out of capital,-these are some of the things that directors are punished by statute for doing or not doing. Concerning all such provisions there are two observations to be made and afterwards will be taken up the special requirements of the general incorporation law of Maryland.

First. In the prevailing view such statutes are penal and will not be enforced by courts other than those of the state where the statute operates. But there is high authority to the contrary. In Bank v. Price, 33 Md. 491, the appellee was a director in a corporation of Pennsylvania and by a statute of that State the directors were liable to creditors for all debts contracted in excess of the capital stock. The appellant, a creditor of the corporation, was held to have no right of action enforceable in Maryland against the appellee. In Attrill v. Huntington, 70 Md. 191, there was a statute of New York which imposed upon the directors of corporations of that State a penalty for filing false reports of assets and liabilities. Huntington had obtained judgment under the statute against Attrill in New York and a suit based on the judgment was brought in Maryland, for the purpose of setting aside as fraudulent, certain transfers of property made by Attrill to his wife. A majority of the court applied the rule in Bank v. Price, supra, and held that the rule was not affected by the fact that the suit was on the judgment and not on the statute. The Supreme Court of the United States reversed the judgment of the Maryland court on the ground that it did not give full faith and credit, as the Constitution requires, to the judgment of the court of New York; and it was held, moreover, that the New York statute was not penal within the rule which excepts penal statutes from the principle of interstate comity.1

1 Huntington v. Attrill, 146 U. S. 657. The Chief Justice dissented on the ground that there was no federal question involved and that

Second. Such statutes confer no right of action on the corporation or its receiver; but in a suit against the directors by the corporation or its representative for negligence in the discharge of their duties, the statutory provisions may furnish "the standard of duty and the evidence of wrong doing. But the penalty of the statute is not recoverable in such a suit."1

Third. The liabilities imposed by the general law of Maryland upon directors of corporations are these:

"First. If the trustees, managers or directors of any such corporation shall declare and pay any dividend when the corporation is insolvent, or any dividend, the payment of which would render it insolvent, or would diminish the amount of the capital stock, they shall be jointly and severally liable to the extent of the dividends so declared and paid for all the debts of the corporation then existing, and also for all that shall thereafter be contracted, while they shall respectively continue in office, even although the whole amount of the capital of said corporation has been paid in. But if any of the trustees, directors or managers of said corporation shall object to declaring such dividend, or to

the decision of the Maryland court as to the penal nature of the New York statute was conclusive. The questionable view of the Supreme Court, namely, that a penal statute must be criminal or quasi criminal in its nature, was that taken in the dissenting opinion in the Maryland Court; and also in Huntington v. Attrill, L. R. 18 App. Cases 150, a case on the same judgment, decided by the Privy Council on appeal from Canada.

1 Fisher v. Parr, 92 Md. 278; and Briggs v. Spaulding, 141 U. S. 132. On this point the two cases are in accord. By Code (1911), Art. 23, sec. 75, it is now provided that the liability of the directors thereby imposed "shall be collectible by the receiver or other person winding up its affairs, as an asset of the corporation." The whole section is presently quoted.

the payment of the same, and shall, at any time before the time fixed for the payment of the same, record a certificate of their objection in writing with the clerk of the court in which the certificate of incorporation is recorded, they shall be exempt from the liability imposed hereby.

Second. No loan of money shall be made by any corporation to any stockholder or director therein and if any such loan shall be made, the officer or officers or directors who shall make it or assent thereto shall be jointly and severally liable for all the debts of said corporation to the extent of the loss that may result from such loan; but this paragraph second shall not apply to any building or homestead association, or any corporation whose principal business under its charter is to loan money on real or personal property, or to any corporation receiving and authorized to receive money on deposit or to any life insurance company lending money to any of its policy holders on their policies.

Third. In the event of the insolvency of the corporation, the liability of the directors and officers under this section shall be collectible by the receiver or other person winding up its affairs, as an asset of said corporation."1

1 Code (1911), Art. 23, sec. 75. In the case of national banks, the duties and liabilities imposed by the banking act control any inconsistent state provisions. Yates v. Jones National Bank, 206 U. S. 158. For the jurisdiction of equity, the bar of limitations, and the nature of the liability in suits by receivers against directors, see Emerson v. Gaither, 103 Md. 564; Murphy v. Penniman, 105 Md. 452; Gaither v. Bauernschmidt, 108 Md. 1; Foutz v. Miller, 112 Md. 458. Notwithstanding the statute, a director who votes for a dividend which is unwarranted, would hardly be liable unless he acts knowingly or negligently. Compare McDonald v. Williams, 174 U. S. 397; and Code (1911), Art. 11, secs. 65-68.

CHAPTER XI.

OFFICERS AND AGENTS.

§ 67. How elected and appointed. Subject to the provisions of the charter and the will of the shareholders as embodied in the by-laws, directors may parcel out their administrative powers by electing and appointing such officers and agents as the needs of the corporation require. In usual course the board organizes by electing a president to preside over its meetings; a vice-president, who, in the absence of the president, takes his place; a secretary, who keeps the records and is the custodian of the corporate seal; and a treasurer, who acts as the chief financial officer. But subject to the charter and any governing statute, the number, the names and the duties of the officers are matters in the discretion of the corporation. In the nature of things there must be a presiding officer who, with his substitute, must be members of the board; but neither the secretary nor the treasurer need be; and two offices not inconsistent may be filled by the same person.2

1 The will of the members expressed in an invalid by-law does not bind the directors. Insurance Co. v. Farquhar, 86 Md. 668. 2 Code (1911), Art. 23, secs. 9 and 10, provides:

"Every corporation subject to the provisions of this article shall have a president, a secretary, a treasurer and, if the by-laws so pro

§ 68. Authority. The officers of a corporation are, of course, its agents; they differ from directors, on the one hand, in that these, by custom, are specially so designated; and from agents and servants generally, in that these fill no recognized office in the organization. Like the agents of a natural person, the powers of corporate officers strictly depend upon the authority the principal has given them or has held them out as possessing. In the matter of express powers there is nothing in the law of agency peculiar to corporations. Executive powers, for example, may be conferred by the board upon the president; or upon the managing director; or upon a general manager who is not a director; or, as is sometimes done in the case of banks, upon the cashier; or the powers may be vested in an executive committee of the board. And whatever any officer or agent of the corporation, high or low, has been authorized to do; and whatever he has, with the knowledge of the board, been in the habit of doing-in such and similar matters, the cor

vide, one or more vice-presidents-all of whom shall be chosen by the directors unless the by-laws otherwise provide. The president and at least one of the vice-presidents shall be chosen from among the directors; the treasurer and the secretary need not be directors;. and any two officers (offices) except those of president and vicepresident, may be filled by the same person."

"The board of directors may exercise all of the powers of the corporation, except such as are by law or by the certificate of incorporation or by the by-laws conferred upon or reserved to the shareholders or members. The by-laws may provide for an executive committee of two or more members to be elected from and by its board of directors; and to such committee may be delegated the management of the current and ordinary business of the corporation and such other duties as the by-laws may prescribe."