Moore v. Reynolds , 109 Mass. 473 ( 1872 )

Colt, J.

This case is reserved upon several points. One of them, in the opinion of the court, is decisive. The remedy of the plaintiffs is wholly under the St. of 1862, c. 218, which requires, in § 4, that the remedy of a creditor against officers liable for the debts of the corporation shall be by bill in equity filed in behalf of himself and all other creditors of the corporation, for the recovery of the sums due to him and such other creditors. The declared purpose of that statute was to define and regulate the enforcement of the liabilities of officers and stockholders of man- ■ ufacturing corporations, and it does that by providing a convenient mode by a single suit in which the rights and claims of all creditors may be once for all secured and adjusted.

The liability of officers for the debts of the corporation in several, if not a majority, of its forms is a limited liability, as where it is limited to the amount of a dividend made when the corporation is insolvent; or to the amount of a loan to a stockholder; or to the excess of the debts over the capital stock. In all such cases, where there are various parties having several and unequal claims, the remedy, independently of the statute, is in equity, where alone the fund which this limited liability represents can be administered so that all claimants may share alike in it. Merchants’ Bank of Newburyport v. Stevenson, 10 Gray, 232, and 5 Allen, 398. The St. of 1862 therefore wisely and imperatively requires that the bill in all cases be brought in behalf of all the creditors of the corporation. This objection was taken in the answer of one of the defendants, and was relied on at the hearing, where it appeared that there were other creditors similarly situated in all respects, and having like claims against the corporation. It was seasonably taken, does not appear to have been waived, and must prevail.

Bill dismissed, with costs ^*

* The St. of 1862, c. 218, is repealed by the St. of 1870, c. 224, § 69, which went into effect thirty days after May 9,1870, the day of its passage.