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by this count, had he proceeded as assignee, his 'proper remedy is by bill in equity, making all the delinquent share-owners parties to the bill. Cook on Stock & Corp. Law, section 208; Lionberger v. Bank, 10 Mo. App., 506; Sawyer v. Hoag, 17 Wall, 610; Upton v. Tribilcock, 91 U. S., 45. Nor, so far as can be seen, is the right of the plaintiff here affected by the proposition that as assignee he is invested with the legal title, and right to sue at law, for the unpaid subscriptions. For they, as a part of the capital stock of this insolvent corporation, whether in his hands, or held by the stockholders, constitute a trust fund for its creditors, who in equity have a lien upon it for the payment of their claims. Gilmor's Ex. v. Bank, 8 Ohio St., 70; Henry v. R. R. Co., 17 Ohio St., 187; Gooin v. C. & W. C. Co., 18 Ohio St., 169; County v. Allen, 103 U. S., 498; Bartlett v. Dun, 57 N. Y., 587; Ry. Co. v. Ham, 114 U. S., 594; Hastings v. Dean, 76 N. Y., 9; Lionberger v. E. S. Bank, 10 Mo. App., 506.

On the facts alleged, the rights of the plaintiff and other creditors of the Salt Company in equity, to this unpaid stock, as 2 trust for their benefit, had attached before suit was begun. Beyond this also, lay the statutory liability, in case what could be obtained on subscriptions proved insufficient. Suing as assignee, he was entitled to recover only the unpaid stock. But as creditor, in one action he may subject both funds, if the debts require it. He was not compelled so to proceed, and thus take upon himself the costs and expenses of a suit, if it failed upon the merits. But having done so, to the obvious benefit of everyone interested in a cheap and speedy settlement of all questions as to the rights of creditors, growing out of the insolvency of this company, it does not seem to be for those who appear on the record to be withholding its only assets, to object. So far, then, as respects the capacity of the plaintiff, or the character in which he sues, the action must be regarded as well brought. The facts showing his trust are also properly stated, as they enable the court to deal with the stock fund, should any be recovered, as the equities of the case, in view of the assignment, may require.

The costruction of the record already announced, disposes of any questions upon the statute of limitations, as they arose only on the theory that facts set out in the second count would be considered in aid of a demurrer to the first. Aside from that, the general demurrers to the first alleged cause of action are put on three grounds, viz.: no demanć of payment is alleged; judgment on plaintiff's claim, with execution returned nulla bona, is not shown; and what is set out, is insufficient to charge alleged stockholders, as such.

On the facts of this count, no demand for unpaid stock subscriptions was necessary. For the purposes of an action like this, they will either be treated as due, or court of equity will itself make the calls and enforce their payment. Sanger v. Upton, 9: U. S., 56: Henry v. R. R. Co., snbra, 191; Hatch v. Dana, 101 U. S., 205; Harmon v. Page, 62 Cal., 448; G P. Ry. Co. v. Fitter, 60 Pa. St., 124; Glenn v. Semple, 80 Ala., 159; Lane's Appeal, 105 Pa St., 49-51 Am. R., 166.

Generally, under the law of this state, the creditors of private business corporations have three sources to which, contingently, they may look for the payment of their claims. The first is, all property of the corporation, subject to the levy of an execution. This constitutes its legal assets, from the fact that it can be reached through an action at law. The next resource of creditors, held to be secondary to that just stated, is the capital stock of the corporation, paid and unpaid. Beyond

this, and as a third fund, generally to be resorted to only after exhausting the legal assets and stock, is the statutory liability of stockholders. Both the stock and statute liabilities are regarded as equitable assets, as neither can be reached by creditors in an action at law, but only by a court of equity. Patterson v. Synde, 106 U. S., 519; Umsted v. Buskirk, 17 Ohio St., 113; Pfohl v. Simpson, 74 N. Y., 137.

Now it is perfectly settled that so long as a corporation has legal assets, the creditor is regarded as having a complete remedy at law, and there is no jurisdiction in equity to apply equitable assets in satisfaction of his debt. But it is equally well established, that if the corporation be insolvent, and its legal assets are exhausted, the creditor is entitled to, and on a proper showing of those facts, wil! receive the aid of equity, in subjecting equitable assets to the payment of his claim. elementary, yet it appears necessary in getting at the exact point in contention here, so far as principles go which is, whether the facts of this count show that the plaintiff has no remedy at law, and is therefore entitled to the equitable relief he seeks. As that is their obvious effect,

if they can be considered, the controversy is narrowed to the proposition, made in argument, that a judgment and execution returned nulla bona, constitute the only sufficient evidence that a party is without legal remedy, in a case of this kind.

By express provision of statute, that has been the law in New York, as to corporations like this, since 1848, and the same is true of some other states. Bank v. Bliss, 89 N. Y., 338; Cook on Stock & Corp. Law, section 200. The general rule in equity also, undoubtedly, is, to require that form of evidence of want of legai remedy. But in Ohio practice it was long since modified to the extent of holding "that the issuing of an execution, and its return, was not necessary, if the fact of no property is averred in the petition." Bomberger v. Turner, 13 Ohio St., 270. Going still further, in a case where the point came into discussion, the Supreme Court of the United States, say:

"It is, no doubt, generally true that a creditor's bill to subject his debtor's interest in property to the payment of the debt, must show that all remedy at law had been exhausted. And generally, it must be averred that judgment has been recovered for the debt; that execution has been issued, and that it has been returned nulla bona. The reason is, that until such a showing has been made, it does not appear, in most cases, that resort to a court of equity is necessary, or in other words, that the creditor is remediless at law. * * * But, after all, the judgment and fruitless execution are only evidence that his legal remedies have been exhausted, or that he is without remedy at law. They are not the only possible means of proof. The necessity of resort to a court of equity may be made otherwise to appear. Accordingly the rule, though general, is not without many exceptions. Neither law nor equity requires a

meaningless form. Bona, sed impossibilia non cogit lex. It has been decided that where it appears by the bill that the debtor is insolvent, and that the issuing of an execution would be of no practical utility, the issue of an execution is not a necessary prerequisite to equitable interference. This is certainly true where the creditor has a lien or trust in his favor. So it has been held that a creditor, without having first obtained a judgment at law, may come into a court of equity to set aside fraudulent conveyances of his debtor. ***The foundation upon which these and many other similar cases rest, is, that judgments and fruitless executions are not necessary to show that the creditor has no legal remedy." Case

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v. Beauregard, 101 U. S., 690. And it has been expressly held that "where a corporation is without any assets or proierty whatever, and notoriously insolvent, it is not necessary in such a case to obtain a judg ment against the corporation, and return of execution nulla bona, before the liability of a stockholder can be enforced in equity. It is a maxim of the law that the law will not attempt to do an act which is vain, or to enforce an act which would be fruitless. Judginent and execution returned nulla bona are only evidence of, and constitute one kind of proof, of insolvency. Although the proof may be declared to be sufficient by statute, it does not exclude other methods." Hodges v. S. H. Min. Co., 9 Or., 200; Turner v. Adams, 46 Mo., 95; Paine v. Stewart, 33 Conn., 516; Assoc. v. Kellog, 52 Mo., 583; Postlewait v. Howes, 3 Iowa, 366, 383.

Obviously, if judgment and execution are not indispensible as proof, they cannot be in averment. And such is the effect of the cases, or their tacts. Hoydes v. Min. Co., supra; Aultmans' Appeal, 98 Pa. St., 505; Crawford v. Rohser, 59 Md., 599; Paine v. Stewart, supra.

How then stands this case? If the truth of what is set out in the first count be assumed, all legal remedy had been exhausted long before. suit was brought, not by judgment and execution, it is true, but in a pro. ceeding provided for by law, and under the authority of a court of record. On what principle or ground of policy can it be said that, as evidence of want of remedy at law, this should not be equally efficacious with a sheriff's return of no property? How could a case be made, in which the expense of getting judgment, and issuing execution thereon would be more "vain," or the proceeding less a "meaningless form?" There is another aspect, however, in which this contention may be viewed, which tends to the same result. It has been over fifty years settled in Ohio, "that in equity *** the stock of a trading corporation is a pledge for the payment of its debts;" and that if not paid by subscribers, "equity may compel it to be done in a proper case, where good faith requires it. Gilmor's Ex'r v. Bank, supra. This is only a pithy statement of the doctrines respecting an equitable trust and lien, as to capital stock, already referred to above. Some courts of authority go so far as to hold that this is a subsisting and continung trust, not within the operation of statutes of limitation. Payne v. Bullard, 23 Miss., 88, 55 Am. Dec., 74; Hightower v. Thornton, 8 Ga., 486, 52 Am. Dec., 412; McGinnis v. Barnes, 23 Mo. App., 413. All the authorities agree that creditors are entitled to its execution, and to the aid of equity, at the suit of any of them, for himself and the rest, by applying the trust fund to the satisfaction of their claims, whenever the legal assets of the corporation are exhausted. But this is an implied trust (2 Story's Eq. Jur., section 1252) and therefore on principles well settled, all the facts upon which it arises and becomes enforcible may be proved by parol. 2 Perry on Trusts, section 137; 2 Whart. on Ev., section 903. And on this ground it has been declared that "creditor's bills in the names of individual creditors, whether by judgment or otherwise," may be brought to subject unpaid stock, when that is shown to be necessary for the payment of their claims. Lane's Appeal, 105 Pa. St., 49, 51 Am. R., 169; 1 Lawson's R. & R., section 495; Bell's Appeal, 115 Pa. St., 88, 2 Am. St., 532; Graham v. R. R. Co., 102 U. S., 161. The whole ground is in principle covered, however, by our Own court, in Barrick v. Gifford, 47 O. S., 180, and the claim of some of the defendants that judgment or execution is

necessary to the attaching of equitable jurisdiction, in a case of the character here shown, entirely overthrown.

But it is further objected, that facts to show the liability of the several alleged stockholders, as such, are not set out.

The explicit averment is, by name and the amount of stock held by each, that the defendants are stockholders in specified sums; that the shares which they severally hold have never been fully paid up; and that on the stock alleged to be held by each, a definite sum is due and unpaid. Upon principles well settled, that would be good against an original holder. Stoutenburg v. Lybrand, 13 Ohio St., 228. Now the law is, that the transferee of stock "impliedly assumes all the obligations which rested upon the former holder as a member of the company, and is liable for calls to the same extent as the former holder before the transfer was made." 1 Morawetz on Corp., section 159; Pullman v. Upton, 96 U. S., 328; Angel & Ames on Corp., section 534; Webster v. Upton, 91 U. S., 65; Bell's Appeal, supra, 2 Am. St. R, 532. The last case cited holds, "that the obligation to make good the unpaid portions of capital stock, when the necessities of creditors require it, is a charge upon the stock, which passes with it to the holders of it. It is an equita

ble obligation founded upon no statute, and rests upon those who are the owners of the stock at the time of the insolvency."` 2 Am. St. R., 536. it clearly follows, therefore, that the aliegation of present ownership, with stock unpaid, in a suit like this, is sufficient to charge the holderto call upon him to account, or show why he should not.

This disposes of all that needs discussion, on the demurrers to the first count; and the conclusion is that they are not well taken, and therefore must be overruled.

Coming now to the second count, one point made is that it fails to show that all who possibly may be liable as shareholders, on some of this company's debts, have been made parties. But it clearly appears that all who were stockholders, when the corporation became insolvent, and at the time suit was brought-those owning its total capital stock-are made parties, or valid reasons given for not bringing them in. The plaintiff also prays a reference to a master to have it ascertained who besides those made parties, or alleged to be shareholders, may be liable as such, and demands that they be made defendants when found; that is, in effect for a discovery on this point. Therefore, agreeing that the objection would be good to prevent a final decree against those actually in, until a master has reported on this question, it seems not well made as a bar to the relief sought in anticipation of that. Enough is certainly averred to entitle the plaintiff to a reference on the several matters respecting which it is prayed; and if so, the demurrers, general, or for a defect of parties, defendant, will not lie. Miers v. Turnpike Co., II Ohio, 273.

The general demurrer to this count, however, raise questions more vital than those which relate merely to pleading and practice. The right of the creditors of this corporation to enforce the statutory liability here in controversy, against its stockholders, depends upon the validity as between them and the creditors, of the increase of capital stock, set out as made in 1856, under the act of May 1, 1854. There is but one section of this statute, which is as follows:

"That any company heretofore, or that may hereafter be incorporated and organized under the laws of this state, and in accordance there. with, for building and manufacturing purposes including gas companies,

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are hereby severally authorized, upon a vote to that effect of a majority of the stockholders, to increase from time to time, their capital stock to an amount not exceeding the actual outlays and expenditures of such company, in the legitimate business thereof; a record of such vote, and the amount of such increase of stock shall be made, filed, and kept in the same manner and place as the original stock of such company, is by law required to be recorded, filed or kept: provided, every such increase of capital stock shall be made up by the actual payment of the amount thereof, in money, into the funds of such company; and no such increase of capital stock shall be allowed or recognized in law, unless the same. shall have actually been paid up in money, as aforesaid, in good faith; and in no event shall such company use its credit for the purpose of raising funds for the payment of such increase of capital stock; and all bonds or other obligations, made or issued for such purpose, shall be void and of no effect. The stockholders of any company heretofore organized or incorporated, which may increase its capital stock agreeably to the provisions of this act, shall be held individually liable for all debts due and owing by said company, except the stockholders of gas companies, who shall be individually liable in a further amount, over and above the amount of stock by them severally subscribed, equa! in amount to such stock." I S. & C., 369.

Two defects are asserted, as to the statement of facts relating to the alleged increase of capital stock, under this act. One is, the failure to state that it did not exceed the outlays and expenses of the company in its legitimate business; the other, that it is not averred to have been made up by the actual payment thereof, in money, into the corporate funds. The contention is, that in the absence of either, and especially of both of these allegations, the transaction for an increase, as set out, is to be held absolutely void; in which view, no liability can arise upon it.

On the authorities, and having regard to the facts disclosed in this count, whether the question as to the validity of this increase can be raised, except by the state, is very doubtful. Pullman v. Upton, 96 U. S., 328; Clark v. Thomas, 34 Ohio St, 62. Cook on Stock & Corp. Law, section 228.

So far as respect an excessive issue, that the action taken was not void, but only voidable, at the instance of the state, seems quite clear. The case differs from those in which the exact amount to which an increase may go is specified by the statute authorizing it, and the issue exceeds the limit. Even then it would be void only as to the excess, and so a defense to none except those holding the illegal stock. But here it was by the law left to the judgment of the stockholders, looking to what they deemed the needs of the corporate business, to say what the increase should be. Hence their action, if not fraudulent, is conclusive of its legality. On the other point the case is perhaps more difficult. The provision is that no increase "shall be allowed or recognized in law.' unless it has been paid up in money. But taking the whole act together, this does not appear to show an intention that stock in fact issued upon such increase, shall be absolutely void because unpaid. When that was to be the effect of the statute, upon action thereunder, it is expressed; as in a few lines following the clause in question, in regard to bonds of the company issued to raise money to make up the increase. It is explicitly declared that they "shall be void and of no effect." That is clear and emphatic. If there was the same intention as to an unpaid increase of stock, why was it not in like terms expressed? The policy of the statute