Musgrave v. Morrison

Robinson, J., delivered the opinion of the Court. This suit is brought by the appellees, receivers of the Chesapeake Mutual Land and Building Association, to recover the appellant’s subscription to its capital stock. The company was chartered for the purpose of buying, selling and improving land, and also for the purposes of a Homestead Building Association. Its capital was fixed at eight hundred thousand dollars, divided into two hundred shares of the par value of four hundred dollars each.

In April, 1869, the company organized, and began the prosecution of the business for which it was chartered, and continued to prosecute the same until December, 1814, when the appellees were appointed by the Circuit Court of Baltimore City, receivers. In May, 1811, the name of the appellant was entered by the secretary of the company on the stock ledger for ten shares of stock, upon which he paid at the time an instalment of one dollar and fifty cents per share entrance fee, and sixty dollars bonus for the stock. At the same time, the secretary also issued a small book, containing an entry of the number of shares of stock held by the appellant, and entries of the weekly dues paid by him. The appellant continued a member of the company until the appointment of the appellees as receivers, and continued to pay his weekly dues, and to receive his proportion of the dividends earned by the company. ¹⁶⁴ It also appears that the appellant duly appointed by power of attorney Thomas A. Wilson, his attorney, to vote the shares of stock held by him, at meetings held for the election of directors and for other purposes.

It also appears that not more than one thousand of the two thousand shares of the capital stock of the company was taken, and this fact is mainly relied on by the appellant as a defence to the suit now brought to enforce the payment of his subscription. We have said, it is true, speaking in reference to companies chartered for manufacturing purposes, that where the capital stock, and number of shares and the sum to be paid for each share are fixed by the charter, an action would not lie to enforce the payment of a subscription, until the whole capital stock was taken; because in such a case it is fair to presume that the entire amount of the capital stock fixed by the charter, is necessary for the successful prosecution of the business of the company, and the subscription is, therefore, made upon this implied understanding. We do not mean to say, however, that this rule applies to corporations of every kind without regard to the objects and purposes for which they are chartered. On the contrary, it may be obvious from the face of the charter itself, that the whole capital stock is not in any manner necessary to the organization of the company, and that the subscriber knew or had reason to know this at the time of his subscription.

In this case, the company was chartered for the purpose of buying, selling and leasing property, and also as a Homestead and Building Association, and at the time of the entry of the appellant's subscription, it was engaged in the prosecution of its business, and he knew at the same time, that its whole capital stock had not been taken, and under these circumstances it might well be argued that his subscription was not made, upon the condition that the company was not ¹⁶⁵ to organize until the whole number of shares had been taken. But he' this as it may, we have also held that this condition is one which the subscriber may expressly or impliedly waive, or which he may he estopped by his own conduct from relying on as a defence. Morrison vs. Dorsey, 48 Md., 463 ; Hager vs. Cleaveland, 36 Md., 460 . Now in this case the appellant continued a member of the company from April, 1871, to December, 1874, and