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HORNOR V. HENNING, 93 U. S. 228 (1876)

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U.S. Supreme Court

Hornor v. Henning, 93 U.S. 228 (1876)

Hornor v. Henning

93 U.S. 228

Syllabus

The Act of Congress, 16 Stat. 98, under which certain corporations are organized in the District of Columbia, contains a provision, that

"if the indebtedness of any company organized under this act shall at any time exceed the amount of its capital stock, the trustees of such company assenting thereto shall be personally and individually liable for such excess to the creditors of the company."

Held

1. That an action at law cannot be sustained by one creditor among many for the liability thus created, or for any part of it, but that the remedy is in equity.

2. That this excess constitutes a fund for the benefit of all the creditors so far as the condition of the company renders a resort to it necessary for the payment of its debts.

The plaintiff in error, who was plaintiff below, had judgment against him on demurrer to his declaration. The substance of the declaration is that he is a creditor of the Washington City Savings Bank; that the bank had incurred an indebtedness of $850,000 in excess of the amount of its capital stock, with the chanroblesvirtualawlibrary

Page 93 U. S. 229

assent of the defendants, who were the trustees of said bank, by reason whereof a right of action had accrued to plaintiff to have and recover the amount of his debt -- to wit, $4,000.

The Act of Congress of May 5, 1870, 16 Stat. 98, authorizes the formation of corporations for various purposes within the District of Columbia by the voluntary association of individuals, who shall pursue the directions of the statute on the subject. Sec. 4 of that act provides for manufacturing, agricultural, mining, and mechanical corporations, and contains several provisions on the subject of the liability of the stockholders and of the trustees who manage these corporations. One of these is, that

"if the indebtedness of any company organized under this act shall at any time exceed the amount of its capital stock, the trustees of such company assenting thereto shall be personally and individually liable for such excess to the creditors of the company."

By the second section of an act of the same session, passed June 17, 1870, 16 Stat. 153, it was enacted that savings banks might be organized under the provisions of sec. 4 of the act first mentioned, which contains the clause above recited, and it is on the liability of the trustees declared in this clause that plaintiff bases his cause of action. chanroblesvirtualawlibrary

Page 93 U. S. 230





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