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ization is effected; that the office of corporator disappears when that of stockholder is taken on. It is also true that there may be an abandonment of the venture without any liability resting upon the corporators, but upon the condition imposed by the common law that no obligation shall have been incurred in the name of that relation, viz. by "assuming to act in a corporate capacity." Fuller v. Rowe, 57 N. Y. 23, 26. Had these articles read that the signers agreed to form a partnership with $5,000 capital, instead of a corporation, there would have been no doubt of joint liability for contracts entered into by either in the co-partnership name and within its scope. The agreement here is to form a corporation, with capital stock of $5,000; it is made a public record, as the statute requires. So far as the public is concerned, this record is the only evidence of incorporation which comes to notice. The corporate capacity there promised was forthwith assumed, as the plaintiff in error well knew, and he can not be heard to evade liability upon the plea that they failed to put in the capital and perfect organization. McHose & Co. v. Wheeler, 45 Pa. St. 32, 40. On behalf of the plaintiff in error it is contended that he is not liable, because he did not participate in the business which was undertaken, and it is not found that he had actual knowledge of the use of his name as an officer. But it is found that "under the circumstances, if he did not know it, he could have ascertained the fact by merely slight attention to the matter, and was guilty of negligence in not knowing it." This imputes knowledge. If he remained ignorant of the use of his name in the face of such circumstances, where he had given its use for the inception of the enterprise, and where slight attention would have brought him knowledge, he is chargeable with notice. The culpable negligence bars the excuse of ignorance.

Upon this record all of the signers of the articles of incorporation have made themselves' parties to the assumption of corporate powers, and they are jointly bound for the indebtedness which was therein contracted. Their liability is of the same nature which would be imposed "if the original plan had been to form a partnership." Cook on Stock and Stockholders (3d ed.), § 235. The agreement which gave color to the assumed corporate action is the foundation. The reason for holding the liability is well stated in Fredendall v. Taylor, 26 Wis. 286, 290, as springing "from the fact that there was no responsible body or corporation behind them;" having no principal they bound themselves individually. Lewis v. Tilton, 64 Iowa 220, is to the same effect.

It is not essential that parties dealing with the assumed corporation should have acted with knowledge or upon the faith of Wechselberg's relation to it. The rule stated in Thompson v. First National Bank of Toledo, III U. S. 529, is not applicable. There it was sought to recover upon a co-partnership debt from one who was not a partner in fact, but had been held out as such, without credit being given on the faith or with knowledge of such holding out. Recovery was denied because there was no contract relation and no ground for estoppel. In the case at bar there is primary contract liability, and it is not

dependent upon the knowledge or understanding of those dealing with the purported corporation. Pullman v. Upton, 96 U. S. 328, citing Adderly v. Storm, 6 Hill 624; Pierce v. Bryant, 5 Allen (Mass.) 91.

In view of this determination of liability at common law we are of opinion that judgment was properly entered against the plaintiff in error, and it is unnecessary to consider the question of statutory liability, which is well presented in the briefs and oral arguments. The judgment will be affirmed.

Note. Compare, 1864, Ashtabula and New Lisbon R. Co. v. Smith, 15 Ohio St. 328; 1897, Badger Paper Co. v. Rose, 95 Wis. 145; 1898, Schofield G. & P. Co. v. Schofield, 71 Conn. 1.

Sec. 147. Same.

(d) As soon as its first meeting has been held and officers chosen, if not immediately upon signing the articles of association; but until the division into shares, the associated members hold the whole capital stock in common.

HAWES ET AL. v. ANGLO-SAXON PETROLEUM COMPANY ET AL.1 1869. IN THE SUPREME COURT OF MASSACHUSETTS.

Rep. 385-398.

IOI Mass.

[Bill in equity, filed February 2, 1867, to charge individual defendants as members or stockholders in a manufacturing corporation, under the statute of 1862, ch. 218, which declares, in section 2, that "the members or stockholders' in such a corporation shall be jointly and severally liable for such of its debts as may be contracted before the capital is fully paid in and certificate thereof duly recorded.

On March 16, 1865, the defendants signed certain articles bearing that date, certifying that the subscribers "hereby associate themselves together as a corporation under the provisions of the Gen. Stat., ch. 61, and the several acts in addition thereto, for the purpose of carrying on the business of mining oil, coal and other minerals; and agree, third, that "the amount of capital stock of said corporation is hereby fixed and limited at $500,000;" fourth, that "the said corporation shall be established and have its principal place of business in Boston, and may prosecute its business without and beyond the limits of the commonwealth, as the corporation elect." On April 1, 1865, the subscribers of these articles held their first meeting and chose officers. In the superior court in Suffolk, at October term, 1866, the plaintiffs recovered judgment against the Anglo-Saxon Petroleum Company, by the default of the corporation, after filing an affidavit of merits and an answer, for $4,231.71 damages and $24.07 costs, in an action begun March 17, 1866, on an account dated March 29, 1865, for the price of three steam-engines and boilers. On this judgment 1 Statement of facts abridged. Arguments and part of opinion omitted.

execution was issued November 16, 1866, and returned wholly unsatisfied January 15, 1867.

"The stock of said Anglo-Saxon Petroleum Company was never divided into shares, and never divided or apportioned among said subscribers. No capital was ever paid in, and no certificate of any payment of capital was ever recorded. No part of the amount due on said judgment has ever been paid, and no change has occurred among said subscribers to said articles."]

GRAY, J. All that is necessary to constitute a corporation aggregate is the grant of a franchise by the government, assented to by the grantees. In the case of the creation of a private corporation by special charter, indeed, an acceptance is ordinarily required in order to give it effect. Angell & Ames on Corporations, §§ 81, 82. But an act of the legislature, incorporating certain persons who have ap plied for a charter, and their associates, may constitute the persons named a corporation at once without further action on their part. either in the admission of associates, the choice of officers, or the division of the capital stock. Frost v..Frostburg Coal Co., 24 How. 278; Day v. Stetson, 8 Greenl. 365; Penobscot Boom Co. v. Lamson, 16 Maine 224; New York Fire Department v. Kip, 10 Wend. 266; Narragansett Bank v. Atlantic Silk Co., 3 Met. 282; Walworth v. Brackett, 98 Mass. 98; Gen. Stat. ch. 68, § 3.

By the Gen. Stat., ch. 61, § 1, "three or more persons who shall have associated themselves together by articles of agreement in writ ing, for the purpose of carrying on any mechanical, mining, quarrying or manufacturing business, except that of distilling or manufacturing intoxicating liquors, and shall have complied with the provisions of this chapter, shall be and remain a corporation under any name indicated in their articles of association, and which is not previously in use by any other corporation or company." The meaning and extent of the clause which requires that the associates "shall have complied with the provis ions of this chapter" may be better understood by referring to the statute of 1851, ch. 133, the first general law which authorized such corporations to be formed by voluntary association, and the intervening acts in addition thereto, of all which the sixty-first chapter of the General Statutes is substantially a re-enactment. By section 1 of Statute 1851, ch. 133, persons who should "associate themselves together according to the provisions of this act" under any name by them assumed, for either of the purposes specified, and who should "comply with all the provisions of this act" were declared to be a body politic and corporate. All the provisions of that act, which such a corporation was required by its terms to comply with at any time, were, that the articles of association should state the name of the corporation, fix and limit the amount of its capital stock, and state the purpose for which and the town or city in which the corporation should be established and located; that, before the corporation should commence business, its officers should make, publish and file a certificate of those and other facts; and that the name of the corporation should indicate its corporate character, and not be the name of any other cor

poration or company. Stat. 1851, ch. 133, §§ 1-6. And it was held that even an irregularity in the articles of association, such as the adoption of a name already belonging to another company, would not enable the corporation to defeat an action against it by a creditor. Dooley v. Cheshire Glass Co., 15 Gray 494. The direction contained in the Gen. Stat., ch. 61, § 3, as to the mode of calling the first meeting of such a corporation, was not in the original statute, but was first inserted in the statute of 1855, ch. 478, section 2, and is as consistent with holding the corporation to be already organized as with treating the first meeting as necessary to its organization. The first section of the General Statutes, ch. 61, is certainly not to be construed literally as requiring a compliance with all the provisions of the chapter as a condition precedent to the existence of a corporation; for many of them necessarily assume a corporation to have been already created, such, for instance, as making the officers of the corporation liable for its debts until they have signed and filed certain certificates. Sections 8-12, Merrick v. Reynolds Engine & Governor Co.1 The manifest intent of the first section, viewed in connection with the rest of the chapter, is, that a corporation shall exist at least as soon as the first meeting has been held and officers have been elected, if not immediately upon the signing of the fundamental articles of association, by which the intention of the associates to avail themselves of the privileges conferred by the legislature is manifested, the name of the corporation determined, the amount of capital stock fixed, and the place in which and the purpose for which the corporation is established are specified. Utley v. Union Tool Co., 11 Gray 139; Perkins v. Union Button-Hole & Embroidery Machine Co., 12 Allen 273; Newcomb v. Reed, 12 Allen 363.

When a corporation has been once created according to law, the incorporated associates who hold the corporate franchise are members of the corporation, and a subscriber for shares, although he has received no certificate of stock, or the stock has not even been divided into shares, is a member of the corporation, and a stockholder within the meaning of a statute making the stockholders of the corporation personally liable for its debts. Chester Glass Co. v. Dewey, 16 Mass. 94; Narragansett Bank v. Atlantic Silk Co., 3 Met. 288, 289; Spear v. Crawford, 14 Wend. 20.

The statute of 1862, ch. 218, entitled "An act to define and regulate the enforcement of the liabilities of officers and stockholders of manufacturing corporations," contains the following provisions, upon the construction and effect of which this case depends.

By section 2, "the members or stockholders in such corporation shall be jointly and severally liable for its debts or contracts in the following cases, and not otherwise: First, for such as may be contracted before the capital is fully paid in, and a certificate thereof duly recorded."

By section 3, no stockholder in such corporation shall be held liable for its debts or contracts, unless a judgment is recovered against the 1 101 Mass. 381.

corporation, demand for payment made upon the corporation and not complied with for thirty days, and the execution returned unsatisfied. By section 4, "after the execution shall be so returned, the judgment creditor, or any other creditor, may file a bill in equity in behalf of himself and all other creditors of the corporation, against it, and all persons who were stockholders therein at the time of the commencement of the suit in. which such judgment was recovered," for the recovery of the sums due from said corporation to himself and such other creditors, for which the stockholders may be personally liaable, by reason of any act or omission on the part of the corporation or its officers.

By section 5, "such sums as may be decreed to be paid by the stockholders in such suit in equity shall be assessed upon them in proportion to the amounts of stock by them respectively held at the time when the suit in which said judgment was recovered was begun; but no stockholder shall be liable to pay a larger sum than the amount of stock held by him at that time at its par value."

Among the purposes for which the defendants incorporated themselves were "refining oil, coal and other minerals,", and "preparing them for use." They were, therefore, strictly a manufacturing corporation, and equally within the statutes of 1862, ch. 218, as a similar corporation established by special charter would be. Peele v. Phillips, 8 Allen 86; Bond v. Morse, 9 Allen 471.

The bill was held to be sufficient when this cause was before us upon the demurrer. All questions of variance between the pleadings and evidence have been waived by submitting the case to our decision upon an agreed statement of facts. Russell v. Loring, 3 Allen 121; Folger v. Columbian Insurance Co., 99 Mass. 267.

It is admitted that no part of the capital stock of the corporation has ever been paid in, and no certificate thereof recorded; and that the plaintiffs have recovered a judgment in an action against the corporation, and had the execution issued thereon duly served upon the corporation, and returned unsatisfied. That action was brought on the 17th day of March, 1866, a year after the signing of the defendants' articles of association, and almost a year after the associates had held their first meeting and elected officers. Upon any construction of the statutes, the corporation had thus, long before the bringing of that action, been called into existence and made a legal person, capable of holding property and of suing and being sued, and had a board of officers competent to bind the corporation by a new agreement or by ratification of an old one, made before the corporation was capable of contracting. The corporation, thus fully organized and represented, filed an affidavit of merits, and afterwards submitted to a default and judgment thereon. That judgment, if not conclusive in this suit, is at least prima facie evidence that the debt sued on was a debt for which the corporation was liable. The mere fact that the account annexed to the declaration bears date three days before such election of officers is not suffi