The facts, proceedings, and rulings of the Master and Circuit Judge are very *Page 175 clearly stated in the opinion of Mr. Justice Stabler; with his conclusions of law I am not in accord for the reasons which follow.
I think that the matrix of error is disclosed in the closing sentence of the opinion: "We are here passing only on the question of the minors' liability." The question before the Court, in my opinion, respectfully advanced, is not the liability of the minors but the liability of the trustees who held the legal title to the stock, in trust for the children. The immunity of the trustees as such from liability is based in the opinion upon the incapacity of the minors to enter into a binding contract, upon the theory that the statutory liability of a stockholder is contractual in its nature, and that a minor is incapable of contracting, except under certain circumstances. I think that the expression quoted from the case ofFischer v. Chisholm, 159 S.C. 395, 157 S.E., 139, went further than it was necessary to go in that case. The question at issue was whether the statutory liability was a penalty or not. The contention that it was a penalty was met by a declaration that it was statutory and an incident of the relation. The liability is purely statutory, and, while it is an incident of the contract entered into between the corporation and the stockholder, it is not at all dependent upon the assent or agreement of the stockholder; regardless of his volition, which is always an element in a contract, the liability attaches to the contract entered into, solely by virtue of the statutory provision (and by "statutory" I mean of course to include the constitutional provision).
The case of Early v. Richardson, 280 U.S. 496,50 S. Ct., 176, 74 L.Ed., 575, 69 A.L.R., 658, I do not consider at all controlling or even persuasive upon the issue. In that case Richardson purchased stock in a national bank, secured the certificates indorsed in blank by the seller in whose name they stood, and delivered them to the bank with instructions to register them and issue new certificates in the name of his minor children, which was done. In an action by the receiver *Page 176 of the bank against Richardson upon the statutory liability the Court held that, as the transferees were minors, they were without legal capacity to assume the obligation, ruling as quoted in the opinion of Mr. Justice Stabler. With that conclusion I have not the slightest quarrel; it is logical and just; but here there is no legal incapacity in the transferees, the children of Stackley, all of full age, capable of receiving the stock, actually so doing, and reaping all benefit that might accrue therefrom. Certainly the trustees could not be held liable personally; as certainly Stackley could not be held, as he had by an executed assignment transferred the stock to the trustees in perfect good faith and they held the legal title. If Stackley had directed the issue of the stock in the names of the children, the beneficiaries of the trust, a case parallel with the Early v. Richardson case would have been presented. In that case the Court annihilated the contention that Richardson was a trustee for the children in whose names the stock was issued. Can there be a doubt that the transferees in the present case were trustees for the beneficiaries?
It is a singular coincidence that in March, 1929, less than a year before the filing of the opinion in the Early v. Richardsoncase, February, 1930, the Circuit Court of Appeals decided the case of McNair v. Darragh, 31 F.2d 906, involving the precise question now at issue, and on October 14, 1929, only four months before the opinion in Early v.Richardson was filed, reported in the same volume, Gamblev. Darragh, 280 U.S. at page 563, 50 S.Ct., 19,74 L.Ed., 617, the Supreme Court of the United States denied a writ of certiorari in McNair v. Darragh case. The syllabus in that case is as follows: "One making a gift of national bank stock to himself as trustee for minor children, in good faith and without knowledge of bank's failing condition, held not subject to stockholder's liability for assessment, under 12 U.S.C.A., §§ 62, 64, since Section 66 provides that persons holding stock as trustees shall not be personally subject *Page 177 to any liability as stockholders, but that estate shall be liable."
It is true that, in the last-cited case, the immunity of the trustee personally and the liability of the trust estate were based upon the Act of Congress, but I do not think that would make any difference in the construction of our statute and Constitution, which fixes liability upon the stockholder, certainly upon one in whom there is no legal incapacity. Free the trust estate, free the former owner of the stock, free the trustees personally, and the cry of the depositors who are supposed to be protected by the statutory and constitutional provisions will be but a reverberation.
I do not agree with the following statement in the opinion of Mr. Justice Stabler: "The reasoning in that case is the more applicable to the one at bar, because in this State, as in the Federal jurisdiction, assent or voluntary assumption of the liability by a shareholder is necessary in order to bind him to such obligation."
The liability attaches by reason of the ownership of the stock and not the "assent or voluntary assumption of liability."
I think therefore that the decree of his Honor, Judge Dennis, is entirely right and should be affirmed.