cient to rebut the evidence of liability afforded by the judgment itself.

The amount of capital stock of the corporation was fixed and limited in accordance with the General Statutes, ch. 61, section 6. The stock not having been divided into shares or certificates issued, the associated members of the corporation were the holders of the whole capital stock in common, and would seem, upon the facts agreed, to be liable in equal proportions for such sums as may be decreed to be paid by them in this suit. But as the question of the amount to be assessed upon each has not been argued by them, but only the question whether they are liable at all, any additional facts and considerations, bearing upon the question of the amounts and proportions in which they are to be charged, may be submitted to the master, and, on the coming in of his report, to the court.

Decree for the plaintiffs, case referred to a master.

Note. See Katavna Land Company v. Holley, 129 Mass. 540; Schofield G. & P. Co. v. Schofield, 71 Conn. 1.

Sec. 148. Same.

(e) Under special acts, either immediately upon acceptance of charter, or only after organization by the subscribers to the stock, depending upon the wording of the acts.

For example, it is sometimes said that where an act provides that A, B, C, etc. (who have applied for a charter), and their successors and assigns "be and the same are hereby incorporated," there is created ipso facto et eo instanti a corporation, and there is no condition precedent to the coming into existence of the corporation. See, 1853, Judah v. The Am. Live Stock Ins. Co., 4 Ind. 333; 1857, Stoops v. The Greenburgh & B. P. Co., 10 Ind. 47; 1859, Hammett v. L. R. & N. R. Co., 20 Ark. 204; 1880, The L. R. & N. R. Co. v. L. R., M. & T. R., 36 Ark. 663. Also, Penobscot Boom Corp. v. Lamson, supra, p. 283; Hawes v. Petroleum Co., supra, p. 581, and illustrations in §§ 135, 136, 137, supra.

ARTICLE IV. COMPLIANCE WITH CONDITIONS. DE JURE EXISTENCE.

Sec. 149. (1) As to de jure existence, conditions are

(a) Precedent, with which there must be a substantial, but not necessarily a literal, compliance, in order to make a corporation de jure.

MOKELUMNE HILL MINING CO. v. WOODBURY.'

14 Cal. 424, 73 Am. Dec. 658, supra, p. 296.

1 See, also, cases below, on pp. 590-613.

Sec. 150. Same.

(b) Subsequent, with which compliance is not necessary in order to create a valid corporation, though necessary legally to exercise corporate functions and powers.

HARROD v. HAMER ET AL.1

1873. IN THE SUPREME COURT OF WISCONSIN. 32 Wis. Rep. 162-168.

Appeal from the circuit court for Outagamie county.

Section 17, ch. 73 of the Rev. Stat., entitled "of joint stock companies," provides that before any corporation, organized thereunder, shall commence business, the president and directors shall cause the articles of association to be published in the papers, make a certificate of the purposes for which the corporation is formed, the amount of capital stock, the amount actually paid in, the names of the shareholders, the number of shares by each respectively owned, and deposit the same with the secretary of state, and a duplicate with the clerk of the town, city or village where the business is to be carried on. Section 25 of the same chapter provides as follows: The stockholders of any corporation organized under the provisions of this chapter shall be jointly and severally liable for all debts that may be due or owing to all their laborers, servants and apprentices, for service performed by them for such corporation, within six months preceding the demand made for any such debt," etc.

Harrod brought his action against the defendants, who were stockholders in the Appleton Manufacturing Company, incorporated under ch. 73, R. S., to hold them liable individually for any indebtedness against the company. Plaintiff was the owner of a planing mill, and the indebtedness grew out of certain planing done at plaintiff's mill for the building of the factory of the corporation. Judgment had been obtained against the company for the amount due, and execution was returned unsatisfied. Plaintiff thereupon sued the defendants for the amount of such judgment and interest. It was admitted that section 17 was not complied with by the filing of the required statement until March 25, 1870, and it appeared in evidence that the company erected a building, ran a saw-mill, and transacted other business, some months previous to this date. Finding and judgment for plaintiff; from which judgment the defendants Hamer and Schneider appealed.

DIXON, C. J. The theory upon which this action is prosecuted is, that the subscribers to the articles of agreement and association did not, by the steps and proceedings taken, become or constitute a body politic and corporate, under the name assumed by them in their articles, but that they failed altogether of organizing and establishing a 'Arguments omitted.

corporation under the provisions of the statute, as they attempted and intended to do. The supposition is that no corporation was created, and hence that the subscribers, who were shareholders or owners of the supposed capital stock, became a sort of unincorporated joint stock company, or quasi firm or partnership, and so liable in their individual capacity, either jointly or severally, directly to the creditors of the company or association. We are of opinion that this view of the transaction is entirely erroneous, and that a corporation was organized and set in motion with which creditors and others must deal as a corporation, and against which and against the stockholders in which claims and demands must be enforced, as in case of other like corporate bodies.

The corporation was organized under the provisions of chapter 73 of the Revised Statutes. I Tay. Stats. 982 to 987, sections 1 to 29, inclusive. It is not objected or shown that any requirement of the statute was omitted or not complied with, except only that the certificate prescribed by section 17 (section 19, Tay. Stats.) was not made and deposited with the secretary of state, and a duplicate with the town, village or city clerk, as therein directed. The only question, therefore, is, whether this failure of the president and directors to make and deposit the certificate and duplicate operated to defeat the organization or to annul the proceedings by which the corporation had been brought into existence. The very words of the section are a sufficient answer. "Before any corporation, formed and established by virtue of the provisions of this law, shall commence business, the president and directors thereof shall cause their articles of association to be published," etc., and "shall make a certificate," etc. It would not be easy by any words to recognize the existence of the corporation without the publication and without the certificate, or before they are made, more clearly than has been done here. The corporate existence is clearly acknowledged, and intended so to be, and the prohibition is only against its commencing business until the requirements of the section are complied with. It is spoken of as a corporation formed and established by virtue of the provisions of law, and having officers such as the law prescribes, namely, a president and a board of directors, capable of acting for the corporation, and upon whom, in their official capacity, certain duties are therein specifically imposed, and their performance commanded.

But, if anything further be needed upon this point, it will be found in the provisions of section 23 of the same chapter. That section reads: If the president, directors or secretary of any such corporation shall intentionally neglect or refuse to comply with the provisions of, and to perform the duties required of them respectively by, the seventeenth, eighteenth and nineteenth sections of this chapter, such of them so neglecting or refusing shall jointly and severally be liable, in an action founded on this chapter, for all debts of such corporation contracted during the period of any such neglect and refusal." The intention that the corporation should not be affected, or its powers or existence destroyed, by reason of any failure to comply with the requirements

of section 17, is here again very plainly manifested. It is again spoken of and treated as a corporation lawfully organized and still continuing, notwithstanding such failure. It is regarded as a corporation fully capable of contracting debts, and having officers, of whom the performance of certain duties has been and still may be lawfully required. And to the like effect are the provisions of section 24, and, perhaps, others. The views here expressed are sustained by the case of Holmes v. Gilliland, 41 Barb. 568.

It follows from these views that the plaintiff has misconceived his remedy, and that this action can not be maintained against the appellants as stockholders, and who hold no other relation to the corporation. The remedy of the plaintiff to enforce payment of his judgment, in addition to that given by the statute against the president and directors of the corporation, will probably be found by consulting the case of Adler v. Milwaukee Patent Brick Manufacturing Co., 13 Wis. 57.

The complaint alleges that the debt, for the non-payment of which the plaintiff recovered judgment against the corporation, accrued and became due to the plaintiff for work and labor performed by him for the corporation, but it is nevertheless not claimed that the cause of action falls within the provisions of section 25 of the statute, or that the plaintiff is pursuing the remedy given by that section. It does not distinctly appear that the debt was one of the kind therein provided for, or that the plaintiff was a "laborer." It is not shown that any demand was made, as prescribed by that section.

The judgment against the defendants Hamer and Schneider, who bring this appeal, must be reversed, with costs, and the cause remanded, with direction that it be dismissed as to them.

By the court. It is so ordered.

Note. See Beach, § 13; Clark, pp. 59, 87; Elliott, §§ 38-44; Morawetz, §§ 744-746; 1 Thompson, §§ 215-249.

Sec. 151. Same. (2) Conditions may be also:

(c) Directory merely.

NEWCOMB v. REED.

1866. IN THE SUPREME JUDICIAL COURT OF MASSACHUSETTS. 12 Allen's (Mass.) Rep. 362-364.

Contract, in which the plaintiff sought to charge the officers of the Boston Mechanical Bakery Company with a debt contracted in the name of the corporation, in consequence of their neglect to file certificates and statements of the condition of the corporation. At the trial in the superior court, before Ames, J., without a jury, the judge found for the defendants upon facts which are stated in the opinion; and the plaintiff alleged exceptions.

HOAR, J. The defense to this action rests wholly upon the assumption that the corporation, whose officers the plaintiff seeks to charge with a statute liability for its debts, never had a legal existence. The only defect suggested in the organization of the corporation is, that the call for the first meeting was signed by only one of the persons named in the act of incorporation, and not by a majority of them, as required by Statutes 1855, ch. 140.

The case of Utely v. Union Tool Company, 11 Gray 139, is the authority on which the defendants chiefly rely. That case decided that in order to charge as stockholders of a manufacturing corporation persons who had been summoned in an action against it under Statutes 1851, ch. 315, the plaintiff must prove the legal existence of the corporation.

The alleged corporation had no charter or act of incorporation from the legislature, but was an association which had undertaken to assume corporate powers under a general act for the formation of joint stock companies. Statutes of 1851, ch. 133. That statute authorized three or more persons who had entered into "articles of agreement in writing" for the transaction of certain kinds of business to organize in a manner prescribed, and thereby to become a corporation; and the court were of opinion that written articles of agreement were essential to constitute a corporation, and that these articles must fix the amount of the capital stock, and set forth distinctly the purpose for which and the place in which the corporation was established. The court say, "There is an obvious reason for making such organization by written articles of agreement a condition precedent to the exercise of corporate rights. It is the basis on which all the subsequent proceedings are to rest, and is designed to take the place of a charter or act of incorporation, by which corporate rights and privileges are usually granted." And they add that "it is not a case of a defective organization under a charter or act of incorporation, nor of erroneous proceedings after the necessary steps were taken to the assumption of corporate powers, but there is an absolute want of proof that any corporation was ever called into being which had the power of contracting debts or of rendering persons liable therefor as stockholders."

We think these reasons have no application to the case now before us. In this, there was an act of incorporation from the legislature. There is no question that the corporate powers which it conferred were assumed by the persons by whom it was intended that they should be enjoyed, so far as they chose to avail themselves of them. The organization was not strictly regular, but can hardly be considered even as defective.

And if the object of the statute is regarded, by which it is required that the first meeting shall be called by a majority of the persons named in the act of incorporation, it will be evident that it is directory merely, and only designed to secure the rights conferred by the charter to those to whom it was granted, among themselves, by providing an orderly method of organization. Thus, if all the persons