Cleaveland v. Mullin

McSherry, C. J., delivered the opinion of the Court. This suit was instituted by the receiver of the Atlantic Trust and Deposit Company of Baltimore-against the appellant to re- ■ cover the amount of an alleged subscription by the latter to the capital stock of the company. The declaration contains the üsual money counts and a special count which sets forth the contract sued on. Eleven pleas were filed.

Upon some’ issues were joined and to others demurrers were interposed.' The demurrers were sustained and the case went to trial on. the issues of fact made by the other pleas. - During the progress of the trial eight exceptions. were reserved. Seven of them concern the admissibility of evidence and the eighth relates to the instructions granted and to the prayers for instructions which were rejected by the Court. There are several interesting questions presented on the record, but there is one raised by the ruling on the demurrer to the appellant’s ninth' plea and by the rejection of the appellant’s tenth prayer which we regard as decisive of the case-; and consequently to the consideration of that question this judgment will be limited. By the Act of Assembly of 1898, ch. 504,- approved April ninth, 1898, it was provided,-that eleven named individuals “and the subscribers to the stock of the corporation hereby ⁶⁰⁰ created and their successors and assigns, be and they are hereby created a body corporate by the name of the Atlantic Trust and Deposit Company of Baltimore, and by that name shall have perpetual succession, and shall be competent to sue and be sued in any Court of law or equity whatever, &c.” By the fourth section of the Act it was enacted : “That the capital stock of said company shall consist of ten thousand shares of the par value of fifty dollars each and when the amount of two hundred thousand dollars shall have been subscribed and fully paid in, the said corporation shall be entitled to all the powers, privileges and franchises conferred by this Act, &c.” On the 25th day of May, 1899, the appellant addressed the following letter to the president and board of directors of the Atlantic Trust and Deposit Company of Baltimore : “Gentlemen : I hereby apply for 2 5 shares of the capital stock of the Atlantic Trust and Deposit Company of Baltimore at one hundred dollars per share.

If any of said shares are allotted to me, I do hereby agree to make payment therefor as and when called upon so to do by said company.” On June 10th of the same year the following reply was mailed to the appellant: “You are hereby notified that you have been allotted 25 shares of the capital stock of the Atlantic Trust and Deposit Company of Baltimore, under the terms of your letter of subscription! A call of twenty-five per cent of the capital and surplus has beep made, payable at the office of the company in the Atlantic Trust Building, on or before the 20th day of June, 1899. * *” Six days afterwards, or on June. 16th, the appellant wrote a letter to the president of the company in these words : “When I subscribed for 25 shares of stock in your company I did it for investment, expecting to receive some money (which has failed to materialize) to pay for it when due, but find it will be impossible, so I ask you as a personal favor to cancel my subscription. While this step is necessary I regret very much to have to do it, &c., &c.” By the Code of Public GeneralLaws, Art. 81, sec. 88F, it is declared : “ Every corporation incorporated after the twenty-first ⁶⁰¹ day of March, 1894, under any general or special law of this State, except cemetery companies, companies created for purely benevolent and charitable purposes, railroad companies and building or homestead associations incorporated under Art. 23 of the Code of Public General Laws, title, ‘ Corporations ’ subtitle, ‘ Provisions for the formation of corporations,’ sec. 18 (class five), shall pay to the State Treasurer for the use of the State a bonus of one-eighth of one per centum upon the amount of capital stock which said company is authorized to have ***** said bonus upon the original capital stock shall be due and payable upon the incorporation of said company * * * * * and no company as aforesaid which shall be incorporated after the twenty-first day of March, 1894, shall have or exercise any corporate powers until said bonus has been paid to the State Treasurer.” By sec. 88G, it is provided that if any company shall fail or neglect for the space of two months to pay the bonus tax, the comptroller shall cause suit to be instituted therefor; and by sec. 881, it is declared that if after suit brought and judgment rendered for the amount of the bonus due, the company shall remain in default for the space of two years “such failure and neglect shall be deemed to amount to and shall constitute a forfeiture of the charter of •such corporation, and said charter shall be decreed to be so forfeited and annulled ipso facto.” Without pausing to inquire into the causes which led to that result, it is sufficient to say the Atlantic Trust and Deposit Company became insolvent, and upon a bill being filed in equity against it the appellee was, on January the twelfth, 1901, appointed receiver to take possession of its books and assets, and on March the twelfth, the receiver was directed by an order of Circuit Court No. 2, to institute suits for the collection of the unpaid subscriptions to the company’s capital stock. Under the last named order the pending suit was brought.

The appellant’s ninth plea avers : that the bonus tax required by law to be paid by the Atlantic Trust and Deposit Company was not paid until the twelfth day of April, nineteen ⁶⁰² hundred, and that no act was done and no proceedings taken by the Atlantic Trust and Deposit Company after the payment of said bonus tax, to accept the appellant’s alleged subscription or to allot the shares in the appellant’s said alleged contract mentioned, to the appellant. The demurrer to that plea" admitted those averments to be true ; and the demurrer was' sustained. The appellant’s tenth prayer reads : That'the plain-' tiff (the receiver), is not entitled to recover, because the Atlantic Trust and Deposit Company did not pay the bonus on capital stock required of it under the provisions of sec. 88, Art. 81, Code of Public General Laws, until the seventeenth day of April, 1900, and no act to accept the defendant’s subscription, or to allot him any shares of the capital stock of the Atlantic - Trust and Deposit Company was done by the said corporation after the payment'of the said tax. That prayer was rejected.

The precise question presented by the demurrer to the ninth' plea and-by the appellant’s rejected tenth prayer is this : Was •the Atlantic Trust and-Deposit Company, at-the time the ap-' pellant offered to subscribe to its capital- stock, capable in law-of making any valid contract because of the non-payment of the bonus tax ; and did it after the payment of that tax accept' the appellant’s proposal to subscribe ? ' Now, it is obvious at a glance — it is self-evident — that the '• appellant’s letter of May the twenty-fifth, 1899, hereinbefore transcribed, was a mere offer to subscribe to the capital' stock. It was not, and in the nature of things it could not be, a’ definite unqualified subscription to twenty-five shares of stock, for the subscription was, as offered to be made, wholly de- ’ pendent on an acceptance and allotment before it could become an actual subscription at all. ■ Without an acceptance and an allotment by the company there was, and there could have been, no binding contract to subscribe. An acceptance of the offer and an • allotment of the shares to be valid could only have been made by some one capable in law to accept and to allot. In a word, there must have been two parties competent to contract before there could be -a contract.

Was the Atlantic ’ Trust and Deposit Company capable in law of accepting the ’ ⁶⁰³ appellant’s offer and of alloting the shares on June the tenth, 1899 — the date when it is alleged the allotment was made ? The answer to that question must be sought in the provisions of the. statutes to which reference has already been made. Whatever may be the terms employed in the Act of 1898, ch. 504., under' which the Atlantic Trust Company was organized, they are to be read and interpreted as subordinate to and not as a repeal or a modification of the broad and comprehe’n-. sive provisions of secs. 88F et.seq. of Art. 81. of the Code. And this is so because the Legislature has declared that it should be so ; and'because even if there were a, doubt as to whether or not there existed a conflict between the company’s charter and the general law, that doubt would be resolved against the corporation according to the familiar principle that a surrender of the power of the Legislature in any matter of public concern can never be presumed from uncertain or equivocal expressions.

L. & N. R. R. Co. v. Com. of Ky., 161 U. S. 685 . “Every corporation,” says sec. 88F, “incorporated under any general or special law of this State,” except those enumerated, shall pay the bonus tax, “and no company which shall be incorporated * * * * shall have or exercise • any corporate powers until said bonus has been paid to the State Treasurer.” Consequently when without attempting to repeal, or modify this comprehensive provision, the General Assembly adopted the Act of 1898, ch. 504, wherein if spoke of the “corporation hereby created,” and wherein it declared that the per-’ sons named in the Act and their successors and assigns “are hereby created a body corporate',’ it must be understood that sec. 88Fand the others heretofore cited, are to be read into the Act of 1898 and that the terms of the latter must be qualified and narrowed by the words and the intent of the former. This must be so unless the settled policy of the State to prohibit' any corporation from having or exercising any corporate powers until the bonus tax is paid, was designed to be suspended or repealed as, to the Atlantic Trust Company by the phrases quoted from its charter. But the’ Act of 1898 dis ⁶⁰⁴ tinctly negatives the existence of such a design because in its eleventh section it is declared that the Atlantic Trust Company shall be subject at all times to all general laws applicable to associations óf a similar character. It is clear, then, that nothing contained in the charter of the trust company can be taken to limit or restrict the force and the application of the general provisions of Art. 81 of the Code.

To those provisions attention must now be directed. Looking alone to secs. 88F, G, H, and I, and the terms used therein, there ought not to be any reasonble doubt as to their meaning and effect. Sec. 88F imposes the tax, and prohibits the company liable to pay it, from having or exercising any corporate powers until the bonus has been paid to the State Treasurer. Sec. 88 G. makes it the duty of the Comptroller to sue for the tax after the company is in default for two months and sec. 881 declares that a failure to pay the tax for two years shall constitute a forfeiture of the charter.