iMii BOSTON: LITTLE, BROWN, AND COMPANY. 1868. Entered according to Act of Congress, in the year 1*68, by SAMUEL BATCHELDEK, JK., In the Clerk's Office of the District Court of the District of chnsetts. CAMBBIDGE : PRESS OF JOHK WILSON AKD SON. P E E F A C E. The Massachusetts Census of 1865 returns 240,489 persons^ as engaged in " Manufacturing or Mechani- cal occupations." If, from the so-called " Produc- tive Class," embracing all between the ages of fifteen and si^ty; and nu^b^rin.g 767,377, we de- duct the very many thousands who do not, and the many thousands more who cannot, live by manual labor, adding the comparatively small number of those who so labor before and after the ages men- tioned, til ere can be little doubt that the number above stated as engaged in " Manufacturing or Me- chanical occupations" will cover nearly, if not quite, one-half of those employed in Productive Industry, strictly so called, at the given date. That the population of the Commonwealth is em- inently a manufacturing population, and that a large percentage of the above labor is controlled by organ- ized capital in the sliape of manufacturing corpora- tions of various kinds, will moreover appear, in view 1 The Industrial Keturns of the same year place the numher at 271,421. IV PBEPACE. of the fact, that out of the number of more than one thousand corporations making returns to the Tax Commissioner, May 1, 1868, nearly eight hundred may be ranked as manufacturing corporations " duly established by the laws of this Commonwealth," in most cases very largely, and in many, doubtless, almost wholly, sustained by Massachusetts capital. If we allow $200,000 only of such capital to each of these companies (and sixteen manufacturing cor- porations chartered by the Legislature of 1868 have an average authorized capital of 1640,000 each), we have.an aggregate of 1160,000,000, more than one- third of the valuation of the entire Personal Estate in the Commonwealth in 1865. Turning now to seek for the rules of law by which these vast capitalizations of the Productive Indus- try of the Commonwealth are controlled and ad- ministered, we find them, so far as legislation is concerned, embodied in not less than seventy-one different Statutes and parts of Statutes, not reckon- ing those enacted prior to the codification of 1836, those passed between the times of this codification and that of 1860, and Statutes repealed, all of which are important in their relation to Acts now in force, and also for the better understanding of judicial de- cisions with which they have been interwoven in the growth of our common law upon these subjects. PREFACE. V This is of even more imposing proportions than the whole body of the statute law above noted, extend- ing through a lengthening series of adjudicated cases, and having a value and practical importance steadily augmenting with the growth and develop- ment of the indxistrial energies of our people. It has proved impossible to permit this mass of com- mon law to be passed in full review before the reader of a volume which is designed to compress into a narrow compass the essence, as it were, of extant and contemporaneous rules, in their practical appli- cation to the management of corporate affairs, and to the ascertainment of the interdependent rights, duties, and liabilities of the officers and stockholders of manufacturing corporations. The attempt has therefore been made to present such only of the salient points of each adjudication used, as seemed more closely connected with the special topic under consideration, and of indicating by references, rather than by quotations, the sources of fuller informa- tion. It is hoped that the general plan and struc- ture of the book, the methods of subdivision and arrangement employed, together with the tables, indexes, etc., may render it in reality, as well as in name, a Manual for the use of all who have occasion to inform themselves in regard to the law of manu- facturing corporations in this Commonwealth at the present time. VI PREFACE. The author is greatly indebted to Charles Allen and Albert G. Browne, Jr., Esquires, the late and the present reporter of the decisions of the Supreme Court, for kindly permitting the use of recent adjudications of the Court in advance of their pub- lication ; to Daniel A. Gleason, Esquire, Tax Com- missioner, and S. W. Hatheway, Esquire, Assistant Tax Commissioner, for valuable suggestions and kind interest and co-operation ; as well as to other friends whose timely counsel and encouragement he desires most sincerely- to acknowledge. Cambridge, December, 1868. CONTENTS. CHAPTER I. Page INTRODUCTORY 1 CHAPTER n. CORPORATIONS IN GENERAL .... 4 CHAPTER HI. CORPORATIONS ORGANIZED FOR BUSINESS PURPOSES, OR HAVING STOCK DIVIDED INTO SHARES . . 40 Section I. Preliminary proceedings 40 II. Administration of Affairs 48 III. Legal and Equitable Proceedings by and against 63 IV. Miscellaneous Provisions 79 V. Insolvency and Dissolution 90 CHAPTER IV. MANUFACTURING CORPORATIONS IN GENERAL . 101 Section I. Returns and Taxation . ,, 101 II. Personal Liability of Officers and Stock- holders 132 III. Miscellaneous Provisions 160 CHAPTER V. MANUFACTURING CORPORATIONS UNDER SPECIAL CHARTER 166 Vlll CONTENTS. CHAPTER VI. FAOE MANUFACTURING COKPORATIONS CKKATKD OTHER- WISE THAN BY CHAKTKE 178 Section I. Companies for Cutting and Selling Ice ; for Mechanical, Mining, Quarrying, and, Manufacturing Purposes ; and for Agricultural and Horticultural Busi- ness 178 II. Gas-Light Companies 192 III. Co-operative Associations 213 LIST OF CASES CITED. Faqi Abbey v. Chase 10, 12 Allen V. Dykers . . ; 59 Allen V. Rounseville 51 American Bank v. Rollins 18 Amherst Bank u. Root 171 Andover v. Flint 187 Andrews v. Callender 136 Appleton Mut. Fire Ina. Co. o. Jesser 44 Atkins V. Albree 87 Atkinson v. Atkinson 83 Banet v. Alton, &c., R.R 98 Bangs V. Lincoln 137, 145 Barrett v. Mead 81 Bates V. Boston and New- York Central R.R. Co. ... 5, 7 Benson v. Maiden and Melrose Gas-Light Co 212 Bird w. Daggett 172,179 Bogardus v. Rosendale Manufacturing Co 137 Bond V. Morse 165 Boston and Lowell R.R. v. Salem and Lowell R.R. . . 23 Boston and Maine R.R. Co. v. County of Middlesex . . 31 Boston Manufacturing Co. v. Newton 115 Bradley v. Poole 73 Brigham v. Mead 80 Brinley v. Mann 10 Brown v. City of Cambridge 74 Buck V. Ashuelot Manufacturing Co 15 Buffalo, &c., R.R. v. Dudley 98 Byers v. Franklin Coal Co 65 X LIST OP CASES CITED. Paos . Cambrido;e Water Works v. Somerville Dyeing and Bleaching Co 137 Campbell u. Morris 108 Cary v. Holmes 133, 145 Charitable Corporation v. Sutton 52 Chase v. Lowell 51 Chelmsford Co. v. Demorest 170 Chicopee v. Hampden 122 Child V. Coffin 135 Citizens' Mut. Fire Ins. Co. v. Sortwell 49, 51 City of Lowell i). County Commissioners 114 Commonwealth u. Boott Cotton Mills 102 V. Boston Water Power Co 121 w. Boston Wharf Co 118,121 V. Cary Improvement Co 121 V. Firemen's Insurance Co 102 V. Hamilton Manufacturing Co. . . 118, 120, 121, 202 «. Lowell Gas-Light Co 118,119,203 u. New-England Slate and Tile Co 125 V. People's Five-Cent Savings Bank 118 V. People's Savings Bank " 103 V. Sessions of Norfolk 31 V. Shaw 202 V. Smith 5, 94 V. Webster Bank 102 Conover u. Mutual Ins. Co 172 Cooper J). Hamilton Manufacturing Co 162 Corfield V. Coryell 108 Craig u. Gisborne 15 Crandall v. State 108 Crease v. Babcock 97 Dane v. Dane Manufacturing Co 137 Denny v. Richardson 145 Dow V. Clark 186 Durfeeu. Old Colony and Fall River R.R. Co. . . . 60,96 Durgin v. Lowell 165 LIST OP CASES CITED. XI Pass D wight V. Mayor, &c., of Boston Ill Dykers v. Allen 59 Ellis V. Pulsifer 11 Erabree v. Hanna 19 Emerson v. Lowell Gas-Light Co 205, 207, 208, 209 Emmons v. Providence Hat Manufacturing Co 12 Erickson v. Nesmith 135, 136, 152 Essex Co. V. Lawrence Machine Shop 154 Fall River Iron Works Co. v. Old Colony and Fall Kiver R.R. Co 23 Fay U.Noble 11,172 Ffooks V. South- Western Railway 99 Field V. Crawford 186 Fisher v. Essex Bank 55 Fiske D. Eldridge 173 Fitchburg R.R. Co. v. Eastern R.R. Co 31 Flint ». Gloucester Gas-Light Co 212 Flint u. Peirce 13,186 Fogg V. Griffin ; 72 Foster v. Essex Bank 72 Fuller V. Melrose 54 Fuller V. Wilson 72 Gale V. Eastman 159 Gerhard v. Bates 52 Oilman v. Eastern R.R. Co 163 Gilpin V. Howell 59 Gloucester u. County Commissioners 31 Gray v. Coffin 135 Gray v. Portland Bank 88 Hadley u. Russell 137 Halsey v. McLean 158 Hamilton Ins. Co. v. Hobart 99 Handrahan v. Cheshire Iron Works 140 Xll LIST OF CASES CITED. Paok Harding j>. Medway 31 Haven v. Adams 10 Haverhill Mut. Fire Ins. Co. v. Newhall 173 Hawes V. Anglo-Saxon Petroleum Co 150 Hazelton v. Allen 91 Hendee v. Pinkerton 7 Hersey v. Veazie 53 Hewett V. Swift 76 Hobbs V. Dane Manufacturing Co 64 Holly V. Boston Gas-Light Co 205 Holyoke Bank v. Goodman Paper Manufacturing Co. 64, 140 Howe V. Snow 93 Hunt V. Lowell Gas-Light Co 205, 206, 207, 209 Hutchins V. New-England Coal Mining Co. . . . 155, 158 Hutchinson v. Wheeler 191 Jefts D.York 11 Johnson v. Trinity Church 51 Kimball v. Comstock 74 Kingman v. Kelsie 11 Kingsman v. Kingsman 60 Knowlton V. Ackley 135, 140 Lanesborough v. County Commissioners 31 Lechmere Bank ». Boynton 44 Lee «. Templeton 127 Lester U.Webb 12,172 Lexington and West Cambridge R.R. Co. v. Elwell . . 170 Lincoln v. Taunton Copper Manufacturing Co 209 Loan Association v. Stonemetz 87 Mann v. Blanchard 74 Manufacturers' Ins. Co. v. Loud 124 Mason v. Cheshire Iron Works 64 Mayor and Aldermen, &c., v. Oswald 169 McKinney v. Whiting 2, 74 LIST OF CASES CITED. XIU Meadow Dam Co. v. Gray 98 Medbury v, Watson 74 Melledge i>. Boston Iron Co 12,172 Mellen v. Whipple 186 Merchants' Bank D. Stevenson 91,134,139,142 Middlesex Manufacturing Co. ». Lawrence . . . 169,171 Milton V. Mosher 12 Minot V. Paine 87 Moore v. Fitchburg K.E. Co 76 Nab B. Nab 60 Newcomb v. Reed 44, 45, 47 Newton v. Fay 58 New York and New Haven E.R. Co. k. Ketchum ... 87 Northern R.R. Co. v. Miller 98 Norton v. Huxley 74 Oldtown, &c., R.R. Co. v. Veazie 98 Oliver D. Cornwall Copper Mining Co 118,121 Oliver u. Washington Mills 102,118 Owens V. Dickenson 145 Palmer o. Lawrence Manufacturing Co 163 Paris V. Paris 90 Peabody u. Essex 127 Peabody v. Flint 52, 53, 54 Peele v. Phillips 155, 185 Perkins v. Union Button Hole, &c., Co - . , 190 Peyton v. Mayor 205 Portland Bank v. Apthorp 103 Regina v. White 202 Richardson v. Sibley 94 Ripley v. Sampson 135 Robbins v. Justices Superior Court 65 Robinson v. Smith 53 Rock V. Nichols 55 / XIV LIST OP CASES CITED, Paob Sargent v. Webster 49 Sawyer v. Pawners' Bank 86 Sewall V. Boston Water Power Co 57 Sherman v. Fall River Iron Works Co 210 Sherman v. Fitch 11 Sherman v. Tobey 32 Smith V. Hurd 52 Smith V. Poor 53 Snow V. Housatonic R.R. Co 163 Spooner v. Rowland 18 Stone V. Fenno 145 Tapley w. Butterfield 12 Tash V. Adams 54 Taylor v. New-England Coal Mining Co 141 Topping u. Biekford 172 Tufts V. Plymouth Gold Mining Co 51 Utley V. Union Tool Co 44 Vaupell V. Woodward 59 Veazie v. Williams 54 Wallace v. McConnell 19 Walworth v. Brackett 45 Ware v. Grand Junction Water Works 99 Watson V. Earl Charlemont 73 Wells V. Prince 74 Whipple V. Robbins 18, 19 White V. Piatt 59 Wiley V. Yale 93 Williams i>. Cheney 172 Williams «. Kenney 18 * Williams v. Marston 18 Williston V. Michigan Southern and Northern Indiana R.R. Co 76 Wilson V. Little 59 Witts V. Steere 90 CITATIONS FROM STATUTES, ETC. CONSTITnilON. United States. Paoe Art 4, § 2 107 Massachusetts. Ch. v., Section II. Ibid, Part First, VI 1 Ch. I., Section I., Art. 4 102, 118 Eevised Statdtes of Massachusetts. Ch. 109, § 5 18 Ch. 38, §§ 31, 25, 29, 30 139, 140, 142, 146, 167 Statutes of New Yoek. St. 1848, u. 40 159 Statutes of Massachusetts. St. 1808, c. 65 133 St. 1817, c. 183 133 St. 1821, c. 38 133 St. 1826, c. 137 133 St. 1829, c. 58 133, 140, 166 St. 1830, c. 81 183 St. 1838, c. 98 133 c. 177 133 St. 1851, c. 133 45, 179 u. 815 44, 65, 133, 140, 146 St. 1855, c. 140 43, 47 St. 1860, c. 121 194 c. 216 . . • 85 St. 1861, c. 167 117 «. 168 195-202 XVI CITATIONS FROM STATUTES. Page St. 1861, 0. 171 109 St. 1862, u. 40 20 c. 91 28,41 ^.179, §§7, 9 39 i;. 182 179 c. 210 175, 184, 185 c. 218 63-65, 132, 133, 137, 140, 148-150, 153-155, 178, 184, 185 St. 1863, c. 156, § 1 39 c. 231, § 2 . . '. 42, 182 c. 236 104 c. 246 184, 185 St. 1864, c. 201 55, 72, 129 c. 208 .. . 101, 110, 113, 117, 118, 122, 124, 125, 202 c. 219 148, 149 e. 296 195 St. 1865, c. 76, § 1 42, 182 c. 236 50, 168, 169 c. 245 29 c. 283 62, 100, 101, 110, 111, 115-117, 124-131, 191, 202 St. 1866, 0. 113 37 c. 122 80, 82, 83 c. 187 48 0. 196 126 c. 233 79 c. 272 36 c. 290 48, 213-218 c. 291 116, 126, 130 St. 1867, c. 36 . . ' 64, 65 c. 52 25,27 c. 131 48 c. 137, §§1,2 .• 17 c. 164 24 c. 264 217 c. 285 161, 162 c. 299 191 St. 1868, 0. 310 204 CITATIONS PEOM STATUTES. XVll Geneeal Statutes op MASSAcnnSETTS. Page Geu. Sts., 0. 2, § 8 27, 40 § 10 40 §11 41 §12 27,41 0. 3, S 5 42 § 7 2, 6, 74 ell 127, 128 e. 11, § 12 25, 111, 112, 117, 127 §15 127 §§45,46 129 u. 12, §§ 7, 10-12 69 c. 14, § 20 79 c. 15, § 35 29 c. 17, §§ 24-27, 30 34 i;. 26, § 30 162 c. 32, §§ 1, 4, 5 - 86 c. 39, §23 126 c. 42 162 C.43 30,34 c. 43, §§ 19, 20 31 §§19-46 30 §24 34 §40 31 §§ 53, 57, 58 • 35 c. 53, § 6 85 c. 66, §§ 1, 2, 4 180 u. 60, § 1 167 § 2 168 §§3-6 169 §§4^7 168 § 7 169 §§8-11 175 §§ 12, 13 176 §§14.-16 177 §§ 18, 19 146, 147, 175, 188, 184 §21 146,147,175 §22 175 § 23 148, 175, 182 §24 175 b XVni CITATIONS FEOM STATUTES. Pao« Gen. Sts. c. 60, §§ 27, 28 167 § 31 155 §§ 31, 32 140 § 86 167 §37 177,. 191 c. 61 216 c. 61, §§ 1, 2 179 §§3,4 181 § 5 . 182 § 6 175, 179, 183 § 7 182 § 8 175, 182, 183 § 9 175, 183 §11 185 § 12 175, 182, 188, 185 § 13 184 §14 191 §§ 15, 16, 17 193 § 18 86 § 19 192 C.63, § 2 171 § 11 '56 C.68, § 1 5 §§2,3 42 §.3 43 § 4 47 §§5,6 14 § 7 49 § 8 5 § 9 48 §§ 10, 11 54 §12 55 §§ 13, 14 58 § 15 65 §17 66 §18 70 §19 55 § 20 196 § 35 93 § 36 94 CITATIONS FROM STATUTES. XIX Paqi Gen. Sts. o. 68, §§ 36, 37 96 §§86-41 79 §§ 37-39 95 §40 62 §§40,41 96 c. 71, §§ 4, 25 86 c. 105, § 4 74 § 6 80,81 u. 108, § 3 85 §§7,8 69 §§ 81-35 85 c. 109, § 22 80, 82 c. 118 87, 38, 90 §§ 17, 89, 91 87 § 118 37, 39, 91 § 114 37, 91 §§ 115, 116 91 § 120 87 § 121 87 §§ 122, 124, 131 39 0. 128 88, 65, 68 § 5 14 §§12,30 15 §§ 59-61 67 §§ 104^106 » . . . . 17 c. 126 65 c. 127, § 24 14 c. 129 20 §§ 17, 27 142 §§ 46, 57, 83 20 c. 133, §§ 19, 28 24 §42 67 §§43-48 68 §§ 46, 47 69 c. 142, §§ 1, 10, 14, 28 18 c. 145, §§ 16-24 22 0. 148, §§ 19-22 31 §§ 19-2S 30 § 24 32 §§25-28 33 XX CITATIONS FROM STATUTES. Vaoe Gen. Sts. o. 149 165 c. 156, §§ 14, 28 23 c. 161, §§2-4 160 § 38 71 §§42-47 -71 §§49 70 §50 71 §51 71 §52 70,71 §§ 55, 56 181 c. 162, §§ 12, 13 73 c. 174, §§ 29, 80 24 LAW MANUFACTUEING COEPORATIONS. CHAPTER I. INTEODUCTOBT. By the Constitution of Massachusetts, it is made " the duty of Legislatures and magistrates, in all future periods of this Commonwealth, to encourage private societies and public institutions, rewards and immunities for the promotion of agriculture, arts, sciences, commerce, trades, manufactures, and a natural history of the country." And it is de- clared with equal explicitness, that "no man, nor corporation or association of men, have any other title to obtain advantages, or particular and exclu- sive privileges distinct from those of the community, than what arises from the consideration of services rendered to the public." ^ Although neither the Constitution nor legislative enactments of the Commonwealth afford any defini- tion in terms of the word Corporation, the declara- tions above cited may indicate clearly enough the ordinary force of the term as by them employed. 1 Constitution, c. V. Section n. Ibid, Part First, VI. 1 2 MANUPACTUBING CORPORATIONS. That force and meaning receive an exposition from the Legislature, in an enactment recognizing a far miliar principle of the common law, to the effect that " the word person may extend and be applied to bodies politic and corporate."^ While it is no part of the design of this work to follow out, in all its leadings, a constructive meaning which would engraft upon the special topics under consideration a large part of the statute law of the Commonwealth, it may yet be well to recollect that in very many instances the wider and more liberal meaning is equally germane and legitimate with the narrower and more restricted one. In the following pages it is proposed to examine the rules of law, applicable in this Commonwealth, — (a) To private, or non-municipal corporations in gen- eral. (J) To corporations organized for business purposes, and having a stock divided into shares. (c) To mariufacturing corporations in general. (d) To manufacturing corporations under special char- ter. (e) To manufacturing corporations created otherwise than by charter. The above arrangement aims to comprise, under four heads, the laws of Massachusetts which con- cern manufacturing corporations. First, Those which belong to them in common with all corporations. 1 Gen. Sts. c. 3, \ 7, Thirteenth; MoKinuey v. Whiting, 8 Allen, 207. INTEODUCTORY. 3 Second, Those which are applicable to them in common with aU corporations organized for business purposes, or having a stock divided into shares. Third, Those which affect them as manufacturing cor- porations simply. Fourth, Those which have respect to the mode of their creation, whether by legislative enactment, or otherwise. MANUPACTUEING CORPORATIONS. CHAPTER II. CORPORATIONS IN GENERAL. 1. General powers of corporations. 2, 3. Corporate seals. 4, 5. Execution of corporate instruments. 6. By-Laws. 7. Meetings. 8. Actions by and against corporations, how brought. 9. Attachment and summons. 10. Dissolution of attachment. 11, 12. Trustee process. 13. Examination of corporate officers by interrogatories. 14, 15. Writs of quo warranto, certiorari, mandamus, etc. 16. Indictment and judgment thereon. 17. Executions. 18. Personal property deposited with corporation as an accumu- lating fund. 19. Collection of taxes from delinquent corporations. 20. Notice of petitions to Legislature affecting corporations. 21. Interest on loans to the State. 22-27. General provisions as to construction of roads and land im- provements. 28. Liabilities of corporations bringing foreigners into the State. 29, 30. Insolvent corporations. 1. All corporations, where no other provision is specially made, may, in their corporate name, sue and be sued, appear, prosecute, and defend to final judgment and execution ; have a common seal, which they may alter at pleasure ; elect in such manner as they determine aU necessary officers, fix their com- pensation, and define their duties and obligations ; and make by-laws and regulations consistent with C0EP0KATI0N8 IN GENERAL. 5 the laws of the State, for their own government, the due and orderly conducting of their affairs, and the management of their property. Every corporation may convey lands to which it has a legal title.^ In regard to the use by corporations of a corporate seal, it is said by the Court, in the case of Common- wealth V. Smith, 10 Allen, 448, that "a corpora- tion having the capacity to sue and be sued, the right to make contracts under which it may incur debts, and the right to make and use a common seal, a contract under seal is not only within the scope of its powers, but was originally the usual and peculiarly appropriate form of corporate agree- ment." 2. The subject of corporate seals, and what is requisite to constitute such a seal at common law, is very fully discussed in the case of Bates v. Bos- ton ^ New -York Central Railroad Company, 10 Allen, 251, in which the chief question at issue was, whether a certain corporate obligation for the payment of money, which bore " a printed impres- sion in the form of a seal," made " at the same time, and by the same agency, as the printing of the certificates," was or was not a corporate ob- ligation under seal in such a sense as to entitle it to the benefit of the exception in the Statute of Frauds as to contracts " under seal." The Court, after referring to the common-law doctrine, that,, to constitute a seal, there must be a wafer or wax, or some other tenacious substance capable of re- ceiving the impression of a seal made upon it, say, 1 Gen. Sts. o. 68, §§ 1, 8. b MANUFACTUEING CORPOBATIONS. that " the practice that has recently prevailed, of making a printed impression purporting to be a seal on contracts of corporations as a substitute for the common-law seal, has with us no legal foundation or authority, except so far as it has been sanctioned by our statutes.^ The attempt to make a substi- tute for the common-law seal, in the present in- stance, was a greater departure than that of impress- ing the actual seal of the corporation upon paper alone. This was the mere printing of a facsimile of the seal at the same time, and by the same agency, as the printing of the certificates, to be afterwards signed by the President and Treasurer. As to the seal, nothing was left to be done by the officers of the corporation, who alone were authorized to affix the corporate seal. This practice is certainly in derogation of the whole theory of sealing contracts. It was the fact that the obligor did two independent acts ; first, that of signing, and secondly, that of sealing, that in the theory of the law, gave so much more solemnity to the contract, and imported so much greater deliberation, and therefore entitled it to be enforced without any proof of a particular con- sideration, or recital that it was for value received, as well as extended its vitality beyond the period of six years, and excepted it from the bar incident to all personal contracts which were merely signed by the promisor." The Court adds, " that in many of our sister States a difierent rule prevails as to what is necessary to constitute a sealed contract from that which has been uniformly held in Massa- i Gen. Sts. o. 3, § 7, Fiftemth. COEPOEATIONS IN GENERAL. 7 chusetts. In some of them, this is founded upon statute provisions ;• and in others, upon long usage, recognized by judicial decisions. But in the absence of any such statute or usage, the scroll, whether made by a pen or types, does not change the char- acter of the instrument from a simple contract to one under seal, or give it the legal effect of import- ing a consideration when none is expressed, or ex- tending the statute of limitations from the period of six to twenty years." ^ 3. In the case of Sendee v. Pinkerton, 14 Allen, the corporate seal was impressed upon the paper on which a mortgage was written, by means of a die. In the language of the Court, " It was a dis- tinct and visible impression by the corporate seal upon and into the substance of the paper on which the conveyance was written. This Court has always been, and still is, disposed to recognize and preserve inflexibly the distinction between sealed and un- sealed instruments. In this Commonwealth, a scroll has never been treated as a seal. And a facsimile of the seal of a corporation printed with ink on the blank form of an obligation at the same time when the blank is printed, and by the same agency, has been recently, on full consideration, decided to be a mere scroll, and not a valid seal. Bates v. Boston ^ New-Tork Central Railroad Co., ante. In that case, there was nothing more than a scroll made with types, which differed from the scrolls printed on the legal blanks in general use in some of the United States in no other respect than its resemblance to ^ Sea the citation of common and statute law in this case. 8 MANUPACTUBING COEPOBATIONS. the common seal of the corporation. A printed scroll is no better than one made by pen and ink. And tlie fact, that it was a facsimile of the device of the corporate seal, did not change its character, and convert it from a scroll into a seal. No defini- tion of a seal has ever been made, and none can be suggested, liberal enough to include the method adopted in that case which would not destroy the distinction uniformly adhered to in the usages and judicial decisions of this State. If we should pro- nounce every scroll a seal, we should speedily be called upon to take the next step of pronouncing every flourish to be a scroll ; and nothing would remain of the ancient formality of sealing. Such a course would not only be an unwarrantable judicial innovation upon the common law, but would oblit- erate the important practical distinction between two classes of instruments of different degrees of solemnity, one of which does, and the other does not conclusively import a consideration ; one of which remains binding for twenty years, while the other is by the statute subject to a limitation of only six years. No case has been found where such a printed device has been regarded as a seal by any Court which preserves the distinction between seals and scrawls or scrolls. On the other hand, such an impression of a seal as the one now before us has never been held insufficient ; while similar seals have been decided to be valid in numerous English and American cases, without as well as with the aid of statute provisions. " In the present instance we have a double im- CORPORATIONS IN GENERAL. 9 pression upon a tenacious substance, made for the express purpose of solemn authentication. And after our own courts have allowed wafers instead of wax, and paper with gum or mucilage instead of wafers, there seems little reason why we should hesitate also to allow the sufficiency of impressions of a corporate seal on the paper itself. The extent to which this practice has prevailed among corpora- tions ; the fact, that the seals of all our own Courts have been, from an early period, of the same descrip- tion ; the sanction of numerous decisions in other States and in the federal Courts ; the convenience and unobjectionable character of the usage ; are ar- guments in its favor too powerful to be resisted, in the absence of any decisive authority to the con- trary. " To maintain the distinction between sealed and unsealed instruments, the line must be drawn some- where ; and we are satisfied to draw it so as to ex- clude written or printed scrawls, scrolls, or devices, but so as to include actual and permanent impres- sions upon the substance of the paper of the com- mon seal of the corporation." 4. The proper formalities to be observed in the execution of corporate instruments is a topic of much importance, the consideration of which will recur in another place. It may not, however, be amiss, in connection with the subject of corporate seals, to glance at a few of the principles, the ob- servance or neglect of which serves as a criterion in distinguishing the deed of a corporation from that of an individual. 10 MANTJPACTUEING CORPORATIONS. A corporation deed, executed in manner following, " ' In testimony whereof said party of the first part have caused these presents to be signed by their President, and their common seal to be hereto af- fixed, A. B., President,' (Seal,) is valid, because it is expressed to be the deed of the corporation to which they have caused their seal to be aflBxed, and the name of their President to be signed. It is to be distinguished from such a form of execution as the following: 'In. witness whereof, I (the Treasurer), in behalf of said company, and as their Treasurer, have hereunto set my hand and seal ; ' thus making it his deed, sealed with his seal in behalf of the . principal, instead of the deed of the principal, sealed with their seal. The first form of execution conveys the property of the corporation, because it is their deed ; the second does not convey their property, because it is the deed of the individual who signs it." ^ But no individual liability would be incurred by a corporate ofiicer in executing a bond with sureties in the form following ; neither could an action be maintained, alleging a joint execution of such bond by the ofiicer and the sureties, the liability of the sureties being dependent upon the validity of the bond as against the corporation, as being legally executed by said corporation, a question on which the Court gives no opinion : " Know all men by these presents, that the A. B. Company, by C. D., President of said company, as principal, and B. F. and G. H., as stireties, are held and firmly bound," 1 Haven v. Adams, 4 Allen, 80; Brinley v. Mann, 2 Cnsh. 337; Abbey ■u. Chase, 6 Cush. 54. CORPORATIONS IN GENERAL. 11 etc. " To which payment well and truly to be made, we do bind ourselves, our heirs, executors, and ad- ministrators, and every of them, firmly by these presents. Sealed with our seals. C. B., President. (Seal.) E. F. (Seal.) G. H. (Seal.)" i 5. Greater latitude, however, seems allowable in the form of executing corporate instruments not un- der seal, or not requiring a seal, especially where the internal evidence as to their purport is full and clear. This, with other connected and collateral points, is set forth in the case of Sherman v. Fitch, 98 Mass., where it was held, that a mortgage of personal property belonging to a corporation, " which names the corporation as the party making it, describes the machinery as upon the premises, and in the use and ownership of the corporation, provides for payment by the corporation, and continued possession of the property until default, — was upon its face the con- tract of the corporation," although executed as fol- lows : " In testimony whereof, I, the said , have hereunto set my hand and seal, this nineteenth day of January, in the year of our Lord one thou- sand eight hundred and sixty-five, A. B., President of the C. D. Corporation," and seal. " It cannot be made the contract of A. B.," say the Court, " by any form of signature whatever." ^ The above form of execution is held to be consistent with this con- struction, and in form a good execution by the corporation of a simple contract.^ The seal of A. B. 1 Ellis «. Pulsifer, i Allen, 165. 2 Kingman v. Kelsie, 3 Cush. 339; Jefts v. York, 4 Cash. 371. 8 Fay V. Noble, 12 Cush. 1. 12 MANUFACTURING CORPORATIONS. affixed, " does not make the instrument his contract ; neither does it make it any the less the contract of the corporation.^ If a seal were essential to the validity of the mortgage, it would fail for the same reasons. If the construction were doubtful upon the face of the instrument, the doubt might be re- solved by ascertaining with whose seal it had been executed. But no such conditions exist here. No seal was necessary. As a sealed instrument, it could not be construed as the contract of either A.* B. or the C. D. Corporation. But if the seal be disregarded, as it may be, the contract will operate as it was clearly intended, as the mortgage of the corporation." In regard to the authority of A. B. to execute the mortgage in behalf of the corporation, it is said, that " it is not necessary that the authority should be given by a formal vote. Such an act by the Pres- ident, and general manager of the business of the corporation, with the knowledge and concurrence of the Directors, or with their subsequent and long con- tinued acquiescence, may properly be regarded as the act of the corporation. Authority in the agent of a corporation may be inferred from the conduct of its officers, or from their knowledge and neglect to make objection, as well as in the case of individuals." ^ It was further held, that " if the validity of the mortgage were to depend entirely upon subsequent 1 Abby V. Chase, 6 Cash. 64; Tapley v. Butterfield, 1 Met. 615 ; Milton V. Mosher, IT Met. 244. 2 Emmons v. Providence Hat Manuf. Co. 12 Mass. 237 ; Melledge v. Boston Iron Co. 5 Cush. 158; Lester v. Webb, 1 Allen, 34. COEPOEATIONS IN GENERAL. 13 ratification, such ratification would be efiective, not- withstanding the recording of the mortgage. No new record would be necessary. The ratification relates back." 6. In connection with this brief summary of the rights and powers of corporations in general, it may suf&ce to quote, in respect to By-Laws, from the opin- ion delivered in the case of Flinty. Peiree, 98 Mass., (which will be more fully cited hereafter), to the effect, that " the office of a By-Law is to regulate the conduct and define the duties of the mem- bers towards the corporation and between them- selves. So far as its provisions are in the nature of contract, the parties thereto are the members of the association as between themselves, or the cor- poration upon the one side, and its individual mem- bers upon the other. The right of any third party, stranger to the association, to establish a legal claim through such a By-Law, must depend upon the gen- eral principles applicable to express contracts." 7. When, by reason of the death, absence, or other legal impediment of the officers of a corporation, there is no person duly authorized to call or preside at a legal meeting, any justice of the peace in the county where the corporation is established, may', on a written application of three or more of the members, issue a warrant to either of them, direct- ing him to call a meeting, by giving such notice as had been previously required by law ; and the justice may, in the same warrant, direct such person to preside at the meeting until a Clerk shall be duly chosen and qualified, if no officer is present legally 14 MANUFACTURING CORPORATIONS. authorized to preside. A corporation, when so as- sembled, may elect officers to fill all vacancies, and act upon such other business as may by law be transacted at a regular meeting.^ 8. When one of the parties to an action is a cor- poration of any other description than a county, city, town, school district, or parish, the action may be brouglit in any county in which such corporation has an established or usual place of business, or has held its last annual meeting, or usually holds its meetings ; or, if the other party is a natural person, in the county where such person lives.^ An action on a note, bond, contract, or other liability, made to or with the Treasurer of a corporation, may, after his removal, resignation, or death, be commenced ; or, if before commenced, may be prosecuted by his successor, as it might have been by the person with whom the contract was made.^ 9. In actions against corporations, and in other cases in which goods and estate may be attached, but in which the defendant is not liable to arrest, the writ of attachment and original summons may be combined in one, requiring the officer to attach the goods and estate, and to summon the defendant. If the corporation be other than a county, city, town, precinct, parish, religious society, or school district, or the proprietors of common and undivided lands or general fields, or wharves lying in common, the summons shall be served by leaving the original, or copy, as the case may be, with the Clerk, Cashier, 1 Gen. Sts. c. 68, §§ B, 6. > Gen. Sts. o. 123,' § 5. 8 Gen. Sts. o. 127, § 24. CORPORATIONS IN GENERAL. 15 Secretary, Agent, or any other officer haying charge of its business ; and if there is no such officer found within the county, the summons may be served on any member of the corporation.^ But such a service must be upon an " officer " or " member " of the corporation who is an adverse party in the suit. Thus, in a suit instituted by A. B., President of the C. D. Manufacturing Com- pany, the officer's return certifying that he " did not find a Clerk, Secretary, Agent, or any other officer having charge of the business of the within- named C. D. Manufacturing Company within his precinct, and therefore left an attested copy of the writ with A. B., the President and a member of said C. D. Manufacturing Company," it was held, that' a service thus made " was to no essential purpose a service on the corporation as defendants ; that the action might as well have proceeded without any service of the writ as on one of that character," and that a default entered against th'e corporation under such circumstances will not only be stricken off, but would not have been allowed to be entered, had the attention of the Court been previously called to these facts ; and that, " if there were no other agent or officer of the corporation except the plaintiff, it would seem to have been the proper course to serve the process on some member of the corporation, and that member some other person than the plain- tiff." 2 1 Gen. Sts. u. 123, §§ 12, 30. 2 Buck 1;. Ashuelot Manufacturing Company, 4 Allen, 367 ; Craig v. Gisbome, 13 Gray, 270. 16 MANUFACTUEING COEPOBATIONS. 10. Any person or corporation whose goods or estates are attached on mesne process in a civil action, may, at any time before final judgment, dis- solve such attachment, by giving bond, with sufiicient sureties, to be approved by the plaintiff or his at- torney, in writing, or by a master in chancery, with condition to pay to the plaintiff the amount, if any, that he may recover within thirty days after the final judgment in such action. No sureties shall be deemed sufficient unless satisfactory to the plaintiff, or it is made clearly to appear to the master that each one, if there are only two, is worth, above what will pay his debts, a sum equal to that for which the attachment is laid ; or, if there are more than two, that they are together worth twice such sum. Before such bond is approved by a master, the party whose goods or estate are attached, or some one in his behalf, shall make application in writing to a master, specifying therein the names and places of residence of the persons proposed as sureties. The same notice of the time and place of the hear- ing thereon shall be given to the plaintiff or his attorney, as is required in taking depositions ; but the plaintiff or his attorney may, in writing, waive such notice, or may approve the bond at any time. Instead of dissolving the attachment in the manner aforesaid, the defendant may at any time apply in writing to the officer who has made such attach- ment, to have the value of the whole or any part of such property appraised by appraisers, who shall thereupon be appointed and qualified in the same manner as is provided by law with regard to the ap- COEPORATIONS IN GENERAL. 17 pointment and qualification of appraisers of perish- able property attached, and shall examine the at- tached property, or the specific part thereof to be appraised, and appraise the same, according to the best of their skill and judgment, at the value thereof in money ; and after the value is so determined, the defendant may dissolve the attachment, so far as it embraces the property so appraised, by giving bond with sufficient sureties, as aforesaid, to be approved by the plaintiff, or by a master in chancery, with condition to pay the plaintiff, within thirty days after final judgment in said action in favor of the plaintiff, the value of said property so appraised, or so much thereof as may be necessary to satisfy such judg- ment. The fees of the master for approving a bond shall be one dollar for the hearing and decision, and fifty cents for the citation. If the attachment is dissolved, such fees shall be taxed in the defendant's costs, if he prevails in the suit.^ 11. Any person or corporation may be summoned as trustee of the defendant in a personal action, brought either in the Superior Court or the Supreme Judicial Court, the said trustee-process not being available in actions of replevin, actions of tort, for malicious prosecution, for slander, either by writing or speaking, and for assault and battery. Corpora- tions summoned as trustees may appear and answer by their Cashier, Treasurer, Secretary, or such other officer as they shall appoint, or as the Court shall require to attend for that purpose. The answer and examination on oath of such officers or persons shall 1 Gen. Sts. c. 123, §§ 104, 106, 106 j St. 1867, c. 137, §§ 1, 2. 2 18 MANUFACTURING COEPORATIONS. be received as the answer and examination of the corporation. If the officer, agent, or other person so appearing and answering, shall, upon his exam- ination on oath, knowingly and wilfully answer falsely, he shall, out of his own goods and estate, pay to the plaintiff in the trustee-process, or to his executors or administrators, the full amount due on the judgment recovered therein, with interest there- for, to be recovered in an action of tort ; and he shall, moreover, on conviction thereof upon indict- ment, be adjudged guilty of perjury .^ The rule, that " payment in good faith, and with- out knowledge of the service of trustee-process on the part of the party so paying, will discharge the trustee, although in fact service had been made in a legal and proper manner previous to the time of such payment, is applicable, upon principle," with equal propriety and force where service is made upon one agent or officer of a corporation, and payment is afterwards made in good faith by another agent or officer, without knowledge on his part of such ser- vice.^ 12. In the case of American Bank v. Rollins, 98 Mass. (a case which is judicially said to depend upon the principles determined in Whipple v. Boh- ibns, 98 Mass.), a corporation was summoned as trustee while there was pending against it, in favor of the defendant EoUins, an action in another 1 Gen. Sts. o. 142, §§ 1, 10, 14. 2 Kev. Sts. c. 109, § 6; Gen. Sts. c. 142, § 28; Williams v. Kenney, 98 Mass.; Williams i;. Marston, 3 Pick. 65; Spooner v. Rowland, 4 Allen, 485. CORPORATIONS IN GENERAL. 19 State. The pendency of this prior suit was relied upon by the corporation as a reason why it should not be charged as trustee in this Commonwealth. The opinion of the Court was as follows : — " A trustee-process pending in one State has been held a good defence to a subsequent action brought in another jurisdiction by the defendant in the first suit against his debtor, the trustee. This is Emhree T. Sanna, 5 Johns. 100. A subsequent trustee- process in one State is not pleadable puis darrein continuance to defeat an action previously commenced against the trustee by his creditor in another State.^ Payment by one charged as trustee on a judgment recovered in one State, when an action was pre- viously pending in another in favor of the defendant in the trustee-process against the trustee, cannot be made available as a defence to the action first instituted. This is Whipple v. Bobbins. These ad- judications are difierent applications of the same principles. A trustee-process is in the nature of a proceeding in rem. It is a sequestration of the debt due from the trustee, in order that it may be devoted to the payment of one to whom the trustee's creditor is himself indebted. After its commencement, the trustee is not subject to an action by his creditor. The only exception is, where both suits are within the same jurisdiction, and under a system of pro- cedure which regulates both so as to afford the trustee complete protection against a double liability. If the trustee-process is prior in time, it is a de- fence to a subsequent action against the trustee in 1 Wallace v. McConnell, 13 Pet. 136. 20 MANUFACTURING CORPORATIONS. another State. The doctrine constitutes an impor- tant exception to the ordinary rule, that lis pendens in a foreign court is not a good plea. It is essential to justice, and to the protection of the party sum- moned as trustee, who might otherwise be harassed and imperilled without any fault of his own." 13. The President, Treasurer, Clerk, or any Direc- tor or other officer of a corporation which is a party to a suit, may be examined by the opposite party by means of interrogatories, in the same manner as if said officer were himself a party to the suit.i ^\\ precepts, answers, replications, or other papers re- quiring the signature or oath of the party, may be signed or sworn to in behalf of the corporation by some officer or agent thereunto specially authorized. Examination by means of interrogatories may also be had in suits in equity, the complainant and re- spondent being allowed, at any time after the filing of the answer, to file the said interrogatories in the Clerk's office, for the discovery of facts and docu- ments material to the support or defence of the suit, to be answered on oath by the adverse party in the same manner and subject to the same restrictions and regulations as are now provided by General Statutes, c. 129, with reference to interrogatories in civil actions. If a party neglects or refuses to ex- punge, amend, or answer, according to the requisi- tions of said chapter, the bill shall be dismissed, or taken as confessed, or such other order or decree may be entered as the case may require.^ ^ For the mode of conducting examinations by interrogatories, see Gen. Sts. c. 129, §§ 46-57. 2 Gen. Sts. c. 129, §§ 50, 83; St. 1862, u. 40. CORPORATIONS IN GENERAL. 21 14. Any person whose private right or interest has been injured or is pnt in hazard by the exer- cise, by any private corporation, or persons claiming to be a private corporation, of a franchise or privi- lege not conferred by law, whether such person is a member of such corporation or not, may apply to the Supreme Judicial Court for leave to file an information in the nature of a quo warranto ; which application may be made and heard at a law or jury term in any county where the Court is in session. Leave to file the same shall be granted by the Court (order having been taken for a summary hearing of the parties), if there appears probable cause to believe that the party complained of has exercised a franchise or privilege not conferred by law, thereby injuring or putting in hazard the pri- vate right or interest of the complainant ; and upon giving leave to file such information, or at any time before final judgment, the Court may issue a writ of injunction, restraining the defendant, and its managers, servants, and agents, from exercising the franchise or privilege in question, until the further order of the Court. The information shall be filed in the county where the defendant has its principal place of business ; a copy of the information, with an order of notice returnable, and to be served when and as the Court may direct, shall be served on the defendant and on the Attorney-General. The Attorney-General, when he has good reason to believe there has been a usurpation of a franchise or privilege not conferred by law, may intervene and demand a judgment of fine and forfeiture. In such 22 MANUFACTURING CORPORATIONS. case, he shall hare the control of all future pro- ceedings, and the Court shall enter such judgment as the principles of the common law may require, but the complainant shall not be responsible for costs. But if the Attorney-General has not intervened, and it is determined that the defendant has exercised a franchise or privilege not conferred by law, no judg- ment of forfeiture shall be entered ; but the judgment shall be, that the corporation, or the persons claim- ing to be a corporation, be perpetually excluded from such franchise or privilege, and that the Direc- tors, managers, or agents, by whom the usurpation was made, pay the costs, to be recovered by the com- plainant. If it is adjudged that the defendant has not exercised any franchise or privilege not con- ferred by law, the defendant shall recover against the complainant the same costs as are allowed in actions at law. It is to be understood, that none of the aforesaid provisions aifect the duty of the Attorney-General to proceed, ex officio, in all cases in which he might have so proceeded by law before the adoption of the General Statutes, nor deprive any person of the right to file an information respecting the election or admission of an officer or member of a corporation.^ 15. " The remedy by a quo warranto is not adequate and complete, not being available to a party as a matter of right ; he cannot obtain relief at all, un- less he can first obtain leave of the Court to com- mence the proceeding by filing an information. Furthermore, the proceeding affords no remedy for 1 Gen. Sta. c. 145, §§ 16-24. CORPORATIONS IN GENERAL. 23 damages already s.uffered by the wrongful acts of the defendants, inasmuch as the only judgment which the Court have power to enter under a quo warranto prosecuted by a private individual is per- petually to exclude a corporation from the exercise of the unlawful privilege of franchise. Allegations of injury to private rights and property by a cor- poration are cognizable and relievable by proceedings in equity." ^ In cases where application is made at the suit, or in behalf of a private person, for a writ of certiorari, mandamus, quo warranto, or other like process, the Court may, in its discretion, allow costs to any person who appears and objects thereto ; and may award judgment and execution against the person by whom, or in whose behalf, the application is made. When a corporation is entitled to costs, an allowance shall be made for travel, as in other cases; and the travel shall be computed from the place where the corporation is situated, if it is in its nature local; otherwise, from the place in which its business is chiefly or commonly transacted.^ 16. When a corporation, indicted under the stat- utes of this State, fails to appear after being duly served with process, its default shall be recorded, the charges in the indictment taken to be true, and judg- ment shall be rendered accordingly ; upon which rendering of judgment upon any such indictment against a corporation, the Court may issue a warrant of distress to compel the payment of the penalty 1 Fall River Iron Works Co. «. Old Colony & Fall River E.R., 5 Allen, 221 ; Boston & Lowell R.R. v. Salem & Lowell R.R., 2 Gray, 1, 22. 2 Gen. Sts. u. 156, §§ 14, 28. 24 MANUFACTURING CORPORATIONS. prescribed by law, together with costs and interest. If any indictment, duly found and returned within the time limited by law against any corporation, to recover a pecuniary penalty, is abated or otherwise avoided or defeated by reason of, or for any matter of form ; or if, after a verdict against such corpora- tion, judgment is arrested, or if a judgment against such corporation is reversed on writ of error, a new indictment for the same cause may be found and filed within one year after the abatement of the former indictment, or after the reversal of the judg- ment as aforesaid.^ 17. Executions against corporations, when levied upon any corporate property, shall be levied in the same manner as other executions are levied, except in the case of banking corporations, and of turnpike or other corporations authorized to receive toll. If an execution against a corporation is satisfied in whole or in part by service or levy on the person or property of any member thereof, and the property levied on, or damages for service or levy, are subse- quently recovered by such member from the ofiicer or judgment-creditor, the creditor may have a writ of scire facias on his judgment, and shall thereupon be entitled to a new execution for the sum remain- ing justly and equitably due to him.^ 18. Personal property, placed in the hands of a corporation or individual as an accumulating fund for the future benefit of heirs or other persons, shall be assessed to such heirs or persons, if within the 1 Gen. St3. c. 174, §§ 29, 30; St. 1867, e. 164. 2 Gen. Sts. c. 133, §§ 19, 28. CORPORATIONS IN GENERAL. 25 State; otherwise to the person so placing it, or his executors or administrators, until a trustee is ap pointed to take charge of such property or the in- come thereof.^ 19. When any tax remains due from any corpora- tion, except municipal corporations, to the Common- wealth, for the term of ten days after notice given through the mail, by the Treasurer of the Common- wealth to the Treasurer or other financial agent of such corporation, that such tax is due and unpaid, the Treasurer of the Commonwealth may issue his warrant, directed to the Sheriff or his deputies of the County in which such corporation has its place of business, commanding the collection of such tax. Such warrant may be substantially in the form of those now issued by the assessors of towns, except as is hereinafter provided ; and the officer to whom the same may be delivered for service, shall proceed in the manner in which collectors and others serving such warrants are authorized to proceed. Such warrants shall not run against the body of any per- son, nor shall any property of such delinquent cor- poration be exempt from seizure and sale thereon. The officer having such warrant shall collect • such tax, and interest upon the same, at the rate of twelve per centum per annum, from the time when such tax became due, and shall be entitled to collect and receive for his fees the sum which an officer would be entitled by law to receive upon an execution for a like amount. He shall also collect one dollar for the warrant, which shall be paid over to the Treasurer of the Commonwealth.^ 1 Gen. Sts. o. 11, § 12, Sixth. a St. 1867, c. 52. 26 MANUFACTURING CORPORATIONS. Any corporation feeling aggrieved by the exaction of the said tax, or of any portion thereof, may, within six months from the date of the payment of the same, whether such payment be after or before the issue of the warrant herein provided for, file a petition to the Supreme Judicial Court, in the nature of a petition of right, setting forth the amount of the tax, and costs thereon so paid, the general legal grounds, if any, upon which it is claimed such tax should not have been exacted, and specifically the grounds in fact, if any, upon which it is so claimed. Said petition shall be entered and heard in said Court, in the. County of Suffolk. Service of the same shall be made upon the Treasurer and the Attorney-General of the Commonwealth, in the same manner as a writ of original summons is now served upon an individual. The proceedings on such petition shall conform, as near as may be, to the proceed- ings" in equity causes in said Court. No such peti- tion shall be brought, in order to procure the abate- ment of any tax, except where it is claimed that such tax is in part assessed upon property not legally subject to taxation. If the Court, upon a hearing or trial, shall adjudge that said tax and the costs thereon have been illegally exacted, a copy of the judgment or decree in the cause shall be transmitted by the Clerk of the Court to the Governor of the Commonwealth, and the Governor shall thereupon draw his warrant upon the Treasurer of the Com- monwealth for the amount adjudged to have been unjustly exacted, with interest and costs to be taxed by the Clerk of the Court, as in equity causes ; and CORPORATIONS IN GENERAL. • 27 the Treasurer shall pay the same without any further act or resolve making appropriation therefor. And so much thereof as may have been paid out of the Treasury of the Commonwealth to any city or town, may be deducted and set off from and against any sum afterwards due and payable to such city or town. The manner of collection herein provided for shall be in addition to those now provided by law. The remedy herein provided by petition shall take the place of any and all actions which might other- wise be maintained by such corporation on account of the assessment and collection of such tax, and shall be the exclusive remedy .^ 20. Whoever intends to present to the General Court a petition affecting the rights and interests of individuals or private corporations, shall give notice thereof, by publishing a copy of the petition four weeks successively in some newspaper published in the counties where such individuals reside, or in which such corporations are established ; the last of said publications to be at least fourteen days be- fore such session of the General Court. Such news- paper shall be designated by the petitioners, and approved by the Secretary of the Commonwealth. Proof of said publication may be made by the ai£- davit of the printer or publisher of the newspaper aforesaid, which affidavits, and the petitions to which they relate, shall be presented to the General Court within the first ten days of the session .^ Whenever it shall appear, upon satisfactory evi- 1 St. 1867, c. 52. 2 Gen. Sts. c. 2, §§ 8, 12. 28 . MANUPACTUBING CORPORATIONS. dence under oath, that the notice required to be given as aforesaid was omitted to be given by reason of any unavoidable accident, without default on the part of the petitioner or applicant, or that the sub- ject-matter of the petition or application did not ad- mit of such notice as above prescribed, the notice shall be accounted sufficient, if given for the period of time named as aforesaid, as soon as such omission shall have been discovered by the petitioner or applicant, or within a reasonable time after such subject-matter shall have arisen or become known : provided, that such petition or application be presented within thirty days after the first day of the assembling of the Legislature. Whenever any petition shall be presented within said period of thirty days, and it shall appear, upon satisfactory proof, that all the parties having rights or interests in the subject- matter thereof have waived notice, or have received satisfactory notice thereof, by writing signed by them, no other or further proof of notice shall be required. The form of proof of publication of no- tice, by affidavit of the printer or publisher of the newspaper containing the same, shall not be con- strued to exclude any other equally satisfactory evi- dence thereof.^ The Secretary of the Commonwealth shall, on the first Wednesday of January in each year, publish in the newspaper wherein are published, pursuant to law, the general laws and other official information, a complete list of all petitions intended to be pre- sented to the General Court of that year of which 1 St. 1862, 0. 91. CORPORATIONS IN GENERAL. 29 he may have had official notice ; in which list shall be stated the name of the leading petitioner in each case, the objects of the petition, the name and loca- tion of the newspaper approved by him for publi- cation, and the date of such approval. ^ 21. The interest on temporary loans to the State from banks, corporations, or individuals, shall be paid semi-annually, on the first days of April and October in each year.^ 22. Any town, city, person, company, or body corporate, having the ownership of low lands, lakes, ' swamps, quarries, mines, or mineral deposits, that, on account of adjacent lands belonging to other persons, or occupied as a highway, cannot be ap- proached, worked, drained, or used in the ordinary manner, without crossing such lands or highway, may be authorized to establish roads, drains, ditches, tunnels, and railway to such places in the manner hereinafter provided. The party desiring to make such improvements shall file a petition therefor with the County Com- missioners within whose jurisdiction the premises are situated, setting forth the names of the persons interested, if known to the petitioner, and also in detail the nature of the proposed improvement, and the situation of the adjoining lands ; which petition shall be accompanied with a bond, satisfactory to said Commissioners, for the payment of expenses incurred in the prosecution of the application. The Commissioners, at their first meeting after the 1 St. 186B, <;. 245. 2 Gen. Sts. a. 15, § 35. 30 MANUFACTURING COBPOEATIONS. filing of the petition and bond, shall give at least three weeks public notice of the time and place of meeting to consider the petition, in some newspaper printed in the County; and if there is no such paper, in a newspaper printed in an adjacent County ; they shall further give notice to the Mayor of any city, and the Clerk of any town, in which the prem- ises are situated. They shall meet at the time and place appointed ; and, after examination, inspection, and the hearing of evidence, shall determine whether the improvement prayed for is necessary, and if so, shall proceed to lay out and establish the same in such manner as shall do as little injury as practica- ble ; and shall assess the amount of damages which, in their opinion, the proprietor of the adjacent lands will sustain. They shall apportion the damages equitably among all parties to be benefited, having regard to the benefits each will receive ; and such award shall be deemed conclusive upon each of the parties charged with such payment, unless an appeal is taken within the period of one year.^ 23. Any party aggrieved by the award may appeal therefrom, and thereupon like proceedings shall be had as are provided in General Statutes, c. 43, for persons aggrieved in the laying out of highways.^ The jury to which the said aggrieved party is entitled, under the provisions of the said chapter, although without authority to revise the judgment of the Com- missioners as to the common convenience and neces- sity of laying out or altering the way in question, 1 Gen. Sta. «. 148, §§ 19-23. 2 gee Gen. Sts. c. 43, §§ 19-46. CORPOEATIONS IN GENERAL. 31 " may make any alterations that are prayed for be- tween the termini, so far as they shall think them necessary or proper. This is all the authority that is given to them upon this subject, and it is t'o be ex- ercised only within the limits to which it is restricted. The phrase ' alterations between the termini,' in the meaning of the words in their ordinary use, dis- tinctly imports a change in the course or direction of the road, and not in the mode of its construction, or in the place and manner in which it is to be built and finished. In respect to this latter, the jury have no duty to perform." ^ The verdict of a Sheriif 's jury, rendered upon a claim for damages upon a case sub- mitted under an appeal from such award, may be set aside as against the weight of evidence, by the Superior Court, by virtue of the authority contained in General Statutes, c. 43, § 40 ; and the Court may determine whether the evidence which was before the Sheriff's jury shall be presented to them, and, if so, in what mode.^ 24. The authority conferred on County Commis- sioners by the provisions of General Statutes, c. 148, §§ 19-22, does not include any power or juris- diction " to establish drains by means of which water can be drawn off from the land of one per- son into and upon that of another, there to re- main stagnant, or in such a position that it cannot 1 Gen. Sts. o. 43, §§ 19, 20; Boston & Maine Railroad Co. ». County of Middlesex, 1 Allen, 324; Lanesborough ». County Commissioners, 22 Pick. 280 ; Gloucester v. County Commissioners, 3 Met. 375. 3 Fitchbnrg Railroad Co. u. Eastern Railroad Co. 6 Allen, 98; Com- monwealth V. Sessions of Norfolk, 5 Mass. 435; Harding v, Medway, 10 Met. 465. 32 MANUFACTURING CORPORATIONS. pass thence into any stream, pond, or other outlet. The object of the statute is not to furnish a mode by which an owner of land can drain his own prem- ises by submerging those of his neighbor, or to enable him to shift the burden of defective drainage on to land of an adjacent proprietor. The great purpose which was intended to be subserved by the statute is, to establish a system by which swamps, meadows, and other lands, which are low and wet, or difficult of approach, may be rendered accessible and capable of improvement. This purpose is clearly indicated by the terms of the' statute. It provides only for cases where lands cannot be approached, worked, drained, or used in the ordinary manner, without ' crossing ' other lands or a highway ; and it authorizes the Commissioners to establish roads, drains, and ditches to such places, not by construct- ing them in such way as to allow water or travel to find its terminus in land of adjoining owners, with- out any means of outlet or egress, but only to estab- lish them by ' crossing ' adjacent premises, so as to furnish such means of access for travel, or escape for water, as may be necessary to render the land capable of approach and susceptible of improvement by tillage or otherwise." ^ When it is necessary to repair any improvement thus constructed, a ma- jority of the persons benefited by it may cause such repairs to be made, and compel contributions from each person benefited, on the basis of the award.^ 25. When the premises in question are situated entirely in one town or city, the petition may be 1 Sherman v. Tobey, 3 Allen, 7. 2 Gen. Sts. u. 148, § 24. CORPORATIONS IN. GENERAL. 33 made to the Selectmen, or Mayor and Aldermen thereof, who shall proceed thereon in all respects as above provided for County Commissioners upon such petitions, except that they need not give notice to their town or city. This petition shall be filed in the ofiice of the Town or City Clerk before proceed- ings are had thereon ; and, together with the .order or award thereon, shall be recorded in said office within two months after the same is made. For services upon such petitions the Mayor and Alder- men shall each receive two dollars a day, and the Clerk shall receive for recording petitions and orders the same fees as for recording mortgages of personal property. A party aggrieved by any order, award, or refusal of the Selectmen, or Mayor and Aldermen herein, may complain to the County Commissioners at any meeting held within one year thereafter; and the Commissioners may thereupon proceed in aU respects as though the petition were originally made to them.^ 26. When a person or corporation applies to the Commissioners to estimate or assess damages sus- tained by reason of property taken, or intended to be taken for the purposes of a railroad or other corporation, or to perform any other official act in relation to matters in which the County has no inter- est, the Commissioners, before proceeding to act, shall require the party to enter into a recognizance to the County, with sureties to their satisfaction, for the payment of all costs and expenses which shall arise by reason of such application, and the proceed- 1 Gen. Sts. c. 148, §§ 26-28. 3 34 MANUFACTDEING CORPOEATIONS. ings thereon ; and the same remedy shall be had to enforce the payment thereof as is provided in the case of recognizances entered into under the pro- visions of General Statutes, c. 43. The Commis- sioners, if they assess damages as aforesaid, shall add thereto the amount of costs and expenses in- curred by reason of the application, and their pro- ceedings thereon. The Commissioners, or the Chairman of the; Board, may, at other times than at regular meetings, receive petitions relating to railroads, or to anatters in which the County has no interest, and take recogni- zances thereon ; and Upon such petitions, and similar petitions entered at a regular meeting, and pending before them, may appoint times for hearing the par- ties and acting thereon, and direct proper notices to be given to persons interested. The Commissioners and Chairman shall make return of such petitions and recognizances, with their proceedings, at any regular meeting, or special meeting held for that purpose ; their Clerk shall enter the same of record, and such further proceedings shall be had thereon as the case shall require. The costs of such special meetings shall be paid by such of the parties as the Commissioners decide. When, in case of the disal- lowance of a petition, costs are chargeable to the petitioner, there shall be taxed for each Commis- sioner at the rate of three dollars a day for time, and five cents a mile for travel to and from the place of meeting, to be paid into the county treas- ury.i » See Gen. Sts. o. 17, §§ 24-27, 30; c. 43, § 24. CORPORATIONS IN GENERAL. 35 27. Each party recovering damages, by verdict of a jury, for land or buildings taken, or otherwise damaged in whole or in part, by the laying out, locating anew, altering, or discontinuing of a high- way, or making specific repairs thereon, shall re- cover his several costs ; and each party not recovering damages shall be liable for costs to the town or other corporation of which he shall have claimed dam- iiges, in like manner as if the proceedings were had under his several petition ; but if a party shall, four- • teen days before the trial, give notice in writing to the town or other corporation that may be liable for damages, that he relinquishes all claim for damages, and shall also, before the trial, file in the case a relinquishment of such claim, he shall not be liable for costs in the case. But if a person having notice, as aforesaid, neglects to appear and become a party to the proceedings in Court, he shall be for ever barred from making an application for damages. ^ 28. All ofiicers and agents of corporations, by whose means any person not having a settlement in this Commonwealth is brought into the State, shall furnish the agents of the Commonwealth, when so required, so far as in their power, by filling up blanks to be furnished them for that purpose, with the names of all foreigners brought into this State by any conveyance by land, or by any lines of com- munication established for the regular transporta- tion of passengers by water, not extending beyond, or stopping at places without the United States, and also procure such further information in relation to 1 Gen. Sts. o. 43, §§ 63, B7, 68. 36 MANUFACTURING CORPORATIONS. such foreigners as is practicable, in order to iden- tify them if they should hereafter become a public charge. Eefusal or neglect to furnish such infor- mation when requested, shall be punishable by fine not less than twenty dollars for each person in rela- tion to whom the information is withheld. If a foreigner brought into this State in the manner above specified falls sick, or from any cause becomes a public charge within one year thereafter, the. Commonwealth, or any place incurring expenses for his support, sickness, or burial, may, in an action of contract, recover the amount of such expenses of the corporation, or party by whose means the person was brought into the State : provided, that tlie party so liable shall be notified of his liability in each case as soon as practicable, in order that such party may, if so disposed, provide means of support or removal. Any corporation which' brings into this Commonwealth, or by whose means or at whose instigation any person is brought into the same for the purpose of performing labor for such corpora- tion, if such person has no settlement in this Com- monwealth, shall give a bond to the Commonwealth to be delivered to the Superintendent of alien pas- sengers, in a sum of three hundred dollars, condi- tioned that neither such person, nor any one legally dependent on such person for support, shall within two years become a city, town, or State charge.^ 29. Any corporation created by authority of this State, except railroad and banking corporations, but not excepting horse and street railroad corporations, 1 Gen. Sts. o. 71, 5§ 4, 25; St. 1866, t. 272. COEPOEATIONS IN GENEEAL. 37 may apply, by petition, signed by an officer duly au- thorized by a vote of a majority of the corporators present and voting at a legal meeting called for the purpose, to the Judge of Insolvency for the County "where the corporation has its principal place of business, setting forth its inability to pay its debts, and its willingness to assign all its estate and effects for the benefit of its creditors, and praying that such proceedings may be had in the premises as are hereinafter provided. The Judge shall there- upon forthwith issue a warrant, as in the case of an application by a debtor under General Stat- utes, c. 118, § 17, but requiring the notice given by the Messenger to state further, that the making of any contract by the corporation is forbidden by law. Like proceedings shall be had thereupon, with like powers, duties, and privileges of the Judge, Register, Messenger, Assignee, and creditors, as are hereinbefore provided upon the petition of a debtor, except as hereinafter mentioned. ^ All payments, conveyances, and assignments made fraudulent and void by General Statutes, c. 118, §§ 89, 91, when made by a debtor, shall, in like manner, to the like extent, and with like remedies, be fraudulent and void when made by a corporation which is subject to the provisions of the said chap- ter.^ An allowance or discharge shall not be granted to any corporation, or to any person as officer or member thereof.^ 30. If a corporation whose goods or estate are 1 See 0. 118, passim; Gen.'Sts. u. 118, §§ 113, 114; St. 1866, o. 113. 2 Gen. Sts. c. 118, § 120. s lb. \ 121. 38 MANUFACTURING COEPOEATIONS. attached on mesne process in a civil action founded on a contract for the sum of one hundred dollars, or upwards, which is in its nat\ire provable under the provisions of General Statutes, c. 118, does not, within fourteen days from the return day of the writ, if the term of the Court to which the process is re- turnable so long continues, or on or before the last day of the term, if the same sooner ends, dissolve the attachment in the manner provided in General Statutes, c. 123 ; or if a corporation makes any fraudulent payment, conveyance, or transfer of its property, or any part thereof; any of its creditors whose claims provable against its estate under the provisions of General Statutes, c. 118, amount to the sum of one hundred dollars, may apply by petition stating the facts, and the nature of said claim or claims, verified by oath, to the Judge of Insolvency in the County in which the corporation is established, praying that its estate may be seized and distributed according to law; and thereupon, after notice of the presentment of the petition given to the corporation, by a copy thereof served on its President, Treasurer, or Clerk, thirty days at least before the return-day of the notice, and a hearing of the petitioners and corpora- tion, or after default of the corporation to appear at the time and place in the notice appointed, if the facts set forth in the petition appear to be true, the Judge shall forthwith issue his warrant to take possession of the estate of the corporation; and such further proceedings shaU be had thereon as upon a warrant issuing upon the petition of a cor- CORPORATIONS IN GENERAL. 39 poration under said chapter 118, § 113.^ Petitions and applications to tlie Court of Insolvency may at any time be received and placed on file by the Eegis- ters of Insolvency in their several Coiinties, and the proper orders of notice and citations issued thereon in the same manner, and with the same effect, as the Judges of said Courts may now do ; but when the Judge. deems such notice insufficient, he may order such further notice as the case requires.^ Each Judge of Insolvency shall, on or before the tenth day of each month, make a return to the Secretary of the Commonwealth of the name, residence, and occupation of each person by or against whom, as an insolvent debtor, and of the name of each cor- poration, the kind of business for which* it was created, the place or places where its business was principally done, by or against which as an insolvent corporation a petition has been filed in his Court during the next preceding month, with the dates of such petitions. The Secretary shall enter such returns, conveniently for reference, in a book which shall be open to the inspection of the public.^ None of the foregoing provisions shall give validity to or affect any mortgage made by a corporation for any purpose whatever.* 1 Gen. Sts. u. 118, § 122. 2 St. 1863, u. 156, § 1. 8 Gen. Sts. c. 118, § 131. « lb. § 124. See also St. 1862, o. 179, §§ 7, 9. 40 MANUFACTURING C0EP0EATI0N3. CHAPTER III. COEPORATIONS ORGANIZED FOE BUSINESS PURPOSES, OE HATING STOCK DIVIDED INTO SHAEES. Section I. Preliminary Proceedings. 1. Application for act of incorporation. 2. Acts of incorporation public acts. 3. Fee for filing certificate of organization. 4-7. First meetings of corporations created by charter, or organized under the General Statutes. 8. Issue of shares. 1. Peesons intending to apply for an act of incor- poration, and corporations intending to apply for an alteration or extension of their charter, shall give notice of such intended application, by an advertise- ment at least four weeks immediately preceding the session at which the application is to be made, in some newspaper printed in the County where such corporations are, or are intended to be established ; such newspaper to be designated by the petitioners, and approved by the Secretary of the Common wealth.^ But whenever it shall appear, upon satisfactory evi- dence under oath, that the notice required to be given as above was omitted to be given, by reason of any unavoidable accident, without default on the part of the petitioner or applicant, or that the 1 Gen. Sts. 0. 2, §§ 8, 10. BUSINESS OORPOEATIONS. 41 subject-matter of the petition or application did not admit of such previous notice as above prescribed, the notice shall be accounted sufficient, if given for the period of time above-named, as soon as such omission shall have been discovered by the petitioner or applicant, or within a reasonable time after such subject-matter shall have arisen, or become known : provided, that such petition or application be pre- sented within thirty days after the first day of the assembling of the Legislature.^ And whenever it shall appear, upon satisfactory proof, that all the parties having rights or interests in the subject- matter of any petition presented within said period of thirty days, have waived notice, or have received satisfactory notice thereof, by writing signed by them, no other or further proof of notice shall be required.^ The notice of an application for an act of incor- poration shall specify the amount of capital stock required; and if the notice is for an alteration or extension of any charter already granted, it shall specifically state the same. Proof of the publication may be made by the affidavit of the printer or pub- lisher of the newspaper in which such publication is made, which affidavits, and the petitions to which they relate, shall be presented to the General Court within the first ten days of the session.^ But this form of proof of publication of notice shall not be construed to exclude any other equally satisfactory evidence thereof.* 1 St. 1862, .;. 91, § 1. 2 St. 1862, c. 91, § 2. 8 Gen. Sts. c. 2, §§ 11, 12. 1 St. 1862, u. 91, § 3. See p. 28 for publication to be made by Sec- retary of Commonwealtb. See pp. 27-29 for provisions in regard to petitions to General Court. 42 MANUPACTUBING CORPORATIONS. 2. All acts of incorporation shall be deemed public .acts, and as such may be declared on and given in evidence.^ 3. Every corporation and joint-stock company, upon filing and recording in the Secretary's depart- ment any certificate of organization or increase of capital stock, shall pay' therefor the sum of five dollars ; for other papers to be recorded in said de- partment, the sum of one dollar ; and an entry of such payment shall be made upon the record.^ 4. Corporations created by charter, if no time is limited therein, shall be organized within two years from the passage of their respective acts of incor- poration. The first meeting of such corporations, unless otherwise provided in their acts of incorpora- tion, shall be called by a notice signed by the person, or a majority of the persons, named therein, setting forth the time, place, and purposes of the meeting ; and such notice shall, seven days at least before the meeting, be delivered to each member, or published in some newspaper of the County where the cor- poration is established ; or, if there is no such paper, then in some newspaper of an adjoining County. The persons so named, and their associate sub- scribers to stock prior to the date of their act, shall be authorized to hold the franchise or privileges granted until the corporation is organized.* Where corporate powers, conferred by act of the Legislature, have been " assumed by the persons by whom it was intended that they should be enjoyed, 1 Gen. St9. c. 3, § 5. " St. 1863, c. 231, § 2; St. 1865, c. 76, § 1. 8 Gen. Sts. u. 68, §§ 2, 3. BUSINESS CORPORATIONS. 43 SO far as they chose to avail themselves of them," where they, " with their associates, or at least all of them who desired to do so, have accepted the act, organized under it, issued stock, elected officers who have acted and served in that capacity, carried on business, contracted debts, and exercised all the functions of corporate existence ; it is too late to deny that the corporation ever had any legal exist- ence, or for its officers to avoid the liabilities which the statutes of the Commonwealth impose," by alleging a technical objection, as that the call for the first meeting was not signed in accordance with the requirements of St, 1855, c. 140. In reference to this statute, the provisions of which are substantially incorporated with General Statutes, c. 68, § 3, it is said by the Court, that, " If the object of the statute is regarded, by which it is re- quired that the first meeting shall be called by a majority of the persons named in the act of incor- poration, it wiU be evident that it is directory mere- ly, 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 interested should come together without any notice or call whatever, and proceed to accept the charter, and do the other acts necessary to constitute the corpora- tion, we cannot doubt that their action would be valid, and that neither the public nor any persons not belonging to the association would have any in- terest to question their proceedings. The purpose of the statute was probably to avoid such difficulties 44 MANUPACTUEING CORPORATIONS. as were disclosed in the case of Leehmere Bank t. Boynton, 11 Cusli. 369, where two parties had at- tempted to organize separately under the same charter, each claiming to be the corporation." ^ And in the case of, Appleton Mut. Fire Ins. Co. v. Jesser, 5 Allen, 446, it is said that "the essential quality of a corporation is the power granted by the sovereign to persons designated and described to act in a cor- porate capacity. The acts of this corporation, be- fore the day when the statute went into effect, were wholly void ; but when, on and after that day, persons were found with the consent and under the authori- ty of the designated corporators, and without ob- jection on the part of the sovereign power, actually exercising the corporate powers, and claiming and using the franchise, they constituted a corporation de facto, and the lawfulness of their organization cannot be impeached collaterally, in an action to recover an assessment." 5. The Court consider that the above case of Newcomh v. Reed is distinguishable, upon the state of facts set out, from the case of Utley v. Union Tool Company, 11 Gray, 139, the authority mainly relied on by the defendants, and refers to it as fol- lows : " That case decided that, in order to charge as stockholders of a manufacturing corporation per- sons who had been summoned in an action against it, under St. 1851, c. 315, the plaintiff must prove the legal existence of the corporation. The alleged corporation had no charter, or act of incorpora- tion from the Legislature ; but was an association 1 Newoomb v. Reed, 12 Allen, 362. BUSINESS CORPORATIONS. .- 45 which had undertaken to assume corporate powers, luider a general act for the formation of joint-stock companies, St. 1851, c. 133. That statute au- thorized 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 tliat written articles of agreement were essential to con- stitute a corporation, and that these articles must fix the amount of the capital stock, and set forth dis- tinctly the purpose for which, and the place in which, the corporation was established. The Court say, " There is an obvious reason for making such organ- ization by written articles of agi'eement, a condition precedent to the exercise of corporate rights. It is the basis on which all 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 con- tracting debts, or of rendering persons liable therefor as stockholders." ^ 6. In the case of Walworth v. BracJcett, 98 Mass., — differing, say the Court, from the case of Newcomh v. Reed, only in the following circum- 1 Newoomb ». Reed, ante. 46 MANUFACTURING CORPORATIONS. stances ; namely, that in the case first named " the plaintiff offered to show 'that two of the persons named in the act of incorporation did not consent to the call of the first meeting, but, upon being requested, refused to join therein, and did not attend said meeting, nor participate in the organization of the company ; that none of the persons acting be- came associated therein at their request, or by their authority ; and that there were no subscribers to the stock of the company, previous to the date of the act of incorporation," — the opinion of the Court is given as follows : " But the fact remains that there was an act of incorporation by the Legislature ; that the first meeting was called, though not in the mode directed by the statute, by one of the persons named in the act as a corporator, and consisted of the persons associated with him by his consent, and with the acquiescence of the other named corporators in tak- ing the stock. That there were no subscribers to the stock of the company, previous to the date of the act of incorporation, does not show that there were not such subscribers before the call for the first meeting was issued ; and, as it does not appear that the two persons named in the act of incorporation, who refused to participate in the organization, made any objection to their associate's proceeding vrithout them, or made any claim to the exercise of the cor- porate powers, either at that time or subsequently, it is to be inferred that the subscribers to the stock undertook to organize the corporation with their assent, although not by their authority. As against all persons but the Commonwealth, BUSINESS CORPORATIONS. 47 therefore, and the two persons named as corporators who refused to join, if they had chosen to assert an adverse right, the organization seems to be valid. Until the organization of the corporation, as there were no subscribers to stock before the date of the act of incorporation, the persons named in the act were entitled to hold the franchise and control the organization, St. 1855, c. 140. All these per- sons had notice that an organization was intended, and two of them refused to join. But it is still true, as was said in the opinion in Newcomh v. Reed, " that aU of them who desired to do so have accepted the act, organized under it, issued stock, elected officers, who have acted and served in that capacity, carried on business, contracted debts, and exercised all the functions of corporate existence. It is there- fore too late to deny that the corporation ever had any legal existence." 7. The first meeting of any corporation organized under General Statutes authorizing the formation of such corporation, may be called in the manner set forth in the articles of association ; or, if they make no provision, by a notice signed by a majority of the associates, and published in the manner above pre- scribed.^ 8. Corporations having a capital stock divided into shares, unless specially authorized, shall not issue any shares for a less amount to be actually paid in on each share than the par value of the shares first issued. The shares of every corporation organized after April 10, 1867, and having a capital 1 Gen. Sts. c. 68, § 4. 48 MANUFACTURING CORPORATIONS. stock divided into shares, — excepting co-operative associations organized under St. 1866, c. 290, and corporations organized under St. 1866, c. 187, entitled " An Act to authorize towns and cities to establish herring fisheries," — shall be fixed at one hundred dollars.^ Section II. Administration of Affairs. 1. By-Laws. — Qnorum. — Records. 2. Proxy voting by officers. 5. General rules as to votes and voting. 4, 6. Corporation a Trustee for the stockholders. 6. Executor and others to represent and vote on stock. 7. Duties of officers as to list of stockholders. 8. As to list of unclaimed dividends. 9. As to transfers, and the records thereof. 10. Transfer not valid against attaching creditor unless recorded. 11. Delivery of a certificate in blank, or altered. 12. Transfer of a part of the shares on a certificate. 13, 14. Transfers as collateral security. 16. Returns from Guardians, Executors, Administrators, Trustees, and copartners. 16. Certain corporations continued in certain privileges and liabilities. 1. Corporations may, by their By-Laws, where no other provision is specially made, determine the manner of calling and conducting their meetings ; the number of members that shall constitute a quorum ; the number of shares that shall entitle the members to one or more votes ; the mode of 1 Gen. Sts. c. 68, § 9; St. 1867, o. 131. BUSINESS COEPOEATIONS. 49 voting by proxy ; the mode of selling shares for the non-payment of assessments ; and the tenure of office of the several officers. They may annex suita- ble penalties to such By-Laws, not exceeding the sum of twenty dollars for one offence ; but no By- Law shall be made by a corporation repugnant to its charter, or the laws of the State.^ It is not neces- sary that the records of a corporation should show affirmatively that the number of members required by the By-Laws to constitute a quorum were present at a meeting. " It is sufficient that the record shows that the meeting was duly called, and proper notice of it seasonably given. The law will assume, in the absence of evidence, that a proper number were present to transact the business for which the meet- ing was called. Illegality will not be presumed, biit the contrary. The maxim of law in such cases is, omnia rite acta prcesumuntur." '^ 2. No officer of any corporation shall, as proxy or attorney, cast more votes than represent twenty shares of the capital stock, unless all the shares so represented by him are owned by one person. No salaried officer of any corporation shall vote as proxy or attorney. No officer of any corporation shall ask for, receive, procure to be obtained, or use any proxy vote in the corporation of which he is an officer, except the votes he is hereby authorized to cast. Any officer of any corporation who shall violate any of the aforesaid provisions, shall, for 1 Gen. Sts. c. 68, § V. 2 Citizens' Mut. Kire Ins. Co. v. Sortwell, 8 Allen, 217 ; Sargent ». Webster, 13 Met. 504. 4 50 MANUFACTURING COEPOEATIONS. each offence, forfeit and pay a fine of not less than one hundred dollars, nor more than five hundred dollars; and the Supreme Judicial Court, upon petition of any stockholder in such corporation, and after due notice and satisfactory proof of such of- fence, shall cause such officer to be forthwith removed from his office; and such removal shall for ever after disqualify him from holding office in such corporation.^ 3. The proper mode of giving expression to the collective will of the individuals composing a cor- poration, by means of votes, and the nature, limita- tions, and effect of their united action will be found very fully stated in the case of Burfee v. Old Col- ony ^ Fall River Railroad Oo. 5 Allen, 230, cited at length in another part of this work, in connec- tion with the power of the Legislature over char- ters which they have granted. In the present con- nection, however, we may note the general statement, that " A holder of shares in an incorporated body, so far as his individual rights and interests may be involved in the doings of the corporation act- ing within the legitimate sphere of its corporate power, has no other legal control over them than that which he can exercise by his single vote in the meetings of the company. To this extent he has parted with his personal right or privilege to regu- late the disposition of that portion of his property which he has invested in the capital stock of the corporation, and surrendered it to the will of a majority of his fellow-corporators. The jus dispo- 1 St. 1865, 0. 236. BUSINESS COEPOEATIONS. 51 nendi is vested in them, so long as they keep within the line of the general purpose and object for which the corporation was established, although their action may be against the will of a minority, how- ever large. ... Of this, and its consequences, no stockholder can reasonably complain, because it is a result which flows from the contract into which he has voluntarily entered." The tendency of the Courts towards a liberal construction of the action of corporations, is shown in holding that a vote of a corporation accepting and adopting a Report of a Committee of Direc- tors recommending an assessment, and stating its amount and all its details, — said Committee hav- ing been appointed to consider the matter, — is a sufficient vote to authorize the assessment. The Court say, " No particular formula is necessary in voting an assessment; corporate votes are sufficient if they state substantially and intelligibly the intent of the voters. Thus the vote of a Town accepting the Report of a Committee appointed to establish school districts, and recommitting it to the Com- mittee for the purpose of having the work completed, is sufficient to establish the districts, though the Town does not in direct terms express its intent to establish them." ^ Also that " the record of a cor- porate vote, signed by the Clerk, electing an Agent and Superintendent, constitutes a contract in writ- ing within the Statute of Frauds." ^ 4. But it is to be remembered, that "the cor- 1 Citizens' Mut. Fire Ins. Co. ». SortweU, 10 AUen, 110; Allen v. Kounsevllle, 7 Met. 218. 2 Tufts ». Plymouth Gold Mining Co. 14 Allen; Chase ». Lowell, 7 Gray, 33 ; Johnson ». Trinity Church, 11 Allen, 123. 52 MANUPACTUKING CORPORATIONS. poration itself is regarded as a distinct person ; and its property is legally vested in itself, and not in its stockholders. As individuals, they cannot, even by joining together unanimously, convey a title to it, or maintain an action at law for its possession, or for damages done to it. Nor can they make a contract that shall bind it, or enforce by action a contract that has been made with it. The arti- ficial person called the corporation must manage its affairs in its own name, as exclusively as a natural person manages his property and business. The ofi&cers, though chosen by vote of the stock- holders, are not their agents, but the agents of the corporation ; and they are accountable to it alone. Therefore one or more of the stockholders cannot maintain an action at law against the officers for any breach of official duty that injures the cor- porate property as a whole. An injury done by the Directors of a company to an individual, by indu- cing him to become a member of the company by means of false representations, is actionable because it is an injury to him, and not to the company." ^ " From the qualified and equitable interest of stock- holders, as above and elsewhere stated, there must result equitable relations and equitable rights, and these rights may be enforced by equitable remedies. As between the corporation itself and its officers, it was long since held that they were trustees, and that a Court of Equity would hold them responsible for every breach of trust.^ The corporation itself 1 Peabody v. Flint, 6 Allen, 52; Gerhard v. Bates, 2 El. & Bl. 476; Smith V. Hurd, 12 Met. 371. 2 Charitable Corporation v. Sutton, 2 Atk. 400. BUSINESS COBPOEATIONS. 53 holds its property as trustee for the stockholders, who have a joint interest in all its property and effects, and each of whom is related to it as cestui que trust. The corporation may call its officers to account if they wilfully abuse their trust, or misap- ply the funds of the company ; and if it refuses to sue, or is still under the control of those who must be made defendants in the suit, the stockholders, who are the real parties in interest, may file a bill in their own names, making the corporation a party defendant ; or a part of them may file a bill in be- half of themselves and all others standing in the same relation, if convenience requires it." ^ 5. And " if other parties have participated with the officers in such proceedings, they may, accord- ing to the established principles of equity pleading, be joined as parties." As, for instance, in a case where the managers of corporation A. have ob- tained the control of corporation B., " by the pur- chase of a majority of its stock for the purpose, and then managed its affairs in such subservience to the ■ interests of corporation A., as to render worthless the stock of the minority in corporation B., availing themselves of its nominal value, with- out compensation. In the discovery of frauds, and in furnishing remedies to parties defrauded, equity does not suffer technicalities to stand in its way, but seizes upon the substance of the case, and holds aU parties to their just responsibility, following trust property into the hands of remote grantees and 1 Peabody v. Flint, ante; Robinson v. Smith, 3 Paige, 222, and cases cited; Hersey v. Veazie, 24 Maine, 9 ; Smith v. Poor, 40 Maine, 416. 54 MANUFACTURING COEPOEATIONS. purchasers, who have taken it with notice of a trust, in order to subject it to the trust." But as " equity regards diligence as one of its important elements, and discountenances laches as inequitable, un- reasonable delay to prosecute an existing claim is a bar to a bill in equity, especially when the parties cannot be restored to their original position, and injustice may be done."^ 6. An Executor, Administrator, Guardian, or Trustee shall represent the shares or stock in his hands at all meetings of the corporation, and may vote as a stockholder.^ 7. The Treasurer or Cashier of every corporation shall keep an accurate list of its stockholders, with the number .of shares owned by each, which shall at all times, upon written application by any stock- holder, be exhibited for his inspection. If such officer refuses so to exhibit such list, he shall forfeit fifty dollars for each offence.^ Every corporation established within this Commonwealth by special charter, or organized under the general laws thereof^ and having a capital stock divided into shares, shall register the names and residences of all its share- holders, and all changes therein of which it is notified; shall issue no certificate of stock to a shareholder, or purchaser of a share, until he in- forms the corporation of his actual place of resi- dence ; and shall pay no dividend to a shareholder whose actual place of residence is unknown, or has 1 Peabody i). Flint, ante; Yeazie v. Williams, 3 Story E. 610; Tash V. Adams, 10 Gush. 252; Fuller v. Melrose, 1 Allen, 166; Story on Equity, § 1520, and note 3. 2 Gen. Sts. c. 68, § 11. s Gen. Ste. o. 68, § 10. BUSINESS CORPORATIONS. 55 become uncertain, until he informs the corporation thereof.^ 8. Each corporation in this State shall, once in every five years, publish in some newspaper in the city of Boston, and also in some newspaper, if there is any, in the County where the corporation is estab- lished, a list of all dividends and balances which have remained unclaimed for two years or more, with the names of the persons to whose credit the dividends or balances stand ; which publication shall be continued in three successive papers.^ 9. All records of transfers of stock in companies incorporated by the sole authority of this State, shall be made and kept within the State. The officer of every company whose duty it is to record such trans- fers, shall, at the time of his appointment, be a resident within the State ; and when he ceases to be a resident, the office shall become vacant.^ 10. In the case of Rock v. Nichols, 3 Allen, 342, it was held that a transfer of shares from A. to B. is not valid as against an attaching creditor of A., or any other persons, except A. or his representatives, unless such transfer or conveyance were duly re- corded in the books of the corporation ; that B., in undertaking to transfer the shares to C, undertook to transfer property to which he had no legal title, and that C. could not be held liable upon a cheque given in payment for said shares, the consideration for the promise implied in the cheque having failed.* 1 St. 1864, c. 201, § 1. 2 Gen. Sts. c. 68, § 19. s Gen. Sts. o. 68, § 12. ^ See Fisher v. Essex Bank, 6 Gray, 373. 56 MANUFACTURING CORPORATIONS. In this case, although the shares transferred were in the stock of a railroad corporation, and the de- cision is based upon the provisions of General Statutes, c. 63,. § 11, " Of Railroad Corporations," it may be considered that the principle involved is one of wider and more general application. 11. The delivery of a certificate of shares in a corporation, having upon the back a form of assign- ment or transfer, in which the number of shares transferred is written in the proper place, " gives to the holder the right to fill the other blanks, but not to make any alteration of the part stating the num- ber of shares assigned." In the case of an obvious alteration made in an instrument of transfer, " it is incumbent upon the corporation to ascertain wheth- er such alteration were authorized, before consum- mating the transfer ; otherwise they must incur the risk of its being unauthorized." " If a forgery, it will be void, and no one can acquire a title under it, unless the transferrer should be guilty of negligence in respect to it." 12. In the case of a transfer of a portion only of the shares indicated upon a certificate, the proper course is for the company to retain the certificate upon the presentation of the same at its ofi&ce, issu- ing a new certificate to the assignee of the shares transferred. " Whenever the assignor shall have occasion to take a new certificate of the unassigned shares, the files and books of the company will show that he is still the owner of them, and had not trans- ferred them. His property ought to be as safe without a certificate as with one." In making the assign- BUSINESS CORPORATIONS. 57 ment, the assignor (as well as the company) is held to reasonable care adapted to the circumstances of the case ; but if such a degree of carelessness be shown on the part of the transferrer in making out his instrument of transfer as to excuse the erroneous transfer of the shares, on the part of the company, he cannot claim the stock so transferred. It is imma- terial in this respect whether a certificate of stock is a negotiable instrument or not ; in point of fact, the weight of authority goes to show that it is not negotiable. And in the case now under examination from which the principles here stated are educed ,i it is held, that the action of the clerk of a corporation, in undertaking to make out a transfer of shares on the strength of an assignment, " mutilated and altered, contradictory and absurd," altering the as- signment, at the time, still further by his own hand, and by erasures, additions, etc., making, or attempt- ing to make it a proper assignment of the shares, so far as its language was concerned, rendered the cor- poration liable to furnish the owner of the shares, the transfer of which was thus wrongfully or irregularly attempted, with a certificate for an equivalent num- ber of shares, or their market value in money, and to pay to him the dividends declared thereupon since they have been withheld from him. 13. In transfers of stock as collateral security, the debt or duty which such transfer is intended to secure shall be substantially described in the deed or instrument of transfer. A certificate of stock issued to a pledgee or holder of such collateral 1 Sewall V. Boston Water Power Co. 4 Allen, 277. 58 MANUFACTURING CORPORATIONS. security, shall express on the face of it that the same is so holden ; and the name of the pledger shall be stated therein, who alone shall be respon- sible as a stockholder. The Treasurer, Cashier, or other officer who has the lawful custody of the records of transfers of shares, upon the written request of a creditor of the general owner of stock pledged or transferred, shall exhibit to him the record of such transfer ; and in case of refusal and of loss to the creditor by reason thereof, the corpo- ration shall be liable for the amount of the loss.^ 14. In the case of Newton V. Fay, 10 Allen, 505, it was held, that the obvious purpose of the pro- Tision of General Statutes, c. 68, § 13, in regard to the transfers of stock as collateral security (as above quoted in full), " is to enable the pledgee to hold the security without being liable for the debts of the corporation, or to taxation for the prop- erty ; if it were to be construed as excluding all other methods of conveying stock as collateral securi- ty, it would exclude evidence of a separate defeasance in writing. It was not framed with a view to that question, but altogether alio intuitu." The Court call attention to the fact that the statute " speaks of such transfer of stock as a pledge, though the gen- eral property in the stock apparently passes to the vendee. The ordinary distinction between a mort- gage and a pledge is, that by the former the general property passes, while by the latter it does not, but merely a special property passes. It is held in New York, that a transfer of stock as collat- 1 Gen. Sts. c. 68, §§ 13, 14. BUSINESS CORPORATIONS. 59 eral security is to be regarded as a pledge rather than a mortgage. The reason assigned is, that in order to constitute a pledge, .the possession must pass, and possession of stock cannot be transferred except by a transfer of the stock itself. A delivery of the scrip or certificate does not transfer the stock. The owner usually writes on his certificate a trans- fer very much like a bill of parcels, or a power of attorney to some one to make the transfer, and the papers which complete the possession in the vendee are made by the officers of the corporation. On account of this peculiar character of the property, it was formerly doubted whether it could be the subject of a pledge. But it is now held, that it can be, and it is considered to be more in accordance with the intention of the parties to treat it as a pledge than as a mortgage." ^ " The same doctrine seems to be recognized in Pennsylvania." ^ " In New York it is also applied to the transfer and delivery of commer- cial paper." ^ After recapitulating the different modes of availing himself of the security by the pledgee and by the mortgagee, and alluding to the great practical impor- tance of the question raised in this case, in view of the frequency of transactions of this kind among all classes of business men, the transfer being very often absolute in form, and its purpose and consider- ation evidenced by mere oral agreement, — the Court 1 Wilson V. Little, 2 Comst. 443, Allen v. Dykers, 3 HiU, 593 ; Dykers . Allen, r Hill, 497; Vaupell v. "Woodward, 2 Sandf. Ch., 143. 2 Gilpin «. Howell, 5 Penn. State R. 41. s White V. Piatt, 5 Denio, 269. 60 MANUPACT0EING COEPOEATIONS. goes on to remark that, although " the rule is well established, in respect to actions at law, that parol evidence is inadmissible to prove that a sale or con- veyance in writing, which is absolute in its terms, was not intended to be absolute, but was given as a pledge or mortgage, (this rule not appljdng however to a bill of parcels), it is important to inquire as to the rule which courts of equity have applied to this subject, this being a suit in equity. Regarding such a pledge or mortgage of property merely as a trust, such evidence," it is said, " would be admissi- ble ; for it is well settled thai, since the Statute of Frauds, as well as before, a trust of personal chattels may not only be created, but, if necessary, estab- lished and proved by mere parol declarations.^ Some of the cases are very strong. In Kingsman v. Kings- man, 2 Vernon, 559, the defendant held property by an absolute legacy, and a trust was decreed on the strength of his admissions, made in the presence of several witnesses. Nab v. Nab, 10 Mod., 404, is another strong case of the same character. But a mortgage is not regarded as strictly a trust, and no case has been found where the question has been discussed in respect to a mortgage or a pledge of a chattel. The cases which have come under discus- sion have been formal conveyances of real estate, and it seems to be well settled as a principle of equity jurisprudence in the Courts of Equity in England, in the United-States Courts, and in some of our State Courts, that oral evidence is admissible in a suit in equity to prove that a conveyance of real estate, 1 Hill on Trustees, 57, and oases there cited. BUSINESS CORPORATIONS. 61 absolute in its terms, was intended as a security for a debt, or an indemnity against a liability, and that upon such evidence a decree of redemption will be made. " The policy of Courts of Equity," it is said, " has been from the earliest times to protect debtors, whom they regard as the weaker party, against being wronged or oppressed by creditors, whom they regard as the stronger party. Their method of interference has been by preventing the creditor from maintaining his title according to the legal effect of his conveyance, whenever it was inequita- ble for him to do so." And, after an extended review of the cases bearing upon conveyances of this kind, of real property, which have been decided in English and American Courts, the conclusion at which the Court finally arrives is as follows : "In respect to the transfer of stocks, which requires but little formality between the parties, and is often made in the hurry of business, as a bill of parcels is made, and as to which a trust may be created and proved by parol, and which is to be regarded as a pledge rather than a mortgage, when used as a collateral security, we think the principle of equity jurisdiction, so fully established elsewhere, in re- gard to instruments much more formally executed, ought to be adopted, admitting oral proof as to the consideration and purpose of the transfer, and that, upon the discharge of the debt or duty secured by it, the pledger should be permitted to redeem." 15. Every Guardian who holds, or whose ward holds stock in any corporation, and every Executor, 62 ■ MANUPACTUKING COEPORATIONS. Administrator or other person who holds in trust any such stock, shall, between the first and thfe tenth day of May in each year, return under oath to the Tax-Commissioner of the Commonwealth the names and residences on the first day of that month of themselves and all such wards, or other persons to whom any portion of the income from such stock is payable, the number of shares of stock so held, and the name and location of the corporation in which they are held. Every copartnership shall, between the first and the tenth day of May in each year, make ' a like return, stating the amount of such stock owned by the firm, and the names and residences of all the partners, and the proportional interest or ownership of each partner in said stock.^ 16. Corporations existing at the enactment of the General Statutes shall continue to exercise and en- joy their powers and privileges according to their respective charters, and to the laws in force, and shall continue subject to all the liabilities to which they are now subject ; except so far as said powers, privileges, and liabilities are modified or controlled by the provisions of the General Statutes.^ 1 St. 1865, u. 283, § 2. a Gen. Sts. c. 68, § 40. BUSINESS COEPOEATIONS. 63 Section III. Legal and Equitable Proceedings hy and against. 1. Stockholder allowed to defend, in suits against the corporations. 2. Property of foreign corporations subject to legal process. 3. Remedy in equity against stockholders when liable. 4. Attachment of shares. 6. Levy and sale of shares on execution. 6. Proceedings against shares belonging to married woman. 7. Seizure of shares for non-payment of taxes. 8. Executors, Administrators, Guardians, and Trustees exempt from personal liability. 9. Issue of stock, etc., beyond amount authorized. 10. Fraudulent issue or transfer of stock. 11. False and fraudulent entry in books of corporation. — Embez- zlement. — Test of liability of principal. 12. Fraudulent conduct of stockholder to avoid taxation. 13. Forgery of officer's signature. 14, 15. False representations by officers of corporation. 16, 17. Claims against corporation for injury to the person. 18. Rights, etc., of holders of guaranteed stock. 19. Attorney- General to prosecute in certain oases. [The provisions of this section are applicable to manufacturing cor- porations only so far as they are not in contravention of the special enactments and adjudications upon the rights and liabilities of the officers and stockholders of such corporations ; more particularly of the Statute of 1862, o. 218, entitled, " An act to define and regulate the enforcement of the liabilities of officers and stockholders of manufac- turing corporations." See Chap. IV. Sect. II. of this work.] 1. In all suits against corporations established by the laws of this Commonwealth, when it shall ap- pear to the Court that one of the objects of the suit is to obtain a judgment against said corporation, in order to enforce an alleged liability of any person who has been or is a stockholder or officer of said corporation, any such stockholder or officer may be 64 MANUFACTURING COEPOEATIONS. ^ permitted, on petition, to defend said suit. The Court in such case may require of the person so taking upon himself the defence of said suit, or of some person in his behalf, a bond, with suiEcient surety or sureties, conditioned to pay to the plaintiff all costs which may accrue and be taxed to him after the filing of said petition. ^ Prior to the passage, both of St. 1862, c. 218, and of St. 1867, c. 36, it was held, that evidence to the effect that a stockholder was duly summoned in an action wherein judgment was recovered against the corpora- tion, and failed to appear, is insufficient to show that he was liable upon the new debt created by the judg- ment. To establish such liability, it was necessary to prove that he was a stockholder at the time when the judgment was rendered, or had been a holder of shares subsequently.^ Also, that " a person sum- moned as a stockholder in a manufacturing corpora^ tion, in a suit to recover a corporate debt, cannot appear and plead to the merits, or make any defence which goes to defeat the action as between the origi- nal parties. His defence must be confined to mat- ters which tend to show that he is not liable as a stockholder for the debts of the corporation." ^ Prior to the passage of St. 1867, c. 36, a stock- holder or former officer in a corporation had no authority to appear and defend an action against the corporation, merely because he might ulti- mately be held personally liable for the claim. lu 1 St. 1867, 0. 36. 2 Mason v. Cheshire Iron Works, 4 Allen, 398. " Hobbs D. Dane Manufacturing Co. 6 Allen, 881; Holyoke Bank v. Goodman Paper Manufacturing Co. 9 Cash. 576, 582. BUSINESS COEPOEATIONS. 65 the case of Byers v. Franklin Ooal Co. 14 Allen, the Court say of the party undertaking to de- fend, " The fact that he is a stockholder, and has been formerly a Director of the company, and is claimed by the plaintiff to be ultimately liable to pay such judgment as may be recovered, does not entitle him, as of right, to assume the defence of the action. This was expressly decided under St. 1851, c. 315, which provided for summoning in stockholders ; and, d fortiori, the same rule must prevail under the present St. 1862, c. 218, by which the provisions for summoning in stockholders have been repealed." ^ It was further ruled, that the action must be remitted to the Superior Court, where it was originally brought, and from which it had never been legally transferred, and where " any party entitled to the benefit of St. 1867, c. 36, may then petition for leave to defend the suit." 2. Corporations created by any other State, having property in this State, shall be liable to be sued, and their property shall be subject to attachment, in like manner as residents of other States having property in this State are liable to be sued, and their property to be attached. The service of the writ shall be made in the manner provided in General Statutes, c. 123 and c. 126, with such further service as the Court to which the writ is returnable may order.^ 3. When the officers, stockholders, or members of a corporation, or any of them, are liable for any of its debts, or for their acts or omissions respecting 1 Eobbins v. Justices of the Superior Court, 12 Gray, 226. 3 Gen. Sts. o. 68, § 16. 6 66 MANUFAOrUKING CORPORATIONS. its business, or -when some of them are liable to contribute for money paid by others on account of such debts, acts, or omissions, the party entitled may, instead of any remedy otherwise provided, maintain a suit in equity in the Supreme Judicial Court.i 4. The share or interest of a stockholder in any corporation organized under authority of this State, may be attached by leaving an attested copy of the writ (without the declaration), and of the return of the attachment with the Clerk, Treasurer, or Cashier of the company, if there is such officer ; otherwise, with any officer or person who has at the time the custody of the books and papers of the corporation. If the officer having a writ of attachment against such stockholder exhibits the writ to the officer of the company who is appointed to keep a record or account of the shares or interest of the stockholders therein, and requests a certificate of the number of shares, or amount of the interest held by the de- fendant in the suit, such officer of the company shall give such certificate to the officer holding the writ. If he unreasonably refuses to do so, or if he wilfully gives a false certificate thereof, he shall be liable for double the amount of all damages occa- sioned by such refusal or false certificate, to be recovered in an action of tort, unless the judgment is satisfied by the original defendant. Any share or interest so attached, with all the dividends there- after accruing thereon, shall be held as security to satisfy the final judgment in the suit, in like man- 1 Gen. Sts. o. 68, § 17. See o. IV. of this work. BUSINESS CORPORATIONS. 67 ner as any other personal estate is held. If an attachment or seizure on execution is made of a share in any incorporated company, or of any other property -which may be attached without taking and keeping the exclusive possession thereof, and if the same property is subsequently attached or taken in execution by another officer, he shall give notice thereof to the officer who makes the sale under the first attachment or seizure ; and if the latter, with- out such notice, pays to the debtor the balance of the proceeds of the sale, he shall not be liable there- for to the person claiming under siich subsequent attachment or seizure. ^ 5. The share or interest of a stockholder in any corporation established under the authority of this State, may be taken on execution and sold as here- inafter provided. If the property has not been attached in the same suit, the officer shall leave an attested copy of the execution with the Clerk, Treas- urer, or Cashier of the company, if there is any such officer, otherwise with any officer or person having the custody of the books and papers of the corporation ; and the property shall be considered as seized on execution when the copy is so left, and shall be sold in like manner as goods and chattels. If the share is already attached in the same suit, the officer shall proceed in seizing and selling it on the execution in the same manner as in selling goods and chattels. The officer of the company who is appointed to keep a record or account of the shares or interest of 1 Gen. Sta. 1. 123, §§ 59-61; ib., o. 133, § 42. 68 MANUFACTURING CORPORATIONS. the stockholders therein, shall, upon the exhibiting to him of the execution, be bound to give a certifi- cate of the number of shares, or amount of the interest held by the judgment debtor, in like manner and upon the like penalty as is prescribed in Gen- eral Statutes, c. 123, upon the exhibiting to him of a writ of attachment. An attested copy of the exe- cution, and of the return thereon, shall, within fourteen days after the sale, be left with the officer of the company whose duty it is to record transfers of shares; and the purchaser shall thereupon be entitled to a certificate or certificates of the shares bought by him, upon paying the fees therefor and for recording the transfer. If the shares or interest of the judgment-debtor had been attached in the suit in which the execution issued, the purchaser shall be entitled to all the dividends which have accrued after the attachment.^ 6. The real estate and shares in any corporation standing in the name of a married woman, which were her property at the time of her marriage, or which become her property by devise, bequest, or gift of any person, except her husband, shall not be lia- ble to be taken on execution against her husband for any debt contracted or cause of action arising after June 3, 1855. A married woman, having separate property, may be sued for any cause of action which originated against her before marriage, and her property may be attached and taken on execution in the same manner and with the same effect as if she were sole. The husband of a woman married i Gen. Sts. c. 133, §§ 43-48. BUSINESS CORPORATIONS. 69 in this State after June 3, 1855, shall not be liable to be sued for any cause of action which originated against her before marriage ; but she shall be liable to be sued for the same in the manner aforesaid.^ 7. If a person refuses or neglects to pay his tax, the collector shall levy the same, by distress or seizure and sale of his goods, including any share or interest he may have as a stockholder in a cor- poration incorporated under authority of this Com- monwealth, but excepting certain articles specified in General Statutes, c. 12, § 7. The seizure of a share, or other interest in a corporation, may be made by leaving with any officer of the corpora- tion with whom a copy of a writ may by law be left when the share of a stockholder is attached on mesne process, an attested copy of the warrant, with a certificate thereon, under the hand of the collector, setting forth the tax which the stockholder is to pay ; and that, upon his neglect or refusal to pay, the col- lector has seized such share or interest. The sale of such share or interest shall be made in the man- ner prescribed by law for the sale of goods by col- lectors of taxes in like cases, and also subject to the provisions of General Statutes, c. 133, §§ 46, 47, respecting sales on execution. If the distress or seizure is sold for more than the tax and charges of keeping and sale, the collector shall return the surplus to the owner upon demand, with an accoimt in writing of the sale and charges.^ 8. Persons holding stock in a corporation, as Ex- ecutors, Administrators, Guardians, or Trustees, 1 Gen. Sts. o. 108, §§ 7, 8. 2 Gen. Sts. o. 12, §§ 7, 10-12. 70 MANUPACTHEING CORPORATIONS. shall not be personally subject to any liabilities as stockholders ; but the estates and funds in their hands shall be liable in like manner and to the same extent as the testator, intestate, ward, or person interested in the trust-fund would be, if they were respectively living, and competent to act, and held the stock in their own names.^ 9. An officer, agent, clerk, or servant of a cor- poration, or any other person, who issues, or signs with intent to issue, any certificate of stock in a corporation ; or who issues, signs, or indorses with intent to issue, any bond, note, bill, or other obligar tion or security in the name of such corporation, beyond the amount authorized by law, or limited by the legal votes of such corporation, or its proper officers ; or negotiates, transfers, or disposes of such certificate with intent to defraud, shall be punished by imprisonment in the State Prison not exceeding ten years, or in the House of Correction not exceed- ing one year. On the trial of any person for an offence as aforesaid, the books of any corporation to which such person had access, or the right of access, shall be admissible in evidence.^ 10. An officer, agent, clerk, or servant of a cor- poration, or any other person who fraudulently issues or transfers a certificate of the stock of a corpora- tion to any person not entitled thereto, or fraudu- lently signs such certificate in blank or otherwise, with the intent that it shall be so issued or trans- ferred by himself or any other person, shall be pun- ished by imprisonment in the . State Prison not 1 Gen. Sts. c. 68, § 18. 2 Gen. Sts. c. 161, §§ 49, 52. BUSINESS COEPOE4TIONS. 71 exceeding ten years, or in the House of Correction not exceeding one year. On the trial of any person for an offence as aforesaid, the books of any corpora- tion to which such person had access, or the right of access, shall be admissible in evidence.^ 11. An of&cer, agent, clerk, or servant of a cor- poration who makes a false entry in the books there- of, with intent to defraud, and any person whose duty it is to make in such books a record or entry of tlie transfer of stock, or of the issuing or cancel- ling of certificates thereof, or of the amount of stock issued by such corporation, who omits to make a true record or entry thereof, with intent to defraud, shall be punished by imprisonment in the State Prison not exceeding ten years, or in the House of Correction not exceeding one year. On the trial of any person for an offence as aforesaid, the books of any corporation to which such person had access, or the right of access, shall be admissible in evi- dence.2 If an of&cer, agent, clerk, or servant of any incor- porated company, or if a clerk, agent, or servant of any private person, or copartnership, except appren- tices and other persons under the age of sixteen years, embezzles, or fraudulently converts to his own use, or takes, or secretes with intent so to do, with- out consent of his employer or master, any property of another which has come to his possession or is under his care by virtue of such employment, .he shall be deemed guilty of simple larceny.^ 1 Gen. Sts. 0. 161, §§ 60, B2. 2 Gen. Sts. u. 161, §§ %1, 62. s Gen. Sts. u. 161, § 38. See further, on this subject, (Jen. Sts. c. 161, 55 42-47. 72 MANUPACTjrEINGf CORPORATIONS. " A corporatioii can act only through agents. If they, while exercising the authority conferred on them, are guilty of falsehood and fraud, their prin- cipal is liable for the consequences which may flow therefrom. The true test of the liability of the principal in such cases is to ascertain whether, in committing a fraud, the agent was acting in the business of his principal. If he was engaged in the course of his employment, then parties injured by his misconduct or fraud can resort for redress to the persons who clothed him with the power to act in their behalf, and who have received the benefits resulting from his agency." ^ 12. Any shareholder who, with intent to avoid taxation, fraudulently transfers a share of corporate stock, or fraudulently causes or procures a certifi- cate of a share to be issued to any person other than himself, or in any other name than his own, or refuses to inform, or wilfully misinforms, the cor- poration respecting his name or residence ; or, hav- ing changed his residence to another city or town in this Commonwealth, wilfully omits to give notice thereof to any corporation in this Commonwealth in which he is a shareholder, shall forfeit one-half of the par value of the shares so transferred, issued or owned by him in the stock of such corporation, to be recovered by an action of tort to the use of the city or town in which he resides.^ 13. If a fictitious or pretended signature, purport- ing to be the signature of an officer or agent of a 1 Fogg V. Giiffin, 2 Allen, 1 ; Foster «. Essex Bank, 17 Mass. 479, 509; Fuller v. WUson, 3 Ad. & El., N. S. 68. a St. 1864, c. 201, § 4. BUSINESS C0EP0EATI0N8. 73 corporation, is fraudulently aflSxed to any instru- ment or writing purporting to be a note, draft, or other evidence of debt issued by such corporation, with intent to pass the same as true,' it shall be deemed a forgery, though no such person may ever have been an officer or agent of such corporation, or ever have existed. Where an intent to defraud is required to constitute the offence of forgery, or any other offence, it shall be sufficient to allege in the indictment an intent to defraud, without naming therein the particular person or body corporate in- tended to be defrauded ; and on the trial it shall be sufficient, and shall not be deemed a variance, if there appears to be an intent to defraud the United States, or any State, County, City, Town, or Parish, or any body corporate, or any public officer in his official capacity, or any copartnership, or members thereof, or any particular person.^ 14. In Watson v. Earl Charlemont, 12 Ad. & EL, quoted in Bradley v. Poole, 98 Mass., " all the judges concurred in holding that if an ujitrue representa- tion appears to be the act of the body of Directors, and it is fraudulently made, the members are all answerable for the fraud. Also, that if an untrue statement is published which is likely to induce a party to enter into' a contract, and he does so, the person who made the false statement is bound, independently of any proof that the other party was actually induced by it to contract; and that primd facie it will be taken that he was influenced by it." 1 Gen. Sts. c. 162, §§ 12, 13. 74 MANUPACTUEING COBPOBATIONS. 15. But an action cannot be maintained against the Treasurer of a corporation for false representa- tions in regard to its pecuniary ability, by reason of which credit was given to such corporation, by taking their notes in payment for property sold to them through their authorized agent, unless the false representations are in writing. "The action might have been maintained on parol proof of such representations, if they had been made by the de- fendant concerning the credit and ability of the corporation, with the intent and design to induce the plaintiff to sell goods to the defendant on credit. It would then have come within the cases of Med- hury v. Watson, 6 Met. 246, and Norton v. Huxley, 13 Gray, 285. But as the allegations in the declara- tion show that the false representations were made concerning the credit of the corporation with an intent to induce the plaintiff to part with his prop- erty to the corporation, and take their notes in pay- ment, the case is clearly within the prohibition of the statute, according to its well-settled construc- tion." i 16. The binding nature of a pecuniary compro- mise of a claim against a corporation for personal injuries sustained through its alleged default, is shown in the case of Brown v. Oity of Cambridge, 3 Allen, 474, where it was held, that, in a suit against a water-works corporation, to recover damages for an injury sustained by falling into a trench dug in a 1 MoKinney v. Whiting, 8 Allen, 207; Kimball u. Comstook, 14 Gray, 508; Wells V. Prince, 15 Gray; Mann ». Blanohard, 2 Allen, 886. See Gen. Sts. c. 105, § 4; and, in connection therewith, Gen. Sts. u. 3, § 7, vbi supra. BUSINESS CORPOEATIONS. 75 public highway, acceptance of a pecuniary compen- sation for such injury by the plaintiff, and a receipt given in return therefor by him, " in full payment and satisfaction for all claim for damages and costs in suit of," &c., is in effect not only a settlement of the suit, but a settlement of the claim made in the writ ; it is also a bar to a subsequent action against the Town, which was bound to keep the highway in repair, inasmuch as satisfaction has been received from the party upon whom, in such an action, the ultimate liability would rest. Nor can such a re- ceipt, being in the nature of a contract between the parties, be varied or controlled by parol evidence ; as, for example, by the allegation " that the suit was settled and the money paid for no other con- sideration than a purchase from said corporation of their place in that suit, leaving plaintiff's claim for the alleged damages unsettled." The plaintiff would moreover be estopped from the use of such evidence, it being an allegation of his own wrongful act in setting up a claim that was groundless, and therefore malicious. 17. " If a corporation give an order to a servant to do an act which implies the use of force and per- sonal violence to others, and the servant, in the execution of that service, goes beyond the proper limits as to the use of force, and commits a trespass by unjustifiable violence, inflicting an injury by a blow or kick, the corporation will be liable in an action of trespass therefor." The corporation and the ofiScer transmitting the order may be properly joined as defendants in an action of trespass ; " for 76 MANUFACTURING C0EP0EATI0N8. in trespass all the actors are principals, and he who commands the act, as -well as he who commits the trespass, may be joined." The liability of an ofiBcer of the corporation transmitting to the servant such an order, will depend upon the determination of the matter of fact whether, in giving the order, he acted as a mere conduit for communication between the corporation and the agent, or whether it emanated from him personally ; in the latter case only will he incur personal liability, as above, to the injured party.i 18. The nature of the peculiar privileges enjoyed by the holders of guaranteed stock, and the mode of enforcement of the same by action against the cor- poration, may be found set forth with great explicit- ness in the case of Williston v. Michigan Southern ^ Northern Indiana Railroad Oo. 13 Allen, 400, where it was decided that the holder of shares in the guaranteed stock of a corporation under a certifi- cate which expresses that " said stock is entitled to dividends at the rate of ten per cent, per annum, payable semi-annually, . . . out of the net earn- ings of said company, and is also entitled to share pro ratd with the other stock of the company in any excess of earnings over ten per cent, per an- num, and the payment of dividends as aforesaid is hereby guaranteed," " is not, by the terms thereof, constituted such a creditor of the corporation as to be entitled to maintain an action at law to recover payment of the stipulated dividends. These are 1 Hewett V. Swift, 3 Allen, 420 ; Moore v. Fitohburg Eailroad Co. 4 Gray, 466. BUSINESS CORPORATIONS. 7t declared to be payable out of the net earnings. And the stockholder of this class is also entitled to share pro raid with the general stockholders in any excess of net earnings over ten per cent, per annum. After these provisions follows the clause relied upon by the plaintiff: ' the payment of dividends as afore- said is hereby guaranteed ; ' and it applies as well to the pro raid share in the excess of earnings above ten per cent, as to the stipulation for divi- dends to that amount. The word ' dividends,' ex vi termini, imports a distribution of the funds of a corporation among its members, pursuant to a -vote of the Directors or Managers. And in the present instance we are satisfied that it must receive this, its ordinary legal and practical construction. We cannot conclude that the corporation entered into an engagement by which each guaranteed share- holder could semi-annually recover a judgment for undeclared dividends, and collect it upon execution, in competition with the claims of creditors. The plaintiff, as a stockholder, is entitled to participate in the management of the company, and the corpo- rate debts are created by officers and agents in the election' of whom each of his shares has a vote. The union of a right to receive a distributive share of the profits, or net earnings, with the right to enforce a payment of such a percentage as a debt, would be unusual, if not incongruous. Bach share represents a fixed and proportionate interest in the capital of the company, the intrinsic value of which consists in that of the railroad, its appendages, franchises, and personal property, over and above 78 MANUFACTURING CORPORATIONS. the liabilities of the corporation. To suppose such a relation to be coupled with that of an ordinary contract to pay interest on a debt, and that the same contribution to capital constitutes at once a member and creditor of the company, would destroy all distinction between capital stock and corporate indebtedness. The guaranty expressed in the cer- tificate relates to the disposition to be made of net earnings among different classes of shareholders, and cannot be construed as a contract for the pay- ment of interest. The net earnings are the -fund upoji which the stipulated dividends are made chargeable, and the guaranty is an engagement for the application of that fund to a particular class, in preference to, or priority over, the common and less favored stockholders. We do not find it necessary to consider carefully whether the phrase ' net earn- ings,' as here used, is equivalent to profits ; al- though it may be observed, that the same word ' earnings ' is employed with reference to the pay- ment of dividends to ordinary stockholders in the latter part of the certificate." In the opinion of the Court, a bill in equity, brought by all interested as holders of guaranteed stock, would be the appro- priate method of procedure in a case like the above ; " especially if a decree is sought for the payment of dividends, and not a mere injunction against making dividends to shareholders whose rights are subordi- nate to those of the plaintiff." Said bill would be " maintainable only in Courts having general juris- diction over the corporation." 19. The Attorney-General shall, when necessary, BUSINESS COEPOEATIONS. 79 prosecute corporations -which fail to make to the Legislature the returns required by law. Any civil action in which the Commonwealth is plaintiff, or ■which is brought to recover money due to the Com- monwealth, may be brought in the County in which the defendant lives, or has his usual place of busi- ness, or in the County of Suffolk. All civil actions to recover money for the benefit and to the use of the Commonwealth, may be brought by the Attor- ney-General, or a District-Attorney, in the name of the Commonwealth.^ Section IV. Miscellaneous Provisions. 1. Party contracting to sell stock must be owner, or duly au- thorized. 2. Transfer of stock belonging to person under guardianship. 3. Conveyance of shares by married woman. 4. Sends, etc., of corporation negotiable. 5. Office of State Director in certain corporations. 6. Eeligious and charitable associations liable to taxation if doing business, etc. 7. Certain companies may hold gas-light company stock. 8. Compensation to officer of corporation. 9. Eights of certain parties to new stock in case of increase of capital. 1. EvBET contract, written or oral, for the sale or transfer of a certificate, or other evidence of debt, 1 Gen. Sts. c. 14, § 20 ; St. 1866, c. 233. See further, on the subject of this section, Gen. Sts. c. 68, §§ 36-41. 80 MANUFACTURING CORPORATIONS. due from the United States or a separate State, or of any stocks, or any share or interest in the stock of a bank, company, city, or village incorporated under a law of the United States, or an individual State, shall be void unless the party contracting to sell or transfer the same is, at the time of making the contract, the owner or assignee thereof, or au- thorized by the owner or assignee, or his agent, to sell or transfer the certificate or other evidence- of debt, share, or interest so contracted for.^ In the case of Brigham v. Mead, 10 Allen, 245, it appeared that the defendant sold to the plaintiff certain shares of stock for value, the plaintiff taking from the defendant an agreement signed by him in the terms following : " Sold to J. Q. B. four hun- dred shares Vale Copper Company stock, and he has paid me five hundred dollars for the same, and I am to give him a certificate when I get the same." The sale took place March 11, 1863, an assessment was laid upon the shares April 1st, and certificates were issued in the autumn of the same year. It was held " that the agreed statement of facts does not show that the defendant made a sale of stock which he did not own. On the contrary, it is to be inferred that he did own it at the time of the sale, March 11, 1863. The fact that the company were not then prepared to issue certificates of stock, and did not actually issue them until some months afterwards, does not affect the question of owner- ship. The objection that the sale was void, on the ground that it was contrary to General Statutes, 1 Gen. Sts. c. 109, § 6; ib. o. 109, § 22; St. 1866, c. 122. BUSINESS CORPORATIONS. 81 c. 105, § 6, which prohibits the saje of stocks by persons who are not owners tliereof, or authorized by the owners to sell the same, is not valid. The object of the statute was to prohibit gambling in stocks, and not to prohibit the bond fide sale by the real owners, merely because the company had not so far perfected its arrangements for business as to be prepared to issue certificates. . . . The prin- cipal question in the case is, whether it was the duty of the seller or the purchaser to pay the as- sessment. "We think it was the duty of the pur- chaser. It does not appear that the assessment was payable or had been laid at the time of the sale; and in the absence of any express stipula- tion, the property must be understood to pass in the condition in which it was at the time of the sale. The duty of the vendor would be fulfilled if he dis- charged all such incumbrances as existed at that time. The transfer of the property as between the parties was effected by the bill of sale. The pur- pose of a certificate is not to make the transfer, but to furnish a species of evidence of a transfer which has already taken place between the parties. It is important for several collateral purposes ; but not for the purpose of a transfer as between the parties. The issuing of a certificate is not the act of the vendor, but of the corporation. The payment of the assessment properly belongs to the plaintiff, because it w^s laid upon the stock after he became the owner." 1 2. The Probate Courts in the several Counties, or 1 See Barrett v. Mead, 10 Allen, 337. 6 82 MANUPACTUpiNG CORPORATIONS. the Supreme Jijdicial Court, on the application of a Guardian or any person interested in the estate of a ward, after notice to all other persons inter- ested therein, may authorize or require the Guardian to sell and transfer any stock in the public funds, or in any corporation, or any other personal estate or effects held by him as Guardian, and invest the proceeds thereof, and all other moneys in his hands, in real estate, or in any other manner that shall be most for the interest of all concerned. Said Courts respectively may make such further order, and give such directions as the case may require for mana- ging, investing, and disposing of the estate and effects in the hands of the Guardian.^ When a person under guardianship, having a Guardian ap- pointed within this State, removes or resides out of this State, said Guardian may sell the real estate of his ward, and pay over the whole, or any part of the proceeds, and may pay over and transfer the whole or any part of his personal estate to any Guardian, Trustee, or committee appointed by com- petent authority in the state or country within which the ward resides, upon such terms, and in such manner, as the Probate Court for any County in which any such real or personal estate is found may decree, upon petition filed therefor, and after notice given to all parties interested.^ When a per- son resides out of this State, and has no Guardian appointed within this State, and has pqfsonal estate in the hands of an Administrator, Executor, or Trus- tee in this State, such Administrator, Executor, or 1 Gen. Sts. c. 109, § 22. 2 St. 1866, c. 122, § 1. BUSINESS CORPORATIONS. 83 Trustee may pay over and transfer the whole or any part of such personal estate to any Guardian or committee appointed by competent authority in the state or country within which such person resides, upon the same terms and in the same manner men- tioned in St. 1866, c. 122, § 1, above quoted.^ In the case of an assignment made by a Guardian, of stock belonging to his ward, to secure a private creditor of his own, the assignee having notice of the facts, the Guardian's successor in office may maintain a bill in equity to obtain a transfer thereof to himself. But such successor cannot maintain a bill to obtain a transfer to himself of other shares Issued to the first Guardian, without expressing his official capacity, though really belonging to the ward, and assigned by the first Guardian to a third party for value without notice of the guardianship.^ 3. No conveyance, by a married woman, of shares in a corporation shall be valid without the assent of her husband in writing, or his joining with her in the conveyance, or the consent of one of the judges of the Supreme Judicial Court, Superior Court, oi? the Probate Court, granted on her petition, in any County, on account of the sickness, insanity, or absence from the State of her husband, or other good cause ; and the husband, if within the State, shall have such notice of the petition as the judge may order. A conveyance, by a wife, of shares in a corporation as aforesaid, as well as of any personal estate which may have come to her husband, by reason of the marriage, and which remain in this 1 St. 1866, c. 122, § 2. 2 Atkinson v. Atkinson, 8 Allen, 15. 84 MANUFACTURING CORPORATIONS. State undisposed of by him, or to which he is enti- tled in her right, may, upon her petition, be authorized by the Supreme Judicial Court, in case the husband has absented himself from the State, abandoning and not sufficiently maintaining her, or in case he has been sentenced to confinement in the State Prison; and the wife may in such case be authorized to use and dispose of such property, or the proceeds thereof, during the absence or imprisonment of her husband, as if she were unmarried, also to make contracts in her own name, and to sue and be sued in law or equity as if she were sole. The authority so granted shall continue until the husband returns into the State, and claims his marital rights, or is discharged from prison, and during its continuance the wife may do all acts necessary for its full exer- cise. No suit wherein such woman is a party shall be abated by the return of her husband into the State, or his discharge from prison ; but he may, on his application, be admitted to prosecute or defend the same, jointly with her, in like manner as if they had intermarried after the commencement of the- suit. If he is not admitted as a party, the suit shall proceed to judgment and execution, as if he had not returned or been discharged from prison, and any judgment recovered against the wife may be after- wards enforced against him in like manner as if it had been rendered against her before their intermar- riage. Every petition for any of the above-mentioned purposes may be filed, heard, and determined in the Supreme Judicial Court in any County. The peti- tion shall be presented, and notice thereon given in BUSINESS COEPQEATIONS. 85 the manner prescribed for presenting and giving notice of libels for diyorce when the adverse party is without the State.^ 4. Bonds and other obligations under seal for the payment of money purporting to be payable to the bearer, or some person designated or bearer, or pay- able to order, issued by any corporation or joint-stock company, shall be negotiable in the same manner and to the same extent as promissory notes.^ 5. "When any vacancy may occur during the recess of the Legislature, in consequence of death, or resignation, or removal from the State, in the office of State Director of any corporation in which by law the State is authorized to be represented, or in any office filled by election of the Legislature, for which no other provision is made, the Governor, with the consent of the Council, shall appoint some suitable person to fill any such vacancy, who shall hold office till the assembling of the Legislature, and until another shall be chosen in his stead.^ 6. The real and personal estate belonging to as- sociations for religious, charitable, and educational purposes, organized under the provisions of General Statutes, c. 32, shall not be exempted from taxation, in any case where part of the income or profits of their business is divided among members or stockholders, or where any portion of such estate is used or appro- priated for other than educational, chai-itable, or religious purposes.* 7. Any manufacturing, machine, or other company 1 Gen. Sts. ^. 108, §§ 3, 31-35. 2 Gen. Sts. c. 53, § 6. a St. 1860, ,,. 216. * Gen. Sts. u. 32, §§ 1, 4, 5. 86 MANUFACTURING CORPORATIONS. having its place of business in any place into whicli it is proposed to introduce the manufacture of gas for light, may hold not exceeding ten per cent, of the stock in such gas-light company.^ 8. Upon the subject of the compensation to be al- lowed to an officer of a corporation, " in the absence of any vote or other express agreement, on the part of the corporation or its Directors, to pay for services rendered," it is held, in the case of Sawyer v. The Pawners' BanTc, 6 Allen, 207, " that the mere rendi- tion by him of meritorious or valuable services in that capacity is insufficient to justify a legal implication that the party in whose behalf they were performed promised to pay for them. It frequently happens that the officers of public and private corporations assume weighty responsibilities, perform much labor, and render very valuable services graituitously, and without the least expectation on the one side or the other that there is to be any pecuniary recompense made in return. To render the person or party for whom such services are performed liable therefor, as a debtor, under an implied promise that they should be duly recompensed in money, it is essential not only to show that they were valuable, but that they were rendered under such circumstances as make it fairly presumable that the party allowing them to be rendered, and receiving the benefit to be derived from them expected, or at least ought to have ex- pected, that they were to be paid for. Such a presumption arises in reference to any species of work, labor, or employment, which is usually and 1 Gen. Sts. c. 61, § 18. BUSINESS CORPORATIONS 87 commonly the subject of hire and reward, and paid for, whether any specific bargain is or is not made concerning it." ^ 9. A leading case in reference to the respective rights of parties interested as tenant for life and as remainder-man in the shares of a corporation which has increased its capital stock, is that of At- kins T. Albree, 12 Allen, 359, with which may be com- pared the recent case of Minot v. Paine in 98 Mass. The facts in the former case, and the rulings thereon of the Court were as follows : A testator devised cer- tain shares of stock in trust to secure the income thereof to his widow ; said shares, at her decease or marriage, to become the absolute property of his nephew. The company having voted to increase its capital stock, the stockholders were allowed to sub- scribe for the new shares, at the rate of one new share to every four old ones, and the Directors were authorized to dispose of all new shares- not taken by a certain date, paying over the premium realized therefor to the parties entitled to the right of sub- scribing for them. One of the Trustees subscribed for new shares to the extent of the privilege apper- taining to the shares held in trust as above ; but the Trustees had no uninvested funds, and the nephew claimed the right to take the new shares, or the premium received for them, to his own use, and the right of subscribing to said shares was accordingly sold by the Directors; the net proceeds of the sale were held by the Treasurer of the corporation, 1 New York & New Haven Railroad Co. v. Ketohnm, 27 Conn. 170 ; Loan Association ■». Stonemetz, 29 Penn. State R. 634. 88 MANUFACTURING COEPOEATIONS. subject to the order of the Trustees ; the widow, and the nephew as remainder-man, each claiming the ownership of these proceeds. Upon the bill in equity, brought to determine the rights of the parties, the opinion of the Court was delivered by the Chief Justice as follows: "It seems to us that the proceeds of the sale of the right to take new shares in the corporation are to be regarded as an extraordinary bonus or addition to the stock which was devised in trust for the benefit of the widow of the testator for her life or widowhood, with remainder over to his nephew ; and that this increment must be treated as capital, and added to the principal fund, the income of which is to be paid to the widow, as directed by the will. The right or privilege to take new shares in a corporation, upon an increase of the capital stock, within the limits fixed by the charter, is a benefit or interest which attaches to stock, not as profit or income derived from the prosecution of the corporate business, but as inher- tent in the shares in their very creation. Gray v. Portland Bank, 3 Mass. 364. It is true that the value of this right must always depend essentially on the success with which the operations of the cor- poration have been conducted, and on the prospect of future income and profits which the condition of the business of a corporation holds out to its stock- holders. But this does not change the nature of the right or interest. It is still an original incident or attribute appertaining to [each share, a right to a larger participation or ownership in the capacity of the corporation to earn profits, and not the gain or BUSINESS COEPORATIONS. 89 income itself actually earned by the corporation. In this view the value of the right must be regarded as a part of the corpus of the property devised in trust. The bequest of the testator is of the income only of the shares during the life or widowhood of his wife. These shares are to be held in trust until her death or marriage, and, on the happening of either of these events, the shares are to vest absolutely in the nephew. The intent is clear that his wife shall receive only the gains or profits on the shares as they shaU ' accrue or be received by the Trus- tees.' This gives her no property in the shares, or in money derived from the sale of an interest which formed a part of the original right appertaining to the shares ; but only to receive the entite income to be derived therefrom, whether it continues to be represented by the number of shares held by the testator at his decease, or a portion of it becomes converted into money by the'sale of the right to take new shares in the capital stock of the corporation. Nor, on the other hand, did it give the nephew a right to demand and receive any part of the body of the property, or of any right or interest which apper- tained to the original shares in their creation, merely because a portion of such right or interest had ceased to exist as shares, and had been changed into money. The original shares, and the money received from the sale of rights to take new shares in the capital stock of the corporation, constitute the body of the trust property, which is to be treated as the capital or principal fund, the income of which is to be paid to the widow, as directed by the will, and 90 MANUFACTURING C0EP0EATI0N8. the whole is to go to the nephew on the happening of either of the events therein designated." ^ Section V. Insolvency and Dissolutiofti, 1. Insolvent corporations. 2. Corporations may be dissolved on petition. 3. With privilege of continuing three years to close their concerns in the above and other cases. 4. Appointment of receivers, and their duties. 5. Equity jurisdiction of the Supreme Judicial Courtin such cases. 6. Certain corporations continued with specified rights and liabilities. 7, 8. Certain' charters subject to legislative amendment, alteration, or appeal. 1. Claims on account of bills of exchange, in- dorsements, money due on bottomry or respondentia bonds, paid upon indorsements, or as surety, may be proved against an insolvent corporation before the making of the last dividend, in like manner as against the estate of an insolvent debtor before the making of the first dividend. The schedules to be furnished shall be prepared and furnished by the Treasurer, or other financial officer of the corpora- tion, with such assistance as he requires from the other officers; and all the provisions of General Statutes, c. 118, which apply to the debtor, or set forth his duties in regard to executing papers, sub- mitting to examinations, disclosing, making over, 1 See also Hill on Trustees, 386, 446; Paris v. Paris, 10 Vesey, 185; Witts V. Steere, IS Vesey, 368. BUSINESS CORPORATIONS. 91 secreting, concealing, conveying, assigning, or pay- ing away liis money or property, shall, in like man- ner, and with like force, effect, and penalties, apply to each and every officer of the corporation in rela- tion to the same matters concerning the corporation, and the money and property thereof. And said officers shall, at the second meeting, severally make and subscribe an oath, according to the form given in General Statutes, c. 118, § II6.1 The assignee of an insolvent corporation who has access to their books, and is familiar with their affairs, who knows that shortly before the failure certain goods were delivered to a pre-existing cred- itor, a note held by him given up, and a balance struck, waives all right to question the validity of such transactions as fraudulent against the insolvent law.2 In the case of Merchants' Bank v. Stevenson, 7 Allen, 489, in which relief was sought by a creditor of an insolvent corporation, by means of a bill in equity against the Directors, it was held, that "very gross laches, fully justifying a strict application by the Court of the maxim, vigilantihus non dormientibus sulvenit lex," was shown by the facts following : the plaintiffs' claims accrued and the corporation be- came insolvent in 1854 ; the biU was filed Sept. 22, 1859 ; a demurrer was sustained Nov. 29, 1862 ; and, Aug. 1, 1863, a motion was filed to amend, by supplying the requisite averments. These laches, unexplained or excused, especially the eight months' 1 Gen. Sts. 0. 118, §§ 115, 116. See also §§ 113, 114. 2 Hazelton v. Allen, 3 Allen, 114. 92 ■ MANUFACTURING CORPORATIONS. delay in applying for an amendment after the de- murrer was sustained, during which time the suit was practically out of Court, and the bill liable to be dismissed if application had been made to the Court, induce a refusal to allow the amendment whereby the plaintiffs' claim, now barred by the Statute of Limitations, would be revived. In the view of the Court, " it certainly is most reasonable that creditors of an insolvent corporation, if they intend to rely on a liability of this nature, should seek to enforce it promptly. Delay may work very great injury to those who may be subject to the liability, by depriving them of the means of compelling an equal contribution among themselves. A Director who, when the liability accrued, and the corporation became insolvent, might have been able to pay his share or proportion of the excess for which all are liable, may, after the lapse of a series of years, become unable to make contribution. Nor is this all. A liability of this sort is necessarily indefinite in amount, and can only be determined at the suit of a creditor or creditors seeking to enforce the remedy in their own behalf, and in behalf of other corporate creditors. If they are guilty of laches in bringing their claims to an adjudication, and thus subject parties and their estates to an un- certain liability for a long period of time, they cer- tainly do not put themselves in a position to ask much in the way of favor or indulgence at the hands of the Court, when it can be granted only by pro- longed delay, to the injury and oppression of the other parties to the suit." Moreover, "as this is BUSINESS COEPOEATIONS. 93 in the nature of a creditor's bill, to which all the creditors of the insolvent corporation may hereafter become parties, if the suit is continued in Court, the allowance of the amendment asked for by the plain- tiffs may revive, not only their alleged rights, but also those of other creditors who have neglected now for more than eight years to take any steps towards the prosecution of their claims." ^ Stockholders of an insolvent corporation who have been compelled to pay debts of the corporation subsequently to the commencement of proceedings in insolvency have no equitable claim to ask that such payments should be set off against debts due from them to the corporation. Such payments can- not be proved as debts. A fortiori, they cannot be the subject of a sef^off, the effect of which would be in many cases to give a preference to them as debts over claims held by creditors of the corpora- tion prior to its insolvency.^ 2. When a majority in number or interest of the members of a corporation desire to close their concerns, they may apply, by petition, to the Su- preme Judicial Court, setting forth in substance the grounds of their application ; and the Court, after due notice to all parties interested, may proceed to hear the matter, and, for reasonable cause, decree a dissolution of the corporation. Corporations so dis- solved shall be deemed and held extinct in all re- spects as if their charters had expired by their own limitation.^ 1 See Wiley v. Tale, 1 Met. 553. ^ Uowe v. Snow, 3 Allen, HI. » Gen. Sts. u. 68, \ 36. 94 MANUFACTURING CORPORATIONS. In regard to the alienation by a corporation of its franchise, it is said by the Court, in case of Com- monwealth V. Smith, 10 Allen, 448, that " there are certainly great, and in our opinion insuperable ob- jections to the doctrine that its franchise can be alienated, and its powers and privileges conferred by its own act upon another person or body without authority other than that derived from the fact of its own incorporation. The franchise to be a cor- poration clearly cannot be transferred by any corpo- rate body of its own will. Such a franchise is not in its own nature transmissible. . . . Although the franchise to exist as a corporation is distinguishable from the franchises to be enjoyed and used by the corporation after its creation, yet the transfer of the latter differs essentially from the mere alienation of ordinary corporate property. ... A manufacturing company may sell its mill and buy another ; but a railroad company cannot make a new railroad at its pleasure." ^ 3. Corporations whose charters expire by their own limitation, or are annulled by forfeiture or other- wise, shall, nevertheless, be continued bodies cor- porate for the term of three years after the time when they would have been so dissolved, for the purpose of prosecuting and defending suits by or against them, and of enabling them gradually to settle and close their concerns, to dispose of and convey their property, and to divide their capital stock ; but not for the purpose of continuing the business for which they were •established.^ 1 See also Richardson v. Sibley, 11 Allen, 65, and cases there cited. 2 Gen. Sts. c. 68, § 36. BUSINESS CORPORATIONS. 95 4. When the charter of a corporation expires or is annulled, or the corporation is dissolved, as above provided, the Supreme Judicial Court, on application of a creditor, stockholder, or member, at any time within said three iyears, may appoint one or more persons to be receivers or Trustees, to- take charge of its estate and effects, and collect the debts and prop- erty due and belonging to it ; with power to prose- cute and defend suits in the name of the corporation or otherwise, to appoint agents under them, and do all other acts which might be done by such corpora- tion if in being, that are necessary for the final set- tlement of the unfinished business of the corporation. The powers of such receivers may be continued as long as the Court deems necessary for said pur- poses. The receivers shall pay all debts due from the corporation, if the funds in their hands are suf- ficient therefor, and if not, they shall distribute the same ratably among the creditors who prove their debts in the manner directed by any order or decree of the Court for that purpose. If there is a balance remaining after the payment of the debts, the re- ceivers shall distribute and pay it to and among those who are justly entitled thereto as having been stockholders or members of the corporation, or their legal representatives.^ ' 5. The Court shall have jurisdiction in equity of the application, and of all questions arising in the proceedings thereon ; and may make such orders, injunctions, and decrees therein as justice and equity require.^ 1 Gen. Sts. o. 68, §§ 37, 39. 2 Gen. Sts. c. 68, § 38. 96 MANUFACTURING COEPOEATIONS. 6. Corporations existing at the enactment of the General Statutes, shall continue to exercise and en- joy their powers and privileges according to their respective charters, and to the laws in force, and shall continue subject to all the liabilities to which they are now subject ; except so far as said powers, privileges, and liabilities are modified or controlled by the provisions of said General Statutes.^ 7. Every act of incorporation passed after March 11, 1831, shall be subject to amendment, altera- tion, or repeal, at the pleasure of the Legislature ; but the corporation, notwithstanding such repeal, shall be subject to the provisions of General Stat- utes, c. 68, §§ 36, 37 ; and such amendment, altera- tion, or repeal shall not take away or impair any other remedy which may exist by law, consistently with those sections, against the corporation, its members, or officers, for any liability previously in- curred.2 In regard to the power of the Legislature to amend, alter, or repeal acts of incorporation passed* after March 11, 1831, it is said by the Court, in the case of Burfee v. Old Colony ^ Fall River Railroad Co. 5 Allen, 230, that " whatever may be the extent of the authority which is thereby retained by the Legislature to modify or change the charters of cor- porations without or against their consent, there would seem to be no reason to doubt that, with the concurrence of the corporation, manifested in the mode pointed out by law, the Legislature may make any alteration in, or addition to, the power and au- 1 Gen. Sts. c. 68, § 40. 2 Gen. Sts. u. 68, § 41. BUSINESS CORPORATIONS. 97 thority conferred by the original act of incorporation, and not foreign to the purposes and objects for which it was enacted, and which it was designed to accomplish, which may seem to be expedient or necessary. No breach of contract would be thereby occasioned. Such action would be in precise ac- cordance with the terms on which the grant of the franchise was made. ... It is a mistake, therefore, to say, that the contract of a stockholder with a cor- poration, established under our statutes, binds the latter to undertake no new enterprise, and engage in no business or operation other than that contem- plated by the original charter. This interpretation puts aside the express provision authorizing an amendment or alteration of the act of incorporation, and gives it no effect as against a stockholder with- out his assent, though he bought his stock or sub- scribed for his shares subject to the legal effect of such a stipulation. ... In Grease v. Bdbcock, 23 Pick. 342, it was expressly decided that corporators, by accepting a charter, directly agree to adopt the pro- vision, reserving to the Legislature the right to amend, alter, or repeal the act of incorporation as a constituent part of their contract ; and it has often been decided, under similar provisions in the statutes of other States, that amendments or changes, either abridging the corporate authority, or enlarging and extending it so as to embrace new enterprises, and to incur additional burdens and liabilities, when duly adopted by the corporation, are valid and binding on a dissenting minority, as well as on those corporators 7 98 MANUPACTUEING CORPORATIONS. by -whose votes the amending act has been accepted and approved."^ 8. And to the objection, that the above doctrine " puts the minority of the stockholders entirely within the control of the Legislature and a majority of the stockholders, without limit or restraint on the exercise of the power, so that corporations might be diverted to purposes and objects wholly foreign to those for which they were originally established, and stockholders made to participate against their will in undertakings which they never contemplated, and which they deemed inexpedient or ruinous," it may be replied, as has been -already noted in an- other place, that if this be so, " it is a consequence of which no stockholder can reasonably complain, because it is a result which flows from the contract into which he has voluntarily entered. A restraint or limit on the power of the Legislature to alter or amend a charter, even with the consent of the corporation, may, perhaps, be found in the doctrine recognized in some of the English cases, that the enlargement of corporate powers shall not be ex- tended so as to authorize enterprises or operations different in their nature and kind from those com- prehended within the terms of the original charter, but shall be confined to purposes and objects, ejusdem generis, with those for which the corporation was 1 Buffalo, &o. Railroad v. Dudley, 4 Keman, 336, 348, 354 ; Northern Railroad ». Miller, 10 Barb. 282; Meadow Dam Co. v. Gray, 30 Maine, 647 ; Oldtown, &o. Railroad v. Veazie, 39 Maine, 680 ; Banet v. Alton, &o. Railroad, 13 Illinois, 604. BUSINESS CORPORATIONS. 99 primarily granted.^ No practical weight or impor- tance can, therefore, be reasonably attached to the argument against the right of the Legislature to amend or alter the charters of corporations under our statutes, drawn from the peril to which it exposes the property and interests of dissenting minorities of stockholders. The good faith of the Legislature, and the self-interest of the majority, will ordinarily be a sufficient protection against any wanton or op- pressive use of their power. Against any dishonest or fraudulent abuses of it, a sufficient remedy can always be had in the courts of justice." The Court disclaim any intention of attributing to the Legislature " power to change or modify an act of incorporation in such a way as to affect, in a material particular, a contract into which the corporation has entered with a third person. Such an exercise of legislative power would be unconsti- tutional and invalid,' because it would impair the obligation of the contract." ^ And adds, " all that we mean to determine is, that the obligation of the contract which subsists between the corporation and a stockholder, by virtue of his being a proprietor of shares in the corporate stock, is not impaired by an act of the Legislature which amends and alters the charter, and authorizes the corporation to undertake new and additional enterprises of a nature similar to those embraced within the original grant of power, 1 See Ware v. Grand Junction Water Works, 2 Ru98. & Mylne, 470 ; Ffooks «. Southwestern Railway, 1 Sm. & Gif. 142. 2 Hamilton Insurance Co. v. Hobart, 2 Gray, 547. 100 MANUPACTUEING CORPORATIONS. if such act is accepted by a majority of the stock- . holders in the mode provided by law." The provisions of St. 1865, c. 283, and of other recent Acts, although perhaps applicable, with certain specified limitations, to all " corporations organized for business purposes, or having stock divided into shares," seem, nevertheless, to be capable of consideration with at least equal propriety under the head of " Manufacturing Corporations in General," to which, in the ensuing chapter, reference is hereby made. IN GENERAL. 101 CHAPTER IV. MANUFACTURING CORPORATIONS IN GENERAL. Section I. Returns and Taxation. 1. Authority of Legislature to tax manufacturing property derived from Constitution. 2. Distinction between " tax " and " excise." 8-5. A " tax" must be " proportional," otherwise it is in contravention of the Constitution of the Commonwealth. 6. And of the United States. 7. Returns from Assessors to Secretary of the Commonwealth. 8. Returns from Assessors to Treasurer of the Commonwealth, (Tax Commissioner.) 9. Returns from corporations to Tax Commissioner. 10. Valuation of corporate franchise, and of real estate and machinery, by Tax Commissioners. 11. Deduction of value of real estate allowed in case of Massachusetts corporations only. 12. Rules as to taxation of water-power companies. 13. Tax Commissioner to notify Treasurers of Corporations, and Treasurers of cities and towns. 14. Payment of tax by corporation. 15-20. Assessments authorized by St. 1864, c. 208, § 5, and by St. 1865, c. 283, § 5, an excise on the corporate franchise. 21. Right of levying the same not to be defeated by neglect of muni- cipality to make returns. 22. Exemption of shares from local assessment in certain cases. 23. Exemption in case of stock held by copartners, and in fiduciary capacities. 24. Privileges and remedies through Board of Appeal. 25. Privileges and remedies through Assessors, Couijty Commis- sioners, etc. 26. Penalties. — Evidence. 27. Joint liability of lessor and lessee of corporate property. 28. Corporation to submit books and officers to examination. 29. Tax on certain franchises. 30. Treasurer of Commonwealth to be Tax Commissioner. 102 MANUFACTURING CORPOBATIONS. 1. The power of the Legislature to tax the prop- erty of manufacturing corporations, or their shares in the liands of individuals, or any products or profits of manufacturing industry, is derived from the Constitution of the Commonwealth,^ by which " full power and authority is given and granted to the General Court to impose and levy proportional and reasonable assessments, rates, and taxes upon all the inhabitants of, and persons resident, and estates lying, within the said Commonwealth ; and also to impose and levy reasonable duties and ex- cises upon any produce, goods, wares, merchandise, and commodities whatsoever brought into, produced, manufactured, or being within the same." 2. The distinction between the terms " tax " and " excise " in this connection is clearly brought out in the case of Oliver v. Washington Mills^ where the former is defined as "a charge apportioned either among the whole people of the State, or those re- siding within certain sections, and required to be so imposed that, if levied for the public charges of government, it shall be shared according to the estate, real and personal, which each person may possess ; or, if raised to defray the cost of some local improvement of a public nature, it shall be borne by those who will receive some special and peculiar benefit or advantage which an expendi- ture of money for a public object may cause to those on whom the tax is assessed." An " excise," on the 1 Const, chap. I. Sec. 1, Art. i. 2 Oliver v. Washington Mills ; Same v. Webster Bank ; Same s. Fire- men's Insurance Company; Same ii. Boott Cotton Mills, 11 Allen, 26S. IN GENERAL. 103 other hand, is said to be " based on no rule of ap- portionment or equality whatever, being a fixed, absolute, and direct charge laid on merchandise, products, or commodities, without any regard to the amount of property belonging to those on whom it may fall, or to any supposed relation between money expended for a public object and a special benefit occasioned to those by whom the charge is to be paid." 1 3. The Constitution further requires that the tax should be " proportional." " If any force or effect is to be given to this word, it must be regarded," say the Court, " as a restriction on the power of the legislative department of the government, and to have been intended to prevent the exercise of an unlimited right to impose taxes. Construed with reference to the context, the meaning of the word is clear and definite. In relation to those expenses which are called in the Constitution ' the public charges of government,' as distinguished from local expenditures, or charges incurred for the benefit of a particular section or locality, the design of the framers of the Constitution was that these, or a por- tion thereof, should be defrayed by means of taxa- tion ; and that, in assessing the needful amount, it should be laid on property, real and personal, within the Commonwealth, so that taking ' all the estates lying within the Commonwealth ' as one of the ele- ments of proportion, each tax-payer should be obliged to bear only such part of the general burden as the 1 Portland Bank ». Apthorp, 12 Mass. 252, 255; Commonwealth v. Peoples' Savings Bank, 5 Allen, 431. 104 MANUFACTUBINGf COEPOEATIONS. property owned by him bore to the whole sum to be raised. . . . Having regard to these explicit provisions of the Constitution, we think it clear beyond dis- pute, that an unlimited discretion on the subject of taxation, especially as to money raised for the pub- lic charges of government, was not reposed in the Legislature. That the power to impose taxes, either directly, by the immediate officers or agents of the Commonwealth, or by means of authority delegated to towns or cities, is vested in the Legislature under the Constitution, and that this power extends over every species of property within the Commonwealth, as well as over persons residents therein, does not seem to be open to question. Lideed, it is conferred in express terms ; but the limitation of the power is as express as the delegation of it. While, on the one hand, the authority is conferred in broad and comprehensive terms, so on the other hand the prin- ciple on which it is to be exercised is clearly de- fined." In regard to the case under discussion, (which turned upon the constitutionality of St. 1863, c. 236, levying an assessment of one fifteenth upon the dividends belonging to non-resident stock- holders,) the Court say, " the contention is, not that the Legislature had not full authority to tax the shares of non-resident owners. This is conceded. But the controversy is as to the method in which the power has been exercised, and whether the stat- ute has not prescribed a rule of taxation which can- not be carried into effect without exceeding the limi- tation imposed by the Constitution on that power," . . . inasmuch as "the subject of the tax or ex- IN GENERAL. 105 cise is not the real or personal property of the cor- poration, nor yet its franchise or corporate power and capacity ; but the ' estate or commodity ' whigh is to be liable to the assessment provided for by the act, is that portion of the dividends which may be- come due and payable to stockholders residing out of the Commonwealth," which dividends " cannot in any just sense be regarded as belonging to the corporation, or as fit subjects of an assessment which is to constitute a corporate charge or burden." 4. And in pronouncing the unconstitutionality of this particular statute, the Court base their action on the allegation, that the tax imposed by it is not in any just sense " proportional," because " it is im- posed as an absolute fixed tax on certain property belonging to a designated class of persons, without any reference to the elements of proportion which usually and properly enter into and form the basis of assessments for public charges ; . . . and when a tax is assessed on no rule of proportion, but is laid arbitrarily at a certain fixed amount on one species of property as respects its ownership, without any regard to other elements which ought to enter into the basis of taxation, then it is clearly unconstitu- tional and void." They say that they " cannot up- hold the tax in controversy as being within the con- stitutional authority of the Legislature," because " the power of taxation granted to the Legislature for general purposes is expressly limited by the Constitution to the imposition of proportional taxes ' upon all the inhabitants of, and persons resident, and estates lying within, the said Commonwealth.' " 106 MANUFACTURING CORPORATIONS. Neither can the Court regard the " words which seem to limit and restrain the authority of the Legis- lature in the matter of taxation, as not intended to be obligatory in such sense as to render an observ- ance of them essential to the validity of legislative enactments, but as designed to be directory only, indicating a rule which was to be binding on the conscience of legislators, and to guide their action, but which was not of the essence of the authority delegated to them by the Constitution," inasmuch as " words and phrases will be held to be directory only when it is clear that the intent was to use them in such a sense, or when a different construction would be attended with unreasonable, absurd, or incon- gruous results." 5. It will be noticed, that the Court find nothing in the provisions of the Constitution above cited, forbidding the taxation of shares of non-resident owners, a power which they take to be " conceded," but confine themselves to discussing the mode of ex- ercisuig that power. And in condemning the particu- lar form of this taxation presented by the case at bar, namely, the taxation of the dividends declared upon these shares, they remark further in regard to its inequality and lack of proportion, that " it is laid only on a certain class of stockholders, those resid- ing out of the State, leaving all others who enjoy the same privilege, and receive a like profit or gain, en- tirely exempt from any similar charge. This is not the only inequality. Shareholders in one class of corporations, who are resident in other States, are subjected to a rate of assessment higher thaii the IN GENERAL. 107 same class of shareholders in other corporations. In manufacturing corporations, the profits out of which dividends are declared are diminished by a tax, imposed under the general tax act, on the ma- chinery belonging to the corporation. To the extent of his share, or proportion of this tax, each foreign shareholder in effect is subject to it, and pays the amount thereof out of his dividend, in addition to the excise thereon. But corporations which are established for purposes other than the carrying on of the trade or business of manufacturing, are sub- ject to no such tax on their personal property as that imposed on machinery; so that shareholders in those corporations in fact pay the excise only. The result is, 'that the excise is not only imposed on dividends due to one class of stockholders, and not on those due to another class in the same cor- poration, but a higher rate of excise is paid by non-resident stockholders in one class of corpora- tions, than by foreign stockholders in all other cor- porations." 6. The final objection of the Court to the validity of the excise is based upon its inconsistency " with that provision of the Constitution of the United States, which secures to the citizens of each State all the privileges and immunities of citizens of the several States.^ This clause of the Constitution was doubtless taken and condensed from Art. 4, § 1, of the articles of confederation and perpetual union, adopted by Congress July 9, 1778, and which formed the basis of a national government for the United 1 Art. 4, § 2. 108 MANUFACTURING CORPORATIONS, States prior to the adoption of the Constitution. It was thereby provided, that the 'people of each State should enjoy in any other State all the privi- leges of trade and commerce, subject to the same duties, impositions, and restrictions as the inhabi- tants thereof respectively.' The object of substitut- ing the Constitution for the Articles of Confedera- tion, was to make a more perfect union. One of the most efficient methods of effecting this purpose was to vest in the general government the power to regu- late not only foreign trade and commerce, but also that between the different States of the Union, and to secure an equality of rights, privileges, and im- munities in each State for the citizens of all the States. It is obvious, that the power of a State to impose different and greater burdens or impositions on the property of citizens of other States, than on the same property belonging to its own subjects, would directly conflict with this constitutional pro- vision. By exempting its own citizens from a tax or excise to which citizens of other States were sub- ject, the former would enjoy an immunity of which the latter would be deprived. Such has been the judicial interpretation of this clause of the Consti- tution, by Courts of justice in which the question has arisen." ^ 7. The Assessors of the several cities and towns shall return to the Secretary of the Commonwealth, upon the first day of September, every third year, commencing Sept. 1, 1861, upon suitable forms, 1 Corfield v. Coryell, 4 Wash. C. C. 380, 381; Campbell v. Morris, 3 Har. & MoHen. 636, 654; Crandall v. State, 10 Conn. 343. IN GENERAL. 109 to be furnished them by the Secretary on or before the first day of June, the number and names of the several industrial corporations in their respective cities and towns, with the amount of the capital stock owned by each, reckoned at the par value thereof, the number of shares issued, and the amount for which the real estate and machinery are taxed in such cities and towns ; specifying the num- ber of shares in each company which are taxed in such cities and towns, and the value of such shares as they stand upon the assessors' books ; from which returns the Secretary shall make a digest in con- venient form for the use of the Legislature, causing the same to be printed on or before the first day of January, of the years above specified, and one copy to be forwarded to the Clerk of each city and town in the Conunonwealth, in addition to the number provided for the Legislature.^ 8. The Assessors of the several cities and towns shall annually, on or before the first Monday of August, return to the Tax Commissioner of the Commonwealth, the names of all corporations, ex- cept banks of issue and deposit, having a capital stock divided into shares, chartered by this Com- monwealth, or organized under the general laws, for purposes of business or profit, and established in their respective cities and towns, or owning real estate therein, and a statement in detail of the works, structures, real estate and machinery owned by each of said corporations, and situated in such city or town, with the value thereof on the first day 1 St. 1861, 0. 171, §§ 1, 3, 4. 110 MANUFACTURING CORPORATIONS. of May preceding, and the amount at which the same is assessed in said city or town for the then current year. They shall also at the same time, return to said Tax Commissioner the amount of taxes laid, or voted to be laid, within said city or town, for the then current year, for State, county, and town purposes, including highway taxes.^ 9. Every corporation chartered by this Common- wealth, or organized under the general laws for purposes of business or profit, having a capital stock divided into shares, excepting banks of issue and deposit, and certain mining, oil, and quarrying corporations specified in St. 1865, c. 283, § 8, shall annually, between the first and tenth day of May, return to said Commissioner, under the oath of its Treasurer, a complete list of its shareholders, with their places of residence, the number of shares be- longing to each on the first day of May, the amount of the capital stock of the corporation, its place of business, the par value and the market value of the shares on said first day of May. Such return shall in the case of stock held as collateral seciirity, state not only the name of the person holding the same, but also the name of the pledger and his residence. The returns shall also contain a statement in detail of the works, structures, real estate, and machinery owned by said corporation, and subject to local tax- ation within the' Commonwealth, and the location and value thereof. Corporations, other than rail- road and telegraph companies and those embraced 1 St. 1865, 0. 283, §§ 1, 12. See also the general provisions of St. 1864, u. 208, embodied in the St. 1865, c. 283. IN GENERAL. Ill in St. 1865, c. 283, § 8, as aforesaid, shall also re- turn the amount, value, and location of all works, structures, real estate, and machinery owned by them, and subject to local taxation without the Commonwealth.^ 10. The Tax Commissioner shall ascertain from the returns, or otherwise, the true market value of the shares of each corporation included in the pro- visions of the preceding section, and shall estimate therefrom the fair cash valuation of all of said shares constituting the capital stock of such cor- poration on the first day of May next preceding, which shall be taken as the true value . of its cor- porate franchise for the purposes of the said St. 1865, c. 283. He shall also ascertain and deter- mine the value and amount of all real estate and machinery owned by each corporation, and subject to local taxation, and to certain deductions by said Act provided as hereinafter stated; and for this purpose he may take the amount or value at which such real estate and machinery are assessed at the place where the same are located as the true amount or value ; but such local assessment shall not be con- clusive of the true amount or value thereof.^ 11. In construing the provisions of General Stat- utes, c. 11, § 12, cl. 2, it is said by the Court, in the case of Bwight v. Mayor, ^c. of the City of Boston, 12 Allen, 316, that " shares in a manufac- turing corporation are personal estate, and as such are taxable in the place where the owner resides. 1 St. 1865, u. 283, § 3. See Appendix " A." 2 St. 1865, 0. 283, § 4. See also Gen. Sts. o. 11, § 12, Second. 112 MANUFACTUEING CORPORATIONS. Ill the absence of any statute authorizing a deduc- tion, in making an assessment of any portion of the capita] which they represent, they are to be taxed at their fair market value, and as representing so much personal estate held by the owner. The enactments in General Statutes, c. 11, § 12, cl. 2, making provision for assessing the machinery and real estate of such corporations in the towns in which they are situated, and requiring a deduc- tion from the value of the shares to a corresponding amount, are entirely local in their character, and apply only to manufacturing corporations chartered within the Commonwealth. The clause in this sec- tion of the statute, requiring a deduction of the value of machinery and real estate, is not to be taken as a general provision regulating the taxa- tion of all shares in manufacturing corporations, wherever the corporations may be situated, but as directly connected with the previous clause, requir- ing the assessment of the machinery and real estate in the towns where the machinery is situated and employed. That provision can only be applicable to manufacturing corporations established within this Commonwealth, as it is only in relation to such corporations that our Legislature could so require. As to them, having provided for taxation of a cer- tain part of the capital in the towns in which they were situated, the statute requires a deduction of a like amount from the value of the shares, in order to avoid double taxation in this Commonwealth of property wholly taxable here. But our whole sys- tem of taxation, as established and practised, is to IN GENERAL. 113 disregard the liability of shares in foreign corpora- tions to taxation in the States where they are situ- ated. Thus shares in foreign railroad corporations, held by citizens of this State, are fully taxed here, no deduction being made for any taxation to which the corporations are subject in the States where they are situated. So it is in regard to shares held by our citizens in banks, insurance companies, and other moneyed corporations situated in other States. Such shares, when held by our citizens, are here treated as so much personal estate, following the person of the owner, and taxable at their full value in this Commonwealth, regardless of what may be the foreign law as to taxation of the capital, or any part of it elsewhere." Evidence having been intro- duced showing that the established practice of the assessors of the City of Boston from the year 1842 to the passage of St. 1864, c. 208, in assessing shares of the capital stock of manufacturing cor- porations, had been to deduct the value of the real estate and machinery belonging thereto, and taxed to the corporations, without discrimination between corporations established in or out of the Common- wealth ; and that, until 1865, shares of the capital stock of foreign manufacturing corporations had been assessed on their market value, deducting the value of 'their real estate and machinery, — it was remarked by the Court that " the evidence of usage was insufficient to control the legal interpretation of a provision of the statute." 12. In connection with the principle laid down in 8 114 MANTJFACTURING CORPORATIONS. the case just cited, to the effect that shares in cor- porations out of the State, held by residents of this Commonwealth, are to be taxed here at their full market value, regardless of any local taxes paid by sucli corporations, it may be well to note the rule in reference to the taxation of the real estate belong- ing to the class of quasi manufacturing corporations known as water-power companies, whose real estate partakes of a character which sometimes renders its value less easy of determination. Thus in the case of the City of Lowell v. County Commissioners, 6 Allen, 131, the following lan- guage was used in regard to the property legally subject to taxation belonging to a water-power company " owning canals and land under and adjoining them, with gate -houses, feeders, and other property used for raising and making availa- ble a water power " which it furnished, under con- tract, to certain companies owning its stock, " in the proportion in which they are entitled to a supply of water under their contracts ; " the property of these companies being assessed " at a higher rate of valua- tion by reason of the water power thus secured ; " there being moreover " for nine months in the year' a considerable surplus of water power capable of a profitable use, but not yet applied to manufactur- ing purposes. ... If the water power enjoyed by the several mills, and increasing their value re- spectively, which was already taxed as a part of the value of the mills, had exhausted the whole produc- tive capacity of the land and structures by which it was created, they should not have been taxed IN GENERAL. 115 further. But as the agreed facts show that a valua- ble water power for nine months in the year was created, in addition to all that was used by the mills, there still remained a taxable property which had not been assessed in any form. The land occupied by the canals, and used in connection with them, should be taxed to its owners, so far as its produc- tive value had not been made a subject of taxation as an element of the value of the mills to whose use the water power was appropriated. In other words, if the property taxed had a market value above and beyond its use for the purposes of the mills, — if it would sell for any price, subject to the obligation to furnish power to the mills accord- ing to their contracts, — then to that extent it was not taxed in another form, and should be taxed in the mode adopted by the Assessors of Lowell." And as " the Assessors had not taxed any water power eo nomine, but had taxed land and structures upon land," the Court are " of opinion that the peti- tioners are entitled to relief because the County Commissioners erred in abating the whole of the tax assessed upon the land and structures used in creating the water power, when they should have abated only so much as had been already assessed upon the same property in another form." ^ 13. The Tax Commissioner shall, as soon as may be after the first Monday in August, notify the Treas- urer of each corporatioji of the amount of its tax un- der St. 1865, c. 283, except the tax mentioned in § 8 thereof, to become due and payable to the Treasurer 1 But see Boston Manufacturing Co. v. Newton, 22 Pick. 22. 116 MANUPACTUKING CORPORATIONS. of the Commouwealth within thirty days from the date of such notice: provided that it shall not be due and payable earlier than the first day of No- vember. Such notice shall also state 'that within ten days after the date thereof the said corporation may apply for a correction of said tax, and be heard thereon before the Board of Appeal by said Act es- tablished as hereinafter stated. No reports of busi- ness are required, or tax collected thereon from cor- porations incorporated under the authority of Stated other than this Commonwealth. Said Commissioner shall ascertain and determine the amount due to each city and town under the provisions of § 15 of said Act, subject to appeal as aforesaid, and shall notify the Treasurer of each city and town thereof, and certify the amount as finally determined to the Treasurer of the Common- wealth, who shall thereupon pay over the same.^ 14. Every corporation embraced in St. 1865, c. 283, § 3, as aforesaid, shall annually pay a tax upon its corporate franchise, at a valuation thereof equal to the aggregate value of the shares in its capital stock as determined in § 4 of said Act, af- ter deducting, in the case of manufacturing corpo- rations, and certain others in said section referred to, an amount equal to the value as determined by the Tax Commissioner of their real estate and machinery subject to local taxation wherever situ- ated. Said payment shall be at a rate determined by an apportionment of the whole amount of money to be raised by taxation upon property in the Com- 1 St. 1865, c. 283, §§ 11, 15; St. 1866, c. 291, § 2. IN GENERAL. 117 monwealth during the same current year, as re- turned by the Assessors of the several cities and towns under § 1 of the Act aforesaid, upon the ag- gregate valuation of all the cities and towns in the Commonwealth for the preceding year, as returned under St. 1861, c. 167, and Acts in addition there- to : provided, that in case the return from any city or town shall not be received prior to the twenti- eth day of August, the amount raised by taxation . in said city or town the preceding year, as certified to the Secretary of the Commonwealth, may be adopted for the purpose of this determination ; and provided further, that the amount of tax assessed upon polls the preceding year, as certified to the Secretary of the Commonwealth, may be taken as the amount of poll-tax to be deducted from the whole amount to be raised by taxation, for the pur- pose of ascertaining the amount to be raised by tax- ation upon property.^ 15. The assessment authorized by the Legislature in 1864, c. 208, § 5, and in St. 1865, c. 283, § 5 on the excess of the market value of all the capi- tal stock of certain corporations over the value of their real estate and machinery, is not to be un- derstood as a tax imposed upon property. " It was designed to be in the nature of an excise or duty on the franchise or privilege of each of the corporations designated, to be estimated and meas- ured by ascertaining the excess of the market value of the capital stock, or aggregate of the shares, over the value of the real estate and machinery 1 St 1865, c. 283, § 5; Gen. Sts. o. 11, § 12, Second. 118 MANUFACTURING CORPORATIONS. for which each corporation was assessed in the town or city in which it was established, and carried on its business." 1 It "must be supported, if sustained at all, as an exercise, by the Legislature, of the au- thority conferred by that clause in the Constitution, part 2, chap. 1, § 1, art. 4, which gives the powfer of imposing reasonable duties and excises upon any ' commodities ' within the Commonwealth ; in other words, it cannot be held valid unless it can be con- strued to be in the nature of an excise on the fran- chise of the corporations designated in St. 1864, c. 208, §§ 1, 5, and not a tax on the property be- longing to them. Tlie decisive reason why it can- not be supported as a tax on property, in the sense in which that phrase is used in the Constitution in the article cited, is that it is not ' proportional ; ' that is, it is not laid according to any rule of propor- tion whatever ; but is imposed only on the corpora- tions designated in the Act, without any reference to the amount required to be raised by taxation for public purposes, or to the actual property held by such corporation, subject to taxation, or to the whole amount of property in the Commonwealth liable to be assessed for the public service." ^ 16. That the assessment is an excise upon a fran- chise, rather than a tax upon property, may further appear from considering that " a corporation pos- sessed of no personal estate whatever, but having its 1 Commonwealth v. Lowell Gas Light Co. 12 Allen, 75. 2 Commonwealth v. Hamilton Man. Co.; Same v. Boston Wharf Co.; Henry K. Oliver v. Cornwall Copper Mining Co. 12 Allen, 298; Com- monwealth V. People's Five Cents Sav. Bank, 5 Allen, 428, 431; Oliver V. Washington Mills, 11 Allen, 268, 474. I IN GENERAL. 119 entire property invested in real estate and maclii- nery, may yet be liable to assessment, under the pro- visions of the statute, because the market value of all the shares may exceed the value of its real estate and machinery ; its franchise or corporate rights and privileges being estimated at a value beyond all the property in its possession, as shown by the price for which its shares are sold in the market." ^ " If the Legislature had intended to impose a tax on the pro- perty of corporations, exclusive of their real estate, it would have been easy to ascertain the exact amount liable to such assessment, by requiring returns setting forth the nature and value of all the personal estate of which each was possessed. There would have been no doubt that a tax imposed on the amount so ascertained would have been a pure property tax. But they adopted a very different rule or standard of taxation. The market value of the shares of a corporation, or the aggregate market value of all the shares, by which we understand the cash price for which the shares will sell in the market, does not ne- cessarily indicate the actual value or amount of pro- perty which a corporation may own. The price for which all the shares would sell, may greatly exceed the aggregate of the corporate property, or it may fall very far short of it. Undoubtedly the amount of property belonging to a corporation is one of the considerations which enters into the market value of its shares ; but such market value also embraces other essential elements. It is not made up solely by the valuation or estimate which may be put on the 1 Commonwealth v. Lowell Gas Light Co., ante. 120 MANUFACTURING COKPOEATIONS. * corporate property ; but it also includes the profits and gains which have attended its operations, the prospect of its future success, the nature and extent of its corporate rights and privileges, and the skill and ability with which its business is managed. In other words, it is the estimate put on the potentiality of a corporation, on its capacity to avail itself profit- ably of its franchise, and on the mode in which it uses its privileges as a corporate body, which mate- rially influences and often controls its market value." And in repelling the suggestion, " that the deduction of the value of the real estate and machinery from the aggregate market value of the stock allowed by the statute, was an indication that the tax was in fact a tax on property, and not an excise on the fran- chise," the Court - say, that the " obvious reason " for this deduction is that " the real estate and ma- chinery of corporations are subject to local taxation, under the general tax Act, in the towns where they are situated ; and inasmuch as all taxes on corpo- rate property operate to take away a portion of that which would otherwise belong to shareholders, it would tend to inequality, and double taxation, if, in assessing the excise on the franchise, no deduction " were made for what was taxed in a different manner elsewhere." ^ 17. In refusing to admit the objection that the assessment in question " operates as an indirect tax on property," and, where imposed on corporations holding United States securities, violates constitu- tional and congressional enactments exempting such 1 Commonwealth v. Hamilton Manuf. Co., ante. IN GENERAL. 121 securities from taxation, the Court, after referring to their views already expressed as being " a sufficient and decisive answer to this argument," nevertheless enter into an extended examination of the cases cited in support of this view of the subject, under certain statutes of the State of New York, imposing a tax on banking corporations there established, comparing these statutes with the laws regulating taxation in Massachusetts, the conclusion reached being a strengthening and confirmation of the opinions delivered as above. In respect to the government securities held by one of the defendant corporations, it is shown that these bonds were not included in the valuation on which the tax was assessed, and could not , have been considered to have been in- cluded therein, except by holding, " in the absence of proof that the presumption is that public officers assessed a tax on property exempt by law, instead of on property which was properly subject to taxa- tion ; " the entire valuation of the franchise being considerably less than the amount of government bonds held, leaving out of view other personal prop- erty nearly equal in amount to the bonds .^ 18. In regard to the taxation of corporate fran- chise, the doctrine laid down in the cases above cited, is re-affirmed in Commonwealth v. Cary Improve- ment Co., and Commonwealth v. Boston Water Power Co., 98 Mass. In these cases the defendants con- tended that the value of the franchise, as com- puted by the Commissioners, in accordance with 1 Commonwealth v. Hamilton Manuf. Co.; Same v. Boston Wharf Co. ; Henry K. Oliver v. Cornwall Copper Mining Co., ante. 122 MANUPACTDEING CORPORATIONS. the method provided in St. 1864, c. 208, was " an artificial one, and greatly in excess of the real value of the entire property of the corporation ; and that the Commissioners erred in disregarding entirely the actual pecuniary condition of the corporation, and the value of its real and personal property." The Court, however, " are of opinion, that, in the estimate or computation of the value of the capital stock of the corporation, the judgment of the Tax Commissioners is not open to modifi,cation or revis- ion by any other tribunal. But, if this were other- wise, we are all of opinion that the standard adopted by the Commissioners was the correct one. The computation or estimate to be made by them is in no legal sense a valuation of the property of the corporation. The returns required from the corpo- ration furnish no means for such a valuation, and the statute neither requires nor contemplates it. . . . This Court held, in the case of Chicopee v. Hampden, 16 Gray, that the market value of all the shares of the capital stock was not the proper measure of the value of the property of a corporation ; and the con- verse must be equally true ; namely, that the prop- erty held by a corporation does not furnish a proper measure of the value of its capital stock regarded as a franchise." 19. And it is further said that the provision, " that corporations shall, when required, submit their books to the inspection of the Commissioners, does not im- ply an investigation and valuation of their property, unless such investigation becomes necessary, by rea- son of the absence of other means of information by IN GENERAL. 123 which to determine the value of the stock. It some- times occurs tliat all the shares of a corporation are held in a few hands, and so controlled that no sales take place, and no means of ascertaining the market value of the stock can be reached. In such cases an inspection of the books, showing the amount and kind of investments, the nature and e;stent of the business, and the amount of profits realized, would afford the means of a reasonable approximation to the value of the shares of the corporate stock. But when the Commissioners have arrived at their valua- tion in this, as well as in the other modes which are open to them, the result is both in form and in legal intendment, ' the market value of all the capital stock ' as made up of the aggregate of the incorpo- real shares, and not as consisting of the real and personal property held by the corporation." Upon the above and other considerations, the Court " are clear in opinion that the correctness of the valuation ascertained from the market value of the shares, in the manner stated in these cases, can- not be impeached by proof that it is greatly in excess of all the ' property rights and assets,' owned or held by the corporation. It does not depend upon the question whether the corporation has more or less of property, nor in what that property consists." They also say that " no apparent discrepancy between the value of the corporate stock, as such, and the amount or value of the property in the present possession and ownership of the corporation is of itself a ground upon which to defeat, either in whole or in part, the collection of the tax imposed, according to 124 MANUPACTUEING CORPORATIONS. a valuation of the stock at the price which is fixed in the market by actual sales of the shares." 20. In the case of Manufacturers' Insurance Co. v. Loud, 98 Mas^., the complainants claimed that the value of the United States bonds and securities owned by them, and exempt from taxation under State authority, should have been deducted in computing the amount of the tax to be paid by the corporation under St. 1865, c. 283 ; but the Court, after refer- ence to the fact that " it has been repeatedly held by this Court that the tax upon corporations under the Act of 1864, was a tax upon the franchises of the corporation, and not upon its property," add that, " in the Act of 1865, c. 283, the intention of the Legislature to lay the tax upon the corporate franchi- ses appears even more obviously than in the Act of 1864. The petitioner does not point out any feature in the Act of 1865, which may operate to control that apparent intent, and give the statute the effect of imposing a property tax. It is agreed that the computations and all the proceedings in levying the tax are correct, and in conformity with the statute, unless the omission to make a deduction from the market value of the capital stock, on account of the bonds of the United States held by the corporation, shall be adjudged to be erroneous. But as the aggregate valuation upon which the tax is computed is not a valuation of the property of the corporation, it does not include, as a component part of itself, the value of the bonds as property. No deduction of the value of such bonds is required, therefore, in order to arrive at the basis of the taxation contem- IN GENEEAL. 125 plated by the statute ; nor by reason of their spe- cific exemption from taxation by the Constitution and laws of the United States. No part of the tax is assessed upon the property of the corporation in these bonds, nor upon their property, however held or invested." 21. The right of the Commonwealth to levy the tax imposed, by St. 1864, c. 208, upon the corporate franchise, " cannot be defeated by any neglect of the city or town to make the proper returns. The Commissioners may ascertain the necessary facts ' otherwise.' The language of the statute does not preclude the Commissioners from making the exam- ination of the returns through the instrumentality of Clerks employed by them." Neither can such right be defeated or interfered with by failure to notify the corporation of a reduction made in said tax, upon a revaluation of the amount liable to taxation, after notice of the original assessment. " If not made upon application therefor, it may be presumed to have been with the assent of the defendants." ^ 22. No taxes shall be assessed in any city or town for State, county, or town purposes, upon the shares in the capital stock of corporations, for any year for which they pay the tax under St. 1865, c. 283, as aforesaid ; but such proportion of the tax collected of each corporation, under § 5 thereof, as aforesaid, as corresponds to the proportion of the stock of such corporation owned by persons resid- ing in this Commonwealth, shall be credited and 1 Commonwealth v. New England Slate & Tile Co., 13 Allen, 891. 126 MANUFACTURING CORPORATIONS. paid to the several cities and towns where it appears from the returns or other evidence that such share- holders resided on the first day of May next preced- ing, according to the number of shares so held in such cities and towns respectively : provided, that said exemption is not to apply to shares in corpora- tions incorporated under the authority of States other than this Commonwealth ; and provided fur- ther, that when a town owns stock in any corpora- tion taxed under said act, a return to said town shall be made in like manner as is provided in the case of stock held by individuals residing in said town ; and provided further, that nothing contained in said Act shall be construed to exempt the own- ers of shares in the capital stock of any corpora- tion from liability to taxation for school-district and parish purposes ; all real estate and machinery be- longing to manufacturing corporations or estab- lishments being subject to taxation in the school- districts where the same are situated ; and in assess- ing the shares in such corporation, or the personal estate of the owners of such establishments for the like purposes, the value of such machinery and real estate shall first be deducted from the value of such shares or personal estate.^ 23. In the case of stock held by copartners, Guardians, Executors, Administrators, or Trustees, the proportion of tax corresponding to the amount of stock so held shall be credited and paid to the towns where the stock would have been taxed under 1 St. 1865, 0. 283, § 15; St. 1866, c. 291, § 2; St. 1866, c. 196, § 1 ; Gen. Sts. o. 39, § 23. IN GENERAL. 127 the provisions of General Statutes, c. 11 ; that is to say, in the place where the person to. whom the in- come is payable resides, if within the State ; and if he resides out of the State, it shall be assessed in the place where the Guardian, Executor, Administrator, or Trustee resides ; and if there are two or more Ex- eciitors. Administrators, or Trustees, resi,ding in dif- ferent places, the property shall be assessed to them in equal portions in such places, and the tax thereon shall be paid out of said income. If the Executor, Administrator, or Trustee is not an inhabitant of this State, it shall be assessed to the person to whom the income is payable in the place where he resides.^ 24. The Treasurer and Auditor of the Common- wealth, together with one member of the Council, to be named by the Governor, shall constitute a Board of Appeal, to which Board any party aggrieved by the decision of the Tax Commissioner upon any mat- ter arising under St. 1865, c. 283, may apply within ten days after notice of such decision. Upon such appeal said Board shall, as soon as may be, give a hearing to such party, and shall thereupon decide the matter in question, which decision shall be final. The notification from the Tax Commissioner to the Treasurers of corporations respecting the amount of tax imposed, and the payment thereof, shall specify that within ten days after the date of said notification, the said corporation may apply for a correction of said tax, and be heard thereon before 1 St. 1865, 0. 283, § 15; Gen. Sts. c. 11, § 12, Fourth, Fifth. See also Gen. Sts. u. 11, § 15. See also, in reference to taxation of stock held by copartners, Peabody v. Essex, 10 Gray, 97 ; Lee v. Templeton, 6 Gray, 679. 128 MANUPACTUEING CORPORATIONS. the Board of Appeal aforesaid. The ascertainment and determination by said Commissioner of the amount due to the several cities and towns under St. 1865, c. 283, § 15, is also subject to appeal, as aforesaid.! 25. In case the value of the real estate and machinery located within the Comrrionwealth, of any corporation, as determined by said Commissioner, shall be less than the value as determined by the Assessors of the city or town where such real estate or machinery is taxable, said Commissioner shall notify the corporation of such determination, and if said corporation shall not, within one month from the date of such notice, make application to said Assessors for an abatement, and shall not, in case of the refusal of said Assessors to grant an abate- ment, forthwith prosecute an appeal to the County Commissioners, in accordance with the provisions of General Statutes, c. 11, and give notice thereof to the Tax Commissioner, such determination by the Assessors shall . be conclusive upon said corporar tion. The Tax Commissioner may appear before the County Commissioners and be heard upon any appeal made to them, and if upon a hearing it appears that the complainant is overrated, the County Commissioners shall make such an abate- ment as they deem reasonable, and the decision of the County Commissioners shall be conclusive as to the value. But no abatement shall be had, unless the party applying has filed with the Assess- ors a list subscribed by him of his estate liable to 1 St. 1865, 0. 283, §§ 11, 13, 15. See Appendix " B." IN GENERAL. 129 taxation, and made, oath that it is full and accurate according to his best knowledge and belief. When such list is not filed within the time specified by the Assessors for bringing it in, no complaint from the judgment of the Assessors shall be sustained by the County Commissioners, unless they are sat- isfied that there was good cause why such list was not seasonably brought in. Corporations making the returns and paying the tax imposed by St. 1865, c. 283, shall be relieved from making the returns required by St. 1864, c. 201.1 26. If the Assessors of any city or town shall neglect to comply with the requirements of St. 1865, c. 283, each Assessor, so neglecting, shall forfeit the sum of one hundred dollars ; any Guar- dian, Executor, Administrator, Trustee, or copart- nership neglecting to comply with said requirements, shall forfeit the sum of one hiindred dollars; and any corporation neglecting to make returns accord- ing to the provisions of said Act, or refusing or neglecting, when required thereto, to submit to the examinations provided for in § 17 of said Act, shall forfeit two per cent, upon the par value of its capi- tal stock ; all which penalties may be recovered by an action of tort, brought in the name of the Com- monwealth, either in the County of Sufiblk, or in the County where the corporation is located.^ Any corporation failing to make any of the returns required by the provisions of said Act, shall be lia- 1 St. 1865, ,i. 283, §§ 6, 19; Gen. St3. c. 11, §§ 45, 46. 2 St. 1865, t. 283, § 14. 9 130 MANUFACTURING CORPOBATIONS. ble, on application of the Tax Commissioner there- for to any of the Justices of the Supreme Judicial Court, to injunction restraining said corporation and the agents thereof from the further prosecution of its business, until the returns required by law shall be made.^ If any corporation fails to pay the taxes required by said Act, the Treasurer of the Commonwealth may forthwith commence an action of contract in his own name, as Treasurer, for the recovery of the same with interest. All penalties under said Act may also be enforced,- and all taxes , under the same collected by information brought in the Supreme Judicial Court, at the relation of the Treasurer of the Commonwealth ; and upon such information the Court may issue an injunction re- straining the further prosecution of the business of the corporation named therein, until all taxes due or penalties incurred under said Act shaU be paid, with interest and costs. In any proceeding under § 14 of said Act, the certificate of the Tax Commis- sioner or his deputy shall be competent evidence of all determinations made and notices given by him, and of all values, amounts, and other facts re- quired to be fixed or ascertained by him under this Act.2 ' 27. The lessee of the works, structures, real estate, or machinery of any corporation taxed under said Act shall be liable, as weU as the lessor, to pay the amount of said tax, and upon such payment may, in the absence of any agreement to the con- trary, retain the same out of the rent of the prop- 1 St. 1866, c. 291, § 1. 2 St. 1865, u. 283, § 14. IN GENERAL. 131 erty, or recover the same in an action against the lessor.^ 28. Every corporation to be taxed ,by said Act shall, when required, submit its books to the inspec- tion of the Tax Commissioner, and its Treasurer and Directors to examination on oath in regard to all matters affecting the determinations which are to be made by said Commissioner.^ 29. The tax by said Act imposed upon any cor- poration shall not affect nor prevent the imposition and collection of any other tax now authorized, or that may hereafter be authorized, upon any especial privilege, franchise, or business enjoyed or exercised by such corporation.^ 30. The Treasurer of the Commonwealth shall be Tax Commissioner, with all the powers and du- ties conferred and imposed by said Act upon that office. He may appoint a deputy, who shall, under his direction, exercise and perform said powers and duties, subject to appeal as aforesaid, and who shall receive a salary at the rate of eighteen hundred dollars per year ; and may also appoint such Clerks as may be necessary for the performance of the duties required by said Act.* 1 St. 1865, a. 283, § 18. « St. 1865, 0. 283, § 17. 8 St. 1865, c. 283, § 18. See exceptions as to Insurance Companies. i St. 1865, 0. 288, § 12. 132 MANUFACTURING COEPOEATIONS. Section II. Personal lAaUlity of Officers and Stockholders. 1. General statement. 2. Claim for contribution founded on voluntary payment of cor- porate debts. a: Personal liability of Directors for corporate debts one "sirictis- simi jurist 4. Application of this principle to holders of stock in foreign cor- porations resident here. 6. State of the law of personal liability up to the adoption of St. 1862, c. 218. 6, 7. Relief from personal liability by creation of a new debt on ren- dition of judgment against corporation. 8, 9. Remedy of creditors by judgment at law and by bill in equity compared. 10. No power in officers to compel contribution by stockholders to- wards payment of corporate debts. 11. Officers liable for debts and contracts in what cases. 12. Members or stockholders liable for debts and contracts in what cases. 13. Liability as above not to commence unless judgment against cor- poration is recovered, and execution thereon is returned unsat- ■ isfied. 14. Liability to be tten enforced by bill in equity. 15. Mode of assessing sums so decreed to be paid. — Rule applicable to joint owners of stock holding the same undivided. 16. Liability of Executors, Administrators, Guardians, and Tnistees. 17. Rules as to abatement and dismissal of such suits in equity. 18. Mode of pleading prescribed in St. 1862, u. 218, mandatory, not permissive. 19. Substitution of equitable for legal remedies by above statute. 20, 21. Doctrine of the lex loci contractus in its application to personal liability. 1. Under what circumstances, and to what ex- tent, the responsibilities incurred by the artificial person called a corporation may affect the individ- IN GENERAL. 133 uaJs of whom it is composed, in their private and personal capacity, is an interesting and very impor- tant subject of inquiry. It has, however, been found impossible, without exceeding the just limits of a work like the present, to trace historically the successive steps by which, during the past sixty years, the existing law of ^^ Personal Liability," as it is called, has been built up ; and much ma- terial collected with this view, can be used but spar- ingly, if at all.^ Before, however, proceeding to a consideration of St. 1862, c. 218, entitled " An Act to define and regulate the Enforcement of the Lia- bilities of Officers and Stockholders of Manufactur- ing Corporations," the leading statute upon the general subject, it may be well to glance at a few of the more modern cases, leading up, as it were, to this Statute, and enunciating many of the rules and principles there enacted. 2. Thus in the case of Cart/ v. Holmes, 2 Allen, 498, decided at the October Term of 1861, it is held, that " the statute liability of stockholders ought not to be extended by implication beyond the limit fixed by the Legislature. Such would be the effect of holding, that a voluntary payment of a cor- porate debt by a stockholder would give him an im- mediate right to a contribution. It would not only enable him to convert a contingent and incidental liability on the part of his associates to the credi- tors of the corporation into a direct, immediate, and 1 The catena of enactments on this subject, prior to the adoption of the General Statutes, is as follows: St. 1808, o. 65; St. 1817, u. 183; St. 1821, 0. 38; St. 1826, c. 137; St. 1829, c. 53; St. 1830, c. 81; St. 1838, o. 98; St. 1838, o. 177; St. 1851, u. 315. 134 MANUFACTURING COEPOBATIONS. absolute one to himself, but it would enlarge the liability of stockholders, by conferring a right to enforce contribution for the payment of corporate debts in cases where there had been no faihire or omission by the corporation or its officers to pay them on due process of law. If the voluntary pay- ment of a debt is, of itself, sufficient to support a claim for* contribution, it is obvious that a stock- holder may compel his fellow-members to contrib- ute to the payment of debts of the corporation, for which he might never be held liable, and which would never be enforced against them. The right to enforce a contribution should be limited to cases where debts have been paid in pursuance of the stat- ute liability, or where it is shown that a judgment and execution against the corporation and its offi- cers would be ineffectual to obtain payment. It cannot be justly said that any claim for contribu- tion exists, unless a debt has been paid under cir- cumstances which would render all the stockholders equally liable for the debts of the corporation." 3. It is said by the Court, in the before cited case of Merchants^ Bank v. Stevenson^ (commenced before the adoption of the General Statutes), that the claim to charge upon the Directors of a manu- facturing corporation a personal liability for corpo- rate debts, " although founded on an express pro- vision of statute, is one strictissimi Juris. It is not founded on any supposed equity or considera- tion of benefit received either directly or indirectly by the defendants. It is not a liability resulting 1 Ante, p. 91. IN GENEEAL. 135 from any moral delinquency, nor does it necessarily involve any actual negligence or dereliction of duty by them. It may exist, notwithstanding the utmost vigilance and care may have been exercised by the defendants, in the performance of their duties as Directors of the corporation. It can be regarded only as in the nature of a penalty, designed rather to prevent malfeasance and misfeasance by Directors of manufacturing corporations, than to secure to corporate creditors the payment of their debts out of the private estates of the Directors." 4. The same unwillingness to enlarge, hy implica- tion, the statute liability of stockholders is shown by the Court in the case of Urickson v. NesmitJi, 4 Allen, 233, in which it was unsuccessfully sought to maintain a bill in equity in this Commonwealth against a stockholder residing here in a corpora- tion established in New Hampshire, for liabilities incurred under certain provisions in the statutes of that State. The Court refers to the construction which it has been accustomed to place upon existing statutes, to the effect, " that the individual liability of stockholders in manufacturing corporations was one of a particular and limited character, or to be enforced only in the mode, and by the use of the particular remedy, named in the statute ;^ that this individual liability is one depending upon the pro- visions of positive law, and is to be construed strictly ;^ that when, the statute confers a right and prescribes a remedy, that particular remedy and 1 Child D. Coffin, 17 Mass. 64; Eipley v. Sampson, 10 Pick. 370; Knowlton v. Ackley, 8 Cush. 93. 2 Gray v. Coffin, 9 Cush. 199. 136 MANUFACTURING CORPORATIONS. that only can be pursued; and that the liabilities of the individual members of the corporation are created by the statute ; and it is clear that at com- mon law the corporation only would be liable."^ And although it appeared that, by the statutes of New Hampshire, the proper mode of enforcing this liability was by " a bill in equity, in which all the stockholders must be made defendants, and the suit brought, it would seem, in behalf of all the credi- tors," and that the Court had already refused to sustain an action at law, (^Uriokson v. Nesmiih, 15 Gray), between substantially the same parties, chiefly for the above reason, care was taken to avoid any expression of opinion as to " whether even a bill in equity could be maintained against a citizen of Massachusetts, in the Courts of Massa- chusetts, for the purpose of charging him with the statute liability created solely by virtue of the laws of New Hampshire." This question, however, in the case first above cited is fairly met, and, as above intimated, decided in the negative, on the ground,, mainly, that the Court had " no jurisdiction that would reach such corporation out of the Common- wealth, and, having no assets here, that the same is true of tlie stockholders residing in New Hampshire, and that a bill in equity in Massachusetts is there- fore not the remedy intended to be prescribed by the Statute of New Hampshire, creating and regu- lating the liability of stockholders in a manufactur- ing corporation in New Hampshire." To the objection " that great practical evil may 1 Andrews v. Callender, 13 Pick. 490. - IN GENERAL. 137 result from thus refusing to charge a party here ■ffho is an actual stockholder of a corporation in New Hampshire, but who resides without its lim- its," the Court replies, " that it would be a much more serious evil to hold that the whole matter of winding iip the concerns of a bankrupt corporation of New Hampshire, ascertaining who are its credi- tors, who its stockholders, what is the amount of its assets, and how the same are to be distributed, should be transferred to the jurisdiction of Massa- chusetts, by reason of the residence here of a single member of such corporation. There seems to be no practicable mode of. dealing with such corporation and its members, when seeking to charge the latter upon their statute liability, but to proceed in the manner prescribed by the statute creating such lia- bility, and in the local jurisdiction where the cor- poration was established and carries on its bixsiness, and by whose local statutes alone the liability ex- ists." 1 . 5. The precise form which the doctrine of the per- sonal liability of the stockholders of manufacturing corporations had assumed at common law, both upon general principles, and in the interpretation and application of existing statutes, up to the time of the adoption of the General Statutes, and of the enact- ment of St. 1862, c. 218, is well summed up in the case of Cambridge Water Works v. Somerville Dye- ing ^ Bleaching Go. 4 Allen, 239. This was a biU 1 Bogardus v. Eosendale Manuf. Co. 3 Seld. 151; Dane i». Dane Manuf. Co. 14 Gray, 488; Bangs ». Lincoln, 10 Gray, 600; Hadley s). Eussell, 40 N.H. 109. 138 MANUFACTURING CORPORATIONS. in equity, alleging that the defendant corporation was " indebted to the plaintiff in certain sums of money, for the payment of which all the other defend- ants were jointly and severally liable ; " that the com- pany, by reason of this and other indebtedness, was insolvent and unable to pay its debts in full ; praying for an account of all the assets of the company, and a decree for a fro raid distribution thereof among the creditors, " and that the defendants named as stockholders may be decreed to pay the deficiency, in proportion to the liability to which by law they are severally subjected." Among the objections to the maintenance of the bill is one. setting forth " that the plaintiffs have not established their alleged claim, by the recovery of any judgment therefor against the corporation;" to which it is answered that, even granting such a judgment to be essential to the main- tenance of a suit in equity when prosecuted against stockholders only, it is unnecessary when the cor- poration is joined as a defendant, because " a judg- ment may be rendered against it as preliminary to the other decrees prayed for." But the Court, in view of the fact that an adequate remedy exists at common law against the corporation, and that no statute has authorized a form of proceeding against it like that above suggested, denies that it has any such jurisdiction in equity of the cause of action as would authorize the rendering of judgment against the corporation for the amount of its alleged indebt- edness. The several provisions of the existing statute iii regard to personal liability are then examined in de- IN GBNEEAL. 139 tail,^ and the conclusion is reached, that "it was the intent of the Legislature that a creditor of i^he cor- poration should not have a right to bring and main- tain a bill in equity against any of the stockhold- ers " not an officer, even though the corporation be joined therein, " until the claim upon which it is founded had first been prosecuted to final judgment against the principal debtor." And this because — the bill in equity being intended to afford the credi- tor a remedy as real and substantial as the coercive measures under a judgment and levy of execution above referred to, but to be availed of only in the place and stead of those measures — " it seems to be an unavoidable consequence, that such a judgment is an indispensable pre-requisite to the institution and maintenance of such a suit."^ And in regard to the reason and object of the discrimination made between officers and stockholders, it is remarked that " it would hardly be thought reasonable to allow coercion to be used against the latter as a means of enforcing payment, before the claim against the company was clearly proved and judicially es- tablished, inasmuch as they cannot make, and have at no time been allowed to make, any defence to a suit against the corporation, and can therefore be protected against unjust demands only by the resist- ance which the corporation itself makes, when such claims are presented or prosecuted against it;" while it may nevertheless be " very just and reasonable that they should be held ultimately responsible for 1 Rev. Sts. c. 38, § 31. * See Merchants' Bank v. Stevenson, 5 Allen, 398, infra. 140 MANUFACTURING CORPORATIONS. the due performance of all the obligations of a com- pany in whose operations and gains they have a di- rect and immediate interest." But officers, on the other hand, " have a right to seek for their own pro- tection, in a suit against themselves, by the interpo- sition of a defence against the claim made against the company ; a. distinction which has been constantly maintained throughout the whole series of legislative Acts upon the subject." ^ 6. A further statement of the common-law bar- riers thrown around the personal liability of stock- holders, under existing statutes, prior to the enact- ment of St. 1862, c. 218, is contained in the case of Handrahan v. Cheshire Iron Works, 4 Allen, 396, which was an action of contract upon a judgment recovered against a corporation, in which it was sought to charge A., who " was a stockholder. of the company at the time when the original debt was con- tracted, but ceased to be so more than a year before the recovery of the judgment declared on, and who was not sumnioned as a stockholder in the action on which that judgment was rendered," as personally liable, the corporation having been defaulted. But the Court say, that, "under the statutes of this Commonwealth, no person can be held liable as a stockholder, for the debt of a manufacturing corpo- ration, who did not hold stock therein when such debt was created, or at the time it fell due, and who has never subsequently been the owner of any 1 Holyoke Bank v. Goodman Paper Mannf. Co. 9 Cush. S7#; Knowlton v. Ackley, 8 Cush. 93; St. 1829, c. 63, § 11; Eev. Sts. u. 38, §§ 29, 30; St. 1861, c. 816; Gen. Sta. c. 60, §§ 31, 32. IN GENERAL. 141 shares therein ; " and that A., therefore, who had ceased to be a stockholder when the canse of ac- tion accrued, that is, " at the time when the plain- tiff recovered his judgment, and acquired the right to bring an action of contract in the nature of debt thereon, and who had not subsequently held any stock in the corporation, was not chargeable in this action ; " and that, " although he was liable on the original debt, having been a stockholder when it was contracted, that debt had become merged or extinguished by the judgment, and a new debt cre- ated thereby, for which his property is not liable to be taken on execution." 7. The merger of an original debt due from a cor- poration, and the creation of a new one by the ren- dition of a judgment for the plaintiff, upon which new debt those not stockholders when the judgment was rendered are not liable, is re-affirmed in the case of Taylor v. New England Coal Mining Co. 4 Allen, 577. In this case it was also held, that it was incum- bent on the plaintiff to show affirmatively that the persons summoned as stockholders are stockholders in the corporation, and as such are liable for the payment of the debts of the company, by reason of such failure on the part of the corporation to comply with the requisitions of the statute regulating manu- facturing corporations as will create such personal liability ; and that it was not incumbent on the per- sons so summoned, to show in the first instance the negative of the above. And although, as was said, it was doubtless " competent for the Court before which the suit was pending to order the persons summoned 142 MANUFACTUEING CORPORATIONS. as stockholders, and who had appeared to defend, to file a specific statement of the grounds on which they intended to deny their liability, they were not bound, in the absence of such order, to file a definite and precise answer, nor could their omission so to do be construed into any admission of liability." The provisions of the Practice Act, Gen. Sts. c. 129, '§§ 17, 27, requiring clear and precise denials of facts alleged, are ruled inapplicable in a case like the present, " which is of a peculiar and anomalous character, so far as it is designed to try the question of the liability of stockholders for corporate debts, being neither an action of contract nor an action of tort, but a proceeding sui generis by which a legal liability created by statute is sought to be enforced, which does not come within any of the usual forms of actions known to the- common law." 8. The doctrine that a bill in equity is the proper remedy for parties seeking to enforce debts due from a manufacturing corporation against the Di- rectors of the company, under Eevised Statutes, c. 38, § 25, affirmed in the case of Merchants' Bank V. Stevenson, 10 Gray, 232, is restated with more fulness in Merchants' Bank v. Stevenson, 5 Allen, 398,1 and the grounds of the decision in the former case explained to have been these ; viz., " that as the liability of the Directors under the statute is a limited one only, being not for all the- debts due from the corporation, but only to the extent of the excess of the corporate debts above the amount of the capital stock ; and as this excess might be much 1 Ante, p. 91. IN GENERAL, 143 less than the claims of creditors having a right to such a remedy against the Directors, — it was neces- sary that all the creditors should be made parties to a suit brought for the purpose of enforcing this liability against Directors, in order that the amount of their debts might be ascertained, and the share of the excess due to each might be apportioned among them. If a different course were adopted", and a suit at law might be brought by each creditor against the Directors, and a judgment rendered in his favor for the amount of his debt due from the corporation, one of two results would follow : either the Directors might be held liable upon judgments against the corporation to an amount greater than the excess of the corporate debts above -the capi- tal stock, or the judgments first recovered would exhaust the liability of the Directors, by absorbing the entire amount of the excess, so that there would be nothing left with which to meet subsequent judg- ments in behalf of creditors who had originally an equal claim on Directors with those whose debts had been previously satisfied. It is obvious that either of these results would contravene both the letter and spirit of the statute creating the liability. It was therefore held, that a suit at law could not be maintained, but that the only proper remedy was by a bill in equity, in which all the creditors enti- tled to a remedy against the Directors could join, the amount of their debts be ascertained, the extent of the excess of such debts above the capital stock determined and adjudicated, and a just and proper apportionment be made of the liability among the 144 MANUFACTUBING COBPOEATIONS. several creditors, in proportion to the amount of their respective debts." The decision in 10 Gray, 232, did not, however, go to the eflFect of determin- ing " that a judgment at law must first be recovered against the corporation, before such suit in equity could be commenced to enforce the liability of the Directors ; " such a conclusion being considered as '" contrary to the clear intent of the Legislature, as expressed in that provision of the statute prescrib- ing a remedy against the officers of the corporation. •It is there expressly provided, that the plaintiff shall state his claims against the company, and that the same may be prosecuted against the T)irectors, not- withstanding the pendency of an action against the company for the recovery of the same claim or de- mand ; and both of said actions may be prosecuted until the plaintiff shall obtain the payment of his debts and the costs of both actions. These provis- ions- of the statute leave no room for doubt, that the remedies of creditors against the Directors and against the corporation, for the recovery of their debt, were intended to be concurrent, and that either or both might be pursued at the option of the credi- tors." 9. Among the advantages of proceedings in equity over a suit at law, reference is made to the ease with which the debts of the several creditors can be examined and proved, and to the power of each cred- itor " to contest the claim of any other creditor, in the same manner as if it were an adversary suit, and thus avoid the danger of collusion which may exist where judgments ex parte are rendered against the IN GENERAL. 145 corporation in actions at law to which the other creditors cannot be parties.^ But it will not be sufficient for the bill to aver " that at the time the debt was contracted, the defendants were Directors of the corporation, and that the debts of the corpora- tion exceeded the capital stock ; it must also allege, that such excess happened during the administra- tion of the affairs of the corporation by the defend- ants. ... As the sole foundation of their liability under the statute is, that the alleged' excess of debts^ over the capital stock occurred while they had charge of the business of the corporation, that fact must be distinctly averred, so that it may be duly traversed by the answer, and be adjudicated on a hearing of the merits." 10. In the case of Stone v. Fenno, 6 Allen, 579, it was held, that ofBcers of a corporation (who were also stockholders) cannot compel contribution against other stockholders for the payment of cor- porate debts, which said officers had paid in satis- faction of a judgment, the whole capital stock not having been paid in. And this for the reason, that under the existing statutes there was no common duty or obligation resting equally upon officers and stockholders in respect to corporate debts ; a stock- holder riot being liable to pay these debts until after the property of its officers has been exhausted. The reasons cited in former decisions ^ for making distinc- tions between the liability of officers and stockhold- 1 1 story on Eq. §§ 547, 648; Owens v. Dickenson, Craig & Phillips, 48, 66. 2 See Denny v. Eichardson, 4 Gray, 274; Gary v. Holmes, 2 Allen, 498; Bangs v. Lincoln, 10 Gray, 600, 606. 10 146 MANUFACTURING CORPORATIONS. ers are referred to, and the fact that " under the pro- visions of the Revised Statutes, c. 38, the failure to comply with the requirements of the statute, hy which stockholders might be rendered liable for corporate debts, would, in most cases, be attributa- ble to the neglect or omission of the of&cers. Even if the stockholders should fail to pay in the full amount of the' capital stock, no liability would thereby be created, if the officers refrained from contracting debts until the deficiency of the capital 'was fully made up." In the opinion of the Court, " the main purpose of St. 1851, c. 315, must have been to protect stockholders against an immediate liability to creditors of the corporation, and to ex- empt them entirely from the payment of corporate debts, if the officers were of sufficient ability to sat- isfy them." 11. The ofiicers of manufacturing corporations shall be jointly and severally liable for its debts and contracts in the following cases ; not otherwise : — First, For debts contracted between the time when the certificates required by General Statutes, c. 60, §§ 18, 19, and 21 are required to be recorded, and the time when they are recorded. The said §§ 18, 19, and 21 of General Statutes, c. 60, which is entitled " Of Manufacturing and other Corporations organized under Special Char- ters," provide as follows ; viz. : — Sec. 18. The President and Directors, with the Treasurer and Clerk, of such companies shall, after the payment of the last instalment of the capital stock, make a certificate stating the amount of the IN GENERAL. 147 capital so fixed and paid in ; which certificate shall be signed and sworn to by the President, Treasurer, Clerk, and a majority of the Directors ; and they shall cause the same to be recorded in the Registry of Deeds for the County or District wherein the works of the company are established. Sea. 19. If a company increases its capital stock as before provided in this chapter, the officers men- tioned in the preceding section, after the payment of the last instalment of such additional stock, shall make a certificate of the amount so added and paid in, sign and swear to the same, and cause it to be recorded in the manner therein provided. Sec. 21. Every company may, by a vote at any meeting called for the purpose, reduce its capital stock ; in which case a certified copy of the vote shall be recorded in the Registry of Deeds for the County or District wherein the works of the company are established ; and, in default thereof, the Direc- tors of the company shall be jointly and severally liable for all debts of the company contracted after thirty days from such reduction, and before the recording of such copy. Second, For making or consenting to a dividend when the corporation is, or thereby is rendered, in- solvent, to the extent of such dividend. Third, For debts contracted between the time of making or assenting to a loan to a stockholder, and the time of its repayment, to the extent of such loan. Fourth, When the debts of a corporation shall exceed its capital, — to the extent of such excess existing at the time of the commencement of the 148 MANUFACTURING CORPORATIONS. suit against the corporation upon the judgment in which the suit in equity to enforce such liability shall be brought, as hereinafter provided. Fifth, For signing any certificate required by law, knowing it to be false ; but only the ofi&cer or offi- cers knowing thereof shall be liable. Sixth, If any officer unreasonably refuses to give the certificate required by St. 1864, c. 219, § 1,^ or wilfully gives a false certificate, he shall be liable for double the amount of all damages occasioned by such refusal, or false certificate, to be recovered in an action of tort.^ 12. The members or stockholders in such corpo- rations shall be jointly and severally liable for its debts or contracts in the following cases ; and not otherwise : — First, For such as may be contracted before the capital is fully paid in, and a certificate thereof duly recorded. Second, For the payment of all debts existing at the time when the capital is reduced, to the extent of the sums withdrawn and paid to stockholders. Third, If the corporation shall neglect to com- ply with the provisions of General Statutes, c. 60, § 23,3 foj. debts existing and contracted before the same are complied with. Fourth, When special stock is created, the gen- eral stockholders shall be liable for all debts and contracts until the special stock is fully redeemed. Fifth, For all sums of money due to operatives 1 Specified in § 13 of this chapter. 2 St. 1862, c. 218, § 1; St. 1864, c. 219, § 2. ' See Chap. V. of this work. IN GENERAL. 149 for services rendered within six months before demand made upon the corporation, and its neglect or refusal to make payment. Any such member or stockholder, who pays, on a judgment or otherwise, more than his proportional share of any such debt, shall have a claim for contribution against the other members or stockholders. ^ 13. No stockholder or officer in such corporation shall be held liable for its debts or contracts, unless a judgment is recovered against it, and the corpora- tion shall neglect, for the space of thirty days after demand made on execution, to pay the amount due, with the officer's fees, or exhibit to him real or per- sonal estate of the corporation, subject to be taken on execution, sufficient to satisfy the same, and the execution shall be returned unsatisfied. It shall be the duty of the Clerk, or other officer having charge of the records of any manufacturing corporation against which judgment has been recovered, and execution issued and returned unsatisfied, as afore- said, upon reasonable requestof the judgment credi- tor, or of the attorney of such creditor, to furnish him a certified list of the names of all persons who were officers and stockholders in such corporation at the time of the commencement of the suit in which judgment was recovered.^ 14. After the execution shall be so returned, the judgment creditor, or any other creditor, may file a bill in equity in behalf of himself and all other creditors of the corporation, against it, and all per- 1 St. 1862, c. 218, § 2. 2 St. 1862, c. 218, § 3; St. 1864, o. 219, § 1. 150 MANUFACTUEING COHPOEATIONS. sons who were stockholders therein at the time of the commencement of the suit in which such judg- ment was recovered, or against all the officers liable for its debts and contracts, for the recovery of the sums due from said corporation to himself and such other creditors, for which the stockholders or officers may be personally liable by reason of any act or omission on its part, or that of its officers, or any of them, setting forth the judgment and proceedings thereon, and the grounds upon which it is expected to charge the stockholders or officers personally.^ 15. Such sums as may be decreed to be paid by the stockholders in such suit in equity shall be assessed upon them in proportion to the amounts of stock by them respectively held at the time when the suit in which said judgment was recovered was begun ; but no stockholder shall be liable to pay a larger sum than the amount of stock held by him at that time at its par value.^ Hawes v. Anglo-Saxon Petroleum Co. 98 Mass., was a " bill in equity to charge the individual de- fendants as stockholders in a manufacturing cor- poration " under St. 1862, c. 218, which declares in § 2, that " the members or stockholders " in such a corporation " shall be jointly and severally liable for such of its debts as may be contracted before the capital is fully paid in, and a certificate thereof duly recorded ; " and in §§ 3, 4, that after a judg- ment has been recovered against the corporation, and it has neglected for thirty days to pay or satisfy the execution, and the execution has been returned 1 St. 1862, 0. 218, § 4. 2 St. 1862, a. 218, § 5. IN GENERAL. 151 unsatisfied, any creditor may file a bill in equity, in behalf of himself and all other creditors, against the corporation, and all persons who were stockholders therein at the time of the commencement of the suit in which the judgment was recovered, for the recovery of the sums due from the corporation for which the stockholdcfs may be personally liable by reason of any act or omission on the part of the corporation or its officers, setting forth the judg- ment and proceedings thereon, and the grounds upon which it is expected to charge the stockhold- ers or officers personally. The fifth section provides that " such sums as may be decreed to be paid by the stockholders in such suit in equity, shall be assessed upon them in proportion to the amounts of stock by them re- spectively held at the time when the suit in which said judgment was recovered was begun ; but no stockholder shall be liable to pay a larger sum than the amount of stock held by him at that time at its par value." This bill alleged that the individual defendants had organized themselves as a manufac- turing corporation, and by virtue of such organiza- tion it had become such a corporation under the laws of the Commonwealth ; that these individuals were, at the date of such organization aforesaid, and have ever since been, members of, and stockholders in, said corporation, holding the stock of the same undivided ; that " the capital stock of said corpora- tion was fixed and limited by said corporation at five hundred thousand dollars;" that before the capital stock so fixed and limited had been paid in, 152 MANUFACTURING CORPORATIONS. and before any certificate thereof had been made and recorded as prescribed by law, the corporation contracted a debt to the plaintiffs, and duly sets forth the recovery of judgment by the plaintiffs against the corporation, its neglect to pay or satisfy the execution issued thereon, and the return of the same unsatisfied. The defendants demurred to this bill, assigning for cause that " the individual lia- bility of stockholders in a corporation is one created by positive law ; " citing therefor the decision in Erickson v. Nesmith, 4 Allen, 233-235, supra; argu- ing that by the provisions of § 5 of the statute above quoted, " the complainant must allege and prove what amounts of stock the respondents re- spectively held at the time said suit was begun, and what the par value of the stock at that time was;" that " the respondents, ' holding the stock of the same vmdivided,' are not stockholders in the cor- poration within the meaning of the statute ; that it cannot be presumed that the respondents held equal interests in the corporation, and that they cannot be made liable as stockholders therein, if its stock was never divided into shares, and if no shares thereof were ever at any time issued to the respon- dents, or subscribed for by them." Upon the above facts and arguments the opinion of the Court was, that " this demurrer must be overruled. Among the allegations of the bill which it admits are, that the corporation had been duly organized under the laws of the Commonwealth, and that the individual defendants were stockhold- ers in the corporation, holding the stock of the IN GENERAL. 153 same undivided. If they were, in fact, joint owners of all the shares, it would support these allegations, and would render them liable under St. 1862, c. 218, as stockholders, upon proof of the other alle- gations in the bill. "Whether they would be so liable, upon proof of a different state of facts, cannot be now decided. The question of their liability, and the proportion and limits thereof under the fifth section of the statute, if applicable to this case, may be determined after the filing of an answer at the hearing upon the merits, or by reference to a master, in case the plaintiffs sliould obtain a decree for the payment of any sum by the stockholders. The par value of the shares need not be alleged in the bill ; but, if it sliould prove to be material, will be a proper subject of inquiry by the master." 16. The estates and funds in the hands of Execu- tors, Administrators, Guardians, or Trustees shall be liable to no greater extent than the Testator, In- testate,. Ward, or person interested in the trust-fund would have been, if living, and competent to act and hold the stock in his own name.^ 17. If, during the pendency of any suit in equity, as herein provided, one of the defendants shall de- cease, the suit shall not abate thereby ; and his estate, in the hands of his Executor or Administra- tor, shall be liable to the same extent as he would be, if living. Such Executor or Administrator may voluntarily appear and become a party to such suit, or may be summoned by the plaintiff. After a suit in equity to enforce the liability of stockholders or 1 St. 1862, u. 218, § 6. 164 MANUPACTUEING CORPORATIONS. officers shall have been commenced, it shall not be competent for the plaintiff to dismiss the same without order of Court, and such notice to other creditors as the Court may deem reasonable under the circumstances. No such suit shall be abated by reason of the non-joinder of persons liable as defendants, unless the plaintiff, after being notified, by plea or answer, of the existence of such persons, shall unreasonably neglect to make them parties.^ 18. From the decision in the case of Essex Co. v. Lawrence Machine Shop, 10 Allen, 352, it appears that the mode of pleading prescribed by St. 1862, c. 218, § 9, is to be construed as mandatory rather than permissive. The statute which creates the personal liability of stockholders " has also," says the Court, " made provision for its enforcement, and, instead of leaving the proceedings in such cases to be settled wholly by the precedents and established practice recognized as governing ordi- nary cases in equity, has fiiUy and particularly pro- vided for the case of an omission to join in the suit, as defendants, all persons liable as such ; and has in § 9 enacted that ' no such suit shall be abated by reason of the non-joinder of persons liable as defendants, unless the plaintiff, after being notified by plea or answer of the existence of such persons, shall unreasonably neglect to make them parties.' " The omission of other persons who ought to have been joined must therefore be made to appear by plea or answer ; and the Court must be satisfied that the plaintiff has, after being notified in the man- 1 St. 1862, u. 218, §§ 7-9. IN GENERAL. 155 ner thua required, unreasonably neglected to make them parties." It is to be observed, that, in this case, the cause assigned for demurrer to the bill was, " that it appeared by the bill that all of the persons called stockholders were necessary parties defendant, yet the plaintiffs had not made them all parties." 19. " The remedy by an action at law to recover a corporate debt against an ofl&cer of a corporation under General Statutes, c. 60, § 31, is expressly repealed by St. 1862, c. 218, § 10, and a suit in equity is substituted therefor, and is now the only remedy." ^ 20. Before leaving this branch of our inquiries, it may be well to note the manner in which the doc- trine of the lex loci contractus has been construed in its application to the subject of personal liability in two recent cases, having reference, respectively, to debts incurred in business contracts, and for wages due to employes. In the first of these, Hutchins v. New England Coal Mining Co. 4 Allen, 580, it is laid down that the rule of law that the lex loci contractus regulates and governs the nature, interpretation, and obliga- tion of all contracts, is inapplicable to defeat the liability of duly summoned stockholders in an action to recover debts of the corporation incurred under contracts entered into by the corporation in another State with citizens of that State, for these reasons : — The case is distinguishable from that of a suit 1 Bond V. Morse, 9 Allen, 471; Peele ». Phillips, 8 lb. 86. 156 MANUFACTURING CORPORATIONS. against a natural person, in which it might be neces- sary to consider any alleged conflict between the laws of the Commonwealth and those of the place of the contract. But the corporation being an arti- ficial person, created by a statute of this Common- wealth which had no force or validity elsewhere, and gave the corporation no legal existence outside the State, its power, as an artificial person, to enter into contracts, and do other corporate acts, in States other than that which created it, could be recognized and allowed in these States only by comity. And by this comity, as generally understood and acted on, a corporation thus going into a State other than that which created it, and entering into a contract with citizens of that State, " exercises, not a power or authority derived from the law of the place of the contract, but acts solely by virtue of the rights con- ferred by the law of the place of its creation, . . . and subjects itself and its members to all the duties and liabilities arising out of or imposed by the pro- visions of law under which it was originally created and established." And although " the foreign law would doubtless regulate and govern the nature, interpretation, and obligation of the contract in aU respects except so far as they depended on the ex- tent of the powers conferred by the charter of the corporation," yet in the absence of any such limita- tion, " a corporation would be deemed to have acted in conformity with the law of the place of its crea- tion, and to be liable on its contracts in like man- ner and to the same extent as on those which were entered into by it with citizens of the State by which it was established." IN GENERAL. 157 Thus it is obvious, that to the extent by which this " comity of contract," as it may be called, "em- braces and recognizes the artificial person which another State has created, with all its capacities and powers, and all the obligations and liabilities which, by the law of the place of its origin and crea- tion, constitute the essential features of its legal ex- istence," to just " this extent the lex loci contractus does not apply, because the parties, at the time of entering into the contract, had the statute of the foreign State in view, and intended to regulate their mutual rights and obligations by its provisions." ^ Among " the attributes or properties of the legal existence of the corporation by virtue of its char- ter, of which it did not and could not divest itself by entering into contracts in other States," is " the right of creditors to recover a judgment against the corporation for the amount of their debts, and to take out execution on which, in certain contin- gencies, the private property of stockholders might be taken. Such contracts must be presumed to have been made with reference to this very lia- bility : certainly the corporation and its stockhold- ers are estopped from denying it. It would be a strange return for the comity which allows corpo- rations created by oiir statutes to exercise their powers and functions in other States, if we should refuse to citizens of those States, seeking to enforce their debts in this Commonwealth, the same rights and remedies against those corporations which our laws furnish to our own citizens." 1 story, Confl. of Laws, § 328. 158 MANUFACTURING CORPORATIONS. 21. The statute liability of stockholders and trus- tees of a corporation established under the laws of another State, and carrying on business in this State, for debts due to laborers, cannot be enforced by the creditor here, but "must be treated as a part of the statute system of another State, incapable of execution alieno foro." In entering upon the con- sideration of the case in which this doctrine is in- volved,! the Court say, " Wherever the common or statute law of one government enters into and forms a part of a contract which is brought before the tri- bunals of another for enforcement, and is not there treated as immoral or contrary to public policy, the lex loci contractus is resorted to, to determine its validity and construction, however that may differ from the law prevailing in the forum of the remedy. The contract of the New York corporation in the present case must, however, receive the same con- struction, and the liability of the defendant here must depend upon the same principles, whether it was actually made in Massachusetts or in New York ; because, if made here, it was in legal con- templation made with reference to the New York acts, and in view of the contingent liabilities, thereby imposed upon officers and stockholders, which are equally applicable to contracts entered into within and without the sovereignty which in- corporated the company.^ How far a mere stat- ute obligation shall be respected and enforced be- yond the jurisdiction by which it is . created and 1 Halsey v. McLean, 12 Allen, 438. 2 Hutchins v. New England Coal Mining Go. 4 Allen, 680, vit lupra. IN GENERAL. 159 limited, and within which alone it has the force of positive law, is a question of comity and public policy in the administration of justice. It is well settled that penal laws will be allowed no extra-ter- ritorial operation. Thus a usurious contract, not void under the statute of the State where it was entered into, but subject there to a deduction by way of penalty, will be enforced elsewhere in full, without the deduction." ^ And the Court having become satisfied, from judicial constructions given by the Courts of New York, of the qualified and penal character of the statute in question,^ say, "We regard their construction as conclusive upon us. In this Commonwealth, where the statute is not bind- ing propria vigor e, no rule of comity permits or jus- tifies any interpretation which would render the liability imposed by it more extensive here than in Courts where it prevails with the force of positive law." And the creditor having failed to commence his action within the time limited by the statute, the Court further say, that, " if we possessed any juris- diction to administer the remedy conferred by this section, comity would not require, nor justice per- mit, that it should be administered here in a case where, by the plaintiff's own neglect, it had ceased to exist in New York." 1 Gale V. Eastman, 7 Met. 14. » St. of N.Y. of 1848, c. 40. 160 MANUFACTURING CORPORATIONS. Section III. Miscellaneous Provisions. 1. Baming of manufactory. 2. Employment of children in manufactories. 3. Same subject. — Penalties. 4. 3ame subject. — Enforcement of rules and penalties. 6. Vaccination of inmates of manufacturing establishments. 6, 7. Liability of corporation for personal injuries sustained by em- ployes. 1. Whoever wilfully and maliciously burns in the night-time a manufactory or mill of another (being, with the property therein contained, of the value of one thousand dollars), or any other build- ing, by the burning whereof a manufactory or mill is burnt in the night-time, shall be punished by im- prisonment in the State Prison for life. Whoever wilfully and maliciously burns in the daytime any such building, shall be punished by imprisonment in the State Prison not exceeding ten years. Who- ever wilfully and maliciously bums a manufactory or mill of another of less value than one thousand dollars, shall be punished by imprisonment in the State Prison not exceeding ten years.^ 2. No child under the age of ten years shall be employed in any manufacturing or mechanical establishment within this Commonwealth, and no child between the age of ten and fifteen years shall be so employed unless he has attended some public 1 Gen. Sts. u. 161, §§ 2-4. IN GENERAL. 161 or private day school, under teachers approved by the school committee of the place in which such school is kept, at least three months during the year next preceding such employment : provided, said child shall have lived within the Commonwealth during the preceding six months ; nor shall such employment continue unless such child shall attend school at least three months in each and every year ; and provided, that tuition of three hours per day in a public or private day school approved by the school committee of the place in which such school is kept, during a term of six months, shall be deemed the equivalent of three months' attendance at a school kept in accordance with the customary hours of tuition ; and no time less than sixty days of actual schooling shall be accounted as three months, and no time less than one hundred and twenty half days of actual schooling shall be deemed an equivalent of. three months. No child under the age of fifteen years shall be employed in any manufacturing or mechanical establishment more than sixty hours in one week.i 3. Any owner, agent, superintendent, or overseer of any manufacturing or mechanical establishment who shall knowingly employ, or permit to be em- ployed, any child in violation of the above provisions, and any parent or guardian who allows or consents to such employment, shall, for such offence forfeit the sum of fifty dollars.^ 4. It shall be the duty of the Constable of the Commonwealth to specially detail one of his depu- 1 St. 1867, ^. 285, §§ 1, 2. a St. 1867, 0. 286, § S. 11 162 MANUPACTUEING C0EP0RATI0N8. ties to see that the above provisions, and all other laws regulating the employment of children or minors in manufacturing or mechanical establish- ments are complied with, and to prosecute offences against the same ; and he shall report annually to the Governor all proceedings under St. 1867, c. 285. And nothing therein shall be so construed as to prohibit any person' from prosecuting such offences.^ 5. Incorporated manufacturing companies shall, at the expense of their respective establishments or institutions, cause all inmates thereof to be vacci- nated immediately upon their entrance thereto, un- less they produce suf&cient evidence of previous suc- cessful vaccination within five years. ^ 6. A manufacturing company which is sued by an employ^ for injuries sustained under the circum- stances stated below, has a right to offer evidence to sustain a defence based on the rule of law " that an employ^ cannot maintain an action against his employer if he was injured by the negligence of others in the service of the same employer, when he was acting in the discharge of his duty, and all were acting in a common service." In this case. Cooper V. Hamilton Manufacturing Company, 14 Allen, 193, where the plaintiff was struck and injured by a 1 St. 1867, c. 285, § 4. The provisions of Gen. Sts. i;. 42, although not expressly repealed in terms by said St. 1867, c. 285, seem neyer- tbeless to have been by implication superseded by said last-mentioned enactment. 2 Gen. Sts. c. 26, § 30. The above provision, though in terms limited to " incorporated manufacturing companies," seems for obvious reasons to be not inappropriately included under the heading of this chapter. IN GENERAL. 163 machine which broke through a floor, while being moved by himself and his fellow-operatives, the Court say, " No doubt the defendants were bound to provide suitable structures for carrying on all the operations necessary to the transaction of the busi- ness, or performing the work in which the persons employed by them were engaged. As applied to the case at bar, this principle of law would require of them to use proper care in order to see that the floors were of sufiicient strength to support any machine which it was necessary to move over or upon them. But the nature of this care which they were bound to use was such, that the defendants might have performed their full legal duty by em- ploying suitable persons of competent skill and experience, whose business it was to keep the floors in such condition as to repairs that they were fit and safe for use for any of the purposes for which it might become necessary to appropriate them. If they were diligent and careful to this extent, and any want of repair had not existed for so long a time as to show absolute negligence on the part of the defendants, then the accident would have been attributable to the negligence of an agent or servant in the service of a common employer with the plain- tiff, and the case would have come within the prin- ciple which the Court below, without hearing the evidence in behalf of the defendants, decided was inapplicable to the case."^ 7. In the case of Palmer v. Lawrence Manufaetur- 1 Snow V. Housatonic Railroad, 8 Allen, 441 ; Gilman v. Eastern Railroad, 13 Allen, 433. 164 MANUFACTURING CORPORATIONS. ing Co. 12 Allen, 69, an action to recover damages for a personal injury occasioned by slipping and falling upon ice, under circumstances stated in the. opinion, the Court holds, that " the plaintiff fails in establishing any legal obligation on the part of the defendants, to remunerate her for the injury she re- ceived while passing to her boarding-house over a street or way built by the defendants, but outside of the mill-yard and place of business of the opera- tives at the mill. These streets were made and maintained by the company for their own use, and for the convenience of all persons who had occasion to pass to and from the factory to places outside, and disconnected with it. The fact that the defend- ants owned the building rented to a third person for a boarding-house, in which the plaintiff had her resi- dence as a boarder, did not impose upon them the legal duty of keeping the street in front of the build- ing free from ice, which, for the time, would render the same uneven and slippery, and expose those who passed over it to injury by a fall occasioned by the ice thereon. Such duty is reqxiired of towns in ref- erence to their highways by special statute provis- ions, and under such qualifications as to the time of the existence of the defect as are there provided. Biit the liability of towns to individuals who may thus sustain an injury by reason of a defective high- way is wholly by force of the statute. In the pres- ent case, the right of action, if any, is a right under the common law. As such, we think the action can- not be maintained. Although within the mill-yard, and in the places in which labor is to be performed, IN GENERAL. 165 a responsibility may attach to the employers, requir- ing proper and reasonable care in guarding against accident ; and due precaution must be used for se- curing from bodily injury the persons in their em- ployment, during the prosecution of their business, by having suitable machinery, tools, and implements of business, and by other proper arrangements for their security from injury to these persons by casu- alty, — yet this liability will not extend to a case like the present." ^ 1 See Durgin v. Lowell, 3 Allen, 398. The provisions of Gen. Sts. o. 149, " Of the Support and Regulation of Mills," though not so framed as to bring them legitimately under consideration in the current chapter, may be advantageously consulted in this connection. 166 MANUFACTURING C0RP0BATI0N8. CHAPTER V. MANUFACTURING CORPORATIONS UNDER SPECIAL CHARTER. 1. Corporations incorporated before Feb. 23, 1830. 2. Corporations incorporated subsequently to Feb. 23, 1830. 3. By-Laws. 4. Meetings. — Votes. — Quorum. — Proxies. 5. Choice of officers, their numbers, duties, etc. 6, 7. Liability of sureties on bond of corporation Treasurer. 8. Execution of notes and other corporate instruments by officers of corporation. 9. Capital stock, its division into shares, increase and reduction. , 10. Certificates and Returns. 11. General and special stock. 12. Transfer of shares. 13. Assessments upon shares, and sale thereof for non-payment of as- sessments. 14. Change of material manufactured. 1. All manufacturing companies incorporated be- fore Feb. 23, 1830, which, prior to the passage of the Revised Statutes, in pursuance of St. 1829, c. 53, have voted to adopt the provisions contained in said last- mentioned statute, and which have per- formed all things prescribed in Revised Statutes, c. 38, shall, together with their respective members and officers, be entitled to all the rights, privileges, and immunities, and be subject to all the liabilities, to which they may be entitled or subject by the laws UNDER SPECIAL CHARTER. 167 in force at the time when the General Statutes went into effect, excepting as the liabilities of said officers and stockholders are modified by the provisions else- where set forth. All such charters may be revoked by the Legislature for any cause which they deem sufficient.^ 2. Corporations established within this State by special charters subsequently to February 23, 1830, for the purpose of carrying on any kind of manufac- ture, and corporations which have been chartered subject to the provisions of Revised Statutes, c. 38, and their respective officers and stockholders, may exercise the powers, and shall be governed by the provisions, and be subject to the liabilities, prescribed in General Statutes, c. 60, excepting as the liabili- ties of said officers and stockholders are modified by the provisions above referred to. The whole amount of the debts which any such company at any time owes shall not exceed the amount of its capital stock actually paid in.^ 3. Every company may make By-Laws not repug- nant to the laws of the State, with penalties for the breach thereof, not exceeding twenty dollars for each oflTence. The By-Laws shall prescribe the mode of choice or appointment of all officers, agents, and fac- tors of the company ; whether the President shall be chosen by the Directors or by the company ; the penal sum and sureties of the Treasurer's bonds ; and may determine what number of stockholders shall attend either in person or by proxy, or what number of shares or amount of interest shall be 1 Gen. Ste. >;. 60, §§ 28, 36. 2 Gen. Sts. o. 60, §§ 1, 27. 168 MANUFACTUKING CORPORATIONS. represented at any meeting to constitute a quo- rum.^ 4. If the quorum is not determined by the By- Laws, a majority in interest of the stockholders shall constitute a quorum. At all meetings of the com- pany, absent stockholders may vote by proxy, au- thorized in writing ; but no proxy shall be valid unless executed and dated within six months pre- vious to the meeting at which it is used, if the maker thereof resides in the United States ; no person shall as proxy or attorney cast more than fifty votes, unless all the shares so represented by him are owned by one person ; no officer of any corporation shall as proxy or attorney cast more votes than rep- resent twenty shares of the capital stock, unless all the shares so represented by him are owned by one person ; no salaried officer of any corporation shall vote as proxy or attorney ; nor shall an officer of any corporation ask for, receive, procure to be ob- tained, or use any proxy vote in the corporation of which he is an officer, except the votes which he is authorized to cast as above. Any officer of any corporation who shall violate any of the provisions of the St. 1865, c. 236, shall, for each offence, forfeit and pay a fine of not less than one hundred dollars, nor more than five hun- dred dollars ; and the Supreme Judicial Court, upon petition of any stockholder in such corporation, and after due notice and satisfactory proof of siich offence, shall cause such officer to be forthwith removed from his office ; and such removal shall for ever after 1 Gen. Sts. «. 60, §§ 2, 4-7. UNDER SPECIAL CHARTER. 169 disqxialify him from holding office in such corpora- tion.^ 5. The business of the company shall be managed and conducted by a President, a board of Directors, a Clerk, Treasurer, and such other officers. Agents, and factors as the company authorizes for that pur- pose. The Directors, not less than three in number, tlie Clerk, and Treasurer shall be chosen annually by the stockholders, and shall hold their offices until others are chosen and qualified in their stead. The Clerk shall be sworn, and shall record all the votes of the company in a book to be kept for that purpose, and perform such other duties as shall be assigned to him. The Treasurer shall give bond for the faithful discharge of his duty.^ 6. The liability of the sureties on the bond of the Treasurer of a manufacturing corporation the con- dition of which provides for his faithful discharge of the duties of his office " during the term for which he has been elected, and for and during such further time as he may continue therein by any re-election or otherwise," extends only to defaults committed by the principal during his " continuous holding of the office," and not to those occurring during his " resumption of the office," after ceasing for a time to hold the same, and after another person has exer- cised its duties upon an election, and qualification therefor by giving an official bond. And this would appear to be the doctrine also in England.^ 1 Gen. Sts. u. 60, § 7 ; St. 1865, o. 236. 2 Gen. Sts. u. 60, §§ 3-6 ; see § 3 of this chapter. 8 Midd. Manuf. Co. «. Lawrence, 1 Allen, 339 ; Mayor, Aldermen, &c., V. Oswald, 3 El. & Bl. 653. 170 MANUFACTURING COBPORATIONS. The whole subject of the nature and extent of the liability of sureties upon the bond of a corporation Treasurer is very fully considered in the case of Lexington ^ West Camhridge Railroad Co. v. Elwell, 8 Allen, 371, and cases there cited. Upon the par- ticular phraseology of the bond in this case, which was to the efiFect that " if the said Treasurer shall, during his continuance in office during the present year, and for such further periods as he may from time to time be elected to said office, well and truly perform the duties of said office, and shall faithfully disburse all moneys that may come into his hands," etc., it was held, that " the liability of the sureties would be limited, as in the case of Chelmsford Co. v. Demorest, 7 Gray, 1, to the year for wliich the party was elected, and for such further time as was reason- ably sufficient for the election and qualification of his successor, and no longer, although the corpora- tion failed to elect at their next annual meeting ; " that to extend this liability during the period of a year in which the incumbent held over without re- election at the regular annual meeting, and during periods subsequent to such re-election at the expira- tion of said year, — no third person having meanwhile been placed in the office, — would practically be to render the sureties " responsible by the terms of their bond for any defaults at any future time, although the corporation wholly neglected its duty to make an election at the expiration of the appointed term of office ; " that such a construction of the bond would be improper because " the sureties had a right to all the benefits that might arise from a non-election. In UNDER SPECIAL CHARTER. 171 making such election the Directors may be said to affirm their confidence in the incumbent. Permit- ting him to discharge the duties of an incumbent in office was a different thing." And, in general terms, " that the obligation of the sureties as to such further periods as he may, from time to time, be elected to said office, implies contin- uous re-elections" and that this continuity is inter- rupted by the omission of the Directors, for twelve months after the expiration of the period for which the Treasurer was elected, to make an election ; as in the case above cited of Middlesex Manuf. Co. v. Lawrence, an interruption of like effect was caused by the " withdrawal of the Treasurer from office, and the appointment of another for a few months, after which the former Treasurer was re-appointed, and assumed the office again." 7. It was, moreover, held, that it is not necessary to the maintenance of an action upon such a bond, that it should have been approved and accepted by the Directors.! And that " the Gen. Sts. c. 63, § 2, do not seem, in form, to require a specific act of ap- proval of the bond of the Treasurer by the Direc- tors." Also, that " the various reports of the com- mittees of the corporation appointed to audit the accounts of the Treasurer do not estop the plaintiffs from enforcing a claim for unfaithfulness and mis- appropriation of the funds intrusted to him, against the sureties in the bond." 8. A corporation whose charter requires that all its " contracts, etc., shall be signed by the President 1 See Amlierst Bank v. Root, 2 Met. 533, and cases cited. 172 MANUFACTUEING COEPOEATIONS. and Secretary, or by such other officer or officers as the Directors may appoint for that purpose," is bound by the indorsement of a promissory note made by the President alone, and without proof, in the form of a vote of the Directors, of his authority so to do.^ It is unnecessary for a corporation to show affirm- atively the authority of their Treasurer or fiscal agent to draw, indorse, accept, or transfer notes and drafts ; for " the rule is well settled, that if a corpo- ration permit their Treasurer to act as their general fiscal agent, and hold him out to the public as having the general aiithority implied from his official name and character, and by their silence and acquiescence suffer him to draw and accept drafts, and to indorse notes payable to the corporation, they are bound by his acts done within the scope of such implied authority." ^ So, in the case of manufacturing corporations organized under the General Laws, it was held, in the case of Bird v. Daggett, 98 Mass. 494, that, if an Agent of the company who was duly authorized by a By-Law to sign " all notes and business paper of the company," gives accommodation notes in the name of the company, the corporation, notwith- standing any want of authority of the Agent to ex- ecute them for the purposes for which they were given, is liable on them to a holder who took them in good faith, for value, before maturity ; and such 1 Topping V. Bickford, 4 Allen, 120; Melledge v. Boston Iron Co. 5 CuBh. 158. 2 Lester v. Webb, 1 Allen, 34 j Fay v. Noble, 12 Cash. 1; Williams V. Cheney, 3 Gray, 215 ; Conover ». Mutual Ins. Co. 1 Comst. 290. UNDER SPECIAL CHAETEE. 173 holder cannot recover damages against the Agent for his unauthorized issue of them. But it is also well settled, that the Agent of a cor- poration may, by the form of the promise, and the manner of his signature, fix upon himself a personal liability. As where the President of the corporar tion C. D., in consideration of value received in a policy of insurance issued by the E. P. Insurance Company, signed a note therefor : " I promise to pay the E. F. Insurance Company, or their Treasurer for the time being. A. B., President of the C. D. R.R. Corp."^ Also where the form of the signa- ture was, " A. B., Trustee of the C. D. Railroad ; " « although it was in evidence that the said Trustee had entire charge of the property and business of the company, and delivered bonds of the company as collateral security for this note. 9. The capital stock of every company, the amount whereof had been fixed and limited by such com- pany according to law, at the time of the enactment of the General Statutes, shall remain so fixed,' sub- ject to be increased or reduced pursuant to the pro- visions of c. 60 of said Statutes. The amount of the capital stock of every company organized after the enactment of the General Statutes shall be fixed and limited by the company, and shall, at its first meeting, be divided into shares, of which a record shall be made by the Clerk. The shares shall be numbered, and every stockholder shall have a Cer- tificate under the seal of the corporation, and signed 1 Haverhill Mut. Fire Ins. Co. v. Newhall, 1 Allen, 130. 2 Fiske V. Eldridge, 12 Gray, 171, and cases there cited. 174 MANUFACTURING CORPORATIONS. by the Treasurer, certifying his property in such shares as are expressed in the certificate. The President and Directors, with the Treasurer and Clerk, shall, after the payment of the last instal- ment of the capital stock, make a Certificate stating the amount of the capital so fixed and paid in ; which Certificate shall be signed and sworn to by the President, Treasurer, Clerk, and a majority of the Directors ; and they shall cause the same to be recorded in the Registry of Deeds for the County or District wherein the works of the company are established. Every company may, at any meeting called for the purpose, increase its capital stock and the num- ber of shares therein : provided, that the stock when so increased shall not exceed the amount authorized by law. And a certificate shall, in such case, be made and recorded in manner and form as above provided, under penalty, in case of non-per- formance of this duty, of the liabilities stated in Chap. IV. Every company may, by a vote at any meeting called for the purpose, reduce its capital stock ; in wliich case a certified copy of the vote shall be recorded in the Registry of Deeds for the County or District wherein the works of the company are established, under penalty, in case of non-perform- ance of this duty, of the liabilities siated in Chap. IV. And if any part of the capital stock of a com- pany is withdrawn and refunded to the stockholders, before the payment of all the debts of the company contracted previously to the recording of the copy UNDER SPECIAL CHARTER. 175 of a vote for that purpose in the Registry of Deeds as above provided, the stockholders shall be liable in the manner stated in Chap. IV.^ 10. Every manufacturing company incorporated prior to June 29, 1857, shall give notice annually in some newspaper printed in the County where the works of the company are established, and if there is no such paper, then in some newspaper in an adjoining County, of the amount of all assessments voted by the company and actually paid in, and the amount of all existing debts ; which notice shall be signed by the President and a majority of the Di- rectors, under penalty, in case of non-performance of this duty, of the liabilities stated in Chap. IV. Companies subsequently established shall make, publish, and deposit all the Certificates and Returns required of corporations organized under the Gen- eral Statutes, c. 61, in the manner and under similar liabilities to those therein specified.^ 11. Every company may, by a vote of three-fourths of the general stockholders, at a meeting duly called for the purpose, issue two kinds of stock ; namely, general stock and special stock. The special stock shall at no time exceed two-fifths of the actual capi- tal of the corporation, and shall be subject to re- demption at par after a fixed time, to be expressed in the Certificates. Holders of such special stock shall be entitled to receive, and the corporation shall be bound to pay thereon, a fixed half-yearly sum or 1 Gen. Sts. c. 60, §§ 8-11, 18, 19, 21, 22. 2 Gen. Sts. c. 60, §§ 23, 24; c. 61, §§ 6, 8, 9, 12; St. 1862, r. 210, § 2. See Chap. VI. of this work, §§ 1, 3, 6-7. 170 MANUFACTURING COEPOEATIONS. dividend, to be expressed in the Certificates, not ex- ceeding four per cent.^ 12. Sliares may be transferred by the proprietor, by an instrument in writing under his liand, and re- corded by the Clerk of the corporation in a book to be kept for that purpose. The purcliaser named in such instrument so recorded shall, on producing the same to the Treasurer, and delivering to him the former Certificate, be entitled to a new Certificate.^ 13. Every company may from time to time, at a legal meeting called for the purpose, assess upon each share such sums of money as the company thinks proper, not exceeding in the whole the amount at which each share was originally limited ; and such sums assessed shall be paid to the Treas- urer at such times and by such instalments as the company directs. No note or obligation given by a stockholder, whether secured by pledge or other- wise, shall be considered as payment of any part of the capital stock. If the proprietor of any share neglects to pay a sum duly assessed thereon, for the space of thirty days after the time appointed for pay- ment, the Treasurer of the company may sell by pub- lic auction a sufficient number of his shares to pay all assessments then due from him, with necessary and incidental charges. The Treasurer shall give notice of the time and place appointed for such sale, and of the sum due on each share, by advertising the same three weeks successively before the sale in some news- paper printed in the County where the manufactory 1 Gen. Sts. c. 60, § 12. See § 9 of this chapter. See also Chap. IIL sec. iii. § 18. ' Gen. Sts. c. 60, § 13. UNDER SPECIAL CHAETEE. 177 is established ; and if there is no such paper, then in some newspaper printed in an adjoining County ; and a deed of the shares so sold, made by the Treasurer, and acknowledged before a Justice of the Peace, and recorded as above provided, shall transfer said shares to the purchaser, who shall be entitled to a Certifi- cate therefor.^ 14. Any corporation organized for the manufac- ture of cotton or woollen goods may, upon the con- sent of four-fifths of the stockholders, by a vote at a meeting called for the purpose, carry on the manu- facture of silk, linen, flax, or india-rubber goods.^ 1 Gen. Sts. c. 60, §§ 14, 15, 16. 2 Gen. Sts. u. 60, § 37. 12 178 MANUFACTURING CORPOEATIONS. CHAPTER VI. MANUFACTURING CORPORATIONS CREATED OTHERWISE THAN BY CHARTER. Section I. Companies for Gutting and Selling Ice ; for Mechanical, Mining, Quarrying, and Manufacturing Purposes; and for Agricultural and Horticultural Business. 1. Organization, and Articles of Association. 2. Penalties, civil and criminal, for unautliorized use of trade-mark. 3. First meeting. — Confirmation of organization. 4. Certificate to be made, filed, etc., before commencing business. 5. Powers, duties, and restrictions. 6. Capital stock ; how fixed, increased, or reduced. 7. Certificates. — Returns. — Notices. 8 Personal liability of oflicers and stockholders. 9. St. 1862, 0. 218, applicable to corporations under the General Laws, as well as to chartered companies. 10. Liability of subscribers to Articles of Association or By-Laws. 11. Right to claim shares subscribed for in corporations under the General Laws. 12. Liability of an agent of such corporation to pay for services ren- dered on account thereof. 1.3. Change of material manufactured. 14. Authority of Legislature over corporations herein mentioned. 1. Three or more persons who shall have associ- ated themselves together by Articles of Agreement in writing, for the purpose of cutting, storing, and sell- CREATED OTHERWISE THAN BY CHARTER. 179 ing ice, for any agricultural or horticultural business, or of carrying on any mechanical, mining, quarry- ing, or manufacturing business, except that of dis- tilling or manufacturing intoxicating liquors, and shall have complied with the provisions of General Statutes, 0. 61, shall be and remain a corporation under any name indicating their corporate character assumed in their Articles of Association, which shall also fix and limit the amount of the capital stock, and distinctly and definitely specify the purpose for and the place within which such corporation is es- tablished ; and such corporation shall not direct its operations or appropriate its funds to any other purpose. The name assumed in the Articles of Asso- ciation shall be one which is not previously in use by any other corporation or company.^ In the case oiBird v. Baggett, 97 Mass. 494, it was held that a specification in the Articles of Association of a joint stock company, organized in 1857, under St. 1851, c. 133, and the Acts in addition thereto, that it is established for the purpose " of manufac- turing and selling daguerreotype mattings and pre- servers, and all other goods, wares, merchandise, and articles made of brass, silver, gold, iron, or other metals, or any compounds thereof," was sufficiently distinct and definite within the meaning of the above statute, and that of General Statutes, c. 61, § 2, to obviate any objection as to the legality of its organ- ization ; the Court remarking that the enumeration of these purposes, " although very extensive, appears to be distinct and definite;" adding, that "we are 1 Gen. Sts. o. 61, §§ 1, 2, 6; St. 1862, c. 182. 180 MANUFACTURING CORPORATIONS. aware of no legal objection to the manufacture by a single corporation of the greatest variety of ar- ticles." 2. When a person uses any peculiar name, letters, marks, device or figures, cut, stamped, cast, or en- graved upon, or in any manner attached to or con- nected with, any article manufactured or sold by him to designate it as an article of a peculiar kind, character or quality, or as manufactured by him, no other person, without his consent, shall use the same or any similar names, letters, marks, devices, or figures, for the purpose of falsely representing any articles to have been manufactured by, or to be of the same kind, character, or quality as that maniifac- tured or sold by, the person rightfully iising such name, letters, mark, device, or figure. Whoever vio- lates these provisions, or knowingly sells or exposes for sale any article having any name, letters, mark, device, or figure attached to or connected with it, in violation of said provisions, shall be liable to any party aggrieved thereby for all damages actually incurred, to be recovered in an action of tort. Such use of trade-marks or names may also be restrained by the Supreme Judicial Court by injunction.^ Whoever knowingly and wilfully forges or coun- terfeits, or causes or procures to be forged or counterfeited, upon any goods, wares, or merchan- dise, the private labels, stamps, or trade-marks of any mechanic or manufacturer, with intent to de- fraud the purchasers or manufacturers of any goods, wares, or merchandise whatever, shall be punished 1 Gen. Sts. u. 56, §§ 1, 2, 4. CREATED OTHERWISE THAN BY CHARTER. 181 by imprisonment not exceeding six months, or by fine not exceeding five hundred dollars ; whoever knowingly vends any such forged or counterfeited goods, wares, or merchandise, without disclosing the fact to the purchaser, shall be punished by impris- onment not exceeding six months, or by fine not exceeding fifty dollars.^ 3. The first meeting of such corporations shall be called by a notice signed by one or more of the per- sons named in such agreement, stating the time, place, and purposes of the meeting, a copy of which shall, seven days at least before the meeting, be given to each member, or published in some news- paper printed in the County where such corporation is to be located. If doubts arise whether any such corporation is legally organized, the stockholders, at a special meeting called for the purpose under their By-Laws, or under the provisions aforesaid, may by vote confirm such organization and all proceedings under it ; and by so doing, and depositing one copy of such vote with the Clerk of the City or Town where the corporation is located, and one with the Secretary of the Commonwealth, such corporation, and the subsequent acts of the company, shall be held legal and valid as if the original organization bad been legal.^ 4. Before such corporation commences business, the President, Treasurer, and a majority of the Di- rectors shall sign, swear to, publish three times in some newspaper printed in the Town or County where- in such corporation is situated, and deposit with the 1 Gen. Sts. c. 161, §§ 55, 56. 2 Gen. Sts. c. 61, §§ 3, 4. 182 MANUFACTURING CORPORATIONS. Secretary of the Commoiiwealth, a Certificate setting forth the corporate name and purpose of the associar tion, the amount of the capital stock, tlie amount actually paid in, and the par value of the shares in the corporation ; and shall file a copy thereof with the Clerk of the City or Town wherein the corporation is situated, to be by him recorded in a book kept for the purpose. Within thirty days after the payment of any instalment called for by the Directors, a Cer- tificate thereof shall be, in like manner, signed, sworn to, deposited, filed, and recorded. But, when the officers of such corporation have failed to per- form the duties above prescribed, said Certificates may be made, published, and filed at any time after such failure. The fee for filing any such Certificate in the Secretary's department shall be five dollars.^ 5. Every corporation so organized, and its officers and stockholders, shall have all the powers and priv- ileges, and be subject to all the duties, restrictions, and liabilities, set forth in General Statutes, c. 60, so far as they are applicable, except § 23 of said chapter concerning certain annual Notices ; and the President, Directors, and Treasurer shall be chosen according to the provisions of said chapter. Such corporation may, in its corporate name, take, hold, and convey such real and personal estate as is necessary for the purposes of its organization ; may carry on its business, or so much thereof as is con- venient, beyond the limits of the State, and may there purchase and hold any real or personal estate necessary for conducting the same.^ 1 Gen. Sts. c. 61, §§ 8, 12; St. 1863, .;. 231, § 2; St. 1865, o. 76, § 1. 2 Gen. Sts. v;. 61, §§ 5, 7. CEEATED OTHERWISE THAN BY CHARTER. 183 6. The amount of capital stock of such corpora- tion shall be fixed and limited in its Articles of Asso- ciation, as aforesaid. The corporation may increase or diminish its amount, and the number of shares, at any meeting of the stockholders specially called for the purpose ; but the capital shall never be less than five thousand, nor more than five hundred thousand dollars, and no share shall be issued for less than its par value. When the capital stock and shares are so increased or reduced, a Certificate thereof shall be made, signed, sworn to, deposited, and recorded, in like manner as required of the cor- poration before commencing business, and after the payment of any instalment.^ 7. In addition to the Certificates, Returns, and Notices above mentioned, every corporation organ- ized under the provisions of said c. 61 of the Gen- eral Statutes, shall file the Certificates required of corporations by §§ 18, 19 of c. 60;^ and the Directors shall make, and the President, Treasurer, and a majority of the Directors shall sign, swear to, and deposit with the Clerk of the City or Town in which such corporation is established or located, within thirty days after the date of the annual or semi-annual meeting next preceding the date of such Certificate, a Certificate stating the date of such annual or semi-annual meeting, the amount of capi- tal stock paid in, the name of and number of shares held by each stockholder, the amount vested in real estate and in personal estate, the amounts of prop- 1 Gen. Sts. c. 61, §§ 6, 8, 9, 12. See § 4 of this chapter. 2 See Chap. V. § 10 of this work. 184 MANUFACTURING COEPOEATIONS. erty owned by and debts due to the corporation, and the amount, as nearly as can be ascertained, of existing demands against the corporation, all as ascertained and exhibited at the date of su£h an- nual or semi-annual meeting. The Secretary of the Commonwealth shall annually prepare, cause to be printed, and on the first Wednesday of January submit to the Legislature, a true abstract from the Certificates required by said c. 61 of the General Statutes to be deposited with him. Nothing contained in St. 1862, c. 218, entitled " An Act to define and regulate the enforcement of the liabilities of officers and stockholders of manu- facturing corporations," ^ shall be construed to release any manufacturing corporation organized under said c. 61 of the General Statutes, or the officers of any such corporation, from their obliga- tion to file the Certificates, and publish the Notices required by said c. 61.^ 8. The Certificates and Notices required by said c. 61 to be filed and published, have been cited above. If the officers of any such corporation vio- late the provisions respecting the Articles of Asso- ciation, or neglect or refuse to perform the duties relative to the Certificate to be made before com- mencing business, after the payment of any instal- ment, and when the capital stock and shares are increased or reduced, they shall be jointly and sev- 1 See Chap. IV. sec. ii. and Chap. V. §§ 11, 12 of this work. 2 Gen. Sts. c. 60, §§ 18, 19; ib. c. 61, § 13; St. 1862, u. 210, § 1; St. 1863, 0. 246, § 1. In St. 1862, c. 210, § 1, twelfth line from top, the word "such" appears to be a misprint for each. The error exists in the engrossed Act, and in the " elements " of the bill. CREATED OTHERWISE THAN BY CHARTER. 185 erally liable for all debts of the corporation con- tracted during the continuance of such violation, refusal, or neglect. They shall also be so liable in case of refusal or neglect to perform the duties required by Acts of 1862, c. 210.i 9. Upon the general question as to wliether the stockholders or officers of corporations established under General Laws were intended to be referred to in, and are affected by, the provisions of St. 1862, c. 218, it is said by the Court in the case of JPeele v. Phillips, 8 Allen, 86, that " there is nothing in any provision of this Statute which expresses an inten- tion to create or establish a discrimination as to the liability of, or the mode of proceeding against, the stockholders or officers of corporations organized under particular Acts of incorporation, and those in which parties associate themselves together for the same or the like purpose under the General Laws. They are equally manufacturing corporations whether their authority to act is derived from one source or the other. . . . Being thus substantially alike, both in respect to privilege and responsibility, there is no reason why general terms, which are equally appli- cable to both, should be construed as referring to one rather than to the other, class of these corpora- tions. The declared object and purpose of the Stat- ute of 1862 were to define the-liabilities of officers and stockholders, and to provide a certain, iiniform, 1 Gen. Sts. o. 61, §§ 11, 12; St. 1862, u. 210, § 1; ib. u. 218; St. 1863, c. 246, § 2. See first part of § 7, above. For further and general provisions respecting the liability of the officers and stocliholders of manufacturing corporations, reference is had to Acts of 1862, c. 218. See the sanae cited in Chap. IV. sec. ii. of this work. .186 MANUFACTURING CORPORATIONS. and convenient mode of enforcing them, so that the rights and claims of all creditors should be secured and adjusted in a single suit. And when the lia- bility and the occasion for a remedy are exactly the same, nothing but the most explicit language to that effect should restrict provisions which, in terms, are equally applicable to both classes of corpora- tions, — to those having their origin in special char- ters rather than in and by force of the general law." 10. In the case of Flint v. Peirce, 98 Mass., the nature and extent of the personal liability attaching to subscribers of the Articles of Association or By- Laws of corporations organized under the General Statutes, and the value to corporate creditors of any pledges or guaranties contained therein, are well illustrated: — " The office of a By-Law," it is said, " is to regu- late the conduct and define the duties of the mem- bers toward the corporation and between themselves. So far as its provisions are in the nature of contract, the parties thereto are the members of the associa- tion as between themselves ; or the corporation upon the one side, and its individual members upon the other. The right of any third party, stranger to the association, to establish a legal claim through such a By-Law, must depend upon the general prin- ciples applicable to express contracts, as laid down in Mellen v. Whipple, 1 Gray, 317, supra, and the subsequent decisions in Field v. Crawford, 6 Gray, 116 ; Dow V. Clarh, 7 Gray, 198." In the case at bar, in which it was sought to CREATED OTHERWISE THAN BY CHARTER. 187. recover, from a subscriber to the By-Laws of a cor- poration, a debt due from the corporation, by virtue of a pledge contained in said By-Laws, to the effect that " the members of this Association pledge them- selves in their individual as well as their collective capacity to be responsible for all moneys loaned to this Association, and for the payment of which the Treasurer may have given his obligation, agreeably to the directions of the Directors," the Court say, that " the defendant is not a party to the contract upon which the action is based, and the plaintiff does not seek by this suit to charge him upon any statute liability as a stockholder. ... No action can be maintained by such third party, unless he can bring his case within some of the recognized exceptions to that general rule. A pledge like the one in question, if made for the purpose of enabling the corporation to obtain a loan upon the faith of it, and used for that purpose, may perhaps give a right of action against the subscribers in favor of a party who has been induced to advance money upon its credit. This seems to be. implied strongly by the decision in the case of Andover v. Mint, 13 Met. 543, inasmuch as the plaintiif in that case appears to have failed to recover upon a similar claim, merely for the reason that the defendant had not signed the By-Law. But no such facts are shown to exist in the present case. The plaintiff not only is no party to the contract contained in the By-Law, but he fails to show any privity between himself and the defendant in relation to the subject- matter, or to the consideration of his demand." 188 MANUFACTURING COEPORATIONS. 11. No action can be maintained against a manu- facturing company, organized under the General Statutes, for refusing to deliver certain shares of the stock tlaereof under the following circumstances : The Articles of Association, agreeing to take a cer- tain number of shares of the corporate stock, signed by the plaintiff with others, were dated April 21 ; the corporation was organized July 3, and by the terms of the agreement the plaintiffs subscription became payable, one-third in cash on the organiza- tion of the corporation, the other two-thirds in six and twelve months, respectively, thereafter, with in- terest, or all in cash, at liis option. The notice of tlie first meeting of the subscribers for the pur- pose of organization, legally made and issued, failed to reach the plaintiff personally, but was delivered at his place of business, and the receipt of the notice acknowledged by his son, which the Court ruled to be " within the scope of his authority, and to be deemed equivalent to personal notice, in the absence of contradictory evidence." Another no- tice, fixing July 16 as the time for paying the first instalment, was placed under the door of the plaintiffs place of business, from which he had removed without giving notice where he might be addressed. The notice was afterwards mailed to him, at his supposed place of residence, and also sent to a place where he was believed to be tempo- rarily sojourning. " On the 21st of September, the of&cers of the corporation, having heard nothing from him, erased his name from the Articles of Agreement, made an entry on the stock-book that CREATED OTHERWISE THAN BY CHARTER. 189 his stock was forfeited, and permitted anotlier person to take it. The plaintiff contends that they had no right to do this, hut were bound to sell his stock in conformity with the provisions of the statute for non-payment of assessments, if they desired to dis- pose of it ; . . . and that though his agreement was originally made with his associates, as indi- viduals, yet the corporation, upon its organization, became a party to it, and liable to him for its per- formance." But it was held by the Court, that, " assuming this to be so, yet, in order to enable him to enforce its performance against them, he must allege and prove performance, or readiness to perform, on his part. The obligation, on the part of the corporation, was to allow him to take the two hundred shares for which he had subscribed. On his part it was to take and pay for them. By the terms of his subscrip- tion, one-third of the amount was payable immedi- ately upon the organization, which took place on the 3d of July. The vote of the Directors, postponing the payment to the 16th of July, was a mere exten- sion of time upon his promise. A notice of the postponement would hardly be necessary, yet the ofBcers made all reasonable efforts to give him notice of it, and failed because he had gone out of the Commonwealth, and left them ignorant of his ad- dress. He remained absent, and neglected to do any thing towards the performance of the contract ; and on the 21st of September the defendants elected to treat him as having abandoned the contract on his part, and undertook to rescind it on their part, 190 MANUFACTURING CORPORATIONS. by erasing his name from the agreement, and from their books, and allowing another party to take the stock which he had been entitled to take. We think, that, under the circumstances of the case, his delay to perform the contract was unreasonable, and that they were thereby released from all further obliga- tion to him. As he had never assented to tlie organization of the corporation, or to any of the acts done under it, they were authorized to treat him at that time as never having been a member. ... As they had received nothing from him, they had noth- ing to do, in order to rescind the contract, but to cancel his obligations to them. Tliis they did, and from that time he has been under no obligation to take or pay for any of the stock, nor has he had any right to demand any." ^ 12. No liability exists, on the part of an unin- corporated joint-stock company, to pay for services rendered under the following circumstances : A., without disclosing to B. the fact that he was acting as an agent, contracted for certain services to be rendered by B. at a stipulated price. B., after com- mencing the work and charging for the same on his books to A., learned from a third party that A. was only an agent, and that " the C. company " was the principal ; whereupon B. altered the charge in his books to " the C. company," and this con- tinued as the form of the charge until a short time before the bringing of the action, when he altered it back again to its original form. No notice was 1 Perkins v. Union Button-Hole and Embroidery Machine Co. 12 Allen, 273. CREATED OTHERWISE THAN BY CHARTER. 191 given of the first change in the form of the charge, and no attempt was made to enforce the payment of the claim against the principal. It appeared, in fact, that B. " was entirely ignorant wlio were the parties associated under the name of ' tlie C. com- pany.' " The Court lield, that " tlie agent liaving made no disclosure of his agency, nor made any reference to any other party wlio was responsible as principal, the mere casual statement to B. by a third person to tliis effect did not relieve A. of his indi- vidual liability. It is true that B., upon discovering the undisclosed principal, might have the election to resort to him for payment, but he was not bound to do so, when he had contracted with one who did not disclose his agency. . . . And, moreover, he could not have elected to resort to the individuals composing the company as his debtors, because their names were wholly unknown to him ; neither could he have elected to charge ' the C. company ' under that name as a legal principal, because there was no such legal body." ^ 13. Corporations organized under the provisions of General Statutes, c. 61, for the purpose of manu- facturing cotton or woollen goods, shall have the powers conferred upon like corporations organized under special charters by c. 60, § 37, of said Stat- utes.^ ' Hutchinson v. Wheeler, 3 Allen, 577. The provisions of Acts of 1665, c. 283, §§ 8-10, and of Acts of 1867, o. 299, respecting certain returns and liabilities, seem too remotely, if at all, applicable to inanu- facluring corporations, for consideration here. Reference may, however, be had to them in this connection. 2 Gen. Sts. c. 61, § 14. See Chap. V. § 13, of this work. 192 MANUFACTURING CORPORATIONS. 14. The Legislature may amend or repeal Gen- eral Statutes, c. 61, so as to affect existing corpora- tions, and may by special Acts annul or dissolve any such corporation.^ Section II. Gas-light Companies.'^ 1. Organization of, by ten or more persons. 2. May dig up streets, etc., under municipal control. 3. Liability over, of gas companies to towns, to repay damages. 4. Inspector of gas-meters, etc. — Appointment, duties, and tenure of office. 6. Standard of measure for gas, and how provided. 6. Inspector to be pecuniarily disinterested. — Oath, bond, and sal- ary. 7. Deputy-inspectors. — Examining, testing, and stamping of me- ters. — Fees. 8. Certain testing apparatus, how provided and used. 9. Merchantable gas. 10. Right of company to enter premises for purposes of examination. 11. Right to enter to stop supply, etc., in case of non-payment. 12. Penalties for certain injuries and interferences; waste or fraudu- lent use of gas. 13. Returns. 14. Franchise of gas company the proper subject of taxation. 15. Par value of shares to be paid in cash before declaring stock-divi- dend. 16-18. Liability of gas company for injuries to health caused by inhala- tion of gas. 19-21. Admissibility and competency of evidence concerning the above. 22. Liability for injury caused by using water impregnated by gas. 23. Liability for injury caused by explosion of gas. 24. Liability for unlawful obstruction of navigation by gas-pipe. 1 Gen. Sts. o. 61, § 19. 2 Except in Gen. Sts. c. 61, the statute law of the Commonwealth does not discriminate between gas-light companies created by charter, and those organized under the General Laws. CEEATED OTHERWISE THAN BY CHARTER. 193 1. For the purpose of making and selling gas for light in a City or Town, ten or more persons may organize as a corporation under, and shall be sub- ject to, the provisions of General Statutes, c. 61 ; but in a City or Town in which a gas company ex- ists in active operation, no such corporation shall be organized unless the parties to the association are inhabitants of the place ; nor unless the existing corporation has realized an annual yearly dividend of seven per cent, on its capital stock for a period of five years.i 2. Such corporations may, with the consent in writing of the Mayor and Aldermen, or Selectmen, dig lip and open the grounds in any of the streets, lanes, and highways of such place, so far as is neces- sary to accomplish the object of the corporation ; but such consent shall not affect the right or remedy to recover damages for any injury which shall be caused to persons or property by the doings of such corporations. They shall put all such streets, lanes, and highways which are opened, into as good repair as they were in when opened ; and, upon failure so to do vdthin a reasonable time, shall be deemed guilty of a nuisance. The Mayor and Aldermen, or Selectmen, of a place in which pipes or conductors of such a corporation are sunk, may regulate, re- strict, and control all acts and doings of such corpo- ration, which may in any manner affect the health, safety, convenience, or property of the inhabitants of such place.^ 3. When a party injured in his person or prop- 1 Gen. Sts. c. 61, § IB. 2 Gen. Sts. c. 61, §§ 16, 17. 13 194 MANUFACTURING CORPORATIONS. erty, by a defect in a highway, caiised by the opera- tions of a gas company in laying down or repairing its pipes, or otlierwise obstructing such way, recovers damages tlierefor of tlie Town wherein such injury is received, sucla Town shall, in addition to the dam- ages so recovered against it, be entitled to recover all the taxable costs of the plaintiff and defendant in the same action, in a suit brought against said gas company ; provided, said gas . company be liable for said damages ; and provided, reasonable notice' be given by such Town, to the gas company, so that it might have defended the original action.^ 4. The Governor shall, with the advice and con- sent of the Council, appoint an Inspector of Gas- Meters and of Illuminating Gas, to hold his office for the term of three years from the time of his ap- pointment, and until the appointment of his suc- cessor, subject to removal by the Governor and Council at their pleasure ; whose office shall be in the City of Boston, and whose duty it shall be, when required, as is hereinafter provided, to inspect, ex- amine, prove, and ascertain the accuracy of any and all gas-meters to be used for measuring the quantity of illuminating gas, to be furnished to or for the use of any person or persons, and, when found to be cor- rect, to seal, stamp, or mark all such meters and each of them with some suitable device, and with his name, the date of his inspection, and the num- ber of burners it is calculated to supply. Such device shall be recorded in the office of the Sec- retary of the Commonwealth. In the examination I St. I860, 0. 121. CREATED OTHERWISE THAN BY CHARTER. 195 of a meter the Inspector shall see that it is of an approved principle, and shall give his particular at- tention to the measure of the dial-plate; he shall prove the meter when set level, and for each burner which the manufacturer has stamped it to register, it shall be capable of passing gas accurately at the rate of six cubic feet per hour ; and no dry meter . shall be stamped correct which varies more than two per cent, from the standard measure of the cu- 'bic foot; and no wet meter shall be stamped cor- rect which is capable of registering more than two per cent, against the consumer, and five per cent, against the company. He shall keep at his office a correct record of all meters inspected by him, with their proof at the time of inspection ; which record shall be open at all times for examination by the officers of any gas-light company in this Common- wealth ; and he shall annually, in the month of Jan- uary, report to the Legislature tlie number of meters inspected and sealed, with such other information as he may deem expedient, for the year ending on the thirty-first day of December next preceding.^ 5. There shall also be provided at the office of the Inspector, at the expense of the gas companies of the Commonwealth, a standard measure of the cubic foot, and such other apparatus as in his judg- ment shall be necessary for the faithful performance of the duties of his office. The said cubic foot, which is hereby declared to be the standard or unit of measure for the sale of illuminating gas by meter, containing sixty-two and three hundred and twenty- 1 St. 1861, 0. 168, §§ 1, 2, 8; St. 1864, o. 296. 196 MANUFACTURING CORPORATIONS. one one-thousandth pounds avoirdupois weight of dis- tilled or rain water, weighed in air of the tempera- ture of sixty-two degrees, Fahrenheit scale ; the barometer being at thirty inches.^ 6. The Inspector shall receive an annual salary of three thousand dollars, which shall include his office rent and expenses, to be paid out of the Treas- ury on the warrant of his Excellency the Governor ; provided, however, that no warrant shall be drawn for the whole or any part of the salary of said Commis- sioner [Inspector] , for any larger amount than may have been actually paid into the Treasury of the Commonwealth. The said Inspector, shall within three months after his appointment, furnish to the Treasurer and Receiver-General a list of all the gas-light companies in operation in the Common- wealth ; and his salary for the year then commenced, and annually thereafter, shall be assessed and paid into the Treasury of the Commonwealth, by the sev- eral gas-light companies in this Commonwealth, in amounts proportionate to their appraised variation, as declared in the returns required of them;^ and in case such gas-light companies, or any or either of them, shall refuse or neglect to pay into the Treasury the amount or portion of said salary which shall be by said Treasurer required of them respectively, for the space of thirty days after written notice given by said Treasurer to them respectively to make such payment, then the said Treasurer shall institute an action in the name of and for the use of the Com- monwealth, against any such delinquent gas-light 1 St. 1861, u. 168, §§ 5, r. 2 Gen. Sts. u. 68, § 20. CREATED OTHERWISE THAN BY CHARTER. 197 company for their said portion or amount of such salary, with interest thereon at the rate of ten per centum per annum from the time when said notice to make such payment was given, and the costs of the action. Such Inspector shall not, in any way or manner, directly or indirectly, be interested pecuniarily in the manufacture or sale of illuminating gas or gas- meters, or of any article or commodity used by gas- light companies, or for any purpose connected with the consumption of gas, or with any gas company ; and shall not give certificates or written opinions to any maker or vender of any meter, or of any sjuch article or commodity ; and he shall be duly sworn to the faithful performance of his duties, and shall give bonds in the sum of five thousand dollars for the faithful discharge of the same.^ 7. Whenever the Inspector shall find himself unable to attend to his duties in any City or Town of any County, he shall appoint temporarily, and for such time as he may deem expedient, one or more Deputy Inspectors of meters for such County, who shall act under his direction ; they shall be duly sworn to the faithful performance of their duties, and shall not iu any manner be connected with, or employed by, any gas company, and shall be subject to the same disabilities as the Inspector, as above set forth, and shall be paid by fees for examining, comparing, and testing gas-meters, with or without stamping them ; wliich fees shall be twenty-five cents for each meter delivering a cubic foot of gas in four 1 St. 1861, c. 168, §§ 2, 3. 198 MANUFACTURING COEPOEATIONS. or more revolutions, vibrations, or complete repeti- tions of its action, and thirty cents for each meter delivering a cubic foot of gas in any less number of revolutions as heretofore described, and for each meter thus delivering more than one cubic foot of gas as before named, the further sum of twenty cents for each additional cubic foot of gas delivered ; provided, however, that in all cases of inspection by the Deputy Inspector, the gas company or consumer may appeal to the State Inspector from the Deputy Inspector's decision. No meter shall be set after the first day of Octo- ber, eighteen hundred and sixty-one, unless it be sealed and stamped in the manner above required.^ 8. Every gas-light company with a capital paid in of one hundred thousand dollars or more, and every maker and vender of meters, shall set up at some convenient place upon their premises a gas- holder, to be tested, and, if correct, stamped and sealed, containing five or more cubic feet, by means of which meters shall be tested at the average pres- sure at which gas is supplied in the City or Town where they are to be used, attention being paid to the temperature of the room where the trial is made, of the apparatus, and of the gas.^ There shall be provided by every gas-light company a test meter of a construction approved by the Inspector, and stamped by him, to be used in cities and towns where no test gas-holders are provided, or whenever proving by a gas-holder is impracticable or incon- venient. 1 St. 1861, 0. 168, §§ 4, 6. 2 See § 9 below. CREATED OTHERWISE THAN BY CHARTER. 199 Meters in use shall be tested on tlie request of the consumer, or the gas-light company, in the pres- ence of the consumer if desired, with sealed appara- tus, as above provided ^ by the Inspector or Deputy Inspector. If the meter is found to be correct, the party requesting the inspection shall pay the fees above named, and the expense of removing the same for the purpose of being tested ; and the re-inspection shall be stamped on the meter. If proved incorrect, the gas-light company shall pay such expenses, and shall furnish a new meter without any charge to the consumer.^ 9. Illuminating gas shall not be merchantable in this Commonwealth which has a minimum value of less than twelve candles ; that is, a burner consum- ing five cubic feet per hour shall give a light, as measured by the photometric apparatus in ordinary use, of not less than twelve standard sperm candles, each consuming one hundred and twenty grains per hour. Every gas is to be tested with the burner, and under the pressiire best adapted to it ; and the result shall be calculated at a temperature of sixty degrees, Fahrenheit. Whenever reqtiested by the Mayor and Aldermen of any City, or the Selectmen of any Town, the Inspector shall report to them whether the gas supplied in the respective City or Town is of the legal standard, and also whether it is sufficiently well purified from sulphuretted hy- drogen, ammonia, and carbonic acid.^ 10. Any officer or servant of a gas-light company, 1 See § 4 above. ^ gt. 1861, ^. 168, §§ 8, 9. 8 St. 1861, c. 168, § 10. 200 MANUFACTURING CORPORATIONS. duly authorized in writing by the President, Treas- urer, Agent, or Secretary of said company, may, at any reasonable time, enter any premises lighted with gas supplied by such company, for the purpose of examining or removing the meters, pipes, fittings, and works for supplying or regulating the- supply of gas, and of ascertaining the quantity of gas con- sumed or supplied ; and if any person shall at any time, directly or indirectly, prevent or hinder any such officer or servant from so entering any such premises, or from making such examination or re- moval, such officer or servant may make complaint, under oath, to any Justice of the Peace of the County wherein such premises are situated, stating the facts in the case, so far as he has knowledge thereof; and the said Justice may thereupon issue a warrant di- rected to the Sheriff or either of his deputies, or to any Constable of the City or Town where such com- pany is located, commanding him to take sufficient aid, and repair to said premises, accompanied by such officer or servant, who shall examine such me- ters, pipes, fittings, and works for supplying or reg- ulating the supply of gas, and of ascertaining the quantity of gas consumed or supplied therein, and, if required, remove any meters, pipes, fittings, and works belonging to said company .^ 11. If any person or persons supplied with gas neglects or refuses to pay the amount due for the same, or for the rent of the meter or other articles hired by him or them of the company, such com- pany may stop the gas from entering the premises 1 St. 1861, c. 168, § 11. CREATED OTHERWISE THAN BY CHARTER. 201 of such person or persons. In such cases, the offi- cers, servants, or workmen of the gas-light company may, after twenty-four hours' notice, enter the prem- ises of such parties, between the hours of eight in the forenoon and four in the afternoon, and separate and take away such meter or other property of the company, and may disconnect any meter, pipes, fit- tings, or other works, whether the property of the company or not, from the mains or pipe of the com- pany.i 12. Every person who wilfully or fraudulently injures, or suffers to be injured, any meter, pipes, or fittings belonging to any such gas-light com- pany, or prevents any meter from duly registering the quantity of gas supplied through the same, or in any way hinders or interferes with its proper action or just registration, or fraudulently burns the gas of said company, or wastes the same, shall, for every such offence, forfeit and pay to tlie com- pany not more than one hundrejl dollars, to be re- covered in an action of tort to be brought by the company against such offender; and, in addition thereto, shall pay the company the amount of dam- age by them sustained by reason of such injury, prevention, waste, consumption, or hinderance. Every person who attaches any pipe to any main or pipe belonging to any such gas-light company, or otherwise burns or uses, or causes to be used, any gas supplied by said company, without their written consent, unless the same passes through a meter set by the company, shall forfeit and pay to 1 St. 1861, c. 168, § 12. 202 MANUFACTURING CORPORATIONS. said company the same fine and in the same man- ner as above declared. ^ "Illuminating gas may be the subject of lar- ceny." The offence " may be committed by a per- son on his own land, by secretly opening a gas company's service-pipe, which was laid there for the purpose of supplying his house with gas, and connecting the same with another pipe, through which he secretly and fraudulently receives and uses the company's gas, after they have closed their service-pipe and removed their meter, and given him notice thereof." ^ 13. For the Returns, etc., required of gas-light companies, reference may be had to St. 1865, c. 283, § 3, as set forth in Chap. IV. sec. i. §§ 9, 10 of this work, supra. Also to the Certificates and Returns required of manufacturing corporations imder spe- cial charter, as set forth in Chap. V. § 10, supra. 14. A gas-light company incorporated under a charter which does not authorize it to take private property not appropriated to public use, nor impose upon it any public duty, is not a public corporation in such sense as to exempt its property from taxa- tion in the City or Town where it is situated. The franchise of the corporation is the proper subject of taxation under St. 1864, c. 208, § 5, according to the rule stated in Oommonwealth v. Hamilton Manuf. Co. 1 St. 1861, c. 168, §§ 13, 14. 2 Commonwealth J) Shaw, 4 Allen, 308, head-note. The acts referred to in this decision were committed prior to the time when St. 1861, c. 168, took effect. The provisions of this Statute are applicable to all companies who manufacture gas for sale. See St. 1861, o. 168, § 15. Eegina v. White, 6 Cox, C.C. 213. CREATED OTHERWISE THAN BY CHARTER. 203 12 Allen, 298, ante; and in deducting the value of its "real estate and machinery" from the market value of the capital stock, or aggregate of the shares,- in order to ascertain the amount of such franchise, it is proper to include under the head of " machin- ery" — using that term "in a broad, comprehen- sive, and legitimate sense — the entire apparatus by which gas is manufactured and distributed for con- sumption throughout a city or town," as constituting " one great integral machine, consisting of retorts, station-meters, gas-holders, street-mains, service- pipes, and consumers' meters, all connected and op- erating together, by means of which the initial, in- termediate, and final processes are carried on, from its generation in the retort to its delivery for the use of the consumers." ^ 15. No railroad corporation, telegraph or gas-light company chartered under the laws of this Common- wealth, shall hereafter declare any stock dividend, or divide the proceeds of the sale of stock among its stockholders, nor shall such corporation create any additional new stock, or issue certificates thereof to any person whatever, unless the par value of the shares so issued is first paid iu cash to the Treas- urer of said corporation. All certificates of stock issued in violation of the above provisions shall be void ; and the Directors of any such corporation issuing the same shall be liable to a penalty of one thousand dollars each, to the use of the Commonwealth, to be recovered by indict- ment in any County where any of said Directors 1 Commonwealth v. Lowell Gas Light Co. 12 Allen, 75. 204 MANUFACTURING CORPORATIONS. reside ; provided, that if any such Director shall prove that previous to such issue he filed his dissent in writing thereto with the Clerk of said corpora- tion, or was absent, and at no time voted therefor, he shall not be liable for the same.^ 16. A few recent adjudications touching the lia- bilities of the manufacturers of illuminating gas, or the apparatus therefor, for injuries done to person or property by reason of the inhalation or explosion of the gas, or otherwise occasioned by the escape or improper use of the same, may claim our attention. Thus in an action against a gas-light company for damages for an injury to health caused by an acci- dental escape of gas from a main pipe in a public street^at a point several hundred feet distant from a dwelling-house, from which point it passed, through a public sewer and a private drain, and under an- other street through which gas-pipes were not laid, into the cellar, it was held, that the defendants " would not be liable for damages sustained after the time when the plaintiff, in the exercise of due care, might have given notice to the company of the presence of the gas in the house, or procured another place of residence ; if it appears that tliere was at the outset no want of care on the part of the company in laying their pipe, that they had no knowl- edge that the gas which was escaping had made its way to said premises, and by the use of due care could not ascertain the fact, and that, as soon as they knew of the leak, they used reasonable means to ascertain where it was and to stop it. . . . In such 1 St. 1868, 0. 310. CREATED OTHERWISE THAN BY CHARTER. 205 action, evidence that said party, and other members of his family occupying the same house, had been in good health before the time complained of, and that afterwards they all became ill, and that one of his daughters died, is competent ; but evidence in de- fence that the said illness was typhoid fever, that prior occupants of the same house had been much afflicted with illness of the same class ; that many families had removed from it on that account ; that its location was low and upon made land, and that it was generally regarded and reputed to be un- healthy, is incompetent." ^ As is also " evidence to the effect that the inmates of another house were made sick in consequence of inhaling the gas that escaped into their house from the same defect in the pipes. The evidence should be limited to the effect of the gas upon those who have in common, and under similar circumstances, inhaled it. If the evi- dence falls short of proving that the gas caused the sickness of the other persons, it amounts to noth- ing." 2 17. But a verdict awarding damages for an injury to health occasioned by an escape of gas under the above circumstances will not be set aside if it appear that the plaintiff gave immediate notice to the agent of the company at their office ; " it being immaterial how, by what means, or through whom, they obtained ■■ Hutiti). Lowell Gas Light Co. 1 Allen, 343, and head-note; Holly V. Boston Gas Light Co. 8 Gray, 123; Peyton v. Mayor, 9 B. & C. 725; 2 Greenleaf s Ev. § 473. 2 Emerson v. Lowell Gas Light Co. 3 Allen, 410 ; Hunt v. Lowell Gas Light Co. 8 Allen, 169. 206 MANUFACTURING CORPORATIONS. information, and sufficient that tliey had by any means been made acquainted with the fact tliat their pipes had become imperfect and leaky, so that their gas was thereby emitted into the plaintiffs house, to make it tlieir duty to attend immediately to it, and to use due diligence to stop the leak, and exclude the gas from his premises." Testimony produced by the plaintiff tending to contradict or disparage the credibility of a witness offered by the company to prove that gas from their pipes was not escaping in great or dangerous quantities into houses in the vicinity of the plaintiff, is competent and ad- missible in the case.-^ 18. Liability on the part of a gas company for sickness occasioned in the manner above stated, and that their negligence was a proximate cause of the injury, would be equally well established by show- ing that through their negligence " a current of their gas was set in motion, which, in its course through the sewer and drain, took up other gases which were noxious, and carried them into the house, occasion- ing sickness therein, as if their own gas had occa- sioned it. It would be like the case of a mill-owner who should negligently suffer his dam to give way, whereby the meadow of his neighbor below him is overflowed. If the flood should in its course take up stones and gravel, and carry them iipon the meadow, the mill-owner would be liable as well for the damage caused by the stones and gravel, as for the damage caused by the water, on the ground 1 Hunt?!. Lowell Gas Light Co. 3 Allen, 418. CREATED OTHERWISE THAN BT CHAETEE. 20T that the whole injury was alike the proximate con- sequence of his fault." ^ 19. Upon the question as to the use of due care and diligence by the gas company to ascertaining the nature and extent of the leak, and in stopping the same, the evidence of witnesses who lived in the vicinity, and who passed along the highway, as to what extent the gas escaped into the street, is com- petent. Also evidence tending to show that gas had escaped through the fracture in the pipe, and passed through sewers into such of the neighboring houses as the plaintiff had received notice of its having penetrated into and entered. Also evidence of an expert in the matter of digging holes through frozen earth, it having been necessary for the company to dig through frozen earth in order to reach the sup- posed locality of the leak.^ 20. The true question in regard to the effect upon health of the inhalation of illuminating gas infused into the air of a dwelling-house, is, " whether it is noxious to the health of the occupants as a usual, necessary, or probable effect ; " a point for the deter- mination of which, in any particular case, " the opinions of persons of skill and experience, as to the producing cause of the sickness, and particularly whether it might have been or probably was, in such case, the result of any especial exposure, is compe- tent evidence." But in reference to the duty of the company in view of this probable or possible conse- quence, " it can justly make no difference what 1 Hunt V. Lowell Gas Light Co. 8 Allen, 169. 2 Emerson v. Lowell Gas Light Co. ante. 208 MANUFACTURING CORPORATIONS. opinions are entertained by their agent or superin- tendent upon the subject, whatever pains he may have taken to obtain the best and most reliable infor- mation, . . . although as a competent expert his opinion might have been admissible upon the general question as to the alleged deleterious effect of gas upon the health of persons exposed to it." Further- more, " whether the inhalation of illuminating gas be insalubrious or not, it is certain that it is disa- greeable and offensive when the atmosphere is filled and pervaded by it, and is very dangerous from its liability to explosion if large quantities are collected and confined in the closed cellars or apartments of a dwelling-house ; " so that it becomes the duty of an incorporated gas-company invested for their own profit and advantage with tlie great and important privilege of supplying the community with liglit for private habitations, and for other places, to exercise due care and diligence in keeping it constantly under control, and preventing its escape, whether its effects are positively injurious, or merely disgusting and offensive.^ 21. In regard to the admissibility of evidence as to the cause of sickness alleged to have been occa- sioned by the escape of gas under the circumstances detailed in the above case, it is held, that the testi- mony of a physician who is not shown to be an ex- pert in respect to the properties of gas, or its efiects upon health, is rightly rejected ; " as the mere fact of his being a physician would not prove that he had any knowledge of gas, without further proof as to his 1 Emerson v. Lowell Gas Light Co. ante. CREATED OTHERWISE THAN BY CHARTER. 209 experience ; for it is notorious," add the Court, " that many persons practise medicine who are with- out learning ; and a physician may have mucli pro- fessional learning without being acquainted with the properties of gas, or its eifect on health." Neither would " mere practice as a physician give, of neces- sity, any knowledge as to gas." But it is held to be otherwise as to the testimony offered by an expert, who may be allowed, " not only to give opinions, but to state general facts, whicli are the result of scien- tific knowledge or professional skill." And it is said in the case of Hunt v. Lowell Gas Light Co., ante, that " the object of all questions to experts should be to obtain their opinion as to the matter of skill or sci- ence which is in controversy, and at the same time to exclude their opinions as to the effect of the evi- dence in establishing controverted facts." ^ 22. An action may be maintained against the manufacturers of gas-pipes which are of poor mate- rials and imperfectly laid, by reason of which gas escapes through the ground and into a well, render- ing the water unfit for use, and deleterious in its effects. The action may be brought by the lessee of the premises ; and the fact that the nuisance existed to a certain degree when he hired them is no de- fence, because " the nuisance is a continuous one, 1 Emevson v. Lowell Gas Light Co. 6 Allen, 146. The testimony of the expert above referred to, Prof. Eben N. Horsford, of Cambridge was to the effect, " that works for manufacturing illuminating gas were known to have made their neighborhood exempt from cholera and yel- low fever, and generally healthy; that the exhalations about gas works are healthful, and that men exposed to breathing gas in the works live as long, and are as healthful, as other men." Lincoln v. Taunton Cop- per Manuf. Co., 9 Allen, 181, and cases there cited. 14 210 MANUFACTURING COEPOEATIONS. constantly created and renewed by the manufacture and distribution of the gas ; and for this mainte- nance and renewal of the injury an action lies." But recovery can be had " only for the natural and direct consequences of the wrongful act of the defendants in such action, such as the loss of the use of the well, and the expense incurred in reasonar ble and proper attempts to exclude the gas there- from, and not for consequential damages which might laave been avoided by ordinary care " on the part of the owner or occupant of the premises ; such as damages " occasioned by his own carelessness in allowing the water to be used after he knew that it was corrupted by the gas." ^ The fact that the lessee in the case cited was an unlicensed keeper of a livery stable, although a bar to any claim for damages for injury to his business as a livery-stable keeper, or caused to him in rela- tion to such business, is no bar to an action to recover damages for a nuisance to real estate.^ 23. A gas-light company is not liable in damages for an injury caused by an explosion of gas under the following circumstances : — A gas-fitter. A., was employed by B. to lay and adjust the pipes, put up and arrange the fixtures and burners necessary for using gas in some of the rooms of his house. Into one room, however, no fixtures were introduced, and no cap was fastened upon the end of the pipe which opened into it. The gas-fitter left the house after having adjusted 1 Sherman v. Fall River Iron Works Co. 2 Allen, 524. 2 lb. 5 Allen, 213. CREATED OTHERWISE THAN BY CHARTER. 211 such fixtures as he had been employed to put up, examined all the rooms, except this one, to see if the pipes were tight and safe, turned on the gas, and lighted up the house. A person entering this room soon afterwards with a lighted candle, an explosion took place, causing the injury complained of. It appeared in evidence that it was the business of the company to let on the gas, and that no one except the company, or some one acting by its authority or consent, had any right so to do, they having entire control of the matter. But it also appeared that A. was in the habit of turning on the gas, and of col- lecting bills for the use of it, with the knowledge of the Superintendent of the company, and without any objection on his part. Upon the facts above stated, and under the rul- ings in the Court below, the question of the liability of the company resolved Itself into a question con- cerning the alleged agency of A. And upon this point it was held, that " the mere consent or permis- sion that another person may, for the convenience or accommodation of one who employs him, do cer. tain acts which the principal has a right, or is even upon request bound to do himself, is not sufficient. To create an agency, employment is essential ; the thing to be done, or which is done, must be for and on account of another person who authorizes it in advance, or adopts it by subsequent ratification. If he neither gives previous authority, nor subse- quently assumes or confirms it as its own, but sim- ply allows something, to which, if he had seen fit, he might have interposed a conclusive objection, to 212 MANUPACTUEING CORPORATIONS. be done at the request of others without objection from him, he has thereby assumed no responsibility, nor made himself liable under any contract, express or implied, of agency. And thus in the present case, "if the gas company had never assumed in fact to furnish or interfere with the pipes inside of the meters in the buildings to which they furnished gas, or with furnishing or regulating the gas-fix- tures, but had uniformly permitted, without objec- tion, the person who had been employed by gas consumers to furnish and put up such pipes and fixtures, to let on the gas after furnishing and put- ting them in, such permission would not constitiite him an agent of the company for whose acts it would be responsible." ^ 24. The charterer of a vessel who has been sub- jected to expense in getting her off from and over a gas-pipe, which was an unlawful obstruction to the navigation of a river, and upon which she caught in passing along the river, while navigated with due care, may maintain an action against those who laid the gas-pipe, to recover for such expense, but not for any delay in his business, or other conse- quential damage.^ 1 Flint V. Gloucester Gas Light Co. 3 Allen, 343. See ib. 9 Allen, 652. 2 Benson ■6. Maiden & Melrose Gas Light Co. 6 Allen, 149, head- note. CREATED OTHERWISE THAN BY CHARTER. 213 Section III. Co-operative Associations. 1. May be organized by seven or more persons. 2. Articles of Association or Agreement. 3. Officers. — By-Laws. — Distribution of profits. 4. First meeting. 5. Increase or diminntion of capital'stoct, etc. — Issue of shares. 6. Duties and liabilities of Board of Managers. 7. Privileges and liabilities of shareholders. 8. Legal and equitable rights and remedies of and against the asso- ciation. 1. Seven or more persons of lawful age, inhabit- ants of this Commonwealth, may, by written Arti- cles of Agreement, associate themselves together for the purposes of trade, or for carrying on any lawful mechanical, manufacturing, or agricultural business within this State ; and when such Articles of Asso- ciation shall have been executed, and recorded in the office of the Clerk of the City or Town in which the business is to be carried on, such persons shall be and become a corporation, and enjoy all the pow- ers and privileges, and be subject to all the duties, restrictions, and liabilities set forth in all General Laws in relation to similar corporations, except so far as the same may be limited or enlarged by the provisions following : ^ — 2. The said Articles of Association or Agreement shall distinctly set forth tlie objects for which such Association is established, and the place within 1 St. 1866, 0. 290, § 1. 214 MANUFACTURING CORPORATIONS. which its business is to be carried on. They shall also fix and limit the amount of capital stock of such Association, which may be any sum not exceed- ing fifty thousand dollars. The said Articles shall be recorded in the office of the Clerk of every place in which said Association proposes to do business, and business shall not be done by it in any other place or places than those mentioned in its Articles.^ 3. The business of the Association shall be man- aged and conducted by a President, a Board of not less than three Directors, and a Treasurer, who shall be styled a Board of Managers, and who shall be chosen annually by the stockholders, and shall hold their offices until others are chosen and quali- fied in their stead ; and shall have such other offi- cers as the Association shall prescribe by their By-Laws, and the mode of appointment and choice of such officers shall also be prescribed by the By- Laws. The said By-Laws shall also describe the mode and times of the distribution of the profits or earnings of such Association' among the workmen, purchasers, and stockholders, which shall be as often, at least, as once in twelve months ; provided, that no distribution shall be declared and paid until a sum equal at least to ten per cent, of the net profits shall be appropriated for a contingent or sinking fund, until there shall have accumulated a sum equal to thirty per cent, in excess of such capital stock. Bach Association may make its own By-Laws, provided they be not repugnant to the provisions of St. 1866, c. 290, nor to the laws of 1 St. 1866, c. 290, §§ 2, B.. _ CREATED OTHERWISE THAN BY CHARTER. 215 the Commonwealth, and shall file in the Clerk's office of the place where they transact their business a copy of all By-Laws by them made.^ 4. The first meeting of such Association organ- ized after May 30, 1866, shall be called in the man- ner provided for calling the first meeting of corpo- rations by General Statutes, c. 61 ; and if doubts arise as to whether such organization be legal, it may be confirmed in the manner provided in said chapter.^ 5. The Association may increase or diminish the amount of capital stock and number of shares at any meeting of the stockholders specially called for that purpose ; and, within thirty days after the passing of any vote increasing or diminishing its capital stock, shall cause such vote to be recorded in the Clerk's office of the place where its business is carried on ; but no share shall be issued for less than its par value, nor until the fuU amount thereof shall have been paid in cash.^ 6. When the Association shall have been organ- ized, it shall be the duty of the Board of Managers to prepare a statement of the condition of the Asso- ciation, containing the amount of the capital stock, the par value of the shares, the numbers of shares issued, the names and residence of the shareholders, and the number of shares owned by each ; and the same shall be filed and recorded in the office of the Clerk of such City or Town in which the Association proposes to do business ; and on or 1 St. 1866, u. 290, §§ 3, 4, 12. 2 lb. 8 lb. 216 MANUPACTUEING CORPORATIONS. before the tenth day of November thereafter in each year, the Board of Managers shall prepare a like statement of the same facts as they existed on the first day of November, with a statement of the kind and amount of the property of the Association on that day, and of all its debts and liabilities of every kind ; and the same shall be filed and recorded in the office of the Clerk of each City or Town in which the Association does business, and shall also be filed in the office of the Secretary of the Com- monwealth, and the same shall be by him printed and transmitted to the Legislature. All the state- ments provided for in this section shall be signed and sworn to by a majority of the Board of Man- agers. If the Board of Managers shall fail to make the Eeturns above required, or sliall make untrue Re- turns, they shall be jointly and severally liable for all debts existing at the date of such Return, or at the time when the same should have been made.^ 7. No person shall be allowed to become a. share- holder in such Association except by the consent of the Managers of the same ; and no member thereof shall be entitled to hold or claim any interest therein exceeding the sum of one thousand dollars ; nor shall any member, upon any subject, be entitled to more than one vote. No shareholder shall be personally liable for any debt of the Association, after the full amount of the capital stock is paid in, and Certificates issued there- for. And shares therein, not exceeding in the ag- 1 St. 1866, 0. 290, §§ 6, 9. CREATED OTHERWISE THAN BY CHARTER. 217 gregate the par value of twenty dollars, may be held exempt from attachment, and from being taken on execution. 1 8. Such Association may take, hold, and convey such real and personal estate as is necessary for the purposes of its organization, and may sue and be sued in its associate name. If any person shall recover judgment against any Association created under the provisions of St. 1866, c. 290, and if, after the issue of execution upon such judgment, demand shall be made on the Treas- urer, or any of the Board of Managers, for payment of the same, or for property to be exposed to satisfy such execution ; and, if the same shall not be paid or satisfied, the officer shall nlake return of such fact, upon the execution, or upon a,nj alias execution that may issue, so long as any part thereof remains unsatisfied ; and if, after ten days shall have elapsed, the balance of such execution remains unpaid, the creditor may apply to the Supreme Judicial Court, setting forth the facts, and praying for an injunc- tion to restrain such Association from alienating or transferring any of its. property, and doing any busi- ness, until such judgment is satisfied, and the said Court shall grant such injunction ; or the judgment creditor may apply to the Court of Insolvency in the County in which such Association has a place of business, setting forth the facts, and, after due no- tice and hearing thereupon, a warrant shall issue under the laws in relation to insolvent corporations, 1 St. 1866, c. 290, §§ 7, 8, 11; St. 1867, t. 264, § 1. 218 MANUFACTURING COEPORATIONS. and proceedings shall be had as in other cases of insolvent corporations ; and said Association may at any time apply for the benefit of the Acts in regard to insolvent corporations.^ I St. 1866, 0. 290, §§ 7, 10. APPEN^DIX. Appendix A. [Referred to on page 111.] Form of Return from Corporation to Tax Commissioner. P. 0. address of Treasurer at [Date.] Hon. Jacob H. Loud, Tax Commissioner: Sir, — I, Treasurer of the hereby return that on the first day of May, A.D. 18 , said Corporation had its place of business at its capital stocit was the whole number of its shares was the par value of each share was the market value of each share was the value of the real estate owned by the Corporation within the State was without the State was the value of the machinery owned by the Corporation within the State was without the State was and the following is a list of the stockholders in said Corporation, with the residence of and number of shares held by each, on said first day of May, 1868: — KESIDEKCE. BO. OF SHARES. Respectfully yours, Treasurer. ss. [Date.] Then personally appeared the above-named and made oath that the foregoing return is true, to the best of his knowledge and belief. Before me, Justice of the Peace. J^5" The attention of Treasurers is called to the necessity of giving the correct residence of each stockholder. Strictly, the law requires the name of the tovm or city (not the post-office) to be written out in full against each name ; and this is the only way to prevent mistakes. 220 APPENDIX. Form of amended Return from Corporation to Tax Commissioner. To the Tax Commissioner of tlie Gommonwealtli : Sin, — Since making my return to you as . of in accordance with the provisions of Chapter 283, Acts of 1865, I have learned that the corrections hereinafter specified should be made in said return; viz., Name Stockholder. No. Shares. Residence Keturned. True Kesid. May 1, 18 [Date.] Then personally appeared the above-named and made oath that the foregoing statement by him subscribed is true, according to the best of his knowledge and belief. Before me, Justice of the Peace. The foregoing blank has been prepared for the convenience of Treas- urers, in correcting returns of residence of Shareholders, made under provisions of Chap. 283, Acts of 1865. It embraces only the necessary facts, and its use will be found advantageous to Treasurers and to the department. EespectfuUy yours, Daniel A. Gleasok, Deputy Commissioner. APPENDIX. 221 Appendix B. [Referred to on page 128.] FoEMS OP Appeal Noiifications. Form A. Comnwrnoealtk of Massacltvsetts. Tax CoMMiasioNEK's Office, State House, Boston, 186 . To Treasurer of SiK, — Ton are hereby notified, in accordance with the provisions of Section 6 of Chapter 283 of the Acts of 1865, that the value of the Real Estate and Machinery of the situated in the of as determined by tlie Commissioner, is 8 being less than its value as determined by the Assessors of Your attention is respectfully directed to the provisions contained in the same section ; by which, if said Corporation does not, within one month from the date of this notice, make application to said Assessors for an abatement, and does not, in case of the refusal of said Assessors to grant an abatement, forthwith prosecute an appeal, in accordance with the provisions of Chapter 11 of the General Statutes, and give notice thereof to the Tax Commissioner, such determination will be conclusive upon said Corporation for the purposes of the above Act. Respectfully yours, Dakiel a. Gleasos, Deputy Commissioner. 222 APPENDIX. Form B. [Date.] Hon. Jacob H. Loitd, Tax Commissioner: Dear Sik, — Iq behalf of the I hereby give notice that said Corporation appeals from the decision of the Tax Commissioner [fixing market value or determining amount of credits for Eeal Estate and Machinery] ; and desires to be heard thereon before the Board of Appeal, as provided by Chapter 283 of the Acts of the year 1865. Respectfully yours, INDEX. INDEX. ABATEJIENT, of indictment against corporation, 24. of suit in which married woman is a party, 84. of taxes, application for, of corporation to Supreme Com't, and to Assessors, in certain cases, 26, 128. of suit in Equity not occasioned by decease of a defendant, 153. nor by non-joinder of persons liable as defendants, unless, 154. ACCUMULATING FUND, assessment of, in the hands of a corporation, 24. ACT OF INCORPORATION, notice of intention to apply for, how given and proved, 40, 41. to be deemed public act, 42. corporation must be organized within two years from the date of, unless, 42. may provide for mode of calling first meeting, 42. acceptance of, and assumption of corporate powers under, effect of, 43. defective organization tmder, distinguished from certain other cases, 45. certain informalities in organizing under, considered, 45, 46. power of Legislature to alter or amend, 96-100. ACTION, by and against corporation, how brought, 4, 14. attachment and summons may be combined, 14. service of process must be upon officer or member who is an adverse party in the suit, 15. dissolution of attachment, 16. of replevin, tort, and certain others, trustee-process not available in, 17. 15 226 INDEX. ACTION— Continued. against corporation in one jurisdiction during pendency of trustee- process in another, 19. by corporation, for recovery of tax assessed or collected, substitute for, 27. by Commonwealth, against corporation bringing foreigner into the State, 36. by stockholders, against officers, maintenance of, 52, 53. at law, effect of parol evidence in, regarding conveyance in writing, 60. against corporation, stockholder when allowed to defend, 63, 64. against foreign corporation, provisions respecting, 65. of tort against corporate officer falsifying or refusing certain certifi- cate, 66, 148. against married woman having separate property, 68. of tort against stockholder guilty of certain acts and omissions, 72. against Treasurer of corporation for false representations, 74. against corporation, for personal injury, compromise of, 74. subsequent against town in such case, 75. of trespass against corporation using unjustifiable violence, joinder of corporate officer in such action, 75. against corporation, right of holder of guaranteed stock to maintain, 76. in which Commonwealth is interested as plaintiff or creditor, how brought, 79. of tort by Commonwealth for recovery of penalties prescribed in St. 1865, c. 283, 129. of contract by Treasurer of Commonwealth against corporation fail- ing to pay taxes, 130. at law by creditor of corporation against stockholder not maintaina- ble when, 136-142. against Directors, pending action against corporation, 144. at law, and Bill in Equity against corporation compared, 144. at law against corporate officer for corporate debt repealed, 155. to recover corporate debts, effect of doctrine of lex lod contractus upon, 155, 157. to recover wages, 158, against employer for personal injuries sustained by employ^, 162- 165. on bond of corporation, Treasurer requisite to maintenance of, 171. against corporation organized under Gen. Sts. for non-delivery of shares in, 188, 189. against gas company, and against town, for personal injuries, 193. against gas company neglecting to contribute towards salary of Gas- Inspector, 196. INDEX. 227 ACTION— Continued. of tort by gas company in certain cases of fraud, waste, injury, and interference, 201. against gas company, for injury to health by escape of gas, 204-210, 211. against manufacturers of gas-pipes imperfectly constructed or laid, 209. against gas company, for injury to health by explosion of gas, 210, 211. against parties laying gas-pipe causing unlawful obstruction to navigation, 212. administrators; may represent and vote on stock held by them, 54. returns to be made by. (See Returns) exempt from personal liability, 69. of person out of the State, transfer of stock by, to Guardian, etc., 82. rules as to the assessment of stock held by, 126. neglecting to comply with requirements of St. 1865, c. 283, forfeitures incurred by, 129. estates and funds in the hands of, limitations of liability, 153. may appear, or be summoned in suit in Equity, 153. ADMISSION, of officer or member of corporation, right to file information respect- ing, 22. parol, when trust may be declared on strength of, 60. AFFIDAVIT, of printer or publisher of petition to General Court, 27. of printer or publisher of petition for Act of Incorporation, 41. agen r, execution of corporate instruments by, 9-12. service of process upon, in actions against corporation, 15, 18. payment made by, without knowledge of service of trustee-process, 18. may be specially authorized to execute certain papers, 20. of corporation bringing foreigners into Commonwealth, duties of, 35. record of vote electing, effect of, 51. certain malfeasances by, penalties for, 70-72. test of liability of principal for fraud of, 72. forgery of signature of, 72. liability of corporation in trespass for act of, 75. employment of child by, in manufactory, in violation of statute, 161. mode of appointing shall be prescribed by Bj'-Laws, 167. corporate, his authority to sign business paper, and liability upon, 172, 173. liability of, to pay for services rendered, if fact of agency is not dis- closed, 190. 228 INDEX. AGENT— Continued. of gas company, may authorize entry, etc., of premises lighted, etc., 200. of gas company, rules as to admission of evidence of, 207. of gas company, for letting on gas, what constitutes, 211. ALDERIIEN. (See Mayor and Aldermen.) ALIENATION, of franchise hy corporation of its own act, 94. ALLOWANCE, ■ to insolvent corporation prohihited, 37, ALTERATION, in an instrument of transfer, rules respecting, 56. by Legishiture, of charters granted after March 11, 1831, 96-100. AMENDMENT, by Legislature of charters gi'anted after March 11, 1831, 96-100. by Legislature of Gen. Sts. t. 61, so as to affect existing corpora- tions, 192. ANNUAL MEETING. (See Meetings.) ANSWER, of corporation, summoned as trustee, 17. of corporation, may be by agent specially authorized, 20. general provisions respecting, 20. APPEAL, from award of County Commissioners, how made, 30. from award of Selectmen, or Mayor and Aldermen, how made, 33. Board of, right of application to, must be specified in certain notice from Tax Commissioner, 116, 127. tax assessed upon corporation subject to, 116. Board of, how constituted, application to by party aggrieved, etc., 127. of corporation from assessors to County Commissioners for abate- ment of tax, 128. APPLICATION, to Justice of the Peace to call meeting of corporation in certain cases, 13. for leave to file information for quo warranto, 21, 22. to General Court, affecting rights of corporations, etc., provisions respecting, 27, 28. to County Commissioners, by corporations desiring to make certain improvements, 29. to Selectmen, or Mayor and Aldermen, for above purpose, 32. to County Commissioners to assess damages, 33. to County Commissioners, may be received at other than regular meetings, 34. by certain corporations for benefit of Insolvent law, 36. INDEX. 229 APPLICATION— Continued. of creditor of corporation for seizure and distribution of its estate, 38. for Act of Incorporation, notice of, how given, 40. how to be framed and proved, 41. . by stockholder, to inspect list of stockholders, 54. of Guardian to Supreme Court, for leave to sell stock, 81. of corporators to Supreme Court, for leave to dissolve corporation, 93. of creditor, etc., to Supreme Court, for appointment of Trustees, etc., in above case, 95. equity jurisdiction of Supreme Court in relation to the above, 95. of psirty aggrieved to Board of Appeal, under St. 1865, c. 283, 127. of corporation to Assessors, for abatement of tax in certain case, 128. of Tax Commissioners to Supreme Court for injunction on corpora- tion, 130. APPOINTMENT, of Inspector of gas-meters, etc., by Governor and Council, 194. by Inspector, ot Deputy Inspectors, 197. APPRAISEJIENT, of property attached with bond for dissolution of attachment, 16. ARTICLES OF AGREEMENT, OR ASSOCIATION, in writing, essential to associations under general laws, 45. first meeting to be called in miinner prescribed by the, 47. persons associating under, when to be constituted a corporation, 178. name, purpose, capital stock, etc., to be specified in, 178, 183. liability of corporate officers violating the provision of, 184. parties associating under, have same rights and liabilities with officers and ptockholders of chartered companies, 185. right of corporate creditor to recover from subscriber to, 186. right of subscriber to shares under, to maintain action for non-de- livery of, 188. of co-operative association, rules respecting, 213-215. ARTICLES OF CONFEDERATION, etc., certain provisions of, embodied in United States Constitution, 107. ASSESSMENT, non-payment of, sale of shares for, 49, 176. may be authorized by accepting report of committee recommending, 51. no particular formula necessary in voting, 51. by whom payable in sale of stock before issue of certificate, 80. of tax upon dividends of non-resident stockholders, 104. of tax must be proportional, 105. of tax on shares in manufacturing companies without the Common- wealth, 111. of tax by the assessors of the City of Boston on such shares, 113. of tax on property belonging to water-power companies, 114. 230 INDEX. ASSESSMENT— Continued. of tax in St. 1864, c. 208, § 5, and in St. 1865, c. 283, § 5, not a tax on property, but an excise on corporate franchise, 117-125. of tax on government securities lield by corporation considered in relation to above principle, 120-124. of tax by municipality on shares in corporations paying tax to Com- monwealth forbidden, 125. of tax by Commonwealth, right to levy not defeated by failure of returns from corporation, 125. of tax on stock held b}' copartners, and in certain fiduciary capaci- ties, 126. on shares voted and paid in, how to be notified, 175. on shares, how voted by corporation, 176. payment of, and sale of shares by corporation for non-payment, 176. ASSESSORS, of cities and towns, returns from, required to Secretary of Common- wealth, 108. to Tax Commissioner of the Commonwealth, 109. of City of Boston, practice of, from the years 1842 to 1864, 113. application to by corporation, for abatement of tax in certain case, 128. neglecting to comply with requirements of St. 1866, c. 283, forfeitures incurred by, 129. ASSIGNEE, of insolvent corporation cannot question validity of certain trans- actions, when, 91. (See ASSIGNMEKT.) ASSIGNMENT, by insolvent corporation, provisions respecting, 37. by individual debtor, provisions respecting applicable to officers of insolvent corporation, 90. (See Tkansfee.) ASSOCIATION, under general laws persons not belonging to, cannot question pro- ceedings, 43. undertaking to assume corporate powers must have written articles of agreement, 45. for religious, charitable, and educational purposes, when liable to taxation, 85. of ten or more persons for making and selling gas, 193. co-operative, how formed and managed, 213-218. ATTACHMENT, and summons may be combined in action against corporation, 14. dissolution of by giving bond, 16. by appraisement of property attached, 16. failure of corporation to dissolve, etc., remedy of creditor, 37. INDEX. 231 ATTACHMENT— Continued. transfer of shares considered in its relations to, 55. of interest of stockholder in Massachusetts corporation, how made, 66. of interest of stockholder, general provisions respecting, 66, 67, 69. exemption from, of shares in co-operative association, 216. ATTORNEY. ( See Agent and Proxy.) ATTO RNEY-GENERAL, to be served with certain papers in an application for quo warranto, 21. intervention or non-intervention of, against corporation in certain cases, 21. to be served with petition of corporation for abatement of tax, 26. to prosecute corporations failing to make returns, 78. AUTHORITY, of Sheriff's jury on appeal from County Commissioners, 30. conferred on County Commissioners, limitations of, 31. of persons named in Act of Incorporation to hold franchise, until, 42. of corporators, persons exercising without objection, 44. of wife over personal property in absence, etc., of husband, how created and terminated, 83. of Legislature to amend charters granted after March 11, 1831, 96- 100. of Legislature to tax property of manufacturing corporations derived from Constitution, 102, 118. delegated to cities and towns, 104. of corporate officer to sign business paper, etc., 171, 173. AWARD, of County Commissioners in certain cases, how made, 30. of Maj'or and Aldermen, or Selectmen, in certain, cases, when and where recorded, 33. B. BALANCES. (See Dividends.) BANKING CORPORATIONS, exceptions in mode of levying executions against, 24. interest on loans to the State from, when payable, 29. contract for sale of shares in, 80. exempted from certain returns, 109, 110. in other States, shares in held by citizens of Massachusetts, how taxed, 113. BAR, exemption from of certain instruments, 6. to an action for damages for injury from escape of gas, 210. BILL IN EQUITY. (See Equity.) 232 INDEX. BILL OF EXCHANGE, proof of claim on account of, against insolvent corporation, 90. BILL OF PARCELS, resemblance of transfer of shares to, 59-61. excepted from rule relative to conveyances absolute in terms, 60. BILL OF SALE, considered in relation to transfer of stock, 80. BLANKS, in instrument of transfer, right of holder to fill, 56. BOARD OF APPEAL. (See Appeal.) BOARD OF MANAGERS. (See JIanagees.) BONDS, of corporation, avoidance of individual liability upon, 10. to or -with corporation Treasurer, action on, how brought after his death, etc., 14. to dissolve attachment, different modes of giving, 16. to County Commissioners of corporation desiring to improve land, 29. to Commonwealth, of corporation bringing foreigner into Common- wealth, 36. of stockholder, undertaking to defend suit against corporation, 63. or corporate obligation, over-issue of, 70. of corporation, negotiable, 85. bottomry, proof of claim on against insolvent corporation, 90. of Treasurer of manufacturing corporations under charter, 167, 169- 171. liability of sureties upon, 169-171. approval of, by Directors, unnecessary to maintenance of action thereon, 171. (See Recognizance.) BONUS, proceeds of sale of right to take new shares regarded as a, 88. BOOKS AND PAPERS, of corporation, person having custody of to be served with attach- ment, 66. and with attested copy of execution, 67. admissible in evidence on trial of corporate officer, etc., 70, 71. false or omitted entries in, penalties for, 71. submission of, to inspection of Tax Commissioner, 131. BOSTON, practice of the assessors of, in assessing manufacturing shares, 113. BUYER, of stock to pay assessment laid after the sale, 81. BY-LAWS, power of corporation to make, 4. INDEX. 233 BY-LAWS — Continued. office of, and parties thereto, 13. what may be determined thereby, 48. general provisions respecting, 49. of corporations under charter, general provisions respecting, 167, 168. of corporation, under general laws authorizing agent to sign business paper, 172. special meeting of such corporation may be called under, for con- firmation of organization, 181. of such corporation, office of, as among the members themselves, 186. value of pledge contained in, to corporate creditor, 186. of co-operative association, general provisions respecting, 214, 215. c. CAPITAL STOCK, fee for filing, in Secretary's office, certificate of increase of, 42. after issue of, legal existence of corporation cannot be denied, 43. amount of, to be fixed by articles of association, 45, 179, 183. divided into shares, rules as to the issue of, 47. rights of holders of, and of corporate creditors distinguished, 76-78. right of stockholder to subscribe for new shares, upon increase of, 87-90. practice of assessors of Boston in a.ssessing shares in the, 113. aggregate value of shares in, subject to certain deductions in ascer- taining valuation of franchise, 116-124. of corporation paying certain tax, shares in not to be assessed, 125. holders of shares in the, liability to taxation for school district and parish purposes, 126. forfeiture on par value of, for neglecting compliance with St. 1865, u. 283, 129. liability of Directors measured by excess of corporate debts over amount of the, 142. certificate of payment in full, increase or reduction of, 146-148, 174, 183. of certain manufacturing companies paid in, debts not to exceed, 167. of company fixed at time of enactment of General Statutes, provi- sions respecting, 173. of company organized after enactment of General Statutes, provi- sions respecting, 173. note of stockholder not to be considered as payment for, 176. 234 INDEX. CAPITAL STOCK— Continued. of corporation under General Statutes, maximum and minimum amount of, 183. of gas-light company, deductions from, in order to ascertain value of fi:anchise, 203. of co-operative association, provisions respecting, 214-216. CASHIER, service of attachment and summons upon, 14. of corporation summoned as trustee may appear and answer, 17. (See Tkeasuree.) CERTIFICATE, of organization, fee for filing in the Secretary's department, 42. of shares, delivery of having form of transfer on the back, 56. • when to be retained by company in case of transfer, 56. liability of corporation to furnish stockholder with new, in certain cases, 57. issued to pledgee, or as collateral security, how made, 58. delivery of, not a transfer of stock, 59. of interest of stockholder to be given to attaching officer, 66. and to officer exhibiting execution, 67. to be made on warrant, by officer seizing shares for taxes, 69. of shares, fraudulent issue or transfer of, etc., by corporate agent, 71. fraudulent conduct of shareholder respecting, 72. of guaranteed stock, general provisions respecting, 76-78. contract for sale of stock prior to issue of, 80. purpose of is not to make transfer, but to furnish evidence of, 81. given by Tax Commissioner, effect of, 130. of payment in full, increase and reduction of capital stock. 146-148, 174. penalty against officer falsifying or refusing, 148. of shares, under seal of the corporation, signed by the Treasurer, to be given to each stockholder, 173. of certain assessments and debts by manufacturing company, how made, 176. of special stock, provisions respecting, 175. assignee of shares entitled to a new, on producing old with assign- ment duly made, 176. how obtained by purchaser of shares sold for non-payment of assess- ments, 177. filed by corporations organized under General Statutes, provisions respecting, 182-184. required of gas-light companies, 202. of new stock in gas-light company not to be issued, unless, 203. of stock in co-operative association, 216. INDEX. 235 CERTIOKAEI, application for writ of, 23. CHARITABLE ASSOCIATION, pvopertj' of, not exempted from taxation when, 85. CHARTER, notice of application for alteration or extension of, 40, 41. corporation created by, to be organized within two years from pas- sage of act, 42. rights conferred by, intention to secure by mode of organizing, 43. in absence of, legal existence, how proved in certain cases, 44-47. articles of association designed to take the place of a, 45. By-Laws not to be made repugnant to, 49. corporation created by, to register names of stockholdera, etc., 54. corporation to be continued three years after expuration or annulling of, 94. jurisdiction of Supreme court in appointment of receivers or trustees in such cases, 95. of corporations existing at enactment of General Statutes, provisions respecting, 96. granted atler March 11, 1831, power of Legislature over, 96-100. acceptance of, an acknowledgment of legislative right to alter, amend, or repeal, 97. restraints and limitations of this legislative right, 98, 99. certificates and returns of corporations organized under special, 146- 148. of corporation granted prior to Feb. 23, 1830, etc., revokable by Leg- islature, 167. manufacturing corporation established under, subsequent to Feb. 23, 1830, 167. manufacturing corporation established under, subject to provisions of Revised Statutes, c. 38, 167. effect of provision in, requiring contracts to be signed by certain offi- cers, 171. of gas-light companj', when not made public corporation thereby, and exempted from taxation, 202. CHILDREN, employment of, in factories, provisions respecting, 180, 161. CLERK, of corporation, pending choice of, who may preside at meetings, 13. attachment and summons, service of, upon, 14, 66. may be examined hy means of interrogatories, 20. of court, to transmit certain papers to the Governor in case of ad- judged illegality of taxation, 26. of town, to be notified of certain petitions to County Commissioners, 30. 236 INDEX. CLEEK— Continued. certain petitions to be filed in office of, 33. fees for recording certain papers, 33. of corporation, signature of, to record of corporate vote, effect of, 51. of corporation, alterations, etc., made by, in instrument of transfer, 57. of coi'poration, attested copj' of execution to be left with, 67. of corporation, penalties incurred by certain malfeasances in office, 70-73. of cities and towns to be furnished with digest of certain returns, 109. of corporation to furnish list of officers and stockholders to judgment creditor, when, 149. of corporation under special charter, provisions respecting, 169, 173, 176. of cities and towns, certain votes, certificates, etc., of corporations under General Statutes, to be deposited with, 181-183. dissent of Director to issue of new stock may be filed in writing with, 204. of cities and towns, articles of agreement, By-Laws, statements, and returns of co-operative associations to be recorded with, 213-216. COLLATERAL SECURITY, transfer of stock as, general provisions respecting, 67-61. statement of stock held as, to be included in returns to Tax Commis- sioner, 110. COLLECTION, of tax from corporation, by Commonwealth, general provisions, 25- 27. of tax from individual, enforcement of by levy and sale of shares, 69. of tax. effect upon of certain discrepancies in values, 123. , COMMITTEE, to audit accounts of Treasurer, effect of report of, 171. COMPENSATION, of corporate officers, 4, 86. CONSIDERATION, proof of,' unnecessary to enforcement of sealed instruments, 6. CONSTABLE OF THE COMMONWEALTH, to enforce laws relative to employment of children in factories, 161. CONSTITUTION, of Massachusetts, provisions by, as to corporations and manufac- tures, 1. authority of Legislature to tax manufacturing property derived from the, 102, 118. INDEX. 237 CONSTITUTION— Continued. requirement of, that tax should be proportional » restriction on the Legislature, 103-106. of United States, restrictions on power of the several States as to tax- ation, 107. CONTRACT, of corporation, mode of sealing, 6-12. provisions of By-Laws considered in the nature of a, 13. made with Treasurer of corporation, action upon in case of death, removal, etc., 14. action of, (See Action). with insolvent corporation forbidden, 37. of corporation cannot be made by stockholders as individuals, 52. liability for false statement inducing a party to enter into a, 73. by way of settlement of a claim for damages, effect of parol evidence on, 75. for sale of stock, party contracting must be owner of, 79-81. bj' married woman in her own name, when authorized, 83. alteration or repeal of charter by Legislature not a breach of, 97. no power in Legislature so to alter or repeal as to impair the obliga- tion of, 99. of water-power companies to furnish power, in its connection with taxation, 114. of corporation, oiiicers' liability for, 146-150. of corporation, oiBcer and stockholder not liable unless, 149. of corporation, application of doctrine of lex loci contractus to, and the liability of corporators, etc., thereon, 155-159. contained in By-Laws, parties to, right of third party to claim under, 186. to take shares subscribed for, effect of unreasonable delay in perform- ing, 168, 189. CONTRIBUTION, liability to, of Directors of insolvent corporation, 91, 92. voluntary payment of corporate debt by stockholder, effect of, on right to, 133. limitations of the right to enforce, 134, 145. claim for, by stockholder paying disproportional share of debt, 149. CONVEYANCE, by married woman, of shares in a corporation, 83. CO-OPERATIVE ASSOCIATION. (See Association.) COPARTNERSHIP, intent to defraud, allegation of, in an indictment for forgery, 73. stock held by, rules as to the assessment of, 126, 137. neglecting compliance with provisions of St. 1865, c. 263, penalties incurred by, 129. 238 INDEX. CORPORATE SEAL, right to use, and alter, 4. appropriateness of, to corporate agreement, 5. certain modes of executing instruments distinguished from, B-9. distinguished from seal of an individual, 10-12. CORPORATION. (See Actioh, By-Laws, Certificate, Cbaetee, Constitution, Corporate Seal, Franchise, Liability, Meetings, Officers, Quorum, Returns, Shares, Stock- holders, Tax, Transfers, Votes, etc.) COSTS, may be allowed to person appearing and objecting in application for jMO warranto, etc., 23. allowance for travel, when corporation is entitled to, 23. payment of, under distress-warrant by corporation indicted and de- faulted, 24. on petition of corporation for abatement of tax, 26. in proceedings before County Commissioners, how taxed, 34. general provisions respecting, in case of land damages, 35. bond for, may be required of stockholder or ofBcer defending suit against corporation, 64. COTTON, goods, corporation organized for manufacture of, may vote to manu- facture other materials, 177. organized for manufacture of, under General Statutes, c. 61, to have powers of chartered companies, 191. COUNTY, where corporation has place of business, etc., action to be brought in, except, 14. intent to defraud, allegation of, in an indictment for forgery, 73. of Suffolk and certain others, actions in which the Commonwealth is a party, may be brought in, 79, 129. where corporation is established, certain certificates to be recorded in, 147, 174. COUNTY COMMISSIONERS, petition to, by corporations desiring to make land improvements, 29. action by, on the foregoing, 29, 80. proceedings on appeal from their award, 30. restrictions on the authority of, in above cases, 31. complaint to, from action of Selectmen or Mayor and Aldermen, 33. to require recognizances from applicants in certain cases, 33, 34. action by, at other than regular meetings, 34. abatement of assessment on property belonging to water-power com- panies by, 115. mode of proceeding when certain valuations made by, are less than the valuations of the Assessors, 128. INDEX. 239 CREDITOR. (See Action, Directors, Equity, Judgment, Liabil- ity, Stockholders, etc.) D. DAMAGES, already suffered, no remedy afforded for by quo warranto^ 23. apportionment of, by County Commissioners in case of land im- provements, 30. awarded by sheriff^s jury, how set aside, 31. application to County Commissioners to assess, 33, recovery, non-recovery, and relinquishment of, claim for, 35. application for, how barred, 35. to property of corporation maintenance of action for, by stockholders, 52. liability to action for, by corporate officer falsifying or refusing cer- tain certificate, 66, 148. for personal injuries, claim against corporation for, 74, 75. for personal injuries, action for, by operative against corporation, 162-165. against agent of corporation for issue of accommodation notes, etc., not recoverable when, 172. occasioned by operations of gas-light company in laying pipe, pro- visions respecting, 193, 212. recoverable by gas-light company for certain frauds, wastes, and in- terferences, 201. liability' of gas-light company for, in certain cases of inhalation, explosion, etc., of gas, 204-212. DEBTOR. (See Action, ATTACHsijiST, Debts, etc.) DEBTS, proceedings in case of corporation unable to pay, 36, 37. contraction of, by corporation evidence of organization de facto, 43, 47. to be substantially described in transfer as collateral security, 57. of corporation, exemption from by holder of stock as collateral secur- it}-, 58. proof that absolute conveyance is intended as security for, 60, 61. liability of officers or stockholders for, enforceable in Equity, 65. of husbiind, liability of married woman for, 68. of wife, liability of husband for, 68. payment of dividends not enforceable by stockholder as, 77. certificate or other evidence of, contract for sale of, 79. of insolvent corporation, payment of, by stockholder subsequently to commencing proceedings ia insolvency, 93. 2'10 INDEX. DEBTS — Continued. of corporation closing its concerns, appointment of receivers for, 95. of corporation, liability of officer or stockholder for, 132-159. of corporation, voluntary payment of, by stockholder, claim for con- tribution founded upon, 133. of chartered corporation not to exceed paid in capital, 167. of certain chartered corporations, how to be notified, 175. owed by and to corporation under General Statutes, certificate of, how made, 184. of co-operative association, general provisions, 216, 217. DECREE, of Probate Court authorizing transfer of personal estate to Guardian out of State, 82. of Supreme Court in case of dissolution, etc., of charter, 95. DEDUCTION, of value of real estate and machinery from aggregate value of the shares, 112, 116, 120, 126. of value of United States securities in estimating value of franchise, 120, 124. DEED, of corporation, execution of, 5-12. of shares. ( See Transfer. ) DEFENCE, by stockholder or officer of action against corporation, 63, 64, 140. DELIVERY, of certificate with blank form of assignment, effect of, 56. of certificate, or scrip, not a transfer of stock, 59. DEPUTY INSPECTOR OF GAS-METERS. (See Inspector.) DIRECTORS, knowledge and concurrence of, in the execution of corporate instru- ments, 12. may be examined by interrogatories, 20. costs to be paid by, in application for jmo warranto, when, 22. report of committee of, recommending assessment. (See Assess- ment.) abuse of trust by, 52, 53. untrue representations fraudulently made by, 73. function of, in declaring dividends, 77. allowance of compensation to corporate officer by, 86. of insolvent corporation, effect of delay in prosecuting claim against, 91, 92. m;iy be examined on oath as to matters affecting determinations of Tax Commissioner, 131. claim to charge corporate debts upon, how regarded, 134. enforcement of corporate debts against, by Bill in Equity, 142-144. INDEX. 241 DIRECTORS — Continued. who are also stockholders cannot compel contribution against stock- holders, when, 145. jointlj' and severally liable for corporate debts, when, 146-148. certificate of capital paid in or increased, to be made by, 147, 174. election of President by, 167. business of corporation to be managed by, their number, 169. election of Treasurer by, effect of, 170, 171. approval of Treasurer's bond by, unnecessary to maintenance of action thereon, 171. authority conferred on corporate officer by vote of, unnecessary, when, 171, 172. notice of debts, etc., of certain chartered corporations to be signed by, 175. certain certificates of corporations under General Statutes to be signed by, 181, 183. of such corporations, how chosen, 182. of such corporations, penalties incurred by, in certain cases, 184. of such corporations and of chartered company, liability, etc., of, under St. 1862, u. 218, assimilated, 185. liability of, for issue of stock dividends in certain cases, 203. of co-operative association, general provisions respecting, 214-217. (See Officeks, and State Directok.) DISCHARGE. ( See Allowakce. ) DISSOLUTION, of attachment. (See Attachment.) of corporation by Supreme Court on petition, 93. by limitation in charter, 94. by special act, 192. DISTRESS, collection of tax by seizure and sale under, 69. DISTRICT ATTORNEY, action to recover money to use of Commonwealth may be brought by, 79. DIVIDENDS, payment of, to shareholder whose residence is unknown or uncertain, forbidden, 54. unclaimed, list of to be published, 66. payment of, in case of wrongful or irregular transfer of shares, 57. accruing on share attached to be held as security, etc., 66. purchaser of shares sold on execution when entitled to, 68. upon guaranteed stock, general provisions respecting, 76-78, 176. definition of the term, 77. in insolvency of corporation, 90. 16 242 INDEX. DIVIDENDS— Continued. on shares belonging to non-resident owners, taxation of, 104-108. when corporation is, or is thereby rendered insolvent, liability for, 147. by certain corporations of stock, before cash payment of shares at par, forbidden, 203. E. EMBEZZLEMENT, by corporate officer or servant, 71, 72. EMPLOYMENT, of children in manufacturing establishments, 160, 161. EQUITY, examination of corporate officers in suits in, by interrogatories, gen- eral provisions, 20. court of, will hold corporate officer responsible for breach of trust, 52. rule as to admission of parol evidence as to transfer of shares, 60,61. bill in, the appropriate mode of procedure by holders of guaranteed stock in certain cases, 78. bill in, when maintainable by Guardian's successor in -office for ille- gal transfer, 83. bill in, to determine respective rights of adverse claimants to take new stock, 88-90. jurisdiction in, of Supreme Court, on application to close corporate concerns, 95. bill in, to enforce liability of resident stockholder in foreign corpora- tion, 136. bill in, to enforce liability of stockholder, prior to enactment of cer- tain statutes, 137-146. bill in, to enforce liability of stockholder under St. 1662, c. 218, 149-155. EVIDENCE, of publication of notice of petition to General Court, 28. parol, admission of, to contravene terms of an absolute conveyance, 60. as to summons of stockholder in certain action, 64. books of corporation when admissible in, 70, 71. parol, admission of, concerning false representations by Directors, 74. parol, inadmissibility of, to vary terms of a written compromise, 75. in action for damages against gas-light company, 204-211. EXCISE, distinction between, and " tax," 102-108. INDEX. 243 EXCISE — Continued. upon dividends of non-resident owners, unequal and illegal, 104-108. and contrary to the Constitution of tlie United States and of this Commonwealth, 106, 107. imposition of, as authorized by constitution of Commonwealth, 118. certain assessments shown to be in the nature of an, 118-125. EXECUTION, of corporate instruments different modes of, 9-12, 171-173. awarded by Court on gtw warranto^ 23. levy of, upon property of corporation, 24. upon interest of stocliholder, 07,69. attested copy of, and return thereon, to be left with transfer officer, 68. property of married woman, provisions as to levy of, upon, 68. sale of shares upon, for non-payment of taxes, 69. in suit where married woman is a party, 84. against corporation, return of, unsatisfied, 149, 157. issue of, in case of co-operative association, 216, 217. EXECUTOR, may represent and vote on stock held by him, 54. returns to be made by. (See Eetukns.) exempt from personal liability as a stockholder, 69. transfer of personal estate hy, to Guardian in another jurisdiction, 82. assessment of taxes on stock held by, 126. neglecting to make certain retm'ns, forfeitures incurred by, 129. FAC-SIMILE, of corporate seal, printing of, as a substitute for the common-law seal, 6-8. FEES, of officer collecting tax from corporation under warrant from Treas- urer of Commonwealth, 25. of Mayor and Aldermen, town and city clerk in certain cases, 33. for recording certain papers in office of Secretary of Commonwealth, 42. to be paid by purchaser of shares on execution, 68. FOEEIGNERS, brought into the State by corporation, rules relating to, 35. FORFEITURE, of charter by corporation, 94, 95. 244 INDEX. FORFEITURE — Continued. incurred by neglecting to make certain returns, 129. FORGERY, in transfer of shares, effect of, 56. of signature of corporate officer, 72. FRANCHISE, not conferred by law claimed by corporation, remedy for, by quo wat^'antOj 21. Attorney-General may intervene in case of usurpation of, 21. judgment of exclusion ii'om, 22, 23. of chartered company, -who may hold until organization, 42, 47. persons claiming and using, constitute the corporation de facto when, 44. alienation of, by corporation of its own act, 94. different kinds of, distinguished, 94. corporate, valuation of, how made, 111-113. payment of tax upon, by corporation, 116. defined in relation to taxation, 116-125. may be taxed in addition to tax imposed by St. 1865, u. 283, 131. of gas-light company, taxation of, 202. FRAUDS, committed by corporate officer, member, or servant, etc., general pro- visions, 70-74, 171, 180, 201, 202. G. GAS-LIGHT COMPANY, certain corporations may hold stock in, 85. chartered and non-chartered, not discriminated by statute law, 192. organization of, under General Statutes, 193. dividend on existing company before organization of new one, 193. injuries occasioned by operations of, recovery of damages for, 193. liability of, for injuries to person or property, 193, 204-212. officers of, may inspect record of meters in oiEce of Gas Inspector, 195. duties in relation to salary of Gas Inspector, 196. testing, inspection, and re-inspection of meters, 198, 199. officer or servant of, may enter premises lighted, etc., 199, 201. may stop supply in case of non-payment, 200. may recover in action of tort for certain frauds, wastes, injuries, etc., 201, 202.- when not a public corporation in such sense as to be exempt from municipal taxation, 202. restrictions on stock dividends, and issue of new stock by, 203. INDEX. 245 GENERAL COURT, petitions to, affecting private rights, etc., how notified, 27, 28. list of petitions, to be annually published by Secretary of Common- Tvealth, 28. petitions to, for charter, with accorapanj'ing affidavits of notice, 41. power of, to impose tax on corporate property, derived from Consti- tution, 102-106. (See Legislatuke.) GENERAL STATUTES, corporations existing at the enactment of the, how affected by, 62, 96. enactment of, effect of upon capital stock of certain corporations, 173. amendment or repeal of c. 61 of, so as to affect existing corporations, 192. GENERAL STOCK, provisions concerning, 175. GOVERNOR, to be served with copy of judgment rendered, on petition of corpora- tion aggrieved by exaction of tax, 26. warrant of, on Treasurer of Commonwealth, for amount unjustly ex- acted, 26. and Council authorized to fill certain vacancies during recess of the Legislature, 85. to name s). member of the Council on Board of Appeal, 127. annual reports to, by Constable of the Commonwealth, as to employ- ment of children in factories, 163. and Council appointment of Inspector of gas-meters, etc., by, 194. salary to be paid on warrant of the, 196. GUARANTEED STOCK, general provisions concerning, 76-78, 175. GUARDIAN, may represent and vote on stock held by him, 54. returns to be made by. (See Eetuexs.) exempt from personal liability as a stockholder, 69. may be authorized to transfer stock, and re-invest proceeds, 82. sale by, and transfer of proceeds to guardian, etc., in another juris- diction, 82. illegal assignment made by, remedy for, 83. assessment of taxes on stock held by, 126. neglecting to make certain returns, forfeitures incurred by, 129. consenting to employment of ward in factory, 161. 246 INDEX. INCORPORATION. (See Act of Incokporation.) INCREASE, of capital stock. (See Capital Stock.) INDICTMENT, of corporation, provisions respecting, 23. for forgery, allegation of intent to defraud sufficient, 73. for illegal issue of stock in gas-light company, etc., 203. INDORSEMENTS, money paid upon, proof of, against insolvent corporation, 90. INFORMATION, in the nature of a quo warranto, application for leave to file, 21, 22. how filed and served ; order of notice thereon, 21. respecting election or admission of officer or member of corjforation, 22. in Supreme Court, by Treasurer of Commonwealth, against delin- quent corporation, 130. INJUNCTION, issue of writ of. (See Quo Waebanto, etc.) application by Tax Commissioner for writ of, against corporation failing to make returns, 129. writ of, may be issued by Supreme Court against delinquent corpo- ration, 130. against co-operative Association, 217. INSOLVENCY, of corporation, proceedings relative to, 36-39, 90-93. application to court of, against co-operative Association, 217. INSPECTOR, of gas-meters, etc., appointment, duties, salary, etc., 194-199. apparatus to be provided at office of, 195. INSTRUMENT, distinction between sealed and unsealed, how drawn, 9. corporate, different modes of executing, 9-12. execution of, by corporate officer, general provisions, 171-173. of transfer, general provisions, 176. INTERROGATORIES, examination of corporate officers by means of, 20. may be used in suits in equity, in same manner as in civil actions, 20. INTERVENTION, of Attorney-General, in case of usurpation of franchise by corpora- tion, 21. INDEX. 247 ISStJE, unautliorized or fraudulent, of corporate bonds, notes, stock, etc., 70. JOINT-STOCK COMPANY, legal existence of, must be shown to establish stockholders' liability, 44. bonds or corporate obligations issued by, how negotiable, 85. liability to pay for services rendered, to order of agent, 190. JUDGMENT, final, dissolution of attachment prior to, 16. of fine and forfeiture, may be demanded by Attorney-General, 21. not to be entered if Attorney-General has not intervened, 22. on application for quo warranto, how awarded, 2.3. on default against corporation indicted, 23. arrest or reversal of, 24. on petition of corporation aggrieved by exaction of tax, 26. against corporation, stockholder allowed to defend when it shall ap- pear that object of suit is to obtain, 63. debt created by, stockholders' liability on, how established, 64. shares, when and how held as security to satisfy, 66. debtor shares or interest of, provisions respecting, 68. in suit where married woman is a party, 84. against corporation, as preliminary to maintenance of bill in equity, 138-141, 149. merger of corporate debt, and creation of new one by rendition of, 141. right of corporate creditors in another jurisdiction to recover, 157. on execution in case of co-operative Associations, 217. JURISDICTION, corporation charged as trustee in one, during pendency of prior suit in another, 19. in equity of Supreme Court, on application to close concerns of cor- poration, 95. question of, in connection with liability for coi-porate debts, 155-159. JUS DISPONENDI, of individual interest of stockholder surrendered to will of majority, 50. JUSTICE OF THE PEACE, meeting called by authority of warrant from, 13. 248 INDEX. LACHES, on the part of creditors of an insolvent corporation, 91, 92. LAND IMPROVEMENTS, corporation desiring to make; general provisions, 29-35. LARCENY, simple, corporate officer or servant to be deemed guilty of, when, 71. LEGISLATURE, duty of, to encourage manufactures, etc., 1. petitions to, for Act of Incorporation, when to be presented, 41. corporations failing to make returns to, prosecution of, 78, vacancy in certain offices during recess of the, how filled, 85. charters granted after March 11, 1831, repealable, etc., by, 96-100. power of, to tax manufacturing corporation, derived from Constitu- tion of Commonwealth, 102-107, 118. is restricted to the levy of " proportional " taxes, 102-107. digest of returns of corporations to be made for use of the, 109. abstract from corporation returns to be submitted to, 184. power of, over non-chartered companies, 192. annual report to, by Inspector of gas-meters, 195. Secretary of Commonwealth to transmit certain statements by man- agers of co-operative Association to, 216. LESSEE, of certain corporate property liable, as well as lessor, to payment of tax under St. 1865, c. 283, 130. LEX LOCI CONTRACTUS, application of doctrine of the, to the liability of officers and stock- holders, 155-159. LIABILITY, individual, in executing corporate instrument, how incurred and avoided, 10, 11. corporate, action on, how prosecuted in case of death, etc., of Treas- urer, 14. of corporation, bringing foreigner into Commonwealth, 36. of stockholder, sought to be enforced by judgment against corpora- tion, 63, 64. of stockholder or ofScer, enforcement of, by suit in equitj', 65. exemption from, of persons holding stock as administrators, execu- tors, guardians, and trustees, 69. of principal, for fraud of corporate agent, test of, 72. of corporation, for trespass committed by servant in execution of or- ders, 75. of officer transmitting the orders, 75. INDEX. 249 LIABILITY — Continued. of insolvent corporation, general provisions, 90-93. of member or stockholder previously incurred, not affected by repeal of charter, 96. of corporation failing to make returns, 129. doctrine of personal ; general statement, 132. statute, of stockholders, not to be extended by implication, 133-136. personal, state of the doctrine of, at the adoption of General Statutes, and of St. 1862, u. 218, 187-146. of officers, and stockholders of corporation under St. 1862, c. 218, etc., 146-156, 175, 184. of officers and stockholders; general provisions, 155-159. of corporation, for personal injury to employi^s, 162-166. of officers and members of chartered manufacturing companies, 166, 167. of sureties, on bond of Treasurer of corporation, 169-171. of non-chartered company on business paper executed by agent, 172. personal, officer of corporation may fix on himself by method of ex- ecuting instruments, 173. of coi-poration failing to record certain certificates and votes, 174, 175. of officer of non-chartered company refusing or neglecting certain duties, 184. of officers and stockholders of chartered and of non-cliartered com- panies not discriminated by St. 1862, c. 218, 185. of subscribers to Articles of Association, by reason of any pledges contained therein, 186. of non-chartered company for services rendered to order of agent, 190. of gas-light company for injuries to person or propertj', 194, 204-212. of officers of co-operative Associations, concerning certain retui"ns, 216. of shareholders in co-operative Associations, 216. LIMITATION, expiration of charters by, 93-95. LOANS, to the State, interest on, when payable, 29. M. MANAGERS. (See Dieectoes, OrnCEKS, etc.) JIANDAJIUS, writ of (See Quo Waekasto.) MANUFACTURES, duty of Legislature to encourage, 1. 250 INDEX. MANUFACTURING CORPORATIONS, classification of, rules of law applicable to, in Massachusetts, 2, 3. may hold stock in gas-light companj'', 85. powei' of Legislature to tax, derived from Constitution, 102-107. names, etc., of, to be returned to Secretary of Commonwealth by assessors of cities and towns, 108. and to Tax Commissioner, 109. to make returns by Treasurer to Tax Commissioner, 110. shares in, personal estate, 111. foreign, not entitled to certain deductions in valuing franchise, 111, 126. individual liability of stockholder in, how construed, 135. foreign, liability of stockholder in, 136. state of doctrine of liability of stockholder in, at adoption of General Statutes and of St. 1862, c. 218, 137-146. doctrine of liability of officers and stockholders in, under St. 1862, c. 218, 146-155, 185. list of stockholders and officers in, by and to whom to be furnished, 149. employment of children by, 160, 161. vaccination of inmates in establishments of, 162. liability for personal injury to employes, 162-165. chartered, rights and liabilities of officers and members of, 166, 167. certain annual notices, certificates, and returns, concerning, 175. organized for manufacture of cotton or woollen goods may vote to manufacture other goods, 177. under General Statutes, c. 61, not released from making certain cer- tificates and notices by St. 1862, c. 218, 184. chartered or non-chartered, officers and stockholders of, equally in- cluded in provisions of St. 1862, c. 218, 185. non-chartered, action against, for refusing to deliver shares sub- scribed for, 188-190. non-chartered, manufacturing cotton or woollen goods, powers of, 191. MARRIED WOMAN, shares belonging to, provisions respecting, 68. conveyance of shares by, 83. a party to suit, general provisions, 84. MASTER IN CHANCERY, bond to dissolve attachment, approval by, 16, 17. MAYOR, to be notified of hearing on petition to County Commissioners of party desiring to make land improvements, 30. MAYOR AND ALDERMEN, petition to, of party desiring to make land improvements, 32. INDEX. 251 MAYOR AND ALDERMEN— Continued. appeal from action of, on such petition, by party aggrieved, 33. consent to and control over operations of gas-light company, 193. report to, by Inspector of gas-meters, when requested, 199. MEETING, called by warrant of a Justice of the Peace, 13. action by or against corporation to be brought in usual place of hold- ing, 14. called for purpose of authorizing application to Judge of Insolvency, 37. first, of chartered company, how called, 42. judicial interpretations of statute regulations as to the above, 42-47. first, of non-chartered company, how called, 47, 181. mode of calling and conducting, may be determined by By-Laws, 48. presence of quorum at, need not be afiirmatively shown, 49. due notice of, should be shown by record, 49. illegality of, will not be presumed, but the contrary, 49. of chartered manufacturing companies, proxy voting at, 168. regular annual, failure to elect Treasurer at, 169-171. called for the purpose of increasing or reducing capital stock, 174. called for the assessment of shares, 176. called to authorize manufacture of certain goods, 177. of co-operative Association, 215. MEMBERS, of corporation, number required to constitute a quorum, 48. and creditors of corporation, distinction between to be maintained, 78. of religions, charitable, and educational Associations, effect of receipt of dividends by, 85. of corporation, petition to Supreme Court for leave to dissolve cor- poration, etc., 93. previouslj' incurred liability of, not affected by repeal of charter, 96. doctrine of personaHiability of, at common law, and under certain statutes, 137-155. doctrine of personal liability of, general .provisions, 155-159. of chartered manufacturing companies, rights and liabilities of, 166. 167. of non-chartered company, right of action for delivery of shares sub- scribed for, 188, 189. (See Stockholders.) of co-operative Association, rights and liabilities of, 213-218. MILLS, burning of, 160. employment of children in, 160-162. 252 INDEX. MILLS — Continued. vaccination of inmates of, 162. support and regulation of, 165. MORTGAGE, of corporation, use of corporate seal upon, 7, 11. authority to execute, not necessarily confen-ed by vote, 12. of corporation, effect of proceedings in insolvency upon, 39. transfer of stock as collateral security distinguished from, 58-61. N. NOTES. (See Bonds, and Obligations.) NOTICE, for meeting of corporation under Justice's warrant, 13. of petition to General Court affecting private rights, etc., 27. proof of accidental omission of, 28. sufficient, what shall be deemed, in such case, 28. on petition of party desiring to make land improvements, 30. to city or town on such petition, need not be given when, 33. of liability to be given to corporation bringing foreigner into Com- monwealth, 36. of messenger, upon application of insolvent corporation, 37. to corporation, of presentment of petition against it in insolvency, 38. of intention to apply for Act of Incorporation, 40. accidental omission of, etc., how supplied, 41. by publication in newspaper, when unnecessary, 41. specifications in, 41. of first meeting of chartered company, how given, 42. proper, of corporate meeting, should be shown by the record, 49. on petition to Supreme Court for removal of corporate officer, 50. on application of Guardian for leave to sell stock, 82. to husband of married woman of her petition for conveyance of shares, 83. on-petition to Supreme Court for dissolution of corporation, 93. to corporation Treasm'ers from Tax Commissioner, 115, 127, 128. to Treasurers of cities and towns from Tax Commissioner, 116. to Tax Commissioner fi'om corporation appealing to County Com- missioners, 128. on petition of stockholder to Supreme Court for removal of officer, 168. annual, of certain manufacturing companies, concerning, 175. of sale of shares for non-payment of assessments, how given, 176. of first meeting of non-chartered companies, 181. INDEX. 253 NOTICE— Continued. to gas company concerning salary of Gas-Inspector, 196. on application to Judge of Insolvency for warrant against co-operative Association, 217. o. OATH, to certain papers in behalf of corporation, by officer specially author- ized, 20. to be made by officers of insolvent corporation, 91. by clerk of chartered manufacturing company, 169. by corporate officers to certificate of paid in capital, 174. OBLIGATION, corporate, fraudulent issue or negotiation of, how punished, 70. forger}- of, 72. under seal, how negotiable, 85. authority of corporate officer to draw, indorse, etc., 172, 173. given by stockholder not to be considered a payment for shares, 176. OFFICER, of corporation, election, compensation, duties ; general provisions, 4. piintmg facsimile of corporate seal derogatory to authority of, 6. liability- of, in executing corporate instrument, how incurred and avoided, 10, 11. authority in agent may be inferred from conduct of, 12. lack of, to call or preside at meeting, how supplied, 13. election of, at meeting called by warrant of Justice, 14. of corporation, service of legal process upon, 15. of corporation summoned as Trustee may appear and answer, 18. penalty against, for answering falsely, 18. may be examined by means of interrogatories, 20. signature and oath of, to certain papers in behalf of corporation, 20. of corporation usurping franchise to pay costs of quo warranto, 22. of corporation bringing foreigner into Commonwealth, duty of, 35. of corporation, how authorized to sign petition to Judge of Insol- vency, 37. tenure of office by, may be determined by By-Laws, 49. limitations as to voting by, 49. illegally voting may be removed by Supreme Court on petition of stockholder, 50. not agent for the stockholders, 52. win be held responsible by Court of Equity for breach of trust, 52. and may be called to account by the stockholders, 53. 254 INDEX. OFFICER— Cmdinued. recording transfers of stock to reside in State, 55. personal liability of, general provisions, 65, 139, 140, 142-150, 153, 155, 158. service of process upon, in attachment of shares, 65-68. certificate of stockholder's interest to be exhibited by, 66, 67. certain malfeasances by, penalties for, 70-72. forgery of signature of, 72. untrue statements by, liability for, 73, 74. compensation for services of, 86. of insolvent corporation, duties and liabilities of, 90-93. previously incurred liability of, not aifected by repeal of charter, 96. of chartered manufacturing companies, rights and liabilities of, 166, 167.' mode of choice or appointment of, to be prescribed by By-Laws, 167. proxy voting by, 168. management of business by; how chosen, 169. execution of corporate instruments bj", general provisions, 171-173. corporate, certificate of, to paid in capital, 174. and to certain annual notices, certificates and returns, 175, 183. of non-chartered company to make certificate before commencing business, 181. and within thirty days after payment of any instalment, 182. of non-chartered company, general provisions, 182. of non-chartered company, liability of, under St. 1862, c. 218, 185. of gas-light company' may inspect record of meters, etc., at ofiice of Gas-Inspector, 195. or servant of gas-light company may enter premises lighted, etc., 199, 201. of gas-light company, penalty against, for illegal issue of stock, 203. of co-operative Association, 214-217. ORGANIZATION, fee for filing in Secretary's office certificate of, 42. of chartered company must be within two years from passage of Act, 42. certain technical objections to validity of, considered, 42, 45, 46. by articles of Association under the General Statutes, 178, 179, 181. of gas-light company under General Statutes, 193. of co-operative Association, 213, 215. INDEX. 255 PAROL. ( See Evidence. ) PAYMENT, by one charged as Trustee, general provisions, 18, 19. judgment and execution against corporation ineffectual to obtain, 134. PENALTY, against corporation refusing information concerning foreigners brought into Commonwealth, 36. not exceeding $20, for one offence may be annexed to By-Laws, 49, 167. against violation by corporate officer of rules relative to voting, 49. recovery of certain, incurred by neglecting to make certain returns, 129, 130. claim to charge corporate debts upon Directors regarded as a, 135. against officer of chartered manufacturing company violating pro- visions of Statute relating to proxy votiug, 168. against company failing to record certain certificates and votes, 174, 175. for unaiithorized use of trade-marks, 180. against officers of non-chartered company violating certain duties, 184, 185. for certain frauds, wastes, and injuries of gas, 201, 202. against illegal issue of stock by gas-light company, 203. PERJURY, committed by officer of corporation in answer under trustee process, 18. PERSON, word may be applied to bodies politic and coi-porate, 2. PETITION, to Supreme. Court by corporation aggrieved by exaction of tax, 26. remedy above provided the exclusive remedy, 27. to General Court affecting private corporations, 27, 28. to County Commissioners of party desiring to make land improve- ments, 29. to Selectmen, or Mayor and Aldermen, of party desiring to make land improvements, 33. to County Commissioners receivable at other than regular meetings, 34. of corporation to Judge of Insolvency, 36. to Judge of Insolvency, of creditor of corporation failing to dissolve attachment, 38. in insolvency, general provisions, 39. 256 INDEX. PETITION" — Continued. to General Court for Act of Incorporation, 40, 41. to Supreme Court by stockholder for removal of officer, 50. to Superior Court by stockholder for leave to defend suit, 65. to certain courts, of married woman for leave' to transfer shares, 83. to Supreme Court for leave to dissolve corporation, 93. and for appointment of receivers or trustees, 95. PLEDGEE, of stocic held as collateral security, general provisions, 57-61. PRESIDENT, of corporation, execution of corporate instrument by, 11, 12. of corporation, service of legal process on, 15. of corporation, notice of presentment of petition in insolvency, ser- vice upon, 38. of chartered manufacturing company, mode of choice to be pre- scribed by, By-Laws, 167. management of business by, 169. indorsement of paper by, in absence of special authority, 172. may fix on himself personal liability, 173. . signature to certificate of paid-in capital,. 174. and to certain annual notices, etc., 175. of non-chartered company to make certificate before commencing business, 181. and within thirty days after payment of any instalment, 182. of gas-light company may authorize entrj- of premises lighted, etc., 200. of co-operative Association^214. PROBATE COURT, may authorize transfer of stock, etc., by Guardian, 82. consent of, to conveyance of shares by man-ied woman, 83. PROOF, of petition to General Court affecting private rights, etc., 27. of accidental omission of notice, etc., 28. of publication by affidavit of printer, etc., not exclusive of other evi- dence, 28. of publication of notice on petition for Act of incorporation, 41. of notice on petition to Supreme Court for removal of corporate offi- cer, 50. of claims against insolvent corporation, 90-93. on petition of stockholder to Supreme Court for removal of officer, 168. of authority to indorse business paper unnecessary when, 172. PROXY, mode of voting by, may be determined by By-Laws, 48, 49, 167. voting by corporate officers, 49. INDEX. 257 PROXY — Continued. voting at meetings of chartered manufacturing companies, 168. PUIS DAKREIN CONTINUANCE, not pleadable in trustee-process when, 19. QUOROM, may be determined by By-Laws, 48. presence of, need not be affirmatively shown by record, 49. of chartered manufacturing company, majority to constitute, when, 168. QUO WARRANTO, application for leave to file information in the nature of a, 21. costs in, to be paid by corporate officers when, 22. inadequacy and incompleteness of remedy by, 22. allowance of costs on application for, to party objecting, 23. judgment and execution on, how awarded, 23. R. RATIFICATION, of corporate instrument effective notwithstanding record thereof, 12. RECEIVERS, or trustees to close concerns of corporation, how appointed, 95. RECOGNIZANCE, of party applying to County Commissioner to be required when, 33. RECORD, of corporate instrument, effect upon of subsequent ratification, 12. of corporate meeting need not show presence of a quorum, 49. but should show due notice of the meeting, 49, of transfer of stock to be made and kept within the State, 55. to be exhibited to creditor of stockholder when, 58. of division of capital stock into shares to be made by the clerk, 173. in Registry of Deeds of Certificate of capital stock paid in, increased, or diminished, 174. at office of Gas Inspector of meters inspected, etc., 195. REDUCTION, of capital stock. (See Capital Stock.) REMOVAL, of officer of chartered manufacturing company for illegal voting 168. 17 258 INDEX. REPEAL, of certain charters at pleasure of Legislature, 96-100. previously incurred liability of officers and members not affected by, 96. EETOKNS, from Administrator, copartnership, Executor, Guardian or Trustee holding stock in corporation, 61. corporations failing to make, shall be prosecuted by Attorney-Gen- eral when, 78. from assessors of cities and towns to Secretary of Commonwealth, 108. digest of, to be made by Secretary of Commonwealth for use of the Legislature, 109. from assessors to the Tax Commissioner of the Commonwealth, 109. from certain corporations to the Tax Commissioner, 110. from assessors to Tax Commissioner, failure of, how supplied, 117, 125. made by corporation under St. 1865, u. 283, relieve from returns under St. 1864, c. 201, 129. forfeitures and penalties incurred by neglecting to make certain, 129. annual, to be made by certain manufacturing companies, 175, 182-184. required of gas-light companies, 202. from co-operative Associations, 215, 216. SALE, of shares on'execution, provisions respecting, 69. of shares, etc., party contracting for, must be owner of, etc., 79. assessment laid after the time of, to be paid by purchaser, 81. of right to take new shares in capital stock, 87-90. of shares for non-payment of assessments, 176. of articles bearing counterfeited trademark, 181. SCIRE FACIAS, writ of, judgment creditor of corporation when entitled to, 24. SCRAWL. (See Scroll.) SCRIP, delivery of, not a transfer of stock, 59. SCROLL, (or Schawl). to be distinguished from a seal. (See CoEPOBATE Seals.) INDEX. 259 SEAL. (See Corporate Seals.) SECRETARY OF COMMONWEALTH, to approve newspaper in which certain Petitions to General Court are published, 27. to publish an annual list of Petitions intended to be presented to General Court, 28. return to, by Judge of Insolvency in regard to insolvent corpora- tions, etc., 39. to approve newspaper in which intention of application for Act of incorporation is published, 40. fee for iiling certain papers in oifice of the, 42. returns to, by Assessors of cities and towns, 108. to make digest of returns for the use of the Legislature, 109. copy of vote confirn^fM^ organization of non-chartered company to be deposited with, 181. certiticate setting forth corporate name, etc., to be deposited with, 181. to submit abstract from corporation certificates to Legislature, 184. device of Gas Inspector's stamp to be recorded in office of the, 194. certain statements by managers of co-operative Association to be filed in office of the, 216. SECRETARY OF CORPORATION,! service of legal process upon, 16. may appear and answer to trustee-process, 17. of gas-)ight companj' may authorize entry of premises lighted, 200, SELECTMEN, petition to, of party desiring to make land improvements, 32. appeal from action of, on such petition, by party aggrieved, 33. consent to, and control over operations of gas-light company, 193. report to, by Inspector of gas-meters, when requested, 199. SET-OFF, claim to, by stockholder of insolvent corporation, 93. SERVICE, of legal process against corporation, on officer thereof, 15, 65. must be an officer who is an adverse party in suit, 15. of petition to Supreme Court of corporation aggrieved by exaction of tax, 26. SETTLEMENT, persons not having, in this Commonwealth, rules aa to corporation bringing in, 35. SHARES, not to be issued for less than the par value of those first issued, 47. of corporations organized after April 10, 1867, fixed at $100.00, 47. ratio of, to votes may be determined by By-Laws, 48. sale of, for non-payment of assessments, 49. 260 INDEX. SHAKES— Continued. more than twenty, not to be voted on by corporate officer, as proxy, unless, 49. limitation of holder's control over, 50. majority of the, in one corporation, controlled by another, remedy for in equity, 63. delivery of certificate of, with blank form of transfer, effect of, 56. alteration of number of, in form of transfer, 56. transfer of a portion of those indicated on certificate, effect of, 56. transfer of, wrongfully or irregularly made, corporation liable to owner of, 57. returns to be made respecting. (See Retukns.) certificate of number of, to be exhibited to attaching officer, 66. how attached and taken on execution, 66, 67, 69. belonging to married woman, provisions respecting, 68, 83. fraudulent or unauthorized issue of, how punished, 70. forfeiture of one-half the par value of, by fraudulent conduct of stock- holder, 72. guaranteed. (See Guakanteed Stock.) party contracting for sale of, must be owner, etc., 79. held by Guardian, sale and transfer of, 81. bill in equity for transfer of, when maintainable by Guardian's suc- cessor in office, 83, in gas-light company may be held by certain corporations, 85. new, in corporation increasing its capital stock, rights to take, 87-90. power of Legislature to tax, derived from Constitution, 102-107. of non-resident stockholders, taxation of, 104-108, 111-113. certain returns respecting, 108-111. certain deductions from value of, in estimating corporate franchise, 111-113, 116-126. held by copartners, Guardians, Executors, Administrators or Trus- tees, how assessed, 126. in chartered manufacturing companies, number required to constitute a quorum, 167. capital stock to be dividfed into, at the first meeting, and a record made by the clerk, 173. to be numbered, and certificate to be had by each stockholder, 173. increase in the number of, 174. transfer of, 176. assessment upon, general provisions, 176. transfer of, in case of non-payment of assessments, 177. in non-chartered company, refusal to deliver to subscriber, 188-190. issue of new, as stock dividend, 203. in co-operative Association, 215-217. INDEX. 261 SHERIFF, warrant to, from Treasurer of Commonwealth for collection of tax from corporation, 25. SHERIFF'S JURY, functions of, on an appeal from award of Countv Commissioners, 30. SIGNATURE, of individual ofBcer to corporate instrument, 11. to certain papers in behalf of corporation by officer specially author- ized, 20. fraudulent, use of, on corporate instrument, 72. of corporate officer to business paper, 172. may tix on himself personal liability, 173. of Treasurer to certificate of shares, 174. of corporate officers to certificate of paid in capital, 174. SPECIAL STOCK, provisions concerning, 76-78, 175. (See GuAKASTEED Stock.) STATE DIRECTOR, vacancy in the office of, how filled, 85, STATUTE OF FRAUDS, method of sealing corporate instruments to obtain benefit of the, 5,6. false representations by Directors, evidence as to, how brought with- in the, 74- STATUTE OF LIMITATIONS, method of sealing corporate instruments to obtain benefit of the, 7. application of, in case of laches by creditors of insolvent corporation, 91, 92. STOCKHOLDER, in non-chartered company, how charged with corporate liability, 44. petition of, to Supreme Court for removal of officer, 50. corporation, a trustee for, 52. qualified and equitable interest of; general statement, 52. right of, to call officers to account by proceedings in equity, 53. list of, duties of officers respecting, 54., Executor, Administrator, Guardian or Trustee may vote as, 54. pledger of shares alone responsible as, 58. allowed to defend in suits against the corporation, 63. liability of, upon judgment debt, how established, 64. summoned in suit to recover corporate debt, cannot plead to the merits, 64. authority of, to defend in action against the corporation, 64. returns to be made by. (See Eethkhs.) liability of, may be enforced by suit in equity, 65. 262 INDEX. STOCKHOLDER— Continued. share or interest of, how attached and taken on execution, 66, 67, 69. certain frauds and omissions by, penalty for, 72. of guaranteed stoclj, general provisions, 76-78. privilege of subscribing for new shares on increase of capital, 87-90. in insolvent corporation, claim to set-off payments made against debts due, 93. petition of, to Supreme Court for leave to close concerns, 93. application of, for appointment of Trustees in above case, 95. no contract with torporation by, forbidding new enterprises, 97-100, power of Legislature to tax interest of, derived from Constitution, 102-107. non-vesident, taxation of shares or dividends of, 104-108. when not exempted Ji'om taxation for school-district and parish pur- poses, 126. statute liability of, not to be extended by implication, 133, 134. doctrine of liability of, at adoption of General Statutes, and of St. 1862, c. 218, 137-146. doctrine of liability of, under St. 1862, c. 218, 146-155. doctrine of liability of, general provisions, 155-159, 175. in chartered manufacturing company, rights and liabilities of, 166, 107. number requisite for quorum to be determined by ■ By-Laws, 167, 168. majority in interest to constitute, when, 168. absent, may vote by proxy, 168. petition of, to Supreme Court for removal of officer illegally voting, 168. of general stock, provisions concerning, 175. note or obligation given by, not a payment for shares, 176. forfeiture of shares by, in case of non-payment, 176. four-fifths vote of, to manufacture certain goods, 177. of non-chartered company may vote to confirm organization, 181, general provisions, 182. of non-chartered company, liability of, under St. 1862, a. 218, 186. liability of, under Articles of Association to third parties, 186. in co-operative Association, rights and liabilities of, 213-216, SUMMONS, service of, how made, 14, 65, may be combined with attachment in action against corporation, must be upon officer or member who is an adverse party, 15. of corporation as trustee, how answered, 17. INDEX. 263 SUPERINTENDENT, record of vote electing, signed by clerk, effect of, 51. emplovment of children in manufactories by, 161. SUPERIOR COURT, may set aside verdict of Sheriff's Jury, 31. may authnrize trimsfer of shares by married ■woman, 83. SUPREME JUDICIAL COURT, application to, for leave to file information in the nature of a quo war- ranto^ 21. petition to, of corporation aggrieved by exactinn of tax, 26. mny, on peliiion of stockholder, remove officer illegally voting, 50. equity powers of, to enforce li ibility of officers and stockholders, 66. may authorize transfer of stock, etc., by Guardian, 82. judge of, may authorize transfer by married woman, 83. may dissolve corporation on petition of majority in numbers or inter- est, 93. appointment of trustees by, in case of dissolution of corporation, 86. application to Justice of the, for injunction against corporation failing to make returns, 129. information brought in, by Treasurer of Commonwealth against de- linquent corporation, 130. on petition, may remove officer of chartered manufacturing company illegally voting, 168. injunction by, on co-operative Association, 217. SURETIES, executing corporate bond with corporate officer as principal, 10. upon bond to dissolve attachment, 16. upon recognizance entered into with County Commissioners, 33. upon bond of Treasurer of company; general provisions, 169-171. T. TAX-COMMISSIONER, returns from Executor, Administrator, Guardian, Trustee and co- partnership, 61. returns to, from Assessors of cities and towns, 109. returns to, from certain corporations, 110. to make certain valuations and determinations from returns. 111. notifications from, to Treasurers of corporations, 115. to Treasurers of cities and towns, 116. to certify to Treasurer of Commonwealth amounts due cities and towns, 116. judgment of, not open to modification when, 122. appeal from decision of, to Board of Appeal, 127. 264 INDEX. TAX-COMMISSIONER— Continued. statement of right of appeal to be included in notice from Tax Com- missioner to corporation Treasurers, 127. to notify corporation of determinations of value less than that made by Assessors, 128. to have notice of appeal of corporation to County Commissioners and may appesir before them, 128. application by, to Justice of Supreme Court for injunction against corporation failing to make returns, 129. certificate of, or his deputy, competent evidence as to what, 130. books of corporation to be submitted to inspection of, 131. may examine corporate officers on oath in regard to certain deter- minations, etc., 131. Treasurer of the Commonwealth to be, 131. TAXES, collection of, from delinquent corporation, 25-27. exemption from, by holder of stock as collateral security, BB. shares of stockholder refusing to pay, may be sold for, 69. fraudulent conduct of stockholder to avoid, 72. religious, charitable and educational Associations not exempted from, when, 85. on corporate property, power of Legislature to impose, derived from Constitution, 102-107. distinction between, and " excise," 102-108. must be "proportional," 102-107. imposed upon property of non-resident stockholders, 104-108. returns respecting, from Assessors to Secretary of the Common- wealth, 108. from Assessors to Tax Commissioner, respecting, 109. from corporation to Tax Commissioner, respecting, 110. certain deductions required in assessing on corporate property ; gen- eral provisions, 111-126. assessed on property of water-power companies ; general provisions, 114. right to levy, not defeated by failure to make returns, 125. or by non-receipt of notice of revaluations and reductions, 125. municipal, exemption of certain corporations from, 125, assessment of, on stock held by copartners, Guardians, Executors, Administrators and Trustees, 126. provisions as to abatement and correction of, appeal, etc., 127-129. under St. 1665, u. 283, corporations failing to pay, 130. how collected from delinquent corporation, 130. lessee, as well as lessor, of corporate property liable for, under St. 1865, c. 283, 130. imposed by St. 1865, ^. 283, not to affect other taxation, 131. INDEX, 265 TAXES — Continued. gas-light company, when not exempted from, in city or town where situated, 202. TOWN, desiring to make land improvements, petition of, to County Commis- sioners, 29. clerk of, to be notified of hearing upon petition before County Com- missioners, 30. vote of, accepting report of committee, effect of, 61. action against, for damages, bar to, 75. recovery of damages by and against, in case of injurj' from opera- tions of gas-light company, 194. TRADE-HARKS, unauthorized use of, general provisions, 180. TRANSFERS, of stock, records of to be made and kept within the State, 55. not valid against attaching creditor, unless recorded, 55. alterations of, and tilling blanks in, 5G.^ of a part of the shares indicated on a certificate, 56. as collateral security must substantially describe the debt or duty secured, 57. as avoiding liability of pledgee for taxation or corporate debts, 58. not to exclude evidence of separate defeasance in writing, 58. as collateral security to be regarded as a pledge rather than n mort- gage, 58, 59. parol proof may be admitted as to the consideration and purpose of, 60, 61. illegal or fraudulent, or record of, punishment for, 70. fraudulent, by stockholder to avoid taxation, 72. of certificate, party contracting for, must be owner, etc., 79. bill of sale of shares as a means of, 80, of shares, bill in equity for, when maintainable by Guardian's suc- cessor in ofiice, S3. of shares by married woman, how authorized, 83. of franchise, di-itinguished from alienation of corporate property, 94. of shares; general provisions, 176. in case of non-payment of assessments, 176. TREASURER, action on corporate liability, how prosecuted in case of death, etc. of, 14. corporation summoned as trustee may appear and answer by, 17. penaltj' against, for answering falsely, 18. may be examined by means of interrogatories, 20. of Commonwealth may proceed against corporation for non-payment of tax, 25. 18 266 INDEX. TREASURER— Continued. of Commonwealth, service of petition upon, by corporation aggrieved by exaction of tax, 26. of Commonwealth to pay, on Governor's warrant, amount of illegal tax, 27. of corporation, notice of presentment of petition in insolvency, service upon, 38. duties of, as to list of stockholders, etc., 54. to exhibit record of transfers on request of creditor, 68. service of process upon, in attachment of shares, 66, 67. action against, for false representations, 74. of insolvent corporation to furnish schedules, etc., 90. of certain corporations to make returns under oath to Tax Commis- sioner, 110. of corporation, notices to, from Tax Commissioner, 115. of Commonwealth, payment of taxes to, by corporation, 11.6. . to be certified by Tax Commissioner of amounts due cities and towns, 116. of cities and towns to be notified of amounts so due, 116. of Commonwealth a member ex officio of the Board of Appeal, 127. of corporations entitled to notice of right of appeal, 127. of Commonwealth, proceedings by, against delinquent corporation, 130. of Commonwealth to be Tax Commissioner, 131. powers and duties ; may appoint clerks and deputy, his duties and salary, 131. of chartered manufacturing company, mode of choice to be pre- scribed by By-Laws, 167. also penal sum and sureties of his bond, 167. of company, bond of, and sureties thereon; general provisions, 169-171. approval of bond of, by Directors, unnecessary, 171. report of committee to audit accounts of, effect of, 171. authority of, to indorse business paper, how inferred, 172. signature of, to certificate of shares, 174. and to certificate of paid in capital, 174. production of transfer of shares to, 176. assessments on shares to be paid to, 176. sale of shares by, for non-payment of assessments ; general provis- ions, 176. of non-chartered company to make certificate before commencing business, 181. and within thirty days after payment of any instalment, 182. of the Commonwealth to have list of all gas-light companies in Com- monwealth, 196. INDEX. 267 TREASURER— Conftrnwed. duties of, as to notices to delinquent gas-light companies, 196. of gas-company may authorize entry of premises lighted, 200. par value of new shares to be paid to, in cash, before issue of, 203. of co-operative Association, 214, 217. TRESPASS, committed by servant of corporation in execution of orders, 75. joint liability therefor of corporation and officer transmitting order, 75. TRUSTEE, for the stockholders, corporate officer considered as, 52. may represent and vote on stock held by him, 54. returns to be made by. (See Returns.) exempt from personal liability as a stockholder, 69. transfer of proceeds of sale to or from, by or to Guardian in another jurisdiction, 82. right of, to subscribe for new shares in capital stock, 87-90. appointment of, by Supreme Court in case of dissolution, etc., of cor- poration, 95. assessment of taxes on stock held by, 126. neglecting to make certain returns, forfeitures incurred by, 129. TRUSTEE PROCESS, corporation may be summoned under, 17. not available in certain actions, 17. penalty for false answer by officer, agent, etc., 18. rule as to payment in good faith, without knowledge of the service of process, 18. pendency of a prior suit in another jimsdiotion as a defence to the corporation charged, 18. general provisions respecting, 19. u. UNITED STATES, certain assessments inconsistent with Constitution of, 107. and with the Articles of Confederation, etc., 107. value of securities of the, held by corporation, taxation of, 124. V. VACANCY, election of officer of corporation to fill, 14. in office of State Director during recess of Legislature, how filleii, 85. 268 INDEX. TACCINATIOlir, of fiictory inmates, provisions respecting, 162. VERDICT, against corporation, arrest of judgment after, 24, of Sheriff's Jury, may be set aside by Superior Court, 31. awarding damages for injuiy to health by escape of gas, 205. TOTE, not necessary to authorize execution of corporate instruments when, 12. authorizing application to Judge of Insolvency, 37. ratio of, to shares may be determined by By-Laws, 48. by proxy may be determined by By-Laws, 48. by proxy of corporate officer, 49. of members of corporation, general provisions respecting, 60-54. \ compensation of corporate officer in absence of, 86. of company to increase capital stock, 87. of chartered manufacturing company how recorded, 169. of Directors authorizing indorsement of business paper unnecessary, when, 172. to increase or reduce capital stock, 174, 175. to issue general and special stock, 175. of four-fifths of stockholders to make certain goods, 177. to confirm organization of non- chartered company, 181, 215. of co-operative Association increasing or diminishing stock, 215. w. WAGES, statute liability of officers and stockholders for, 158. WARD. (SeeGuAKDiAN.) WARRANT, of Justice of the Peace, meeting of corporation called under, 13. to Sheriff from Treasurer of Commonwealth for collection of tax from, corporation, 25. of Governor on Treasurer of Commonwealth for amount of illegal tax on corporation, 26. of Judge of Insolvency upon application of insolvent corporation, 37. of collector for seizure and sale of shares. 69. of Judge of Insolvency Hgainst co-operative Association, 217. WATER-POWER COMPANIES, rules as to taxation of property belonging to, 114. WRIT. (!See Action, Attachment, Sekvice, Summons, etc.) WRIT OF ERROR, reversal of judgment against corporation upon, 24.