CORPORATIONS. 667

securities convertible into fully paid and non-assessable shares of such stock
may be issued for. a consideration in money less than the par value of such
shares or of shares into which such securities are convertible, or for a con-
sideration other than money the actual value of which is less than the par
value of such shares or of the shares into which such securities are con-
vertible.

(9) A statement that the actual value of any consideration, in the
opinion of a board of directors or as fixed by incorporators, is not less than
a certain sum is a sufficient statement of value to comply with any of the
requirements of Sections 43, 44 and 45. This paragraph (9) shall not be
construed as implying that in the absence of this paragraph (9) the re-
quirements of Sections 43, 44 and 45 could properly be otherwise construed.

The provisions of art. 23, secs. 61 and 62 of the Code of 1888 would be nugatory
if parties could purchase property, convey it to a corporation in exchange for stock
of the company and then have the directors (the stockholders and directors being
the same persons) pay them the purchase money which they had paid for the prop-
erty. Purpose of these sections; terms of subscriptions thereunder are to be found
in the proceedings of the stockholders and not of the directors. Conowingo Land
Co. v. McGaw, 124 Md. 654.

When stock was subscribed for while secs. 6, 62 and 65 of art. 23 of the Code
of 1888 were still in force, those sections govern. Action by directors (even though
they be the same persons as the stockholders) could not be substituted for the
required action by the stockholders. Certificates of indebtedness held not to have
been legally issued and director's action, ultra vires. McGaw v. Hoen, 133 Md. 676.

Though services are not completely performed when the stock is issued, the
validity of such issue is not affected as between the parties to a contract, such ser-
vices having been contracted for and the valuation thereof agreed upon. Larkin v.
Maclellan, 140 Md. 588 (based apparently on this section as it stood prior to the
act of 1916, ch. 596).

No attack can be successfully made on the issue of $600,000 of stock in exchange
for property worth about $1,400,000; who may object where this section and sec. 49
are not complied with. Object of this section. Rights of creditors under sec. 49;
appellant in no better position. Meaning of " actual fraud." Kernan v. Carter,
132 Md. 584. (Property conveyed in 1911; case decided 1918).

Where stock is issued not for services, but as bonus for a loan, the transaction is
not within this section. Demurrer to bill praying that stockholders be required to
contribute toward the payment of debts, properly overruled, since such stockholders
did not pay for their stock either in money, property or service. Meaning of word
" service." Laches. Hopper v. Brodie, 134 Md. 300 (stock issued prior to act of
1916, ch. 596).

Since the holder of every share of stock participated in the issue of certain stock
in exchange for services, no notice of the meeting is necessary. Larkin v. Maclellan,
140 Md. 588 (based apparently on this section as it stood prior to the act of 1916,
ch. 596); Tompkins v. Sperry, 96 Md. 560.

No corporation could make a valid contract to receive property of any kind in
payment for any part of its capital stock, in plain violation of the express conditions
imposed by sec. 69 of the Code of 1904. Contract held divisible. Miller v. Cosmic
Cement Co., 109 Md. 14; Baile v. Calvert College, 47 Md. 120. Cf. Southern Trust
Co. v. Yeatman, 134 Fed. 810.

If the property is valued at a grossly exaggerated price, it may not constitute pay-
ment in full for the stock, so as to protect the holder from liability under sec. 77.
Tompkins v. Sperry, 96 Md. 560.

A non-compliance by a corporation with secs. 69, 70, 81, and 408 of the Code of
1904 (see this section and secs. 49 and 38), held to form no ground of recovery in
an action for misrepresentation and deceit. Robertson v. Parks, 76 Md. 133.

Under sec. 69 of the Code of 1904, stock might be paid for in leasehold property
or chattels. Weber v. Fickey, 52 Md. 518. Cf. Basshor v. Dressel, 34 Md. 511.

Sec. 69 of the Code of 1904 cited but not construed in Wenstrom, etc., Co. v.
Purnell, 75 Md. 116.

See notes to sec. 77.