Stillman v. Dougherty

Miller, J., delivered the opinion of the Court. Eor the purpose of this appeal this case must he treated as a suit brought hy the receiver of a dissolved corporation (which had been formed under the General Corporation Law of 1868, ch. 471,) for the sole purpose of recovering from a delinquent stockholder an unpaid balance due on his subscription for stock. It appears the corporation fn question was formed and the certificate duly recorded on the 12th of July, 1869, with a capital stock of $100,000, divided into one hundred shares of the par value of $1000 each. On the 24th of April, 1871, the corporation filed its hill under the 186th the reasons therein stated, and on the 20th of July follow- and following sections of the law, praying a dissolution, for ing, a decree was passed dissolving the same and appointing the appellee receiver of its estate and effects, “with power and authority to take charge and possession of the goods, wares and merchandise, hooks, papers and effects of the said company, and to collect the outstanding debts due tliereto.” Up to this time hut $80,000 of the capital stock had been subscribed, and on this only $68,200 had been paid in. There was a balance of $800 due hy the appellant on his subscription for ten shares. We have examined the several sections of this law relating to the dissolution of corporations, and are of opinion that under them the i’eceiver is entitled to maintain this action. He is vested witlx all tlxe estate and assets of every kind belonging to the corporation, and is made a trustee thereof for the benefit of the creditors and stockholders, and by section 192, it is not only provided that no dissolution shall relieve stockholders from the individual liability imposed by a previous section, hut it is also declared that “ if the said corporation shall he dissolved before its capital stock shall have been paid in, the liability of its stock [384] holders shall continue to the receiver or to the creditors of the corporation who" were such prior to its dissolution, in all respects as if the same had not been dissolved,” and hy section 195, power to bring suits is expressly conferred on the receiver. At the trial several rulings were made on other points which the appeal does not bring up for review. The only rulings we can now revise are the granting of the plaintiff’s first prayer, and the rejection of the defendant’s first prayer, and these we shall dispose of in their order. 1st. By granting the plaintiff’s first prayer the Court instructed the jury, that the fact that the whole amount of the capital stock was not subscribed, is no bar to the action, provided they shall find that the defendant knew that fact, and participated in the affairs of the company in a way which could only properly be done upon the assumption that the subscribers intended to proceed with the stock partially subscribed. This instruction embodies substantially the law announced in Hager vs. Cleveland, et al., 36 Md., 476. It was there decided that as a general rule no valid assessments or calls can be made on subscribers until the whole capital stock is taken up, and the subscriptions to that extent may be considered as conditional, hut it is a condition the subscribers may waive, and this waiver we said “may he either express or implied from the acts and declarations of the subscribers ; if knowing the whole capital stock has not been taken, they attend the meetings of the company, cooperate in the votes for the expenditure of money — for the purchase of property — for the making of contracts, and other acts which could only be properly done upon the assumption that the subscribers intended to proceed with the stock partially taken up, they would be estopped from setting up such a defence.” In that case the suit was by a creditor to enforce the individual liability of the stockholder, but we see no reason why the same doctrine should not be applied here where the suit [385] is by the receiver who represents not only the stockholders but the creditors of the dissolved corporation. It is said however, there is no evidence in this record that there was any such participation on the part of the appellant in the proceedings of this company as would bring him within the operation of this rule. But no exception appears in the record to have been taken to this instruction on that ground, and we cannot consider it. The fourth rule and regulation respecting appeals (29 Md., 2,) adopted by the Judges of this Court under the provisions of the Constitution, which gives to such rules 1he force of law, was passed to meet just such a case. We therefore find no error in this instruction. (Decided 8th March, 1876.) 2nd. The defendant’s first prayer asked the Court to instruct the jury that the plaintiff is not entitled to recover the balance alleged to be due on his stock-subscription, because there is no evidence of any valid call or assessment upon stockholders under the provisions of the statutes. This does not raise the question which the appellant’s counsel has argued, that there was no evidence that the appellant had due notice of such calls or assessments, but simply that there was no evidence that such calls or assessments had been in fact made or validly made. The record however abundantly shows, that resolutions and orders of the Board of Directors making such calls or assessments were duly passed. For this reason there was no error in rejecting this prayer. As to the question, whether personal service or publication was necessary in order to affect the appellant, who was a member of the Board of Directors which passed these resolutions and orders, with notice thereof, we express no opinion. Judgment affirmed.