A Treatise on the Law of Private Corporations Volume 3

A Treatise on the Law of Private Corporations Volume 3

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This historic book may have numerous typos and missing text. Purchasers can usually download a free scanned copy of the original book (without typos) from the publisher. Not indexed. Not illustrated. 1901 edition. Excerpt: ... it may be followed by the creditors into the hands of any persons, having notice of the trust attaching to it. As to the stockholders themselves, there can be no pretense to say, that, both in law and fact, they are not aflected with the most ample notice. The doctrine of following trust funds into the hands of any persons, who are not innocent purchasers, or do not otherwise possess superior equities, has been long established/'3 In the case just referred to it will be noticed that the corporation, while it was indebted, distributed funds representing its capital stock among the stockholders, without any consideration, leaving its creditors unpaid. The decision, therefore, might well have been based, not upon the ground that the capital stock, or the money or property representing the same, was in any sense a trust fund for the benefit of creditors, but upon the ground that the distribution of the assets among the stock holders was a fraud upon creditors; and this is true of many other cases in which the trust-fund doctrine has been announced. The doctrine has also been relied upon as ground for holding that creditors who have dealt with a corporation, presumably on the faith of its capital stock, may compel stockholders to pay in the full amount of their stock, if necessary for the payment of debts, and that the stockholders cannot escape such liability by setting up an agreement with the corporation by which they were not to be required to pay in full for the stock, ' or a release by the corporation from liability." These cases certainly do not require that the capital stock of a corporation shall be held to be a trust fund, for they may be sustained on the ground of fraud. For a corporation to issue its stock as full...show more

Product details

  • Paperback | 482 pages
  • 189 x 246 x 25mm | 853g
  • Rarebooksclub.com
  • United States
  • English
  • black & white illustrations
  • 1236765966
  • 9781236765963