to state the name of the city, or town and county, in which the principal place of business is to be located, is not complied with by a certificate which states that the operations of the corporation are to be carried on in the county of Calaveras, State of California, because this does not state the city or the town.1

§ 234. Stating the Manner of Carrying on the Business. A certificate of incorporation, which sets forth that "the manner of carrying on the business shall be such as the association may from time to time prescribe," is not a compliance with a statute which requires the certificate to show "the manner of carrying on the business of said association." "Such an organization is An association through

too loose, indefinite, and uncertain. which large sums of money are to be collected and disbursed, for benevolent or any other purposes, should be constructed on a more substantial foundation.” 2

A

the

§ 235. Provision as to Manner of Payment of Stock. provision in a statute that the "charter" shall set forth time when and the manner in which the stock shall be paid for," is satisfied by a charter which requires that the stock shall be paid for in cash, and that no certificate of stock shall issue until this payment is made.3 So, where, under the same law, the charter declared that the stock shall be paid in cash at such times and such amounts and with such notices to the subscribers as the managers and directors shall deem best for all parties in interest,” — this was held a substantial compliance with the law.*

§ 236. Fatal Defects not Supplied by Parol Evidence. Where the certificate of incorporation is fatally defective in omitting some essential recital prescribed by the governing statute,

point of location was not required or expected to be stated. A town embraces considerable territory, often in our own State, with a moderately dense population, from thirty to fifty square miles. Thus, it is seen that it was not necessary to be very particular in giving the place where the business was to be conducted. So, such place, when out of the State, might be given

by equally general reference." People v. Beach, 19 Hun (N. Y.), 259, 262.

1 Harris v. McGregor, 29 Cal. 124. 2 State v. Central Ohio &c. Asso., 29 Ohio St. 399, 407.

3 New Orleans &c. R. Co. v. Frank, 39 La. Ann. 707; s. c. 30 Am. & Eng. R. Cas. 275; 2 South. Rep. 310.

4 Baltimore &c. Tel. Co. v. Morgan's &c. Co., 37 La. Ann. 883.

the defect cannot, it has been held, be healed by parol evidence.1 Thus, where the articles omitted to state that a majority of the members of the association were present and voted at the election of directors, it was held that proof could not be admitted, in a proceeding by the State to vacate the franchises of the corporation, that a majority were in fact present and did so vote.2 The alleged corporation can neither make out its corporate character, nor enlarge the effect of the certificate, by this species of evidence.3

§ 237. Acknowledgment of Articles. Under the general corporation act of Maryland, in force in the year 1870, it was held that the acknowledgment of the certificate of incorporation by all the subscribers was not required. An acknowledgment by five or more was sufficient. It was also held that an acknowledgment by the president and directors for the first year was not required.5 Some of the statutory schemes of organization contemplate that an election of officers shall precede the filing of the instrument of incorporation, and that the instrument shall be authenticated by the signatures of the officers thus elected."

7

§ 238. Amendment of the Articles or Certificate. - Upon principles stated in a former chapter with reference to special charters, if the certificate of incorporation is materially altered after one has signed it as subscriber for a given number of shares, without the consent of such subscriber, it will release him from his contract of subscription at his election, because it makes for him a different contract from the one to which he assented. The charter of a corporation organized under a gen

eral law is embodied in its articles of association and in the general law; and the articles of association, cannot, it has been said, be changed without the unanimous consent of the shareholders, at least of such shareholders as have vested rights 2 in the corporation. The question has arisen in respect of building associations, and it has been held that where the articles of such an association do not authorize the corporation to wind up and close its existence short of eight years, unless all the stock is redeemed at its value, such an association cannot dissolve itself, by a resolution passed at a corporate meeting, without the consent of all the shareholders. If the statute points out the steps to be taken in order to amend the articles, its provisions must of course be followed. But if the statute is silent, it is a sound conclusion that, in order for such an amendment to be good, the amended articles must be drawn up, signed, acknowledged and filed as required by the statute in the case of original articles. If the governing statute does not provide for an amendment of the certificate of incorporation, articles of association, or other instrument of incorporation, any attempted amendment must have the substantial effect of a reincorporation; so that the existence of the corporation will date from the amendment, and will not date by relation from the filing of the original and abortive instrument.5 The reasoning is that, if the defects are radical, the original instrument is wholly inoperative and void, and affords no basis for an amendment without the aid of an enabling statute. This reasoning would not, it is assumed, prevent the amendment of the articles from taking effect by relation, in respect of omissions not of an essential or radical character. Where the governing statute provides that the original articles shall be recorded in a certain way, and another section of the same statute' authorizes the amendment of the original articles for any purpose which might have been provided therein, and requires that a certificate of such amendment, executed as speci

1 Ante, § 216.

6

'Bergman v. St. Paul &c. Asso., 29 Minn. 275.

3 Barton v. Enterprise &c. Asso., 114 Ind. 226; s. c. 5 Am. St. Rep. 608. See Endlich Build. Asso. § 479. 4 Day v. Mill Owners' Mut. Fire

Ins. Co., 75 Iowa, 694; 38 N. W. Rep. 113; 18 Ins. L. J. 750.

5 Matter of N. Y. Cable R. Co., 109 N. Y. 32.

Here, Rev. Stat. Wis., 1772. 7 Ibid., § 1774.

fied in that section, shall be recorded in the office where the original articles are recorded, it is held that an amendment increasing the capital stock is inoperative until the certificate of amendment is left for record with the register of deeds of the proper county.1

§ 239. Filing, Publishing and Recording Articles. - Where a general law provides that persons may become a body politic and corporate upon complying with the provisions of the law, one of which is that, before any such corporation shall commence business, its articles of association shall be published in a certain way, and the certificate of the purposes of the organization shall be filed in certain public offices, the performance of these acts is a necessary prerequisite to the existence of such corporation, for the purpose of relieving the corporators from individual liability. It has been said that the mere signing of articles of association by parties proposing to form a manufacturing corporation, does not create such a corporation. The subscribers must also make, sign and acknowledge the certificate of incorporation prescribed by the governing statute, and must file the same in the recorder's office of the proper county, as there required, and must also file a duplicate thereof in the office of the Secretary of State. Until these steps have been taken, in one view, the corporation has no legal existence. So, in Illinois the act of recording the certificate with the recorder of the county is regarded as a necessary and final act which gives to the organization its corporate life, and endows it with its corporate franchises and faculties; and until this is done there is no corporation capable of

1 Wood v. Union Gospel Church &c. Asso., 63 Wis. 9, 13. And, incidentally, it is held that a complaint averring that such certificate has not been filed is equivalent to an averment that it has not been left for record. Ibid.

2 Bigelow v. Gregory, 73 Ill. 197; overruling, it seems, Cross v. Pinckneyville &c. Co., 17 Ill. 54; Diversey v. Smith, 103 Ill. 378; Gent v. Manufacturers &c. Ins. Co., 107 Ill. 652; Ricker v. Larkin, 27 Bradw. (Ill.) 625;

Indianapolis &c. Mining Co. v. Herkimer, 46 Ind. 142; Clegg v. Hamilton &c. Co., 61 Iowa, 121; Kaiser v. Savings Bank, 56 Iowa, 104; Cresswell v. Oberly, 17 Bradw. (Ill.) 281; Field v. Cooks, 16 La. An. 153; Garnett v. Richardson, 35 Ark. 144; Hurt v. Salisbury, 55 Mo. 310; Childs v. Hurd, 32 W. Va. 66; s. c. 9 South East. Rep. 362.

3 Indianapolis &c. Mining Co. v. Herkimer, 46 Ind. 142.

transacting business or incurring liabilities.1 So, where a corporation, instead of publishing the notice required by the governing statute, published its articles of incorporation, and it did not appear from them when the corporation was to begin and end, nor where its principal place of business was to be, it was held that this was not a substantial compliance with the statute, and that the stockholders remained liable for the debts of the concern as partners. But the delivery of the articles to the officer whose duty it is to put them on file, may be proved by evidence other than his indorsement. The date of filing is no part of the articles, and therefore may be proved by parol, regardless of the statute provision for the proof of the articles.5 The failure of the probate judge, upon request, to make the statutory certificate, does not, in Alabama, prevent the corporation from coming into existence, if the proper antecedent steps have been taken."

§ 240. Filing Copy with Secretary of State, etc. But where the other steps required by the statute are complied with, the failure to file with the Secretary of State a duplicate or copy of the certificate or articles of incorporation, will not vitiate the organization. But here, as in other cases, the language of the governing statute must be carefully kept in view. Thus, under a statute of Missouri, which made it the duty of the officers of the intended corporation to file a copy of the articles of association with the Secretary of State, and which provided that "the corporate existence of such corporation shall date from the time.

1 Cresswell v. Oberly, 17 Bradw. (Ill.) 281.

Code of Iowa, § 1063.

3 Clegg v. Hamilton &c. Co., 61 Iowa, 121.

Johnson v. Crawfordsville &c. R. Co., 11 Ind. 280. That this is the proper conception of a "filing," see Engleman v. State, 2 Ind. 91.

5 Ibid.

Sparks v. Woodstock Iron & Steel Co., 87 Ala. 294; 6 South. Rep. 195.

' Mokelumne Hill &c. Co. v. Woodbury, 14 Cal. 424; Cross v. Pinckneyville Mill Co., 17 Ill. 54; Hyde v. Doe, 4 Sawy. (U. S.) 133; Re Shakopee

Man. Co., 37 Minn. 91; s. c. 33 N. W. Rep. 219; First Nat. Bank v. Davies, 43 Iowa, 424; Baker v. Neff, 73 Ind. 68; Williamson v. Kokomo &c. Asso., 89 Ind. 390.; Portland &c. Turnpike Co. v. Bobb, 88 Ky. 226; s. c. 10 S. W. Rep. 794; Guadalupe &c. Asso. v. West, 70 Tex. 391; Van Pelt v. Association, 79 Ga. 439. Compare Spring Valley Water Works v. San Francisco, 22 Cal. 434. The Illinois cases are distinguished in Bigelow v. Gregory, 73 Ill. 197, 201.

8 As was pointed out in Granby Mining Co. v. Richards, 95 Mo. 106.