2 Abb. N. Cas. 283 | N.Y. Sup. Ct. | 1877
I am inclined to think that the liability of directors of railroad corporations by virtue of part 1, c. 18, tit. 4, § 3, of the Revised Statutes (1 R. S. 602), has been taken away by section 16 of chapter 282 of the laws of 1843 (3 Edm. Stat. 645-6).
The capital stock of a corporation is a trust fund for the payment of its debts, and the directors of the corporation, who arre the trustees of the fund, will not be permitted to waste it, either directly, by releasing subscribers from the obligations created by their subscriptions, or by receiving payment for stock issued without a subscription in the form of property or services, at more than a sum which a faithful trustee in the
A fortiori the rule must be applied to directors of a corporation who, without any express authority, make contracts on behalf of the corporation like that made with Cowperthwaite, and then immediately take all the benefits of them to themselves and their associates by assignment. By means of the contract with Cowperthwaite, the defendants and their associates received in stock of the corporation $75,000, and bonds thereof amounting to $50,000; and the corporation received therefor what cost those persons not more than one-fourth of those sums.
There is no principle of law or equity on which such a transaction can be sanctioned. The defendants must be charged with the nominal amount of stock held by them, and credited only with the sums paid upon their subscriptions, and the value of the property so actually received by the corporation on account of the stock issued pursuant to the contract with Cowperthwaite.
The receiver represents the corporation and its creditors, and is, I think entitled to maintain this action.
The statute of limitations did not bar the debt, but only the remedy against the corporation. As the corporation did not plead the statute, but allowed judgment to be received against it, such judgment is con-
An interlocutory decree will be entered
Compare Excelsior Petrol. Co. v. Lacey, 63 N. Y. 422.
For the practice in respect to interlocutory judgments under the new Code of Civil Procedure, see sections 1333, 1330, 1331.