the amount of its capital stock, the amount of bonds given, the subscription of Heath and Speer, the sale of the property, and incidentally it is said there were seventy thousand dollars of unpaid bonds. But all these facts are introduced only to affect the question of the set-off of Heath and Speer. There is no ascertainment of any actual specific debts, no designation of creditors, no adjudication upon the claims of the intervening creditors, no determination that the whole unpaid capital is needed for the payment of debts, nor how much of the capital remained unpaid, nor by whom it was owing. Yet all these things are indispensable to the making of a correct and valid decree.

This is a proceeding to enforce the equitable obligation of stockholders in an insolvent corporation to pay the unpaid portions of the capital stock due by them, in order that the debts, all the debts, of the corporation may be paid to the ex-. tent of such unpaid capital. It is not a statutory obligation at all, but an obligation in equity arising out of the consideration that the capital stock of a corporation is a trust fund for the payment of its debts. Only so much of the unpaid capital as is necessary for the payment of the debts can be called in, and this can only be done when all the other assets are exhausted. It is manifest, therefore, that in a case of this kind there must be an account taken of the amount of debts, assets, and unpaid capital, and a decree for an assessment of the amount due by each stockholder. All of this is pointed out in the opinion of this court in the case of Lane's Appeal, 105 Pa. St. 49, 51 Am. Rep. 166, and had the method of proceeding there indicated been followed in this case, there would have been no difficulty in reaching correct results. As it is, the present record is defective in nearly all material particulars, and the decree must be reversed; but as the proceeding and parties are proper, only with directions to the court below to refer the matter back to the former or another master to perfect the report, and take such additional testimony as may be necessary for that purpose. The case of Messersmith v. Sharon Savings Bank, 96 Pa. St. 440, cited and relied upon in the master's report, must not be understood as a decision that the transferee of stock in a corporation which has become insolvent is not liable for the payment of the unpaid portion of the shares held by him when the unpaid capital is required for the payment of the debts of the corporation. That case did not involve that question. It was an ordinary common-law action of debt directly upon the

subscription contract, and the original subscriber was held bound to pay, because he had contracted to pay, the whole subscription price of the stock. The court below held that a transferee in good faith and upon an agreement to pay subsequent calls was not bound to pay them, and a single remark in the opinion of this court seems to countenance that idea. It is true that such is the law as declared in several decisions of this court, but they were decisions arising upon charters, or by-laws, providing for only a particular remedy in case of non-payment of installments, such as the forfeiture and sale of the stock itself in case of default, as was the case in Franks Oil Co. v. McCleary, 63 Pa. St. 317, and Palmer v. Ridge Mining Co., 34 Id. 288; or that the company has no right of action against the transferee, and no remedy against him except a forfeiture of the shares, as was the case in President etc. of Delaware etc. Canal Co. v. Sansom, 1 Binn. 70, and Palmer v. Ridge Mining Co., supra.

There is also another class of cases in which the same rule as to liability of original stockholders is held, notwithstanding they have transferred their shares. They are cases of subscriptions to the stock of railroad companies, subject to the general railroad law of February 19, 1849, the seventh section of which provides that no transfer shall have the effect of discharging any liabilities incurred by the owners thereof. Some of these cases are the following: Pittsburgh etc. R. R. Co. v. Clarke, 29 Pa. St. 146; Graff v. Pittsburgh etc. R. R. Co., 31 Id. 489; Hays v. Pittsburgh etc. R. R. Co., 38 Id. 81; Cass v. Pittsburgh etc. R. R. Co., 80 Id. 31. Subject to such exceptional instances as these, it cannot be doubted 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 equitable obligation founded upon no statute, and rests upon those who are the owners of the stock at the time of insolvency. If this were not so, the creditors of a corporation, which had been in existence for many years, and whose original subscribers were dead and gone long before the insolvency of the company occurred, would be deprived of all resource to the unpaid capital stock at the very time when alone they needed it. The doctrine is thus stated in Angelland Ames on Corporations, sec. 534: “When an original subscriber to the stock of an incorporated company, who is bound to pay the installments on his subscription from time to time as they are called in by the company, transfers

his stock to another person, such other person is substituted not only to the rights but to the obligations of the original subscriber, and he is bound to pay up the installments called for after the transfer to him. The liability to pay up installments is shifted from the outgoing to the incoming shareholder"; citing numerous authorities. The same doctrine was held and enforced in Webster v. Upton, 91 U. S. 65. The very question of that case was the liability of a transferee of stock for calls made after his acceptance as a stockholder by the company, upon an implied promise that he would pay calls made during his ownership. Mr. Justice Strong, in delivering the opinion of the court, reviews the whole subject of the liability of both the original subscriber and the transferee. After showing the liability of the original subscriber by a promise which the law implies to pay calls which he has never expressly agreed to pay, he says: "But if the law implies a promise by the original holders or subscribers to pay the full par value when it may be called, it follows that an assignee of the stock, when he has come into privity with the company by having stock transferred to him on the company's books, is equally liable. The same reasons exist for implying a promise by him as exist for raising up a promise by his assignor. And such is the law as laid down by the text-writers generally, and by many decisions of the courts (citing several cases). There are a very few cases, it must be admitted, in which it has been held that the purchaser of stock, partially paid, is not liable for calls made after his purchase. Those to which we have been referred are President etc. of Delaware etc. Canal Co. v. Sansom, 1 Binu. 70, where the question seems hardly to have been considered, the claim upon the transferee having been abandoned; and Palmer v. Ridge Mining Co., 34 Pa. St. 288, which is rested upon Sansom's case, and upon the fact that by the charter the company was authorized to forfeit the stock for non-payment of calls. We are also referred to Seymour v. Sturgess, 26 N. Y. 134, the circumstances of which were very peculiar. In neither of these cases was it brought to the attention of the court that the stock was a trust fund for the protection of creditors in the first instance, a fund no part of which either the company or its stockholders was at liberty to withhold. They do not, we think, assert the doctrine which is generally accepted..... We think, therefore, the transferee of stock in an incorporated company is liable for calls made after he has been accepted by the company as a stockholder, and his

name has been registered on the stock books as a corporator; and being thus liable, there is an implied promise that he will pay calls made while he continues the owner."

It must also not be forgotten that, as to all corporations formed under the general law of 1874, the seventh section of that act expressly imposes upon transferees of stock all the liabilities and obligations of original subscribers. What is said upon this subject is cautionary only, and intended to guard against any erroneous impressions which might arise out of the generality of expression in the Messersmith case.

We notice that the master has charged interest upon the amount of unpaid capital found due by appellant from November 1, 1875. No such claim is made in the bill, and there is no testimony printed, and no distinct finding of any fact which necessarily determines the liability for interest. An indistinct reference is made in the report to a last call for installments on November 1, 1875, but no facts or testimony appear in relation to the subject. As a large part of the decree is made up of interest, the subject should receive a careful consideration.

The decree of the court below is reversed at the cost of the appellee, and the record is remitted, with instructions that the case be referred to a master to take such additional testimony and make such further report as may be necessary to perfect the proceedings.

SUBSCRIPTIONS TO CORPORATE STOCK.-See this question considered at length in Parker v. Thomas, 81 Am. Dec. 385, and note.

INDIVIDUAL LIABILITY OF STOCKHOLDERS FOR DEBTS OF CORPORATION: See Prince v. Lynch, 99 Am. Dec. 427, and note discussing the subject.

UNPAID SUBSCRIPTIONS TO CORPORATE STOCK CONSTITUTE FUND FOR CREDITORS: Germantown Passenger R'y v. Fitler, 100 Am. Dec. 546, and note; Lane's Appeal, 51 Am. Rep. 166.

TRANSFEREE OF STOCK FROM ORIGINAL SUBSCRIBER IS SUBSTITUTED TO HIS OBLIGATIONS as well as his rights: Merrimac Mining Co. v. Levy, 93 Am. Dec. 697.

JOHNSON'S APPEAL.

[115 PENNSYLVANIA STATE, 129.|

TENANT'S RIGHT OF RENEWAL IS PROPERTY OR ASSET INCIDENT TO EXISTING LEASE, although it may not be enforceable against the will of the landlord.

CHANCE OR OPPORTUNITY OF RENEWAL OF LEASE HELD BY PARTNERSHIP is in itself a distinct asset of the partnership in which all the partners have an interest, and consequently one partner cannot take a new lease in renewal of an existing one of the firm, in his own name, or for his own benefit, without being liable to account for it to the partnership. DISSOLUTION OF PARTNERSHIP DOES NOT CHANGE RELATIONS OF PARTNERS in respect to the renewal of a partnership lease.

BILL in equity by Robert G. Loughrey against William H. Johnson for an account and settlement of the affairs of the partnership, which had existed between the parties and had been dissolved. The question raised on this appeal was as to the defendant's right to have the plaintiff account for the value of the renewal of the lease of premises occupied by the firm. The master, to whom the case was referred, reported that the plaintiff and defendant were partners in the plumbing business, and had leased certain premises in the city of Philadelphia. About May 1, 1883, the partners disagreed, and determined to dissolve the partnership at the end of the term. The defendant then offered the plaintiff one thousand dollars for the good-will of the business, with the privilege of occupying the store and carrying on business there. About July 1, 1883, the plaintiff asked the defendant if he would take the one thousand dollars which he (the defendant) had offered to give, and a bidding then took place between them, concluding with an offer of seventeen hundred dollars from the plaintiff, and an offer of eighteen hundred dollars from the defendant, which the plaintiff declined to accept. The plaintiff claimed that the bidding was simply for the occupancy of the store up to September 30, 1883, when the lease expired; while the defendant claimed that the bidding was for the successorship and the right to take a renewal of the lease. The partnership ended July 12, 1883, but the lease did not expire until September 30, 1883. The parties had a conversation on the subject about July 15, 1883, but no result was reached; and about July 20th the defendant prepared a written agreement, binding both parties not to occupy the store for one year after the dissolution, but the plaintiff refused to sign the agreement. In the latter part of the same month, the plaintiff proposed