Carnell Law School Library FN5342.W58 "tian WHITE AND GOLDMARK NON-STOCK CORPORATIONS CONTAINING THE STATUTES AND PROCEDURE RELATIVE TO THE ORGANIZATION, REGULATION AND POWERS OF MEMBERSHIP AND RE- LIGIOUS CORPORATIONS IN THE STATE OF NEW YORK WITH DECISIONS, ANNOTATIONS AND FORMS BY FRANK WHITE AUTHOR OF “WHITE ON CORPORATIONS,” ETC, AND GODFREY GOLDMARK BOTH OF THE NEW YORK CITY BAR NEW YORK BAKER, VOORHIS & COMPANY 1913 CopyRriGHT, 1913, BY FRANK WHITE AND GODFREY GOLDMARK PREFACE For some time past there has been a growing demand by the bar and by laymen for a work devoted to non-stock corporations to serve as a companion volume to “White on Corporations,” which treats solely of corporations with capital stock. It is hoped that this work will in a measure meet that demand, and be a practical aid to all who may be interested in the ever increasing number o membership and religious corporations organized in the State of New York. It has been deemed advisable to present the full text of the statutes and in connection therewith to give the decisions of the courts and the annotations under topical headings in such a manner as to combine all the advantages that may be found in a treatise, with the further convenience of having the provisions of the stat- utes accessible for immediate reference. This is the plan pursued in “White on Corporations” and seems to have met with the approval of the legal profession. In considering the organization and powers of any particular kind of corporation it must be borne in mind that the provisions of the General Corporation Law are to be read with those of the particular article under consideration, the latter controlling, how- ever, when inconsistent with the general provisions (General Cor- poration Law, section 321). For this reason the General Corpora- tion Law has been printed in full with such decisions interpreting it as are considered applicable to non-stock corporations. The forms have been prepared after careful study of the statutes to which they apply, and it is believed they will be found useful in the preparation of papers relating to the class of corporations treated of in this volume. FRANK WHITE GODFREY GOLDMARK 32 Liberty Street, New York City, September 15, 1913. TABLE OF CONTENTS For the purpose of finding any particular provision, reference should be had to the general index. General Corporation Law: Application of, explained, 2. Short title; classification; definitions (§§ 1-3), 2-5. General provisions (§§ 4-44), 5-47. Change of name (§§ 60-65), 47-52. Sale of corporate real property (§§ 70-76), 52-50. Judicial supervision of corporation and of the officers and mem- bers thereof (§§ 90-92), 59-64. Action for sequestration, action for dissolution and action to enforce individual liability of officers and members of cor- poration (§§ 100-115), 64-75. Action to annul corporation (§§ 130-136), 75-80. Proceedings for voluntary dissolution of corporation (§§ 170- 195), 80-03. Provisions applicable to temporary and permanent receivers of corporations (§§ 225-227), 93-05. Powers, duties and liabilities of receivers of corporation (§§ 230-278), 95-117. Provisions applicable to two or more of the foregoing pro- ceedings or actions (§§ 300-316), 117-125. Alteration and repeal of charter of corporation (§§ 320, 321), 125-127. Laws repealed; construction; when to take effect (§§ 330-332), 127-131. Membership Corporations Law: Explanatory Notes of Revision Commissions, 133-138. Fees of Secretary of State and County Clerk, 190. Short title and definitions (§§ 1, 2), 140. General provisions relating to membership corporations (§§ 3- 24), 140-182. Corporations for purposes not elsewhere authorized (§§ 40-47), 183-197. Cemetery corporations (§§ 60-84), 197-235. Fire corporations (§§ 100-105), 235-240. Vv TABLE OF CONTENTS Corporations for the prevention of cruelty (§§ 120-123), 240-245. Hospital corporations (§ 130), 245-248. Christian associations (§§ 140-143), 248-254. Bar associations (§§ 150, 151), 254-256... Veteran soldiers’ and sailors’ associations (§§ 160-162), 256, 257. Soldiers’ monument corporations (§§ 170-173), 258-262. Boards of trade (§§ 180-182), 262-264. Agricultural and horticultural corporations (§§ 190-197), 264- 270. Medical societies (§§ 210-215), 270-274. Alumni corporations (§§ 220-227), 274-278. Historical societies (§§ 230, 231), 278-280. Veterinary associations (§§ 240-244), 280-282. Consolidation of library corporations in New York City (§§ 260-265), 282-287. Agricultural fair and other corporations authorized to con- struct tunnels and bridges (8§ 270-273), 287, 288. Corporations for raising and breeding and improving the breed of horses (§§ 280-298), 289-208. Laws repealed; when to take effect (§§ 310, 311), 298-300. Religious Corporations Law: Notes of Revision Commissioners, 301. Fees of County Clerk, 309. Short title and definitions (§§ 1, 2), 305. General provisions (§§ 3-27), 306-348. Protestant Episcopal parishes or churches (§§ 40-46), 349-364. Presbyterian churches (§§ 60-70), 364-376. Roman Catholic and Greek churches (§§ 90-92), 376-379. Reformed Dutch, Reformed Presbyterian and Lutheran churches (§§ 110-116), 380-385. Baptist churches (§§ 130-140), 386-392. Congregational and Independent churches (§§ 160-171), 393- 399. Free churches (§§ 180-183), 400-403. Other denominations (§§ 190-205), 403-417. Union churches (§§ 220, 221), 417-419. Laws repealed; when to take effect (8§ 260, 261), 420-422. Miscellaneous Statutes: Tax Law; sections applicable to non-stock corporations, 425- : #& : ‘ ‘i ‘ é ‘ Education Law; sections respecting incorporation of institu- tions for higher education, etc., 439-446. Lien Law Provisions; sections specially applicable to ceme- teries, 447-449. State Charities Law; sections relative to supervision of certain corporations by State Board of Charities, 451-459. Penal Law; sections applicable to non-stock corporations, 461- 474. vi Taste or CoNTENTS Medical Societies; unconsolidated acts relative to medical so- cieties, 475. Quo Warranto; code provisions for testing title to office and right to exercise corporate privileges, 491, 492. Forms, 493-668. vii GENERAL CORPORATION LAW Laws of 1909, Chapter 28, Entitled: “An Act Relating to Corporations Generally, Constituting Chapter Twenty- three of the Consolidated Laws,” as Amended to the Commencement of the Legislative Session of 1914. CHAPTER 23 OF THE CONSOLIDATED LAWS GENERAL CoRPORATION Law 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). *Section 6. Action for sequestration, action for dissolution and ac- tion to enforce individual liability of officers and members of corporation (§§ 100-115). 7. Action to annul corporation (§§ 130-136). 8. 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). 10-a. Provisions applicable to temporary and permanent receivers of corporations (§§ 226, 227). 11. Powers, duties and liabilities of receivers of corpora- tion (§§ 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. Laws repealed; construction; when to take effect (8§ 330-332). *So in original. 2 GENERAL CorporATION Law. ARTICLE 1 Short Title; Classification; Definitions Section 1. Short title. 2. Classification of corporations. 3. Definitions. § x. Short title. This chapter shall be known as the “General Corporation Law.” Application of General Corporation Law. The General Corporation Law contains the provisions which apply generally to every corporation organized under the laws of the State of New York, including all corporations formed under or subject to the Membership Corporations Law and the Re- ligious Corporations Law. Stated in another way, it should be understood that the provisions of the General Corporation Law are to be read into the charter of every corporation formed pur- suant to either the Membership Corporations Law or the Re- ligious Corporations Law, and aes into the charter of every mem- bership or religious corporation organized under any of the gen- eral laws existing prior to and repealed by the present laws. However, it should be borne in mind that the application of the General Corporation Law, as above set forth, is subject to the limitation embodied in section 321 of such law, that is to say, if any provision of the Membership Corporations Law or the Re- ligious Corporations Law conflicts with any provision of the Gen- eral Corporation Law the provision of such other corporate law so. conflicting shall prevail, and the provision of the General Cor- poration Law shall not apply in such case. The section above cited also provides that if in the’ Membership Corporations Law or the Religious Corporations Law there shall be a provision re- lating to a matter embraced in the General Corporation Law, but not conflicting with it, such provision in such other law shall be deemed to be in addition to the provision in the General Corpora- tion Law relating to the same subject matter, and, in such case, both provisions shall be applicable. § 2. Classification of corporations. A corporation shall be either, ~ 1. A municipal corporation, 2. A stock corporation, or 3. A non-stock corporation. GENERAL CorPORATION Law. 3 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. Formerly § 2, as 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 capi- tal 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 corporation. A corporation is not a stock corporation because of having issued cer- tificates called certificates of stock, but which are in fact merely certificates of membership, and which is not author- ized by law to distribute to its members any dividends or share of profits arising from the operations of the corpo- ration. 3. The term “non-stock corporation” includes every cor- poration 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 corpo- rations, shall include trustees or other persons, by whatever 4 GENERAL Corporation Law. 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 re- quired by law to be filed, to effect the incorporation of a corporation, including a certified copy of an original cer- tificate 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 per- son having a right to vote only upon a proxy. 9. 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 reference to a non-stock corporation, includes the operations for the conduct of which it is incorporated. 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 in- cluded in such consolidation. Formerly L. 1890, ch. 563, § 2, as am’d by L. 1892, ch. 687; L. 1895, ch. 672. Definition of Terms. Paragraph 6, in relation to directors and trustees, appears to be merely a definition of terms, and to make the word “directors,” when used in these laws, applicable to corporations in which the members of the managing board are termed trustees, governors, managers, etc. Principal Office. Under the foregoing section the terms “principal office’ and “principal place of business” are synonymous when used in respect to corporations organized under the laws of this State. Peo. ex. rel. Knickerbocker Press v. Barker, 87 Hun 341, affd., 147 N. Y. 715 (1895). A corporation is deemed a resident of the county where its prin- cipal business office is located. Conroe v. Nat’l Pro. Ins. Co., 10 How. Pr. 405 (1855); Rossie Iron Works v. Westbrook, 36 St. Rep. 555 (1891). GENERAL CorPORATION Law. 5 The legislature did not intend to include within the term “re- ligious corporations” any of the numerous benevolent, charitable, philanthropic and missionary organizations created either under special laws or under the Membership Corporation Law. Matter of Watson, 171 N. Y. 256 (1902). A corporation organized to provide churches for seamen is a religious corporation. Matter of Prall, 78 App. Div. 301 (1903). SEcTION © ON AND 10. 12. 13. 14. 15. 16. 17. 18. 19. 21. 22. 23. 24. 25. 27. 29. 31. 32. 33. 34. 35- 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 consolidation. Limitation of powers; provisions of certificate. Grant of general powers. Enlargement of limitations upon the amount of the property 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 foreign corporations. Acquisition by foreign corporations 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. 6 GENERAL CorPORATION Law. .36. Forfeiture for non-user. 37. Extension of corporate existence. 38. Revival of corporate existence. 39..Approval of certificates of extension or revival; when required. 40. Extension when stock is owned by another corpora- tion. 41. Effect of extension. 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 in- corporation must be executed by natural persons, who must be of full age, and at least two-thirds of them must be citi- zens of the United States and one of them a resident of this state. This section shall not apply to a corporation 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 exist- ing corporation or otherwise. Formerly § 4, added by L. 1892, ch. 687, as am’d by L. 1895, ch. 672. The terms of the foregoing section preclude corporations, co- partnerships and minors from acting as incorporators. It also prevents the formation of corporations by persons acting in a representative capacity. An incorporator has no power, in his capacity as notary public, to take the acknowledgement of another incorporator to the cer- tificate of incorporation, and an acknowledgment so taken is a nullity. Peo. ex rel. Erie R. R. Co. v. Bd. of R. R. Comrs., 105 App. Div. 273 (1905). Married Women May Be Incorporators. Married women who are qualified as to age and citizenship, as well as single women, may act as incorporators. Peo. v. Webster, io Wendell 554 (1833). Another ruling in this case to the effect that when a married woman sues, or is sued, her husband must be joined with her, has been superseded by L. 1884, ch. 381 (now Domestic Relations Law, § 51). The full text of said section is as follows: § 51. Powers of married woman.—A married woman has all the rights in respect to property, real or personal, and the acquisition, use, enjoyment and disposition thereof, and to make contracts in respect thereto with any person, including her husband, and to carry on any business, trade or occupation, and to exercise all powers and enjoy all rights in respect thereto and in respect to GENERAL CorporaTION Law. 7 her contracts, and be liable on such contracts, as if she were un- married; but a husband and wife cannot contract to alter or dis- solve the marriage or to relieve the husband from his liability to support his wife. All sums that may be recovered in actions or special proceedings by a married woman to recover damages to her person, estate or character shall be the separate property of the wife. Judgment for or against a married woman may be ren- dered and enforced, in a court of record, or not of record, as if she was single. A married woman may confess a judgment speci- fied in section one thousand two hundred and seventy-three of the code of civil procedure. Formerly L. 1884, ch. 381, as re-enacted and am’d by Domestic Relations Law of 1896, ch. 272, § 21; re- enacted by L. 1909, ch. 19, § 51. Since ch. 381, L. 1884 (now Domestic Relations Law, § 51), was enacted all disabilities of a married woman to make valid con- tracts are removed, and she may now make contracts and bind herself in the same way as a femme sole. Where such a contract is made and she is no longer to be considered as acting as the agent of her husband. O’Connell v. Shera, 66 App. Div. 467 (1901). § 5. Filing and recording certificates of incorporation. 1. Every certificate of incorporation 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 certificate of the secretary of state of such filing and rec- ord, or a duplicate original of such certificate or amended or supplemental certificate shall be filed and similarly re- corded 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 de- termined upon at the time of executing the certificate of incorporation, in such county clerk’s office as the judge approving the certificate shall direct. Nothing herein con- tained, however, shall be deemed to prohibit a corporation from having and using a corporate name or title in a language other than the English language, if the same be in English letters or characters. All taxes required by law 8 GENERAL CoRPORATION 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 privileges until such taxes and fees have been paid. 2. Whenever under any law now or heretofore in force the certificate of incorporation of any corporation other than a stock corporation was or is required to be filed in more than one public office, a certified copy of such cer- tificate 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 im- paired or affected thereby, provided also, that such filing of a copy shall not cause a duplication or similarity of cor- porate names in violation of the next succeeding section. Formerly § 3, L. 1890, ch. 563, as am’d by L. 1892, ch. 687; L. 1895, ch. 672; L. 1902, ch. 285. Thus am’d by L. 1913, ch. 479. By an amendment of 1895, ch. 672, the provision was inserted requiring certificates to be in the English language. The second sentence in subd. I was added by the amendment of 1913. Under the above section an original certificate of a member- ship corporation must be filed in the office of the Secretary of State, and either a certified copy thereof or a duplicate original in the office of the county clerk. The certificates of incorporation of religious corporations are to be filed and recorded only in the office of the clerk of the county in which the principal office or place of worship is to be situated, or if there is to be neither such office nor such place of worship, then such certificates shall be filed and recorded only in the office of the Secretary of State. See Religious Corporations Law, § 3. But as to Free Churches see § 180, requiring filing and recording in both offices. Acknowledgment. One who is himself an incorporator may not take the acknowl- edgments of gther incorporators. Peo. ex rel. Erie R. R. v. Rail- road Comrs., 105 App. Div. 273 (1905). The acknowledgment may be taken before any officer authorized to take the acknowledgment or proof of the execution of a deed of real property to entitle it to be recorded in a county clerk’s office, and shall be made and certified in the same manner as such acknowledgment or proof of such deed. Gen. Construction L. § 11. The Secretary of State does not require a county clerk’s cer- GENERAL CorporaTion Law. 9 tificate authenticating the act of a notary public or other efficer taking an acknowledgment within the State of the execution of a corporation certificate to be filed in his office, but where an acknowledgment is taken in one county and the duplicate original certificate is to be filed in the office of the clerk of another county it is necessary to obtain a certificate of the clerk of the county in which the acknowledgment is taken authenticating the act of the officer taking such acknowledgment. . Real Property L. § 310. Right to File. The filing of the certificate in the office of the Secretary of State is sufficient to effect incorporation; and an omission to file the duplicate in the office of the county clerk would not vitiate the incorporation so as to render the members partners as between themselves. Raisbeck v. Oesterricher, 4 Abb. N. C. 444 (1878). See, also, Meriden Tool Co. v. Morgan, 1 Abb. N. C. 125, note (1875); Western Transportation Co. v. Scheu, 19 N. Y. 408 (1859); Oswego Starch Factory v. Dolloway, 21 N. Y. 449; Union Steam- boat Co. v. City of Buffalo, 82 N. Y. 351 (1880); Jessup v. Carnegie, 80 N. Y. 441 (1880); Eaton v. Aspinwall, 19 N. Y. 121. In case the Secretary of State refuses to file a certificate the remedy is by mandamus. Peo. ex rel. N. Y. Phonograph Co. v. Rice, 128 N. Y. 591 (1891), affg. 57 Hun 486; Peo. ex rel. Eichemeyer-Field Co. v. Rice, 66 Hun 130 (1892), affd., 138 N. Y. 614; id., 51 St. Rep. 93. The Secretary of State has a right to pass upon the form of the certificate, and as to whether or not it is entitled to be filed, subject to review in a proper proceeding. He is not required to file a certificate unauthorized by the act. The right to file a cer- tificate, by which a body politic and corporate is to be ipso facto created, only exists in behalf of those who bring themselves within the terms of the act. Peo. ex rel. Blossom v. Nelson, 46 N. Y. 477 (1871); Peo. ex rel. Davenport 'v. Rice, 68 Hun 24 (1893); id., 22 N. Y. Supp. 631; id., 52 St. Rep. 50 (1893). A motion for a mandamus to compel the Secretary of State to file a certificate can only be made in the third judicial district, or in a county adjoining thereto. Mason v. Willers, 7 Hun 23 (1876); Peo. ex rel. Cagger v. Supervisors, 2 Abb. N. S. 78. See also 68 Hun 24 (1893). A mandamus will not issue to compel the filing of a certificate containing a clause which contravenes the provisions of the stat- ute. Peo. ex rel. Barney v. Whalen, 56 Misc. 278 (1907), affd., 119 App. Div. 749, and 189 N. Y. 560. The Secretary of State will not be compelled to file the cer- tificate of incorporation of a company to be formed as a social organization when its purposes are in reality those of a business corporation. Peo. ex rel. Davenport v. Rice, supra. To restrain the Secretary of State or county clerk from filing a certificate, the proceedings should be by injunction. An injunc- tion against the Secretary of State can only be granted by the Supreme Court at a term held in the third judicial department. Io GENERAL CorPorATION Law. Code of Civil Pro. § 605; Matter of Comstock, 25 St. Rep. 611 (1889). Where a peremptory mandamus is applied for, which by its terms acts as a restraint upon State officers engaged in, or about to perform a statutory duty, and it is to be used as an injunction, the limitation upon the granting of such an injunction by section 605 of the Code of Civil Procedure applies; that is, it “shall not be granted, except by the Supreme Court at a term thereof, sitting in the department in which the officer or board is located, or the duty required to be performed.” Peo. ex rel. Derby v. Rice, 129 N. Y. 461 (1891). But see Peo. ex rel. Platt v. Rice, 144 N. Y. 249, 261 (1894). Effect of Filing. A corporation de jure does not exist until the certificate of in- corporation is filed in accordance with law. Childs v. Smith, 46 N. Y. 34; id., 38 How. Pr. 328 (1869). Words and phrases in a statute, conferring upon a corporation its franchises and special privileges, which are ambiguous or admit of different meanings, must receive that construction which is most favorable to the public. Peo. v. Broadway R. R. Co. of Bklyn., 126 N. Y. 29 (igor). De Facto Corporations. A corporation de facto may legally do every act which the same entity could do were it a de jure corporation; and as to all the world except the paramount authority under which it acts, and from which it receives its charter, it occupies the same posi- tion as though in all respects valid; and, even as against the State, except in direct proceedings to arrest its usurpation of power, its acts are to be treated as efficacious. Lamming v. Galusha, 81 Hun 247, affd., 151 N. Y. 648 (1897). The validity of a corporation cannot be impeached by third persons by showing aliunde the certificate of incorporation that certain requisites of the statute have not been complied with. Id. Between a corporation de facto and its officers a relation exists which will be recognized as effectual to enable them through such relation to justify the exercise of their. functions in the manage- ment of its business, and for that purpose it is, as to third per- sons, no less effectual than a corporation de jure. Lamming v. Galusha, 81 Hun 247, affd., 151 N. Y. 648 (1897). The principle, that acts in the nature of corporate proceedings under color of grganization may constitute a corporation de facto, is not applicable as between the parties to the proceedings, who have knowledge of the defects. Childs v. Smith, 55 Barb. 45, 38 How. Pr. 328; reviewed, 46 N. Y. 34 (1871). § 6. Corporate names. 1. No certificate of incorporation of a proposed corporation having the same name as a cor- poration authorized to do business under the laws of this GENERAL CorporATION Law. II 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 authorizing it to do business in this state; nor shall any corporation ex- cept a religious, charitable, or benevolent corporation be authorized 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 person, firm or copartner- ship; 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 consolida- tion of other corporations or upon the sale of the property or franchises of a corporation, or a corporation acquiring or becoming possessed of all the estate, property, rights, privileges and franchises of any other corporation or cor- porations by merger, may have the same name as the cor- poration 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,” “guaran- tee,” “guaranty,” “title,” “casualty,” “surety,” “fidelity,” “savings,” “investment,” “loan” or “benefit” as part of its name, except a corporation formed under the banking law or the insurance law. 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. Formerly § 4, L. 1890, ch. 563, as am’d by L. 1892, ch. 687, § 6; L. 1895, ch. 672; L. 1900, ch. 704; L. 1902, ch. 9; L. 1007, ch. 115. Thus amended L. 1911, ch. 638; L. 1912, ch. 2, and L. 1913, ch. 24. The amendment of 1911 inserted the requirement that the name, except in the case of a religious, charitable or benevolent corpora- tion, must indicate that it is a corporation. The amendment of 1912 added the clause in regard to names of corporations upon merger. The amendment of 1913 extended the list of prohibited words so as to include the words “casualty,” “surety,” and “fidelity.” 12 GENERAL CorporATION Law. For provisions relative to change of corporate name, see §§ 60- 65, post. In addition to the regulations in the foregoing section as to cor- porate names the use of the word “co-operative” is also prohibited, except as provided by Laws 1913, ch. 454. University or College. Provisions restricting the use by corporations of the name “university” or “college” are contained in the Education Law, § 66 (L. 1910, ch. 140), as follows: “No individual, association or corporation not holding university or college degree-conferring powers by special charter from the Legislature of this state or from the regents, shall confer any degrees, or shall transact busi- ness under or in any way assume the name university or college, till it shall have received from the regents, under their seal, written permission to use such name, and no such permission shall be granted by the regents, except on favorable report after personal inspection of the institution by an officer of the university, * * * Violation of this section shall be a misdemeanor. * * *” This provision was formerly in section 33 of the Uni- versity Law (L. 1892, ch. 378). Discretion of Secretary of State. The Secretary of State must decide in the first instance whether the proposed name is, or is not, within the statutory prohibition. State v. McGrath, 5 S. W. Rep. 29; Peo. ex rel. Columbia Chem. Co. v. O’Brien, 101 App. Div. 296 (1905). Corporate Name, Using Abbreviation. A corporation must use its corporate name in the transaction of its business and a contract, signed with a fragment of its entire corporate name, is not well executed; and a check, drawn to a payee designated by a like fragment of the corporate name, is insufficient to form the basis of a recovery in an action by the corporation against the drawer. Scarsdale Pubg. Co. v. Carter, 63 Misc. 271 (1909). Names Claimed to Be Infringed. The name “Buffalo Commercial Bank” does not infringe upon “Bank of Commerce in Buffalo.” In re Bank of Attica, 35 St. Rep. 708, 12 N. Y. Supp, 648 (1891). The name “The Columbian Chemical Company” is an infringe- ment of the name “Columbia Chemical Company.” Peo. ex rel. Columbia Chemical.Co. v. O’Brien, 101 App. Div. 296 (1905). “The S. Howes Co.,” engaged in manufacturing grain cleaners, is entitled to enjoin “The Howes Grain Cleaner Co.” from using the name “Howes.” The S. Howes Co. v. Howes Grain Cleaner Co., 24 Misc. 83, and cases therein cited; s. c, 19 App. Div. 625 (1897). The use of the trade-mark, “The Little Antique Shop,” is an infringement upon the name, “The Little Shop.” Crawford v. Laus, 29 Misc. 248 (1899). GENERAL Corporation Law. 13 The name “The Tuerk Water Meter Company” is an infringe- ment of the name “The Tuerk Water Motor Company.” Tuerk Hydraulic Power Co. v. Tuerk, 92 Hun 65 (1895). A corporation which has for years used the corporate title “Roy Watch Case Co.” is entitled to enjoin a rival and lately constituted corporation from employing the name “Camm-Roy Watch Case Co.” Roy Watch Case Co. v. Camm-Roy Watch Case Co., 28 Misc. 45 (1899). The foregoing cases relate to business corporations, but the rules laid down are equally applicable to non-stock corporations. The Salvation Army of the United States, which publishes a paper called the “War Cry,” may maintain an action against the American Salvation Army to restrain it from using its name and from publishing a paper under the name of “The American Salva- tion Army War Cry.” The Salvation Army in the U. S. v. Ameri- can S. A., 135 App. Div. 268; s. c. 141 App. Div. 931 (1910), revsg. 62 Misc. 360. At the suit of “The Legal Aid Society,” a benevolent association, the court temporarily restrained the “Co-operative Legal Aid So- ciety,” a business concern. Legal Aid Soc. v. Co-operative Legal Aid. Soc., 41 Misc. 127 (1903). Corporate Name as Property Right. A corporation has an absolute legal right to reincorporate under the corporate name adopted by it under its original incorporation, though it resembles that of an existing corporation. Peo. ex rel. U.S. Grand Lodge of Order of Brith Abraham v. Payne, 161 N. Y. 229 (1900), affg. 43 App. Div. 621. The right to the exclusive use of a name will be protected upon the same principle that persons are protected in the use of trade- marks. State v. McGrath, 5 S. W. Rep. 29. It is unnecessary to determine that there is intent to do wrong. The right to protection of name is based upon the proprietary right acquired by the use thereof. American Grocer Pubg. Ass’n v. The Grocer Pubg. Co., 25 Hun 308. See, also, Commercial Union Assur. Co. v. Smith, 18 St. Rep. 151 (1888), 2 N. Y. Supp. 296; Matter of U. S. Mer. R. & Col. Assn., 22 St. Rep. 494, 115 N. Y. 176 (1889); Railway Age Pubg. Co. v. Garnett, 17 Weekly Dig. 250; Farmers’ Loan & Trust Co. v. Farmers’ Loan & Trust Co. of Kansas, 21 Abb. N. C. 104 (1888); Hygeia Water Ice Co. v. N. Y. Hygeia Ice Co. (Ltd.), 19 N. Y. Supp. 602, 47 St. Rep. 71, affd.,, 140 N. Y. 94 (1893); Employers’ Liability Assurance Cor- poration v. Employers’ Liability Ins. Co., 61 Hun 552 (1890); In re Bank of Attica, 12 N. Y. Supp. 648, 35 St. Rep. 708 (1801); Amoskeag Mfg. Co. v. Garner, 54 How. Pr. 297. Penal Law Provision. For Penal Law provision respecting unlawful use of name of benevolent, humane or charitable corporation and the right to injunctive relief, see Penal Law, § 948, post. “14 GENERAL CorRPoRATION Law. Remedy for Infringement. Where a certificate is filed with the same name as that of an existing corporation or where the name so nearly resembles that of an existing corporation as to be calculated to deceive the rem- edy to the aggrieved corporation is by suit in equity not by writ of certiorari against the Secretary of State, Peo. ex rel. Columbia Chemical Co. v. O’Brien, 101 App. Div. 296 (1905). A corporation cannot, in legal proceedings, be properly desig- nated by two names, and cannot, except as authorized by law, change its name, either directly or by user, nor can the public give it a name other than that of its creation, by which it can be recognized in judicial proceedings. Matter of United States Mort- gage Co., 83 Hun 572. The right to relief by injunction against the unfair and mis- leading use of a corporate name may be invoked by non-stock corporations as well as by business corporations. Benev. & Prot. Order of Elks v. Improved Benev. & Prot. Order of Elks, 205 N. Y. 459 (1912). § 7. Amended and supplemental certificates. If in the original or amended certificate of incorporation of any cor- poration, or if in a supplemental certificate of any corpo- ration any informality exist, or if any such certificate con- tain any matter not authorized by law to be stated therein, or if the proof or acknowledgment thereof shall be defec- tive, the corporators or directors of the corporation may make and file an amended certificate correcting such in- formality or defect or striking out such unauthorized mat- ter; 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 antl conditions as it may impose, amend any cer- tificate 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 rec- . GENERAL CorPorATION Law. 15 ord of the original certificate of the date and place of record of every such amended certificate. The amendment of a certificate under this section shall be without prejudice to any pending action or proceeding, or to any rights previously accrued. Formerly L. 1890, ch. 563, § 5, as am’d by L. 1892, ch. 687, § 7. For form of paper under the foregoing section, see post, Form No. 1. Scope of Section. Under chapter 135, Laws of 1870, now repealed, it was held that the act was intended to enable corporations to remedy patent omissions, that is, the omission of things which are required to be stated, and which, being omitted, make the certificate imperfect upon its face. Matter of N. Y., L. E. & W. R. R. Co, 25 Hun 556 (1881). Section 7 above, however, is much broader and more liberal in its terms, and seems to permit the correction of the specified irregularities, whether they are patent upon the face of the certificate or not. Where the certificate of incorporation states the corporate objects to be the purchase and sale and general dealing in real and personal property, an application to amend the certificate pur- suant to the above section by adding to the objects the carrying on of a “general moving, trucking and storage warehouse busi- ness” must be denied as not within the purview of this section which applies where the failure in stating the true objects arises from faulty terminology or phraseology in the certificate. The application should be made under Stock Corporation Law § 18. Matter of Sproessig Storage Warehouse Co., N. Y. County, Spe- cial Term, Greenbaum, J., N. Y. Law Journal, November 13, 1912. A certificate may be amended, under the first paragraph of the foregoing section, without notice to the Attorney General, where the amendment is limited to the correction of informalities, de- fects or striking out unauthorized matter and does not contem- plate any radical change, but when such notice has been given to the Attorney General and to such other persons as the court may direct the certificate may be amended to truly set forth its objects and purposes. Matter of Creditors’ Audit & Adjustment Assn., 72 Misc. 461 (1911). § 8 Lost or destroyed certificates. If either of the cer- tificates 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. 16 GENERAL Corporation Law. Formerly L. 1890, ch. 563, § 6, as am’d by L. 1802, ch. 687, § 8. Where the certificate filed in the county clerk’s office is lost, it is competent to prove by oral evidence that a certificate was in fact filed. N. Y. Car Oil Co. v. Richmond, 6 Bosw. 213 (1860). § 9. Certificate and other papers as evidence; evidence of consolidation. 1. The certificate of incorporation of any corporation duly 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 contain- ing facts required or authorized by law to be stated therein, shall be presumptive evidence of the existence of such facts. 2. Whenever, by the laws of any other state or territory, or the dominion of Canada, a copy of the certificate of or- ganization or incorporation or any other certificate, certi- fied 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, organized or located in such state, territory or dominion, or claiming so to be, such certificate or certificates, duly exemplified, or a duly exemplified 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. 3. Where two or more corporations have been or shall hereafter be consolidated and merged into a new corpora- tion, a certificate of the secretary of state under his official seal concisely stating the names of the respective corpora- tions 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 ang 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 pro- ceedings 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 GENERAL CorPoraTION Law. 17 situated and the amount of its capital stock, shall be pre- ‘sumptive 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 proceed- ings, and of the other facts so certified by him. . Subd. 1 was formerly L. 1890, ch. 563, § 7, as am’d by L. 1802, ch. 687, § 9; L. 1895, ch. 672. Subd. 2 was formerly L. 1877, ch. 311. Subd. 3 was formerly L. 1899, ch. 201. Certified Copies. This section is in addition to and does not repeal or supersede section 933 of the Code, which provides that a duly certified. copy of a paper filed in a public office is evidence as though the orig- inal were produced. The full text of said section is as follows, to wit: A copy of a paper, filed, kept, entered, or recorded, pursuant to law, in a public office of the State, the officer having charge of which has, pursuant to law, an official seal; or with the clerk of a court of the State; or with the clerk or secretary of either house of the Legislature, or of any other public body or public board, created by authority of a law of the State, and having, pursuant to law, a seal; or a transcript from a record, kept, pur- suant to law, in such a public office, or by such a clerk or secre- tary, is evidence, as if the original was produced. But to entitle it to be used in evidence it, must be certified by the clerk of the court, under his hand and the seal of the court; or by the officer having the custody of the original; or his deputy or clerk, ap- pointed pursuant to law, under his official seal and the hand of the person certifying, or by the presiding officer, secretary, or clerk of the public body or board, appointed, pursuant to law, under his hand, and, except where it is certified by the clerk or secretary of either house of the Legislature, under the official seal of the body or board. Code Civ. Pro. § 933. Proof of Incorporation. All that a corporation is called upon to prove, to establish its existence, is its charter, and user under it. Jones v. Dana, 24 Barb. 305 (1855); Utica Ins. Co. v. Tilman, 1 Wend. 555 (1828). The fact of incorporation cannot be proved by parol testimony. Nicoll y. Clark, 13 Misc. 128 (1895). § 10. Limitation of powers; provisions of certificate. 1. No corporation shall possess or exercise any corporate powers not given by law, or not necessary to the exercise of the powers so given. 18 GENERAL CoRPoRATION Law. 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 direc- tors and stockholders, which does not exempt them from the performance of any obligation or the performance of any duty imposed by law. Formerly L. 1890, ch. 563, § 9, as am’d by L. 1892, ch. 687, § 10; L. 1895, ch. 672. The amendment of 1895, which took effect May 14, changed the head note of this section and added the last sentence, which embraces provisions that were duplicated in former section 2 of the Business Corporations Law, but were omitted from that law in 1909 in order to avoid such duplication. It has been held that a provision in a certificate of incorpora- tion that the number of directors therein fixed shall not be changed except by unanimous consent of stockholders, is a valid limitation upon the powers of the stockholders under the foregoing section and does not contravene a statute which declares the method of increasing or reducing directors. Ripin v. United States Woven Label Co., 205 N. Y. 442 (1912), affg., 145 App. Div. 916 (1911). But a by-law forbidding a change in the number of directors ex- cept by a vote of 90 per cent. of the members is invalid. Katz v. H. H. Mfg. Co., 109 App. Div. 49 (1905), affd., 183 N. Y. 578. Interpretation of Corporate Powers. When either of two constructions of a statute conferring cor- porate powers be possible the interpretation must be adopted which is most favorable to the State. Coosaw Mining Co. v. South Carolina, 144 U. S. 550, 561 (1891); Minor v. Erie R. R. Co., 171 N. Y. 573 (1902). A corporation possesses not only powers specifically granted in terms by its charter, but also such powers as shall be necessary to the exercise of the powers so enumerated and given. Peo. ex rel. Tiffany v. Campbell, 144 N. Y. 166 (1894). It has not, how- ever, implied powers which are merely convenient or useful and not essential to its business. Id. Unless restrained by law, every corporation has the incidental power to make any contract necessary to advance the objects for which it wasgreated. Legrand v. Manhattan Mer. Assn., 80 N. Y. 638 (1880). Ultra Vires and Examples. Contracts of corporations are ultra vires when they involve adventures outside of and not within the scope of powers given by their charter. Jemison et al. v. C. S. Bank, 122 N. Y. 135 (1890). A corporation has no power to indorse a note for the accom- GENERAL CoRPORATION Law. 19 modation of the maker. A. D. Farmer & Son Type Founding Co. v. Humboldt Pub. Co., 27 Misc. 314 (1899). Domestic corporations cannot bind the corporate property by accommodation indorsements, unless organized for the purposes of guaranty and indemnity. Fox v. Rural Home Co., Ltd., 90 Hun 365, affd., 157 N. Y. 684 (1899). § 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 cer- tificate of incorporation or by law, and perpetually when no period is specified. 2. To have a common seal, and alter the same at pleasure. 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 require, 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 regulating 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. Formerly L. 1890, ch. 563, § 8, as am’d by L. 1802, ch. 687, § 11; “L. 1895, ch. 672. For form of by-laws of a club, see Form No. 41, post. In 1895 the words “and the calling of meetings of its members” were inserted in the first sentence of subdivision 5, and also the 20 GENERAL CorRPORATION Law. words “adopted by the board of directors” in the last sentence but one. Corporate Existence. 1. The term of existence may be extended. See § 37, post. Neither the Membership Corporations Law nor the Religious Corporations Law contains any provision requiring the term of existence to be stated; therefore, pursuant to paragraph one, it would be perpetual. The filing of the certificate of incorporation in the office of the Secretary of State is sufficient to effect in- corporation and an omission to file the duplicate in the office of the county clerk would not vitiate the incorporation. Raisbeck v. Oesterricher, 4 Abb. N. C. 444 (1878); compare Card v. Moore, 68 App. Div. 327 (1902), affd. 173 N. Y. 598. The regularity of corporate existence cannot be collaterally attacked. Smith v. Havens Relief Fund Society, 118 App. Div. 678 (1907), affd., 190 N. Y. 557. Corporate Seal. The corporate seal is not necessary to the validity of its con- tracts. Valente v. Int. Milling Co. 119 App. Div. 127 (1907). It is of great value as showing the acts of the corporation. Lein- kauf v. Calman, 110 N. Y. 50 (1888); Whitford v. Laidler, 94 N. Y. 145 (1883). The presence of the corporate seal on a document is prima facie proof that it was executed by proper authority. Quackenboss v. Globe & R. F. Ins. Co., 177 N. Y. 71 (1904), revsg. 77 App. Div. 168; Gause v. Commonwealth Trust Co., 124 App. Div. 438 (1908). An instrument or writing duly executed, in the corporate name of a corporation, which shall not have adopted a corporate seal, by the proper officers of the corporation under their private seals, shall be deemed to have been executed under the corporate seal. General Construction Law, § 45. Power to Hold Property. As to maximum limit of property that may be held by a non- stock corporation see the next succeeding section. No such limit is prescribed for stock corporations. See Membership Corporations Law, § 18, and notes thereunder, for a full discussion of this subject, A corporation cannot take and hold property by devise or be- quest beyond the maximum permitted by its charter, or the stat- tte under which it is organized. McGraw v. Cornell Univ., 111 N. Y. 66 (1888). A corporation, although created only for a term of years, may purchase and hold lands in fee. Nicoll v. N. Y. & Erie R. R. Co.,, 12 N. Y. 121 (1854); Peo. v. O’Brien, 111 N. Y. 1, 38 (1888). Where a corporation is authorized, under certain circumstances, to hold and convey real property, it will be presumed, in the absence of proof to the contrary, that real property conveyed by GENERAL CORPORATION Law. 21 it was held and conveyed in pursuance of its powers. Farmers’ Loan & Trust Co. v. Curtis, 7 N. Y. 466 (1852). When property or rights have been acquired or become vested, no amendment or alteration of the charter can take away the property or rights which have become vested under a legitimate exercise of the powers granted. Albany R. R. Co. v. Brownell, 24 N. Y. 345; Peo. v. O’Brien, 111 N. Y. 1; id., 111 N. Y. 52 (1888); Lord v. Equitable Life Assur. Soc., 194 N. Y. 212 (1909), affg. 109 App. Div. 252 and 47 Misc. 187. 4. See § 34. By-Laws. Directors may make necessary by-laws, subject, however, to the by-laws duly adopted by the members of the corporation. See § 34, post. For particular provisions relating to by-laws of mem- bership and religious corporations, see sections 8 and 5, respec- tively, of such laws, and cases there cited. A by-law must be reasonable, and adapted to tue purposes of the corporation, or it is void. Peo. v. Medical Soc. 24 Barb. 570 (1857); see also Matthews v. Associated Press, 136 N. Y. 333 (1892); Compton v. The Chelsea, 128 N. Y. 537 (1891); Kent v. Quicksilver Mining Co., 78 N Y. 159 (1879). The term “existing law” as used in subd. 5, regulating the power to make by-laws, refers not only to statutes but to decisions of the court. Raub v. Gerken, 127 App. Div. 42 (1908). A by-law, enacted under express authority of an act of the Legislature, and in conformity with the power conferred, has the same force as if enacted by the Legislature. Brick Church v. Mayor, etc., of New York, 5 Cow. 538 (1826); McDermott v. Board of Police, 5 Abb. Pr. 422 (1857); Timolat v. Held Co., 17 Misc. 556 (1896). A provision of the by-laws must be strictly complied with. Mat- ter of Keller, 116 App. Div. 58 (1906). Where the certificate of incorporation of a benevolent society refers to its laws and rules and a member, upon joining it, agrees in writing to conform to them, its by-laws become part of the contract. French v. Society of Select Guardians, 23 Misc. 86 (1808). A contract by a treasurer in disregard of a by-law restricting the execution of such a contract is not binding on the corpora- tion. Parmelee v. Associated Physicians & Surgeons, 9 Misc. 458. An action to have a by-law declared illegal is not maintainable when its enforcement will not subject the party to irreparable injury. Thomas v. Musical Mut. Pro. Union, 121 N. Y. 45 (1890). Under subdivision 5 above, daily publication of the by-law is not intended. Publication once a week for two weeks is sufficient. {Wood v. Knapp, 100 N. Y. 109 (1885). It is not necessary that publication should be made on the same day of each week; it is sufficient if made on any day of each week for the requisite num- ber of weeks. Id. 22 GENERAL CorporaATION Law. Power to Sue. No provision relative to suits was included in the above section, because contained in the State Constitution, article 8, section 3, as follows: “All corporations shall have the right to sue and shall be subject to be sued in all courts in like cases as natural persons.” : § 12. Enlargement of limitations upon the amount of the property of non-stock corporations. If any general or spe- cial law heretofore passed, or any certificate of incorpora- tion, shall limit the amount of property a corporation other than a stock corporation may take or hold, such corpora- tion 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 increase in value arising otherwise than from improve- ments made thereon shall be taken into account. Thus am’d by L. 1911, ch. 581. Formerly § 12, added by L. 1802, ch. 687, as am’d by L. 1804, ch. 400; re-enacted by L. 1909, ch. 28, as am’d by L. 1909, ch. 276. As to what are classified as stock and non-stock corporations, respectively, see §§ 2 and 3, ante. The amendment of 1909 increased the maximum of holdings from three to six millions and amount of yearly income from five to six hundred thousand dollars. The amendment of 1911 further increased such maximum to ten millions and the amount of yearly income to one million dollars. For a discussion of the effect of the limitations of this section, see the notes to Membership Corporations Law, § 18, post. § 13. Acquisition of additional real property. When any corporation, 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. Formerly L. 1890, ch. 563, § 10, as am’d by L. 1892, ch. 687, § 13; L. 1906, ch. 228. GENERAL Corporation Law. 23 It seems that this provision is to be read in connection with the preceding section only. The words “notwithstanding any restriction of a general or special law” were inserted by L. 1892, ch. 687, and the words “except a life insurance corporation” by L. 1906, ch. 228. As to effect of a conflicting provision in another law, see § 321 of this law. § 14. Acquisition of property without the state. Any domestic corporation transacting business in other states or foreign countries may acquire and dispose of such prop- erty as shall be requisite for such corporation in the con- venient transaction of its business. Any domestic corpora- tion establishing or maintaining a charitable, philanthropic or educational institution within this state may also carry on its work and establish or maintain one or more branches of such institution 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 country and for either of said purposes may take by devise or bequest, hold, pur- chase, mortgage, sell and convey or otherwise dispose of such real and personal property without this state as may be requisite therefor. But nothing in this section contained shall be construed as exempting from taxation property to any additional amount than is now allowed to such corpora- tion under existing laws. Formerly L. 1890, ch. 563, § 11, as am’d by L. 1892, ch. 687, § 14; L. 1893, ch. 178. / Any corporation acquiring property in other States or foreign countries should consult the statutes of the State or country in which the property is located. A corporation of this State can exercise no power in another State without the sanction of such State. Runyan v. Lessee of Coster, 14 Peters (U. S.) 122 (1840); Demarest v. Flack, 128 N. Y. 205 (1891); Hickory Farm Oil Co. v. Buffalo, etc, R. R. Co., 2 Ry. & Corp. L. J. 470. Every power which a corporation exercises in another State depends for its validity upon the laws of the sovereignty in which it is exercised, and a corporation can make no valid contract with- out the sanction, express or implied, of such sovereignty. Runyan v. Lessee of Coster, 14 Peters (U. S.) 129 (1840); Briscoe v. Southern Kansas Ry. Co., 40 Fed. Rep. 280 (1889). 24 GENERAL CorporaTION Law. If such other State does not permit the corporation to acquire or hold real property, it must be expressed in some affirmative way. It cannot be inferred. Cowell v. Springs Co., 100 U. S. 55 (1879); Christian Union v. Yount, 101 U. S. 352 (1879). The comity between the States raises the presumption that a- corporation of one State, not forbidden by the law of its being, may acquire property in another State, unless it is prohibited from so doing either directly by statute or by public policy de- ducible from the general course of legislation or from the settled adjudication of its highest court. Cowell v. Springs Co., 100 U. S. 55 (1870); Christian Union v. Yount, 1o1 U. S. 352 (1879). § 15. Certificate of authority of a foreign corporation. No foreign stock corporation other than a moneyed cor- poration 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 corpora- tions so incorporated for such kinds of business respec- tively. The secretary of state shall deliver such certificate to every such corporation so complying with the require- ments of law. No foreign stock corporation doing busi- ness 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 certificate. This prohibition shall also apply to any assignee of such foreign stock corporation and to any person claim- ing 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 corporation, other than a moneyed or insurance cor- poration, with the word “trust,” “bank,” “banking,” “in- surance,” “assurance,” “indemnity,” “guarantee,” “guar- anty,” “savings,” “investment,” “loan” or, “benefit” as a part of its name. GENERAL CorporaTION Law. 25. Former § 15, added by L. 1892, ch. 687, as am’d by L. rgo1, ch. 96 and ch. 538; L. 1904, ch. 490. The foregoing section and the next succeeding section have no application to membership or religious corporations, but apply to stock corporations only. § 16. Proof to be filed before granting certificate. Before granting such certificate the secretary of state shall re- quire every such foreign corporation to file in his office a sworn copy in the English language of its charter or cer- tificate 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 carry- ing 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 busi- ness 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 corporation 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 does not within thirty days after such death or removal or revoca- tion 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 26 GENERAL CORPORATION Laws; against the corporation in an action upon any liability in- curred 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 secretary of state shall forthwith mail a copy of such notice to such corpora- tion if its address, or the address of any officer thereof, is known to him. The secretary of state may require the exe- cution of any such designation, revocation or consent, to be authenticated as he deems proper, and he may refuse to file it without such authentication. Formerly § 16, added by L. 1892, ch. 687, as am’d by L. 1895, ch. 672; part of subd. 2, § 432, Code Civ. Pro., incorporated by L. 1909, ch. 28. Sections 15 and 16 have no application to membership or re- ligious corporations, but apply to stock corporations only. § 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 cor- poration or authorized to make loans upon pledges or de- posits, in the office of the superintendent of banks, and if an insurance corporation in the office of the superintendent of insurance, the documents described in section eighteen of this chapter, and such documents shall be recorded as original certificates of incorporation are required by law to be recorded. The fees for filing and recording such docu- ments, 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. e New; formerly L. rg00, ch. 733, § 1. § 18. Papers to be filed upon reincorporation. The docu- ments 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 GENERAL CorporaTION Law. 27 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 is 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 filed that the charter, certificate of incorporation or other constituent document, with its proposed amendments, if any, as filed, is in all respects con- sistent with the laws of this state relating to domestic cor- porations of the same class; that the corporation applicant has complied with all conditions imposed by its laws upon domestic corporations of the same class beginning business in this state, with the exception of any provisions concern- ing 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, includ- ing the tax, if any, imposed by this state upon the original incorporation of a company of the same class. New; formerly 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 cor- porations 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 *So in the original. 28 GENERAL CORPORATION Law. years to terminate its corporate existence derived from any, other state, by surrender of its charter or by dissolution. New; formerly L. 1900, ch. 733, § 3. § 20. Acquisition of real property in this state by certain foreign corporations. Any foreign corporation doing busi- ness 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 borders the United States of America and which by its laws confers similar privileges on corpora- tions 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 convey the same by deed or otherwise in the same manner as a domestic corpora- tion. Formerly § 20, L. 1890, ch. 563, as am’d by L. 1892, ch. 687, § 17. Thus am’d by L. 1g10, ch. 68. By the amendment of 1910 the right of a foreign corporation to hold real property in this State is made dependent upon the existence of a reciprocal right in the State of its domicile. This section permits corporations organized under the laws of any State or Territory of the United States to acquire real estate here for its corporate purposes, and convey the same in like man- ner as a domestic corporation. See Chautauqua Co. Bk. v. Risley, 19 N. Y. 369 (1859); Moss v. Averell, 10 N. Y. 449 (1853). The power of corporations to take and hold property depends upon their charters. The law of this State cannot enlarge or change the powers of a foreign corporation. They are solely those given by the law of domicile. Foreign corporations are permitted by comity to exercise their powers within this State, when not in contravention of our statutes or public policy. In re Estate of Prime, 136 N. Y. 347 (1893). The courts of this State will not interfere with the internal ad- ministration of the affairs of a foreign corporation. Fisher v. Charter Oak Life Ins. Co. 52 Super. Ct. 179 (1885); Berford v. N. Y. Iron Mbue. 56 Super. Ct. 236 (1888). § 21. Acquisition by foreign corporation of real property in this state. Any foreign corporation may purchase at a: sale upon the foreclosure 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 GENERAL Corporation Law. 29 this state covered by or subject to such mortgage, judg- ment, decree or settlement, and may take by devise any real property situated within this state and hold the same for not exceeding five years from the date of such pur- chase, 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. Formerly § 13, L. 1890, ch. 563, as am’d by L. 1892, ch. 687, § 18; L. 1894, ch. 136. By the amendment of 1894 the provision was inserted extending to foreign corporations the right to acquire real property by de- vise. The effect of the foregoing section upon the right of a foreign religious corporation to sell real property without leave of court is discussed but not determined in Muck v. Hitchcock, 149 App. Div. 323 (1912). § 22. Prohibition of banking powers. No corporation, domestic or foreign, other than a corporation formed under or subject to the banking laws of this state or of the United States, except as permitted by such laws, shall by any im- plication 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, 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 ser- vice upon the lines of such railroad companies, or a trans- atlantic steamship company, or a telegraph company, or a corporation incorporated prior to the year eighteen hun- dred and fifty, to promote the welfare of emigrants, possess the power of receiving money for transmission or of trans- mitting the same, by draft, traveler’s check, money order or otherwise. Formerly § 14, L. 1890, ch. 563, as am’d by L. 1892, ch. 687, § 19; L. 1904, ch. 236. : Thus am’d by L. 1911, ch. 771, which added the last clause. § 23. Qualification of members as voters. Unless other- wise provided in the certificate of incorporation, every stock- 30 GENERAL CORPORATION Law. holder of record of a stock corporation shall be entitled at every meeting of the corporation 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 corpora- tion every member, unless disqualified by the by-laws, shall be entitled to one vote. The stockholders of a stock cor- poration, by a 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 be- tween 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 payment of neces- sary 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 chal- lenged to vote at such meeting, and all persons who may appear from such books to be members of the corporation may vote at such meeting in person or by proxy, subject to the provisions of this chapter. Formerly La@189o, ch. 563, § 20, part, as am’d by L. 1892, ch. 687; L. 1901, ch. 355. The other parts of former section 20 are now §§ 24 and 25. In case of a disputed corporate election any person aggrieved may make application to the Supreme Court for relief. See § 32 of this law. If votes erroneously rejected would have elected a certain ticket, the election will be set aside. In re Long Island R. R. Co. 19 Wend. 37 (1837); Ex parte Murphy, 7 Cow. 153 (1827). GENERAL. Corporation Law. 3r No member is bound to vote for a larger number of directors. than he chooses. Vandenburgh v. Broadway Ry. Co., 29 Hun 356 (1883). § 24. Cumulative voting. The certificate of incorpora- tion of any stock corporation may provide that at all elec- tions 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. Formerly part of § 20, L. 1890, ch. 563, as am’d by L. 1892, ch. 687, as am’d by L. 1go1, ch. 355. Other parts of former § 20 are now §§ 23 and 25. § 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 exceeding 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 there- upon may participate in the terms, conditions and privileges of such agreement; the certificates of stock so transferred shall be surrendered and canceled and certificates 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 agree- 32 GENERAL Corporation Law. ments specified; a duplicate of every such agreement shall be filed in the office of the corporation where its principal business is transacted and be open to the inspection of any stockholder, daily, during business hours. Formerly part of § 20, added by L. 1901, ch. 355. Other parts of former § 20 are now §§ 23 and 24. § 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, clérk, teller or bookkeeper of a corporation formed under or subject to the banking law shall act as proxy for any stockholder at any meeting of any such cor- poration. Every proxy must be executed in writing by the member himself, or by his duly authorized attorney. No proxy here- after 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 members, and the length of time for which proxies may be executed. Formerly L. 1890, ch. 563, § 21, as am’d by L. 1892, ch. 687. For forms of proxies, see post, Forms Nos. 2 and 3. Members of a religious corporation are prohibited by this sec- tion from voting by proxy, but proxies may be lawfully given for meetings of membership corporations under the provisions of the foregoing section. Inspectors of election have no power to determine the genuine- ness of a proxy. If it is apparently the act of a member and regu- lar upon its face, that is sufficient so far as the inspectors are concerned. In re Cecil, 36 How. Pr. 477 (1869). See, also, In re White v. N. Y. State Agl. Soc. 45 Hun 580 (1869). § 27. Challenges. Every member of a corporation offer- ing to vote at any election or meeting of the corporation shall, if required by an inspector of election or other officer GENERAL CorporaTion Law. 33 presiding at such election or meeting, or by any other mem- ber 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 promise 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 consid- eration therefor.” Any person offering to vote as proxy for any other person shall present his proxy and, if so re- quired, 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 consideration therefor.” The inspectors or persons presiding at the election may ad- minister such oath, and all such oaths and proxies shall be filed in the office of the corporation. Formerly § 22, as am’d by L. 1892, ch. 687; L. 1895, ch. 672; L. 1901, ch. 355. An amendment of 1901, ch. 355, simplified the form of oath to be taken by a challenged voter and conformed the section to the modified provisions of section 23. For forms under this section, see post, Forms Nos. 4 and 5. § 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 dis- solved; but every director shall continue to hold his office and discharge his duties until his successor has been elected. Formerly L. 1890, ch. 563; § 18, as am’d by L. 1892, ch. 687, § 23. Provisions in statutes and by-laws requiring election on a speci- fied day are directory, and the election may be held at a later day. Beardsley v. Johnson, 121 N. Y. 224 (1890); St. George Vineyard Co. v. Fritz, 48 App. Div. 233 (1900). Officers holding over, at the end. of their term of office, and con- tinuing to act are directors de jure until their successors are chosen. Phila. & Rdg. C. & I. Co. v. Hotchkiss, 82 N. Y. 474 (1880). Directors are not bound to hold over until their successors are elected. Unless they choose to act, their offices become vacant 34 GENERAL CorPorATION Law. at the end of the term. Van Amburgh v. Baker, 81 N. Y. 46 (1880), 82 N. Y. 474, supra. The continuous neglect of a corporation for a number of years to hold any election of officers affords a proper case for the issue of a mandamus. People ex rel. Walker v. Albany Hospital, 11 Abb. Pr. (N. S.) 4 (1871). See, also, People v. Twaddell, 18 Hun 427 (1879); In re Vandenburgh v. Broadway Ry. Co., 29 Hun 348 (1883). See, also, 38 App. Div. 159. In regard to vacancies in the board of directors of a member- ship corporation, see Membership Corporations Law, § 10, post. As to certain religious corporations, see Religious Corporations Law, §§ 43, 60, 138, 168, 182, and 199. § 29. Mode of calling special election of directors. If the election 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 directors. 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 pur- pose 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 preceding 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. _ Formerly L. 1890, ch. 563, § 24, as am’d by L. 1892, ch. 687. For form of notice of special election, see post, Forms Nos. 6 and 7. By-laws regulating election to be published. Gen. Corp. Law, § 11, subd. , ante. Failure to give notice as required by this section is ground for setting the election aside. Matter of Keller, 116 App. Div. 58 (1907). § 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 prin- GENERAL CorPoraTION Law. 35 cipal 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, village or town where such office or place is or was located. At such meeting the members attending shall constitute a quorum. They may elect inspectors of election and direc- tors and adopt by-laws providing for future annual meet- ings 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. Formerly L. 1890, ch. 563, § 25, as am’d by L. 1892, ch. 687. § 31. Qualification of voters and canvass of votes at spe- cial election. 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 cor- poration, 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 certificate of the result of the election, verified by them, in the office of the clerk of the county in which such elec- tion is held, and the persons so elected shall be the direc- tors of the corporation. Formerly § 26, as am’d by L. 1892, ch. 687. For form of sworn statement of voter, see post, Form No. 8. § 32. Powers of supreme court respecting elections. The supreme 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 matter touching 36 GENERAL CorporaATION Law. 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 parties, or otherwise inquire into the matters or causes of com- plaint, and establish the election or order a new election, or make such order and give such relief as right and justice may require. Formerly § 15, L. 1890, ch. 563, as am’d by L. 1892, ch. 687, § 27. For forms under the above section, see Forms Nos. 82 and 83. As to general power of visitation of the supreme court over membership corporations, see the Membership Corp. Law, § r6. Scope of Section. This provision vests the court with power to inquire into elec- tions or appointments by a board of directors, and does not limit the power to elections by members of the corporation. Matter ‘of Ringler & Co., 204 N. Y. 30 (1912). This. section only authorizes an application to the court to estab- lish or set aside an election in a summary way, and not by man- damus. Peo. ex rel. Putzel v. Simonson, 61 Hun 338 (1891); In re The Argus Co. v. Manning, 138 N. Y. 557 (1893). The court has power to annul the election of an ineligible trustee, and it is not necessary that the Attorney General should proceed under section 1948 of the Code of Civil Procedure. Mat- ter of Northern Dispensary, 26 Misc. 147 (1899). This proceeding and the one under the Code (§§ 1948-1956) are exclusive of all other methods of testing the legality of an election. H. R. & W.S. R. R. Co. v. Kay, 14 Abb. Pr. (N. S.) 191 (1873). Right to Apply for Relief. Where one set of directors claim to be de facto in office, and have possession of corporate books and assets, and a rival board, claiming to be directors de jure, are seeking to obtain possession of the corporate assets, a court of equity will interfere. Model Bldg. & Loan Assn. v. Patterson, 12 Misc. 400 (1895). See,. also, Reis v. Rhode, 6 Civ. Pro. 406, s. c. 34 Hun 161 (1884); Ciancimino v. Man, 1 Misc. 121 (1892), and cases cited. Procedure. Order to show cause in proceedings under this section may be granted by justice of the Supreme Court out of court. In re Argus Co. v. Manning, 138 N. Y. 557 (1893). All the persons complaining should be named and the alleged irregularities set out. In re Mohawk & H.R. R. R. Co., 19 Wend. 135. (1838). Notice to persons who claim to be elected and to the corpora- GENERAL CoRPORATION Law. 37 tion is sufficient. In re Schoharie Valley R. R. Co., 12 Abb. Pr. N. S. 394 (1872). The corporation must be a party and is entitled to notice. In re Pioneer Paper Co., 36 How. 111 (1865). The objections upon which proceedings are based should be taken at the time of the election. In re Lighthall Mfg. Co., 47 Hun 258 (1888). See, also, Matter of L. I. R. R. Co. 19 Wend. 37 (1838); In re U. S. Cremation Co., 46 St. Rep. 135 (1802); Van- denburgh v. Broadway Underg. C. Ry. Co., 29 Hun 348 (1883). Power of Court. The court may go behind entries in the transfer book and de- termine whether a transfer appearing thereon was a sale or only a pledge. Strong v. Smith, 15 Hun 222, affd., 80 N. Y. 637 (1880); Matter of Elias, 17 Misc. 718 (1806). The court cannot compel inspectors to count votes which they have erroneously refused. The only relief is to order a new elec- tion if justice requires it. Peo. ex rel. Putzel v. Simonson, 61 Hun 338 (1891). When a voter presents his ballot he does all that the law re- quires him to do. It is then the duty of inspectors to credit him with the votes to which the books show that he is entitled. Mat- ter of Mutual Fire Ins. Co., 51 App. Div. 163 (1900). The fact that qualified persons were permitted to vote after the hour for closing had expired does not vitiate election. Rudolph v. Southern Beneficial League, 23 Abb. N. C. 199 (1889). The receipt of illegal votes in favor of one who has received a majority of legal votes cast will not defeat his election. People v. Tuthill, 31 N. Y. 550 (1864). In re Argus Co. v. Manning, 138 N. Y. 557 (1803). See, also, Matter of Utica Fire Alarm Tel. Co., 115 App. Div. 821 (1907). Where inspectors reject ballots, thereby causing no choice, a new election was properly had. Peo. ex rel. Thorn v. Pangburn, 3 App. Div. 456 (1896). Application to Religious Corporations. There appears to be no decision making the above section 32 applicable to religious corporations. However, in Matter of Ringler 204 N. Y. at p. 40 (1912), Judge Werner, speaking for a unanimous court, after reviewing the history of the section and pointing out that the words “of any corporation” were added by the General Corporation Law of 1890 (L. 1890, ch. 563, § 15) said: “This history of the statute would seem to indicate that these added words ‘of any corporation’ were not intended to limit the meaning and effect of the earlier phrase ‘any elec- tion,’ but rather to broaden the statute so as to give the court power to investigate elections in any of the corporations be- longing to either ofsthe classes enumerated in the revised cor- poration laws of 1890.” Religious Corporations were so enumerated. It is also to be noted that in Matter of Empire State Supreme Lodge, 118 App. 38 GENERAL CorPoRATION Law. Div. 618; the statute was held applicable to non-stock corporations. It is therefore apparent that the above section 32 is applicable to religious corporations. See also, Peo. ex rel. Wilson v. African M. E. Church, 141 N. Y. Supp. 304 (1913). § 33. Stay of proceedings in actions collusively brought. If an action is brought against a corporation by the pro- curement or default of its directors, or any of them, to en- force any claim or obligation declared 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 obliga- tion, any member of the corporation may apply to the su- preme court, upon affidavit, setting 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 pro- ceedings. Formerly L. 1890, ch. 563, § 16, as am’d by L. 1892, ch. 687, § 28. See, also, Penal Law, § 665, subd. 5 post. A stay of proceedings will not be granted unless it is shown that actions were collusively brought in the pecuniary interest of a director. Matter of Gardner, 86 Hun 30 (1895). As to what matters are sufficient to constitute a cause of action, see Phenix Nat. Bk. v. A. B. Cleveland Co., 34 St. Rep. 498 (1890); Meyers v. Scott, 20 St. Rep. 35. When injunction pendente lite is proper. Hoyt v. Malone, 31 St. Rep. 739 (1890). § 34. Qugrum 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 trans- action of business and the act of a majority of the directors GENERAL CorPoRATION Law. 39 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. ; Formerly L. 1890, ch. 563, § 29, as am’d by L. 1892, ch. 687; L. 1901, ‘ch. 214; L. 1904, ch. 737. Prior to the Consolidation Act (L. 1909, ch. 28), the second sentence in this section began thus: “Unless otherwise provided (by law) a majority of the board of directors,” etc., the words “by law” having been dropped in the act of 1909. The last sentence but one was inserted by L. 1904, ch. 737. At least two directors were required to be residents of the State prior to L. 1901, ch. 214. Now one is sufficient under the above section. A majority of a quorum of the board may act. Gen. Corp. Law, § 43, post. The members of the corporation may make the by-laws. Gen. Corp. Law, § 11, subd. 5. Powers of Directors. All powers directly conferred by statute, or impliedly granted, of necessity, must be exercised by the directors who are consti- tuted by the law as the agency for the doing of corporate acts. Beveridge v. N. Y. Elev. R. R. Co., 112 N. Y. 22 (1889); Leslie v. Lorillard, 110 N. Y. 519 (1888); People’s Bank v. St. Anthony R. C. Church, 109 N. Y. 512 (1888). Directors are authorized to manage the affairs of the corpora- tion, audit and pay its debts, and make contracts within the ordi- nary scope and business of the corporation. Kelsey v. Sargent, 40 Hun 150 (1886). Election by De Facto Directors. Persons elected as directors by other directors, themselves not qualified to act as such, acquire no right or title to the office as against the corporation or its members. Matter of Ringler & Co., 204 N. Y. 30 (1912). They are themselves de facto officers, re- movable in a direct proceeding brought for that purpose. Id. The acts of de facto directors are valid. Lord v. Equitable Life Ins. Co., 57 Misc. 417, affd., 126 App. Div. 937, affd., 194 N. Y. 225 (i909). Directors to Act as a Board. The collective authority of the directors, acting as a board, is necessary, in order to bind the corporation by the action of the 40 GENERAL CorroraTIOoN Law. directors. Cammeyer v. Churches, 2 Sandf. Ch. 186 (1844); Con- stant v. Rector, 4 Daly 305. Directors have no separate or individual authority to bind the corporation, and this, although a majority of the whole number acting singly and not collectively as a board should assent to the particular transaction. Such action must be taken at a meeting of the board. People’s Bank y. St. Anthony’s Church, 109 N. Y. 512, affg., 39 Hun 498 (1888). Directors Cannot Vote by Proxy. No director can vote at a meeting of the board of directors by proxy. Craig Med. Co. v. The Merchants’ Bank of Rochester, 59 Hun 561 (1881). Executive Committee, Powers of. The board of directors may appoint an executive committee of its own members with power to transact its business during the intervals between the meetings of the board. Olcott v. Tioga R. R. Co., 27 N. Y. 546 (1863); Sheridan Elec. L. Co. v. Chatham Nat. Bank, 127 N. Y. 517 (1891); First Nat. Bank v. Com’l Trav- elers’ Home Assn., 108 App. Div. 78 (1905), affd., 185 N. Y. 575. As to authority to appoint an executive committee, see also Gause v. Commonwealth Trust Co., 124 App. Div. 438 (1908); In re Em- pire State Supr. Lodge, 118 App. Div. 616 (1907); Mills v. U. S. Printing Co., 99 App. Div. 605 (1904). The board may delegate its authority to agents, or to a quorum composed of less than a majority of the number. Hoyt v. Thomp- son’s Executor, 19 N. Y. 207 (1859). Resignation of Directors. Where all the officers and all the directors of an insolvent cor- poration resign for the purpose of procuring the appointment of a receiver under the Code, § 1810, subd. 3, authorizing ‘an action “to preserve the assets of a corporation having no officers to hold the same,” such resignations are neither legal nor effective. Al- though the provision is broad enough to cover any case in which a corporation is without officers, it was not designed to permit officers to abdicate their functions for the purpose of shifting their burdens to the courts. Zeltner v. Zeltner Brewing Co., 174 N. Y. 247 (1903), affg. 79 App. Div. 136; Yorkville Bank v. Same, 80 App. Div. 578 (1903), appeal dismissed, 178 N. Y. 572. The acceptance of the resignation of a director of a corporation is ordinarily “not essential to its effectiveness. Manhattan Co. v. Kaldenberg, 165 N. Y. 1 (1900), revsg. 27 App. Div. 31; Noble v. Euler, 20 App. Div. 548 (1897); Wilson v. Brentwood Hotel Co., 16 Misc. 48 (1896), and cases cited supra. The acceptance by the board of directors of the resignation of a duly elected director, after he had withdrawn the same, and a refusal to recognize him as a director, does not authorize the court to enjoin him from acting, nor to compel the recognition of the GENERAL CorrPorATION Law. 4I tival claimant. Moir v. Provident Savings Life Assur. Soc., 127 App. Div. 591 (1908). Removal of a Director. Respecting the removal of a director for misconduct, etc., see Gen. Corp. Law, §§ 90, 91, and 307, and notes thereunder. § 35. Directors as trustees in case of dissolution. Upon the dissolution of any corporation, its directors, unless other persons shall be appointed by the legislature, or by some court of competent jurisdiction, 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 expenses. 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 person- ally liable to its creditors, stockholders or members, to the extent of its property and effects that shall come into their hands. Farmerly L. 1890, ch. 563, § 30, as am’d by L. 1802, ch. 687. The foregoing section empowers directors to act as trustees for settlement of its affairs in case of the termination of cor- porate existence by limitation, or in case of dissolution, when no others are appointed to act as trustees for the purpose of wind- ing up its affairs. For provisions as to judicial proceedings for voluntary and in- voluntary dissolutions, see Articles 6,:8 and 9, post. § 36. Forfeiture for non-user. 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. Formerly L.-1890, ch. 563, § 21, as am’d by L. 1802, ch. 687, § 30. By L. 1892, ch. 687, the period within which a corporation is compelled to exercise a user of its corporate rights and franchises was changed from one year to two years. § 37. Extension of corporate existence. Any domestic 42 GENERAL CorporaATION Law. corporation at any time before the expiration thereof, may extend the term of its existence beyond the time specified in its original certificate of incorporation, 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 consent 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 annual meetings of the cor- poration ; 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 if a corporation formed under or subject to the banking law shall be filed in the office of the superintendent of banks, if an insurance corporation, in the office of the superintendent of insurance, and other- wise in the office of the secretary of state, and shall by such officer be duly recorded and indexed in a book specially provided therefor, and a certified copy of such cer- tificate, with a certificate of such officer 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 prin- cipal place of business, and shall be noted in the margin of the record of the original certificates of such corporation, if any, in such offices, and thereafter the term of the exist- ence of such corporation shall be extended as designated in such certificate. The certificate of incorporation of any corporation whose duration is Nmited by such certificate or by law, may re- quire that the consent of the stockholders owning a greater percentage than two-thirds of the stock, if a stock corpora- tion, 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. GENERAL CorPoRATION Law. 43 Part of former § 32, as am’d by L. 1802, ch. 687; L. 1900, ch. 177; L. 1901, ch. 355; L. 1905, ch. 256, and L. 1913, ch. 306. The other parts of former § 32 are now §§ 38, 30, 40, and 41. As amended in 1901, this section provides that the extension of existence may be made at any time before the expiration of the charter, and that the consent may be in writing, or may be given at a special meeting of the stockholders called for that purpose. These two alternative methods are in lieu of the former provision whereby the extension could only be effected by the filing of a written consent, within three years before the expiration of the corporate existence. Neither the Membership Corp. L. nor the Religious Corp. L. contains provisions requiring the period of existence to be fixed; therefore, pursuant to Gen. Corp. Law, § 11, the duration would be perpetual and no application for extension need be made, ex- cept in the case of corporations having special charters contain- ing a fixed period of existence. § 38. Revival of corporate existence. If the term of ex- istence 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, or, 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 unsatisfied or unpaid, the supreme court may, upon the application of any person in- terested and upon such notice to such other parties as the court may require, by order, authorize the filing and record- ing of a certificate reviving the existence of such corpora- tion, upon such conditions and with such limitations as such order shall specify, and extending such corporate ex- istence 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 expiration 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 44 GENERAL CorpPoRATION Law. order, but such revival and extension shall not affect any litigation commenced after such expiration and pending at, the time of such revival. Part of former § 32, as am’d by L. 1892, ch. 687; L. 1900, ch. 177; L. roo1, ch. 355; L. 1905, ch..256. The other parts of former § 32 are now §§ 37, 39, 40, and 41. a Thus am’d by L. 1911, ch. 63, by which was added the provision relating to a bank. See note to § 37, ante. § 39. Approval of certificates of extension or revival; when required. In the case of a corporation formed under or subject to the banking law, no certificate of extension or revival shall be filed or recorded unless it shall have in- dorsed 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 superin- tendent of insurance; and, if a turnpike or bridge corpora- tion, 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. Part of former § 32, as am’d by L. 1892, ch. 687; L. 1900, ch. 177; L. 1901, ch. 355; L. 1905, ch. 256. The other parts of former § 32 are now §§ 37, 38, 40, and 41. § 40. Extension when stock is owned by another corpo- ration. If all the stock of a corporation other than a cor- poration formed under or subject to the banking law, or an insurance corporation, or a turnpike, plank-road or bridge corporation shall be lawfully owned by another stock cor- poration 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 corpora- tion, by filing in the office or offices in which the original certificate or certificates of incorporation of the first-men- tioned corporation were filed a certificate of such extension GENERAL Corporation Law. 45 executed by its president and secretary and by such cor- poration owning all the shares of its capital stock. Part of former § 32, as am’d by L. 1892, ch. 687; L. 1900, ch. 1773 L. 1901, ch. 355; L. 1905, ch. 256. The other parts of former § 32 are now §§ 37, 38, 30, and 41. § 41. Effect of extension. Every corporation extending its corporate 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, notwith- standing 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 corpora- tion for the purpose of carrying on the business in which it is engaged, and shall be subject to the provisions of such law. Part of former § 32, as am’d by L. 1892, ch. 687; L. 1900, ch. 177; L. 1901, ch. 355; L. 1905, ch. 256. The other parts of former § 32 are now §§ 37, 38, 39, and 40. § 42. When notice of lapse of time unnecessary. When- ever under the provisions of any of the corporate laws a corporation is authorized 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 with- out the lapse of any period of time, if such action be author- ized or approved, and such requirements be waived in writ- ing by every member of such corporation, or by his attorney ' thereunto authorized. Formerly § 38, added by L. 1895, ch. 672. The right to notice of a corporate meeting may be waived. Kenton Furnace R. & Mfg. Co. v. McAlpin, 5 Fed. 737 (1880). And notice will be deemed to have been waived if each stock- holder attends and participates in the action of the meeting. In such case they are estopped from denying its legality for want of notice. Id. For form of statement for insertion in certificate of proceedings as to waiver, see post, Form No. 9. For form of waiver of notice by members, see post, Form No. io. Action at a stockholders’ meeting is valid, though the statutory requirements as to notice and lapse of time are not complied with, ” if a waiver of such requirements is authorized in writing by every 46 GENERAL CorRPORATION Law. member of the corporation. Hallett v. Metropolitan Messenger Co., 69 App. Div. 258 (1902). § 43. As to acts of directors. Whenever, under the pro- visions of any of the corporate laws, a corporation is au- thorized to take any action by the agreement or action of its directors, managers or trustees, such agreement or ac- tion may be taken by such directors, regularly convened as a board, and acting by a majority of a quorum, except when otherwise expressly required by law or by the by- laws of the corporation and any such 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 without notice, any business may be transacted which might have been transacted if the meeting had been duly called. Ex- cept when otherwise 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 an- nual meeting thereof. Formerly § 39, added by L. 1895, ch. 672, as am’d by L. 1go1, ch. 355. The amendment of 1go1, ch. 355, consisted of the addition of the last two sentences. § 44. Political contributions prohibited; penalty. No corporation or joint-stock association doing business in this state, except a corporation 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 re- imbursement or indemnification of any person for moneys or property so used. Any officer, director, stockholder, at- GENERAL CorPorATION Law. 47 torney or agent of any corporation or joint-stock associa- tion which violates any of the provisions of this section, who participates in, aids, abets or advises or consents to any such violation, and any person who solicits or know- ingly 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 thou- sand 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 inves- tigation, 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 evidence, 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 concern- ing which he may so testify or produce evidence, docu- mentary or otherwise, and no testimony so given or pro- duced shall be received against him upon any criminal in- vestigation or proceeding. Formerly § 41, added by L. 1906, ch. 239. ARTICLE 3 * Change of Name Section 60. Petition 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 pro- ceeding. § 60. Petition by corporation to change name. A peti- tion to assume another corporate name may be made by * Consorrpators’ Note.—Code Civ. Pro., §§ 2411 to 2416, have been consoli- dated in this article so far as they relate to change of name of a corporation. The portions of these sections relating to the change of the name of an individual have been left in the Code of Civil Procedure. The last sentence has been omitted from section 63 because consolidated in County Law, § 161, subd. 6 48 GENERAL CorpoRATION Law. a domestic corporation, whether incorporated by a general or special law, to the supreme 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 bank- ing corporation, by the superintendent of banks; if an in- surance corporation, by the superintendent of insurance, and if a railroad corporation, by the public service com- mission. The petition to change the name of any other cor- poration 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. Formerly § 2411, Code Civ. Pro. Thus am’d by L. 1910, ch. 296. For forms of papers relative to change of name, see Forms Nos. 11- 14. A corporation cannot, in legal proceedings, be designated by two names, and cannot, except as authorized by law, change its name, either directly or by user, nor can the public give it a name other than that of its creation, by which it can be recognized in judicial proceedings. Matter of U. S. Mortgage Co., 83 Hun 572 (1895). Where a corporation changes its name pursuant to this section the new name selected must comply with Gen. Corp. Law, § 6, as amended by L. 1911, ch. 638. Matter of Wilmerding Hand Co., Spec. Term, N. Y. Co., N. Y. Law Journal, March 1, 1912. Where an order has been granted ex parte changing the name of a churclf and it thereafter appears that another religious body claims to be entitled exclusively to the name proposed to be changed, the court has inherent power to vacate the order grant- ing the petition, with leave to renew upon notice to the parties directly interested, although the statute does not provide for such ca Matter of Abyssinian Baptist Church, 13 Supp. 910 (1891). Changes of name of corporations subject to the provisions of GENERAL CorPoraTION Law. 49 the Education Law are to be effected under section 62 of said law, post. § 6x. Contents of petition. The petition must be in writ- ing, 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 pro- poses to assume, which must not be the name of any other corporation, or a name so nearly resembling it as to be cal- culated 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. Formerly part of § 2412, Code Civ. Pro. The other part of said section remains in the Code. § 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 cor- poration shall have a business office, or if it has no business office, of the county in which its principal corporate prop- erty is situated, or in which its operations are or thereto- fore have been principally conducted, which newspaper, if it be a banking corporation, shall be designated by the superintendent of banks, if an insurance 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. If the petition be made by a domestic corporation organized under or subject to the re- ligious or membership corporations law the court may dis- pense 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 50 GENERAL CorporaTION Law. 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 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 name or a name so nearly resembling it as to be calculated to deceive shall be given authority to do business in this state. ' Formerly § 2413, Code Civ. Pro., as am’d by L. 1894, ch. 264; L. 1904, ch. 110; L. 1909, ch. 28. Thus am’d by L. rg10, ch. 296. The clause empowering the court to dispense with publication of notice in the case of religious or membership corporations was added in 1910. - Prior to the enactment of the Consolidated Laws of 1909, sec- tion 2413 of the Code (now Gen. Corp. Law, § 62, supra) provided that notice should be published in the State paper, but this pro- vision has been omitted in the enactment of the foregoing section because the State paper was abolished by the Executive Law, § 74 (now 83), added by L. 1893, ch. 248. § 63. Order authorizing change. If the court to which the petition is presented is satisfied thereby, or by the affi- davit 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, if required by law, has been made, the courts shall make 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 incor- GENERAL CorporATion Law, 51 poration, 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 prop- erty 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, 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 in each week for four successive weeks. The court may dispense with the publication 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 do- mestic corporation organized under or subject to the re- ligious or membership corporations law. Formerly § 2414, Code Civ. Pro., as am’d by L. 1895, ch. 946. Thus am’d by L. 1910, ch. 296. § 64. When change to take effect. If the order shall be fully complied with, and within forty days after the mak- ing 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 as- sumed, and by no other name. No proceedings had prior to April fourth, eighteen hundred and ninety-four, under sections two thousand four hundred and fourteen and two thousand four hundred and fifteen of the code of civil pro- cedure for the change of the name of a corporation, shall be invalid by reason of the non-filing of an affidavit of the 52 GENERAL CorporaTIon Law. publication of the order changing such name within twenty days from the date thereof. And no proceedings heretofore had under the provisions of article three, chapter twenty-three, consolidated laws, for the change of the name of a corporation, shall be invalid by reason of the non-filing and recording of such affidavit of the publication of the order changing such name within forty days from the making of such order. Formerly § 2415, Code Civ. Pro., as am’d by L. 1894, ch. 264 and L. 1913, ch. 721. The last paragraph is new, added in 1913. § 65. Substitution of new name in pending action or proceeding. An action or special proceeding, civil or crim- inal, 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, impeded or im- paired in consequence of such change of name. The plain-' tiff in the action or the party instituting the special pro- ceeding, or the people, as the case requires, may at any time, obtain an order amending any of the papers or pro- ceedings therein, by the substitution of the new name, with- out costs and without prejudice to the action or proceeding. Formerly § 2416, Code Civ. Pro. ARTICLE 4 * Sale of Corporate Real Property Secrion 70. Application of this article. 71. Petition. 72. ape on application. 73. Order to sell, mortgage or lease. 74. Insolvent corporation. 75. Service of notices. 76. Practice in cases not herein provided for. * Consoripators’ Notr.—Code Civ. Pro., §§ 3390-3396, so far as they relate to proceedings for the sale of the real property of a corporation, have been con- solidated in this article, and the portion relating to the sale of the real property s2 joint-stock association has been consolidated in Joint-Stock Association Toe, GENERAL Corporation Law. 53 § 70. Application of this article. Whenever any cor- poration 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 pursuant to the pro- visions of this article. Formerly part of § 3390, Code Civ. Pro. The other part of former § 3390 is now in Joint-Stock Association Law, § 8. A conveyance or mortgage by a membership corporation, made without leave of court, may be subsequently confirmed as pre- scribed by the Membership Corporations Law, § 13; and as to re- ligious corporations defects in the original proceedings may be cured by a confirmatory order pursuant to the Religious Corpora- tions Law, § 12, as amended by L. 1912, ch. 290, and L. 1913, ch. 128. § 71. Petition. The proceeding shall be instituted by the presentation 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, trus- tees or managers, and of its principal officers, and their places of residence. 2. The business of the corporation or the object or pur- pose of its incorporation and a reference to the statute un- der which it was incorporated. 3. A description of the real property to be sold, mort- gaged 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 author- ized, by a vote of at least two-thirds of the directors, trus- tees 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 corporation and the cash value of its personal assets, and the total amount of its debts and liabilities, and how secured, if at all. 54 GENERAL CorporATION Law. 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 members of the corporation is required by law to be first obtained, a statement 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 an- nexed to the petition. g. A demand for leave to mortgage, lease or sell the real estate described. The petition shall be verified in the same manner as a verified pleading in an action in a court of record. Formerly § 3391, Code Civ. Pro. For forms under this article and under the Memb. Corp. L., § 13, and the Relig. Corp. L., § 12, including form of mortgage, see Forms Nos. 15-27, post. Statute Strictly Construed. Religious corporations have no inherent right to dispose of their property, and absolute compliance with the statute is neces- sary to the validity of a sale or mortgage. Madison Ave. Bap. Ch. v. Baptist Church, etc., 46 N. Y. 131 (1871); Dudley v. Congrega- tion, etc., of St. Francis, 138 N. Y. 451 (1893). A mortgage made without the court’s consent is void. Dudley v. Congregation, etc., of St. Francis, 138 N. Y. 451 (1893). Where an action is brought to foreclose a mortgage made with- out consent of court, and therefore void, the plaintiff cannot de- mand as a matter of right that the court of equity retain juris- diction to allow recovery on the bond. Dudley v. Congregation, etc.,, of St. Francis, 138 N. Y. 451 (1893). Jurisdiction of the court to authorize the sale depends upon the facts before the court when the order is made and cannot be upheld by proof of facts existing. which would have justified the order, but which were not before the court. Madison Ave. Bap. Ch. v. Oliver St. Bap. Ch. 73 N. Y. 82 (1878). The foregoing cases must be read in connection with section 13 of the Membership Corp. L. and section 12 of the Religious Corp. L. empoweripg the court to confirm unauthorized conveyances. Object of Requiring Consent. The consent of the court was deemed necessary for the pro- tection of those who are the real owners of the property, and to prevent a perversion of the corporate property. Matter of Re- formed Dutch Ch. of Saugerties, 16 Barb. 237, 241 (1853); Cong. Beth. Elohim v. Central Pres. Ch., 10 Abb. Pr. (N. S.) 484 (1871). It was not the purpose to confer any original power to control GENERAL Corporation Law. 55 or manage the property of religious societies. Wheaton v. Gates, 18 N. Y. 395, 401 (1858). Power of the Court: The court can only ratify or veto a proposed sale. It has no power to direct a sale against the will of the corporation. The fee is vested in the corporation, and the only restraint on its power to sell is the indispensable condition that an order authorizing the conveyance be first obtained. Matter of Reformed Dutch Ch. of Saugerties, 16 Barb. 237 (1853); Bowen v. Irish Pres. Ch. of City of N. Y., 6 Bosworth 245 (1860); Wheaton v. Gates, 18 N. Y. 395 (1858). Trustees May Apply. The proceedings may be instituted by petition of the trustees, although not authorized by a majority of the corporators, if such proceedings are authorized and carried on by a majority of the trustees. Madison Ave. Bap. Church v. Baptist Church, etc., 46 N. Y. 131 (1871); Matter of St. George’s M. E. Church, 21 Week. Dig. 81 (1884). When Leave Unnecessary. Where a testator devised certain real property to a corpora- tion and before his death contracted to sell the same property to a third party, the corporation may complete the contract and convey the property to the vendee without obtaining leave, for it is not selling its own property. Edelstein v. Hays, 50 Misc. 130 (1906). Where two corporations own real property jointly an action of partition will lie. Compliance with this section is only neces- sary in case of voluntary sales. N. Y. Home Missionary Soc. v. First Freewill, etc., Ch. & Soc. of Lawrence, 73 Misc. 128 (1911). Contract of Sale. The contract of sale may be entered into without the consent of the court, and it is sufficient if such consent is obtained before delivery of the deed. Cong. Beth. Elohim v. Central Pres. Church, 1o Abb. Pr. (N. S.) 484 (1871). Where the contract of sale en- tered into without the consent of the court does not provide that such consent shall be obtained, such condition will be implied. Cong. Beth. Elohim v. Central Pres. Church, 10 Abb. Pr. (N. S.) 484 (1871); Muck v. Hitchcock, 149 App. Div. 323 (1912). A con- tract entered into without the consent of court is not ultra vires. Cong. Beth. Elohim v. Central Pres. Church, 10 Abb. Pr. (N. S.) 484 (1871). The failure to file the court order consenting to the sale before tender of the deed is not ground for maintaining an action to recover a deposit where such objection was not raised when the deed was tendered, as it could have then been obviated. Cong. Beth. Elohim v. Central Pres. Church, 1o Abb. Pr. (N. S.) 484 (1871). 56 GENERAL CorPoRATION Law. An agreement signed by the chairman and recording secretary and sealed with the corporate seal will be presumed to have been authorized by the corporation. Bowen v. Irish Pres. Cong. of City of N. Y., 6 Bosworth 245 (1860). Purchase Money Mortgages. The foregoing section contains no express authority for the execution of a purchase money mortgage without obtaining the consent of court; yet, notwithstanding the omission of provisions of that character, it seems on principles of equity that a mort- gage to secure the purchase price of property might be executed without leave of the court. See Coman v. Lackey, 80 N. Y. 345 (1880); Farmers’ Loan & Trust Co. v. Equity Gas Light Co., 84 Hun 373 (1895); In re Beaver Knitting Mills, 154 Fed. 320 (1907). Under section 11 of the Act of April 5, 1813, being an act to provide for the incorporation of religious societies, which pro- vided that it shall be lawful for the chancellor to make an order for the “sale” of any real estate belonging to the corporation, it was held in South Baptist Society of Albany v. Clapp, 18 Barb. 35, 49 (1833), that an order was not necessary to enable a religious corporation purchasing land to execute a mortgage for the pur- chase price, the court saying: “T am satisfied such an order was never necessary to en- able a religious corporation purchasing land to execute a mortgage for the purchase money. The church never owns the land except subject to the mortgage. It was a question _of purchase rather than of sale. The statute is only applic- able to a case where the church is the owner of real prop- erty; and its object is that the court may control the dis- position of the proceeds, and prevent a misapplication of trust funds.” This case, however, cannot be deemed controlling authority under the present act, because in Manning v. Moscow Presbyterian * Society, 27 Barb. 52, it was held that under the act of 1813 a re- ligious corporation might execute mortgages to secure the pay- ment of debts without order of the court, the term “sale” in that act not including a mortgage, whereas the present statute ex- pressly prohibits the execution of a mortgage without leave of the court. The leading real estate title insurance companies in New York County are willing to insure purchase money mortgages of re- ligious and membership corporations executed without an order of court. Power to Extend Time. The trustees have power to agree to extension of time to de- liver the deed. Cong. Beth. Elohim v. Central Pres. Church. 10 Abb. Pr. (N. S.) 484 (1871). GENERAL CorporaTIon Law. 57 Canceling Unauthorized Conveyance. Where a conveyance is made without leave of court and the consideration has been paid the corporation on repaying such con: sideration may, nevertheless, have the conveyance canceled and annulled. Associate Presbyterian Cong. v. Hanna, 113 App. Div. 12 (1906); Madison Ave. Bap. Ch. v. Oliver St. Bap. Ch., 73 N. Y. 82 (1878). Disposition of Proceeds of Sale. The court cannot approve a plan to distribute the proceeds of sale among members, because such plan does not regard the in- terest of the corporation to continue for the purpose of its crea- tion. Such an order, if granted, is void. Wheaton v. Gates, 18 N. Y. 3905 (1858). Voluntary Dissolution. Under the guise of a sale of property the trustees cannot work a practical dissolution of the corporation by a distribution of the proceeds of sale amongst the members. Wheaton v. Gates, 18 N. Y. 395 (1858). Specific Performance. Where a contract of sale has been entered into and the con- sent of the court obtained the purchaser may maintain an action for specific performance. Bowen v. Irish Pres. Cong. of City of N. Y., 6 Bosworth 245 (1860). The fact that an injunction pendente lite has been granted against the corporation restraining a conveyance in a suit brought by members of the church, to which suit the vendee is not a party, is no defense to an action for specific performance. Bowen v. Irish Pres. Cong. of City of N. Y., 6 Bosworth 245 (1860). In an action for specific performance the court has power to inquire into the fairness of the contract and its advantage or dis- advantage to the corporation and to direct it to be made, where upon all the facts no valid reason appears for refusing such re- lief. Muck v. Hitchcock, 149 App. Div. 323 (1912). If specific performance is refused because the contract sought to be enforced is found disadvantageous to the corporation and no leave of court has been obtained, the corporation will not be relieved unless the amount paid on the contract is returned. If not returned, the purchaser will be held to have an equitable lien enforceable by sale. Muck v. Hitchcock, 149 App. Div. 323 (1912). Unauthorized Restrictive Covenant. Where the rector and clerk execute a deed in pursuance of a vote of the vestry and a court order, but without authority insert a restrictive covenant that the property shall only be used for church purposes, the grantor corporation in equity has no pe- cuniary interest remaining to enforce the covenant in the absence of a provision for reversion in case of breach. An action to can- cel the covenant may nevertheless be maintained because the in- 58 GENERAL Corporation Law. validity can only be determined by extrinsic evidence. St. Stephen’s Ch. v. Ch. of Transfiguration, 201 N. Y. 1 (1911). Foreign Corporations. ’ Even if the restrictions upon the right to alienate contained in this section be deemed inapplicable to foreign corporations hav- ing the right to hold real property purstiant to Gen. Corp. Law, § 21, and if the law of the state of incorporation be controlling, nevertheless in the absence of proof of such foreign law, the com- mon law will be deemed to prevail and under it the consent of the court is necessary. Muck v. Hitchcock, 149 App. Div. 323 (1912). Not a Judicial Sale. The fact that the conveyance is made pursuant to an order of the court does not make the transaction a judicial sale and so take it out of the operation of the champerty statutes declaring void conveyances of lands adversely held. The order is simply the authority for completing the voluntary undertaking of the cor- poration. Christie v. Gage, 71 N. Y. 189 (1877). § 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 no- tice, 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 af- fected by the proceeding, may appear upon the hearing and show cause why the application should not be granted. Formerly § 3392 and part of § 3393, Code Civ. Pro. The other part of § 3393 is in the next section. § 73. Order to sell, mortgage or lease. Upon the hear- ing 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. Formerly part of § 3393, Code Civ. Pro. GENERAL CorPoRATION Law. 59 § 74. Insolvent corporation. If the corporation is insol- vent, 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. Formerly § 3394, Code Civ. Pro § 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 be- fore such hearing. Formerly § 3395, Code Civ. Pro. § 76. Practice in cases not herein provided for. In all applications made under this 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. Formerly § 3396, Code Civ. Pro. ARTICLE 5 Judicial Supervision of Corporation and of the Officers and Members Thereof Secrion 90. Action against officers of corporation for misconduct. 91. Who may bring such an action. 92. Visitatorial power over corporation not affected by this article. 60 GENERAL CORPORATION Law. § go. Action against officers of corporation for miscon- duct. An action may be maintained against one or more trustees, directors, managers, or other officers of a corpora- tion, 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 conduct, 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 represent, 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 conviction 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 re- moval; 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, contrary to a provision of law, or for a pur- pose foreign to the lawful -business and objects of the cor- poration, where the alienee knew the purpose of the aliena- tion. 6. Restrajning and preventing such an alienation, where it is threatened, or where there is good reason to appre- hend 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 questions to be tried must be pre- GENERAL CorPorATION Law. 61 pared 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. Formerly Code Civ. Pro. § 1781. Last paragraph was L. 1907, ch. 157, § 2. This article applies to membership corporations, but not to re- ligious corporations, see § 300, post. Under the provisions of this article an action may be brought by the Attorney-General in the name of the people, without a relator, against a domestic business corporation and its directors to remove the latter from their position, for misconduct, and to compel them to account for and pay over to the corporation the value of property belonging to it transferred by them to others in violation of their duty, whenever he deems that the action can be maintained and that the interests of the public will be pro- moted thereby. Peo. v. Ballard, 134 N. Y. 269 (1892). A corporation cannot cease to exist of its own will; its life con- tinues until either the charter period has expired or the court has decreed a dissolution. While a corporation may sell property to pay debts or to carry on its business, it cannot sell all its property in order to deprive itself of existence. Peo. v. Ballard, 134 N. Y. 269 (1892), and cases cited; reargument denied, 136 N. Y. 639. The action, although brought and prosecuted in the name of the people, is in the right of the corporation and for its benefit. Peo. v. Equitable Life Assurance Society, 124 App. Div. 714 (1908). The court has power, pursuant to Gen. Corp. Law, § 306, to appoint a receiver and by its judgment to compel a defaulting director to account to such receiver for the property which he has misappropriated or lost by his breach of duty. Gildersleeve v. Lester, 68 Hun 532, affd. on op. below, 139 N. Y. 608 (1893), the judgment directing payment to such receiver may be enforced by contempt proceedings under Code, § 1241, subd. 4, as the re- ceiver so appointed is an officer of the court. Gildersleeve v. Les- ter, 68 Hun 535 (1803). Subdivision 4 should not be so construed as to prevent the re- moval of directors for their misconduct as officers, for one who is at the same time a director and an executive officer and is guilty of misconduct in one capacity cannot remain in partial con- trol in the other capacity. The re-election of the defendants after the alleged misconduct does not prevent their removal, as their tenure of office must be treated as continuous. Peo. v. Lyon, 119 App. Div. 361 (1907); affd., 189 N. Y. 544 (1907); and see Flanagan v. Lyon, 54 Misc. 372 (1907). In an action brought by the people against the corporation and its directors for neglect and waste and for an accounting the court may upon proof of sufficient facts appoint a temporary receiver 62 GENERAL Corporation Law. pursuant to Gen. Corp. Law, § 306. Peo..v. Hasbrouck, 57 Misc. 130 (1907); but the receiver should not be continued after final judgment nor creditors restrained from enforcing their rights where it appears that the offending directors have resigned and others have been elected in their places. Halpin v. Mutual Brew- ing Co., 91 Hun 220 (1895). ; If the complaint of a director against a co-director to compel restitution, for an accounting, a receiver and an injunction, states facts showing the plaintiff to be entitled to part of the relief de- manded, the court may in its discretion grant a preliminary in- junction if it is necessary to preserve the present status, and may ae sppnint a temporary receiver, Piza v. Butler, 90 Hun 254 1895). A preliminary injunction may be granted restraining the officers. and directors from acting in any manner as such and from inter- fering with the receiver. Goss v. Twisting-in Mach. Co., 117 Supp. 228 (1909). § 91. Who may bring such an action. An action may be brought, as prescribed in the last section, by the attor- ney-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 officer of the corporation, having a general superintendence of its concerns. Formerly Code Civ. Pro. § 1782. For actions by receivers against delinquent directors see Gen. Corp. Law, § 231. This article, it seems, was not intended to warrant the Attor- ney-General in bringing the action if only private interests were involved, as is evident from the provisions of Gen. Corp. Law, § 304, which limit his authority to cases where in his opinion pub- lic interests require such an action, But it may be said to indicate. a policy of the law that the public interests may be concerned, and when they appear to be, that then the action should be within the control of the Attorney-General. Swan v. Mutual Reserve Fund Life Assn., 155 N. Y. 9, 19 (1808). A director of a domestic corporation may, where he seeks no. receiver, mafhtain an action to prevent his co-directors from mak- ing a threatened unlawful alienation of the corporate property detrimental to it and its stockholders and he need not join the a as a party defendant. Green v. Compton, 41 Misc. 21 1903). A judgment creditor and not a creditor at large is meant. Belk- nap v. North Am. Life Ins. Co., 11 Hun 282 (1877); Cole v. Knick- erbocker Life Ins. Co. 23 Hun 255 (1880); appeal dismissed by GENERAL CorporaTIon Law. 63 consent, 91 N. Y. 641; Paulsen v. Van Steenbergh, 65 How. 342 (1883); Swan v. Mut. Res. Fund Life Assn. 20 App. Div. 255 (1897), affd., 155 N. Y. 9, on other grounds, but containing dictum in accord. The cause of action given to the respective officers and persons named in the section is not joint but several, and may be main- tained by each as a party without joining the other parties named. Miller v. Barlow, 78 App. Div. 331 (1903), and cases cited; the plaintiff director stands in the position of a trustee with respect to the creditors and others entitled to share in the assets. Id. Nor is it essential that the corporation should have been made a party plaintiff; nor is it necessary to aver as an essential ele- ment of the cause of action that the corporation has been applied to and has refused to bring the action or that such demand would be fruitless. Id. An action to compel an accounting and to restrain the aliena- tion of corporate property under the two foregoing sections does not contemplate the distribution of the corporate assets among creditors nor a dissolution of the corporation. Halpin v. Mutual Brewing Co., 91 Hun 220 (1895). The power given the Attorney-General by this section does not, it seems, affect or take away his duty to proceed to protect the interests of the people and enforce a charitable trust, where the corporation beneficiaries who are made defendants take no steps to do so. An action under this section would lie to charge the officers with the consequences of their failure to enforce the trust, but it could not reach the fund or compel distribution. Peo. v. Powers, 83 Hun 449 (1894), revsd, 147 N. Y. 104 (1895), on ground that the attempted trust was unenforceable, the court re- fusing to consider the right of the Attorney-General to enforce the trust. § g1-a. Actions against officers by corporation, or re- ceiver or trustee. The supreme court shall also have and exercise jurisdiction in equity, at the suit of a corporation, or of a receiver, or trustee in bankruptcy thereof, to compel one or more trustees, directors, managers or other officers of the corporation to account for injury to or losses of the funds, assets or property of the corporation, caused by or through any neglect or failure of the defendants to per- form, or for violation of, their duties. The court must, upon the application of either party, make an order directing the trial by jury of the issue of negligence, and for that purpose the questions to be tried must be prepared and settled as prescribed in section nine hundred and seventy of the code of civil procedure. 64 GENERAL CORPORATION Law. New section, added by L. 1913, ch. 633, the second section of which reads as follows: “This act shall take effect immediately, but shall not affect any action begun before its enactment.” § 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. Formerly Code Civ. Pro. § 1783. As to general power of visitation of the supreme court over membership corporations see the Membership Corp. Law, § 16; see also Religious Corp. Law, § 14. ARTICLE 6 Action for Sequestration, Action for Dissolution and Action to Enforce Individual Liability of Officer and Member of Corporation Section 100. Action by judgment creditor for sequestration. ior. 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. 105. Additional powers and duties of temporary receiver. 106. Permanent receiver. 107. Additional duties and liabilities of permanent re- ceiver. 108. Application for appointment of receiver. 109. Officers and stockholders may be made parties in action brought by creditor. 110. Separate action may be brought against officers and stockholders. 111. Proceedings in such actions. 112. Distribution of property of corporation by judgment in actions under this article. 113. Recovery of stock subscriptions. 114. Liability 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 ren- dered against a corporation created by or under the laws of the state, and an execution issued thereupon to the GENERAL Corporation Law. 65 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 action to procure a judgment sequestrating the property of the corporation, and pro- viding for a distribution thereof, as prescribed in section one hundred and twelve of this chapter. Formerly Code Civ. Pro. § 1784. This article applies to a membership corporation, but not to a religious corporation. See § 300, post. The object of this section is to provide a summary mode of compelling the application of the property of a corporation which has allowed an execution to be returned unsatisfied, to the pay- ment of its debts. Mann v. Pentz, 3 N. Y. 415 (1850). A proceeding under this section is an equitable one and a judg- ment creditor seeking to sequestrate corporate property to satisfy his judgment may, if a fraudulent transfer of the property is alleged, join as parties defendant the persons who hold such prop- erty in their possession. Proctor v. Sidney Sash & Furniture Co., 8 App. Div. 42 (1896); Bagley & Sewall Co. v. Lennig, 61 App. Div. 26 (1901); Matter of Sayre, 70 App. Div. 329 (1902). The remedy is limited to judgment creditors who have issued execution which has been returned unsatisfied. Mann v. Pentz, 2 Sandf. Ch. 257 (1845), revsd. on other grounds, 3 N. Y. 415 (1850); Dambman v. The Empire Mill, 12 Barb. 341 (1851); Rad- ‘bourn v. Utica, etc., Ry. Co., 28 Hun 369 (1882). Where executions have been issued but have not been returned, a judgment creditor of a corporation may bring an action in equity based upon the lien secured by the execution, to set aside an alleged fraudulent general assignment and a chattel mortgage and transfers of personal property, made in fraud of creditors, both before and after the general assignment. Home Bank v. Brewster & Co., 15 App. Div. 338 (1897). The action may be maintained by one creditor of the corpora- tion without joining other creditors as plaintiffs or stating that it is for their benefit. Woodard v. Holland Medicine Co. 15 N. Y. Supp. 128 (1891). The complaint need not set forth the facts upon which the original judgment was obtained. Woodard v. Holland Medicine ‘Co., 15 N. Y. Supp. 128 (1891). A proceeding by directors of a corporation for voluntary dis- ‘solution under article 9, post, does not take precedence over an action brought by a judgment creditor under this section. Mat- ter of Hoagland, Robinson Co., 36 Misc. 28 (1901). The entry of a judgment of sequestration and the appointment of a permanent receiver do not deprive the corporation of power thereafter to take and prosecute appeals from judgments re- covered against it. Auburn Button Co. v. Sylvester, 68 Hun 4o1 (1893). 66 GENERAL CoRPORATION Law. A final judgment appointing a receiver in an action brought under this section does not dissolve the corporation; it does not prevent the prosecutions of actions against the corporation. Mann v. Pentz, 3 N. Y. 415 (1850); Parry v. Am. Opera Co., 12 Civ. Pro. 194 (1887); Auburn Button Co. v. Sylvester, 68 Hun 401 (1893); People v. Troy Steel & Iron C€o., 82 Hun 303 (1894); Del Valle v. Navarro, 21 Abb. N. C. 136 (1887); nor does it supersede the right to maintain an action to dissolve the corporation. Damb- man v. Empire Mill, 12 Barb. 341 (1851), but it does work a prac- tical dissolution because of the distribution under the final judg- ment. Eddy v. Co-operative Dress Assn., 3 Civ. Pro. 442 (1883). § ror. Action to dissolve a corporation. In either of the following 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: 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 busi- ness 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 incor- porated, or of any other act binding upon it. Formerly Code Civ. Pro. § 1785. Respecting dissolution of Young Men’s Christian Associations see the Membership Corp. Law, § 142. These sections have no application to religious corporations. See § 300, post. As to the dissolution of such corporations see Re- ‘ligious Corp. Law, § 18. The court has no general jurisdiction of an action brought for dissolution; its power in that respect is derived solely from the statute, anf unless the complaint in an action brought to dissolve a corporation shows the jurisdictional facts, the court has no power to act, its decree is void and the corporation still exists. Osborn v. Montelac Park, 89 Hun 167 (1895), affd.,, 153 N. Y. 672 (1897); Bliven v. Peru Steel & I. Co, 9 Abb. N. C. 205 (1881); Denike v. N. Y. & R. Lime Co., 80 N. Y. 5099 (1880), and cases therein cited. The Supreme Court upon proof of the insolvency of a corpora- GENERAL CorporaTion Law. 67 tion, be it regularly or irregularly organized, has the power to terminate its existence, sell its assets and pay its creditors. Mat- ter of N. Y., Westchester & Boston Ry. Co., 193 N. Y. 72 (1908). Insolvency. ‘A corporation, like an individual, is insolvent when it is not able to pay its debts. Insolvency means a general inability to answer in the course of business the liabilities existing and capable of being enforced. Brouwer v. Harbeck, 9 N. Y. 5890, 594 (1854); Marsh v. Dunckel, 25 Hun 167 (1881); Peo. v. Excelsior Gas L. Co., 8 Civ. Pro. 390 (1886); Baker v. Emerson, 4 App. Div. 348 (1896); Olney v. Baird, 7 App. Div. 95 (1896); Matter of Lenox Corp., 57 App. Div. 515 (1901); Horrocks Desk Co. v. Fangel, 71 App. Div. 313 (1902). It is not an absolute inability to pay one’s debts at some future time upon a settlement and winding up of all a trader’s concerns, but as not being in a condition to pay one’s debts in the ordinary course as persons carrying on trade usually do. An inability to pay arising from unexpected and unforeseen contingencies would not alone be evidence of insolvency. Ferry v. Bank of Central N. Y., 15 How. Pr. 445 (1858). The entry of judgments against the corporation and its inability to pay them and other obligations establishes insolvency. Nealis v. Am. Tube & Iron Co., 76 Hun 220 (1894), affd., 150 N. Y. 42 (1896). Failure to Pay Notes. A corporation cannot be said to have neglected or refused to pay its obligations because its demand notes remain outstanding and unpaid until payment has been demanded. Denike v. N. Y. & R. Lime Co., 80 N. Y. 599 (1880). A dissolution is proper where the corporate notes have not been paid for more than a year, although the corporation has been discharged in bankruptcy because such discharge does not oper- ate as a payment of the notes. Peo. v. Troy Chemical Co., 118 App. Div. 437 (1907). A Decree Necessary. A forfeiture of the franchises of a corporation through abuse or neglect can only be enforced by the sovereign power in some pro- ceeding instituted in its behalf, unless there be special provisions by statute. Denike v. N. Y. & R. Lime, etc. Co, 80 N. Y. 599 (1880). : The ground for forfeiture cannot be taken advantage of against the corporation collaterally. Towar v. Hale, 46 Barb. 361 (1866). Until the decree is made creditors may proceed to obtain satis- faction of their debts unless restrained by injunction, and a sale of property under execution will transfer title to the purchaser. Mickles v. Rochester City Bk., 11 Paige 118 (1844), affd., 11 Paige. 129, note (1845). 68 GENERAL CorpoRATION Law. Result of Dissolution. As to result in case of voluntary proceedings see Gen. Corp. Law, § 1091. See Gen. Corp. Law, § 110, as to enforcing liability of officer after dissolution. The dissolution of a corporation terminates an action pending against it and all subsequent proceedings therein are void unless the action be continued by order of court against the receiver. McCulloch v. Norwood, 58 N. Y. 562 (1874); Sturges v. Vander- bilt, 73 N. Y. 384 (1878); People v. Knickerbocker Life Ins. Co., 106 N. Y. 619 (1887); Peo. v. Troy Steel & Iron Co., 82 Hun 303 (1894); Town of Watervliet v. Town of Colonie, 27 App. Div. 394 (1898); Matter of Murray Hill Bank, 153 N. Y. 199 (1897), affg. on this point 14 App. Div. 318. The power to continue the action is now vested in the Supreme Court pursuant to sections 755 and 756 of the Code, L. 1832, ch. 295 having been repealed. Peo. v. Troy Steel & Iron Co., 82 Hun 303 (1894). Process to commence an action cannot be served on an officer of the corporation after its dissolution. Hetzel v. Tannehill Silver M. Co., 4 Abb. N. C. 40 (1877). A lease to the corporation is not terminated by its dissolution and its covenant to pay rent does not thereupon cease to be obligatory. The lease is an open and subsisting obligation and the lessors are entitled to payment of the rent as it accrues. Peo. v. National Trust Co., 82 N. Y. 283 (1880); but a contract for personal services is terminated. Peo. v. Globe Mut. Life Ins. Co., 91 N. Y. 174 (1883). The creditors have an equitable lien upon the assets in the hands of another for the payment of their debts and it is imma- terial how the person holding them acquired possession, the only question being whether he has acquired a better equity than the creditors. Tinkham v. Borst, 31 Barb. 407 (1860). § 102. Who may bring action to dissolve a corporation. An action 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 state- ment of facts, verified by oath, showing grounds for an action tinder the provisions of the last section, and the attorney-general omits, for sixty days after this submis- sion, to commence an action specified in the last section, then, and not otherwise, such creditor or stockholder may apply to the proper court for leave to commence such an action, and on obtaining leave may maintain the same ac- cordingly; and if there be no person in existence upon GENERAL CorporATiIon Law. 69 whom service of the summons can be made under the pro- visions of section four hundred and thirty-one of the code of civil procedure, service of the summons in such action may be made in such manner as the court upon applica- tion by petition may direct. Formerly Code Civ. Pro. § 1786. Thus am’d by L. 1912, ch. 204. The last clause of the foregoing section was added by the amendment of 1912. See Gen. Corp. Law, § 304, post, as to duty of Attorney-General. It seems that the action must be brought either in the name of the people or in the name of the party in interest and not in the name of the people on the relation of a party. Peo. ex rel. Hearst v. Ramapo Water Co., 51 App. Div. 145 (1900). If the action is solely to dissolve, the officers and directors are not, it seems, proper parties. Knickerbocker v. Groton Bridge & Mfg. Co., 111 App. Div. 145 (1906). § 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 injunction order, re- straining the corporation, and its trustees, directors, man- agers and other officers, from collecting or receiving any debt or demand, and from paying out, or in any way trans- ferring or delivering, to any person, any money, property, or effects of the corporation, during the pendency of the action; except by express permission of the court. Where the action is brought to procure the dissolution of the cor- poration, the injunction may also restrain the corporation, and its trustees, directors, managers and other officers, from exercising any of its corporate rights, privileges, or fran- chises, during the pendency of the action; except by ex- press permission of the court. The provisions of title sec- ond of chapter seventh of the code of civil procedure, re- lating to the granting, vacating, or modifying of an injunc- tion order, apply to an injunction order, granted as pre- scribed in this section; except that it can be granted only. by the court. Formerly Code Civ. Pro. § 1787. In an action brought for a receiver because there was no officer 7o GENERAL CorpPorRATION Law. empowered to preserve the property, the court may enjoin the prosecution of a sequestration action when it appears from the facts to be for the best interests of all creditors. Smith v. Danzig, 3 Civ. Pro. 127 (1883). P Notice of an application to modify the injunction must be given to the Attorney-General pursuant to G.-C. L., § 312, post. Dohn v. The Buffalo Am. Co., 66 App. Div. 446 (1901). § 104. Temporary receiver. In such an action, the court may also, at any stage thereof, appoint one or more re- ceivers of the property of the corporation. A receiver, so appointed, before final judgment is a temporary receiver, until final judgment is entered. A temporary 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 prescribed by law for the qualification of a permanent receiver. Unless addi- tional powers are specially conferred upon him, as pre- scribed in the next section, a temporary receiver has only the powers specified in this section, and those which are incidental to the exercise thereof. Formerly Code Civ. Pro. § 1788, in part. For remainder of sec- tion, see this article, § 106. When Appointed. A temporary receiver should be appointed only where it is essential to protection of the plaintiff’s rights prior to final judg- ment, and the facts and circumstances showing the necessity of the receivership pendente lite must be shown. Bare allegations of a verified complaint are insufficient as are unsupported statements on information and belief. Kieley v. Barron, etc., Co., 87 App. Div. 317 (1903); Weber v. Walerstein, 111 App. Div. 700 (1906); Hastings v.”Tousey, 121 App. Div. 815 (1907); Peo. v. Oriental Bank, 124 App. Div. 741 (1908); Federman v. Standard Churn Mig. Co., 128 App. Div. 493 (1908); Fenn v. Ostrander, 116 N. Y. Supp. 1083 (1909). Notice to Defendant. The defendant should have notice of the application. Code, § 714; Gen. Corp. Law, § 306. GENERAL CorporaATION Law. 71 Title of Temporary Receiver. The temporary receiver acquires no title but only the right of possession as the officer of the court. The title remains in those in whom it was vested when the appointment was made. Mutual Brewing Co. v. N. Y. & C. P. F. Co. 16 App. Div. 149 (1897); Keeney v. Home Ins. Co., 71 N. Y. 396 (1877); Sigua Iron Co. v. Brown, 171 N. Y. 488 (1902), and cases cited. The power of the Supreme Court as successor to the Court of Chancery to appoint temporary receivers is not dependent upon statute but is incidental to the jurisdiction of the court. Keeney v. Home Ins. Co., 71 N. Y. 396 (1877); Decker v. Gardner, 124 N. Y. 334 (1801); Stokes v. Hoffman House, 167 N. Y. 554 (1901) ; Prince v. Schlesinger, 116 App. Div. 500 (1906). He is a mere custodian and manager of the property under the direction of the court during the pendency of the action. Herring v. R. R. Co., 105 N. Y. 340 (1887); Sigua Iron Co. v. Brown, 171 N. Y. 488, 494 (1902). § 105. Additional powers and duties of temporary re- ceiver. 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 crediturs or stockholders, before final judgment, unless he is specially directed so to do by the court. Formerly Code Civ. Pro. § 1780. It is the evident policy of the statute to vest in the temporary receiver many of the important powers that are exercised by a permanent receiver. Nealis v. Am. Tube & Iron Co., 150 N. Y. 42 (1896). In addition to the general authority conferred by the previous section the temporary receiver may obtain special authority under this section to conduct, institute and prosecute any and all pro- ceedings that may be necessary to redeem property from which a corporation has been dispossessed. Bien v. Bixby, 18 Misc. 415 (1896); and to set aside fraudulent transfers. Stiefel v. N. Y. Nov- elty Co., 14 App. Div. 371 (1897). Continued as Permanent Receiver. Where a temporary receiver, appointed in an action to seques- trate the property of a corporation, has duly executed and filed 72 GENERAL Corporation Law. the requisite bond, and thereafter, under the judgment in the action, is continued as permanent receiver, a further bond may be exacted in the discretion of the court. Jones v. Blun, 145 N. Y. 333 (1895). § 106. Permanent receiver. A receiver appointed by or pursuant to a final judgment in the action, or a temporary receiver who is continued by the final judgment, is a per- manent receiver, and has all the powers and authority con- ferred, and is subject to all the duties and liabilities im- posed upon a receiver in article eleven of this chapter. Thus am’d by L. 1909, ch. 240. Formerly Code Civ. Pro. § 1788, in part. Remainder of said section in § 104. § 107. Additional duties and liabilities of permanent re- ceiver. 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 dis- tributive share to the person or persons entitled thereto, on demand, at any time after such statement. Such ac- count, statement, and all the books and papers of the cor- poration in the hands of such receiver, shall at all reason- able 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 appel- late division or special term, shall, on the application of the party gggrieved, 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 annul any legal proceedings had by such receiver; but such proceed- ings shall be continued by such successor as if no removal had been made. Such receiver shall also be liable to pay GENERAL CoRPoRATION Law. 73 to the party interested, interest 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. Formerly R. S., Pt. 3, Ch. 8, Tit. 4, Art. 2, § 42, as amended by L. 1858, ch. 348, § 1. § 108. Application for appointment of reeciver. Appli- cations made by the attorney-general for the appointment of a receiver of a corporation shall be made in the judicial district in which the action in which the appointment is sought is triable. Formerly L. 1883, ch. 378, § 1, in part, as amended by L. 1896, ch. 282, § 1. See rule 80, General Rules of Practice, and Gen. Corp. Law, § 314. This section relates exclusively to receivers appointed in pro- ceedings in insolvency and not in foreclosure. U. S. Trust Co. v. N. Y. W. S., etc, R. R. Co., ror N. Y. 478 (1886). § 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, direc- tors, trustees, or other officers, or any of them, are made liable by law, in any event or contingency, for the pay- ment 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 en- forced by the judgment in the action. Formerly Code Civ. Pro. § 1790. § 110. Separate action may be brought against officers and stockholders. Where the stockholders, directors, trus- tees, 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 sec- tion, the plaintiff in the action may maintain a separate action against them, to procure a judgment, declaring, ap- portioning and enforcing their liability. Formerly Code Civ. Pro. § 1791. 74 GENERAL CORPORATION Law. § 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 ac- cordingly ; but, if it affirmatively appears, that the corpora- tion is insolvent, and has no property to satisfy its credi- tors, the court may, without taking such an account, ascertain and determine the amount of each defendant’s liability, and enforce the same accordingly. Formerly Code Civ. Pro. § 1792. § 112. Distribution of property of corporation by judg- ment 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 stock- holders, directors, trustees, or other officers, must provide for a just and fair distribution of the property of the cor- poration, and of the proceeds thereof, among its fair and honest creditors, in the order and in the proportions pre- scribed by law, in case of the voluntary dissolution of a corporation. Formerly Code Civ. Pro. § 1793. For distribution in case of voluntary dissolution see Gen. Corp. Law, § 261. § 113. Recovery of stock subscriptions. Where the stockholders of the corporation are parties to the action, if the property of the corporation is not sufficient to dis- charge its debts, the interlocutory or final judgment, as the case requires, must adjudge that each stockholder 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. Formerly Code Civ. Pro. § 1794. § 114. Liability of directors and stockholders. If it ap- pears, that the property of the corporation, and the sums collected or *collectable from the stockholders, upon their *So in original law. GENERAL CoRPORATION Law. 75 stock subscriptions, are or will be insufficient to pay the debts of the corporation, the court must ascertain the sev- eral sums, for which the directors, trustees, or other offi- cers, or the stockholders of the corporation, being parties to the action, 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. Formerly Code Civ. Pro. § 1795. § 115. Effect of this article. This article does not re- peal or affect any special provision of law, prescribing that a particular kind of corporation 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. Formerly Code Civ. Pro. § 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 corpotation. 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 the 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 corporation, or continuing its corporate existence, upon the ground that ‘the act was procured upon a fraudulent suggestion, or the 76 GENERAL Corporation Law. concealment of a material fact, made by or with the knowl- edge and consent of any of the persons incorporated. Formerly Code Civ. Pro. § 1797. This article applies to membership corporations but not to re- ligious corporations. See § 300, post. + § 131. Action by attorney-general to annul corporation by leave of court. Upon leave being granted, as prescribed in the next section, the attorney-general may bring an ac- tion against a corporation created by or under the laws of the state, to procure a judgment, vacating 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 amend- ing the same, and applicable to the corporation; or, 2. Violated any provision of law, whereby it has for- feited 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 power; or, 4. Done or omitted any act, which amounts to a sur- render of its corporate rights, privileges, and franchises ; or, 5. Exercised a privilege or franchise, not conferred upon it by law. Formerly Civ. Code Pro. § 1708. Scope of Section. This section contains no rule of liability whatever, but simply points out a mode of procedure to enforce duties or punish mis- conduct elsewhere and otherwise settled and determined and enumerates the classes of cases in which if liability does exist the Attorney-General may move, having first obtained the assent fae court. Peo. v. Atlantic Ave. R. R. Co, 125 N. Y. 513 1891). It appearsato be settled that the State as prosecutor must show on the part of the corporation 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 inci- dental, but material and serious; and such as to harm or menace the public welfare. For the State does not concern itself with the quarrels of private litigants and intervenes as a party only where some public interest requires its action. Peo. v. North River S. R. Co., 121 N. Y. 582 (1890). GENERAL Corporation Law. 77 Upon the trial of an action it is incumbent upon the State to show that cause of forfeiture has not only been incurred by the defendant, but that it continues to exist, that its existence involves some public interest and that the court has authorized the bringing of the action. Peo. v. Ulster & Delaware R. R. Co, 128 N. Y. 240 (1891). Such an action is always within the control of the State, as the sole party interested, to prosecute or abandon at its will or pleasure, and it may, through its Legislature, not only discon- tinue the action, but waive or abolish causes of forfeiture, declare rights of action and limit the operation of the statute by for- bidding the prosecution of such an action in specified cases. Peo. v. Ulster & Delaware R, R. Co., 128 N. Y. 240 (1891). Surrender. Until actual dissolution a creditor may proceed against the cor- poration as if non-user or insolvency has not occurred. Mickles v. Rochester City Bank, 11 Paige 118 (1844), affd., 11 Paige 129, note (1845). Mere insolvency not shown to be continued or a suspension of business not shown to have been without reasonable cause, does not amount to a surrender of corporate rights. Peo. v. Bank of Hudson, 6 Cow. 217 (1826); Moran v. Lydecker, 27 Hun 582 (1882). Violation and Forfeiture. For provisions creating liability for forfeiture for non-user, see Gen. Corp. Law, § 36. Where a corporation is a combination inimical to trade and commerce and unlawful, the Attorney-General may maintain an action to annul the corporation’s existence. Peo. v. Milk Ex- change, 145 N. Y. 267 (1895). It is competent for the Legislature to waive a cause of for- feiture and this can be done expressly or by acts recognizing the continued existence of the corporation. Matter of N. Y. Elevated R. R. Co., 70 N. Y. 327 (1877). An action may be maintained to enforce the forfeiture for non-user provided by Gen. Corp. Law, § 36. Peo. ex rel. Hearst v. Ramapo Water Co., 51 App. Div. 145 (1900). There is a dictum in a tax case to the effect that the statement of the location of its principal office or place of business is a condition precedent to the organization of a business corporation, and, should it appear that the location of its principal office was -willfully misstated in the certificate, or in case the corporation should change its principal place of business, without effecting a legal change of residence, for the purpose of evading taxation, it ‘might present a case under the foregoing section for the atten- tion of the Attorney-General. Peo. ex rel. Knickerbocker Press -v. Barker, 87 Hun 341 (1805), affd. on op. below, 147 N. Y. 715. At the time this proceeding was instituted section 3 of the General Corporation Law provided that “the office of a stock corporation shall be in the county, town or city in which its business is prin- 78 GENERAL Corporation Law. cipally carried on,” which provision has been eliminated from said statute by the amendment of 1895, chapter 672. § 132. Notice of application for leave to commence ac- tion to annul corporation. Before granting leave, the court may, in its discretion, require such previous notice of the application as it thinks proper, to be given to the corpora- tion, or any officer thereof, and may hear the corporation in opposition thereto. Formerly Code Civ. Pro. § 1799. As to when the Attorney-General must apply for leave see Gen. Corp. Law, § 304, post. No individual need be present as a party to the action. The question is simply between the corporation and the people. There- fore, it is of no legal consequence that the person who instigates such an action or applies to the Attorney-General to have the action commenced has any interest in the questions involved in the action, so that anything done by him will not affect the rights of the people who maintain the action. Peo. v. Buffalo Stone & Cement Co., 131 N. Y. 140 (1892). The policy of the law is to vest with the Attorney-General the administrative duty of determining whether the public interests are to be served by the institution of the action. The court should determine whether a prima facie case is alleged or a case of such gravity that it seems proper that the court should determine it upon a trial. Matter of Attorney-General, 50 Hun 511 (1888). The order should not be granted except on the written applica- tion of the Attorney-General stating that in his opinion the action can and ought to be maintained for reasons given and this duty he cannot delegate to other counsel. Matter of Attorney-General, 79 Hun 369 (1894). Whether or not leave should be given rests in each case in the sound discretion of the court and is not to be given as a matter of course. Matter of Attorney-General, 81 Hun 541 (1894); Matter of Attorney-General, 124 App. Div. 401 (1908). Weight undoubtedly is to be given to the fact that the Attor- ney-General has felt it to be his duty to apply for the required leave, but the court is also charged with the duty to consider whether upon the facts presented the public interests require that the action be brought. Matter of Attorney-General, 124 App. Div. 401 (1908). It rests in the discretion of the court to determine whether notice shall be given to the corporation of the application and the failure to require notice does not render the order made invalid. Peo. v. B. H. T. & W. Ry. Co., 27 Hun 528 (1882). The complaint in the action should show that leave to sue has been granted to the Attorney-General. Peo. ex rel. Hearst v. Ramapo Water Co., 51 App. Div. 145 (1900). GENERAL CorPorATION Law. 79 § 133. Jury trial. An action, brought as prescribed in this article, is triable, of course and of right, by a jury, as if it was an action specified in section nine hundred and sixty-eight of the code of civil procedure and without pro- curing an order, as prescribed in section nine hundred and seventy of the code of civil procedure. Formerly Code Civ. Pro. § 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 action, brought as prescribed in either of those sections, the court may render final judgment that the corporation, and each officer thereof, be perpetually en- joined from exercising any of its corporate rights, privi- leges, and franchises; and that it be dissolved. The judg- ment must also provide for the appointment of a receiver, the taking of an account, and the distribution of the prop- erty of the corporation, among its creditors and stock- holders, as where a corporation is dissolved upon its volun- tary application, as prescribed in article nine of this chapter. Formerly Code Civ. Pro. § 1801. See Gen. Corp. Law, §§ 191 and 230 as to permanent receivers. There is no statutory provision in this article for the appoint- ment of temporary receivers, but as to the inherent power of the court see cases under Gen. Corp. Law, § 104, supra. § 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 cor- poration, and any or all of its directors, trustees and other officers, from exercising any of its corporate rights, privi- leges, or franchises; or from exercising certain of its cor- porate rights, privileges, or franchises, specified in the in- junction 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 pro- cedure, and all the provisions of title second of chapter 80 GENERAL CorPoRATION Law. seventh of the code of civil procedure applicable to an in- junction specified in that section, apply to an injunction granted as prescribed in this section, except that it can be granted only by the court. Formerly Code Civ. Pro. § 1802. - : See Gen. Corp. Law, § 305, as to notice to corporation. See Gen. Corp. Law, § 302, respecting injunctions restraining creditors. § 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 judgment-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 cor- poration was located. Formerly Code Civ. Pro. § 1802. Prior to the enactment of the Consolidated Laws of 1909, section 1803 of the Code (now Gen. Corp. Law, § 136, supra) provided that the notice should be published “in the newspaper printed at Albany in which legal notices are required to be published” but the quoted words were omitted in the enactment of § 136, supra, by L. 1909, ch. 28. ARTICLE 8 Action to Dissolve Moneyed Corporation _[As this entire article relates to moneyed corporations, exclu- sively, it is omitted.] ARTICLE 9 Eaoren anes for Voluntary Dissolution of Corporation 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. GENERAL CorpPorATION Law. 81 177. 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. I91. Permanent receiver. 192. Appointment 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 management 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 suffi- cient to pay all just demands, for which it is liable, or to afford a reasonable security to those who may deal with it; or if, for any reason, they deem it beneficial to the in- terests 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 corporation, as pre- scribed in this article. Formerly Code Civ. Pro. § 24109. The proceeding is purely statutory and the authority of the court must be found in the statute and not in its general equita- ble powers. Hitch v. Hawley, 132 N. Y. 212 (1892); Matter of Binghamton General Electric Co., 143 N. Y. 261 (1894); McGee v. Geneseo Academy, 17 St. Rep. 221 (1888); Chamberlain v. Roches- ter S. P. V. Co.,, 7 Hun 557 (1876); Matter of Boynton, etc., Co., 34 Hun 369 (1884); Matter of Malcolm Brewing Co., 78 App. Div. 592 (1903). Where the decrease in the number of directors is not effected in accordance with the Stock Corporation Law, the court has no jurisdiction to entertain the petition because it is not signed by a 82 GENERAL CorporATION Law. majority of the directors. Matter of Dolgeville Electric L. & P. Co., 160 N. Y. 500 (1899). Where all the officers and directors of the corporation except the secretary resign with the express. purpose of instituting an action to procure the appointment of a receiver on the ground that there is no officer empowered to hold the assets of the company, such resignations are not legal nor effective, for the officers of the corporation may ask for its dissolution and the appointment of a receiver under this article, in which case the officers are not re- quired to resign, but the action is instituted in their official ca- pacity. Zeltner v. Zeltner Brewing Co., 174 N. Y. 247. Not Applicable to Religious Corporations. This article does not apply to religious corporations. See sec- tion 195, post. Nor does it apply to Christian Associations, the voluntary dissolution of which is provided for in the Membership Corporations Law, § 142. As to the construction of conflicting corporate laws see Gen. Corp. Law, § 321. Applicable to Membership Corporations. This article is applicable to membership corporations. Matter of Dramatic Fund Assn., 22 Abbotts N. C. 221 (1889) and see In re Peekamose Fishing Club, 151 N. Y. 511, where a membership corporation was dissolved. The directors of the corporation who apply for dissolution are not personally liable to the attorney who acts for them in the matter, for the proceeding is that of the corporation. Drew v. Longwell, 81 Hun 144 (1894). Newly elected directors have a right to stop voluntary proceed- ings for dissolution commenced by their predecessors in office. Matter of Jones, 67 Hun 360 (1893). Although the proceedings to dissolve the corporation may be void because of the failure to give the notice of the application for the order to show cause to the Attorney-General pursuant to G. C. L. § 312, nevertheless the proceeding is commenced by the filing of the petition and after such filing the court acquires jurisdiction to appoint a temporary receiver provided the peti- tion contains some evidence of insolvency. The sufficiency of the petition cannot be questioned collaterally nor can the appoint- ment of the temporary receiver. Knickerbocker T. Co. v. Tarry- town, etc. Ry. Co. 117 N. Y. Supp. 871 (1909). § 171. Directors or trustees may be required to petition. It shall We the duty of a majority of the directors or trus- tees of every corporation 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 majority in in- terest of its stockholders. Formerly Code Civ. Pro. § 2420, in part. For remainder of. section see § § 172 and 173 of this article. GENERAL CorPorATION Law... 83 § 172. Petition when directors or trustees do not agree. If a corporation, created under a general statute of the state for the formation of corporations or under any spe- cial act or charter has an even number of trustees or direc- tors who are equally divided respecting the management 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 representing 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 directors 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. Formerly Code Civ. Pro. § 2420, in part. For remainder of section see §§ 171 and 173 of this article. If the petitioner in a proceeding under this section having an even number of trustees equally divided, respecting its manage- ment, neglect or refuse after a referee has been appointed, to apply for a final order as contemplated by section 190 of this article, it is competent for the court on such appeal of any person interested to direct the petitioner to move so that the interests of all may be protected. Matter of Peekamose Fishing Club, 151 N. Y. 511 (1897). : § 173. Corporations excepted from two preceding sec- tions. Sections one hundred and seventy-one and one hun- dred and seventy-two of this chapter do not apply to a sav- ings 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 business of banking or insurance, or intended to derive a profit from the loan or use of money. Formerly Code Civ. Pro. § 2420, in part. For remainder of section see §§ 171 and 172 of this article. 84 GENERAL CorporaATION Law. § 174. Contents of petition. The petition must show that the case is one of those specified in sections one hun- dred and seventy and one hundred and seventy-two of this chapter, and must state the reasons, which induce the peti- tioner or petitioners to desire the dissolution of the cor- poration. A schedule must be annexed to the petition, con- taining 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 the creditors of the cor- poration, 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 creditor, and of each person with whom such an en- gagement 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 person specified in the last subdivision, and the na- ture of each debt, demand, or other engagement. 4. A statement of the true cause and consideration of the indebtedness to each creditor. 5. A full, just, and true inventory of all the property of the corporation, and of all the books, vouchers, and se- curities relating thereto. 6. A statement of each incumbrance upon the property of the corporation, by judgment, mortgage, pledge, or other- wise. 7. A full, just, and true account of the capital stock of the corporation, 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, Formerly Code Civ. Pro. § 2421, as am’d by L. 1909, ch. 240. If a technical and accidental omission in the schedules of some item of property or some other omission to comply with this section, does not show a lack of good faith by the petitioner or afford evidence of any fraudulent purpose or attempt to impose upon the court, an objection to the sufficiency of such schedule does not go to the jurisdiction of the court, and may be obvi- ated by evidence. Matter of Murray Hill Bank, 9 App. Div. 546 GenerAL Corporation Law. 85 (1896); In re Santa Eulalia Silver Mining Co., 21 St. Rep. 80, affd. on op. below, 115 N. Y. 657 (1889). When the petition prays for a dissolution on the ground of the insolvency of the corporation, and the schedule shows a surplus instead of a deficiency of assets, no case is made for the appoint- ment of temporary receivers. In re Hitchcock Manfg. Co., 1 App. Div. 164 (1896). Upon a motion made to vacate the order ap- pointing temporary receivers, it is not permissible to show by affidavits of certain directors, submitted in opposition to such motion, that the former valuation of assets shown by the schedule was erroneous, and that at the time when the directors made their affidavits, a period four months later, the corporation was insolvent. Id. The real property should be so described that the receiver can identify same and take possession; and the books, vouchers and securities should be fully stated so that the receiver can be certain that he has obtained all the property. Matter of West- chester Iron Co., 15 How. 7 (1857). § 175. Affidavit to be annexed to petition. An affidavit, made by each of the petitioners, to the effect that the mat- ters of fact, stated in the petition and the schedule, are just and true, so far as the affant knows or has the means of knowing the same, must be annexed to the petition and schedule. Formerly Code Civ. Pro. § 2422. § 176. Presentation of petition. The papers must be pre- sented at a special term of the supreme court, held within the judicial district, embracing the county wherein the prin- cipal office of the corporation is located. Formerly Code Civ. Pro. § 2423, in part. For remainder of section see § § 178, 181, 182, 184 of this article. As to notice to the Attorney-General see Gen. Corp. Law, § 312, and cases there cited. § 177. Corporations without stockholders. In the case of corporations affected by the provisions of this article and not having stockholders, it shall be sufficient for the pur- poses of this article to notify, name and refer to the “mem- bers” of such corporations, instead of “stockholders,” as herein provided. Formerly Code Civ. Pro. § 2431, in part. For remainder of section see § 195 of this article. 86 GENERAL CorPorATION Law. § 178. Action by court upon petition for dissolution. In a case specified in sections one hundred and seventy-one and one hundred and seventy-two 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 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 be- fore 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. Formerly Code Civ. Pro. § 2423, in part, as am’d by L. 1909, ch. 240. For remainder of section see §§ 176, 181, 182, 184 of this article. § 179. Publication of order to show cause why corpora- tion should not be dissolved. A copy of the order must be published, as prescribed 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. Thus am’d by L. 1909, ch. 28. Formerly Code Civ. Pro. § 2424. The note under § 136, supra, also applies to this section. If the order did not direct publication and did not specify the newspapers in which it was to be published, the court having jurisdiction of the proceeding may correct the defect by making an order nunc pro tunc. Matter of Christian Jensen Co., 128 N. Y. 550 (1891). § 180. Service of order to show cause. A copy of the order must also be served upon each of the persons, speci- fied in the schedule as a creditor or stockholder of the cor- poration, 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 GENERAL Corporation Law. 87 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. Formerly Code Civ. Pro. § 2425. By service of this order creditors are called into court simply on the question as to whether the corporation should be dissolved, and they are therefore not bound by an adjudication made on an accounting by the temporary receiver to himself as permanent receiver of which they have had no notice. Matter of Simonds Mfg. Co., 39 App. Div. 576 (1899). § 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. Formerly Code Civ. Pro. § 2423. For remainder of section see §§ 176, 178, 182, 184 of this article. § 182. Temporary receiver. If it shall be made to appear to the satisfaction of the court that the corporation is in- solvent, the court may at any stage of the proceedings be- fore the final order, on motion of the petitioners on notice to the attorney-general, or on motion of the attorney-gen- eral on notice to the corporation, appoint a temporary re- ceiver of the property of the corporation, which receiver shall have all the powers and be subject to all the duties that are defined as belonging to temporary receivers ap- pointed 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 tem- porary receiver, upon like motion and notice, confer upon such temporary receiver the powers and authority, and subject him to the duties and liabilities of a permanent re- ceiver, or as much thereof as it thinks proper, except that he shall not make any final distribution among the credi- tors and stockholders, before final order in the proceed- ings, unless he is specially directed so to do by the court. Formerly Code Civ. Pro. § 2423. For remainder of section see §§ 176, 178, 181, 184 of this article. For additional cases see Gen. Corp. Law, § 104. 8&8 GENERAL CoRPORATION Law. The court acquires jurisdiction when the petition is properly presented and by the appointment of a receiver the property of the corporation comes into its possession and it has power to protect it, and for this purpose it may prohibit any interference in any action thereafter instituted. While a receiver so appointed ‘may not interfere with the property until he has filed his bond, when this is done his title relates back to the date of his appoint- ment. Even if the corporation has wrongfully obtained possession of property before the appointment of a receiver, the owner thereof may not, without first obtaining leave of the court, replevy in an action against the receiver. Matter of Christian Jensen Co., 128 N. Y. 550 (1891). The sole authority for appointing a temporary receiver and granting an injunction enjoining creditors from prosecuting their claims at the commencement of the proceeding is that conferred by this article, and if the statutory authority is not followed strictly the order will be void. Matter of Lenox Corporation, 57 App. Div. 515 (1901), affd., 167 N. Y. 623 (1901); the term “insolvency” is limited and defined by section 170 of this article. Id.; if there is any evidence tending to show the requisite’ facts the court has jurisdiction and the order will not be a nullity. Id.; Knickerbocker Trust Co. v. Tarrytown, etc., Ry. Co, 117 N. Y. Supp. 871 (1909). The court should not, except for the most cogent reason, authorize a sale of all the property of the corporation prior to the entry of the final order dissolving the corporation. Matter of Malcolm Brewing Co., 78 App. Div. 592 (1903); there should be a full hearing of persons representing the majority interests of stockholders and creditors. Matter of Manoca Temple Assn., 128 App. Div. 796 (1908). Where an action is pending to foreclose a mortgage and the teal property is inadequate security for payment of the indebted- ness, thus entitling the mortgagee to the rents, and where a tem- porary receiver has been appointed because of the company’s in- solvency, who is in possession, the court may direct the tem- porary receiver to hold until the further order of the court funds derived from the continuation of the business which shall be equal to an amount adequate to pay a reasonable rent. Matter of Busch Brewing Co., 41 App. Div. 204 (1899). § 183. Application for appointment of receiver. Every application made for the appointment of a receiver of a corporatign 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. me L. 1883, ch. 378, § 1, in part, as am’d by L. 1896, ch. 2, § 1. GENERAL Corporation Law. 89 See Gen. Corp. Law, §§ 108 and 314; also General Rules of Practice, Rule 80. A receiver of a corporation may be appointed in the county in which the ‘action is brought notwithstanding rule 80, which can- not prevent a party from suing in the county where he resides. Smith v. Danzig, 3 Civ. Pro. 127. § 184. Injunction. If a temporary receiver be appointed, the court may, in its discretion, on like motion and notice, with or without security, 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 money, or from taking any further proceedings in such an action theretofore 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. Formerly Code Civ. Pro. § 2423, in part. For remainder of section see §§ 176, 178, 181, 182 of this article. Where a temporary receiver has been appointed, the court can- not, under the provision empowering it to grant an injunction re- straining the creditors of the corporation, restrain a suit to fore- close a mortgage given by the corporation to a trust company ‘to secure its bonds; such an action is not one for the “recovery of a sum of money” within the meaning of this section. Matter of Hamilton Park Co., 1 App. Div. 375 (1896); In re Binghamton Gen. Elec. Co., 143 N. Y. 261 (1894); Matter of Busch Brewing Co., 41 App. Div. 204 (1899); In re Tarrytown, etc., Ry Co., 117 N. Y. Supp. 695 (1909). Under the present statute a temporary receiver may be ap- pointed and an injunction granted at the commencement of the proceeding. Knickerbocker T. Co. v. Tarrytown, etc., Ry. Co., 117 N. Y. Supp. 871 (1909). But the injunction cannot be granted unless a receiver is appointed, although both may be appointed eH. same order. In re Simonds Soap Co., 41 St. Rep. 355 (1891). § 185. Referee. If a referee was not designated in the order to show cause, the court may, in its discretion, ap- point a referee when or after the order is returnable. Formerly Code Civ. Pro. § 2426, in part. For remainder of section see §§ 186, 187 of this article. go GENERAL CorporATION Law. § 186. Hearing. At the time and place specified in the order, or at the time and place to which the hearing is ad- journed, the court, or the referee, must hear the allegations and proofs of the parties, and determine the facts. Formerly Code Civ. Pro. § 2426, in part. For remainder of section see § § 185, 187 of this article. § 187. Decision. The decision of the court, or the re- port of the referee, must be in writing, and must be made _ and filed with all convenient speed. It must contain a state- ment of the effects, credits, and other property, and of the debts and other engagements, of the corporation, and of all other matters, pertaining to its affairs. Formerly Code Civ. Pro. § 2426, in part. For remainder of section see § § 185, 186 of this article. § 188. Use of original papers on hearing. The court or the referee is entitled to use, upon the hearing, the original petition, and the schedules annexed thereto; and the clerk must transmit them accordingly, upon the written order of the judge, or of the referee. In that case, they must be re- turned with the decision or report. Formerly Code Civ. Pro. § 2427, in part. For remainder of section see § 189 of this article. § 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 petition, by the insertion of additional items, or by making the statements or inven- tory fuller and in greater detail than as originally filed, with the jike effect as though said petition and schedules had been originally presented and filed as amended. Formerly Code Civ. Pro. § 2427, in part. For remainder of section see § 188 of this article. §, 190. Final order. Where the hearing is before a ref- eree, a motion for a final order must be made to the court, GENERAL. CorPorATION Law. gl 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 prescribed in the code of civil procedure for the service of a paper upon an attorney in an action. Where the hear- ing 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. Formerly Code Civ. Pro. § 2428. After filing notice of appearance, interested parties are entitled to notice of all applications made to the court. In re Wendler Machine Co., 2 App. Div. 16 (1896). § 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 sections * 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 bene- ficial 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 re- ceivers of its property. But in the case of a solvent cor- poration the court may, if there is no objection by credi- tors, 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 lia- bilities of receivers under article eleven of this chapter. Formerly Code Civ. Pro. § 2429, in part, as am’d by L. 19009, ch. 240. For remainder of section see §§ 192, 194 of this article. As to survival of causes of action against trustees, see Gen. Corp. Law, § 35. If there are violent dissensions between members of a benevo- lent society, the court will order dissolution, but not for mere differences of opinion or ordinary disputes. Fischer v. Raab, 57 How. 87 (1879). Where the final order is made because the directors cannot, *So in original. 92 GENERAL CorPorATION Law. agree, the court may order the sale and distribution of assets after payment of the liabilities and expenses of the receivership. Mat- ter of Woven Tape Skirt Co., 8 Hun 508 (1876). Where the directors of a corporation which has issued first mortgage bonds apply for a voluntary dissolution and appoint- ment of a receiver in order to protect the corporate property, expenses of the application may properly be made a charge to be first paid by the temporary receiver out of funds in his hands, although he was not appointed in an action brought by the stock- holders or their trustee. Matter of New Paltz, etc., Co., 27 Misc. 451 (1899). . The court has no power to grant the petitioners an extra allow- ance. In re Tarrytown, etc. Ry. Co. 117 N. Y. Supp. 695 (1909). Result of Voluntary Dissolution. See cases, Gen. Corp. Law, § 101, under “Result of Dissolution.” § 192. Appointment of director, trustee or other officer or stockholder as receiver. The court may, in its discre- tion, appoint a director, trustee, or other officer, or a stock- holder of the corporation, a receiver of its property. Formerly Code Civ. Pro. § 2429, in part. For remainder of said section see §§ 191, 194 of this article. See Judiciary Law, § 251 (Cons. L., ch. 30, L. 1909, ch. 35) pro- hibiting the appointment of court clerks in the county of New York except upon the consent of all parties. § 193. Certain sales, transfers and judgments void. A sale, assignment, 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 ap- pointed in the special proceeding, and as against the credi- tors of the corporation. Formerly Code Civ. Pro. § 2430. The word “transfer” means a passing over to another of an existing right to the thing transferred, which right shall survive the transfer. It does not include extinguishment or satisfaction of a chose in action either by payment in full or part payment taken in full satisfaction. Sands v. Hill, 55 N. Y. 18 (1873). § 194. Omission, defect or default of receiver. In a pro- ceeding for the voluntary dissolution of a corporation, the GENERAL Corporation Law. 93 court may, in the furtherance of justice, upon notice to the attorney-general, and the attorney-general not object- ing, and upon such further notice to creditors or other in- terested 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 omis- sion, 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, re- port, order or judgment made in such proceeding. Formerly Code Civ. Pro. § 2420, in part. For remainder of section see §§ 191, 192 of this article. § 195. Exception of certain corporations. This article does not apply to an incorporated library society, to a re- ligious corporation, or to a select school or academy, incor- porated by the regents of the university or by the legisla- ture, or to a municipal or other political corporation. Formerly Code Civ. Pro. § 2431, in part. For remainder of section see § 177 of this article. Any corporation other than those excepted by this section may be dissolved under this article. Matter of American Dramatic Fund Assn., 22 Abb. N. C. 231 (1889), disapproving Re Sportsman Club, 15 Civ. Pro. 215. See Matter of Peekamoose Fishing Club, 51 N. Y. 51x (1897), where a membership corporation was dis- solved. ARTICLE 10 Dissolution of Stock Corporation without Judicial Proceedings [This article applies to stock corporations only and is, therefore, omitted.] *ARTICLE 1o-a Provisions Applicable to Temporary and Permanent Receivers of Corporations Section 225. Security. 226, Removal or new bond. 227. Notice to sureties upon accounting. * This article, consisting of §§ 225, 226 and 227, is new, added by L. 1909, ch. 240. 94 GENERAL CorRPORATION Law. § 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 sufficient sureties, in a penalty fixed by the court, judge, or referee, making the appointment, con- ditioned for the faithful discharge of his duties 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 made by law for the security to be given by a receiver or for increasing the same. The same provision is found in Code, § 715. See also Code, §§ 729 and 730, as to sufficiency of bond and amending defects. § 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 sec- tion. 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 re- moving a receiver. § 227. Notice to sureties upon accounting. A receiver who, having executed and filed a bond as provided for in section two hundred and twenty-five or section two hun- dred 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 present 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, GENERAL CorporaTIOn Law. 95 settled or allowed, unless the said notice pro- vided for in this section shall have first been given to the surety or sureties on the official bond of such receiver. ARTICLE 11 Powers, Duties and Liabilities of Receivers of Corporation SECTION 230. 231. 232. 233. 234. 235. 236. 237. 238. 230. 240. 241. 242. 243. 244. 245. 246. 247. 248. 240. 250. 251. 252. 253. 254. 255. 256. 257. 258. 259. 260. 261. 262. 263. 264. 265. 266. Application of this article. Receiver trustee of property. Receiver’s title to property. Transfer of assets of corporation to receiver. Security of receiver. Authority of single receiver. Authority where there is more than one receiver. Surviving receivers. Oath of receiver. General powers of receivers. Power of receiver to institute proceedings to recover assets. Power of receiver in the settlement of controversies. Power of receiver to employ counsel. Power of receiver to hold real property. Power of receiver to recover stock subscriptions. Duty of receiver to convert assets into money. Duty of receiver as to private sales. Duty of receiver to keep accounts. Duty of receiver to serve copy of report upon attor- ney-general and superintendent of banks. Duty of certain receivers to make reports. Duty of receivers to give notice to creditors. Delivery of property and payment of debts to re- ceiver after notice. Penalty for concealing property from receiver. Duty of receiver to call creditors’ meeting. Proceedings at creditors’ meeting. Deduction of disbursements and commissions by re- ceiver. Refunding consideration of subsisting contracts. Retention of funds for subsisting contracts and pend- ing suits. Payment of debts not due. Allowance of set-offs. Penalties recovered by receiver. Order of payment by receiver. Failure to file claim before first dividend. Second dividend by receiver. Surplus to stockholders. Disposition of moneys retained by receiver for suits. Duty of receiver as to unclaimed dividend. 96 GENERAL CorporATION Law. 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 vol- untary dissolution. § 230. Application of this article. Unless otherwise pro- vided the provisions of this article shall apply only to per- manent receivers appointed pursuant to section one hun- dred and six or section one hundred and ninety-one of this chapter. New; added by L. 1909, ch. 28. Section 106 provides for a permanent receiver in actions by judgment creditors for sequestration and also actions to dissolve a corporation. Section 191 provides for receivers in actions for voluntary dis- solution. Section 134 provides for the appointment of a permanent re- ceiver in an action to annul a corporation, as where a corporation is dissolved upon its voluntary application, see section 191. This article, therefore, applies to permanent receivers in actions brought under articles 6, 7, and 9, supra. Jurisdiction to appoint receivers of corporations is wholly statutory. The power to declare a forfeiture of corporate fran- chises was originally in England vested in the courts of law and was exercised in a proceeding brought by the Attorney-General in the name of the sovereign. The Court of Chancery never as- sumed jurisdiction in such cases until it was conferred by act of Parliament. Decker v. Gardner, 124 N. Y. 334 (1891); Matter of Coleman, 174 N. Y. 373 (1903); Attorney-General v. Utica In- surance Co., 2 Johns. Ch. 371 (1817); Attorney v. Bank of Niagara, Hopkins Ch. 354 (1825). ‘The court may order a reference to determine upon or report a proper person to be appointed receiver. Matter of Eagle Iron Works, 8 Paige Ch. 385 (1840), where the practice is stated. § 231. Receiver trustee of property. Permanent receivers shall be trustees of the property for the benefit of the credi- tors of the corporation and of its stockholders. Formerly R. S., pt. 3, ch. 8, tit. 4, art. 3, § 67, in part. GENERAL Corporation Law. 97 As to when directors are trustees in case of dissolution see Gen. Corp. Law, § 35. § Receiver’s title to property. Such receivers shall, from the time of their having filed the security required by. law, be vested with all the property, real or personal, vested or contingent, of the corpordtion. Thus am’d by L. 1909, ch. 240 and L, 1913, ch. 766. Formerly R. S., pt. 3, ch. 8, tit. 4, art. 3, § 67, in part. For the distinction between statutory receivers who take title and temporary receivers who take no title to the corporate property, see Decker v. Gardner, 124 N. Y. 334 (1891). § 233. Transfer of assets of corporation to receiver. In all cases where receivers have been or shall be appointed for any corporation of this state other than an insurance company on application by the attorney-general, all prop- erty, real and personal, and all securities of every kind and nature belonging to such corporation, no matter where lo- cated 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. Formerly L. 1884, ch. 285, § 1. The receiver takes title by virtue of the statute and no formal conveyance is necessary. Matter of Attorney-General v. Atlantic Mutual Life Ins. Co., 100 N. Y. 279. After property has passed into the possession of the receiver no lien can be acquired or action taken with reference thereto without leave of the court. Attorney-General v. Continental Life Ins. Co., 28 Hun 360, affd., no op., 93 N. Y. 630. § 234. Security of receiver. Before entering upon the duties of their appointment, such receiver shall give such security to the people of the state, and in such penalty, as the court shall direct, conditioned for the faithful dis- charge of the duties of their appointment, and for the due accounting for all moneys received by them. Formerly R. S., pt. 3, ch. 8, tit. 4, art. 3, § 66, in part. See Gen. Corp. Law, § 225 et seq. 98 GENERAL CorPoRATION Law. § 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. Formerly R. S., pt. 2, ch. 5, tit. 1, art. 8, § 2. . § 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. Formerly 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, removal or incapacity, shall be de- livered 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. Formerly R. S., pt. 2, ch. 5, tit. 1, art. 8 § 4. § 238. Oath of receiver. Before proceeding to the dis-. charge 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. Formerly 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 or to become due to such corporation, whether accruing or maturing before or after the dissolution thereof and whether vested or contingent at the time of such dissolu- GENERAL CorporaTION Law. 99 tion, in the same manner and with the like effect as such corporation 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 appointment of the receiver of such corporation, or unless it shall have been duly con- tracted by such receiver subsequent to his appointment; notwithstanding the notice to creditors the receivers may sue for and recover, any property or effects of the corpora- tion 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 cor- poration, whether attached, or delivered to them, or after- wards 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 attaching and keeping the same, to be allowed by the court having juris- diction ; 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 pub- lishing the same for two weeks in a newspaper, printed in the county, where the sale shall be made, if there be one; 5. To allow such credit on the sale of real property by them as they shall deem reasonable, subject to the provi-~ sions 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; 6. 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 judg- 100 GENERAL CORPORATION Law. ments, which may be an incumbrance on any property so sold by them; or to sell such property subject to such mort- gages, contracts, pledges or judgments; 8. To settle all matters and accounts between such cor- poration 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 com- pound with any person indebted to such corporation and thereupon to discharge all demands against such person. Formerly R. S., pt. 2, ch. 5, tit. 1, art. 8, § 7, except last clause of {1 1, beginning “Notwithstanding,” etc, from R. S., pt. 2, ch. 5, tit. 1, art. 8, § Io. Thus am’d by L. 1913, ch. 766. The receiver may disafirm any act, transfer or agreement in fraud of creditors. Real Property Law, § 268; Personal Property Law, § 19. = § 240. Power of receiver to institute proceedings to re- cover assets. Whenever any receiver of a domestic cor- poration, or of the property within this state of any for- eign 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 peti- tion, affidavit or other competent proof, show to the su- preme court, at a special term thereof, held within the judicial district wherein such appointment was made, that he has good reason to believe that any officer, stockholder, agent or employee of such corporation, or any other per- son whomsoever, has embezzled or concealed, or withholds or has in his possession or under his control, or has wrong- fully disposed of, any property of such corporation which of right ought to be surrendered to the receiver thereof; or that any person can testify concerning the embezzle- ment, 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 desig- GENERAL Corporation LAWS IOI nated 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 embezzlement, concealment, withholding, possession, control or wrongful disposition of such property; and at the time of making such order or at any time thereafter the court may, in its discretion, en- join and restrain the person or persons so ordered to ap- pear and be examined from in any manner disposing of any property of such corporation which may be in the pos- session 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 testimony taken upon such exam- ination 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 serving the order, as are allowed by law to wit- nesses subpcenaed 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. 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 con- cerning 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 aris- ing in the course of such examination, to the same extent 102 GENERAL CorpPoRATION Law, that might be done if the person so examined were testify- ing 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 con- cealing or withholding, or has in his possession or under his control, any property 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. Formerly L. 1808, ch. 534, §§ 1-5. See Gen. Corp. Law, § 312, as to notice to Attorney-General. § 241. Power of receiver in the settlement of contro- versies. If any controversy shall arise between the re- ceivers and any other person, in the settlement of any de- mands against such corporation, or of debts due to such corporation the same may be referred to one or more in- different 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 inten- tion to apply to any judge of the supreme court at cham- bers, 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. GENERAL Corporation Law. 103 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 appointment, the referee or referees appointed to hear said controversy shall have power to issue a commis- sion 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 before them on a hearing, in like manner as testimony taken on commission before jus- tices of the peace. The officer before whom they shall be selected, shall cer- tify such selection in writing. Such certificate, or the writ- ten agreement of the 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 sub- ject to the like duties and obligations, and shall receive the same compensation, as referees appointed by the supreme court, in personal actions pending 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. Formerly R. S., pt. 2, ch. 5, tit. 1, art. 8, §§ 19-25; §§ 10, 22, as amended by L. 1862, ch. 373, §§ 1, 4; § § 20, 21, as amended by L. 1907, ch. 476, § 1. § 242. Power of receiver to employ counsel. If the re- ceiver of a corporation employs counsel he shall within three months after he has qualified as receiver enter into a written contract fixing the compensation of such counsel at not exceeding a certain amount or a certain percentage 104 GENERAL CorporaTION Law. 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 account- ing. 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 ap- proved 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 expenses 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 rail- road corporation, or trust company to pay to any attorney or counsel any costs, fees or allowances until the amounts thereof shall have been stated to the special term as pro- vided 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 there- from by any party aggrieved thereby. Formerly L. 1883, ch. 378, § 2a, added by L. 1906, ch. 340, § 2, from “If the receiver,” to “in case of the intervention.” Sentence beginning “In case of the intervention.” L. 1883, ch. 378, § 5. Remainder of section, L. 1883, ch. 378, § 4, in part, as amended by L. 1896, ch. 139, § I. § 243. Power of receiver to hold real property. A re- ceiver, appointed by or pursuant to an order or a judgment, in an acti6n in the supreme court or a county court, or in a special proceeding for the voluntary dissolution of a cor- poration, may take and hold real property, 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. GENERAL CorporATION Law. 105 Formerly Code Civ. Pro. § 716, in part. For remainder af section see Code Civ. Pro. § 716. § 244. Power of receiver to recover stock subscriptions. If there shall be any sum remaining due upon any share of stock subscribed in 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 proceeding for the recovery of such sum, without the consent of any credi- tors of such corporation. Formerly R. S., pt. 3, ch.'8, tit. 4, art. 3, § 60. § 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. Formerly R. S., pt. 2, ch. 5, tit. 1, art. 8, § 26, in part. § 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 application 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 authorized by the said court to sell or convey the prop- erty, 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. Formerly 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 inter- ested therein, shall be at liberty, at all reasonable times, to have recourse. Formerly R. S., pt. 2, ch. 5, tit. 1, art. 8, § 26, in part. § 248. Duty of receiver to serve copy of report upon at- torney-general and superintendent of banks. All receivers 106 GENERAL CorporATION Law. of insolvent corporations 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 Janu- ary 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 respective 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. Formerly L. 1880, ch. 537, § 1, as amended by L. 1881, ch. 639, § 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 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 com- pany, with the superintendent of insurance; and in each case with the attorney-general an account exhibiting in de- tail the receipts of his trust, and the expenses paid and in- curred therein during the preceding six months. Of the intention to present such account, as aforesaid, the attor- ney-general, and also the surety or sureties on the official GENERAL Corporation Law. 107 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. Formerly L. 1883, ch. 378, § 4, in part, as amended by L. 188s, ch. 40, § 1, and L. 1896, ch. 139, § 1. § 250. Duty of receivers to give notice to creditors. The receivers 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 at a 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 publication 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. Thus am’d by L. 1900, ch. 28. Paragraphs 1-3, formerly R. S., pt. 2, ch. 5, tit. 1, art. 8, § 8. Paragraph 4, R. S., pt. 3, ch. 8, tit. 4, art. 3, § 70. § 251. Delivery of property and payment of debts to re- ceiver after notice. After the first publication of the notice of the appointment of receivers, every person having the possession of any property belonging to such corporation, and every person indebted to such corporation, shall ac- count and answer for the amount of such debt and for the value of such property to the said receivers. Formerly R. S., pt. 3, ch. 8, tit. 4, art. 3, § 72, in part. 108 GENERAL CoRPORATION Law. § 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 for- feit double the amount of such debt, or double the value of such property so concealed; which penalties may be re- covered by the receivers. Formerly 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 corpora- tion, within four months from the time of their appoint- ment by a notice to be published in the same manner, as hereinbefore directed respecting the publication of the no- tice 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,” formerly R. S., pt. 3, ch. 8, tit. 4, art. 3, § 74, in part. Remainder formerly R. S., pt. 2, ch. 5, tit. 1, art. 8, § 27. § 254. Proceedings at creditors’ meeting. At such meet- ing, 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 rec€ivers declared. From “At such meeting” to “thereafter,” formerly R. S., pt. 2, ch. 5, tit. 1, art. 8, § 28, in part. Remainder formerly R. S., pt. 3, ch. 8, tit. 4, art. 8, § 74, in part. The claims of creditors are presentable when the receiver is appointed and that date fixes their status and amount regardless of when they are in fact presented. Peo. v. Am. Loan & Tr. Co, GENERAL CorporaTion Law. 109 172 N. Y. 371 (1902); Peo. v. Merchants’ Trust Co., 187 N. Y. 203 (1907). § 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. Formerly R. S., pt. 2, ch. 5, tit. 1, art. 8, § 29. § 256. Refunding consideration of subsisting contracts. If there sha!l be any open and subsisting engagements or contracts of such corporation, which are in the nature of insurances or contingent engagements of any kind, the re- ceivers 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 proportion to the time which shall remain of any risk as- sumed 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 can- celed and discharged as against such receivers. Formerly 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 en- gagements. If any suit be pending against the corpora- tion or against the receivers, for any demand, the receivers may retain the proportion which would belong to such de- mand if established, and the necessary costs and proceed- ings, in their hands, to be applied. according to the event of such suit, or to be distributed in a second or other dividend. Formerly R. S., pt. 3, ch. 8, tit. 4, art. 3, §§ 77, 78. IIo GENERAL CORPORATION Law. § 258. Payment of debts not due. Every person to whom a corporation shall be indebted on a valuable consideration, for any sum of money not due at the time of such distribu- tion, but payable afterwards, shall receive his proportion with other creditors, after deducting a rebate of legal in- terest upon the sum distributed, for the time unexpired of such credit. Formerly 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 subsisted 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 hereinbefore 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 formerly R. S., pt. 2, ch. 5, tit. 1, art. 8, § 36. Second paragraph formerly 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. Formerly R. S., pt. 2, ch. 5, tit. 1, art. 8, § 30. § 261. Order of payment by receiver. The receivers shall distribute fhe 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. GENERAL CORPORATION Law. / IIlI 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 (:) formerly R. S., pt. 3, ch. 8, tit. 4, art. 3, § 70, in part; 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, in part; 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, § 79, in part. The wages of employees of domestic corporations doing busi- ness in the State are preferred to every other debt or claim. Labor Law, § 9 (Cons. Laws, ch. 31; L. 1909, ch. 36). § 262. Failure to file claim before first dividend. Every creditor who shall have neglected to exhibit his demand before the first dividend, 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 divi- dend, before any distribution be made to the other creditors. Formerly R. S., pt. 3, ch. 8, tit. 4, art. 3, § 81, in part. § 263. Second dividend by receiver. If the whole of the property of such corporation be not distributed on the first dividend, the 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 cor- poration was situated. Such second dividend shall be made in all respects in the 112 GENERAL CorPoRATION Law. same manner as herein prescribed in relation to the first dividend, and no other shall be made thereafter among the creditors of such corporation, except to the creditors having suits against it, or against the receivers, pending at the time of such second dividend, and except of the moneys which may be retained to pay such creditors, as herein pro- vided. First paragraph formerly R. S., pt. 3, ch. 8, tit. 4, art. 3, § 80. Second paragraph formerly R. S., pt. 3, ch. 8, tit. 4, art. 3, § 81, in part. § 264. Surplus to stockholders. If after the second divi- dend is made, there shall remain any surplus in the hands of the receivers, they shall distribute the same among the stockholders of such corporation, in proportion to the re- spective amounts paid in by them, severally, on their shares of stock. ‘ Formerly 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 terminated, they shall apply the moneys retained in their hands for that purpose to the payment of the amount recovered, and their necessary charges and ex- penses ; 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 corpora- tion, in the same manner as herein directed in respect to a second dividend. Formerly R. S., pt. 3, ch. 8, tit. 4, art. 3, § 84. § 266. Duty of receiver as to unclaimed dividend. If any dividend¢that shall have been declared shall remain un- claimed by the person entitled thereto for one year after the same was declared, the receivers shall consider it as re- linquished, and shall distribute it, on any subsequent divi- dend, among the other creditors. Formerly R. S., pt. 2, ch. 5, tit. 1, art. 8 § 42. GENERAL Corporation Law. 113 § 267. Effect of failure to file claim before second divi- den. After such second dividend shall have been made the receivers shall not be answerable to any creditor of such corporation, or to any person having claims against such corporation, by virtue of any open or subsisting engage- ment, 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. Formerly R. S., pt. 3, ch. 8, tit. 4, art. 3, § 82. See Gen. Corp. Law, § 303. § 268. Final accounting by receiver. A receiver shall apply within one year after qualifying as such for a final settlement of his accounts and an order for distribution, or shall apply to the court upon notice to the attorney-gen- eral for an extension of time, setting forth the reasons why he is unable to close his accounts, which order may be granted in the discretion of the court. The attorney-gen- eral 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 ex- piration of one year after the receiver qualifies; and it shall be the duty of the attorney-general after the expira- tion 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 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. Formerly Code Civ. Pro. § 2431b, added by L. 1906, ch. 293, 2. § 269. Notice of final accounting. Previous to rendering such account the receivers shall insert a notice of their in- 114 GENERAL CorporaATION Law. tention 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. Said receivers shall also give notice to the sureties on their official bonds, as provided in section two hundred and twenty-seven of this chapter. Thus am’d by L. 1909, ch. 240. Formerly 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 ac- count, 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 en- gagement, and upon all the stockholders of such corpora- tion. Formerly R. S., pt. 3, ch. 8, tit. 4, art. 3, § 80, in part. § 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. Formerly R. S., pt. 3, ch. 8, tit. 4, art. 3, § 88. § 272. Further accounting. Such receivers shall also ac- count 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 unclafmed dividends. Formerly R. S., pt. 3, ch. 8, tit. 4, art. 3, § 80, in part. § 273. Removal of receiver. Such receivers may be re- moved by the court. Formerly R. S., pt. 3, ch. 8, tit. 4, art. 3, § 85, in part. GENERAL CorPorATION Law. 115 § 274. Vacancy. Any vacancy created by removal, death or otherwise may be supplied by the court. Formerly R. S., pt. 3, ch. 8, tit. 4, art. 3, § 85, in part. § 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 re- ceived 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 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 re- ceiver 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 no- tice 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 per- mitted 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 pro- ceed 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 par- ticularly in the collection of the property and debts vested 116 GENERAL CorporaTION Law. 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 prop- erty 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 thereupon cease; but he shall, notwith- standing, remain subject to any liability he may have in- curred, at any time previous to the granting of such order, in the management of his trust. The expense of all proceedings in effecting such renun- ciation shall be paid by the receiver making the application. Thus and am’d by L. 1909, ch. 28. Formerly 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 subject to the control of the court and may be compelled to account at any time. Formerly R. S., pt. 3, ch. 8, tit. 4, art. 3, § 85, in part. § 277. Commissions and expenses of receiver in voluntary dissolution. A receiver appointed pursuant to article nine is entitled, in addition to his necessary expenses, to com- missions 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 commensurate with the services rendered by said re- ceiver. Formerly Code Civ. Pro. § 2431a, added by L. 1906, ch. 293, § 2. GENERAL Corporation Law. 117 § 278. Commissions and expenses of receiver except in voluntary dissolution. A receiver of a corporation, except a receiver appointed in proceedings for its voluntary dis- solution, 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 except upon a final accounting such a receiver shall not receive on account 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. allowance 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 compensa- tion herein provided shall be divided between said receivers. Formerly L. 1883, ch. 378, § 2, as am’d 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 corpora- tions. 301. Officers and agents may be compelled to testify in certain actions. 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 cer- tain cases. 306. Appointment of receivers of property of corpora- tions. 118 GENERAL Corporation Law. 307. Judicial suspension or removal of officer of corpora- tion. 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 re- ceiver and to facilitate closing affairs of receiver- ship. 312. Service of papers upon attorney-general. 313. Designation of depositories of funds in order ap- pointing receiver. 314. Application to the court in certain actions and pro- ceedings. 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 cor- porations. Articles fifth, sixth or seventh of this chapter do not apply to a religious corporation; or to a municipal or other political corporation, 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 trus- tees of such a corporation; and in aid of its liquidation under such dissolution. Formerly Code Civ. Pro. § 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 jts corporate rights, or will tend to convict him of a criminal offense, or to subject him to a penalty or for- feiture. But his testimony shall not be used as evidence against him in a criminal action or special proceeding. Formerly Code Civ. Pro. § 1805. *So in original. GENERAL CorporaTIon Law. 119 § 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 ac- tion, before or after final judgment, and with or without security, grant an injunction order, restraining the credi- tors of the corporation from bringing actions against the defendants, 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 expressly pre- scribed 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. Formerly Code Civ. Pro. § 1806. See Gen. Corp. Law, § 184. § 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 requiring 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 de- fault 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. Not- withstanding such order any such creditor who shall ex- hibit and prove his claim in the manner directed thereby, with proof, by affidavit or otherwise, that he has had no notice or knowledge thereof in time to comply therewith, any time before an order is made directing a final distribu- tion 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 corpora- 120 GENERAL CoRPORATION LAw. tion then remaining undistributed may render possible, as if his claim had been exhibited and proved within the time limited by such order. Formerly Code Civ. Pro. § 1807. § 304. When attorney-general must bring certain actions. Where the attorney-general has good reason to believe that an action can be 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 attorney-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-general 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 pro- cedure applies thereto, and to the action brought in pur- suance thereof. Formerly Code Civ. Pro. § 1808. For further cases see Gen. Corp. Law, § 132. § 305. Requisites of injunction against corporations in certain cases. An injunction order, suspending the general and ordinary business of a corporation, or suspending from office, or restraining from the performance of his duties, a trustee, director, or other officer thereof, 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. Formerly Code Civ. Pro. § 1809, in part. GENERAL CorporaTIoN Law. 121 § 306. Appointment of receivers of property of corpora- tions. 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 seventh 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 probably 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 corporation. 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 corporation, 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 ap- plication for his appointment must be given to the proper officer of the corporation. Formerly Code Civ. Pro. § 1810. § 307. Judicial suspension or removal of officer of cor- poration. A trustee, director, or other officer of a corpora- tion shall not be suspended or removed from office, by a court or judge, otherwise than by the final judgment of a competent court, in an action brought by the attorney-gen- eral, as prescribed in section ninety of this chapter. Formerly Code Civ. Pro. § 1811. See Gen. Corp. Law, § 34. 122 GENERAL CorpoRATION Law. § 308. Application of the last three sections. The last three sections 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 an- other 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. Formerly Code Civ. Pro. § 1812, in part. For remainder of section see Code Civ. Pro. § 1812. § 309. Misnomer not available in action against stock- holder. 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, with- out 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. Formerly Code Civ. Pro. § 1813, in part. For remainder of section see Code Civ. Pro. § 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 corporation in the hands of a re- ceiver 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 GENERAL Corporation: Law. 123 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 mar- kets in the city of New York or elsewhere, for the day on which such appraisal or report may be required, by ascer- taining the range of the market and the average of prices as thus found, running through a reasonable period of time. Formerly 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 inter- ests of the stockholders, creditors, policy-holders, depositors or other beneficiaries interested in the proper and speedy distribution of the assets of any insolvent corporation 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 corporation and appointing a receiver thereof in his stead, or, 2. To compel him to account, or, 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 receivership, and Any appeal from any order made upon any motion under this section shall be to the appellate division of the depart- ment in which such motion is made. Formerly 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 proposed thereon to the court, in every action or proceeding for the dissolution of a corpora- tion or a distribution of its assets, shall, in all cases, be served on the attorney-general, in the same manner as pro- vided by law for the service of papers on attorneys who 124 GENERAL CorporaTION Law. 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 judgment, 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 corpora- tion shall pay to any person any money directed to be paid by any order or judgment made in any such action or pro- ceeding, until the expiration of eight days after a certified copy of such order or judgment shall have been served as aforesaid upon the attorney-general. Formerly L. 1883, ch. 378, § 8. The requirement applies to proceedings for voluntary dissolu- tion. People v. Seneca Lake Grape & Wine Co., 52 Hun 174 (1889). The Attorney-General may accept short notice of the pro- ceedings. Matter of Peekamose Fishing Club, 151 N. Y. 511 (1897). § 313. Designation of depositories of funds in order ap- pointing receiver. All orders appointing receivers of cor- porations shall designate therein one or more places of de- posit, 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 elsewhere, except upon the order of the court upon due notice given to the attorney-general. Formerly 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 cor- poration against which proceedings are taken is ldcated, 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 dis- trict in which the action is triable. GENERAL CorPorATION Law. 125 Formerly L. 1883, ch. 378, § 9, as am’d by L. 1896, ch. 282, § 2.- See Gen. Corp. Law, § 3, subd. 10, and §§ 108 and 183. § 315. County wherein action may be brought by attor- ney-general on behalf of the people. An action or proceed- ing brought by the attorney-general on behalf of the people of the state against any corporation for the purpose of pro- curing 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. Formerly L. 1883, ch. 378, § 1, in part, as am’d by L. 1896, ch. 282, § 1. § 316. Preferences in actions or proceedings 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 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. Formerly L. 1883, ch. 378, § Io. ARTICLE 13 Alteration and Repeal of Charter of Corporation 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. The State Constitution, as adopted in 1846 and as revised in 1894, provides as follows: “Corporations may be formed: under general laws; but shall not be created by special act, except for municipal purposes, and in cases where, in the judgment of the legislature, the objects of the corporation cannot be attained under general laws. All general and special acts passed pursuant to this section may be altered from time to time or repealed.” Const., 126 GENERAL CORPORATION Law. art. 8, § 1. The necessity for a special act is entirely within the judgment of the Legislature not open to judicial review. Met. Bank v. Van Dyck, 27 N. Y. 400 (1863). Prior thereto the Revised Statutes, passed in 1827, provided that “The charter of every cor- poration, that shall hereafter be granted by the legislature, shall be subject to alteration, suspension and repeal, in the discretion of ‘the legislature.” This statutory provision was repealed in 1890, but it was thought that the Legislature, by such repeal, might have relinquished its control of charters of corporations organized during the interval subsequent to the Revised Statutes and prior to 1846. The statutory provision was, therefore, re-enacted by Laws of 1895, ch. 672, as section 40 of the General Corporation Law (now section 320). When this provision was first inserted in the Revised Statutes it was the result of public alarm and pro- test caused by the decision of the United States Supreme Court in the celebrated case of Trustees of Dartmouth College v. Wood- ward, 4 Wheaton 518 (1819). This statute became the permanent policy of the State when the Constitution of 1846 was adopted. In the Dartmouth College case the court held that if a State wished to alter charters it must reserve the right to do so. The reservation becomes a part of the charter of every corpora- tion, whether organized under a general act or by special statute, thus preventing it from becoming irrevocable. Lord v. Equitable Life Assur. Soc. 194 N. Y. 212 (1909); Pratt v. City of N. Y., 183 N. Y. 151 (1905). § 321. Conflicting corporate laws. If in any corporate law there is or shall be any provision in conflict with any provisions of this chapter 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. Under the above section provisions in the Membership Corpora- tions Law and the Religious Corporations Law similar to and not in conflict with the provisions of the General Corporation Law must be deemed to be in addition to the provisions of said last mentioned laws and where a conflict exists such other provisions shall prevail over the provisions of the General Corporation Law. GENERAL CorPoraTION Law. 127 Repeal by Implication. A repeal of statutes by implication is not favored in the law; and when both the latter and former statute can stand together, both will stand unless the former is expressly repealed, or the legislative intent to repeal it is very manifest. Peo. ex rel. Kings- land v. Palmer, 52 N. Y. 83, 88 (1873); Davis v. Supreme Lodge Knights of Honor, 165 N. Y. 159 (1900). Where it is intended to alter or repeal an existing statutory enactment, the act itself should contain provisions to that effect, or it should be plainly manifest that such was the design, by the latter act being repugnant to and inconsistent with the former. Mark et al. v. The State, 97 N. Y. 578 (1885); Coxe v. The State, 144 N. Y. 396 (1895). A repeal by implication because of inconsistency or repugnancy should never be declared where a reasonable construction will harmonize statutes alleged to be conflicting. Peo. ex rel. Woods v. Crissey, 91 N. Y. 632 (1883). The invariable rule of construction in respect to the repealing of statutes by implication, is, that the earliest act remains in force, unless the two are manifestly inconsistent with and repugnant to each other, or, unless in the latest act, some express notice is taken of the former, plainly indicating an intention to abrogate it. Bowen v. Lease, 5 Hill 226 (1843). Although a statute is not expressly repealed by a subsequent enactment upon the same subject, yet, if it appears by the latter statute that it was intended to cover the subject-matter of the former, the prior statute will be deemed by implication to have been repealed. Peo. v. Vosburgh, 76 Hun 562 (1894); In re N. Y. Institution for Deaf, etc., 121 N. Y. 234 (1890). When a statute amends a former statute “so as t¢ read as fol- lows,” it operates as a repeal by implication of inconsistent provi- sions in the former law, and of provisions omitted in the amended law. In re Estate of Prime, 136 N. Y. 347 (1893); Guaranty Trust Co. v. Troy Steel Co., 33 Misc. 484 (1900). 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. The words “such repeal shall not revive a law repealed by any law hereby repealed, but shall include all laws amendatory of the laws hereby repealed,” which were contained in the former section 34 of the General Corporation Law, were omitted by the Consoli- ¥28 GENERAL CorporaTION Law. dated Laws from the foregoing section and were re-enacted into the General Construction Law. Reviver of Repealed Statutes. A legislative intent to revive a law which has, by legislative action, already been wholly annihilated, is not alone sufficient to accomplish such revival; there must be some legislative expression using language equivalent to a re-enactment. Bank of Metropolis v. Faber, 150 N. Y. 200 (1896); Same v. Same, 1 App. Div. 341 (1896), disapproving Ottman v. Hoffman, 7 Misc. 714, infra. § 331. Construction. Nothing in this chapter shall be construed to impair any right or liability which any exist- ing corporation, its officers, directors, stockholders or credi- tors may have or be subject to or which any such corpora- tion, 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 creating or defining any such right or liability, unless such special act is repealed by this chapter or the other general laws hereinbefore mentioned. Matter contained in former section 36 of the General Corpora- tion Law and omitted from this section has been enacted as part of the General Construction Law. The rule that a special act is not affected by a subsequent gen- eral act does not apply if the intent is manifest that the general act should apply to all cases, whether existing under general or special acts. McKenna v. Edmundstone, 91 N. Y. 233. § 332. When to take effect. This chapter shall take effect immediately. Section 35 of the former General Corporation Law, containing a saving clause, was omitted from this law in the enactment of the Consolidated Laws because similar provisions were embodied in the General Construction Law, § 93. ScHEDULE oF Laws REPEALED Revised Statutes..Part 1, chapter 18, ............. All Revised Statutes..Part 3, chapter 8, title 4, sections 2, 42 Revised Statutes..Part 3, chapter 8, title 4, article 3, 8§ 66-91 Laws of Chapter Section MOUs OR 23 Sie syes trees c+ hesnnssacd waeuieandeee oe All WBE3Ge (JBL aiedoneha se Moree eee renceans All GENERAL CorporATION Law. 129 Laws of Chapter Section 1815.... 47, 202...... nda e aaa fii cae va wtiaie ewes All WIG. cs SBe veces avaeee ees th408 eae oveNs All TOUG eee) 228 ecutive decade, Sogeaece ae aha Glade Bh araae All TSI. we: OP dace r mad eRe eh ORs SARS All TOTO. hii “TORS vegeta cceindn dala igo aso ohare ae wats All TO2T cians: DA Pau. ah aielennies thaw Ateeeee arent aid eae All T822i wise TBs sand) hakad ccadv shames ised eens All TS25 saiwel 325s + Gin@anasisaeeaaeulen Gowen Oe ii es ares 4-Il, 13, 14 17, 18 1828...... DD eeaaaiuaidrgaen aon canna a ned 1, 1 76, 77, 457 ie (2d Meet) 1886 ese? <2BAy SIG: a cck oie sere yee wa seamen Saas All TS38 ica, 1605. TO%; SOF ioc ae sc hawt eee ae Saas All W839 sass QIBss sess ceases staves eee s see tea ewes All ABAD toate, TOS Ss cise sale edensereaceap aloes wagtea arenes All TSAG ser. DSS ics aoe ne ew peadin Rak cia we Fame All TSAO soos. BIG abe SA tad See Redes 17, 18 ASAP css WOOK wae 04 sess warded S caleiaiata a uaste ioaeaet es 3, 4 1847.... 210, 222, 270, 272, 287, 398, 404, 405... All 1848.... 37, 40, 45, 140, 250, 265, 360......... All IBAQsess. 250; 302s «sede scenes saws 4 sare oe a wR All W8SOeees.. FE AAO A cave ye cca vanepeenad Seamnes All I851.... 14, 19, 98, 107, 487, 407...........4-- All T8§25.%3. (22B; 3723 ccadsamacta s weses sees sareneesy All 1853..-. 53; I17, 124, 135, 245, 333....-.....-. All TOS 3c. AZ Viera as winser owen einei ae easier ecard an I, 2,4 1853.3<3 480, 502, 626. sc0de0ssaw aw deed ce aoie ss Ai 1854.... 3, 87, 140, 201, 232, 269, 282, 312.... All 1855.... 301, 302, 390, 478, 485, 495, 546, 559... All 1856.... 65, 20, 83, 185, 202, 262, 444, 546, BSG p 043) 77 Ons. «ease eaniees eons 4 All TSS Sinicaiy. TO, L283: BAB wesc e gees eet Sa si oath termes s All 1859.... 200, 31], 455.. cece c ce ccceececeetenes All 1860.2... 116; 260) 523s icc vaccines neww scaasion os Alt Y861.... 140, 170, 215, 238........ cece eee eee All 1862.... 205, 248, 425, 438, 449, 472........... All 863.020 63, 134. 340s wanacssonws so ewe ns Waele sa All 1864.... 85, 337, 517, 582.....e ccc ee eee e eens All 1865.... 234, 246, 307, 691, 780.......... 0000 ee All 1866.... 73, 259, 322, 371, 697, 780, 709, 838.. All 1867.... 12, 40, 248, 254, 419, 480, 500, 775, 906, 937, 960, 971, 974.......0000- All 1868.... 253, 200, 573, 780.... cece cece cece eee All 1869.... 234, 237, 605, 706, 844, QI17.......... All 1870.... 124, 135, 322, 443, 508, 773......-..-- All 1871.... 95, 481, 535, 560, 652, 657, 669, 697, BSF. cccrwaaa ds mages Seueaed wa ce Aas All 1872.... 81, 128, 146, 248, 283, 350, 374, 426, 609, G11, 779, 780.......- cece eens All 1872... B20... cece cece ee cette etn een eens All except 20 130; Laws of 1872.... 1873.... 1874.... 1875.... 1875.... 1875.... 1876... 1877... 1878.... 1879.... 1880.... 1880.... 1880.... 1881.... 1882.... 1883.... Id04.... 1884.... 1884.... 1885.... 1886.... 1887.... 1888... 1889.... 1890.... GENERAL CorporATION Law. Chapter 820; 84secnnccoacsne news ete wa wie I51, 352, 432, 440, 469, 616, 634, 710, ABP SUA ose sian esas aiesn Gusads beatae aascivass ies 76, 143, 149, 240, 288, 430 ........ 4, 58, 88, 108, 113, 119, 120, 159, 193, 256, 319.........00008 Dheteesaeaea BAF ishccikerniuig eens aes ee owen aw 365, 445, 510, 586, 598, 606, 611...... 77, 135, 190, 198, 280, 358, 373, 415, A35;, -A4Oc acon ice cesyed ccacanmaws 103, 158, 164, 171, 224, 266, 311, 374.. 35, 61, 85, 121, 163, 203, 210, 261, 264 B10, 9345: 30 Ab cies vend remit depts 214, 253, 200, 203, 350, 377, 393, 395, 413, 415, 441, 503, 505; 512, 54I.... 5, 85, 90, 94, 113, 133, 155, 182, DBS BOG. IBA Toy luca tun wihhiei ache auecerwannne 254, 263, 267, 349, 415, 417, 474, 484, 510, 537, 575, 582, 583, 585........ 22, 58, 77, 116, 117, 148, 213, 232, 295, 296, 311, 313, 321, 337, 338, 351, 399, 422, 464, 468, 470, 472, 485, 551, 580, 639 649, 650, 674, 685............. 73, 82, 140, 273, 289, 290, 306, 300, 331, 340; 353): 393) 405 view sim cere ace aces 46, 71, 102, 216, 232, 237, 238, 240, 287, 323, 361, 378, 381, 382, 384, 386, 387, 388, 409, 482, 483, 497............ 367, 386, 397, 421, 422, 430, 441, 444... 40, 84, 127, 141, 153, I7I, 305, 369, 422, 423, 489, 498, 535, 540, 549.... 65, 182, 271, 275, 310, 321, 322, 403, 415, 509, 551, 579, 586, 5092, 601, © 605; 634). O42e65 severe ccers cca aes 450, 486, 536, 570, 601, 616, 622, 724.. 189, 306, 313, 359, 394, 447, 462, 513, S14) IS4O; SOO sevinslnce-aae wiwnatere cess 57, 76, 78, 236, 242, 281, 332, 360, 426, 519, 524, 531, 532, 504....-....0008 23, 98, 119, 193, 292, 416, 421, 483, 497, 505, 508, 543, 563............ Section All All All All 2, 4, 8 All All All All All 187, All I, 7 3, subd. 5, part relating to receivers ap- pointed as pre- scribed in Code Civil Proced- ure, § 2429. All All All All All All All All All All 1891.... 1892.... 1892.... 1892.... 1894.... 1895.... 1896.... 1896.... 1898.... 1898.... 1899.... 1900.... I9O1.... 1902.... 1903.... 1904.... 1905.... 1906.... I907.... 1908.... GENERAL CoRPORATION Law. 17F:, FOAM; 739), FOO sisi cos wed o 4 cece 8a de 96, 214, 355, 500, 538.........---22466 0, OO; 285) niras eva sin eee dtiecticnna deena cela D7 o 5 ecu ce posta fa aiepnceieece sro ea eae Re 131 Section Part relating to appraisal of property of in- solvent corpo- rations All All 4 All except 37 All All All I, part adding § 57 to L. 1892, Ch. 688 Part relating to receivers of corporations All Code Civil Procedure........432, subd. 2, from words “by a writ- ing” to “an authentication;” 716, pt. relating to corpora- tions; 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 MEMBERSHIP CORPORATIONS LAW Explanatory Notes of Revision Commissions The Membership Corporations Law was enacted in 1895 (L. 1895, Chap. 559) and was rewritten without substan- tive change by the Board of Statutory Consolidation in Igog, and re-enacted as Chap. 40 of the Laws of 1909. Accompanying the report of the Commissioners of Statu- tory Revision in 1895 an explanatory memorandum was presented as follows: Explanatory Note of Statutory Revision Commission. The membership corporations law is a revision of existing stat- utes authorizing the formation of corporations for pufposes other than pecuniary profit, except medical, dental and veterinary cor- porations, which are to be provided for in the public health law; educational corporations, which are regulated by the university law, and religious corporations, for which provision is to be made in a separate chapter, to be known as the religious corporations law. The laws repealed by this chapter provide for the organiza- tion and government of various classes of benevolent, charitable, social and recreative corporations on the same general plan, but with great diversity in detail. The reduction of such diversity of detail to a uniform system has been the leading principle in the construction of this chapter. The general corporation law already provides certain uniform pro- visions for the incorporation and government of these and nearly all other corporations. Such provisions of laws to be repealed by this chapter as are peculiar to .particular classes of these cor- porations, as it has been deemed necessary to retain, are re- enacted, respectively, in articles II-XII of this. chapter, while article I of this chapter represents the uniform general provisions common to them all. To effect such degree of uniformity many slight changes in nearly every class of such corporations have been found necessary, none of which, however, substantially dis- turb their methods of government or of accomplishing their cor- porate purposes. Thus, the uniform maximum number of signers 133 134 MempersHip Corporations Law. of certificates of incorporation and of directors operates as an enlargement of the maximum number, in many cases, and the uniform minimum number requisite operates in many cases as a reduction; and the scope of by-laws expressly authorized has been, in many cases, enlarged. By this system of revision many repetitions of substantially the same provision, with slight varia- tions have been avoided, and a single uniform statement substi- tuted. This chapter includes what was originally proposed to be in- cluded in both the membership corporations law and the mixed corporations law. The certificates of stock issued by most of the corporations classed as mixed corporations are, in reality, mere certificates of membership, issued on payment of membership fees and dues, and not entitling holders thereof to any dividends. A separate chap- ter for mixed corporations is, therefore, not necessary, and sec- tion 3 of the general corporation law may be amended by omitting the references to mixed corporations. Several provisions, now applicable to corporations created by general laws only, are extended to corporations chartered by special laws. This will obviate the necessity of frequent applica- tions for special legislation to accomplish the same result. The commissioners believe the following to be the only other changes in the substance of existing law proposed by this chap- ter, besides those above referred to: 1. By section 4, a membership corporation, whether created by general or special law, is authorized to extend its corporate pur- poses by filing a supplemental certificate. This is new as to cor- porations created by special law and as to most corporations cre- ated by general law. 2. Section 5, authorizing the incorporation of unincorporated associations, is new as to all classes of such associations except political clubs and associations for training nurses. 3. Section 6, authorizing membership corporations created by special law to reincorporate under the general law and to be gov- erned by it only, is new. 4. Section 7, authorizing corporations of the same, or of a kindred nature, to consolidate, is new as to all membership cor- porations. ; 5. Section 8, relating to by-laws, is broader in its terms than any law repealed by this chapter, and is for the first time made applicable to, corporations created by special law. 6. Section 10, as to filling vacancies in boards of directors, is for the first time extended to corporations created by special law. 7. The provision of nearly all the laws repealed by this chapter, requiring the filing of an annual inventory, has been omitted, and instead, by section 11, the directors are required to report at the annual meeting. 8. The liability of directors where it now exists is not sub- stantially changed by section 11, but such liability is extended \ MEMBERSHIP CorporaTions Law. 135 uniformly to the directors of membership corporations, as to many of which such liability does not now exist. 9g. The prohibitions contained in several laws on the officers or directors receiving compensation or being interested in corporate contracts, are omitted, and instead such compensation or interest is permissible, if authorized by the by-laws. (See section 12.) to. By section 13 all membership corporations are required to obtain leave of the court to sell real property, after the concur- rence of two-thirds of the directors. In many of the existing laws, a vote of the directors at a meeting at which two-thirds are pres- ent, with leave of the court, is sufficient; while in others, a vote of the members is also necessary. The requirement of leave of the court is new as to some membership corporations. 11. Section 13; providing that the court may confirm a sale, etc., made without leave of court, but not so as to affect subse- quent purchasers and incumbrances, is new. 12. The provision of section 13, authorizing any membership corporation to convey, without leave of court, parts of its real property to members for cottages, etc., is new, except as,to social clubs. 13. Section 14, authorizing the changing of number of directors, is new as to many membership corporations created under laws repealed by this chapter. The extension of such provision to cor- porations created by special law is also new. 2 14. The provision of section 16, authorizing a judicial investiga- tion of the affairs of a membership corporation on the application of an aggrieved member, is new. 15. By section 17, all membership corporations, except educa- tional corporations subject to the regents, receiving state money, are required to report to comptroller. This is new, except as to corporations maintaining hospitals, orphan asylums and the like. Cemetery Corporations. 16. The provisions of section 45 authorizing a cemetery corpora- tion to acquire land by condemnation, is new. The constitutional objection to such condemnation raised in re Deansville Cemetery Association, 66 N. Y. 569, is obviated by the limiting clause at the beginning of the section. “It seems to be settled law that lands may be condemned for the purpose of a public cemetery, where the public in general have a right to obtain interment, and that lands taken for the purpose of enlarging a public cemetery is devoting it to a public use.” (Farneman v. Mt. Pleasant Cem. Ass’n, Ind. 35 N. E. Rep., 271, citing Ass’n v. Beecher, 53 Conn. 551; Balch v. Com’rs, 103 Mass. 106; Edgecumbe v. Burlington, 46 Vt. 218.) 17. The provision of section 47, authorizing a cemetery corpora- tion to prescribe and collect penalties for a violation of its rules, is new. ’ 18. Taxes levied on lot owners by a cemetery corporation, under section 52, are to be collected by treasurer of corporation instead of by the school collector. 136 MEMBERSHIP CoRPORATIONS Law. 19. The power of cemetery corporations to hereafter issue shares of stock is not re-enacted, but the rights of holders of existing stock are preserved in section 55. Chapter 133 of the laws of 1847, the original act of the incor- poration of cemetery corporations, did not authorize the issue of stock, nor did it contemplate the running of such corporations for profit. The entire surplus over the debts and expenses was to be expended in maintaining and improving the cemetery grounds. L. 1860, ch. 163, authorized the issue of certificates of indebtedness to creditors, entitling them, not to any dividend from the profits of the corporation, but’ merely to the principal and interest of the debt. Later, chapter 107 of the laws of 1875, authorized the exchange of the certificates of indebtedness for cer- tificates of stock, the holders of the certificates of indebtedness, relinquishing the principal and interest of the debt and becoming entitled to all the profits of the corporation. Thus, by an indirect method, the original theory of the act of 1847 has been defeated. The commissioners, doubt the desirability or propriety of allow- ing cemetery corporations incorporated upon a membership basis, to issue stock and become speculative concerns, and therefore re- port the repeal of the provision authorizing the issue of stock in exchange for certificates of indebtedness without re-enactment. A cemetery corporation may be organized for business purposes, as a stock corporation, under the business corporations law. If it be a stock corporation in fact, it should be organized under and governed by the laws applicable to other stock corporations. Prevention of Cruelty Corporations. 20. Section 70 requires certificate of incorporation of such cor- porations to be approved by the President of the New York So- ciety for the Prevention of Cruelty to Children and the president of the American Society for the Prevention of Cruelty to Animals, respectively. This provision is new. Boards of Trade. 21. Under L. 1877, ch. 228, a board of trade could originally incorporate either as a membership corporation or a stock cor- poration. Section 130 only authorizes incorporation as a member- ship corporation. If the corporation desires to issue stock, it must incorporate under the business corporations law, instead of under this chapter. Incorporated boards of trade which have hereto- fore issued capital stock entitling holders thereof to dividends will be governed ,y the business corporations law, the stock corpora- tion law and the general corporation law. Those not having issued capital stock will be governed by this chapter. Agricultural Corporations. 22. Section ¥44 authorizes agricultural corporations originally incorporated as membership corporations to issue capital stock, but if this is done the corporation becomes subject to the busi- ness and stock corporations laws. / ‘144 MEMBERSHIP CorPoRATIONS Law. 137 Library Corporations. 23. L. 1796, ch. 43, L. 1853, ch. 395, and L. 1875, ch. 333, author- izing the creation of library corporations are repealed by this chapter, but not re-enacted. Corporations heretofore incorporated under. such laws will be subject to this chapter. Library cor- porations can be incorporated hereafter only by the regents, under the university law. (L. 1892, ch. 378.) 24. The provisions of L. 1886, ch. 666, and L. 1887, ch. 3713, relating to local appropriations for free circulating libraries have been repealed, but not re-enacted, as sufficiently provided for by the university law, Sec. 37. Explanatory Note of Commissioners of Statutory Consolidation. In 1909 the commissioners of statutory consolidation made the following notes in reporting the law for re-enactment: Scope of law. The Membership Corporations Law is the result of an examination of the various general statutes upon the subject of the incorporation, powers and duties of such corporations, and includes legislation beginning with L. 1796, ch. 43, entitled “An act to incorporate such persons as may officiate for the purpose of procuring and erecting public libraries in this state’ and includ- ing that passed at the session of 1907. The scope of the Membership Corporations Law is given by section 2 of the chapter which applies the law to all corporations organized under any general statute except stock or moneyed cor- porations or those subject to the insurance law, transportation corporations, railroads and religious corporations. The intention of the board has been to embody in the consolidation all the live provisions of statutes which relate to the subject above defined and to eliminate, by a comprehensive schedule of repeals, all the defunct and obsolete general statutes in relation to corporations coming within the above definition. Historical note. Legislation in relation to corporations in this state has been extensive, but, with the exception of the provisions of the Revised Statutes relating to toll roads, banks and insur- ance companies prior to 1890, it was confined to general statutes relating, respectively, to a particular class of corporations. The commissioners appointed under L. 1880, ch. 289, to revise the gen- eral statutes made a reclassification of the laws relating to cor- porations and proposed several general laws on that subject which have been adopted and have become laws, among which is the Membership Corporations Law, which was passed May 8, 1895. In perfecting this consolidation of this law it has been found necessary to include statutes relating to medical societies, alumni corporations (L. 1882, ch. 268), veterinary associations (L. 1890, ch. 286), consolidation of library corporations in New York City (L. 1892, ch. 541), agricultural and other corporations authorized to construct tunnels (L. 1903, ch. 523), and corporations for breed- ing and improving the breed of horses (L. 1895, Ch. 570). In the consolidation of this law an examination of upward of 138 MEMBERSHIP CorPoRATIONS Law. 250 general statutes has been made, and the schedule of repeals has been extended to cover 256 laws or portions thereof, as against 132 repeals contained in the schedule of repeals in the “old Membership Corporations Law.” MEMBERSHIP CORPORATIONS LAW Laws of 1909, Chapter 28, Entitled: “An Act relating to Membership Corporations, constituting Chapter Thirty- five of the Consolidated Laws,” as amended to the commencement of the legislative session of 1914. CHAPTER 35 OF THE CONSOLIDATED LAWS ARTICLE Aub ww HD oo ON 1 It, 12. 13. 14. 15. 16. 17. 18. 190. 20. MeMBeERSHIP CorporaTIons Law. . Short title and definitions (§§ 1, 2). . General provisions relating to membership corpora- tions (§§ 3-24). . Corporations for purposes not elsewhere authorized (8§ 40-47). . Cemetery corporation (§§ 60-84). Fire corporations (§§ 100-105). . Corporations for the prevention of cruelty (§§ 120- 123). . Hospital corporations (§ 130). . Christian associations (§§ 140-143). . Bar associations (§§ 150-151). . Veteran soldiers’ and sailors’ associations (§§ 160- 162). Soldiers’ monument corporations (§§ 170-173). Boards of trade (§§ 180-182). Agricultural and horticultural corporations (§§ 190- 197). Medical societies (§§ 210-215). Alumni corporations (§§ 220-227). Historical societies (§§ 230, 231). Veterinary associations (§§ 240-244). Consolidation of library corporations in New York city (§§ 260-265). Agricultural, fair and other corporations authorized to construct tunnels and bridges (§§ 270-273). Corporations for raising and breeding and improv- ing the breed of horses (§§ 280-298). 21. Laws repealed; when to take effect (§§ 310, 311). 139 140 MEMBERSHIP CorporRATIons Law. ARTICLE 1 Short Title and Definitions Secrion 1. Short title. 2. Definitions. § 1. Short title. This chapter shall be known as the “Membership Corporations Law.” Source.—Formerly Mem. Corp. L. (L. 1895, ch. 559) § 1. § 2. Definitions. Neither the term “membership corpo- ration,” nor the term “membership corporation created by special law,” includes a stock corporation, or a corporation organized for pecuniary profit, or a corporation subject to any of the provisions of the insurance law. Subject to such exceptions, the term “membership corporation” means a corporation hereafter incorporated under this chapter, or heretofore incorporated under any law repealed by this chapter, but does not include a “membership corporation created by special law”; and the term “membership cor- poration created by special law” means a corporation created by special law for purposes for all of which a cor- poration might be created under this chapter. Source.—Formerly Mem. Corp. L. (L. 1895, ch. 559) § 2. A cemetery corporation created by special act not repealed is not subject to the provisions of Sec. 71 of this law. Matter of Owens, 79 App. Div. 236 (1903). ARTICLE 2 General Provisions Relating to Membership Corporations Section 3. Relation of article two to the other articles of this echapter. . Extension of corporate purposes by supplemental cer- tificates. . Incorporation of unincorporated associations. Re-incorporation of membership corporations. . Consolidation. By-laws. Members. . Directors and trustees. CoOMNaAN A h Mempersurp Corporations Law.’ I4L 11. Powers, duties and liabilities of directors. 12. Prohibitions on officers. 13. Purchase, sale, mortgage and lease of real property. 14. Changing number of directors. 15. Changing time of annual meetings. 16. Visitation of supreme court. 17. Reports to comptroller by corporations receiving state moneys. 18. Societies and clubs taking property by will. 19. Societies taking property by will. 20. Appointment of special policemen. 21. Trespass punished. 22. Oath of policemen. 23. Shield. 24. Compensation. § 3. Relation of article two to the other articles of this chapter. If in any other article of this chapter, there be a provision in conflict with any provisions of this article, such provisions of such other article shall prevail. If in any other article of this chapter, there be a provision re- lating to a matter embraced in this article, but not in con- flict therewith, such provision in such other article shall be deemed to be additional to the provision in this article relating to the same subject-matter, and both provisions shall, in such case, be applicable. Source.—Formerly Mem. Corp. L. (L. 1895, ch. 559) § 3. Application of General Corp. Law. This act must be read in connection with the General Corpora- tion Law, ante, the provisions of which apply to membership cor- porations. Section 321 of that law provides, however, that the provisions of this Act shall prevail when in conflict with any provisions of the General Corporation Law. Note as to Scope of the Law. The Membership Corporations Law contains the provisions for the incorporation of non-stock corporations other than the class known as Religious Corporations, which latter are to be organized under the Religious Corporations Law, and other than such cor- porations as may be formed under the Education Law (see § 59 of that law, post) and the Public Health Law (dental and pedic societies). Article 2 of this law contains the provisions which are applica- ble generally to all corporations organized under the other articles of this chapter or which were previously organized under laws which have been superseded and repealed by the Membership Cor- 142 MEMBERSHIP CoRPORATIONS Law. porations Law. In order to ascertain the provisions which apply to Membership Corporations, reference must be had as follows: First, to the General Corporation Law, the application of which is explained in the note to that law on page 2, ante. Second, to article 2 of this law, which, as above stated, contains the provisions generally applicable to all) Membership Corpora- tions. Third, to the particular article of this law specially applicable to the kind of. Membership Corporation concerning which informa- tions is sought. In said last mentioned article will be found only the provisions applicable to that particular class of corporations. The application of the General Corporation Law is subject to the limitation contained in section 321 of such law which pro- vides that if any provision of the Membership Corporations Law conflicts with any provision of the General Corporation Law such provision of the Membership Corporations Law shall prevail, and the provision of the General Corporation Law shall not apply in such case. Said section also provides that if the Membership Corporations Law shall contain a provision relating to a matter embraced in the General Corporation Law but not conflicting with it, such provision in the Membership Corporations Law shall be deemed to be in addition to the provision in the General Corpora- tion Law relating to the same subject matter, and, in such case, both provisions shall be applicable. As to provisions in article 2 of this law in conflict with other articles of the law, see section 3. Corporations formerly organized under the laws superseded and repealed by the Membership Corporations Law are subject to the provisions of the latter. In such case the new law is to be treated as a modification or amendment of the law repealed. General Construction Law, section 95. § 4. Extension of corporate purposes by supplemental certificates. A membership corporation, created under or by a general or special law for purposes for which a cor- poration may be created under any article of this chapter, may, from time to time, extend its corporate purposes so as to include any other purpose for which a corporation may be created under such article by filing in the offices in which its original certificates of incorporation, if any, are filed, or otherwise in the offices in which original certifi- cates of incofporation for such purposes are required to be filed, a copy of a resolution in favor of such extension, certified by the president and secretary of the corporation to have been duly adopted by the concurring vote of a majority of the members of the corporation present at an annual meeting, or a special meeting duly called for that MEMBERSHIP CORPORATIONS Law. 143 purpose; and a certificate signed and acknowledged by a majority of the directors of the corporation, in pursuance of such resolution, with the approval, indorsed thereupon or annexed thereto, of a justice of the supreme court, and if the care of orphan, pauper or destitute children be in- cluded among such corporate purposes, with the additional approval indorsed thereupon or annexed thereto, of the state board of charities. Source.—Formerly Mem. Corp. L. (L. 1895, ch. 550) § 4, as am’d by L. 1902, ch. 341. Originally revised from L. 1880, ch. 246; L. 1890, ch. 425. For form of certificates, see Form Nos. 28 and 29. A certificate drawn under this section which eliminates some of the objects contained in its original certificate and adds others will not be filed, because the purpose of the above section is to permit the extension of corporate purposes, and the power is limited to the insertion, of new matter. It seems that the amend- ment should be made under Gen. Corp. L. § 7. Opinion of Attor- ney Gen. May 9, 1911. Report of Atty. Gen. 1911, Vol. II, p. 460. A similar provision is found in Section 18 of the Stock Cor- poration Law (L. 1909, ch. 61) which was considered in Peo. ex rel. Municipal Gas Co. v. Rice, 138 N. Y. 151 (1893). A certificate of a proposed extension of purposes intended to enable an alumnz association to pay annuities to its members in certain contingencies, and upon specified terms, will not be filed, as such transactions constitute insurance. Opinion of Atty. Gen. June 20, 1907. Report of 1907, p. 284. Correcting Informalities. See Gen. Corp. Law, § 7, ante. Extension of Corporate Existence. The Gen. Corp. Law, § 37, provides the method of extending corporate existence. The consent of two-thirds of the members is necessary. This section is applicable only in cases where the charter of a membership corporation specifies the duration of corporate existence. Under this Act no period of existence is required to be stated and the succession is therefore perpetual pur- suant to Gen. Corp. Law, § II. Revival of Corporate Existence. A corporation having unpaid bonds, maturing after the expira- tion of its charter, may procure an order from the Supreme Court after the expiration of its existence reviving and extending its corporate existence for a term not exceeding the term for which it was originally incorporated. Gen. Corp. Law, § 38. The observations under the preceding note as to perpetual succession are also applicable here. 144 Memsersarp Corporations Law. Approval of State Board of Charities, See note to § 41, post. § 5. Incorporation of unincorporated associations. An unincorporated club, society or association organized for purposes for which a corporation may be created under any article of this chapter, may, by the unanimous vote of all its members present and voting at a regular or regu- larly called meeting thereof, authorize its directors to in- corporate for the same purposes, under such article, with a corporate name adopted by such meeting, if notice of the intention so to incorporate be given at least thirty days before such meeting, personally or by mail, to each member of such association whose residence or post-office address is known. On such incorporation, the members of such previously unincorporated club, association or society shall become members of such corporation, and all of the prop- erty of such unincorporated club, society or association, or held by any person for its use or benefit, shall vest in and become the property of such corporation, subject to be taken in payment of all claims against such unincorporated club, society or association, or against any of the members thereof as such members, or by reason of their membership therein, the same as if such incorporation had not taken place. Source.—Formerly Mem. Corp. L. (L. 1895, ch. 559) § 5, as then revised from L. 1886, ch. 236, § 4 (Political Clubs); L. 1888, ch. 391, § 6 (Societies for Training Nurses). For form of certificate see Forms Nos. 30-33. The incorporation of an association in accordance with the unanimous vote of the members is of itself sufficient to vest in the corporation all right, title and interest which the association had in a fund given in trust to establish a professorship, and specific performance may be decreed in favor of the corporation. Asso- ciate Alumni v. Gen. Theological Sem., 163 N. Y. 417 (1900), aff’g 26 App. Dive 144. § 6. Re-incorporation of membership corporations. A membership corporation created by special law for pur- poses for which a corporation may be created under any article of this chapter, may, by the unanimous vote of all MemMBERSHIP Corporations Law. 145 its members present and voting at a regular or regularly, called meeting thereof, authorize its directors to re-incor- porate with the same corporate name, for the same pur- poses under such article. Such re-incorporation shall not effect a dissolution of the corporation, but shall be deemed a continuation of its corporate existence, without affecting its property rights, or its liabilities, or the liabilities of its members or officers as such, but thereafter it shall have only such other rights, powers and privileges, and be sub- ject only to such other duties and liabilities as a corporation created for the same purposes under such article. Source—Formerly Mem. Corp. L. (L. 1895, ch. 550) § 6. For form of certificate to be filed see forms Nos. 34 and 35. For provisions generally applicable to incorporation see notes to § 41, post. . The foregoing section permits corporations created by special laws to reincorporate hereunder and thereafter to be governed by this chapter. It is unnecessary for corporations organized under laws superseded and repealed by this law to reincorporate. General Construction Law, § 95. Compare Sec. 4 of the Business Corporation Law (L. 1909, ch. 12) providing for reincorporation of business corporations, under which, however, the new corporation obtains no new rights. Peo. ex rel. Haberma. v. James, 5 App. Div. 412 (18096). Effect of Reincorporation. Reincorporation does not create a new corporation. Polk v. Mutual Reserve, etc. Ass’n, 207 U. S. 310 (1907); In re Consoli- dated Kansas City S. & R. Co., 13 App. Div. 50 (1897). As to who are members see Section 9, post, and Gen. Corp. Law, § 3, subd. 7, ante. § 7. Consolidation. Any two or more membership cor- porations, incorporated under or by general or special laws, for kindred purposes, being purposes for which a corpora- tion may be formed under any article of this chapter, may enter into an agreement for the consolidation of such cor- porations setting forth the terms and conditions of con- solidation, the name of the proposed corporation, the num- ber of its directors, the time of the annual election and the names of the persons to be directors until the first annual meeting. Each corporation may petition the su- preme court for an order consolidating the corporation, 146 MEMBERSHIP CorPorRATIONS Law. setting forth in such petition the agreement for consolida- tion, a statement of all its property and liabilities and the amount and sources of its annual income. Before the pres- entation of the petition to the court, the agreement and petition must be approved by three-fourths of the votes lawfully cast at a meeting of each corporation, separately and specially called for that purpose, which approval, duly verified by the chairman and clerk of such meeting, shall be annexed to the petition. On presentation of the peti- tion, the certificate of approval and the agreement for con- solidation, and on such notice to interested parties as the court may prescribe, and after hearing such interested par- ties as desire to be heard, the court may make an order for the consolidation of the corporations on such terms and conditions as it may prescribe. When such order is made and duly entered, such corporation shall become one cor- poration by the name designated in the order, and be sub- ject only to such duties and obligations as a membership corporation formed under this chapter for the same pur- poses; and all the property belonging to the corporations so consolidating, shall be vested in and transferred to the new corporation, which shall be subject to all the liabili- ties of the former corporations, to the same extent as if they had been contracted or incurred by it. But a corpo- ration for the prevention of cruelty to children or animals shall not consolidate with any other corporation, except with a corporation which itself has been formed by the consolidation of a corporation for the prevention of cruelty to children with a corporation for the prevention of cruelty to animals, or by the consolidation of either or both of said last mentioned corporations with a corporation for the pre- vention of cruelty to children and to animals. This excep- tion shall fot apply to the counties of New York, Kings, Queens, Nassau, Suffolk, Richmond, Westchester or Oneida. Source.—Formerly Mem. Corp. L. (L. 1895, ch. 559) § 7, as am’d by L. 1902, ch. 439; L. 1905, ch. 663; L. 1906, ch. 493. For forms of papers under the foregoing section see Forms Nos. MEMBERSHIP CorRPORATIONS Law. 147 Compare Bus. Corp. Law, Sec. 7 to 11, providing for consoli- dation of business corporations. While the procedure to effect consolidation of business corporations is different from that above prescribed, some of the decisions arising under the provisions of Bus. Corp. Law are helpful in interpreting this section and are, therefore, noted below. Effect of Consolidation. The constituent corporations cease to exist and an entirely new corporation comes into existence. Peo. ex rel. N. Y. Phonograph Co. v. Rice, 57 Hun 486 (1890), aff'd 128 N. Y. sor. Rights of Members. An agreemként which does not comply with the requirements of the law is ultra vires, and a single dissenting member of either cor- poration may maintain an action to set aside the agreement. Davis v. Congregation, etc., 40 App. Div. 424 (1899). Rights of Creditors. An action can be maintained against the old corporation for debts existing at the time of consolidation. Gale v. T. & B. R. R. Co., 51 Hun 470. The statutory liability of a consolidated corporation for the debts and liabilities of its constitutent corporations is not impaired by an agreement between the corporations as to creditors who have neither joined in nor assented to the agreement. Matter of Utica Nat’l Brewing Co., 154 N. Y. 268 (1897), aff’g 19 App. Div. 627. Where a corporation has entered into a consolidation the pur- suit, by a creditor, of a remedy against his original debtor, a constituent corporation, presents no obstacle to a collection of his debt from the consolidated corporation. Matter of Utica Nat’! Brewing Co., 154 N. Y. 268 (1897), aff’g 19 App. Div. 627. An injunction pendente lite will be granted to restrain a corpora- tion from consolidation where such consolidation may be un- lawful, and render final judgment ineffectual. Young v. Rondout etc. Co., 129 N. Y. 57 (1892). Substitution of Parties. Code of Civ. Pro. Sec. 756, provides: “In case of a transfer of interest, or devolution of liability, the action may be continued, by or against the original party; unless the court directs the per- son to whom the interest is transferred, or upon whom the lia- bility is devolved, to be substituted in the action, or joined with the original party, as the case requires.” Substitution of the second corporation for that merged was ordered in Burrow v. Marceau, 132 App. Div. 797 (1900). Filing Order with Secretary of State. It is the intention of the section that a certified copy of the order of consolidation be filed with the Secretary of State, for 148 Memsersuir Corporations Law. without it his records would be incomplete. Gen. Corp. Law, §§ 5 and 9 are broad enough to show a general intention to have on file in the Secretary of State’s office, some record of the Consoli- dation of Corporations, whether membership or otherwise. Opinion of Attorney Gen. July 15, 1912. Report of Atty. Gen. 1912, Vol. II, p. 353. , § 8. By-laws. The by-laws of a membership corpora- ‘tion, created by or under a general or special law, may be divided into different classes and designated as constitu- tion, by-laws, rules, regulations, or otherwise, and may pro- vide different methods for amending and repealing such classes, respectively. The by-laws of any such corporation may make provi- sions, not inconsistent with law or with its certificate of incorporation, regulating the admission, voluntary with- drawal, censure, suspension and expulsion of members; the fees and dues of members and the termination of member- ship on non-payment thereof or otherwise; the number, times and manner of choosing, qualifications, terms of office, official designations, powers, duties and compensa- tion of its officers; what shall constitute a vacancy in the office of any such officer and the manner of filling it; the number of members, not less than one-third, or, if one-third be nine or more, not less than nine, whose presence shall be necessary to constitute a quorum at its meetings; the qualifications of voters at its meetings; the eligibility of members to be directors; and the classification of its direc- tors into not more than five classes, so that the term of office of all the directors of one class only shall expire each year, and that the term of office of their successors shall be as many years as there are classes, but not so as to change the term of office of any director then in office. Such by-laws may authorize holders of the bonds of the corporation secured by mortgage upon its property, to vote for the directors thereof, and may apportion the number of votes each such bondholder may cast to the amount of such bonds held by him. The by-laws of a membership corporation, incorporated for yachting purposes, may provide that the owners of each MEMBERSHIP CorPorATIons Law. 149 yacht shall, together, cast but one vote at the meetings of the corporation. For form of by-laws of a club, see Form No. 41, post. For forms of mandamus papers for re-instatement of member, see Forms Nos. 42-46. Source.—Formerly Mem. Corp L. (L. 1895, ch. 559) '§ 8. Revised from L. 1796, ch. 43, § 9 (Libraries); L. 1848, ch. 319, § 2, as am’d by L. 1885, ch. 88 (Charitable and Benevolent Corporations); L. 1853, ch. 395, § 6 (Libraries); L. 1865, ch. 368, § 2 (Social Clubs), as am’d by L. 1877, ch. 380; L. 1887, ch. 645 and L. 1889, ch. 301; L. 1875, ch. 267, §§ 2, 4 (Social Clubs), as am’d by L. 1880, ch. 98; L. 1875, ch. 343 (Libraries), §§ 2, 3; L. 1886, ch. 236 (Political Clubs), § 2; L. 1887, ch. 317 (Bar Ass’ns), § 2; L. 1888, ch. 293 (Playground Ass’ns), § 2; L. 1889, ch. 95 (Hospitals), § 8; L. 1891, ch. 167 (Y. W. C. A.), § 5; L. 1891, ch. 213 (Breeding Animals), § 2. Distinction between Charter and Constitution. Charters are not created by the act of the corporation or asso- ciation but are granted by the sovereign power of the state. A constitution of a voluntary association or corporation is nothing more than a by-law under an inappropriate name. Burns v. Man. Brass. Mut. Aid Soc., 102 App. Div. 467 (1905). This accords with paragraph one of this section which designates the constitution as a class of the by-laws. Elections. Where the by-laws fix the time and place for annual election of directors and do not require notice of the meeting to be given members, an election held without such notice is valid. Matter of N. Y. Elec. Workers’ Union v. Sullivan, 122 App. Div. 764 (1907). Quorum. If the by-laws contain inconsistent provisions with respect to the number of members necessary to constitute a quorum, the above section 8 governs and a quorum should be not less than one-third of the members. The rule of the common law that the number of members present and voting at a regular meeting con- stituted a quorum and a majority thereof was sufficient to transact business, is inapplicable to a membership corporation. Matter of N. Y. Elec. Workers’ Union v. Sullivan, 122 App. Div. 764 (1907). The fair intendment of this section is that a quorum should not be less than one-third of the members, unless specifically provided that if one-third be nine or more it be not less than nine. Matter of N. Y. Elec. Workers’ Union v. Sullivan, 122 App. Div. 764 (1907). Expulsion; Grounds Irrespective of By-Laws. ‘At common law the following were recognized as grounds of expulsion from societies: (1) Violation of duty to the society, asa member of the corporation; (2) offences as a citizen against 150 MemsBersuir Corporations Law. the laws of the country; (3) breach of duty in respect alike to the corporation and the laws. People ex rel. Bartlett v. Med. Soc, 32 N. Y. 187 (1865); Peo. ex rel. Thacher v. N. Y. Com. Ass’n, 18 Abb. Pr. 271 (1864); White v. Brownell, 2 Daly. 329, 358 (1868); Monroe Dairy Ass’n v. Webb, 40 App. Div. 49 (1899); Matter of Barry v. Players’ Club, 147 App. Div. 704,.aff’d on op. below, 204 N. Y. 669 (1912). / Faithful observance of the rules and regulations is, under the charter, an implied condition of membership and a corporation possesses the power of expulsion over members violating their ob- ligations in that respect. Peo. ex rel. Pinckney v. Fire Under- writers, 7 Hun. 248; Peo. ex rel. Thacher v. N. Y. Com. Ass’n, 18 Abb. Pr. 271 (1864). Expulsion; Procedure when not provided in By-Laws. Where the method of procedure to expel a member is not regu- lated by the by-laws, it should be analogous to that observed in ordinary judicial proceedings so far at least as to promote sub- stantial justice. Peo. ex rel. Mead v. McDonough, 8 App. Div. 591 (1896); the trial in such case cannot be before a committee, but must be before the whole society (id). Expulsion for Cause. Where the constitution of a club provides that a member may be expelled for cause, such cause is conduct which in some way or to some degree tends to injure the club materially, or in repu- tation, or is contrary to and destructive of the purpose of its organization. Matter of Barry v. The Players, 147 App. Div. 704, aff'd on op. below, 204 N. Y. 669 (1912). The test for expulsion is not whether the action of the mem- ber would probably have defeated his application for member- ship; for election to membership may be refused capriciously or arbitrarily; whereas, a person once elected is entitled to remain such so long as he abides by the rules of the club. Matter of Barry v. The Players, 147 App. Div. 704, aff’d on op. below 204° N. Y. 669 (1912). Expulsion as provided in By-Laws. Where one voluntarily becomes a member of an incorporated society, whose by-laws provide a certain method of amotion for certain specified causes, the assent of the member thereto being a fundamental gondition of his tenure of membership, the right of amotion is clearly established in the corporate body, and may be duly exercised in the manner and for the purpose prescribed. And where, under such an organization, a corporator has been regularly tried and expelled in due form, the sentence of the cor- porate body, thus acting in a judicial capacity, is not to be ques- tioned collaterally, nor will the merits of such expulsion be ex- amined in proceedings for a mandamus. High’s Ex. Rem. § 292, quoted with approval in Peo. ex rel. Elwell v. Manhattan Chess MEMBERSHIP CorPoRATIONS Law. 151 Club, 23 Misc. 500, aff'd, no op. 34 App. Div. 631; 164 N. Y. 605 (1900). : If the constitution and rules prescribe method of expulsion, a member expelled without compliance therewith is entitled to rein- statement. Peo. ex rel. Deverell v. Musical Mut. Pro. Union, 118 N. Y. ror (1889); Stein v. Marks, 44 Misc. 141 (1904). Effect of Subscribing to Constitution and By-Laws. The constitution and by-laws are conclusive upon each member in respect of the regulation of mode of transaction of his business and of his right to continue to be a member. Belton v. Hatch, tog N. Y. 593 (1888). If the provision of a by-law of an unincorporated association is not illegal, immoral. or contrary to public policy, it must be upheld, even if unreasonable, because parties have the right to enter into unreasonable or unwise contracts. White v. Brownell, 2 Daly 329 (1868); Hess v. Johnson, 41 App. Div. 465 (1899); Ulmer v. Minster, 16 Misc. 42 (1896); Kennedy v. Local Union, 726, 75 App. Div. 243 (1902); Taufer v. Bro. of Painters, 137 App. Div. 838 (1910); Maxwell v. Theatrical Mec. Ass’n, 54 Misc. 619 (1907); in case of corporations, however, the court has visitorial power and those by-laws which are vexatious, oppressive or mani- festly detrimental to the interests of the corporation are void. Maxwell v. Theatrical Mech. Ass’n, 54 Misc. 619 (1907); Hess v. Johnson, 41 App. Div. 465 (1899). Peo. ex rel. Johnson v. N. Y. Produce Exch., 149 N. Y. 401 (1896); Stein v. Marks, 44 Misc. 140 (1904). Rights Measured by Charter and By-Laws. When a person becomes a member and agrees to be governed by the corporation’s charter and by-laws they express the contract by which he and every other member are bound and they measure the rights, duties and liabilities of such members. MHaebler v. N. Y. Produce Exchange, 149 N. Y. 414, 427 (1806); Baxter v. McDonnell, 155 N. Y. 83, 101 (1898); Stein v. Marks, 44 Misc. 140 (1904); Johansen v. Blume, 53 App. Div. 526 (1900). Opportunity to Defend. Even in the absence of any provision therefor in the by-laws, notice is required. Williamson v. Randolph, 48 Misc. 96 (1905); Fritz v. Muck, 62 How. Pr. 69 (1881). An expulsion, based upon a trial where defendant was not requested to be present, as the by-laws required, and did not appear, cannot be sustained on general principles or under the by-laws. Peo. ex rel. Doyle v. N. Y. Ben. Soc. 3 Hun 361 (1875); Wachtel v. Noah Widows etc. Soc., 84 N. Y. 28 (1881); Weinberg v. Int. Order Israel, 36 Misc. 205 (1901); Fay v. Supreme Tent etc., 38 Misc. 427 (1902); Stein v. Marks, 44 Misc. 140 (1904). Service of Notice to Defend. In the absence of a provision in the charter or by-laws to the contrary the notice should be personally served, Wachtel v. Noah 152 Memsersuir Corporations Law. Widows etc. Soc., 84 N. Y. 28 (1881); but where the member was cognizant of a uniform custom to send notice by mail, such notice actually received is legally sufficient. Bettenhasse v. Templars of Liberty, 58 App. Div. 61 (1901). If the by-laws provide for notice by registered mail and a notice so sent is returned because the member could not be found and was refused by the person residing at the address appearing on the letter, an expulsion four days thereafter is invalid because the society knew that the member had not received the notice and afforded him no opportunity for a hearing. Weinberg v. Ind. Order Israel, 36 Misc. 205 (1901); but see Goldberger v. U. S. Grand Lodge etc., 77 Misc. 136 (1912), infra. If the by-laws provide for notice by registered mail in case of failure to pay dues, and further provide that such mailing shall be sufficient for all purposes, if addressed to the member at his last known residence or place of business, a notice so addressed is sufficient although it was known that the member had gone abroad to live. Goldberger v. U. S. Grand Lodge etc., 77 Misc. 136 (1912). Charges to be Served. A mere summons to appear is not sufficient, but the accused should also be given notice of the charges preferred. Williamson v. Randolph, 48 Misc. 96 (1905); Peo. ex rel. Deverell v. Mus. Mut. Pro. Union, 118 N. Y. 1o1 (1889); Peo. ex rel. Merscheim v. Union, 47 Hun 273 (1888). Sufficiency of Complaint. Technical precision in the complaint against the member is not necessary, and to require it would greatly embarrass and many times defeat the disciplinary regulations of the association. Peo. ex rel. Johnson v. N. Y. Produce Exch., 149 N. Y. 401 (1806); Peo. ex rel. Ward v. Uptown Ass’n, 9 App. Div. 191 (1896); Williamson v. Randolph, 48 Misc. 96 (1905). Bill of Particulars. The failure of the corporation to furnish the member with a bill of particulars will not make the expulsion illegal. It is for the society to determine whether the charges are sufficiently explicit and definite. Trainor v. White Rats Actors Union of Am, Spe- cial Term, N. Y. County, N. Y. Law Journal, October 30, 1912, citing Austingv. Dutcher, 56 App. Div. 393, 397; and Peo. ex rel. Johnson v. N. Y. Produce Exchange, 149 N. Y. 401, 413. Proceedings on Sunday. The service of charges on Sunday and conducting the hearing on Sunday are not illegal as there is no statute forbidding societies* from holding business meetings on that day. Peo. ex rel. Corrigan v. Y. M. etc. Benev. Soc., 65 Barb. 357 (1873). MEMBERSHIP CorporATIONS Law.. 153 Proof on Default. Even though a member served with charges does not appear, still proof of his offence must be adduced. Peo. ex rel. Corrigan v. Y. M. etc. Benev. Soc., 65 Barb 357 (1873). Jury Trial. The constitutional right of trial by jury can only be invoked upon trials in courts of justice. Corporations have inherent statu- tory power of expulsion over members who have voluntarily sub- mitted themselves to their jurisdiction. Peo. ex rel. Thacher v. N. Y. Com. Ass’n, 18 Abb. Pr. 271 (1864). Waiver of Objections. A member being tried on charges, who submits to the trial be- tore the court as constituted without objection and participates in the same, cannot thereafter question the competency of the court on the ground that some of the members were hostile to him or biased. Peo. ex rel. Brewster v. Old Guard, 87 App. Div. 478 (1903) aff’d no op. 178 N. Y. 576. Where a member defends, upon the merits, the proceeding to expel him without objecting that he was not served with a copy of the charges as the by-laws direct, he waives the objection and it is not available in an action brought for reinstatement. Fritz v. Knaub, 57 Misc. 405 (1907) aff’d on op. below 124 App. Div. 915; Williamson v. Randolph, 48 Misc. 96 (1905), disapproving of Downing v. St. Columbia’s Society, 10 Daly 262, apparently contra; Peo. ex rel. Baker v. Coachmen’s U. B. Ass’n, 4 Misc., 424 (1893). If a member makes no objection to the form of the charges, he waives any defect. Peo. ex rel. Johnson v. N. Y. Produce Exch. 149 N. Y. 401 (1896); Peo. ex rel. Ward v. Uptown Ass’n, 9 App. Div 191 (1896); Williamson v Randolph, 48 Misc., 96 (1905). A member who appears before the directors, denies their juris- diction on the ground that charges were not served as provided in the by-laws, and then withdraws, does not because of such appearance waive his right to thereafter obtain reinstatement. Peo. ex rel. Deverell v. Mus. Mut. Union, 118 N. Y., ror (1889), and cases there cited. Must Exhaust Remedies Within Organization. A member must first exhaust his remedies within the associa- tion before he may invoke redress from the courts. His defenses must in the first instance be passed upon by the association. Thomas v. Mus. Mut. Pro. Union, 121 N. Y. 45 (1890); Moyse v. N. Y. Cotton Exch., 143 App. Div. 265 (1911); Gebhard v. N. Y. Club, 21 Abb. N. C. 248 (1888); Shirtcliffe v. Wall, 68 App. Div. 375 (1902). The same is true in unincorporated associations. ‘Lewis v. Wilson, 121 N. Y. 284 (1890); Lafond v. Deems, 81 N. Y. 507 (1880). Although the general rule is that a member is bound to exhaust his remedies by appeal to the higher constituted authorities of the association before he becomes entitled to maintain an action for 154 MemsBersHir Corporations. Law. the settlement of his rights, nevertheless, where special circum- stances exist, as the loss of insurance by delay, they may consti- tute an exception to the general rule. Fritz v. Knaub, 57 Misc. 405 (1907) aff’d on op. below 124 App. Div. 915. A by-law providing that a member could be reinstated at a regular meeting by a two-thirds vote after paying all dues and fines standing against him and an extra fine of fifty dollars, does not provide a method of review and need not be resorted to be- fore instituting mandamus proceedings. Peo. ex rel. Mercheim v. Musical Union, 47 Hun 273 (1888). When Proceedings Enjoined. Before expulsion a member may enjoin proceedings to be taken in violation of the by-laws where the suspension or expulsion would cause irremediable damage to his business reputation and property rights. Quentell v. N. Y. Cotton Exch., 56 Misc. 150 (1907); but the question of jurisdiction to try the charges against a member must first be determined by the corporation itself. Moyse v. N. Y. Cotton Exch., 143 App. Div. 265 (1911). The court will not in advance direct how the trial shall be con- ducted. Moyse v. N. Y. Cotton Exch., 143 App. Div. 265 (1911). Where a by-law of a musical union prohibited members from performing with others not members, and a member thereof was ordered to show cause why he should not be fined for a violation of such by-law, he cannot maintain an action to restrain the union from enforcing the by-law against him, because even if the by-law is invalid, no process is provided by which the corporation can collect the fine, and the invalidity could be asserted in an action to collect such fine and the intervention of equity was unneces- sary. The action was not maintainable for the further reason that plaintiff had not exhausted his remedy within the union by urging the invalidity of the by-law or his exemption therefrom. Thomas v. Musical Mut. Protective Union, 121 N. Y. 45 (1890). A by-law of a press association prohibiting its members from publishing or receiving dispatches of any other news association covering like territory and organized for like purpose, and pro- viding for suspension from privileges as a penalty for violation, is valid and an action to restrain the enforcement of the penalty is not maintainable. Matthews v. Associated Press, 136 N. Y., 333 (1893). Such by-law is not unreasonable as tending to restrain competition or restricting the liberty of the press, or unlawfully interfering with the vested property rights. (id.) A member qvho has refused to pay an assessment for permanent improvements to property, contending that under the by-laws assessments could be made only for current expenses, cannot maintain an equitable action to restrain forfeiting his rights as member and removing a cloud on a lot purchased by him from the corporation, because an attempted enforcement of the assess- ment of forfeiture would itself show the invalidity thereof and there is no ground for equitable relief. Whiteside v. Noyac Cot- tage Ass’n, 142 N. Y. 585 (1894). MEMBERSHIP Corporations Law. 155 An injunction restraining the trial of a member will not be granted on the ground that the charges are untrue and that cer- tain members of the trial board are prejudiced, for the truth of the charge is the very matter the board is to determine and the im- partiality of the board can be determined on application for rein- statement. Gebhard v. N. Y. Club, 21 Abb. N. C. 248 (1888). Remedy Where Member Denied Privileges. An action in equity will lie to enjoin members, who interfere with the exercise of another member’s rights, by preventing access to the club rooms, by preventing attendance and voting at cor- porate meetings and by interfering with his exercise of powers and duties as an officer. Stein v. Marks, 44 Misc. 140 (1904). The supreme court will exercise its equitable powers and enjoin defendants, declare their unauthorized acts void, compel the or- derly and prescribed administration of the corporate affairs and prevent diversion of the funds and property of the corporation. Stein v. Marks, 44 Misc. 140 (1904). Mandamus; Remedy for Wrongful Expulsion. Where a member has been wrongfully expelled, his remedy is to seek restoration to membership by writ of mandamus. Peo. ex rel. Doyle v. N. Y. Ben. Soc., 3 Hun 361 (1875); Peo. ex rel. Schmidt v. St. Franciscus Ben. Soc., 24 How. Pr. 216 (1862); Peo. ex rel. Deverell v. Musical Mut. Pro. Union, 118 N. Y. 101 (1889); Peo. ex rel. Johnson v. N. Y. Produce Exch., 149 N. Y. gor (1896); but such a writ will not be allowed against a voluntary unincor- porated association. Matter of Weidenfeld v. Keppler, 84 App. Div. 235, aff'd on op. below, 176 N. Y., 563 (1903) and cases cited. For forms in mandamus proceedings, see Forms Nos. 31-35. Remedy to Compel Admission. Mandamus is the appropriate remedy to compel a county med- ical society to admit an applicant having the requisite qualifica- tions to membership. Peo. ex rel. Bartlett v. Medical Society, 32 N. Y. 187 (1865); Peo. ex rel. Kelsey v. N. Y. Med. School, 29 App. Div. 244, 251 (1898). When Mandamus Granted. When a member has been suspended or expelled by the board of managers, after trial and opportunity to be heard, the court in determining an application for a writ of mandamus to compel restoration to membership is, in the absence of fraud or collusion, restricted to the question of the jurisdiction of the board of man- agers under the charter and by-laws legally enacted. Peo. ex rel. Johnson v. N. Y. Produce Exch., 149 N. Y. gor (1806). The ques- tion is not whether the court passing upon the evidence as res nova would have reached the same conclusion, but whether the case was so bare of evidence that no honest mind could reach the conclusion. Peo. ex rel. Johnson v. N. Y. Produce Exch., 149 N. Y. gor (1896); Williamson v. Randolph, 48 Misc. 96, 104 (1905) 156 MEMBERSHIP CoRPORATIONS Law. and cases cited; Peo. ex rel. Elwell v. Manhattan Chess Club, 23 Misc. ‘500, aff'd 34 App. Div. 631 and 164 N. Y. 605 (1900) no op.; Young v. Eames, 78 App. Div. 229, 240, aff’d on op. below, 181 N. Y. 542 (1905). The test for expulsion is not whether the action of the member would probably have defeated his application for membership, for election to membership may be refused capriciously or arbitrarily, whereas a person once elected is entitled to remain such so long as he abides by the rules of the club. Matter of Barry v. Players, 147 App. Div. 704, aff’d on op. below, 204 N. Y. 669 (1912); and see McKane v. Adams, 123 N. Y. 609 (1890). Where a member of a coffee exchange refused to pay for coffee claimed to be adulterated in violation of law, he cannot be ex- pelled until the exchange has itself determined whether the posi- tion taken by the member was justifiable. Matter of Lurman, 90 Hun 303; aff’d on op. below, 149 N. Y. 588 (1896). Where the by-laws of a corporation provide that where the cor- rectness of accounts between members and others is disputed and a settlement refused, and there is no arbitration, the matter may be referred by the member, who is also the creditor, to the execu- tive committee who shall investigate, and whose decision as to the justice of the claim shall be final as far as the member of the association as such is concerned; a dismissal of the claim of the committee on the ground that it is doubtful will be deemed a de- cision as to the justice of the claim, and the member cannot by mandamus compel further action which in effect would be black- listing the debtor and which would be illegal. Peo. ex rel. Huber Co. v. Mfg. & Dealers Pro. Ass’n, 54 Misc. 332 (1907). Where a member directed to appear for trial for conduct preju- dicial to the club’s interest refused to do so and challenges the jurisdiction of the trial board, he cannot after a trial is had on his default and he is expelled, have the matter retried in court upon a mandamus. Peo. ex rel. Elwell v. Manhattan Chess Club, 23 Misc. 500 Affd. no op. 34 App. Div. 631; 164 N. Y. 605 (1900). A member of a club who opens a sealed letter addressed to the president, destroys the envelope and substitutes another to make it appear that the letter had been addressed to himself may be expelled after being tried as the constitution provides. Peo. ex rel. Elwell v. Manhattan Chess Club, 23 Misc. 500, affd. no op. 34 App. Div. 631; 164, N. Y. 605 (1900). Where a member who has written a circular to fellow members criticizing action of board of directors in rejecting a proposed member, and,suggesting a meeting to amend by-laws so that such person could be elected, is summoned to appear before the direc- tors to give such explanations as he desired to justify his action, such member is entitled to an alternative writ of mandamus to review his dismissal where he was not permitted on his trial to discuss the grounds of rejecting the proposed member and had not had reasonable opportunity to defend himself upon the charges upon which he was expelled. Peo. ex rel. Ward v. Uptown Ass’n, 26 App. Div. 297 (1898) and see S. C. 9 App. Div. 191 (1896). MEMBERSHIP Corporations Law. 157 Mandamus Against Foreign Corporations. Mandamus will not lie against a foreign fraternal corporation to compel reinstatement where it has no branches in this state and is not doing business here. Peo. ex rel. Ruman v. Nat’l Slavonic Soc., 144 App. Div. 574 (1911); but if the corporation has a license to do business in this state and is actually transacting business, the court has jurisdiction to issue the writ. Matter of Wilcox, 123 App. Div. 86 (1908). Disqualification of Trial Board. Where accusations are made by a member against certain fellow members, which, if true, render the latter liable to punishment under the criminal law and also to expulsion, such fellow mem- bers cannot, if it is practicable to select other judges, constitute a tribunal to try charges against the accusing member as the result. is directly dependent upon the truth of the accusations and the tribunal has a personal interest in the decision. Wilcox v. Su- preme Council of Royal Arcanum, 66 Misc. 253, reversed on other grounds, 151 App. Div. 297 (1912). Collateral Attack upon Expulsion. Where a member was illegally expelled, a proceeding by man- damus for reinstatement abated by his death and there is no other remedy, the validity of the expulsion may be collaterally attacked. Wilcox v. Supreme Council of Royal Arcanum, 151 App. Div. 297 (1912). reversing on this point 66 Misc. 253. Reinstatement to Voluntary Association. An action for reinstatement to a voluntary association cannot be maintained when the expulsion has been in accordance with the constitution and by-laws. All that a member can require is that the investigation should be bona fide, upon notice and an oppor- tunity to be heard and that the decision should be within the jurisdiction of the trial body. White v. Brownell, 2 Daly 359 (1868); Lewis v. Wilson, 121 N. Y. 284 (1890); Austin v. Dutcher, 56 App. Div. 393 (1900). A member accused of theft and tried as provided in the con- stitution and by-laws is not entitled to reinstatement where he simply protested against the proceeding and asked for an ad- journment and bill of particulars without denying the charges. Austin v. Dutcher, 56 App. Div. 393 (1900). The court has no power to grant a preliminary mandatory in- junction directing reinstatement of a member. Bachman v. Har- tington, 184 N. Y. 458 (1906). Damages for Ilegal Expulsion. When a member of a musical union having been illegally ex- pelled was discharged from service in which he was engaged and thus. deprived of his income, the discharge. is the proximate result of his loss and he may be awarded damages therefor in the final order granting a peremptory writ pursuant to Code Civ. Pro. § 158 MEMBERSHIP CorporATIONS Law. 2088. Peo. ex rel. Deverell v. Mus. Mut. Pro. Union, 118 N. Y.. Tor (1889). A member who has been expelled and is thereafter reinstated by the courts cannot maintain an action for damages for injury done his business reputation and for counsel fees and disburse- ments against the officers of the corporation where there is no claim of malice. Persons acting in a quasi judicial capacity are not liable for errors of judgment in erroneously determining mat- ters within their jurisdiction. Lurman v. Jarvie, 82 App. Div. 37 (1903) aff'd no op., 178 N. Y. 559. Validity of By-Laws. A by-law of a produce exchange providing for censure, suspen- sion or expulsion of a member found guilty of fraudulent breach. of contract or of any proceeding inconsistent with just and equit- able principles of trade is valid. Haebler v. N. Y. Produce Exch, 149 N. Y. 414 (1896); Peo. ex rel. Johnson v. N. Y. Produce Exch., 149 N. Y. 401; Hurst v. N. Y. Produce Exch., 100 N. Y. 605 (1885).. A by-law of a County Medical Society providing that no mem- ber shall resign when under charges is valid and binding, and the member. who has filed his resignation after charges have been presented, which resignation was not accepted, may not enjoin the society from trying him on the charges on the ground that he is. no longer a member. The mere fact that the charges had not been served is immaterial. Ewald v. Medical Soc. Co. of N. Y. 144 App. Div. 82 (1911). A by-law providing for suspension of a member failing to pay dues, for a period of thirty days from the day he shall put him- self in good standing with the treasurer, is reasonable. Rubinos v. Fraternal Ass’n, 29 Misc. 339 (1899). A by-law of a literary and social corporation pledging mem- bers always to support a political organization is inconsistent with its purposes and invalid. Stein v. Marks, 44 Misc. rgo (1904). A by-law providing that “no member in any controversy what- ever can go to court, if he has not exhausted his remedies in the society, and until the verdict of the committee or jury has been given; transgressing this, he will be expelled from the society without any further notice,” is valid as it postpones but does not preclude court proceedings. DeSabato v. Mutual Help Soc., Kings. Co. Spec. Term, Kelby, J. N. Y. Law Journal, Sept. 21, 1912, citing Shurtcliffe v. Wall, 68 App. Div. 376. A fund accumulated by an exchange under its charter for the benefit of the widows and families of deceased members cannot. by amendment of the by-laws be distributed among the members. Parish v. N. Y. Produce Exchange, 169 N. Y. 34 (1901). Power to Levy Assessments. A membership corporation has no power to levy assessments at irregular intervals to pay for property acquired or to meet de- ficiencies. The power to impose fees and dues does not include power to levy assessment, and the whole statutory scheme of or- MEMBERSHIP CoRPoRATIONS Law. 159 ganization is inconsistent with the existence of such power. Thompson v. Wyandach Club, 70 Misc. 299 (1911); but see White- side v. Noyac Cottage Ass’n, 142 N. Y. 585 (1894). What Are Dues and Fees. The word “dues” mean the obligation into which the members enter to pay a sum to be fixed, usually by by-laws, at recurring intervals, for the maintenance of the organization. In all cases the payment is voluntary and contractual. “Fees” are the amount paid for a privilege, such as initiation fees. Thompson v. Wyandach Club, 70 Misc. 299 (1911). Liability of Members to Directors for Debts Paid. Members of a club are not liable to indemnify the directors for obligations which have been paid where there is no rule im- posing such liability upon them. The general rule that trustees are entitled to be indemnified by their cestuis que trustent is not applicable. Wise v. Perpetual Trustee Co., Ltd., 1903 Appeal Cases (House of Lords) 139. In the foregoing case the court said: “Clubs are associations of a peculiar nature. They are so- cieties the members of which are perpetually changing. They are not partnerships; they are not associations for gain; and the feature which distinguishes them from other societies is that no member as such becomes liable to pay to the funds of the society or to any one else any money beyond the sub- scriptions required by the rules of the club to be paid so long as he remains a member. It is upon this fundamental condition, not usually expressed but understood by every one, that clubs are formed; and this distinguishing feature has been often judicially recognized.” Right of Corporation to Sue for Dues. In the absence of a limitation the corporation may maintain an action at law to recover unpaid dues from its members. Such limitation is not to be implied from the provision authorizing the corporation to expel the member for non-payment or to sell his certificate of membership. Denver Chamber of Commerce, etc. v. Green, 8 Colo. Appeals 420 (1896); Raggett v. Musgrave, 2 Car- rington & Payne 556 (1827); Raggett v. Bishop, 2 Carrington & Payne 343 (1826). Acceptance of Resignation. The resignation of a member is effective without acceptance. Peo. ex rel. Haas v. N. Y. Motor Boat Club, 7o Misc. 603 (1911) and cases cited. Withdrawal of Resignation. A member having resigned cannot be restored to membership by mandamus, although he attempts to withdraw his resignation before it has been formally accepted. Peo. ex rel. Haas v. N. Y. 160 MEMBERSHIP CorPorATIONS Law. Motor Boat Club, 70 Misc., 603 (1911) and cases cited; Finch; v. Oake (1896) 1 Chancery, 409. Officers. A member of a corporaticn who is a partner in a real estate firm, upon becoming a member of a purchasing committee, may agree that he shall act without compensation and such agreement is binding on the firm. Such a member assumes towards the cor- poration relations of a confidential and fiduciary character and could not reserve any benefit for himself or firm without an abuse of the trust. Redhead v. Parkway Driving Club, 147 N. Y. 471 (1896). Where a club constitution merely provides that the board of trustees “shall have the control and management of its property, funds and affairs,” neither the trustees, nor a site committee, nor the latter’s chairman, has authority to sign a contract for the pur- chase of real estate on behalf of the club. Kirwan v. Barney, 27 Misc. 181 (1899), aff'd 29 Misc. 641. Sporting Contests. Awards made in sporting contests will not be set aside by the courts in the absence of fraud either by a competitor or by the official making the decision. If the parties concerned are given a fair opportunity to be heard, and there is evidence upon which the finding can be based, the decision, in the absence of fraud, is not subject to judicial review. Smith v. Am. Automobile Ass’n, 69 Misc. 60 (1910). § 9. Members. Each person signing the certificate of incorporation of a membership corporation, and each per- son admitted to membership therein, in pursuance of law or its by-laws, shall be a member of the corporation until his membership shall terminate by death, voluntary with- drawal, or otherwise, in pursuance of the by-laws. The right of a member to vote, and all the right, title and in- terest of a member in or to the corporation, or its property, shall cease on the termination of his membership, unless otherwise provided by law, or by the by-laws of the cor- poration. 7 Source.—Formerly Mem. Corp. L. (L. 1895, ch. 559) § 9. Re- vised from L. 1896, ch. 43 (Libraries), § 8; L. 1865, ch. 368 (Clubs), § 2, as am’d by L. 1877, ch. 380; L. 1875, ch. 267 (Clubs), §§ 2, 3 (as am’d by L. 1890, ch. 68; L. 1885, o 474; L. 1888, ch. 536; L. 1892, ch. 597 and L. 1893, ch. 465); L. 1886, ch. 236 (Political Clubs), § 3; L. 1887, ch. 317 (Bar Ass’ns), § 3. See authorities under Sec. 8, supra. MEMBERSHIP Corporations Law. 161 Distinction Between Duty of Member in Membership and Stock Corporation. In membership corporations a member may be expelled for violation of the rules or for an offence which has no immediate relation to the corporate character of the party, but is of so in- famous a nature as to render the offender unfit to associate with other members, for there is a personal and corporate duty from the members to the corporation. In a business corporation having capital stock no greater duty rests upon a member than to pay for the stock for which he has subscribed. Monroe Dairy Ass’n v. Webb, 40 App. Div. 49 (1899). Who Are Members. This definition of “members” seems (in accordance with Gen. Corp. Law, Sec. 321) to supersede that contained in Section 3, Subdiv. 8, of Gen. Corp Law, ante. Under that definition bond- holders entitled to vote pursuant to Mem. Corp. Law, Sec. 8, would be members. Procuring List of Fellow Members. While the Court may in its discretion issue a writ of mandamus to permit a member to obtain a list of fellow members upon the authority of Matter of Steinway 159 N. Y. 250, nevertheless it is also well settled that an examination of the roll of members will not be permitted for an ulterior purpose, or to embarrass the cor- poration. Windels v. Congress Club of Kings Co. Kings Co. Spec. Term N. Y. Law Journal June 16, 1913, Scudder J. Proxies. Pursuant to Gen. Corp. Law, Sec. 26, ante, members may vote by proxy. Gen. Corp. Law, Sec. 26, provides that the by-laws may designate who may act as proxies and the length of time for which proxies may be executed. For form of proxy see Forms Nos. 2 and 3, post. Vote. Gen. Corp. Law, Sec. 23, provides that at every meeting of a non-stock corporation, every member, unless disqualified by the by-laws, shall be entitled to one vote; and that no member of a corporation shall sell his vote or issue a proxy to vote for a sum of money or anything of value. Unincorporated Associations. It is not within the scope of this work to discuss at length the rights and liabilities of members of voluntary unincorporated associations in so far as they may differ from those of members of a corporation formed under this act. Many of the decisions with respect to unincorporated societies are obviously pertinent to a discussion of the provisions of this law, and in so far as this is the case those decisions will be cited. Where a voluntary unincorporated society has no constitution 162 MEMBERSHIP CoRPORATIONS Law. or rules, the regularity of its proceedings will be tested by the law of corporations, or partnerships or of the ordinary parlia- mentary rules of deliberative assemblies in so far as applicable. Ostrom v. Greene, 161 N. Y. 353 (1900). . A minority of the members may adjourn a meeting and business may be conducted at the adjourned meeting. Officers may be re- moved at any meeting duly held, but members cannot be expelled without notice. Ostrom v. Greene, 161 N. Y. 353 (1900). A member cannot maintain an action in his own name against another member for breach of an agreement with the voluntary association, nor can an assignee of a member maintain such an action. No associate has an interest which can be separated and taken out of the whole for his sole use until the joint affairs are settled, the association dissolved, the mutual rights of members adjusted and the ultimate shares of each determined. McMahon v. Rauhr, 47 N. Y. 67 (1871). Courts will not interfere in the internal affairs of voluntary asso- ciations; nor will they be dissolved for slight causes, but only where it appears that the organization has ceased to answer the ends of its existence and there is no other mode of relief attain- able. Lafond v. Deems, 81 N. Y. 507 (1880). A court of equity will not interfere in the affairs of the asso- ciation until the remedies provided by the rules are exhausted. Lafond v. Deems, 81 N. Y. 507 (1880). The members of an unincorporated club are not partners and one member is not the agent for the other in the absence of ex- press proof of agency. Lumbard v. Grant, 35 Misc. 140, aff'd on op. below, 68 App. Div. 639 (1902). No action can be maintained to compel an unincorporated political association to admit a person to membership. McKane v. Adams, 123 N. Y. 609 (1890). News Associations. See § 41 post, permitting corporations, limited liability com- panies, joint-stock and other associations to become members of news associations. § 10. Directors and trustees. The directors of a mem- bership corporation other than those named in its certifi- cate of incorporation, shall be elected from among the mem- bers, by the members and by such other persons as are authorized, by or in pursuance of law, to vote therefor. If a vacancy in the office of director of a membership corporation created under or by a general or special law, shall not be filled within six months after it occurs, either for want of a by-law or other provision for filling the same; or if, by reason of the absence, illness or other inability of Reticious Corporations Law. 163 one or more of the remaining directors, a quorum of the board of directors cannot be obtained, the remaining direc- tors of such corporation, or a majority of them, may ap- point a member of such corporation to fill such vacancy, and such appointment filed in the office of the clerk of the county in which such corporation is located, shall con- stitute such person a director of such corporation, until the next annual election of the directors. A membership corporation, except a Young Men’s Chris- tian Association, may file in the offices in which its cer- tificate of incorporation is filed, a supplemental certificate designating not less than five nor more than fifteen of its directors to be the trustees of its property until the next annual meeting, and may by by-laws confer on such trus- tees any of the powers, duties or obligations of the direc- tors of such corporation in relation to the care, custody or management of such property. At each annual meeting . of the corporation thereafter the members thereof shall des- ignate successors to the trustees in office. Source.—Formerly Mem. Corp. L. (L. 1895, ch. 559), § 10, as am’d by L. 1905, ch. 320. Revised from L. 1796, ch. 43 (Libraries), §§ 4-6; L. 1825, ch. 19 (Libraries), § 1; L. 1848, ch. 319 (Charitable and Benev. Corp’ns), § 3, as am’d by L. 1853, ch. 487; L. 1853, ch. 395 (Libraries), § 6; L. 1865, ch. 368 (Clubs), § 3, as am’d by L. 1885, ch. 66; L. 1875, ch. 267 (Clubs), § 4, as am’d by L. 1802, ch. 597 and L. 1893, ch. 465; L. 1875, ch. 343 (Libraries), § 3; L. 1886, ch. 236 (Political Clubs), § 5; L. 1887, ch. 317 (Bar Ass’ns), § 4; L. 1887, ch. 501 (Y. M. C. A.), § 5; L. 1888, ch. 391 (Societies for Training Nurses), §§ 3, 4; L. 1889, ch. 95 (Hospitals), § 6; L. 1892, ch. 333 and L. 1894, ch. 325 (Benevolent Corp’ns). Judicial Review of Elections. Gen. Corp. Law, Sec. 32, gives the Supreme Court power to hear complaints with respect to elections in a summary way and to establish the election or order a new election. For authorities. interpreting the section see that section, ante. See also code provisions, post, regulating actions in the nature of quo warranto. to test title to office. Effect of Failure to Elect Directors. See Gen. Corp. Law, Sec. 28 et seq., ante. Proxies. Gen. Corp. Law, Sec. 26, provides that every member of a core. 164 MeEmsBersHIp Corporations Law. poration except a religious corporation entitled to vote at any meeting thereof may so vote by proxy. Gen. Corp. Law, Sec. 26, provides that the by-laws may desig- nate who may act as proxies and the length of time for which proxies may be executed. For forms of Proxy, see Forms Nos. 2 and 3, post. Suspension or Removal of Directors. Article 5 of the Gen. Corp. Law, ante, provides for suspension and removal of directors by action, and applies to membership corporations because such corporations are not mentioned in Gen. Corp. Law, Sec. 300, which makes Article 5 inapplicable to cer- tain classes of corporations there mentioned. The suspension or removal can be accomplished only by final judgment (Gen. Corp. Law, Sec. 307, ante) unless of course the director is deprived of his membership by expulsion, in which case his office would be- come vacant, as directors must be members, pursuant to paragraph one of this section. Actions Against Directors for Accounting. See Gen. Corp. Law, Sec. 90, ante, and cases there cited. Title of Directors. See Gen. Corp. Law, § 34, ante, and cases there cited. The original directors named in the certificate become such by direct command of the statute and not through an election; there- fore, after the filing of the certificate, they have full power to act. See Hamilton Trust Co. v. Clemes, 163 N. Y. 423, aff’'g 17 App. Div. 152 (1900). Executive Committee. See Gen. Corp. Law, § 34, ante, and cases there cited. § 11. Powers, duties and liabilities of directors. The directors of every membership corporation, except a cor- poration for the prevention of cruelty to children or ani- mals, and a corporation for promoting or maintaining the principles of a political party, created under or by a gen- eral or special law, shall present at its annual meeting a report, verified by the president and treasurer, or by a ma- jority of the directors, showing the whole amount of real and personal property owned by it, where located, and where and how invested, the amount and nature of the ‘property acquired during the year immediately preceding the date of the report and the manner of the acquisition; the amount applied, appropriated or expended during the ‘year immediately preceding such date, and the purposes, MEMBERSHIP CorPoRATIONS Law. 165 objects or persons to or for which such applications, appro- priations or expenditures have been made; and the names and places of residence of the persons who have been ad- mitted to membership in the corporation during such year, which report shall be filed with the records of the corpora- tion and an abstract thereof entered in the minutes of the proceedings of the annual meeting. The directors of every membership corporation, except a society for the preven- tion of cruelty to children or animals, a corporation for the promotion of agriculture and which holds annual agri- cultural fairs, and a corporation formed for promoting or maintaining the principles of a political party, shall be jointly and severally liable for any debt of the corporation contracted while they are directors, payable within one year or less from the date it was contracted, if an action for the collection thereof be brought against the corpora- tion within one year after the debt becomes due, and an execution issued therein to the county where its office is, or where a certificate of its incorporation is filed, be re- turned wholly or partly unsatisfied, and if the action against the directors to recover the amount unsatisfied be commenced within one year after the return of such execu- tion; provided, however, that no director of a corporation formed for promoting or maintaining the principles of a political party shall be liable for any such debt unless the contracting of the same shall have been specifically author- ized by the board of directors at a meeting thereof, and assented to thereat by the directors sought to be charged therewith. Source.—Formerly Mem. Corp. L. (L. 1895, ch. 559), § 11, as am’d by L. 1806, ch. 542 and L. 1899, ch. 292. Revised from L. 1796, ch. 43 (Libraries), § 5; L. 1848, ch. 319 (Benevolent Corp’ns), § 7, as am’d by L. 1853, ch. 487; L. 1865, ch. 368 (Clubs), § 7; L. 1875, ch. 267 (Clubs), §§ 8, 9; L. 1875, ch. 343 (Libraries), § 6; L. 1887, ch. 317 (Bar Ass’ns), § 8; L. 1888, ch. 293 (Playgrounds), 6. For form of complaint against directors, see Form No. 47. Annual Report. The statute provides no penalty for the failure of the directors 166 MemsBersuir Corporations Law. to present the annual report. See Sec. 16, post, as to visitation of Supreme Court. Actions for Accounting, etc. See Gen. Corp. Law, § 90, ante. Liability of Directors. To hold directors personally liable for a corporate debt the following six elements must all appear: (1) The debt must be contracted while they were directors; (2) the debt must be payable within one year or less from the date it was contracted; (3) an action against the corporation to collect the debt must be brought within one year after the debt became due; (4) execution must have issued in the action to the county where the office of the corporation is or where a certificate of its incorporation is filed; (5) the execution must be returned wholly or partly unsatisfied; (6) the action against the directors to collect the amount unsatis- fied must be commenced within one year after the return of the execution. It is to be noted that there is no provision fixing the time within which execution must be issued upon the judgment against the corporation and it would seem therefore that pursuant to Code of Civ. Pro. Sec. 1375, execution may be issued within five years and the action against the directors commenced within one year after its return. See Handy v. Draper, 89 N. Y. 334 (1882), as cited, post. The Stock Corporation Law (L. 1909, ch. 61), provides as fol- lows: § 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 commence an action therefor within thirty days after the return of an execution unsatisfied against the corporation upon a judgment recovered against it for services. § 59. Limitation of stockholder’s liability. No action shall be aa against a stockholder for any debt of the corpora- tion until judgment therefor has been recovered against the corporation, and an execution thereon has been returned un- satisfied in whole or in part, and the amount due on such execution shall be the amount recoverable, with costs against the stockholder. No stockholder shall be personally liable for any debt of the corporation not payable within two years from the time it is contracted, nor unless an action for its collection shall be brought against the corporation within two years after the debt becomes due; and no action shall be ” MEMBERSHIP CorPoRATIONS Law. 167 brought against a stockholder 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. : Some of the decisions interpreting the language of the fore- going sections of the Stock Corp. Law as to procedure are per- tinent in construing Sec. 11, supra, and are therefore cited under the following headings. Nature of Director’s Liability. No new liability is created by the statute. The primary and original liability of members which would have existed but for the incorporation is retained as to some of them notwithstanding such incorporation, and such liability is contractual and not penal. Rogers v. Decker, 131 N. Y. 490 (1892); Marsh v. Kaye, 44 App. Div. 68, aff'd 168 N. Y. 196 (1901). The character of the liability under this section is essentially the same as’ that of stockholders under the various statutes regu- lating the incorporation of companies, differing from the latter only in degree. Marsh v. Kaye, 168 N. Y. 196 (1901). An action in equity cannot be maintained by a creditor on behalf of himself and other creditors against the directors to have ascertained what sums the several directors are liable to pay; to have the same apportioned to the debts of the creditors and to restrain actions at law by creditors to recover the amount of their claims. The liability of the directors is absolute and unlimited and there is no fund to be distributed ratably amongst creditors. There is an adequate remedy at law for each creditor. Marsh v. Kaye, 168 N. Y. 196 (1901) and see Bauer v. Parker, 82 App. Div. 289 (1903). ; In equity one director who has paid corporate obligations may maintain an action against his co-directors for ratable contribu- tion. Marsh v. Kaye, 168 N. Y. 196, 200 (1901). The directors are jointly and severally liable for the whole amount of the debt. Marsh v. Kaye, 168 N. Y. 196 (1901). Kugel v. Hirschman, 22 Misc. 533 (1898). The proceeding against the corporation is only required for the benefit of the stockholders, as a part of the immunity against a primary personal liability vouchsafed by law to corporators shield- ing them from action until a bona fide attempt has be2n made and exhausted to obtain payment from the corporate property. Hard- man v. Sage, 124 N. Y. 25 (1891). Where Conditions Precedent Excused. Compliance with the condition precedent is excused when ren- dered legally impossible. Shellington v. Howland, 53 N. Y. 371 (1873); Kincaid v. Dwinelle, 59 N. Y. 548 (1874); Cuykendall v. Corning, 88 N. Y. 129 (1882); United Glass Co. v. Vary, 152 N. Y. 121 (1897), aff’g 79 Hun 103. A complaint need not show recovery of a judgment against the 168 MEMBERSHIP CoRPOoRATIONS Law. corporation and return of an execution unsatisfied, where it con- tains an allegation that judgment of dissolution had been rendered which restrained creditors from instituting actions against it. Lang v. Lutz, 180 N. Y. 254 (1905), aff’g 83 App. Div. 534; Thomp- son v. Nicolai, 21 Misc. 700 (1897). The judgment demanded does not affect corporate property but that of the stockholders only, therefore the receiver is not a necessary party. Id. See, also, Hunting v. Blun, 143 N. Y. 511 (1894). In an action against stockholders for corporate debts to an amount equal to the amount unpaid on their stock it appeared that the claim was proved against the corporation in bankruptcy proceedings and that plaintiff received a dividend in partial pay- ment thereon, held that the condition precedent to an action against a stockholder that there must be an unsatisfied judgment against the corporation, is excused by the discharge of the cor- poration in bankruptcy. Firestone Tire & Rubber Co. v. Agnew, 194 N. Y. 165 (1909), revsg. 128 App. Div. 518. After proceedings in bankruptcy have been commenced against the corporation it is unlawful for the plaintiff to prosecute his action. Shellington v. Howland, 53 N. Y. 371 (1873); Hardman v. Sage, 124 N. Y. 25 (1891). Statute of Limitation. The time within which an action must be commenced begins to run on the day when the debt first became due. Hardman v. Sage, 124 N. Y. 25 (1891); Jagger Iron Co. v. Walker, 76 N. Y. 522 (1879). If the time of payment of a debt is extended by the taking of a promissory note, which is sued on more than a year after the debt became due, the claim of the creditor against the stock- holders is lost and they cannot be charged with the payment of the debt. Hardman v. Sage, 124 N. Y. 25 (1891), distg. 89 N. Y. 335 and 338. : The statute does not begin to run in favor of a stockholder until after the return of execution against the corporation. Handy v. Draper, 89 N. Y. 334 (1882). If a stockholder is divested of his interest in a corporation by judgment of dissolution the time limited begins to run from the date of entry of such judgment. Hollingshead v. Woodward, 107 N. Y. 96 (1887). The giving of renewal notes by a corporation does not operate to prevent the running of the statutory limitation upon stock- holders’ lialsility for the original indebtedness. Close v. Potter, 155 N. Y. 145 (1808), revsg. 11 Misc. 729. From What Date Year is to be Computed. Where a lease to a corporation was executed three years prior to election of defendant directors they are liable for rent accru- ing during their incumbency. Upon the execution of the lease the obligation was a contingent liability which ripened into a debt as each instalment of rent became due. Thistle v. Jones, 123 App. MEMBERSHIP CorPoRATIONS Law. 169 Div. 40 (1907); but those who were directors at the time of the execution of the lease are not liable unless they are directors at the time the rent becomes due. Dunn v. Neustadtl, 72 Misc. 1 (1911). Pleading. A complaint against directors of a cricket and baseball club is sufficient if it alleges that the defendant is incorporated under L. 1875, Chap. 267 (now a part of this law) and is not a society for the prevention of cruelty to children and animals, for it nega- tives the idea that the defendant is a corporation for the promo- tion of agriculture and need not show that the defendant is not a political organization. Acker, Merrall & Condit v. Richards, 63 App. Div. 305 (1901). In an action upon a note the complaint need not allege when the debt was contracted in addition to the date of execution and delivery of the note by the corporation, for it will be assumed that the debt was contracted simultaneously with the giving of the note. Straus v. Sage, 10 Misc. 118 (1894) reversing S. C., 5 Misc. 255 (1893) and overruling dictum in Smith v. Sage, 5 Misc. 257 (1893). A creditor of a corporation seeking to charge a stockholder under the statute, must allege and prove all the facts upon which the liability depends; he must aver the performance of condi- tions precedent, or set forth facts which in law excuse their per- formance. Hirshfield v. Bopp, 145 N. Y. 84 (1894); Cuykendall v. Corning, 88 N. Y. 130, 137 (1882). The issuing and return of an execution against a corporation is a condition precedent to the right of a judgment creditor to main- tain an action against a stockholder, and before a stockholder can be made liable it must appear that the judgment creditor has at- tempted in good faith to collect his judgment from the corpora- tion. Berwind-White Coal Company v. Ewart, 90 Hun 60 (1895). The action is not penal and if the complaint is verified, the plaintiff need not accept an unverified answer. Rogers v. Decker, 131 N. Y. 490 (1892). Return of Execution. A return of “nulla bona” on the execution is sufficient, as it is understood to mean that the execution is uncollectible. Card v. Groesbeck, 146 App. Div. 30, aff'd on this point 204 N. Y. 301, 306 (1912). § 12. Prohibitions on officers. No director or other offi- cer of a membership corporation hereafter created shall re-' ceive, directly or indirectly, any salary, compensation or emolument from such corporation, either as such officer or director or in any other capacity, unless authorized by the 170 MEMBERSHIP CorRpPoRATIONS Law. by-laws of the corporation, or by the concurring vote of two-thirds of the directors. No director or other officer of a membership corporation hereafter created shall be interested, directly or indirectly, in any contract relating to the operations conducted by the corporation, nor in any contract for furnishing supplies thereto, unless expressly authorized by the by-laws of the corporation, and by the concurring vote of all the directors. The foregoing provisions of this section shall also apply after January first, eighteen hundred and ninety-six, to every membership corporation existing on August thirty- first, eighteen hundred and ninety-five, and theretofore created under any law repealed by this chapter. Sources——Formerly Mem. Corp. L. (L. 1895, ch. 559), § 12. Revised from L. 1872, ch. 104 (Benevolent Corp’ns); L. 1889, ch. 95 (Hospitals Corp’ns), § 9. Common Law Rule. In the absence of statute, a-director or officer of a corpora- tion is not precluded from entering into contracts with it for his personal benefit where the rights of the corporation are fully protected. Such contracts, especially where the corporation is represented by a majority of the directors exclusive of the party interested, are not void but are simply voidable at the suit of the corporation or persons claiming through it. Veeder v. Horst- mann, 85 App. Div. 154 (1903); but as in the case of every other trustee or agent, no director can, in acting on behalf of the cor- poration, reserve or secure to himself any advantage or benefit. Koster v. Pain, 41 App. Div. 443 (1899). § 13. Purchase, sale, mortgage and lease of real property. No purchase, sale, mortgage or lease of real property shall be made by a membership corporation, unless ordered by the concurring vote of at least two-thirds of the whole number of its directors, provided, however, that when the whole numper of directors is not less than twenty-one, the vote of a majority of the whole number shall be sufficient. No real property of a membership corporation located within this state shall, without leave of the court, be leased for a longer period than five years, or sold or mortgaged. A mortgage may be executed to secure the payment of bonds issued or to be issued to different persons. The MEMBERSHIP CorPoRATIONS Law. 171 court may grant leave to a membership corporation to con- vey real property, without consideration, to another mem- bership corporation created for the same or kindred pur- poses. If a conveyance or mortgage of the real property of any such corporation located within this state has been or shall be executed and delivered without leave of the court, ob- tained as required by law, the court may, thereafter, upon the application of the corporation or of the grantee or mortgagee in any such conveyance or mortgage, or any person claiming under such grantee or mortgagee, upon notice to such corporation, confirm such previously exe- cuted conveyance or mortgage, and thereupon such convey- ance or mortgage shall be as valid and of the same force and effect as if it had been executed and delivered with leave of the court, except as to purchasers or mortgagees of record of such real property, subsequent to the execution and delivery of such conveyance or mortgage. A membership corporation may, if its by-laws so provide, and pursuant to the provisions thereof, and without leave of the court, convey to a member of the corporation a por- tion of its real property for the erection thereupon of a cottage or other dwelling-house with suitable outbuildings, on the terms and conditions that such portion, together with the buildings thereupon, shall belong to such member and on his death pass as part of his estate to his heirs or devisees, but that the land whereupon such buildings shall be erected shall be inalienable by him or them, except to the corporation or to a member thereof, and that such member in his lifetime, or after his death, his heirs or de- visees, may convey such interest in such property to the corporation, or to a member thereof for such sum as may be mutually agreed upon, but not to any other person. Such conveyance may provide that the grantees of the in- terest in each lot so conveyed shall be entitled to one vote, either in person or by proxy, at all meetings of the cor- poration, if the by-laws authorize such a provision. Except as otherwise provided in this chapter, no portion 172 MemeersHip Corporations Law. of acemetery of a cemetery corporation which any person other than the corporation is entitled to use for burial pur- poses, or in which burials have been made and not lawfully removed, shall be sold, mortgaged or leased by the corpo- ration. Sources——Formerly Mem. Corp. L. (L. 1895, ch. 559), § 13, as am’d by L. 1900, ch. 208; L. 1904, ch. 431 and L. 1907, ch. 177. Revised from L. 1848, ch. 319 (Benevolent, etc., Corp’ns), § 3, as am’d by L. 1853, ch. 487; L. 1854, ch. 50 (Benevolent, etc., Corp’ns) ; L. 1855, ch. 425 (Agricultural, etc., Corp’ns), § 7, as am’d by L. 1894, ch. 139; L. 1861, ch. 58 (Benevolent, etc. Corp’ns), § 1; L. 1865, ch. 368 (Clubs), § 9, as am’d by L. 1877, ch. 380; L. 1869, ch. 629 (Clubs), as am’d by L. 1884, ch. 68; L. 1875, ch. 267 (Clubs), § 3, as am’d by L. 1890, ch. 68; L. 1887, ch. 501 (Y. M. C. A.), as am’d by L. 1889, ch. 33; L. 1889, ch. 95 (Hospital Corp’ns), § 7; L. 1891, ch. 167 (Y. W. C. A.), § 6. Limitations upon Amount of Holdings. See General Corp. Law, § 12. Proceedings to Obtain Leave of Court. See General Corp. Law, § 70 et seq., and numerous cases there cited, ante, which provides what the petition must show. For forms of petition, order, mortgage securing issue of bonds, etc., see Forms Nos. 15, 16, 17, 26 and 27, post. Confirming Unauthorized Leases. While the above section provides for the confirmation of con- veyances and mortgages of real property made without leave of court, it does not provide for the confirmation of leases executed without such leave. A lease cannot be considered real property. General Construction Law, § 40 (L. 1909, ch. 27) defines real prop- erty to include real estate, lands, tenements and hereditaments corporeal and incorporeal, and as a lease is a chattel real, it does not come within the definition. Mayor v. Mabie, 13 N. Y. 151 (1855); Matter of Ehrsam, 37 App. Div. 272 (1899). Furthermore, the use of the term “lease” in the first and second paragraphs of the section and its omission in the third paragraph is evidence of an intent to make the provision with respect to confirmation inap- plicable to feases. Result of Failure to Obtain Leave. Failure to obtain leave renders the conveyance, mortgage or lease void. Dudley v. Congregation of the Third Order, etc., 138 N. Y. 451 (1893). This case must now be read in connection with the statutory provisions authorizing the confirmation of convey- ances made without previous order of the court. MEMBERSHIP Corporations Law. 173 Christian Associations. See Mem. Corp. Law, § 141, post, which provides that in all proceedings for the purchase, sale, mortgage and lease of real property of Christian Associations the board of trustees of such corporations shall act as the board of directors thereof. Lease Without Order of Directors. Although the secretary has no authority to enter into a lease without the requisite order of the directors; nevertheless, the cor- poration by its conduct may ratify the officers unauthorized act and be bound by the lease. Fischer v. Motor Boat Club of Am., 61 Misc. 66 (1908). Sale of Dwellings. Where by the terms of the deed the purchaser became a mem- ber of the club and held subject to its rules and regulations, and the latter provided for assessments to meet any deficiencies aris- ing from the maintenance of the club property, and for a for- feiture in case of failure to pay the assessment as prescribed, an equitable action to restrain the forfeiture and remove a cloud on title cannot be maintained on the ground that the improvements made were permanent and therefore invalid because the assess- ments on their face showed their purpose and if invalid created no cloud on the title. Whiteside v. Noyac Cottage Ass’n, 142 N. Y. 585 (1894). Conveyances Without Consideration. The last sentence of the second paragraph of the above section was enacted to supersede the ruling in Madison Ave. Bapt. Ch. v. Baptist Ch. of Oliver St., 46 N. Y. 131 (1871). If the petition for leave to convey for a nominal consideration does not show that the corporation to which the transfer is to be made was created for the same or kindred purposes for which the grantor was created the court has no power to authorize the conveyance and a deed executed in pursuance of the order is void. Fearless Fire, etc., Co. v. Veteran Volunteer Firemen’s Ass’n, etc. Queens Co. Spec. Term, Blackmar, J.. N. Y. Law Journal, Feb- tuary 5, 1913. § 14. Changing number of directors. A membership corporation, created under or by a general or special law, may by vote of the majority of its members present at an annual meeting, or at any special meeting duly called for that purpose and so specified in the notice of the said meet- ing, determine to change the number of its directors to any number which a corporation created under this chapter for the same purposes is authorized to have. Notice of such special meeting shall be given as provided by section 174 MEMBERSHIP Corporations Law. twenty-six of the stock corporation law, or by publication thereof once in each week, for three successive weeks next preceding the time when such special meeting is to be held, . in at least two newspapers within the county where such special meeting is to be held. On such determination, a majority of the directors shall sign, acknowledge and file an amended certificate specifying such reduction or in- crease; and thereupon the number of directors shall be the number stated in such certificate. Each director then in office shall serve until his term expires, and there shall be no election of directors, until the number of directors is less than the number specified in the certificate. Sources.—Formerly Mem. Corp. L. (L. 1895, ch. 559), § 14, as am’d by L. 1904, ch. 271. Revised from 1848, ch. 319 (Benevolent, etc., Corp’ns), § 11, as added by L. 1875, ch. 452; L. 1865, ch. 368 (Clubs), § 3, as am’d by L. 1885, ch. 66; L. 1875, ch. 267 (Clubs), § 4, as am’d by L. 1893, ch. 465; L. 1887, ch. 317 (Bar Ass’ns), § 5; L. 1888, ch. 391 (Societies for Training Nurses), § 4; L. 1892, ch. 197 (Benevolent) as am’d by L. 1893, ch. 180. For form of certificate changing number of directors see Forms Nos. 48 and 49, post. Notice of Meeting. Stock Corp. Law, § 26 (L. 1909, ch. 61), in accordance with which the notice must be given as above provided reads as fol- lows: Sec. 26, Change of number of directors. The number of directors of any stock corporation may be increased or re- duced, but not below the minimum number prescribed by law, when the stockholders owning 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 postoffice 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 pro- ceedings of such meeting shall be entered in the minutes of the corporation and a transcript thereof verified by the presi- dent and secretary of the meeting shall be filed in the offices where the original certificates of incorporation were filed. * * *¢ * * Filing Certificate. The certificate must be filed and recorded in the office of the Secretary of State, and a certified copy or a duplicate original must also be filed and recorded in the County Clerk’s office in MEMBERSHIP CoRPORATIONS Law.. 175 which the certificate of incorporation was filed. General Corpora- tion Law, § 5, ante. It has been held in construing the provision of the above section of the stock corporation law relative to filing that the change of number of directors is not effective until the certificate is filed and that a subsequent filing does not relate back so as to give effect to a resolution not operative in itself. Matter of West- chester Trust Co., 186 N. Y. 215 (1906); In re Dolgeville Elec. Lt. & Power Co., 160 N. Y. 500 (1899). In view of these decisions and the language of the above section 14, that upon the filing of the certificate the number of directors shall “thereupon” be the num- ber stated in such certificate, it is believed that the change of the number of directors of a membership corporation does not become effective until the certificate is actually filed. How Change in Number of Directors is Effected. The above section provides that each director in office shall serve until his term expires, and that there shall be no election of directors until the number of directors is less than the number- specified in the certificate. No such provision is found in the stock corporation law which omits to provide how the reduction of the number of directors is to be effected; but it has been held that the provision of that law can only become effective when the terms of office of a sufficient number of directors expire or they volun- tarily resign. In re Manoca Temple Ass’n, 128 App. Div. 796° (1908). § 15. Changing time of annual meetings. The time of holding the annual meeting of a membership corporation, created under or by a general or special law, may be changed, from time to time, by vote of an annual meeting, or of a special meeting duly called for that purpose, and by filing a supplemental certificate of incorporation con- taining a transcript of the minutes of the meeting, relating to such change, duly certified and verified by the president and secretary of the meeting. Source.—Formerly Mem. Corp. L. (L. 1895, ch. 559), § 15. For certificate of change of time of annual meeting, see Form No. 50, post. As to filing supplemental certificate see Gen. Corp. Law, § 5, ante. § 16. Visitation of supreme court. All membership cor- porations with their books and vouchers, shall be subject to the visitation and inspection of a justice of the supreme 176 MemBersHIP Corporations Law. court, or of any person appointed by the court for that pur- pose. If it appears to such court by the verified petition of a member or creditor of any such corporation, that it, or its directors, officers or agents, have misappropriated any of the funds or property of the corporation, or diverted them from the purpose of its incorporation, or that it has acquired property in excess of the amount which it is au- thorized by law to hold, or engaged in any business other than that stated in its certificate of incorporation, it may order that a notice of at least eight days be served on the directors of the corporation, with a copy of such petition, requiring them to show cause at a time and place to be therein specified, why they should not be required to make and file an inventory and account of the property, effects and liabilities of such corporation with a detailed state- ment of its transactions during the twelve months next preceding the granting of such order; and if, on the hear- ing of such application, no good cause is shown to the con- trary, the court may make an order requiring such inven- tory, account and statement to be filed, and proceed to take and state an account of the property and liabilities of the corporation, or appoint a referee for that purpose; and when such account is taken and stated, it may, after hearing all the parties to the application, enter a final order determining the amount of property so held by the cor- poration, its annual income, whether any of the property or funds of the corporation have been misappropriated or diverted to any other purpose than that for which such corporation was incorporated, and whether such corpora- tion has been engaged in any other business than that speci- fied in its certificate of incorporation, from which final order an appeal may be taken by any party aggrieved to the appellate*division of the supreme court, and to the court of appeals; but no corporation shall be required to make and file more than one inventory and account in any one year, nor to make a second account and inventory, while proceedings are pending for the statement of an account under this section. MEMBERSHIP Corporations Law. 177 Source.—Formerly Mem. Corp. L. (L. 1895, ch. 559), § 16, as am’d by L. 1899, ch. 360. Revised from L. 1848, ch. 319, § 8; L. 1875, ch. 267, § 9; 1875, ch. 343, § 7; L. 1888, ch. 293, § 6. For forms under the above section, see Forms Nos. 79 to 81, post. Actions Against Directors for Accounting. See provisions of Article 5 of Gen. Corp. Law, ante, which apply to membership corporations because they are not mentioned in Gen. Corp. Law, § 300, which makes Article 5 inapplicable to certain classes of corporations. Notice of Application. Each director should be served with notice of the application. Matter of United Ind. Kozower Ben. Ass’n, Page, J., Special Term, New York County, N. Y. Law Journal, June 23, 1911. No Injunction Pending Accounting. A provision in the order directing the filing of the account which enjoins any sale of the corporate property pending the adjust- ment of the account is unauthorized. Matter of Greene, 153 App. Div. 8 (1912). § 17. Reports to comptroller by corporations receiving state moneys. No moneys appropriated by the legislature from the treasury of the state to a membership corporation, created under or by a general or special law, except a cor- poration subject to the visitation of the regents of the uni- versity of the state of New York, shall be paid to it or to any institution under its care, control or management, until its president and secretary, or a majority of its directors, make a sworn report to the comptroller of its purposes, operations, financial condition, expenditures and manage- ment, and particularly, of the disposition of moneys appro- priated by the legislature for the maintenance of such institution, for the year ending with the last preceding thirtieth day of September. The comptroller shall transmit such report to the legislature with his annual report. Source-——Formerly Mem. Corp. L. (L. 1895, ch. 559), § 17. Re- vised from L. 1864, ch. 419. Section 18. This section was repealed by Laws of Ig11, chapter 857. It read as follows: § 18. Societies and clubs taking property by will. Any cor- poration formed under chapter three hundred and sixty-eight 178 MemsBersHip Corporations Law. of the laws of eighteen hundred and sixty-five, chapter two hundred and sixty-seven of the laws of eighteen hundred and seventy-five, chapter three hundred and forty-three of the laws of eighteen hundred and seventy-five, or chapter two hundred and thirty-six of the laws of eighteen hundred and eighty-six, shall be capable of taking, holding or receiving any property, real or personal, by virtue of any devise or bequest contained in any last will or testament of any person whatsoever, the clear annual income of which devise or bequest shall not ex- ceed the sum of ten thousand dollars; subject to the limita- tions provided in section eighteen of the decedent estate law. In considering the validity of devises and bequests to corpora- tions, it is to be noted that the limitations imposed by the statute may be of two kinds: (1) Limitations upon the right of the cor- poration to take and hold the property; (2) limitations upon the right of the testator to devise and bequeath to the corporation. Limitations upon the right to take and hold property may apply generally to all corporations or may apply only to corporations formed under certain specified acts. Limitations upon the right of a testator to give and devise may apply to certain kinds of cor- porations generally or may apply to those formed under certain specified acts. Limitations upon Right of Corporation to Take and Hold Gen- erally Applicable. Gen. Corp. Law, § 11, ante, page 19, provides: Every cor- poration as such has power, though not specified in the law under which it is incorporated eae ee 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 shall be prescribed by law. Gen. Corp. Law, § 12, ante, provides: “Enlargement of limitations upon the amount of the prop- erty 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 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 increase in value arising otherwise than from improvements made thereon shall be taken into account.” It would appear from the foregoing Section 12 of the General Corp. Law that a non-stock corporation formed under a general or special law which does not limit the amount of property that it may hold, may by virtue of Section 11 hold and dispose of such property as the purposes of the corporation may require irrespec- MEMBERSHIP CorFORATIONS Law. 179 tive of amount. Section 12 appears to be applicable only to those cases where some general or special law or certificate of incor- poration expressly limits the amount of property to be held; and in such case the corporation by virtue of Section 12 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 express limitations contained in such other general or special law. In other words, if a general or special law or a certificate of incorporation contains a limitation, it is superseded by Section 12 and if the general or special law or certificate of incorporation contains no limitation, Section 12 has no application and the right to take and hold is limited solely by the general provision contained in Gen. Corp. Law, § 11, that the property must be taken and held for a corporate purpose. Gen. Corp. Law, § 12, does not seem to have been judicially interpreted, but the use of the word “if” seems to make it clear that the section is not a limitation in itself, but is intended solely as a general provision modifying all limitations contained in other enactments. Specific Limitations upon Right to Take and Hold. The limitations upon the right of certain corporations to take and hold property were formerly found in Membership Corp. Law, Sections 18 and 19, both of which were repealed by L. 1911, Chap. 857. The repeal of these sections was induced by the considera- tion that it was manifestly unfair that similar corporations formed under the present act were not subject to the same limitations and by the further fact that the reason for the limitations no longer existed. The corporations formed under the statutes enumerated in the sections repealed are now subject only to the general limita- tion contained in Gen. Corp. Law, Section 11. General Limitation upon Right of Testator to Devise and Be- queath. The only general limitation upon the right of a’ testator to devise or bequeath is found in Decedent Estate Law, Section 17 (formerly Laws of 1860, Chap. 360), which has not been repealed and which reads as follows: “Devise or bequest to certain societies, associations and corporations. No person having a husband, wife, child or parent, shall, by his or her last will and testament, devise or bequeath to any benevolent, charitable, literary, scientific, re- ligious or missionary society, association or corporation, in trust or otherwise, more than one-half part of his or her estate, after the payment of his or her debts, and such devise or bequest shall be valid to the extent of one-half, and no more.” This section appears to be the only limitation upon the right of testators which has any application to corporations formed under the present Membership Corp. Law. Whether a particular bequest or devise is subject to the limitations of this section depends upon 180 Mempersuie Corporations Law. two considerations: (1) Whether the testator was survived by any of the persons enumerated, and (2) whether the corporation legatee or devisee is in fact one of those within the inhibition of the act. Specific Limitations upon Right to Devise and Bequeath. The specific limitations upon the right to devise and bequeath to corporations formed under acts therein specifically enumerated were formerly found in Decedent’s Estate Law, Sections 18, 19 and 20, all of which were also repealed by L. 1911, Chap. 857. Summary—Existing Limitations. It appears from the foregoing discussion therefore, (1) that the corporations now existing which were formed under the several acts enumerated in Sections 18 and 19 of the Membership Corp. Law may now take and hold property without limit as to amount, ‘provided it is taken and held for a corporate purpose; and (2) that testators may devise and bequeath to such corporations with- out limit, provided the devise or bequest does not come within the inhibition of Decedent’s Estate Law, Sec. 17, which, as above stated, has not been repealed. ‘Trusts for Parks and Libraries in Villages and Towns. The General Municipal Law, Article 7, provides that trusts may be created by grant, devise, gift or bequest for the purpose of establishing public parks and libraries in any village or town. ‘The trustees named or chosen become a corporation subject to the provisions of that article. Section 19. This section was repealed by Laws of 1911, chapter 857. It read as follows: § 19. Societies taking property by will. Any benevolent, charitable, scientific or missionary corporation formed under chapter three hundred and nineteen of the laws of eighteen hundred and forty-eight, shall be capable of taking, holding or receiving any property, real or personal, by virtue of any devise or bequest contained in any last will and testament of any person whatsoever; subject to the limitations provided in section nineteen of the decedent estate law. See discugsion under the preceding section. § 20. Appointment of special policemen. Any corpora- tion duly incorporated under the laws of the state of New York for the erection of buildings, and also duly author- ized by law to procure the people to assemble in its build- ings or on its grounds for camp or grove meetings, Sunday- school parliaments, temperance, missionary, educational, MEMBERSHIP CoRPORATIONS Law. 181 scientific, musical and other meetings, shall have power through its board of trustees, or other board of managers of the affairs of such corporation, for the purpose of pro-: tecting and preserving such buildings, grounds and other property, and preventing injuries thereto, and preserving order, and preventing disturbances, and preserving the peace in such buildings and upon such grounds, by reso- lution of its board of trustees, or other board of managers, or otherwise, to appoint from time to time one or more special policemen, and the same to remove at pleasure, who when appointed shall be police officers, with the same powers within and about, or adjacent to, such grounds, as are vested in constables of the town where such grounds are located, whose duty, when appointed, it shall be to pre- serve order, and to prevent disturbances and breaches of the peace in and about the buildings and property and on and about the grounds of such corporation or approaches thereto or on grounds or in buildings pertaining thereto, and to protect and preserve the same from injury, and to arrest any and all persons making any loud or unusual noise, causing any disturbance or committing any breach of the peace, or committing any misdemeanor, or wilfully violating the established rules and regulations of said cor- poration, or committing any wilful trespass upon such grounds or property or approaches thereto or in or upon such buildings or any part thereof, and to convey such per- son or persons, so arrested, with a statement of the cause of such arrest, before a magistrate having jurisdiction of the offense, to be dealt with according to law. Source.—L. 1895, ch. 493, § 1. § 21. Trespass punished. Any wilful trespass in or upon any of the buildings or grounds provided or used for the purpose of said meetings, or upon the approaches thereto, and any wilful injury to any of the said buildings or to said grounds, or to any trees, fences, fixtures or other property thereon and pertaining thereto, and any wilful disturbance of the peace and quietness of said grounds by intentional 182 Memepersuip Corporations Law. breach of the rules and regulations thereof, shall be mis- demeanors punishable by fine and imprisonment, or either, and concurrently with the courts of record of this state, justices of the peace, police justices and courts of special sessions in the town where such grotinds are situated shall have the same jurisdiction of said offenses as they have of other cases of misdemeanors committed within their juris- diction, and shall have jurisdiction over the persons of those brought before them in the form and manner prescribed in section twenty of this article, and said policemen are hereby empowered to carry and convey the persons so arrested before such justices of the peace, police justices and courts of special sessions, and to hold them until discharged ac- cording to law. Source.—L. 1895, ch. 493, § 2. § 22. Oath of policemen. Every policeman so appointed shall within fifteen days after such appointment and before entering upon the duties of his office, take and subscribe the oath of office prescribed in the thirteenth article of the constitution of the state of New York, which said oath shall be filed in the office of the county clerk of the county where such grounds are situated. Source.—L. 1895, ch. 493, § 3. § 23. Shield. Each policeman shall, when on duty, wear a metallic shield with the word “policeman,” and the name of the corporation which appointed him inscribed thereon, and said shield shall always be worn in plain view. Source.—L. 1895, ch. 493, § 4. e § 24. Compensation. The compensation of such police- men shall be paid by the corporation by which they are respectively appointed in the form and manner agreed upon between them. Source.—L. 1895, ch. 493, § 5. MEmMBeErRsHIP CorPorATIONS Law. 183 ARTICLE 3 Corporations for Purposes Not Elsewhere Authorized Section 40. Purposes for which corporations may be formed under this article. 41. Certificates of incorporation. 42. Incorporation of associations of more than five thou- sand members. 43. Effect of incorporation. 44. Annual assembly or convention. 45. Board of directors. 46. Special powers. 47. Special police. § 40. Purposes for which corporations may be formed under this article. A membership corporation may’ be cre- ated under this article for any lawful purpose, except a purpose for which a corporation may be created under any other article of this chapter, or any other general law than this chapter. Source.—Formerly Mem. Corp. L. (L. 1895, ch. 559), § 30. See note under § 3, ante, as to the scope of the law. REVISER’S NOTE (1895). This section is intended to make one complete general statement, including every object for which membership corporations ought to be permitted under a general law, instead of a long enumeration of particular purposes, requir- ing new legislation whenever incorporation is desired for a new purpose. The definition of a membership corporation in § 2 will prevent the formation of a stock corporation, or of a mutual bene- fit insurance corporation under this article. It is the better practice to have the certificate state the article of the law under which incorporation is claimed. Opinion of Atty. Gen., March 22, 1905, Report of 1905, page 274. The provisions of Article 2, ante, are applicable to corporations formed under this article. A certificate of. a proposed extension of purposes intended to enable an alumnz association to pay annuities to its members in certain contingencies and upon specified terms will not be filed, as such transactions constitute insurance. Opinion of Atty. Gen., June 20, 1907, Report of 1907, page 284. Certain Objects Unauthorized Hereunder. Hospital Corporations cannot be created under the business cor- porations law but must be formed under § 130 of this law and have the approval of the State Board of Charities and of a Su- 184 MEMBERSHIP CoRPORATIONS Law.. preme Court Justice as required by §§ 41 and 130. Incorporation under the Business Corp. Law would frustrate the purpose of the two sections referred to. Opinion of Atty. Gen. March 4, I911. Report of Atty. Gen. 1911, Vol. II, p. 191. The Secretary of State is not required to file a certificate of incorporation drawn under this section with objects as follows: “Voluntarily assisting and helping those of our members who are in distress by medical aid and financial assistance.” Such a cor- poration being one to furnish medical aid must be formed under § 130 of this law, providing for the incorporation of hospital corporations. Matter of Medical Aid Organizations, Op. of Atty. Gen. Dec. 14, 1912. State Dept. Reports of N. Y. March 15, 1913, p. 79, Adv. Sheet No. 6. The Secretary of State is not required to file a certificate of incorporation drawn under this section in which the object clause reads as follows: “Voluntarily to make loans out of the common funds of the corporation, on such terms; and in such amounts as may be regulated by the by-laws of the said corporation and not inconsistent with the laws of the State of New York and of the United States; to collect such loans in the name of the cor- poration in accordance with the terms of the loans; to collect reg- ular dues, assessments or other contributions from its members in accordance with the regulations prescribed by its by-laws.” Such objects are business in their nature and not authorized by the Membership Corp. Law. Quere whether the objects conflict with Insurance Law, Art. VIII. Matter of authority of Sec’y of State, Op. Atty. Gen. Nov. 29, 1912. State Dept. Reports of N. Y. Feb’y 15, 1913, Adv. Sheet No. 4, p. 83. Report of Atty. Gen. 1912, Vol. II, p. 528. The Secretary of State is not required to file a certificate of incorporation drawn under this section with the following object clause: “That the particular objects for which the corporation is to be formed are for the purpose of preserving the German lan- guage in the City of New York by giving, procuring and promot- ing free tuition in the German language to children particularly of German extraction.” Such a corporation must be formed under § 59 of the Education law, post, being one for the promotion of Education. Opinion of Attorney General May 3, 1911. Report of Atty. Gen. 1911, Vol. II, p. 427. An agricultural league may be formed under this section where its objects are stated to be the establishing of a farm bureau, the promotion of agriculture, the establishment of agricultural courses and similar opjects. The provisions of § 191 of this law, restrict- ing the creation of more than one agricultural society in a county apply only to town and county societies. Matter of Clinton County Farmers’ League. Opinion of Atty. Gen. Oct. 16, 1912. State Dept. Reports of N. Y. Jan. 15, 1913, p. 99, Adv. Sheet No. 2. Report of Atty. Gen. 1912, Vol. II, p. 486. A corporation whose purpose is simply to protect the members who are merchants in preventing and exposing frauds and collusive bankruptcy proceedings by dishonest methods of debtors, is not Memsersuip Corporations Law. 185 engaging in the practice of law as prohibited by Penal Law, § 280, and its certificate is not objectionable on that ground. Matter of Creditors’ Audit & Adjustment Ass’n, 72 Misc. 461 (1911). Boxing and Sparring Matches. Any club, corporation or association conducting boxing or spar- ring matches or exhibitions is required to comply with the provi- sions of Chap. 779, Laws of 1911, entitled “An Act establishing a state athletic commission and regulating boxing and sparring in the state of New York.” For penal provisions affecting prize fighting and sparring see Penal Law, §§ 1710-1716. It should be noted, however, that § 1710 does not apply where a license has been obtained under the above mentioned Act. (L. 1911, ch. 779, § 12.) Institutions for Higher Education. Universities, colleges, academies and other institutions for higher education may not be incorporated under this article for the reason that the creation of such institutions is provided for in another general law, to wit: the Education Law. Matter of Lampson, 33 App. Div. 49, aff'd on other grounds, 161 N. Y. 511 (1900). For provisions of the Education Law respecting the incorpora- tion of universities, colleges, academies, libraries, museums, etc., see “Education Law,” post. § 41. Certificates of incorporation. Five or more per- sons may become a membership corporation for any, one of the purposes for which a corporation may be formed under this article or for any two or more of such purposes of a kindred nature, by making, acknowledging and filing a certificate, stating the particular objects for which the corporation is to be formed, each of which must be such as is authorized by this article; the name of the proposed corporation; the territory in which its operations are to be principally conducted; the town, village or city in which its principal office is to be located, if it be then practicable to fix such location; the number of its directors, not less than three nor more than thirty; and the names and places of residence of the persons to be its directors until its first annual meeting. Such certificate shall not be filed without the written approval, indorsed thereupon or annexed thereto, of a justice of the supreme court. If such cer- tificate specify among such purposes the care of orphan, pauper or destitute children, the establishment or mainten- 186 MEMBERSHIP CorPporATiIons Law. ance of a maternity hospital or lying-in asylum where women may be received, cared for or treated during preg- nancy or during or after delivery, or for boarding or keep- ing nursing children, the written approval of the state board of charities shall also be indorsed ‘thereupon or annexed thereto, before the filing thereof. On filing such certificate, in pursuance of law, the signers thereof, their associates and successors, shall be a corporation in accordance with the provisions of such certificate. Any corporation hereto- fore or hereafter organized under this article for the pur- pose of gathering, obtaining and procuring information and intelligence, telegraphic or otherwise, for the use and bene- fit of its members, and to furnish and supply the same to its members for publication in newspapers owned or repre- sented by them may admit as members thereof, other cor- porations, limited liability companies, joint-stock and other associations, partnerships and individuals engaged in the same business or in the publication of newspapers, periodi- cals or other publications, upon such terms and conditions, not inconsistent with law or with its certificate of incor- poration, as may be prescribed in its by-laws. For form of certificate of incorporation and other papers required, see Forms Nos. 51 to 56. Source.—Formerly Mem. Corp. L. (L. 1895, ch. 559), § 31, as am’d by L. 1897, ch. 205 and L. 1901, ch. 436. Revised from L. 1848, ch. 319, § 1, as am’d by L. 1883, ch. 446 and L. 188s, ch. 88; L. 1850, ch. 242; L. 1865, ch. 368, §§ 1, 2, as am’d by L. 1871, ch. 705 and L. 1877, ch. 380; L. 1871, ch. 875, § 1; L. 1875, ch. 267, § 1, as am’d by L. 1876, ch. 53; L. 1886, ch. 236, §§ 1 and 2; L. 1888, ch. 391, §§ 1 and 2; L. 1880, ch. 95, §§ 1 and 2, as am’d by L. 1894, ch. 256; L. 1891, ch. 213, § 1. See note under § 3, ante, as to scope of the law. Qualification of Incorporators, Gen. Corg, Law, § 4, ante, provides that the certificate “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.” Filing and Recording Certificates. Gen. Corp. Law, § 5, ante, provides that the original certificate shall be filed and recorded in the office of the Secretary of State and that a certified copy of such certificate with a certificate of MEMBERSHIP CorPoraTions Law. 187 the Secretary of State of such filing and record or a duplicate original of such certificate shall be filed and similarly recorded in the office of the Clerk of the County in which the office of the corporation: is to be located. If it be a non-stock corporation (as is a membership corporation) and such county be not deter- mined upon at the time of executing the certificate of incorpora- tion, the certified copy or duplicate original certificate is to be filed in such county clerk’s office as the judge approving the certificate shall direct. It will probably be found to be the better practice to have certificates of incorporation executed and approved in duplicate and to offer one of such certificates for filing with the secretary of state prior to filing the duplicate thereof with the county clerk, so that any objections that may be made by the former official may be met, thereby avoiding any embarrassment that might result from the prior filing of a defective certificate with the county clerk. Authenticating Act of Notary Public. If, instead of a certified copy, a duplicate original certificate is to be filed and recorded in a county, other than the one where it is executed, the county clerk’s certificate should be attached, authenticating the act of the officer taking the acknowledgment. The secretary of state does not require such county clerk’s cer- tificate as to an acknowledgment taken within the state before a person duly authorized to take the same, but an acknowledgment or affidavit taken by a notary public in another state must be properly authenticated. Where a notary’s certificate and signature appear more than once on the same instrument it is the proper practice to have each signature of such notary duly authenticated. It has been held, where a complaint and an affidavit supporting an order for publication were both sworn to before the same notary in a foreign jurisdiction and only one of the signatures of the notary was authenticated by the certificate of the county clerk, that the order must be vacated for lack of compliance with Section 844 of the Code of Civil Procedure, as the court is not to compare the authenticated signature with that unauthenticated, and then deter- mine the fact of identity, hence of authenticity, for this is a func- ion which the statute confines to the officer in the foreign juris- diction who is deemed to be familiar with the signature to be authenticated. Claflin v. Hill Clutch.Co, N. Y. Law Journal, Dec. 7, 1910. Bischoff, J., Spec. Term. Acknowledgment. The General Construction Law (L. 1909, ch. 27), § 11 pro- vides that when the execution of any instrument is required by law to be acknowledged, so as to entitle it to be filed or re- corded in a public office, the acknowledgment may be taken before any officer then and there authorized to take the acknowledg- ment of a deed of real property to entitle it to be recorded 188 MEMBERSHIP CorRPORATIONS Law. in a county clerk’s office, and shall be made and certified in the same manner as such acknowledgment of such deed. An incorporator has no power in his capacity as notary public, to take the acknowledgment of another incorporator to the cer- tificate of incorporation, and an acknowledgment so taken is a nullity. Peo. ex rel. Erie R. R. Co. v. Bd. of R. R. Com’rs, 105 App. Div. 273 (1905). Corporate Name. Gen. Corp. Law, § 6, ante, provides that the name must indicate that the organization is a corporation, except in the case of a religious, charitable or benevolent corporation, and the Secretary of State will refuse to file certificates which do not comply with this requirement. The customary method of compliance in case of non-stock corporations is by the addition of “Inc.” or “Incor- porated” after the name chosen. The name must be in the English language. Gen. Corp. Law, § s. Similar Names. A corporation formed under this chapter is entitled to injunc- tive relief against another corporation using a name so similar as to deceive. The right to such relief is not limited to business corporations. Benevolent & Protective O. Elks v. Improved Be- nevolent Order of Elks, etc., 205 N. Y. 459 (1912); Salvation Army in U. S. v. Am. Salvation Army, 135 App. Div. 268 (1909); Society of 1812 v. Society of 1812, 46 App. Div. 568 (1900). See Gen. Corp. Law, § 6, ante, prohibiting the filing of the cer- tificate of incorporation of a proposed corporation having a name so nearly resembling an existing corporation as to be calculated to deceive; and the cases there cited. Penal Law Provisions. See § 948 of the Penal Law as to unlawful use of name of a benevolent, humane or charitable organization and the right to injunctive relief. Under the provisions of the Penal Law, § 280, as am’d by Laws of 1911, Chapter 317, corporations are prohibited from practicing law; but said section is not intended to apply to corporations organized under the Membership Corporations Law, § 41, “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 incorporation may be approved by the Appellate Division of the Supreme Court of the department in which the principal office of said corporation may be located.” In re The Associated Lawyers’ Co., 134 App. Div. 350 (1909); In re Co-operative Law Co., 198 N. Y. 479 (1910), aff’g 136 App. Div. 9o1. Approval of Certificate-—Proof by Affidavit. When a certificate is presented for approval, a mere recital of the facts required to be shown by Gen. Corp. Law, Section 4, is MEMBERSHIP CorporATIONS Law. 189 insufficient. There should be proof by affidavit, (1) of all sub- scribers as to each being of full age, (2) by each of them who is a citizen; and (3) by the one who is a resident. There should also be proof that no previous application has been made for the approval of the certificate. Matter of Wendover Athletic Ass’n, 70 Misc. 273 (New York County, 1911). The foregoing decision is now generally followed in New York County and certificates presented for approval must be accom- panied by affidavits showing the facts required by Gen. Corp. Law, § 4, and that no previous application has been made, or the dispo- sition made of such application. For forms of affidavits, see Forms Nos. 52 to 56, post. Revocation of Approval. In case the approval of a certificate of incorporation has been inadvertently granted by the Supreme Court, such approval may be vacated or revoked. In re Co-operative Law Co., 198 N. Y. 479, at 485 (1910); see also Clark v. Scovill, 198 N. Y. 270, 286 (1910). All courts possess inherent power to correct mistakes and clerical errors, irrespective of statutes. In re Henderson, 157 N. Y. 423, at p. 426 (1898); In re Automatic Chain Co., 134 App. Div. 863 (1909), and cases therein cited. Discretion of Secretary of State Despite Approval. The approval of a Supreme Court justice is but one of the con- ditions precedent to the right to file the certificate. It is not conclusive upon the public or the Secretary of State. Peo. ex rel. Blossom v. Nelson, 46 N. Y. 477 (1871). The Secretary of State will not be compelled by mandamus to file a certificate of a corporation as a membership corporation where it is evidently formed for business purposes, although such ‘certificate has been approved by a justice of the Supreme Court. Peo. ex rel. Blossom v. Nelson, 46 N. Y. 477 (1871). Sunday Meetings. A certificate providing for annual meetings on Sunday of each year will not be approved by a Supreme Court justice, because the holding of such meetings, even if not illegal, is contrary to the policy of the State as evidenced by other enactments. Matter of Agudath Hakehiloth, 18 Misc. 717 (1896); meetings held on Sun- day are not illegal. Peo. ex rel. Corrigan v. Y. M. etc. Benev. Soc., 65 Barb. 357 (1873). Meetings Without the State. This statute contains no general provision impliedly authorizing the holding of meetings of directors without the state such as is found in Business Corporation Law, § 2, as amended by Laws of 1904, Chap. 446, which provides “if meetings of the board of di- rectors are to be held only within the state the certificate or by-laws must so provide.” A membership corporation has no power to hold meetings of 190 MEMBERSHIP CorRPoRATIONS Law. directors or members outside of the State. Opinion of Atty. Gen. May 29, 1911. Rep. of Atty. Gen. 1911, Vol. II, p. 530. Laws of 1909, Chap. 169, adding § 48, post, permits certain . corporations, a part of whose membership consists of delegates. chosen by non-resident bodies, to hold annual meetings without. the State. The general rule is that neither stockholders nor directors can do a corporate act out of the jurisdiction creating the corporation. Ormsby v. Vt. Copper Mining Co., 56 N. Y. 623 (1874). Correction of Informalities. In case of any informality in the certificate of incorporation, the same may be corrected by an amended certificate. Gen. Corp. Law, § 7, and cases there cited. Fees of Secretary of State. The Executive Law (L. 1909, ch. 23), § 26, provides as follows: The secretary of state shall collect the following fees: * * ¢ * * * & & & F 6. For recording a certificate, notice or other paper required to. be recorded, except as otherwise provided by: this section, fifteen. cents per folio. * * * *£ £ £ € € * 12,* * * ; for filing any original certificate of incorpora- tion drawn under article three of the Membership Corporations Law, ten dollars. No filing fee is payable on certificates of incorporation drawn under the other articles of the Membership Corporations Law. Fees of County Clerk. The Code of Civil Procedure, § 3304, provides that a county clerk is entitled to the following fees: For recording any instrument which must or may legally be recorded by him, ten cents for each folio. * * * For filing any paper required by law to be filed in ta office, other than as expressly provided for in this section, six cents. State Board of Charities. The general powers of the State Board of Charities relative to inspection and visitation of charitable, eleemosynary, correctional. and other institutions are to be found in the State Charities Law (L. 1909, ch. 57), §§ 9 and 10, post. Procuring Approval of State Board of Charities . In order to obtain the approval of the State Board of Charities. to certificates of incorporation requiring such approval, the fol- lowing rules and by-laws of that board must be observed, to-wit:. Rules of Board of Charities. The rules of the State Board of Charities to be observed in submitting certificates of incorporation for its approval are as. follows: MEMBERSHIP CorporaATions Law. 19k 1. Each certificate shall state the law under which it is pro- posed to incorporate. ; 2. Such certificate shall be executed in duplicate and presented in due form, duly executed and acknowledged by the proper per- sons before competent officers, as the special law may direct, and without erasures or interlineations; and should contain in full every statement directed by the statute. 3. A copy of such certificate (in addition to the two original certificates) shall also be furnished for filing with the State Board of Charities. 4. In applications for the incorporation of hospitals and dis- pensaries the proposed location must be definitely stated. 5. If acknowledged or executed before a notary public or com- missioner of deeds, the certificate of the county clerk of the county in which the acknowledgments were taken that the said no- tary public or commissioner of deeds is duly authorized to receive acknowledgments must be attached to the certificate of incor- poration. [Since the adoption of the foregoing rules, paragraph 5 must be deemed to be superseded by the opinion of the Attorney General addressed to the secrtary of the State Board of Charities and dated June 5, 1912, in which he says that so far as the office of the Secretary of State is concerned the county clerk’s certificate may be dispensed with.] 6. The name and address of the attorney representing the peti- tioners should be on the cover of the certificate. By-Laws of Board of Charities. The duties of the Commissioners and the Secretary of the Board in regard to applications for the approval of certificates of incor- poration are prescribed by the By-Laws as follows: 1. Whenever application is made to the State Board of Charities for the approval of a certificate of incorporation, the application shall first be sent to the Secretary of the Board, at the Capitol, for record, and submission to the Attorney-General, or to the counsel of the Board for opinion as to legal form, and shall then forthwith be referred by the Secretary to the Commissioner or Commissioners resident in the district from which the application is made. In case of an application from a district in which there is more than one resident Commissioner, such certificate shall be sent to such Commissioner as may be appointed by the Commissioners resident in such district. 2. It shall be the duty of the Commissioner acting alone or with such Commissioner or Commissioners as he may invite, to inquire by personal examination or by a public hearing upon notice into the merits of the application, and specially to consider the following points: (a) The desirability of the existence of such an institution as is proposed to be incorporated, at the time and place and under the circumstances set forth in the application and certificate. 192 MempBersHir Corporations Law. (b) The character and standing, in the community, of the pro- posed incorporators. (c) The financial resources of the proposed institution, and its sources of future revenue. 3. Such Commissioners shall report to the Board in writing, before final action upon the application, the result of the examina- tion and the recommendation based thereon, and this report, to- gether with all the papers in the matter of the application shall be filed in the office of the Board. Adoption from Charitable Institutions. For provisions regulating the adoption of children from chari- table institutions see the Domestic Relations Law (L. 1909, ch. 19), § 115 et seq. Liquor Tax Licenses for Clubs. Under the excise law of 1892 (Laws of 1892, Chap. 4o1) and that of 1896 (Laws of 1896, Chap. 112), no license was required by a bona fide social club regularly organized under the statute for a legitimate purpose, to which the furnishing of liquors to its mem- bers at a price to cover cost and actual disbursements was merely incidental, for the reason that such a transaction was not a sale within the meaning of the statutes. People v. Adelphi Club, 149 N. Y. 5 (1896); People ex rel. Rochester Whist Club v. Hamilton, 17 Misc. 11 (1806). In 1897 (Laws of 1897, Chap. 312) the definition of trafficking in liquors contained in Section 2 of the Liquor Tax Law was amended to include the following: “The term ‘trafficking in liquors’ as used in this chapter is . . . 5. The distribution of liquor by, between or on behalf of members of a corporation, association or copartnership to a member thereof, or to others, in quantities less than five wine gallons.” (Now Laws of 1909, Chap. 39, Sec. 2.) This amendment supersedes the ruling in the two cases cited above, and clubs and societies are now subject to the provisions of the Liquor Tax Laws. (Laws of 1909, Chap. 39.) That law contains two further express provisions with respect to membership corporations. Section 21 provides: “Corporations, associations, copartnerships or persons who or which shall not traffic in liquors. No corporation, associa- tion, qppartnership or person mentioned in this section shall traffic in liquors except as herein provided é 6. No corporation organized under chapter five hundred and fifty-nine of the laws of eighteen hundred and ninety-five, and the acts amendatory thereof, or under any law which prior to May sixth, eighteen hundred and ninety-five, pro- vided for the organization of societies or clubs for social, recreative or similar purposes, which traffics in liquors with any person other than the members thereof.” MemBErsHIP Corporations Law. 193 Chap. 550, Laws of 1895, was the Membership Corporation Law of that year. Section 30 of the Liquor Tax Law contains limitations upon the right to sell liquor by persons who have paid the tax, but con- tains the following proviso: “And it is further provided that a corporation or association, organized in good faith under chapter five hundred and fifty- nine of the laws of eighteen hundred and ninety-five, or under any law which, prior to May sixth, eighteen hundred and ninety-five, provided for the organization of societies or clubs for social, recreative or similar purposes, and which corpora- tion or association was actually lawfully organized, and, if a corporation, its certificate of incorporation duly filed, prior to March twenty-third, eighteen hundred and ninety-six, and which at such date trafficked in or distributed liquors among the members thereof, is excepted from the provisions of clauses A, B, C and D of this section.” Clauses A, B, C and D of this section are those prohibiting the sale on Sunday or before five o’clock in the morning on Monday, or on any other day between one and five o’clock in the morning, or on any day of a general or special election. It appears therefore that a membership corporation which dis- tributes liquors to members, (1) Must obtain a license; (2) Is prohibited from trafficking in liquors with others than members; (3) Is excepted from the limitations contained in clauses A, B, C and D of Section 3 of the Liquor Tax Law, if incorporated prior ‘to March 23, 1896, and which at such date trafficked in or distrib- uted liquors among the members thereof. Must Be Bona Fide Club. The corporation must be a bona fide club and not organized or conducted for the purpose of avoiding provisions of Sections 30 of the Liquor Tax Law. Matter of Lyman, 28 App. Div. 127 (1898); Matter of Lyman again, 28 App. Div. 209 (1898). It should be borne in mind that in any case the corporation is subject to all the provisions and limitations of the statute relative to the issuance of certificates or use of the same. Also that under the “ratio provision” of the Liquor Tax Law, new certificates cannot be obtained except by abandonment and transfer from premises already certificated as provided by the statute. U. S. Internal Revenue Tax. Section 3244 of the U. S. Revised Statutes (U. S. Compiled Stat- utes of 1901, p. 2096) provides as follows: “Special taxes are imposed as follows: * *¢ & kK * * KF OK K “Fourth: Retail dealers in liquors shall pay twenty-five dollars. Every person who sells, or offers for sale foreign or 104 MemBersHIP Corporations Law. domestic distilled spirits or wines, in less quantities than five wine gallons at the same time, shall be regarded as a retail. dealer in liquors.” This sub-section is modified by a more comprehensive definition of retail liquor dealers, so as to include malt liquors in the liquors such dealers sell or offer for sale by Act February 8, 1875, Chap. 36, Section 18, as amended by Act March 1, 1879, Chap. 125, Sec- tion 1 (U. S. Compiled Statutes 1901, p. 2101). Section 3239 U. S. Rev. Stat. (U. S. Comp. Stat. 1901, p. 2093) provides that all stamps denoting payment of the tax shall be con- spicuously kept in the establishment or place of business of every person liable to the tax. A club which purchases a stock of liquors and furnishes the same to members for consumption in the club rooms on their orders and receives payment therefor, is a retail dealer in liquors under the foregoing definition, and must pay the tax imposed by the above section. U.S. v. Alexis Club, 98 Federal 725 (Dist. Court, Eastern Dist. Pa., 1899) and cases cited therein. § 42. Incorporation of associations of more than five thousand members. Any association, society or league, having no capital stock and not organized for pecuniary profit, composed of more than five thousand members and governed by a representative body may incorporate under the provisions of this article for the purposes for which it. was organized, if such purpose is one for which a corpora- tion may be formed under this article. The certificate of incorporation shall be made by a committee of not less than five members who must be authorized to procure the incorporation and make the particular certificate, by the same affirmative vote, taken in the same manner, as the constitution or fundamental law of the association, society or league requires for an amendment or change in the con- stitution or fundamental law thereof. Source.—Formerly Mem. Corp. L. (L. 1895, ch. 559), § 32, as added by L. 1900, ch. 681. e § 43. Effect of incorporation. The members of such as- sociation, society or league shall become the members of the corporation created under the provisions of the preced- ing section; all the property owned by, held for or in any wise belonging to such association, society or league shall ‘belong to the corporation; the constitution and by-laws, to- MEMBERSHIP CorPoRATIONS Law. 195 gether with the official terms and duties of all officers and committees, are continued, except so far as contrary to the provisions of this chapter; and the business or pur- poses of the corporation may be carried on beyond the limits of the state. Source—Formerly Mem. Corp. L. (L. 1895, ch. 559), § 33, as added by L. 1900, ch. 681. § 44. Annual assembly or convention. In place of hold- ing an annual meeting of all the members, such corpora- tion may provide in its constitution and by-laws for an annual election by its members, of representatives or dele- gates either at large or from special districts; and in such case, no annual meeting of the members shall be held. Such delegates or representatives, when assembled under the name and in the manner directed by the constitution and by-laws of the corporation, shall have and may exercise all the powers, rights and privileges of an annual meeting of the corporation. The time and place of holding such annual assembly or convention may be prescribed in the constitution or by-laws of the corporation and changed from time to time. The annual assembly or convention may be held without the state. Source.—Formerly Mem. Corp. L. (L. 1895, ch. 559), § 34, as added by L. 1900, ch. 681. § 45. Board of directors. Whenever otherwise provided by law and as exceptions thereto, the constitution and by- laws of each such corporation may prescribe the quorum of the board of directors; the method of filling vacancies in the board of directors; the continuance of the directors in office until their successors have been severally elected and have accepted their offices; the officers of the corpora- tion who are to execute any agreement or contract author- ized by the board of directors; and the character, contents ‘and method of execution of the annual report of the board of directors. Source.—Formerly Mem. Corp. L. (L. 1895, ch. 559), § 35, as added by L. 1900, ch. 681. 196 MempersHip CorporaTions Law. Quorum. The provisions of this section as to the quorum of the board of directors apply only to corporations formed under Section 42, supra (Sec. 42 to 46 inc. having been added by L. 1900, Chap. 681), and therefore a legal quorum of the board of directors of all other membership corporations must be at least one-third of the whole number as provided in General Corporation Law, Section 34. A member expelled by a board of less than that number may compel reinstatement by mandamus. Matter of Trainor v. White Rats. Actors Union of Am., Spec. Term’ N. Y. Co., N. Y. Law Journal Jan. 3, 1913, on reargument overruling previous decision Law Journal Oct. 30, 1912. Aff’d no op. 140 N. Y. Supp. 1148. § 46. Special powers. Any such corporation formed for defending the rights of cyclists, facilitating touring and securing the construction and maintenance of good roads. and cycle paths by public authority, may prefer a complaint before any court, tribunal or magistrate having jurisdiction for the violation of any law, ordinance or regulation made by public authority and relating to the purposes of the corporation, and may aid in presenting the law and facts to such court, tribunal or magistrate. Source—Formerly Mem. Corp. L. (L. 1895, ch. 559), § 36, as added by L. 1900, ch. 681. § 47. Special police. Corporations formed for the pur- pose of providing parks and playgrounds for children in cities, towns or villages may at their own expense appoint and employ police officers, who shall for the purpose of enforcing order and compliance with their rules, have all the powers and authority of the public police officers or patrolmen of the city, town or village wherein such parks or playgrounds may be situated within the limits of their parks or playgrounds and within one thousand feet of the limits thereof, subject however to all laws, ordinances or police regulations of the cities, towns or villages in which such parks and playgrounds may be situated and subject to the authority of the commissioners, superintendents, cap- tains, sergeants or other superior police officers or authority of the particular district or locality in which the same may be. Source.—L. 1888, ch. 293, § 2, last sentence. MEMBERSHIP CorporATIons Law. 197 § 48. Annual meetings of corporations organized for benevolent, charitable, or missionary purposes, when may be held without the state. A membership corporation, or- ‘ganized for benevolent, charitable, or missionary purposes, ‘a part of whose membership consists of delegates chosen ‘by churches, societies or other organizations, which are ‘located in other states and which contribute to the funds -of such corporation, may hold its annual meeting without the state. As added by L. 1909, ch. 169. ARTICLE 4 Cemetery Corporations ‘Section 60. Definitions. 61. Certificates of incorporation. 62. Cemeteries in Kings, Queens, Rockland, Westchester, Nassau and Erie counties. 63. Corporate meetings 64. Directors. 65. Acquisition of property. 66. Surveys and maps of cemetery. 67. Rules and regulations. 68. Record of burials. 69. Title and rights of lot owners. 70. Application of proceeds of sales of lots. 71. Burials and removals, 72. Taxation of lot owners by corporations. 73. Expenses of improving vacated lot. 74. Certificates of indebtedness. 75. Certificates of stock heretofore issued. 76. Private cemetery corporations. 77. Removal of remains to other cemeteries. 78. Family cemetery corporations. 79. Lot owners in unincorporated cemeteries may deter- : mine upon incorporating under this article. 80. Meeting to determine such question. 81. Incorporation pursuant to meeting; conveyance of property to corporation. 82. Sale of land of rural cemetery corporations. 83. Acquisition of land by rural cemetery corporations. 84. Streets or highways not to be laid out through certain cemetery lands. § 60. Definitions. In this article the term “burial” includes the act of placing a dead human body in a 198 MEMBERSHIP CorporATIONS Law. mausoleum, vault or other proper receptacle for the dead, as well as in the earth; the term “lot owner” or “owner of a lot” means any person having a lawful title to the use of a lot, plot or part of either in a cemetery; and the term . 4 . “cemetery corporation” means any corporation heretofore created for cemetery purposes under a law repealed by this chapter, or hereafter created under this article; but the general term cemetery corporation does not include a fam- ily cemetery corporation or a private cemetery corporation. This article does not apply to cemeteries belonging to re- ligious or municipal corporations. Source.—Formerly Mem. Corp. L. (L. 1895, ch. 559), § 40. For provisions as to village cemeteries, see Village Law (L. 1909, ch. 64) Article XII. For an analysis of the provisions of this section, see Matter of Bauer 68 App. Div. 212, 216 (1902). A corporation organized under this article in no sense occupies or can occupy the position towards the commercial community which a corporation organized for commercial purposes may. It is not organized for pecuniary profit, but is one for the more effective accomplishment of some object of mutual interest. Am, Exchange Nat’l Bank v. Woodlawn Cemetery, 194 N. Y. 116 (1909) re’sg. 120 App. Div. 119. § 61. Certificates of incorporation. Seven or more per- sons may become a cemetery corporation, by making, ac- knowledging and filing in the offices of the secretary of state and of the clerk of the county where the cemetery of such corporation, or a part thereof, is to be situated, a certificate specifying each county, town, city and village in which such cemetery or any part thereof is to be situ- ated; the name of the proposed corporation; the times of holding its annual meetings; the number of its directors, either six, nine, twelve or fifteen; and the names of the persons to be directors until others are elected in their places, divided into three equal classes, each class to hold office until the first, second and third annual meetings thereafter, respectively. Such certificate may also specify a percentage of the sur- plus proceeds of sales of lots, after payment of the pur- chase-price of the real property of the corporation, to be invested as a permanent fund, the income of which shall MEMBERSHIP Corporations Law. 199 be used for the improvement, preservation and embellish- ment of the cemetery grounds, and for no other purpose. Such certificate shall not be filed without the approval, in- dorsed thereupon or annexed thereto, of a justice of the supreme court. On filing such certificate, in pursuance of law, the signers thereof, their associates and successors shall be a corpo- ration, in accordance with the provisions of such certificate. Source.—Formerly Mem. Corp. L. (L. 1895, ch. 550), § 41. Re- vised from L. 1847, ch. 133, § 1, as am’d by L. 1893, ch. 34, §§ 2, 3. For form of certificate, see Form 57, post. See notes to § 41 as to the corporate name, and the acknowledg- ament, approval, filing and recording of the certificate. § 62. Cemeteries in Kings, Queens, Rockland, Westches- ter, Nassau, Suffolk-and Erie counties. A cemetery corpo- ration shall not take by deed, devise or otherwise any land in either of the counties of Kings, Queens, Rockland, West- chester, Nassau, Suffolk or Erie for cemetery purposes, or set apart any ground for cemetery purposes in either such county, unless the consent of the board. of supervisors thereof, or the board of aldermen of the city of New York as the case may be, be first obtained, which may grant such consent upon such conditions, regulations and restrictions as in its judgment, the public health or the public good may require. Notice of application to any such board for such consent shall be published once a week for six weeks, in the newspapers designated to publish the session laws and in such other newspapers published in the county as the board of supervisors, or the board of aldermen of the city of New York as the case may be, may direct, stating the time when the application will be made, a brief descrip- tion of the lands proposed to be acquired, their location and the quantity thereof. All persons interested therein may be heard on the presentation of such application; and if such consent is granted the corporation may take and hold the lands designated in such consent, which shall not au- thorize any one corporation to take or hold more than two hundred and fifty acres. Nothing contained in this section 200 MEMBERSHIP CoRPORATIONS Law. shall prevent any ecclesiastical incorporation in existence on April fifteenth, eighteen hundred and fifty-four, in either of said counties, from using any burial ground then be- longing to it within such county as it has been heretofore accustomed, The board of supervisors of each such county, or counties, or the board of aldermen of the city of New ‘York as the case may be, may, from time to time, make such regulations as to burials in any cemetery in the county as, in its judgment, the public health may require. Thus am’d by L. 1909, ch. 274 and L. 1911, ch. 706. Source—Formerly Mem. Corp. L. (L. 1895, ch. 559), § 42, as am’d by L. 1896, ch. 193. Revised from L. 1852, ch. 280, §§ 3, 4; L, 1854, ch. 238; L. 1877, ch. 156; L. 1889, ch. 389. See Baylis v. Rosemount Cem. Ass’n, 134 App. Div. 251 (1909). The amendment of 1911 added: (1) Suffolk County; (2) the alternative provision for obtaining consent of the board of alder- men; (3) the provision for publication in newspapers designated to publish session laws. Before the amendment the section pro- vided that publication was to be in two newspapers having the largest circulation in the county. See Sec. 83, post, providing that no further land shall be ac- quired for a cemetery corporation in counties having population of between 175,000 and 200,000 where 500 acres have already been acquired. This section will be strictly construed in favor of the public and against the corporation. Palmer v. Hickory Grove Cemetery, 84 App. Div. 600 (1903). Forty-two days must elapse between the first publication and the time of making the application and when but thirty-eight days have elapsed the board of supervisors acquires no jurisdiction. Palmer v. Hickory Grove Cemetery, 84 App. Div. 600 (1903). Where it appears that the use of the land for cemetery pur- poses would depreciate the value of the surrounding property and the statute has not been complied with, the owner may maintain an action in equity to restrain the acquisition and use of the land for such purpose. Palmer v. Hickory Grove Cemetery, 84 App. Div. 600 (1903) and see S. C. 106 App. Div. 613 (1905). Consolidators’ Note. As a part of Queens county was added to New York city and the remairfler was afterward erected into Nassau county, the word “Nassau” has been inserted in this section to preserve the rights of that portion of the original county. (See § 85, post, added by L. 1913, ch. 139.) Sec. 1539-a of the Greater‘-New York Charter (L. 1901, Chap. 466, added by L. 1904, Chap. 618), provides as follows: Acquisition of land for cemeteries in Queens County. A person, association or corporation shall not take by deed, MEMBERSHIP CorPORATIONS Law. 201 devise or otherwise any land in the County of Queens for cemetery purposes, or set apart any ground for cemetery pur- poses in such county, unless the consent of the Board of Aldermen of the City of New York be first obtained, which board may grant such consent upon such conditions, regula- tions and restrictions as, in its judgment, the public health or the public good may require. Notice of application to any such board for such consent shall be published once a week for six successive weeks in two newspapers of the county hav- ing the largest circulation therein, stating the time when the application will be made, a brief description of the lands pro- posed to be acquired, their location and the quantity thereof. If such consent is granted the applicant may take and hold the lands designated in such consent, which shall not authorize any one person, association or corporation to take or hold more than fifty acres, but a subsequent application may be made in like manner for the acquisition of an additional quan- tity of land not exceeding fifty acres. Section 451 of the Real Property Law (L. 1909, Chap. 52) added ‘by L. of 1909, Chap. 274, provides as follows: Acquisition of lands by individuals for cemetery purposes in certain counties. It shall not be Jawful for any person to take by deed, devise or otherwise or set apart or use any land or ground in any of the counties of Westchester, Kings, Queens, Rockland, Suffolk or Nassau for cemetery purposes without the consent of the board of supervisors for such county, or of the board of aldermen of the City of New York as the case may be, first had and obtained in like manner as provided for in the membership corporations law; and said board of supervisors or board of aldermen in granting such consent may annex thereto such conditions, regulations and restrictions as such board may deem the public health or the public good require. See § 85, post, added by L. 1913, ch. 139, prohibiting incorpora- tion of cemetery corporations, hereafter for the purpose of con- ducting operations in Nassau County. Where an application duly made pursuant to above section of the charter sought the consent of the board of aldermen to the acquisition of 112 acres and the consent is obtained, the board has the power to thereafter reconsider its resolution and limit its con- sent to the acquisition of about 50 acres. The effect is the same as if such limited consent had been given on the original hearing and no notice of application limited to describing the 50 acres is necessary. Rottkamp v. Springfield Cemetery Soc., 134 App. Div. 270 (1909). Business Corporations. The Board of Supervisors have no authority to issue a permit to a business corporation attempting, as one of its corporate ob- 202 MEMBERSHIP CoRPORATIONS LAW. jects, to exercise the rights of a cemetery corporation. Grace v. The Repose Mausoleums, Inc. Special Term, Kings Co. N. Y. Law Journal Nov. 12, 1912. § 63. Corporate meetings. Public notice of each annual meeting of a cemetery corporation shall be given in a man- ner to be prescribed by its by-laws. Each person of full age owning the use of a lot or plat, or part of either, con- taining at least ninety-six square feet of land in the ceme- tery of the corporation, or if there be two or more owners of such lot, then one of them designated by a majority of such joint owners to represent such lot or plat, or part of either, may cast one vote for each such lot or plat, or part of either, so owned, at the meetings of the corporation. Each owner of a certificate of stock heretofore lawfully issued, and each owner of a certificate of indebtedness of a cemetery corporation, may vote at the meetings of the corporation. Each owner of stock heretofore lawfully is- sued shall be entitled to one vote for each share of stock owned by him at the meetings of the corporation. Each owner of a certificate of indebtedness of a cemetery cor- poration shall be entitled to one vote at such meetings for each one hundred dollars of such indebtedness. Source.—Formerly Mem. Corp. L. (L. 1895, ch. 559), § 43. Re- vised from L. 1847, ch. 133, § 5, as am’d by L. 1890, ch. 229; L. 1860, ch. 163, § 3; L. 1870, ch. 107, § 2. It should be noted that the manner of giving notice of the annual meetings is to be prescribed in the by-laws. For general provisions relative to annual meetings, see Gen. Corp. L., § 23. § 64. Directors. The directors of a cemetery corpora- tion shall be elected at its annual meetings, by ballot, by the persons entitled to vote thereat. If at any such meet- ing one-fifth of the owners of lots or plats shall not, in person or by proxy, vote thereat, the directors shall be chosen by the existing directors, or a majority of them, unless such directors shall, at such meeting, be chosen by a majority of the votes of the owners of certificates of stock or indebtedness. The term of office of a director shall be three years. MemBersHIP CorPorATIONS Law. 203 ‘A vacancy in the office of a director shall be filled by appointment, by the remaining directors, until the next annual meeting, when it shall be filled by election for the unexpired term. After the first annual meeting no one but a lot owner shall be eligible to the office of director. The directors may change their number to either six, nine, twelve or fifteen, by signing, acknowledging and fil- ing a supplemental certificate stating the number of direc- tors the corporation shall thereafter have; and thereafter there shall be elected at each annual meeting, one-third of the number of directors fixed by such certificate; but the directors then in office shall continue in office until the ex- piration of their term. In case any annual meeting of a cemetery corporation shall not be held on the day desig- nated by the certificate of incorporation, the directors shall forthwith call a meeting of the members of the corpora- tion for the purpose of electing directors, of which meet- ing notice shall be given in the same manner as of the an- nual meeting for the election of directors. 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 preceding 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 publishing of notice of the annual meeting, and by posting at least six printed or written, or partly printed and partly written, notices in six con- Spicuous places in the town or city in which such corpora- tion has its principal place of business, at least two weeks before such meeting. The directors so elected at such spe- cial meeting to fill a vacancy caused by the expiration of a term of office shall be chosen for the full term of three ‘years, except where the aggregate number of the directors ‘so chosen shall exceed one-third of the whole number of directors, and in that event such directors shall be chosen 204 MemsBersHip Corporations Law. in such manner that the term of office of one-third of the whole number of directors of such corporation shall expire at the time of holding each annual meeting thereafter. That part of this section having reference to the calling of a special meeting by any member of the corporation for the purpose of electing: directors,..shall be. construed to apply to the calling of all such ‘special meetings for. the purpose aforesaid hereafter arising on account.of.a failure to hold any annual meeting of such corporation on the day designated by the certificate of incorporation. No lot owner shall be entitled to vote at any such meeting unless prior thereto, all assessments against the lot of such owner shall have been paid. Thus am’d by L. 1912, ch. 301. The last sentence is new, added by laws of 1912. Source.—Formerly Mem. Corp. L. (L. 1895, ch. 559), § 44, as am’d by L. 1900, ch. 745 and L. 1go1, ch. 415. Revised from L. 1847, ch. 133, as am’d by L. 1890, ch. 229. For form of certificate changing number of directors, see Form No. 58, post. As to who is entitled to vote, see § 63, supra. Provisions authorizing proxy voting are contained in Gen. Corp. Law, § 26. The general provisions for filing and recording certificates are contained in Gen. Corp. Law, § 5. § 65. Acquisition of property. If the certificate of in- corporation or by-laws of a cemetery corporation do not exclude any person from the privilege, on equal terms with other persons, of purchasing a lot or of burial in its ceme- tery, such corporation may, from time to time, acquire by condemnation, exclusively for the purposes of a cemetery, not more than two hundred acres of land in the aggregate, forming one continuous tract, wholly or partly within the county ingwhich its certificate of incorporation is recorded, except as in this article otherwise provided, as to the ac- quisition of land in the counties of Erie, Nassau, Suffolk, Kings, Queens, Rockland and Westchester. A cemetery corporation may acquire by condemnation, exclusively for the purposes of a cemetery, any real estate or any interest therein necessary to supply water for the uses of such MEMBERSHIP Corporations Law. 205 cemetery, and the right to lay, relay, repair and maintain, conduits and water pipes with connections and fixtures, in, through or over the lands of others; the right to intercept and divert the flow of waters from the lands of riparian owners, and from persons owning or interested in any waters. But no such cemetery corporation shall have power to take or use water from any of the canals of this state, or any canal reservoirs as feeders, or any streams which have been taken by the state for the purpose of supplying the canals with water. A cemetery corporation may acquire, otherwise than by condemnation, real property as aforesaid’ and additional real property, not exceeding in value two. hundred thousand dollars, for the purposes of the conven- ient transaction of its general business, no portion of which shall be used for the purposes of a cemetery. A cemetery corporation may acquire, otherwise than by condemnation, additional real or personal property, absolutely or in trust, in perpetuity or otherwise; and use the same or the income therefrom in pursuance of the terms on which the same is acquired, for the following purposes, only: 1. The improvement or embellishment, but not the en- largement, of its cemetery. 2. The construction or preservation of a building, struc- ture, fence or walk therein; 3. The renewal, erection or preservation of a tomb, monu- ment, stone, fence, railing or other erection or structure on or around any lot therein; or, 4. The planting or cultivation of trees, shrubs, flowers or plants in or about a lot therein. A cemetery corporation may accept a conveyance of real property held by a religious corporation for burial purposes, or by trustees for such purposes, if all such trustees, living and residing in this state, unite in the conveyance, subject to all burdens, trusts and conditions to which the title of such grantors was subject. Lots previously sold in any such lands, and grants for burial purposes therein previously made, shall not be affected by any such conveyance; nor shall any grave, monument or other erection thereupon, or 206 MemBersHir CorporATions Law. any remains therein, be disturbed or removed without the consent of the lot owner, or if there be no such owner, without the consent of the heirs of the persons whose re- mains are buried in such grave. No cemetery shall here- after be located in any city or incorporated village, without the consent of the common council of such city, or the board of trustees of such village, as the case may be. As amended by L. 1909, ch. 274. The amendment of 1909 added Suffolk County to those excepted. Source——Formerly Mem. Corp. L. (L. 1895, ch. 550), § 45, as am’d by L. 1806, ch. 325. Revised from L. 1847, ch. 133, § 4, as am’d by L. 1891, ch. 382; L. 1870, ch. 527; L. 1881, ch. 139; L. 1892, ch. 498. Consolidators’ Note. Word “Erie” inserted to make section conform to change in § 62 by L. 1896, ch. 193, § 1. Word “Nassau” inserted for reasons given in note to § 62. Condemnation, L. 1873, Chap. 452, providing for condemnation was held uncon- stitutional because the use of lands for cemetery purposes was a private use, the public having no right to buy lots. Matter of Deansville Cem. Ass’n, 66 N. Y. 569 (1876). To overcome the ruling in the foregoing case the limiting clause at the beginning of the section was added, and the law as amended was held constitutional inasmuch as the public is now entitled to share in the benefits without preference, and the use is therefore a public use. Stannards Corners Ass’n v. Brandes, 14 Misc. 270 (1895); Matter of Lyons Cem. Ass’n, 93 App. Div. 19 (1904). In Matter of Lyons Cem. Ass’n, 105 App. Div. 628 (1905) the dis- sent from the affirmance of the order confirming the report of the condemnation commissioners was based upon the ground that the present statute has not cured the objections held fatal in Mat- ter of Deansville Cem. Ass’n, supra. The order of the Appellate Division, however, was affirmed in the Court of Appeals without opinion in 182 N. Y. 563 (1908) and that court must therefore have necessarily held the present statute constitutional. See generally as to the right to condemn land for cemetery purposes. Westfield Cem. Ass’n v. Danielson, 62 Conn. 3109; Farneman v.*Mt. Pleasant Cem. Ass’n, 135 Ind. 344; Balch v. Essex Co., 103 Mass. 106. The petition should show affirmatively that the certificate of incorporation or the by-laws of the corporation do not exclude any person. Stannards Corner Ass’n v. Brandes, 14 Misc. 270 (1895). Trusts for Care of Cemetery Lots. The provision contained in the foregoing section authorizes the cemetery corporation to acquire property in trust for improve- MEMBERSHIP CorporATIONS Law. 207 ment, preservation, etc., of lots. The right to create such trusts is found in statutes quoted below enacted to overcome the rule that such trusts are void because they violate the law against per- petuities, and not being charitable trusts, are not excepted from that law by Laws of 1893, Chap. 7or. See Matter of Waldron, 57 Misc. 275 (1907); Driscoll v. Hewlett, 198 N. Y. 297 (1910). Section 152 of the County Law (L. 1909, Chap. 16) added by Laws of 1906, Chap. 362, provides as follows: § 152. County treasurer as trustee of cemetery lots. A per- son residing in this state may create a trust in perpetuity for the maintenance of a cemetery lot, the preservation of a build- ing, structure, fence or walk therein, the renewal or preserva- tion of a tomb, monument, stone, fence, railing or other erec- tion or structure on or around such lot, or the planting or cultivation of trees, shrubs, flowers or plants in or about such lot, or for any of such purposes, by transferring, conveying, devising or bequeathing to the county treasurer of the county in which such person resides or in which such cemetery is lo- cated or if such person resides or such cemetery is lo- cated in a county wholly within a city, to the chamberlain of such city, real or personal property, and designating such county treasurer or chamberlain as trustee in the instrument creating such trust. Such instrument may direct that the income derived from such property shall be applied to one or more of the purposes specified in this section. A county treasurer or city chamberlain designated as trustee in pur- suance of this section, may in his discretion accept the prop- erty so transferred, and if he accepts the same, he shall cause the same to be invested in accordance with the terms of the trust, if any are prescribed, and otherwise shall invest and reinvest such property in securities in which savings banks are authorized to invest. The income derived from such property shall be collected by the county treasurer or chamberlain who shall be entitled to receive five per centum of such income for administering the trust. The balance of such income shall! be paid by the county treasurer or chamberlain to the person or corporation owning or conducting such cemetery, provided such person or corporation is willing to accept the same and apply the money so received, so far as the same may be ap- plicable, in furtherance of the purposes for which such trust was created. Such money shall not be paid to an individual unless he shall give to the county treasurer or chamberlain a bond in an amount to be approved by him conditioned for the faithful application of such money, in accordance with the terms of the trust. If at any time after the creation of such trust there is no person or corporation willing to receive and apply the income thereof in accordance with the terms of the trust, the county treasurer or chamberlain shall present a petition to the county judge of the county, or a justice of the supreme court of the district wherein such cemetery is located, 208 MEMBERSHIP CorPoRATIONS Law. praying for directions as to the manner in which such trust shall be administered by him. Such county judge or justice of the supreme court may, by order, direct that the trust shall be directly administered by the county treasurer or city cham- berlain or may otherwise provide for the administration thereof in such manner as shall, so far as practicable, carry out the intent of the creator of the trust. Laws of 1909, Chap. 218, added the following section to the Personal Property Law (L. 1909, Chap. 45): § 13-a. Trusts for care of cemetery lots, etc. Gifts, grants and bequests of personal property in trust for the purpose of perpetual care and maintenance, improvement or embellish- ment of private burial lots in cemeteries, and the walks, fences, monuments, structures and tombs thereon, are permitted and shall be deemed to be for charitable and benevolent uses; and shall not be deemed to be invalid by reason of any indebted- ness or uncertainty of the persons designated as beneficiaries in the instrument erecting the same, nor shall they be deemd invalid as violating any existing laws against perpetuities or suspension of the power of alienation of title to property. But nothing herein contained shall affect any existing authority of the courts to pass upon the reasonableness of the amount of such gift, grant or bequest. ‘Laws of 1909, Chap. 218, added the following section to the Real Property Law (L. 1909, Chap. 52): § 114-a. Trusts for care of cemetery lots, et cetera. Gifts, grants and devises of real property, in trust for the purpose of applying the proceeds or income thereof to the perpetual care and maintenance, improvement or embellishment of private burial lots in cemeteries, and the walks, fences, monuments, structures and tombs thereon, are permitted and shall be deemed to be for charitable and benevolent uses; and shall not be deemed to be invalid by reason of any indefiniteness or uncertainty of the persons designated as beneficiaries in the instrument creating the same, nor shall they be deemed in- valid as violating any existing laws against perpetuities or the suspension of the power of alienation of title to property. But nothing herein contained shall affect any existing authority of the courts to pass upon the reasonableness of the amount of such gift, grant or devise. ° Tf the cemetery corporation is made the trustee, the purposes of the trust should be stated in the language of the above section to avoid question as to the power of the corporation to act. Cross References. Limitation as to amount of property, Gen. Corp. L. § 12. Gen- eral power to acquire, Gen. Corp. L. § 11. Exemption from general taxation, Tax L. § 4, subd. 7. As to laying out highways, § 84, .MeEMBERSHIP Corporations Law. 209 post. Sale of land § 82, post. Agreements between purchaser of lot and cemetery as to perpetual care of lots, § 85, post, added by L. 1912, ch. 315. § 66. Surveys and maps of cemetery. Every cemetery corporation shall, from time to time, as land in its cemetery may be required for burial purposes, survey and subdivide such land into lots or plats, with avenues, paths, alleys, walks and ornamental plats; and make and file a map thereof in the office of the corporation, open to the inspec- tion of all persons. Any unsold lots, plats or parts of lots or plats, in which there have not been any burials, may, by. order of the directors, be resurveyed and altered in shape or size, and properly designated on such maps. Sources.—Formerly Mem. Corp. L. (L. 1895, ch. 559), § 46. Re- vised from L. 1847, ch. 133, § 4, as am’d by L. 1891, ch. 382, and § 7, as am’d by L. 1879, ch. 108. The requirements of this section need not be complied with until title has been acquired. Matter of Lyons Cem. Ass’n, 93 App. Div. 19 (1904). § 67. Rules and regulations. The directors of a ceme- tery corporation may make reasonable rules and regulations for the use, care, management and protection of the property of the corporation and of all lots, plats and parts thereof in its cemetery; for regulating the dividing marks between the various lots, plats and parts thereof, their size, shape, location, and the size of erections thereupon; for prohibit- ing or regulating the erection of structures upon such lots, plats or parts thereof; for preventing unsightly monuments, effigies and structures within the cemetery grounds, and for the removal thereof; for regulating the introduction and care of plants, trees and shrubs within such grounds; for the prevention of the burial in a lot, plat or part thereof, of a person not entitled to burial therein; for regulating or preventing disinterments; for the conduct of persons while within the cemetery grounds; and for the exclusion of improper persons therefrom and improper assemblages therein. Such rules and regulations shall be plainly printed and 210 MEMBERSHIP CoRPORATIONS Law. “publicly posted in the principal office of the corporation, ‘and in such places upon the cemetery grounds as the direc- tors by resolution prescribe. The directors may prescribe _penalties to be paid by a person violating any such rule or regulation, not exceeding twenty-five dollars for each vio- lation, which shall be recoverable by the corporation in a civil action. . Sources—Formerly Mem. Corp. L. (L. 1895, ch. 559), § 47. Re- vised from L. 1874, ch. 245. Recovery of Penalty. _ The penalty to be paid for violation of rules and regulations ‘can only be collected from those who voluntarily become mem- ‘bers, and where a rule providing that all work in a cemetery shalt be done by or with the approval of the superintendent was vio- lated by one employed by lot owners the penalty cannot be re- covered from him. The remedy against such person is an action ‘for damages for trespass. Johnston Cem. Ass’n v. Parker, 45 App- Div. 55 (1899). ; The legislature has no power to delegate to the corporation the right to impose a fine upon persons not members thereof. Johnston Cem. Ass’n v. Parker, 45 App. Div. 55 (1899) and see op. below in 28 Misc. 280 (1899). Unreasonable Regulation. Where a deed to a lot owner grants to him the right to culti- vate trees, shrubs and plants he has the right to cut or have cut by another the grass on his lot. A regulation directing that all work be done by the superintendent or with his consent and under his superintendence is unreasonable and void. Johnston Cem. Ass’n v. Parker, 28 Misc. 280 (1899) aff’d on other grounds, 45 App. Div. '55 (1899). Liability for Negligence. ’ The association is not liable to one who purchased a grave for her husband’s burial and was poisoned by ivy while planting flow-- ers on the grave, where the association had not agreed to care for the grave and had no actual or constructive notice of the presence of the ivy. The exemption from liability does not rest on the fact that the association is a charitable corporation. George v. Cypressp Hills Cemetery, 32 App. Div. 281 (1898). The officers and agents of the corporation are bound to exer- cise reasonable care not to permit the introduction into the lots or upon or about the graves of anything which they knew or ought to have known would constitute an unusual source of danger to persons lawfully visiting such lots or graves. George v. Cy- press Hills Cemetery, 32 App. Div. 281 (1898); Dutton v. Green- wood Cem. Co., 80 App. Div. 352 (1903), and see East Hills Cem. y. Thompson, 97 N. E. 1036 (Indiana 1912). MEMBERSHIP CorpoRATIONS Law, ait The association will be held liable for negligence where ‘a tomb- stone fell upon and injured a child visiting a grave as the con- dition of the tombstone was such that its condition must have been discoverable upon ordinary inspection, but which inspection was never made. Dutton v. Greenwood Cem. Co., 80 App. Div. 352 (1903). § 68. Record of burials. A record shall be kept of every burial in the cemetery of a cemetery corporation, showing the date of the burial, the name, age and place of birth of the person buried, when these particulars can be conveniently obtained, and the lot, plat, or part hereof, in which such burial was made. A copy of such record, duly certified by the secretary of such corporation, shall be furnished on de- mand and payment of such fees therefor as are allowed the county clerk for certified copies of records. Sources.—Formerly Mem. Corp. L. (L. 1895, ch. §59), § 48. Re- vised from L. 1847, ch. 133, § 3, as added by L. 1891, ch. 382. For fees of County Clerk see Code Civ. Pro. § 3304, as set forth under section 41, ante. § 69. Title and rights of lot owners. The directors must fix and determine the prices of the burial lots or plats, and ‘keep a plainly printed copy of the schedule of such prices publicly posted in the principal office of the corporation, open at all reasonable times to the inspection of all persons. The corporation, unless its certificate of incorporation or by-laws otherwise provide, shall, subject to its rules and regulations, sell and convey to any person, the use of the lots or plats designated on the map filed in the office of the corporation, on payment of the prices so fixed and de- termined, but need not sell and convey more than one lot or plat to one person. The conveyances of lots and plats shall be signed by the president or vice-president and treas- urer of the corporation. All lots, plats or parts thereof, the use of which has been so conveyed as a separate lot, shall be indivisible, except with the consent of the lot owner and the corporation, or as in this article provided; and the use of the same for burial purposes, after a burial therein, shall be inalienable and be held in perpetuity by the grantee and his heirs, except as otherwise provided; and 212 MemsBersuip CorporATIons Law. upon the decease of a proprietor of such lot the title thereto shall descend to his heirs-at-law or devisees, subject, how- ever, to the following limitations and conditions: If he leaves a widow and children, they shall have in common the possession, care and control of such lot during her life. If he leaves a widow and no children, she shall have the ‘possession, care and control of such lot during her life. If he leaves children and no widow, they, or the survivor of them, shall in common have the possession, care and con- trol of such lot during the life of the survivor of them. The parties having such possession, care and control of such lot during-the term thereof, may erect a monument and make other permanent improvements thereon. The widow shall have the right of interment for her body in such lot, or in a tomb in such lot, and a right to have her body remain permanently interred or entombed therein, except that her body may be removed therefrom to some other family lot or tomb with the consent of her heirs. At any time when more than one person is entitled to the possession, care or control of such lot, the persons so en- titled thereto shall designate in writing to the clerk of the corporation which of their number shall represent the lot, and on their failure to designate, the board of trustees or: directors or commissioners of the corporation or commis- sion shall enter of record which of said parties shall repre- sent the lot while such failure continues. An heir may re- lease to the other heirs, and a joint owner may release to the other joint owners, his interest therein, on conditions specified in the release, which shall be filed in the office of the corporation. The widow may at any time release her right in such lot, but no conveyance or devise by any other person shall deprive her of such right. The title of a gran- tee, or his heirs, shall not be affected by the dissolution of the corporation or its non-user of its corporate rights ‘and franchises, or any act of forfeiture on its part, or any alienation of its property or incumbrance thereon made or suffered by it. If no burial be made in any such lot, or if all the dead bodies buried therein be lawfully removed MEMBERSHIP CoRPORATIONS Law. 213 therefrom, the owners thereof may, with the consent of the corporation, sell the use of such lot. The secretary of the cemetery corporation shall file and record in its books all deeds of transfer. A lot owner may reconvey or devise to the corporation his right and title in and to any lot theretofore conveyed to him by such corporation. Sources.—Former Mem. Corp. L. (L. 1895, ch. 559), § 49, as am’d by L. 1907, ch. 486. Revised from L. 1847, ch. 133, as am’d by L. 1879, ch. 108, L. 1880, ch. 566 and L. 1891, ch. 382; L. 1880, ch. 566; L. 1891, ch. 344; L. 1898, ch. 543. Consolidators’ Note. This section consists of § 49 of the “old” Membership Cor- porations Law, with so much of L. 1898, ch. 543, as added § 4, to L. 1869, ch. 727, which was made applicable to cemetery cor- porations provided for by the Membership Corporations Law, in- corporated therein. Nature of Estate Granted. A conveyance for burial purposes only confers upon the grantee a right to use for the purposes of interment. No such estate is granted as makes him an owner in such sense as to exclude the general proprietorship of the association. The association re- mains the owner in general and holds that relation to the public and to the government, while subject to this, the individual has a right exclusive of any other person to bury upon the subdi- vided plot assigned to him. He holds a position analogous to that of a pew holder in a house of public worship. Buffalo City Cem. v. City of Buffalo, 46 N. Y. 505 (1871); Peo. ex rel. Coppers v. Trustees, 21 Hun 184 (1880); Conger v. Treadway, 50 Hun 451 (1888); Went v. Methodist Pro. Church, 80 Hun 266 (1894) aff’d on op. below 150 N. Y. 577; Dutton v. Greenwood Cem. Co., 80 App. Div. 352, 354 (1903). Injunctive Relief. Heirs of a decedent at whose grave a monument has been erected, or the person who rightfully erected it, can recover dam- ages from one who wrongfully injures or removes it, or by an in- junction may restrain one who without right threatens to injure or remove it, although the title to the ground wherein the grave is, be not in the plaintiff but in another. Mitchell v. Thorne, 134 N. Y. 536 (1892); Matter of Brick Presb. Church, 3 Edw. Ch. 155. Title to Lot. When a husband purchases a lot to be used for the burial of himself, his wife and family, and it has been improved at both his and his wife’s expense and some members of the family have been buried therein, and the husband thereafter sold and conveyed the lot to a third person the wife may maintain an action to restrain 214 Memerrsuip Corporations Law. such conveyance and is entitled to a decree ‘specifically devoting the lot to the objects for which it had been purchased and im- proved. The relief is granted on the theory of a parol gift of the land accompanied by possession and the making of improvements. Schroeder v. Wanzon, 36 Hun 423 (1885). It is to be noted that the above section provides that the use of lots for burial purposes shall be unalienable and be held in perpetuity for the grantee and his heirs, except as otherwise provided. Sale or Mortgage of Lots. Section 450 of the Real Property Law (L. 1909, Chap. 52) pro- vides as follows: Lands used for cemetery purposes not to be sold or mort- gaged. No land actually used and occupied for cemetery pur- poses shall be sold under execution or for any tax or assess- ment, nor shall such tax or assessment be levied, collected or imposed, nor shall it be lawful to mortgage such land, or to apply it in payment of debts, so long as it shall continue to be used for such cemetery purposes. Whenever any such land shall cease to be used for cemetery purposes, any judg- ment, tax or assessment which, but for the provisions of this section would have been levied, collected or imposed, shall thereupon forthwith, together with interest thereon, become and be a lien and charge upon such land, and * collectable out of the same. The provisions of this section shall not apply to any lands held by the City of Rochester. See also prohibiton against sale, mortgage and lease in the last paragraph of § 13, supra. In the absence of statute, where an interment has been made in a lot it cannot thereafter be mortgaged to secure the payment of a debt or the return of money borrowed. Such an act is pro- hibited by the equity and true spirit of the statute. Thompson v. Hickey, 59 How. Pr. 434 (1880). If no interment has been made the mortgage may be sustained. Lantz v. Buckingham, 4 Lans. 484 (1871). Fixing Prices of Lots. Where land is acquired by condemnation, provision with respect to the fixing and determining of prices of lots need not be com- plied with until the land is acquired. Matter of Lyons Cem. Ass'n, 93 App. Diy. 19 (1904). Executory Agreement. A parol executory agreement to purchase a lot is void under the statute of frauds, although part payment of the price has been made and the decedent’s remains have been interred in such lot. Matter of O’Rourke, 12 Misc. 248 (1895). In the absence of statute no formal deed is necessary to confer *So in original. MEMBERSHIP CorroraTions Law. 215 tight to use lot for burial purposes. Conger v. Treadway, 50 Hun 451 (1885) aff'd 132 N. Y. 259 (1892). Easement. Title to an easement for burial may be acquired by prescription.. Conger v. Weyant, 7 N. Y. Supp. 809. § 70. Application of proceeds of sales of lots. At least one-half of the proceeds of the sales of the use of all lots and plats shall be applied to the payment of the purchase- money of the real property acquired by the corporation un- til such purchase-money is paid, and the residue thereof Shall be applied to preserving, improving and embellishing the cemetery grounds and the avenues and roads leading thereto, and to defraying the incidental expenses and lia- bilities of the corporation. After the payment of such pur- chase-money, and the expense of surveying and laying out the cemetery, the proceeds of all sales of the use of lots and plats thereafter shall be applied only to the improve- ment, preservation and embellishment of such cemetery and the incidental expenses of the corporation. Such cor- poration may agree with a person from whom any lands are purchased for a cemetery, to pay therefor a specified share not exceeding one-half of the proceeds of all sales of the use of lots and plats made from such land, and such Share shall be first applied to the payment of such pur- chase-money, and the residue thereof shall be applied to the preservation, improvement and embellishment of the cemetery, and the incidental expenses of the corporation. Where lands have been so purchased, and are to be paid for as provided by this section, the prices of the use of lots and plats fixed by the directors and in force when such pur- chase was made, shall not be changed, while the purchase- price remains unpaid, without the written consent of a ma- jority in interest of the persons from whom the lands were purchased, their heirs, representatives or assigns. Source—Former Mem. Corp. L. (L. 1895, ch. 559), § 50. Re- vised from L. 1847, ch. 133, § 7, as am’d by L. 1879, ch. 108. It is clearly in violation of their fiduciary relation for trustees of aan association to deal in lots for their own benefit and advantage. Palmer v. Cypress Hill Cem., 122 N. Y. 429 (1890). 216 MeEmBerSHIP CoRPORATIONS Law. It seems that an unqualified agreement to sell a large number of lots to individuals for resale of them might deny to the trustees the power to regulate the terms of sale which the statute con- templates they should exercise and might therefore be invalid, but where such question is not raised by the corporation, specific performance of such an agreement will be decreed. Palmer v. Cypress Hill Cem., 122 N. Y. 429 (1890). As to issuing certificates of indebtedness see Sec. 74, post. Fora case arising under this section with peculiar facts, see Seymour v. Spring Forest Cemetery Ass’n, 144 N. Y. 333 (1895) S. C. 4 App. Div. 359 aff’d on op. below 157 N. Y. 697 (1898). § 71. Burials and removals. The remains of a widow may be buried in a burial lot of which her husband died possessed and in which his heirs continue to have an estate or right of burial, without the consent of any person whom- soever claiming any interest in such lot. The remains of the wife, husband, parent or child of a person who has a burial lot or estate therein or right of burial therein, may be interred in such lot without the consent of any person whomsoever claiming any interest in such lot, subject how- ever, in all cases to the following rules and exceptions: 1. The place of interment in such lot shall be subject to the reasonable determination of the cemetery corpora- tion or association or their officers or agent having imme- diate charge of interments. This section shall not permit the remains of a person not otherwise entitled to burial, to be interred in any ground or place contrary to or in vio- lation of the precepts, regulations or rules or usage of any church or other religious society, association or corporation. 2. Any husband or wife living separate from the other and having a burial lot in which the other, but for this section, would have no right of burial, and not desiring the remains of the other to be interred therein, may file a written objection to such interment with the cemetery corporation or association, and if so filed at least thirty days before the death of the other, no right of interment shall be claimed or had under the foregoing provisions of this section. 3. A parent or child having a burial lot in which the other would have no right of burial but for this section, MEMBERSHIP CorPoRATIONS Law. 217 and not desiring the remains of the other to be interred therein, may file a written objection to such interment with the cemetery corporation or association, and if so filed at least thirty days before the death of the other, no right of interment shall be claimed or had by such other under this section; provided, that in such case, if the parent or child so excluded from burial in such lot should die with- out having any place of interment provided, then the par- ent or child filing such objection shall at once furnish for the other a place of burial in some convenient cemetery; for the reasonable cost of which the estate of the deceased, if any, shall be responsible to the person furnishing such grave, 4. This section does not limit any existing rights of burial under other provisions of law. Nothing in this sec- tion contained shall limit or curtail the right of alienation by the owner of a burial lot, under the rules of the ceme- tery corporation or association wherein such lot is situated, before the death of the person for whose remains the right of burial is provided herein, and no right of burial shall accrue to any person by reason of this section in any burial lot sold by its owner, before the death of the person for whose remains the right of burial is provided herein. If there be more than one lot owner of a lot in a cemetery of a cemetery corporation, no body of a dead person shall be buried therein without the consent of all the owners of such lot, unless such person, at the time of his death, was an owner of the lot, or a relative, wife or husband of an owner, or a relative of such wife or husband. A dead body lawfully buried in a lot in such a cemetery may be re- moved therefrom, with the consent of the corporation, and a written consent of the owners of such lot, and of the sur- viving wife, husband, children, if of full age, and parents of the deceased. If the consent of any such person cannot be obtained, or if the corporation refuses its consent, the consent of the county court of the county or the supreme court, at a special term, held in the district, where the ceme- tery is situated, shall be sufficient. Notice of the applica- 218 Mempersuip Corporations Law. tion for the consent of the court must be given, at least eight days prior thereto, personally, or, at least sixteen days prior thereto, by mail, to the corporation or to the person not consenting, and to every other person on whom ser- vice of notice may be required by the court. Sources.—Formerly Mem. Corp. L. (L. 1895, ch. 559), § 51, as am’d by L. 1900, ch. 715. Revised from L. 1847, ch. 133, § II, as am’d by L. 1880, ch. 566. For form of petition, consent and order under subdiv. 4, see Forms Nos. 59-62, post. See also § 69, supra as to rights of widow. Power to Prohibit Burial and Compel Removal. The power of the legislature to prohibit interments in or t6 remove the dead from cemeteries which in advance of urban popu- lation may be detrimental to the public health or in danger of becoming so is well established. Went. v. Meth. Protestant Church, 80 Hun 266 (1894), aff'd on op. below 150 N. Y. 577, citing many cases; such legislation does not violate the fourteenth amendment of the United States Constitution. Laurel Hill Cem. v. San Francisco, 216 U. S. 358 (1909). An act of the legislature (L. 1893, Chap. 352), authorizing the removal of bodies from a cemetery in a part of a city rapidly increasing in population and providing for the purchase of an- other cemetery and interment of the bodies therein is constitu- tional, for the lot owner acquires his rights subject to the con- tingency that the cemetery may become a nuisance and the re- moval of the bodies a necessity. Went. v. Meth. Protestant Church, 80 Hun 266 (1894) aff'd on op. below 150 N. Y. 577; and see Angel v. Meth. Protestant Church, 47 App. Div. 459 (1900). The right to prohibit burial in certain localities may be dele- gated by the legislature to municipal authorities. Peo. ex rel. Oak Hill Cem. Ass’n v. Pratt, 129 N. Y. 68 (1891). Regulating Interments. For provisions regulating interments in cemeteries and the issuing of burial permits, see Public Health Law, §§ 23, 24, and 38. Duty to Provide Burial. Where the deceased person leaves an estate it is the duty of his personal representatives to provide for the reasonable and necessary expense of the burial of his remains out of such estate. Patterson v. Patterson, 59 N. Y. 574 (1875); Matter of Caldwell, 188 N. Y. 115 (1907); where however the decedent owned a lot and it was found as a fact that his widow and executrix was not denied. burial therein in the event of her death, she cannot charge his estate with the price of another lot. Matter of Caldwell, 188 N. Y. 115 (1907). MemBersHiP Corporations Law. 219 Statutory Proceeding to Remove Body. The provision obtaining the consent of court by petition for removal of body does not apply to cemeteries belonging to re- ligious or municipal corporations for Sec. 60, ante, so provides. Matter of Cohen, 76 App. Div. gor (1902). The jurisdiction of the Supreme Court upon motion to direct the removal! of bodies from a cemetery is purely statutory. Mat- ter of Owens, 79 App. Div. 237 (1903). Equity can enforce the right to removal independent of statute by action. Cohen v. Congregation Shearith Israel, 114 App. Div. 117 (1906) aff'd no op. 189 N. Y. 528 and S. C. 85 App. Div. 65 (1903) and cases cited. The provision for obtaining the consent of the court on motion does not apply to a corporation created under special act not repealed by this law. Matter of Owens, 79 App. Div. 236 (1903). Subdivision 4 is applicable even if the lot is no longer owned by the cemetery corporation, for it provides for the consent of the owner and the corporation. Matter of Bauer, 68 App. Div. 212 (1902). Where a widow authorized her son-in-law to obtain grave privi- leges for her deceased husband from a lodge, she did not thereby become bound by a by-law of the lodge providing that in no case should permission be given to remove a corpse for reinterment in any other burial ground. Matter of Bauer, 68 App. Div. 212 (1902). Jurisdiction of Equity. In the absence of a regulation adopted by a religious body as to who shall determine the right to remove a corpse buried in its cemetery, such right must be determined when presented to a court of equity upon equitable grounds and not according to ecclesiastical law. The latter is not a part of the law of this State. Cohen v. Congregation Shearith Israel, 114 App. Div. 117 (1906) aff'd no op. 189 N. Y. 528. Equity will enforce the right to removal where a body is in- terred in the cemetery owned by a religious body with an intent to thereafter remove it. Cohen v. Congregation Shearith Israel, 114 App. Div. 117 (1906) aff'd no op. 189 N. Y. 528. The evident purpose of subdivision 4 as to the removal of bodies was to settle a question long mooted as to the right of cemetery corporations to allow disinterments and of the rights of relatives of deceased persons to cause such disinterments to be made, but the grounds upon which the court should allow re- moval are among those upon which courts of equity would hereto- fore have allowed such disinterment and reburial. Matter of Ack- ermann, 124 App. Div. 684 (1908). Where the mother of the petitioner whose body is sought to be removed was buried in the same place as her deceased husband, as requested by her, an order for removal will be denied where it is opposed by some of the children and is sought in aid of a family quarrel. Matter of Ackermann, 124 App. Div. 684 (1908). 220 MEMBERSHIP CoRPORATIONS Law. Corpses from Public Institutions. The Public Health Law, §§ 316 and 317, as amended by L. 1913, ch. 335, provides for the disposition of corpses from public insti- tutions. Rights to Dead Bodies. 7 The next of kin of a deceased person, in the absence of any testamentary disposition, has the right of possession of the body for burial. For violation of this right and the mutilation and dis- section of the body, damages may be recovered for wounded feel- ings and mental distress. Darcy v. Presbyterian Hosp., 202 N. Y. 259 (1911); Hassard v. Lehane, 143 App. Div. 424 (1911); note 6L.R. A. (N. S.) 883. Under the common law the heir had no property right in the body of his ancestor though he possessed rights in monuments and escutcheons, but the more modern and current judgment of many courts recognize a “quasi property” right in the body of the dead in the nature of a “sacred trust” that a court of equity will recognize in order to afford control of the body to the next of kin. Cohen v. Congregation Shearith Israel, 85 App. Div. 65 (1903) and cases cited; Foley v. Phelps, 1 App. Div. 551 (1896); 5 Columbia Law Review 543; Harvard Law Review February, 1911, quoted in N. Y. Law Journal, March 20, 1911, and citing many cases from other jurisdictions. The husband or wife has the superior right to select for the other the place of interment and for the dead of that union where the deceased has expressed no preference. Foley v. Phelps, 1 App. Div. 551 (1896); Matter of Richardson, 29 Misc. 367 (1899), citing cases. Where there is a question as to what decedent’s wish was as to place of burial, the final disposition of his body should await the determination of an action seeking custody of the body and such custody should not be granted on motion. Butler v. Butler, 91 App. Div. 327 (1904). If the dead person has been interred by his brother, the widow claiming the right to choose the burial place cannot maintain re- plevin to recover the body. The remedy is in equity. Buchanan v. Buchanan, 28 Misc. 261 (1899). It is the almost universal practice among civilized people to scru- pulously conform to the wishes and requests of friends and rela- tives as to the disposition to be made of their bodies and where parents have expressed their wish as to the place of burial and they have Been buried in accordance therewith, a court of equity will not thereafter direct a removal. Matter of Donn, 14 N. Y. Supp. 189 (1891). In Appendix to 4 Bradford 503, at 532 (1856) Ruggles, referee, in matter of widening Beekman Street, New York, after an ex- haustive discussion, reached the following conclusions: “1, That neither a corpse nor its burial is legally | subject in any way to ecclesiastical cognizance nor to sacerdotal power of any kind. MEMBERSHIP CORPORATIONS Law. 221 “2, That the right to bury a corpse and to preserve its remains: is a legal right which the courts of law will recognize and pro- tect. “3. That such right in the absence of any testamentary dis- position belongs exclusively to the next of kin. “4, That the right to protect the remains includes the right to preserve them by separate burial, to select the place of sepulchre and to change it at pleasure. “s. That if the place of burial be taken for public use, the next. of kin. may claim to be indemnified for the expense of removing and suitable reinterring their remains.” ‘Penal Provisions. Taking up dead bodies from the place where they have been interred, without authority, is a misdemeanor at common law. Thompson v. Hickey, 59 How. Pr. 434 (1880). See Section 2210-2220 Penal Law, post, for penal provisions. City and Village Cemeteries. For provisions as to city and village cemeteries see Village. Law, Article 12, and General Municipal Law, Article 8. § 72. Taxation of lot owners by corporations. If the funds of a cemetery corporation, applicable to the improve- ment and care of its cemetery wholly outside of a city of the first or second class, or applicable to the construction of a receiving vault therein for the common use of lot owners, be insufficient for such purposes, the directors of the corporation, not oftener than once in any year and for such purposes only, may levy a tax on some basis to be determined by the directors of said corporation, but no such tax shall exceed two dollars on any one lot, except that with the written consent of two-thirds of the lot owners or by the vote of a majority of the lot owners pres- ent at an annual meeting, or at a special meeting duly called for such purpose, such tax may be for an amount which shall not exceed a total of five dollars per annum per lot, and the tax on any one lot shall not exceed five dollars per annum but the taxes may be levied upon each lot in the first instance for a sum sufficient for the improve- ment and care of the lot, but no greater sum than five dollars shall be collected in any one year. The whole tax levied may be collected in sums of five dollars in successive years in the manner herein provided. Notice of such tax 222 MEMBERSHIP CorRPoRATIONS Law: shall be served on the lot owners or where two or more persons are owners of the same lot, on one of them, either personally, or by leaving it at his residence, with a person of mature age and discretion, or by mail, if he resides in a city, town or village where the office of the corporation is not located, or in case the residence or whereabouts of the owner can not be ascertained, by publication once a week for four successive weeks in a newspaper published in the town where such cemetery is located, or if no news- paper is published in such town then in some newspaper published in the county where such cemetery is located. If such tax remain unpaid for more than thirty days after the service of such notice, the president and secretary of the corporation may issue a warrent to the treasurer of the corporation, requiring him to collect such tax in the same manner as school collectors are required to collect school taxes; and such treasurer shall have the same power and be subject to the same liabilities in executing such warrant. as a collector of school taxes has or is subject to by law in executing a warrant for the collection of school taxes. If the taxes so levied remain unpaid for five years after the levying of such tax the amount thereof with interest. shall be a lien on the unused portion of the lot which is. subject to such tax, and no portion of the lot so taxed shall. be used by the owner thereof for burial purposes, while: any such tax remains unpaid. If at the expiration of five years from the date of the service of the first notice of assessment as herein provided, any such assessment or the interest thereon shall remain unpaid, the corporation may sell the unused portion of such lot at public auction upon the cemetery grounds, in the following manner: If the person owning such lot resides within the state, a written. notice, under the seal of such cemetery association, if it have a seal, and the hand of the president or secretary thereof, stating the amount of such tax or taxes unpaid and that such unused portion of such lot will be sold at a time therein to be specified, not less than twenty days. from the date of the service of such notice, shall be per- MEMBERSHIP CorporATIONS Law. 223 sonally served upon such owner; if such owner is not a ‘resident of the state, or if the place of his residence can not ‘with due diligence be ascertained, or if, for any other reason satisfactory to the court, personal service can not with due diligence be made upon such owner, such cemetery asso- ‘ciation, or any of its officers, may present a duly verified ‘petition stating the facts to the county court of the county ‘in which such cemetery lands are situated, or to the su- preme court, and such court may upon satisfactory proof, by its order, direct the service of such notice in the man- ner provided by the code of civil procedure, for the sub- ‘stituted service of a summons. The president or secretary of such association, or any suitable and proper person ap- pointed by such association or by the court, may upon filing proof of publication and service of such notice as ‘provided by section four hundred and forty-four of the code of civil procedure make such sale, and the same may be adjourned from time to time for the accommodation of the parties or for other proper reasons. Previous notice of such sale shall be posted at the main entrance of the ceme- .tery. Prior to such sale such corporation shall cause such lot to be resurveyed and replatted showing the part thereof not used for burial purposes and only such unused portion shall be sold. The cemetery corporation may at any such sale under this chapter purchase any such lots or parts of lots. The surplus remaining after paying all assessments, .interest, cost and charges shall be set aside by said cor- poration, as a fund for. the care and improvement of that portion of such lot that has been used for burial purposes. .In case the proceeds of such sale shall amount to more -than thirty dollars the person making such sale shall make his report, under oath, to the court, of proceedings had .and shall state the amount for which such lot was sold -and that such lot was sold to the highest responsible bid- der, together with the names of the purchasers, and the -court may and in a proper case shall, by order, confirm such sale; in all other cases the person making such sale shall file in the office of the county clerk of the county in which 224 MEMBERSHIP CorporATIONS Law. such cemetery lands are situated a like report duly verified, and on the filing of such order of confirmation. or such re- port, as the case may be, the title to the use of such un- occupied portion of such lot shall vest in the purchaser thereof. : The directors of any such association may make a con- ‘tract with a lot owner which shall provide for the payment by him of an agreed gross sum in lieu of further taxes and assessments and that upon the payment of such gross sum the lot of such owner shall be thereafter exempt from taxes and assessments. Source—Formerly Mem. Corp. L. (L. 1895, ch. 559), § 52, as am’d bv L. 1897, ch. 477; L. 1900, ch. 761; L. 1905, ch. 123; and L. 1907, ch. 486. Revised from L. 1868, ch. 402, §§ 1-3, as am’d by L. 1877, ch. 426; L. 1879, ch. 411; L. 1888, ch. 415. Thus am’d by L. 1912, ch. 301. The foregoing section was materially changed by the amend-- ment of 1912. § 73. Expenses of improving vacated lot. Whenever a person having a lot in the cemetery of a cemetery corpo- ration shall vacate the same by a removal of all the dead buried therein, and leave such lot in a broken and unim- proved condition for a period of one month or more from the date of such removal, the corporation may grade, cut, fill or otherwise change the surface thereof, for the im- provement of the lot and the general improvement of the cemetery grounds, without reducing the area of the lot. The expense of such improvement, not exceeding ten dol- lars, shall be chargeable to such lot. If the owners of such lot shall not, within six months after such expense has been incurred, repay to the corporation the amount charge- able to the lot, the corporation may sell the lot at public auction upon the cemetery grounds, previous notice of such sale having been posted at the main entrance of the ceme- tery, and mailed to the owners of such lot at their last- known post-office address, at least ten days prior to the day of sale, and shall pay the surplus, if any, of the pro- ceeds of such sale over such amount, on demand, to the owners of such lot. MEMBERSHIP CorPorATIONS Law. 225 Source.—Formerly Mem. Corp. L. (L. 1895, ch. 559), § 53. Re- vised from L. 1871, ch. 378. § 74. Certificates of indebtedness. If a cemetery corpo- tation be indebted for lands purchased for cemetery pur- poses, or for services rendered or materials furnished in preserving or improving its cemetery, the directors thereof, by the concurring vote of a majority of their whole num- ber, may, with the consent of the creditor to whom any such indebtedness is owing, issue certificates under the cor- porate seal, signed by the president and secretary, for the amount of such indebtedness, or a part thereof, payable at such times and drawing such a rate of interest and in such sums as may be agreed on with such creditor; but the amount of any certificate shall not be less than one hundred dollars, nor the rate of interest higher than the rate author- ized by law. The certificate shall be transferable by deliv- ery, unless otherwise provided on the face thereof; and the directors shall keep in the books of the corporation an exact and true account of the number and amount of such certifi- cates, the persons to whom issued, the time of maturity and the rate of interest. A separate account shall be kept in the books of the corporation of the certificates issued for the purchase-money of lands, and the certificates issued for debts incurred in preserving and improving the cemetery. The directors shall set aside from the proceeds of sales of the use of lots and plats, such sums as they may deem nec- essary to pay said certificates at their maturity. Until such certificates are paid each holder thereof shall be entitled at all meetings of the corporation, to one vote for each one hundred dollars of such indebtedness held by him. The cer- tificates issued pursuant to this section shall not be a lien upon any lot belonging to a lot owner. Source.—Formerly Mem. Corp. L. (L. 1895, ch. 550), § 54, Re- vised from L. 1860, ch. 163, as am’d by L. 1884, ch. 433. For a discussion of the purposes of this section see Am. Exc. Natl. Bank v. Woodlawn Cemetery, 194 N. Y. 116 (1909). The doctrine of estoppel applicable to the spurious issue of corporate stock of business corporations has no application to certificates of indebtedness. Am. Exc. Natl. Bank v. Woodlawn 226 MEMBERSHIP CoRPORATIONS Law. Cemetery, 194 N. Y. 116 (1909) revsg. 120 App. Div. 119; see too, Seymour v. Spring Forest Cem. Ass’n, 144 N. Y. 333 (1895). Where the certificate states that it is a lien on the land pur- chase fund to be composed of one-half gross proceeds of the sale of birial lands and that the holder of such certificate is entitled to pro rata shares of the fund and that the'cemetery corporation acts only as collector of the fund and as trustee, a certificate holder can maintain an action in equity to compel an accounting for moneys. received for the sale of lands. Tyndale v. Pinelawn Cemetery, 198 N. Y. 217 (1910). It seems that the better practice would be to have a certificate holder bring a representative action on behalf of himself and all others similarly situated (id.). § 75. Certificates of stock heretofore issued. If a ceme- ‘tery corporation, incorporated under a law repealed by this chapter, has converted its outstanding indebtedness or cer- tificates of indebtedness into certificates of stock, in pur- suance of law, no interest shall accrue to the holders of such stock, but they shall receive annually or semi- annually a dividend thereon for their proportional part of the entire surplus or net receipts of the corporation over and above current expenses; or if the proportion of the net receipts or surplus which stockholders shall be entitled to receive shall have been fixed by agreement at the time of issuing such stock, such stockholders shall be entitled to receive dividends in accordance with such agree- ment. Such certificates of stock shall be transferable only -on the books of the corporation on the surrender of the cer- tificate, unless otherwise provided on the face thereof, and on every such surrender a new certificate of stock shall be issued to the person to whom the same has been trans- ferred; and the holders of such stock shall be entitled, in person or by proxy, to one vote for every share thereof, at -each meeting of the corporation. A register of the stock issued by the corporation shall be kept by its directors showing the date of issue, the number of shares, the par value thereof, the name of each person to whom issued, the number of the certificates therefor ; and all transfers of such stock shall be noted and entered in such register, and the certificates surrendered shall be deemed canceled by the is- sue of a new certificate, and the surrendered certificate shall ‘MEMBERSHIP CorPorATIONS Law. 227 be destroyed. Any director may become the holder or trans- feree of such stock for his own individual use or benefit. No such stock shall be a lien on the lot of any individual lot owner within the cemetery limits; and no other or greater liability of the corporation issuing such stock shall be created or deemed to exist than may be necessary to enforce the faithful application of the surplus or net re- ceipts of the corporation to and among the holders of the stock in the manner hereinbefore specified. A cemetery which has heretofore issued such certificates of stock is a membership corporation and not a stock cor- poration. Source.—Formerly Mem. Corp. L. (L. 1895, ch. 559), § 55. Re- vised from L. 1879, ch. 107, as am’d by L. 1894, ch. 267. If the corporation does not apply the proceeds of sales as directed by this section, an action at law for breach of contract may be maintained on default of payment of any instalment. Thacher v. Hope Cem. Ass’n, 126 N. Y. 507 (1891). Such action is barred within six years after it accrues, although the certificate holder had no knowledge more than six years before the com- mencement of the action that money applicable to payment of the certificates had been received (id.). § 76. Private cemetery corporations. Seven or more per- sons may become a private cemetery corporation by setting off for a private cemetery inclosed real property, to the ex- tent of not more than three acres, and by electing at a meet- ing of the proprietors of the real property so set off, at which not less than seven shall be present, three of their number to be directors, to hold office for five years. The chairman and secretary of such meeting shall make, sign and acknowledge, and file in the office of the clerk of the county in which such real property is situated, a certificate containing the name of the corporation, a description of the lands so purchased or set apart, and the names of the direc- tors. No such cemetery shall be located within one hun- dred rods of any dwelling-house without the written con- sent of the owner thereof. Additional lands may be acquired by a private cemetery corporation to an extent not to exceed three acres; but no additional lands so purchased or otherwise acquired shall be 228 MemBersHip Corporations Law. used for the purpose of burial within three hundred feet of » any dwelling without the written consent of the owner thereof. Source.—Formerly Mem. Corp. L. (L. 1895, ch. 559), § 56. Re- vised from L. 1854, ch. 112, §§ 1-4, 6, and § 10 added by L. 1877, ch. 469. For form of certificate of incorporation to be filed in the office of the County Clerk under this section, see Form No. 63, post. For comments generally applicable see notes to § 41, ante. § 77. Removal of remains to other cemeteries. The su- pervisor of any town containing a private cemetery may remove any dead bodies or human remains interred in such cemetery to any other cemetery within such town, if the owners of such cemeteries and thé persons residing within the state who are next of kin of such deceased persons con- sent to such removal. The owners of such cemeteries may remove the remains of deceased persons interred therein to any cemetery within such town, or to some cemetery desig- nated by the persons who are next of kin of such deceased persons. Notice of such removal shall be mailed or served personally upon the next of kin of such deceased persons, if known to such owners, within ten days of such removal. Source.—L. 1854, ch. 112, § 11, added by L. 1893, ch. 59, and am’d by L. 1897, ch. 463. See cases cited under § 71, ante. § 78. Family cemetery corporations. Any person may, by deed or devise, dedicate land to be used exclusively for a family cemetery, or the executors, administrators or trus- tees of a deceased person may, with the written authority of all the surviving heirs, next of kin, devisees and legatees of the deceased person, executed in person or by attorney, or if infants, by general guardian, dedicate lands of such deceased person to be used exclusively for such purpose, or purchase with the funds of the estate under their control, suitable lands therefor, and may pay to the directors of such cemetery money or other personal property as hereafter provided. The quantity of land so dedicated shall not ex- ceed three acres, nor be located within one hundred rods of MEMBERSHIP CoRPORATIONS Law. 229 a dwelling-house, without the consent of the owner, unless the land so dedicated shall, at the time of such dedication, be already in actual use for burial or cemetery purposes within the limits of a city. The instrument dedicating such land shall describe the same, may appoint directors to man- age such cemetery, may prescribe or provide for making the rules, directions or by-laws, for such management, may direct the manner of choosing successors to the directors, may fix or provide for their qualifications, and may grant to such directors and their successors money or personal prop- erty to be a fund for maintaining, improving and embellish- ing such cemetery, in accordance with the deed or will of such person, or the written authority of such heirs, next of kin, devisees and legatees. The instrument dedicating land for a family cemetery, together with the authority, if any, of the heirs, next of kin, devisees and legatees of a deceased person, shall be filed in the office of the county clerk of each county in which such cemetery is to be situated. A fund created by will for the purpose of maintaining, im- proving and embellishing such a cemetery shall not exceed ten per centum of the clear value of the estate of the tes- tator in excess of his debts and liabilities, other than lega- cies. The directors shall, before entering on their duties, file in the office of the clerk of each county, in which such cemetery is situated, a written acceptance of their appoint- ment; and thereupon such directors and their successors shall be a corporation by the name expressed in the instru- ment dedicating such land. Such directors and their suc- cessors, before receiving any property, money or funds for improving, maintaining and embellishing the cemetery un- der their charge, shall execute to the surrogate of the county in which such real property is situated a bond with sureties approved by him, in a penalty of twice the princi- pal sum of the fund placed in their charge, conditioned for the faithful preservation and application thereof, according to the rules, directions or by-laws, prescribed in the instru- ment under which their appointment was made, and renew their bond or execute a new bond whenever required so to 230 MEMBERSHIP CORPORATIONS Law. do by such surrogate. At least once in each year, and oftener if required by the surrogate, they shall file with him their account of receipts and expenditures, on account of the fund in their hands, together with vouchers for all disburse- ments. Any person or persons may bequeath or transfer ‘to, and any such corporation may take, money or personal ‘property by will, deed or other transfer, upon trust, to hold and apply, or dispose of, the same for the purpose of main- taining, improving and embellishing any lot, plot or portion of such cemetery, either according to the discretion of the directors, or for such time and upon such terms and condi- tions, if any, as to the application, investment and reinvest- ment of the principal and income, and otherwise, as shall be stated in the instrument creating the trust, or agreed upon, but no such trust fund created by will shall exceed the ten per centum limit above mentioned, and the directors shall give security and account with respect to such money or personal property as hereinbefore provided. Source.—Formerly Mem. Corp. L. (L. 1895, ch. 559), § 57, as -am’d by L. 1901, ch. 390, and L. 1904, ch. 429. Revised from _L. 1854, ch. 112, §§ 7-9, as am’d by L. 1871, ch. 68. See generally notes to § 41, ante. See Code Civ. Pro. § 1395, as to exemption from execution of family burial ground and Tax Law, § 4, subds. 5 and 7, as to exemption from taxation. § 79. Lot owners in unincorporated cemeteries may de- ‘termine upon incorporating under this article. Not less than three owners of lots in an unincorporated cemetery may cause a notice to be posted in at least six conspicuous ‘places in the city, town or village in which such cemetery is located, and published once in each week for three suc- ‘cessive weeks in a newspaper, if any, published in such municipality, stating that at a time and place specified in such notice, a meeting of the owners of lots in such ceme- tery, shall be held to determine upon the question of incor- porating such cemetery, pursuant to this article. Source.—Formerly Mem. Corp. L. (L. 1895, ch. 559), § 61, added ‘by L. 1900, ch. 480. MEMBERSHIP CoRPoRATIONS Law. 231 § 80. Meeting to determine such question. Such meeting shall be held at a convenient place in the city, town or vil- lage in which such cemetery is located, not less than twenty- five nor more than thirty days after the first posting and publication of the notice of the meeting. At such meeting every owner of a lot in such cemetery, represented thereat in person or by proxy, shall be entitled to one vote for each lot owned by him. Any owner of a lot in such cemetery, may, by written proxy, duly acknowledged, designate a per- son to represent him at such meeting, and the person so designated shall upon the presentation of such proxy to the chairman of the meeting, have all the powers of a lot owner present thereat. The persons entitled to vote at such meet- ing shall select a chairman and secretary thereof, and shall determine by ballot the question of whether or not the owners of lots in such cemetery shall organize as a cor- poration, pursuant to this article. The ballots in favor of such proposition shall have the word “yes” thereon, and the ballots against shall have the word “no” thereon. Source—Formerly Mem. Corp. L. (L. 1895, ch. 559), § 62, added by L. 1900, ch. 480. § 81. Incorporation pursuant to meeting; conveyance of property to corporation. If a majority of the ballots are in favor of such proposition, the persons entitled to vote at such meeting shall select three owners of lots in such ceme- tery to incorporate in pursuance of this article and the pro- visions of this article shall be applicable to the formation and management of such corporation, except that three per- sons may incorporate, and the corporation shall not be re- quired to have more than three directors. Upon the forma- tion of such corporation in pursuance of this article, the owners of lots in such cemetery shall be members of the corporation, and the corporation shall become vested with the title to such unincorporated cemetery and the personal property connected therewith, subject to all the provisions of law, in relation to cemetery corporations. If, however, the title to such cemetery has prior to such incorporation 232 MEMBERSHIP CorPoRATIONS Law. vested in the town, pursuant to section three hundred and thirty-two of the town law, or section one of title seven of chapter eleven of part one of the revised statutes, the super- visor of such town shall on request of the directors of such corporation, execute to such corporation a deed of such cem- etery lands releasing all interest of the town therein, and thereafter the title of such cemetery shall be vested in the corporation. i _ Source.—Formerly Mem. Corp. L. (L. 1895, ch. 559), § 63, added by L. 1900, ch. 480. § 82. Sale of land of rural cemetery corporations. It shall be lawful for any cemetery association, duly incorporated under the act authorizing the incorporation of rural ceme- tery associations, to dispose of its land from which all bodies have been removed with the consent of the former owners of the lots in which such bodies had been interred, upon. proving to the satisfaction of the supreme court of the dis- trict where its land is located, that all bodies have been re- moved from said lots with the consent of the former owners thereof, and properly and decently interred in some other cemetery; that all said lots and parts of lots have been re- conveyed to said cemetery association and are not used for burial purposes; that burials have been prohibited in said cemetery; that all parties interested in said cemetery as trustees or creditors consent thereto, and that its debts and liabilities have been paid. The supreme court may, in its discretion, appoint a referee to take proof of the facts above stated. Upon being satisfied that such cemetery association -has complied with the requirements above stated, the court may make an order authorizing it to sell and dispose of its said land, ° Source.—L. 1897, ch. 538, § 1. § 83. Acquisition of land by rural cemetery corporations. It shall not be lawful for any rural cemetery corporation to hereafter acquire or take by deed, devise or otherwise, any land in any county within the state of New York, having a MEMBERSHIP CorPoRATIONS Law. 233 population of between one hundred and seventy-five thou- sand and two hundred thousand, according to the federal census of nineteen hundred, or set apart any ground for cemetery purposes therein, where there has already been set apart in any such county, five hundred acres of land for rural cemetery purposes, and the consent of the board of supervisors of any such county, shall not be granted where there has already been granted five hundred acres of land, or upwards, within such county, to rural cemetery corpora- tions. But nothing herein contained shall affect any lawful consent or grant hitherto made by the board of supervisors of any such county. Source.—L. 1902, ch. 73, §§ 1, 2. See §§ 62 and 65, ante. It is clearly within the police power of the State to restrict the use of land in crowded and growing communities where the water supply is endangered and the public health menaced by determining the amount of land which may be used for cemetery purposes, and this section is therefore constitutional. Palmer v. Hickory Grove Cemetery, 84 App. Div. 600 (1903); Peo. ex rel. ‘Oak Hill Cem. Ass’n v. Pratt, 129 N. Y. 68 (1891). Laurel Hill Cem. v. City of San Francisco, 216 U. S. 358 (1909); Went. v. Meth. Pro. Church, 80 Hun 266 aff’d on op. below 150 N. Y. 577. § 84. Streets or highways not to be laid out through cer- tain cemetery lands. So long as the lands of a rural ceme- tery corporation organized under the act entitled “An act authorizing the incorporation of rural cemetery associa- tions,” constituting chapter one hundred and thirty-three of the laws of eighteen hundred and forty-seven, and the acts amendatory thereof, shall remain dedicated to the purposes of a cemetery, no street, road, avenue or public thorough- fare shall be laid out through such cemetery, or any part of the lands held by such association for the purposes afore- said, without the consent of the trustees of such association, and of two-thirds of the lot owners thereof, and then only by special permission of the legislature of the state. Source.—L. 1904, ch. 237, § 1, in part. § 85. Record of inscriptions to be filed. Whenever, under any general or special law, any cemetery is abandoned or is 234 MEMBERSHIP CoRPoRATIONS Law. taken for a public use, the town board of the town in which such cemetery is located, shall cause to be made, at the time of the removal of the bodies interred therein, an exact and accurate copy of all inscriptions on each headstone, monu- ment, slab or marker erected on each lot or plot in such cemetery and shall cause the same to be duly certified and shall file one copy thereof in the office of the town or city clerk of the town or city in which such cemetery was lo- cated and one copy in the office of the state historian and chief of the division of history in the department of educa- tion at Albany. In addition to such inscriptions, such cer- tificate shall state the name and location of the cemetery so abandoned or taken for a public use, the cemetery in which each such body was so interred and the disposition of each such headstone, monument, slab or marker. New, added by L. rg12, ch. 151. The legislature also added other provisions to this law and inadvertently duplicated the above section number. § 85. Perpetual care of lots. Every corporation organized under or subject to the provisions of this article shall adopt a reasonable and uniform scale of prices to be charged for ‘the perpetual care of all lots in such cemetery, which shall be separate from and in addition to the amount fixed as the price at which such lots will be sold and conveyed, and upon the application of a prospective purchaser of any such lot and upon the payment by such purchaser of the purchase price and the amount fixed as a reasonable charge for the perpetual care of such lot, as herein provided, shall include in the deed of conveyance an agreement to perpetually care for such lot. Such corporation shall also, upon the applica- tion of an owner of any lot and upon the payment of the amount fiwed as a reasonable charge for the perpetual care of such lot, enter into an agreement with such owner to per- petually care for such lot. Such agreement shall be exe- cuted in the same manner as a deed is required to be exe- cuted and may be recorded as a deed of real property in the ‘office of the clerk of the county in which such cemetery is ‘located. On and after entering into such contract with such MEMBERSHIP CorporATions Law. 235 purchaser or owner it shall be the duty of such corporation at all times thereafter to properly care for such lot. New, added by L. 1912, ch. 315. The legislature also added the provisions immediately preceding the foregoing and inadvertently duplicated the section number. § 85. Cemeteries in Nassau county. A cemetery corpora- tion shall not hereafter be incorporated for the purpose of conducting its operations in the county of Nassau; nor shall it be lawful for any corporation, association or person, ex- cept as herein provided, hereafter to acquire or take by deed, devise or otherwise, or to set apart or use, any land in the said county for cemetery, burial or mausoleum purposes. Nothing herein contained shall prevent existing corpora- tions owning in the said county cemeteries in which burials have been made prior to January first, nineteen hundred and thirteen, from acquiring contiguous land for cemetery pur- poses in the manner now permitted by law; nor to prohibit the dedication or use of land within the said county for a family cemetery as provided in section seventy-eight of this article. New, added by L. 1913, ch. 139. Disregarding the fact that the legislature of 1912 had previ- ously added two sections to this law, each numbered “85,” the legislature of 1913 added the above new section with the same number, so that there are now three different sections numbered “85.” ARTICLE 5 Fire Corporations ‘SECTION I00. Certificate of incorporation. 101. Powers. 102. Fire, hose and hook and ladder companies may take by will. 103. Fire corporation in unincorporated villages; mal take property by will. 104. Duty of trustees, directors or managers to file report. 105. General powers conferred. § 100. Certificate of incorporation. Ten or more persons may become a fire, hose, protective or hook and ladder cor- poration by making, acknowledging and filing a certificate, 236 MEMBERSHIP CorporATIoNS Law. stating the particular object for which the corporation is to be formed; the name of the proposed corporation ; the city, village or town in which it proposes to act; the number of directors; and the names and places of residence of the per- sons to be directors until its first annual meeting. Such certificate shall not be filed without the approval in- dorsed thereupon, or annexed thereto, of a justice of the supreme court, nor unless there is annexed thereto a certi- fied copy of a resolution of the board of trustees of the vil- lage, or the approval of the mayor of the city, or, if not within a village or city, a resolution of the town board of the town in which the corporation proposes to act, consent- ing to its incorporation. On filing such certificate, in pursuance of law, the signers thereof, their associates and successors, shall be a corpora- tion in accordance with the provisions of such certificate. Such corporations, formed in unincorporated villages, by their corporate name, shall, in law, be capable of taking, re- ceiving, purchasing and holding real estate for the purposes of their incorporation, and for no other purpose, to an amount not exceeding the sum of thirty thousand dollars in: value, and personal estate for like purposes to an amount | not exceeding the sum of fifty thousand dollars in value. Source—Formerly Mem. Corp. L. (L. 1895, ch. 559), § 65, also L. 1887, ch. 315. Revised from L. 1873, ch. 397, § 1, as am’d by L. 1890, ch. 27, and § 2. For form of certificate of incorporation under this section see Forms Nos. 64 and 65 post. Cross Reference. For provisions generally applicable to incorporation, see notes under Section 41, ante. The limitation upon the right to take and hold real property contained in the above section must be read in connection with Gen. Corp. Isaw, Sec. 12, ante. § ror. Powers. A fire, hose, protective or a hook and lad- der corporation, incorporated under this article or under a law repealed by this chapter, shall only engage in such busi- ness as properly belongs to a fire, hose, protective or hook and ladder corporation, in the city, village or town named MEMBERSHIP Corporations Law. 237 in its certificate. In participating in the prevention and ex- tinguishment of fires, such corporation shall be under the control of the city or village authorities having by law, con- trol over the prevention or extinguishment of fires therein. Source.—Formerly Mem. Corp. L. (L. 1895, ch. 559), § 66. Re- vised from L. 1873, ch. 397, § 2. § 102. Fire, hose and hook and ladder companies may take by will. Any corporation formed under chapter three hundred and ninety-seven of the laws of eighteen hundred and seventy-three may take, hold or receive any property, real or personal, by virtue of any devise or bequest con- tained in any last will and testament; subject to the limita- tions provided in section twenty of the decedent estate law. Source.—L. 1873, ch. 397, § 5, in part. L. 1873, Chap. 397, referred to in the above section was an act for the incorporation of fire, hose and hook and ladder companies. Section 20 of the Decedent Estate Law was repealed by L. 1911, Chap. 857, and therefore the limitations formerly contained in that section upon the right of a testator to bequeath and devise have been removed. See discussion under Mempership Corp. Law, Sec. 18, ante. Cross Reference. For general powers, see also, Gen. Corp. Law, Sections 10, 11. § 103. Fire corporation in unincorporated villages; may take property by will. Any corporation formed under chap- ter three hundred and fifteen of the laws of eighteen hun- dred and eighty-seven, may take, receive or hold any prop- erty, real or personal, by virtue of any devise or bequest contained in any last will and testament, but not to increase the value of its property in excess of the amount fixed by section one hundred of this article; subject to the limita- tions provided in section twenty of the decedent estate law. Source.—L. 1887, ch. 315, § 5, in part. L. 1887, Chap. 315, referred to in the above section was an act for the incorporation of fire departments, and of fire, hose and hook and ladder companies in unincorporated villages. Section 20 of the Decedent Estate Law was repealed by L. 1911, Chap. 857, and therefore the limitations formerly contained in that section upon the right of a testator to bequeath and devise have 238 MeEmBeERsHIP Corporations Law. been removed. See discussion under Membership Corp. Law, Sec. 18, ante. The limitation contained in Section 100, supra, and referred to in this section must be read in connection with Gen. Corp. Law, Sec. 12, ante. § 104. Duty of trustees, directors or managers to file re- port. It shall be the duty of the trustees, directors or man- agers of all corporations formed under this article in unin- corporated villages, or a majority of them, on or before the fifteenth day of January in each year, to make and file in the county clerk’s office, where the certificate of incorporation is filed, a certificate under their hands, stating the names of the trustees, directors or managers and officers of such cor- poration, with an inventory of the property and effects and liabilities thereof, with an affidavit of said trustees, directors or managers, or a majority of them, of the truth of such cer- tificate and inventory ; and also a like affidavit that such cor- poration has not been engaged, directly or indirectly, in any other business than such as is set forth in the certificate of incorporation. Source.—L. 1887, ch. 315, § 7, in part. § 105. General powers conferred. Every corporation formed under this article shall possess the general powers conferred by and be subject to the provisions and restric- tions of the generai corporation law; and every active fire- man who shall be a member of any department or company organized under the provisions of this article in unincor- porated villages, shall be entitled to such exemptions as were provided by chapter two hundred and ninety-one of the laws of eighteen hundred and seventy, entitled “An act for the incorporation of villages,’ and acts amendatory thereof. @ Source.—L. 1887, ch. 315, § 8, as am’d by L. 1895, ch. 74 L. 1870, Chap. 291, above referred to, is now the village law L. 1909, Chap. 64. Section 209 thereof provides: § 209. General exemptions of firemen. A _ full term of service in a fire department is five successive years. A per- _ son who has served in a fire department of a village, after becoming eighteen years of age, shall be entitled to a certifi- MempBersuip Corporations Law. 239 cate of such service, signed by the president, and under the corporate seal, or by the chief engineer and the secretary of the fire department, under the seal of the department, or by a majority of the members of the board of fire commissioners in a village in which separate fire commissioners are appointed. Such certificate shall be presumptive evidence of the facts stated therein. A member of a fire department who removes from the vil- lage shall be allowed, as part of a full term, the time he has served continuously as fireman therein, if, within three months thereafter, he becomes a member of the fire department of another village or city; and, upon completing a full term, shall be entitled to all the privileges and exemptions thereby se- cured to firemen. The Military Law (L. 1909, Chap. 41), § 1, provides: Section 1. Persons subject to military duty; exemptions. All able-bodied male citizens, between the ages of eighteen and forty-five years, who are residents of this state, shall con- stitute the militia, subject to the following exemptions: + *¢ + &£ * FR KF KH 4. The members of any regularly organized fire or police de- partment in any city, village or town, and exempt firemen who have served their full term in any fire company, but no member of the active militia shall be relieved from duty therein because of his joining any such fire company or department. The Judiciary Law (L. 1909, Chap. 35), § 546, provides: § 546. Exemption from jury duty. Each of the following persons, although qualified, is entitled to exemption from service, as a trial juror, upon his claiming’exemption there- from: * * ¢ & * e Kk OK OK * 13. A member of a fire company, or fire department, duly organized according to the laws of the state, and performing his duties therein; or a person who, after faithfully serving five successive years in such a fire company, or fire depart- ment, has been honorably discharged therefrom. The Civil Service Law (L. 1909, Chap. 15), § 22, am’d by L. 1910, Chap. 264, provides: § 22. Power of removal limited. Every person whose rights may be in any way prejudiced contrary to any of the provi- sions of this section shall be entitled to a writ of mandamus to remedy the wrong. No person holding a position by ap- pointment or employment in the state of New York or in the several cities, counties, towns or villages thereof who is an honorably discharged soldier, sailor or marine, having served as such in the Union army or navy during the war of the rebellion, or who is an honorably discharged soldier, sailor or marine, having served as such in the volunteer army or navy of the United States during the Spanish war or who shall ° 240 MEMBERSHIP CorPoRATIONS Law. have served the term required by law in the volunteer fire de- partment of any city, town or village in the state, or who shall have been a member thereof at the time of the disbandment of such volunteer fire department shall be removed from such Position except for incompetency or misconduct shown after a hearing upon due notice upon stated charges, and with the right to such employee or appointee to a review by a writ of certiorari. If the position so held by any such honorably dis- charged soldier, sailor or marine or volunteer fireman shall become unnecessary or be abolished for reasons of economy or otherwise, the said honorably discharged soldier, sailor or marine or volunteer fireman holding the same shall not be discharged from the public service, but shall be transferred to any branch of the said service for duty in such position as he may be fitted to fill, receiving the same compensation therefor, and it is hereby made the duty of all persons clothed with power of appointment to make such transfer effective. The burden of proving incompetency or misconduct shall be upon the person alleging the same. * For further provisions as to exemptions see, also, the General Municipal Law (Laws 1909, Chap. 29), § 200, et seq. and Laws 1910, Chap. 119, adding § 200. ARTICLE 6 Corporations for the Prevention of Cruelty Section 120. Certificate of incorporation. 121. Prohibition of new corporations in certain counties, 122, Special powers. 123. Change of location of office. § 120. Certificate of incorporation. Five or more persons may become a corporation for the prevention of cruelty to children, or the prevention of cruelty to animals, by mak- ing, acknowledging and filing a certificate, stating the par- ticular objects for which the corporation is to be formed; the name of the proposed corporation ; the county in which its operations are to be conducted; the town, village or city in which its principal office is to be located; the number of its directors not less than five nor more than thirty; the names and places of residence of the persons to be its di- rectors until its first annual meeting; and the time for hold- ing such annual meeting. Such certificate shall not be filed unless the written consent and approbation thereof of a MEMBERSHIP CorroraTions Law. 241 justice of the supreme court of the judicial district in which the place of business or principal office of such corporation shall be located be first indorsed thereon; nor unless there is annexed thereto the written certificate of the New York society for the prevention of cruelty to children, if such be the object specified, and of the American society for the pre- vention of cruelty to animals, if such be the object so speci- fied, approving such incorporation. If the approval of either of such societies is not given within thirty days after application therefor, the persons proposing to form such corporation may apply to such justice for his approval, upon eight days’ notice of the time and place of application to the society refusing approval, which shall be entitled to appear and be heard, and the granting or refusal of the approval by the justice shall thereupon be discretionary with him. On filing such certificate in pursuance of law, the signers thereof, their associates and successors shall be a corpora- tion in accordance with the provisions of such certificate. Sources.—Formerly Mem. Corp. L. (L. 1895, ch. 559), § 70. Re- vised from L. 1875, ch. 130, § 1, am’d by L. 1894, ch. 105, and § 2; L. 1888, ch. 490, § 1, am’d by L. 1892, ch. 291, and § 2. For form of certificate of incorporation under the above section, see Form No. 66, post. Cross Reference. For provisions generally applicable to incorporation, see the notes under Section 41, ante. A corporation organized under L. 1875, Chap. 30 (now this ar- ticle), is not a charitable institution within the scope of the con- stitutional provision giving the state board of charities the right of visitation over charitable institutions. Peo. ex rel. State Board of Charities v. N. Y. Soc. Prev. Cruelty etc., 161 N. Y. 233 (1900) reversing 42 App. Div. 83, and see op. denying reargument 162 N. Y. 429 (1900). A corporation formed hereunder administers no charity in a legal sense, as it receives no public money for charitable uses and exists for the sole purpose of enforcing the criminal law. (id.) Consolidation. See Section 7, ante, for limitations upon the right of this class of corporations to consolidate. Liability of Directors. Directors of corporations organized under this section are not individually liable for the corporate debts. Mem. Corp. L., Sec. 11. 242 MEMBERSHIP CoRPORATIONS Law. Incorporation of Societies. The New York Society for the Prevention of Cruelty to Children was organized under Laws of 1875, Chap. 130, and is not subject to visitation by the State Board of Charities. Peo. ex rel. State Board of Charities v. N. Y. Soc. Prev. C. C., 161 N. Y. 233 (1900). The American Society for the Prevention of Cruelty to Animals was incorporated by L. 1866, Chap. 469. Powers. Powers of corporations of this character to make complaints, receive fines, etc., discussed in Peo. ex rel. Balch v. Strickland, Dan N. C. 473 (1884); Yonkers Soc. v. Yonkers, 44 Hun 338 (1887). Licensing of Dogs; Second Class Cities. Chapter 448, Laws of 1896, authorizing the licensing of dogs by the American Society for Prevention of Cruelty to Animals upon payment of fees to such society, in second class cities, was held unconstitutional upon the grounds, (1) that the license fees were public moneys within the meaning of the constitution and their appropriation to a private corporation was a gift of public moneys in aid of such corporation; and (2) that it granted an exclusive privilege and immunity forbidden by the constitution to the society to harbor dogs without paying fees. Fox v. Mohawk & Hudson Humane Soc., 165 N. Y. 517 (1901). By L. 1902, Chap. 294 (now Sec. Class Cities Law, Art. XV, ee Chap. 55), the power to grant licenses was vested in city officials. Licensing of Dogs; New York City. After the foregoing decision in 1901, Laws of 1894, Chap. 115, as amended by Laws of 1895, Chap. 412, which contained substan- tially similar provisions with respect to granting of licenses within the limits of cities of over 800,000 population, was amended by Laws of 1902, Chap. 495, with the evident intent of obviating the objection raised in this decision so as to read as follows: Sec. 8. “Society may carry out act; fees. The American Society for the Prevention of Cruelty to Animals is hereby empowered and authorized to carry out the provisions of this act, and the said society is further authorized to issue the licenses and re- newals, and to collect the fees therefor, as herein prescribed; and the fees so collected shall be applied by said socity in defraying the cost of carrying out the provisions of this act and maintaining a shelter for lost, strayed or homeless animals; and any fees so collected and not required in carrying out the provisions of this act shall be retained by the said society as compensation for en- forcing the provisions of title sixteen of the penal code and such other statutes of the state as relate to the humane work in which the said society is engaged.” This act was held constitutional in Peo. ex. rel. Westbay v. Delaney, 73 Misc. § (1911), aff'd on op. below 146 App. Div. 957. ‘For other provisions as to licensing of dogs see County Law ‘CL. 1909, Chap. 16), §§ 110-136. MEMBERSHIP CorPoraTIONS Law. 243 § 121. Prohibition of new corporations in certain coun- ties. A corporation for the prevention of cruelty to animals shall not hereafter be incorporated for the purpose of con- ducting its operations in the counties of New York, Kings, Queens, Richmond, Suffolk, Westchester, outside of the city of Yonkers, or the county of Rensselaer, or in. any. other county if thereby there would be two or more such corporations formed for the purpose of conducting opera- tions in such county. But any corporation for the preven- tion of cruelty to children or to animals or to both may exercise its powers and conduct the like operations in any adjacent county in which no such corporation for such pur- pose exists, and may continue to do so until the establish- ment of such a corporation therein. In certificates of in- corporation organizing additional corporations under this article in the city of Yonkers, such city must be designated as the place in which any such corporation is to conduct its operations instead of the county of Westchester, and its operations shall be confined to such city. Thus am’d by L. 1911, ch. 623. Source.—Formerly Mem. Corp. L. (L. 1895, ch. 559), § 71, am’d by L. 1896, ch. 469, and L. 1902, ch. 169. Revised from L. 1888, ch. 490, am’d by L. 1892, ch. 291. § 122. Special powers. A corporation formed for the purpose of preventing cruelty to children may prefer a com- plaint before any court, tribunal or magistrate having juris- diction, for the violation of any law relating to or affecting children, and may aid in presenting the law and facts to such court, tribunal or magistrate in any proceeding therein. A corporation formed for the purpose of preventing cruelty to animals may prefer a complaint before any court, tribunal or magistrate having jurisdiction, for the violation of any law relating to or affecting the prevention of cruelty to animals, and may aid in presenting the law and facts to such court, tribunal or magistrate in any proceeding therein. A corporation for the prevention of cruelty to children 244 MEMBERSHIP CorPoraTIONS Law. may be appointed guardian of the person of a minor child during its minority by a court of record, or a judge thereof, : and may receive and retain any child at its own expense on’ commitment by a court or magistrate. All magistrates and peace officers shall aid such a cor-: poration, its officers, agents and members in the enforce-: ment of laws relating to or affecting children, and for the: prevention of cruelty to animals. Sources.—Formerly Mem. Corp. L. (L. 1895, ch. 559), § 72. Re- vised from L. 1875, ch. 130, § 3, as am’d by L. 1886, ch. 30, and § 4; L. 1888, ch. 490, § 4, in part. The president of the society may make the complaint without formal action being taken by the society. Peo. ex rel. Balch v- Strickland, 13 Abb. N. C. 473 (1884); Yonkers Society v. Yonkers, 44 Hun. 338 (1887). Penal Provisions. , See Penal Law, Section 401, post, as to payment to society for | prevention of cruelty to children of penalties collected. For penal provisions as to prevention of cruelty to children, Penal Law, Secs. 480-493, and as to prevention of cruelty to ani- mals, Secs. 180-196. Consent for Minor to Appear in Public. Notice of an application to the municipal authorities for con- sent to the employment of a minor to appear in a musical or theatrical capacity in public must be given to the incorporated society for the prevention of cruelty to children, if there be one within the County. Penal Law, Section 485, last paragraph. § 123. Change of location of office. Any membership corporation for the prevention of cruelty to animals now existing or hereafter organized under the laws of this state, may at any time change the location of its principal office from the town, village or city named in its certificate of incorporation to any other town, village or city in the same county, provided such change has been authorized by a vote of the members of said corporation at a special meet- ing of the members thereof, called for that purpose. When such change shall be authorized by the members, as herein provided, the president and secretary and a majority of the ‘directors of such corporation shall sign a certificate stating the name of such corporation, the town, village, city and ‘ MEMBERSHIP CoRPORATIONS Law. 245 county where its principal office was originally located and ‘the town, village or city in said county to which it is de- sired to change the location of its principal office, and that ‘such change has been authorized, as herein provided, and the name of the directors of said corporation and their re- spective places of residence, which certificate shall be veri- ‘fied by the oaths of all persons signing the same, and when so signed and verified, it shall be filed in the office of the secretary of state and a duplicate thereof filed in the office of the clerk of the county in which said principal office is ‘located, and thereupon the location of the principal office of such corporation shall be changed as stated in said cer- tificate. Source.—Formerly Mem. Corp. L. (L. 1895, ch. 559), § 73, added by L. 1905, ch. 271. ARTICLE 7 Hospital Corporations SEcTION 130. Certificate of incorporation. § 130. Certificate of incorporation. Five or more persons may become a corporation for the purpose of erecting, establishing or maintaining a hospital, infirmary, dispensary, or home for invalids, aged or indigent persons, by making, acknowledging, and filing a certificate, stating the particu- lar object for which the corporation is to be formed; the name of the proposed corporation; the town, village or city in which its principal office is to be located; the num- ber of directors, not less than three nor more than forty- eight; the names and places of residence of the persons to be its directors until its first annual meeting, and the time for holding its annual meetings. Such certificate may also specify the qualification of members of the corporation with respect to their adherence or non-adherence to a particular school or theory of medical or surgical treatment; and the systems of medical practice or treatment to be used or applied in such hospitals, infirmary, dispensary or home. 246 MEMBERSHIP CorPORATIONS Law. Such certificate shall not be filed without the written ap- proval indorsed thereupon, or annexed thereto, of the state board of charities and of a justice of the supreme court of the district in which the principal office or place of business of such corporation shall be located. On filing such certificate, in pursuance of law, the signers thereof, their associates and successors, shall be a corpora- tion, in accordance with the provisons of such certificate. Source—Formerly Mem. Corp. L. (L. 1895, ch. 559), § 80, as am’d by L. 1900, ch. 404. Revised from L. 1889, ch. 95, § 1, as am’d by L. 18094, ch. 256. For form of certificate of incorporation under the above section, see Form No. 67, post. For provisions generally applicable to incorporation, and Rules of State Board of Charities, see notes under § 41, ante. As to maternity hospitals, see provisions of Penal Law, § 482. Where the certificate of incorporation of a hospital committed the management and control to the board of directors they may adopt any regulation for the government of the hospital which is reasonable and consistent with the general purposes of the corporation. A by-law providing that only physicians who com- ply with the code of certain medical societies should practice in the hospital is valid. Peo. ex rel. Replogle v. Burnham Hosp,, 71 Ill. App. 246 (1896). A physician whose only interest in the hospital is the hope of gain and profits to arise from the practice of his profession therein has no standing to complain that the government is such that he does not profit from its existence as he might if other rules or modes were adopted for the management. Peo. ex rel. Replogle v. Burnham Hosp., 71 Ill. App. 246 (1896). An act prohibiting the establishment or maintenance of addi- tional hospitals in built up portions of cities is within the police power of the state and not in violation of the Fourteenth Amend- ment of the United States Constitution. Commonwealth v. Hos- pital, 198 Pa. St. 270 (1901). A proposed corporation whose purposes are stated to be “the creation, establishment and maintenance of a hospital or hospitals, dispensary, or dispensaries, for the treatment of persons affected with deformities, and in particular congenital deformities, by the Lorenz or bloodless method; the employment of all lawful means for the raising of funds for the support or maintenance of said institution and the transaction of such other business as may be necessary or desirable in connection therewith,” is subject to the provisions of the State Charities Act and it must be incor- porated under the above section (formerly Sec. 80) and must ob- tain the approval of the State Board of Charities and of a justice of the Supreme Court. It cannot be incorporated under the Busi- MempersHip Corporations Law. 247 ness Corp. Law. Opinion of Atty. Gen., Feb’y 9, 1903. Report of 1903, page 251. A proposed corporation whose purposes are stated to be “the procuring of healthful country surroundings for persons recover- ing from diseases or in infirm health; the establishment and main- tenance of an infirmary or sanitarium for the acceptance of con- valescents and persons suffering from temporary physical debility,” is not an infirmary, but a home for convalescents and may be in- corporated under Article 3, Sec. 40, and need not be incorporated under the above section. Opinion of Atty. Gen. March 22, 1905. Report of 1905, page 274. Liability for Negligence. A charitable institution is liable for the negligence of its ser- vants resulting in injury to those who are not patients or bene- ficiaries of the institution. Kellogg v. Church Charity Foundation, 128 App. Div. 214 (1908); Hordern v. Salvation Army, 199 N. Y. 233 (1910), citing many cases and discussing the basis of the lia- bility. Hospital Physicians as Witnesses. Code of Civ. Pro. § 837, provides as follows with respect to subpoenaing physicians from hospitals: * * * Jn an action for the recovery of damages for per- sonal injury the testimony of a physician or surgeon, or of a professional or registered nurse attached to any hospital, dis- pensary or other charitable institution as to information which he acquired in attending a patient in a professional capacity, at such hospital, dispensary or other charitable in- stitution shall be taken before a referee appointed by a judge of the court in which such action is pending; provided, how- ever, that any judge of such court at any time in his dis- cretion may, notwithstanding such deposition, order that a subpcena issue for the attendance and examination of such physician or surgeon or professional or registered nurse, upon the trial of the action. In such case a copy of the order shall be served, together with the subpcena. Sections eight hundred and seventy-two, eight hundred and seventy-three, eight hun- dred and seventy-four, eight hundred and seventy-five, eight hundred and seventy-six, eight hundred and_ seventy-nine, eight hundred and eighty, eight hundred and eighty-four and eight hundred and eighty-six of this code apply to the exami- nation of a physician or surgeon or a professional or regis- tered nurse, as prescribed in this section. Practice of Medicine Regulated. Section 174 of the Public Health Law (L. 1909, Chap. 49) pro- viding that “any person not a registered physician who shall ad- vertise to practice medicine shall be guilty of a misdemeanor” does not apply to a corporation formed under this section. An institu- tion of this character possessing legislative authority to practice 248 MEMBERSHIP CorPoRATIONS Law. medicine by means of its staff of registered physicians and sur- geons comes under the direct sanction of the law in so doing and by well settled rules of statutory construction is exempted from the operation of the penal statute. Peo. v. Woodbury Derm. Inst., 192 N. Y. 454 (1908). This section is in no way abrogated or. modified by public health law, section 319, as amended by Laws of 1900, Chap. 171, the ef- fect of the latter law being to take from the supervisors of the county and town board the power to disapprove of the location of a proposed hospital or camp and lodging that power in other officials therein specified. Opinion of Atty. Gen., July 8, 1909, Re- port of 1909, page 518. Exemptions from Taxation. For exemptions from taxation see Tax Law, Section 4, subdiv. 7, and Tax Law, Section 221, post. Location of Hospitals. The Village Law (L. 1909, Chap. 64), Sec. 343, provides: § 343. Location of hospitals and pest-houses. A building or tent in a village shall not be used, occupied or maintained as a hospital or pest-house for the reception and care of public or private patients without the consent of the board of health of such village. State Board of Charities. The general powers of the State Board of Charities relative to inspection and visitation of hospitals and charitable institutions generally are to be found in the State Charities Law (L. 1909, Chap. 57), §§ 9 and 10, post. As to obtaining approval of State Board of Charities see note to § 41, ante. ARTICLE 8 Christian Associations Section 140. Certificate of incorporation. 141. Directors and trustees. 142. Dissolution. 143. Additional directors; trustees. § 140. Certificate of incorporation. Twenty or more men may become a Young men’s christian association, and twenty or more women may become a Young women’s christian association, for the purposes of improving the spiritual, mental, social and physical condition of young men, or of young women, as the case may be, by making, acknowledging and filing a certificate stating the particu- MEMBERSHIP CorporaTIONS Law. 249 lar objects for which the corporation is to be formed and the qualifications required for active membership; which objects and qualifications in the case of Young men’s chris- tian associations shall conform to the general rules and regulations of and shall be approved by the state executive committee of the Young men’s christian associations of this state by the certificate of its chairman indorsed thereon; the name of the proposed corporation; the town, village or city in which its principal office is to be located; the number of directors, not less than three nor more than thirty; the names and places of residence of the persons to be its directors until the first annual meeting; the times for holding its annual meetings; and the names of six trus- tees, each of whom shall be a member of some Protestant evangelical denomination, and not more than two of whom shall be members of any one denomination, and shall be divided into three classes to hold office for one, two and three years respectively or until their successors are elected by the board of directors. Such certificate shall not be filed without the approval of a justice of the supreme court indorsed thereupon or annexed thereto. On filing such cer- tificate, in pursuance of law, the signers thereof, their asso- ciates and successors shall be a corporation in accordance with the provisions of such certificate. Any Young men’s christian association incorporated prior to the first day of January, nineteen hundred and eight, may amend its cer- tificate of incorporation so as to provide for the division of its trustees into three classes to hold office for one, two and three years respectively or until their successors are elected, and for their election by the board of directors of such association. Such amendment shall be made by filing in the offices where the original certificate of incorporation was filed a certificate stating the date of the incorporation of such association; the names of the trustees thereof; that the board of directors, by a vote of a majority of their number, at a meeting held within sixty days prior to the making of such certificate, divided such trustees into three classes to hold office for one, two and three years respec- 250 Mempersuip Corporations Law. tively from the date of such meeting; the names of the trustees in each class; and the date of the expiration of the term of office of each class of trustees; and that the board of directors, by a like vote, resolved that the successors to such trustees should be elected by such board. The said certificate shall be executed under the seal of the corpora- tion, and shall be acknowledged or proved, in the same manner as a deed to be recorded, by the president and sec- retary, or the persons exercising for the time being, the duties of such office, who shall also make oath to the truth of the statements therein contained, and upon the filing thereof the terms of office of such trustees shall expire as therein stated, and their successors shall thereafter be elected by the board of directors of such association. Sources.—Formerly Mem. Corp. L. (L. 1895, ch. 559), § 90, as am’d by L. 1900, ch. 541; L. 1905, ch. 320; L. 1908, ch. 36. Re- vised from L. 1887, ch. 501, §§ 1-2, as am’d by L. 1890, ch. 104, and § 4; L. 1891, ch. 167, §§ 1-2. For form of certificate of incorporation under the above section, see Form No. 68, post. For provisions generally applicable to incorporation see the notes under section 41, ante. See § 10, ante, as to exception relative to Young Men’s Christian Association designating directors to be trustees of corporate prop- erty. Exemptions from Taxation. For exemptions from taxation, see Tax Law, Sec. 4, subdiv. 7, and Tax Law, Sec. 221, post. § 141. Directors and trustees. The trustees of such a corporation, with the president of the corporation, shall be a board of trustees thereof, and hold and control the real property of the corporation and all gifts and bequests of money to be held in trust. They shall pay the income of such property to the treasurer of the corporation so long as the income shall be expended by the directors thereof for the purposes for which it was formed. The real property of such corporation shall not be liable for any debt or obligation contracted without the approval of the board of trustees. In all proceedings for the purchase, sale, mortgage and MEMBERSHIP CorPorATIONS Law. ‘251 lease of real property, the board of trustees of such a cor- poration shall act as the board of directors thereof. The directors of such corporation shall have the man- agement and control of its property and affairs, except as such management and control is given by law to the board of trustees thereof. Source.—Formerly Mem. Corp. L. (L. 1895, ch. 559), § g1. Re- vised from L. 1887, ch. sor, § 4, 5, and § 6, as added by L. 1889, ch. 33; L. 1891, ch. 167, § 6. § 142. Dissolution. Whenever any association formed under the provisions of this article shall cease to carry out the objects set forth in its certificate of incorporation, ac- cording to the general rules and regulations of the state executive committee of Young men’s christian associations of this state, or shall abandon or discontinue for one year the use of any of its property for such objects, then upon the application of a majority of the managers or directors of such association upon fourteen days’ notice to said state executive committee by service thereof upon its chairman and secretary or in the event of their failure to act, upon the application of the said state executive committee of ‘Young men’s christian associations of the state of New York, by petition signed by a majority of the members of the said state executive committee and verified by its chair- man, to be made upon fourteen days’ notice to be given to such association by service thereof upon its president, or any director or manager thereof, and upon one of the trus- tees thereof, and upon notice to the attorney-general of the state of New York, the supreme court, upon satisfactory proof by affidavit or otherwise of the fact of such failure or abandonment, must make a final order dissolving such corporation, and upon the entry thereof the corporation shall be dissolved, and upon such dissolution the state ex- ecutive committee of the Young men’s christian associa- tions of the state may take possession of the property be- longing to such association and manage the same, or may if authorized by the concurring vote of two-thirds of its members sell or lease the same and apply the proceeds 252 MEMBERSHIP CorPoRATIONS Law. thereof after the payment of the debts, if any, of the asso- ciation so dissolved, to any like purposes for which the association was organized; and it shall not divert such ‘property to any other purpose. Source.—Formerly Mem. Corp. L. (L. 1895, ch. 559), § 92, as added by L. 1900, ch. 541 and am’d by L. 1905, ch. 320. The foregoing provisions for voluntary dissolution of Christian Associations prevail over those contained in Article nine of the ota Corporation .Law, pursuant to section 321 of the latter aw. § 143. Additional directors; trustees. It shall be lawful for any Young men’s christian association incorporated prior to the taking effect of chapter five hundred and one of the laws of eighteen hundred and eighty-seven, entitled “An act for the incorporation of Young men’s christian associations,” at any annual meeting or any special meet- ing called as provided by the by-laws of said association, to elect additional directors so that the total number of its directors shall be not more than thirty, and in addition to said directors to elect six trustees, each of whom shall be a member of some Protestant evangelical denomination, and ‘not more than two of whom shall be members of any one denomination, and shall be divided into three classes to hold office for one, two and three years respectively or until their successors are elected by the board of directors. The trus- tees so elected, and their successors, shall be a board of trustees thereof and hold and control the real property of the corporation and all gifts and bequests of money to be held in trust. They shall pay the income of such property to the treasurer of the corporation so long as the income shall be expended by the directors thereof for the purposes for which it was formed. The real property of such cor- poration shall not be liable for any debt or obligation con- tracted after the creation of such board of trustees without the approval of said board of trustees. In all proceedings for the purchase, sale, mortgage and lease of real property, the board of trustees of such corporation shall act as the board of directors thereof. After the creation of said board of trustees the directors of such corporation shall have the MEMBERSHIP CorporATIONS Law. 253 management and control of its property and affairs, except as such management and control is given by law to the board of trustees thereof. Source—Formerly Mem. Corp. L. (L. 1895, ch. 559), § 93, as added by L. 1901, ch. 469, and am’d by L. 1905, ch. 320. § 144. Incorporation of county committees. Any ten or more men, resident in any county of this state, appointed by the state executive committee of Young Men’s Christian Associations of the state of New York, to act as the county committee of Young Men’s Christian Associations for such county, which appointment shall be evidenced by a cer- tificate to that effect under the hand of the chairman of such state executive committee, and duly acknowledged by him, and filed in the office of the secretary of state with the certificate of incorporation hereinafter provided. for, may become a corporation for the purpose of improving the spiritual, mental, social and physical condition of young men, by making, acknowledging and filing a certificate stat- ing the particular objects for which the corporation is to be formed; which objects shall conform to the general rules and regulations of, and shall be approved by, the state ex- ecutive committee of the Young Men’s Christian Associa- tions of this state, by the certificate of its chairman en- dorsed thereon; the name of the proposed corporation which shall be “The County Committee of the Young Men’s Christian Associations of ———————— County, New York” (the blank space being filled by the name of the county in which the incorporators reside) ; the town, village or city in which its principal office is to be located; the names and places of residence of the persons to be its officers until the first annual election; the names of six trustees, each of whom shall be a member of some Protestant evangelical denomination, and not more than two of whom shall be members of any one denomination, and shall be divided into three classes to hold office for one, two and three years respectively, or until their successors are elected by a ma- jority vote of all the members of such corporation. Such 254 MemsBersHip Corporations Law. certificate shall not be filed without the approval of a jus- tice of the supreme court endorsed thereon, or annexed. thereto. On filing such certificate in pursuance of law, the: signers thereof, and their successors, shall be a corporation in accordance with the provisions of such certificate. The management and control of the property and affairs of such corporation shall be vested in its members and their successors in office, except that the powers and duties of the trustees thereof shall be those specified in section one: hundred and forty-one of this article; and the successors of such members shall be elected annually at a meeting of the Young Men’s Christian Associations of the county for which such committee has been appointed, at which meeting each association may be represented by one dele-- gate for each ten active members of such association. A plurality vote of the delegates present, and voting at such meeting, shall be sufficient to elect. If any vacancy in the: membership of such corporation shall occur during the in- terim between the regular elections, it may be filled by the: remaining members. The officers of the corporation shall consist of a chair-. man, treasurer and secretary, and such other officers as the members may decide; and shall be elected annually by such members from their own number. New, added by L. 1911, ch. 207. For provisions generally applicable to incorporation see notes. to § 41, ante. ARTICLE 9 Bar Associations Secrion 150. Certificate of incorporation. 158. Certain bar associations may take by will. § 150. Certificate of incorporation. Nine or more attor-. neys or counselors of the supreme court of this state, in active practice, and residing or having their offices in the same county, or in the same judicial district, may become. a bar association for the purposes of cultivating the science MemMbBersHIP Corporations Law. 255 of jurisprudence, promoting reforms in the law, facilitating the administration of justice, elevating the standard of in- tegrity, honor and courtesy in the legal profession, and cherishing the spirit of brotherhood among the members thereof, by making, acknowledging and filing a certificate stating the particular objects for which the corporation is to be formed; the name of the proposed corporation; the county, or judicial district, in which its operations are to be conducted; the town, village or city in which its prin- cipal office is to be located; the number of its directors, not less than three nor more than thirty; the names and places of residence of the persons to be its directors until the first annual meeting; and the times for holding its annual meet- ings. Ifthe attorneys or counselors organizing an associa- tion hereunder all reside in the same county, the operations of the association shall be conducted in the county in which they reside. Such certificates shall not be filed without the approval, indorsed thereupon or annexed thereto, of a justice of the supreme court. On filing such certificate, in pursuance of law, the signers thereof, their associates and successors shall be a corpora- tion in accordance with the provisions of such certificate, but no person shall be eligible to membership of such a corporation unless he have the same qualifications as the persons authorized to sign the certificate of incorporation thereof. Source—Formerly Mem. Corp. L. (L. 1895, ch. 559), § 100, as am’d by L. 1907, ch. 491. Revised from L. 1887, ch. 317. For form of certificate under the above section, see Form No. 69, post. Cross References. For provisions generally applicable to incorporation, see note under Sec. 41, ante. / For exemption from taxation, see Tax Law, Sec. 4, subd. 7, post. § 151. Certain bar associations may take by will. Any bar association formed under laws of eighteen hundred and eighty-seven, chapter three hundred and seventeen, shall be 256 MEMBERSHIP CorPORATIONS Law. capable of taking, holding or receiving any property, real. or personal, by virtue of any conveyance by any person or by devise or bequest contained in any last will and testa- ment of any person whatsoever, the clear annual income of which devise or bequest shall not exceed the sum of twenty thousand dollars; subject to the limitations provided in section twenty of the decedent estate law. Source.—L. 1887, ch. 317, § 7, in part. L. 1887, Chap. 317, was an act for the iedenoeation of county bar associations. Section 20 of the Decedent Estate Law was repealed by L. 1911, Chap. 857, and therefore the limitations for- merly contained in that section upon the rights of a testator to bequeath and devise have been removed. See discussion under Membership Corp. Law, Sec. 18, ante. The limitation upon the right of the corporation to take and hold property contained in the above section must be read in connection with Gen. Corp. Law, Sec. 12, ante. ARTICLE 10 Veteran Soldiers’ and Sailors’ Associations Section 160. Certificate of incorporation. 161. Shares. 162. Property. § 160. Certificate of incorporation. Twenty-five or more honorably discharged soldiers or sailors of the Union army or navy, or the male descendants of such soldiers or sailors, may become a corporation for social, literary, patriotic, charitable and historical purposes, by making, acknowledg- ing and filing a certificate stating the particular object for which the corporation is to be created; the name of the proposed corporation; the town, village or city in which its principal office is to be located ; the names of fifteen persons to be its directors until the first annual meeting, and the times for holding its annual meetings. Such certificate shall not be filed without the approval, indorsed thereupon or annexed thereto, of a justice of the supreme court. On filing such certificate, in pursuance of law, the signers MEMBERSHIP CorporaTIONS Law. 257, thereof, their associates and successors shall be a corpora- tion in accordance with the provisions of such certificate; but no person shall be eligible to membership of such cor- poration unless he have the same qualifications as the per- sons authorized to sign the certificate of incorporation thereof. Source.—Formerly Mem. Corp. L. (L. 1895, ch. 559), § 110. Re- vised from L. 1890, ch. 118, §§ 1, 2. For form of certificate of incorporation under the above section, see Form No. 70, post. Cross References. For provisions generally applicable to incorporation, see notes under Sec. 41, ante. For exemption from taxation, see Tax Law, Sec. 4, subd. 7, post. ‘Lease of Public Buildings. The General Municipal Law, § 77, provides that a municipal corporation may lease a public building for not exceeding five ‘years to a veteran organization without expense or at a nominal rent. § 161. Shares. The by-laws of such a corporation may provide that the property of the corporation shall be divided into transferable shares of one hundred dollars each, en- titling the holder thereof to one vote for each share, at all meetings of the corporation. Each shareholder shall be liable to the amount unpaid on the shares held by him, for the debts and liabilities of the corporation; but shall not be entitled to receive any interest or dividends thereon. Such a corporation shall be a membership corporation and not a stock corporation. Source—Formerly Mem. Corp. L. (L. 1895, ch. 559), § 111. Re- -vised from L. 1890, ch. 118, § 3. § 162. Property. All sums over the necessary expenses of such corporation and over and above the amount neces- sary to discharge the principal and interest on any mort- gage or bond issued by it shall be held by the directors as a fund for the purchase of memorials, preservation of relics and historical evidences and trophies, and for charity to Union veterans, their families or descendants. Source——Formerly Mem. Corp. L. (L. 1895, ch. 559), § 112. Re- vised from L. 1890, ch. 118, § 2. 258 MEMBERSHIP CorpoRATIONS Law. ARTICLE 11 Soldiers’ Monument Corporations ‘SEcTIon 170. Certificate of incorporatidn. 171. Property; erection of monuments. 172. Improvement taxes. 173. Transfer of moneys from unincorporated associa- tion to incorporated association in same place. § 170. Certificate of incorporation. Three or more per- sons may become a corporation for the purpose of erecting ‘a monument, monuments or memorial, including a memorial hall or building, to perpetuate the memory of the soldiers and sailors who served in defense of the Union in the war -of the rebellion, or in the army or navy of the United States in the late war with Spain, or in the army or navy of the United States in any war in which the government of the United States has been engaged, including the American revolution on the side of the Colonies; such monument or -memorial alike to perpetuate the memory of those soldiers ‘and sailors, who, since rendering such military or naval ‘service have become resident of and die in the town, city or county in which such monument or memorial is erected; “by making, acknowledging and filing a certificate, stating ‘the particular object for which the corporation is to be created; the name of the proposed corporation ; the number -of its directors, not less than six nor more than twelve; the names and places of residence of the persons to be direc- . tors until the first annual meeting, and the time for holding its annual meetings. Such certificate shall not be filed -without the approval, indorsed thereupon or annexed . thereto, of a justice of the supreme court. On filing such certificate, in pursuance of law, the signers thereof, their associates and successors shall be a corporation in accord- .ance with the provisions of such certificate. Source——Formerly Mem. Corp. L. (L. 1895, ch. 559), § 120, as am’d by L. 1905, ch. 411. Revised from L. 1866, ch. 273, as am’d by L. 1888, ch. 299. For form of certificate of incorporation under the above section, see Form No. 71, post. MeEmBersHIP Corporations Law. 259 Cross References. For provisions generally applicable to incorporation, see notes under § 41, ante. For exemptions from taxation, see Tax Law, § 4, subd. 7. Acquisition of Land for Monuments. The General Municipal Law, § 72, provides that the trustees of a monument association may acquire not to exceed three acres of land for the erection of a monument or other structure as a me- morial, upon obtaining the approval of the court. § 171. Property; erection of monuments. Such a cor- poration may acquire and hold, within the county in which its certificate of incorporation is recorded, not more than five acres of land to be used exclusively for the erection of a suitable monument or monuments or other memorial to perpetuate the memory of the soldiers and sailors who served in defense of the Union in the war of the rebellion, or who served in the army or navy of the United States in the late war with Spain, or in the army or navy of the United States in any war in which the government of the United States has been engaged, including the American revolution on the side of the Colonies; such monument or memorial alike to perpetuate the memory of those soldiers and sailors who, since rendering such military or naval service, have become resident of and die in the town, city or county: in which such monument or memorial is erected. Such a corporation may erect any such tnonument, monu- ments or memorial upon any public street, square or ground of any town, city or village, with the consent of the proper officers thereof, or may purchase or accept the donation of .land suitable for that purpose; and may take and hold the property given, devised or bequeathed to it in trust, to apply the same or the income or proceeds thereof for the erection, improvement, embellishment, preservation, repair or renewal of such monument, monuments or memorial, or of any structure, fences or walks upon its lands, or for planting or cultivating trees, shrubs, flowers and plants, in and around or upon its lands, or for improving or embel- lishing the same in any manner consistent with the design. and purposes of the association, according to the terms of 260 MEMBERSHIP CoRPORATIONS Law.. such grant, devise or bequest. It may take by gift or pur- chase any lots or lands in any cemetery within such county to be used and occupied exclusively for the burial of hon- orably discharged soldiers and sailors who served in either of such wars, and for the erection of suitable monuments or memorials therein. A town clerk or the board of trus- tees of a village shall, upon the petition of twenty-five resi- dent taxpayers, submit to a biennial town meeting or vil- lage election, as the case may be, a proposition to raise by taxation a sum stated therein, not exceeding five hundred dollars in any one year, for the purpose of erecting such a monument, or contributing to the expense of such a monu- ment, erected by a corporation under this section, or for repairing or improving the same and the grounds thereof ;, and such tax shall be levied in the manner prescribed by law for levying general taxes in such town or village, and when raised shall be applied to the purposes specified in such proposition. The property of any corporation formed pursuant to laws of eighteen hundred and sixty-six, chapter two hundred and seventy-three, as amended by laws of eighteen hundred and eighty-eight, chapter two hundred and ninety-nine, shall be exempt from levy and sale on execution, and from all pub- lic taxes, rates and assessments, and no street, road, avenue or thoroughfare shall be laid through the lands of such association held for the purposes aforesaid without the con- sent of the trustees of such corporation, except by special permission of the legislature of the state. Source——Formerly Mem. Corp. L. (L. 1895, ch. 559), § 121, a3 am’d by L. 1899, ch. 207, and L. 1905, ch. 411; also L. 1888, ch. 299, § 1, subd. 5. Revised from L. 1866, ch. 273, §§ 4, 6, as am’d by L. 1888, ch. 299. § 172. Improvement taxes. A tax may be levied and col- Jected on the taxable property in a town, village or city in -which such monument, monuments or other memorial may be erected, for the purpose of repairing or improving the same and the grounds thereof; and such tax shall be levied MEMBERSHIP CorPORATIONS Law. 261 in the manner prescribed by law for levying general taxes. in such town, village or city. Source——Formerly Mem. Corp. L. (L. 1895, ch. 559), § 122. Re- vised from L. 1866, ch. 273, § 7. § 173. Transfer of moneys from unincorporated associa- tion to incorporated association in same place. Any unin- corporated association which shall have been organized solely for the purpose of raising funds to be devoted to the erection of a monument or memorial to perpetuate the memory of the soldiers and sailors who served in the de- fense of the Union in the late war may, by a majority vote of all its members who shall be present and voting at a meeting thereof, called as in this section provided, transfer to and vest in any incorporated association which shall have been organized under a general statute, or under the fore- going sections of this article for the sole purpose of erect- ing a like monument or memorial in the same town or vil- lage where such unincorporated association is located, any or all money which it shall have accumulated for such object, except as hereinafter provided, provided that such transfer does not conflict with any provision of the consti- tution or by-laws of such association, and that it shall be made and the money so transferred shall be accepted by such incorporated association in trust to apply the same, er the income thereof, exclusively for the purposes men- tioned in section one hundred and seventy-one of this ar- ticle. Any member of such unincorporated association who shall have contributed individually to the fund so raised, and paid such contribution into the treasury of such association, the same appearing upon the books of the treas- urer, shall be entitled to demand and receive the amount of such contribution from the treasurer of such association, in case such transfer shall be made and before the same shall be consummated, upon filing with the president or secretary of such unincorporated association his or her affi- davit to the effect that he or she has not approved of such transfer by vote or otherwise. No vote upon the question 262 MemBeErsHIP Corporations Law. of transferring the funds of such unincorporated associa- tion as hereinbefore provided for shall be had or taken ex- cept at a meeting of such association especially called for that purpose by the president or secretary or other manag- ing officer thereof, upon notice given at least ten days be- fore the time fixed for such meeting, personally or by mail to each member of such association whose residence or post-office address is known, which notice shall state the object of the meeting to be the consideration of making such transfer pursuant to this section. Source.—Formerly Mem. Corp. L. (L. 1895, ch. 559), § 123, as added by L. 1897, ch. 327. ARTICLE 12 Boards of Trade Secrion 180. Certificate of incorporation. 181. Annual assembly or convention of corporations formed hereunder of more than five thousand members. 182. Boards of trade heretofore incorporated, which have issued capital stock. § 180. Certificate of incorporation. Five or more per- sons may form a corporation commonly called a board of trade or exchange, or a building exchange or association, for the purpose of fostering trade and commerce, or the - interests of those having a common trade, business, finan- cial or professional interest, to reform abuses relative there- to, to secure freedom from unjust or unlawful exactions, to diffuse accurate and reliable information as to the stand- ing of merchants and other matters, to procure uniformity and certainty in the customs and usages of trade and com- merce, andsof those having a common trade, business, finan- cial or professional interest; to settle differences between its members, and to promote a more enlarged and friendly intercourse between business men, by making, acknowledg- ing and filing a certificate, stating the particular object for which the corporation is to be created; the name of the proposed corporation; the town, village or city in which MEMBERSHIP CoRPORATIONS Law. 263° its principal office is to be situated; the number of its direc- tors, not less than five; the names and places of residence of the persons to be its directors, until its first annual meet- ing; and the times for holding its annual meetings. Such certificate shall not be filed without the approval, indorsed thereupon, or annexed thereto, of a justice of the supreme court. On filing such certificate, in pursuance of law, the signers thereof, their associates and successors, shall be a corpora- tion in accordance with the provisions of such certificate. Source.—Formerly Mem. Corp. L. (L. 1895, ch. 559), § 130. Re- vised from L. 1877, ch. 228, § 1, as am’d by L. 1886, ch. 333, and §§ 2, 7. For form of certificate of incorporation under the above section, see Form No. 72, post. Cross References. For provisions generally applicable to incorporation see notes under § 41, ante. See cases under § 8, ante. Membership in Exchange. A “seat” in an exchange that can be transferred to a certain class of purchasers under prescribed regulations is property and therefore passes to a receiver in supplementary proceedings. Powell v. Waldron, 89 N. Y. 328 (1882); or a receiver in bank- ruptcy or an assignee. Platt v. Jones, 96 N. Y. 23 (1887); Hyde v. Woods, 94 U. S. 524 (1876); Page v. Edmunds, 187 U. S. 596 (1902). Taxation. . A seat in an exchange is subject to transfer tax. Matter of Hellman, 174 N. Y. 254 (1903); but cannot be assessed for annual taxation when owned by a non-resident. Peo. ex rel. Lemmon v. Feitner, 167 N. Y. 1 (1901). § 181. Annual assembly or convention of corporations formed hereunder of more than five thousand members. Any corporation formed under the provisions of this article having no capital stock and composed of more than five thousand members may, in place of holding an annual meet- ing of all its members, provide in its constitution and by- laws for an annual election by its members, of representa- tives or delegates, either at large or from special districts, 264 Mempersuir CorpPoraTIoNs Law. or in any other manner not contrary to law; and in such case, no annual meeting of the members shall be held. Such delegates or representatives, when assembled under the name and in the manner directed by the constitution and by-laws of the corporation, shall have and may exercise all the powers, rights and privileges of an annual meeting of the corporation. The time and place of holding such annual assembly or convention may be prescribed in the constitu- tion or by-laws of the corporation, and changed from time to time. The annual assembly or convention may be held without the state. Source.—Formerly Mem. Corp. L. (L. 1895, ch. 559), § 130-a, as added by L. 1907, ch. 61. § 182. Boards of trade heretofore incorporated, which have issued capital stock. A board of trade, incorporated prior to September first, eighteen hundred and ninety-five, under a law repealed by this chapter, which had issued capi- tal stock prior to said date, entitling the holders of the shares thereof to dividends from the profits of the corpora- tion, shall be subject to the provisions of the business cor- porations law, the stock corporation law and the general corporation law, and not to the provisions of this chapter. Source.—Formerly Mem. Corp. Law (L. 1895, ch. 559), § 131. ARTICLE 13 Agricultural and Horticultural Corporations Secrion 190. Certificate of incorporation. 191. Restrictions on the formation of corporations. 192. Annual fairs and premiums. 193. Police and magistrates on exhibition grounds. 194. Capital stock. 19g. Annual report. 196. Membership in state society. 197. Exhibitions and entertainments on fair grounds to be exempt from license. § 190. Certificate of incorporation. Ten or more persons may form a county or town agricultural corporation for promoting agriculture, horticulture and the mechanic arts, MEMBERSHIP CorporaTIONS Law. 265 by making, acknowledging and filing a certificate, stating the particular objects for which the corporation is to be created; the territory in which its operations are to be con- ducted; the town, village or city in which its principal office is to be located; the number of its directors, not less than six or more than twelve; the names of the persons to be its directors until its first annual meeting; and the times for holding its annual meetings. Such certificate shall not be filed without the approval, indorsed thereupon or annexed thereto, of a justice of the supreme court. On filing such certificate, in pursuance of law, the signers thereof, their associates and successors, shall be a corpora- tion in accordance with the provisions of such certificate. Any such agricultural corporation or any other agricul- tural society organized under the laws of this state shall have the right to buy or lease any lands or real estate nec- essary or needed for its purposes. In case any agricultural corporation or any other agricultural society which has re- ceived moneys from the state, for premiums paid for im- proving the breed of cattle, sheep and horses, or has acted as agent for the state in disbursing moneys for such pur- pose can not purchase or acquire such lands or real estate upon satisfactory terms, then such agricultural corporation or agricultural society may acquire such lands or other real estate necessary for its purposes by condemnation in pur- suance of the condemnation law. Any lands or real estate acquired by any agricultural corporation or agricultural so- ciety by condemnation proceedings, or otherwise, shall not be subject to condemnation proceedings instituted by any other agricultural society or any other corporation. Source.—Formerly Mem. Corp. L. (L. 1895, ch. 559), § 140, as am’d by L. 1902, ch. 582. Revised from L. 1855, ch. 425, § I, as am’d by L. 1891, ch. 10; and § 2, as am’d by L. 1881, ch. 207. For form of certificate of incorporation under the above section, see Form No. 73, post. Cross References. For provisions generally applicable to incorporation, see notes under § 41, ante. 266 Mempersuip Corporations Law. - For provisions relative to appropriation and payment of public! moneys to agricultural corporations see Agricultural Law §§ 310- et seq. § 191. Restrictions on the formation of corporations. | There shall be but one county society in a county, and but, one town society in a town. Whenever a new county shall. be or shall have been erected out of a part of an existing- county in which a county society existed at the time of. the erection of such new county, such existing society may at its option be continued as the joint society of the new- and the old county and its rights and liabilities shall be the same as if the new county had not been erected. The determination of an existing society to be continued as a. joint society for such counties shall be evidenced by a cer-. tificate thereof, signed and acknowledged by a majority of the directors, and filed in the office of the secretary of state. and in the clerk’s office of each of such counties. A joint- society may be formed for two, three or four towns, but , the formation of such society shall not prevent the forma- tion of separate town societies for such towns. Source.—Formerly Mem. Corp. Law (L. 1895, ch. 559), § 141, as- am’d by L. 1899, ch. 104. Revised from L. 1855, ch. 425, § 6, as am’d by L. 1881, ch. 388. , § 192. Annual fairs and premiums. Every such corpora- tion, the American institute in the city of New York, and the New York state agricultural society, shall hold annual’ fairs and exhibitions, and distribute premiums. Such a‘ county or town corporation may, by a two-thirds vote of’ the members present and voting at a regular meeting, or’ at a special meeting, duly called for that purpose, fix the place where the annual fair and exhibition of the corpora-' tion shall ke held. Such corporations and societies shall regulate and award premiums on such articles, productions’ and improvements as they deem best calculated to promote the agricultural and household manufacturing interests of the state, having special reference to the net profits which, accrue or are likely to accrue from the mode of raising the crop, or stock, or fabricating the article exhibited, so that: MEMBERSHIP CorPoRATIONS Law. 267 the award be given to the most economical or profitable mode of production. J Source—Formerly Mem. Corp. L. (L. 1895, ch. 559), § 142, as am’d by L. 1896, ch. 476. Revised from L. 1855, ch. 425, § 5, as am’d by L. 1884, ch. 436, and § 10, as am’d by L. 1888, ch. 340; L. 1841, ch. 169; L. 1848, ch. 299, § 3. Public Moneys. For provisions relative to apportionment of public moneys among agricultural societies, see the Agricultural Law, §§ 310-312. Lease of Grounds. Agricultural corporations may lease grounds owned by them for other purposes pursuant to Agricultural Law, § 313. § 193. Police and magistrates on exhibition grounds. The board of directors of any such corporation, or the executive committee of such board, may appoint a chief of police and as many citizens of this state as may be necessary to act as policemen at their exhibitions. The chief of police may also while acting as such appoint such additional policemen as he may deem advisable. Such chief of police and police- men shall preserve order within and for a space of two hun- dred yards from and around the grounds of the corporation, protect the property within such grounds and space, and eject all persons improperly therein, or acting disorderly therein, or who neglect or refuse to pay the entrance fee or observe the rules prescribed by the corporation. Any of such officers may arrest without a warrant, any person who he has reasonable cause to believe has unlawfully and fraudulently entered the exhibition grounds of such cor- poration without paying the entrance fee therefor. They shall have the same power within such grounds and space, during the time such exhibition continues, and for twenty- four hours thereafter, that a constable has by law, in serv- ing criminal process, making arrests and preserving the peace. No town or county shall be liable to pay any such policeman for services rendered under this section. Such corporations may regulate or prevent all kinds of theatrical, or circus, exhibitions and shows, huckstering and traffic in fruits, goods, wares and merchandise, of whatever descrip- 268 MEMBERSHIP CorPORATIONS Law. tion, and shall prevent all kinds of mountebank exhibitions or shows for gain on the fair days and within a distance of two hundred yards of the fair grounds of such corpora- tion, if it deems the same to obstruct or in any way inter- fere with the free and uninterrupted use of the highways around and approaching such fair grounds. A justice of the peace of the county in which such grounds are situated, may, while upon such grounds, hold a court of special sessions, having the same duties, powers and jurisdictions over offenses committed upon such grounds and within two hundred yards of the boundaries. thereof, as is had by a court of special sessions of a town of such county over offenses committed in the town. The fines and penalties received by a justice of the peace under this section shall, before the close of the fair or exhibition at which the same are received, be handed over by him to such society, for its use, together with a written report of his proceedings during such fair or exhibition. The report shall be in all respects the same as an annual account ren- dered for services in criminal proceedings by a justice of the peace of a town to the board of town auditors. The justice shall receive as compensation for his services under this section his legal fees to be paid by such society. The justice shall include in his annual report to the board the offenses committed and the proceedings had under this sec- tion, and the disposition made by him of fines and penalties collected. The justice shall enter in his regular criminal docket the full proceedings of all matters coming before him under this section, stating each case separately; and the record of such proceedings shall be kept open for pub- lic inspection upon such grounds during such fair or exhibi- tion. e Source.—Formerly Mem. Corp. L. (L. 1895, ch. 559), § 143, a8 am’d by L. 1900, ch. 333. Revised from L. 1859, ch. 36, § 1, as am’d by L. 1893, ch. 602, and § 3; L. 1862, ch. 284 Penal Provisions. Regulations concerning acrobatic and other exhibitions are found in Penal Law, Article 78. A person who wrongfully and fraudulently enters any agri- MEMBERSHIP CorporaTions Law. 269. cultural fair grounds, without paying the entrance fee, is guilty. of a misdemeanor. Penal Law, § 927. For provisions prohibiting the use of false pedigree of animals, see Penal Law, § 933. § 194. Capital stock. Such a corporation may, by a ma- jority vote of the members thereof present and voting at a regular or regularly called meeting, and by filing a certifi- cate to that effect in the county clerk’s office of the county where its certificate of incorporation is filed, fix the amount of capital stock which such corporation shall have, not more. than forty thousand, nor less than five thousand dollars, divide the same into shares of not less than ten dollars each, and issue such shares at not less than the par value thereof, to raise money for the purposes for which the corporation was created. An agricultural corporation incorporated un- der this chapter or a law repealed hereby, which has issued or shall hereafter issue capital stock, entitling the holders of the shares thereof to dividends from the profits of the corporation, shall be subject to the business corporations law, the stock corporation law and the general corporation law, and not to the provisions of this article in conflict therewith, nor to article two of this chapter. Source.—Formerly Mem. Corp. L. (L. 1895, ch. 559), § 144. Re+ vised L. 1855, ch. 425, § 4, as am’d by L. 1881, ch. 207. The organization tax imposed by § 180 of the Tax Law must be paid upon the amount of stock issued under this section. Opinion of Atty. Gen. March 3, 1900, Report of 1909, page 315. § 195. Annual report. The directors of such a corpora- tion, on or before February first in each year, shall make a verified report to the secretary of the New York state agricultural society of the transactions of the corporation for the preceding year, giving full details of the receipts and expenditures thereof, with a list of premiums awarded and to whom and for what awarded. Source.—Formerly Mem. Corp. L. (L. 1895, ch. 559), § 145. Re- vised from L. 1855, ch. 425, § 9. § 196. Membership in state society. The presidents of the county agricultural association corporations, incorpo- rated under this chapter, or under a law repealed thereby, 270 MemsBersuir Corporations Law. or delegates to be chosen by such associations annually, shall be ex officio members of the New York state agricul- tural society. Source.—Formerly Mem. Corp. L. (L, 1895, ch. 559), § 146. Re- vised from L. 1841, ch. 169, § 6. § 197. Exhibitions and entertainments on fair grounds to be exempt from license. The provisions of any special or local law or municipal ordinance, requiring the payment of a license fee for exhibitions or entertainments, shall not apply to any exhibition or entertainment held on the grounds of a town or county fair association, if the associa- tion derives a pecuniary profit from such exhibition or en- tertainment by the lease of its grounds for such purpose, or otherwise. Source——Formerly Mem. Corp. L, (L. 1895, ch. 559), § 146-a, as added by L. 1903, ch. 275. ARTICLE 14 Medical Societies Sxcrion 210. Medical societies heretofore incorporated. 2i1. Certificate of incorporation 212. Filing certificate. 213. Regulations for county medical societies. 214. May enforce discipline; appeal. 215. Real and personal property of county medical socie- ties. § 210. Medical societies heretofore incorporated. Any medical society now organized in any of the counties of the state set apart since the passage of the act entitled “An act to incorporate medical societies for the purpose of regu- lating the practice of physic and surgery in this state,” passed April tenth, eighteen hundred and thirteen, shall, upon complying with the provisions of this article, enjoy the same privileges and possess the same powers as the societies incorporated by virtue of said act now enjoy and possess, but subject, nevertheless, to the provisions of any acts or parts of acts heretofore passed in relation to medi- MemeBersuir Corporations Law. 271 -cal societies or to regulate the practice of physic and sur- gery in this state. Source.—L. 1894, ch. 430, § 1. For laws relating to State and County Medical Societies which have not been repealed nor consolidated see miscellaneous acts, post. § 211. Certificate of incorporation. Before any such medical society shall be entitled to the privileges and pos- sess the powers provided in the last preceding section of this article, such society at a regular meeting thereof or at a special meeting called for that purpose after due no- tice to all its members, shall make and file with the secre- tary of state a certificate, signed and acknowledged by its. president and secretary, stating the name of such society, the date of its organization, the name and residence of its members, that the said society, by a majority vote of its members, has elected to become and be a body corporate under and by virtue of the act described in section two hundred and ten of this article, and be subject to the pro- -visions of any acts or parts of acts heretofore passed, and now in force, in relation to such societies or the practice of physic and surgery in this state. Source.—L. 1894, ch. 430, § 2. For forms of papers under the foregoing section, see Forms Nos. 74 and 75, post. A licensed physician having the qualifications prescribed in the by-laws cannot be excluded from the county medical society on the ground that he did not conform to the conventional rules of the society at a period antecedent to his application, in that he had advertised in public journals, for only those who join are there- after bound by a canon of ethics. Peo. ex rel. Bartlett v. Medical Society, 32 N. Y. 187 (186s). Irrespective of statute, county societies may exercise the power of expulsion in case of (1) violation of duty to the society as a member of the corporation; (2) offenses as a citizen against the laws of the country; (3) breach of duty in respect alike to the corporation and the laws. Peo. ex rel. Bartlett v. Medical So- ciety, 32 N. Y. 187, 194 (1865). The right of immediate expulsion must be plain and unques- tioned, for no presumption will be indulged in to support a forfeiture. Peo. ex rel. Bartlett v. Medical Society, 32 N. Y. 187, 196 (1865); Peo. ex rel. Meade v. McDonough, 8 App. Div. 591 (1896). 272 Mempersuir Corrorations Law. A By-Law of a County Medical Society providing that no mcem- ber shall resign when under charges is valid and binding, and the member who has filed his resignation after charges have been presented, which resignation was not accepted, may not enjoin the Society from trying him on the charges on the ground that he is no longer a member. The mere fact that the charges had not been served is immaterial. Ewald v. Medical Soc. Co. of N. Y., 144 App. Div. 82 (1911). The relation of a County Medical Society to the public is such that the mere severing of membership of one guilty of of- fense meriting discipline would not serve its corporate purposes. Such a society is much more than a mere private corporation or social club and is intended to discharge important duties to the public. A member assumes an obligation not only to conform to the rules and regulations respecting his immediate relations to it, but has as well to observe its standards of professional ethics, and a breach of that obligation in any respect involves a viola- tion of duty to the Society. Ewald v. Medical Soc. of N. Y,, 144 App. Div. 82 (1911). A member’s contract with the Society is to be construed accord- ing to the law in force when the contract is made and accord- ing to the statutes in effect amending the original act of incor- poration, which amendments the Society has accepted. Ewald v. Medical Soc. of N. Y., 144 App. Div. 82 (1911). Dental Societies. For provisions as to incorporating district dental societies see Public Health Law, §§ 192 and 1093. Pedic Society. For provisions as to eligibility to membership see Public Health Law, § 271. Society Entitled to Penalties. Public Health Law, § 174, provides that where any prosecu- tion under that law is made on the complaint of any incorporated medical society of the state or any county medical society enti- tled to representation in a state society any fines collected shall be paid to the society making the complaint and that any excess of the amount so paid over the expenses incurred by the society shall be paid at the end of the year to the county treasurer. § 212. Filing certificate. Upon filing the certificate as provided in the last preceding section of this article, such society shall become and be a body corporate under the name set forth in said certificate, the same as if such society had been incorporated under and pursuant to the provisions of said act. Source.—L. 1894, ch. 430, § 2. Memsersuir Corporations Law. 273 § 213. Regulations for county medical societies. It shall be lawful for any county medical society in this state, en- titled to representation in any medical society in the state of New York, and the homeopathic medical society of the state of New York, to establish such rules and regulations for the government of its members as they may deem fit, provided the action of such societies receive the sanction of the said state medical societies representing such county medical society, and is not inconsistent with the laws of the state. Source. —L, 1866, ch. 445, § 1. See notes to § 211, ante. § 214. May enforce discipline; appeal. Each county. medical society shall have full power and authority to en- force discipline among its members and obedience to its rules and regulations, with power to expel or otherwise dis- cipline as they may deem most advisable for the best in- terests of said society. Any member of any county medi- cal society or applicant for membership to such society feel- ing aggrieved at the action of said society, shall have the right to appeal to the medical society of the state of New York, representing such county medical society. Source.—L. 1866, ch. 445, § 2. § 215. Real and personal property of county medical so- cieties. It shall and may be lawful for any medical society, of a county incorporated prior to May tenth, eighteen hun- dred and ninety-three, and for any such society created pur- suant to the provisions of the act passed April tenth, eighteen hundred and thirteen, entitled “An act to incorpo- rate medical societies for the purpose of regulating the prac- tice of physic and surgery in this state,” and for the medical society of the state of New York, to take, purchase and hold for the use of said society, any estate, real or personal, provided that the aggregate estate, real and personal, of any such society, shall not exceed the sum of fifty thousand dollars, except in the case of the medical society of the county of New York, and in the case of the medical society 274 Membersuip Corporations Law. of the county of Kings, each of which societies may hold property aggregating in value one hundred thousand dol- lars. Such societies may collect annual dues and assess- ments from members, provided that the aggregate of assess- ments and dues of any member in any one year shall not exceed the sum of five dollars, except in the county of Kings, in which county the aggregate assessment and dues of any member in any one year shall not exceed the sum of ten dollars. $2 Source.—2 R. L., 1813, ch. 94, § 13, as am’d by L. 1893, ch. 682. The limitations upon the right to hold property contained in the above section must be read in connection with the provisions. of Gen. Corp. Law, § 12, ante. ARTICLE 15 Alumni Corporations Sxcrion 220. Alumni may be incorporated. 221. Certificate to be made and filed. 222. Corporations. 223. Corporate powers; alumni funds; special directors; expenses. 224. Directors and officers, election, compensation. 225. Alumni fund. 226. Annual report. 227. Only one corporation to be formed. § 220. Alumni may be incorporated. The alumni of any college or university, or of one or more colleges of any uni-- versity, located in this state, may be incorporated by exe- cuting and filing the certificate hereinafter mentioned, and they shall thereupon become a corporation, may sue and be sued in their corporate name, shall have the powers and privileges hereinafter granted, and such other powers and privileges, not inconsistent with the objects of their incor-- poration, as are conferred upon corporations by law. Source.—L. 1882 ch. 268 § 1. § 221. Certificate to be made and filed. The persons so- desiring to be incorporated, not less than nine in number, shall execute and acknowledge, in the same manner as. MEMBERSHIP Corporations Law. 275 deeds entitled to be recorded, a certificate, which shall be recorded in the clerk’s office of the county in which such college or university is located, and which shall state: 1. The name by which such corporation shall be known. 2. That the object of the formation of such corporation is to secure the benefits of this article. 3. The names of the directors of such corporation who shall act until the first annual meeting of the alumni of such college, colleges or university, after the filing of such certificate. Source. —L. 1882, ch. 268, § 2. For form of certificate of incorporation under the above section, see Form No. 76, post. Cross Refernces. For provisions generally applicable to incorporation, see notes under § 41, ante. § 222. Corporators. Any graduate of such college, col- leges or university, and any person who has received, upon examination, a degree from such college or university, may become a member of such corporation, by subscribing, or causing to be subscribed, his or her name to its constitution and by-laws, and by complying with such other reasonable conditions as such corporation may prescribe. Such cor- poration may also admit to membership therein such other persons as it shall deem qualified therefor, and upon such conditions as it may from time to time prescribe. Source.—L. 1882, ch. 268, § 3. § 223. Corporate powers; alumni funds; special directors; expenses. The corporations formed under the provisions of this article shall have power to create, manage and con- trol a fund, to be known as an alumni fund, and for that purpose to take and acquire real and personal property by gift, devise or purchase, the net annual income of which shall not exceed the sum of ten thousand dollars, and the income thereof may be used for and applied to such object ‘or objects connected with such college, colleges or univer- sity as such corporation shall direct. The corporations 276 MemeBersHIP Corporations Law. formed under the provisions of this article shall also have power to elect from among their members such a number of trustees or directors of the college or colleges, or univer- sity to which their members shall respectively belong, as such college, colleges or university shall designate; to pre- pare and publish from time to time an alumni record or directory; to prescribe reasonable terms and conditions upon which their members shall be entitled to vote or hold office; to provide for meetings and reunions of their mem- bers, and for literary and other entertainment at such meet- ings and reunions; to appropriate from their funds a suffi- cient sum to defray the expenses of such meetings and re- unions, including the expense of any banquet that may be given at the same, provided that no part of the permanent fund of such corporation, or of the income thereof, shall be appropriated for such purposes; to take such other ac- tion and to transact. such other business as usually pertain to alumni associations of colleges and universities; and to adopt such a constitution and by-laws and such rules and regulations as may be necessary or proper for their govern- ment and regulation, and for the accomplishinent of the objects of their incorporation, not inconsistent with the laws of this state. This section shal! not apply to any college or university whose alumni are now empowered to elect trustees in accordance with any special act heretofore passed by the legislature. Source.—L. 1882, ch. 268, § 4, as am’d by L. 1884, ch. 216, § 1. § 224. Directors and officers, election, compensation. The corporations formed under the provisions of this article shall elect annually from their members such a number of directors, n6t less than nine, as their constitution and by- laws shall prescribe, and from the directors so chosen shall elect a president and a secretary and treasurer who shall be respectively the president, and the secretary and treasurer both of the corporation and of the board of directors. Said corporations may also elect such other officers and commit- tees as their constitutions and by-laws shall prescribe. But MEMBERSHIP Corporations Law. 277 no officer, director or member of a committee of such cor- poration, except its secretary and treasurer, shall receive any compensation for his service as such officer, director or member of a committee, except the same be granted by a two-thirds vote of all the members present at any regular ‘meeting of the corporation. The compensation of the sec- retary and treasurer of any such corporation shall be fixed by the board of directors, and said board may refuse to grant any compensation to such secretary and treasurer. In case a vacancy shall occur from any cause in said board of directors, or in any office of said corporation, or board of directors, the same shall be filled by said board of directors, or by the executive committee of the same, if empowered so to do by the constitution or by-laws of the corporation, and the person or persons chosen to fill such vacancy shall hold office until his or her successor shall be chosen at a regular meeting of said corporation. Source.—L. 1882, ch. 268, § 5,.as am’d by L. 1884, ch. 216, § 2. § 225. Alumni fund. The directors of the corporations formed under the provisions of this article, shall have the custody and management of the alumni fund, created and acquired under the provisions of this article, but they shall not permanently appropriate said fund, or any part thereof, for any purpose or object, or use the same, except such part thereof as may be necessary to defray the expense of its acquisition, investment and management, unless duly au- thorized thereto by a two-thirds vote of the members of such corporation, present at an annual meeting thereof. Source.—L. 1882, ch. 268, § 6. § 226. Annual report. Every corporation formed under the provisions of this article, shall prepare annually a re- port, which shall be verified by the affidavit of an officer thereof, and which shall show the whole amount of the real and personal property owned by said corporation, where it is located, or how and where invested; the amount and nature of the property acquired during the year imme- 278 MEMBERSHIP CorPoraTions Law. diately preceding the date of said report, and the manner of its acquisition; the amount applied, appropriated or ex- pended during the year immediately preceding the date of said report, and the purposes, objects or persons to or for which such application, appropriation or expenditure has been made. Such report shall be presented to said corpo- ration at its annual meeting, or at any special meeting ap- pointed for that purpose, and entered in the minutes of its proceedings, and shall, within thirty days thereafter, be filed in the clerk’s office of the county in which said college or university is located. Source.—L. 1882, ch. 268, § 7, as am’d by L. 1884, ch. 216, § 3. § 227. Only one corporation to be formed. No more than one such corporation shall be formed of the alumni of any, one college, and the word “alumni,” when used in this ar- ticle, shall be construed to mean both male and female grad- uates. Should the alumni of two or more colleges of any university unite in forming a corporation under the provi- sions of this article, then but one such corporation shall be formed of the alumni of the colleges so uniting. Source. —L. 1882, ch. 268, § 8. ARTICLE 16 Historical Societies Section 230. Historical societies; for what purposes they may hold property. 231. Historical societies may condemn land. § 230. Historical societies; for what purposes they may hold property. Any historical society of this state is hereby authorized to have and hold for the purposes of inclosure, preservation and the erection of monuments, but under no circumstances for the purpose of business, the sites of old forts and battles, not to exceed six acres in one locality, and when such sites have been so appropriated and im- proved, and used for such purposes only, they shall be ex- empt from taxation; and to receive donations of articles MEMBERSHIP CorporaTIONS Law. 279 of historic interest on the condition that it shall not dispose of the same, except with the consent of the donor, and that in case of its dissolution or inability to pay its debts other- wise than from its effects, the said articles shall revert to the donors or their heirs. But nothing herein contained shall be construed as authorizing the charging of any fee for the exhibition of such inclosure or structure by such historical society or its agents. Source. —L. 1879, ch. 203, § 1. § 231. Historical societies may condemn land. The ap- propriation by any historical society of this state of any real property for the purpose of inclosure, preservation, and the erection of monuments, is hereby declared to be for the public use. In case any such society desiring to ac- quire lands which it is by section two hundred and thirty of this article authorized to have and hold, can not agree with the owners and occupants of such lands for the pur- chase thereof, such society is authorized to acquire title to the same by condemnation, and the proceedings for that purpose shall be taken in the manner prescribed in title one of chapter twenty-three of the code of civil procedure known as “the condemnation law.” Source.—L. 1879, ch. 203, § 2, as am’d by L. 1896, ch. 681. See U. S. v. Gettysburg El. R. Co., 160 U. S. 668 (1895). ARTICLE 17 Veterinary Associations Section 240. Graduates of veterinary colleges may incorporate. : 241. Filing certificate; powers; membership. 242. Election of officers. 243. Failure to elect officers. 244. Power of such corporation to take property by will. § 240. Graduates of veterinary colleges may incorporate. Any nine or more persons who are graduates from any legally chartered veterinary college or university, and who hold diplomas or certificates as such, citizens of the United 280 MEMBERSHIP CorpoRATIONS Law.. States and ‘of this state, who desire to form themselves ‘into an association for the purpose of improving the methods of treating diseases and injuries of all domestic animals, to elevate the standard of integrity, honor and courtesy in the veterinary profession and to‘cherish the spirit of brotherhood among the members thereof, may sign and acknowledge before any officer authorized to take the ac- knowledgments of deeds in this state, and file in the office of the secretary of state and a duplicate thereof in the office of the clerk of the county in which such association is or- ganized a certificate, in writing, to be approved by a justice of the supreme court, in which shall be stated the name of said association, its object, the officers of the same and the names of its officers for the first year of its existence, and the name of the county or district in and for which it is formed. Source.—L. 1890, ch. 286, § 1. For form of certificate of incorporation under the above section, see Form No. 77, post. Cross References. For provisions generally applicable to incorporation, see notes under § 41, ante. It is to be noted, however, that the foregoing section specially provides for the filing of a duplicate in the county clerk’s office, instead of permitting the use of a certified copy for that puropse. § 241. Filing certificate; powers; membership. Upon fil- ing a certificate as aforesaid, the persons who shall have signed and acknowledged such certificate, and their asso- ciates and successors, shall thereupon, by virtue of this article, be a body politic and corporate by the name stated in such certificate, and shall in law be capable of taking, re- ceiving, purchasing, leasing and holding real estate for the purpose of such an association to an amount not exceeding two hundred thousand dollars in value, exclusive of the buildings and improvements thereon, and personal estate not exceeding in amount the sum of fifty thousand dollars in value; but the clear annual income of such real and per- sonal estate shall not exceed the sum of twenty-five thou- sand dollars; and provided further that no one shall be MEMBERSHIP Corporations Law. 281 eligible to active membership in such association unless he resides, or has an office, in the county or district in and for which such association is organized, and is engaged in the practice of veterinary medicine and surgery, and holds a diploma or certificate as a graduate from a legally char- tered veterinary college or university. Source.—L. 1890, ch. 286, § 2. The limitations upon the right to take and hold property con- tained in the foregoing section must be read in connection with the provisions of Section 12 of the General Corporation Law, ante, and notes thereunder. § 242. Election of officers. The association so incorpo- tated shall elect its officers from its members. Such elec- tion may be held at such time and place, and in such man- ner as may be specified in the by-laws, and such officers shall have the control and management of the affairs and prop- erty of said association. A majority of such board of offi- cers shall constitute a quorum for the transaction of busi- ness, and whenever any vacancy shall happen among such officers, by death, resignation or neglect to serve, such vacancy shall be filled in such manner as shall be provided by the by-laws of such association. Source.—L. 1890, ch. 286, § 4. § 243. Failure to elect officers. In case it shall at any time happen that an election of officers shall not be made on the day designated by the by-laws, said association for that cause shall not be dissolved, but it shall be lawful on any other day to hold an election for officers, in such man- ner as shall be directed by the by-laws of such association. Source.—L. 1890, ch. 286, § 5. § 244. Power of such corporation to take property by will, Any association formed under this article shall be capable of taking, holding or receiving any property, real or personal, by virtue of any conveyance by any person, or by devise or bequest contained in any last will and testa- ment of any person whatsoever, the clear annual income of which devise or bequest shall not exceed the sum of twenty 282 MEMBERSHIP CorporaTIons Law. thousand dollars; subject to the limitations provided in sec- tion twenty of the decedent estate law. Source.—L. 1890, ch. 286, § 6. Section 20 of the Decedent Estate Law was repealed by L. 1911, ch, 857, and therefore the limitations formerly contained in that section upon the right of a testator to bequeath and devise have been removed. See discussion under § 18, ante. ARTICLE 18 Consolidation of Library Corporations in New York City Section 260. Libraries in New York city may agree to consolidate with other like corporations. 261. Ratification of agreement. 262. Effect of agreement. 263. Property to be vested in new corporation. 264. Rights of creditors. 265. Powers of such corporation. § 260. Libraries in New York city may agree to consoli- date with other like corporations. Any corporations here- tofore or hereafter organized under any general or special laws of this state as a library company, or for the purpose of carrying on any library in the city of New York, may be consolidated with any other corporation or corporations, organized for the same or similar purposes under any gen- eral or special law of this state, into a single corporation in the manner following: The respective boards of direc- tors or trustees of the said corporations may enter into and make an agreement for the consolidation of the said cor- porations, prescribing the terms and conditions thereof, the mode of carrying the same into effect, the name of the new corporation, the number of trustees thereof, not less than five or more than twenty-five and the names of the trustees who shall manage the concerns of the new corporation for the first year, and until others shall be elected in their places. If either of the corporations so consolidating shall be a stock company, then the said agreement may either provide that the new corporation shall have no stock or may prescribe the amount of capital of the new corporation MemBeErsHIP Corporations Law. 283 and the number of shares of stock into which the same is to be divided, which capital shall not be larger in amount than the fair aggregate value of the property, franchises and rights of the several corporations thus to be consolidated, and the manner of distributing such capital among such consolidated corporations, or the holders of the stock of the same with such other particulars as they may deem necessary. Source.—L. 1892, ch. 541, § 1, as am’d by L. 1901, ch. 594. § 261. Ratification of agreement. If any such corpora- tion so consolidated shall have no members or stockholders, other than its directors or trustees, said agreement of its directors or trustees shall be deemed to be the agreement of such corporation. If any such corporation so consoli- dating shall have members or stockholders other than its directors or trustees, said agreement of its directors or trus- tees shall not be deemed to be the agreement of such cor- poration until the same shall have been ratified by a vote of at least two-thirds of the members or two-thirds in in- terest of the stockholders present and voting in person or by proxy at a meeting of the members or stockholders of such corporation to be called upon a notice of at least thirty days, specifying the time, place and object of such meeting, mailed post-paid to each member or stockholder whose place of residence is known to the secretary and published at least once in each week for four successive weeks in a newspaper published in the city of New York. A sworn copy of the proceedings of any such meeting made by the secretary of the corporation holding the same, and attached to said agreement shall be evidence of the holding and of the action of such meeting in the premises. If any. stockholder or member shall, at said meeting of the stock- holders or members, or within twenty days thereafter, object to the said consolidation and demand payment for his stock or interest in such corporation, such stockholder or member of said new corporation, if consolidation take effect at any time thereafter, may apply at any time within 284 MeEmsBersuip Corporations Law. sixty days after such meeting of the stockholders or mem- bers to the supreme court at any special term thereof, held in the county or counties in which said libraries or either of them may be, upon at least eight days’ notice to the cor- poration, for the appointment of three persons to appraise the value of his said stock or interest, and said court shall appoint three such appraisers and shall designate the time and place of the first meeting of such appraisers and give such directions in regard to their proceedings on said ap- praisement as shall be deemed proper, and shall also direct the manner in which payment for such stock shall be made to such stockholder or member. The court may fill any vacancies 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 or interest at the time of such dissent as aforesaid, and deliver one copy of their appraisal to the said new cor- poration, and another to the said stockholder or member if demanded; the charges and expenses of the appraisers shall be paid by the new corporation. When the new corpora- tion shall have paid the amount of the appraisal as directed by the court, such stockholder or member shall cease to have any interest in the said stock and in the corporate property of the said corporation, and the said stock or in- terest may be held or disposed of by the said new corpora- tion. Source.—L. 1892, ch. 541, § 2, as am’d by L. 1901, ch. 594. § 262. Effect of agreement. Upon the making of the said agreement, as hereinbefore provided, and the filing of the duplicates or counterparts thereof in the office of the clerk or clerks of the county or counties in which said libraries may be and in the office of the secretary of state, and in the case of any corporations having members or stock- holders other than their directors or trustees, upon the rati- fication of said agreement in the manner above provided, MemsersHip Corporations Law. 285 and the filing with said agreement of a verified copy of the proceedings of the meetings of the members or stockholders required by the preceding section, then and immediately thereafter, the said corporations whose boards of directors or trustees shall have united in said agreement shall be merged and consolidated into the new corporation provided for in the said agreement, to be known by the corporate name therein mentioned, and the details of such agreement shall be carried into effect as provided therein. Source.—L. 1892, ch. 541, § 3, as am’d by L. 1901, ch. 594. § 263. Property to be vested in new corporation. Upon the consolidation of the said corporations all and singular the rights, privileges, franchises and interests of any kind belonging to and enjoyed by the said several corporations so consolidating, and every species of property, real, per- sonal and mixed, and things in action thereunto belonging, shall be transferred to and vested in and may be held and enjoyed by such new corporation, without any deed or transfer; and such new corporation shall hold and enjoy the same, and all rights of property, privileges, franchises and interests of either of the said several corporations, in the same manner and to the same extent as the same were or might have been held and enjoyed by the several cor- porations so consolidating. Said new corporation. shall have power to acquire, hold, possess, enjoy and dispose of all the property, real or personal, of said several corpora- tions so consolidating, and all such additional donations, grants, devises or bequests, subject to all the provisions of law relating to devises or bequests by last will and testa- ment, as may be made in further support of its library, col- lections and objects, or any of the same; and may make such investments as any of the corporations so consolidat- ing might lawfully make, or as may be authorized by the terms of any such donation, grant, devise or bequest; and any devise or bequest contained in any last will and testa- ment made before or after such consolidation to or for the benefit of any of the corporations so consolidating shall not 286 MEMBERSHIP CoRPORATIONS Law: fail by reason of such consolidation, but the same shall in- ure to the benefit of the said new corporation; and the title to all real and personal estate, and all rights and. privileges acquired and enjoyed by either of the said cor- porations so consolidating shall not be deemed to revert or to be impaired by such act of consolidation, or anything relating thereto. Source.—L. 1892, ch. 541, § 4, as am’d by L. 1895, ch. 209. § 264. Rights of creditors. The rights of the creditors: of any corporation that shall be so consolidated shall not in any manner be impaired by any act or consolidation, nor shall any liability or obligation for the payment of any money now due or hereafter to become due to any person or persons, or any claim or demand in any manner, or for any cause existing against any such corporation, or against. any stockholder thereof, be in any manner released or im- paired, but such new corporation is declared to succeed to such obligation and liabilities and to be held liable to pay and discharge all such debts and liabilities of each of the corporations that shall be so consolidated in the same man- ner as if such new corporation had itself incurred the obligation or liability to pay such debt or damages; and the stockholders of the respective corporations so entering into such consolidation shall continue subject to all the liabili- ties, claims or demands existing against them as such at or before such consolidation; and no suit, action nor any pro- ceedings 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 be deemed. to have abated or been discontinued by reason of any such consolidation, but the same may be prosecuted to final judgment, in the same manner as if the said corporations. had not entered into the said agreement of consolidation, and the said new corporation may be substituted as a party in the place of any corporation so consolidated as afore- said, and forming such new corporation, by order of the MempBersHip Corporations Law. 287 court in which such action, suit or proceeding may be pending. Source. —L. 1892, ch. 541, § 5. § 265. Powers of such corporation. The new corpora- tion organized under this article shall be permitted to main- tain and carry on any form of library and to promote any of the objects authorized by the charter of either or any of the corporations which have been consolidated. Source.—L. 1892, ch. 541, § 6, as am’d by L. 1895, ch. 209. ARTICLE 19 Agricultural, Fair and Other Corporations Authorized to Construct Tunnels and Bridges Secrion 270. Certain corporations authorized to construct tunnels under and bridges over highways. 271. Such corporations shall file maps and profiles. 272. Approval of maps and profiles by local authorities. 273. Application of this article. § 270. Certain corporations authorized to construct tun- nels under and bridges over highways. Where any state, county or town agricultural corporation or any fair asso- ciation, or any corporation or association organized under a general or special statute and paying under any statute applicable thereto a percentage of at least five per centum per annum upon its gross receipts to the state comptroller, . is the owner of any real property which is or shall be sepa- rated or intersected in whole or in part by a street, avenue or public highway, and it shall be desired by said corpora- tion or association to connect said real property by a tunnel under or a bridge over said street, avenue or public highway so as to avoid crossing said street, avenue or public high- way at the grade thereof, the said corporation or associa- tion may cause such connection to be made and the neces- sary work including any change of grade incidental thereto to be performed, upon compliance with the provisions of this article. Source.—L. 1903, ch. 523, § I. 288 MEMBERSHIP CorPoRATIONS Law. § 271. Such corporations shall file maps and profiles. The corporation or association desiring to make such con- nection shall file with the local authorities having control over said street, avenue or public highway a proper survey, map, plans, profiles and specifications’ showing in detail the nature and character of the work to be done, the change to be made, the nature and character of any tunnel or bridge to be constructed and any proposed change of grade of said intervening or intersecting street, avenue or public highway. Source.—L. 1903, ch. 523, § 2. § 272. Approval of maps and profiles by local authorities. Said survey, map, plans, profiles and specifications when approved by the said local authorities having control over any such street, avenue or public highway and when duly filed in the office for the recording of deeds in the county where said property is situated, shall constitute an author- ization to said corporation or association to construct said tunnel or bridge or make said change at its own expense in accordance with the said survey, map, plans, profiles and specifications; and the entire expense of regulating, grad- ing, paving or otherwise improving said intervening or in- tersecting street, avenue or public highway, upon said changed grade thereof, in such manner and to such extent as shall be required by the said local authorities, shall be wholly borne by the said corporation or association. Source.—L. 1903, ch. 523, § 3. § 273. Application of this article. This article shall not apply to any railroad corporation and shall not be construed to authorize any change in the grade of any such street, avenue or pyblic highway except as to such portion thereof as is bounded by or lies within the lines of the property owned wholly by said corporation or association. Source.—L. 1903, ch. 523, § 4. MemBERSHIP CorporATIONS Law. 289 ARTICLE 20 Corporations for Raising and Breeding and Improving the Breed of Horses Sxcrion 280. Corporators. 281. Restriction upon commencement of business. 282. Right to hold race meetings and races. 283. Certificate of payment of stock. 284. Additional certificates by existing corporations. 285. State racing commission. 286. License for running races and steeplechases. 287. Revocation of licenses. 288. Trotting and fair associations, when entitled to privi- : leges. 289. Notices to be posted upon grounds. 290. Special policemen. 291. Personal liability of trustees or directors for viola- tions. 292. Annual tax on gross receipts. 293. Annual report to comptroller. 294. Comptroller may examine books. 2095. Tax receipts. 296. Penalty for unlawful racing and betting. 297. Increased or additional entrance fees. 298. Supervisors for collection of tax. § 280. Corporators. Any number of persons, not less than five, may become a corporation for the purpose of raising and breeding and improving the breed of horses, with all the general powers of corporations created under the laws of this state, by making, signing, acknowledging and filing a certificate which shall contain: 1. The name of the proposed corporation. 2. The objects for which it is to be formed, including a statement as to whether it is proposed to exercise the par- ticular powers conferred by section two hundred and eighty- two of this chapter, and specifying whether it is proposed to conduct trotting or running or steeplechase race meet- ings. 3. The amount and description of the capital stock. 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. 290 MemMBersHIP Corporations Law. 5. The location of its principal business office. 6. Its duration, which shall not exceed fifty years. ° 9, The number of its directors, not less than five nor more than thirteen, who shall each be a stockholder having at least five shares of stock. : 8. The names and post-office addresses of the directors for the first year. g. The post-office addresses of the subscribers and a statement of the number of shares of stock which each agrees to take in the corporation. No certificate of incorporation under this section wherein the right to conduct running or steeplechase race meetings is claimed, shall hereafter be filed without the approval of the state racing commission indorsed thereon or annexed thereto, stating that, in its opinion, the purposes of this article and the public interests will be promoted by such incorporation, and that such incorporation will be con- ducive to the interests of legitimate racing. Source.—L. 1895, ch. 570, § 1, as am’d by L. 1902, ch. 257. Cross References. For provisions generally applicable to incorporation, see notes under § 41, ante. See Agricultural Law, § 292, as to state fairs. § 281. Restriction upon commencement of business. No corporation organized under the provisions of this article ‘shall engage in the prosecution or management of its busi- ness until the whole of its capital stock shall have been subscribed, nor until it shall have filed in the offices where its certificates of incorporation were filed, a further certifi- cate stating that the whole of its capital stock has been in good faith subscribed, executed and acknowledged by its president er vice-president and treasurer or secretary, and verified by them to the effect that the statements contained in it are true. ' Source.—L. 1895, ch. 570, § 2. § 282. Right to hold race meetings and races. Any cor- poration formed under the provisions of this article, if so Mempersuip Corporations Law. 291 claimed in its certificate of organization, and if it shall com- ply with all the provisions of this article, and any other cor- poration entitled to the benefits and privileges of this article as hereinafter provided, shall have the power and right to hold one or more trotting or rufning race meetings in each year, and to hold, maintain and conduct trotting or running races at such meetings. At such trotting or running race meetings the corporation, or the owners of horses engaged in such races, or others who are not participants in the race, may contribute purses, prizes, premiums or stakes to be contested for, but no person or persons other than the owner or owners of a horse or horses contesting in a race ‘shall have any pecuniary interest in a purse, prize, premium or stake contested for in such race, or be entitled to or re- ceive any portion thereof after such race is finished, and the whole of such purse, prize, premium or stake shall be allotted in accordance with the terms and conditions of such race. Such meetings shall not be held except during the period extending from the fifteenth day of April to the fifteenth day of November, inclusive, in each year, nor upon any running course for more than forty days, nor upon any trotting course for more than fifteen days, nor upon any steeplechase course for more than five days, within such period. No races are authorized or shall be permitted ‘except during such period nor except between sunrise and sunset. Source.—L. 1895, ch. 570, § 3, as am’d by L. 1897, ch. 446. An agreement whereby a person agreed to train certain horses for the owner and to prepare them for racing for which services the compensation was to be $100 a month and expenses and in addition “ten per centum of all sums of money on purses which might be won or earned” is not in violation of the above provi- sion prohibiting anyone but owners to have any pecuniary interest in prizes. The evident purpose of the contract was to measure the compensation to be paid by the sum of money won by the owner. Brien v. Stone, 82 App. Div. 450 (1903). § 283. Certificate of payment of stock. Except as pro- vided in this article, no corporation or association hereafter ‘ organized under this article or heretofore organized in pur-- 292 MEMBERSHIP CorrorATIONS Law. suance of law for any purpose authorized by this article, shall have any of the powers conferred by section two hun- dred and eighty-two hereof until it shall have filed in the office or offices where its certificate of incorporation was filed, a further certificate stating that its capital stock has been fully paid in in cash, and if claiming the right to con- duct running race meetings, that it actually maintains a race track of not less than one mile in length or circumference, the location of which shall be specified in such certificate. ff such corporation or association was organized after the first day of February, nineteen hundred and two, and it claims the right to conduct running race meetings, the cer- tificate must also have indorsed thereon, or annexed thereto, the approval of the state racing commission. Such cer- tificate shall be executed and acknowledged by its president or vice-president and its treasurer or secretary, and verified by them to the effect that the statements contained in it are true. In the case of racing courses to be used for run- ning races or steeplechases, a license from the state racing commission must also be obtained in the manner hereinafter provided, and such license be filed with such certificate. Source.—L. 1895, ch. 570, § 4, as am’d by L. 1902, ch. 257. § 284. Additional certificates by existing corporations. | 1. Any corporation heretofore or hereafter formed under the laws of this state for raising, breeding or improving the breed of horses, or formed or entitled to the benefits or privileges of an act, entitled “An act for the incorporation of associations for the improvement of the breed of horses and to regulate the same and to establish a state racing commission,” upon filing a certificate that its capital stock has beenefully paid in in cash or property in accordance with the provisions of the law in force at the time of is- suance thereof, shall be deemed to have complied with the requirement of any statute or statutes of this state, provid- ing for the filing of a certificate that the capital stock of such corporation has been fully paid in in cash, or requiring the filing of such certificate as one of the conditions upon ‘MEMBERSHIP Corporations Law. 293 which any rights or privileges may be obtained under or pursuant to such statute or statutes. 2. Such corporation, its officers, directors and trustees, shall be subject to all other provisions of such statute or statutes, and, subject to the conditions and restrictions thereof, shall be entitled to obtain and enjoy all the benefits and privileges thereof with the same force and effect as if such corporation were created by or pursuant to the pro- visions of such statute or statutes. Source.—L. 1895, ch. 573, §§ 1, 2. § 285. State racing commission. There shall hereafter be a state racing commission, consisting of three persons, to be appointed by the governor, and who shall hold office for the term of five years, no two of whom shall be mem- bers of the same racing association. They shall receive no compensation for their services but shall be paid their nec- essary traveling and other expenses. Such commission shall appoint a secretary, who shall serve during their pleasure, whose duty it shall be to keep a full and faithful record of the proceedings of such commission, preserve at the gen- eral office of such commission all books, maps, documents and papers intrusted to his care, prepare for service such papers and notices as may be required of him by the com- mission, and perform such other duties as the commission may prescribe. He shall have the power, under the direc- tion of the commission, to issue subpcenas for witnesses and to administer oaths in all cases pertaining to the duties of his office. The total annual expenses of the state racing commission, including the salary of the secretary, shall not exceed the sum of five thousand dollars. Such expenses shall be paid by the several racing or steeplechase corpora- tions or associations, owning or operating such race tracks, to be apportioned by the comptroller, who shall, on or be- fore the first day of December in each year, assess upon each of such corporations or associations its just proportion of such expenses, and such assessment shall be collected in the manner provided by law for the collection of taxes 204. MEMBERSHIP Corporations Law: upon corporations. Such commission shall annually make a full report to the legislature of its proceedings for the year ending with the first day of the preceding December, and such suggestions and recommendations as it shall deem de- sirable. ; Source. —L. 1895, ch. 570, § 5, as am’d by L. 1896, ch. 380. § 286. License for running races and steeplechases. Any corporation or association desiring to obtain the benefits of the provisions of section two hundred and eighty-two of this article, if proposing to conduct a race-course or race meeting for running races or steeplechases, may annually apply to the state racing commission for a license to con- duct running races and race meetings or steeplechases and steeplechase meetings, as the case may be. If, in the judg- ment of such commission a proper case for the issuance of such license is shown, it may grant such license, for a term of one year. Every such license shall contain a condition that all running races or race meetings conducted there- under shall be subject to the reasonable rules and regula- tions, from time to time prescribed by the Jockey club, a corporation organized under the laws of the state of New York, and that all steeplechase meetings or steeplechases shall be subject to the reasonable rules and regulations from time to time prescribed by the National steeplechase asso- ciation, a corporation organized under the laws of the state of New York. Any rule or regulation of such Jockey club or National steeplechase association may be modified or abrogated by the state racing commission, on giving such Jockey club or National steeplechase association an oppor- tunity to be heard. Source.—L. 1895, ch. 570, § 6. The objet of this section was to insure that racing in this state was properly and honestly conducted, not to prevent com- petition between the several racing associations nor to secure any special pecuniary benefit to any of them. Peo. ex rel. Empire City Trotting Club v. State Racing Com., 190 N. Y. 31 (1909). Where the ground of refusing a license was that the racing season has been divided up among six other tracks and that the granting of the license would interfere with racing on other tracks, such refusal is capricious and arbitrary and mandamus will lie to MemsBersuip Corporations Law. 295 compel the issuance of the license. Peo. ex rel. Empire City Trot- ting Club v. State Racing Com., 190 N. Y. 31 (1907). . A person who becomes a patron of a race conducted by an asso- ciation formed under this act subjects himself to the control of the state and rules of the jockey club and may be denied any of the privileges enjoyed by the public because of his infraction of the jockey club rules. Grannan v. Westchester Racing Ass’n, 153 N. Y. 449 (1807), which see for full discussion of the scope, purposes and validity of this section. § 287. Revocation of licenses. If any corporation or as- sociation to which a license shall be granted shall fail or refuse to comply with the provisions of this article, or with the terms and conditions of its license, or if for any other reason the continuance of such license shall not be deemed conducive to the interests of legitimate racing, the said com- mission, upon the complaint of the said Jockey club, in the case of race-courses to be used for running races, or upon the complaint of the said National steeplechase association, in the case of race-courses to be used for steeplechases, shall have the power to cancel and revoke such license. Writ- ten notice of such complaint shall be given to such corpora- tion or association by said state racing commission within five days after receiving such complaint, which notice shall specify a time and place of hearing thereon. If the com- mission cancels and revokes such license all powers exer- cised under section two hundred and eighty-two of this ar- ticle by the corporation or association to which such license was granted shall cease and determine. Source.—L. 1895, ch. 570, § 7. § 288. Trotting and fair associations, when entitled to privileges. Any trotting association, incorporated under the laws of the state of New York, and any state, county or other fair association shall be entitled to the privileges conferred by section two hundred and eighty-two of this article upon filing in the offices wherein its certificates of incorporation are filed, a certificate which shall set forth ‘its intention to avail itself of such privileges; and any such trotting association, or state, county or other fair associa- tion shall not be required to obtain any license or file any 296 MEMBERSHIP CorPporATIONS Law. other certificate. State, county and other fair associations entitled to conduct trotting races under the provisions of this article may also conduct running races in connection therewith, under the same provisions, and the provisions of this article requiring a race track to be of specified dimen- sions shall not apply to such association; but no running races shall be conducted for more than five days on any track or grounds, unless the license of the state racing commission therefor is first obtained. Source.—L. 1895, ch. 570, § 8, as am’d by L. 1896, ch. 380. § 289. Notices to be posted upon grounds. Every cor- poration to be organized under this article or which shall be entitled to exercise any of the powers conferred by sec- tion two hundred and eighty-two shall cause to be properly posted in conspicuous positions upon the grounds whereon such races are held, printed notices or placards in large and legible type, which notices or placards shall be to the effect that all disorderly conduct, pool-selling, book-making or any other kind of gambling is prohibited, and such notices or placards shall contain a copy of section nine hundred and eighty-six of the penal law. Source.—L. 1895, ch. 570, § 9. § 290. Special policemen. For the purpose of preserving order and preventing offenses against the laws prohibiting gambling, the trustees or directors of any corporation created under the provisions of this article are hereby au- thorized to appoint from time to time five or more special policemen, and the same to remove at pleasure, who, when appointed, shall be police officers with the same powers within and about such grounds as are vested in constables of the town where such grounds are located, whose duty, when appointed, shall be to preserve order within and around the grounds and race-tracks of said corporation, to protect the property within said grounds, to eject or arrest all persons who shall be improperly within the grounds of such corporation or who shall be guilty of dis- orderly conduct, or who shall neglect or refuse to pay the ‘MEMBERSHIP CorPoRATIONS Law. 297 fees or to observe the rules prescribed by said corporation ; and it shall be the further duty of said policemen, when appointed, to prevent all violations of law with reference to pool-selling, book-making and other gambling, and to arrest any and all persons violating such provisions, and to convey such person of persons so arrested, with a state- ment of the cause of such arrest, before a magistrate having jurisdiction of such offense, to be dealt with according to law. The appointment of policemen in pursuance of this section shall not be deemed to supersede in any wise on the grounds and race-track of such corporation the authority of peace officers of the jurisdiction within which such grounds and race-track are located. Source.—L. 1895, ch. 570, § 10. § 291. Repealed by Laws of 1910, Chap. 486. § 292. Repealed by Laws of 1g10, Chap. 489, which contains this provision: “No person or corporation shall be liable to a tax imposed by Section 292 on account of any trotting or running race meeting held subsequent to April fifteenth, nineteen hundred and ten; but any such tax which shall have accrued and which remains unpaid on such date shall be paid by the person or corporation liable therefor in the same manner and sub- ject to the same penalties for failure to pay the same as if this act had not taken effect.” § 293. Repealed by Laws of 1910, Chapter 489. § 294. Repealed by Laws of 1910, Chapter 489. § 295. Repealed by Laws of 1910, Chapter 489. § 296. Penalty for unlawful racing and betting. All rac- ing or trials of speed between horses or other animals for any bet, stake or reward, except such as is allowed by this article or by special laws, is a public nuisance; and every person acting or aiding therein, or making or being inter- ested in such bet, stake or reward is guilty of a misde- meanor and upon conviction is punishable by imprisonment in the county jail or penitentiary for a period of not more than one year; and in addition to the penalty prescribed therefor he forfeits to the people of this state all title or interest in any animal used with his privity in such race 298 MEMBERSHIP CorPorATIONS Law; or trial of speed, and in any sum of money or other property betted or staked upon the result thereof. Source.—L. 1895, ch. 570, § 16, as am’d by L. 1908, ch. 506. § 297. Increased or additional entrance fees. A corpora- tion or association authorized by or entitled to the benefits of this article, conducting a running or trotting or steeple- chase meeting, shall have the right to charge increased or additional entrance fees for admission to any special por- tion or portions of the grounds of such corporation or asso- ciation, unless such pool-selling or book-making as is pun- ishable by fine or imprisonment, or other acts so punishable, be thereon authorized or knowingly permitted. Source.—L. 1895, ch. 570, § 18, as am’d by L. 1896, ch. 380; L. 1897, ch. 446, and L. 1908, ch. 506. § 298. Repealed by Laws 1910, Chapter 489. ARTICLE 21 Laws Repealed; When to Take Effect Sgcrion 310. Laws repealed. 311. When to take effect. § 310. Laws repealed. Of the laws enumerated in the schedule hereto annexed, that portion specified in the last column is hereby repealed. § 311. When to take effect. This chapter shall take effect immediately. SCHEDULE oF Laws REPEALED Laws of Chapter Section 1796...... AG shin 22s teen Coa neaies All IWI1...... LOO Sei sie vedanta Mees 6 8 Re TBI: 104. ic cawnses cscergnncen eres 13 1818...... G06. cece steehevendee. 1823 B28 aiisnie es sees eesaue ses All 1825...... IQ iisiewis ed Sti eos wens. All 1841...... 100. seis Se egdesnaatiee s 3, 6 1847...... T93kG cai aca eanacen All 1848...... 200 viveca sx causeceuewas 3, 6 1848...... BID sy oa ctaneengad on eee 1-5; 6, except proviso; 7-10 MEMBERSHIP CorPORATIONS Law. Laws of Chapter 1851...... 1852...... : 1853...... 122, 339, 305, 487...... 1854...... 50, 112, 238, 269...... 1855...... MOB Ss nacantin Gian aie 1857...... 302, S3lic ds saacesacies 18590...... BOs siege deinen vets 1860...... 163, 238, 242, 523...... 1861...... 58, 94, 95, 230....... 1862...... 284, 302, 438.......... 1864...... B55. Al k ce beanies dctaes 1865...... SOB i cisdvs Haw eae wee es 1865...... 608s joss dsgeeeheeee ys 1866...... 273, 445, 457..-. cece 1867...... FOO dines. stpahsiela'v arenie< 3% 1868...... AOD vcs tacie scaicrerieve qhtih eg. da 1869...... 326, 629, 708......... 1870...... GT 627s suspects euch odessa 1871...... 68, 164, 378, 419, 705, B75 eases sdeeeva wae 1872...... 104, 116, 209, 248, 609, O49 sido dase oes 1873...... BOL essere: ayes ema 1873...... 907i ese oe siioncs's seats 1873...... OOS) Jiaedowcakecocecss 1874..... a (85, 245 evar swede sna 1875...... 35, 130, I150........45 1875...... QO ossstis bans BRASS 1875...... 343, 419, 452, 512...... 1876...... 53, 190, 346.......... 1877...... 31, 136, 156, 228, 380, 426, 469........... 1878...... GK 2210's os seed wae yas e es 1879...... 107, 108, 203, 252, 411, AUB ie Ri eisiere ed riiess Se 1880. ... 98, 246, 566.......... 1881...... 139, 207, 254, 388, 412, 428, 497, 526, 641... 1882...... 268, 367... ...cecceeee A 1883...... 287, AAG. cea ees wrasse 1884...... 68, 140, 216, 433, 436 1885...... 66, 88, 171, 204, 474.. 1886...... 30; “1828 csi dades wrens 1886...... B3Gs sivclsv sardach wanna ces 1886...... 333, 546, 666.......... 1887...... BUS; Sadly ctiens cakewees4 1887...... BIG Genera awauan 1887...... BIT. eockedee pew aees 1887..... . 479, 501, 506, 645..... 299 Section except proviso in § 6 5, except proviso; 6-10 except proviso in § 7 All All All All All All All All All All All 1-6; 7, except proviso; 8-10 All All 1-4; 5, except proviso; 6-9 1-6; 7, except proviso; 8-10 All 300 Laws of Chapter 1888...... 293, 299, 340, 359, 391, 415). 4842000605 sew ss 1888...... MOO seas sststgisecace ipeaie ek 1888...... B30 eccisccanwe shane ce3 1889...... B38 eie 24 es ded ase aa 1889...... OS hsesvtatena et nana ees 1889...... B03; 380ssaesedes csaces 1890...... 27, 68, 104, 118, 229.. 1890...... BBO 3icksid 3s Dials ee Caen 1890...... 4255 S18ia cde eae sae es 1891...... 10, 167, 213, 344, 382 1892...... 197, 291, 333, 498, 511, 7 a.) 1893...... 34, 50, 180, 455, 465, 469, 602, 682....... - 7894...... 105, 139, 197, 256, 267, 325, 332, 430, 709... 1895...... 149, 209, 493, 559, 570, 573, ZASiowr seed sess 1896...... 193, 325, 380, 469, 476, 542, O81..........6. *1897..... 120% ce sthe tes sae eee wae 1897...... 205, 327, 446, 463, 477, 538. siesta eesae 1898...... JOO iz asa uchaccata.ccaestiaorerave oe T1898..... BAS esate a nod 3.4 eavetie OD 1899...... 104, 207, 292, 360, 414 1900...... 208, 333, 404, 480, 541, 681, 715, 745, 761... IQOI...... 390, 415, 436, 469, 504 1902...... 73, 169, 257, 341, 439, BS Dies cheaauels eikiraedl aS I1903...... 27S, B23). eceantceas aueas 1903606 as 628 ia cc adoro ete mien 1904...... 237, 271, 420, 431...... 1905...... 123, 271, 320, 411, 663 1906.. AO3s site vasa cgeeaes 1907...... 61, 177, 326, 486, 401 1908...... 9 veswse cea sdeeisadas 1908...... MOA i i es Set 1908...... SOOn i nemen sabes eee MEMBERSHIP CORPORATIONS Law. Section 1-4 All All' 1-3, 5-11 Alt All 1-5; 6, except proviso; 7, 8 All All All All All All All All All All Part relating to Membership Corporations All All All All ‘ All, except pt. amending pro- viso in L. 1848, ch. 319, § 6 All All All All All I, pt. amending L. 1847, ch. uae § 10, first two sentences * Stricken out by L. 1909, ch. 240, § 109, thereby reviving the statute. +t Added by L. 1909, ch. 240, § 104. RELIGIOUS CORPORATIONS LAW. Explanatory Memorandum of the Revision Commissioners The Religious Corporations Law was enacted in 1895 (L. 1895, Chap. 723), and was rewritten without substantive change in 1909 by the Board of Statutory Consolidation, upon whose report to the legislature this law was re-enacted as Chapter 53 of the Laws of 1909. The Commissioners of Statutory Revision in 1895 in mak- ing their report to the legislature accompanied the same with an explanatory memorandum, the text of which is as follows: Memorandum of Revision Commissioners. This chapter is intended to be a substitute for all existing general laws for the creation and temporal administration of religious corpo- rations. The laws which it will supersede and repeal are mainly con- tained in the eighth edition of the Revised Statutes, from pages 1881 to 1921, inclusive, except Laws 1883, chapter 257, at pages 1913-16, which is a special law and will be left untouched by the revision. All the provisions of the laws so repealed, retained in the revision, are contained in the General Corporation Law, or in this chapter, except Laws 1853, chapter 323, 1835, chapter go, section 9, relating to change of name of religious corporations, which is incorporated in section 2410 ff. of the Code of Civil Procedure. The first general law of this State for the incorporation of churches was chapter 18 of the Laws of 1784, seventh session, and was applic- able to all denominations. Certain features of the Dutch Reformed church did not harmonize with this law and a second general law was enacted, chapter 61, Laws of 1788, eleventh session, applicable only to Dutch Reformed churches. For similar reasons a third gen- eral law, applicable only to Protestant Episcopal churches, was en- acted, chapter 25, Laws of 1795, eighteenth session. These three statutes were consolidated in chapter 79 of the revision of 1801, which ‘was substantially re-enacted as chapter 60 in the revision of 1813, which was not included in the Revised Statutes, and, as amended to date, is still in force. The general law of 1795, for the incorporation of Episcopal churches, was made the basis of section 1 of the act of 1813, now consisting 301 302 ReE.icious Corporations Law. of eighteen subdivisions; the general law for the incorporation of Dutch Reformed churches was made the basis of section 2 of the act of 1813; and the first general law of 1784, originally applicable to all churches, was made the basis of section 3. Separate statutes have since been passed for the incorporation of .Roman Catholic churches, Laws 1863, chapter 45; of Greek churches, Laws 1871, chap- ter 12; of Baptist and Congregational churches, Laws 1873, chapter 633, repealed by chapter 50 of Laws 1890; of Baptist churches, Laws 1876, chapter 329, and many supplemental and amendatory statutes have been passed since 1813, some of which made special provisions for particular denominations. Many useful provisions of the present law, now applicable to in- corporated churches only, are extended by article 1 to all religious corporations. Throughout the revision the members of the church or congregation, instead of the trustees, are made the corporation. The provision of the present law, occurring in almost every act re- lating to the incorporation of churches, requiring the filing of an an- nual or tri-ennial inventory and account, is omitted from the revision, and a judicial inquiry as to the amount of its property is substituted by section 13. The old provision was practically obsolete and rarely observed. So, too, all limitations on the amount of property which a religious corporation is enabled to hold are omitted from the re- vision, as superseded by section 12 of the General Corporation Law, which greatly extends the powers of non-business corporations in respect to the holding of property. Article 1 is applicable to all religious corporations. The material changes of substance in this article are as follows: The provision of the present law that the seats in churches which are originally established as free church corporations shall be forever free is omitted from section 6 of revision. Section 7 of revision authorizes properly executed deeds of lots in the cemetery of a religious corporation to be recorded. _ The present law makes the trustees of a common parsonage a cor- poration, while by § 9 of revision they are merely made the managing agents of the contributing corporations. Section 10, relating to the correction and confirmation of convey- _ances, enlarges materially the cases in which corrections can be made, and provides a scheme whereby a conveyance incorrectly stating the name of a corporation is made presumptively valid. . The provision of the present law, prohibiting the sale of “Gospel lots,” is omitted from section 11 of revision, as obsolete. Section 12, providing for the consolidation of religious corporations, allows the ngw church to be a different denomination than either church consolidating; but this is deemed sufficiently guarded by the provision that the governing body of each consolidating church shall consent to the consolidation. Section 16, providing for the incorporation of mission and Sunday school corporations, is new. Article 2 of the revision contains the special provisions applicable to Episcopal churches. The article was prepared after consultation with an eminent authority of the church, and embodies, it is believed, REticious Corporations Law. 303 the views of that denomination. Several changes are made in the present law, as appear from the notes to the sections of the articles. Article 3 of the revision contains the special provisions applicable to Roman Catholic and Greek churches. The provision of section 50, that during a vacancy in the office of archbishop or bishop the admin- istrator of the diocese and his vicar and representative shall be trustees, is new. Section 11 provides that the real property of a Roman Catholic church shall not be sold, mortgaged or leased without the consent of the archbishop or bishop, or in case of their absence or inability to act, of the vicar-general or administrator of the diocese. These changes were made on the request of the authorities of that denomination. Article 4 contains the special provisions relating to Reformed Dutch, Reformed Presbyterian and Lutheran churches. The material change made by this article is in allowing churches of this class to incorporate, originally, either by the ex-officio or elective method of choosing trustees. Article § contains the special provisions for the incorporation and government of churches of other denominations. The material change is in the qualification of voters. Section 82 provides for a uniform qualification. It does not change substantially the qualification of voters in Baptist churches. The qualification of voters for other churches, generally, has remained unchanged since Laws 1784, except for the amendment of 1867, chapter 656, striking out the word “male”; and by the present law is as follows: “Every person of full age who has statedly worshipped with such church, congregation or society, and has formerly been considered as belonging thereto.” The indefinite character of this statement was illustrated in People ex rel. Sturgess v. Keese, 27 Hun, 484. The change proposed has the advantage of a uniform statement for all churches, and will tend to diminish doubted controversy. Article 6 contains the special provisions for the incorporation of two or more churches as a union church, without material change. s * * * * * * + * * * * RELIGIOUS CORPORATIONS LAW. Laws of 1909, Chapter 53, Entitled: ‘“‘An Act in Relation to Religious Corporations, Constituting Chapter Fifty-one of the Consolidated Laws,” as amended to the Com- mencement of the Legislative Session of 1914. CHAPTER 51 OF THE CONSOLIDATED LAWS ReEticious Corporations Law. . Short title and definitions (§§ 1, 2). . General provisions (§§ 3-27). . Protestant Episcopal parishes or churches (§§ 40-46). . Presbyterian churches (§§ 60-70). Roman Catholic and Greek churches (§§ 90-92). . Reformed Dutch, Reformed Presbyterian and Lutheran churches (§§ 110-116). 7. Baptist churches (§§ 130-140). 8. Congregational and Independent churches (§§ 160-171). 9. Free churches (§§ 180-183). 1o. Other denominations (§§ 190-205). 11. Union churches (§§ 220, 221). 12. Laws repealed; when to take effect (§§ 260, 261). ARTICLE Aupwpy A ARTICLE 1 Short Title and Definitions Section 1. Short title. 2. Definitions. § 1. Short title. This chapter shall be known as the “Re- ligious Corporations Law.” Source.—Formerly Religious Corp. L. (L. 1895, ch. 723), § 1. § 2. Definitions. A “religious corporation”. is a corpo- ration created for religious purposes. 305 306 RELIGIous Corrorations Law. An “incorporated church” is a religious corporation cre- ated to enable its members to meet for divine worship or other religious observances. An “unincorporated church” is a congregation, society, or other assemblage of persons who are accustomed to statedly meet for divine worship or other religious observances, without having been incorporated for that purpose. The term “minister,” includes a clergyman, pastor, rector, priest, rabbi, or other person having authority from, or in accordance with, the rules and regulations of the governing ecclesiastical body of the denomination or order, if any, to which the church belongs, or otherwise from the church, to preside over and direct the spiritual affairs of the church. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723), § 2. Distinction between Corporation and Church. Although the church may exist within the pale of the corporation, the two are in no respect correlative. The objects and interests of the former are moral and spiritual; the latter deals exclusively with things temporal and material. Petty v. Tooker, 21 N. Y. 267 (1860). Religious Society. The words “religious society” when used in the statutes generally refer to incorporated religious societies. Church of St. Monica v. Mayor, 119 N. Y. 91 (1890). The church is a voluntary association having power to adopt its own rules for admission and discipline, and administer them in its own way independent of any control by the courts while free from any intention to injure its members or those not belonging to it. Peo. ex rel. Dilcher v. German United Ev., etc, Church, 53 N. Y. 103 (1873). The legislature did not intend to include within the term “religious corporations” any of the numerous benevolent, charitable, philanthropic and missionary organizations created either under special laws or under pe Membership Corporations Law. Matter of Watson, 171 N. Y. 256 1902). A corporation organized to provide churches for seamen is a re- ligious corporation. Matter of Prall, 78 App. Div. 301 (1903). « ARTICLE 2 General Provisions Section 3. Filing and recording certificates of incorporation of re- ligious corporations. 4. Property of unincorporated society transferred by its in- corporation, RELicIous Corporations Law. 307 s. General powers and duties of trustees of religious cor- porations. 6. Acquisition of property by religious corporations for branch institutions; establishment, maintenance and management thereof. 7. Acquisition of property by religious corporations for cemetery purposes; management thereof. . Lot owners’ rights. g. Removal of human remains from one cemetery of a re- ligious corporation to another cemetery owned by it. io, Acquisition of property by two or more religious corpo- rations for a common parsonage. 11. Correction and confirmation of conveyances to religious corporations, 12. Sale, mortgage and lease of real property of religious corporations, 13. Consolidation of incorporated churches. 14. Judicial investigation of amount of property of religious corporations. 15. Corporations with governing authority over churches. 16. Property of extinct churches. 17. Property of extinct Free Baptist churches. 18. Dissolution of religious corporations. 19. Corporations for organizing and maintaining mission churches and Sunday schools. 20. Corporations for acquiring parsonages, for presiding elders, and camp-meeting grounds. 21. Corporations for acquiring camp-meeting grounds for the Reformed Methodist denomination. 22. Establishing and maintaining a home for aged poor. 23. Powers of churches created by special laws. 24. Government of churches incorporated prior to January first, eighteen hundred and twenty-eight. 25. Pastoral relation. 26. Worship. 27. Reservation as to Baptist and Congregational churches. eo § 3. Filing and recording certificates of incorporation of religious corporations. The certificate of incorporation of a religious corporation shall be acknowledged or proved be- fore an officer authorized to take the acknowledgment or proof of deeds or conveyances of real estate, to be recorded in the county in which the principal office or place of wor- ship of said corporation is or is intended to be situated, and shall be filed and recorded in the office of the clerk of said county. If there is not, or is not intended to be, any such office or place of worship, the certificate shall be filed and recorded in the office of the secretary of state. - 308 RE.icious Corporations Law. The recording of any certificate of a religious corporation organized under provisions of “An act to provide for the incorporation of religious societies,” passed April fifth, eighteen hundred and thirteen, and of the acts amending the same, in the office of a clerk of a county prior to the pas- sage of chapter thirty-five of the laws of eighteen hundred and ninety-seven, instead of in the office of the register of such county, shall be regarded and construed and such re- cording is hereby declared to be of the same validity, force and effect as would have been the recording of such cer- tificate in the proper office. And every act, deed, matter and thing done or performed by every such religious society or corporation since the recording of its certificate in the office of said county clerk is hereby ratified, confirmed and declared to be as valid in all respects as if the said certificate had been properly and appropriately recorded in the office of the register of the county in which said religious society or corporation was organized; but this section shall not affect any suit or proceeding already commenced arising out of such original mistake. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723) § 3, am’d by L. 1896, ch. 336; L. 1897, ch. 35, § 1. Revised from L. 1813, ch. 60, § 1, sub. 7, am’d by L. 1868, ch. 803, and sub. 18 added by L. 1886, ch. 98; L. 1813, ch. 60, § 3, am’d by L. 1890, ch. 66; L. 1844, ch. 158. Correction of Informalities. In case of any informality in the certificate of incorporation, the same may be corrected by an amended certificate. Gen Corp. Law, Sec. 7, and cases there cited. Acknowledgment. The General Construction Law (L. 1909, chap. 27), section 11, pro- vides that when the execution of any instrument is required by law to be acknowledged, so as to entitle it to be filed or recorded in a public office, the acknowledgment may be taken before any officer then and there aythorized to take the acknowledgment of a deed of real property to entitle it to be recorded in a county clerk’s office, and shall be made and certified in the same manner as such acknowledg- ment of such deed. For provisions as to acknowledgment of deeds, see Real Prop. Law, Sec. 298 et seq. An incorporator has no power in his capacity as notary public to take the acknowledgment of another incorporator to the certificate of incorporation, and an acknowledgment so taken is a nullity. Peo. ex rel. Erie R. R. Co. v. Bd. of R. R. Com’rs, 105 App. Div. 273 (1905). RE.Liclous CorPoraTions Law. 309 Corporate Name. The name must be in the English language. Gen. Corp. Law, § 5. The provision of Gen. Corp. Law, § 6, that the corporate name must indicate that the organization is a corporation does not by the terms thereof apply to a religious corporation. Change of Name. Where an order has been granted ex parte changing the name of a church, and it thereafter appears that another religious body claims to be entitled exclusively to the name proposed to be changed, the court has inherent power to vacate the order granting the petition, with leave to renew upon notice to the parties directly interested, although the statute does not provide for such revocation. Matter of Abyssinian Baptist Church, 13 Supp. g19 (1891). For general provisions as to change of name see Gen. Corp. Law, § 60 et seq., ante. Filing Certificate. It is to be noted that certificates of incorporation of religious cor- porations are to be filed and recorded only in the office of the county clerk except as stated in the last sentence of the first paragraph of the foregoing section; and except as to Free Churches as provided in § 180, post. Fees of County Clerk. The Code of Civil Procedure, § 3304, provides that a county clerk is entitled to the following fees: For recording any instrument which must or may legally be re- corded by him, ten cents for each folio. ee eK Kae * * For filing any paper required by law to be filed in his office, other than expressly provided for in this section, six cents. Effect of Incorporation. The corporation does not consist of the trustees alone, but of all the members. The trustees are the managing officers of the corpo- ration invested as to the temporal affairs with the powers conferred by statute, and with the usual discretionary powers of officers of civil corporations. Robertson v. Bullions, 11 N. Y. 243 (1854); Gram v. Prussia, etc., German Soc., 36 N. Y. 164 (1867); People’s Bank v. St. Anthony’s R. C. Church, 109 N. Y. 512 (1888) ; Watkins v. Wilcox, 66 N. Y. 654 (1876), aff’g 4 Hun 220; Peo. v. Hulburt, 46 N. Y. 110 and note. The trustees have no separate or individual authority to bind the corporation. Only when acting as a board can they perform or author- ize acts binding on the corporation. People’s Bank vy. St. Anthony’s R. C. Church, 109 N. Y. 512 (1888); Columbia Bank v. Gospel Tab.. Church, 127 N. Y. 361 (1891). Title to Real Property. Title to real estate held by the corporation is vested in the cor- poration itself and not in the trustees as such. The trustees for the 310 REtigious Corporations Law. time being have the custody and management of the property, but the fee is in the corporation. Bowen v. Irish Presbyterian Cong,, etc., 6 Bosworth 245, 265 (1860), and cases cited; Peo, ex rel. Fulton v. Fulton, 11 N. Y. 94 (1854). De Facto Corporation. To be a de facto corporation it must appear that there is a charter or some law under which a corporation with the powers assumed might lawfully be created, and that there has been a use of the rights claimed to be conferred by such charter or law. If the Jaw exists and the record exhibits a bona fide attempt to organize under it, very slight evidence of use beyond this is all that can be required. Meth. Epis. Un. Ch. v. Pickett, 19 N. Y¥. 482 (1859); Van Buren v. Gansevoort Ref. Ch., 62 Barb. 495. See, also, Gen. Corp. L., § 5, for additional cases. The imperfections of the record cannot be taken advantage of by a private individual who has entered into engagement with the cor- poration, Meth. Epis. Un. Ch. v. Pickett, 19 N. Y. 482 (1859). § 4. Property of unincorporated society transferred by its incorporation. All the temporalities and property of an un- incorporated church, or of any unincorporated religious society, body, association or congregation, shall, on the in- corporation thereof, become the temporalities and property of such corporation, whether such temporalities or property be given, granted or devised directly to such unincorporated church, society, body, association or congregation, or to any other person for the use or benefit thereof. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723), § 4. Re- vised from L. 1813, ch. 60, § 4; L. 1863, ch. 45, § 1; L. 1871, ch. 12 In Whom Title Vests. The corporation itself and not the trustees take the title to prop- erty. Peo. ex rel. Fulton v. Fulton, 11 N. Y. 94 (1854). The statute contemplates but one corporation from the same society or congregation. Trustees v. Bly, 73 N. Y. 323 (1878). The corporation becomes vested with the temporalities of the un- incorporated body by virtue of the statute. Trustees v. Bly, 73 N. Y. 323 (1878) ; Reformed Church of Gallupville v. School Craft, 65 N. Y. 134 (1875). Pi § 5. General powers and duties of trustees of religious corporations. The trustees of every religious corporation shall have the custody and control of all the temporalities and property, real and personal, belonging to the corpora- tion and of the revenues therefrom, and shall administer the same in accordance with the discipline, rules and usages Reticious Corporations Law. 311 of the corporation and of the ecclesiastical governing body, if any, to which the corporation is subject, and with the provisions of law relating thereto, for the support and main- tenance of the corporation, or, providing the members of the corporation at a meeting thereof shall so authorize, of some religious, charitable, benevolent or educational object conducted by said corporation or in connection with it, or with the denomination, if any, with which it is connected; and they shall not use such property or revenues for any other purpose or divert the same from such uses. By-laws may be adopted or amended, by a two-thirds vote of the cualified voters present and voting at the meeting for in- corporation or at any subsequent meeting, after written no- tice, embodying such by-laws or amendment, has been openly given at a previous meeting, and also in the notices of the meeting at which such proposed by-laws or amend- ment is to be acted upon. By-laws thus adopted or amended shall control the action of the trustees. But this section does not give to the trustees of an incorporated church, any control over the calling, settlement, dismissal or re- moval of its minister, or the fixing of his salary; or any power to fix or change the times, nature or order of the public or social worship of stich church. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723), § 5, as amended by L. 18096, ch. 336; L. 1807, ch. 144, and L. 1897, ch. 621. Revised from L. 1813, ch. 60, § 4; L. 1822, ch. 187, § 1; L. 1835, ch. go, § 8; L. 1875, ch. 79, § 4; L. 1876, ch. 176, § 1; L. 1876, ch. 320, § 6. Power to Hold Stocks. The weight of opinion sustains the view that non-stock corporations, namely, religious, charitable, literary and other corporations formed for similar purposes may rightfully invest their moneys in the shares of stock corporations. The power, if not expressly mentioned in their charters, is necessarily implied for the preservation of the funds with which such corporations are endowed and to render such funds pro- ductive. The same principle would seem to apply respecting stock acquired by the corporation through gift or bequest. The power to hold the stock would carry with it all rights of stockholders, inlcuding the right to vote, and at the same time would subject such non-stock corporation to all the liabilities to which an individual stockholder is subject. Pearson v. Railroad, 65 N. H. at p. 549 (1883); Hodges v. N. E. Screw Co., 1 R. I. at p. 347 (1850), cited with approval in Ang. & Ames. Corp. § 158; Helliwell on Stock and Stockholders p. 109; 312 Reticious Corporations Law. Thompson on Corp. § 4090; Cook on Corp. § 316, and see Gen. Corp. L. § 11, Subdiv. 3, ante. Liability for Negligence. For a full discussion of this subject see Haas v. Missionary Soc., 6 Misc. 281 (1893); Kellogg v. Church Charity Foundation, 128 App. Div. 214 (1908); Hordern v. Salvation Army, 199 N. Y. 233 (1910), and authorities there cited. The beneficiary of a charitable trust may not hold the corporation liable for the neglect of its servants. Hordern v. Salvation Army, 199 N. Y. 233 (1910). Trustees to Act as Board. The trustees must act officially and as a body, and not individually. Landers v. Frank St. M. E. Church, 114 N. Y. 626 (1889); Parshley y. Third M. E. Church, 147 N. Y. 583 (1895); Constant v. Rector, etc, of St. Alban’s Church, 4 Daly 305 (1872). See, also, “Effect of Incorporation,” under section 3, ante. It is not at all certain that trustees have power to contract a debt for the purpose of prosecuting a preacher charged with immorality before a church tribunal. Parshley v. Third M. E. Church, 147 N. Y. 583 (1895). Proxy Voting not Authorized. A trustee of a corporation is not permitted to delegate another per- son to represent him at a meeting of the board. Craig Med. Co. v. ‘Merch. Bank of Rochester, 59 Hun 561 (1881). Nor can a member be respected by the civil courts. Baxter v. McDonnell, 155 N. Y. 83 § 26. Jurisdiction of Civil Courts. Questions of faith, doctrine and discipline belong exclusively to ecclesiastical bodies, and civil courts will not review their determina- tions. Connitt v. Reformed Prot. Dutch Ch., etc. 54 N. Y. 551 (1874); Brundage v. Deardorf, 92 Fed. 214, 228 (1899); Waller v. Howell, 20 Misc. 236 (1897), and cases cited; Baxter v. McDonnell, 155 N. Y. 83 (1898) ; Westminster Pres. Ch. v. Trustees of Presbytery, 142 App. Div. 855, 861 (1911). Redress must be had by ecclesiastical proceed- ings under the laws adopted by the church for its government and that of its members. Peo. ex rel. Dilcher v. German United Ev., etc., Church, 53 N. Y. 103 (1873). An action will not lie to restrain a rector from striking names from the parish register, for the question of church membership is purely ecclesiastical, and no civil right is involved. Waller v. Howell, 20 ‘Misc. 236 (1897). The general rule is that the right of civil courts to interfere in ecclesiastical matters exists only where there are conflicting claims to church property, or funds, or the use of them, or where civil rights are involved. Rector of St. James’ Ch. v. Huntington, 82 Hun 125 (1894) ; Baxter v. McDonnell, 155 N. Y. 83 (1808), reversing 18 App. Div. 235; Westminster Pres. Church v. Findley, 44 Misc. 173 (1904). Reticious Corporations Law. 313 A priest or minister of any church by assuming that relation neces- sarily subjects his conduct in that capacity to the laws and customs of the ecclesiastical body from which he derives his office and in whose name he exercises his functions, and when he submits questions con- ‘cerning his rights, duties and obligations as such priest or minister to the proper judicatory, and they have heard and decided according to the prescribed forms, such decision is binding upon him: and will be respected by the civil courts. Baxter v. McDonnell, 155 N. Y. 83 (1898). ’ If a corporator is improperly excluded from the enjoyment of the corporate property for religious worship and instruction, he can main- tain an action therefor, and the injury to lis feelings will be con- sidered in fixing damages. Mandamus will not lie. Peo. ex rel. Dilcher v. German United Ev., etc., Church, 53 N. Y. 103 (1873). Authority to Ministers. ‘It is to be noted that while this section gives the trustees control of the property of the corporation and authorizes them to administer it, the last sentence provides that the trustees are not, by virtue thereof, given control over the appointment, removal or salary of ministers. The provisions affecting ministers are found in other sections as fol- lows: Protestant Episcopal Churches, Sec. 42, post; Presbyterian Churches, Sec. 61, post; Christian Orthodox Catholic Church, Sec. 91, post; Reformed and Dutch Reformed, Secs. 113 and 114, post; Reformed Presbyterian, Sec. 115, post; Baptist, Sec. 139, post; Congregational and Independent, Sec. 170, post; Other denominations, Sec. 200, post. These provisions must be read in connection with Sections 25, 26 and 27, post, which make the laws and regulations of the religious denomination to which the church belongs control over any provisions of this chapter, except in the case of Baptist and Congregational churches, and those having a congregational form of government. Diversion of Temporalities. Prior to 1875 the religious corporation laws did not recognize any denominational control over the property of a religious corporation, and a majority of the members, being the congregation, could lawfully change the creed and religious doctrine to be expounded from one denomination to another. Robertson v. Bullious, 11 N. Y. 243 (1854); Petty v. Tooker, 21 N. Y. 267 (1860); Gram v. Prussia, etc., German Soc. 36 N. Y. 164 (1867); Watkins v. Wilcox, 66 N. Y. 654 (1876), aff'g 4 Hun 220; Westminster Pres. Ch. v. Trustees of Presbytery, 142 App. Div. 855 (1911). Under laws of 1875, ch. 79, sec. 4, and similar statutes subsequently enacted, the trustees were required to hold the property and admin- ister the temporalities according to discipline, rules and usages of the denomination to which the church members belong. These pro- 314 Rexicious Corporations Law. visions are now found in Section 5, supra, and section 69, subdivision 3, post, and under them an attempted diversion of the property from one sect to another may be enjoined. Isham v. Trustees, 63 How. Pr. 465 (1882); First Reformed Presb. Church v. Bowden, 14 Abb. N. C. 357 (1883); Isham v. Fullager, 14 Abb. N. C. 363 (1881); Peo. ex rel. Peck v. Conley, 42 Hun 98 (1886).; and see Briston v. Burr, 120 N. Y. 427 (1890). The Trinity Church corporation, although not incorporated under a general or special law, is nevertheless exempted from the provisions of Section 5, because its charter, granted by the British Crown in 1697, is a contract the obligation of which cannot be impaired. Burke v. Rector, etc., of Trinity Church, 63 Misc. 43 (1909), aff’d, no op. 132 App. Div. 930. ‘What Is a Diversion. If the trustees of a Presbyterian church continue to maintain a minister who has been duly deposed by the Presbytery on a charge of unsoundness in faith and doctrine, this is a misuse of the tem- poralities constituting a diversion of the corporate property. Isham v. Fullager, 14 Abb. N. C. 363 (1881); Isham v. Trustees of First Presbyterian Ch., 63 How. Pr. 465 (1882). Where the trustees refuse to receive a minister duly appointed, and to open the meeting house to him for the purpose of conducting divine worship, mandamus will lie to compel such action. Peo. ex rel. Peck v. Conley, 42 Hun 98 (1886). ‘Who May Maintain Action. One or more members may maintain an action on their own behalf and for the benefit of all other members to enjoin the diversion. Isham v. Fullager, 14 Abb. N. C. 363 (1881); First Reformed Pres. Ch. v. Bowden, 14 Abb. N. C. 357 (1883). Trustees; Forfeiture of Office. If trustees of one church become incorporators in another religious corporation, they cease to be members and trustees of the former. Matter of M. E. Society v. Perry, 5: Hun 104 (1889); Laight St. Bap. Ch. v. Noe, 12 How. Prac. 497 (1855); First Ref. Pres. Ch. v. Bow- den, 10 Abb. N. C. 1 (1880), aff’d on op. below, 14 Abb. N. C. 356. Where the trustee of a religious corporation is also a trustee of a bank, he forfeits the latter office pursuant to Banking Law, §§ 140 and 142, if the religious corporation borrows money from the bank, for as trustee of the church he is indirectly borrowing from the bank. Opinion of Attty. Gen., 1912. Report of 1912, Vol. II, p. 318. Title to Office, How Determined. Before persons claiming to have been elected trustees can main- tain an action in the name of the corporation to restrain others also claiming to be trustees from closing the church, and from preventing the pastor from conducting services, they must establish their title by a direct proceeding in the nature of quo warranto. The court will not ” Reticious Corporations Law. 315 try the question of title in the equity suit. North Baptist Church v. Parker, 36 Barb. 171 (1862). An injunction will not lie in favor of legally elected trustees to re- strain individuals having no right to the office from assuming to act as such. The remedy is quo warranto. Hartt v. Harvey, 32 Barb. 55 (1860); North Baptist Ch. v. Parker, 36 Barb. 171 (1862). See Gen. Corp. Law § 32, ante, and Code Civ. Pro. § 1948, post. Authority of Officers. There is no presumption that a treasurer of a religious corporation has power to borrow money, sign notes and bind the corporation. Wilson v. Tabernacle Bap. Church, 28 Misc. 268 (1899), and the authority of the person presuming to act for the corporation must be shown. People’s Bank v. St. Anthony’s R. C. Church, 109 N. Y. 572 (1888) ; Columbia Bank v. Gospel Tab. Church, 127 N. Y. 361 (1891). Where a corporation uses borrowed money it is liable therefor, al- though the trustees were unaware that the treasurer had borrowed. Wilson v. Tabernacle Bap. Church, 28 Misc. 268 (1899). The secretary and treasurer of a Sunday school maintained by a religious corporation, who has received contributions for an organ fund, will, on severing her connections with the church, be directed to pay the money to the church. She is deemed the agent of the corporation in making the collection, and not of the contributors. The church will take the fund for the specific purpose for which it was donated. First Ch. of Christ Scientist v. Schreck, 70 Misc. 645 (1911). A religious corporation, like any other, is bound by the acts of its authorized agents in matters that are within its corporate capacity, and may by the enactment of by-laws or the distribution of the exer- cise of its powers among its various officers, or by conferring authority upon special agents, so charge itself as to become amenable for the acts of individuals representing it and acting by its authority. Con- stant v. Rector, etc., of St. Alban’s Church, 4 Daly 305 (1872). The trustees of a religious corporation can alone bind the corporate body, and to execute this power they must meet as a board so that they may hear each other’s views, deliberate and decide. The sepa- rate action of the trustees individually without meeting and consult- ing together as a board, even though a majority in number should agree upon a certain act, is not binding upon the corporation and cannot of itself create a corporate liability. Constant v. Rector, etc., of St. Alban’s Church, 4 Daly 305 (1872). If the trustees change the securities of a trust fund from those authorized by law to those unauthorized, they are personally liable for any loss sustained, irrespective of their good faith. Matter of Congregational Ch. in Union Village, 6 Abb. N. C. 398 (1878). Where a contract is made with the corporation the president of the corporation cannot sue thereon in his own name as president. Lowen- thall v. Wiseman, 56 Barb. 490 (1868). A deed to trustees de facto of an unincorporated religious society conveys title to the society. Bundy v. Birdsall, 29 Barb. 31 (1859). The president has no authority by virtue of his office to employ a 316 RELIGIous CorpoRATIONS Law. real estate broker to sell property belonging to the corporation. Hart v. Congregation Shearith Israel, 17 J. & S. 523 (1883). It seems to be ultra vires for a religious corporation to conduct a fair to raise funds. Constant v. Rector, etc., of St. Alban’s Church, 4 Daly 305 (1872). Trustees de facto have possession of the place of meeting and, their possession being under color of right, they are entitled to maintain trespass for an injury to the meeting house. Green v. Cady, 9 Wend. 414 (1832). Where the presiding officer of the meeting is prevented by the vio- lence of members from discharging his duties at the accustomed place of meeting, he and those who accompany him may hold the meeting elsewhere and their acts will be obligatory upon the corporation, al- though they are a minority of the members. Field v. Field, 9 Wend. 394 (1832). An action cannot be maintained in the name of the corporation by persons claiming to be trustees, who have not been in possession of the church edifice, and have not been admitted to the exercise of any rights or duties to restrain persons in possession also claiming to be trustees from closing the church and from preventing the pastor from holding religious meetings. North Baptist Ch. v. Parker, 36 Barb. 171 (1862). Before such action can be maintained, the claimants must have been peaceably admitted to the office or have established their title by direct proceedings. (Id.) Trustees may maintain an action in the name of the corporation to recover possession of the church building from which they were evicted, although the building is occupied by a majority of the cor- porators. First Meth. Ep. Ch. of Attica v. Filkins, 3 T. & C. 279 (1874) ; and see Peo. v. Runkle, 8 Johns 464 (1811). Ecclesiastical Office. The existence of an ecclesiastical office, such as bishop, is not recog- nized by the state where the result would be to give to the holders the right of perpetual succession, or other rights similar to those pos- sessed by corporations. A devise to a bishop for certain purposes must be enjoyed and carried out by him in his personal capacity. Matter of Palmer, 33 App. Div. 307, aff’d on op. below, 158 N. Y. 669 (1899). Pews. Where the deed of a seat provided that if the synagogue was sold or exchanged g@the grantee should be entitled to the same seat in the new synagogue, and further provided in detail how the seats were to be numbered, such grantee is entitled to a seat not only in the same location, but also of the same number as the one formerly held. Samuels v. Cong. Kol. Israel, 52 App. Div. 287 (1900). Upon the sale of a temple and the purchase of a new edifice, the trustees must tender a pewholder a pew in the new edifice corre- sponding in location to his former pew, upon payment by the member of his proportionate share of the excess of cost of the new building Reuicious Corporations Law. 317 over the proceeds of sale of the old. Mayer v. Temple Beth. El, 23 N. Y. Supp. ror3 (1893). A pew owner has a right to use the pew as long as the church edifice stands, but all rights to the freehold are in the corporation. He cannot enjoin the demolition of the edifice for the purpose of erecting a new one. Shaw v. Beveridge, 3 Hill 26 (1842); Voorhees v. Presbyterian Ch. of Amsterdam, 17 Barb. 103 (1853); Baptist Church v. Witherell, 3 Paige 296, 302 (1832); Heeney v. St. Peter’s Church, 2 Edw. Ch. 608 (1836); Freligh v. Platt, 5 Cowen 494 (1826). Pew owners have the exclusive right of possession and may main- tain an action in trespass if their possession is disturbed. Shaw v. Beveridge, 3 Hill 26 (1842). A member who ceases to attend the local church for more than a year ceases to be a member of the local church organization, and has no right to maintain an action under this section to regulate the use of corporate property. Smith v. Bowers, 57 App. Div. 252, aff’d, no op. 171 N. Y. 660. § 6. Acquisition of property by religious corporations for branch institutions; establishment, maintenance and man- agement thereof. Any religious corporation may acquire property for associate houses, church buildings, chapels, mission-houses, school-houses for Sunday or parochial schools, or dispensaries of medicine for the poor, or prop- erty for the residence of its ministers, teachers or employees, or property for a home for the aged. The persons attend- ing public worship in any such associate house, mission- house, church building, or chapel connected therewith shall not by reason thereof have any rights as members of the parent corporation. The persons statedly worshiping in any such house, mission-house, church building or chapel may, with the consent of the trustees of such corporation, be- come separately incorporated as a church, and the parent corporation may, in pursuance of the provisions of law regulating the disposition of real property by religious cor- porations, rent or convey to the new corporation, with or without consideration, any such associate house, church building, chapel, mission-house, school-house or dispensary and the lot connected therewith, subject to such regulations as the trustees of the parent corporation may make. Any religious corporation shall have power to establish, main- tain and manage by its trustees or other officers as a part of its religious purpose a home for the aged, and may take 318 Reticious Corporations Law. and hold by conveyance, donation, bequest or devise real and personal property for such purpose, and may purchase and may erect suitable buildings therefor. Any such cor- poration may take and hold any grant, donation, bequest or devise of real or personal property ‘heretofore or hereafter made upon trust, and apply the same, or the income thereof, under the direction of its trustees or other officers, for the purpose of establishing, maintaining and managing such a home and for the erection, preservation, repair or extension of any building or buildings for such purpose. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723), § 6, as am’d by L. 1896, ch. 525. Revised from L. 1850, ch. 122, § 2, as am’d by L. 1879, ch. 117; L. 1867, ch. 657, §§ 1-3. § 7. Acquisition of property by religious corporations for cemetery purposes; management thereof. A religious cor- poration may take and hold, by purchase, grant, gift or devise, real property for the purposes of a cemetery; or. such lot or lots in any cemetery connected with it, as may be conveyed or devised to it, with or without provisions limiting interments therein to particular persons or classes of persons; and may take and hold any property granted, given, devised or bequeathed to it in trust to apply the same or the income or proceeds thereof, under the direction of the trustees of the corporation, for the improvement or em- bellishment of such cemetery or any lot therein, including the erection, repair, preservation or removal of tombs, monuments, gravestones, fences, railings or other erections, or the planting or cultivation of trees, shrubs, plants, or flowers in or around any such cemetery or cemetery lots. A religious corporation may erect upon any property held by it for cemetery purposes, a suitable building for religious services for the burial of the dead, or for the use of the keepers or other persons employed in connection therewith, and may sell and convey lots in such cemetery for burial purposes, subject to such conditions and restric- tions as may be imposed by the instrument by which the same was acquired, or by the rules and regulations adopted. by such corporation. Every such conveyance of a lot or Reticious Corporations Law. 319 plat for burial purposes, signed, sealed and acknowledged in the same manner as a deed to be recorded, may be re- corded in like manner and with like effect as a deed of real property. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723), § 7. Re- vised from L. 1842, ch. 153, § 1; L. 1842, ch. 215, § 1; L. 1850, ch. 122, § 3; L. 1881, ch. 501, § 1; L. 1884, ch. 198, §§ 1-3. Burial in Churchyard. The right of burial in a churchyard is a mere easement and not a title to the freehold, and is subject to such changes as the altered circumstances of the congregation or the neighborhood may render necessary. This is so even if the conveyance is to the grantee and his heirs and assigns forever. Richards v. North West Protestant Dutch Church, 20 How. Pr. 317 (1859). Bequests. The legislative interest in enacting the provision authorizing the taking of property in trust for the improvement and embellishment of cemetery property was to abrogate the rule against perpetuities in the case of gifts to religious corporations for cemetery purposes. Dris- coll v. Hewlett, 198 N. Y. 297 (1910), aff’g 132 App. Div. 125. See authorities and notes under Membership Corporation Law, Art. 4, “Cemetery Corporations,” ante. The right to use property for cemeteries is dependent on question whether such use would be detrimental to public health. Morton v. St. Patrick’s R. C. Church, 56 Misc. 71 (1907). § 8. Lot owners’ rights. Lots in such cemeteries shall be held indivisible, and upon the decease of a proprietor of such lot the title thereto shall descend to his heirs-at-law or devisees, subject, however, to the following limitations and conditions: If he leaves a widow and children, they shall have in common the possession, care and control of such lot during her life. If he leaves a widow and no chil- dren, she shall have the possession, care and control of such lot during her life. If he leaves children and no widow, they, or the survivor of them, shall in common have the possession, care and control of such lot during the life of the survivor of them. The parties having such possession, care and control of such lot during the term thereof, may erect a monument and make other permanent improvements thereon. The widow shall have the right of interment, for her own body in such lot, or in a tomb in such lot and a 320 Rewicious Corporations Law. right to have her body remain permanently interred or en- tombed therein, except that her body may be removed therefrom to some other family lot or tomb with the con- sent of her heirs. At any time when more than one person is entitled to the possession, care or control of such lot, the persons so entitled thereto shall designate in writing to the religious corporation which of their number shall represent the lot, and on their failure to designate, the board of trus- tees or directors of the corporation shall enter of record which of said parties shall represent the lot, while such fail- ure continues. The widow may at any time release her right in such lot, but no conveyance or devise by any other person shall deprive her of such right. Source.—L. 1869, ch. 727, § 4, added by L. 1898, ch. 543, § 1. Consolidators’ Note. L. 1869, Ch. 727, was an act entitled “An act authorizing cifies and villages to acquire titles to property for burial purposes and to levy taxes for the payment of the same.” It was amended by L. 1870, Ch. 760, being a substantial re-enactment of the statute of 1869 and adding a new section, § 3. Section 1 of L. 1870, Ch. 760, was amended by L. 1873, Ch. 452, which latter statute also re-enacted § 2 of L. 1870, Ch. 760. This series of statutes was amended finally by L. 1898, Ch. 543, by adding §§ 4 and 5. The original act prior to the amendment of 1808 was applicable to cities, incorporated villages and incorporated rural cemetery associations. The statute therefore has been consoli- dated in the General Municipal Law covering cities and villages and has been considered as covered by the provisions of the Membership Corporations Law. The act of 1898, which added a new section to the original statutes, made that section applicable to cemetery corpora- tions mentioned in the original acts and to cemetery corporations pro- vided for in article 3 of the Membership Corporations Law, and ceme- teries belonging to religious corporations. The provisions of the stat- utes of 1898, therefore, have been consolidated in the Membership Corporations Law and in the Religious Corporations Law. Thus all of the provisions of the statute of 1869 and its amendments have been provided for and all of the statutes have been repealed in their re- spective a eile laws. ‘ See authorities and notes under Membership Corporation Law, Art. 4, “Cemetery Corporations,” ante. The provisions of Memb. Corp. Law, Sec. 71, authorizing removal of bodies on consent of Supreme Court on petition, do not apply to cemeteries of religious corporations, the proceedings being purely statu- tory. Matter of Cohen, 76 App. Div. 401 (1902). The right to removal may be determined by a court of equity, irre- spective of statute, and will be determined upon equitable grounds, RELicious Corporations Law. 321 irrespective of ecclesiastical law. Cohen v. Congregation Shearith Israel, 114 App. Div. 117 (1906) ; aff’d, no op. 189 N. Y. 528. It may be that an agreement that remains interred could not be re- moved, or a rule to that effect to which a member subscribed would be enforced in equity. Cohen v. Congregation Shearith Israel, 114 App. Div. 117 (1906) ; aff’d, no op. 189 N. Y. 528. The question whether a person who was a member of a Roman Catholic church died in communion with that church, and so became entitled to burial in his lot in a Catholic cemetery, is one to be deter- mined by the officers of the church, and their decision is conclusive in an action by the representative of the deceased to obtain such burial although the decision was without hearing. Courts cannot be called upon to compel churches to administer religious rites. McGuire v. St. Patrick’s Cathedral, 54 Hun 207 (1889). § 9. Removal of human remains from one cemetery of a religious corporation to another cemetery owned by it. A religious corporation, notwithstanding the restrictions con- tained in any conveyance or devise to it, may remove the human remains buried in a cemetery owned by it, or when such church corporation is situated outside of a city in the grounds surrounding the church belonging to such corpora- tion, to another cemetery owned by it, or to a plot or lot acquired by it in any other cemetery located in the same town, if the trustees thereof so determine, and if either three-fourths of the members of such corporation, qualified to vote at its corporate meetings, sign and acknowledge and cause to be recorded in the office of the clerk of the county in which such cemetery or a part thereof is situated, a written consent thereto, or if three-fourths of the members of such corporation qualified to vote, and present and vot- ing, at a corporate meeting of such corporation, specially called for that purpose, shall approve thereof. But if such corporation be a church, previous notice of the object of such meeting shall be published for at least four successive weeks in a newspaper of the town, village or city in which the cemetery from which the removal is proposed, is situ- ated, or if no newspaper is published therein, then in a newspaper designated by the county judge of such county. Such removal shall be made in an appropriate manner and in accordance with such directions as to the manner thereof, as may be given by the board of health of the town, village 322 Reticious Corporations Law. or city in which the cemetery from which the removal is made, is situated. All tombstones, monuments or other erections at or upon any grave from which any remains are removed, shall be properly replaced or raised at the grave where the remains are reinterred. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723) § 8, amended by L. 1905, ch. 324. Revised from L. 1842, ch. 215, § 2; L. 1878, ch. 349, as am’d by L. 1887, ch. 600. § 10. Acquisition of property by two or more religious corporations for a common parsonage. Two or more re- ligious corporations may acquire such real property as may be necessary for use as a parsonage, and the right, title and interest of each corporation therein shall be in propor- tion to its contribution to the cost of such property. The trustees of each corporation shall, from time to time, ap- point one of their number to be a trustee of such common parsonage property, to hold office during the pleasure of the appointing trustees or until his successor be appointed. The trustees so appointed shall have the care and manage- ment of such property and may make such improvements thereupon as they deem necessary, and determine the pro- portion of the expense of the maintenance thereof which each corporation shall bear. If at any time either of such corporations acquires or desires to acquire for its own ex- clusive use as a parsonage other real property, it may, in pursuance of the provisions of law, relating to the disposi- tion of real property by religious corporations, sell and con- vey its interest in such common parsonage property to any one or more of the other corporations having an interest therein. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723) § 9. Re- vised from L. 1875, ch. 408. a § 11. Correction and confirmation of conveyances to re- ligious corporations. If, in a conveyance of real property, or in any instrument intended to operate as such, heretofore or hereafter made to a religious corporation, its corporate name is not stated or is not correctly stated, but such con- veyance or instrument indicates the intention of the grantor Reticious Corporations Law. 323 therein to convey such property to such corporation, and such corporation has entered into possession and occupa- tion of such property, any officer of the corporation author- ized so to do by its trustees may record in the office where such conveyance or instrument is recorded a statement, signed and acknowledged by him or proved, setting forth the date of such conveyance or instrument, the date of rec- ord and the number and page of the book of record thereof, the name of the grantor, a description of the property con- veyed or intended to be conveyed, the name of the grantee as expressed in such conveyance or instrument, the cor- rect name of such corporation, the fact of authorization by the trustees of the corporation, to make and record such statement, and that the grantor in such conveyance or in- strument intended thereby to convey such property to such corporation as the said officer verily believes, with the rea- son for such belief. Such statement so signed and acknowl- edged or proved shall be recorded with the records of deeds in such office, and indexed as a deed from the grantee as named in such instrument or in such conveyance to such corporation. The register or clerk, as the case may be, shall note the recording of such statement on the margin of the record of such conveyance, and for his services shall be entitled to receive the fees allowed for recording deeds. Such statement so recorded shall be presumptive evidence that such matters therein stated are true, and that such corporation was the grantee in the original instrument or conveyance. All conveyances heretofore made, or by any instrument intended to be made, to a religious corporation of real property appropriated to the use of such corpora- tion, or entitled to be so appropriated, are hereby confirmed and declared valid and effectual, notwithstanding any de- fect in the form of the conveyance or the description of the grantee therein. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723) § 10, am’d’ by L. 1806, ch. 336. Revised from L, 1863, ch. 45, § 1; L. 1871, ch. 12, § 1; L. 1888, ch. 459. § 12. Sale, mortgage and lease of real property of re-. ligious corporations. A religious corporation shall not sell: 324 RELIGIOUS CorPoRATIONS Law. or mortgage any of its real property without applying for and obtaining leave of the court therefor pursuant to the provisions of article four of the general corporation law. The trustees of an incorporated Protestant Episcopal church shall not vote upon any resolution or proposition for the sale, mortgage or lease of its real property, unless the rector of such church, if it then has a rector, shall be present, and shall not make application to the court for leave to sell or mortgage any of its real property without the consent of the bishop and standing committee of the diocese to which such church belongs; but in case the see be vacant, or the bishop be absent or unable to act, the con- sent of the standing committee with their certificate of the vacancy of the see or of the absence or disability of the bishop shall suffice. The trustees of an incorporated Roman Catholic church shall not make application to the court for leave to mortgage, lease or sell any of its real property without the consent of the archbishop or bishop of the diocese to which such church belongs or in case of their absence or inability to act, without the consent of the vicar- general or administrator of such diocese. The petition of the trustees of an incorporated Protestant Episcopal church or Roman Catholic church shall, in addition to the matters required by article four of the general corporation law to be set forth therein, set forth that this section has also been complied with. But lots, plats or burial permits in a ceme- tery owned by a religious corporation may be sold without applying for or obtaining leave of the court. No cemetery lands of a religious corporation shall be mortgaged while used for cemetery purposes. Except as otherwise provided in this chapter in respect to a religious corporation of a specifiedgdenomination, any solvent religious corporation may, by order of the supreme court obtained as above pro- vided in proceedings to sell, mortgage or lease real prop- erty, convey the whole or any part of its real property to another religious corporation, for a consideration of one dollar or other nominal consideration, and for the purpose of applying the provision of article four of the general cor- ReEticious Corporations Law. 325 poration law, a proposed conveyance for such consideration shall be treated as a sale, but it shall not be necessary to show, in the petition or otherwise, nor for the court to find, that the pecuniary or proprietary interest of the gran- tor corporation will be promoted thereby; and the interests of such grantor shall be deemed to be promoted if it ap- pears that religious or charitable objects generally are con- served by such conveyance; provided, however, that such an order shall not be made if tending to impair the claim or remedy of any creditor. If a sale or mortgage of any real property of any such religious corporation has been heretofore or shall be hereafter made and a conveyance or mortgage executed and delivered without the authority of a court of competent jurisdiction, obtained as required by law, or not in accordance with its directions, the court may, thereafter, upon the application of the corporation, or of the grantee or mortgagee in any such conveyance or mort- gage or of any person claiming through or under any such grantee or mortgagee, upon such notice to such corpora- ‘tion, or its successor, and such other person or persons as may be interested in such property, as the court may pre- scribe, confirm said previously executed conveyance or mortgage, and order and direct the execution and delivery of a confirmatory deed or mortgage, or the recording of such confirmatory order in the office where deeds and mort- gages are recorded in the county in which the property is located; and upon compliance with the said order such original conveyance or mortgage shall be as valid and of the same force and effect as if it had been executed and delivered after due proceedings had in accordance with the statute and the direction of the court. But no confirmatory order may be granted unless the consents required in the first part of this section for a Protestant Episcopal or Roman Catholic church have first been given by the pre- scribed authority thereof, either upon the original applica- tion or upon the application for the confirmatory order. Source—Formerly Religious Corp. L. (L. 1895, ch. 723) § 11; as am’d by L. 1896, ch. 366; L. 1900, ch. 521; L. 1901, ch. 222; L. 1902, ch. 208; L. 1908, ch. 363. Revised from L. 1813, ch. 60, § 1, as am’d 326 ReE.Licious Corporations Law. by L. 1868, ch. 803; L. 1813, ch. 60, § 11, as am’d by L. 1890, ch. 424; L. 1842, ch, 215, § 1; L. 1870, ch. 310, § 1. Thus am’d by L. 1912, ch. 290, and L. 1913, ch. 128. For forms of petition and other papers, see forms Nos. 18 tao 25, post. The amendment of 1912 substituted the words “article four of the general corporation law” for the words “title two of chapter twenty- three of the Code of Civil Procedure,” the legislature in the consoli- dation of 1909 having overlooked the fact that the code provisions had been transferred to the general corporation law. Three sentences, providing for the confirmation of unauthorized conveyances, were also added at the end of the section by the amendment of 1912, but the amendment of 1913 struck out the last sentence but one, which read as follows: “Such confirmatory order shall be granted only on proof, by pe- tition or otherwise, satisfactory to the court granting the order, that an original proceeding was instituted, and showing in what respect such original proceeding was defective, the facts applicable to the said defects and the conditions existing at the time of the application for the confirmatory order.” Protestant Episcopal. The rector, if there be one, must be present at the meeting of the trustees which authorizes the sale, mortgage or lease of real property. The application to the court must have the consent of the bishop and standing committee of the Diocese to which the church belongs. If the See is vacant or the bishop be absent or unable to act, the consent of the standing committee with their certificate of the vacancy of the See or of the absence or disability of the bishop shall suffice. Petition must show that this section has been complied with. Roman Catholic. Trustees shall not make application without consent of the arch- bishop or bishop of the diocese to which such church belongs, or in case of their absence or inability to act, without the consent of the vicar-general or administrator of such diocese. Petition must show that this section has been complied with. The sentence beginning “Except as otherwise provided in this chap- ter,” etc., was enacted to overcome the ruling in Madison Ave. Bap- tist Ch. v. Baptist Church, etc, 46 N. Y. 131 (1871), that a transfer from one church to another for the purpose of uniting the two churches was not a sale, and that therefore the court had no jurisdiction. Statute Strictly Construed. Religious corporations have no inherent right to dispose of their property, and absolute compliance with the statute is necessary to the validity of a sale or mortgage. Madison Ave. Bap. Ch. v. Baptist Church, etc., 46 N. Y. 131 (1871) ; Dudley v. Congregation, etc., of St. Francis 138 N. Y. 451 (1893) ; Muck v. Hitchcock, 149 App. Div. 323 1912) A mortgage made without the court’s consent is void. Dudley v. Congregation, etc., of St. Francis, 138 N. Y. 451 (1893). This case Rexicious Corporations Law. 327 must now be read in the light of the amendments made to this section in 1912 and 1913. Where an action is brought to foreclose a mortgage made without consent of court, and therefore void, the plaintiff cannot demand as a matter of right that the court of equity retain jurisdiction to allow recovery on the bond. Dudley v. Congregation, etc., of St. Francis, 138 N. Y. 451 (1893). Jurisdiction of the court to authorize the sale depends upon the facts before the court when the order is made and cannot be upheld by proof of facts existing which would have justified the order, but which were not before the court. Madison Ave. Bap. Ch. v. Oliver St. Bap. Ch. 73 N. Y. 82 (1878). This case must now be read in the light of the amendments made to this section in 1912 and 1913. Trustees May Apply. The proceedings may be instituted by petition of the trustees, al- though not authorized by a majority of the corporators, if such pro- ceedings are authorized and carried on by a majority of the trustees. Madison Ave. Bap. Church v. Baptist Church, etc, 46 N. Y. 131 (1871) ; Matter of St. George’s M. E. Church, 21 Weekly Dig. 81 (1884). Contract of Sale. The contract of sale may be entered into without the consent of the court, and it is sufficient if such consent is obtained before de- livery of the deed. Bowen v. Irish Presb. Cong., etc, 6 Bosworth 245 (1860) ; Cong. Beth. Elohim v. Central Pres. Church, 10 Abb. Pr. (N. S.) 484 (1871). Where the contract of sale entered into without the consent of the court does not provide that such consent shall be ob- tained, such condition will be implied. Cong. Beth. Elohim v. Central Pres, Church, 10 Abb. Pr. (N. S.) 484 (1871); Muck v. Hitchcock, 149 App. Div. 323 (1912). A contract entered into without the con- sent of court is not ultra vires. Cong. Beth. Elohim vy. Central Pres. Church, 10 Abb. Pr. (N. S.) 484 (1871). The failure to file the court order consenting to the sale before ten- der of the deed is not ground for maintaining an action to recover a deposit where such objection was not raised when the deed was tendered, as it could have then been obviated. Cong. Beth. Elohim y. Central Pres. Church, 10 Abb. Pr. (N. S.) 484 (1871). An agreement signed by the chairman and recording secretary and sealed with the corporate seal will be presumed to have been duly au- thorized by the corporation. Bowen v. Irish Pres. Cong. of City of N. Y., 6 Bosworth 245 (1860). Removal of Church. No order is necessary to authorize the removal of a house of worship from one lot to another, for there has been no sale. Matter of Second Baptist Society, 20 How. Pr. 324 (1851). Lot in Churchyard. It seems that no order is necessary where the corporation grants a right of burial in its churchyard, for such a conveyance is merely an 328 Reticious Corrorations Law. easement. Richards v. North West Protestant Dutch Church, 20 How. Pr. 317 (1859). Power of the Court. The court can only ratify or veto a proposed sale. It has no power to direct a sale against the will of the corporation. The fee is vested in the corporation, and the only restraint on its power to sell is the indispensable condition that an order authorizing the conveyance be first obtained. Matter of Reformed Dutch Ch. of Saugerties, 16 Barb. 237 (1853); Bowen v. Irish Pres. Ch. of City of N. Y., 6 Bosworth, 245 (1860) ; Wheaton v. Gates, 18 N. Y. 395 (1858). Object of Requiring Consent. The consent of the court was deemed necessary for the protection of those who are the real owmers of the property, and to prevent a diversion of the corporate property. Matter of Reformed Dutch Ch. of Saugerties, 16 Barb. 237, 241 (1853) ; Cong. Beth. Elohim v. Central Pres. Ch., 10 Abb. Pr. (N. S.) 484 (1871). It was not the purpose to confer any original power to control or manage the property of religious societies. Wheaton v. Gates, 18 N. Y. 395, 401 (1858). When Leave Unnecessary. Where a testator devised certain real property to a corporation and before his death contracted to sell the same property to a third party, the corporation may complete the contract and convey the property to the vendee without obtaining leave, for it is not selling its own property. Edelstein v. Hayes, 50 Misc. 130 (1906). Where two corporations own real property jointly an action of par- tition will lie. Compliance with this section is only necessary in case of voluntary sales. N. Y. Home Missionary Soc, v. First Freewill, etc., Ch. & Soc. of Lawrence, 73 Misc. 128 (1911). Purchase Money Mortgages. The foregoing section contains no express authority for the execu- tion of a purchase money mortgage without obtaining the consent of court; yet, notwithstanding the omission of provisions of that char- acter it seems on principles of equity that a mortgage to secure the purchase price of property might be executed without leave of the court. See Coman v. Lackey, 80 N. Y. 345 (1880); Farmers’ Loan & Trust Co. v. Equity Gas Light Co., 84 Hun 373 (1895) ; In re Beaver Knitting Mills, 154 Fed. 320 (1907). Under section 11 of the Act of April 5, 1813, being an act to provide for the incorporation of religious societies, which provided that it shall be lawful for fhe chancellor to make an order for the “sale” of any real estate belonging to the corporation, it was held in South Baptist Society of Albany v. Clapp, 18 Barb. 35, 49 (1853), that an order was not necessary to enable a religious corporation purchasing land to exe- cute a mortgage for the purchase price, the court saying: “IT am satisfied such an order was never necessary to enable a religious corporation purchasing land to execute a mortgage for the purchase money. The church never owns the land except sub- Reticious Corporations Law. 329 ject to the mortgage. It was a question of purchase rather than of sale. The statute is only applicable to a case where the church is the owner of real property; and its object is that the court may control the disposition of the proceeds, and prevent a misapplica- tion of trust funds.” This case, however, cannot be deemed controlling authority under the present act, because in Manning v. Moscow Presbyterian Society, 27 Barb. 52, it was held that under the act of 1813 a religious corpo- ration might execute mortgages to secure the payment of debts with- out order of the court, the term “sale” in that act not including a mortgage, whereas the present statute expressly prohibits the execu- tion of a mortgage without leave of the court. The leading real estate title insurance companies in New York county are willing to insure purchase money mortgages of religious corporations executed without an order of court. Voluntary Dissolution. Under the guise of a sale of property the trustees cannot work a practical dissolution of the corporation by a distribution of the pro- ceeds of sale amongst the members. Wheaton v. Gates, 18 N. Y. 3905 (1858). Sale of Pews. The corporation cannot sell a pew absolutely without an order of court. A valid lease of a pew confers the right to occupy the pews for the purpose of worship, but confers no title and lessees cannot object to a sale on the ground that they have such title. Matter of Reformed Dutch Ch. of Saugerties, 16 Barb. 237 (1853) ; Wheaton v. Gates, 18 N. Y. 395 (1858) ; Richards v. North West Protestant Dutch Ch., 20 How. Pr. 317, 323 (1859). A condition in a deed to the trustees of a church that seats shall forever remain free, and that if seats shall be rented or sold the prop- erty shall revert to grantor, is not broken where the fee of the land is sold under order of court to pay church debts, the deed to the grantee containing the same condition. The interest in a pew is sepa- rate from the fee. Woodworth v. Payne, 74 N. Y. 196 (1878). General Assignment. A general assignment made with the approval of the court is valid and cannot be collaterally attacked. The assignment is a sale. De- Ruyter v. St. Peter’s Ch., 3 N. Y. 238 (1850). Canceling Unauthorized Conveyance. Where a conveyance is made without leave of court and the con- sideration has been paid the corporation on repaying such consideration may nevertheless have the conveyance canceled and annulled. Asso- ciate Presbyterian Cong. v. Hanna, 113 App. Div. 12 (1906); Madison Ave. Bap. Ch, v, Oliver St. Bap. Ch. 73 N. Y. 82 (1878). 330 Reticious Corporations Law. Power to Extend Time. The trustees have power to agree to extension of time to deliver the deed. Cong. Beth. Elohim y. Central Pres. Church, 10 Abb, Pr. (N. S.) 484 (1871). Specific Performance. . Where a contract of sale has been entered into and the consent of the court obtained the purchaser may maintain an action for specific performance. Bowen v. Irish Pres. Cong. of City of N. Y., 6 Bos- worth 245 (1860). The fact that an injunction pendente lite has been granted against the corporation restraining a conveyance in a suit brought by members of the church, to which suit the vendee is not a party, is no defense to an action for specific performance. Bowen v. Irish Pres. Cong. of City of N. Y., 6 Bosworth 245 (1860). In an action for specific performance the court has the power to in- quire into the fairness of the contract and its advantage or disadvan- tage to the corporation and to direct it to be performed where, upon all the facts, no valid reason appears for refusing such relief. Muck ‘v. Hitchcock, 149 App. Div. 323 (1912). If specific performance is refused because the contract sought to be enforced is found disadvantageous to the corporation and no leave of ‘court has been obtained, the corporation will not be relieved unless the amount paid on the contract is returned. If not returned, the pur- chaser will be held to have an equitable lien enforceable by sale. Muck v. Hitchcock, 149 App.. Div. 323 (1912). Foreign Corporations. Even if the restrictions upon the right to alienate contained in this section be deemed inapplicable to foreign corporations having the right to hold real property pursuant to Gen. Corp. Law, Sec. 21, and if the Jaw of the state of incorporation be controlling, nevertheless in the absence of proof of such foreign law the common law will be deemed to prevail and under it the consent of the court is necessary. Muck v. Hitchcock, 149 App. Div. 323 (1912). Rescission. If real property has been sold without leave of court and the con- sideration received, the corporation may maintain an action to rescind the sale and is not estopped from doing so because it has received such consideration. Associate Presbyterian Cong. v. Hanna, 113 App. Div. 12 (1906). The court will not authorize the sale nunc pro tune in the absence ‘of proof that the corporation has been benefited by the sale. Associate Presbyterian Cong. v. Hanna, 113 App. Div. 12 (1906). Fraudulent Conveyance. Where certain persons were vestrymen in two church corporations and caused certain real estate which belonged to one to be transferred to the other without consideration, the transaction is fraudulent, and Reticious Corporations Law. 331 the conveyance will be set aside. Wardens, etc., of St. James’ Ch. v. Rector, etc, of Church of the Redeemer, 45 Barb. 356 (1865). The fact that a conveyance has been authorized by the court will not prevent the maintenance of an action to avoid such conveyance for fraud. The order merely gives the deed regularity of form and ren- ders additional proof necessary to overthrow it. The order is not an adjudication between the parties and has not the effect of res ad- judicata. Wardens, etc., of St. James’ Ch. v. Rector, etc. of Church of Redeemer, 45 Barb. 356 (1865). Disposition of Proceeds of Sale. The court cannot approve a plan to distribute the proceeds of sale among members, because such plan does not regard the interest of the corporation to continue for the purpose of its creation. Such an order, if granted, is void. Wheaton v. Gates, 18 N. Y. 305 (1858). Unauthorized Restrictive Covenant. Where the rector and clerk execute a deed in pursuance of a vote of the vestry and a court order, but without authority insert a re- strictive covenant that the property shall only be used for church pur- poses, the grantor corporation in equity has no pecuniary interest re- maining to enforce the covenant in the absence of a provision for re- version in case of breach. An action to cancel the covenant may nevertheless be maintained because the invalidity can only be deter- mined by extrinsic evidence. St. Stephen’s Ch. v. Ch. of Transfigura- tion, 201 N. Y. 1 (1911). § 13. Consolidation of incorporated churches. Two or more incorporated churches may enter into an agreement, under their respective corporate seals, for the consolidation of such corporations, setting forth the name of the pro- posed new corporation, the denomination, if any, to which it is to belong, and if the churches of such denomination have more than one method of choosing trustees, by which of such methods the trustees are to be chosen, the number of such trustees, the names of the persons to be the first trustees of the new corporation, and the date of its first annual corporate meeting. Such agreement shall not be valid unless approved by the governing body of the de- nomination, if any, to which each church belongs, having jurisdiction over such church. Each corporation shall there- upon make a separate petition to the supreme court for an order consolidating the corporations, setting forth the denomination, if any, to which the church belongs, that the consent of the governing body to the consolidation, if 332 RELiGious Corporations Law. any, of that denomination having jurisdiction over such church has been obtained, the agreement therefor, and a statement of all the property and liabilities and the amount and sources of the annual income of such petitioning cor- poration. In its discretion the court may direct that notice of the hearing of such petition be given to the parties in- terested therein in such manner and for such time as it may prescribe. After hearing all the parties interested, present and desiring to be heard, the court may make an order for the consolidation of the corporations on the terms of such agreement and such other terms and conditions as it may prescribe, specifying the name of such new corporation and the first trustees thereof, and the method by which their successors shall be chosen and the date of its first annual corporate meeting. When such order is made and duly entered, the persons constituting such corporations shall become an incorporated church by, and said petition- ing churches shall become consolidated under, the name designated in the order, and the trustees therein named shall be the first trustees thereof, and the future trustees thereof shall be chosen by the method therein designated, and all the estate, rights, powers and property of whatso- ever nature belonging to either corporation shall without further act or deed be vested in and transferred to the new corporation as effectually as they were vested in or be- longed to the former corporations; and the said new cor- poration shall be liable for all the debts and liabilities of the former corporations in the same manner and as effectu- ally as if said debts or liabilities had been contracted or incurred by the new corporation. A certified copy of such order shall be recorded in the book for recording certificates of incorporation in each county clerk’s office in which the certificate off incorporation of each consolidating church was recorded; or if no such certificate was so recorded, then in the clerk’s office of the county in which the principal place of worship or principal office of the new corporation is, or is intended to be, situated. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723) § 12, as Reticious Corporations Law. 333 am’d by L. 1896, ch. 56. Revised from L. 1874, ch. 37; L. 1875, ch. 209; L. 1876, ch. 176, § 3, as am’d by L. 1880, ch. 167, and § 4. For forms of papers under this section see Forms Nos. 84 to 87, post. Right to Consolidate Statutory. Corporations cannot consolidate without legislative authority, and statutes authorizing consolidation apply exclusively to those of a simi- Jar nature. Chevra Bnai Israel v. Chevra Bikur Cholim, 24 Misc. 189 (1898) ; Selkir v. Klein, 50 Misc. 194 (1906). The decision in Stokes v. Phelps Mission, 47 Hun 570 (1888), that corporations of different denominations cannot consolidate seems to be superseded by the amendments made in the revision of 1895. See re- visers’ notes, ante. Where vestrymen were appointed a committee to effect the consoli- dation of the parish with another, and were subsequently ousted from office by a judgment, they are not entitled to a writ of mandamus to compel the treasurer to affix the corporate seal to the agreement of consolidation entered into by them. When they were ousted from the office of vestrymen their right to act as a committee of the vestry ceased. Peo. v. Blackhurst, 60 Hun 63 (1891). When a majority of the trustees of one corporation are also the trustees of another corporation, boards of trustees so constituted can- not enter into a valid contract for the consolidation of the corpora- tions. Matter of M. E. Society v. Perry, 51 Hun 104 (1889), and cases therein cited. A membership corporation and a religious corporation cannot con- solidate. The court has no jurisdiction to approve such consolidation, and the new corporation obtains no title to the real estate of the cor- porations consolidated. Selkir v. Klein, 50 Misc. 194 (1906). Effect of Consolidation. In the absence of an express reservation in the statute of the rights of the constituent corporations which would not exist under the law at the time of the consolidation, such rights are lost and the consoli- dated corporation and its property, including that obtained by con- solidation, is subject to the laws then in force, although the constitu- ent corporations would not have been subject thereto. Westminster Presb. Ch. v. Trustees of Presbytery, 142 App. Div. 855, 867 (1911). A consolidation under this section subjects the corporate property to denominational control, although the constituent corporation could theretofore lawfully change the creed and religious doctrine to be ex- pounded. Westminster Presb. Ch. v. Trustees of Presbytery, 142 App. Div. 855, 865 (1911). The statute was designed to enable existing religious corporations organized in good faith for the advancement of religious interests, and for a time carried on for such purpose, to consolidate when it be- comes apparent that such interests can be better advanced by the union of tle corporations. Matter of M. E. Society v. Perry, 51 Hun 104 (1889). A religious corporation cannot be formed for the sole purpose of consolidating it with another for the ultimate end of acquiring the 334 Reticious Corporations Law. property of the other and applying it to the maintenance of a church with a different polity and with a somewhat different faith. Matter of M. E. Society v. Perry, 51 Hun 104 (1889). But see revisers’ notes, ante. When Consolidation not Enjoined. ‘ A court of equity is not at liberty to restrain the carrying out of a consolidation agreement which has not been submitted for approval to the governing body or the court, as directed in the statute, for objection to the wisdom of the agreement must be made to the bodies authorized by the statute to pass thereon. Equity cannot obstrtct the statutory remedy. MacLaury v. Hart, 121 N. Y. 636 (1890). When Consolidation Enjoined. When the consolidation agreement does not comply with the pro- wisions of the statute and is ultra vires, a dissenting member may maintain an action to set it aside. Davis v. Congr. Tephila Israel, 40 App. Div. 424 (1899); Cong. Anshe Yosher v. F. U. R. S. Verein, 32 Misc. 269 (1900). Consolidation, When not Enforceable. A committee of the vestry who were appointed to adopt requisite legal measures for consolidating with another parish, and subsequently entered into a consolidation agreement, cannot mandamus the treasurer to affix the seal of the society to the agreement after such vestrymen have been ousted from office by a judgment of a competent court. Peo. v. Blackhurst, 60 Hun 63 (1891). § 14. Judicial investigation of amount of property of re- ligious corporations. The supreme court at a special term, held in the judicial district in which the principal place of worship or of holding corporate meetings of a religious cor- poration is situated, may require such corporation to make and file an inventory of its property, verified by its trustees or a majority of them, on the written application of the at- torney-general, stating that, from his knowledge, or on in- formation and belief, the value of the property held by such corporation exceeds the amount authorized by law. On presentation of such application, the court shall order that a notice of at least eight days, together with a copy of the application, be served upon the trustees of the corporation, requiring them to show cause at a time and place therein specified why they should not make and file such inventory and account. If, on the hearing of such application, no good cause is shown to the contrary, the court may make REticious Corporations Law. 335 an order requiring such inventory or account to be filed, and may also proceed to take and state the amount of prop- erty held by the corporation, and may appoint a referee for that purpose; and when such account is taken and stated, after hearing all the parties appearing on the application, the court may enter an order determining the amount of property so held by the corporation and its annual income,. from which order an appeal may be taken by any party aggrieved as from a judgment of the supreme court in an action tried therein before a court without a jury. No cor- poration shall be required to make and file more than one inventory and account in any one year, or to make a second account and inventory while proceedings are pending for the statement of an account under this section. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723) § 13. Re- vised from L. 1813, ch. 60, §§ 10, 15; L. 1814, ch. 1, § 6; L. 1842, ch. 153, §§ 1-2; L. 1850, ch. 122, § 1; L. 1863, ch. 45, § 1, sub. 3; L. 1871, ch. 12, § 1, sub. 3. See cases cited under Mem. Corp. L. § 16 and revisers’ notes, ante. § 15. Corporations with governing authority over churches. An unincorporated diocesan convention, presby- tery, classis, synod, annual conference, or other ecclesias- tical governing body having jurisdiction over several churches, may at a stated meeting thereof, determine to become incorporated by a designated name, and may by a plurality vote, elect not less than three nor more than nine persons to be the first trustees of such corporation. The presiding officer and clerk of such governing body shall exe- cute and acknowledge a certificate stating that such pro- ceedings were duly taken as herein provided, the name by which such corporation is to be known, and the names of such first trustees. On filing such certificate the members. of such governing body and their successors shall be a cor-. poration by the name stated in the certificate, and the per- sons named as trustees therein shall be the first trustees thereof. The trustees of every incorporated governing body and their successors shall hold their offices during the pleasure of such body, which may remove them and fill vacancies in. 336 REticious Corporations Law. accordance with its rules and regulations. Such corpora- tion may take, administer and dispose of property for the benefit of such governing body, or of any parish, congrega- tion, society, church, mission, religious, benevolent, chari- table or educational institution existing or acting under it. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723) § 14. Re- vised from L. 1875, ch. 381, §§ 1, 2, 4; L. 1876, ch. 110, §§ 1, 2, 4; L. 1886, ch. 209. For form of certificate of incorporation under this section, see Form. No. 88. Place of Filing. Pursuant to the last sentence of the first paragraph of Section 3, ante, the certificate should be filed and recorded in the office of the Secretary of State. The Secretary of State should not file a certificate executed and acknowledged by the presiding officer and clerk of the governing body if the certificate does not show that they had the qualifications of in- corporators as required by § 4 of the General Corp. Law. Opinion of Attorney General, August 9, 1912, Report of 1912, Vol. II, p. 303. The meetings held for organization are not corporate acts, since no corporation is formed at that time, and such meetings need not be held in New York State. Opinion of Attorney General, August 9, 1912, Report 1912, Vol. II, p. 3093. The incorporators are the persons attending the meeting, and no objection can.be made to the certificate on the ground that the in- corporators are not natural persons, although such certificate states that the incorporated association is comprised of members of churches now incorporated. Opinion of Attorney General, August 9, 1912. Re- port of 1912, Vol. II, p. 393. § 16. Property of extinct churches. Such incorporated governing body may decide that a church, parish, or society in connection with it or over which it has ecclesiastical jurisdiction, has become extinct, if it has failed for two con- secutive years next prior thereto, to maintain religious ser- vices according to the discipline, customs and usages of such governing body, or has had less than thirteen resident attending members paying annual pew rent, or making an- nual contribution toward its support, or in case of a parish of the Protestant Episcopal church, if such parish has ceased for two consecutive years next prior thereto, have a suffi- cient number of men qualified to elect or to serve as wardens and vestrymen therein, and may take possession: REticious Corporations Law. 337 of the temporalities and property belonging to such church, parish or religious society, and manage the same; or may, in pursuance of the provisions of law relating to the dis- position of real property by religious corporations, sell or, dispose of the same and apply the proceeds thereof to any of the purposes to which the property of such governing religious body is devoted, and it shall not divert such prop- erty to any other object. And for the purpose of obtain- ing a record title to the land and the church edifice, or other buildings thereon, by such incorporated governing body, the surviving trustee or trustees of said extinct church, or if there be no surviving trustee then a surviving member of said extinct church, may, without a considera- tion being paid therefor by such incorporated governing body, convey to it said land and church edifice, or other buildings thereon, subject, however, to an order of the su- preme or county court based upon a petition reciting that said church has become extinct; the names of its surviving trustee or trustees, and the names of its members, who must have given their consent to the making of said con- veyance. Upon the recital of said facts in said petition the court shall have jurisdiction to grant an order allowing said conveyance to be made without a consideration; and should there be no surviving members, as well as no surviving trustee of said extinct church, said petition may be made by an officer of such incorporated governing body, in which event the court, upon a recital of said fact, shall have juris- diction to appoint a suitable person as trustee for the pur- pose of making said conveyance. Where a proceeding is instituted under this section for the sale of the real prop- erty of an extinct religious corporation, a compliance with subdivisions four, five, seven, eight and nine of section seventy-one of “An act relating to corporations generally, constituting chapter twenty-three of the consolidated laws,” shall be unnecessary, and such proceeding shall be in all re- spects valid without a compliance with said subdivisions. The New York Easterri Christian Benevolent and Mission- ary Society shall be deemed the governing religious body 338 Reticious Corporations Law. of any extinct or disbanded church of the christian denomi- nation situated within the bounds of the New York East- ern Christian Conference; and the New York Christian Association, of any other church. of the christian denomi- nation, and any other incorporated conference shall be deemed the governing religious body of any such church situated within its bounds. By christian denomination is meant only the denomination specially termed “christian,” in which the bible is declared to be the only rule of faith, christian their only name, and christian character their only test of fellowship, and in which no form of baptism is made a test of christian character. Sources—Formerly Religious Corp. L. (L. 1895, ch. 723) § 15, am’d by L. 1896, ch. 336 and 337; L. 1897, ch. 238; L. 1905, ch. 193. Revised from L, 1875, ch. 381, § 3, as am’d by L. 1877, ch. 177; L. 1876, ch. 110, as am’d by L, 1882, ch. 23; L. 1885, ch. 431; 1887, ch. Thus am’d by L. 1909, ch. 408; L. 1910, ch. 185. Title to Property. A corporation which had legal existence, although apparently dead, cannot be declared extinct by another corporation seeking succession and its property appropriated by the latter. While the earlier cor- poration existed another could not be formed with ownership of the temporalities. Ludlow v. Rector, etc, of St. John’s Ch, 144 App. Div. 207 (1911); revsd., 207 N. Y. 689 (1913), on the ground that the plaintiff had not been in possession for one year, pursuant to require- ments of the Code. The trustees of a Presbytery are the incorporated governing body of the Presbyterian churches within its territory, even though said trustees were incorporated under a special act and not the provisions of section 15 of the Religious Corporations Law. And they have the same authority to declare a congregation of that church extinct as though they had been incorporated under said section 15. Westmin- ster Pres. Ch. v. Trustees of Presbytery, etc., 142 App. Div. 855 (1911). See also 137 App. Div. 301. § 17. Property of extinct Free Baptist churches. The property both real and personal, belonging to or held in trust for any Free Baptist church, or Free Baptist religious society organized under the laws of the state of New York, that has become, or shall become extinct, shall vest in and become the property of the Central association existing under the laws of the state of New York, and its successors Reticious Corporations Law. 339 and assigns; provided that this section shall not affect the reversionary interests of any person in such property, nor the interests of any incorporated association; and any Free Baptist church or Free Baptist religious society becoming extinct or about to disband or disorganize may, by a vote of two-thirds of its members present and voting therefor at a meeting regularly called for that purpose assign, trans- fer, grant and convey all its temporalities to and place the same in the possession of the Central association existing under the laws of the state of New York. A Free Baptist church or Free Baptist religious society which has failed for two consecutive years next prior thereto to maintain religious services according to the cus- tom and usages of Free Baptist churches, or has less than thirteen resident attending members, paying annual pew rental or making annual contributions towards its support, may be declared extinct in the following manner, viz.: Upon such notice as the court may prescribe, and upon application made by petition, stating fully the facts in the case, and on evidence being furnished that the said Free Baptist church or Free Baptist religious society has ceased to hold religious services in and use said property for re- ligious worship or service for a term of two years previous to such application, the supreme court, at a term thereof held in the judicial district where such property is situated, may grant an order declaring such church or society ex- tinct, and thereon direct that all its temporalities shall be transferred to, and thereupon shall be taken possession of by the Central association of the state of New York, or directing that the same be sold in the manner directed by said order, and that the proceeds thereof, after the payment of the debts of such church or society, be paid over to the Central association of the state of New York. All property and proceeds from the sale of property so transferred to said association shall be used and applied for the purposes for which said Central association of the state of New York was organized and shall not be directed to any other purpose. 340 Re.icious Corporations Law. The First Free Will Baptist church of the city of New York, located in the borough of Manhattan, shall in no way be amenable to the provisions of this section. Source.—L, 1896, ch. 308, §§ 1-3, as am’d by L. 1808, ch. 248. § 18. Dissolution of religious corporations. Whenever any religious corporation shall cease to act in its corporate capacity and keep up the religious services; it shall be law- - ful for the supreme court of this state, upon the applica- tion of a majority of the trustees thereof, except in the county of New York, in case said court shall deem it proper so to do, to order and decree a dissolution of such religious corporation, and for that purpose to order and direct a sale and conveyance of any and all property belonging to such corporation, and after providing for the ascertaining and payment of the debts of such corporation, and the neces- sary costs and expenses of such sale and proceedings for dissolution, so far as the proceeds of such sale shall be suffi- cient to pay the same; such court may order and direct any surplus of such proceeds remaining after paying such debts, costs and expenses, to be devoted and applied to any such religious, benevolent, or charitable objects or purposes as the said trustees may indicate by their petition and the said court may approve. Such application to said court shall be made by petition, duly verified by said trustees, which petition shall state the particular reason or causes why such sale and dissolu- tion are sought ; the situation, condition and estimated value of the property of said corporation, and the particular object or purposes to which it is proposed to devote any surplus of the proceeds of such property; and such petition shall, in all casesgbe accompanied with proof that notice of the time and place of such intended application to said court, has been duly published once in each week for at least four weeks successively, next preceding such application, in a newspaper published in the county where such corporation is located. In case there shall be no trustees of such religious cor- Reticious Corporations Law. 341 poration residing in the county in which such corporation is located, such application may be made, and such proceed- ings taken, by a majority of the members of such religious corporation residing in such county. Source.—L. 1872, ch. 424, §§ 1-3. For forms of papers under above section see Forms Nos. 89 and 90, post. A meeting of the trustees is not necessary to authorize the applica- tion by a majority of the trustees. Matter of Third Meth. Epis. Church, 67 Hun 86, aff’d on op. below, 142 N. Y. 638 (1894). It is immaterial that the dissolution is contrary to or unauthorized by the discipline of the church to which the corporation belongs, for no church discipline can supersede the laws of the state. Matter of Third Meth. Epis. Church, 67 Hun &6, aff’d on op. below, 142 N. Y. 638 (1894). Other Provisions not Applicable. Articles 6, 7, and 9 of the General Corp. Law, ante, providing for the dissolution of corporations generally, do not apply to religious corporations. See Gen. Corp. Law, §§ 195, 300. Disposition of Surplus Funds. Upon. dissolution, surplus funds derived from legacies should be disposed of in such manner as the court shall believe to be most in harmony with the will of the contributors of the fund could they have foreseen the event. Matter of Congregational Ch. in Union Vil- lage, 6 Abb. N. C. 308 (1878). § 19. Corporations for organizing and maintaining mis- sion churches and Sunday schools. Ten or more members of two or more incorporated churches may become a cor- poration for the purpose of organizing and maintaining mis- sion churches and Sunday schools, and of acquiring prop- erty therefor, by executing a certificate stating the name of such corporation, the city in which its principal office or church or school is or is intended to be located; the num- ber of trustees to manage its affairs, which shall be three, six or nine, and the names of the trustees for the first year of its existence, which certificate shall be acknowledged or proved and filed as hereinbefore provided. Whenever a mission church established by such corporation becomes self-sustaining, such mission church may become incorpo- rated and shall be governed under the provisions of this chapter for the incorporation and government of a church 342 RELicIous CorProrations Law. of the religious denomination to which such mission church belongs, and thereon such parent corporation may convey to such incorporated church the property connected there- with. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723) § 16, as am’d by L. 1896, ch. 336. For form of certificate of incorporation, see Form No. 91, post. The certificate of incorporation is required to be filed and recorded in the office of the clerk of the county in which the principal office or place of worship is to be situated. Relig. Corp. Law, Sec. 3. The Trinity Church corporation, although not incorporated under a general or special law, is nevertheless exempted from the provisions of section 5 of the Religious Corporations Law, because its charter, granted by the British Crown in 1697, is a contract the obligation of which cannot be impaired. Burke v. Rector, etc., of Trinity Church, 63 Misc. 43 (1909), aff’d, no op. 132 App. Div. 930. The action of the vestry of Trinity Church in determining to change the usual religious services in St. John’s Chapel will not be enjoined, although the congregation opposes, for the vestry is the governing body and has authority to do so. Burke v. Rector, etc, of Trinity Church, 63 Misc. 43 (1909), aff’d, no op. 132 App. Div. 930. § 20. Corporations for acquiring parsonages for presiding elders and camp-meeting grounds. The presiding elder and a majority of the district stewards residing within a presid- ing elder’s district, erected by an annual conference of the Methodist Episcopal denomination, may become incorpo- rated for the purposes of acquiring, maintaining and im- proving real property to be used either as a parsonage for the presiding elder of such district or as a camp ground for camp-meeting purposes, or for both of such objects by exe- cuting, acknowledging and filing a certificate stating the name and object of the corporation to be formed, the name of such annual conference, and of such presiding elder’s dis- trict, the names, residences and official relations to such district of the signers thereof, the number of trustees of such corporation, which shall be three or some multiple of three not more than twenty-one, the names of such trustees, designating one-third to hold office for three years, one- third to hold office for two years, and one-third to hold office for one year. On filing such certificate the presiding elder and all the stewards of such district by virtue of their Reticious Corporations Law. 343 respective offices, shall be a corporation by the name and for the purposes therein stated, and the persons therein named shall be the first trustees thereof. The presiding elder and stewards of any other adjoining presiding elder’s district, in this or any other state, may become members of any such corporation, at the time of its formation or any. time thereafter, with the consent of such corporation, which has for its sole object, or for one of its objects, the acquir- ing, maintaining and improving of real property as a camp ground for camp-meeting purposes, if such presiding elder and a majority of such stewards sign, acknowledge and cause to be filed in the office of the secretary of state, a cer- tificate stating such object, the name of such adjoining dis- trict, and the names, residences and official relations to such district of the signers thereof, with the consent of the orig- inal corporation indorsed thereon. If such a corporation, which has for its sole object or one of its objects, the acquisition and maintenance of camp grounds for camp-meeting purposes, is composed of the pre- siding elders and the district stewards of more than one presiding elder’s district, the number of such trustees shall be apportioned equally, as near as may be, between the dif- ferent districts, and the presiding elder and district stewards of such district shall elect the number of trustees so appor- tioned to such district, and the remainder, if any, over an equal division of the trustees, shall be elected by all the members of the corporation. A person holding property in trust for the purposes of a parsonage for the presiding elder of a district, and his suc- cessors in office, or for camp-meeting purposes, for the Methodist Episcopal denomination, may convey the same to a corporation formed for the purpose of acquiring such property within the district in which the property is situ- ated. Meetings held under the direction of such a corpora- tion upon camp grounds owned by it shall be deemed re- ligious meetings, within the provisions of law relating to disturbances of religious meetings, and the trustees of such a corporation shall have the powers of peace officers with 344 RE.Licilous Corporations Law. relation thereto. Whenever such a corporation or any camp ground association owns land bordering upon any navi- gable waters, to be used for camp-meeting purposes only, such corporation or association may regulate or prohibit the landing of persons or vessels at:the wharves, piers or shores upon such grounds during the holding of religious services thereon. If the trustees of any such corporation heretofore incor- porated have not been classified, so that the terms of office of one-third of their number expire each year, the trustees of such corporation shall be elected annually by the mem- bers thereof; but if the trustees of any such corporation have been so classified, one-third of the total number of trustees shall be elected annually to hold office for three years. Such a corporation heretofore incorporated may, by a majority vote, at an annual meeting, or at a special meet- ing duly called therefor, determine to change the number of its trustees to three, or some multiple thereof, not more than twenty-one. On such determination a majority of the trustees shall sign, acknowledge and file in the offices where the original certificate of such corporation is filed, a supple- mental certificate, specifying such reduction or increase; and thereon the number of trustees shall be the number stated in such certificate. If the number of trustees is in- creased, the corporation shall elect, at its next annual meet- ing, a sufficient number of trustees to hold office for one, two and three years, respectively, so that the terms of office of one-third of the whole number of trustees of such cor- poration shall expire at each annual meeting thereafter. If the number is reduced, the corporation shall thereafter elect at its annual meetings one-third of the number of trus- tees specified in such supplemental certificate, but the trus- tees in office when such certificate is filed shall continue in office until the expiration of their terms, respectively. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723) § 17. Re- vised from L. 1867, ch. 265, as am’d by L. 1868, ch. 784; L. 1874, ch. 26, as am’d by L. 1894, ch. 72. For form of certificate of incorporation, see Form No. 92, post. RELIcgious Corporations Law. 345 § 21. Corporations for acquiring camp-meeting grounds for the Reformed Methodist denomination. The visiting elder of a visiting elder’s district, erected by an annual con- ference of the Reformed Methodist denomination, and three members or more in good and regular standing of three or more churches of such denomination, may become incor- porated for the purposes of acquiring, maintaining and im- proving real property, to be used as a camp ground for camp-meeting purposes, by executing, acknowledging and filing a certificate stating the name and object of the cor- poration to be formed, the name of such annual conference, and of such visiting elder’s district, the names, residences and particular church membership of the signers thereof, the number of trustees of such corporation, which shall be three, or some multiple of three, not more than twenty-one, the names of such trustees, designating one-third to hold office for three years, one-third to hold office for two years, and one-third to hold office for one year. On filing such certificate, the visiting elder and the trustees named therein, and their successors in office, shall be a corporation by the name and for the purposes therein stated. A person hold- ing property in trust for camp-meeting purposes for the Reformed Methodist denomination, may convey the same to a corporation formed for the purpose of acquiring such property within the visiting elder’s district where the prop- erty is situated. Meetings held under the direction of such a corporation upon camp grounds owned by it shall be deemed religious meetings within the religious law, relat- ing to the disturbance of religious meetings, and the trus- tees of such a corporation shall have the power of peace officers with relation thereto. Whenever such a corpora- tion, or any camp ground association of the Reformed Meth- odist denomination, owns land bordering upon any navi- gable waters to be used for camp-meeting purposes only, such corporation or association may regulate or prohibit the landing of persons or vessels at the wharves, piers or shores upon such grounds during the holding of religious services thereon. 340 Rexicious Corporations Law. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723) § 23, added by L. 1903, ch. 314. For form of certificate of incorporation, see Form No. 93, post. § 22. Establishing and maintaining a home for aged poor. An incorporated church or congregation in this state, either by itself or in conjunction with other incorporated churches or congregations, shall have power to establish and main- tain by its or their trustees or other officers, as part of its or their regular church and charitable work, a home for the aged poor of its or their membership or congregation and may take and hold as joint tenants, tenants in common or otherwise, by conveyance, donation, bequest or devise, real and personal property for such purpose, and may purchase or erect suitable buildings therefor. Any such church or congregation, either by itself or in conjunction with other incorporated churches or congregations may take and hold any grant, donation, bequest or devise of real or personal property heretofore made, upon trust, and apply the same or the income thereof under the direction of the trustees or other officers having charge of the temporalities of such church, or churches, or congregation, or congregations, for the purpose of establishing or maintaining such a home, and for the erection, preservation, repair or extension of any buildings for such purpose, upon such terms and con- ditions and subject to such conditions, limitations and re- strictions as shall be contained in the deed, will or other instrument or conveyance by which the property is given, transferred or conveyed. Source——Formerly L, 1895, ch. 607, §§ 1, 2, as am’d by L. 1898, ch. 473. § 23. Powers of churches created by special laws. If a church be incorporated by special law, it and its trustees shall have, in addition to the powers conferred on it by such law, all the powers and privileges conferred on incorporated churches and the trustees thereof respectively by the pro- visions of this article, and also all the powers and privileges conferred by this chapter on churches of the same denomi- RELicious Corporations Law. 347 nation or of the like character, and on the trustees thereof respectively. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723) § 18. Re- vised from L. 1871, ch. 776. § 24. Government of churches incorporated prior to Jan- uary first, eighteen hundred and twenty-eight. Any pro- vision of this chapter shall not be deemed to apply to any church incorporated under any general or special law, prior to January first, eighteen hundred and twenty-eight, if such provision is inconsistent with or in derogation of any of the rights and privileges of such corporation as they existed under the law by or pursuant to which such corporation was formed, unless such corporation subsequent to such date, shall have lawfully reincorporated under a law enacted since the first day of January, eighteen hundred and twenty- eight, or unless the trustees of such corporation shall, by resolution, determine that the provisions of this chapter applying to churches of the same denomination and to the trustees thereof shall apply to such church, and unless such resolution shall be submitted to the next ensuing annual meeting of such church, and ratified by a majority of the votes of the qualified voters present and voting thereon. Notice of the adoption of such resolution and of the pro- posed submission thereof for ratification, shall be given with the notice of such annual meeting, and in addition thereto, mailed to each member of such church corporation at his last known post-office address, at least two weeks prior to such annual meeting, and published once a week for two successive weeks immediately preceding such meet- ing in a newspaper, if any, published in the city, village or town in which the principal place of worship of such cor- poration is located, and otherwise in a newspaper published in an adjoining town. If such resolution is so ratified, the trustees of such church shall cause a certificate setting forth a copy of such resolution, its adoption by the board of trustees and its due ratification by the members of such corporation, to be filed in the office of the clerk of the county in which the principal place of worship of such cor- 348 Revicious Corporations Law. poration is located. Such county clerk shall cause such cer- tificate to be recorded in the book in which certificates of incorporation of religious corporations are recorded in pur- suance of law. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723) § 19, added by L. 1896, ch. 336. § 25. Pastoral relation. No provision of this chapter authorizes the calling, settlement, dismissal or removal of a minister, or the fixing or changing of his salary, and a meeting of a church corporation for any such purpose shall be called, held, moderated, conducted, governed and notice of such meeting given and person to preside thereat ascer- tained and the qualification of voters thereat determined, not as required by any provision of this chapter, but only according to the aforesaid laws and regulations, practice, discipline, rules and usages of the religious denomination or ecclesiastical governing body, if any, with which the church corporation is connected. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723) § 20, added by L. 1899, ch. 720. See note to § 5, “Authority as to ministers.” The method of fixing a minister’s salary provided by statute is ex- clusive and prohibits any other method. Landers v. Frank St. M. E Ch., 97 N. Y. 119 (1884); s. c. 114 N. Y. 626 (1889). § 26. Worship. No provision of this chapter authorizes the fixing or changing of the times, nature or order of pub- lic or social or other worship of any church, in any other manner or by any other authority than in the manner and by the authority provided in the laws, regulations, practice, discipline, rules and usages of the religious denomination or ecclesiastical governing body, if any, with which the church corppration is connected. _ Source.—Formerly Religious Corp. L. (L. 1895, ch. 723) § 21, added by L. 1899, ch. 720. § 27. Reservation as to Baptist and Congregational churches. Sections twenty-five and twenty-six are not ap- plicable to a Baptist church, a Congregational church or to REticious Corporations Law. 349 any other religious corporation having a congregational form of government. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723) § 22, added by L. 1899, ch. 720. : ARTICLE 3 Protestant Episcopal Parishes or Churches Section 40. Meeting for incorporation. , 41. Certificate of incorporation. ‘42. Corporate trustees, vestry; powers and duties thereof. 43. Annual elections and special meetings of incorporated Protestant Episcopal parishes. 44. Changing the number of vestrymen of Protestant Epis- copal parishes hereafter incorporated. 45. Changing date of annual election, number and terms of office of vestrymen and terms of office of church- wardens in Protestant Episcopal churches heretofore incorporated. 46. Changing the qualifications of voters and the qualifications of wardens and vestrymen. § 40. Meeting for incorporation. Notice of a meeting for the purpose of incorporating an unincorporated Protestant Episcopal parish or congregation, and of electing the first church wardens and vestrymen thereof, shall specify the object, time and place of such meeting, and shall be made public for at least two weeks prior to such meeting, either by open reading of such notice in time of divine service, at the usual place of worship of such parish or congregation, or by posting the same conspicuously on the outer door of such place of worship. Only men of full age who have been regular attendants at the worship of such parish or congregation and contributors to the support thereof for one year next prior to such meeting, or since the establish- ment of such parish or congregation, shall be qualified to vote at such meeting. The presence of at least six persons qualified to vote thereat shall be necessary to constitute a quorum of such meeting. The action of the meeting upon any matter or question shall be decided by a majority of the qualified voters voting thereon, a quorum being pres- ent. The officiating minister, or if there be none, or he 350 Reticious Corrorations Law. shall be necessarily absent, any other person qualified to vote at the meeting, who is called to the chair, shall preside thereat. Such presiding officer shall receive the votes, be the judge of the qualifications of voters, and declare the result of the votes cast at such meeting. The polls of the meeting shall remain open for one hour or longer, in the discretion of the presiding officer, or if required by a vote of a majority of the voters present. The meeting shall de- cide whether such unincorporated parish or congregation shall become incorporated. If such decision be in favor of incorporation, such meeting shall decide upon the name of the proposed corporation; what secular day of the week beginning with the first Sunday in Advent, shall be the date of the regular annual election; whether the vestrymen thereof shall be three, six, nine, twelve, fifteen, eighteen, twenty-one or twenty-four; and shall elect by ballot from the persons qualified to be voters thereat, who have been baptized, one-third of the number of vestrymen so decided upon to hold office until the first annual election to be held thereafter, one-third of such number, to hold office until one year after such annual election, and one-third of such num- ber, to hold office until two years after such annual elec- tion; and shall elect from such qualified voters who are communicants in the Protestant Episcopal church, two per- sons to be church wardens thereof, one to hold office until such annual election, and one to hold office until one year after such annual election. Source.—Formerly Religious Corp. L. (L. 1898, ch. 723) § 30, as am’d by L. 1898, ch. 358, and L. 1906, ch. 525. Revised from L. 1813, ch, 60, § 1, sub. 1-6, am’d by L. 1868, ch. 803. For forms under this and the next succeeding section, see Forms Nos. 94 to 96, post. Two things,must concur to qualify a person as a voter at an elec- tion held by a religious corporation after its first election: 1. Stated attendance and divine worship in a church, congregation or society for the term of one year previous to such election; 2. Contribution to the support of such church, etc. By “stated attendance” is meant personal presence of the voter statedly at the religious meetings of the society. Regular attendance of another member of the family is not sufficient. The contribution and support must be according to the usages and customs of the society, which implies that the con- Retigious Corporations Law. 351 tribution must be of a substantial character. People v. Tuthill, 3r N. Y. 550 (1864). An election should not be set aside and declared void merely be- cause certain illegal votes were received where such illegal votes did not change the result of the election. People v. Tuthill, 31 N. Y¥. sso (1864). The statute contemplates that a congregation may incorporate but one society under the above provisions. Trustees of St. Jacob’s: Lutheran Ch. v. Bly, 73 N: Y. 323 (1878). § 41. Certificate of incorporation. If such meeting shall decide in favor of incorporation and comply with the next preceding section, the presiding officer of such meeting and at least two other persons present and voting thereat, shall execute and acknowledge a certificate of incorporation set- ting forth: 1. The fact of the calling and holding of such meeting; 2. The name of the corporation as decided upon thereat ; 3. The county, and the town, city or village, in which its principal place of worship is, or is intended to be located ; 4. The day of the week commencing with the first Sun- day in Advent upon which the annual election shall be held; 5. The number of vestrymen decided upon at such meet— ing ; 6. The names of the vestrymen elected at such meeting. and the term of office of each; 7. The names of the churchwardens elected at such meet- ing and the term of office of each. On filing such certificate in the office of the clerk of the county so specified therein the churchwardens and vestry- men so elected and their successors in office, together with the rector, when there is one, shall form a vestry and shail be the trustees of such church or congregation; and they and their successors shall thereupon, by virtue of this chap- ter, be a body corporate by the name or title expressed in such certificate, and shall have power, from time to time, to adopt by-laws for its government. Such corporation shall be an incorporated church, and may be termed also an incorporated parish. 352 Re.icious Corporations Law. Sources.—Formerly Religious Corp. L. (L. 1895, ch. 723) § 31, as am’d by L. 1898, ch. 358. Revised from L. 1813, ch. 60, § 1, subs. 7, 8, as am’d by L. 1868, ch. 803. Cross References. - For provisions generally applicable to incorporation, see § 3, ante, and notes thereunder. For forms under the above section, see Forms Nos. 89 to 91, post. § 42. Corporate trustees, vestry; powers and duties thereof. No meeting of the vestry or trustees of any in- corporated Protestant Episcopal parish or church shall be held unless either all the members thereof are present, or three days’ notice thereof shall be given to each member thereof, by the rector in writing either personally or by mail, or, if there be no rector or he be incapable of acting, by one of the churchwardens; except that twenty-four hours’ notice of the first meeting of the vestry or trustees after an annual election shall be sufficient, provided such meeting be held within three days after the election. To constitute a quorum of the vestry or board of trustees there must be present either: I. The rector, at least one of the churchwardens and a majority of the vestrymen; or, 2. The rector, both churchwardens and one less than a majority of the vestrymen; or, 3. If the rector be absent from the diocese and shall have been so absent for over four calendar months, or if the meeting be called by the rector and he be absent therefrom or be incapable of acting, one churchwarden and a majority of the vestrymen, or both churchwardens and one less than a majority of the vestrymen. But if there be a rector of the parish, no measure shall be taken, in his absence, in any case, for effecting the sale or disposition of the real prop- erty of the corporation, nor for the sale or disposition of the capital or principal of the personal property of the cor- poration, nor shall any act be done which shall impair the rights. of such rector. The presiding officer of the vestry or trustees shall be the rector, or if there be none, or he be absent, the churchwarden who shall be called to the RELIcIous Corporations Law. 353 chair by a majority of the votes, if both the churchwardens be present ; or the churchwarden present, if but one be pres- ent. At each meeting of the vestry or trustees each mem- ber thereof shall be entitled to one vote. The vestry shall have power to fill a vacancy occurring in the office of a churchwarden or vestryman by death, resignation or other- wise than by expiration of term, until the next annual elec- tion, at which, if such vacancy would continue thereafter, it shall be filled for the remainder of the unexpired term. If vacancies exist in the offices of churchwardens or vestry- men in such number that a quorum of the vestry or board of trustees is not in office at any time, the rector shall forth- with call a special election for the filling of such vacancies. If there be no rector the churchwarden longest in office shall call such special election. Notice of such special elec- tion shall be read by the rector, or if there be none, or he be absent, by the officiating minister or by one of the churchwardens, on the Sunday next preceding such elec- tion, in the time of divine service. If for any reason the ‘usual place of worship of the parish be not open for divine service on such Sunday, such notice shall be posted con- Spicuously on the outer door of the place of worship for one week next preceding the election. Such notice shall conform to that required for an annual election. The pro- visions of section forty-three of this chapter relating to an- nual elections shall apply to such special election, except as inconsistent herewith. Such vacancies shall be filled at such election for the remainder of the unexpired terms. The vestry may, subject to the canons of the Protestant Episcopal church in the United States, and of the diocese in which the parish or church is situated, by a majority vote, elect a rector to fill a vacancy occurring in the rectorship of the parish, and may fix the salary or compensation of the rector. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723) § 32, as -am’d by L. 1898, ch. 358, and L. 1905, ch. 46. Revised from L. 1813, ‘ch. 60, § 1, subs. 8, 14-16, as am’d by L. 1868, ch. 803. _ Removal of Pastor. See the provisions of section 25, ante, making the rules and usages 354 RELIGIous CorPoRATIONS Law. of the particular religious denomination control over the statutory provisions. The provision that the vestry may, subject to the canons of the church and of the diocese, fill vacancies in the rectorship, necessarily import into the statute the relevant canon laws, not only relating to the act of filling the vacancy, but also relating to the manner of the termination of the relationship of pastor and people. Ackley v. Irwin, 69 Misc. 56 (1910). Where the canon law provides a complete and effective remedy for the severance of the relation between vestry and rector, it cannot be terminated by mere resolution of the vestry, and if done so and the rector is refused access to the church edifice, an injunction will issue. Ackley v. Irwin, 69 Misc. 56 (1910). Quorum. The provision requiring the presence of a majority of the vestry- “men, together with the rector, and at least one of the church wardens, to constitute a quorum, means a majority of the number of vestrymen required by the statute, and a majority of vestrymen actually in office (where there are vacancies) is insufficient. Moore v. the Rector, etc, of St. Thomas’ Church, 4 Abbott’s N. C. 51 (1873). Vacancies. Where a judgment has ousted seven of ten trustees on the ground’ that they were wrongfullv declared elected, although they had acted under such election, the title of the remaining three trustees is not affected. Such judgment creates “vacancies” to be filled by a meeting ‘called for that purpose. The old board does not hold over pursuant to section 43. Peo. ex rel. Cock v. Fleming, 13 N. Y. Supp. 715 (1891); Peo. v. Hart, 13 N. Y. Supp. 903, 906 (1891). A peremptory writ of mandamus will issue to compel the rector to call a meeting for the purpose of filling vacancies. Peo. ex rel.. Fleming v. Hart, 11 N. Y. Supp. 673 (1890). Mandamus to Compel Attendance. Vestrymen who intentionally absent themselves from meetings. which are necessary and cannot be held in their absence may be com- . pelled to attend by writ of mandamus issued at the instance of the rector. Peo, ex rel. Kenney v. Winans, 29 St. Rep. 651 (1890). * Enjoining Clergyman. Equity will not by preliminary injunction enjoin a clergyman from officiating and eject him from possession when he is in office and was placed there originally by the act of the parish, and claiming to be rightfully there, and there is no other person claiming the office or with whose rights as a minister the defendant is interfering. Youngs. v,. Ransom, 31 Barb. 49 (1859). Rexicious Corporations Law. 355 Transfer of Minister. ~ The Supreme Court has no right to compel a bishop of one diocese to give a certificate of transfer to a minigter chosen to officiate in an- other diocese, for the court cannot order specific performance of a canon of the church. No civil right of the minister is involved, al- though the validity of his contract of employment may be dependent upon the issuance of the certificate. Rector of St. James’ Ch. v. Hunt- ington, 82 Hun 125 (1804). Status of Minister. A person voluntarily entering the ministry becomes subject to the rules and canons of the church. He takes the burden or benefit of whatever remedies are provided within the church. Rector of St. James’ Ch. v. Huntington, 82 Hun 125 (1894); Connitt v. Reformed Protestant Dutch Church, etc., 54 N. Y. 551 (1874). Induction. ; There is no such thing in our law as the ceremony of institution or induction of a rector and the ecclesiatical law of England is no part of our law. If compliance with any custom is necessary under the canon law for the complete instalation of a minister, such custom "must be alleged and proved. Youngs v. Ransom, 31 Barb. 49 (1859). § 43. Annual elections and special meetings of incorpo- rated Protestant Episcopal parishes. The annual election -of a Protestant Episcopal parish, hereafter incorporated, shall be held on the secular day in the week commencing ‘with the first Sunday in Advent, designated in its certificate of incorporation. The annual election of an incorporated Protestant Episcopal parish or church heretofore incorpo- rated shall be held on the day fixed for such annual elec- tion, by or in pursuance of law, or if no such date be so fixed, then on the Monday next after the first Sunday in Advent. Special meetings of any Protestant Episcopal par- ish or church heretofore or hereafter incorporated may be “held on any secular day fixed by the vestry. Notice of such annual election or special meeting shall be read by the rector of the parish, or if there be none, or he be absent, by the officiating minister or by a churchwarden thereof, on each of the two Sundays next preceding such election or ‘special meeting, in the time of divine service, or if, for any reason, the usual place of worship of the parish be not open for divine service, the notice shall be posted conspicuously on the outer door of the place of worship for two weeks 356 Rexicious Corporations Law.. next preceding the election or special meeting. Such no- tice shall specify the place, day and hour of holding the election or special meeting. The notice of the annual elec- tion shall also specify the name and term of office of each churchwarden and vestryman whose term of office shall then expire, or whose office shall then be vacant for any cause, and the office for which each such officer is to be then elected. The notice of a special meeting shall specify the matter or question to be brought before such meeting and no matter or question not specified in such notice shall be acted on at such meeting. The presiding officer of such annual or special meeting shall be the rector of the parish, if there be one, or if there be none, or he be absent, one of the churchwardens elected for the purpose by a majority of the duly qualified voters present, or if no churchwarden be present, a vestryman elected in like manner. Such pre- siding officer shall be the judge of the qualifications of the voters; shall receive the votes cast; and shall declare the result of the votes cast. The presiding officer of such an- nual or special meeting shall enter the proceedings of the meeting in the book of the minutes of the vestry, sign his name thereto, and offer the same to as many qualified voters present as he shall think fit, to be also signed by them. Only men of full age belonging to the parish, who have been regular attendants at its worship and contributors to its support for at least twelve months prior to such election or special meeting or since the establishment of such par- ish, shall be qualified voters at any such election or special meeting. The action of an annual or special meeting upon any matter or question shall be decided by a majority of the qualified voters voting thereon. The polls of an elec- tion shall continue open for one hour and longer, in the discretion of the presiding officer, or if required by a vote of a majority of the qualified voters present and voting. ‘The churchwardens and vestrymen shall be elected by bal- lot from persons qualified to vote at such election, and no person shall be eligible for election as churchwarden, unless he be also a communicant in the Protestant Episcopal REticious Corporations Law. 357 church, nor be eligible for election as vestryman, unless he shall have been baptized. At each annual election of an incorporated Protestant Episcopal parish hereafter incorpo- rated, one churchwarden shall be elected to hold office for two years; and one-third of the total number of vestrymen of the parish shall be elected to hold office for three years. At each annual election of an incorporated Protestant Epis- copal parish or church heretofore incorporated, two church- wardens and the total number of its vestrymen shall be elected to hold office for one year thereafter, unless the term of office of but one churchwarden or of but one-third of its vestrymen shall then expire, in which case one church- warden shall be elected to hold office for two years, and one-third of the total number of its vestrymen shall be elected to hold office for three years. Each churchwarden and vestryman shall hold office after the expiration of his term until his successor shall be chosen. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723) § 33, as am’d by L. 1898, ch. 358; L. 1904, ch. 85; L. 1906, ch. 525. Revised from L. 1813, ch. 60, § 1, subs. 9-14, as am’d by L. 1868, ch. 803. For form of notice of annual election, see Form No. 97, post. For form of notice of election, see Form No. 92, post. Notice of Annual Meeting. A peremptory writ of mandamus will issue to compel the rector to give notice of the annual meeting at divine service as provided by this section. Peo. ex rel. Maclaury v. Hart, 11 N. Y. Supp. 670 (1890); Quorum. Such of the members as assemble pursuant to the call constitute a quorum. Madison Ave. Bap. Ch. v. Baptist Ch. in Oliver St., 23 How. 335, 339 (1866). What Is Stated Attendance. The personal and regular attendance of the voter at the stated times of worship, as established by the church, is necessary to constitute “stated” attendance. The regular attendance of the wife or other members of the family will not answer. No amount of contribution can be accepted in lieu of such personal presence. Peo. v. Tuthill, 31 N. Y. 550 (1864). Qualifications of Voter. ‘Two things must concur to qualify a voter. Stated attendance at divine worship and contribution to the support of the church for the statutory period. Peo. v. Tuthill, 31 N. Y. 530 (1864). An election will not be set aside where illegal votes have been 358 Reuicious Corporations Law. received if there is still a majority of legal votes for the ticket de- clared to be elected. Peo. v. Tuthill, 31 N. Y¥. 550 (1864). No qualifications can be imposed by the by-laws in addition to those prescribed by the statute. Peo. vy. Phillips, 1 Denio 388 (1845). Declaration of Result. The acceptance by a rector of ballots cast at an election of church- wardens is a final legal decision that the person casting the ballot is entitled to vote. After the result of the voting is announced, the rector cannot change his decision and change the result of the elec- tion. A peremptory writ of mandamus will issue to compel the recog- nition of the person elected. Matter of Williams, 57 Misc. 327 (1908). The question of qualification arises when the voter offers his vote. If not challenged it must be received, and if challenged the inspectors, must determine the voter’s qualification. If they receive the vote the decision is final. Hart v. Harvey, 32 Barb. 55 (1860). Determinations of Presiding Officer not Reviewable. Prior to the enactment of the Religious Corp. Law of 1895 the duties of the presiding officer were purely ministerial, but by that statute he was made the judge of the qualification of the voters, which qualifications are stated in the above Section 43. The discretion of the presiding officer in determining who are qualified voters cannot be reviewed in a civil court in the absence of bad faith or fraud, and a motion made pursuant to General Corp. L., § 32, to annul an elec-. tion on the ground that votes were received. from others than quali- fied voters, will be denied, as will be seen from the following unre- ported opinion of Maddox, J.. in Matter of Harry W. Moore and others, Supreme Court, Nassau County, May, 1912, affirmed without opinion, 152 App. Div. 909; 207 N. Y. 762 (1913). “Until the enactment in 1895 (Chap. 723) of the Religious Corpo- ration Law (known as Chap, 42 of the General Laws, Sec. 33 the duties of the presiding officer at a meeting for the election of church wardens or vestrymen of a Protestant Episcopal church, who was to be the rector, or if there be none, or he be absent, a church warden or vestryman, were purely ministerial; he was to preside, receive the votes of the qualified church electors, “be the returning officer, enter the proceedings in the book of minutes of the vestry, sign his name thercto, and offer the same to as many of the electors present as he shall think fit, to be by them also signed” (see Laws 1813, Chap. 60, Sec. 1; Laws 1868, Chap. 803, Sec. 1, par. 13). By the Act of 1805, (Chap. 723) he was made “the judge of the qualifications of the voters,” in addition to the duties above referred to, and this has ever. since so continued (see Laws 1898, Chap. 358; Laws 1904, Chap. 85; Laws 1906, Chap. 525; Laws 1909, Chap. 53, known as Chap. 51 of the Consolidated Laws, Sec. 43). It is unnecessary here to refer to the essential qualifications of the church elector to be entitled to vote at such meeting or election as provided by the statutes enacted prior to 1895. Such provisions may be found in the Laws of 1813 (Chap- ter 60, Section 1), Laws of 1819 (Chapter 33, Section 1), Laws of 1868 (Chapter 803, Section 1, paragraphs 4 and 9). Since 1895 the Re.icious Corporations Law. 359 statutory provision for such voting qualifications has been’ that , “only men of full age belonging to the parish, who have been regular at- tendants at its worship and contributors to its support for at least twelve months prior to such election, or since the establishment of such parish, shall be qualified voters at such election” (see Laws. 1895, Chap. 723, Sec. 33; Laws 1898, Chap. 358; Laws 1904, Chap. 85;, Laws 1906, Chap. 525; Laws 1909, Chap. 53). Such were the qualifications which the presiding officer at an election for church wardens and vestrymen was and is to be the judge of, and this court has. no power to review, in this proceeding, the exercise of that discretion (Matter of Williams, 57 Misc. 327). There is no question presented as to the qualifications of those returned elected as church wardens and vestry- men, and from the papers presented the conclusion is that a true can- vass and return of the votes cast was made. No fraud or bad faith in the conduct of the election is established against the rector, and the motion is denied.” The certificate of election signed by the rector is presumptive evi- dence of the right of the party receiving it to hold the office and exer- cise its functions. Peo. v. Lacoste, 37 N. Y. 192 (1867). Title to Office. In an action in the nature of a quo warranto to determine the validity of the election of wardens and vestrymen the opinion of wit- nesses that certain voters were not legal voters is not evidence of disqualification. Peo. v. Lacoste, 37 N. Y. 192 (1867). Persons assuming to act as trustees although not legally elected cannot be restrained by injunction by those legally elected. The rem- edy is by quo warranto. Hart v. Harvey, 32 Barb. 55 (1860). See, also, Gen. Corp. L., § 32, ante. Holding Over. Where a judgment has ousted seven of ten trustees on the ground that they were wrongfully declared elected, although they had acted under such election, the title of the remaining three trustees is not affected. All who were declared elected became “successors” and the old board did not hold over because a majority of thosé elected were thereafter ousted from office. Peo. ex rel. Cock v. Fleming, 13 N. Y. Supp. 715 (1891). Supervision of Election. The court has the power to appoint a referee to supervise an elec- tion, but ordinarily the rector should be left to preside. Peo. v. Hart, 13 N. Y. Supp. 904 (1891). § 44. Changing the number of vestrymen of Protestant Episcopal parishes hereafter incorporated. If the vestry of a Protestant Episcopal parish, hereafter incorporated, shall, by resolution, recommend that the number of vestry- men of such parish be changed to either three, six, nine, 360 RE.Licious Corporations Law. twelve, fifteen, eighteen, twenty-one or twenty-four vestry- men, notice of such recommendation shall be included in the notice of the next annual election of such parish, or in the notice of a special meeting to be held not less than six months before the time fixed for holding the next annual election thereafter, and be submitted to such annual or spe- cial meeting. If such recommendation be ratified by such meeting, the presiding officer thereof, and at least two qualified voters present thereat, shall execute and acknowl- edge a certificate setting forth such resolution of the vestry, the fact that notice thereof had been given with the notice of such annual election, or with the notice of such special meeting as the case may be; that the meeting had ratified the same; and the number of vestrymen so decided on. Such certificate shall be filed in the office of the clerk of the county in which the original certificate of incorporation is filed and recorded, and such change in the number of vestry- men shall take effect at the time of the next annual election thereafter. If the number of vestrymen be thereby in- creased, then, in addition to the number of vestrymen to be elected at such annual election, one-third of such in- creased number of vestrymen shall be elected to hold office for one year thereafter, one-third of such increased number shall be elected to hold office for two years thereafter, and one-third of such increased number shall be elected to hold office for three years thereafter. If the number of vestry- men by such change be reduced, such reduction shall not affect the term of office of any vestryman duly elected, and at such next annual election and at each annual election thereafter, one-third of such reduced number of vestrymen shall be elected to hold office for three years. Source.—Farmerly Religious Corp. L. (L. 1895, ch. 723) § 34, as am’d by L. 1898, ch. 358, and L. 1906, ch. 525. For form of certificate under above section, see Form No. 98, post. § 45. Changing date of annual election, number and terms of office of vestrymen and terms of office of church- ‘wardens in Protestant Episcopal churches heretofore incor- porated. If the vestry of a Protestant Episcopal parish, ReEticious Corporations Law. 361 heretofore incorporated, shall by resolution, recommend that the date of the annual election be changed to a secu- lar day in the week beginning with the first Sunday in Ad- vent, or that the number of vestrymen be changed to three, six, nine, twelve, fifteen, eighteen, twenty-one or twenty- four, and that the terms of office of the churchwardens be changed so that one warden shall be elected annually, no- tice of such recommendation shall be included in the notice of the next annual election of such parish, or in the notice of a special meeting to be held not less than six months be- fore the time fixed for holding the next annual election thereafter, and be submitted to such annual or special meeting. If such recommendation be ratified by such meet- ing, the presiding officer thereof and at least two quali- fied voters present thereat, shall execute and acknowledge a certificate setting forth such resolution of the vestry; the fact that notice thereof had been given with the notice of the annual election, or with the notice of the special meet- ing, as the case may be; that such meeting had ratified the same; the date determined upon for the annual election of the parish; the number of vestrymen so decided on; and the fact that the meeting determined to thereafter elect church- wardens, so that the term of one warden shall expire an- nually. Such certificate shall be filed in the office of the clerk of the county in which the original certificate of in- corporation is filed and recorded. If the meeting determine to change the date of the annual election, the next annual election shall be held on the day in the week beginning with the first Sunday in Advent, determined on at such meeting, and the terms of the vestrymen and churchwar- dens which, pursuant to law, would expire at the next an- nual election shall expire and their successors shall be elected on such day. If the meeting determine to change the number of vestrymen and manner of electing wardens and vestrymen, there shall be elected at the first annual election thereafter, one-third of the number of vestrymen so determined on, to hold office for three years; one-third thereof to hold office for two years; and one-third thereof 362 ReEticious Corporations Law. to hold office for one year; and one churchwarden to hold office for one year, and one to hold for two years ; and there- after at the annual election there shall be elected one-third of the number of vestrymen determined on at such meeting and one churchwarden. Any ProteStant Episcopal parish, heretofore incorporated, which has changed the number of its vestrymen and the manner of electing wardens and ves- trymen pursuant to the provisions of this section, may make further changes in the number of its vestrymen in the man- ner provided in section forty-four of this chapter. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723) § 35, as am’d by L. 1898, ch. 358, and L. 1906, ch. 525. For form of certificate under the above section, see Form No. 99,- post.. § 46. Changing the qualifications of voters and the qual- ifications of wardens and vestrymen. If the vestry of a: Protestant Episcopal parish heretofore incorporated shall by resolution recommend that the qualifications of voters: and the qualifications of wardens and vestrymen be changed. to conform in both cases to the requirements of section’ forty-three of this chapter, notice of such recommendation shall be included in the notice of the next annual election: of such parish, and be submitted to the meeting. If such recommendation be ratified by such meeting the presiding” officer thereof and at least two qualified voters present thereat shall execute and acknowledge a certificate set- ting forth such resolution of the vestry, the fact that notice thereof had been given with the notice of such annual elec- tion, and that the meeting had ratified the same. Such cer- tificate shall be filed in the office of the clerk of the county: in which the original certificate of incorporation is filed and recorded. Sure Hormeny Religious Corp. L. (L. 1895, ch. 723) § 36, as am’d by L. 1898, ch. 358. For form of certificate under the above section, see Form. No. 100, oor he qualifications of voters, wardens and vestrymen prescribed by Section 43 of this law and enacted after 1828 do not apply to Protes- tant Episcopal churches incorporated prior to that date, for the rea- son that charters of such corporations are not subject to alteration REvicious Corporations Law. 363 and repeal. Dartmouth College case, 4 Wheat. 518 (1819); Peo. ex rel. Sturges v. Keese, 27 Hun 483 (1882). But in 1828 the Legislature enacted the statute (1 R. S. 600, Sec. 8) reserving to itself the right to alter and: repeal the charters. of all corporations thereafter granted. Therefore, corporations organized prior to 1828 may follow the pro- cedure set forth in the above section if it is desired that the qualifica- tions of voters, wardens and vestrymen be changed to conform to the requireemnts of Section 43. See also section 24 of this law, ante. § 47. Free churches in communion with the Protestant Episcopal Church. Whenever the trustees of any free ‘church in communion with the Protestant Epsicopal Church heretofore or hereafter organized under the provisions. of article nine of this act shall desire to change the manage- ment of its affairs and the form of government of the cor- poration by substituting a vestry in place of such trustees, ‘such change may be made. in the following manner: The ‘trustees of any free church having first obtained the written ‘consent of the ecclesiastical authority of the diocese to such change may by an. affirmative vote of not less than two- thirds determine by resolution reciting the consent of such ecclesiastical authority and duly recorded in the min- utes of such church to change the management of its affairs by substituting a vestry in place of such trustees to manage the affairs of such corporations and free church with the same powers, duties and privileges as are now possessed and exercised by church wardens and vestrymen in churches of the Protestant Episcopal church organized under this article, but subject to the provisions of section one hundred and eighty-three of this chapter and for the purposes set forth in the certificate of incorporation of ‘such free church and for no other purposes; such resolution shall fix the day ‘of the week, commencing with the first Sunday im Advent, upon which the annual election shall be held, the number to constitute such vestry which shall be two church war- ‘dens and either three, six, nine, twelve, fifteen, twenty-one or twenty-four vestrymen as may be determined, and shall also designate the persons to be such church wardens and “vestrymen to act’ wntil the annual election, and. copies of -such resolution, together with a statement of the vote of the 364 Reticious Corporations Law. trustees adopting the same certified under the seal of the corporation and verified by the president and secretary thereof, shall be filed in the office of the secretary of state and also in the office of the clerk of the county in which such church or corporation is located. Upon and after the filing of such certificates the church wardens and vestry- men named in said resolution and their successors in office, together with the rector when there shall thereafter be one, shall form the vestry and shall be the vestry and shall constitute the corporation; and at the first annual election the church wardens and vestrymen shall be divided into classes and their respective terms of office fixed and shall be elected by the persons qualified to vote for the church wardens and vestrymen in churches or congregations of the Protestant Episcopal church and the provisions of this article shall govern such election and all future elections and all acts of such vestry, subject to the provisions of sec- tion one hundred and eighty-three of this chapter. New section, added by L. 1913, ch. 487. ARTICLE 4 Presbyterian Churches -Section 60. Application of this article. 61. Creation and termination of pastoral relation. 62. Worship. 63. Incorporation of unincorporated Presbyterian churches and decision as to system of incorporation and gov- ernment. 64. Changing system of trustees. 6s. Corporate meetings. 66. Organization and conduct of corporate meetings; quali- fications of voters thereat. 67. Ghanging date of annual corporate meetings. 68. Changing number of trustees. 69. Trustees, their meetings, vacancies and filling thereof, their powers. 70. Definitions. § 60. Application of this article. This article applies only to a Presbyterian church in connection with the gen- REticious Corporations Law. 365 eral assembly of the Presbyterian Church in the United States of America. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723) § 37, added by L. 1902, ch. 97. § 61. Creation and termination of pastoral relation. ‘The election, calling, settlement, installation, dismissal, re- moval, translation, constituting or dissolving of the pas- toral relation, or fixing or changing of the salary of a minister or pastor of a Presbyterian church in connection with the general assembly of the Presbyterian church in the United States of America, or taking any action for or toward any such purpose, and the calling and conduct of a meeting of any such church for any such purpose, and the qualification of voters at any such meeting, are not author- ized or regulated or controlled by any provision of this chapter, but the same shall be in all respects, done, and regulated, and any meeting therefor called, conducted, and controlled, only in accordance with the laws, regulations, practice, discipline, books of government, rules and usages of the ecclesiastical governing body of such church and of the Presbyterian church in the United States of America, except that the salary of any such minister may be in- creased at any corporate meeting of any such church. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723) § 38, added by L. 1902, ch. 97. §62. Worship. Nothing in this chapter contained shall authorize the fixing or changing of the times, nature or order of public or social or other worship of any Presby- terian church, in any other manner, or by any other author- ity, than in the manner and by the authority provided in the laws, regulations, practice, discipline, rules and usages of the Presbyterian religious denomination or ec- clesiastical governing body, with which such church is ‘connected. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723) § 30, added by L. 1902, ch. 97. 366 Reticious Corporations Law. § 63. Incorporation of unincorporated Presbyterian churches and decision as to system of incorporation and government. A meeting for the purpose of incorporation of an unincorporated Presbyterian church in connection with the Presbyterian church in the United States of America, must be called and held in pursuance of the pro- visions of this article. 1. ‘The notice and call of such meeting shall be in writ- ing, and shall state in substance, that a meeting of such unincorporated church will be held at its usual place of worship at a specified day and hour for the purpose of in- corporating such church and designating the trustees there- of. The notice must be signed by at least six. persons of full age who are then members in good and regular stand- ‘ing of such church by admission into full communion or membership therewith, in accordance with the rules and regulations of such church, and of the governing ecclesi- astical body of the denomination or order, to which the church belongs. A copy of such notice shall be posted con- spicuously on the outside of the main entrance to such place of worship, at least fifteen days before the day so specified for such meeting, and such notice shall be pub- licly read at each of the two next preceding regular meet- ings of such unincorporated church for public worship, at least one week apart, at. morning service, if such service be held on Sunday, by the first named of the following persons who is present thereat, to wit: The minister of such church, the officiating minister thereof, the elders there- of in the order of their age beginning with the oldest, the deacons of the church in the order of their age begin- ning with the oldest, or by any person qualified to sign such notic 2. At the meeting for incorporation held in pursuance of such notice, the following persons, and no others, shall be qualified voters, to wit: All persons of full age, who are then members, in good and regular standing of such church by admission into full communion or membership there- with, in accordance with the rules and regulations thereof, RELIGIous Corporations Law. 367 and of the governing ecclesiastical body of the denomina- tion or order to which the church belongs. The presence of a majority of such qualified voters, at least six in number, shall be necessary to constitute a quorum of such meeting. The action of the meeting upon any matter or question shall be decided by a majority of the qualified voters voting thereon, a quorum being present. 3. The first named of the following persons who is pres- ent at such meeting shall preside thereat, to wit: The min- ister of the church, the officiating minister thereof, the elders thereof in the order of their age, beginning with the oldest, the deacons thereof in the order of their age, begin- ning with the oldest. The presiding officer of the meeting shall receive the votes, be the judge of the qualifications of voters, and declare the result of the votes cast on any mat- ter. Nothing contained in this section, or in this chapter, shall prevent the qualified voters at any such meeting, from choosing another person, a qualified voter, to preside at such meeting, other than the person or officer above desig-. “nated. 4. The first business of such meeting after its organiza- tion, shall be to determine whether such church shall be in- corporated, and if so, the name of such church, and whether its temporalities shall be managed by the spiritual officers ‘of such church as the trustees thereof, or whether its temporalities shall be managed by trustees to be elected by the church. s. If such meeting shall determine that such church shall be incorporated and its temporalities managed by the spir- itual officers of such church as the trustees thereof, then the meeting shall also determine whether by virtue of their office, the deacons only of such church, or the pastor, ruling elders and deacons of such church, or the pastor and ruling elders of such church shall manage its temporalities, and be the trustees of such corporation. 6. If such meeting shall determine that such church shall ‘be incorporated and its temporalities managed by trustees to be elected by the church, it shall further determine the 368 Reticious Corporations Law. number of the trustees of such church, which shall not be less than three nor more than nine, and shall further deter- mine the date not more than fifteen months thereafter on which the first annual election of the trustees thereof after such meeting shall be held, and:such meeting shall elect from’ the persons qualified to vote at such meeting, one- third of the number of trustees so decided on who shall hold office until the first annual election of trustees thereafter, one-third of such number of trustees to hold office until the second annual election of trustees thereafter, and one-third of such number of trustees to hold office until the third an- nual election of trustees thereafter. 7. If any such meeting shall determine that such church shall incorporate in pursuance of this article, the presiding officer and at least two other persons present at such meet- ing, shall execute, acknowledge and cause to be filed and recorded, as provided in this chapter, a certificate of incor- poration. Such certificate of incorporation shall state the name of the proposed corporation: the county and town, city or village, where its principal place of worship is or is intended to be located; the fact that a meeting of such church duly called decided that such church be incorpo- rated, also the determination of such meeting of all the mat- ters required in this article to be determined by such meet- ing, and, as the case shall be, the names of the persons elected as trustees, and the term for which each was elected, or the names of the spiritual officers and their offices, who, by the determination of such meeting, are by virtue of their office to be trustees of such corporation. On filing such certificate such church shall be a corporation by the name stated therein, and the officers determined upon by the meeting for incorporation and their successors in office, by virttle of their offices, if they be spiritual officers of such church, shall be the trustees of such corporation, or if by said meeting it was determined that the trustees should be elected as such, then such as were so elected by said meet- ing as trustees, and their successors in office shall be the trustees of such corporation. Rexicious Corporations Law. 369 Source.—Formerly Religious Corp. L. (L. 1895, ch. 723) § 40, added by L. 1902, ch. 97. For forms, respectively, of notice of meeting for incorporation, min- utes of meeting and certificate of incorporation, see Forms Nos. ror to 103, post. Cross References. For provisions generally applicable te incorporation, see § 3, ante, and notes thereunder. A certificate of incorporation is sufficient which recites, (1) that the meeting was composed of male members, for there is nothing to show that female members were excluded and that they did not re- main away voluntarily; (2) that there being no minister, elder or deacon present, others were appointed Chairman and Secretary; (3) that by general consent the society is to continue to be known as Man- hattanville Presbyterian Society. Lynch v. Pfeiffer, 110 N. Y. 33 (1888). The ruling elders and members of the session of a Presbyterian church may not enjoin trustees alleged to have been removed by ecclesiastical courts from acting as trustees. The duty rests with the remaining trustees to protect the temporalities of the church by taking such action as would protect the corporation. Westminster Pres. Ch. v. Findley, 44 Misc. 173 (1904). § 64. Changing system of trustees. 1. If the trustees of an incorporated Presbyterian church in connection with the Presbyterian church in the United States of America, shall at any time be elective as trustees and not trustees by: virtue of being spiritual officers, the church may, at an an- nual corporate meeting if notice thereof be given with the notice of such meeting, determine that the deacons thereof, or the pastors, the ruling elders and the deacons thereof or the pastor and the ruling elders thereof, shall thereafter constitute the trustees thereof, and thereupon the presiding officer of such meeting and at least two other persons pres- ent thereat, shall sign, acknowledge and cause to be filed and recorded, a certificate stating the fact of such deter- mination, the names of the officers determined upon to be the ex officio trustees thereof; and thereon the terms of office of such elective trustees shall cease, and the officers determined upon by such corporate meeting, and their suc- cessors in office shall, by virtue of their respective offices, be the trustees of such church. 370 ReELicious CorporATIons Law. 2. If, at any time, the spiritual officers of an incorporated Presbyterian church in connection with the Presbyterian church in the United States of America, which officers by virtue of their offices constitute the trustees thereof, shall determine to submit to a meeting’ of such church corpora- tion, the question whether the trustees of such church shall be thereafter elective as such trustees, they shall cause a special corporate meeting of such church to be called and held in the manner provided in section sixty-five of this chapter, and such corporate meeting shall determine, whether the trustees of such church shall thereafter be elective in pursuance of this article, and also whether the number of such trustees shall be three, six or nine, and the date of the annual corporate meeting of the church. If such meeting shall determine that such trustees shall there- after be elective as such trustees, and the number of such trustees, and the date of the first annual corporate meeting of the church, the presiding officer thereof and at least two other persons present and voting thereat, shall sign, ac- knowledge and cause to be filed and recorded in the office of of the clerk of the county in which the certificate of incor- poration of such church is filed, a certificate of such deter- mination of such meeting; and thereafter the trustees of such church shall be elective in pursuance of this article. At the next annual corporate meeting after the filing of such certificate, one-third of the number of trustees so de- termined on, shall be elected to hold office for one year, one- third for two years, and one-third for three years, and the officers of such church who by virtue of their offices have been trustees of such church, shall then cease to be such trustees, and thereafter the trustees of such church and their sugcessors shall be elective as such trustees as in this article provided. At each subsequent annual corporate meeting of said church, one-third of the number of trustees so determined on shall be elected to hold office for three years. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723) § 41, added » by L. 1902, ch. 97. Reticious Corporations Law. 371 § 65. Corporate meetings, 1. In every incorporated church to which this article applies and in which the trus- tees thereof as such are elective, there shall be held an an- nual corporate meeting. Such annual corporate meeting of every incorporated church to which this article is applicable, shall be held at the time and place fixed by or in pursuance of law therefor, if such time and place be so fixed, and otherwise, at a time and place to be fixed by its trustees. 2. A special corporate meeting of any such church may be called by trustees thereof on their own motion, and must be so called on the written request of at least ten qualified voters of such church, and shall be called and notice thereof given in the same manner as for an annual corporate meet- ing. 3. The trustees shall cause notice of the time and place of its corporate meetings to be given at a regular meeting of the church for public worship, at morning service, if such service be held, on each of the two successive Sundays next preceding such meeting, if public worship be had thereon, or otherwise on each of two days, at least one week apart, next preceding such meeting; or if no such public worship be held during such period, by conspicuously posting such notice, in writing, upon the outer entrance to the principal place of worship of such church. Such notice shall be given by the minister of the church, if there be one, or by the officiating minister thereof, if there be one, or by any offi- cer of such church. If such notice be of an annual cor- porate meeting it shall specify the names of the trustees whose successors are to be elected thereat ; if such notice be of a special corporate meeting, it shall specify the particu- lar business to be transacted thereat, and no other business shall be transacted at such special corporate meeting. 4. Whenever in any such incorporated church, by virtue of their offices, any of the spiritual officers thereof are the trustees thereof, they may in their discretion call special corporate meetings of such incorporated church; and in such case such meetings shall be called by the same notice published or posted in the same manner as herein provided 372 RE.Licious Corporations Law. for the notice of such a meeting by the trustees of such a church elected as such; and in each such case such notice must specify the particular business to be transacted at such meeting, and no other business shall be transacted at such special corporate meeting. | Source—Formerly Religious Corp. L. (L. 1895, ch. 723) § 42, added by L. 1902, ch. 97. § 66. Organization and conduct of corporate meetings; qualifications of voters thereat. 1. At a corporate meeting of an incorporated church to which this article is applicable the following persons and no others shall be qualified voters, to wit: All persons of full age who are then mem- bers in good and regular standing of such church by admis-. sion into full communion and membership therewith, in accordance with the rules and regulations thereof, and of the governing ecclesiastical body, of the denomination to which the church belongs, or who have been stated attend- ants on divine worship in such church and have regularly contributed to the financial support thereof during the year next preceding such meeting. 2. The presence at any corporate meeting of an incor- porated church of at least six persons qualified to vote thereat shall be necessary to constitute a quorum. The action of the meeting upon any matter or question shall be decided by a majority of the qualified voters voting thereon, a quorum being present. 3. The first named of the following persons who is pres- ent at any corporate meeting of any incorporated church shall preside thereat, to wit: The minister of such church, the officiating minister thereof, the officers thereof in the order of their age, beginning with the oldest; any qualified voters elected therefor at the meeting. 4. Nothing contained in this article shall prevent the qualified voters at any meeting held pursuant to this article from choosing a person to preside at any corporate meeting of any incorporated church, other than the person or officer designated in this article to preside thereat, and when such RELIGIous Corporations Law. 373 other person shall be chosen he shall exercise all the powers in this article conferred upon the presiding officer of such meeting. 5. The presiding officer of a corporate meeting shall re- ceive the votes, be the judge of the qualifications of voters, and declare the result of the votes cast on any matter. The polls of an annual corporate meeting shall continue open for one hour, or until all qualified voters present shall have had a full opportunity to vote, and longer in the discretion of the presiding officer, or if required by a majority of the qualified voters present. 6. At each annual corporate meeting successors to those trustees whose terms of office then expire shall be elected from the qualified voters by ballot for a term of three years thereafter. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723) § 43, added by L. 1902, ch. 97. What Is Stated Attendance. The personal and regular attendance of the voter at the stated times of worship, as established by the church, is necessary to constitute “stated” attendance. The regular attendance of the wife or other members of the family will not answer. No amount of contribution can be accepted in lieu of such personal presence. Peo. v. Tuthill, 31 N. Y. 550 (1864). Qualifications of Voter. Two things must concur to qualify a voter: Stated attendance on divine worship and contribution to the support of the church for the statutory period. Peo. v. Tuthill, 31 N. Y. 550 (1864). An election will not be set aside where illegal votes have been received if there is still a majority of legal votes for the ticket de- clared to be elected. Peo. v. Tuthill, 31 N. Y. 550 (1864). § 67. Changing date of annual corporate meetings. An annual corporate meeting of an incorporated church to which this article is applicable, may change the date of its annual meeting thereafter. If such date shall next there- after occur less than six months after the annual meeting at which such change is made the next annual meeting shall be held one year from such next recurring date. For the purpose of determining the terms of office of trustees, the time between the annual meeting at which such change 374 Reticious Corporations Law. is made and the next annual meeting thereafter shall be reckoned as one year. Source—Formerly Religious Corp. L. (L. 1895, ch. 723) § 44, added by L. 1902, ch. 97. § 68. Changing number of trustees. An incorporated church to which this article is applicable, may, at an annual corporate meeting, change the number of its trustees to three, six or nine, and classify them so that the terms of one-third expire each year. No such change shall affect the terms of the trustees then in office, and if the change reduces the number of trustees it shall not take effect until the number of trustees whose terms of office continue for one or more years after an annual election, is less than the number determined upon. Whenever the number of trus- tees so holding over is less than the number so determined on, trustees shall be elected in addition to those so holding over sufficient to make the number of trustees for the en- suing year equal to the number so determined on. The trustees so elected up to and including one-third of the number so determined on, shall be elected for three years, the remainder up to and including one-third of the number so determined on for two years and the remainder for one year. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723) § 45, added by L. 1902, ch. 97. § 69. Trustees, their meetings, vacancies and filling thereof, their powers. 1. Two trustees of an incorporated church, to which this article is applicable, may call a meet- ing of such trustees by giving at least twenty-four hours’ notice thereof personally or by mail to the other trustees. A majonity of the trustees lawfully convened shall consti- tute a quorum for the transaction of business. In case of a tie vote at a meeting of the trustees, the presiding officer of such meeting shall, notwithstanding he has voted once, have an additional casting vote. 2. If any trustee of an incorporated church to which this article is applicable, declines to act, resigns or dies, or hav- REeEuicious, Corporations Law. 375 ing been a member of such church, ceases to be such mem- ber, or not having been a member of such church, ceases to be a qualified voter at a corporate meeting thereof, his office shall be vacant and such vacancy may be filled by. the remaining trustees until the next annual corporate meeting of such church, at which meeting the vacancy shall be filled for the unexpired term. 3. The trustees of an incorporated church to which this article is applicable shall have the custody and control of all the temporalities and property belonging to the corporation and of the revenues from such property, and shall adminis- ter the same in accordance with the discipline, rules, usages, laws, and book of government of the religious denomina- tion or ecclesiastical governing body with which the church is connected, and with the provisions of law relating there- to, for the support and maintenance of the church corpora- tion or providing the members thereof at a corporate meet- ing thereof shall so authorize, of some religious, charitable, benevolent, or educational object, conducted by such church, or connected with it, or with the denomination with which it is connected, and they shall not use such property or revenue for any other purpose or divert the same from such uses. 4. By-laws, or directions, adopted at any corporate meet- ing of any such incorporated Presbyterian church shall con- trol the subsequent action of its trustees, as to the tempo- ralities and property or revenues therefrom, and as to the care thereof, and changes in either thereof and disposition thereof. 5. The words “temporalities,” “property,” “revenue” and “revenues,” as used in this section, or elsewhere in this article, shall not be construed to include the contributions in such church or elsewhere for benevolent or other pur- poses, which shall be contributed and paid to the pastor or pastors, ruling elders, the church session, or the deacons of any such church, either in the church services or other- wise, to be distributed, or used, or administered, by them, or any, or either of them, nor to any funds or property de- 29 66 29 66. 376 Rexicious Corporations Law. vised, bequeathed or contributed, to be administered or ex- pended by such pastor or pastors, ruling elders, church ses- sion, deacons or other spiritual officers of such church. 6. The trustees of any such church shall have no power, without the consent of a corporate meeting, to incur debts. beyond what is necessary for the care of the property of the corporation. Source——Formerly Religious Corp. L. (L. 1895, ch. 723) § 46, added by L. 1902, ch. 97. ee If trustees of one church become incorporators in another religious corporation, they cease to be members and trustees of the former. Matter of M. E. Society v. Perry, 51 Hun 104 (1889); Laight St Baptist Ch. v. Noe, 12 How. Pr. 497 (1855); First Ref. Pres. Ch. v. Bowden, 10 Abb. N. C. 1 (1880), aff’d on op. below, 14 Abb. N. C. 356. For a discussion of the powers of the governing body of the Pres- byterian church to control the action of the trustees as to the tem- poralities of the constituent churches and a historical statement of the statutory changes relative thereto see Westminster Pres, Ch. v. Trus- tees of Presbytery, etc. 142 App. Div. 855 (1911). Casting Vote. The statutory provision is in accord with the ruling in Peo. v. Rec- tor, etc., of Ch. of Atonement, 48 Barb. 603 (1866). § 70. Definitions. The words “spiritual officers,” as used in this article, include the pastor or pastors, the ruling elders, and the deacons, of any church to which this article is applicable. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723) § 47, added by L. 1902, ch. 97. ARTICLE 5 Roman Catholic and Greek Churches Section 90. Incorporation of Roman Catholic and Greek churches. gi. Government of incorporated Roman Catholic and Greek churches. 92. Division of Roman Catholic parish; disposition of prop- erty. § 90. Incorporation of Roman Catholic and Greek churches. An unincorporated Roman Catholic church, or an unincorporated Christian Orthodox Catholic church of the Eastern Confession, in this state may become incorpo- Rexicious Corporations Law. 377 rated as a church by executing, acknowledging and filing a certificate of incorporation, stating the corporate name by which such church shall be known and the county, town, city or village where it principal place of worship is, or is intended to be, located. A certificate of incorporation of an unincorporated Roman Catholic church shall be executed and acknowl- edged by the Roman Catholic archbishop or bishop, and the vicar-general of the diocese in which its place of wor- ship is, and by the rector of the church, and by two laymen, members of such church who shall be selected by such offi- cials, or by a majority of such officials. A certificate of incorporation of an unincorporated Chris- tian Orthodox Catholic church of the Eastern Confession shall be executed and acknowledged by the envoy extraordi- nary and minister plenipotentiary, and the consul-general of Russia to the United States, then acknowledged and re- ceived as such by the United States. On filing such certificate such church shall be a corpora- tion by the name stated in the certificate. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723) § 50. Re- vised from L. 1863, ch. 45, § 1, sub. 1; L. 1871, ch. 12, § 1, sub. 1. For form of certificate of incorporation, see Form No. 104, post. Cross References. For provisions generally applicable to incorporation, see § 3, ante, and notes thereunder. Judicial Notice. The courts will not take judicial notice of the nature and powers of the Holy Roman Catholic Church so far as its civil rights and duties are concerned, nor generally of church rights and powers. Bax- ter v. McDonnell, 155 N. Y. 83 (1898). Selection of Trustees. Members have no voice in the selection of trustees, the latter being a self-perpetuating body. The method of selection is different from that provided in the case of other religious societies, and from the general plan provided in the original act of 1813. People’s Bank v. St. Anthony’s R. C. Ch. 109 N. Y. 512 (1888); the members and congregation, however, are the corporators and the trustees only the governing body. (Id.) Trustees have no separate or individual authority to bind the cor- 378 Reticious Corporations Law. poration. Only when acting as a board can they perform or authorize acts binding on the corporation. People’s Bank v. St. Anthony’s R., C. Church, 109 N. Y. 512 (1888) ; Columbia Bank v. Gospel Tab. Ch., 127 N. Y. 361 (1891). § 91. Government of incorporated Roman Catholic and Greek churches. The archbishop or bishop and the vicar- general of the diocese to which any incorporated Roman Catholic church belongs, the rector of such church, and their successors in office shall, by virtue of their offices, be trustees of such church. Two laymen, members of such in- corporated church, selected by such officers or by a ma- jority of them, shall also be trustees of such incorporated church, and such officers and such laymen trustees shall to- gether constitute the board of trustees thereof. The two laymen signing the certificate of incorporation of an in- corporated Roman Catholic church shall be the two lay- men trustees thereof during the first year of its corporate existence. The term of office of the two laymen trustees of an incorporated Roman Catholic church shall be one year. Whenever the office of any such layman trustee shall become vacant by expiration of term of office or otherwise, his successor shall be appointed from members of the church, by such officers or a majority of them. No act or proceed- ing of the trustees of any such incorporated church shall be valid without the sanction of the archbishop or bishop of the diocese to which such church belongs, or in case of their absence or inability to act, without the sanction of the vicar-general or of the administrator of such diocese. The envoy extraordinary and minister plenipotentiary, and the consul-general of Russia to the United States, ac- knowledged and received as such, and their successors in office shall, by virtue of office, be the trustees of every in- corporated Christian Orthodox Catholic church of the East- ern Confession in this state. The trustees of any such church shall have power to fix and change the salary of the rector and his assistant, appointed or commissioned ac- cording to the rules and usages of the denomination to which such church belongs. Reticious Corporations Law. 379 Source.—Formerly Religious Corp. L. (L. 1895, ch. 723) § 51. Re- vised from L. 1863, ch. 45, § 1, subs. 1-2; L, 1871, ch. 12, § 1, subs. 1-2, Bishop and Priest. An action for salary cannot be maintained by a priest against the. bishop of his diocese where the alleged obligation arises from the laws of the church and not through a personal promise of the bishop. Bax- ter v. McDonnell, 155 N. Y. 83 (1898), revsg. 18 App. Div. 235. If the question of a priest’s right to salary has been submitted by the parties to an ecclesiastical tribunal organized by the church for that purpose, the decision of such tribunal is a bar to a subsequent action against the bishop, where the claim is based solely on church laws and customs. Baxter v. McDonnell, 155 N. Y. 83 (1898), revsg. 18 App. Div. 235. For a full discussion of the relation of priests to the ecclesiastical body and the bishop see Baxter v. McDonnell, 155 N. Y. 83 (1898), revsg. 18 App. Div. 235. § 92. Division ‘of Roman Catholic parish; disposition of property. Wherever a Roman Catholic parish has been heretofore or shall hereafter be duly divided by the Roman Catholic bishop having jurisdiction over said parish, and the original Roman Catholic church corporation is given one part of the old parish, and a new or second Roman Catholic church corporation is given the remaining part of the old parish, and it further appears that by reason of the said division the original Roman Catholic church corpora- tion holds title to real property situate within the part of the old parish that was given to the new or second Roman Catholic church corporation, then the said Roman Catholic bishop or his successor shall have the right and power, of himself, independently of any action or consent on the part of the trustees of the original Roman Catholic church cor- poration, to transfer the title of the said real property, with or without valuable consideration, to the said new or sec- ond Roman Catholic church corporation. Said transfer shall be made by the said Roman Catholic bishop or his successor after having complied with the requirements of the code of civil procedure in the same manner as the trustees of any religious corporation are compelled to do before making a transfer of church property. If a valuable con- sideration is paid for the transfer the same shaii be re- ceived by the said Roman Catholic bishop or his successor 380 Reuicious Corporations Law. and distributed between the said original Roman Catholic church corporation and the new or second Roman Catholic church corporation in such proportions as in the discretion of the said bishop or his successor may seem proper. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723) § 52, added by L. 1902, ch. 365. The provisions of the code of civil procedure above referred to are now contained in Gen. Corp. L. §§ 70, et seq., ante. ARTICLE 6 Reformed Dutch, Reformed Presbyterian and Lutheran Churches Section 110. Decision by a Reformed Dutch or Reformed Presbyterian church as to system of incorporation and government: 111. Decision by Lutheran church as to system of incorpora- tion and government. 112. Incorporation of Reformed Dutch, Reformed Presbyterian and Evangelical Lutheran churches under this article. 113. Consistory of a Reformed church in America; minister, how chosen. 114. Reformed churches in America, changing system of choos- ing trustees; minister, how chosen. 115. Reformed Presbyterian churches, changing system of choosing trustees; pew rents and minister’s salary. 116. Evangelical Lutheran church, changing system of electing trustees. § 110. Decision by a Reformed Dutch or Reformed Pres- byterian church as to system of incorporation and govern- ment. The minister or ministers, if there be any, and the elders and deacons of an unincorporated church in connec- tion with the Reformed church in America, the true Re- formed Dutch church in the United States of America, or with the Reformed Presbyterian church, may determine to incorporate such church in pursuance of this article, or to call a meeting of such unincorporated church for the pur- pose of deciding whether such church shall be incorporated in pursuance of article ten of this chapter, entitled “Special provisions for the incorporation and government of churches of other denominations.” If such ministers, elders and deacons determine to call Reticious Corporations Law. 381 such meeting for such purpose, then such church may ba incorporated and shall be governed after its incorporation in pursuance of the provisions of article ten of this chapter, except such provisions thereof as are applicable to churches of a single denomination only, and except that the notice of the meeting for incorporation shall be signed by such ministers, elders and deacons or a majority of them, and no other signatures thereto shall be necessary to its validity; and, if it be a Reformed church in America, it shall, after incorporation, be governed by such of the provisions of this article as relates to its consistory and to the choice of its minister. Source —Formerly Religious Corp. L. (L. 1895, ch. 723) § 60. Re- vised from L. 1813, ch. 60, § 2; L. 1822, ch. 187, § 1; L. 1825, ch. 303, § 1. § 111. Decision by Lutheran church as to system of in- corporation and government. A meeting for the purpose of incorporating an unincorporated Evangelical Lutheran church must be called and held in pursuance of the provis- ions of article ten of this chapter, except that the first busi- ness of such meeting after its organization, shall be to de- termine whether such church shall be incorporated and governed in pursuance of this article, or in pursuance of article ten of this chapter. If such meeting determines that such church shall be incorporated and governed in pursu- ance of this article, then no further proceedings shall be taken in pursuance of article ten, and such church may be incorporated and shall be governed after its incorporation in pursuance of the provisions of the following sections of this article, except such provisions as are applicable only to churches of a different denomination; and the certificate of incorporation shall recite such determination of such meeting. If such meeting determine that such church shall be incorporated and governed in pursuance of article ten of this chapter, then this article shall not be applicable thereto, but such church may be incorporated and shall be governed after its incorporation in pursuance of the pro- visions of article ten of this chapter, except such provisions 382 Reticious Corporations Law. as are applicable to churches of a single religious denomina- tion only. Source.—Formerly Religious Corp. L. (L. 1805, ch. 723) § 61, as am’d by L. 1896, ch. 35; L. 1896, ch. 190; L. 1902, ch. 97. Revised from L. 1886, ch. 16; L. 1887, ch. 406, §§ 1, 2. § 112. Incorporation of Reformed Dutch, Reformed Pres- byterian and Evangelical Lutheran churches under this article. If any unincorporated church in connection with the Reformed church in America, the true Reformed Dutch church in the United States of America, the Reformed Pres- byterian church, or with the Evangelical Lutheran church, determine to incorporate in pursuance of this article, the minister or ministers and the elders and deacons thereof shall execute, acknowledge and cause to be filed and re- corded, a certificate in pursuance of this article. The dea- cons of a Reformed Presbyterian church may alone sign such certificate if authorized so to do by such church. Such certificate of incorporation shall state the name of the pro- posed corporation, the county and town, city or village where its principal place of worship is or is intended to be located, and, if it be an Evangelical Lutheran church, the fact that a meeting of such church duly called decided that it be incorporated under this article. If it be signed by the deacons of a Reformed Presbyterian church, it shall state that they were authorized so to do by such church. On filing such certificate such church shall be a corporation by the name stated therein, and the minister or ministers, if any, and the elders and deacons of such church shall by virtue of their offices be the trustees of such corporation, except that if it be a Reformed Presbyterian church, the certificate of incorporation of which shall have been, in pursuanee of law, signed by its deacons only, the deacons of such church shall, by virtue of their offices, be the trus- tees of such corporation. Source——Formerly Religious Corp. L. (L. 1895, ch. 723) § 62. am’d by L. 1896, ch. 190; L. 1902, ch. 97. Revised from L. 1813, ch. 60, § 2; 1822, ch. 187, § 1; L. 1825, ch. 303, § 1; L. 1866, ch. 447; L. 1886, ch. 16; L. 1887, ch. 406,.§ 1. Reticious Corporations Law. 383 Cross References. For provisions generally applicable to incorporation, see § 3, ante, and notes thereunder. § 113. Consistory of a Reformed church in America; minister, how chosen. Any church in connection with the Reformed church in America, the choice or election of the members of whose consistory is not subject to the ecclesi- astical rules or jurisdiction of such Reformed church in America, shall, if the consistory so determine, be subject to such rules and jurisdiction ; and thereafter the choice of the members of the consistory shall be in accordance with such rules and practices. If any such church be incorporated under article ten of this chapter, or if its trustees be elective in pursuance of such article, its board of trustees and its consistory shall act concurrently in the choice of its minister. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723) § 63. Re- vised from L. 1835, ch. 90, § 10. See provisions of section 25, ante. § 114. Reformed churches in America, changing system of choosing trustees; minister, how chosen. If the minis- teds, elders and deacons who, at any time, by virtue of their offices, constitute the trustees of any Reformed church in America, or of any true Reformed Dutch church in the United States of America, determine that the trustees of such church shall thereafter be elective in pursuance of article ten of this chapter, and shall determine whether the number of such trustees shall be three, six or nine, and the date of the annual corporate meeting of the church, they may sign, acknowledge and cause to be filed and recorded in the office of the clerk of the county in which the certifi- cate of incorporation of such church is filed or recorded, a certificate of such determinations. Thereafter the trustees of such church shall be elective in pursuance of the provis- ions of article ten of this chapter, relating to the election of trustees of incorporated churches. At the next annual cor- porate meeting after the filing of such certificate, one-third of the number of trustees so determined on shall be elected 384 Rexicious Corporations Law. to hold office for one year, one-third for two years and one- third for three years, and the minister, elders and deacons shall cease to be the trustees of such church. At each sub- sequent annual corporate meeting of such church, one-third of the number of trustees so determined on shall be elected to hold office for three years. If the trustees of an in- corporated Reformed church in America or of a true Dutch Reformed church in the United States of America are at any time elective, in pursuance of article ten of this chap- ter, or otherwise, the board of trustees and the consistory thereof may concurrently determine that the minister or ministers, if any, and the elders and deacons of such church shall constitute the trustees thereof. Thereon the president and clerk of the consistory and the president and clerk of the board of trustees shall sign and acknowledge and cause to be filed and recorded in the office of the clerk of the county in which the original certificate of incorporation is filed or recorded, a certificate of such determination, stating the names of such ministers, elders and deacons. On so filing and recording such certificate, such board of trustees shall be dissolved, and the minister or ministers, and elders and deacons of such church, and their successors in office shall constitute the trustees of such church. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723) § 64, am’d by L. 1907, ch. 728. Revised from L. 1835, ch. 90, § 8; L, 1883, ch. 501, § 1. : See provisions of section 25, ante. Under the constitution of the Reformed Protestant Dutch Church the classis has the general and discretionary power to dissolve the re- lation between the pastor of a church and the congregation, and the determination of the classis having such jurisdiction will not be re- viewed by the civil courts. Connitt v. Reformed Protestant Dutch Ch., etc, 54 N. Y. 551 (1874). The contract of the pastor is not termin- able at will. (Id.) § 115. Reformed Presbyterian churches, changing system of choosing trustees; pew rents and minister’s salary. If any incorporated Reformed Presbyterian church, at a meet- ing of the church or congregation, determine that the dea- cons of such church shall be the trustees thereof, then the deacons of such church actively engaged in the exercise of RE.icious Corporations Law. 385 their offices therein, and their successors in office, shall, by virtue of their respective offices, be the trustees of such church. The salary of the minister and the pew rents in any such church shall be fixed by the vote of the congrega- tion, and the trustees shall not fix or change the same. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723) § 65. Re- vised from L. 1822, ch. 187; L. 1866, ch. 447. § 116. Evangelical Lutheran church, changing system of electing trustees. If the trustees of an incorporated Evan- gelical Lutheran church shall at any time be elective in pursuance of article ten of this chapter, the church may, at an annual corporate meeting, if notice thereof be given with the notice of such meeting determine that the minister or ministers and elders and deacons thereof shall thereafter constitute the trustees thereof, and thereon the trustees of such church shall sign, acknowledge and cause to be filed and recorded, a certificate stating the fact of such deter- mination, and the name of the minister or ministers, if any, and of the elders and deacons of such church; and thereon the terms of office of such elective trustees shall cease, and the minister or ministers and the elders and deacons of such church, and their successors in office shall, by virtue of their respective offices, be the trustees of such church. If, at any time, the officers of an incorporated Evangelical Lutheran church which officers by virtue of their offices constitute the trustees thereof shall determine to submit to a meeting of such church corporation, the question whether the trustees of such church shall be thereafter elec- tive in pursuance of article ten of this chapter, they shall cause a corporate meeting of such church to be called and held in the manner provided in sections one hundred and ninety-four and one hundred and ninety-five of this chap- ter, and such corporate meeting shall determine whether the trustees of such church shall thereafter be elective in pursuance of article ten of this chapter, and also whether the number of such trustees shall be three, six or nine, and the date of the annual corporate meeting of the church. If 386 ReEwicious Corporations Law. such meeting shall determine that such trustees shall there- after be elective, the presiding officer thereof and at least two other persons present and voting thereat, shall sign, acknowl- edge and cause to be filed and recorded in the office of the clerk of the county in which the certificate of incorporation of such church is filed, a certificate of such determination of such meeting; and thereafter the trustees of such church shall be elective in pursuance of article ten of this chapter. At the next annual corporate meeting after the filing of such certificate, one-third of the number of trustees so de- termined on shall be elected to hold office for one year, one-third for two years, and one-third for three years, and the officers of such church who by virtue of their offices have been trustees of such church, shall then cease to be such trustees, and thereafter article ten of this chapter shall apply to such church. At each subsequent annual corporate meeting of such church, one-third of the number of trus- tees so determined on shall be elected to hold office for three years. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723) § 66, am’d by L. 1896, ch. 190; L. 1902, ch. 97. Revised from L. 1886, ch. 16; L. 1887, ch. 406. ARTICLE 7 Baptist Churches SEcTION 130. Notice of meeting for incorporation. 131. The meeting for incorporation. 132. The certificate of incorporation. 133. Time, place and notice of corporate meetings. 134. Organization and conduct of corporate meetings; quali- fications of voters thereat. 135. Changing date of annual corporate meetings, 136. Changing number of trustees. 137. Meetings of trustees. 188. The creation and filling of vacancies among trustees of such churches, 139. Control of trustees by corporate meetings of such churches; salary of minister. 140. Transfer of property to Baptist corporations, § 130. Notice of meeting for incorporation. Notice of a meeting for the purpose of incorporating an unincorpo- RELicgious Corporations Law. 387 rated Baptist church shall be given as follows: The notice shall be in writing, and shall state, in substance, that a meeting of such unincorporated church will be held at its usual place of worship at a specified day and hour, for the purpose of incorporating such church, electing trustees thereof, and selecting a corporate name therefor. The no- tice must be signed by at least six persons of full age, who are then members in good and regular standing of such church by admission into full communion or membership therewith. A copy of such notice shall be publicly read at a regular meeting of such unincorporated church for public worship, on the two successive Sundays immediately pre- ceding the meeting, by the minister of such church, or a deacon thereof or by any person qualified to sign such notice. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723) § 67, added by L. 1806, ch. 336. For form of Notice, see Form No. 105, post. § 131. The meeting for incorporation, At the meeting for incorporation, held in pursuance of such notice, the qualified voters, until otherwise decided as hereinafter pro- vided, shall be all persons of full age, who are then mem- bers, in good and regular standing of such church, by ad- mission into full communion or membership therewith. At such meeting the presence of a majority of such qualified voters, at least six in number, shall be necessary to consti- tute a quorum, and all matters or questions shall be decided by a majority of the qualified voters voting thereon. There shall be elected at said meeting from the qualified voters then present, a presiding officer, a clerk to keep the record of the proceedings of the meeting and two inspectors of election to receive the ballots cast. The presiding officer and the inspectors shall declare the result of the ballots cast: on any matter, and shall be the judges of the qualifications of voters. If the meeting shall decide that such unincorpo-. rated church shall become incorporated, the meeting shall also decide upon the name of the proposed corporation, the number of the trustees thereof, which shall be three, six,, 388 Re.icious Corporations Law. nine or twelve, and the date, not more than fifteen months thereafter, on which the first annual election of the trustees thereof shall be held, and shall decide also whether those who, from the time of the formation of such church or dur- ing the year preceding the meeting’ for incorporation, have statedly worshipped with such church and have regularly contributed to the financial support thereof, shall be quali- fied voters at such meeting for incorporation, and whether those who during the year preceding the subsequent corpo- rate meetings of the church shall have statedly worshipped with such church and shall have regularly contributed to the financial support thereof, shall be qualified voters at such corporate meetings. Such meetings shall thereupon elect by ballot from the persons qualified to vote thereat ‘one-third of the number of trustees so decided on, who shall hold office until the first annual election of trustees there- after, and one-third of such number of trustees who shall hold office until the second annual election of trustees there- after, and one-third of such number of trustees who shall hold office until the third annual election of trustees there- after, or until the respective successors of such trustees shall be elected. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723) § 68, added by L. 1896, ch. 336. Thus am’d by L. 1913, ch. 397. This amendment increased the maxi- mum number of trustees from nine to twelve. For form of minutes of meeting, see Form No, 106, post. § 132. The certificate of incorporation. If the meeting shall decide that such unincorporated church shall become incorporated, the presiding officer of such meeting and the two inspectors of election shall execute a certificate setting forth thg name of the proposed corporation, the number of the trustees thereof, the names of the persons elected as trustees and the terms of office for which they were re- spectively elected and the county and town, city or village in which its principal place of worship is or is intended to be located. On the filing and recording of such certificate after it shall have been acknowledged or proved as here- Reuicious Corporations Law. 389 inbefore provided, the persons qualified to vote at such meeting and those persons who shall thereafter, from time to time, be qualified voters at the corporate meetings there- of, shall be a corporation by the name stated in such certifi- cate, and the persons therein stated to be elected trustees of such church shall be the trustees thereof, for the terms for which they were respectively elected and until their respective successors shall be elected. Source—Formerly Religious Corp. L. (L. 1895, ch. 723) § 69, added by L. 1896, ch. 336. For form of certificate of incorporation, see Form No. 107, post. Cross References. For provisions generally applicable to incorporation, see § 3, ante, and notes thereunder. § 133. Time, place and notice of corporate meetings. ‘The annual corporate meeting of every incorporated Bap- tist church shall be held at the time and place fixed by or in pursuance of law therefor, if such time and place be so fixed, and otherwise, at a time and place to be fixed by its trustees. A special corporate meeting of any such church may be called by the board of trustees thereof, on its own motion, and shall be called on the written request of at least ten qualified voters of such church. The trustees shall cause notice of the time and place of its annual corporate meeting, and of the names of any trustees whose suc- cessors are to be elected thereat; and, if a special meeting, of the business to be transacted thereat, to be publicly read by the minister of such church or any trustee thereof at a regular meeting of the church for public worship, on the two successive Sundays immediately preceding such meet- ing. Source—Formerly Religious Corp. L. (L. 1895, ch. 723) § 70, added by L. 1896, ch. 336. § 134. Organization and conduct of corporate meetings; qualifications of voters thereat. At a corporate meeting of an incorporated Baptist church the qualified voters shall be all persons of full age, who are then members of such 390 RELicious Corporations Law. church in good and regular standing by admission into full communion or membership therewith, or who have statedly worshipped with such church and have reguarly contrib- uted to the financial support thereof during the year next preceding such meeting; but any incorporated Baptist church may at any annual corporate meeting thereof, if no- tice of the intention so to do has been given with the notice of such meeting, decide that thereafter only members of such church of full age and in good and regular standing by admission into full communion or membership therewith shall be qualified voters at the corporate meetings. At such corporate meetings the presence of at least six persons qualified to vote thereat shall be necessary to constitute a quorum, and all matters or questions shall be decided by a ma,ority of the qualified voters voting thereon. There shall be elected at said meeting from the qualified voters then present, a presiding officer, a clerk to keep the records of the proceedings of the meeting and two inspectors of elec- tion to receive the ballots cast. The presiding officer and the inspectors of election shall declare the result of the bal- lots cast on any matter and shall be the judge of the qualifi- cations of voters. At each annual corporate meeting, suc- cessors to those trustees whose terms of office then ex- pire, shall be elected by ballot from the qualified voters, for a term of three years thereafter, and until their successors shall be elected. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723) § 71, added by L. 1896, ch. 336. § 135. Changing date of annual corporate meetings. An annual corporate meeting of an incorporated Baptist church may change the date of its annual meeting thereafter. If the date fixed for the annual meeting shall be less than six months after the annual meeting at which such change is made, the next annual meeting shall be held one year from the date so fixed. For the purpose of determining the terms of office of trustees, the time between the annual meeting at which such change is made and the next annual meeting thereafter shall be reckoned as one year. Reticious Corporations Law. 391 Source.—Formerly Religious Corp. L. (L. 1895, ch. 723) § 72, added by L. 1896, ch. 336. § 136. Changing number of trustees. An incorporated Baptist church may, at an annual corporate meeting, change the number of its trustees to three, six, nine or twelve, or classify them so that the terms of one-third expire each year, provided that notice of such intended change or classi- fication be included in the notice of such annual corporate meeting. No such change shall affect the terms of the trus- tees then in office, and if the change reduces the number of trustees, elections shall not be held to fill vacancies caused by the expiration of the terms of trustees until the number of trustees equals the number to which the trustees were reduced. Whenever the number of trustees in office is less than the number so determined on, sufficient additional trustees shall be elected to make the number of trustees equal to the number so determined on. The trustees so elected up to and including one-third of the number so de- termined on, shall be elected for three years, the remainder up to and including one-third of the number so determined on for two years, and the remainder for one year. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723) § 73, added by L. 1806, ch. 336. Thus am’d by L. 1913, ch. 397. This amendment increased the maxi- mum number of trustees from nine to twelve. § 137. Meetings of trustees. Meetings of the trustees of an incorporated Baptist church shall be called by giving at least twenty-four hours’ notice thereof personally or by mail to all the trustees and such notice may be given by two of the trustees, but by the unanimous consent of the trus- tees a meeting may be held without previous notice thereof. A majority of the whole number of trustees shall constitute a quorum for the transaction of business at any meeting lawfuly convened. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723) § 4, added by L. 1896, ch. 336. § 138. The creation and filling of vacancies among trus- tees of such churches. If any trustee of an incorporated 392 Reticious Corporations Law. Baptist church declines to act, resigns or dies, or having been a member of such church ceases to be such a member, or not having been a member of such church, ceases to be a qualified voter at a corporate meeting thereof, his office shall be vacant, and such vacancy may be filled by the re- maining trustees until the next annual corporate meeting of such church, at which meeting the vacancy shall be filled for the unexpired term. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723) § 75, added by L. 1896, ch. 336. § 139. Control of trustees by corporate meetings of such churches; salary of minister. The trustees of an incorpo- rated Baptist church shall have no power to settle or re- move a minister or to fix his salary or, without the consent of a corporate meeting, to incur debts beyond what is neces- sary for the administration of the temporal affairs of the church and for the care of the property of the corporation; or to fix or change the time, nature or order of the public or social worship of such church. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723) § 76, added by L. 1896, ch. 336. § 140. Transfer of property to Baptist corporations. Any incorporated Baptist church, created by or existing under the laws of the state of New York, having its principal office or place of worship in the state of New York, or whose last place of worship was within the state of New York, is hereby authorized and empowered, by a vote of two-thirds of its qualified voters present and voting there- for, at a meeting regularly called for that purpose, to trans- fer and convey any of its property, real or personal, which it now has pr may hereafter acquire, to any religious, char- itable or missionary corporation connected with the Baptist denomination and incorporated by or organized under any, law or laws of the state of New York, either solely, or among other purposes, to establish or maintain, or to assist in establishing or maintaining churches, schools, or mission stations or to erect, or assist in the erection of such build- Re.icious Corporations Law. 393 ings as may be necessary for any of such purposes, and on or without the payment of any money or other considera- tion therefor, and upon such transfer or conveyance being made, the title to and the ownership and right of possession of the property so transferred and conveyed shall be vested in and conveyed to such grantee; provided, however, that nothing herein contained shall impair or affect in any way, any existing claim upon or lien against any property so transferred or conveyed, or any action at law or legal pro- ceeding, and subject, in respect to the amount of property the said grantee may take and hold, to the restrictions and limitations of existing laws. Source——Formerly Religious Corp. L. (L. 1895, ch. 723) § 77, added by L. 1896, ch. 336. ARTICLE 8 Congregational and Independent Churches Section 160. Notice of meeting for incorporation. 161. The meeting for incorporation. 162. The certificate of incorporation. 163. Time, place and notice of corporate meetings. 164. Organization and conduct of corporate meetings; quali- fications of voters. 165. Changing date of annual corporate meetings. 166. Changing number of trustees. 167. Meetings of trustees. 168. Vacancies among trustees. 169. Limitation of powers of trustees. 170. Election and salary of ministers. 171. Transfer of property. § 160. Notice of meeting for incorporation. Notice of a meeting for the purpose of incorporating an unincorporated Congregational or Independent church shall be given as fol- lows: The notice shall be in writing, and shall state, in sub- stance, that a meeting of such unincorporated church will be held at its usual place of worship at a specified day and hour, for the purpose of incorporating such church, electing trustees thereof, and selecting a corporate name therefor. The notice must be signed by at least six persons of full age, who have statedly worshiped with such church and 304 RELIGIOUS CorporaATIons Law. have regularly contributed to its support, according to its. usages, for at least one year or since it was formed. A copy of such notice shall be publicly read at a regular meeting of such unincorporated church for public worship, on the two successive Sundays immediately preceding the meeting, y the minister of such church, or a deacon thereof or by any person qualified to sign such notice. Source—Formerly Religious Corp. L. (L. 1895, ch. 723) § 78, added by L. 1897, ch. 621. For form of notice of meeting, see Form No. 108, post. § 161. The meeting for incorporation. At the meeting for incorporation, held in pursuance of such notice, “the qualified voters, until otherwise decided as hereinafter pro- vided, shall be all persons of full age who have statedly worshiped with such church and have regularly contributed to its support, according to its usages, for at least one year or since it was formed. At such meeting the presence of a majority of such qualified voters, at least six in number, shall be necessary to constitute a quorum, and all matters or questions shall be decided by a majority of the qualified voters voting thereon. The meeting shall be called to order by one of the signers of the call. There shall be elected at such meeting, from the qualified voters then present, a pre- siding officer, a clerk to keep the record of the proceedings of the meeting and two inspectors of election to receive the ballots cast. The presiding officer and the inspectors shall decide the result of the ballots cast on any matter, and shall be the judges of the qualifications of the voters. If the meeting shall decide that such unincorporated church shall become incorporated, the meeting shall also decide upon the name of the proposed corporation, the number of the trustees thereof, which shall be three, six or nine, and the date, not more than fifteen months thereafter, on which the first annual election of the trustees thereof shall be held; and it may, by a two-thirds vote, decide that all mem- bers of the unincorporated church, of full age, in good and regular standing, who have statedly worshiped with such church but who have not contributed to the financial sup- ReEticious Corporations Law. 395 port thereof, shall also be qualified voters at such meeting, and that such church members, who, for one year next pre- ceding any subsequent corporate meeting, shall have statedly worshiped with such church and have been mem- bers thereof in good and regular standing, but have not regularly contributed to the financial support thereof, shall be qualified voters at such corporate meetings. Such meeting shall thereupon elect by ballot from the persons qualified to vote thereat one-third of the number of trus- tees so decided on, who shall hold office until the first an- nual election of trustees thereafter, one-third of such num- ber of trustees who shall hold office until the second annual election of trustees thereafter, and one-third of such num- ber of trustees who shall hold office until the third annual election of trustees thereafter, or until the respective suc- cessors of such trustees shall be elected. Such meeting shall also elect by ballot a clerk of the corporation, who shall hold his office until the close of the next annual meet- ing. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723) § 78-a, added by L. 1897, ch. 621. For form of minutes of meeting, see Form No. 109, post. § 162. The certificate of incorporation. If the meeting shall decide that such unincorporated church shall become incorporated, the presiding officer of such meeting and the two inspectors of election shall execute a certificate setting forth the name of the proposed corporation, the number of trustees thereof, the names of the persons elected as trus- tees, the terms of office for which they were respectively elected and the county and town, city or village in which its principal place of worship is or is intended to be located. On the filing and recording of such certificate, after it shall have been acknowledged or proved as hereinbefore pro- vided, the persons qualified to vote at such meeting and those persons who shall thereafter, from time to time, be qualified voters at the corporate meetings thereof, shall be a corporation by the name stated in such certificate, and the persons therein stated to be elected trustees. of such 396 RELiGIous Corporations Law. church shall be the trustees thereof for the terms for which they were respectively elected and until their respective successors shall be elected. Source.—Formerly Religious Corp. L. (L.,1895, ch. 723) § 78-b, added by L. 1897, ch. 621. For form of certificate of incorporation, see Form No. 110, post. Cross References. For provisions generally applicable to incorporation, see § 3, ante, and notes thereunder. § 163. Time, place and notice of corporate meetings. The annual corporate meeting of every church incorporated under this article shall be held at the time and place fixed by its by-laws, or if no time and place be so fixed, then at’ a time and place to be first fixed by its trustees, but to be changed only by a by-law adopted at an annual meeting. A special corporate meeting of any such church may be called by the board of trustees thereof, on its own motion, and shall be called on the written request of at least ten qualified voters of such church. The trustees shall cause notice of the time and place of its annual corporate meeting, and of the names of any trustees whose successors are to be elected thereat, and if a special meeting, of the busi- ness to be transacted thereat, to be publicly read by the minister of such church or any trustees thereof at a regular meeting of the church for public worship, on the two suc- cessive Sundays immediately preceding such meeting. Source.—Formerly Religious Corp. L., (L. 1895, ch. 723), § 78-c, added by L. 1897, ch. 621. § 164. Organization and conduct of corporate meetings; qualifications of voters. At every corporate meeting of a church incgrporated under this article all persons of full age who, for one year next preceding such meeting, have statedly worshiped with such church and have regularly contributed to its financial support, according to its usages, and no others, shall be qualified voters; but, if so decided, by a two-third vote at the original meeting or at any annual corporate meeting thereof, after notice of intention so to do ReEticious Corporations Law. 397 has been given with every notice of such meeting, all mem- bers of such church of full age and in good and regular standing, by admission into full communion or member- ship therewith, who have statedly worshiped with such church, for one year next preceding the meeting at which they vote, may also be admitted as qualified voters at cor- porate meetings. At such corporate meetings, the presence of at least six persons qualified to vote thereat shall be necessary to constitute a quorum; and all matters or ques- tions shall be decided by a majority of the qualified voters voting thereon, except that by-laws can be adopted or amended only by a two-thirds vote. The clerk of the cor- poration shall call the meeting to order; and under his su- pervision the qualified voters then present shall choose a presiding officer and two inspectors of election to receive the ballots cast. The presiding officer and the inspectors of election shall declare the result of the ballots cast on any matter and shall be the judges of the qualifications of voters. At each annual corporate meeting, successors to those trus- tees whose terms of office then expire shall be elected by ballot from the qualified voters, for a term of three years thereafter, and until their successors shall be elected. A clerk of the corporation shall be elected by ballot, who shall hold office until the close of the next annual meeting, and until his successor shall be elected. Source—Formerly Religious Corp. L. (L. 1895, ch. 723), § 78d, added by L. 1897, ch. 621. § 165. Changing date of annual corporate meetings. An annual corporate meeting of any church incorporated under this article may change the date of its subsequent annual meetings. If the date fixed for the annual meeting shall be less than six months after the annual meeting at which such change is made, the next annual meeting shall be held one year from the date so fixed. For the purpose of determin- ing the terms of office of trustees, the time between the an- nual meeting at which such change is made and the next annual meeting thereafter shall be reckoned as one year. 398 RE.LIcious Corporations Law. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723), § 7&e, added by L. 1897, ch. 621. § 166. Changing number of trustees. Any such incorpo- rated church may, at an annual corporate meeting, change the number of its trustees to three, six or nine, classifying them so that the terms of one-third expire each year, pro- vided that notice of such intended change be included in the notice of such annual corporate meeting. No such change shall affect the terms of the trustees then in office; and if the change reduces the number of trustees, elections shall not be held to fill the vacancies caused by the expira- tion of the terms of trustees, until the number of trustees equals the number to which the trustees were reduced. Whenever the number of trustees in office is less than the number so determined on, sufficient additional trustees shall be elected to make the number of trustees equal to the num- ber so determined on. The trustees so elected, up to and including one-third of the number so determined on, shall be elected for three years, the remainder up to and includ- ing one-third of the number so determined on for two years, and the remainder for one year. Source—Formerly Religious Corp. L. (L. 1895, ch. 723), § 78-f, added by L. 1897, ch. 621. § 167. Meetings of trustees. Meetings of the trustees of any such incorporated church shall be called by giving at least twenty-four hours’ notice thereof personally or by mail to all the trustees; and such notice may be given by two of the trustees; but by the unanimous consent of the trustees, a meeting may be held without previous notice thereof. A majority of the whole number of trustees shall constitute a quorum for the transaction of business, at any meeting lawfully convened. Source——Formerly Religious Corp. L. (L. 1805, ch. 723), § 78-g, added by L. 1897, ch. 621. § 168. Vacancies among trustees. If any trustee of any such incorporated church declines to act, resigns or dies, or ceases to be a qualified voter at a corporate meeting ReEticious Corporations Law. 399 thereof, his office shall be vacant; and such vacancy may be filled by the remaining trustees until the next annual cor- _ porate meeting of such church; at which meeting the va- cancy shall be filled for the unexpired term. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723), § 78-h, added by L. 1897, ch. 621. § 169. Limitation of powers of trustees. The trustees of any such incorporated church shall have no power to call, settle or remove a minister or to fix his salary, nor without the consent of a corporate meeting, to incur debts, beyond what is necessary for the administration of the tem- poral affairs of the church and for the care of the property of the corporation; or to fix or change the time, nature or order of the public or social worship of such church. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723), § 78i, added by L. 1897, ch. 621. § 170. Election and salary of ministers. The ministers of any such church shall be called, settled or removed and their salaries fixed, only by the vote of a majority of the members of such corporation duly qualified to vote at elec- tions present and voting at a meeting of such corporation specially called for that purpose, in the manner hereinbefore provided for the call of special meetings; and any such cor- poration may, by its by-laws, make the call, settlement or removal of its ministers dependent upon a concurrent vote of the unincorporated church connected with such corpora- tion; and in that case the concurrence of a majojrity of the -members of such unincorporated church, present and voting at a meeting thereof, called for that purpose, shall be necessary to the call, settlement or removal of such min- isters. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723), § 78-j, added by L. 1897, ch. 621. § 171. Transfer of property. Any incorporated Congre- gational church, created by or existing under the laws of the state of New York, having its principal office or place 400 ‘Reticious Corporations Law. of worship in the state of New York, or whose last place of worship was within the state of New York, is hereby authorized and empowered, by the concurrent vote of two- thirds of its qualified voters present and voting therefor, at a meeting regularly called for that purpose, and of two- thirds of all its trustees, to direct the transfer and convey- ance of any of its property, real or personal, which it now has or may hereafter acquire, to any religious, charitable or missionary corporation connected with the Congregational denomination and incorporated by or organized under any law of the state of New York, either solely, or among other purposes, to establish or maintain, or to assist in establish- ing or maintaining churches, schools or mission stations, or to erect or assist in the erection of such buildings as may be necessary for any of such purposes, with or with- out the payment of any money or other consideration there- for; and upon such concurrent votes being given, the trustees shall execute such transfer or conveyance; and upon the same being made, the title to and the ownership and right of possession of the property so transferred and conveyed shall be vested in and conveyed to such grantee; provided, however, that nothing herein contained shall im- pair or affect in any way any existing claim upon or lien against any property so transferred or conveyed, or any action at law or legal proceeding; and such transfer shall be subject, in respect to the amount of property the said grantee may take and hold, to the restrictions and limita- tions of all laws then in force. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723), § 78-k, added by L. 1897, ch. 621. . ARTICLE 9 Free Churches Section 180. Corporation, how formed. 181. Rights, powers and limitations. 182. Vacancies in boards of trustees. 183. Seats and pews to be free. ReEticious Corporations Law. 401 § 180. Corporation, how formed. Any seven or more persons of full age, citizens of the United States, and a majority of them being residents of this state, who shall associate themselves for the purpose of founding and con- tinuing one or more free churches, may make, sign and ac- knowledge, before any officer authorized to take the ac- knowledgment of deeds of land to be recorded in this state, and may file in the office of the secretary of state, and also of the clerk of the county in which any such church is to be established, and record as provided in section three of this chapter, a certificate in writing, in which shall be stated the name or title by which such society shall be known in the law, the purpose of its organization, and the names of seven trustees, of whom not less than five shall be persons who are not ministers of the gospel or priests of any de- nomination, to manage the same; but such certificate shall not be filed, unless with the written consent and approba- tion of a justice of the supreme court of the district in which any such church shall be intended to be established, to be indorsed on such certificate. Source.—Formerly L. 1854, ch. 218, § 1. For form of certificate of incorporation see Form No, 111, post. Cross References. For provisions generally applicable to incorporation, see notes to § 3, ante. § 181. Rights, powers and limitations. Upon the filing of such certificate the persons named therein as trustees, and their successors, being citizens of the United States and residents of this state, shall be a body politic and corporate, with all the right, powers and duties, and subject to all the restrictions and obligations and other provisions, so far as the same may be applicable and consistent with this article, specified and contained in the act entitled “An act for the incorporation of benevolent, charitable, scientific and mis- sionary societies,” passed April twelfth, eighteen hundred and forty-eight, and the act amending the same, passed April seventh, eighteen hundred anud forty-nine, except 402 REticious Corporations Law. that the limitation in the first of the said acts of the vilue of real estate that may be held by any society in the city or county of New York, incorporated under this article, shall not be applicable to any church edifice erected or owned by such society, or the lot of ground on which the same may be built; and except that the provision in the first of the said acts, in relation to the personal liability of the trustees, shall be applicable only to the trustees who shall have assented to the creation of any debt. Source.—Formerly L. 1854, ch. 218, § 2. Consolidators’ Note. The reference to the statutes mentioned in this section has been allowed to remain, although the acts named have been repealed. This repeal does not affect the references in the section. Section 32 of the Statutory Construction Law provides that “if any provision of a law be repealed and in substance be re-enacted, reference in any law to such repealed provision shall be deemed a reference to such re- enacted provision.” The statutes refered to in the section have been substantially repealed in the membership and other consolidated laws, and under the provision of the Statutory Construction Law referred ° to the references in the section are deemed to be references to these re-enacted provisions. Under the common law rule the references would not be destroyed by the repeal of the statutes referrd to. In the matter of Phoenix Iron Co.,62 Hun, 263, certain costs and allow- ances granted by an act of 1862 were not set forth bodily in the statute, but were incorporated by a reference to the Code of Procedure then in existence, By this reference it was held that the provisions of the Code referred to became a portion of the act as effectually as if they had been set forth in words and that the special repeal of the Code of Procedure did not affect the act of 1862. In People ex rel. vs. Webster, 8 Misc. 133, Wright, J., says: “A special statute making the provisions of a general statute applicable to a local court is not affected by the repeal of the general statute.” In Wick vs. Fort Plain and Richfield Springs Ry. Co., 27 App. Div. 577, the court held that “a statute which refers to and adopts the provisions of a prior statute is not repealed by the subsequent repeal of the prior statute, but the provisions of the incorporated statute continue in force so far as they form a part of the second statute.” § 182.*Vacancies in boards of trustees. Any vacancies occurring in the said board of trustees shall be supplied by the remaining trustees at any legal meeting of the mem- bers; but there shall always be at least five members of the board who are not ministers of the gospel or priests of any denomination. Source.—Formerly L. 1854, ch. 218, § 3. Reticious Corporations Law. 403 § 183. Seats and pews to be free. The seats and pews in every church, building or edifice, owned or occupied by any corporation organized under this article, shall be forever free for the occupation and use, during public worship, of all persons choosing to occupy the same, and conducting themselves with propriety, and no rent, charge or exaction shall ever be made or demanded for such occupation or use. Source.—Formerly L. 1854, ch. 218, § 4. ARTICLE 10 Other Denominations Section 190. Application of this article. 191. Notice of meeting for incorporation. 192. The meeting for incorporation. 193. The certificate of incorporation. 194. Time, place and notice of corporate meetings. 195. Organization and conduct of corporate meetings; quali- fications of voters thereat. 196. Changing date of annual corporate meetings. 197. Changing number of trustees. 198. Meetings of trustees. 199. Vacancies among trustees. 200. Control of trustees by corporate meetings; salaries of ministers. 201. Trustees of a church in connection with the United Brethren in Christ. 202, Trusts for Shakers and Friends. 203. Conveyance of trust property of Friends. 204. Conveyance of property of Methodist Episcopal churches for church, school or missionary purposes. 205. Presiding officer. § 190. Application of this article. This article is not ap- plicable to a Baptist church, a Congregational or Indepen- dent church, a Protestant Episcopal church, a Roman Cath- olic church, a Presbyterian church in connection with the General Assembly of the Presbyterian church in the United States of America, or a Christian Orthodox Catholic church of the Eastern Confession. No provision of this article is applicable to a Reformed church in America, a True Re- formed Dutch church in the United States of America, a Reformed Presbyterian church, or to an Evangelical Luth- 404 RE.icious Corporations Law. eran church, incorporated after October first, eighteen hun- dred and ninety-five, except as declared to be so applicable by article six of this chapter; this article is applicable to an Evangelical Lutheran church incorporated before October first, eighteen hundred and ninety-five, if the trus- tees thereof were then elective as such and so long as they continue to be elective as such. Article six of this chapter is applicable to an Evangelical Lutheran church incorpo- tated before October first, eighteen hundred and ninety-five, if its trustees were not then elective as such and so long as its trustees continue not to be elective as such. This article is applicable to churches of all other denominations. See explanatory memorandum of the Revision Commissioners of 1895, page 303, ante, as to this article, which is therein referred to as article 5, its former number. The provisions of the constitution and discipline of the Methodist Protestant Church, that it shall be the duty of the president of an annual conference in the recess of conference to employ such ministers and preachers as are duly recommended, and to make necessary changes provided the consent of said preachers and their charges be first ob- tained, authorize the president of an annual conference, during the recess of the conference, to station a minister in a vacant church with- out its consent. Mandamus will lie to compel the opening of the church to the appointee. Matter of Robinson v. Cocheu, 18 App. Div. 325 (1897). Liability on Subscriptions. Where a subscription was stated to be made toward the purchase of land, erection of a new building and such improvement as the trustees contemplated, and the trustees on the strength thereof, proceeded to purchase land and build, there is a sufficient consideration to support an action to recover the amount of the subscription. Cent. Pres. Church v. Thompson, 8 App. Div. 565 (1806); where however there is no change of policy or of plans involving new obligations, there is no liability on the subscription even after part payment. Hull v. Pear- son, 38 App. Div. 588 (1899). § 191. Notice of meeting for incorporation. Notice of a meeting for the purpose of incorporating an unincorporated church, to which this article is applicable, shall be given as follows: The notice shall be in writing, and shall state, in sub- stance, that a meeting of such unincorporated church will be held at its usual place of worship at a specified day and RE.Licious CorPoraTions Law. 405 hour, for the purpose of incorporating such church and electing trustees thereof. The notice must be signed by at least six persons of full age, who are then members in good and regular standing of such church by admission into full communion or member- ship therewith, in accordance with the rules and regulations of such church, and of the governing ecclesiastical body of the denomination or order, if any, to which the church be- longs, or who have statedly worshiped with such church and have regularly contributed to the financial support thereof during the year next prior thereto, or from the time of the formation thereof. A copy of such notice shall be posted conspicuously on the outside of the main entrance to such place of worship, at least fifteen days before the day so specified for such meeting, and shall be publicly read at each of the two next preceding regular meetings of such unincorporated church for public worship, at least one week apart, at morning ser- vice, if such service be held, on Sunday, if Sunday be the day for such regular meetings, by the first named of the following persons who is present thereat, to wit: The min- ister of such church, the officiating minister thereof, the elders thereof in the order of their age beginning with the oldest, the deacons of the church in the order of their age beginning with the oldest, any person qualified to sign such notice. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723), § 81. Re- vised from L. 1813, ch. 60, § 3, amended by L. 1890, ch. 66; L. 1868, ch. 803, § 4. : For form of notice of meeting see Form No. 112, post. Where the unincorporated church consists of two factions each holding services, the minority may incorporate and thereby become invested with the temporalities of the society, and a subsequent incor- poration by the majority is ineffectual, as the statute contemplates but one corporation for the congregation. Trustees of St. Jacob’s Lutheran Ch. etc. v. Bly, 73 N. Y. 323 (1878); and see Sec. 4, supra, and Ludlow v. Rector etc. St. John’s Church, 144 App. Div. 207 (1911) ; reversed on other grounds, 207 N. Y. 689 (1913). § 192. The meeting for incorporation. At the meeting for incorporation held in pursuance of such notice, the follow- 406 Reticious Corporations Law. ing persons, and no others, shall be qualified voters, to wit: All persons of full age, who are then members in good and regular standing of such church by admission into full com- munion or membership therewith, in accordance with the rules and regulations thereof, and of' the governing ecclesi- astical body, if any, of the denomination or order, to which the church belongs, or who have statedly worshiped with such church and have regularly contributed to the financial support thereof during the year next preceding such meet- ing, or from the time of the formation thereof. The presence of a majority of such qualified voters, at least six in number, shall be necessary to constitute a quo- rum of such meeting. The action of the meeting upon any matter or question shall be decided by a majority of the qualified voters voting thereon, a quorum being present. The first named of the following persons who is present at such meeting shall preside thereat, to wit: The minister of the church, the officiating minister thereof, the elders thereof in the order of their age, beginning with the oldest, the deacons thereof in the order of their age, beginning with the oldest, any qualified voter elected to preside. The presiding officer of the meeting shall receive the votes, be the judge of the qualifications of voters and declare the re- sult of the votes cast on any matter. The polls of the meeting shall remain open for one hour, and longer, in the discretion of the presiding officer, or if required by a ma- jority of the voters present. Such meeting shall decide whether such unincorporated church shall become incorporated. If such decision shall be in favor of incorporation such meeting shall decide upon the name of the proposed corporation, the number of the trustees thereof, which shall be three, six or nine, and shall determine the date, not more than fifteen months thereafter, on which the first annual election of the trustees thereof after such meeting shall be held. Such meeting shall elect from the persons qualified to vote at such meeting, one- third of the number of trustees so decided on who shall hold office until the first annual election of trustees there- Reticious Corporations Law. 407 after, one-third of such number of trustees to hold office until the second annual election of trustees thereafter, and one-third of such number of trustees to hold office until the third annual election of trustees thereafter. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723) § 82. Re- vised from L, 1813, ch. 60, § 3, as amended by L. 1890, ch. 66, and § 6; L. 1876, ch. 329, §§ 2-4. See cases cited under sections 42 and 43 of this law as to notices of meeting and declaration of result. For forms of minutes of meeting, see Form No. 113, post. § 193. The certificate of incorporation. The presiding officer of such meeting and at least two other persons pres- ent and voting thereat, shall execute and acknowledge a certificate of incorporation, setting forth the matters so de- termined at such meeting, the trustees elected thereat and the terms of office for which they were respectively elected and the county, town, city or village in which its principal place of worship is or is intended to be located. On filing such certificate the members of such church and the per- sons qualified to vote at such meeting and who shall there- after, from time to time, be qualified voters, at the cor- porate meetings thereof, shall be a corporation by the name stated in such certificate, and the persons therein stated to be elected trustees of such church shall be: the trustees thereof, for the terms for which they were respectively so elected. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723) § 83. Re- vised from L. 1813, ch. 60, § 3, amended by L. 1890, ch. 66; L. 1876, ch. 329, § 5. Cross References. For provisions generally applicable to incorporation, see § 3, ante, and notes thereunder. For form of certificate of incorporation, see Form No. 114, post. § 194. Time, place and notice of corporate meetings. The annual corporate meeting of every incorporated church to which this article is applicable, shall be held at the time and place fixed by or in pursuance of law therefor, if such time and place be so fixed, and otherwise, at a time and 408 Reiicious Corporations Law. place to be fixed by its trustees. A special corporate meet- ing of any such church may be called by the board of trus- tees thereof, on its own motion or on the written request of at least ten qualified voters of such church. The trustees shall cause notice of the time and place of its annual cor- porate meeting, therein specifying the names of any trus- tees, whose successors are to be elected thereat, and, if a special meeting, specifying the business to be transacted thereat, to be given at a regular meeting of the church for public worship, at morning service, if such service be held, on each of the two successive Sundays next preceding such meeting, if Sunday be the regular day for such public wor- ship, and public worship be had thereon, or otherwise at a regular meeting of such church for public worship on each of two days, at least one week apart, next preceding such meeting, or if no such public worship be held during such period, by conspicuously posting such notice, in writing, upon the outer entrance to the principal place of worship of such church. Such notice shall be given by the minister of the church, if there be one, or if not, by the officiating minister thereof, if there be one, or if not, or if any such minister refuse to give such notice, by any officer of such church. But a special corporate meeting of an incorporated Presbyterian church, to elect a pastor of such church or to take action in reference to the dissolution of the relations of the pastor and the church, may be called only by the session of such church. They may call such meeting when- ever they deem it advisable to do so, or upon the request to them, by petition, of a majority of the qualified voters of such corporation, they must call such meeting. They shall give notice of such meeting in either case, in the manner in this section provided in a notice of a special meeting. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723) § 84. Re- vised from L. 1813, ch. 60, § 6 and § 9 am’d by L. 1866, ch. 414; L. 1826, ch. 47, § 1, am’d by L. 1875, ch. 354; L. 1875, ch. 79, § 1, am’d by L. 1879, ch. 463; L. 1876, ch. 329, § 3. § 195. Organization and conduct of corporate meetings; qualifications of voters thereat. At a corporate meeting of Reticious Corporations Law. 409 an incorporated church to which this article is applicable the following persons, and no others, shall be qualified voters, to wit: All persons of full age, who are then mem- bers in good and regular standing of such church by admis- sion into full communion or membership therewith in ac- cordance with the rules and regulations thereof, and of the governing ecclesiastical body, if any, of the denomination or order to which the church belongs, or who have been stated attendants on divine worship in such church and have regularly contributed to the financial support thereof during the year next preceding such meeting; and any in- corporated church in connection with the Congregational denomination or with the denomination known as Disciples of Christ, or any other church hereafter incorporated under this article, may at any annual corporate meeting thereof, or any corporate meeting called pursuant to the provisions of this article, if notice of the intention so to do has been given with the notice of such meeting, determine that thereafter only members of such church shall be qualified voters at corporate meetings thereof. The presence at such meetings of at least six persons qualified to vote thereat shall be necessary to constitute a quorum. The action of the meet- ing upon any matter or question shall be decided by a ma- jority of the qualified voters voting thereon, a quorum being present. The first named of the following persons who is present at such meeting shall preside thereat, to wit: The minister of such church, the officiating minister thereof; the officers thereof in the order of their age beginning with the oldest, any qualified voters elected therefor at the meet- ing. The presiding officer of the meeting shall receive the votes, be the judge of qualifications of voters and declare the result of the votes cast on any matter. The polls of an annual corporate meeting shall continue open for one hour, and longer in the discretion of the presiding officer, or if required by a majority of the qualified voters present. At each annual corporate meeting, successors to those trustees whose terms of office then expire, shall be elected from the qualified voters by ballot, for a term of 410 RELIGIous CorpoRATIONS Law. three years thereafter ; provided, however, that any Metho- dist Episcopal church in the boroughs of Brooklyn and Queens, in the city of New York, which is now or here- after may become a beneficiary of the Brooklyn church society of the Methodist Episcopal* church, by receiving from said society contribution to its current income, or by loan or gift from the same, may elect to fill any vacancy ex- isting in its board of trustees by expiration of term, or for any other cause, at any corporate meeting legally called, not to exceed at any time three members of said board of trustees, who shall have been nominated to such positions by the Brooklyn church society of the Methodist Episcopal church, without regard to any qualifications for trustees re- quired by this chapter, and such trustees or their suc- cessors, nominated and elected in the same manner, shall continue in office so long as said church shall be a bene- ficiary of said society. Notice of the expiration of term of said trustees shall be given by the said church to the said society not less than two months before said expiration of term. Thus am’d by L. ro11, ch. 711. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723) § 85, am’d by L. 1896, chs. 324 and 969; L. 1900, ch. 206; L. 1908, ch. 362. Re- vised from L. 1813, ch. 60, § 3, am’d by L. 1890, ch. 66, § 6; § 7 am’d by L. 1875, ch. 507, § 14; L. 1876, ch. 329, § 4. The amendment of 1911 added the words “or any other church here- after incorporated under this article’ after the words, “Disciples of Christ.” Two things must concur to qualify a person to become a voter at an election held by an incorporated religious society, after its first election: (1) Stated attendance on divine worship in the church, con- gregation or society, for the term of one year previous to such elec- tion; and, (2) contribution to the support of such church, etc. Peo. et al. v. Tuthill et al, 31 N. Y. 550 (1864). Stated attendance must be interpreted to mean the personal pres- ence of the yoter statedly at the religious meetings of the society. The regular attendance of the wife or other member of the family is not sufficient. Peo. et al. v. Tuthill et al, 31 N. Y. 550 (1864). Persons attending the religious meetings of the society but a few times in the course of a year, or only occasionally, though regular contributors to its support, are not voters. Peo. et al. v. Tuthill et al., 31 N. Y. 550 (1864). The contribution and support must be according to the usages and customs thereof; which implies that the contributions must be of a Rexicious Corporations Law. 4ll ' vital and substantial character. Peo. et al. v. Tuthill et al, 31 N. Y. $50 (1864). : : An election is not to be set aside and declared void, merely because certain illegal votes were received, which did not change the result of the election. Peo. et al. v. Tuthill, 31 N. Y. 550 (1864). § 196. Changing date of annual corporate meetings. An annual corporate meeting of an incorporated church to which this article is applicable, may change the date of its annual meeting thereafter. If such date shall next there- after occur less than six months after the annual meeting at which such change is made, the next annual meeting shall be held one year from such next recurring date. For the purpose of determining the terms of office of trustees, the time between the annual meeting at which such change is made and the next annual meeting thereafter shall be reckoned as one year. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723) § 86. Re- vised from L. 1826, ch. 47, § 3; L. 1875, ch. 79, § 1; am’d by L. 1879, ch. 463. § 197. Changing number of trustees. An incorporated church to which this article is applicable, may, at an an- nual corporate meeting, change the number of its trustees to three, six, nine or twelve, or classify them so that the terms of one-third expire each year. No such change shall affect the terms of the trustees then in office, and if the change reduces the number of trustees, it shall not take effect until the number of trustees whose terms of office continue for one or more years after an annual election, is less than the number determined upon. Whenever the number of trustees so holding over is less than the num- ber so determined on, trustees shall be elected in addition to those so holding over, sufficient to make the number of trustees for the ensuing year equal to the number so deter- mined on. The trustees so elected up to and including one-third of the number so determined on, shall be elected for three years, the remainder up to and including one- third of the number so determined on for two years and the remainder for one year. 412 REticious Corporations Law. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723) § 87. Re- vised from L. 1813, ch. 60, § 9, am’d by L. 1886, ch. 414. As am’d by L. 1910, ch. 249. The amendment of 1910 permits the change of number of trustees to twelve. Prior thereto the section only authorized change of the number of trustees to three, six or nine. § 198. Meetings of trustees. Two of the trustees of an incorporated church, to which this article is applicable, may call a meeting of such trustees, by giving at least twenty- four hours’ notice thereof personally or by mail to the other trustees. A majority of the trustees lawfully con- vened shall constitute a quorum for the transaction of bus- iness. In case of a tie vote at a meeting of the trustees, the presiding officer of such meeting shall, notwithstanding he has voted once, have an additional casting vote. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723) § 88. Re- vised from L. 1813, ch. 60, § 5; L. 1876, ch. 320, § 5. § 199. Vacancies among trustees. If any trustee of an incorporated church to which this article is applicable, de- clines to act, resigns or dies, or having been a member of such church, ceases to be such member, or not having been a member of such church, ceases to be a qualified voter at a corporate meeting thereof, his office shall be vacant, and such vacancy may be filled by the remaining trustees until the next annual corporate meeting of such church, at which meeting the vacancy shall be filled for the unexpired term. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723) § 89. Re- vised from L, 1813, ch. 60, § 6; L. 1875, ch. 79, § 2; L. 1876, ch. 329, § 7. Termination of Authority of Trustees. Where a majority of the trustees cease to be members of the church, they cease to be trustees, and their further acts as such trustees maygbe enjoined. First Ref. Pres. Ch. v. Bowden, 10 Abb. N. C. 1 (1880), aff’d on op. below, 14 Abb. N. C. 356. If a majority of the trustees form a new society in connection with another denomination for the purpose of applying the property of the old society to the new, they will be enjoined from interfering with the property. First Ref. Pres. Ch. v. Bowden, 10 Abb. N. C. 1 (1880), aff’d on op. below, 14 Abb. N. C. 356. Suit may be brought in the name of the corporation by a minority of the trustees, where the majority is attempting a diversion of cor- REticious Corporations Law. 413 porate property. First Ref. Pres. Ch. v. Bowden, 10 Abb. N. C. 1 (1880), aff’d on op. below, 14 Abb. N. C. 356. § 200. Control of trustees by corporate meetings; salaries of ministers. A corporate meeting of an incorporated church, whose trustees are elective as such, may give di- rections, not inconsistent with law, as to the manner in which any of the temporal affairs of the church shall be ad- ministered by the trustees thereof; and such directions shall be followed by the trustees. The trustees of an incorpo- rated church to which this article is applicable, shall have no power to settle or remove or fix the salary of the min- ister, or without the consent of a corporate meeting, to incur debts beyond what is necessary for the care of the property of the corporation; or to fix or * charge the time, nature or order of the public or social worship of such church, except when such trustees are also the spiritual officers of such church. Source.—Formerly Religious Corp. L. (L. 1895, ch. 723) § 90. Re- vised from L. 1813, ch. 60, § 8; L. 1876, ch. 320, § 6. Methodist Episcopal. The relation between a minister of a local church and the church itself or its trustees is not that of master and servant where he is assigned by a conference pursuant to rules of the Methodist Episcopal Church of the United States. Briston v. Burr, 120 N. Y. 427 (1890). See provisions of section 25, ante. § 201. Trustees of a church in connection with the United Brethren in Christ. If any church connected with the denomination known as the United Brethren in Christ shall neglect or omit to elect trustees at any annual elec- tion at which trustees should have been elected, the quar- terly conference of the circuit, station or mission of such denomination may elect such trustees for full terms, or to fill vacancies, in accordance with the rules and usages of such denomination. Source.—Formerly Religious Corp. L. (L. 1875, ch. 723) § 91. Re- vised from L. 1826, ch. 47, § 1, am’d by L. 1875, ch. 354. * So in original. 414 Reticious Corporations Law. § 202. Trusts for Shakers and Friends. All deeds or ' declarations of trust of real or personal property, executed and delivered before January first, eighteen hundred and thirty, or since May fifth, eighteen hundred and thirty- nine, to any person in trust for any United Society of Shakers, or heretofore executed and delivered to any per- son or persons in trust for any meeting of the Religious Society of Friends, or any of the purposes thereof, and the legal estates, interests and trusts purported to be con- veyed, created or declared thereby, shall be valid. Trusts of real or personal property, for the benefit and use of the members of any United Society of Shakers, or of any meet- ing of the Religious Society of Friends, or any of the pur- poses thereof, may hereafter be created, according to the religious constitution of such society of Shakers, or the regulations and rules of discipline of such Society of Friends. Such deeds or declarations of trust, heretofore or hereafter executed and delivered, shall vest in the trustees the legal estates and interests purported to be conveyed or declared thereby, to and for the uses and purposes de- clared therein; and such legal estates and trusts, and all legal authority with which the original trustees were vested by virtue of their appointment and conferred powers, shall descend to their successors in office or trust, who may be chosen in conformity to the constitution of such society, or the directions of such meeting. In case of the death of all the trustees of any trust for the benefit of any meeting of the Religious Society of Friends or any of the purposes thereof, heretofore appointed, or who may be hereafter ap- pointed by virtue of this section, any such meeting may ap- point a trustee or trustees in place of such person or per- sons, and fhe person or persons thus appointed by such meeting shall succeed to, and be invested with, all the pow- ers, rights and duties conferred by this section and the deed or declaration of trust upon the trustee or trustees. In case of the consolidation of two or more meetings of the Re- ligious Society of Friends into one meeting, all real and personal property held in trust for either or any of the Reticious Corporations Law. 4Is meetings so consolidated, or any of the purposes thereof, shall continue to be vested in the trustees holding the same at the time of such consolidation, until their successors shall be chosen as above provided. Such consolidated meeting shall have the same rights, powers and duties in respect to such property, estates and trusts and in respect to the appointment of such trustees and their successors as the meetings so consolidated or either of them previ- ously had. This section does not impair or diminish the rights of any person, meeting or association claiming to be a meeting of the Religious Society of Friends, which such person, meeting or association claiming to be a meeting, had to any real or personal property held in trust for the use and benefit of any meeting of such society, before the division of such society which took place at the annual meeting held in the city of New York in May, eighteen hundred and twenty-eight. No society of Shakers shall be- come beneficially interested in real or personal property, the clear annual value or income of which exceeds twenty-five thousand dollars. No meeting of the Religious Society of Friends shall become beneficially interested in real or per- sonal property, the clear annual value or income of which exceeds fifty thousand dollars. No person shall be a trus- tee at the same time of more than one society of Shakers or meeting of Friends.