Emmert v. Nicodemus

Stewart, J., delivered the opinion of the Court. The Antietam Manufacturing Company of Washington county, not having sufficient means to meet all of its liabilities, its property has been sold under a decree for their payment. The contest over the proceeds of the sale, is between the parties here, as creditors, as to their proper application between them. The capital stock of the Company, not having been paid up, and the appellant claiming as creditor, but having been a stockholder in the Company, and participating as a director in its operations, and thus liable, under the 52nd sec. of 26th Art. of the Code, to the creditors, to the amount of his stock, objection has been made by them to his equal participation in this fund.

Without going into further detail of the proceedings, the chief question for our review, is whether he is entitled in this proceeding to equal distribution with the appellees, who are creditors, but not stockholders in the Company; or, in other words, ought the appellant’s claim to be ¹³⁰ reduced to the amount of his stock, as an equitable set off, for the benefit of the appellees ? The provisions of the Code are clear, that the appellant is responsible as a stockholder,rinder the circumstances, to the extent of his stock, for all debts and contracts made by the Company, of which he was a stockholder, until the whole amount of the stock has been paid in. In a suit at law by the appellees or creditors against the appellant, as a stockholder, he is unquestionably liable to the amount of his stock. Matthews, et al. vs. Albert, et al., 24 Md., 527 ; Norris vs. Johnson, 34 Md., 485 , and Norris vs. Wrenschall, 34 Md., 492 ; Booth vs. Campbell, 37 Md., 522 .

But fhe counsel for the appellant insists, that as this is a proceeding originating against the Company itself, in a Court of Equity, and the proceeds of sale under its decree are to be distributed by such Court amongst the creditors, the liability of the appellant ought not to be enforced, as the matter stands, but that the entire assets of the Company ought to be administered; and other stockholders, equally liable with the appellant, made parties, and compelled to contribute, so as to render justice between him and such stockholders, without resort to a distinct trial, for the settlement of their relative equities. Such interposition of the Court would give unnecessary complexity to the proceedings, and be attended with useless delay, and so far from giving to the general creditor, in a contest between him and the stockholder‘creditors, the benefit of the remedy designed by the law, against a stockholder, would, in effect, require him, for the special benefit of the stockholder creditor, to abide a settlement between other parties, liable as between themselves, it may be, to contribute to the payment of the debts of the Company. In the distribution of this fund in