80 Md. 278 | Md. | 1894
delivered the opinion of the Court.
■ The Upper Glymont Improvement and Excursion Co. was incorporated in 1883, under the general incorporation law, with a capital stock of $25,000, divided into 1,000’ shares, of the par value of $25 each. The object of its incorporation was to buy a tract of land on the Potomac River, at or near Glymont, in Charles .County, about twenty miles below Washington, and to erect thereon hotels, cottages and other buildings necessary and suitable for a summer resort; ' also for the purpose of cultivating flowers, growing vegetables and agricultural products.
Soon after its organization the company bought a tract of land called “Upper Glymont,” and then it bought another tract, “Lower Glymont,” the two tracts containing about one thousand acres. On the property thus purchased it has expended large sums of money in buildings and other-improvements, in order to make it an attractive summer resort. After the purchase of the Lower Glymont tract, it was deemed advisable to change the name of the company by leaving out the word “Upper,” thus making the name “The Glymont Improvement and Excursion Company;” and also to strike out the clause in the charter forbidding the Sale of intoxicating drinks on the property. And for this purpose an amended charter was prepared by Toler, the defendant, then one of the directors, and was acknowledged by him and six other corporators, as required by the Code, before the proper officer, and submitted by him to the stockholders at a special meeting, held 20th May, 1886. It does not appear that any definite action was had in re
There being only two charter members of the new company present, the meeting adjourned to meet at the branch office in Washington, on the 9th April. At this adjourned meeting, held in Washington, the directors formally organized by electing a president and other officers.
The defendant was the owner of 64 shares of stock of the “ Upper Glymont Company,” and he refuses to exchange this stock for the stock of the “ Glymont Company,” because the charter of 1888, he says, has never been accepted, and the latter company has no power, therefore, to issue certificates of stock; and, secondly, because it has no right to compel him, a dissenting stockholder, to exchange his stock for the stock of that company.
The acceptance of the charter is necessary, of course, to the corporate existence of every corporation, and for the reason that the corporators are not obliged to assume the responsibilities and discharge the duties imposed by the charter without their consent. It is well settled, however, that it is not necessary, even when the charter is granted by special act of the Legislature, to prove such acceptance by a formal vote of the corporators; on the contrary, it may be inferred from the exercise of corporate acts by them under the charter.
In this case, however, we are not dealing with a charter granted by a special act of the Legislature, but one created under the general incorporation law. And this law provides, in the first place, that any five or more persons who may
So, upon compliance with these provisions, the persons who have signed and acknowledged the articles of incorporation, thereby become a corporate body, by the name stated in the articles. It would be idle, under such circumstances, to require further proof that the corporators had accepted that which they had in express terms applied for, and to obtain which they had complied with all the requirements of the law.
But then, it is said, there must not only be an acceptance of the charter, but the company must be organized in the State where the charter was granted; and the argument is, that inasmuch as the plaintiff company was organized by the directors in Washington on the 9th April, 1888, there is no proof of their acceptance of the charter and organization of the company in this State. To this we cannot agree. There is abundant proof throughout this record of the acceptance and organization of the company in this
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But even conceding, for the purposes of this case, that the charter of x888 is to be considered as a new charter in every sense, and that it differs fundamentally from the original charter, the proof shows beyond question, it seems to us, that the defendant, by his own acts and conduct, must be held as having acquiesced in the acceptance of the new charter, and this, too, with full knowledge that it had been accepted by the stockholders at the April meeting in 1888, without a dissenting voice, and upon the express condition that the new company should assume the debts of the old company, and issue certificates of stock in lieu of the stock held by the shareholders in the old company — the consideration for which being the transfer of the property from the old to the new company. And although the defendant has refused to exchange his stock, the proof shows that such refusal was not because he had any objections to the charter itself, or its acceptance, for it is identical in terms and provisions with the amended charter which he himself had prepared and signed, but because he objected personally to some of the directors and officers, and also to the management of the company. To more than one witness he expressed his willingness to exchange his stock, provided he could succeed in electing a new board of directors, and when his last effort, in April, 1891, to change the management failed, he wrote to the plaintiff insisting that it should buy his stock at twenty dollars per share, and if it refused he threatened all this unprofitable and, as it seems to us, unnecessary litigation. All this, the proof, we think, fully sustains. The witnesses on the part of the plaintiff, its president, secretary, directors and others, all testify that
In addition to this oral testimony, the defendant, in a letter to Mr. Kefauver, dated Jan. 21st, 1889, says: “I have just attended a large gathering of the stockholders of the Glymont Company,” and “as a fellow stockholder,” wants to know whether Mr. Kefauver intends to press the collection of his mortgage of $8,000 on the property belonging to the Glymont Company, as was announced at “ our meeting." Mr. Kefauver was at that time a stockholder in the plaintiff company, and defendant addresses him as a “fellow stockholder',' and the meeting which he had just attended was a meeting of the stockholders of that company, and which he refers to as “ our meeting." And in a subsequent letter, of June 10th, 1891, after the April election, at which he had failed in turning out the old directors, addressed to the plaintiff, the defendant insists that the company shall buy his stock at twenty dollars per share, or take the consequences of an expensive litigation and the exposure of the management of the affairs of the company.
In answer to all this, the defendant, whilst admitting that he had attended the stockholders’ meetings and had taken part in the discussions, says that he did so at the request of the stockholders and for the purpose of protecting his own interests as a stockholder in the old company, and that he never assented to or acquiesced in the acceptance of the charter of 1888. But his claims as a dissenting stockholder are not to be adjudged and determined by his mental reservations, but by his own acts and conduct, and by these acts he must be considered and treated as having assented to the acceptance of the new charter by the stockholders, and with the knowledge that such acceptance was based upon the condition that the plaintiff should issue certificates of stock to the shareholders under the charter of 1888, in lieu of the stock held by them. And this refusal to exchange
Decree reversed and cause remanded in order that a decree may be passed as prayed.