Boyce v. Trustees of the Towsontown Station of the M. E. Church , 46 Md. 359 ( 1877 )

Stewart. J.,

delivered the opinion of the Court.

From a careful consideration of the case, we find no error in the rulings of the Circuit Court, in the four exceptions taken hy the appellant.

The controlling question to be determined under the first plea of the appellee of nul tiel corporation, is, whether any or all of the evidence offered on the part of the appellant in the said exception, and refused hy the Court was sufficient to show, that the appellant could he held to he a corporation de jure or de facto ; or to estop the. appellee from disputing its liability as a corporation.

The Act of 1868, ch. 471, in its 14th sec. provides, amongst other things, for the incorporation of religious societies ; and by secs. 151, 162, 163 and 164, for religious corporations.

These last provisions are more especially applicable to the organization of a church religious society, or congregation of whatever denomination which the appellee professes to be, and it is to be presumed were intended for such purpose

Amongst other requisites to constitute a religious corporation, church, religious society or corporation under these last sections, it was necessary that the agreement for that purpose should be acknowledged by the trustees or a majority of them, before two justices of the peace of the county or city in which the church, congregation or society, or the greatest number of the members shall reside, or before a Judge of the Circuit Court, or of the Supreme Bench of Baltimore, and certified hy the said justices or Judge according to the directions of sec. 163.

No authority having been given to. the Judge by these provisions, to determine that the law had been complied with, his certificate is not sufficient evidence that the defendant is a corporation.

But the appellant has undertaken to offer evidence of certain acts and proceedings of the appellee, referred to in the exceptions, to show that it held itself out as a corporation, and treated with the appellant as such, and is estopped from denying its liability as a corporation.

We think it would be extending the doctrine of estoppel to an extent, not justified by the principles of public policy, to allow it to operate through the conduct of the parties concerned, to create substantially a de faet-o corporation, with just such powers as the parties may by their acts give to it.

This would be substituting the dealings of the parties, for compliance with the requirements of the law, and giving to them the same effect through the aid of the Courts. Thus, virtually, through the Courts, recognizing the existence of the corporation, in manifest disregard of the written law.

It has been determined by this Court, that a corporation cannot bind itself in excess of its powers. Penna. Steam Navigation Co. vs. Dandridge, 8 G. & J., 319.

Whilst denying its capacity upon any principle of estoppel, to make contracts ultra vires, to bind itself; it would not be consistent with that theory to recognize its existence ad libitum, according to the conduct of the parties concerned.

Such a principle would seem to affix no other limit to the existence of the corporation de facto, or the extent of its power than the dealings of the parties, through the recognition of the Courts, might, upon the doctrine of estoppel, prescribe.

It would be more reasonable to hold corporations to their contracts, though ultra vires, of which they have received the benefit, or to prevent parties who have contracted with them, and received the benefit therefrom, from defeating their liability, on the ground of want of power in the corporation, as is held in quarters of high authority, (see note and references in 2nd Kent, 351,) than to hold that corporations should be deemed to have existence, because they had so held themselves out.

(Decided 8th March, 1877.)

The statute law of the State, expressly requiring certain prescribed acts to he done to constitute a corporation, to permit parties indirectly, or upon the principle of estoppel, virtually to create a corporation for any purpose, or to have acts so eoustrued, would he in manifest opposition to the statute law, and clearly against its policy, and justified upon no sound principle in the administration of justice.

Judgment affirmed.