further sum of ten dollars for every twenty-four hours thereafter until such statement shall be furnished.

Former section 52 amended.

See section 27, chap. 40 of 1848, now repealed.

This section requires only a detailed account of the assets and liabilities of the company, so as to enable the stockholder to appreciate the value of the shares of the stock held by him, and the financial standing of the company. French v. McMillan, 43 Hun, 188.

$53. Stock books of foreign corporations.-Every foreign stock corporation having an office for the transaction of business in this state, except moneyed and railroad corporations, shall keep therein a book to be known as a stock book, containing the names, alphabetically arranged, of all persons who are stockholders of the corporation, showing their places of residence, the number of shares of stock held by them respectively, the time when they respectively became the owners thereof, and the amount paid thereon. Such stock book shall be open daily, during business hours, for the inspection of its stockholders and judgment creditors, and any officer of the state authorized by law to investigate the affairs of any such corporation. If any such foreign stock corporation has in this state a transfer agent, whether such agent shall be a corporation or a natural person; such stock book may be deposited in the office of such agent and shall be open to inspection at all times during the usual hours of transacting business, to any stockholder, judgment creditor or officer of the state authorized by law to investigate the affairs of such corporation. For any refusal to allow such book to be inspected, such corporation and the officer or agent so refusing shall each forfeit the sum of two hundred and fifty dollars to be recovered by the person to whom such refusal was made.

[Am'd, ch. 384 of 1897.]

Former section 56.

See chap. 165 of 1842, now repealed.

The transfer agent of any corporation existing beyond the jurisdiction of this state is required at all reasonable times during the usual business hours, to exhibit to any stockholder, when required, the transfer book of such corporation, and also a list of the stockholders thereof, if in his power to do so. People ex rel. Del. Mar. v. St. Louis, etc., Ry. Co., 19 Abb. N. C., 1. It is no answer to such application that the law of the state, where the corporation was created, requires. it to keep in such state a stock register or transfer-book, if it appears that the officers of the company have in their possession in this state a book containing entries of the transfer of its stock. Id. The name, by which it is called, is immaterial, if it contains the information which the act gives the stockholders the right to obtain. Id. See also, Kennedy v. Chicago, etc., R. R. Co., 14 Abb. N. C., 326. In the latter case, it was held that a demand for the exhibition of the stock book is not sufficient as a demand for the transfer book.

In a proceeding for a mandamus to compel a foreign corporation and its officers to exhibit the stock-book to a stockholder, it is immaterial whether the transfer of the stock to the relator was merely colorable or whether any consideration was paid therefor, or what was the occasion of the transfer. People ex rel. Harriman v. Paton, 20 Abb. N. C., 172.

A mandamus to compel the exhibition of the transfer-books should be directed to the transfer agents only, and not to the officers of a foreign corporation. People ex rel. Hatch v. Lake Shore, etc., R. R. Co., 11 Hun, 1.

§54. Liabilities of stockholders.-The stockholders of every stock corporation shall, jointly and severally, be personally liable to its creditors, to an amount equal to the amount of the stock held by them respectively, for every debt of the corporation, until the whole amount of its capital stock issued and outstanding at the time such debt was incurred shall have been fully paid. The stockholders of every stock corporation shall, jointly and severally be personally liable for all debts due and owing to any of its laborers, servants or employes other than contractors, for services performed by them for such corporation. Before such laborer, servant or employe shall charge such stockholder

55

for such services, he shall give him notice in writing, within thirty days after the termination of such services that he intends to hold him liable, and shall commence an action therefor within thirty days after the return of an execution unsatisfied against the corporation upon a judg ment recovered against it for services. No person holding stock in any corporation as collateral security, or as executor, administrator, guar dian or trustee, unless he shall have voluntarily invested the trust funds in such stock, shall be personally subject to liability as a stockholder; but the person pledging such stock shall be considered the holder thereof, and shall be liable as stockholder; and the estates and funds in the hands of such executor, administrator, guardian or trustee shall be liable in the like manner and to the same extent as the testator or intestate, or the ward, or person interested in such trust fund would have been, if he had been living and competent to act and held the same stock in his own name, unless it appears that such executor, administrator, guardian or trustee voluntarily invested the trust funds in such stocks, in which case he shall be personally liable as a stockholder.

Former section 57.

See section 5, title 3, chap. 18, part 1, R. S.; section 10, 11, 16, 18, chap. 40 of 1848; section 10, chap. 252 of 1854, and sections 23, 37, chap. 611 of 1875, now repealed.

The object of this section in requiring a certificate to be filed is to inform the public so that they can transact business with the corporation, upon the assurance that the capital stock has all been paid in, or that the stockholders are severally liable for an amount equal to the stock held by them respectively. Nat. T. W. Co. v. Gilfillan, 124 N. Y., 302.

A statute which imposes upon the stockholders of a corporation a personal liability for the corporate debts must be strictly construed. Chase v. Lord, 77 N. Y., 1. It can not be extended beyond its literal terms. Id. In such case, the legal presumption is that all statutory conditions have been complied with. Id. The creditor, before he can charge a stockholder, must establish a non-compliance with the provisions of the statute. Id.; Bruce v. Driggs, 25 How., 71.

Where a certificate of stock is filled out and signed by the president and secretary of a corporation, the person named therein is a stockholder, though the certificate is not detached from the stock-book, and the company's seal is not affixed thereto. Halstead v. Dodge, 51 Supr., 169.

The filing of the proper certificate in the office of the county clerk, under the general incorporation act, is sufficient to constitute those making and filing it, a corporation, as to one dealing with them as such. Raesbeck v. Desterreicher, 18 Alb. L. J., 211. A filing of the required duplicate in the office of the Secretary of State is not necessary. Id.

It is enough, in ordinary actions, to prove the existence of de facio corporation. Benesch v. J. H. M. L. Ins. Co, 16 Daly, 394.

Where the subscription is void under section 41, the subscriber does not become a stockholder even as to creditors, and can not be held individually liable for the debts of the company under this section. Perry v. Hoadley, 19 Abb. N. C., 76. Persons signing the articles of association of a manufacturing company are stockholders. Strong v. Wheaton, 38 Barb., 616. When the holding of stock is once established, it must be presumed to continue, until its surrender or assignment is

shown. Id.

Where the bonds of a corporation have been issued by it gratuitously to a stockholder, but no portion of its property or assets has been applied in payment thereof, the stockholder is not liable to account to creditors for the proceeds of the sale of said bonds by him. Christensen v. Eno, 106 N. Y., 97.

The principle upon which persons subscribing or engaging to take stock are held liable, was considered in Seymour v. Sturgess, 26 N. Y., 134.

A person, who has signed and acknowledged the articles of association of a corporation created under this act, and was named a trustee therein, can not deny, in an action under this section, that he was, at the time of signing the articles, a stockholder thereof. Herries v. Wesley, 13 Hun, 492. In such case, he will be presumed to continue to be one until the contrary is established. Id.; Strong v. Wheaton, 38 Barb., 617.

The purchase of stock in a corporation makes the buyer a stockholder. People v. North R. S. R. Co., 121 N. Y., 582.

The acceptance and holding of a certificate of the stock subjects the holder to the liabilities of a stockholder. Van Cott v. Van Brunt, 2 Abb. N. C., 283. Person can not be made stockholder of corporation, without his knowledge or consent. Glen v. Garth, 3. N. Y. St. Rep., 473.

He is not estopped as against creditor of corporation from denying that he is shareholder. Id.

Corporative stock, issued to executor in representative capacity, is vested in him. Matter of Santa E. S. M. Co., 21 N. Y. St. Rep., 89.

Subject to the limitations and qualifications of this and the next sections, the liability of a stockholder, before the capital is paid in, or certificate filed, stands upon a similar footing to that of partners in any company or association not incorporated. King v. Duncan, 38 Hun, 461; Allen v. Sewall, 2 Wend., 327; Moss v. Oakley, 2 Hill, 265; Corning v. McCullough, 1 N. Y., 47; Harger v. McCullough, 2 Denio, 119; McKinney v. Phillips, 24 Barb., 87.

The liability under this section is qualified only by the following section. King v. Duncan, 38 Hun, 461.

Each stockholder's liability under this section is limited to the amount of his stock. Wiles v. Suydam, 64 Ñ. Y., 173.

Trustees are excluded from the scope, as well as the policy, which this section was intended to promote. McDowall v. Sheehan, 41 N. Y. St. Rep., 415. They are not entitled to the protection which the law intends to secure to creditors of the corporation. Id. The directors of a moribund corporation can not constitute themselves creditors for salaries or wages and thus impose liabilities upon confiding and innocent stockholders. Id.

The requirement as to the recording of the certificate is directory merely. Veeder v. Mudgett, 95 N. Y., 295. The duty imposed upon the stockholders is performed upon the making and delivery of the certificate to the county clerk for record. Id. They are not liable for an omission to record, which is wholly the fault of the clerk. Id.

An acknowledged, but unsworn, certificate of the increase of capital stock is not a compliance with, nor does it terminate the liability of the owners of the new shares for the debts of the corporation under this section. Hardman v. Sage, 124 N. Y., 25; Brown v. Smith, 13 Hun, 408; aff'd 80 N. Y., 650; Veeder v. Mudgett, 95 N. Y., 295.

The certificate must be sworn to, and a mere acknowledgment is not a sufficient compliance with the provisions of this section. Brown v. Smith, 13 Hun, 408; aff'd 80 N. Y., 650.

The certificate, under this section, is not conclusive, and creditors may show nonpayment in fact of the full capital. Barre Nat. Bk. v. Hingham Mfg. Co., 127 Mass., 563. The conclusiveness of such certificate was not in any manner intimated or sustained by the case of Bonnell v. Griswold, 80 N. Y., 128. See Veeder . Mudgett, 95 N. Y., 295; Schenck v. Andrews, 46 N. Y., 589; Boynton v. Same, 63 id., 93; Same v. Hatch, 47 id., 225; 13 Hun, 411; 80 N. Y., 650; Wheeler v. Millar, 90 id., 358. The question whether the certificate is even presumptive evidence of payment was raised, but not decided, in Veeder v. Mudgett, ante. The stockholder remains liable till the whole amount of the capital stock is paid in and the required certificate filed, but only to a creditor against whose claim the statute has not run. Knox v. Baldwin, 80 N. Y., 610.

Debt contracted before capital stock has been paid in, either in cash or in equivalent property, is alone sufficient to make stockholder liable. N. T. W. Co. v. Gilfillan, 124 N. Y., 302.

Stockholders are individually liable where property procured in exchange for stock is purchased at over-valuation, not through error of judgment, but in bad faith and to evade statute. Id.

The cause of action under this section consists of a debt and the liability created by statute against stockholders when the stock has not been paid in and a certificate of that fact recorded. Wiles v. Suydam, 64 N. Y., 173. This section, in effect, withdraws the protection of the corporation from the stockholders, and regards them liable to the extent of the amount of their stock as co-partners. Id.; Corning". McCullough, 1 N. Y., 47.

Under this section two things are requisite to end the stockholder's liability. The whole amount of capital stock must be paid in, and the certificate of that fact made and recorded. Veeder v. Mudgett, 95 N. Y., 295; Plass v. Housman, 17 N. Y. St. Rep., 671; Chase v. Lord, 77 N. Y., 1; Aspinwall v. Sacchi, 57 id., 331.

The liability, as created by this section, is limited by two things, both of which, to exempt the stockholder, must be fully complied with. First. The whole amount of the capital stock, fixed and limited by the company, shall have been paid in. Second. A certificate of such payment shall have been made, filed and recorded, as prescribed in this section. Brown v. Smith, 13 Hun, 408; aff'd 80 N. Y., 650. Such liability is not confined to the original capital stock. Veeder v. Mudgett, 95 N. Y., 295. On an increase of the capital, it attaches to such increased capital. Id.

The liability, which was ended when the original capital was paid in, in full, and a certificate made and recorded, is not revived by an increase of the capital. Veeder v. Mudgett, 95 N. Y., 295. In such case, the holders of the original stock are not liable thereon because of a failure to pay in the increased capital. Id. The liability rests solely upon the holders of the increased stock, and is limited by the par value of such stock. Id.

In case of an attempt to increase the capital, the stockholders, who have voted for the increase, accepted their share of the additional stock and received thereon, are estopped, as against creditors, from questioning the validity of the increase. Veeder v. Mudgett, 95 N. Y., 295.

The omission to file a certificate as to the payment of the increase of capital, subjects not the holders of the captial stock, which has been fully paid up, and as to which there is no statutory default, but the holders of the new issue of capital stock to liability for corporate debts. Griffith v. Green, 129 N. Y., 517; 42 N. Y. St. Rep., 101; Veeder v. Mudgett, 95 N. Y., 295. In such case, the burden is on the creditor to show that the stock of the defendant stockholder constituted part of the increased capital stock. Griffith v. Green, ante.

In an action against a stockholder for failure to file a certificate of payment of increased stock, the burden is upon the creditor to show that defendant's stock was increased stock. Griffith v. Green, 37 N. Y. St. Rep., 705.

Burden of proving non-payment of subscription is on plaintiff. Wellington v. C. C. & I. Co., 52 Hun, 408.

Payment by stockholder of stock to company relieves him from liability. Id. Creditors must sue in equity all similar stockholders. Id.

Settlement of parties to contract, bars right of action by third party on promise therein to assume and pay his claim. Id.

A remedy given by the statutes of another state to creditors of a corporation against its stockholders is not available here. Christensen v. Eno, 106 N. Y., 97; Lowry v. Inman, 46 id., 119.

Common-law action will lie in this state by judgment creditor of a corporation, organized in another state, against stockholders to enforce statutory liability created by laws of that state. Savings Ass'n v. O'Brien, 51 Hun, 45.

An action may be maintained on the stockholder's liability in a state other than that in which the corporation was formed. Griffith v. Mangam, 42 Supr., 369. What must be alleged to constitute a cause of action under this section. Cuykendall v. Corning, 88 N. Y., 129, 137.

What constitutes a debt within the meaning of the former acts, has had many and contradictory decisions; but when a debt is contracted, has been adjudicated in only a very few cases.

To create a liability under this section, a valid debt must be contracted under the circumstances therein mentioned and before the capital stock has been paid in, either in money or in property honestly regarded as a fair equivalent to cash. National Tube W. Co. v. Gilfillan, 124 N. Y., 302.

A stockholder can not be held liable for rent due under a lease for more than a year which did not fall due within a year of the making of a lease. Goff v. Whitney, 2 City Ct., 256.

Under a corporate lease for five years, the rent payable within two years from the time of executing the lease and delivering the premises, is recoverable in an action under section 57 of this chapter; but the rent accruing beyond that time is not a liability that can be enforced against the individual stockholders. McIntyre v. Strong, 63 How., 43.

The liability covers all debts and contracts made by the company, irrespective of the circumstances under which they were made. National T. W. Co. v. Gilfillan, 124 N. Y., 302. That credit was imprudently given by the creditor, or that he gave credit upon the supposition that the corporate property was sufficient to pay the debts, creates no exemption from liability under this section. Id.

This liability is governed by the original indebtedness, and can not be extended or renewed by any extension or renewal which the creditor may make with the corporation. Hardman v. Sage, 47 Hun, 230; Parrott v. Colby, 6 Hun, 55; aff'd 71 N. Y., 597; Jagger Iron Co. v. Walker, 76 id., 521; Parrott v. Sawyer, 87 id., 622.

The liability of a stockholder can not be revived or extended by any renewal or extension of the indebtedness which the creditors may make with the corporation. Parrott v. Colby, 6 Hun, 55; aff'd 71 N. Y., 597; Jagger Iron Co. v. Walker, 76 id., 521.

An action can be brought only against such as were stockholders, when the debt was contracted, and not those who became so afterwards. Moss v. Oakley, 2 Hill, 265.

A stockholder is not liable, under this section, for corporate debts contracted before he became such. Tracy v. Yates, 18 Barb., 152; Phillips v. Therasson, 11 Hun, 141.

A trustee may recover for services rendered to the corporation. McDowall v. Sheehan, 36 N. Y. St. Rep., 104.

The provision of this section applies to holders of stock issued in payment for property purchased by the corporation. Boynton v. Andrews, 63 N. Y., 93. In such case, the question is, whether the purchase was made in good faith, or at a high valuation with a fraudulent intent to evade the provisions of the statute. Id. An honest over-valuation will not of itself subject the owner of the stock to a personal liability. Id.

Under the former law, a stockholder, to whom stock was issued in payment of property, was not, in absence of fraud in its valuation, liable to the creditors of the company because of a failure on the part of the proper officers to file the required certificate. Brown v. Smith, 13 Hun, 408; 80 N. Y., 650; Boynton v. Andrews, 63 id., 93; Same v. Hatch, 47 id., 225; Schenck v. Andrews, 57 id., 133; Same v. Same, 46 id., 579.

Under the former law, in Schenck v. Andrews, 46 N. Y., 589, it was held that the whole capital stock could be paid for in property, and when so paid for, the owner thereof was not liable to the creditors of the company under section 10 of the act of 1848. But this case was limited and distinguished in same case, 57

N. Y., 133.

It was held, in Boynton v. Hatch, 47 N. Y., 225, that, when the capital stock was fully paid in either money or property and the certificate filed, the stockholders are released from personal liability. The transaction was impeachable for fraud. Id. A fraudulent and evasive issue of stock for such purpose rendered the holder liable. Id. The agreement of the company to pay more than the value of the property was no shield from personal liability under section 10 of the act of

1845. Id.

A legal fraud is established by proof that the stock of the company, not fully paid, has been issued as fully paid stock. National T. W. Co. v. Gilfillan, 124 N. Y., 302. It is not necessary to show otherwise an actual fraudulent intent. Id. A fraud is consummated by the issue of stock, as paid up stock, when in fact it has not been paid for either in money or in property of equal value. Thurston v. Duffy, 38 Hun., 327; Douglass v. Ireland, 73 N. Y., 100. A deliberate design to perpetrate a fraud on the law by an evasion of its provision and secure personal immunity by assumed compliance with the statute, which is false and hollow in fact and exists on paper only, renders the stockholders personally liable under

this section. Id.

Where stack is issued for property purchased for the company, and the transaction is fraudulent in law, the holders of such stock are liable for the unpaid portion thereof. Gamble v. Queens Co. W. Co., 52 Hun, 166; 25 Abb. N. C., 410.

A provision that part of the stock so issued was to be sold for less than par and