Case ID: ohio-st_34/html/0046-01.html
Source: Caselaw Access Project
Author: {"author": "Okey, J, Okey, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Clarke and another v. Thomas, Receiver of the Dayton Coal and Mining Company.
    1. By the act of 1861 (S. & S. 169, 170), the authority to increase capital stock possessed by manufacturing companies was conferred on mining corporations. The statute then in force conferring such power on manufacturing companies was the act of 1854 (S. & C. 369), which was repealed and re-enacted with material change in 1865 (S. & S. 237). Held, that a proceeding by a mining company, in 1868, to increase its capital stock, will be governed by the latter act.
    :2. When an increase of stock by a mining company has been determined on, in the manner provided by the act of 1865 ('S. & S. 237), and the stockholders decline to pay for part of the stock, the authority of the company to dispose of such stock is complete, and the agreement to take shares may be enforced by action, although the whole of the increased stock is never taken.
    ■ 3. Irregularities in the proceedings to increase the stock, or unauthorized provisions as to such stock, ex gr.a., that no notice of the meeting of stockholders' was given, that a part of the stock was declined by the stockholders without actual apportionment of it, or that the agreement contained a stipulation that the original stockholders should have part of the shares without paying for the same in money, will not defeat an action to recover on ajsubseription for such increased stock for the purpose of paying debts, where such subscriber, having knowledge of the facts, acquiesced until the company became insolvent.
    • 4. When a suit is brought by a receiver of an insolvent corporation, under the act of 1877 (S. & S. 237), against such subscriber, and judgment is rendered for the balance due, the court appointing the receiver has power to so control his conduct as to direct him to collect only such part of the judgment as will be the debtor’s fair proportion of the sum necessary to discharge the debts and adjust such rights as are properly to be determined in the suit in which the receiver was appointed.
    Error to the Superior Court of Montgomery county.
    Tbe action in the superior court was prosecuted by 'Thomas, receiver of the Dayton Coal and Mining Com■pany, a -corporation organized under the laws of Ohio, to recover a balance of three hundred dollars on their sub.s'cription for six shares of the company’s increased capital stock, each share being one hundred dollars. The answer contained statements as to the organization of the company and the steps to increase the capital stock, from which it was claimed that the subscription in question was illegal. A reply and amended reply were filed, containing averments, from which it is claimed that Olarke and Hawes are es-topped to deny their liability’-. Eighteen months after the answer was filed, Clarke and Hawes moved the court for leave to file an amended answer, but the motion was overruled, and they excepted. Judgment was rendered against them and in favor of the receiver, at the October term, 1875, of the superior court, for three hundred and five dollars, balance of the subscription, with interest, and they now ask that the judgment may be reversed, and they as-sign, among other causes for reversal, that the judgment is contrary to law.
    The facts found by the court or admitted, so far as it is necessary to state them, are as follows: On January 14, 1868, certain persons made a certificate for the incorporation of the Dayton Coal and Mining Company, and acknowledged it before a notary jmblic. The object of the ■ company was to mine coal in Belmont county, and transport and sell it, and do other things mentioned in the certificate. The capital stock was eight thousand dollars, divided into eighty shares of one hundred dollars each, and the principal office was fixed'at Dayton, Ohio. Immedi.ately thereafter the company organized and commenced business.
    On March 17, 1868, the company purchased the Hutchi•son coal mine, in Belmont county, with coal cars and other personal property, for eight thousand dollars. One-third •of the amount was paid in cash, and the balance was to be paid in coal at six cents per bushel, to be delivered at the ■mine at the rate of three car loads every week, each car to • contain three hundred bushels. The company took immedíate possession of the mine, and continued to mine coal therefrom for several years, until the company became insolvent, when the property was sold on execution to pay-debts. The weekly payments for the mine were made until March 1, 1870, and the balance, amounting to four thousand dollars, is unpaid.
    At the time the mine was purchased, the company was contemplating an increase of its capital stock to pay for the mine and afford means to carry on the business; and, in furtherance of this object, the board of directors, on March 21, 1868, passed a resolution in favor of such increase, so^ that the whole amount of stock should be five hundred and sixty shares of one hundred dollars each, on the terms and conditions hereinafter set forth in the writing signed by the-subscribers to the additional stock.
    On April 22, 1868, the resolution was submitted at a meeting of the stockholders, and approved by the vote of the holders of more than two-thirds of the stock. But no-notice of the meeting was published in any newspaper, although several newspapers were published at the time in the city of Dayton, where all the stockholders resided. All the stockholders, however, were personally notified, except one, and none of them ever objected, but, on the contrary, all acquiesced in the proceeding. The one who was not personally notified accepted the stock hereafter mentioned, which was allotted to him, and still retains it. Immediately following the meeting of the original stockholders, the directors apportioned among them, prorata, two-hundred and forty shares of the increased stock, and resolved that the remaining two hundred and forty shares should be sold. For the purpose of securing subscription to these shares, the directors, on April 26, 1868, prepared, and circulated a subscription book, containing the following agreement:
    “ Whereas, the Dayton Coal and Mining Company became a body corporate under the laws of Ohio, and organized with a capital of eight thousand dollars, divided into eighty shares of one hundred dollars each ; and, whereas,. the stockholders agreed and declared, at a meeting held for the purpose at the office of Dr. J. Wise, on April 22,1868, to-increase the capital stock to fifty-six thousand dollars, to be divided into five hundred and sixty shares of one hundred dollars each, and, by virtue of the increased value of said mining interest, appropriated and distributed, pro rata, among-themselves, three hundred and twenty shares, to which they regard themselves entitled as the original proprietors, of said interest, and have concluded, for the purpose of increasing their means in stocking and mining coal, and of' making coke, to put into market and dispose of the remain- ' ing two hundred and forty shares to other parties, at the-par value of one hundred dollars each, granting to each, shareholder the right and privilege of receiving, annually,, one hundred bushels of coal, at cost, for each share, as enjoyed by the original shareholders. The undersigned,, therefore, agree to take the number of shares annexed to-our respective names, paying for the same at the rate of one hundred dollars per share, in installments of ten percent., subject to the call of the president and directors of the company. Dayton, April 26, 1868.”
    The agreement was signed by Clarke and Hawes, who subscribed for six shares. Fifty-three others subscribed,, and the subscriptions amounted to ninety-eight shares of the increased capital stock. Some of the subscriptionswTere made before and some after the execution of the certificate of increase hereinafter mentioned. It does not appear how it was in that respect as to the subscription of' Clarke and Hawes.
    On June 3,1868, five of the seven directors, in pursuance of the resolution of the stockholders’ meeting, sigued and acknowledged before a notary public a certificate as follows :
    “ Dayton, Ohio, June 3, 1868. Whereas, John H. Winder, A. R. H. Folkerth, Josiah S. Broadwell, James Cling-ham, and William G-unckel, united in applying for a certificate of incorporation under the name and title of ‘ The Dayton Coal and Mining Company/ of the city of Dayton, In Montgomery county, Ohio ; and whereas, said certificate was issued to them on January 16, 1868, by which theybe•came a body corporate for the uses and purposes therein mamed, with a capital stock of eight thousand dollars ; and, ■whereas, the board of directoi’s elected pursuant to the provisions of the statutes of Ohio, did, at their regular meeting called for the purpose, on April 22, 1868, resolve •to increase their capital stock to fifty-six thousand dollars, .-and referred the same for confirmation to the stockholders’ meeting called for the purpose on April 22,1868, who voted to confirm the action of the board of directors in the premises. Now, therefore, the undersigned, president and directors of said Dayton Coal and Mining Company, do hereby make application to the secretary of state for said increase of the capital stock to the said sum of fifty-six thousand dollars, divided into five hundred and sixty shares •of one hundred dollars each.”
    Immediately thereafter the certificate was forwarded to “the secretary of state, and a copy thereof was forthwith returned by him to the company, accompanied by the following certificate: “ United States of America, secretary of state’s office. I, John Russell, secretary of the State of •Ohio, do hereby certify that the foregoing is a true copy of the certificate of increase of capital stock of the ‘ Dayton Coal and Mining company/ filed in this office June 6,1868. Tn testimony whereof, I have -hereunto subscribed my name and affixed the great seal of the State of Ohio, at Columbus, this 6th day of June, 1868. John Russell, secretary of state. [Seal.] ”
    The certificate so fqrwarded to the secretary of state was not verified by the affidavit of any person, nor was any copy forwarded to or recorded in the office of the recorder •of Montgomery county.
    No payment was ever made by the original stockholders for the two hundred and forty shares which were so apportioned to them, and it was not intended that they should make any payment therefor; and, at the time the certificate of increase was forwarded to the secretary of state, only ninety-eight of the two hundred and forty shares offered had been sold, and less than nine hundred and eighty dollars of the amount as subscribed had been paid.
    "When the certified copy of the certificate for increase was received from the secretary of state, thé company accepted the same as authority for such increase, and thereafter, through its directors, officers, and agents, and in its letter-heads, bill-heads, and advertisements published in Dayton, where all the stockholders resided, the company held itself out to the world as having a capital of fifty-six thousand dollars, and thereby it obtained an extensive ■credit, and, until December 28,1870, did a large and active business in mining and selling coal, and incurred a large indebtedness, of which over eight thousand dollars remain unpaid. While these representations wore openly made, no actual notice thereof was brought home to Clarke and Hawes, nor did it appear that they had represented themselves as stockholders to any creditor.
    Of the outstanding indebtedness, thirteen hundred dollars are due to the miners for work at the Hutchison mine, after the subscriptions for the increased stock were made. The miners, being about to stop work, were induced to continue upon the representations of the company’s agents that the capital stock amounted to fifty-six thousand dollars. Other parts of the indebtedness are for moneys advanced by the directors, salaries of officers, etc.
    After the subscription for the increased stock, the subscribers, among them Clarke and Hawes, were credited with the stock upon the books of the company, and certificates therefor were issued to such subscribers as called therefor; but the defendants below never asked for any certificate. In the organization and transactions of the company, and in the elections for directors, no difference was made between the holders of the increased stock and the original stockholders. All were accorded the same rights and privileges. At an election held January 4, 1869, three holders of increased stock were elected .direetors, and acted as such, and three other holders of the increased stock were elected at different times to fill vacancies in the board, and acted as such directors. During the last year the company carried on business, a majority of the directors were subscribers'to the increased stock alone.
    Clarke and Ilawes did not vote at any election for directors, hold any office -in the company, or take any active part as stockholders. They did, however, at various times, in common with the other stockholders, receive coal from the company at cost, and at a less price than the company sold to strangers, by virtue of the directors’ recognition of their membership. And the president and directors having made calls, from time to time, for installments of the subscription, the defendants below, between June 1 and October 6, 1868, paid five installments, amounting to three hundred dolla'rs ; and at no time previous to December 28,1870, when the company became insolvent, did they claim or make known any defense against their liability to-pay their subscription, and they never objected, until that time, to anything done by' the company or the directors.
    On December 28, 1870, the board of directors met pursuant to the call of Samuel Marshall, president. There were present Samuel Marshall, John 0. Baird, John Cling-man, Eli Thompson, and T. J. Eaulkner; and, on motion, the following resolution was adopted : “ Resolved, by the acting board of directors of the Dayton Coal and Mining Company, that, in view of the condition of the affairs of this corporation, and the management of its affairs, we deem it for the benefit of the creditors and stockholders thereof that a receiver be appointed to take the management of the affairs and property of said company, under the direction of the superior court of this county, in pursuance of the statute in such case made and provided; and that we recommend the appointment of Dr. John "Wise as such receiver.”
    Thereafter, December 28,1870, John Clingman, John C. Baird, Elihu Thompson, Samuel Marshall, and Thomas J. Eaulkner, five of the seven directors, filed in the superior court an ex parte petition, representing the company to be insolvent, and praying for a dissolution thereof, under the act entitled “ an act to provide for the voluntary dissolution of corporations,” passed April 15, 1867 (S. & S. 243). But, objection being made'tb the sufficiency of the petition and the inventories appended thereto, the petition was held to be insufficient, and an amended petition was filed by Clingman, Baird, Thompson, and Marshall, and the juris•diction and proceedings of the court were based thereon. In the petition in the case here under review, it is stated that they were a majority of the directors “having management of the concerns of said corporation.”
    At the time the amended petition was filed by Baird and •others, as above stated, Baird and Thompson had sold their stock, and were no longer stockholders in the company; but they had continued, without objection from ¡my person, to act as directors. Thompson was secretary, and had possession and charge of the books, and Baird was treasurer, and had possession and charge of the accounts. Trebein, who had been a director, had long ceased to act as .such: The plaintiffs in the amended petition composed a majority of the last-elected board of directors, and were then acting as directors, and were the only officers having the management of the affairs of the company.
    Such proceedings were had under the amended petition, that the superior court, at its October term, 1872, made a ■decree dissolving the corporation, and appointing Alfred A. Thomas receiver thereof.
    
      Young &¡ G-ottschall, for plaintiff in error:
    1. The steps to authorize an increase of stock never .having been taken, the corporation could not dispose of •stock beyond the amount stated in its charter. 2 Redfield on R. R. 502; 10 How. P. R. 543; 6 Pick. 23; 34 N. Y. 30 ; 30 Conn. 231; 9 Mich. 448 ; 15 Ohio St. 31; 11 Ohio, :96 ; 17 Ohio, 349 ; 1 Ohio St. 41; 12 Ohio St. 601; 10 Ohio, 109 ; 5 Ohio St. 59; 8 Ohio, 286; 9 Ohio St. 27-33; 4 Wheat. 518; 11 Ohio, 487; Angelí & Ames on Corporations, § 527; Essex I. Co. v. Collins, 8 Mass. 299; 7 Johns. 112; McCord v. O. & M. R. R. Co., 13 Ind. 223; 1 Sup. Ct. Rep. 354.
    2. As against the defense ultra vires by a corporation, there can be no estoppel. A contract which is ultra vires is absolutely void, and can not be rendered valid by the aid of the doctrine of estoppel. Hood v. N. Y. & N. H. R. R. Co., 22 Conn. 502; Mechanics’ Bank v. N. Y. & N. H. R. R. Co., 13 N. Y. (3 Neman) 599; P. J). ft M. S. Navigation Co. v. Dandridge, 8 Gill, and Johns. 248; N. Y. & N. H. R. R. v. Schuyler, 38 Barb. 534; Treadwell v. Com. Hancock Co., 11 Ohio St. 183; Hopple v. Trustees of Brown Tp., 13 Ohio St. 311; Angell & Ames on Corporations, § 256; 2 Redfield on Railways (3d ed.), 502, note, and 503 ; 1 Ib. 617, § 8; 5 Am. Law Review, 272, article “ Ultra Vires;” Herrman on Estoppel, § 540, p. 510, and § 503; Dillon on Municipal Corp. (2d ed.), § 381 and note; Ib., §§ 382, 206 (note), 749, 766, 767, and 768; 18 Barb. 312; 39 Ind. 95 ; O. & L. R. R. Co. v. Veasi, 39 Maine, 571; New Orleans, etc., R. R. Co. v. Harris, 27 Miss. 517, 541; Lewis v. Bank of Ky., 12 Ohio, 147.
    Erom these cases, it appeal’s that where the contract is-absolutely ultra vires, the consent or acquiescence of all the stockholders will not make it valid. See 5 Am. L. R. 277; A. & A. on Corp., § 256; 22 Conn. 510; and 10 How. Pr.,. 543, supra.
    
    There can be. no estoppel, because there was no legal' possibility. There can be no consent to a legal impossibility, and “ where there is no legal power, an attempt to act can he followed by no legal consequence.” 3 Ohio, 240, cited ; 13 Ohio St. 322.
    Where the contract is ultra vires, the corporation can not even be estopped by deed or matter of record. 2 Redfield’» R. R. 595 ; Bigelow on Estoppel, 283 ; Herrman on Estoppel, § 541; 2 Washburn, R. E. (2d ed.) 484; 6 Ohio, 366;, 5 Ohio, 190.
    To the rule thus established, there is only this exception r. “ That a private corporation will be estopped to-set up the-defense ultra vires in respect to all acts and contracts within the apparent scope of its powers; and that both public and private corporations will be estopped to set up such defects in their establishment or organization, or in the preliminaries to the executions of their acts, as are peculiarly within their own knowledge, and notice of which can not be justly imputed to the other party.” Bigelow on Estoppel, 466.
    As, for instance, when a corporation has power to do an act, it may be estopped from denying that the form adopted was not the precise mode prescribed by the charter (Herman on Estoppel, §§ 563 and 543); or where the act in its external aspect is within the general powers of the company, and is only unauthorized because done with a secret unauthorized intent, as where a railroad company having pow'er to purchase iron for its roadway, buys it for speculation, and with the concealed intent to sell again (5 Am. Law Review, 282, 283); or where, as in Eaton v. Aspinwall, 13 How. 184, and 19 N. Y. 119, the defect is the want of a sufficient preliminary subscription, an act of omission which could only be proved by testimony, and which was not a prerequisite to be publicly- declared and recorded ; but where, as in this ease, the act (the increase of stock) must be “ publicly declared and recorded,” thereby imputing notice to all the world, there is no exception which will permit an estoppel to the defense ultra vires.
    
    And this defense is equally available to the other party to the contract. Bigelow on Estoppel, 467; Herrman on Estoppel, § 543 ; Dillon on Municipal Corporations, § 382, p. 474. It would seem to be unnecessary to cite authorities in support of this proposition, because it is well understood that there must be mutuality in estoppels, as well as in • contracts.
    A large number of cases cited by plaintiff below do not seem to us to be pertinent to the question we are now discussing. They only establish this proposition, and nothing more, viz: That the corporate existence can not be denied or impeached, or its forfeiture established : a. By a stockholder collaterally, b. By a party who has received its funds or •other property, and given his obligations therefor, c. By •a corporator who has aided to put the corporation in existence, or by the company, or its members, after having organized and acted as a corporation, and entered into the contract upon which the suit' is brought, d. By a stockholder sued to enforce his individual liability, who has participated in its acts of user as a. corporation de facto, and appeared as a stockholder upon its books when the debt for which he is sued was contracted.
    
    We are not here seeking to deny the corporate existence of the plaintiff’s company; but, admitting such corporate existence, we assert that the contract sued upon is one which the company had not the power to make. That is a question entirely different from any raised or decided in the above class of cases.
    That this defense can not be estopped will be further apparent when we come to examine the following cases in which it has been sustained : 8 Ohio, 257-289 ; 10 Ohio, 108; 13 Ohio, 1; 20 Ohio, 303, note ; 5 Ohio St. 59 ; 9 Ohio St. 27 ; 8 Ser. & R. 219 ; 14 lb. 434 ■ 9 Mich. 269; 7 Wend. 31; 3 Wend. 483, 573.
    This is not a suit to charge defendants with some liability as stockholders, but to hold them liable on their contract to become stockholders. The plaintiff must recover upon the contract, or not at all, and the contract being ultra vires, is no contract in law, and therefore can not be aided by estoppel.
    To establish an equitable estoppel, or estoppel in pais, it must be shown : a. That the defendants made some admission or did some act, with the intention of influencing the conduct of the corporation, or its creditor's, or which they had reason- to believe, as men of ordinary prudence, would influence their conduct inconsistent with the defense they propose to make. b. That said parties acted upon or were influenced by such act or admission, c. That said parties will be injured by allowing the truth of such admission to be disproved. Bigelow, 600 ; Herrman, § 323 ; 7 Ohio St. 99-105 ; 14 Ohio St. 109-119.
    
      
      Estoppels in pais are not allowed to operate except in good conscience and honest dealing, the party ought not to be permitted to gainsay his admissions; and, in general, the act or declaration of the party must be willful, that is, with'knowledge of the facts upon which any right he may have must depend, or with the intention to deceive the •other party. McAfferty v. Conover, 7 Ohio St. 105 ; Bigelow on Estoppels, 480.
    And such estoppels will only operate in favor of those whose conduct they were intended to influence, and not in favor of strangers who have casually heard declarations on faith of which they have acted. Morgan v. Spangler, 14 Ohio St. 102, 119 ; and, in general, denials of former acts should amount to a fraud to- constitute an estoppel. 49 Mo. 231. All these elements are plainly wanting in this case.
    Persons dealing with the managers of a corporation must take notice of the limitations imposed upon their authority by law. Pearce v. Madison & Ind. R. R. Co., 21 How. (S. C.), 441-443; cited 11 Ohio St. 192 ; Dillon on Municipal Law, § 381 and note page 373; 5 Am. Law Review, 287 ; Herrman on Es., § 543; 13 Ohio St. 331.
    
      Alfred A. Thomas and D. A. Haynes, for defendant in error:
    The plaintiffs in error, having paid installments of their subscription, received benefit from their contract with the company, and acquiesced in the acts of the company until it became insolvent, are estopped to deny their liability, notwithstanding the irregularities in the proceedings with respect to the increased stock. Green’s Brice’s Ultra Vi-res, 351, 444U591; Ang. & Am. on Oorp. 235, 251,498, 523, ■529 ; Black River v. Utica Railroad, 25 N. Y. 209; Steam Navigation Co. v. Weed, 17 Barb. 308; Mokelumme, etc., Mining Co. v. Woodbury, 14 Cal. 424; Chamberlain v. Railroad Co., 15 Ohio St. 250 ; People v. Peck, 11 Wend. 694; Chester Glass Co. v. Dewey, 16 Mass. 94; Jackson v. Croy, 12 John. 427 ; Samuel v. Holladay, Woolworth (C. C.) 400; 
      D. W. Co. v. Coy, 13 Ohio St. 91; Phillips v. Davis, 11 Mass. 113; Amhurst Academy v. Cowles, 6 Pick. 434; Zabrinski v. C. C. & I. C. Co., 23 How. (U. S.), 381; Bissell v.. Jeffersonville, 22 How. (U. S.), 300 ; Upton v. Jackson, 4 Ins. L. J. 189; Bank of U. S. v. Dandridge, 12 Wheat. 71; Owen v. Purdy, 12 Ohio St. 73; Callender v. Painesville, etc., R. Co., 11 Ohio St. 520; Warner v. Callender, 20 Ohio St. 197; Hagerman v. O. B. & L. Association, 25 Ohio St. 186; Bradley v. Ballard, 55 Ill. 413; Argenti v. San Francisco, 16 Cal. 256; Bissell v. Michigan S., etc., R. Co., 22 N. Y. 259; Methodist E. Church v. Pickett, 19 N. Y. 485; Eaton v. Aspinwall, 18 N. Y. 119; Buffalo & A. R. Co. v. Cary, 26 N. Y. 75; 15 Wend. 314; 16 Md. 423 ; 25 Pa. St. 157; 30 Conn. 556; 16 S. & R. 140.
   Okey, J,

Objection is made that it does not appear by tbe petition that the superior court had jurisdiction to appoint the receiver; but we think the court had jurisdiction to make the appointment in the manner it was made, and that mere irregularities as to the form in which jurisdiction was invoked can not be inquired into in this collateral way. The proceedings, indeed, are substantially in the form generally pursued. Godley v. Pugh, 29 Ohio St. 438. And the-objection that Baird and Thompson were not directors de jure is of no avail. They were directors defacto, and their acts were valid. Bartholomew v. Bentley, 1 Ohio St. 37, is-an extreme case, and in no way opposed to this view.

The defendants below moved the court for leave to file an amended answer, and the motion was overruled. The original answer had then been on file more than eighteen months. There can be no interference with the decision of matters of that sort, unless the record discloses manifest abuse of discretion, and here no such abuse is shown.

As to the form of the pleadings, concerning which there-has been much discussion, it is sufficient to say there.is no error in that regard for which we are willing to disturb the findings; that the issues are broad enough to support the-findings;. and that no actual fraud being shown, the question is, whether in matter of law the defendants below are-liable on their subscription, on the facts found by the superior court, or admitted.

The certificate of incorporation was acknowledged before a notary public. The statute required that it “ be acknowledged before a justice of the peace.” The State ex rel. v. Lee, 21 Ohio St. 662. Whether the defect could have been cured without a proceeding for the purpose under the act of 1859 (2 S. & C. 1172; Const., art. 2, § 28), or whether it was cured by force of the act of 1872 (69' Ohio L. 14), we need not determine, for the defendants below were estopped from setting up the defense. Lucas v. Greenville B. & S. Association, 22 Ohio St. 339.

The principal questions to be determined involve a construction of the acts relating to the increase of capital stock, and an act which is sometimes called the wincling-upact.

The act of 1861 (S. & S. 169), in force when the steps to increase the stock were taken, but now repealed (74-Ohio L. 183), provided, among other things, that a mining corporation, “ when organized, shall be a body corporate, having all the privileges, immunities, and powers conferred upon manufacturing companies, and shall be governed in all respects by the provisions of said (general corporation) act, and the other acts supplementary and amendatory thereto.” 1 S. & 0.271. Notwithstanding the strict construction given to the same language in the act of 1856-(Miami Coal Co. v. Wigton, 19 Ohio St. 560), we do not doubt this provision conferred on mining corporations the-same power to increase stock that had been conferred on manufacturing corporations by the act of 1854 (1 S. & C. 369) which was repealed in 1865 (S. & 0. 237). The act of 1872 (69 Ohio L.24), amended in 1873 (70 Ohio L. 37), conferred no new power in this respect.

■ The question arises whether the case is governed by the-act of 1854 or the act of 1865. In Stall v. Macalester, 9 Ohio, 19, it was held that express reference in an act to a specified statute for the form to be observed in proceedings under the act, virtually incorporates the old statute into the new, and that if the former be in general terms repealed, it will, nevertheless, remain in force as to proceedings under the act. But where; as in this case, the reference is general to an original and supplementary and .amendatory acts, we must look to the law delegating the power and regulating the mode of its exercise in force at the time the power is invoked. Kugler’s Appeal, 55 Penn. St. 123.

The statute to be construed, then, is the act of 1865 (S. .& S. 237). Changes have been made in it (69 Ohio L. 24), but they do not affect this case. That act, thus made applicable to mining companies (S. & S. 169, 170), provides that if the directors desire to increase the capital stock, they shall call a meeting of the stockholders, giving at least thirty days’ previous notice in some newspaper published at the company’s place of business, or, if none be published there, then by notice personally, or by mail, to each stockholder. If the stockholders owning two-thirds of the stock vote in favor of the increase, the directors shall apportion the increase, pro rata, to the stockholders, in proportion to their stock; and failure for thirty days to pay for the stock so apportioned is a declination of the right to take it, which gives the directors power to dispose of it ■otherwise, as the by-laws may prescribe.

“ Sec. 4. Upon the full payment in-money of such inurease of capital, the directors shall, under their hands, and verified by their affidavit, or that of a majority of them, certify the same to the officer designated for that purpose by the law under which said company was organized, who shall ■dispose thereof in the manner provided by law for the original certificate of the organization of such company. Each certificate of such increase shall distinctly state that the whole amount thereof has been paid to such company, .and that no note, bill, bond, or other security has been taken for any part thereof, and that the credit of such company has not been used, directly or indirectly, to raise the funds to pay the same, or any part thereof.”

The stockholders are also individually liable, under the-same act, to a further sum equal in amount to their stock,. “ and any unpaid installments thereonand they are liable, moreovei’, individually, for all debts due to the employes.

To properly construe this act is a task not free from difficulty. Are the steps to increase the capital stock ineffectual, unless the whole amount of the increase determined on is actually paid to the company in money, and the certificate contemplated in the act is furnished ? If that is the pi’oper construction, one who pays money for stock would have no other right, in case the whole of the increase-is not taken, than to recover from the company the amount paid. We do not think we are required so to hold; but,, on the contrary, a fair construction of the act, in connection with other statutes, seems to be that when, at a meeting called as provided in section 2, the stockholders owning two-thirds of .the capital stock vote in favor of the increase, and, the stock having been apportioned, a stockholder refuses for thirty days to pay the corporation for the-portion of stock allotted to him, or any part of.it, “the directors may dispose of the same in such manner as the by-laws thereof may prescribe.” The capacity of the company to' dispose of the stock is complete on such refusal, and the contract of one who thus agrees to take any part of such increased capital stock may be enforced against him. It follows that when he pays the money he becomes-a stockholder to the extent of his shares, even if the residue of the increased stock is never taken. Of course, as the whole amount voted by the stockholders in this case was never subscribed, there was no authority to make the certificate provided for in section 4 ; but the steps there provided are simply to afford evidence that the proceeding to-increase the amount of the capital stock, to the full extent voted by the subscribers, has been consummated, so that the fact may be properly made known to the public ; and, until that is done, the company can not rightfully transact business on the basis of such increased capital. Whether ■the act of 1854 (1 S. & 0. 369), was susceptible of the same .•construction is more doubtful.

While, therefore, an agreement regularly made to take .shares of such increased stock would be mutually binding ■ on the company and the subscriber, even if the whole im crease voted is never taken, it is not to be denied that the proceedings in this case were irregular. We will not determine whether the state alone can set up these irregularities (as to which see Pullman v. Upton, 96 U. S. 328), but •whether, notwithstanding such irregularity, the agreement-may be enforced against the subscribers. No notice of the •stockholders’ meeting was published. Only part of the increased stock was apportioned to the original stockholders; .and, besides, the new as well as old subscribers understood that the part so apportioned was not to be paid for. The remaining shares were offered for sale to any who would subscribe, without apportionment, and without delay ; and so far the statute was disregarded. But the existence of these irregularities is not decisive of the question as to the validity of the subscription. •

The record shows that Clarke & Hawes — indeed, all the ¡■subscribers to the increased stock, except one — had actual notice of the stockholders’ meeting at which the increase was voted, and the one who had no actual notice accepted the stock apportioned to him and still retains it. The in.strument subscribed by the plaintiffs in error contained the information, that two hundred and forty shares of the increased stock had been divided among the original stockholders, who were not to pay for the same. The plaintiffs in ■ error were credited with their stock on the books of the company, and it has stood in their names ever since they made the subscription. They made repeated payments of installments to the directors, without objection. They received • coal from the company at reduced rates, in accordance with their contract of subscription and by reason of their ownership of the stock. They were deprived of no right accorded to other stockholders. They were aware, we think, that the company was representing that its capital stock was ■.fifty-six thousand dollars, and that their subscription was part of that amount. Debts were contracted on the faith -of the increased stock. If they did not know the fact, it •was their own fault. Certain it is, that they made no protest, no complaint, during the time when the company was prosperous. Equally certain it is, that now, when the company is insolvent, they will not be heard to protest or complain. Trumbull Co. M. F. I. Co. v. Horner, 17 Ohio, 407; Voorhees v. Receiver, etc., 19 Ohio, 463; Upton v. Hansborough, 3 Bissell, 417; Paysen v. Withers, 5 Bissell, 269; Paysen v. Stoever, 2 Dillon, 427 ; Upton v. Tribilcock, Sanger v. Upton, 91 U. S. 45, 56; Craig v. Cumberland, etc. School, 72 Penn. St. 46 ; Greene’s Brice on Ultra Vires, 444, et seq. Nor are we prepared to say that the original stockholders are not liable for the two hundred and forty shares which they appropriated to their own use. It will be time enough to -decide that question when it is directly presented.

The powers and duties of the receiver are all defined in the winding up act of 1867. S. & S. 243; 72 Ohio Laws 139. It is his duty, among other things, to collect all outstanding liabilities, including moneys due from subscribers for stock; but the company is dissolved as an insolvent corporation, and collections from stockholders are only made for the purpose of paying the liabilities, and adjusting the affairs of the corporation. The receiver is the officer of the court, and at all times subject to its order and direction; and while the judgment at law, rendered against the plaintiffs in error will be permitted to stand, it will be the duty of the court to see that no injustice is done to them. All other responsible persons indebted to the corporation for stock, should be compelled to contribute, so that no stockholder, in the payment of the debts, and adjusting the affairs of this insolvent corporation, will be compelled to pay more than his just proportion. Sanger v. Upton, supra. Manifestly it would be a less burden on these debtors for the receiver to collect from them only their just proportion than to collect the whole amount for which they are liable, and refund to them the excess on final settlement and distribution. But that matter must be left to the discretion of the court having control of the conduct of the receiver. Nor do we decide whether the rights of stockholders, inter sese,. may be determined in that proceeding.

Young Gottsehall, for plaintiffs in error.

A. A. Thomas and D. A. Haynes, for defendants in error.

Judgment affirmed,.

H. Eerneding & Son v. Alfred A. Thomas, Receiver.

Jacob S. Gary v. Same.

William Sander v. Same.

Error to the Superior Court of Montgomery county.

Okey, J.

Judgments affirmed.