delivered the opinion of the court.
Thе plaintiffs, after issuing an execution on a judgment obtained by them against the Greаt Republic Insurance Company, and finding no property of the company whereon to levy, filed a motion in the Circuit Court against the defendant Manion, asking for an execution against him as stockholder.
The facts show that Manion wаs one of the original stockholders to the amount of twenty shares of stoсk, but, more than, a year before the issue of the execution against the сompany, had sold and transferred his stock to one Whitesides, who afterwards turnеd out to be insolvent. The transfer was regularly'made on the books of the company, and the defendant knew nothing of the insolvency of Whitesides at the time оf the transfer, and the evidence conduced to show that the transfer was mаde in good faith and for a' valuable consideration, and not to defeаt the creditors of the company.
Upon this state of facts the court declared the law to be that if the defendant made the transfer of his stock tо Whitesides in good faith and without any intention to exonerate himself from liability, then suсh transfer was valid, and he is not liable although Whitesides was insolvent at the time. And the court refused to declare that the simple fact that Whitesides was insolvent аt the time of the transfer rendered the defendant liable.
The question as to what stockholders are liable to an execution by a creditor of a сorporation, under what is commonly known as the “double liability” clause, was before this court in the case of McClaren v. Franciscus,
The only remaining question is whether the defendant is liable because his alienee was insolvent at the time of the transfer. It is a universal principle of common law that the absolute ownership of рroperty carries with it the right to transfer or dispose of it as the owner may see proper. He cannot do this so as to defeat the claims of hоnest creditors. ' In a case like this a creditor has no claim against a stоckholder until he has exhausted his remedy against the company; or rather, his сlaim commences from the time he issues his execution against the company. If, before any execution be issued, the stockholder shall have honеstly and without any intention to defeat the creditors of the company, sold and transferred his stock, the’mere fact that the purchaser was insolvent at thе time is not sufficient to hold such stockholder still liable for the debts. The question in such сase is whether the transfer was fraudulent and void as to the creditors of the company. If the stockholder knew of the insolvency at the time of the transfer, it would be very strong evidence of fraud, and it would be hard to resist the conclusion that such transfer was made in bad faith. In this case there is no evidence that thе stockholder had any knowledge that Whitesides was insolvent when he sold his stock. Upon the evidence in the case the court found that the transfer was made in good faith. The evidence fully sustains this finding. We see no error in the record.
Judgment affirmed.