§ 655.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. XI. contracted by the bank. The public as well as the legislature have always supposed this to be a fund appropriated for such purpose. The individual stockholders are not liable for the debts of the bank in their private capacities. The charter relieves them from personal responsibility, and substitutes the capital stock in its stead. Credit is usually given to this fund by the public as the only means of repayment. During the existence of the corporation it is the sole property of the cor- poration, and can be applied only according to the charter ; that is, as a fund for the payment of its debts, upon the se- curity of which it may discount and circulate notes. Why otherwise is any capital required by our charters? If the stock may the next day after it is paid in be withdrawn by the stockholders without payment of the debts of the corporation, why is its amount so strenuously provided for, and its pay- ment by the stockholders so diligently required ? To me this point appears so plain upon principles of law as well as com- mon sense, that I cannot be brought into any doubt that the charters of our banks make the capital stock a trust fund for the payment of all the debts of the corporation." Again, in Sanger v. Upton, giving the opinion of the Federal Supreme Court, Justice Swayne said: 1 "The capital stock of an incorporated company is a fund set apart for the payment of its debts. It is a substitute for the personal liability which subsists in private co-partnerships. When debts are incurred, a contract arises with the creditors that it shall not be with- drawn or applied, otherwise than upon their demands, until such demands are satisfied. The creditors have a lien upon it in equity. 2 If diverted they can follow it as far as it can be traced, and subject it to the payment of their claims, except as against holders who have taken it bona fide for a valuable consideration, and without notice. It is publicly pledged to those who deal with the corporation for their security. Un- paid stock is as much a part of this pledge, and as much a part of the assets of the company, as the cash which has been paid in upon it. Creditors have the same right to look to it as to anything else, and the same right to insist upon its i 91 U. S. 5G, 60. I First Nat. Bk. v. Dovetail Co., 143 2 But no " specific" lien. Electric I Ind. 550; Atlas National Bank v. Co. v. Electric Co., 116 N. C. 112; I Moran Co., 138 Mo. 59. 656
