Low v. Buchanan

Citations

• 94 Ill. 76

Syllabus

<p>1. Stock corporation—liability of directors and officers assenting to an indebtedness exceeding capital stock. Under the provisions of section 16, chapter 82, Rev. Stat, 1874, the directors and officers of a stock corporation who assent to an indebtedness in excess of its capital stock, are made personally and individually liable for such excess to the creditors generally of such corporation, and not to any particular creditor.</p> <p>2. The object and purpose of this section is that all claims arising under its provisions shall be regarded in the nature of a trust fund, to be collected and divided pro rata among all the creditors, and this distribution can only be made in a court of equity.</p> <p>3. Same—and herein of the remedy. Where a stock corporation has incurred indebtedness in excess of its capital stock to various parties, the individual liability of its directors and officers assenting thereto can not be enforced by action at law at the suit of a single creditor, hut the remedy is in a court of equity, where the rights and liabilities of all may be determined and properly adjusted.</p> <p>4. If such an action can be maintained at law by a single creditor on the ground there are no other creditors, he must set forth by proper averments in his declaration, and prove on the trial, the special circumstances warranting such an action.</p>