Marshall v. Harris

1. Corporation: failure to-publish notice: liability of stockholders. Stoddiolders in a corporation -winch has failed to comply with the requirements of the law necessary to render their property exempt from corporate debts are primarily liable for such debts, and may be sued without the property of the corporation being first exhausted.

Appeal from Louisa Crrcwit Court. The plaintiff is a creditor of an association of persons who did business together under the name of The Co-operative Store of Morning Sun and Yicinity. The defendants were members of the association. The plaintiff recovered'a judgment upon his claim against the association, and collected a portion of it. This action is brought to recover the balance of the defendants; the claim against them being based upon the ground that while the members of the association adopted articles of incorj)oration, jiroviding for exemption from individual liability, they failed to comply with the law in respect to the publication of notice, and did not, therefore, succeed in exempting themselves from individual liability. The defendants for answer aver, in substance, that the plaintiff dealt with the association as a corporation formed and acting under the laws of Iowa, and accepted a promissory note for his claim, signed by persons acting as officers of the corporation, and by reason of such deal, and the acceptance of such note, he is estopped from denying the corporate character of the association. They further aver, in substance, that the association made an assignment to one Delzell; that the plaintiff’s judgment, upon which this action is brought, was rendered against Delzell as assignee, and that one of the payments made upon the judgment was made by him; that he is still assignee and has funds in his hands for the discharge of the debts of the association. To tlie answer the plaintiff demurred, and the demurrer was sustained and judgment rendered for the plaintiff. The defendants appeal.