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CREDITORS.

RIGHTS AND REMEDIES/IN GENERAL.
FRAUD ON.
PREFERRING—RULES AS TO.
ACTIONS BY.
ASSIGNMENTS AS AFFECTING.

(See also DISSOLUTION.)

Rights and remedies—in general.

Creditors are not required to first secure judgment before proceeding under Sec. 25.

Standard Distilling Co. v. Springfield Coal Co., 239 III. 600. Creditors are not limited by Section 25 to an action against stockholders for unpaid balances, but may proceed against anyone liable to the corporation, or for its debts.

Standard Distilling Co. v. Springfield Coal Co., 239 III. 600. An assignee of a judgment against a corporation acquires all the rights and remedies of the original creditors.

Moore v. U. S. Barrel Co., 238 111. 544 (551). A creditor who accepts stock at one-tenth its face value in payment for a claim he holds against the company, knowing the stock has not been paid for in full, will be held to other creditors for the face value.

Moore v. U. S. Barrel Co., 238 111. 544 (550). Section 25, Corporation Act, held constitutional and not a denial of jury trial.

Standard Distilling Co. v. Springfield Coal Co., 239 Ill. 600. Creditors may sue the corporation and garnishee stockholders for unpaid stock subscriptions at the same time.

Parmelee v. Price, 208 111., 555. Over-valuation of property taken in payment for stock is

sued fully paid, is voidable as to creditors, but is binding on the corporation.

Parmelee v. Price, 208 I11., 555. Creditors may sue stockholders for unpaid balance on stock, under Section 8, as soon as the debt is due.

Parmelee v. Price, 208 Ill., 555. Creditors may hold persons assuming to exercise corporate powers before stock is subscribed, and may also hold members of the corporation—when.

Gunderson v. Ill. T. & S. Bank, 199 Ill. 422 (432). Creditors may hold as stockholders those whose names appear on the books as such, though they may have transferred their stock, but the books do not so show.

Sherwood v. Ill. T. & S. Bank, Receiver, 195 Ill. 112. A stockholder who surrenders his stock and same is resold and paid in full, is not liable to creditors on such stock.

First Nat. Bank v. Peoria Watch Co., 191 Ill. 128. Capital stock and corporate property are a trust fund for creditors.

Singer v Hutchinson, 183 111. 607 (619). Creditors may sue all or part of stockholders to whom funds have been wrongfully paid in fraud of creditors.

Singer v. Hutchinson, 183 Ill. 606. Creditors have no claim on a lot bought by a director for himself with funds loaned him by the corporation—when.

Pain, Assignee, v. Farson, 179 III. 185. Creditors must sue in equity to recover from stockholders of Illinois corporations, but may sue stockholders of foreign corporations at law, if the foreign State allows action at law in such case.

Bell v. Farwell, 176 Ill. 489 (498). Creditors do not lessen their rights or lose their right of action by virtue of the fact that they know stock issued paid up is, in fact, not fully paid.

Sprague v. Nat. Bank of A., 172 III. 149 (168).

Action by creditors to collect unpaid balances on stock issued fully paid-property taken in exchange-not a bona fide transaction.

Sprague v. Nat. Bank of A., 172 Ill. 149 (167). Creditors, after notice of a reduction of capitalization, may hold only the remaining stockholders and capital.

Gade v. Forest Glen Brick Co., 165 I11. 367 (369). Relative rights of resident and non-resident creditors of an insolvent foreign corporation having property in Illinois. Receiver appointed in Illinois.

Holbrook v. Ford, 153 III. 633 (639). Where certain creditors sue to set aside a conveyance and enforce stockholder's liability and do not join all creditors, they can recover only enough to pay their own claims.

Bouton v. Dement, 123 III. 142. Creditors have priority over stockholders in a settlement of the corporate property and business.

St. L. & S. C. & M. Co. v. Sandoval C. & M. Co., 116 Ill. 170. A new company bought the property of an old corporation at a receiver's sale, on proceedings under Section 25, Corporation Act. The receiver's deed was declared void. Held the new company was subrogated as creditor to the extent the money it paid was used to pay debts of the old company.

St. L. & S. C. & M. Co. v. Sandoval C. & M. Co., 116 Ill. 170. Balances of donations to a corporation unused may be reached by creditors to pay debts-creditor's bill.

Hickling v. Wilson, 104 I11. 54. Corporate property that reverts to grantors on dissolution may be pursued by creditors coming in, lawfully, after such dissolution.

Life Ass'n of Amer. v. Fassett, 103 Ill. 315. Creditors seeking to reach parties indebted to the company may claim no greater right than the company would have if suing in its own name.

Cleveland Rolling Mill Co. v. Crawford, 2 111. C. C. R. 189.

Simple contract creditors must begin action under Section 25. Judgment creditors may attach stock where found.

Buda Foundry Co. v. Col. Cel. Co., 1 Ill. C. C. R. 398. Special laws as to corporations are enforcible only in the States where enacted. Creditor of an insolvent Kansas Bank cannot sue in Illinois and claim under a Kansas statute. (Three dissent.)

Tuttle v. Nat. Bank of Republic, 161 III. 497.

Fraud on.

When pledging stock, by a stockholder, is not a fraud on creditors.

Kingman & Co. v. Mowry, 182 I11. 257.

Preferring rules as to.

Insolvent corporation may prefer a bonafide creditor, who is not an officer of the company.

Rockford G. Co. v. Standard G. Co., 175 Ill. 89. Creditor of a corporation may be preferred though she is the aunt of three directors—discussion of preferences.

Blair v. Ill. Steel Co., 159 Ill. 350 (364). Preferences as between creditors may be given, legally, by directors of an insolvent corporation, although some creditors will lose-relationship of creditor to directors immaterial if good faith is shown.

III. Steel Co. v. O'Donnell, 156 I11. 624 (630). An insolvent corporation may prefer creditors subject to same rules as individuals—rules as to.

Gottlieb v. Miller, 154 III. 44. Corporations may prefer creditors even after insolvency, by giving judgment notes, mortgages, etc., but good faith must be exercised.

Butler Paper Co. v. Robbins, et al., 151 III, 588.

Preference is given the creditor first suing the corporation over less diligent creditors. How such preference may be defeated.

Thebus v. Smiley, 110 Ill. 316. Creditor may be preferred in the payment of debts if done in good faith, even though such creditor is a stockholder.

Reichwald v. Commercial Hotel Co., 106 Ill. 439. A creditor of a bank who first sues to collect stockholders' liability, has no preference over others who start an action later. Any fund secured is to be paid pro rata, to all.

City of Chicago v. Hall, 103 Ill. 342.

Actions by.

Creditors are not estopped from holding officers of a de facto corporation, by bringing action against the corporation first.

Loverin v. McLaughlin, 161 Ill. 417 (435). Creditors are not necessary parties in action by stockholders to set aside a fraudulent assessment on stock.

Farwell v. Great Western Tel. Co., 161 III. 522. Creditor's bill in Illinois against foreign corporation does not reach debts due such company from non-residents.

Holbrook v. Ford, 153 Ill. 633 (645). Creditors may sue insolvent corporation at law before equity secures jurisdiction, but not after.

Atwater v. Amer. Ex. Bank, 152 Ill. 605 (618). Any creditor of a corporation may sue any stockholder individually to collect a debt for which the Statute makes him liable.

Schalucky v. Field, 124 III. 617. Held, creditors must first secure judgment and have execution returned unpaid before proceeding against stockholders on unpaid stock—procedure to enforce liability. (But see Section 25 Corporation Act.)

Patterson v. Lynde, 112 III. 196.

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