Liability of Founders and Directors for Fictitious Paid-up Share Capital

Facts

The joint-stock company Asbestospray S.A. was incorporated in Geneva in 1958 by Guy Montmartin, Léon Hoffman and Henri-Paul Brechbuhl. The share capital of 50,000 francs, divided into 50 shares of 1,000 francs each, was fully subscribed by the founders but was not paid up with their own funds. Hoffman obtained a bank loan that was paid to the company and then repaid on his order. The company was declared bankrupt in 1969. The bankruptcy estate sued Hoffman for payment of 49,950 francs, invoking his civil liability as a founder and director who participated in the fictitious paid-up share capital.

Considerations

The Court considers that there was a fictitious paid-up share capital and that Hoffman's liability is in principle engaged as a founder under Art. 753 para. 2 CO. However, the action of the bankruptcy estate is barred by the principle of consent given by the founders to this fictitious paid-up capital.

Regarding the statute of limitations, the Federal Tribunal holds that the 10-year period provided for in Art. 760 para. 1 CO runs from 16 September 1958, the date of the repayment to Hoffman of the amount deposited with the consignment office. This action was therefore time-barred when the bankruptcy…