526 MAR., participated in the organization of the bank, | ties of the Bank. They cannot call for the That is, however, subject to this qualification: that if a party to whom stock has been transferred, upon the requirement of the bank, agrees to pay the unpaid balance upon the stock which is transferred to him, then a contract relation is established between himself and the bank, which can be enforced. And that is the effect, under the evidence, of this writing, to which the defendant subscribed his name at the time of the transfer. The evidence is that it was required of him that he should sign this book as a condition of the stock being transferred to him; and while it reads as an original subscription might, it still is not necessarily confined to that; we are not warranted in discarding it, because it is in part of that form; in substance it assumes to pay, as part of the capital stock of the Bank, the amounts set opposite the parties' respective names who signed it. And that, taken in connection with the fact that the defendant was required to do this, as a condition of the transfer to him of his stock, and the issuing of a certificate to him, established a contract or agreement on his part to hold himself liable to the Bank to the extent of $3,000. I might say further, gentlemen, that it was right and proper for the officers of the Bank to call upon the defendant to do this, in making this transfer. While it is true, if he had refused to do that, the Bank could not have compelled him, because everyone may dispose of his stock in a corporation to another; and a party to whom it is transferred has a right, unless there be by-laws to the contrary which bind him, to have it transferred upon the books of the Bank, and certificates for it issued to him, upon a mere transfer. [But the defendant did not stand upon that right. He accepted the requirement of the Bank, and as the Bank or Corporation could only enforce unpaid subscriptions to stock against parties who had agreed to pay, and so if they had not compelled parties to sign this book, or to sign something like it, would have been remitted to the original stockholders] upon a failure such as this, it was proper for the Bank, when parties came in with a transfer of stock, to compel them to sign such an agreement as this, so that they, in every case, might be held for the balance that was unpaid. That, as I have instructed you, was the effect under the evidence of the defendant signing this agreement, and if you believe this evidence, a contract relation is thus established between the Bank and the defendant, to pay the balance of 50 per cent which is shown to be due upon his shares. This leads us, then, to the second question: Is it necessary, in order to enable the assignees to meet the liabilities of this Bank, that they should collect the whole of the unpaid stock subscriptions? whole of a stock subscription, merely to go through the form of getting assets into their hands, and then subsequently hand back a part. subscribers to stock so much as may be necesTheir duty is confined to collecting from the sary to meet the existing liabilities. proceedings specially brought against the stockThis question is properly to be determined in holders before a proper court, in which, upon all the facts in regard to the assets of the Bank, the solvency of the several subscribers and the liabilities, a proper assessment upon such stockholder may be made according to the exigenthe evidence that all the subscriptions from solvcies of the case; but if it clearly appears from ent stockholders will be necessary to meet the liabilities of the Bank, it is not necessary to go through the preceding form of an assessment by proceedings in court, under such circumstances as I have mentioned to you. says that in his opinion, it is necessary; not Now then, Mr. Kennedy, upon this point, only that (because if that were the only fact in the case, I should not feel as though it were proper to submit the question to you upon his mere say so), but he particularizes and shows to you how it is necessary to collect, and why it is necessary to collect from the defendant, as well as from all other solvent stockholders, this 50 per cent of the stock unpaid. pears from his evidence, amounted to some a proper statement of the indebtedness; on the estimates, and gives you particulars in this reOf the unpaid subscriptions, Mr. Kennedy spect, that only about $18,000 or $19,000 can be collected. If that be so, with the $5,000 The right of these assignees to call upon the to $24,000 to meet liabilities which Mr. Kenin hand, there would only be from $23,000 stockholders for the balance unpaid upon any nedy estimates at from $30,000 to $35,000. If subscription of stock, is not absolute, but qual- this be the evidence which you accept as true, ified. They have only the right to call for so then there is sufficient evidence to submit to much as may be necessary to meet the liabili-you, that, beyond any question, the whole of 576 all the subscriptions of solvent stockholders will be required to meet the liabilities of this Bank. It is true, on the other hand, that we are not given particulars in regard to the $16,000 which the appraisers considered sufficient to be brought in and scheduled as available assets. Nor are the original subscriptions to this $125,000 taken into account in making that estimate. Mr. Kennedy's estimate is based entirely upon such stockholders as he finds in this book, and upon the amounts which they have there subscribed for. [It is right and proper to take into consideration these parties who appear as original subscribers to this $125,000; and if you find from that, and if you are not satisfied in regard to this $16,000 which the appraisers have considered available assets, taking those two circumstances into consideration, that the whole of the stock subscriptions of each solvent stockholder, and among others this defendant, is required to meet the liabilities, then the plaintiff is not entitled to recover in this case. As I have said to you before, the question on this issue is not whether there may not be a necessity for calling in some part of the subscriptions; in any view of the case, as I take the evidence, a necessity is shown for calling in some part; but neither you nor I, in this proceeding and under such facts as have been developed, would be able to make an assessment, and say how much is needed less than the whole amount. are minor points of inaccuracy that do not enable me unqualifiedly to affirm them; but with such qualifications as I have endeavored to give you in my general charge, and to which I now refer you, I affirm these points. The defendant's points are as follows: *** 3. "That the assignee of stock of the Bank in question is not personally liable for assessments made upon him subsequent to his purchase of the stock from an original subscriber." This point is affirmed with this qualification: that if it does not appear that he has not assumed to pay the same, of which, however, there is evidence in this case; that is, the simple assignee of stock (a transferee as I have called him), without more, without having undertaken any obligation to pay, would not be liable, but if (of which there is evidence in this case) such transferee as the defendant is has himself assumed to pay the balance due upon stock, then of course the plaintiff, upon such a showing as we have here, would be entitled to recover. *** Now, in making up your verdict, you will find either for the defendant or for the plaintiff for the full amount of the unpaid balance due upon this stock, with interest from the time of the demand made upon the defendant by the assignees. You cannot find for a less amount; nor can you stop between those two points. Your verdict, under such instructions as I have endeavored to give you, must be either absolutely for the defendant, or it must be for the assignees for the full amount. If you find, under the evidence, that the I do not need to remind you that in the conwhole amount is not necessary, then the plaint-sideration of this case you are to dispel anyiff cannot recover for any amount, because we have no standard to fix how much; but if you are satisfied from the evidence that the whole amount will be necessary, then the plaintiff is entitled to recover upon that issue.] There are, then, as I have explained to you, or endeavored to, two questions: 1, whether this defendant has made himself liable, as a subscriber, by signing this agreement; and under the evidence, if you believe it, I instruct you that he has; 2, whether the whole of this stock which is unpaid is necessary to meet the liabilities of the Bank. If you find that it is, then the plaintiff is entitled to recover. If you find that it is not, then the plaintiff is not entitled to recover. I will now read to you certain points which the counsel on either side have submitted to me, with my answers in regard to them. will first read the plaintiff's points: I 1. "That James W. Gillespie, by signing the subscription in evidence, became a subscriber to the capital stock of the Bank, and as such is liable to pay any amount unpaid upon the same, necessary to pay the debts of said Bank, even if the jury should find from the evidence, that the certificate of stock in evidence was not issued upon such subscription." 2. "That as it appears by the evidence of the defendant himself that he was required to sign the subscription to the original stock, upon the issuing to him of the certificate in question, and that he did so voluntarily, he thereby became a subscriber to the stock of the Bank, and liable to pay the amount unpaid thereon." I have endeavored to instruct you substantially as set forth in these two points. There thing of prejudice from your minds; that you are not entitled to consider anything except the evidence in the case. Whichever way you look in regard to this evidence, of course hardship is seen; it is hard for this defendant to be required to pay further upon the stock, which is now of no value, and which payment would be an absolute loss to him. Still if the evidence, according as I have instructed you, shows that under the law he ought to respond, that he is obliged by law to respond, that there is a legal liability upon his part, then it is your duty to say so by your verdict. Of course the determination of these questions, if the assets of the Bank are not going to be sufficient to meet the liabilities, are important for the plaintiffs. They are important to the creditors and the depositors of this Bank whom they represent; and if your verdict should be for the defendant, of course followed by other similar verdicts, it might result in loss to the depositors. These plaintiffs, as assignees, have very little interest other than simply to represent those for whose interest and in whose trust this property and the assets of this failed Bank, have been assigned to them. You are, therefore, to deal with the case simply as it is represented to you upon the evidence, and not upon what you may think might be right under other circumstances, but simply under the law, as I have endeavored to instruct you, and under the evidence as it has been presented to you here. Verdict and judgment for the defendant. The assignments of error not already men- | adjudication by a competent tribunal that the tioned specified the portions of the charge in- whole of the unpaid stock of all the subscribers closed in brackets, and the answers to the was required to pay off the liabilities. points quoted. This ruling was founded, as we think erroneously, upon Lane's Appeal, 105 Pa. 49. Messrs. Jessup & Hand, for plaintiff in error: Can a corporation assign an unpaid subscription to its capital stock, so that its assignee can collect the same? Corporations, unless expressly restrained by the Act which establishes them or some other Act, have and always have had an unlimited power over their respective properties, and may alienate and dispose of the same as fully as any individual may do in respect to his own property. Dana v. Bank of U. S. 5 Watts & S. 223; 1 Kyd, Corp. 108. The directors of a bank have power to assign all its property to trustees to pay its debts. Catlin v. Eagle Bank, 6 Conn. 233; Union Bank of Tennessee v. Ellicott, 6 Gill & J. 363. The general assignment made by the Corporation for the benefit of creditors passed all its rights substantially to the assignees. Yeager v. Trust Co. 14 W. N. Č. 296. Unpaid stock is as much a part of the assets of the company as the cash which has been paid in upon it. Sanger v. Upton, 91 U. S. 60 (Bk. 23, L. ed. 222). This being the case there seems to be no reason why the claim for unpaid stock, which is a simple chose in action, cannot be collected as any other asset. The unpaid subscriptions to its stock are a part of its assets, which can be made available in equity, by the creditors; and therefore a general assignment for their benefit passes them to the assignee. West Chester etc. R. R. Co. v. Thomas, 2 Phila. 344. It is, however, but the assignment of a chose in action; and the legal title being still in the corporation, the assignee can proceed only in its name, and must be able to show that the provisions of the charter have been pursued so as to give the company the right; in other words, that a call for the unpaid capital has been duly made, and by the proper authority. Germantown Pass. R. Co. v. Filter, 60 Pa. 131. The discretion of the directors as to calls is modal merely, relating to the time and manner of making payments. When the debts of the company require the calls to be made, it becomes the duty of the managers to make them, as much so as to collect other debts due the company. Germantown Pass. R. Co. v. Filter, 60 Pa. 132. A common-law action may be maintained for such a debt. Yeager v. Trust Co. 14 W. N. C. 296; Sanger v. Upton, 91 U. S. (Bk. 23, L. ed. 220); Upton v. Tribilcock, 91 U. S. (Bk. 23, L. ed. 203); Webster v. Upton, 91 U. S. 65 (Bk. 23, L. ed. 384); Messersmith v. Sharon Sav. Bank, 96 Pa. 440; Hall v. U. S. Ins. Co. 5 Gill, 484. The court below held that the assignees, holding the legal title to this debt, and having power to make the calls which they did, could not collect anything unless there was first an In that case the corporation and the assignee refused to call for and collect the unpaid stock; and so the creditor was compelled to file his bill. In Bell's Appeal, 6 Cent. Rep, 161, which was a bill by a creditor to enforce unpaid subscription to the stock, this court says: "This is a proceeding to enforce the equitable obligation of stockholders in an insolvent corporation to pay the unpaid portions of the capital stock due by them, in order that the debts, all the debts, of the corporation may be paid to the extent of such unpaid capital. It is not a statutory obligation at all, but an obligation in equity, arising out of the consideration that the capital stock of a corporation is a trust fund for the payment of its debts. Only so much of the unpaid capital as is necessary for the payment of the debts can be called in, and this can only be done when all the other assets are exhausted. It is manifest, therefore, that in a case of this kind there must be an account taken of the amount of debts, assets and unpaid capital, and a decree for an assessment of the amount due by each stockholder." In Cornell's Appeal, 5 Cent. Rep. 181, it is held that under the Act of 1836, P. L. 799, making stockholders liable individually for the amount of unpaid stock held by them, it was not necessary for the creditor to bring in other stockholders, or to take an account of the other indebtedness of the company. These cases simply show the law to be that where the individual has exhausted his remedy at law, he can go into equity, and compel defaulting stockholders to pay over the balance of their unpaid stock. Is a transferee or holder of stock liable to pay calls for any amount unpaid while he so holds the same? It has been supposed by the profession in this State that a mere transferee or holder of stock was not liable to pay the amount due upon stock held by him, but Bell's Appeal, suprà, holds to the contrary and adopts the doctrines stated in Angell & Ames on Corporations, § 534. The transferee of stock in an incorporated company is liable for calls made after he has been accepted by the company as a stockholder and his name has been registered on the stock books as a corporator; and being thus liable, there is an implied promise that he will pay calls made while he continues the owner. Webster v. Upton, 91 U. S. 65 (Bk. 23, L. ed. 384). Bell's Appeal overrules Messersmith v. Sharon Sav. Bank, 96 Pa. 440, as to the nonliability of a simple transferee. May the court of common pleas exercise its chancery powers in directing an assignee for creditors, to call in unpaid installments, without notice to each stockholder before making such order? The courts of common pleas have general chancery powers, in reference to trusts; and while they cannot take possession of the assigned estate and appoint a receiver, unless for cause upon the removal of the assignee, as was done in Lane's Appeal, supra, still they have chancery powers over the assignees, so far as relates to filing and settling their accounts, and the removal of them for neglect of duty or misfeasance in office. In this case the court of common pleas had jurisdiction of the assignees, so far as their official conduct was concerned. They applied to the court for direction; the court gave it and they followed it. In Sanger v. Upton, supra, which was an action of assumpsit, the district court made an order directing the assignees to notify stockholders to pay, and in default of payment to collect. and the legal title being still in the corporation, the assignee can proceed only in its name, and must be able to show that the provisions of the charter have been pursued so as to give the company the right; in other words, that a call for the unpaid capital has been duly made, and by the proper authority. Germantown Pass. R. R. Co. v. Fitler, 60 Pa. 124; Pierce, Railroads, 74, 75; Morawetz, Priv. Corp. 281. The verdict of the jury establishes the fact that the whole amount of the unpaid stock, held by owners who are good, is not necessary to pay off in full the liabilities of the Bank. In equity the stockholder is under obligation to pay only so much as is necessary. The plaintiff in error, Sanger, claimed that she was not bound by the order because she was not before the court and had no oppor- The amount, if any, of the defendant's equitunity of resisting it. But it was held that the table obligation (as owner of stock) to creditors bankruptcy court, having jurisdiction of the cannot be ascertained in this action, because: subject matter, could make the order, and it 1, there has been no designation of creditors, could not be attacked in this collateral proceed- no adjudication upon the claims of creditors, ing; that if she wished the order modified or no ascertainment of any actual specific debts; revoked, she should apply to the court by sep-2, there has been no disposition of the assets; arate and direct proceedings for that purpose. 3, there has been no ascertainment of what The same rule was applied to an order of the stock still remains unpaid. comptroller of the currency under the National Bank Act. Kennedy v. Gibson, 8 Wall. 505 (75 U. S. bk. 19, L. ed. 478); Cadle v. Baker, 20 Wall. 650 (87 U. S. bk. 22, L. ed. 498). Messrs. Fred. W. Gunster and Chas. H. Welles, for defendant in error: The doctrine that the capital stock of a corporation is a trust fund for the security and benefit of creditors is an invention of the courts of equity; and those courts were the first to aid creditors in calling in unpaid installments of stock to satisfy their demands. 16. Thomp. Liability of Stockholders, SS 10, The assignment in this case is evidently by virtue of the power conferred by section 29 of the Act of April 16, 1850, and as such is subject to the provisions of section 27 of the said Act. Act April 16, 1850, P. L. 490, §§ 27-29; 1 Purd. Dig. 177, pl. 112. There is no evidence in this case that these plain requirements have been complied with. As a matter of fact they have not been. If it be held that the assignees have power to make calls or levy assessments, then we contend that they must defer any call or assessment upon stockholders until such time as they have complied with the provisions of the Act The transferee of stock of the Bank in ques- in regard to the disposing of the property and tion without more is not liable for unpaid sub-collecting liabilities, in order that it may be scriptions. seen whether any, and if any what, assessment is necessary. Thompson, Liability of Stockholders, § 417. Where the trustees have attempted to make an assessment upon stockholders, without first having disposed or attempted to dispose of the property of the company, or to collect its debts, this is an objection which goes to the jurisdiction of the trustees to make the call at Act of Incorporation, P. L. 1873, p. 1100; Pittsburg & Baltimore Coal etc. Co. v. Otterson, 4 W. N. C. 545; Delaware etc. Canal Co. v. Sansom, 1 Binn. 70; Palmer v. Ridge Mining Co. 34 Pa. 288; Franks Oil Co. v. McCleary, 63 Pa. 317; Messersmith v. Sharon Sav. Bank, 96 Pa. 440. Bell's Appeal, 6 Cent. Rep. 160, only decides that in equity, on a creditor's bill, the holder of stock is liable for so much of the unpaid sub-all. Id. scription as is necessary to pay the debts of the corporation. If the instrument, which James W. Gillespie signed at the time the stock was transferred to him, be construed (as was done by the court below) into an agreement to pay the amount still remaining unpaid on his stock, it was certainly an agreement only to pay "at such times and in such manner as the board of directors of said corporation may from time to time order and direct." Before the plaintiffs can recover, they must show a call by the board of directors, or what is equivalent, by a court of competent jurisdiction in a proper proceeding. Lane's Appeal, 105 Pa. 49: Chandler v. Siddle, 10 Nat. Bank. Reg. 236; Scovill v. Thayer, 105 U. S. 143 (Bk. 26, L. ed. 968). Where a creditor or creditors desire to avail themselves of the equitable liability of stockholders they should file a bill in equity, praying for an assessment on which an action can be brought, or for a decree directly against each stockholder. Lane's App. 105 Pa. 49; Bell's App. 6 Cent. Rep. 161. Mr. Justice Paxson delivered the opinion of the court: While the assignments of error in this case are numerous the questions involved are but few, and those easily disposed of. And we may remark at the outset that we need not discuss the question whether the defendant, as the transferee of stock, was liable for the unpaid subscription for the reason that in point of fact If the assignment carried with it the alleged he assumed the liability of an original sharesubscription or promise to pay, it was, how holder by his subscription or agreement of ever, but the assignment of a chose in action; | April 12, 1873. This established a direct con3 PA. C. R., V. VII. 34 579 tractual relation between the defendant and the company upon which he is liable to a suit as if be had been an original subscriber. This is the fair legal construction of that paper. This suit was brought by the assignees of the Bank to collect the whole of the unpaid subscription. There was no proof of an assessment. The plaintiff offered to prove an assessment or order of Judge Handley, made at Chambers, during vacation, authorizing the assignees to collect the whole of the unpaid subscriptions. See twelfth assignment. We have no doubt of the power of a judge at chambers to make such an order. It is an exercise of chancery power, and the chancery side of the court is always open. While this order, standing alone, would be competent evidence it was not error to reject it as a whole. It was accompanied by an offer to prove a petition and citation which were not pertinent to the issue trying. It is always well to remember that in making offers of evidence the court has a right to regard the offer as a whole. The judge is not bound, where it contains several subjects, to treat it piecemeal, and admit one part and reject the residue. He may do so, but we will not reverse for his refusal. This is settled by numerous decisions, which we need not specify. There being no assessment in evidence, the learned judge left it to the jury to find whether the whole of the unpaid subscription was required to pay the debts of the company. We see no error in this. If all the unpaid subscriptions were required to pay the creditors, no assessment was necessary under the authority of Yeager v. Scranton Trust Co. 14 W. N. C. 296. It is well to observe that the syllabus of that case as reported is not correct. It is much broader than the point decided, which was that where it is shown that the whole subscription is required to pay the creditors an assessment is not essential. It was said in the opinion of this court that: "The uncontradicted evidence shows that it was necessary to collect the whole of this stock subscription in order to pay the sums due to the depositors of this insolvent corporation." There is not even an apparent conflict between the case referred to and the later cases of Lane's Appeal, 105 Pa. 49, and Bell's Appeal, 6 Cent. Rep. 160, 44 Legal Int. 27. These were creditors' bills, filed against insolvent corporations, to compel the payment by the stockholders of their unpaid subscriptions; and it was held that in such cases there must be an account taken of the amount of debts, assets, and unpaid capital, and a decree for an assessment of the amount due by each stockholder. The reason of this is plain: upon the insolvency of a corporation a stockholder is liable for only so much of his unpaid subscription as may be required to pay the creditors; hence, he may not be called upon in an arbitrary way to pay any sum that an assignee or creditor may demand. It is, therefore, requisite to ascertain in an orderly manner the extent of a stockholder's liability, before proceed ings are commenced to enforce it. But the necessity for this does not exist where the whole amount is required to pay the debts; hence, in such cases, as was said in Yeager v. Scranton Bank, supra, an assessment is not essential. The assignee may sue at once for all, for all is required. In the case before us the jury found that the whole of the unpaid stock was not required to satisfy the debts of the Bank. As this finding may have been due in part to the testimony referred to in the ninth assignment of error, it is proper that I should refer to it. The court below, against the objection of plaintiff's counsel, permitted the defendant's counsel to interrogate Mr. Kennedy, the witness on the stand, as to the financial responsibility of one Henry 0. Silkman, the allegation being that Silkman was a stockholder to the amount of $20,000, and that if his subscription was good, the whole amount of the unpaid stock would not be needed. There was no evidence that Silkman was a stockholder to the extent of over $5,000; hence, it was clear error to admit evidence as to his ability to pay up on $20,000. It is true the witness was not very clear upon the subject of Silkman's responsibility, but it is not easy to measure the effect of such evidence as this upon the jury; and because we cannot do so, and because its admission was error, we must reverse this judgment. Judgment reversed and a venire facias de novo awarded. Henry POTTEIGER, Piff. in Err., v. Lavina POTTEIGER et al., Exrs. of Adam Potteiger, Deceased. As a defense to a past due promissory note signed by the defendant and payable to the plaintiffs' testator, the defendant alleged that the note was given for the accommodation of the testator, and in support of the allegation proved that the date of the note was written with ink different from that used in the rest of the note, and that when the note was protested he had sent notice to the testator complaining that the testator did not attend to his business, to which the testator replied that it was the defendant who did not attend to his business-held, that this evidence was properly submitted to the jury, and that a comment upon its inadequacy was not error. (Argued Jan. 21, Decided March 14, 1887.) ANUARY Term, 1887, No. 178, E. D., before Are Mercur, Ch. J., Gordon, Paxson, Trunkey, Sterrett, and Green, JJ. Error to the Common Pleas of Berks County, to review a judgment on a verdict for the plaintiffs in an action of assumpsit. Affirmed. The facts as they appeared at the trial before ERMENTROUT, J., were stated in his charge to the jury, which was as follows: The executors of Adam Potteiger bring suit upon this promissory note, which is dated March 3, 1881, payable ninety days after date, in the sum of $1,000. When this note fell due on the 4th of June, 1881, neither Adam Potteiger nor Henry Potteiger appearing to make payment of the note, the note was duly protested. Subsequently to that time it appears that Adam Potteiger paid the note, and his |