v. Lawrenceville R. R., 77 Ga. 506, 1 S. E. 255; Cal. Southern Hotel Co. v. Russell, 88 Cal. 277, 26 Pac. 105.

of that case will show, however, that, far from supporting the appellants' contention as applied to the facts of this case, it bears out the application of the general rule as inherent in the appellee's subscription, and shows it as avoidable only by waiver or estoppel. The articles of association in that case, which were subscribed by Trimble, con

of capital stock of said association shall be $50,000, of which $14,500 have been subscribed by corporators aforesaid, and the residue may be issued and disposed of as the board of directors may from time to time order and direct"-and the court said: "No implication arises from this provision that the corporation was to postpone its enterprise until all the capital stock had been subscribed. The most reasonable inference to be drawn from it is that the $14,500 was all the money needed for the purpose. The fact was that it began business as soon as the $14,500 was subscribed, and after that Trimble agreed to take his stock." These articles of association could well be construed as fixing the formative or original stock at $14,500, with power to increase the same from time to time as the directors should see fit, up to $50,000, and this is precisely what it is fair to presume Judge Robinson meant in Musgrave v. Morrison, supra, when he said, on page 164 of 54 Md.: "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 subscription."

While the appellants, as we have said, do not deny the general rule invoked, they do contend that, "if the corporation is already a going concern at the time of the subscription, and is continuing to create liabilities to the knowledge of the subscriber, and the sub-tained the following provision: "The amount scriber also knows that its stock fixed in its charter is not fully subscribed," then the presumption which this court, in Gettysburg Bank v. Brown, 95 Md. 386, 52 Atl. 976 (93 Am. St. Rep. 339) said arises, "that the amount fixed in the charter shall be raised before the corporation creates liabilities," cannot arise, and the rule has no application. This contention seems to us to confound the general rule with the subsidiary rule, equally well settled, that this defense may be waived, or the subscriber be estopped from setting it up. The appellants cite, in support of their contention, what they concede to be a dictum of this court in Musgrave v. Morrison, 54 Md. 161, in which Judge Robinson said: "We do not mean to say that this rule applies to corporations of every kind without regard to the objects and purposes for which they are chartered. * * * 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 appellant's subscription 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 to organize until the whole number of shares had been taken." But the learned judge nevertheless placed the decision squarely on the ground that, during three years that he was a member, he not only regularly paid his weekly dues, but accepted his proportion of the profits earned, and through an attorney voted his stock at all meetings, whether for the election of directors, or the transaction of other business, and the court expressly states that all this time he knew the whole capital stock had not been taken.

Another case cited for their contention is Arkadelphia Mills v. Trimble, 54 Ark. 319, 15 S. W. 777, in which the court said: "The fact was that the corporation began business as soon as the $14,500 was subscribed, and after that Trimble agreed to take and pay for the $500 subscribed by him. From this it is evident that there was, and could be, no implied condition in his agreement that the corporation should not begin business until all the capital stock was taken. The corporation was engaged in business when he subscribed. It was evident it would need money in the prosecution of its enterprise, for if it would not, there was no necessity for his subscription. He was not to be an hon

We can perceive nothing in the case before us, in the nature or kind of business for which the storage company was incorporated (if that can in any case be a proper subject of inquiry), nor in the time when, or the circumstances under which, the appellee made the subscription in suit, which should take this case out of the general rule. It appears from the subscription blank that the capital stock was then designed to be $250,000, presumably upon the supposition that the attempted increase from $150,000, as fixed by the certificate, to $250,000 was regular and effective. The original stock, however, was $150,000, and there is no evidence as in the Arkansas case, supra, that the charter authorized the organization of its main enterprise before the full amount was subscribed. The subscription in this case was made June 10, 1907. Prior to June 12, 1906, the company was doing a small business, principally in towing and lighterage, requiring comparatively small capital. In July, 1906, it leased Brown's Wharf and began a storage business there, but at that time it contemplated the expenditure of a large amount in the erection of a modern storage warehouse, to which it bound itself in that lease in pursuance of negotiations with the appellee representing the railroad company. The erection of that

continued to be its main enterprise. The a debt due Baechtel by the company, Judge appellee's subscription was made June 10, Robinson also said: "The mere fact that he 1907, and the building contract made in July, paid his subscription, knowing that the whole 1907, called for an expenditure of $136,000, capital stock had not been paid in, and that nearly the whole of the authorized capital. the company was incurring debts for propIn addition to this the storage company pur-erty and material, were not such acts of parchased ground on which to erect the ware- ticipation as to estop him from setting up in house, and mortgaged the same for $50,000. this action the partial subscription of the All this was done without the concurrence of capital stock." And this was held also in the appellee, who at the time of making the Bray v. Farwell, 81 N. Y. 600, in a similar subscription advised against undertaking any case, where defendant never attended a stockconstruction under existing business condi- holders' meeting, or assented in any way to tions, and continued so to advise. In consid- the commencement of the enterprise before ering this situation it must not be forgotten, all the shares were taken. In Ridgefield R. as said in Hager v. Cleveland, 36 Md. 487, R. v. Reynolds, 46 Conn. 375, Reynolds atthat "there is a wide difference between the tended stockholders' meeting to elect directexistence of the company as a corporate body ors, and was himself elected a director, and and the liability of parties for their subscrip- accepted. He was present at a meeting of tions to its capital stock," and, as repeated in directors when an assessment of 40 per cent. Gettysburg Bank v. Brown, 95 Md. 385, 52 was laid, and when a report was made by the Atl. 976 (93 Am. St. Rep. 339), that "this rule president, of a contract for construction, and applies to subscriptions made before and aft- work actually begun; but it did not appear er the company is chartered." The fact that he participated in any action taken at the the appellee knew that the storage company meeting. It was held none of these things was about to involve its stockholders in this constituted a waiver. Chief Justice Park large financial undertaking is conclusive that said: "The case is silent as to his conduct. he was entitled to the benefit of the rule he His simple presence is as much in accord now invokes. We cannot imagine a situation with one supposition as the other. The burin which this rule could apply with more den of proof is on the appellees." In Masonic peculiar force if the reasons so forcibly as- Temple v. Channell, 43 Minn. 353, 45 N. W. signed by Judge Shaw in 2 Gray, supra, and 716, the court said: "It is to be regretted so fully approved by this and other courts, that there has been any relaxation of this are in themselves sound and satisfactory. | rule. The acts as stockholder which will But it remains to inquire whether this de- constitute a waiver are those which constifense has been waived, or the appellee estop-tute a part of the business for which the corped to claim its benefit. In considering this poration is formed, and which evince a wilquestion it must be kept in mind that there lingness to enter upon that business with the is not only no evidence to show that Land- stock already subscribed." This is a clear street did not know all the stock was not sub- and plain statement of the principle upon scribed, but that he subscribed in reliance which all such questions should be resolved. upon Brady's assurance that it was all either In that case the defendant was a director, atactually subscribed, or promised to be sub-tended meetings as such, and was chairman scribed immediately upon his subscription be- of a committee to select a building site, and ing made, as indicating the co-operation of the railroad company. Technical estoppel, it may be conceded, is not required, and any acts which constitute waiver will be sufficient. It is uncontradicted that Landstreet never qualified as a director, and never attended any directors' or stockholders' meeting, nor participated in any way in the incurring of any obligation or the transaction of any business of the company. In Garling v. Baechtel, 41 Md. 305, it was held that where a stockholder attends meetings of the company, knowing the whole capital stock has not been taken, and votes for the expenditure of money for the purchase of property and materials to carry on the business of the company, he will not be permitted to set up the defense that the capital stock had not all been taken. And to the same effect is Hager v. Cleveland, 36 Md. 476, and Stillman v. Dougherty, 44 Md. 380, but in Garling v. Baechtel, 41 Md. 305, supra, which was a suit to recover of Garling as a stockholder

only resisted payment when the site he favored was not selected. This was held a waiver. The facts in this case do not in our opinion bring it within any well-considered decision under which a waiver could be found, and we think the learned judge below correctly granted the defendant's first prayer.

As this necessarily requires the affirmance of the judgment, there is no occasion to consider the other prayers, nor the disposition of the motions to strike out evidence, all of which were refused.

Judgment affirmed, with costs to the appellee above and below.

(109 Md. 622)

COOK v. COUNCILMAN. (Court of Appeals of Maryland. Feb. 11, 1909.) 1. MORTGAGES (§ 137*) - CONSTRUCTION-INTEREST PLEDGED.

A real estate mortgage was executed pursuant to an agreement contained in a note by which defendant agreed to transfer to the mort

gagee, as security for the note, all right and in- | ratifying the sale Theodore Cook, Sr., the terest which defendant owned or held in and purchaser, appeals. Affirmed.

[Ed. Note.-For other cases, see Adverse Pos- sale was duly reported to the court below session, Dec. Dig. § 106.*]

[Ed. Note.-For other cases, see Wills, Cent. Councilman did not have a fee-simple title Dig. 1374; Dec. Dig. § 608.*]

[Ed. Note.-For other cases, see Wills, Cent. B. Councilman should own or hold in and to Dig. 1080; Dec. Dig. § 497.*

Proceeding for the foreclosure of a mortgage executed by James B. Councilman to Sadie C. Councilman, his wife. The land was sold under a decree, and from an order or has or holds any interest or right in or to

of any nature, kind, or description whatso- or devisee; and the appellant contends that ever, and wherever the same may be, espe- the interest the devisee acquired was a mere cially including all his right, title, interest, life estate with limited powers. estate, and claim in and to that tract of land known as 'Woodhome farm,' situated in the Third election district of Baltimore county." To have and to hold such of the aforesaid property or interest therein, as may be owned by the said James B. Councilman in fee, to the said Sadie C. Councilman, etc.

(110 Md. 1)

LAMBERT et al. v. MORGAN et al. (Court of Appeals of Maryland. Feb. 19, 1909.) 1. TRUSTS (8 147*)-ASSIGNMENT BY CESTUI QUE TRUST - NOTICE TO TRUSTEE- NECESSITY.

Assignments of the income of a trust estate take effect as between the assignees from the date of the giving of notice to the trustee which may be by the filing of claims on the assignments in court proceedings and procuring proper orders thereon.

the heirs of the life tenant, and that they | circuit court for Baltimore county passed on take as his heirs, and not as purchasers. the 1st day of September, 1908, overruling Then the rule applies as matter of law. In the exceptions and ratifying and confirming such case the particular intent that the first the sale, it will be affirmed. taker shall possess only a life estate might Order affirmed, with costs. yield to the general intent that his heirs shall inherit from him. Thus in Simpers, Lessee, v. Simpers, 15 Md. 187, it is said that there is no rule better established than that, when there is a particular intent expressed in a will and a general intent inconsistent therewith expressed in the same will, the latter must prevail. In Jones v. Morgan, L. Brown's Ch. Rep. 206, Lord Thurlow said that, where the estate is so given that it is to go to every person who can claim as heirs to the first taker, the word "heirs" must be a word of limitation, and all heirs, taking as heirs, must take by descent. The word "children," used as a description of the persons who are to take after the life estate, is often construed to be a word of purchase and not of limitation. Stump v. Jordan, 54 Md. 619. But in the case of the devise now being considered the word "heirs" is used as well as the word "children," and that word is strictly one of limitation. The ultimate gift over to the heirs of Councilman in default of children indicates a general intent that the estate should descend to his heirs, and operates to enlarge the effect of the word "children" antecedently used. The limitation over therefore is to the children or heirs of the life

tenant. The general intention of the testator was that his nephew should be the root of succession from which future takers should come, and that they should take as his heirs. In Shapley v. Diehl, 203 Pa. 568, 53 Atl. 374, land was conveyed to Shapley for the term of his natural life, and at his death to his children or heirs. The court, in that case held that the phrase "children or heirs" means heirs of the grantee of the life estate; the word "heirs" being used as synonym to enlarge and explain the preceding word which might otherwise fail of its real intendment. The words therefore naturally and properly seem to express the intent that the donees in remainder should take, not from the donor directly as purchasers, but in succession by inheritance from the grantee of the life estate. Sheeley v. Neidhammer, 182 Pa. 163, 37 Atl. 939; Mason v. Ammon, 117 Pa.

127, 11 Atl. 449.

We have carefully examined the cases cited by the appellant's counsel, in their very able brief, but find nothing in them in conflict with the conclusion we have reached, and that is, this case falls within the rule in Shelley's Case, and that James B. Councilman acquired under the will a fee-simple estate in the farm called "Woodhome," devised under the wi! The sale being in all other respects valid, the purchaser at this sale will acquire the fee-simple title to the property sold thereunder. Finding no error in the order of the

[Ed. Note.-For other cases, see Trusts, Cent. Dig. § 192; Dec. Dig. § 147.*]

2. ASSIGNMENTS (§ 85*)-NOTICE TO DEBTORNECESSITY-PRIORITIES.

The assignee of a claim or chose in action who first gives notice to the debtor obtains priority over other assignees.

[Ed. Note.-For other cases, see Assignments, Cent. Dig. § 150; Dec. Dig. § 85.*] 3. TRUSTS (§ 147*)-ASSIGNMENT BY CESTUI QUE TRUST-NOTICE TO TRUSTEE-RECORDED INSTRUMENT.

The recordation of an instrument as a mort

gage on real estate, while the instrument is a mere assignment of the fund in the hands of a trustee, does not operate as constructive notice of the assignment.

Dig. § 192; Dec. Dig. § 147.*]

[Ed. Note.-For other cases, see Trusts, Cent.

4. CONVERSION (§ 19*)-OF PERSONALTY INTO REALTY-OPERATION OF WILL.

A will whereby testator gave his real and personal property to a trustee in trust to sell in such manner and for such price as he might etc., operated under the doctrine of equitable think fit and to pay the income to a beneficiary, conversion to convert the real estate into personalty at the time of testator's death, and the beneficiary acquired no interest in real estate, but only acquired the right to receive money out of the proceeds of a sale of real estate.

[Ed. Note.-For other cases, see Conversion, Cent. Dig. § 47; Dec. Dig. § 19.*]

Appeal from Circuit Court of Baltimore

City; Charles W. Henisler, Judge.

In the matter of the distribution of the

income of the trust estate of De Witt Clinton Winans, deceased, among the creditors of Ellen Barbara Williams, a life tenant. From

of whom J. Pierpont Morgan and others oban order of distribution between creditors, tained a preference, Frederick Lambert and another, trading as Lambert & Cooper, and another, appeal. Affirmed.

Argued before BOYD, C. J., and BRISCOE, PEARCE, SCHMUCKER, BURKE, WORTHINGTON, THOMAS, and HENRY,

JJ.

Geo. Stewart Brown and Stewart Brown, for appellants. William Pepper Constable, George Weems Williams, Randolph Barton. Jr., Aubrey Pearre, Jr., and Stuart S. Janney, for appellees.