Opinion of the Court. 234 U.S. In 1902, the Evans, Munzer, Pickering Company, was incorporated under the laws of Minnesota for the purpose of transacting a mercantile business. In 1904, its name was changed to the Evans, Johnson, Sloane Company. Its capital stock consisted of 1,500 shares of common and 1,000 shares of preferred stock of the par value of $100 each. The plaintiff in error, Arthur L. Selig, became the owner of 50 shares of preferred stock in 1902 and held the same until September 5, 1904, when they were transferred on the books of the Company to Max Mayer. On September 25, 1905, a petition in bankruptcy was filed against the Company in the United States District Court for the District of Minnesota; adjudication followed on October 13, 1905, and trustees in bankruptcy were appointed. On May 28, 1906, a creditor of the Company, on behalf of itself and all other creditors, brought a sequestration suit in the District Court of Ramsey County, Minnesota, for the purpose of enforcing the liability of the stockholders of the Company. In that suit, on June 25, 1906, Charles E. Hamilton (the defendant in error here) was appointed receiver. Further order was made on June 28, 1906, requiring creditors to exhibit their claims, and become parties to the suit, within six months from the date of the first publication of the order. On July 6, 1906, in the same suit, the receiver filed a petition for an assessment upon the stockholders. The court set a date for hearing and directed notice to be given by publication and mailing. Thereupon, on September 4, 1906, the court entered its order assessing the sum of $100 against each share of the capital stock and against those liable as stockholders on account of such shares; the latter were directed to pay to the receiver the amount of the assessment within thirty days, and the receiver was authorized in default of payment to institute an action against any one liable as a stockholder, in any court having jurisdiction, whether in the State of Minnesota or elsewhere. On April 23, 1907, the court entered a decree-in the sequestration suit-allowing the claims against the Company as set forth in an annexed schedule, which showed the nature of each claim, its amount and when it arose. A further decree allowing an additional claim was entered on February 13, 1908. It appeared from these decrees, and the schedules to which they referred, that of the claims thus allowed, upwards of $11,000 wholly arose prior to September, 1904, and in addition over $20,000 in part arose prior to that date. Pursuant to the order of September 4, 1906, the present action was brought in December, 1909, to recover from Selig the amount assessed on 50 shares. The complaint set forth the proceedings in the sequestration suit, the statutes under which they were instituted and the order of assessment. It was also alleged that Selig, on or about September 5, 1904, had transferred his stock, when the Company was in an unsound financial condition, for the purpose of concealing his ownership, but that he remained the owner of the entire beneficial interest in the shares in question and that the transfer was fraudulent as against the creditors; and also that, under the law of Minnesota, a stockholder in a corporation could not avoid his liability for prior debts by a bona fide sale of his shares to a solvent person and a recorded transfer. In his answer, Selig admitted the transfer of the shares at the time mentioned, alleged that it was duly made and entered on the corporate books, and denied the other allegations pertinent to his liability. Upon the trial the record of the proceedings in the sequestration suit, including the order of assessment and the decrees allowing the claims of creditors, were received in evidence. The entry in the stock-book showing the record of the issuance of 50 shares to Selig and its transfer, together with the original certificate as canceled, was introduced. Aside from what was contended to be the effect of the proceedings in the sequestration suit, there VOL. CCXXXIV-42 Opinion of the Court. 234 U. S. was no evidence impeaching the transfer. This being the state of the proof, the plaintiff rested and the defendant moved to dismiss the complaint upon the grounds, that the plaintiff had failed to prove facts sufficient to constitute a cause of action, that the suit should have been brougnt in equity and not at law, and that the cause of action had accrued more than three years prior to the commencement of the action and hence was barred by the statute of limitations of the State of New York. Each party also moved for a direction of a verdict. The District Judge directed a verdict in favor of the receiver for the sum of $5,000 with interest, and in the view that, in sustaining and enforcing the order of assessment, a question arose involving the application of the Federal Constitution, this writ of error has been sued out. The legislation of Minnesota with respect to the liability of stockholders, as construed by the state court, was reviewed and its constitutional validity was upheld in Bernheimer v. Converse, 206 U. S. 516. The conclusions there reached were reaffirmed in Converse v. Hamilton, 224 U. S. 243. Briefly re-stating them, it may be said: The constitution of Minnesota (Art. 10, § 3) provides: "Each stockholder in any corporation, excepting those organized for the purpose of carrying on any kind of manufacturing or mechanical business, shall be liable to the amount of stock held or owned by him." The provision is selfexecuting. The liability of the stockholder, measured by the par value of his stock, 'is not to the corporation but to the creditors collectively, is not penal but contractual, is not joint but several, and the mode and means of its enforcement are subject to legislative regulation.' (See Willis v. Mabon, 48 Minnesota, 140; McKusick v. mour, 48 Minnesota, 158; Minneapolis Baseball Co. v. City Bank, 66 Minnesota, 441; Hanson v. Davison, 73 Minnesota, 454; Straw & Ellsworth Co. v. Kilbourne Co., 80 Minnesota, 125; London & Northwest Co. v. St. Paul Co., Sey 84 Minnesota, 144; Way v. Barney, 116 Minnesota, 285.) Under the statute of 1894 (chapter 76), this liability was enforceable exclusively by means of a single suit in equity, in a court of the State, which was brought for the benefit of all the creditors against all the stockholders or as many as could be served with process within the State. Hale v. Allinson, 188 U. S. 56; Finney v. Guy, 189 U. S. 335. To make the remedy more effective, the act of 1899 (chapter 272) was passed, and under the provisions of this statute as continued in substance (Way v. Barney, supra, p. 294) in the Revised Laws of 1905, §§ 3184-3190, the proceedings here in question were had. Provision was made upon hearing at the time appointed and after notice by publication or otherwise as directed by the courtfor receiving evidence as to the probable indebtedness of the corporation, the expenses of the receivership, the amount of available assets, the parties liable as stockholders and the nature and extent of such liability; and, thereupon, the court was authorized to levy a ratable assessment "upon all parties liable as stockholders, or upon or on account of any stock or shares of said corporation, for such amount, proportion or percentage of the liability" as the court in its discretion might "deem proper (taking into account the probable solvency or insolvency of stockholders and the probable expenses of collecting the assessment)."-The order and the assessment thereby levied, was made "conclusive upon and against all parties liable upon or on account of any stock or shares of said corporation, whether appearing or represented at said hearing or having notice thereof or not, as to all matters relating to the amount of and the propriety of and necessity for the said assessment." After the expiration of the time fixed for payment of the amount assessed, the receiver was authorized to bring actions against every person failing to pay wherever he might be found, whether in Minnesota or elsewhere. (See chapter 272, Laws of 1899, Opinion of the Court. 234 U.S. §§ 3-6; Revised Laws, 1905, §§ 3184-3187.) The constitutional validity of these provisions was sustained upon the ground that the statute is a reasonable regulation for enforcing the liability assumed by those who become stockholders in corporations organized under the laws of Minnesota; that while the order levying the assessment is made conclusive as to all matters relating to the amount and propriety thereof, and the necessity therefor, one against whom it is sought to be enforced is not precluded from showing that he is not a stockholder, or is not the holder of as many shares as is alleged, or has a claim against the corporation which in law or in equity he is entitled to set off against the assessment, or has any other defense personal to himself; and that while the order is conclusive against the stockholder as to the matters stated, although he may not have been a party to the suit in which it was made or notified that an assessment was contemplated, this is not a tenable objection as the order is not in the nature of a personal judgment against him and he must be deemed, by virtue of his relation to the corporation and the obligation assumed with respect to its debts, to be represented by it in the proceeding. Straw & Ellsworth Co. v. Kilbourne Co., supra, pp. 133, 136; Bernheimer v. Converse, supra, pp. 528, 532; Converse v. Hamilton, supra, p. 256. Further, it must be assumed that a stockholder cannot, even by a bona fide transfer of his stock, escape liability for the debts of the corporation theretofore incurred. The Minnesota statute provides that a transfer of shares "shall not in any way exempt the person making such transfer from any liabilities of said corporation which were created prior to such transfer." Gen. Stat., 1894, § 2599; Rev. Laws, 1905, § 2864. And in Gunnison v. U. S. Investment Company, 70 Minnesota, 292, 295, the court said that "by virtue of the statute a stockholder cannot relieve himself from the liability for the prior |