Franklin Fire Insurance v. Hart

Miller, J., delivered the opinion of the Court. Notwithstanding the language of the first section of the Act of 1867, ch. 392, incorporating the appellant, we are satisfied, from a careful examination of all the provisions of that Act, it was not the intent of the Legislature to create the named persons a body corporate immediately upon their doing any act evidencing their acceptance of the charter. On the contrary, the manifest design was not simply that the company should not commence its business, but that the corporation should not come into existence until three thousand shares of the capital stock had been subscribed and paid, or secured to be paid. It is a law chartering a Eire Insurance Company.

The first section enacts that ten named persons, “ and the subscribers to the stock of the company, and their successors, shall be and they are hereby declared to be a body politic and corporate, by the name,” &c. The second fixes the capital stock at $300,000, divided into 30,000 "shares of $10 each. The fourth provides “ that as soon as three thousand shares are subscribed and paid, or secured to be paid, this company shall be competent to transact all kinds of business for which it is established.” The fifth enacts “ that after the subscription of three thousand shares, as provided for in the foregoing fourth section, the said ” ten named persons “ are hereby created directors of the said” company “ until the first Monday in May, 1867, and ⁶³ until their successors shall be elected as hereinafter provided, and such of them as shall be present at the first meeting shall proceed to organize the company, by electing a president and secretary thereof.” And by the fifteenth section it is enacted “ that as soon as practicable after the passage of this act, the persons named in the first section thereof shall open books for subscription to the capital stock of the company, at some public place or places, in the city of Baltimore, of which public notice shall be given, and shall keep the same open for ten days or longer in their discretion.” These provisions obviously point to and adopt most of the usual methods of creating such corporations. The parties named in the first section are authorized to act as commissioners to open books for subscriptions, and when three thousand shares are subscribed and paid, or secured to be paid, the same persons are created the first directors, with power then to meet and organize the company by electing proper officers.

The procurement of the requisite number of shares is made essential to the existence of the corporation. Before this no meeting could be held, no directors to represent the stockholders are or could be created or elected, and no officers chosen to represent the body corporate. But after such subscription is made directors are created with power to meet and organize the company, and then for the first time vitality is given to the artificial being, and its existence commences. True, the first section speaks of a present creation of a body corporate, but it is to be observed it is not simply the named persons and their successors in office, but these “ and the subscribers to the stock of the company and their successors,” that are declared to be incorporated.

There is in this statute no provision giving to the named persons full power and authority to exercise all the corporate poioers of the company until the first