jurisdiction of a trust created by accountant’s intestate in favor of his children. Decree affirmed, and appeal dismissed, at the costs of appellants.

Appeal of CORNELL and ansther.1
(Supreme Court of Pennsylvania. October 4, 1886.)

1. CORPORATIONS—UNPAID Sunscnrrrrous To CAPITAL STooK—Tnus'r FUND— —PARTIES To BILL.

The unpaid subscriptions to the capital stock of a corporation are a trust fund for the benefit of its creditors, and, in seeking to enforce such trust by a proceeding in equity, it is not a fatal defect in the bill that all the creditors are not plaintiffs and all the stockholders are not made defendants.

2. SAME—CONDITIONAL SUBsCRIPTIons—EsTOPPEL.

Where part of conditiOnal subscriptions to stock were invalid, but were treated as binding and good by other subscribers, the latter will not be permitted to set up the invalidity of those subscriptions to show that the condi~ tion had not been fulfilled.

8. SAME—PERFORMANCE OF CONDITION.

Subscriptions to capital stock were made upon condition “that the same were not to be called in or payable until the furnace of said company was put in blast by the company. and that the same should only be used for working capital.” The furnace was leased to another person who put it in blast. Held, that this was a performance of the condition.

Appeal of Cornell dz Michler from the decree of the common pleas, Northampton county.

Bill in equity by Hahn & Bro. and others against Cornell & Michler and Mack & Edelman. The facts are stated in the opinion of the supreme court.

Henry W. Scott and Frank Reeder, for appellees.

There are sufficient parties to this bill. Marsh v. Burroughs, 1 Woods, 463; Hatch v. Dana, 101 U. S. 205; Bartlett v. Draw, 57 N. Y. 587; Bunn’s Appeal, 105 Pa. St. 49; Stang’s Appeal, 10 Wkly. Notes Gas. 409; Ogilvie v. Insurance 00-, 22 How. 380; Woods v. Drummer, 3 Mason, 308; McHose v. Wheeler, 45 Pa. St. 32. The subscriptions of the married woman will not render the others had, unless there was a scheme of fraud. Besides, these defendants have always treated the subscriptions as good. 'Custar v. Water 00., 63 Pa. St. 381; Penobscot v. White, 41 Me. 512; Grafi‘ v. Railroad Co., 31 Pa. St. 489; Green’s Brice, Ultra Vires, 152, 336, 348, 349; Robinson v. Railroad Co., 32 Pa. St. 334; Bailey v. Pittsburg, etc., 00., 69 Pa. St. 334; MeHose v. Wheeler, supra; Oakes v. Turquand, L.‘R. 2 H. L. App. Gas. 325; Hanover rt- 8. R. Co. v. Haldeman, 82 Pa. St. 36; Mc'Cully v. Pittsburgh d2 0. R. Co., 32 Pa. St. 25; Craig V. Normal School, 72 Pa. St. 46. The parol condition as to the last ten shares is not binding against creditors after insolvency. Bunn’s Appeal, 105 Pa. St. 49-62; Wilbur v. Stockholders, etc., 13 Phila. 482; Miller v. Railroad Co., 87 Pa. St. 95; McCarty v. Railroad 00.. Id. 332; Barrington v. Railroad Co., 134 Pa. St. 358. There was not sufficient evidence of it. Kennedy v. Plank-road Co., 25 Pa. St. 224; Thorne v. Warfilein, 100 Pa. St. 519; Martin v. Berens, 67 Pa. St. 459. The statute of limitations is not a good defense. York’s Appeal, 17 Wkly. Notes Gas. 33; S. G. 1 Atl. Rep. 162, and 2 Atl. Rep. 65; Patterson v. Lynde, 106 U. S. 519; S. C. 1 Sup. Ct. Rep. 432; Allibone v. Hager, 46 Pa. St. 54; Grubb v. Nanigation 00., 14 Pa. St. 302; Gray v. Navigation 00., 2 Watts 80 S. 162.

TRUNKEY, J. The Keystone Iron Company was incorporated March 24, 1873, under the act of June 16, 1836, and its supplements. Its capital stock was originally $100,000. By the unanimous resolve Of the stockholders the capital was authorized to [be increased $100,000; and in 1874 it was increased by additional subscriptions amounting to $75,000. A small part of the increase was unconditional. The greater part; was on condition that no subscription should be binding unless the total. subscriptions to the capital stock should equal $175,000. On the face of the subscriptions they equaled the stipulated sum. All the additional capital was subscribed before December 26, 1874, and on that date the. treasurer was instructed to call in 10 per centum per month until otherwise directed. In pursuance of this call, of which notice was given within a week thereafter to all the subscribers, all said stock was paid except $10,161; and $8,811 of that sum stands against the defendants. The» balance, $1,350, was subscribed by Mrs. Robertson, $250; Mrs. Bercaw, $600; and A. Frayley, $500. Mrs. Robertson and Mrs. Bercaw are married women, and Frayley is insolvent. The company erected a furnace at a cost exceeding $175,000. Its real estate and tangible personal property were sold at sheriff’s sale in 1876. The plaintiffs are judgment creditors of the company, and executions, issued on their respective judgments, were returned “No goods.” A board of directors has not been elected since 187 6, and the last meeting of directors was April 7, 1877. The only assets of the company for payment of its debts are the unpaid subscriptions to its capital stock.

The foregoing facts are averred in the bill, some of which are admitted and none denied in the answer, except that it is denied that the subscriptions are binding on defendants. All the defendants signed the subscrip. tion after the signatures of Mrs. Robertson and Mrs. Bercaw. The subscription is referred to as part of the bill, and none answers that he did not know they were married when he subscribed; nor does any defendant aver in answer that he notified the company, or other subscribers, that he was not bound by or would not pay his subscription by reason of non-performance of the condition, or for other cause. Arndt’sv signature is the second after Mrs. Robertson’s, and the fifth after Mrs. Bercaw’s. It is not denied in the answer that all the subscribers had due notice of the call; nor is bad faith on the part of the company or its agents alleged.

T. R. Sitgreaves was a member of the firm of Welch & Co.; E. B. Mack, Of Mack & Edelman; and A. Keller Michler, of Cornell & Michler. Sitgreaves and Mack were directors in 1874, and were continued in that Office thereafter while the company did business. The minutes show that they were attentive and active in their official duties. Michler was at the stockholders’ meeting on April 13, 1875; also on April 11, 1876, when he was one of the committee to make nominations and prepare a ticket. Welch & Co. and Mack & Edelman made three subscrip

tions to the increase of stock, and Cornell dz Michler two. Each firm paid a considerable part of its subscriptions. It is apparent, viewed in connection with the circumstances, that their last subscriptions were to make up the sum of $175,000.

It is proved and scarcely controverted that, when the capital of $100,000 had been expended, the furnace was not nearly completed, and the increase of $75,000 was for the purpose of its completion. That purpose seems to have been well understood by the subscribers. Dr. Arndt, one of the defendants, testifies:

“Abraham Bercaw came to me, and said, ‘Doctor, we have to have some more money.’ I said, ‘ What for?’ and he replied: 'We have the furnace all ready, with the exception that we must raise $175,000, and each stockholder must subscribe in order to put the furnace in running order. If we don’t succeed in raising the $175,000, you won’t have to pay.’ ”

Every interested party knew that the sum of $75,000 was required to put the furnace in running order.

The act of 1836 provides “that the stockholders in the corporation to be created under this act shall be individually liable for the amounts of capital stock by them respectively subscribed in such corporations, which have not been paid in.” P. L. 799.

This suit is to enforce that liability. Nothing more is demanded of each defendant than so much Of his subscription as remains unpaid. The plaintiffs put little stress on the claim that they gave credit on the faith of these subscriptions. They are creditors, and, as such, demand that part of the trust fund for payment of the debts of the company which remains in the hands of the defendants. There are other creditors of the company, but none of them have asked to be made parties. They might have come in as plaintiffs had they chosen to do so; and, if they stand aloof. no party in the litigation shall thereafter suffer by their action. For reasons satisfactory to themselves the defendants have not pressed for the appointment of a receiver, or that anything else be done in the interest of all the creditors. The plaintiffs are not bound to prosecute the 'suit in the interest of others who might, if they would, come in as co-plaintiffs. Nor was it necessary to make all stockholders, who had not paid, defendants. The burden does not rest on the plaintiffs to adjust the equities between persons who individually hold portions of the trust fund, especially where each denies that he holds any part of the fund. Every person who holds any of the fund is bound to pay all that he holds if necessary for satisfaction of the plaintiffs’ debt, although he may have right of contribution. Under the facts in this case, the bill praying for direct payment by the defendants to the plaintiffs is not fatally defective, but is santioned by precedent. Of the numerous cases referred to by the master and court below only two will be noted.

The capital of a corporation is a fund to which creditors look for payment of their claims; and if the stockholders diminish that fund by dividing any part of it among themselves, without first providing for pay— ment of all debts of the corporation, they receive it on the implied trust to pay the liabilities. And a creditor who has exhausted his remedy at law is clearly entitled to the assistance of equity to aid him in obtaining satisfaction of his claim out of the assets in the hands of the stockholders who possess them. The right of the claimant to immediate and entire relief is not to be delayed by any questions of expediency, or of the ultimate rights of the defendants to contribution. Each is bound to contribute his part of the trust fund in toto, and it is unnecessary that the creditor make all who received the trust fund parties. Stang’s Appeal, 10 Wkly. Notes Gas. 409. Can it be said that the controlling principles in that case are inapplicable to this?

In Hatch v. Dana, 101 U. S. 205, upon review of the authorities by Justice STRONG, it was ruled that creditors of an incorporated company who have exhausted their remedy at law can, in order to obtain satisfaction of their judgments, proceed in equity against a stockholder to enforce his liability to the company for the amount remaining due upon his subscription, although no account is taken of the other indebtedness of the company, and the other stockholders are not made parties.

Nothing in Lane’s Appeal, 14' Wkly. Notes Gas. 193, is inconsistent with the doctrine in Stang’s Appeal or in Hatch v. Dana. In that case John Maxwell and others, suing as well for themselves as for all other creditors who might become parties, brought suit in equity against the corporation, and the holders of its capital stock, to compel payment of the unpaid capital. In the elaborate opinion at the outset, Justice GREEN thus states the points for consideration:

“The chief contention before the master, as in this court, was upon the liability of the stockholders in this proceeding. It was contended on behalf of the defendants that they could not be called upon by bill in equity, as proposed in this case, for two reasons: First, because the complainants have a complete and adequate remedy at law specifically provided by the act of April 29, 1874, under which the company was incorporated; and, second, that the plaintiff, John Maxwell, the principal creditor, had a complete and adequate remedy by attachment in execution upon his judgment. ”

These were the defenses considered, and it was clearly shown that a bill in equity was the proper proceeding.

Doubtless there are cases where the action should be by or for all creditors, and against all persons liable to pay, or to contribute to payment of, the debts; and cases may arise when, upon proper application, creditors who were not parties in the first instance will be made parties, and when all persons liable to contribute must be made defendants.

The second point urged by appellants is that the subscription having been made on condition that the whole amount of the additional $75,000 should be subscribed, and part thereof having been made by married women, is not binding. Both their subscriptions were made on the same condition, and a part of the stipulated sum. They knew the condition of the subscription; that it contained the names of Mrs. Robertson and Mrs. Bercaw; and, for aught that appears, they were as well informed respecting those persons as any officer or other stockholder in the company. Cornell says the subscription was to complete the furnace. They did not have money enough to complete it. The appellants paid on the 20 shares first subscribed. What difference does it make whether the payment was made on the first or second? Each was part of the same sum. If one was binding, so was the other. By paying the first calls on one subscription, they waived the written condition. Their payment of calls, their active part in the meetings of stockholders, their silence respecting non-liability until after payment of more than seventenths of the whole additional subscription, forbid that they may now evade payment of the balance on the ground that one seventy-fifth part of the subscription was inadvertently received from married women. They paid part, others paid all, they subscribed. Had the business proved successful, the appellants would have been entitled to every share {of stock for which they agreed to pay. They must have their share of the burden in common with the shareholders who paid in full while they were actively and openly recognizing their liability.

The third ground of defense relates to. the 10 shares last subscribed, “having been made upon the further parol condition that it was not'to be called in until the furnace was put in blast by the company, and to be used only as working capita .” As shown by the testimony of one of the appellants, none knew better than they that the increased subscription was needed and made for the completion of the furnace. They do not pretend that the parol agreement was such as to vitiate the sub— scription already made. The parol agreement related to future subscriptions, made after more than two-thirds of the stipulated sum had been subscribed. It is a part of the $75,000, but the time of its payment was agreed to be postponed until completion of the furnace. A disinterested witness, called by defendants, testifies: '

“At the time the subscriptions were made, the question had not yet arisen whether the furnace should be put in blast by any other person than the company. The expression used was that the subscriptions should not be paid until the furnace was put in blast. The understanding was that the furnace was to be put in blast by the company. Upon that day nothing was said about putting in the blast by the company. The subscription was to be used _ as working capital. ”

In view of all the evidence, that is a fair statement of the oral promises at the time the appellants subscribed for the 10 shares. Dr. Arndt ‘was not then present. Debts were contracted for completion of the furnace, the unpaid capital was insufficient for working capital, the furnace was leased by authority of the stockholders, and the tenant put it in ' blast in 1876. The court did not err in holding that the condition was performed according to its reasonable intendment.

In any view, the subscription is not void or voidable. Its condition is stated in the answer thus: “That the same was not to be called in or payable until the furnace of said company was put in blast by the company, and that the same should only be used for working capital.” It was due when the furnace was put in blast. It was payable before it could be used for working capital. If the company failed to pay its ~@rlebts, the creditors could demand it from the shareholder as soon as due