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Legal and Business Publications of
The Ronald Press Company

229 BROADWAY, NEw YoRK

CORPORATE ORGANIZATION.
By THomas CONYNGTON, of the New York Bar. 400
pp. 6x9 in. 1908. Buckram binding.
Prepaid price, $3.00
CORPORATE MANAGEMENT.
By THOMAS CONYNGTON. Third Edition. 400 pp.
6x9 in, 1909, Buckram binding.
Prepaid price, $3.50
CORPORATION LAWS OF ALL STATES.
By M. U. OVERLAND, of the New York Bar. 500 pp.
6x9 in. 1909. Interleaved Edition. Buckram binding.
Prepaid price, $4.00
MAINE CORPORATIONS.
By H. M. HEATH, of the Maine Bar. 300 pp. 6x9
in. 1907, Buckram binding.
Prepaid price, $3.00
NEW YORK CORPORATIONS.
By RicHARD HARRISON, of the New York Bar. 500
pp. 6x9 in. 1909. Second Edition. Revised and
Enlarged. Buckram binding.
Prepaid price, $4.00
CONDITIONAL SALES.
By Frep BENSON HARING, of the Buffalo Bar. 370 pp.
6x9in. Interleaved Edition. 1909. Buckram binding.
Prepaid price, $5.00
PARTNERSHIP RELATIONS.
By THOMAS CONYNGTON. 221 pp. 6x9 in. 1905.
Buckram binding.
Prepaid price, $2.00
FINANCING AN ENTERPRISE.
By FRANCIS Cooper. 545 pp. 534x 8% in. 1907.
Second Edition. 2 vols. Buckram binding.
Prepaid price, $4.00
CORPORATE FINANCE AND ACCOUNTING.
By H. C. BENTLEY, C.P.A. 500 pp. 6x9 in. 1908,
Buckfam binding.
Prepaid price, $4.00

CIRCULARS ON APPLICATION

 

 
A MANUAL

OF

NEW YORK CORPORATION LAW

CONTAINING

The Important Statutes Regulating Business Incor-
porations, a Digest of these Statutes and the
Principal Forms Used by Corporations
Operating in the State of
New York

BY
RICHARD COMPTON HARRISON
OF THE NEW YORK BAR

Second Edition
Revised and Enlarged

with Supplement

NEW YORK
THE RONALD PRESS

1911
S
6101
ey

‘ 265672.

Copyright 1906
by

Tue Ronatp Press CoMPANY

Copyright 1909
by

Tue Ronatp Press Company

Copyright 1911
by

Tue Ronatp Press Company
PREFACE TO SECOND EDITION.

As stated in the preface to the first edition, “The pur-
pose of the present work is to furnish in compact and con-
venient form the usual law and procedure governing business
corporations in the State of New York.” The adoption of
the Consolidated Laws by the legislature at its recent session
has necessitated a new edition of “New York Corporations.”
The author has taken advantage of this fact to make such
additions and changes in the volume as will in his judgment
more fully carry out its stated purpose.

The work is now divided into four parts, viz., (1)
Procedure; (2) Forms; (3) Tables; (4) Statutes.

Part I presents the law and procedure governing the
organization and management of business corporations in
the State of New York. In the present edition a chapter
on receiverships has been added, the treatmént of dissolu-
tion is more complete than heretofore, and the text has
been revised in accordance with recent legislation, judicial
determinations and official rulings.

In Part IT the forms most frequently used in New York
corporate procedure are given as precedents. Most of these
are direct copies of actual instruments changed only as to
identifying details. In the present edition the number of
these forms has been materially increased and the forms of
the preceding edition have been modified wherever neces-
sary to meet changes in the statutory law, or in the rulings
of state officials.

Part III is new in the present edition and consists wholly
of tables. Tables of fees give in convenient reference form
the fees payable to state and local officials in every important

111
iv PREFACE.

corporate action or process. Comparative tables are also
included, giving the present and former section numbering
of the statutes relating to corporations. These will be found
of much convenience in establishing the connection between
the corporation laws as heretofore arranged and numbered
and as now found in the Consolidated Laws.

Part IV contains the full present text of the Business
Corporations Law, of the General Corporation Law and of
the Stock Corporation Law. It also includes the text of
those sections of the Tax Law, of the Code of Civil Pro-
cedure and of the Penal Law which apply particularly to
corporations, together with such miscellaneous statutes as are
of special interest.

A large number of the forms presented have been secured
through the courtesy of Mr. Thomas Conyngton. To him and
to numerous other friends who have made helpful suggestions
or criticisms, the author takes this opportunity of expressing
his thanks.

RicHARD C. Harrison.
New York, June 1, 1909.
CAN ANDAwWHH

10.

II.
12.
13.
14.

15.

16.
17

18.

19.
20.

2i.

22.
23.
24.

25.

26.

TABLE OF CONTENTS.

PART I.—PROCEDURE.

Chapter I. Corporation Laws.

. Creation of Corporations.

. Constitutional Provisions.

. Statutes,

. Business Corporations Law.

Stock Corporation Law.

. General Corporation Law.

. Relative Force of General and Special Statutes.
. General Statutory Law.

. Common Law.

Chapter II. Expenses of Incorporation.

Organization Expenses.
Organization Tax.

Fees to Secretary of State.

Fees to County Clerk.

Table of Organization Expenses,

Chapter III. Certificate of Incorporation.

Incorporators.
Certificate of Incorporation.
. Contents of Certificate of Incorporation.
(1) Name.
(2) Corporate Purposes,
(3) Capital Stock.
(4) Shares. Initial Capital,
(5) Location.
(6) Duration.
(7) Number of Directors,
(8) Names,
(9) Subscribers.
(10) Special Provisions.
vi

27.
28.
20.
30.

31.

32.

33-
34.
35-
36.
37.
38.
39.

40.
41.

47.

49.
50.

SI.

52.
53.
54.
55-

56.

57-
58.

59.

60.
61.

TABLE OF CONTENTS.

Execution of Certificate.
Filing and Recording. State.

Local.
Allowance.

Chapter IV. By-Laws.

Preparation.
(1) Meetings and Elections.
(2) Directors.
(3) Officers,
(4) Capital Stock.
Adoption.
General.
Observance.
Repeal.

Chapter V. First Meetings.

First Meeting of Stockholders.
Notice of Stockholders’ First Meeting.

. Minutes of Stockholders’ First Meeting.
43.
. Acceptance of Charter.

45.
46.

Organization of Stockholders’ First Meeting.

By-Laws. Stockholders’.
Exchange of Stock for Property. Stockholders’ Actio1
Other Business. Stockholders’ First Meeting.

. First Meeting of Directors.

Organization of Directors’ First Meeting.
Issue of Stock for Property.
Miscellaneous Business. Directors’ First Meeting.

Chapter VI. Corporate Existence.

When Commenced,
Beginning Business.

Renewal,
Forfeiture of Charter.
Dissolution.
Chapter VII. Corporate Powers,
General.

(1) To Have Succession.

(2) To Appoint Officers and Agents.
(3) To Make By-Laws.

(4) To Have a Seal.
TABLE OF CONTENTS.

(5) To Acquire, Hold and Dispose of Property.

. Power to Hold Property in Other States.

. Power to Hold Its Own Stock.

. Power to Hold Stock of Other Corporations.

. Status of Holding Corporations.

. Power to Borrow Money. Corporate Bonds. Mortgages.
. Power to Guarantee Debts of Other Corporations,

. Power to Do Business in Other States,

. Consolidation of Corporations.

. Merger.

. Amendment of the Charter,

(a) To Secure New Purposes of Same General Character.
(b) Increase of Capital Stock.

(c) Decrease of Capital Stock.

(d) Increase or Decrease of Number of Shares.

(e) Change of Number of Directors.

(£) Change of Location of Principal Office.

(g) Classification of Stock.

(h) Extension of Corporate Existence.

(i) Change of Corporate Name.

z2a. Filing and Recording Charter Amendments.

73-

74.
75:
76.
77.
. Redemption of Preferred Stock.
79.
80.
81.
82.
83.
. Consideration for Issue.
85.
. Increase or Decrease.
87.
. Dividends.

Ultra Vires Acts.
Chapter VIII. Capital Stock.

Capital Stock. Statute Requirements as to Payment.
Amount of Capitalization.

Classes of Stock. Common and Preferred.
Classification of Stock. After Organization.

Other Classifications.

Par Value of Shares.
Subscriptions,

Stock Certificates.

Lost and Destroyed Certificates,

Calls for Subscription Installments.

Transfer of Stock.

Chapter IX. Stockholders,

. Creation of the Relation,
90.

Rights of Stockholders. Collective.
(a) Mortgages.
(b) Conversion of Obligations into Stock.
vili

gl.

92.

93-
94.
95.
96.
97.
08.

§ 99.

100.
101.

102.
103.
104.
105.
106.
107.

TABLE OF CONTENTS.

(c) Sale of Property and Franchise.

(d) To Guarantee Bonds.

(e) Consolidation.

(f) Renewal.

Rights of Stockholders. Individual.

(a) Right to Notice; Voting.

(b) Dividends.

(c) Stock Certificates,

(d) Transfer of Stock.

(e) Inspection of Corporate Books and Records.

(f) Financial Statement.

(g) Dissolution.

Liability of Holders of Full Paid Stock.

(a) Liability to Employees.

(b) Full Liability Companies,
Liability of Holders of Stock Not Full Paid.
Personal and Representative Liability.
Relations of Stockholders to Each Other.
Relations of Stockholders to the State.
Powers of the Majority.

Voting Trusts.

Chapter X. Stockholders’ Meetings.

General.
Place.
Notice.
(a) Waiver of Notice.
(b) Notice of Annual Meeting.
(c) Notice Same as for Annual Meeting.
(d) Stockholders’ Notice of Special Election of Directors.
(e) Notice of Meeting for Increase or Decrease of Capital

Stock,

(f) aienice of Meeting to Change Number of Directors.

(g) “to Alter or Extend Business.

(h) ef . for Dissolution.

(i) sf oe" to Guarantee Bonds of Another Corpor-
ation.

(j) Notice of Meeting When Not Otherwise Provided.
Quorum.
Right to Vote.
Proxies.
Closing Stock Books.
Election of Directors.
Cumulative Voting.

108. Inspectors of Election.
109.
TIO.
III.
112.

113.
114.
115.
116.
117.
118.
1g.
120.
I2I.
122.
123.
124.
125.

126.

127.
128.
129.
130.
131.

132.
133.

134.

135.

136.
137.

TABLE OF CONTENTS.

Challenges.
Contested Elections.

Effect of Failure to Elect Directors,

Special Elections.

ix

Chapter XI. Directors.

Number.

Election.

Classification.

Vacancies,

Qualifications of Directors.
Compensation of Directors.
Powers of Directors.

Powers of Directors in Case of Dissolution.
Relations of Directors to Corporation and Stockholders.

Directors’ Liability for Negligence.
Statutory Liability of Directors.

Directors’ Liability to Creditors.
Directors’ Meetings.

(a) Place.

(b) Notice.

(c) Quorum,

(d) Voting.

Standing Committees.

Chapter XII.

The Corporate Officers.
Qualifications.
Security.
Powers.
Personal Liabilities of Officers.
(a) To the Corporation.
(b) To Third Persons.
(c) Penal Statutory Liability.
Tenure of Office.
Compensation.

Chapter XIII. Principal Office.

Location of Principal Office.
Corporate Books.

The Stock Book.

Right to Inspect Corporate Books.

Officers.

Corporate Books.
§ 138.
139.
140.
141.
142.
143.
144.
145.

146.

147.
148.

149.

150.
I5I.
152,

§ 153.
154.

155.

156.
157.
158.
159.
160.
161.
162.
163.
164.
165.
166.
167.

168.

169.

170.

I7I.

172.

§ 173.
174.

TABLE OF CONTENTS.

Chapter XIV. State Taxation.

Franchise Tax.

“Capital Stock Employed Within the State.”

Deduction of Debts.

United States Securities.

Patents and Copyrights.

Good-Will.

Meaning of “Employed Within the State.”

Classification of Corporations for Purposes of Franchise Tax-
ation.

(1) Corporations Paying Dividends Not Less Than Six Per
Cent.

(2) Corporations Paying No Dividends.

(3) Corporations Paying Dividends Less Than Six Per Cent.

Corporations Exempt from Franchise Tax.

What Are Manufacturing Companies?

Stock Transfer Tax.
" a 5 Rules of the State Comptroller’s Office.

Chapter XV. Local Taxation.

Tax District.
Taxation of Realty.
Taxation of Personalty.
Place of Assessment of Personalty.
Manner of Assessing Personalty.
Deductions before Assessment of Personalty.
(1) Real Estate.
(2) Debts and Liabilities.
(3) Shares of Stock.
(4) Surplus or Reserve.
(5) Stock Held by State, etc.
(6) Property in Other States.
(7) United States Securities.
(8) Patents and Copyrights.
(9) Imported Goods.
(10) Good-Will
(11) Mortgages.
Date of Assessment.
New York City.
Special Franchises.

Chapter XVI. Reports.

Required Reports.
Annual Report.
TABLE OF CONTENTS. xi

175. Report to State Comptroller. Franchise Tax.
176. Local Tax Report.

Chapter XVII. Foreign Corporations.

177. Status of Foreign Corporations.

178. What Constitutes “Doing Business in the State.”
179. Foreign Corporations with Resident Incorporators.
180. Procedure to Secure Admission to State.

181. Fees.

182. Status of Foreign Corporations when Licensed.
183. Penalties for Non-Compliance.

184. Principal Office.

185. State Taxation. License Tax.

186. “ “ Annual Privilege Tax.

187. Local Taxation.

188. Books Required to be Kept by Foreign Corporations.
189. Reports.

190. Attachment Against.

Chapter XVIII. Receivers of Corporations,

(a) TeMporRARY AND PERMANENT RECEIVERS.
191. Classification.
192. Jurisdiction of Court to Appoint.
193. Qualification.

(b) Powers anp Duties of PERMANENT RECEIVERS.

194. Notice to Creditors.
195. Employment of Counsel.
196. Collection of Assets. General.

197. e “From Debtors.
198. « : From Persons Holding Corporate Property.
199. “ From Mortgagees and Pledgees.

200. Conversion of Estate into Money.
201. Care of Funds. Accounts.
202. Distribution of Assets.
(a) Creditors’ Meetings.
(b) Proof of Claims.
(c) Order of Distribution.
203. Fees of Receivers.
(a) In Voluntary Dissolution.
(b) In Other Receiverships.
204. Final Accounting.
205. Resignation and Removal of Receivers.
Xil

TABLE OF CONTENTS.

PART II—FORMS AND PRECEDENTS.

Chapter XIX. Subscription Lists and ‘Receipts.

(a) Susscription Lists.

Form.

I.

SPOMN AAUP YWDND

al

Form.

II.
12.

13.
14.

. te

16.
17.

18.

19.

Subscription List.
“ “  Trustee’s.

. Subseriveion Agreement. Conditional.

- Subscription Blank. Individual.

> After Organization,

b) REcEIPTS FOR SUBSCRIPTION PAYMENTS.
. Trustee’s Receipt.

. Installment Scrip.

. Indorsement of Installment Payments,

. Interim Receipt.

. Temporary Stock Certificate.

Chapter XX. Stock Certificates and Stock Books.

Stock Certificate. Common.
is Preferred.
Assignment of Stock Certificate. In Blank.
me < Complete.
Indemnity Bond, Lost Certificate.
Transfer Book.

Condensed.
Stock Book and Stock Ledger.

“ “

Chapter XXI, Charter and By-Law Forms

(a) CHarTER Forms.

Form.
20.
21.
22.
23.

®
Certificate of Incorporation. Usual Form.
. . Extended Purposes.
ss " Preferred Stock,
‘ ss Special Provisions.

(b) By-Law Forms.

24.
25.

By-Laws. Short Set.
ff Extended Form.

25a. Certification of By-Laws.
TABLE OF CONTENTS. xiii

Chapter XXII. Forms for First Meetings,

Form.
26. Proxy.
27. Call and Waiver. Stockholders’.
28. a € Directors’.

29. Exchange of Property for Stock. Proposal.
30. Assignment of Incorporators’ Subscriptions.
31. Exchange of Property for Stock. Stockholders’ Resolution.

32. af a “ Directors’ e
33. Minutes. Stockholders’.
34. ° Directors’.

35. Assignment of Property.

Chapter XXIII. Forms for Meetings.
(1) StockHotpErs’ MEETINnGs.

(a) Proxies.
Form.
36. Proxy. Simple.
37. Formal Proxy. Annual Meeting.
38. Proxy for Specific Action.
39. Revocation of Proxy.

(b) Calls and Notices.
4o. Call for Special Meeting.
41. Notice of Special Meeting.
42. Notice of Annual Meeting.

“

43. a tba Publication.

44. “ “ “ cig
45.

“c “ “ “

(c) Inspectors’ Oaths and Certificates.
46. Oath. Inspectors of Election.
47. Certificate. Inspectors of Election.
48. Acknowledgment of Inspectors’ Certificate.

(d) Minutes.
49. Minutes of Annual Meeting.

_(2) Drrectors’ MEETINGS.

50. Call. Special Meeting of Directors.

51. Notice. “ rs

52. Call and Waiver. Special Meeting of Directors.
53. Notice. Regular Meeting of Directors.

54. Minutes. “ £
XIV TABLE OF CONTENTS.

Chapter XXIV. Signatures and Certifications.

Form.
55. Official Signatures.
56. Corporate Signatures.
57. Corporate Indorsements.
58. Corporate Acknowledgment.
59. Treasurer’s Affidavit.
60. Certification. Extract from Minutes.
61. Certified Resolution for Bank.
62. Certification of Resolution.

Chapter XXV. Forms of Reports.

Form.
63. Certificate. Payment One-Half Capital Stock.
64. Annual Report.
65. Report to Comptroller.
66. Statement to Comptroller. To Secure Exemption as Manufactur-
ing Corporation.
67. Local Tax Report. General Form.
68.“ fe eS New York City.

Chapter XXVI. Statutory Forms.

(1) AppLicaTION FoR ADMISSION To STATE By Forgrcn CorporaTIons.

Form.
69. Statement and Designation of Agent. Foreign Corporation.
70. Consent of Agent. Foreign Corporation.
71. Affidavit to Certificate of Incorporation. Foreign Corporation.

(2) Acrncy CHANGES. ForrIGN CoRPORATION.

72. Revocation and New Designation of Agent. Foreign Corporation.
73. Revocation of Agent’s Consent. Foreign Corporation,
74. Certificate of Change of Office. Foreign Corporation.

(3) CuarteR AMENDMENTS,
75. uate of Name, Resolution of Directors Authorizing Change.

76. as Publication Notice,

77. a Petition.

78. . Order.

79. Change of Principal Office. Written Consent of Stockholders.
80. a Certificate of Removal.

81. ‘7 7 a Vote of Stockholders.

82. Classihestion of Stock. Publication Notice.

83. ee Certificate.

84. Increase of Stock. By Unanimous Consent.
TABLE OF CONTENTS. XV

85. Increase and Classification of Stock.
86. Increase of Number of Directors, Notice of Meeting.

87. “ ef Proof of Service.
88. sh € Transcript of Proceedings,
80. x re By Unanimous Consent.

(4) Exections or Direcrors.
90. Challenges. Oath of Voter.
ol. Oath of Proxy.
92. Stockholders’ Notice of Special Election.
93. Sworn Statement of Membership.
94. Application to Supreme Court. Review of Election.

(5) DissoLution.
95. Dissolution Without Judicial Procedure. Certificate.

96. e Consent of Stockhold-
ers.

97. ns “ vi Statement of Secretary.

08. fe i fe & Affidavit of Secretary.

99. Voluntary Dissolution. Petition.

100. oh “ Schedule.

101. of ff Affidavit.

102. we a Notice of Application.

103. s eS Order to Show Cause.

104. « a Appointment of Referee.

105. ce i Notice of Order. Referee.

106. - i Report of Referee. é

107. . “ Schedule of Assets and Creditors.

108. od “ Final Order and Appointment of Receiver.

(6) Votinc Trusts.
109. Voting Trust Agreement,

Chapter XXVII. Forms Relating to Dividends.

Form.

110. Resolution Declaring Dividend.

III. “ ne Preferred Dividend.

112, Notice of Dividend. Mailing.

113. f Publication,

114. ae “a “

Chapter XXVIII. Bond Issues.

Form.

115. Stockholders’ Resolution Authorizing Mortgage.

116, e Written Consent to Mortgage.

117. Certificate of Consent to Mortgage.
xvi

118.
19.
120.
121.
122.

Table.
. Organization Expenses and Franchise Tax.
. State Fees.

BROWN eH 5

nw

SO MN ANSE

TABLE OF CONTENTS.

Directors’ Resolution Authorizing Bond Issue.
Coupon Bond.

Coupon.

Trustee’s Certificate.

Deed of Trust.

PART III—TABLES.

(a) Fees to Secretary of State.
(b) Fees to Comptroller.

. Local Fees.

Fees to County Clerks.

. General Schedule of Fees.
. Corporate Calendar.

Comparative Section References. Business Corporations Law.
# s “ General Corporation Law.

Stock Corporation Law.

& a ne Tax Law.

" Code of Civil Procedure,

Penal Law.

PART IV. STATUTES.

. Business Corporations Law.
. General Corporation Law.
. Stock Corporation Law.

. Tax Law.

(a) Local Tax.
(b) State Tax.
(c) Stock Transfer Tax.

. Code of Civil Procedure.
. Penal Law.
. Miscellaneous Statutory Provisions Affecting Corporations.
INDEX OF TABLES.

 

The following reference tables will be found in Part III of the
present volume:

General Tables,

Page
Table No. 1. Organization Expenses and Franchise Tax....... 335
" 52, “State Pees. sidsaicnigittacgenwn iineeldaaseee dawns 336
(a) Fees to Secretary of State.
(b) Fees to Comptroller.
AS ge ( TO Gali GHECS.. hited squest 4 ada, oo wie PO eee wee S 337
(a) Fees to County Clerks.
" “4. General Schedule of Fees..................0000, 338
& “5. Corporate Calendar ............. 0... ccccee eee 340
Tables of Comparative Section References.
Table No. 6. Business Corporations Law.................000% 342
& “7. General Corporation Law ........... 0.00. cece 343
a “8. Stock Corporation Law ............ 0c cece eee eee 346
“ “9. Tax Law ..... Suesy wine ce basecnaars arbasPad clea eats 348
co “to. Code of Civil Procedure.........0.. 0. cece cease 349
NEW YORK CORPORATIONS.

 

PART I.—PROCEDURE.

 

CHAPTER I.
CORPORATION LAWS.

 

§ 1. Creation of Corporations.

Corporations are the creatures of the legislature and de-
rive their right to exist and their privileges entirely from legis-
lative grant. Thomas v. West Jersey Ry., 101 U. S. 71
(1879). The power of the legislature to create corporations
is absolute except where limited by the national or state con-
stitutions. Louisville Gas Co. v. Citizens’ Gas Light Co., 115
U. S. 683 (1885).

§ 2. Constitutional Provisions.

The New York Constitution provides as follows:

“Corporations may be formed under general laws; but
shall not be created by special act, except for municipal pur-
poses, and in cases where, in the judgment of the legislature,
the objects of the corporation cannot be attained under general
laws.” (Art. VIII, § 1.)

It is settled that this section leaves the necessity for in-
corporation by special act entirely to the judgment of the legis-
lature and that the existence of a general law under which a
corporation might be created, does not render a special act
of incorporation unconstitutional or open to judicial review.

19
20 NEW YORK CORPORATIONS.

Met. Bank v. Van Dyck, 27 N. Y. 400, 448 (1863). A char-
ter obtained under a general law may be amended by special
act. (GC. L,, § 920.) Inve P,P. & G 1. Ry, 67 Nz Y:
37

The Constitution, however, prohibits any private or local
bill (Matter of N. Y. El. Ry., 70 N. Y. 327, 345 [1877]):

(1) “Granting to any corporation, association or
individual the right to lay down railroad tracks. (Held
not to apply to a municipality. Sun v. Mayor of N. Y.,
152 N. Y. 257 [1897].)

(2) “Granting to any private corporation, associa-
tion or individual any exclusive privilege, immunity or
franchise whatever. In re Union Ferry Co., 98 N. Y.
139, 151 (1885).

(3) “Providing for public bridges and chartering
companies for such purposes, except on the Hudson River
below Waterford and on the East River, or over the wa-
ters forming a part of the boundaries of the State.” (Art.
III, § 18.)

State or municipal aid to private corporations is prohib-
ited. (Art. VIII, §§ 9, 10.) It is also provided that all cor-
porations shall have the right to sue and shall be subject to be
sued in all courts in like cases as natural persons. (Art. VIII,

§ 3.)
§ 3. Statutes.

In accordance with the provisions of Art. VIII of the
Constitution, the legislature has enacted general statutes which
provide for and control the organization and management of
business corporations. Prior to 1890 these laws existed—as
far as then enacted—only as disconnected session laws. In
that year, however, the legislature, in accord with the policy
of substituting general statutes for scattered session laws, col-
lected, classified and grouped most of these corporation laws
under distinctive titles. In 1909, with the adoption of the
Consolidated Laws, the classification of the corporation laws
CORPORATION LAWS, 21

was carried still further, resulting in material changes in their
arrangement.

The most important groupings of the corporation laws
are the “Business Corporations Law,” the “General Corpora-
tion Law,” and the “Stock Corporation Law.” In addition
to these, there are various special statutes as the “Transporta-
tion Corporations Law,” the “Railroad Law,” the “Banking
Law,” etc., etc.

§ 4. Business Corporations Law.

The statutes relating to the creation of stock corporations
“for any lawful business purpose or purposes other than a
moneyed corporation, or a corporation provided for by the
banking, the insurance, the railroad and the transportation
corporations laws, or an educational institution or corpora-
tion which may be incorporated as provided in the education
law” (B. C. L., § 2), are now grouped as Chapter 4 of the
Consolidated Laws and are entitled the “Business Corpora-
tions Law.” This law relates to business corporations only,
the term including trading, mining and manufacturing com-
panies and containing detailed directions for their formation,
consolidation and reorganization. (See Part IV for text of
Business Corporations Law.)

§ 5. Stock Corporation Law.

The statutory details relating to the management, rights
and powers of stock corporations of every kind, and the rights,
powers and duties of their officers, directors and stockholders,
are brought together as Chapter 59 of the Consolidated Laws
under the title the “Stock Corporation Law.” ‘This law ap-
plies to all corporations having a capital stock, including those
formed under the Business Corporations Law. It supplies
general provisions and details of procedure which are not
found in the Business Corporations Law. (See Part IV for
text of Stock Corporation Law.)
22 NEW YORK CORPORATIONS.

§ 6. General Corporation Law.

All those laws which apply to both stock and non-stock
corporations and which could not therefore: properly be in-
cluded in either the Business Corporations Law or the Stock
Corporation Law are grouped as Chapter 23 of the Consoli-
dated Laws under the title of the “General Corporation Law.”
Business corporations fall under this law also and are therefore
subject to the provisions of all three groups of statutes. This
necessitates reference to each group to determine the mode
of creation, the powers, privileges and obligations of corpora-
tions of this nature. (See Part IV for text of General Cor-
poration Law.)

§ 7. Relative Force of General and Special Statutes.

The character of the General and Stock Corporation Laws
is very sweeping and this has led the legislature to provide
that if they conflict with other corporate laws, the provisions
of these other laws shall prevail. (G.C. L., § 321.) If, how-
ever, another act covers a subject provided for by either law,
but is not in conflict therewith, the two are held to supplement
each other.

§8. General Statutory Law.

Additional statutory enactments affecting corporations,
given in Part IV of the present volume, are as follows:

The important provisions of the “Tax Law” applying to
corporations and to fhe transfer of their stock. (Con. Laws,
Ch. 60.)

The important provisions of the “Code of Civil Pro-
cedure” and of the “Penal Law” (Con. Laws, Ch. 40) ap-
plicable to corporations.

The provisions of the Labor Law applying more particu-
larly to corporations. (Con. Laws, Ch. 31.)
CORPORATION LAWS. 23

The statutory provisions as to fees to public officials and
tables of these fees are given in Part III of the present volume.

Important acts affecting corporations, but not considered
because they apply only to classes of corporations outside the
scope of the present volume, are as follows:

The “Transportation Corporations Law,” which covers
the incorporation and regulation of all transportation corpora-
tions except railroads, and includes navigation, gas, electric
light, telegraph and telephone corporations. (Con. Laws, Ch.
63.)

The “Banking Law,” which applies to state banks, sav-
ings banks, trust companies, building and mutual loan corpora-
tions, co-operative loan associations, mortgage loan and in-
vestment corporations and safe deposit companies, all of which
are referred to as “moneyed corporations.” (Con. Laws,
Ch. 2.)

The “Membership Corporations Law,” which applies to
corporations not formed for pecuniary profit. This law con-
tains provisions for the incorporation and management of cem-
etery and fire corporations, corporations for the prevention of
cruelty, hospitals, Christian, bar and veteran associations, sol-
diers’ monument corporations, boards of trade and agricultural
corporations. (Con. Laws, Ch. 35.) <A special law, known as
the ‘Benevolent Orders Law,” applies to societies which include
benefit insurance to members. (Con. Laws, Ch. 3.)

The “Insurance Law,” which regulates insurance com-
panies. (Con. Laws, Ch. 28.)

The “Railroad Law,” which applies to both steam and
street railways.

The “Religious Corporations Law,” which provides for
the incorporation of churches of all denominations. (Con.
Laws, Ch. 51.)

§9. Common Law.

All matters of corporate procedure not expressly provided
24 NEW YORK CORPORATIONS.

for by statute law, are governed by the rules of the common
law. These are, in the main, the same in all parts of the coun-
try. They are discussed incidentally in the present volume in
connection with the New York statute law, as the limits of
space prevent a full presentation.
CHAPTER II.
EXPENSES OF INCORPORATION.

 

§ 10. Organization Expenses.

The expenses involved in the formalities of incorporation
are primarily the organization tax on the capitalization of the
proposed corporation, the filing and recording fees to Secre-
tary of State and to the clerk of the county in which the prin-
cipal office is located, and the incidental fees for acknowledg-
ments, etc.

The fees for acknowledgments, etc., are usually trifling,
the entire necessary incidental expenses, including filing and
recording fees to Secretary of State and county clerk, rarely
exceeding $15.

§ 11. Organization Tax.

The organization tax is one-twentieth of one per cent.
(50 cents per $1,000) of the amount of capital stock author-
ized by the certificate of incorporation, but in no case less than
$1. (Tax Law, § 180.) This tax must be sent direct to the
State Treasurer—not to the Secretary of State—in cash, postal
or express order, New York draft or certified check, payable
to “State Treasurer” or “Treasurer of the State of New York.”
Checks sent in payment of the organization tax must, by a
rule of the Treasurer’s office, be certified.

Corporations formed by the reorganization or consolida-
tion of existing domestic companies (see §§ 70, 71), pay this
tax only upon capitalization in excess of the aggregate amount
of capital stock of the constituent companies. (Tax Law,
§ 180.) When a capitalization is decreased and subsequently
increased, the organization tax is paid only on the amount, if
any, in excess of the original capitalization. (Id.)

25
26 NEW YORK CORPORATIONS.

A reorganization of an existing corporation, under § 4 of
the Business Corporations Law, is a “corporate act’? and does
not result in the creation of a new corporation. Therefore
no tax need be paid, unless the capitalization of the company,
as reorganized, is increased. Matter of Kansas City Smelt-
ing Co., 13 App. Div. 50 (1897).

§ 12. Fees to Secretary of State.

The filing fee to Secretary of State is $10, regardless of
the amount of capitalization, and the recording fee is 15 cents
per folio of 100 words. These fees must be sent direct to the
Secretary of State together with the papers to be filed and re-
corded. A certificate showing due incorporation will be fur-
nished by Secretary of State upon payment of $1. If a certi-
fied copy of the charter is desired, it may be obtained upon pay-
ment of 15 cents per folio and $1 additional for certificate
under seal. (Ex. Law, § 26.) (See § 28; also Part III, Tables
2 and 4.) Remittance may be made in cash or by certified
check, New York draft, postal or express order.

§ 13. Fees to County Clerk.

The fees to the county clerk are 6 cents for filing charter
and 10 cents per folio for recording same. (Code Civ. Pro.,
§ 3304.) (See § 29; also Part III, Tables 3 and 4.) Ifa
copy of the charter is desired, it may be obtained from the
county clerk for 8 cents per folio of 100 words.

§ 14. Table of Organization Expenses.

A table of organization expenses is given in Part III of
the present volume (Table 1) and will be found convenient for
ready reference. In this table the incidental fees, estimated: at
$15, are added to the organization tax in computing the total
expense of incorporation. The franchise tax—on the basis
of a six per cent. dividend—is also given in order to facili-
tate computation of the general expense involved in incorpora-
tion.
CHAPTER III.

CERTIFICATE OF INCORPORATION.

§ 15. Incorporators.

Under the New York statutes, three or more qualified per-
sons may form a corporation for any lawful business other
than that of a moneyed corporation, or of a corporation formed
under the banking, insurance, railroad or transportation cor-
poration laws, or an educational institution or corporation
which may incorporate under the education law, or a corpora-
tion to engage in the practice of law. (B.C. L. §§ 2, 2a.)

The statute prescribes that incorporators shall be natural
persons of full age, two-thirds of them citizens of the United
States, and one, at least, a resident of the State of New York.
(G. C. L., § 4.) Corporations, copartnerships, minors and
persons acting in a representative capacity are therefore ex-
cluded, but aliens may act, if otherwise qualified, so long as the
proper proportion of citizens and residents is maintained.

The charter is a contract between the State and the incor-
porators. Dartmouth College v. Woodward, 14 Wheat. 518
(1819). The latter must, therefore, in addition to the statu-
tory requirements, be persons capable of entering’ into a bind-
ing contract. Since married women may now freely contract,
and may and do act as incorporators, the only practical im-
portance of this restriction is the exclusion of minors and per-
sons of insufficient mental capacity to make a binding contract.

Each of the incorporators must be a subscriber to the
stock of the corporation and his subscription must be set forth
in the certificate of incorporation. (B.C. L., § 2.) (See §

27
28 NEW YORK CORPORATIONS.

25.) One share is enough to satisfy this requirement. The
allowance of the charter serves as an acceptance of the incor-
porators’ subscriptions and they are then stockholders of the
company. Woods Motor Vehicle Co. v. Brady, 39 Misc. 79,
83 (1902). Reversed on other grounds, 181 N. Y. 145 (1905).

All of the incorporators must sign and acknowledge the
charter. (B.C. L.,§ 2.) (See § 27.) If the number of incor-
porators is large, this requirement may involve considerable
delay and trouble, and, for this reason, in practice the number
is usually limited,—commonly to the minimum allowed by the
statutes.

The statutory requirements in regard to incorporation
must be followed with exactness and the duties devolving upon
incorporators are technical and somewhat onerous. To relieve
the real parties in interest from these perfunctory but neces-
sary details, it is not uncommon to employ one or more “dum-
mies” to act as incorporators,—that is, persons who have no
direct interest in the corporation to be formed, but who act
as incorporators, effect the incorporation and organization as
far as required, and then step out to make way for those really
concerned.

Serious personal inconvenience to principals, involved in
attendance at the purely formal organization meetings, is often
avoided by this use of dummies. At times they are employed
as a convenient means of concealing the identity of the real
parties in interest until these latter are ready to be known.
The use of dummies is also resorted to, on occasion, to meet
the statutory requirements as to the citizenship and residence
of the incorporators when the real parties are not qualified.
As neither citizenship nor residence is prescribed for directors,
save that one must be a resident of the state (G. C. L., § 34),
the principals may come forward, as soon as the company is
organized, and legally assume control.

“Dummies” are usually friends or employees of the in-
terested parties and act under the supervision of the incor-
CERTIFICATE OF INCORPORATION. 29

porating counsel. They often carry affairs through the first
meetings, acting as both incorporators and directors, adopting
by-laws, electing officers and transacting business of the great-
est importance to the new company.

When dummies are employed their subscriptions are usu-
ally paid either by check advanced for the purpose, or by in-
clusion of their stock with that issued in exchange for prop-
erty. In either case, if the amounts of the subscriptions are
at all material, the dummies may be required to assign these
subscriptions before payment, or to sign an order for the issue
of the stock to the real owners, or to assign their certificates
of stock as soon as issued.

There is nothing illegal in the use of dummy incorpor-
ators, and, though the practice is severely criticised, it has
been upheld by the highest courts. Dickerman v. Northern
Trust Company, 176 U. S. 181 (1900).

§ 16. Certificate of Incorporation.

The certificate of incorporation, or charter, is a formal
statement of certain facts relating to the proposed corpora-
tion, required by the State before permission to exist as a
corporation will be granted. It is also an application for the
privileges and powers offered by the statute. Upon filing and
recording by the Secretary of State the instrument, though in
form merely an application, becomes itself the formal grant
of powers by the State.

Certain general powers are common to all corporations.
These are secured as an incident of incorporation and without
specific application. (G. C. L., § 11.) (See § 57.) The
corporation has only such special powers, however, as are set
forth in the charter. Great care should be taken to include
in the original certificate all necessary rights and privileges,
as amendment is often a complicated and troublesome matter.
At the same time, the jungle of print so frequently employed
in the purpose clause of charters is not to be recommended.
30 NEW YORK CORPORATIONS.

It is often aimless and confusing and is sometimes actually
restrictive through its very attempt to be all inclusive. A very
full statement of purposes is at times necessary or advisable,
but as a rule a direct, clear statement of comparative brevity
is preferable.

The charter purposes may only be such as are allowed by
law. Usually improper or illegal provisions are detected and
refused in the office of the Secretary of State. If, however,
such provisions should be found in the instrument as filed, they
are of no force or effect.

The certificate must be written in English (G. C. L., § 5)
and, as a matter of convenience, is usually prepared in tripli-
cate ; two copies to be filed, one with the state and one with the
county officers (Id.), and the third copy to be retained for
the corporate records. All should be signed, but only those
for filing need be acknowledged. (B.C. L., § 2.) (See §
27.) It has been held that one who is himself an incorporator
may not take the acknowledgments of other incorporators.
People ex rel. Erie R. R. v. Board of R. R. Comrs., 105 App.

Div. 273 (1905).

§ 17. Contents of Certificate of Incorporation.

The following from the opinion of Judge Earl is a good
statement of the scope of the certificate of incorporation:

“Persons seeking to form a corporation under any general
law must have a reasonable latitude as to what they may
insert in their certificate of incorporation. They must insert
therein all the mafter particularly required by the law, and
they may insert other provisions not inconsistent with law or
public policy which are germane to the purposes of the cor-
poration, and necessary, convenient or appropriate to the ac-
complishment of such purpose. If they keep within such limits
the public authorities have no reason to interfere, the interests
of the public are not jeopardized, and the rights of no citizen
CERTIFICATE OF INCORPORATION. 31

are violated.” People ex rel. Fairchild v. Preston, 140 N. Y.
549, 552 (1894).

The statutes require certain facts concerning the corpora-
tion and its purposes to be set forth in the charter. These facts
must appear or the charter will not be filed. In addition, by ex-
press enactment, other provisions not inconsistent with the
statutes may be inserted at the discretion of the incorporators.
(G. C.L., § 10.) Judge Earl’s opinion, already quoted, seems
to indicate that this right existed before the enactment of the
present permissive statutes. In any event the statutes serve
to remove the doubt that might otherwise have existed and
to indicate clearly the limitations that do exist. (See § 26.)

The facts required by the statutes as a necessary feature
of the charter application, are as follows:

§ 18. (1) Name.

“The name of the proposed corporation.” (B.C. L, § 2,
subdiv. 1.)

The New York statute prohibits the use of the word trust,
bank, banking, insurance, assurance, indemnity, guarantee,
guaranty, title, savings, investment, loan or benefit as part of
the corporate name unless such company is formed under the
banking or insurance law. (G. C.L., § 6.)

The corporate name is frequently one of the most valu-
able of the corporate assets. It is treated by the courts as a
true property right of a nature similar to the trade-mark. Hig-
gins Co. v. Higgins Soap Co., 144 N. Y. 462, 468 (1895).
New York has attempted to prevent its initial infringement by
providing that: ‘No certificate of incorporation of a proposed
corporation having the same name as a corporation authorized
to do business under the laws of this state, or a name so nearly
resembling it as to be calculated to deceive, shall be filed or
recorded in any office for the purpose of effecting its incorpora-
tion or of authorizing it to do business in this state.” (G. C.

L., § 6.)
32 NEW YORK CORPORATIONS.

This protects not only domestic companies but also for-
eign corporations licensed in New York.

There is no doubt that the Secretary of State may refuse
to file a name which in his opinion falls within the prohibition
of the statute. In case of a wrongful refusal, “there may be
no adequate remedy to the persons or corporations claiming
to be aggrieved, other than by a review of such determination
by writ of certiorari.’”” Columbia Co. v. O’Brien, 101 App.
Div. 296 (1905); People ex rel. Trustees v. Bd. Suprs., 131
N. Y. 468 (1892). Where, on the other hand, a name is im~
properly allowed, equity will grant relief to those injured, by
injunction.

“Whether the court will interfere in a particular case must
depend upon circumstances, the identity of the business of
the respective corporations; how far the name is a true descrip-
tion of the kind and quality of the articles manufactured or
the business carried on; the extent of the business carried on;
the extent of the confusion which may be created or appre-
hended and other circumstances which might justly influence
the judgment of the judge in granting or withholding the
remedy.” C. S. Higgins Co. v. Higgins Soap Co., supra.

“Courts of equity must, in such cases, assume that the
public will use reasonable intelligence and discrimination with
reference to the names of corporations with which they deal.
* * * Tt is timely enough in such cases for equity to use its
extraordinary powers when it appears that deception or con-
fusion has in fact resulted from the use of a word or a name
or when it clearly appears that such result is likely to follow.”
Hygeia Water Ice €o. v. The N. Y. Hygeia Ice Co., Ltd., 140
N. Y. 94, 98 (1893).*

The corporate name may be changed by amendment. The
procedure is, however, peculiar and complicated, involving
application to the courts. (See § 72.)

*See also Employers Assurance Corp. v. Employers Insurance Co, of U. S., 24 Abb. N.
C. 368 (1890); Commercial Union Assur. Co, v. Smith, 2 N. ¥. Supp. 296 (1888) ; Colonial
Dames of America v. C. D. of N. Y., 29 Misc. 10 (1899). For case protecting an individual
in the use of his own name, see De Long v. De Long Hook & Eye Co., 7 App. Div, 33 (1896);
Meneely v. Meneely, 62 N. Y. 427 (1875).
CERTIFICATE OF INCORPORATION. 33

§ 19. (2) Corporate Purposes.

“The purpose or purposes for which it is to be formed.”
(B. C. L., § 2, subdiv. 2.) ,

Corporations are creatures of the legislature and the pur-
poses of their formation are, therefore, legal only if authorized
by statute. Thomas v. Company, roi U. S. 71.

New York, in accord with the tendency of the more ad-
vanced states, is very liberal in this respect, the Business Cor-
porations Law (§ 2) authorizing the formation of corpora-
tions for “any lawful business purpose or purposes other than
a moneyed corporation or a corporation provided for by the
banking, the insurance, the railroad and the transportation cor-
porations laws, or an educational institution or corporation
which may be incorporated as provided in the education law.”

Under this clause it is possible to secure almost as wide a
field of operation for a corporation as is open to individuals or
partnerships. Any lawful purpose, within the prescribed limits,
and any number of such purposes may be included in a single
charter. But corporations may not be formed to engage in
the practice of law. (B.C. L, § 2a.)

The charter purposes should be drawn with the greatest
possible care, for a clumsily inserted limitation upon corporate
powers or a careless omission may prove a troublesome obsta-
cle, removable only by amendment. Personal considerations,
business interests and the attraction of possible subscribers to
stock usually determine the framing of the purpose clause.

Technically, a corporation is confined strictly within the
limit of its charter powers. It must be noted, however, that
this doctrine has been greatly modified in this state. In prac-
tice a corporation in New York may perform any act necessary
to or desirable for its interests, regardless of the limitations of
its charter, or the doctrine of ultra vires, if such act is not
prejudicial to public interests or to the rights of others. As
stated by Judge Allen in Whitney Arms Co. v. Barlow, 63
N. Y. 62, 69 (1875): “The plea of ultra vires should not as
34 NEW YORK CORPORATIONS.

a general rule prevail, whether interposed for or against a cor-
poration, when it would not advance justice, but on the con-
trary would accomplish a legal wrong.”

In later cases “public interest” seems to be the controll-
ing consideration. “In the granting of charters, the legisla-
ture is presumed to have had in view the public interest; and
public policy is * * * concerned in the restriction of corpora-
tions within chartered limits, and a departure therefrom is
only deemed excusable when it cannot result in prejudice to
the public or to the stockholders.” Leslie v. Lorillard, 110
N. Y. 519, 531 (1888).* (See § 73.)

§ 20. (3) Capital Stock.

“The amount of the capital stock, and if any portion be
~~ preferred stock, the preferences thereof.” (B. C. L, § 2,
subdiv. 3.)

The amount of capital stock is fixed by the statement
thereof in the certificate of incorporation and may only be
changed thereafter by amendment. No maximum limit is pre-
scribed. Five hundred dollars is the minimum capitalization
allowed by law. (See § 53.)

The conditions of issue of any preferred or special stock
should also be brought in under this clause of the charter.
Wide latitude in these matters is given by the New York
statutes and classification is common and is frequently desir-
able. The stock clause of the articles of incorporation should
be made very specific in its statement of any such preferences.
(See § 76, et seg.) «

Preferred or special stock may be authorized only by
charter provision. If not provided for in the original charter,
the right, if desired, must be secured by amendment, adopted
at a special meeting by vote of the holders of two-thirds of
the capital stock. (S.C. L., § 61.) (See § 72.) This is a

* See also Bissell v. R. R., 22 N. Y. 258 (1860); Holmes v. Willard, 125 Id. 75 (1890) ;
People v. N. R. S. R. Co., 121 Id. 582 (1890) ; Linkauf v. Lombard, 137 Id. 417 (1893) ; 1 Cook
on Corporations, 2 3.
CERTIFICATE OF INCORPORATION. 35

statutory change of the rule of unanimous consent that for-
merly prevailed. Kent v. Quicksilver Mining Co., 78 N. Y.
159 (1879) and Campbell v. Zylonite Co., 122 N. Y. 455
(1890).

§ 21. (4) Shares. Initial Capital.

“The number of shares of which the capital stock shall
consist, each of which shall not be less than five nor more than
one hundred dollars, and the amount of capital not less than
five hundred dollars, with which said corporation will begin
business.” (B.C. L., § 2, subdiv. 4.)

A “share of the capital stock is the right to partake, ac-
cording to the amount put into the fund (capital), of the sur-
plus profits of the corporation; and ultimately on the dissolu-
tion of it, of so much of the fund thus created as remains un-
impaired and is not liable for debts of the corporation.” Bur-
rall v. Bushwick Ry. Co., 75 N. Y. 211, 216 (1878) ; per
Folger, J.

There is no statutory requirement that the par value of
shares of a corporation shall be uniform for all shares and
classes of stock, but such is usually the case. Occasionally a
preferred stock is issued at a different par value than the com-
mon stock, but this is exceptional. Uniformity is the rule
established both by custom and convenience. (See § 80.)

The amount stated in the certificate of incorporation as the
capital with which the company will begin business may be
fixed at any desired amount not less than $500, but once fixed,
must be paid in, either in cash or property, before the corporate
business may commence. (B.C. L., § 3.) As this amount
may not be less than $500, it follows that that is the minimum
corporate capitalization allowed in New York. (See § 74.)
It is usual to fix the amount necessary for beginning business
at $500 without regard to the actual sum with which it is ex-
pected to start.
36 NEW YORK CORPORATIONS.

§ 22. (5) Location.

“The city, village or town in which its principal business
office is to be located.” (B.C. L., § 2, subdiv. 5.)

The principal office or place of business of the corpora-
tion must be within the state. Its location need not appear
specifically in the certificate. It is sufficient if the city, village
or town is given. If in the City of New York, the borough
must be included. (B.C. L., § 2.) (See § 134.)

The omission to require a definite statement of the cor-
porate address is a defect of the New York statutes. The
exact location of the principal office of a corporation should
be a matter of public record.

§ 23. (6) Duration.

“Tts duration.” (B.C. L., § 2, subdiv. 6.)

The duration of corporate existence in New York may
be perpetual, and it is usually so stated in the certificate. It
may be limited, if desired, to any term, and such limited period
may be extended by charter amendment at any time prior to
its termination. (See § 72.) A restriction of fifty years is im-
posed on the life of companies formed by the consolidation of
existing corporations. (B.C. L., § 7.) (See Ch. VI, “Cor-
porate Existence.’’)

If through inadvertence a certificate is filed without desig-

nating the duration of the corporate existence, it is perpetual.
(G. C. L., § 11, subdiv. 1.)

§ 24. (7) Number of Directors. (8) Names.

“The number 6f its directors, not less than three.” (B.
C.L., § 2, subdiv. 7.)

“The names and post-office addresses of the directors for
the first year.” (Id., subdiv. 8.)

The directors for the first year are designated by the char-
ter, not elected by the stockholders. They hold office, not
necessarily for a year, but until the first annual meeting, or,
CERTIFICATE OF INCORPORATION. 37

if directors are not elected at that meeting, thereafter until
their successors are elected. (G.C. L., § 28.) While the board
of directors must have not less than three members, it may be
composed of any larger number desired. Formerly the maxi-
mum number allowed was thirteen, but this limitation was re-
moved in Igo!.

The names and addresses of the directors who are to serve
for the first year must be given. One director must be a resi-
dent of the state. (G.C. L., § 34.) Unless the certificate or
by-laws provide otherwise, directors must be stockholders. (S.
C.L., § 25.) Since, however, the first directors are designated
by the charter and become directors “by direct command of
the statute and not through election by the stockholders,” they
need not be stockholders. “In the nature of things there can
be no stockholders at the date of incorporation.” Hamilton
Trust Co. v. Clemes, 163 N. Y. 423, 426 (1900). (See §

117.)
§25. (9) Subscribers.

“The names and post-office addresses of the subscribers
to the certificate, and a statement of the number of shares of
stock which each agrees to take in the corporation.” (B.C. L.,
§ 2, subdiv. 9.)

Either business or residence addresses may be given. One
share of stock is a sufficient subscription to satisfy the require-
ments of the statutes. All of the incorporators named in the
certificate must be subscribers to the stock of the corporation
and must sign and acknowledge the certificate of incorporation.

(See § 27.)

§ 26. (10) Special Provisions.

“The certificate of incorporation of any corporation may
contain any provision for the regulation of the business and
the conduct of the affairs of the corporation, and any limita-
tion upon its powers, or upon the powers of its directors and
38 NEW YORK CORPORATIONS,

stockholders, which does not exempt them from the perform-
ance of any obligation or the performance of any duty im-
posed by law.” (G.C.L., § 10.)

Under the broad language of this clause, any lawful
scheme of internal management from the simplest to the most
complex may be incorporated in the charter. Common pro-
visions are those giving stockholders power to remove direc-
tors; securing to the corporation the right to hold and dispose
of the stock of other corporations; giving the company a lien
on the stock of a member indebted to it; regulating the amount
of working capital and the manner of declaring dividends;
providing for cumulative voting, for committees of directors
and for classification of the board of directors.

It is to be noted that if it is desired to restrict meetings
of the directors to the state, a specific provision to that effect
must be inserted in the certificate (B. C. L., § 2), and if the
directors are not to have the statutory power of adopting
by-laws, its prohibition must also be included in the charter.
(G.C.L., § 34.)

Most of the provisions mentioned might be included in
the by-laws, but the greater stability of the charter makes it
advisable to prescribe any desired limitations of importance
in that instrument.

§ 27. Execution of Certificate.

The certificate of incorporation should be signed, in tripli-
cate, by each of the incorporators and acknowledged, in dupli-
cate, before a notary public, commissioner of deeds or a justice
of the peace. In another state or country, the certificate must
be acknowledged before a commissioner of deeds for New York
State or any local officer authorized to take acknowledgments
of deeds. In the latter case the officer’s authority should be
proved by proper official certificate. (See Forms 20-23 and
notes thereon.) An incorporator cannot take the acknowledg-
CERTIFICATE OF INCORPORATION. 39

ments of other incorporators. People ex rel. Erie R. R. Co. v.
Board of R. R. Comrs., 105 A. D. 273 (1905.)

If there are but three incorporators and they come to-
gether for the signing and acknowledgment of the instrument,
the formality is a simple one. The three acknowledgments
are taken at the one time, and one notarial certificate serves
for all. If the notarial officer who acts in the matter calls on
the incorporators at their offices or residences and takes their
several acknowledgments, the one notarial certificate will still
serve. If, however, the incorporators are numerous, live in
other states, or for any other reason cannot be easily reached
or assembled, the matter is more troublesome. Separate no-
tarial certificates are then usually necessary for each acknowl-
edgment.

§ 28. Filing and Recording. State.

The duly executed certificate of incorporation is sent to
the Secretary of State, together with the proper fees. (G. C.
L., § 5.) (See § 10.)

At the same time the organization tax must be sent to the
State Treasurer who notifies the Secretary of State that such
tax has been received. If the certificate of incorporation is
in due and acceptable form, the latter official notifies the State
Treasurer that such is the case and files and records the instru-
ment. He then sends notice of the receipt and filing of the
certificate to the party from whom it was received, and the
State Treasurer also sends his receipt for the organization tax.
The Secretary of State cannot file the certificate until the organ-
ization tax has been paid and he has been formally notified
thereof. (G.C.L., § 5; Tax Law, § 180.)

The Secretary of State sends notice of the receipt and
due record of all charters filed in his office, but does not send
a copy of the charter unless it is requested and his fees there-
for are paid. For certified copies these are 15 cents a folio and
$1 for seal. (See Part III, Tables 1-4.) Such certified copy—
40 NEW YORK CORPORATIONS.

or any copy—is not necessary to the legality of the incorpora-
tion, but it affords a recognized and convenient evidence of
incorporation and is therefore at times desirable. (G. C. L.,
§ 9.) The charge for an exemplified copy of a charter, i. e.,
a copy impressed both with the office seal of the Secretary of
State and with the Great Seal of State, is $1 more than for the
ordinary certified copy. (See Part III, Table 4, note.)

Frequently a signed copy of the certificate of incorpora-
tion is sent to the Secretary of State for certification at the
same time as the original, in order that the corporation may
have a certified office copy. The fees are the same as before,
the only advantages secured being the exact duplication of the
original charter and the convenience of the plan to all parties
concerned. (See §§ 11, 12.)

§ 29. Filing and Recording. Local.

As soon as the Secretary of State’s notification of filing
and the Treasurer’s receipt for organization tax are received,
the duplicate copy—signed and acknowledged exactly as was
the original and with the receipt for organization tax from the
State Treasurer attached—must be filed in the office of the
county clerk in the place where the corporation has its princi-
pal office. (G.C.L., § 5.) The county clerk is not permitted
to file the certificate unless it is accompanied by the Treasurer’s
receipt for organization tax. (Tax Law, § 180.)

If desired, a copy of the original charter, certified by the
Secretary of State, may be filed in the office of the county clerk
instead of a duplicate original. (G.C.L., § 5.) The dupli-
cate original is, however, usually more convenient and less ex-
pensive. (See § 13; also Part III, Tables 1-4.)

§ 30. Allowance.

It is to be noted that the application to the state authorities
for a charter is nothing more nor less than a copy of the desired
charter. No petition or other application of any kind need
CERTIFICATE OF INCORPORATION. 4I

accompany it. If in due form it is usually allowed by the Sec-
retary of State as a matter of course and the instrument then
becomes the charter of the corporation which it creates.

If the charter does not meet with the approval of the
Secretary of State, it is returned to the applicants with a state-
ment of the reasons for its refusal. If such refusal is on in-
sufficient grounds and the matter is of material importance, the
Secretary of State may be compelled by mandamus to file the
certificate. People ex rel. Eickemeyer Field Co., 138 N. Y.
614 (1893). But see People ex rel. Davenport v. Rice, 22 N.
Y. Supp. 631 (1893).

“Generally, however, the importance of the matter will
not justify such proceedings, and, if the official ruling cannot
be changed, the purposes or other matters in question must be
either omitted or so changed as to meet the views of the au-
thorities.

“Tf any required alteration in an executed charter is on
some non-essential point, and all the incorporators agree there-
to, it is not usually necessary to redraft and re-execute the
entire instrument. The correction may be made in the original
instrument and the document be then returned for acceptance
in its corrected form.

“Tf, however, the alteration be material, the better prac-
tice is to have the instrument redrawn and executed afresh
by the incorporators. If, however, a material alteration were
made in the instrument without any re-execution, but with the
consent or subsequent acceptance of the incorporators, and the
charter so altered were duly allowed and filed by the state
officials, it is not probable that it could later be successfully at-
tacked.” (Conyngton on Corporate Organization, p. 135.)

An injunction restraining the Secretary of State from fil-
ing an improper certificate may be obtained from the Appellate
Division of the Supreme Court in the third judicial department
upon notice. (Code Civ. Pro., § 605.) ‘Matter of Comstock,
25 State Rep. 611 (1889).
CHAPTER IV.
BY-LAWS.

 

§ 31. Preparation.

By-laws are the permanent rules for the regulation of the
corporate affairs, ranking next to the charter in authority, im-
portance and permanence. They should be carefully prepared,
and if a model set is used it should be thoroughly revised to
meet the needs of the particular corporation. The routine de-
tail of corporate procedure should be included and any other
provisions which, while necessary, are not of sufficient per-
manence or importance to justify inclusion in the charter.

It is usual and good practice to repeat in the by-laws any
details of management that have already been included in the
charter or which are prescribed by the statutes. When this is
done the by-laws provide a compact and convenient manual
of procedure for the corporate officials, obviating frequent ref-
erences to the charter or statutes. The usefulness of the by-
laws for this purpose is much increased by the adoption of a
clear, logical classification and arrangement. (See Forms 24
and 25.)

The New York statutes expressly permit the by-laws to
regulate the following matters, which if not so regulated are
controlled either by statute provision or the common law.

§ 32. (r) Meetings and Elections.

By-laws may fix the amount of stock necessary for a
quorum at meetings other than those for the election of direc-
tors. (See § 102.) (G.C.L., § 11, subdiv. 5.) By-laws
may also fix the time and place of meeting for the annual elec-

42
BY-LAWS. 43

tion of directors. The statutes require two weeks’ published
notice of this meeting for the election of directors, but the by-
laws may provide for additional notice. (S.C. L., § 25.) Pro-
vision may be made for classification of the board, but at least
one-fourth the number must be elected annually. (Id.)

The manner of appointing inspectors of elections of direc-
tors, subsequent to the first, who must be appointed by the
board, may be prescribed (See § 108), (S.C. L., § 31), as also
the mode of filling vacancies in the office of inspector. (Id.)
By-laws may regulate the calling of special meetings (G. C. L.,
§ 11, subdiv. 5), other than for the election of directors. (G.
C.L., § 29.) (See § 101, subdiv. c.)

§ 33. (2) Directors.

“By-laws duly adopted at a meeting of the members of
the corporation shall control the action of its directors.” (G.
C. L., §§ 11 (subdiv. 5), 43.)

They may provide that directors need not be stockholders
(S.C. L., § 25) and for the manner of filling vacancies in the
board. (Id.) Also if it is desired that directors shall not hold
meetings outside the state and no provision to that effect has
been inserted in the charter, it may be included in the by-laws.
(See § 1252.)

The number of directors necessary for a quorum of the
board may be fixed at not less than one-third the entire num-
ber (G. C. L., § 34), and more than a majority of the quorum
may be required to validate action of the directors. (G.C.L.,

§ 43.) (See § 125c.)

§ 34. (3) Officers,

By-laws may prescribe the powers and duties of officers
and agents. (S.C. L., § 30.) This provision is very sweep-
ing, allowing the usual duties of the particular officers to be
varied in any way desired, except as to such matters as are pre-
scribed by statute. (See § 130.)
44 NEW YORK CORPORATIONS.

§ 35. (4) Capital Stock.

By-laws should regulate the mode of transfer of stock
(S. C. L., § 50) and may fix a period of not over forty days
prior to stockholders’ meeting during which no transfer shall
be made on the books of the company. (G.C.L., § 23.) They
may prescribe any desired notice, in addition to that required
by the statutes, for meetings to vote on increase or reduction
of stock. (S.C. L., § 63.) (See §§ 86, 101.)

§ 36. Adoption.

The adoption of by-laws is a function of the stockholders.
In New York they have this power (G. C. L., §§ 11, 34), but
by express provision of the statutes, directors also may adopt
by-laws, provided they are not inconsistent with those passed
by the stockholders. This allows the directors to act quickly
in an emergency, but prevents them from removing any restric-
tion on their actions which may have been imposed by the
stockholders, or from making any material modification of the
scheme of management already in force. (See § 119.)

Directors’ by-laws are strictly supplementary to those of
the stockholders and are subject to alteration or repeal by these
latter. Until so altered or amended they are of equal force
with those passed by the stockholders. (G. C. L., § 34.) No
by-law adopted by the directors, regulating the election of di-
rectors or officers, is valid unless published for at least once a
week for two successive weeks (Wood v. Knapp, 100 N. Y.
tog [1885]) in a newspaper in the county where the election
is to be held and ateleast thirty days before such election. (G.
C. L., § 11.)

§ 37. General.

A by-law must be reasonable and adapted to the purposes
of the corporation. If not so it is void. People v. Medical So-
ciety of Erie, 24 Barb. 570, 575 (1857); Kent v. Quicksilver
BY-LAWS. 45

Mining Co., 78 N. Y. 159 (1879); Cartan v. Father Matthew
United B. Society, 3 Daly 20 (1869). An action cannot be
maintained, however, to have a by-law declared void unless the
plaintiff can show that its enforcement would work him irre-
parable injury. Thomas v. M. M. P. Union, 121 N. Y. 45
(1890).

By-laws are effective as to third persons only so far as they
have actual knowledge of the by-law provisions. Rathburn v.
Snow, 123 N. Y. 343, 349 (1890) ; Oakes v. C. W. Co., 143
N. Y. 430, 436 (1894).

§ 38. Observance.

By-laws should be strictly obeyed. Any breach may result
in an appeal to the courts by an aggrieved stockholder to in-
validate action taken thereunder or to enforce the personal lia-
bility that may be incurred by the offending officer or director.
Direct penalties for breach are of doubtful utility. They are
difficult of enforcement and in view of the restraining influ-
ences above mentioned are usually unnecessary.

A stockholder wishing to object to an irregularity must
do so promptly or he will be estopped by his delay.

Outside parties injured through failure on the part of cor-
poration officials to obey the by-laws may secure indemnity
from the corporation. Knox v. Eden Musee, 148 N. Y., 441

(1896).

§ 39. Repeal.

By-laws are always subject to repeal by the stockholders
in accordance with the procedure imposed by either charter or
by-laws. The doctrine of vested rights, however, sometimes
interferes. “A private corporation cannot repeal a by-law so
as to impair rights which have been given and become vested
by virtue of the by-law; and this although the power is re-
46 NEW YORK CORPORATIONS.

served by its charter to alter, amend or repeal its by-laws.”
Kent v. Quicksilver Mining Co., 78 N. Y. 159 (1879).

The powers of the directors as to by-laws are entirely
subordinate to those of the stockholders (G. C. L., § 34);
hence while the directors may repeal by-laws they themselves

have passed, they cannot repeal by-laws adopted by the stock-
holders.
CHAPTER V.
FIRST MEETINGS.

 

§ 40. First Meeting of Stockholders.

As the first board of directors is named in the charter, and
as directors have power to pass by-laws (G. C. L., § 34), the
corporation may be organized without a preliminary meeting
of the stockholders. Acceptance of charter will be presumed
from the fact of application (Bank of the U. S. v. Dandridge,
12 Wheat. 64, 70 [1827]), and, without any antecedent action
on the part of the stockholders, the board of directors may
meet, adopt by-laws and elect officers at once, and begin active
operations as soon as the amount of capital specified in the
charter as that with which the corporation will begin business,
has been paid.

The better practice, however, is to hold a stockholders’
meeting for organization. This meeting must be held within
the state (Ormsby v. Vermont Copper Mining Co., 56 N. Y.
623 [1874] ), and is usually assembled as soon as possible after
the charter has been filed. The allowance of the charter having
acted as an acceptance of the incorporators’ subscriptions, they
are stockholders of the company and are therefore entitled to
take part in this meeting either in person or by proxy. (See §
81.)

§ 41. Notice of Stockholders’ First Meeting.

There are but two methods of assembling the first meeting,
—the one by unanimous waiver of notice; the other under
the general provision of section 43 of the General Corporation
Law, that unless otherwise required by law or the by-laws of

47
48 NEW YORK CORPORATIONS.

the corporation, special meetings of the stockholders may be
called in the manner provided for the annual meeting. This
involves publication of notice once in each week for two weeks
immediately preceding the meeting, in a newspaper published
in the county where such meeting is to be held. (S.C. L,
§ 25.) The notice should be signed or authorized by a ma-
jority of the incorporators.

The best practice is to prepare a written call and waiver
of notice giving the day and hour and place of the first meet-
ing and a statement of the business to be transacted (‘‘any and
all business brought before the meeting” is sufficient), and
secure the signatures of all the incorporators to this instru-
ment. (See Form 27.) If this plan cannot be followed, or
the presence and participation of all the incorporators at the
meeting, which would have the effect of a waiver of notice,
cannot be secured, the meeting must be assembled by publi-
cation. (See Forms 43-45.)

§ 42. Minutes of Stockholders’ First Meeting.

As a rule the first meeting of stockholders is purely for-
mal, every important action having already been agreed upon.
It is a common practice to prepare the minutes in advance of
the meeting and to follow them as closely as possible. At times
these prepared minutes are merely read to the assembled in-
corporators, and, in the absence of dissent, are taken as the
record of the proceedings of the meeting without formal ac-
tion. At other times the minutes after their reading will be
adopted “as read.”

These methods, though legal, are informal and irregular.
The better practice is to use the prepared minutes as a guide
to avoid omissions and to insure the due and proper considera-
tion of necessary matters. All important actions required are
actually taken by the meeting and the minutes become in fact
a record of its proceedings.
FIRST MEETINGS. 49

§ 43. Organization of Stockholders’ First Meeting.

A majority of the stock subscribed for in the charter is
required to constitute a quorum. If this majority is present
at the first meeting, the legality of the assemblage should then
be determined by an examination of the call and waiver,
which, if found correct in form and signed by every incorpora-
tor, should be ordered entered on the minutes, either by motion
or by direction of the presiding officer. All other matters
affecting the regularity of the meeting, viz.: the names of
those in attendance, the statement that a quorum was present,
and the list of proxies, if any, should also be spread upon the
record.

The presence of the stockholders at this first meeting may
be either in person or by proxy as at any other stockholders’
meeting. (See § 104.)

§ 44. Acceptance of Charter.

The next step usually taken is the formal acceptance of
the charter and an order for its entry in the minute book. The
acceptance of the charter is not strictly necessary since a cer-
tificate of incorporation drawn in the form required in this
state is itself an acceptance of the terms of the offer made by
the general act. Fire Dept. of N. Y. v. Kip, 10 Wend. 266
(1833). The entry of the charter in the minute book as part
of the record is merely a matter of convenience and good
practice. It is usually entered on the first pages of the minute
book. (See Form 33.)

§ 45. By-Laws. Stockholders’.

The next step taken should be the adoption of by-laws.
Usually the by-laws are prepared in their entirety in advance
and are adopted at the first meeting, as presented, without
change or comment. In the purely perfunctory meetings
sometimes held, they are not even read. The safest plan,
however, is to have them read and adopted, article by article,
50 NEW YORK CORPORATIONS.

and then as a whole, thus preventing mistakes or unauthorized
substitutions and reducing the chances of subsequent dis-
agreement as to their contents. (See Ch. IV, “By-Laws.”’)

§ 46. Exchange of Stock for Property. Stockholders’ Action.

Where, as is very frequently the case, stock is to be issued
in large amounts in exchange for property, it is wise to have
the transaction approved at the first meeting of stockholders.
It is the province of the directors to authorize such a trans-
action, but the stockholders’ approval acts to prevent any sub-
sequent objection on the part of dissenting stockholders, and
is therefore usually advisable. When this action is taken the
stockholders adopt a resolution approving the exchange and
instructing the directors to effect the same. (See Forms 29,

31, 33; also § 84.)

§ 47. Other Business. Stockholders’ First Meeting.

The consideration of the exchange of stock for property
usually concludes the business to be transacted at the first
meeting of stockholders. If the by-laws provide for a perma-
nent chairman and secretary to act at stockholders’ meetings,
such officers are properly elected. immediately after the
adoption of the by-laws, and, if present, may, with propriety,
take charge of the meeting at once.

In New York the adjournment of the first meeting is
usually sine die.

§ 48. First Meeting of Directors.

The directors” first meeting may be held before or after
that of the stockholders, though in practice it almost invariably
follows. This first meeting of the directors is merely a special
meeting and, if held subsequent to the adoption of by-laws,
must be called in accordance with the provisions there made
for special meetings. The usual procedure is, however, the
same as in the case of the organization meeting of the stock-
FIRST MEETINGS. 51

holders, viz.: written call and waiver of notice signed by all
the directors. (See Form 28.) This method of assembling
a meeting is always allowable unless specifically prohibited by
charter or by-laws. The call customarily, though not neces-
sarily, specifies the purposes of the meeting. In the absence
of such statement it will be assumed that the meeting is called
to consider whatever matters come before it. Matter of Argus
Co. v. Manning, 138 N. Y. 557, 578 (1893). (See § 125b.)
Unless the charter or by-laws provide to the contrary, the
meeting may be held without the state. The first directors’
meeting is, as a rule, of the same formal, and sometimes per-
functory character as that of the stockholders. Minutes may
be and frequently are prepared beforehand, especially where
there are dummy directors. (See Form 34.)

§ 49. Organization of Directors’ First Meeting.

The directors’ meeting is organized by the selection of a
temporary chairman and secretary. If a quorum is present,
proof of the legality of the meeting is presented and passed
upon, by-laws are adopted if necessary, and the election of
officers of the company (see § 127) is in order. If these
have been agreed upon in advance, it is convenient to in-
struct the secretary to cast one ballot for them all. Other-
wise election should be by ballot in the usual manner. The
president must be elected from the board itself. Salaries of
officers are usually fixed at the time of election. If no
salaries are to be paid, this should be specified. The new
officers, if present, take charge at once.

The power to appoint necessary officers and agents has
been held to include the delegation of the powers of the board
during the intervals between its sittings to an executive com-
mittee. Olcott v. Tioga Ry. Co., 27 N. Y. 546, 558 (1863).
Where the board is numerous and composed of persons with
large outside interests it is often advisable to make such provi-
sion to secure proper supervision of corporate affairs. It is
52 NEW YORK CORPORATIONS.

common to appoint at the same time a finance committee to
facilitate the efficient management of the corporate funds.
The powers of such committees should be carefully prescribed
in the by-laws, as otherwise abuse of authority is possible and
not uncommon.

§ 50. Issue of Stock for Property.

After the election of officers, the matter of exchanging
stock for property may be conveniently considered. The pro-
posal for the exchange is presented, and, if the transaction
has been approved by the stockholders as suggested above (see
§ 46), their resolution is also placed before the board. A
resolution is then usually adopted accepting the proposition
for the exchange and authorizing the proper officers to receive
due transfer of the property and issue stock in exchange as
agreed. (See Forms 27-35.)

§ 51. Miscellaneous Business. Directors’ First Meeting.

Other business which is usually transacted at this first
meeting of the board is the adoption of a form of stock cer-
tificate, provision for office accommodation, the designation
of a bank for deposit of corporate funds, the auditing and
approval of the bills for the expenses of incorporation, ap-
proval of official bonds and any other matters which are
preliminary to the proper organization for business. If it is
impossible to finish the necessary business at this meeting,
or another meeting prior to the next regular directors’
meeting is thought advisable, adjournment is taken to a defi-
nite date, thus savitfg the trouble of calling a special meeting.
CHAPTER VI.
CORPORATE EXISTENCE,

§ 52. When Commenced.

It is now well settled by an unassailable line of decisions
that the charter of a private corporation is a contract between
the incorporators and the state. Trustees of Dartmouth Col-
lege v. Woodward, 4 Wheat. 518 (1819) ; People v. O’Brien,
111 N. Y. 1, 49 (1888). (See § 15.) That being the case,
a corporation can come into existence only when a binding
contract has been concluded. The New York Business Cor-
porations Law is worded as an offer: “Three or more persons
may become a stock corporation * * * by making, signing,
acknowledging and filing a certificate, etc.’ (B.C. L., § 2.)
The acceptance of this offer is complete with the filing of the
certificate by the Secretary of State, and therefore corporate
existence dates from that time.

The filing of the certificate in the office of the county
clerk is also required by the statute, but this is not a prerequi-
site to or an essential of corporate existence. Such filing must
be made, but as a statutory requirement, not as a neces-
saty preliminary of corporate existence.

If incorporation is by private act, the same rules apply,
the conclusion of the contract marking the starting point of
corporate being.

§ 53. Beginning Business.

The statutes specifically provide that the organization
tax, and the filing and recording fees to the state must be
paid as a prerequisite to filing of charter and to the exercise

53
54 NEW YORK CORPORATIONS.

of “any corporate powers and privileges.” (G. C. L, § 5.)
Beyond this it is provided that no stock corporation “shall incur
any debts until the amount of capital specified in its certificate
of incorporation as the amount of capital with which it will be-
gin business (not less than $500 [B. C. L., § 2]), shall have
been paid in in money or property.” (B.C.L., § 3.) The in-
tent of this provision is to require payment of the amount spe-
cified before the corporation may begin business.

On the other hand the corporation may not remain dor-
mant indefinitely. “If any corporation, except a railroad,
turnpike, plank-road or bridge corporation, shall not organize
and commence the transaction of its business or undertake the
discharge of its corporate duties within two years from the
date of its incorporation, its corporate powers shall cease.”
(G. C.L., § 36.)

Under this provision the initial payment required by the
charter must be made and the corporate operations commenced
within two years from the date the certificate is filed, or the
corporation may be dissolved, the Court of Appeals having
decided that “shall cease’ means “‘shall cease only if proper
judicial proceedings are instituted by the state to secure for-
feiture of the charter.” Matter of N. Y. & L. Id. Bridge Co.
v. Smith, 148 N. Y. 540 (1896).

As has already been pointed out, the corporation comes
into existence with a fully equipped board of directors, who
are empowered to adopt by-laws for the regulation of the cor-
porate operations, elect officers, and begin business as soon as
the required amount of capital has been paid into the treasury.

§ 54. Renewal.

Usually the period of existence of New York corpora-
tions is made perpetual and the question of renewal does not
arise. Where, however, the original charter has limited the
term of corporate existence, it is sometimes found desirable
to extend this period or to make the corporate existence per-
CORPORATE EXISTENCE. 55

petual. This may be accomplished at any time before expira-
tion of the charter period, by written consent of two-thirds
in interest of the stock, in which event no meeting is required,
or by a two-thirds vote in interest cast at a special meeting
of the stockholders called on the same notice as is required
for the annual meeting (see § 101, subdiv. b), such action to
be followed by the preparation of a certificate under the cor-
porate seal, setting forth the consent or vote and the extension
desired. This certificate must be signed and acknowledged
by the president or vice-president, and the secretary or an
assistant secretary, and be filed with the Secretary of State.
A duplicate original or a copy certified by the Secretary of
State must also be filed with the clerk of the county where the
corporation has its principal place of business. (See § 72.)
(G. C. L., § 37.) (For fees, see Part III, Table No. 4,
“Amendments to Charter.’’)

Any corporation may, if desired, provide in its charter
that it shall require a larger vote than two-thirds to secure an
extended term. (G.C.L., § 37.)

§ 55. Forfeiture of Charter.

It follows as a corollary to the proposition that a charter
is a contract between the corporation and the state, that if
the corporation is guilty of a breach of the charter conditions,
the state and the state alone may terminate the contract.
Any such forfeiture must usually be effected through judicial
proceedings. ‘The legislature, either in the laws under which
the charter is granted or by subsequent enactment, might, it
is true, provide that certain acts shall ipso facto terminate
corporate existence. The intent to do so must, however, be
perfectly clear, and the tendency of the courts is, if possible,
to construe such statutes as rendering the charter voidable
rather than void, making it necessary for the state to bring
judicial proceedings to secure forfeiture. Matter of N. Y. &
L. Id. Bridge Co. v. Smith, 148 N. Y. 540 (1896). At pres-
56 NEW YORK CORPORATIONS.

ent in New York no recognized statutory grounds exist for
the ipso facto dissolution of a corporation, or forfeiture of
its charter powers without judicial proceedings.

A breach, justifying forfeiture of the corporate charter,
may result either from non-user or abuse of the corporate
powers and franchises. In any of the following cases, an
action to procure judgment dissolving a corporation, created
by or under the laws of the state, and forfeiting its corporate
rights, privileges and franchises, may be maintained by the
Attorney General, in the name and in behalf of the people:

(1) Where the corporation has remained insolvent for
at least one year.

(2) Where it has neglected or refused, for at least one
year, to pay and discharge its notes or other evidences of

debt.
(3) Where it has suspended its ordinary and lawful

business for at least one year.

(4) If it has banking powers, or power to make loans
on pledges or deposits, or to make insurances, where it be-
comes insolvent or unable to pay its debts, or has violated
any provision of the act, by or under which it was incorpor-
ated, or of any other act binding upon it. (G. C. L, § ror.)

An action to annul a charter may be brought only upon
leave granted by the Supreme Court to the Attorney General
on his written application, stating that, in his opinion, the
action can or ought to be maintained (Matter of Atty. Gen-
eral, 79 Hun 369 [1894]) on one of the following grounds:

(1) That the corporation has offended against any pro-
vision of an act, bygor under which it was created, altered or
renewed, or of an act amending the same.

(2) That it has failed to observe provisions of law
whereby it has forfeited its charter, or become liable to disso-
lution, i. e., :

(a) That it has failed to begin business within

two years from date of its incorporation. (See § 53.)

(G.C.L., § 36.)
CORPORATE EXISTENCE. 57

(b) That it has failed to make payment of one-half
its capital stock within a year from date of incorporation.

(See $94.) CB. C1, $e}
(c) That it has wilfully neglected to pay its fran-
chise tax within a year after notice. (Tax Law, § 203.)
(3) That it has forfeited its privileges and franchises
by a failure to exercise its powers.

(4) That it has done or omitted an act which amounts
to a surrender of its corporate rights, privileges and fran-
chises.

(5) That it has exercised a privilege or franchise not
conferred upon it by law. (G.C.L., § 131.)

The discretionary power of the Attorney General in ap-
plying for leave is absolute. He may act on his own volition
or on application made to him by any citizen. The court
may grant or refuse leave, in its discretion, and its decision
is not reviewable. People v. B. S. & C. Co., 131 N. Y. 140
(1892).

In cases where the statute expressly imposes the penalty
of forfeiture for certain offences, the court has no discretion
but must declare the charter void upon proof of the facts.
But in other cases something more than a mere ultra vires act
must be proven. To justify forfeiture of corporate existence
“the state, as prosecutor, must show on the part of the cor-
poration accused some sin against the law of its being which
has produced, or tends to produce, injury to the public. The
transgression must not be merely formal or incidental, but
material and serious, and such as to harm or menace the public
welfare; for the state does not concern itself with the quar-
rels of private litigants. It furnishes for them sufficient courts
and remedies, but intervenes as a party only where some public
interest requires its action.” People v. N. Riv. S. Ref. Co.,
121 N. Y. 582 (1890). (See § 73.)*

* For details of procedure, see G. C. L.,

@
Hun 45 (1890); People v. N. Riv. Sugar ae Co., 121 N, ¥. 582 (1890) ; People v. B.
Co., 131 N.Y. 140 (1892).

130-136, 304; also People v. Broadway R. R., 56
S&C
-

-

58 NEW YORK CORPORATIONS.

§ 56. Dissolution.

The statutory method of dissolution is frequently disre-
garded in actual practice. If an enterprise proves unsuccess-
ful and no material assets exist, the corporate organization is
abandoned and as there is nothing to be gained by procedure
against the practically defunct corporation, it sinks out of
sight unnoticed save by unpaid but helpless creditors. If as-
sets exist and the number of stockholders is small, they arrange
matters to their mutual satisfaction and disband without for-
mality, and, if creditors are paid in full, there is no one to com-
plain that dissolution was irregular.

As a rule, however, formal dissolution is desirable. Be-
fore the corporation has begun business and before the pay-
ment of any part of its capital stock, the incorporators may
surrender the corporate rights and franchises by signing, veri-
fying and filing in the office of the Secretary of State and of
the clerk of the county where the charter is filed a certificate
setting forth the names of the incorporators, that no part of
the capital has been paid, that there are no liabilities, that its
business has not been begun, and that the corporate rights and
franchises are thereby surrendered, with proof of the facts
set forth, and thereupon the corporation shall be dissolved.
(G. C. L., § 220.)

After the corporation has begun business dissolution may
be effected without judicial proceedings by the following pro-
cedure (G. C. L., § 221):

A special meeting of the board of directors is called on
three days’ notice, and a majority of the whole board adopts
a resolution thereat recommending dissolution. The directors
then call a stockholders’ meeting not less than thirty nor more
than sixty days after their own meeting. Notice of the time
and place of such meeting must be published at least once a
week for three weeks successively next preceding the time ap-
pointed for holding such meeting, in one or more newspapers
published and circulating in the county where the principal
CORPORATE EXISTENCE. 59

office is situated. On or before the first day of publication a
copy of the notice must be served personally on each stock-
holder, or mailed to his last known office address. (See § 101,
subdiv. h.)

The stockholders’ meeting must be held in the city, town
or village where the last preceding annual meeting took place,
and, if necessary, it may be adjourned by consent of a major-
ity of those present, from time to time, if due notice of such
adjournment is published in the same papers in which the orig-
inal call appeared.

An approving vote of two-thirds of the outstanding stock
must be cast at such meeting to secure dissolution. If such
vote is obtained, the following papers are then prepared and
filed with the Secretary of State. (See Forms 95-98.)

(1) <A statement showing compliance with the statute
requirements, accompanied by a written consent to such disso-
lution signed by all the stockholders voting in favor thereof
and accompanied by all proxies voted upon. The consent must
be attested by the secretary or treasurer and the president or
vice-president.

(2) A statement of the names and residences of the
then existing board of directors and the names and residences
of the officers of the corporation, duly verified by either the
secretary, the treasurer or the president.

Upon receipt of these papers in due form, the Secretary
of State issues, in duplicate, a certificate of their filing. One
copy of this certificate must be filed with the clerk of the county
where the principal place of business is located, and a copy
must be published, once a week for two weeks, in one or more
newspapers published and circulated in the county of the prin-
cipal office. The dissolution of the corporate organization is
then complete.

No fees are paid to the Secretary of State except $1 each

for the certificates of filing. The fee to county clerk for filing
60 NEW YORK CORPORATIONS.

each certificate is 6 cents. 10 cents per folio for recording is
also exacted by the county clerk.

The directors are trustees to wind up the business. All
corporate liabilities must first be provided for. Then, if any
property is left, the directors may dispose of it to the best
advantage for cash and distribute the proceeds among the
stockholders pro rata, or, with the consent of two-thirds of the
stockholders, may sell the property and business to any cor-
poration engaged in carrying on the same general business in
the state and accept the purchase price thereof in the stock
or bonds of such corporation for distribution among the stock-
holders in lieu of money. Dissenting stockholders may secure
appraisal of their stock and may sell their stock to the cor-
poration at the value determined if they apply to the Supreme
Court within sixty days after mailing of notice of the proposed
sale. (G.C.L., § 221.)

When dissolution is advisable but cannot be effected with-
out judicial proceedings, a majority of the directors may of
their own motion present a petition to the Supreme Court,
praying for an order of dissolution (G. C. L., § 170), and
must do so if a majority in interest of the stockholders so
direct. (G. C. L, § 171.) In case the directors or stock-
holders are equally divided as to the advisability of dissolu-
tion, any director or any stockholder may present a petition
therefor. (G. C. L, § 172.)

The petition for voluntary dissolution (see Forms 99-102)
must be verified and must set forth in detail certain prescribed
information. (G. C. L., § 174.) It must be presented at a
special term of the Supreme Court held within the judicial
district embracing the county where the principal office of the
corporation is located. (G.C. L., § 176.) It is of the utmost
importance that all papers in the proceedings be served upon
the Attorney General, as orders granted without such service
are void. (G. C. L., § 312.) Also no order or judgment
may vary in any material respect from the proposed order or
CORPORATE EXISTENCE. 61

judgment served upon the Attorney General unless the Attor-
ney General appears on the return day and is heard in refer-
ence thereto. (Id.) The Attorney General may accept short
notice. In re Peekamoose Fishing Club, 151 N. Y. 511
(1897).

It is discretionary with the court to either entertain or
dismiss the petition when it has been presented by direction of
the stockholders, or by a director or stockholder, in case of an
equal division of opinion among the directors or stockholders
as to the advisability of making application for dissolution.
In cases where the petition is presented by a majority of the
directors, the court must grant an order to show cause why
the corporation shall not be dissolved. (G. C. L., § 178.)
(See Form 103.) The return may be before the court or be-
fore a referee named in the order at a date not less than six
weeks after the granting thereof. (G.C. L., § 178.)

The order must be published at least once a week for three
weeks immediately preceding the return day in one or more
newspapers specified in the order, published in the city or coun-
ty where such order is entered. (G.C.L.,§ 179.) The order
must be served upon the scheduled creditors, stockholders and
holders of uncompleted contracts of the corporation ten days
before the return day if service is personal, or twenty days
before if served by mail. (G.C. L., § 180.) It must also be
entered and all papers be filed in the county where the principal
office of the corporation is located, within ten days after the
order is made. (G.C. L., § 181.) At any stage of the pro-
ceedings the court may appoint a temporary receiver (G. C.
L., § 182), and at any time thereafter may enjoin creditors
from bringing suit. (G.C.L., § 184.)

If the court decides that a proper case for dissolution has
been presented, a final order is granted dissolving the corpora-
tion and appointing one or more receivers of its assets. (See
Form 108.) If the corporation is solvent, the court may dis-
pense with receivers and provide in the final order for the dis-
tribution of the corporate assets. (G.C.L., § 191.)
CHAPTER VII.
CORPORATE POWERS.

 

§ 57. General.

Corporations have only such general powers as are ex-
pressly or impliedly conferred upon them by the incorporating
acts. (G. C. L., § 10.) Barnes v. Bank, 19 N. Y. 152. Judges
and text writers at an early date maintained that certain pow-
ers deemed by them to be essential to corporate existence were
“implied” in every grant of incorporation. Thomas v. Dakin,
22 Wend. 9 (1839). The New York statute has reflected this
judicial conception of the corporate necessities in a grant of
enumerated powers to all domestic corporations. (G. C. L.,
§ 11.) (See § 16.) These powers are as follows:

§ 58. (1) To Have Succession.

All corporations havé succession for the charter period,
or perpetually when no period is specified. (G. C. L., § 11,
subdiv. 1.) The term “succession” does not refer to cor-
porate existence but means that the “corporation” is distinct
from its members and is not affected by changes in their per-
sonnel. This is a characteristic feature of the corporation and
is indispensable to corporate existence. It enables the cor-
poration to continue unchanged, despite the mutations of its
membership. In it “consists the essence and great value of
these institutions.” Thomas v. Dakin, supra.

§ 59. (2) To Appoint Officers and Agents.

Every corporation may-appoint such officers and agents

as its business requires and fix their compensation. (G. C. L.,
§ 11, subdiv. 4.) (See § 127.)
62
CORPORATE POWERS. 63

This is an essential power since the impersonal character
of a corporation makes direct action impossible. The subject
of officers is treated in detail in Chapter XII, “Officers.”

§60. (3) To Make By-Laws.

Corporations may make by-laws not inconsistent with
existing law. (G.C. L., § 11, subdiv. 5.) Important details
which may be provided for in the by-laws are enumerated
in the statute. (See Chap. IV, “By-Laws.”’)

§ 61. (4) To Have a Seal.

Corporations may adopt a corporate seal and change the
same at pleasure. (G. C. L., § 11, subdiv. 2.)

Seals have lost so much of the importance attached to
them at common law that this power, once one of the most
cherished of corporate possessions, has sunk to comparative
insignificance. Formerly the seal was either in itself the cor-
porate signature or was an essential feature of the same. Now
it is well settled that a corporation need use a seal only in
cases where an individual is required to do so. Leinkauf v.
Calman, 110 N. Y. 50, 54 (1888); Valente v. International
Milling Co., 119 A. D. 127 (1907). It is usual and good prac-
tice, however, to affix the seal to all corporate contracts and
other instruments of importance. A seal will never lessen the
legal effect of a document and the added impressiveness it
gives to a transaction is occasionally very desirable. The
statute requires that the seal be used on stock certificates.
(S.C. L., § 50.)

The seal may be of any form, and bear any inscription,
name or device desired. In practice the name of the corpora-
tion and the state and the year of incorporation almost in-
variably appear upon the face of the seal. The form of the
seal and the matter upon it are usually fixed by the by-laws.
The custody of the seal is as a rule given to the secretary.
64 NEW YORK CORPORATIONS.

§ 62. (5) To Acquire, Hold and Dispose of Property.

Corporations may acquire, hold and dispose of all prop-
erty necessary for corporate purposes, subject to any limita-
tions prescribed by law. (G. C. L., § 11, subdiv. 3.) No
restrictions have been imposed on the property holding power
of stock corporations, and they may exercise it, within the
limits of the corporate purposes, as freely as may an indi-
vidual.

This applies to both real and personal property. It is an
elementary proposition that corporations, though created for
a limited term, may hold and convey all necessary property
in fee simple. It was established in this state at an early date.
Nicoll v. N. Y. & Erie Ry., 12 N. Y. 121 (1854); People v.
Mauran, 5 Den. 389 (1848). Whether any particular realty
is necessary for the corporate purposes is a question of fact,
with the presumption in favor of the corporation. Nicoll v.
Ry., supra. A corporation may issue stock full-paid in ex-
change for property, and, in the absence of fraud, the judg-
ment of the directors as to the value of the property purchased
is conclusive and the stock will be held full-paid. (S.C. L.,

§ 55.) (See § 84.)

§ 63. Power to Hold Property in Other States.

Section 14 of the General Corporation Law in terms
permits domestic corporations to hold property in other states.
It is scarcely necessary to call attention to the fact that whether
they really have such power depends upon the law of the juris-
diction where they seek to exercise it, the New York statute
having no extra-territorial effect. Briscoe v. So. Kansas Ry.,
40 Fed. 273 (1889). It has been decided by the United States
Supreme Court, however, that the comity between the states
raises the presumption that a corporation of one state, not for-
bidden by the law of its being, may acquire property in another
unless it is prohibited from so doing either in direct enactments
CORPORATE POWERS. 65

of the latter state, or by its public policy deducible from the
general course of legislation or from the settled adjudications
of its highest court. Cowell v. Springs Co., 100 U. S. 55
(1879) ; Christian Union v. Yount, 101 U. S. 352 (1879).

§ 64. Power to Hold Its Own Stock.

A corporation may not impair its capital by purchases
of its own stock. If such a purchase is made, the corporate
assets are thereby, temporarily at least and until the stock is
resold, reduced, and the security to which creditors are legally
entitled is correspondingly reduced. The reason for this rule
fails where net profits are used for such purchases, and, in
the absence of improper preferences of stockholders, or other
fraud, there is no reason why the corporate earnings should
not be applied to the reduction of its outstanding stock instead
of being distributed as dividends. Lowe v. Pioneer Thresh-
ing Co., 70 Fed. Rep. 646 (1895).

The right of a corporation to take shares of its own
stock as security for or in payment of a debt is well settled.
(S.C. L., § 28.) Bank v. Bruce, 17 N. Y. 507 (1858). A
corporation may also take its stock by way of gift or bequest.
Lake Superior Iron Co. v. Drexel, 90 N. Y. 87 (1882).

Stock held by the corporation which issues it has none of
the usual rights and powers. It cannot be voted (ex parte
Holmes, 5 Cow. 426 [1826] ), nor is it entitled to dividends.
It does not necessarily merge and become unissued stock, but
may be kept outstanding in the hands of trustees or on the
books of the company and sold at its market value by order
of the directors. Vail v. Hamilton, 85 N. Y. 453 (1881),
Directors authorizing the purchase of the company’s stock,
except from net profits, thereby reducing the capital, are guilty
of a misdemeanor. (Pen. Law, § 664.)

§ 65. Power to Hold Stock of Other Corporations.

Early cases in this state settled the common law right of
corporations to accept stock of other companies in payment
66 NEW YORK CORPORATIONS.

of or as security for debts. Talmadge v. Pell, 7 N. Y. 328
(1852). The power to deal in stocks beyond this requires
express statutory authority. Milbank v. Ry., 64 How. Pr.
20 (1882). This authority may be secuted under § 52 of
the Stock Corporation Law, which provides that corporations,
except moneyed corporations, may obtain the unrestricted right
to deal in stocks and bonds by suitable provision therefor in
their original or amended certificates of incorporation. In
the absence of such charter provision, the statute still confers
a limited power, confining it to the purchasing, acquiring,
holding and disposing of stocks and bonds of companies en-
gaged in the same general business as that of the purchasing
corporation, or engaged in the manufacture, use or sale of
property, or in the construction or operation of works neces-
sary or useful in its business, or in which, or in connection
with which, the manufactured articles, product or property of
such corporation are or may be used.

§ 66. Status of Holding Corporations.

When one corporation holds stock in another, the direc-
tors or officers of the former are eligible as directors in the
latter company, and the holding company has all the rights
of an individual stockholder of the other corporation. (S.
C. L., § 52.)

Where a corporation owns all the stock of another en-
gaged in the same general business, it may by due procedure
guarantee the bonds of the subordinate company. (S. C. L.,
§ 8.) (See § 68.)

It is well settfed that a corporation may own all the stock
of another, and yet the two may continue as distinct com-
panies. Einstein v. Rochester Gas & Electric Co., 146 N.
Y. 46 (1895).

If the power of purchasing stock is used by a corporation
to stifle competition, it is illegally exercised. The purchase of
stock for such purposes will be set aside and proceedings, in
CORPORATE POWERS. 67

the nature of quo warranto, may be instituted by the state to
secure forfeiture of the charter of the offending corporation.
People v. N. R. S. R. Co., 121 N. Y. 582 (1890); Minn. v.
Northern Securities Co., 184 U. S. 199 (1902).

§ 67. Power to Borrow Money. Corporate Bonds.
Mortgages.

Stock corporations may borrow money necessary for
their business or for carrying out their chartered purposes
and may issue and dispose of their obligations secured by
mortgage on their property for any amount so borrowed.
(S.C. L., § 6.) They may not plead usury when sued for
debt. (Gen’l Bus. Law, § 374.)

Corporate mortgages, except purchase money mortgages,
must be authorized by holders of two-thirds of the stock, by,
a vote given at a special meeting called on the same notice as
is required for the annual meeting (see § 101, subdiv. c) or
by written assent of a like amount of stock without a meeting.
(See Forms 115-122.) This latter provision is a statutory
modification of the general rule that action of the stockholders
must be taken at regularly assembled meetings. In either
case, the president or vice-president and the secretary or an
assistant secretary must make and acknowledge a certificate,
under the corporate seal, showing that the mortgage has been
duly authorized by the stockholders, and must file the same
in the office of the clerk or register of the county where the
principal office of the company is located. (See Chap. XXVIII,
“Bond Issues,” for detailed procedure and forms.)

The directors’ recital in a mortgage, publicly recorded,
that the assent of stockholders to the bond issue has been
properly obtained, is presumptively true. Any person may
purchase bonds secured by the mortgage on the faith of such
representations and as to him they will hold. If any such
mortgage remains on record for a year, the consent of stock-
holders is conclusively presumed as to bondholders for value
68 NEW YORK CORPORATIONS.

who have received interest according to the terms of the
agreement. (S.C. L, §7.)

The directors may, when authorized by a consent of the
stockholders similar to that required for a mortgage, confer
upon bondholders the right to convert the principal of the
debt into corporate stock at any time from two to twelve
years after the date of the bonds. The directors may pre-
scribe the manner of making the conversion and the conditions
upon which it may take place. If the authorized capital stock
is insufficient to meet the conversion when made, the directors
must increase the capital stock to the required amount by
causing to be filed with the Secretary of State and with the
clerk of the county where the principal place of business is
situated, a certificate, under the corporate seal, subscribed and
acknowledged by the president and secretary and setting forth:

(1) A copy of the mortgage or resolution of the direc-
tors authorizing the issue of such bonds.

(2) That the holders of not less than two-thirds of the
capital stock of the corporation duly consented to the execution
of such mortgage or resolution of directors authorizing the
issue of such bonds by the corporation.

(3) <A copy of the resolution of the directors of the
corporation authorizing the increase of the capital stock to the
amount necessary to effect the conversion.

(4) The amount of capital theretofore authorized, the
proportion therof actually issued, and the amount of the
increased: capital stock.

The increase is authorized as soon as this certificate is
properly filed. (SC. L, $6.) A fee of one-twentieth of
one per cent. upon the amount of increase must be paid the
State Treasurer before the certificate will be filed. (Tax
Law, § 180.)

§ 68. Power to Guarantee Debts of Other Corporations.

A corporation owning the entire capital stock of another
company may guarantee the bonds of this other company if
CORPORATE POWERS. 69

two-thirds of its own stock assents. Any stock corporation,
in pursuance of a unanimous vote of its stock at a special
meeting called by written notice signed by a majority of the
directors and served upon each stockholder of record person-
ally or by mail at least sixty days prior to the meeting, may
guarantee the bonds of another domestic corporation engaged
in the same general business. (S.C. L., §8.) (See § god.)

§ 69. Power to Do Business in Other States.

This power is recognized though not expressly conferred.
by the statutes. (B.C. L., §2; G.C. L, §14.) It may be
obtained, subject, of course, to the regulations of the jurisdic-
tion where exercised, by express charter provision, if desired,
and the organization of corporations under the New ‘York
statutes to conduct business outside the state is even encour-
aged by the adjustment of the franchise tax on a basis of
capital employed within the state. (See §§ 138, 179.)

§ 7o. Consolidation of Corporations.

Two or more domestic corporations engaged in the same
kind of business may consolidate (Cameron v. Water Co., 133
N. Y. 336 [1892]), and form a new corporation possessing
the joint rights, franchises and property, and subject to all
the obligations of the constituent companies. (B. C. L,,
§§ 7-11.) To effect consolidation, the respective corpora-
tions enter into an agreement signed by a majority of each
board of directors and under their corporate seals, setting
forth (B.C. L.,§ 7):

(1) The terms and conditions upon which con-
solidation is to be effected.

(2) The mode of carrying it into effect.

(3) The name of the new corporation.

(4) The number of directors.

(5) The names and post-office addresses of the
directors for the first year.
7O NEW YORK CORPORATIONS.

(6) The term of its existence, which shall not
exceed fifty years.

(7) The name of the town 6r towns, county or
counties in which its operations are to be carried on.

(8) The name of the town or city and county in
this state in which its principal place of business is to be
situated.

(9) The amount of the capital stock not exceed-
ing the fair aggregate value of the property, franchises
and rights of such corporations.

(10) The number of shares.

(11) The manner of distributing such capital stock
among the holders thereof.

(12) If one or more of the consolidating corpora-
tions has been organized for the purpose of carrying on
any part of its business outside of New York, the agree-
ment shall so state.

(13) Any other particulars the parties deem neces-
sary, but no provision may be inserted to deprive non-
assenting creditors of any rights against the original
companies. Matter of Utica Brewing Co., 154 N. Y.
268 (1897).

After the agreement is completed, special meetings of the
stockholders of the several corporations must be called, upon
at least two weeks’ notice, specifying the time, place and object
of the meeting, such notice to be mailed to each stockholder
and published for two successive weeks in one of the news-
papers in each of the counties of this state in which the several
corporations have their places of business.

The proposed agreement must be submitted to each meet-
ing and be voted on by ballot. If it receives the approval of
two-thirds in intere8t of the stock of each company, the agree-
ment is ratified. The secretaries of the several meetings must
make sworn copies of the proceedings in duplicate which must
be attached to duplicate copies of the agreement. One set of
papers must be filed with the Secretary of State and the other
with the clerk of the county, within the state, where the new
corporation’s principal office is established. (B.C. L., § 8.)
CORPORATE POWERS. 71

The filing and recording fees are the same as on an
original incorporation, viz.: to Secretary of State, $10 for filing
and 15 cents per folio for recording; to county clerk, 6 cents
for filing and 10 cents per folio for recording. If the capital
stock of the new corporation exceeds the aggregate capital
stock of the constituent companies, an organization tax of
one-twentieth of one per cent. on such excess must be paid the
State Treasurer.

Any dissenting stockholder may, at the meeting or within
twenty days thereafter, object to the consolidation and demand
payment for his stock, and within sixty days after the consoli-
dation takes effect may apply to the Supreme Court at special
term for the appointment of three appraisers to fix the value at
which the new corporation must buy in his stock and the man-
ner in which payment therefor shall be made. Trask v. Plow
Works, 6 Hun 236 (1875). Where consolidation is voted
by ninety per cent. of the stock and a dissenting stockholder
fails for sixty days to take advantage of his privilege to retire,
the corporation can force him out by making application as
above, with payment of the amount determined by the ap-
praisers. (B. C. L., §8.) (For evidence of consolidation,
see G. C.L., § 9.)

§ 71. Merger.

If a domestic, or foreign corporation authorized to do
business in the state, owns all the stock of another corporation
organized for or engaged in a business similar or incidental
to that of the holding company, the latter may file with the
Secretary of State a certificate of ownership under its cor-
porate seal and a copy of a resolution of its directors to merge
such other corporation. The property, franchises and liabili-
ties of the subordinate company thereupon pass to said holding
corporation in the same manner as in case of consolidation.
(S. C. L, § 15.) (For fees, see Part III, Table 4.)
72 NEW YORK CORPORATIONS.

§ 72. Amendment of the Charter.

In New York almost any right, power or privilege may
be attained by amendment that might have been secured
through the original charter. Procedure to secure any such
amendment varies with the nature of the change desired. The
usual amendments and the methods prescribed in each case
are outlined on the following pages.

It is to be noted that when action is required of the stock-
holders, such action must always be taken at a duly assembled
stockholders’ meeting, except in the few cases where the
statutes specifically provide that a consent of the stockholders
may be expressed in writing without a meeting. Also when
a meeting is requisite it must always be called in strict accord
with statutory and by-law requirements unless these require-
ments are waived by a written instrument signed by every stock-
holder entitled to be present at such meeting.

In any of the following cases where publication of notice
of meeting is required, such publication must be made in a
paper published in the county in which the principal office is
located, and if service by mail is required, the notice must be
mailed to every stockholder at his last known post-office ad-
dress.

(a) To Secure New Purposes of Same General
Character. Amendment must be authorized by major-
ity vote of directors and by vote of at least three-fifths
of the capital stock, cast at a meeting specially called for
that purpose in accordance with any by-law requirements
as to special meetings. Notice of such meeting must
state time, place and object, be signed by the president
or vice-president and secretary and be published once a
week for two successive weeks, and be served by mail
two weeks or personally five days before the meeting.
The amended certificate must recite the facts, be signed
by the president and secretary and must be accompanied
by a copy of the proceedings of the special meeting, veri-
fied by the oath of a director present. (S.C. L., § 18.)
(See § 72a for filing requirements. )
CORPORATE POWERS. 73

(b) Increase of Capital Stock. Amendment must
be authorized by a majority vote of the stock at a meeting
specially called for the purpose. Notice of meeting must
state time, place and object and the amount of increase;
must be signed by the president or vice-president and
secretary ; be published once each week for two successive
weeks, and be served by mail two weeks, or personally
five days before the meeting. Unanimous written con-
sent of the stockholders to the amendment will obviate
the necessity of a meeting. Certificate must recite the
facts, show authorized capitalization, amount thereof
issued and the new capitalization, and be “made, signed,
verified and acknowledged” in duplicate by the chairman
and secretary of the meeting. Organization tax of 50
cents per $1,000 of increase must be paid to State Treas-
urer. Proceedings of meeting or consent must be entered
on the minutes of the corporation. (S. C. L., §§ 62,
63, 64.) (See § 86; also Forms 84, 85.) (See § 72a for
filing requirements.) If increase is by consent of the
stockholders, such consent must be signed by them in
person or by proxy, and as a matter of practice, have an-
nexed thereto an affidavit of the custodian of the stock
book that the parties so consenting are the holders of
record of the entire issued and outstanding capital stock.
(See Form 84.)

The old stockholders have a right to purchase the
new stock pro rata before it may be offered to outside
investors. Stokes v. Continental Trust Co., 186 N. Y.
285 (1906).

(c) Decrease of Capital Stock. Same as for in-
crease of capital stock except that certificate, executed in
._ duplicate, must state in addition the whole amount of the
ascertained debts and liabilities of the corporation and
must have endorsed upon it the certificate of the comp-
troller that the reduced capital is in excess of the ascer-
tained debts and sufficient for the proper corporate pur-
poses. Comptroller’s fee for each copy of certificate, $1.
(S.C. L., §§ 62, 63, 64.) (See § 86; also Forms 84, 85.)

If the corporate stock is classified it must, in case of
decrease, be so reduced as not to disturb the proportionate
74

NEW YORK CORPORATIONS.

interest of the various classes. Page v. American &
British Mfg. Co., 129 App. Div. 346 (1908).

(d) Increase or Decrease of Number of Shares.
As for increase of stock, except that a two-thirds vote of
all stock duly represented at the meeting is required and
certificate, instead of details as to amount of capital stock,
must show original number of shares, number issued and
outstanding and increase or decrease of number. (S. C.
L., § 65.) (See § 80.)

(e) Change of Number of Directors. Must be
authorized by majority vote of the stock at meeting held
on two weeks’ written notice served personally or by
mail. Proof of service of notice must be filed in office
of corporation at or before time of meeting. Proceed-
ings must be entered on minutes, and transcript thereof,
verified by the president and secretary of the meeting,
be filed as was original certificate. Unanimous written
consent of the stockholders will obviate the necessity
of meeting, but such consent must have annexed thereto
an affidavit of the custodian of stock book that the signers
represent the entire capital stock and must then be filed
as the verified proceedings are when the action is taken
at a meeting. (S.C. L., § 26.) (See § 113; also Forms
86-89.) The number of directors is not reduced until the
requirements as to filing have been complied with. Matter
of Westchester Trust Co., 186 N. Y. 215 (1906).

(f{) Change of Location of Principal Office. Must
be authorized by a majority vote of the stock at a
special meeting duly called for that purpose, or without
a meeting by unanimous written consent of all the stock-
holders, such written unanimous consent to be duly ac-
knowledged and filed in the office of the Secretary of
State. The cerfificate of amendment must be signed and
sworn to by the president, secretary and a majority of
the directors and state the name of the corporation, the
city, town or county where office was originally located,
and to which it may subsequently have been changed;
the new location desired and that it proposes to actually
conduct its business there and that such change has been
duly authorized. The names and residences of the direc-
CORPORATE POWERS. 75

tors must also be included and the duly executed certifi-
cate must then be filed with the clerks of counties where
office was located and to which it is removed and also
with the Secretary of State. (S.C. L, § 13.) (See
§ 134; also Forms 79-81.)

(g) Classification of Stock. Requires a two-
thirds vote of stock at special meeting called on notice
as required for annual meeting, viz.: two weeks publi-
cation and such other notice as prescribed by the by-laws.
A certificate of the proceedings of such meeting must
be signed and sworn to by the president or vice-president
and secretary or assistant secretary, and must be filed as
was original certificate. (S.C. L., § 61.) (See § 77;
also Forms 82, 83, 85.)

(h) Extension of Corporate Existence. Re-
quires the consent of two-thirds of the stock given by
vote at a meeting called as is annual meeting, or such
consent may be given in writing, and no meeting is then
required. The certificate of amendment must state that
such consent was given and specify the manner in which
it was given, and be subscribed and acknowledged by
the president or vice-president and the secretary or an
assistant secretary, under the corporate seal, and be filed
as was the original certificate of incorporation. (G. C.
L., § 37.) (See § 54.) (For notice of annual meeting,
see § IOI.)

(i) Change of Corporate Name. Though not
specifically so prescribed, except for banking, insurance
and railway corporations, a change of name is usually
authorized by resolution of the directors. Petition for
change must be made at a special term of the Supreme
Court in the judicial district where the principal office is
located. (G. C. L., §60.) The petition must be in
writing, be signed by the petitioner, and be verified as
is a pleading in a court of record, by the official affixing
the corporate signature. (Id., §61.) It must state
the present name of corporation, the name to be assumed
and must specify the grounds of the application (Id.),
and must have annexed thereto a certificate of the Secre-
tary of State that the name proposed is not the same, or
so nearly the same, as that of another domestic corpora-
76 NEW YORK CORPORATIONS.

tion as to be calculated to deceive. (G.C. L., § 60.) A
copy of the petition and notice of motion must be filed
with Secretary of State, which has the effect of reserving
the proposed name for the applicant corporation until three
weeks after date of motion, or any duly notified adjourn-
ment thereof. (Id. § 62.) Outside of New York City
notice of the presentation of petition must be published
once each week for three successive weeks in a paper of
every county in which the corporation has a business of-
fice. In the city and county of New York publication
must be made for a similar period in two daily news-
papers published in the county. (Id.) Within ten days
of entry thereof, the order granting the change and the
papers on which the order is granted must be filed with the
clerk of the county of the principal office, and a certi-
fied copy be filed with the Secretary of State. Also with-
in the same period, publication of the order must be
begun and continued once each week for four successive
weeks in a paper designated by the order. (G. C. L,
§ 63.) Within forty days of the entry of order, affi-
davit of publication thereof must be filed in the office
in which the order is entered and in any other offices in
which a certified copy of order was filed. (Id., § 64.)
(See Forms 75-78.) Fees to county clerk are to cents per
folio for recording order, 6 cents for filing and 8 cents
per folio for certified copy. For recording affidavit of
publication, 10 cents per folio and 6 cents for filing same.
Fees to Secretary of State, $1 for certificate that name
does not conflict, and 15 cents per folio for recording
order.

Informalities or obvious defects in the original, amended
or supplemental certificate of incorporation may be corrected
by an amended cértificate which may be filed either by the
incorporators or directors. (G. C. L., §7.) The Supreme
Court, on notice to the Attorney General, and upon proof that
a charter does not truly set forth the object and purposes of the
corporation, may amend it to conform to the intentions of the
parties. (Id.) (For examples of Charter Amendments, see
Forms 75-89.) (For fees, see generally Part III, Tables 1-4.)
CORPORATE POWERS. 77

§ 72a. Filing and Recording Charter Amendments.

In each case of charter amendment specified in the pre-
ceding section, save when otherwise therein set forth, the
certificate of amendment, or certified proceedings, must be
filed for record with the Secretary of State and with the clerk
of the county of the principal office, as in the case of an
original certificate. (G.C. L., § 5.) The fees to Secretary
of State for recording are 15 cents per folio of 100 words;
to the county clerk, 10 cents per folio for recording and 6
cents for each instrument filed. No filing fee is paid the Sec-
retary of State, nor is any organization tax payable to the
State Treasurer, except on increase of capital stock.

§ 73. Ultra Vires Acts.

Reference has already been made to the relaxation in
practice of the doctrine that a private corporation may exer-
cise only those powers expressly granted or necessarily im-
plied. (See §19.) Many acts which are not permissible
under this rule are daily consummated. The assent of stock-
holders and the lack of injury to creditors leaves the state the
only party competent to complain, and where the business is
private in its nature the courts will not decree forfeiture, un-
less it is clearly shown that some public injury has resulted.
Kent v. Quicksilver Mining Co., 78 N. Y. 159, 186 (1879) ;
People v. N. R. Sugar Ref. Co., 121 N. Y. 582 (1890).

Political contributions by corporations are expressly for-
bidden. (G.C.L., § 44.)
CHAPTER VIII.
CAPITAL STOCK.

§ 74. Capital Stock. Statute Requirements as to Payment.

“Capital stock” must be distinguished from “capital.”

“The capital of a corporation consists of its funds, securi-
ties, credits and property of whatever kind which it possesses.”
Christensen v. Eno., 106 N. Y. 97, 100 (1887), Andrews, J.

The “capital stock” is the total amount of stock as fixed
by the charter of the corporation which it may issue in ex-
change for the money or property paid in by its subscribers.
It is the interest which the latter secure in the corporate enter-
prise by such payment. At the outset if a company issues all
its shares at par for actual value, the capital stock and the
capital are equal. (Id.) It is apparent, however, that though
the former is a fixed amount established by the terms of the
charter and not to be changed except by charter amendment,
the latter consisting as it does of actual assets, may vary great-
ly with the ordinary vicissitudes of business and may be either
greater or less than the capital stock.

One-half the total authorized capital stock of a New York
corporation must be paid in within one year from its incorpora-
tion and a certificate of such payment must, within thirty days
thereafter, be signed and acknowledged by a majority of the
directors, be verified by the president or vice-president and sec-
retary or treasurer and be filed in the offices where the certifi-
cates of incorporation were filed. (B.C.L.,§ 5.) (See Form
63.) The remainder of the capital stock may be issued and
paid for at the discretion of the corporation, or may be left un-
issued if desired. (See § 75.)

78
CAPITAL STOCK. 79

§ 75. Amount of Capitalization.

The “capitalization of a corporation is the amount of
capital stock it is authorized to issue in exchange for value.
Under the New York statute this may be fixed in the charter
at any amount not less than $500 at the discretion of the incor-
porators. (See § 20.) The state interposes no objection to
any amount, no matter how large, provided that the required
fees are paid. In fixing the capitalization it must, however, be
borne in mind that at least one-half its amount must be paid
within the first year. (B.C. L., § 5.)

It is not necessary to issue the full amount of authorized
stock at any one time or by any definite time. Greenpoint
Sugar Co. v. Whitin, 69 N. Y. 328 (1877). The require-
ments of the New York statute are satisfied if one-half is paid
within one year from the date of incorporation. (B.C. L.,
§ 5.) People v. Cement Co., 131 N. Y. 140 (1892). The
balance may remain unissued indefinitely. This enables a cor-
poration by capitalizing at more than its present needs, to pro-
vide for future expansion. Stock may then be issued as needed,
whereas, without this provision, power to increase the capi-
tal would have to be secured by charter amendment. No tax
of any kind is imposed on unissued stock.

The power of a corporation to issue stock is strictly limit-
ed to the amount authorized by its charter. Any excess is
void. Lathrop v. Kneeland, 46 Barb. 432 (1866); N. Y. &
N. H. Ry. v. Schuyler, 34 N. Y. 30 (1865).

§ 76. Classes of Stock. Common and Preferred.

“Every domestic stock corporation may issue preferred
stock and common stock and different classes of preferred
stock, if the certificate of incorporation so provides, or by the
consent of the holders of record of two-thirds of the capital
stock, given at a meeting called for that purpose upon notice
such as is required for the annual meeting of the corporation.”
(S.C. L., § 61.) (See Forms 82, 83, 85.)
80 NEW YORK CORPORATIONS.

Common stock is that which enjoys no special privilege
as to corporate dividends or assets. Preferred stock is that
which has such preferences. The use of preferred stock is gen-
eral. The classifications possible under thé liberal provisions
of the section quoted, include almost any desired lawful privi-
lege. Preferred stock is usually issued to avoid raising money
for corporate purposes by borrowing on bond and mortgage
and the preferential privileges are adjusted to facilitate its sale.
Its use for this purpose has led some courts to treat the issue
of preferred stock as a borrowing of money, but this view has
been expressly repudiated in New York (Kent v. Quicksilver
Mining Co., 78 N. Y. 159 [1879]), where it is held that a
preferred stockholder differs from others only in being en-
titled to certain privileges which those others do not possess.
Preferred stock possesses the advantage over bonds of not
bearing a guaranteed rate of interest and of not subjecting
the company to the dangers of foreclosure.

In the absence of provision to the contrary, preferred
stock has all the privileges of common stock in addition to
whatever extraordinary rights it may possess. The most com-
mon preference is in the matter of dividends, the usual rate
varying from five per cent. to seven per cent. This simply
means that the dividend will be paid if earned, for preferred
stock is subject to the same rule in that respect as the common.
These dividends may be cumulative or non-cumulative. Un-
less expressly denied by the terms of issue, however, the New
York courts interpret preferred dividends as cumulative
(Prouty v. Ry., 1 Hun 655, 665 [1874]; Boardman v. Lake
Shore Ry., 84 N.,Y. 157 [1881]); that is, all arrearages of
preferred dividends must be paid before the common stock is
entitled to dividends. :

Unless otherwise expressly provided, preferred stock par-
ticipates equally with the common in all dividends after both
have received an equal percentage of profit. It is usual, how-
ever, to specifically deny this privilege, except in cases where
CAPITAL STOCK. 81

there are reasons for making the preferred stock exceptionally
attractive.

Preferred stock is not entitled to any greater privileges
than the common in the distribution of assets upon corporate
dissolution unless express provision is made to that effect. It
ig common to confer such preferential rights, however.

Preferred stock has the same voting rights as common
stock. (See § 103.)

§ 77. Classification of Stock. After Organization.

The creation of preferences in stock subsequent to organi-
zation may be accomplished by charter amendment. (See
§ 72.) A special meeting of the stockholders must be held, on
the same notice as is required for the annual meeting (see
§ ror, subdiv. c), and the change must receive a favorable
vote of two-thirds of the entire capital stock. The president
or vice-president and the secretary or assistant secretary must
sign a certificate under oath setting forth the proceedings at
the meeting and file and record the same in the offices where
the original certificate of incorporation was filed. (S.C. L,
§ 61.) (See § 72 (g); also Forms 82, 83, 85; for fees see
Part III, Table No. 4.)

§ 78. Redemption of Preferred Stock.

Upon written request of a holder of preferred stock, the
directors may, by a two-thirds vote, exchange his stock for
common stock, and issue certificates of common stock there-
for, share for share, or upon such other valuation as may have
been agreed upon in the “certificate of organization of such
corporation, or the issue of such preferred stock,” provided
the total amount of capital stock is not thereby increased.
(S.C. L., § 61.)

There is no express statutory authority in New York for
the issue of preferred stock redeemable by the company with
surplus upon conditions and at a price fixed by the terms of
82 NEW YORK CORPORATIONS.

its issue, but such an arrangement, if free from fraud, would
undoubtedly be sustained. The redemption should not, how-
ever, be made obligatory, but merely optional with the com-
pany, as otherwise if no funds were in hand at the appointed
date from which such stock might be lawfully redeemed,
the company would be placed in an awkward dilemma.

§ 79. Other Classifications.

Under the New York statutes, preferred stock may be and
is classified in many ways. (S.C.L.,§ 61.) Participation in
dividends may be limited to a certain percentage in each year,
or the preferred stock may be denied participation in the distri-
bution of assets on dissolution, or different classes of preferred
stock may be created, having dividend rights varying as to time
of payment or amount. Other classifications may be made to
meet varying conditions. (As to restriction of voting rights,
see § 103.)

In any of these cases the conditions under which any
stock is issued should appear plainly on the face of its certifi-
cate, or, if too lengthy to permit of this, such reference should
be made to the charter in which the conditions are set forth
as to put an intending purchaser on his guard.

§ 80. Par Value of Shares.

This must not be less than $5 nor more than $100. (B.
C.L., § 2.) The par value may be changed within the limits
stated by a two-thirds vote of the stock represented at a special
meeting, held and conducted in the same manner, and upon
filing a like certificate, as required for the increase or reduc-
tion of the capital stock. (See § 72; also Forms 84, 85.) If
the change is authorized, the directors issue new certificates to

. the par value of the old in exchange therefor and cancel the
old certificates. (S.C. L., § 65.)

Between the amounts of $5 and $100 fixed by the statutes,

any par value of shares may be adopted which the needs of
CAPITAL STOCK. 83

the company suggest. The most common figures are $10 and
$100.

Shares of stock in the same company may be classified on
the basis of different par values, as a par value of $100 for the
common stock and $10 for the preferred stock. Such an ar-
rangement is, however, unusual, is apt to be confusing and
should not be adopted without some strong reason therefor.

§ 81. Subscriptions.

The New York laws impose no requirements as to prelimi-
nary subscription to the capital stock of a proposed corpora-
tion, save as to the subscriptions of the incorporators which
appear in the charter. The company is therefore fully organ-
ized when the certificate is duly filed and recorded and the tax
paid. (G.C.L.,§ 5.) In the absence of any statutory direc-
tion regarding preliminary subscriptions, the Court of Appeals
has worked out a distinction between an agreement to form a
corporation and subscribe to its stock, and an agreement to
subscribe for shares when the corporation is organized.

Under the decisions of the court, a preliminary subscrip-
tion made in the first form, e. g., “We the undersigned hereby
subscribe for the number of shares set opposite our names,”
is a continuing offer which may be accepted upon the forma-
tion of the company since “the intention of the parties was to
become shareholders without further action upon their part.”
Yonkers Gazette Co. v. Taylor, 30 App. Div. 334 (1898).

On the other hand, where the language of the agreement
indicates an intention to subscribe “when the corporation is
organized” or upon some other condition (Lake Ontario R.
R. Co. v. Curtiss, 80 N. Y. 219 [1880]), further action is
necessary on the part of the proposed subscribers to make them
stockholders.

In the first case the subscription may be modified or with-
drawn at any time before acceptance, but if not changed (Burt
v. Farrar, 24 Barb. 518 [1857]), it may be accepted by the
84 NEW YORK CORPORATIONS.

corporation when organized and then at once becomes a bind-
ing contract between the parties. Avon Springs Sanitarium v.
Weed, 119 App. Div. 560 (1907). In the second case, the
preliminary subscription is little more than a memorandum
which must be ratified by both parties after incorporation
before it becomes binding.

In the matter of changes in the terms of subscription
agreements it has been held that even if the terms of the pre-
liminary agreement are changed in the charter as accepted by
the Secretary of State, it will not release a subscriber under the
agreement, unless the changes are material in their nature;
“When the business is not changed, or the party is not shown
to be prejudiced and no fraud intervenes, there exists no sound
basis for being relieved from the contract whose substance is
fully performed.” ‘Yonkers Gazette Co. v. Taylor, 30 App.
Div. 338 (1898). In the case cited a change of name was held
immaterial.

“Tf the whole capital stock shall not have been sub-
scribed at the time of filing the certificate of incorporation, the
directors named in the certificate may open books of subscrip-
tion to fill up the capital stock in such places and after giving
such notices as they may deem expedient, and may continue
to receive subscriptions until the whole capital stock is sub-
scribed.” (S.C. L., § 53.) This is a mere statutory declara-
tion of the common law power of directors to accept stock
subscriptions. Buffalo & Jamestown Ry. v. Gifford, 87 N. Y.
294, 300 (1882). “The section may have been drawn by the
person who prepared the statute, without a definite idea of its
utility or necessity, It does not prohibit or forbid any other
mode of subscription and we are inclined to the opinion that
it was not intended by this section to prescribe a fixed statu-
tory mode of making a subscription and that any contract of
subscription good and valid at common law is still valid, not-
withstanding this section.” (Id.)

It is further provided (S. C. L., § 53), that “at the time
CAPITAL STOCK. 85

of subscribing, every subscriber, whose subscription is payable
in money, shall pay to the directors ten per centum upon the
amount subscribed by him in cash, and no such subscription
shall be received or taken without such payment.”

This provision for payment applies only to subscriptions
subsequent to organization. South Buffalo Gas Co. v. Bain,
9g Misc. 425 (1894) ; United Growers Co. v. Eisner, 22 App.
Div. 1, 4 (1897). It is mandatory as to the latter and a
subscription upon which payment is not made is valid for no
purpose, not even to subject the alleged stockholder to liability
to creditors. Perry v. Hoadley, 19 Abb. N. C. 76 (1887) ;
South Buffalo Gas Co. v. Bain, supra. Payment need not
accompany the subscription but must be made within a rea-
sonable time. “The intent of the section, doubtless, was that
no subscription should be valid until ten per cent. was paid
thereon, and not that it should be invalid if a short interval
occur between the actual subscription and the payment of the
money.” Black River and Utica Ry. v. Clarke, 25 N. Y. 208,
210 (1862); South Buffalo Gas Co. v. Bain, supra. A note
accepted by the directors as payment of the ten per cent. and
afterwards enforced by them, is sufficient compliance with the
statute. Ry. Co. v. Wolley, 1 Keyes 118 (1864). <A check,
if duly paid, is sufficient, but a check upon which payment is
stopped is not enough to render the subscription binding. Ex-
celsior Co. v. Stayner, 25 Hun gt (1881). A certified check
is “cash” within the meaning of the statute. Matter of Staten
Id. R. T. Co., 37 Hun 422 (1885).

§ 82. Stock Certificates.

“The stock of every stock corporation shall be represented
by certificates prepared by the directors and signed by the
president or vice-president and secretary or treasurer and seal-
ed with the seal of the corporation * * * ” (S.C.L,
§ 50.) The issue of stock certificates is in no sense a transfer
of stock. Christensen v. Eno., 106 N. Y. 97 (1887); Burrall
86 NEW YORK CORPORATIONS.

v. Ry., 75 N. Y. 211 (1878). “The certificate is simply a
written acknowledgment by the company of the interest of
the subscriber in its property and franchises.” Burr v. Wil-
cox, 22 N. Y. 551, 555 (1860) ; Kent v. Mining Co., 78 N. Y.
180 (1879). (See Forms 11, 12.)

A stockholder’s rights do not depend upon the issue of a
certificate (Rutter v. Kilpatrick, 63 N. Y. 604, 606 [1876] and
cases there cited), nor upon its continued existence. The
certificate is merely a convenient evidence of his interest in
the company, which is not affected by the loss or destruction
of the certificate. This latter, save when endorsed in blank,
has none of the qualities of negotiable paper. Weaver v. Bar-
den, 49 N. Y. 286 (1872) ; Driscoll v. West Bradley Co.,
59 N. Y. 96, 105 (1874). Its legal assignment will convey
title, but it is well settled that an unauthorized transfer, if
there has been no such negligence or conduct on the part of
the owner as to estop him to deny authority, conveys no title,
even to an innocent purchaser for value. McNeil v. Bank,
46 N. Y. 325 (1871); Bank v. Ry., 137 N. Y. 231, 238
(1893); Knox v. Eden Musee Co., 148 N. Y. 441, 456
(1896).

A certificate of stock is, however, a representation to
the world that the holder has a certain interest in the capital
of the company, and, if wrongfully issued by an authorized
officer, the company is liable to an innocent holder. If the
stock could have been legally issued, this latter becomes a
stockholder, but if the limit of authorized capitalization had
been reached, he can recover damages only. N. Y. and N.
H. Ry. v. Schuyler, 34 N. Y. 30 (1865). Certificates may be
issued for partly paid stock if express provision to that effect
is contained in the original or amended charter and dividends
may be declared on the basis of the amount paid. (S.C. L.,
§ 60.) The sums actually paid on such stock should appear
plainly on the face of the certificates. (See § 93.)
CAPITAL STOCK. 87

§ 83. Lost and Destroyed Certificates.

Though a stockholder’s certificate be unissued, lost, stolen
or destroyed, he is still entitled to every right of a stock-
holder. The stock books are sufficient evidence of his owner-
ship, and the absence of his certificate does not affect his right
as an owner of stock.

If the owner of a certificate which has been lost or de-
stroyed wishes a new certificate, he may apply to the company
for a duplicate and, if refused, may petition the Supreme Court
at special term to compel the company to issue the same.
Upon due proofs of the facts, an order will be made requiring
the petitioner (unless a municipal corporation) to deposit
security with the company and the latter to replace the missing
certificate. (S.C. L., §§ 67, 68.) Kinnan v. Ry., 140 N. Y.
183 (1893).* Generally, by provision of the by-laws, the is-
suance of certificates to replace those lost is placed in the dis-
cretion of the directors. It is usually stipulated, however,
that the directors shall exact a bond of indemnity before a lost
certificate is replaced. (See Form 15.)

§ 84. Consideration for Issue.

“No corporation shall issue either stock or bonds except
for money, labor done or property actually received for the use
and lawful purposes of such corporation.” (S.C. L, § 55.)
To issue stock as fully paid when in fact it does not represent
value received, is a fraud upon the corporation and upon sub-
sequent takers in good faith. Barnes v. Brown, 80 N. Y.
527, 534 (1880). The effect of this salutary rule is, however,
weakened by the further provision of the statutes that in issu-
ing stock for property the judgment of the directors as to its
value is conclusive unless actual fraud can be shown (S. C.
L., § 55), and that so far as the corporation and its stock-
holders are concerned stock so issued is full paid and not liable
to further calls.

* As to what must be proven to entitle the petitioner to the order, see Matter of Biglin
v. Ass’n, 46 Hun 223 (1887); Matter of Coats, 75 App. Div. 469 (1902).
88 . NEW YORK CORPORATIONS.

This provision gives the directors wide discretion in the
exchange of stock for property. If, however, their valuation
in any case is grossly excessive, it is strong evidence of fraud
and the court will intervene in a proper case.’ (See §§ 46, 50.)

“Lawful purposes,” as used in the statutes, is interpreted
to mean those not foreign to the business of the corporation
and is liberally construed. Rafferty v. Gas Co., 37 App. Div.
618, 621 (1899).

Stock issued for an inadequate consideration is not void
nor are the directors personally liable to subsequent purchasers.
Ersfeld v. Exner, 128 App. Div. 135 (1908).

§ 85. Calls for Subscription Instalments.

“Subscriptions to the capital stock * * * shall be
paid at such times, and in such instalments as the board of
directors may by resolution require.” (S.C. L, § 54.) A
subscriber who fails to pay when the instalment falls due is
properly chargeable with interest. Gould v. Oneonta, 71 N.
Y. 298, 305 (1877). After the expiration of sixty days from
the service on a defaulting stockholder, personally or by mail,
of written notice requiring him to make the payment due with-
in sixty days at a specified place, and stating that upon his
failure to do so his stock and the payment thereon will be
forfeited, the directors may declare the stock on which default
is made, together with all previous payments thereon, for-
feited to the corporation. (S.C. L., § 54.) Mitchell v. Min-
ing Co., 40 N. Y. Supr. Ct. 406 (1875) ; 67 N. Y. 280
(1875). When stock is forfeited, the former holder is under
no liability for furfher calls (Mills v. Stewart, 41 N. Y. 384,
389 [1869]), nor is he liable for the unpaid instalments due
on calls already made. Small v. Herkimer Co., 2 N. Y. 330.
(1849). Forfeited stock may be reissued. If not sold for its
par value, or subscribed for within six months, it must be.
cancelled and deducted from the amount of capital stock. If
by such cancellation the amount of outstanding stock is reduced.
CAPITAL STOCK. 89

below the minimum required by law ($500), it must be raised
to the statutory amount within three months, or an action may
be brought to close up the corporate business as in case of
insolvency. (S.C. L., § 54.) At any time before sale of
the forfeited shares, the original stockholder may redeem
them by payment of calls and interest. Mitchell v. Mining Co.,
supra,*

§ 86. Increase or Decrease.

Increase or decrease of capital stock to not less than
the minimum prescribed by law may be effected by charter
amendment. (S.C. L., §§ 62, 63, 64.) (See § 72; Forms
84, 85.)

If the unanimous written consent of the stock is obtained
to the proposed change no stockholders’ meeting is necessary,
but the consent so given must be entered on the corporate
minutes and be filed as stated on the following page. Before
filing it must have annexed thereto an affidavit of the custo-
dian of the stock book that the parties signing represent the
entire issued and outstanding stock.

The change may be effected, without unanimous consent,
by a majority vote in interest of the outstanding stock, called
on notice stating the time, place and object of the meeting
and the amount of the proposed increase or reduction, signed
by the president or a vice-president and a secretary, published
once a week for two successive weeks in a newspaper in the
county where its principal business office is located, if there
is such a paper, and also mailed to each stockholder two weeks
before the meeting or served personally at least five days
before. The chairman and secretary of such meeting must
be chosen from among the stockholders.

If the proposed change is adopted either by unanimous
written consent or at a special meeting by a vote of the ma-

jority of the whole stock, a certificate of the proceedings,

*As to liability for calls after transfer of stock, see Plank Road Co. v. Thatcher, 11
N.Y. 102 (1854); Roosevelt v. Brown, 11 N. Y. 148 (1854); Tucker v. Gilman, 121 N. Y. 189
(1890).
go NEW YORK CORPORATIONS.

showing compliance with the statutory provisions, must be
“made, signed, verified and acknowledged” in duplicate by
the chairman and secretary of the meeting, or, in the case of
unanimous consent, by the president and secretary of the com-
pany, and one copy be filed in the office of the clerk of the
county where the principal office is located and the other copy
be filed with the Secretary of State. (See Forms 84, 85.)
The increase or reduction dates from the filing of the certifi-
cate. (S.C.L, § 64.)
This certificate must set forth:

(1) The amount of authorized capital.
(2) The proportion thereof actually issued.

(3) The amount to which the capital stock is in-
creased or reduced.

(4) In case of reduction the whole amount of the
ascertained debts and liabilities.

A tax of one-twentieth of one per cent. must be paid on
any increase of stock. The old stockholders have a right to
purchase the new stock pro rata before it may be offered to
outside investors. Matter of Wheeler, 2 Abb. Prac. N. S.
361, 363 (1866) ; Stokes v. Continental Trust Co., 186 N. Y.
285 (1906).

In case of reduction each copy of the certificate must be-
fore filing be endorsed by the state comptroller to the effect
that the reduced capital is sufficient for the proper purposes of
the corporation and is in excess of its ascertained debts and lia-
bilities. The comptroller’s fee is $1 for each copy. (Execu-
tive Law, § 42.)e If stock is reduced, the meeting or the
written consent may provide for a distribution, pro rata among
the stockholders, of the amount of capital released by such re-
duction of stock. (For fees, see Part III, Table No. 4.

Stock when decreased must be reduced so as not to dis-
turb the proportionate interest of various classes. Page v.
American & British Mfg. Co., 129 App. Div. 346 (1908).
CAPITAL STOCK. gi

§ 87. Transfer of Stock.

“A transfer of shares in a corporation means substitution
of a new shareholder in place of an outgoing shareholder in
the company, and an assumption by the former of all the
rights and obligations which attached to the transferring share-
holder by reason of his ownership of the shares.”” Morawetz
Private Corp., § 159; Tucker v. Gilman, 121 N. Y. 189
(1890). Subject to the statutory provisions regulating trans-
fers, as noted hereinafter, a corporation may prescribe in its
by-laws the method by which stock may be transferred. (S.
C. L., § 50.) This does not give the corporation power to
prohibit transfers or to abridge the right to transfer, which is
one of the chief attributes of corporate stock (Rochester
Land Co. v. Raymond, 158 N. Y. 576, 583 [1899]), but sim-
ply to direct the manner in which it shall be done. Driscoll v.
West Bradley & C. 'M. Co., 59 N. Y. 96, 104 (1874) ; Kinnan
v. Sullivan Co. Club, 26 App. Div. 213, 216 (1898). See
§ 91, subdiv. d.)

No share of stock is transferable until all previous calls
thereon have been fully paid. (S.C. L., § 50.) It is not at all
essential to transferability, however, that stock should have
been fully paid for. Rochester Land Co. v. Raymond, supra.
If all calls have been satisfied, it may be transferred freely,
even though the full amount due on the subscription has not
been paid. In such case, all liability of the original subscri-
ber ceases as soon as the transfer is registered by the company
and the purchaser is liable for subsequent calls. Id.

Transfer or delivery of the certificate with assignment
and power of transfer is perfectly valid as between the parties
and passes the title both legal and equitable. Shellington v.
Howland, 53 N. Y. 371 (1873) ; Bank v. Colwell, infra.
In this manner certificates may be rendered practically nego-
tiable instruments, for it is well settled that an assignment
may be executed in blank and the certificate so assigned pass
from hand to hand any number,of times, the assignment when
g2 NEW YORK CORPORATIONS.

filled up by the last holder and registered on the books of the
company, vesting the ownership of the shares in him. Kort-
right v. Bank, 20 Wend. g1 (1838) ; McNeil v. Bank, 46
N. Y. 325 (1871). ;

The statutes, however, provide (S. C. L., § 32), that
transfers are not valid as against the corporation, its stock-
holders and creditors for any purpose except to render the
transferee liable for corporate debts to the same extent as the
original owner, until the transfer is entered on the books of the
company. This provision is, however, intended solely for the
protection of the corporation and its creditors and may be
waived or asserted at pleasure. Bank v. Colwell, 132 N. Y.
250, 256 (1892) and cases there cited. If the provision is not
waived, the vendor remains the nominal owner until the trans-
fer is entered on the books, and until such entry is made,
both he and the vendee are liable to creditors. The vendor
if compelled to pay may recover indemnity from the vendee.
Johnson v. Underhill, 52 N. Y. 203, 209 (1873).

The corporation may reserve a lien upon the shares of its
stockholders for debts due to it from the owners, by printing
on the certificates a copy of the statute under which this lien
is established. (S.C. L., § 51.) The lien cannot be created
by a by-law.* Driscoll v. Mfg. Co., 59 N. Y. 96 (1874) ;
Rochester Land Co. v. Raymond, 158 N. Y. 576 (1899).

The statutes provide that no stockholder shall transfer
his stock in contemplation of insolvency. An attempted trans-
fer in violation of this provision is void. (S.C. L., § 66.)
It has been decided that this provision was enacted to prevent
a stockholder evading his statutory liabilities to the corpora-
tion and its creditors and that consequently, where the stock
is full paid, a bona fide sale is valid even when made with
knowledge of impending insolvency. Sinclair v. Fuller, 75
N. Y. St. 641 (1896); 158 N. Y. 607 (1899).

The language of the New York statute of frauds, which

* As to what constitutes waiver of the lien of the corporation, see Bank v. Bank, 105
U. S. 217 (1881).
CAPITAL STOCK. 93

includes “choses in action,” renders a contract for the sale of
shares to the value of over $50 unenforceable unless in writ-
ing. (Personal Prop. Law, § 31, subdiv. 6.)

A transfer, after dissolution of the corporation, operates
simply as an equitable assignment. James v. Woodruff, 10
Paige 541 (1843).

(For tax on transfers, see §§ 151, 152; forged and un-
authorized transfers, § 82; rights of transferrer and trans-
feree to dividend, § 88.)

§ 88. Dividends.

It is a fundamental rule of corporation law that dividends
are payable only from profits. The New York statute express-
ly provides that “the directors of a stock corporation shall not
make dividends, except from the surplus profits arising from
the business of such corporation, nor divide, withdraw or in
any way pay to the stockholders or any of them, any part of
the capital of such corporation, or reduce its capital stock,
except as authorized by law.” (S.C. L., § 28.) Violation of
this section renders directors under whose administration it
happens personally liable to the corporation and to the credi-
tors, unless they cause their dissent to be entered at large upon
the minutes. (Id.) They are also guilty of a misdemeanor.
(Pen. Law, § 664; G. C. L., §§ 90-92, 109-115.) (See
§§ 123, 124.)

The practical difficulty of determining what are profits
is sometimes great where corporate operations are at all com-
plicated, but the rule is invariable that “the surplus over and
above the capital and debts becomes profits.” Barry v. Mer-
chants Exchange Co., 1 Sandf. Ch. 307 (1843); Berwind-
White Coal Co. v. Ewart, 11 Misc. 490 (1895).

When a corporation has a surplus, it rests in the fair and
honest discretion of the directors, uncontrollable by the courts,
whether a dividend shall be declared and, if made, how much
it shall be and when and where it shall be payable. Williams
94 NEW YORK CORPORATIONS.

v. Telegraph Co., 93 N. Y. 162, 192 (1883); Burden v. Bur-
den, 159 N. Y. 287 (1899).

In case of preferred stock, the payment of dividends de-
pends upon the wording of the preferéntial clause. If this
provides for a dividend at a fixed time if a surplus exists
from which it may then be lawfully paid, the directors have
no discretion in the matter, but, given the profits from which
the dividend may be paid, must declare it at the due date. If,
however, as is usually the case, the preferential clause merely
calls for dividends to a certain amount before any dividend
is paid holders of the common stock, the directors have full dis-
cretion as to the time of payment.

In any case, however, the directors’ discretion must be ex-
ercised with fairness. If bad faith can be shown and the di-
rectors refuse, without reasonable cause, to declare a dividend,
the interposition of the courts may be had to compel a fair
dividend, for corporate profits properly belong to the share-
holders and they are entitled to an honest administration of
them. Hiscock v. Lacy, 9 Misc. 578 (1894).

Dividends are usually paid in cash. They are, however,
sometimes paid in the form of scrip, or distributed as proper-
ty, or issued as stock. ‘The surplus may be in cash and
then it may be divided in cash. It may be in property and if
the property is so situated that a division thereof among the
stockholders is practicable, a dividend in property may be de-
clared and that may be distributed among the stockholders.”
Williams v. Telegraph Co., 93 N. Y. 162, 189 (1883).

Stock dividends are not uncommon. To justify such
a dividend the company must have authority to issue the
amount of stock necessary, and should have sufficient actual
capital in property in excess of the par value of the capital
stock then outstanding, to represent the amount of share capital
issued as dividends. In such case the surplus is preserved,
secure and undivided for the benefit of the corporate creditors
and no one is injured. Williams v. Telegraph, supra, p. 191;
CAPITAL STOCK. 95

Merz v. Conduit Co., 87 Hun 430 (1895) ; Morawetz Private
Corp., § 453.

Dividends become the property of the stockholder of
record, or his legal representative, at the time they are de-
clared, without reference to the time when they were earned.
Jones v. Ry., 57 N. Y. 196 (1874); Jermain v. Ry., 91 N. Y.
483 (1883.) In paying dividends the corporation is justified
in relying on its books and need not demand the production of
the certificate. Brisbane v. Ry., 94 N. Y. 204 (1883). The
rights of equitable assignees will, however, be protected and
the company is not justified in the payment of dividends to
stockholders of record if it has due notice of the transfer of
their rights. Smith v. Coal Co., 7 Lans. 317, 321 (1873).

Dividends must be distributed ratably without discrimi-
nation. Jones v. Ry., supra. When declared they cease to be
a part of the corporate assets and become at once the property
of the stockholders. Matter of Kernochan, 104 N. Y. 618,
624 (1887). (For rights of preferred stock to dividends, see
§ 76.)
CHAPTER IX.
STOCKHOLDERS.

§ 89. Creation of the Relation.

The relation of stockholder is established by contract
between the corporation and the individual seeking member-
ship. The contract may be original, as in the case of a direct
subscription for stock, or it may be the result of the substi-
tution which takes place upon a transfer of stock. As already
stated, the stock certificate is a mere “muniment of title” (See
§ 82), and the fact that it has not been issued, or that it has
been lost or destroyed does not affect a stockholder’s rights.
The issued certificate is merely a convenient evidence of a
condition already existing.

§ 90. Rights of Stockholders. Collective.

The relation between a corporation and its stockholders
is practically that of trustee and beneficiaries. The corpora-
tion has the legal title to the property, but the shareholders
are entitled to have it managed for their benefit in accordance
with the charter and by-laws. The well established rule of
trusts, that when a trustee is invested with active duties, the
beneficiary will ngt be allowed to sue for the protection of the
trust unless the trustee has refused or is unable to do so on
his behalf (Western Ry. Co. v. Nolan, 48 N. Y. 513 [1872]),
applies, with peculiar force, to the case of a corporation and
its shareholders. Morawetz Private Corporations, §§ 237,
239. The directors or managing agents of the corporation

are clothed with wide discretionary power in the matter of
* But see Karnes v. Ry., 4 Abb. Pr. N.S. 110 (1867).

96
STOCKHOLDERS. 97

corporate suits and it is their province to institute litigation
when necessary. The stockholders, whether individually or
collectively, have no such right unless the directors fail sig-
nally in this duty. Therefore, before a stockholder may com-
plain of an injury done to the corporation, or enforce cor-
porate rights, it must be shown that he has used every effort
to induce the corporation itself to sue. Vanderbilt v. Garrison,
5 Duer 689 (1856); Stromeyer v. Combes, 15 Daly 29
(1888) ; O’Connor v. Va. P. & P. Co., 184 N. Y. 46 (1906).
“Tt would be a doctrine attended with very serious con-
sequences if every individual shareholder, assuming the place
of the corporation, could decide for it when action should
be brought.” Samuel v. Holladay, 1 Wolw. 400 (U. S. C.
Ct.) ; McNaughton v. Osgood, 41 Hun 109 (1886). It is
necessary therefore to justify the individual stockholder’s suit
to show actual bad faith in the refusal of the proper agents
to sue. Roberts v. Ry., 64 St. Rep. 167 (1894); Sage v.
Culver, 147 N. Y. 241 (1895).

The collective powers of the stockholders in the manage-
ment of the corporation have already been indicated in con-
nection with the various subjects with which the stockholders
are concerned. They may be recapitulated as follows:

(1) To adopt or amend by-laws. (G.C.L., § 11,
subdiv. 5) (See Chap. IV, “By-Laws.’’)

(2) To elect directors. (G.C.L,§11;5.CL,
§ 25.) (See § 106.)

(3) To amend the charter. (See § 72.)

(4) To effect dissolution. (G.C. L., § 221.)
(See § 56.)

(5) To control the following acts of the direc-
tors, all of which must receive the approval of the stock-
holders before consummation.

(a) Mortgages. All propositions to mortgage corpor-
ate property, either real or personal, must be submitted to
the stockholders and receive a formal vote of two-thirds in
interest. (S.C.L., §6.) (See § 67.)
98 NEW YORK CORPORATIONS.

(b) Conversion of Obligations into Stock. Directors,
when duly authorized thereto by two-thirds vote of the stock,
may confer on holders of corporate bonds the right to
convert them into stock. (S.C.L.,§6.) (See § 67.)

(c) Sale of Property and Franchise. All transactions
‘involving the sale of the entire corporate property and fran-
chises to a domestic corporation, require a two-thirds vote of
the stock for validation. If the property is in an adjoin-
ing state and the sale is made to a corporation of.the state
where it is located, a vote of ninety-five per cent. is necessary.
(S.C. L., §16.)

(d) To Guarantee Bonds. The stockholders must ap-
prove a proposition to guarantee the bonds of another cor-
poration before it can be carried out by the directors. If all
the stock of the corporation aided is owned by the corporation
making the guaranty, a two-thirds vote of the stock is suffi-
cient, otherwise consent must be unanimous. (S.C. L., § 8.)
(See § 68.)

(e) Consolidation. Consolidation with other corpora-
tions requires the consent of two-thirds of the stock. (B.
C. ley § 8) (See § 70:)

({) Renewal. Extension of corporate existence can be
effected only with the assent of two-thirds of the stock. (G.

CG. Ian 8 37.) (See § 54.)

§ 91. Rights of Stockholders. Individual.

An action to protect the rights of the individual member
as distinguished from those of the corporation must be
brought by the stockholders. Meyers v. Scott, 20 St. Rep. 35
(1888). The rights of a stockholder, infringement of which
may be redressed in New York by suit brought in his indi-
vidual capacity, are as follows:

-. (a) Right to Notice; Voting. To be notified of elec-
tions, and to vote thereat, in person or by proxy. For depri-
vation of this right, the injured stockholder may sue to have
STOCKHOLDERS. 99

any corporate action taken at such meeting declared void.
People v. Albany Ry., 55 Barb. 344 (1869); People ex rel.
Loew v. Batchelor, 22 N. Y. 128, 134 (1860). (See § 103.)

(b) Dividends. To share proportionately in dividends.
When a dividend has been declared it becomes, ipso facto,
the property of the shareholders pro rata and any one of them
may sue for his share if not paid. If, however, the directors
wrongfully fail to declare a dividend, the injury is to the
stockholders collectively, and the remedy must be obtained
through the corporation. (See § 88.) The courts will inter-
fere at the instance of a stockholder to secure a fair distribu-
tion of profits (Luling v. Ins. Co., 45 Barb. 510 [1866]),
and a holder of preferred stock may enforce his preferential
rights in the same manner. Boardman v. Ry., 84 N. Y. 157,
180 (1881).

(c) Stock Certificates. A stockholder is entitled to a
stock certificate and, under proper conditions, to have it re-
placed in case of loss. (See § 83.) Although his rights as
stockholder do not depend upon his possession of such a cer-
tificate, he is entitled to it as evidence of those rights and to
facilitate their transfer. (See § 82.)

(d) Transfer of Stock. The individual stockholder may
freely transfer his shares and can force the corporation to
register the transfer. Dunn v. Ins. Co., 19 W. Dig. 531
(1884). He cannot be deprived of this right by by-law under
the provision allowing corporations to regulate stock trans-
fers in their by-laws. The corporation is, however, allowed
to close the transfer book and refuse to register changes of
ownership for forty days prior to any annual or special meet-
ing, if a by-law to that effect is regularly adopted. (G. C.
L., § 23.) (See § 87.)

(e) Inspection of the Corporate Books and Records.
A stockholder is entitled to a certain supervisory right over
the corporate affairs to enable him to properly protect.his in-

terests and must be allowed, when necessary, to examine the
* See also Hiscock v. Lacy, 9 Misc. 578, 593 (1894).
100 NEW YORK CORPORATIONS.

corporate records for this purpose. The stock book contain-
ing a list of stockholders and transfers must be kept open for
his inspection for three hours each business day and he may
make extracts for future use. (S.C. L., § 32.) (See §§ 136,
137.) Also any voting trust agreements must be kept on file
at the company‘s principal office and open to his inspection
during business hours. (G.C.L., § 25.) The same is true of
the financial statements rendered by the treasurer on request
of the stockholders entitled to demand it. (S. C. L., 69.)
(See subdiv. f below.)

These express provisions do not deprive the stockholder
of his common law right to obtain a court order for the ex-
amination of any other of the corporate records where he can
show that such a privilege is necessary to properly protect his
rights. Matter of Sage, 70 N. Y. 220 (1877); Matter of
Steinway, 31 App. Div. 70, 73 (1898) ; People ex rel. Ludwig
v. Ludwig & Co., 126 App. Div. 696 (1908). (See § 137.)

Upon a refusal to permit an inspection of the books, in
a case where the stockholder is entitled to see them, he may
bring mandamus proceedings and secure an order as a matter
of absolute right. People ex rel. McDonald v. U. S. M. R.
Co., 20 Abb. N.C. 192 (1888) ; Matter of O’Neill, 47 Misc.
495 (1905).

(f) Financial Statement. Five per cent. of the stock-
holders, if the corporation is capitalized at an amount not ex-
ceeding $100,000 or three per cent. if over that sum, not
oftener than once a year, may demand a sworn statement from
the treasurer showing in detail the corporate assets and lia-
bilities. This report must be prepared and delivered to the
person making the demand within thirty days thereof and a
copy must be kept on file at the office of the corporation for
twelve months open to the inspection of stockholders during
business hours. (S.C. L., § 69.) French v. McMillan, 43
Hun 188 (1887).

(g) Dissolution. Under certain circumstances a stock-
STOCKHOLDERS. IOI

holder may institute proceedings to secure dissolution of the
corporation. (G. C. L., §§ ror, 102.) (See §56.)

§ 92. Liability of Holders of Full-Paid Stock.

Full-paid stock is that for which the company has received
its par value in cash, services or property appraised by the
directors in good faith. (S.C. L., § 55.) Ordinarily in this
state the only liability of holders of full-paid stock is to em-
ployees of the company, though the additional obligations of
stockholders of a full liability company may be obtained if
for any reason it is desired by the procedure set forth in sub-
division (b) of this section.

(a) Liability to Employees. Holders of full-paid stock
are liable for debts due and owing to laborers, servants or
employees other than contractors, for services performed by
them for the corporation. (S. C. L., § 57.) The statute,
being penal in its nature, has received a strict construction,
The term “employees” has been defined as “those employed,
in subordinate and humble capacities and to whom the hard-
ships would be great if their wages and salaries were not
promptly paid.” To these only, and not to every one who is
engaged by a corporation, the stockholders are liable. Bris-
tor v. Smith, 158 N. Y. 157 (1899).

This liability may be enforced against any stockholder.
In order to take advantage of his rights against the stock-
holders an employee must, within thirty days after termi-
nation of his service, notify the stockholder or stockholders to
be held, in writing, of his intention to hold him or them liable.
He must then obtain judgment against the corporation and
have execution returned unsatisfied. After this he may bring
action against the stockholder, but must begin the same within
thirty days from that time. (S.C. L., § 57.)

(b) Full Liability Companies. Full-paid stock may be
subjected to liability to general corporate creditors if express
provision to that effect is made in the original charter, or by
102 NEW YORK CORPORATIONS.

amendment passed by resolution of two-thirds of the board of
directors with unanimous written consent of the stockholders.
The certificate of any such amendment must be signed and
acknowledged by the president and treasurer or by the direc-
tors, be accompanied by the authorizing resolution and consent,
and be filed in the same offices as the original certificate of in-
corporation. The stockholders are then severally liable for
all corporate debts and liabilities. As a preliminary to
holding any such stockholder, judgment must be obtained
against the corporation in an action begun within two years
after the debt became due and execution returned unsatisfied.
Adams v. Slingerland, 87 App. Div. 312 (1903); Sanford v.
Rhoads, 113 App. Div. 782 (1906). A stockholder who
pays the debt is entitled to contribution pro rata from the
other shareholders and may recover from them in a joint
or several action. (B. C. L., § 6.) There are few full
liability companies in the state since they lack the chief attrac-
tive feature of the ordinary corporate form.

§ 93. Liability of Holders of Stock Not Full Paid.

“Every holder of capital stock not fully paid, in any
stock corporation, shall be personally liable to its creditors,
to an amount equal to the amount unpaid on the stock held
by him for debts of the corporation contracted while such
stock was held by him.” (S. C. L., § 56.)

It is a secondary liability, however. Action must be
begun against the corporation within two years after the debt
falls due, and execution on the judgment recovered must be
returned unsatisfied, in whole or in part, before suit may be
brought against the stockholder. The time limitation of the
statute will be excused where compliance has been rendered
impossible by law, as where creditors have been enjoined in
dissolution proceedings. Lang v. Lutz, 83 App. Div. 534
(1903). The debt must also have been payable within two
years from the time it was contracted and the stockholder’s
STOCKHOLDERS. 103

liability terminates unless action is brought within two years
after he ceases to be a stockholder. (S.C. L., § 59.)

§ 94. Personal and Representative Liability.

No person holding stock as an executor or administrator,
guardian or trustee is personally liable as a stockholder unless
he voluntarily invested the trust funds in the stock so held.
The funds in the hands of one holding in any of such repre-
sentative capacities are liable to the same extent as the testa-
tor, intestate ward or person interested in the trust would be
if alive and capable of acting. A pledgeor of stock as collateral
security is considered the holder thereof and is liable as a
stockholder. (S.C. L., § 58.)

§ 95. Relations of Stockholders to Each Other.

Stockholders owe no duty to each other as a result of
their relation. Colonizer’s Realty Co. of Brooklyn v. Shatz-
kin, 129 App. Div. 609 (1908). As such, they are not re-
sponsible or liable in any way for the.acts of the other stock-
holders of the company. In the purchase and control of his
stock each acts entirely for himself and not as trustee for the
others. Where, however, a majority of the stockholders, act-
ing in bad faith, carry into effect a scheme which even if
lawful on its face, is intended to defraud the minority of
their rights, the courts will interfere. Flynn v. Ry., 158 N.
Y. 493, 507 (1899); Farmers Loan & Trust Co. v. Ry., 150

N. Y. 410 (1896). (See § 97.)

§ 96. Relations of Stockholders to the State.

The New York courts, while recognizing the time-honor-
ed doctrine that a corporation is an entity apart from its stock-
holders, nevertheless face the fact squarely that the abstract
idea of a corporation, the legal entity, is itself a fiction and
that the state gives the charter “not to the ‘almost nebulous
fiction of our thought,’ but to the corporators, the acting and
104 NEW YORK CORPORATIONS.

living men * * * to redound to their benefit and add
energy to their capital.” People v. N. R. S. R. Co., 121 N. Y.
582, 622 (1890). Therefore when the acts of the stock-
holders as a body are illegal, “though the proceeding by infor-
mation be against the corporate body, it is the acts or omis-
sions of the individual corporators that are the subject of the
judgment of the court” in such a case. People ex rel. Bishop
v. K. & M. T. Ry Co., 23 Wend. 193, 205 (1840).*

§ 97. Powers of the Majority.

Unless a greater proportion is required by statute, a ma-
jority of the stockholders, when acting within the chartered
powers of the corporation, may bind the minority. They may
not, however, so exercise their powers as to oppress the mi-
nority or defraud them, and if they attempt to do so the courts
will interfere, at the suit of a minority stockholder. Farmers
Loan & Trust Co. v. Ry., 150 N. Y. 410 (1896). To warrant
stich interposition, ‘a case must be made out which plainly
shows that such action is so far opposed to the true interests
of the corporation itself as to lead to the clear inference that
no one thus acting could have been influenced by any honest
desire to secure such interests, but that he must have acted
with an intent to subserve some outside purpose, regardless
of the consequences to the company, and in a manner incon-
sistent with its interests.” Gamble v. Water Co., 123 N. Y.
91, 99 (1890).

Where, as is usually the case, the management of corpor-
ate affairs is entrusted to the board of directors and these have
the usual powers, their control is exclusive and not even a
majority of the Stockholders can override them. McCullough
v. Moss, 5 Denio 575 (1846). They cannot be removed, ex-
cept for improper use of their power; they need not obey the
instructions of the stockholders and the only remedy in event
of dissatisfaction is to await the next annual meeting and
elect new directors. If desired, however, the powers and

*This case contains a carefully considered discussion of this subject and a clear
presentation of the law as it stands in New York.
STOCKHOLDERS. T05

tenure of office of the directors may be abridged or modified
by proper charter or by-law provision. This, however, is but
seldom done. (See § 26.)

§ 98. Voting Trusts.

The statutes provide that any stockholder may, by writ-
ten agreement, transfer his stock to one or more persons for
the purpose of giving such person or persons the power to
vote thereon, upon stated terms and conditions, for a period
not exceeding five years. A duplicate of any such voting trust
agreement must be filed in the principal office of the corpora-
tion and remain open to inspection of stockholders during
business hours, and any other stockholder may execute a like
agreement and transfer his stock to the same person or per-
sons and thereupon participate in all the terms, conditions and
privileges of the voting trust.

The stock participating in any such voting trust agree-
ment must be actually transferred to the trustees and be sur-
rendered by them to the corporation for cancellation, the new
certificates issued to the trustees stating the fact that such cer-
tificates are issued pursuant to the trust agreement. The entries
on the books of the corporation must also note the same fact.
The trustees are then empowered to vote the stock transferred
to them to such extent—and so far only—as they are author-
ized thereto by the terms of the agreement. (G.C. L., § 25.)
The trustees may collect the dividends on the stock held by
them under the trust agreement, but must account for such
dividends to the equitable owners.

The voting trust is usually employed to maintain a certain
management or policy for a definite period. It may be made
an efficient mode for the protection of minority interests by
securing an administration for a term of years satisfactory to
all parties concerned. (See Form 109.)
CHAPTER X.
STOCKHOLDERS’ MEETINGS.

§ 99. General.

The corporate acts of stockholders may be performed
only in duly assembled stockholders’ meetings. Some varia-
tion of this general rule is found in the provisions of the New
York statutes permitting various corporate acts to be taken
by unanimous written consent of the stockholders without a
meeting, as for example, to increase capital stock, change
the location of the principal office, etc. This is, however, by
express statutory permission and does not apply to corporate
acts not expressly included.

§ 100. Place,

“A corporation being the mere creation of local law, can
have no legal existence beyond the limits of the sovereignty
where created” (Paul v. Va., 8 Wall. 168 [1868]), hence
stockholders cannot perform a corporate act, binding upon
those who do not participate in it, outside the jurisdiction
creating the corporation, except by express statutory permis-
sion (Ormsby v. Mining Co., 56 N. Y. 623 [1874]), or by
consent of all the stock. Stockholders’ meetings outside the
state are not provided for by the New York statutes, and
such meetings must, therefore, be held within the state
unless all the stock consents to or participates in the meeting
elsewhere. In such case, the stockholders, all being partici-
pants, or agreeing to the place of meeting, are estopped
to deny the validity of acts done at the meeting so held.
Handley v. Stutz, 139 U. S. 417 (1890); Morawetz Private
Corp., § 488.

106
STOCKHOLDERS’ MEETINGS. 107

Within the state, the place of meeting should be designat-
ed by the by-laws. The place for holding the annual meeting
must be so designated. (S.-C. L., § 25.) Special elections ot
directors must be held at the principal office. (G.C.L., § 30.)
This, too, is the usual place for meetings of stockholders.
Meetings cannot be held at an unreasonably inconvenient time
or place.

§ tor. Notice.

It is to be noted that there is a distinction, frequently
overlooked, between the call for a meeting and the notice
thereof. Regular meetings being directed by the by-laws, re-
quire no other call or authorization, but usually require notice.
Special meetings, however, require both call and notice. They
must be called in the manner prescribed by charter or by-laws,
as, for instance, by the president, by action of the board, by
written call of a certain number of the directors, or a certain
percentage of the stock, etc. (See Forms 27, 40.) The
notice then follows this call and is merely a formal, pre-
scribed announcement of the meeting authorized by the call.
(See Form 41.)

Unless the statutes provide to the contrary, due notice
must be given to every stockholder of all stockholders’ meet-
ings. Such notice should give the time and place of meeting,
and for special meetings, at least, the business to be transacted
thereat. Notice of meetings may be waived by unanimous
consent of the stockholders.

Usually the by-laws prescribe the notice to be given of
stockholders’ meetings. In New York, however, the statutes
provide the notice to be given for certain specified meetings
and this required notice cannot be set aside by the by-laws,
though additional requirements, not inconsistent with the
statutes, may be provided if desired. (G.C.L., § 11.)

The statutory requirements as to notice are as follows:

(a) Waiver of Notice. “Whenever * * * a cor-
poration is authorized to take any action after notice to its
108 NEW YORK CORPORATIONS.

members or after the lapse of a prescribed period of time,
such action may be taken without notice and without the
lapse of any period of time, if such action be authorized or
approved, and such requirements be waived in writing by
every member of such corporation or by his attorney there-
unto authorized.” (G. C. L., § 42.) (See Form 27.)

(b) Notice of Annual Meeting. Notice of annual
meeting must be given by:

(1) Publication of notice for at least once a week for
two successive weeks immediately preceding such election in
a newspaper published in the county where such election is to
be held.

(2) Such other notice as the by-laws prescribe. (S. C.
L., § 25.)

No penalty is prescribed for failure to publish the re-
quired notice of the annual meeting. The larger corpora-
tions, however, usually comply with the statute requirements.
Small corporations frequently omit publication. This may be
done safely only where there is complete unanimity on the
part of the stockholders. If publication is not made, great
care should be taken to see that each stockholder is duly noti-
fied in accordance with the requirements of the by-laws. (See
Forms 42-45.)

(c) Notice Same as for Annual Meeting. Meetings
for the following purposes require the same notice as annual
meeting: :
(1) To mortgage corporate property. (S.C. L., §6.)

(2) To sell the entire property to another corporation.
(5, G, Lay 816) @

(3) To create preferred stock. (S.C. L., § 61.)

(4) To extend corporate existence. (G.C. L., § 37.)

(5) Special meetings to elect directors (S.C. L., § 25;
G. C. L., § 29), except when called by stockholders on failure
of directors soto do. (See next subdivision (d) ; also § 112.)

(d) Stockholders’ Notice of Special Election of Direc-
tors. If directors are not elected at the annual meeting or at
STOCKHOLDERS MEETINGS. I0Q

a special meeting called by the directors, within one month
thereafter (See § 112), any member may call an election on
notice as required for the annual meeting, together with:

(1) Personal service of notice on each stockholder two
weeks before the meeting, or,

(2) Service by mail directed to each stockholder at his
last known post-office address two weeks before the meeting.
(G. C. L., § 29.) (See Form 92.)

(e) Notice of Meeting for Increase or Decrease of
Capital Stock. For meetings to increase or decrease capital
stock, notice must be signed by the president or vice-president
and the secretary stating the time, place, and object of the
meeting and the amount of the increase or reduction proposed,
and a copy of such notice must be:

(1) Published once a week for at least two successive
weeks in a newspaper in the county where the principal busi-
ness office is located, if any is published therein.

(2) Be mailed to each stockholder at his last known
post-office address at least two weeks before the meeting, or
be personally served upon him at least five days before the
meeting. (S.C. L., § 63.) (See § 86; also Forms 84, 85.)

(£) Notice of Meeting to Change Number of Directors.
Two weeks’ written notice served personally or by mail. (S.
C. L., § 26.)

(g) Notice of Meeting to Alter or Extend Business.
Same as for increase of stock. (S.C. L., 8§ 18, 63.)

(h) Notice of Meeting for Dissolution. The follow-
ing requirements must be observed for notification of meeting
for dissolution:

(1) Publication of notice must be made in one or more
newspapers published and circulating in the county of the
principal office, at least once a week for three successive weeks
next preceding the meeting.

(2) On or before the first day of publication, a copy
miust be served personally on each stockholder or mailed to
his last known post-office address.
110 NEW YORK CORPORATIONS.

(3) Any adjournment of such meeting must be pub-
lished in papers in which original call appeared. (G. C. L,
§ 221.) (See § 56.)

(i) Notice of Meeting to Guarantee Bonds of Another
Corporation. Notice of such meeting must be signed by a
majority of the directors and served personally or by mail on
each stockholder at least sixty days before the meeting. (S.
C.L,§ 8) (See § 68.)

(j) Notice of Meeting When Not Otherwise Provided.
Where no special provision is made by statute, charter or
by-laws as to notice of a meeting, such meeting must be noti-
fied in the same manner as is the annual meeting. (G.C. L,,

§ 43.)

§ 102. Quorum.

The by-laws should fix the amount of stock which must
be represented in order to constitute a quorum. (G. C. L,
§ 11, subdiv. 5.) This may be any desired amount except at
the meeting for election of directors. At such meeting the
statute expressly provides that ‘“‘a plurality of the votes at
such election” shall be sufficient to elect. Under this pro-
vision, any number present at a duly called meeting for elec-
tion of directors, no matter whether they constitute a majority
of the stock or a by-law quorum, or not, may act, and a
plurality of those voting elect. (S.C. L, § 25;G CL,
§§ 29, 30.) Matter of Rapid Transit Ferry Co., 15 App.
Div. 530 (1897).

At general meetings, unless the charter or by-laws provide
for a quorum, the common law rule prevails and the share-
holders who actually assemble at any properly convened meet-
ing, without regard to their number, constitute a quorum for
the transaction of business, and a majority of such quorum
can act. Morawetz Private Corp., § 476; Field v. Field, 9
Wend. 395 (1832).
STOCKHOLDERS’ MEETINGS. II!

§ 103. Right to Vote.

Every stockholder is entitled to one vote at stockholders’
meetings for every share of stock standing in his name on the
books of the corporation. Only stockholders of record may
vote at stockholders’ meetings unless otherwise provided in the
charter: (G. C. L, § e3yS)C. Ly § ee) (See $ gia)

The stockholders, by by-laws adopted at any annual meet-
ing or at a special meeting, duly called for the purpose, may
prescribe a period of not over forty days, prior to stock-
holders’ meetings, during which no transfer of stock may be
made on the corporate books. (G. C. L., § 23.) The result
of this provision is that, while transfers may still be made
between the date of the closing of the books and the holding
of the meeting, such transfers are not entered on the corpor-
ate records until after the election, and do not carry with
them the right to vote at the approaching meeting nor divest
the stockholder of record of his right to appear and vote
thereat. (See § 105.) Where stock is pledged as collateral
security the pledgee must issue a proxy to the pledgeor (G. C.
L., § 23), for the latter remains the real stockholder with full
liabilities. (S.C. L., § 58.)

“A stockholder has a legal right to vote upon a measure
at a meeting of stockholders, even though he has a personal
interest therein separate from other stockholders. In such a
meeting each shareholder represents himself and his interests
solely and he, in no sense, acts as trustee or representative of
others.” Gamble v. Water Co., 123 N. Y. 91, 97 (1896);
Colonizer’s Realty Co. of Brooklyn v. Shatzkin, 129 App. Div.
609 (1908). <A corporation which holds stock may legally
vote upon it through its duly authorized representatives. Oel-
bermann v. Railway, 77 Hun 332 (1894).

Since the right to vote depends upon the corporate records,
it is important that they be easily accessible at the time of the
election. Any stockholder may demand their production at
any meeting. (G. C. L., § 23.) It is a common practice
II2 NEW YORK CORPORATIONS.

where the number of shareholders is large to prepare an alpha-
betical list for ready reference showing the number of shares
owned by each. In the event of challenge, however, the cor-
porate records and not the secretary’s list, must be appealed to
and are conclusive of the right to vote so far as the corporation
is concerned. (See § 109.)

It was formerly held that under section 23 of the Gene-
ral Corporation Law, any desired limitations of the voting
right might, by due charter provision, be imposed upon any
class or classes of stock, or the right to vote might be with-
held entirely. Now, however, acting under an opinion of the
Attorney General, holding that limitations of the voting right
are not authorized by statute (Matter of Oak Knitting Co., re-
port of Atty. Gen’l, 1908; also Matter of Second United Cities
Co., report of Atty. Gen’l, 1907), and confirming decisions
in the lower courts (People ex rel. Royal Securities Co., 1908
[not yet reported]), the Secretary of State refuses to file char-
ters containing limitations of any kind upon the voting right of
any class or classes of stock. A careful reading of the law
bearing on this subject does not seem to justify the Attorney
General’s construction, and the matter cannot be regarded as
finally settled until it has been passed upon by the higher
courts.

§ 104. Proxies.

Any member of a corporation, other than a religious cor-
poration, may vote on all or any number of shares of his stock
by proxy. (G. CG L., §§ 23, 26.) As the right is not a com-
mon law right, but depends entirely upon statute (People v.
Twaddell, 18 Hun 427, 430 [1879] ), the terms of the law must
be complied with strictly. In re Barker, 6 Wend. 509 (1831).
The proxy must be in writing and be executed by the stock-
holder or his duly authorized attorney. (See Forms 26, 36-
38.) It expires at the end of eleven months unless otherwise
expressly provided in the instrument. The usual proxy is re-
STOCKHOLDERS’ MEETINGS. II3

vocable at will (G. C. L., § 26), and even a proxy coupled with
an interest and, in terms, irrevocable, has been held invalid
under the statutory provisions forbidding issuance of a proxy
for money or anything of value. (G. C. L., § 23.) Matter
of Germicide Co., 65 Hun 606 (1892). The sale of proxies is
a misdemeanor. (Pen. Law, § 668.) <A person need not be a
stockholder to act as proxy. (G.C. L., § 3.) _ In re Light-
hall Mfg. Co., 47 Hun 258 (1888). The right to substitute
another in his stead may be given to the holder of a proxy by
express provision in the instrument.

Election inspectors have no power to determine the genu-
ineness of proxies. Their duties are entirely ministerial and
if the proxies are regular upon their face they must receive
them. In re Cecil, 36 How. Prac. 477 (1869). (See § 109.)

Any inspector of election or other officer presiding at an
election of directors, or any member present, may require the
person presenting a proxy to swear that he has not, either di-
rectly, indirectly or impliedly, given any promise or any sum
of money or anything of value to obtain such proxy, and that
he has not received any promise or any sum of money, or any-
thing of value to influence his vote, or as a consideration there-
for. (See Form 91.) All proxies, together with any oaths
taken as above, must be filed in the records of the corporation.
(G, GL, § 27.)

The use of proxies has become so common that in the
larger corporations a blank form—on occasion, with the name
of the party to act printed in—is usually sent to each stock-
holder with the notice of the annual meeting. (See Forms
26, 36-38.)

§ 105. Closing Stock Books.

The stockholders may provide in the by-laws that the stock
book shall be closed and no transfers registered for a period
not exceeding forty days prior to stockholders’ meetings. (G.
C.L., § 23.) Under this provision the books are usually closed
114 NEW YORK CORPORATIONS.

from ten to forty days before the annual meeting. No form-
ality is required in closing the books and no entry of closing
is made therein. After the date fixed upon, the transfer agent
simply refuses, for the prescribed period, to register transfers.
The stockholders of record then vote at the meeting regardless
of any changes of stock ownership after the books were closed.
The object of closing the books is to avoid the complications as
to notice of meeting, etc., that might otherwise arise, and also
to give the secretary time to prepare a correct list of share-
holders for use at the meeting. (See §§ 103, 136.)

§ 106. Election of Directors.

The directors are elected at the annual meeting or at a
special meeting called for the purpose. Such meetings are
peculiar in that the number of stockholders present—without
regard to the amount of stock represented, or any by-law
regulations—constitute a quorum for the election of directors
and a plurality of them may act. (S.C. L, § 25.) (See
§ 102.) Notice of meetings for election of directors is pre-
scribed by statute. (S.C. L., § 25.) (See § 1orb, c, d.)
Voting at the election of directors is usually by ballot.

§ 107. Cumulative Voting.

The certificate of incorporation may provide that each
stockholder shall be entitled to as many votes as he has shares
of stock, multiplied by the number of directors to be elected,
and that he may cast all of such votes for a single director or
distribute them among two or more as he sees fit. (G. C. L,,
§ 24.) This system of voting, known as cumulative voting, is
a most effective method of protecting minority interests, en-
abling such interests to secure representation on the board of
directors. For instance, under the usual plan of voting if one
hundred shares of stock participate in an election of a board of
five directors, a stockholder owning twenty shares will, in the
face of opposition, have no possible chance of electing a di-
STOCKHOLDERS’ MEETINGS. II5

rector to represent his interests. He may cast twenty votes for
each member, which, as against the eighty votes opposed, are
entirely ineffective. If, however, the cumulative method pre-
vails, instead of dividing his votes among the five candidates,
he may cast his cumulated votes—which number one hundred
—for his own candidate, and by no possible combination among
the owners of the other eighty shares could this candidate be
defeated.

§ 108. Inspectors of Election.

The election of directors must be conducted by two or
more inspectors (in re Lighthall Mfg. Co., 47 Hun 258
[1888]), who need not necessarily be stockholders. For the
election of directors at the first annual meeting and for any
preceding stockholders’ elections to fill vacancies among the
directors, the inspectors are appointed by the board of di-
rectors named in the charter. Inspectors at subsequent elec-
tions are appointed as prescribed in the by-laws. If any in-
spector refuses to serve, or neglects to attend the election, or
if his office becomes vacant, the meeting may appoint a sub-
stitute, unless the by-laws otherwise provide. Inspectors may
themselves be candidates for office. Ex parte Willcox, 7 Cow.
412. Officers and directors, except of moneyed corporations,
are eligible to appointment as inspectors. (S.C. L., § 31.)

Inspectors must, before entering on the discharge of their
duties, take and subscribe an oath to faithfully perform their
duties with strict impartiality and according to the best of their
ability. Violation of this oath is punishable as a misdemeanor.
(Pen. Law, § 668.) The oath must be filed with a certificate
of the result of the election, in the office of the clerk of the
county where the election was held. (S.C. L., § 31.) (See
Forms 46-48.) Filing fee, 6 cents. There is no penalty for
failure to file this certificate and it is frequently neglected in
practice.

It has been held that the provision as to filing the oath
is directory only and that failure to comply will not invalidate
116 NEW YORK CORPORATIONS.

the election. Bank v. Scott, 53 App. Div. 65, 72 (1900).
Nor will an election be set aside on the ground that the
inspectors were not sworn in the form prescribed by statute.
Matter of the Election of Directors of the Chenango Ins. Co.,
19 Wend. 635 (1839). The best practice, however, conforms
strictly to the requirements of the statutes, both as to the
form of oath and the filing of oath and report.

In the discharge of their duties, inspectors act in a purely
ministerial capacity. Their business is to see that the election
is conducted in a regular manner by persons with an apparent
right to vote. Matter of Cecil, 36 How. Pr. 477 (1869).

In practice, unless there is some question as to the rights
of those desiring to vote at the election, the duties of the in-
spectors are very simple. They are first sworn in due form
(see Form 46) and then take entire charge of the proceedings,
superintending the preparation and collection of ballots, count-
ing the votes when cast and announcing the results of the
election. They then prepare, subscribe and certify to their
report (see Forms 47, 48), and their duties are complete.

In the absence of objection the inspectors must receive
any vote offered unless obviously improper or fraudulent. If,
however, any vote is challenged, they must require that the
“books and papers containing the record of membership of
the corporation” be produced “and all persons who may ap-
pear from such books to be members of the corporation may
vote at such meeting.” (G. C. L., § 23.) (See § 109.)

§ 109. Challenges.

If illegal votes are offered at a corporate election, objec-
tion must be raised at the time or the right to question their
validity is lost. In re Election of Directors of Chenango Co.
Ins. Co., 19 Wend. 635, 637 (1839) ; Vandenburgh v. Ry. Co.,
29 Hun 348 (1883).

If the right to vote is challenged, the inspectors must
demand the corporate books, and, if they can be had, determine
STOCKHOLDERS’ MEETINGS. 117

therefrom the rights of the member. They are not allowed to
go behind the records to decide his rights. (G. C. L., § 23.)
Ex parte L. I. Ry., 19 Wend. 37 (1839); Matter of Mutual
Fire Ins. Co., 51 App. Div. 163 (1900). (For powers of
court in similar cases, see Strong v. Smith, 15 Hun 222
[1878], Affd. 80 N. Y. 637 [1880].)

The sale of votes is illegal and a misdemeanor. (Pen.
Law, § 668.) Any stockholder suspected of having promised
his vote for a consideration may be challenged by an election
inspector, by the presiding officer or by any member present
and compelled to swear that he has not, either directly, indi-
rectly or impliedly, received any promise or any sum of money
or anything of value to influence his vote or as a consideration
therefor. This oath may be administered by the election in-
spector or by the presiding officer. (G. C. L., § 27.) (For
oath of stockholder, Form go.)

§ 110. Contested Elections.

Proceedings to contest an election may be by quo war-
ranto (Code Civil Pro., § 1948 et seq.), or by summary action
of the Supreme Court on application thereto. (G.C.L., § 32.)
(See Form 94.) These two methods exclude all others. Ry.
Co. v. Kay, 14 Abb. Pr. (N. S.) tor (1873).

If the election has been conducted in good faith and the
wishes of the stockholders fairly expressed, no mere infor-
mality will vitiate it. Philips v. Wickham, 1 Paige 590, 600
(1829) ; Matter of Election of Directors of the Chenango Co.
Ins. Co., supra.

If a candidate receives a majority of the legal votes, the
fact that illegal votes were cast will not defeat the election.
In re Argus Co., 138 N. Y. 557 (1893). Where, however,
votes have been erroneously received or rejected, which would
have changed the result of the election, the court must de-
clare the election void and a new one must be held. People
ex rel. Putzel v. Simonson, 61 Hun 338 (1891). Only per-
118 NEW YORK CORPORATIONS.

sons whose rights have been violated may complain of the
illegality of the election. Matter of Syracuse C. & N. Y. Ry.,
gi N. Y. 1 (1883).

§ 111. Effect of Failure to Elect Directors,

“Tf the directors shall not be elected on the day desig-
nated in the by-laws or by law, the corporation shall not for
that reason be dissolved; but every director shall continue to
hold his office and discharge his duties until his successor has
been elected.” (G.C. L., § 28.) Many of the smaller New
York corporations take advantage of this provision, and, by
allowing the old board to hold over and to fill vacancies by
vote of its own members, escape the statutory requirements
as to inspectors and publication of notice. As long as there
is no formal protest by a stockholder, there is no objection
to this practice. In one case an omission to elect directors for
eight years was upheld. Geneva Mineral Springs Co. v. Cour-
sey, 45 App. Div. 268, 275 (1899); Phila. ete. Co. v.
Hotchkiss, 82 N. Y. 471, 474 (1880) ; Beardsley v. Johnson,
121 N. Y. 224 (1890). The powers of directors who hold
over on account of a failure to elect their successors are the
same in every respect as if their term of office had not expired.
As to the powers of a stockholder in such a case, see People ex
rel. Walker v. Albany Hospital, 11 Abb. Pr. (N.S.) 4 (1871).

§ 112. Special Elections.

The statutes provide that the directors shall forthwith
call a special meeting for the election of directors when for
any reason they have not been chosen on the day fixed for
the regular election. Notice for this meeting is the same as
for the annual meeting. (G.C.L., § 29.)

If the directors do not call such meeting within one
month of the date on which the annual meeting should have
been held, or if such meeting results in a failure to elect, any
stockholder may call a meeting for the purpose of electing
-directors. (Id.) (See § ro1d; also Form 92.)
STOCKHOLDERS’ MEETINGS. IIQ

“Such meeting shall be held at the office of the corporation,
or if it has none, at the place in this state where its principal
business has been transacted, or if access to such office or place
is denied or cannot be had, at some other place in the city, vil-
lage or town where such office or place is or was located.”
(G.C. L., § 30.)

At such meeting the members attending shall constitute
a quorum and any business which might have been passed
upon at the annual meeting may be transacted. (Id.)

If the corporate records are not accessible, each member
offering to vote must be sworn to the effect that he is bona fide
a member and his oath must also state the number of shares
standing in his name. (See Form 93.) All such affidavits
must be attached to the return of the inspectors for filing with
the county clerk. (G.C. L., § 31.)

Special meetings of the stockholders to fill vacancies on
the board, when such vacancies are to be filled by the stock-
holders, may be called at any time as is any other special meet-
ing, except that notice thereof must be the same as for the an-
nual meeting. (S.C. L., § 25.) (See § 1o1b.)
CHAPTER XI:
DIRECTORS.

§ 113. Number.

The number of directors must not be less than three. No
maximum limit is prescribed. The number of directors and
the names of those who are to serve for the first year are set
forth in and fixed by the charter. (B.C.L.,§2.) The num-
ber may be changed by charter amendment. (See §§ 72,
torf.) If the number is increased, the board itself elects the
additional members to hold for the balance of the year and
until their successors are elected, and if the board is classified
(See § 115), with terms expiring at different times, the new
directors must be apportioned among these classes so as to
preserve as nearly as possible the same relative proportions.
(S. CL, $26.)

§ 114. Election.

Directors are elected at the annual meeting, or in event
of failure of that meeting, at a special meeting called for the
purpose. They hold office until their successors are elected.
(See §§ 106-112.)

§ 115. Classification.

“At least one-fourth in number of the directors of every

stock corporation shall be elected annually.” (S.C. L., § 25.)

Under this provision, the board of directors may be di-

vided into two, three or even four classes, if the number of

directors is such as to permit; each consisting of not less than

one-fourth the whole number of directors and one of these
120
DIRECTORS. I21I

classes to be elected each year. Such classification is common
in practice, and is designed to prevent the sudden changes of
policy that might result if the entire board were elected each
year.

§ 116. Vacancies.

Vacancies occurring in the board are to be filled as pre-
scribed in the by-laws. (S.C. L., § 25.) Usually the board
is empowered to fill such vacancies, but unless the by-laws so
prescribe, or the power is given the board by charter provi-
sion, the directors cannot act in the matter and vacancies must
be filled by the stockholders.

This may be done at a special stockholders’ meeting for
election of directors (see § 112), or if the directors remaining
are sufficient to constitute a quorum and to comply with the
statutory requirement that the number of directors must not
be less than three, the vacancies may be left unfilled until the
next annual meeting.

Vacancies created through an increase in the number of
directors must be filled by vote of the majority of the directors
in office at the time of the increase. (See § 113.)

§ 117. Qualifications of Directors.

Every director must be a stockholder unless otherwise pro-
vided in the charter or by-laws. (S.C. L., § 25.) Policy
holders of an insurance company are eligible to election as di-
rectors of the company, “whether or not they be stockholders.”
(Id.) At least one director must be a resident of the state.
(G. C. L., § 34.) People ex rel. Gales v. McDonough, 28
Misc. 652 (1899). (For first directors, see § 24.)

If possessed of these statutory qualifications, any one cap-
able of acting as an agent of the company may serve as a direc-
tor. Married women and aliens may act, and, generally, any
one who may act as an agent.
122 NEW YORK CORPORATIONS.

§ 118. Compensation of Directors.

In the absence of express agreement, the directors are
not entitled to compensation for their services as such. This
is an application of the general rule of trusts. Mather v. E.
M. Co., 118 N. Y. 629, 632 (1890). Even where a director
performs services outside those ordinarily performed, the
tendency of the courts is to hold that, in the absence of express
agreement, they must be treated as undertaken through zeal
for the company’s welfare rather than through expectation of
reward. Stout v. Security Co., 82 App. Div. 129 (1903).
See also Bagley v. Ry., 165 N. Y. 179 (1900).

Directors are not debarred from becoming employees of
the company, and, as such, they are entitled to reasonable com-
pensation. But as in fixing it they are in the position of
trustees dealing with themselves in respect to their trusts,
their action is subject to question by the stockholders and re-
view by the court. Fitchett v. Murphy, 46 App. Div. 181,
185 (1899). Where directors for the first year hold over
because of their neglect or refusal to adopt the by-laws re-
quired to enable the stockholders to hold the annual election
for directors, all their acts while so holding over, done for or
in the name of the corporation designed to charge upon it any
liability or obligation for the services of any such director,
or any officer or attorney or counsel appointed by them, is held
fraudulent and void. (S.C. L., § 27.)

§ 119. Powers of Directors.

The general management of the corporate business is in
the hands of the directors. (G.C.L.,§ 34.) Speaking gene-
rally, the shareholders cannot act for the corporation, either
individually or collectively, and have no power, unless given
by statute, to interfere with the directors in the conduct of
corporate business. Conro v. Iron Co., 12 Barb. 27, 63
(1851). The powers of the directors may, however, be limit-
ed in any particular which does not exempt them from any
DIRECTORS. 123

legal obligation or duty, by suitable provision in the articles
of incorporation (G. C. L., § 10) or later by by-law provisions.
(G.C.L., § 11.) Within such limits, and in the management
of the ordinary and regular business of the corporation, the
board of directors is supreme. Hoyt v. Thompson, 19 N. Y.
207, 216 (1859). They are not amenable to motions or reso-
lutions of the stockholders, or to removal, unless so provided
in the certificate of incorporation. Directors have no right to
remove fellow directors. Raub v. Gerken, 127 App. Div. 42.

The powers of the directors, though broad, do not ex-
tend to matters involving a fundamental change in business
or in the constitution of the company, even though within the
charter powers, unless such power is expressly given by stat-
ute, charter or by-laws. Ry. Co. v. Allerton, 85 U. S. 233
(1873).

The directors may act only as a board and when regu-
larly assembled at a board meeting. Neither individually nor
collectively are they agents of the corporation, unless duly
assembled as its executive board. Where, however, they are
required by statute to sign a notice of meeting, a certificate,
or to do any other purely ministerial act, no meeting is neces-
sary. In such matters compliance with the letter of the statute,
which only requires the individual signatures or certification of
directors, is sufficient. Burden v. Burden, 159 N. Y. 287, 302
(1899). (G.C.L., § 43.)

The directors may make necessary by-laws not inconsis-
tent with those adopted by the stockholders. (G.C.L., § 34.)
(See Chap. IV, “By-Laws.”) (For powers as to dividends,
see § 88.)

A director has an absolute right to inspect corporate
books. People ex rel. Leach v. Central Fish Co., 117 App.

Div. 77 (1907).
§ 120. Powers of Directors in Case of Dissolution,

Upon dissolution, the directors become trustees for the
creditors and stockholders with full power to settle the cor-
124 NEW YORK CORPORATIONS.

porate affairs; collect and pay outstanding debts and divide
any surplus among those entitled thereto. They have power
to sue for the debts and property of the corporation as such
trustees and are jointly and severally liable for the corporate
assets which come into their hands. (G.C. L., § 35.)

§ 121. Relations of Directors to Corporation and Stock-
holders.

“There seems to be a mistaken notion in some minds that
the relation which exists between directors of a corporation,
and the corporation is that of principal and agent. This is not
true. Such relation is, and always was, as to the property of
the corporation, fiduciary in character, and while not strictly
that of trustee and cestut que trust, yet it partakes of such na-
ture. The agency of the directors rests solely in their dealings
with third persons, when they represent the corporation as its
agents; but in dealings with the corporation they act in a fiduci-
ary capacity for the shareholders, as it is to their care that the
shareholders, acting through the corporate entity, intrust the
control of its property and the management of its business.”
Mabon v. Miller, 81 App. Div. 10, 17 (1903), per Hatch, J.
The result of this doctrine is “that the utmost good faith” is
required in dealings between the directors and the company.

The New York courts enforce this rule with a vigor not
in accord with the weight of authority in the United States
at large. While the majority of courts hold that the corpora-
tion is bound by a contract with a director if entered into in
good faith, the settled doctrine in this state is that the court
“will not stop to inquire whether the contract or transaction
was fair or unfair. It prevents frauds by making them as far
as may be impossible * * * it weakens the temptation to
dishonesty or unfair dealing on the part of the trustees by
vitiating, without attempt at discrimination, all transactions in
which they assume the dual character of principal and represen-
tative.” ‘Munson v. Ry., 103 N. Y. 58, 74 (1886); also Car-
DIRECTORS. 125

penter v. Taylor, 164 N. Y. 171, 178 (1900). But see Ven-
noli v. 67th St. Atelier Building, 55 Misc. 222 (1907). It
makes no difference that only one director is party to the con-
tract and that all the other directors, some of whom were per-
sonally interested, voted for it.

Contracts of this nature are, however, binding on the
director at the option of the corporation. Veeder v. Horst-
mann, 85 App. Div. 154, 159 (1903). It follows, therefore,
that contracts between the corporation and a director are void-
able and not void. Barr v. Ry., 125 N. Y. 263, 275 (1891).
They may be annulled if desired by the corporation, but if
nothing is done in avoidance, the transaction remains.

Any action looking toward avoidance of such a contract
must be taken promptly after knowledge of the conditions.
“Tf knowledge and opportunity concur, * * * delay, if un-
reasonable, or attended by retention and enjoyment of the re-
sults of the transaction may be deemed equivalent to an adop-
tion and ratification of that which before was the subject for
action in repudiation of any obligation. The rule is not de-
signed to work injustice, but to protect those who repose confi-
dence in others holding toward them fiduciary positions and to
whose care have been confided the management and custody of
property and interests.” Id., per Gray, J. When the contract
is avoided by the corporation, this latter is liable for any bene-
fits received. Thomas v. Ry., 109 U. S. 522 (1883).

In some of the larger corporations contracts in which the
directors are interested are permitted and sanctioned by ex-
press by-law provision. Thus in the by-laws of the United
States Steel Corporation is found the following: “Inasmuch
as the directors of this Company are men of large and diversi-
fied business interests, and are likely to be connected with other
corporations with which from time to time this Company must
have business dealings, no contract or other transaction be-
tween this Company and any other corporation shall be affected
by the fact that directors of this Company are interested in,
126 NEW YORK CORPORATIONS.

or are directors or officers of, such other corporation, if, at the
meeting of the board, or of the committee of this Company,
making, authorizing or confirming such contract or transac-
tion, there shall be present a quorum of directors not so inter-
ested ; and any director individually may be a party to, or may
be interested in, any contract or transaction of this Company,
provided that such contract or transaction shall be approved
or be ratified by the affirmative vote of at least ten directors
not so interested.”

§ 122. Directors’ Liability for Negligence.

The directors are bound to exercise care and prudence in
the execution of their trust to the same degree as ordinarily
exercised by men of common prudence in their own affairs.
Hanna v. Peoples Bank, 35 Misc. 517, 521 (1901).* They
are therefore personally liable for and must make good every
loss arising from their failure to exercise such care or from
breaches of the by-laws.t Bowers v. Male, 186 N. Y. 28
(1906). The proper party to enforce this liability is the cor-
poration, but where, for any reason, it will not or cannot sue,
individual stockholders may bring suit. Brinckerhoff v. Bost-
wick, 88 N. Y. 52, 59 (1882).

It is well settled, however, that directors are not liable
for losses due to mere mistakes in judgment (Id.), nor for
theft or accidents not due to negligence on their part. Briggs
v. Spaulding, 141 U. S. 132 (1891).

§ 123. Statutory Liability of Directors.

The statutory liability of directors to the corporation and
stockholders is as follows:

(a) For making dividends except from surplus profits,
or for withdrawing or in any way paying to the stockholders
or any of them any part of the capital, or for reducing the

capital stock in any unauthorized way, the directors in whose

* For a full discussion of this rule, see Hun v. Cary, 82 N. Y. 65, 71 (1880).
+ For the extent of their liability, see Bloom v. Loan Co., 152 N. Y. 114, 121 (1897).
DIRECTORS. 127

administration it happened are jointly and severally liable to
the corporation and its creditors to the full amount of any
loss sustained (S. C. L., § 28), and are guilty of a misde-
meanor. (Pen. Law, § 664.) (See § 88.)

(b) Directors and officers making transfers of corporate
property to officers, directors or stockholders to avoid payment
of debts or in anticipation of insolvency with intent to prefer
or defraud creditors, are personally liable to stockholders and

creditors of the corporation for any loss occasioned thereby.
(ss (. Le, § 66.)

(c) Directors or officers signing any certificate or report
made or public notice given, which is false in any material
respect, are jointly and severally liable to any person who
has either directly or indirectly become a stockholder or cred-
itor upon the faith of such representation. The amount of
damage sustained is the measure of liability. Actions limited
to two years from date of the representation. (S. C. L.,
§ 35.) It is not necessary to show that the directors signing
knew that the report contained false statements. Huntington
v. Attrill, 118 N. Y. 365 (1890). If made with knowledge,
such act is a misdemeanor. (Pen. Law, § 665.)

A director is deemed to have knowledge of the corporate
affairs sufficient to enable him to determine whether any act,
proceeding or omission of the board to which he belongs, is
in violation of the provisions of the Penal Law relating to
directors, and, if in violation thereof, he must, if present, to
escape liability therefor, cause or make written request that
his dissent be entered on the minutes of the directors. If ab-
sent from the particular meeting, he will nevertheless be held
liable for any violations of the Penal Law occurring thereat,
appearing upon the minutes, if he remains a director for six
months thereafter, without causing his dissent to be entered
on the minutes within that period. (S.C. L., § 28; Pen. Law,
§ 667.)

(See next section, subdiv. b, for directors’ liability for
128 NEW YORK CORPORATIONS.

loans or discounts, etc., to stockholders. For general statutory
liability, see § 131. For penalty for failure to file reports, see
Chap. XVI, “Reports.’’)

§ 124. Directors’ Liability to Creditors.

Although the New York reports contain many decisions
and dicta to the effect that “the assets of the corporation are a
trust fund for the payment of creditors” (Cole v. Millerton
Iron Co., 133 N. Y. 164 [1892]), it is perhaps safe to say
that there is no decision holding directly that while the com-
pany is a going concern any trust relations exist between the
directors and creditors.

~ So long as the company is solvent, the creditors’ rights
against the directors are almost entirely statutory. These
statutes are penal and therefore strictly construed. Wiles v.
Suydam, 64 N. Y. 173, 177 (1876). The liabilities under the
statutes are as follows:

(a) For making illegal dividends directors are liable to
creditors. (S.C. L., § 28.) (See § 123, subdiv. a.)

(b) Directors and officers are jointly and severally per-
sonally liable for making loans to stockholders, for discounting
any note or other evidence of debt for stockholders, or for re-
ceiving the same for any payment, in whole or in part, due or
to become due on any stock in the corporation, or to enable
any stockholder to withdraw any part of the money paid in
by him on his stock. (S.C. L., § 29.) The directors and
officers involved shall “jointly and severally, be personally
liable to the extent of such loan and interest, for all the debts
of the corporation contracted before the repayment of the sum
loaned, and to the full amount of the notes or other evidences
of debt so received or discounted, with interest from the time
such liability accrued.” (Id.) Such unlawful action is also a
misdemeanor under the Penal Law, § 664. A.C. Nellis & Co.
v. Nellis, 62 Hun 63, 67 (1891).

(c) Creditors, who became such upon the faith of a
false representation made in any corporate certificate or report,
DIRECTORS. I29

can hold the directors who signed the same liable for any loss
occasioned thereby. Action must be brought within two years
after the false representation was made. (S.C. L., § 35.)
(See § 123, subdiv. c.)

Upon insolvency, creditors can enforce any liability which
a director has incurred through fraud or negligence in the
management of corporate affairs on the ground that it is an
equitable asset. Morawetz Private Corp., §§ 795, 796.

Directors who have transferred all the property of the
corporation without providing for the payment of an out-
standing judgment are personally liable to the creditor.
Darcy v. Brooklyn & N. Y. Ferry Co., 127 App. Div. 167
(1908).

(For directors’ liability as trustees on dissolution see
§ 120.)

§ 125. Directors’ Meetings.

Directors may act for the corporation only in duly as-
sembled meetings. Except for ministerial acts prescribed by
statute, such as signatures to certificates, etc., this rule is
invariable. Individual action may be authorized by the board,
or, if taken, may be subsequently ratified, but in all cases the
action must be by the board. (G. C. L., § 43.)

(a) Place. Meetings may be held at such place with-
in or without the state as the directors select, unless they are
restricted by charter or by-laws. (B.C. L., § 2.) In practice
charter restrictions are infrequent and the by-laws, while
usually fixing the place for directors’ meeting at some place
within the state—usually at the principal office—also com-
monly provide that meetings may be held at any time and
place by unanimous consent of the board.

(b) Notice. Notice for both regular and special meet-
ings should be provided for in the by-laws. The notice need
not contain a statement of the business to be transacted if
it is not unusual in character, unless such statement is required.
I30 NEW YORK CORPORATIONS.

by the by-laws. Where no particular purpose is specified
it is to be understood that it is called to consider any matters
pertaining to the conduct of the corporate affairs that may
come before it. In re Argus Co. v. Manning, 138 N. Y. 557,
578 (1893). Nevertheless as a matter of good practice it is
customary—particularly as to special meetings—to state in
the notice of meeting, any important business to be transacted
thereat. Notice of meeting may be waived by unanimous
written agreement, and is held to be waived for any meeting
without notice, if all are present. (G.C. L., § 43.)

(c) Quorum. “Unless otherwise provided, a majority
of the board of directors of a corporation at a meeting
duly assembled shall be necessary to constitute a quorum
for the transaction of business and the act of a majority of
the directors present at a meeting at which a quorum is pres-
ent shall be the act of the board of directors. The members
of a corporation may in by-laws fix the number of directors
necessary to constitute a quorum at a number less than a
majority of the board, but at least equal to one-third of its
number.” (G.C. L., § 34.)

(d) Voting. Directors are not allowed to vote by
proxy. Craig Med. Co. v. Bank, 59 Hun 561, 565 (1891).
Unlike stockholders they may not vote upon matters in which
they are personally interested. Copeland v. Mig. Co., 47
Hun 235 (1888).

§ 126. Standing Committees.

Although there is no express statutory authority therefor,
the delegation® of details of management to standing com-
mittees of directors is practiced and sanctioned in New York.
Olcott v. Tioga Ry. Co., 27 N. Y. 546, 557 (1863) ; Sheridan
El. Lt. Co. v. Bank, 127 N. Y. 517 (1891).

Such committees are held allowable under the general
statutory power of the corporation to appoint such officers and
-agents as its business shall require. (G.C. L., § 11.) They
DIRECTORS. I3!1

are also frequently created by charter provision under the
general clause permitting “any provision for the regulation
of the business and the conduct of the affairs of the corpo-
ration.” (G. C. L, § 10.)

In the absence of statutory provision, the composition,
powers and duties of the standing committees are usually
regulated by charter or by-law provision, though the whole
matter is sometimes left to the board, the by-laws merely
empowering them to act.
CHAPTER XII.
OFFICERS.

 

§ 127. The Corporate Officers.

“The directors of a stock corporation may appoint from
their number a president, and may appoint a secretary, treas-
urer, and other officers, agents and employees, who shall
respectively have such powers and perform such duties
in the management of the property and affairs of the corpora-
tion, subject to the control of the directors, as may be pre-
scribed by them or in the by-laws.” (S. C. L., § 30.)

The essential officers of a corporation are the president,
secretary and treasurer. These, though not specifically re-
quired by the statutes, are necessary to meet their general
requirements as to reports, signatures, etc. In addition to the
three officers mentioned, vice-presidents, assistant secretaries
and treasurers, the managing director or general manager,
the auditor and the counsel are usually classed as officers as
distinguished from agents and employees, and also from the
directors, who, while technically officers of the corporation,
are not usually so designated.

The same person may hold more than one office if the
duties of such offices are compatible. Novelty Co. v. Connell,
88 Hun 254, 25g (1895).*

§ 128. Qualifications.

The president must be a director. (S.C. L., § 30.) This
is a statutory declaration of a rule of convenience which would

obtain in the great majority of cases without its enactment.

* See also Manhattan Co. v. Kaldenberg, 165 N. Y. 1, 11 (1900), where one person held
the offices of president, secretary and treasurer.

132
OFFICERS. 133

As the presiding officer of the board of directors, it is im-
perative that he should be a member. He need not be a
stockholder if provision is made in the by-laws relieving di-
rectors from the necessity of holding stock. If, however, as
is usually the case, he is to preside over stockholders’ meetings,
he should also be a stockholder.

There are no special statutory qualifications for the other
officers. They may or may not be directors or stockholders.
If, however, the vice-president is to act in case of the absence

or disability of the president, he too should be a director.
(S.C. L., §30.)

§ 129. Security.

The directors may require officers to give security for the
faithful discharge of their duties. (S.C. L., § 30.) This is
usually confined to the bond required of the treasurer, but is
extended to other officials when conditions render such action
advisable.

§ 130. Powers.

The mere fact that certain persons are officers of a cor-
poration gives them no authority over the corporate business
or property. Cook on Corporations, § 716. Their powers
are derived entirely from enabling provisions in the charter
and by-laws and from resolutions of the board of directors.
Usually their powers are conferred and defined by the by-
laws. The directors, however, either by express resolution
or by acquiescence in a course of action, may clothe them
with power to act for the company in the performance of any
act within the charter powers not otherwise assigned by char-
ter or by-laws. Hall v. Ochs, 34 App. Div. 103 (1898).

Just how much authority the officers have in any particu-
lar matter is a question of fact to be determined in each case.
Hastings v. Ins. Co., 138 N. Y. 473, 479 (1893). It should
be borne in mind that, in the performance of their duties.
134 NEW YORK CORPORATIONS.

the officers are agents of the company. Their acts are there-
fore to be considered in the light of the well settled rules of
agency that an agent is invested with authority to do all acts
incidental to the proper discharge of his duties, and that third
persons are entitled to rely upon the apparent authority con-
ferred upon him by the principal. Lee v. Coal Co., 56 How.
Pr. 373 (1877).

The New York courts have recognized the practical ne-
cessity of following business usage and have applied the doc-
trine of “apparent authorization” even more broadly to the
acts of corporate officers than to those of ordinary agents.
The following extract from the opinion in Lee v. Pittsburgh
Coal Co., supra, p. 377, shows their attitude:

“It is very difficult, if not impossible, for those having
dealings with corporate bodies to determine, except from
circumstances and inference, what authority officers have.
* * * It often happens—so often as to be the rule rather
than the exception—that the chief officers of a corporation
exercise a very wide range of powers, virtually grasping the
entire direction and control of all its operations, with the tacit
consent and approval of the corporation. * * * Ought
not the same evidence, upon which prudent business men
ordinarily infer the existence of the authority, to be satisfac-
tory to courts and juries?”

It is the well settled rule in this state that if the president
or other general officer of a corporation makes a contract on
behalf of the company of a nature which the directors might
have authorized, or which they could ratify when made, au-
thority will be presumed and the burden rests upon the cor-
poration of showing the contrary. Hudson River Ry. Co. v.
Hanfield, 36 App. Div. 605, 507 (1897).*

Although it is possible to define and limit the authority
of officers in the by-laws, these are as to third persons, private

regulations, binding upon those who have knowledge of them,

*See also Oakes v. Water Co., 143 N. Y. 430 (1894); Pattesou v. Ongley Electric Co., 87
Hun 462, 464 (1895).
OFFICERS. 135

but ‘of no force as limitations per se as to third persons of an
authority, which, except for the by-law would be construed
as within the apparent scope of the agency.” Rathbun v.
Snow, 123 N. Y. 343, 349 (1890) ; Newman v. Lee, 87 App.
Div. 116, 118 (1903).

It is impossible to formulate any general rule as to what
acts are within the power of the various officers. Each case
presents a question of fact to be tested by the rules of specific,
implied and apparent authorization.

It may be stated broadly, however, that a corporate
official will be presumed to have any power claimed or exer-
cised by him, within the reasonable scope of the customary
duties of such officials, if such authority is not denied by the
corporation. This is the rule, notwithstanding the absence of
any real authority, or even the existence of provisions of the
by-laws or resolutions of the board to the direct contrary.
(See next section as to liability of officers for unauthorized
action. )

§ 131. Personal Liabilities of Officers.

(a) To the Corporation. Corporate officers, as agents
of the company, are subject to the general rule which imposes
upon an agent who exceeds his authority, liability for dam-
ages resulting to his principal. Holmes v. Willard, 125 N.
Y. 75, 80 (1890). They owe to the company the duty
of exercising ordinary business skill and prudence (Hun v.
Cary, 82 N. Y. 65 [1880]) and are liable for losses of cor-
porate funds or property due to their failure to exercise it.
Brinckerhoff v. Bostwick, 88 N. Y. 52 (1882).

They are liable for misappropriating corporate property
even though they own substantially all the stock. Saranac
Ry. v. Arnold, 167 N. Y. 368, 374 (1901). (Pen. Law,
§ 665.)

An officer who makes an individual profit in purchasing
corporate supplies through a firm of which he is a member
136 NEW YORK CORPORATIONS.

is liable to account for it to the corporation. Rickert v.
White, 54 Misc. 114 (1907).

(b) To Third Persons. It is well settled in New York
that corporate officers, in dealing with the world, impliedly
warrant that they have authority to do the acts which they
undertake. If, therefore, they exceed their authority, they
are liable for all damages resulting from their want of power.
Taylor v. Nostrand, 134 N. Y. 108, 110 (1892); Miller v.
Reynolds, 92 Hun 400 (1895).

Officers should be careful in signing corporate contracts
to use the form “The ........ Company by John Jones,
President.” Any signature which does not clearly show the
agency, may result in personal obligation. Bank v. Wallis,
150 N. Y. 455 (1896). (See Form 56.)

(c) Penal Statutory Liability. The liabilty of cor-
porate officers for the offenses indicated is as follows:

(1) Wilful neglect or refusal to make proper entry
in corporate books or to allow inspection of same: Fine
of not over $500, or imprisonment not over one year, or
both; also a penalty of $50 for each offense and liability
for all resulting damages to person injured. (S. C. L.,
§ 32; Pen. Law, §§ 665, 1937.)

(2) Signing certificate, report or public notice
false in any material respect: Fine, not over $500, or im-
prisonment not over one year, or both, and collateral lia-
bility for two years to those who became stockholders be-
cause of such false presentation. (S.C. L., § 35; Pen.
Law, §§ 665, 1937.)

(3) Fraudulent issue of stock: Fine of not over
$3,000, or imprisonment not exceeding seven years, or
both. (Pen. Law, § 662.)

(4) Participating in issue of stock beyond amount
authorized, or selling stock of which they are not the
actual owners: Fine, not over $5,000, or imprisonment
not less than six months, or both. (Pen. Law, § 664.)

(5) Transfer of corporate property in contempla-

tion of insolvency: Liability for all resulting loss. (S.
CL, } 66.)
OFFICERS. 137

(6) Appropriating corporate property, except in
payment of a just demand, without making true entry
on the records: Fine, not over $500, or imprisonment not
exceeding one year, or both. (Pen. Law, §§ 665, 1937.)

(7) Exhibiting false document to public officer:
Imprisonment in state prison not exceeding ten years.
(Pen. Law, § 661.)

(8) Making loans to stockholders, or taking their
notes in payment of stock subscriptions, or to enable them
to withdraw money paid in by them on subscriptions:
Liability for corporate debts contracted while loan is out-
standing, to amount of loan and interest and to the
amount of the notes with interest. (S.C. L., § 29.)

(9) Refusal or neglect to make report lawfully
required by a public officer: Fine of not over $500, or
imprisonment not exceeding one year, or both. (Pen.
Law, §§ 665, 1937.)

(10) Failure to give notice to officers and directors
of receipt of injunction notice: Fine of not over $500,
or imprisonment not exceeding one year, or both. (Pen.
Law, §§ 665, 1937.)

(11) Making, participating in, aiding, abetting,
advising or consenting to any corporate contribution for
any political purpose whatever, whether direct or in-
direct: Imprisonment in a penitentiary or county jail for
not more than one year and fine of not more than one
thousand dollars. (G.C.L., § 44.)

(12) Assists a corporation directly or indirectly
in the practice of law: Fine of not over $500, or impris-
onment not exceeding one year, or both. (Pen. Law,
§§ 280, 1937.) The corporation is subject to a fine of not
over $5,000. (Pen. Law, § 280.)

§ 132. Tenure of Office.

Officers hold their respective official positions only for

the term for which they were elected unless, as is usually the
case, provision is made in the charter or by-laws that they
hold office until the election of their successors. They may
be removed at any time, with or without cause, by the board
of directors. (S.C. L., § 30.)
138 NEW YORK CORPORATIONS.

An officer may terminate his relations with the company
by resignation. If made in absolute terms this will take effect
immediately and does not require acceptance on the part of
the corporation to render it effective. Wilson v. Hotel Co.,
16 Misc. 48 (1896); Manhattan Co. v. Kaldenberg, 165 N.
Y. I, 10 (1900).

§ 133. Compensation,

A person who is a director or stockholder as well as an
officer is not entitled to compensation for performing the
duties of his office unless he has made a contract to that effect
with the company. Farmers L. & T. Co. v. Ry., 152 N. Y.
251, 254 (1897). It is presumed that he is working for the
general welfare of the company and not in expectation of
receiving personal compensation. One who has no personal
interest in the company may, however, recover what his
services aS an officer were reasonably worth, even in the ab-
sence of a definite agreement. Smith v. Ry., 102 N. Y. 191,
194 (1886). (See § 118.)
CHAPTER XIII.
PRINCIPAL OFFICE. CORPORATE BOOKS.

§ 134. Location of Principal Office.

The certificate of incorporation must contain a statement
of the city, village or town in which the company’s principal
business office is to be located. If it is to be in the City of
New York, the borough must be designated. (B.C. L., § 2,
subdiv. 5.) No exact address is required. This lack of defi-
niteness, while a weak spot in the law, is occasionally very
convenient for the incorporators.

The principal office must be within the state and the
charter statement is conclusive evidence as to its location un-
til such location is changed by regular amendment. (See
§ 72.) Edison Elec. Lt. Co. v. Barker, gt Hun 594 (1895).
“Office” and “place of business” are used interchangeably in
the statutes, both meaning, the official domicile of the company
as fixed in the manner indicated. (G. C. L., § 3, subdiv. 9.)
Special elections of directors must be held in the principal
office or, if access to this is denied, at some other place with-
in the city, town or village of the principal office. (G. C. L.,
§ 30.) The corporate records must be kept in the princi-
pal office. (S.C. L., § 32.) Its location fixes the tax dis-
trict in which the personal property of the corporation is
assessed. (Tax Law, § 11.)

§ 135. Corporate Books.

Every business corporation must keep at its principal
office, books containing correct accounts of its business and
transactions, and a book to be known as the stock book. (S.

139
140 NEW YORK CORPORATIONS.

C.L., § 32.) The stock book is the only book thus specifically
prescribed. The needs of the corporation and business cus-
tom and convenience determine what others shall be kept.

*

§ 136. The Stock Book.

The stock book must contain the names of the stock-
holders arranged in alphabetical order showing their place of
residence, the number of shares of stock owned by each, the
time when they became the holders thereof and the amounts
paid thereon. (S.C. L., § 32.)

The stock book is thus the official record of the relations
existing between the corporation and its members. No trans-
fer of stock is valid as against the corporation, its creditors or
stockholders—except to render the transferee liable as a
stockholder—until such transfer is entered in the stock book
in a manner to show from and to whom the stock is trans-
ferred. It is made presumptive evidence of the facts it con-
tains in any action or proceeding against the corporation, its
officers or stockholders (S. C. L., § 32; Bank v. Scott, 53
App. Div. 65, 71 [1900]), and is conclusive evidence of the
right to vote at stockholders’ meetings. (G. C. L., § 23.)

A penalty is imposed upon the corporation for failure to
keep a stock book, or to keep it open for inspection as above
set forth, of $50 a day during the continuance of the refusal.
If any officer or agent of the corporation wilfully neglects or
refuses to make proper entries in the stock book, or to exhibit
the book and allow extracts to be made from it, in accordance
with the requirements already set forth, both the officer or
agent and the corporation are liable to the party injured to
the amount of $50 for each offense and also for any damages
resulting to him from such failure or refusal. (S.C. L., § 32;
Pen. Law, § 665.) (See § 131.) The adoption of a stock
book is the duty of the board of directors and they may at
any time adopt a new book if the old one is not available.
In re Argus Co., 138 N. Y. 557, 576 (1893); Socorro Mt.
Co. v. Preston, 17 Misc. 220 (1896). (See Forms 18, 19.)
PRINCIPAL OFFICE. CORPORATE BOOKS. 141

§$ 137. Right to Inspect Corporate Books.

The stock. book must be kept open at the principal office
of the company during at least three business hours daily for
the inspection of stockholders and judgment creditors, who
may make extracts therefrom. (S.C. L., § 32.) This is an
absolute statutory right and if refused nothing is left to the
discretion of the court but to issue a writ of mandamus upon
proper application being made therefor. Matter of Steinway,
159 N. Y. 250, 263 (1899) ; Lawshe v. Royal Baking Powder
Co., 54 Misc. 220 (1907).

It was long doubted whether this statute did not prevent
the Supreme Court from granting an order to examine any
other of the corporate books. The question was decided defi-
nitely by the Matter of Steinway, supra, p. 265, where it was
held that the common law right of a stockholder to inspect
the books of his corporation at a proper time and place and
for a proper purpose still exists, and that “the Supreme Court
has power, in its sound discretion upon good cause shown to
enforce the right.”

The broad language of the decision cited created a wide-
spread impression that a stockholder was entitled to examine
the books of the corporation for any purpose and to any
extent. Matter of Colwell, 76 App. Div. 615 (1902), per
O’Brien, J. The right is not, however, an absolute one.
Such relief will be granted only for some purpose necessary
for the stockholder’s protection. People ex rel. Mackey v.
Ins. Co., 31 Misc. 617 (1900). It is a drastic remedy “not
to be granted except in an emergency or for a necessary pur-
pose and should be limited by some regard to the interests of
the corporation and its other stockholders.” Matter of Col-
well, supra. If, therefore, the information required in any
particular case can be obtained in any other way, as for ex-
ample from a financial statement of the treasurer filed on
proper demand in accordance with the statutory requirements
The court will always consider the motive of the stock-
holder in any case where the remedy is discretionary. In re
Pierson, 44 App. Div. 215 (1899); People ex rel. McElwee
v. Produce Ex. Co., 53 App. Div. 93 (1900); Matter of
Coats, 73 App. Div. 178 (1902). The stockholder may em-
ploy another to make any authorized examination for him,
or to aid him in making it. People ex rel. Clason v. Ferry
Co., 86 Hun 128 (1895).

A director has an absolute right to inspect the corpo-
rate books. People ex rel. Leach v. Central Fish Co., 117

App. Div. 77 (1907).
CHAPTER XIV.
STATE TAXATION.

§ 138. Franchise Tax.

“For the privilege of doing business or exercising its
corporate franchises in this state, every corporation * * *
doing business in this state, shall pay to the state treasurer
annually, in advance, an annual tax to be computed upon
the basis of the amount of its capital stock, employed during
the preceding year within this state, and upon each dollar of
such amount. The measure of the amount of capital stock
employed in this state shall be such a portion of the issued
capital stock as the gross assets employed in any business
within this state bear to the gross assets wherever employed
in business.” (Tax Law, § 182.)

This tax is entirely different from the “Special Franchise
Tax” imposed upon corporations entitled to use the public
streets or other public places. It is imposed upon all corpora-
tions of every kind and is paid by corporations subject to
special franchise taxes, in addition to that tax.

The theory upon which the taxation of corporations for
state purposes has been adjusted is that the legislature has
the right to tax corporations for the privilege of doing busi-
ness in New York, aside from all property taxation. The
tax is therefore purely a statutory exaction and is in addition
to the usual property taxes which must also be paid by cor-
porations.

The franchise tax, when imposed on a domestic corpora-
tion, is a tax on its corporate franchises; when imposed on
a foreign corporation, it is a tax on its business,—a distinction
based on the fact that corporate franchises are taxable only

143
144 NEW YORK CORPORATIONS.

within the jurisdiction which creates them, and where alone
they can be said to have a situs. People v. Home Insurance
Co., 92 N. Y. 328, 340 (1883). Foreign corporations have
no absolute right to admission to the state, however, and the
legislature may therefore impose any condition upon granting
them the privilege that it sees fit. Pembina ‘Mining Co. v.
Pa., 125 U. S. 181 (1889); People ex rel. U. S. A. Co. v.
Knight, 174 N. Y. 475 (1903).

The tax is not a property tax, but is an operating tax,
based upon the business transacted by the company in the
state, as shown by the amount of capital employed here. This
is a distinction of great importance and easily overlooked.
The rate of the tax is graduated according to business pros-
perity evidenced by dividends declared.

“As dividends can be legally made only out of earnings
or profits and cannot be made out of capital, they are assumed
to approximate as nearly as practicable the just measure of
the tax which should be imposed upon the corporation for
the enjoyment of its franchise.”’ People v. Albany Insurance
Co., 92 N. Y. 458, 461 (1883).

§ 139. “Capital Stock Employed within the State.”

The franchise tax is imposed only on the capital stock
employed during the preceding year within the state. A
corporation organized in New York but operating and employ-
ing all its capital elsewhere would therefore pay no franchise
tax in this state.

“Capital stock” for franchise tax purposes means, not
share stock, bug the assets of the corporation contributed by
the stockholders. This does not include surplus which may
therefore be employed in the state without liability for fran-
chise tax. That is, the amount upon which the franchise tax
is calculated may not exceed the par value of the company’s
stock, any amount in excess not being liable. People ex rel.
U. M. C. Co. v. Roberts, 156 N. Y. 585 (1898) ; People ex rel.
Wiebusch v. Roberts, 154 N. Y. 101, 106 (1897).
STATE TAXATION. 145

§ 140. Deduction of Debts.

Since the franchise tax is based upon the actual value of
the capital employed in the state, allowance must be made for
corporate indebtedness. If all the corporation’s property and
business is within the state, its total indebtedness may be
deducted. People ex rel. J. B. Co. v. Roberts, 37 App. Div.
1 (1899). Where, however, only a portion of its capital is
employed in the state, only a proportionate amount of debts
may be subtracted from its assessed valuation. People ex
rel. Hyde & Sons v. Miller, 90 App. Div. 599 (1904); Affd.
179 N.Y. 564.

§ 141. United States Securities.

The fact that the franchise tax is not upon property but
upon business, the property values being used merely as a basis
for estimation, allows money invested in United States securi-
ties to be included in the capital taxable under § 182 of the
Tax Law, even though the securities themselves are exempt
from state taxation. Home Insurance Co. v. N. Y., 134 U.
S. 594 (1890). Hence, United States bonds owned by the
corporation may not be deducted in determining the amount
of capital for purposes of franchise taxation.

§ 142. Patents and Copyrights.

The same is true of patents and copyrights, which, though
not taxable themselves, are as a constituent part of the com-
pany’s assets, included in determining the value of its capital.
U. S. Aluminum Plate Co. v. Knight, 174 N. Y. 475 (1903).

§ 143. Good-Will.

The good-will of the corporate business is also included
as part of the capital employed in the state. It is naturally
very difficult to place a value upon anything so intangible as
good-will and no general rule can be laid down by which it can
be measured. It is not improper in estimating its value to
146 NEW YORK CORPORATIONS.

take the price paid for it as its true worth. People ex rel
Keochl & Co. v. Morgan, 96 App. Div. 110 (1904). As the
value of good-will depends directly upon net profits the most
common mode of determining its value is to multiply the aver-
age net profits by a more or less arbitrary number of years, hav-
ing regard for the nature and character of the business under
consideration. Von Au v. Magenheimer, 115 App. Div. 87

(1906).
§ 144. Meaning of “Employed within the State.”

The meaning of ‘employed within the state” has been the
subject of much judicial interpretation. Capital is ‘employed
within the state”’ when it is kept and used here for the purposes
of the corporation. People ex rel Edison Elec. Lt. Co. v.
Campbell, 138 N. Y. 546 (1893). It is not taxable unless ac-
tively used in the company’s business. For example, it has
been held that a corporation may invest in unproductive real
estate which is not directly used for the purposes of its regular
business without being liable for franchise taxation. People
ex rel Niagara Hydraulic Co. v. Roberts, 30 App. Div. 180;
Affd. 157 N. Y. 676 (1899). Subsequent cases have much
restricted the application of this doctrine, if indeed, they have
left anything of it. People ex rel Ft. George Realty Co. v.
Miller, 90 App. Div. 588 (1904) ; People ex rel 14th St. Realty
Co. v. Kelsey, 110 App. Div. 797 (1906) ; People ex rel Wall
and Hanover St. Realty Co. v. Miller, 181 N. Y. 328 (1905).

Money invested outside the state either in real estate, in
stocks or bonds, is not employed in the state even though the
income be received at the home office in New York and there
used. People ex rel Am. Surety Co. v. Campbell, 74 Hun
tol, Affd. 143 N. Y. 625 (1894); People ex rel Edison Co.
v. Campbell, 138 N. Y. 543 (1893).

So, too, any property having a permanent situs outside
the state cannot in any way be included as capital employed
within the state. People v. Campbell, 88 Hun 544 (189s).
STATE TAXATION. 147

Where the amount of capital employed within the state
fluctuates, the average is taken. People ex rel Brooklyn R.
T. Co. v. Morgan, 57 App. Div. 335 (1901).

“For purposes of taxation, the capital of a corporation in-
vested in the stock of another corporation shall be deemed to be
assets located where the physical property represented by such
stock is located.” (Tax Law, § 182.)

The comptroller has ruled that no rebate will be allowed
where capital has been employed in the state for less than a
year. Thus a company which has employed capital in New
York for one month only, prior to the date of assessment, is
compelled to pay on the basis of an equal amount as used for
a year; a holding which might well be contested under the
reasoning used in the case of Brooklyn R. T. Co. v. Morgan,
cited above.

§ 145. Classification of Corporations for Purposes of Fran-
chise Taxation.

The statute in effect divides all corporations both domes-
tic and foreign into three general classes for the purpose of
franchise taxation.

(1) Those paying dividends of six per cent. or over.

(2) Those which have declared no dividends.

(3) Those which have paid less than six per cent. annual
dividends.

Class 3 is again subdivided into three classes as follows:

(a) Those which are possessed of assets not in ex-
cess of liabilities (exclusive of capital stock), or in which
the average price of stock sold during the tax year did
not equal or exceed the par value of such stock.

(b) Those which have paid less than six per cent.
annual dividends and whose assets exceed the liabilities
(exclusive of capital stock) by an amount equal to or
greater than the par value of the capital stock, or in which
148 NEW YORK CORPORATIONS.

the average price at which stock sold during the tax year
is equal to or greater than the par value of such stock.

(c) All other corporations. (Tax Law, § 182.)

§ 146. (1) Corporations Paying Dividends Not Less Than
Six Per Cent.

If dividends of six per cent. or over, have been paid during
the year ending October 31st, the tax is for each one per cent.
of dividend paid, one-fourth of one mill on each dollar of capi-
tal employed in the state. For example, if a company employs
$100,000 of capital in the state upon which it pays dividends of
six per cent., the tax is one and one-half mills on each dollar of
capital or $150. If the dividends are ten per cent., the tax
would be at the rate of two and one-half mills or $250. The
dividends are used to fix the rate of taxation without regard to
whether they have been earned within or without the state.
People ex rel N. E. Dressed Meat Co. v. Roberts, 155 N. Y.
408. (For table showing this tax on various capitalizations,
see Part III, Table 1.)

§ 147. (2) Corporations Paying No Dividends.

When no dividend has been declared, the franchise tax
is three-fourths of a mill on each $1 of the appraised capital em-
ployed within the state (75 cents per $1,000). (Tax Law, §
182. )

The president, secretary or treasurer of the company must
report to the comptroller, giving his estimate of the “actual
cash value” of the stock, which must not be lower than the
average selling price during the year. The comptroller need
not accept this estimate as final, but may require additional in-
formation or may reappraise the stock, drawing his own con-
clusions from the information of the reports, or using other
information at his discretion. People ex rel Schwarzchild &
Sulzberger v. Roberts, 11 App. Div. 449, Affd. 156 N. Y. 690
(1898). If dissatisfied the company may review such action
STATE TAXATION. I49

on certiorari proceedings. Where no sales have been made the
question of valuation is sometimes difficult, but it is one of fact
to be determined by the officers of the company and the state
officials, subject to review by the courts.

The following is the rule of assessment in such cases as
stated in a recent decision of the Court of Appeals: “We think
that the statute practically defines the manner of determining
the basis for the tax in this case. It in effect declares that the
capital stock shall be appraised at its actual value in cash, and
that is made the basis upon which the tax is to be assessed. We
are of the opinion that the actual value of the capital stock of
such a corporation is the value of its assets after deducting its
liabilities and adding to the sum then remaining the value of
the good-will of the business including its right to conduct it
under its franchise.” People ex rel Wiebusch v. Roberts, 154
N. Y. tor, 108 (1897), per Martin, J.

=

$ 148. (3) Corporations Paying Dividends Less than Six
Per Cent.

As already stated, corporations paying dividends at the
rate of less than six per cent. are subdivided for purposes of
taxation into three groups taxable at different rates.

The first group is made up of:

(1) Those corporations whose assets do not exceed.
their liabilities, exclusive of capital stock.

(2) Those whose stock sold for an average price
below its par value during the tax year.

Corporations in this group are taxable at the rate of three--
fourths of a mill per $1 of capital employed in the state (75.
cents per $1000).

The second group includes corporations:

(1) Whose assets exceed their liabilities, exclusive
of capital stock, by an amount equal to or greater than the
par value of the capital stock.

(2) Corporations whose stock has sold during the

tax year at an average price equal to or greater than its.
par value.
I50 NEW YORK CORPORATIONS.

Corporations in this group are taxable at the rate of one
and one-half mills on each dollar of capital employed within
the state.

The third group—all other corporations—includes corpo-
rations which have paid less than six per cent. upon their capi-
tal stock and are not included in either the first or second
groups, i. e., corporations whose assets exceed their liabilities,
exclusive of capital stock, by an amount not equal to nor great-
er than the par value of the capital stock, and no stock of
which has been sold during the tax year.

The statute provides that such corporations shall be taxed
at an amount not less than would be produced by an assessment
of one and one-half mills upon each dollar of capital stock em-
ployed in the state, taken at its actual value, or at the rate of one
and one-half mills upon each dollar of capital employed in the
state valued at the average price at which such stock sold dur-
ing the tax year.

As any corporation whose stock has been sold is thereby
taken out of this group, it is of course impossible to employ
this latter method of determining the amount of tax payable
by a corporation of the third group.

In all cases where the dividends have been less than six
per cent., the capital stock must be appraised by the president,
treasurer or secretary of the company. (Tax Law, § 193.) In
the case of corporations falling within the second group de-
scribed in this section, such valuation must not be less than:

(1) The par value of the stock.
(2) The difference between the assets and liabilities,
exclusive of capital stock.

(3) The average price at which the stock sold dur-
ing the tax year. (Tax Law, § 182.)

It has been judicially decided (People ex rel N. Y. C. Ry.
v. Knight, 173 N. Y. 255 [1903]) that sections 182 and 193
of the Tax Law must be read together. The net result is that
§ 182 prescribes the manner of determining the portion of capi-
tal to be taxed and § 193 provides that the tax shall be levied
STATE TAXATION. I51i

on the actual and not the par value of the amount so deter-
mined, For example, “A corporation with a capital stock of
$500,000 par value might have assets of the value of $250,000,
of which $150,000 were employed in business in this state. In
such a case if the corporation had no peculiar franchise or ex-
ceptional good will or earning power, the market value of its
stock would approximate 50, but if the company were well
managed it might be 60 or 70. In computation for a franchise
tax it would not be reasonable to estimate the $150,000 of as-
sets at 70, the market value of the share stock, nor even at their
full value. The assets employed in this state would be three-
fifths of the total assets of the corporation; therefore three-
fifths of the share capital of the corporation or $300,000, should
be considered as being employed within this state.

“Tt is this rule that the statute intended to prescribe by
the provision that the tax shall be ‘upon such portion of the
capital stock at par as the amount of the capital employed
within this state bears to the entire capital of the corporation.’
But having determined that $300,000 of capital stock is to be
deemed as employed within this state then that capital stock
is under § 190 (now § 193) to be taken at ‘its actual cash
value’ for the purpose of computing the franchise tax.” Peo-
ple ex rel N. Y. & E. R. F. Co., 168 N. Y. 14, 17 (1901),
per Cullen, J. If the stock were, as supposed, worth 70, then
the amount upon which the franchise tax in the example given
would be estimated is $210,000, the actual cash value of the
capital stock deemed to be employed in the state.

If there are two or more classes of stock of any corpora-
tion, the tax is apportioned by the rule stated, in accordance
with the rate of dividend declared upon each. People ex rel
Journeay & Burnham v. Roberts, 37 App. Div. 1 (1899).

§ 149. Corporations Exempt from Franchise Tax.

The following domestic and foreign business corpora-
tions are exempt from franchise tax if not less than forty per
152 NEW YORK CORPORATIONS.

cent. of their capital is employed in the operations of the busi-
ness within the state:

(1) Laundering corporations.

(2) Manufacturing companies to’ extent of capital
employed in state in manufacturing and sale of the pro-
duct.

(3) Mining companies wholly engaged in mining
within the state.
A special statement must be made to the state comptroller

to secure this exemption. (Tax Law, § 183.) (See Form
66.)

§ 150. What Are Manufacturing Companies?

The question as to what constitutes “manufacturing”
to entitle a corporation to exemption from taxation under the
above rule has been the subject of much judicial interpretation,
although, unfortunately, the cases have, for the most part,
confined themselves to a discussion of the particular instance
under review rather than attempting to lay down any general
rules.

“Whoever creates a useful thing by mechanical labor is
entitled to be called a manufacturer” was the test applied in
a recent case (People ex rel Waterman v. Morgan, 48 App.
Div. 395, 399 [1900]), which seems to cover the majority
of the cases. If a corporation is in doubt, a letter to the state
comptroller will give an official, though not necessarily, a final
ruling on the question. A discussion of the cases in point
would occupy more space than it is possible to devote to the
subject in this work. The following are representative:
People ex rel ASphalt Co. v. Morgan, 61 App. Div. 373
(1901); People ex rel Devoe v. Roberts, 51 App. Div. 77
(1900) ; People ex rel Jewelers’ Circular Pub. Co. v. Roberts,
155 N. Y. 1 (1898); People ex rel U. P. Tea Co. v. Roberts,
145 N. Y. 375 (1895). (See Chapter XVI for report to be
made comptroller and Forms 65 and 66 for Franchise Tax
Reports. )
STATE TAXATION. 153

§ 151. Stock Transfer Tax.

A tax of two cents on each $100 of face value or fraction
thereof is imposed “on all sales or agreements to sell, or
memoranda of sales or deliveries or transfers of shares or
certificates of stock in any domestic or foreign association,
company or corporation” made after June 1, 1905. (Tax
Law, § 270.) Stock hypothecated but not sold is not taxed.
(Id.

re of this tax is indicated by an adhesive stamp,
affixed to the certificate or other evidence of transfer, or
placed upon the books of the company if the sale or transfer
is made only on the books. (Id.) The person affixing any
such stamp must write or stamp thereon the initials of his name
and the date of affixing, and cut or perforate the same in a
substantial manner so that it cannot be again used. (Tax
Law, § 273.) No transfer of stock upon which such tax is
not paid at the time of transfer shall be made the basis of any
action or legal proceeding, nor shall proof thereof be offered
or received in evidence in any court of the state. (Tax Law,
§ 278.) Failure to pay this tax, or to cancel stamps when
affixed, is a misdemeanor, punishable by fine and imprison-
ment, also by additional civil penalty of $500 for each viola-
tion. (Tax Law, $$ 272, 273, 277.)

The statutes impose a transfer tax of two cents “on each
share of one hundred dollars of face value or fraction there-
of.” This provision was declared unconstitutional in the
case of People ex rel Farrington v. Mensching, 187 N. Y. 8
(1907), and the original taxing clause (L. 1905, Ch. 241)
which provides for a tax of two cents to be payable “on
each hundred dollars of face value or fraction thereof” there-
by reinstated.

The stock transfer tax is not payable on an original
issue. People v. Duffy-McInnery Co., 122 App. Div. 336
(1907).

Shares of stock sold on foreclosure of mortgage are
taxable. Glynn v. Conklin et al., 127 App. Div. 473 (1908).
154 NEW YORK CORPORATIONS.

§ 152. Stock Transfer Tax. Rules of the State Comptrol-
ler’s Office.

The following circular has been issued by the state comp-
troller, giving the essential features of the transfer tax law
and the rules of the comptroller’s office in regard thereto.

It may be noted that the comptroller’s ruling as to trans-
fers made outside the state has not yet been subjected to
judicial review.

STATE COMPTROLLER’S OFFICE
Taxes on Stock Transfers

Pursuant to the statute, and under decisions made by
this department in administering the law, the following regu-
lations will govern the imposition and collection of taxes
upon transfers of stock:

1. A tax is imposed on all sales, agreements to sell, de-
liveries, or transfers, of shares or certificates of stock in
any domestic or foreign association, company or corpora-
tion.

2. Where the par value of one share exceeds one hun-
dred dollars, an additional tax of two cents is required for
each additional one hundred dollars of par value or fraction
thereof.

3. Where the evidence of transfer is shown only by the
books of the company, the tax stamp must be placed upon
such books; where the transfer is by a certificate of stock
delivered to a person named thereon as assignee, the stamp
must be placed upon such certificate; where the tax is upon
an agreement to sell stock, or where the transfer is by de-
livery of the certificate assigned in blank, there must be a
delivery by the seller to the buyer of a bill or memorandum
of sale to which the stamp must be affixed.
STATE TAXATION. 155

4. Any transfer of stock of which a record is kept or
which should be entered in books within this state, or a
memorandum of sale or agreement therefor delivered be-
tween the parties here, is subject to a tax. The residence of
the parties to the transaction is immaterial, as is also the
place where the negotiations occurred which culminated in
a sale.

5. Every bill or memorandum of sale, agreement to sell,
or sale ticket, executed, must show the date thereof, name
of the seller, amount of sale, and the matter or thing to which
it refers.

6. Every stamp used to denote payment of the tax
must be cancelled by the user by writing or stamping there-
upon the initials of his name and the date of the transaction,
and he must also cut or perforate the stamp in a substantial
manner so that such stamp cannot be again used. An effect-
ive marking with ink and obliterating of every stamp is strictly
required.

7. A transfer made prior to the second day of June,
1905, is not taxable.

8. The tax is imposed upon transfers of shares or cer-
tificates of stock whether the transfer as between the parties
thereto is for a valuable consideration or not.

9. A sale of stock made outside of New York State
is subject to a tax if it is evidenced by entries in transfer
books or by any form of written instrument within the state
necessary to effect such transfer.

10. A transfer of stock in a building and loan associ-
ation is within the provisions of the law. A surrender of
shares to such a corporation for cancellation upon maturity
is not a taxable transfer. Shares transferred are taxed upon
par or face value in the sum of two cents each without re-
gard to whether the share is partially paid in or not.

11. The surrender of a certificate of stock to a cor
poration for the purpose of receiving other certificates to be
I 56 NEW YORK CORPORATIONS.

issued to the same owner in smaller amounts, but in an aggre-
gate equal to the amount of the surrendered certificate, being
a mere exchange of certificates without a transfer of owner-
ship, is not taxable.

12. A certificate when divided and reissued, part to a
new stockholder and part to the original owner, is taxable
to the extent of the transfer to the new purchaser and not
taxable in the portion retained by the original owner.

13. The law does not make an exemption from the
tax of shares of stock in religious or charitable associations.

14. Stock held by a corporation as treasury stock is not
taxable until shares are issued and transferred to a stock-
holder.

15. Shares of stock held by an executor or adminis-
trator and transferred by him to other parties, whether heirs
or not, are subject to a tax.

Stock transfer tax stamps are issued in the following
denominations: 2c., 4c., Ioc., 20c., 50c., $1, $2, $10, $20,
and are on sale at the Empire Trust Company, 42 Broad-
way, New York City, and the National Commercial Bank,
Albany, N. Y.
CHAPTER XV.
LOCAL TAXATION.

§ 153. Tax District.

Any political subdivision of the state, as a county, town,
incorporated village or city, which has an independent local
board of assessors authorized to assess property therein for
state and county taxes, is a “tax district.” (Tax Law, § 2.)

§ 154. Taxation of Realty.

The real property of corporations is assessed in the tax
district where it is situated in the same manner as the real
property of individuals. (Tax Law, § 11.)

§ 155. Taxation of Personalty.

The entire capital or property of a domestic corporation
is taxable as personalty after the following deductions have
been made (See §§ 158-169):

(1) All real estate at its assessed valuation.

(2) All debts and liabilities.

(3) All shares of stock actually owned by such
company in other corporations taxable upon their capital
in New York.

(4) Any surplus or reserve up to ten per cent. of
the authorized capital.

(5) Shares of the company’s stock held by the
state or by incorporated charitable or religious institu-
tions.

(6) All tangible property having a permanent situs
outside the state.

(7) United States securities.

157
158 NEW YORK CORPORATIONS.

(8) United States patents and copyrights.
(9) Imported goods kept in the original packages.
(10) Good-will.
(11) Mortgages paying tax under Mortgage Tax
Law.

§ 156. Place of Assessment of Personalty,

The place where the personal tax of a corporation must
be paid is fixed without regard to the actual situs of the
personal property upon which the taxes are paid (Gas Co. v.
Assessors of Olean, 15 St. Rep. 461, 464 [1888]), and is as
follows:

(a) If the corporation has a principal office within the
state the tax is payable in the tax district where such office
is situated. (Tax Law, § 11.) In determining which office
is the “principal” office when the corporation has more than
one office in New York, the statement made in the certificate
of incorporation is conclusive, both upon the corporation and
the assessors, if the company was required by law to include
such statement in its certificate. (B.C. L., § 2.) Western
Transit Co. v. Scheu, 19 N. Y. 408 (1859); Union Steamboat
Co. v. Buffalo, 82 N. Y. 351, 356 (1880).

(b) If it has no principal office in the state, the tax
is payable in the district where the company maintains a place
for the transaction of its financial concerns. (Tax Law,
§ 11.) Since business corporations are required to name their
principal office in the certificate of incorporation, this provi-
sion does not apply to them.

(c) If any corporation has neither a principal office nor
a place for transacting its financial affairs within the state,
such corporation is assessed in the tax district where its opera-
tions are actually carried on. (Tax Law, § 11.)

§ 157. Manner of Assessing Personalty.

The tax on personalty is based upon the actual value of
the property owned by the corporation after the deductions
LOCAL TAXATION, 159

required or permitted by law have been made. (Tax Law,
§ 12.) The assessors may determine this assessment value of
the corporate personalty by any method likely to give the
most accurate results. They may consider the market value
of the stock where the value of the assets cannot be definitely
ascertained. Brewing Co. v. Neff, 19 App. Div. 596 (1897);
People ex rel U. T. Co. v. Coleman, 126 N. Y. 433 (1891).
The payment of dividends justifies the assumption that the
capital stock is unimpaired and that the assets are therefore at
least equal to the amount of the authorized or outstanding
capital stock, but the presumption is rebuttable. People ex
rel M. R. Co. v. Barker, 146 N. Y. 304, 313 (1895).

Although corporations report to the assessors (See Chap.
XVI, “Reports’’), the statements of such reports are not bind-
ing upon the latter if they have other evidence. People ex
rel Trust Co. v. Coleman, 126 N. Y. 433, 448 (1891). If,
however, the company’s verified statement is uncontradicted, it
must be accepted. The action of the assessors in disregarding
the report in such a case is reviewable on certiorari proceed-

ings. People ex rel Edison Co. v. Barker, 139 N. Y. 55 (1893).

§ 158. Deductions before Assessment of Personalty.

In interpreting the provisions of the Tax Law concern-
ing the assessment of corporate personalty, it should be borne
in mind that while the purpose of the law is to reach all prop-
erty within the state that may be legally taxed, double and
improper taxation is sought to be avoided by deduction, before
the assessment, of all property subject to taxation as realty, of
all property exempt from taxation and of all legitimate liabili-
ties. These deductions are as follows:

§ 159. (1) Real Estate.

The assessed value of any realty owned by the corpora-
tion is to be deducted from its total assets before assessment
of personalty. (Tax Law, § 12.) In determining the per-
160 NEW YORK CORPORATIONS.

sonalty of the corporation, however, the gross assets are
first computed and any real estate is included at its actual
value. People ex rel Subway Co. v. Barker, 7 App. Div. 27;
Affd. 151 N. Y. 639 (1897). Then, since this realty is taxed
only on its value as fixed by the assessors, its assessed value
is deducted from the gross assets.

In theory the actual and assessed values of realty should
be the same; but, in practice, a difference is so nearly univer-
sal that the assessors in making up the gross assets for the
personalty tax, may disregard the assessed value, except for
purposes of deduction, and list the realty at their estimate of
its true value. People ex rel Gas Co. v. Barker, 144 N. Y.
94, 100 (1894). Under these conditions, it may happen that
a corporation which has no property except realty may still
have to pay a personal tax, the excess of the actual over the
assessed value of its realty being considered personalty. Peo-
ple ex rel Clearing House v. Barker, 31 App. Div. 315 (1898).

Where there are different interests in the same property,
the general rule still applies. For example, if a corporation
owns buildings on leased ground; since the company pays
taxes only on the assessed value of the buildings, that alone
may be deducted. People ex rel Eden Musee Co. v. Feitner,
60 App. Div. 282 (1901). Where corporate realty is mort-
gaged and the equity of redemption only is included in its
report of assets, deduction may be made of the assessed valu-
ation of the equity only and not of the whole property. Peo-
ple ex rel Weber v. Wells, 180 N. Y. 62 (1904).

Real estate situated outside the state is non-taxable in
New York. Matter of Swift, 137 N. Y. 77, 84 (1893). If
such real estate has been assessed by the foreign jurisdiction,
the local assessors are justified in assuming that the assessed
value is the true value, and in making their deductions ac-
cordingly. People ex rel Fairchild Chemical Co. v. Comrs.,
115 N. Y. 178, 183 (1889). They may in their discretion
consider other elements, such as cost, and should do so when
LOCAL TAXATION. 161

there is no assessed value or where it is not obtainable. Ry.
v. Comrs., 95 N. Y. 554, 562 (1884).

§ 160. (2) Debts and Liabilities.

The Court of Appeals has interpreted the statutory state-
ment that in fixing the assessment value of personalty the
stock—or capital—subject to taxation shall, after specified
deductions, “‘be assessed at its actual value” (Tax Law, § 12)
in the light of §§ 32 and 38 of the Tax Law and of the pro-
visions of the Statutory Construction Law, as allowing a de-
duction of corporate debts; “for the actual value of the stock
ordinarily means the value after the debts are paid.’ People
ex rel Cornell S. Co. v. Dederick, 161 N. Y. 195, 206 (1900).
The debts of the corporation are, therefore, deducted before
the assessment of personalty is fixed. Debts that have been
contracted in the purchase of non-taxable property, such as
United States bonds, goods imported and held in the original
packages, good-will, etc., are an exception to the rule and are
not deductible. (Tax Law, § 6.) The property they repre-
sent is itself deducted and to allow for amounts due on such
property, would be a double deduction. People ex rel Cornell
S. Co. v. Dederick, supra. Debts to be deductible must be
certain in amount and not contingent. People ex rel Sands v.
Feitner, 173 N. Y. 647 (1903).

Dividends actually declared in good faith before assess-
ment day, although not paid till afterward, may be deducted,
since they belong to stockholders. (See § 88.) People ex
rel Trust Co. v. Barker, 86 Hun 131 (1895). One anoma-
lous New York decision exists to the effect that dividends
declared but left in the business may be taxed as capital. The
conclusion is illogical and not supported by authority. People
ex rel Hawley Box Co. v. Barker, 23 App. Div. 532 (1897).
Interest due on mortgage and other debts may be deducted
though not payable till later.
162 NEW YORK CORPORATIONS.

§ 161. (3) Shares of Stock,

If the company owns stock in other corporations which
are taxable upon their capital stock under the New York laws,
such stock is to be deducted. (Tax Law, §§ 4 [sub. 16], 12.)
People ex rel Keppler & Schwarzmann v. Barker, 22 App. Div.
120; Affd. 155 N. Y. 661 (1898). This is one of the pro-
visions intended to prevent double taxation.

§ 162. (4) Surplus or Reserve.

If the corporate assets exceed the capitalization, the sur-
plus or reserve, up to ten per centum of the authorized capital,
may be deducted. People ex rel Citizens’ Ill. Co. v. Neff,
26 App. Div. 542 (1898). Any surplus in excess of this
amount is taxable. The fact that the company has issued
interest bearing certificates to stockholders showing their pro-
portionate shares in the surplus does not affect its status for
purposes of taxation. People ex rel W. Gas Lt. Co. v. As-
sessors, 16 Hun 196, 199 (1878).

§ 163. (5) Stock Held by State, etc.

Shares of the corporation held by the state, or by incor-
porated charitable or religious institutions may be deducted.
(Tax Law, §§ 12, 32.)

§ 164. (6) Property in Other States.

All tangible property having a permanent situs outside
the state may be deducted. (See Matter of Swift, 137 N.
Y. 77, 84 [1893], for an excellent discussion of this rule.)
Property temporarily in another state, or removed to another
state simply for the purpose of avoiding taxation, is taxable
in New York. People ex rel P. M. S. Co. v. Comr. of Taxes,
64 N. Y. 541 (1876).

Since “personal property” includes debts due from sol-
vent debtors (Tax Law, § 2, subdiv. 5), such amounts are
taxable whether the debtor resides in New York or elsewhere.
LOCAL TAXATION. 163

Bank deposits are debts due the depositor (Cragie v. Hadley,
99 N. Y. 131, 133 [1885]), and therefore taxable under this
rule without regard to the place of deposit. People ex rel
U. V. Copper Co. v. Feitner, 54 App. Div. 217 (1900).

§ 165. (7) United States Securities,

United States securities owned by the corporation are
exempt from taxation and are to be deducted. The exemp-
tion is not limited to the par value of the bonds but to their
entire actual value. People ex rel Leonard v. Comrs., 90
N. Y. 63 (1882).

§ 166. (8) Patents and Copyrights.

United States patents and copyrights are exempt from
state and local taxation. Ex rel Edison Co. v. Assrs., 156
N. Y. 417 (1898); People ex rel Johnson v. Roberts, 159
N. Y. 70 (1899) ; cf. People ex rel U. S. A. P. Co. v. Knight,
174 N. Y. 475 (1903). Their value cannot therefore be in-
cluded in the assessed value of personalty.

§ 167. (9) Imported Goods.

Goods imported and held in the original packages cannot
be taxed, for it would be state interference with interstate
commerce, a subject exclusively under Federal control. Peo-
ple ex rel Bijur v. Barker, 155 N. Y. 330 (1898) ; People ex
rel Matheson & Co. v. Roberts, 158 N. Y. 162 (1899) ; Brown
v. Maryland, 12 Wheat 419 (1837).

§ 168. (10) Good-Will.

Good-will is not within the definition of personal property
and is not taxable for local purposes. People ex rel Brokaw
Bros. v. Feitner, 44 App. Div. 278 (1899).

§ 169. (11) Mortgages.

Mortgages on real property within the state, upon which
the mortgage tax of one-half of one per cent. has been paid
(Tax Law, § 251), are exempt from local taxation.
164 NEW YORK CORPORATIONS.

§ 170. Date of Assessment.

The date of assessment for both realty and personalty is
the same in any one tax district, but in each tax district this
assessment date is fixed without necessary reference to the
assessment dates of other districts. In the great majority of
districts the assessment date is July 1st, but many of the cities
have other dates fixed by charter provision. In New York
City, the five boroughs of which constitute one tax district,
the assessment date is the second Monday in January.

Assessments become a legal obligation on the date upon
which made, e. g., the second Monday in January in New York
City. A corporation which changes the location of its princi-
pal office from a tax district prior to the date of making assess-
ments is not taxable in the district from which it removed.
Mygatt v. Washburn, 15 N. Y. 316 (1857); City of N. Y.
v McLean, 170 N. Y. 374 (1902). Removal after assess-
ment does not relieve the company from payment of the tax.
(See Chap. XVI, “Reports”; also Forms 67, 68.)

§ 171. New York City.

Tax lists are made up in New York City on the second
Monday in January. On or about that date the department
of taxes sends notices to corporations taxable in the city,
stating the amount of the assessment. Blanks for the pur-
pose of revision are also enclosed. (See Form 68.) If the
notice is not received it should be sent for, as the department
is under no obligation to give notice of the assessment. The
tax lists are opgn for correction at the main office of the tax
department in the Borough of Manhattan till, but not includ-
ing, April Ist, and if any revision of the assessment is de-
sired, application therefor must be made before that date.
Clarke v. Mayor, 111 N. Y. 621 (1889).

Where no application is made for reduction, the assess-
ment becomes final on April 1st. If application is made, the
commissioners of taxes and assessments may during April and
LOCAL TAXATION. 165

May examine the officers of the applicant corporation under
oath and readjust the assessments as they deem proper. (Gr.
N. Y. Charter, § 895.) Their determination, in that case,
becomes final on June Ist (People ex rel Brewing Co. v.
Feitner, 41 App. Div. 496 [1899]), and is then reviewable
only on certiorari proceedings which must be commenced
prior to November tst. (Gr. N. Y. Charter, § 906.)

Taxes are payable on the first Monday in October. If
not paid prior to November Ist, interest is charged at the
rate of seven per cent. per annum from the first Monday
in October to date of payment. (Gr. N. Y. Charter, § 915,
as amended by L. 1908, Ch. 447.) If not paid by January
15th the comptroller may issue a warrant to the city marshal
to collect the tax by distress and sale. At any time within
a year after the return of this warrant unsatisfied, the city
may sue to collect in an action brought by the receiver of
taxes. (Gr. N. Y. Charter, § 232; L. 1904, Ch. 624.)

§ 172. Special Franchises.

“Special franchises” are those involving the use of pub-
lic streets or other public places by private individuals or com-
panies. They are taxable for local purposes. A consideration
of the subject is outside the scope of the present work.
CHAPTER XVI.
REPORTS.

§ 173. Required Reports.

The regular reports required annually of business corpo-
rations are three in number: (1) a report to the Secretary of
State, known as the Annual Report; (2) a report to the state
comptroller usually referred to as the Comptroller’s Report;
and (3) a local tax report to the assessors of the particular tax
district.

§ 174. Annual Report.

The annual report is made to the Secretary of State and
is supposed to show the general financial condition of the re-
porting corporation.

Prior to 1901 the responsibility for the annual report de-
volved upon the directors of corporations and was a source
of considerable anxiety and trouble. The liberalizing amend-
ments of that year, however, transferred the duty of making
this report to the executive officers of the company, and prac-
tically relieved the majority of corporations from the necessity
of making it at all.

As the law now stands, business corporations are re-
quired to submit afnually during the month of January to the
Secretary of State, a report (See Form 64) as of the first
day of January, which shall state:

(1) The amount of its capital stock, and the pro-
portion actually issued.
(2) The amount of its debts or an amount which
they do not exceed.
166
REPORTS. 167

(3) The amount of its assets or an amount which
its assets at least equal.

(4) The names and addresses of all the directors
and officers of the company, and in the case of a foreign
corporation, the name also of the person designated in
the manner prescribed by the Code of Civil Procedure,
as a person upon whom process against the corporation
may be served within this state.

“Such report shall be made by the president or a vice-
president or the treasurer or a secretary of the corporation
and shall be filed in the office of the secretary of state. If
such report be not so made and filed, any such officer who
shall thereafter neglect or refuse to make and to file such
report, within ten days after written request so to do shall
have been made by a creditor or by a stockholder of the corpo-
ration, shall forfeit to the people the sum of fifty dollars for
every day he shall so neglect or refuse.” (S.C. L., § 34.)

It is manifest that a report such as required by the statute
just quoted may be made absolutely valueless as a source of
information concerning the corporate condition.

There is no penalty for failure to make the annual report
unless a written demand as above set forth has been made for
its filing by a creditor or stockholder.

§ 175. Report to State Comptroller. Franchise Tax.

An annual report, for purposes of franchise taxation,
must be made to the state comptroller on or before November
15th of each year, showing the condition of the corporation
at the close of the preceding October 31st. This report must
state the amount of authorized capital stock, the amount of
stock paid in, the date and rate per centum of each dividend
declared during the year, the entire amount of the corporate
capital and the amount employed in the state during the year.
(Tax Law, § 192.) (See Chap. XIV, “State Taxation.”)

Under the power conferred upon him by § 194 of the Tax
168 NEW YORK CORPORATIONS.

Law, the state comptroller has adopted forms which must be
followed in making the report. Blanks may be obtained with-
out charge by applying therefor to the comptroller’s office at
Albany, New York. Forms are supplied for both domestic
and foreign corporations; also for manufacturing, laundering
and mining companies making application for exemption from
franchise taxes. (See Forms 65. 66.)

In case of failure to report, or if the report is unsatis-
factory, the comptroller may estimate the dividends and the
value of the capital stock from any data obtainable. He may
examine the corporate books and records and may institute
an investigation and take testimony in person or by deputy
for his information. The expense of such proceedings is
added to the tax. (Tax Law, § 195.) Ifa report is un-
satisfactory it is usual to demand a supplemental statement
before taking the drastic steps outlined above. (Tax Law,
§ 194.)

For failure to make the annual report to the comptroller,
or failure to make any special report required by him, within
a reasonable time to be specified by him, a penalty of one
hundred dollars is incurred and the additional sum of ten
dollars per day for each day that such failure continues. (Tax

Law, § 197.)

§ 176. Local Tax Report.

Local practice in the matter of assessing corporations for
personal taxes varies throughout the state. In the majority
of tax districts the assessment of corporations is made on
July rst. .

In any such district the president or other executive offi-
cer of every business corporation must deliver to the local
assessors annually on or before June 15th, and if such tax
district is in a county embracing a portion of the forest pre-
serve, to the state comptroller also, a verified report of prop-
erty owned by the corporation, to be used as a basis for per-
REPORTS. 169

sonal taxation. (Tax Law, § 27.) (See Form 67.) The
assessment is made on the 1st of July in most of these dis-
tricts and is finally fixed at a later date, varying with the
district.

This report must state:

(1) The real property, if any, the tax district in
which the same is situated and the sums actually paid
therefor.

(2) The capital stock actually paid in and secured
to be paid in, excepting therefrom the sums paid for real
property and the amount of such capital stock held by
the state and by any incorporated literary or charitable
institution.

(3) The tax district in which the principal office of
the company is situated, or in case it has no principal
office, the tax district in which its operations are car-
ried on. (Tax Law, § 27.)

The more important tax districts provide regular printed
forms for this report.

If such statement is not made within twenty days after
June 15th, or is insufficient, evasive or defective, the assessors
may compel the corporation to make a proper statement by
mandamus. (Tax Law, § 27.) (But see Matter of Adler
Bros., 76 App. Div. 571, 576 [1902]).

In New York City and Buffalo no preliminary report is
required. ‘The assessors fix the tax tentatively at an arbitrary
amount. It is taken for granted that a revision will be desired
and blank applications for such revision are enclosed with the
notices of assessment. (See comment, Chap. XXV, “Forms
of Reports.”)
CHAPTER XVII.
FOREIGN CORPORATIONS.

§ 177. Status of Foreign Corporations,

The right of the state to impose conditions upon foreign
corporations seeking to do business within its boundaries is
too well settled to admit of question. Pembina Mining Co. v.
Pa., 125 U. S. 181 (1887) ; People ex rel Oil Co. v. Wemple,
131 N. Y. 64 (1892). A corporation is not a “citizen” within
the meaning of the constitutional provision that “the citizens
of each state shall be entitled to all the privileges and im-
munities of citizens in the several states.” Paul v. Va. 8
Wall. 168 (1868). Having no absolute right of recognition,
it follows that a corporation doing business in a state as a
foreign corporation must comply strictly with the terms of
the statutes granting it the privilege. Section 15 of the Gen-
eral Corporation Law provides that “No foreign stock cor-
poration other than a moneyed corporation, shall do business
in this state” without first securing a certificate of author-
ity from the Secretary of State. Foreign corporations are also
required to pay certain prescribed fees and taxes. (See §§
181, 182.)

§ 178. What Constitutes “Doing Business in the State.”

The phrase ‘“‘doing business within the state’ has been
the subject of much judicial interpretation of no very en-
lightening nature. Speaking generally, a company is “doing
business within the state’ when it conducts and concludes in
New York a series of transactions constituting a substantial
portion of its regular business. Occasional business trans-

170
FOREIGN CORPORATIONS. I71I

actions are not sufficient to require a certificate of authority,
but if it continuously buys or sells, or does both within the
state, it is within the provisions of the statutes. The Com-
mercial Wood & Cement Co. v. Northhampton Cement Co.,
41 Misc. 242 (1903); People v. Horn Silver Mining Co., 105
N. Y. 76, 83 (1887); Copper Co. v. Ferguson, 113 U. S.
727 (1885), followed in Knitting Co. v. Bronner, 20 Misc.
125 (1897).

The transactions must be completed within the state.
The mere employment of traveling agents to take orders and
send to the home office for approval and filling does not come
within the purview of the statute, since the contracts are made
outside the state. Jones v. Keeler, 40 Misc. 221 (1903);
People ex rel Cotton Oil Co. v. Roberts, 25 App. Div. 13,
15 (1898). See also ‘Murphy Varnish Co. v. Connell, 10
Mise. 553 (1894); Vio Chemical Co. v. Studholme, 53 Misc.
470 (1907) ; Affd. 121 App. Div. 927; Fresno Home Packing
Co. v. Turle & Skidmore, 60 Misc. 79 (1908).

A foreign corporation which consigns goods to New
York to be sold on a profit sharing basis is not transact-
ing business within the state so as to require a certificate.
Brown Seed Co. v. Richardson, 53 Misc. 517 (1907).

§ 179. Foreign Corporations with Resident Incorporators.

Formerly in order to escape the somewhat onerous re-
quirements then imposed on domestic corporations, it was not
uncommon for residents of New York to incorporate in
another state and operate in this state as a foreign corporation.
This practice has been sustained by the courts (Demarest v.
Flack, 128 N. Y. 205 [1891]; Lancaster v. Amsterdam Co.,
140 N. Y. 576 [1894]), but the liberalization of the New
York corporation laws within recent years has deprived it of
its desirability. Outside incorporation under the present stat-
utory provisions merely results in most cases in a double
payment of fees and franchise taxes.
172 NEW YORK CORPORATIONS.

§ 180. Procedure to Secure Admission to State.

Before commencing operations a foreign corporation in-
tending “to do business in the state,” within the meaning of
that term as explained above, must file the following papers
with the Secretary of State (G. C. L., § 16):

(1) A statement under the corporate seal and the sig-
nature of its president, vice-president or other acting head,
setting forth:

(a) The business or objects of the corporation (G. C.
L., § 16), which must be such as may lawfully be carried on
by domestic corporations. (Id., § 15.)

(b) The place within the state which is to be its prin-
cipal place of business, and the name of the person thereat to
receive service of process. If within a city, the street and
street number if any, or other suitable designation of the
particular locality must be given.

This statement must be sworn to in due form, usually by
the president or acting head of the company and be impressed
with the corporate seal. It must be accompanied by the writ-
ten consent of the person designated to receive service to act
for the company. (G. C. L., § 16.) (See Forms 69-74.)

(2) There must accompany this verified statement a
copy of the corporate charter or certificate of incorporation in
the English language, sworn to by an executive officer of the
company. (G.C.L.,§ 16.) This affidavit may be made out-
side the state before a New York commissioner of deeds or a
local notary. In the latter case it must be accompanied by a
certificate showing the notary’s authority. (For affidavit, see
Form 71.)

If the papers are in proper form and the name of the
foreign corporation is not one forbidden to a domestic cor-
poration of the same character, or so closely resembling that
of an existing domestic corporation as to cause confusion, the
Secretary of State will issue a certificate of authority to do
business. (G. C. L., § 15.)
FOREIGN CORPORATIONS. 173

If the resident agent of a foreign corporation is changed,
a revocation and new designation (see Form 72) must be
filed with the Secretary of State. (G. C. L, § 16.) The
resident agent may at any time terminate his designation by
a written revocation filed in the office of the Secretary of State.
(Id.) (See Form 73.)

§ 181. Fees,

The fees for filing the above papers and for the certificate
of authority when a foreign corporation seeks admission to the
state, amount to $11, and this sum should be sent with the
papers direct to the Secretary of State. (Executive Law, § 26,
subdivs. 7, 13.) No fee is paid for filing revocation and new
designation when the resident agent is changed.

§ 182. Status of Foreign Corporations when Licensed.

Foreign corporations are governed primarily by the law
of their domicile, and mere permission to do business in New
York does not enlarge their powers in any way. Bard v.
Poole, 12 N. Y. 495 (1855). Within their chartered powers,
however, they have, upon receiving the certificate of authority,
the same right to transact business as domestic companies.
(G. C. L., § 15.) Lancaster v. Amsterdam Co., 140 N. Y.
576 (1894). A seemingly unnecessary provision of the stat-
utes (G. C. L., § 20) specially grants to such corporations
the power to hold real estate requisite for the corporate busi-
ness and to convey the same as fully as domestic corporations.
‘Lancaster v. Amsterdam Co., supra, p. 589.

§ 183. Penalties for Non-Compliance.

Contracts made in New York prior to obtaining a certifi-
cate of authority by a foreign corporation doing business in
the state are unenforceable in the state courts, whether sued
upon by the corporation, by its assignee or by those claiming
under either. (G. C. L, § 15.)
174 NEW YORK CORPORATIONS.

The prohibition of the statute applies only to actions on
contracts. A foreign corporation may maintain a tort action,
as, for example, replevin, without obtaining a certificate of
authority to do business. American Type Founders Co. v.
Conner, 6 Misc. 391, 394 (1894) ; Schlitz Brewing Co. v. Ester,
86 Hun 22, 27 (1895). A foreign corporation may sue in
this state on a contract made in another state. Batchelder
Co. v. Knopf, 54 App. Div. 329 (1900). Such a corpora-
tion may have equal rights with residents under particular
statutes. For example, it has been held that a foreign corpo-
ration may file a mechanic’s lien against buildings containing
materials furnished in the state even though it has not obtained
a certificate authorizing it to do business. Campbell v. Coon,
149 N. Y. 556 (1896); Matter of Simonds Furnace Co., 30
Misc. 209 (1900).

Compliance with the statute must be specifically pleaded.
Wood & Selick v. Ball, 190 N. Y. 217 (1907). Foreign cor-
porations may take New York real property by devise, or may
purchase it on foreclosure of any mortgage held by them, or
may acquire it upon settlement to secure a debt, without a
certificate, and hold the same for a term not exceeding five
years. (G.C.L, § 21.)

§ 184. Principal Office.

Foreign corporations must maintain a principal office or
place of business within the state. (G. C. L., § 16.) This
may be merely the business office of the resident agent, the
object of the statute being attained when a place is designated
where process may be served on the company. The location
of the principal office within the state must be stated in the
application for admission. (G. C. L., § 16.) No statutory
provision is made for change of location thereafter.

§ 185. State Taxation. License Tax,

Foreign corporations which have obtained authority to
transact business in this state under the provisions of the
FOREIGN CORPORATIONS. 175

General Corporation Law must pay a license tax of one-
eighth of one per cent. on the capital employed in New York
during the first year of business. If in any year thereafter
the capital so employed is increased, a similar tax must be
paid on the increase. (Tax Law, § 181.) This tax corre-
sponds to the organization tax required of domestic corpora-
tions (See Chapter IT), but owing to its higher rate places
foreign corporations at a distinct disadvantage.

“The measure of the amount of capital stock employed
in this state shall be such a portion of the issued capital stock
as the gross assets employed in any business within. this
state bear to the gross assets wherever employed in busi-
ness, * * * The amount of capital upon which such
taxes shall be paid shall be fixed by the comptroller, who
shall have the same authority to examine the books and rec-
ords in this state of such foreign corporations, and the em-
ployees thereof, and the same power to issue his warrant for
the collection of such taxes, as he now has with regard to
domestic corporations.” (Tax Law, § 181.)

The license tax must be paid within thirteen months from
the date of beginning business in New York and unless a
receipt therefor is obtained, the corporation cannot maintain
an action in the state courts. (Tax Law, § 181.) (See § 189.)

Failure to pay this tax is an affirmative defense to be
availed of by answer. Wood & Selick v. Ball, 190 N. Y.

217 (1907).
§ 186. State Taxation. Annual Privilege Tax.

Foreign business corporations carrying on business in
New York, unless engaged wholly in manufacturing, pay a
state tax for the privilege corresponding to the franchise tax
paid by domestic companies (see Chapter XIV, “State Taxa-
tion”) computed on the basis of capital employed within the
state. (Tax Law, § 182.)

The taxability of foreign corporations under the section
depends therefore upon the concurrence of two conditions.
176 NEW YORK CORPORATIONS.

(1) The corporation must be doing business within the
state. (See § 178.)

(2) Some portion of the capital must be employed with-
in the state. People ex rel Chicago Junc. Co. v. Roberts, 154
N. Y. 1 (1897).

It is not always an easy matter to determine what capital
is employed within the state although the same general rules
apply as in the case of domestic companies. (See Chap. XIV,
“State Taxation.”) People ex rel Davis-Colby Co. v. Camp-
bell, 66 Hun 146, 148 (1892).

“Capital” means actual tangible property and not capital
stock. People ex rel Seth Thomas Clock Co. v. Wemple,
133 N. Y. 323 (1892); People ex rel Ginseng Co. v. Kelsey,
93 N. Y. Supp. 369, Affd. 182 N. Y. 526 (1905). It is held,
however, that the statute contemplates the taxation of “capi-
tal” not “surplus.” People ex rel Advertising Co. v. Roberts,
4 App. Div. 288 (1896), Affd. 151 N. Y. 621 (1896). Under
this ruling a foreign corporation employing an amount equal
to its entire capital stock in the state, may in addition employ its
surplus in the state exempt from taxation—that is, it cannot be
taxed on an amount greater than its authorized capital stock.

While in most cases a foreign corporation doing business
within this state will employ some portion of its capital in
so doing, it is quite possible for the business to be of such
a nature as not to require the employment of capital. It has
been held that a foreign corporation soliciting orders through
agents for transmission to an office outside the state, is not
employing capital within the state even though it leases a
New York office for the purpose of showing samples and
deposits money in a New York bank. People ex rel Smith
Co. v. Roberts, 27 App. Div. 455 (1898); People ex rel Kel-
logg v. Roberts, 30 App. Div. 150 (1898).

The annual privilege tax is computed on the amount of
capital employed within the state and the rate is determined
primarily by the dividends declared, exactly as in the case of
FOREIGN CORPORATIONS. 177

domestic companies. No distinction is made between divi-
dends earned within or without the state. The tax is regu-
lated by the dividends declared, wherever earned. Meat Co. v.
Roberts, 155 N. Y. 408 (1898). (See Chap. XIV, “State
Taxation.”)

§ 187. Local Taxation.

Foreign corporations are taxed for local purposes on their
real estate and on the capital employed within the state in the
same manner and under the same rules as domestic companies.
(Tax Law, § 7.) (See Chap. XV, ‘“‘Local Taxation.’’) Peo-
ple ex rel Yellow Pine Co. v. Barker, 23 App. Div. 524, Affd.
155 N. Y. 665 (1898). But see ‘City of New York v. Mc-
Lean, 170 N. Y. 374 (1902) for difficulty of enforcement in
certain cases. They are entitled to deduct from their capital
the amount of debts incurred in the purchase of New York
property but not general indebtedness. People ex rel Hecker
Milling Co. v. Barker, 147 N. Y. 31 (1895).

§ 188. Books Required to be Kept by Foreign Corporations.

Every foreign business corporation must keep at its prin-
cipal office in the state, or at the office of its local transfer
agent, a stock book in the form prescribed for domestic com-
panies. (S.C. L, § 33.) (See §§ 135, 136.) The stock
book must be open daily during business hours for the in-
spection of stockholders and judgment creditors and state offi-
cials authorized thereto. (S.C. L.,, §°33.) The New York
courts have no jurisdiction to grant a writ of mandamus against
a foreign corporation doing business in this state to compel it
to allow inspection of its books. Matter of Rappleye, 43 App.
Div. 84, Affd. 161 N. Y. 615 (1899); Matter of Mitchell v.
N.S. 0. & T. Co., 44 Misc. 514 (1904). The person entitled
to inspect such books and records must apply to the courts of
the corporation’s domicile. As an incident to an action either
in law or equity, a New York court may, however, undoubtedly
178 NEW YORK CORPORATIONS.

compel the production of the books and papers of a foreign cor-
poration, either by subpoena duces tecum or authorized judicial
order. Matter of Rappleye, supra. :

For any refusal to allow the prescribed inspection of the
stock book, the corporation and the officer or agent so refusing
shall each forfeit $250 to the person to whom such refusal was
made. (S.C. I, § 33.)

Demands and refusals on successive days render the officer
so refusing liable to but one penalty. Cox v. Paul, 175 N. Y.

328 (1903).

§ 189. Reports.

The same reports are required from foreign as from
domestic corporations. (See Chap. XVI, “Reports; also
Chap. XXV, ‘Forms of Reports.”) (S.C. L., § 34; Tax
Law, § 192.) A special report must be made by foreign cor-
porations at the end of the first year of business in the state as
a basis for determination of the license tax. (See § 185.) This
report must be made to the state comptroller, and is in practi-
cally the same form as the annual report made to the comptrol-
ler for the purposes of the privilege tax. (See Form 65.)
Blanks may be obtained, without cost, by application addressed
to “State Comptroller, Albany, New York.”

§ 190. Attachment Against.

An attachment may issue against the New York property
of a foreign corporation “however solvent it may be, and how-
ever great its ability to pay all claims against it on demand. It
is not within its power to prevent a creditor, or a fictitious
claimant even, from obtaining an attachment.” Robertson v.
Ongley Electric Co., 82 Hun 585, 588 (1894). (Code of
Civil Pro., §§ 635, 636.)
CHAPTER XVIII.
RECEIVERS OF CORPORATIONS.

(a) TEMPORARY AND PERMANENT RECEIVERS.

§ x91. Classification.

Receivers of corporations are divisible into two classes
with reference to their appointment and duties:
(1) Those appointed pendente lite as receivers of
the specific property subject to suit.
(2) Those appointed generally in actions involving
the dissolution or annulment of the corporation and the
sequestration and distribution of its assets.

§ 192. Jurisdiction of Court to Appoint.

Courts of equity have inherent power to appoint receivers
of the first class. Such receivers are mere custodians of speci-
fic property or administrative officers of the court acting at all
times directly under its orders. Decker v. Gardner, 124 N. Y.
334, 338 (1891). Their appointment does not affect the au-
thority of the directors to manage the corporation and all its
property not directly placed under the receiver’s control by the
court.

Also the New York statutes make specific provision for
the appointment of a receiver of property involved in a suit to
foreclose a mortgage where the mortgage debt, or the interest
thereon has remained unpaid for a period of thirty days or
more after it is due and after demand therefor has been made
upon the proper officers of the corporation and where either the
income of the property is specifically mortgaged or the property
itself is probably insufficient to pay the mortgage debt. (G. C.
L., § 306.)

179
180 NEW YORK CORPORATIONS.

This is but the statutory crystallization of the old equity
practice. Holland Trust Co. v. Consolidated Gas and Electric
Light Co., 85 Hun 454 (1895).

Jurisdiction to appoint receivers of the second class is
wholly statutory. Matter of Binghamton General Electric
Co., 143 N. Y. 261 (1894).

Section 306 of the General Corporation Law enumerates
the cases in which such a receiver may be appointed. These
are as follows:

(1) Inan action brought by the Attorney General or by
a stockholder or creditor to dissolve a corporation for one of
the causes prescribed in Section 101 of the General Corporation
Law.

(2) Inan action brought by the Attorney General to an-
nul a corporation brought pursuant to the provisions of Sec-
tion 131 of the General Corporation Law.

(3) In an action brought by a judgment creditor to se-
quester the property of the corporation as provided in Section
100 of the General Corporation Law.

(4) In an action brought by the Attorney General or by
a creditor, trustee, director, manager or other officer of the
corporation against corporate officers for misconduct as provid-
ed for in Article 5 of the General Corporation Law.

(5) Inan action brought by the Attorney General, or by
a stockholder, to preserve the assets of a corporation having no
officer empowered to hold the same.

(6) Ina special proceeding for the voluntary dissolu-
tion of a corporation.

§ 193. Qualification.

Before proceeding to the discharge of his duties, a receiv-
er must file a bond for such sum as has been fixed in the order
of appointment (G. C. L., § 234) and must file with the court
an oath that he will discharge his trust to the best of his skill
and understanding. (G.C.L., § 238.)
RECEIVERS OF CORPORATIONS. 181
(b) Powers anp DuTIES oF PERMANENT RECEIVERS.

§ 194. Notice to Creditors,

The first duty of a permanent receiver is to give notice to
creditors of his appointment. The statute provides that “im-
mediately upon their appointment” such receivers shall give
notice thereof by publication for three weeks in a newspaper
printed in the county where the principal office is located. (G.
C. L., § 250.) Publication once a week for three weeks satis-
fies this requirement. The notice must contain:

(1) Astatement of due appointment and qualification as
permanent receiver.

(2) A demand that all persons owing money to the cor-
poration account for and pay the same at a time and place speci-
fied in the notice.

(3) A notice to persons having in their possession prop-
erty of the corporation requiring delivery of the same to the
receiver on or before the date set for payment of debts due the
corporation.

(3) A notice to creditors to present and prove their
claims on or before a date not less than forty days from the
first publication of the notice.

(4) A notice to all persons holding open or subsisting
contracts to present the same in writing and in detail to the re-
ceiver at a time and place specified in the notice.

As a matter of convenience it is usual to select the same
date under each requirement making it as near the forty day
minimum as possible.

§ 195. Employment of Counsel.

Receivers may, and in practice almost invariably do, em-
ploy counsel. (G.C. L., § 242.) The statute provides that
within three months after qualification, a receiver must fix the
compensation of any attorneys employed by him. This must
be done by written contract approved by the Supreme Court
182 NEW YORK CORPORATIONS.

upon at least eight days’ notice to the Attorney General. The
term of employment must not exceed eighteen months, but may
be renewed from time to time for periods not exceeding one
year, if approved by the Supreme Court, upon eight days’ no-
tice to the Attorney General. (Id.) Compensation may be a
fixed sum or a proportion of the sums received and disbursed by
the receiver. Payments to counsel may be made only upon or-
der of the Supreme Court after notice to the Attorney General.
All payments are subject to adjustment upon the final account-
ing. (Id.)

§ 196. Collection of Assets. General.

As conservator of the corporate property, the most import-
ant duty resting upon the receiver after giving notice of his ap-
pointment is the assembling of corporate assets and their con-
version into money for ratable distribution among the creditors
and stockholders.

The statute provides that permanent receivers shall be
trustees of the corporate property (G. C. L., § 231) with all the
duties and obligations as to diligence and good faith in admin-
istration which is required of trustees generally.

Permanent receivers acquire title to the corporate property
by operation of law as of the date of their appointment. At-
torney General v. Atlantic Mutual Life Insurance Co., 100 N.
Y. 279 (1885). Section 233 of the General Corporation Law
provides that all real and personal property and all securities of
every kind and nature belonging to the corporation, no matter
where located, or by whom held, shall be transferred to, vested
in and held by the receiver when such transfer is directed by
the Supreme Court upon due notice of application for such
an order to the Attorney General and the custodian of the
funds, securities or property. No formal transfer is necessary
as the order itself effects change of title. Attorney General v.
Atlantic Mutual Life Insurance Co., supra.

The powers and duties of receivers in the matter of col-
lection of assets may be summarized as follows:
RECEIVERS OF CORPORATIONS, I 83

§ 197. Collection of Assets. From Debtors.

The statutory duty rests upon debtors of the corporation
to account and answer for their indebtedness on or before the
date fixed by the receiver in his notice of appointment. (G. CC.
L., § 251.) The penalty for making a false account is the for-
feiture of double the amount of the debt, recoverable by suit
instituted by the receiver upon discovering the facts. (G. C.
L., § 252.)

In the event of dispute as to the amount due it is optional
with the receiver to submit the matter to arbitration or to
proceed by action in the courts in the regular way. If he de-
cides to arbitrate, the statutory procedure is as follows:

One or more impartial arbitrators may be agreed upon by
written stipulation entered into between the receiver and the
debtor. Upon filing this stipulation with the clerk of the
Supreme Court in the county where the receiver resides a
formal order of appointment will be issued designating the
arbitrator selected by the parties. Such an arbitrator has the
same powers and is subject to like duties and obligations and
receives the same compensation as referees appointed by the
Supreme Court in personal actions pending therein. He may
issue commissions to take testimony of witnesses outside the
county where the receiver resided at the time of his appoint-
ment. The arbitrator’s report should be filed in the same office
where the order appointing him was entered and is conclusive
of the rights of the parties unless set aside by the court. (G.
C. L., § 241.)

In the event of failure to agree upon an arbitrator, provid-
ed no action is pending for the recovery of the debt, either party
may apply to the Supreme Court for the appointment of arbi-
trators. Ten days’ notice of motion must be given the adverse
party, designating a judge residing in the same judicial district
as the receiver to hear the application at chambers. The judge
hearing the application may select one or more arbitrators in
his discretion, designating his choice in a certificate delivered
184 NEW YORK CORPORATIONS.

to the receiver. It is the latter’s duty to file the certificate with
the clerk of the court. A formal order of appointment will
thereupon be issued as in the case where selection has been
made by agreement.

Receivers are empowered to sue for debts due the corpora-
tion in the same manner and with like effect as might the
corporation itself had the receiver not been appointed. (G. C.
L., § 239.) Such suits have preference upon the calendars of
all courts next in order to actions or proceedings brought by
the people of the State of New York. (G.C.L., § 316.) It
is not necessary to delay bringing suit until after the day fixed
by the notice calling upon debtors to account.

The specific duty is imposed upon the receiver to immedi-
ately collect unpaid stock subscriptions, bringing suit if neces-
sary. He need not sue if the debtor is “wholly insolvent.”
(G. C. L., § 244.) The consent of creditors is not necessary
to such an action. (Id.) This provision was inserted in the
statute in view of the rights given to creditors under Section 56
of the Stock Corporation Law.

§ 198. -Collection of Assets. From Persons Holding Corpor-
ate Property.

If the receiver has. reason to believe that property belong-
ing to the corporation has not been turned over to him, he may
secure from the Supreme Court an order for the examination
of the person he suspects of withholding the property or of any
person who may reasonably be expected to be able to testify
concerning it. (G,C. L., § 240.) Such an order may be
made at special term held within the judicial district in which
the receiver was appointed, upon his verified petition setting
forth the facts, either with or without notice to the party to
be affected. If it appears to the court either by the receiver’s
petition or affidavit or by other competent proof that a proper
case is presented, an order will be granted for the examina-
tion of the necessary witnesses either before the court or before
RECEIVERS OF CORPORATIONS. 185

a referee appointed for the purpose. The order usually contains
an injunction preventing the disposition of the property in dis-
pute until further order of the court. (Id.)

Witnesses examined under such an order are entitled to
the same fees and are subject to the same penalties for failure
to appear and testify as are witnesses in the Supreme Court
generally. They may be represented by counsel and are privi-
leged from prosecution upon the facts disclosed by their testi-
mony. They may make any voluntary statement in their own
behalf concerning the subject of the examination which may
seem to them desirable or pertinent. The examination is con-
ducted in all respects as a trial, the judge or referee having
power to order adjournments and to rule upon questions and
objections precisely as a trial judge. (Id.)

The testimony, signed and sworn to by the various wit-
nesses, must be filed in the office of the clerk of the county in
which the receiver was appointed. The court may make such
orders as the testimony seems to require. (G.C. L., § 240.)

Specific provision is made by statute for the securing by
the receiver of corporate property held by a sheriff under at-
tachment. Upon payment to the latter of his fees the receiver
becomes entitled to the property or to any money held by the
sheriff as the result of the sale of attached property. (G. C.
L., § 239, subdiv. 3.)

§ 199. Collection of Assets. From Mortgagees and Pledgees.

The statute provides for the redemption of mortgages and
conditional contracts and pledges of personal property in cases
where it appears to the receiver to be for the best interests of
the estate that it should be done. (G. C. L., § 239, subdiv. 7.)
It is usual to secure express directions from the court before
acting in such matters.

§ 200. Conversion of Estate into Money.

It is the duty of the receiver to convert all of the property
of the corporation, both real and personal, into money as
186 NEW YORK CORPORATIONS.

speedily as possible. (G.C.L., § 245.) Sales may either be
private or at public auction. If at auction, at least fourteen
days’ public notice of the time and place of sale must be given
and published for two weeks in a newspaper printed in the
county where the sale is to be held. (G. C. L., § 239, subdiv.
4.) Private sales may be made only by express authorization
of the court which appointed the receiver and upon terms and
conditions approved by it. Notice of application for such an
order must be given to the Attorney General and to such other
parties as may be entitled to notice of motions in the action or
proceeding in which the receiver was appointed. (G.C.L,
§ 246.) Property may be sold subject to existing mortgages,
contracts, pledges or judgments. (G.C.L., § 239, subdiv. 7.)
Three-quarters of the purchase price may be left on mortgage,
secured by the bond of the purchaser, if the receiver considers
such credit necessary. (G.C. L., § 239, subdiv. 5.)

§ 201. Care of Funds. Accounts.

Orders appointing receivers of corporations must designate
one or more places of deposit where all funds not required for
immediate disbursement must be kept. No deposits may be
made elsewhere, nor may any portion of the money be invested
except by express order of the court made upon due notice to
the Attorney General. (G.C.L., § 313.)

Receivers must keep regular account of all money received
to which every creditor or other person interested in the estate
shall have access at all reasonable times. (G. C. L., § 247.)

§ 202. Distributior! of Assets.

(a) Creditors’ Meetings. Within four months from the
date of his appointment the receiver must call a general meet-
ing of creditors by publication of notice at least once a week un-
til the date set for the meeting in a newspaper within the coun-
ty where the principal office of the corporation is located. The
notice must designate the place of meeting and the date thereof,
RECEIVERS OF CORPORATIONS. 187

which must be not less than two nor more than three months
after the first publication of notice. The purpose of the meet-
ing is to ascertain the outstanding liabilities, adjust contracts
and give the creditors an opportunity to discuss the general situ-
ation with the receiver. (G.C.L., § 253.)

In view of the great desirability of making the meeting
representative, it is good practice for a receiver to apply to the
court as soon as possible after his appointment for an order re-
quiring all creditors to exhibit and prove their claims. It is
within the power of the court to grant such an order at any
time, either before or after final judgment, directing the proof
of claims within a period not less than six months from the
first publication of the order under penalty of exclusion from
the benefits of the judgment and distribution. Publication
must be made as directed in the order. (G.C. L., § 303.) If
such an order is obtained promptly, it is usually possible to
make the date of the creditors’ meeting and the time limit for
the proof of claims simultaneous. Meetings may be adjourn-
ed, in which case it is good practice, though not required by
statute, to publish notice of adjournment in the same manner
as notice of the original meeting. At each meeting the receiver
must present an account of all money in his hands. (G.C.L,
§ 254.)

(b) Proof of Claims. Proof of claims is usually made
by affidavit filed with the receiver. Persons failing to prove
their claims within the time limited by the order of the court,
may, at any time before final distribution, file their proofs, pro-
vided they show by affidavit or otherwise that they had no
knowledge of the order in time to comply with its requirements.
(G, G. L,; $ 363.)

(c) Order of Distribution. As soon as the debts have
been ascertained and the assets are in condition to distribute,
an order should be obtained from the court directing distribu-
tion in the following order of priority:

(1) Expenses of the receivership. (G.C.L., § 255.)
188 NEW YORK CORPORATIONS.

(2) Debts due to the United States and all debts entitled
to preference under the laws of the United States.

(3) Judgments.

(4) All other debts pro rata without preference to debts
due upon specialties.(G. C. L., § 261.)

Debts not due at the time of distribution must be rebated
at six per cent. to the due date and paid. (G.C. L, § 258.)

It is not necessary to distribute all the assets in one divi-
dend. The receiver may retain sufficient funds to meet possible
contingencies, as for example possible adverse judgments in
pending actions. (G. C. L., § 257.) If any assets remain
after the first dividend, a second and final dividend must be de-
clared within one year thereafter. Notice that a final dividend
is to be declared must be published once a week for three weeks
in a newspaper printed in the county where the principal office
of the corporation was situated. (G. C. L., § 263.) The
same order of distribution applies to the second as to the first
dividend, except that creditors who have filed proofs of debt but
too late to receive their proportionate share of the first dividend,
are entitled to receive what they would have had from that
dividend before distribution is made to other creditors. (G.
C. L., § 262.)

After the second dividend the receiver is not liable to any
creditor who failed to present a detailed written claim on or
before the date therefor fixed in the notice of the second divi-
dend. (G.C.L, § 267.) Any surplus remaining after the
second dividend must be distributed ratably among the stock-
holders of the corporation. (G.C. L., § 264.) If dividends
are unclaimed for one year they must be distributed among
the other creditors, and, as to any surplus, among the stock-
holders. (G.C.L, § 266.)

§ 203. Fees of Receivers,

Receivers are entitled to receive their necessary expenses
and in addition an amount allowed by the court in its discretion
as follows:
RECEIVERS OF CORPORATIONS. 189

(a) In Voluntary Dissolution. Upon the first $20,000,
not exceeding five per centum; upon the next $80,000, not ex-
ceeding two and one-half per centum; on the remainder, not
exceeding one per centum. The court may, however, in case
the receiver’s fees so computed do not amount to $100, allow a
minimum fee not exceeding $100 irrespective of assets. (G.
C.L., § 277.)

(b) In Other Receiversmps. Not exceeding two and
one-half per centum upon the sums received and disbursed, but,
save on final account, not more than $12,000 per annum or
ratably for a less period. Upon the final accounting, an ad-
ditional allowance of two and one-half per centum may be
granted by the court in its discretion. (G. C. L., § 278.)

§ 204. Final Accounting.

A receiver may be compelled to account at any time by the
court which appointed him. (G. C. L., § 276.) In receiver-
ships of business corporations there is usually but one account-
ing. The statute provides that within one year after qualify-
ing, the receiver must apply for a final settlement of his ac-
counts and an order for distribution, or otherwise shall apply
for an order extending his time to account. (G. C. L., § 268.)
In case of failure to account within one year, the Attorney Gen-
eral or any creditor may obtain an order requiring the receiver
to show cause why an account and distribution should not be
made. After the expiration of eighteen months it is the duty
of the Attorney General to apply for such an order. (Id.)
Notice of final accounting must be published once a week for
three weeks in a newspaper published in the county where the
principal office of the corporation was situated, specifying the
time and place where the accounting will be rendered. (G. C.
L., § 269.) The court may order a reference for examination
of the account (G. C. L., § 271) and enter a final order of dis-
tribution conclusive upon all creditors and stockholders. (G.
C.L., § 270.) Supplementary accountings must be made of all
190 NEW YORK CORPORATIONS.

moneys not distributed by the final account. (G. C. L,, §
272.)

§ 205. Resignation and Removal of Receivers.

If a receiver desires to resign his trust he must follow the
procedure prescribed in detail in G. C. L., § 275.

The court may remove receivers at any time, with or
without cause, either upon its own initiative or upon petition of
any person interested in the estate. (G.C. L., § 273.) The
Attorney General may petition for the removal of a receiver
to facilitate the closing of anestate. (G.C.L., § 311.) Va-
cancies created by death, removal or otherwise may be filled by
the court. (G.C.L., § 274.)
PART II—FORMS AND PRECEDENTS.

CHAPTER XIX.
SUBSCRIPTION LISTS AND RECEIPTS.

(a) Susscription Lists.

Form 1.—Subscription List.

Supscription List.
THE VERASCOPE CAMERA COMPANY.

To be Incorporated under the Laws of New York.

Capital Stock, $25,000. Shares, $100 each.

 

We, the undersigned, hereby subscribe for the number of shares of the
Capital Stock of The Verascope Camera Company set opposite our re-
spective names, and agree to pay the par value thereof in cash on demand
of the Treasurer of the Company, so soon as said Company is organized.

Troy, New York, March 15, 1909.

 

 

 

 

NAMES ADDRESSES SHARES AMOUNT
David B. Ewbank........./ Troy, New York ........ 15 $1.500 co
Henry Brown............6+« Syracuse, New York.... Io 1,000 0O

 

 

(See §§ 81, 89.)
This is a common form of subscription list. It is simple,
but sufficient where the purposes and conditions of the sub-
scription are well understood. Subscriptions under it are,
however, mere promises without consideration, revocable at
will by the subscribers until the organization of the company.
To avoid this element of uncertainty, subscription lists are
IgI
192 NEW YORK CORPORATIONS.

sometimes drawn with a trustee acting for the corporation, as
in the following form, so that subscriptions are binding from
the time they are made.

Form 2.—Subscription List. Trustee’s.

Susscription List.

HARTFORD CEMENT COMPANY.

To be Incorporated under the Laws of the State of New York for the

Manufacture of Portland Cement.

Capital Stock, $500,000. Shares, $100 each.

We, the undersigned, hereby agree with William M. Barclay, as Trus-
tee for the Hartford Cement Company, to subscribe for the number of
shares of the Capital Stock of said Company set opposite our respective sig-
natures, and agree to pay the par value thereof as follows:

Five per cent. of subscription on demand to William M. Barclay, as
Trustee for the said Company, such payment, or so much thereof as may
be necessary, to be used for the preliminary and incorporating expenses of
said Company; thirty per cent. of subscription to the Treasurer of the
Company ten days after the incorporation thereof, and the remainder of
subscription at such times and in such instalments as may be prescribed by
the Board of Directors.

New York, April 2, 1909.

 

 

NAMES | ADDRESSES | SHARES | AMOUNT

 

Henry C. Allen........... | 170 Broadway, N. Y ...... | 35 | $3,5v0 00

Frequently subscription agreements provide that sub-
scriptions are not effective unless a certain specified amount is
secured. In this case the subscribers, if not restrained by the
terms or form of the agreement, may cancel their subscriptions
at any time before the required amount has been subscribed.
SUBSCRIPTION LISTS AND RECEIPTS. 193

Form 3.—Subscription Agreement. Conditional.

SUBSCRIPTION AGREEMENT.
THE HARVARD STEAMSHIP COMPANY.

A Corporation to be Organized under the Laws of the State of New York
for the Operation of a Steamship Line between New York
City, New Orleans and Intermediate Points.

Capital Stock........... $10,000,000,
Common Stock. . .$7,000,000.
Preferred Stock. .$3,000,000.
Shares....$100 each.

We, the undersigned, hereby agree with John H. Leigh and Howard
P. Moran, as Trustees for the incorporation of The Harvard Steamship
Company, to subscribe and do hereby severally subscribe for the number
of shares of the Six Per Cent., Cumulative Preferred Stock of said Com-
pany set opposite our respective signatures, and agree to pay the value
thereof as follows: ‘Twenty-five Per Cent. (25%) of the amount of our
respective subscriptions ninety days after the organization of said Com-
pany; Twenty-five Per Cent. (25%) ninety days after the date of said
first payment, and the balance at such times and in such amounts as may
be required by the Board of Directors of said Company.

The subscriptions of this agreement are conditioned as follows:

Ist, That bona fide subscriptions hereunder to the amount of Five
Hundred Thousand Dollars ($500,000) shall have been secured on or be-
fcre the 1st day of June, 1909.

2d. That the complete organization of the Company shall have
been effected on or before the 1st day of July, 1909.

And in case of the failure of either of these conditions, the subscrip-
tions hereunder are to be null, void and of no effect.

It is further understood and agreed and is a condition of the sub-
scriptions hereunder, that for each share of Preferred Stock hereby sub-
scribed for, and paid for in accordance with the terms of subscription, the
subscriber is to receive as a bonus and without further payment, one share
of the full-paid and non-assessable Common Stock of the said Company.

For the purposes of this agreement, the 1st day of July, 1909, shall
be considered the date of organization of said Company, provided its or-
ganization has been effected on or before that date.

It is agreed that this instrument may be executed in separate instru-
ments with the same force and effect and individual obligation as if all the
signatures thereto were affixed to a single instrument.

New York City, February 1, 1909.

 

 

DATE NAMES ADDRESSES SHARES AMOUNT

 

 

 

 

Sept. 5... |Schuyler H. Wilson...|Morristown, N.J...} 500 $5,000

 
194 NEW YORK CORPORATIONS.

When subscriptions are solicited widely, or from parties
at a distance, an individual subscription blank is usually em-
ployed and is mailed to the particular person with such state-
ments and prospectuses as may be necessary. A common form
of individual blank follows. In Form 5 is given the usual
blank employed after organization.

Form 4.—Subscription Blank. Individual.

Cy

THE NEW PROCESS RUBBER COMPANY,
60 Liberty St. New York.

To be Incorporated under the Laws of New York.
Capital Stock, $500,000. Shares, $100 each.

I hereby subscribe for Twenty (20) shares of the Capital Stock of
The New Process Rubber Company at the par value thereof, and agree
to pay fifty per cent. of such subscription on demand of the Treasurer so
soon as said Company is incorporated; the remainder to be paid at such
times and in such amounts, not exceeding ten per cent. of said subscrip-
tion in any one month, as may be prescribed by the Board of Directors.

Unless one-half of the capital stock of said Company is reliably sub-
scribed by the thirtieth day of January, 1909, and the Company incorporated
within thirty days thereafter, this subscription shall be void and of no
effect.

Dated January 2, 1909.

Howarp McL£an,
16 Woodlawn St.,
Arlington Heights, Mass.

‘THE ST. JOHN PLACER MINING COMPANY,
6 Wall St., New York.

Capital Stock, $1,000,000. Shares, $10 each.

Enclosed find certified check for............ in payment for........
Shares of the full-paid, non-assessable stock of the St. John Placer Min-
ing Company.
SUBSCRIPTION LISTS AND RECEIPTS. 195

 

Make checks payable to order of the Company. The right is re-
served to reject or pro rate subscriptions. Give full name of party to
whom stock is to be issued.

In New York any subscription after organization, pay-
able in money, must be accompanied by at least ten per cent.
of its amount. (S.C. L, § 53.) (See § 81.)

(b) RECEIPTS FOR SUBSCRIPTION PAYMENTS.

When a subscription to stock is paid in full, certificates
are usually issued to the subscriber at once and serve as a re-
ceipt for his payment. When, however, payment is made be-
fore the organization of a company, or is not in full, or the
permanent stock certificates are not ready for delivery, receipts
must be given, the form depending upon the conditions.

When payments on subscriptions are to be made before
incorporation, the trustees named in and made parties to the
subscription agreement are usually authorized to receive such
payments. If not, a trustee may be selected later by action or
consent of the subscribers. After incorporation, payments on
subscriptions are made to the treasurer of the company, and
if payments are partial, or certificates are not ready for de-
livery, receipts are isstied, sometimes signed by the treasurer
alone, but at other times signed by the president as well. (See
Forms 7, 9, 10.)

Subscription receipts are printed or otherwise prepared,
with blanks for the variable data, such as name of subscriber,
number of shares, amount of payment, etc., to be filled in as
each receipt is issued. The same data, entered on the stub of
the receipt, gives a record of the transaction. Receipt and
NEW YORK CORPORATIONS.

196

 

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‘ydiad9y S,d0}SNIL—9 WIOY
197

SUBSCRIPTION LISTS AND RECEIPTS.

 

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198 NEW YORK CORPORATIONS.

stub are usually, as a matter of convenience, bound in book
form.

The trustee’s receipt given in Form 6 will be found con-
venient. It is but seldom that more than one subscription pay-
ment is made before the organization of a corporation, but, if
so, a second receipt is usually issued.

A convenient instalment certificate is shown in Form 7.
Occasionally the stubs of instalment certificates are provided
with a receipt blank similar to that of the stock certificate stub
(see Form 12), to be signed by the party receiving the scrip.
As the scrip is itself a receipt for money paid in, the secondary
receipt is hardly necessary. The receipt for a stock certificate
is of a different nature, as the stock certificate, save on original
issue, is not a receipt for money or value received.

When instalment scrip is issued subsequent payments are
conveniently endorsed on the back of the receipt or certificate
if the conditions permit. In such case the ruling shown in
Form 8 should appear on the back of the scrip.

Form 8.—Endorsement of Instalment Payments.

 

 

 

 

 

are INSTALMENTS SIGNATURE OF

PAID TREASURER
Marcel £, 190Qsiitsscsssinevancsseetevesaisy: $500 Frank Howard
APril L, W900 cssetsessecsasveweesee aoa eas 500 Frank Howard

A sufficient number of lines should be allowed for the pre-
scribed number of*instalment payments. As payments are
made, each one is entered and is verified by the signature of the
treasurer in the last column. When this plan is followed, the
stubs of the certificates should also have rulings to permit the
entries of the date and amount of these subsequent payments.
Both certificate and stub will then show a complete record of
payments made.
SUBSCRIPTION LISTS AND RECEIPTS. 199

When full payment has been made of stock subscriptions
and permanent certificates are not ready for delivery, tempor-
ary certificates are usually issued. (See Form ro.) If a less
formal instrument is preferred, the following interim receipt
will be found convenient. This has the usual stub—not shown
in the form—and may be signed by the president as well as
the treasurer if desired.

Form 9.—Interim Receipt.

No. 85. Shares, 5.
‘TREASURER’S RECEIPT.
WILLIS COAL COMPANY.
146 Broadway, New York.

Capital Stock, $500,000. Shares, $100 each.

$500.00.

This is to certify that John G. Williams has paid into the treasury
of the Willis Coal Company the sum of Five Hundred Dollars in full
payment for Five Shares of its Common Stock, duly executed certificates
for which will be issued to his order upon surrender of this receipt, so
soon as said certificates are ready for delivery.

RocER STEVENSON,
New York City, February 20, 1909. Treasurer.

The interim certificate is obviously inconvenient if any
considerable interval of time is to elapse before the issue of
permanent certificates, and in such cases the temporary cer-
tificate, which may be assigned and reissued with all the ease
and convenience of the ordinary stock certificate, is to be pre-
ferred.

Temporary certificates of stock when issued are in the
general form of the permanent certificate, but reference is made
in the body of the instrument to its temporary character, and
the certificate itself is usually printed or otherwise prepared
at a small cost in keeping with its temporary nature.
NEW YORK CORPORATIONS.

200

 

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CHAPTER XX,
STOCK CERTIFICATES AND STOCK BOOKS.

“The stock of every stock corporation shall be repre-
sented by certificates prepared by the directors and signed by
the president or vice-president and secretary or treasurer and
sealed with the seal of the corporation.” (S.C. L., § 50.)
The adoption of a form of certificate by the board of directors
satisfies the requirement that certificates shall be “prepared by
the directors.” The signing officers are, within the statutory
limitations, usually prescribed by the by-laws.

Form 11.—Stock Certificate. Common.

No. 25. 20 Shares.
Incorporated under the Laws of
the State of New York.

HOLWEIN MANUFACTURING COMPANY.
Capital Stock, $50,000,

 

Full-paid and Non-assessable,

Turis 1s To Certiry that Roger P. Sherman is the owner of Twenty
Shares of the Capital Stock of the Holwein Manufacturing Company, trans-
ferable only on the books of the Company by the said owner thereof in
person or by duly authorized attorney, upon surrender of this Certificate
properly endorsed.

CORPORATE Witness the Seal of the Company and the signatures of
{ SEAL. its duly authorized officers this tenth day of April,
1909.
James P. Harris, Henry E. McPuerson,
Treasurer. President.

Shares, $100 each.

Pe

(For stub, see Form 12.) (S.C. L., § 50.) (See § 82.)

201
NEW YORK CORPORATIONS.

202

(94 § 998)

 

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‘ayeOYTVIID YIO}GS— "ZI ULIO
STOCK CERTIFICATES AND STOCK BOOKS. 203

Stock certificates are numbered consecutively and are is-
sued in the order of their numbers,—not as a matter of legal
obligation, but merely of convenience. When preferred stock
is issued, its certificates are also numbered from one up and
are usually bound in a separate volume. Sometimes when only
a few preferred certificates are required, they are bound up with
the certificates of common stock. In such case they form a
separate division of the book, the numbering of each kind of
certificate being entirely separate and distinct.

If nothing appears on the face of a stock certificate to the
contrary, it represents common stock. If the company issues
preferred stock, this fact should be indicated on both the com-
mon and preferred stock certificates, and the kind of stock rep-
resented by the particular certificate should appear unmistak-
ably on its face. Usually the term “Common Stock” or “Pre-
ferred Stock,” as the case may be, is stamped, printed or litho-
graphed prominently across the face of each certificate.

The receipt on the stub of a stock certificate is signed by
the party to whom the certificate is delivered. When sent to
parties at a distance, certificates should either be sent by regis-
tered mail or by express, in this latter case accompanied by a
receipt to be signed before the certificate is delivered. In
either case the receipt which is returned is pasted on the proper
stub in the stock certificate book.

The conditions under which preferred stock is issued
should appear upon the face of the certificate as in Form 12.
If the conditions are too lengthy for this, they may be omitted
and reference be made to the charter or by-law provision by
which preferred stock is created and in which its conditions are
set forth. Thus, in such case, paragraphs 2, 3 and 4 of Form
12 would be omitted and their place be taken by a new para-
graph, stating:

“Said stock is part of an issue of Twenty Thousand

Dollars ($20,000) par value of Preferred Stock, author-

ized by the certificate of incorporation of said Company
204 NEW YORK CORPORATIONS.

as filed in the office of the Secretary of State of New
York on the 15th day of March, 1909, and is issued un-
der the terms and conditions therein set forth.”

Form 13.—Assignment of Stock Certificate. In Blank.

i

For Value Received,...... hereby sell, assign and transfer unto......
aaa ateneelcetaqebene decte WIGS dBi Rie Caamie Dep GNO UNS.” seahunnae is te wie: BleittemeNN Meg Shares
of the Capital Stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint............ cece e cece eect e ee eens
my Attorney to transfer the said stock on the books of the within-named
Company, with full power of substitution in the premises.

Harotp CHALMER.

In presence of
Jere H. McLarn.

(See § 87.)

This form of assignment appears upon the back of the
stock certificate. It is the only form in common use. The
signature, when a transfer is to be made, must correspond ex-
actly with the name upon the face of the certificate.

When the assignment is executed in blank as above the
certificate may pass from hand to hand without change. In
such case the equitable title follows the certificate until the
name of some transferee is filled in as in the form below.

Form 14.—Assignment of Stock Certificate. Complete.

a cd

For Value Received, I hereby sell, assign and transfer unto Wilson
Montgomery, of New York City, Twenty-five (25) Shares of the Capital
Stock represented by the within Certificate, and do hereby irrevocably
constitute and appoint Samuel H. Colesworth, my Attorney, to transfer
the said stock on the books of the within-named Company, with full power
of substitution in the premises,

. Harotp CHALMER.
Dated April 10, 1909.

In presence of
Jere H. McLain.
STOCK CERTIFICATES AND STOCK BOOKS. 205

When this assignment is completed the name of the sec-
retary of the company is usually inserted as the attorney who
is to make the transfer on the books of the company, though
any other suitable person might be named instead.

Form 15.—Indemnity Bond. Lost Certificate.

InpEMNity Bonn.

 

Know Att Men By Tuesé Presents, That we, Willis B. Marcellus,
of Yonkers, New York, as principal, and Henry White, of New York City,
as surety, are held and firmly bound unto the Industrial Development Com-
pany of New York, a corporation duly organized under the laws of the
State of New York, its successors and assigns, in the sum of Five Thou-
sand Dollars ($5,000), to the payment of which to the said corporation,
its successors and assigns, we do, by these presents, jointly and severally,
firmly bind ourselves, our heirs, executors and administrators.

Signed and sealed this twenty-fifth day of January, 1909.

The condition of the above obligation is that:

Wuereas, The said Willis B. Marcellus, the owner of record of twenty-
five (25) shares of the capital stock of the said Industrial Development
Company of New York, of the par value of $100 each, has made applica-
tion to the Board of Directors of the said Company for the issue to him of
a new certificate for the said twenty-five shares of stock, alleging that the
original certificate, No. 274, issued to him therefor on the twenty-first day
of July, 1908, is lost, stolen or destroyed, and that its present whereabouts
and condition are unknown to him; and

Wuereas, The said application has been granted, and the said new
certificate for twenty-five shares of the stock of the Industrial Development
Company of New York, pursuant to due and formal resolution of the
eld Board of Directors, was this day issued to the said Willis B. Mar-
cellus ;

Now, THEREFORE, If the said Willis B. Marcellus, his heirs, executors
or administrators, or any of them, do and shall, from time to time, and
at all times hereafter, save, defend, keep harmless and indemnify the said
Industrial Development Company of New York, its legal successors and
assigns, of, from and against, all demands, claims or causes of action, aris-
ing from or on account of said certificate No. 274 for twenty-five shares
of the capital stock of the said Industrial Development Company of New
York, and of and from all costs, damages and expenses that shall or may
arise therefrom, and shall also deliver, or cause to be delivered up, to the
said Industrial Development Company of New York the said missing certifi-
cate No, 274 for cancellation, whenever and so soon as the same shall be
found, then this obligation shall be void; otherwise to remain in full force
and effect.

Wits B. Marcetzus. [L. s.]
Henry WHirt. [u. s.]
Signed, sealed and delivered
in the presence of
HERMAN FRANZ.
ALiis V. SHERMAN.

(See § 83.)
206 NEW YORK CORPORATIONS.

The following form of transfer book is usually employed
by the smaller corporations when a transfer book is kept.

Form 16.—Transfer Book.

Ledger Folio 86. Transfer No. 224,
THE HARTLEY METAL CARTRIDGE COMPANY.

 

For Value Received, I hereby sell, assign and transfer to John W.
Markham, of New York City, Seventy-five (75) Shares of the Capital
Stock of the above-mentioned Company, now standing in my name on
the Company books and represented by surrendered certificates, Nos. 125
and 126.

Witness my hand and seal this fifteenth day of February, 1900.

Howarp ALTMAN, [L. s.]
By Henry Gotpine,
Attorney.
New Certificates, Nos. 334, 335. *
Issued to John W. Markham.
Ledger Folio 109.
(See § 135.)

This transfer remains in the transfer book, and, together
with the assignment on the back of the surrendered certificate,
is the secretary’s authority for the issue of the new certificates
required. The stub frequently provided in transfer books of
this kind is merely a duplication of details already incorporated
in the transfer and may well be omitted or disregarded.

The signature to the assignment of the transfer book is
sometimes witnessed, but as this transfer is usually signed by
the secretary or the transfer agent, or in the presence of the
secretary, and as it is merely supplementary to the ordinary
duly witnessed assignment on the back of the surrendered
certificate, this second witnessing is generally regarded as su-
perfluous and is omitted.

Another form of transfer book, used by the larger corpor-
ations, is given in Form 17. This shows the upper portion of
the page. The blanket assignment at top enables the record
of each transfer to be made on a single line. In the entries
207

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208 NEW YORK CORPORATIONS.

shown, the second transferrer has surrendered a single certifi-
cate for seventy-five shares which is to be issued to two differ-
ent parties. Two partial entries as shown are therefore neces-
sary. If a single party surrenders several certificates to make
up the total number of shares to be transferred, each certificate
might be entered on a separate line, or if not too numerous, the
certificate numbers and amounts might be interlined so that
the entire transaction would occupy but a single line of the
record.

The transfer book is not required by the New York
statutes, and, while the larger corporations keep it as a con-
venient form of record, it is frequently omitted from the
books kept by the smaller corporations.

The stock book and the stock ledger are practically one
and the same book. In practice the stock ledger under its
own name, or under the title “Stock Book and Stock Ledger,”
is so arranged as to contain all matters that would properly
be entered in a stock book or a stock ledger. (See § 136.)

The New York law is peremptory in regard to the keep-
ing of the stock book. Heavy penalties are prescribed for
failure so to do, and it is further provided that no transfer
of stock shall be valid as against the corporation, its stock-
holders and creditors, except to render the transferee subject
to the statutory liabilities of a stockholder, until the transfer
has been duly entered in the stock book.

The forms of stock book and stock ledger which follow
comply with the requirements of the statutes and will be found
convenient and effgctive.

The leaves of both these books are indexed to secure the
requisite alphabetical arrangement, and the name and address
of the stockholders appear at the head of the pages as in an or-
dinary ledger.

In Form 18 the date appears in the first column. In the
second column, if stock is purchased, is entered the name of
the stockholder from whom the stock is transferred, but, if
STOCK CERTIFICATES AND STOCK BOOKS. 209

stock is sold, the name of the party to whom the certificate is
issued. The third column—‘‘Amount Paid Thereon”—has no
reference to the amount paid for the stock by the party pur-
chasing, save in case of original issue. It is merely intended
to show the amount originally received by the corporation on
the stock transferred, thereby indicating the amount, if any,
still due to the corporation. The record of this column is of
little or no value and it is included in the present form merely
in compliance with the New York statutory requirements.

The fourth column shows the number of the stock cer-
tificate issued to the party when he acquires stock; the fifth
column the numbers of the certificates surrendered by him
when he disposes of stock. If he sells but a portion of the
stock represented by a certificate—as in the third entry of the
form given—the number of the new certificate issued to him
to represent the balance of the unsold stock is entered in the
fifth column.

In the sixth column is entered the number of shares dis-
posed of when sales are made, and in the seventh column the
number of shares acquired when stock is purchased. These
last two columns constitute the stock ledger proper, and the
amount of stock belonging to the party with whom the account
is kept may be found at any time by taking the difference be-
tween the footings of these columns.

Form 19g is in the usual form of a ledger account. On
the right-hand side of the page the party is credited with the
stock he purchases or otherwise acquires, and on the left-hand
side is debited with any stock disposed of. The difference be-
tween the two sides shows at any time the amount of stock
standing to his credit.

On the debit or sales side of the account, the first column
gives the date of the transaction, the second the name of the
party to whom the stock is transferred, the third the number
of the surrendered certificate, the fourth the number of the cer-
tificate reissued to the transferrer in case but a portion of the
NEW YORK CORPORATIONS.

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STOCK CERTIFICATES AND STOCK BOOKS. 2II

stock represented by the surrendered certificate is sold, and
the fifth column the number of shares disposed of.

On the credit side, the first column gives the date of ac-
quisition, the second the name of the party from whom it is
obtained, the third the character of the stock, whether full-
paid or but part-paid, and, if the latter, the amount that has
been paid the company thereon, the fourth column the number
of the certificates issued to the party, and the last the number
of shares acquired.
CHAPTER XXI.
CHARTER AND BY-LAW FORMS.

(a) CHarTER Forms.

“Three or more persons may become a stock corporation
for any lawful business purpose or purposes * * * by
making, signing, acknowledging and filing a certificate * *
oe ED, Cd, 8 8)

The subscribers to a certificate of incorporation must be
natural persons of full age, at least two-thirds of them must
be citizens of the United States, and one of them a resident of
New York. (G.C.L,, § 4.)

“The certificate of incorporation of any corporation may
contain any provision for the regulation of the business and
the conduct of the affairs of the corporation, and any limita-
tion upon its powers, or upon the powers of its directors and
stockholders, which does not exempt them from the perform-
ance of any obligation or the performance of any duty im-
posed by law.” (G.C.L., § 10.)

Form 20.—Certificate of Incorporation. Usual Form.

CERTIFICATE OF INCORPORATION
of
HALLIMAN DRUG COMPANY.

 

We, the undersigned, all being of full age and two-thirds being citizens
of the United States, and one of us a resident of the State of New York,
for the purpose of forming a corporation under the Business Corporations
Law of the State of New York, do hereby certify and set forth:

212
CHARTER AND BY-LAW FORMS. 213

First—-The name of said corporation shall be
“HattimMaAN Druc Company.”

Second.—The purposes for which said corporation is to be formed are
as follows:

(a) To prepare, compound, manufacture, buy, sell, import, ex-
port and generally deal in and with drugs, medicines, chemicals, pro-
prietary articles, druggists’, physicians’ and hospital supplies and all
rer of pharmaceutical, chemical and medicinal preparations and ma-
terials.

(b) ‘To conduct and carry on in all its branches the business of
chemists, druggists and manufacturers and dealers in medical, chemi-
cal, pharmaceutical and other compounds, preparations and materials
and in all supplies, devices, machinery, apparatus and implements used
with or in connection with such business.

(c) To apply for, obtain, purchase or otherwise acquire and to
register, hold, own, use, sell or otherwise dispose of any and all trade-
marks, trade-names, processes, formule, trade secrets, inventions and
devices of all kinds, whether secured under letters patent of the
United States or of any foreign country.

(d) To purchase, lease ‘or otherwise acquire and hold lands,
buildings, tenements, factories and real estate in the State of New
York and elsewhere for the plant, offices, workshops, warehouses, lab-
oratories and manufactories of the Company and to lease, mortgage
and convey such real estate in such manner as may appear for the best
interests of the Company.

(e) To buy, sell, import, prepare, manufacture and generally to
deal in and with all kinds of goods, wares, chattels, merchandise and
personal property, and to conduct any lawful manufacturing or mer-
cantile business in connection therewith.

(£) To carry on any other business permissible under the Busi-
ness Corporations Law of the State of New York which may be car-
ried on to advantage in connection with the business of the Company
or which may tend to promote its interests.

(g) To conduct its business in other States or foreign countries,
and to have one or more offices out of the State, and to hold, pur-
chase, mortgage and convey real and personal property out of the State
but subject to the laws of the jurisdiction where such property is
situated.

Third —The amount of capital stock of said Company shall be Twenty
Thousand Dollars ($20,000).

Fourth.—The number of shares composing said capital stock shall be
Two Hundred (200) Shares of the par value of One Hundred Dollars
($100) each, and the amount of capital with which said Company will be-
gin business is Five Hundred Dollars ($500).

Fifth—The principal business office of said Company shall be located
in the Borough of Manhattan, in the City, County and State of New
York.

Sixth—The duration of said Company shall be perpetual.
Seventh.—The number of Directors of said Company shall be three (3)-
214 NEW YORK CORPORATIONS.

Eighth—The names and post-office addresses of the Directors of said
Company for the first year are as follows:

NAMES. ADDRESSES.
Ernest McVickars............0.ceeeeaes No. 10 Maiden Lane, N. Y. City.
Samuel Halliman..................008 No. 170 Broadway, N. Y. City.
George Williams................00eeeee No, 310 W. 7oth St. N. Y. City.

Ninth—The names and post-office addresses of the subscribers to this
certificate and the number of shares of stock which each agrees to take in
said Company are as follows:

MAMES. ADDRESSES. SHARES.
Ernest McVickars...... No. 10 Maiden Lane, New York City.. 3
Samuel Halliman...... No. 170 Broadway, New York City.... I
George Williams....... No, 310 W. 7oth St., New York City... I

Tenth—At all elections of Directors of this Corporation, each stock-
holder shall be entitled to as many votes as shall equal the number of his
shares of stock, multiplied by the number of Directors to be elected, and
he may cast all of such votes for a single Director or may distribute them
among the number to be voted for, or any two or more of them as he
may see fit.

Eleventh._—Pursuant to Section 52 of the Stock Corporation Law, this
Corporation shall have power to purchase, acquire, hold and dispose of
the stocks, bonds and other evidences of indebtedness of any corporation,
domestic or foreign, and issue in exchange therefor its stock, bonds or
other obligations.

In Witness WHEREOF, we have made and signed this Certificate
in duplicate this twentieth day of February, One Thousand
Nine Hundred and Nine.

Ernest McVicxars.
SaMvueEL Hatiiman,
Grorck WILLIAMS.

State or New York,

County of New York. Sah

On this 20th day of February, 1909, before me personally appeared
Ernest McVickars, Samuel Halliman and George Williams, to me known
and known to me to be the individuals described in and who executed the
foregoing certificate, and severally acknowledged that they executed the

same.
Mirron Noste,

ao \ Notary Public No. 76,
SEAL. e New York County, N. Y.

(See Chap. III; also B. C. L., § 2.)

The foregoing is the usual form of New York charter.
It is usually prepared in triplicate, two copies for filing and
one copy for the use of the corporation. The extra copy, if
intended for use as legal evidence of the facts therein set
CHARTER AND BY-LAW FORMS. 215

forth, must be certified by the Secretary of State. If it is
merely for the company files, as is usually the case, certifica-
tion is unnecessary. (For fees, see Part III, Tables 1-4.)

The word “The” should be omitted from the corporate
name unless it is desired as part of the legal title. Its inclu-
sion in the name at times involves very awkward verbal con-
structions. In case of doubt as to whether any particular
name will be allowed by the state authorities, the matter
may be settled by correspondence with the Secretary of State.

The charter purposes may be as comprehensive as desired
so long as they are in accord with the state laws.

The amount with which the company will begin busi-
ness may not be less than $500 and the incorporators’ sub-
scriptions should be at least this amount.

The street address of principal office is not required, but
if in New York City, the Borough must be given.

Any desired number of directors, not less than three, may
be designated.

Three incorporators are sufficient, and, though any larger
number desired may participate, difficulty in securing signa-
tures and acknowledgments is increased thereby. All the
incorporators must be subscribers to the stock of the com-
pany to the extent of at least one share. Their business ad-
dresses are sufficient for the purposes of the charter.

Form 21.—Certificate of Incorporation. Extended Purposes.

er er ee

CERTIFICATE OF INCORPORATION

of the
HAMILTON SMELTING AND MINING COMPANY.

 

We, the undersigned, all being of full age and two-thirds being citi-
zens of the United States and one of us a resident of the State of New
York, for the purpose of forming a corporation under the Business Cor-
porations Law of the State of New York, do hereby certify and set forth:
216 NEW YORK CORPORATIONS.

Fiyst—The name of said corporation shall be
“HAMILTON SMELTING AND MINING CoMPANY.”

Second.—The purposes for which said corporation is to be formed are
as follows:

(1) To buy, lease or otherwise acquire mines, mining rights, quar-
ries and mineral lands of every kind, nature and description, and to work,
mine, prospect, develop, operate and promote the same; to mine, quarry
and excavate copper, gold, silver and other ores and metals and minerals
of all kinds and descriptions.

(2) To buy, lease, construct, own, control, operate and maintain
mills, works and plants for the crushing, sampling, milling, smelting, re-
duction and concentration of minerals and metal-bearing ores and the ex-
traction therefrom of all kinds of metals and mineral products and by-
products, on its own account and as factor and agent for others.

(3) To treat, prepare and manufacture and to buy, sell and generally
to deal in iron, steel, manganese, coke, copper, lumber and other materials
and in all or any articles consisting of or partly consisting of metal, wood
or other materials and any and all products and by-products thereof.

(4) To buy, sell, manufacture, produce and dispose of all kinds of
goods, wares, merchandise, manufactures, commodities, foodstuffs, drugs,
furniture, machinery, tools, supplies and agricultural products, and generally
to engage in and carry on any form of manufacturing or mercantile enter-
prise, necessary or incidental to the business of the Company.

(5) In other states and jurisdictions to have one or more offices
and to carry on all or any part of its operations and business, and unlim-
itedly and without restriction to hold, purchase, mortgage, lease and con-
vey real and personal property as ailowed by the laws of such states and
jurisdictions.

(6) To apply for, obtain, purchase or otherwise acquire and to reg-
ister, hold, own, use, operate and to sell, assign or otherwise dispose of
any and all trade-marks, patent rights, improvements, processes, formulae,
inventions and apparatus of all kinds, whether secured under letters pat-
ent of the United States or in any foreign country or in any other manner.

(7) To do any of the things hereinbefore enumerated for itself or
on account of others; to make and perform contracts for the doing of
any of said things; to carry on any business or operation deemed ad-
vantageous or profitable to the corporation in connection with or in fur-
therance of any of said things; to acquire, manage and dispose of contracts,
properties and rights of all kinds, including the assets, businesses, good-
wills and liabilities of persons, firms and corporations and generally to do
anything that is permissible to corporations under the Business Corporations
Law of the State of N ew York.

(8) For the purposes of its business to enter into, make, perform
and carry out contracts of every sort and kind, necessary or incidental
to the purposes of this Company, with any person, firm, association, or
corporation, whether private, public or municipal, or with any body poli-
tic, and with the government of any country, or with any state, terri-
tory or colony thereof.

(9) To do any or all of the things set forth in this certificate as ob-
jects, purposes, powers or otherwise, to the same extent and as fully as
natural persons might or could do and in any part of the world as prin-
cipals, agents, contractors or otherwise.
CHARTER AND BY-LAW FORMS. 217

(10) To conduct any business permissible under the Business Cor-
porations Law of the State of New York, which may be carried on to ad-
vantage in connection with its business or to its profit or advantage.

__Third—The amount of capital stock of said Company shall be One
Million Dollars ($1,000,000).

Fourth—The number of shares composing said capital stock shall be
ten thousand (10,000) shares of the par value of one hundred dollars ($100)
each, and the amount of capital with which said Company will begin busi-
ness is five hundred dollars ($500).

Fifth—The principal business office of said Company shall be located
in the Borough of Manhattan in the County, City and State of New York.

Sixth—The duration of said Company shall be perpetual.
Seventh.—The number of Directors of said Company shall be five (5).

Eighth—The names and post-office addresses of the Directors of said
Company for the first year are as follows:

NAMES. ADDRESSES,
Theodore Hamilton................ 100 Broadway, New York City.
Howard McShayne................ 100 Broadway, New York City.
John R. McCullough............... £00 Broadway, New York City.
Henry M. Frenckel................ Montclair, New Jersey.
James McFarrell...............04. 356 West End Ave., New York City.

Ninth.—The names and post-office addresses of the subscribers to this
certificate and the number of shares of stock which each agrees to take in
said Company are as follows:

NAMES. ADDRESSES. SHARES,
Theodore Hamilton................ 100 Broadway, New York City. 3
Howard McShayne................. 100 Broadway, New York City. I
John R. McCullough............... 1oo Broadway, New York City. I

Tenth—Pursuant to Section 52 of the Stock Corporation Law this
Company shall have power to purchase, acquire, hold and dispose of the
stocks, bonds and other evidences of indebtedness of any corporation, do-
mestic or foreign, and issue in exchange therefor, its bonds, stocks or other
obligations.

In Witness Wuerkor, we have made and signed this certificate in
duplicate, this fifth day of April, one thousand nine hundred
and nine.

TuHEovorE HAMILTON.
Howarp McSHayne.
Joun R. McCutLoucu.

(Acknowledgment as in Form 20.)

In the following form, classification of stock is provided
for. This charter also includes almost every purpose of a
moneyed corporation that will be allowed to an incorporation
under the Business Corporations Law.
218 NEW YORK CORPORATIONS.

Form 22.—Certificate of Incorporation. Preferred Stock.

CERTIFICATE OF INCORPORATION
of the
HOLLAND SECURITIES COMPANY.

We, the undersigned, all being of full age and two-thirds being citi-
zens of the United States and one of us a resident of the State of New
York, for the purpose of forming a corporation under the Business Cor-
porations Law of the State of New York, do hereby certify and set forth:

First—The name of said corporation shall be
“Hoitanp SEcurrtiEs CoMPANY.”

Second.—The purposes for which said corporation is to be formed are
as follows:

(a) To buy, sell, hold and generally to deal in and with stocks, bonds,
debentures, mortgages and securities of all kinds; to borrow money, make
loans, advance money on contracts, make investments and generally act
as investment brokers; to issue notes, bonds, securities and debentures
which may be secured by mortgage or otherwise upon property real and
personal of the Corporation under the provisions of Section 6 of the
Stock Corporation Law of the State of New York; to purchase, hold, im-
prove, sell, lease or exchange real estate and generally to conduct any finan-
cial business permissible under the Business Corporations Law of the State
of New York.

(b) To act as agents, factors, brokers, commission merchants, con-
tractors, lessees and managers of estates or otherwise in entering into,
undertaking, performing, negotiating, executing, conducting and transact-
ing for persons, firms and corporations upon commission or otherwise any
and all the things set forth in this certificate that it can do for itself, and
to exercise all of its powers to the same extent that a natural person
might do, and in any part of the world to the full extent permitted to
corporations organized under the Business Corporations Law of the State
of New York.

(c) To purchase, acquire, hold and dispose of the stocks, bonds and
other evidences of indebtedness of any corporation, domestic or foreign,
and issue in exchange therefor its stock, bonds or other obligations, and
to exercise while owner of the stock of other corporations all the rights,
powers and privileges of ownership, including the right to vote thereon.

To guarantee or cause to be guaranteed the payment of divi-
dends or interest on ay bonds, stocks, debentures or other securities of
this corporation, and to guarantee or cause to be guaranteed the contracts
and obligations of this corporation whenever proper or necessary for its
business in the judgment of its Board of Directors.

(e) To conduct or transact business in any of the states, territories,
colonies or dependencies of the United States and in any and all foreign
countries; to have one or more offices therein, and therein to hold, pur-
chase, mortgage and convey real and personal property without limit as
to the amount, save as imposed by local laws.

Third—The amount of capital stock of said corporation shall be ‘Two
Hundred Thousand Dollars ($200,000), and the amount of capital with
CHARTER AND BY-LAW FORMS. 219

a said corporation will begin business is Ten Thousand Dollars ($10,-
000).

Fourth—The number of shares of which said capital stock is to con-
sist shall be Two Thousand (2,000) Shares of the par value of One Hun-
dred Dollars ($100) each, of which One Thousand (1,000) Shares of the
total par value of One Hundred Thousand Dollars ($100,000) shall be com-
mon stock and One Thousand (1,000) Shares of the total par value of One
Hundred Thousand Dollars ($100,000) shall be preferred stock.

Said preferred stock shall be entitled to an annual cumulative divi-
dend of six per cent. (6%) payable semi-annually on the 1oth days of
January and July of each year before any dividends are paid on the
common stock, and, after said common stock has in any one year received
a dividend of six per cent. (6%), to participate equally with said com-
mon stock, share and share alike, in all further dividends that may be de-
clared during such year until said preferred stock has received a total
dividend for that year up to but not exceeding twelve per cent. (12%),
and such preferred stock shall be entitled to preference in the event of
dissolution or liquidation of the corporation.

Fifth—The principal business office of the corporation shall be located
in ihe Village of Mineola in the County of Nassau and State of New
York.

Sixth.—The duration of said corporation shall be perpetual.

peace number of Directors of said corporation shall be five
(5).
Eighth—The names and post-office addresses of the Directors of the
corporation for the first year are as follows:

NAMES. ADDRESSES. *
James T. Franklin................e cee eeee Port Washington, New York.
Charles M. Parsons............eeeceeeees Plainfield, New Jersey.
William G. McGowan..........ccceeeeeeeee Mineola, New York.
Harry “Tl. Coombs «ia <daguailencexeag agai Mineola, New York.
John Harrimattvs. 03 o224 ¢20aeaeedea evens < 170 Broadway, New York City.

Ninth—The names and post-office addresses of the subscribers to this
certificate and a statement of the number of shares of stock which each
agrees to take in the same are as follows:

NAMES. ADDRESSES. SHARES.
William G. McGowan....... Mineola, New York................ 3
James T. Franklin.......... Port Washington, New York........ I
John Harriman............. 170 Broadway, New York City.... I

In Witness WHEREorF, we have made and signed this certificate in
duplicate this 15th day of February, 1909.

Wittiam G. McGowan.
James T. FRANKLIN.
JoHN HarriMan.

(Acknowledgment as in Form 20.)

In the form that follows the usual power of the directors

to conduct the corporate business is much abridged by the
provisions of paragraph ten.
220 NEW YORK CORPORATIONS.

Form 23.—Certificate of Incorporation. Special Provisions.

CERTIFICATE OF INCORPORATION
of the
WELLSFORD REALTY CORPORATION,

We, the undersigned, all being of full age and two-thirds being citi-
zens of the United States and one of us a resident of the State of New
York, for the purpose of forming a corporation under the Business Cor-
porations Law of the State of New York, do hereby certify and set forth:

First——The name of said corporation shall be
“WELLSFoRD REALTY CORPORATION.”

Second.—The purposes for which said corporation is to be formed are
as follows:

(a) To take, lease, purchase, hire or otherwise acquire, and to own,
use, hold, sell, convey, lease, exchange, mortgage, improve, develop, culti-
vate, and otherwise handle, deal in and dispose of real estate, real prop-
erty and any interest or right therein.

(b) To take, purchase or otherwise acquire, and to own, use, hold,
sell, convey, exchange, hire, lease, pledge, mortgage and otherwise deal in
and dispose of goods, chattels, stocks, bonds, mortgages, debentures, securi-
ties, chattels real and choses in action except bills of exchange, and gen-
erally to buy, sell and do a mercantile business.

(c) To convert and appropriate any land that may be acquired or
controlled by this corporation into and for ways, roads, paths, streets,
alleys, lanes, sidewalks, courts, lawns, parks, boulevards, squares, build-
ing lots, additions, town sites and pleasure grounds, and to plot, clear,
grade, survey, develop, improve, cultivate, manage and administer any
lands owned or controlled by this corporation.

(d) To erect or have erected, to construct or have constructed,
houses, buildings, store rooms, factories, tenements, edifices, works and
structures of every description and to rebuild, enlarge, improve, alter, re-
pair, raze and remove existing houses, buildings and structures of every
kind and description and to buy, sell, own, use, manage and lease the same
or similar structures.

(e) To issue notes, bonds and debentures secured by mortgage or deed
of trust upon the property of said corporation or otherwise and to sell and
dispose of the same for the benefit of the corporation or for any lawful
purpose. :

(4) To purchaseglease, exchange or otherwise acquire any and all
rights, permits, privileges, franchises and concessions suitable or conve-
nient for any of the purposes of its business.

(g) To conduct and transact business in any of the states, terri-
tories, colonies or dependencies of the United States and in any or all for-
eign countries; to have one or more offices therein, and therein to hold,
purchase, mortgage and convey real and personal property without limit
as to amount but subject to local laws.

(h) To do any or all things set forth in this certificate as objects,
purposes, powers or otherwise, to the same extent and as fully as natural
persons might do and in any part of the world as principals, agents, con-
tractors, lessees or otherwise.
CHARTER AND BY-LAW FORMS. 221

Third.—The amount of capital stock of said corporation shall be Fif-
teen Thousand Dollars ($15,000).

Fourth—The number of shares composing said capital stock shall be
One Hundred and Fifty (150) Shares of the par value of One Hundred
Dollars ($100) each and the amount of capital with which said corpora-
tion will begin business is Five Hundred Dollars ($500).

Fifth—The principal business office of said corporation shall be lo-
Oe in the Borough of Manhattan in the County, City and State of New
ork.

Sixth—The duration of said corporation shall be perpetual.

on) Seventh_—_The number of Directors of said corporation shall be seven
7).

Eighth—The names and post-office addresses of the Directors of said
corporation for the first year are as follows:

NAMES. ADDRESSES.
J Edward Parks...............0005 66 W. 84th St., New York City.
Harry Edwards................025. Tompkinsville, Staten Island, N. Y.
Harvey M. Moore...............-.. 76 W. 118th St., New York City.
Stanley H. French.................. 40 Montgomery St., Jersey City, N. J.
Samuel W. O’Conner............... Flushing, Long Island, N. Y.
Henry Douglas............00ee eee ee 75 E. 38th St., New York City.
James Elliot.........0..0. cece eee eee 170 Broadway, New York City.

Ninth—The names and post-office addresses of the subscribers to
this certificate and the number of shares of stock which each agrees to take
in said corporation are as follows:

NAMES. ADDRESSES. SHARES.
J. Edward Parks.......... 66 W. 84th St, New York City.... 3
Harry Edwards............- Tompkinsville, Staten Island, N. Y. 3
Harvey M. Moore.......... 76 W. 118th St., New York City.... 3

Tenth—No real estate shall be bought or sold by this corporation
unless with the consent of a majority of the stockholders present at any
regular meeting of stockholders or at some special meeting of stock-
holders duly called for that purpose.

Eleventh—The by-laws of this corporation may be amended only by
the majority vote of the entire number of stockholders entitled to vote,
cast at any regular meeting of the stockholders or at some special meet-
ing of the stockholders duly called for the purpose.

Twelfth—Pursuant to Section 52 of the Stock Corporation Law, this
corporation shall have power to purchase, acquire, hold and dispose of the
stocks, bonds and other evidences of indebtedness of any corporation, do-
mestic or foreign, and to issue in exchange therefor its stocks, bonds and
other obligations.

In Witness WHEREOF, we have made and signed this certificate in
duplicate, this 27th day of February, 1909.

J. Epwarp Parks.

Harry Epwarps.

Harvey M. Moore.
(Acknowledgment as in Form 20.)

(For fees see Part III, Tables 1-4.)
222 NEW YORK CORPORATIONS.

(b) By-Law Forms.
Form 24.—By-Laws. Short Set.

i

By-Laws
of the
NEW YORK BISCUIT COMPANY.

ArticLe I.—Srocx.

1. Certificates of Stock shall be issued in order by number from the
stock certificate book, and each certificate shall be signed by the President
and Secretary and be sealed with the corporate seal, and a record thereof
be kept on the stub of each certificate issued.

2. Transfers of Stock shall be made only upon the books of the Com-
pany, and before a new certificate is issued, the old certificate properly en-
dorsed shall be surrendered and cancelled.

ArtIcLE IJ.—Stock HOLDERS.

1. The Annual Meeting of the stockholders of the Company shall be
held in the principal office of the Company in New York City at 3 P. M.
on the second Tuesday in January of each year; but if said day shall be a
legal holiday, then on the next business day following.

2. Special Meetings of the stockholders may be called at the office
of the Company at any time by resolution of the Board of Directors, or
upon written request of stockholders representing one-third of the out-
standing stock.

3. Notice of Meetings shall be written or printed and be mailed to
the last known post-office address of each stockholder not less than ten
days before any meeting of stockholders is held, and if for a special meet-
ing, such notice shall state the object or objects thereof. (See § tor.)

4. A Quorum at any stockholders’ meeting shall consist of a major-
ity of the voting stock of the Company represented in person or by
proxy. (See § 102.)

5. Voting at elections of Directors shall be by ballot, and shall also be
by ballot on any other matter when so requested by not less than one-
fourth in interest of the stockholders present at the meeting. Each stock-
holder shall be entitled to one vote for each share of stock held by him,
and such vote may be cast in person or by proxy.

6. The Order of Business at the annual meeting and as far as possi-
ble at all other meetings of the stockholders, shall be:

Reading and Disposal of Any Unapproved Minutes.
Annual Reports of Officers and Committees.
Election of Directors.

Unfinished Business.

New Business.

Adjournment.

GU Goole

Arricte JII.—Drrecrors,

1. The Business and Property of the Company shall be managed by
a Board of Five (5) Directors, who shall be stockholders and shall be
CHARTER AND BY-LAW FORMS. 223

elected annually by the stockholders for the term of one year, and shall
serve until the election of their successors. Wacancies may be filled by the
Board for the unexpired term. Directors shall receive no compensation
for their services as directors.

2. Regular Meetings of the Board shall be held in the principal office
of the Company at 3 o'clock P. M. on the second Tuesday in each month;
but if such day is a legal holiday, then on the next business day following.

3. Special Meetings of the Board of Directors may be called at any
time by the President or by any three members of the Board, or they may
be held at any time and place without notice by unanimous consent of all
the members.

4. Notices of Meetings of the Board shall be mailed to each member
of the Board not less than five days before any such meeting, and notices
of special meetings shall state the purposes thereof.

5. A Quorum at any meeting shall consist of a majority of the entire
membership of the Board, and a majority of such quorum shall decide any
question coming before the meeting.

6. Officers of the Company shall be elected at the first Board meeting
after the election of Directors each year. If any office becomes vacant
during the year, the Directors shall fill the same for the unexpired term.
The Directors shall fix the compensation of the officers and agents of the
Company.

7. The Order of Business at any regular meeting or special meeting
of the Board of Directors shall be:

Reading and Disposal of Any Unapproved Minutes.
Reports of Officers and Committees.

Unfinished Business.

New Business.”

Adjournment.

EEGs INC

ArticLteE [V.—OFFIcERS.

1. The Officers of the Company shall be a President, who shall be
elected from among the directors, a Vice-President, a Secretary and a
Treasurer, all of whom shall be elected for one year and hold office until
their successors are elected and qualify. The positions of Secretary and
Treasurer may be united in one person,

2. The President shall preside at all meetings ; shall have general
supervision of the affairs of the Company; shall sign or countersign all
certificates, contracts and other instruments of the Company as authorized
by the Directors; shall make reports to the Directors and stockholders,
and perform all such other duties as are incident to his office or are prop-
erly required of him by the Board of Directors. In the absence or disability
of the President, the Vice-President shall exercise all his functions.

3. The Secretary shall issue notices for all meetings; shall keep their
minutes; shall have charge of the seal and the corporate books; shall sign
with the President.all instruments requiring such signature, and shall make
such reports and perform such other duties as are incident to his office or
required of him by the Board of Directors.

4. The Treasurer shall have the custody of all moneys and securities
of the Company and shall keep regular books of account. He shall sign
or countersign such instruments as require his signature, and shall perform
such other duties as are incident to his office or that may be required of
him by the Board of Directors,
224 NEW YORK CORPORATIONS.

ArticLe V.—Divipenps AND FINANCE.

_ 1. Dividends shall be declared only from surplus profits, at such times
and in such amounts as the Board shall decide. No dividend shall be de-
clared at any time that will impair the capital of the Company,

2. The Moneys of the Company shall be deposited in the name of the
Company in such trust company, bank or banks as the Board of Directors
shall designate, and be drawn out only by check signed by the Treasurer
and countersigned by the President.

Article VI.—SEAL.

1. The Seal of the Company shall consist of two concentric circles,
between which is the name of the Company and in the center of which is
inscribed “Incorporated 1909, New York,” and such seal as impressed on
the margin hereof is hereby adopted as the corporate seal of the Company.

Article VIIL—AMENDMENTS.

1. These By-Laws may be amended, repealed or altered, in whole or
in part, by a majority vote of the entire outstanding stock of the Company,
at any regular meeting, or any special meeting where such action has been
announced in the call and notice for such meeting.

2. The Board of Directors shall not alter or repeal any by-laws
adopted by the stockholders of the Company, but may adopt additional by-
laws in harmony therewith.

(See Chap. IV.)

The foregoing by-laws meet the requirements of the New
York statutes. They may be readily adapted to the needs of
any ordinary business corporation of moderate size. In use
they have proved to be an excellent working set. For larger
corporations the following by-laws will be found available:

Form 25.—By-Laws. Extended Form.

OS ERT SW) SW GR SRR Filey ERG eee: eee Oe we ee Se ee we BR eel BS

By-Laws
of the
LEIGHTON COAL COMPANY.

Articte I.—Srocx,

Sec. 1. Certificates of Stock.

Each stockholder of the Company whose stock has been paid for in
full shall be entitled to a certificate or certificates showing the amount of
stock of the Company standing on the books in his name. Certificates shall
be in form approved by the Board of Directors, be numbered consecutively,
bear the signatures of the President and Treasurer and the seal of the
CHARTER AND BY-LAW FORMS. 225

Company, and be issued in numerical order from the stock certificate book.
A full record of each certificate of stock, as issued, shall be entered on
the corresponding stub of the stock certificate book.

Sec. 2. Transfers of Stock.

Transfers of stock shall be made upon the proper stock books of the
Company on surrender of the duly endorsed certificate or certificates rep-
resenting the transferred stock. Surrendered certificates shall be cancelled
and attached to the corresponding stubs in the stock certificate book and
new certificates issued to the parties entitled thereto. ‘The stock books
shall be closed to transfers twenty days before general elections and twenty
days before dividend days.

Sec. 3. Lost Certificates,

The Board of Directors may order a new certificate, or certificates, of
stock to be issued in the place of any certificate or certificates of the Com-
pany alleged to have been lost or destroyed, but in every such case the
owner of the lost certificate or certificates shall first cause to be given to
the Company a bond in such sum, not less than the par value of such lost
or destroyed certificate or certificates of stock, as said Board may direct,
as indemnity against any loss or claim that the Company may incur by
reason of such issuance of stock certificates. The Board of Directors may,
in its discretion, refuse to replace any lost certificate, save upon the order
of some court having jurisdiction in such matter.

Sec. 4. Stock and Transfer Books.

The stock and transfer books of the Company shall be kept at its
office, No. 52 Broadway, in the City of New York, and shall be open dur-
ing business hours to the inspection of any stockholder or judgment cred-
itor of the Company.

Sec. 5. Treasury Stock,

All issued and outstanding stock of the Company acquired by the
Company shall he held subject to disposal by the Board of Directors,
Such stock shall neither vote nor participate in dividends while held by the
Company.

ArtIcLe II.—StTocKHOLDERS,

Sec. 1. Annual Meetings.

The regular annual meetings of the stockholders shall be held in the
office of the Company, at No. 52 Broadway, New York City, at 12 M. on
the second Monday of January in each year, if not a legal holiday, but if
a legal holiday then on the business day next following. At this meeting
the directors for the ensuing year shall be elected, the officers of the Com-
pany shall present their annual reports, and any other business brought
before the meeting may be transacted. The Secretary shall have on file
for inspection and reference an alphabetical list of the stockholders, giving
the amount of stock held by each as shown by the stock books of the Com-
pany twenty days before the date of such annual meeting.

Sec. 2. Special Meetings,

Special meetings of the stockholders shall be held in the office of the
Company, and shall be called by the President whenever so directed
by resolution of the Board of Directors, or when written request is made
therefor by stockholders holding a majority of the voting stock of the
Company. Calls for special meetings shall specify the time, place and ob-
226 NEW YORK CORPORATIONS.

ject or objects thereof, and no other business than that specified in the call
shall be considered at any such meeting.

Sec. 3. Notice of Meetings.

A written or printed notice of every regular or special meeting of the
stockholders, stating the time and place, and in case of special meetings,
the objects thereof, shall be prepared and mailed by the Secretary, postage
prepaid, to the post-office address of each stockholder, as shown by the
stock books of the Company, at least ten days before the date of any such
meeting. No notice need be given of adjourned meetings. Any failure or
irregularity of notice of a regular meeting shall not affect the validity of
such meeting or of any proceedings thereat.

If an election of directors is to be held at any such meeting, the Sec-
retary shall, in addition to the prescribed notice by mail, give notice of such
meeting and election by publication thereof at least once a week for two
successive weeks immediately preceding such election, in a newspaper pub-
lished in the county where such election is to be held. (See § 101.)

Sec. 4. Voting.

Every stockholder shall be entitled to one vote at all meetings of stock-
holders for each share of stock standing in his name on the books of the
company. Voting must be by ballot when so requested by any stockholder
present.

Src. 5. Election of Directors.

At each annual meeting of the stockholders of the Company seven
directors shall be elected, who shall serve until the election and acceptance
of their duly qualified successors, All such elections shall be by ballot, and
the candidates, to the number tu be elected, receiving the highest number
of votes shall be declared elected.

If for any reason directors are not elected at the regular meeting of
stockholders, a special meeting shall be called for the purpose within thirty
days thereafter, at which directors shall be elected in all respects as at the
annual meeting.

At each election, after the first, two inspectors shall be appointed by
the President to conduct the election of directors to serve for the ensuing
year. These inspectors shall be sworn to the faithful discharge of their
duty, and shall then take charge of the election. No person who is a candi-
date for the office of director shall act as an inspector of election.

In all elections for directors, each stockholder of record shall be en-
titled to cast, for each share of stock held by him, as many votes as there
are directors to be elected, and he may cast the whole number of such
votes for one candidate, or distribute them among two or more candidates
as he may prefer. :

Sec. 6. Quorum. ©

A majority of the outstanding stock, exclusive of treasury stock, shall
be necessary to constitute a quorum at meetings of stockholders. (See §
102.) When a quorum is present at any meeting, a majority of the stock
represented thereat shall decide any question brought before such meeting.
In the absence of a quorum, those present may adjourn the meeting from
time to time, but until a quorum is secured may transact no business.

Sec. 7. Proxies.

Any stockholder entitled to vote may be represented at any regular or
special meeting of stockholders by a duly executed proxy. Proxies shall
CHARTER AND BY-LAW FORMS. 227

be in writing and properly signed, but shall require no other attestation.
No proxy shall be recognized unless executed within eleven months of the
date of the meeting at which it is presented.

Sec. 8. Officers of Meetings.

The President, if present, or otherwise the Vice-President, shall pre-
side at all meetings of the stockholders. In the absence of both these offi-
cials, a Chairman of the meeting shall be appointed by the stockholders
present.

The Secretary of the Company shall keep a faithful record of the pro-
ceedings of all stockholders’ meetings. In his absence a Secretary pro
tem. shall be appointed by the presiding officer.

SEc. 9. Order of Business.

The order of business at the annual meeting, and, so far as practicable,
at all other meetings of the stockholders shall be as follows:
Notation of those Present.
Proof of due notice of Meeting.
Reading and disposal of any unapproved Minutes.
Annual Reports of Officers and Committees.
Election of Directors.
Unfinished Business.
New Business.
Adjournment.

SN AT AYN

ArticLé III.—Drrecrors,

Sec, 1. Number and Authority.

The Board of Directors shall consist of seven members and shall have
entire charge of the property, interests, business and transactions of the
Company, with full power and authority to manage and conduct the same,

Sec. 2. Qualifications.

No person shall be elected, nor shall be competent to act as a director
of this Company, unless he is at the time of election, and continuously dur-
ing his term of office, the holder of record of not less than one share of its
stock. At least one of the directors of the Company shall be resident in
the State of New York.

Sec. 3. Vacancies.

Any vacancy occurring in the Board of Directors may be filled for the
unexpired term by a majority vote of the remaining members, whether or
no such remaining members constitute a quorum.

Sec 4. Regular Meetings.

The regular meetings of the Board of Directors shall be held in the
office of the Company, in the City of New York, at 3 P. M. on the second
Monday of each month, if not a legal holiday, but if a legal holiday, then
on the business day next following.

Sec. 5. Special Meetings.

Special meetings of the Board of Directors may be held at any time
in the office of the Company, in the City of New York, on the written call
of the President or of any three members of the Board. Special meetings
may be held at any time and place within the State, and without notice, by
unanimous consent of the Board.
228 NEW YORK CORPORATIONS.

Sec. 6. Notice of Meetings.

The Secretary shall notify each member of the Board of all regular or
special meetings, by mailing to each member’s last known post-office ad-
dress, postage prepaid, at least five days before any such meeting, a written
or printed notice thereof, giving the time, place, and, in case of special
meetings, the objects thereof; and no other business shall be considered at
any such special meeting than shall have been so notified to the members.
Any failure or irregularity in notice of a regular meeting shall not affect
the validity of such meeting, or of the proceedings thereat.

Sec. 7. Quorum.

A majority of the Board of Directors shall constitute a quorum, and
a majority vote of the members in attendance at any Board meeting shall,
in the presence of a quorum, decide its action. A minority of the Board
present at any regular, special or adjourned meeting may, in the absence
of a quorum, adjourn to a later date, but may not transact any business
until a quorum has been secured.

Sec. 8. Election of Officers.

At the first meeting of the Board of Directors after the election of
directors each year, a President, Vice-President, Secretary, Treasurer and
Counsel, shall be elected to serve for the ensuing year and until the elec-
tion of their respective successors. Election shall be by ballot, and a ma-
jority of the votes cast shall be necessary to elect. If not detrimental to
the business or operations of the Company, any two offices may be con-
ferred upon one person. The directors shall fix the compensation of offi-
cers, subject to the limitations of the Charter and the By-Laws. Any
vacancies that occur may be filled by the Board for the unexpired term.
The Board shall have the right to remove any officer by a two-thirds vote
of the entire membership of the Board.

Sec. 9. Compensation of Directors.

Each director shall receive the sum of five dollars as compensation for
his attendance at any regular or special meeting of the Board of Directors,
and shall receive no other salary or compensation for his services as a di-
rector of the Company.

Sec, 10. Power to Pass By-Laws.

The Board of Directors shall have no power to amend, alter or repeal
the by-laws, but may pass such additional by-laws in conformity therewith
as may be necessary or convenient to facilitate the business of the Com-
pany.

Sec. 11. Executive Committee.

The President, Vice-President and Treasurer shall together constitute
an Executive Committee which shall be a part of the permanent executive
organization of the Company, and shall, in the interim between meetings
of the Board of Directors, exercise all the powers of that body in accord-
ance with the general policy of the Company and the directions of the
a (Treasurer cannot serve on executive committee unless a direc-
tor.

Meetings of the Executive Committee shall be held on call of the
President, or of any two members of the Committee. All of the members
of the Committee must be duly notified of meetings, and a majority of the
members shall constitute a quorum. The Executive Committee shall keep
due record of all meetings and actions of the Committee, and such records
shall at all times be open to the inspection of any director.
CHARTER AND BY-LAW FORMS. 229

_ The members of the Executive Committee shall receive such compen-
sation for their services as may be fixed by the Board of Directors.

SEc. 12. Corporation Offices.

The principal office of the Company, within the State of New York,
shall be at 52 Broadway, New York City, and such other offices for the
transaction of its business shall be maintained at such other places, in
or outside of said State, as may be determined upon by the Board of Di-
rectors,

Sec, 13. Order of Business.

The regular order of business at meetings of the Board of Directors
shall be as follows:

Reading and disposal of any unapproved Minutes.
Reports of Officers and Committees.

Unfinished Business.

New Business.

Adjournment.

eae

Articte 1V.—Orricers,

Sec. 1. Enumeration, Election and Qualifications.

The officers of the Company shall be a President, Vice-President,
Treasurer, Secretary and Counsel. These officers shall be elected by the
Board of Directors at the first regular meeting after the election of direc-
tors each year, and shall hold office for the term of one year, and until
their respective successors are duly elected and qualify. The President and
oa and Treasurer shall be elected from among the Board of

irectors.

Src. 2. The President.

The President, when present, shall preside at all meetings of the stock-
holders and of the Board of Directors; shall sign all certificates of stock;
shall sign or countersign, as may be necessary, all such bills, notes, checks,
contracts and other instruments as may pertain to the ordinary course of
the Company’s business; and sign, when duly authorized thereto, all con-
tracts, orders, deeds, liens, licenses and other instruments of a special
nature.

He may also, in the absence or disability of the Treasurer, endorse
checks, drafts and other negotiable instruments for deposit or collection,
and shall, with the Secretary, sign the minutes of all meetings over which
he may have presided.

At the first regular meeting of the Board in January he shall submit
a complete report of the operations of the Company for the preceding
year, together with a statement of the Company affairs as existing at the
close of such year, and shall submit a similar report at the annual meeting
of stockholders; also, he shall report to the Board of Directors, from time
to time, all such matters coming within his notice and relating to the inter-
ests of the Company, as should be brought to the attention of the Board.

He shall be, ex-officio, a member of all standing committees, shall
have such usual powers of supervision and management as may pertain to
the office of President, and perform such other duties as may be properly
required of him by the Board of Directors,

Sec. 3. The Vice-President.

The Vice-President, in the absence, disability or refusal to act of the
President, shall possess all of the powers and perform all of the duties of
that officer.
230 NEW YORK CORPORATIONS.

Sec. 4. The Secretary,

The Secretary shall keep full minutes of all meetings of the stockhold-
ers and of the Board of Directors; shall read such minutes at the proper
subsequent meetings; shall issue all calls for meetings and notify all offi-
cers and directors of their election; shall have charge of, and keep, the
seal of the corporation, and affix the same to certificates of stock when
such certificates are signed by the President and Treasurer, and shall affix
the seal, attested by his signature, to such other instruments as may re-
quire the same.

He shall keep the stock certificate book and the other usual corporation
books, and shall prepare, record, transfer, issue, seal and cancel certificates
of stock as required by the transactions of the Company and its stock-
holders, He shall also sign, with the President, all contracts, deeds, licenses
and other instruments when so ordered.

He shall make such reports to the Board of Directors as they may re-
quest, and shall also prepare such reports and statements as are required
by the State laws. He shall make out, twenty days before any election of
directors, a complete list of the stockholders entitled to vote at such elec-
tion, arranged in alphabetical order, and giving the number of shares of
stock that may be voted by each, and shall keep the same open to inspec-
tion at the office of the Company until the time of, and during the said
election. He shall allow any stockholder, on application in business hours,
got bees the stock certificate book, the stock transfer book and the stock
edger.

He shall attend to such correspondence, and to such other duties, as
may be incidental to his office, or properly be assigned him by the Board.

Sec 5. The Treasurer,

The Treasurer shall have the custody of, and be responsible for all
moneys and securities of the Company; shall keep full and accurate records
and accounts in books belonging to the Company, showing the transactions
of the Company, its accounts, liabilities and financial condition, and shall see
that all expenditures are duly authorized and are evidenced by proper
receipts and vouchers. He shall deposit in the name of the Company, in
such depositary or depositaries as are designated by the Directors, all
moneys that may come into his hands for the Company account. His books
and accounts shall be open at all times during business hours to the inspec-
tion of any director of the Company.

The Treasurer shall also endorse for collection or deposit all bills, notes,
checks and other negotiable instruments of the Company; shall pay out
money as may be necessary in the transactions of the Company, either by
special or general direction of the Board of Directors, and on checks signed
by the President and himself, and shall generally, together with the Presi-
dent, have supervision of the finances of the Company.

He shall also ee full report of the financial condition of the Com-
pany for the annual meeting of the stockholders, and shall make such other
reports and statements as may be required of him by the Board of Directors
or by the laws of the State.

He shall give bond in such sum and with such sureties as may be
required by the Board of Directors for the faithful performance of his
duties and for the restoration to the Company in event of his death, resigna-
tion or removal from office, of all books, papers, vouchers, money and other
property belonging to the Company that may have come into his custody,

Src. 6. Counsel.

Counsel of the Company shall prepare all such contracts and agree-
ments required in the business of the Company as may be referred to him
CHARTER AND BY-LAW FORMS. 231

by its officers; and shall inspect and pass upon all such instruments pre-
sented to the Company as may be of sufficient importance to justify such
examination; also he shall advise with the officers of the Company in all
such legal matters pertaining to the affairs of the Company as may require
his consideration.

Sec. 7. The General Manager.

A General Manager shall be appointed by the Board of Directors and,
under the supervision of the President, shall have charge of and manage the
active business operations of the Company. He shall perform such further
coe and make such reports as may be required of him by the Board of

irectors.

Article V.—DIvipENDS AND FINANCES,

Sec. 1. Dividends.

Dividends shall be declared at such times as the Board may direct,
but no dividend shall be declared or paid, save from surplus profits re-
maining after all current liabilities of the Company have been fully paid;
nor shall any dividend be declared that would impair the capital of the
Company.

Sec. 2. Reserve Fund.

No dividend to exceed six per cent. per annum shall be declared by
the Board of Directors until there shall be on hand in excess of the amount
required to pay any such dividends, surplus profits of not less than ten
thousand dollars.

Sec. 3. Debt.

No debts shall be contracted, nor liability incurred, nor contract made
by or on behalf of this Company in excess of one thousand dollars, unless
the same be authorized or directed by the By-Laws or by a duly recorded
two-thirds vote of the entire Board of Directors at a regular meeting, or at
a special meeting called for the purpose.

Sec. 4. Bank Deposits.

The Treasurer shall deposit the moneys of the Company as the same
may come into his hands, in such depositary or depositaries as may be
designated by the Board of Directors, and such deposits shall be made
in the name of the Company, and moneys shall be withdrawn therefrom
only by check signed by the Treasurer and countersigned by the President.

ArtIcLE VI.—SuNnpry PRovISIONS.

Src. 1. Corporate Seal.

The corporate seal of the Company shall consist of two concentric
circles, between which shall be the name of the Company, and in the
center shall be inscribed “Incorporated 1906, New York,” and such seal,
as impressed on the margin hereof, shall be the corporate seal of the
Company.

Sec 2. Penalties.

Any officer, director or stockholder who shall disobey or violate any
of the provisions of these by-laws may be fined in an amount not to
exceed twenty dollars, such fine to be imposed by the Board of Directors,
and, if not paid at the time, to be deducted from any salary or dividend
then due or that may thereafter become due said person.
232 NEW YORK CORPORATIONS.

SEc. 3. Amendment.

These by-laws may be amended, repealed or altered, in whole or in
part, at any regular meeting of the stockholders, or at any special meeting
where such action has been duly announced in the call, provided that a
majority of the entire voting stock of the Company shall vote for such
amendment, repeal or alteration.

‘The Board of Directors shall have no power to amend, alter or repeal
the by-laws, but may pass such additional by-laws in conformity therewith
as may be necessary or convenient to facilitate the business of the Com-
pany.

Under the New York statutes the inspectors for the first
election of directors must be appointed by the board of direc-
tors designated in the charter. (S.C. L., § 31.)

Form 25a. Certification of By-Laws.

We, the undersigned, being the duly elected President and Secretary
of the Leighton Coal Company, a corporation organized under the Laws
of the State of New York, do, hereby certify that the foregoing By-Laws
are the By-Laws of the said Corporation duly adopted by the stockholders
of said Corporation at their first meeting, held on the second day of March,
1909, in the Office of the said Corporation, No, 52 Broadway, New York,
as shown by the Minutes of said meeting.

In Testimony WuHeER«EoF, we have hereunto affixed our official
signatures and the corporate seal of said corporation, this
eighteenth day of March, 1909.

Tuomas Harpy,

President.
Winston Harrison,
Secretary.
{ CORPORATE
SEAL,
CHAPTER XXII.

FORMS FOR FIRST MEETINGS.
(See Chap. V, “First Meetings.”)

Form 26.—Proxy.

a a ey

FIRST STOCKHOLDERS’ MEETING.

Know Att Men By Tuese Presents, That I, the undersigned, one
of the incorporators and a subscriber to the stock of the Automatic Appli-
ance Company, do hereby constitute and appoint Frank McPherson my
true and lawful attorney, with full powers of substitution and revocation,
to represent me at the first meeting of the stockholders of said corpor-
ation to be held on the twelfth day of January, 1909, and at any meeting
postponed or adjourned therefrom, hereby granting my said attorney full
power and authority to act for me at said meeting, and, in my name, place
and stead, to vote thereat upon the stock of said corporation subscribed
for by me, or upon which I may then be entitled to vote, in the transaction
of any and all business pertaining to the affairs of the Company that may
be brought before said meeting, all as fully as I might or could do if per-
sonally present, and I hereby ratify and confirm all that my said attorney,
or ne substitute, shall lawfully do at such meeting in my name, place and
stead.

In Witness Wuereor, I have hereunto affixed my signature
this ninth day of January, 1909.
Joun M. Srtrmman. [L.s.]

In presence of

Wa ter T. HENDERSON.

(For general form of proxy, see Forms 36-38.)

Proxies must be in writing, be signed by the stockholder
or his authorized attorney, and should be witnessed by at
least one person, but do not ordinarily require acknowledg-
ment. The proxy given is formal and complete. It is valid
for the first meeting and any meetings adjourned therefrom,
but then expires without revocation. (See § 104.)

233
234 NEW YORK CORPORATIONS.

Form 27.—Call and Waiver. Stockholders’.

CALL AND WalIveER oF NotICcE.
FIRST MEETING OF STOCKHOLDERS
of the
AUTOMATIC APPLIANCE COMPANY.

We, the undersigned, being all of the incorporators of the Automatic
Appliance Company and all the subscribers to its capital stock entitled to
notice of said meeting, do hereby call the first meeting of the stockholders
of said corporation to be held in the office of Wilton & Clough, 170 Broad-
way, New York, at 10 A. M., on the twelfth day of January, 1909, for the
purpose of receiving charter, adopting by-laws, considering and acting upon
a proposal for the issue of the capital stock of the corporation in exchange
for property, and the transaction of all such other business as may be neces-
sary or convenient in connection with the organization of said corporation,
and we do hereby waive all requirements as to notice or publication of the
time, place and purposes of this first meeting and do consent to the transac-
tion thereat of any and all business pertaining to the affairs of the Company.

Dated, New York City, FRANCIS JOHNSON.
January 12, 1909. Wiis T. Harriman,
Joun M. Sriurman.
Frank W. Jones.
Harrison FREEMAN.

Pe

In New York, since the first board of directors is desig-
nated by the charter and this board has power to adopt by-
laws, the first meeting of stockholders loses much of the im-
portance it has in other states, and is sometimes omitted en-
tirely. It is, however, usually held and this initial meeting
of the stockholders is most conveniently assembled by means
of a call and waiver of notice similar to the foregoing. This,
if signed by all the parties concerned, is all-sufficient, and
saves the time and trouble involved in personal notification
or notice by publication. If, however, any person or persons
entitled to be present at such a meeting, should not sign, such
omission might invalidate the proceedings of the whole meet-
ing. (See §§ 41, rota.)
FORMS FOR FIRST MEETINGS. 235

Form 28.—Call and Waiver. Directors’.

Ce

CaLL AND WAIVER oF NOTICE.

FIRST MEETING OF DIRECTORS
of the
AUTOMATIC APPLIANCE COMPANY.

 

We, the undersigned, being all of the Directors of the Automatic Ap-
pliance Company. do hereby call the first meeting of the Board of Direc-
tors thereof, to be held in the office of Wilton & Clough, 170 Broadway,
New York City, at 11 A. M., on the twelfth day of January, 1909, for the
purpose of electing officers, acting upon a proposal to exchange property
for the capital stock of the Company and for the transaction of all such
other business as may be necessary or convenient in connection with the
organization of said corporation and the promotion of its business, and we
do hereby waive all statutory and by-law requirements as to notice of the
time, place and purposes of said meeting and do consent to the transaction
thereat of any and all business pertaining to the affairs of the Company.

Dated, New York City, Harrison FREEMAN.
January 12, 1909. Frank W. Jones.
WIliAM JASPER,

Henry M. FRENCKEL.
FRANCIS JOHNSON.

As in the case of the first stockholders’ meeting, the
first meeting of directors is most conveniently assembled by
means of the call and waiver. This must be signed by every
member of the board, and, as in the call for any other special
meeting, should specify the business to be transacted. (See
3 125b.)

Form 29.—Exchange of Property for Stock. Proposal,

Ce

To tux AutomMAtTIC APPLIANCE CoMPANY,
New York City.

GENTLEMEN :—I hereby offer your Company in exchange and full pay-
ment for its entire capital stock of the par value of Thirty Thousand Dol-
lars ($30,000), the stock subscribed for by the incorporators being included
with their consent, the business now conducted under the firm name of
Henry W. McCabe & Co., at Nos. 167-9 Centre St., New York City, for
the manufacture of gas and electric fixtures, including therewith the plant,
236 NEW YORK CORPORATIONS.

lease of the premises and the firm property now therein, consisting of the
stock on hand and in process of manufacture, raw material, tools, machin-
ery, supplies and apparatus of every description, together with the cash on
hand and in bank now amounting to $1,150.35, all bills and accounts re-
ceivable and the right to own and use the present firm name and all trade
marks, formule, secret processes, patents and good-will of the present
business ; your Company to take over the business as a going concern and
to assume all outstanding contracts and all bills and obligations of every
kind, the amount of such bills and obligations being guaranteed not to ex-
ceed $1,200. E

If this proposition is accepted, the stock subscribed for by the incor-
porators is to be issued to them, or their order, and the remainder of the
stock to my order, all to be full-paid and non-assessable, and to be de-
livered in exchange for such instruments of assignment and conveyance as
may be necessary to vest the full title to the aforementioned business and
property in your Company.

Dated, New York, Yours very truly,

January 12, 1909. Henry W. McCase.

This proposal offers a simple and convenient method of
bringing the matter of issuing stock for property before the
meetings of the stockholders and directors. In view of recent
decisions and dicta, it is not advisable to incorporate in the
proposition any agreement for donation of stock to the treas-
ury of the Company.*

If deemed desirable, a formal assignment of the incor-
porators’ subscriptions may be employed as in the form which
follows.

Form 30.—Assignment of Incorporators’ Subscriptions.

em mm em me ew wee eee ee eee een eee eee eae Ce

ASSIGNMENT,

 

e

We, the undersigned, being all the incorporators of the Automatic Ap-
pliance Company, in consideration of the sum of One Dollar to each of us
in hand paid, the receipt whereof is hereby acknowledged, and for other
good and valuable considerations, do hereby sell, assign and make over
unto Henry W. McCabe the stock of the Automatic Appliance Company
respectively subscribed for by us, and do hereby authorize and instruct the
officers of said Company to issue said stock to the order of said Henry W.
McCabe upon completion of the terms of our subscriptions.

* See v. Heppenheimer, 69 N. J. Eq. 36 (1905) ; Knickerbocker, etc., Co. v. Assessors, 74
N. J. L. 583 (1907).
FORMS FOR FIRST MEETINGS. 237

This assignment is conditioned upon the acceptance by said Automatic
Appliance Company of said McCabe’s proposition of this date to exchange
property for the entire capital stock of said Company, and, after such ac-
ceptance is not to be effective, until, in pursuance thereof, the said McCabe
has made due and formal tender of payment for said capital stock accord-
ing to the terms of his said proposition.

Witness our hands and seals this 10th day of January, 1909.

Francis JOHNSON. (1. s.)
Wits T. Harriman. (1. s.)
Joun M, Situmman. (1. s.)
Frank W. Jones. (L. s.)
Harrison FREEMAN, (L. s.)

This assignment when employed is usually either written
on the same sheet as the proposition for exchange of prop-
erty for stock or otherwise is attached thereto. Under its
conditions the incorporators cannot lose their qualifying stock
until after the first meetings.

The minutes of the respective meetings of the stockholders
and directors should give complete and accurate records of the
proceedings in connection with the exchange of stock for prop-
erty. The forms of resolutions which follow are appropriate
if the proposal is to be accepted.

Form 31.—Exchange of Property for Stock. Stockholders
Resolution.

Wuereas, A proposition has been received from Mr. Henry W. Mc-
Cabe, offering to sell, assign and convey to this Company the plant, lease,
property and business of Henry W. McCabe & Co., as a going concern, in
exchange for the entire capital stock of this Company; and

Wuerzeas, It appears to the stockholders of this Company that the said
property and business are desirable for the purposes of the Company and
are reasonably worth the purchase price thereof.

Now, Tuererore, Be It Resotven, That the said proposition for the
exchange of said property and business for the entire capital stock of this
Company, as set forth in said proposition, be and hereby is approved, and
the Board of Directors of this Company are hereby authorized, empowered
and instructed to accept the said proposition and to cause the entire capital
stock of the Company to be issued for the said property and business, in
accordance with its terms.

(See § 46.)
238 NEW YORK CORPORATIONS.

Form 32.—Exchange of Property for Stock. Directors’
Resolution.

WuereEas, The property offered in exchange for the Capital Stock of
this Company by Mr. Henry W. McCabe in his proposition to the Com-
pany is adjudged by this Board to be of the reasonable value of Thirty
Thousand Dollars ($30,000), and to be necessary for the use and lawful
purposes of the Company.

ReEsoivep, That the said property and business be and hereby are, in
accordance with the authorization and instructions of the stockholders of
this Company, accepted in full payment for the said capital stock of the
Company, in accordance with the terms of said proposition; and the proper
officers of this Company are hereby authorized and directed to receive the
duly executed transfers and assignments of the property and business
specified in said proposition and to issue in exchange therefor the entire
stock of the Company, all full-paid and non-assessable, to such person or
persons as may be designated by the written orders of the aforementioned
Henry W. McCabe, except as to the shares subscribed for by the incor-
porators, which shall be issued to them or their order,

It is to be noted that the decisive action is taken by the
directors in the foregoing resolution, and that the stock-
holders’ resolution merely approves the transaction and
authorizes the directors to take action. This authorization,
though usual and advisable as a precautionary measure, is. not
essential, the directors having full power to act without the
stockholders’ concurrence. (See § 50.)

Form 33.—Minutes. Stockholders’.

RS Ree ee Se re ee ie ee ewe 9 Oe ea le ee, ere ee ele wee ee eS

Minutes oF First MEETING oF STOCKHOLDERS
of the
AUTOMATIC APPLIANCE COMPANY.

Held January 12, 1909.

Pursuant to written call and waiver of notice, the first meeting of
stockholders of the Automatic Appliance Company was held in the office
of Wilton & Clough, 170 Broadway, New York City, at 10 A. M., on the
twelfth day of January, 1909, with all the stockholders present, either in
person or by proxy.

Mr, Harrison Freeman was chosen Chairman and called the meeting
to order. Mr. Frank W. Jones was appointed Secretary of the meeting.
FORMS FOR FIRST MEETINGS. 239

The following stockholders were present in person:

SHARES
NAME, SUBSCRIBED.
Harrison Freeman ............ 0.0 cece ceeecucecueucuaeevees I
Pearike “W.,. Jones: 3.264. 2avewvarstavcusch wu gces oe davtandve s oe vate Saaehles I
Willis: {0 arniman’ a jcvutnenk nb ox eck eaten atic’ ureeeces I

The following stockholders were present by proxies duly presented
and filed with the Secretary:

SHARES
NAME. NAME OF PROXY. SUBSCRIBED.
John M. Silliman ........... Frank McPherson ............ I
Francis Johnson ............- Samuel Weldon .............. I

The Secretary presented the call and waiver of notice, pursuant to
which the meeting was held, duly signed by all the incorporators of the
Company. Said call and waiver was ordered spread upon the Minute
Book immediately following the minutes of the meeting.

' The Chairman then presented a copy of the Certificate of Incorpora-
tion of the Company and stated that said certificate had been filed with
the Secretary of State and recorded by him on the sixth day of January,
1g09, and that a duplicate copy had been filed for record with the County
Clerk on the eighth day of January, 1909.

Upon motion, duly made and carried, said Certificate of Incorporation
was ordered received, the Directors named therein were recognized as the
Directors of the Company, and the Secretary was instructed to spread the
said Certificate in full upon the first pages of the Book of Minutes.

The Chairman also presented a form of by-laws, prepared by the
Counsel of the Company, which was read and adopted, article by article,
and, as a whole, unanimously adopted as the by-laws of the Company, and
ordered entered in the Minute Book immediately succeeding the Certificate
of Incorporation. __

The Secretary then presented a written proposal from Mr. Henry W.
McCabe, of Nos. 167-9 Centre St., New York City, offering to transfer
and assign to the Company certain property and business, as set forth in
said proposal in exchange for the entire capital stock of the Company.

After due consideration said proposal was ordered received and the
following resolution in regard thereto was moved, seconded and passed
by unanimous vote:

(See Stockholders’ Resolution, Form 31.)
There being no further business before the meeting, it was adjourned.

Frank W. Jones,
Harrison FREEMAN, Secretary.
Chairman.

Pursuant to the instructions of the foregoing minutes, the following
instruments are entered herein preceding the minutes of the present meet-
ing:

(1) Certificate of Incorporation of the Automatic Appliance Company.

(2) By-laws of the Automatic Appliance Company.

And the instrument given below follows the minutes of the present
meeting :
Call and Waiver of Notice of Stockholders’ First Meeting.
240 NEW YORK CORPORATIONS.

The various instruments received during the course of
a meeting are frequently embodied in the minutes instead of
preceding or following them. There is no objection to this
arrangement save that it interferes with the continuity of the
text.

The proposition for exchange of property for stock might
have been entered in full on the stockholders’ minutes but is
better reserved for inclusion in the minutes of the directors’
meeting where the final and conclusive action is taken. If en-
tered on the minutes of the stockholders’ meeting, it should
appear again on the minutes of the directors.

Form 34.—Minutes. Directors’.

MINUTES oF THE First Mertinc oF DrrEcrors
of the
AUTOMATIC APPLIANCE COMPANY.

Held January 12, 1909,

Pursuant to written call and waiver of notice, the Board of Directors
of the Automatic Appliance Company held its first meeting in the office
of Wilton & Clough, 170 Broadway, New York City, at 11 A. M., on the
twelfth day of January, 1909.

Mr. Harrison Freeman was chosen temporary Chairman and called the
meeting to order. Mr, Frank W. Jones was appointed Secretary pro tem.

There were present Messrs. Harrison Freeman, Frank W. Jones, Wil-
liam Jasper, Henry M. Frenckel and Francis Johnson, constituting the en-
tire membership of the Board. :

On request of the Chairman, the Secretary presented the Call and
Waiver of Notice, pursuant to which the meeting was held, duly signed by
all the members of the Board. It was ordered spread upon the Minute
Book immediately following the minutes of the meeting.

The Chairman then presented a form of by-laws adopted by the
stockholders at their first meeting, and stated that the next order of busi-
ness as set forth therein was the election of a President, Vice-President,
Secretary and Treasurer, to serve for the ensuing corporate year and until
the election and acceptance of their successors. The following officers
were then elected by unanimous vote:

President.......0.0eeeeeeeeees Harrison Freeman.
Vice-President.............005 Francis Johnson,
Secretary and Treasurer...... Frank W. Jones.
FORMS FOR FIRST MEETINGS. 241

The permanent officers of the Company thereupon took charge of the
meeting.

By motion, duly seconded and passed, the amount of the Treasurer’s
bond was fixed at $2,500, such bond to be in form and with sureties ap-
proved by the Board,

The Treasurer-elect then presented a bond for said amount signed by
himself as principal, and by the Fidelity Guarantee Company, of New York
City, as sureties. The form of the instrument and the sureties thereon
meeting with the approval of the Board, the bond as presented was for-
mally accepted and placed in custody of the President.

The Secretary then presented a form of stock certificate for approval,
which was by motion adopted as the stock certificate of the Company, and
the Secretary was instructed to spread the said form upon the pages of
the Minute Book immediately following the record of the meeting then in
progress.

The President then presented a written proposal from Mr. Henry W.
McCabe, of Nos, 167-9 Centre St., New York City, offering to assign to
the Company, in exchange for its entire Capital Stock, certain specified
property and business. The said proposal was ordered spread in full upon
the minutes and is as follows:

(See Form 29.)

The President also presented a resolution of the stockholders, approv-
ing the said proposal and authorizing and instructing the Directors to ac-
cept the same and to take such action in regard thereto as might be neces-
sary to make such acceptance fully effective.

The following resolution was thereupon moved, seconded and unani-
mously adopted.

(See Directors’ Resolution, Form 32.)

Upon motion duly made, seconded and passed, the following resolu-
tion was adopted:

Resotvep, That the Treasurer be and hereby is authorized and
instructed to open an account for the Company with the Mercantile
National Bank of New York City, and to deposit therein all the
funds of the Company coming into his custody; such account to be
in the name of the Company and funds deposited therein to be with-
drawn only by check signed by the Treasurer and countersigned by
the President.

The following motions were then made, seconded and duly passed by
the unanimous vote of all present:

Movep, That the President be hereby authorized to lease for the
use of the Company such suitable office or offices in this City as may
be necessary for the proper transaction of the Company’s business,
such lease to be for one year, with privilege of renewal, at an an-
nual rental not exceeding $1,200, and the office so secured to be the
principal office of the Company within the State of New York.

Movep, That the Secretary be hereby instructed to purchase all
such record, stock and transfer books and all such books of account
and stationery and office supplies as may be necessary for the proper
operation and record of the Company’s business.

Movep, That the Secretary be instructed to prepare, in due and
proper form, a certificate of the payment of one-half the capital
stock of the Company, and, after the due execution and verification
242 NEW YORK CORPORATIONS.

thereof, to file said certificate as required by law, and to spread a
copy thereof upon the pages of the Minute Book following the rec-
ord of the present proceedings. :
Movep, That the Treasurer be and hereby is authorized and di-
rected to pay out of the funds of the Company the sum of five hun-
dred dollars or so much of it as may be necessary to defray the cost
of incorporation of the Company and the expenses incident thereto.
Movep, That Messrs. Henry W. Wilson and Frank Freeman be
hereby appointed inspectors of election to serve at the first annual
election of Directors of the Company, and at any election of direc-
tors by the stockholders previous thereto.
There being no further business for consideration, the meeting was
adjourned.
Frank W, Jones,
Harrison FREEMAN, Secretary.
President,

Pursuant to the instructions of the preceding minutes, the following
instruments are hereunto appended in the order given:

(1) Call and Waiver of Notice.

(2) Form of Stock Certificates,

(3) Certificate of Payment of One-half Capital Stock.

The proposal for exchange of property for the stock
of the company might have been entered with the other instru-
ments immediately following the record of the proceedings,
but it is used so directly as a basis for the subsequent pro-
ceedings that it is perhaps better incorporated in the minutes
as shown. (See § 48.)

ASSIGNMENT AND AGREEMENT.

Aw AGREEMENT entered into on the 14th day of January, 1909, by and
between Henry W. McCabe, of New York City, and the Automatic Ap-
pliance Company, a corporation organized under the laws of the State of
New York;

Wuereas, On the 12th day of January, 1909, the said McCabe by
written proposition did offer to the said Automatic Appliance Company
the entire business heretofore conducted under the firm name of Henry
W. McCabe & Company for the manufacture of gas and electric fixtures,
at Nos, 167-9 Centre Street, New York City, in exchange and full pay-
ment for the capital stock of the said Automatic Appliance Company of
the par value of Thirty Thousand Dollars ($30,000), the stock subscribed
for by the incorporators being included therein with their consent; and
FORMS FOR FIRST MEETINGS. 243

WHEREAS, Said proposition of the said McCabe was accepted in ac-
cordance with its terms by the said Automatic Appliance Company at a
duly assembled meeting of its directors held on the 12th day of January,
1909, said directors being authorized thereto by a duly adopted resolution
of the stockholders of said Company:

Now, THEREFORE, For and in consideration_of the entire capital stock
of the said Automatic Appliance Company of the par value of Thirty
Thousand Dollars ($30,000) to him issued, full-paid and non-assessable,
the receipt whereof is hereby acknowledged, the said McCabe does hereby
transfer, assign and convey as a going concern the entire business hereto-
fore conducted under the firm name of Henry W. McCabe & Company
for the manufacture of gas and electric fixtures, at Nos. 167-9 Centre
Street, New York City, and the good-will thereof, and the lease of said
premises and the firm property now therein and thereon, consisting of the
stock on hand and in process of manufacture, raw material, tools, machin-
ery, supplies and apparatus of every kind, together with all the prop-
erty of every description belonging to said firm, including ll
cash on hand and in bank, amounting at this date to $1,225.35;
all bills and accounts receivable, and the ownership and use of the present
firm name and all trade-marks, formule, secret processes and patents be-
longing to or employed by the said business; all to have and to hold and
to operate and enjoy as fully and completely and to the same extent as
has hitherto been done by the said Henry W. McCabe & Company.

And the said Henry W. McCabe does hereby state, agree and under-
take that, as the sole owner thereof, he has full right, power and author-
ity to sell, dispose of and convey the said business of Henry W. McCabe
& Company as herein set forth, and that all outstanding bills and obliga-
tions of said business of every kind now due or to become due, do not ex-
ceed the amount of Twelve Hundred Dollars ($1200).

And on its part said Automatic Appliance Company does take over
the said business as a going concern, hereby assuming all outstanding con-
tracts and bills and obligations of every kind, and does undertake and
agree to hold said Henry W. McCabe clear and free from all liability on
account of the present obligations of said business, save and unless said
obligations shall be found to exceed the amount of Twelve Hundred
Dollars ($1200), in which case said Henry W. McCabe shall be liable for
and shall pay all such excess amount.

In Witness Wuereor, the said Henry W. McCabe has hereunto
affixed his signature and seal, and the said Automatic Appli-
ance Company has hereunto affixed its signature by its Presi-
dent, duly authorized thereunto, and has evidenced the same
by its duly attested seal, all on the day and year first above

mentioned.
Henry W. McCase. [L. s.]
CORPORATE Automatic APPLIANCE COMPANY,
{ SEAL. By Harrison Freeman,

President.
Attest Seal:
Franx W, Jongs,
Secretary.
CHAPTER XXIII.
FORMS FOR MEETINGS.

(1) STocKHOLDERS’ MEETINGS.
(a) Proxies.

Form 36.—Proxy. Simple.

Cem meee me meee ee em eee ere reer ase rene sear eevee essence erene

 

Know Att Men By Tueset Presents, That I, the undersigned, do
hereby constitute and appoint John Calhoun my true and lawful attorney
to represent me at all meetings of the stockholders of the Corliss Malting
Company, and for me and in my name and stead to vote thereat upon the
stock standing in my name on the books of said Company at the times of
said meetings, and I hereby grant my said attorney all the powers that I
should possess if personally present.

Witness my signature and seal this 20th day of January, 19009.

Wiiuam H. Cores. [L.s.]
In presence of
FREDERICK SPENCER.

Ce

This proxy is simple as to form, but is broad in its scope.
It is unlimited as to time, and, until revoked or terminated by
some statutory limitation, applies to every stockholders’ meet-
ing, regular, special or adjourned. (See G. C. L., § 26.)

Form 37.—Formal Proxy. Annual Meeting.

Ce i

ANNUAL STOCKHOLDERS’ MEETING.

Know Att Men By Tues Presents, That I, the undersigned, a
stockholder in the Carston Casting Company, of Troy, New York, do
hereby constitute and appoint Jasper Wellman my true and lawful attor-

244
FORMS FOR MEETINGS. 245

ney, with full powers of substitution and revocation to represent me and
for me and in my name, place and stead, to vote upon the stock of said
corporation standing in my name, or upon which I then may be entitled to
vote, at the annual meeting of the stockholders of said corporation, to be
held on the 8th day of February, 1909, and at any meeting postponed or
adjourned therefrom, hereby granting to my said attorney full power and
authority to act for me at said meeting and in my name and stead to vote
thereat upon my said stock in the election of directors and in the trans-
action of such other business as may be brought before said meeting, all
as fully as I might or could do if personally present, and I hereby ratify
and confirm all that my said attorney or his substitute shall lawfully do
at such meeting in my name, place and stead.

In Witness Wuereor, I have hereunto affixed my signature and
seal this second day of February, 1909.

SAMUEL WELLMAN. [L.8.]
In presence of
Harrison WILSON.

This proxy is specific and formal. It does not convey
any greater or more complete powers than the short form al-
ready given. It is, however, conventional and will be found
more satisfactory under formal conditions or where matters
of much importance are to be considered. It may readily be
adapted to apply to any meeting by substituting “at any and
all regular or special meetings of the stockholders of said cor-
poration, and at any meeting or meetings adjourned there-
from” in place of “at the annual, etc.,”’ and changing the
matters to be acted upon to “any and all matters brought
before said meeting or meetings.” (See § 104.)

Form 38.—Proxy for Specific Action.

 

Know Att Men By Tuese Presents, That I, the undersigned, do
hereby constitute and appoint John H. Gale my true and lawful attorney
to attend a special meeting of the stockholders of the American Cereal
Company, to be held at the principal office of said Company, No. 120
Broadway, New York, at Io o’clock A. M., on the 15th day of April, 19009,.
and for me and in my name, place and stead, to vote thereat the stock then
standing in my name on the books of the said Company against any and
all propositions for the sale of the entire assets of said American Cereal
Company, and I do hereby grant my said attorney full power and author-
ity to so vote, and do hereby ratify and confirm his action in so doing, ex-
246 NEW YORK CORPORATIONS.

pressly denying, however, to my said attorney all right, power and author-
ity to act for me or to vote in my behalf on any other matter or matters
coming up at said meeting.

In Witness Wuereor, I have hereunto affixed my signature and
seal this 9th day of April, 1909.
Joun T. McCrettanp. [t.s.]

Witness :
Francis T. McVey.

The power conveyed by this proxy is limited strictly to
the action set forth and to the meeting mentioned.

If desired, the voting power of a proxy may be limited
to a portion of the stock owned; or two or more proxies
may be given by the same party, provided only that their total
does not exceed the amount of stock owned by him.

Form 39.—Revocation of Proxy.

Ce

REVOCATION OF Proxy.

 

I, the undersigned, do hereby revoke and annul any and all proxies
or powers of attorney heretofore given by me, as far as the same may
authorize or empower any person or persons to represent me, vote in my
name and stead, or act for me in any way whatsoever, at any meeting or
meetings of the stockholders of the Corliss Malting Company.

Witness my signature and seal this fifth day of March, 1909.
Natuan Goopuue. [L.s.]

In presence of
Harvey McKay.

The usual proxy is revocable at any time by the maker.
The sale of his *tock automatically revokes all outstanding
proxies, as does also the presentation at a meeting of a proxy
of later date. A formal revocation, as given in the preceding
form, is preferable to the incidental revocation of a subse-
quent proxy. When proxies are given superseding outstand-
ing proxies, the revocation of these is usually incorporated in
the later proxy.
FORMS FOR MEETINGS. 247

(b) Calls and Notices.
Form 40.—Call for Special Meeting.

Bw me ewe ewe ee eee ee wee wm we ee eee wm ee mee eee erer eter eererene

CALL For SPECIAL MEETING oF STOCKHOLDERS.

 

We, the undersigned, Directors of the Buffalo Flouring Mills, do here-
by call a special meeting of its stockholders to be held in the Company’s
office, 175 Lake Street, Buffalo, New York, on the 25th day of February,
1909, for the purpose of considering and acting upon a proposition to con-
solidate the Company with the Lakeside Mills, of Buffalo, and for the
transaction of any and all business necessary in connection therewith, and
we hereby authorize and instruct the Secretary of the Company to send
out notices of said special meeting in accordance with the by-law require-
ments.

Buffalo, New York, Henry GILLETTE.
February 12, 1909. Rosert Morris.
Rocer Howarp.
SAMUEL MarsHALL.
Wiiram T. RAMSDELL.

The method of calling a special meeting should be pre-
scribed by the by-laws and is usually either by some designated
proportion of the board of directors, or of the stockholders,
or by the president. A call by resolution of the board of direc-
tors is always proper. The call for a special meeting is handed
the secretary and it is then the duty of that official to send out
the proper notices in accordance with the call.

Form 41.—Notice of Special Meeting.

BUFFALO FLOURING MILLS,
175 Lake Street, Buffalo, New York.

 

To the Stockholders of the
BurraLo FLourinc Mitts:

Notice is hereby given that a special meeting of the stockholders of the
said corporation will be held at the office of the Company, No. 175 Lake
Street, Buffalo, New York, on the 25th day of February, 1909, for the pur-
pose of considering and acting upon a proposition to consolidate the Com-
248 NEW YORK CORPORATIONS.

pany with the Lakeside Mills, of Buffalo, and for the transaction of any
and all its business necessary in connection therewith.

By order of the Directors.

Henry T. AmpurcH,
February 13, 1909. Secretary.

The notice of a special meeting should always state the
authority under which it is issued—a requirement that is
frequently neglected. (For statutory requirements as to no-
tice, see § I0T.)

Form 42.—Notice of Annual Meeting.

ALBANY MILLING COMPANY,
142 Capitol Street, Albany, New York.

March 2, 1909.

Mr. Francis C. WILson,
170 Broadway, New York,

Dear Sir:—You are hereby notified that the Annual Meeting of
Stockholders of the Albany Milling Company will be held in the Com-
pany’s office, 142 Capitol Street, Albany, New York, at 10 A. M., Tuesday,
March 23, 1909, for the election of directors and the transaction of such
other business as may come before the meeting.

The stock transfer books will be closed March 13, 1909, at 3 o’clock
P. M., and remain closed until 10 o’clock A. M., March 24, 1909.

Respectfully,

Henry Ine,
Secretary.

Under the New York statutes the notice of annual meet-
ing, or of any otMer election of directors, must be published
at least once in each week for two successive weeks immedi-
ately preceding the election, in a newspaper published in the
county where the election is to be held. (See S. C. L., § 25.)
This is in addition to the notice prescribed by the by-laws.
(See Chap. X, “Stockholders’ Meetings.’”’) Usual forms of
publication notice are as follows:
FORMS FOR MEETINGS. 249

Form 43.—Notice of Annual Meeting. Publication.

Ce

MONTGOMERY TRUST COMPANY.

New York, January 2, 1909.

The Annual Meeting of the Stockholders of the Montgomery Trust
Company will be held at the office of the Company, 138 Nassau Street,
New York, on Wednesday, January 20, 1909, at 12 o’clock noon.

The transfer books close at 3 o’clock P. M., January 18, 1909, and re-
open at 10 o’clock A. M., January 21, 1909.

H, M. FRanxuin,
Secretary.

ee

NEW YORK BUILDING COMPANY,
77 Cedar Street.

New York, January 4, 1909.

Notice is hereby given that a meeting of the stockholders of the New
York Building Company will be held at the office of the Company, No. 77
Cedar Street, on the twenty-fifth day of January, 1909, at 12 o’clock noon,
for the purpose of electing five Directors for the ensuing year, and two
Inspectors of Election, to serve at the next annual meeting, and for the
transaction of such other business as may properly come before said meet-
ing. Polls will remain open until 12.30 P. M.

WILLIAM SCHERMER,
Secretary.

Cy

2 ry

SOUTHERN EXPORT COMPANY.
ANNUAL MEETING.

120 Broadway, New York,
February 19, 1909.

The annual meeting of the stockholders of the Southern Export Com-
pany will be held at the office of the Company, 120 Broadway, New York,
on Wednesday, April 7, 1909, at 11 o’clock A, M., for the election of direc-
250 NEW YORK CORPORATIONS.

tors, and in addition thereto for the following purposes: (1) To approve
and authorize the purchase of the entire capital stock of the New York and
Norfolk Steamship Company. (2) To amend the by-laws by the addition
of a provision extending the powers of the Executive Committee. (3) To
transact all such other business as may legally come before the meeting, in-
cluding the approval and ratification of all actions of the Board of Direc-
tors and of the Executive Committee since the last annual meeting of the
stockholders of the Company.

For the purposes of the meeting the books for the transfer of stock,
both preferred and common, will be closed at 3 o’clock P. M., on Monday,
March 15, 1909, and will be reopened at 10 o’clock A. M., on Thursday,
April 8, 1909.

Franx H. McCutoucn,
Secretary.

(c) Inspectors’ Oaths and Certificates.

The New York statutes require the appointment of inspec-
tors of election, who take entire charge of and conduct the
election of directors. ‘For the first annual meeting, and for
any special election of directors preceding, the inspectors are
appointed by the board of directors. Thereafter they are elect-
ed or appointed in such manner as prescribed by the by-laws.
The number of inspectors is not limited, but at least two are re-
quired. The inspectors are sworn to the faithful discharge
of their duties, and are required to prepare, sign and acknowl-
edge a certificate showing the result of the election conducted
by them. The inspectors’ oath and certificate must be filed
with the clerk of the county in which the election is held.
(S.C. L., § 31.)

Form 46.—Oath. Inspectors of Election.

cc

OatH oF INSPECTORS.

State of New York,
County of Albany.

We, the undersigned, duly appointed to act as Inspectors of Election
at the Annual Meeting of the Stockholders of the Hudson River Transpor-
tation Company, to be held in the office of the Company, 132 State Street,
Albany, New York, on the 23d day of March, 1909, being severally duly
sworn, depose and say, and each for himself deposes and says, that he will

SS.
FORMS FOR MEETINGS. 251

faithfully execute the duties of Inspector of Election at such meeting with
strict impartiality and according to the best of his ability.
Franz HELMSBUND.
Witvarp Davis.
Sworn to before me this
23d day of March, 1909.
Henry T. BieEssinc,
Notary Public for Albany County.
a
SEAL.

Form 47.—Certificate. Inspectors of Election.

CERTIFICATE OF INSPECTORS OF ELECTION.

We, the undersigned, the duly appointed Inspectors of Election of the
Hudson River Transportation Company, of Albany, New York, do hereby
certify that at the regular annual meeting of said corporation held at the
office of the Company, 132 State Street, Albany, New York, on the 23d
day of March, 1909, a quorum being present, we, being first duly sworn by
oath hereunto annexed, did conduct the election for directors of said corpo-
ration, and that the result of the vote taken thereat was the election, by
the plurality vote set opposite their respective names, of the following di-
rectors:

VOTES

NAMES RECEIVED
Harmon S. MeNeill, scocssscecacimaween se oeaeedy a ates Stee at ina 1,542
Martin: .B:, S€VERY” si.4 deviant Mi2a9 wEawlandud Atala hiamemen modelo 1,542
Sherman -Albworths swsicewranoeegys aecaiios tae aoe gu oer boeeee es 1,542
Willis: MeCab@ s..404 viweneae cy cea ae eeeeev ec enesdanemwane bos cee e 1,100
Harrison (Gatland: 5 .cncanuncanvsbdvearna Racy aed odarsg Alamein» amaweeinre 1,092
Wallis: Mclean. vjcccccsacspccad pied ons au Ae canis array oe 1,092
Walliant Ps Knight: -vecsene eee se cag atuamas weeones ¥ aeenee See eee T,002

In Testimony WHEREOF, we have executed this certificate this 23d
day of March, 1909.
Franz HELMSBUND.
Witiarp Davis.

(See S. C. L,, § 31.)

Form 48.—Acknowledgment of Inspectors’ Certificate.
Strate oF NEw York,
County of Albany,

On this 23d day of March, 1909, before me personally came Franz
Helmsbund and Willard Davis, to me known and known to me to be the

SS.e
252 NEW YORK CORPORATIONS.

persons described in and who executed the foregoing certificate and sev-
erally acknowledged that they executed the same for the use and purposes
herein set forth,

Henry T. BLEssInc,
Notary Public for
Albany County.
{ Sear
SEAL,

(For fees, see Part III, Table 3.)

The inspectors’ oath and their duly acknowledged certifi-
cate are either arranged on one sheet of paper or on attached
sheets and are filed together in the county clerk’s office. (See
¢
§ 108.)

(d) Minutes.

Form 49.—Minutes of Annual Meeting.

Cy

STILLWELL MANUFACTURING COMPANY
of
New York.

MInuTEs oF ANNUAL MEETING OF STOCKHOLDERS,
Held April 7, 1909.

The stockholders of the Stillwell Manufacturing Company met in An-
nual Meeting in the office of the Company, No, 380 Broadway, New York,
at 11 o’clock A. M., April 7, 1909.

The meeting was called to order and presided over by Frederick S.
Sheldon, President of the Company. The record of the meeting was kept
by the Secretary of the Company, John T. McFergus.

The Secretary, after noting the stockholders present, reported that out
of a total of 1000 shares outstanding and entitled to vote at the meeting,
700 shares were represented in person and 200 shares by proxies filed with
the Secretary. e

The Secretary then presented the notice of the meeting, with his cer-
tificate attached, showing that a copy thereof had been mailed to each stock-
holder of record on or before the 20th day of February, 1909. He also pre-
sented copies of the New York Times, under date of February 20, Feb-
ruary 27 and April 6, containing due advertisement of the meeting. The
proof of notice as presented was ordered received and filed.

The minutes of the preceding annual meeting were read and approved,
The minutes of the special meeting of the stockholders held January 7,
1909, were also read and approved.

The President then appointed Messrs, John H. Harrison and Harvey
L. Mcl,ane Inspectors of Election, who, being duly sworn, proceeded to
FORMS FOR MEETINGS. 253

conduct the election of Directors. The election was held by ballot and, as
shown by the Inspectors’ report, Messrs. Frederick S. Sheldon, Malcolm
McDougall, Henry T. Fremont, Samuel F. McKay, George H. Bronson,
Frank McCarroll and Nelson Willis received a plurality of all the votes cast.
Said parties were thereupon declared to be the duly elected directors of the
Company for the ensuing year and until the election of their successors.

The annual report of the President was then presented to the meeting
and upon request was read by him. The report was, by motion, unani-
mously carried, ordered received and filed.

The Treasurer’s annual report was submitted and, by motion, unani-
mously carried, was approved and ordered received and filed.

The Secretary then presented the Minute Books of the Board of Direc-
tors and of the Executive Committee for the inspection of the stockholders
present. Upon motion duly passed and unanimously carried, all actions
of the Board of Directors and of the Executive Committee since the last
annual meeting of the Stockholders of the Company were approved and
ratified,

There being no further business before the meeting, it was adjourned.

Joun T. McFercus,
Secretary.
FrepericK S. SHELDON,
President.

(2) Drrectors’ MEETINGS.

Form 50.—Call. Special Meeting of Directors.

ee eee wee meee oe ee Y eee

THE FREMONT STEAMSHIP COMPANY,
133 South St., New York,

April 12, 1909.
To the Secretary of the
Fremont STEAMSHIP COMPANY:

In accordance with the authority vested in me by the by-laws of this
Company, I hereby call a special meeting of the Board of Directors to be
held in the office of the Company at 3 P. M., on the 15th day of April, 1909,
for the purpose of acting upon the resignation of the Treasurer of the Com-
pany, Mr. John Ellis, for the election of his successor and for the transac-
tion of any other business in connection therewith that may be necessary ;
and you are hereby instructed to send out notices of said meeting as re-
quired by the by-laws of this Company.

WILHELM Von LossBERGH,
President.

eaters Come ere ee mee ee eraser een oer erer ers e rear reer eereerene

(See § r2sb.)

When this call is handed to the secretary, it becomes the
duty of that official to see that the required notices of the
254 NEW YORK CORPORATIONS.

meeting are duly sent out. The form of this notice would
be about as follows:

Form 51.—Notice. Special Meeting of Directors.

THE FREMONT STEAMSHIP COMPANY,
133 South St., New York,

April 13, 1909.
Mr. James B. Hartiericu,
178 West End Ave., City.

Dear Sir:—You are hereby notified that, pursuant to a call of the
President, a special meeting of the Board of Directors of this Company will
be held in its office at 3 P. M., on the 15th day of April, 1909, for the pur-
pose of acting upon the resignation of the Treasurer of the Company, Mr.
John Ellis, for the election of his successor, and for the transaction of such
other business in connection therewith as may be necessary.

Respectfully,

WILuis CaREy,
Secretary.

i

When the board of directors is of moderate size, special
meetings are frequently called without formal notice by means
of the call and waiver.

Form 52.—Call and Waiver. Special Meeting of Directors.

mee ew wee ewe eee ee ee tm mee ee eer eee tere eee tee me eee ee eee

Catt AND WAIVER.
SPECIAL MEETING OF DIRECTORS.

We, the undersigned, all the Directors of the Franklin News Syndicate,
do hereby call a special meeting of the Board of Directors of said Company,
to be held in its office, No. 79 Park Place, New York City, at 3 o’clock
P. M., on this 22d day of April, 1909, to consider and act upon a proposition
for an exchange of news matter with the Baring Associated News Com-
pany of Chicago, and we do hereby waive all statutory and by-law require-
ments as to notice of time, place and purposes of said meeting, and consent
to the transaction thereat of any and all business pertaining to the affairs
of the Company.

New York City, N. Y., Joun H, Franx.in.

April 22, 1909. SamMuEL T. Harpine,
Frank T. Morris,
James H. McCatt.
Horace Oswa tp.
FORMS FOR MEETINGS. 255

Form 53.—Notice. Regular Meeting of Directors.

WILLIS MACHINE COMPANY,
175 Broadway, New York.

February 11, 1909.
Mr. Herman T. McCat,
158 Broadway, New York.

Dear S1r:—You are hereby notified that the regular monthly meeting
of the Board of Directors of the Willis Machine Company will be held in
the Company’s office, 175 Broadway, February 18, 1909, at 10 o’clock A. M.

Respectfully,
Henry M. Gate,
. Secretary.

(See § 125b.)

Form 54.—Minutes. Regular Meeting of Directors.

eC

WESTON CEMENT COMPANY.

MINUTES oF REGULAR MEETING oF DrREcTorS
Held April 14, 1909.

The Board of Directors of the Weston Cement Company of New York
assembled in regular meeting in the office of the Company, at Weston, New
York, at 3 o’clock P. M., April 14, 1900.

The meeting was called to order and presided over by Henry M. Wal-
lace, President of the Company. John H. Woodale, Secretary of the Com-
pany, acted as Secretary of the meeting,

Present: Messrs. Henry M. Wallace, Harvey H. Townsend, William F.
Leighton, George J. Ainsworth and Harry M. Williams, constituting a
quorum of the Board.

The minutes of the preceding meeting of March 15th were read and
approved.

The President reported that the plant of the Company was rapidly ap-
proaching completion, that the machinery was practically all installed, and
that actual operations should begin within the next thirty days.

The President also reported that, in accordance with the instructions
of the board, contracts had been entered into with the Howard Sales Com-
pany of New York City for the delivery of 20,000 barrels of cement, be-
ginning July 1, 1909, at the rate of not less than 3000 barrels a month,
the price to be $1.58 per barrel, and payment to be made at ninety days from
date of each shipment.

The Treasurer submitted his written report for the month ending April
10, 1909, showing a cash balance on hand of $40,225. The Treasurer fur-
256 NEW YORK CORPORATIONS.

ther stated that the outstanding obligations of the Company for construc-
tion work, machinery, etc., falling due within the next thirty days, would
aggregate $35,425. He also stated that the expenses incidental to begin op-
erations would probably require from ten to fifteen thousand dollars more,
and asked the Directors to provide for these requirements. The Treasurer
also suggested that under the terms of the subscription, a ten per cent. call
could be made upon the subscribed stock of the Company and that this, if
done, would provide at least $35,000 in cash—an amount ample to carry the
Company through to a producing basis.

Mr. George J. Ainsworth thereupon stated that some very desirable
cement properties had been offered the Company, which, if purchased, as
he believed was advisable, would require an additional amount of cash. He
therefore asked the Board to adjourn without action upon the Treasurer’s
recommendations until the following day, when he would be prepared to
make a full report, and when such action could be taken in regard to the
Company’s finances as might seem desirable,

In the absence of objection, the President thereupon declared the meet-
ing adjourned until April 15, 1909, at 3 o’clock P. M., then to reassemble
in the office of the Company.

Joun H. Woopate,
Secretary.
Henry M. WaALLAcE,
President.
CHAPTER XXIV.
SIGNATURES AND CERTIFICATIONS.

Form 55.—Official Signatures.

See e ee eer ene ese essen se eee se ees ener reser ee verses oenvesese

(a) Harris M. CHALMERs,
President,

(b) Harris M. Coatmers,
President Chalmers Mining Company.

Ce

Official signatures such as given above are used by cor-
poration officials in informal matters, either where the trans-
action does not involve binding the corporation, or where,
if the corporation is to be bound, custom or special authoriza-
tion has empowered the signing official to act in his individual
official capacity. When the official signature is used the com-
plete form given above (b)' should always be employed, unless
by letter heading, subject matter, or in some other way, the
identity of the corporation for which the official is acting is
clearly indicated.

When important instruments are to be signed or the cor-
poration is to be bound formally, the corporate signature as
in the form which follows should be employed. This corpo-
rate signature is also frequently and properly used as the
signature to any document relating to the company business.

The first of these forms (a) shows a corporate signature
affixed by the president. The signature, save as to the name
of the signing official, is usually printed or impressed with a
rubber stamp. Any other official of the company might affix
the corporate signature with equal propriety, if authorized

257
258 NEW YORK CORPORATIONS.

thereto, or might join with the president in such signature. In
(b) is shown a formal corporate signature complete, affixed to
the testimonium—or final clause—of a corporate contract.
Where the secretary joins with the president in the corporate
signature, no attestation of the seal is necessary.

Form 56.—Corporate Signatures.

(a) CHALMERS Mrininc Company,

By Harris M. CHALMERS,
President.

(b) In Wrrness Wuergor, the said Chalmers Mining Company, party of
the first part, has hereunto caused its corporate name to be
signed by its President, and its corporate seal to be affixed by
its Secretary, and the said George T. Harding, party of the sec-
ond part, has hereunto affixed his signature and seal, all being
done in the City of New York on this seventeenth day of Jan-

uary, 1909.

— CHALMERS MINING CoMPANY,
SEAL. By Harris M. CHALMERS,
Attest Seal: President.
Henry T. WILKINS, Grorce T. Harpine. [L. s.]

Secretary.

Treasurer,

Pay to the order of the

HARRIS CoaL COMPANY,
By JOHN HaRRIs,
CHASE NATIONAL BANK,
STEEL CASTING COMPANY,
HowarRpD GOLDING, Treasurer.
SIGNATURES AND CERTIFICATIONS. 259

The first of the foregoing endorsements is the simple cor-
porate endorsement, usually affixed by the treasurer or cashier,
though the president is sometimes authorized thereto. The
second is a form employed when the instrument is deposited
for collection or credit. This latter endorsement is generally
affixed in its entirety with a rubber stamp.

A corporate acknowledgment is in form the affidavit of
one or more of the officers of the corporation as shown in the
form which follows. It has the same effect as if made by the
corporation as a legal entity. The form given is that pre-
scribed by the Real Property Law, § 309.

Form 58.—Corporate Acknowledgment.

State of New York,

County of New York. f*°5?

On the twelfth day of February, in the year 1909, before me personally
came Willard J. Cowles, to me known, who, being by me duly sworn, did
depose and say that he resides in the City of New York; that he is the
President of the Stuart & Cowles Contracting Company, the corporation
described in and which executed the above instrument; that he knows the
seal of said corporation; that the seal affixed to said instrument is such cor-
porate seal; that it was so affixed by order of the Board of Directors of said
corporation, and that he signed his name thereto by like order.

James W. Brack,
eosin } Notary Public
SEAL. for New York County.

Pm em wwe eee eee eee ee eee re eee em Hee eee eee eee eee ee Oe

Any statement, report, notice or other document pre-
pared by an officer of a corporation and requiring an affidavit,
is ordinarily certified to by the officer by whom it was pre-
pared. Any other officer having sufficient knowledge of the
matter might, however, act—the wording of the affidavit being
varied to meet the conditions—save in cases where the statutes
prescribe the signing official.
260 NEW YORK CORPORATIONS.

Form 59.—Treasurer’s Affidavit.

eee ee meee woe Oe

SiaTe oF New York, \ ;
County of New York. f**"

On this fifteenth day of February, 1909, personally appeared before me,
a Notary Public in and for the County of New York, William H. Cook,
Treasurer of the Cook Bank Note Company, who, being duly sworn, did de-
pose and say that he has full charge and control of the books and accounts
of the said Company; that the above and foregoing statement is taken from
said books and accounts; that it is a true and accurate transcript therefrom,
and that, to the best of his knowledge and belief, it is a just and correct
presentation of the financial condition of said Company on this date.

Wiiiuam H, Cook.

Sworn to before me the day

and year aforesaid.

James H. Crampton,
— Notary Public
SEAL. for New York County.

Cr oY

In active corporations the secretary is frequently called
upon to give certified copies of proceedings, resolutions, etc.
The following certifications of an extract from the minutes
and of a resolution give the general form.

Form 60.—Certification. Extract from Minutes,

HOWARD DRILLING COMPANY.
Transcript oF Minutes. Spectra MEETING of DrirEcrors.

“Pursuant to call and notice, the Board of Directors of the Howard
Drilling Company met in special meeting in the office of the Company, Feb-
ruary 15, 1909, at 2 P.M. President Arthur C. Howard presided. Secre-
tary Horace Ogden officiated as recording officer,” etc., etc.

I, the undersigned, Secretary of the Howard Drilling Company, do
hereby certify that thesabove and foregoing is a true and accurate transcript
of the minutes of the proceedings at a special meeting of the Board of Di-
rectors of said Company, held in the office of the Company on the fifteenth
day of February, 1909, at 2 P. M., to consider and act upon a proposition to
purchase and take over the entire plant and business of the McGovern Con-
tracting Company, of New York City.

In Testimony Wuereor, I have affixed hereunto my official signa-
ture and the corporate seal of said Company, in the City of
New York, on this sixteenth day of February, 1909.
ae Horace Ocven,
SEAL. Secretary.
SIGNATURES AND CERTIFICATIONS. 261

If desirable the president might with entire propriety join
with the secretary in the certification of any specially impor-
tant transcripts. In such event the introductory phrase would
be changed as follows: “We, the undersigned, President
and Secretary respectively of the Howard,” etc., and the
testimonium would also be changed to correspond: “IN TEstI-
MONY WHEREOF, we have hereunto affixed our official signa-
tures and the corporate seal,” etc.

Form 61.—Certified Resolution for Bank.

er ey

CERTIFIED RESOLUTION.

 

“REsoLveD, That the Treasurer be and hereby is authorized and
instructed to open an account for the Company with the Third
National Bank of Albany, and to deposit therein all of the funds of
the Company coming into his custody; such account to be in the name
of the Company, and funds deposited therein to be withdrawn only by
check signed by the Treasurer and countersigned by the President.”

I, Roger H. Sherman, Secretary of the Allis Drug Company, hereby
certify that the foregoing is a full and accurate transcript of a resolution
duly passed at a regular meeting of the Board of Directors of the Allis
Drug Company held in the office of said Company in Albany at 11 A. M.,
on the tenth day of February, 1909, as it appears on the minutes of said
meeting; and I do further certify that Charles Allis is the duly elected
President, and James W. Blount the duly elected Treasurer of said Com-
pany.

In Testimony Wuerkor, I have hereunto affixed my official signa-
ture and the corporate seal of said Company, this tenth day
of February, 1909.
Rocer H. SHERMAN,
CORPORATE
{ seat. Secretary.

The above is a good general form employed in opening
the corporate bank account. In many cases, however, the
banks have their own forms for this purpose which they
naturally prefer. As a rule these forms are good, though
occasionally the latitude and powers conferred upon the treas-
urer, or other officer or officers concerned in the finances of
the company are almost too broad. In such cases the bank’s
262 NEW YORK CORPORATIONS.

form can be modified to meet the wishes of the particular
corporation while still preserving the general form supplied
by the bank.

In some cases the bank will require a certified tran-
script of any by-laws relating to the custody of funds and
the duties of the officers in relation thereto. In such event
the resolution and transcript may be written on the same
sheet and be covered by one certification, modified to meet
the conditions, or each may be certified separately.

Another form of certification of a resolution is as follows:

Form 62.—Certification of Resolution.

The undersigned, Secretary of the Jefferson Bank Note Company, does
hereby certify that the foregoing resolution was duly adopted on the toth
day of March, 1909, at a meeting of the Board of Directors of said Com-
pany, regularly called and duly constituted, and at which a quorum was
present.

Witness my hand and the seal of the said corporation this 12th day of
March, 1909.
hess Frank H. StItuMan,

SEAL, Secretary.
CHAPTER XXV.
FORMS OF REPORTS.

One-half the authorized capital stock of every business
corporation must be paid in within one year of its organization
and a certificate thereof, as in the following form, must be
filed in the office of the Secretary of State and of the county
clerk within thirty days thereafter. Fees to Secretary of
State for recording same, 15 cents per folio; to county clerk,
6 cents for filing and 10 cents per folio for recording. (See
§ 74; also B.C. L., §5 and S.C. L., § 5s.)

Form 63.—Certificate. Payment One-Half Capital Stock.

THE ALDEN MANUFACTURING COMPANY,

A Corporation formed under the Business Corporations Law
of the State of New York.

CERTIFICATE OF PAYMENT OF ONE-Ha.F oF CaprtaL Stock

We, the undersigned, a majority of the Directors of the above named
corporation, do hereby certify that the capital stock of said corporation is
Twenty Thousand Dollars ($20,000) and that one-half thereof has been paid
in, and that such payment was made within one year from the incorporation
of said company and within thirty days preceding the date of this certificate
of payment and that of said paid in stock, Five Thousand Dollars ($5,000)
was issued for property purchased.

In Witness WHEREOF, we have executed this certificate in dupli-
cate, this eighth day of April, 1909.
Ennis C, CorNELt.
E. H. Davey.
Morris Porter.
264 NEW YORK CORPORATIONS.

Strate oF New York, } ,
County of Kings. s

On this eighth day of April, 1909, before me personally came Ennis C.
Cornell, E. H. Davey and Morris Potter, to me personally known and
known to me to be the individuals described in and who executed the fore-
going certificate and severally acknowledged to me that they executed the

same,
Cc. D. DuBors,
lees \ Notary Public,
SEAL. Kings County, N. Y.

State oF New York,

County of Kings. s**

Ennis C. Cornell and E. H. Davey, being severally duly sworn, each for
himself, deposes and says, that he, the said Cornell, is the president of The
Alden Manufacturing Company and that the said E, H. Davey is the secre-
tary thereof, and that the statements contained in the foregoing certificate
are true.

Ennis C. CorneEL,

President.
E. H. Davey,
Secretary.
Sworn to before me this 8th
day of April, 1909.
C. D. DuBors,
Notary Public,
eed Kings County, N. Y.
SEAL,

This certificate must be signed and acknowledged by a
majority of the board of directors and be verified by the pres-
ident or vice-president, and secretary or treasurer.

The annual official reports required of New York corpora-
tions are three in number: (1) Report to Secretary of State,
generally known as the “Annual Report.” (2) Report to
State Comptroller. (3) Local tax report. Blanks for the
comptroller’s report and the local tax report are furnished by
the authorities. Bfanks for the annual report are not so sup-
plied. (See Chap. XVI, “Reports.”’)

The annual report is perfunctory in its nature. Nothing
is based upon it, the information given, except as to the ad-
dresses, is too vague to be of value, and no penalty is imposed
for a failure to file the report unless such filing is demanded
in writing by some stockholder or creditor of the company.
FORMS OF REPORTS. 265

In case such a request is made, the report must be filed within
ten days thereof under penalty thereafter of fifty dollars for
each day of continued failure. (S.C. L., § 34.)

Form 64.—Annual Report.

we we eee Pe ew wwe ee ew we etre ws wee meee r eee en ereesee sees ees

NATIONAL DEVELOPMENT COMPANY.
ANNUAL REPoRT.

I, James C, Bradley, President of the National Development Company,
a domestic stock corporation, do, in accordance with the requirements of
Section 34 of the Stock Corporation Law, hereby make a report as of the
first day of January, 1910, as follows:

1. The amount of its capital stock is $100,000 and the proportion ac-
tually issued is $100,000, '

2. The amount of its debts does not exceed $2,000,

3. The amount of its assets is at least equal to $100,000.

4. ‘The names and addresses of its officers are as follows:

James C. Bradley, President, 300 Broadway, New York.
Henry C. Brown, Secretary and Treasurer, 50 State St., Albany, N. Y.

The names and addresses of its Directors are as follows:
‘James C. Bradley, 300 Broadway, N. Y.

Henry C, Brown, 50 State St. Albany, N. Y.

Robert B. Taylor, 308 So. Pearl St., Albany, N. Y.

In Witness Wuergor, I have hereunto set my hand this fourth
day of January, 1910.

James C. BRADLEY, |
President.

Pe ee

The report must be signed by the president, vice-presi-
dent, secretary or treasurer, but need not be sworn to. It is
filed in the office of the Secretary of State. No fees are re-
quired. The prescribed time of filing is during the month of
January, or, for corporations doing business in foreign coun-
tries, before the first day of May. (See § 174.)

The following form of report to the State Comptroller
is used for both domestic and foreign corporations :
266

Form

To the
As

NEW YORK CORPORATIONS.

65.—Report to Comptroller.

Comptroller of the State of New York:
Treasurer of the Coleman Chemical Company I make the following

report of such Company for the year ending October 31, 1908, pursuant to
the provisions of Section 182, Chapter 908, Laws of 1896, and acts amend-
atory thereof:

I.

The last preceding report made by this Company to the Comptrol-

ler of the State of New York under the provisions of the above acts was

for the
2:
3.

I, IQOT.
4.

oy nn

90

II.
12.

13.
14.

15.
16.
17

year ending October 31, 1907.
Organized January 6, 1901, under the laws of New York.
This Company began business in the State of New York on March

Authorized capital stock of Company ............++eeee $500,000
Common ..........+- 5,000
Preferred ........... None
Common .............665 5,000

Number of shares of stock authorized {

Number of shares of stock issued {

Preferred: ...... .... § .None

Common: os... cec ee seamen 100

Par value of each share Preferred .........-..00 000s Bud aeiegs
Amount paid into Treasury of {Common ...............- $ 100
Company on each share.... | Preferred .............-- Dae
Amount of Capital Stock issued for cash or property ....$ 30,000

Amount of Capital Stock issued for good will, copyrights,
brands, patents, trade-marks, formule, services, etc.,

other than cash or property ......... cece cece eee eee $470,000
Amount of common stock on which dividends were

MECIALEM..xa sox uts.aa bryelnG diene Rae ak eee veanaaca SREY $500,000
Amount and date of each dividend on common stock, July

Ast AMOS ao 8 ecg. Sesysrayacaueeigie Fo De Oa ge Missa a Sos eT RS $ 5,000
Rate per cent. per annum of dividends on common stock..... 1%
Amount of preferred stock on which dividends were

déclaréd «ssc02570464 ewe pawa was gece ain a dosennae easy e Scie ets

Amount and date of each dividend on preferred stock ...........
Rate per cent. per annum of dividends on preferred stock .........
Nature of business in State of New York and how transacted.

Manufacturing and selling proprietary preparations.

18

(a) Place, street and number where such business was conducted.

507 Broadway, New York City.

19.
20.

21.

22.

23.

(b) Present office of the Company, 507 Broadway, New York City.
Average value of stock in trade carried in the State of New
York during the year ending October 31, 1908 .......... $370,000
Average mofithly bank balance employed in the State of
New York during the year ending October 31, 1908...$ 1,270
Average value of bills and accounts receivable in State of
New York during the year ending October 31, 1908 .... $ 19,430
Average value of shares of stocks of other corporations
doing business in the State of New York and owned by
this company during the year ending October 31, 1908...... None
Average value of personal property, including bonds, loans
on call and other financial securities employed in the State
of New York, other than heretofore mentioned, during
the year ending October 31, 1908 ........ eee e eee eee eee $ 3,000
FORMS OF REPORTS. 267

24. Capital invested in real estate located in the State of New

York during the year ending October 31, 1908, and where

SULU ALEC coo secerivs cca uaneusustous dcaaces See arsenite Nala aoa Notes None
25. Total of assets above enumerated located in the State of

New York during the year ending October 31, 1908 ....$393,600
26. Average value of stock in trade carried outside the State of

New York during the year ending October 31, 1908 ....$ 2,000
27. Average monthly bank balance employed outside the State

of New York during the year ending October 31, 1908.. None
28. Average value of bills and accounts receivable outside the

State of New York during the year ending October 31,

TOOG ots vols claw anepee hho howe Setriti aeons $ 760
29. Average value of shares of stocks of other corporations

owned by this corporation, where such corporations are

doing business wholly without the State of New York ....None
30. Average value of personal property including bonds, loans

on call and other financial securities employed outside the

State of New York, other than heretofore mentioned,

during the year ending October 31, 1908 .............4.. $ 500
31. Capital invested in real estate located outside the State of

New York, during the year ending October 31, 1908, and

WHEFE SILUALED: oss aiscesereieie. a b:ti0s vas tnaeerntinlardon 8 Have Ea Baw dle None

32. Total of assets located outside the State of New York,
during the year ending October 31, 1908 ............... $ 3,260

LIABILITIES:

Bon si s.sio i scariest aiaroeaiierecidn sed ateatad anon mere Oo Soh aie emndaponees None
Mortgages not secured by bonds ............ sc cece cece eee ee None
Bills payable ws isanctiininlas pe Se Ahyaee Ae Doaae PasEeMeL YES $ 5,200
Accounts: payable -s.csccas eo-o244 peewee se ex essa be usAidieaae dhs $ 3,900
Other liabilities, excluding capital stock .................000 eee None
Total! Mabilities: ciss.ciey seas tiwarage eee e eae eae nereaws $ 9,100

33. Highest bona fide price at which stock sold f Preferred .$.......
during year ending October 31, 1908.... |\Common ..$ 52
34. Lowest bona fide price at which stock sold f Preferred .$.......
during year ending October 31, 1908.... \Common ..$ 50
35. Percentage of capital stock of the company employed in
the State of New York during the year ending October
31, 1908, in manufacturing and in the sale of the product
of such manutacturé ccc. ccasiacvewssadse oes ieci wate sane es 75%
36. Are your goods manufactured for you by others? By us.
37. Do you operate a factory? Yes.

The undersigned, being the Treasurer of the above Company, esti-
mates and appraises the Capital Stock of said Company as follows:

Five thousand shares at fifty dollars and fifty cents per share, amount-
ing in the whole to two hundred fifty-two thousand, five hundred dollars.

In Witness WHereEor, I have set my hand this rgth day of November,
1908,
Ropert CoLEMAN,
Treasurer.
268 NEW YORK CORPORATIONS.

State or New York, 3
County of New York. f°"

On this fourteenth day of November, A. D. 1908, personally appeared
before me, a Notary Public in and for the County of New York, Robert
Coleman, Treasurer of the above-named Company,‘ who, being duly sworn
according to law, did depose and say that the foregoing report is just, true
and correct, and that it includes all dividends of any description declared
by said Company during the year ending October 31, 1908, and that he has,
according to his best knowledge and belief, appraised the Capital Stock of
the Company as provided by statute, at not less than the average price at
which it sold and not less than the difference between its assets and liabil-
ities, exclusive of capital stock.

Ropert CoLEMAN,
Treasurer.

Sworn to before me the day
and year aforesaid.

NOTARIAL \ Henry Perkins,
SEAL, Notary Public.

a

Blanks for this report are prepared by the Comptroller
and are usually sent out in October. If not received, they
may be obtained without cost by applying to that official.
The affidavit, in form prescribed, of either the president, vice-
president, secretary or treasurer as to the truth of the state-
ments therein must be annexed to the report, which when
complete is merely mailed to the State Comptroller at Al-
bany. No filing or other fees need be paid.

This report is used as the basis for fixing the franchise
tax and must be filed with the Comptroller on or before
November 15th of each year. It must give the condition
of the corporation at the close of business on October 31st
preceding. The statements of the report are not conclusive,
as the Comptroller may in his discretion determine the amount
of the franchis® tax of any particular corporation on other
information or may require the officers of the corpora-
tion to furnish additional data.

The form of report prescribed by the Comptroller must
be used. For failure to file the report, a penalty is imposed
of $100 and $10 per day for each day that the failure con-
tinues. The same penalty is imposed for failure to file any
FORMS OF REPORTS. 269

special report required by the Comptroller within any rea-
sonable time specified by him. (See § 175; also Tax Law, §§
192-194, 197.)

When actual sales of stock have been made during the
year, or in preceding years, the approximate cash value of
the capital stock is, as a rule, easily determined. If, how-
ever, as is not infrequently the case with corporations paying
no dividends, no actual cash sales have been made, the cash
value of the stock may become very difficult of determina-
tion. In such case, as the market value of the stock is to be
determined, it must be based on the value of the entire
property and business owned by the corporation.

Manufacturing, mining and laundering corporations em-
ploying not less than forty per cent. of their capital stock
within the state, are entitled to exemption from the fran-
chise tax,—manufacturing corporations, however, only to the
extent of the capital actually employed within the state. To
secure this exemption a special statement must be made, in
form prescribed by the Comptroller, from whom blanks may
be secured. This statement must show that at least forty per
cent. of the capital stock of the corporation is employed in
the state in furtherance of its legitimate business. (See §§
149, 150; also Tax Law, § 183.)

Form 66.—Statement to Comptroller. To Secure Exemption
as Manufacturing Corporation.

Cem me mee were rare eee reer reer eres ever e se se nesreseeseresene

RepLiges To Questions SHouLp Bg Expuictr,

SraTeMENtT and affidavit of Thomas R. Edwards, President of Stand-
ord Biscuit Company claiming exemption from making reports, and the
payment of tax as levied and assessed under Chapter 908, Laws of New
York, 1896, and acts amendatory thereof.

1. Full name of the corporation, joint stock company or association.

Standard Biscuit Company,

2. Name and title of officer making this statement.

Thomas R. Edwards, President.
270 NEW YORK CORPORATIONS.

3. Under what Law of what State or country was the corporation,
joint-stock company or association incorporated, organized or formed?

New York.

4. Date of organization.

January 4, 1905. .

5. For what purpose? (To be stated as shown in charter.)

“The business and objects of said corporation are the manufacture
and sale of biscuits, crackers, confectionery and other food products.”

6. Nature of business now transacted?

The company is engaged in the manufacture of biscuits and fancy
crackers at 507 Greenwich St., New York City, and in disposing of the
same through travelling salesmen throughout the United States.

7. If a mining company, state where the mines are located.

8. If an agricultural company, state where the company’s plant
is situated.

g. If a manufacturing company, state where factory is located.

507 Greenwich St., New York City.

10. Does the company maintain, own and operate the mine, plant cr
factory?

The company owns its factory property in fee simple.

11. Does the company actually manufacture within the State of New
York, all the goods, wares or merchandise sold by the company in its busi-
ness in this State?

Yes.

12. Does the company lease to other parties the right of manufacture
of goods sold by it?

No.

13. Does the company cause any of its products to be manufactured
by any other person, partnership, association or corporation within or
without this State, that it uses or sells in this State?

No.

14. Location of main business office of the company.

507 Greenwich St., New York City.

15. What percentage of the company’s entire capital is actually em-
ployed in New York State in

1. Conducting its manufacturing; 95%.
2. The operation of mining ores?

REMARKS :—The entire manufacturing operations of the company are
carried on within the State of New York.

Strate oF New Yor,

County of New York. f°"

Thomas R, Edwards, President of the Standard Biscuit Company,
being duly sworn, deposes and says that the answers to the above questions
as set down by him and remarks, are true and correct.

Tuomas R. Epwarps.
Sworn and subscribed before me aie
17th day of January, 1909.
NOTARIAL \ Rosert HENpRIx,
SEAL, Notary Public for New York County.
FORMS OF REPORTS. 271

The form of local reports required and the regulations
under which they are made vary in different parts of the state.
In New York City and in Buffalo, no preliminary reports are
required of corporations liable to taxation, but they are ten-
tatively assessed. If the corporations are satisfied, they need
take no action in the matter and the assessment stands. If,
however, they feel aggrieved, application must be made for
a revision or correction of the original assessment, and the
tax commissioners then determine the assessment that should
really be made.

In most portions of the state, however, the usual plan
is followed of requiring a prescribed report from the corpora-
tion which is used as a basis for assessment.

In every important tax district of the state printed forms
are supplied for the local tax reports and may be obtained
from the local assessors. In the less important districts blanks
are not furnished. The general form given below will, in
such cases, be found convenient.

No fees of any kind are required in connection with these
local tax reports. (See Chap. XVI.)

Form 67.—Local Tax Report. General Form.

REPORT OF THE
HOWARD IMPLEMENT COMPANY
To the Assessors of the Town of Woodbury, New York.

I, Henry M. Wilson, Treasurer of the Howard Implement Company,
a corporation organized under the laws of the State of New York, in pur-
suance of Section 27 of the Tax Law of the State of New York, do hereby
set forth:

1. The real property of said corporation consists of—
$ Factory in Centrai Valley, the amount actually paid therefor being,
5,000,
2. The capital stock of said corporation actually paid in and secured
to be paid in is, $50,000.

The amount paid therefrom for realty is, $5,000.

The amount of said capital stock held by the State and by any incor-
porated literary or charitable institution is, $2,500.
272 NEW YORK CORPORATIONS.

3. The principal office of the Company is situated in Central Valley,
New York,

4. The direct liabilities of the corporation, not including any indebted-
ness incurred in the purchase of non-taxable securities, are, $3,500.

State oF New York, ss :
County of Orange. ee

I, Henry M. Wilson, the Treasurer of the said Corporation, being duly
sworn, do hereby certify that the foregoing is in all respects a just and
true statement of the property and debts of the Corporation on the second
Monday of January, 1909.

Henry M. WItson.
Sworn to before me this 20th day
of February, 1909.

Frank H. Howarp,
pea Notary Public for
SEAL, Orange County.

ee

The five boroughs of the City of New York have but
one board of assessors and therefore constitute a single tax
district. Assessments are made on the second Monday in
January. As a preliminary step, the corporations liable to
taxation are assessed upon some estimated valuation or upon
their entire authorized capitalization at its par value without
regard to the real values involved. Notice of this assessment
is sent to each corporation, together with a blank form upon
which the corporation may apply for a: revision and correc-
tion of the assessment if aggrieved thereby. The application
and report which follows is of this nature.

If a revision is desired, application must be made there-
for before ‘March 31st. If no application for correction is
made, the assessment becomes final on that date and review-
able only on application to the courts. The tax department
will readily make the proper corrections where the original
assessment is excessive, if the required application is made
within the prescribed period.

It must be remembered, however, that the tax de-
partment is not required to notify tax payers of the amounts
of their assessments. Notice is usually sent merely as a mat-
ter of convenience to all parties, but, if overlooked, the cor-
FORMS OF REPORTS. 273

poration failing to receive such notice has no ground of com-
plaint or basis for asking a revision of the assessment after
the books have been closed on the 31st day of March. For
this reason if no notice of assessment is received within a
reasonable time after the second Monday in January, the cor-
poration should take steps to ascertain if it is on the assess-
ment rolls, and if so, the amount of its assessment. This
may readily be ascertained by application to the tax depart-
ment.

Form 68.—Local Tax Report. New York City.

This statement should be filed by February 10. It must be filed by
March 31.

Tue Crry of NEw York
DEPARTMENT OF TAXES AND ASSESSMENTS
Main OFFICE

Hall of Records, Northwest Corner Chambers and Centre Streets
Borough of Manhattan

 

The Howard Clock Company, a corporation organized under the laws
of the State of New York, claiming to be aggrieved by the assessed valu-
ation of its property for the year 1909, makes application by the under-
signed, one of the officers of the said corporation, to have the same revised
and corrected.

Joun H; Howarp,

Dated February 2, 1909. Treasurer.

STaTE THE VALUE oF THE FoLLowinc ITEMS:

ASSETS

All assets must be scheduled, whether located in the State of New
York, or elsewhere, including deposits in banks and debts due from non-
residents,

Te. GReéall: cestate:) tc aveadeien sae hi olen aaibbecn eee awe $10,000.00
2. Machinery and plant other than real estate ............. $ 7,500.00
3. Goods, wares and merchandise ..............ceeeeeeeees $15,525.75
4. All other tangible personal property. (This does not in-

clude mortgages or credits) ............ee eee eeeuee $ 4,285.24
5. Cash on hand and on deposit ............ cece ee eee eee $ 3,175.35
6. Debts due from solvent debtors. (This includes bonds

and: ial credits). as csninwwsuen vaste saa Buoeeee Meee esa $ 4,782.24
274 NEW YORK CORPORATIONS.

7. All other intangible personal property exclusive of patent
rights, copyrights, trade-marks, goodwill and fran-
CHISES' 2 dodiesinuamwieade Peed cra ainle omnia ary te'e hae. a eonNete $10,000.00

8. The aggregate of the above assets ........ Pere $55,268.58

DEDUCTIONS

Except the items numbered 10, 11, 15 and 16, the value of
every item to be deducted must be the sum at which it is included
in the above statement of assets.

Ui Sh SBonds)) :acciuscstacuestacvenes nao Dacian
N, Y. State and Municipal Bonds....... Gace eae
N. Y. Mortgages recorded on or after
g. Property July 1, 1906, and mortgages on which
exempt a registration tax has been paid since
by May 13, 1907. (This includes only mort-
law, gages owned by the corporation)...... Saoirse
which Goods imported by above corporation
includes from foreign countries on hand in un-
broken original packages ............ $ 750.00

Any other property exempt by law, speci-
FYING 1S: MACUTE .cc ccd aia secs ah LPeee SESE

1o. So much of the surplus, if any, as shall not exceed ten per
centum of the par value of the shares of stock issued...$........

11. The assessed value of the corporation’s real estate in this

State, including its special franchises. (See Note.)

Give Section or Ward and Lot Numbers if in The City

of New York. 780 Franklin St Ward 4, Map 5,

BOC FB. cacncgeen plavuidintesasiges tee tis DE oA LOADER ER GS $ 7,500.00
12. Real estate outside of this State, specifying its location.
Bridgeport, CONWECHCUL 2 eeraeeeas cunawever eas eey wes $ 2,500.00

13. Tangible personal property having a permanent situs out-

side of this State, specifying its nature and_ location.

(This does not include bonds, notes, evidences of debt

of any kind, currency, deposits in banks, bills receivable,

or any other intangible property), Buildings and ma-

chinery at Bridgeport, Conn, ......ccccccc ec eeeeeneene $ 7,500.00
14. Shares of stock in other corporations actually owned by

the above corporation which are taxable upon their cap-

ital, stock! viccs+eapsmoenseoxe Aaehs sen. wedeeeareseeea es $ 7,500.00
15. Indebtedness secured by the company’s bond and mort-
gage on real property .......... cece cece eee eens $ 5,000.00

16. All other indebtedness of the corporation not contracted
or incurred in the purchase of non-taxable property or
securities, or for the purpose of evading taxation. (See
Note.) (The amount owing for goods imported by
above corporation from foreign countries on hand in
unbroken original packages and the capital stock of the
corporation must not be included) .................050. $ 7,525.25

17. The aggregate of the items set down in answer to ques-
tions 9 to 16 inclusive ........... ccc cece cece ea eees $38,275.25

The total capital stock issued (7. ¢., Total value of all shares at
PAN). Cera eaa dx seontitmeeetis  KAPoe ot hao) amano oheda dad need $50,000.00
FORMS OF REPORTS. 275

Gross assets exclusive of copyrights, patent rights, trade-marks,
goodwill and franchises other than special franchises, as
shown by answer to question 8 ..........e.cc cece cece ees $55,268.58

Aggregate of deductions from gross assets as shown by answer
£0. QUESTION 17 <6. 0 thtnnaiad 4 uciuw gine cheb pie ba eee eee eee $38,275.25

Subtract the deductions from the above assets and the balance is
the actual value of the capital stock liable to taxation...... $16,993.33

__ The principal office or the place of transacting the Financial Business
of the said corporation is situated in the Borough of Manhattan, in The
City of New York, at No. 780 Franklin Street.

THE Crry or New York, ies
County of New York. =

I, John H. Howard, the treasurer of the said corporation, being duly
sworn, do hereby certify that the foregoing is in all respects a just and
true statement of the property and debts of the corporation on the second
Monday of January, 1909.

Joun H. Howarp.
Sworn to before me this third
day of February, 1909.
SaMuEL T. Harpine,
NOTARIAL Notary Public in and for
SEAL, the County of New York.

Norre.—If the corporation owns real estate, which is subject to a mort-
gage, but is not personally liable for the debt thereby secured, such debt
cannot be deducted. In this case it is permitted to include in the gross
assets the value of the corporation’s equitable interest in the real estate in-
stead of its entire value, but in such case no more than a like proportion of
the assessed value may be deducted. If this course is followed, state the
actual value, the equity and the assessed value. The sum to be deducted
is that percentage of the assessed value which the equity is of the actual
value.

No tax bills are sent out when the tax falls due. They
may be obtained by application to the tax department, how-
ever, at any time after the first Monday in October. (See
Part III, Table 5, “Corporate Calendar,” for date of payment
of taxes and penalties for delay.)
CHAPTER XXVI.
STATUTORY FORMS.

(1) APPLICATION FOR ADMISSION TO STATE By FOREIGN
CoRPORATIONS.

Form 69.—Statement and Designation of Agent. Foreign Cor-
poration,

SWISS-AMERICAN CHOCOLATE COMPANY,
STATEMENT AND CERTIFICATE OF DESIGNATION.

The Swiss-American Chocolate Company, a foreign corporation or-
ganized under the laws of the State of Delaware, applying under the pro-
visions of Section 16 of the General Corporation Law for a certificate of
authority to do business in the State of New York, does hereby make a
statement and designation under its corporate seal as follows:

First. The business or objects in which said corporation is engaged,
and which it purposes to carry on in the State of New York, are as
follows:

To prepare, manufacture, buy, sell and generally deal in chocolate,
soluble chocolate, chocolate products and preparations and other foods,
food products and beverages and materials used therein and in con-
nection therewith, and to do all lawful things convenient and necessary
in connection with the said business.

e
Second, Its principal place of business within the State of New York
is at No. 148 Chambers Street, in the City and County of New York.

Third. The person within the State of New York upon whom sum-
mons upon this corporation may be served, or other process or paper,
commencing a special proceeding against the corporation before a court or
officer, except a proceeding to punish for contempt, or where special pro-
vision for the service thereof is otherwise made by law, is Sherman Good-
win, and his office is situated at No. 170 Broadway, in the said City,
County and State of New York,

276
STATUTORY FORMS. 277

Fourth, The written consent of the said Sherman Goodwin, the per-
son herein designated, and a sworn copy of the Certificate of Incorpora-
tion of the Swiss-American Chocolate Company, are hereunto annexed,

Dated New York,

February 26, 1909.
Swiss-AMERICAN CHocoLatE CoMPANY,
aaron By Benjy. Aszgort,
SEAL. President.
Attest Seal:
Henry OVERMANN,
Secretary,

State oF DELAWARE,

County of Newcastle. f °°"

On the 26th day of February, in the year 1909, before me personally
came Benj. Abbott, to me known, who, being by me duly sworn, did depose
and say that he resides in Philadelphia, Pennsylvania; that he is the presi-
dent of the Swiss-American Chocolate Company, the corporation described
in and which executed the foregoing statement and designation; that he
knows the seal of said corporation; that the seal affixed to said instrument
is such corporate seal; that it was so affixed by order of the board of
directors of said corporation, and that he signed his name thereto by like
order,

Cares G. GUYERE,
Commissioner of Deeds
for the State of New York.

(See § 180; also GC. L., § 16.)

In the form given the acknowledgment was taken be-
fore a New York commissioner of deeds resident in Dela-
ware. In such case, no certificate showing his authority to
take the acknowledgment is necessary. If, however, it were
taken before a Delaware notary, the latter’s authority must be
shown by proper certificate from the county clerk, or other
officer authorized thereto. To the statement and designation
must be annexed the consent of the designated agent. This
is as follows:

Form 70.—Consent of Agent. Foreign Corporation.

ConsENT oF SHERMAN GOODWIN
To
DESIGNATION.

I hereby consent to my designation as the person within the State of
New York upon whom summons against the Swiss-American Chocolate:
278 NEW YORK CORPORATIONS.

Company may be served, or other process or paper, commencing a special
proceeding against the said corporation before a court or officer, except a
proceeding to punish for contempt, or where special provision for the
service thereof is otherwise made by law.
In Witness Wuerkor, I have hereunto set my hand this 27th day
of February, 1909. ,
SHERMAN GOODWIN.

State of NEw York,
County of New York.

On this 27th day of February, 1909, before me personally came Sher-
man Goodwin, to me known and known to me to be the individual de-
scribed in and who signed the foregoing consent, and acknowledged to me
that he executed the same.

SS!

Wiram §. Perry,
Commissioner of Deeds No. 3,
New York City.

(See G. C. L., § 16.)

A sworn copy of the charter or certificate of incorpora-
tion in the English language must be attached to the “State-
ment and Designation.” ‘This copy of the charter need not
be certified by the Secretary of State of the home state, but
must in all cases be sworn to by one of the officers of the cor-
poration. This affidavit should be on the same sheet as the
certificate or be attached to it. The form of affidavit may be
as follows:

Form 71.—Affidavit to Certificate of Incorporation. Foreign
Corporation.

State of DELAWARE, \ ee
County of Newcastle. em

Henry Overmann, being duly sworn, deposes and says that he is the
Secretary of the Swiss-American Chocolate Company, a corporation or- .
ganized under the l@ws of the State of Delaware and that the foregoing
instrument is a true and correct copy of the Certificate of Incorporation of
said corporation,

HENRY OVERMANN.
Sworn to before me this 26th
day of February, 19009.
Cuaries G. GuYERE,
Commissioner of Deeds
for the State or New York,

(For fees, see Part TU, tables 2 and ay i
STATUTORY FORMS. 279

The application, consent of agent and sworn copy of the
charter should be sent to the Secretary of State, accompanied
by the required fees. (See § 180.) If they are in proper
form, he will issue a certificate of authority.

(2) AcGENcy CHANGES. FoREIGN CoRPORATION.

Form 72.—Revocation and New Designation of Agent. Foreign
Corporation.

WATSON TYPEWRITER COMPANY.
REvocaTIon AND NEw DssIGNATION oF AGENT.

The Watson Typewriter Company, a stock corporation organized under
the laws of the State of West Virginia, hereby certifies:

That said corporation has heretofore designated Wallis Cook as its
agent to receive personal service of summons upon the said corporation
within the State of New York.

That said corporation does hereby, in accordance with the provisions
of Section 16 of the General Corporation Law, revoke and recall the said
designation, and, in place and stead of the said Wallis Cook, does hereby
designate Henry R. Armour, whose written consent to such designation
is hereto annexed, as the person within the State of New York upon
whom summons or other process commencing a special proceeding be-
fore any court or officer may be served, except a proceeding to punish for
contempt and except where special provision for the service thereof is
otherwise made by law.

That the office of the said Henry R. Armour is at 393 Canal Street,
in the City and State of New York, the place where said corporation has
its principal place of business within the State.

Dated New York, March 23, 1909.
Watson TYPEWRITER Co.,
oe By Frank WALTHEW,
SEAL. President.

Attest Seal:
Horace D, MANNING,
Secretary.

(Acknowledgment as in Form 69.)

(See G. C. L., § 16.)

This must be filed with the Secretary of State. No fees
are required. The consent of the designated agent, as in
Form 70, must be attached.
280 NEW YORK CORPORATIONS.

Form 73.—Revocation of Agent’s Consent. Foreign Corpora-
tion.

REVOCATION OF CoNSENT
To
DESIGNATION,

I, John G, Mackay, heretofore on the 10th day of August, 1906, duly
designated by certificate and my written consent thereto, filed in the office
of the Secretary of State, as the person upon whom summons or process
against the Trenton Ceramic Corporation, a corporation organized under
the laws of New Jersey, may be served within the State of New York, do
hereby, as provided in Section 16 of the General Corporation Law, recall,
revoke and annul my said consent to said designation.

In Witness Wuereor, I have hereunto set my hand this 15th day
of March, 1909.
Joun G, Mackay.

State or New York, re
County of New York. f°"

On this 15th day of March, 1909, before me personally came John G.
Mackay, to me known and known to me to be the individual described in
and who signed the foregoing revocation of consent, and acknowledged to
me that he executed the same.

Joun H. FRANKLIN,
NOTARIAL \ Notary Public in and
SEAL, for New York County

a eS

This revocation must be filed in the office of the Secretary
of State. No fees are required.

Form 74.—Certificate of Change of Office. Foreign Corpora-
tion.

a

BELLEVILLE REALTY CORPORATION
OF
New Jersey.

CERTIFICATE OF CHANGE oF NEw Yorx OFFICE,

I, Ernest Bryan, heretofore on the oth day of July, 1907, duly desig-
nated by certificate filed in the office of the Secretary of State as the
person upon whom summons or process against the Belleville Realty
Corporation of New Jersey may be served within the State of New York,
STATUTORY FORMS. 281

do hereby certify that I have removed my office from 165 Broadway,
New York, the location specified in the said certificate, to 203 Broadway
in the same City, and that from and after the date of this present instru-
ment, summons or process against the said Belleville Realty Corporation
may be served upon me as the designated agent of said corporation, in
my said office at 203 Broadway, New York.
In Wirness Wuereor, I have hereunto affixed my hand and seal
this 30th day of January, 1909.
Ernest Bryan. [L.s.]

State or New York, ,
County of New York, f**"

On this zoth day of January, 1909, before me personally appeared
Ernest Bryan, to me known and known to me to be the individual de-
scribed in and who executed the foregoing certificate and acknowledged

to me that he executed the same for the uses and purposes therein set
forth.
Joun B. McConnett,
eo Notary Public,
SEAL. New York County.

Cee ee ee em em we mee ree ee we wee ewe meer cere eee eee eee eee ee ee eee

This certificate must be filed in the office of the Secretary
of State. No filing fees.

(3) CHARTER AMENDMENTS,

Form 75.—Change of Name. Resolution of Directors Au-
thorizing Change.

Cee me meee me ew wee eww eee eee ew we ee ee BO eee Oe ee eee eee eee eee

ResotveD, That the corporate name of this Company be changed from
“Cranford Publishing Company” to the “Royston Press Company” and that
due application be made to the Supreme Court for authority therefor and
that the President and Counsel of the Company be empowered to do all
things requisite to effect such change.

The procedure for change of name is formal and some-
what complicated. It will be found outlined in detail in §72,
subdiv. i.

Form 76.—Change of Name. Publication Notice.

Ce

Notice 1s Heresy Given that the Cranford Publishing Company, a
domestic corporation, having its principal office in the Borough of Man-
282 NEW YORK CORPORATIONS.

hattan, City, County and State of New York, will apply to the Supreme
Court of the State of New York, at a Special Term, Part I thereof, to
be held in the County Court House in the County and City of New York,
on the ist day of March, 1909, at 10.30 o’clock in the forenoon of that day,
or as soon thereafter as counsel can be heard, for an order authorizing said
corporation to change its corporate name to Royston Press Company.
Dated New York, January 15, 1909.
CrANFoRD PusLisHING COMPANY,
By James Burr,
President.
Hoimes & CHURCHILL,
Attorneys for Petitioner,
100 Broadway, New York City.

(See § 72, subdiv. i for publication requirements.)

Form 77.—Change of Name. Petition.

Supreme Court, New York County.

 

In the Matter |

of the |
Application of the Cranford Publishing
Company for authority to change its
name to the name of “Royston Press

Company.” J

 

To tHe Supreme Court, NEw York County:

The petition of the Cranford Publishing Company respectfully shows
to this court as follows:

That it is a domestic stock corporation incorporated under the Busi-
ness Corporations Law of the State of New York and having its prin-
cipal office and place of business in the Borough of Manhattan, in the
City, County and State of New York,

That it is engaged in the buying, selling, printing, publishing and
dealing generally with books, periodicals, papers and printed matter and
material of all kinds and descriptions.

That its presen¢ name is the Cranford Publishing Company. ‘That it
prays that it may be authorized to adopt the name of the Royston Press
Company.

That there are in adjoining states sundry printing houses having
trade names nearly resembling petitioner’s present name, and such simi-
larity of names causes confusion and business loss,

That, as evidenced by the certificate of the Secretary of State annexed
hereto, the name Royston Press Company is not the name of any other
corporation incorporated or authorized to do business in this State, nor
so nearly resembling it as to be calculated to deceive,

That this application has been duly authorized by resolution of the
STATUTORY FORMS, 283

petitioner’s board of directors adopted at a regular meeting held in the
principal office of the corporation on the oth day of January, 1909.
Dated February 27, 1909.
CrANForD PUBLISHING COMPANY,

ae By James Burr,
SEAL, President.

Hotmes & CHurRcHILL,
Attorneys for Petitioner,

Office and P. O. Address,
100 Broadway,
Borough of Manhattan,
New York City.

State or NEw York, tine
County of New York. C

James Burr, being first duly sworn, deposes and says, that he is the
president of the Cranford Publishing Company, the petitioner above
named; that he has read the foregoing petition, and knows the contents
thereof; that the same is true of his own knowledge; that the seal affixed
to said petition is the corporate seal of the said Company and was affixed
thereto by order of the board of directors of said Company and that he
signed said petition on behalf of said Company, by the like order.

James Burr.
Sworn to before me this 27th a
of February, 1909.

Matcotm CurtHBERT,
pe orcuadl Notary Public for
SEAL, New York County, No. 79.

(See G. C. L., §§ 60-64.)

The order changing the name (Form 78) is filed and re-
corded in accordance with its terms in the office of the county
clerk, and a certified copy thereof filed in the office of the Sec-
retary of State. Fees to county clerk, 6 cents for filing, Io
cents per folio for recording and 8 cents per folio for certi-
fied copy. No fees to Secretary of State for filing. Affida-
vit of publication is filed and recorded in the office of the
Secretary of State—recording fees, 15 cents per folio—and
also in the office of the county clerk. Fees to county clerk;
filing 6 cents; recording, 10 cents per folio. (See § 721;
also Form 98 for form of affidavit.)
284 NEW YORK CORPORATIONS.

Form 78.—Change of Name. Order.

Pewee me rere cere ser eens sense eee e meee eee i ee eee

At a Special Term of the Su-
preme Court of the State of
New York, held at Part I
thereof, in the County Court
House, in the Borough of
Manhattan, City of New York,
on the Ist day of March, 1909.

Present:

Hon. JaAMEs FItTzcErap,
Justice.

 

In the Matter

Company for authority to change its
name to the name of “Royston Press
Company.”

 

7}

of the |

Application of the Cranford Publishing
J

Upon reading and filing the petition of the “Cranford Publishing
Company,” a domestic stock corporation, duly verified by James Burr, its
president, wherein said petitioner prays for an order authorizing it to as-
stime another corporate name, to wit, “Royston Press Company” and upon
filing the certificate of the Secretary of State annexed thereto, certifying
that the name which said corporation proposes to asstme is not the name
of any other domestic corporation, or a name which he deems so nearly
resembling it as to be calculated to deceive, and upon filing due proofs
by affidavits, showing that notice of the presentation of said petition has
been duly published for three weeks in the “New York Times” and in the
“Evening Post,” both of which are newspapers published in the City and
County of New York, in which city and county such corporation has its
principal office, and the court being satisfied by said petition and by the
affidavits and certificate presented therewith, that the petition is true, and
that there is no reasonable objection to the change of name proposed,
and that the petition has been duly authorized and that notice of the
presentation of the petition, as required by law, has been made;

Now, on motion of Holmes & Churchill, attorneys for said petitioner,
no one opposing, it is

Ordered, that said petition be, and the same hereby is granted, and
that the petitioner herein, the Cranford Publishing Company, be and it
hereby is authorized to assume another corporate name, to wit, the name
“Royston Press Cqmpany” on and after the 16th day of April, 1909;
and it is further ordered and directed that this order be entered and the
papers on which it is granted be filed, within ten days from the date
hereof, in the office of the Clerk of the County of New York, the county
in which the certificate of incorporation of said corporation is filed, and
that a certified copy of this order, within ten days after the entry thereof,
be filed in the office of the Secretary of State; and further that a copy of
this order be published once a week for four successive weeks in the “New
York Law Journal,” beginning within ten days after the entry hereof.

Enter

(See G. C. L., §§ 60-64.)
STATUTORY FORMS. 285

Form 79.—Change of Principal Office. Written Consent of
Stockholders.

ee

STANFORD STOVE COMPANY.
CHANGE oF PRINCIPAL OFFICE.

We, the undersigned, being all of the stockholders of the Stanford
Stove Company, duly incorporated under the Business Corporations Law
of the State of New York, hereby agree and consent that the principal
office and place of business of said corporation be changed from its original
location in the Borough of Manhattan, in the City, County and State of
tee oo to the City of Newburgh, County of Orange and State of

ew York,

In Witness WHEREOF, we have hereunto affixed our signatures
this 15th day of March, 1909.

Witiiam B. ANpDERSON, owning 20 Shares.

Jas. C. CALDWELL, 20

Jackson Powers, as 10
Joun AMEs Morars, a 20 ee
Warren V. ALLAN, s 50 S
Tuos. S. Powe t, “20
CuHaries C. Bowen, e 10 a

Strate ofr New York,
County of New York,

On this 15th day of March, 1909, before me personally came Wil-
liam B. Anderson, Jas. C, Caldwell, Jackson Powers, John Ames Morris,
Warren V. Allen, Thos, S. Powell and Charles C. Bowen, to me known
and known to me to be the individuals described in and who executed the
foregoing instrument, and they severally acknowledged to me that they
executed the same,

SS.6

Howarp Macnon,
NOTARIAL Notary Public in and for
SEAL. New York County.

Stare or New York,
County of New York.

Robert R. McNeil, being duly sworn, deposes and says that he is the
Secretary of the Stanford Stove Company, the corporation mentioned in
the foregoing instrument; that he has charge of the stock book of the
said corporation, and that William B. Anderson, Jas. C. Caldwell, Jackson
Powers, John Ames Morris, Warren V. Allen, Thos. S, Powell and
Charles C. Bowen, the individuals whose names are signed to the fore-
going instrument, are the holders of the entire outstanding stock of the
corporation,

SS.6

Ropert R. McNEIt,
Secretary.
Sworn to before me this 15th day
of March, 1909.
Howarp Macnon,
aenaas, Notary Public in and for
SEAL, New York County.

(See § 72f.)
286 NEW YORK CORPORATIONS.

This consent is filed in the office of the Secretary of
State. No fees. The following certificate is in pursuance
of the duly filed consent. (See S.C. L., § 13.)

Form 80.—Change of Principal Office. Certificate of Removal.

i i

STANFORD STOVE COMPANY.

CERTIFICATE OF CHANGE OF PLAcE oF BUSINESS.
Under Section 13 of the Stock Corporation Law.

We, the undersigned, the President and Secretary and a majority of
the Directors of the Stanford Stove Company, a domestic stock corpora-
tion, for the purpose of changing the principal office and place of business
of said corporation, do hereby certify and set forth as follows:

1. The name of said corporation is “Stanford Stove Company.”

2. The principal office and place of business was originally located
in the Borough of Manhattan, City, County and State of New York and
the same has not heretofore been changed.

3. It is desired to change its principal office and place of business to
the City of Newburgh, County of Orange and State of New York.

4. It is the purpose of said corporation to actually transact and carry
on its regular business from day to day at such place.

5. Such change of the principal office and place of business has been
authorized by the unanimous consent of the stockholders expressed in
ee duly acknowledged and filed in the office of the Secretary of

tate, ;

6. The names of the directors of said corporation and their respective
places of residence are as follows:

William B. Anderson, Rutherford, N. J.

Jas. C. Caldwell, 119 West 7oth St., New York.

Jackson Powers, 8 West 126th St., New York.

John Ames Morris, 55 2d Ave., Williamsburg, N. Y.

Thos. S. Powell, Great Neck, L. I, N. Y.

In Testimony WHErEor, we have hereunto affixed our names, this
18th day of March, 1909,

WitiaM B. ANDERSON,

President.
® Rosert R. McNett,

Secretary.

Jas. C, CaLpweEt.,

Joun Ames Morais,

Tos. S. Powett,
Directors.

State or New York,
County of New York.

William B. Anderson, Robert R. McNeil, Jas. C. Caldwell, John Ames
Morris and Thos. §. Powell, being: severally duly sworn, do depose and

SS..
STATUTORY FORMS, 287

say, and each for himself says, that the said William B. Anderson is the
President of the Stanford Stove Company, that the said Robert R. McNeil
is the Secretary of said Company, and that Jas. C. Caldwell, John Ames
Morris and Thos. S. Powell are a majority of the directors of said Com-
pany; that he has read the foregoing certificate and knows the contents
thereof, and that the same is true,
Wiiiam B. ANDERSON.
Rosert R. McNEIL,
Jas. C. CALDWELL,
Joun Ames Morris.
Tuos. S. PowEt.
Sworn to before me this 18th
day of March, 19009.
Frank W. Howarp,
NOTARIAL Notary Public for
SEAL, : New York County.

Pe

This certificate is executed in triplicate. One copy is
filed with the Secretary of State, one with the clerk of the
county from which the removal is made and one in the office
of the county clerk of the new location. County clerks’ fees
are in each case 6 cents for filing and 10 cents per folio for
recording. Fee to Secretary of State, 15 cents per folio for
recording. (See §§ 72f, 134.)

If the removal is authorized by vote of the stockholders
at a meeting, the following paragraphs take the place of
paragraph 5 in the preceding form:

Form 81.—Change of Principal Office. Vote of Stockholders.

5. Such change of the principal office and place of business has been
authorized by a vote of the stockholders of said corporation at a special
meeting of stockholders called for that purpose and held in the principal
office of the corporation in the Borough of Manhattan, in the City of
New York, on the 15th day of March, 1909, at which meeting holders
of more than a majority of the outstanding stock of the corporation being
present in person or by proxy, the following resolution was duly moved and
seconded and adopted by a majority vote of the stock of the corporation:

Resotvep, That the principal office and place of business of
the Stanford Stove Company be removed from the Borough of
Manhattan, New York City, to the City of Newburgh, County of
Orange and State of New York, and that the officers and directors
of this corporation are authorized and instructed to carry this
resolution into effect,
288 NEW YORK CORPORATIONS.

Form 82.—Classification of Stock. Publication Notice.

ee

Notice of SPECIAL MEETING,

 

New York, Feb. 16, 1909.

A special meeting of the stockholders of the Grayson Milling Com-
pany will be held in the office of the Company, 56 Broad Street, New
York City, March 2, 1909, at 3.50 P. M., for the purpose of acting upon
a proposition to classify the capital stock of the corporation into common
and preferred stock so that its authorized capital stock of One Hundred
Thousand Dollars ($100,000), now consisting of One Thousand (1,000)
Shares of common stock of the par value of One Hundred Dollars ($100)
each, shall consist of Five Hundred (500) Shares of common stock and
Five Hundred (500) Shares of preferred stock, all of the par value of
One Hundred Dollars ($100) each, said preferred stock to bear a cumu-
lative preferential annual dividend of six per cent., and to be redeemable
at par at the discretion of the corporation ten years from date of issue

By order of the Howarp GRAYSON,

Board ‘of Directors. Secretary.

(See S. C. L., § 61.)

The notice of meeting for classification of stock must be
published once each week for two weeks preceding the date
of meeting in a paper published in the county of the principal
office. In addition, such other notice must be given as is pre-
scribed by the by-laws for the annual meeting. (See §§

728, 77.)

Form 83.—Classification of Stock. Certificate.

GRAYSON MILLING COMPANY,

CERTIFICATE OF CLASSIFICATION OF STOCK.
Under Qection 61 of the Stock Corporation Law,

We, the undersigned, Horace G. Maxwell and Howard Grayson,
respectively President and Secretary of the Grayson Milling Company,
a corporation organized under the laws of the State of New York, do
certify as follows:

That the authorized capital stock of said corporation is One Hun-
dred Thousand Dollars ($100,000), divided into One Thousand (1,000)
Shares of common stock of the par value of One Hundred Dollars ($100)
each; and that of said capital stock Five Hundred (500) Shares are issued
and Five Hundred (500) Shares are unissued.
STATUTORY FORMS. 289

That a special meeting of stockholders to act upon a proposition to
classify the stock of the corporation into common and preferred stock
was called upon notice mailed to each stockholder of the company at his
last known post-office address at least ten days before the date of said
meeting, and published in the “New York Times,” a newspaper published
in the county in which the principal office of the company is located, at
least once a week for two successive weeks immediately preceding such
meeting, the notice given being such as is required for the annual meet-
ing of the corporation.

That the following is a true copy of the said notice:

Cnsert Notice, Form 82.)

That at the designated time and place, stockholders holding more than
two-thirds of the outstanding stock of the corporation assembled in per-
son or by proxy.

That due notification of the meeting, as above set forth, was proven
by presentation of copies of the “New York Times” under date of Febru-
ary 16th and 23rd containing the above notice, and by the affidavit of the
Secretary as to service of said notice by mail.

That the following resolution was then presented for the consideration
of the meeting:

“ResoLveD, That the capital stock of the Company, now consist-
ing of One Thousand (1,000) Shares of common stock of the par
value of One Hundred Dollars ($100) each, of which Five Hundred
(500) Shares are issued and outstanding, and Five Hundred (500)
Shares are unissued, be classified into common and preferred stock, of
each an equal amount.

“That the Five Hundred (500) Shares of unissued stock shall
be the preferred stock so created, the issued stock remaining com-
mon stock without preference, as before,

“That the said Five Hundred (500) Shares of unissued pre-
ferred stock shall be entitled to receive a cumulative preferential divi-
dend of six per cent. per annum, payable each year out of net earn-
ings before any dividend is paid upon the common stock of the Com-
pany, but not entitled to any further share of the Company profits.

“That said preferred stock shall, at the option of the Company,
be redeemable at its par value at any time after ten (10) years from
the date of its issue.”

That upon vote thereon, said resolution received the favorable vote
of Three Hundred and Seventy-five (375) Shares of the capital stock,
being more than two-thirds of the outstanding stock of the Company, and
was thereupon declared duly adopted.

In Witness WHEREOF, we have made and signed this certificate in

duplicate, this 3d day of March, 1909.
Horacé G. MAXxweELt,
President.
Howarp Grayson,
Secretary.

Srate oF New York,

County of New York, f***

Horace G. Maxwell and Howard Grayson, being duly sworn, do de-
pose and say, each for himself, that said Horace G. Maxwell is Presi-
dent and said Howard Grayson is Secretary of the Grayson Milling Com-
pany, the corporation mentioned in the foregoing certificate of proceed-
290 NEW YORK CORPORATIONS.

ings at a special meeting of the stockholders thereof; that he was present

at such special meeting; that he has read the foregoing certificate and

knows the contents thereof and that the same is true.
Horace G. MAXxweELt,
Howarp GRAYSON.

Sworn to before me this 3rd day \

of March, 1909.
RatpH P. FaircHILp,
NOTARIAL \ Notary Public for
SEAL. New York County.

Ci

(8. C. L, § 61.)

This certificate must be filed and recorded as was the
original certificate of incorporation. Recording fees to Secre-
tary of State, 15 cents per folio; to county clerk, 10 cents per
folio. Filing fee to county clerk, 6 cents.

Form 84.—Increase of Stock. By Unanimous Consent.

Ce

THE STANLEY PRESS COMPANY.

UNANIMOUS CONSENT oF STOCKHOLDERS TO INCREASE
oF
CaprtaL Stock.

We, the undersigned, being all of the stockholders of The Stanley
Press Company, a domestic stock corporation, hereby agree and consent
that the capital stock of said corporation shall be increased from Twenty
Thousand Dollars ($20,000) divided into Two Hundred (200) Shares of
the par value of One Hundred Dollars ($100) each, to a capital stock of
Thirty Thousand Dollars ($30,000) divided into Three Hundred (300)
Shares of the par value of One Hundred Dollars ($100) each, and we here-
by authorize and empower the proper officers of the Company to do all
things necessary to effect the same, and we do certify and set forth:

I. That the amount of capital stock heretofore authorized is $20,000
divided into 200 shares of the par value of $100 each, and that all of said
capital stock has been issued.

II. That the amount to which the capital stock is increased is $30,000
divided into 300 shar@s of the par value of $100 each.

In Witness Wuerkor, we have executed this instrument in dupli-
cate this 18th day of February, 1909.

Anprew Matson, owning so Shares.
“ “

Tuomas O’Kang, 10

WititamM O’Mattory, “ 30 “
Frank C, Fartey, «30 #*
Water Morratt, oe BOs #8
Cuas, A. ULricH, "98 ef

BERNARD SUYDAM, “25 a
STATUTORY FORMS. 2g1

State or New York, :
County of New York. f*"

On this 18th day of February, 1909, before me personally came Andrew
Matson, Thomas O’Kane, William O’Mallory, Frank C. Farley, Walter
Moffatt, Chas, A. Ulrich, and Bernard Suydam, to me known and known
to me to be the individuals described in and who executed the foregoing
ee and they severally acknowledged to me that they executed
the same,

Dan’, Duncan,
NOTARIAL \ Notary Public in and for
SEAL. New York County.

Strate oF New York, :
County of New York, f**:

Harry B. Elkins, being duly sworn, deposes and says that he is the
Secretary of The Stanley Press Company, the corporation mentioned in
the foregoing instrument; that he has charge of the stock book of the
said corporation and that Andrew Matson, Thomas O’Kane, William
O’Mallory, Frank C. Farley, Walter Moffatt, Chas. A. Ulrich and Bernard
Suydam, the individuals whose names are signed to the foregoing instru-
ment, are the holders of the entire outstanding stock of the corporation.

Harry B. ELKINs,
Secretary.
Sworn to before me this 18th
day of February, 1909.
Bernarp McFartane,
NOTARIAL Notary Public for
SEAL, New York County.

Cem em mm meme eee eee eee me eee eee eee eee eee eee ee ee meee

(See § 86; also S.C. L,, 8§ 63, 64.)

This certificate is executed in duplicate. One copy is
sent to the Secretary of State together with recording fees
of 15 cents a folio. At the same time the state tax of 50 cents
per $1,000 of increase must be sent direct to the State Treas-
urer. The duplicate copy of the certificate, together with the
Treasurer’s receipt, is filed with the clerk of the county where
the principal office is situated. The fees are 6 cents for filing
and ro cents per folio for recording. The increase of stock
is effective from the time the certificate of consent is filed.
(S. G. L., § 64.)

If the stock is reduced, a third paragraph must be added
to the certificate, showing the total corporate indebtedness and
each copy must be accompanied by the certificate of the
State Comptroller to the effect that he considers the reduced
292 NEW YORK CORPORATIONS.

capital sufficient for the corporate purposes. Fee to State
Comptroller for each certificate, $1. (See § 72, “Amend-
ments.’’)

When the capital stock of the corporation is increased,
and the whole or a portion of this increase is to be preferred
stock, the increase and classification may be effected at the
one meeting, as in the following case. (See S. C. L., §§
61, 63, 64.)

Form 85.—Increase and Classification of Stock.

AUTOMATIC LAMP COMPANY.
CERTIFICATE OF INCREASE AND CLASSIFICATION OF CAPITAL STOCK.

We, the undersigned, Robert Morrison and James Bostwick, respect-
ively Chairman and Secretary of a special meeting of the stockholders of
the Automatic Lamp Company, a domestic corporation, held May 10,
1909, for the purpose of increasing its capital stock, and Frank L. Sullivan
and Horace K. Jessup, respectively President and Secretary of the said
Company, do certify as follows:

That the authorized capital stock of this Company is Ten Thousand
Dollars ($10,000), divided into One Hundred (100) Shares of common
stock of the par value of One Hundred Dollars ($100) each, all of which
has been actually issued.

That a notice of a special meeting of stockholders was duly published
in the “New York Sun,” a newspaper published in the county where the
principal office of the Company is situated, at least once a week for two
successive weeks before the date fixed for such meeting, that said
notice was duly signed by the President and Secretary of the Company
and that the following is a true copy thereof:

“A special meeting of the stockholders of the Automatic Lamp
Company will be held at the office of the Company at No, 190 Broad-
way, New York City, on May 10, 1909, at 3 o’clock P. M, to
vote upon a proposition to increase the capital stock of this Company
from Ten Thousand Dollars ($10,000), consisting of One Hundred
(100) Shares of common stock of the par value of One Hundred
Dollars ($100) each, to Twenty Thousand Dollars ($20,000), con-
sisting of Two Hundred (200) Shares of the par value of One Hun-
dred Dollars ($100) each, said increase to consist of Fifty (50) Shares
of common stock and Fifty (50) Shares of preferred stock having a
preferential cumulative dividend of six per cent.”

And further that said notice was served personally in accordance with
the requirements of § 63 of the Stock Corporation Law, at least five days
before such meeting, on each stockholder of record.

That stockholders, in person or by proxy, representing at least two-
thirds of the capital stock, having assembled pursuant to said notice, the
STATUTORY FORMS. 293

meeting was duly organized, the said Robert Morrison being chosen as
Chairman and the said James Bostwick as Secretary, both being stock-
holders of the Company.

That due notification of said meeting to the stockholders of the Com-
pany was proven by presentation of a copy of the aforesaid notice, together
with proof of publication and personal service of the same.

That the following resolution was presented and having received the
favorable vote of Ninety (90) Shares of the capital stock, being more than
two-thirds thereof, was declared duly adopted.

“ResoLvep, That the capital stock of the Company be increased
from its present amount of Ten Thousand Dollars ($10,000), con-
sisting of One Hundred (100) Shares of the par value of One Hun-
dred Dollars ($100) each, to Twenty Thousand Dollars ($20,000), con-
sisting of Two Hundred (200) Shares of the par value of One Hun-
dred Dollars ($100) each.

“That said increase of capital stock amounting to Ten Thousand
Dollars ($10,000), be so classified that Five Thousand Dollars ($5,000),
consisting of Fifty (50) Shares of the par value of One Hundred Dol-
lars ($100) each shall be common stock and the remaining Fifty (50)
Shares shall be preferred stock entitled to preference and priority over
the entire common stock of said Company as follows:

“The holders of the said Fifty (50) Shares of preferred stock
shall be entitled to receive a cumulative preferential dividend of six
per cent. per annum, payable each year out of the net earnings of the
Company before any dividend is paid to the common stock of the
Company.

“The holders of said preferred stock shall not be entitled to any
further share in the profits of the Company after having received the
said six per cent. preferential dividend.

“That the amount of the capital stock as increased is Twenty
Thousand Dollars ($20,000), divided into Two Hundred (200) Shares
of the par value of One Hundred Dollars ($100) each.”

In Witness WHEREOF, we have made and signed this Certificate
in duplicate this roth day of May, 1909.
Rosert Morrison,
Chairman of Meeting.
James Bostwick,
Secretary of Meeting.
Frank L. SuLiivan,
President Automatic Lamp Co.
Horace K. Jessup,
Secretary Automatic Lamp Co.

Strats or New York,
County of New York,

Robert Morrison, Chairman, and James Bostwick, Secretary, being
severally duly sworn, each for himself, deposes and says that he has read
the foregoing certificate subscribed by him and knows its contents, and
that the same is true.

SS.L

Rogsert Morrison.
JameEs Bostwick.
Sworn to before me this 1oth
day of May, 1909.
Henry GorHaM,
NOTARIAL \ Notary Public for
SEAL. New York County.
2904 NEW YORK CORPORATIONS.

Strate or New York, :
County of New York, f**:

On this 1oth day of May, 1909, before me personally appeared Robert
Morrison and James Bostwick, to me known and known to me to. be the
individuals described in and who executed the foregoing certificate and ac-
knowledged to me that they executed the same. °

Henry GorHAM,
ee Notary Public for
SEAL. New York County.

State oF New York,
County of New York.

Frank L. Sullivan and Horace K. Jessup, being severally duly sworn,
do depose and say, each for himself, that said Frank L. Sullivan is Presi-
dent and said Horace K. Jessup is Secretary of the Automatic Lamp Com-
pany, the corporation mentioned in the foregoing certificate of proceedings
at a special meeting of the stockholders thereof; that he was present at
stich special meeting; that he has read the foregoing certificate and knows
the contents thereof and that the same is true.

Frank L. SuLiivan.
Horace K. Jessup.

SS.e

Sworn to before me this roth
day of May, 1909.

ane \ Raten P. FarrcHixp,
SEAL. Notary Public
for New York County.

ey

(See §§ 72b, g, and 77; also S. C. L., §§ 61, 63, 64.)

This certificate is executed in duplicate; one copy is filed
and recorded in the office of the Secretary of State—record-
ing fee, 15 cents per folio—and one copy in the office of the
county clerk, with filing fee of 6 cents and recording fee of
to cents per folio. Tax to State Treasurer, 50 cents on each
$1,000 of increased capital. The increased capitalization is
secured as soon as the certificate has been duly filed. (S. C.
L., § 64.)

If notice iseserved by mail, such notice must be mailed
at least two weeks before the meeting, and paragraph 5 of
Form 85 concerning notice must be changed to correspond
with the facts. (See § ror (e), “Notice of Meeting to In-
crease or Decrease Capital Stock.”)

The above form is somewhat complicated by the fact that
a portion of the increase of stock is preferred and the cer-
STATUTORY FORMS. 295

tificate must therefore not only conform to the requirements
of a certificate of increase of stock, but of classification of
stock as well. If the certificate were merely for increase of
stock, the participation of the president and secretary of the
company would not be necessary,—unless they acted as the
officers of the stockholders’ meeting,—all statements as to the
preferred stock would be omitted, and the stock vote required
would be merely a majority instead of two-thirds.

Form 86.—Increase of Number of Directors. Notice of Meet-
ing.

Ce

MODERN REALTY CORPORATION.
Notice oF MEETING to INcrEFAsE NuMBER oF DIRECTORS.

Notice is hereby given that a Special Meeting of the Stockholders of
the Modern Realty Corporation will be held in the office of the Corporation,
No. 1135 Broadway, New York City, at 4 o’clock P. M., on the 4th day of
March, 1909, to vote upon a proposition to increase the number of direc-
tors of said Corporation from Five to Seven.

THEODORE STANTON,
New York City, Secretary.
February 17, 19009.

(See §§ 72e, 113; also S. C. L., § 26.)

This notice must be served on the stockholders either
personally or by mail two weeks before the time of meeting.
(S.C. L., § 26.) Proof of service of notice must be filed in
office of corporation at or before the time of meeting. This
proof of service is as follows:

Form 87.—Increase of Number of Directors. Proof of Service.

PD

Sratr of New York,
County of New York.

Theodore Stanton, being duly sworn, deposes and says that he is the
Secretary of the Modern Realty Corporation, the corporation mentioned in
the foregoing notice, and that on the 17th day of February, 1909, he served

SSL
296 NEW YORK CORPORATIONS.

said notice on each and every stockholder of said Corporation by mailing
to the last known post-office address of each of said stockholders a copy
of said notice in writing, securely sealed and the postage prepaid.

THEODORE STANTON.
Sworn to and subscribed before me this \
18th day of February, 1909.
GrorcrE WILLIAMS,
NOTARIAL \ Notary Public,
SEAL. New York County.

Form 88.—Increase of Number of Directors. Transcript of
Proceedings.

MODERN REALTY CORPORATION.

IncrEASE OF NuMBER oF Directors.
TRANSCRIPT OF MINUTES OF MEETING.

The stockholders of the Modern Realty Corporation met in the office
of the corporation, No. 1135 Broadway, New York City, at 4 o’clock P. M.,
on the 4th day of March, 1909, for the purpose of acting upon a propo-
sition to increase the number of directors from five to seven.

The President of the Corporation, Mr. Josiah Thompson, presided,
and Mr. Theodore Stanton, the Secretary of the Corporation, acted as Sec-
retary of the Meeting.

The following stockholders, each owning the number of shares set oppo-
site his name, were present in person:

NAME. NO. OF SHARES.
Josiah Thompson ...........:c0cc cece cence 70
Stephen Ransom. vsnateweanas ns yeaace xed 20
John; Je" MeHuglt «sccaanuasais so dean eed escaaea 30
IME ME Wall. sc ioe sigs s avesnennltitiel saya as tsoe 4 contnseaiea 10
Wathamy Daly! xvcces ss dnseuia uapiucueeae sas een 10
James: Mullin ii csisoweraws scaces cases asadeees 10

Ota staat etme hac arden athlete 150
Shares not represented .............00ceeeeee 50

Total 6f shares issued and outstanding .... 200

More than a majority of the entire stock of the corporation being
represented, the meeting proceeded.

Mr, Stanton presented the notice of the meeting accompanied with
his affidavit that he had duly served the said notice by addressing and
mailing a copy thereof to the last known post-office address of every
stockholder of the corporation at least two weeks prior to the date of the
meeting. Said notice and affidavit were ordered received and filed.

The President then stated that the meeting was ready to vote upon
the question for which it had been called, whereupon on motion of John
STATUTORY FORMS. 297

J..McHugh, seconded by James Mullin, the following resolution was
offered:
Resotvep, That the number of directors of the Modern Realty
Corporation be increased from five (5) to seven (7).

Upon motion the resolution was adopted by the unanimous vote of all
present, the stock voted in favor thereof being more than a majority
of the total outstanding stock of the corporation.

Whereupon there being no further business requiring transaction, the
meeting was adjourned.

THEODORE STANTON,
Secretary.
Jostan THoMPson,
President.

State of New York, :
County of New York. f**" °

Josiah Thompson and Theodore Stanton, being first duly sworn, de-
pose and say, and each for himself deposes and says, that the said Josiah
Thompson is the President and the said Theodore Stanton is the Secretary
of the Modern Realty Corporation, and each acted in his official capacity
at the meeting of the stockholders thereof, held on the 4th day of March,
1909, to determine whether the number of directors should be increased
from five to seven; and that the foregoing is a correct transcript of the
proceedings of such meeting as shown by the minutes thereof.

Jostan THOMPSON,
President.

THEODORE STANTON,
Secretary.

Sworn to before me this 4th day
of March, 1909.
Gerorck WILLIAMS,
NOTARIAL i; Notary Public,
SEAL, New York County.

(See S. C. L., § 26.)

This verified transcript must be filed and recorded with
the Secretary of State—recording fees, 15 cents per folio—
and with the clerk of the county in which the corporation has
its principal office. Clerk’s fees, 6 cents for filing and Io cents
per folio for recording.

An increase of directors may be effected by unanimous
written consent of the stockholders without a meeting. This
consent is filed in the same offices and with the same fees
as is the verified transcript (Form 88) when the increase is
authorized by vote of the stockholders. (See § 72e.) Its
general form is as follows:
298 NEW YORK CORPORATIONS.

Form 89.—Increase of Number of Directors. By Unanimous
Consent.

MODERN REALTY CORPORATION.

INcREASE OF NUMBER oF DIRECTORS.
UNANIMOUS CONSENT OF STOCKHOLDERS.

We, the undersigned, being all the stockholders of the Modern Realty
Corporation, a corporation duly incorporated under the laws of the State
of New York, hereby agree and consent that the number of directors of
said corporation shall be increased from five (5) to seven (7).

In Wrrness WHEREOF, we have executed this instrument in dupli-
cate this 4th day of March, 1909.
JostanH THOMPSON, owning 70 Shares.

 

STEPHEN RaNsoM, eS 20

Joun J. McHucu, a 30
M. M. Vat, eo 10 a
Wruam Daty, “ 10 iH
Atice McComs, a> iGO" “ss
JAMES MULLIN, rf 10 ts

(Acknowledgment of stockholders and affidavit of custodian of stock
book as in Form 79.)

Ce

(See S.C. L., § 26.)

The procedure for decrease of the number of directors
is the same as for increase, and the same forms—modified to
meet the changed requirements—may be employed.

(4) ELections or D1rEcTors.

Form 90.—Challenges. Oath of Voter.

Srate or New York, mee
County of New York, f**-

_ Ido solemnly swear that in voting at this election I have not, either
directly, indirectly or impliedly, received any promise or any sum of money
or anything of value to influence the giving of my vote or votes at this
meeting or as a consideration therefor,

. Curster H. McCat.
Subscribed and sworn to before me \
this 21st day of January, 1909.
Francis H. Wo trForp,
Inspector of Election.

(See § 109; also G. C. L., § 27.)
STATUTORY FORMS. 299

This oath must be taken and subscribed by any stock-
holder offering to vote at an election of directors if so required
by an inspector of the election, or other officer presiding at
the election, or by any other member present. The oath may
be administered by the inspector or other person presiding at
the election, and must be filed in the office of the corporation.
In case of a person offering to vote as proxy, the form of
oath is as follows:

Form 91.—Challenges. Oath of Proxy.

CO

STATE oF NEw York, eee
County of New York, aa

I do solemnly swear that I have not, either directly, indirectly or im-
pliedly, given any promise or any sum of money or anything of value to
induce the giving of a proxy to me to vote at this election, or received any
promise or any sum of money or anything of value to influence the giving
of my vote at this meeting, or as a consideration therefor.

CuHar.es J. ALLISON.
Subscribed and sworn to before ne
this 21st day of January, 1909.

Francis H. Wotrorp,
Inspector of Election.

Bem we ee we ee eee eee eee ee ee meer eee eee eee ee were senator reereene

(See § 104; also G. C. L., § 27.)

This oath must be filed in the office of the corporation.

A special meeting of the stockholders for the election
of directors is properly called by the directors and is notified
in the same manner as is the annual meeting. If the directors
fail to call such meeting within one month after the annual
meeting, or if such meeting is held, but results in a failure to
elect, the meeting for election of directors may then be called
by any stockholder. (G.C.L., §29.)

The usual form of notice is employed when a special meet-
ing for election of directors has been called by the board. (See
Form 41.) The form when such meeting is called by a stock-
holder may be as follows:
300 NEW YORK CORPORATIONS.

Form 92.—Stockholder’s Notice of Special Election.

Ce

ALBANY INDUSTRIAL CORPORATION.

 

Notice is hereby given that the Directors of the Albany Industrial Cor-
poration not having been elected on the day designated in the by-laws, nor
within one month thereafter, a special meeting of the stockholders of said
corporation is hereby called and will be held in the office of the Company,
No. 275 State Street, Albany, New York, on the 25th day of March, 1909,
at 12 o’clock noon, for the purpose of electing Directors of the Company
and for the transaction of such other business as may properly come before
the meeting.

Frank H. McCierranp,
A Stockholder of the
Albany Industrial Corporation.
Albany, New York,
March 8, I909.

(See § 112; also G. C. L,, § 20.)

For requirements as to publication and service of this
notice, see § rord.

In case the books of the corporation cannot be secured
at any such special election, each stockholder present before
voting must present a sworn statement of the stock owned
by him and of the total outstanding stock of the corporation
if known to him, as in the following form.

Form 93.—Sworn Statement of Membership.

Strate ofr New York, \s ;
County of Albany.

George H. Foster, being duly sworn, deposes and says that he is a
member of the Albany Industrial Corporation; that he owns Forty-five
Shares of stock therein; that said shares of stock are now standing in
his name on the books of the corporation, and that the whole number of
shares of stock of said corporation now outstanding is, to the best of his
knowledge and belief, Twenty-five Hundred,

; Grorce H. Foster.
Sworn to before me this
25th day of March, 1909.
Spencer L, Tompxtins,
Inspector of Election.

(See § 112; also G. C. L,, § 31.)
STATUTORY FORMS. 301

These sworn statements must be returned and filed by the
inspectors of election, together with their certificate (see
Forms 46-48), in the office of the clerk of the county in which
the election is held. Any person or corporation feeling ag-
grieved by the conduct of or by matters connected with any
election of directors may apply to the Supreme Court for
relief.

Form 94.—Application to Supreme Court. Review of Election.

i

New York Supreme Court, County of New York.

 

In the Matter
of the
Election of Directors of the Electro
Engraving Company,

 

To THE SUPREME Court oF THE State oF NEw York:

The petition of James C. Rogers respectfully shows to the Court by
Howard A. Butler, his attorney, and alleges:

First-—Upon information and belief that the Electro Engraving Com-
pany above named is a stock corporation duly organized and existing under
and by virtue of the laws of the State of New York and having its prin-
cipal office for the transaction of business at No. 245 Broadway, in
the Borough of Manhattan in the City, County and State of New York.

Second.—That on or about the twenty-fourth day of February, 1900,
your petitioner became the owner in his own right of one hundred and
seventy-five (175) shares of the capital stock of said corporation and at
all times hereafter mentioned he has been and now is the sole owner of
the same,

Third—Upon information and belief that the regularly adopted by-
laws of said Electro Engraving Company provide that the annual meeting
of the stockholders of said corporation for the election of directors shail
be held at the principal office of the corporation on the fifteenth day of
March of each year.

Fourth—Upon information and belief that the regularly adopted
by-laws of said corporation provide that the board of directors of said
corporation may, by resolution adopted at any regular meeting thereof,
close the transfer books of said corporation for a period of not more than
twenty days prior to the annual meeting of stockholders.

Fifth—Upon information and belief that on or about the twenty-fifth
day of February, 1909, the board of directors of said Electro Engraving
Company, at a regular meeting of said board passed a resolution declaring
the transfer books of the said corporation closedonthe first day of March,
1909, to remain closed until after the said annual meeting on the fifteenth
day of March, 1909.

Sixth—That prior to said first day of March, 1909, and on or about
the twenty-sixth day of February, 1909, your petitioner, being the owner
302 NEW YORK CORPORATIONS.

of one hundred and seventy-five shares of the capital stock of the said
Electro Engraving Company as aforesaid, presented a stock certificate
representing said shares and duly assigned to your petitioner, to the sec-
retary of the said corporation, he being the officer designated in its by-laws
for the purpose, and requested the said secretary to record the transfer cf
said one hundred and seventy-five shares of capital stock represented by
said stock certificate, upon the proper books of said corporation to entitle
your petitioner to all of the rights and privileges of a stockholder of said
Electro Engraving Company. :

Seventh.—Upon information and belief that said secretary did not
record the transfer of said shares of capital stock as aforesaid and as
requested by your petitioner, but wilfully and wrongfully neglected and
failed to record the same, all of which has been greatly to the damage of
your petitioner,

Eighth.—That on the fifteenth day of March, 1909, the annual meeting
of stockholders of the said Electro Engraving Company was held and that
your petitioner as a stockholder as aforesaid attended the same and de-
manded to be permitted to exercise his rights as a stockholder of said
corporation. That he prepared a ballot containing his vote for directors
and presented the same to the regularly constituted inspectors of election,
but that they wilfully and wrongfully refused to receive the same, alleg-
ing that your petitioner was not a registered stockholder according to the
books of said corporation.

Ninth—Upon information and belief that at the said meeting the fol-
lowing persons each received three hundred and seventy-five votes and were
declared by the said inspectors of election to be the duly elected directors
of said Electro Engraving Company for the ensuing year, viz.: James C
Brown, Ralph S. Jones and Richard D, Armour.

Tenth—Upon information and belief that at said meeting the follow-
ing persons each received three hundred votes for the office of director,
viz.: Thomas Chatfield, Henry A. Chamberlain and Arthur Du Bois.

Eleventh—That your petitioner favored the election of the said
Thomas Chatfield, Henry A. Chamberlain and Arthur Du Bois for directors
of said Electro Engraving Company and would have voted for each of
them had he not been wrongfully prevented from so doing as aforesaid.

T'welfth—Upon information and belief that if the vote of your peti-
tioner in favor of said Thomas Chatfield, Henry A. Chamberlain and
Arthur Du Bois had been received, they and each of them would have been
elected directors of said Electro Engraving Company instead of James C.
Brown, Ralph S. Jones and Richard D, Armour who were wrongfully de-
clared elected directors of said corporation as aforesaid,

Thirteenth—That by reason of all the matters above set forth
your petitioner has been greatly damaged and deprived of his rights as a
stockholder of the*said Electro Engraving Company.

WHEREFORE your petitioner prays the judgment of this honorable Court
setting aside the said election of directors and ordering a new election at
which the vote of your petitioner may be received and for such other and
further relief as may to the Court appear just.

Howarp A. Butter,
Attorney for the Petitioner,
Office and P. O. Address,
154 Nassau St., New York City,
: Borough of Manhattan.
(Verification in due form.)

(See § 110; also G. C. L., § 32.)
STATUTORY FORMS. 303

(5) DissoLurion.

Form 95.—Dissolution without Judicial Procedure. Cer-
tificate.

THE GLOVERSVILLE LINEN COMPANY
oF
GLovERSVILLE, New York.

CERTIFICATE OF VoLuntARY DissoLution.

We, Robert W. Jackson and James E. Truesdale, respectively Presi-
dent and Treasurer of the Gloversville Linen Company, a corporation or-
ganized under the laws of the State of New York, do make and attest this
certificate of dissolution without judicial proceedings, filing herewith proof
of due publication and service of notice of stockholders’ meeting, the con-
sent of the stockholders thereat to dissolution of the Company, and the
names and residences of the directors and officers of the Company, all as re-
quired by the provisions of Section 221 of the General Corporation Law
to effect dissolution without judicial proceedings; and do herein set forth:

(1) That the Board of Directors of said corporation at a meeting
called for that purpose upon three days’ notice to each director and held
pursuant thereto on the 4th day of January, 1909, at 3 o’clock P. M., did
adopt the following resolution by a vote of the majority of the whole board:

“WHerEAS, In the opinion of the Board it is advisable to dissolve
the Corporation forthwith:

“THEREFORE, BE It Resotvep, That the Board of Directors recom-
mends the dissolution of the Company under the provisions of Sec-
tion 221 of the General Corporation Law, and hereby calls a meeting
of its stockholders to be held in the office of the Company at Glovers-
ville, New York, on the 1oth day of February, 1909, at 10 A. M., for
the purpose of voting upon a proposition for immediate dissolution in
accordance with the requirements of said law.

“That the Secretary be hereby instructed to cause a notice of such
meeting to be published and served according to law, and that the
President or Vice-President, and the Secretary or Treasurer be here-
by authorized and instructed to make and execute all such certifi-
cates, proofs and other instruments in accordance with the facts, as
may be necessary to show compliance with the statutory requirements
for dissolution without judicial proceedings, and to file the same with
the Secretary of State, and to do all such other things as may be
necessary in the matter.”

(2) That notice of the stockholders’ meeting provided for by the
foregoing resolution was duly published in the “Gloversville Record,” a
newspaper published and circulating in the county where the corporation
has its principal office, once a week for three successive weeks next pre-
ceding the time appointed for holding such meeting, as set forth in the
annexed proof of publication.

(3) That on January 20, 1909, being the day of the first publication
of such notice, a copy thereof was duly mailed to each stockholder of
304 NEW YORK CORPORATIONS.

record at his last known post-office address, as evidenced by the annexed
proof of service.

(4) That a meeting of the stockholders of the Company was duly
held pursuant to said notice on the 10th day of February, 1909, at 10
o’clock A. M., in the principal office of the Company at Gloversville, New
York, the place where the last preceding annual meeting of the corpora-
tion was held, and that at such meeting holders of more than two-thirds
in amount of the stock of the corporation then outstanding appeared in
person and adopted the following resolution by unanimous vote:

“RESOLVED, That we as stockholders of the Gloversville Linen Com-
pany approve the recommendation of the Board of Directors for the
dissolution of the Company under the provisions of Section 221 of the
General Corporation Law, and we consent that such dissolution shall
be effected forthwith.”

(5) That holders of more than two-thirds of the capital stock of the
Company thereupon in person duly executed the annexed consent to the
immediate dissolution of the corporation.

In Witness WHEREOF, we have hereunto set our signatures this
12th day of February, 1909,
Rosert W. Jackson, President.
James E, Truesparzt, Treasurer.
(Affidavit of president and treasurer in same form as affidavit given in
Form 63.)

ey Ce

(See G. C. L., § 221.)

Form 96.—Dissolution without Judicial Procedure. Consent
of Stockholders.

GLOVERSVILLE LINEN COMPANY.
ConsENt oF STOCKHOLDERS,

We, the undersigned, being holders of at least two-thirds in amount
of the outstanding stock of the Gloversville Linen Company, hereby signify
our consent to the immediate dissolution of said corporation in accordance
with the provisions of Section 221 of the General Corporation Law.

In Witness WHEREOF, we have hereunto set our signatures and
the number of shares of stock held by each of us in said
corporation, this 1oth day of February, rgo9.

THrEoporE T. LANE, 19 Shares.

Henry Goruam, 57

Rozert W. Jackson, 10
Hewry G. Ips, 2 =
James E. Brower, 10 ff

Attested by:
Rosert W. Jackson, President.
James E. Truespaze, Treasurer.
STATUTORY FORMS. 305

State or New York,

County of Fulton, f***

Robert W. Jackson and James E. Truesdale, being duly sworn, depose
and say, each for himself, that the said Robert W. Jackson is President
and the said James E. Truesdale is Treasurer of the Gloversville Linen
Company, the corporation referred to in the foregoing certificate; that
the foregoing written consent of stockholders to the dissolution of said
corporation was executed in person by such stockholders at a meeting
of stockholders held on the 1oth day of February, 1909, and that the
number of shares set opposite each signature is the number of shares
standing on the books of the corporation in the name of the consenting
stockholder and that the whole number of outstanding shares of said
corporation is One Hundred (100), of which the number consenting is
more than two-thirds,

Rosert W. JAcKSON.

James E, TRUESDALE.
Sworn to before me this 13th day

of February, 1909.

Wi.i1aM FE, Jackson,
NOTARIAL \ Notary Public for
SEAL, Fulton County,

Form 97.—Dissolution without Judicial Procedure. Statement
of Secretary.

GLOVERSVILLE LINEN COMPANY.
STATEMENT OF SECRETARY.

I, the undersigned, Secretary of the Gloversville Linen Company, do
hereby certify that the names and residences of the existing Board of
Directors of said Corporation and the names and residences of its officers
are as follows:

NAMES OF DIRECTORS. RESIDENCES.

James E. Brower ...........-.-.065 Gloversville, New York.

Henry G. Ide. oscswaecaeeeseseeeues . poT Sales

Robert W. Jackson ................. 112 W. 94th St., New York City.
NAMES OF OFFICERS. RESIDENCES.

Robert W, Jackson, President ....... 112 W. o4th St., New York City.

Henry G. Ide, Vice-President ....... Gloversville, New York.

Howard S. Williams, Secretary ..... . a

James E. Truesdale, Treasurer ...... 246 West End Ave., New York City.

: Howarp S. WILLIAMS,
Secretary.
306 NEW YORK CORPORATIONS,

Srate or New York,
County of Fulton.

Howard 8S. Williams, being duly sworn, says that he is the Secretary
of the Gloversville Linen Company and that the names and residences of
the existing directors and officers of said company as above set forth are
to his knowledge true.

SS.

Howarp §. WILLIAMs.
Sworn to before me this 13th day
of February, 1909. }
Paut Apcar,
NOTARIAL Notary Public for
SEAL, Fulton County.

Form 98.—Dissolution without Judicial Procedure. Affidavit
of Secretary.

GLOVERSVILLE LINEN COMPANY.

AFFIDAVIT OF SECRETARY,

State or New York,
County of Fulton,

Howard S. Williams, being duly sworn, deposes and says that he is
the Secretary of the Gloversville Linen Company, the corporation men-
tioned in the foregoing certificate of dissolution; that pursuant to a reso-
lution of the board of directors of said corporation, adopted January 4,
1909, he caused to be published in the “Gloversville Record,” a newspaper
published and circulating in the County of Fulton, in which the principal
office of the corporation is located, once a week for the three weeks next
preceding the date fixed for the special meeting announced therein, a notice
of a special meeting of stockholders, of which the following is a true copy:

“To the Stockholders of the Gloversville Linen Company: Pur-
suant to a resolution of the Board of Directors of said Company
recommending the dissolution of the corporation without judicial pro-
ceedings, and calling a meeting of its stockholders to consider the
same, a special meeting of the stockholders will be held in the principal
office of the Company in Gloversville, New York, on the roth day of

February, 1909, at 10 o’clock A. M., for the purpose of voting upon a

proposition that said corporation be forthwith dissolved.”

Deponent further says that on the 20th day of January, 1909, being
the first day of publication of said notice, he caused a copy of the same, se-
curely sealed in a postpaid packet, to be mailed to each stockholder of
record at his last known post-office address.

Howarp S, WILLIaAMs.

SS.

Sworn to before me this 13th day
of February, 19009.
Josep E, Gans,
NOTARIAL \ Notary Public for
SEAL, Fulton County.

(See G. C, L., § 221.)
STATUTORY FORMS. 307

The foregoing papers, and any proxies, are filed with the
Secretary of State, who issues duplicate certificates of filing.
One of these must be filed with the clerk of the county in
which the corporation has its principal office and a copy must
be published at least once a week for two weeks in one or
more newspapers published and circulating in the county of
the principal office. (See § 56.) Fees to Secretary of State,
$1 each for certificates of filing. Fee to county clerk, 6 cents
for filing certificate.

Petition for voluntary dissolution may be made to the
supreme court by a majority of the directors.

Form 99.—Voluntary Dissolution. Petition.

New York Supreme Court, Kings County,

In the Matter
of the
Voluntary Dissolution of the Standard
Sheeting Company, a Corporation. J

 

 

To tHE SUPREME Court oF THE STATE OF NEW YorK:

The petition of Henry Rogers, Thomas Jones and Henry Swift re-
spectfully shows to the court:

First—That your petitioners are a majority of the directors having
the management of the concerns of the Standard Sheeting Company, a
corporation created under the laws of the State of New York, to wit,
under the Business Corporations Law.

Second.—That said corporation was organized for the purpose of es-
tablishing and operating a factory for the manufacture of linen and cot-
ton sheeting; that its authorized capital stock is $200,000; that of said
capital stock 340 shares of the par value of $34,000 were issued for the
sum of $40,310 in money; that 9500 shares of stock were issued as appears
from the books for services; that your petitioners are not able to state the
kind or character of service rendered by the persons to whom said shares
of stock were issued, as the only entries in the books are the words “for
services”; that in addition ninety-one shares of stock have been subscribed
for and $1,230 paid on account thereof; that of said amount of capital
stock paid in, as appears from the books in the possession of your petition-
ers, $19,500 was paid to the Brooklyn Realty Corporation, on account of the
purchase price of a factory property as specified in a certain contract of
sale between the said Brooklyn Realty Corporation and the Standard
Sheeting Company; that the balance of said capital has been paid in ex-
penses of varying kinds, except the sum of $3,571.68, which is represented
by a bond and mortgage; that the said contract of sale between the said
Standard Sheeting Company and the said Brooklyn Realty Corporation
308 NEW YORK CORPORATIONS,

was canceled by reason of the fact that the said Standard Sheeting Com-
pany was without means to complete the purchase; that there is no pros-
pect of the said Standard Sheeting Company being able to obtain the
requisite capital to engage in business, which is stated in its certificate of
incorporation to be the sum of $200,000; that said Company has not at
any time ever actually engaged in business, and that by reason of said
circumstances your petitioners deem it beneficial to the interests of the
stockholders that the said corporation shall be dissolved.

Third—That the principal office of said corporation is by its charter
located in the Borough of Brooklyn, City of New York; but, in fact, said
corporation has no office or place for the transaction of business.

Fourth.—That your petitioners have annexed to this petition a sched-
ule marked “Schedule A” containing a statement of the matters required
by Section 174 of the General Corporation Law, as far as your petitioners
know or have the means of knowing the same.

WHEREFORE your petitioners pray for a final order of this court dis-
solving the said corporation and for such other and further relief as may
be proper.

Dated January 21, 1909.

F. H, Van Atstyne,
Attorney for Petitioners,
1 Broadway, New York City.

ee eee ns CY ee) cee ew ewe

(See § 56a; also G, C. L., §§ 170, 174, 176.)
Form 100.—Voluntary Dissolution. Schedule.

ScHepure “A.”

First.—A full and true account of all the creditors of the corporation,
and of all unsatisfied engagements entered into by and subsisting against
the corporation:

Robert Potter’ 54 csciascuewewass peeve eisade $1,000
Edward M. Deegan ............0ceeeeueees $2,000

Second—A statement of the name and place of residence of each
creditor, and of each person with whom such engagement was made, and
to whom it is to be performed, if known, or if either is not known, a state-
ment of that fact:

Robert Potter, 100 Ralph Street, Brooklyn, N. Y,
Edward M. Deegan, Baldwin, Long Island.

Third—A ‘fae of the sum owing to each creditor or other per-
sons specified in the last subdivision, and the nature of each debt, demand
or other engagement :

Robert Potter, $1,000, with interest from October 16, 1908, money
loaned to the company,

Edward M. Deegan, as assignee of Henry Franklin, $2,000, with
interest from February 26, 1908, money loaned to the company.
Fourth—A statement of the true cause and consideration of the in-

debtedness to each creditor:

Robert Potter on October 16, 1908, loaned to the company the
sum of $1,000, under an agreement by the company to give him there-
STATUTORY FORMS. 309

for, when issued, mortgage bonds of the company to an equal amount,

bearing six per cent, interest. The company has never issued any

bonds.

The indebtedness to Edward M. Deegan is due him, as assignee
of Henry Franklin, who on February 26, 1908, loaned the company
$2,000, and took a certificate for twenty shares of stock, with an agree-
ment to give him in lieu thereof six per cent. mortgage bonds of the
company, when issued, to an equal amount. No bonds have been issued.
Fifth—A full, just and true inventory of all the property of the cor-

poration, and of all the books, vouchers and securities relating thereto:

Bond and mortgage, Richard Hurst to the Standard Sheeting
Company, $3,571.38. Interest thereon from April 24, 1908, at five
per cent. per annum.

The following books: Minute Book, Stock Certificate Book, Stock
Book, Journal, Ledger, Cash Book,

Sixth—A statement of each incumbrance upon the property of the
corporation by judgment, mortgage, pledge or otherwise:

None.

Seventh—A full, just and true account of the capital stock of the cor-
poration, specifying the name of each stockholder, his residence, if it be
known, or, if not known, stating that fact; the number of shares belong-
ing to him, the amount paid upon his shares, and the amount still due
thereon:

Capital Stock authorized, $200,000.

No. of Amount No. or SHargs.

STOCKHOLDER. ADDRESS. SHARES. PAIDIN ISSUED FOR
MONEY. SERVICES.
August Brown, 117 Vesey St, 5 5
New York City.
Henry R. ead 1224 Fulton St. 25 $1,000 15

Brooklyn, N. Y,
(Full list of. stockholders must be included.)

(See G. C. L., § 174.)
Form tor.—Voluntary Dissolution. Affidavit.

State or New York,
County of Queens.

Henry Rogers, Thomas Jones and Henry Swift being severally duly:
sworn, each for himself deposes and says that the matter of fact stated
in the foregoing petition subscribed by him, and the schedule thereto an-
nexed, and therein referred to, marked Schedule “A,” are just and true,
so far as he knows, or has the means of knowing the same,

Henry Rocers.
Tuomas JONES.
Henry Swirt.

SS..

Sworn to before me this ;
21st day of January, 1909. [Notarial signature and seal.]

(See G. C. L., § 175.)
310 NEW YORK CORPORATIONS.

Form 102.—Voluntary Dissolution. Notice of Application.

New York Supreme Court, Kings County.

In the Matter
of the
Voluntary Dissolution of the Standard
Sheeting Company, a Corporation. |

 

 

Sir:

Please take notice that, upon the annexed petition and the schedule
thereto annexed, I will apply to the Supreme Court at a special term
thereof, to be held at the County Court House, Borough of Brooklyn, City
of New York, on the 1st day of February, 1909, at the opening of the
court on that day, or as soon thereafter as counsel can be heard, for an
order in all respects similar to the proposed order herewith served upon
you, and for such other and further relief in the premises as to the court
may seem proper.

Dated January 22, 1909.

Yours respectfully,
F. H. Van AtstyNe,
Attorney for Petitioners,
1 Broadway, New York City.
To the Hon. Edward R. O’Malley,
Attorney General of the
State of New York.

At a Special Term of the Su-
preme Court, held in the
County Court House, Borough

Present: of Brooklyn, City of New
Hon, Wititam J. Ketty, York, on the 1st day of Feb-
Justice. ruary, 1909.

 

In the Matter
of the
Voluntary Dissolution of the Standard
Sheeting Company, a Corporation. J

 

7

On reading and filing the petition of Henry Rogers, Thomas Jones
and Henry Swift, all of the directors of the Standard Sheeting Company,
verified on the 21st day of January, 1909, and the schedule thereto an-
nexed, and it appearing thereby that this proceeding is one of those author-
ized by Section 170 of the General Corporation Law, and that it will be
for the best interest of the stockholders that said corporation should be
dissolved, and on reading and filing proof of the service of said petition
and schedule and notice of this application upon the Attorney General of
the State of New York, now on motion of F. H. Van Alstyne, Attorney
for the Petitioners, it is
STATUTORY FORMS. 3i1

Orverep, That all persons interested in said corporation show cause at
a Special Term of this court to be held at Supreme Court Chambers in
the Village of Patchogue, County of Suffolk, on the 22d day of March,
1909, at the opening of the Court on that day, or as soon thereafter as
counsel can be heard, why the said corporation should not be dissolved.

And it is further ordered that a copy of this order be published at
least once in each of the three weeks immediately preceding the time so
fixed for showing cause in the “Brooklyn Eagle,’ a newspaper published
in the County of Kings, the said county wherein this order to show cause
is to be entered.

(Signature)

(See G. C. L., §§ 178-181, 312.)

Form 104.—Voluntary Dissolution. Appointment of Referee.

At a Special Term of the Su-
preme Court, held at Supreme

Present: Court Chambers, Patchogue,
Hon. Martin J. Keocu, County of Suffolk, March 22,
Justice. 1909.

 

In the Matter
of the
Voluntary Dissolution of the Standard
Sheeting Company, a Corporation.

 

The above entitled proceeding coming on to be heard at a Special
Term of the Supreme Court appointed to be held at Supreme Court
Chambers at Patchogue, Suffolk County, March 22, 1909, upon the peti-
tion of the majority of the directors of the said Standard Sheeting Com-
pany, verified January 21, 1909, and proof of due service of said order
upon all the stockholders and creditors named in said petition, and upon
the Attorney General, and proof of due publication of said order in the
“Brooklyn Eagle” once in each week for three weeks immediately pre-
ceding the return of said order to show cause, and after hearing F. H.
Van Alstyne, Attorney for the Petitioners, in support of the application,
and Mr. H. Huffman, Attorney for Henry Ash, August Brown and
Henry R. Armour, Stockholders of the above-named corporation, it is on
motion of F. H. Van Alstyne, Attorney for the Petitioners, ordered that
the above entitled proceeding be, and the same hereby is, referred to
Frederick S. Lynch, Esq., Counsellor-at-Law, who is hereby appointed
referee to hear the allegations and proofs of the parties, and determine
the facts.

Ir Is Ornerep, That the said referee make his report in writing, and
that the same be made and filed with all convenient speed, and that his
said report contain a statement of the effects, credits and other property,
and of the debts and other engagements of the corporation and matters
pertaining to its affairs,

Enter in Kings County.

(Signature)

(See G. C. L., §§ 185-188.)
312 NEW YORK CORPORATIONS.

Form 105.—Voluntary Dissolution. Notice of Order. Referee.

Please take notice that the foregoing is a copy of a proposed order
which will be submitted for signature to the Hon. Martin J. Keogh, Jus-
tice of the Supreme Court at Chambers, Patchogue, County of Suffolk, on
March 22, 19090, at 9.45 A. M.

Yours respectfully,
F. H. Van ALstTyNE,
Attorney for Petitioners,
1 Broadway, New York City.
To the
Hon. Epwarp R. O’MALLEy,
Attorney General of the
State of New York.

New York Supreme Court, Kings County.

 

In the Matter
of the
Voluntary Dissolution of the Standard
Sheeting Company, a Corporation.

 

REPORT OF THE REFEREE:

I, Frederick S. Lynch, to whom it was: referred by order of the Su-
preme Court dated March 22, 1909, and entered in the Kings County
Clerk’s office, to hear the allegations and proofs of the parties, and deter-
mine the facts, would respectfully report to the court as follows:

That, proceeding under said order, I took and subscribed the oath of
office hereto annexed. That due notice of hearing having been given to
the Attorney General, and to all parties to this proceeding for June 8,
1909, I was on that day attended by F. H. Van Alstyne, Esq., Attorney for
the Petitioners, and H. Huffman, Esq., Attorney for Henry Ash et al.,
stockholders.

That I have taken all the proofs submitted by any of the parties, and
submit herewith a franscript of the same.

I do, upon said proofs submitted, hereby report to the court as re-
quired by said order, by determining as follows:

That the Standard Sheeting Company is a domestic corporation, or-
ganized and existing under the laws of the State of New York, to wit, the
Business Corporations Law.

That said corporation was organized for the purposes and objects of
the wholesale and retail traffic in and manufacture of linen and cotton
sheetings in the Borough of Brooklyn, City of New York, New York, with.
a capital stock of $200,000 in 2,000 shares of the par value each of $100,
with three directors. That of said $200,000 of capital stock there have
STATUTORY FORMS. 313

been issued 435 shares of the par value of $100 each, and that more than
a year has elapsed since said incorporation.

That the petition herein was signed by a majority of the directors of the
Standard Sheeting Company, and it appears from the evidence that there
is no possibility of procuring the requisite amount of capital with which to
begin or continue the business; that the corporation is liable to an action
for dissolution, by reason of the non-payment of one-half its capital stock;
that the corporation has no plant, and has assets only as stated in the
schedule of assets set forth below, and has liabilities as shown in the
schedule of creditors.

And because of the conditions above set forth, and from the proofs
submitted herewith, I deem, and do determine, and therefore recommend,
that a dissolution of the corporation will be beneficial to the interests of
the stockholders, and not injurious to the public interests, and determine
that the prayer of the petitioners should be granted.

Annexed hereto are schedules of assets of the corporation, and sched-
ule . the creditors of the corporation, all of which are respectfully sub-
mitted.

Dated June 12, 1909. Freverick S. LyNcu,
Referee.

Form 107.—Voluntary Dissolution. Schedule of Assets and
Creditors.

SCHEDULE oF ASSETS.

VALUE,
Any rights which it may be determined exist in the Stand-
ard Sheeting Company because of the alleged wrongful trans-
fer by the officers and directors of the said company of the

assets and business thereof .............:c ec cec sees eee ee acne Unknown.
Any rights which it may be determined exist in the Stand-
ard Sheeting Company under the contract in evidence between
the Standard Sheeting Company and the Brooklyn Realty Cor-
poration for the sale of the factory property then the property

of the Brooklyn Realty Corporation ...............000c cee e eee Unknown.
Any and all moneys which may be recovered from the of-
ficers and directors of the Standard Sheeting Company by
reason of the alleged wrongful taking thereof under claim of
payment to them, as commissions for the sale of the stock of

their COrpOration «: 2 s+ .decedacde is cba cee ta oe oe edad aid omewen Unknown
Cash paid into court under order by Henry Rogers .......... $3,304.04
Office furniture, consisting of desk, chair, twelve chairs

and directors’ table, rug, value estimated at .............-0.eeeeeeee $40.00
Books of the corporation ............ ccc cece eee eect e eens No value.
Cash in the Bedford Bank .......... 0.0.0. ccc cece cence nee eeeeee $3.15

Freperick S. LyNncH,
Referee.
314 NEW YORK CORPORATIONS.

SCHEDULE OF CREDITORS.

 

Robert Potter, 100 Ralph St., Brooklyn, $1,000, with interest from
October 16, 1908. :
Edward M. Deegan, Baldwin, L. L, as assignee of Henry Franklin,
money loaned, $2,000. a
Freverick S. Lyncu,
Referee.

Form 108.—Voluntary Dissolution. Final Order and Appoint-
ment of Receiver.

At a Special Term of the Su-
preme Court, held at the
County Court House, Borough
of Brooklyn, City of New
York, June 30, 1909.

 

Present:
Hon. Wituram J. KeEtty,
Justice.
In the Matter |

of the
Voluntary Dissolution of the Standard
Sheeting Company, a Corporation.

 

The application for a final order confirming the report of the Referee
heretofore appointed herein, and dissolving the Standard Sheeting Com-
pany, coming on to he heard upon the report of Frederick S. Lynch, Esq.,
the said Referee, dated June 12, 1909, and upon all the proceedings herein
and notice of motion and proof of service thereof upon the Attorney Gen-
eral, and upon each person who has made himself a party to these pro-
ceedings by filing with the clerk before the close of the hearing before
the Referee a notice of his appearance as required by law, and after hearing
F. H. Van Alstyne, Attorney for the Petitioners, in support of the applica-
tion, and Mr, H. Huffman, Attorney for eleven stockholders in opposi-
tion, and it appearing to the court that the dissolution of the said Standard
Sheeting Company will be beneficial to the interests of the stockholders
and not injurious to the public interests for the reason that the said com-
pany has never had the amount of capital provided by its certificate of
incorporation as the amount with which it would begin business, and there
is no possibility of#it procuring the said requisite amount of capital, and
that the said company has no plant, and has assets only as stated in the
Schedule of Assets attached to the said Referee’s Report, and has liabilities
as shown in the said Schedule, and is not authorized by law to do business.
Therefore on motion F. H. Van Alstyne, Attorney for the said Petitioner,
it is

Orperep that the said Standard Sheeting Company be, and the same
is, hereby dissolved; and it is further

OrperEp that Geo. B. Thompson, Esq., Counsellor-at-Law, be, and he
hereby is, appointed receiver of all the property of said corporation with
all the powers of such receiver; and it is further
STATUTORY FORMS. 215

OrpErep that said receiver before entering upon his duties shall make
and file with the Clerk of the County of Kings a bond to the people of the
State of New York in the penalty of Four Thousand Dollars ($4,000),
conditioned for the faithful discharge of his duties as such receiver and
for the due accounting of all the moneys received by him. And it is further

OrvERED that the Long Island Loan & Trust Company be, and the
same is, hereby designated as the place of deposit wherein all the funds of
the said corporation not needed for immediate disbursement shall be de-
posited. And it is further

OrpereD that said receiver shall give notice of his appointment, which
notice shall contain the matters required by law in notice of trustees of
insolvent debtors, and in addition thereto shall require all persons holding
any open or subsisting contract of such corporation to present the same in
writing and in detail to such receiver at a time and place in such notice
specified. And that said notice be published for three weeks in the
“Brooklyn Daily Eagle,” being a newspaper printed in the County of Kings,
where the principal place for the conduct of the business of such corpora-
tion is situated. It is further ‘

OrpERED that the said receiver out of the moneys that may come into
his hands shall pay to F. H. Van Alstyne, Attorney for Petitioners, the
sum of $482.63, for the costs and disbursements of the said petitioners
herein, and that he pay to H. Huffman, Esq., the sum of $73.92 hereby
allowed to him as costs herein for the costs of the contesting stockholders.

Enter

(Signature.)
Granted June 30, 19009.

FRANK STILLMAN,
Clerk,

(6) Votine Trusts.

Section 25 of the General Corporation Law provides in
express terms for the formation of voting trusts. The fol-
lowing form complies with the statutory requirements.

Form 109.—Voting Trust Agreement.

Votinc Trust AcREEMENT.

We, the undersigned, stockholders of the Glen Harbor Improvement
Company, a corporation organized under the laws of the State of New
York, and having its principal office in the City of Yonkers, in said State
of New York, do hereby in consideration of the premises and of our
mutual undertakings as herein set forth, severally agree to transfer and
deliver the shares of stock held by-each of us in said corporation to
316 NEW YORK CORPORATIONS.

Emmett M. Brown, William Swift and Andrew McBride, all of the said
City of Yonkers, as Voting Trustees hereunder, and mutually agree with
them and with each other that said Trustees shall hold and vote the said
stock for the period of five years from the date hereof, for the purposes
herein set forth and under the following terms and conditions :

1. All stockholders of the said Company may join in the voting trust
hereby created, by signing this present agreement and transferring, in
whole or in part, the shares of stock held by them in said Company to
the said Trustees, under the conditions and for the purposes of this present
agreement,

2. Each stockholder in said Company joining this voting trust as
afore provided shall become a party thereto from the date on which stock
owned by such stockholder in said Company shall be transferred and
delivered to said Trustees for the purposes of this agreement.

3. The said Trustees shall surrender to the proper officer of the said
Glen Harbor Improvement Company, for cancellation, the certificates for
all shares of stock transferred to said Trustees, and shall, in place thereof,
have certificates of said Company issued to themselves as Trustees, and
on the face of each said Trustees’ certificate shall be stated the fact that
such certificate has been issued pursuant to this agreement.

4. The said Trustees shall collect and receive all dividends and profits
accruing to said stock and shall pay over the same to the respective
equitable owners thereof.

5. The said Trustees shall issue to each stockholder becoming a party
hereto one or more transferable Trustees’ receipts for the number of
shares of stock placed by each of said stockholders respectively in this
voting trust, and when such Trustees’ receipts are duly transferred to
other parties, said Trustees shall recognize such other parties as the lawful
assigns and successors of the original parties hereto, entitled to all of
their rights in the premises.

6. The stock held under this agreement shall, except as hereinafter
specially provided, be voted at any meeting of the stockholders of said
Company by such of the said Trustees as may be present thereat, and said
vote shall be cast as in the judgment of a majority of the said Trustees
present at any such meetings may be for the best interests of the stock-
holders subscribing to this agreement.

7. In all elections for Directors the said stock shall be voted for the
re-election of the present members of the Board of Directors of said
Company, or, in the event of the death, disability or refusal to serve of
any such members, the said stock shall be voted for such other person
or persons as, in the judgment of said Trustees, shall be most suitable for
such office.

8. This agreement shall terminate five years from the date hereof,
and upon such termination the said Trustees shall, as the outstanding
Trustees’ receipts,are surrendered to them, duly endorsed, give over to the
said Company the certificates of stock held by said Trustees, in pursuance
of this agreement, properly endorsed, and shall direct the Officers of said
Company to deliver to the respective owners of the said surrendered
Trustees’ receipts certificates for such number of shares of stock as may
be necessary to satisfy the requirement of the said surrendered Trustees’
receipts.

9. In event of the death, disability, resignation or refusal to act of
any of the Trustees herein named, the remaining Trustees, or Trustee,
shall have power to suitably fill such vacancy or vacancies, and the person
or persons so appointed shall be empowered and authorized to act here-
under in all respects as if originally named herein,
STATUTORY FORMS. 317

10. A duplicate of this agreement shall be filed in the principal office
of the said Company in Yonkers and shall there be kept for the inspection
of any stockholder of the Company, daily, during business hours.

In Testimony Wueregor, the parties to this agreement have here-
unto affixed their hands and seals in the said City of Yonkers
this 27th day of April, 1909,

TRANSFERRED
VOTING TRUSTEES. STOCKHOLDERS. Sa Amee.
Wi1am Swirt. (1. 8.) ERNEst JURGENS. (L.S.) 125
Anprew McBripgk.  (L.S8.) Harotp M. Gitsky, (1. s.) 75
Emmett M. Brown, (2. s.) James Hatsey. (1. s.) 50
Wututs M. AMEs. (4. s.) 75
(G. Cc. 1, § 25.)

A duplicate of this agreement must be kept on file at the
principal office of the company and be open to the inspection of
stockholders daily during business hours. Any stockholder
may upon request become a party to such agreement and upon
transferring his stock to the designated trustees, is entitled to
participate in all its terms, conditions and privileges. (See

§ 98.)
+

CHAPTER XXVII.
FORMS RELATING TO DIVIDENDS.

 

Form 110.—Resolution Declaring Dividend.

ey

Resotvep, That the sum of Ten Thousand Dollars ($10,000) be and
hereby is appropriated and set aside from the surplus profits of the Com-
pany for the payment of the regular one and one-half per cent. (114%)
quarterly dividend upon its outstanding stock, said dividend to be payable
on the 22d day of March, 1909, to stockholders of record as shown by
the books of the Company at the close of business on the 17th day of
March, 1909.

REsoLvep FurtHer, That the Treasurer of the Company be and hereby
is authorized and instructed to give due notice of such dividend, and to
pay the same on the date set forth.

Resotvep, That the regular semi-annual dividend of three per cent.
(3%) upon the outstanding Preferred Stock of the Company be and hereby
is declared from the surplus profits, said dividend to be paid on the roth day
of May, 1909, and to be payable to stockholders who appear of record on
the 1st day of May, 1909, at 3 o’clock P, M.; and that the Treasurer of
the Company be and hereby is instructed and authorized to give due notice
of such dividend and to pay the same on the date set forth,

Be mm ew ee mw wr eww ee ee eee ee ee ee eee eee ete eee

MICHIGAN COPPER COMPANY.
too Broadway, New York,
April 1, 1909.

You are hereby notified that at a meeting of the Directors of the Michi-
gan Copper Company, held this day, a dividend of One and One-half
per cent. (134%) was declared, payable at this office, April 20, 1909, to

318
FORMS RELATING TO DIVIDENDS. 319

stockholders of record at 3 o’clock P. M., April 10, 1909. Transfer books
close at 3 o’clock P. M., April 10, 1909, and reopen at 10 o’clock A. M.,
April 21, 1909.
LAWRENCE WELLS,
Secretary.

In the smaller corporations dividend notices are not us-
ually published, notice by mail being deemed sufficient. In
the larger corporations they are generally both mailed and
published. The following are common forms of publication
notice.

Form 113.—Notice of Dividend. Publication.

UNITED STATES STEEL CORPORATION.

Dividend No. 21 of % of 1% on the Common Stock for the quarter
ending December 31, 1908, was declared January 26, payable March 30,
to stockholders of record March 15. Transfer books close at 3 P. M.,
March 15 and reopen at 10 A. M., April 20, 1900.

RIcHARD TRIMBLE,
Secretary.

a

AMERICAN LOCOMOTIVE COMPANY.
30 Church St., New York, March 25, 1900.

The Board of Directors this day declared a quarterly dividend of one
and three-quarters per cent. upon the preferred capital stock, payable
April 21, 1909, to the preferred stockholders of record at the close of busi-
ness on April 5, 1909. Checks will be mailed.

Transfer books of the preferred stock will close at 3 P. M., April 5,
1909, and reopen April 22, 1909.

S. T. Cattaway,
Secretary.
CHAPTER XXVIII.
BOND ISSUES.

Under the New York statutes, every mortgage by a cor-
poration must be authorized by the consent of the holders of
not less than two-thirds of the capital stock of the corporation.
This authorization may be given either by action at a special
meeting called for that purpose upon the same notice as that
required for an annual meeting (see § 1o1b), or by a writ-
ten consent signed by the holders of the requisite amount of
stock. (See Form 116.)

The form of resolution, if action were taken at a meeting,
would be as follows:

Form 115.—Stockholders’ Resolution Authorizing Mortgage.

Resotvep, That the Board of Directors and proper officers of the
Remsen Realty Company be hereby authorized and empowered to make
and issue its first mortgage, six per cent., thirty-year, gold bonds to the
amount of Three Hundred Thousand Dollars ($300,000) and to secure the
due payment of the principal and interest thereof by executing and de-
tivering to a suitable trustee a first mortgage or deed of trust upon the
entire property and franchises of the said Remsen Realty Company; the
date of issue, number and par value, times of interest payments, and the
form or forms of said bonds, together with all other details pertaining
thereto, to be ig the discretion of the Board of Directors.

The minutes of the special or annual meeting at which
this resolution is adopted should show that the required legal
notice of the meeting has been given, and that a stock vote
of not less than two-thirds of the outstanding stock was cast
thereat in favor of such resolution.

320
BOND ISSUES. 321

When the stockholders of the company are not numerous,
it is simpler to secure the necessary authorization for a bond
issue by a written consent, as shown in the following form:

Form 116.—Stockholders’ Written Consent to Mortgage.

ConsEN?T To Mortcace.

We, the undersigned stockholders of the Remsen Realty Company, a
corporation duly organized and existing under the laws of the State of
New York, with a capital stock of $500,000 divided into 5,000 shares of the
par value of $100 each, owning and holding more than two-thirds of the
capital stock thereof, do hereby consent and agree that the Board of
Directors and proper officers of the said company may make and issue its
first mortgage, six per cent., thirty-year, gold bonds to the amount of Three
Hundred Thousand Dollars ($300,000), and may secure the due payment of
the principal and interest thereof by executing and delivering to a suitable
trustee a first mortgage or deed of trust upon the entire property and
franchises of the said Remsen Realty Company; the date of issue, number
and par value, times of interest payments, and the form or forms of said
bonds, together with all other details pertaining thereto, to be in the dis-
cretion of the Board of Directors.

In Witness WHeErkor, we have hereunto set our signatures and
opposite thereto the number of shares of stock held by each
of us in the said corporation, this first day of March, 1909.

FRANKLIN MorFat, 3,000 shares.
Man ty T. Hewtit, 1,000 shares.
Joun P. GolpMAN, 73 shares.

Strate oF New York,

County of New York, f**"

On this 1st day of March, 1909, before me personally came Franklin
Moffat, Manly T. Hewlit and John P. Goldman, to me known and known
to me to be the persons described in and who executed the foregoing
consent to mortgage, and severally duly acknowledged to me that they
had made, signed and executed the same for the uses and purposes
therein set forth.

NOTARIAL \ : JoHN WISE,
SEAL. Notary Public for New York County.

Whether the consent is given at a meeting or by written
consent, a corporate certificate must be prepared as in the
form following and filed in the office of the clerk or register
of the county wherein the corporation has its principal place
of business. This certificate is drawn on the assumption that
322 NEW YORK CORPORATIONS.

the required authorization was given by resolution. If it were
given in writing, the reference to the consent in the certificate
would be changed to correspond.

Form 117.—Certificate of Consent to Mortgage.

Turis 1s to Certify that pursuant to the provisions of Section 6 of the
Stock Corporation Law, the holders of more than two-thirds of the capi-
tal stock of the Remsen Realty Company, a corporation duly organized
and existing under the laws of the State of New York, have by resolution
duly adopted at a special meeting of the stockholders called for that pur-
pose in accordance with the statute requirements and held in the office
of the Company at 2 o’clock P. M., on the 1st day of March, 1909, given
their consent that the Board of Directors and proper officers of said
corporation may make and issue its first mortgage, thirty year, six per
cent. gold bonds, to the amount of Three Hundred Thousand Dollars
($300,000), and may secure the due payment of the principal and interest
thereof by executing and delivering to a suitable trustee a first mortgage
or deed of trust upon the entire property and franchises of the said Rem-
sen Realty Company; the date of issue, number and par value, times of
interest payments, and the form or forms of said bonds, together with all
other details pertaining thereto, to be in the discretion of the Board of
Directors.

In Wirness WHeEreEor, the said Remsen Realty Company has
caused its corporate signature and seal to be hereunto affixed
by its President and Secretary duly authorized thereto, all
being done in the City, County and State of New York, this
first day of March, in the year one thousand nine hundred and
nine.

REMSEN Reatty ComMPany,
By FranKkiin Morrat,

President.
oe Cuarites E. Warren,
SEAL, Secretary.

Strats of New York,
County of Ne® York.

On the toth day of March, 1909, before me personally came Franklin
Moffat and Charles E. Warren, to me known, who, being by me duly
severally sworn, did depose and say, each for himself, that the said
Franklin Moffat resides in the City of New York and is the President
of the Remsen Realty Company, and the said Charles E. Warren resides
in the City of Newark, New Jersey, and is the Secretary of the Remsen
Realty Company, the corporation described in and which executed the
foregoing instrument; that they each know the seal of the said corporation;
that the seal affixed to said instrument is such corporate seal; that it

SS.
BOND ISSUES. 323

was so affixed by order of the Board of Directors of said corporation and
that they signed their names thereto by like order,
ee Joun Wisk,
SEAL, Notary Public for New York County.

rd wee meee wee Bem we me me ew ee we we

After the execution and filing of this certificate, the di-
rectors meet and pass the following resolution, reciting what
has been done, authorizing the officers to proceed in the
matter, and providing for the details of the transaction.

Form 118.—Directors’ Resolution Authorizing Bond Issue.

Wuereas, As provided by Section 6 of the Stock Corporation Law of
the State of New York, the holders of more than two-thirds of the capi-
tal stock of the Remsen Realty Company have, in accordance with the re-
quirements of the statutes, givén their consent, by resolution duly adopted
at a special meeting of the stockholders called for that purpose, that the
Board of Directors and proper officers of said company may make and
issue its first mortgage, thirty year, six per cent., gold bonds to the amount
of Three Hundred Thousand Dollars ($300,000), and secure the due pay-
ment of the principal and interest thereof by executing and delivering to a
suitable trustee a first mortgage or deed of trust upon the entire property
and franchises of the said Remsen Realty Company; the date of issue,
number and par value, times of interest payments, and the form or forms
of said bonds, together with all other details pertaining thereto, to be in
the discretion of the Board of Directors; and

WuerEas, The President and Secretary of said company have made
and fited in the office of the County Clerk of New York County their
certificate that such consent was legally given;

' Now, Tuererors, Bs It Resotven, That in pursuance of the said con-
sent the Board of Directors of the Remsen Realty Company hereby author-
izes, empowers and instructs the President and other officers of the said
company to make and issue six hundred (600) of its first mortgage, thirty
year, gold bonds of the denomination of Five Hundred Dollars ($500)
each, all the said bonds to be dated the first day of May, 1909, and to bear
interest at the rate of six per cent. per annum, payable semi-annually on
the first days of May and November in each year,* and to secure the due
payment of the principal and interest of said bonds said officers are hereby
further authorized and instructed to execute and deliver to the Metropolis
Trust Company of the City of New York, as.Trustee, a first mortgage or
deed of trust upon the entire plant, property and franchises of the Rem-
sen Realty Company.

* Here may be inserted if desired ‘‘ and said bonds and the interest coupons thereof
and the trustee’s certificate endorsed thereon shall be in substantially the forms follow-
ing:” (Full forms of bond, coupon and trustee’s certificate.)
324 NEW YORK CORPORATIONS.

Form 119.—Coupon Bond.

Unirep States oF AMERICA.

STATE OF NEW YORK.
No, 1. $500.00
REMSEN REALTY COMPANY.

First Mortgage, Six Per Cent., Gold Bonds.

Know Att MEN sy THESE PRESEN?TS, That the Remsen Realty Com-
pany, a corporation organized under the laws of the State of New York,
for value received, hereby promises to pay to the bearer hereof, or if this
bond is registered, to the registered holder thereof, at the office of the
Metropolis Trust Company of the City of New York, on the first day of
May, nineteen hundred and thirty-nine, in gold coin of the United States
of America, of the present standard of weight and fineness, or its equiva-
lent, the sum of Five Hundred Dollars, without deduction from either such
principal or interest for or on account of any United States, State, munic-
ipal or other tax or taxes which the Remsen Realty Company, its successors
or assigns, may be required to pay or deduct therefrom, and the Remsen
Realty Company hereby covenants and agrees to pay all such tax or taxes,
and in the meantime to pay interest upon the said sum of Five Hundred
Dollars from and after the first day of May, nineteen hundred and nine,
at the rate of six per cent. per annum, payable in like gold coin, or its
equivalent, at the same place, semi-annually, on the first days of November
and May in each year, beginning with the first day of November, 1909, on
presentation and surrender of the coupons hereto attached as each of them
becomes due.

This bond is one of a series of six hundred (600) bonds of the same
tenor and date, aggregating Three Hundred Thousand Dollars ($300,000),
numbered consecutively from one to six hundred, both inclusive, for the
sum of Five Hundred Dollars ($500) each, all of which bonds are secured
equally by a deed of trust, which is a first mortgage upon the properties of
the Remsen Realty Company, executed and delivered by the said Remsen
Realty Company to the said Metropolis Trust Company, as Trustee, grant-
ing and conveying in trust and mortgaging as security for the payment
of the principal of said bonds at maturity, at par, and the interest on said
bonds, payable semi-annually at the rate aforesaid, all the real estate and
other property of the said Remsen Realty Company mentioned and de-
scribed in said deed of trust, with full power to use and sell the same in
the event of default in payment of the bonds or coupons, or any of them,
and apply the proceeds to the payment of same as in said deed of trust
provided. This bond is issued, received and held subject to all and singu-
lar the terms and conditions contained in the deed of trust aforesaid.

This bond is@further secured by a sinking fund, which shall consist of
and be maintained by the payment to the said Metropolis Trust Company
by the Remsen Realty Company on the first day of May, 1914, and on
each succeeding first day of May thereafter, until the redemption of all ’
the bonds issued under said deed of trust, of twenty-five dollars for each
thousand dollars of bonds then issued and outstanding, such moneys so
paid to be used in the purchase of outstanding bonds at the lowest price at
which they may be had, not exceeding, however, one hundred and ten per
centum of the face of said bonds plus accrued interest, and if bonds cannot
be so purchased, such moneys shall be used in the redemption of the bonds
outstanding, as hereinafter provided.
BOND ISSUES. 325

This bond shall not become obligatory until the certificate endorsed
hereon shall be signed by the Trustee, and when so authenticated by the
signature of the Trustee the title to said bond shall pass by delivery, unless
said bond is registered, and, if registered, the title thereto shall pass only
by transfer on the books of said Trust Company, and no transfer except
upon said books shall be valid unless the last transfer shall have been to
bearer, which shall restore transferability by delivery.

This bond is redeemable, at the option of the Remsen Realty Com-
pany, on any interest day at any time after the first day of May, 1914, at
IIo per cent. of its face value, plus accrued interest, provided that thirty
days’ notice of such redemption shall be given the holder thereof by notice
published once a week for four consecutive weeks prior to such redemp-
tion, in a newspaper published in New York City.

In Wrrness Wuereor, the said Remsen Realty Company hath
caused these presents to be signed by its President, and its
corporate seal, duly attested by its Secretary, to be hereunto
affixed, and hath hereunto affixed coupons with the name of
its Treasurer engraved thereon, and hath caused this bond
to be dated the first day of May, A. D. one thousand nine
hundred and nine.

ReMsEN ReEatty Company,

oe By Franxiin Morrat,
SEAL. President.
Attest:
Cares FE, Warren,
Secretary.

REMSEN REALTY COMPANY

will pay to the bearer at the office of the Metropolis Trust Company of
the City of New York the sum of Fifteen Dollars ($15), in United States
gold coin, or its equivalent, on the first day of November, 1909, being six
months’ interest on its First Mortgage, Six per cent., Gold Bond No. 280.
FRANK Crossy,
Treasurer.

The Metropolis Trust Company of the City of New York hereby
certifies that the within Bond is one of a series of Bonds described in the
Deed of Trust therein mentioned.

Mertropotis Trust CoMPANY OF THE
City of New York,
Trustee.
By Stanprorp NIVENS,
President.
326 NEW YORK CORPORATIONS.

The following deed of trust is drawn up in pursuance of
the foregoing stockholders’ consent and directors’ author-
izing resolution:

Form 122.—Deed of Trust.

DEED oF Trust.

Tuis InDENTURE, made and entered into this 12th day of April, one
thousand nine hundred and nine, by and between the Remsen Realty Com-
pany, a corporation duly organized and existing under the laws of the
State of New York, having its office at No, 170 Broadway, New York
City, hereinafter called the Realty Company, party of the first part, and
the Metropolis Trust Company of the City of New York, a corporation
duly organized and existing under the laws of the State of New York,
having its principal office at Nos. 37 and 39 Wall Street, New York City,
as Trustee, hereinafter called the Trustee, party of the second part,
WITNESSETH :

Wuereas, The Board of Directors of the said Realty Company has, by
the authority and with the consent of the stockholders thereof, legally
given, duly resolved to borrow Three Hundred Thousand Dollars for the
lawful business purposes of the said Company, and for that purpose to
execute and issue its first mortgage, six per cent., thirty year, gold bonds
of the par value of Five Hundred Dollars each, dated the first day of
May, 1909, and payable on the first day of May, 1939, in gold coin of the
United States of, or equivalent to, the present standard of weight and
fineness, said bonds to bear interest at the rate of six per cent. per annum,
payable in like gold coin, semi-annually, on the first days of May and
November in each year, from the first day of May, 1909, until the pay-
ment of the principal amount thereof; the payment of the principal and
interest of said bonds to be secured by a mortgage or deed of trust that
shall be a first mortgage on the entire property of the said Realty Com-
pany as hereinafter described, said deed of trust to be in substantially
the form of this indenture; and

Wauergas, The bonds so to be issued are to be in substantially the
form following, viz.:

(See Form 119.)

Anp Wuereas, There are to be attached to each of the said bonds,
at the time of the issue thereof, coupons representing the semi-annual in-
stalments of interegt which are to become due thereon, each of which
coupons is to be substantially of the following tenor, the proper coupon
number, date of payment, amount of the bond and its number, and the
engraved facsimile signature of the Treasurer of the Realty Company,
having been inserted in the respective blanks therefor, to wit:

(See Form 120.)
Anp Wuereas, On each of said bonds there is to be endorsed a cer-

tificate of the Trustee or its successor appointed hereunder, of the follow-
ing tenor:

(See Form 121.)
BOND ISSUES. 327

Now, THEREFORE, the said Realty Company, in consideration of the
premises and of the sum of one dollar to it in hand paid by the said
Trustee, the receipt whereof is hereby acknowledged, and in order to
secure the due payment of the principal and interest of the bonds to be
issued hereunder, and to insure the faithful performance of the covenants
and agreements herein contained, hath granted, bargained, sold, aliened,
assigned, conveyed, transferred and set over, and by these presents doth
grant, bargain, sell, alien, assign, convey, transfer and set over unto the
said Trustee, its successors and assigns:

All of the following described property and franchises of the Com-
pany, to wit:

(Specific description of the property mortgaged.)

To Have anv To Hotp all and singular the said property, with all
real estate, buildings, fixtures, articles and property of every kind, be-
longing to or pertaining to the same unto the said Trustee, its successors
and assigns forever.

In Trust, NeverrHetrss, for the equal pro rata benefit and security of
any and all persons and parties who may be or become the owners or
lawful holders of any of the bonds to be issued hereunder and secured
hereby, irrespective of date or priority of issue, without any discrimination,
preference or priority of any one bond over another or others, by reason
of priority in time of issue, or sale, or negotiation thereof, or otherwise,
and to secure the due payment of each of the said bonds together with
the interest thereof, and for the uses and purposes and upon the terms
and conditions hereinafter declared and expressed; and

Ir Is Heresy Expressty CovENANTED AND AGREED by and between the
parties hereto that all such bonds are to be issued, negotiated and received,
and that the said property and franchises mortgaged are to be held by
the Trustee upon and subject to the following further trusts, uses, con-
ditions and covenants, that is to say:

First—The bonds to be issued hereunder shall be executed on behalf
of the Realty Company, by its proper officers, and shall be delivered to
the Trustee for certification, and said Trustee shall certify and deliver
said bonds so certified upon the order of the Board of Directors of the
Realty Company. An order purporting to be the order for delivery of
said bonds and believed by the Trustee to be genuine shall be conclusive
authority and full protection to the Trustee for the certification and de-
livery of the bonds.

Only such bonds as shall bear thereon endorsed the Trustee’s certifi-
cate, duly executed, shall be secured by this indenture, or entitled to any
lien, right, or benefit thereunder, and such certificate of the Trustee upon
any such bond executed by the Realty Company shall be conclusive evi-
dence that the bond so certified has been duly issued thereunder, and that
the holder is entitled to the benefit of the trust hereby created.

Before certifying or delivering any bond, all coupons thereon then
matured shall be cut off, canceled and delivered to the Realty Company.

Second—All bonds secured hereunder may be registered in the name
of the holder when so requested by such holder, upon bond transfer books
which the Realty Company shall maintain and keep for such purpose at
the office of the Trustee in the City of New York as long as any of the
said bonds shall remain outstanding. After such registration such bonds
shall be transferable only upon such transfer books, by the registered
owner or his lawful attorney, and any such transfer shall be noted on the
bonds by the endorsement of the Transfer Agent hereinafter appointed.
328 NEW YORK CORPORATIONS.

After registration of any bond, the principal thereof shall be payable only
to the registered owner, but the coupons shall be payable to the bearer
upon presentation and surrender thereof, and shall be negotiable by de-
livery as if-such bond was not registered.

Any registered bond may at any time be transferred by the registered
owner thereof, upon said transfer books to bearer, and such transfer shall
be noted upon said bond, and the said bond shall thereupon be negotiable
by delivery as if it had never been registered, and each of said bonds shall
continue subject to successive registration and transfer to bearer at the
option of the holder thereof.

For the purpose of registering and transferring said bonds as above
set forth, the Metropolis Trust Company of the City of New York is
hereby appointed and constituted Transfer Agent of the said Realty
Company.

Third—Until default shall be made by the Realty Company, its
successors or assigns, in the payment of the principal or interest of the
bonds hereby secured, or any of them, or in the performance of any of the
covenants, agreements and provisions on its part to be kept and performed,
as herein set forth, the Realty Company, its successors and assigns, shall
be permitted to possess, manage, use and occupy the premises affected
hereby, with all their appurtenances and belongings in all respects as fully
as if this indenture had not been made.

Fourth—Ilf the Realty Company shall well and truly pay to the
holders thereof the principal of the bonds secured hereunder and the
interest moneys becoming due thereon respectively at the time and in the
manner specified in the said bonds and coupons thereto annexed, and shall
keep and perform all the covenants, agreements and stipulations on its
part in said bonds or in this agreement contained, then these presents and
the trust hereby created shall cease and determine, and the said Trustee
shall in such event release and discharge this mortgage and the property
and premises encumbered thereby. The Trustee may also execute such
release and discharge upon production by the Realty Company or its
assigns of all the bonds issued hereunder, together with the coupons there-
to belonging, canceled or for cancellation, and the Trustee shall not be
under any liability or obligation to inquire into the holding of said bonds
by the Realty Company or its assigns.

Fifth—The said Realty Company, while it shall be in possession of the
mortgaged premises, and while there shall be no existing default in respect
of the payment of the principal or interest of any of the said bonds of the
Realty Company, or in the performance of any of the covenants herein,
may, with the consent in writing of the Trustee, sell any portion of the
premises heretofore granted. If, in the opinion of the Board of Directors
of the Realty Company, such sale or change shall be expedient, said opinion
shall be expressed in a resolution of the said Board, and the Trustee may
upon delivery to it ®f a copy of the resolution of the Board of Directors
to that effect release from the lien and operation of this indenture any
part of the premises hereby mortgaged, provided that the purchase money
from such sale or sales shall be paid to the said Trustee for application
to the discharge of the bonds and coupons hereunder issued, as set forth
in Section Fifteenth, or to be set aside to be applied by the Realty Com-
pany in payment for other real or personal property or in betterments of
or additions to some part of the premises mortgaged hereby, and until so
applied shall be held by the Trustee. Any new property so acquired by
the Realty Company shall ipso facto become and be subject to the lien of
this indenture as fully as if specifically mortgaged or pledged hereby, but
BOND ISSUES. 329

if requested by the Trustee the Realty Company shall execute special
instruments of incumbrance upon such properties.

Sixth—The Realty Company covenants and agrees that it shall and
will promptly pay the interest and-the principal of the bonds hereby se-
cured, at the time and in the manner specified in said bonds and the
coupons thereto attached, without deduction from either such principal
or interest for or on account of any United States, State, municipal or
other tax or taxes which the Realty Company, its successors or assigns,
may be required to pay or deduct therefrom, and the Realty Company
hereby covenants and agrees to pay all such tax or taxes,

The Realty Company further covenants and agrees that it shall and
will, from time to time, promptly pay and discharge, or cause to be paid
and discharged, all taxes, rates, levies or assessments and charges, ordinary
and extraordinary, levied or imposed upon the premises and properties
mortgaged to the Trustee to secure the payment of the bonds issued here-
under, or on any part thereof, the lien of which might or could be held
prior or equal to the lien of this indenture, so that the same shall not fall
into arrears and so that the priority of this indenture given to secure said
bonds shall be preserved.

The Realty Company further covenants and agrees that it will not
create nor suffer any mechanic’s, laborer’s or other similar liens to be
created upon the premises and property mortgaged to secure the bonds
issued hereunder, whereby the lien of this indenture might or could be
impaired, until the bonds so secured hereunder, with all the interest ac-
crued thereon, shall have been fully paid and satisfied.

Seventh—aA sinking fund shall be created for the redemption of the
bonds issued hereunder. It shall consist of and be maintained by the
payment to the Trustee by the Realty Company on the first day of May,
1914, and on each succeeding first day of May thereafter until the redemp-
tion of all the bonds issued hereunder, of twenty-five dollars for each
thousand dollars of bonds then issued and outstanding, such moneys so
paid to be used in the purchase of outstanding bonds at the lowest price at
which they may be had, not exceeding, however, one hundred and ten per
centum of the face value of said bonds, plus accrued interest, and if bonds
cannot be so purchased, such money shall be used in redemption of bonds
outstanding as provided and set forth in Section Fifteenth.

Eighth—The Realty Company covenants and agrees that this deed of
trust delivered to the Trustee shall be a first mortgage upon the premises
and property affected thereby; that the same shall be duly executed and
recorded in the proper office of registry in the County of New York where
the said premises are situated, and that the Realty Company will execute
and deliver such further deeds, transfers, pledges and assurances as the
Trustee, under the advice of counsel learned in the law, shall reasonably
require for the better accomplishing of the purposes and provisions of this
indenture. .

Ninth—The Realty Company covenants and agrees that all buildings,
structures and machinery situated upon the properties affected by this
mortgage given to secure the bonds issued hereunder, shall be kept insured
during the entire term of this indenture to the amount of insurance on such
properties usually allowed by insurance companies, against loss or damage
by fire, and against loss or damage from boiler explosions, and that the
said Realty Company shall and will pay all premiums upon all policies for
such insurance. Alli such policies shall be made payable to the Trustee,
and shall be deposited with it for the benefit and protection of the bond-
330 NEW YORK CORPORATIONS.

holders should any loss occur from fire or boiler explosion during the term
of this indenture. Any payments of insurance made under such policies
may be applied directly by the Trustee to the repairing or replacement of
the property damaged or destroyed, or it may authorize the Realty Com-
pany to contract for such repairs or replacements, and pay part or all of
the cost thereof from said insurance moneys. The Trustee may in its
discretion employ such insurance moneys in the purchase or redemption
of outstanding bonds as set forth in Section Fifteenth, instead of expend-
ing the same for repairs or replacement of property damaged or destroyed.

Tenth—The Realty Company covenants and agrees that it shall and
will at all times keep the buildings, structures and appurtenances thereto,
or any replacement or replacements thereof in good order and repair; pro-
vided, however, that in the event of total destruction of any building, the
Realty Company may, with the consent of the Trustee, add to the insur-
ance moneys received thereon by the Trustee sufficient cash payments to
release the special property upon which such building was situated, under
the terms set forth in Section Fifth, whereupon the Trustee shall release
the said property and the Realty Company may dispose of the same at its
discretion.

Eleventh—The Realty Company covenants and agrees that when and
as the coupons attached to the bonds issued hereunder are paid, the
coupons shall be canceled, and that no purchase or sale of the said cou-
pons or advance or loan upon the same, made on behalf of, or at the
request of, or with the privity of the said Realty Company, and no re-
demption of the said coupons, or any of them, by any guarantor of the
payment of the same, shall be taken or operate as keeping the said coupons
alive or in force, under this indenture as against the holders of the bonds
secured hereunder and of the coupons annexed thereto,

Twelfth—tIn case default shall be made in the payment of interest on
any of the bonds issued hereunder, and such default shall continue for a
period of six months after demand, or in case default shall be made in the
performance of any other covenant or condition hereby required to be
kept or performed by the Realty Company, and if the same shall continue
for a period of six months after demand made for such performance, the
Trustee may, and, upon the written request of the majority in amount
of the holders of the bonds then outstanding, shall by written notice to
the Realty Company, declare the principal of all the bonds hereby secured,
then outstanding, to be, and the same shall thereupon become, immediately
due and payable.

Thirteenth—In case default shall be made in the payments of the
principal or interest of any of the said bonds when the same is due and
payable according to the tenor thereof, or if default shall be made in the
performance of any other covenant or condition, hereby required to be
kept or performed by the Realty Company, and if any such default in pay-
ment or performance shall continue for a period of six months after
demand by the Trustee, then and in every such case the Trustee, or its
successors in the Trust, may by its attorneys and agents enter into and
upon all and singular the premises hereby conveyed, and each and every
part thereof and operate and conduct the business of the said Realty Com-
pany in all respects as the said Realty Company might do in possession of
the same; and may collect and receive all rents, income, revenue and profit
to be derived therefrom, and after deducting all proper and necessary
outlays and expenses as well as a just compensation for its own services
and for the services of such attorneys, agents and assistants as it may, in
BOND ISSUES. 331

its discretion, employ for any of the purposes aforesaid, said Trustee shall
apply the rest and residue of the moneys received by it pro rata to the
payment of the interest due upon such of said bonds as shall then be out-
standing. In any such case if payment of all interest and any principal
due shall be made in full and no suit to foreclose this mortgage shall have
been begun or sale made, the said Trustee shall restore the possession
of the premises so entered to the Realty Company without prejudice to
similar entry later in case of similar default.

Fourteenth—In case default shall be made in the payment of the
principal or interest of the said bonds, when the same is due and payable
according to the tenor thereof, or if default shall be made in the perform-
ance of any other covenant or condition hereby required to be kept or
performed by the Realty Company, and if any such default in payment
or performance shall continue for the period of six months after demand,
the Trustee may, and upon written request of the holders of a majority
in amount of the registered bonds then outstanding, being first indemnified
by them to its satisfaction, shall sell or foreclose upon, according to the
proceedings by law prescribed in this State, all or any portion of the
property held by it under this indenture, and such proceedings of sale or
foreclosure shall be a perpetual bar both at law and in equity against the
Realty Company and against all persons claiming by, from or under it.
After deducting from the proceeds of such sale or foreclosure, the proper
allowance for all expenses thereof, including attorney’s and counsel fees,
and all other expenses or advances which may have been made or incurred
by said Trustee in respect of the said property or the appurtenances there-
to, and all payments which may have been made by it for taxes or assess-
ments, or in satisfaction of charges and liens, prior to the lien of the mort-
gages and deeds of trust to the Trustee thereon, or for insurance, as well
as reasonable compensation for its own services, the Trustee shall apply
the proceeds to the payments of such bonds and the coupons thereon as
may be at the time unpaid, without giving preference or priority to one
bond over another, but ratably to the aggregate amount of such unpaid
principal and accrued and unpaid interest, and if any surplus remain after
the payment in full of the principal and interest of said bonds, then the
Trustee shall transfer and pay over such surplus to the Realty Company.

Fifteenth.—It is covenanted and agreed between the parties hereto and
any future holders of the bonds that the said bonds are redeemable, at the
option of the party of the first part, on any interest day after the first day
of May, I914, at one hundred and ten per cent. of their face plus accrued
interest, provided that thirty days’ notice of such redemption shall be given
the holders thereof, by notice published once a week for four consecutive
weeks prior to such redemption, in a newspaper published in New York
City. If said bonds are registered, then a copy of the said notice shall be
sent to the post-office address of the parties in whose names said bonds
are registered,

Whenever it is desired to redeem any of said bonds, the Board of
Directors of the Realty Company shall pass a resolution setting forth the
amount of bonds (at their par value) desired to be redeemed. The Presi-
dent of the Realty Company shall thereupon draw by lot the numbers of
the bonds to be redeemed, and he shall thereupon certify that such bonds
were drawn for redemption, which certificate shall be entered upon the
minutes of the Realty Company, and a duplicate copy shall be delivered
to the Trustee. Said bonds having been so drawn for redemption shall
become due and payable on the succeeding interest payment date, provided
that the date of first publication and the date of mailing notice to register-
332 NEW YORK CORPORATIONS.

ed holders of bonds shall have been not less than thirty days prior to such
interest payment date, and the said bonds shall from such interest pay-
ment date cease to draw interest, and the said Realty Company may, upon
the deposit of the proper amount with the Trustee, be privileged to con-
sider said bonds as paid and canceled.

Sixteenth—The Trustee may resign the trust hereby created upon
giving sixty days’ notice in writing to the Realty Company. In case of the
resignation of the Trustee, or of its dissolution or insolvency, or removal
for cause as Trustee hereunder, it shall be the duty of the Realty Com-
pany to call a meeting of the bondholders by printed notice, published in
two of the public newspapers of New York City, once a week for three
consecutive weeks next preceding such meeting, calling such meeting to be
held in the said City of New York, and by mailing notice of the same to
each of the registered bondholders not less than ten days before the date
of such meeting. At the time and place specified in such notice, the holders
of said bonds, in such meeting assembled, shall organize and proceed to
elect a suitable corporation to act as Trustee under this agreement, and a
majority in amount of such bonds legally represented at such meeting shall
be competent to elect such new Trustee, and the corporation so elected
shall immediately upon election and on its acceptance in writing of such
trust become vested with all the estate, trusts, rights, powers and duties
of the present Trustee herein, and shall be entitled to receive from the
present Trustee or its legal representatives all moneys, mortgages and
pomirances appertaining or relating to this trust and the due execution
thereof.

Seventeenth—It is covenanted and agreed by the parties hereto, and
all the holders of bonds hereunder, as conditions precedent to the accept-
a of the said trust by the said Trustee, or any successor thereto, as
follows: 5

The Trustee shall not be answerable for any act, default, neglect or
misconduct of any of its agents or employees, by it appointed or employed,
in connection with the execution of any of the said trusts, nor in any
other manner answerable or accountable, under any circumstances what-
soever, except for bad faith. The recitals contained herein, or in the
bonds, as to priority of lien, or any other matter whatsoever, are made by
and on the part of the Realty Company, and the Trustee assumes no
responsibility for the correctness of the same. It shall not be the duty of
the Trustee to file or record at any time this deed of trust or any other
mortgages or deeds of trust that may be required hereunder, nor to do
any other act or acts suitable and proper to be done for the creation or
continuance of the lien or liens thereby intended, nor to effect insurance
against fire or explosion, nor to renew any policies of insurance, nor to
keep itself informed as to the payment of any taxes or assessments, nor
to require such payments to be made. The Trustee may, however, in its
discretion, do any or all of these things. Neither shall the Trustee be held
responsible for the nature or amount of the security mortgaged to it here-
under. The Trustee shall not be compelled to take any action, as Trustec,
under this mortgage, unless properly requested and in every respect indem-
nified to its full satisfaction. The Trustee shall be entitled to reasonable
compensation for all services rendered hereunder or in connection with the
trust. This compensation, together with any and all necessary and rea-
sonable expenses, charges, counsel fees and other disbursements incurred
by the Trustee in the discharge of its duties, as such, shall be paid by the
Realty Company, or out of the trust estate upon which they are hereby
made a lien, prior to that of the bonds issued hereunder. ‘The Trustee
BOND ISSUES. 333

shall be protected in acting upon any notice, consent, request, certificate,
bond or any other paper or document believed by it to be genuine and signed
by the proper party. The Trustee shall be held responsible for the due
authentication by certificate of the bonds issued hereunder, and for the
custody and disposition, as herein provided, of the securities and moneys
received by it hereunder.

Fighteenth—It is covenanted and agreed between the parties hereto
that the words “Realty Company” when used in these presents mean the
party issuing the bonds herein referred to; that the word “Trustee” means
the corporation charged with the execution of the trust herein, whether
the same be the Metropolis Trust Company of the City of New York, or
any successor or successors in the trust hereby created; that the word
“bonds” means the bonds issued hereunder; and the words “Trustee,”
“bond,” “bondholder” and “holder” shall include the plural as well as the
singular number and the term “majority” shall signify the majority in
amount,

Nineteenth—lIt is covenanted and agreed that this indenture may be
executed in several counterparts, each of which so executed shall be
deemed to be an original, and such counterparts shall together constitute
but one and the same instrument,

In Witness WuHeErEor, the Remsen Realty Company has caused its
corporate name to be hereunto subscribed by its President
and its corporate seal to be affixed and attested by its Secre-
tary and the Merropotis Trust ComPANy oF THE CITY oF
New York, in token of its acceptance of the trust hereby
created, has caused its corporate name and seal to be here-
unto affixed by its President, and attested by its Secretary
on this twelfth day of April, one thousand nine hundred

and nine,
ReMSEN REALTY CoMPANY,
ee By Franxiin Morrat,
SEAL. President.
Attest:
CuHariis E,, WARREN,
Secretary.
Merropotis Trust CoMPANY OF THE Crty oF NEw York,
As Trustee.
oo By STanpForp NIvENs,
SEAL. President.
Attest:
BarttEy HayveEn,

Secretary.
(Notarial acknowledgment by president of each corporation.)

sme me rem ewer ree ee ear sere reer ener ease reeset eees ewe wae

(See Form 58 for acknowledgment.)

It will be understood that the preceding form has, on
account of space limits, been reduced to its simplest terms.
334 NEW YORK CORPORATIONS,

The form as given is, however, a good working model, has
received the endorsement of some of the leading corporation
attorneys of the state and will be found a safe and excellent
basis upon which to build up the more elaborate instruments

when required.
PART III.—TABLES.

Table No. 1.

Organization Expenses and Franchise Tax.

Organization

Capitalization. Tax.
$ 500..... $ 1.005 941%
2,000..... I.00....
2,800.6 iis 125 evs
3,000..... 1.50....
4,000..... 2.00....
5,000...... 2.50....
6,000..... 3.00....
7,000..... REO a»
7,500..... BB ache
8,000..... 4.00....
9,000..... 4.50....
T0,000...., 5.00....
12,000..... 6.00.....
15,000..... ZO nea:
20,000..... 10.00....
25,000..... 12.50....
40,000..... 20.00....
50,000..... 25.00....
60,000..... 30.00....
70,000..... 35.00....
75,000..... 37.50....
80,000..... 40.00....
100,000..... 50.00....
150,000..... 75.00....
200,000..... 100.00....
250,000..... 125.00....

$

Total Annual Franchise
Expense.* Tax, 6% Dividend.}
16.00..... $ 75
16.00... ... 3.00
16.25..... 3.75
16.50..... 4.50
17.00.41... 6.00
17.50..... 7.50
18.00...... 9.00
18.50..... 10.50
18.75.04... 11.25
19.00..... 12.00
19.50...... 13.50
20.00..... 15.00
21.00..... 18.00
22.50..... 22.50
25.00..... 30.00

ose 37.50
ek, 60.00

2 75.00

40.00.
A500. wis 90.00
BO00 ewe 6 105.00
52.50. ..«- 112.50
55:00..... 120.00
65.00..... 150.00
Q0.00..... 225.00

oes 300.00
ses 375.00

*“ Total Expense” includes organization tax, fee to Secretary of State and all inci-

dental fees. See Ch. II, ‘‘ Expenses of Incorporation.”

+ See Ch. XIV, ‘' State Taxation.”’

335
336 NEW YORK CORPORATIONS.

Organization Expenses and Franchise Tax (continued),

Capitalization. ae Eup fam Dinaendd

$ 300,000..... $ 150.00.... $ 165.00.....$ 450.00
400,000..... 200.00.... 215.00..... 600.00
500,000..... 250.00.... 265.00..... 750.00
700,000..... 350.00.... 365.00..... 1,050.00
1,000,000..... 500.00....  515.00..... 1,500.00
1,500,000..... 750.00.... 765.00..... 2,250.00
2,000,000..... 1,000.00.... I,015.00..... 3,000.00
10,000,000..... 5,000.00.... 5,01§.00..... 15,000.00

*‘ Total Expense” includes organization tax, fee to Secretary of State and all inci-
dental fees. See Ch. II, “ Expenses of Incorporation.”
+ See Ch. XIV, “State Taxation.”

Table No. 2.
State Fees.

(Executive Law.)

(a) FEES TO SECRETARY OF STATE.

§ 26. Fees. The secretary of state shall collect the following
fees:

2. For searching the records in his office for any one year and
for every other year in which such search is made, six cents.

3. ‘ For a copy of any paper or record not required to be certified
or otherwise authenticated by him, ten cents per folio.

4. For a certified or exemplified copy of any law, record or
paper, fifteen cents per folio, and one dollar additional for the cer-
tificate under seal of his office, attached thereto.

5. For a certificate under the great seal of the state, one dollar.

6. For recording a certificate, notice or other paper required to
be recorded, except as otherwise provided by this section, fifteen
cents per folio.

7. For a certificate of the official character of a commissioner
of deeds residing in another state or a foreign country, twenty-five
er and for every other certificate under the seal of his office, one
ollar.

12. For filing and recording the original certificate of incorpora-
tion of a railroad corporation for the construction of a railroad in a
foreign country, fifty dollars; for filing the original certificates of every
other railroad corporation, twenty-five dollars; for filing the original
certificate of any other stock corporation, ten dollars; for filing any
original certificate of incorporation drawn under article three of the
membership corporations law, ten dollars.
TABLES. 337

State Fees (continued).

13. For filing the certificate of a foreign corporation desiring to
do business in the state, ten dollars.

17. For a certificate under subdivision three of section nine of
the general corporation law, ten dollars.

(b) FEES TO COMPTROLLER.

§ 42. Fees. The comptroller shall collect the following fees:

1. For copies of all papers and records not required to be cer-
tified or otherwise authenticated by him, ten cents per folio.

2. For certified or exemplified copies of all records and papers,
fifteen cents per folio.

3. For every certificate under the seal of his office, one dollar.

Table No. 3.

Local Fees.
(Code of Civil Procedure.)

FEES TO COUNTY CLERKS.

§ 3304. Fees of county clerks generally. A county clerk is en-
titled, for the services specified in this section, except where another
fee is allowed therefor by special statutory provision, to the following
fees to be paid in advance; * * *

For a copy of an order, record, or other paper, entered or filed in
his office, eight cents for each folio. * *

For recording any instrument, which must or may legally be re-
corded by him, ten cents for each folio. * * *

For filing any paper required by law to be filed in his office, other
than as expressly provided for in this section, six cents.
338 NEW YORK CORPORATIONS.

Table No. 4.

General Schedule of Fees.

 

Fees payable to state and county officials for filings, recordings or
certifications in connection with corporate proceedings, as listed below.

Fees may be paid in cash, by money order, New York Exchange or
certified check.

Incorporation. (See Chap. IT.)

State Treasurer. Organization tax of one-twentieth of one
per cent. on authorized capitalization.
Sec’y of State. Filing charter, $10; recording, 15 cents per

folio; certified copies, 15 cents per folio and $1
additional for office seal of Secretary of State;
exemplification under Great Seal of State, $1
additional.*

County Clerk. Filing fee, 6 cents for each instrument; re-
cording fee, 10 cents per folio; certified copies,
8 cents per folio.

Consolidation. (See § 70.)

Fees same as on original incorporation, ex-
cept that organization tax is paid only on cap-
italization in excess of the aggregate capital of
the constituent corporations.

Amendments to Charter. (See §§ 72, 72a.)
State Treasurer. No fees except on amendments increasing
: capital stock when one-twentieth of one per
cent. must be paid on amount of increase.
Sec’y of State. No filing fee; other fees same as for orig-
inal certificate except for amendment changing
corporate name, which see.

County Clerk. Same as for original certificate, except for
change of corporate name, which see.
Comptroller. Amendments decreasing capital stock re-

quire Comptroller’s certificate in duplicate. Fee
for each certificate, $1.

Payment of One-Hilf Capital Stock. (See § 74.)

Sec’y of State. cn Fee for recording certificate, 15 cents per
olio.

County Clerk. Fee for filing certificate, 6 cents; recording
same, 10 cents per folio.

“Copies ot charters certified by the Secretary of State must be authenticated by the
office seal. Exemplified copies are in addition impressed with the Great Seal of State. In
any case the fees are 15 cents for each folio—1oo words—contained in the instrument, and
$1 for each seal affixed. For instance a charter containing 10 folios would cost, if certified,
$2.50; if exemplified, $3.50. Exemplified copies are usually required for filing in other
states or in foreign countries.
TABLES. 339

General Schedule of Fees (continued).

Change of Corporate Name. (See § 72.)

Sec’y of State. Certificate that name does not conflict, $1;
for recording affidavit of publication of order,
15 cents per folio. Copy of petition and notice
of motion must be filed to reserve proposed
name pending the proceedings, as must also
copy of court order, certified by county clerk.
but no fees are payable therefor.

County Clerk. Fee for filing order, 6 cents; 10 cents per
folio for recording same and 8 cents for cer-
tified copy; also 6 cents for filing affidavit of
publication of order and Io cents per folio for
recording same.

Merger of Corporations. (See § 71.)

Sec’y of State. Fee for recording certificate, 15 cents per
folio.
Reports,—Annual, Comptroller’s or Local Tax. (See Chap. XVI.)
No fees.
Report, Inspectors of Election. (See § 108.)
County Clerk. Fee for filing, 6 cents.
Dissolution without Judicial Procedure. (See § 56.)
Sec’y of State. No filing fees. Duplicate certificates of
filing, $1 each.
County Clerk. Fee for filing Secretary of State’s certifi-

cate of filing, 6 cents. (10 cents per folio for
recording is also exacted.)

Dissolution by Incorporators. (See § 56.) ,
Sec’y of State. Certificate must be filed but no fees are
paid.
County Clerk. Filing fee, 6 cents; recording, 10 cents per
folio.

Foreign Corporations, Admission of. (See Chap. XVII.)

Sec’y of State. Filing fee, $10; certificate of authority, $1.
(Revocation and designation of new agent, or
notice of change of agent’s office must be filed
in office of Secretary of State, but no fees are
paid.)

Consent to Mortgage. (See § 67.)

County Clerk. Fee for filing stockholders’ consent, 6
cents; recording, 1o cents per folio.

Transfer of Stock. (See § 87.)

Tax of 2 cents on each $100 of face value or
fraction thereof. Payable by stamp affixed to
instrument of transfer.
340 NEW YORK CORPORATIONS.
Table No. 5.

Corporate Calendar

 

The calendar which follows is arranged for a New York corpora-
tion having its principal office in New York City and holding its an-
nual meeting of stockholders on the second Tuesday of January at 3
P. M., with quarterly meetings of directors on the second Wednesdays
of January, April, July and October at 4 P. M. Its by-laws require
the statutory publication notice of annual meetings and twenty days’
written notice, with five days’ notice of directors’ meetings. Its stock
book is closed twenty days before the annual meeting.

CORPORATE CALENDAR
of the
McFOREST CONTRACTING COMPANY,
of New York City.

1909.

 

January.

and. Franchise Tax Payable. Must be paid before January 15th.
Based upon November report to State Comptroller.
Amount of tax is notified to Company by State Comp-
troller. Checks should be made payable to State Treas-
urer. (See § 138, “Franchise Tax.”)

Publication Notice of Annual Meeting. Must be published
in a newspaper of New York County once each week for
two successive weeks immediately preceding the annual
meeting. (See § 101 (b), “Notice of Annual Meeting.”)

8th. Notify Directors of meeting to be held January 13th. If
directors are elected at annual meeting (January rath),
this notice—unless by-laws provide that regular meetings
of directors are valid notwithstanding any irregularity
of notice—will be vitiated as to all directors elected at
such meeting and must be replaced by waiver of notice
signed after election by all the newly elected directors.
(Seq § tor (b), “Notice of Annual Meeting.”)

11th. City Assessments made for 1909 (second Monday in Janu-
ary). Books open for correction till March 31st inclusive.
If notice of assessment is not received in the early part
of January, application should be made for same. Tax
Commissioners usually send notice, but are under no ob-
ligation to do so. (See Chap, XV, “Local Taxation.”
(See Form 68, “Local Tax Report, New York City,” for

form of application for revision and correction of assess-
ments.)
TABLES. 341

Corporate Calendar (continued).

tath. Annual Meeting of stockholders at 3 P. M.
13th. Directors’ Meeting at 4 P. M.

15th. Last Day for payment of State franchise tax. Also on this
date unpaid city tax bills for personal taxes may be
placed in marshal’s hands for collection.

16th. Annual Report. Must be filed during January and not later
than January 31st with Secretary of State. No filing fees.
Blanks not supplied by officials. No penalty is provided
for failure to file this report unless such filing is re-
quested by some stockholder or creditor of the Com-
pany, and not then if the report is filed within thirty
days after the request is made. (See § 174, “Annual
Report.”)

30th. Last Day for Filing annual report, January 31st falling on
Sunday.
March
16th. Statement and Application for revision of unsatisfactory as-
sessments, if not already filed, should be sent in to the
Commissioner of Taxes and Assessments. Will not

be received after March 31st. Blanks furnished by Com-
missioners. No filing fees. (See Form 68.)

31st. Last Day for Filing application for revision of city assess-
ments,

April
oth. Notify Directors of meeting to be held April 14th.
14th. Directors’ Meeting at 4 P. M.

July
oth. Notify Directors of meeting to be held July 14th.
14th. Directors’ Meeting at 4 P. M.

October

4th. City Taxes Payable. Statement of amount may be obtained
from Assessors’ office.

8th. Notify Directors of meetings to be held October 13th.
13th. Directors’ Meeting at 4 P. M.

16th. City Taxes, If not paid by November Ist, interest must be
paid at the rate of 7% per annum, computed from the
first Monday in October. (See Ch. XV, “Local Taxa-
tion.”)

November

1st. Comptroller's Report. Must be sent in on or before No-
vember 15th. Blanks furnished by and report made to
State Comptroller. No filing fees. Penalty may be in-
curred by failure to make this report. (See § 175, “Re-
port to State Comptroller;” also Form 65.)
342 NEW YORK CORPORATIONS.

Corporate Calendar (continued).
December.

22nd. Notify Stockholders of annual meeting to be held January
II, 1910. (See § ror (b), “Notice of Annual Meeting.”)

Close Transfer Books for annual meeting of January II,
1910. (See § 105, “Closing Stock Books.”)
28th. Publication Notice of Annual Meeting. Notice of meeting
to be held January 11, 1910, must be published in a news-
paper of New York County once each week for two suc-

cessive weeks immediately preceding the annual meet-
ing. (See § 1o1 (b), “Notice of Annual Meeting.’’)

Table No. 6.

Comparative Section References.

BUSINESS CORPORATIONS LAW.

Laws of 1909, Chapter 12, constituting Chapter 4 of the Con-
solidated Laws.

Numbers of same or Numbers of same or

Present equivalent sections Present equivalent sections
Section prior to adoption of Soction prior to adoption of
Numbers, Consolidated Laws, Numbers, Consolidated Laws.
Art. 1, Art. 2 (Cont'd).
Saint iowa § 1 Bes uhstaneeaes 89
ah Seca ge 86 10
Art. 2, . TOs bees e Seeks II
§ 2 part........ § 2 part Ticwsgtewedos 12
(See G. C. L., § 10) Dooce eech 13
Bere e eee eee ee 3 i 14
Genrer eeeeeeeee 4 DA ie tea Baie ated Waa 15
ee ee 5 UGaw ckaeeaeas 16
Gcekuvheewens 6 Wegcne xe esate 17
Teh eBing ings Se 8
TABLES. 343

Table No. 7.

Comparative Section References.

GENERAL CORPORATION LAW.

Laws of 1909, Chapter 28, constituting Chapter 23 of the Con-
solidated Laws.

Except where otherwise noted, section numbers given in
the second column of the following table are of the General
Corporation Law as it existed prior to adoption of the Con-
solidated Laws. Section references preceded by “C.’’ are to
Code of Civil Procedure. Section references to the General
Corporation Law when brought in out of numerical order—
whether in the first or second column—are enclosed in paren-
theses and will be found entered again in their proper numer-
ical position.

References to the Code of Civil Procedure and to Session
Laws are those supplied by the Board of Statutory Consolida-
tion. References for Articles 8 and 11 of the General Cor-
poration Law are omitted from the table but will be found as
section notes in text of the law in Part IV of the present
volume.

Numbers of same or Numbers of same or

Present equivalent sections Present equivalent sections

Section prior to adoption of Section prior to adoption of

Numbers, Consolidated Laws. Numbers, Consolidated Laws.

Art. I, Art, 2 (Contd).

Slr acne § 1 § OP ccnaace nate § 9
Dis tear sea ela lees 2 part lOnscc dee aes ox Io
Bec eee eee eee 3 ED ssiets eens. sae II
Art. 2, TD ay sigs age oh wl ae vaie I2
GS esate raed § 4 i 13
Des alonee custaees 5 TAs edasesins 14

OF oan wees 6 Lehre weenie 15 part
Teen ieee nes 7 Pyar ooeiis gee 16

Bot Fee Re ale 8 C., 432 part

* Material from Session Laws or Revised Statutesis incorporated. For source of same
see section foot notes in text of General Corporation Law, Part IV, of the present volume.
344 NEW YORK CORPORATIONS.

General Corporation Law (continued).

Numbers of same or

Present equivalent sections
Section rior to adoption of
Numbers, solidated Laws.
Art, 2 (Cont'd).
8 D7 F igen iaSetiehs
IO") css uae ava
19" Sige weoeees
BOerd xa aoa anite 8 § 17
21s. Meee 18
D2 55 cise ae ES 19
23 Wee tee ates 20 part
DAL ties leochanecantuna 20 part
Qos acu aes 20 part
205 oe rea ghee 21
BF in Utne eie cstets 22
2D i iaiaiecs eal aie sates 23
10 ee eee 24
20g tes ew aeawen 25
Bed Steed bas 26
Ce ee 27
BBs hia Eilean 28
Cy 29
BGs Gaainaehavaniey 30
B Oscar Senitadats & 31
B75 Cee Sainte 32 part
38.. 32 part
BO sigs tae Deas 32 part
AO saison aeiatoines au 32 part
ABT wosia ew cera iene 32 part
(321) aeneaiee w 33
(B20) wey sericea 34
(Omitted) ....... 35
C550) 5 ov elea es 36 part
2. caecies auax 38
48 aia eee ses 39
(320) 2 vesewaiee Sue 40
BAN tance Meee a 41
Art. 3,
§ 60....... C., § 2411

Numbers of same or

Present equivalent sections
Section prior to adoption of
Numbers. Consolidated Laws,

Art. 3 (Contd).
§ 61.......C, § 2412 part

O2wa sa gus C., 2413 part
63.......C., 2414 part
Ode guns 2 C., 2415
rere C., 2416
Ari. 4,
C7 Oeatueeae C., § 3390 part
Wi iwswusew Cy. S3QT
OD ces dese C., 3392
C., 3393 part
Wve wees C., 3393 part
These C., 3304
Fei oe uC, 33905
Bio da xe C.,. 3396
Art. 5,
S60" sn eur Cy & EZ
Ol seat an C., 1782
O2 sigan te C., 1783
Art. 6,

§ 100......C., § 1784
Tor......1C., 1785

I02...... C., 1786
103.......C., 1787
104......C., 1788 part
105......C., 1789
106...... C., 1788 part
107* i

108*.

109...... C., 1790
110......C., 1791

PTC ekgias C., 1792
TI2.c0. ss C., 1793
TI3ssea<s C., 1794

* Material from Session Laws or Revised Statutes is incorporated. For source of same
see section foot notes in text of General Corporation Law, Part IV, of the present volume.
TABLES. 345

General Corporation Law (continued).

Numbers of same or Numbers of same or
a ra, el ee
Numbers. Consolidated Laws. Numbers, Consolidated laws,
Art. 6 (Cont'd). Art. 9 (Cont'd).
B Dias ees C., § 1795 § 1026 45% C., § 2429 part
I15...... C., 1796 13: esses C., 2430
Art. 7, 194.....- C., 2429 part
§ 130......C., § 1797 195..25..C., 2431 part
13 FevsraGes C., 1798 Art. 10,
i C., 1799 § 220.245. GC, Ix, § 6
133.000 65 (C., 1800 221...5.C.L, 57
LSA enwakog TSOL
cee C., 1802 Art. 12, C. 838
T3Oe so teesas C., 1803 part § 300...... -» § 1804
B0Taa a wes C., 1805
Art. 9, BOR nice C., 1806
§ 170. .20:, § 2476 303...... C., 1807
4 C., 2420 part 304....-. C., 1808
172...-.. C., 2420 part BOn gaat C., 1809 part
173......C., 2420 part 306. 0.10, I8I6
174:-+++- C., 2421 RO Fod waas Ce TBE
T75++ +++ C., 2422 BOS. ca es C., 1812 part
176...... C., 2423 part B00 ess: C., 1813 part
LIZZ: <ssinwy BAZ patt 310%...
CIS <j C., 2423 part 311%...
17 Gob 843 C., 2424 part 312*.....
TSO... 6 5 <s Sy 2425 313%.....
TAL see C., 2423 part SIAR uss
182.2 kaw C., 2423 part 3IS*.....
183%... Bet
184.......C., 2423 part
re C., 2426 part Art. 13,
186......C., 2426 part § 320........ § (40)
TOF sdte's C., 2426 part ae heey a: (33)
188...... C., 2427 part Art. 14,
Tins die C., 2427 part SSA wackeay § (34)
POOscewes C., 2428 BOT 5 ie a Be (36 past)
I9I......C., 2429 part 332 (new)

* Material from Session Laws or Revised Statutes is incorporated. For source of same
see section foot notes in text of General Corporation Law, Part IV, of the present volume.
346 NEW YORK CORPORATIONS.

Table No. 8.

Comparative Section References.

STOCK CORPORATION LAW.

Laws of 1909, Chapter 61, constituting Chapter 59 of the Con-
solidated Laws.

Except where otherwise noted, section numbers given in
the second column of the following table are of the Stock Cor-
poration Law as it existed prior to the adoption of the Con-
solidated Laws. Section references when brought in out of
numerical order—whether in the first or second column—are
enclosed in parentheses and will be found entered again in their
proper numerical position.

Present Tiavleay sored Present untied
ramen, Voce Lars. bs Tonite Inve
Art. I, Art. 3,
§ Leet es § I part § Be 25 phe § 20
Art. 2, 2Oisss sca 23 21
Scots § 1 part ee 22
ee 2 25ieveee. 22
Peale aia (8) 20 vein es 25
Borsdaeue (40 last part) (si) 26
2 Apia BOs sexieu 27
DY aay 05 aba ee
I2eceeas 6 See tees 7,
13 cers (59) 33°: (53)
14 7 BA irae be 30
(CF) 8 eens 8 Bia ilaln 31
Te ees (58) (18) 32
TOG tacos (33 Ist part) (16) be. 33
V7 ocuges (33 2nd part) (17)

18...... (32) (Repealed) 34
TABLES.

Stock Corporation Law (continued),

Numbers of same or

Present uivalent sections

347

Numbers of same or

Present equivalent sections

Section prior to adoption of Section prior to adoption of
Numbers. Consolidated Laws, Numbers, Consolidated Laws,
Art. 4, Art, 4 (Cont'd).
P 6Osawe es § (40 Ist part) et Sice § 50
Oieeca anes (26) OS suis 51
Ec kwwys (40 2nd part) OG is siscaia's 52
(50) BOs exis ee (60)
(52) pe 40 (33)--+-- 53
(8) (56)
Saat 41 (57) 7... 54
(55). 42 (58)
G4 ca kena 43 (59)....- 55
Tie aa wae (42) (65)..... 56
BO saws (54 Ist part) (Omitted) 57
Be gay (54 2nd part) (See G. C. L., § 221)
BO sawieat (54 3rd part) (15)..... 58
50 eas een (55) (13)...-. 59
60 (62) (70)..... 60
Olisee se (47) (Omitted) 61
62...... 44 (See G. C. L., § 220)
63 ain erence _ (60)..... 62
AUR nica 4
68. exes (56) Art. 5,
(61) 47 § 80 (new)
O6K-e.o40% 48 81 (new)
348 NEW YORK CORPORATIONS.

Table No. g.

Comparative Section References.

TAX LAW.

Laws of 1909, Chapter 62, constituting Chapter 60 of the Con-
solidated Laws.

The following table presents only those sections of the
Tax Law which are given in whole or in part in the text of the
present volume. (See Part IV.)

Numbers of same or Numbers of same or
Present equivalent sections Present equivalent sections
Section prior to adoption of Seotion prior to adoption of
Numbers. Consolidated Laws, Numbers, Consolidated Laws,
Art. I, Art. 9 (Cont'd).
ei ae has § 2 Bie seer cere § 193
Mie tora tae ea ie a 4 197.. 194
Olas Shy chieed Se welts 7 LOG cc neeweiies 195
Diese a hes II TOG sa srwuese we 196
Te sea ees 12 200... .- 2 eee at
DOM ieee catacennces I
Art. 2, BOP wchavwoes ic
SOF iii et Dae RG § 27 203... esse ee ee 200
28 .S sank eae aes 28 te a eau ke tee 202
Pc 31 BOW ae cettig eas 282 part
Art. 9, Art. 12,
Bice perre rere re: § 180 S270 evsaue bes $915
Sb sateeuses 0... 181 LL ee ee 316
TS2 vec h dealers 182 QU Qs iii ede 317
Cees saan nn oe 183 27 Bviatdi noles telat 318
IS4e. eee ee BON NS 184 BM Hie 3s 319
TED cakcaeenaw ees 186 27 in kad eee 320
Dz uunr vacua ves: 189 276 321
103 ignore ayn et 190 DTG hate test aheligc 322
IQA es ciehare ay i Ig! 2733 0.5 has Bs 323
TABLES. 349

Table No. ro.

Comparative Section References.

CODE OF CIVIL PROCEDURE.

 

The following table includes only those sections of the
Code of Civil Procedure which, on the adoption of the Con-
solidated Laws, were incorporated in whole or in part in*the

General Corporation Law. ne
Where found Where found
Code in General Code of in General
Sections. Corporation Law. Sections, Corporation Law.
5 492 partion: <. § 16part & T6OS sada naes S BOT
716 part..... 243 1806. Scghsiniee 302
eget go part TOR cen ences 303
1782.....+.-- gI POOSs cautsans 304
1783. .+.+0+5- 92 1809 part..... 305
1784.-.--++- sabe POIOy 2 uueexes 306
1785. .-.++00- 101 POT ies ewan a 307
1786.4 seis eau 102 1812 part..... 308
V7O7 oie ga sas 103 1813 part..... 309
1788........ { Taare BATT. 6 ois loats ot 60
106 part - Ba
BO bi sea 105 ee ee!
1799 2413 part..... 62
£7004 ako e ney 109
2At4part..... 63
C70 peskeeean 110
Acca ces rer BATS 2ecevaae OF
1792.. 6
POG nova ne oe 112 2416.01... 5
1794-0 eevee ee HZ. BAIO wsisbina Fats 170
B75 fess cs state 114 171
TOG ccw ss ease 115 2420..-+-+-- 172
POF chau vaKs 130 173
L7OGs cswe weve 131 2421....+.0-- 174
TW7OG se bas ee 132 2422....---- 175
1800.......-- 133 176
T8OL swe ieee 134 178
1802 sacra sex 135 PAS van one oe 181
1803.....-45- 136 182
350 NEW YORK CORPORATIONS.

Code of Civil Procedure (continued).

Where found Where found

Sootions, arson lew. sontons § Corporation La.
8 BABA nuances § 179 { 177

2ABG ieie bance 180 Beastie 195

185 2A8T Asia eaes | 277
2426........ \ 186 2421 Dees deze 268

a 3300 .e.wee ees 70

I BROW ga aioe Ce 71
mel Nees { 189 BAe ou ia ne as 72 part
2428 vc cceeas 190 3393 part..... 72 part

IQ! 3393 part..... 73
BAZ d3 dw adres 192 3204 cae Gacmens 74

194 BIOS ssceisosin iat 75
BABOe wise sca stee 193 320026 eee 76

Table No. 11.

Comparative Section References.

PENAL LAW.

Laws of 1909, Chapter 88, constituting Chapter 40 of the Con-
solidated Laws.
The following table presents only those sections of the
Penal Law which are given in whole or in part in the text of
the present volume. (See Part IV.)

Numbers of same or Numbers of same or
Present equivalent sections Present equivalent sections
Section tem to adoption of Section ea to adoption of
Numbers, onsolidated Laws, Numbers, nsolidated Laws,
© 66050 vexses & 590 S007: Lawwaea: § 614
661 | 592 668 613
662 591 759 4if
663 593 882 519
594 890. 518
664 { 610 1272. 384i
665 611 1932. 13 part
PART IV.—STATUTES.

BUSINESS CORPORATIONS LAW.

Laws of 1909, Chapter 12, constituting Chapter 4 of the Consolidated
Laws.

ArRticLE I. Short title (§ 1).
2. General provisions (§§ 2-16).
3. Laws repealed; when to take effect (§§ 25, 26).

ARTICLE 1.
SHORT TITLE,

Section 1. Short title.
§ x. Short title. This chapter shall be known as the “Business

Corporations Law.”
* [As amended by L,. 1895, Ch. 671, § 1.]

ARTICLE 2.
GENERAL PROVISIONS.

Section 2. Incorporation.

3. Restrictions upon commencement of business.

4. Reorganization of existing corporations.

5. Payment of capital stock.

6. Full liability corporations.

7. Consolidation of corporations.

8. Submission of consolidation agreement to stockholders.

9. Powers of consolidated corporations.

o. Transfer of property of old corporations to consolidated

corporations.

uz. Rights of creditors of old corporations.

12. District steam corporations.

13. Examination of meters by agent of district steam corpora-
tions.

14. Entry by agent of district steam corporation to cut off
steam.

15. Water companies.

16. Improvement corporations; right of condemnation.

* Notes at end of sections are those supplied by the Board of Statutory Consolidation.
351

To.
352 NEW YORK CORPORATIONS.

§ 2. Incorporation, Except as provided in section two-a of this
chapter, three or more persons may become a stock corporation for any
lawful business purpose or purposes other than a moneyed corporation,
or a corporation provided for by the banking, the insurance, the railroad
and the transportation corporations laws, or an educational institution
or corporation which may be incorporated as ‘provided in the educa-
tional law, by making, signing, acknowledging and filing a certificate
which shall contain:

‘LAs amended by L,. 1909, Ch. 484.]

1. The name of the proposed corporation.

2. The purpose or purposes for which it is to be formed.

3. The amount of the capital stock, and if any portion be pre-
ferred stock, the preferences thereof.

4. The number of shares of which the capital stock shall consist,
each of which shall not be less than five nor more than one hundred
dollars, and the amount of capital not less than five hundred dollars,
with which said corporation will begin business.

5. The city, village or town in which its principal business office is
to be located. If it is to be located in the city of New York, the
borough therein in which it is to be located.

6. Its duration.

7. The number of its directors, not less than three,

8. The names and post-office addresses of the directors for the
first year.

9. The names and post-office addresses of the subscribers to the
certificate, and a statement of the number of shares of stock which
each agrees to take in the corporation.

Any certificate of incorporation filed, prior to April twenty-second,
eighteen hundred and ninety-six, under the provisions of the business
corporations law theretofore in force which shall contain the names and
post-office addresses, either of the subscribers to the stock or of the
subscribers to the certificate, and a statement of the number of shares
of stock which each agrees to take in the corporation, shall be deemed
to have complied with the requirements of section two, subdivision
nine of said law.

If meetings of the board of directors are to be held only within
the state the certificate or lsy-laws must so provide..

[As amended by L. 10904, Ch. 446, § 1; L. 1907, Ch. 646, § 1. L,.
1896, Ch. 360, § 2, incorporated.]

§ 2-a. Incorporating for the purpose of conducting law business,
et cetera, prohibited. No corporation shall be organized or created
under the provisions of this chapter for the purpose or purposes of
conducting any branch of the practice of law or of retaining or em-
ploying an attorney or attorneys to furnish legal advice, draw legal
papers or performelegal services of any kind or description, either
directly for the person, persons or corporation for whose use such
services are rendered, or for the corporation retaining such attorney
in compliance with any contract of employment of the corporation or
of the attorney made by the corporation with any other person, persons
or corporation. The statement of the purpose or purposes of a cor-
poration, in any certificate filed under the provisions of this chapter, in
whatsoever language the same may be set forth, shall not be held or
construed to confer on the corporation the power to transact any busi-
ness specified in this section as a purpose for which the creation of a
corporation under this chapter is prohibited; and particularly when the
BUSINESS CORPORATIONS LAW. 353

stated objects of a corporation include the collection of debts or ac-

counts, in words or substance, they shall not be construed to include

the employment or furnishing of attorneys to prosecute any action or

pursue any legal or equitable remedy in aid of such collections.
[Added by L. 1909, Ch. 484.]

§ 3. Restrictions upon commencement of business. No such cor-
poration shall incur any debts until the amount of capital specified in
its certificate of incorporation, as the amount of capital with which it
will begin business, shall have been paid in in money or property.

[As amended by L,. 1892, Ch. 691, § 3; L. 1895, Ch. 671, § 1.]

§ 4. Reorganization of existing corporations. Any stock corpora-
tion heretofore organized, except a moneyed or transportation corpora-
tion, or a corporation the business of which partakes of the nature
of banking or insurance, may reincorporate under this chapter in
the following manner: The directors of the corporation shall call
a mecting of the stockholders thereof by publishing a notice, stating
the time, place and object of the meeting, signed by at least a majority
of them, in a newspaper of the county in which its principal business
office is situated, once a week, for at least three successive weeks, and
by serving upon each stockholder, at least three weeks before the
meeting, a copy of such notice either personally or by depositing it in
the post-office, postage prepaid, addressed to him at his last known
post-office address. The stockholders shall meet at the time and place
specified in the notice and organize by choosing one of the directors
chairman, and a suitable secretary, and shall then take a vote of those
present in person or by proxy upon the proposition to reincorporate
under this chapter, and if votes representing a majority of all the stock
of the corporation shall be cast in favor of the proposition, the officers
of the meeting shall execute and acknowledge a certificate of the
proceedings, which certificate shall also contain the statements
required by section two of this chapter, and shall be filed in the offices
where certificates of incorporation under this chapter are required to
be filed. From the time of such filing such corporation shall be deemed
te be a corporation organized under this chapter, and if originally
organized or incorporated under a general law of this state, it shall
have and exercise all such rights and franchises as it has heretofore
had and exercised under the laws pursuant to which it was originally
incorporated, and such reorganization shall not in any way affect,
change or diminish the existing liabilities of the corporation.

[As amended by L, 1895, Ch. 671, § 1.]

§ 5. Payment of capital stock. One-half of the capital stock of
every such corporation shall be paid in within one year from its
incorporation, or the corporation shall be dissolved, and the directors
within thirty days after such payment shall make a certificate of the
fact of such payment, which shall be signed and acknowledged by a
majority of the directors, and verified by the president or vice-president
and secretary or treasurer, and filed in the offices where the certificates
of incorporation are filed. The dissolution of any such corporation
for any cause shall not take away or impair any remedy against it, its
stockholders or officers, for any liabilities incurred previous to its
dissolution.

[As amended by L,. 1892, Ch. 601, § 5.]
354 NEW YORK CORPORATIONS.

§ 6. Full liability corporations. Every corporation formed under
this chapter may be or become a full liability corporation by inserting
a statement in the certificate of incorporation, that the corporation
thereby formed is intended to be a full liability corporation; and in
case of an existing corporation, which is not a full liability corpora-
tion, it may become such by filing in the offices where certificates of
incorporation are required to be filed, a supplemental certificate
stating that thereafter the corporation intends to be a full liability
corporation, which certificate shall be executed and acknowledged by
the president and treasurer of the corporation or by the board of
directors, and shall have annexed thereto a copy of a resolution,
adopted by a two-thirds vote of the board of directors, and the written
consent of all the stockholders of the corporation, authorizing and
consenting to the change of the corporation to a full liability corpora-
tion. If the corporation is formed as or becomes a full liability
corporation all the stockholders of the corporation shall be severally
individually liable to its creditors for all its debts and liabilities, and
may be joined as defendants in any action against it. No execution
shall issue against any stockholder individually until execution has
been issued against the corporation and returned unsatisfied, and all
the stockholders shall contribute a proportionate share, according to
the number of shares of stock owned by each, of the amount paid by
any stockholder on a judgment recovered against him individually for
a debt of the corporation, and he may recover from the other stock-
holders in the corporation in a joint or several action the proper
portion due by them and each of them, of the amount paid by him on
any such judgment.

[As amended by L,. 1892, Ch. 601, § 6.]

§ 7. Consolidation of corporations. Any two or more corpora-
tions organized under the laws of this state for the purpose of carrying
on any kind of business of the same or of a similar nature, which a
corporation organized under this chapter might carry on, may consoli-
date such corporations into a single corporation, as follows: The
respective corporations may enter into and make an agreement signed
by a majority of their respective boards of directors and under their
respective corporate seals, for the consolidation of such corporations,
prescribing the terms and conditions thereof, the mode of carrying
the same into effect, the name of the new corporation, the number
of directors who shall manage its affairs, not less than three, the
names and post-office addresses of the directors for the first year, the
term of its existence, not exceeding fifty years, the name of the town
or towns, county or counties, in which its operations are to be carried
on, the name of the town or city and county in this state in which
its principal place @f business is to be situated, the amount of its
capital stock, which shall net be larger in amount than the fair
aggregate value of the property, franchises and rights of such corpora-
tions, and the number of shares into which the same is to be divided,
the manner of distributing such capital stock among the holders
thereof, and if such corporations, or either of them, shall have been
organized for the purpose of carrying on any part of its business in
any place out of this state, the agreement shall so state, with such
other particulars as they may deem necessary.

[As amended by L. 1901, Ch. 520, § 2.]
BUSINESS CORPORATIONS LAW. 355

§ 8. Submission of consolidation agreement to stockholders. Such
agreement shall be submitted to the stockholders of each of such
corporations, at a meeting thereof to be called upon notice of at least
two weeks, specifying the time, place and object thereof, and addressed
to each at his last known post-office address, and deposited in the
post-office, postage prepaid, and published for at least two successive
weeks in one of the newspapers in each of the counties of this state
in which either of such corporations shall have its place of business,
and if such agreement shall be approved at each of such meetings
of the respective stockholders separately, by the vote by ballot of the
stockholders owning at least two-thirds of the stock, the same shall
be the agreement of such corporations, and a sworn copy of the
proceedings of such meetings, made by the secretaries thereof, respect-
ively, and attached thereto, shall be presumptive evidence of the
holding and action of such meetings. Such agreement and verified
copy of proceedings of such meetings shall be made in duplicate, one
of which shall be filed in the office of the secretary of state, and the
other in the office of the clerk of the county where the principal
business office of the new corporation is to be situated in this state,
and thereupon such corporation shall be merged into the new corpora-
tion specified in such agreement, to be known by the corporate name
therein mentioned, and the provisions of such agreement shall be
carried into effect as therein provided. If any stockholder, not voting
in favor of such agreement to consolidate, shall at such meeting, or
within twenty days thereafter, object to such consolidation and demand
payment for his stock, such stockholder or such new corporation, if
the consolidation takes effect at any time thereafter, may at any time
within sixty days after such meeting apply to the supreme court at
any special term thereof held in the district in which any county ts
situated in which such new corporation may have its place of business,
upon at least eight days’ notice to the new corporation, for the appoint-
ment of three persons to appraise the value of such stock, and the
court shall appoint three such appraisers and designate the time and
place of their first meeting, with such directions in regard to their
proceedings as shall be deemed proper, and also direct the manner
in which payment for such stock shall be made to such stockholder.
The court may fill any vacancy in the board of appraisers occurring
by refusal or neglect to serve or otherwise. The appraisers shall meet
at the time and place designated, and they or any two of them, after
being duly sworn honestly and faithfully to discharge their duties,
shall estimate and certify the value of such stock at the time of such
dissent, and deliver one copy to such new corporation, and another to
such stockholder if demanded; the charges and expenses of the
appraisers shall be paid by the new corporation. When the new
corporation shall have paid the amount of such appraisal, as directed
by the court, such stockholder shall cease to have any interest in such
stock and in the corporate property of such corporation, and such
stock may be held or disposed of by such new corporation. Where
any consolidation has been heretofore or shall be hereafter effected
pursuant to the laws of this state, and the holders of ninety per centum
of the capital stock of each of such corporations have voted in favor
of such agreement to consolidate, if any stockholder not voting in
favor of such consolidation shall fail to exchange his stock for stock
of such new corporation within sixty days after this act shall go into
effect, or, in case of a consolidation hereafter effected, within sixty
356 NEW YORK CORPORATIONS.

days after he shall have become entitled to make such exchange, such
new corporation may, at any time thereafter, upon at least eight days’
notice to such stockholder, to be given personally, within the state, if
possible, and if not, then in such manner as the court shall direct,
apply to the court, as hereinbefore provided, for the appointment of
three persons to appraise the value of such stock at the time of the
expiration of such sixty days. Upon the completion of the appraisal
in the manner hereinbefore provided for, and the payment by such
new corporation of the amount of such appraisal, as directed by the
court, such stockholder shall cease to have any interest in such stock,
and in the corporate property of such corporation, and such stock
may be held or disposed of by such new corporation.
[As amended by L. 1902, Ch. 438, § 1.]

§ 9. Powers of consolidated corporations. Such new corpora-
tion in addition to the general powers of corporations shall enjoy the
rights, franchises and privileges possessed by each of the corporations
so consolidated, subject to the restrictions, liabilities, duties and pro-
visions contained in this chapter so far as the same may be applicable
to the purposes for which it shall have been organized and expressed
in the agreement for consolidation, and may prosecute or carry on
any kind of business which each of the consolidating corporations was
authorized by law to conduct.

[As amended by L,. 1892, Ch. 691, § 10.]

§ 10. Transfer of property of old corporations to consolidated
corporations. Upon the consummation of such act of consolidation,
all the rights, privileges, franchises and interests of each of the
corporations, parties to the same, and all the property, real, personal
and mixed, and all the debts due on whatever account to either of them,
as well as all stock subscriptions and other things in action belonging
to either of them, shall be taken and deemed to be transferred to and
vested in such new corporation, without further act or deed; and all
claims, demands, property and every other interest shall be as effectu-
ally the property of the new corporation as they were of the former
corporations, parties to such agreement and act; and the title to all
real estate, taken by deed or otherwise, under the laws of this state,
vested in either of such corporations, parties to such agreement and
act, shall not be deemed to revert or be in any way impaired by
reason of this chapter, or anything done by virtue thereof, but shall
be vested in the new corporation by virtue of such act of consolida-
tion; and all the rights, privileges, franchises and property of the
corporations, parties to any consolidation heretofore made under this
chapter, shall vest as fully in the new corporation thereby created as
they were vested in the corporations, parties to such consolidations.

[As amended by kL. 1902, Ch. 457, § 1.]

§ 11. Rights of creditors of old corporations. The rights of
creditors of any corporation that shall be so consolidated shall not in
any manner be impaired, nor any liability or obligation for the payment
of any money due or to become due to any person or persons, or any
claim or demand for any cause existing against any such corporation or
against any stockholder thereof be released or impaired by any such
consolidation; but such new corporation shall succeed to and be held
liable to pay and discharge all such debts and liabilities of each of
the corporations consolidated in the same* manner as if such new
BUSINESS CORPORATIONS LAW. 357

corporation had itself incurred the obligation or liability to pay such
debt or damages and the stockholders of the respective corporations
consolidated shall continue, subject to all the liabilities, claims and
demands existing against them as such, at or before the consolidation;
and no action or proceeding then pending before any court or tribunal
in which any corporation that may be so consolidated is a party, or in
which any such stockholder is a party, shall abate or be discontinued
by reason of such ‘consolidation, but may be prosecuted to final judg-
ment, as though no consolidation had been entered into; or such new
corporation may be substituted as a party in place of any corporation
so consolidated, by order of the court in which such action or pro-
ceeding may be pending.
[As amended by L,. 1892, Ch. 691, § 12.]

§ 12. District steam corporations. Any corporation now or here-
after incorporated for the purpose of supplying steam to consumers
from a central station or stations through pipes laid in the public
streets, shall be known as a district steam corporation and upon the
application in writing of the owner or occupant of any building or
premises, within one hundred feet of any street main laid down by
any such corporation, and payment by him of all money due from
him to it, such corporation shall supply steam as may be required for
heating such building or premises, notwithstanding there may be rent
or compensation in arrears for steam supplied, or for meter, pipe or
fittings furnished to a former occupant thereof, unless such owner or
occupant shall have undertaken or agreed with the former occupant
to pay or to exonerate him from the payment of such arrears, and
shall refuse or neglect to pay the same; and if, for the space of twenty
days after such application, and the deposit, if required, of a reasonable
sum to cover the cost of connection and two months’ steam supply,
the corporation shall refuse or neglect to supply steam as required,
it shall forfeit to such applicant the sum of ten dollars and the further
sum of five dollars for every day thereafter during which such refusal
or neglect shall continue; but no such corporation shall be required
to lay a service pipe for the purpose of supplying steam to any appli-
cant where the ground in which such pipe is required to be laid shall
be frozen, or otherwise present serious obstacles to laying the same,
nor unless the applicant, if required, shall deposit in advance with
the corporation a sum of money sufficient to pay for two months’
steam supply and the cost of the necessary connections and of the
erection of a meter and such other special apparatus as are required
for use in connection with such steam supply, nor unless the applicant
shall provide the space and right of way necessary for the erection,
maintenance and use of such connections and apparatus, and signify
his assent in writing to the reasonable regulations of the corporation
with reference to the supply of steam to consumers.

[As amended by L,. 1892, Ch. 601, § 13.]

§ 13. Examination of meters by agent of district steam corpora-
tions. Any such corporation may make an agreement with any of its
customers, by which any of its officers or agents shall be authorized
at all reasonable times to enter any dwelling, store, building, room or
place, supplied with steam by such corporation and occupied by such
customer, for the purpose of inspecting and examining the meters,
devices, pipes, fittings and appliances for supplying or regulating the
supply of steam, and for ascertaining the quantity of steam consumed,
358 NEW YORK CORPORATIONS.

or the quantity of water resulting from the condensation of steam
consumed. Every such agreement shall further provide that such
officer or agent shall exhibit his written authority if requested by the
occupant of such dwelling, store, building, room or place. Any person
who shall directly or indirectly prevent or hinder such officer or agent
from entering such dwelling, store, building, room or place, or from
making such inspection or examination, in violation of such agreement,
shall forfeit to the corporation the sum of twenty-five dollars for each
offense. Yee he
[As amended by L,. 1892, Ch. 691, § 14.]

§ 14. Entry by agent of district steam corporation to cut off
steam. If any person or persons, corporation or association supplied
with steam by any such corporation, shall neglect or refuse to pay the
rent or remuneration for such steam, or for the meter, device, pipes,
fittings or appliances, let by such corporation for supplying steam, or
for ascertaining the quantity of steam consumed, or the quantity of
water resulting from the condensation of the steam consumed, agreed

“upon or due for the same, as required by his, their or its contract
with such corporation, the latter may thereupon stop and prevent the
steam from entering the premises of such person, persons, corporation
or association, so neglecting or refusing to pay such rent or remunera-
tion, and may also in any case, in which a person is liable to pay a
forfeiture, or to a fine or imprisonment, by reason of any act to or
towards such corporation or its property for which such forfeiture,
fine or penalty is imposed by law, stop and prevent the steam from
entering the premises of the person so liable, or if such person be
an officer or agent of any corporation or association, stop and prevent
the steam from entering the premises of such corporation or associa-
tion. In all cases in which such corporation is authorized to stop and
prevent the steam from entering any premises, it may, by its officers,
agents or workmen, enter into or on such premises between the hours
of eight o’clock in the forenoon and six o’clock in the afternoon and
cut off, disconnect, separate and carry away any meter, device, pipe,
fitting or other property of the corporation; and may cut off, disconnect
and separate any meter, device, pipe or fitting, whether the property
of the corporation or not, from the mains or pipes of such corporation.

[As amended by L. 1892, Ch. 691, § 15.]

§ 15. Water companies.. No corporation shall be formed under
this chapter for the purpose of accumulating, storing, conducting, fur-
nishing or supplying water for domestic manufacturing or municipal
purposes in the city of New York.

Any corporation formed for the purpose of supplying any other
city of the state wilh water, if unable to agree with the owners of any
real property required for the purpose of the corporation for the
purchase thereof may acquire title thereto by condemnation.

[Added by L. 1892, Ch. 691, § 16.]

§ 16. Improvement corporations; right of condemnation. Any
corporation formed for the purpose of developing or improving real
property, which lays out for public use roads, streets, avenues or high-
ways, upon or through its lands, if unable to agree with the owners
of any real property required for the purpose of extending, continuing
or connecting such roads, streets, avenues or highways, for the pur-
chase thereof, may acquire title thereto by condemnation in the manner
BUSINESS CORPORATIONS LAW. 359

prescribed by law; provided such corporation has the consents of
the owners of not less than one-half of all of the land which adjoins
or abuts upon, or which will adjoin or abut upon, such roads, streets,
avenues or highways, or their extensions, continuations or connections,
when completed; and such corporation may lay out and establish such
roads, streets, avenues or highways, and the extensions, continuations
or connections thereof, and may construct drains or sewers, and such
bridges or culverts as may be necessary to maintain the grades of, or
for the extension, continuation or connection of, the roads, streets,
avenues or highways, so laid out; and may connect such roads, streets,
avenues or highways, with or across roads, streets, avenues or high-
ways, belonging to any other corporation or person, but may not dis-
turb the established grades thereof. All lands so taken by condemnation
shall be deemed to be acquired for a public use.
[Added by L. 1900, Ch. 518, § 1.]

ARTICLE 3. ‘
LAWS REPEALED; WHEN TO TAKE EFFECT.
SEction 25. Laws repealed.
26. When to take effect.

§ 25. Laws repealed. Of the laws enumerated in the schedule
hereto annexed, that portion specified in the last column is hereby
repealed.

§ 26. When to take effect. This chapter shall take effect imme-
diately.

SCHEDULE OF LAWS REPEALED.

Laws of Chapter Section Laws of Chapter Section
T868.......... TOT veparew's oats All 1806.......... 360, 460...... All
TSH sins ccadiies S20). } cise dacane All 1I900.......... 51S: nieces All
1876 see seen 363 cc tceangeina AIL > 2OObas Saciee <2 B20. wasie cc's All
T887iees eyes BOL semes esi ae All 1902.......... 438, 457....-- All
1890........4. SOF ee aaabiatecs aa AL” O03 22. < ss eieceteens S25 isonet kak All
TEO2 wiseiea awe COT cides haere All 109004.......... AAO 5 5 ois sce sic All
GENERAL CORPORATION LAW.

Laws of 1909, Chapter 28, constituting Chapter 23 of the Consolidated
Laws.

ARTICLE 1. Short title; classification; definitions (§§ 1-3).

2. General provisions ($§ 4-44).

3. Change of name (§§ 60-65).

4. Sale of corporate real property (§§ 70-76).

5. Judicial supervision of corporation and of the officers and

members thereof (§§ 90-92).

*Srction 6. Action for sequestration, action for dissolution and action
to enforce individual liability of officers and members of
corporation (§§ I00-115).

Action to annul corporation (§§ 130-136).

Action to dissolve moneyed corporation (§§ 150-161).

9. Proceedings for voluntary dissolution of corporation
(§§ 170-195).

10. Dissolution of stock corporation without judicial pro-
ceedings (§§ 220, 221).

11. Powers, duties and liabilities of receivers of corporation
(§§ 230-278).

12. Provisions applicable to two or more of the foregoing
proceedings or actions (§§ 300-316).

13. Alteration and repeal of charter of corporation (§§ 320-
321). ,

14. ce ee construction; when to take effect (§§ 330-
332).

won

ARTICLE 1.
SHORT TITEE; CLASSIFICATION; DEFINITIONS,

Section 1. Short title.
2. Classification of corporations.
3. Definitions.

§ 1. Short title. This chapter shall be known as the “General
Corporation Law.”
t[Amended by L. 1892, Ch. 687.]

* So in original.
+ Notes at end of sections are those supplied by the Board of Statutory Consolidation.

360
GENERAL CORPORATION LAW. 361

§ 2. Classification of corporations. A corporation shall be either,
1. A municipal corporation,
2. A stock corporation, or
3. A non-stock corporation.

A stock corporation shall be either,
1. A moneyed corporation,
2. A railroad or other transportation corporation, or
3. A business corporation.

A non-stock corporation shall be either,
1. A religious corporation,
2. A membership corporation, or
3. Any corporation other than a stock corporation.

A reference in a general law to a class of corporations described
in accordance with this classification shall include all corporations
theretofore formed belonging to such class.

[Added by L. 1892, Ch. 687.]

§ 3. Definitions. 1. A “municipal corporation” includes a county,
town, school district, village and city and any other territorial division
of the state established by law with powers of local government.

2. A “stock corporation” is a corporation having a capital stock
divided into shares, and which is authorized by law to distribute to the
holders thereof dividends or shares of the surplus profits of the cor-
poration. A corporation is not a stock corporation because of having
issued certificates called certificates of stock, but which are in fact
merely certificates of membership, and which is not authorized by law
to distribute to its members any dividends or share of profits arising
from the operations of the corporation.

3. The term “non-stock corporation” includes every corporation
other than a stock corporation.

4. A “moneyed corporation” is a corporation formed under or
subject to the banking or the insurance law.

5. A “domestic corporation” is a corporation incorporated by or
under the laws of the state or colony of New York. Every corporation
which is not a domestic corporation is a foreign corporation, except
as provided by the code of civil procedure for the purpose of construing
such code.

6. The term “directors,” when used in relation to corporations,
shall include trustees or other persons, by whatever name known, duly
appointed or designated to manage the affairs of the corporation.

7. The term “certificate of incorporation” shall include articles
of association or any other written instruments required by law to be
filed, to effect the incorporation of a corporation, including a certified
copy of an original certificate of incorporation filed for such purpose
in pursuance of law.

8. The term “member of a corporation” shall include every person
having a right to vote at a meeting of the corporation for the election
of directors, other than a person having a right to vote only upon a

roxy.

c o. The term “office of a corporation” means its principal office
within the state, or principal place of business within the state if it
has no principal office therein.

10. The term “business of a corporation,” when used with refer-
ence to a non-stock corporation, includes the operations for the conduct
of which it is incorporated.
362

NEW YORK CORPORATIONS.

11. The term “corporate law” or “laws,” when used in any law
forming a part of the consolidation of the general laws of the state of
which this chapter is a part, means the general statutes of this state
relating to corporations included in such consolidation.

[As amended by L,. 1892, Ch, 687, and L. 1895, Ch. 672, § 1.]

SECTION

22.
23.
24.

26.
27.
28.
29.
30.
31.

32.
33.
34.
35-
36.
37.

39.

40.
41.

ARTICLE 2.
GENERAL PROVISIONS.

Qualifications of incorporators.

Filing and recording certificates of incorporation.

Corporate names.

Amended and supplemental certificates.

Lost or destroyed certificates.

Certificate and other papers as evidence; evidence of con-
solidation.

Limitation of powers; provisions of certificate.

Grant of general powers.

Enlargement of limitations upon the amount of the prop-
erty of non-stock corporations.

Acquisition of additional real property.

Acquisition of property without the state.

Certificate of authority of a foreign corporation.

Proof to be filed before granting certificate.

Reincorporation of foreign moneyed corporations.

Papers to be filed upon reincorporation.

When reincorporation effective and effect thereof.

Acquisition of real property in this state by certain for-
eign corporations.

Acquisition by foreign corporation of real property in
this state.

Prohibition of banking powers.

Qualification of members as voters.

Cumulative voting.

Voting trust agreements.

Proxies.

Challenges.

Effect of failure to elect directors,

Mode of calling special election of directors.

Mode of conducting special election of directors.

Qualification of voters and canvass of votes at special
election.

Powers of supreme court respecting elections.

Stay of proceedings in actions collusively brought.

Quorum of directors and powers of majority.

Directors as trustees in case of dissolution.

Forfeiture for non-user.

Extension of corporate existence.

Revival of corporate existence.

Approval of certificates of extension or revival; when
required.

Extension when stock is owned by another corporation.

Effect of extension.
GENERAL CORPORATION LAW. 363

Section 42. When notice of lapse of time unnecessary.
43. As to acts of directors.
44. Political contributions prohibited; penalty.

§ 4. Qualifications of incorporators. A certificate of incorporation
must be executed by natural persons, who must be of full age, and at
least two-thirds of them must be citizens of the United States and one
of them a resident of this state. This section shall not apply to a cor-
poration formed by the reincorporation or consolidation of existing
corporations, or to the reorganization of a corporation upon the sale
of the property and franchises of a previously existing corporation or
otherwise.

[Added by L. 1892, Ch. 687, and as amended by L. 1895, Ch.
672, § 1.]

§ 5. Filing and recording certificates of incorporation. 1. Every
certificate of incorporation including the corporate name or title and
every amended or supplemental certificate, and every certificate which
alters the provisions of any certificate of incorporation or any amended
or supplemental certificate hereafter executed, shall be in the English
language, and except as otherwise provided by law, shall be filed in
the office of the secretary of state, and shall be by him duly recorded
and indexed in books specially provided therefor, and a certified copy
of such certificate or amended or supplemental certificate with a certifi-
cate of the secretary of state of such filing and record, or a duplicate
original of such certificate or amended or supplemental certificate shall
be filed and similarly recorded and indexed in the office of the clerk of
the county in which the office of the corporation is to be located, or,
if it be a non-stock corporation, and such county be not determined
upon at the time of executing the certificate of incorporation, in such
county clerk’s office as the judge approving the certificate shall direct.
All taxes required by law to be paid before or upon incorporation and
the fees for filing and recording such certificate must be paid before
filing. No corporation shall exercise any corporate powers or priv-
ileges until such taxes and fees have been paid.

[As amended by L,. 1892, Ch. 687; L. 1895, Ch. 672, 8 1, and L,. 1902,
Ch. 285, § 1.]

2. Whenever under any law now or heretofore in force the cer-
tificate of incorporation of any corporation other than a stock corpora-
tion was or is required to be filed in more than one public office, a
certified copy of such certificate so filed in any one of such public
offices may be filed in such other office with the like effect as if the
original had been duly filed therein, provided, however, that no rights
accrued prior to the filing of such copy shall be impaired or affected
thereby, provided also, that such filing of a copy shall not cause a
duplication or similarity of corporate names in violation of the next
succeeding section.

[L. 1906, Ch. 531, § 1.]

§ 6. Corporate names. 1. No certificate of incorporation of a
proposed corporation having the same name as a corporation author-
ized to do business under the laws of this state, or a name so nearly
resembling it as to be calculated to deceive, shall be filed or recorded
in any office for the purpose of effecting its incorporation, or of author-
izing it to do business in this state. A corporation formed by the
364 NEW YORK CORPORATIONS.

reincorporation, reorganization or consolidation of other corporations
or upon the sale of the property or franchises of a corporation, may
have the same name as the corporation or one of the corporations to
whose franchises it has succeeded. No corporation shall be hereafter
organized under the laws of this state, with the word “trust,” “bank,”
“banking,” “insurance,” “assurance,” “indemnity,” “guarantee,” “guar-
anty,” “title,” “savings,” “investment,” “loan” or “benefit” as part of its
name, except a corporation formed under the banking law or the
insurance law.

[As amended by L,. 1892, Ch. 687; L. 1895, Ch. 672, § 1; L. 1900,
Ch. 704, § 1; L. 1902, Ch. 9, § 1, and L. 1907, Ch. 115, § 1.]

2. No corporation, society or association, whether now existing
or hereafter organized under or by virtue of the laws of this state,
shall ever employ the words “Lucretia Mott” to designate, describe or
name any hospital, infirmary or dispensary, or any part thereof, or
any similar institution.

[L. 1892, Ch. 19, § 4.]

§ 7. Amended and supplemental certificates. If in the original
or amended certificate of incorporation of any corporation, or if in a
supplemental certificate of any corporation any informality exist, or if
any such certificate contain any matter not authorized by law to be
stated therein, or if the proof or acknowledgment thereof shall be
defective, the corporators or directors of the corporation may make
and file an amended certificate correcting such informality or defect
or striking out such unauthorized matter; and the certificate amended
shall be deemed to be amended accordingly as of the date such
amended certificate was filed, and upon the filing of such an amended
certificate of incorporation, the corporation shall then for all purposes
be deemed to be a corporation from the time of filing the original
certificate.

The supreme court may, upon due cause shown, and proof made,
and upon notice to the attorney-general, and to such other persons
as the court may direct, and upon such terms and conditions as it
may impose, amend any certificate of incorporation which fails to
express the true object and purpose of the corporation, so as to truly
set forth such object and purpose.

When an amended or supplemental certificate is filed, an entry
shall be made upon the margin of the index and record of the original
certificate of the date and place of record of every such amended cer-
tificate.

The amendment of a certificate under this section shall be without
prejudice to any pending action or proceeding, or to any rights pre-
viously accrued.

[As amended, by L. 1892, Ch. 687.]

§ 8. Lost or destroyed certificates. If either of the certificates
of incorporation shall be lost or destroyed after filing, a certified copy
of the other certificate may be filed in the place of the one so lost
or destroyed and as of the date of its original filing, and such certified
copy shall have the same force and effect as the original certificate had
when filed.

[As amended by L,. 1892, Ch. 687.]

_§ 9. Certificate and other papers as evidence; evidence of con-
solidation. 1. The certificate of incorporation of any corporation duly
GENERAL CORPORATION LAW. 365

filed shall be presumptive evidence of its incorporation, and any
amended certificate or other paper duly filed or recorded relating to
the incorporation of any corporation or its existence or management,
and containing facts required or authorized by law to be stated therein,
shall be presumptive evidence of the existence of such facts.

[As amended by L,. 1892, Ch. 687, and L. 1895, Ch. 672, § 1.]

2. Whenever, by the laws of any other state or territory, or the
dominion of Canada, a copy of the certificate of organization or incor-
poration or any other certificate, certified or exemplified by any officer
or officers in such state or territory or dominion, is or shall be prima
facie evidence of the due formation, creation, existence, organization
or capacity of any corporation or joint-stock company, created, organ-
ized or located in such state, territory or dominion, or claiming so to
be, such certificate or certificates, duly exemplified, or a duly exempli-
fied copy thereof, shall be received in all actions and proceedings in
this state, in or before all courts and officers, with the same force
and effect in all respects as prima facie evidence as aforesaid, as in such
other state, territory or dominion.

[L. 1877, Ch. 311, § 1.]

3. Where two or more corporations have been or shall hereafter
be consolidated and merged into a new corporation, a certificate of
the secretary of state under his official seal concisely stating the names
of the respective corporations consolidated, the dates of the filing of
the certificates respectively of the incorporation of such corporations
in his office, the object for which they were formed, including the
nature and locality of their business as set forth in their respective
incorporation papers on file in his office, the date of the filing of the
consolidation agreement and other proceedings in his office, the name
of the new corporation formed by such consolidation and merger, the
term of its corporate existence, the place where its principal office is
situated and the amount of its capital stock, shall be presumptive and
prima facie evidence in all actions and special proceedings for all
purposes of the incorporation of the corporations so consolidated, the
incorporation of the new corporation by such consolidation and merger
from the date of filing of said consolidation agreement and proceedings,
and of the other facts so certified by him.

[L. 1899, Ch. 201, § 1.]

§ 10. Limitation of powers; provisions of certificate. 1. No cor-
poration shall possess or exercise any corporate powers not given by
law, or not necessary to the exercise of the powers so given.

2. The certificate of incorporation of any corporation may contain
.any provision for the regulation of the business and the conduct of the
affairs of the corporation, and any limitation upon its powers, or upon
the powers of its directors and stockholders, which does not exempt
them from the performance of any obligation or the performance of
any duty imposed by law.

[As amended by L,. 1892, Ch. 687, and L. 1895, Ch. 672, § 1.]

§ 11. Grant of general powers. Every corporation as such has
power, though not specified in the law under which it is incorporated:

1. To have succession for the period specified in its certificate
of incorporation or by law, and perpetually when no period is specified.

2. To have a common seal, and alter the same at pleasure.
366 NEW YORK CORPORATIONS.

3. To acquire by grant, gift, purchase, devise or bequest, to hold
and to dispose of such property as the purposes of the corporation
shall require, subject to such limitations as may be prescribed by law.

4. To appoint such officers and agents as its business shall re-
quire, and to fix their compensation, and

5. To make by-laws, not inconsistent with any existing law, for
the management of its property, the regulation of its affairs, and the
transfer of its stock, if it has any, and the calling of meetings of its
members. Such by-laws may also fix the amount of stock, which must
be represented at meetings of the stockholders in order to constitute a
quorum, unless otherwise provided by law. By-laws duly adopted at
a meeting of the members of the corporation shall control the action
of its directors. No by-law adopted by the board of directors regu-
lating the election of directors or officers shall be valid unless published
for at least once a week for two successive weeks in a newspaper in
the county where the election is to be held, and at least thirty days
before such election. Subdivisions four and five of this section shall
not apply to municipal corporations.

[As amended by L,. 1892, Ch. 687, and L. 1895, Ch. 672, § 1.]

§ 12. Enlargement of limitations upon the amount of the property
of non-stock corporations. If any general or special law heretofore
passed, or any certificate of incorporation, shall limit the amount of
property a corporation other than a stock corporation may take or
hold, such corporation may take and hold property of the value of
six million dollars or less, or the yearly income derived from which
shall be six hundred thousand dollars or less, notwithstanding any
such limitations. In computing the value of such property, no increase
in value arising otherwise than from improvements made thereon shall
be taken into account.

[As amended by L. 1909, Ch. 276.]

[Added by L,. 1892, Ch. 687, as amended by L. 1894, Ch. 4oo, § 1.]

§ 13. Acquisition of additional real property. When any corpora-
tion, except a life insurance corporation, shall have sold or conveyed
any part of its real property, the supreme court may, notwithstanding
any restriction of a general or special law, authorize it to purchase
and hold from time to time other real property, upon satisfactory
proof that the value of the property so purchased does not exceed the
value of the property so sold and conveyed within the three years
next preceding the application.

[As amended by L. 1892, Ch. 687, and L. 1906, Ch. 228, § 1.]

§ 14. Acquisition of property without the state. Any domestic
corporation transacting business in other states or foreign countries
may acquire an@ dispose of such property as shall be requisite for
such corporation in the convenient transaction of its business. Any
domestic corporation establishing or maintaining a charitable, philan-
thropic or educational institution within this state may also carry on
its work and establish or maintain one or more branches of such insti-
tution or an additional institution or additional institutions in any other
state, the District of Columbia or in any part of the territories or
dependencies of the United States of America or in any foreign coun-
try and for either of said purposes may take by devise or bequest,
hold, purchase, mortgage, sell and convey or otherwise dispose of such
real and personal property without this state as may be requisite there-
GENERAL CORPORATION LAW. 367

for. But nothing in this section contained shall be construed as ex-
empting from taxation property to any additional amount than is now
allowed to such corporation under existing laws.

[As amended by L. 1892, Ch. 687, and L. 1903, Ch. 178, § 1.]

§ 15. Certificate of authority of a foreign corporation. No foreign
stock corporation other than a moneyed corporation, shall do business
in this state without having first procured from the secretary of state a
certificate that it has complied with all the requirements of law to
authorize it to do business in this state, and that the business of the
corporation to be carried on in this state is such as may be lawfully
carried on by a corporation incorporated under the laws of this state
for such or similar business, or if more than one kind of business, by
two or more corporations so incorporated for such kinds of business
respectively. The secretary of state shall deliver such certificate to every
such corporation so complying with the requirements of law. No for-
eign stock corporation doing business in this state shall maintain any
action in this state upon any contract made by it in this state, unless
prior to the making of such contract it shall have procured such certifi-
cate. This prohibition shall also apply to any assignee of such foreign
stock corporation and to any person claiming under such assignee or
such foreign stock corporation or under either of them. No certificate
of authority shall be granted to any foreign corporation having the
same name as an existing domestic corporation, or a name so nearly
resembling it as to be calculated to deceive, nor to any foreign corpora-
tion, other than a moneyed or insurance corporation, with the word
“trust,” “bank,” “banking,” “insurance,” “assurance,” “indemnity,”
“guarantee,” “guaranty,” “savings,” “investment,” “loan” or “benefit,”
as a part of its name.

[Added by L. 1892, Ch. 687, as amended by L. 1901, Ch. 96, § 1, and
Ch. 538, § 1, and L. 1904, Ch. 490, § 1.]

§ 16. Proof to be filed before granting certificate. Before granting
such certificate the secretary of state shall require every such foreign
corporation to file in his office a sworn copy in the English language
of its charter or certificate of incorporation and a statement under its
corporate seal, and the signature of its president, vice-president or
other acting head, particularly setting forth the business or objects of
the corporation which it is engaged in carrying on or which it proposes
to carry on within the state, and a place within the state which is to
be its principal place of business, and designating a person upon whom
process against the corporation may be served within the state. The
person so designated must have an office or place of business at the
place where such corporation is to have its principal place of business
within the state and such designation must specify such office or place
of business of the said person so designated, and if it is within a city
the street and street number if any, or other suitable designation of
the particular locality. Such designation shall be accompanied with
the written consent of the person designated and shall continue in
force until revoked by an instrument in writing designating in like
manner some other person upon whom process against the corpora-
tion may be served in this state or until the filing in the same office
of a written revocation of said consent executed by the person so
designated. If the person so designated dies or removes from the
place where the corporation has its principal place of business within
the state, or files such revocation of his consent, and the corporation
368 NEW YORK CORPORATIONS.

does not within thirty days after such death or removal or revocation
of consent designate in like manner another person upon whom process
against it may be served within the state, the secretary of state may
revoke the authority of the corporation to do business within the state,
and process against the corporation in an action upon any liability
incurred within this state before such revocation, may, after such death
or removal, or revocation of consent, and before another designation
is made, be served upon the secretary of state. At the time of such
service the plaintiff shall pay to the secretary of state two dollars,
to be included in his taxable costs and disbursements, and the secre-
tary of state shall forthwith mail a copy of such notice to such
corporation if its address, or the address of any officer thereof, is
known to him. The secretary of state may require the execution of
any such designation, revocation or consent, to be authenticated as
ue deems proper and he may refuse to file it without such authentica-
ion.

[Added by L. 1892, Ch. 687, as amended by L. 1895, Ch. 672, § I;
Code Civil Procedure, § 432, subd. 2 pt., incorporated. For remainder
of section see Code Civil Procedure, § 432.]

§ 17. Reincorporation of foreign moneyed corporations. Any
moneyed corporation duly organized by or under the laws of any
state of the United States, and having an office or doing business in
this state, may file, if a banking corporation or authorized to make
loans upon pledges or deposits, in the office of the superintendent of
banks, and if an insurance corporation in the office of the superin-
tendent of insurance, the documents described in section eighteen of
this chapter, and such documents shall be recorded as original certifi-
cates of incorporation are required by law to be recorded. The fees
for filing and recording such documents, together with the tax, if any,
required by law to be paid before the incorporation of a domestic
company of the same class, must be paid before filing.

[L.. 1900, Ch. 733, § 1.]

§ 18. Papers to be filed upon reincorporation. The documents to
be filed by any such corporation shall include,

1. A copy of its charter, certificate of incorporation, or other
document constituting it a body corporate, with such amendments, if
any, as are desired by the corporation or are required by the laws
of New York, authenticated as an original certificate of incorporation
1s required to be authenticated;

2. A declaration of its desire to become a corporation of this state
and of its submission to the laws of this state, duly executed by the
authority of the body in which its corporate powers are vested.

3. A certificate of the superintendent of that department in which
these papers are @led that the charter, certificate of incorporation or
other constituent document, with its proposed amendments, if any, as
filed, is in all respects consistent with the laws of this state relating
to domestic corporations of the same class; that the corporation appli-
cant has complied with all conditions imposed by its laws upon domes-
tic corporations of the same class beginning business in this state, with
the exception of any provisions concerning the residence of a majority
of the corporators, trustees, or directors of such corporation; that its
name is not the same with the name of any domestic corporation, nor
likely to be confounded with any such name, and that it has paid all
fees and taxes due from it to the state, including the tax, if any, im-
GENERAL CORPORATION LAW. 369

posed by this state upon the original incorporation of a company of
the same class.

[L. 1900, Ch. 733, § 2.]

§ 19. When reincorporation effected and effect thereof. From the
date of filing these documents the corporation shall become and be a
corporation of this state, and shall be subject to all the laws of this
state applicable to corporations of the same class; but its existence
and powers as such corporation shall terminate if it shall fail at any
time for one month to maintain an office within the state at which an
authorized officer or agent shall be present at all reasonable business
hours, prepared to exhibit the books of the company to the proper
authorities of this state and to receive service of process; or if it shall
fail within two years 1o terminate its corporate existence derived from
any other state, by surrender of its charter or by dissolution.

[L. 1900, Ch. 733, § 3.]

§ 20. Acquisition of real property in this state by certain foreign
corporations. Any foreign corporation created under the laws of the
United States, or of any state or territory thereof, and doing business
in this state, may acquire such real property in this state as may be
necessary for its corporate purposes in the transaction of its business
in this state, and convey the same by deed or otherwise in the same
manner as a domestic corporation.

[As amended by L. 1892, Ch. 687.]

§ 21. Acquisition by foreign corporation of real property in this
state. Any foreign corporation may purchase at a sale upon the fore-
closure of any mortgage held by it, or, upon any judgment or decree
for debts due it, or, upon any settlement to secure such debts, any
real property within this state covered by or subject to such mortgage,
judgment, decree or settlement, and may take by devise any real prop-
erty situated within this state and hold the same for not exceeding
five years from the date of such purchase, or from the time when
the right to the possession thereof vests in such devisee, and convey it
by deed or otherwise in the same manner as a domestic corporation.

[As amended by L,. 1892, Ch. 687, and L. 1894, Ch. 136, § 1.]

§ 22. Prohibition of banking powers. No corporation except a
corporation formed under or subject to the banking laws, shall by
any implication or construction be deemed to possess the power of
carrying on the business of discounting bills, notes or other evidences
of debt, of receiving deposits, or buying and selling bills of exchange,
or shall issue bills, notes or other evidences of debt for circulation
as money.

[As amended by L,. 1892, Ch. 687, and L. 1904, Ch. 236, § 1.]

§ 23. Qualification of members as voters. Unless otherwise pro-
vided in the certificate of incorporation, every stockholder of record of
a stock corporation shall be entitled at every meeting of the corpora-
tion to one vote for every share of stock standing in his name on the
books of the corporation; and at every meeting of a non-stock cor-
poration, every member, unless disqualified by the by-laws, shall be
entitled to one vote. The stockholders of a stock corporation, by a
379 NEW YORK CORPORATIONS.

by-law adopted by a vote at any annual meeting, or at any special
meeting duly called for such purpose, may prescribe a period, not
exceeding forty days prior to meetings of the stockholders, during
which no transfer of stock on the books of the corporation may be
made. Except in cases of express trust, or in which other provision
shall have been made by written agreement between the parties, the
record holder of stock which shall be held by him as security, or
which shall actually belong to another, upon demand therefor and pay-
ment of necessary expenses thereof, shall issue to such pledgor or
to such actual owner of such stock, a proxy to vote thereon. No
member of a corporation shall sell his vote or issue a proxy to vote to
any person for any sum of money or any thing of value. The books
and papers containing the record of membership of the corporation
shall be produced at any meeting of its members upon the request
of any member. If the right to vote at any such meeting shall be
challenged, the inspectors of election, or other persons presiding
thereat, shall require such books, if they can be had, to be produced
as evidence of the right of the person challenged to vote at such
meeting, and all persons who may appear from such books to be mem-
bers of the corporation may vote at such meeting in person or by
proxy, subject to the provisions of this chapter.

5 [Added by L. 1892, Ch. 687, as amended by L. 1901, Ch. 355,
I pt.]

§ 24. Cumulative voting. The certificate of incorporation of any
stock corporation may provide that at all elections of directors of such
corporation, each stockholder shall be entitled to as many votes as
shall equal the number of his shares of stock multiplied by the number
of directors to be elected, and that he may cast all of such votes for a
single director or may distribute them among the number to be voted
for, or any two or more of them as he may see fit, which right, when
exercised, shall be termed cumulative voting. The stockholders of a
corporation heretofore formed, who, by the provisions of laws existing
on April thirtieth, eighteen hundred and ninety-one, were entitled to
the exercise of such right, may hereafter exercise such right according
to the provision of this section.

[Added by L. 1892, Ch. 687, as amended by L. 1901, Ch. 355,

§ r pt.]

§ 25. Voting trust agreements. A stockholder may, by agreement
in writing, transfer his stock to any person or persons for the purpose
of vesting in him or them the right to vote thereon for a time not ex-
ceeding five years upon terms and conditions stated, pursuant to which
such person or persons shall act; every other stockholder, upon his re-
quest therefor, may, by a like agreement in writing, also transfer his
stock to the same person or persons and thereupon may participate in
the terms, conditions and privileges of such agreement; the certificates
of stock so transferred shall be surrendered and canceled and certifi-
cates therefor issued to such transferee or transferees in which it shall
appear that they are issued pursuant to such agreement and in the
entry of such transferee or transferees as owners of such stock in the
proper books of said corporation that fact shall also be noted and
thereupon he or they may vote upon the stock so transferred during
the time in such agreement specified; a duplicate of every such agree-
ment shall be filed in the office of the corporation where its principal
GENERAL CORPORATION LAW. 371

business is transacted and be open to the inspection of any stockholder,
daily, during business hours.

Se by L. 1892, Ch. 687, as amended by L. 1901, Ch. 355,
§ 1 -pt.

§ 26. Proxies. Every member of a corporation, except a religious
corporation, entitled to vote at any meeting thereof may so vote by
proxy.

No officer, clerk, teller or bookkeeper of a corporation formed
under or subject to the banking law shall act as proxy for any stock-
holder at any meeting of any such corporation.

Every proxy must be executed in writing by the member himself,
or by his duly authorized attorney. No proxy hereafter made shall
be valid after the expiration of eleven months from the date of its
execution unless the member executing it shall have specified therein
the length of time it is to continue in force, which shall be for some
limited period. Every proxy shall be revocable at the pleasure of the
person executing it; but a corporation having no capital stock may
prescribe in its by-laws the persons who may act as proxies for mem-
bers, and the iength of time for which proxies may be executed.

[Added by L. 1892, Ch. 687.]

§ 27. Challenges. Every member of a corporation offering to
vote at any election or meeting of the corporation shall, if required
by an inspector of election or other officer presiding at such election
or meeting, or by any other member present, take and subscribe the
following oath: “I do solemnly swear that in voting at this election
I have not, either directly, indirectly or impliedly received any prom-
ise or any sum of money or any thing of value to influence the giving
of my vote or votes at this meeting or as a consideration therefor.”
Any person offering to vote as proxy for any other person shall pre-
sent his proxy and, if so required, take and subscribe the following
oath: “I do solemnly swear that I have not, either directly, indirectly
or impliedly, given any promise or any sum of money or any thing
of value to induce the giving of a proxy to me to vote at this election,
or received any promise or any sum of money. or any thing of value
to influence the giving of my vote at this meeting, or as a considera-
tion therefor.” The inspectors or persons presiding at the election
may administer such oath, and all such oaths and proxies shall be filed
in the office of the corporation.

[Added by L,. 1892, Ch. 687, as amended by L. 1895, Ch. 672, § 1,
and L. 1901, Ch. 355, § 1.]

§ 28. Effect of failure to elect directors. If the directors shall
not be elected on the day designated in the by-laws, or by law, the
corporation shall not for that reason be dissolved; but every director
shall continue to hold his office and discharge his duties until his suc-
cessor has been elected.

[As amended by L. 1892, Ch. 687.]

§ 29. Mode of calling special election of directors. If the elec-
tion has not been held on the day so designated, the directors shall
forthwith call a meeting of the members of the corporation for the
purpose of electing directors, of which meeting notice shall be given
in the same manner as of the annual meeting for the election of di-
rectors.
372 NEW YORK CORPORATIONS.

If such meeting shall not be so called within one month, or, if
held, shall result in a failure to elect directors, any member of the
corporation may call a meeting for the purpose of electing directors
by publishing a notice of the time and place of holding such meeting
at least once in each week for two successive weeks immediately pre-
ceding the election, in a newspaper published in the county where the
election is to be held and in such other manner as may be prescribed
in the by-laws for the publication of notice of the annual meeting, and
by serving upon each member, either personally or by mail, directed to
him at his last known post-office address, a copy of such notice at least
two weeks before the meeting.

[Added by L. 1892, Ch. 687.]

§ 30. Mode of conducting special election of directors. Such
meeting shall be held at the office of the corporation, or if it has none,
at the place in this state where its principal business has been trans-
acted, or if access to such office or place is denied or cannot be had,
at some other place-in the city, village or town where such office or
place is or was located.

At such meeting the members attending shall constitute a quo-
rum. They may elect inspectors of election and directors and adopt
by-laws providing for future annual meetings and election of directors,
if the corporation has no such by-laws, and transact any other business
which may be transacted at an annual meeting of the members of the
corporation.

[Added by L. 1892, Ch. 687.]

§ 31. Qualification of voters and canvass of votes at special elec-
tion. In the absence at such meeting of the books of the corporation
showing who are members thereof, each person, before voting, shall
present his sworn statement setting forth that he is a member of the
corporation; and if a stock corporation, the number of shares of stock
owned by him and standing in his name on the books of the corpora-
tion, and, if known to him, the whole number of shares of stock of
the corporation outstanding. On filing such statement, he may vote
as a member of the corporation; and if a stock corporation, he may
vote on the shares of stock appearing in such statement to be owned
by him and standing in his name on the books of the corporation.

The inspectors shall return and file such statements, with a cer-
tificate of the result of the election, verified by them, in the office of
the clerk of the county in which such election is held, and the persons
so elected shall be the directors of the corporation.

[Added by L. 1892, Ch. 687.]

§ 32. Powers of supreme court respecting elections, The su-
preme court shall, upon the application of any person or corporation
aggrieved by or complaining of any election of any corporation or any
proceeding, act or m&tter touching the same, upon notice thereof to
the adverse party, or to those to be affected thereby, forthwith and in
a summary way hear the affidavits, proofs and allegations of the par-
ties, or otherwise inquire into the matters or causes of complaint, and
establish the election or order a new election, or make such order
and give such relief as right and justice may require. ;

[As amended by L. 1892, Ch. 687.]

§ 33. Stay of proceedings in actions collusively brought. If an
action is brought against a corporation by the procurement or default
GENERAL CORPORATION LAW. 373

of its directors, or any of them, to enforce any claim or obligation de-
clared void by law, or to which the corporation has a valid defense,
and such action is in the interest or for the benefit of any director, and
the corporation has by his connivance made default in such action,
or consented to the validity of such claim or obligation, any member
of the corporation may apply to the supreme court, upon affidavit, set-
ting forth the facts, for a stay of proceedings in such action, and on
proof of the facts in such further manner and upon such notice as the
court may direct, it may stay such proceedings or set aside and vacate
the same, or grant such other relief as may seem proper, and which
will not injuriously affect an innocent party, who, without notice of
such wrongdoing and for a valuable consideration, has acquired rights
under such proceedings.
[As amended by L, 1892, Ch. 687.]

§ 34. Quorum of directors and powers of majority. The affairs
of every corporation shall be managed by its board of directors, at
least one of whom shall be a resident of this state. Unless otherwise
provided a majority of the board of directors of a corporation at a
meeting duly assembled shall be necessary to constitute a quorum for
the transaction of business and the act of a majority of the directors
present at a meeting at which a quorum is present shall be the act
of the board of directors. The members of a corporation may in by-
laws fix the number of directors necessary to constitute a quorum at
a number less than a majority of the board, but at least equal to one-
third of its number. Subject to the by-laws, if any, adopted by mem-
bers of a corporation, the directors may make necessary by-laws of the
corporation.

[As amended by L. 1892, Ch. 687; L. 1901, Ch. 214, § 1, and L,.
1904, Ch. 737, § 1.]

§ 35. Directors as trustees in case of dissolution. Upon the dis-
solution of any corporation, its directors, unless other persons shall be
appointed by the legislature, or by some court of competent jurisdic-
tion, shall be the trustees of its creditors, stockholders or members, and.
shall have full power to settle its affairs, collect and pay outstanding
debts, and divide among the persons entitled thereto the money and
other property remaining after payment of debts and necessary ex-
penses.

Such trustees shall have authority to sue for and recover the debts
and property of the corporation, by their name as such trustees, and
shall jointly and severally be personally liable to its creditors, stock-.
holders or members, to the extent of its property and effects that shall
come into their hands.

[As amended by L. 1892, Ch. 687.]

§ 36. Forfeiture for non-user. If any corporation, except a rail-
road, turnpike, plank-road or bridge corporation, shall not organize
and commence the transaction of its business or undertake the dis-
charge of its corporate duties within two years from the date of its.
incorporation, its corporate powers shall cease.

[As amended by L. 1892, Ch. 687.]

§ 37. Extension of corporate existence. Any domestic corpora-
tion at any time before the expiration thereof, may extend the term
of its existence beyond the time specified in its original certificate of in-
374 NEW YORK CORPORATIONS.

corporation, or by law, or in any certificate of extension of corporate
existence, by the consent of the stockholders owning two-thirds in
amount of its capital stock, or if not a stock corporation, by the con-
sent of two-thirds of its members, which consent shall be given either
in writing or by vote at a special meeting of the stockholders called
for that purpose, upon the same notice as that required for the an-
nual meetings of the corporation; and a certificate under the seal of
the corporation that such consent was given by the stockholders in
writing, or that it was given by vote at a meeting as aforesaid, shall be
subscribed and acknowledged by the president or a vice-president, and
by the secretary or an assistant secretary of the corporation, and shall
be filed in the office of the secretary of state, and shall by him be duly
recorded and indexed in a book specially provided therefor, and a cer-
tified copy of such certificate, with a certificate of the secretary of
state of such filing and record, or a duplicate original of such certificate,
shall be filed and similarly recorded and indexed in the office of the
clerk of the county wherein the corporation has its principal place of
business, and shall be noted in the margin of the record of the orig-
inal certificates of such corporation, if any, in such offices, and there-
after the term of the existence of such corporation shall be extended
as designated in such certificate.

The certificate of incorporation of any corporation whose duration
is limited by such certificate or by law, may require that the consent of
stockholders owning a greater percentage than two-thirds of the stock,
if a stock corporation, or of more than two-thirds of the members, if
a non-stock corporation, shall be requisite to effect an extension of
corporate existence as authorized by this section.

[As amended by L,. 1892, Ch. 687; L. to00, Ch. 177, § 1; L. 1901,
Ch. 355, § 1, and L. 1905, Ch. 256, § 1 pt.]

§ 38. Revival of corporate existence. If the term of existence
of any domestic corporation shall have expired and it shall be made
satisfactorily to appear to the supreme court that such corporation
was legally organized pursuant to any law of this state, and that it
shall have issued its bonds payable at a date beyond the date fixed in
its charter or certificate of incorporation for the expiration of its cor-
porate existence, and such bonds shall be unmatured and unpaid, the
supreme court may, upon the application of any person interested and
upon such notice to such other parties as the court may require, by
order, authorize the filing and recording of a certificate reviving the
existence of such corporation, upon such conditions and with such
limitations as such order shall specify, and extending such corporate
existence for a term not exceeding the term for which it was originally
incorporated. Upon filing and recording such certificate in the same
manner as certificates of extension of corporate existence duly issued
before the expiratiqgn of the existence of a domestic corporation are
authorized by law to be filed and recorded, such corporate existence
shall be revived and extended in pursuance of the terms of such order,
but such revival and extension shall not affect any litigation com-
menced after such expiration and pending at the time of such revival.

[As amended by L. 1892, Ch. 687; L. 1900, Ch. 177, § 1; L. 1901,
Ch. 355, § 1, and L. 1905, Ch. 256, § 1 pt.]

_ §.39.. Approval of certificates of extension or revival; when re-
quired. In the case of a corporation formed under or subject to the
banking law, no certificate of extension or revival shall be filed or re-
GENERAL CORPORATION LAW. 375

corded unless it shall have indorsed thereon the written approval of
the superintendent of banks; or, if an insurance corporation, unless it
shall have indorsed thereon the written approval of the superintend-
ent of insurance; and, if a turnpike or bridge corporation, it shall not
be filed unless it shall have indorsed thereon or annexed thereto a
certified copy of a resolution of the board of supervisors of each
county in which such turnpike or bridge is located, approving of and
authorizing such extension.

[As amended by L,. 1892, Ch. 687; L. 1900, Ch. 177, § 1; L. 1901,
Ch. 355, § 1, and L. 1905, Ch. 256, § I pt.]

§ 40. Extension when stock is owned by another corporation.
If all the stock of a corporation other than a corporation formed under
or subject to the banking law, or an insurance corporation, or a turn-
pike, plank-road or bridge corporation shall be lawfully owned by an-
other stock corporation entitled by law to take a surrender and merger
thereof, the corporate existence of such corporation whose stock is
so owned may be extended at any time for the term of the corporate
existence of the possessor corporation, by filing in the office or offices
in which the original certificate or certificates of incorporation of the
first-mentioned corporation were filed a certificate of such extension
executed by its president and secretary and by such corporation own-
ing all the shares of its capital stock.

[As amended by L. 1892, Ch. 687; L. 1900, Ch. 177, § 1; L. 1901,
Ch. 355, § 1, and L. 1905, Ch. 256, § I pt.]

§ 41. Effect of extension. Every corporation extending its cor-
porate existence under this chapter or under any general law of the
state shall thereafter be subject to the provisions of this chapter and
of such general law, notwithstanding any special provisions in its
charter, and shall thereafter be deemed to be incorporated under the
general laws of the state relating to the incorporation of a corporation
for the purpose of carrying on the business in which it is engaged,
and shall be subject to the provisions of such law.

[As amended by L. 1892, Ch. 687; L. 1900, Ch. 177, § 1; L. 1901,
Ch. 355, § 1, and L. 1905, Ch. 256, § 1 pt.]

§ 42. When notice of lapse of time unnecessary. Whenever
under the provisions of any of the corporate laws a corporation is au-
thorized to take any action after notice to its members or after the
lapse of a prescribed period of time, such action may be taken without
notice and without the lapse of any period of time, if such action be
authorized or approved, and such requirements be waived in writing
by every member of such corporation, or by his attorney thereunto
authorized.

[Added by L. 1895, Ch. 672, § 2.]

§ 43. As to acts of directors. Whenever, under the provisions
of any of the corporate laws, a corporation is authorized to take any
action by the agreement or action of its directors, managers or trus-
tees, such agreement or action may be taken by such directors, reg-
ularly convened as a board, and acting by a majority of a quorum,
except when otherwise expressly required by law or the by-laws of
the corporation and any stich agreement shall be executed in behalf
of the corporation by such officers as shall be designated by the board
of directors, managers or trustees. At any meeting at which every
member of the board of directors shall be present, though held with-
376 NEW YORK CORPORATIONS.

out notice, any business may be transacted which might have been
transacted if the meeting had been duly called. Except when other-
wise required by law or the by-laws of the corporation, special meetings
of the members of the corporation may be called in the same manner
as the annual meeting thereof. :

[Added by L. 1895, Ch. 672, § 2, and amended by L. 1901, Ch.
355, § 1.]

§ 44. Political contributions prohibited; penalty. No corporation
or joint-stock association doing business in this state, except a cor-
poration or association organized or maintained for political purposes
only, shall directly or indirectly pay or use or offer, consent or agree
to pay or use any money or property for or in aid of any political
party, committee or organization, or for, or in aid of, any corporation,
joint-stock or other association organized or maintained for political
purposes, or for, or in aid of, any candidate for political office or for
nomination for such office, or for any political purpose whatever, or
for the reimbursement or indemnification of any person for moneys
or property so used. Any officer, director, stockholder, attorney or
agent of any corporation or joint-stock association which violates any
of the provisions of this section, who participates in, aids, abets or ad-
vises or consents to any such violation, and any person who solicits or
knowingly receives any money or property in violation of this section,
shall be guilty of a misdemeanor and punishable by imprisonment in
a penitentiary or county jail for not more than one year and a fine
of not more than one thousand dollars. No person shall be excused
from attending and testifying, or producing any books, papers or other
documents before any court or magistrate, upon any investigation,
proceeding or trial, for a violation of any of the provisions of this
section, upon the ground or for the reason that the testimony or evi-
dence, documentary or otherwise, required of him may tend to convict
him of a crime or to subject him to a penalty or forfeiture; but no
person shall be prosecuted or subjected to any penalty or forfeiture
for or on account of any transaction, matter or thing concerning which
he may so testify or produce evidence, documentary or otherwise, and
no testimony so given or produced shall be received against him upon
any criminal investigation or proceeding.

[Added by L. 1906, Ch. 230, § 1.]

ARTICLE 3.
CHANGE OF NAME.

Section 60. Petitiom by corporation to change name.
61. Contents of petition.
62. Notice of presentation of petition.
63. Order authorizing change.
64. When change to take effect.
65. Substitution of new name in pending action or proceed-
ing.

§ 60. Petition by corporation to change name, A petition to as-
sume another corporate name may be made by a domestic corporation,
whether incorporated by a general or special law, to the supreme
GENERAL CORPORATION LAW. 207

court at a special term thereof, held in the judicial district in which
its principal business office shall be situated, or, if it be other than a
stock corporation, at a special term held in the judicial district in which
its certificate of incorporation is filed or recorded, or in which its
principal property is situated, or in which its principal operations are
or theretofore have been conducted. If it be a banking, insurance or
railroad corporation, the petition must be authorized by a resolution
of the directors of the corporation, and approved if a banking corpora-
tion, by the superintendent of banks; if an insurance corporation other
than a town or county co-operative insurance corporation, by the su-
perintendent of insurance, and if a railroad corporation, by the public
Service commission. The petition to change the name of any other
corporation must have annexed thereto a certificate of the secretary
of state, that the name which such corporation proposes to assume is
not the name of any other domestic corporation or a name which he
deems so nearly resembling it, as to be calculated to deceive.
[Code Civil Procedure, § 2411.]

§ 61. Contents of petition. The petition must be in writing,
signed by the petitioner and verified in like manner as a pleading in a
court of record, and must specify the grounds of the application, its
present name, and the name it proposes to assume, which must not be
the name of any other corporation, or a name so nearly resembling
it as to be calculated to deceive; and if it be a railroad corporation, a
corporation having banking powers or the power to make loans upon
pledges or deposits, or to make insurances, that the petition has been
duly authorized by a resolution of the directors of the corporation and
approved by the proper officer.

[Code Civil Procedure, § 2412. For remainder of section see Code
Civil Procedure, § 2412.]

§ 62. Notice of presentation of petition. If the petition be made
by a corporation located elsewhere than in the city and county of
New York, notice of the presentation thereof shall be published once
in each week for three successive weeks in a newspaper of every
county in which such corporation shall have a business office, or if it
has no business office, of the county in which its principal corporate
property is situated, or in which its operations are or theretofore have
been principally conducted, which newspaper, if it be a banking cor-
poration, shall be designated by the superintendent of banks, if an
insurance corporation other than a town or county co-operative insur-
ance corporation, by the superintendent of insurance, or if a railroad
corporation, by the public service commission. In the city and county
of New York such notice shall be published once in each week for
three successive weeks in two daily newspapers published in such
county.

A copy of the petition and notice of motion shall be filed with the
secretary of state, and the proposed name shall thereupon be reserved
for said corporation until three weeks after the date of such motion,
and until three weeks after the date of any adjournment of such mo-
tion if notice of such adjournment shall be filed with the secretary of
‘state, and no certificate of incorporation of a proposed corporation,
having the same name as the name proposed in such petition, or a
name so nearly resembling it as to be calculated to deceive, shall be
filed in any office for the purpose of effecting its incorporation, and
no corporation formed without the state of New York having the same
378 NEW YORK CORPORATIONS.

name or a name so nearly resembling it as to be calculated to deceive
shall be given authority to do business in this state.

[Code Civil Procedure, § 2413. For remainder of section see Code
Civil Procedure, § 2413.]

§ 63. Order authorizing change. If the court to which the peti-
tion is presented is satisfied thereby, or by the affidavit and certificate
presented therewith, that the petition is true, and that there is no
reasonable objection to the change of name proposed and that the pe-
tition has been duly authorized and that notice of the presentation of
the petition, if required by law, has been made, the court shall make
an order authorizing the petitioner to assume the name proposed ona
day specified therein, not less than thirty days after the entry of the
order. The order shall be directed to be entered and the papers on
which it was granted to be filed within ten days thereafter in the office
of the clerk of the county in which its certificate of incorporation, if
any, shall be filed, or if there be none filed, in which its principal office
shall be located, or if it has no business office in the county in which
its principal property is situated, or in which its operations are or
theretofore have been principally conducted, or in the office of the clerk
of the county in which the special term granting the order is held; and
that a certified copy of such order shall, within ten days after the entry
thereof, be filed in the office of the secretary of state; and also, if it
be a banking corporation, in the office of the superintendent of banks,
or if it be an insurance corporation, other than a town or county co-
operative insurance corporation, in the office of the superintendent of
insurance, or if it be a railroad corporation, in the offices of the public
service commissions. Such order shall also direct the publication,
within ten days after the entry thereof of a copy thereof, in a desig-
nated newspaper, in the county in which the order is directed to be
entered, once in each week for four successive weeks.

[Code Civil Procedure, § 2414. For remainder of section see
County Law, § 161, subd. 6, and Code Civil Procedure, § 2414.]

§ 64. When change to take effect. If the order shall be fully
complied with, and within forty days after the making of the order,
an affidavit of the publication thereof shall be filed and recorded in the
office in which the order is entered, and in each office in which certified
copies thereof are required to be filed, if any, the petitioner shall, on
and after the day specified for that purpose in the order, be known by
the name which is thereby authorized to be assumed, and by no other
name. No proceedings had prior to April fourth, eighteen hundred
and ninety-four, under sections two thousand four hundred and four-
teen and two thousand four hundred and fifteen of the code of civil
procedure for the change of the name of a corporation, shall be in-
valid by reason of the non-filing of an affidavit of the publication of the
order changing such name within twenty days from the date thereof.

[Code Civil Procedure, § 2415.]

§ 65. Substitution of new name in pending action or proceeding.
An action or special proceeding, civil or criminal, commenced by or
against a corporation whose name is so changed shall not abate, nor
shall any relief, recovery or other proceeding therein be prevented, im-
peded or impaired in consequence of such change of name. The plain-
tiff in the action or the party instituting the special proceeding, or the
people, as the case requires, may at any time, obtain an order amend-
GENERAL CORPORATION LAW. 379

ing any of the papers or proceedings therein, by the substitution of
the new name, without costs and without prejudice to the action or
proceeding.

[Code Civil Procedure, § 2416.]

ARTICLE 4.
SALE OF CORPORATE REAL PROPERTY.

Sxection 70. Application of this article.
71. Petition.
72. Hearing on application.
73. Order to sell, mortgage or lease.
74. Insolvent corporation.
75. Service of notices.
76. Practice in cases not herein provided for.

§ 70. Application of this article. Whenever any corporation is
required by law to make application to the court for leave to mortgage,
lease or sell its real estate, the proceeding therefor shall be had pur-
suant to the provisions of this article.

[Code Civil Procedure, § 3390. For remainder of section see
Joint-Stock Association Law, § 8.]

§ 71. Petition. The proceeding shall be instituted by the presen-
tation to the supreme court of the district or the county court of the
county where the real property, or some part of it, is situated, by the
corporation applicant, of a petition setting forth the following facts:

1. The name of the corporation and of its directors, trustees or
managers, and of its principal officers, and their places of residence.

2. The business of the corporation or the object or purpose of its
incorporation and a reference to the statute under which it was in-
corporated.

3. A description of the real property to be sold, mortgaged or
leased, by metes and bounds, with reasonable certainty.

4. That the interests of the corporation will be promoted by the
sale, mortgage or lease, of the real property specified, and a concise
statement of the reasons therefor.

5. That such sale, mortgage or lease has been authorized, by a
vote of at least two-thirds of the directors, trustees or managers of
the corporation at a meeting thereof, duly called and held, and a copy
of the resolution granting such authority.

6. The market value of the remaining real property of the cor-
poration and the cash value of its personal assets, and the total amount
of its debts and liabilities, and how secured, if at all.

7. The application proposed to be made of the moneys realized
from such sale, mortgage or lease.

8. Where the consent of the shareholders, stockholders or mem-
bers of the corporation is required by law to be first obtained, a state-
ment that such consent has been given, and a copy of the consent, or
a certified transcript of the record of the meeting at which it was
given, shall be annexed to the petition.

9. A demand for leave to mortgage, lease or sell the real estate
described.
380 NEW YORK CORPORATIONS.

The petition shall be verified in the same manner as a verified
pleading in an action in a court of record.

[Code Civil Procedure, § 3391.]

§ 72. Hearing on application. Upon presentation of the petition,
the court may immediately proceed to hear the application, or it may,
in its discretion, direct that notice of the application shall be given to
any person interested therein, as a member, stockholder, officer or
creditor of the corporation or otherwise, in which case the application
shall be heard at the time and place specified in such notice, and the
court may in any case appoint a referee to take the proofs and report
the same to the court, with his opinion thereon. Any person, whose
interests may be affected by the proceeding, may appear upon the hear-
ing and show cause why the application should not be granted.

[Code Civil Procedure, §§ 3392, 3303 pt. For remainder of § 3393
see § 73.]

§ 73. Order to sell, mortgage or lease. Upon the hearing of the
application, if it shall appear, to the satisfaction of the court, that the
interests of the corporation will be promoted thereby, an order may
be granted authorizing it to sell, mortgage or lease the real property
described in the petition, or any part thereof, for such sum, and upon
such terms as the court may prescribe, and directing what disposition
shall be made of the proceeds of such sale, mortgage or lease.

[Code Civil Procedure, § 3393 pt. For remainder of § 3393 see
§ 72.]

§ 74. Insolvent corporation. If the corporation is insolvent, or
its property and assets are insufficient to fully liquidate its debts and
liabilities, the application shall not be granted, unless all the creditors
of the corporation have been served with a notice of the time and
place at which the application will be heard.

[Code Civil Procedure, § 3394.]

§ 75. Service of notices. Service of notices, provided for in this
article, may be made either personally or, in case of absence, by leaving
the same at the place of residence of the person to be served, with
some person of mature age and discretion, at least eight days before
the hearing of the application, or by mailing the same, duly enveloped
and addressed and postage paid, at least sixteen days before such
hearing.

[Code Civil Procedure, § 3395.]

§ 76. Practice in cases not herein provided for. In all applica-
tions made under,ghis article, where the mode or manner of conducting
any or all of the proceedings thereon is not expressly provided for, the
court before whom such application may be pending, shall have the
power to make all the necessary orders and give the proper directions
to carry into effect the object and intent of this article, or of any act
authorizing the sale of corporate real property, and the practice in
such cases shall conform, as near as may be, to the ordinary practice
in such court.

[Code Civil Procedure, § 3396.]
GENERAL CORPORATION LAW. 381

ARTICLE 5.

JUDICIAL SUPERVISION OF CORPORATION AND OF THE
OFFICERS AND MEMBERS THEREOF.

Section go. Action against officers of corporation for misconduct.
gt. Who may bring such an action.
92. Visitatorial power over corporation not affected by this
article.

§ 90. Action against officers of corporation for misconduct. An
action may be maintained against one or more trustees, directors, man-
agers, or other officers of a corporation, to procure a judgment for the
following purposes, or so much thereof as the case requires:

1. Compelling the defendants to account for their official con-
duct, including any neglect of or failure to perform their duties, in the
management and disposition of the funds and property, committed to
their charge.

2. Compelling them to pay to the corporation, which they rep-
resent, or to its creditors, any money, and the value of any property,
which they have acquired to themselves, or transferred to others, or
lost, or wasted, by or through any neglect of or failure to perform or
by other violation of their duties.

3. Suspending a defendant from exercising his office, where it
appears that he has abused his trust.

4. Removing a defendant from his office, upon proof or convic-
tion of misconduct, and directing a new election to be held by the
body or board duly authorized to hold the same, in order to supply the
vacancy created by the removal; or, where there is no such body or
board, or where all the members thereof are removed, directing the
removal to be reported to the governor, who may, with the advice and
consent of the senate, fill the vacancies.

5. Setting aside an alienation of property, made by one or more
trustees, directors, managers or other officers of a corporation, con-
trary to a provision of law, or for a purpose foreign to the lawful busi-
ness and objects of the corporation, where the alienee knew the pur-
pose of the alienation.

6. Restraining and preventing such an alienation, where it is
threatened, or where there is good reason to apprehend that it will
be made.

7. The court must, upon the application of either party, make
an order directing the trial by a jury of the issue of neglect or failure
of defendants to perform their duties; and for that purpose the ques-
tions to be tried must be prepared and settled as prescribed in section
nine hundred and seventy of the code of civil procedure.

As to any litigation pending prior to September one, nineteen
hundred and seven, the provisions of this section as they existed prior
to that date shall apply.

[Code Civil Procedure, § 1781. Last paragraph is L. 1907, Ch.
157, § 2.]

§ 91. Who may bring such an action. An action may be brought,
as prescribed in the last section, by the attorney-general in behalf of
the people of the state, or, except where the action is brought for the
purpose specified in subdivision third or fourth of that section, by a
creditor of the corporation, or by a trustee, director, manager, or other
382 NEW YORK CORPORATIONS.

officer of the corporation, having a general superintendence of its
concerns.

[Code Civil Procedure, § 1782.]

§ 92. Visitatorial power over corporation not affected by this
article. This article does not divest or impair any visitatorial power
over a corporation, which is vested by statute in a corporate body, or
a public officer.

[Code Civil Procedure, § 1783.]

ARTICLE 6.

ACTION FOR SEQUESTRATION, ACTION FOR DISSOLU-
TION AND ACTION TO ENFORCE INDIVIDUAL LIA-
BILITY OF OFFICER AND MEMBER OF CORPORA-
TION.

Ssection too. Action by judgment creditor for sequestration.

tor. Action to dissolve a corporation.

102. Who may bring action to dissolve a corporation.

103. Temporary injunction in action authorized by this
article.

104. Temporary receiver.

to5. Additional powers and duties of temporary receiver.

106. Permanent recéiver.

107. Additional duties and liabilities of permanent receiver.

108. Application for appointment of receiver.

tog. Officers and stockholders may be made parties in action
brought by creditor.

110. Separate action may be brought against officers and
stockholders.

1m1. Proceedings in such actions.

112. Distribution of property of corporation by judgment
in actions under this article.

113. Recovery of stock subscriptions.

114. Ljiability of directors and stockholders.

115. Effect of this article.

§ 100. Action by judgment creditor for sequestration. Where
final judgment for a sum of money has been rendered against a cor-
poration created by or under the laws of the state, and an execution
issued thereupon to the sheriff of the county, where the corporation
transacts its general business, or where its principal office is located,
has been returned wholly or partly unsatisfied, the judgment creditor
may maintain an &ction to procure a judgment sequestrating the prop-
erty of the corporation, and providing for a distribution thereof, as
prescribed in section one hundred and twelve of this chapter.

[Code Civil Procedure, § 1784.]

§ 101. Action to dissolve a corporation. In either of the follow-
ing cases, an action to procure a judgment, dissolving a corporation,
created by or under the laws of the state, and forfeiting its corporate
rights, privileges and franchises, may be maintained, as prescribed in
the next section:
GENERAL CORPORATION LAW. 383

1. Where the corporation has remained insolvent for at least
one year.

2. Where it has neglected or refused, for at least one year, to
pay and discharge its notes or other evidences of debt.

3. Where it has suspended its ordinary and lawful business for
at least one year.

4. If it has banking powers, or power to make loans on pledges
or deposits, or to make insurances, where it becomes insolvent or un-
able to pay its debts, or has violated any provision of the act, by or
under which it was incorporated, or of any other act binding upon it.

[Code Civil Procedure, § 1785.]

.§ 102. Who may bring action to dissolve a corporation. An ac-
tion specified in the last section, may be maintained by the attorney-
general, in the name and in behalf of the people. And whenever a
creditor or stockholder of any corporation submits to the attorney-
general a written statement of facts, verified by oath, showing grounds
for an action under the provisions of the last section, and the attorney-
general omits, for sixty days after this submission, to commence an
action specified in the last section, then, and not otherwise, such credi-
tor or stockholder may apply to the proper court for leave to com-
mence such an action, and on obtaining leave may maintain the same
accordingly.

[Code Civil Procedure, § 1786.]

§ 103. Temporary injunction in action authorized by this article.
In an action, brought as prescribed in this article, the court may, upon
proof of the facts authorizing the action to be maintained, grant an in-
junction order, restraining the corporation, and its trustees, directors,
managers and other officers, from collecting or receiving any debt or
demand, and from paying out, or in any way transferring or delivering,
to any person, any money, property, or effects of the corporation, dur-
ing the pendency of the action; except by express permission of the
court. Where the action is brought to procure the dissolution of the
corporation, the injunction may also restrain the corporation, and its
trustees, directors, managers and other officers, from exercising any
of its corporate rights, privileges, or franchises, during the pendency
of the action; except by express permission of the court. The pro-
visions of title second of chapter seventh of the code of civil pro-
cedure, relating to the granting, vacating or modifying of an injunc-
tion order, apply te an injunction order, granted as prescribed in this
section; except that it can be granted only by the court.

[Code Civil Procedure, § 1787.]

§ 104. Temporary receiver. In such an action, the court may
also, at any stage thereof, appoint one or more receivers of the prop-
erty of the corporation. A receiver, so appointed, before final judg-
ment is a temporary receiver, until final judgment is entered. A tem-
porary receiver has power to collect and receive the debts, demands,
and other property of the corporation; to preserve the property, and
the proceeds of the debts and demands collected; to sell or otherwise
dispose of the property as directed by the court; to collect, receive and
preserve the proceeds thereof; and to maintain any action or special
proceeding, for either of those purposes. He must qualify as pre-
scribed by law for the qualification of a permanent receiver. Unless
additional powers are specially conferred upon him, as prescribed in
384 NEW YORK CORPORATIONS.

the next section, a temporary receiver has only the powers specified in
this section, and those which are incidental to the exercise thereof.

[Code Civil Procedure, § 1788 pt. For remainder of section see
this article, § 106.]

§ 105. Additional powers and duties of temporary receiver. A
temporary receiver, appointed as prescribed in the last section, is, in
all respects, subject to the control of the court. In addition to the
powers conferred upon him, by the provisions of the last section, the
court may, by the order or interlocutory judgment appointing him, or
by an order subsequently made in the action, or by the final judgment,
confer upon him the powers and authority, and subject him to the
duties and liabilities, of a permanent receiver, or so much thereof as
it thinks proper; except that he shall not make any distribution among
the creditors or stockholders, before final judgment, unless he is spe-
cially directed so to do by the court.

[Code Civil Procedure, § 1789.]

§ 106. Permanent receiver. A receiver appointed by or pursuant
to a final judgment in the action, or a temporary receiver who is con-
tinued by the final judgment, is a permanent receiver, and has all the
powers and authority conferred, and is subject to all the duties and
liabilities imposed upon a receiver appointed in article eleven of this
chapter.

[Code Civil Procedure, § 1788 pt. For remainder of section see
this article, § 104.]

§ 107. Additional duties and liabilities of permanent receiver.
A permanent receiver shall keep an account of all moneys received by
him, and on the first days of January, April, July and October, in each
and every year make and file a written statement, verified by his oath
that such statement is correct and true, showing the amount of money
received by such receiver, his agents or attorneys, the amount he has
a right to retain and the items for which he claims to retain the same,
and the distributive share due each person interested therein. He
shall pay such distributive share to the person or persons entitled
thereto, on demand, at any time after such statement. Such account,
statement, and all the books and papers of the corporation in the
hands of such receiver, shall at all reasonable times be open for the
inspection of all persons having an interest therein. And in case of
neglect or refusal to comply with either of the above requirements, or
any duty imposed upon him, the supreme court, at either an appellate
division or special term, shall, on the application of the party ag-
grieved, unless such neglect or refusal shall be satisfactorily explained
to the court, forthwith remove such receiver, and appoint some suitable
person as receiver in his place. Such removal shall not vitiate or an-
nul any legal proceedings had by such receiver; but such proceedings
shall be continued by such successor as if no removal] had been made.
Such receiver shall also be liable to pay to the party interested, inter-
est at the rate of ten per centum per annum on all moneys due to such
party and retained by him more than one day after such demand made
as aforesaid.

[R. S., Pt. 3, Ch. 8, Tit. 4. Art. 2, § 42, as amended by L. 1858
Ch. 348, § 1.] :

§ 108. Application for appointment of receiver. Applications made
by the attorney-general for the appointment of a receiver of a cor-
GENERAL CORPORATION LAW. 385

poration shall be made in the judicial district in which the action in
which the appointment is sought is triable.
[L. 1883, Ch. 378, § 1 pt., as amended by L,. 1896, Ch. 282, § 1.]

§ 109. Officers and stockholders may be made parties in action
brought by creditor, Where the action is brought by a creditor of a
corporation, and the stockholders, directors, trustees, or other officers,
or any of them, are made liable by law, in any event or contingency,
for the payment of his debt, the persons, so made liable, may be made
parties defendant, by the original or by a supplemental complaint;
and their liability may be declared and enforced by the judgment in
the action.

[Code Civil Procedure, § 1790.]

§ 110. Separate action may be brought against officers and stock-
holders. Where the stockholders, directors, trustees, or other officers
of a corporation, who are made liable, in any event or contingency, for
the payment of a debt, are not made parties defendant, as prescribed
in the last section, the plaintiff in the action may maintain a separate
action against them, to procure a judgment, declaring, apportioning
and enforcing their liability.

[Code Civil Procedure, § 1791.]

§ 111. Proceedings in such actions. In an action brought as
prescribed in either of the last two sections, the court must, when it is
necessary, cause an account to be taken of the property and of the
debts of the corporation, and thereupon the defendant’s liability must
be apportioned accordingly; but, if it affirmatively appears, that the
corporation is insolvent, and has no property to satisfy its creditors,
the court may, without taking such an account, ascertain and deter-
mine the amount of each defendant’s liability, and enforce the same
accordingly.

[Code Civil Procedure, § 1792.]

§ 112. Distribution of property of corporation by judgment in
actions under this article. A final judgment in an action, brought
against a corporation, as prescribed in this article, either separately
or in conjunction with its stockholders, directors, trustees, or other
officers, must provide for a just and fair distribution of the property
of the corporation, and of the proceeds thereof, among its fair and
honest creditors, in the order and in the proportions prescribed by
law, in case of the voluntary dissolution of a corporation.

[Code Civil Procedure, § 1793.]

§ 113. Recovery of stock subscriptions. Where the stockholders
of the corporation are parties to the action, if the property of the cor-
poration is not sufficient to discharge its debts, the interlocutory or
final judgment, as the case requires, must adjudge that each stock-
holder pay into court the amount due and remaining unpaid, on the
shares of stock held by him, or so much thereof as is necessary to
satisfy the debts of the corporation.

[Code Civil Procedure, § 1794.]

§ 114. Liability of directors and stockholders. If it appears, that
the property of the corporation, and the sums collected or *collectable
from the stockholders, upon their stock subscriptions, are or will be

* So in original.
386 NEW YORK CORPORATIONS.

insufficient to pay the debts of the corporation, the court must ascer-
tain the several sums, for which the directors, trustees, or other of-
ficers, or the stockholders of the corporation, being parties to the ac-
tion, are liable; and must adjudge that the same be paid into court, to
be applied, in such proportions and in such order as justice requires, to
the payment of the debts of the corporation. «

[Code Civil Procedure, § 1795.]

§ 115. Effect of this article. This article does not repeal or affect
any special provision of law, prescribing that a particular kind of cor-
poration shall cease to exist, or shall be dissolved, in a case or in a
manner, not prescribed in this article; or any special provision of law,
prescribing the mode of enforcing the liability of the stockholders of
a particular kind of corporation.

[Code Civil Procedure, § 1796.]

ARTICLE 7.
ACTION TO ANNUL A CORPORATION.

Section 130. Action by attorney-general to annul corporation when

legislature directs.

131. Action by attorney-general to annul corporation by
leave of court.

132. Notice of application for leave to commence action to
annul corporation.

133. Jury trial.

134. Injunction and receiver in final judgment.

135. Temporary injunction.

136. Filing and publishing judgment.

§ 130. Action by attorney-general to annul corporation when
legislature directs. The attorney-general, whenever he is so directed
by the legislature, must bring an action against a corporation created
by or under the laws of the state, to procure a judgment, vacating
or annulling the act of incorporation, or any act renewing the cor-
poration, or continuing its corporate existence, upon the ground that
the act was procured upon a fraudulent suggestion, or the conceal-
ment of a material fact, made by or with the knowledge and consent
of any of the persons incorporated.

[Code Civil Procedure, § 1797.]

§ 131. Action by attorney-general to annul corporation by leave
of court. Upon leave being granted, as prescribed in the next sec-
tion, the attorney-general may bring an action against a corporation
created by or under the laws of the state, to procure a judgment, va-
cating the charter or annulling the existence of the corporation, upon
the ground that it has, either

1. Offended against any provision of an act, by or under which
it was created, altered or renewed, or an act amending the same, and
applicable to the corporation; or,

2. Violated any provision of law, whereby it has forfeited its
charter, or become liable to be dissolved, by the abuse of its powers; or,

3. Forfeited its privileges or franchises, by a failure to exercise
its powers; or,
GENERAL CORPORATION LAW. 387

4. Done or omitted any act, which amounts to a surrender of its
corporate rights, privileges, and franchises; or,

5. Exercised a privilege or franchise, not conferred upon it by law.

[Code Civil Procedure, § 1708.]

§ 132. Notice of application for leave to commence action to
annul corporation, Before granting leave, the court may, in its dis-
cretion, require such previous notice of the application as it thinks
proper, to be given to the corporation, or any officer thereof, and may
hear the corporation in opposition thereto.

[Code Civil Procedure, § 1799.]

§ 133. Jury trial. An action, brought as prescribed in this
article, is triable, of course and of right, by a jury, as {f it was an
action specified in section nine hundred and sixty-eight of the code
of civil procedure and without procuring an order, as prescribed in
section nine hundred and seventy of the code of civil procedure.

[Code Civil Procedure, § 1800.]

§ 134. Injunction and receiver in final judgment. Where any
of the matters, specified in section one hundred and thirty or section
one hundred and thirty-one of this article, are established in an ac-
tion, brought as prescribed in either of those sections, the court may
render final judgment that the corporation, and each officer thereof,
be perpetually enjoined from exercising any of its corporate rights,
privileges, and franchises; and that it be dissolved. The judgment
must also provide for the appointment of a receiver, the taking of an
account, and the distribution of the property of the corporation,
among its creditors and stockholders, as where a corporation is dis-
solved upon its voluntary application, as prescribed in article nine of
this chapter.

[Code Civil Procedure, § 18o0r1.]

§ 135. Temporary injunction. In an action, brought as prescribed
in this article, an injunction order may be granted, at any stage of
the action, restraining the corporation, and any or all of its directors,
trustees and other officers, from exercising any of its corporate rights,
privileges, or franchises; or from exercising certain of its corporate
rights, privileges, or franchises, specified in the injunction order; or
from exercising any franchise, liberty, or privilege, or transacting any
business, not allowed by law. Such an injunction is deemed one of
those specified in section six hundred and three of the code of civil
procedure, and all the provisions of title second of chapter seventh
of the code of civil procedure applicable to an injunction specified
in that section, apply to an injunction granted as prescribed in this
section, except that it can be granted only by the court.

[Code Civil Procedure, § 1802.]

§ 136. Filing and publishing judgment. Where final judgment
is rendered against a corporation, in an action, brought as prescribed
in this article, the attorney-general must cause a copy of the judg-
ment-roll to be forthwith filed in the office of the secretary of state;
who must cause a notice of the substance and effect of the judgment,
to be published, for four weeks, in a newspaper printed in the county,
wherein the principal place of business of the corporation was
located.

[Code Civil Procedure, § 1803.]
388 NEW YORK CORPORATIONS.

ARTICLE 8.
ACTION TO DISSOLVE MONEYED CORPORATION.

Section 150. Temporary injunction and receiver in action against

moneyed corporation. ‘

151. Order to show cause why injunction and receiver
should not be permanent.

152. Inventory and appraisal by receiver.

153. Conversion of assets into cash by receiver.

154. Employment of counsel by receiver.

155. Notice to creditors by receiver.

156. Allowance, rejection and adjustment of claims by
receiver.

157. Final settlement and distribution by receiver.

158. Notice of account and accounting by receiver.

159. Proceedings upon accounting.

160. Claims barred after distribution of assets by receiver.

161. Application of article.

§ 150. Temporary injunction and receiver in action against
moneyed corporation. Whenever the attorney-general shall com-
mence an action against a moneyed corporation upon the information
of either the superintendent of insurance, or the superintendent of
banks, for the dissolution or sequestration of the property or annul-
ment of the charter of a corporation formed under or subject to the
banking or insurance law, and shall be satisfied that it is unsafe and
inexpedient for such corporation to continue doing business, the
supreme court may, on his application, in a case provided by law,
appoint a receiver thereof, and may on such appointment grant an
injunction restraining such corporation from carrying on its business
until the further order of the court. The court may, in its discretion,
dispense with notice of the application.

[L. 1902, Ch. 60, § 1.]

§ 151. Order to show cause why injunction and receiver should
not be permanent. The court, on granting an order without notice,
either for the appointment of a receiver or for an injunction, or for
both forms of relief, as herein provided, shall make an order that the
corporation so proceeded against show cause at a term of the court to
be held not more than thirty days thereafter, why such receiver and
injunction should not be permanent. Such order shall be served not
less than eight days before the date upon which the hearing thereon
is to be had. Unless the court otherwise directs, the receiver ap-
pointed in the first instance shall be permanent receiver of such cor-
poration, and the injunction shall be continued during the pendency
of the litigation. ch receiver shall, unless otherwise ordered by
the court, continue to act as such up to and after final judgment, and
until the affairs of the corporation shall be finally settled and its
property distributed by him according to law. The bond to be given
by the receiver on his appointment shall be. fixed at such sum and so
conditioned that it shall continue in force and effect until the final
discharge of such receiver, including any liability which may be
incurred by said receiver by virtue of his appointment as such in the
final judgment, in case he shall be so named therein.

[L. 1902, Ch. 60, § 2.]
GENERAL CORPORATION LAW. 389

§ 152. Inventory and appraisal by receiver. It shall be the duty
of the receiver to take an inventory and make an appraisal of the
assets and property of the corporation. In case the corporation is
subject to the banking law, two disinterested appraisers shall be
appointed by the superintendent of banks to aid in this duty, and in
case the corporation is subject to the insurance law, such appraisers
shall be appointed by the superintendent of insurance. Ten days’
notice of such inventory and appraisal shall be given to the corporation
and such inventory and appraisal shall be completed and filed with the
clerk of the supreme court in the county in which the trial is to be had,
within ninety days after the appointment of such receiver, and a certi-
fied copy thereof in the office of the attorney-general, and in the office
of the superintendent of banks, or in the office of the superintendent
of insurance, as the case may be, unless for good cause shown the
officer appointing such-appraisers shall, in writing, extend the time
for the completion thereof. Such appraisers shall receive as compen-
sation a reasonable sum, not exceeding fifteen dollars per day and
actual and necessary expenses, to be paid by the receiver upon the
approval of the officer by whom they were named. The receiver shall
be chargeable with the amount of such inventory and shall be relieved
therefrom to the same extent and upon the same grounds as in the
like case of an executor.

[L. 1902, Ch. 60, § 3. For remainder of § 3 see following section.]

§ 153. Conversion of assets into cash by receiver. The receiver
shall proceed, immediately upon his appointment, to convert the assets
of the corporation into cash.

[L. 1902, Ch. 60, § 3. For remainder of § 3 see preceding section.]

§ 154. Employment of counsel by receiver. It shall not be
lawful for any receiver to pay to any attorney or counsel any costs,
fees or allowance until the amount thereof shall have been stated to
the special term, as expenses incurred by such receiver and shall have
been approved by that court by an order duly entered. Any such order
shall be the subject of review by the appellate division and the court
of appeals on appeal thereto taken by any party. The receiver may
employ not to exceed one counsel unless the employment of additional
counsel shall be authorized by the supreme court after notice to the
attorney-general of an application therefor.

[L. 1902, Ch. 60, § 4, as amended by L. 1904, Ch. 705, § 1.]

§ 155. Notice to creditors by receiver. Within thirty days after
he qualifies the receiver of any title guaranty company authorized
by law to issue policies of insurance or agreements of indemnity or
guaranty, and which corporation has issued and outstanding at the
time of the appointment of the receiver, policies of insurance or agree-
ments of indemnity or guaranty, exceeding two thousand in number,
shall not be required to mail to the holders or owners of said policies
of insurance or of said agreements, the notice required by law to be
given to creditors of an insolvent moneyed corporation; but such
receiver shall cause a notice to be published twice a week, for four
successive weeks, in two newspapers published in the county where
said corporation has its principal place of business; which said notice
shall require all creditors and owners and_ holders of outstanding
policies of insurance or agreements of indemnity or guaranty, to exhibit
and prove their claim, within sixty days; and, in default of so doing,
390 NEW YORK CORPORATIONS.

shall be precluded from all benefit of the judgment and from any and
all distribution which may be made thereunder, except that the creditor
or holder or owner of any policy or agreement of indemnity or guar-
anty, who shall exhibit or prove his claim, with an affidavit that he
had no notice or knowledge thereof, in time to comply with the
provisions hereof, at any time before an order is made directing a
final settlement and distribution of assets of such corporation, shall
be entitled to have his claim received, and shall have the same rights
and benefits thereon, so far as the assets of such corporation then
remaining undistributed may be applied, as if his claim had been
exhibited and proved within the time limited by such notice. This
section shall apply to all receivers of moneyed corporations.

[L. 1902, Ch. 60, § 5 pt., and L. 1904, Ch. 754, §§ 1 and 4.]

§ 156. Allowance, rejection and adjustment of claims by receiver.
The receiver shall have the same power and authority with reference
to the allowance or rejection of claims as is given to executors, and
no reference shall be had to pass upon claims except such as may be
disputed by such receiver. In case any claim shall be disputed, the
receiver shall immediately upon the expiration of the time for the
presentation of claims, upon notice to the parties whose claims have
been rejected, apply to the court for the appointment of a referee to
hear and determine as to the allowance thereof. Claims allowed by
the receiver shall be subject to objection upon the final settlement
and their validity may be determined as the validity of claims against
estates are determined upon final settlement by a surrogate.

[L. 1902, Ch. 60, § 5. For remainder of § 5 see § 155.]

§ 157. Final settlement and distribution by receiver. The receiver
may apply for a final settlement of his accounts and an order for dis-
tribution at any time after the expiration of six months, and shall so
apply within eighteen months after qualifying as such. The attorney-
general or any creditor, or party interested, may apply for an order
that the receiver show cause why an accounting and distribution should
not be had at any time after the expiration of one year after the
receiver qualifies; and it shall be the duty of the attorney-general,
after the expiration of eighteen months from the time the receiver
enters upon his duties, in case he has not applied for a final settle-
ment of his accounts, to apply for such an order on notice to such
receiver. In case of such application by a party other than the re-
ceiver, the court shall direct the receiver to take steps to account with
all convenient speed. The receiver is not required or authorized to file
any account, except as herein provided, except by special order of the
court.

[L. 1902, Ch. 60, § 6.]

§ 158. Notice of account and accounting by receiver. 1. ‘The
receiver shall file his account, together with a statement of the items
and amounts claimed by his counsel, up to that date with the court
and a duplicate thereof, together with the vouchers, with the attorney-
general, at least thirty days before time fixed for his final settlement
and accounting, and the attorney-general shall serve upon the attorney
for the receiver any objections he may have to the account, or to the
statement as to the items and amounts claimed by counsel for com-
pensation, appearing in such account on or before such hearing.
GENERAL CORPORATION LAW. 391

2. Prior to the final settlement of accounts of a receiver of any
moneyed corporation, having in force, at the time of his appointment,
outstanding policies of insurance or agreements of indemnity or guar-
anty, exceeding two thousand in number, said receiver shall give
notice to all of the creditors and to the owners or holders of said
policies of insurance or agreements of indemnity or guaranty, issued
or entered into by such insolvent corporation, by publication of a
notice published at least twice a week, for three successive weeks,
immediately preceding the making of an application for a final settle-
ment of his accounts and for an order for the distribution of the assets
in his hands. Said notice shall state the fact that an application for a
final settlement of his accounts and for an order for the distribution
of the assets in hand will be made, and shall also state the time and
place, when and where the application will be made. Upon the hear-
ing of such application and motion, the court shall, unless objection
is made to the items of the account by a creditor or by a holder or
owner of a policy of insurance or agreement of indemnity or guaranty,
or on behalf of the attorney-general, examine and settle the said ac-
counts, and make an order for the settlement, adjustment and distribu-
tion of the assets in the hands of the receiver. Where objection is
made to the items of account, the court may refer the same to a referee
to éxamine and pass thereon. ‘This subdivision shall apply to all
receivers of moneyed corporations.

[Subd. 1, L. 1902, Ch. 60, § 8. Subd. 2, L. 1904, Ch. 754, §§ 2, 4.]

§ 159. Proceedings upon accounting. Upon any accounting by the
receiver, after the expiration of the time for creditors to present
claims, the court shall direct the receiver to immediately convert the
entire assets of the corporation in his hands into cash, in case any of
the assets have not been so converted, unless good and sufficient cause
to the contrary shall appear to the satisfaction of the court, such as to
authorize an order granting the receiver.additional time for that pur-
pose, and upon any such accounting the court shall direct the receiver
to distribute the assets of the corporation in his hands to the persons
entitled thereto, except so much thereof as may be necessary to be
retained for the purpose of administering the trust and making pay-
ment upon contested claims, and upon such claims as may thereafter
be presented and entitled to be paid. Whenever the attorney-general
shall apply for an order to show cause why an accounting should not
be had by a receiver by reason of his failure to so account within
twelve months after his appointment, and shall deem it advisable to
designate counsel to act on his behalf, the court may, upon the
accounting, make a reasonable allowance by way of counsel fee to
counsel so designated.

[First sentence L. 1902, Ch. 60, § 7. Second sentence L. 1902, Ch.
60, § 10.]

§ 160. Claims barred after distribution of assets by receiver.
Upon the granting of the application and the making of the order of
distribution, and the distribution of the assets in the hands of the
receiver, in the manner directed by the order of the court, all claims
of the creditors or of holders or owners of policies of insurance or
agreements of indemnity or guaranty, against such receiver, shall be
barred. This section shall apply to all receivers of moneyed corpora-
tions.

[L. 1904, Ch. 754, § 3.]
392 NEW YORK CORPORATIONS.

§ 161. Application of article. Except as provided in sections one
hundred and fifty-five, one hundred and fifty-eight, subdivision two,
and one hundred and sixty of this article, this article shall apply to
all actions for the appointment of receivers of moneyed corporations
brought by the attorney-general, and to all receivers of such corpora-
tions heretofore or hereafter appointed, and to the settlement and
adjustment of their accounts and distribution of assets in their hands,
and all proceedings with reference thereto hereafter to be taken, and
shall supersede and repeal all provisions of law inconsistent herewith,
so far as the same relate to actions for the sequestration, annulment,
or dissolution of moneyed corporations. As to all other corporations
and as to matters not affected by this article, provisions of law hereto-
fore existing shall remain in full force and effect.

[L. 1902, Ch. 60, § 9.]

ARTICLE o9.

PROCEEDINGS FOR VOLUNTARY DISSOLUTION OF COR-
PORATION.

SECTION 170. Petition for voluntary dissolution of corporation.
171. Directors or trustees may be required to petition.
172. Petition when directors or trustees do not agree.
173. Corporations excepted from two preceding sections.
174. Contents of petition.

175. Affidavit to be annexed to petition.

176. Presentation of petition.

177. Corporations without stockholders.

178. Action by court upon petition for dissolution.

179. Publication of order to show cause why corporation
should not be dissolved.

180. Service of order to show cause.

181. Entering and filing order and papers.

182. ‘Temporary receiver.

183. Application for appointment of receiver.

184. Injunction.

185. Referee.

186. Hearing.

187. Decision.

188. Use of original papers on hearing.

189. Amending papers.

190. Final order.

191. Permanent receiver.

192. Appoigtment of director, trustee or other officer or
stockholder as receiver.

193. Certain sales, transfers and judgments void.

194. Omission, defect or default of receiver.

195. Exception of certain corporations.

§ 170. Petition for voluntary dissolution of corporation. If a
majority of the directors, trustees, or other officers, having the man-
agement of the concerns of a corporation created by or under the laws
of the state, discover that the stock, effects, and other property thereof
are not sufficient to pay all just demands, for which it is liable, or to
GENERAL CORPORATION LAW. 303

afford a reasonable security to those who may deal with it; or if, for
any reason, they deem it beneficial to the interests of the stockholders
that the corporation should be dissolved, they may present a petition
to the supreme court praying for a final order dissolving the corpora-
tion, as prescribed in this article.

[Code Civil Procedure, § 2419.]

§ 171. Directors or trustees may be required to petition. It shall
be the duty of a majority of the directors or trustees of every corpora-
tion created by or under the laws of this state to present a petition
as prescribed in the last section whenever directed so to do by a major-
ity in interest of its stockholders.

[Code Civil Procedure, § 2420. For remainder of section see this
article, §§ 172, 173.]

§ 172. Petition when directors or trustees do not agree. If a cor-
poration, created under a general statute of the state for the formation
of corporations or under any special act or charter has an even number
of trustees or directors who are equally divided respecting the manage-
ment of its affairs, or if the stock of such corporation is equally
divided into not more than two independent ownerships or interests,
or if the entire stock of the corporation is, at that time, owned by the
trustees or directors who are even in number or equally divided repre-
senting the management of its affairs, or if the stock is so divided, that
one-half thereof is owned or controlled by persons favoring the course
of part of the trustees or directcrs and one-half thereof is owned by
persons favoring the course of the other trustees or directors, the
trustees or directors or the stockholders or one or more of them may
present a petition as prescribed in section one hundred and seventy
of this chapter.

[Code Civil Procedure, § 2420. For remainder of section see this
article, §§ 171, 173.]

§ 173. Corporations excepted from two preceding sections. Sec-
tions one hundred and seventy-one and one hundred and seventy-two of
this chapter do not apply to a savings bank, a trust company, a safe
deposit company, or a corporation formed to rent safes in burglar and
fire-proof vaults, or for the construction or operation of a railroad,
or for aiding in the construction thereof, or for carrying on the busi-
ness of banking or insurance, or intended to derive a profit from the
loan or use of money.

[Code Civil Procedure, § 2420. For remainder of section see this
article, §§ 171, 172.]

§ 174. Contents of petition. The petition must show that the
case is one of those specified in sections one hundred and seventy, one
hundred and seventy-one, one hundred and seventy-two and one hun-
dred and seventy-three of this chapter, and must state the reasons, which
induce the petitioner or petitioners to desire the dissolution of the
corporation. A schedule must be annexed to the petition, containing
the following matters, as far as the petition or petitioners know, or
have the means of knowing the same:

1. A full and true account of all the creditors of the corporation,
and of all unsatisfied engagements, entered into by, and subsisting
against, the corporation.
394 NEW YORK CORPORATIONS.

2. A statement of the name and place of residence of each cred-
itor, and of each person with whom such an engagement was made,
and to whom it is to be performed, if known; or, if either is not known,
a statement of that fact.

3. A statement of the sum owing to each creditor, or other per-
son specified in the last subdivision, and the nature of each debt,
demand, or other engagement. ‘

4. A statement of the true cause and consideration of the indebt-
edness to each creditor.

5s. A full, just, and true inventory of all the property of the
corporation, and of all the books, vouchers, and securities, relating
thereto.

6. A statement of each incumbrance upon the property of the
corporation, by judgment, mortgage, pledge, or otherwise.

7 A full, just, and true account of the capital stock of the cor-
poration, specifying the name of each stockholder; his residence, if
it is known, or if it is not known, stating that fact; the number of
shares belonging to him; the amount paid in upon his shares; and the
amount still due thereupon.

[Code Civil Procedure, § 2421.]

§ 175. Affidavit to be annexed to petition. An affidavit, made by
each of the petitioners, to the effect that the matters of fact, stated in
the petition and the schedule, are just and true, so far as the affiant
knows or has the means of knowing the same, must be annexed to the
petition and schedule.

[Code Civil Procedure, § 2422.]

§ 176. Presentation of petition, The papers must be presented
at a special term of the supreme court, held within the judicial district,
embracing the county wherein the principal office of the corporation is
located.

[Code Civil Procedure, § 2423. For remainder of section see this
article, §§ 178, 181, 182, 184.]

§ 177. Corporations without stockholders. In the case of corpor-
ations affected by the provisions of this article and not having stock-
holders, it shall be sufficient for the purposes of this article to notify,
name and refer to the “members” of such corporations, instead of
“stockholders,” as herein provided.

[Code Civil Procedure, § 2431. For remainder of section see this
article, § 195.]

§ 178. Action by court upon petition for dissolution. In a case
specified in sections one hundred and seventy-one, one hundred and
seventy-two and one hundred and seventy-three of this chapter the
court may, in its discretion, entertain or dismiss the application. Where
it entertains the aPplication, or where the cause is one of those speci-
fied in section one hundred and seventy of this chapter, the court must
make an order, requiring all persons interested in the corporation to
show cause before it, or before a referee designated in the order, at a
time and place therein specified, not less than six weeks after the
granting of the order, why the corporation should not be dissolved.

[Code Civil Procedure, § 2423. For remainder of section see this
article, §§ 176, 181, 182, 184.]

§ 179. Publication of order to show cause why corporation should
not be dissolved. A copy of the order must be published, as prescribed
GENERAL CORPORATION LAW. 395

therein, at least once in each of the three weeks immediately preceding
the time fixed therein for showing cause, in one or more newspapers,
specified in the order, published in the city or county wherein the order
is entered.

[Code Civil Procedure, § 2424.]

§ 180. Service of order to show cause. A copy of the order must
also be served upon each of the persons, specified in the schedule as a
creditor or stockholder of the corporation, or as a person to whom an
engagement of the corporation is to be performed, other than a person
whose residence is stated to be unknown, or to be without the United
States. The service must be made either personally, at least ten days
before the time appointed for the hearing; or by depositing a copy of
the order, at least twenty days before the time so appointed, in the
post-office, inclosed in a postpaid wrapper, addressed to the person to
be served, at his residence, as stated in the schedule.

[Code Civil Procedure, § 2425.]

§ 181. Entering and filing order and papers. The order must be
entered, and the papers must be filed, within ten days after the order
is made, with the clerk of the county where the principal office of the
corporation is located.

[Code Civil Procedure, § 2423. For remainder of section see this
article, §§ 176, 178, 182, 184.]

§ 182. Temporary receiver. If it shall be made to appear to the
satisfaction of the court that the corporation is insolvent, the court
may at any stage of the proceedings before the final order, on motion
of the petitioners on notice to the attorney-general, or on motion of
the attorney-general on notice to the corporation, appoint a temporary
receiver of the property of the corporation, which receiver shall have
all' the powers and be subject to all the duties that are defined as be-
longing to temporary receivers appointed in an action, in section one
hundred and four of this chapter. The court may also, in its discretion,
at any stage in the proceeding after the appointment of a temporary
receiver, upon like motion and notice, confer upon such temporary re-
ceiver the powers and authority, and subject him to the duties and
liabilities of a permanent receiver, or as much thereof as it thinks
proper, except that he shall not make any final distribution among the
creditors and stockholders, before final order in the proceedings, unless
he is specially directed so to do by the court.

[Code Civil Procedure, § 2423. For remainder of section see this
article, §§ 176, 178, 181, 184.]

§ 183. Application for appointment of receiver. Every application
made for the appointment of a receiver of a corporation other than
applications made by the attorney-general on behalf of the people of
the state, shall be made at a special term of the supreme court held
in and for the judicial district in which the principal business office of
the corporation is located.

[L. 1883, Ch. 378, § 1 pt., as amended by L. 1896, Ch. 282, § 1.]

§ 184. Injunction. If a temporary receiver be appointed, the court
may, in its discretion, on like motion and notice, with or without se-
curity, at any stage of the proceeding before the final order, grant an
injunction, restraining the creditors of the corporation, from beginning
any action against the said corporation for the recovery of a sum of
396 NEW YORK CORPORATIONS.

money, or from taking any further proceedings in such an action there-
tofore commenced. Such injunction shall have the same effect and be
subject to the same provisions of law as if each creditor upon whom
it is served was named therein.

[Code Civil Procedure, § 2423. For remainder of section see this
article, §§ 176, 178, 181, 182.] i

§ 185. Referee. If a referee was not designated in the order to
show cause, the court may, in its discretion, appoint a referee when
or after the order is returnable.

[Code Civil Procedure, § 2426. For remainder of section see this
article, §§ 186, 187.]

§ 186. Hearing. At the time and place specified in the order, or
at the time and place to which the hearing is adjourned, the court, or
the referee, must hear the allegations and proofs of the parties, and
determine the facts.

[Code Civil Procedure, § 2426. For remainder of section see this
article, §§ 185, 187.]

§ 187. Decision. The decision of the court, or the report of the
referee, must be in writing, and must be made and filed with all con-
venient speed. It must contain a statement of the effects, credits, and
other property, and of the debts and other engagements, of the cor-
poration, and of all other matters, pertaining to its affairs.

[Code Civil Procedure, § 2426. For remainder of section see this
article, §§ 185, 186.]

§ 188. Use of original papers on hearing. The court or the ref-
eree is entitled to use, upon the hearing, the original petition, and the
schedules annexed thereto; and the clerk must transmit them accord-
ingly, upon the written order of the judge, or of the referee. In that
case, they must be returned with the decision or report.

[Code Civil Procedure, § 2427. For remainder of section see this
article, § 180.]

§ 189. Amending papers. The court may, at any stage of the
proceedings before final order, on the application of the petitioners, or
a majority of them, or on the application of the temporary receiver,
grant an order amending the schedules annexed to the original peti-
tion, by the insertion of additional items, or by making the statements
or inventory fuller and in greater detail than as originally filed, with
the like effect as though said petition and schedules had been originally
presented and filed as amended.

[Code Civil Procedure, § 2427. For remainder of section see this
article, § 188.]

§ 190. Final order, Where the hearing is before a referee, a mo-
tion for a final order must be made to the court, upon notice to each
person who has made himself a party to the proceedings, by filing with
the clerk, before the close of the hearing, a notice of his appearance,
in person or by attorney, specifying a post-office within the state,
where such a notice may be served. The notice may be served as pre-
scribed in the code of civil procedure for the service of a paper upon
an attorney in an action. Where the hearing was before the court, a
motion for a final order may be made immediately, or at such a time
and upon such a notice, as the court prescribes.

[Code Civil Procedure, § 2428.]
GENERAL CORPORATION LAW. 397

§ 191. Permanent receiver. Upon an application for a final order,
if it appear to the court in a case specified in section one hundred and
seventy of this chapter that the corporation is insolvent, or, in a case
specified either in that section, or in section one hundred and seventy-
one, one hundred and seventy-two and one hundred and seventy-three
of this chapter, that for any reason a dissolution of the corporation
will be beneficial to the interests of the stockholders and not injurious
to the public interests, the court must make a final order dissolving
the corporation, and appointing one or more receivers of its property.
But in the case of a solvent corporation, the court may, if there is no
objection by creditors, dispense with a receiver and provide in the
final order for the distribution of the assets. Upon the entry of the
order the corporation is dissolved. A receiver appointed under this
section shall have all the powers, duties and liabilities of receivers
under article eleven of this chapter.

[Code Civil Procedure, § 2429. For remainder of section see this
article, §§ 192, 194.]

§ 192. Appointment of director, trustee or other officer or stock-
holder as receiver. The court may, in its discretion, appoint a director,
trustee, or other officer, or a stockholder of the corporation, a re-
ceiver of its property.

[Code Civil Procedure, § 2429. For remainder of section see this
article, §§ 191, 194.]

§ 193. Certain sales, transfers and judgments void. A sale, as-
signment, mortgage, conveyance, or other transfer, of any property of
a corporation, made after the filing of a petition as prescribed in this
article, in payment of, or as security for, an existing or prior debt, or
for any other consideration; or a judgment thereafter rendered against
the corporation by confession, or upon the acceptance of an offer, is
absolutely void, as against the receiver appointed in the special pro-
ceeding, and as against the creditors of the corporation.

[Code Civil Procedure, § 2430.]

§ 194. Omission, defect or default of receiver. In a proceeding
for the voluntary dissolution of a corporation, the court may, in the
furtherance of justice, upon notice to the attorney-general, and the
attorney-general not objecting, and upon such further notice to cred-
itors or others interested as the court shall direct, which notice may
be made by mail upon all persons and corporations not residing or
existing within the state, relieve a receiver from any omission, defect
or default, in any proceeding or act required by law to be taken or
done, or in the giving of any notice required by law to be given, and
the court may upon like notice, confirm any act of a receiver, and
any decision, report, order or judgment made in such proceeding.

[Code Civil Procedure, § 2429. For remainder of section. see this
article, §§ 191, 192.]

§ 195. Exception of certain corporations, This article does not
apply to an incorporated library society, to a religious corporation,
or to a select school or academy, incorporated by the regents of the
university or by the legislature, or to a municipal or other political
corporation.

[Code Civil Procedure, § 2431. For remainder of section see this
article, § 177.]
398 NEW YORK CORPORATIONS.

ARTICLE to.

DISSOLUTION OF STOCK CORPORATION WITHOUT
JUDICIAL PROCEEDINGS.

SECTION 220. Dissolution of stock corporation before beginning
business.

221. Dissolution of stock corporation before expiration of
time limit.

§ 220. Dissolution of stock corporation before beginning busi-
ness. The incorporators named in any certificate of incorporation
filed for the purpose of creating a domestic stock corporation, other
than a moneyed or transportation corporation, may, before the pay-
ment of any part of the capital, and before beginning business, sur-
render all corporate rights and franchises, by signing, verifying and
filing in the office of the secretary of state and the clerk of the county
where the certificate of incorporation is filed, a certificate setting forth
the names of the incorporators, that no part of the capital has been
paid, that there are no liabilities, that such business has not been
begun, and surrendering all rights and franchises; and proof of the
facts set forth in such certificate to the satisfaction of the secretary
of state; and thereupon the said corporation shall be dissolved, and
its corporate existence and power shall cease. In case any incor-
porator of such a corporation shall be deceased, then the aforesaid
certificate may be made by the surviving incorporators providing two
years shall have elapsed since the date of its incorporation, but in
such case the certificate shall set forth the fact that one or more of
said incorporators is deceased.

[Stock Corporation Law, § 61, as added by L. 1904, Ch. 296, § 1,
and amended by L. 1908, Ch. 457, § 1.]

§ 221. Dissolution of stock corporation before expiration of time
limit. Any stock corporation, except a moneyed or a railroad cor-
poration, may be dissolved before the expiration of the time limited
in its certificate of incorporation or in its charter as follows:

1. The board of directors of any such corporation may at a
meeting called for that purpose, upon at least three days’ notice
to each director, by a vote of a majority of the whole board, adopt
a resolution that it is in their opinion advisable to dissolve such
corporation forthwith, and thereupon shall call a meeting of the stock-
holders for the purpose of voting upon a proposition that such
corporation be forthwith dissolved. Such meeting of the stockholders
shall be held not less than thirty nor more than sixty days after the
adoption of such resolution, and the notice of the time and place of
such meeting so galled by the directors shall be published in one or
more newspapers published and circulating in the county wherein
such corporation has its principal office, at least once a week for three
weeks successively next preceding the time appointed for holding
such meeting, and on or before the day of the first publication of such
notice, a copy thereof shall be served personally on each stockholder,
or mailed to him at his last known post-office address. Such meeting
shall be held in the city, town or village in which the last preceding
annual meeting of the corporation was held, and said meeting may,
on the day so appointed, by the consent of a majority in interest of
the stockholders present, be adjourned from time to time, and notice
GENERAL CORPORATION LAW. 399

of such adjournment shall be published in the newspapers in which
the notice of the meeting is published. If at any such meeting the
holders of two-thirds in amount of the stock of the corporation, then
outstanding, shall, in person or by attorney, consent that such disso-
lution shall take place and signify such consent, in writing, then such
corporation shall file such consent, attested by its secretary or treas-
urer, and-its president or vice-president, together with the powers of
attorney signed by such stockholders executing such consent by
attorney, with a statement of the names and residences of the then
existing board of directors of said corporation, and the names and
residences of its officers duly verified by the secretary or treasurer or
president of said corporation, in the office of the secretary of state.

-2. The secretary of state shall thereupon issue to such corpora-
tion, in duplicate, a certificate of the filing of such papers and that
it appears therefrom that such corporation has complied with this
section in order to be dissolved, and one of such duplicate certificates
shall be filed by such corporation in the office of the clerk of the
county in which such corporation has its principal office; and there-
upon such corporation shall be dissolved and shall cease to carry on
business, except for the purpose of adjusting and winding up its
business. The board of directors shall cause a copy of such certificate
to be published at least once a week for two weeks in one or more
newspapers published and circulating in the county in: which the prin-
cipal office of such corporation is located, and at the expiration of
such publication, the said corporation by its board of directors shall
proceed to adjust and wind up its business and affairs with power to
carry out its contracts and to sell its assets at public or private sale,
and to apply the same in discharge of debts and obligations of such
corporation, and, after paying and adequately providing for the pay-
ment of such debts and obligations, to distribute the balance of assets
among the stockholders of said corporation, according to their
respective rights and interests.

3. Said corporation shall nevertheless continue in existence for
the purpose of paying, satisfying and discharging any existing debts
or obligations, collecting and distributing its assets and doing all other
acts required in order to adjust and wind up its business and affairs,
and may sue and be sued for the purpose of enforcing such debts or
obligations, until its business and affairs are fully adjusted and
wound up.

4. After paying or adequately providing for the debts and obliga-
tions of the corporation the directors may, with the written consent
of the holders of two-thirds in amount of the capital stock, sell the
remaining assets or any part thereof to a corporation organized under
the laws of this or any other state, and engaged in a business of
the same general character, and take in payment therefor the stock
or bonds of both of such corporation and distribute them among the
stockholders, in lieu of money, in proportion to their interest therein,
but no such sale shall be valid as against any stockholder, who,
within sixty days after the mailing of notice to him of such sale,
shall apply to the supreme court in the manner provided by section
seventeen of the stock corporation law, for an appraisal of the value
400 NEW YORK CORPORATIONS.

of his interest in the assets so sold; unless within thirty days after
such appraisal the stockholders consenting to such sale, or some of
them, shall pay to such objecting stockholder or deposit for his account,
in the manner directed by the court, the amount of such appraisal
and upon such payment or deposit the interest of such objecting
stockholder shall vest in the person or persons making such payment
or deposit.

[Stock Corporation Law, § 57, as added by L,. 1896, Ch. 932, § 1,
and amended by L. 1900, Ch. 760, § 1.]

ARTICLE 11.

POWERS, DUTIES AND LIABILITIES OF RECEIVERS OF
CORPORATION.

Section 230. Application of this article.

231. Receiver trustee of property.

232. Receiver’s title to property.

233. Transfer of assets of corporation to receiver.

234. Security of receiver.

235. Authority of single receiver.

236. Authority where there is more than one receiver.

237. Surviving receivers.

238. Oath of receiver.

239. General powers of receivers.

240. Power of receiver to institute proceedings to recover
assets.

241. Power of receiver in the settlement of controversies.

242. Power of receiver to employ counsel.

243. Power of receiver to hold real property.

244. Power of receiver to recover stock subscriptions.

245. Duty of receiver to convert assets into money.

246. Duty of receiver as to private sales.

247. Duty of receiver to keep accounts.

248. Duty of receiver to serve copy of report upon attorney-
general and superintendent of banks.

249. Duty of certain receivers to make reports.

250. Duty of receivers to give notice to creditors.

251. Delivery of property and payment of debts to receiver
after notice,

252. Penalty for concealing property from receiver.

253. Duty of receiver to call creditors’ meeting.

254. Proceedings at creditors’ meeting.

255. Deystion, of disbursements and commissions by receiver.

256. Reftinding consideration of subsisting contracts.

257. Retention of funds for subsisting contracts and pending
suits.

258. Payment of debts not due.

259. Allowance of set-offs.

260. Penalties recovered by receiver.

261. Order of payment by receiver.

262. Failure to file claim before first dividend.

263. Second dividend by receiver.

264. Surplus to stockholders.
GENERAL CORPORATION LAW. 401

SEcTIoN 265. Disposition of moneys retained by receiver for suits.

266. Duty of receiver as to unclaimed dividend.

267. Effect of failure to file claim before second dividend.

268. Final accounting by receiver.

269. Notice of final accounting.

270. Hearing on final accounting.

271. Reference of final account.

272, Further accounting.

273. Removal of receiver.

274. Vacancy.

275. Renunciation by receiver.

276. Control of receiver by court.

277. Commissions and expenses of receiver in voluntary
dissolution.

278. Commissions and expenses of receiver except in volun-
tary dissolution.

§ 230. Application of this article. Unless otherwise provided
the provisions of this article shall apply only to permanent receivers
appointed pursuant to section one hundred and six or section one
hundred and ninety-one of this chapter.

[New.]

§ 231. Receiver trustee of property. Permanent receivers shall
be trustees of the property for the benefit of the creditors of the
corporation and of its stockholders.

[R. S., Pt. 3, Ch. 8, Tit. 4, Art. 3, § 67, pt.]

§ 232. Receiver’s title to property. Such receivers shall be vested
with all the property, real and personal, of the corporation, from the
time of their having filed the security hereinbefore required.

[R. S., Pt. 3, Ch. 8, Tit. 4, Art. 3, § 67, pt.]

§ 233. Transfer of assets of corporation to receiver. In all
cases where receivers have been or shall be appointed for any corpora-
tion of this state other than an insurance company on application by
the attorney-general, all property, real and personal, and all securities
of every kind and nature belonging to such corporation, no matter
where located or by whom held, shall be transferred to, vested in
and held by such receiver; provided, however, that such transfer shall
only be made when ‘directed by an order of the supreme court, due
notice of the application for such order having been made on the

attorney-general and the custodian of the funds, securities or property.
[L. 1884, Ch. 285, § 1.]

§ 234. Security of receiver. Before entering upon the duties of
their appointment, such receivers shall give such security to the people
of the state, and in such penalty, as the court shall direct, conditioned
for the faithful discharge of the duties of their appointment, and for
the due accounting for all moneys received by them.

[R. S., Pt. 3, Ch. 8, Tit. 4, Art. 3, § 66, pt.]

§ 235. Authority of single receiver. When one receiver only,
shall be appointed, all the provisions herein contained, in reference
to several receivers shall apply to him.

[R. S., Pt. 2, Ch. 5, Tit. 1, Art. 8, § 2.]
402 NEW YORK CORPORATIONS.

§ 236. Authority where there is more than one receiver. When
there are more receivers than one appointed, the debts and property
of the corporation may be collected and received by any one of them;
and when there are more than two receivers appointed, every power
and authority conferred on the receivers may be exercised by any
two of them.

[R. S. Pt. 2, Ch. 5, Tit. 1, Art. 8, § 3.]

§ 237. Surviving receivers. The survivor or survivors of any
receivers shall have all the powers and rights given to receivers. All
property in the hands of any receiver at the time of his death, re-
moval or incapacity, shall be delivered to the remaining receiver or
receivers, if there be any; or to the successor of the one so dying,
removed or incapacitated; who may demand and sue for the same.

[R. S., Pt. 2, Ch. s, Tit. 1, Art. 8 § 4.]

§ 238. Oath of receiver. Before proceeding to the discharge of
any of their duties, all such receivers shall take and subscribe an oath,
that they will well and truly execute the trust by their appointment
reposed in them, according to the best of their skill and understanding;
which oath shall be filed with the officer or court, that appointed them.

[R. S., Pt. 2, Ch. 5, Tit. 1, Art. 8, § 5.]

§ 239. General powers of receivers. The said receivers shall have
power: ;

1. To sue in their own names or otherwise, and recover all the
property, debts and things in action, belonging or due to such cor-
poration in the same manner and with the like effect as such corpora-
tion might or could have done if no receivers had been appointed;
and no set-off shall be allowed in any such suit, for any debt, unless
it was owing to such creditor, by such corporation before the appoint-
ment of the receiver of such corporation; notwithstanding the notice
to creditors the receivers may sue for and recover, any property or
effects of the corporation and any debts due to it, at any time, before
the day appointed for the delivery or payment thereof;

2. To take into their hands, all the property of such corporation,
whether attached, or delivered to them, or afterwards discovered; and
all books, vouchers and securities relating to the same;

3. In the case of a non-resident, absconding or concealed debtor,
to demand and receive of every sheriff who shall have attached any
of the property of such debtor, or who shall have in his hands, any
moneys arising from the sale of such property, all such property and
moneys, on paying him his reasonable costs and charges, for attach-
ing and keeping the same, to be allowed by the court having jurisdic-
tion; e

4. From time to time, to sell at public auction, all the property,
real and personal, vested in them, which shall come to their hands,
after giving at least fourteen days’ public notice of the time and place
of sale, and also publishing the same for two weeks in a newspaper,
printed in the county, where the sale shall be made, if there be one;

To allow such credit on the sale of real property by them, as
they shall deem reasonable, subject to the provisions of this article
for not more than three-fourths of the purchase money; which credit
shall be secured by a bond of the purchaser, and a mortgage on the
property sold;
GENERAL CORPORATION LAW. 403

; . On such sales, to execute the necessary conveyances and bills
of sale;

7. To redeem all mortgages and conditional contracts and all
pledges of personal property, and to satisfy any judgments, which may
be an incumbrance on any property so sold by them; or to sell such
property subject to such mortgages, contracts, pledges or judgments;

8. To settle all matters and accounts between such corporation
and its debtors, or creditors, and to examine any person touching such
matters and accounts, on oath, to be administered by either of them;

9. Under the order of the court appointing them, to compound
with any person indebted to such corporation and thereupon to dis-
charge all demands against such person.

[R. S., Pt. 2, Ch. 5, Tit. 1, Art. 8, § 7, except last clause of f 1,
beginning “Notwithstanding, etc.” from R. S., Pt. 2, Ch. 5, Tit. 1,
Art. 8, § 10.]

§ 240. Power of receiver to institute proceedings to recover
assets. Whenever any receiver of a domestic corporation, or of the
property within this state of any foreign corporation, shall have been
appointed and qualified, as provided in articles five, six, seven, nine,
eleven or twelve of this chapter either before, upon, or after final
judgment or order in the action or special proceeding in which such
appointment was made, and shall, by his own verified petition, affidavit
or other competent proof, show to the supreme court, at a special
term thereof, held within the judicial district wherein such appoint-
ment was made, that he has good reason to believe that any officer,
stockholder, agent or employee of such corporation, or any other
person whomsoever, has embezzled or concealed, or withholds or has
in his possession or under his control, or has wrongfully disposed of,
any property of such corporation which of right ought to be sur-
rendered to the receiver thereof; or that any person can testify
concerning the embezzlement, concealment, withholding, possession,
control or wrongful disposition of any such property, the court shall
make an order, with or without notice, commanding such person or
persons to appear at a time and place to be designated in the order,
before the court or before a referee named by the court for that
purpose, and to submit to an examination concerning such embezzle-
ment, concealment, withholding, possession, control or wrongful dis-
position of such property; and at the time of making such order or at
any time thereafter, the court may, in its discretion, enjoin and re-
strain the person or persons so ordered to appear and be examined
from in any manner disposing of any property of such corporation
which may be in the possession or under the control of the person
so ordered to be examined, until the further order of the court in
relation thereto. No person so ordered to appear and be examined
shall be excused from answering any question on the ground that his
answer might tend to convict him of a criminal offense; but his testi-
mony taken upon such examination shall not be used against him in
any criminal action or proceeding.

Any person so ordered to appear and be examined shall be
entitled to the same fees and mileage, to be paid at the time of serv-
ing the order, as are allowed by law to witnesses subpoenaed to attend
and testify in an action in the supreme court, and shall be subject
to the same penalties upon failure to appear and testify in obedience
to such an order as are provided by law in the case of witnesses who
fail to obey a subpoena to appear and testify in an action.
404. NEW YORK CORPORATIONS,

Any person appearing for examination in obedience to such
order shall be sworn by the court or referee to tell the truth, and shall
be entitled to be represented on such examination by counsel, and
may be cross-examined, or may make any voluntary statement in his
own behalf concerning the subject of his examination which may seem
to him desirable or pertinent thereto.

The court before which such examination is taken, as well as the
referee, if one be appointed for that purpose, shall have power to
adjourn such examination from time to time, and may rule upon any
question or objection arising in the course of such examination, to
the same extent that might be done if the person so examined were
testifying as a witness in the trial of an action.

When the examination of any person under such order shall be
concluded, the testimony shall be signed and sworn to by the person
so examined, and shall be filed in the office of the clerk of the county
where the action is pending, or was tried, in which the receiver was
appointed; and if from such testimony it shall appear to the satisfaction
of the court that any person so examined is wrongfully concealing or
withholding, or has in his possession or under his control, any prop-
erty which of right belongs to such receiver, the court may make an
order commanding the person so examined forthwith to deliver the
same to such receiver, who shall hold the same subject to the further
order of the court in relation thereto; and otherwise, the court may,
at the conclusion of any such examination, make such final order in
the premises as the interests of justice require.

[L. 1898, Ch. 534, §§ 1-5.]

§ 241. Power of receiver in the settlement of controversies. If
any controversy shall arise between the receivers and any other per-
son, in the settlement of any demands against such corporation, or of
debts due to such corporation the same may be referred to one or
more indifferent persons, who may be agreed upon by the receivers
and the party, with whom such controversy shall exist, by a writing
to that effect, signed by them.

If such referee or referees be not selected by agreement, then the
receivers or the other party to the controversy, provided no action at
law is pending arising out of any such debts or demands, may serve a
notice of their intention to apply to any judge of the supreme court
at chambers, residing in the same district with said receivers, for the
appointment of one or more referees, specifying the time and place
when such application will be made, which notice shall be served at
least ten days before the time so therein specified.

On the day so specified, upon due proof of the service of such
notice, the judge before whom the application is made may, in his
discretion, proceed to select one or more referees, the same in all
respects as they are now selected according to the rules and practice
of the supreme court.

When any witness to such controversy shall reside out of the
county where the said receivers resided at the time of their appoint-
ment, the referee or referees appointed to hear said controversy shall!
have power to issue a commission or commissions in like manner as
justices of the peace are now authorized to issue the same, and the
testimony so taken shall be returned to said referee or referees in the
same manner, and be read beforé them on a hearing, in like manner as
testimony taken on commission before justices of the peace.

The officer before whom they shall be selected, shall certify such
selection in writing. Such certificate, or the written agreement of the
GENERAL CORPORATION LAW. 405

parties, shall be filed by the receivers in the office of a clerk of the
supreme court, and an order shall thereupon be entered by such clerk
in vacation or in term, appointing the persons so selected to determine
the controversy.

Such referees shall have the same powers, and be subject to the
like duties and obligations, and shall receive the same compensation,
as referees appointed by the supreme court, in personal actions pend-
ing therein.

The report of the referees shall be filed in the same office where
the order for their appointment was entered, and shall be conclusive
on the rights of the parties, if not set aside by the court.

[R. S., Pt. 2, Ch. 5, Tit. 1, Art. 8, 8§ 19-25. Sections 19, 22, as
amended by L. 1862, Ch. 373, §§ 1, 4. Sections 20, 21, as amended by
L. 1907, Ch. 476, § 1.]

§ 242. Power of receiver to employ counsel. If the receiver of a
corporation employs counsel he shall within three months after he has
qualified as receiver enter into a written contract fixing the compensa-
tion of such counsel at not exceeding a certain amount or a certain
percentage of the sums received and disbursed by him, which contract
must be approved by the supreme court, on at least eight days’ notice
to the attorney-general. A payment by such receiver to his counsel on
account of services shall only be made, pursuant to an order of the
court, on notice to the attorney-general and subject to review on the
final accounting. A contract with counsel shall not be made for a
longer period than eighteen months, but may be renewed from time to
time for periods of not more than one year, if approved by the supreme
court on at least eight days’ notice to the attorney-general. In case of
the intervention of any policy-holder or depositor, by permission of
the court, such policy-holder or depositor shall defray the legal ex-
penses thereof, and no allowance shall be made for costs or fees to any
attorney of such policy-holder or depositor. It shall be unlawful for
receivers of an insurance, banking or railroad corporation, or trust
company to pay to any attorney or counsel any costs, fees or allow-
ances until the amounts thereof shall have been stated to the special
term as provided in section two hundred and forty-nine of this chap-
ter, as expenses incurred, and shall have been approved by that court,
by an order of the court duly entered; and any such order shall be
the subject of review by the appellate division and the court of appeals
on an appeal taken therefrom by any party aggrieved thereby.

[“If the receiver” to “in case of the intervention,” L. 1883, Ch.
378, § 2a, added by L. 1906, Ch. 349, § 2. Sentence beginning “In case
of the intervention,” L. 1883, Ch. 378, § 5. Remainder of section, L.
1883, Ch. 378, § 4 pt., as amended by L. 1896, Ch. 139, § 1.]

§ 243. Power of receiver to hold real property. A_ receiver,
appointed by or pursuant to an order or a judgment, in an action in
the supreme court or a county court, or in a special proceeding for the
voluntary dissolution of a corporation, may take and hold real prop-
erty, upon such trusts and for such purposes as the court directs.
subject to the direction of the court, from time to time, respecting the
disposition thereof.

[Code Civil Procedure, § 716. For remainder of section see Code
Civil Procedure, § 716.]

§ 244. Power of receiver to recover stock subscriptions. If there
shall be any sum remaining due upon any share of stock subscribed in
406 NEW YORK CORPORATIONS.

such corporation, the receiver shall immediately proceed to recover
the same, unless the person so indebted shall be wholly insolvent; and
for that purpose may commence and prosecute any action or proceed-
ing for the recovery of such sum, without the consent of any creditors
of such corporation.

[R. S., Pt. 3, Ch. 8, Tit, 4, Art. 3, § 69.]

§ 245. Duty of receiver to convert assets into money. The
receivers shall, as speedily as possible, convert the property, real and
personal, of the corporation into money.

[R. S. Pt. 2, Ch. 5, Tit. 1, Art. 8, § 26 pt.]

§ 246. Duty of receiver as to private sales. A receiver duly
appointed in this state by and pursuant to a judgment in an action, or
by and pursuant to an order in a special proceeding, may, upon applica-
tion to the court by which such judgment was rendered, or such order
was made, and upon notice to such parties as may be entitled to notice
of applications made in such action or special proceeding, be author-
ized by the said court to sell or convey the property, whether real or
personal, of the corporation of which he is the receiver, at private sale,
upon such terms and conditions as the court may direct.

[L. 1898, Ch. 522, § 1.]

§ 247. Duty of receiver to keep accounts. They shall keep a
regular account of all moneys received by them as receivers; to which,
every creditor, or other person interested therein, shall be at liberty,
at all reasonable times, to have recourse.

[R. S. Pt. 2, Ch. 5, Tit. 1, Art, 8, § 26 pt.]

§ 248. Duty of receiver to serve copy of report upon attorney-
general and superintendent of banks. All receivers of insolvent cor-
porations who are required by law to make and file reports of their
proceedings shall at the time of making and filing such reports, serve
a copy thereof upon the attorney-general of this state, and receivers
of such corporations as report to, and are under the supervision of,
the banking department shall on the first day of January and July of
each year, during the continuance of their respective trusts, file with
the superintendent of banks a report, verified by oath, in such form as
the superintendent may prescribe, showing the condition of their re-
spective trusts. In case any receiver of an insolvent corporation shall
neglect to make and file a report of his proceedings for thirty days
after the time he is required by law to make and file such report, or
shall neglect for the same length of time to serve a copy thereof on
the attorney-general, as required by this section the attorney-general
may make a motion in the supreme court for an order to compel the
making and filing and serving a copy on him of such report, or for the
removal of such receiver from his office.

[L. 1880, Ch. 537, § 1, as amended by L. 1881, Ch. 630, § 1, Last
sentence, L. 1880, Ch. 537, § 2.]

§ 249. Duty of certain receivers to make reports. It shall be the
duty of every receiver of an insurance, banking or railroad corporation,
or trust company, to present every six months to the special term of
the supreme court, held in the judicial district wherein the place of
trial or venue of the action or special proceeding in which he was
appointed may then be, on the first day of its first sitting, after the
GENERAL CORPORATION LAW. 407

expiration of such six months, and to file a copy of the same, if a
receiver of a bank or trust company, with the superintendent of banks;
if a receiver of an insurance company, with the superintendent of
insurance; and in each case with the attorney-general, an account
exhibiting in detail the receipts of his trust, and the expenses paid and
incurred therein during the preceding six months. Of the intention to
present such account, as aforesaid, the attorney-general, and also the
surety or sureties on the official bond of such receiver, shall be given
eight days’ notice in writing; and the attorney-general shall examine
the books and accounts of such receiver at least once every twelve
months.

[L. 1883, Ch. 378, § 4, pt., as amended by L,. 1885, Ch. 40, § 1, and
L. 1896, Ch. 139, § 1.]

§ 250. Duty of receivers to give notice to creditors. The re-
ceivers immediately upon their appointment shall give notice thereof
which shall be published for three weeks in a newspaper printed in
the county where the principal place of conducting the business of
such corporation shall have been situated; and therein shall require,

1. All persons indebted to such corporation, by a day and ata
place therein to be specified, to render an account of all debts and
sums of money owing by them respectively, to such receivers and
to pay the same.

2. All persons having in their possession any property or effects
of such corporation to deliver the same to the said receivers by the
day so appointed.

3. All the creditors of such corporation to deliver their respective
accounts and demands to the receivers or one of them, by a day to
be therein specified, not less than forty days from the first publica-
tion of such notice.

4. All persons holding any open or subsisting contract of such
corporation, to present the same in writing and in detail to such
receivers, at the time and place in such notice specified.

[Paragraphs 1-3, R. S. Pt. 2, Ch. 5, Tit. 1, Art. 8, § 8. Paragraph
4R.S. Pt. 3, Ch. 8, Tit. 4, Art. 3, § 70.]

§ 251. Delivery of property and payment of debts to receiver
after notice. After the first publication of the notice of the appoint-
ment of receivers, every person having possession of any property
belonging to such corporation, and every person indebted to such
corporation, shall account and answer for the amount of such debt and
for the value of such property to the said receivers.

[R. S., Pt. 3, Ch. 8, Tit. 4, Art. 3, § 72 pt.]

§ 252. Penalty for concealing property from receiver. Every
person indebted to such corporation, or having the possession or
custody of any property or thing in action, belonging to it, who shall
conceal the same, and not deliver a just and true account of such
indebtedness, or not deliver such property or thing in action, to the
receivers, or one of them, by the day for that purpose appointed,
shall forfeit double the amount of such debt, or double the value of
such property so concealed; which penalties may be recovered by the
receivers.

[R. S., Pt. 2, Ch. 5, Tit. 1, Art. 8, § 11.]

§ 253. Duty of receiver to call creditors’ meeting. They shall
call a general meeting of the creditors of such corporation, within four
408 NEW YORK CORPORATIONS.

months from the time of their appointment by a notice to be pub-
lished in the same manner, as hereinbefore directed respecting the
publication of the notice of their appointment; in which notice, they
shall specify the place and time of such meeting, which time shall
not be more than three months, nor less than two months after the
first publication of such notice. Every such notice shall be published
at least once in each week, until the time of such meeting.

[First clause to “time of their appointment,” R. S., Pt. 3, Ch. 8,
Tit. 4, Art. 3, § 74, pt.; from “by a notice” to “of such meeting” R. S.
Pt, 2, Ch. 5, Tit. 1, Art. 8, § 27.]

§ 254. Proceedings at creditors’ meeting.. At such meeting, or
other adjourned meeting thereafter, all accounts and demands for
and against such corporation, and all its open and subsisting contracts,
shall be ascertained and adjusted as far as may be, and the amount
of moneys in the hands of the receivers declared.

[“At such meeting” to “thereafter” R. S., Pt. 2, Ch. 5, Tit. 1,
Art. 8, § 28, pt.; remainder of section R. S., Pt. 3, Ch. 8, Tit. 4, Art. 3,

§ 74, pt.]

§ 255. Deduction of disbursements and commissions by receiver.
Out of the moneys in their hands the receivers may first deduct all
the necessary disbursements made by them in the discharge of their
duty and such commissions as may be allowed by law.

[R. S., Pt. 2, Ch. 5, Tit. 1, Art. 8, § 20.]

§ 256. Refunding consideration of subsisting contracts. If there
shall be any open and subsisting engagements or contracts of such
corporation, which are in the nature of insurances or contingent en-
gagements of any kind, the receivers may, with the consent of the
party holding such engagement, cancel and discharge the same, by
refunding to such party the premium or consideration paid thereon
by such corporation, or so much thereof as shall be in the same pro-
portion to the time which shall remain of any risk assumed by such
engagement, as the whole premium bore to the whole term of such
risk; and upon such amount being paid by such receivers to the person
holding or being the legal owner of such engagement, it shall be
deemed canceled and discharged as against such receivers.

[R. S., Pt. 3, Ch. 8, Tit. 4, Art. 3, § 75.]

§ 257. Retention of funds for subsisting contracts and pending
suits. The receivers shall retain out of the moneys in their hands, a
sufficient amount to pay the sums, which they are hereinbefore
authorized to pay, for the purpose of canceling and discharging any
open or subsisting engagements. If any suit be pending against the
corporation or aginst the receivers, for any demand, the receivers
may retain the proportion which would belong to such demand if
established, and the necessary costs and proceedings, in their hands,
to be applied according to the event of such suit, or to be distributed
in a second or other dividend.

[R. S., Pt. 3, Ch. 8, Tit. 4, Art. 3, §§ 77, 78.]

§ 258. Payment of debts not due. Every person to whom a cor-
poration shall be indebted on a valuable consideration, for any sum
of money not due at the time of such distribution, but payable after-
wards, shall receive his proportion with other creditors, after deducting
GENERAL CORPORATION LAW. 409

a rebate of legal interest upon the sum distributed, for the time unex-
pired of such credit.
[R. S., Pt. 2, Ch. 5, Tit. 1, Art. 8, § 35.]

§ 259. Allowance of set-offs. Where mutual credit has been given
by any corporation, and any other person, or mutual debts have sub-
sisted between such corporation and any other person, the receivers
may set off such credits or debts, and pay the proportion or receive
the balance due. But no set-off shall be allowed of any claim or
debt, which would not have been entitled to a dividend, as hereinbe-
fore directed.

No set-off shall be allowed by such receivers, of any claim or debt,
which shall have been purchased by, or transferred to, the person
claiming its allowance, which could not have been set off by him, in
a suit brought by such receivers.

[First paragraph, R. S., Pt. 2, Ch. 5, Tit. 1, Art. 8, § 36. Second
paragraph, R. S., Pt. 2, Ch. 5, Tit. 1, Art. 8, § 37.]

§ 260. Penalties recovered by receiver. All penalties which shall
be recovered by any receivers, pursuant to the provisions of this
article, shall be deemed a part of the property of the corporation, and
shall be distributed as such among its creditors.

[R. S., Pt. 2, Ch. 5, Tit. 1, Art. 8, § 30.]

§ 261. Order of payment by receiver. The receiver shall dis-
tribute the residue of the moneys in their hands, among all those
who shall have exhibited their claims as creditors, and whose debts
shall have been ascertained, as follows:

1. All debts due by such corporation to the United States, and
all debts entitled to a preference under the laws of the United States.

2. All debts that may be owing by the corporation as guardian,
executor, administrator or trustee; and if there be not sufficient to pay
all debts of the character above specified, then a distribution shall be
made among them, in proportion to their amounts respectively.

3. Judgments actually obtained against such corporation, to the
extent of the value of the real estate on which they shall respectively
be liens.

4. All other creditors of such corporation, in proportion to their
respective demands, without giving any preference to debts due on
specialties.

[First clause to colon (:), R. S. Pt. 3, Ch. 8, Tit. 4, Art. 3, § 79,
pt.; subd. 1, “all debts due by such corporation to the United States
and,” R. S., Pt. 2, Ch. 5, Tit. 1, Art. 8, § 32; subd. 1, “all debts entitled
to a preference under the laws of the United States,” R. S., Pt. 3,
Ch. 8, Tit. 4, Art. 3, § 70, pt.; subd. 2, R. S., Pt. 2, Ch. 5, Tit. 1, Art. 8,
§ 34; subds. 3 and 4, R. S., Pt. 3, Ch. 8, Tit. 4, Art. 3, § 70, pt.]

§ 262. Failure to file claim before first dividend. Every creditor
who shall have neglected to exhibit his demand before the first divi-
dend, and who shall deliver his account to the receivers before the
second dividend, shall receive the sum he would have been entitled
to on the first dividend, before any distribution be made to the other
creditors.

[R. S., Pt. 3, Ch. 8, Tit. 4, Art. 3, § 81, pt.]

§ 263. Second dividend by receiver. If the whole of the prop-
erty of such corporation be not distributed on the first dividend, the
410 NEW YORK CORPORATIONS.

receivers shall, within one year thereafter, make a second dividend of
all the moneys in their hands, among the creditors entitled thereto; of
which, and that the same will be a final dividend, three weeks’ notice
shall be inserted once in each week in a newspaper printed in the
county where the principal place of business of such corporation was
situated. a

Such second dividend shall be made in all respects in the same
manner as herein prescribed in relation to the first dividend, and no
other shall be made thereafter among the creditors of such corpora-
tion, except to the creditors having suits against it, or against the
receivers, pending at the time of such second dividend, and except of the
mieneye which may be retained to pay such creditors, as herein pro-
vided.

[First paragraph, R. S., Pt. 3, Ch. 8, Tit. 4, Art. 3, § 80. Second
_ paragraph, R. S., Pt. 3, Ch. 8, Tit. 4, Art. 3, § 81, pt.J

§ 264. Surplus to stockholders. If after the second dividend is
made, there shall remain any surplus in the hands of the receivers,
they shall distribute the same among the stockholders of such cor-
poration, in proportion to the respective amounts paid in by them,
severally, on their shares of stock.

[R. S., Pt. 3, Ch. 8, Tit. 4, Art. 3, § 83.]

§ 265. Disposition of moneys retained by receiver for suits.
When any suit pending at the time of the second dividend shall be ter-
minated, they shall apply the moneys retained in their hands for that
purpose, to the payment of the amount recovered, and their neces-
sary charges and expenses; and if nothing shall have been recovered,
they shall distribute such moneys, after deducting their expenses and
costs, among the creditors and stockholders of the corporation, in the
same manner as herein directed in respect to a second dividend.

[R. S., Pt. 3, Ch. 8, Tit. 4, Art. 3, § 84.]

§ 266. Duty of receiver as to unclaimed. dividend. If any divi-
dend that shall have been declared, shall remain unclaimed by the
person entitled thereto for one year after the same was declared, the
receivers shall consider it as relinquished, and shall distribute it, on
any subsequent dividend, among the other creditors.

[R. S., Pt. 2, Ch. 5, Tit. 1, Art. 8, § 42.]

§ 267. Effect of failure to file claim before second dividend, After
such second dividend shall have been made, the receivers shall not be
answerable to any creditor of such corporation, or to any person hav-
ing claims against such corporation, by virtue of any open or subsist-
ing engagement, unless the demands of such creditor shall have been
exhibited, and the engagements upon which such claims are founded,
shall have been presented to the said receivers, in detail and in writing,
before or at the time specified by them in their notice of a second
dividend.

[R. S., Pt. 3, Ch. 8, Tit. 4, Art. 3, § 82.]

§ 268. Final accounting by receiver. A receiver shall apply with-
in one year after qualifying as such for a final settlement of his ac-
counts and an order for distribution, or shall apply to the court
upon notice to the attorney-general for an extension of time, setting
forth the reasons why he is unable to close his accounts, which order
GENERAL CORPORATION LAW. 4IlI

may be granted in the discretion of the court. The attorney-general
or any creditor, or any party interested, may apply for an order that
the receiver show cause why an accounting and distribution shall not
be had at any time after the expiration of one year after the receiver
qualifies; and it shall be the duty of the attorney-general after the ex-
piration of eighteen months from the time the receiver enters upon
his duties, in case he has not applied for a final settlement of his
accounts, to apply for such an order on notice to such receiver. In
case of such application by a party other than the receiver the court
shall direct the receiver to take steps to account with all convenient
speed. The receiver is not required or authorized to file any account,
except as herein provided, except by special order of the court.
[Code Civil Procedure, § 2431b.]

§ 269. Notice of final accounting. Previous to rendering such
account the receivers shall insert a notice of their intention to present
the same, once in each week, for three weeks, in a newspaper, of the
county in which notices of dividends are herein required to be inserted,
specifying the time and place at which such account will be rendered.

[R. S., Pt. 3, Ch. 8, Tit. 4, Art. 3, § 87.]

§ 270. Hearing on final accounting. Upon the coming in of such
report, the court shall hear the allegations of all concerned therein, and
shall allow or disallow such account, and decree the same to be final
and conclusive upon all the creditors of such corporation, upon all
persons who have claims against it, upon any open or subsisting
engagement, and upon all the stockholders of such corporation,

[R. S., Pt. 3, Ch. 8, Tit. 4, Art. 3, § 80, pt.]

§ 271. Reference of final account. The referee to whom such
account shall be referred, shall hear and examine the proofs, vouchers
and documents offered for or against such account, and shall report
thereon fully to the court.

[R. S., Pt. 3, Ch. 8, Tit. 4, Art. 3, § 88.]

§ 272. Further accounting. Such receivers shall also account
from time to time in the same manner, and with the like effect, for all
moneys which shall come to their hands after the rendering of such
account, and for all moneys which shall have been retained by them
for any of the purposes hereinbefore specified, and shall pay into
court all unclaimed dividends.

[R. S., Pt. 3, Ch. 8, Tit. 4, Art. 3, § 80, pt.]

§ 273. Removal of receiver. Such receivers may be removed by
the court.
[R. S., Pt. 3, Ch. 8, Tit. 4, Art. 3, § 85, pt.]

§ 274. Vacancy. Any vacancy created by removal, death or other-
wise, may be supplied by the court.-
[R. S., Pt. 3, Ch. 8, Tit. 4, Art. 3, § 85, pt.]

§ 275. Renunciation by receiver. Any receiver who shall be
desirous of renouncing the trust vested in him, may apply to the court
from whom his appointment was received, for an order to all persons
interested, to show cause why such renunciation should not be accepted.

Such application shall be accompanied by a full, true and just
account of all the transactions of such receiver, and particularly of the
412 NEW YORK CORPORATIONS.

property, moneys and effects received by him; of all payments made,
whether to creditors or otherwise; and of the remaining effects and
property of the corporation, in respect to which he was appointed
receiver, within his knowledge, and the situation of the same.

To such account shall be annexed the affidavit of the receiver,
that the said account is in all respects just and true, according to the
best of his knowledge and belief; which affidavit shall be subscribed
and sworn to, before the court, to whom the application is made, and
shall be certified by the clerk of the court.

Such court, shall thereupon grant an order, directing notice to
be given to all persons interested in the property of the corporation,
in respect to which such receiver was appointed, to show cause on a
day or at a term and at a place therein to be specified, why he should
not be permitted to renounce his appointment.

Such notice shall be published, once in each week, for six weeks
successively in such newspapers, as such court shall direct.

On the day appointed for such hearing, and on such other days
as shall from time to time be appointed, if it shall appear that notice
was duly published, the court shall proceed to hear the proofs and
allegations of the parties.

If it shall appear that the proceedings of such receiver, in relation
to his trust, have been fair and honest, and particularly in the collec-
tion of the property and debts vested in him; and if such court be
satisfied that for any reason it is inexpedient for such receiver to
continue in the execution of the duties of his appointment, and that
such duties can be executed by another receiver, without injury to the
property of the corporation, or to the creditors; and if no good cause
to the contrary appear, such court shall grant an order, allowing such
receiver to renounce his appointment. ;

Upon such order being granted, such receiver shall be discharged
from the trust reposed in him, and his power and authority shall there-
upon cease; but he shall, notwithstanding, remain subject to any lia-
bility he may have incurred, at any time previous to the granting of
such order, in the management of his trust.

The expense of all proceedings in effecting such renunciation shall
be paid by the receiver making the application.

[R.S., Pt. 2, Ch. 5, Tit. 1, Art. 8, §§ 49, 51, 52, 53, 54, 55, 56, 60, 62.]

§ 276. Control of receiver by court. The receivers shall be sub-
ject to the control of the court and may be compelled to account at
any time.

[R. S., Pt. 3, Ch. 8, Tit. 4, Art. 3, § 85, pt.]

§ 277. Commissions and expenses of receiver in voluntary disso-
lution. A receiver appointed pursuant to article nine is entitled, in addi-
tion to his necegsary expenses, to commissions upon the sums received
and disbursed by him as the court by which or the judge by whom he
is appointed allows, as follows: On the first twenty thousand dollars
not exceeding five per centum; on the next eighty thousand dollars,
not exceeding two and one-half per centum; and on the remainder, not
exceeding one per centum; but in case the commissions of a receiver
so computed shall not amount to one hundred dollars, said court or
judge may in his or its discretion allow said receiver such a sum not
exceeding one hundred dollars for his commissions as shall be com-
mensurate with the services rendered by said receiver.

[Code Civil Procedure, § 2431a.]
GENERAL CORPORATION LAW. 413

§ 278. Commissions and expenses of receiver except in voluntary
dissolution. A receiver of a corporation, except a receiver appointed in
proceedings for its voluntary dissolution, is entitled, in addition to his
necessary expenses, to such commissions, not exceeding two and one-
half per centum upon the sums received and disbursed by him, as the
court by which or the judge by whom he is appointed allows, but ex-
cept upon a final accounting such a receiver shall not receive on ac-
count of his services for any one year a greater amount than twelve
thousand dollars, nor for any period less than a year more than at that
rate. Upon final accounting, the court may make an additional allow-
ance to such receiver, not exceeding two and one-half per centum upon
the sums received and disbursed by him, if the court is satisfied that
he has performed services that fairly entitle him to such additional
allowance. Where more than one receiver shall be appointed, the com-
pensation herein provided shall be divided between said receivers.

[L. 1883, Ch. 378, § 2, as amended by L, 1886, Ch. 275, § 1; L. 1901,
Ch. 506, § 1; L. 1906, Ch. 349, § 1.]

ARTICLE 12.

PROVISIONS APPLICABLE TO TWO OR MORE OF THE
FOREGOING PROCEEDINGS OR ACTIONS.

Section 300. Application of preceding articles to certain corporations.

301. Officers and agents may be compelled to testify in cer-
tain actions. A

302. Injunction staying actions by creditors in certain actions.

303. Creditors of corporation may be brought in to prove
their claims in certain actions.

304. When attorney-general must bring certain actions.

305. Requisites of injunction against corporations in certain
cases.

306. Appointment of receivers of property of corporations.

307. Judicial suspension or removal of officer of corporation.

308. Application of the last three sections,

309. Misnomer not available in action against stockholder.

310. Appraisal of property of insolvent corporation.

311. Application by attorney-general for removal of receiver
and to facilitate closing affairs of receivership.

312. Service of papers upon attorney-general.

313. Designation of depositories of funds in order appoint-
ing receiver.

314. Application to the court in certain actions and proceed-
ings.

315. County wherein action may be brought by attorney-
general on behalf of the people.

316. Preferences in actions * of proceedings by or against
receivers.

§ 300. Application of preceding articles to certain corporations.
Articles fifth, sixth or seventh of this chapter do not apply to a re-
ligious corporation; or to a municipal or other political corporation,

* So in original.
414 NEW YORK CORPORATIONS.

created by the constitution, or by or under the laws of this state; or
to any corporation which the regents of the university have power to
dissolve, except upon the application of the regents, or of the trustees
of such a corporation; and in aid of its liquidation under such dissolu-
tion.

[Code Civil Procedure, § 1804.]

§ 301. Officers and agents may be compelled to testify in certain
actions. In an action, brought as prescribed in article fifth, sixth or
seventh, a stockholder, officer, alienee, or agent of a corporation, is not
excused from answering a question, relating to the management of the
corporation, or the transfer or disposition of its property, on the
ground that his answer may expose the corporation to a forfeiture of
any of its corporate rights, or will tend to convict him of a criminal
offense, or to subject him to a penalty or forfeiture. But his testimony
shall not be used, as evidence against him, in a criminal action or spe-
cial proceeding.

[Code Civil Procedure, § 1805.]

§ 302. Injunction staying actions by creditors in certain actions.
In such an action, the court may, in its discretion, on the application of
either party, at any stage of the action, before or after final judgment,
and with or without security, grant an injunction order, restraining the
creditors of the corporation from bringing actions against the defend-
ants, or any of them, for the recovery of a sum of money, or from
taking any further proceedings in such actions, theretofore commenced.
Such an injunction has the same effect, and, except as otherwise ex-
pressly prescribed in this section, is subject to the same provisions of
law, as if each creditor, upon whom it is served, was named therein,
and was a party to the action in which it is granted.

[Code Civil Procedure, § 1806.]

§ 303. Creditors of corporation may be brought in to prove their
claims in certain actions. In such an action, the court may, at any
stage of the action, before or after final judgment, make an order re-
quiring all the creditors of the corporation to exhibit and prove their
claims, and thereby make themselves parties to the action, in such a
manner, and in such a reasonable time, not less than six months from
the first publication of notice of the order as the court directs; and
that the creditors, who make default in so doing, shall be precluded
from all benefit of the judgment, and from any distribution which may
be made thereunder, except as hereinafter provided. Notice of the
order must be given by publication, in such newspapers, and for such
a length of time, as the court directs. Notwithstanding such order any
such creditor who shall exhibit and prove his claim in the manner
directed thereby, with proof, by affidavit or otherwise, that he has had
no notice or kn@wledge thereof in time to comply therewith, any time
before an order is made directing a final distribution of the assets of
such corporation, shall be entitled to have his claim received, and shall
have the same rights and benefits thereon, so far as the assets of such
corporation then remaining undistributed may render possible, as if his
ee had been exhibited and proved within the time limited by such
order.

[Code Civil Procedure, § 1807.]

§ 304. When attorney-general must bring certain actions. Where
the attorney-general has good reason to believe, that an action can be
GENERAL CORPORATION LAW. 415

maintained in behalf of the people of the state, as prescribed in articles
fifth, sixth or seventh of the chapter, except section one hundred
and thirty of this chapter, he must bring an action accordingly, or apply
to a competent court for leave to bring an action, as the case requires;
if, in his opinion, the public interests require that an action should be
brought. In a case where the action can be brought only by the attor-
ney-general in behalf of the people, if a creditor, stockholder, director
or trustee of the corporation, applies to the attorney-general for that
purpose, and furnishes the security required by law, the attorney-gen-
eral must bring the action, or apply for leave to bring it, if he has
good reason to believe, that it can be maintained. Where such an
application is made section nineteen hundred and eighty-six of the code
of civil procedure applies thereto, and to the action brought in pursu-
ance thereof.
[Code Civil Procedure, § 1808.]

§ 305. Requisites of injunction against corporations in certain
cases, An injunction order, suspending the general and ordinary busi-
ness of a corporation, or suspending from office, or restraining from
the performance of his duties, a trustee, director, or other officer there-
of, can be granted only by the court, upon notice of the application
therefor, to the proper officer of the corporation, or to the trustee,
director, or other officer enjoined. If such an injunction order is made,
otherwise than as prescribed in this section, it is void.

[Code Civil Procedure, § 1809. For remainder of section see Code
Civil Procedure, § 1809.]

§ 306. Appointment of receivers of property of corporations. A
receiver of the property of a corporation can be appointed only by the
court, and in one of the following cases:

1. An action, brought as prescribed in articles fifth, sixth or sev-
enth of this chapter.

. 2. An action brought for the foreclosure of a mortgage upon the
property, of which the receiver is appointed, where the mortgage debt,
or the interest thereupon, has remained unpaid, at least thirty days
after it was payable, and after payment thereof was duly demanded of
the proper officer of the corporation and where either the income of
the property is specifically mortgaged, or the property itself is prob-
ably insufficient to pay the mortgage debt.

3. An action brought by the attorney-general, or by a stockholder,
to preserve the assets of a corporation, having no officer empowered
to hold the same.

4. A special proceeding for the voluntary dissolution of a cor-
poration.

5. Upon the application of the regents of the university, in aid of
the liquidation of a corporation whose dissolution they contemplate or
have decreed; or upon the application of the trustees of such a cor-
poration, with notice to the regents.

Where the receiver is appointed in an action, otherwise than by or
pursuant to a final judgment, notice of the application for his appoint-
ment must be given to the proper officer of the corporation.

[Code Civil Procedure, § 1810.]

§ 307. Judicial suspension or removal of officer of corporation. A
trustee, director, or other officer of a corporation shall not be sus-
pended or removed from office, by a court or judge, otherwise than by
416 NEW YORK CORPORATIONS.

the final judgment of a competent court, in an action brought by the
attorney-general, as prescribed in section ninety of this chapter.
[Code Civil Procedure, § 1811.]

§ 308. Application of the last three sections. The last three sec-
tions apply to an action or special proceeding, against a corporation
created by or under the laws of the state, or a trustee, director, or other
officer thereof; or against a corporation created by or under the laws
of another state, government, or country, or a trustee, director, or
other officer thereof, where the corporation does business within the
state, or has, within the state, a business agency or a fiscal agency, or
an agency for the transfer of its stock.

[Code Civil Procedure, § 1812. For remainder of section see Code
Civil Procedure, § 1812.]

§ 309. Misnomer not available in action against stockholder.
Where an action, authorized by a law of the state, is brought against
one or more persons, as stockholders of a corporation, an objection to
any of the proceedings cannot be taken, by a person properly made a
defendant in the action on the ground that the plaintiff has joined with
him, as a defendant in the action, a person, whose name appears on the
stock-books of the corporation, as a stockholder thereof, by the name
so appearing; but who is misnamed, or dead, or is not liable for any
cause. In such a case, the court may, at any time before final judgment,
upon motion of either party, amend the pleadings and other papers,
without prejudice to the previous proceedings, by substituting the true
name of the person intended, or by striking out the name of the person
who is dead, or not liable, and, in a proper case, inserting the name of
his representative or successor.

[Code Civil Procedure, § 1813. For remainder of section see Code
Civil Procedure, § 1813.]

§ 310. Appraisal of property of insolvent corporation. Whenever
by reason of the provisions of any law of this state it shall become
necessary to appraise in whole or in part the property of any corpora-
tion in the hands of a receiver or otherwise, the persons whose duty
it shall be to make such appraisal shall value the real estate at its full
and true value, taking into consideration actual sales of neighboring
real estate similarly situated during the year immediately preceding the
date of such appraisal, if any; and they shall value all such property,
stocks, bonds or securities as are customarily bought or sold in open
markets in the city of New York or elsewhere, for the day on which
such appraisal or report may be required, by ascertaining the range of
the market and the average of prices as thus found, running through
a reasonable period of time.

[L. 1891, Ch. 34, § 1.]

§ 311. Application by attorney-general for removal of receiver
and to facilitate closing affairs of receivership, The attorney-general
may, at any time he deems that the interests of the stockholders, credi-
tors, policy-holders, depositors or other beneficiaries interested in the
proper and speedy distribution of the assets of any insolvent corpora-
tion will be subserved thereby, make a motion in the supreme court
at a special term thereof, in any judicial district:

1. For an order removing the receiver of any insolvent corpora-
tion and appointing a receiver thereof in his stead, or,

2. To compel him to account, or,
GENERAL CORPORATION LAW. 417

3. For such other and additional order or orders as to him may
seem proper to facilitate the closing up of the affairs of such receiver-
ship, and

Any appeal from any order made upon any motion under this
section shall be to the appellate division of the department in which
such motion is made.

[L. 1883, Ch. 378, § 7.]

§ 312. Service of papers upon attorney-general. A copy of all
motions and all motion papers, and a copy of any other application to
the court, together with a copy of the order or judgment to be pro-
posed thereon to the court, in every action of proceeding for the disso-
lution of a corporation or a distribution of its assets, shall, in all cases,
be served on the attorney-general, in the same manner as provided by
law for the service of papers on attorneys who have appeared in
actions, whether the applications but for this section would be ex parte
or upon. notice, and no order or judgment granted shall vary in any
material respect from the relief specified in such copy, order or judg-
ment, unless the attorney-general shall appear on the return day and
shall have been heard in relation thereto; and any order or judgment
granted in any action or proceeding aforesaid, without such service of
such papers upon the attorney-general, shall be void, and no receiver
of any such corporation shall pay to any person any money directed to
be paid by any order or judgment made in any such action or proceed-
ing, until the expiration of eight days after a certified copy of such
order or judgment shall have been served as aforesaid upon the attor-
ney-general.

[L. 1883, Ch. 378, § 8.]

§ 313. Designation of depositories of funds in order appointing
receiver. All orders appointing receivers of corporations shall desig-
nate therein one or more places of deposit, wherein all funds of the
corporation not needed for immediate disbursement shall be deposited
and no deposits or investments of such trust funds shall be made else-
where, except upon the order of the court upon due notice given to
the attorney-general.

[L. 1883, Ch. 378, § 3.]

§ 314. Application to the court in certain actions and proceedings.
All applications to the court shall be made in the judicial district where
the principal office of the corporation against which proceedings are
taken is located, excepting such applications as are made in actions
brought by the attorney-general on behalf of the people of the state,
and all such applications shall be made in the judicial district in which
the action is triable.

[L. 1883, Ch. 378, § 9, as amended by L. 1806, Ch. 282, § 2.]

§ 315. County wherein action may be brought by attorney-general
on behalf of the people. An action or proceeding brought by the attor-
ney-general on behalf of the people of the state against any corporation
for the purpose of procuring its dissolution, the appointment of a
receiver, or the sequestration of its property, may be brought in any
county of the state, to be designated by the attorney-general.

[L. 1883, Ch. 378, § 1 pt., as amended by L. 1806, Ch. 282, § 1.]

§ 316. Preferences in actions or proceeding by or against receivers.
All actions or other legal proceedings and appeals therefrom or therein
brought by or against a receiver of any of the insolvent corporations
418 NEW YORK CORPORATIONS.

referred to in this chapter, shall have a preference upon the calendars
of all courts next in order to actions or proceedings brought by the
people of the state of New York.

[L. 1883, Ch. 378, § 10.)

ARTICLE 13.

ALTERATION AND REPEAL OF CHARTER OF CORPORA-
TION.

Section 320. Alteration and repeal of charter.
321. Conflicting corporate laws.

§ 320. Alteration and repeal of charter, The charter of every
corporation shall be subject to alteration, suspension and repeal, in the
discretion of the legislature.

[Added by L. 1895, Ch. 672, § 2.]

§ 321. Conflicting corporate laws, If in any corporate law there
is or shall be any provision in conflict with any provisions of this chap-
ter or of the stock corporation law, the provisions so conflicting shall
prevail, and the provision of this chapter or of the stock corporation
law with which it conflicts shall not apply in such a case. If in any
such law there is or shall be a provision relating to a matter embraced
in this chapter or in the stock corporation law, but not in conflict with
it, such provision in such other law shall be deemed to be in addition
to the provision in this chapter or in the stock corporation law relating
to the same subject-matter, and both provisions shall, in such case,
be applicable.

[Added by L. 1892, Ch. 687.]

ARTICLE 14.

LAWS REPEALED; CONSTRUCTION; WHEN TO TAKE
EFFECT.

SEcTION 330. Laws repealed.
331. Construction.
332. When to take effect.

§ 330. Laws repealed. Of the laws enumerated in the schedule
hereto annexed, that portion specified in the last column is hereby
repealed.

[As amended by L, 1892, Ch. 687.]

§ 331. Construction, Nothing in this chapter shall be construed
to impair any right or liability which any existing corporation, its
officers, directors, stockholders or creditors may have or be subject to
or which any such corporation, other than a railroad corporation, had
or was subject to on the date when this chapter takes effect, by virtue
of any special act of the legislature creating such corporation or creat-
ing or defining any such right or liability, unless such special act is
repealed by this chapter or the other general laws hereinbefore men-
tioned.

[As amended by L,. 1892, Ch. 687.]
GENERAL CORPORATION LAW.

_ § 332.
diately.

419

When to take effect. This chapter shall take effect imme-

Schedule of Laws Repealed.

Revised Statutes..Part 1, chapter 18,

Revised Statutes..Part 3, chapter
Revised Statutes..Part 3, chapter

Laws of Chapter Section
TSU uve aire 67 B35 wade seco All
IST3) hs cteatascaccn DS eis assnste oe Seis All
WSUS cs extaves AG QOD ais shiwncpene All
ISIG adax er sire BB vrckres hace All
ISTP sacesiedues bs B28 iis ninnseeaace All
ISTS sat sawetiws OF css erie aes S All
IBlQ jicseeeess LOSS i we keivies All
TSO skncasen es TAA Pe shoots All
1822) saves ean tas DUB ore esa angares All
1825) Sedietanc BOG teat 4-II, 13,
14, 17, 18
1828. 52 wines ducers 21....1 Ff 76, 77,
457 (2d Meet.)
T8830) cake aes 284, 316........ All
1838 ...... 160, 161, 262...... All
T9300 isslacoechas Q1G dena eee All
TBAS cohasicg ecient TOG se:ic0 wwsesies All
T8460" osha vee ses Tosa aay ees All
TEAC. os sie ese deters BUG aiccics ctises 17, 18
VBA © stasis s:atecee TOO. eases 3, 4
1847 ....210, 222, 270, 272,

287, 398, 404, 405... All

1848 ....37, 40, 45, 140, 259,
268, 3600. .cc0iaace es All
1849 ........ 250, 362........ All
1850. a4 xs qwa’ Ly, TAQ ss aessees All
TEST sieves: esses 14, 19, 98,
107, 487, 497.... All
T852 s.sacvss B28. B72e ota: eais All
1853 ...... 53, 117, 124,
135, 245, 333---. ++ All
1853 cccisaawes ATT ved abies I, 2, 4
1953 cca 481, 502, 626...... All
1854 .... 3, 87, 140, 201,
232, 269, 282, 312.... All
1855 ....301, 302, 390, 478,
485, 495, 546, 559.... All
TOGO: cialde-aaetsies ee All
1857 .... 20, 83, 185, 202,
262, 444, 546, 558,
643, 77. cera oa All
1858 ...... 10, 125, 348...... All
18590 ......209, 3II, 455...++- All
1860 ...... 116, 260, 523...... All
1861 ....140, 170, 215, 238.... All

8, title 4, sections..... 2, 42
8, title 4, article 3, §§ 66-91

Laws of Chapter Section
1862 ...... 205, 248, 425,

438, 449, 472...... All
1863 ...... 63, 134, 346...... All
1864 .... 85, 337, 517, 582.... All
1865 ...... 234, 246, 307,

691, 780.......006 All
1866 .... 73, 250, 322, 371,

697, 780, 799, 838.... All

1867 .... 12, 49, 248, 254,
419, 480, 509, 775,
906, 937, 960, 971,
OD Arascaeitaerackce- seca ttast All
1868 ....253, 200, 573, 781.... All
1869 ...... 234, 237, 605,
706, 844, O17...... All
1870 ...... 124, 135, 322,
443, 568, 773.....- All
TWB7I savias 95, 481, 535,
560, 652, 657,
669, 697, 883...... All
1872 .... 81, 128, 146, 248,
283, 350, 374, 426,
609, 611, 779, 780.... All
1892 devs sa ccs 820..All except 20
1072: caweersx 829, 843.......- All
1873 ....151, 352, 432, 440,
469, 616, 634, 710,
B37, QUA iastcnees cease es All
TB7A virceces 76, 143, 149,
ie 240, 288, 430...... All
1875 .... 4, 58, 88, 108,
113, I19, 120, 159,
193, 256, 3190....+--- All
WSIS ccaccwe sie oan as 4, 8
1875 ....365, 445, 510, 586,
e 508, 606, 611........ All
1876 .... 77, 135, 190, 198,
280, 358, 373, 415;
ABS, 4d. 6 sierctea sone All
1877 ....103, 158, 164, 171,
ue ae 266, 311, 374.... All
1878 .... 35, 61, 85, 121,

163, 203, 210, 261,
264, 316, 334, 394-..- All
420

Laws
1879

1880 ....

1880

1880 ...

1881 ....

1882 ....

1883 ....

1884...

1884

1884 ...
1885 ....

1886 ....

NEW YORK CORPORATIONS.

of Chapter

....214, 253, 290,
350, 377, 393, 395,
413, 415, 441, 503,
505, 512, 541........
5, 85, 90, 94,
113, 133, 155, 182,
187, 223, 225, 241.... All
sthate eee eG BAG ec savaateisrs se
I, f 3, subd. 5, part relating
to receivers appointed as
prescribed in Code Civil
Procedure, § 2429.
254, 263, 267, 349,
415, 417, 474, 484,
510, 537, 575, 582,
BOS, BBS casement ears
22, 58, 77, 116,
117, 148, 213, 232,
295, 296, 311, 313,
321, 337, 338, 351,
399, 422, 464, 468,
470, 472, 485,
589, 639, 649, 650,
674, 685..........05
73, 82,
280, 290,

Section
293,

309,

232, 237,
287, 323,
381, 382,
387, 388,
G83, AQF cic e susneseres
.140, 193,

- 367, 386, 397, 421,
422, 439, 441, 444....
40, 84, 127, 141,
153, 171, 305, 369,
422, 423, 480, 498,
535, 540, 549......--
65, 182, ®71, 275,
310, 321, 322, 403,
415, 509, 551, 579,
586, 592, 601, 605,

634 O42 visi ages 2 04 All

Laws of Chapter Section

1887 ....450, 486, 536, 570,
601, 616, 622, 724.... All

1888 ....189, 306, 313, 359,
304, 447, 462, 513,
514, 540, 5600........
57, 76, 78, 236,
242, 281, 332, 369,
426, 519, 524, 531,
B32). SOA ws ye panes oes

23,
292, 416, 421,

1889 ....

1890 ....

Part relating to appraisal of
property of insolvent cor-

porations.

1891 ...... 38, 57, 287...... All

T8028! ois ees ss Qexevine ese All

TBOF seas waren ss TO pis. deel Pea 4 4

1802) axcns ag etn 687..All except 37

T8OA. einadgees 136, 400........ All

TSOS. a24aseee es OF 2 cirwtgnels a All

1896 ........ 139, 282........ All

TSO6 nase gnc ds O52 ieee sasocnetecs
I, part adding § 57 to L.
1892, Ch, 688.

1898... cissuees 22 exis weeds
Part relating to receivers of
corporations.

1898 .......... 59A seen All

TSOQO wis datonieeec BOL duseie easioin All

1900 ....177, 704, 733, 760.... All

IQOI ...... 06, 214, 355,

500) G38anacsar. cavendd All

1902 J 9, 60, 285 All

TQOF de ctscon de ew VIB bi cee cohseses All

1904 ...... 236, 206, 490,

705, 737) 754.-++-- All

TOOS: « 4.8-sis $0000 BGO cece vine wees. GALL

1906 ....228, 230, 340, 531.... All

1907" Gidvactcnwed TGs ee-Hgass 4 All

I908 .......... AS Piss: rw Steer aos All

Code Civil Procedure—432, subd. 2, from words “by a writing”
to “an authentication;” 716, pt. relating to corporations; 1781-1808;
1809, pt. relating to corporations; 1810, 1811; 1812, 1813, pt. relating to
corporations; 2411; 2412-2414, pt. relating to corporations; 2415, 2416,
2419-2431b; 3390-3396, pt. relating to corporations.
STOCK CORPORATION LAW.

 

Laws of 1909, Chapter 61, constituting Chapter 59 of the Consolidated

ARTICLE

SECTION I.

I.
2.
3.
4.
5

Laws.

Short title (§ 1).

General provisions (§§ 5-18).

Directors and officers (§§ 25-35).

Stock and stockholders (§§ 50-70).

Laws repealed; when to take effect (§§ 80, 81).

 

ARTICLE 1.

SHORT TITLE.
Short Title.

§ 1. Short title. This chapter shall be known as the “Stock Cor-
poration Law.”
foe *[Former L. 1890, Ch. 564, § 1, as amended by L. 1892, Ch. 688,

§ 1]

18.

ARTICLE 2.

GENERAL PROVISIONS.

Application of article.

Power to borrow money and mortgage property.
Validating corporate mortgages.

Power to guarantee bonds of other corporations.

. tReorganization upon sale of corporate property.

Contents of plan or agreement.

Sale of property; possession of receiver and suits against
him.

Municipalities may assent to plan of readjustment.

Change of place of business.

Combinations prohibited.

Merger.

Voluntary sale of franchise and property.

Rights of non-consenting stockholders on voluntary sale
of franchise and property.

Alterations or extension of business.

§5. Application of article. This article except sections eight,
fifteen, sixteen, seventeen and eighteen thereof, shall not apply to
moneyed corporations. .

[Former L. 1890, Ch. 564, § 1 pt. as amended by L. 1892, Ch. 688,

§ 1]

* Notes at end of sections are those supplied by the Board of Statutory Consolidation.
+ So in original.

421
422 NEW YORK CORPORATIONS.

§ 6. Power to borrow money and mortgage property. In addi-
tion to the powers conferred by the general corporation law, every
stock corporation shall have the power to borrow money and contract
debts, when necessary for the transaction of its business, or for the
exercise of its corporate rights, privileges or franchises, or for any
other lawful purpose of its incorporation; and it may issue and dispose
of its obligations for any amount so borrowed, and may mortgage its
property and franchises to secure the payment of such obligations, or
of any debt contracted for said purposes. Every such mortgage, ex-
cept purchase-money mortgages and mortgages authorized by con-
tracts made prior to May first, eighteen hundred and ninety-one, shall
be consented to by the holders of not less than two-thirds of the capital
stock of the corporation, which consent shall be given either in writing
or by vote at a special meeting of the stockholders called for that
purpose, upon the same notice as that required for the annual meet-
ings of the corporation; and a certificate under the seal of the cor-
poration that such consent was given by the stockholders in writing,
or that it was given by vote at a meeting as aforesaid, shall be
subscribed and acknowledged by the president or a vice-president
and by the secretary or an assistant secretary, of the corporation, and
shall be filed and recorded in the office of the clerk or register of
the county wherein the corporation has its principal place of business.
When authorized by like consent, the directors under such regulations
as they may adopt, may confer on the holder of any debt or obliga-
tion, whether secured or unsecured, evidenced by bonds of the cor-
poration, the right to convert the principal thereof, after two and not
more than twelve years from the date of such bonds, into stock of
the corporation; and if the capital stock shall not be sufficient to meet
the conversion when made, the directors shall from time to time,
authorize an increase of capital stock sufficient for that purpose’ by
causing to be filed in the office of the secretary of state, and a duplicate
thereof in the office of the clerk of the county where the principal place
of business of the corporation shall be located, a certificate under the
seal of the corporation, subscribed and acknowledged by the president
and secretary of the corporation setting forth,

I. A copy of such mortgage; or resolution of directors authorizing
the issue of such bonds;

2. That the holders of not less than two-thirds of the capital
stock of the corporation duly consented to the execution of such
mortgage or resolution of directors authorizing the issue of such bonds
by such corporation;

3. A copy of the resolution of the directors of the corporation
authorizing the increase of the capital stock of the corporation neces-
sary for the purgose of such conversion;

4. The amount of capital theretofore authorized, the proportion
thereof actually issued and the amount of the increased capital stock.

If the corporation be a railroad corporation the certificate shall
have indorsed thereon the approval of the public service commission
having jurisdiction thereof. When the certificate herein provided for
has been filed, the capital stock of such corporation shall be increased
to the amount specified in such certificate.

[Former L. 1890, Ch. 564, § 2, as amended by L. 1802, Ch. 337,
: ‘ and Ch. 688, § 2; L. 1001, Ch. 354, § 1; L. 1905, Ch. 745,
I.
STOCK CORPORATION LAW. 423

§ 7. Validating corporate mortgages. Whenever any mortgage
affecting property or franchises within this state heretofore or here-
after executed by authority of the board of directors in behalf of
any stock corporation, domestic or foreign, of any description, recites
Or represents in substance or effect that the execution of such mort-
gage has been duly consented to, or authorized by stockholders, such
recital or representation in any such mortgage, after public record
thereof within this state, shall be presumptive evidence that the exe-
cution of such mortgage has been duly and sufficiently consented to,
and authorized by stockholders as required by any provision of law.
After any such mortgage heretofore or hereafter shall have been
publicly recorded for more than one year in one or more of the
counties of this state containing the mortgaged premises or any part
thereof, and the corporation shall have received value for bonds actually
issued under and secured by such mortgage, and interest shall have
been paid on any of such bonds according to the terms thereof, such
recital or representation of such mortgage so recorded shall be con-
clusive evidence that the execution of such mortgage has been duly
and sufficiently consented to, and authorized by stockholders as required
by any provision of law, and its validity shall not be impaired by reason
of any defect or insufficiency of consent or authority of stockholders
or in filing or recording such consent or authority, and such mortgage
shall be valid and binding upon the corporation, and those claiming
under it, as security for all valid bonds issued or to be issued there-
under, unless such mortgage shall be adjudged invalid in an action
begun as hereinafter, in this section, provided. Notwithstanding the
foregoing provisions of this section, the invalidity of any such mort-
gage heretofore recorded because of insufficiency of consent by stock-
holders may be adjudged in any action for such purpose begun before
the first day of April, nineteen hundred and two, and the invalidity of
any such mortgage hereafter recorded, because of insufficiency of con-
sent by stockholders, may be adjudged in any action for such purpose
begun, within one year after the earliest record of such mortgage in
any county in this state, provided in either case that such action shall
have been so begun by or in behalf of the corporation by direction
of the board of directors acting in their own discretion, or upon the
written request of the holders of not less than one-third of the capital
stock of the corporation; and in any such action so begun by or in
behalf of the corporation, the recitals or representations of the mort-
gage shall be presumptive evidence only as first above provided.
Whenever hereafter, in compliance with any law of this state, the offi-
cers of any corporation shall have made and filed and recorded a cer-
tificate that the execution of a mortgage hereafter made by the
corporation has been duly consented to by stockholders, such certificate
shall be conclusive evidence as to the truth thereof, in favor of any
and all persons who in good faith shall receive or purchase, for value,
any bond or obligation purporting to be secured by such mortgage, at
any time when said certificate shall remain of record and uncanceled.
Nothing in this section contained shall affect any right or any remedy
in respect of any such right of any creditor accrued before this
enactment nor shall it dispense with the necessity of obtaining the
consent of the public service commission having jurisdiction thereof
to any mortgage by a railroad corporation.

[Former § 8, as added by L,. 1901, Ch. 354, § 2.]
424 NEW YORK CORPORATIONS.

§ 8. Power to guarantee bonds of other corporations. Any stock
corporation may, in pursuance of a unanimous vote of its stockholders
voting at a special meeting called for that purpose by notice in writing
signed by a majority of the directors of such corporation stating the
time and place and object of the meeting and served upon each stock-
holder appearing as such upon the books of the corporation, personally
or by mail at his last-known post-office address at least sixty days
prior to such meeting, guarantee the bonds of any other domestic
corporation engaged in the same general line of business; and any
stock corporation owning the entire capital stock of any other domes-
tic stock corporation engaged in the same general line of business
may in pursuance of a two-thirds vote of its stockholders voting at
a special meeting called for that purpose by notice in writing signed by
a majority of the directors of such corporation, stating the time and
place and object of the meeting and served upon each stockholder
appearing as such upon the books of the corporation personally, or by
mail, at his last-known post-office address, at least sixty days prior
to such meeting, guarantee the bonds of such other corporation.

[Part of former L. 1890, Ch. 564, § 40, as amended by L. 1892,
Ch. 688, § 40; L. 1902, Ch. Gor, § 1.]

§ 9. Reorganization upon sale of corporate property and fran-
chises. When the property and franchises of any domestic stock cor-
poration shall be sold by virtue of a mortgage or deed of trust, duly
executed by it, or pursuant to the judgment or decree of a court of
competent jurisdiction, or by virtue of any execution issued thereon,
and the purchaser, his assignee or grantee shall have acquired title to
the same in the manner prescribed by law, he may associate with him
any number of persons, not less than the number required by law
for an incorporation for similar purposes at least two-thirds of whom
shall be citizens of the United States and one shall be a resident of
this state, and they may become a corporation and take and possess
the property and franchises thus sold, and which were at the time
of the sale possessed by the corporation whose property shall have
been so sold, upon making and acknowledging and filing in the offices
where certificates of incorporation are required by law to be filed, a
certificate in which they shall describe by name and reference to the
law under which it was organized, the corporation whose property
and franchises they have acquired, and the court by whose authority
the sale had been made, with the date of the judgment or decree
authorizing or directing the same, and a brief description of the prop-
erty sold, and also the following particulars:

1. The name of the new corporation intended to be formed by
the filing of such certificate; and the place where its principal office
is to be located,

2. The maximum amount of its capital stock and the number
of shares into which it is to be divided, specifying the classes thereof,
whether common or preferred, and the amount of and rights pertaining
to each class.

3. The number of directors, not less nor more than the number
required by law for the old corporation, who shall manage the affairs
of the new corporation, and the names and post-office addresses of
the directors for the first year. They may insert in such certificate
any provisions relating to the new corporation, or its management,
contained in any plan or agreement which may have been entered
into as provided in section ten of this chapter. Such corporation shall
STOCK CORPORATION LAW. 425

be vested with, and be entitled to exercise and enjoy, all the rights,
privileges and franchises, which at the time of such sale belonged to,
or were vested in the corporation last owning the property sold, or
its receiver, and shall be subject to all the provisions, duties and
liabilities imposed by law on that corporation. Any proceedings here-
tofore taken in substantial compliance with this section as hereby
amended, and any and all incorporations based thereon are hereby
ratified and confirmed.

[Former L. 1890, Ch. 564, § 3, as amended by L. 1892, Ch.
ova 3; L. 1901, Ch. 354, § 1; L. 1902, Ch. 80, § 1; L. 1904, Ch. 706,

I.

§ 10. Contents of plan or agreement. At or previous to the sale
the purchasers thereat, or the persons for whom the purchase is to be
made, may enter into a plan or agreement, for or in anticipation of
the readjustment of the respective interests therein of any creditors,
mortgagees and stockholders, or any of them, of the corporation own-
ing such property and franchises at the time of sale, and for the repre-
sentation of such interests in the bonds or stock of the new corpora-
tion to be formed, and may therein regulate voting by the holders of
the preferred and common stock at any meeting of the stockholders,
and may provide for, and regulate voting by the holders, and owners
of any or all of the bonds of the corporation, foreclosed, or of the
bonds issued or to be issued by the new corporation; and such right
of voting by bondholders shall be exercised in such manner, for such
period, and upon such conditions, as shall be therein described. Such
plan or agreement must not be inconsistent with the laws of the state
and shall be binding upon the corporation, until changed as therein
provided, or as otherwise provided by law. The new corporation
when duly organized, pursuant to such plan or agreement and to the
provisions of law, may issue its bonds and stock in conformity with’
the provisions of such plan or agreement, and may at any time within
six months after its organization, compromise, settle or assume the
payment of any debt, claim or liability of the former corporation upon
such terms as may be lawfully approved by a majority of the agents
or trustees intrusted with the carrying out of the plan or agreement
of reorganization, and may establish preferences in favor of any por-
tion of its capital stock and may divide its stock into classes; but the
capital stock of the new corporation shall not exceed in the aggregate
the maximum amount of stock mentioned in the certificate of incor-
poration.

[Former L. 1890, Ch. 564, § 4, as re-enacted by L. 1892, Ch, 688,
§ 4, and amended by L. 1901, Ch. 354, § 1.]

§ 11. Sale of property; possession of receiver and suits against
him. The supreme court may direct a sale of the whole of the prop-
erty, rights and franchises covered by the mortgage or mortgages, or
deeds of trust foreclosed at any one time and place to be named in
the judgment or order, either in case of the non-payment of interest
only, or of both the principal and interest due and unpaid and secured
by any such mortgage or mortgages or deeds of trust. Neither the
sale nor the formation of the new corporation shall interfere with
the authority or possession of any receiver of such property and fran-
chises, but he shall remain liable to be removed or discharged at such
time as the court may deem proper. No suit or proceeding shall be
commenced against such receiver unless founded on wilful misconduct
426 NEW YORK CORPORATIONS.

or fraud in his trust after the expiration of sixty days from the
time of his discharge; but after the expiration of sixty days the new
corporation shall be liable in any action that may be commenced
against it, and founded on any act or omission of such receiver for
which he may not be sued, and to the same extent as the receiver,
but for this section would be or remain liable, or to the same extent
that the new corporation would be had it done or omitted the acts
complained of.

[Former L. 1890, Ch. 564, § 5, as re-enacted by L. 1892, Ch. 688,

§ 5.]

§ 12. Municipalities may assent to plan of readjustment. The
commissioners, corporate authorities or proper officers of any city,
town or village, who may hold stock in any corporation, the property
and franchises whereof shall be liable to be sold, may assent to any
plan or agreement of reorganization which lawfully provides for the
formation of a new corporation, and the issue of stock therein to the
proper authorities or officers of such cities, towns or villages in ex-
change for the stock of the old or former corporation by them
respectively held. And such commissioners, corporate authorities or
other proper officers may assign, transfer or surrender the stock so
held by them in the manner required by such plan, and accept in lieu
thereof the stock issued by such new corporation in conformity there-
with.

{Former L. 1890, Ch. 564, § 6, as amended by L. 1892, Ch. 688,
§ 6; L. 1901, Ch. 354, § 1.]

§ 13. Change of place of business. Any stock corporation now
existing or hereafter organized under the laws of this state, except
moneyed corporations, may at any time change its principal office and
place of business from the city, town or county named in its certificate
of incorporation, or to which it may have been changed under the
provisions of this section, to any other city, town or county in this
state, in which it may desire to actually transact and carry on its
regular business from day to day, provided that such change has been
authorized, either by unanimous consent of the stockholders expressed
in writing and duly acknowledged and filed in the office of the secre-
tary of state, or by a vote of the stockholders of said corporation at a
special meeting of stockholders called for that purpose. When such
change shall be authorized by the stockholders as herein provided, the
president and secretary and a majority of the directors of such cor-
poration shall sign a certificate stating the name of said corporation,
the city, town and county where its principal office and place of busi-
ness was originally located, and to which it may have been subse-
quently changed, and the city, town and county to which it is desired
to change its saig principal office and place of business, and that it is
the purpose of said corporation to actually transact and carry on its
regular business from day to day at such place, and that such change
has been authorized as herein provided, and the names of the direc-
tors of said corporation and their respective places of residence, which
certificate shall be verified by the oaths of all the persons signing the
same, and when so signed and verified, shall be filed in the office of
the secretary of state and a duplicate thereof in the office of the clerk
of the county from which said principal office and place of business
is about to be removed or changed, and another in the office of the
clerk of the county to which said removal or change is to be made,
STOCK CORPORATION LAW. 427

and thereupon the principal office and place of business of such cor-
poration shall be changed as stated in said certificate.

[Former section 59, as added by L. 1896, Ch. 920, § 1, and
amended by L. 1905, Ch. 489, § 1.]

§ 14. Combinations prohibited. No domestic stock corporation
and no foreign corporation doing business in this state shall combine
with any other corporation or person for the creation of a monopoly
or the unlawful restraint of trade or for the prevention of competition
in any necessary of life.

[Former L. 1890, Ch. 564, § 7, as amended by L. 1892, Ch. 688,
§ 7; L. 1897, Ch. 384, § 1.]

§ 15. Merger. Any domestic stock corporation and any foreign
stock corporation authorized to do business in this state lawfully
owning all the stock of any other stock corporation organized for,
or engaged in business similar or incidental to that of the possessor
corporation may file in the office of the secretary of state, under its
common seal, a certificate of such ownership, and of the resolution
of its board of directors to merge such other corporation, and there-
upon it shall acquire and become, and be possessed of all the estate,
property, rights, privileges and franchises of such other corporation,
and they shall vest in and be held and enjoyed by it as fully and en-
tirely and without change or diminution as the same were before held
and enjoyed by such other corporation, and be managed and con-
trolled by the board of directors of such possessor corporation, and
in its name, but without prejudice to any liabilities of such other cor-
poration or the rights of any creditors thereof. Any bridge corporation
may be merged under this section with any railroad corporation which
shall have acquired the right by contract to run its cars over the bridge
of such bridge corporation.

[Former section 58, as added by L. 1806, Ch. 932, § 1, and amended
by L. 1900, Ch. 476, § 1; L. 1902, Ch. 98, § 1.]

§ 16. Voluntary sale of franchise and property. A stock corpor-
ation, except a railroad corporation and except as otherwise provided
by law, with the consent of two-thirds of its stock, may sell and con-
vey its property, rights, privileges and franchises, or any interest
therein or any part thereof to a domestic corporation, engaged in a
business of the same general character, or which might be included in
the certificate of incorporation of a corporation organizing under anv
general law of this state for a business of the same general charac-
ter, and a domestic corporation the principal business of which is car-
ried on in, and the principal tangible property of which is located
within a state adjoining the state of New York, may with the consent
of the holders of ninety-five per centum of its capital stock, sell and
convey its property situate without the state of New York, not in-
cluding its franchises, to a corporation organized under the laws of
such adjoining state, and such sale and conveyance shall, in case of
a sale to a domestic corporation, vest the rights, property and fran-
chises thereby transferred, and in case of a sale to a foreign corpora-
tion the property sold, in the corporation to which they are conveyed
for the term of its corporate existence, subject to the provisions and
restrictions applicable to the corporation conveying them. Before
such sale or conveyance shall be made such consent shall be obtained
428 NEW YORK CORPORATIONS.

at a meeting of the stockholders called upon like notice as that re-
quired for an annual meeting.

[Part of former section 33, added by L. 1893, Ch. 638, § 1, as
amended by L,. 1901, Ch. 130, § 1.]

§ 17. Rights of non-consenting stockholders on voluntary sale
of franchise and property. If any stockholder not voting in favor of
such proposed sale or conveyance shall at such meeting, or within
twenty days thereafter, object to such sale, and demand payment for
his stock, he may, within sixty days after such meeting, apply to the
supreme court at any special term thereof held in the district in which
the principal place of business of such corporation is situated, upon
eight days’ notice to the corporation, for the appointment of three
persons to appraise the value of such stock, and the court shall ap-
point three such appraisers, and designate the time and place of their
proceedings as shall be deemed proper, and also direct the manner in
which payment for such stock shall be made to such stockholders.
The court may fill any vacancy in the board of appraisers occurring
by refusal or neglect to serve or otherwise. The appraisers shall meet
at the time and place designated, and they or any two of them, after
being duly sworn honestly and faithfully to discharge their duties,
shall estimate and certify the value of such stock at the time of such
dissent, and deliver one copy to such corporation, and another to such
stockholder, if demanded; the charges and expenses of the appraisers
shall be paid by the corporation. When the corporation shall have paid
the amount of such appraisal, as directed by the court, such stock-
holders shall cease to have any interest in such stock and in the cor-
porate property of such corporation and such stock may be held or
disposed of by such corporation.

[Part of former section 33, added by L. 1893, Ch. 638, § 1, as
amended by L,. 1901, Ch. 130, § 1.]

§ 18. Alterations or extension of business. Any stock corpora-
tion heretofore or hereafter organized under any general or special
law of this state may alter its certificate of incorporation so as to in-
clude therein any purposes, powers ar provisions which at the time of
such alteration may apply to corporations engaged in a business of the
same general character, or which might be included in the certificate
of incorporation of a corporation organized under any general law of
this state for a business of the same general character, by filing in the
manner provided for the original certificate of incorporation an amend-
ed certificate, executed by the president and secretary, stating the al-
teration proposed, and that the same has been duly authorized by a
vote of a majority of the directors and also by vote of stockholders
representing at least three-fifths of the capital stock, at a meeting of
the stockholders called for the purpose in the manner provided in
section sixty-three of this chapter, and a copy of the proceedings of
such meeting, verified by the affidavit of one of the directors present
thereat, shall be filed with such amended certificate.

[Former section 32, added by L, 1892, Ch, 688, § 32, as amended
by L. 1901, Ch. 354, § 1; L. 1905, Ch. 751, § 1.]
STOCK CORPORATION LAW. 429

ARTICLE 3.

DIRECTORS AND OFFICERS.

SEcTION 25. Directors.
26. Change of number of directors.
27. When acts of directors void.
28. Liability of directors for making unauthorized dividends.
29. Liability of directors for loans to stockholders.
30. Officers.
31. Inspectors and their oath.
32. Books to be kept.
33. Stock books of foreign corporations.
34. Annual report to secretary of state.
35. Liability of officers for false certificates, reports or pub-
lic notices.

§ 25. Directors. The directors of every stock corporation shall
be chosen at the time and place fixed by the by-laws of the corpora-
tion by a plurality of the votes at such election. Each director shall
be a stockholder unless otherwise provided in the certificate, or in a
by-law adopted by a stockholders’ meeting. Vacancies in the board
of directors shall be filled in the manner prescribed in the by-laws.
Notice of the time and place of holding any election of directors shall
be given by publication thereof, at least once in each week for two
successive weeks immediately preceding such election, in a newspaper
published in the county where such election is to be held, and in such

-other manner as may be prescribed in the by-laws. Policyholders of
an insurance corporation shall be eligible to election as directors,
whether or not they be stockholders. At least one-fourth in number
of the directors of every stock corporation shall be elected annually.

[Former L. 1890, Ch. 564, § 20, as amended by L. 1892, Ch. 688,
§ 20; L. 1901, Ch. 354, § 1; L. 1906, Ch. 238, § 1.]

§ 26. Change of number of directors. The number of directors
of any stock corporation may be increased or reduced, but not below
the minimum number prescribed by law, when the stockholders own-
ing a majority of the stock of the corporation shall so determine, at a
meeting to be held on two weeks’ notice in writing to each stockholder
of record. Such notice shall be served personally or by mail, directed
to each stockholder at his last known post-office address. Proof of the
service of such notice shall be filed in the office of the corporation at or
before the time of such meeting. The proceedings of such meeting shall
be entered in the minutes of the corporation and a transcript thereof
verified by the president and secretary of the meeting shall be filed in
the offices where the original certificates of incorporation were filed.
Such increase or reduction may also be effected by unanimous consent
without a meeting, in which case there shall be filed in the offices
herein specified the unanimous consent of the stockholders in writing,
signed by them, or their duly authorized proxies, but no such consent
shall be valid unless there is annexed thereto an affidavit of the cus-
todian of the stock book of such corporation stating that the persons
who have signed such consent, either in person or by proxy, are the
holders of record of the entire capital stock of said corporation issued
and outstanding. If a corporation formed under or subject to the
banking law, the consent of the superintendent of banks, and if an in-
430 NEW YORK CORPORATIONS.

surance corporation, the consent of the superintendent of insurance,
shall be first obtained to such increase or reduction of the number of
directors. This section shall apply to any stock corporation whether
organized under a general or special law, and the number of directors
may be increased as hereby provided notwithstanding the maximum
number of directors now prescribed by law." If the number of direc-
tors be increased, the additional directors authorized by such increase
shall be elected by the votes of a majority of the directors in office
at the time of the increase. If the original or an amended certificate
of incorporation of the corporation shall provide that the directors
shall be divided into two or more classes, whose terms of office shall
respectively expire at different times, the additional directors shall be
divided among such classes as nearly as practicable in proportion to
the respective numbers of directors constituting each class prior to
such increase. [As amended by L,. 1909, Ch. 421.]

[Former L. 1890, Ch. 564, § 21, as amended by L. 1892, Ch. 688,
§ 21; L. 1903, Ch. 320, § 1; L. 1904, Ch. 307, § 1; L. 1905, Ch. 750, § 1.]

§ 27. When acts of directors void. When the directors of any
corporation for the first year of its corporate existence shall hold over
and continue to be directors after the first year, because of their neg-
lect or refusal to adopt the by-laws required to enable the stockholders
to hold the annual election for directors, all their acts and proceedings
while so holding over, done for and in the name of the corporation,
designed to charge upon it any liability or obligation for the services
of any such director, or any officer, or attorney or counsel appointed
by them, and every such liability or obligation shall be held to be
fraudulent and void.

[Former L. 1890, Ch. 564, § 22, re-enacted without change by L,.
1892, Ch. 688, § 22.]

§ 28. Liability of directors for making unauthorized dividends.
The directors of a stock corporation shall not make dividends, except
from the surplus profits arising from the business of such corporation,
nor divide, withdraw or in any way pay to the stockholders or any of
them, any part of the capital of such corporation, or reduce its capital
stock, except as authorized by law. In case of any violation of the
provisions of this section, the directors under whose administration
the same may have happened, except those who may have caused their
dissent therefrom to be entered at large upon the minutes of such
directors at the time, or were not present when the same happened,
shall jointly and severally be liable to such corporation and to the
creditors thereof to the full amount of any loss sustained by such cor-
poration or its creditors respectively by reason of such withdrawal, di-
vision or reduction. But this section shall not prevent a division and
distribution of #he assets of any such corporation remaining after the
payment of all its debts and liabilities upon the dissolution of such
corporation or the expiration of its charter; nor shall it prevent a cor-
poration from accepting shares of its capital stock in complete or par-
tial settlement of a debt owing to the corporation, which by the board
of directors shall be deemed to be bad or doubtful.

[Former L. 1890, Ch. 564, § 23, as amended by L,. 1892, Ch. 688,
§ 23; L. 1901, Ch. 354, § 1.]

§ 29. Liability of directors for loans to stockholders. No loan
of moneys shall be made by any stock corporation, except a moneyed
STOCK CORPORATION LAW. 431

corporation, or by any officer thereof out of its funds to any stock-
holder therein, nor shall any such corporation or officer discount any
note or other evidence of debt, or receive the same in payment of any
instalment or any part thereof due or to become due on any stock in
such corporation, or receive or discount any note, or other evidence
of debt, to enable any stockholder to withdraw any part of the money
paid in by him on his stock. In case of the violation of any provision
of this section, the officers or directors making such loan, or assent-
ing thereto, or receiving or discounting such notes or other evidences
of debt, shall, jointly and severally, be personally liable to the extent
of such loan and interest, for all the debts of the corporation contract-
ed before the repayment of the sum loaned, and to the full amount of
the notes or other evidences of debt so received or discounted, with
interest from the time such liability accrued.

s ee L. 1890, Ch. 564, § 25, as amended by L. 1892, Ch. 688,

25.

§ 30. Officers. The directors of a stock corporation may ap-
point from their number a president, and may appoint a secretary,
treasurer, and other officers, agents and employees, who shall respect-
ively have such powers and perform such duties in the management
of the property and affairs of the corporation, subject to the control
of the directors, as may be prescribed by them or in the by-laws. The
directors may require any such officer, agent or employee to give se-
curity for the faithful performance of his duties, and may remove him
at pleasure. The policyholders of an insurance corporation shall be
eligible to election or appointment as its officers.

[Former L. 1890, Ch. 564, § 27, as amended by L. 1892, Ch. 688,
§ 27.]

§ 31. Inspectors and their oath. The inspectors of election of
every stock corporation shall be appointed in the manner prescribed
in the by-laws, but the inspectors of the first election of directors and
of all previous meetings of the stockholders shall be appointed by the
board of directors named in the certificate of incorporation. No direc-
tor or officer of a moneyed corporation shall be eligible to election or
appointment as inspector. Each inspector shall be entitled to a rea-
sonable compensation for his services, to be paid by the corporation,
and if any inspector shall refuse to serve, or neglect to attend at the
election, or his office become vacant, the meeting may appoint an in-
spector in his place unless the by-laws otherwise provide. The inspec-
tors appointed to act at any meeting of the stockholders shall, before
entering upon the discharge of their duties, be sworn to faithfully ex-
ecute the duties of inspector at such meeting with strict impartiality,
and according to the best of their ability, and the oath so taken shall
be subscribed by them, and immediately filed in the office of the clerk
of the county in which such election or meeting shall be held, with a
certificate of the result of the vote taken thereat.

[Former L. 1890, Ch. 564, § 28, as amended by L,. 1892, Ch. 688,
§ 28.]

§ 32. Books to be kept. Every stock corporation shall keep at
its office correct books of account of all its business and transactions,
and a book to be known as the stock book, containing the names, al-
phabetically arranged, of all persons who are stockholders of the cor-
poration, showing their places of residence, the number of shares of
432 NEW YORK CORPORATIONS.

stock held by them respectively, the time when they respectively be-
came the owners thereof, and the amount paid thereon. The stock
book of every such corporation shall be open daily, during at least
three business hours, for the inspection of its stockholders and judg-
ment creditors, who may make extracts therefrom. No transfer of
stock shall be valid as against the corporation, its stockholders and
creditors for any purpose except to render the transferee liable for
the debts of the corporation to the extent provided for in this chapter,
until it shall have been entered in such book as required by this sec-
tion, by an entry showing from and to whom transferred. The stock
book of every such corporation and the books of account of every
bank shall be presumptive evidence of the facts therein so stated in
favor of the plaintiff, in any action or proceeding against such cor-
poration or any of its officers, directors or stockholders. Every cor-
poration that shall neglect or refuse to keep or cause to be kept such
books, or to keep any book open for inspection as herein required,
shall forfeit to the people the sum of fifty dollars for every day it
shall so neglect or refuse. If any officer or agent of any such cor-
poration shall wilfully neglect or refuse to make any proper entry in
such book or books, or shall neglect or refuse to exhibit the same, or
to allow them to be inspected and extracts taken therefrom as pro-
vided in this section, the corporation and such officer or agent shall
each forfeit and pay to the party injured a penalty of fifty dollars for
every such neglect or refusal, and all damages resulting to him there-
from.

[Former L. 1890, Ch. 564, § 29, as amended by L. 1892, Ch. 688,
§ 29; L. 1900, Ch. 128, § 1; L. 1901, Ch. 354, § 1.]

§ 33. Stock books of foreign corporations. Every foreign stock
corporation having an office for the transaction of business in this
state, except moneyed and railroad corporations, shall keep therein a
book to be known as a stock book, containing the names, alphabetical-
ly arranged, of all persons who are stockholders of the corporation,
showing their places of residence, the number of shares of stock held
by them respectively, the time when they respectively became the own-
ers thereof, and the amount paid thereon. Such stock book shall be
open daily, during business hours, for the inspection of its stockholders
and judgment creditors, and any officer of the state authorized by law
to investigate the affairs of any such corporation. If any such foreign
stock corporation has in this state a transfer agent, whether such
agent shall be a corporation or a natural person, such stock book may
be deposited in the office of such agent and shall be open to inspection
at all times during the usual hours of transacting business, to any
stockholder, judgment creditor or officer of the state authorized by
law to investigate the affairs of such corporation. For any refusal to
allow such book to be inspected, such corporation and the officer or
agent so refusing shall each forfeit the sum of two hundred and fifty
dollars to be recovered by the person to whom such refusal was made.

[Former L. 1890, Ch. 564, § 56, as amended by L. 1892, Ch. 688,
§ 53, and amended by L. 1897, Ch. 384, § 3.]

§ 34. Annual report to secretary of state. Every domestic stock
corporation and every foreign stock corporation doing business with-
in this state, except moneyed and railroad corporations, shall annually,
during the month of January, or, if doing business without the United
STOCK CORPORATION LAW. 433

States, before the first day of May, may make a report as of the first
day of January, which will state:

1. The amount of its capital stock, and the proportion actually
issued.

2. The amount of its debts or an amount which they do not ex-
ceed.

3. The amount of its assets or an amount which its assets at least
equal.

4. The names and addresses of all the directors and officers of
the company, and in the case of a foreign corporation, the name also
of the person designated in the manner prescribed by the code of civil
procedure, as a person upon whom process against the corporation
may be served within this state.

Such report shall be made by the president or a vice-president or
the treasurer or a secretary of the corporation and shall be filed in
the office of the secretary of state. If such report be not so made and
filed, any such officer who shall thereafter neglect or refuse to make
and to file such report, within ten days after written request so to do
shall have been made by a creditor or by 2 stockholder of the corpora-
tion, shall forfeit to the people the sum of fifty dollars for every day
he shall so neglect or refuse.

[Former L. 1890, Ch. 564, § 30, as amended by L. 1892, Ch. 2,
§ 1, and Ch. 688, § 30; L. 1897, Ch. 384, § 2; L. 1901, Ch. 354, § 1; L.
1905, Ch. 415, § 1.]

§ 35. Liability of officers for false certificates, reports or public
notices. If any certificate or report made or public notice given by the
officers or directors of a stock corporation shall be false in any ma-
terial representation, the officers and directors signing the same shall
jointly and severally be personally liable to any person who has be-
come a creditor or stockholder of the corporation upon the faith of
any such certificate, report, notice or any material representation
therein to the amount of the debt contracted upon the faith thereof if
not paid when due, or the damage sustained by any purchaser of or
subscriber to its stock upon the faith thereof. The liability imposed
by this section shall exist in all cases where the contents of any such
certificate, report or notice or of any material representation therein
shall have been communicated either directly or indirectly to the per-
son so becoming a creditor or stockholder and he became such creditor
or stockholder upon the faith thereof. No action can be maintained
for a cause of action created by this section unless brought within two
years from the time the certificate, report or public notice shall have
been made or given by the officers or directors of such corporation.

[Former L. 1890, Ch. 564, § 31, as amended by L. 1892, Ch. 688,
§ 31.]
434 NEW YORK CORPORATIONS.

ARTICLE 4.
STOCK AND STOCKHOLDERS.

SEcTIon 50. Issue and transfers of stock.

51. Transfers of stock by stockholder indebted to corpora-
tion.

52. Purchase of stock of other corporations.

53. Subscriptions to stock.

54. Time of payment of subscriptions to stock.

55. Consideration for issue of stock and bonds.

56. Liabilities of stockholders.

57. Liabilities of stockholders to laborers, servants or em-
ployees.

58. Non-liability in certain cases.

s9. Limitation of stockholder’s liability.

60. Partly paid stock.

61. Preferred and common stock.

62. Increase or reduction of capital stock.

63. Notice of meeting to increase or reduce capital stock.

64. Conduct of such meeting; certificate of increase or re-
duction.

65. Change in par value of shares.

66. Prohibited transfers to officers or stockholders.

67. Application to court to order issue of new in place of
lost certificate of stock.

68. Order of court upon such application.

69. Financial statement to stockholders.

70. Liabilities of officers, directors and stockholders of for-
eign corporations.

§ so. Issue and transfers of stock. The stock of every stock cor-
poration shall be represented by certificates prepared by the directors
and signed by the president or vice-president and secretary or treasurer
and sealed with the seal of the corporation, and shall be transferable
in the manner prescribed in this chapter and in the by-laws. No share
shall be transferable until all previous calls thereon shall have been
fully paid in.

[Part of former L. 1890, Ch. 564, § 40, as amended by L. 1802,
Ch. 688, § 40; L. 1902, Ch. 601, § 1.]

§ 51. Transfers of stock by stockholder indebted to corporation.
If a stockholder shall be indebted to the corporation, the directors may
refuse to consent to a transfer of his stock until such indebtedness is
paid, provided a, copy of this section is written or printed upon the
certificate of stock.

[Former L. 1890, Ch. 564, § 26, as re-enacted by L. 18092, Ch.
688, § 26.]

§ 52. Purchase of stock of other corporations. Any stock cor-
poration, domestic or foreign, now existing or hereafter organized, ex-
cept moneyed corporations, may purchase, acquire, hold and dispose
of the stocks, bonds and other evidences of indebtedness of any cor-
poration, domestic or foreign, and issue in exchange therefor its stock,
bonds or other obligations if authorized so to do by a provision in the
certificate of incorporation of such stock corporation, or in any cer-
STOCK CORPORATION LAW. 435

tificate amendatory thereof or supplementary thereto, filed in pur-
suance of law, or if the corporation whose stock is so purchased, ac-
quired, held or disposed of, is engaged in a business similar to that
of such stock corporation, or engaged in the manufacture, use or sale
of the property, or in the construction or operation of works neces-
sary or useful in the business of such stock corporation, or in which
or in connection with which the manufactured articles, product or
property of such stock corporation are or may be used, or is a cor-
poration with which such stock corporation is or may be authorized
to consolidate. When any such corporation shall be a stockholder in
any other corporation, as herein provided, its president or other officers
shall be eligible to the office of director of such corporation, the same
as if they were individually stockholders therein and the corporation
holding such stock shall possess and exercise in respect thereof, all
the rights, powers and privileges of individual owners or holders of
such stock.

[Part of former L. 1890, Ch. 564, § 40, as amended by L. 1892,
Ch, 688, § 40; L. 1902, Ch. 601, § 1.]

§ 53. Subscriptions to stock. If the whole capital stock shall not
have been subscribed at the time of filing the certificate of incorpora-
tion, the directors named in the certificate may open books of sub-
scription to fill up the capital stock in such places and after giving
such notices as they may deem expedient, and may continue to receive
subscriptions until the whole capital stock is subscribed. At the time
of subscribing, every subscriber, whose subscription is payable in
money, shall pay to the directors ten per centum upon the amount
subscribed by him in cash, and no such subscription shall be received
or taken without such payment.

[Former L. 1890, Ch. 564, § 41, as re-enacted by L. 1892, Ch. 688,
§ 41.]

§ 54. Time of payment of subscriptions to stock. Subscriptions
to the capital stock of a corporation shall be paid at such times and
in such instalments as the board of directors may by resolution re-
quire. If default shall be made in the payment of any instalment as
required by such resolution, the board may declare the stock and ail
previous payments thereon forfeited for the use of the corporation,
after the expiration of sixty days from the service on the defaulting
stockholder, personally, or by mail directed to him at his last-known
post-office address, of a written notice requiring him to make payment
within sixty days from the service of the notice at a place specified
therein, and stating that, in case of failure to do so, his stock and all
previous payments thereon will be forfeited for the use of the cor-
poration.

Such stock, if forfeited, may be reissued or subscriptions therefor
may be received as in the case of stock not issued or subscribed for.
If not sold for its par value or subscribed for within six months after
such forfeiture, it shall be canceled and deducted from the amount of
the capital stock. If by such cancellation, the amount of the capital
stock is reduced below the minimum required by law, the capital stock
shall be increased to the required amount within three months there-
after or an action may be brought or proceedings instituted to close
up the business of the corporation as in the case of an insolvent cor-
poration. Ifa receiver of the assets of the corporation has been ap-
pointed, all unpaid subscriptions to the stock shall be paid at such
436 NEW YORK CORPORATIONS.

times and in such instalments as the receiver or the court may direct.
[Former L. 1890, Ch. 564, § 43, as amended by L. 1892, Ch. 688,
§ 43.]

§ 55. Consideration for issue of stock and bonds. No corpora-
tion shall issue either stock or bonds except for money, labor done or
property actually received for the use and lawful purposes of such
corporation. Any corporation may purchase any property authorized
by its certificate of incorporation, or necessary for the use and lawful
purposes of such corporation, and may issue stock to the amount of
the value thereof in payment therefor, and the stock so issued shall be
full paid stock and not liable to any further call, neither shall the
holder thereof be liable for any further payment under any of the
provisions of this chapter; and in the absence of fraud in the transac-
tion the judgment of the directors as to the value of the property
purchased shall be conclusive; and in all statements and reports of the
corporation, by law required to be published or filed, this stock shall
not be stated or reported as being issued for cash paid to the cor-
poration, but shall be reported as issued for property purchased.

[Former L. 1890, Ch. 564, § 42, as amended by L. 1892, Ch. 688,
§ 42; L. 1901, Ch. 354, § 1.]

§ 56. Liabilities of stockholders, Every holder of capital stock
not fully paid, in any stock corporation, shall be personally liable to
its creditors, to an amount equal to the amount unpaid on the stock
held by him for debts of the corporation contracted while such stock
was held by him. As to existing corporations the liability imposed
by this section shall be in lieu of the liability imposed upon stock-
holders of any existing corporation, under any general or special law,
excepting laws relating to moneyed corporations, and corporations
and associations for banking purposes, on account of any indebtedness
hereafter contracted or any stock hereafter issued; but nothing in this
section contained shall create or increase any liability of stockholders
of any existing corporation under any general or special law.

[Part of former L. 1890, Ch. 564, § 57, as amended by L. 18092,
Ch. 688, § 54; L. 1901, Ch. 354, § 1.]

§ 57. Liabilities of stockholders to laborers, servants or em-
ployees. The stockholders of every stock corporation shall jointly and
severally be personally liable for all debts due and owing to any of
its laborers, servants or employees other than contractors, for services
performed by them for such corporation. Before such laborer, servant
or employee shall charge such stockholder for such services, he shall
give him notice in writing, within thirty days after the termination
of such services, that he intends to hold him liable, and shall com-
mence an action®therefor within thirty days after the return of an
execution unsatisfied against the corporation upon a judgment recov-
ered against it for services.

[Part of former L. 1890, Ch. 564, § 57, as amended by L,. 1892, Ch.
688, § 54; L. 1901, Ch. 354, § 1]

§ 58. Non-liability in certain cases. No person holding stock in
any corporation as collateral security, or as executor, administrator,
guardian or trustee, unless he shall have voluntarily invested the trust
funds in such stock, shall be personally subject to liability as a stock-
holder; but the perscn pledging such stock shall be considered the
STOCK CORPORATION LAW. 437

holder thereof and shall be liable as stockholder, and the estates and
funds in the hands of such executor, administrator, guardian or trustee
shall be liable in the like manner and to the same extent as the testator
or intestate, or the ward or person interested in such trust fund would
have been, if he had been living and competent to act and held the
same stock in his own name, unless it appears that such executor, ad-
ministrator, guardian or trustee voluntarily invested the trust funds
‘ie stocks, in which case he shall be personally liable as a stock-
older.

[Part of former L. 1890, Ch. 564, § 57, as amended by L,. 1892, Ch.

688, § 54; L. 1901, Ch. 354, § 1.]

§ 59. Limitation of stockholder’s liability. No action shall be
brought against a stockholder for any debt of the corporation until
judgment therefor has been recovered against the corporation, and an
execution thereon has been returned unsatisfied in whole or in part,
and the amount due on such execution shall be the amount recover-
able, with costs against the stockholder. No stockholder shall be per-
sonally liable for any debt of the corporation not payable within two
years from the time it is contracted, nor unless an action for its col-
lection shall be brought against the corporation within two years after
the debt becomes due; and no action shall be brought against a stock-
holder after he shall have ceased to be a stockholder, for any debt of
the corporation, unless brought within two years from the time he
shall have ceased to be a stockholder.

[Former L. 1890, Ch. 564, § 58, as re-enacted by L. ao Ch. 688,
§ 55.]

§ 60. Partly paid stock. The original or the amended certificate
of incorporation of any stock corporation may contain a provision ex-
pressly authorizing the issue of the whole or of any part of the capital
stock as partly paid stock, subject to calls thereon until the whole
thereof shall have been paid in. In such case, if in or upon the cer-
tificate issued to represent such stock, the amount paid thereon shall
be specified, the holder thereof shall not be subject to any liability
except for the payment to the corporation of the amount remaining
unpaid upon such stock, and for the payment of indebtedness to em-
ployees pursuant to sections fifty-seven, fifty eight and fifty-nine of this
chapter; and in any such case, the corporation may declare and may
pay dividends upon the basis of the amount actually paid upon the
respective shares of stock instead of upon the par value thereof.

[Former § 62 added by L,. 1901, Ch. 354, § 3.]

§ 61. Preferred and common stock. Every domestic stock cor-
poration may issue preferred stock and common stock and different
classes of preferred stock, if the certificate of incorporation so pro-
vides, or by the consent of the holders of record of two-thirds of the
capital stock, given at a meeting called for that purpose upon notice
such as is required for the annual meeting of the corporation. A
certificate of the proceedings of such meeting, signed and sworn to by
the president or a vice- -president, and by the secretary or assistant
secretary, of the corporation, shall be filed and recorded in the offices
where the original certificate of incorporation of such corporation was
filed and recorded; and the corporation may, upon the written re-
quest of the holders of any preferred stock, by a two-thirds vote of
its directors, exchange the same for common stock, and issue cer-
438 NEW YORK CORPORATIONS.

tificates for common stock therefor, upon such valuation as may
have been agreed upon in the certificate of organization of such cor-
poration, or the issue of such preferred stock, or share for share,
but the total amount of such capital stock shall not be increased
thereby.

[Former L. 1890, Ch. 564, § 47, as amended by L. 1892, Ch. 688,
§ 47; L. 1901, Ch. 354, § 1

§ 62. Increase or reduction of capital stock. Any domestic cor-
poration may increase or reduce its capital stock in the manner herein
provided, but not above the maximum or below the minimum, if
any, prescribed by general law governing corporations formed for
similar purposes. If increased, the holders of the additional stock
issued shall be subject to the same liabilities with respect thereto as
are provided by law in relation to the original capital; if reduced,
the amount of its debts and liabilities shall not exceed the amount
of its reduced capital, unless an insurance corporation, in which case
the amount of its debts and liabilities shall not exceed the amount
of its reduced capital and other assets. The owner of any stock shall
not be relieved from any liability existing prior to the reduction
of the capital stock of any stock corporation. If a banking corpora-
tion, whether the capital be increased or reduced, its assets shall at
least be equal to its debts and liabilities and the capital stock, as in-
creased or reduced. A domestic railroad corporation may increase
or reduce its capital stock in the manner herein provided, notwith-
standing any provision contained herein, or in any general or special
law fixing or limiting the amount of capital stock which may be
issued by it.

[Former L,. 1890, Ch. 564, § 44, as amended by L,. 1892, Ch. 688,
: a, L. 1894, Ch. 346, § 1; L. 1899, Ch. 696, § 1; L. 1901, Ch. 354,

I,

§ 63. Notice of meeting to increase or reduce capital stock.
Every such increase or reduction must be authorized either by the
unanimous consent of the stockholders, expressed in writing and
filed in the office of the secretary of state and in the office of the
clerk of the county in which the principal business office of the cor-
poration is located, or by a vote of the stockholders owning at least
a majority of the stock of the corporation, taken at a meeting of
the stockholders specially called for that purpose in the manner
provided by law or by the by-laws. Notice of the meeting, stating
the time, place and object, and the amount of the increase or reduc-
tion proposed, signed by the president or a vice-president and the
secretary, shall be published once a week, for at least two successive
weeks, in a newspaper in the county where its principal business
office is located, if any is published therein, and a copy of such notice
shall be duly mailed to each stockholder or member at his last-known
post-office address at least two weeks before the meeting or shall be
personally served on him at least five days before the meeting.

[Former L. 1890, Ch. 564, § 45, as amended by L. 1892, Ch, 688,
§ 45; L. 1893, Ch. 700, § 1; L. 1901, Ch. 354, § 1.]

§ 64. Conduct of such meeting; certificate of increase or reduc-
tion. If, at the time and place specified in the notice, the stockholders
shall appear in person or by proxy in numbers representing at least
a majority of all the shares of stock, theyshall organize by choosing
STOCK CORPORATION LAW. 439

from their number a chairman and secretary, and take a vote of
those present in person or by proxy, and if a sufficient number of
votes shall be given in favor of such increase or reduction, or if the
same shall have been authorized by the unanimous consent of stock-
holders expressed in writing signed by them or their duly authorized
proxies, a certificate of the proceeding showing a compliance with the
provisions of this chapter, the amount of capital theretofore author-
ized, and the proportion thereof actually issued, and the amount of
the increased or reduced capital stock, and in case of the reduction
of capital stock the whole amount of the ascertained debts and liabili-
ties of the corporation, shall be made, signed, verified and acknowl-
edged by the chairman and secretary of the meeting, and filed in the
office of the clerk of the county where its principal place of business
shall be located, and a duplicate thereof in the office of the secretary
of state. In case of a reduction of the capital stock, except of a
railroad corporation or a moneyed corporation, such certificate or
consent hereinafter provided for shall have indorsed thereon the
approval of the comptroller, to the effect that the reduced capital
is sufficient for the proper purposes of the corporation, and is in
excess of its ascertained debts and liabilities; and in case of the in-
crease or reduction of the capital stock of a railroad corporation or a
moneyed corporation, the certificate or the unanimous consent of
stockholders, as the case may be, shall have indorsed thereon the
approval of the public service commission having jurisdiction thereof,
if a railroad corporation; of the superintendent of banks, if a cor-
poration formed under or subject to the banking law, and of the
superintendent of insurance, if an insurance corporation. When the
certificate herein provided for, or the unanimous consent of stock-
holders in writing, signed by them or their duly authorized proxies,
approved as aforesaid, has been filed, the capital stock of such cor-
poration shall be increased or reduced, as the case may be, to the
amount specified in such certificate or consent. The proceedings of
the meeting at which such increase or reduction is voted, or, if such
increase or reduction shall have been authorized by unanimous con-
sent without a meeting, then a copy of such consent shall be entered
upon the minutes of the corporation. If the capital stock is reduced,
the amount of capital over and above the amount of the reduced
capital shall, if the meeting or consents so determine or provide, be
returned to the stockholders pro rata, at such times and in such man-
ner as the directors shall determine, except in the case of the reduc-
tion of the capital stock of an insurance corporation, as an
alternative to make good an existing impairment.

[Former L. 1890, Ch. 564, § 46, as amended by L,. 1892, Ch. 688,
§ 46; L. 1893, Ch. 700, § 2; L. t901, Ch. 354, § 1; L. 1902, Ch. 286,
§ 1; L. 1904, Ch. 123, § 1.]

§ 65. Change in par value of shares. The number of shares
into which the capital stock of any stock corporation is divided may
be increased or reduced by a two-thirds vote of all stock duly repre-
sented ata meeting held and conducted in like manner, and upon filing
a like certificate, as required for the increase or reduction of its capital
stock. If such increase or reduction of the number of shares be so
authorized, the corporation shall issue to each stockholder certificates
for as many shares of the new stock as equal in par value the shares
of the old stock held by him, upon surrender and cancellation of such
440 NEW YORK CORPORATIONS.

old stock. This section does not authorize the increase or reduction
of the capital stock of such corporation.

[Former § 56, as added by L. 1893, Ch. 196, § 1, and amended
by L. 1901, Ch. 354, § 1.]

§ 66. Prohibited transfers to officers or stockholders. No cor-
poration which shall have refused to pay any of its notes or other
obligations, when due, in lawful money of the United States, nor
any of its officers or directors, shall transfer any of its property to
any of its officers, directors or stockholders, directly or indirectly,
for the payment of any debt, or upon any other consideration than
the full value of the property paid in cash. No conveyance, assign-
ment or transfer of any property of any such corporation by it or by
any officer, director or stockholder thereof, nor any payment made,
judgment suffered, lien created or security given by it or by any
officer, director or stockholder when the corporation is insolvent or
its insolvency is imminent, with the intent of giving a preference
to any particular creditor over other creditors of the corporation,
shall be valid, except that laborers’ wages for services shall be pre-
ferred claims and be entitled to payment before any other creditors
out of the corporation assets in excess of valid prior liens or incum-
brances. No corporation formed under or subject to the banking,
insurance or railroad law shall make any assignment in contempla-
tion of insolvency. Every person receiving by means of any such
prohibited act or deed any property of the corporation shall be bound
to account therefor to its creditors or stockholders or other trustees.
No stockholders of any such corporation shall make any transfer or
assignment of his stock therein to any person in contemplation of its
insolvency. Every transfer or assignment or other act done in vio-
lation of the foregoing provisions of this section shall be void. No
conveyance, assignment or transfer of any property of a corporation
formed under or subject to the banking law, exceeding in value one
thousand dollars, shall be made by such corporation, or by any officer
or director thereof, unless authorized by previous resolution of its
board of directors, except promissory notes or other evidences of debt
issued or received by the officers of the corporation in the transac-
tion of its ordinary business, and except payments in specie or other
current money or in bank bills made by such officers. No such con-
veyance, assignment or transfer shall be void in the hands of a pur-
chaser for a valuable consideration without notice. Every director
or officer of a corporation who shall violate or be concerned in
violating any provisions of this section, shall be personally liable to
the creditors and stockholders of the corporation of which he shall
be director or an officer to the full extent of any loss they may
respectively sustain by such violation.

[Former L,." 1890, Ch. 564, § 48, as amended by L. 1892, Ch. 688,
§ 48; L. 1901, Ch. 354, § 1.]

§ 67. Application to court to order issue of new in place of lost
certificate of stock. The owner of a lost or destroyed certificate of
stock, if the corporation shall refuse to issue a new certificate in place
thereof, may apply to the supreme court, at any special term held in
the district where he resides, or in which the principal business office
of the corporation is located, for an order requiring the corporation
to show cause why it should not be required to issue a new certificate
in place of the one lost or destroyed. The application shall be by
STOCK CORPORATION LAW. 441

petition, duly verified by the owner, stating the name of the corpora-
tion, the number and date of the certificate, if known, or if it can be
ascertained by the petitioner; the number of shares named therein, to
whom issued, and as particular a statement of the circumstances at-
tending such loss or destruction as the petitioner can give. Upon the
presentation of the petition the court shall make an order requiring
the corporation to show cause, at a time and place therein mentioned,
why it should not issue a new certificate of stock in place of the one
described in the petition. A copy of the petition and order shall be
served on the president or other head of the corporation, or on the
secretary or treasurer thereof, personally, at least ten days before the
time for showing cause.

[Former L. 1890, Ch. 564, § 50, as amended by L,. 1892, Ch. 688,
50.

§ 68. Order of court upon such application. Upon the return of
the order, with proof of due service thereof, the court shall, in a sum-
mary manner, and in such mode as it may deem advisable, inquire
into the truth of the facts stated in the petition, and hear the proofs
and allegations of the parties in regard thereto, and if satisfied that
the petitioner is the lawful owner of the number of shares, or any
part thereof, described in the petition, and that the certificate therefor
has been lost or destroyed, and can not after due diligence be found,
and that no sufficient cause has been shown why a new certificate
should not be issued, it shall make an order requiring the corporation,
within such time as shall be therein designated, to issue and deliver
to the petitioner a new certificate for the number of shares specified
in the order, upon depositing such security, or filing a bond in such
form and with such sureties as to the court shall appear sufficient to
indemnify any person other than the petitioner who shall thereafter
be found to be the lawful owner of the certificate lost or destroyed;
but such provision requiring security to be deposited or bond filed
is to be construed as excluding an application made by a domestic
municipal corporation or by a public officer in behalf of such corpora-
tion; and the court may direct the publication of such notice, either
before or after making such order as it shall deem proper. Any per-
son claiming any rights under the certificates alleged to have been
lost or destroyed shall have recourse to such indemnity, but in any
application under the provisions of this chapter, in which a domestic
municipal corporation or a public officer in behalf of such corporation,
shall be by the foregoing provisions of this section excused from de-
positing security or filing a bond, such municipal corporation shall be
liable for all damages that may be sustained by any person, in the
same case and to the same extent as sureties to a bond or undertaking
would have been, if such a bond or undertaking had been filed; and
the corporation issuing such certificate shall be discharged from all
liability to such person upon compliance with such order; and obe-
dience to the order may be enforced by attachment against the officer
or officers of the corporation on proof of his or their refusal to com-
ply with it.

[Former L. 1890, Ch. 564, § 51, as re-enacted by L. 1892, Ch. 688,
§ 51, as amended by L. 1905, Ch. 35, § 1.]

§ 69. Financial statement to stockholders. Stockholders owning
five per centum of the capital stock of any corporation other than a
moneyed corporation, not exceeding one hundred thousand dollars, or
442 NEW YORK CORPORATIONS.

three per centum where it exceeds one hundred thousand dollars, may
make a written request to the treasurer or chief fiscal officer thereof,
for a statement of its affairs, under oath, embracing a particular ac-
count of all its assets and liabilities, and the treasurer shall make such
statement and deliver it to the person presenting the request within
thirty days thereafter, and keep on file for twelve months thereafter
a copy of such statment, which shall at all times during business hours
be exhibited to any stockholder demanding an examination thereof;
but the treasurer or such chief fiscal officer shall not be required to
deliver more than one such statement in any one year. The supreme
court, or any justice thereof, may upon application, for good cause
shown, extend the time for making and delivering such certificate.
For every neglect or refusal of the treasurer or other chief fiscal of-
ficer thereof to comply with the provisions of this section he shall
forfeit and pay to the person making such request the sum of fifty
dollars, and the further sum of ten dollars for every twenty-four hours
thereafter until such statement shall be furnished.

[Former L. 1890, Ch. 564, § 52, as amended by L. 1892, Ch. 688,
§ 52]

§ 70. Liabilities of officers, directors and stockholders of foreign
corporations. Except as otherwise provided in this chapter the of-
ficers, directors and stockholders of a foreign stock corporation trans-
acting business in this state, except moneyed and railroad corporations,
shall be liable under the provisions of this chapter, in the same man-
ner and to the same extent as the officers, directors and stockholders
of a domestic corporation, for:

1. The making of unauthorized dividends;

2. Unlawful loans to stockholders;

3. Making false certificates, reports or public notices;

4. An illegal transfer of the stock and property of such corpora-
tion, when it is insolvent or its insolvency is threatened;

5. The failure to file an annual report.

Such liabilities may be enforced in the courts of this state, in the

same manner as similar liabilities imposed by law upon the officers,
directors and stockholders of domestic corporations.

[Former § 60, as added by L,. 1897, Ch. 384, § 4.]

ARTICLE 5.
LAWS*REPEALED; WHEN TO TAKE EFFECT.

Section 80. Laws repealed.
81. When to take effect.

§ 80. Laws repealed. Of the laws enumerated in the schedule
hereto annexed, that portion specified in the last column is hereby
repealed.

[New.]

§ 81. When to take effect. This chapter shall take effect im-
mediately.
STOCK CORPORATION LAW. 443

SCHEDULE oF LAws REPEALED.

Laws of Chapter Section Laws of Chapter Section
TSITA. ssanwecs 12 All (38th Sess.) 1894 ........ BA Oi eicsscau er aes All
TS25 cid vacances 82S 5 tee xe I-3, 12 1806 ........ O20 isn ve nae eens All
1828 ........ 20....15, fff 17, 18 1806 ........ 932....1, pt. adding

(2d Meet.) § 58 to L. 1892
1828 osc ie es Bliss nose I, | 180 Ch. 688.

(2d Meet.) 1897 ........ BBA vo scutes meee All
ISRO: wieslesisas Aina ghee was hs All 1899 ...... 354, 696.......... All
1848 ........ TA Giese because eenzceuten All 1900 .... 128, 164, 476........ All
1853 ..... 176, 425, 460....... All Igor ...... P30; '3544acs 20 uss All
1869 ........ DAR vn host ine trees 7 1902 ... 80, 98, 286, 601....... All
IS75 cos pages BO? axe ars: ap linia 8 1903 avers: BO Ole sider soit 'avaso Cros All
1884 ........ ABA wv eke cex ee 28 All 1904 123, 307, 706....... All
ISSO) o406 sa BT caw tah spate AH 1905 .... 35, 415, 480,
1890 ........ SO4werisiwsiwes All 745, 750, 751.....-. All
1892 ...... B97, O8Sizn citanasars All 1906 ........ BEBE LY xnare ita aida All
TAX LAW.

Laws of 1909, Chapter 62, constituting Chapter 60 of the Consolidated
Laws.

(Provisions relating specially to corporations.)

 

PROPERTY TAX,

ARTICLE tr.
TAXABLE PROPERTY AND PLACE OF TAXATION.

Section 2. Definitions.

3. Property liable to taxation.

4. Exemption from taxation.

7. When property of non-residents is taxable.
11. Place of taxation of property of corporations.
12. Taxation of corporate stock,

§ 2. Definitions. 1. “Tax district” as used in this chapter, means
a political subdivision of the state having a board of assessors author-
ized to assess property therein for state and county taxes.

3. The terms “land,” “real estate,” and “real property,” as used
in this chapter, include the land itself above and under water, all build-
ings and other articles and structures, substructures and superstruc-
tures, erected upon, under or above, or affixed to the same; all wharves
and piers, including the value of the right to collect wharfage, cranage
or dockage thereon; all bridges, all telegraph lines, wires, poles and
appurtenances; all supports and inclosures for electrical conductors and
other appurtenances upon, above and under ground; all surface, under-
ground or elevated railroads, including the value of all franchises,
rights or permission to construct, maintain or operate the same in,
under, above, ®n or through, streets, highways or public places; all
railroad structures, substructures and superstructures, tracks and the
iron thereon; branches, switches and other fixtures permitted or auth-
orized to be made, laid or placed in, upon, above or under any public
or private road, street or ground; all mains, pipes and tanks laid or
placed in, upon, above or under any public or private street or place
for conducting steam, heat, water, oil, electricity or any property, sub-
stance or product capable of transportation or conveyance therein or
that is protected thereby, including the value of all franchises, rights,
authority or permission to construct, maintain or operate, in, under,
above, upon, or through, any streets, highways or public places, any

444
TAX LAW. 445

mains, pipes, tanks, conduits or wires, with their appurtenances, for
conducting water, steam, heat, light, power, gas, oil or other substance,
or electricity for telegraphic, telephonic or other purposes; all trees and
underwood growing upon land, and all mines, minerals, quarries and
fossils in and under the same, except mines belonging to the state. A
franchise, right, authority or permission specified in this subdivision
shall for the purpose of taxation be known as a “special franchise.” A
special franchise shall be deemed to include the value of the tangible
property of a person, copartnership, association or corporation situated
in, upon, under or above any street, highway, public place or public
waters in connection with the special franchise. The tangible property
so included shall be taxed as a part of the special franchise. No prop-
erty of a municipal corporation shall be subject to a special franchise
tax.

5. The terms “personal estate,” and “personal property,” as used
in this chapter, include chattels, money, things in action, debts due
from solvent debtors, whether on account, contract, note, bond or
mortgage; debts and obligations for the payment of money due or
owing to persons residing within this state, however secured or wher-
ever such securities shall be held; debts due by inhabitants of this
state to persons not residing within the United States for the pur-
chase of any real estate; public stocks, stocks in moneyed corporations,
and such portion of the capital of incorporated companies, liable to
taxation on their capital, as shall not be invested in real estate.

§ 3. Property liable to taxation. All real property within this
state, and all personal property situated or owned within this state,
is taxable unless exempt from taxation by law.

§ 4. Exemption from taxation. The following property shall be
exempt from taxation: * * *

16. The owner or holder of stock in an incorporated company
liable to taxation on its capital, shall not be taxed as an individual
for such stock.

§ 7. When property of non-residents is taxable. 1. Non-residents
of the state doing business in the state, either as principals or partners,
shall be taxed on the capital invested in such business, as personal
property, at the place where such business is carried on, to the same
extent as if they were residents of the state.

§ 11. Place of taxation of property of corporations. The real
estate of all incorporated companies liable to taxation shall be assessed
in the tax district in which the same shall lie, in the same manner as
the real estate of individuals. All the personal estate of every incor-
porated company liable to taxation on its capital shall be assessed in
the tax district where the principal office or place for transacting the
financial concerns of the company shall be, or if such company have
no principal office, or place for transacting its financial concerns, then
in the tax district where the operations of such company shall be
carried on. In the case of a toll bridge, the company owning such
bridge shall be assessed in the tax district in which the tolls are
collected; and where the tolls of any bridge, turnpike, or canal company
are collected in several tax districts, the company shall be assessed in
the tax district in which the treasurer or other officer authorized to pay
the last preceding dividend resides.
446 NEW YORK CORPORATIONS.

§ 12. Taxation of corporate stock. The capital stock of every
company liable to taxation, except such part of it as shall have been
excepted in the assessment-roll or shall be exempt by law, together
with its surplus profits or reserve funds exceeding ten per centum of
its capital, after deducting the assessed value of its real estate, and all
shares of stock in other corporations actually owned by such company
which are taxable upon their capital stock under the laws of this state,
shall be assessed at its actual value.

ARTICLE 2.
MODE OF ASSESSMENT.

Sxction 27. Reports of corporations.
28. Penalty for omission to make statement.
32. Corporations, how assessed.

§ 27. Reports of corporations. The president or other proper
officer of every moneyed or stock corporation deriving an income or
profit from its capital or otherwise shall, on or before June fifteenth,
deliver to one of the assessors of the tax district in which the com-
pany is liable to be taxed and, if such tax district is in a county
embracing a portion of the forest preserve, to the comptroller of the
state, a written statement specifying:

1. The real property, if any, owned by such company, the tax
district in which the same is situated and, unless a railroad corporation,
the sums actually paid therefor.

2. The capital stock actually paid in and secured to be paid in,
excepting therefrom the sums paid for real property and the amount
of such capital stock held by the state and by any incorporated literary
or charitable institution, and

3. The tax district in which the principal office of the company
is situated or in case it has no principal office, the tax district in which
its operations are carried on.

Such statement shall be verified by the officer making the same
to the effect that it is in all respects just and true. If such statement
is not made within twenty days after the fifteenth day of June, or is
insufficient, evasive or defective, the assessors may compel the cor-
poration to make a proper statement by mandamus.

§ 28. Penalty for omission to make statement. In case of neglect
to furnish such statements within thirty days after the time above
provided, the company so neglecting shall forfeit to the people of
this state for each statement so omitted to be furnished, the sum of
two hundred and fifty dollars, and it shall be the duty of the attorney-
general to prosecute for such penalty upon information which shall be
furnished him by the comptroller. Upon such statement being fur-
nished and the costs of the suit being paid, the comptroller, if he
shall be satisfied that such omission was not wilful, may, in his dis-
cretion, discontinue such suit.

§ 32. Corporations, how assessed. The assessors shall assess cor-
porations liable to taxation in their respective tax districts upon their
assessment-rolls in the following manner:
TAX LAW. 447

1. In the first column the name of each corporation, and under
its name the amount of its capital stock paid in and secured to be
paid in; the amount paid by it for real property then owned by it
wherever situated; the amount of all surplus profits or reserve funds
exceeding ten per centum of its capital, after deducting therefrom
the amount of said real property and the amount of its stock, if any,
belonging to the state and to incorporated literary and charitable
institutions.

2. In the second column the quantity of real property except
special franchises owned by such corporation and situated within their
tax district.

3. In the third column the aciual value of such real property, ex-
cept special franchises.

4. In the fourth column the amount of the capital stock paid in
and secured to be paid in, and of all of such surplus profits or reserve
funds as aforesaid, after deducting the sums paid out for all the real
estate of the company, wherever the same may be situated, and then
belonging to it, and the amount of stock, if any, belonging to the
people of the state and to incorporated literary and charitable institu-
tions.

5. In the fifth column the value of any special franchise owned
by it as fixed by the state board of tax commissioners.

(STATE TAX.)

ARTICLE o9.
CORPORATION TAX.

Section 180. Organization tax.

181. License tax on foreign corporations.

182. Franchise tax on corporations.

183. Certain corporations exempt from tax on capital stock.

184. Additional franchise tax on transportation and transmis-
sion corporations and associations.

186. Franchise tax on water-works companies, gas com-
panies, electric or steam heating, lighting and power
companies.

192. Reports of corporations.

193. Value of stock to be appraised.

194. Further requirements as to reports of corporations.

195. Powers of comptroller to examine into affairs of cor-
porations.

196. Notice of statement of tax; interest.

197. Payment of tax and penalty for failure.

198. Revision and readjustment of accounts by comptroller.

199. Review of determination of comptroller by certiorari.

200. Regulations as to such writ of certiorari.

201. Warrant for the collection of taxes.

202. Information of delinquents.
448 NEW YORK CORPORATIONS.

203. Action for recovery of taxes; forfeiture of charter of
delinquent corporation.

205. Exemptions from other state taxation.

207. Limitation of time.

§ 180. Organization tax. Every stock" corporation incorporated
under any law of this state shall pay to the state treasurer a tax of
one-twentieth of one per centum upon the amount of capital stock
which the corporation is authorized to have, and a like tax upon any
subsequent increase. Provided, that in no case shall such tax be less
than one dollar. Such tax shall be due and payable upon the incor-
poration of such corporation or upon the increase of its capital stock.
Except in the case of a railroad corporation neither the secretary of
state nor county clerk shall file any certificate of incorporation or
article of association, or give any certificate to any such corporation
or association until he is furnished a receipt for such tax from the
state treasurer, and no stock corporation shall have or exercise any
corporate franchise or powers, or carry on business in this state until
such tax shall have been paid. And in case of a decrease of capital
stock, upon which the tax required by law has been paid, and a sub-
sequent increase thereof, a tax shall be paid only upon so much of
such increase as exceeds the amount of capital stock upon which a
tax has: been before paid. In case of the consolidation of existing
corporations into a corporation, such new corporation shall be required
to pay the tax hereinbefore provided for only upon the amount of
its capital stock in excess of the aggregate amount of capital stock
of said corporations. ‘This section shall not apply to state and national
banks or to building, mutual loan, accumulating fund and co-operative
associations. A railroad corporation need not pay such tax at the
time of filing its certificate of incorporation, but shall pay the same
before the public service commission shall grant a certificate, as
required by the railroad law, authorizing the construction of the road
as proposed in its articles of association, and such certificate shall not
be granted by the public service commission until it is furnished with
a receipt for such tax from the state treasurer.

§ 181. License tax on foreign corporations. Every foreign cor-
poration, except banking corporations, fire, marine, casualty and life
insurance companies, co-operative fraternal insurance companies, and
building and loan associations, authorized to do business under the
general corporation law, shall pay to the state treasurer, for the use
of the state, a license fee of one-eighth of one per centum for the
privilege of exercising its corporate franchises or carrying on its busi-
ness in such corporate or organized capacity in this state, to be com-
puted upon the basis of the capital stock employed by it within this state,
during the first year of carrying on its business in this state; and if any
year thereafter any such corporation shall employ an increased amount
of its capital stock within this state, the same license fee shall be due
and payable upon any such increase. The measure of the amount of
capital stock employed in this state shall be such a portion of the
issued capital stock as the gross assets employed in any business within
this state bear to the gross assets wherever employed in business. For
purposes of taxation, the capital of a corporation invested in the stock
of another corporation shall be deemed to be assets located where
the physical property represented by such stock is located. The
amount of capital upon which such taxes shall be paid shall be fixed
TAX LAW. 449

by the comptroller, who shall have the same authority to examine
the books and records in this state of such foreign corporations, and
the employees thereof, and the same power to issue his warrant for
the collection of such taxes, as he now has with regard: to domestic
corporations. No action shall be maintained or recovery had in any
of the courts in this state by such foreign corporation without obtaining
a receipt for the license fee hereby imposed within thirteen months
after beginning such business within the state, or if such a cor-
poration had, on October thirty-first, nineteen hundred and six, been
engaged in business within this state for more than twelve months,
without obtaining such receipt within thirty days after such tax is due.

§ 182. Franchise tax on corporations. For the privilege of doing
business or exercising its corporate franchises in this state every cor-
poration, joint-stock company or association, doing business in this
state, shall pay to the state treasurer annually, in advance, an annual
tax to be computed upon the basis of the amount of its capital stock,
employed during the preceding year within this state, and upon each
dollar of such amount. The measure of the amount of capital stock
employed in this state shall be such a portion of the issued capital
stock as the gross assets employed in any business within this state
bear to the gross assets wherever employed in business. For purposes
of taxation, the capital of a corporation invested in the stock of another
corporation shall be deemed to be assets located where the physical
property represented by stch stock is located. If the dividends upon
the capital stock amount to six, or more than six per centum upon
the par value of the capital stock, during any year ending with the
thirty-first day of Octcber, the tax shall be at the rate of one-quarter of
a mill for each one per centum of dividends made or declared upon
the par value of the capital stock during said year. If such dividend
or dividends amount to less than six per centum on the par value of
the capital stock, and

(1) The assets do not exceed the liabilities, exclusive of capital
stock, or

(2) The average price at which such stock sold during said year
did not equal or exceed its par value, or

(3) If no dividend was declared,

Then each dollar of the amount of capital stock employed in this
state, determined as hereinbefore provided, shall be taxed at the rate
of three-fourths of one mill. If such dividend or dividends amount to
less than six per centum on the par value of the capital stock, and

(1) The assets exceed the liabilities, exclusive of capital stock,
by an amount equal to or greater than the par value of the capital
stock, or

(2) The average price at which such stock sold during said year
is equal to or greater than the par value,

Then the amount of capital stock, determined as hereinbefore pro-
vided to be employed in this state, shall be taxed at the rate of one
and one-half mills on each dollar of the valuation of the capital stock
employed in this state, but such valuation shall not be less than

(1) The par value of such stock,

(2) The difference between the assets and liabilities, exclusive
of capital stock,

(3) The average price at which such stock sold during said year.

If such corporation, joint-stock company or association shall have
more than one kind of capital stock, and upon one of such kinds of
450 NEW YORK CORPORATIONS.

stock a dividend or dividends amounting to six or more than six per
centum upon the par value thereof, has been made or declared, and
upon the other no dividend has been made or declared, or the dividend
or dividends made or declared thereon amount to less than six per
centum upon the par value thereof, then the tax shall be at the rate
of one-quarter of a mill for each one per centum of dividends made
or declared upon the capital stock upon the par value of which the
dividend or dividends made or declared amount to six or more than
six per centum, and in addition thereto a tax shall be charged upon
the capital stock

(1) Upon which no dividend was made or declared, or

(2) Upon which the dividend or dividends made or declared
did not amount to six per centum upon the par value,

At the rate as hereinbefore provided for the taxation of capital
stock upon which no dividend was made or declared, or upon which
the dividend or dividends made or declared did not amount to six
per centum on the par value.

All corporations not taxable under the preceding paragraphs of
this section shall be taxed in an amount not less than would be pro-
duced by an assessment of one and one-half mills on each one dollar
of the actual value of its capital stock, determined to be employed in
this state as hereinbefore provided, or one and one-half mills upon
each dollar of ‘such capital stock at the average price at which said
stock sold during the said year.

§ 183. Certain corporations exempt from tax on capital stock.
Banks, savings banks, institutions for savings, title guaranty, insur-
ance or surety corporations, every trust company incorporated,
organized or formed, under, by or pursuant to a law of this state, and
any company authorized to do a trust company business, solely or in
connection with any other business, under a general or special law of
this state, laundering corporations, manufacturing corporations to the
extent only of the capital actually employed in this state in manufac-
turing, and in the sale of the product of such manufacturing, mining
corporations wholly engaged in mining ores within this state, agricul-
tural and horticultural societies or associations, and corporations, joint-
stock companies or associations owning or operating elevated railroads
or surface railroads not operated by steam, or formed for supplying
water or gas for electric or steam heating, lighting or power purposes,
and liable to a tax under sections one hundred and eighty-five and
one hundred and eighty-six of this chapter, shall be exempt from
the payment of the taxes prescribed by section one hundred and
eighty-two of this chapter. But such a laundering, manufacturing
or mining corporation shall not be exempted from the payment of
such tax, unles# at least forty per centum of the capital stock of such
corporation is invested in property in this state and used by it in its
laundering, manufacturing or mining business in this state.

§ 184. Additional franchise tax on transportation and transmis-
sion corporations and associations. Every corporation and joint-stock
association formed for steam surface railroad, canal, steamboat, ferry,
express, navigation, pipe-line, transfer, baggage express, telegraph,
telephone, palace car or sleeping car purposes, and every other trans-
portation corporation not liable to taxation under sections one hun-
dred and eighty-five or one hundred and eighty-six of this chapter,
shall pay for the privilege of exercising its corporate franchises or
TAX LAW. 451

carrying on its business in such corporate or organized capacity in
this state, an annual excise tax or license fee which shall be equal to
five-tenths of one per centum upon its gross earnings within this state,
which shall include its gross earnings from its transportation or trans-
mission business originating and terminating within this state, but shall
not include earnings derived from business of an interstate character.

§ 186. Franchise tax on water-works companies, gas companies,
electric or steam heating, lighting and power companies. Every cor-
poration, joint-stock company or association formed for supplying
water or gas, or for electric or steam heating, lighting or power pur-
poses, shall pay to the state for the privilege of exercising its corpor-
ate franchises or carrying on its business in such corporate or
organized capacity in this state, an annual tax which shall be five-tenths
of one per centum upon its gross earnings from all sources within
this state, and three per centum upon the amount of dividends de-
clared or paid in excess of four per centum upon the actual amount of
paid-up capital employed by such corporation, joint-stock company
or association. The term “gross earnings” as used in this section
means all receipts from the employment of capital without any deduc-
tion.

§ 192. Reports of corporations. Corporations liable to pay a tax
under this article shall report as follows:

1. Corporations paying franchise tax. Every corporation, associa-
tion or joint-stock company liable to pay a tax under section one
hundred and eighty-two of this chapter shall, on or before November
fifteenth in each year, make a written report to the comptroller of its
condition at the close of its business on October thirty-first preceding,
stating the amount of its authorized capital stock, the amount of stock
paid in, the date and rate per centum of each dividend declared by it
during the year ending with such day, the entire amount of the capital
of such corporation, and the capital employed by it in this state during
such year.

4. Water-works, gas, electric, steam-heating, lighting and power
corporations. Every corporation, joint-stock company or association
liable to pay a tax under section one hundred and eighty-six of this
chapter, shall, on or before December first of each year, make a writ-
ten report to the comptroller of its condition at the close of its business
on October thirty-first preceding, stating the amount of its gross earn-
ings from business done in this state, the amount of dividends of every
nature declared or paid during the year ending with October thirty-first,
the authorized capital of the company and the amount of capital stock
actually issued and outstanding.

§ 193. Value of stock to be appraised. If the dividend or divi-
dends amount to less than six per centum on the par value of the
capital stock, or no dividend is declared, the president, treasurer or
secretary of the company liable to pay a tax under the provisions of
section one hundred and eighty-two of this chapter, shall, under oath,
between the first and fifteenth days of November in each year, estimate
and appraise the capital stock of such company at its actual value.

And shall forward the same to the comptroller with the report
provided for in the last section. If the comptroller is not satisfied
with the valuation so made and returned he is authorized and empow-
ered to make a valuation thereof, and settle an account upon the valua-
452 NEW YORK CORPORATIONS.

tion so made by him, and the taxes, penalties and interest to be paid
the state.

§ 194. Further requirements as to reports of corporations, Every
report required by this article shall have annexed thereto the affidavit
of the president, vice-president, secretary or treasurer of the corpora-
tion, association or joint-stock company or of the person or one of
the persons, or the members of the partnership making the same,
to the effect that the statements contained therein are true. Such
reports shall contain any other data, information or matter which
the comptroller may require to be included therein, and he may
prescribe the form in which such reports shall be made and the
form of oath thereto. When so prescribed such forms shall be used
in making the report. The comptroller may require at any time a
further or supplemental report under this article, which shall con-
tain information and data upon such matters as the comptroller may
specify.

§ 195. Powers of comptroller to examine into affairs of cor-
porations. In case any report required by any of the preceding
sections of this article shall be unsatisfactory to the comptroller,
or if any such report is not made as herein required, the comptroller
is authorized to make an estimate of the dividends paid by such
corporation and the value of the capital stock employed by it, from
any such report or from any other data, and to order and state an
account according to the estimate and value so. made by him for the
taxes, percentage and interest due the state from such corpora-
tion, association, joint-stock company, person or partnership. The
comptroller shall also have power to examine or cause to be exam-
ined, in case of a failure to report or in case the report is unsatis-
factory to him, the books and records of any such corporation, joint-
stock association, company, foreign banker, person or partnership, and
may hear testimony and take proofs material for his information,
either personally or he may appoint a commissioner by a written ap-
pointment under his hand and official seal for that purpose. Every
commissioner so appointed shall be authorized to make such examina-
tion and take such testimony and hear such proofs and report the
proofs and testimony so taken and the result of his examination so
made and the facts found by him to the comptroller. The comptroller
shall, therefrom, or from any other data which shall be satisfactory
to him, order and state an account for the tax due the state, together
with the expenses of such examination and the taking of such testi-
mony and proofs. Such expenses shall be fixed and adjusted by the
comptroller. a

§ 196. Notice of statement of tax; interest. Upon auditing and
stating every account for taxes or other charges under this article, the
comptroller shall forthwith send notice thereof in writing to the person,
partnership, company, association or corporation against whom the
same is made, which notice may be mailed to the post-office address of
such person, partnership, association, company or corporation. All
accounts so audited and stated shall bear interest upon the total amount
found due thereon to the state, for taxes, percentage, interest and other
charges, from the expiration of thirty days after sending such notice
until payment thereof shall be made.
TAX LAW. 453

§ 197. Payment of tax and penalty for failure. A tax imposed by
section one hundred and eighty-two or one hundred and eighty-six of
this chapter shall be due and payable into the state treasury on or
before the fifteenth day of January in each year. A tax imposed by
section one hundred and eighty-four of this chapter on a transporta-
tion or transmission corporation, or by section one hundred and eighty-
five, on elevated railroads or surface railroads not operated by steam,
shall be due and payable into the state treasury on or before the first
day of August in each year. A tax imposed by section one hundred
and eighty-seven of this chapter on an insurance corporation shall be
due and payable into the state treasury on or before the first day of
June in each year. A tax imposed by section one hundred and eighty-
eight or one hundred and eighty-nine shall be due and payable into
the state treasury on or before the first day of September in each
year. A tax imposed by section one hundred and ninety-one of this
chapter on a foreign banker shall be due and payable into the state
treasury on or before February first in each year. If such tax in any
case is not paid within thirty days after the same becomes due, or if
the report of any such corporation is not made within the time re-
quired by this article, the corporation, association, joint-stock company,
person or partnership, liable to pay the tax, shall pay into the state
treasury, in addition to the amount of such tax, a sum equal to five
per centum thereof, and one per centum additional for each month the
tax remains unpaid, which sum shall be added to the tax and paid
or collected therewith. Every corporation, association, joint-stock
company, person or partnership failing to make the annual report
required by this article, or failing to make any special report.
required by the comptroller, within any reasonable time to be specified
by him, shall forfeit to the people of the state the sum of one hundred
dollars for every such failure, and the additional sum of ten dollars
for each day that such failure continues. Such tax shall be a lien upon
and bind all the real and personal property of the corporation, joint-
stock company or association liable to pay the same from the time
when it is payable until the same is paid in full.

§ 198. Revision and readjustment of accounts by comptroller. If
an application be filed with the comptroller by the party against whom
the account is stated or by the attorney-general within one year from
the time any such account shall have been audited and stated, the
comptroller may, at any time, upon notice thereof sent to the person,
partnership, company, association or corporation against whom it is
stated, revise and readjust such account and if it shall be made to
appear upon any such application, by evidence submitted to him or
otherwise, that any such account included taxes or other charges which
could not have been lawfully demanded, or that payment has been
legally made or exacted of any such account, he shall resettle the
same according to law and the facts, and charge or credit, as the case
may require, the difference, if any, resulting from such revision or
resettlement upon the accounts for taxes of or against any such person,
partnership, company, association or corporation. Such credit, whether
allowed before or after the passage of this chapter may be, by the
person, partnership, company, association or corporation in whose
favor it is allowed, assigned to a person, partnership, company, asso-
ciation or corporation liable to pay taxes under article nine of this
chapter, and the assignee of the whole or any part of such credit on
filing with the comptroller such assignment shall thereupon be entitled
454 NEW YORK CORPORATIONS.

to credit on the books of the comptroller for the amount thereof on
the current account for taxes of such assignee in the same way and
with the same effect as though the credit had originally been allowed
in favor of such assignee. The comptroller shall forthwith send writ-
ten notice of his determination upon such application to the applicant,
and to the attorney-general, which notice may be sent by mail to his
post-office address.

§ 199. Review of determination of comptroller by certiorari. The
-determination of the comptroller upon any application made to him
by any person, partnership, company, association or corporation for a
revision and resettlement of any account, as prescribed in this article,
may be reviewed both upon the law and the facts upon certiorari by
the supreme court at the instance of any person, partnership, company,
association or corporation affected thereby, and in the name and on
behalf of the people of the state. For the purpose of such review
the comptroller shall return, on such certiorari, the accounts and all
the evidence before him on such application, and all the papers and
proofs upon the original statement of such account and all proceed-
ings thereon. If the original or resettled accounts shall be found
erroneous or illegal, either in point of law or of fact, by the supreme
court, upon any such review, the accounts reviewed shall then be cor-
rected and restated, and from any determination of the supreme court
upon any such review an appeal to the court of appeals may be taken
by either party.

§ 200. Regulations as to such writ of certiorari. No certiorari
to review any audit and statement of an account or any determination
by the comptroller under this article shall be granted unless notice
of application therefor is made within thirty days after the service
of the notice of such determination. Eight days’ notice shall be given
to the comptroller of the application for such writ. The full amount
of the taxes, percentage, interest and other charges audited and stated
in such account must be deposited with the state treasurer before
making the application and an undertaking filed with the comptroller,
in such amount and with such sureties as a justice of the supreme
court shall approve, to the effect that if such writ is dismissed or the
determination of the comptroller affirmed, the applicant for the writ
will pay all costs and charges which may accrue against him or it in
the prosecution of the writ, including costs of all appeals.

§ 201. Warrant for the collection of taxes. After the expiration
of thirty days from the sending by the comptroller of a notice of a
statement of an account as provided in this article, unless the amount
of such account shall have been paid or deposited with the state
treasurer, if an appeal or other proceedings have been taken to review
the same, and the undertaking given as provided in this article, the
comptroller may issue a warrant under his hand and official seal,
directed to the sheriff of any county of the state, commanding him to
levy upon and sell the real and personal property of the person, part-
nership, company, association or corporation against which such ac-
count is stated, found within his county for the payment of the amount
thereof with interest thereon and costs of executing the warrant, and
to return such warrant to the comptroller and pay to the state treas-
urer the money collected by virtue thereof, by a time to be therein
specified, not less than sixty days from the date of the warrant. Such
TAX LAW. 455

warrant shall be a lien upon and shall bind the real and personal prop-
erty of the person, partnership, company, association or corporation
against which it is issued, from the time an actual levy shall be made
by virtue thereof. The sheriff to whom any such warrant shall be
directed shall proceed upon the same in all respects, with like effect,
and in the same manner as prescribed by law in respect to executions
issued against property upon judgments of a court of record, and shall
be entitled to the same fees for his services in executing the warrant,
to be collected in the same manner.

§ 202. Information of delinquents. It shall be the duty of any
person having knowledge of the evasion of taxation under this article
by any corporation, association, joint-stock company, partnership or
person liable to taxation thereunder, or any omission on their part to
make the reports required by this article, to make a written report
thereof to the comptroller of the state, with such information as may
be in his possession as may lead to the recovery of any taxes due the
state therefrom. If, in his opinion, the interests of the state require
it, the comptroller may employ such person to assist in the collection
and preparation of evidence and in the prosecution and trial of actions
for such taxes, and so much of the same, not exceeding ten per centum
thereof, as may be collected from any sttch delinquent corporation,
association, company, partnership or person, by reason of such report
and such services, as shall have been agreed upon between such person
and the comptroller or attorney-general as a compensation therefor,
shall be paid to such person, and nothing shall be paid to such person
for such report or services unless there shall be a recovery of taxes by
reason thereof.

§ 203. Action for recovery of taxes; forfeiture of charter of de-
linquent corporation. An action may be brought by the attorney-
general, at the instance of the comptroller, in the name of the state,
to recover the amount of any account audited and stated by the comp-
troller under the provisions of this article. If any such account shall
remain unpaid at the expiration of one year after notice of the state-
ment thereof has been sent as required by this article, and the comp-
troller is satisfied that the failure to pay the same is intentional, he
shall so report to the attorney-general, who shall immediately bring
an action, in the name of the people of the state, for the forfeiture
of the franchise of any corporation, joint-stock company or association
failing to make such payment, and if it is found that such failure was
intentional, judgment shall be rendered in such action for the forfeiture
of its franchise and for its dissolution, and thereafter such franchise
shall be annulled.

§ 205. Exemptions from other state taxation. The personal prop-
erty of every corporation, company, association or partnership, taxable
under this article, other than for an organization tax, shall be exempt
from assessment and taxation upon its personal property for state
purposes, if all taxes due and payable under this article have been paid
thereby. The personal property of every corporation taxable under
section one hundred and eighty-eight of this article, other than for
an organization tax, and as provided in the banking law, shall be
exempt from assessment and taxation for all other purposes. ‘The
personal property of a private or individual banker, actually employed
in his business as such banker, shall be exempt from taxation for state
456 NEW YORK CORPORATIONS.

purposes, if such private or individual banker shall have paid all taxes
due and payable under this article. Such corporation and private or
individual banker shall in no other respect be relieved from assessment
and taxation by reason of the provisions of this article. The owner
and holder of stock in an incorporated trust company liable to taxation
under the provisions of this chapter shall not be taxed as an individual
for such stock. Personal property exempted from taxation by this
section shall not include shares of stock of banks and banking asso-
ciations taxable under the provisions of section twenty-four of this
chapter.

§ 207. Limitation of time. The provisions of the code of civil
procedure relative to the limitation of time of enforcing a civil remedy
shall not apply to any proceeding or action taken to levy, appraise,
assess, determine or enforce the collection of any tax or penalty pre-
scribed by this article, and this section shall be construed as having
nee in effect as of date of the original enactment of the corporation
tax law.

(STOCK TRANSFER TAX.)

ARTICLE 12.
TAX ON TRANSFERS OF STOCK.

Section 270. Amount of tax.
271. Stamps how prepared and sold.
272. Penalty for failure to pay tax.
273. Canceling stamps; penalty for failure.
274. Contracts for dies; expenses how paid.
275. Illegal use of stamps; penalty.
276. Power of state comptroller.
277. Civil penalty; how recovered.
278. Effect of failure to pay tax.
279. Application of taxes.

§ 270. Amovnt of tax. There is hereby imposed and there shall
immediately accrue and be collected a tax, as herein provided, on all
sales, or agreements to sell, or memoranda of sales, or deliveries, or
transfers, of shar@s or certificates of stock, in any domestic or foreign
association, company or corporation, made after the first day of June,
nineteen hundred and five, whether made upon or shown by the books
of the association, company or corporation, or by any assignment in
blank, or by any delivery, or by any paper or agreement or memoran-
dum or other evidence of transfer or sale whether entitling the holder
in any manner to the benefit of such stock, or to secure the future
payment of money or the future transfer of any stock, on each share
of one hundred dollars of face value or fraction thereof,* two cents.

* The provision requiring payment of two cents on each share regardless of its par

value. was declared unconstitutional in the case oi People ex rel Farri i
187 N. ¥. (1907). (See 2151 of present volume.) : SHERETOR vet necel ats
TAX LAW. 457

It is not intended by this section to impose a tax upon an agreement
evidencing the deposit of stock certificates as collateral security for
money loaned thereon which stock certificates are not actually sold,
nor upon such stock certificates so deposited. The payment of such
tax shall be denoted by an adhesive stamp or stamps affixed as fol-
lows: In a case where the evidence of transfer is shown only by the
books of the company the stamp shall be placed upon such books; and
where the change of ownership is by transfer of a certificate the stamp
shall be placed upon the certificate; and in cases of an agreement to
sell or where the transfer is by delivery of the certificate assigned in
blank there shall be made and delivered by the seller to the buyer a
bill or memorandum of such sale to which the stamp provided for by
this article shall be affixed; and every bill or memorandum of sale or
agreement to seil before mentioned shall show the date thereof, the
name of the seller, the amount of the sale, and the matter or thing to
which it refers, and no further tax is hereby imposed upon the deliv-
ery of the certificate of stock, or upon the actual issue of a new cer-
tificate when the original certificate of stock is accompanied by the
duly stamped memorandum of sale. The comptroller may, upon satis-
factory proof that stamps have been erroneously affixed and canceled
in payment of the tax upon a transfer and to the loss of an innocent
person, refund the amount thereof from appropriations made for neces-
sary expenses under this article, provided the tax justly due is paid
upon such transfer.

§ 271. Stamps how prepared and sold. Adhesive stamps for the
purpose of paying the state tax provided for by this article shall be
prepared by the state comptroller, in such form, and of such denomi-
nations and in such quantities as he may from time to time prescribe,
and shall be sold by him to the person or persons desiring to purchase
the same; he shall make provision for the sale of such stamps in such
places and at such times as in his judgment he may deem necessary.

§ 272. Penalty for failure to pay tax. Any person or persons
who shall make any sale or transfer without paying the tax by this
article imposed or who shall in pursuance of any sale or agreement
deliver any stock, or evidence of the sale of or agreement to sell any
stock or bill or memorandum thereof, without having the stamps
provided for in this article affixed thereto, shall be deemed guilty of a
misdemeanor, and upon conviction thereof shall pay a fine of not less
than five hundred nor more than one thousand dollars, or be imprisoned
not more than six months, or by both such fine and imprisonment at
the discretion of the court.

§ 273. Canceling stamps; penalty for failure. In every case
where an adhesive stamp shall be used to denote the payment of the
state tax provided by this article the person using or affixing the same
shall write or stamp thereupon the initials of his name and the date
upon which the same shall be attached or used, and shall cut or per-
forate the stamp in a substantial manner, so that such stamp can not
be again used; and if any person fraudulently makes use of an adhesive
stamp to denote the state tax imposed by this article, without so ef-
fectually canceling and obliterating such stamp such person shall be
deemed guilty of a misdemeanor, and upon conviction thereof shall pay
a fine of not less than two hundred nor more than five hundred dollars
458 NEW YORK CORPORATIONS.

or be imprisoned for not less than six months, or both, at the discretion
of the court.

§ 274. Contracts for dies; expenses how paid. The state comp-
troller is hereby directed to make, enter into and execute for and in
behalf of the state such contract or contracts for dies, plates and print-
ing necessary for the manufacture of the stamps provided for by this
article, and provide such stationery and clerk hire together with such
books and blanks as in his discretion may be necessary for putting
into operation the provisions of this article; he shall be the custodian
of all stamps, dies, plates or other material or thing furnished by him
and used in the manufacture of such state tax stamps, and all expenses
incurred by him and under his direction in carrying out the provisions
of this article shall be paid to him by the state treasurer from any
moneys appropriated for such purpose.

§ 275. Illegal use of stamps; penalty. Any person who shall wil-
fully remove or cause to be removed, alter or cause to be altered the
canceling or defacing marks of any adhesive stamp provided for by this
article with intent to use the same, or to cause the use of the same
after it shall have been once used, or shall knowingly or wilfully sell or
buy any washed or restored stamp, or offer the same for sale, or give
or expose the same to any person for use, or knowingly use the same
or prepare the same with intent for the further use thereof; or shall
wilfully use any counterfeit stamp or any forged stamp with intent to
defraud the state of New York, shall be guilty of a misdemeanor and on
conviction thereof shall be liable to a fine of not less than five hundred
nor more than one thousand dollars, or be imprisoned for not more
than six months, or by both such fine and imprisonment, at the dis-
cretion of the court.

§ 276. Power of state comptroller. Every person, firm, company,
association or corporation making a sale, agreement to sell, delivery,
or transfer, of shares or certificates of stock, or conducting or trans-
acting a brokerage business shall keep or cause to be kept a just and
true book of account wherein shall be plainly and legibly recorded the
date of making every sale, agreement to sell, delivery, or transfer, of
shares or certificates of stock, and every transaction in relation to any
stock; the number of shares, the total amount covered by each such
sale, agreement to sell, delivery, transfer or transaction, and the name
of the other party thereto, and such book shall at all times be subject
to the inspection of the comptroller, or any of his representatives be-
tween the hours of ten o’clock in the forenoon and three o’clock in the
afternoon, except on Saturdays, Sundays, and legal holidays. The state
comptroller may, at any time after transfers of stock which by the
provisions of th¥s article are subject to a state stamp tax, inquire into
and ascertain whether the tax imposed by the provisions of this article
has been paid. For the purpose of ascertaining such fact the comp-
troller shall have the right and it shall be his duty to examine the
books and papers of any person, firm, company, association or cor-
poration, and memoranda of transfers shall remain accessible for such
inspection for three months from their respective dates. The state
comptroller may enforce his right to examine the books and papers
of any person, firm, company, association or corporation by mandamus.
If from such examination the comptroller ascertains that the tax
provided for in this article has not been paid he shall bring an action
TAX LAW. 459

in his name as such comptroller in any court of competent jurisdiction
for the recovery of such tax and for any penalty incurred by any person
under the provisions of this article. Every person, firm, company,
association or corporation who shall refuse to permit the comptroller
or any of his representatives to inspect such books or any memoran-
dum or record relating to such sale, agreement to sell, delivery, or
transfer, or transaction at any time as above provided, or who shall
fail to keep such book of account, or who shall in any other respect
violate any of the provisions of this section shall be deemed guilty of
a misdemeanor and on conviction thereof shall for each and every
such offense pay a fine of not less than five hundred dollars nor more
than five thousand dollars, or be imprisoned not less than three months
nor more than two years, or both at the discretion of the court.

§ 277. Civil penalty; how recovered. Any person who shall
violate the provisions of this article shall in addition to the penalties
herein provided forfeit to the people of the state a civil penalty of five
hundred dollars for each violation. The state comptroller shall bring
an action in his name as such comptroller in any court of competent
jurisdiction for the recovery of any civil penalty and all moneys col-
lected by him shall be paid into the state treasury.

§ 278. Effect of failure to pay tax. No transfer of stock made
after June first, nineteen hundred and five, on which a tax is imposed
by this article, and which tax is not paid at the time of such transfer,
shall be made the basis of any action or legal proceedings, nor shall
proof thereof be offered or received in evidence in any court in this
state.

§ 279. Application of taxes. The taxes imposed under this article
and the revenues thereof shall be paid by the state comptroller into the
state treasury and be applicable to the general fund, and to the pay-
ment of all claims and demands which are a lawful charge thereon.
CODE OF CIVIL PROCEDURE.

Provisions Affecting Corporations.

Summons.

§ 431. How personal service of summons made upon a domestic
corporation. Personal service of the summons upon a defendant, being
a domestic corporation, must be made by delivering a copy thereof,
within the State, as follows:

3. * * * to the president or other head of the corporation,
the secretary or clerk to the corporation, the cashier, the treasurer, or
a director or managing agent.

§ 432. Idem; upon a foreign corporation, Personal service of the
summons upon a defendant, being a foreign corporation, must be made
by delivering a copy thereof, within the state, as follows:

1. To the president, vice-president, treasurer, assistant treas-
urer, Secretary or assistant secretary; or, if the corporation lacks either
of those officers, to the officer performing corresponding functions,
under another name.

2. Toa person designated for the purpose as provided in section
sixteen of the general corporation law.

3. If such a designation is not in force, or if neither the person
designated, nor an officer specified in subdivision first of this section,
can be found with due diligence, and the corporation has property
within the state, or the cause of action arose therein; to the cashier, a
director, or a managing agent of the corporation, within the state.

4. Ji the person designated as provided in section sixteen of the
general corporation law dies or removes from the place where the
corporation has its principal place of business within the state and the
corporation does not within thirty days after such death or removal
designate in like manner another person upon whom process against it
may be served within the state, process against the corporation in an
action upon any liability incurred within this state or if the corpora-
tion has property within the state may after such death, removal or
revocation and before another designation is made be served upon
the secretary of state.

[As amended by L. 1909, Ch. 65.]

§ 433. Service of a process, etc. The provisions of this article,
relating to the mode of service of a summons, apply likewise to the
service of any process or other paper, whereby a special proceeding
is commenced in a court, or before an officer, except a proceeding to
punish for contempt, and except where special provision for the service
thereof is otherwise made by law.

460
CODE OF CIVIL PROCEDURE. 461

Pleadings.

§ 525. Verification; how and by whom made. The verification
must be made by the affidavit of the party, or, if there are two or
more parties united in interest, and pleading together, by at least one
of them, who is acquainted with the facts, except as follows:

1. Where the party is a domestic corporation, the verification
must be made by an officer thereof. * * * :

3. Where the party is a foreign corporation; or where the party
is not within the county where the attorney resides, or if the latter
is not a resident of the state, the county where he has his office, and
capable of making the affidavit; or, if there are two or more parties
united in interest, and pleading together, where neither of them, ac-
quainted with the facts, is within that county and capable of making
the affidavit; or where the action or defense is founded upon a written
instrument for the payment of money only, which is in the possession
of the agent or the attorney; or where all the material allegations of
the pleading are within the personal knowledge of the agent or the
attorney; in either case the verification may be made by the agent of
or the attorney for the party.

Injunction,

§ 610. Order must recite ground (for injunction); service of
order. The injunction order must briefly recite the grounds for the
injunction. Where it is granted by the court, it must be served by
delivering a certified copy thereof; where it is granted by a judge, it
must be served by showing the original order, and delivering a copy
thereof. Service of the order, upon a corporation, may be made as
prescribed in this act, for making personal service of a summons upon
a corporation. Copies of the papers, upon which the order was granted,
must be delivered with the copy of the order.

Attachment.

§ 636. What must be shown to procure the warrant. To entitle
the plaintiff to such a warrant, he must show, by affidavit, to the satis-
faction of the judge granting the same, as follows:

1. That one of the causes of action specified in the last section
exists against the defendant. If the action is to recover damages for
breach of a contract, the affidavit must show that the plaintiff is en-
titled to recover a sum stated therein, over and above all counter-
claims known to him.

2. That the defendant is either a foreign corporation or not a
resident of the state; or, if he is a natural person and a resident of
the state, that he has departed therefrom, with intent to defraud his
creditors, or to avoid the service of a summons, or keeps himself con-
cealed therein with the like intent; or, if the defendant is a natural
person or a domestic corporation, that he or it has removed, or is
about to remove, property from the state, with intent to defraud his
or its creditors; or has assigned, disposed of, or secreted, or is about
to assign, dispose of, or secrete property, with the like intent; or
where, for the purpose of procuring credit, or the extension of credit,
the defendant has made a false statement in writing, under his own
hand or signature, or under the hand or signature of a duly authorized
agent, made with his knowledge and acquiescence as to his financial
responsibility or standing. * * *
462 NEW YORK CORPORATIONS.

§ 646. Attachment of unpaid subscription to foreign corporation.
Under a warrant of attachment against a foreign corporation, other
than a corporation created by or under the laws of the United States,
the sheriff may levy upon the sum remaining unpaid upon a subscrip-
tion to the capital stock of the corporation, made by a person within
the county; or upon one or more shares of stock therein, held by
such a person, or transferred by him, for the purpose of avoiding
payment thereof.

§ 647. Attachment; interest in corporation. The rights or shares
which the defendant has in the stock of an association or corporation,
together with the interest and profits thereon, may be levied upon,
and the sheriff’s certificate of the sale thereof entitles the purchaser
to the same rights and privileges, with respect thereto, which the de-
fendant had, when they were so attached.

' § 648. Attachment; negotiable instruments. The attachment may
algo be levied upon a cause of action arising upon contract; including
a bond, promissory note, or other instrument for the payment of
money only, negotiable or otherwise, whether past due, or yet to
become due, executed by a foreign or domestic government, state,
county, public officer, association, municipal or other corporation, or by
a private person, either within or without the state, which belongs
to the defendant, and is found within the county. The levy of the
attachment thereupon is deemed a levy upon, and a seizure and attach-
ment of, the debt represented thereby.

§ 649. How property to be attached. A levy under a warrant of
attachment must be made as follows:

* * °K * * * *

3. Upon other personal property, by leaving a certified copy of
the warrant, and a notice showing the property attached with the
person holding the same; or, if it consists of a demand, other than as
specified in the last subdivision, with the person against whom it exists;
or, if it consists of right or share in the stock of an association or
corporation, or interests or profits thereon, with the president, or other
head of the association or corporation, or the secretary, cashier, or
managing agent thereof.

§ 650. Certificate of defendant’s interest to be furnished. Upon
the application of a sheriff, holding a warrant of attachment, the presi-
dent or other head of an association or corporation, or the secretary,
cashier, or managing agent thereof, or a debtor of the defendant,
or a person hajding property, including a bond, promissory note,
or other instrument for the payment of money, belonging to the
defendant, must furnish to the sheriff a certificate, under his hand,
specifying the rights or number of shares of the defendant, in the
stock of the association or corporation, with all dividends declared,
or incumbrances thereon; or the amount, nature, and description of
the property, held for the benefit of the defendant, or of the defendant’s
interest in property so held, or of the debt or demand owing to the
defendant, as the case requires.

§ 651. Person refusing certificate may be examined. If a person
to whom application is made, as prescribed in the last section, refuses
CODE OF CIVIL PROCEDURE. 463

to give such a certificate; or if it is made to appear, by affidavit, to
the satisfaction of the court, or a judge thereof, or the county judge
of the county to which the warrant is issued, that there is reason to
suspect that a certificate given by him, is untrue, or that it fails fully
to set forth the facts, required to be shown thereby; the court
or judge may make an order, directing him to attend, at a specified
time, and at a place within the county to which the warrant is issued,
and submit to an examination under oath, concerning the same. The
order may, in the discretion of the court or judge, direct an appearance
before a referee named therein.

§ 707. Only attached property bound when summons not per-
sonally served. Where a defendant, who has not appeared, is a non-
resident of the state, or a foreign corporation, and the summons was
served without the state, or by publication, pursuant to an order ob-
tained for that purpose, as prescribed in chapter fifth of this act, the
judgment can be enforced only against the property which has been
levied upon, by virtue of the warrant of attachment, at the time when
the judgment is entered. But this section does not declare the effect of
such a judgment, with respect to the application of any statute of
limitation.

Preferred and Deferred Causes.

§ 7o1. Preference among civil actions. Civil causes are entitled to
preference among themselves, in the trial or hearing thereof, in the
following order, next after the causes specified in the last section but
one:

* * * & * * * *

8. An action against a corporation founded upon a note or
other evidence of debt, for the absolute payment of money. An action
upon an undertaking given upon an appeal to the Court of Appeals
or to stay the execution on an appeal to the Court of Appeals.

Oaths and Affirmations.

§ 839. Admission by member of corporation. The admission of
a member of an aggregate corporation, who is not a party, shall not
be received as evidence against the corporation, unless it was made
concerning and while engaged in a transaction in which he was the
authorized agent of the corporation.

Documentary Evidence.

§ 929. Book of foreign corporation; when evidence. Where a
party wishes to prove an act or transaction of a foreign corporation,
the book or books of the corporation may be used for that purpose,
as presumptive evidence, whether any or all of the parties are or are
not members of the corporation.

§ 930. When a copy thereof is evidence. If an original book is
not produced at the trial, as prescribed in the last section, a copy
thereof, or of an entry therein, verified as prescribed in the next sec-
tion, may be used, with like effect as the original book; provided that
the party, intending to use the copy, gives the adverse party at least
ten days’ notice of his intention, specifying briefly the nature of the
464 NEW YORK CORPORATIONS.

evidence proposed to be given. But this and the next section do not
apply, where the foreign corporation is a party to the action, and
seeks to prove its own act or transaction, in its own behaif.

§ 931. How copy to be verified. The copy must be verified by
the deposition, taken as prescribed by law, or the oral testimony,
taken at the trial, of the person who made it, or of a person who has
examined and compared it with the original book, or the entry therein.
The witness must testify that the copy produced is correct; that he
made it, or compared it with the original; and that he then knew that
the original book so copied, or containing the entry, was the book of
the corporation; or that it was then acknowledged to him to be such,
by an officer or receiver of the corporation, or a person having the
custody thereof, naming the person who made the acknowledgment;
and he must specify where, and in whose custody, the original was
then kept.

§ 931a. Copy of designation of person upon whom to make serv-
ice, as evidence... An exemplified copy of a designation of a person
upon whom to make service filed by a foreign corporation as pro-
vided in section sixteen of the general corporation law accompanied
with a certificate that it has not been revoked, is presumptive evi-
dence of the execution thereof, and conclusive evidence of the authority
of the officer executing it.

[As added by L. 1909, Ch. 65.]

Actions.

§ 1775. Complaint in actions by or against corporations. In an
action brought by or against a corporation, the complaint must aver
that the plaintiff, or the defendant, as the case may be, is a corpora-
tion; must state whether it is a domestic corporation or a foreign
corporation; and, if the latter, the state, country or government, by
or under whose laws it was created. But the plaintiff need not set
forth, or specially refer to, any act or proceeding, by or under which
the corporation was created.

§ 1776. When proof of corporate existence unnecessary. In an
action, brought by or against a corporation, the plaintiff need not
prove, upon the trial, the existence of the corporation, unless the
answer is verified, and contains an affirmative allegation that the
plaintiff, or the defendant, as the case may be, is not a corporation.

§ 1777. Misnomer, when waived. In an action or special pro-
ceeding, brought by or against a corporation, the defendant is deemed
to have waived any mistake in the statement of the corporate name,
unless the misnomer is pleaded in the answer, or other pleading in
the defendant’s behalf.

§ 1778. Action against a corporation upon a note, etc. In an
action against a foreign or domestic corporation, to recover damages
for the non-payment of a promissory note, or other evidence of debt,
for the absolute payment of money, upon demand, or at a particular
time, an order, extending the time to answer or demur, shall not be
granted, except by the court, upon notice to the plaintiff’s attor-
ney. In such an action, unless the defendant serves, with a copy of
his answer or demurrer, a copy of an order of a judge, directing that
CODE OF CIVIL PROCEDURE. 465

the issues presented by the pleadings be tried, the plaintiff may take
judgment, as in case of default in pleading, at the expiration of
twenty days after service of a copy of the complaint, either personally
with the summons, or upon the defendant’s attorney, pursuant to his
demand therefor; or, if the service of the summons was otherwise
than personal, at the expiration of twenty days after the service is
complete.

§ 1779. When foreign corporation may sue. An action may be
maintained by a foreign corporation, in like manner, and subject to
the same regulations, as where the action is brought by a domestic
corporation, except as otherwise specially prescribed by law. But
a foreign corporation cannot maintain an action, founded upon an
act, or upon a liability or obligation, express or implied, arising out
of, or made and entered into in consideration of, an act, which the
laws of the state forbid a corporation or association of individuals
to do, without express authority of Jaw. This section does not affect
the validity of a meeting of the stockholders or directors of a foreign
corporation, held within the state, where such a meeting is authorized
by the laws of the state, country, or government, by or under which
the corporation is created, or of an act, done at such a meeting, which
is not in conflict with the same laws, or the laws of the state.

§ 1780. When foreign corporation may be sued. An action
against a foreign corporation may be maintained by a resident of the
state, or by a domestic corporation, for any cause of action. An action
against a foreign corporation may be maintained by another foreign
corporation, or by a non-resident, in one of the following cases only:

1, Where the action is brought to recover damages for the
breach of a contract, made within the state, or relating to property
situated within the state, at the time of the making thereof.

2. Where it is brought to recover real property situated within
the state, or a chattel, which is replevied within the state.

3. Where the cause of action arose within the state, except where
the object of the action is to affect the title to real property situated
without the state.

Actions in Behalf of the People.

§ 1948. Attorney-general may maintain action. The attorney-
general may maintain an action, upon his own information, or upon
the complaint of a private person, in either of the following cases:

1. Against a person who usurps, intrudes into, or unlawfully holds
or exercises, within the state, a franchise, or a public office, civil or
military, or an office in a domestic corporation. * * *

3. Against one or more persons who act as a corporation, within
the state, without being duly incorporated; or exercise within the
state, any corporate rights, privileges, or franchises, not granted to
them by the law of the state.

4. Against a foreign corporation which exercises within the state
any corporate rights, privileges or franchises, not granted to it by
the law of this state; or which within the state, has violated any pro-
vision of law, or, contrary to law, has done or omitted any act, or
has exercised a privilege or franchise, not conferred upon it by the
law of this state, where, in a similar case, a domestic corporation
would in accordance with section one hundred and thirty-one of the
466 NEW YORK CORPORATIONS.

general corporation law, be liable to an action to vacate its charter and
to annul its existence; or which exercises within the state any cor-
porate rights,. privileges or franchises in a manner contrary to the
public policy of the state.

[As amended by L. 1909, Ch. 65.]

Miscellaneous.

§ 2865. Actions by and against officers, etc. An action, cogniz-
able by a justice Be the peace, may be brought by or against a cor-
poration; * *

§ 2879. Service of summons upon a corporation. Where the de-
fendant to be served is a corporation, or person, company or part-
nership doing business in another county than that in which he or it
resides, the summons may be personally served upon it or him by
delivering a copy thereof to an officer, managing agent or person to
whom a copy of the summons in an action brought against the cor-
poration in the Supreme Court might be delivered as prescribed in
sections four hundred and thirty-one and four hundred and thirty-two
of this act, or, to any director, managing agent or trustee of the
corporation, person, partnership or company by whatever official title
he or it is called.

§ 3268. When defendant may require security for costs. The de-
fendant, in an action brought in a court of record, may require security
for costs to be given, as prescribed in this title, seniors the plaintiff
was, when the action was commenced, either * *

2. A foreign corporation; * * *

§ 3343. Miscellaneous general definitions and rules of construc-
tion. In construing this act, the following rules must be observed,
except where a contrary intent is expressly declared in the provision
to be construed, or plainly apparent from the context thereof:

* * * * * * * *

18. A “domestic corporation” is a corporation created by or un-
der the laws of the state; or located in the state, and created by or
under the laws of the United States, or by or pursuant to the laws
in force in the colony of New York, before the roth day of April, in
the year seventeen hundred and seventy-five. Every other corpora-
tion is a “foreign corporation.”
PENAL LAW.

Laws of 1909, Chapter 88, constituting Chapter 40 of the Consolidated
Laws.

Provisions Affecting Corporations,

§ 280. Corporations not to practice law. It shall be unlawful for
any corporation to practice or appear as an attorney-at-law for any
person other than itself in any court in this state or before any judicial
body, or-to make it a business to practice as an attorney-at-law, for any
person other than itself, in any of said courts or to hold itself out to
the public as being entitled to practice law, or to render or furnish
legal services or advice, or to furnish attorneys or counsel or to ren-
der legal services of any kind in actions or proceedings of any nature
or in any other way or manner, or in any other manner to assume to
be entitled to practice law or to assume, use or advertise the title of
lawyer or attorney, attorney-at-law, or equivalent terms in any lan-
guage in such manner as to convey the impression that it is entitled
to practice law, or to furnish legal advice, services or counsel, or to
advertise that either alone or together with or by or through any per-
son, whether a duly and regularly admitted attorney-at-law, or not,
it has, owns, conducts or maintains a law office or an office for the
practice of law, or for furnishing legal advice, services or counsel. It
shall be unlawful further for any corporation to solicit itself or by or
through its officers, agents or employees any claim or demand for the
purpose of bringing an action thereon or of representing as attorney-
at-law, or for furnishing legal advice, services or counsel to, a person
sued or about to be sued in any action or proceeding or against whom
an action or proceeding has been or is about to be brought, or who
may be affected by any action or proceeding which has been or may
be instituted in any court or before any judicial body, or for the pur-
pose of so representing any person in the pursuit of any civil remedy.
Any corporation violating the provisions of this section shall be liable
to a fine of not more than five thousand dollars and every officer, trus-
tee, director, agent, or employee of such corporation who directly or
indirectly engages in any of the acts herein prohibited or assists such
corporation to do such prohibited acts is guilty of a misdemeanor.
The fact that any such officer, trustee, director, agent, or employee
shall be a duly and regularly admitted attorney-at-law shall not be
held to permit or allow any such corporation to do the acts prohibited
herein nor shall such fact be a defence upon the trial of any of the
persons mentioned herein for a violation of the provisions of this sec-
tion. This section shall not apply to any corporation lawfully en-
gaged in a business authorized by the provisions of any existing
statute, nor to a corporation lawfully engaged in the examination and

467
468 NEW YORK CORPORATIONS,

insuring of titles to real property, nor shall it prohibit a corporation
from employing an attorney or attorneys in and about its own imme-
diate affairs or in any litigation to which it is or may be a party, nor
shall it apply to organizations organized for benevolent or charitable
purposes, or for the purpose of assisting persons without means in the
pursuit of any civil remedy, whose existence, organization or incor-
poration may be approved by the appellate division of the supreme
court of the department in which the principal office of said corpora-
tion may be located.
[Added by L,. 1909, Ch. 483.]

§ 660. Frauds in the organization of corporations. A person who:

1. Without authority subscribes the name of another to or in-
serts the name of another in any prospectus, circular or other adver-
tisement or announcement of any corporation or joint-stock associa-
tion existing or intended to be formed, with intent to permit the same
to be published, and thereby to lead persons to believe that the person
whose name is so subscribed is an officer, agent, member or promoter
of such corporation or association; or,

2. Signs the name of a fictitious person to any subscription for
or agreement to take stock in any corporation, existing or proposed; or,

3. Signs to any such subscription or agreement the name of any
person, knowing that such person does not intend in good faith to
comply with the terms thereof, or under any understanding or agree-
ment, that the terms of such subscription or agreement are not to be
complied with or enforced,

Is guilty of a misdemeanor.

§ 661. Frauds in procuring organization of corporations. An
officer, agent or clerk of a corporation, or of persons proposing to
organize a corporation, or to increase the capital stock of a corpora-
tion, who knowingly exhibits a false, forged or altered book, paper,
voucher, security or other instrument of evidence to any public officer
or board authorized by law to examine the organization of such cor-
poration, or to investigate its affairs, or to allow an increase of its
capital, with intent to deceive such officer or board in respect thereto,
is punishable by imprisonment in a state prison not exceeding ten
years.

§ 662, Fraudulent issue of stock and bonds. An officer, agent
or other person in the service of any joint-stock company or corpora-
tion formed or existing under the laws of this state, or of the United
States or of any state or territory thereof, or of any foreign govern-
ment or country, who wilfully and knowingly, with intent to defraud:

1. Sells, pledges or issues, or causes to be sold, pledged or
issued, or signs or executes, or causes to be signed or executed with
intent to sell, pledge*or issue, or causes to be sold, pledged or issued,
any certificate or instrument purporting to be a certificate or evidence
of the ownership of any share or shares of such company or corpora-
tion, or any bond or evidence of debt, or writing purporting to be a
bond or evidence of debt of such company or corporation, without
being first thereto duly authorized by such company or corporation,
or contrary to the charter or laws under which such corporation or
company exists, or in excess of the power of such company or corpor-
ation or of the limit imposed by law or otherwise upon its power to
create or issue stock or evidences of debt; or,
PENAL LAW. 469

2. Reissues, sells, pledges or disposes of, or causes to be re-
issued, sold, pledged or disposed of, any surrendered or canceled cer-
tificates, or other evidence of the transfer or ownership of any such
share or shares,

Is punishable by imprisonment for a term not exceeding seven
years, or by a fine not exceeding three thousand dollars, or by both.

§ 663. Acting for foreign corporations not authorized to do busi-
ness in this state, Any person, or corporation, who: * * *

2. Acts as agent or representative in this state of a foreign cor-
poration, other than a moneyed corporation, with the words “trust,”
“bank,” “banking,” “insurance,” “assurance,” “indemnity,” “guarantee,”
“guaranty,” “savings,” “investment,” “loan,” “benefit,” or any other
words or terms indicating, representing or holding out such company
to be a moneyed corporation as a part of its name or corporate title,
or who, in connection with such corporation or otherwise, shall put
forth any sign containing said name, or who shall advertise or publish
the said company as doing business in this state, directly or indirectly,
through agents or otherwise, while such company shall not be author-
ized under a certificate procured from the secretary of state pursuant
to section fifteen of the general corporation law to do business in this
state,

Is guilty of a misdemeanor.

§ 664. Misconduct of officers and directors of stock corporations.
A director of a stock corporation, who concurs in any vote or act of
ee of such corporation, or any of them, by which it is in-
tended:

1. To make a dividend, except from the surplus profits arising
from the business of the corporation, and in the cases and manner.
allowed by law; or,

2. To divide, withdraw, or in any manner pay to the stockholders,
or any of them, any part of the capital stock of the corporation; or
to reduce such capital stock without the consent of the legislature; or,

3. To discount or receive any note or other evidence of debt in
payment of an instalment of capital stock actually called in, and re-
quired to be paid, or with intent to provide the means of making such
payment; or,

4. To receive or discount any note or other evidence of debt
with intent to enable any stockholder to withdraw any part of the
money paid in by him on his stock; or,

5. To apply any portion of the funds of such corporation, except
surplus profits, directly or indirectly, to the purchase of shares of its
own stock,

Is guilty of a misdemeanor.

An officer or director of a stock corporation who:

6. Issues, participates in issuing, or concurs in a vote to issue
any increase of its capital stock beyond the amount of the capital
stock thereof, duly authorized by or in pursuance of law; or,

7. Gells, or agrees to sell, or is directly or indirectly interested
in the sale of any share of stock of such corporation, or in any agree-
ment to sell the same, unless at the time of such sale or agreement
he is an actual owner of such share, .

Is guilty of a misdemeanor, punishable by imprisonment for not
less than six months, or by a fine not exceeding five thousand dollars,
or by both.
470 NEW YORK CORPORATIONS.

§ 665. Misconduct of directors, officers, agents and employees of
corporations, A director, officer, agent or employee of any corporation
or joint-stock association who:

1. Knowingly receives or possesses himself of any of its prop-
erty otherwise than in payment for a just demand, and with intent to
defraud, omits to make or to cause or direct»to be made a full and
true entry thereof in its books and accounts; or,

2. Makes or concurs in making any false entry, or concurs in
omitting to make any material entry in its books or accounts; or,

3. Knowingly (a), concurs in making or publishing any written
report, exhibit or statement of its affairs or pecuniary condition con-
taining any material statement which is false, or (b), omits or concurs
in omitting any statement required by law to be contained therein; or,

4. Having the custody or control of its books, wilfully refuses
or neglects to make any proper entry in the stock book of such cor-
poration as required by law, or to exhibit or allow the same to be
inspected, and extracts to be taken therefrom by any person entitled
by law to inspect the same, or take extracts therefrom; or,

5. If a notice of an application for an injunction affecting the
property or business of such joint-stock association or corporation
is served upon him, omits to disclose the fact of such service and the
time and place of such application to the other directors, officers and
managers thereof; or,

6. Refuses or neglects to make any report or statement lawfully
required by a public officer,

Is guilty of a misdemeanor.

§ 666. Unlawful use of certain titles in connection with corporate
name. Any person, association or corporation, other than a moneyed
corporation, who shall within this state directly or indirectly, or
through agents or representatives transact business under, or in any-
wise use a corporate name or a corporate title with the words “trust,”
“bank,” “banking,” “insurance,” “assurance,” “indemnity,” “guarantee,”
“suaranty,” “savings,” “investment,” “loan,” “benefit,” as a part of such
name or title, is guilty of a misdemeanor; provided, however, that any
domestic corporation, other than a moneyed corporation, heretofore
duly organized and heretofore duly authorized by law to use and on
April twenty-ninth, nineteen hundred and four, lawfully using either
or any of such words as a part of its lawful corporate title, may law-
fully continue to use such corporate title, provided and if it, being a
corporation other than a moneyed corporation, shall, wherever the
name shall be printed, written, engraved or displayed, add, in legible
English characters, of substantially the same size and style as the
name, directly under the said name or immediately in connection there-
with, wherever so used, the words “not a moneyed corporation.”

§ 667. Presumption of knowledge of corporate condition and
business and of assent thereto by directors; definitions. It is no de-
fense to a prosecution for a violation of the provisions of this article
and article twenty-six, that the corporation is a foreign corporation, if
it carries on business or keeps an office therefor in this state.

The term “director” as used in this article and article twenty-six
includes any of the persons having, by law, the direction or manage-
ment of the affairs of a corporation, by whatever name described.

A director of a corporation or joint-stock association is deemed to
have such a knowledge of the affairs of the corporation or association
PENAL LAW. 471

as to enable him to determine whether any act, proceeding or omission
of its directors is a violation of this article and article twenty-six. If
present at a meeting of the directors at which any act, proceeding or
omission of such directors in violation of this article and article twenty-
six occurs, he must be deemed to have concurred therein, unless he at
the time causes or in writing requires his dissent therefrom to be
entered on the minutes of the directors. If absent from such meeting,
he must be deemed to have concurred in any such violation, if the facts
constituting such violation appear on the record or minutes of the
proceedings of the board of directors, and he remains a director of
the corporation for six months thereafter without causing or in writ-
ing requiring his dissent from such violation to be entered on such
record of minutes.

§ 668. Misconduct at corporate elections. Any person who:

1. Being entitled to vote at any meeting of the stockholders or
bondholders or both of a stock corporation, sells his vote, or who
issues a proxy to vote to any person for any sum of money or thing
of value, except as expressly authorized by law; or,

2. Acts as an inspector of election at any such meeting and
violates an oath taken by him in pursuance of law as such inspector,
or violates the provisions of an oath required by law to be taken by
him as such inspector, or is guilty of any dishonest or corrupt con-
duct as such inspector,

Is guilty of a misdemeanor.

§ 759. Refusal to permit employees to attend election. A person
or corporation who refuses to an employee entitled to vote at an elec-
tion or town meeting, the privilege of attending thereat, as provided
by the election law, or subjects such employee to a penalty or reduc-
tion of wages because of the exercise of such privilege, is guilty of a
misdemeanor.

§ 882. Falsely indicating person as corporate officer. The false
making or forging of an instrument or writing, purporting to have
been issued by or in behalf of a corporation or association, state or
government, and bearing the pretended signature of any person, there-
in falsely indicated as an agent or officer of such corporation, is for-
gery in the same degree as if that person were in truth such officer or
agent of the corporation or association, state or government.

§ 890. Officer of corporation selling fraudulent shares. An officer,
agent or other person employed by any company or corporation ex-
isting under the laws of this state, or of any other state or territory
of the United States, or of any foreign government, who wilfully and
with a design to defraud, sells, pledges or issues, or causes to be sold,
pledged or issued, or signs or procures to be signed with intent to
sell, pledge or issue, or to be sold, pledged or issued, a false, forged
or fraudulent paper, writing or instrument, being or purporting to be
a scrip, certificate or other evidence of the ownership or transfer of
any share or shares of the capital stock of such company or corpora-
tion, or a bond or other evidence of debt of such company or corpora-
tion, or a certificate or other evidence of the ownership or of the transfer
of any such bond or other evidence of debt, is guilty of forgery in the
third degree, and upon conviction, in addition to the punishment pre-
scribed in section eight hundred and ninety-three of this chapter for
472 NEW YORK CORPORATIONS.

that offense, may also be sentenced to pay a fine not exceeding three
thousand dollars.

§ 1272. Payment of wages. A corporation or joint-stock associa-
tion or person carrying on the business thereof, by lease or otherwise,
who does not pay the wages of all its employees in accordance with
the provisions of the Labor Law, is guilty of a misdemeanor, and upon
conviction therefor, shall be fined not less than one hundred nor more
than ten thousand dollars for each offense. An indictment of a person
or corporation operating a steam surface railroad for an offense speci-
fied in this section may be found and tried in any county within the
state in which such railroad ran at the time of such offense.

[As amended by L,. 1909, Ch. 205.]

§ 1932. Punishment of corporation convicted of felony. In allt
cases where a corporation is convicted of an offense for the commis-
sion of which a natural person would be punishable with imprison-
ment, as for a felony, such corporation is punishable by a fine of not
more than five thousand dollars.

§ 1937. Punishment of misdemeanors when not fixed by statute.
A person convicted of a crime declared to be a misdemeanor, for which
no other punishment is specially prescribed by this chapter, or by any
other statutory provision in force at the time of the conviction and
sentence, is punishable by imprisonment in a penitentiary, or county
jail, for not more than one year, or by a fine of not more than five
hundred dollars, or by both.
MISCELLANEOUS STATUTORY PROVISIONS
AFFECTING CORPORATIONS.

LABOR LAW.
(Chapter 31 of the Consolidated Laws.)

§ 9. Payment of wages by receivers... Upon the appointment of
a receiver of a partnership or of a corporation organized under the laws
of this state and doing business therein, other than a moneyed corpora-
tion, the wages of the employees of such partnership or corporation
shall be preferred to every other debt or claim.

§ 10. Cash payment of wages. Every manufacturing, mining,
quarrying, mercantile, railroad, street railway, canal, steamboat, tele-
graph and telephone company, every express company, every corpora-
tion engaged in harvesting and storing ice, and every water company,
not municipal, and every person, firm or corporation, engaged in or
upon any public work for the state or municipal corporation thereof,
either as a contractor or a sub-contractor therewith, shall pay to each
employee engaged in his, their or its business the wages earned
by such employee in cash. No such company, person, firm or corpora-
tion shall hereafter pay such employees in scrip, commonly known
as store money orders. * * * Any person, firm or corporation
violating the provisions of this section shall be guilty of a misde-
meanor.

§ 11. When wages are to be paid. Every corporation or joint-
stock association, or person carrying on the business thereof by lease
or otherwise, shall pay weekly to each employee the wages earned by
him to a day not more’than six days prior to the date of such pay-
ment.

But every person or corporation operating a.steam surface rail-
roadshall, on or before the first day of each month, pay the employees
thereof the wages earned by them during the first half of the pre-
ceding month ending with the fifteenth day thereof, and on or before
the fifteenth day of each month pay the employees thereof the wages
earned by them during the last half of the preceding calendar month.

§ 12. Penalty for violation of preceding sections. If a corpora-
tion or joint-stock association, its lessee or other person carrying
on the business thereof, shall fail to pay the wages of an employee as
provided in this article, it shall forfeit to the people of the state the
sum of fifty dollars for each such failure, to be recovered by the com-
missioner of labor in his name of office in a civil action; but an action
shall not be maintained therefor, unless the commissioner of labor
shall have given to the employer at least ten days’ written notice that
such an action will be brought if the wages due are not sooner paid as
provided in this article.

473
474 NEW YORK CORPORATIONS.

On the trial of such action, such corporation or association shall
not be allowed to set up any defense, other than a valid assignment
of such wages, a valid set-off against the same, or the absence of such
employee from his regular place of labor at the time of payment, or
an actual tender to such employee at the time, of the payment of the
wages so earned by him, or a breach of contract by such employee or
a denial of the employment.

GENERAL BUSINESS LAW.

(Chapter 20 of the Consolidated Laws.)

§ 340. Contracts for monopoly illegal and void. Every contract,
agreement, arrangement or combination whereby a monopoly in the
manufacture, production or sale in this state of any article or com-
modity of common use is or may be created, established or maintained,
or whereby competition in this state in the supply or price of any such
article or commodity is or may be restrained or prevented, or whereby
for the purpose of creating, establishing or maintaining a monopoly
within this state of the manufacture, production or sale of any such
article or commodity, the free pursuit in this state of any lawful busi-
ness, trade or occupation is or may be restricted or prevented, is hereby
declared to be against public policy, illegal and void.

§ 341. Penalty. Every person or corporation, or any officer or
agent thereof, who shall make or attempt to make or enter into any
such contract, agreement, arrangement or combination, or who within
this state shall do any act pursuant thereto, or in, toward or for the
consummation thereof, wherever the same may have been made, is
guilty of a misdemeanor, and on conviction thereof shall, if a natural
person, be punished by a fine not exceeding five thousand dollars, or
by imprisonment for not longer than one year, or by both such fine
and imprisonment; and if a corporation, by a fine of not exceeding
five thousand dollars.

§ 342. Action to restrain and prevent. The attorney-general may
bring an action in the name and in behalf of the people of the state
against any person, trustee, director, manager or other officer or agent
of a corporation, or against a corporation, foreign or domestic, to
restrain and prevent the doing in this state of any act herein declared
to be illegal, or any act in, toward or for the making or consum-
mation of any contract, agreement, arrangement or combination herein
prohibited, wherevér the same may have been made,
GENERAL INDEX.

[References are to pages.]

[For List of Forms, see Table of Contents.]

A.

Acceptance of Charter, 47, 49.
Subscriptions, 47, 83, 84.
Acknowledgment, Charter, 30, 38, 39; Statutes, 352, 363.
Forms, 214.
Corporate, 259.
Forms, 259.
Incorporator may not take, 30, 38, 39.
Actions by and against Corporations, 55-57, 117, 118.
Attorney General, 55-57, 60, 61; Statutes, 381-392, 417, 455, 474;
Code, 465, 466.
Bonds, Validity of, Statutes, 423.
Complaints in, Code, 464. x
Dissolution, 60, 61; Statutes, 382-397.
Forms, 307-315.
Evidence in, Documentary, 140; Statutes, 364, 365; Code, 463, 464.
Stockholder’s, Code, 463.
Non-payment of Note, Code, 464, 465.
Not Affected by,
Amendment of Charter, Statutes, 364, 378, 379.
Consolidation, Statutes, 356, 424, 427.
Dissolution, Statutes, 353.
Officers’ Testimony, Statutes, 414.
Preferences in, 184; Statutes, 417, 418; Code, 463.
Procedure in, Code, 460-466.
Service of Summons or Process, 172; Statutes, 367, 368; Code,
460, 466.
Stay When Collusively Brought, Statutes, 372, 373.
Actions by and against Directors and Officers, 126-129, 135-137; Stat-
utes, 381, 382, 385, 386, 433,474; Code, 466.
Foreign Corporations, 172-174, 178; Statutes, 365, 367, 368; Code,
460, 461, 463-465; Pen. Law, 469.
Receivers, 183-185, 189, 190; Statutes, 402-407, 417.

475
476 GENERAL INDEX.

[References are to pages.]

Actions by and against Stockholders, 96-104, 126.
Statutory Liability, 101-103; Statutes, 385, 386, 416, 436-438,
440; Code, 465.
Suit on Behalf of Corporation, 96, 97.
Suit to Dissolve, 100, 101; Statutes, 383, 393.
Adjournment of Meetings, 50, 52, 59.
Administrator, Liability as Stockholder, 103; Statutes, 436, 437.
Admission Made by Agent, Code, 463.
Admission to State. (See Foreign Corporations.)
Adoption of By-Laws. (See By-Laws.)
Agent of Foreign Corporation. (See Foreign Corporations.)
Agent, Transfer, 114.
Agreement (see also Contracts).
for Consolidation, 69-71; Statutes, 354-356.
for Reorganization; Statutes, 425.
Subscription, 83, 84, 191, 192, 194, 195; Statutes, 435; Pen. Law,
468.
Forms, 191-195.
Voting Trust, 105, 315-317; Statutes, 370, 371.
Forms, 315-317,
Allowance of Charter, 40, 41, 47; Statutes, 363.
Alteration of Business, 72; Statutes, 428.
Amended and Supplemental Certificates, 76; Statutes, 363, 364.
Amendment of By-Laws, 45, 46; Statutes, 366, 373.
Amendment of Charter, 72-77, 281-298; Statutes, 363, 364, 418. (See
also sub-heads.)
Alteration of Business, 72; Statutes, 428.
by Corporators or Directors, Statutes, 364.
Change of Name, 32, 75, 76, 281-284; Statutes, 376-379.
Forms, 281-284.
Change of Office, 74, 75, 285-287; Statutes, 426, 427.
Forms, 285-287.
Classification of Stock, 34, 35, 75, 81, 288-290, 292-295; Statutes,
437, 438.
Forms, 288-290, 292-294.
Extension 8f Corporate Existence, 54, 55, 75; Statutes, 373, 374.
Fees, Table of, 338, 339.
Filing and Recording, 77; Statutes, 363, 364.
Increase or Decrease of Capital Stock, 68, 73, 74, 89, 90, 109, 290-
295; Statutes, 438, 439, 448.
Forms, 290-294.
Increase or Decrease of Number of Directors, 74, 109, 120, 295-
298; Statutes, 429, 430.
Forms, 295-298.
GENERAL INDEX. 477

[References are to pages. |]

Amendment of Charter.—Continued.
Increase or Decrease of Number of Shares, 74, 82; Statutes, 439,
440.
Informalities or Obvious Defects, 76; Statutes, 364.
Procedure for, 72-77. (See also special subjects.)
Securing New Purposes, 72; Statutes, 428.
Annual Election. (See Election, Annual.)
Annual Franchise Tax. (See Taxation.)
Annual Meeting of Stockholders, 42, 43, 106-117, 245, 248-253, 298, 299;
Statutes, 429. (See also Election, Annual; also Meetings.)
Forms, 244, 245, 248-253.
Notice of, 43, 108, 248-250; Statutes, 429.
Forms, 248-250.
Place of, 42, 106, 107.
Quorum, 42, 110, 114; Statutes, 429.
Time, 42.
Annual Report. (See Reports.)
Application for Review of Eléction, 117; Statutes, 372; Code, 465.
Forms, 301, 302.
Appointment of Officers and Agents, 62, 63, 132; Statutes, 366, 431.
Receivers, 61, 179, 180. (See also Receivers.)
Assent of Stockholders. (See Consent.)
Assessment. (See Taxation.)
Assets, Sale of Entire, 98; Statutes, 427, 428.
Assignment of Property, 127, 129, 136; Statutes, 440. (See also Ex-
change of Stock for Property.)
Forms, 242, 243.
When Prohibited, 127, 129, 136; Statutes, 381, 440.
Stock, 91-93, 99, 204, 206, 208, 236, 237; Statutes, 366, 432, 434,
; 456-459; Pen. Law, 469, 471, 472.
in Blank, 91, 92, 204.
Forms, 204.
Attachment, 178; Code, 461-463.
Attestation of Seal, 258.
Forms, 258.
Attorney General, Actions by, 55-57, 61; Statutes, 381-392, 417, 455,
474; Code, 465, 466.

B.

Bank Deposits, 52, 261, 262. (See By-Laws, 224, 231.)
Forms, 261, 262.
Banking Powers Prohibited, 21, 33; Statutes, 352, 364, 369.
Beginning Business, 53, 54; Statutes, 352, 353, 368, 373, 448.
Initial Capital, 35, 54; Statutes, 352, 353.
GENERAL INDEX.

[References are to pages.]

Board of Directors. (See Directors.)
Bond, Corporate. (See Bond Issues.)

Indemnity, 87; Statutes, 441.
Forms, 205.
Treasurer’s, 133; Statutes, 431.

Bond Issues, 67, 68, 320-334; Statutes, 422-425, 436.

Forms, 320-334.
Bond, 324, 325.
Certificate of Consent, 322, 323.
Coupon, 325,
Deed of Trust, 326-333.
Directors’ Resolution, 323.
Execution of Deed of Trust, 333.
3 Stockholders’ Consent, 321.
Stockholders’ Resolution, 320.
Trustee’s Certificate, 325.
Consideration for Issue, 87; Statutes, 436.
Conversion into Stock, 68, 98; Statutes, 422.
Effect of Recitals in Mortgage, 67, 68; Statutes, 423.
Effect of Recording Mortgage, Statutes, 423.
Foreclosure, Statutes, 415, 424-426.
Guarantee by Another Corporation, 68, 69, 98; Statutes, 424.
How Authorized, 67, 68, 320-323; Statutes, 422.
Procedure for, 320-323.
Reorganized Corporation, Statutes, 424, 425.

Books, Corporate, 113, 114, 139-142, 177, 178, 206-211.

Account, 139; Statutes, 431.
Entries in Must Be Made, 136, 140, 208; Statutes, 432; Pen. Law,
470.
Evidence, Use of as, 140; Statutes, 369, 372, 432; Code, 463, 464.
Foreign Corporation, 177, 178; Statutes, 432; Code, 463, 464.
Inspection of, 99, 100, 111, 112, 123, 141, 142, 177, 178; Statutes,
370, 432; Pen. Law, 470.
by Directors, 123, 142.
Stock Book or Ledger, 140-142, 177, 178, 208, 209, 211; Statutes,
369, 370, 372, 431, 432; Pen. Law, 470.
Forms, 210.
Closing, 111, 113, 114; Statutes, 369, 370.
Contents of, 140, 208, 209, 211; Statutes, 431, 432.
Proof of Right to Vote, 111, 112, 116, 117, 119; Statutes,
369-370, 372..
Transfer Book, 206, 208.
Forms, 206, 207.
Closing, 111, 113, 114; Statutes, 370.
Where Kept, 139, 141; Statutes, 431, 432.
GENERAL INDEX. 479

[References are to pages. ]

Borrowing Money, 67, 68; Statutes, 422-425. (See also Bond Issues.)
Business, Alteration of. (See Amendments.)
Beginning, 53, 54; Statutes, 352, 353, 363, 373, 448.
Business Corporations Law, 21; Statutes, 351-359.
Tables, 342, 359.
By-Laws, 42-46, 49, 50, 63, 134, 135, 222-232; Statutes, 366, 373, 429, 431.
Forms, 222-232.
Adoption of, 44, 49, 50, 63.
Amendment of, 45, 46.
Certification of, 232.
Forms, 232.
Certified Transcript of, 262.
Directors Controlled by, 43, 104, 105; Statutes, 366.
May Make, 38, 44, 46, 123; Statutes, 366, 373.
Enforcement of, 45.
Force as to Third Persons, 134, 135.
Inspectors of Election, Appointment Prescribed by, 43, 115;
Statutes, 431.
Meetings and Elections Regulated by, 42, 43, 107, 108, 110, 111,
113, 115, 129-131; Statutes, 366, 376.
Officers’ Powers and Duties Prescribed by, 43, 132-135; Statutes,
431.
Power to Make, 38, 44, 46, 63, 123.
Preparation of, 42.
Repeal, 45, 46.
Stockhoiders Make, 44.
Stock Transfers Regulated by, 44.

Cc

Calendar, Corporate, 340-342.
Calls, 72, 107, 247, 253, 254.
Forms, 247, 253.
Calls and Waivers, 48, 51, 107, 108, 234, 235, 254; Statutes, 375, 376.
(See also Consent Meetings.)
Forms, 234, 235, 254.
Capital, 78, 144, 175-177.
Initial, 35, 54, 215; Statutes, 352, 353.
Capitalization, 79; Statutes, 352, 353.
Capital Stock, 34, 35, 44, 78-95, 144. (See also Stock.)
Amount, 34, 35, 79; Statutes, 352, 353.
Classification of. (See Classification.)
Consideration for Issue, 87, 88; Statutes, 436.
Employed in State, 143-152, 174-177; Statutes, 448, 449.
480 GENERAL INDEX.

[References are to pages.]

Capital Stock.—Continued.
Increase or Decrease. (See Increase.)
Payment of, 78, 88, 89, 91, 92; 234-243, 338; Statutes, 353, 385,
435-437.
Forms, 234-243, 263, 264.
One-half, 78, 263, 264; Statutes, 353.
Forms, 263, 264.
Subscription to. (See Subscription.)
When to be Issued, 78, 79.
Withdrawal Prohibited, 126, 127; Statutes, 430; Pen. Law, 469.
Certificate, Forms of, Change of Office, 286, 287.
Foreign Corporation, 280, 281.
Classification of Stock, 288-290, 292-294.
Consent to Mortgage, Stockholders’, 322, 323.
Dissolution, 303, 304.
Incorporation, 212-221.
Increase of Stock, 292-294.
Inspectors of Election, 251, 252, 339.
Liability for Making False, 127-129, 136; Statutes, 433; Pen.
Law, 470.
Payment of One-half Capital Stock, 263, 264.
Secretary’s, 260-262, 278, 285, 289-291, 294-297, 305, 306.
Trustee’s, 325. :
Certificate of Authority, Foreign Corporation. (See Foreign Corpora-
tion.)
Comptroller for Decrease of Capital Stock, 73, 90, 291, 292, 338;
Statutes, 438, 439.
Secretary of State for Change of Corporate Name, 75, 76, 339;
Statutes, 377.
Certificate of Incorporation, 27-41, 212-221; Statutes, 352, 353, 361, 363-
365.
Forms, 212-221.
Acceptance of, 47, 49.
Acknowledgment, 30, 38, 39; Statutes, 352, 363.
Forms, 214.
Allowance 6f, 40, 41, 47; Statutes, 363.
Alteration or Repeal by Legislature, 20; Statutes, 418.
Amended and Supplemental, 76; Statutes, 363, 364.
Amendment of, 72-77, 281-298. (See also Amendment of Char-
ter.) 7
Certified Copy, 26, 39, 40, 214, 215; Statutes, 361, 363-365.
Contents, 30-38, 212, 215; Statutes, 352, 365.
Capital Stock, Amount, 34, 35.
Corporate Name, 31, 32, 215.
GENERAL INDEX. 481

[References are to pages.]

Certificate of Incorporation.—Continued.
Contents.—Continued.
Directors for First Year, 36, 37, 215.
Duration, 36.
Initial Capital, 35, 54, 215.
Location of Principal Office, 36, 215.
Purposes, 33, 34, 212, 215.
Shares, 35.
Subscribers, 37, 215.
Definition, 29; Statutes, 361.
English Language, Must be in, 30, 278; Statutes, 363.
Evidence, Value as, 40, 214, 215; Statutes, 364, 365.
Execution of, 30, 38, 39; Statutes, 352, 363.
Forms, 214.
Exemplification of, 40.
Fees, 25, 26, 39, 40; Statutes, 363, 448.
Tables of, 335-339.
Filing, 39, 40, 53; Statutes, 252, 363, 364, 448.
Forfeiture, 55-57; Statutes, 353, 373, 382-392, 455.
Illegal Provisions in, 30,
Incorporators, 27-29, 37-39, 212, 215; Statutes, 352, 363.
Lost or Destroyed, Statutes, 364.
Preparation of, 29, 30, 215; Statutes, 352.
Recording, 39, 40; Statutes, 352, 363, 448.
Special Provisions in, 37, 38, 212, 217, 219; Statutes, 352, 365, 369,
370, 434, 435, 487, 438.
Subscribers to, 37, 215.
Certificates of Stock, 85-87, 96, 99, 199-205; Statutes, 434, 437, 440, 441;
Pen. Law, 468, 469, 471, 472.
Forms, 200-204.
Adoption of, 85, 201; Statutes, 434.
Assignment of, 91, 92, 204, 206; Statutes, 434, 456-459.
Forms, 204, 206, 207.
in Blank, 91, 92, 204.
2 Forms, 204.
- Common Stock, 203; Statutes, 437, 438.
Forms, 201.
Lost and Destroyed, 86, 87, 96, 99; Statutes, 440, 441.
Indemnity Bond for, 87.
Forms, 205.
Partly Paid Stock, 86; Statutes, 437.
Preferred Stock, 203; Statutes, 437, 438.
‘Forms, 202,
482 GENERAL INDEX.

[References are to pages.]

Certificates of Stock.—Continued.
Signatures, 85, 201.
Forms, 201, 202.
Temporary, 199.

Forms, 200.
Transfer ‘Tax on, 153-156; Statutes, 456-459. (See also Taxa-
tion.)
Certification of By-Laws, 232.
Forms, 232.

Charter, 26, 39, 40, 214, 215; Statutes, 361, 363-365.
Certified Minutes, 260, 261.
Forms, 260.
Resolution, 261, 262.
Forms, 261, 262.
Transcript from By-Laws, 262.
Challenge of Stockholder or Proxy, 113, 116, 117, 299; Statutes, 370,
371.
Forms, 298, 299.
Change of Business. (See Amendment of Charter.)
Name. (See Amendment of Charter.)
Number of Directors. (See Amendment of Charter.)
Number of Shares. (See Amendment of Charter.)
Principal Office. (See Amendment of Charter.)
Charter. (See Certificate of Incorporation.)
Charter Powers. (See Powers.)
Classification of Corporations, 20; Statutes, 361.
For Purposes of Franchise Tax, 147-151; Statutes, 449,
450.
Directors, 120, 121; Statutes, 429, 430.
Stock, 34, 35, 75, 79-82, 288-290, 292-295, 338; Statutes, 352, 437,
438.
Forms, 288-290, 292-294.
Closing Stock Books before Meetings, 111, 113, 114; Statutes, 369, 370.
Code of Civil Prgcedure, 460-466.
Table, 349, 350.
Combinations in Restraint of Trade, Statutes, 427, 474.
Commencing Business, 53, 54. (See Beginning Business.)
Committees, Standing, 51, 52, 130, 131.
Common Stock, 79, 80, 203; Statutes, 437, 438.
Forms, 201,
Exchange of Preferred Stock for, 81; Statutes, 437, 438.
Compensation of Directors, 122, 138.
Officers, 138.
GENERAL INDEX. 483

[References are to pages.]

Comptroller’s Certificate of Reduction of Capital Stock, 73, 90, 291,
292, 338; Statutes, 438, 439.
Reports, 152, 167, 168, 178, 265-270; Statutes, 451-453. (See also
Reports.)
Forms, 266-270.
Rules as to Transfers, 154-156.
Condemnation of Property, Statutes, 358, 359.
Conflicting Corporate Laws, 22; Statutes, 418.
Consent Meetings, 47, 48, 50, 51, 72, 107, 108, 129; Statutes, 375, 376.
Consent of Agent, Foreign Corporation, 277, 278; Statutes, 367, 368.
Forms, 277, 278.
Consent of Stockholders, 72, 106.
Change of Principal Office, 74, 75, 285, 286; Statutes, 426, 427.
Forms, 285.
Dissolution, 58, 59; Statutes, 398, 399.
Forms, 304, 305.
Extend Corporate Existence, 75; Statutes, 373, 374.
Increase Number of Directors, 74, 297; Statutes, 429, 430.
Forms, 298.
Increase or Reduction of Capital Stock, 73, 291; Statutes, 438,
439. .
Forms, 290, 291.
Mortgage, 67, 68, 320-322, 339; Statutes, 422, 423.
Forms, 321-323.
Consideration for Issue of Stock or Bonds, 87, 88; Statutes, 436.
Effect of Inadequate, 88.
Must be Stated in Reports; Statutes, 436.
Consolidation of Corporations, 69-71, 98; Statutes, 354-357, 363, 365,
427, 448.
Agreement for, 69, 70.
Evidence of, Statutes, 365.
Fees, 25, 71, 338.
Procedure for, 69-71. a
Rights of Dissenting Stockholders, 71. —
Constitutional Provisions Relating to Corporations, 19, 20.
Construction of Laws, 22; Statutes, 418.
Contested Elections, 117, 118, 301; Statutes, 372.
Forms, 301, 302.
Contracts, Directors’, 124-126.
Officers’, 133-136.
Signatures to, 136, 257, 258.
Forms, 257, 258.
Contributions, Political, 77, 137; Statutes, 376.

*
484 GENERAL INDEX.

[References are to pages.]

Copyrights, Deducted from Local Tax Assessment, 158, 163.
Included in Franchise Tax Assessment, 145.
Corporate Acknowledgment, 259.
Forms, 259.
Books. (See Books.)

Calendar,
Forms, 340-342.

Contracts, 124-126, 134-136, 257-259.
Debts. (See Debts; also Bond Issues.)
Endorsement, 258, 259.
Forms, 258.
Existence, 36, 53-61, 75, 98; Statutes, 352, 365, 373-375.
Extension of, 54, 55, 75, 98; Statutes, 373-375.
Name, 31, 32, 75, 76, 215, 281-284; Statutes, 352, 363, 364, 367;
Pen. Law, 469-471.
Change of, 32, 75, 76, 281-284, 339; Statutes, 376-379.
Forms, 281-284.
Powers, 27, 33, 34, 37, 38, 60-77; Statutes, 352, 353, 365-367, 369;
Pen Law, 467, 468. (See also Powers.)
Property, Sale of, Statutes, 379, 380.
Purposes, 33, 34, 212, 215; Statutes, 352, 353.
Seal, 63; Statutes, 365, 434.
Attestation of, 258.
Forms, 258.
Signatures, 136, 257-259.
Forms, 258.
Testimonium, 258.
Forms, 258.
Corporations, Business, Definition of, 21; Statutes, 361.
Convicted of Felony, Pen. Law, 472.
Domestic, Statutes, 361; Code. 466.
Foreign, Statutes, 361; Code, 466. (See also Foreign Cor-
porations.)
Full Liability, 101, 102; Statutes, 354.
Practice of Law Prohibited, 27, 338, 187; Statutes, 352, 353; Pen.
Law, 467,468.
Stock, Statutes, 361.
Creditors’ Rights against Directors and Officers, 127-129, 135-137; Stat-
utes, 385, 386, 430, 431, 433, 440, 442.
against Stockholders, 101-103; Statutes, 436, 437, 440, 442.
as to Transferred Property, 127, 129; Statutes, 440.
on Consolidation, 69; Statutes, 356, 357.
When Laborers or Servants, 101; Statutes, 436, 440; Pen. Law,
472.
Cumulative Voting, 114, 115; Statutes, 370.
GENERAL INDEX. 485

[References are to pages.]
D.

Debts, 54, 67-69, 97, 98, 145, 157, 161-163; Statutes, 353, 415, 422, 424-426,
433.
Deduction of, in Tax Assessment, 145, 157, 161-163.
Decrease of Capital Stock, 73, 74, 89, 90, 109, 338; Statutes, 438, 439, 448.
Forms, 290-294.
Classified Stock, 73, 74, 90.
Number of Directors, 74, 298; Statutes, 429, 430.
Forms, 295-298.
Number of Shares, 74, 82, 338; Statutes, 439, 440.
Deed of Trust. (See Bond Issues; also Mortgages.)
Definition of Corporate Terms, Statutes, 361, 362; Code, 466.
Deposits, Bank, 52, 261, 262. (See also By-Laws, 224, 231.)
Forms, 261, 262.
Directors, 48, 120-131; Statutes, 352, 361, 429-431, 433; Pen. Law, 470.
Actions against, 126-129, 135-137; Statutes, 381, 382, 385, 386, 433,
474; Code, 466.
Authority. (See Powers.)
By-Laws, Power to Make, 38, 44, 46, 123; Statutes, 366, 373.
Power to Repeal, 46.
Classification of, 120, 121; Statutes, 429, 430.
Compensation, 122, 138.
Contracts with Corporation, 124-126.
Deemed to Have Knowledge of Corporate Proceedings, 127;
Statutes, 430; Pen. Law. 470, 471.
Dummy, 28, 29.
Duties, 124; Statutes, 373.
Election, 42, 43, 108, 110-119, 245, 248-253, 298-302; Statutes, 366,
369-372, 429-431; Pen. Law, 471. (See also Election.)
Executive Committee, 51, 52, 130, 131.
Failure to Elect, 118; Statutes, 371, 430.
Finance Committee, 52, 130, 131.
for First Year, 36, 37, 215; Statutes, 352.
Holding Over, 118, 122; Statutes, 371, 430.
Inspection of Books, 123, 142.
Liabilities, 93, 126-129, 137; Statutes, 381, 385, 386, 430, 431, 433,
474; Pen. Law, 467, 470.
Limitations on Powers, 43, 122, 123; Statutes, 352, 365.
Majority May Act, 130; Statutes, 373, 375.
Meetings, 38, 43, 50-52, 129-131, 234-238, 240, 242, 253-256. (See
also Meetings.)
Misconduct, Penalty for, 126-129, 135-137; Pen. Law, 469, 470.
Must Act as Board, 123, 129, 130; Statutes, 373, 375.
486 GENERAL INDEX.

[References are to pages.]

Directors.—Continued.
Negligence of, 126.
Number of, 36, 37, 120; Statutes, 352, 429, 430.
Change of, 74, 109, 120-121, 295-298; Statutes, 429, 430.
Forms, 295-298.
Officers, Appointment, 62, 63, 132; Statutes, 366, 431.
Removal, 137; Statutes, 431.
Powers of, 38, 44, 46, 104, 122-124; Statutes, 366, 373, 375, 376.
Qualifications, 37, 43, 121; Statutes, 373, 429, 435.
Quorum, 43, 130; Statutes, 373, 375.
Relation of, to Corporation and Stockholders, 124-126.
Removal, 38, 123; Statutes, 381, 415, 416; Code, 465.
Resignation, 131, 138.
Special Elections of, 108, 109, 118, 119, 299, 301; Statutes, 371,
372, 429,
Term of Office, 118.
Trustees on Dissolution, 60, 123, 124; Statutes, 373.
Vacancies, 119, 121; Statutes, 429, 430.
Void Acts, 122; Statutes, 430.
Voting, 130.
Dissolution of Corporation, 54, 58-61, 109, 110, 123, 124, 179-190, 303-
315, 339; Statutes, 373, 382-418, 430.
by Action of Attorney General, 56, 57; Statutes, 382-392.
by Action of Incorporators, 58, 339; Statutes, 398.
Directors are Trustees, 60, 123, 124; Statutes, 373.
Voluntary, 60, 61, 307-315; Statutes, 392-397.
Forms, 307-315.
Appointment of Receiver. (See Receivers.)
Order for, 61.
Forms, 314, 315.

Order to Show Cause, 61.
Forms, 310, 311.
Petition for, 60, 61.
Forms, 307-309.
Without Judicial Procedure, 58-60, 303-307; Statutes, 398-400.
@orms, 303-306.
Fees, 339.
Notice of Meeting, 109, 110; Statutes, 398, 399.
Rights of Dissenting Stockholders, 60.
District Steam Corporations, Statutes, 357, 358.
Dividends, 93-95, 99, 126-128, 147-151, 318, 319; Statutes, 430, 437; Pen.
Law, 469.
Cumulative, 80.
Declaration of, 93-95, 319.
Forms, 318, 319.
GENERAL INDEX. 487

[References are to pages.]

Dividends.—Continued.
Deducted from Assessments, 161.
Notice of, 319.
Forms, 318, 319.

on Partly Paid Stock, 86; Statutes, 437.

on Preferred Stock, 80, 81, 94.

Payment of, 93, 94.

Stock, 94.

Unauthorized, 93, 126-128; Statutes, 430; Pen. Law, 469.
Domestic Corporations, Definition, Statutes, 361; Code, 466.
Dummy Directors and Incorporators, 28, 29.

Duration of Corporation, 36, 54, 55; Statutes, 352, 365, 373-375.

Perpetual, if not Specified, 36; Statutes, 365.

Duties of Directors, 124; Statutes, 373.

Officers, 43, 132; Statutes, 375, 431.

E.

Election, Annual of Directors, 42, 48, 108, 110-119, 245, 248-253, 298-
302; Statutes, 369-372, 429-431; Pen. Law, 471.
By-laws Fix Time and Place, 42, 43, 107; Statutes, 366,
429.
Challenges, 113, 116, 117, 299; Statutes, 370, 371.
Forms, 298, 299.
Contested, 117, 118, 301; Statutes, 372.
Forms, 301, 302.
Cumulative Voting, 114, 115; Statutes,. 370.
Effect of Neglect to Hold, 118; Statutes, 371, 430.
Inspectors of, 113, 115-117, 250-252; Statutes, 370-372, 431;
Pen. Law, 471.
Forms, 250-252.
‘Misconduct at, 115, 117; Pen. Law, 471.
Notice of, 43, 108, 248; Statutes, 429.
Forms, 248-250.
Qualifications of Voters, 111; Statutes, 369, 370.
Quorum, 42, 110, 114; Statutes, 429.
of Officers, 51, 62, 63, 132; Statutes, 366, 431.
Review by Supreme Court, 117, 301; Statutes, 372.
Forms, 301, 302.
Special, 108, 109, 118, 119, 299-302; Statutes, 371, 372, 429.
Forms, 300-302.
Employed Within the State. (See Capital Stock.)
Employees, 101; Statutes, 436, 440, 473, 474; Pen. Law, 471, 472.
Endorsement, Corporate, 258, 259.
Forms, 258.
488 GENERAL INDEX.

[References are to pages.]

Endorsement.—Continued.
of Instalment Payments, 198.
Forms, 198.
Enforcement of By-laws, 45.
Evidence, Books of Foreign Corporation as, Code, 463, 464.
Charter as, 40, 214, 215; Statutes, 364, 365.
Stock Book as, 140; Statutes, 369-372, 432; Code, 463, 464.
Examination of Records. (See Inspection.)
Exchange of Stock for Property, 50, 52, 87, 88, 234-243; Statutes, 436.
Forms, 234-243.
Preferred for Common Stock, 81; Statutes, 437, 438.
Execution of Charter, 30, 38, 39; Statutes, 352, 363.
Forms, 214.
Contract, 257-259.
Forms, 258, 259.
Executive Committee, 51, 52, 130, 131.
Exemplification of Charter, 40.
Exemption from State Taxation, 151, 152, 269; Statutes, 450, 455, 456.
(See also Taxation.)
Existence of Corporation, 36, 53-61, 75, 98; Statutes, 352, 365, 373-375.
Dissolution, 54, 58-61, 100, 101, 123, 124, 307-315. (See also Dis-
solution.)
Duration, 36, 54, 55; Statutes, 352, 365, 373-375.
Extension, 54, 55, 75, 98; Statutes, 373-375.
Perpetual if not Specified, 36; Statutes, 365.
Renewal, 54, 55, 75, 98; Statutes, 374, 375.
When Commenced, 53, 54; Statutes, 352, 363, 373.
Expenses of Incorporation, 25, 26, 39, 40; Statutes, 363, 448. (See also
Fees and Taxation.)
Tables, 335-338.
Extension of Corporate Existence, 54, 55, 75, 98; Statutes, 373-375.

F,

Face Value. (See is Value.)
Failure to Elect Directors, Effect of, 118; Statutes, 371, 430.
False Reports, Penalty for Making, 127-129, 136; Statutes, 433; Pen.
Law, 470.
Fees and Taxation, 25, 26, 39, 40, 53, 54, 71, 73, 76, 77, 143-165; Statutes
363, 444-459. (See also Taxation.)
Tables, 335-339.
Comptroller, 73, 337, 338.
‘ County Clerk, 25, 26, 40, 71, 76, 77, 337-339,
Secretary of State, 25, 26, 39, 40, 71, 76, 77, 173, 338, 339.
GENERAL INDEX. 489

[References are to pages. ]

Filing and Recording Charter, 39, 40, 53; Statutes, 352, 363, 364, 448.
Fees, 25, 26, 39, 40, 335-339; Statutes, 363, 448.
Payment of Fees a Prerequisite, 53, 54; Statutes, 363; 448.
Finance Committee, 52, 130, 131.
Financial Statement to Stockholders, 100; Statutes, 441, 442.
First Meetings. (See also Meetings.)
of Directors, 50-52, 234-238, 240.
Forms, 235-238, 240-242.
of Stockholders, 47-50, 233-240.
Forms, 233-239.
Foreign Corporation, 170-178, 265-270, 276-281.
Actions by and against, 172-174, 178; Statutes, 365, 367, 368;
Code, 460, 461, 463-465; Pen. Law, 469.
Admission to State, 172, 173, 276-281; Statutes, 367, 368; Pen.
Law, 469.
Forms, 276-281.
Fees, 173, 337, 339.
Agent of, 172-174, 276-280; Statutes, 367, 368, 432; Code, 460, 464;
Pen. Law, 469.
Forms, 276-280.
Attachment against, 178; Code, 461-463.
Authorization to do Business in State, 172, 173.
Books, 177, 178; Statutes, 432; Code, 463, 464.
Certificate of Authority, 172; Statutes, 367, 368; Pen. Law, 469.
Definition, Statutes, 361; Code, 466.
Designation of Agent, 172-174, 276-279; Statutes, 367, 368; Code,
464.
Forms, 276-279.
Doing Business in State, Defined, 170, 171.
Liabilities of Officers, Directors, etc., Statutes, 432, 442.
Location of Office, 174, 281.
Forms, 280, 281.
Merger, 71; Statutes, 427.
Name, Statutes, 367.
Penalties for Doing Business without License, 173, 174; Stat-
utes, 449; Pen. Law, 469.
Power to Hold Property in State, 174; Statutes, 369.
Principal Office in State, 172, 174, 281; Statutes, 367, 368; Code,
460.
Forms, 280, 281.
Reincorporation of, Statutes, 368, 369.
Reports, 178, 265-270; Statutes, 432, 433, 451-453.
Forms, 266-270.
Sale of Corporate Property to, Statutes, 427.
490 GENERAL INDEX.

[References are to pages.]

Foreign Corporation.—Continued.
Security for Costs, Code, 466.
Status, 170, 173.
Taxation. (See also Taxation.)
Local, 177; Statutes, 445.
State, 174-178.
License Tax, 174, 175, 178; Statutes, 448, 449.
Privilege Tax, 175-178, 265-270; Statutes, 449, 450.
Forfeiture of Charter, 55-57, 66, 67; Statutes, 353, 373, 382-392, 455. (See
also Dissolution.)
By action of Attorney General, 56, 57; Statutes, 382-392.
Misuser, 56, 57; Statutes, 386, 387,
Non-user, 56, 57; Statutes, 373.
Stock for Unpaid Subscriptions, 88, 89; Statutes, 435.
Formation of Corporation. (See Incorporation.)
Franchise Taxes, 143-152, 175-178, 265-270; Statutes, 449-456. (See
also Taxation.)
Forms for Reports, 266-270.
Table of, 335, 336.
Fraud in Formation of Corporation. (See Incorporation.)
Full Liability Corporations, 101, 102; Statutes, 354.
Full Paid Stock, 87, 101; Statutes, 436.

G.

General Business Law, 474.
Corporation Law, 22; Statutes, 360-420.
Tables, 343, 345, 419, 420.
General Manager, 132. (See also By-Laws, 231.)
Good-Will, Deducted in Assessment for Local Taxation, 158, 163.
Included in Assessment for Franchise Tax, 145, 146.
Guaranteed Stock. (See Preferred Stock.)
Guaranty of Bonds, 68, 69, 98; Statutes, 424.

Guardian; Personal Liability as Stockholder, 103; Statutes, 436, 437.
e

H.

Holding over of Officers and Directors, 118, 122, 137; Statutes, 371,
430.
Holding Its Own Stock, 65; Statutes, 430; Pen. Law, 469.
Stock of Other Corporations, 65-67, 157, 162; Statutes, 434, 435.
Status of Holding Corporation, 66, 67; Statutes, 435.
GENERAL INDEX. 491

[References are to pages.]

I.

Illegal Provisions in Charter, 30.
Incorporation, 19, 20, 27-52, 212-242, 335, 338; Statutes, 352, 353, 363,
364, 448.
Forms, 212-242.
Certificate of, 27-41; Statutes, 352, 353, 361, 363-365. (See also
Certificate of Incorporation.)
Expenses of, 25, 26, 39, 40. (See also Expenses.)
Fraud in, 30; Statutes, 386; Pen. Law, 468.
Incorporators, 27-29, 37-39, 171, 212, 215; Statutes, 352, 363.
Cannot take Charter Acknowledgment, 30, 38, 39.
Dissolution by, 58; Statutes, 398.
Dummy, 28, 29.
Frauds by, 30; Statutes, 386; Pen. Law, 468.
Number, 27, 28; Statutes, 352.
Qualifications, 27, 28; Statutes, 363.
Subscriptions, 83, 84; Statutes, 352.
Acceptance of, 47.
Assignment of, 236, 237.
Forms, 236, 237.
Increased Stock, 25, 73, 90.
Stockholders May Participate in, 73.
Increase or Decrease of Capital Stock, 25, 68, 73, 74, 89, 90, 109, 290-
295, 338; Statutes, 438, 439, 448.
Forms, 290-294.
Number of Directors, 74, 109, 120, 121, 295-298, 338; Statutes,
429, 430.
Forms, 295-298.
Number of Shares, 74, 82, 338; Statutes, 439, 440.
Indemnity Bond, Reissue of Lost Certificate, 87; Statutes, 440, 441.
Forms, 205.
Injunction, 61; Statutes, 383, 387, 395, 396; Code, 461; Pen. Law, 470.
Insolvency. (See Dissolution.)
Transfers in Contemplation of, 127; Statutes, 381, 440.
Inspection of Books and Records, 99, 100, 111, 112, 123, 141, 142, 17%,
178; Statutes, 370, 432; Pen. Law, 470.
Inspectors of Election, 48, 113, 115-117, 232, 250-252; Statutes, 370-372,
431; Pen. Law, 471. ,
Forms, 250-252.
Appointment, 43, 115, 116, 232, 250.
Certificate of, 115, 116, 252, 339.
Forms, 251, 252.
Duties of, 118, 116, 117.
492 GENERAL INDEX.

[References are to pages.]

Inspectors of Election.—Continued.
Oath of, 115, 116, 250, 252.
Forms, 250, 251.
Oaths Administered by, 113, 117, 299.
Forms, 298, 299.
Powers, 113, 115-117.
Reports, 115, 116, 250, 252, 339.
Forms, 251, 252.
Instalments, Subscription, 88, 89, 91, 195, 198; Statutes, 435, 436.
Forms, 196-198.
Issue of Bonds. (See Bond Issues.)
Stock, 79, 87, 88, 203; Statutes, 434-436; Pen. Law, 468, 469. (See
also Exchange of Stock for Property.)
for Inadequate Consideration, 88.
Fraud in, 136; Pen. Law, 468, 469, 471, 472.

J.

Judicial Supervision of Corporate Officers and Members, Statutes, 381,
382.

L.

Labor Law, 473, 474.
Laborers’ Rights Against Individual Stockholders, 101; Statutes, 436,
440, 473, 474; Pen. Law, 472.
Laundering Corporations, Exemption of, 151, 152, 269; Statutes, 450.
Forms, 269, 270.
Law, Business Corporations, 21, 351-359.
Common, 23, 24.
Corporation, 19-24, 351-474. (See also Statutes.)
Corporations Practicing, 27, 33, 137; Statutes, 352, 353; Pen.
Law, 467, 468.
General Corporation, 22, 360-420.
Penal, 467-472.
Stock Corporation, 21, 22, 421-443.
Tables, 335-350.
Tax, 444-459.
Laws, Conflicting, 22; Statutes, 418.
Construction of, 22; Statutes, 418.
Repealed, Statutes, 359, 418-420, 442, 443.
Ledger, Stock, 140-142, 208, 209, 211; Statutes, 369, 370, 372, 431, 432;
Pen. Law, 470. (See also Books.)
Forms, 210.
Legislature, Power to Create Corporations, 19, 20; Statutes, 418.
GENERAL INDEX. 493

[References are to pages.]

Liabilities of Directors, 126-129, 137; Statutes, 381, 385, 386, 430, 431,
433, 474; Pen. Law, 467-470.
False Certificates, 127-129; Statutes, 433; Pen. Law, 470.
Foreign Corporations, Statutes, 432, 442.
Loans to Stockholders, 128; Statutes, 430, 431; Pen. Law.
469.
Negligence, 126, 129.
Prohibited Transfers, 127, 129; Statutes, 381, 440.
Unauthorized Dividends,. 98, 126-128; Statutes, 430; Pen.
Law, 469.
Officers, 127, 128, 135-137; Statutes, 353, 430-433, 440, 474; Pen.
Law, 467-470.
Stockholders, 87, 101-103; Statutes, 383, 386, 416, 434, 436-438,
440; Code, 465.
Secured on Stock, 92; Statutes, 434.
When Stock is Full Paid, 87, 101, 102.
When Stock is Part Paid, 102, 103.
License Tax on Foreign Corporations, 174, 175, 178; Statutes, 448, 449.
(See also Taxation.)
Lien, Corporate, on Stock, 92; Statutes, 434.
Limitation of Corporate Powers, 27, 33, 34, 37, 38, 62; Statutes, 352,
353, 365, 369; Pen. Law, 467, 468.
Stockholders’ Liability, 87, 101-103; Statutes, 436, 437.
Lists, Subscription, 83-85, 191, 192, 194, 195; Statutes, 435.
Forms, 191-195.
Loans to Stockholders, 128; Statutes, 430, 431; Pen. Law, 469.
Local Tax, 157-165, 177, 271-275; Statutes, 444-447. (See also Taxation;
also Reports.)
Forms, 271-275.
Location of Principal Office. (See Principal Office.)
Lost Certificates of Stock, 86, 87, 96, 99; Statutes, 440, 441.
Indemnity Bond, 87.
Forms, 205.
Lost Certificate of Incorporation; Statutes, 364.

M.

Majority, Powers of. (See Stockholders.)
Manufacturing Companies, Tax Exemptions, 151, 152, 269; Statutes,
450.
Forms, 269, 270.
Meetings, 42, 43, 47-52, 106-117, 129, 130, 233, 256, 287-301.
Forms, 233-256.
Adjournment, 50, 52, 59.
494 GENERAL INDEX.

[References are to pages.]

Meetings.—Continued.
Calls, 72, 107, 247, 258, 254.
Forms, 247, 253.
Calls and Waivers, 48, 51, 107, 108, 234, 235, 254; Statutes, 375,
376.
Forms, 234, 235, 254.
Consent, 47, 48, 50, 51, 72, 107. 108, 129; Statutes, 375, 376.
Directors, 38, 43, 50-52, 129, 130, 234-238, 240, 253-256; Statutes,
352, 373.
Forms, 235-238, 240-242, 253-256.
First, 50-52, 234-238, 240.
Forms, 235-238, 240-242,
Adjournment, 52.
Call and Waiver, 51, 235.
Forms, 235.
Election of Officers, 51.
Exchange of Stock for Property, 52, 87, 88, 234-238,
240-242.
Forms, 234-238, 240-242.
Minutes, 51, 240-242.
Forms, 240-242,
Notice of, 51, 235.
Place of, 38, 129.
Regular, 129, 130.
Forms, 255, 256.
Special, 129, 130, 253, 254; Statutes, 375, 376.
Forms, 253, 254.
Minutes of, 48, 51, 238-242.
Forms, 238-242, 252, 253, 255, 256.
Notice of, 43, 47, 48, 51, 72-75, 98, 99, 107-110, 129, 130, 247-250, 254,
288, 295, 299, 300; Statutes, 375, 376, 429.
Forms 247-250, 254, 255, 288, 295, 300.
Officers of, 51, 133.
Order of Business, 222, 223, 227, 229.
Proxies, l2, 113, 130, 233, 244, 246.
Forms, 233, 244-246; Statutes, 370, 371.
Quorum, 42, 43, 49, 110, 114, 119, 130; Statutes, 366, 372, 373, 429.
Record of. (See Minutes.)
Stockholders’, 42, 48, 47-50, 106-119, 233-240, 244-253, 287-301;
Satutes, 366, 369-372, 375, 429, 431.
Annual, 42, 43, 106-117, 245, 248-253, 299; Statutes, 429.
(See also Annual Meeting; also Election.)
Forms, 244, 245, 248-253, 298, 299.
GENERAL INDEX. 495

[References are to pages.]

Meetings.—Continued.
Stockholders.—Continued.
First, 47-50, 233-240.
Forms, 233-239.
Acceptance of Charter, 49.
Adjournment, 50, 59.
Adoption of By-Laws, 44, 49, 50.
Call and Waiver, 47, 48, 234.
Forms, 234.
Conduct of Meeting, 48.
Exchange of Stock for Property, 50, 234-240.
Forms, 234-239.
Minutes, 48, 238-240.
Forms, 238, 239.
Notice, 47, 48, 107, 108, 110, 234; Statutes, 375, 376.
Organization, 49.
Place of, 42, 106, 107.
Special, 72, 107-110, 118, 119, 245-248, 287-301; Statutes,
371, 372, 375, 376, 429.
Forms, 245-248, 287-301.
Voting at, 98, 99, 111-119, 130; Statutes, 369-372; Pen, Law, 471.
(See also Voting.)
Waivers of Notice, 47, 48, 51, 72, 107, 108, 234, 235, 254; Statutes,
375, 376.
Forms, 234, 235, 254.
Membership, Statement of, 119, 300, 301; Statutes, 372.
Forms, 300,
Merger, 71; Statutes, 427.
Fees, 339.
Mining Companies, Exemption of, 151, 152, 269; Statutes, 450.
Forms, 269, 270.
Minority. (See Protection of.)
Minutes, 48, 51, 238-242.
Forms, 238-242, 252, 253, 255, 256.
Certified, 260, 261.
Forms, 260.
Directors’, 51, 240-242.
Forms, 240-242, 255, 256.
Stockholders’, 48, 238-240.
Forms, 238, 239, 252, 253.
Misconduct at Elections, 115, 117; Pen. Law, 471.
of Directors, Officers and Employees, 126-129, 135-137; Pen.
Law, 469, 470. (See also Liabilities.)
Misdemeanor, Penalty When Not Otherwise Provided, Pen. Law, 472.
496 GENERAL INDEX.

[References are to pages. ]

Monopolies, Statutes, 427, 474.
_Mortgages, 67, 68, 97, 320-334, 339; Statutes, 415, 423-426. (See also
Bond Issues.)
Exempt from Local Taxation, 158, 163.
Foreclosure, Statutes, 415, 424-426.
Recorded, Evidence of Stockholders’ Consent, Statutes, 423.

N.

Name, Corporate, 31, 32, 75, 76, 215, 281-284; Statutes, 352, 363, 364,
367; Pen. Law, 469-471.
Change of, 32, 75, 76, 281-284; Statutes, 376-379.
Forms, 281-284,
Unlawful Use of, Pen. Law, 470.
New York City, Local Taxation, 164, 165, 169, 272-275.
Form of Tax Report, 273-275.
Non-Voting Stock, 112; Statutes, 369, 370.
Notice of Directors’ Meetings, 51, 129, 130, 254; Statutes, 375.
Forms, 254, 255.
Dividends, 319.
Forms, 318, 319.
Special Elections, 118, 299, 300; Statutes, 371, 372, 429.
Forms, 300.
Stockholders’ Meetings, 43, 47, 48, 72-75, 98, 99, 107-110, 247-250,
288, 295, 300; Statutes, 375, 376, 429, 438.
Forms, 247-250, 288, 295, 300.
Publication of, 72-75, 108-110, 248-250, 288, 300; Statutes, 429.
Forms, 249, 250, 281, 282, 288, 319.
Waiver of, 47, 48, 51, 72, 107, 108, 234, 235, 254; Statutes, 375, 376.
Forms, 234, 235, 254.
Number of Directors, 36, 37, 74, 120, 295-298; Statutes, 352, 429, 430.
Change of, 74, 109, 120, 121, 295-298; Statutes, 429, 430.
Forms, 295-298.
Incorporators, 27, 28; Statutes, 352.
Shares, Change of, 74, 82; Statutes, 439, 440.
*

O.

Oath of Challenged Stockholder or Proxy, 113, 117, 119, 299, 300;
Statutes, 371.
Forms, 298-300.
Inspectors of Election, 115, 116, 250, 252; Statutes, 431; Pen.
Law, 471.
Forms, 250, 251.
GENERAL INDEX. 497

[References are to pages.]

Office, Principal, 36, 74, 75, 107, 139, 158, 169, 172, 174, 177, 215.
Change of Location, 74, 75, 281, 285-287; Statutes, 426, 427.
Forms, 280, 281, 285-287.
Location of, 36, 158, 169, 215; Statutes, 352, 361.
of Foreign Corporation, 172, 174, 281; Statutes, 367, 368; Code,
460.
Forms, 280, 281.
Officers, 43, 51, 62, 63, 127, 128, 132-1388; Statutes, 366, 375, 381, 382,
431, 433. (See also By-Laws, 223, 227-231.)
Appointment of, 62, 63, 132; Statutes, 366, 431.
Bond of, 133; Statutes, 431.
Compensation, 138.
Duties, 438, 132; Statutes, 375, 431.
Election of, 51, 62, 63, 132; Statutes, 366, 431.
Essential, 132.
Liabilities of, 127, 128, 135-137, 178; Statutes, 353, 430-433, 440,
473, 474; Pen. Law, 467-470.
of Meetings, 51, 133.
Powers, 43, 133-135; Statutes, 431.
President. (See President.)
Qualifications, 132, 133; Statutes, 431.
Removal, 137; Statutes, 381, 415, 416, 431.
Resignation, 137, 138.
Salaries, 138.
Secretary. (See Secretary.)
Signatures, 136, 257-259.
Forms, 257, 258.
Tenure of Office, 137, 138; Statutes, 431.
Treasurer. (See Treasurer.)
Vacancies, 137, 138. (See also By-Laws, 223, 228.)
Vice-President, 133, 227, 229.
Order of Business. (See By-Laws, 222, 223, 227, 229.)
Order, Voluntary Dissolution, 61; Statutes, 394-397.
Forms, 310, 311, 314, 315.
Organization of Corporation, 25-52, 212-242; Statutes, 352, 353, 363,
364, 448. (See also Certificate of Incorporation.)
Forms, 212-242,
Fees and Expenses of, 25, 26, 39, 40, 335-339.
First Meetings, 47-52, 233-242. (See also Meetings.)
Frauds in Organization, 30; Statutes, 386; Pen. Law, 468.
Tax, 25, 26, 39, 40, 77; Statutes, 363, 448.
Table of, 335, 336, \
498 GENERAL INDEX.

[References are to pages.]
P.

Paid Up Stock, 87, 101, 102; Statutes, 436.
Partly Paid Stock, Certificate of, 86; Statutes,’ 436, 437.
Par Value of Stock, 35, 82, 83; Statutes, 352, 439, 440.
Issue for Less than, 86, 88; Statutes, 436, 437.
Patents and Copyrights, Deducted in Assessment for Local Taxation,
158, 163.
Included in Assessment for Franchise Tax, 145.
Payment for Stock in Property. (See Exchange of Stock for.)
Payment of Capital Stock, 78, 88, 89, 91, 92, 234-243, 263, 264; Statutes,
352, 353, 435-437.
Forms, 234-2438, 263, 264.
Subscriptions, 88, 89, 91, 195, 198, 199; Statutes, 435.
Payment of Taxes and Penalty for Failure; Statutes, 453-455. (See
Taxation.)
Penal Law, 467-472.
Table, 350.
Personalty, Taxation of, 157-165; Statutes, 444-447. (See also Taxa-
tion.)
Petition for Voluntary Dissolution, 60, 61; Statutes, 392-394.
Forms, 307-309.
Place of Assessment of Personalty, 139, 158; Statutes, 444, 445.
Place of Business. (See Office.)
Pleadings, Code, 461.
Pledgee of Stock, 103; Statutes, 370, 436, 437.
Pledgeor of Stock, 103; Statutes, 436, 437.
Right to Vote, 111; Statutes, 370.
Political Contributions Forbidden, 77, 137; Statutes, 376.

Powers of Corporations, 27, 33, 34, 37, 38, 60-77; Statutes, 352, 353, 365-
367, 369; Pen. Law, 467, 468. (See also Amendment of Charter.)
Banking Powers Prohibited, 21, 33; Statutes, 352, 364, 369.
Limitations on, 33, 34, 37, 38, 62; Statutes, 352, 353, 365, 369.
Practice of Law Prohibited, 27, 33, 137; Statutes, 352, 353; Pen.

Law, 467, 468.
to AcquireeProperty outside State, 64, 65; Statutes, 366, 367.
to Amend Charter, 72-77; Statutes, 364.
to Appoint Directors, Officers and Agents, 62, 63; Statutes, 366.
to Borrow Money, 67, 68; Statutes, 422, 424.
to Buy, Sell and Hold Property, 64, 65; Statutes, 366, 369.
to Condemn Land; Statutes, 358, 359.
to Consolidate, 69-71, Statutes, 354-357.
to Do Business in Other States, 69; Statutes, 366, 367.
to Exchange Preferred for Common Stock, 81; Statutes, 437, 438.
GENERAL INDEX. 499

[References are to pages.]

Powers of Corporations.—Continued.
to Extend Existence, 54, 55, 75; Statutes, 373-375.
to Guarantee Bonds, 68, 69, 98; Statutes, 424.
to Have a Seal, 63; Statutes, 365.
to Have Succession, 62; Statutes, 365.
to Hold Its Own Stock, 65; Statutes, 430.
Other Stock, 65-67, 157, 162; Statutes, 434, 435.
to Issue Bonds, 67, 68; Statutes, 422. (See also Bond Issues.)
to Issue Partly Paid Stock, 86; Statutes, 437.
to Issue Preferred Stock, 34, 75, 79-82; Statutes, 352, 437, 438.
to Make By-Laws, 63; Statutes, 366. (See also By-Laws.)
to Merge, 71; Statutes, 427.
to Mortgage Property, 67, 68; Statutes, 423-426.
to Sell Entire Property and Franchise, 98; Statutes, 427, 428.
to Sue and Be Sued, 20.
Ultra Vires Acts, Effect of, 38, 34, 77.
Powers of Directors, 38, 44, 46, 104, 122-124; Statutes, 366, 373, 375, 376.
Officers, 43, 133-135; Statutes, 431.
Stockholders, 44, 45, 96-101, 104, 105, 111, 112.
Powers of Supreme Court Respecting Elections, 117; Statutes, 372.
Preferred and Deferred Causes. (See Actions.)
Preferred Claims, Laborers’ Wages, 101; Statutes, 436, 440, 473, 474;
Pen. Law, 472.
Preferred Stock, 34, 35, 75, 79-82, 203, 288-290, 292-295; Statutes, 352,
437, 438.
Certificate of, 85, 86, 203.
Forms, 202.
Creation after Organization, 34, 35, 75, 81, 288-290, 292-295; Stat-
utes, 437, 438.
Forms, 288-290,’ 292-294.
Dividends on, 80, 81, 94.
Exchange of for Common, 81; Statutes, 437, 438.
Redemption of, 81, 82; Statutes, 437, 438.
Rights of Holders of, 80, 81.
Voting Rights, 81, 112.
President, 132-135; Statutes, 431. (See By-Laws, 223, 227-229.)
Call for Special Meeting, 107.
Forms, 253.
Certification by,
Forms, 283, 289, 290, 294, 297, 305.
Qualifications, 132, 133; Statutes, 431.
Signature, 136, 257-259.
Forms, 257, 258.
500 GENERAL INDEX.

[References are to pages.]

Principal Office. (See Office.)
Privilege Tax on Foreign Corporations, 175-178; Statutes, 449, 450.
Profits, Officers’ Improper, 135, 136.
Property for Stock. (See Exchange of Stock for Property.)
Assignment of, 127, 129, 136; Statutes, 381, 440.
Forms, 242, 243.
Power to Hold, 64, 65, 174; Statutes, 366, 369.
Sale of Entire, 98; Statutes, 427, 428.
Taxation of. (See Taxation.)
Protection of Minority, 105, 114, 115, 315-317.
Proxies, 112, 113, 130, 233, 244-246; Statutes, 370, 371.
Forms, 233, 244-246.
Expiration of, 112, 113, 246; Statutes, 371.
for Annual Meeting, 244, 245.
Forms, 244, 245.
for Special Meeting, 245, 246.
Forms, 245, 246.
for Specific Action, 246.
Forms, 245, 246.
Oath of, 113, 299; Statutes, 371.
Forms, 299.
Revocation of, 112, 113, 246; Statutes, 371.
Forms, 246.
Publication Notice of Meetings, 72-75, 108-110, 248-250, 288, 300; Stat-
utes, 429.
Forms, 249, 250, 281, 282, 288.
Purposes, Charter, 33, 34, 215; Statutes, 352, 353. (See Certificate of
Incorporation.)
Additional, 72; Statutes, 428.

Q.

Qualification of Directors, 37, 43, 121; Statutes, 373, 429, 435.
Incorporators, 27, 28; Statutes, 363.
Officers, 132, 133; Statutes, 431.
Voters at Corporate Meetings, 111; Statutes, 369-372.
Quorum at Annufl Meeting, 42, 49, 110, 114; Statutes, 429.
Directors’ Meetings, 43, 130; Statutes, 373, 375.
Stockholders’ Meetings, 42, 49, 110, 114, 119; Statutes, 366, 372,
429.

R.

Ratification of Unauthorized Action, 129.
Realty, Taxation of, 146, 157, 159-161, 163, 169; Statutes, 444, 445.
GENERAL INDEX. 501

[References are to pages.]

Receipts for Subscription Payments, 195, 198, 199.
Forms, 196-200.
Receivers of Corporations, 61, 179-190; Statutes, 383-385, 387-392, 400-
418, 425, 426, 435, 436; Pen Law, 473.
Forms, 314, 315.
Accounting, 189, 190; Statutes, 410-412.
Accounts of, 186, 187; Statutes, 384, 406.
Application for, 61; Statutes, 384, 385, 395.
Appointment of, 61, 179, 180; Statutes, 383, 384, 387, 397, 415.
Forms, 314, 315.
Attorney General, Service on, 60, 61, 182, 186; Statutes, 406, 417.
Bond of, 180; Statutes, 401.
Care of Funds, 186; Statutes, 401, 417.
Collection of Assets, 182-185; Statutes, 401-409, 435, 436.
Conversion of Estate into Money, 185, 186; Statutes, 402, 403, 406.
Death of, 190; Statutes, 402, 411.
Disbursements, 187, 188; Statutes, 408, 473.
Distribution of Assets, 186-188.
Creditors’ Meetings, 186, 187; Statutes, 407, 408.
Dividends, 187, 188; Statutes, 409-411.
Order of Distribution, 187, 188; Statutes, 408-410.
Proof of Claims, 187; Statutes, 414.
Employment of Counsel, 181, 182; Statutes, 405.
Fees of, 188, 189; Statutes, 412, 413.
Injunction, Allowance, 61; Statutes, 383, 387, 395,396; Code, 461.
Interested Parties may be Appointed as, Statutes, 397.
Liability of, Statutes, 397.
Notice to Creditors, 181; Statutes, 397, 407.
Oath of, 180; Statutes, 402.
of Moneyed Corporations, Statutes, 388-392.
Permanent, 179, 180; Statutes, 384, 397.
Powers and Duties, 181-190; Statutes, 383, 384, 397, 400, 413.
Removal of, 190; Statutes, 411, 416, 417.
Reports, 187; Statutes, 406, 407.
Resignation of, 190; Statutes, 411, 412.
Sales of Property, 185, 186; Statutes, 402, 403.
Temporary, 179; Statutes, 383, 384, 395.
Title to Property Administered, 182; Statutes, 401.
Vacancies, 190; Statutes, 402, 411.
Recorded Mortgage Evidence of Stockholders’ Consent; Statutes, 423.
Recording Certificate of Incorporation, 39, 40; Statutes, 352, 363, 448.
Fees, 25, 26, 39, 40; Statutes, 363.
Tables, 335-338.
Records, Corporate. (See Books; also Minutes.)
502 GENERAL INDEX.

[References are to pages.]

Redemption of Preferred Stock, 81, 82; Statutes, 437, 438.
Reduction of Capital Stock. (See Decrease.)
Number of Directors. (See Decrease.) ,
Number of Shares. (See Decrease.)
Referee, 311-314.
Forms, 311-314.
Regular Meetings. (See Meetings.)
Relations of Stockholders, 96, 103, 104, 124, 125.
Removal of Directors, 38, 123; Statutes, 381, 415, 416; Code, 465.
Officers, 137; Statutes, 381, 415, 416, 431.
Renewal of Corporate Existence, 54, 55, 75, 98; Statutes, 374, 375.
Reorganization of Existing Corporation, 25, 26, 69-71; Statutes, 353, 363,
364, 424-426,
Repeal of By-Laws, 45, 46.
Reports, 166-169, 177, 178, 263-275.
Forms, 263-275.
Annual, 166, 167, 264, 265, 339; Statutes, 432, 433.
Forms, 265.
Comptroller’s. (See Reports, Tax.)
Franchise Tax. (See Reports, Tax, to State Comptroller.)
Foreign Corporations, 178, 265-270; Statutes, 432, 433, 451-453.
Forms, 266-270.
Inspectors of Election, 115, 116, 250, 252, 339; Statutes, 431.
Forms, 251, 252.
Liability for False Report, 127-129, 136; Statutes, 433; Pen.
Law, 470,
Stock Exchanged for Property must be so Reported; Statutes,
436.
Tax, to Local Assessors, 168, 169, 177, 271-275; Statutes, 446.
Forms, 271-275.
New York City, 164, 165, 169, 272-275.
Forms, 273-275.
Penalty for Failure to Make, Statutes, 446.
Tax, to Comptroller, 152, 167, 168, 178, 265-270; Statutes, 451-453.
@ Forms, 266-270.
Execution of, 268.
Foreign Corporations, 178, 265-269; Statutes, 451-453.
Forms, 266-270.
Manufacturing Corporations, 152, 269, 270.
Forms, 269, 270.
Penalty for Failure to Make, 168, 268, 269; Statutes, 453.
Supplemental Reports, 168, 169; Statutes, 452.
When Filed, 268.
GENERAL INDEX. 503

[References are to pages. ]

Resignation of Director or Officer, 137, 138.
Resolutions, 237, 238, 261, 262, 320, 322.
Forms, 237, 238, 261, 262, 281, 318, 320, 323.
Certified, 261, 262.
Forms, 261, 262. :
Restrictions upon Commencement of Business, 53, 54; Statutes, 353,
363.
Voting, 112; Statutes, 369, 370.
Review of Election, 117, 301; Statutes, 372.
Forms, 301, 302.
Revocation and New Designation of Agent, 279, 280; Statutes, 367, 368;
Code, 460.
Forms, 279, 280.
Revocation of Agent’s Consent, 173, 280; Statutes, 367, 368; Code, 460.
Forms, 280.
Proxy, 112, 113, 246; Statutes, 371.
Forms, 246.
Rights of Stockholders, 60, 71, 73, 86, 87, 96-101, 104, 105, 111, 112, 141,
142, 177.
Collective, 96-98.
Individual, 98-101.
Not Dependent on Stock Certificate, 86, 87.
Participation in Increased Stock, 73.
Voting, 98, 99, 111, 112, 116, 117; Statutes, 369-372; Pen. Law, 471.
Rules of Comptroller as to Transfer Tax, 154-156.

S.

Salaries of Directors, 122, 138.
Officers, 138.
Sale of Franchise and Property, 98; Statutes, 427, 428.
Rights of Non-consenting Stockholders, Statutes, 428.
Schedule of Laws Repealed, 359, 419, 420, 443.
Scrip, Instalment, 198.
Forms, 197, 198.
Seal, 63; Statutes, 365, 434.
Attestation of, 258.
Forms, 258.
Secretary, 132. (See By-Laws, 223, 225-230.)
Books of, 139-142. (See also Books.)
Certificate of, 260-262, 278.
Forms, 260-262, 278, 285, 289-291, 294-297, 305, 306.
Duties, 63, 91-93, 118, 114, 206, 208, 258; Statutes, 353, 431, 433,
434.
504 GENERAL INDEX.

[References are to pages.]

Secretary.—Continued.
Duties.—Continued.
Affixing Seal, 63.
Attestation of Seal, 258.
Closing Stock Books, 113, 114.
Transfer of Stock, 91-93, 205, 206, 208.
Signature, 136, 257-259.
Forms, 258.

Service on Corporations, Statutes, 367, 368; Code, 460, 466.

Shares of Stock, 35, 74, 82. (See also Stock.)
Change of, Number, 74, 82; Statutes, 439, 440.
Par Value, 35, 82, 83; Statutes, 352, 439, 440.

Signatures, Corporate and Official, 136, 257-259.

Forms, 257, 258.

to Stock Certificates, 85, 201.
Forms, 201, 202.

Special Meetings, 72, 107-110, 118, 119, 129, 130, 245-248, 253, 254, 287-
301; Statutes, 371, 372, 375, 376, 429.

Forms, 245-248, 253, 254, 287-301.

Statute Requirements for Calling, 72, 107-110.

to Elect Directors, 108, 109, 118, 119, 299-302; Statutes, 371, 372,

429.

Forms, 300-302.

Special Provisions in Charter, 37, 38, 212; Statutes, 352, 365.
Classification of Stock, 34, 35, 79-82; Statutes, 352, 437, 438.
Corporate Stockholding, 65-67; Statutes, 434, 435.
Cumulative Voting, 114, 115; Statutes, 370.

Stamp Tax on Stock Transfers, 153-156; Statutes, 456-459.

Standing Committees, 51, 52, 130, 131.

Statement of Financial Condition, 100; Statutes, 441, 442.
of Membership, 119, 300, 301; Statutes, 372.

Forms, 300.
to Secure Exemption from Taxation, 152.
Forms, 269, 270.
State Taxation, 143-156, 174-178, 265-270; Statutes, 447-459, (See also
Taxation.)
Forms, 266-270.

Statutes, 19-23, 351-474,

Business Corporations Law, 21, 351-359.
Classification of, 20-23.

Code of Civil Procedure, 460-466.
General Corporation Law, 22, 360-420.
Miscellaneous, 336, 337, 473, 474.
Penal Law, 467-472.
GENERAL INDEX. 505

[References are to pages. ]

Statutes.—Continued.
Stock Corporation Law, 21, 22, 421-443.
Tax Law, 444-459.
Stay in Action Collusively Brought; Statutes, 372, 373.
Steam Corporations; Statutes, 357, 358.
Stock. (See Separate Subjects for Detailed and Statutory References.)
Assignment of, 91-93, 99, 204, 206, 208, 236, 237.
Forms, 204, 206, 207, 236, 237.
in Blank, 91, 92, 204.
Forms, 204.
Book, 111, 113, 114, 116, 117, 119, 140-142, 177, 178, 208, 209, 211.
(See also Books, Corporate.)
Forms, 210.
of Foreign Corporation, 177, 178.
Capital, 34, 35, 44, 78-95. (See also Capital Stock.)
Certificates of, 85-87, 96, 99, 199-205.
Forms, 200-204.
Classification of, 34, 35, 75, 79-82, 288-290, 292-295.
Forms, 288-290, 292-294.
Common, 79, 80, 203.
Forms, 201.
Consideration for Issue, 87, 88; Statutes, 436.
Conversion of Bond into, 68, 98; Statutes, 422.
Corporations Holding, 65-67, 157, 162; Statutes, 430, 434, 435;
Pen. Law, 469.
Decrease of, 73, 74, 89, 90, 109.
Forms, 290-294.
Dividends on, 93-95, 99, 126-128, 147-151, 319.
Forms, 318, 319.
Donation to Treasury, 236.
Exchange for Property, 50, 52, 87, 88, 234-243.
Forms, 234-243.
Forfeiture of, 88, 89.
Fraudulent Issue, 136; Pen. Law, 468, 469, 471, 472.
Full Paid, 87, 101.
Increase of, 25, 68, 73, 74, 89, 90, 109, 290-295.
Forms, 290-294.
Issue of, 79, 87, 88, 203. (See also Exchange of Stock for Prop-
erty.)
Ledger, 111, 113, 114, 116, 117, 119, 140-142, 177, 178, 208, 209, 211.
Forms, 210.
Lien on, Corporate, 92; Statutes, 434.
Minimum Amount, 34, 35, 79.
506 GENERAL INDEX.

[References are to pages.]

Stock.—Continued.
Non-Voting, 112.
Partly Paid, 86.
Par Value, 35, 82, 83.
Payment of, 78, 88, 89, 91, 92, 263, 264.

Forms, 263, 264.
Preferred, 34, 35, 75, 79-82, 203, 288-290, 292-295.
Forms, 202, 288-290, 292-294,
Shares of, 35, 74, 82.
Subscription to, 37, 83-85, 191-200, 215.
Forms, 191-200.
Transfer of, 44, 91-93, 99, 204-208, 236, 237, 339.
Forms, 204, 206, 207, 236, 237.
Transfer Tax, 153-156. (See Taxation.)
Unissued, 78, 79.
Stock Books. (See Books, Corporate.)
Stock Corporation Law, 21; Statutes, 421-443.
Table, 346, 347, 443.
Stockholders, 96-105.
Actions by or against, 96-104, 126; Statutes, 383, 385, 386, 393,
416, 435-438, 440; Code, 465,
Consent of, 72, 106. (See also Consent of Stockholders.)
Creation of Relation, 96.
Liabilities of, 87, 101-103; Statutes, 385, 386, 416, 436-438, 440;
Code, 465.
Secured on Stock, 92; Statutes, 434.
When Stock is Full-paid, 87, 101, 102.
When Stock is Part-paid, 102, 103.
List of, to be kept, 140; Statutes, 431, 432.
Loans to, Prohibited, 128; Statutes, 430, 431; Pen. Law, 469.
Majority, Powers of, 104, 105.
Meetings of. (See Meetings.)
Oath, 117, 119, 299, 300; Statutes, 371.
Forms, 298-300.
of Record, 111, 112; Statutes, 369, 370.
Powers, #4, 45, 96-101, 104, 105, 111, 112.
Relations of, 96, 103, 104, 124, 125.
Rights, 60, 71, 73, 86, 87, 96-101, 104, 105, 111, 112, 141, 142,177. (See
also Rights of Stockholders.)
Statement of Membership, 199, 300, 301; Statutes, 372.
Forms, 300.
Transfers of Property to, 127; Statutes, 440.
Who are; Statutes, 361.
Stock Transfer Tax, 153-156; Statutes, 456-459,

s
GENERAL INDEX. 507

[References are to pages. ]

Subscription to Stock, 37, 83-85, 191-200, 215; Statutes, 352, 385, 435,
436; Pen. Law, 468.
Forms, 191-200.
Acceptance of, 47, 83, 84.
After Incorporation, 84, 85, 195; Statutes, 435.
Forms, 194, 195.
Agreements, 83, 84, 191, 192, 194, 195.
Forms, 191-195.
Assignment of, 236, 237.
Forms, 236, 237.
Blanks, 191, 192, 194, 195.
Forms, 191-195.
Forfeiture of Stock for Non-Payment, 88, 89; Statutes, 435.
Lists, 83-85, 191, 192, 194, 195.
Forms, 191-195.
Payment of, 88, 89, 91, 195, 198, 199.
Receipts for, 195, 198, 199.
Forms, 196-200.
Ten Per Cent. Must Accompany, 84, 85; Statutes, 435.
Subscribers to Certificate, 37, 215; Statutes, 352. (See also Incorpora-
tors.)
Suit. (See Actions.)
Summons. How Served; Statutes, 367, 368; Code, 460, 466; Pen. Law,
469.
Supreme Court, Review of Election, 117, 301; Statutes, 372.
Surplus, Taxation of, 144, 162; Statutes, 446.
When Exempt from Taxation, 157, 162; Statutes, 446.

T.

Tables, 335-350.

Comparative Section References, 342-350.
Business Corporations Law, 342.
Code of Civil Procedure, 349, 350.
General Corporation Law, 343-345.
Penal Law, 350.
Stock Corporation Law, 346, 347.
Tax Law, 348.

Corporate Calendar, 340-342.

Fees, General Schedule, 338, 339.

Fees to Comptroller, 337.

Fees to County Clerk, 337.

Fees to Secretary of State, 336, 337.
508 GENERAL INDEX.

[References are to pages. ]

Tables.—Continued.
Laws Repealed,
Business Corporations, 359.
General Corporation, 418-420.
Stock Corporation, 443.
Organization Expenses and Franchise Tax, 335, 336.
Taxation, 25, 26, 39, 40, 143-165, 174-178, 265-275; Statutes, 444-459.
Forms, 266-275.
Annual Franchise Tax, 143-152, 175-178, 265-269; Statutes, 449-
456.
Forms, 266-270.
Table, 335, 336.
Appraisal of Stock, 148-151, 267, 268, 269; Statutes, 451,
452,
Forms, 267, 268.
Basis for, 143, 144.
Capital Employed in State, 143-152, 174-177; Statutes, 448,
449.
Classification for, 147-151; Statutes, 449, 450.
Collection of; Statutes, 454, 455.
Comptroller’s Powers, 147, 167, 168; Statutes, 452-455.
Date of Assessment, 167.
Deductions, 145, 146.
Exempt Corporations, 151, 152; Statutes, 450.
Foreign Corporations, 175-178, 265-269; Statutes, 449, 450.
Good-Will, Value Included, 145, 146.
Manufacturing Companies, 151, 152, 269; Statutes, 450.
Forms, 269, 270.
Notice of Amount, 340; Statutes, 453.
Patents and Copyrights, Value Included, 145.
Payment of, 340; Statutes, 453.
Penalties for Non-Payment, Statutes, 453-455,
Personal Property, Exempt from Other State Taxation,
Statutes, 455, 456.
Reports, 152, 167, 168, 265-269; Statutes, 451-453. (See also
Reports.)
Forms, 266-270.
Surplus Not Included, 144.
Table of, 335, 336.
United States Bonds, Value Included, 145.
When Dividends are Less than 6%, 149-151.
When Dividends are Not Less than 6%, 148.
When No Dividends are Paid, 148, 149.
GENERAL INDEX. 509

[References are to pages.]

Taxation.—Continued.
License Tax, Foreign Corporations, 174, 175, 178; Statutes, 448,
449,
Local Tax, 157-165, 177, 271-275; Statutes, 444-447,
Forms, 271-275.
Assessment, 158-165, 271-275; Statutes, 446, 447.
Date of, 164, 168, 169.
in New York City, 164, 165, 169, 272.
Manner of, 158, 159, 164, 165, 271-275.
Place of, 139, 158; Statutes, 445.
Deductions, 157-163, 177; Statutes, 445, 446.
Exemption, 157-163; Statutes, 445.
Foreign Corporations, 177; Statutes, 445.
on Personalty, 157-165.
on Realty, 157, 159-161; Statutes, 444, 445.
Reports, 168, 169, 177, 271-275; Statutes, 446. (See also
Reports.)
Forms, 271-275. f
Special Franchises, 165.
Stockholders Not Taxed on Stock, Statutes, 445.
Surplus or Reserve, 162.
Tax District, 157; Statutes, 444, 445.
Organization Tax, 25, 26, 39, 40, 77; Statutes, 448.
Table of, 335, 336.
Privilege Tax, Foreign Corporations, 175-178, 265-270; Statutes,
449, 450.
Stock Transfer Tax, 153-156, 339; Statutes, 456-459.
Comptroller’s Rules, 154-156.
Tax District, 157. (See Taxation.)
Tax Law, 22; Statutes, 444-459.
Table, 348.
Transcript, Certified, from By-Laws, 262.
from Minutes, 260, 261.
Forms, 260.
Resolution, 261, 262.
Forms, 261, 262.
Transfer Agent, 114.
of Foreign Corporation, 177; Statutes, 432.
Transfer Book, 206, 208.
Forms, 206, 207.
Closing, 111, 113, 114; Statutes, 369, 370.
Transfer of Stock, 44, 91-93, 99, 204-208, 236, 237; Statutes, 366, 432,
434, 456-459; Pen. Law, 469, 471, 472.
Forms, 204, 206, 207, 236, 237.
510 GENERAL INDEX.

[References are to pages. ]

Transfer of Stock.—Continued.
in Blank, 91, 92, 204.
Forms, 204.
Tax on, 153-156, 339; Statutes, 456-459.
Transfer Tax, 153-156, 339; Statutes, 456-459.
Transfers in Contemplation of Insolvency, 127; Statutes, 440.
Treasurer, 132, 133. (See also By-Laws, 223, 224, 228-231.)
Affidavit, 259, 260.
Forms, 260, 305.
Bond of, 133.
Endorsement of, 258, 259.
Forms, 258.
Signature, 136, 257-259.
Forms, 258.

Statement of, 100; Statutes, 441, 442.

Treasury Stock, 236; Statutes, 430. (See also By-Laws, 225.)
Trustee, Certificate of, 325.
Forms, 325.

Not Personally Liable, 103; Statutes, 436, 437.
Trustees, Directors, on Dissolution, 60, 123, 124; Statutes, 373.
Trusts, Voting, 105, 315-317; Statutes, 370, 371.

Forms, 315-317.

U.

Ultra Vires, 33, 34, 77; Statutes, 365.

Unissued Stock, 78, 79.

United States Securities, Excluded From Local Tax, 157, 163.
Included in Franchise Tax, 145.

V.

Vacancies, Directors, 119, 121; Statutes, 429, 430. (See also By-Laws,

223, 227.)

Officers, 137, 138. (See also By-Laws, 223, 228-231.)
Verification of Pleadings, Statutes, 461.
Vice-President, 133. (See also By-Laws, 223, 227, 229.)

Voluntary Dissolution, 60, 61; Statutes, 392-397. (See also Dissolution.)

Forms, 307-315.

Voting, 98, 99, 111-117, 119, 130, 299, 300; Statutes, 369-372, (See also

Election.)
Challenges, 113, 116, 117, 299; Statutes, 371.
Cumulative, 114, 115; Statutes, 370.

Identification for, 111, 112, 116, 117, 119, 300; Statutes, 369, 370,

372.
GENERAL INDEX. SII

[References are to pages.]

Voting.— Continued.
Oath, when Challenged, 113, 117, 119, 299, 300; Statutes, 371.
Forms, 298-300.
Preferred Stock, 81, 112.
Proxies, 112, 113, 130, 233, 244-246; Statutes, 370, 371.
Forms, 233, 244-246.
Restrictions on, 112; Statutes, 369, 370.
Right to Vote, 98, 99, 111, 112, 116, 117; Statutes, 369-372.
Books, Evidence of, 111, 112, 116, 117; Statutes, 369, 370,
372.
Sale of Vote Prohibited, 109, 113; Statutes, 370; Pen. Law, 471.
Voting Trusts, 105, 315-317; Statutes, 370, 371.
Forms, 315-317.

Ww.

Wages and Laborers, 101; Statutes, 436, 440, 473, 474; Pen. Law, 472.

Waiver of Notice, 47, 48, 51, 72, 107, 108, 234, 235, 254; Statutes, 375, 376.
Forms, 234, 235, 254.

Water Companies, Statutes, 358.
SUPPLEMENT
, TO

HARRISON'S
NEW YORK CORPORATIONS

cofrAINING
od

The Legislative Enactments of 1910 and 1911 Relating to
Business Corporations and ‘All Important Judicial
Decisions Affecting Business Corporations,
from June 1, Igo09, to, October
15, IQri.

el

NEW YORK
THE RONALD PRESS COMPANY
Igt1
CopyriGcHT 1911
2 By .

THE RONALD PRESS COMPANY’
STATUTORY AMENDMENTS AFFECTING CORPO-
RATIONS 1g10-1911.

THE GENERAL CORPORATION LAW.

2 i

§ 6. Corporate names, 1. No certificate of incorporation ofa
proposed corporation having the same name as a corporation author-
ized to do business under the laws. of this state, or a name ‘so nearly
eresembling it as to be calculated to deceive, shall be filed or recorded
in any office for the purpose of effecting its incorporation, or of au-
thorizing it to do business in this state; [nor shall’ any corporation
except a religious, charitable or benevolent corporation be atithor-
ized to do business in this state unless its name has such word or
words, abbreviation, affix or prefix therein or thereto, as will clearly
indicate that it is a corporation as distinguished from a natural per-

son, firm or co-partnership, or unless such corporation uses with its’

corporate name, in this state such an affix or prefix]. A corporation
formed by the reincorporation, reorganization or consolidation of
other corporations,or upon the sale of the property or franchises of
a corporation, may have the same name as the corporation or ‘one
of the corporations to whose franchises it. has succeeded. No cor-
poration shall be hereafter’ organized under the laws of this state,
with the word “trust,” “bank,” “banking,” “insurance,” “ assur-
ance,” “indemnity,” “ guarantee,” “guaranty,” “title,” “ savings,”
“investment,” “loan,” or “benefit” as part of its name, except.a cor-
poration formed’ under the banking law or the insurance law.

[As amended by Laws r1g11, Ch. 638. In effect Jan.-1, 1912.
New matter in brackets. ]

§ 12. Enlargement of limitations upon the amount of the prop-
erty of nonstock corporations. If any general or special law_here-
tofore passed, or ‘any certificate: of incorporation, shall limit the
amount of property a corporation other than: a ‘stock corporation
may take or hold, such corporation may take and hold property of
the value of ten million dollars or less, or the yearly income. derived
from which shall be one million dollars or less, notwithstanding any

such limitations. In computing the value’ of:such property, no in-

crease in value arising otherwise than from improvements made
thereon shall be taken into account.

_ [As‘amended by. Laws rg11, Ch: 581. In effect June 30, 1911.
Formerly limited to property amounting to $6,000,000 or income of
$600,000. ]

§ 20., Acquisition of real property in this state by certain for-
eign corporations. Any foreign. corporation [doing busitiess in this
state and] created under the laws of the United States, or of any
state or territory thereof, [or of any foreign state or nation which

-porders the United States of America ‘and which by its laws confers

_ I. ' \
! —_
2 ‘ NEW YORK CORPORATIONS.

similar privileges on corporations- created ‘by the laws of the state of
New York,] may acquire [and hold] such real property in this state
as may be necessary for: its corporate purposes in the transaction of
its business in this state, and c nvey the same by deed or otherwise
in the same manner asa domestic corporation. ’

[As amended by L. 1910, Ch, = In effect April 5 1910.
Changed. or new matter in _brackets.] : Sch ye Sat baw

§ 22. Prohibition of banking seuss .[No corporation, domes,

tic or foreign, other than a ‘corporation formed under or subject to

the banking laws of this state or of the United States, except as per--

mitted by such laws,] shall by any implication or construction be
deemed to.possess the power of carrying-on the business of dis-
counting bills, notes or other evidences of debt, of receiving deposits,
[of] buying and selling bills of exchange, or [of issuing] bills, notes
or other evidences of debt for circulation as money, [or of engaging
in any other form of banking; nor shall any such corporation, except
an express company having contracts with railroad companies’ for
the operation of an express service upon the lines of such railroad
companies, or a transatlantic steamship company, or a telegraph
company, or'a corporation incorporated prior to the year eighteen
hundred and fifty, to promote the welfare of emigrants, possess the
power of receiving money. for transmission, or of transmitting the
same, by draft, traveler’s check, money order: or otherwise. ]:

[As amended by: L. ror1, Ch. 771. In RE Eat July 2a. ee ‘New
or changed matter in brackets.] , :

§ 38. Revival of corporate existence. “If tha’ tera of existence
of any domestic corporation shall have expired and. it shall be: made
satisfactorily | to appear to the supreme court that. such corporation
was legally organized pursuant to any law of this state, and-that it
shall have issued its bonds payable at a date beyond | the. date fixed
in its charter or certificate of incorporation for the expiration of its
corporate existence, and such .bonds shall be unmatured and, unpaid,
for, if a bank, incorporated ,under a general law of this state, that

shall have issued any other obligations or.shall have incurred any.
other. indebtedness which at the date of the application shall be un-.

satisfied or unpaid,] the supreme court may, upon the application of
any person interested and upon such notice to such other parties as

the court may. require, by. order; authorize the filing. and recording .

of a. certificate reviving the existence of such corporation;.upon such:

conditions and with such limitations as such order shall specify, and
extending such corporate existence for a term not exceeding. the
term for which it :was .originally incorporated. Upon filing and
recording. stich certificate in. the same manner as certificates of exten-
sion of corporate existence. duly issued before the expiration iof the
existence of a domestic corporation are authorized by law to be filed

and recorded, stich corporateexistence shall be revived and extended ;

in purstfince of the terms of such order, but such revival and exten-
sion shall not affect any litigation commenced after such expiration
and pending at the time of such revival. a ies

[As amended by L. rorz, Ch: 63. In effect April 5, I9t1.. New
matter in brackets.] . o

‘§ 60. ’ Petition by Werte te ‘change name. A. aaenige “to” as-
sume another corporate name maybe made by a domestic corpora:
tion, whether incorporated by a general or special law, to the ‘supremé
ourt at a special term thereof, held in the judicial district in which
its principal business office shall be situated, or, if it be other than a
bo te

ra mae

% ae oR
“

AMENDMENTS—GENERAL ‘CORPORATION LAW.. (3

stock corporation, ata special term held in the judicial district in
which its certificate of incorporation is filed, or recorded, or in which
its principal property is situated, or in which its principal operations
are or theretofore have been conducted. If it be a banking, insur-
ance or railroad corporation; the petition must be authorized by a

resolution of the directors of the corporation, and approved, if a

banking corporation, by. the superintendent of banks; if an insurance
corporation, [ ] by the superintendent of insurance, and if a railroad

corporation, by the’ public service commission. The ‘petition to:

change the name of any other corporation must have annexed thereto
a certificate of the Secretary of state, that the name which such cor-
poration proposes to assume is not the name of any other domesti¢
corporation or a name which he deems so nearly. resembling it, as.to
be calculated to deceive. - ‘

_ [As amended by L.,r9fo0, Ch. 296. In effect May 14, 1910: Omis-
sions indicated by brackets.]. ay

§.62. Notice of presentation of petition. If.the petition be made
by a corporation located elsewhere than in the city and'county of
New York, notice of the presentation thereof shall be published once
in each week for three successive weeks'.in a newspaper of every
-county in which such corporation shall have a business office, or if it
has'no business office, of. the county in which its principal corporate
property is situated, or in which its operations are or theretofore have
been principally conducted, which newspaper, if it be a banking cor-
poration, shall be designated by the superintendent-of banks, if an

insurance corporation, [ ] by the superintendent of * insuranance, or

if a railroad corporation, by the public service commission. In the
‘city and county of New. York such notice’shall be published once in
each week for three successive weeks in two daily newspapers pub-
lished in such county. [If the petition be made by a domestic corpo-

_ ration organized under or subject to the religious or membership
. corporations law the court may dispense with the publication of the

notice of the presentation of such petition or require notice. of such
presentation to be given to such persons’ and in such manner as. the
‘court thinks proper.]’ A copy of the petition and notice of ‘motion
shall be filed with the secretary. of state, and the proposed name shall

thereupon be reserved’ for said corporation until three weeks after

the date of ‘such motion, and until three. weeks after the date of any
adjournment of such motion if notice of such adjournment shall be
filed with the.secretary of state, and no certificate of incorporation
of a proposed corporation, having the same name as the name pro-
posed in.such petition, or a name so neafly resembling’ it as to be
calculated to. deceive, shall be filed in any office for the purpose of
effecting its incorporation, and no ‘corporation. formed without the
state of, New York having the same name or a name so nearly resem-
‘pling it as to be calculated to deceive shall be given authority to do
business in this state. ‘ 2 : ey

, [As amended by L. 1910, Ch. 296. In effect May 14,-1910. Brack-
ets indicate omissions, changes, or new matter. ]

§ 63. Order authorizing change. If the court to, which the peti-
tion is presented is satisfied thereby, or by the affidavit and certificate
presented therewith, that the petition is true, and that there is no

+++. peasonable objection to the change of name proposed and that the pe-

tition has been duly authorized and that notice of the presentation of

‘thé petition, if required by law, has been made, the court shall make

t
* So.in original. ‘

»

Hs
4 NEW YORK CORPORATIONS.

aS

an order authorizing the, petitioner to assume the name proposed on
a day specified therein, not less than thirty days after the entry of the
order. The order shall be directed to be entered and the papers on
-which it was granted to be. filed within ten days thereafter in the office
of the clerk of the county in which its certificate of incorporation, if .
any, shall be filed, or if there be none filed, in which its principal
office shall be located, or if it has no*business office in the county in
which its principal property is situated, or in which its operations
are or theretofore have, been principally conducted, or in the office
of the clerk of the county in which the special term granting the
order is held; and that a certified copy of such order shall, within ten
‘days after-the entry thereof, be filed in the office of the secretary of
state; and also, if it be a banking corporation, in the office of the su-.
perintendent of banks, or if it be an insurance corporation [ ]-in
the office of the superintendent of insurance, or if it be a railroad
corporation, in the offices of the public service commissions. Such
order shall also direct the publication, within ten days after the entry
thereof, of a copy thereof, in a designated newspaper, in the county.
in which the order is directed to be entered, once ini each week for
four successive weeks. [The court may dispense with the publica-
tion of a copy of such order -and require notice to be given to such
persons and in such manner as it thinks proper if the petition be*
made by a domestic corporation under or subject to the religious
or membership corporations law.] ; . aa

[As amended by L. rgo1o0, Ch. 296. In effect May 14, 1910. Brack-.
ets indicate omissions, changes, or new matter.] :

.

AMENDMENTS TO THE GENERAL CORPORATION LAW—
\ 1g09.* ;

(Chapter 240, Laws of 1909.)

a ean taay c t

§ 106. Permanent receiver. A receiver appointed by or pursuant
to a final judgment in the action, or a temporary receiver who is con-
tinued by the final judgment, is a permanent receiver, and has all the
powers and, authority conferred, and is eubiee: tq all ,the duties and
liabilities imposed upon a receiver [ .] in article eleven of this
chapter. , 23

[As amended by L. 1909, Ch. 240. Brackets show where matter
was dropped, ] , :

§ 155. Notice to creditors by receiver. [1. Within thirty days
after a receiver qualifies he shall cause to be published once a week:
for twelve weeks in a newspaper published at ‘the principal. place of
business of the corporation, a notice to all creditors of the corpora-
tion to present their claims to such receiver at his place of business
within fiffeen days after the last publication of such order. He shall
also mail’a copy 'of such notice to all the creditors of the corporation .
known to him or as shown on the books of the company, at their last
known place of residence,’ 2. The receiver of any title guaranty
company heretofore or hereafter appointed, which company is] au-
thorized by law to issue policies of insurance or agreements of in-
demnity or guaranty, and which corporation has issued and outstand-
ing at the time, of ‘the appointment of the receiver,. policies’ of ‘insur-

* Received too late to include in the 1909 edition of Harrison’s New Ydérk

Corporations.
t

:
: !
f y

i ) AMENDMENTS—GENERAL CORPORATION LAW. , 5

1

ance or agreements of indemnity or guaranty, exceeding two thou-
sand in number, shall not be required to mail to the holders or own-
ers of said policies of insurance or of said agreements, the notice re-
quired by.law to be given to creditors of an insolvent moneyed cor-
poration; but such receiver shall cause a notice to be published twice
a week, for four successive weeks, in two newspapers’ published in
the county where said corporation has its principal place of business;
which said notice shall require all creditors and owners and holders
of outstanding policies of insurance or agreements of indemnity or
guaranty, to exhibit and prove their claim, within sixty days; and, in
- default of so doing, shall be precluded from all benefit of the judg-
ment and from any and all distribution which may be made there-
under, except that the creditor or holder or owner of any policy or
‘agreement of indemnity or guaranty, who shall exhibit or prove his
claim, with an affidavit that he had no notice or knowledge thereof,
in time to comply with the provisions hereof, at any time before an
order is made directing a final settlement and distribution of assets
of such corporation, shall be entitled to have his claim received, and
shall have the same rights and benefits thereon, so far as the assets
of such corporation then remaining undistributed may be applied, -
as if his claim had been exhibited and proved within the time limited
by such notice. [This subdivision shall,apply to receivers of all mon-
eyed corporations. ] an

[As amended by L. 1909, Ch. 240. New or amended matter en-
closed in brackets.] i .

,

§ 158. Notice of account and accounting by receiver. 1. The
receiver shall-file his account, together with a statement of the items
and amounts claimed by his counsel, up to that date with the court
and a duplicate thereof, together with the vouchers, with the attor-
ney-general, at least thirty days before time fixed for his final settle-
ment and accounting, and the attorney-general shall serve upon the
attorney for the receiver any objections he may have to the account,
or to the statement ds to the items and amounts claimed by counsel
for compensation, appearing in such account on or before such hear-
ing. [The receiver shall also within ten days after the filing of the
account, mail to each creditor of the corporation a notice of the time.
and place of the filing of his account, and a notice of the time and
place of the presentation of the account to the court. Unless objec-
tion is made to the items of the account by a creditor or on behalf of
the attorney-general, no referee shall be appointed to pass thereon,
but the same shall be examined and settled by the court. In case
objection is made a referee may be appointed to take the testimony
and report the same to the court.] — .

2. Prior to the final settlement of accounts of a receiver of any
moneyed corporation, having in force, at the time of his appointment,
outstanding policies of insurance or agreements of indemnity or guar-
anty, exceeding two thousand in number, said receiver shall. give
notice to all of the creditors and to the owners or holders of said
policies of insurance or agreements of indemnity or guaranty, issued
or entered into by such insolvent corporation, by publication of a
notice published at least twice a week, for three successive weeks,
immediately preceding the making of an application for a final settle-
ment of his accounts and for an order for the distribution of the
assets in his hands. Said-notice shall state the fact that an applica-
tion for a final settlement of his accounts and for an order for the
distribution of the assets in hand will be made, and shal! also state

\

\ 1
‘

6 NEW YORK CORPORATIONS.

\

the time and place, when and where the application will be made.
Upon the hearing of such application and motion, the court shall, un-
less objection is madé to the items of the account by a creditor or by
a holder or owner of a policy of insuraice or agreement of indemnity
or guaranty,*or on behalf of the attorney-general, examine and settle
the said accounts, and make an order for the settlement, adjustment
and distribution of the assets in the hands of the receiver. Where ©
objection is made to the items of aecount, the court may refer the
same to a referee to examine and pass thereon. [This subdivision
shall apply to receivers of all moneyed corporations heretofore or
hereafter appointed.]

[As amended by L. 1909, Ch. 240. New or, amended matter en-
closed in brackets. ]

§ 160. | Claims barred after distribution of . assets -by receiver.
Upon the granting of the application and the making of the order of
distribution, [as provided in subdivision two of section one hundred
and fifty- eight of this article,] and the distribution of the assets in
the hands of the receiver, in. the manner directed by the order of the
court, all claims of the creditors or of holders or owners of. policies
of insurance or agreements of indemnity or guaranty, against such
receiver, shall be barred. This section shall apply to [receivers of
all] moneyed corporations.

[As amended by L. 1909, Ch. 240. New or amended matter en-
closed in brackets. ]'

§ 174. Contents of petition. The petition must show that the
case is one of those specified in sections one hundred and seventy
[and one hundred and seventy-two] of this chapter, and must state
the reasons, which induce the petitioner or petitioners to desire the
dissolution of the corporation. A schedule must be annexed to the
petition, containing the following matters, as far as the petitioner or
petitioners know; or have the means of knowing the same:

1. A full and'true account of all creditors of the corporation,
and of all unsatisfied engagements, entered into by, ‘and subsisting
against, the corporation,

2. A statement of the name and place of residence of each cred-
itor, and of each person with-whom such an engagement was made,
and to whom it'is to be performed,,if known; or," if either is not
known, a statement of that fact.

. 3. A statement of the sum owing to ear creditor, or other per-
son specified incthe last subdivision, and the nature of each debt, de-
mand, or other engagement.

4. A statement of the true cause and consideration of the in-
debtedness to each creditor.

5. A full, just, and true inventory of all the property of the
corporation, and of all the books, vouchers, and securities, relating
thereto. .

6. A Statement of each incumbrance upon the property of the
corporation, by judgment, mortgage, pledge, or otherwise.

7. A full, just, and true account of the capital stock of the cor-

._ poration, specifying the name of each stockholder; his residence, if
it is known, or if it is not known, stating that fact; the number of
shares belonging to him; the amoant paid. in upon his shares; and
the amount still due thereupon.

[As amended L. 1909, Ch. 240. Amended matter enclosed in
brackets. ] ‘

§ 178. Action. ig court upon petition for dissolution. In a case
AMENDMENTS—GENERAL CORPORATION LAW. 7

specified in sections one hundred and seventy-one [and one hundred
and seventy-two] of this chapter the court may, in its discretion, en-
tertain or dismiss the aplication. Where it entertains the application,
or where the cause is one of those specified in section one hundred
and seventy of this chapter, the court must make an order, requiring
all persons interested in the corporation to show cause before it, or
before a referee designated in the ordér, at a time and place therein
specified, not less than six weeks after the granting of the order, why
the corporation should not be dissolved. : Te

[As amended by L. 1909, Ch. 240. Amended matter enclosed in
brackets. ] ,

' 3

§ 191. Permanent receiver. Upon an application for a final
order, if it appear to the court in a case specified in section one hun-
dred and seventy of this chapter that the corporation is insolvent, or,
in a case specified either in that section, or in section ‘one hundred
and seventy-one [and one.hundred and seventy-two] of this chapter
that for any reason a dissolution of the corporation will be beneficial
to the interests of the stockholders and not injurious to the public
interests, the court must make a final order. dissolving the corpora-
tion,’ and appointing one or more receivers of its property. But in
the case of a solvent corporation, the court may, if there is no objec-
tion by creditors, dispense with a receiver and provide in the final
-order for the distribution of the assets. Upon the entry .of the
order’ the corporation is dissolved.. A receiver appointed*under this
section shall have all the powers, duties and liabilities of réceivers
under article eleven of this chapter. : \

[As amended by L. 1909, Ch. 240, Amended matter enclosed in
brackets. ] i 5

\

ARTICLE 10-A.

PROVISIONS APPLICABLE TO TEMPORARY AND PER-
‘MANENT RECEIVERS OF CORPORATIONS.

Section 225. Security.
226. Removal or new bond.
227. Notice to sureties upon, accounting.

§ 225. Security. A receiver, appointed in an action or special
proceeding, must, before entering upon his duties, execute and file
with the proper clerk, a bond to the people, with at least two suffi-
cient sureties, in a penalty fixed by the court, judge, or referee, mak-
ing the appointment, conditioned for the faithful discharge of his du-
ties as receiver; and the execution of any such bond by any fidelity
or surety company authorized by the laws of this state to transact
business, shall be equivalent to the execution of said bond by two
sureties. But this section does not apply to a case where special
provision is madé by law for the security to be given by a receiver or
for increasing the same.

“§ 226, Removal or new bond. The court, or, where«the order
was made out of court, the judge making the order, by or pursuant to
which the receiver was appointed, or his successor in office, may, at

- any. time, remove the receiver, or direct him to give a new bond, with
new sureties, with the like condition specified in the last section. But
‘this section does not apply to a case where special provision is made
by law for the security to be given by a receiver, or for increasing
the same, or for removing a receiver.
8. --NEW YORK CORPORATIONS.

-§ 227... Notice to aureiics upon accounting. A receiver who,
having executed and filed a bond as provided for in section two hun-
dred and twenty-five or. section two hundred and twenty-six of this:
chapter, before presenting his accounts as receiver, must give notice
to the-surety or sureties on his official bond, of his intention to pre-
sent his accounts, not less than eight days before the day set for the
hearing on said accounting. The same notice must be given to such
surety or sureties where the accounting is ordered on the petition of
a person or persons other than the receiver, and in no case shall the
receiver’s accounts be passed, settled or allowed, unless the said no-
tice provided for in this séction shall have first been given to the
surety or sureties on the official bond of such receiver,

[the foregoing article added by'L.'1909, Ch. 240.)

‘g' 232., Receiver’s title to property.. Such receivers shall be
vested with .all the property, real and personal, of the corporation,
from the time of their having filed the security [required by law.]
: amended by L. 1909, Chy agp. New matter es in brack-—
* ets,

§ 269. Notice of final accounting. Preqiods ‘to rendering such
account the receivers shall insert a notice of their intention to present
the same, once in each week, for three weeks, in a newspaper, of the
county in. which notices’ of dividends are herein, required to be in-
serted; specifying | the time and place. at which such account will be
rendered. [Said*receivers shall also give notice to the sureties on
their official bonds, as provided in section two hundred and twenty-:
seven of this ghenter,)

‘aie amended by L. 1909, Ch. 240. " New matter encladd’t in -brack-
ets. ,

‘
tion owning such

THE STOCK CORPORATION LAW.

§ 10. Contents of plan or agreement. At or previous to the sale
the purchasers thereat, or the persons for whom the purchase is to
be made, may enter into a plan or agreement, for or in anticipation
of the readjustment of the respective interests therein of any cred-
itors, mortgagees, [ ] stockholders, or any of them, of the corpora-

property and franchises at the time of sale, [and of
holders of claims for materials, supplies and equipment furnished,
and.for injuries and damages sustained, in and about the operation,

maintenance or construction of any or all the property formerly’

owned or leased to said’ corporation,] and for the representation of
such interests in the bonds‘or stock of the new corporation to be
formed, and may therein regulate voting by thé holders of the pre-

. ferred and common stock at any meeting of the stockholders, and

?

may provide'for, and regulate voting by. the holders, and owners of

~ any or all of the bonds of the corporation, foreclosed, or of the bonds

issued or to be issued by the new corporation; and such right of
voting by bondholders shall be exercised in such manner, for such
period; and upon ‘such conditions,,as shall be therein described.

Such plan or agreement must not be inconsistent with the laws of.

the state and shall be binding upon the corporation, until changed ds
therein provided, or as otherwise provided ‘by law. The new corpo-
ration when duly organized, pursuant’ to such plan or agreement and
to the provisions of law, may issue its bonds and stock in conformity
with the provisions of such plan or agreement, and may at any time
within six months after its organization, compromise, settle or as-
sume the payment of any debt, claim or liability of the former cor-
poration [or any claims for materials, supplies and equipment, fur-
nished, or any claims for injuries and damages sustained, in and
about the operation, maintenance or construction of any or al} the
property formerly owned or leased to said corporation,] upon such

terms ‘4s may be lawfully approved by a majority of the agents or |

trustees intrusted with the carrying out of the plan or agreement of
reorganization, and may establish preferences in favor of any portion
of its capital stock and may divide its stock into classes; but the capi-
tal stock of the new corporation shall not exceed in, the aggregate
the maximum amount of stock mentioned in the certificate of incor-
poration. : : :

_[As amended by L. rorz, Ch. 858. In effect July 29, 1911. New
matter in brackets. ] I

1 s
THE TAX LAW.

 

'§ 180. Organization tax. Every stock corporation ineorpoeaeed
under any law of this state shall pay to’ the state treasurer a tax of
one-twentieth of one per centum upon the amount of capital: stock
which the corporation is authorized to have, and a like tax upon any
subsequent increase. Provided, that in no case shall such tax be less
than [five dollars.] Such tax shall be due and payable upon the in-
corporation of such corporation or upon the increase of its capital
stock. Except in the case of a railroad corporation neither. the sec-
retaty of state nor county clerk shall file any certificate of incorpo-
ratio or article of association, or give. any certificate to any such cor-
poration or association until he is furnishéd a receipt for such tax
from the state treasurer, and’ no stock corporation shall have OF ex-
ercise any. corporate franchise or powers, or. carry on. business in this
state until such tax shall have been paid. - And in case of a decrease
of capital stock, upon which the tax required by law. has been. paid,
and, a subsequent increase thereof, a tax shall be paid. only upon so
much of such increase as exceeds the amount of, capital stock upon
which a tax has been before ‘paid. In case of the consolidation of
existing corporations into a corporation, such new corporation shall
be required to pay the tax hereinbefore provided for only upon the
amount of its capital stock in excess of the aggregate amount of
capital stock of said corporations. This section shall not apply to
state, and national banks or to building, mutual loan, accumulating

fund and coéperative’ associations. A railroad corporation need not:

pay stich tax at the time of filing its certificate of incorporation, but
shall pay the same before the public service commission shall grant
a certificate, as required by the railroad law, authorizing, the con-
struction of the road as proposed in its articles of. association, and
such certificate shall not be granted by the public service commission
until it is furnished with a receipt for such tax from the state treas-
urer. [If the board of railroad commissioners or public service com-
mission shall have heretofore granted, ot the public service commis-
sion: shall hereafter grant, such certificate and, upon an appeal from
the determination of such board of railroad commissioners or public
service commission, such certificate has been or may .hereafter be
denied thé comptroller shall refund the-amount of tax so paid to the
railroad corporation or corporations by which such tax was paid,

upon proof of payment being presented and appropriation being made

therefor. ]

[As amegded by L. 1911, Ch. or. In effect April 29, 1911. This
section was also'amended by 'L. IQIO, Ch. 472. The changes in this
section affect the tables of fees as printed on pages 335 and 338 of the
text. Changed or new matter in brackets.]

§ 181. License tax on foreign corporations.. Every foreign cor-
poration, excépt banking corporations, fire, marine, casualty and life
insurance companies, co-operative fraternal insurance companies, and
building and loan associations, authorized ‘to do business under the
general corporation law, shall pay to the state treasurer, for the use

10

, ‘
* yo *
. z |

AMENDMENTS—THE TAX LAW. " “IL

of the state, a license fee of one-eighth of one per centum for the
privilege of exercising its corporate franchises or carrying on its
business in such corporate or organized capacity: in this state, to be
computed upon the basis of the capital stock: employed by it within
this state, during the first year of carrying on its business: in this
state; and if any year thereafter any such corporation shall employ
an increased amount of its capital ‘stock within this state, the same
license fee shall be due and-payable upon any such increase. The
measure of the amount of capital stock employed in this state shall
be such a portion of the issued capital stock as. the gross assets em-
ployed in any business within this state bear to the gross assets wher-
ever employed in business. For purposes of taxation, the capital of
a corporation invested in the stock of another corporation shall be
deemed to be assets located where the physical property represented
by such stock is located. The amount of capital upon which such
taxes shall be paid shall be fixed by the comptroller, who shall have
the same authority to examine the books and records in this state of
such foreign corporations, and the employees thereof, and the same
power to issue his warrarit for the collection of such taxes, as he now
has with regard to domestic corporations. No action shall be main-
tained or recovery had in any of the courts in this state by such for-
eign corporation [after thirteen months from the time of beginning
stich business within the state, without obtaining a receipt from the
comptroller for the: payment of the license fee upon the capital stock
employed by it -within'this state during the first year of carrying on
its business in ‘this state.] : os ;

[As amended by L. roto, Ch. 340. .In‘effect May 21, 1910. Mat-
ter in brackets substituted for former clause on same stbject.]

§ 270. Amount of tax. There is. hereby imposed and there shall
immediately accrue and be-collected a tax, as herein provided, on all
sales, or agreements to Sell, or memoranda of sales [of stock,. and.
upon any and all] deliveries or transfers of shares or certificates of
stock, in any. domestic or foreign association, company or corpora-
tion, made after the first day of June, nineteen hundred and five,
whether made upon or shown by the books of the association, com-
pany or corporation, or by, any assignment in blank, or by any de-
livery, or by any paper or agreement or memorandum or. other evi--
dence of [sale or transfer, whether intermediate or final, and whether
investing the holder with.the beneficial interest in or legal title to
said stock or merely with the possession or use thereof for any pur-
pose,]'or to secure the future payment of money, or the future trans-
fer of any stock, on each [_ ] ‘hundred dollars of face value or frac-
tion thereof, two cents. It is not intended by this [act] to impose a
tax upon an agreement evidencing the deposit of. stock. certificates
as collateral: security for money loaned thereon,. which stock certifi-
cates are not actually sold, nor upon such stock certificates so-depos-

ited; [nor upon mere loans of ‘stock or the return thereof.] The

payment of such tax shall be denoted by an‘ adhesive stamp or.
stamps affixed as follows: In [the case of sale, or transfer,] where
the evidence of [the transaction] is shown only by the books of the
[association, company or corporation,] the stamp shall be placed
upon stich books; and where [the transaction’ is effected by the de-
livery or] tfansfer of a certificate the stamp shall be placed upon the
certificate; and ‘in cases of an agreement to sell, or where the [sale is
effected] by delivery of the certificate assigned in blank, there shall
be made and delivered, by the sellér to the buyer a bill, or memoran-
dum of such sale to’ which the stamp provided for by this article shall
I2°. ; : NEW YORK CORPORATIONS.
be affixed; and every bill.or memorandum of. sale or agreement to
sell before mentioned shall show the date thereof, the name of the
seller, the amount of the sale, and the matter or thing to which it re-—
fers, and no further tax'is hereby imposed upon the delivery of the
certificate of stock, or upon the actual:issue of a new certificate when
the original certificate of stock is accommpanied by the duly stamped
memorandum of sale. [' ] a ,

[As amended by L. rg11, Ch. 352. In effect June 15, 1911. This séc-
tion was also amended by L. rgro, Ch. 38, to conform to the decision
in the case of People ex rel Farrington vs. Mensching, 187 N. Y. 8.
See text, § 151 and page 456. Brackets indicate omissions, changes,
or new matter.]

8 zz1-a. Sale of stamps... No person, firm, company, association
or corporation other than a corporation organized under the banking
law of this state or under the national bank act of the United States,
or a duly authorized agent of the comptroller, shall sell or expose
for ‘sale any stamp issued pursuant to this article, without first ob-
taining from. the comptroller his. written consent, except that in con-
nection with a sale of 6r agreement to sell stock a: broker or agent
of the principal making such sale or agreement to sell may supply
and ‘affix the stamp, or stamps required by this article. No person”
shall sell any stamp for a sum. less than the face value thereof with-
out the written’ consent of the compttoller. Any person violating
any provision of this section shall be guilty of a misdemeanor. *

{As added by L. 1911, Ch. 12. In effect March 9, 1911.]

‘§.272. Penalty for failure to. pay tax. Any, person’ or persons
[liable to pay the tax by this article imposed, or any one’ who acts in
the matter as agent or broker for such person or persons,] who’shall
make any sale, transfer [or delivery] without paying the tax by this
article imposed; or;[any person] who shall.in pursuance of any sale,
[transfer,] or agreement, deliver any stock, or evidence of the sale
of [transfer of] or agreement.to sell any stock or bill or memoran-
dum thereof, [or who shall transfer or cause the same to be trans-
ferred upon the books or records of the:association, company or cor-
poration] without having the stamps provided for in this article af-
fixed thereto, shall be’ deemed guilty of a misdemeanor and upon
conviction thereof shall pay a fine of not less than five hundred nor ’
more than one thousand dollars, or be imprisoned for not more than
six months, or both such fine and imprisonment, in the discretion of
the court. ; : ; Pos “ e ‘

{As amended. by L. 1911, Ch. 352. In effect June 15, 1911. Mat-
ter in brackets new.] . Save

§ 273. .Canceling stamps; ,penalty for failure. In every case’
where an adhesive stamp shall be used, to denote the payment of the
[ ] tax provided by this article, the person using or affixing the
same shall vite or stamp thereupon the initials of his name and the
date upon which the same'shall be attached or used, and shall cut or:
perforate the stamp in a substantial. manner, so that such stamp can-
not be again used; and if any person [ ] makes use of an adhesive
stamp to denote [the payment. of] the [ ] tax imposed by this ar-
ticle, without $0 effectually canceling [the same,] such person shall
be deemed guilty of a misdeméanor, and upon conviction thereof
shall pay a fine of no less than two hundred nor more than five hun-
dred dollars or be imprisoned for not less than six months, or both,
in the discretion of the court. .

[As amended by L. 1911, Ch. 352. In effect June 15, rg11.

‘ 1
1

!

1
AMENDMENTS—-THE TAX LAW. 13

Amended by imposing penalty for use of canceled stamp without
reference to fraudulent intent. Brackets indicate changes, omissions,
or new matter.] : i

__ § 275. Illegal use of stamps; penalty. Any person who shall
willfully remove or alter or knowingly permit to be removed or
altered the canceling or defacing marks of any stamp provided for
by this article with intent to use such stamp, or who shall knowingly
or willfully buy, prepare for use, use, have in his possession or suffer
to be used any washed, restored or counterfeit stamp; and any person

, who shall intentionally remove or cause to be removed or knowingly
permit to be removed any stamp, affixed pursuant to the require-
ments of this article, except as hereinafter ptovided, shall be guilty.
of a misdemeanor and.on conviction thereof shall be liable to a fine
of not less than five hundred nor more than one thousand dollars, or
be imprisoned for not more than one year, or by both such fine and
imprisonment, at the discretion of the court. If any such stamp shall
be affixed to any memorandum of sale with the intention of paying
a tax, but delivery pursuant to such sale shall ngt be made in con-
formity with the memorandum thereof, then such stamp may be re-
moved from such memorandum and subsequently used on some other
memorandum of sale, provided that when so used there shall be at-
tached to the memorandum, to which said stamp shall be so affixed,
a written statement signed by the vendor, or the agent making such
sale, setting forth in detail the facts justifying such re-use. ;

[As amerided by L. 1911, Ch. 12. In effect March 9, 1911. ‘Ma-
terially amended.] "G

§ 276. Power of state comptroller. Every person or firm, a part

of whose regular or ordinary business is the making of sales, agree-

ments to sell, deliveries, or transfers, of shares or certificates of stock,
or conducting or transacting a brokerage business, and. évery com-
pany, association or corporation making a sale, agreement to sell,
delivery or transfer of shares or certificates of stock, or conducting

or transacting a brokerage business, shall keep or cause to be kept.

a just and true book of account, wherein shall be plainly and legibly
recorded the date of making every sale, ‘agreement to sell, delivery,
or transfer, of shares or certificates of stock, and every transaction
in relation to any stock, the number of shares, the total amount.cov-
ered by each such sale, agreement to sell, delivery, transfer or transac-
tion, arid the name of the other party thereto; and such book shall at
all times be subject to the inspection of the comptroller, or any of his
representatives, between the hours of ten o’clock in the forenoon and
three o’clock in the afternoon, except on Saturdays, Sundays and
legal holidays. The state comptroller may, at any time after sales
or transfers of stock which by the provisions of. this article are sub-
ject to a tax, inquire into and ascertain whether the tax thereby im-
posed has been paid. For the purpose of ascertaining such fact the
‘comptroller ghall have the right and it shall be his duty to examine
such book of account of any person, firm, company, association or
corporation required to keep the same, and the bills or memoranda
of sale or transfer of shares or certificates of stock; and ‘such bills
or memoranda of sale or transfer shall remain accessible for such ex;
amination for six months from their respective dates. Every asso-
ciation, company or’ corporation shall keep or cause to be kept a
transfer ledger, register or stock certificate book,, containing a com-
plete and true entry and record of.all sales or- transfers of shares or
certificates of its stock made upon its books. It shall also retain and

‘
14 NEW. YORK CORPORATIONS.

keep all surrendered or canceled shares or certificates of its stock and
all memoranda relating to the sale or transfer of any thereof; and
all. such transfer ledgers, registers or stock certificate books and sur-
rendered or cancelled shares or certificates of stock and. memoranda
relating to the sale or transfer of it's stock, shall at all times between
the ‘hours often o’clock in the forenoon and three o’clock in the
afternoon, except Saturdays, Sundays and legal holidays, be open to
examination by the’ comptroller. The state comptroller may enforce
his right to’examine such books of account and bills or memoranda
of sale’or transfer and such transfer ledger, register and stock cer-
tificate books and’ surrendered or canceled sharés or certificates of
stock by mandamus. If the comptroller ascertains that the tax pro-

vided for in this article has not been paid, he shall bring an action

in his name as such comptroller, in any court of competent jurisdic-
tion, for the recovery of such tax and for any penalty incurred by
any person under the provisions of this article. Every person, firm,
company, association or corporation who shall fail to keep such book
of account, or bills or memoranda of sale or transfer, or transfer
ledger, register or stock certificate book or surrendered or canceled
shares or certificates of stock as herein required, or who shall‘refuse
to permit the comptroller or any of his representatives to examine
any of said books, records or papers, at any time, as above provided,
or who shall in any other respect violate any of the provisions of
this section shall be deemed guilty of a misdemeanor and on con-
viction thereof shall for each and every such offense pay a.fine of not
less than five hundred dollars nor more than five thousand dollars,
or be imprisoned not less than three months nor more than two
years, or both, in the discretion of the court!

[As amended by L. rorz, Ch. 352. Jn effect June 15, 1911. This.
section was materially amended by L. 1910,.Ch. 453.]

. _§ 280. Refund of tax erroneously paid. If any stamp or stamps
shall have been. erroneously: affixed to’: any book, certificate of stock,
or bill or memorandum of sale, the comptroller may, upon presenta-
tion of a claim for the amount of such stamp ‘or stamps and upon
the production of evidence satisfactory to him that such stamp or
stamps was or were so erroneously ‘affixed as to cause loss to the
person or persons making such ‘claim, pay such amount, or-such part

. thereof as he may allow, to such claimant out of any moneys appro-
‘priated for that purpose. ‘Such claims shall be presented to the comp«

troller in writing, duly verified, and shall state the full name and ad-
dress of the claimant, the date of such ‘erroneous affixing, the face
value of ‘such stamp or stamps and shall describe the instrument to
which the stamp or stamps were affixed and contain such evidence as
may be available upon which the demand for such refund is based.
Such claims shall be presented within ninety days after such erro-
néous affixing unless such affixing shall have taken place prior to the
date on which this act shall take effect, in which case such claim
shall be presented within ninety days after the date on which this
act shall take effect: If the comptroller rejects a claim or any part
thereof, the claimant may file a claim for the recovery of, such sum
as the comptroller shall have refused to allow, with the court of:
claims, which shall constitute a private claim against the state and
shall be subject to all the provisions of law governing such claims;
except that all claims. so presented shall be filed with the court of
claims within ninety days from the date on which such claim shall be
rejected -by the comptroller. For the purposes of this section, the
comptroller’s decision shall be deemed to have been made at the time
sei a

1
AMENDMENTS—THE: TAX LAW. ce

of the depositing of a copy of such decision in the post office inclosed
in a duly: post-paid wrapper and directed to the person making such
claim at the address contained in the verified claim presented to the
comptroller as hereinbefore provided.

[Added by L. 1910, Ch. 186. In effect April 29, I910.]

Date of Assessment in New York City:

“The taxable status of all persons and property assessable for
taxation in the City of New York shall be fixed for each year on the
day of October in the preceding year provided by law for the, open-
ing of the books of annual record of the assessed valuation of real,
and personal estate of that year.’

a 892. Greater* New York Charter, as amended by L. 1911, Ch.
455. j

RULINGS OF THE STATE COMPTROLLER’S OFFICE
GOVERNING THE COLLECTION OF

TAXES ON TRANSFERS OF STOCK ;

‘

For the information of the public the following brief statement of the
more genera] rules and regulatioris governing the im-
position and collection of stock transfer taxes
prepared pursuant to the rulings made

by the Attorney-General, SN

1. The application and scope of the statute imposing. this tax
was considerably broadened by the amendment thereto, effected by
Chapter 352 of the Laws of 1911, with the result that the rulings here-
tofore made asserting exemptions from the fax are as a rule not con-
trolling. :

2. By the statute as amended, a tax is imposed upon all sales
or agreements to sell and upon all ‘deliveries or transfers of shares
or certificates of stock, of any and all associations, companies and
corporations, whether domestic or ‘foreign, at the rate of two cents
on each hundred dollars of face value or fraction thereof, .

3. The statute does not apply to the original issue of stock; but
all sales or transfers made subsequent- thereto, whether intermediate
or final, are taxable.

4. It is not necessary to render it taxable that the icaneneh ga
involve a sale. By the statute as amended, a tax is imposed upon all
sales or transfers of shares or certificates of stock, whether operating
to convey the beneficial interest in or merely the legal title to said
stock, or possession thereof for any purpose. The only exceptions
to this rule are those expressly provided for in section 270 of the law.

5. A transfer of voting trust certificates constitutes a transfer
of shares of stock within the meaning of the statute and is taxable,
as well as the transfer of stock from stockholders to voting trustees.

: ‘The mere surrender of a certificate of stock for re-issue in
smaller denomination is not taxable; but if re-issued in part to the
original owner and in part to a third party it is taxable to the extent
of the transfer to the third party.
16 NEW YORK CORPORATIONS.

‘ '

-7. Likewise the mere surrender of a certificate of stock held by
a deceased person for issuance in the name of his executor or admin-
istrator is not taxable; but all transfers made by. the latter, whether
to trustees, legatees or other persons, are taxable. ‘

8. The law applies to the stock of foreign as well as domestic.
corporations and to residents and nonresidents alike. .

9. While the law has no extra territorial operation, nevertheless,
where it appears that the transfer of the stock on the corporate books
within this State constitutes an essential step to render the transfer
effectual, it subjects it to a tax although in all other respects made
without the State., ;

to. Where the sale or transfer is shown only by the books of the
company the stamps must be placed upon such books, and where it is
effected by the delivery or transfer of a certificate the.stamp must be
placed upon the surrendered certificate. In, case of an agreement to
sell, or where the sale is effected by the delivery of the certificate
assigned in blank, there must be made and delivered by the seller to
the buyer a bill or memorandum of sich sale, to which the stamps
shall be affixed. This bill or. memorandum with stamp attached must
be affixed to the certificate when presented for transfer.

| Astrict compliance with these requirements will be insisted upon,

11.. Every such bill or memorandum of sale, agreement to sell or
sales ticket must show the date thereof, the name of the seller, the
amount of the sale and the matter or thing to which it refers, and all .
such memorandum of. sale or sales. ticket not used for the purpose of
transfer must be kept by the broker for six months from their re-
spective dates.

12. All persons liable for the payment of the tax and all persons
acting as agents or brokers for any such person, who in any manner.
assist in consummating a sale or transfer without paying the required
tax are guilty of a miSdemeanor ‘and Jiable to severe penalties. ;

13. ‘Likewise persons acting as transfer agents are forbidden by
the statute to transfer stock on the books of the company until the
required tax has been paid; and for a failure to perform this duty

‘they are guilty of a misdemeanor and liable to severe penalties.

14. Every stamp used to'denote the payment of the tax must be

cancelled by the user by writing or stamping thereon the initials of

his name and the date upon which the stamp is attached or used.
He must also cut or perforate the stamp in a substantial manner so
that it cannot again be used. A failure so to do renders the party
guilty of a misdemeanor and liable to severe penalties.

15. Every broker and every corporation making a’ sale of shares
or certificates of stock is required to keep a just and true book of
account setting forth the date of the sale or transfer, and every trans-
action relating thereto, including the number of shares involved, the
total amount covered thereby and the name of the party to whom the
sale or transfer is made. This book shall at all times between the’
hours of toga. m, and 3 p. m. (Saturday, Sunday and legal holidays
excepted) be subject to examination by the Comptroller or any of his
representatives. A failure to comply with these provisions will sub-
ject the offender to severe penalties.

16. Every company is required to keep a transfer register, ledger
or stock certificate book containing a full and true record. of all sales
or transfers of its stock. It is also required to retain and keep all
surrendered and cancelled shares or certificates of stock and all mem-_
oranda relating thereto, all of which are subject to examination by
the Comptroller or any of his representatives between the hours of:
>

AMENDMENTS—THE TAX LAW. WwW
ai

to a.m. and 3 p. m. (Saturdays, Sundays and légal holidays excepted).
A failure’ to comply with this provision will subject the offender to
severe penalties..

17. Severe penalties, civil and amine: are "provided by the act
for the illegal sale or use of stamps, for the ‘failure to pay the tax im-
posed and for violation of the other provisions thereof.

18. Furthermore, the failure to pay the tax constitutes an abso- :
lute defense to an ean: brought to recover the purchase price of
the stock.

WILLIAM SOHMER, Comptroller,

June 15, IQIt. State of New York,
CODE OF CIVIL PROCEDURE

*

§ 647. [ ] Interest in [shares or bonds.] The rights or shares
which the defendant has.in the stock of an association or corpora-
ion, [or ina bond negotiable or otherwise,] together ‘with, the inter-
est and profits thereon, may be levied upon; and the sheriff's certifi-
‘ate of the sale thereof entitles the purchaser to the same rights and
privileges, with respect thereto, which the defendant had when they
were so attached. ;

[As amended by L. 1911, Ch. 419. In effect Sept. I, IQII. Brack-
2ts indicate changes, omissions, or new matter.]

PENAL LAW.

§ 280. Corpérations [and voluntary associations] not to prac-
tice law. It shall be unlawful for any corporation [or voluntary asso-
ciation] to practice or appear as an attorney-at-law for any person
other than itself in any court, in this state or before any judicial
body, or to’ make it a business to practice as an attorney-at-law, for
any person other than itself, in any of.said courts or to hold itself
out to the public as being entitled to practice law, or to render or-
furnish legal services or advice, or to furnish attorneys or counsel
or to render legal services of' any kind in actions or proceedings of
any nature or in any other way or manner, or in any other manner
to assume to be entitled to practice law or to assume, use or adver-
tise the title of lawyer or attorney, attorney-at-law, or equivalent
terms in any language in such manner as to convey the impression
that it is entitled to practice law, or to furnish legal advice, services
or counsel, or to advertise that either alone or together with or by
or through any person, whether a duly and regularly admitted attor-
ney-at-law, or not, it has, owns, conducts or maintains a law office
or an office for the practice of law, or for furnishing legal advice,
services or counsel. It shall be unlawful further for any corporation
{or voluntary association] to solicit itself or by or through its offi-
cers, agents or employees any claim or demand for the purpose’ of
bringing an action thereon or of representing as attorney-at-law, or
for furnishing legal advice, services or counsel to a person sued or
about to be sued in any action or proceeding or against whom an
action or proceeding has been or is about to be brought, or who may
be affected bg any action or proceeding which has been or may be
instituted in any court or before any judicial body, or for the purpose
of so representing any person in the pursuit of any civil remedy.
Any corporation [or voluntary association] violating the provisions
of this section shall be liable to a fine of not more than five thousand
dollars, and every officer, trustee, directof, agent, or employee of such
corporation [or voluntary association], who diréctly or indirectly en-
gages in any of the acts herein prohibited or assists such corporation
{or voluntary association] to do such prohibited acts is guilty of a

: 18
i

* AMENDMENTS—PENAL LAW. ae

misdemeanor. The fact that such officer, trustee, director, ee or
employee: shall be a duly and regularly admitted attorney-attlaw,
shall not be held to’ permit or allow‘any such corporatién [or volun-
tary association] to do the acts prohibited herein nor shall such fact
be a defense upon the trial of any of the persons ‘mentioned. herein
for, ‘a violation of.the provisions of this section. This section shall
not apply to any corporation [or voluntary association] lawfully’ en-
gaged in a business authorized by the provisions of any existing
statute, nor to a corporation {or voluntary association] lawfully en-
gaged in the examination and insuring of titles to real property, nor
shall it prohibit a corporation [or voluntary association] from em-
ploying an attorney or attorneys in and about its own immediate
affairs or in any litigation to which it is or may be a party, nor shall
it apply to organizations organized for benevolent or charitable pur-

poses, or for the purpose of assisting persons without means in the

pursuit of any civil remedy; whose existence, jprepaizetion or incor-
poration may be approved by the appellate division of the supreme

court of the department in which the principal office of said corpora.

tion or voluntary association may be located.
[As amended by L. tg11, Ch. 317. In effect Sept. 1, 1911. Mat-
ter in brackets new.] '
DIGEST OF CASES AFFECTING CORPORATIONS
DECIDED JUNE 1, 1909, TO OCTOBER 15, 1911.

THE CORPORATION.

 

Corporation De Facto: ;

The mere execution of a certificate of incorporation. of a pro-.
posed corporation does not create a corporation de facto where no
attempt is made to file such certificate of incorporation in the state
and county offices as-required by the statute. Stevens v. Episcopal
Church History Co., 140 A.D. 570; cf. Perrine v. Levin, 68 Misc. 327.

Corporations Formed to Practice Law:

Irrespective of L. 1900, Ch. 483, and Penal Law, § 38 there is no
authority in New York State for the incorporation of a company to
practice law. The practice of law is not a “business” but a personal
right. Matter of Co-Operative Law Co., 198 N: Y. 479; affg. 136
A.D. 901. See also Matter of Associated Lawyers Co., 134 A.D. 359.

Promoters—Power to’ Bind Corporation:

The law is well settled that promoters can make no contract
which will bind the corporation after it comes into existence.’ The
corporation, however, when it comes into existence, may adopt the
‘acts of promoters by appropriate action of its directors or officers.
Bond v. Atlantic Terra Cotta Co., 137 A.D, 671.. See also Hollwedel
v. Auerbach Co., 67 Misc, 148. , eo 4
Corporations as Stockholders: (Text, pp. 65- 67.) :

A corporation which is a stockholder isin precisely the same po-
sition as an individual stockholder. The fact that one corporation
owns all of the capital stock of another does not make it ipso facto
liable for the latter’s contracts. N. Y. Air Brake Co. v. Interna-
tional S. P. Co., 64 Misc. 347; cf. Stone,v. Cleveland C. C. & St. L.!
Ry. Co., 202, N. Y. 352.

Right to Subscribe to New Stock: (Text, pp. 73. 90.)

The courts of New York go as far as possible in the protection
of a stockholder in his right to subscribe to a proportionate share
of ‘increased stock. Where, 'for'example, it was voted at a meeting
‘of stockhold@rs to increase the capital stock of a corporation and
shares were allotted to stockholders in proportion to their holdings
with the understanding that they must exercise their option by a cer-
tain date, it was’ held that a stockholder might demand his share
after the date set, provided sufficient shares remained unsold at the
Mee. of making the demand. Sommer v, Armour Gas & Oil Co., 71

isc. 211.

In case a ‘stockholder is fraudulently prevented from getting his
proportionate share he may sue for rescission of tlie increase. With-
Sree v. Bowles, 201 N. Y. 427. ?

20

*

é
, DIGEST OF CASES. 21

Liability :. (Text, b 101.)

Where an employee of a corporation has recovered judgment in .

a-court not’ of record, he need not file a transcript and exhaust his
remedy against it through execution against the corporate realty
before suing to enforce the claim against individual stockholders.
Padros v. Swarzenbach, 134 A.D. 811.

Ultra Vires: (Text, pp. 33, 34, 77:) °

Few'cases of ultra vires arise in connection with private corpora-
tions. In a recent case in which the doctrine was involved it was
held that it was not ultra vires for a water company to cut and sell’ ice
from its reservoirs. People ex rel Goff v, Kirk, 65 Misc. 657. .

Unless authorized by its charter, the accommodation indorse-
ment of a promissory. note by a corporation is ultra vires. Carlaftes
v. The Goldmeyer Co., 72 Misc. 75.

Corporate Name: (Text. pp. 31, 32, 75, 76.) °

Section, 6 of the General Corporation Law was not intended to
prevent the use of a corporate name similar to that of an existing
corporation where no confusion will result on account of dissimilar-
ity of business. ‘Corning Glass Works v. Corning Cut Glass Co., 197
N. Y. 173; affg. 126 A.D. 919. ;

Usury: (Text, p. 67.) B ;
Neither a corporation nor a stockholder can maintain an action

to set aside any of its obligations as usurious. Mac Quoid v. Queens
Estates, 143 A.D. 134. : } *

STOCKHOLDERS.

Nature of Relation to the Corporation: (Text, pp. 95-105.) ;

A stockholder cannot “resign.” The only way he can sever his
connection with the company is to dispose of his stock in a manner
authorized by law. A by-law which provides that a stockholder may
“resign and. get his money back by a surrender of his stock” is in-
valid. Picalora v. Gulf Co-Operative Co., 68 Misc., 331.

In an action in equity by a creditor seeking to recover on unpaid
stock for the benefit of all the creditors, plaintiff should. join all
stockholders who are liable, including the personal representatives
of any ‘who have died. Warth.v. Moore Blind Stitcher Co., 130 N. Y.
Supp. 748. ©

Consent to Mortgages: (Text, p. 67.) ‘

A chattel mortgage contained covenants to renew. The prop-
erty passed to a corporation subject to the mortgage. The renewal
in this case, when made, did not require consent of stockholders.
Black v. Ellis, 197 N. Y. 402; affg. 129 A. D. 140. '

As to defense by corporation of lack of statutory consent of
stockholders to execution of mortgage, see London Realty Co. v.
Coleman Stable Co., 140 A.D. 495.

Stockholders’ Actions: (Text, pp. 96-104.). ;

Pleading:—The complaint in the action of a stockholder suing
on behalf of the corporation should allege:

First—The cause of action in favor of the corporation which
should be stated in exactly the same manner and with the same de-
tail of facts as would be proper in case the corporation itself had
brought the action. .
1

22 NEW YORK CORPORATIONS.

Second—The ' facts which entitle the plaintiff to maintain the
action in place of the corporation, that he is a stockholder therein,
and that the corporation itself has either refused or unreasonably
failed to bring the action. , Ordinarily no other allegations are neces-
sary or material. “Kavanaugh v. Commonwealth Trust Co., 181 N. Y.
121; Kolt v. Mortimer, 135 A.D. 542; McCoy v. Gas Engine & Power.
Ca,, 135 A.D. 771.

The fact that one acquired stock subsequent to the wrong, com-
plained of, will not defeat his action. “It is conceded that the one
holding the stock when the fraud is consummated has the right.
When he transfers his certificate the transaction still stands a con-
tinuing wrong impairing the surplus of the company and affecting
the stock.” Pollitz v. Gould, 202 N. Y. 1. In this connection com-
pare Matter of Scheel, 134 A. D. 442.

Where there are two or more grounds for setting aside the ac-
tion of the corporate directors attacked, the fact that some of the
grounds would be available in an individual action does not make
their inclusion in the complaint improper. ‘Pollitz v. Wabash R. R.
Co., 142 A.D. 755.

Supplemental Pleading:

A stockholder suing to cancel a stock issue may, by supplemental
complaint, allege acts happening after the commencement of the ac-
tion and acts of which he had no knowledge when the action was
begun... Brewster v. Brewster Co., 138 A.D. 139. :

Personal and Derivative Actions:

Stockholders are entitled to subscribe for a proportionate share
of an increase of stock. Stokes v. Continental Trust Co., 186 N. Y.
285; Bond'v. Atlantic ‘Terra Cotta Co., 137 A. D. 671. But the fact
that they have been fraudulently deprived of the right does not give
the corporation a right of action and therefore a stockholder may
not sue on a derivative cause of action. Waters v. Waters Co., 201
N. Y. 184; affg. 130 A. D. 678.

Where. directors. fraudulently increase their salaries, a stock-
holder may sue on behalf of the corporation. Lawrence v. Weber,
65 Misc. 603: So, too, where the corporation has made a contract
whereby, incidentally, the contractor secured stock control, elected -
his own board of directors, and then failed to carry out the contract.
Callanan v. K, A.C. & L. C. R. R. Coy 199 N.-Y. 268; revsg. 131 A.D.
306. In such an action any work,done by the contractor after service
of the complaint is, done at his own risk. Callanan v. K. A. C. & L.
C. R. R. Co., supra.

Where: certain directors and stockholders fraudulently deprive a
stockholder of his stock and increase the capital stock so as to pre-
vent him from regaining his relative position as a stockholder in the
event of his recovery of his original stock, suit may be brought by
him as an individual against all concerned in the conspiracy for re-
covery of hi#®stock and cancellation of the increase. He need not
elect to sue upon his derivative cause of action. Witherbee v. Bowles,
201 N. Y. 427; revsg. 142. A.D. 407.

For jurisdiction of,a derivative action by a resident stockholder
of a foreign corporation, see Howe v. N. Y.. N. H. & H.R. R. Co,,
126 N. Y. Supp. 1090. ~

‘Stockholders’ Rights Upon Sale of Corporate Assets: (Text, p. 098.)

A lithographic concern voted to “sell the good will, assets and
property - of what is known as its: calendar department, the same
being and constituting a separately conducted department of its busi-
DIGEST OF CASES.

ness.” A dissenting stockholder is entitled to demand an apprais
of his stock under § 17 of the Stock Corporation Law. The rule
that sales of assets not made ‘in the ordinary: course of business cot
within the, meaning of the Stock Corporation Law provision. T
transaction involved in this case was corporate suicide pro tan
Matter of Timmis, 200 N. Y. 177; affg. 139 A.D. 936.

A stockholder who has accepted part of the benefits of the sz
cannot object to it subsequently. Treadwell v. United Verde Co
per. Co., 134 A.D. 304. -

\
’

INSPECTION OF BOOKS.
Stockholders’ Rights (Text, PP. 99, III, 140-142, 177.)

Stock Book: . es

_ The right of a stockholder to inspect the stock book is absolut
His motive in desiring inspection will not be inquired into by t!
court on application for a writ of mandamus to enforce his rigt
The Appellate Division held in the case of Henry v. Babcock & W
cox Co., 125 A.D. 538, that this right did not carry with it the inc
dental right to take memoranda during the inspection, and that
demand to see the stock book with permission to take a copy of tl
_whole or a part of the same was too broad to fall within the statut
-and that no penalty was incurred by refusal to permit inspectic
upon such a demand. The case was reversed on appeal (196 N. ©
302) and it may now be considered as settled law that the stoc
holder may examine the stock book and copy it irrespective of h
motives. Where, however, between the decision of the Appellate L
vision and the reversal by the Court of Appeals, in reliance upon tl
decision, a company refused to permit examination of its stock boc
for the purpose of taking extracts, no penalty was incurred becau
of the provisions of § 1961 of the Code of Civil Procedure. Holl
man v. El] Arco Mines Co., 137 A.D. 862. /

It has recently been held that a foreign corporation cannot e
cape the penalty for refusal to permit examination of its stock boc
by the plea that it did not keep such a book and therefore could n
show it. Hovey v. Proctor & Gamble Co., 139 A.D. 521. As to wh
‘is sufficient evidence of transaction of business within the state :
necessitate the keeping of a stock book by a foreign corporation, si
Hovey v. De Long Hook & Eye Co., 126 N. Y. Supp. 1.

One who is merely a sales agent of a foreign corporation is n
liable for failure.to exhibit a stock book on demand. It'is only
“transfer agent” who is charged with the duty. Hovey. v. Eiswal
139 A.D. 433.

General Account Books:

A stockholder’s right to examine the general books of accou
of the corporation is not absolute. Motive will be considered and il
spection refused by the court in an improper case. For example, a
inspection will not be permitted where it is desired by a stockhold
merely to Secure information for the benefit of a competing con
pany. People ex rel Lehman v. Consolidated Fire Alarm Co., 1

A.D. 753.
\
24 ' NEW YORK CORPORATIONS.
t

CAPITAL STOCK.

Issue of for Property: (Text, pp. 50, 52, 87, 88.) ‘| :
.£ Executory contracts for servites are not property for which
stock may legally be issued. Stevens v. Episcopal Church History

Co., 140 A.D. 570.

Transfer: (Text, pp. 44, 91-93, 99.)
Assignment without notice to the corporation will transfer title
as. between the parties involved in the transaction. Union Bank v.
‘U. S. Exch. Bank, 143 A.D. 128. ‘ ,
Where a corporation improperly refuses to record the transfer
on its books the remedy is by appropriate action, not by writ of man-
damus. People ex rel Rottenberg v. Utah Gold & Copper Co., 135
A. D. 418; cf. People ex rel Krohn v. Miller, 114 N. Y. 636.
: If defendant wishes to take advantage of § 278 of the Tax Law
he must specifically plead it. Bean v. Flint, 138 A.D. 846.

‘
2

'

DIRECTORS.

a

Nature of the Office: (Text, Ch. XI, p. 120.)
The relation of the directors to the stockholders is essentially
that of ‘trustee and cestui que trust. The peculiar relation that they
bear to the corporation arid the owners of its stock grows out of the
inability: of the corporation to act except through such managing
officers and'agents. The corporation is the owner of the property,
but the directors in the performance of their duties possess it and act
in every way as if they owned it. People ex rel Manice v. Powell,
201 N. Y. 194; affg. 140 A.D. 912. That directors are trustees in their
relations with the corporation: and its stockholders, jis thoroughly
settled law in, New York. In. addition to the decision of Manice v.
‘Powell, the doctrine has been restated in Davids v. Davids, 135 A.D.
206; cf. Dougherty, Co. v. Rice, 186 Fed. 204; American Circular Loom
Co. v. Wilson, 198 Mass. 182, 206. ~ ;
Thus where directors voted themselves. excessive salaries the
court held that they were in the position of trustees dealing with
themselves and restitution was ordered on complaint of a_ stock-
holder. It seems that the directors in such a case are not entitled to
receive,even the salaries which they enjoyed prior to the passage of
the objectionable. resolution. Davids v. Davids, 135 A.D. 206; cf.
Merrill v. United Box Board & Paper Co., 143 A.D. 833: ‘
It ‘is ig sg that.the courts will not interfere with the direc-
tors in the honest exercise of business discretion. For example, in
the absence of fraud, the directors will not be compelled to redeem
corporate property from mortgages, that being purely a question of
business expediency. Lefi v. Nachod, 64 Misc. 497, pos

Number: ‘(Text, p. 120.)

A’ provision in a certificate of incorporation that the number of
directors fixed by the certificate shall not be changed except by unan-
imous consent of stockholders is a-valid and binding limitation and
authorized by the provisions of § 10 of the General Corporation Law.
Ripin v. U. S. Woven Label Co., 71 Misc. 510. ;
DIGEST OF -CASES.

to

Loy

Removal: | (Text, p. 123.) 2

In. the absence of charter provision to the contrary, there is no
means of removing or suspending a director during his term of office
except by action brought by the. Attorney General. Quo warranto
and not mandamus is the proper remedy of a director who claims
that he has been illegally removed and whose place has been filled
by another. Manice’v. Powell, 201 N. Y. 194;. affg. 140 A.D, 912.

An action to set aside an election of directors on the ground of
fraud may not be maintained by one who became a stockholder sub-
sequent to the election; at least, not in a case where the one from
whom the stock was transferred would have had no right’ to bring
the action. Matter of Scheel, 134 A.D. 442.

Liability to Creditors: (Text, p, 128.) ° \
Directors are liable for declaring improper dividends. They

cannot defend by plea of ignorance as to the true financial condition
of the corporation at the time when the declaration was made. That

is something which the directors must ‘learn for themselves. They.

are not entitled to rely upon the statements of employees. In an
action to establish a director’s liability, the corporation, ledger is ad-
missible in evidence to show the financial condition at the date when
the dividend was declared. It is not admissible, however, to show
particular items unless the director sought to be charged is shown
to have had knowledge of the entries. ‘Wesp v. Murple, 136 A.D.
241; affd. 201 N. Y. 527; cf. Rudd v..Robinson, 126 N. Y.'113; Thayer
v. Schley, 137 A.D. 166, 172. Dividends may be legally declared, only
from surplus “profits. The fact that a dividend paid out of capital
did not impair the solvency of the corporation is no défense to an
action brought to enforce liability under. § 28 of the Stock Corpora-
tion Law. Cottrell v. Albany Card & Paper Mfg. Co,, 142 A.D. 148.
’ One seeking to enforce the liability created by § 66 of the Stock
Corporation Law must’ allege and prove loss ‘occasioned by the pref-
erence. Aquelli v. Shatzin, 68 Misc. 329. Intent to prefer a creditor
must be shown. Abrams v. Manhattan Consol. Brewing ‘Co., 142
A.D. 392. : Steal ;

For liability of directors for irregular dissolution without provid-
ing for the claims of creditors, see Darcy v. Brooklyn & N. Y. Ferry
Co., 196 N. Y. 99; affg. 127 A.D. 167; Tapley Co. v. Keller, 133 A.D. 54.

Where a director is sued for damages arising from the making
of a false report signed by him, the answer need not be verified. If
‘the allegation be proven, he would be guilty of a misdemeanor (Penal
Law, § 665), and is therefore not compelled to swear to his, plead-
‘ings. Thompson v. McLoughlin, 138, A.D. 711. /

In case of dissolution, the directors become trustees. Where,
however, a claim was unliquidated at the date of dissolution, it is nec-
essary to make the corporation a defendant. Its corporate existence
is expressly continued by statute for that purpose. It is an open ques-
tion whether the directors, as trustees, should be joined as defend-
ants in such an action. A complaint against the directors alone, how-
ever, will be dismissed. Cunningham v. Glauber, 133 A.D. to.

,

OFFICERS.

Authority of: (Text, p. 133.)
An officer has no authority to use corporate funds for a bribe even
wwhere it is shown’ to have been beneficial to the corporation finan-

‘
x
pe

26 NEW YORK CORPORATIONS.
cially. A stockholder may compel him to account, even where he
‘himself acquiesced in the payment. Roth v. Robertson, 64 Mise. 343.

Evidence examined and held that a “ general manager” had no
authority to contract for an automobile. Studebaker Bros. Co. v.
R. M. Rose Co., 65 Misc. 322. —

Use of Corporate Property for Persorial Debts:
: If one receiving corporate property for a-personal debt of an
officer. knows it tosbe’ such, or if reasonable inquiry would have dis-
closed the facts, he takes it at his peril. Lanning v. Trust Co. of Am.,
137 A.D. 722, :
Where a treasurer has full authority to draw checks and draws
one to his own order which he deposits in his individual account, the
bank receiving such check for deposit, is entitled to rely upon pay-
ment by the drawee bank as fully establishing the treasurer’s author-
ity. Havana Central R. R. Co. v. Knickerbocker Trust Co., 198 N. Y.
422; revsg. 135 A.D. 313.

Right to Compensation: (Text, p. 8
For summary of cases concerning, see Gaul v. Kiel & Arthe Co.
9 N. Y. 472.

FOREIGN CORPORATIONS.

'

What Constitutes “Doing Business in the State”: (Text, p. 170.)
The principles of law stated in § 178 of the Text have been ap-
plied frequently in recent cases.

: To:require a certificate the corporation ‘must be doing a portion
of its, regular business within the state. Thus a company engaged.
primarily in manufacturing may own an office building and enforce
contracts with tenants without having complied with § 15 of the Gen-
eral Corporation Law. Singer Mfg. Co. v. Granite Spring Water
Co., 66 Misc. 595. -See also International Text Book Co. v. Connelly,
67 ‘Misc. 49. Procuring subscriptions to the capital, stock is not
“doing business.” Southworth v. Morgan, 71 Misc. 214. Nor is the
taking of orders by travelling salesmen to be completed by atcept-
ance outside the state. Page Co. v. Sherwood, 65 Misc. 543; Ameri-
can Case & Register Co. v. Griswold, 68 Misc. 379, 143 A.D. 807.
Compare Warner Instrument Co. v. Sweet, 65 Misc. 57; People ex rel
ee ae 68 Misc. 306; Chicago Crayon Co. v. Slattery, 68

isc, 14

Revocation of Certificate of Authority:
On question of the right of the state to revoke a certificate author-
izing a foreign corporation to do business, see People v. Am. Ice Co.,

135 A.D. 1.

Suits by Foreign Corporations—Pleading—Effect of Non-Compliance
with Statute:

‘Compliance with the statute should be specifically pleaded by
a foreign corporation. An allegation that plaintiff ‘ was then and
still is duly authorized to do business in the state” is sufficient.
United Building Material Co. v. Odell, 67 Misc. 584.

Although a foreign corporation ‘fail to prove authority to do
,business, a defendant who does not specify the defect as one of-the
grounds for his motion to dismiss, cannot urge the objection for the
| DIGEST OF CASES. : ae

first’ time upon appeal. Boynton Furnace Co. v.Trohn, rar A.D.
773- ee os

_ Where a receiver-‘of a foreign corporation which has not com-
plied with the statute has completed a contract made by the corpo-
ration, he cannot recover. It is no avail to show that defendant will
get the goods without payment, as the same might be ‘said in every
case where the statute is pleaded. The receiver should have made a
new contract. Meyers v. Spangenburg & McLean Co., 65 Misc. 475.

*

SUITS AGAINST FOREIGN CORPORATIONS.

Service of Process: | ,

Where a foreign corporation is not doing business in the state
of New York and has no property in the state, there is a sharp con-
flict of authority between the state and federal courts as to the va-
lidity of service of process upon an officer of the corporation who
happens to be in the state. . The New York courts hold such service
valid. Grant v. Canea Consol. Copper Co.,'189 N.. Y. 241; Smith -v.
Western Pac. Ry. Co., 138 A.D. 244; Sadler v, Boston & Bolivia Rub-
ber, Co., 140 A.D. 367;.affd. 202 N. Y. 33. The federal rule is that
such service is ineffectual. Hoyt v. Ogden Portland Cement Co., 185
Fed. 889; cf. Castell v. Sterling Fire Ins. Co., 126 N. Y. Supp. 692.
Where such service is made, the defendant should at once remove the
case to the federal court. It. is bad practice to appear specially in
the state court and move to.set the summons aside. Such a motion,
if denied, will prevent ‘favorable action by the federal court after
removal, for the rule is that upon removal of a case the federal court
will take it in the condition in which it finds it and will not review
the findings of the state court. Hoyt v. Ogden Portland Cement Co.,
supra. ‘ ¢ ;

ms

Jurisdiction of the*State Court: ® S

An action may be brought in this state by a regident against a
foreign corporation for damages to lands situated outside the state,
as for example where lands-are damaged by fire through the negli-
gence of the defendant. Brisbane v. Penn. R. R. Co.; 141 A.D. 366.
Defenses: oe eres ;

A foreign corporation cannot plead non-compliance with the pro-
visions of the General Corporation Law with reference to authority
to do business in the state to defeat an action on a contract. Gaul
v. Kiel & Arthe Co., 199 N. Y. 472; 133 A.D. 621 modified. /
.. ‘Money paid to a foreign’ corporation may not be recovered on
the sole ground that the corporation ‘has not complied with § 15 of'
the General Corporation Law. The contract was not void but merely
unenforceable in the courts of the state. Mahar v. Harrington Park /
Villa Sites, 71 Misc. 430. aad

Examination Before Trial: + bral
A foreign corporation is subject to examination before trial
precisely. the same as a domestic corporation. Bluthenthal & Bick-

art, Inc., v. Crowley, 138 A.D, 845.
28 NEW YORK CORPORATIONS.

DISSOLUTION AND RECEIVERS.
(Text, Ch. XVIII, p. 179.)
A '

Rights of Binwentieng Stockholders: (Text, p.. 60.)

Minority stockholders in opposing proceedings for voluntary
dissolution are entitled to’ show that a cause of action exists in fayor
of the company which, if successful, will prove its agency: Matter
of Rateau Sales Co., 201 N. Y. 420; revsg. 141 A.D. 931. ‘

Practice—Notice to the Attorney General: (Text, p. bos

An order to’ show cause why a corporation should not be dis-
solved is equivalent to notice of motion for. the samé purpose, and
no notice of application for such an order need be given to the At-
torney General. Matter'of Geneva Basket Co., 71 Misc. 156.

Jurisdiction of Court to Set Aside Final Order:

If it appears that substantial justice requires it, a court may set
aside an order of dissolution even though there was no fraud or
irregularity involved in_the original proceeding. Matter of Auto-
matic: Chain Co., 134 A.D. 863; affd. 198 N. Y 618.

Receiver—Power to Appoint:

A court has no power to appoint a receiver of a corporation
upon the filing of a bill by a general creditor who has not obtained
judgment and. had execution returned unsatisfied. A receiver .im-
properly appointed is not entitled to compensation without the con-
sent of the corporation. Moe v. McNally Co,, 138 A.D. 480. As to
the power of the court to appoint a temporary receiver in dissolution .
proceedings which are irregular because of failure to serve certain
papers on a Attorney General, see Knickerbocker T. Co. v. a
‘town, W. P. & M. R. Co., 133 A.D. 285.

is
Receiver’s Certificates:

A court; is without power to authorize a receiver in sequestra-
tion proceedings to issue receiver’s certificates as a lien “prior to
all other liens and claims thereon whatsoever” for the purpose of
paying interest on mortgage bonds to prevent foreclosure. Knick-
erbocker Tr. Co. v. Oneonta C. & R. S. Ry. Co., 201 N. Y. 379; affg.
138 A.D. 687.

In a case where receiver’s certificates have been issued on, due
notice to mortgagees and without objection, the matter is res adju-
dicata‘as to them and they will not be heard to object to a proposed
‘new issue to refund the original issue. Knickerbocker Tr. Co. v.
Tarrytown, etc., Ry. Co.,,supra.

Foreign Receivers:

A Pages of an insolvent foreign corporation may enforce lia-
bility of resident stockholders created’ by foreign statute where it
appears that the same liability has been determined as to all the
stockholders in the foreign court and the remedy sought does not
involve any departure from New York practice, nor conflict with
public policy, nor result in injustice to a citizen of New York. Ship-
man v. Treadwell, 200 N. Y. 472; afig. 134 A.D. 991.

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