12 FEDERAL REPORTER. . `
Corr v. Noarn Ctaotrru Gow Anttemsrrne C0. and others.'
(Circuit Oourt, E. D. Pennsylvania. October 7, 1882.)
1. CORPORATION—.UNPAID Iusrttrimanrs on STOCK—RIGHT or Cammron ro In-
quuna: its ro Coivsrnnrwrroiv Pam ron Sroox.
While unpaid installments on stock ordinarily constitute a trust fund for the
payment of the corporate debts, yet where stock has been issued to a stockholder
and settled for by him under an arrangement made in good faith with the com-
pany, it is not in the power of a creditor, in all cases and as a matter of right,
to institute an inquiry as to the value of the consideration given for the stock,
and disturb the arrangement so made.
2. S.um—Su1ssenrrr1oN rn Pnormrvrr.
Where the capital subscribed is settled for by the transfer to the corporation
of personal property belonging to the subscribers, at an honest valuation fairly
‘ made and agreed upon between them, they cannot be held individually liable
to creditors because the value of the property, estimated in the light of subse-
quent events, will not equal the amount at which it was received.
8. Snm:—KNowLa1:•em or Oannrron. A _
· And even where, upon the purchase of additional property, the capital has ·
been increased by the issue and distribution of new stock to a much larger ex-
tent than the cost or value of the additional property, the stockholders cannot
be held individually liable at the suit of a creditor who was cognizant of the
whole transaction and acquiesced in it.
Hearing on Bill, Answer, and Proofs.
This was a bill tiled by a judgment creditor of a corporation against
the corporation and its stockholders for a decree for the payment by
the stockholders of his debt. The material facts were as follows:
— In January, 1874, a number of persons who had been carrying on mining
operations under the name of “ The North Carolina Gold Amalgamating Com-
_ pany;" applied for and obtained a charter of incorporation under the same name.
The charter provided for minimumrcapital of $100,000, divided into 1,000
shares of $100 each, with power to increase the capital to $2,500,000, or 2,500
shares. The charter further provided: •‘The subscription to the capital stock
of said company shall and may be paid in such installments, and in such man-
ner and sueh property, real or personal, as at majority of the corporators may
determine? The $100,000 capital was subscribed as follows: The eorporators
met and separate valuations were made by them of certain personal property
owned by the association, the average valuation being $137,000. It was then
agreed that the property should `be estimated at $100,000, and shares of stock
issued therefor and divided among the corporators in proportion to their in-
terests. In the valuation was included a supposed value of the charter, but
it appeared that without this there was over $100,000 worth of 'propertyat the
valuations made by the corporators.
Some time after this, negotiations were commenced for the purchase of land
on which the company was operating, which resulted in an arrangement with
'keported by Frank P. Prichard. Esq., of the Philadelphia bn!.
Amrmad. See 7 Sup. Ct. Rep. 231.