
    JOHN H. MORGAN AND FRANK B. SMITH, RECEIVERS OF THE MARYLAND STORAGE COMPANY vs. FAIRFAX S. LANDSTREET.
    
      Corporations—Subscriber to Capital Stock Not Liable Until Whole Amount Is Taken—Waiver of This Condition.
    
    When the number of shares and the amount of the capital' stock of a corporation are fixed by its charter, a subscriber to the shares of stock is not liable on his subscription until the whole number- of sLares have been unconditionally subscribed.
    A subscriber to the- original capital stock of a corporation does not.waive the defence that all of the stock was not taken by making his. subscription at a time when he knew that the corporation was already engaged in business in a small way without having all of its stock subscribed for, but when a larger business was then contemplated, and when, although he was elected a director, he never qualified as such, or attended a meeting of the directors or stockholders, and did not participate in the business carried on by the corporation.
    
      Decided January 20th, 1909.
    
    Appeal from the Circuit Court for Baltimore County (Bi;kke, C. J.).
    
      Plaintiffs’ 1st Prayer.—The plaintiffs pray the Court to instruct the jury that since it appears from the uncontradicted evidence in this cause that the "Maryland Storage Company of Baltimore City, on June 10, 1907, and for nearly a year previous thereto, was engaged, to the knowledge of the defendant, in carrying on an active warehouse business, and had incurred.and was incurring liabilities; and that the said company’s capital stock, to the knowledge, of the defendant, had not been fully taken or subscribed for, it therefore follows that the fact that all of said capital stock was never taken is no defense to this action; and if the jury find from the evidence (1) that the defendant signed the subscription agreement dated June 10, 1907, and offered in evidence, to $30,000 of said company’s capital stock;,(2) that personal demand was made by said company upon the defendant for the payment of his said subscription more than ninety days before the institution of this suit; (3) that the defendant did not pay the same, and (4) that the plaintiffs are the receivers for said company, that in this event the plaintiffs are entitled to recover against the defendant to the extent of his said subscription. {Rejected.)
    
    
      Plaintiffs’ 2nd Prayer.—That, since it appears from the uncontradicted evidence in this cause that the Maryland Storage Company was incorporated on or. about ^November 18, 1904, with an authorized capital stock of $150,000, divided into 3,000 shares of the par value of $50 each; that the company organized by the election of directors and officers on or about December 12, 1904, that thereafter, in July, 1906, the said company’s capital stock was duly increased to $250,000, divided into 5,000 shares of the par value of $50 each, and that the defendant’s subscription (if the jury find said subscription) was to said increased capital stock, it therefore follows that the fact that all of said capital stock was never subscribed is no defense to this action, and that if the jury find from the evidence (1) that the defendant signed the subscription agreement dated June 10, 190Y, and offered in evidence, to $30,000 of said company’s capital stock; (2) that personal demand was made by said company upon the defendant for the payment of his said subscription more- than ninety days before the institution of this suit; (3) that the defendant did not pay the same, and (4) that the plaintiffs are the receivers for said- company, that in this event the plaintiffs are entitled to recover against the defendant to the extent of his said subscription. (Rejected.)
    
    
      Plaintiffs’ 3rd Prayer.—That if the jury find from the evidence that the defendant, on or about June 10, 190Y, signed the written subscription offered in evidence, to $30,000 of the capital stock of the Maryland Storage Company, and that at the time of making said subscription the said company, to the knowledge of the defendant, had been engaged in an active warehouse business since on or about July 1, 1906, and had incurred and was incurring liabilities, and that the defendant also knew that the company’s capital stock had not been fully taken and subscribed for, that in this event the jury are-instructed that the fact that all of said capital stock was never taken is no defense to this action, but that the plaintiffs are entitled to recover against the defendant to the extent of his said subscription, provided the jury further find from the evidence that personal demand was made by said company upon the defendant for the payment of his said subscription more than ninety days before the institution of this suit, that the defendant did not pay the same, and that the plaintiffs-are the receivers for said company. (Rejected. )
    
    
      Plaintiffs’ Jf-th Prayer.—That if the jury find from the evidence that the Maryland Storage Company was incorporated on or about November 18, 1904; that the plaintiffs are the receivers for said company; that the defendant on or about June 10, 1907, signed the written subscription offered in evidence, to $30,000 of the said company’s capital stock, and that at the time of making such subscription the defendant knew: (1) that the said company on or about July 1, 1906, had commenced and had since been prosecuting an active warehouse business under the contract with the Western Maryland Railroad dated June 12, 1906, and offered in evidence, of the contents of which contract the defendant had knowledge; (2) that the company was about to begin the construction of a warehouse upon its property at York and Johnson Streets; and (3) that the capital stock of the company had not been fully taken and subscribed for; and if the jury further find from the evidence that upon or after making his said subscription the defendant consented to become a director in said company, and acquiesced in his election as such director, knew that the company was continuing to carry on its business and was incurring liabilities; learned that it bad contracted for and started to erect a warehouse upon its property; advised the company’s Vice-President and General Manager with regard thereto; visited the said property in the fall'of 1907, and examined and approved the work there being done upon the warehouse; consented to assist said company in raising funds for the completion of said warehouse, and about August or September, 1907, promised to make payments on account of his said subscription; and if the jury further find from the evidence that at the time of each and all of the transactions mentioned above (if the same arc*, found by the jury), the defendant new that the said company’s capita] stock was not fully subscribed for, that in this event the jury are instructed that the fact that the entire capital stock of said company was never subscribed is no defense in this cause, and the plaintiffs are entitled to recover against the defendant to the extent of his said subscription; provided the jury find from the evidence that personal demand was made by said company upon the defendant for the payment of his said subscription more than ninety days before the institution of this suit, and that the defendant did not pay the same. (Rejected.)
    
    
      Plaintiffs’ 5th Prayer.—That if the jury find from the evidence that the plaintiffs are the receivers of the Maryland Storage Company; that the -defendant signed the subscription agreement dated June 10, 1907, offered in evidence, and that personal demand was made upon the defendant for the payment of his said subscription more than ninety days prior to the institution of this suit, then the verdict of the jury must be for the plaintiffs, even though the jury also find that the whole authorized capital stock of the Maryland Storage Company was not subscribed; provided the jury further find that the defendant knew.that all of said capital stock was not subscribed for, and with such knowledge participated in the affairs of the company in a way which could only properly be done upon the assumption that the subscribers intended to ■proceed with the stock partially subscribed. (Rejected.)
    
    
      Defendant’s 2nd Prayer.—The Court instructs the jury that if they find from the evidence that the stock of the Maryland Storage Company authorized by its charter, to wit: Three thousand shares, at fifty dollars a share, was never fully subscribed, then, even though they find that the defendant signed and delivered the subscription paper offered in evidence, as stated by witnesses for the plaintiff, their verdict must be for the defendant, unless they further find that after such subscription and with knowledge that said capital stock had not been fully subscribed the defendant participated in the conduct of the business of the said company in such a way as to indicate that he consented to and acquiesced in the company’s proceeding in its business before the whole amount of said stock was subscribed, and the jury are further instructed that even if they find that the defendant, after knowledge that said stock was not fully subscribed, consented to become a director., but did not act as such, and promised to pay part of his subscription, such facts do not amount to such.participation in the business of the company as would make the defendant liable under such subscription. (Rejected.)
    
    
      Defendant’s 3rd Prayer.—And further prays the Court to instruct the jury that so much of the second alleged amendment to the charter of the Maryland Storage Company, dated July 20th, 1906, as undertakes to increase the number of authorized directors of said company from nine to twelve is void, and conferred no power upon said company to select or have more than nine directors, and it being undisputed that said company had nine other legal directors at the time of the attempted election of defendant as one more, and that defendant never acted as such, then defendant never became a director of said company, either in law or fact. (Rejected.)
    
    The cause was argued before Boyd, C. J., Briscoe, Pearce, Schmucker, Thomas, Worthington and Hehry, JJ.
    
      Joseph C. France and Stuart S. Janney (with whom were A. C. Ritchie and Gibson & Smith on the brief), for the appellants.
    1. The defense depended upon by the appellee is based upon the well-known principle that when the charter of a corporation fixes the amount of its capital, the law implies a condition in subscription to its formative stock, that the amount fixed in the charter shall be raised before the corporation creates any liabilities, and that a subscriber may depend upon a violation of the condition as a defense to an action on the subscription agreement. The cases where this Court has recognized the defense and defined its application are as follows: Hughes v. Antietam Manufacturing Co., 34 Md. 332; Hager v. Cleveland, 36 Md. 476-491; Fiery v. Emmert, 36 Md. 474; Garling v. Baechtel, 41 Md. 305; Stillman v. Dougherty, 44 Md. 384; Morrison v. Dorsey, 48 Md. 461; Musgrave v. Morrison, 54 Md. 164; Gettysburg National Bank v. Brown, 95 Md. 367.
    The recognition of this defense is a relaxation for the protection of investors of the well-known doctrine that the stockholders’ liability in an insolvent corporation constitutes 'a trust fund for the creditors. The equities of the creditors being generally- considered superior to those of stockholders, Avho take their chance of large profits and must be held to have assumed a corresponding risk of loss. Cook, Vol. 1, sec. 166.
    The Courts, therefore, are careful to confine the privileges, of the defense to deserving defendants, and will not extend them to those whose rights have not been invaded by the premature start of the corporation, and who are merely seeking' to dodge the stockholders’ liability. “The defense was intended to protect subscribers who in good faith objected to the organization of a company when its capital stock which was necessary to the enterprise had not in fact been taken, but it was never intended and Courts will never permit it to be used as an instrument of fraud.” Morrison v. Dorsey, 48 Md. 461.
    It is a mere presumption that the condition of full subscription exists, founded upon the probable understanding of the parties. The matter involves no question of public policy and the Courts will never presume the presence of the condition when the facts show it could not have been the mutual understanding. For example, the whole theory being founded upon a presumption that the subscriber depended upon the corporation raising the amount of stock fixed in the charter or subscription agreement. The defense has no application where the amount of capital is not fixed therein. Kennebec & Portland R. R. Co. v. Jarvis, 34 Me. 360; Warwick R. R. Co. v. Cody, 11 R. I. 131; Hambleton Co. v. Rice, 1 Barb. Sup. Ct. (N. Y.) 157-166; Lynch v. E. I. & M. R. Co., 57 Wis. 432; Hager v. Cleveland, 36 Md. 491.
    Nor does it arise where the charter expressly authorizes, the corporation to start before all of the stock is subscribed. Morawetz, Private Corp., Vol. 1, sec. 138.
    By analogy and in reason it also follows that if the corporation is already a going concern at the time of the subscriplion and has already created and is continuing to create liabilities to the knowledge of the subscriber, and the subscriber also knows that its stock fixed in its charter is not fully subscribed, the presumption cannot arise “that the amount fixed in the charter shall be raised before the corporation creates any liabilities.” That would be a foolish presumption, for the contrary is already the fact.
    This Court has in a dictum already expressed itself on the point, in the case of Musgrave v. Morrison, which was a similar suit to the one at bar. It was here proved that the defendant knew at the time of his subscription that the corporation was engaged in active business, and that its stock was not fully subscribed, and the Court said: “Under these circumstances it might well be argued that his subscription was not made upon the condition that the company was not to organize until the whole number of shares had been taken.” Musgrave v. Morrison, 54 M.d. 164.
    It is true that the Court did not rest its decision upon that ground. As there was conclusive evidence of an estoppel, even if the condition had ever existed, it was not necessary to do so. It is for this reason that the defense is never allowed where the subscription is to increased stock and not original stock. Gettysburg Bank v. Brown, 95 Md. 386-7. Tor when increased stock is in question the corporation must have been a going concern before the subscription, and the presumption does not arise. Morawetz, Private Corpr., Vol. 1, sec. 142.
    In the case at bar at the time of the appellee’s subscription, the Maryland Storage Company had been for a year engaged in active business, with receipts of $1,500 a month, under a-contract negotiated by the appellee binding it to pay a rental of $500 a month and to construct a warehouse at York and -Johnson Streets. The appellee admits that he was perfectly familiar with that fact, and with all the business conducted by the company. He also admits that he knew at the time that the company’s capital stock was not all subscribed. His fi.rst connection with the company as subscriber (unlike the case of the subscriber in Bank v. Brown), took place at a time when the company was, to his knowledge, actually engaged in business.
    Under such circumstances it approaches the frivolous to say that “it is presumed that capital, to the amount fixed in the charter, would be raised before the corporation created any liabilities.” He knew such liabilities already existed and that the capital was not raised. The only case where this point is directly treated is Arkadelphia Mills v. Trimble, 54 Ark. 519. See also Nutter v. R. R. Co., 72 Mass. 85.
    2. The evidence was legally sufficient to show a waiver of any defense of partial subscription.
    Landstreet did not actually sign the subscription until June 10, 1907, But he personally bound himself to subscribe in February, 1905, and his interest in the company and participation in its affairs may be regarded in the light of that fact.
    What are the acts showing this consent and acquiescence?
    As a prospective subscriber, and with Timanus’ letter before him, saying he was delaying financing the company until an agreement with the Western Maryland Railroad Company wag signed, he negotiated the agreement of June 12, 1906, which bound the company to a monthly rental of $500 and to' an active business requiring capital, and to the construction of a warehouse. It is moderate to say this was an acquiescence in the company’s proceeding with its business. He was starting it, and he knew its condition.
    When he voluntarily subscribed, he knew that the company was already in business and under large liabilities. This was a very practical acquiescence in the start that he knew had been made.
    When talking to Brady, he advised him to go along with the contract as it then existed, and not to undertake any further enterprise. This was an acquiescence in the liabilities that had been incurred, with which he was familiar, and in a continuance of them.
    When he subscribed, his understanding was that the company was to borrow money for its building on his subscription. If he regarded his subscription as conditional, this was a great wrong upon the proposed lender, and if he did not so regard it, the liability sought to be enforced is no greater than what he intended to undertake. This understanding is in itself clear evidence of his consent that the company should borrow the money, which is to create liabilities.
    ITe visited the building when it was under way and congratulated President Timanus on the showing. This was an acquiescence in what had been done.
    He then promised to send $5,000 on account of his subscription. This was a very encouraging acquiescence.
    He accepted an election as director. Will directors bé allowed to set up their omission to attend meetings as a defense to their subscription agreement?
    He agreed to intercede with the Western Maryland Kail,road Company to have them lend money to the company to enable it to complete the building.
    He then showed his consent that the company should continue to proceed with its business.
    During all of this time the appellee knew that the corporation’s capital was only partially subscribed.
    It is submitted that each of the above segregated facts would be legally sufficient to indicate his consent to the company's operations. Their accumulated force is sufficient to show not only an acquiescence in what was done, but that he was one of the moving spirits in the enterprise. And it is not strange that when called upon to pay his money he never thought of the possibility of making the defense now insisted upon, hut set up an alleged private understanding with Brady. It is respectfully submitted that the lower Court erred in ruling as a mailer of law that the defendant had not waived the defense of partial subscription.
    3. The appellee is estopped from setting up the defense of partial subscription.
    At the time of signing the subscription agreement the appellee knew that the corporation was in a position where it would become financially responsible upon its failure to carry out the terms of the agreement of June 16, to comply with which it had given or was under obligation to give a heavy bond. He knew that it was employing the funds of other stockholders in doing business under that agreement, and that it would employ more of these funds of other stockholders if it carried out such agreement, or would defraud creditors if it did not use such money. He knew that its stock was not fully subscribed, and put his name to the unconditional subscription for the express purpose of getting others to usbscribe and pay, and his subscription was used as 'he had authorized, for the purpose of inducing others to subscribe, and also to pay their subscriptions.
    His subscription was used as the basis for the action of the board in contracting for the construction of the warehouse by the Ho-pkins-Barnett Company, and therefore on the faith of it their money was spent in labor and materials, and while two-thirds of his subscription would have paid the company’s indebtedness, he declined to pay.
    To allow this defense in a case of this character will not only open the way to future frauds, but a present and very oppressive hardship will have been visited upon the other subscribers who paid their money on the faith of these acts, and oh creditors who trusted the corporation.
    •''' This Court, in treating of verbal agreements and private understandings in connection with stock subscriptions, has said: “The defendant putting upon paper an unconditional promise to -pay may have induced others not only to- subscribe, but to pay, and his attempts now to shield himself by his private understanding may be a fraud upon others who have thus been induced to subscribe and pay.” Scarlett v. Academy of Music, 46 Md. 122.
    In the case at bar the elements are proved which in the Academy of Music Case are suppositions. This appellee did subscribe unconditionally, for the purpose of inducing others to subscribe and pay. By so doing, others were thereby induced to subscribe and pay. Having stood in position to take the profits if the enterprise was successful, he would now avoid all liability upon its failure, and that by a legal fiction which he never thought of, but which skillful counsel have evolved for his protection.
    The receivers in this case represent the stockholders, as well as the creditors of the Maryland Storage Company, and it is respectfully submitted that the appellee will not be permitted to commit this grievous wrong upon them and then step aside and let the weight of his actions rest upon other shoulders, but he will be held to be estopped by his actions from setting up the defense of partial subscription.
    Counsel for the appellee argued below that the condition which is implied in a contract of subscription is not as heretofore believed that the corporation shall not embark in its business before its stock is fully subscribed, but quite different from that, to wit, that the subscriber shall not be called upon to pay his money until the full amount of capital stock is taken. That he can only be deprived of this defense by the actual casting of votes in favor of the company’s business, or the creation of its liabilities, or by participation in the corporate affairs within the corporation, meaning thereby as an officer or director and m such capacity.
    The appellants submit that even measured by the erroneous standard thus contended for, the liability of the appellee in this case would be for the jury, there being evidence legally sufficient to show the 'character of participation mentioned. But the argument is fallacious and the fallacy consists in mistaking the result of the condition when implied .and not waived for the condition itself.
    A corporation with its capital fixed in its charter is not authorized to incur liabilities in the course of its business until all of its stock is taken, as the subscribers are presumed to have subscribed with reference to the amount named in 1he charter as a minimum. To violate this principle is to violate an implied condition of the subscription, and the result is that the subscriber is not liable for calls unless he has consented to or acquiesced in the corporation’s proceeding with its business. Morawetz, Private Corporations, sec. 149; Gettysburg Nat. Bank v. Brown, 95 Md. 386.
    
      The converse of the proposition has frequently been ruled upon and demonstrates this. Thus it is clear that if a corporation is authorized by its charter to begin the prosecution of its business before all of its capital stock is taken, the subscribers cannot have subscribed with reference to any particular amount of capital, and the result is that they will be liable to be called upon to contribute to the extent -of their undertakings. Morawetz, Private Corp., sec. 138.
    This Court has made' the true condition clear in the last opinion heretofore quoted: “It is not to be supposed that a reasonably prudent person will invest in a corporation which is not to be supplied with sufficient capital with which to prosecute its affairs, and therefore it is that a presumption arises that the amount fixed in the charter shall be raised before the corporation creates any liabilities.”
    And, again, the waiver of the condition may be shown by acts indicating that the subscriber has consented to the company’s proceeding with its business before all of its stock is subscribed. Gettysburg Nat'l Bank v. Brown, 95 Md. 386.
    That the condition may be waived by acts or declarations either prior or subsequent to organization has also been decided in this State. Fiery v. Emmert, 36 Md. 474.
    The same contention here made was made in a Minnesota case, and the Court’s treatment of it is apposite and enlightening. The Court said: “A subscriber may waive the defense that the full capital stock of the corporation has not been subscribed. This waiver may be either express, or implied from the acts or declarations of the subscribers. The appellant claims that the waiver must amount to an estoppel; the respondent, .that acts or declarations of a subscriber showing an intent not to object that the full stock has not been subscribed are sufficient, although a technical estoppel may not be shown. Some of the eases cited use the word ‘waived,’ others the word ‘estopped.’ An estoppel in pais, as the word is usually employed and applied, includes the fact that, the party claiming the estoppel relied upon and acted upon the acts or declarations, so that he will be prejudiced if the other party is not held to them. We do not find that the cases referred to using the word ‘estopped,’ and holding that the subscriber was or was not estopped, use the word in this sense. So in Hager v. Cleveland, 36 Md. 476; Garling v. Baechtel, 41 Md. 305 (and others cited), the Courts, in stating what will estop the subscriber, or prevent his being heard to make the objection, refer only to his acts, and do not, include the fact that they did influence others. If a technical estoppel were required to prevent a subscriber withdrawing his subscription on the ground that Ihe full stock has not been subscidbed, much fraud might be permitted * * *
    The safer rule is that if his acts are of such a character that either the corporation or subscribers may have been induced by them to act, and will be prejudiced if he be permitted to withdraw, he shall be held to have waived, or be estopped to assert the defense.” Masonic Temple v. Channel, 43 Minn. 353.
    The results of the adoption of the theory of the appellee would be disastrous. It would create a crowd of dormant subscribers, who might be held out to the world as such; credit might and would be procured on their names; they might encourage and advise the officers in the conduct of 1he corporate affairs, and, carefully keeping the full amount of stock from being taken, and being also careful not to have any official connection with the corporate management, they would be in position to take up the profits accruing to them as stockholders in the event of success, and, in the event of failure, snap their fingers at stockholders who subscribed on the faith of their subscription and who paid their money when called upon, and at creditors, who relied upon the standing their subscriptions gave the company and gave it credit.
    
      Benjamin A. Richmond and Edgar H. Gans (with whom was J. F. C. Talbott on the brief), for the appellee.
    There was nothing in the nature or kind of business of the storage company, or in its situation, which would deprive the appellee of the benefit of the condition of his subscription. Its certificate of incorporation states that it is formed for the purpose of carrying on a forwarding and warehousing business in this State, and for the construction, owning, chartering or leasing of steamboats, wharves, docks, roads, vehicles or other property required for the purpose of such forwarding and warehousing business, and for the buying, selling, mortgaging, leasing, improving, disj>osing of, or otherwise dealing in lands in this State, etc. These powers are very broad, and contemplated the doing of several things, some of which might require but little capital, aud some of which would require a large amount of capital, depending upon the will of the company. In this case it appears that the storage company from the very start contemplated expending its whole capital in these enterprises, and not merely a part of it. It began doing some business on July 1, 1906, at Brown’s wharf, a place which it had leased from the Western Maryland Railroad Company on June 12, 1906. But at that time it contemplated the expenditure of a large amount, if not all, of the money realized from its whole capital stock, for by the second paragraph of this lease, it agreed to construct a modern warehouse for the storage of merchandise and to commence the same forthwith, and to endeavor to complete the same on or before the first day of January, 1907. This, then, was the main object and purpose of its incorporation, and especially of its purpose to get together a capital of $150,000. It Required little or nothing in the way of capital to merely rent Brown’s wharf and carry on a little 'storage business there, but it required a large capital to constnrct this warehouse.
    When, therefore, having in the meantime done nothing toward this building, Mr. Brady, on behalf of the storage 'company, came to appellee in June, 1907, and got the subscription now sued on, there was nothing in the kind of business contemplated by the company which would rob this subscription of the rule of the condition therein which has been applied by this Court in Hughes’ Case, 34 Md.; Cleveland’s Case, 36 Md.; Garling’s Case, 41 Md., or the Gettysburg 
      
      Bank Case, in 95 Md., or which has been applied in the many other cases. Some of these were corporations for the putting up of buildings, such as hotels, warehouses; some for the building of railroads, and so on. Talcing the object and purpose of the storage company as manifested by its board of directors, the principal one of which was the erection of a costly building, there is nothing to distinguish this corporation in kind from the other corporations in Maryland and elsewhere, to which the rule has been applied.
    In Musgrave’s Case, 54 Md. 164, although Judge Ronmsosr says that the application of the rule of implied condition in the subscription might not extend to a building association the same as it would to other corporations, yet he expressly fails and refuses to place his decision of the ease in hand on any such distinction, but proceeds to place it on the ground of waiver or estoppel, thus finally clearly applying the rule to the case in hand, notwithstanding it was a building association. Eor if he had not applied the rule of condition in the subscription to the case in hand, it would have been wholly unnecessary and improper to go ahead and decide that the condition in that case had been waived. There would have been no necessity to resort to the question of estoppel if the rule did not apply to a building association.
    Judge Robixsox cites no authority for any such distinction, and after a diligent search we have been unable to find any case making any such distinction. In none of the cases Is the reason of the rule based upon the kind of corporation, provided it is a stock corporation calling for the expenditui-e of money to a certain amount under its charter.. The reason of the rule is to comply with the mandate of justice, and to give effect to the obvious intention of parties. It is- based upon the idea that a man might be willing to embark his money in a certain proportion along with others, provided they were putting up money in like proportions to a total amount, but should not in equity and justice be required to put up his money by the corporation until its affairs had been fully financed according to the amount stated in its charter, so as to insure the success of the enterprise. If this is the reason of the rule, it is impossible to see on what ground a distinction can be made between corporations in the application of the rule, no matter what is the object of the enterprise, if both authorize and require the expenditure of money. If there is anything so peculiar in the financing of a building association as to abrogate the rule so far as building associations are concerned, it has' never been so decided in Maryland. The Court in Musgrave’s .Case did not so decide, hut placed its decision upon an entirely different ground, which decision could not have been made without a full recognition of the applicability of the rule to even a building association.
    Before defendant’s subscription, all that the company had done was merely preliminary to its main ohj ect and purpose. It had leased Brown’s wharf, but this entailed but little financial responsibility and the expenditure of practically no capital at all. It had bought a lot at York Street, but had paid for it with mortgages on the lot, and the lot was presumably worth the mortgages. It went along in this preliminary way from July 1, 1906, to the 10th day of June, 1907, when the subscription of appellee was taken. After July 1, 1906, under its lease with the Western Maryland, it did a small business as warehouseman at Brown’s wharf. The taking of the lease did not impose any financial hardship upon the comqDany. The company was put in debt' by the building. The giving of the mortgage did not embarrass the company; it was the beginning of the building, in July, 1907, that was the cause of the failure of the storage company.
    When, therefore, Mr. Brady went to appellee, June 10, 1907, to get his $30,000 subscription, there was nothing in the kind or nature of the company or in the character of its business or its business situation which in any way whatever deprived appellee of the benefit of the rule, that his subscription was based upon the implied condition that he was not to be liable at all, unless all the capital stock was subscribed. On the contrary, every condition and reason was present in the situation to entitle him to the benefit of this rule. The company had merely perfected a preliminary organization, but not a full organization. It had for some months been doing a small business preliminary to the main business it intended to do, but had not commenced the main business. It now desired its capital stock subscribed in large amounts to fully organize the company and proceed with its main business. It was about to involve its stockholders in large financial obligations. It was the same as though the company was about to newly organize for its main and most expensive purposes. If, therefore, there ever wa.s a time or a situation which entitled a subscribing stockholder to the benefit of the rule of this implied condition it was this time and this situation.
    We, therefore, submit that there is nothing in the contention that this corporation at the time it procured appellee’s subscription was not the kind of corporation, or was not doing the kind of business, or was not in the soil of situation which would entitle a stockholder to the benefit of the rule; but that, on the contrary, under the circumstances of this case, every ground and reason allowed by the authorities in Maryland and elsewhere for the application of the rule to appellee’s subscription, were present and entitled him to it.
    But it will be contended further by appellants that this company'was chartered by certificate in November, 1904, and later on effected a preliminary organization, and had a president and officers, and that appellee’s subscription not being made at the time of the preliminary organization, but subsequent thereto, is not entitled to the benefit of the rule. The Maryland authorities are a full answer to this contention. In Morrison’s Case, 48 Md., this Court, speaking of the rule of the condition of subscriptions, says: “And this well-settled rule applies to subscriptions before and after the company is chartered.” See also 2 Clark & Marshall, Corp. sec. 382, page 1177; sec. 439, etc., page 1365.
    In Musgrave’s Case, 54 Md., the rule was applied in favor of a subscriber to stock, notwithstanding the company organized in April, 1869, and continued in the prosecution of its business for which it was chartered from that time continuously down to May, 1871, when Musgrave became a stockholder. Notwithstanding the doubt Judge Robietson had in that case, whether the rule would apply to a building association, he seems to have had no doubt about the application of the rule to Musgrave’s subscription, notwithstanding he did not become a subscriber until more than two years after the company had organized and during which it had been doing-business. He expressly allowed him the benefit of the rule of the condition of the subscription, but defeated him on the ground of acts of estoppel, which amounted to a waiver of the condition. See S. & K. R. Co. v. Cushing, 45 Me. 524; Munroe v. Ry. Co., 28 Mich. 275.
    In Temple v. Lemon, 112 Ill. 55, the subsciptions sued on were taken after the company had formed, and after it had done business, and yet the rale was allowed. The reason of all this is well illustrated in the case of Anvill Mining Co. v. Sherman, 74 Wis. 228, where the rule was allowed in favor of an after-subscribing stockholder, because, as the Court there said, before the company can embark upon its main enterprise, incurring the main expense, all its stock must be-subscribed.
    There is nothing, therefore, in the time of his subscription which will deprive appellee of the benefit of the rule.
    But it will be contended further that the manner in which he subscribed for this stock or the circumstances under which-he subscribed, deprive his subscription of the benefit of the-rule. It will be said that when he subscribed he knew that the company had organized, even though the organization was-but a temporary or preliminary one; that it was doing some-little business; that it had rented a warehouse from the Western Maryland Railroad Company, and in the lease had promised to build a warehouse, and that it contemplated spending-a large sum of money to build a warehouse of its own, and that one who subscribes under these circumstances and with-this knowledge cannot have the benefit of the rule which makes his subscription a conditional one. But why not?' What is there in all this which places appellee in a different position from that usually occupied by every man who takes stock in an enterprise of this kind? Whoever subscribed for stock in any concern without the knowledge that the company was about to embark in some business which would require the expenditure of money ? The very fact that he was asked to subscribe for stock would inform him that the company needed money to invest in some enterprise. Every man who subscribes for stock, whether at the time of the first organization or later, if he is a business man at all, endeavors to thoroughly inform himself before he subscribes as to the object of the company, what business it proposes to embark in, what money it proposes to spend, what it has in the way of property, what it is doing in the way of business and what it proposes to do. It is common knowledge that no business man subscribes to stock without knowing all these things, or at least trying to know them as far as he can. When was it ever heard before that this knowledge on the part of the intending subscriber would deprive him of the benefit of the rule or the condition of his subscription?
    As we have said above, the very fact that appellee knew the company contemplated a new departure and was about to build an expensive building and change from the condition of a concern doing a little business, which required little or no capital, and involved it in but little liability, entitled the appellee peculiarly to the benefit of the rule. A subscriber may know that a coal company has leased coal lands, or has bought coal lands, and wants to pay for them and wants to spend large money in improving the same, and yet it would be idle to say that this very knowledge on his part, that the company was about to spend large moneys in the enterprise, would deprive him of the benefit of the rule, that he was not to be bound unless the whole capital stock is subscribed. On the contrary, it is just in such a case as that that the rule applies with peculiar force. That is the very time and the very occasion when a man will not embark his money without some guarantee in the law that others to the full amount of the. capital .stock will, share the hprden with him,, and,that ■the, company .will not and.cannot, merely because he has subscribed a .certain amount, throw the whole burdpn of the enterprise upon him,.. It: is too clear for argument, therefore, that there, is nothing in the manner o;£ appellee’s, subscription, or in„tb,e. circumstances under which he subscribed, which will deprive, him of .the benefit of the rule, which inheres as. a mat; fer.pf law.in his contract of subscription.
    |The.implied right-to the .condition of the subscription is .g: .valuable right, which belonged to the appellee the moment hp.signed for the' stock. ,It was a right which arose out of the contract of. subscription and because of the contract. It did pot exist-beforp. the subscription. It could, therefore, only he-.waived by. some act done at the time of the subscription ^/thereafter.. Therefore, acts done before the subscription ppuld not waive a right which arose put of the subscription, and, .which did not. ■ accrue until the subscription had been signed. And so it was held in Curry Hotel Company v. Mullin, 93 Mich. 319, that no acts done by the stockholders before the subscription could constitute a waiver of this right which grew put pf -the:subscription.. This is sufficiently obvious, and..narrpws,fhe case..down to the consideration alone of those ■acts. of.the appellee.which were done at the time of the subscription or. thereafter. , o
    
    . 4 It -is said that • at the time the defendant subscribed and ■shortly thereafter he .consented to be elected a director of the storage company, and that shortly thereafter he was elected ■a director and. notified of. his election, and that thereafter he was several times requested and urged to attend a meeting of •directors, but always -failed pr neglected to do so. Mow, what .is. there in all this which would estop appellee in his defense pi; amount to- a waiver of his. right ? Estoppels of this kind ■are based.upon conduct inconsistent with his present claim ■of right. . At the -time he consented, what was inconsistent ■in his consent to. be elected a director?
    He,had..subscribed for $30,000 of stock in the company, based upon a legal condition precedent that all the remainder of the capital stock should be taken' before he was bound. He naturally expected the .company togoahead and complete its organization according to this condition. Relying upon ■this, as he had a right to rely: was there anything ¡inconsistent with his right to permit himself to.be elected a director in a company which he had-every right to suppose would in. its further conduct proceed according to law? Becoming'a director was perfectly- consistent with all this. The estoppel is based upon inconsistent conduct, but there "is nothing inconsistent here. His becoming a director was perfectly consistent all the time with his right to claim the condition of his subscription.
    But it is said further that Mr. Timanus- testified that he told him that the storage company' was 'proceeding with its building. At what-time he told appellee'this does not certainly appear, bnt it was-some time in the summer of 1907. It is not shown, however, that on these occasions he did anything or said anything, and there is not a particle -of testimony in the record tending to'show that appellee during this time knew- or had any reason to suppose that the storage company was going ahead or getting itself in debt without getting its stock subscribed. It is said appellee did not object to the company’s going ahead with the building. But why should he object? What right did he have to object?. He bad a right to presume that: the company had financed fits stock. His failure to object, therefore, was in no way inconsistent with his-right to have all the stock'subscribed. He never acted as a director- or attended any of the meetings, either as director or stockholder. Erom beginning to end he took no part in the proceedings'or conduct of the company. It is not shown that he had been'informed by the company that it had' let - a large and expensive contract and had gone heavily in debt. So far as the record discloses, the first information appellee had is the letter of Mr. Henders'on,' August 26, 1907, calling on appellee for an installment of stock subscription, because “funds are-needed:for the completion of building now under- construction at Dodson’s wharf:”
    
      Appellee replies to this, August 30, 1907, that when he signed his subscription it was with the understanding with Mr. Brady that he would not he called upon for any payment until financial conditions became easier. Then follows the testimony Mr. Timanus, that in pursuance of the action of the directors, September 24, 1907, he called on appellee and told him the company was in difficulties and asked for a payment on his subscription. Here, then, on or about September 24th, was the first time appellee was informed that the company needed money for its contractors. In the meantime, from July 1st, the company had gone ahead without obtaining any further subscriptions to its stock to amount to anything, after appellee subscribed, and had let a building-contract for more than $136,000. It had not in any way complied with the condition of appellee’s subscription. It had gotten itself head over heels in debt, and all this had been done without the knowledge of appellee down to September 24th, when he was called upon by Mr. Timanus for money and informed of the difficulties of the company. During all this time he had a right to presume that the company was keeping its contract with him, including the condition of his subscription. During all this time there is not one act shown on the part of appellee inconsistent with his defense to this action.
    But it is said that some time in September, Mr. Brady called on appellee for a part of his subscription, and that appellee said he would try to arrange for some part of it, and that under the business conditions and money conditions, “he thought we had better hold off in the work at that time,” and that in the latter part of September or early in October,. Brady, Timanus and appellee, at the request of Timanus,. went down to look at the building. They went all over the-building and looked at it, and that appellee said he thought “we did very well, and the building was a very good one.”' That “we had made good progress, and it looked like a good building;” and that Mr. Timanus asked him for $5,000 on his subscription, and that appellee said he was going to New York, and would try to raise some money for his payment to the storage company. And this testimony is relied upon as showing an estoppel upon the appellee.
    But what was inconsistent in all this with the condition of his subscription ? It was no act on his part as a member of the company, either as director or stockholder, which contributed in the slightest particular to bringing about the predicament in which the storage company then found itself. He had done no act which either directly or impliedly authorized the making of the debt, or which had encouraged the company in making the debt. Brady and Tim anus say lie made some indefinite promise about paying part of his subscription, but he did not pay. Even at that time the damage had been done, the debt had been created, the embarrassment existed, the company was insolvent. As soon as he heard of it he advised Brady to stop the work. In his letter to Messrs. Gibson and Smith, October 30, 1907, appellee says that at the time of his subscription he had advised Brady it was not wise to undertake any construction until conditions had improved, and criticises the policy of the company in undertaking the building without sufficient capital, and because of the hard times. Instead of doing any act encouraging the company toward incurring this disaster, this letter to Gibson and Smith, and the testimony of Mr. Brady show the attitude of appellee was one of cautious protest against incurring liability before the company was properly financed. He spoke of the building as a good one, but there is nothing in this to indicate that he thereby approved the policy of the company in bankrupting itself to build it. He merely gave expression to an obvious fact to the effect that the building had been well constructed. This was no doubt true, but cannot be construed by any stretch of the imagination into an approval of the policy which had procured the fine building at the expense of the solvency of the company, and even if he had paid a part of his subscription instead of making some indefinite promises in regard thereto, such payment at that time would enot diave heenlincónsistent -with his aright to. refuse to-pay .aiiy further calls-.-; ; i • . . -■ . • . . - ,
    These, then, are the acts-and-all the acts- relied, upon by 'appellants to estop the appellee from setting-up''his . defense :ofpartial subscription. '-To'-.these acts' occurring- after the •siibscinption.may. be added all the other-evidence in the record (if deemed -admissible-), showing the state -of .-the knowledge ’of apjiellee' of the situation and affairs of.-the storage •company at the time he’made’the subscription,- and all-of Jit combined falls far short- of.that:which will estop the appellee under the rule of waiver or.' estoppel in .such' cases laid •down in'this.State and elsewhere.-. Garling’s Case, 41 Md. 305; Stillman’s Case, 44 Md. 380; Gettysburg Bank Case, 95 Md. 367; Central R. Co. v. Johnson, 30 N. H. 408; Ridgfield R. Co. v. Reynolds, 46 Conn. 375; Parker v. Thomas, 19 Ind. 220; Salem Mill Dam v. Rope, 9 Pick. 194; Munroe v. F. W. R. Co., 28 Mich. 275.
   Pearce, J.,

delivered the opinion of the-.Court. -.

■ This action was brought'in the Circuit-Court -for Baltimore •County by John. II. Morgan and.Prank B. Smith,, receivers -of the Maryland Storage Company; a corporation- under -the laws:.of Maryland, duly.'adjudged'.to-be-insolvent, -against Pai-rfax'S. -Landstreet, -to recover the: sum of $30-,0.0.0, being -the amount of the defendant’s written', subscription made June 10, -1907, for 600 shares of the capital -stock o-f. said company’óf the. par valúe of’$50 per share. The .proceeding was by'way'.of attachment- against, the defendant'as .a- nonresident-; who -entered 'a voluntary appearance- in the' summons ease. ■' The short note' contained one count for money;due on ¡account -stated;-¡and'a.special 'coúmt on the' contract-of subscription.' 'The defendant-.filed the-‘two general -issue pleas in "assumpsit;.-and a "third.plea',, “that the subscription'mentioned in the plaintiffs’ declaration was subject to'aJconditibn precedent, -that said kibscription was-not to be binding on the ■defendant until all * of.- the original-capital stock , of -.the :said Maryland Storage Company was duly subscribed, and that subscriptions were never obtained for all of said original stock, and said condition precedent never complied with, whereby the defendant’s subscription never became effective or binding.” The plaintiffs joined issue on the defendant’s first and second pleas, and to .the third plea filed two replications—first, that said subscription was not subject to the condition precedent pleaded; and, second, that the defendant, by his acts, had waived any and all defense on account of the alleged fact that all of the original capital stock of the Maryland Storage Company was not subscribed.

The defendant joined issue on the first replication to the third plea, and as to the second replication, rejoined that he had not, by his acts, waived any defense on account of the alleged fact that all of the said original stock had not been subscribed. And the plaintiffs joined issue by way of surrejoinder on the defendant’s rejoinder to the plaintiffs’ second replication to the defendant’s third plea. It thus appears that the fact of the subscription was admitted, and also that no part of the same has been paid, and under.the pleadings two questions only were in issue—first, whether the contract of subscription was subject to the condition precedent pleaded ; and, second, if so-, whether such condition had been waived by tbo acts of the defendant. ' '

At the close of all the testimony on both sides of the case, the defendant moved to strike out certain items of testimony which had been admitted subject to exception, and the plaintiffs moved to strike all the testimony adduced at the trial which tends to qualify the written subscription,- whether contained in the defendant’s own statements or ín his letters offered in evidence, or in the testimony of the witnesses Tima-nus and Brady; also defendant’s statement of what he told Timanus as to-taking the last $30,000 of stock, when-he,Timanus, had secured (he balance, and also what he said either to Redwood or Brady, as to any subscription to be madé to- this stock by the Western Maryland Railroad Company.' Both these-requests were refused..' - ' ' • ■ • " • V

The plaintiffs then offered five prayers, all of which'were rejected, and the defendant offered three - prays, of which the second and third were rejected, and the first was granted, as follows: “The Court instructs the jury that by the uncontradicted evidence in the case the stock of the Maryland Storage Company authorized by its charter was never fully subscribed, and their verdict must be for the defendant, there being no evidence in the case legally sufficient to estop the defendant from setting up the defense of partial subscription to stock,” thus withdrawing the case from the jury. The rejected prayers will be set out by the Rejorter. The defendant excepted specially to the plaintiffs’ second prayer on the ground that there was no evidence that defendant subscribed to any increased capital stock of the storage company, and not its formative or original stock, and this special exception was sustained; all of these rulings being embraced in the single exception taken.

A brief statement of the history of the case will throw material light upon the situation, before going into the law appplicable to the case.

The storage company was incorporated under the laws of Maryland, Nov. 18th, 1904, to carry on a forwarding and warehouse business, there being seven directors, and the authorized stock being 3,000 shares of the par value of $50 each. Mr. Timanus was then President of the storage company, and Mr. Landstreet was then Vice-President of the Western Md. R. R. Co. This company had recently established a tidewater terminus at Port Covington, and one of the principal objects of the organization of the storage company was to secure the storage business incidental to the new tidewater terminus. This appears in Mr. Timanus’ letter of July 1st, 1904, to Mr. Landstreet as Vice-President of the railroad company. On November-lYth, 1904, Timanus, learning that the railroad company was about to acquire the possession of Brown’s wharf, on the north side of the harbor of Baltimore City, proposed to Landstreet to take a lease of the warehouse then on that wharf. This permitted, without further cost for building, a small active business, requiring nine or ten clerks and laborers and doing a business of about $1,800 a month. He testified they were trying to get the railroad company or Landstreet interested in the storage company. Ho agreement was reached in the matter of the lease until June 12, 1906, when a lease of Brown’s wharf was executed for five years, containing a covenant on the part of the storage company to erect a storage house on York Street, to be completed, if possible, by January 1st, 1907. At that time there was no actual subscription by Landstreet, either for the railroad company, in his own name, or for any other individual. In May, 1905, the charter was duly amended, so as to increase the number of directors from seven to nine. In July, 1906, a stockholders’ meeting was called for the purpose of increasing the capital stock from $150,000 to $250,-000 and the number of directors from nine to twelve. It appears from the minutes of that meeting that stockholders were present representing sixty-five shares of stock, that being more than two-thirds of the whole number of shares then issued, and that these voted to increase the amount of capital stock and the number of directors as above proposed. These proceedings, however, were abortive, both because the requisits notice was not properly addresed to the stockholders, and because the proposed amendment was not acknowledged and recorded as required by secs. 51, 52 and 55 of Art. 23 of the Code.

In May, 1907, Landstreet resigned as Vice-President of the railroad company, and Brady, Vice-President of the storage company, testifies that at that time he asked him when he would sign a subscription, as some who had subscribed would not pay until they felt sure of his subscription, as he had resigned from the railroad company, and he said he would let him hear in a few days. Later he told Landstreet they wanted him as a director. On June 10, 1907, he signed the subscription and consented to be elected a director. At that time there were ten directors elected and serving, being one more than the charter allowed. Landstreet never qualifiecl as director, and never attended any stockholders’ or directors’ meeting.

At the date of his subscription, Brady testifies there were subscriptions, including Landstreet’s, of about $101,000, and no greater amount was ever subscribed.

Mr. Morgan, one of the receivers, testified from the books and papers that came into his hands as receiver, that at that timé $40,000 had been paid in on subscriptions, about $36,-000 unconditional subscriptions, unpaid, including Band-street’s $30,000, and some conditional subscriptions, unpaid, the whole- amounting to about $101,000, as stated by Brady.

On July 1, 1907, there being then only $76,000 unconditionally' subscribed, including the $30,000 of Landstreet, the directors resolved'to build the York Street storage house at a cost not to exceed $145,000. ■ The York Street lot was subject to two mortgages aggregating $51,000, and the building contract called for- an expenditure of $136,000. The lot sold for barely enough to cover these mortgages. Brady in the latter part óf July, 1907, tried to induce Landstreet to go to see the building, then started, but he declined to go. In September. 1907, he asked Landstreet for a payment on the subscription, and he told Brady that, under the business and financial conditions’-existing they ought to hold off the work, and Brady explained they had gone too far to stop. Later, and early in October, Landstreet did go with Timanus and Brady and-examine the’work in progress, and he said he thought it was a good building. Brady did not then ask for any payment- and’'1 did not hear Timanus ask for any; and Brady never afterwards saw him on that subject. ’

Timanus' testified that he asked Landstreet .several times in the summer and fall of-1907 for payments on'account, and his-answer was that nloney was hard to get, and once, in September, 1907, he said he was not liable and would not pay it at all. ■ ’ ' ’

’ He also -testified that Landstreet told him that’when he subscribed-Brady told him that-all the stock had been either subscribed or promised. Brady, however, denied this, and said, that he told Landstreet that his binding subscription would enable them to get many others, but did not say they could complete the total - authorized capital. Landstreet testified that when the organization of the storage company was under duseussion. between Timanus and himself, he said that if. he won cl get a strong management and have the finances in Unquestionable form before undertaking the enterprise, the railroad company would co-operate with him and would take tlu\ last $30,000 of its stock of $150,000, and that in all the negotiations throughout he acted in behalf of the railroad company, and at no tinie and in no way as an individual, and • that it was so understood by all concerned. ' He states .that as early-as January, 1907, when informed by Brady of their plan to acquire property ow the south side of the harbor that he advised against any- additional enterprises, and that after his resignation as Vice-President of the railroad company he remained one of its directors, and told both Timamos and Brady they would have to- take up the'subscription of the railroad company with other officials and that if the storage company complied with the previous understanding, he saw no reason why the matter should not be concluded'. 1 That shortly after this Brady came to see him, and said that he had responsible men in Baltimore, mentioning a number of them, who were only- waiting for the signature 'of the railroad company,-and who would then sign subscriptions- to the full amount of the authorized capital stock of the company, and urged him to sign personally for this $30,-000, .which he' did upon, those assurances, and the further assurance that their finances were in condition to- meet any undeifaking entered into. -

He also says, that in signing he expressly stated to Brady that.he was not signing his name as an individual that would engage him in any financial obligation, and that Brády replied nothing was to he paid on that subscription until business conditions would warrant-it. 11 He also says that when he visited the building in October, 1907, no reference was-made, to his subscription, hut Messrs.1 Timanus and Brady stated that they wished to arrange with the Western Md. R. R. Go. to take over this building, and some of the officials advised them to get him to examine it, so that he could report thereon to the executive board.

We have thus condensed the most material testimony in the case, and will now consider the propriety of the granted instruction, which constitutes the principal and controlling question in this appeal.

We could not expect, and do not understand the appellants to deny the general rule, that where the capital stock and the number of shares are fixed by the act, or certificate, of incorporation as in the present case, no assessment can be lawfully made on the share of any subscriber until the whole number of shax-es has been taken. This principle was eaxdy adopted both in England and in this country, and is now fix-xnly established as a rule of law. Two of the earliest cases in this country are Salem Mill Dam v. Ropes, 6 Pick. 23, and Stoneham v. Gould, 2 Gray, 277, in both of which the reasons for the- rule were given by eminent Chief Judges of the Supreme Coux’t of Massachusetts, Parker and Shaw. No xnox-e convincing reasons could be given than those stated by Chief Judge Shaw in 2 Gray, supra. He says: “This is no ai’bitrary x*ule. It is founded on the plain dictate of justice and the strict principles regulating the obligation of contract. When a man subscribes for a share of stock, consisting of one thousand shax’es, in order to camy on some designated enterprise, he binds himself to pay one-thousandth part of the cost of such enterpxise. If only five hundred ax*e subscribed for, and he can have no assurance which he is hound to accept, that the remainder will be taken, he would be held, if liable to an assessment, to pay one-five hundredth part of the enterprise, besides incuxning the risk of the entire failure of the enterprise itself, and the loss of the amount advanced towards it.”

This rule, with the reasons which led to it, were adopted in this State in Hughes v. Antietam, 34 Md. 331, and has been laid down consistently since in Cleveland v. Hager, 36 Md. 476; Garling v. Baechtel, 41 Md. 305; Dougherty v. Gilman, 44 Md. 380; Morrison v. Dorsey, 48 Md. 472; Musgrave v. Morrison, 54 Md. 164, and Gettysburg Bank v. Brown, 95 Md. 367. In the last-mentioned, the latest case upon the point in this State, Judge .'Page said: “These rules apply to subscriptions made before and after the company is chartered. They are founded upon the theory that the subscription is made upon the implied understanding that the entire amount of stock fixed by the charter is necessary for the successful prosecution of the business for which the company was incorporated. It is not to be supposed that a reasonably prudent person will invest in a corporation which is not to be supplied with sufficient capital with which to prosecute its affairs; and therefore it is that a presumption arises that the amount fixed in the charter shall be raised before the corporation creates any liabilities.”

There are substantial differences, it is true, in this regard between “original or formative” stock and “increased” stock, but that question does not arise here, because the attempt to increase the stock was not operative.

It is sufficient that the Maryland rule is as stated, but, as indicating its soundness and universality, it may be stated that it prevails in Mew York, Missouri, Connecticut, Mew Hampshire, Wisconsin, Iowa, Georgia, California, Illinois, Maine, Tennessee, Ohio and generally throughout the United States.

It will bo observed that it is spoken of generally as an implied rule, but it may of course be expressed, and in this case the uncontradicted testimony of Mr. Landstreet is that he expressly agreed to take only the last $30,000 of the whole amount of $150,000, so that his subscription was upon the express condition that the whole residue of the stock should be taken before his subscription became binding. This condition not having been incorporated in the written subscription, might, perhaps, not have been available as a defense, if the residue had been fully and unconditionally subscribed; but the uncontradicted evidence in this case shows that there were,never, over $76,000 unconditional subscriptions, and the cases are uniform that for this purpose there can be counted only unconditional subscriptions,' joayable in ’ cash. Troy. v. R. R. Co,. 8 Gray, 596; Oscaloosa v. Parkhurst, 54 Iowa, 357; Brand v. Lawrenceville R. R., 77 Geo. 506; Cal. Southern Hotel Co. v. Russell, 83 Cal. 277.

While the appellants, as we have said, do not deny the general rule- invoked, .they do contend, that “if the corporation is already a going concern at, the time of the subscription; .and is continuing to create liabilities to- the knowledge of. the subscriber, and the subscriber also knows that its stock fixed in its charter is not fully subscribed,” then the presumption which this Court, in Gettysburg Bank v. Brown, 95 Md. 386, said arises, “that the. amount fixed in the. charter shall- - be raised before the corporation creates liabilities,” cannot arise, and the rule has no application. This contention seems to us to confound the general rule with the subsidiary rule, equally well settled, that- this defense may. be waived, or' the- subscriber, be estopped from setting it up. The appellants cite in support of their contention what they concede to be a dictum of this Court in Musgrove v. Morrison, 54 Md. 161, in which Judge Robinson said: “We do not mean to say that this rule applies to corporations of every kind without regard to the objects'and purposes-for which they are chartered. * * * • In this case, the company was chartered for the purpose of buying, selling and leasing property and also as a homestead and building association, and at the time of the appellant’s subscription was engaged in the prosecution of its business, and he knew at the same time that its whole capital slock had not been taken, and under these circumstances it niight.well.be argued that his subesription was not made upon the condition that the company was not to organize until the whole number' of shares had been taken.” But the learned Judge, nevertheless, placed the'decision squarely on. the ground that during, three years that he was a member, he not only regularly paid his weekly -dues, but accepted his proportion of the profits earned, and through an attorney voted liis stock at. all meetings, whether for the election of directors or the transaction of other business, and the Court expressly states that all this time he knew the whole capital stock had not been taken.

Another case cited for their contention is Arkadelphia Mills v. Trimble, 54 Ark. 519, in which the Court said: “The fact was that the corporation began business as soon as the $14,500 was subscribed, and after that Trimble agreed to take and pay for the $500 subscribed by him. From this it is evident that there was and could be no implied condition in his agreement that the corporation should not begin business until all the capital stock was taken. The corporation was engaged in business when he subscribed. It was evident it would need money in the prosecution of its enterprise, for if it would not, there was no necessity for his subscription. lie was not to be an honorary member.” A little further examination of that case will show, however, that far from supporting the appellants’ contention as applied to the facts of this case, it bears out the application of the general rule as inherent in the appellee’s subscription, and shows it as avoidable only by waiver or estoppel. The articles of association in that case which were subscribed by Trimble contained the following provision: “The amount of capital stock of said association shall be $50,000, of which $14,500 have been subscribed by corporators aforesaid, and the residue may be/issued ancl disposed of as Hie board of directors may from time lo time order and direct;” and the Court said: “No impliealion arises from this provision that the corporation was to .postpone its enterprise until all the capital stock had been subscribed. The most reasonable inference to be drawn from it is that the $14,500 was all the money needed for the purpose. The fact was that it began business as soon as the $14,-500 was subscribed, and after that Trimble agreed to take liis stock.” These articles of association could well be construed as fixing the formative or original stock at $14,500, with power to increase the same from time to. time as the directors should see fit, up to $50,000, and this is precisely what it is fair to presume Judge Robinson meant in Musgrave v. Morrison, supra, when he said, on page 164: “It may be obvious from the face of the charter itself, that the whole capital stock is not in any manner necessary to the organization of the company, and that the subscriber knew, or had reason to know, this at the time of subscription.”

We can perceive nothing in the case before us in the nature or kind of business for which the storage company was incorporated (if that can in any case be a proper subject of inquiry), nor in the time when, or the circumstances under which, the appellee made the subscription in suit which should take this case out of the general rule. It appears from the subscription blank that the capital stock was then designed to be $250,000, presumably upon the supposition that the attempted increase from $150,000, as fixed by the certificate, to $250,000 was regular and effective. The original stock, however, was $150,000, and there is no evidence, as in the Arkansas case, supra, that the charter authorized the organization of its main enterprise before the full amount was subscribed. The subscription in this case was made June 10; 1907. Prior to June 12th, 1906, the company was doing a small business, principally in towing and lighterage, requiring comparatively small capital. In July, 1906, it leased Brown’s wharf and began a storage business there, but at that time it contemplated the expenditure of a large amount in the erection of a modern storage warehouse, to which it bound itself in that lease in pursuance of negotiations with the appellee representing the railroad company. The erection of that warehouse, for that purpose, then became and continued to be its main enterprise. The appellee’s subscription was made June 10, 1907, and the building contract, made in July, 1907, called for an expenditure of $136,000, nearly the whole of the authorized capital. In addition to this, the storage company purchased ground on which to erect the warehouse, and mortgaged the same for $50,000. All this was done without the concurrence of the appellee, who at the time of making the subscription advised against undertaking any construction under existing business conditions, and continued so to advise. In considering this situation it must not be forgotten, as said in Hager v. Cleveland, 36 Aid. 487, that “there is a wide difference between the existence of the company as a corporate body, and the liability of parties for their subscriptions to its capital stockand, as repeated in Gettysburg Bank v. Brown, 95 Md. 385, that “this rule applies to subscriptions made before and after the company is chartered.” The fact that the appellee knew that the storage company was about to involve its stockholders in this large financial undertaking is conclusive that he was entitled to the benefit of the rule he now invokes. We cannot imagine a situation in which this rule could apply with more peculiar force if the reasons so forcibly assigned by Judge Shaw in 2 Gray, supra, and so fully approved by this and other Courts, are in themselves sound and satisfactory.

But it remains to enquire whether this defense has been waived, or the appellee estopped to claim its benefit.

In considering this question it must he kept in mind that there is not only no evidence to show that Landstreet did not know all the stock was not subscribed, but that he subscribed in reliance upon Brady’s assurance that it was all either actually subscribed or promised to be subscribed immediately upon his subscription being made, as indicating the co-operation of the railroad company. Technical estoppel, it may be conceded, is not required, and any acts which constitute waiver will be sufficient.

It is uncontradicted that Landstreet never qualified as a director, and never attended any directors’ or stockholders’ meeting, nor participated in any way in the incurring of any obligation or the transaction of any business of the company.

In Garling v. Baechtel, 41 Md. 305, it was held that where a stockholder attends meetings of the company, knowing the whole capital stock has not been taken, and votes for the expenditure of money for the purchase of property and materials to carry on the business of the company, he will not be permitted to set -up- the defense that the capital 'stock- had not all been taken. And to the same effect is Hager v. Cleveland, 36 Md. 476; Stillman v. Dougherty, 44 Md. 380. But in Garling v, Baechtel, 41 Md., supra, which was a suit to recover of Garling as a stockholder-a debt dne Baechtel by- the company, Judge RoBiErsojsr also said: “The mere-fact that he paid'his subscription, knowing that the whole capital stock ■had not been- paid in, and that the company was incurring debts for property and material, were not such acts of partió i-pation as to estop him from setting up in this action the partial subscription of the capital stock.” And this was held -also in Bray v. Farwell, 81 N. Y. 600, in a similar case, where defendant never attended a stocholders’ meeting or assented in any way to the commencement of the enterprise before all the shares, were taken.

In Ridgefield R. R. v. Reynolds, 46 Conn. 375, Reynolds attended stockholders’ meeting to elect directors and was himself elected- a -director and accepted. He .was present at a meeting of, directors when an assessment of forty.per cent, was-laid, and when a report was made'by. the President of a contract-for. construction,, and work actually begun; but it did not appear- he participated in any action taken at the meeting. • It-was. held none of these things constituted a waiver. Ohiee Justice Pabk said: “The case is silent as to Jais conduct. . .IBs simple presence is.as.much in accord with ,one supposition as the other. The burden of proof is on the appellees.” ■ •

,. In Masonic Temple v. Channell, 43 Minn. 353, the Court •said: “It is to be' regretted -that there has been any relaxation of this rule. .The acts as stockholder which will constitute a .waiver are those which constitute a part of the business for which the corporation is formeji, and which evince a willingness. to enter upon that business with the • stock already subscribed.”. ■ This -is a- clear and plain.statement of the principle upon which, all such questions should be resolved. ■

•• • In that case the defendant was a director, attended meetings -as such,' and was chairman of a committee to select a building site, and only' resisted payment when the' site he favored was not selected. This was held a waiver. The facts in this case do not, in our opinion, bring it within any well-considered decision under which a waiver could be found, and we think the learned Judge below correctly granted the defendant’s first prayer.

As this necessarily requires the affirmance of the judgment, there is no occasion to consider the other prayers, nor the disposition of the motions to strike out evidence, all of which were refused.

Judgment affirmed with costs to the appellee above and below.  