Larrabee v. Baldwin

Citations

• 35 Cal. 155

Syllabus

<p>Debts of Corporations.—While the Constitution requires the debts of corporations to bo secured by the personal liability of the corporators, and makes each stockholder liable for his proportion of such debts, it leaves to the Legislature the power to regulate such liability, and to prescribe the rule by which each stockholder’s proportion of such debts shall be ascertained.</p> <p>Idem.—An Act of the Legislature making each stockholder of a corporation liable for his share of all its debts contracted while he is a stockholder is sufficient to answer the requirements of the Constitution.</p> <p>Idem.—There is nothing in the Constitution that renders a man who becomes a stockholder personally liable by so doing for his proportion of all the uncanceled debts of the corporation created before he became a stockholder.</p> <p>Proof to fix Liability of Stockholder.—In an action against the stockholders of a corporation to recover the proportional share of each one of the corporate debts, the proof must show that the defendant was a stockholder when such debt was contracted. Proof of a judgment against the corporation does not show when the debt was contracted.</p> <p>Judgment Against Corporation.—A judgment rendered against a corporation, while a party is a stockholder, upon a contract entered into before the relation of stockholder existed, is not a contract within the meaning of the Act which makes such stockholder liable for the corporate debts contracted while he was such stockholder.</p> <p>Action to recover Corporate Debts.—A joint or several action may he brought against stockholders of a corporation for corporate debts.</p> <p>How Liability of Stockholders may be Discharged.—Each stockholder of a corporation formed under the Act of 1853, entitled “An Act to provide for the formation of corporations for certain purposes,” is liable for his proportion of the corporate debts ¿ and any one creditor, whose debt is sufficient, may collect of him the entire amount of h