680 ARTICLE 23.

An. Code, sec. 66. 1904, sec. 72. 1888, sec. 64. 1868, ch. 471, sec. 59. 1872, ch. 325.
1908, ch. 240, sec. 41. 1916, ch. 596, sec. 66.

77. Every stockholder of every corporation of this State shall be liable
for the benefit of the creditors of said corporation for the amount of his
subscription to the stock of said corporation, less the amount which he shall
already have paid thereon, until he shall have paid said subscription, ac-
cording to the terms thereof, in good faith; and in the event of the insolvency
of the corporation, such liability shall be considered as an asset of the cor-
poration and may be enforced by the receiver, trustee or other person wind-
ing up the affairs of the corporation, notwithstanding any release, agreement
or arrangement short of actual payment which may have been made be-
tween the corporation and said stockholder. Nothing in this section shall
be taken or construed as limiting or affecting the liability of stockholders
in banking, safe deposit, trust and loan corporations.

Trust fund.

Unpaid subscriptions to the stock of a corporation constitute a trust fund for
the benefit of general creditors of the corporation, which cannot be defeated or
impaired by any device short of actual payment in good faith. Crawford v. Rohrer,
59 Md. 604. And see Md. Trust Co. v. Mechanics' Bank, 102 Md. 625; Basshor v.
Dressel, 34 Md. 508.

If property, in payment for which stock is issued under sec. 41, is taken at a
grossly exaggerated valuation, it may not protect the holder against liability under
this section. Tompkins v. Sperry, etc., Co., 96 Md. 580; Basshor v. Dressell; 34
Md. 508.

Defenses.

When a stockholder is not liable under this section by reason of an implied con-
dition annexed to his subscription, that the entire amount of capital stock shall be
subscribed. When such implied condition exists, and how it may be waived.
Gettysburg Bank v. Brown, 95 Md. 383; Musgrave v. Morrison, 54 Md. 164; Morri-
son v. Dorsey, 48 Md. 472. And see Stillman v. Dougherty, 44 Md. 384; Garling v.
Baechtel, 41 Md. 306; Hager v. Cleveland, 36 Md. 476.

The fact that a corporation was not legally incorporated held to be no defense
to an action by a creditor against a stockholder under art. 26, sec. 52, of the Code
of 1860, when the legislature, by an act, had recognized the existence of the corpora-
tion. Basshor v. Dressel, 34 Md. 510.

Under act of 1852, ch. 338, a stockholder when sued by a creditor of the corpora-
tion could not recoup a debt due him by the corporation. Equities as between
creditors and stockholders. Contribution. Stockholders held not liable for debts
contracted by company subsequent to their parting with their stock. A pledgee of
stock is not liable as a stockholder. (As to pledgees, see sec. 76.) Matthews v.
Albert, 24 Md. 527. And see Burgess v. Seligman, 107 U. S. 30; Emmert v. Smith, 40
Md. 123; Fiery v. Emmert, 36 Md. 465.

Where a creditor agreed to rely only on the responsibility of the company and
the sufficiency of the mortgage given to secure the debt, he could not recover against
a stockholder, under art. 26, sec. 52, of the Code of 1860. Basshor v. Forbes, 36
Md. 166.

Generally.

This section while taking, from the creditor his right of action against the stock-
holder, makes no distinction between a " chancery " receiver and a " statutory "
receiver. The insolvency of the corporation may be established either by a decree
or by proof of the fact. Stockholders can only be called on under this section after
the tangible assets of the corporation have been exhausted. Hughes v. Hall, 117 Md.
552. And see Hughes v. Hall, 118 Md. 679; Hall v. Hughes, 119 Md. 489.

This section is now the statute law of Maryland relative to the liability of stock-
holders. Sec. 135 does not in any way interfere with the proceedings by receivers
under this section. Stockholders are liable to creditors only for debts and contracts
created while they are stockholders; when stock is disposed of in good faith, the
stockholder is not liable for debts thereafter created. Hall v. Hughes, 119 Md. 489.