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Section 331 authorizes the directors of corporations to levy and collect assessments upon the capital stock for the purpose of paying expenses, conducting business, or paying debts. The statute nowhere limits the aggregate of assessments that may be levied to the par value of the capital stock, and it has been held by the United States circuit court for this district that an assessment may be levied upon the full-paid shares of a subscriber to stock in a bank, and his shares sold out if the assessment is not paid.
Section 349 confers, as we have seen, the right to proceed by action to recover any delinquent assessment; and if this power be not restricted, as I have suggested, to cases wherein the stockholder has, by express or implied contract, agreed to pay, it will extend to all cases of assessments levied to meet expenses or conduct business, as well as to pay debts, and may be exercised against a stockholder who has paid his subscription in full, or who has already been assessed up to the par value of his stock. This result, startling and absurd as it is, seems to be the necessary consequence of the construction of section 349 contended for.
3. It will not be disputed that the ordinary rule which requires such a construction to be given to the provisions of a statute as will make them consistent and harmonious should be applied to the provisions of our Code with regard to corporations.
By section 322, as amended March 15, 1876, the individual liability of a stockholder of a corporation is limited to such proportion of its debts and liabilities as the amount of stock or shares owned by him bears to the whole stock of the corporation;, and, on payment of his proportion of any debt due from the corporation, incurred while he was a stockholder, he is relieved from any further personal liability for such debt.
I am unable to reconcile these provisions with a construction of section 349 which would give it the effect and operation contended for.
The court is asked to order an assessment to be levied, in order that the assignee in bankruptcy, representing the cred
itors, may collect by suit from the delinquent stockholders an amount sufficient to pay the debts of this corporation up to the limit of the par value of the shares held by them.
The section just referred to limits his personal liabiling for the corporate debts incurred while he is stockholder to such proportion of those debts as the number of shares owned by him bears to the whole numbers of shares of the capital stock. But, if he is personally liable on the assessment to be levied, he may be obliged, if he is the only solvent stockholder, to pay the whole amount of the indebtedness of the corporation, provided it does not exceed the fanciful and exaggerated par value mentioned in the articles.
If, as in the case at bar, the whole number of shares is 100,000, at $100 each, the stockholder who owns 1,000 shares is liable for one one-hundredth part of the debts. If the aggregate indebtedness is $100,000, he acquits himself of all personal liability by the payment of $1,000. But if he is liable to the amount of the par value of his stock, he may be compelled to pay $100,000.
Will it be contended that a stockholder who has paid his full proportion of the debts incurred while he was a stockholder would still remain personally liable to pay any assessment that may be levied, and that such a payment, which the statute declares shall relieve him from any further per. sonal liability for such debts, and shall be a good defence in an action brought by a creditor, shall be unavailable in an . action brought by an assignee in bankruptcy in helialf of creditors to collect an assessment levied for the payment of debts?
It seems to me that such a position is wholly untenable. I conclude, therefore: First. That the stockholders of min. ing corporations, organized as the corporation in this case was formed, incurred no liability ex contractu, either express or implied, to pay in, either for the prosecution of the enterprise or the payment of the debts of the company, the nomi. nal par value of their shares. Second. That unless they have subscribed for stock, or are the successors of subscribers,
assessments levied on them can only be enforced by the sale of their shares. Third. That section 349 does not create, and was not intended to create, any personal liability for assessments, unless from the terms of the stockholders' subscription such liability was incurred. Fourth. That the remedy of the creditor against the stockholder personally is limited and defined by section 322 of the Code, and his liability cannot be extended beyond the limits therein prescribed.
UNITED STATES v. POOLE.
(District Court, D. Maine. December, 1880.)
I. FRAUDULENT CONVEYANCE-SUBSEQUENT LEVY-ALIAS EXECUTION
Rev. ST. OF MAINE, c. 76, $$ 17, 18.
The Revised Statutes of the state of Maine (c. 76, $ 17, 18) provide that “a creditor who has received seizin of a levy not recorded, cannot waive it unless the estate was not the property of the debtor, or not liable to seizure on execution, or cannot be held by the levy, when it may be considered void, and he may resort to any other remedy for the satisfaction of his judgment,” and that, “when the execution has been recorded, and the estate levied on does not pass by the levy for causes named in the preceding section, the creditor may sue out of the office of the clerk issuing the execution a writ of scire facias, requiring the debtor to show cause why an alias execution should not be issued on the same judgment; and if the debtor, after being duly summoned, does not show sufficient cause, the levy may be set aside, and an alias execution issued for the amount then due on the judgment, unless during its pendency the debtor tenders in court a deed of release of the land levied on, and makes it appear that the land, at the time of the levy, was, and still is, his property, and pays the expenses of the levy, and the taxable costs of suit, and the judgment shall be satisfied for the amount of the levy."
Held, under these statuory provisions, that an execution debtor could not set up a conveyance, made prior to a levy, as fraudulent and void, in order to prevent such levy from being set aside and an altas execu
tion issued. 2. SAME-RELEASE SUBSEQUENT TO LEVY.
Held, further, that a subsequent release from the grantee to the grantor of such fraudulent conveyance did not enure to the support of the levy previously made.
Freeman v. Thayer, 29 Me. 375.
3. SAME-TENDER OF RELEASE OF LAND LEVIED ON-PROOF OF OWNER
Held, further, that the mere tender by the defendant in court of a deed of release of the land levied on, did not amount to proof of the fact" that the land, at the time of the levy, was and still is his propérty," within the meaning of the terms of the statute.-[ED. Sci. Fa. W. F. Lunt, U. S. Dist. Att’y, for United States. Geo. F. Talbot, for defendant. Fox, D.J. January 31, 1870, the United States recovered in this court two judgments against this defendant: one for $2,062.56 for duties, payable in coin; the other for $3,104.28 for penalties, under act of March 3, 1823, including costs of suit. The executions which issued on these judgments were returned fully satisfied by levies made February 26, 1870, on real estate in Calais, in this district, as the property of the debtor. The government received seizin of the premises, and the levies were duly recorded. On the twenty-fifth day of March, A. D. 1868, the defendant, by his deed of warranty, reciting a consideration of $6,000 as having been paid, conveyed to his son, William B. Poole, various parcels of real estate, including the premises levied upon. This deed was recorded April 2, 1868. William B. Poole was at that time about 22 years of age, without property. He never took actual possession of any part of the estate so conveyed to him by his father. The $6,000 recited as the consideration for the deed was paid by the son's note for that amount to the defendant.
Up to the present time S. B. Poole has been in the sole possession and enjoyment of the premises so conveyed to his son, and has received all the rents and profits therefrom. The United States has never, in any manner, asserted any claim or right to the estates levied upon, or been in possession of any portion thereof, or received any rents or income therefrom. On the seventeenth of June, A. D. 1873, William B. Poole released to S. B. Poole all interest in various parcels of real estate, including that conveyed to him by deed of March 25, 1868. This deed was recorded July 22, 1873, and recited as paid by the grantee a consideration of $10,000.
The deed from S. B. Poole to William B. Poole having been executed and recorded long before the levies, the grantee thereby acquired a better title to the premises than did the government by its levies, unless this deed can be shown to have been fraudulent. The government, by its levies, is in a position to attack the validity of this conveyance, if it elects so to do; but since the levies were made the property has very greatly diminished in value—the buildings thereon having been consumed by fire-and it prefers to abandon its levies and revive its judgments, if possible, for their full amount, with interest, and then satisfy them by levies on other property of this defendant.
It is provided by the Revised Statutes of Maine, c. 76, § 17, that “a creditor who has received seizin of a levy not recorded cannot waive it, unless the estate was not the property of the debtor, or not liable to seizure on execution, or cannot be held by the levy, when it may be considered void, and he may resort to any other remedy for the satisfaction of his judgment.” By section 18: “When the execution has been recorded, and the estate levied on does not pass by the levy for causes named in the preceding section, the creditor may sue out of the office of the clerk issuing the execution a writ of scire facias, requiring the debtor to show cause why an alias execution should not be issued on the same judgment; and if the debtor, after being duly summoned, does not show sufficient cause, the levy may be set aside, and an alias execution issued for the amount then due on the judgment, unless, during its pendency, the debtor tenders in court a deed of release of the land levied on, and makes it appear that the land, at the time of the levy, way and still is his property, and pays the expenses of the levy, and the taxable costs of suit; and the judgment shall be satisfied for the amount of the levy."
The present suit is instituted under these provisions. The answer of the defendant is that the judgments have been fully satisfied from his estates, and with the answer he files in court a release to the United States of all right, title, and interest in the lands levied on. The burden is upon defend