be held at a specified place and time "to act on the report of the board of directors, to choose a board of directors for the ensuing year, and to transact any other business that may be brought before the meeting." In their report the directors recommended the increase of $1,200,000 that was voted at the meeting, and it is averred in the answer that this report "had been distributed generally among the stockholders several days before the meeting." The notice does not refer to the report as an annexed or as an accompanying document, nor in any way make it a part of the notice. The notice does not state that an increase of capital was one of the purposes for which the meeting was called, nor inform the stockholders that a question of increase would be submitted to them, or that there was or would be anything in the directors' report relating to that subject. The company's first bylaw contains this clause: "Any business within the power of the corporation may be transacted at annual meetings, although the subject-matter thereof is not specified in the notice." There was a similar by-law in Richardson v. Railroad Co., 44 Vt. 613, 619, and it may be a common regulation. It is evidently based on reasons on which the authorities have established a difference in the notices required for regular and those required for special meetings. Mor. Corp. §§ 479, 481, 482; Cook, Stocks & S. §§ 594, 595, 598; Dill. Mun. Corp. §§ 262, 264; Mechem, Pub. Off. §§ 172-176; Paine, Elect. §§ 384-387; Cooley, Const. Lim. 759. In a Vermont case, the notice was that the annual meeting of the stockholders would be held at a specified place and time. The court said: "A manifest distinction obtains between general stated meetings of a corporation and special meetings. * Stated meetings of a corporation are usually general; i. e. for the transaction of all business within the corporate powers. Where the meeting is stated and general, no notice is required either of the time or place of holding the meeting, or of the business to be transacted. Ang. & A. Corp. 275. Such is the general law of private corporations. *

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The an

nual meeting, of all others, is the one when, not only usually, but always, all business is expected to be transacted. And the common custom of a country is of great force in the construction of statutes as well as contracts. *** The clerk here served a notice * stating the time and place of the meeting, and that it was the annual meeting of the company. This was certainly all the notice which could be given of the annual meeting. As each corporator knew that it was competent at this meeting to transact all business pertaining to the corporate interests, the very term 'annual meeting' was, ex vi termini, notice to the effect; and it could have answered no good purpose to repeat this in the notice." Warner v. Mower, 11 Vt. 385, 387, 391, 392, 394. general rule, it may be safely affirmed, perhaps, that in regard to general meetings of the company, which are for the transaction of

all business, no notice of the particular business to be done is necessary." Redf. R. R. § 21. In other authorities the rule is stated with material qualifications. In this case the notice contained information which the by-law did not require to give. The by-law would have been complied with by a notice of the time and place of the annual meeting.

The

The statutory provision that the capital can be increased at a meeting called for the purpose is a part of the partnership contract, but, being also a law of the state, it cannot be suspended or repealed by any other power than that of making law. The by-law is to be construed as if it contained a proviso excepting from its regulation of notices of annual meetings the business which cannot be legally done at those meetings without specific notice. If it were construed to allow an increase of capital at a meeting not called for the purpose by the notice, it would be inoperative in this case, because not authorized by section 4, c. 147, Gen. Laws, which affirms the general rule of the common law that corporations may "adopt by-laws not repugnant to the laws of the state." The legislative power of altering the law of the land cannot be delegated to the defendants. The grant of power to increase capital "at any meeting called for the purpose" is a grant limited in an important particular. The limitation is a general law, applicable to an increase of capital under section 10 of the act of 1889, and chapter 3 of the act of 1891. De Lancey v. Insurance Co., 52 N. H. 581. If there is a lack of corporate capacity to increase capital at a meeting not called for the purpose, the want cannot be supplied by a by-law. clause "at a meeting called for the purpose" is to be so construed as to accomplish the legislative design. Its operation can be neither more nor less extensive than the end it was meant to be a means of attaining. If it was intended to be, not an absolute withholding of the power of increasing the capital at a meeting not called for the purpose, but a protection of stockholders against a special danger arising from their not having adequate information of a proposed increase, the question is whether the stockholders have had the intended protection. In Rex v. Langhorn, 4 Adol. & El. 538, on quo warranto, the question was whether a meeting of the burgesses of Berwick-upon-Tweed, at which the defendant was elected mayor of the borough, was duly assembled. The custom was for all resident burgesses to receive a personal summons. of them-Robertson, a fisherman-was not summoned, for the reason, as the notifying officer testified, that Robertson had several times told him not to summon him, as he was frequently out at sea. It was held that attendance was a public duty on the part of each burgess; that notice was required, not for his personal benefit, but as an admonition to perform his public duty; that the public had a right to the security afforded by the service of notice on each member of the corporation, and that he could not waive the public right. The

One

reason of that decision is not applicable to the present case. The requirement of a notice of a proposed increase of capital in the call for a railroad meeting is not a security for the performance of a public duty, but a protection of the private rights of each stockholder against the harm that might result from an increase of capital voted at a meeting not called for the purpose. The general rule is that any one can waive a proceeding required for his exclusive benefit. When the object of a statute is completely accomplished, the law is often satisfied, although some of its prescribed methods have not been followed. If, on a point affecting an individual's private rights, he has all the information he is entitled to, telling him what he knows is not always an essential ceremony. If every Concord & Montreal stockholder had attended the annual meeting in October with full knowledge of the proposed increase of capital, and had enjoyed all desired opportunity to oppose it, and to prepare for opposition, there would be strong ground to argue that the vote was not void for want of words in the notice that would have been as useless, for the practical purposes of the stockholders, as the most unmeaning procedure that could be devised.

"It is objected that notice of the meeting for the election of directors was not proved; but the objection is, in this case, unimportant, as from the evidence it appears that the subscribers here sued were present by proxy, and voted." Jones v. Milton & R. Turnpike, 7 Ind. 547. "We are inclined to the opinion that, all the stockholders being notified and present at the meeting, and no objection having been then made to the regularity of the notification, all objections on that ground have been conclusively waived." Stebbins v. Merritt, 10 Cush. 27, 34. "The court rejected the offer of the defendant to prove that no notice had been given of the first election of directors. I think this was properly rejected, on the ground that the defendant could not avail himself of a neglect to give notice to any other stockholder. The defendant himself was present at that meeting, and voted, and was elected a director. He has not suffered by an omission to serve notice, and he is not in a situation to object as to others." Plank-Road Co. v. Thatcher, 11 N. Y. 102, 108, 113. There are other authorities on this point. Cook, Stocks & S. § 599; Dill. Mun. Corp. §§ 263, 264, 266; 18 Am. Dec. 103. Sherwin v. Bugbee, 17 Vt. 337, was trespass against a tax collector of a school district for taking the plaintiff's oxen in the collection of tax voted at a meeting of the district. It did not appear from the record of the warning that the hour of the day at which the meeting was to be held was specified in the warning. The defendant offered parol evidence to prove that in the original warning for the meeting, which was posted up in the district, the hour of meeting was set at 6 o'clock in the afternoon. This evidence was excluded. The defendant offered to prove by parol evidence that all the

legal voters were present and voted at the meeting, and that they all met at about 6 p. m. This evidence was excluded. The defendant then moved that the case be continued, and that the clerk of the district be permitted to amend his records so as to conform to the fact as to the warning. The motion was denied, and the plaintiff had judgment in the county court in apparent pursuance of an exceptionally harsh practice in tax cases that is obsolete in this state. The supreme court held that the defendant's parol evidence concerning the original warning, and the attendance of all the voters at the meeting, was rightly rejected. "The subject of imposing taxes," say the court, "has always been scrutinized and narrowly watched; and a strict and rigid compliance with the law has been required to make the taxes legal. The case of an election has usually been construed more liberally." Decisions of other jurisdictions are necessarily considered here in view of the fact that an equal division of our public expenses is not now obstructed by strained and quibbling interpretation, a strict observance of frivolous formality, and a disregard of substance and of principle. On quo warranto to determine title to office, such evidence as the defendant offered in Sherwin v.

Bugbee is ordinarily received. Its competency in a tax or railroad case need not now be examined. In Com. v. Smith, 132 Mass. 289, on quo warranto to determine the defendant's title to the office of county commissioner, the question was upon the validity of the notice of the annual meeting in the town of Gay Head. The statute required "a warrant under the hands of the selectmen, directed to the constables or some other persons appointed by the selectmen for that purpose, who shall forthwith notify such meeting." The chairman of the selectmen posted on the door of the meeting house a notice, not directed to constables or other persons appointed by the selectmen. Eight registered voters were absent from the meeting. Of those present all voted for county commissioner but one. Of the eight who were not present, five had actual notice of the time and place of the meeting, and that a county commissioner was to be voted for, and did not remain away from the meeting on account of any want of notice; and of the other three two were at sea, and one was confined to his bed by sickness. "If these facts are competent," say the court, "it becomes apparent that the defects in the notice or warrant and in the mode of serving it worked no injury, and that the election was as fully attended as if all the provisions of the law in calling the meeting had been strictly followed. These facts are competent, unless the provisions of the statute which have been disregarded are strictly mandatory; and we are of opinion that they are not. * * * The main purpose of a warrant for meetings for such elections is to remind legal voters of their right and duty to vote, and of the officers to be elected. * *If this election at Gay Head be declared void, there can

be no new election for county commissioner at Gay Head, and the voters there will have been deprived of their votes without fault on their part, in consequence of the negligence of the selectmen." It was held that the election at Gay Head was not void.

Whatever may be the rule as to the admission of evidence to show that no actual injury resulted from a defective notice of a corporate meeting, it is necessary to consider the nature and extent of the protection intended to be given to stockholders by the requirement of a meeting called for the purpose of increasing the capital. The law applicable to this branch of the case was enacted not merely for the benefit of the owners of the Concord & Montreal road in its present situation, but for the security derivable by this and many other companies in various conditions from a specific call to all members to exercise their judgment, with opportunity for inquiry and consultation, and to vote for or against an expenditure and expansion that might be judicious and might be disastrous. If the plaintiffs could complain of their own want of information only, and not of an omission to give notice to other stockholders, the question might arise whether their objection, made at the meeting, to the sufficiency of the notice, would avail, or whether that objection would be obviated by their attending the meeting with all the information a sufficient notice would have given them. But there seems to be no good reason for a construction of the statute that would limit the plaintiff's right of objection to the sufficiency of the notice as a means of giving themselves information. If a written notice had been given to each of them, stating that the meeting was called for the purpose of increasing the capital from $4,800,000 to $6,000,000, it might be claimed that they had all the information on the subject of increase that the legislature intended they should have. But, if the same information were withheld from other stockholders, the plaintiffs might be damaged by a vote to increase the capital, which could not have been passed on due notice of a meeting specifically called for the purpose. Each stockholder was entitled to the protection that would be furnished by such an assembly. This is the natural meaning of the statute, and the legislative purpose is proved by competent evidence. Each stockholder was entitled to the protection that would be furnished by such a notice as would inform those who read it of a meeting called for the purpose of increasing the capital. A proposed increase, which would be carried against the resistance of the voters alone, might be defeated by the arguments and votes of others, if all were notified of the business to be done. If the passenger and freight stations in Concord were burned, the complaint of a single stockholder that a fire bell was not rung would not be answered by proof that he had all the knowledge any alarm would have given him, and was present, and endeavored to save the property from destruction. If the

presence of all the stockholders at the October meeting was all the protection the plaintiff would have received from a meeting specially called, and all they are entitled to, the defense fails, because it does not appear that all the stockholders were present.

3. A stock vote was not taken, and does not appear to have been called for. It would seem that this objection is not seasonable, because not made at the meeting, when it could have been obviated. As the injunction against the performance is sustained for insufficiency of notice, it may not be necessary to decide all the questions raised in the argument; but of some not adverted to a decision may be needed. The necessity of an increase of capital authorized by law is a question left to the judgment of the corporation. A stockholder does not lcse his right to vote by being a director. The directors were not disqualified to vote as stockholders for the increase.

4. Under the partnership contract, the Concord & Montreal, at "any meeting called for the purpose, may increase * its cap

ital stock and the number of shares therein, but the capital stock, when so increased, shall not exceed the amount authorized by law." Gen. Laws, c. 148, § 6. Under the same contract, it may increase its capital to the amount requisite to buy the 12 roads named in section 10 of chapter 5 of the act of 1889, with a limitation of the dividends payable on the capital thus increased, and a compliance with all the requirements of that chapter. Chapter 3, Laws 1891, authorizes the Concord & Montreal to "increase its capital not exceeding $3,000,000, to be used from time to time for the purpose of aiding an extension of the Whitefield & Jefferson Railroad, and of such other branches or leased roads of the Concord & Montreal Railroad as it is or may be authorized to construct, and for the purpose of providing additional depots, yards, and other terminal facilities at Nashua, Manchester, Portsmouth, Concord, Laconia, Lake Village, and elsewhere on the lines of its railroad, of providing additional tracks, wharves, and coal and other storage facilities at tide-water in Portsmouth, of changing the line and improving the terminal facilities at Groveton village, and for providing additional equipment for its railroad, and for the improvement of its railroad and of other property owned or leased by it." The plaintiffs contend that for some of the purposes named in the act of 1891 and in the directors' report and recommendation there can be no lawful outlay of capital, old or new, without the unanimous consent of the stockholders, and that for such purposes the capital cannot be increased. Power to increase the capital for the purposes named in the act of 1889 is a part of the partnership contract, but the act of 1891 was passed after the contract was made. Without unanimous consent, the contract could not be altered by a statute permitting the company to build or buy a road not within the scope of the part

nership articles. The stockholders' agreement that the company may increase the capital to an amount authorized by law (Gen. Laws, c. 148, § 6) gives authority to enlarge, not the sphere of business for which the company was formed, but the capital employed in that business. A statute giving the state's consent to a purchase by the Concord & Montreal of the Boston & Maine road, or the plant of the Amoskeag Manufacturing Company, would not alter the partnership contract in which a corporate authority to make those purchases was not included.

The case does not state all the facts necessary to be known in a consideration of all the items of proposed expenditure of new capital to which the plaintiff's object. The increase was voted "for the purpose of providing for expenditures authorized by law." The amount of increase corresponds with the directors' recommendation; and the natural inference is that the company intended to expend the new capital for the 11 purposes recommended by the directors. The first item is, "Extension of Whitefield & Jefferson Railroad to Berlin." The report states that this piece of road "is now in process of construction, and will be ready for business about July 1, 1892." If the facts are what this statement seems to indicate, the objection to this item is not seasonably made. Chamberlain v. Lyndeborough, 64 N. H. 563, 14 Atl. 865; Hoyt v. Latham, 143 U. S. 553, 12 Sup. Ct. 568. The second item is, "To acquire the Profile & Franconia Notch Railroad property." This is one of the 12 roads named in section 10 of the act of 1889. The third item is, "One-half in the Franklin & Tilton Railroad, built by this corporation and the Boston & Maine, * * * and now substantially completed." This is a branch of the Concord & Montreal, and if it is substantially completed it is too late to object to the invest

The fourth item is the completion and improvement of "the Lake Shore Railroad, owned by the corporation." The completion and improvement of the Lake Shore, like the completion and improvement of the Montreal and the Concord, is within the scope of the contract. The facts relating to the fifth and sixth items are not stated in the case. To the other five items it does not appear that any valid objection can be made. If another vote is passed to increase the capital, it may take a form that will not require further consideration of the details of the directors' report. A vote like that of October, "for

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expenditures authorized by law," might be valid even if the plaintiffs should obtain an injunction against some investments which the company proposed to make. The company's scheme might embrace an amount of lawful outlays that would absorb all the new capital. Decree for plaintiff.

CHASE, J., did not sit; the others concur

red.

38 A.-9

CRANE v. JUDIK et ux. (Court of Appeals of Maryland. June 22, 1897.) SPECIFIC PERFORMANCE-FALSE REPRESENTATIONS. Specific performance will not be decreed against a purchaser at auction of a ground rent, the statement in the advertisement and by the auctioneer that it was a well-secured rent being false.

Appeal from circuit court of Baltimore city. Bill by J. Henry Judik and wife against Joseph Crane. Decree for complainants. Defendant appeals. Reversed.

Argued before MCSHERRY, C. J., and BRYAN, FOWLER, PAGE, BOYD, BRISCOE, and RUSSUM, JJ.

Wm. A. Fisher and R. H. Bernard & Son, for appellant. Harry M. Benzinger and James S. Calwell, for appellees.

RUSSUM, J. The bill of complaint in this case was filed in the circuit court for Baltimore city, to enforce the specific performance of a contract made by the appellant with the appellees, to buy an original ground rent, of $140 per annum, issuing out of a lot No. 148 Forrest street, near Gay, in said city. The bill was demurred to, and the court below sustained the demurrer, and, on appeal to this court, the cause was remanded, without either affirming or reversing the decree, under section 36 of article 5 of the Code, to enable the complainants to amend their bill, and to prove certain facts which are necessary to a recovery, and which this court supposed to exist. Judik v. Crane, 81 Md. 610, 32 Atl. 276. It is necessary to a clear understanding of the case that we should repeat the particulars of the title. In August, 1871, Edmund Law Rogers and wife leased a quadrangular lot of ground on Forrest street to John M. Brock, for 99 years, renewable forever, at an annual rent of $240. Brock made a mistake, and, instead of running his second and fourth lines perpendicular to Forrest street, ran them oblique, and parallel with Lowe street, which crossed Forrest street a short distance southwesterly; and he entered upon and improved the lot thus bounded. The lot thus occupied by Brock takes in, on one side, a small triangle not embraced in the lease, and omits, on the other side, a small triangle which was included in the lease. Brock mortgaged the leasehold according to the lines in the lease, and afterwards, in July, 1872, executed a surrender of his lease to the reversioners, and received from them, on the same day, a new lease, describing, by metes and bounds, the lot actually occupied by him. The mortgage of the leasehold was foreclosed, and the property conveyed by the description in the first lease. In May, 1894, the reversioners conveyed to David S. Collett the rent and reversion reserved in the second lease, and he conveyed them to J. Henry Judik, one of the complainants. Since the auction sale of the

ground rent to the appellant, Judik and wife have released $100 of the ground rent, so that the amount now payable is $140. In the opinion remanding the cause (81 Md. 618, 32 Atl. 277) this court said: "Brock's surrender of his lease, and the acceptance of another in its place, could have no effect against the mortgagee, or any tenant holding under the title derived from him. Consequently, the second lease and the reservation of rent contained in it would be inoperative to bind the successive assignees of the original leasehold. The court therefore properly sustained the demurrer. But there are other facts very strongly implied, although not stated in the bill. From the known and ordinary course of business, we think it highly probable-in fact, almost certain-that the assignees of the original leasehold, who can claim title only under the mortgage sale, have entered upon and taken possession of the lot inclosed and improved by Brock, and have paid the reversioners the rent reserved. If so, he has recognized them as tenants, and they have acknowledged him as landlord." It was then said that "the title is perfectly good, if the facts are as we suppose them to be," and the case was therefore remanded, that the complainants might allege and prove them to exist.

The first question, therefore, is, have the complainants furnished such proof of the existence of these facts as will entitle them to a decree? We think not. Of the witnesses who have testified in the cause, Mr. Rogers, Mr. Collett, and Mr. Judik are the only persons who could state anything concerning these facts. After stating that the inclosure coincided with the description in the second lease, Mr. Rogers testified that some of the older tenants paid him rent, but he could not say whether any of the latter tenants had recognized him, or when the last collected any rent, but he thought that the Socrates Building Association was the last to pay any, and it was very remiss in its payments. It appears that during his ownership of the reversion there were two other succeeding holders of the record title, as originally described, prior to Overton. Mr. Rogers admits that, some time before the sale of the reversion to Collett, the tenants had repudiated him, but he did not know "what kind of repudiation it was." When we examine the testimony of Mr. David S. Collett and Mr. J. Henry Judik, it is discovered that neither of them testifies that the assignees of the original leasehold, who claim title under the mortgage, had taken possession of the lot inclosed by Brock, and paid the rent reserved to the reversioners. Mr. Collett's testimony indicates that he felt it to be his duty to evade every question the answer to which would have afforded an opportunity for a truthful and intelligible account of the transactions relating to the property, except in his examination in chief, in which the questions were broadly suggestive of the desired answer, and is altogether too

vague and indefinite to be relied on. Mr. Judik's evidence simply establishes the fact that it is possible for a gentleman to have a suit pending for the specific performance of a contract without knowing a single fact relating to it or its subject-matter that would be to the benefit or advantage either of himself or the opposite party. The complainants have therefore failed to fulfill the fair expectations of this court in remanding the cause, by furnishing the proof necessary to establish their title.

eer.

But was this contract, in all respects, full, fair, and honest in the beginning, and such that may be fairly and conscientiously required to be performed? The ground rent which was sold to appellant was "an old, original, irredeemable, and well-secured rent, for one hundred and forty dollars," on 418 Forrest street, near Gay. This was the statement of the advertisement, as well as of the auctionThe meaning of this language is that the ground rent offered for sale was well secured and irredeemable, and that it was created for the sum of $140, and had been in existence many years. The proof is that it was neither an old nor an original rent for that sum, but a rent for two hundred and forty dollars, to be reduced to one hundred and forty dollars. But assuming, ex gratia argumenti, that this makes no difference to the purchaser, was it true that it was well secured? In addition to the fact that no such ground rent exists on the property as inclosed and occupied by Brock, the preponderance of the testimony shows conclusively that it was not a well-secured rent. And a review of the whole case shows very plainly the acquisition of the leasehold estate, subject to a rent of $240, which had really been abandoned, with several years' rent in arrear, and which was about to be sold for taxes; the pretended consideration of $1,600 in the agreement between Judik and Overton; the allegation that all the tenants, down to the time the appellant purchased the property, had paid the ground rent of $240 to Rogers; the false statement that the Globe Bond Company paid Overton $2,500 for his interest in the property, -are only masks assumed to consummate the purpose to preserve the irredeemable feature of this rent, in order that they who controlled it might be able to find a purchaser, by representing it as an old, original, irredeemable, and well-secured rent. In making the sale of a ground rent of $140, under the circumstances of this case, whether fraudulently or innocently, a false impression was conveyed, and made the basis of the contract, and the extraordinary jurisdiction of a court of equity ought not to be exercised by coercing a specific performance. Carberry v. Tannehill, 1 Har. & J. 224; Gurley v. Hiteshue, 5 Gill, 223; Keating v. Price, 58 Md. 535, 536. The decree of the court below will therefore be reversed, with costs above and below, and bill dismissed.