The principle that an estoppel does not operate to confer authority, though it may, under *Page 813 some circumstances, be effective to preclude denial that authority conferred was duly exercised, is well settled law in this State, and we are, therefore, not required to investigate authorities from other jurisdictions to sustain the point.
In the case of State ex rel. Nuveen v. Greer, et al., 102 Southern 739, text 744, will be found the following:
"(12) While a municipality may be estopped to deny that the authority to issue bonds given by a valid statute was not properly exercised, in issuing bonds to bona fide holders for full value (County of Jefferson v. B. C. Lewis Sons, 20 Fla. 980), yet a municipality will not be estopped from denying the validity of a statute under which bonds were issued, even tobona fide holders. See L. R. A. 1915A, 916 notes;" and also
"(13) A municipality can exercise only such powers as are conferred by law, and where a legislative enactment purports to confer on a municipality authority to issue bonds, and such authority is in conflict with express or implied provisions of the Constitution, the enactment confers no authority, and bonds issued thereunder are void even in the hands of bona fide holders, and the municipality is not estopped to deny the validity of the bonds. 19 Rawle C. L. 1006."
This Court further held in the case of Merrell v. The City of St. Petersburg, decided October 23rd, 1917, reported in 76 Sou. Rep. 699, text 700:
"(1) It is averred in the answer that said City undertook to secure a new charter under the provisions of Chapter 6940, Acts of 1915, Laws of Florida, but that such undertaking was never completed, and such new charter never became effective because no copy of the proposed charter was recorded in the office of the clerk of the circuit court, *Page 814 as required by Section 13 of said statute. In a stipulation filed by counsel for the respective parties in the court below, the following paragraph on this subject appears:
" 'It is further stipulated and agreed that said charter was duly recorded in the office of the Secretary of State, February 26, 1916, in Book 1 of "Municipal Charters" and that said Charter was recorded in "Corporation Record No. 1" on page 263 to 285, inclusive, in the office of the Clerk of the Circuit Court of Pinellas County, Fla., but not in any other book in said office.'
"Even if this does not show a full compliance with the terms of the statute, which is not conceded, the holding of the court below was right, for the reason that the question of whether or not there was irregularity in the organization of the municipality cannot be determined in a collateral attack of this character. Town of Enterprise v. State, 29 Fla. 128, 10 So. 2d 740."
As set forth in the original opinion in this case, the plea filed by the defendant set forth that the charter of the Bank of Bay Biscayne limited the amount of capital stock to a sum not exceeding one hundred thousand dollars, and that in violation of the laws of the State the bank had undertaken to increase its capital stock above the charter limit, without amending its charter, and that the stock upon which the suit had been brought was stock issued by the bank in excess and in violation of its charter limitation and without compliance with the law and that the same was ultra vires and void. While it is insisted now that the bank was powerless to increase or to have increased its capital stock, yet the plea complains of the conduct of the bank by reason of the fact that its charter was not amended.
This Court held in both the original decision and in the decision on rehearing in Randall v. Mickle, 138 So. 2d 14 and *Page 815 141 So. 2d 317, that authority does not exist for the increasing of the capital stock of a bank. It again is made unnecessary to refer to authorities from other jurisdictions; however, the fact can be clearly established by decisions from other jurisdictions cited by both counsel for appellant and for appellee that such authority does exist.
The case of Laredo Improvement Company v. Stephenson, reported in 66 Fed. Rep. p. 633, being a decision of the Circuit Court of Appeals for the Eighth Circuit, dealing with the statutes of the State of Texas, had the following to say:
"Corporations created under statutory authority are the mere creatures of the statute. Their powers are measured by the statute under which they have their existence. Beyond the limits of the powers there granted, and those fairly incidental thereto, they can neither act not agree to act. Corporations thus created have no implied power to change the amount of capital prescribed in their charters, and all attempts to do so, not expressly authorized by the statutes under which they exist, are void." (Citing Scovill v. Thayer, 105 U.S. 143 and numerous other authorities.)
"This brings us to the consideration of the question whether or not the limitation of the powers to increase their stock imposed upon corporations by Article 1576 was removed by the provisions of Article 573, which allows them to amend their articles generally. We are, however, spared the examination of this question. Its determination rests entirely upon the construction of the statutes of Texas, and since the trial of this case the supreme court of that State has decided it. In Kampmann v. Tarver (Tex. Sup.), 29 S.W. 768, — a case involving the validity of the increase of capital stock made by this very corporation, — the Supreme Court of Texas held, in an opinion delivered *Page 816 February 7, 1895, that the limitation imposed by Article 576 was still in force, that no corporation created under the amended Act of 1874 could lawfully increase its capital stock beyond double its original amount, and that all stock issued in excess of that limit was void. This decision concludes the discussion of this question."
By reference to the case of Kampmann v. Tarver, 29 S.W. 768, we find the following:
"Article 571 reads in part as follows: 'Any private corporation heretofore organized or incorporated, or which may hereafter be organized or incorporated for any of the purposes mentioned in this chapter may amend or change its charter or act of incorporation by filing, authenticated in the manner required by this chapter as to an original charter of incorporation, such amendments or changes with the Secretary of State,' etc.
"Article 573 has an important bearing upon the determination of the question. It contains the following provision: 'No amendments or changes violative of the Constitution or laws of this State or of any of the provisions of this title, shall be of any force and effect.'
"The following is the language of Article 576: 'Art. 576. Any corporation may increase its capital stock to any amount not exceeding double the amount of its authorized capital by a vote of the stockholders in conformity with the by-laws thereof; and if a majority of the stockholders shall vote for the increase of stock the same may be increased by the board of directors, trustees or other business managers of such corporation,' and so forth."
In that case, upon the question of whether or not a corporation could by amendment of its charter increase its capital stock to an amount in excess of double the amount *Page 817 of its authorized capital, the Court had the following to say:
"By the well settled rule of construction, Articles 571 and 576, if consistent with each other, must both be given effect. The intent of the Legislature which passed the Act of April 23rd, 1874, that both should stand, is made manifest by the fact that when they inserted the new provision which confers upon corporations the power of amending their charters, they retain the section in regard to the increase of the capital stock. The incorporation of both provisions in the Revised Statutes also evinces the same intention. We must hold, therefore, that the special provision in regard to the measure of stock was retained in the law in order to subserve some purpose. If it was intended by Article 571 to empower a corporation to increase the capital stock to an unlimited amount, why provide by Article 576 a method by which such stock could be increased within a certain limit?"
And further states:
"We apprehend, therefore, that the provision contained in Article 576 was retained in the statute for a definite object, and that such object was to place limitations upon the increase of the capital stock of corporations organized under the general law, both as to the amount of the increase and as to the manner in which such increase should be effected."
Again, referring to the case of Palmer v. Bank of Zumbrota,et al., in a decision of the Supreme Court of Minnesota, reported in 75 N.W., p. 380, text 381, we find the following language.
"We have been referred to no other statutory provision which it is claimed authorizes an amendment of the articles of incorporation so as to provide for an increase of the capital stock of such a bank, unless said Section 18 of *Page 818 Chapter 33 as originally passed, authorized such an amendment. This section reads as follows:
" 'Section 18. It shall be lawful for any person or association of persons organized under the provisions of this chapter, by his or their articles of association to provide for an increase of their capital stock, and of the numbers of such association, from time to time, as they may think proper.'
"Respondents contend that this section authorizes an increase in the capital stock only when the original articles of incorporation provide for such an increase in the future. We are of the opinion that, even though the original articles do not so provide, the section authorized a subsequent amendment of the articles so as to provide for an increase of the capital stock. Section 14 of Article 33 as originally enacted, provides that 'no change shall be made in the articles organizing such a bank whereby the rights, remedies or securities of existing creditors shall be in any manner impaired.' This evidently contemplates changes or amendments in the articles, but there is no section or provision in the Act, unless it is Section 18, which expressly authorizes any change or amendment. Again, Section 11 provides that the articles of incorporation shall specify: 'Third: The amount of capital stock, and the number of shares into which the same shall be divided.' "
And further on the Court says:
" 'Then we are of the opinion that the Legislature intended to provide, by Article 18, that the amount of the capital stock might be increased by an amendment of the articles 'from time to time.' "
The Supreme Court of Minnesota further held in this same case, at page 382 text:
"But this statute is wholly silent as to the method of *Page 819 proceeding to make the amendment. In such a case the same formalities that were required with reference to the execution, filing, and publication of the original articles when such a corporation is organized will be required with reference to the amendment."
This same case further held:
"There are other formalities which were required as to the original articles which were not complied with as to the amendment. Then it is plain that the statute was not complied with in the attempt that was made to increase the amount of the capital stock. But in our opinion it does not follow from this that the new stock is void for all purposes. As to creditors who have become such on the faith of the new stock, the holders of the same are estopped to deny its validity."
Sections 6014 (4085), 6016 (4087), and 6069 (4138), Compiled General Laws of Florida, 1927, read as follows:
"6014 (4085). Method of Increase. — Any corporation may increase its capital stock to any amount by holding an election of the stockholders at its place of business, having published notice of the time and place and object of the meeting once a week for four weeks prior thereto, in one newspaper published in the county, and having served or mailed the usual notice for stockholders' meetings; and if at any such meeting two-thirds of all the stockholders in the corporation shall vote to increase the capital stock, it shall be the duty of the president, within thirty days thereafter, to make a return to the Secretary of State under oath, of the amount of such increase, and the terms on which such additional stock is issued, and from the time the said return is filed the increase of stock shall be authorized, and when issued shall become a part of the capital."
"6016 (4087). Method of Amending Charter. — Any *Page 820 corporation desiring to alter or amend its charter shall adopt the proposed alteration or amendment by a vote of three-fourths of all its stock, at a meeting held for that purpose, and called and notified as provided for meetings for increase of capital stock. If the proposed alteration or amendment shall be so adopted, the corporation shall give not less than five days' notice of the intention to apply to the Governor therefor by at least one publication in some newspaper published in the county wherein the principal place of business is located, setting forth the desired alteration or amendment. The corporation shall prepare a certificate, under the common seal, of the proposed alteration or amendment as adopted as aforesaid, which certificate shall be on file in the Secretary of State's office during the time of publication, and afterwards, together with the proof of publication and notice, shall be produced to the Governor, who shall examine the same, and if he finds it to be in proper form, and that due notice has been given, and that the proposed alteration or amendment will be beneficial and lawful, and not injurious to the community, and is in accord with the purposes of the charter, he shall approve thereof, and thereupon letters patent shall issue reciting the alteration or amendment, and the said letters patent shall then be recorded in the Secretary of State's office, and then in the office of the clerk of the circuit court where the original charter was recorded, and from the date of the recording in the Secretary of State's office, the said alteration or amendment shall be deemed and taken as a part of the charter. (Ch. 9123, Acts 1923, Sec. 2; Ch. 9124, Acts 1923, Sec. 2)."
"6069 (4138) REGULATED. — Any banking company formed under this chapter may by its charter provide for an increase of its capital from time to time, as may be deemed *Page 821 expedient, subject to law; but the maximum of such increase to be provided in the charter shall be determined by the Comptroller, and no increase of capital stock shall be valid until the whole amount of such increase is paid in and notice thereof has been transmitted to the Comptroller and his certificate obtained specifying the amount of such increase of capital stock, with his approval thereof, and that it has been duly paid in as a part of the capital of such company. No reduction of capital stock shall be made below the minimum. (Id. Sec. 11, 12.)."
While it is argued by defendant in error:
"A banking corporation, having exhausted its authority to increase its capital stock by reason of the fact the maximum sum stated in its charter has been reached, cannot further increase its capital stock, without proceeding to amend its charter under the provisions of Section 6016," we are unable to agree with this statement. It is insisted by defendant in error that Section 6069 stating any banking company formed under this charter "may provide by its charter for an increase in its capital from time to time" is exclusive and that this statute points out the mode of increasing the capital; and reference is made to an opinion of the Attorney General of the United States given to the Secretary of the Treasury, February 23rd, 1882, in which three things are pointed out, as necessary to increase capital of a national bank under the federal statute, which was almost identical in terms with the section mentioned — 6069, viz.:
"First, that the association in the mode pointed out in its articles, and not in excess of the maximum provided for by them, shall assent to an increased amount;
"Second, that the whole amount of the proposed increase shall be paid in as part of the capital of the association; *Page 822
"Third, that the comptroller of the currency, by his certificate specifying the amount of such increase of capital stock, shall approve thereof, and certify to the fact of its payment."
This appears to have been a correct statement of the law relating to that provision of the federal statute. The same statements are found in the case of Winters v. Armstrong, reported in 37 Federal Reporter 508, text 511 and taken from the case of Delano v. Butler, 118 U.S. 649. That "the mode pointed out is the mere authority to act, we are not able to agree. The mode pointed out may be merely by a vote of the Board of Directors. The mode pointed out may also deal with the notice, if any, that is to be given. This we think is made clear by the oft-cited case of Delano v. Butler reported in118 U.S. 649, in which the court stated the facts affecting the increase of stock of Pacific National Bank, as follows:
"The Pacific National Bank was duly organized and authorized to do business as a National Bank under the provisions embraced in Title 62 of the Revised Statutes of the United States and located in Boston in October, 1877. Its capital stock was 'fixed at five hundred thousand dollars, paid in cash, with the right to increase it to a million dollars. It continued business on this basis until September 13th, 1881, when it appears by the records of a meeting of the board of directors held in Boston it was voted 'that the capital stock of this bank be increased to one million dollars and that stockholders of this issue have the right to take the new stock at par in equal amounts to that now held by them.' "
It is therefore evident that the holding of this Court that under the statutes of Florida there exists authority for an *Page 823 increase of the capital stock of a banking corporation, is well supported by authorities of other jurisdictions.
We then reach the question: Is there power vested in a banking corporation to increase its capital without securing an amendment to its charter. In an able and exhaustive brief of counsel for defendant in error, we are given the history of Sections 6014 and 6016 and 6069, Compiled General Laws (1927): Section 6016, being the Act of 1923, is the final amendment of Section 3, Chapter 3165 of the Laws of 1879. The defendant in error insists that if the capital stock of this bank could beincreased, it could be increased in no manner except by securing an amendment to the charter. His reasoning therein is supported by statement in the decision of Randall v. Mickle, 138 Southern 14 and 141 Southern 317. However, when it is borne in mind, as shown by brief of counsel for defendant in error, that Section 6014 permitting any corporation to increase its capital stock to any amount by holding an election of the stockholders, as therein provided, was enacted in 1868, and that this section minutely prescribes the notice to be given, and that Section 6016 above referred to, dealing with amendment to charters, provides that: 'a meeting held for that purpose shall be called and notified as provided for meetings forincrease of capital stock' we are compelled to hold that our own Legislature has dealt with the amendment of a charter of a corporation for profit whereby the capital stock is increased as being a separate and distinct act from an amendment of its charter in any other particular. In other words, while, under the general law for the incorporation of any corporation for profit, the amount of capital stock authorized, and the number and par value of shares into which it is to be divided, and the number and par value of shares into which it is to be divided, and the terms and conditions *Page 824 upon which it is to be paid, are required to be stated in the charter, yet, prior to the time such a corporation was authorized to amend its charter, there was given to it authority to increase its capital stock, as provided and set forth in Section 6014 C. G. L. (1927).
Now, it is insisted that Section 6014 does in effect read: That any corporation (except a banking corporation) may increase its capital stock to any amount. A banking corporation is authorized according to law to amend its charter so as to provide for an increase of its capital stock, merely because it is permitted and allowed, and not required, to provide in its charter; that is, anticipate and prescribe the manner, method and mode, for an increase of its capital stock from time to time; however, under the provisions of Section 6069, if the charter of a banking corporation does provide for an increase of its capital stock from time to time, the amount provided, that is, the maximum amount provided, must be determined by the Comptroller. If a charter of a banking corporation provided for an increase in capital stock, we think by an amendment of its charter, as above stated, provision could be made changing the amount or maximum amount of its capital stock, provided the same was determined by the Comptroller; and in the event the charter of a bank made no provision for an increase of its capital stock, since it is permitted to so provide in its charter, an amendment might be made pursuant to law, the maximum increase to be provided in the charter being determined by the Comptroller. Whether or not that is the exclusive method in which the capital stock of a banking corporation may be increased is a question now before this Court upon the pleadings in this case. Section 6014 antedates Section 6069, which we think is material in construing the intent of the Legislature, and since corporations for *Page 825 profit generally may increase capital stock notwithstanding the positive statement in the charter originally granted fixing the amount of stock and the number of shares, without in any other wise amending the charter, we are compelled to hold: the increase of capital stock and the amendment of a charter are dealt with by our lawmakers as two separate and distinct acts, and that a banking company merely had the added privilege of prescribing the mode, method and manner of increasing its capital stock from time to time, subject to law, provided theamount provided in its charter, originally or by amendment, is determined by the Comptroller. We have not overlooked Section 6051, C. G. L. (1927), relating to corporations for profit, and immediately proceeding the sub-chapter relating to banking corporations and companies, as follows:
"The foregoing provisions shall apply to every class of corporation for profit, except as limited by the special provisions of the Sub-Chapters hereof."
We are therefore further compelled to hold that the increase of the capital stock of a banking corporation, whether made by amendment of the charter or pursuant to Section 6014 is subject to that portion of Section 6069 which says:
"And no increase of capital stock shall be valid until the whole amount of such increase is paid in and notice thereof has been transmitted to the Comptroller and his certificate obtained certifying the amount of such increase of capital stock, with his approval thereof, and that it has been duly paid in and is a part of the capital stock of the company."
This last quoted portion of Section 6069 in our opinion constitutes the only limitation upon the authority of a banking corporation to increase its capital stock, as provided in Section 6014; in other words, by full compliance with Section 6014. It is provided therein: "From the time the return *Page 826 is filed the increase shall be authorized, and when issuedshall become a part of the capital." Therefore, when the same has been authorized, stock issued and the amount of the increase is paid in, and notice has been transmitted to the Comptroller and a certificate obtained specifying the amount of such increase, with his approval, and it has been paid in as a part of the capital stock of the company, the same is valid in all particulars. Under the banking laws by which the Bank of Bay Biscayne was organized, it was not authorized to do business in the beginning until its capital stock has been fully paid in and the Comptroller had approved and certified to such fact; and had it undertaken to do business, other than such as was incidental and necessary to its preliminary organization, until it had been authorized to do so by the Comptroller, its stockholders would have been personally liable for all its debts as if they were members of a partnership andnot stockholders of a corporation. Section 6060 C. G. L. (1927); and yet, by Section 6077 (4146) C. G. L. (1927), it is recognized that at times the capital stock of a banking corporation has not all been fully paid in, and whether this law is made anticipating such failure to fully pay in the capital stock in the beginning or by amendment appears immaterial. By this section it is provided that every banking company which shall have failed to pay up the capital stock as required by law, and every banking company whose capital stock shall have become impaired by losses or otherwise, shall, upon receiving notice thereof from the Comptroller, pay the deficiency in the capital stock by assessment on the stockholders pro rata for the amount of the capital stock held by each. If any such company shall fail to pay up its capital stock and shall refuse to go into liquidation as provided by law, within the time mentioned in the notice from the Comptroller, *Page 827 a receiver may be appointed to close up the business of the company according to the provisions of Section 6102.
An interesting case dealing with corporate authority, and likewise a case that has some bearing on the questions here presented, is that of Smith v. Milton, et al., reported in 54 Southern, p. 719.
That case involved the legality of a bond issue of the Town of Marianna. The general law by which the town was governed, Chapter 5465, Acts of 1905, permitted the issuance of bonds for purposes therein specified, providing, however, the amount should not exceed ten (10%) per cent of the assessed value of all real and personal property within the corporate limits.
By Chapter 5517, Laws of 1905 (a special Act applicable to the Town of Marianna alone), authority was given to issue $25,000.00 of bonds in excess of $10,000.00 of bonds then already issued. The issuance of the bonds thereby authorized exceeded 10 per cent of the assessed value of all real and personal property within said corporate limits.
This Court stated: "The sole question presented by this appeal is whether the general Act, Chapter 5465, approved May 19th, 1905, is, so far as the town of Marianna is concerned, superceded or repealed by Chapter 5517, approved May 31st, 1905."
It was held the general Act, the authority to issue bonds, is a continuing power that keeps even pace with any increase from time to time in the accumulation of tax assessable property within the corporate limits, and is at all times limited to ten per cent of the assessed value of such property.
It was further stated, among other things: "The special Act supplies an emergency only, and after such emergency is met, such special Act becomes functus officio." *Page 828
Since the Bank of Bay Biscayne did have authority under Section 6014 to increase its capital stock, the plea in this cause failed to state a defense and the demurrer to the replication should have been visited upon the plea, with leave to further plead.
The holding in the original opinion in this case that power is vested in the bank under Section 6016 to amend its charter, is modified to conform herewith. The holding in the case of Randall v. Mickle in 138 Southern, p. 14, and in 141 Southern, p. 317, is disapproved to the extent only that it states a banking corporation was without authority to increase its capital stock without securing an amendment of its charter providing for such increase as provided in Section 6016.
Judgment of reversal reinstated on rehearing, and cause remanded for further proceedings not inconsistent with this opinion or the original opinion as hereby supplemented and modified.
It is so ordered.
DAVIS, C. J., and WHITFIELD, TERRELL and BUFORD, J. J., concur.
BROWN, J., disqualified.