54 Md. 65 | Md. | 1880
delivered the opinion of the Court.
This is an action of assumpsit brought by a corporation against a subscriber to its stock, to recover the amount subscribed. And the first question is, whether the action can be maintained, under the circumstances of the case.
The planitiff was incorporated under the general incorporation Act of 1868, ch. 471, embodied into the Code as Art. 26. By the 65th section of that Article, it is provided that the directors or managers of any corporation created under that law, may call in and demand from the stockholders, all sums of money by them subscribed, at such times, and in such payments and instalments as they, the directors or managers, may deem proper, under penalty of forfeiting the shares subscribed, and all previous payments made thereon, if payment shall not be made by tbe stockholder within ninety days after personal demand, or after notice requiring such payment, published in a newspaper printed nearest to the place where the principal office of the corporation is located. And the construction of this section has been, as settled by this
In this case, the defendant was one of the original incorporators and subscribers to the stock of the plaintiff company, subscribing for 108 shares, the nominal value being $10 per share. His brother Henry J. was also an original incorporator, and subscriber to the stock, the subscription of the latter being for 101 shares; the two subscriptions together making 215 shares. The two brothers were directors of the company from its organization until the ITth of March, 1811, and Henry J. Michael was the president. It appears that the defendant, his brother Henry J., John G. McCullough; and Peter Morgan and his wife, had subscribed for and owned a large majority of the stock, indeed, nearly all of it that had been originally disposed of. The three first named parties subscribed for more than a majority of all the stock authorized to he issued. The two Michaels, McCullough, Morgan and D. A. Randall, constituted the hoard of directors, and had the entire control of the affairs of the company. The stock subscribed for by all of them was entered on the hooks of the company as fully paid up at par ; and it was the understanding from the commencement that such subscriptions of stock should he so entered and treated. It appears that the plaintiff, upon its organization, purchased the property, consisting of machinery, patent-rights, &c. which had belonged to the Maryland Roofing Company, a corporation that had just been dissolved; and by some arrangement, the debts of the Maryland Roofing Company, for which the property was liable, were required to he paid, or assumed to he paid, by those engaged in the organization of the plaintiff company, before the property could' he transferred. It was in proof that the Maryland Roof
It does not appear that any creditors of the company have been in any way affected or prejudiced by the manner in which the stock has been treated and dealt with by the original incorporators of the. company. But it is contended that the entry of the stock upon the books of the corporation, and the agreement among the subscribers that it should appear and be regarded as paid up stock, when in fact it was not, was a fraud-upon the corporation, and those who might subsequently hold the stock of the company. And assuming such to be the case, there would seem to he great difficulty in the way of maintaining the present action, founded as it is upon the contract of subscription. In the first place, seeing that what has
Judgment affirmed.