MATTERS OF PROCEDURE 313 legislation drew a distinction between corporations formed under the general law and those created by special charter; (2) from the fact that the courts refused to apply to a corporation the statutory provisions relating to a natural person; (3) and from the fact that amendatory statutes had not proceeded upon any logical and consistent principle, but made special provisions for special classes of corporations. The Act of 1908, ch. 240, Code 1911, Art. 23, sec. 87, now provides: "Process issued by any court or justice of the peace of this state against any corporation thereof may be served on any president, director, manager, or other officer; and if none reside in this state, such corporation may be proceeded against by attachment as a non-resident, or such process may be served on any agent, or other person in the service of the corporation; provided, that in all cases mentioned in this section, the officer serving process shall leave a copy thereof with the person upon whom it is served. Every corporation of this state may be sued in any county or in the city of Baltimore, as the case may be, where its principal office is located, or where it regularly transacts business or exercises its franchises, or in any local action, where the subject-matter thereof lies; and process against such corporation may be served as is hereinabove provided, and may be directed to the sheriff of any county or of the city of Baltimore, returnable to the clerk of the court out of which same issued. And whenever any corporation of this state has become surety on any bond required by law to be filed in any court thereof or with any register of wills, public board or official-suit against such corporation on such bond may be brought in the city or county where the same is filed." 1 Note the earlier provisions for insurance and surety companies Code (1911) Art. 75, sec. 23; and for telegraph and express companies, Art. 56, sec. 124. 314 MATTERS OF PROCEDURE § 157. Pleading and evidence. Attention has already been called to the use of the seal in pleading; to the rule that the general issue plea puts the incorporation of the plaintiff in issue; and that where the incorporation of the plaintiff is alleged, it will be taken as admitted for the purposes of the particular suit unless denied in the next succeeding pleading. There is little in the rules of evidence peculiar to corporations that has not already been touched upon; the method of proving the by-laws; the force and effect of the minute books as proof; the rule of interpretation whereunder the word person includes a corporation,these are matters which have been sufficiently considered. In some of the earlier cases, there is announced a peculiar doctrine touching judicial notice of special charters; and it has been held that although the corporation is not a public one, its charter may be so far of a public nature as to require judicial notice by the courts. Thus, where the charter of a bank reserved for the use of the state certain shares of its capital stock, it was held to be a public law of which the court was bound to take judicial notice,-Towson v. Bank, 6 H. & J. 47; and so the charter of the "Visitors and Trustees of the Charlotte Hall School," was held to be "considered in the light of a public law,"-State v. Greenwell, 4 G. & J., 408. These cases have not been overruled, but they are not to-day of much practical importance. § 158. Execution. The assets of a private corporation may be taken by creditors for its debts, to the same extent and in the same manner as if it were a natural person. The property of a municipality, held for public purposes, is exempt from seizure; but, in Maryland, the judgment creditor can by writ of mandamus compel the levy of an assessment to pay his debt.1 To a more limited extent the prop 1 Code (1911) Art. 23, sec. 259; Darling v. Baltimore, 51 Md. 1. MATTERS OF PROCEDURE 313 erty of a public service corporation, namely, that essential to the performance by it of its public duty, is exempt from seizure.1 § 159. Miscellaneous. The special procedure relating to the dissolution and winding up of corporations, is considered in the following chapter. By the Act of 1908, ch. 240, (Code 1911, Art. 23 sec. 99), an additional provision is made for the manner in which the deed of a corporation may be acknowledged. By section 292 of the same Article, a special and summary remedy against transportation companies is given to persons who may be aggrieved "by reason of anything done or omitted to be done by the said company in violation or contravention of its duty in regard to the transportation or carriage of property or persons." By section 2 of Article 9, entitled Attachments Against Non-resident and Absconding Debtors, it is provided that: “Any corporation chartered by this state, but not having a president or a majority of the directors or managers thereof residing in this state may be made a defendant as other nonresidents." This provision, while not specifically repealed by the Act of 1908, chapter 240, is doubtless superseded by section 87 thereof, above quoted.2 1 McColgan v. Balto. Belt R. Co., 85 Md. 519; Brady v. Johnson, 75 Md. 445,-reported with a valuable note in 20 L. R. A. 737. 2 Ante, $156. CHAPTER XXII. DISSOLUTION. § 160. Preface. In legal theory, the author and finisher of the corporation is the state. Corporate life may expire by lapse of the time for which the charter was granted, or, in a membership corporation, by the loss of sufficient members to keep up the succession; the charter may be forfeited for cause, or it may be surrendered by agreement,—but without the assent of the state, express or implied, corporate life can neither begin nor end. It is true that in most modern systems this assent is given in advance. Courts of equity are usually empowered to enter a decree of dissolution: (a) in a voluntary proceeding by the stockholders; (b) in an involuntary proceeding by a creditor or, in some states, by a shareholder, of an insolvent corporation. It is important, however, to remember the theoretical point of view and its consequences, namely, that the dissolving power of the court is not inherent, but is measured exactly by the terms of the law that confers it.' In this chapter particular attention will be given to the subjects of forfeiture, and voluntary and involuntary dissolution as regulated by statute in Maryland, but first certain general doctrines will be noticed. First. Dissolution by loss of membership. Where by reason of death or resignation, there are not sufficient mem 1 Mason v. Equitable League, 77 Md. 484. bers left to keep up the succession, the corporation is either dead, or, its life is suspended until revived by legislative act.1 This situation cannot, of course, arise in a share company; and in others the rule is a little difficult of application. It is sometimes said that the loss of all the members or the loss of an "integral part" of the corporation causes its death. The former statement is obviously true, but there is no clear principle announced by the latter. In every corporation, fictitious personality must rest upon some natural persons whose succession is kept up by co-optation or otherwise; and so long as there are a sufficient number of natural persons to replace and restore this integral part, the corporation may be dormant but it is not dead. For example, in Maryland, the trustees of a religious association and not the members who elect them-constitute the corporation; but no dissolution would result from the death or resignation of all of the trustees. On the other hand, if by charter, the electing body consists of a definite number, a majority is (probably) necessary for a quorum;3 otherwise, there is no reason why two persons may not hold a meeting.* 1 Regents v. Williams, 9 G. & J. 232; Vincennes Univ. v Indiana, 14 How. 268. 2 Ante, $44. 3 Regents v. Williams, 9 G. & J. 232. 4 In the Roman law, it is said, corporate existence continued so long as there were three members. The Act of 1908 (Code 1911, Art. 23, sec. 98) provides: "Whenever it shall happen in the case of any corporation having a definite number of members and no capital stock, that by death or resignation the membership shall be reduced below a majority of the prescribed number, the corporation shall not on that account be dissolved; but it shall be lawful for the surviving or continuing members so long as the number thereof shall be two or more, to fill vacancies and continue the corporate succession." |