MR. JUSTICE HARLAN, after stating the case, delivered the opinion of the court.
It is the settled doctrine of this court, as well as of the Supreme Court of Missouri, that unpaid subscriptions to the stock of a corporation constitute a trust fund for the benefit of its creditors, which may not be given away or disposed of by it, without consideration or fraudulently, to the prejudice of such creditors. New Albany v Burke, 11 Wall. 96, 106; Sawyer v. Hoag, 17 Wall. 610, 620; Upton, Assignee v. Tribilcock, 91 U.S. 45; Sanger v. Upton, Assignee, 91 U.S. 56; Webster v. Upton, Assignee, 91 U.S. 65; County of Morgan v. Allen, 103 U.S. 498, 509; Scovill v. Thayer, 105 U.S. 143, 154; Hawkins v. Glenn, 131 U.S. 319, 335; Richardson v. Green, 133 U.S. 30, 45; Peters v. Bain, 133 U.S. 670, 691; Clark v. Bever, ante, 96; Liebke v. Knapp, 79 Missouri, 22, 24. And this principle of general law is reinforced in Missouri — where the transaction in question occurred, and by whose laws the railroad corporations mentioned in the bill were created — by a statute giving a judgment creditor of a corporation, where corporate property cannot be found upon which to levy his execution, the right to an execution against a stockholder "to the extent of the amount of the unpaid balance of such stock by him or her owned." 1 Rev. Stats. Missouri, 1879, p. 121, c. 21, § 736; Ib. 1889, § 2517.
While it was competent for the St. Louis, Hannibal and Keokuk Railroad Company, exercising good faith, to use its bonds and stock in payment for the construction of its road, it could not rightfully, at least as against creditors or stockholders, issue its stock to Blair and Taylor as full paid without getting some fair or reasonable equivalent for it. What was such an equivalent depends primarily upon the actual value of the stock at the time it was contracted to be issued, and upon the compensation which, under all the circumstances, the contractors were equitably entitled to receive for the particular work undertaken or done by them. The principles which, by established law, govern the relations between a corporation and its creditors and stockholders, and the management of the corporate property, would be of little value, if the corporation, by its directors, could sell or dispose of its assets to the prejudice of creditors and stockholders under such circumstances, on such terms and at such prices as indicated, upon the face of the transaction, that they were being squandered recklessly or fraudulently in disregard of the trust committed to them. For such violations of trust the courts furnish ample remedy, independently of any statute prescribing a special mode for enforcing the liability of stockholders for the balance due upon stock held by them purporting to be, but which is not, full paid. Is the plaintiff entitled to relief under any proper application of these principles?
It is averred in the bill, and the demurrer admitted, for the purposes of the hearing below, that full and adequate compensation for the work done by Blair and Taylor was $12,000 per mile in the company's first mortgage bonds. Assuming this to be true, if the stock issued to Blair and Taylor was of any considerable value at the time they received it, or if the circumstances attending its delivery to them indicated bad faith upon their part or upon the part of the corporation, different questions would arise from those now presented. But the bill contains no allegation whatever as to the real or market value of the stock. The court cannot say, from any facts set forth in the bill as to the condition of the railroads in question that the stock when delivered to the contractors was worth par, or that it had any substantial value. If, when disposed of by the railroad company, it was without value, no wrong was done to creditors by the contract made with Blair and Taylor. If the plaintiff expected to recover in this suit upon the ground that the stock was of substantial value, it was incumbent upon him to distinctly allege facts that would enable the court — assuming such facts to be true — to say that the contract between the railroad company and the contractors was one which, in the interest of creditors, ought to be closely scrutinized. He seems to have carefully avoided making any allegation as to the real or probable value of the stock, and to have supposed that the court, in the absence of averment or proof to the contrary, would assume that it was worth par, or had substantial value. As he impugned the good faith of the transaction between the company and the contractors, it was incumbent upon him to state the essential, ultimate facts upon which his cause of action rested, and not content himself with charging, generally, that what was done was "colorable," a "fraud," "a breach of trust," and a "scheme" by which Blair and Taylor were to get the stock without paying for it. These are allegations of legal conclusions merely, which a demurrer does not admit. Dillon v. Barnard, 21 Wall. 430, 437; United States v. Ames, 99 U.S. 35, 45; Pullman Palace Car Co. v. Missouri Pacific Railway, 115 U.S. 587, 596; Ford v. Peering, 1 Ves. Jun. 72, 77. It is consistent with the allegations of the bill that the stock was absolutely without value when issued to Blair and up to the time when the railroad and all the property appurtenant thereto was sold under the decree of foreclosure. The demurrer was properly sustained.