolved and owes $60,000, with corporate assets of $10,000. The creditors now claim said rent, dividends and the profits on the mill, or so much as will satisfy their demands; and that the stockholders be held personally liable for the indebtedness pro rata. The bill was dismissed, and the case is brought to this court on errors assigned. Wingfield & Capers, for plaintiffs in error. Thomas G. Lawson Nesbits & Jackson, for defendant. Reid v. The Eatonton Manufacturing Company. BROWN, C. J. The charter of this company contains no individual liability clause, and no general statute of this state imposed any such liability when the charter was granted. And we hold that it was not in the power of a majority of the stockholders, by any by-law which they might pass, to impose any such liability. This very question is decided by the supreme court of Massachusetts in the Trustees, etc., v. Flint, 13 Met. 539. In that case the charter imposed no personal liability upon the stockholders. But, under the usual power given for that purpose, the stockholders met and enacted by-laws, of which the following was one: "The members of this association pledge themselves in their individual, as well as their collective, capacity, to be responsible for all moneys loaned to this association, and for repayment of which the treasurer may have given his obligation, agreeably to the direction of the directors." This by-law was printed and distributed by the corporators. John Flint, as the treasurer, afterward executed the note sued upon under this by-law. Judgment was obtained against the corporation, and execution issued, and was returned "wholly unsatisfied." Suit was then brought against Flint as a stockholder, and the supreme court of Massachusetts held that he was not liable. They say: "It is not, in the opinion of the court, within the powers conferred upon this and similar corporations to impose upon their members, by any such by-law, any personal and individual liability to third persons, beyond such as are specified in the charter, or in the general laws of the commonwealth. Such a power would be liable to great abuse, and would subject any member of a corporation, however liberal its charter in excluding individual liability, to be made responsible for the entire indebtedness of the corporation." The court adds: "The proposed evidence (of the declarations of the defendant that such liability existed) would therefore be inadmissible on the trial of this case before the jury, as it would not tend to change the defendant. Whether for such false representations he may be held responsible to those to whom he made them, or who may have lent their money upon the faith of them, is a question not now before us" We think this decision sound law, and we adopt it in this case. 2. Upon the other question made by this record we are also well satisfied. There is no allegation, by complainants in the bill, that the corporation was insolvent when the dividends were made, or that there was any fraud or collusion to their injury. At that time Reid v. The Eatonton Manufacturing Company. the company was doing a profitable business, and the property held by them as capital stock was amply sufficient for the payment of all the indebtedness of the corporation. The dividends were no doubt made in good faith, without any intention to defraud or injure creditors, and made at a time when creditors were by no means anxious to receive the only currency of the country (confederate treasury notes) in payment of the debts due them. Afterward the factory was burnt, during the war, by General Sherman's army, which reduced the company from a high state of prosperity to hopeless insolvency. Under these circumstances, we hold that creditors have no right to compel the stockholders to refund the dividends for their benefit. The capital stock was a trust fund for the payment of the debts of the corporation, upon the faith of which alone the law presumes the credit was given, unless other security was taken at the time by the creditor. In the case of Wood et al. v. Dummer et al., 3 Mason, 311, Mr. Justice STORY says: "It appears to me very clear, upon general principles, as well as legislative intention, that the capital stock of the bank is to be deemed a pledge or trust fund for the payment of the debts contracted by the bank. The public, as well as the legislature, have always supposed this to be a fund appropriated for such purpose. The individual stockholders are not liable for the debts of the bank in their private capacities. The charter relieves them from personal responsibility, and substitutes the capital stock in its stead. Credit is universally given to this fund by the public as the only means of repayment." The same rule which applies to a bank is applicable to any other corporation. Again Judge STORY says: "They (the stockholders) have the full benefit of all the profits made by the establishment, and cannot take any portion of the fund (the capital stock) until all other claims on it are extinguished." The same doctrine is held by Judge LUMPKIN, in Hightower v. Thornton et al., 8 Ga. 500, where he says: "The capital stock of a corporation, like that of a limited partnership or joint-stock company, under the act of this state of 1837 (Hotch. 373), is the amount fixed upon by the partners or associations as their stake in the concern. Upon this they get credit and transact business. It may not all be actually paid in, still they are liable to the public for the amount thus fixed. Additions, on the other hand, may be |