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be transmitted for recording as aforesaid, and for the balance it shall account quarterly to the Comptroller and pay the same forth with to the State Treasurer for the use of the State. *

Code (vol. 3), art. 23, sec. 5. 1908, ch. 240, sec. 5. 1914, ch. 789, sec, 5.

1916, ch. 596, sec. 3, par. 5. 5. When such certificate of incorporation has been delivered to the State Tax Commission with the fees provided for in Section 4 of this Article and the bonus tax, if any payable, and not before, the incorporators, their successors and assigns, shall according to the purposes, conditions and provisions in such certificate of incorporation contained, become and be a body corporate by the name therein stated. A duly certified copy of a certificate of incorporation from the records of the Secretary of State, the State Tax Commission or of the Clerk of the Circuit or Superior Court shall be evidence of the existence of the corporation and of its right to exercise the powers therein mentioned. The recording by the State Tax Commission of the Certificate of Incorporation shall be conclusive evidence of the payment of the recording fees and the bonus tax, if any, required by law to be paid to it, and of the existence of the corporation, except in a direct proceeding by the State. I

was

no

a

* Prior to the amendment of 1916 this section provided that the certificate of the Secretary of State should be prima facie evidence of the existence of the corporation,

but
such certificate

of

practical value without receipt evidencing the payment of the

bonus tax. See Art.

23, sec. 5; Art. 81, sec. 100; Murphy vs. Wheatley, 102 Md. 504;

Cleve. land vs. Mullin, 96 Md. 603; National Shutter Bar Co. vs. Zimmerman, 110 Md. 317. See secs. 120-122 of Art. 23, which provides for conclusive presumption of forfeiture of charter upon failure to comply with law or to commence business within two years, etc. The certificate of incorporation was submitted to a judge and approved by him but such action was not final and did not prevent an inquiry into the legal existence of the corporation. Hyattsville vs. Wash. & Gettysburg R.R., 120 Md. 128, Prior to passage of the Act of 1914, ch. 789, certificates of incorporation were filed with and recorded in full by both the State Tax Commissioner and the Clerk of the Circuit Court (Superior Court, if in Baltimore City) for the county in which the company was to have its principal office in the State, but under the Act of 1914 certificates were only to be filed with and recorded by the Secretary of State, who then furnished certain data for the State Tax Commissioner's records, limited in form and as to information. In order to examine a charter of a local concern, one had to send to the Secretary of State for a copy, but under the Act of 1916, the certificate is recorded in

three places.

I Maryland Tube Works vs. West End Improvement Co., 87 Md. 207; Cleveland vs. Mullan, 96 Md. 698; Murphy vs. Wheatley, 102 Md. 501. See Art. 23, sec. 4, and Art. 81, sec. 100. Sections, 4, 5 and 6 were in substance made

1908, ch. 240, sec. 6. 1916, ch. 596, sec. 5, par. 6. 6. It shall be lawful for all of the incorporators of any corporation having capital stock, before any subscriptions to stock have been accepted by the board of directors, to amend the certificate of incorporation in the following manner:

An amended certificate of incorporation shall be signed by all of the incorporators who signed the original certificate of incorporation. Such amended certificate of incorporation shall be executed, acknowledged, delivered and recorded in the same manner, as in the case of an original certificate of incorporation, but no bonus tax shall be payable except in respect of any increase in authorized capital stock, and upon receipt for record by the State Tax Commission, such amended certificate of incorporation shall take the place of the original certificate of incorporation. Such amended certificate of incorporation shall contain only such provisions as it would be lawful and proper to insert in an original certificate of incorporation.*

1904, art. 23, secs. 57 to 63, inclusive. 1888, art. 23, secs. 49 to 55, inclısive. 1868, ch. 471, secs. 44 to 50, inclusive. 1886, ch. 306.

1908, ch. 240, sec. 7. 7. Every corporation which is subject to the provisions of this Article shall have the following general powers, except

entirely new sections by the Act of 1916. The necessity of securing a certificate from a Court that the charter was in proper form was abolished.

When a certificate of a judge was requisite, it was not final, but courts in passing upon legal existence of corporation must be cautious in declaring certificate invalid. Hyattsville vs. Washington & Gettysburg R. R., 120 Md. 129. In such instances there is no question of acceptance of the charter by the incorporators, for so far as they are concerned, acceptance is conclusively presumed. Glymont Co. vs. Toler, 80 Md. 278. Prior to the passage of the Revised Corporation Act of 1908, the courts refused to recognize the doctrine of de facto existence of corporations and never broadly adopted the estoppel theory (Boyce vs. Trustees, 46 Md. 459). Since said Act was adopted the case of National Shutter Co. vs. Zimmerman, 110 Md. 313 (1909), was decided. It was then held that a corporation cannot be created by estoppel, and that the above provision was not intended to cover cases where through neglect there had been no attempt to comply with the important requirements of the law, and that there could be no corporate existence until the payment of the bonus tax. See Munich Reinsurance Co. vs. United Surety Co., 113 Md. 200, as to legislative recognition of corporations, which will cure defects. Sections 4, 5 and 6 as now amended by the Act of 1916, would seem to limit the opportunity of questioning the validity of a charter.

* 1916, chapter 586, by section 4, expressly repeals section 6 of article 23, and then by section 5 it provides for a new section, to be known as section 6.

where the special provisions relating to any particular classes of corporations are inconsistent herewith : *

(1) To have perpetual succession by its corporate name. (2) To sue and be sued, complain and defend in all Courts.

(3) To make and use a common seal and alter the same at pleasure.

(4) To transact its business, carry on its operations within or without this State, and to exercise in any other State, territory, district or possession of the United States, or in any foreign country, so far as the laws thereof permit, the powers granted by this Article.

(5) To make contracts, incur liabilities, and borrow money; and to issue bonds and secure the same by mortgages or deed of trust of its property, franchises and income; provided such is. sue is authorized at any meeting duly warned, as provided for in Sections 15 or 16 of this Article, by the affirmative vote of a majority of all its members or a majority of all its stock (or if two or more classes of stock have been issued, of a majority of each class) outstanding and entitled to vote.†

(6) Subject to the provisions of Article 38 of the Declaration of Rights, to acquire by purchase or in any other manner, and to take, receive, hold, use and employ, sell, mortgage, lease, dispose of and otherwise deal with any property, real or personal, including the shares, bonds and securities of other corporations, situated in or out of this State, which may be appropriate to enable it to carry on the operations or fulfil the purposes named in the certificate of incorporation.t

• See note to Art. 23 on Corporations, sec. 37. As to dealing with securities of other companies, see Davis vs. Electric Co., 77 Md. 35 ; Cannon vs. Brush Elec. tric Co., 96 Md. 446. In absence of express authority, a corporation cannot purchase its own stock, and one lending a corporation fonds with which to buy its own stock (knowing that it was to be used for such purpose) cannot recover from the corporation to the prejudice of the creditors. Bear Creek Lumber Co. Vs. Bank, 120 Md. 566 ; Burke vs. Smith, 111 Md. 626; Maryland Trust Co. vs National Mechanics Bank, 102 Md. 608. Power to borrow money and execute mortgage when authorized by board of directors is given to corporations. Howeth vs. Coulbourne Bros., 115 Md. 107.

† Diggs vs. Fidelity & Deposit Co., 112 Md. 50. See Mercantile Trust Co. vs. G. B. S. Brewing Co., 122 Md. 502, as to change of property under mortgage deed of trust. Estabrook vs. Consolidated Gas Co., 122 Md. 647.

I In the absence of express authority, a corporation has no power to contract for the purchase of its own stock. Schaun vs. Brandt, 116 Md. 560. These provisions restrict the right of acquisition of property by religious corporations,

(7) To have such officers and agents as the business of the corporation may require..

(8) To make by-laws not inconsistent with law for regulating the government of the corporation and for the administration of its affairs.

(9) Generally to exercise the powers set forth in the certificate of incorporation and those herein enumerated, and also to do every other act or thing not inconsistent with law which may be appropriate to promote and attain the objects and purposes for which the corporation was formed.*

Officers, Directors and By-Laws.

1904, art. 23, sec. 65, par. 3. 1888, art. 23, sec. 57. par. 3. 1868, ch. 171,

sec. 52, par. 3. 1908, ch. 240, sec. 8. 1916, ch. 596, sec. 6, par. 8. 8. The business and property of every corporation subject to the provisions of this article shall be conducted and managed by a board of not less than three directors, managers or trustees. Until the first annual meeting and until their successors are chosen and qualified, the board shall consist of the persons named as such in the charter-subject, however, to the right of increase, decrease and removal, on the part of the stockholders, hereinafter granted. After the first year, and subject to the provisions of Section 11 of this Article, the members of the board shall be elected by the stockholders or members of the corporation at their annual meetings, and a majority of the board shall constitute a quorum for the transaction of business.

* Dawson vs. Western Md. R. R. Co., 107 Md. 71. Gregory vs. Chapman. 119 Md. 505.

† Functions of officers, Mundy vs. Jacques, 116 Ma. 11; McGowan vs. Finola Mfg.Co., 120 Md. 335. Directors alone control the employment and discharge of employees of corporations. They have absolute discretion. They regulate salaries to be paid. Howeth vs. Coulbourne Bros., 115 Md. 107; Navarre Realty Co. vs. Coale, 122 Md. 494. Bear Creek Lumber Co. vs. Bank, 120 Md. 568. In Hueblein vs. Wright, 222 Fed. 667. Salaries voted to themselves in control of the Sherwood Distilling Company were ordered to be reduced at the instance of a minority stockholder. One point raised by the defendants was that the alleged excessive salaries had been paid for a number of years to the knowledge of the complaining stockholder without him asking legal redress. The court held that as the corporation was not now as prosperous as it had been, the failure of the minority stockholder to take legal proceedings sooner, would not deprive him of relief, especially as the object of the suit was to fix the salaries for the future,

1916, ch. 596, sec. 7, par. 8A. 8A. Every corporation of this State incorporated on or after June 1, 1916, shall have at least one resident agent in charge of its principal office in this State. Such resident agent shall be a citizen of this State, actually residing therein, or a corporation of this State. Any corporation of this State incorporated prior to June 1, 1916, which files with the State Tax Commission the location of its principal office and the name and postoffice address of at least one resident agent (giving in each case the county and city, town or place and street and number, if number there be), need not thereafter have a director who is a citizen or resident of this State, but shall be thence forth subject to the provisions of this section relating to corporations formed on or after June 1, 1916. No amendment of the charter of any such corporation shall be necessary to change the location of the principal office of such corporation from one place in a county or the City of Baltimore to another place in such county or city, or to make any change whatsoever in the names or addresses of any resident agents. Every such corporation shall notify the State Tax Commission promptly of any change (not made by amendment) in the location of its principal office, or in the name or postoffice address of any resident agent (giving in each case the county and city, town or place, street and number, if number there be). The State Tax Commission shall keep a public index of the locations of the principal offices and the names and addresses of the resident agents of all such corporations. Every corporation of this State incorporated prior to June 1, 1916, not complying with this section, shall have at least one director who is a citizen of this State actually residing therein.

1908, ch. 240, sec. 9. 1916, ch. 596, sec. 8, par. 9. 9. Every corporation subject to the provision of this article shall have a president, a secretary and a treasurer, all of whom shall be chosen by the board of directors unless the by-laws otherwise provide. The President shall be chosen from among the directors. The corporation may have one or more vicepresidents, assistant secretaries and assistant treasurers, if the by-laws so provide, all of whom shall be chosen by the board of

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