111 Iowa 664 | Iowa | 1900
Involved primarily is the so-called “trust-fund doctrine,” as applied to stockholders’ obligations to creditors. This is founded on the proposition that as the state undertakes to relieve the stockholder in a corporation of general liability for the debts of the concern, to the amount that he has invested in the enterprise, he ought, in good faith, to pay in money or its equivalent the face value of the stock received; and, if he fails to do this, he should be treated as holding the remainder in trust for the benefit, of the creditors of the corporation. Prom this proposition two apparently conflicting and inconsistent rules have grown up^ one of which may be called the “true-value rule,” and the other the “good-faith rule.” Courts adopting the good-faith rule are also divided on the proposition as to what is necessary to he shown to constitute good faith. Some of them hold that, in the absence of an affirmative showing of fraud alm/nde, mere overvaluation of the property given in exchange for stock will not render the stockholder liable for the difference, while others hold that overvaluation itself, especially if gross, constitutes, or at. least raises a strong presumption of, fraud. The development of the trust-fund doctrine may be gathered from- a reading of the following: Wood v. Dummer, 3 Mason, 308, Fed. Cas. No. 17,944; Sawyer v. Hoag, 17 Wall. 610 (21 L. Ed. 731); Handley v. Stutz, 139 U. S. 427 (11 Sup. Ct. Rep. 530, 35 L. Ed. 227), and cases cited therein; Hollins v. Iron Co. 150 U. S. 371 (14 Sup. Ct. Rep. 127, 37 L. Ed. 1113); Osgood v. King, 42 Iowa,
We have already said more, perhaps, than the case warrants ; bnt as the questions are important, and the authorities are conflicting, we have attempted to lay down rules that may be followed in this class of actions, that are becoming more frequent in this age of corporations. Our conclusion is that the judgment of the trial court should be, and it is, AEEIRMED.