Mr. Chief Justice Shope
delivered the opinion of the Court:
This bill is filed by and in behalf of creditors of an insolvent corporation,—the Papillon Manufacturing Company,—and its stockholders, to subject their unpaid subscriptions for stock to-the payment of the debts of the company, and to wind up and close its affairs.
» Section 8 of the act in reference to corporations for pecuniary profit creates a liability against stockholders for the amount , unpaid upon their capital stock. That section provides : “Bach . stockholder shall be liable for -the debts of the corporation to , the extent of the amount that may be unpaid upon the stock held by him, to be collected in the manner herein provided.” And further: “No assignor of stock shall be released from any such indebtedness by reason of any assignment of his stock, but shall remain liable therefor, jointly with the assignees, until the said stock shall be fully paid. * * * Every assignee or transferee of stock shall be liable to the company for the amount unpaid thereon, to the extent and in the same manner as if he had been the original subscriber.” Section 25 of the act provides, that “if any corporation or its agents shall * * * allow any execution or decree of any court of record for the payment of money, after demand made by the officer, to be returned no property found, or to remain unsatisfied for not less than ten days after such demand, or shall dissolve or cease doing business, leaving debts unpaid, suits in equity may be brought against all persons who are stockholders at the time, or liable in any way for the debts of the corporation, by joining the corporation in such suits; and each stockholder may be required to pay his pro rata share of such debts or liabilities to the extent of the unpaid portion of his stock, after exhausting the assets of such corporation.” ,
These two sections, having reference to the same subject,— the liability of stockholders, and the remedies by which to enforce the same,—should be so construed that each may stand, and effect be given to the provisions of each. The first section creates the liability of the stockholder and defines its extent, and also makes his assignee equally and jointly liable with him. Section 25 authorizes creditors of the corporation to bring suits in equity against the corporation and stockholders to enforce the liability of the latter, if the corporation does, or fails to do, any act subjecting it to a forfeiture of its charter, or fails to make payment, or permits executions to be returned no property found, after demand by the officer, or shall dissolve or cease to carry on its business, as therein provided.
The liability of the stockholder is for his unpaid stock. To the extent it is unpaid, he is liable for the debts and obligations of the corporation. When the liability is once discharged by payment to the corporation, a subsequent assignee or purchaser will take the stock relieved from the burden imposed by the statute. Thebus v. Smiley, 110 Ill. 316.
The first assignment of error presents the question whether the stock of appellants was not full paid up stock, and therefore not liable to assessment. It appears from the evidence, that before the issue of stock, or at least before the issue of a portion of it, stock was transferred upon the books of the company to the company itself, apparently under the belief that the company thereby became the legal holder and owner thereof, and that it could thereafter be put upon the market at less than its par value. It was therefore called “treasury stock.” On this theory the corporation sold a great portion of such stock to its subscribers at prices ranging from five to twenty per cent of its par value. On February 12,1883, the following order or resolution was entered upon the books of the corporation: “On motion of Mr. Nourse, the market value of the capital stock was placed at twenty cents per dollar until further notice.” Mr. Holland testified as follows: “The cash payment, the price we had sold the stock at,—that is, to be paid in the first payment,—was $10 a share. We afterwards raised the price to $20 a share,—$20 paid in. The market price was fixed under the by-laws.” He then quotes the resolution before mentioned, and says: “Stock was sold under that order to Mr. Ailing and to Mr. Clark. Prior to that time we had ■sold at five cents and ten cents on the dollar. I sold Mr. Dun-ham his stock. He paid ten per cent.” Of this treasury stock, ■Clark, Lotz and Nourse each became the holder and owner of, or subscriber for, 1000 shares, aggregating one-half of the capital stock of the company. Appellants now contend, that after this transfer of the capital stock to the treasury of the corporation, it was held and might be sold as any other property of the company, and that they purchased their stock in good faith, as full paid stock, and that they are not liable to assessment under the statute. It is also contended, that the certificates of stock indicated on their face that the stock was paid up stock. These certificates read: “This is to certify that..........is the owner of 100 shares of the capital stock of the Papillon Manufacturing Company, ” etc. Receipts were given to some of the purchasers, one of which reads:
“Papillon Mane. Co., 50 Mich. Ave.,
Chicago, February 16, 1883.
“William G. Hibbard, Esq.:
“Dear Sir—I hereby acknowledge the receipt of your ck., number 3411, five hundred dollars, ($500,) in full for one hundred shares of stock, certificate No. 47.
“Yours respectfully,. L- C- Lotz, Treasurer.”
The question does not arise, here, between the corporation • and its stockholders, but between the insolvent corporation and its creditors. In Union Mutual Life Ins. Co. v. Frear Stone Manufacturing Co. et al. 97 Ill. 537, it was held, that ■ the capital stock of the corporation is a trust fund, that the directors may not give away or misappropriate to the prejudice of parties who may deal with the corporation, and that any device by which members of the corporation seek to avoid the liability imposed upon them by law, is void as to creditors, whether binding or not as between themselves or between them and the corporation. Nor is it in the power of the shareholders, by private agreement with the corporation, to make the shares of the stock non-assessable, so as to excuse payment for such stock at its par value, as against creditors. Melvin v. Lamar Ins. Co. 80 Ill. 446; Zirkel v. Joliet Opera House Co. 79 id. 334.
The law sought to be enforced in this case is intended to protect persons dealing with corporations, and it should not, if susceptible of any other, receive such a construction as will defeat the intention of the legislature. It is clear that each of these parties, in procuring stock from the corporation, knew that the corporation was not receiving par value therefor. They purchased stock and took it of the company at from one-twentieth to one-fifth of its face value, thereby reducing the capital of the company, in fact, to one-fifth or one-twentieth of its authorized capital, upon the faith of which the public were authorized to deal with it. The plan pursued in this case was but a device to evade the law, and to defeat its useful and wholesome provisions.
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Mr. Chief Justice Shope
delivered the opinion of the Court:
This bill is filed by and in behalf of creditors of an insolvent corporation,—the Papillon Manufacturing Company,—and its stockholders, to subject their unpaid subscriptions for stock to-the payment of the debts of the company, and to wind up and close its affairs.
» Section 8 of the act in reference to corporations for pecuniary profit creates a liability against stockholders for the amount , unpaid upon their capital stock. That section provides : “Bach . stockholder shall be liable for -the debts of the corporation to , the extent of the amount that may be unpaid upon the stock held by him, to be collected in the manner herein provided.” And further: “No assignor of stock shall be released from any such indebtedness by reason of any assignment of his stock, but shall remain liable therefor, jointly with the assignees, until the said stock shall be fully paid. * * * Every assignee or transferee of stock shall be liable to the company for the amount unpaid thereon, to the extent and in the same manner as if he had been the original subscriber.” Section 25 of the act provides, that “if any corporation or its agents shall * * * allow any execution or decree of any court of record for the payment of money, after demand made by the officer, to be returned no property found, or to remain unsatisfied for not less than ten days after such demand, or shall dissolve or cease doing business, leaving debts unpaid, suits in equity may be brought against all persons who are stockholders at the time, or liable in any way for the debts of the corporation, by joining the corporation in such suits; and each stockholder may be required to pay his pro rata share of such debts or liabilities to the extent of the unpaid portion of his stock, after exhausting the assets of such corporation.” ,
These two sections, having reference to the same subject,— the liability of stockholders, and the remedies by which to enforce the same,—should be so construed that each may stand, and effect be given to the provisions of each. The first section creates the liability of the stockholder and defines its extent, and also makes his assignee equally and jointly liable with him. Section 25 authorizes creditors of the corporation to bring suits in equity against the corporation and stockholders to enforce the liability of the latter, if the corporation does, or fails to do, any act subjecting it to a forfeiture of its charter, or fails to make payment, or permits executions to be returned no property found, after demand by the officer, or shall dissolve or cease to carry on its business, as therein provided.
The liability of the stockholder is for his unpaid stock. To the extent it is unpaid, he is liable for the debts and obligations of the corporation. When the liability is once discharged by payment to the corporation, a subsequent assignee or purchaser will take the stock relieved from the burden imposed by the statute. Thebus v. Smiley, 110 Ill. 316.
The first assignment of error presents the question whether the stock of appellants was not full paid up stock, and therefore not liable to assessment. It appears from the evidence, that before the issue of stock, or at least before the issue of a portion of it, stock was transferred upon the books of the company to the company itself, apparently under the belief that the company thereby became the legal holder and owner thereof, and that it could thereafter be put upon the market at less than its par value. It was therefore called “treasury stock.” On this theory the corporation sold a great portion of such stock to its subscribers at prices ranging from five to twenty per cent of its par value. On February 12,1883, the following order or resolution was entered upon the books of the corporation: “On motion of Mr. Nourse, the market value of the capital stock was placed at twenty cents per dollar until further notice.” Mr. Holland testified as follows: “The cash payment, the price we had sold the stock at,—that is, to be paid in the first payment,—was $10 a share. We afterwards raised the price to $20 a share,—$20 paid in. The market price was fixed under the by-laws.” He then quotes the resolution before mentioned, and says: “Stock was sold under that order to Mr. Ailing and to Mr. Clark. Prior to that time we had ■sold at five cents and ten cents on the dollar. I sold Mr. Dun-ham his stock. He paid ten per cent.” Of this treasury stock, ■Clark, Lotz and Nourse each became the holder and owner of, or subscriber for, 1000 shares, aggregating one-half of the capital stock of the company. Appellants now contend, that after this transfer of the capital stock to the treasury of the corporation, it was held and might be sold as any other property of the company, and that they purchased their stock in good faith, as full paid stock, and that they are not liable to assessment under the statute. It is also contended, that the certificates of stock indicated on their face that the stock was paid up stock. These certificates read: “This is to certify that..........is the owner of 100 shares of the capital stock of the Papillon Manufacturing Company, ” etc. Receipts were given to some of the purchasers, one of which reads:
“Papillon Mane. Co., 50 Mich. Ave.,
Chicago, February 16, 1883.
“William G. Hibbard, Esq.:
“Dear Sir—I hereby acknowledge the receipt of your ck., number 3411, five hundred dollars, ($500,) in full for one hundred shares of stock, certificate No. 47.
“Yours respectfully,. L- C- Lotz, Treasurer.”
The question does not arise, here, between the corporation • and its stockholders, but between the insolvent corporation and its creditors. In Union Mutual Life Ins. Co. v. Frear Stone Manufacturing Co. et al. 97 Ill. 537, it was held, that ■ the capital stock of the corporation is a trust fund, that the directors may not give away or misappropriate to the prejudice of parties who may deal with the corporation, and that any device by which members of the corporation seek to avoid the liability imposed upon them by law, is void as to creditors, whether binding or not as between themselves or between them and the corporation. Nor is it in the power of the shareholders, by private agreement with the corporation, to make the shares of the stock non-assessable, so as to excuse payment for such stock at its par value, as against creditors. Melvin v. Lamar Ins. Co. 80 Ill. 446; Zirkel v. Joliet Opera House Co. 79 id. 334.
The law sought to be enforced in this case is intended to protect persons dealing with corporations, and it should not, if susceptible of any other, receive such a construction as will defeat the intention of the legislature. It is clear that each of these parties, in procuring stock from the corporation, knew that the corporation was not receiving par value therefor. They purchased stock and took it of the company at from one-twentieth to one-fifth of its face value, thereby reducing the capital of the company, in fact, to one-fifth or one-twentieth of its authorized capital, upon the faith of which the public were authorized to deal with it. The plan pursued in this case was but a device to evade the law, and to defeat its useful and wholesome provisions. Clark, Lotz and Nourse having each subscribed for a greater number of shares of the capital stock, those actually taken by them will be held as though issued to them under their several subscriptions, and they can not be heard to say that they are purchasers, from the corporation, of paid up stock. They can not defeat their liability to the creditors of the corporation by subscribing for the stock and then surrendering it to the corporation, and taking it from the corporation, which they controlled and managed, at a tenth or a twentieth of its value. The amount paid by them will, in equity, be treated as a payment upon their stock, and they will be held liable for their pro rata share to the creditors of the insolvent corporation.
It is also claimed that the decree is erroneous for' the reason that Clark, Lotz and Nourse are not held liable for or upon all the stock originally subscribed for by them, respectively. As before shown, Clark subscribed for 2191f shares, Lotz for 219 If shares, and Nourse for 119 If shares, of the par value of $100 each,—which were surrendered and thereafter called “treasury stock.” Subsequently, Clark and Lotz each subscribed for and took 1000 shares of such stock, and Nourse also subscribed for 1000 shares, but failed to pay for the same. Still, subsequently, appellants, with others, purchased of the corporation directly, at prices ranging from five to twenty per cent of the par value, all of the stock of the company except the 3000 shares taken by Clark, Lotz and Nourse, and 700 shares which remained unsold. The decree required Clark, Lotz and Nourse to contribute their pro rata share upon the 1000 shares subscribed for and taken by each of them, and also upon the 700 shares remaining unsold. The insistence-is, that Clark, Lotz and Nourse should he held jointly liable with appellants upon the stock purchased by the latter of the-company. This position is based upon section 8 of the act before quoted, which is: “No assignor of stock shall be released from any such indebtedness by reason of any assignment of his stock, but shall remain liable therefor jointly with the assignee,” etc.
The answer to this contention is apparent. Appellants are not the" assignees, nor is either of them, of Clark, Lotz or Nourse. The latter are not the assignors of the stock held by appellants, or either of them. To create the joint liability imposed by the statute, the persons sought to be charged jointly with the holder of the stock must have been the assignors of the stock. What Clark, Lotz and Nourse did do was to surrender the subscriptions made by them to the corporation, and which were attempted to be accepted by the corporation, and the stock represented by such subscriptions held by it for sale as the property of the company. The corporation is unquestionably liable to its creditors, and the acceptance by them of the surrender of the subscriptions could not add to such liability. It must be apparent that Clark, Lotz and Nourse are not, within the meaning of the statute, the assignors of the stock which appellants purchased of the company. The liability of Clark, Lotz and Nourse, if any exists, in respect of the stock held by appellants, arises out of their original subscription to the capital stock of the company, and not from their relation thereto as assignors thereof. No creditor of the corporation is here complaining of the decree, or insisting upon the liability by reason of such subscription. When the matter of such liability is properly raised, a very different question will be presented for our consideration, and in respect to which we now express no opinion. Appellants, as before seen, took their stock from the company directly, at less than its face value, and are personally liable, and they can not complain that others may also be liable at the suit of the creditors of the corporation.
No discussion need be here had of the effect of a bona fide surrender of stock, and an acceptance thereof, upon creditors who become such after the acceptance of such surrender; but it may be said that appellants are in no position to complain of the surrender in this case. If there could arise equities entitling appellants to relief as against such original subscribers, the state of the pleadings is not such as to authorize a decree in their favor.
It is next complained that the decree is erroneous in that it dissolves the corporation. All its property and assets were gone, and it had long ceased to transact business. It was already defunct, and it is not shown that it had anything, tangible or intangible, of any value, or that its continued existence would be of the slightest advantage to any of its stockholders. It is "not seen that the decree in this respect was prejudicial to appellants, or that the corporation being kept alive could serve any useful or proper purpose. If it was here complaining, the answer would be that its dissolution was authorized by the statute. St. Louis and Sandoval Coal and Mining Co. et al. v. Sandoval Coal Mining Co. 116 Ill. 170.
Appellant Dunham assigns for error that this decree was improperly rendered as to him, for the reason that he did not appeal from the first decree rendered, which was reversed, upon the appeal of others, in the Appellate Court. As the first decree required him to pay a much greater amount than the present -decree does, it is not observable in what way he was injured. But aside from this, when a judgment or a decree is a unit, a reversal at the instance of one party operates as a reversal as to all. In this case the reversed decree found the whole sum to be raised from the unpaid subscriptions, and the part each defendant was to contribute, and its reversal made it necessary to find a different gross sum to be thus raised. This, of course, changed the sum each was to pay, and a reversal upon the appeal of any one of the defendants necessarily vacated the decree as to all. “Where there are several dependent judgments, and the principal one is reversed, the others can not be sujiported.” (2 Saunders, 101a; McJilton v. Love, 13 Ill. 486.) Where, however, the interests of the several parties against whom a judgment and a decree are . rendered are several and independent, a reversal will operate only in favor of the-parties who procure it. (Enos v. Capps, 12 Ill. 255; Rees v. Chicago, 38 id. 323; Pittsburgh, Ft.Wayne and Chicago Ry. Co. v. Reno et al. 123 id. 273.) It is manifest that this appellant can not complain of the decree in this respect.
We find no substantial error in the record, and the judgment of the Appellate Court will be affirmed.
Judgment affirmed.