Franklin Fire Ins. Co. of Baltimore v. Hart
| Decision Date | 16 June 1869 |
| Parties | THE FRANKLIN FIRE INSURANCE COMPANY OF BALTIMORE CITY v. ROBERT M. HART. |
| Court | Maryland Court of Appeals |
Appeal from Baltimore City Court.
The appeal in this case was taken from a judgment for $700 rendered by Baltimore City Court, on the 9th of November 1868, against the appellant at the suit of the appellee. The suit was brought on the 2nd of April, 1868, by the appellee to recover compensation, at the rate of $100 per month, for services which he alleged he had rendered as secretary to the appellant, from the 15th of April, 1867, to the 31st of January, 1868.
The cause was argued before STEWART, MILLER, ALVEY and ROBINSON JJ.
John Carson, for the appellant:
By a proper construction of the Act of incorporation, 1867, ch. 392, the subscription to the stock and payment per share, as required by the Act, were conditions precedent to be performed, and until fully complied with, the said persons were only persons or quasi commissioners, and not corporators. Tagart v. West. Md. R. R. Co., 24 Md. 563; Maltby v. North West. R. R. Co., 16 Md. 444; Plank Road Co. v. Hoffman, 9 Md. 560, 569.
The Act did not create a corporation eo instanti; acceptance was first to be had, and the conditions precedent were to be performed. The Act only constituted such persons a body corporate as should thereafter become stockholders in the manner presented by the Act. The creation of a corporate existence can never take effect until the association be formed, and the organization be completed. Vitality was given to the corporation by the voluntary association and organization of its members. Had they remained passive the law could have had no effect. Falconer v. Campbell, 2 McLean, 203; Walker v. Devereux, 4 Paige, 245; Fire Department v. Kip, 10 Wend. 266; Crocker v. Crane, 21 Wend. 212, 218, 219; Angell & Ames on Corp., secs. 82-86, and authorities previously referred to.
Wm. Shepard Bryan, for the appellee:
The appellant's own book, produced at the trial by its own counsel, showed that it was organized, and that the appellee had been elected secretary, and his salary fixed at one hundred dollars a month.
The appellant became a corporation as soon as the corporators accepted the charter granted by the Legislature (Act of 1867, ch. 392). It was then competent to make the contract with the appellee, which it made when it employed him as secretary. It would be a gross fraud, after accepting his services, to defeat his demand for compensation on the grounds stated in the appellant's prayer.
Notwithstanding the language of the first section of the Act of 1867, ch. 392, incorporating the appellant, we are satisfied, from a careful examination of all the provisions of that Act, it was not the intent of the Legislature to create the named persons a body corporate immediately upon their doing any act evidencing their acceptance of the charter. On the contrary, the manifest design was not simply that the company should not commence its business, but that the corporation should not come into existence until three thousand shares of the capital stock had been subscribed and paid, or secured to be paid.
It is a law chartering a Fire Insurance Company. The first section enacts that ten named persons, " and the subscribers to the stock of the company, and their successors, shall be and they are hereby declared to be a body politic and corporate, by the name," etc. The second fixes the capital stock at $300,000, divided into 30,000 shares of $10 each. The fourth provides "that as soon as three thousand shares are subscribed and paid, or secured to be paid, this company shall be competent to transact all kinds of business for which it is established." The fifth enacts "that after the subscription of three thousand shares, as provided for in the foregoing fourth section, the said" ten named persons "are hereby created directors of the said" company "until the first Monday in May, 1867 and until their successors shall be elected as hereinafter provided, and such of them as shall be present at the first meeting shall proceed to organize the company, by electing a president and secretary thereof." And by the fifteenth section it is enacted "that as soon as practicable after the passage of this Act, the persons named in the first section thereof shall open books for subscription to the capital stock of the company, at some public place or places, in the City of Baltimore, of which public notice shall...
To continue reading
Request your trial
-
Reinhard v. Virginia Lead Min. Co.
... ... Appeal ... from Franklin" Circuit Court. -- Hon. Rudolph Hirzel, Judge ... \xC2" ... Bank, 56 Iowa 104; ... Gent v. Ins. Co., 107 Ill. 652; Garnett v ... Richardson, 35 Ark ... Railroad v. Sage, 65 Ill. 328; Ins. Co. v ... Hart, 31 Md. 59; Match Factory v. Hapgood, 141 ... Mass. 145 ... ...
-
Burke v. Mead
...Railroad Co. v. Johnson, 30 N.H. 390, 407; Railroad Co. v. Barker, 32 N.H. 363; Manufacturing Co. v. Parker, 14 N.H. 543; Insurance Co. v. Hart, 31 Md. 59; Hughes v. Manufacturing Co., 34 Md. Railroad Co. v. Cushing, 45 Me. 524; Railroad Co. v. Clarke, 61 Me. 384; Railroad Co. v. Preston, 3......
-
Bankers' Trust & Audit Co. v. Farmers' & Merchants' Bank
...organized according to their charters and have their chosen and impartial directors to conduct their business." Compare Franklin Fire Ins. Co. v. Hart, 31 Md. 59; Safety, etc., Ins. Co. v. Smith, 65 Ill. Anderson v. Timberlake, 114 Ala. 377, 22 So. 431, 62 Am.St.Rep. 105; Van Hummell v. Int......
-
New Central Coal Co. v. George's Creek Coal & Iron Co.
...The principle of this case in 24 Howard is unquestionably correct, and, as such, has been recognized by this court, in Franklin Ins. Co. v. Hart, 31 Md. 59. In case, however, it is alleged and contended, that before the charter was accepted by the corporators therein named, and before any r......