#### W. L. Thornton, Appellant, v. A. H. Balcom, *et al.,*Appellees.

1. Private Corporations: articles of incorporation: statutory requirements. file provision in articles of incorporation that the total indebtedness of such corporation ''shall not at any one time exceed three hundred dollars, except by a majority vote of the stockholders present at a called or annual meeting,” is a substantial compliance with the provisions of section *1061*of the Code, that such articles must fix the highest amount of indebtedness or liability to which the corporation is at any tipie to be subject.

2. -: notice of incorporation: sufficiency. The publication of an abstract of such articles of incorporation, containing all the requirements of the notice of incorporation provided for by statute and stating that" the indebtedness of the company shall not exceed three hundred dollars at any one tipie,” is a sufficient notice under section 1062 of thuCode.

3. -:-: ACTUAL NOTICE SUPERSEDES PUBLICATION OF. A person dealing with a corporation as such, and before the time that notice of incorporation is required to have been published, is not entitled, under section 1068 of the Code, to have the individual property of the stockholders of such corporation subjected to the payment of a debt of the corporation growing out of such dealing, upon the ground that the publication of the notice of .incorporation was not completed before the expiration of three months after the recording of the articles of incorporation, as required by section 1064 of the Code. Whether the individual property of stockholders could in event be held liable because of such omission, *quwre.*

4. -: subscription to stock. The absence of any provision in articles of incorporation fixing the amount of capital stock which must be subscribed before the corporation may commence business, will not render the individual property of the stockholders liable for corporate debts if the corporation commences business before the full amount of the capital stock has been subscribed.

*199
      *Appeal from Hardin District Cowrt.*— Hon. John L. Stevens, Judge.

Tuesday, May 17, 1892.

The defendants are stockholders in a corporation known as the “Lawn Hill Co-operative Creamery Company.” The said corporation was indebted to the plaintiff. He brought an action against the corporation, and recovered a judgment, and collected a part thereof from the corporation. Subsequently he brought this action to recover of the defendants the balance of his claim, upon the ground that the stockholders are individually liable for the debts of the corporation because of a failure to comply with the statute in the organization of the corporation. The trial was had before the court without a jury, and there was a judgment for the defendants for costs. The plaintiff *appeals.*

Affirmed.

*G. E. Albroolc,*for appellant.

*J. L. Carney,*for appellees.

Rothrock, J.

The law pertaining to the organization of corporations for pecuniary profit is to be found in chapter 1, title 9 of the Code. 1. Private corporations: articles of incorporation: statutory requirements. Certain acts are prescribed as necessary to be done to organize such a corporation, which include the publication of notice, the filing of the articles of incorporation, and the recording of the same in the office of the secretary of, state. After making these provisions pertaining to organization and publicity, section 1068 is as follows: ‘‘A failure to comply substantially with the foregoing requisitions in relation to organization and publicity renders the individual property of the stockholders liable for the corporate debts.” There is no question *200that articles of incorporation were adopted. Section 1061 of the Code requires that “such articles of incorporation must fix the highest amount of indebtedness or liability to which the corporation is at any time to be subject, which must not exceed two-thirds of the-capital stock.” The articles of incorporation recited that “the total indebtedness of this corporation shall not at any one time exceed three hundred dollars, except by a majority vote of the stockholders present at a called or annual meeting.” It is claimed that this was not a compliance with the law, because it does not fix the amount of indebtedness, but leaves it to be changed by a vote of a majority of the stockholders, whereas by another provision of the articles it is provided that the articles' of incorporation cannot be changed except by a two-thirds vote. The argument of counsel for the appellant proceeds upon the theory that the amount of authorized corporate debt must be fixed and stable, and not subject to' change. In our opinion it was so fixed, and the fact that it might be changed by an increase or diminution is no departure from the requirements of the statute. The manner in which the change may be effected does not affect the right, and is not a failure to substantially comply with the statutory requirement.

II. Section 1062 of the Code requires that “a notice must also be published for four weeks in succession in 2. -: notice of incorporation: sufficiency. some newspaper as convenient as practicable to the principal place of business.” ^ -g urgec[ that no notice was published. The fact is that the company published what purported to be “Articles of Incorporation of the Lawn Kill Co-operative Creamery Company. ’; This was a synopsis or abstract of the articles of incorporation, and contained all of the requirements of the statute for a notice. It answered all of the purposes of a notice, and was a substantial compliance with the statute. *201See *Heuer v. Carmichael,*82 Iowa, 288. The provision in the published notice in regard to the indebtedness is as follows: “The indebtedness of the company shall not exceed three hundred dollars at any one time.” It is claimed that this is not a true statement of the amount of the authorized indebtedness. It appears to us that it is just such a statement as the law required. It was 'the amount of indebtedness then authorized, and it was wholly unnecessary to publish the manner in which the limit of indebtedness might thereafter be increased or diminished.

III. Section 1064 of the Code provides that “the corporation may corhmence business as soon as the 3. -: -: actual notice supersedes publication of. articles are filed in the office of the recorder of deeds, and their doings shall be valid publication in a newspaper is made,: and articles recorded in the office of the secretary of state, within three months from the filing in the recorder’s office.” The fact is that the publication was made in a newspaper within three months, but it was not completed. There was but one publication before the expiration of the ninety days. It is claimed by counsel for the appellant that the failure to complete the publication within ninety days was a substantial non-compliance with the statute. It was held in *Eisfeld v. Kenworth,*50 Iowa, 389, that where there was an entire failure to publish the notice at any time, there was such a failure to comply with the requirements of the statute that the stockholders were individually liable for the corporate debts. The decision in the cited case was followed in *Marshall v. Harris,*55 Iowa, 182. In *Bank v. Davies,*43 Iowa, 424, it was held by> a majority of the court that the filing of articles of incorporation in the office of the secretary of state is not essential to the validity of a corporation, nor will a failure to file them render the private property of stockholders liable for the debts of the corporation. We *202cite this case as showing that a literal compliance with the statute is not required. Under the statute a substantial compliance is sufficient. The object of the publication of the notice of the organization of the corporation is that parties dealing with it may know or be charged with knowledge that they are not dealing with natural persons, but with a corporation. By section 1064 of the Code, the corporation is authorized to commence business as soon as the articles are filed in the recorder’s office, and the publication is not. required to be made at once, but may be made within three months. Parties dealing with the corporation in the meantime have' no ground for complaint that a publication has not been made. In other words, the rights of parties are not made to depend upon the publication of a notice immediately upon the filing of the articles for record with the county recorder. Our inclination is to hold that, if the publication be inserted in the newspaper within the three months, it ought not' to be beld a failure to substantially comply with the statute that the last publication was not made within that time. But it is really not necessary to determine the question in this case, and we do not determine it. The reason that it is not necessary is that the evidence quite satisfactorily shows — at least the court was fully authorized by the evidence in finding — that when the plaintiff made the contract upon which his judgment against the corporation was founded, he knew he was dealing with a corporation, and he made his contract before the time that the publication was required to be made. Under this state of facts it ought not to be held that the plaintiff had no notice of the organization of the corporation. '

IV. The authorized capital stock of the corporation, as shown by the articles of incorporation, was 4. -: subscription to stock. three thousand dollars, in shares of ten dollars each. There was about one thou*203sand dollars of stock subscribed. The plaintiff claims that the failure to secure three thousand dollars of stock created a personal liability against those who did subscribe. It is sufficient to say in answer to this position that there is no requirement in the articles of incorporation that all of the stock should be subscribed before commencing business, nor that any definite sum .should be subscribed, as in the case of *Tama Water-Power Co. v. Hopkins,*79 Iowa, 653.

Our conclusion is that there was no failure to substantially comply with the- statute in the matter of organization and publicity, and this disposition of the case renders it unnecessary to determine other questions discussed by counsel. The judgment of the district court is affirmed.