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§ 2. Liability of stockholders. Dues from corporations shall be secured by the individual liability of the stockholders to the amount of stock owned by each stockholder, and such other means as shall be provided by law; but such individual liability shall not apply to railroad corporations nor corporations for religious or charitable purposes.

History: Adopted by convention, July 29, 1859; ratified by electors, October 4, 1859; L. 1861, p. 63; L. 1905, ch. 542, § 1; November 6, 1906.

Law Review and Bar Journal References:

"Religion in a Federal System: Diversity Versus Uniformity," Mechthild Fritz, 38 K.L.R. 39, 53 (1989).

CASE ANNOTATIONS

1. Execution against corporation returned unsatisfied, creditors may proceed against stockholders. Buist v. Savings Bank, 4 Kan. App. 700, 703, 46 P. 718.

2. Section cited in considering right against assignee for unpaid subscription. Beale, Assignee, v. Dillon, 5 Kan. App. 27, 29, 47 P. 317.

3. Time when stockholder becomes liable for debts of corporation discussed. Merrill v. Meade, 6 Kan. App. 620, 49 P. 787.

4. Primary liability of stockholder after dissolution considered. Sterne v. Atherton, 7 Kan. App. 20, 51 P. 791.

5. Bank, with its property, and each stockholder, liable for debts. Savings Bank v. Wulfekuhler, 19 Kan. 60, 65.

6. Liability of stockholder is in the nature of a guaranty. Howell v. Manglesdorf, 33 Kan. 194, 196, 5 P. 759.

7. Corporation not servant or agent of corporation holding its stock. A.T. & S.F. Rld. Co. v. Davis, 34 Kan. 209, 210, 8 P. 530.

8. Valid judgment against corporation conclusive in enforcing stockholder's individual liability. Ball v. Reese, 58 Kan. 614, 615, 50 P. 875.

9. This section not self-executing, but requires legislative action. Woodworth v. Bowles, 61 Kan. 569, 60 P. 331.

10. Liability of stockholder contractual, but in nature of security. Elevator Co. v. Whitbeck, 63 Kan. 102, 103, 64 P. 984.

11. Contribution among stockholders where part guarantee and pay corporation notes. Hinshaw v. Austin, 64 Kan. 460, 462, 67 P. 882.

12. Laws of 1908, ch. 10, only remedy for enforcing liability. Henley v. Stevenson, 67 Kan. 4, 72 P. 518.

13. Double liability and remedies of judgment debtor discussed. Henley v. Myers, 76 Kan. 723, 726, 741, 93 P. 168, 93 P. 173. Affirmed: Henley v. Myers, 215 U.S. 373, 30 S. Ct. 148, 54 L.Ed. 240.

14. Stockholder's liability increased, diminished, or withdrawn at will of Legislature. Rowland v. Creamery Co., 79 Kan. 134, 137, 99 P. 212.

15. Where no statute, stockholder's liability ended when stock paid up. Bicknell v. Altman, 81 Kan. 436, 105 P. 694.

16. Creditor entitled to remedies existing under law when action accrued. Douglass v. Loftus, Adm'x, 85 Kan. 720, 731, 119 P. 74.

17. Transfer on books of bank necessary to relieve stockholder's liability. Bank v. Strachan, 89 Kan. 577, 580, 132 P. 200.

18. Statute imposing "double liability" upon stockholders repealed by constitutional amendment. Bank v. Laughlin, 110 Kan. 559, 207 P. 433. Overruled, see case annotation 19.

19. Statute imposing "double liability" upon stockholders not repealed by amendment. Bank v. Laughlin, 111 Kan. 520, 527, 207 P. 433.

20. This section self-executing; common-law remedy enforced only after execution. Harrison v. Remington Paper Co., 140 F. 385. Certiorari denied: 199 U.S. 607, 26 S. Ct. 747, 50 L.Ed. 331.

21. Applicability of section where charter disclaims liability, discussed. Illinois Life Ins. Co. v. Tully, 174 F. 355, 360.

22. Constitution and statutes in force, part of contract with corporation. Schwartz v. Loftus, 216 F. 320, 322.

23. Liability imposed upon stockholders in corporation under this section. Whitman v. Oxford National Bank, 176 U.S. 559, 20 S. Ct. 477, 44 L.Ed. 587. Affirming: 83 F. 288.

24. Applies only to indebtedness incurred in legitimate business of corporation. Ward v. Joslin, 186 U.S. 142, 22 S. Ct. 807, 46 L.Ed. 1093. Affirming: 105 F. 224.

25. State may change procedure for enforcement of stockholder's liability. Henley v. Myers, 215 U.S. 373, 30 S. Ct. 148, 54 L.Ed. 240.

26. Act relating to stockholder's double liability was not repealed by constitutional amendment of 1906. State Bank v. Shellabarger, 114 Kan. 261, 217 P. 332; Citizens Bank v. Needham, 120 Kan. 523, 530, 244 P. 7.

27. Section cited in considering defense to note where nature of corporate liability misrepresented. Farmers State Bank v. Rueschoff, 121 Kan. 784, 787, 250 P. 335.

28. Cited in refusing to give retroactive force to K.S.A. 17-2015. International Mortgage Trust Co. v. Henry, 139 Kan. 154, 156, 162, 30 P.2d 311.

29. Cited; discussion of when a provision is considered as self-executing. State, ex rel., v. Board of Education, 212 Kan. 482, 496, 511 P.2d 705.