247 F. 449 | 3rd Cir. | 1918
It remains to consider the South Dakota statute (the Civil Code); which (as far as we know) has not yet been passed upon by the Supreme Court of that state:
“Section 441. Each stockholder of a corporation is individually and personally liable for the debts of the corporation to the extent of the amount that is unpaid upon the stock held by him. Any creditor of the corporation may institute joint or several actions against any of its stockholders that have not fully paid the capital stock held by him, and in such action the court must ascertain the amount that is unpaid upon the stock held by each stockholder and for which he is liable, and several judgments must be rendered against each in conformity therev.th. The liability of each stockholder is determined by the amount unpaid upon the stock or shares owned by him at the time such action is commenced, and such liability is not released by any subsequent transfer of stock. And in no other case shall the stockholders be individually and personally liable for the debts of the corporation.”
The facts to which the plaintiff seeks to apply the statute are as follows: On September 1, 1899, the directors of the Imperial Co., who at that time were also its only stockholders, bought certain mining property in South Dakota from W. S. Elder, one of the stockholders, and paid for it (as the laws of the state permitted) by transferring its whole capital stock of 1,000,000 shares, the par value being $1 each. This was the first, and the only, property of this kind the company acquired. Immediately thereafter Elder returned 750,000 shares to the company’s treasury, and the certificates .were indorsed, “Fully paid and nonassessable.” The value of the property bought may have been less than the par value of the stock issued in payment; on the record before us we cannot determine this question satisfactorily, but in any event the issue of the capital stock was authorized by all the incorporators, the directors, and the, stockholders of the company, and moreover they all agreed to Elder’s retransfer of the 750,000 shares in order that the company might dispose of them as seemed best. What the company did was to issue bonds to the amount of $200,000, and to sell them at par, transferring to each purchaser of bonds an equal amount of the treasury stock. All the defendants acquired shares in this manner, and some of them bought other shares from the treasury by paying cash therefor.
Other questions have been argued, but they belong to a trial on the merits and should not be considered now.
The decree is affirmed, but without prejudice to the plaintiff’s right to bring such other suit or suits as it may desire, either at law or in equity, in any forum that may have jurisdiction thereof.