Thebus v. Smiley

Citations

• 110 Ill. 316

Syllabus

<p>1. Stockholder's individual liability—set-off of debt to him from corporation. In an action by a creditor of a corporation against a stockholder to enforce his individual liability to creditors for an amount equal to his stock in the corporation, the stockholder will not be allowed to set off against his liability an indebtedness of the corporation to him.</p> <p>2. Same—preference to creditors who are most diligent. The creditor of the corporation first suing a stockholder in respect to his individual liability acquires by his suit a preference over other creditors, which neither they nor the stockholder can defeat, unless possibly by bringing a bill for a general closing up of the affairs of the corporation. Such action is in the nature of an equitable attachment of the stockholder’s liability to the extent of the plaintiff creditor’s claim. The stockholder, after notice of such a suit against him, can not defeat the action by paying other creditors to the extent of his liability.</p> <p>3. Same—limit, when reached, discharge of stock from further liability —rights and liability of purchaser. Where a judgment is recovered'against a stockholder by a creditor of the corporation, under a statute making the former liable personally to creditors for an amount equal to the stock held by him, which he pays, his stock thereafter will be free from liability, and he may sell and transfer the same, and his assignee will take such stock without any liability on his part in consequence of his ownership of the same.</p> <p>4. There can be but one amount for which there is liability on account of the same share of stock, where that liability equals or exceeds the amount of such share, and for that amount both the assignor and assignee may be liable,—the former in case the debt was incurred by the corporation within three months after the date of the assignment of the stock, where that is the limit of time during which the liability of the assignor shall continue, and the assi