56 Md. 142 | Md. | 1881
delivered the opinion of the Court.
The appellants are receivers- of the Franklin Land and Loan Company of Baltimore City, and they brought this
The sole question presented is, whether the discharge in bankruptcy operated as a discharge of the appellee from liability for the amount due on the subscription of stock for which suit is brought.
It is contended by the appellants that the unpaid subscription to stock of a corporation is a trust fund in the hands of the stockholder for the benefit of the creditors of the corporation, and that, consequently, the stockholder owes the debt in a fiduciary character, and therefore he is not relieved from liability by his discharge in bankruptcy.
Section 5111 of the Rev. Stats. U. S. provides that “ No debt created by the fraud or embezzlement of the bankrupt, or by his defalcation as a public officer, or white acting in any fiduciary character, shall be discharged by proceedings in bankruptcy.”
The terms of the section would seem to indicate quite plainly that no such case as that of a simple indebtedness on subscription to stock in a corporation could have been contemplated by the framers of .the law. But the matter is entirely clear, upon settled principles and well recognized distinctions.
It is certainly true that the capital stock of an ordinary business corporation is a trust fund for the protection and benefit of its creditors, or those who deal with it and give credit on the faith of its capital stock. And it is equally true, that neither the stockholders, nor their agents the directors, can rightfully withhold any portion of the stock from the reach of the creditors having lawful claims against the corporation. And this trust fund consists not
There are cases, doubtless, when the creditors of the corporation may proceed in equity against the' stockholders for unpaid subscriptions, but those cases do not proceed upon the ground that the stockholders are trustees, or that they have a fiduciary relation either to the corporation or to its credit.ors. In such cases the creditors of the corporation seek satisfaction out of the assets of the company to which the defendants are debtors. Ogilvie vs. Knox Ins. Co., 23 How., 380. As was said by the Supreme Court in Hatch vs. Dana, 101 U. S., 205,
Oür attention has not been called to any decided case directly in point with the present; but there are several cases which, upon principle and analogy, would seem to be conclusive of the question involved, if, indeed, authority were needed.
In the Bankrupt Act of 1841, the exception from the operation of the discharge, embraced debts “ created in consequence of a defalcation as a'public officer, or as executor, administrator, guardian or trustee, or while acting in any other fiduciary capacity.” This provision of the statute came under construction in Chapman vs. Forsyth, 2 How., 202; and it was there held that a factor who had received the money of his principal was not a fiduciary, within the meaning of the exception ; and that the provision contemplated technical trusts, and not such as the law implies from the contract. And the same construction would appear to have been adopted by the Supreme Court, as applicable to the exception in the Act of 1867, from what was said in the case of Neale vs. Clark, 95 U. S., 704.
In the case of Cronan vs. Cotting, 104 Mass., 245, it was held that the exception in the Bankrupt Act of 1867, did not apply to One who received accepted bills of exchange for collection, with instruction to appljr the proceeds, so far as required, to the payment of a debt due to the estate of which she was administratrix, and the balance to be • returned to the plaintiff. And in the case of Woolsey vs. Cade, 54 Ala., 378, it was held, that a debt due from a factor, for the proceeds of cotton sold by him for his principal, was barred by the defendant’s discharge in
Trust and confidence were reposed in all of these cases ; very much more special, indeed, than in the case of a subscription to the stock of a corporation; but, as has been well said, the Bankrupt Act would have had a very limited operation if the language of the exception had been construed to embrace cases of such general fiduciary incidents..
The judgment of the Court below must be affirmed.
Judgment affirmed.