ROGERS, Circuit Judge
(after stating the facts as above). The question which this case presents is whether a trustee of a bankrupt [861]*861Minnesota corporation has a right to maintain an action against a stockholder who received his stock from the company without paying the full par value and under an agreement that it should be nonassessable. The stockholder has been assessed by the receiver in bankruptcy S3 a share on 1,500 shares, and this action has been brought by the trustee of the bankrupt to recover $4,500.
[ 1 ] This is not an actio» to> recover the balance of an unpaid subscription to stock. The complaint alleged that the defendant was a subscriber for and the owner and holder of 1,500 shares of the capital stock of the par value of $100 per share, and that upon his subscription therefor he promised and agreed to pay $100 per share, and that he paid no part thereof except the sum of $5 per share. The District Judge, however, found as a fact that the defendant purchased his shares from the company under an express agreement between himself and the corporation that $10 per share should fully pay it for each such share and that the shares so sold should be nonassessable. He also found as a fact that in pursuance of the agreement the defendant paid the corporation $10 for each share. So long as there was an agreement with the corporation that no more than $10 need be paid for the stock, and that on the payment of that amount the stock was to be nonassessable, the agreement to that effect would be equally binding, as against the corporation, whether the defendant subscribed for the stock or purchased it. In neither event would the claim for the unpaid balance be an asset of the corporation. But if there had been a subscription for the stock, with no such understanding that on the payment of $10 per share the stock was to be nonassessable, then the claim for the unpaid balance would be an asset of the corporation. In the one case the trustee in bankruptcy might be able to maintain the action while in the other he might not. A contract entered into by a corporation with the unanimous consent of all the remaining stockholders that a particular stockholder need pay but a specified portion of the face value of the stock is binding on the corporation, although it may be declared void in favor of creditors who became such without notice of the agreement. It is to protect the right of such creditors that the present action was brought.
In Remington on Bankruptcy, § 976, the rule is stated to be that unpaid stock subscriptions in a bankrupt corporation pass to the trustee. This is undoubtedly true where the subscription is made without restriction. But it may not be everywhere true where the subscription is accompanied by an agreement similar to that which the corporation made with the defendant in the case at bar.
In re Jassoy Co., 178 Fed. 515, 101 C. C. A. 641 (1910) this court had before it the question of the right of a trustee in bankruptcy to maintain an action against stockholders to the extent of the amount unpaid on their stock. The trustee sued to enforce the payment of a balance of the par value of stock concededly issued as full-paid for property purchased, but which property had been found not to be worth the par value. In that case we held that as the bankrupt was a New York corporation the right to levy an assessment or to take other action to collect from its stockholders must be found in the statutes [862]*862■of this state; that there was no such right at common law, where an ■original contract of subscription did not-exist; and that in the federal courts the New York statute would be construed in strict conformity to the construction placed upon it by the New York Court of Appeals. We therefore held, in accordance with the decisions of that court, that no right of action passed to a trustee in bankruptcy of- the corporation in behalf of its general creditors^ to- enforce payments from stockholders to. whom full-paid stock was issued for property the real value of which was less than the par value of the stock.
That casé settled the law for this circuit, and we see no reason why it should be departed from in the case which is now presented to us. In the case at bar the bankrupt corporation was organized under the laws of the state of Minnesota. The defendant was a stockholder in a Minnesota corporation. The single question, therefore, is whether the Minnesota statute as interpreted by the Minnesota courts gives the receiver of the bankrupt corporation a right to maintain this action.
[2] The corporation was organized in 1906, and tire Minnesota statute (Gen. St. 1913, § 6193) reads as follows:
“Save as otherwise specially limited or provided, no corporation shall issue any share oí stock íor a less amount to be actually paid in than the par value of those first issued.”
This provision seems to have been enacted in 1866, and to have been retained in the various acts subsequently adopted and which regulate the corporations of that staté:
In Minnesota Thresher M. Co., v. Langdon, 44 Minn. 37, 46 N. W. 310 (1890), the Supreme Court held that a receiver could recover capital which had been withdrawn and refunded by the corporation as a .gratuity to its stockholders. The property so withdrawn was assets ■of the corporation at the time of the withdrawal. Although the corporation could not recover back the moneys so paid out, the court said that everything became assets in tire hands of the receiver which were assets as to creditors, and that the receiver might sue to recover them, not in the right of the corporation, but only in the right of the creditors. The reason for the decision, as explained in Minneapolis Baseball Co. v. City Bank, 66 Minn. 441, 443, 69 N. W. 331, 38 L. R. A. 415 (1896), was “because such was at one time the property of the corporation.”
In Hospes v. Northwestern Mfg. Co., 48 Minn. 197, 50 N. W. 1117, 15 L. R. A. 470, 31 Am. St. Rep. 637 (1892), the court had before it the liability of a stockholder on stock issued gratuitously as full-paid, no payment having ever been made, either in money or property. The company at the time the stock was issued was free from debt, but afterwards became insolvent. Its indebtedness amounted to about $3,000,000, and the corporate assets were not sufficient to pay any considerable part of it. The court elaborately considered the liability of ■one holding watered stock, and the opinion rendered has been frequently cited since by courts and text-writers. The “trust fund” doctrine announced by Justice Story in Wood v. Dummer, 3 Mason, 308, was subjected to a very discriminating criticism and rejected, as was that of an implied promise, and the liability of tire stockholder was placed, where it undoubtedly should rest, upon the fraud practiced [863]*863upon the creditors. The court held that an agreement to issue, as full-paid and nonassessable, stock for which full payment was hot to be made, was valid as between the company and the stockholder, but invalid as between the stockholder and creditors who became such after the slock was issued, and who could fairly be presumed to have relied on the fact that the stock had been paid for. And it was held that the right of the creditors against the stockholders in such cases was not derived through, the corporation, but accrued directly to the creditors or for their benefit. In the case of In re People’s Live Stock Insurance Co., 56 Minn. 180, 57 N. W.
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ROGERS, Circuit Judge
(after stating the facts as above). The question which this case presents is whether a trustee of a bankrupt [861]*861Minnesota corporation has a right to maintain an action against a stockholder who received his stock from the company without paying the full par value and under an agreement that it should be nonassessable. The stockholder has been assessed by the receiver in bankruptcy S3 a share on 1,500 shares, and this action has been brought by the trustee of the bankrupt to recover $4,500.
[ 1 ] This is not an actio» to> recover the balance of an unpaid subscription to stock. The complaint alleged that the defendant was a subscriber for and the owner and holder of 1,500 shares of the capital stock of the par value of $100 per share, and that upon his subscription therefor he promised and agreed to pay $100 per share, and that he paid no part thereof except the sum of $5 per share. The District Judge, however, found as a fact that the defendant purchased his shares from the company under an express agreement between himself and the corporation that $10 per share should fully pay it for each such share and that the shares so sold should be nonassessable. He also found as a fact that in pursuance of the agreement the defendant paid the corporation $10 for each share. So long as there was an agreement with the corporation that no more than $10 need be paid for the stock, and that on the payment of that amount the stock was to be nonassessable, the agreement to that effect would be equally binding, as against the corporation, whether the defendant subscribed for the stock or purchased it. In neither event would the claim for the unpaid balance be an asset of the corporation. But if there had been a subscription for the stock, with no such understanding that on the payment of $10 per share the stock was to be nonassessable, then the claim for the unpaid balance would be an asset of the corporation. In the one case the trustee in bankruptcy might be able to maintain the action while in the other he might not. A contract entered into by a corporation with the unanimous consent of all the remaining stockholders that a particular stockholder need pay but a specified portion of the face value of the stock is binding on the corporation, although it may be declared void in favor of creditors who became such without notice of the agreement. It is to protect the right of such creditors that the present action was brought.
In Remington on Bankruptcy, § 976, the rule is stated to be that unpaid stock subscriptions in a bankrupt corporation pass to the trustee. This is undoubtedly true where the subscription is made without restriction. But it may not be everywhere true where the subscription is accompanied by an agreement similar to that which the corporation made with the defendant in the case at bar.
In re Jassoy Co., 178 Fed. 515, 101 C. C. A. 641 (1910) this court had before it the question of the right of a trustee in bankruptcy to maintain an action against stockholders to the extent of the amount unpaid on their stock. The trustee sued to enforce the payment of a balance of the par value of stock concededly issued as full-paid for property purchased, but which property had been found not to be worth the par value. In that case we held that as the bankrupt was a New York corporation the right to levy an assessment or to take other action to collect from its stockholders must be found in the statutes [862]*862■of this state; that there was no such right at common law, where an ■original contract of subscription did not-exist; and that in the federal courts the New York statute would be construed in strict conformity to the construction placed upon it by the New York Court of Appeals. We therefore held, in accordance with the decisions of that court, that no right of action passed to a trustee in bankruptcy of- the corporation in behalf of its general creditors^ to- enforce payments from stockholders to. whom full-paid stock was issued for property the real value of which was less than the par value of the stock.
That casé settled the law for this circuit, and we see no reason why it should be departed from in the case which is now presented to us. In the case at bar the bankrupt corporation was organized under the laws of the state of Minnesota. The defendant was a stockholder in a Minnesota corporation. The single question, therefore, is whether the Minnesota statute as interpreted by the Minnesota courts gives the receiver of the bankrupt corporation a right to maintain this action.
[2] The corporation was organized in 1906, and tire Minnesota statute (Gen. St. 1913, § 6193) reads as follows:
“Save as otherwise specially limited or provided, no corporation shall issue any share oí stock íor a less amount to be actually paid in than the par value of those first issued.”
This provision seems to have been enacted in 1866, and to have been retained in the various acts subsequently adopted and which regulate the corporations of that staté:
In Minnesota Thresher M. Co., v. Langdon, 44 Minn. 37, 46 N. W. 310 (1890), the Supreme Court held that a receiver could recover capital which had been withdrawn and refunded by the corporation as a .gratuity to its stockholders. The property so withdrawn was assets ■of the corporation at the time of the withdrawal. Although the corporation could not recover back the moneys so paid out, the court said that everything became assets in tire hands of the receiver which were assets as to creditors, and that the receiver might sue to recover them, not in the right of the corporation, but only in the right of the creditors. The reason for the decision, as explained in Minneapolis Baseball Co. v. City Bank, 66 Minn. 441, 443, 69 N. W. 331, 38 L. R. A. 415 (1896), was “because such was at one time the property of the corporation.”
In Hospes v. Northwestern Mfg. Co., 48 Minn. 197, 50 N. W. 1117, 15 L. R. A. 470, 31 Am. St. Rep. 637 (1892), the court had before it the liability of a stockholder on stock issued gratuitously as full-paid, no payment having ever been made, either in money or property. The company at the time the stock was issued was free from debt, but afterwards became insolvent. Its indebtedness amounted to about $3,000,000, and the corporate assets were not sufficient to pay any considerable part of it. The court elaborately considered the liability of ■one holding watered stock, and the opinion rendered has been frequently cited since by courts and text-writers. The “trust fund” doctrine announced by Justice Story in Wood v. Dummer, 3 Mason, 308, was subjected to a very discriminating criticism and rejected, as was that of an implied promise, and the liability of tire stockholder was placed, where it undoubtedly should rest, upon the fraud practiced [863]*863upon the creditors. The court held that an agreement to issue, as full-paid and nonassessable, stock for which full payment was hot to be made, was valid as between the company and the stockholder, but invalid as between the stockholder and creditors who became such after the slock was issued, and who could fairly be presumed to have relied on the fact that the stock had been paid for. And it was held that the right of the creditors against the stockholders in such cases was not derived through, the corporation, but accrued directly to the creditors or for their benefit. In the case of In re People’s Live Stock Insurance Co., 56 Minn. 180, 57 N. W. 468 (1894), the court held that the power of a receiver of an insolvent corporation to prosecute and defend actions had reference to such actions as the corporation might have prosecuted or defended, had its affairs not been taken out of its hands by the appointment of a receiver. It was declared in that case that, as the constitutional or statutory liability of the stockholders was directly to the creditors, it was no. part of the assets of the corporation, and could not- be enforced by the corporation. It was also held that the right to recover the balance due on a subscription for stock was an indebtedness, not to the creditors of the corporation, but to the corporation itself, and that it might be enforced by the receiver; the claim being an asset of the corporation.
In Basting v. Ankeny, 64 Minn. 133, 66 N. W. 266 (1896), the court held that the receiver of an insolvent corporation could maintain an action for an unpaid subscription for shares; that being a debt due to the Corporation, and as such an asset of the corporation.
In Minneapolis Baseball Company v. City Bank, supra, the court held that a receiver of an insolvent corporation had no authority to enforce the individual liability of stockholders for the debts of the corporation. The court said:
“Everything which is still sm asset of the corporation or debtor as to creditors becomes an asset in the hands of such a receiver. Among the rights which jrass to him as the representative of creditors is the right to recover property of the corporation conveyed in fraud of creditors, or capital refunded without consideration to stockholders; that is, Ms power's and functions relate only to what is, or was at some previous time, and still is, as to creditors, tiie property or estate of the corporation.”
We do not find in any subsequent Minnesota decisions any qualification of the doctrine announced in the above, cases. Our attention has been directed to some of the later decisions, which counsel would have us believe depart from the doctrine laid down in the earlier cases; but we are unable to> accept his view, and we think that all such cases are easily distinguishable, and by no means warrant the conclusion that in the state of Minnesota a receiver or trustee could maintain an action against an original holder of nonassessable stock issued for less than par to recover for the benefit of creditors the unpaid balance on the stock.
In view of our decision in the Jassoy Case and the decisions of the Minnesota courts, the District Court was right in holding that the plaintiff, as trustee in bankruptcy, has no cause of action.
Judgment affirmed. •