Hughes v. Antietam Mfg. Co.

• Citation: 34 Md. 316
• Parties: HOLKER HUGHES v. THE ANTIETAM MANUFACTURING COMPANY OF WASHINGTON COUNTY.
• Decision Date: 03 March 1871
• Court: Court of Appeals of Maryland

34 Md. 316

HOLKER HUGHES v. THE ANTIETAM MANUFACTURING COMPANY OF WASHINGTON COUNTY.

Court of Appeals of Maryland

March 3, 1871

APPEAL from the Circuit Court for Washington County.

The facts are sufficiently stated in the opinion of the Court. At the trial below, the plaintiff, the Antietam Manufacturing Company, offered, among others, the following prayer, which was granted:

If the jury find, that prior to the creation of the plaintiff as a body politic, or corporation, the defendant and others, with a view to the creation of the plaintiff as a corporation agreed to subscribe to its capital stock, and that the defendant did, in fact, subscribe in writing for fifty shares of the said capital stock, and that the value of each share so subscribed for, was fixed at $100, and that such contemplated corporation was intended for manufacturing purposes; and also find, that afterwards the plaintiff was incorporated and created a body politic, by five or more white male persons, making, signing and acknowledging before a justice of the peace of the State of Maryland, in and for Washington county, a certificate in writing, in which is stated the corporate name of the plaintiff, including the name of the county in which its business is carried on, the amount of its capital stock, the term of its existence not exceeding forty years, the number of shares of which the capital stock should consist, the number of managers or directors, and their names, to manage the concerns of the company for the first year, and the name of the county in which the operations of the company were to be carried on and that such certificate so signed and acknowledged was afterwards recorded, and that the plaintiff was duly organized under such certificate, and that the defendant himself signed and acknowledged said certificate with others and that after the organization of the plaintiff as a body politic, calls for the payment of subscriptions were made as follows, to wit: twenty-five per cent. thereof to be paid on July 15th, 1867, ten per cent. thereof to be paid September 1st, 1867, and fifteen per cent. thereof to be paid on December 1st, 1867, of which the defendant had notice, or of which notices directed to the defendant were left in his post office, and that the defendant hath refused to pay the same according to the amount or proportion of his subscription embraced in the said several calls, then the plaintiff is entitled to recover to the extent of the said calls.

The following were among the prayers of the defendant:

2. If the jury shall believe from the evidence, that at the time the defendant signed the subscription paper, the capital of the plaintiff was to be but $50,000, and that it was then so written in said paper, and the same was at any time afterwards changed by an interlineation, so as to make it read $150,000, and that the defendant did not know of said change, and never assented to the same, then the defendant cannot be required to pay the same, and is exonerated from his subscription, and the verdict is to be found for him.

3. If the jury shall believe from the evidence, that at the time the defendant signed said paper, it was represented to him by the person who obtained his signature, that the capital of the plaintiff was to be $50,000, and that at least six per cent. interest on said capital would be paid by rents from the Emmert property, to be bought by the plaintiff the first year, and for that sum, and that afterwards the trustees could build or do as they please with the property, and shall further find from the evidence, that said property was so bought, but not rented, but forthwith changed and improved at heavy expense and without the assent of the defendant, then the plaintiff is not entitled to recover said subscription, or any part thereof in this action.

8. If the jury shall believe from the evidence, that there were other subscribers to said paper before the same was acknowledged and recorded, or after it was so acknowledged or recorded, if they shall find it was acknowledged and recorded, and that some or any of them asked to be released, and were released from their subscriptions, and their names erased from the said paper, and without consulting the defendant, then the defendant was not bound by his subscription, and if then, or any time after, and before any expenditures were made by the plaintiff, if the jury shall find such were made, he notified or requested, in person or by another, his name to be erased and his subscription to be annulled, then the plaintiff cannot recover in this action, though the jury may believe from the evidence than no action was taken upon his notification or request.

The Court rejected all the prayers of the defendant, except the second, which they granted with a modification, as follows:

If the jury shall believe from the evidence, that at the time the defendant signed the subscription paper, the capital of the plaintiff was to be but $50,000, and it was then so written in said paper, and the same was at any time afterwards changed, after the same was acknowledged by the defendant, by an interlineation, so as to make it read $150,000, and that the defendant did not know of said change, and never assented to the same, then the defendant cannot be required to pay the same, and is exonerated from his subscription, and the verdict is to be found for him.

The defendant excepted to the ruling of the Court, and the verdict and judgment, being against him, he prosecuted this appeal.

The cause was argued before BARTOL, C.J., STEWART, BRENT, MILLER and ROBINSON, J.

Wm. T. Hamilton, Daniel Weisel and Wm. Schley, for the appellant.

Andrew K. Syester, George Schley and Albert Small, for the appellee.

ROBINSON J., delivered the opinion of the Court.

This is an action of assumpsit by the appellee, claiming to have been incorporated in pursuance of the 40th section of Article 26, of the Code of Public General Laws, to recover certain unpaid instalments, alleged to be due on the subscription of the appellant to its capital stock.

The following is a copy of the recorded certificate, to which the subscription is affixed: "The undersigned, free white citizens of the State of Maryland, desiring to form a company for the purpose of manufacturing, under the name and style of the Antietam Manufacturing Company of Washington County, have fixed the capital stock of said company at $150,000; said capital stock shall consist of five hundred shares, at $100 per share, the term of existence of said company or corporation not to exceed the term of forty years. The company shall be managed by a president and ten directors for the first year. In testimony whereof we have each subscribed for the number of shares set opposite our names." To which is affixed the subscription of the appellant, for fifty shares, five thousand dollars.

This recorded certificate was offered in evidence to prove the incorporation of the appellee, and its admissibility for that purpose is objected to on the ground that it does not comply with the requirements and conditions precedent, prescribed by section 40, Article 26 of the Code. It becomes necessary, therefore, to determine what are the requirements and conditions prescribed by the statute. Section 40 provides that: "Any five or more free white persons, who may desire to form a company for the purpose of carrying on any manufacturing business, may make, sign and acknowledge, before some officer competent to take the acknowledgment of deeds, and record the same in the office of the clerk of the Circuit Court for the county * * * a certificate in writing, in which shall be stated the corporate name of the company, the corporate name always to include the name of the county or city in which the business is carried on, the amount of the capital stock of said company; the term of its existence not to exceed forty years, the number of shares of which said stock shall consist, the number of trustees, directors or managers, &c., who are to manage the affairs of the company for the first year," &c. The certificate in this case is claimed to be defective in many essential particulars; and first, because it does not appear upon its face to have been acknowledged before the justice of the peace by all of the subscribers. This, however, is not required by the statute; on the contrary, it expressly provides, that "any five or more persons" * * * "who may make and acknowledge a certificate in writing," &c., * * * "shall be a "body politic and corporate." The acknowledgment, therefore, by all of the subscribers, is not a condition precedent, nor can the refusal of one or more deprive those who do join in the acknowledgment, from claiming the right of incorporation, provided they be five or more in number. Such a construction is neither sustained by the spirit nor letter of the Act. The certificate in this case does appear upon its face to have been acknowledged by five persons, and if the proof on this point be confined to the record copy solely, a question which we are not to be understood as deciding, we are of opinion the objection to it on this ground cannot be sustained.

Then again, it is said the amount of the capital stock and the number of shares are not stated with sufficient precision and accuracy. This objection, however, cannot apply to the capital stock, because it is fixed at $150,000, nor to the value of the shares, for it is fixed also at $100 per share but the fatal error insisted on is in stating the number of shares to be five hundred. This is a mistake, however, apparent on the face of the certificate itself, because, if the capital stock is fixed at one hundred and fifty thousand dollars, and the value of the shares at one hundred dollars each, it...