SUPREME COURT DECISIONS. BISSELL V. HEATH. (Supreme Court of Michigan, Jan. 28, 1894.) Corporations-Double liability of stockholders-Title of laws-Bank receivers-Judicial powers-Allowance of claims-Impairing obligation of contracts-Amending charter. 1. One to whom a certificate of stock in a state bank is issued, and who receives dividends thereon for several years, cannot escape the double liability imposed on stockholders by the banking act of 1887, § 46, on the ground that he was not an original subscriber to the stock, and that no formal transfer from such a subscriber to him appears on the bank books. 2. A stockholder in a bank, who has received dividends for years, cannot after the bank has become insolvent and gone into a receiver's hands, repudiate his double liability to creditors imposed by the banking act of 1887, § 46, on the ground that he was induced to become a stockholder by the fraud of the officers of the bank. 3. The banking act of 1887, entitled "An act to revise the laws authorizing the business of banking, and to establish a banking department for the supervision of such business," though capable of being subdivided, and enacted into several laws, has but one general object, and does not violate Const. Art. 4, § 20, which provides that no law shall embrace more than one object, which shall be expressed in its title. 4. The banking act of 1887, § 57, which empowers the receiver of an insolvent bank to allow or reject claims presented against the bank, subject to review by the court appointing him, does not clothe him with judicial powers, in violation of Const, Art. 6, § 1. vesting such powers in specified courts. 5. Under the power reserved to the legislature by Const. Art. 15, § 1, of amending, altering or repealing all laws relating to the formation of corporations, the legislature may impose on stockholders of existing corporations a liability to creditors in double the amount of their stock, and such legislation is not invalid as impairing a pre-existing contract between the stockholders and the corporation. 6. The banking act of 1887, § 56, which requires the receiver of an insolvent bank to give twelve weeks' notice by publication for presentation of claims by creditors, is for their benefit, and does not prevent the receiver from passing on a claim presented to him on a briefer notice. Error to circuit court, Oakland county; Joseph B. Moore, Judge, Action by Edward J. Bissell, receiver of the Milford State Bank, against Francis Heath, to enforce the additional liability of defendant as a stockholder in the bank. There was a judgment for plaintiff, and defendant brings error. Affirmed. Atkinson & Carpenter, for appellant. Edward J. Bissell, in pro. per. MONTGOMERY, J. The Milford State Bank was organized October 21, 1886, and continued in business until the 15th of September, 1891, at which date a bill was filed, under the general banking law of the state, (Act No. 205, Laws 1887) to wind up the affairs of the corporation. Plaintiff was appointed receiver under said act. Claims were filed with, and approved by, him, aggregating $104,287 due depositors, and $4,801.75 due other creditors, besides certain contingent liabilities. Defendant was charged with liability as a stockholder under the provisions of section 46 of the act of 1887 which provides that "the stockholders of every bank shall be individually liable, equally and ratably, and not one for another, for the benefit of depositors in said bank to the * * amount of their stock at the par value thereof, in addition to the said stock. * Such liability may be enforced in a suit at law or in equity by any such bank in process of liquidation, or by any receiver, or other officer succeeding to the legal rights of said bank.' It 1. It is claimed by appellant that defendant was not a stockholder. appears by the record that, about the time the bank was organized, the defendant negotiated with one Solon H. Wilhelm, who became cashier of the bank for the purchase of stock. It appeared by the stock ledger that under date of January 3, 1887, there was issued to defendant a certificate of stock, the stock ledger stating that the stock was transferred from subscription of S H. W. It further appears that a certificate was in fact issued to the defendant, and that he received dividends for several years. It is urged that the only way in which defendant, not being an original subscriber to the capital stock, could become a stockholder, was by securing a transfer of some of the stock subscribed for by others, and that no formal transfer appears upon the bank books, and hence that he never legally became a stockholder, The answer to this is that the evidence of the transfer was sufficient to satisfy the corporators. The stock was in fact issued, and the books of the company showed it sufficiently. Bank v. Warren 52, Mich. 557, 18 N. W. 356. The corporation was bound by the issue of stock. It could waive the formality of any assignment, by S. H. W., and, having done so, could not thereafter deny defendant's rights on the ground that he had failed to produce evidence of an assignment from an original subscriber to the capital stock. Mor. Priv. Corp. § 844. 2. It is next contended that, if the defendant ever legally assumed the relation of stockholder, he was induced to enter into the contract by fraud. The state bank was the successor in business of a national bank having the same officers, and it is claimed, in effect, that the evidence tends to show that the officers unloaded worthless securities belonging to the national bank upon the new organization, and received stock for the same; that, out of the nominal capital stock of $50,000, only a little more than $10,000 was paid in in cash; that it was represented to the defendant, at the time he became a stockholder, that the bank was a paying institution, and would earn semiannual dividends of 4 per cent, and that, as a matter of fact, the acceptance of the worthless securities had at this time left the bank with an impaired capital; and that the representations made to defendant were known to be untrue. It is conceded by appellant's council that there are authorities which maintain that it is not open to a stockholder, when the rights of creditors have intervened, to assert the claim that he was induced by fraud to become a stockholder; but it is insisted that the true rule is that asserted by Lord Cairns in Smith's Case, 2 Ch. App. 604, "that it is one of the risks which creditors are liable to that it may turn out that some person whose name appears as a shareholder on the list has a right to have his name taken from the list." In the case cited, however, the action was taken before any steps had been taken to wind up the affairs of the corporation under the winding-up act. In Stone v. Bank, 3 C. P. Div. 283, it was held that where the corporation has gone into liquidation, and is proceeding, under the winding-up act, to make calls to satisfy claims of creditors, it is too late for one who has, up to that time, allowed his name to appear as a stockholder, to avoid liability on the ground that his subscription was obtained by fraud. The question was |