Harrison v. Remington Paper Co.

Citations

• 140 F. 385
• 72 C.C.A. 954
• 1905 U.S. App. LEXIS 3940

Syllabus

<p>1. Corporations — Stockholders’ Double Liability under Kansas Constitution and Statutes — Rules op Law.</p> <p>Const. Kan. art. 12, § 2, which provides that dues from corporations shall be secured by the individual liability of stockholders to an amount equal to the stock owned by each of them, is self-executing, but the remedy at common law may be enforced only by action at law or suit in equity after judgment and return of execution nulla bona against the corporation or an equivalent exhaustion of the property of the company. Sections 1200, 1204, Gen. St. Kan. 1889, granted to a creditor of a corporation an individual action against a stockholder upon the suspension of the business of the corporation for more than a year. Section 1192, Gen. St. Kan. 1889, granted to the creditor of a corporation the right to an execution against a stockholder upon the return of an execution unsatisfied upon a judgment against the corporation. Chapter 10, p. 27, Laws Kan. 1898, repealed sections 1200, 1204, Gen. St. 1889, and substituted for the action there granted a suit in equity by a receiver to be appointed after a judgment against the corporation and the distribution of the proceeds which the receiver should collect from the stockholders pro rata among all the creditors thereof. Held, this repealing act is unconstitutional and void against contracts made and rights which accrued before its passage. It lessened the value of such contracts, and tended to postpone their enforcement and thereby impaired their obligations.</p> <p>2. Same — Liability of Stockholders Founded upon Contracts.</p> <p>A stockholder of a corporation, by his subscription for stock or by his acceptance of it, agrees with the corporation and its creditors that he will perform the obligations and discharge the duties imposed upon a stockholder by the Constitution, the statutes, and the law then in force, and his liability to creditors springs from that contract.</p> <p>8. Constitutional Law — When Repeal