RHODE ISLAND MORTGAGE & TRUST CO. v. MOULTON

RHODE ISLAND MORTGAGE & TRUST CO. v. MOULTON. (Circuit Court, N. D. Illinois, N. D. November 8, 1897.) Corporation — Liability op Stockholder for Corporate Debt. Tin? statutory liability of a shareholder in a Kansas corporation for the corporate debts follows the stock, so that one who holds stock when judgment is rendered against: the corporation is liable therefor, although he owned no stock when the debt accrued for which the judgment, was rendered. This was an action at law by the Rhode Island Mortgage & Trust Company against Don A. Moulton. The case was heard on demurrer to the declaration. T. W. Pringle and J. ( }. Sloneekor, for plaintiff. J. H. Hi,ale, for defendant. [MAJORITY — GROSSCUP, District Judge] GROSSCUP, District Judge (orally). The action is brought against the defendant as a shareholder in a Kansas corporation, and the declaration sets forth the provisions of the constitution and laws of Kansas wherein the shareholder's statutory liability is created, the creation of debt by the corporation, the judgment thereon, and the issuance of an execution and its return nulla bona. The declaration also avers that the defendant was. at. the time of the judgment and the return of the execution, a shareholder in the corporation, but does not aver that he was such shareholder at. the time the debt was originally created. The demurrer to the declaration raises this question: Can there be a recovery against one who was a shareholder at the time of the judgment and execution who was not a shareholder at the time the debt was created? After a careful examination of all the authorities, 1 am constrained to hold that the statutory liability of a shareholder in a Kansas corporation follows the stock, and is, therefore, in force against all shareholders who hold stock at the time of the judgment and default, independently of their relationship to the company at the date of the creation of the debt. The demurrer will therefore be overruled.