BENNETT et al. v. GLENN, 55 F. 956

FULLER, Circuit Justice, (after stating the facts.) The sole question for determination is whether the circuit court erred in striking out the fourth plea. It is well settled that decrees against a corporation of the character of those referred to in the pleadings necessarily bind the stockholders in the absence of fraud, and cannot be reviewed or impeached in collateral suits on assessments thereby made. Hawkins v. Glenn, 131 U. S. 319, 9 Sup. Ct. Rep. 739; Glenn v. Liggett, 135 U. S. 533, 10 Sup. Ct. Rep. 867.

The decrees of December 14, 1880, and of March 26, 1886, determined that the entire unpaid balance of the stock subscription was necessary in order to pay the indebtedness of the corporation. The judgment recovered against Bennett in 3884, and paid by him, determined his liability as a holder of 50 shares of stock, and defendants were, to that extent at least, concluded in this second suit. Nesbit v. Independent Dist., 144 U. S. 610, 12 Sup. Ct. Rep. 746.

But it is said that because certain stockholders, under the orders of the court, and with the consent of creditors, were allowed to compromise the claims against them on paying less than the full amount of their subscription, this operated to discharge Bennett, upon the theory that the unpaid subscriptions constituted a trust fund for the payment of creditors, and a part of- the subscribers could not be released to the prejudice of the others, and the latter be held liable.

It will be observed that these compromises were all made, according to the plea, prior to April, 1884, and that the decree of March 26, 1886, was not resisted, so far as the record shows, upon the ground that such compromises affected the liability of those who had not settled; and by no averment in the plea were the compromises attacked as having been otherwise made than fairly and in good faith. Nor did the pleader attempt to show that the defendants were in any manner prejudiced.

In any view, Bennett was not concerned with the question whether other subscribers were discharged or not, unless his liability was improperly thereby increased; and the plea did not state that if the entire amount subscribed for by the stockholders alleged to have been discharged had been paid in full, the second assessment, as made, would not have been necessary. On the contrary, so far as appears, the entire liability of every stockholder had to be exhausted in order to pay the outstanding debts, and such is the conclusion to be drawn from the decrees.

There could, therefore, be no equities to be adjusted between the company and individual subscribers, since each subscriber was compelled, in any event, to contribute to the full extent in order to satisfy creditors. The plea does not pretend to make a case of partial loss to be equitably apportioned, and, if any such aspect of affairs existed, it devolved upon the subscribers to develop it in the chancery court before the decree of March 26, 1886, was entered. At all events, the question suggested cannot be raised in the action upon the call.

It must be borne in mind that this was an assessment on an unpaid subscription, and not in enforcement of a statutory liability. The liability of the subscribers was several, and not joint. By the subscription each became a several debtor to the company, as much so as if he had given his promissory note for the amount of his subscription. Hatch v. Dana, 101 U. S. 205.

The impossibility of collection as to some subscribers, or collection in part under compromises made in good faith, could not furnish a defense at law to the liability of others on their contract of subscription; and the consent of the creditors to the particular compromises approved by the court prior to the decree of March 26, 1886, did not operate to render the binding effect of the latter any the less conclusive. In holding the plea insufficient the circuit court was right, and the judgment is affirmed.