reasonableness of the time is a question of fact.' Holding the shares for six months after majority, together with the fact of selling a part of them, has been held to estop a shareholder from repudiating the transaction whereby he acquired them. When the winding up of the company occurs just before or just after his becoming of age, he need not expressly repudiate the shares in order to escape liability upon them.3

§ 139. (k) Married women. The competency of a married woman to take, hold and transfer shares of stock is governed by the law of her domicile, and to that law also recourse must be had to determine the respective liabilities of the husband and wife upon shares standing in her name. Where a married woman has power to become a stockholder, she is generally subject to the liabilities incident thereto," whether existing at common law or created by statute. Thus the federal statute' providing that "the shareholders of every national banking association shall be held individually responsible, equally and ratably and not one for another, for all contracts, debts and engagements of such association, to the extent of the amount of their stock therein, at the par value thereof, in addition to the amount invested in such shares,' includes a married woman, and her separate property can be

1 In re Contract Corporation, Baker's Case, (181) L. R. 7 Ch. 115; In re Norwegian Charcoal Iron Co., Mitchell's Case, (1870) L. R. 9 Eq. 363; Ebbett's Case, (1870) L. R. 5 Ch. 302; Harts's Case, (1868) L. R. 6 Eq. 512.

2 Lumsden's Case, (1868) L. R. 4 Ch. 31, where the court said: "The transaction originally appears to have been voidable, not void; for a deed will pass an interest to an infant, even when coupled with a liability, if it be for his benefit to accept it."

In re Norwegian Charcoal Iron Co., Mitchell's Case, (1870) L. R. 9 Eq. 363.

Hill v. Pine River Bank, 45 N. H.

800. In England she is capable of being a transferee of stock. Angus' Case, 1 De G. & Sm. 560; Johnson v. Gallagher, 3 De G. F. & J. 494; Mrs. Matthewan's Case, L. R. 3 Eq. 781; Suard's Case, 1 De G. F. & J. 533; Queen v. Carmatic R. Co., L. R. 8 Q. B. 299. So also in New York, unless the charter of the corporation forbid it. In re Reciprocity Bank, 22 N. Y. 9.

5 Sayles v. Bates, (1886) 15 R. I. 342. 6 Witters v. Sowles, (1887) 32 Fed. Rep. 767; Anderson v. Line, 14 Fed. Rep. 405; Keyser v. Hitz, 2 Mackey, 473; In re Reciprocity Bank, 22 N. Y. 9; Sayles v. Bates, 15 R. I. 324; Simmons v. Dent, 12 Mo. App. 288. 7U. S. Rev. Stat., § 5151.

charged with an assessment. But where stock was entered on the company's books by authority of a director in the name of his wife, he afterwards voting and representing the shares, and it did not appear that she authorized or ratified his acts, or received any dividends, or claimed any interest in them, it was held to be error to charge her separate estate with the debts of the company to the amount of stock thus standing in her name. In England, the husband is liable upon shares owned by his wife at the time of marriage, or accepted by her as a legacy after marriage. But his liability is only for the debts of the company subsequently incurred.*

6

8

§ 140. Priority between creditors.-The personal liability of shareholders enures for the benefit of all the creditors alike. The unpaid subscription to the capital stock being a trust fund for the payment of the debts of the corporation, all the creditors of the corporation are entitled to share in this fund ratably. A judgment creditor has no priority over others, and can not by motion under the statute against a stockholder, deprive a creditor at large of the benefit of an action begun against the same stockholder. Nor can one creditor gain any priority by filing his motion for execution against a stockholder before the return day of the execution against the corporation. Neither have mortgagees of all the property and effects of the company any priority over unsecured creditors in the uncalled balance due from the stockholders upon their shares." But in jurisdictions where creditors

1 Witters v. Sowles, (1877) 32 Fed. Rep. 767.

Longdale Iron Co. v. Pomeroy Iron Co., (1888) 34 Fed. Rep. 448.

Burlinson's Case, 3 De G. & Sm. 18; Sadler's Case, 3 De G. & Sm. 86; White's Case, 3 De G. & Sm. 157.

4 Thomas v. City of Glasgow Bank, (1879) 6 Scotch Ct. of Sess. (4th Series) 607.

5 Kluht's Case, 3 De G. & Sm. 210; Butler v. Cumpston, L. R. 7 Eq. 16. 6 McDonnell v. Alabama Gold Life Ins. Co., (1889) 35 Ala. 401.

9 McDonnell v. Alabama Gold Life Ins. Co., (1889) 85 Ala. 401.

9 Donnelly v. Mulhall, (1884) 12 Mo. App. 139.

10 Marks v. Hardy, (1886) 86 Mo. 232.

11 Dean v. Biggs, (1881) 25 Hun, 122; Hill v. Reid, 16 Barb. 280; Hurlbert v. Root, 12 How. Pr. 511; Hurbert v. Carter, 21 Barb. 221; New Jersey Midland Ry. Co. v. Strait, 35 N. J. 322; Miller v. Maloney, 3 B. Mon. 105; Hill v. Rogers, 50 Mich. 294; Pickering v. Ilfracombe Ry. Co., 37

7 Wetherbee v. Baker, (1882) 35 N. L. J. E. P. 118; King v. Marshall, 33 J. Eq. 501.

Beav. 565; Lishman's Claim, 23 L. T.

may bring separate actions against individual shareholders to enforce their statutory liability, priority with respect to the shareholder sued may be acquired by the creditor who first institutes proceedings.1

141. Contribution between members.- Shareholders who have been required to pay to creditors of the company more than their pro rata of the corporate indebtedness are entitled to contribution from the other shareholders and may recover from them either by a bill in equity filed for that purpose, or by a cross-bill in the creditors' suit itself. Contribu

tion may be enforced as well where the amount paid was in discharge of a statutory liability as where it was upon the balance due for the unpaid subscription.' And in suits for contribution brought within the State, it is immaterial whether the statutory liability be contractual or penal. But non-resident shareholders can not be called upon to contribute on the ground of having been relieved of a common burden, when the liability discharged is in the nature of a penalty, statutes of that character having no extra-territorial effect.'

§ 142. Effect of increase and reduction of the capital stock. A reduction of the capital stock of a company does not relieve the shareholders from liability to prior corporate creditors, whether the reduction be made by decreasing the par value of the shares or by a dimunition of their number." Credit extended to a corporation after a reduction, however, is presumed to have been given upon the faith of the capital so reduced. A statute imposing a liability upon shareholders

to an amount equal to their stock, over and above what they owe upon their subscriptions, until the whole amount of the capital stock of the company shall have been paid in, applies as well to cases where the capital stock has been increased as where it is the original capital that remains unpaid.' But where the original capital is fully paid in and the certificate recorded, the liability is ended thus far, and is not revived as to stockholders to the original stock by reason of delinquency on the part of holders of the increased stock. The takers of the new stock can not avoid liability by pleading that the whole amount of the increase has not been subscribed for, as one may do in case of a subscription to the original stock. Technical objections to the validity of the contract of sub

have been made primarily to creditors who could not resort to the liability of the stockholders.

1 Chubb v. Upton, (1877) 95 U. S. 665; Weaver v. Mudgett, (1884) 95 N. Y. 295; Delano v. Butler, (1886) 118 U. S. 634.

2 Veeder v. Mudgett, 95 N. Y. 295; Ruger, C. J., and Andrews, J., dissenting. See also Sayles v. Brown, (1889) 40 Fed. Rep. 8; s. c. 7 Ry. & Corp. L. J. 2, construing R. I. Rev. Stat. ch. 128, § 1, which is similar to the New York Act of 1848, the court saying: "The filing of the certificate in the township of North Providence on July 19, 1864, ended the contractual individual liability of the stockholders under the first section of the law as to the debts thereafter contracted; and one question in this case is whether as to those who never took the new stock their individual liability was revived by the issuing of the new stock, supposing its issue to have been valid, and as to which no certificate was or could be filed. In construing a statute so harsh and so destructive of the very purposes of incorporation, it does not seem to us we should, if avoidable, give it a

construction which would put it in the power of those holding a majority of the stock, many of them, perhaps, as was the fact in this case, themselves personally responsible by indorsement and otherwise for the bulk of the company's large indebtedness, by voting an increase of capital by the issue of partially paid up stock, to impose a ruinous burden upon stockholders whose individual liability had once ended. The reasoning of the opinion of the court of appeals of New York in Veeder v. Mudgett, 95 N. Y. 295, is to us very convincing, and the judgment of that court upon a similar statute, but under which the stockholders could only be held to an amount equal to the par value of each one's stock, was that holders of the original stock were not liable, and that the liability rested solely upon the holders of the new stock, and only to the extent of their holdings of that new stock."

3 Nutter v. Lexington &c. R. Co., 6 Gray, 85; Clarke v. Thomas, 34 Ohio St. 46. Cf. Beach on Railways, §§ 105, 106, 107; Belton Compress Co. v. Sanders, 70 Tex. 699.