Kctu 5gatk At ajornell Uniueraits atliaca. £?. $. Cornell University Library HD 2779.N7H32 1909 A manual of New York corporation law, con 3 1924 013 840 925 Cornell University Library The original of tiiis bool< is in tine Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924013840925 Hegal anb ^usintse publications! of Wt)t 3i8lonalb $re£(£( Company 229 Broadway, New York corporate; organization. By Thomas Conyngton, of the New York Bar. 400 pp. 6x9 in. 1908. Buckram bind- ing. Prepaid price, $3.00 CORPORATE MANAGEMENT. By Thomas Conyngton. Third Edition, 400 pp. 6x9 in. 1909. Buckram binding. Prepaid price, $3.50. CORPORATION LAWS OF AI,I, STATES. By M. U. OvsstAND, of the New York Bar. 500 pp. 6x9 in. 1909. Interleaved Edi- tion. Buckram binding. Prepaid price, $4.00 MAINE CORPORATIONS. By H. M. Heath, of the Maine Bar. 300 pp. 6x9 in. 1907. Buckram binding. 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Prepaid price, $4.00 CIRCUIARS ON APPLICATION A MANUAL OF NEW YORK CORPORATION LAW CONTAINING The Important Statutes Regulating Business Incor- porations, a Digest of these Statutes and the Principal Forms Used by Corporations Operating in the State of New York BY RICHARD COMPTON HARRISON OF THE NEW YORK BAR Second Edition Revised and Enlarged NEW YORK THE RONALD PRESS 1909 HUtTTS COPYRIGftT 1906 BY The Ronald Press Company Copyright 1909 BY The Ronald Press Company 1652-1 PREFACE TO SECOND EDITION. As stated in the preface to the first edition, "The pur- pose of the present work is to furnish in compact and con- venient form the usual law and procedure governing business corporations in the State of New York." The adoption of the Consolidated Laws by the legislature at its recent session has necessitated a new edition of "New York Corporations." The author has taken advantage of this fact to make such additions and changes in the volume as will in his judgment more fully carry out its stated purpose. The work is now divided into four parts, viz., (i) Procedure; (2) Forms; (3) Tables; (4) Statutes. Part I presents the law and procedure governing the organization and management of business corporations in the State of New York. In the present edition a chapter on receiverships has been added, the treatment of dissolu- tion is more complete than heretofore, and the text has been revised in accordance with recent legislation, judicial determinations and official rulings. In Part II the forms most frequently used in New York corporate procedure are given as precedents. Most of these are direct copies of actual instruments changed only as to identifying details. In the present edition the number of these forms has been materially increased and the forms of the preceding edition have been modified wherever neces- sary to meet changes in the statutory law, or in the rulings of state officials. Part III is new in the present edition and consists wholly of tables. Tables of fees give in convenient reference form the fees payable to state and local officials in every important IV PREFACE. corporate action or process. Comparative tables are also included, giving the present and former section numbering of the statutes relating to corporations. These will be found of much convenience in establishing the connection between the corporation laws as heretofore arranged and numbered and as now found in the Consolidated Laws. Part IV contains the full present text of the Business Corporations Law, of the General Corporation Law and of the Stock Corporation Law. It also includes the text of those sections of the Tax Law, of the Code of Civil Pro- cedure and of the Penal Law which apply particularly to corporations, together with such miscellaneous statutes as are of special interest. A large number of the forms presented have been secured through the courtesy of Mr. Thomas Conyngton. To him and to numerous other friends who have made helpful suggestions or criticisms, the author takes this opportunity of expressing his thanks. Richard C. Harrison. New York, June 1 , 1909. TABLE OF CONTENTS. PART I.— PROCEDURE. Chapter I. Corporation Laws. 1. Creation of Corporations. 2. Constitutional Provisions. 3. Statutes. 4. Business Corporations Law. 5. Stock Corporation Law. 6. General Corporation Law. 7. Relative Force of General and Special Statutes. 8. General Statutory Law. 9. Common Law. Chapter II. Expenses of Incorporation. 10. Organization Expenses. 11. Organization Tax. 12. Fees to Secretary of State. 13. Fees to County Clerk. 14. Table of Organization Expenses. Chapter III. Certificate of Incorporation. 15- Incorp' orators. 16. Certificate of Incorporation. 17- Contents of Certificate of Incorporation. 18. (I) Name. 19- (2) Corporate Purposes. 20. (3) Capital Stock. 21. (4) Shares. Initial Capital. 22. (5) Location. 23- (6) Duration. 24. (7) Number of Directors. (8) Names. 25- (9) Subscribers. 26. (10) Special Provisions. VI TABLE OF CONTENTS. 27. Execution of Certificate. 28. Filing and Recording. State. 29. " " Local. 30. Allowance. Chapter IV. By-Laws. § 31. Preparation. 32. (i) Meetings and Elections. 33. (2) Directors. 34. (3) Officers. 35. (4) Capital Stock. 36. Adoption. 37. General. 38. Observance. 39. Repeal. Chapter V. First Meetings. § 40. First Meeting of Stockholders. 41. Notice of Stockholders' First Meeting. 42. Minutes of Stockholders' First Meeting. 43. Organization of Stockholders' First Meeting. 44. Acceptance of Charter. 45. By-Laws. Stockholders'. 46. Exchange of Stock for Property. Stockholders' Action. 47. Other Business. Stockholders' First Meeting. 48. First Meeting of Directors., 49. Organization of Directors' First Meeting. 50. Issue of Stock for Property. 51. Miscellaneous Business. Directors' First Meeting. Chapter VI. Corporate Existence. I 52. When Commenced. 53. Beginning Business. 54. Renewal. SS- Forfeiture of Charter. 56. Dissolution. Chapter VII. Corporate Powers. § S7- General. 58. (i) To Have Succession. 59- (2) To Appoint Officers and Agents. 60. (3) To Make By-Laws. 61. (4) To Have a Seal. TABLE OF CONTENTS. vii 62. (s) To Acquire, Hold and Dispose of Property. 63. Power to Hold Property in Other States. 64. Power to Hold Its Own Stock. 65. Power to Hold Stock of Other Corporations. 66. Status of Holding Corporations. 67. Power to Borrow Money. Corporate Bonds. Mortgages. 68. Power to Guarantee Debts of Other Corporations. 69. Power to Do Business in Other States. 70. Consolidation of Corporations. 71. Merger. 72. Amendment of the Charter. (a) To Secure New Purposes of Same General Character. (b) Increase of Capital Stock. (c) Decrease of Capital Stock. (d) Increase or Decrease of Number of Shares. (e) Change of Number of Directors. (f) Change of Location of Principal Office. (g) Classification of Stock. (h) Extension of Corporate Existence, (i) Change of Corporate Name. 72a. Filing and Recording Charter Amendments. 73. Ultra Vires Acts. Chapter VIII. Capital Stock. 74. Capital Stock. Statute Requirements as to Payment. 75. Amount of Capitalization. •jd. Classes of Stock. Common and Preferred. TJ. Classification of Stock. After Organization. 78. Redemption of Preferred Stock. 79. Other Classifications. 80. Par Value of Shares. 81. Subscriptions. 82. Stock Certificates. 83. Lost and Destroyed Certificates. 84. Consideration for Issue. 85. Calls for Subscription Installments. 86. Increase or Decrease. 87. Transfer of Stock. 88. Dividends. Chapter IX. Stockholders. 89. Creation of the Relation. 90. Rights of Stockholders. Collective. (a) Mortgages. (b) Conversion of Obligations into Stock. viii TABLE OF CONTENTS. (c) Sale of Property and Franchise. (d) To Guarantee Bonds. (e) Consolidation. (f) Renewal. 91. Rights of Stockholders. Individual. (a) Right to Notice ; Voting. (b) Dividends. (c) Stock Certificates. (d) Transfer of Stock. (e) Inspection of Corporate Book? and Records. (f) Financial Statement. (g) Dissolution. 92. Liability of Holders of Full Paid Stock. (a) Liability to Employees. (b) Full Liability Companies. 93. Liability of Holders of Stock Not Full Paid. 94. Personal and Representative Liability. 95. Relations of Stockholders to Each Other. 96. Relations of Stockholders to the State. 97. Powers of the Majority. 98. Voting Trusts. Chapter X. Stockholders' Meetings. § 99. General. 100. Place, loi. Notice. (a) Waiver of Notice. (b) Notice of Annual Meeting. (c) Notice Same as for Annual Meeting. (d) Stockholders' Notice of Special Election of Directors. (e) Notice of Meeting for Increase or Decrease of Capital Stock. (f) Notice of Meeting to Change Number of Directors, (g) " " to Alter or Extend Business, (h) " " for Dissolution. (i) " " to Guarantee Bonds of Another Corpor- ation, (j) Notice of Meeting When Not Otherwise Provided. 102. Quorum. 103. Right to Vote. 104. Proxies. 105. Closing Stock Books. 106. Election of Directors. 107. Cumulative Voting. 108. Inspectors of Election. TABLE OF CONTENTS. ix log. Challenges. no. Contested Elections. 111. Effect of Failure to Elect Directors. 112. Special Elections. Chapter XI. Directors. ! 113. Number. 114. Election. 115. Classification. 116. Vacancies. 117. Qualifications of Directors. 118. Compensation of Directors. 119. Powers of Directors. 120. Powers of Directors in Case of Dissolution. 121. Relations of Directors to Corporation and Stockholders. 122. Directors' Liability for Negligence. 123. Statutory Liability of Directors. 124. Directors' Liability to Creditors. 125. Directors' Meetings. (a) Place. (b) Notice. (c) Quorum. (d) Voting. 126. Standing Committees. Chapter XII. Officers. i 127. The Corporate Officers. 128. Qualifications. 129. Security. 130. Powers. 131. Personal Liabilities of Officers. (a) To the Corporation. (b) To Third Persons. (c) Penal Statutory Liability. 132. Tenure of Office. 133. Compensation. Chapter XIII. Principal Office. Corporate Books. 134. Location of Principal Office. 135. Corporate Books. 136. The Stock Book. 137. Right to Inspect Corporate Books. TABLE OF CONTENTS. Chapter XIV. State Taxation. 138. Franchise Tax. 139. "Capital Stock Employed Within the State." 140. Deduction of Debts. 141. United States Securities. 142. Patents and Copyrights. 143. Good-Will. 144. Meaning of "Employed Within the State." 145. Classification of Corporations for Purposes of Franchise Tax- ation. 146. (i) Corporations Paying Dividends Not Less Than Six Per Cent. 147. (2) Corporations Paying No Dividends. 148. (3) Corporations Paying Dividends Less Than Six Per Cent. 149. Corporations Exempt from Franchise Tax. 150. What Are Manufacturing Companies ? 151. Stock Transfer Tax. 152. " " " Rules of the State Comptroller's Office. Chapter XV. Local Taxation. 153. Tax District. 154. Taxation of Realty. 155. Taxation of Personalty. 156. Place of Assessment of Personalty. 157. Manner of Assessing Personalty. 158. Deductions before Assessment of Personalty. 159- (I) Real Estate. 160. (2) Debts and Liabilities. 161. (3) Shares of Stock. 162. (4) Surplus or Reserve. 163. (S) Stock Held by State, etc. 164. (6) Property in Other States. 165. (7) United States Securities. 166. (8) Patents and Copyrights. 167. (9) Imported Goods. 168. (10) Good-Will. 169. (II) Mortgages. 170. Date of Assessment. 171. New York City. 172. Special Franchises. Chapter XVI. Reports. 173. Required Reports. 174. Annual Report. TABLE OF CONTENTS. xi 175. Report to State Comptroller. Franchise Tax. 176- Local Tax Report. Chapter XVII. Foreign Corporations. i 177- Status of Foreign Corporations. 178. What Constitutes "Doing Business in the State." 179. Foreign Corporations with Resident Incorporators. 180. Procedure to Secure Admission to State. 181. Fees. 182. Status of Foreign Corporations when Licensed. 183. Penalties for Non-Compliance. 184. Principal Ofifice. 185. State Taxation. License Tax. 186. " " Annual Privilege Tax. 187. Local Taxation. 188. Books Required to be Kept by Foreign Corporations. 189. Reports. 190. Attachment Against. Chapter XVIII. Receivers of Corporations. (a) Temporary and Permanent Receivers. : 191. Classification. 192. Jurisdiction of Court to Appoint. 193- Qualification. (b) Powers and Duties oe Permanent Receivers. 194. Notice to Creditors. 195. Employment of Counsel. 196. Collection of Assets. General. 197. " " From Debtors. 198. " " From Persons Holding Corporate Property, ipp. " " From Mortgagees and Pledgees. 200. Conversion of Estate into Money. 201. Care of Funds. Accounts. 202. Distribution of Assets. (a) Creditors' Meetings. (b) Proof of Claims. (c) Order of Distribution. 203. Fees of Receivers. (a) In Voluntary Dissolution. (b) In Other Receiverships. 204. Final Accounting. 205. Resignation and Removal of Receivers. xii TABLE OF CONTENTS. PART II.— FORMS AND PRECEDENTS. Chapter XIX. Subscription Lists and Receipts. (a) Subscription Lists. Form. 1. Subscription List. 2. " " Trustee's. 3. Subscription Agreement. Conditional. 4. Subscription Blank. Individual. 5. " " After Organization. (b) ReceiPTs FOR Subscription Payments. 6. Trustee's Receipt. 7. Installment Scrip. 8. Indorsement of Installment Payments. 9. Interim Receipt. 10. Temporary Stock Certificate. Chapter XX. Stock Certificates and Stock Books. Form. 11. Stock Certificate. Common. 12. " " Preferred. 13. Assignment of Stock Certificate. In Blank. 14. " " " Complete. 15. Indemnity Bond. Lost Certificate. 16. Transfer Book. 17. " " Condensed. 18. Stock Book and Stock Ledger. 19. " Chapter XXI. Charter and By-Law Forms. (a) Charter Forms. Form. 20. Certificate of Incorporation. Usual Form. 21. " " Extended Purposes. 22. " " Preferred Stock. 23. " " Special Provisions. (b) By-Law Forms. 24. By-Laws. Short Set. 25. " Extended Form. 2Sa. Certification of By-Laws. TABLE OF CONTENTS. XIU Chapter XXII. Forms for First Meetings. Form. 26. Proxy. 27. Call and Waiver. Stockholders'. 28. " " Directors'. 29. Exchange of Property for Stock. Proposal. 30. Assignment of Incorporators' Subscriptions. 31. Exchange of Property for Stock. Stockholders' Resolution. 32. " " " Directors' " 33. Minutes. Stockholders'. 34. " Directors'. 35. Assignment of Property. Chapter XXIII. Forms for Meetings. (i) Stockholders' Meetings. (a) Proxies. Form. 36. Proxy. Simple. 37. Formal Proxy. Annual Meeting. 38. Proxy for Specific Action. 39. Revocation of Proxy. (6) Calls and Notices. 40. Call for Special Meeting. 41. Notice of Special Meeting. 42. Notice of Annual Meeting. 43. " " " Publication. 44. " 45. " (c) Inspectors' Oaths and Certificates. 46. Oath. Inspectors of Election. 47. Certificate. Inspectors of Election. 48. Acknowledgment of Inspectors' Certificate. (d) Minutes. 49. Minutes of Annual Meeting. (2) Directors' Meetings. 50. Call. Special Meeting of Directors. 51. Notice. " 52. Call and Waiver. Special Meeting of Directors. 53. Notice. Regular Meeting of Directors. 54. Minutes. " XIV TABLE OF CONTENTS. Chapter XXIV. Signatures and Certifications. Form. 55. Official Signatures. 56. Corporate Signatures. 57. Corporate Indorsements. 58. Corporate Acknowledgment. 59- Treasurer's Affidavit. 60. Certification. Extract from Minutes. 61. Certified Resolution for Bank. 62. Certification of Resolution. Chapter XXV. Forms of Reports. Form. 63. Certificate. Payment One-Half Capital Stock. 64. Annual Report. 6$. Report to Comptroller. 66. Statement to Comptroller. To Secure Exemption as Manufactur- ing Corporation. 67. Local Tax Report. General Form. 68. " " " New York City. Chapter XXVI. Statutory Forms. (i) Application for Admission to State by Foheign Corporations. Form. 69. Statement and Designation of Agent. Foreign Corporation. 70. Consent of Agent. Foreign Corporation. 71. Affidavit to Certificate of Incorporation. Foreign Corporation. (2) Agency Changes. Foreign Corporation. 72. Revocation and New Designation of Agent. Foreign Corporation. 73. Revocation of Agent's Consent. Foreign Corporation. 74. Certificate of Change of Office. Foreign Corporation. (3) Charter Amendments. 75. Change of Name. Resolution of Directors Authorizing Change. 76. " " Publication Notice. 77. " " Petition. 78. " " Order. 79. Change of Principal Office. Written Consent of Stockholders. 80. " " " Certificate of Removal. 81. " " " Vote of Stockholders. 82. Classification of Stock. Publication Notice. 83. " " Certificate. 84. Increase of Stock. By Unanimous Consent. TABLE OF CONTENTS. XV 85. Increase and Classification of Stock. 86. Increase of Number of Directors. Notice of Meeting. Proof of Service. Transcript of Proceedings. By Unanimous Consent. 87. 88. 89. (4) Elections op Dirsctors. 90. Challenges. Oath of Voter. 91. " Oath of Proxy. 92. Stockholders' Notice of Special Election. 93. Sworn Statement of Membership. 94. Application to Supreme Court. Review of Election. (5) Dissolution. 95- Dissolution Without Judicial Procedure. Certificate. 96. " " " " Consent of Stockhold- 97. 98. 99. 100. lOI. 102. 103. 104. 105. ig6. 107. 108. Voluntary Dissolution. " " Statement of Secretary. " Affidavit of Secretary. Petition. Schedule. Affidavit. Notice of Application. Order to Show Cause. Appointment of Referee. Notice of Order. Referee. Report of Referee. Schedule of Assets and Creditors. Final Order and Appointment of Receiver. (6) Voting Trusts. 109. Voting Trust Agreement. Chapter XXVII. Forms Relating to Dividends. Form. no. Resolution Declaring Dividend. 111. " " Preferred Dividend. 112. Notice of Dividend. Mailing. 113. " " Publication. It II It 114. Chapter XXVIII. Bond Issues. Form. 115. Stockholders' Resolution Authorizing Mortgage. 116. " Written Consent to Mortgage. 117. Certificate of Consent to Mortgage. XVI TABLE OF CONTENTS. ii8. Directors' Resolution Authorizing Bond Issue. 119. Coupon Bond. 120. Coupon. 121. Trustee's Certificate. 122. Deed of Trust. PART III.— TABLES. Table. 1. Organization Expenses and Franchise Tax. 2. State Fees. (a) Fees to Secretary of State. (b) Fees to Comptroller. 3. Local Fees. Fees to County Clerks. 4. General Schedule of Fees. 5. Corporate Calendar. Comparative Section References. Business Corporations Law. General Corporation Law. Stock Corporation Law. Tax Law. Code of Civil Procedure. Penal Law. PART IV. STATUTES. 1. Business Corporations Law. 2. General Corporation Law. 3. Stock Corporation Law. 4. Tax Law. (a) Local Tax. (b) State Tax. (c) Stock Transfer Tax. 5. Code of Civil Procedure. 6. Penal Law. 7. Miscellaneous Statutory Provisions Affecting Corporations. INDEX OF TABLES. The following reference tables will be found in Part III of the present volume: General Tables. Page Table No. i. Organization Expenses and Franchise Tax 333 " 2. State Fees 336 (a) Fees to Secretary of State. (b) Fees to Comptroller. " 3. Local Fees 337 (a) Fees to County Clerks. " " 4. General Schedule of Fees 338 " " s. Corporate Calendar 340 Tables of Comparative Section References. Table No. 6. Business Corporations Law 342 7. General Corporation Law 343 8. Stock Corporation Law 346 9. Tax Law 348 10. Code of Civil Procedure 349 11. Penal Law 350 NEW YORK CORPORATIONS. PART I.— PROCEDURE. CHAPTER I. CORPORATION LAWS. § I. Creation of Corporations. Corporations are the creatures of the legislature and de- rive their right to exist and their privileges entirely from legis- lative grant. Thomas v. West Jersey Ry., loi U. S. 71 (1879). The power of the legislature to create corporations is absolute except where limited by the national or state con- stitutions. Louisville Gas Co. v. Citizens' Gas Light Co., 115 U. S. 683 (1885). § 2. Constitutional Provisions. The New York Constitution provides as follows : "Corporations may be formed under general laws; but shall not be created by special act, except for municipal pur- poses, and in cases where, in the judgment of the legislature, the objects of the corporation cannot be attained under general laws." (Art. VIII, § i.) It is settled that this section leaves the necessity for in- corporation by special act entirely to the judgment of the legis- lature and that the existence of a general law under which a corporation might be created, does not render a special act of incorporation unconstitutional or open to judicial review. 19 20 NEW YORK CORPORATIONS. Met. Bank v. Van Dyck, 27 N. Y. 400, 448 (1863). A char- ter obtained under a general law may be amended by special act. (G. C. L., § 320.) In re P. P. & C. I. Ry., 67 N. Y. 371- The Constitution, however, prohibits any private or local bill (Matter of N. Y. El. Ry., 70 N. Y. 327, 345 [1877]) : (i) "Granting to any corporation, association or individual the right to lay down railroad tracks. (Held not to apply to a municipality. Sun v. Mayor of N. Y., 152 N. Y. 257 [1897].) (2) "Granting to any private corporation, associa- tion or individual any exclusive privilege, immunity or franchise whatever. In re Union Ferry Co., 98 N. Y. 139, 151 (1885). (3) "Providing for public bridges and chartering companies for such purposes, except on the Hudson River below Waterford and on the East River, or over the wa- ters forming a part of the boundaries of the State." (Art. Ill, § 18.) State or municipal aid to private corporations is prohib- ited. (Art. VIII, §§ 9, 10.) It is also, provided that all cor- porations shall have the right to sue and shall be subject to be sued in all courts in like cases as natural persons. (Art. VIII, §3-) § 3. Statutes. In accordance with the provisions of Art. VIII of the Constitution, the legislature has enacted general statutes which provide for and control the organization and management of business corporations. Prior to 1890 these laws existed — as far as then enacted — only as disconnected session laws. In that year, however, the legislature, in accord with the policy of substituting general statutes for scattered session laws, col- lected, classified and grouped most of these corporation laws under distinctive titles. In 1909, with the adoption of the Consolidated Laws, the classification of the corporation laws CORPORATION LAWS. 21 was carried still further, resulting in material changes in their arrangement. The most important groupings of the corporation laws are the "Business Corporations Law," the "General Corpora- tion Law," and the "Stock Corporation Law." In addition to these, there are various special statutes as the "Transporta- tion Corporations Law," the "Railroad Law," the "Banking Law," etc., etc. § 4. Business Corporations Law. The statutes relating to the creation of stock corporations "for any lawful business purpose or purposes other than a moneyed corporation, or a corporation provided for by the banking, the insurance, the railroad and the transportation corporations laws, or an educational institution or corpora- tion which may be incorporated as provided in the education law" (B. C. L., § 2), are now grouped as Chapter 4 of the Consolidated Laws and are entitled the "Business Corpora- tions Law." This law relates to business corporations only, the term including trading, mining and manufacturing com- panies and containing detailed directions for their formation, consolidation and reorganization. (See Part IV for text of Business Corporations Law.) § 5. Stock Corporation Law. The statutory details relating to the management, rights and powers of stock corporations of every kind, and the rights, powers and duties of their officers, directors and stockholders, are brought together as Chapter 59 of the Consolidated Laws under the title the "Stock Corporation Law." This law ap- plies to all corporations having a capital stock, including those formed under the Business Corporations Law. It supplies general provisions and details of procedure which are not found in the Business Corporations Law. (See Part IV for text of Stock Corporation Law.) 22 NEW YORK CORPORATIONS. § 6. General Corporation Law. All those laws which apply to both stock and non-stock corporations and which could not therefore properly be in- cluded in either the Business Corporations Law or the Stock Corporation Law are grouped as Chapter 23 of the Consoli- dated Laws under the title of the "General Corporation Law." Business corporations fall under this law also and are therefore subject to the provisions of all three groups of statutes. This necessitates reference to each group to determine the mode of creation, the powers, privileges and obligations of corpora- tions of this nature. (See Part IV for text of General Cor- poration Law.) § 7. Relative Force of General and Special Statutes. The character of the General and Stock Corporation Laws is very sweeping and this has led the legislature to provide that if they conflict with other corporate laws, the provisions of these other laws shall prevail. (G. C. L., § 321.) If, how- ever, another act covers a subject provided for by either law, but is not in conflict therewith, the two are held to supplement each other. § 8. General Statutory Law. Additional statutory enactments affecting corporations, given in Part IV of the present volume, are as follows : The important provisions of the "Tax Law" applying to corporations and to the transfer of their stock. (Con. Laws, Ch. 60.) The important provisions of the "Code of Civil Pro- cedure" and of the "Penal Law" (Con. Laws, Ch. 40) ap- plicable to corporations. The provisions of the Labor Law applying more particu- larly to corporations. (Con. Laws, Ch. 31.) CORPORATION LAWS. 23 The statutory provisions as to fees to public officials and tables of these fees are given in Part III of the present volume. Important acts affecting corporations, but not considered because they apply only to classes of corporations outside the scope of the present volume, are as follows : The "Transportation Corporations Law," which covers the incorporation and regulation of all transportation corpora- tions except railroads, and includes navigation, gas, electric light, telegraph and telephone corporations. (Con. Laws, Ch. 63-) The "Banking Law," which applies to state banks, sav- ings banks, trust companies, building and mutual loan corpora- tions, co-operative loan associations, mortgage loan and in- vestment corporations and safe deposit companies, all of which are referred to as "moneyed corporations." (Con. Laws, Ch. 2.) The "Membership Corporations Law," which applies to corporations not formed for pecuniary profit. This law con- tains provisions for the incorporation and management of cem- etery and fire corporations, corporations for the prevention of cruelty, hospitals, Christian, bar and veteran associations, sol- diers' monument corporations, boards of trade and agricultural corporations. (Con. Laws, Ch. 35.) A special law, known as the "Benevolent Orders Law," applies to societies which include benefit insurance to members. (Con. Laws, Ch. 3.) The "Insurance Law," which regulates insurance com- panies. (Con. Laws, Ch. 28.) The "Railroad Law," which applies to both steam and street railways. The "Religious Corporations Law," which provides for the incorporation of churches of all denominations. (Con. Laws, Ch. 51.) § 9. Common Law. All matters of corporate procedure not expressly provided 24 NEW YORK CORPORATIONS. for by statute law, are governed by the rules of the common law. These are, in the main, the same in all parts of the coun- try. They are discussed incidentally in the present volume in connection with the New York statute law, as the limits of space prevent a full presentation. CHAPTER 11. EXPENSES OF INCORPORATION. § lo. Organization Expenses. The expenses involved in the formalities of incorporation are primarily the organization tax on the capitalization of the proposed corporation, the filing and recording fees to Secre- tary of State and to the clerk of the county in which the prin- cipal office is located, and the incidental fees for acknowledg- ments, etc. The fees for acknowledgments, etc., are usually trifling, the entire necessary incidental expenses, including filing and recording fees to Secretary of State and county clerk, rarely exceeding $15. § II. Organization Tax. The organization tax is one-twentieth of one per cent. (50 cents per $1,000) of the amount of capital stock author- ized by the certificate of incorporation, but in no case less than $1. (Tax Law, § 180.) This tax must be sent direct to the State Treasurer — not to the Secretary of State — in cash, postal or express order, New York draft or certified check, payable to "State Treasurer" or "Treasurer of the State of New York." Checks sent in payment of the organization tax must, by a rule of the Treasurer's office, be certified. Corporations formed by the reorganization or consolida- tion of existing domestic companies (see §§ 70, 71), pay this tax only upon capitalization in excess of the aggregate amount of capital stock of the constituent companies. (Tax Law, § 180.) When a capitalization is decreased and subsequently increased, the organization tax is paid only on the amount, if any, in excess of the original capitalization. (Id.) 25 26 NEW YORK CORPORATIONS. A reorganization of an existing corporation, under § 4 of the Business Corporations Law, is a "corporate act" and does not result in the creation of a new corporation. Therefore no tax need be paid, unless the capitalization of the company, as reorganized, is increased. Matter of Kansas City Smelt- ing Co., 13 App. Div. 50 (1897). § 12. Fees to Secretary of State. The filing fee to Secretary of State is $10, regardless of the amount of capitalization, and the recording fee is 15 cents per folio of 100 words. These fees must be sent direct to the Secretary of State together with the papers to be filed and re- corded. A certificate showing due incorporation will be fur- nished by Secretary of State upon payment of $1. If a certi- fied copy of the charter is desired, it may be obtained upon pay- ment of 15 cents per folio and $1 additional for certificate under seal. (Ex. Law, § 26.) (See § 28; also Part III, Tables 2 and 4.) Remittance may be made in cash or by certified check, New York draft, postal or express order. § 13. Fees to County Clerk. The fees to the county clerk are 6 cents for filing charter and ID cents per folio for recording same. (Code Civ. Pro., § 3304.) (See § 29; also Part III, Tables 3 and 4.) If a copy of the charter is desired, it may be obtained from the county clerk for 8 cents per folio of 100 words. § 14. Table of Organization Expenses. A table of organization expenses is given in Part III of the present volume (Table i) and will be found convenient for ready reference. In this table the incidental fees, estimated at $15, are added to the organization tax in computing the total expense of incorporation. The franchise tax — on the basis of a six per cent, dividend — is also given in order to facili- tate computation of the general expense involved in incorpora- tion. CHAPTER III. CERTIFICATE OF INCORPORATION. § 15. Incorporators. Under the New York statutes, three or more qualified per- sons may form a corporation for any lawful business other than that of a moneyed corporation, or of a corporation formed under the banking, insurance, railroad or transportation cor- poration laws, or an educational institution or corporation which may incorporate under the education law, or a corpora- tion to engage in the practice of law. ( B. C. L. § § 2, 2a. ) The statute prescribes that incorporators shall be natural persons of full age, two-thirds of them citizens of the United States, and one, at least, a resident of the State of New York. (G. C. L., § 4.) Corporations, copartnerships, minors and persons acting in a representative capacity are therefore ex- cluded, but aliens may act, if otherwise qualified, so long as the proper proportion of citizens and residents is maintained. The charter is a contract between the State and the incor- porators. Dartmouth College v. Woodward, 14 Wheat. 518 (1819). The latter must, therefore, in addition to the statu- tory requirements, be persons capable of entering into a bind- ing contract. Since married women may now freely contract, and may and do act as incorporators, the only practical im- portance of this restriction is the exclusion of minors and per- sons of insufficient mental capacity to make a binding contract. Each of the incorporators must be a subscriber to the stock of the corporation and his subscription must be set forth in the certificate of incorporation. (B. C. L., § 2.) (See § 27 28 NEW YORK CORPORATIONS. 25.) One share is enough to satisfy this requirement. The allowance of the charter serves as an acceptance of the incor- porators' subscriptions and they are then stockholders of the company. Woods Motor Vehicle Co. v. Brady, 39 Misc. 79, 83 (1902). Reversed on other grounds, 181 N. Y. 145 (1905). All of the incorporators must sign and acknowledge the charter. (B. C. L., § 2.) (See § 27.) If the number of incor- porators is large, this requirement may involve considerable delay and trouble, and, for this reason, in practice the number is usually limited, — commonly to the minimum allowed by the statutes. The statutory requirements in regard to incorporation must be followed with exactness and the duties devolving upon incorporators are technical and somewhat onerous. To relieve the real parties in interest from these perfunctory but neces- sary details, it is not uncommon to employ one or more "dum- mies" to act as incorporators, — that is, persons who have no direct interest in the corporation to be formed, but who act as incorporators, effect the incorporation and organization as far as required, and then step out to make way for those really concerned. Serious personal inconvenience to principals, involved in attendance at the purely formal organization meetings, is often avoided by this use of dummies. At times they are employed as a convenient means of concealing the identity of the real parties in interest until these latter are ready to be known. The use of dummies is also resorted to, on occasion, to meet the statutory requirements as to the citizenship and residence of the incorporators when the real parties are not qualified. As neither citizenship nor residence is prescribed for directors, save that one must be a resident of the state (G. C. L., § 34), the principals may come forward, as soon as the company is organized, and legally assume control. "Dummies" are usually friends or employees of the in- terested parties and act under the supervision of the incor- CERTIFICATE OF INCORPORATION. 29 porating counsel. They often carry affairs through the first meetings, acting as both incorporators and directors, adopting by-laws, electing officers and transacting business of the great- est importance to the new company. When dummies are employed their subscriptions are usu- ally paid either by check advanced for the purpose, or by in- clusion of their stock with that issued in exchange for prop- erty. In either case, if the amounts of the subscriptions are at all material, the dummies may be required to assign these subscriptions before payment, or to sign an order for the issue of the stock to the real owners, or to assign their certificates of stock as soon as issued. There is nothing illegal in the use of dummy incorpor- ators, and, though the practice is severely criticised, it has been upheld by the highest courts. Dickerman v. Northern Trust Company, 176 U. S. 181 (1900). § 16. Certificate of Incorporation. The certificate of incorporation, or charter, is a formal statement of certain facts relating to the proposed corpora- tion, required by the State before permission to exist as a corporation will be granted. It is also an application for the privileges and powers offered by the statute. Upon filing and recording by the Secretary of State the instrument, though in form merely an application, becomes itself the formal grant of powers by the State. Certain general powers are common to all corporations. These are secured as an incident of incorporation and without specific application. (G. C. L., § 11.) (See § 57.) The corporation has only such special powers, however, as are set forth in the charter. Great care should be taken to include in the original certificate all necessary rights and privileges, as amendment is often a complicated and troublesome matter. At the same time, the jungle of print so frequently employed in the purpose clause of charters is not to be recommended. 30 NEW YORK CORPORATIONS. It is often aimless and confusing and is sometimes actually- restrictive through its very attempt to be all inclusive. A very full statement of purposes is at times necessary or advisable, but as a rule a direct, clear statement of comparative brevity is preferable. The charter purposes may only be such as are allowed by law. Usually improper or illegal provisions are detected and refused in the office of the Secretary of State. If, however, such provisions should be found in the instrument as filed, they are of no force or efifect. The certificate must be written in English (G. C. L., § 5) and, as a matter of convenience, is usually prepared in tripli- cate ; two copies to be filed, one with the state and one with the county officers (Id.), and the third copy to be retained for the corporate records. All should be signed, but only those for filing need be acknowledged. (B. C. L., § 2.) (See § 27. ) It has been held that one who is himself an incorporator may not take the • acknowledgments of other incorporators. People ex rel. Erie R. R. v. Board of R. R. Comrs., 105 App. Div. 273 (1905). § 17. Contents of Certificate of Incorporation. The following from the opinion of Judge Earl is a good statement of the scope of the certificate of incorporation : "Persons seeking to form a corporation under any general law must have a reasonable latitude as to what they may insert in their certificate of incorporation. They must insert therein all the matter particularly required by the law, and they may insert other provisions not inconsistent with law or public policy which are germane to the purposes of the cor- poration, and necessary, convenient or appropriate to the ac- complishment of such purpose. If they keep within such limits the public authorities have no reason to interfere, the interests of the public are not jeopardized, and the rights of no citizen CERTIFICATE OF INCORPORATION. 3 1 are violated." People ex rel. Fairchild v. Preston, 140 N. Y. 549, 552 (1894). The statutes require certain facts concerning the corpora- tion and its purposes to be set forth in the charter. These facts must appear or the charter will not be filed. In addition, by ex- press enactment, other provisions not inconsistent with the statutes may be inserted at the discretion of the incorporators. (G. C. L., § 10.) Judge Earl's opinion, already quoted, seems to indicate that this right existed before the enactment of the present permissive statutes. In any event the statutes serve to remove the doubt that might otherwise have existed and to indicate clearly the limitations that do exist. (See § 26.) The facts required by the statutes as a necessary feature of the charter application, are as follows : § 18. (i) Name. "The name of the proposed corporation." (B. C. L., § 2, subdiv. I.) The New York statute prohibits the use of the word trust, bank, banking, insurance, assurance, indemnity, guarantee^ guaranty, title, savings, investment, loan or benefit as part of the corporate name unless such company is formed under the banking or insurance law. (G. C. L., § 6.) The corporate name is frequently one of the most valu- able of the corporate assets. It is treated by the courts as a true property right of a nature similar to the trade-mark. Hig- gins Co. V. Higgins Soap Co., 144 N. Y. 462, 468 (1895). New York has attempted to prevent its initial infringement by providing that : "No certificate of incorporation of a proposed corporation having the same name as a corporation authorized to do business under the laws of this state, or a name so nearly resembling it as to be calculated to deceive, shall be filed or recorded in any office for the purpose of effecting its incorpora- tion or of authorizing it to do business in this state." (G. C. L., § 6.) 32 NEW YORK CORPORATIONS. This protects not only domestic companies but also for- eign corporations licensed in New York. There is no doubt that the Secretary of State may refuse to file a name which in his opinion falls within the prohibition of the statute. In case of a wrongful refusal, "there may be no adequate remedy to the persons or corporations claiming to be aggrieved, other than by a review of such determination by writ of certiorari." Columbia Co. v. O'Brien, loi App. Div. 296 (1905); People ex rel. Trustees v. Bd. Suprs., 131 N. Y. 468 (1892). Where, on the other hand, a name is im- properly allowed, equity will grant relief to those injured, by injunction. "Whether the court will interfere in a particular case must depend upon circumstances, the identity of the business of the respective corporations ; how far the name is a true descrip- tion of the kind and quality of the articles manufactured or the business carried on ; the extent of the business carried on ; the extent of the confusion which may be created or appre- hended and other circumstances which might justly influence the judgment of the judge in granting or withholding the remedy." C. S. Higgins Co. v. Higgins Soap Co., supra. "Courts of equity must, in such cases, assume that the public will use reasonable intelligence and discrimination with reference to the names of corporations with which they deal. * * * It is timely enough in such cases for equity to use its extraordinary powers when it appears that deception or con- fusion has in fact resulted from the use of a word or a name or when it clearly appears that such result is likely to follow." Hygeia Water Ice Co. v. The N. Y. Hygeia Ice Co., Ltd., 140 N. Y. 94, 98 (1893).* The corporate name may be changed by amendment. The procedure is, however, peculiar and complicated, involving application to the courts. (See § 72.) *See also Employers Assurance Corp. v. Employers Insurance Co. of U. S., 24 Abb. N. C. 368 (1890) ; Commercial Union Assur. Co. v. Smith, 2 N. Y. Supp. 296 (1888) ; Colonial Dames of America v. C. D. of N. Y., 29 Misc. 10 (1899). For case protecting an individual in the use of his own name, see De tong v. De Long Hook & Eye Co., 7 App. Div. 33 (1896); Meneely v. Meneely, 62 N. Y. 427 (1875). CERTIFICATE OF INCORPORATION. 33 § 19. (2) Corporate Purposes. "The purpose or purposes for which it is to be formed." (B. C. L., § 2, subdiv. 2.) Corporations are creatures of the legislature and the pur- poses of their formation are, therefore, legal only if authorized by statute. Thomas v. Company, loi U. S. 71. New York, in accord with the tendency of the more ad- vanced states, is very liberal in this respect, the Business Cor- porations Law (§ 2) authorizing the formation of corpora- tions for "any lawful business purpose or purposes other than a moneyed corporation or a corporation provided for by the banking, the insurance, the railroad and the transportation cor- porations laws, or an educational institution or corporation which may be incorporated as provided in the education law." Under this clause it is possible to secure almost as wide a field of operation for a corporation as is open to individuals or partnerships. Any lawful purpose, within the prescribed limits, and any number of such purposes may be included in a single charter. But corporations may not be formed to engage in the practice of law. (B. C. L., § 2a.) The charter purposes should be drawn with the greatest possible care, for a clumsily inserted limitation upon corporate powers or a careless omission may prove a troublesome obsta- cle, removable only by amendment. Personal considerations, business interests and the attraction of possible subscribers to stock usually determine the framing of the purpose clause. Technically, a corporation is confined strictly within the limit of its charter powers. It must be noted, however, that this doctrine has been greatly modified in this state. In prac- tice a corporation in New York may perform any act necessary to or desirable for its interests, regardless of the limitations of its charter, or the doctrine of ultra vires, if such act is not prejudicial to public interests or to the rights of others. As stated by Judge Allen in Whitney Arms Co. v. Barlow, 63 N. Y. 62, 69 (1875) : "The plea of ultra vires should not as 34 NEW YORK CORPORATIONS. a general rule prevail, whether interposed for or against a cor- poration, when it would not advance justice, but on the con- trary would accomplish a legal wrong." In later cases "public interest" seems to be the controll- ing consideration. "In the granting of charters, the legisla- ture is presumed to have had in view the public interest ; and public policy is * * * concerned in the restriction of corpora- tions within chartered limits, and a departure therefrom is only deemed excusable when it cannot result in prejudice to the pubhc or to the stockholders." Leslie v. Lorillard, no N. Y. 519, 531 (1888).* (See §73.) § 20. (3) Capital Stock. "The amount of the capital stock, and if any portion be preferred stock, the preferences thereof." (B. C. L., § 2, subdiv. 3.) The amount of capital stock is fixed by the statement thereof in the certificate of incorporation and may only be changed thereafter by amendment. No maximum limit is pre- scribed. Five hundred dollars is the minimum capitalization allowed by law. (See § 53.) The conditions of issue of any preferred or special stock should also be brought in under this clause of the charter. Wide latitude in these matters is given by the New York statutes and classification is common and is frequently desir- able. The stock clause of the articles of incorporation should be made very specific in its statement of any such preferences. (See § 76, et seq.) Preferred or special stock may be authorized only by charter provision. If not provided for in the original charter, the right, if desired, must be secured by amendment, adopted at a special meeting by vote of the holders of two-thirds of the capital stock. (S. C. L., § 61.) (See § 72.) This is a *See also Bissell v. R. R., 22 N. Y. 258 (1S60) ; Holmes v. Willard, 125 Id. 75 (1890) ; People V. N. R. S. R. Co., 121 Id. 582 (1890) ; I,inkauf v. Lombard, 137 Id. 417 (1893) ; i Cook on Corporations, g 3. CERTIFICATE OF INCORPORATION. 35 statutory change of the rule of unanimous consent that for- merly prevailed. Kent v. Quicksilver Mining Co., 78 N. Y. 159 (1879) and Campbell v. Zylonite Co., 122 N. Y. 455 (1890). § 21. (4) Shares. Initial Capital. "The number of shares of which the capital stock shall consist, each of which shall not be less than five nor more than one hundred dollars, and the amount of capital not less than five hundred dollars, with which said corporation will begin business." (B. C. L., § 2, subdiv. 4.) A "share of the capital stock is the right to partake, ac- cording to the amount put into the fund (capital), of the sur- plus profits of the corporation; and ultimately on the dissolu- tion of it, of so much of the fund thus created as remains un- impaired and is not liable for debts of the corporation." Bur- rail V. Bushwick Ry. Co., 75 N. Y. 211, 216 (1878) ; per Folger, J. There is no statutory requirement that the par value of shares of a corporation shall be uniform for all shares and classes of stock, but such is usually the case. Occasionally a preferred stock is issued at a different par value than the com- mon stock, but this is exceptional. Uniformity is. the rule established both by custom and convenience. ( See § 80. ) The amount stated in the certificate of incorporation as the capital with which the company will begin business may be fixed at any desired amount not less than $500, but once fixed, must be paid in, either in cash or property, before the corporate business may commence. (B. C. L., § 3.) As this amount may not be less than $500, it follows that that is the minimum corporate capitalization allowed in New York. (See § 74.) It is usual to fix the amount necessary for beginning business at $500 without regard to the actual sum with which it is ex- pected to start. 36 NEW YORK CORPORATIONS. § 22. (5) Location. "The city, village or town in which its principal business office is to be located." (B. C. L., § 2, subdiv. 5.) The principal office or place of business of the corpora- tion must be within the state. Its location need not appear specifically in the certificate. It is sufficient if the city, village or town is given. If in the City of New York, the borough must be included. (B. C. L., § 2.) (See § 134.) The omission to require a definite statement of the cor- porate address is a defect of the New York statutes. The exact location of the principal office of a corporation should be a matter of public record. § 23. (6) Duration. "Its duration." (B. C. L., § 2, subdiv. 6.) The duration of corporate existence in New York may be perpetual, and it is usually so stated in the certificate. It may be limited, if desired, to any term, and such limited period may be extended by charter amendment at any time prior to its termination. (See § 72.) A restriction of fifty years is im- posed on the life of companies formed by the consolidation of existing corporations. (B. C. L., § 7.) (See Ch. VI, "Cor- porate Existence.") If through inadvertence a certificate is filed without desig- nating the duration of the corporate existence, it is perpetual. (G. C. L., § II, subdiv. i.) § 24. (7) Number of Directors. (8) Names. "The number of its directors, not less than three." (B. C. L., § 2, subdiv. 7.) "The names and post-office addresses of the directors for the first year." (Id., subdiv. 8.) The directors for the first year are designated by the char- ter, not elected by the stockholders. They hold office, not necessarily for a year, but until the first annual meeting, or, CERTIFICATE OF INCORPORATION. 37 if directors are not elected at that meeting, thereafter until their successors are elected. (G. C. L., § 28.) While the board of directors must have not less than three members, it may be composed of any larger number desired. Formerly the maxi- mum number allowed was thirteen, but this limitation was re- moved in 1 901. The names and addresses of the directors who are to serve for the first year must be given. One director must be a resi- dent of the state. (G. C. L., § 34.) Unless the certificate or by-laws provide otherwise, directors must be stockholders. ( S. C. L., § 25.) Since, however, the first directors are designated by the charter and become directors "by direct command of the statute and not through election by the stockholders," they need not be stockholders. "In the nature of things there can be no stockholders at the date of incorporation." Hamilton Trust Co. V. Clemes, 163 N. Y. 423, 426 (1900). (See § 117.) § 25. (9) Subscribers. "The names and post-office addresses of the subscribers to the certificate, and a statement of the number of shares of stock which each agrees to take in the corporation." (B. C. L., § 2, subdiv. 9.) Either business or residence addresses may be given. One share of stock is a sufficient subscription to satisfy the require- ments of the statutes. All of the incorporators named in the certificate must be subscribers to the stock of the corporation and must sign and acknowledge the certificate of incorporation. (See § 27.) § 26. (10) Special Provisions. "The certificate of incorporation of any corporation may contain any provision for the regulation of the business and the conduct of the affairs of the corporation, and any limita- tion upon its powers, or upon the powers of its directors and 38 NEW YORK CORPORATIONS. stockholders, which does not exempt them from the perform- ance of any obligation or the performance of any duty im- posed by law." (G. C. L., § 10.) Under the broad language of this clause, any lawful scheme of internal management from the simplest to the most complex may be incorporated in the charter. Common pro- visions are those giving stockholders power to remove direc- tors ; securing to the corporation the right to hold and dispose of the stock of other corporations; giving the company a lien on the stock of a member indebted to it ; regulating the amount of working capital and the manner of declaring dividends; providing for cumulative voting, for committees of directors and for classification of the board of directors. It is to be noted that if it is desired to restrict meetings of the directors to the state, a specific provision to that effect must be inserted in the certificate (B. C. L., § 2), and if the directors are not to have the statutory power of adopting by-laws, its prohibition must also be included in the charter. (G. C. L., § 34.) Most of the provisions mentioned might be included in the by-laws, but the greater stability of the charter makes it advisable to prescribe any desired limitations of importance in that instrument. § 27. Execution of Certificate. The certificate of incorporation should be signed, in tripli- cate, by each of the incorporators and acknowledged, in dupli- cate, before a notary public, commissioner of deeds or a justice of the peace. In another state or country, the certificate must be acknowledged before a commissioner of deeds for New York State or any local officer authorized to take acknowledgments of deeds. In the latter case the officer's authority should be proved by proper official certificate. (See Forms 20-23 ^"^ notes thereon. ) An incorporator cannot take the acknowledg- CERTIFICATE OF INCORPORATION. 39 merits of other incorporators. People ex rel. Erie R. R. Co. v. Board of R. R. Comrs., 105 A. D. 273 (1905.) If there are but three incorporators and they come to- gether for the signing and acknowledgment of the instrument, the formality is a simple one. The three acknowledgments are taken at the one time, and one notarial certificate serves for all. If the notarial officer who acts in the matter calls on the incorporators at their offices or residences and takes their several acknowledgments, the one notarial certificate will still serve. If, however, the incorporators are numerous, live in other states, or for any other reason cannot be easily reached or assembled, the matter is more troublesome. Separate no- tarial certificates are then usually necessary for each acknowl- edgment. § 28. Filing and Recording. State. The duly executed certificate of incorporation is sent to the Secretary of State, together with the proper fees. (G. C. L., § 5.) (See § ID.) At the same time the organization tax must be sent to the State Treasurer who notifies the Secretary of State that such tax has been received. If the certificate of incorporation is in due and acceptable form, the latter official notifies the State Treasurer that such is the case and files and records the instru- ment. He then sends notice of the receipt and filing of the certificate to the party from whom it was received, and the State Treasurer also sends his receipt for the organization tax. The Secretary of State cannot file the certificate until the organ- ization tax has been paid and he has been formally notified thereof. (G. C. L., § 5 ; Tax Law, § 180.) The Secretary of State sends notice of the receipt and due record of all charters filed in his office, but does not send a copy of the charter unless it is requested and his fees there- for are paid. For certified copies these are 15 cents a folio and $1 for seal. (See Part III, Tables 1-4.) Such certified copy — 40 NEW YORK CORPORATIONS. or any copy — is not necessary to the legality of the incorpora- tion, but it affords a recognized and convenient evidence of incorporation and is therefore at times desirable. (G. C. L., § 9. ) The charge for an exemplified copy of a charter, i. e., a copy impressed both with the office seal of the Secretary of State and with the Great Seal of State, is $1 more than for the ordinary certified copy. (See Part III, Table 4, note.) Frequently a signed copy of the certificate of incorpora- tion is sent to the Secretary of State for certification at the same time as the original, in order that the corporation may have a certified office copy. The fees are the same as before, the only advantages secured being the exact duplication of the original charter and the convenience of the plan to all parties concerned. (See §§ 11, 12.) § 29. Filing and Recording. Local. As soon as the Secretary of State's notification of filing and the Treasurer's receipt for organization tax are received, the duplicate copy — signed and acknowledged exactly as was the original and with the receipt for organization tax from the State Treasurer attached — ^must be filed in the office of the county clerk in the place where the corporation has its princi- pal office. (G. C. L., § 5.) The county clerk is not permitted to file the certificate unless it is accompanied by the Treasurer's receipt for organization tax. (Tax Law, § 180.) If desired, a copy of the original charter, certified by the Secretary of State, may be filed in the office of the county clerk instead of a duplicate original. (G. C. L., § 5.) The dupli- cate original is, however, usually more convenient and less ex- pensive. (See § 13; also Part III, Tables 1-4.) § 30. Allowance. It is to be noted that the application to the state authorities for a charter is nothing more nor less than a copy of the desired charter. No petition or other application of any kind need CERTIFICATE OF INCORPORATION. 4I accompany it. If in due form it is usually allowed by the Sec- retary of State as a matter of course and the instrument then becomes the charter of the corporation which it creates. If the charter does not meet with the approval of the Secretary of State, it is returned to the applicants with a state- ment of the reasons for its refusal. If such refusal is on in- sufficient grounds and the matter is of material importance, the Secretary of State may be compelled by mandamus to file the certificate. People ex rel. Eickemeyer Field Co., 138 N. Y. 614 (1893). But see People ex rel. Davenport v. Rice, 22 N. Y. Supp. 631 (1893). "Generally, however, the importance of the matter will not justify such proceedings, and, if the official ruling cannot be changed, the purposes or other matters in question must be either omitted or so changed as to meet the views of the au- thorities. "If any required alteration in an executed charter is on some non-essential point, and all the incorporators agree there- to, it is not usually necessary to redraft and re-execute the entire instrument. The correction may be made in the original instrument and the document be then returned for acceptance in its corrected form. "If, however, the alteration be material, the better prac- tice is to have the instrument redrawn and executed afresh by the incorporators. If, however, a material alteration were made in the instrument without any re-execution, but with the consent or subsequent acceptance of the incorporators, and the charter so altered were duly allowed and filed by the state officials, it is not probable that it could later be successfully at- tacked." (Conyngton on Corporate Organization, p. 135.) An injunction restraining the Secretary of State from fil- ing an improper certificate may be obtained from the Appellate Division of the Supreme Court in the third judicial department upon notice. (Code Civ. Pro., § 605.) Matter of Comstock, 25 State Rep. 611 (1889). CHAPTER IV. BY-LAWS. § 31. Preparation. By-laws are the, permanent rules for the regulation of the corporate affairs, ranking next to the charter in authority, im- portance and permanence. They should be carefully prepared, and if a model set is used it should be thoroughly revised to meet the needs of the particular corporation. The routine de- tail of corporate procedure should be included and any other provisions which, while necessary, are not of sufficient per- manence or importance to justify inclusion in the charter. It is usual and good practice to repeat in the by-laws any details of management that have already been included in the charter or which are prescribed by the statutes. When this is done the by-laws provide a compact and convenient manual of procedure for the corporate officials, obviating frequent ref- erences to the charter or statutes. The usefulness of the by- laws for this purpose is much increased by the adoption of a clear, logical classification and arrangement. (See Forms 24 and 25.) The New York statutes expressly permit the by-laws to regulate the following matters, which if not so regulated are controlled either by statute provision or the common law. § 32. (i) Meetings and Elections. By-laws may fix the amount of stock necessary for a quorum at meetings other than those for the election of direc- tors. (See § 102.) (G. C. L., § 11, subdiv. 5.) By-laws may also fix the time and place of meeting for the annual elec- 42 BY-LAWS. 43 tion of directors. The statutes require two weeks' published notice of this meeting for the election of directors, but the by- laws may provide for additional notice. (S. C. L., § 25.) Pro- vision may be made for classification of the board, but at least one-fourth the number must be elected annually. (Id.) The manner of appointing inspectors of elections of direc- tors, subsequent to the first, who must be appointed by the board, may be prescribed (See § 108), (S. C. L., § 31), as also the mode of filling vacancies in the office of inspector. (Id.) By-laws may regulate the calling of special meetings (G. C. L., § II, subdiv. 5), other than for the election of directors. (G. C. L., § 29.) (See § loi, subdiv. c.) § 33. (2) Directors. "By-laws duly adopted at a meeting of the members of the corporation shall control the action of its directors." (G. C. L., §§ II (subdiv. 5), 43-) They may provide that directors need not be stockholders (S. C. L., § 25) and for the manner of filling vacancies in the board. (Id.) Also if it is desired that directors shall not hold meetings outside the state and no provision to that effect has been inserted in the charter, it may be included in the by-laws. (See § i2Sa.) The number of directors necessary for a quorum of the board may be fixed at not less than one-third the entire num- ber (G. C. L., § 34), and more than a majority of the quorum may be required to validate action of the directors. (G. C. L., § 43.) (See § 125c.) § 34. (3) Officers. By-laws may prescribe the powers and duties of officers and agents. (S. C. L., § 30.) This provision is very sweep- ing, allowing the usual duties of the particular officers to be varied in any way desired, except as to such matters as are pre- scribed by statute. (See § 130.) 44 NEW YORK CORPORATIONS. § 35- (4) Capital Stock. By-laws should regulate the mode of transfer of stock (S. C. L., § 50) and may fix a period of not over forty days prior to stockholders' meeting during which no transfer shall be made on the books of the company. (G. C. L., § 23.) They may prescribe any desired notice, in addition to that required by the statutes, for meetings to vote on increase or reduction of stock. (S. C. L., § 63.) (See §§ 86, loi.) § 36. Adoption. The adoption of by-laws is a function of the stockholders. In New York they have this power (G. C. L., §§ 11, 34), but by express provision of the statutes, directors also may adopt by-laws, provided they are not inconsistent with those passed by the stockholders. This allows the directors to act quickly in an emergency, but prevents them from removing any restric- tion on their actions which may have been imposed by the stockholders, or from making any material modification of the scheme of management already in force. (See §119.) Directors' by-laws are strictly supplementary to those of the stockholders and are subject to alteration or repeal by these latter. Until so altered or amended they are of equal force with those passed by the stockholders. (G. C. L., § 34.) No by-law adopted by the directors, regulating the election of di- rectors or officers, is valid unless published for at least once a week for two successive weeks (Wood v. Knapp, 100 N. Y. 109 [1885]) in a newspaper in the county where the election is to be held and at least thirty days before such election. (G. C.L., §11.) § 37. General. A by-law must be reasonable and adapted to the purposes of the corporation. If not so it is void. People v. Medical So- ciety of Erie, 24 Barb. 570, 575 (1857) ; Kent v. Quicksilver BY-LAWS. 45 Mining Co., 78 N. Y. 159 (1879) ; Cartan v. Father Matthew United B. Society, 3 Daly 20 (1869). An action cannot be maintained, however, to have a by-law declared void unless the plaintiff can show that its enforcement would work him irre- parable injury. Thomas v. M. M. P. Union, 121 N. Y. 45 (1890). By-laws are effective as to third persons only so far as they have actual knowledge of the by-law provisions. Rathburn v. Snow, 123 N. Y. 343, 349 (1890) ; Oakes v. C. W. Co., 143 N. Y. 430, 436 (1894). § 38. Observance. By-laws should be strictly obeyed. Any breach may result in an appeal to the courts by an aggrieved stockholder to in- validate action taken thereunder or to enforce the personal lia- bility that may be incurred by the offending officer or director. Direct penalties for breach are of doubtful utility. They are difficult of enforcement and in view of the restraining influ- ences above mentioned are usually unnecessary. A stockholder wishing to object to an irregularity must do so promptly or he will be estopped by his delay. Outside parties injured through failure on the part of cor- poration officials to obey the by-laws may secure indemnity from the corporation. Knox v. Eden Musee, 148 N. Y., 441 (1896). § 39. Repeal. By-laws are always subject to repeal by the stockholders in accordance with the procedure imposed by either charter or by-laws. The doctrine of vested rights, however, sometimes interferes. "A private corporation cannot repeal a by-law so as to impair rights which have been given and become vested by virtue of the by-law; and this although the power is re- 46 NEW YORK CORPORATIONS. served by its charter to alter, amend or repeal its by-laws." Kent V. Quicksilver Mining Co., 78 N. Y. 159 (1879). The powers of the directors as to by-laws are entirely subordinate to those of the stockholders (G. C. L., § 34); hence while the directors may repeal by-laws they themselves have passed, they cannot repeal by-laws adopted by the stock- holders. CHAPTER V. FIRST MEETINGS. § 40. First Meeting of Stockholders. As the first board of directors is named in the charter, and as directors have power to pass by-laws (G. C. L., § 34), the corporation may be organized without a prehminary meeting of the stockholders. Acceptance of charter will be presumed from the fact of application (Bank of the U. S. v. Dandridge, 12 Wheat. 64, 70 [1827]), and, without any antecedent action on the part of the stockholders, the board of directors may meet, adopt by-laws and elect ofificers at once, and begin active operations as soon as the amount of capital specified in the charter as that with which the corporation will begin business, has been paid. The better practice, however, is to hold a stockholders' meeting for organization. This meeting must be held within the state (Ormsby v. Vermont Copper Mining Co., 56 N. Y. 623 [1874] ), and is usually assembled as soon as possible after the charter has been filed. The allowance of the charter having acted as an acceptance of the incorporators' subscriptions, they are stockholders of the company and are therefore entitled to take part in this meeting either in person or by proxy. ( See § 81.) § 41 . Notice of Stockholders' First Meeting. There are but two methods of assembling the first meeting, — the one by unanimous waiver of notice; the other under the general provision of section 43 of the General Corporation Law, that unless otherwise required by law or the by-laws of 47 48 NEW YORK CORPORATIONS. the corporation, special meeting's of the stockholders may be called in the manner provided for the annual meeting. This involves publication of notice once in each week for two weeks immediately preceding the meeting, in a newspaper published in the county where such meeting is to be held. (S. C. L., § 25.) The notice should be signed or authorized by a ma- jority of the incorporators. The best practice is to prepare a written call and waiver of notice giving the day and hour and place of the first meet- ing and a statement of the business to be transacted ("any and all business brought before the meeting" is sufficient), and secure the signatures of all the incorporators to this instru- ment. (See Form 27.) If this plan cannot be followed, or the presence and participation of all the incorporators at the meeting, which would have the effect of a waiver of notice, cannot be secured, the meeting must be assembled by publi- cation. (See Forms 43-45.) § 42. Minutes of Stockholders' First Meeting. As a rule the first meeting of stockholders is purely for- mal, every important action having already been agreed upon. It is a common practice to prepare the minutes in advance of the meeting and to follow them as closely as possible. At times these prepared minutes are merely read to the assembled in- corporators, and, in the absence of dissent, are taken as the record of the proceedings of the meeting without formal ac- tion. At other times the minutes after their reading will be adopted "as read." These methods, though legal, are informal and irregular. The better practice is to use the prepared minutes as a guide to avoid omissions and to insure the due and proper considera- tion of necessary matters. All important actions required are actually taken by the meeting and the minutes become in fact a record of its proceedings. FIRST MEETINGS. 49 § 43. Organization of Stockholders' First Meeting. A majority of the stock subscribed for in the charter is required to constitute a quorum. If this majority is present at the first meeting, the legality of the assemblage should then be determined by an examination of the call and waiver, which, if found correct in form and signed by every incorpora- tor, should be ordered entered on the minutes, either by motion or by direction of the presiding officer. All other matters aiifecting the regularity of the meeting, viz. : the names of those in attendance, the statement that a quorum was present, and the list of proxies, if any, should also be spread upon the record. The presence of the stockholders at this first meeting may be either in person or by proxy as at any other stockholders' meeting. (See § 104.) § 44. Acceptance of Charter. The next step usually taken is the formal acceptance of the charter and an order for its entry in the minute book. The acceptance of the charter is not strictly necessary since a cer- tificate of incorporation drawn in the form required in this state is itself an acceptance of the terms of the ofier made by the general act. Fire Dept. of N. Y. v. Kip, 10 Wend. 266 (1833). The entry of the charter in the minute book as part of the record is merely a matter of convenience and good practice. It is usually entered on the first pages of the minute book. ( See Form 33. ) § 45. By-Laws. Stockholders'. The next step taken should be the adoption of by-laws. Usually the by-laws are prepared in their entirety in advance and are adopted at the first meeting, as presented, without change or comment. In the purely perfunctory meetings sometimes held, they are not even read. The safest plan, however, is to have them read and adopted, article by article. 50 NEW YORK CORPORATIONS. and then as a whole, thus preventing mistakes or unauthorized substitutions and reducing the chances of subsequent dis- agreement as to their contents. (See Ch. IV, "By-Laws.") § 46. Exchange of Stock for Property. Stockholders' Action. Where, as is very frequently the case, stock is to be issued in large amounts in exchange for property, it is wise to have the transaction approved at the first meeting of stockholders. It is the province of the directors to authorize such a trans- action, but the stockholders' approval acts to prevent any sub- sequent objection on the part of dissenting stockholders, and is therefore usually advisable. When this action is taken the stockholders adopt a resolution approving the exchange and instructing the directors to effect the same. (See Forms 29, 31, 33; also §84.) § 47. Other Business. Stockholders' First Meeting. The consideration of the exchange of stock for property usually concludes the business to be transacted at the first meeting of stockholders. If the by-laws provide for a perma- nent chairman and secretary to act at stockholders' meetings, such officers are properly elected immediately after the adoption of the by-laws, and, if present, may, with propriety, take charge of the meeting at once. In New York the adjournment of the first meeting is usually sine die. § 48. First Meeting of Directors. The directors' first meeting may be held before or after that of the stockholders, though in practice it almost invariably follows. This first meeting of the directors is merely a special meeting and, if held subsequent to the adoption of by-laws, must be called in accordance with the provisions there made for special meetings. The usual procedure is, however, the same as in the case of the organization meeting of the stock- FIRST MEETINGS. 5 1 holders, viz. : written call and waiver of notice signed by all the directors. (See Form 28.) This method of assembling a meeting is always allowable unless specifically prohibited by charter or by-laws. The call customarily, though not neces- sarily, specifies the purposes of the meeting. In the absence of such statement it will be assumed that the meeting is called to consider whatever matters come before it. Matter of Argus Co. V. Manning, 138 N. Y. 557, 578 (1893). (See § 125b.) Unless the charter or by-laws provide to the contrary, the meeting may be held without the state. The first directors' meeting is, as a rule, of the same formal, and sometimes per- functory character as that of the stockholders. Minutes may be and frequently are prepared beforehand, especially where there are dummy directors. (See Form 34.) § 49. Organization of Directors' First Meeting. The directors' meeting is organized by the selection of a temporary chairman and secretary. If a quorum is present, proof of the legality of the meeting is presented and passed upon, by-laws are adopted if necessary, and the election of officers of the company (see § 127) is in order. If these have been agreed upon in advance, it is convenient to in- struct the secretary to cast one ballot for them all. Other- wise election should be by ballot in the usual manner. The president must be elected from the board itself. Salaries of officers are usually fixed at the time of election. If no salaries are to be paid, this should be specified. The new officers, if present, take charge at once. The power to appoint necessary officers and agents has been held to include the delegation of the powers of the board during the intervals between its sittings to an executive com- mittee. Olcott V. Tioga Ry. Co., 27 N. Y. 546, 558 (1863). Where the board is numerous and composed of persons with large outside interests it is often advisable to make such provi- sion to secure proper supervision of corporate affairs. It is 52 NEW YORK CORPORATIONS. common to appoint at the same time a finance committee to facilitate the efficient management of the corporate funds. The powers of such committees should be carefully prescribed in the by-laws, as otherwise abuse of authority is possible and not uncommon. § so. Issue of Stock for Property. After the election of officers, the matter of exchanging stock for property may be conveniently considered. The pro- posal for the exchange is presented, and, if the transaction has been approved by the stockholders as suggested above (see § 46), their resolution is also placed before the board. A resolution is then usually adopted accepting the proposition for the exchange and authorizing the proper officers to receive due transfer of the property and issue stock in exchange as agreed. (See Forms 27-35.) § 51, Miscellaneous Business. Directors' First Meeting. Other business which is usually transacted at this first meeting of the board is the adoption of a form of stock cer- tificate, provision for office accommodation, the designation of a bank for deposit of corporate funds, the auditing and approval of the bills for the expenses of incorporation, ap- proval of official bonds and any other matters which are preliminary to the proper organization for business. If it is impossible to finish the necessary business at this meeting, or another meeting prior to the next regular directors' meeting is thought advisable, adjournment is taken to a defi- nite date, thus saving the trouble of calling a special meeting. CHAPTER VI. CORPORATE EXISTENCE. § 52. When Commenced. It is now well settled by an unassailable line of decisions that the charter of a private corporation is a contract between the incorporators and the state. Trustees of Dartmouth Col- lege V. Woodward, 4 Wheat. 518 (1819) ; People v. O'Brien, III N. Y. I, 49 (1888). (See § 15.) That being the case, a corporation can come into existence only when a binding contract has been concluded. The New York Business Cor- porations Law is worded as an offer : "Three or more persons may become a stock corporation * * * by making, signing, acknowledging and filing a certificate, etc." (B. C. L., § 2.) The acceptance of this ofifer is complete with the filing of the certificate by the Secretary of State, and therefore corporate existence dates from that time. The filing of the certificate in the office of the county clerk is also required by the statute, but this is not a prerequi- site to or an essential of corporate existence. Such filing must be made, but as a statutory requirement, not as a neces- sary preliminary of corporate existence. If incorporation is by private act, the same rules apply, the conclusion of the contract marking the starting point of corporate being. § 53. Beginning Business. The statutes specifically provide that the organization tax, and the filing and recording fees to the state must be paid as a prerequisite to filing of charter and to the exercise 53 54 NEW YORK CORPORATIONS. of "any corporate powers and privileges." (G. C. L., § 5.) Beyond this it is provided that no stock corporation "shall incur any debts until the amount of capital specified in its certificate of incorporation as the amount of capital with which it will be- gin business (not less than $500 [B. C. L., § 2]), shall have been paid in in money or property." (B. C. L., § 3. ) The in- tent of this provision is to require payment of the amount spe- cified before the corporation may begin business. On the other hand the corporation may not remain dor- mant indefinitely. "If any" corporation, except a railroad, turnpike, plank-road or bridge corporation, shall not organize and commence the transaction of its business or undertake the discharge of its corporate duties within two years from the date of its incorporation, its corporate powers shall cease." (G. C. L., § 36.) Under this provision the initial payment required by the charter must be made and the corporate operations commenced within two years from the date the certificate is filed, or the corporation may be dissolved, the Court of Appeals having decided that "shall cease" means "shall cease only if proper judicial proceedings are instituted by the state to secure for- feiture of the charter." Matter of N. Y. & L. Id. Bridge Co. V. Smith, 148 N. Y. 540 (1896). As has already been pointed out, the corporation comes into existence with a fully equipped board of directors, who are empowered to adopt by-laws for the. regulation of the cor- porate operations, elect officers, and begin business as soon as the required amount of capital has been paid into the treasury. § 54. Renewal. Usually the period of existence of New York corpora- tions is made perpetual and the question of renewal does not arise. Where, however, the original charter has limited the term of corporate existence, it is sometimes found desirable to extend this period or to make the corporate existence per- CORPORATE EXISTENCE. 55 petual. This may be accomplished at any time before expira- tion of the charter period, by written consent of two-thirds in interest of the stock, in which event no meeting is required, or by a two-thirds vote in interest cast at a special meeting of the stockholders called on the same notice as is required for the annual meeting (see § loi, subdiv. b), such action to be followed by the preparation of a certificate under the cor- porate seal, setting forth the consent or vote and the extension desired. This certificate must be signed and acknowledged by the president or vice-president, and the secretary or an assistant secretary, and be filed with the Secretary of State. A duplicate original or a copy certified by the Secretary of State must also be filed with the clerk of the county where the corporation has its principal place of business. (See § 72.) (G. C L., § 37.) (For fees, see Part III, Table No. 4, "Amendments to Charter.") Any corporation may, if desired, provide in its charter that it shall require a larger vote than two-thirds to secure an extended term. (G. C. L., § 2,7 ■) § 55. Forfeiture of Charter. It follows as a corollary to the proposition that a charter is a contract between the corporation and the state, that if the corporation is guilty of a breach of the charter conditions, the state and the state alone may terminate the contract. Any such forfeiture must usually be effected through judicial proceedings. The legislature, either in the laws under which the charter is granted or by subsequent enactment, might, it is true, provide that certain acts shall ipso facto terminate corporate existence. The intent to do so must, however, be perfectly clear, and the tendency of the courts is, if possible, to construe such statutes as rendering the charter voidable rather than void, making it necessary for the state to bring judicial proceedings to secure forfeiture. Matter of N. Y. & L. Id. Bridge Co. v. Smith, 148 N. Y. 540 (1896). At pres- 56 NEW YORK CORPORATIONS. ent in New York no recognized statutory grounds exist for the ipso facto dissolution of a corporation, or forfeiture of its charter powers without judicial proceedings. A breach, justifying forfeiture of the corporate charter, may result either from non-user or abuse of the corporate powers and franchises. In any of the following cases, an action to procure judgment dissolving a corporation, created by or under the laws of the state, and forfeiting its corporate rights, privileges and franchises, may be maintained by the Attorney General, in the name and in behalf of the people : (i) Where the corporation has remained insolvent for at least one year. (2) Where it has neglected or refused, for at least one year, to pay and discharge its notes or other evidences of debt. (3) Where it has suspended its ordinary and lawful business for at least one year. (4) If it has banking powers, or power to make loans on pledges or deposits, or to make insurances, where it be- comes insolvent or unable to pay its debts, or has violated any provision of the act, by or under which it was incorpor- ated, or of any other act binding upon it. (G. C. L., § loi.) An action to annul a charter may be brought only upon leave granted by the Supreme Court to the Attorney General on his written application, stating that, in his opinion, the action can or ought to be maintained (Matter of Atty. Gen- eral, 79 Hun 369 [1894]) on one of the following grounds: ( 1 ) That the corporation has offended against any pro- vision of an act, by or under which it was created, altered or renewed, or of an act amending the same. (2) That it has failed to observe provisions of law whereby it has forfeited its charter, or become liable to disso- lution, i. e., (a) That it has failed to begin business within two years from date of its incorporation. (See § 53.) (G. C. L., § 36.) CORPORATE EXISTENCE. 57 (b) That it has failed to make payment of one-half its capital stock within a year from date of incorporation. (See § 74.) (B. C. L., § 5.) (c) That it has wilfully neglected to pay its fran- chise tax within a year after notice. (Tax Law, § 203.) (3) That it has forfeited its privileges and franchises by a failure to exercise its powers. (4) That it has done or omitted an act which amounts to a surrender of its corporate rights, privileges and fran- chises. (5) That it has exercised a privilege or franchise not conferred upon it by law. (G. C. L., § 131.) The discretionary power of the Attorney General in ap- plying for leave is absolute. He may act on his own volition or on application made to him by any citizen. The court may grant or refuse leave, in its discretion, and its decision is not reviewable. People v. B. S. & C. Co., 131 N. Y. 140 (1892). In cases where the statute expressly imposes the penalty of forfeiture for certain offences, the court has no discretion but must declare the charter void upon proof of the facts. But in other cases something more than a mere ultra vires act must be proven. To justify forfeiture of corporate existence "the state, as prosecutor, must show on the part of the cor- poration accused some sin against the law of its being which has produced, or tends to produce, injury to the public. The transgression must not be merely formal or incidental, but material and serious, and such as to harm or menace the public welfare; for the state does not concern itself with the quar- rels of private litigants. It furnishes for them sufficient courts and remedies, but intervenes as a party only where some public interest requires its action." People v. N. Riv. S. Ref. Co., 121 N. Y. 582 (1890). (See § 73.)* • For details of procedure, see G. C. L., U 130-136, 304 ; also People v. Broadway R. R., 56 Hun 45 (1890) ; People v. N. Riv. Sugar Ref. Co., 121 N. Y. 582 (1890) ; People v. B. S. & C. Co., 131 N. Y. 140 (1892). 58 NEW YORK CORPORATIONS. § 56. Dissolution. The statutory method of dissolution is frequently disre- garded in actual practice. If an enterprise proves unsuccess- ful and no material assets exist, the corporate organization is abandoned and as there is nothing to be gained by procedure against the practically defunct corporation, it sinks out of sight unnoticed save by unpaid but helpless creditors. If as- sets exist and the number of stockholders is small, they arrange matters to their mutual satisfaction and disband without for- mality, and, if creditors are paid in full, there is no one to com- plain that dissolution was irregular. As a rule, however, formal dissolution is desirable. Be- fore the corporation has begun business and before the pay- ment of any part of its capital stock, the incorporators may surrender the corporate rights and franchises by signing, veri- fying and filing in the office of the Secretary of State and of the clerk of the county where the charter is filed a certificate setting forth the names of the incorporators, that no part of the capital has been paid, that there are no liabilities, that its business has not been begun, and that the corporate rights and franchises are thereby surrendered, with proof of the facts set forth, and thereupon the corporation shall be dissolved. (G. C. L., § 220.) After the corporation has begun business dissolution may be effected without judicial proceedings by the following pro- cedure (G. C. L., § 221) : A special meeting of the board of directors is called on three days' notice, and a majority of the whole board adopts a resolution thereat recommending dissolution. The directors then call a stockholders' meeting not less than thirty nor more than sixty days after their own meeting. Notice of the time and place of such meeting must be published at least once a week for three weeks successively next preceding the time ap- pointed for holding such meeting, in one or more newspapers published and circulating in the county where the principal CORPORATE EXISTENCE. 59 office is situated. On or before the first day of publication a copy of the notice must be served personally on each stock- holder, or mailed to his last known office address. (See § loi, subdiv. h. ) The stockholders' meeting must be held in the city, town or village where the last preceding annual meeting took place, and, if necessary, it may be adjourned by consent of a major- ity of those present, from time to time, if due notice of such adjournment is published in the same papers in which the orig- inal call appeared. An approving vote of two-thirds of the outstanding stock must be cast at such meeting to secure dissolution. If such vote is obtained, the following papers are then prepared and filed with the Secretary of State. (See Forms 95-98.) (i) A statement showing compliance with the statute requirements, accompanied by a written consent to such disso- lution signed by all the stockholders voting in favor thereof and accompanied by all proxies voted upon. The consent must be attested by the secretary or treasurer and the president or vice-president. (2) A statement of the names and residences of the then existing board of directors and the names and residences of the officers of the corporation, duly verified by either the secretary, the treasurer or the president. Upon receipt of these papers in due form, the Secretary of State issues, in duplicate, a certificate of their filing. One copy of this certificate must be filed with the clerk of the county where the principal place of business is located, and a copy must be published, once a week for two weeks, in one or more newspapers published and circulated in the county of the prin- cipal office. The dissolution of the corporate organization is then complete. No fees are paid to the Secretary of State except $1 each for the certificates of filing. The fee to county clerk for filing 60 NEW YORK CORPORATIONS. each certificate is 6 cents. lo cents per folio for recording is also exacted by the county clerk. The directors are trustees to wind up the business. All corporate liabilities must first be provided for. Then, if any property is left, the directors may dispose of it to the best advantage for cash and distribute the proceeds among the stockholders pro rata, or, with the consent of two-thirds of the stockholders, may sell the property and business to any cor- poration engaged in carrying on the same general business in the state and accept the purchase price thereof in the stock or bonds of such corporation for distribution among the stock- holders in lieu of money. Dissenting stockholders may secure appraisal of their stock and may sell their stock to the cor- poration at the value determined if they apply to the Supreme Court within sixty days after mailing of notice of the proposed sale. (G. C. L., § 221.) When dissolution is advisable but cannot be effected with- out judicial proceedings, a majority of the directors may of their own motion present a petition to the Supreme Court, praying for an order of dissolution (G. C. L., § 170), and must do so if a majority in interest of the stockholders so direct. (G. C. L., § 171.) In case the directors or stock- holders are equally divided as to the advisability of dissolu- tion, any director or any stockholder may present a petition therefor. (G. C. L., § 172.) The petition for voluntary dissolution (see Forms 99-102) must be verified and must set forth in detail certain prescribed infoi-mation. (G. C. L., § 174.) It must be presented at a special term of the Supreme Court held within the judicial district embracing the county where the principal office of the corporation is located. (G. C. L., § 176.) It is of the utmost importance that all papers in the proceedings be served upon the Attorney General, as orders granted without such service are void. (G. C. L., § 312.) Also no order or judgment may vary in any material respect from the proposed order or CORPORATE EXISTENCE. 6 1 judgment served upon the Attorney General unless the Attor- ney General appears on the return day and is heard in refer- ence thereto. (Id.) The Attorney General may accept short notice. In re Peekamoose Fishing Club, 151 N. Y. 511 (1897). It is discretionary with the court to either entertain or dismiss the petition when it has been presented by direction of the stockholders, or by a director or stockholder, in case of an equal division of opinion among the directors or stockholders as to the advisability of making application for dissolution. In cases where the petition is presented by a majority of the directors, the court must grant an order to show cause why the corporation shall not be dissolved. (G. C. L., § 178.) (See Form 103.) The return may be before the court or be- fore a referee named in the order at a date not less than six weeks after the granting thereof. (G. C. L., § 178.) The order must be published at least once a week for three weeks immediately preceding the return day in one or more newspapers specified in the order, published in the city or coun- ty where such order is entered. (G. C. L., § 179.) The order must be served upon the scheduled creditors, stockholders and holders of uncompleted contracts of the corporation ten days before the return day if service is personal, or twenty days before if served by mail. (G. C. L., § 180.) It must also be entered and all papers be filed in the county where the principal office of the corporation is located, within ten days after the order is made. (G. C. L., § 181.) At any stage of the pro- ceedings the court may appoint a temporary receiver (G. C. L., § 182), and at any time thereafter may enjoin creditors from bringing suit. (G. C. L., § 184.) If the court decides that a proper case for dissolution has been presented, a final order is granted dissolving the corpora- tion and appointing one or more receivers of its assets. (See Form 108.) If the corporation is solvent, the court may dis- pense with receivers and provide in the final order for the dis- tribution of the corporate assets. (G. C. L., § 191.) CHAPTER VII. CORPORATE POWERS. § 57. General. Corporations have only such general powers as are ex- pressly or impliedly conferred upon them by the incorporating acts. (G. C. L., § 10.) Barnes v. Bank, 19 N. Y. 152. Judges and text writers at an early date maintained that certain pow- ers deemed by them to be essential to corporate existence were "implied" in every grant of incorporation. Thomas v. Dakin, 22 Wend. 9 (1839). The New York statute has reflected this judicial conception of the corporate necessities in a grant of enumerated powers to all domestic corporations. (G. C. L., § II.) (See § 16.) These powers are as follows: § 58. (i) To Have Succession. All corporations have succession for the charter period, or perpetually when no period is specified. (G. C. L., § 11, subdiv. I.) The term "succession" does not refer to cor- porate existence but means that the "corporation" is distinct from its members and is not afifected by changes in their per- sonnel. This is a characteristic feature of the corporation and is indispensable to corporate existence. It enables the cor- poration to continue unchanged, despite the mutations of its membership. In it "consists the essence and great value of these institutions." Thomas v. Dakin, supra. § 59- (2) To Appoint Officers and Agents. Every corporation may appoint such officers and agents as its btisiness requires and fix their compensation. (G. C. L., § II, subdiv. 4.) (See § 127.) 62 CORPORATE POWERS. 63 This is an essential power since the impersonal character of a corporation makes direct action impossible. The subject of officers is treated in detail in Chapter XII, "Officers." § 60. (3) To Make By-Laws. Corporations may make by-laws not inconsistent with existing law. (G. C. L., § ii, subdiv. 5.) Important details which may be provided for in the by-laws are enumerated in the statute. (See Chap. IV, "By-Laws.") § 61. (4) To Have a Seal. Corporations may adopt a corporate seal and change the same at pleasure. (G. C. L., § 11, subdiv. 2.) Seals have lost so much of the importance attached to them at common law that this power, once one of the most cherished of corporate possessions, has sunk to comparative insignificance. Formerly the seal was either in itself the cor- porate signature or was an essential feature of the same. Now it is well settled that a corporation need use a seal only in cases where an individual is required to do so. Leinkauf v. Caiman, no N. Y. 50, 54 (1888); Valente v. International Milling Co., 1 19 A. D. 127 ( 1907). It is usual and good prac- tice, however, to affix the seal to all corporate contracts and other instruments of importance. A seal will never lessen the legal effect of a document and the added impressiveness it gives to a transaction is occasionally very desirable. The statute requires that the seal be used on stock certificates. (S. C. L., § so.) The seal may be of any form, and bear any inscription, name or device desired. In practice the name of the corpora- tion and the state and the year of incorporation almost in- variably appear upon the face of the seal. The form of the seal and the matter upon it are usually fixed by the by-laws. The custody of the seal is as a rule given to the secretary. 64 NEW YORK CORPORATIONS. § 62. (5) To Acquire, Hold and Dispose of Property. Corporations may acquire, hold and dispose of all prop- erty necessary for corporate purposes, subject to any limita- tions prescribed by law. (G. C. L., § 11, subdiv. 3.) No restrictions have been imposed on the property holding power of stock corporations, and they may exercise it, within the limits of the corporate purposes, as freely as may an indi- vidual. This applies to both real and personal property. It is an elementary proposition that corporations, though created for a limited term, may hold and convey all necessary property in fee simple. It was established in this state at an early date. Nicoll V. N. Y. & Erie Ry., 12 N. Y. 121 (1854) ; People v. Mauran, 5 Den. 389 (1848). Whether any particular realty is necessary for the corporate purposes is a question of fact, with the presumption in favor of the corporation. Nicoll v. Ry., supra. A corporation may issue stock full-paid in ex- change for property, and, in the absence of fraud, the judg- ment of the directors as to the value of the property purchased is conclusive and the stock will be held full-paid. (S. C. L., §55.) (See §84.) § 63. Power to Hold Property in Other States. Section 14 of the General Corporation Law in terms permits domestic corporations to hold property in other states. It is scarcely necessary to call attention to the fact that whether they really have such power depends upon the law of the juris- diction where they seek to exercise it, the New York statute having no extra-territorial efifect. Briscoe v. So. Kansas Ry., 40 Fed. 273 (1889). It has been decided by the United States Supreme Court, however, that the comity between the states raises the presumption that a corporation of one state, not for- bidden by the law of its being, may acquire property in another unless it is prohibited from so doing either in direct enactments CORPORATE POWERS. 65 of the latter state, or by its public policy deducible from the general course of legislation or from the settled adjudications of its highest court. Cowell v. Springs Co., loo U. S. 55 (1879) ; Christian Union v. Yount, loi U. S. 352 (1879). § 64. Power to Hold Its Own Stock. A corporation may not impair its capital by purchases of its own stock. If such a purchase is made, the corporate assets are thereby, temporarily at least and until the stock is resold, reduced, and the security to which creditors are legally entitled is correspondingly reduced. The reason for this rule fails where net profits are used for such purchases, and, in the absence of improper preferences of stockholders, or other fraud, there is no reason why the corporate earnings should not be applied to the reduction of its outstanding stock instead of being distributed as dividends. Lowe v. Pioneer Thresh- ing Co., 70 Fed. Rep. 646 (1895). The right of a corporation to take shares of its own stock as security for or in payment of a debt is well settled. (S. C. L., § 28.) Bank v. Bruce, 17 N. Y. 507 (1858). A corporation may also take its stock by way of gift or bequest. Lake Superior Iron Co. v. Drexel, 90 N. Y. 87 (1882). Stock held by the corporation which issues it has none of the usual rights and powers. It cannot be voted (ex parte Holmes, 5 Cow. 426 [1826]), nor is it entitled to dividends. It does not necessarily merge and become unissued stock, but may be kept outstanding in the hands of trustees or on the books of the company and sold at its market value by order of the directors. Vail v. Hamilton, 85 N. Y. 453 (1881), Directors authorizing the purchase of the company's stock, except from net profits, thereby reducing the capital, are guilty of a misdemeanor. (Pen. Law, §664.) § 65. Power to Hold Stock of Other Corporations, Early cases in this state settled the common law right of corporations to accept stock of other companies in payment 66 NEW YORK CORPORATIONS. of or as security for debts. Talmadge v. Pell, 7 N. Y. 328 (1852). The power to deal in stocks beyond this requires express statutory authority. Milbank v. Ry., 64 How. Pr. 20 (1882). This authority may be secured under § 52 of the Stock Corporation Law, which provides that corporations, except moneyed corporations, may obtain the unrestricted right to deal in stocks and bonds by suitable provision therefor in their original or amended certificates of incorporation. In the absence of such charter provision, the statute still confers a limited power, confining it to the purchasing, acquiring, holding and disposing of stocks and bonds of companies en- gaged in the same general business as that of the purchasing corporation, or engaged in the manufacture, use or sale of property, or in the construction or operation of works neces- sary or useful in its business, or in which, or in connection with which, the manufactured articles, product or property of such corporation are or may be used. § 66. Status of Holding Corporations. When one corporation holds stock in another, the direc- tors or officers of the former are eligible as directors in the latter company, and the holding company has all the rights of an individual stockholder of the other corporation. (S. C. L., § 52.) Where a corporation owns all the stock of another en- gaged in the same general business, it may by due procedure guarantee the bonds of the subordinate company. (S. C. L., § 8.) (See § 68.) It is well settled that a corporation may own all the stock of another, and yet the two may continue as distinct com- panies. Einstein v. Rochester Gas & Electric Co., 146 N. Y. 46 (1895). If the power of purchasing stock is used by a corporation to stifle competition, it is illegally exercised. The purchase of stock for such purposes will be set aside and proceedings, in CORPORATE POWERS. ' 67 the nature of quo warranto, may be instituted by the state to secure forfeiture of the charter of the offending corporation. People V. N. R. S. R. Co., 121 N. Y. 582 (1890) ; Minn. v. Northern Securities Co., 184 U. S. 199 (1902). § 67. Power to Borrow Money. Corporate Bonds. Mortgages. Stock corporations may borrow money necessary for their business or for carrying out their chartered purposes and may issue and dispose of their obligations secured by mortgage on their property for any amount so borrowed. (S. C. L., § 6.) They may not plead usury when sued for debt. (Gen'l Bus. Law, § 374.) Corporate mortgages, except purchase money mortgages, must be authorized by holders of two-thirds of the stock, by a vote given at a special meeting called on the same notice as is required for the annual meeting (see § loi, subdiv. c) or by written assent of a like amount of stock without a meeting. (See Forms 11 5-122.) This latter provision is a statutory modification of the general rule that action of the stockholders must be taken at regularly assembled meetings. In either case, the president or vice-president and the secretary or an assistant secretary must make and acknowledge a certificate, under the corporate seal, showing that the mortgage has been duly authorized by the stockholders, and must file the same in the office of the clerk or register of the county where the principal ofHce of the company is located. (See Chap. XXVIII, "Bond Issues," for detailed procedure and forms.) The directors' recital in a mortgage, publicly recorded, that the assent of stockholders to the bond issue has been properly obtained, is presumptively true. Any person may purchase bonds secured by the mortgage on the faith of such representations and as to him they will hold. If any such mortgage remains on record for a year, the consent of stock- holders is conclusively presumed as to bondholders for value 68 NEW YORK CORPORATIONS. who have received interest according to the terms of the agreement. (S. C. L., § 7.) The directors may, when authorized by a consent of the stockholders similar to that required for a mortgage, confer upon bondholders the right to convert the principal of the debt into corporate stock at any time from two to twelve years after the date of the bonds. The directors may pre- scribe the manner of making the conversion and the conditions upon which it may take place. If the authorized capital stock is insufficient to meet the conversion when made, the directors must increase the capital stock to the required amount by causing to be filed with the Secretary of State and with the clerk of the county where the principal place of business is situated, a certificate, under the corporate seal, subscribed and acknowledged by the president and secretary and setting forth : ( 1 ) A copy of the mortgage or resolution of the direc- tors authorizing the issue of such bonds. (2) That the holders of not less than two-thirds of the capital stock of the corporation duly consented to the execution of such mortgage or resolution of directors authorizing the issue of such bonds by the corporation. (3) A copy of the resolution of the directors of the corporation authorizing the increase of the capital stock to the amount necessary to effect the conversion. (4) The amount of capital theretofore authorized, the proportion therof actually issued, and the amount of the increased capital stock. The increase is authorized as soon as this certificate is properly filed. (S. C. L., §6.) A fee of one-twentieth of one per cent, upon the amount of increase must be paid the State Treasurer before the certificate will be filed. (Tax Law, § 180.) § 68. Power to Guarantee Debts of Other Corporations. A corporation owning the entire capital stock of another company may guarantee the bonds of this other company if CORPORATE POWERS. 69 two-thirds of its own stock assents. Any stock corporation, in pursuance of a unanimous vote of its stock at a special meeting called by written notice signed by a majority of the directors and served upon each stockholder of record person- ally or by mail at least sixty days prior to the meeting, may guarantee the bonds of another domestic corporation engaged in the same general business. (S. C. L., § 8.) (See § Qod.) § 69. Power to Do Business in Other States. This power is recognized though not expressly conferred by the statutes. (B. C. L., § 2; G. C. L., § 14.) It may be obtained, subject, of course, to the regulations of the jurisdic- tion where exercised, by express charter provision, if desired, and the organization of corporations under the New York statutes to conduct business outside the state is even encour- aged by the adjustment of the franchise tax on a basis of capital employed within the state. (See §§ 138, 179.) § 70. Consolidation of Corporations. Two or more domestic corporations engaged in the same kind of business may consolidate (Cameron v. Water Co., 133 N. Y. 336 [1892]), and form a new corporation possessing the joint rights, franchises and property, and subject to all the obligations of the constituent companies. (B. C. L., §§ 7-1 1.) To effect consolidation, the respective corpora- tions enter into an agreement signed by a majority of each board of directors and under their corporate seals, setting forth (B. C. L., § 7) : (i) The terms and conditions upon which con- solidation is to be effected. (2) The mode of carrying it into effect. (3) The name of the new corporation. (4) The number of directors. (5) The names and post-office addresses of the directors for the first year. 70 NEW YORK CORPORATIONS. (6) The term of its existence, which shall not exceed fifty years. (7) The name of the town or towns, county or counties in which its operations are to be carried on. (8) The name of the town or city and county in this state in which its principal place of business is to be situated. (9) The amount of the capital stock not exceed- ing the fair aggregate value of the property, franchises and rights of such corporations. (10) The number of shares. (11) The manner of distributing such capital stock among the holders thereof. (12) If one or more of the consolidating corpora- tions has been organized for the purpose of carrying on any part of its business outside of New York, the agree- ment shall so state. (13) Any other particulars the parties deem neces- sary, but no provision may be inserted to deprive non- assenting creditors of any rights against the original companies. Matter of Utica Brewing Co., 154 N. Y. 268 (1897). After the agreement is completed, special meetings of the stockholders of the several corporations must be called, upon at least two weeks' notice, specifying the time, place and object of the meeting, such notice to be mailed to each stockholder and published for two successive weeks in one of the news- papers in each of the counties of this state in which the several corporations have their places of business. The proposed agreement must be submitted to each meet- ing and be voted on by ballot. If it receives the approval of two-thirds in interest of the stock of each company, the agree- ment is ratified. The secretaries of the several meetings must make sworn copies of the proceedings in duplicate which must be attached to duplicate copies of the agreement. One set of papers must be filed with the Secretary of State and the other with the clerk of the county, within the state, where the new corporation's principal office is established. (B. C. L., § 8.) CORPORATE POWERS. 7 1 The filing and recording fees are the same as on an original incorporation, viz. : to Secretary of State, $io for filing and 15 cents per folio for recording; to county clerk, 6 cents for filing and lo cents per folio for recording. If the capital stock of the new corporation exceeds the aggregate capital stock of the constituent companies, an organization tax of one-twentieth of one per cent, on such excess must be paid the State Treasurer. Any dissenting stockholder may, at the meeting or within twenty days thereafter, object to the consolidation and demand payment for his stock, and within sixty days after the consoli- dation takes effect may apply to the Supreme Court at special term for the appointment of three appraisers to fix the value at which the new corporation must buy in his stock and the man- ner in which payment therefor shall be made. Trask v. Plow Works, 6 Hun 236 (1875). Where consoHdation is voted by ninety per cent, of the stock and a dissenting stockholder fails for sixty days to take advantage of his privilege to retire, the corporation can force him out by making application as above, with payment of the amount determined by the ap- praisers. (B. C. L., §8.) (For evidence of consolidation, see G. C. L., § 9.) § 71. Merger. If a domestic, or foreign corporation authorized to do business in the state, owns all the stock of another corporation organized for or engaged in a business similar or incidental to that of the holding company, the latter may file with the Secretary of State a certificate of ownership under its cor- porate seal and a copy of a resolution of its directors to merge such other corporation. The property, franchises and liabili- ties of the subordinate company thereupon pass to said holding corporation in the same manner as in case of consolidation. (S. C. L., § 15.) (For fees, see Part III, Table 4.) ^2 NEW YORK CORPORATIONS. § 72. Amendment of the Charter. In New York almost any right, power or privilege may be attained by amendment that might have been secured through the original charter. Procedure to secure any such amendment varies with the nature of the change desired. The usual amendments and the methods prescribed in each case are outlined on the following pages. It is to be noted that when action is required of the stock- holders, such action must always be taken at a duly assembled stockholders' meeting, except in the few cases where the statutes specifically provide that a consent of the stockholders may be expressed in writing without a meeting. Also when a meeting is requisite it must always be called in strict accord with statutory and by-law requirements unless these require- ments are waived by a written instrument signed by every stock- holder entitled to be present at such meeting. In any of the following cases where publication of notice of meeting is required, such publication must be made in a paper published in the county in which the principal ofifice is located, and if service by mail is required, the notice must be mailed to every stockholder at his last known post-office ad- dress. (a) To Secure New Purposes of Same General Character. Amendment must be authorized by major- ity vote of directors and by vote of at least three-fifths of the capital stock, cast at a meeting specially called for that purpose in accordance with any by-law requirements as to special meetings. Notice of such meeting must state time, place and object, be signed by the president or vice-president and secretary and be published once a week for two successive weeks, and be served by mail two weeks or personally five days before the meeting. The amended certificate must recite the facts, be signed by the president and secretary and must be accompanied by a copy of the proceedings of the special meeting, veri- fied by the oath of a director present. (S. C. L., § 18.) (See § 72a for filing requirements.) CORPORATE POWERS. 73 (b) Increase of Capital Stock. Amendment must be authorized by a majority vote of the stock at a meeting specially called for the purpose. Notice of meeting must state time, place and object and the amount of increase; must be signed by the president or vice-president and secretary ; be published once each week for two successive weeks, and be served by mail two weeks, or personally five days before the meeting. Unanimous written con- sent of the stockholders to the amendment will obviate the necessity of a meeting. Certificate must recite the facts, show authorized capitalization, amount thereof issued and the new capitalization, and be "made, signed, verified and acknowledged" in duplicate by the chairman and secretary of the meeting. Organization tax of 50 cents per $1,000 of increase must be paid to State Treas- urer. Proceedings of meeting or consent must be entered on the minutes of the corporation. (S. C. L., §§62, 63, 64.) (See § 86; also Forms 84, 85.) (See § 72a for filing requirements.) If increase is by consent of the stockholders, such consent must be signed by them in person or by proxy, and as a matter of practice, have an- nexed thereto an affidavit of the custodian of the stock book that the parties so consenting are the holders of record of the entire issued and outstanding capital stock. ( See Form 84. ) The old stockholders have a right to purchase the new stock pro rata before it may be offered to outside investors. Stokes v. Continental Trust Co., 186 N. Y. 285 (1906). (c) Decrease of Capital Stock. Same as for in- crease of capital stock except that certificate, executed in duplicate, must state in addition the whole amount of the ascertained debts and liabilities of the corporation and must have endorsed upon it the certificate of the comp- troller that the reduced capital is in excess of the ascer- tained debts and sufficient for the proper corporate pur- poses. Comptroller's fee for each copy of certificate, $1. (S. C. L., §§ 62, 62>, 64.) (See § 86; also Forms 84, 85.) If the corporate stock is classified it must, in case of decrease, be so reduced as not to disturb the proportionate 74 NEW YORK CORPORATIONS. interest of the various classes. Page v. American & British Mfg. Co., 129 App. Div. 346 (1908). (d) Increase or Decrease of Numberyof Shares. As for increase of stock, except that a two-thirdi vote of all stock duly represented at the meeting is required and certificate, instead of details as to amount of capital stock, must show original number of shares, number issued and outstanding and increase or decrease of number. (S. C. L., §65.) (See §80.) (e) Change of Number of Directors. Must be authorized by majority vote of the stock at meeting held on two weeks' written notice served personally or by mail. Proof of service of notice mus£ be filed in office of corporation at or before time of meeting. Proceed- ings must be entered on minutes, and transcript thereof, verified by the president and secretary of the meeting, be filed as was original certificate. Unanimous written consent of the stockholders will obviate the necessity of meeting, but such consent must have annexed thereto an affidavit of the custodian of stock book that the signers represent the entire capital stock and must then be filed as the verified proceedings are when the action is taken at a meeting. (S. C. L., § 26.) (See § 113; also Forms 86-89.) The number of directors is not reduced until the requirements as to filing have been complied with. Matter of Westchester Trust Co., 186 N. Y. 215 (1906). (f) Change of Location of Principal Office. Must be authorized by a majority vote of the stock at a special meeting duly called for that purpose, or without a meeting by unanimous written consent of all the stock- holders, such written unanimous consent to be duly ac- knowledged and filed in the office of the Secretary of State. The certificate of amendment must be signed and sworn to by the president, secretary and a majority of the directors and state the name of the corporation, the city, town or county where office was originally located, and to which it may subsequently have been changed; the new location desired and that it proposes to actually conduct its business there and that such change has been duly authorized. The names and residences of the direc- CORPORATE POWERS. 75 tors must also be included and the duly executed certifi- cate must then be filed with the clerks of counties where office was located and to which it is removed and also with the Secretary of State. (S. C. L., § 13.) (See § 134; also Forms 79-81.) (g) Classification of Stock. Requires a two- thirds vote of stock at special meeting called on notice as required for annual meeting, viz. : two weeks publi- cation and such other notice as prescribed by the by-laws. A certificate of the proceedings of such meeting must be signed and sworn to by the president or vice-president and secretary or assistant secretary, and must be filed as was original certificate. (S. C. L., §61.) (See ^77; also Forms 82, 83, 85.) (h) Extension of Corporate Existence. Re- quires the consent of two-thirds of the stock given by vote at a meeting called as is annual meeting, or such consent may be given in writing, and no meeting is then required. The certificate of amendment must state that such consent was given and specify the manner in which it was given, and be subscribed and acknowledged by the president or vice-president and the secretary or an assistant secretary, under the corporate seal, and be filed as was the original certificate of incorporation. (G. C. L., § 37-) (See § 54.) (For notice of annual meeting, see § loi.) (i) Change of Corporate Name. Though not specifically so prescribed, except for banking, insurance and railway corporations, a change of name is usually authorized by resolution of the directors. Petition for change must be made at a special term of the Supreme Court in the judicial district where the principal office is located. (G. C. L., §60.) The petition must be in writing, be signed by the petitioner, and be verified as is a pleading in a court of record, by the official affixing the corporate signature. (Id., §61.) It must state the present name of corporation, the name to be assumed and must specify the grounds of the application (Id.), and must have annexed thereto a certificate of the Secre- tary of State that the name proposed is not the same, or so nearly the same, as that of another domestic corpora- 76 NEW YORK CORPORATIONS. tion as to be calculated to deceive. (G. C. L., § 60.) A copy of the petition and notice of motion must be filed with Secretary of State, which has the effect of reserving the proposed name for the applicant corporation until three weeks after date of motion, or any duly notified adjourn- ment thereof. (Id., § 62.) Outside of New York City notice of the presentation of petition must be published once each week for three successive weeks in a paper of every county in which the corporation has a business of- fice. In the city and county of New York publication must be made for a similar period in two daily news- papers published in the county. (Id.) Within ten days of entry thereof, the order granting the change and the papers on which the order is granted must be filed with the clerk of the county of the principal office, and a certi- fied copy be filed with the Secretary of State. Also with- in the same period, publication of the order must be begun and continued once each week for four successive weeks in a paper designated by the order. (G. C. L., § 63.) Within forty days of the entry of order, affi- davit of publication thereof must be filed in the office in which the order is entered and in any other offices in which a certified copy of order was filed. (Id., § 64.) (See Forms 75-78.) Fees to county clerk are 10 cents per folio for recording order, 6 cents for filing and 8 cents per folio for certified copy. For recording affidavit of publication, 10 cents per folio and 6 cents for filing same. Fees to Secretary of State, $1 for certificate that name does not conflict, and 15 cents per folio for recording order. Informalities or obvious defects in the original, amended or supplemental certificate of incorporation may be corrected by an amended certificate which may be filed either by the incorporators or directors. (G. C. L., § 7.) The Supreme Court, on notice to the Attorney General, and upon proof that a charter does not truly set forth the object and purposes of the corporation, may amend it to conform to the intentions of the parties. (Id.) (For examples of Charter Amendments, see Forms 75-89.) (For fees, see generally Part III, Tables 1-4.) CORPORATE POWERS. ']'] § 72a. Filing and Recording Charter Amendments. In each case of charter amendment specified in the pre- ceding section, save when otherwise therein set forth, the certificate of amendment, or certified proceedings, must be filed for record with the Secretary of State and with the clerk of the county of the principal office, as in the case of an original certificate. (G. C. L., § 5.) The fees to Secretary of State for recording are 15 cents per foHo of 100 words; to the county clerk, 10 cents per folio for recording and 6 cents for each instrument filed. No filing fee is paid the Sec- retary of State, nor is any organization tax payable to the State Treasurer, except on increase of capital stock. § 73. Ultra Vires Acts. Reference has already been made to the relaxation in practice of the doctrine that a private corporation may exer- cise only those powers expressly granted or necessarily im- plied. (See § 19.) Many acts which are not permissible under this rule are daily consummated. The assent of stock- holders and the lack of injury to creditors leaves the state the only party competent to complain, and where the business is private in its nature the courts will not decree forfeiture, un- less it is clearly shown that some public injury has resulted. Kent V. Quicksilver Mining Co., 78 N. Y. 159, 186 (1879); People V. N. R. Sugar Ref. Co., 121 N. Y. 582 (1890). Political contributions by corporations are expressly for- bidden. (G. C. L., § 44.) CHAPTER VIII. CAPITAL STOCK. § 74. Capital Stock. Statute Requirements as to Payment. "Capital stock" must be distinguished from "capital." "The capital of a corporation consists of its funds, securi- ties, credits and property of whatever kind which it possesses." Christensen v. Eno., 106 N. Y. 97, 100 (1887), Andrews, J. The "capital stock" is the total amount of stock as fixed by the charter of the corporation which it may issue in ex- change for the money or property paid in by its subscribers. It is the interest which the latter secure in the corporate enter- prise by such payment. At the outset if a company issues all its shares at par for actual value, the capital stock and the capital are equal. (Id.) It is apparent, however, that though the former is a fixed amount established by the terms of the charter and not to be changed except by charter amendment, the latter consisting as it does of actual assets, may vary great- ly with the ordinary vicissitudes of business and may be either greater or less than the capital stock. One-half the total authorized capital stock of a New York corporation must be paid in within one year from its incorpora- tion and a certificate of such payment must, within thirty days thereafter, be signed and acknowledged by a majority of the directors, be verified by the president or vice-president and sec- retary or treasurer and be filed in the offices where the certifi- cates of incorporation were filed. (B. C. L., § 5.) (See Form 63.) The remainder of the capital stock may be issued and paid for at the discretion of the corporation, or may be left un- issued if desired. (See § 75.) 78 CAPITAL STOCK. 79 § 75. Amount of Capitalization. The "capitalization" of a corporation is the amount of capital stock it is authorized to issue in exchange for value. Under the New York statute this may be fixed in the charter at any amount not less than $500 at the discretion of the incor- porators. (See § 20.) The state interposes no objection to any amount, no matter how large, provided that the required fees are paid. In fixing the capitalization it must, however, be borne in mind that at least one-half its amount must be paid within the first year. (B. C. L., § 5.) It is not necessary to issue the full amount of authorized stock at any one time or by any definite time. Greenpoint Sugar Co. v. Whitin, 69 N. Y. 328 (1877). The require- ments of the New York statute are satisfied if one-half is paid within one year from the date of incorporation. (B. C. L., § 5.) People V. Cement Co., 131 N. Y. 140 (1892). The balance may remain unissued indefinitely. This enables a cor- poration by capitalizing at more than its present needs, to pro- vide for future expansion. Stock may then be issued as needed, whereas, without this provision, power to increase the capi- tal would have to be secured by charter amendment. No tax of any kind is imposed on unissued stock. The power of a corporation to issue stock is strictly limit- ed to the amount authorized by its charter. Any excess is void. Lathrop v. Kneeland, 46 Barb. 432 (1866) ; N. Y. & N. H. Ry. V. Schuyler, 34 N. Y. 30 (1865). § 76. Classes of Stock. Common and Preferred. "Every domestic stock corporation may issue preferred stock and common stock and different classes of preferred stock, if the certificate of incorporation so provides, or by the consent of the holders of record of two-thirds of the capital stock, given at a meeting called for that purpose upon notice such as is required for the annual meeting of the corporation." (S. C. L., § 61.) (See Forms 82, 83, 85.) 8o NEW YORK CORPORATIONS. Common stock is that which enjoys no special privilege as to corporate dividends or assets. Preferred stock is that which has such preferences. The use of preferred stock is gen- eral. The classifications possible under the liberal provisions of the section quoted, include almost any desired lawful privi- lege. Preferred stock is usually issued to avoid raising money for corporate purposes by borrowing on bond and mortgage and the preferential privileges are adjusted to facilitate its sale. Its use for this purpose has led some courts to treat the issue of preferred stock as a borrowing of money, but this view has been expressly repudiated in New York (Kent v. Quicksilver Mining Co., 78 N. Y. 159 [1879]), where it is held that a preferred stockholder differs from others only in being en- titled to certain privileges which those others do not possess. Preferred stock possesses the advantage over bonds of not bearing a guaranteed rate of interest and of not subjecting the company to the dangers of foreclosure. In the absence of provision to the contrary, preferred stock has all the privileges of common stock in addition to whatever extraordinary rights it may possess. The most com- mon preference is in the matter of dividends, the usual rate varying from five per cent, to seven per cent. This simply means that the dividend will be paid if earned, for preferred stock is subject to the same rule in that respect as the common. These dividends may be cumulative or non-cumulative. Un- less expressly denied by the terms of issue, however, the New York courts interpret preferred dividends as cumulative (Prouty V. Ry., I Hun 655, 665 [1874] ; Boardman v. Lake Shore Ry., 84 N. Y. 157 [1881]) ; that is, all arrearages of preferred dividends must be paid before the common stock is entitled to dividends. Unless otherwise expressly provided, preferred stock par- ticipates equally with the common in all dividends after both have received an equal percentage of profit. It is usual, how- ever, to specifically deny this privilege, except in cases where CAPITAL STOCK. 8l there are reasons for making the preferred stock exceptionally attractive. Preferred stock is not entitled to any greater privileges than the common in the distribution of assets upon corporate dissolution unless express provision is made to that effect. It is common to confer such preferential rights, however. Preferred stock has the same voting rights as common stock. (See § 103.) § 77. Classification of Stock. After Organization. The creation of preferences in stock subsequent to organi- zation may be accomplished by charter amendment. (See § 72.) A special meeting of the stockholders must be held, on the same notice as is required for the annual meeting (see § loi, subdiv. c), and the change must receive a favorable vote of two-thirds of the entire capital stock. The president or vice-president and the secretary or assistant secretary must sign a certificate under oath setting forth the proceedings at the meeting and file and record the same in the offices where the original certificate of incorporation was filed. (S. C. L., § 61.) (See § 72 (g) ; also Forms 82, 83, 85; for fees see Part III, Table No. 4.) § 78. Redemption of Preferred Stock. Upon written request of a holder of preferred stock, the directors may, by a two-thirds vote, exchange his stock for common stock, and issue certificates of common stock there- for, share for share, or upon such other valuation as may have been agreed upon in the "certificate of organization of such corporation, or the issue of such preferred stock," provided the total amount of capital stock is not thereby increased. (S. C. L., §61.) There is no express statutory authority in New York for the issue of preferred stock redeemable by the company with surplus upon conditions and at a price fixed by the terms of 82 NEW YORK CORPORATIONS. its issue, but such an arrangement, if free from fraud, would undoubtedly be sustained. The redemption should not, how- ever, be made obligatory, but merely optional with the com- pany, as otherwise if no funds were in hand at the appointed date from which such stock might be lawfully redeemed, the company would be placed in an awkward dilemma. § 79. Other Classifications. Under the New York statutes, preferred stock may be and is classified in many ways. (S. C. L., § 61.) Participation in dividends may be limited to a certain percentage in each year, or the preferred stock may be denied participation in the distri- bution of assets on dissolution, or different classes of preferred stock may be created, having dividend rights varying as to time of payment or amount. Other classifications may be made to meet varying conditions. (As to restriction of voting rights, see § 103.) In any of these cases the conditions under which any stock is issued should appear plainly on the face of its certifi- cate, or, if too lengthy to permit of this, such reference should be made to the charter in which the conditions are set forth as to put an intending purchaser on his guard. § 80. Par Value of Shares. This must not be less than $5 nor more than $100. (B. C. L., § 2.) The par value may be changed within the limits stated by a two-thirds vote of the stock represented at a special meeting, held and conducted in the same manner, and upon filing a like certificate, as required for the increase or reduc- tion of the capital stock. (See § 72; also Forms 84, 85.) If the change is authorized, the directors issue new certificates to the par value of the old in exchange therefor and cancel the old certificates. (S. C. L., § 65.) Between the amounts of $5 and $100 fixed by the statutes, any par value of shares may be adopted which the needs of SUPPLEMENTARY TO HARRISON'S NEW YORK CORPORATIONS (Second Edition) CONTAINING C 1 ) The United. States Corporation Tax Law ; (2) Amendments to the General Corporation Law of New York found in Chapter 240 of the Laws of 1909 NEW YORK THE RONALD PRESS 1909 Complimentary to Purchasers of 1909 Edition of New York Corporations UNITED STATES CORPORATION TAX (Constituting Section 38 of "An Act to provide revenue, equalize duties and encourage the industries of the United States, and for other purposes.") EFFECTIVE AUGUST 6, 1909 Sec. 38. That every corporation,' joint stock company or association, organized for profit and having a capital stock represented by share.=!,. and every insurance company, now or hereafter organized under the laws of the United States or of any State or Territory of the United States or under the Acts of Congress applicable to Alaska or the District of Colum- bia, or, now or hereafter organized under the laws of any foreign country and engaged in business in any State or Territory of the United States or the United States or of any State or Territory of the United States or in Alaska or in the District of Columbia, shall be subject to pay annually a special excise tax with respect to the carrying on or doing business by such corporation, joint stock company or association, or insurance com- pany, equivalent to one per centum upon the entire net income over and above five thousand dollars received by it from all sources during such year, exclusive of amounts received by it as dividends upon stock of other corporations, joint stock companies or associations, or insurance com- panies, subject to the tax hereby imposed ; or if organized under the laws of any foreign country, upon the amount of net income over and above five thousand dollars received by it from business transacted and capital in- vested within the United States and its Territories, Alaska, and the Dis- trict of Columbia during such year, exclusive of amounts so received by it as dividends upon stock of other corporations, joint stock companies or associations, or insurance companies, subject to the tax hereby imposed: Provided, however. That nothing in this section contained shall apply to labor, agricultural or horticultural organizations, or to fraternal bene- ficiary societies, orders, or associations operating under the lodge system, and providing for the payment of life, sick, accident, and other benefits to the members of such societies, orders, or associations, and dependents of such members, nor to domestic building and loan associations, or- ganized and operated exclusively for the mutual benefit of their mem- bers, nor to any corporation or association organized and operated ex- clusively for religious, charitable, or educational purposes, no part of the net income of which inures to the benefit of any private stockholder or individual. Second. Such net income shall be ascertained by deducting from the gross amount of the income of such corporation, joint stock company or association, or insurance company, received within the year from all sources, (first) all the ordinary and necessary expenses actually paid within the year out of income in the maintenance and operation of its business and properties, including all charges such as rentals or franchise payments, required to be made as a condition to the continued use or pos- session of property; (second) all losses actually sustained within the year and not compensated by insurance or otherwise, including a reasonable allowance for depreciation of property, if any, and in the case of insur- ance companies the sums other than dividends, paid within the year on policy and annuity contracts and the net addition, if any, required by law to be made within the year to reserve funds; (third) interest actually paid within the year on its bonded or other indebtedness to an amount of such bonded and other indebtedness not exceeding the paid-up capital stock of such corporation, joint stock company or association, or insurance com- NEW YORK CORPORATIONS pany, outstanding at the close of the year, and in the case of a bank, banking association or, trust compaijy, all interest actually/paid by it with- in the year on deposits; (fourth) all sums paid by it within the year for taxes imposed under the authority of the United States or of any State or Territory thereof, or imposed by the government of any foreign coun- try as a condition to carrying on business therein ; (fifth) all amounts received by it within the year as dividends upon stock of other corpora- tions, joint stock companies or associations, or insurance companies, sub- ject to the tax hereby imposed :' Provided, That in the case of a corpora- tion, joint stock company or association, or insurance company, organized under the laws of a foreign country, such net income shall be ascertained by deducting from the gross amount of its income received within the year from business transacted and capital invested within the United States and any of its Territories, Alaska, and the District of Columbia, (first) all the ordinary and necessary expenses actually paid within the year out of earnings in the maintenance and operation of its business and property within the United States and its Territories, Alaska, and the Dis- trict of Columbia, including all charges such as rentals or franchise pay- ments required to be made as a condition to the continued use or posses- sion of property; (second) all losses actually sustained within the year in business conducted by it within the United States or its Territories, Alaska, or the District of Columbia not compensated by insurance or otherwise, including a reasonable allowance for depreciation of property, if any, and in the case of insurance companies the sums other than divi- dends, paid within the year on policy and annuity contracts and the net addition, if any, required by law to be made within the year to reserve funds; (third) interest actually paid within the year on its bonded or other indebtedness to an amount of such bonded and other indebtedness, not exceeding the proportion of its paid-up capital stock outstanding at the close of the year which the gross amount of its income for the year from business transacted and capital invested within the United States and any of its Territories, Alaska, and the District of Columbia bears to the gross amount of its income derived from all sources within and without the United States; (fourth) the sums paid by it within the year for taxes imposed under the authority of the United States or of any State or Territory thereof ; (fifth) all amounts received by it within the year as dividends upon stock of other corporations, joint stock companies or associations, and insurance companies, subject to the tax hereby imposed. In the case of assessment insurance companies the actual deposit of sums with State or Territorial officers, pursuant to law, as additions to guaranty or reserve funds shall be treated as being payments required by law to reserve funds. Third. There shall be deducted from the amount of the net income of each of such corporations, joint stock companies or associations, or insurance companies, ascertained as provided in the foregoing paragraphs of this section, the sum of five thousand dollars, and said tax shall be computed upon the remainder of said net income of such corporation, joint stock company or. association, or insurance company, for the year ending December thirty-first, nineteen hundred and nine, and for each cal- endar year thereafter; and on or before the first day of March, nineteen hundred and ten, and the first day of March in each year thereafter, a true and accurate return under oath or affirmation of its president, vice-presi- dent, or other principal officer, and its treasurer or assistant treasurer, shall be made by each of the corporations, joint stock companies or associations, and insurance companies, subject to the tax imposed by this section, to the collector of internal revenue for the district in which such corpora- tion, joint stock company or association, or insurance company, has its NEW YORK CORPORATIONS principal place of business, or, in the case of a corporation, joint stock company or association or insurance company, organized under the laws of a foreign country, in the place where its principal business is carried on within the United States, in such form as the Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, shall pre- scribe, setting forth, (first) the total amount of the paid-up capital stock of such corporation, joint stock company or association, or insurance com- pany, outstanding at the close of the year; (second) the total amount of the bonded and other indebtedness of such corporation, joint stock com- pany or association, or insiirance company at the close of the year ; •(third) the gross amount of the income of such corporation, joint stock company or association, or insurance company, received during such year from all sources, and if organized under the laws 'of a foreign country the gross amount of its income received within the year from business transacted and capital invested within the United States and any of its Territories, Alaska, and the District of Columbia ; also the amount re- ceived by such corporation, joint stock company or association, or in- surance company, within the year by way of dividends upon stock of other corporations, joint stock companies or associations, or insurance companies, subject to the tax imposed by this section; (fourth) the total amount of all the ordinary and necessary expenses actually paid out of earnings in the maintenance and operation of the business and properties of such corporation, joint stock company or association, or insurance company, within the year, stating separately all charges such as rentals or franchise payments required to be made as a condition to the continued use or pos- session of property, and if organized under the laws of a foreign coun- try the amount so paid in the maintenance and operation of its business within the United States and its Territories, Alaska, and the District of Columbia; (fifth) the total amount of all losses actually sustained during the year and not compensated by insurance or otherwise, stating separately any amounts allowed for depreciation of property, and in the case of in- surance companies the sums other than dividends, paid within the year on policy and annuity contracts and the net addition, if any, required by law to be made within the year to reserve funds ; and in the case of a cor- poration, joint stock company or association, or insurance company, or- ganized under the laws of a foreign country, all losses actually sustained by it during the j'ear in business conducted by it within the United States or its Territories, Alaska, and the District of Columbia, not compensated by insurance or otherwise, stating separately any amounts allowed for depreciation of property, and in the case of insurance companies the sums other than dividends, paid within the year on policy and annuity contracts and the net addition, if any, required by law to be made within the year to reserve fund; (sixth) the amount of interest actually paid within the year on its bonded or other indebtedness to an amount of such bonded and other indebtedness not exceeding the paid-up capital stock of such corporation, joint stock company or association, or insurance company, outstanding at the close of the year, and in the case of a bank, banking association or trust company, stating separately all interest paid by it within the year on deposits; or in case of a corporation, joint stock com- pany or association, or insurance company, organized under the laws of a foreign country, interest so paid on its bonded or other indebtedness to an amount of such bonded and other indebtedness not exceeding the propor- tion of its paid-up capital stock outstanding at the close of the year, which the gross amount of its income for the year from business transacted and capital invested within the United States and any of its Territories, Alaska, and the District of Columbia, bears to the gross amount of its in- come derived from all sources within and without the United States ; NEW YORK CORPORATIONS (seventh) the amount paid by it within the year for taxes imposed under the authority of the United States or any State or Territory thereof, and separately the amount so paid by it for taxes imposed by the government of any foreign country as a condition to carrying on business therein; (eighth) the net income of such corporation, joint stock company or asso- ciation, or insurance company, after making the deductions in this section authorized. AH such returns shall as received be transmitted forthwith iy the collector to the Commissioner of Internal Revenue. Fourth. Whenever evidence shall be produced before the Commis- sioner of Internal Revenue which in the opinion of the commissioner justifies the belief that the return made by any corporation, joint stock company or association, or insurance company, is incorrect, or whenever any collector shall report to the Commissioner of Internal Revenue that any corporation, joint stock company or association, or insurance com- pany, has failed to make a return as required by law, the Commissioner of Internal Revenue may require from the corporation, joint stock com- pany or association, or insurance company making such return, such fur- ther information with reference to its capital, income, losses, and expendi- tures as he may deem expedient ; and the Commissioner of Internal Rev- enue, for the purpose of ascertaining the correctness of such return or for the purpose of making a return where none has been made, is hereby authorized, by any regularly appointed revenue agent specially designated by him for that purpose, to examine any books and papers bearing upon the matters required to be included in the return of such corporation, joint stock company or association, or insurance company, and to require the attendance of any officer or employee of such corporation, joint stock company or association, or insurance company, and to take his testimony with reference to the matter required by law to be included in such return, with power to administer oaths to such person or persons ; and the Com- missioner of Internal Revenue may also invoke the aid of any court of the United States having jurisdiction to require the attendance of such officers or employees and the production of such books and papers. Upon the information so acquired the Commissioner of Internal Revenue may amend any return or make a return where none has been made. All pro- ceedings taken by the Commissioner of Internal Revenue under the pro- visions of this section shall be subject to the approval of the Secretary of the Treasury. Fifth. All returns shall be retained by the Commissioner of Internal Revenue, who shall make assessments thereon ; and in case of any return made with false or fraudulent intent, he shall add one hundred per centum of such tax, and in case of a refusal or neglect to make a return or to verify the same as aforesaid he shall add fifty per centum of such tax. In case of neglect occasioned by the sickness or absence of an officer of such corporation, joint stock company or association, or insurance com- pany, required to make said return, or for other sufficient reason, the collector may allow such further time for making and delivering such return as he may deem necessary, not exceeding thirty days. The amount so added to the tax shall be collected at the same time and in the same manner as the tax originally assessed unless the refusal, neglect, or falsity is discovered after the date for payment of said' taxes. In which case the amount so added shall be paid by the delinquent corporation, joint stock company or association, or insurance company, immediately upon notice given by the collector. All assessments shall be made and the several cor- porations, joint stock companies or associations, or insurance companies, shall be notified of the amount for which they are respectively liable on or before the first day of June of each successive year, and said assessments shall be paid on or before the thirtieth day of June, except in cases of re- NEW YORK CORPORATIONS fusal or neglect to make such return, and in cases of false or fraudulent returns, in which cases the Commissioner of Internal Revenue shall, upon the discovery thereof, at any time within three years after said return is due, make a return upon information obtained as above provided for, and *u ii^l^^^^™j"' '"^'^^ ^^ ^^^ Commissioner of Internal Revenue thereon shall be paid by such corporation, joint stock company or association, or insurance company immediately upon notification of the amount of such assessment; and to any sum or sums due and unpaid after the thirtieth day of June in any year, and for ten days after notice and demand thereof by the collector, there shall be added the sum of five per centum on the amount of tax unpaid and interest at the rate of one per centum per month upon said tax from the time the same becomes due. Sixth. When the assessment shall be made, as provided in this sec- tion, the returns, together with any corrections thereof which may have been made by the commissioner, shall be filed in the office of the Commis- sioner of Internal Revenue and shall constitute public records and be open to inspection as such. Seventh. It shall be unlawful for any collector, deputy collector, agent, clerk, or other officer or employee of the United States to divulge or make known in any manner whatever not provided by law to any per- son any information obtained by him in the discharge of his official duty, or to divulge or make known in any manner not provided by law any document received, evidence taken, or report made under this section except upon the special direction of the President; and any offense against the foregoing provision shall be a misdemeanor and be punished by a fine not exceeding one thousand dollars, or by imprisonment not exceeding one year, or both, at the discretion of the court. Eighth. If any of the corporations, joint stock companies or asso- ciations, or insurance companies, aforesaid, shall refuse or neglect to make a return at the time or times hereinbefore specified in each year, or shall render a false or fraudulent return, such corporation, joint stock company or association, or insurance company, shall be liable to a penalty of not less than one thousand dollars and not exceeding ten thousand dollars. Any person authorized by law to make, render, sign, or verify any return who makes any false or fraudulent return, or rftatement, with in- tent to defeat or evade the assessment required by this section to be made, shall be guilty of a misdemeanor, and shall be fined not exceeding one thousand dollars or be imprisoned not exceeding one year, or both, at the discretion of the court, with the costs of prosecution. All laws relating to the collection, remission, and refund of internal revenue taxes, so far as applicable to and not inconsistent with the pro- visions of this section, are hereby extended and made applicable to the tax imposed by this section. Jurisdiction is hereby conferred upon the circuit and district courts of the United States for the district within which any person summoned under this section to appear to testify or to produce books, as aforesaid, shall reside, to compel such attendance, production of books, and testi- mony by appropriate process. NEW YORK CORPORATIONS Amendments to the General Corporation Law (Chapter 240, Laws of 1909.)* To FACE § 106, PAGE 384. § io6. Permanent receiver. A receiver appointed by or pursuant to a final judgment in the action, or a temporary receiver who is con- tinued by the final judgment, is a permanent receiver, and has all the powers and authority conferred, and is subject to all the duties and Ha- bilities imposed upon a receiver [ ] in article eleven of this chapter. [As amended by Ch. 240, L. 1909. Brackets show where matter was dropped.] To FACE § 155, PAGE 389. § 155. Notice to creditors by receiver. [1. Within thirty days after a receiver quaKfies he shall cause to be puljlished once a week for twelve weeks in a newspaper pubhshed at the principal place of business of the corporation, a notice to all creditors of the corporation to present their claims to such receiver at his place of business within fifteen days after the last publication of such order. He shall also mail a copy of such notice to all. the creditors of the corporation known to him or as shown on the books of the company, at their last known place of residence. 2. The receiver of any title guaranty company heretofore or hereafter ap- pointed, which company is] authorized by law to issue policies of insur- ance or agreements of indemnity or guaranty, and which corporation has issued and outstanding * * * and proved within the time limited by such notice. [This subdivisioji shall apply to receivers of all moneyed corpora- tions.] [As amended by Ch. 240, L. 1909. New or amended matter enclosed in brackets.] •The amendments of Ch. 240, L. 1909, were received too late to include in the first printing of Harrison's New York Corporations and are therefore issued as supplementary matter. These amendments, relating entirely to receivers of corpora- tions, and mainly to receivers of moneyed corporations, make no change in the gen- eral text of "New York Laws," affecting only the sections of the statutes directly amended. NEW YORK CORPORATIONS To FACE § 158, PAGE 390. § 158. Notice of account and accounting by receiver. 1. The receiver shall file his account, together * * * appearing in such account on or before such hearing. [The receiver shall also within ten days after the filing of the account, mail to each creditor of the corporation a notice of the time and place of the filing of his account, and a notice of the time and place of the presentation of the account to the court. Unless objec- tion is made to the items of the account by a creditor or on behalf of the attorney-general, no referee shall be appointed to pass thereon, but the same shall be examined and settled by the court. In case objection is made a referee may be appointed to take the testimony and report the same to the court.] , 3. Prior to the final settlement of accounts of a receiver of any moneyed corporation, having in force, at the time of his appointment, * * * to a referee to examine and pass thereon. [This subdivision shall apply to receivers of all moneyed corporations heretofore or hereafter ap- pointed.] [As amended by Ch. 240, L. 1909. New o.r amended matter enclosed in brackets.] To FACE § 160, PAGE 391. § i6o. Claims barred after distribution of assets by receiver. Upon the granting of the application and the making of the order of dis- tribution, [as provided in subdivision two of section one hundred and fifty-eight of this article,] and the distribution of the assets in the hands of the receiver, in the manner directed by the order of the court, all claims of the creditors or of holders or owners of policies of insurance or agreements of indemnity or guaranty, against such receiver, shall be barred. This section shall apply to [receivers of all] moneyed corpora- tions. [As amended by Ch. 240, L. 1909. New or amended matter enclosed in brackets.] NEW YOKK CORPORATIONS To FACE § 174, PAGE 393. § 174- Contents of petition. The petition must show that the case is one of those specified in sections one hundred and seventy [and one hundred and seventy-two] of this chapter, and must slate the reasons, which induce the petitioner or petitioners to desire the dissolution of the corporation. A schedule must be annexed to the petition, containing the following matters, as far as the petitioner or petitioners know, or have the means of knowing the same : * * * [As amended by Ch. 240, L. 1909. Amended matter enclosed in brackets.] To FACE § 178, PAGE ,394. § 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 before it, or before a referee designated in the order, at a time and place therein specified, not less than six weeks after the granting of the order, why the corporation should not be dis- solved. [As amended by Ch. 240, L. 1909. Amended matter enclosed in brackets.] To FACE § 191, PAGE 397. § 191. Permanent receiver. Upon an application for a final order, if it appear to the court in a case specified in section one hundred and seventy of this chapter that the corporation is insolvent, or, in a case specified either in that section, or in section one hundred and seventy- one [and one hundred and seventy-two] of this chapter, that for any reason a dissolution of the corporation will be beneficial to the mterests of the stockholders and not injurious to the public interests, * * * [As amended by Ch. 240, L. 1909. Amended matter enclosed in brackets.] NEW YORK CORPORATIONS To FACE PAGE 400. ARTICLE 10-A. PROVISIONS APPLICABLE TO TEMPORARY AND PER- MANENT RECEIVERS OF CORPORATIONS. [Added by Ch. 240, L. 1909.] Section 335. Security. 236. Removal or new bond. 227. Notice to sureties upon accounting. § 225. Security. A receiver, appointed in an action or special pro- ceeding, 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, conditioned 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. § 226. Removal or new bond. The court, or, where the order was made out of court, the judge making the order, by or pursuant to which the receiver was appointed, or his successor in office, may, at any time, remove the receiver, or direct him to give a new bond, with new sureties, with the like condition specified in the last section. But this sec- tion does not apply to a case where special provision is made by law for the security to be given by a receiver, or for increasing the same, or for removing a receiver. § 227. Notice to sureties upon accounting. A receiver who, hav- ing executed and filed a bond as provided for in section two hundred and twenty-five or section two hundred and twenty-six of this chapter, before presenting his accounts as receiver, must give notice to the surety or sureties on his official bond, of his intention to 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 ac- counting is ordered on the petition of a person or persons other than the receiver, and in no case shall the receiver's accounts be passed, settled or allowed, unless the said notice provided for in this section shall have first been given to the surety or sureties on the official bond of such receiver. To FACE § 269, PAGE 411. § 269. Notice of final accounting. Previous to rendering such account the receivers shall insert a notice of their intention to present the same, once in each week, for three weeks, in a newspaper, of the county in which notices of dividends are herein required to be inserted, specifying the time and place at which such account will be rendered. [Said re- ceivers shall also give notice to the sureties on their official bonds, as pro- vided in section two hundred and twenty-seven of this chapter.] [As amended by Ch. 240, L. 1909. New matter enclosed in brackets. 1 NEW YORK CORPORATIONS To FACE § 232, PAGE 401. § 232. Receiver's title to property. Such receivers shall be vested with all the property, real and personal, of the corporation, from the time of their having filed the security [required by law.] [As amended by Ch. 340, L. 1909. Amended matter enclosed in brackets.] CAPITAL STOCK. 83 the company' suggest. The most common figures are $io and $100. Shares of stock in the same company may be classified on the basis of different par values, as a par value of $ioo for the common stock and $io for the preferred stock. Such an ar- rangement is, however, unusual, is apt to be confusing and should not be adopted without some strong reason therefor. § 81. Subscriptions. The New York laws impose no requirements as to prelimi- nary subscription to the capital stock of a proposed corpora- tion, save as to the subscriptions of the incorporators which appear in the charter. The company is therefore fully organ- ized when the certificate is duly filed and recorded and the tax paid. (G. C. L., § 5.) In the absence of any statutory direc- tion regarding preliminary subscriptions, the Court of Appeals has worked out a distinction between an agreement to form a corporation and subscribe to its stock, and an agreement to subscribe for shares when the corporation is organized. Under the decisions of the court, a preliminary subscrip- tion made in the first form, e. g., "We the undersigned hereby subscribe for the number of shares set opposite our names," is a continuing offer which may be accepted upon the forma- tion of the company since "the intention of the parties was to become shareholders without further action upon their part." Yonkers Gazette Co. v. Taylor, 30 App. Div. 334 (1898). On the other hand, where the language of the agreement indicates an intention to subscribe "when the corporation is organized" or upon some other condition (Lake Ontario R. R. Co. V. Curtiss, 80 N. Y. 219 [1880]), further action is necessary on the part of the proposed subscribers to make them stockholders. In the first case the subscription may be modified or with- drawn at any time before acceptance, but if not changed (Burt V. Farrar, 24 Barb. 518 [1857]), it may be accepted by the 84 NEW YORK CORPORATIONS. corporation when organized and then at once becomes a bind- ing contract between the parties. Avon Springs Sanitarium v. Weed, 119 App. Div. 560 (1907). In the second case, the preliminary subscription is little more than a memorandum which must be ratified by both parties after incorporation before it becomes binding. In the matter of changes in the terms of subscription agreements it has been held that even if the terms of the pre- liminary agreement are changed in the charter as accepted by the Secretary of State, it will not release a subscriber under the agreement, unless the changes are material in their nature; "When the business is not changed, or the party is not shown to be prejudiced and no fraud intervenes, there exists no sound basis for being relieved from the contract whose substance is fully performed." Yonkers Gazette Co. v. Taylor, 30 App. Div. 338 ( 1898). In the case cited a change of name was held immaterial. "If the whole capital stock shall not have been sub- scribed at the time of filing the certificate of incorporation, the directors named in the certificate may open books of subscrip- tion to fill up the capital stock in such places and after giving such notices as they may deem expedient, and may continue to receive subscriptions until the whole capital stock is sub- scribed." (S. C. L., § 53.) This is a mere statutory declara- tion of the common law power of directors to accept stock subscriptions. Buffalo & Jamestown Ry. v. Gifford, 87 N. Y. 294, 300 (1882). "The section may have been drawn by the person who prepared the statute, without a definite idea of its utility or necessity. It does not prohibit or forbid any other mode of subscription and we are inclined to the opinion that it was not intended by this section to prescribe a fixed statu- tory mode of making a subscription and that any contract of subscription good and valid at common law is still valid, not- withstanding this section." (Id.) It is further provided (S. C. L., § 53), that "at the time CAPITAL STOCK. 85 of subscribing, every subscriber, whose subscription is payable in money, shall pay to the directors ten per centum upon the amount subscribed by him in cash, and no such subscription shall be received or taken without such payment." This provision for payment applies only to subscriptions subsequent to organization. South Buffalo Gas Co. v. Bain, 9 Misc. 425 (1894) ; United Growers Co. v. Eisner, 22 App. Div. I, 4 (1897). It is mandatory as to the latter and a subscription upon which payment is not made is valid for no purpose, not even to subject the alleged stockholder to liability to creditors. Perry v. Hoadley, 19 Abb. N. C. 76 (1887); South Buffalo Gas Co. v. Bain, supra. Payment need not accompany the subscription but must be made within a rea- sonable time. "The intent of the section, doubtless, was that no subscription should be valid until ten per cent, was paid thereon, and not that it should be invalid if a short interval occur between the actual subscription and the payment of the money." Black River and Utica Ry. v. Clarke, 25 N. Y. 208, 210 (1862) ; South Buffalo Gas Co. v. Bain, supra. A note accepted by the directors as payment of the ten per cent, and afterwards enforced by them, is sufficient compliance with the statute. Ry. Co. v. Wolley, i Keyes 118 (1864). A check, if duly paid, is sufficient, but a check upon which payment is stopped is not enough to render the subscription binding. Ex- celsior Co. V. Stayner, 25 Hun 91 (1881). A certified check is "cash" within the meaning of the statute. Matter of Staten Id. R. T. Co., 37 Hun 422 (1885). § 82. Stock Certificates. "The stock of every stock corporation shall be represented by certificates prepared by the directors and signed by the president or vice-president and secretary or treasurer and seal- ed with the seal of the corporation * * * " (S. C. L., § 50.) The issue of stock certificates is in no sense a transfer of stock. Christensen v. Eno., 106 N. Y. 97 (1887) ; Burrall 86 NEW YORK CORPORATIONS. V. Ry., 75 N. Y. 211 (1878). "The certificate is simply a written acknowledgment by the company of the interest of the subscriber in its property and franchises." Burr v. Wil- cox, 22 N. Y. 551, 555 (i860) ; Kent v. Mining Co., 78 N. Y. 180 (1879). (See Forms 11, 12.) A stockholder's rights do not depend upon the issue of a certificate (Rutter v. Kilpatrick, 63 N. Y. 604, 606 [1876] and cases there cited), nor upon its continued existence. The certificate is merely a convenient evidence of his interest in the company, which is not affected by the loss or destruction of the certificate. This latter, save when endorsed in blank, has none of the qualities of negotiable paper. Weaver v. Bar- den, 49 N. Y. 286 (1872) ; Driscoll v. West Bradley Co., 59 N. Y. 96, 105 (1874). Its legal assignment will convey title, but it is well settled that an unauthorized transfer, if there has been no such negligence or conduct on the part of the owner as to estop him to deny authority, conveys no title, even to an innocent purchaser for value. McNeil v. Bank, 46 N. Y. 325 (1871); Bank v. Ry., 137 N. Y. 231, 238 (1893); Knox V. Eden Musee Co., 148 N. Y. 441, 456 (1896). A certificate of stock is, however, a representation to the world that the holder has a certain interest in the capital of the company, and, if wrongfully issued by an authorized officer, the company is liable to an innocent holder. If the stock could have been legally issued, this latter becomes a stockholder, but if the limit of authorized capitalization had been reached, he can recover damages only. N. Y. and N. H. Ry. V. Schuyler, 34 N. Y. 30 (1865). Certificates may be issued for partly paid stock if express provision to that effect is contained in the original or amended charter and dividends may be declared on the basis of the amount paid. (S. C. L., § 60.) The sums actually paid on such stock should appear plainly on the face of the certificates. (See § 93.) CAPITAL STOCK. 87 § 83. Lost and Destroyed Certificates. Though a stockholder's certificate be unissued, lost, stolen or destroyed, he is still entitled to every right of a stock- holder. The stock books are sufficient evidence of his owner- ship, and the absence of his certificate does not affect his right as an owner of stock. If the owner of a certificate which has been lost or de- stroyed wishes a new certificate, he may apply to the company for a duplicate and, if refused, may petition the Supreme Court at special term to compel the company to issue the same. Upon due proofs of the facts, an order will be made requiring the petitioner (unless a municipal corporation) to deposit security with the company and the latter to replace the missing certificate. (S. C. L., §§ 67, 68.) Kinnan v. Ry., 140 N. Y. 183 (1893).* Generally, by provision of the by-laws, the is- suance of certificates to replace those lost is placed in the dis- cretion of the directors. It is usually stipulated, however, that the directors shall exact a bond of indemnity before a lost certificate is replaced. ( See Form 15.) § 84. Consideration for Issue. "No corporation shall issue either stock or bonds except for money, labor done or property actually received for the use and lawful purposes of such corporation." (S. C. L., § 55.) To issue stock as fully paid when in fact it does not represent value received, is a fraud upon the corporation and upon sub- sequent takers in good faith. Barnes v. Brown, 80 N. Y. 527, 534 (1880). The efifect of this salutary rule is, however, weakened by the further provision of the statutes that in issu- ing stock for property the judgment of the directors as to its value is conclusive unless actual fraud can be shown (S. C. L., § 5S), and that so far as the corporation and its stock- holders are concerned stock so issued is full paid and not liable to further calls. * As to what must be proven to entitle the petitioner to the order, see Matter of Biglin V. Ass'n, 4.6 Hun 223 (1887); Matter of Coats, 75 App. Div. 469 (1902). 88 NEW YORK CORPORATIONS. This provision gives the directors wide discretion in the exchange of stock for property. If, however, their valuation in any case is grossly excessive, it is strong evidence of fraud and the court will intervene in a proper case. (See §§ 46, 50.) "Lawful purposes," as used in the statutes, is interpreted to mean those not foreign to the business of the corporation and is liberally construed. Rafferty v. Gas Co., 37 App. Div. 618, 621 (1899). Stock issued for an inadequate consideration is not void nor are the directors personally liable to subsequent purchasers. Ersfeldv. Exner, 128 App. Div. 135 (1908). § 85. Calls for Subscription Instalments. "Subscriptions to the capital stock * * * shall be paid at such times, and in such instalments as the board of directors may by resolution require." (S. C. L., § 54.) A subscriber who fails to pay when the instalment falls due is properly chargeable with interest. Gould v. Oneonta, 71 N. Y. 298, 305 (1877). After the expiration of sixty days from the service on a defaulting stockholder, personally or by mail, of written notice requiring him to make the payment due with- in sixty days at a specified place, and stating that upon his failure to do so his stock and the payment thereon will be forfeited, the directors may declare the stock on which default is made, together with all previous payments thereon, for- feited to the corporation. (S. C. L., § 54.) Mitchell v. Min- ing Co., 40 N. Y. Supr. Ct. 406 (1875) '• 67 N. Y. 280 (1875). When stock is forfeited, the former holder is under no liability for further calls (Mills v. Stewart, 41 N. Y. 384, 389 [1869]), nor is he liable for the unpaid instalments due on calls already made. Small v. Herkimer Co., 2 N. Y. 330 (1849). Forfeited stock may be reissued. If not sold for its par value, or subscribed for within six months, it must be cancelled and deducted from the amount of capital stock. If by such cancellation the amount of outstanding stock is reduced CAPITAL STOCK. 89 below the minimum required by law ($500), it must be raised to the statutory amount within three months, or an action may be brought to close up the corporate business as in case of insolvency. (S. C. L., § 54.) At any time before sale of the forfeited shares, the original stockholder may redeem them by payment of calls and interest. Mitchell v. Mining Co., supra* § 86. Increase or Decrease. Increase or decrease of capital stock to not less than the minimum prescribed by law may be effected by charter amendment. (S. C. L., §§ 62, 63, 64.) (See § 72; Forms 84,85.) If the unanimous written consent of the stock is obtained to the proposed change no stockholders' meeting is necessary, but the consent so given must be entered on the corporate minutes and be filed as stated on the following page. Before filing it must have annexed thereto an affidavit of the custo- dian of the stock book that the parties signing represent the entire issued and outstanding stock. The change may be effected, without unanimous consent, by a majority vote in interest of the outstanding stock, called on notice stating the time, place and object of the meeting and the amount of the proposed increase or reduction, signed by the president or a vice-president and a secretary, published once a week for two successive weeks in a newspaper in the county where its principal business office is located, if there is such a paper, and also mailed to each stockholder two weeks before the meeting or served personally at least five days before. The chairman and secretary of such meeting must be chosen from among the stockholders. If the proposed change is adopted either by unanimous written consent or at a special meeting by a vote of the ma- jority of the whole stock, a certificate of the proceedings, *As to liability for calls after transfer of stock, see Plank Road Co. v. Thatcher, ii N. Y. 102 (1854); Roosevelt v. Brown, ii N. Y. 148 (1854); Tucker v. Gilman, 121 N. Y. 189 (1S90). 90 NEW YORK CORPORATIONS. showing compliance with the statutory provisions, must be "made, signed, verified and acknowledged" in duplicate by the chairman and secretary of the meeting, or, in the case of unanimous consent, by the president and secretary of the com- pany, and one copy be filed in the office of the clerk of the county where the principal office is located and the other copy be filed with the Secretary of State. (See Forms 84, 85.) The increase or reduction dates from the filing of the certifi- cate. (S. C. L., § 64.) This certificate must set forth : (i) The amount of authorized capital. (2) The proportion thereof actually issued. (3) The amount to which the capital stock is in- creased or reduced. (4) In case of reduction the whole amount of the ascertained debts and liabilities. A tax of one-twentieth of one per cent, must be paid on any increase of stock. The old stockholders have a right to purchase the new stock pro rata before it may be ofifered to outside investors. Matter of Wheeler, 2 Abb. Prac. N. S. 361, 363 (1866) ; Stokes v. Continental Trust Co., 186 N. Y. 285 (1906). In case of reduction each copy -of the certificate must be- fore filing be endorsed by the state comptroller to the effect that the reduced capital is sufficient for the proper purposes of the corporation and is in excess of its ascertained debts and lia- bilities. The comptroller's fee is $1 for each copy. (Execu- tive Law, § 42.) If stock is reduced, the meeting or the written consent may provide for a distribution, pro rata among the stockholders, of the amount of capital released by such re- duction of stock. (For fees, see Part III, Table No. 4. Stock when decreased must be reduced so as not to dis- turb the proportionate interest of various classes. Page v. American & British Mfg. Co., 129 App. Div. 346 (1908). CAPITAL STOCK. 9I § 87. Transfer of Stock. "A transfer of shares in a corporation means substitution of a new shareholder in place of an outgoing shareholder in the company, and an assumption by the former of all the rights and obligations which attached to the transferring share- holder by reason of his ownership of the shares." Morawetz Private Corp., § 159; Tucker v. Oilman, 121 N. Y. 189 (1890). Subject to the statutory provisions regulating trans- fers, as noted hereinafter, a corporation may prescribe in its by-laws the method by which stock may be transferred. (S. C. L., § 50.) This does not give the corporation power to prohibit transfers or to abridge the right to transfer, which is one of the chief attributes of corporate stock (Rochester Land Co. v. Raymond, 158 N. Y. 576, 583 [1899]), but sim- ply to direct the manner in which it shall be done. DriscoU v. West Bradley & C. M. Co., 59 N. Y. 96, 104 (1874) ; Kinnan v. Sullivan Co. Club, 26 App. Div. 213, 216 (1898). See § 91, subdiv. d.) No share of stock is transferable until all previous calls thereon have been fully paid. (S. C. L., § 50.) It is not at all essential to transferability, however, that stock should have been fully paid for. Rochester Land Co. v. Raymond, supra. If all calls have been satisfied, it may be transferred freely, even though the full amount due on the subscription has not been paid. In such case, all liability of the original subscri- ber ceases as soon as the transfer is registered by the company and the purchaser is liable for subsequent calls. Id. Transfer or delivery of the certificate with assignment and power of transfer is perfectly valid as between the parties and passes the title both legal and equitable. Shellington v. Rowland, 53 N. Y. 371 (1873) ; Bank v. Colwell, infra. In this manner certificates may be rendered practically nego- tiable instruments, for it is well settled that an assignment may be executed in blank and the certificate so assigned pass from hand to hand any number of times, the assignment when 92 NEW YORK CORPORATIONS. filled up by the last holder and registered on the books of the company, vesting the ownership of the shares in him. Kort- right V. Bank, 20 Wend. 91 (1838) ; McNeil v. Bank, 46 N. Y. 325 (1871). The statutes, however, provide (S. C. L., § 32), that transfers are not valid as against the corporation, its stock- holders and creditors for any purpose except to render the transferee liable for corporate debts to the same extent as the original owner, until the transfer is entered on the books of the company. This provision is, however, intended solely for the protection of the corporation and its creditors and may be waived or asserted at pleasure. Bank v. Colwell, 132 N. Y. 250, 256 (1892) and cases there cited. If the provision is not waived, the vendor remains the nominal owner until the trans- fer is entered on the books, and until such entry is made, both he and the vendee are liable to creditors. The vendor if compelled to pay may recover indemnity from the vendee. Johnson v. Underbill, 52 N. Y. 203, 209 (1873). The corporation may reserve a lien upon the shares of its stockholders for debts due to it from the owners, by printing on the certificates a copy of the statute under which this lien is established. (S. C. L., § 51.) The lien cannot be created by a by-law.* Driscoll v. Mfg. Co., 59 N. Y. 96 (1874) ; Rochester Land Co. v. Raymond, 158 N. Y. 576 (1899). The statutes provide that no stockholder shall transfer his stock in contemplation of insolvency. An attempted trans- fer in violation of this provision is void. (S. C. L., § 66.) It has been decided that this provision was enacted to prevent a stockholder evading his statutory liabilities to the corpora- tion and its creditors and that consequently, where the stock is full paid, a bona fide sale is valid even when made with knowledge of impending insolvency. Sinclair v. Fuller, 75 N. Y. St. 641 (1896); 158 N. Y. 607 (1899). The language of the New York statute of frauds, which * As to what constitutes waiver of the lien of the corporation, see Bank y. Bank, los U.S. 217(1881). CAPITAL STOCK. 93 includes "choses in action," renders a contract for the sale of shares to the value of over $50 unenforceable unless in writ- ing. (Personal Prop. Law, § 31, subdiv. 6.) A transfer, after dissolution of the corporation, operates simply as an equitable assignment. James v. Woodruff, 10 Paige 541 (1843). (For tax on transfers, see §§ 151, 152; forged and un- authorized transfers, § 82 ; rights of transferrer and trans- feree to dividend, § 88. ) § 88. Dividends. It is a fundamental rule of corporation law that dividends are payable only from profits. The New York statute express- ly provides that "the directors of a stock corporation shall not make dividends, except from the surplus profits arising from the business of such corporation, nor divide, withdraw or in any way pay to the stockholders or any of them, any part of the capital of such corporation, or reduce its capital stock, except as authorized by law." (S. C. L., § 28.) Violation of this section renders directors under whose administration it happens personally liable to the corporation and to the credi- tors, unless they cause their dissent to be entered at large upon the minutes. (Id.) They are also guilty of a misdemeanor. (Pen. Law, § 664; G. C. L., §§ 90-92, 109-115.) (See §§ 123, 124.) The practical difficulty of determining what are profits is sometimes great where corporate operations are at all com- plicated, but the rule is invariable that "the surplus over and above the capital and debts becomes profits." Barry v. Mer- chants Exchange Co., i Sandf. Ch. 307 (1843); Berwind- White Coal Co. v. Ewart, 11 Misc. 490 (1895). When a corporation has a surplus, it rests in the fair and honest discretion of the directors, uncontrollable by the courts, whether a dividend shall be declared and, if made, how much it shall be and when and where it shall be payable. Williams 94 NEW YORK CORPORATIONS. V. Telegraph Co., 93 N. Y. 162, 192 (1883) ; Burden v. Bur- den, 159 N. Y. 287 (1899). In case of preferred stock, the payment of dividends de- pends upon the wording of the preferential clause. If this provides for a dividend at a fixed time if a surplus exists from which it may then be lawfully paid, the directors have no discretion in the matter, but, given the profits from which the dividend may be paid, must declare it at the due date. If, however, as is usually the case, the preferential clause merely calls for dividends to a certain amount before any dividend is paid holders of the common stock, the directors have full dis- cretion as to the time of payment. In any case, however, the directors' discretion must be ex- ercised with fairness. If bad faith can be shown and the di- rectors refuse, without reasonable cause, to declare a dividend, the interposition of the courts may be had to compel a fair dividend, for corporate profits properly belong to the share- holders and they are entitled to an honest administration of them. Hiscock v. Lacy, 9 Misc. 578 (1894). Dividends are usually paid in cash. They are, however, sometimes paid in the form of scrip, or distributed as proper- ty, or issued as stock. "The surplus may be in cash and then it may be divided in cash. It may be in property and if the property is so situated that a division thereof among the stockholders is practicable, a dividend in property may be de- clared and that may be distributed among the stockholders." Williams v. Telegraph Co., 93 N. Y. 162, 189 (1883). Stock dividends are not uncommon. To justify such a dividend the company must have authority to issue the amount of stock necessary, and should have sufficient actual capital in property in excess of the par value of the capital stock then outstanding, to represent the amount of share capital issued as dividends. In such case the surplus is preserved, secure and undivided for the benefit of the corporate creditors and no one is injured. Williams v. Telegraph, supra, p. 191 ; CAPITAL STOCK. 95 Merz V. Conduit Co., 87 Hun 430 (1895) 5 Morawetz Private Corp., § 453. Dividends become the property of the stockholder of record, or his legal representative, at the time they are de- clared, without reference to the time when they were earned. Jones V. Ry., 57 N. Y. 196 (1874) ; Jermain v. Ry., 91 N. Y. 483 (1883.) In paying dividends the corporation is justified in relying on its books and need not demand the production of the certificate. Brisbane v. Ry., 94 N. Y. 204 (1883). The rights of equitable assignees will, however, be protected and the company is not justified in the payment of dividends to stockholders of record if it has due notice of the transfer of their rights. Smith v. Coal Co., 7 Lans. 317, 321 (1873). Dividends must be distributed ratably without discrimi- nation. Jones v. Ry., supra. When declared they cease to be a part of the corporate assets and become at once the property of the stockholders. Matter of Kernochan, 104 N. Y. 618, 624 (1887). (For rights of preferred stock to dividends, see §76.) CHAPTER IX. STOCKHOLDERS. § 89. Creation of the Relation. The relation of stockholder is established by contract between the corporation and the individual seeking member- ship. The contract may be original, as in the case of a direct subscription for stock, or it may be the result of the substi- tution which takes place upon a transfer of stock. As already stated, the stock certificate is a mere "muniment of title" (See § 82), and the fact that it has not been issued, or that it has been lost or destroyed does not afifect a stockholder's rights. The issued certificate is merely a convenient evidence of a condition already existing. § go. Rights of Stockholders. Collective. The relation between a corporation and its stockholders is practically that of trustee and beneficiaries. The corpora- tion has the legal title to the property, but the shareholders are entitled to have it managed for their benefit in accordance with the charter and by-law;s. The well established rule of trusts, that when a trustee is invested with active duties, the beneficiary will not be allowed to sue for the protection of the trust unless the trustee has refused or is unable to do so on his behalf (Western Ry. Co. v. Nolan, 48 N. Y. 513 [1872]), applies, with peculiar force, to the case of a corporation and its shareholders. Morawetz Private Corporations, §§ 237, 239. The directors or managing agents of the corporation are clothed with wide discretionary power in the matter of • But see Karnes v. Ry., 4 Abb. Pr. N. S. no (1867). 96 STOCKHOLDERS. 97 corporate suits and it is their province to institute litigation when necessary. The stockholders, whether individually or collectively, have no such right unless the directors fail sig- nally in this duty. Therefore, before a stockholder may com- plain of an injury done to the corporation, or enforce cor- porate rights, it must be shown that he has used every effort to induce the corporation itself to sue. Vanderbilt v. Garrison, 5 Duer 689 (1856); Stromeyer v. Combes, 15 Daly 29 (1888) ; O'Connor v. Va. P. & P. Co., 184 N. Y. 46 (1906). "It would be a doctrine attended with very serious con- sequences if every individual shareholder, assuming the place of the corporation, could decide for it when action should be brought." Samuel v. Holladay, i Wolw. 400 (U. S. C. Ct); McNaughton v. Osgood, 41 Hun 109 (1886). It is necessary therefore to justify the individual stockholder's suit to show actual bad faith in the refusal of the proper agents to sue. Roberts v. Ry., 64 St. Rep. 167 (1894); Sage v. Culver, 147 N. Y. 241 (1895). The collective powers of the stockholders in the manage- ment of the corporation have already been indicated in con- nection with the various subjects with which the stockholders are concerned. They may be recapitulated as follows: (i) To adopt or amend by-laws. (G. C. L., § 11, subdiv. 5) (See Chap. IV, "By-Laws.") (2) To elect directors. (G. C. L., § 11; S. C. L., § 25.) (See § 106.) (3) To amend the charter. (See § 'j2,.) {\\ To effect dissolution. (G. C. L., § 221.) (See § 56.) (5) To control the following acts of the direc- tors, all of which must receive the approval of the stock- holders before consummation. (a) Mortgages. All propositions to mortgage corpor- ate property, either real or personal, must be submitted to the stockholders and receive a formal vote of two-thirds in interest. (S. C. L., § 6.) (See § 67.) 98 NEW YORK CORPORATIONS. (b) Conversion of Obligations into Stock. Directors, when duly authorized thereto by two-thirds vote of the stock, may confer on holders of corporate bonds the right to C9nvert them into stock. (S. C. L., § 6.) (See § 6y.) (c) Sale of Property and Franchise. All transactions involving the sale of the entire corporate property and fran- chises to a domestic corporation, require a two-thirds vote of the stock for validation. If the property is in an adjoin- ing state and the sale is made to a corporation of the state where it is located, a vote of ninety-five per cent, is necessary. (S. C L., §16.) (d) To Guarantee Bonds. The stockholders must ap- prove a proposition to guarantee the bonds of another cor- poration before it can be carried out by the directors. If all the stock of the corporation aided is owned by the corporation making the guaranty, a two-thirds vote of the stock is suffi- cient, otherwiise consent must be unanimous. (S. C. L., § 8.) (See § 68.) (e) Consolidation. Consolidation with other corpora- tions requires the consent of two-thirds of the stock. (B. C. L., § 8.) (See § 70.) (f) Renewal. Extension of corporate existence can be effected only with the assent of two-thirds of the stock. (G. C. L., § 37.) (See § 54.) § 91. Rights of Stockholders. Individual. An action to protect the rights of the individual member as distinguished from those of the corporation must be brought by the stockholders. Meyers v. Scott, 20 St. Rep. 35 (1888). The rights of a stockholder, infringement of which may be redressed in New York by suit brought in his indi- vidual capacity, are as follows : (a) Right to Notice; Voting. To be notified of elec- tions, and to vote thereat, in person or by proxy. For depri- vation of this right, the injured stockholder may sue to have STOCKHOLDERS. 99 any corporate action taken at such meeting declared void. People V. Albany Ry., 55 Barb. 344 (1869) ; People ex rel. Loew V. Batchelor, 22 N. Y. 128, 134 (i860). (See § 103.) (b) Dividends. To share proportionately in dividends. When a dividend has been declared it becomes, ipso facto, the property of the shareholders pro rata and any one of them may sue for his share if not paid. If, however, the directors wrongfully fail to declare a dividend, the injury is to the stockholders collectively, and the remedy must be obtained through the corporation. (See § 88.) The courts will inter- fere at the instance of a stockholder to secure a fair distribu- tion of profits (Luling v. Ins. Co., 45 Barb. 510 [1866]), and a holder of preferred stock may enforce his preferential rights in the same manner. Boardman v. Ry., 84 N. Y. 157, 180 (1881). (c) Stock Certificates. A stockholder is entitled to a stock certificate and, under proper conditions, to have it re- placed in case of loss. (See § 83.) Although his rights as stockholder do not depend upon his possession of such a cer- tificate, he is entitled to it as evidence of those rights and to facilitate their transfer. (See § 82.) (d) Trarirsfer of Stock. The individual stockholder may freely transfer his shares and can force the corporation to register the transfer. Dunn v. Ins. Co., 19 W. Dig. 531 (1884). He cannot be deprived of this right by by-law under the provision allowing corporations to regulate stock trans- fers in their by-laws. The corporation is, however, allowed to close the transfer book and refuse to register changes of ownership for forty days prior to any annual or special meet- ing, if a by-law to that effect is regularly adopted. (G. C. L., § 23.) (See_§ 87.) (e) Inspection of the Corporate Books and Records. A stockholder is entitled to a certain supervisory right over the corporate afifairs to enable him to properly protect his in- terests and must be allowed, when necessary, to examine the * See also Hiscock v. Lacy, 9 Misc. 578, 593 (1894) . lOO NEW YORK CORPORATIONS. corporate records for this purpose. The stock book contain- ing a list of stockholders and transfers must be kept open for his inspection for three hours each business day and he may make extracts for future use. (S. C. L., § 32.) (See §§ 136, 137.) Also any voting trust agreements must be kept on file at the company's principal office and open to his inspection during business hours. (G. C. L., § 25.) The same is true of the financial statements rendered by the treasurer on request of the stockholders entitled to demand it. (S. C. L., 69.) (See subdiv. f below.) These express provisions do not deprive the stockholder of his common law right to obtain a court order for the ex- amination of any other of the corporate records where he can show that such a privilege is necessary to properly protect his rights. Matter of Sage, 70 N. Y. 220 (1877); Matter of Steinway, 31 App. Div. 70, "^-i, (1898) ; People ex rel. Ludwig V. Ludwig & Co., 126 App. Div. 696 (1908). (See § 137.) Upon a refusal to permit an inspection of the books, in a case where the stockholder is entitled to see them, he may bring mandamus proceedings and secure an order as a matter of absolute right. People ex rel. McDonald v. U. S. M. R. Co., 20 Abb. N. C. 192 (1888) ; Matter of O'Neill, 47 Misc. 495 (1905)- (f) Financial Statement. Five per cent, of the stock- holders, if the corporation is capitalized at an amount not ex' ceeding $100,000 or three per cent, if over that sum, not oftener than once a year, may demand a sworn statement from the treasurer showing in detail the corporate assets and lia- bilities. This report must be prepared and delivered to the person making the demand within thirty days thereof and a copy must be kept on file at the office of the corporation for twelve months open to the inspection of stockholders during business hours. (S. C. L., § 69.) French v. McMillan, 43 I-Iun 188 O887). (g) Dissolution. Under certain circumstances a stock- STOCKHOLDERS. I-OI holder may institute proceedings to secure dissolution of the corporation. (G. C. L., §§ loi, 102.) (See §56.) § 92. Liability of Holders of Full-Paid Stock. Full-paid stock is that for which the company has received its par value in cash, services or property appraised by the directors in good faith. (S. C. L., § 55.) Ordinarily in this state the only liability of holders of full-paid stock is to em- ployees of the company, though the additional obligations of stockholders of a full liability company may be obtained if for any reason it is desired by the procedure set forth in sub- division (b) of this section. (a) Liability to Employees. Holders of full-paid stock are liable for debts due and owing to laborers, servants or employees other than contractors, for services performed by them for the corporation. (S. C. L., § 57.) The statute, being penal in its nature, has received a strict construction, The term "employees" has been defined as "those employed in subordinate and humble capacities and to whom the hard- ships would be great if their wages and salaries were not promptly paid." To these only, and not to every one who is engaged by a corporation, the stockholders are liable. Bris- tor V. Smith, 158 N. Y. 157 (1899). This liability may be enforced against any stockholder. In order to take advantage of his rights against the stock- holders an employee must, within thirty days after termi- nation of his service, notify the stockholder or stockholders to be held, in writing, of his intention to hold him or them liable. He must then obtain judgment against the corporation and have execution returned unsatisfied. After this he may bring action against the stockholder, but must begin the same within thirty days from that time. (S. C. L., § 57.) (b) Ftdl Liability Companies. Full-paid stock may be subjected to liability to general corporate creditors if express provision to that effect is made in the original charter, or by 102 NEW YORK CORPORATIONS.. amendment passed by resolution of two-thirds of the board of directors with unanimous written consent of the stockholders. The certificate of any such amendment must be signed and acknowledged by the president and treasurer or by the direc- tors, be accompanied by the authorizing resolution and consent, and be filed in the same offices as the original certificate of in- corporation. The stockholders are then severally liable for all corporate debts and liabilities. As a preliminary to holding any such stockholder, judgment must be obtained against the corporation in an action begun within two years after the debt became due and execution returned unsatisfied. Adams v. Slingerland, 87 App. Div. 312 (1903) ; Sanford v. Rhoads, 113 App. Div. 782 (1906). A stockholder who pays the debt is entitled to contribution pro rata from the other shareholders and may recover from them in a joint or several action. (B. C. L., § 6.) There are few full liability companies in the state since they lack the chief attrac- tive feature of the ordinary corporate form. § 93. Liability of Holders of Stock Not Full Paid. "Every holder of capital stock not fully paid, in any stock corporation, shall be personally liable to its creditors, to an amount equal to the amount unpaid on the stock held by him for debts of the corporation contracted while such stock was held by him." (S. C. L., § 56.) It is a secondary liability, however. Action must be begun against the corporation within two years after the debt falls due, and execution on the judgment recovered must be returned unsatisfied, in whole or in part, before suit may be brought against the stockholder. The time limitation of the statute will be excused where compliance has been rendered impossible by law, as where creditors have been enjoined in dissolution proceedings. Lang v. Lutz, 83 App. Div. 534 (1903). The debt must also have been payable within two years from the time it was contracted and the stockholder's STOCKHOLDERS. IO3 liability terminates unless action is brought within two years after he ceases to be a stockholder. (S. C. L., § 59.) § 94. Personal and Representative Liability. No person holding stock as an executor or administrator, guardian or trustee is personally liable as a stockholder unless he voluntarily invested the trust funds in the stock so held. The funds in the hands of one holding in any of such repre- sentative capacities are liable to the same extent as the testa- tor, intestate ward or person interested in the trust would be if alive and capable of acting. A pledgeor of stock as collateral security is considered the holder thereof and is liable as a stockholder. (S. C. L., § 58.) § 95. Relations of Stockholders to Each Other. Stockholders owe no duty to each other as a result of their relation. Colonizer's Realty Co. of Brooklyn v. Shatz- kin, 129 App. Div. 609 (1908). As such, they are not re- sponsible or liable in any way for the acts of the other stock- holders of the company. In the purchase and control of his stock each acts entirely for himself and not as trustee for the others. Where, however, a majority of the stockholders, act- ing in bad faith, carry into effect a scheme which even if lawful on its face, is intended to defraud the minority of their rights, the courts will interfere. Flynn v. Ry., 158 N. Y. 493, 507 (1899) ; Farmers Loan & Trust Co. v. Ry., 150 N. Y. 410 (1896). (See § 97.) § 96. Relations of Stockholders to the State. The New York courts, while recognizing the time-honor- ed doctrine that a corporation is an entity apart from its stock- holders, nevertheless face the fact squarely that the abstract idea of a corporation, the legal entity, is itself a fiction and that the state gives the charter "not to the 'almost nebulous fiction of our thought,' but to the corporators, the acting and 104 NEW YORK CORPORATIONS. living men * * * ^-q redound to their benefit and add energy to their capital." People v. N. R. S. R. Co., 121 N. Y. 582, 622 {1890). Therefore when the acts of the stock- holders as a body are illegal, "though the proceeding by infor- mation be against the corporate body, it is the acts or omis- sions of the individual corporators that are the subject of the judgment of the court" in such a case. People ex rel. Bishop V. K. & M. T. Ry Co., 23 Wend. 193, 205 (1840).* § 97. Powers of the Majority. Unless a greater proportion is required by statute, a ma- jority of the stockholders, when acting within the chartered powers of the corporation, may bind the minority. They may not, however, so exercise their powers as to oppress the mi- nority or defraud them, and if they attempt to do so the courts will interfere, at the suit of a minority stockholder. Farmers Loan & Trust Co. v. Ry., 150 N. Y. 410 (1896). To warrant such interposition, "a case must be made out which plainly shows that such action is so far opposed to the true interests of the corporation itself as to lead to the clear inference that no one thus acting could have been influenced by any honest desire to secure such interests, but that he must have acted with an intent to subserve some outside purpose, regardless of the consequences to the company, and in a manner incon- sistent with its interests." Gamble v. Water Co., 123 N. Y. 91, 99 (1890). Where, as is usually the case, the management of corpor- ate afifairs is entrusted to the board of directors and these have the usual powers, their control is exclusive and not even a majority of the stockholders can override them. McCuUough V. Moss, 5 Denio 575 (1846). They cannot be removed, ex- cept for improper use of their power; they need not obey the instructions of the stockholders and the only remedy in event of dissatisfaction is to await the next annual meeting and elect new directors. If desired, however, the powers and *This case contains a carefully considered discussion of this subject and a clear presentation of the law as it stands In New York. STOCKHOLDERS. IO5 tenure of office of the directors may be abridged or modified by proper charter or by-law provision. This, however, is but seldom done. (See § 26.) § 98. Voting Trusts. The statutes provide that any stockholder may, by writ- ten agreement, transfer his stock to one or more persons for the purpose of giving such person or persons the power to vote thereon, upon stated terms and conditions, for a period not exceeding five years. A duplicate of any such voting trust agreement must be filed in the principal office of the corpora- tion and remain open to inspection of stockholders during business hours, and any other stockholder may execute a like agreement and transfer his stock to the same person or per- sons and thereupon participate in all the terms, conditions and privileges of the voting trust. The stock participating in any such voting trust agree- ment must be actually transferred to the trustees and be sur- rendered by them to the corporation for cancellation, the new certificates issued to the trustees stating the fact that such cer- tificates are issued pursuant to the trust agreement. The entries on the books of the corporation must also note the same fact. The trustees are then empowered to vote the stock transferred to them to such extent — and so far only — as they are author- ized thereto by the terms of the agreement. (G. C. L., § 25.) The trustees may collect the dividends on the stock held by them under the trust agreement, but must account for such dividends to the equitable owners. The voting trust is usually employed to maintain a certain management or policy for a definite period. It may be made an efficient mode for the protection of minority interests by securing an administration for a term of years satisfactory to all parties concerned. (See Form 109.) CHAPTER X. STOCKHOLDERS' MEETINGS. § 99. General. The corporate acts of stockholders may be performed only in duly assembled stockholders' meetings. Some varia- tion of this general rule is found in the provisions of the New York statutes permitting various corporate acts to be taken by unanimous written consent of the stockholders without a meeting, as for example, to increase capital stock, change the location of the principal office, etc. This is, however, by express statutory permission and does not apply to corporate acts not expressly included. § 100. Place. "A corporation being the mere creation of local law, can have no legal existence beyond the limits of the sovereignty where created" (Paul v. Va., 8 Wall. 168 [1868]), hence stockholders cannot perform a corporate act, binding upon those who do not participate in it, outside the jurisdiction creating the corporation, except by express statutory permis- sion (Ormsby v. Mining Co., 56 N. Y. 623 [1874]), or by consent of all the stock. Stockholders' meetings outside the state are not provided for by the New York statutes, and such meetings must, therefore, be held within the state unless all the stock consents to or participates in the meeting elsewhere. In such case, the stockholders, all being partici- pants, or agreeing to the place of meeting, are estopped to deny the validity of acts done at the meeting so held. Handley v. Stutz, 139 U. S. 417 (1890); Morawetz Private Corp., § 488. 106 STOCKHOLDERS MEETINGS. IO7 Within the state, the place of meeting should be designat- ed by the by-laws. The place for holding the annual meeting must be so designated. (S. C. L., § 25.) Special elections ot directors must be held at the principal office. (G. C. L., §30.) This, too, is the usual place for meetings of stockholders. Meetings cannot be held at an unreasonably inconvenient time or place. § lor. Notice. It is to be noted that there is a distinction, frequently overlooked, between the call for a meeting and the notice thereof. Regular meetings being directed by the by-laws, re- quire no other call or authorization, but usually require notice. Special meetings, however, require both call and notice. They must be called in the manner prescribed by charter or by-laws, as, for instance, by the president, by action of the board, by written call of a certain number of the directors, or a certain percentage of the stock, etc. (See Forms 27, 40.) The notice then follows this call and is merely a formal, pre- scribed announcement of the meeting authorized by the call. (See Form 41.) Unless the statutes provide to the contrary, due notice must be given to every stockholder of all stockholders' meet- ings. Such notice should give the time and place of meeting, and for special meetings, at least, the business to be transacted thereat. Notice of meetings may be waived by unanimous consent of the stockholders. Usually the by-laws prescribe the notice to be given of stockholders' meetings. In New York, however, the statutes provide the notice to be given for certain specified meetings and this required notice cannot be set aside by the by-laws, though additional requirements, not inconsistent with the statutes, may be provided if desired. (G. C. L., § 11.) The statutory requirements as to notice are as follows : (a) Waiver of Notice. "Whenever * * * a, cor- poration is authorized to take any action after notice to its I08 NEW YORK CORPORATIONS. members or after the lapse of a prescribed period of time, such action may be taken without notice and without the lapse of any period of time, if such action be authorized or approved, and such requirements be waived in writing by every member of such corporation or by his attorney there- unto authorized." (G. C. L., §42.) (See Form 27.) (b) Notice of Annual Meeting. Notice of annual meeting must be given by: (i) Publication of notice for at least once a week for two successive weeks immediately preceding such election in a newspaper published in the county where such election is to be held. (2) Such other notice as the by-laws prescribe. (S. C. L., §25.) No penalty is prescribed for failure to publish the re- quired notice of the annual meeting. The larger corpora- tions, however, usually comply with the statute requirements. Small corporations frequently omit publication. This may be done safely only where there is complete unanimity on the part of the stockholders. If publication is not made, great care should be taken to see that each stockholder is duly noti- fied in accordance with the requirements of the by-laws. (See Forms 42-45.) (c) Notice Same as for Annual Meeting. Meetings for the following purposes require the same notice as annual meeting : (i) To mortgage corporate property. (S. C. L., § 6.) (2) To sell the entire property to another corporation. (S. C. L., §16.) (3) To create preferred stock. (S. C. L., §61.) (4) To extend corporate existence. (G. C. L., § 37.) (5) Special meetings to elect directors (S. C. L., § 25; G. C. L., § 29), except when called by stockholders on failure of directors so to do. (See next subdivision (d) ; also § 112.) (d) Stockholders' Notice of Special Election of Direc- tors. If directors are not elected at the annual meeting or at STOCKHOLDERS MEETINGS. IO9 a special meeting called by the directors, within one month thereafter (See § 112), any member may call an election on notice as required for the annual meeting, together with : ( 1 ) Personal service of notice on each stockholder two weeks before the meeting, or, (2) Service by mail directed to each stockholder at his last known post-office address two weeks before the meeting. (G. C. L., § 29.) (See Form 92.) (e) Notice of Meeting for Increase or Decrease of Capital Stock. For meetings to increase or decrease capital stock, notice must be signed by the president or vice-president and the secretary stating the time, place, and object of the meeting and the amount of the increase or reduction proposed, and a copy of such notice must be : (i) Published once a week for at least two successive weeks in a newspaper in the county where the principal busi- ness office is located, if any is published therein. (2) Be mailed to each stockholder at his last known post-office address at least two weeks before the meeting, or be personally served upon him at least five days before the meeting. (S. C. L., § 63.) (See § 86; also Forms 84, 85.) (f) Notice of Meeting to Change Number of Directors. Two weeks' written notice served personally or by mail. (S. C. L., § 26.) (g) Notice of Meeting to Alter or Extend Business. Same as for increase of stock. (S. C. L., §§ 18, 63.) (h) Notice of Meeting for Dissolution. The follow- ing requirements must be observed for notification of meeting for dissolution : ( 1 ) Publication of notice must be made in one or more newspapers published and circulating in the county of the principal office, at least once a week for three successive weeks next preceding the meeting. (2) On or before the first day of publication, a copy rriust be served personally on each stockholder or mailed to his last known post-office address. no NEW YORK CORPORATIONS. (3) Any adjournment of such meeting must be pub- lished in papers in which original call appeared. (G. C. L., § 221.) (See § 56.) (i) Notice of Meeting to Guarantee Bonds of Another Corporation. Notice of such meeting must be signed by a majority of the directors and served personally or by mail on each stockholder at least sixty days before the meeting. (S. C. L., § 8.) (See § 68.) (j) Notice of Meeting When Not Otherwise Provided. Where no special provision is made by statute, charter or by-laws as to notice of a meeting, such meeting must be noti- fied in the same manner as is the annual meeting. (G. C. L., §43-) § 102. Quorum. The by-laws should fix the amount of stock which must be represented in order to constitute a quorum. (G. C. L., § II, subdiv. 5.) This may be any desired amount except at the meeting for election of directors. At such meeting the statute expressly provides that "a. plurality of the votes at such election" shall be sufficient to elect. Under this pro- vision, any number present at a duly called meeting for elec- tion of directors, no matter whether they constitute a majority of the stock or a by-law quorum, or not, may act, and a plurality of those voting elect. (S. C. L., § 25; G. C. L., §§ 29, 30.) Matter of Rapid Transit Ferry Co., 15 App. Div. 530 (1897). At general meetings, unless the charter or by-laws provide for a quorum, the common law rule prevails and the share- holders who actually assemble at any properly convened meet- ing, without regard to their number, constitute a quorum for the transaction of business, and a majority of such quorum can act. Morawetz Private Corp., § 476; Field v. Field, 9 Wend. 395 (1832). stockholders' meetings. Ill § 103. Right to Vote. Every stockholder is entitled to one vote at stockholders' meetings for every share of stock standing in his name on the books of the corporation. Only stockholders of record may vote at stockholders' meetings unless otherwise provided in the charter. (G. C. L., § 23; S. C. L., § 32.) (See § 91a.) The stockholders, by by-laws adopted at any annual meet- ing or at a special meeting, duly called for the purpose, may prescribe a period of not over forty days, prior to stock- holders' meetings, during which no transfer of stock may be made on the corporate books. (G. C. L., § 23.) The result of this provision is that, while transfers may still be made between the date of the closing of the books and the holding of the meeting, such transfers are not entered on the corpor- ate records until after the election, and do not carry with them the right to vote at the approaching meeting nor divest the stockholder of record of his right to appear and vote thereat. (See § 105.) Where stock is pledged as collateral security the pledgee must issue a proxy to the pledgeor (G. C. L., § 23), for the latter remains the real stockholder with full liabilities. (S. C. L., § 58.) "A stockholder has a legal right to vote upon a measure at a meeting of stockholders, even though he has a personal interest therein separate from other stockholders. In such a meeting each shareholder represents himself and his interests solely and he, in no sense, acts as trustee or representative of others." Gamble v. Water Co., 123 N. Y. 91, 97 (1896); Colonizer's Realty Co. of Brooklyn v. Shatzkin, 129 App. Div. 609 (1908). A corporation which holds stock may legally vote upon it through its duly authorized representatives. Oel- bermann v. Railway, 'j'^ Hun 332 (1894).. Since the right to vote depends upon the corporate records, it is important that they be easily accessible at the time of the election. Any stockholder may demand their production at any meeting. (G. C. L., § 23.) It is a common practice 112 NEW YORK CORPORATIONS. where the number of shareholders is large to prepare an alpha- betical list for ready reference showing the number of shares owned by each. In the event of challenge, however, the cor- porate records and not the secretary's list, must be appealed to and are conclusive of the right to vote so far as the corporation is concerned. (See § 109.) It was formerly held that under section 23 of the Gene- ral Corporation Law, any desired limitations of the voting right might, by due charter provision, be imposed upon any class or classes of stock, or the right to vote might be with- held entirely. Now, however, acting under an opinion of the Attorney General, holding that limitations of the voting right are not authorized by statute (Matter of Oak Knitting Co., re,- port of Atty. Gen'l, 1908; also Matter of Second United Cities Co., report of Atty. Gen'l, 1907), and confirming decisions in the lower courts (People ex rel. Royal Securities Co., 1908 [not yet reported] ), the Secretary of State refuses to file char- ters containing limitations of any kind upon the voting right of any class or classes of stock. A careful reading of the law bearing on this subject does not seem to justify the Attorney General's construction, and the matter cannot be regarded as finally settled until it has been passed upon by the higher courts. § 104. Proxies. Any member of a corporation, other than a religious cor- poration, may vote on all or any number of shares of his stock by proxy. (G. C. L., §§ 23, 26.) As the right is not a com- mon law right, but depends entirely upon statute (People v. Twaddell, 18 Hun 427, 430 [ 1879] ) , the terms of the law must be complied with strictly. In re Barker, 6 Wend. 509 (1831). The proxy must be in writing and be executed by the stock- holder or his duly authorized attorney. (See Forrns 26, 36- 38.) It expires at the end of eleven months unless otherwise expressly provided in the instrument. The usual proxy is re- stockholders' meetings. 113 vocable at will (G. C. L., § 26), and even a proxy coupled with an interest and, in terms, irrevocable, has been held invalid under the statutory provisions forbidding issuance of a proxy for money or anything of value. (G. C. L., § 23.) Matter of Germiicide Co., 65 Hun 606 (1892). The sale of proxies is a misdemeanor. (Pen. Law, § 668.) A person need not be a stockholder to act as proxy. (G. C. L., § 3.) In re Light- hall Mfg. Co., 47 Hun 258 (1888). The right to substitute another in his stead may be given to the holder of a proxy by express provision in the instrument. Election inspectors have no power to determine the genu- ineness of proxies. Their duties are entirely ministerial and if the proxies are regular upon their face they must receive them. In re Cecil, 36 How. Prac. 477 (1869). (See § 109.) Any inspector of election or other officer presiding at an election of directors, or any member present, may require the person presenting a proxy to swear that he has not, either di- rectly, indirectly or impliedly, given any promise or any sum of money or anything of value to obtain such proxy, and that he has not received any promise or any sum of money, or any- thing of value to influence his vote, or as a consideration there- for. (See Form 91.) All proxies, together with any oaths taken as above, must be filed in the records of the corporation. (G. C. L., § 27.) The use of proxies has become so common that in the larger corporations a blank form — on occasion, with the name of the party to act printed in — is usually sent to each stock- holder with the notice of the annual meeting. (See Forms 26, 36-38.) § 105. Closing Stock Books. The stockholders may provide in the by-laws that the stock book shall be closed and no transfers registered for a period not exceeding forty days prior to stockholders' meetings. (G. C. L., § 23.) Under this provision the books are usually closed 114 NEW YORK CORPORATIONS. from ten to forty days before the annual meeting. No form- ality is required in closing the books and no entry of closing is made therein. After the date fixed upon, the transfer agent simply refuses, for the prescribed period, to register transfers. The stockholders of record then vote at the meeting regardless of any changes of stock ownership after the books were closed. The object of closing the books is to avoid the complications as to notice of meeting, etc., that might otherwise arise, and also to give the secretary time to prepare a correct list of share- holders for use at the meeting. (See §§ 103, 136.) § 106. Election of Directors. The directors are elected at the annual meeting or at a special meeting called for the purpose. Such meetings are peculiar in that the number of. stockholders present — without regard to the amount of stock represented, or any by-law regulations — constitute a quorum for the election of directors and a plurality of them may act. (S. C. L., § 25.) (See § 102.) Notice of meetings for election of directors is pre- scribed by statute. (S. C. L., § 25.) (See § loib, c, d.) Voting at the election of directors is usually by ballot. § 107. Cumulative Voting. The certificate of incorporation may provide that each stockholder shall be entitled to as many votes as he has shares of stock, multiplied by the number of directors to be elected, and that he may cast all of such votes for a single director or distribute them among two or more as he sees fit. (G. C. L., § 24. ) This system of voting, known as cumulative voting, is a most effective method of protecting minority interests, en- abling such interests to secure representation on the board of directors. For instance, under the usual plan of voting if one hundred shares of stock participate in an election of a board of five directors, a stockholder owning twenty shares w*ill, in the face of opposition, have no possible chance of electing a di- stockholders' meetings. 115 rector to represent his interests. He may cast twenty votes for each member, which, as against the eighty votes opposed, are entirely ineffective. If, however, the cumulative method pre- vails, instead of dividing his votes among the five candidates, he may cast his cumulated votes — which number one hundred — for his own candidate, and by no possible combination among the owners of the other eighty shares could this candidate be defeated. § 108. Inspectors of Election. The election of directors must be conducted by two or more inspectors (in re Lighthall Mfg. Co., 47 Hun 258 [1888]), who need not necessarily be stockholders. For the election of directors at the first annual meeting and for any preceding stockholders' elections to fill vacancies among the directors, the inspectors are appointed by the board of di- rectors named in the charter. Inspectors at subsequent elec- tions are appointed as prescribed in the by-laws. If any in- spector refuses to serve, or neglects to attend the election, or if his office becomes vacant, the meeting may appoint a sub- stitute, unless the by-laws otherwise provide. Inspectors may themselves be candidates for office. Ex parte Willcox, 7 Cow. 412. Officers and directors, except of moneyed corporations, are eligible to appointment as inspectors. (S. C. L., § 31.) Inspectors must, before entering on the discharge of their duties, take and subscribe an oath to faithfully perform their duties with strict impartiality and according to the best of their ability. Violation of this oath is punishable as a misdemeanor. (Pen. Law, § 668.) The oath must be filed with a certificate of the result of the election, in the office of the clerk of the county where the election was held. (S. C. L., § 31.) (See Forms 46-48.) Filing fee, 6 cents. There is no penalty for failure to file this certificate and it is frequently neglected in practice. It has been held that the provision as to filing the oath is directory only and that failure to comply will not invalidate Il6 NEW YORK CORPORATIONS. the election. Bank v. Scott, 53 App. Div. 65, 72 (1900). Nor will an election be set aside on the ground that the inspectors were not sworn in the form prescribed by statute. Matter of the Election of Directors of the Chenango Ins. Co., 19 Wend. 635 (1839). The best practice, however, conforms strictly to the requirements of the statutes, both as to the form of oath and the filing of oath and report. In the discharge of their duties, inspectors act in a purely ministerial capacity. Their business is to see that the election is conducted in a regular manner by persons with an apparent right to vote. Matter of Cecil, 36 How. Pr. 477 (i86g). In practice, unless there is some question as to the rights of those desiring to vote at the election, the duties of the in- spectors are very simple. They are first sworn in due form (see Form 46) and then take entire charge of the proceedings, superintending the preparation and collection of ballots, count- ing the votes w'hen cast and announcing the results of the election. They then prepare, subscribe and certify to their report (see Forms 47, 48), and their duties are complete. In the absence of objection the inspectors must receive any vote offered unless obviously improper or fraudulent. If, however, any vote is challenged, they must require that the "books and papers containing the record of membership of the corporation" be produced "and all persons who may ap- pear from such books to be members of the corporation may vote at such meeting." (G. C. L., § 23.) (See § 109.) § log. Challenges. If illegal votes are offered at a corporate election, objec- tion must be raised at the time or the right to question their validity is lost. In re Election of Directors of Chenango Co. Ins. Co., 19 Wend. 635, 637 (1839) ; Vandenburgh v. Ry. Co., 29 Hun 348 (1883). If the right to vote is challenged, the inspectors must demand the corporate books, and, if they can be had, determine stockholders' meetings. 117 therefrom the rights of the member. They are not allowed to go behind the records to decide his rights. (G. C. L,, § 23.) Ex parte L. I. Ry., 19 Wend. 37 (1839) ; Matter of Mutual Fire Ins. Co., 51 App. Div. 163 (1900). (For powers of court in similar cases, see Strong v. Smith, 15 Hun 222 [1878], Affd. 80 N. Y. 637 [1880].) The sale of votes is illegal and a misdemeanor. (Pen. Law, § 668.) Any stockholder suspected of having promised his vote for a consideration may be challenged by an election inspector, by the presiding officer or by any member present and compelled to swear that he has not, either directly, indi- rectly or impliedly, received any promise or any sum of money or anything of value to influence his vote or as a consideration therefor. This oath may be administered by the election in- spector or by the presiding officer. (G. C. L., § 27.) (For oath of stockholder. Form 90.) § no. Contested Elections. Proceedings to contest an election may be by quo war- ranto (Code Civil Pro., § 1948 et seq.), or by summary action of the Supreme Court on application thereto. (G. C. L., § 32.) ( See Form 94. ) These two methods exclude all others. Ry. Co. v. Kay, 14 Abb. Pr. (N. S.) 191 (1873). If the election has been conducted in good faith and the wishes of the stockholders fairly expressed, no mere infor- mality will vitiate it. Philips v. Wickham, i Paige 590, 600 (1829) ; Matter of Election of Directors of the Chenango Co. Ins. Co., supra. If a candidate receives a majority of the legal votes, the fact that illegal votes were cast will not defeat the election. In re Argus Co., 138 N. Y. 557 (1893). Where, however, votes have been erroneously received or rejected, which would have changed the result of the election, the court must de- clare the election void and a new one must be held. People ex rel. Putzel v. Simonson, 61 Hun 338 (1891). Only per- Il8 NEW YORK CORPORATIONS. sons whose rights have been violated may complain of the illegality of the election. Matter of Syracuse C. & N. Y. Ry., 91 N. Y. I (1883). § III. Effect of Failure to Elect Directors. "If the directors shall not be elected on the day desig- nated in the by-laws or by law, the corporation shall not for that reason be dissolved; but every director shall continue to hold his office and discharge his duties until his successor has been elected." (G. C. L., § 28.) Many of the smaller New York corporations take advantage of this provision, and, by allowing the old board to hold over and to fill vacancies by vote of its own members, escape the statutory requirements as to inspectors and publication of notice. As long as there is no formal protest by a stockholder, there is no objection to this practice. In one case an omission to elect directors for eight years was upheld. Geneva Mineral Springs Co. v. Cour- sey, 45 App. Div. 268, 275 (1899); Phila. etc. Co. v. Hotchkiss, 82 N. Y. 471, 474 (1880) ; Beardsley v. Johnson, 121 N. Y. 224 (1890). The powers of directors who hold over on account of a failure to elect their successors are the same in every respect as if their term of office had not expired. As to the powers of a stockholder in such a case, see People ex rel. Walker V. Albany Plospital, 11 Abb. Pr. (N. S.) 4 (1871). § 112. Special Elections. The statutes provide that the directors shall forthwith call a special meeting for the election of directors when for any reason they have not been chosen on the day fixed for the regular election. Notice for this meeting is the same as for the annual meeting. (G. C. L., § 29.) If the directors do not call such meeting within one month of the date on which the annual meeting should have been held, or if such meeting results in a failure to elect, any stockholder may call a meeting for the purpose of electing directors. (Id.) (See § loid; also Form 92.) STOCKHOLDERS MEETINGS. II9 "Such meeting shall be held at the office of the corporation, or if it has none, at the place in this state where its principal business has been transacted, or if access to such office or place is denied or cannot be had, at some other place in the city, vil- lage or town where such office or place is or was located." (G. C. L., § 30.) At such meeting the members attending shall constitute a quorum and any business which might have been passed upon at the annual meeting may be transacted. (Id. ) If the corporate records are not accessible, each member ofifering to vote must be sworn to the effect that he is bona Me a member and his oath must also state the number of shares standing in his name. (See Form 93.) All such affidavits must be attached to the return of the inspectors for filing with the county clerk. (G. C. L., § 31.) Special meetings of the stockholders to fill vacancies on the board, when such vacancies are to be filled by the stock- holders, may be called at any time as is any other special meet- ing, except that notice thereof must be the same as for the an- nual meeting. (S. C. L., § 25.) (See § loib.) CHAPTER XI. DIRECTORS. § 113. Number. The number of directors must not be less than three. No maximum limit is prescribed. The number of directors and the names of those who are to serve for the first year are set forth in and fixed by the charter. (B. C. L., § 2.) The num- ber may be changed by charter amendment. (See §§ 72, loif.) If the number is increased, the board itself elects the additional members to hold for the balance of the year and until their successors are elected, and if the board is classified (See § 115), with terms expiring at different times, the new directors must be apportioned among these classes so as to preserve as nearly as possible the same relative proportions. (S. C. L., § 26.) § 114. Election. Directors are elected at the annual meeting, or in event of failure of that meeting, at a special meeting called for the purpose. They hold office until their successors are elected. (See §§ 106-112.) § 115. Classification. "At least one-fourth in number of the directors of every stock corporation shall be elected annually." (S. C. L., § 25.) Under this provision, the board of directors may be di- vided into two, three or even four classes, if the number of directors is such as to permit ; each consisting of not less than one-fourth the whole number of directors and one of these DIRECTORS. 121 classes to be elected each year. Such classification is common in practice, and is designed to prevent the sudden changes of policy that might result if the entire board were elected each year. § 1 1 6. Vacancies. Vacancies occurring in the board are to be filled as pre- scribed in the by-laws. (S. C. L., § 25.) Usually the board is empowered to fill such vacancies, but unless the by-laws so prescribe, or the power is given the board by charter provi- sion, the directors cannot act in the matter and vacancies must be filled by the stockholders. This may be done at a special stockholders' meeting for election of directors (see § 112), or if the directors remaining are sufficient to constitute a quorum and to comply with the statutory requirement that the number of directors must not be less than three, the vacancies may be left unfilled until the next annual meeting. Vacancies created through an increase in the number of directors must be filled by vote of the majority of the directors in office at the time of the increase. (See § 113.) § 117. Qualifications of Directors. Every director must be a stockholder unless otherwise pro- vided in the charter or by-laws. (S. C. L., § 25.) Policy holders of an insurance company are eligible to election as di- rectors of the company, "whether or not they be stockholders." (Id.) At least one director must be a resident of the state. (G. C. L., § 34.) People ex rel. Gales v. McDonough, 28 Misc. 652 (1899). (For first directors, see § 24.) If possessed of these statutory qualifications, any one cap- able of acting as an agent of the company may serve as a direc- tor. Married women and aliens may act, and, generally, any one who may act as an agent. 122 NEW YORK CORPORATIONS. § ii8. Compensation of Directors. In the absence of express agreement, the directors are not entitled to compensation for their services as such. This is an application of the general rule of trusts. Mather v. E. M. Co., ii8 N. Y. 629, 632 (1890). Even where a director performs services outside those ordinarily performed, the tendency of the courts is to hold that, in the absence of express agreement, they must be treated as undertaken through zeal for the company's welfare rather than through expectation of reward. Stout v. Security Co., 82 App. Div. 129 (1903). See also Bagley v. Ry., 165 N. Y. 179 (1900). Directors are not debarred from becoming employees of the company, and, as such, they are entitled to reasonable com- pensation. But as in fixing it they are in the position of trustees dealing with themselves in respect to their trusts, their action is subject to question by the stockholders and re- view by the court. Fitchett v. Murphy, 46 App. Div. 181, 185 (1899). Where directors for the first year hold over because of their neglect or refusal to adopt the by-laws re- quired to enable the stockholders to hold the annual election for directors, all their acts while so holding over, done for or in the name of the corporation designed to charge upon it any liability or obligation for the services of any such director, or any officer or attorney or counsel appointed by them, is held fraudulent and void. (S. C. L., § 27.) § iig. Powers of Directors. The general management of the corporate business is in the hands of the directors. (G. C. L., § 34.) Speaking gene- rally, the shareholders cannot act for the corporation, either individually or collectively, and have no power, unless given by statute, to interfere with the directors in the conduct of corporate business. Conro v. Iron Co., 12 Barb. 27, 63 (1851). The powers of the directors may, however, be limit- ed in any particular which does not exempt them from any DIRECTORS. 123 legal obligation or duty, by suitable provision in the articles of incorporation (G. C. L., § 10) or later by by-law provisions. (G. C. L., § II.) Within such limits, and in the management of the ordinary and regular business of the corporation, the board of directors is supreme. Hoyt v. Thompson, 19 N. Y. 207, 216 (1859). They are not amenable to motions or reso- lutions of the stockholders, or to removal, unless so provided in the certificate of incorporation. Directors have no right to remove fellow directors. Raub v. Gerken, 127 App. Div. 42. The powers of the directors, though broad, do not ex- tend to matters involving a fundamental change in business or in the constitution of the company, even though within the charter powers, unless such power is expressly given by stat- ute, charter or by-laws. Ry. Co. v. Allerton, 85 U. S. 233 (1873)- The directors may act only as a board and when regu- larly assembled at a board meeting. Neither individually nor collectively are they agents of the corporation, unless duly assembled as its executive board. Where, however, they are required by statute to sign a notice of meeting, a certificate, or to do any other purely ministerial act, no meeting is neces- sary. In such matters compliance with the letter of the statute, which only requires the individual signatures or certification of directors, is sufficient. Burden v. Burden, 159 N. Y. 287, 302 (1899). (G. C.L., §43-) The directors may make necessary by-laws not inconsis- tent with those adopted by the stockholders. (G. C. L., § 34.) (See Chap. IV, "By-Laws.") (For powers as to dividends, see § 88.) A director has an absolute right to inspect corporate books. People ex rel. Leach v. Central Fish Co., 117 App. Div. ^7 (1907)- § 120. Powers of Directors in Case of Dissolution. Upon dissolution, the directors become trustees for the creditors and stockholders with full power to settle the cor- 124 NEW YORK CORPORATIONS. porate affairs; collect and pay outstanding debts and divide any surplus among those entitled thereto. They have power to sue for the debts and property of the corporation as such trustees and are jointly and severally liable for the corporate assets which come into their hands. (G. C. L., § 35.) § 121. Relations of Directors to Corporation and Stock- holders. "There seems to be a mistaken notion in some minds that the relation which exists between directors of a corporation, and the corporation is that of principal and agent. This is not true. Such relation is, and always was, as to the property of the corporation, fiduciary in character, and while not strictly that of trustee and cestui que trust, yet it partakes of such na- ture. The agency of the directors rests solely in their dealings with third persons, when they represent the corporation as its agents ; but in dealings with the corporation they act in a fiduci- ary capacity for the shareholders, as it is to their care that the shareholders, acting through the corporate entity, intrust the control of its property and the management of its business." Mabon v. Miller, 81 App. Div. 10, 17 (1903), per Hatch, J. The result of this doctrine is "that the utmost good faith" is required in dealings between the directors and the company. The New York courts enforce this rule with a vigor not in accord with the weight of authority in the United States at large. While the majority of courts hold that the corpora- tion is bound by a contract with a director if entered into in good faith, the settled doctrine in this state is that the court "will not stop to inquire whether the contract or transaction was fair or unfair. It prevents frauds by making them as far as may be impossible * * * j^ weakens the temptation to dishonesty or unfair dealing on the part of the trustees by vitiating, without attempt at discrimination, all transactions in which they assume the dual character of principal and represen- tative." Munson v. Ry., 103 N. Y. 58, 74 (1886) ; also Car- DIRECTORS. 125 penter v. Taylor, 164 N. Y. 171, 178 (1900). But see Ven- noli V. 67th St. Atelier Building, 55 Misc. 222 (1907). It makes no difference that only one director is party to the con- tract and that all the other directors, some of whom were per- sonally interested, voted for it. Contracts of this nature are, however, binding on the director at the option of the corporation. Veeder v. Horst- mann, 85 App. Div. 154, 159 (1903). It follows, therefore, that contracts between the corporation and a director are void- able and not void. Barr v. Ry., 125 N. Y. 263, 275 (1891). They may be annulled if desired by the corporation, but if nothing is done in avoidance, the transaction remains. Any action looking toward avoidance of such a contract must be taken promptly after knowledge of the conditions. "If knowledge and opportunity concur, * * * delay, if un- reasonable, or attended by retention and enjoyment of the re- sults of the transaction may be deemed equivalent to an adop- tion and ratification of that which before was the subject for action in repudiation of any obligation. The rule is not de- signed to work injustice, but to protect those who repose confi- dence in others holding toward them fiduciary positions and to whose care have been confided the management and custody of property and interests." Id., per Gray, J. When the contract is avoided by the corporation, this latter is liable for any bene- fits received. Thomas v. Ry., 109 U. S. 522 (1883). In some of the larger corporations contracts in which the directors are interested are permitted and sanctioned by ex- press by-law provision. Thus in the by-laws of the United States Steel Corporation is found the following: "Inasmuch as the directors of this Company are men of large and diversi- fied business interests, and are likely to be connected with other corporations with which from time to time this Company must have business dealings, no contract or other transaction be- tween this Company and any other corporation shall be affected by the fact that directors of this Company are interested in. 126 NEW YORK CORPORATIONS. or are directors or officers of, such other corporation, if, at the meeting of the board, or of the committee of this Company, making, authorizing or confirming such contract or transac- tion, there shall be present a quorum of directors not so inter- ested ; and any director individually may be a party to, or may be interested in, any contract or transaction of this Company, provided that such contract or transaction shall be approved or be ratified by the affirmative vote of at least ten directors not so interested." § 122. Directors' Liability for Negligence. The directors are bound to exercise care and prudence in the execution of their trust to the same degree as ordinarily exercised by men of common prudence in their own affairs. Hanna v. Peoples Bank, 35 Misc. 517, 521 (1901).* They are therefore personally liable for and must make good every loss arising from their failure to exercise such care or from breaches of the by-laws.f Bowers v. Male, 186 N. Y. 28 (1906). The proper party to enforce this liability is the cor- poration, but where, for any reason, it Will not or cannot sue, individual stockholders may bring suit. Brinckerhoff v. Bost- wick, 88 N. Y. 52, 59 (1882). It is well settled, however, that directors are not liable for losses due to mere mistakes in judgment (Id.), nor for theft or accidents not due to negligence on their part. Briggs v. Spaulding, 141 U. S. 132 (1891). § 123. Statutory Liability of Directors. The statutory liability of directors to the corporation and stockholders is as follows: (a) For making dividends except from surplus profits, or for withdrawing or in any way paying to the stockholders or any of them any part of the capital, or for reducing the capital stock in any unauthorized Way, the directors in whose * For a full discussion of this rule, see Hun v. Cary, Sa N. Y. 65, 71 (18S0). t For the extent of their liability, see Bloom v. I.oan Co., ijs N. Y. 1 14, 121 (1897). DIRECTORS. 127 administration it happened are jointly and severally liable to the corporation and its creditors to the full amount of any loss sustained (S. C. L., § 28), and are guilty of a misde- meanor. (Pen. Law, § 664.) (See § 88.) (b) Directors and officers making transfers of corporate property to officers, directors or stockholders to avoid payment of debts or in anticipation of insolvency with intent to prefer or defraud creditors, are personally liable to stockholders and creditors of the corporation for any loss occasioned thereby. (S. C. L., § 66.) (c) Directors or officers signing any certificate or report made or public notice given, which is false in any material respect, are jointly and severally liable to any person who has either directly or indirectly become a stockholder or cred- itor upon the faith of such representation. The amount of damage sustained is the measure of liability. Actions limited to two years from date of the representation. (S. C. L., § 35.) It is not necessary to show that the directors signing knew that the report contained false statements. Huntington v. Attrill, 118 N. Y. 365 (1890). If made with knowledge, such act is a misdemeanor. (Pen. Law, § 665.) A director is deemed to have knowledge of the corporate affairs sufficient to enable him to determine whether any act, proceeding or omission of the board to which he belongs, is in violation of the provisions of the Penal Law relating to directors, and, if in violation thereof, he must, if present, to escape liability therefor, cause or make written request that his dissent be entered on the minutes of the directors. If ab- sent from the particular meeting, he will nevertheless be held liable for any violations of the Penal Law occurring thereat, appearing upon the minutes, if he remains a director for six months thereafter, without causing his dissent to be entered on the minutes within that period. (S. C. L., § 28; Pen. Law, § 667.) (See next section, subdiv. b, for directors' liability for 128 NEW YORK CORPORATIONS. loans or discounts, etc., to stockholders. For general statutory- liability, see § 131. For penalty for failure to file reports, see Chap. XVI, "Reports.") § 134. Directors' Liability to Creditors. Although the New York reports contain many decisions and dicta to the effect that "the assets of the corporation are a trust fund for the payment of creditors" (Cole v. Millerton Iron Co., 133 N. Y. 164 [1892]), it is perhaps safe to say that there is no decision holding directly that while the com- pany is a going concern any trust relations exist between the directors and creditors. So long as the company is solvent, the creditors' rights against the directors are almost entirely statutory. These statutes are penal and therefore strictly construed. Wiles v. Suydam, 64 N. Y. 173, 177 (1876). The liabilities under the statutes are as follows : (a) For making illegal dividends directors are liable to creditors. (S. C. L., § 28.) (See § 123, subdiv. a.) (b) Directors and officers are jointly and severally per- sonally liable for making loans to stockholders, for discounting any note or other evidence of debt for stockholders, or for re- ceiving the same for any payment, in whole or in part, due or to become due on any stock in the corporation, or to enable any stockholder to withdraw any part of the money paid in by him on his stock. (S. C. L., § 29.) The directors and officers involved shall "jointly and severally, be personally liable to the extent of such loan and interest, for all the debts of the corporation contracted before the repayment of the sum loaned, and to the full amount of the notes or other evidences of debt so received or discounted, with interest from the time such liability accrued." (Id.) Such unlawful action is also a misdemeanor under the Penal Law, § 664. A. C. Nellis & Co. V. Nellis, 62 Hun 63, 67 (1891). (c) Creditors, who became such upon the faith of a false representation made in any corporate certificate or report, DIRECTORS. 129 can hold the directors who signed the same liable for any loss occasioned thereby. Action must be brought within two years after the false representation was made. (S. C. L., § 35.) (See § 123, subdiv. c.) Upon insolvency, creditors can enforce any liability which a director has incurred through fraud or negligence in the management of corporate affairs on the ground that it is an equitable asset. Morawetz Private Corp., §§ 795, 796. Directors who have transferred all the property of the corporation without providing for the payment of an out- standing judgment are personally liable to the creditor. Darcy v. Brooklyn & N. Y. Ferry Co., 127 App. Div. 167- (1908). (For directors' liability as trustees on dissolution see § 120.) § 125. Directors' Meeting's. Directors may act for the corporation only in duly as- sembled meetings. Except for ministerial acts prescribed by statute, such as signatures to certificates, etc., this rule is invariable. Individual action may be authorized by the board, or, if taken, may be subsequently ratified, but in all cases the action must be by the board. (G. C. L., § 43.) (a) Place. Meetings may be held at such place with- in or without the state as the directors select, unless they are restricted by charter or by-laws. (B. C. L., § 2.) In practice charter restrictions are infrequent and the by-laws, while usually fixing the place for directors' meeting at some place within the state — usually at the principal office — also com- monly provide that meetings may be held at any time and place by unanimous consent of the board. (b) Notice. Notice for both regular and special meet- ings should be provided for in the by-laws. The notice need not contain a statement of the business to be transacted if it is not unusual in character, unless such statement is required 130 NEW YORK CORPORATIONS. by the by-laws. Where no particular purpose is specified it is to be understood that it is called to consider any matters pertaining to the conduct of the corporate affairs that may come before it. In re Argus Co. v. Manning, 138 N. Y. 557, 578 (1893). Nevertheless as a matter of good practice it is customary — particularly as to special meetings — to state in the notice of meeting, any -important business to be transacted thereat. Notice of meeting may be waived by unanimous written agreement, and is held to be waived for any meeting without notice, if all are present. (G. C. L., § 43.) (c) Quorum. "Unless otherwise provided, a majority of the board of directors of a corporation at a meeting duly assembled shall be necessary to constitute a quorum for the transaction of business and the act of a majority of the directors present at a meeting at which a quorum is pres- ent shall be the act of the board of directors. The members of a corporation may in by-laws fix the number of directors necessary to constitute a quorum at a number less than a majority of the board, but at least equal to one-third of its number." (G. C. L., § 34.) (d) Voting. Directors are not allowed to vote by proxy. Craig Med. Co. v. Bank, 59 Hun 561, 565 (1891). Unlike stockholders they may not vote upon matters in which they are personally interested. Copeland v. Mfg. Co., 47 Hun 235 (1888). § 126. Standing Comniittees. Although there is no express statutory authority therefor, the delegation of details of management to standing com- mittees of directors is practiced and sanctioned in New York. Olcott V. Tioga Ry. Co., 27 N. Y. 546, 557 (1863) ; Sheridan El. Lt. Co. V. Bank, 127 N. Y. 517 (1891). Such committees are held allowable under the general statutory power of the corporation to appoint such officers and agents as its business shall require. (G. C. L., § 11.) They DIRECTORS. 131 are also frequently created by charter provision under the general clause permitting "any provision for the regulation of the business and the conduct of the affairs of the corpo- ration." (G. C. L., § 10.) In the absence of statutory provision, the composition, powers and duties of the standing committees are usually regulated by charter or by-law provision, though the whole matter is sometimes left to the board, the by-laws merely empowering them to act. CHAPTER XII. OFFICERS. § 137. The Corporate Officers. "The directors of a stock corporation may appoint from their number a president, and may appoint a secretary, treas- urer, and other officers, agents and employees, who shall respectively have such povviers and perform such duties in the management of the property and affairs of the corpora- tion, subject to the control of the directors, as may be pre- scribed by them or in the by-laws." (S. C. L., § 30.) The essential officers of a corporation are the president, secretary and treasurer. These, though not specifically re- quired by the statutes, are necessary to meet their general requirements as to reports, signatures, etc. In addition to the three officers mentioned, vice-presidents, assistant secretaries and treasurers, the managing director or general manager, the auditor and the counsel are usually classed as officers as distinguished from agents and employees, and also from the directors, who, while technically officers of the corporation, are not usually so designated. The same person may hold more than one office if the duties of such offices are compatible. Novelty Co. v. Connell, 88 Hun 254, 257 (1895).* § 128. Qualifications. The president must be a director. (S. C. L., §30.) This is a statutory declaration of a rule of convenience which would obtain in the great majority of cases without its enactment. * See also Manhattan Co. v. Kaldenberg, 165 N. Y. i, n (1900), where one person held the offices of president, secretary and treasurer. 132 OFFICERS. 133 As the presiding officer of the board of directors, it is im- perative that he should be a member. He need not be a stockholder if provision is made in the by-laws relieving di- rectors from the necessity of holding stock. If, however, as is usually the case, he is to preside over stockholders' meetings, he should also be a stockholder. There are no special statutory qualifications for the other officers. They may or may not be directors or stockholders. If, however, the vice-president is to act in case of the absence or disability of the president, he too should be a director. (S.C. L., §30.) § 129. Security. The directors may require officers to give security for the faithful discharge of their duties. (S. C. L., § 30.) This is usually confined to the bond required of the treasurer, but is extended to other officials when conditions render such action advisable. § 130. Powers. The mere fact that certain persons are officers of a cor- poration gives them no authority over the corporate business or property. Cook on Corporations, § 716. Their powers are derived entirely from enabling provisions in the charter and by-laws and from resolutions of the board of directors. Usually their powers are conferred and defined by the by- laws. The directors, however, either by express resolution or by acquiescence in a course of action, may clothe them with power to act for the company in the performance of any act within the charter powers not otherwise assigned by char- ter or by-laws. Hall v. Ochs, 34 App. Div. 103 (1898^, Just how much authority the officers have in any particu- lar matter is a question of fact to be determined in each case. Hastings v. Ins. Co., 138 N. Y. 473, 479 (1893). It should be borne in mind that, in the performance of their duties. 134 NEW YORK CORPORATIONS. the officers are agents of the company. Their acts are there- fore to be considered in the light of the well settled rules of agency that an agent is invested with authority to do all acts incidental to the proper discharge of his duties, and that third persons are entitled to rely upon the apparent authority con- ferred upon him by the principal. Lee v. Coal Co., 56 How. Pr. 373 (1877). The New York courts have recognized the practical ne- cessity of following business usage and have applied the doc- trine of "apparent authorization" even more broadly to the acts of corporate officers than to those of ordinary agents. The following extract from the opinion in Lee v. Pittsburgh Coal Co., supra, p. 377, shows their attitude: "It is very difficult, if not impossible, for those having dealings with corporate bodies to determine, except from circumstances and inference, what authority officers have. ''' * * It often happens — so often as to be the rule rather than the exception — ^that the chief officers of a corporation exercise a very wide range of powers, virtually grasping the entire direction and control of all its operations, with the tacit consent and approval of the corporation. * * * Ought not the same evidence, upon which prudent business men ordinarily infer the existence of the authority, to be satisfac- tory to courts and juries?" It is the well settled rule in this state that if the president or other general officer of a corporation makes a contract on behalf of the company of a nature which the directors might have authorized, or which they could ratify when made, au- thority will be presumed and the burden rests upon the cor- poration of showing the contrary. Hudson River Ry. Co. v. Hanfield, 36 App. Div. 605, 507 (1897).* Although it is possible to define and limit the authority of officers in the by-laws, these are as to third persons, private regulations, binding upon those who have knowledge of them, •See also Oakes v. Water Co., 143 N. Y. 430 (1894); Patteson v. Ongley Electric Co., 87 Hun 46a, 464 (1895). OFFICERS. 135 but "of no force as limitations per se as to third persons of an authority, which, except for the by-law would be construed as within the apparent scope of the agency." Rathbun v. Snow, 123 N. Y. 343, 349 (1890) ; Newman v. Lee, 87 App. Div. 116, 118 (1903). It is impossible to formulate any general rule as to what acts are within the power of the various officers. Each case presents a question of fact to be tested by the rules of specific, implied and apparent authorization. It may be stated broadly, however, that a corporate official will be presumed to have any power claimed or exer- cised by him, within the reasonable scope of the customary duties of such officials, if such authority is not denied by the corporation. This is the rule, notwithstanding the absence of any real authority, or even the existence of provisions of the by-laws or resolutions of the board to the direct contrary. (See next section as to liability of officers for unauthorized action. ) § 131. Personal Liabilities of Officers. (a) To the Corporation. Corporate officers, as agents of the company, are subject to the general rule which imposes upon an agent who exceeds his authority, liability for dam- ages resulting to his principal. Holmes v. Willard, 125 N. Y. 75, 80 (1890). They owe to the company the duty of exercising ordinary business skill and prudence (Hun v. Gary, 82 N. Y. 65 [1880]) and are Hable for losses of cor- porate funds or property due to their failure to exercise it. Brinckerhofif v. Bostwick, 88 N. Y. 52 (1882). They are liable for misappropriating corporate property even though they own substantially all the stock. Saranac Ry. V. Arnold, 167 N. Y. 368, 374 (1901). (Pen. Law, § 665.) An officer who makes an individual profit in purchasing corporate supplies through a firm of which he is a member 136 NEW YORK CORPORATIONS. is liable to account for it to the corporation. Rickert v. White, 54 Misc. 114 (1907). (b) To Third Persons. It is well settled in New York that corporate officers, in dealing with the world, impliedly warrant that they have authority to do the acts which they undertake. If, therefore, they exceed their authority, they are liable for all damages resulting from their want of power. Taylor v. Nostrand, 134 N. Y. 108, no (1892); Miller v. Reynolds, 92 Hun 400 (1895). Officers should be careful in signing corporate contracts to use the form "The Company by John Jones, President." Any signature which does not clearly show the agency, may result in personal obligation. Bank v. Wallis, 150 N. Y. 455 (1896). (See Form 56.) (c) Penal Statutory Liability. The liabilty of cor- porate officers for the offenses indicated is as follows : ( 1 ) Wilful neglect or refusal to make proper entry in corporate books or to allow inspection of same: Fine of not over $500, or imprisonment not over one year, or both; also a penalty of $50 for each offense and liability for all resulting damages to person injured. (S. C. L., § 32; Pen. Law, §§ 665, 1937.) (2) Signing certificate, report or public notice false in any material respect : Fine, not over $500, or im- prisonment not over one year, or both, and collateral lia- bility for two years to those who became stockholders be- cause of such false presentation. (S. C. L., § 35; Pen. Law, §§ 665, 1937.) (3) Fraudulent issue of stock: Fine of not over $3,000, or imprisonment not exceeding seven years, or both. (Pen. Law, § 662.) (4) Participating in issue of stock beyond amount authorized, or selling stock of which they are not the actual owners: Fine, not over $5,000, or imprisonment not less than six months, or both. (Pen. Law, § 664.) (5) Transfer of corporate property in contempla- tion of insolvency: Liability for all resulting loss. (S. C. L., § 66.) OFFICERS. 137 (6) Appropriating corporate property, except in payment of a just demand, without making- true entry on the records : Fine, not over $500, or imprisonment not exceeding one year, or both. (Pen. Law, §§ 665, 1937.) (7) Exhibiting false document to public officer: Imprisonment in state prison not exceeding ten years. (Pen. Law, § 661.) (8) Making loans to stockholders, or taking their notes in payment of stock subscriptions, or to enable them to withdraw money paid in by them on subscriptions : Liability for corporate debts contracted while loan is out- standing, to amount of loan and interest and to the amount of the notes with interest. (S. C. L., § 29.) (9) Refusal or neglect to make report lawfully required by a public officer: Fine of not over $500, or imprisonment not exceeding one year, or both. (Pen. Law, §§ 665, 1937.) (10) Failure to give notice to officers and directors of receipt of injunction notice : Fine of not over $500, or imprisonment not exceeding one year, or both. (Pen. Law, §§ 665, 1937.) (11) Making, participating in, aiding, abetting, advising or consenting to any corporate contribution for any political purpose whatever, whether direct or in- direct : Imprisonment in a penitentiary or county jail for not more than one year and fine of not more than one thousand dollars. (G. C. L., § 44.) (12) Assists a corporation directly or indirectly in the practice of law : Fine of not over $500, or impris- onment not exceeding one year, or both. (Pen. Law, §§ 280, 1937.) The corporation is subject to a fine of not over $5,000. (Pen. Law, § 280.) § 132. Tenure of Office. Officers hold their respective official positions only for the term for which they were elected unless, as is usually the case, provision is made in the charter or by-laws that they hold office until the election of their successors. They may be removed at any time, with or without cause, by the board of directors. (S. C. L., § 30.) 138 NEW YORK CORPORATIONS. An officer may terminate his relations with the company by resignation. If made in absolute terms this will take effect immediately and does not require acceptance on the part of the corporation to render it effective. Wilson v. Hotel Co., 16 Misc. 48 (1896); Manhattan Co. v. Kaldenberg, 165 N. Y. I, 10 (1900). § 133' Compensation. A person who is a director or stockholder as well as an officer is not entitled to compensation for performing the duties of his office unless he has made a contract to that effect with the company. Farmers L. & T. Co. v. Ry., 152 N. Y. 251, 254 (1897). It is presumed that he is working for the general welfare of the company and not in expectation of receiving personal compensation. One who has no personal interest in the company may, however, recover what his services as an officer were reasonably worth, even in the ab- sence of a definite agreement. Smith v. Ry., 102 N. Y. 191, 194 (1886). (See § 118.) CHAPTER XIII. PRINCIPAL OFFICE. CORPORATE BOOKS. § 134. Location of Principal Office. The certificate of incorporation must contain a statement of the city, village" or town in which the company's principal business office is to be located. If it is to be in the City of New York, the borough must be designated. (B. C. L., § 2, subdiv. 5.) No exact address is required. This lack of defi- niteness, while a weak spot in the law, is occasionally very convenient for the incorporators. The principal office must be within the state and the charter statement is conclusive evidence as to its location un- til such location is changed by regular amendment. (See § ^2.) Edison Elec. Lt. Co. v. Barker, 91 Hun 594 (1895). "Office" and "place of business" are used interchangeably in the statutes, both meaning the official domicile of the company as fixed in the manner indicated. (G. C. L., § 3, subdiv. 9.) Special elections of directors must be held in the principal office or, if access to this is denied, at some other place with- in the city, town or village of the principal office. (G. C. L., § 30.) The corporate records must be kept in the princi- pal office. (S. C. L., § 32.) Its location fixes the tax dis- trict in which the personal property of the corporation is assessed. (Tax Law, § 11.) § 135. Corporate Books. Every business corporation must keep at its principal office, books containing correct accounts of its business and transactions, and a book to be known as the stock book. (S. 139 140 NEW YORK CORPORATIONS. C. L., § 32.) The stock book is the only book thus specifically prescribed. The needs of the corporation and business cus- tom and convenience determine what others shall be kept. § 136. The Stock Book. The stock book must contain the names of the stock- holders arranged in alphabetical order showing their place of residence, the number of shares of stock owned by each, the time when they became the holders thereof and the amounts paid thereon. (S. C. L., § 32.) The stock book is thus the official record of the relations existing between the corporation and its members. No trans- fer of stock is valid as against the corporation, its creditors or stockholders — except to render the transferee liable as a stockholder — until such transfer is entered in the stock book in a manner to show from and to whom the stock is trans- ferred. It is made presumptive evidence of tlie facts it con- tains in any action or proceeding against the corporation, its officers or stockholders (S. C. L., § 32; Bank v. Scott, 53 App. Div. 65, 71 [1900]), and is conclusive evidence of the right to vote at stockholders' meetings. (G. C. L., § 23.) A penalty is imposed upon the corporation for failure to keep a stock book, or to keep it open for inspection as above set forth, of $50 a day during the continuance of the refusal. If any officer or agent of the corporation wilfully neglects or refuses to make proper entries in the stock book, or to exhibit the book and allow extracts to be made fi^om it, in accordance with the requirements already set forth, both the officer or agent and the corporation are liable to the party injured to the amount of $50 for each offense and also for any damages resulting to him from such failure or refusal. (S. C. L., § 32; Pen. Law, § 665.) (See § 131.) The adoption of a stock book is the duty of the board of directors and they may at any time adopt a new book if the old one is not available. In re Argus Co., 138 N. Y. 557, 576 (1893); Socorro Mt. Co. v. Preston, 17 Misc. 220 (1896). (See Forms 18, 19.) PRINCIPAL OFFICE. CORPORATE BOOKS. I4I § 137. Right to Inspect Corporate Books. The stock book must be kept open at the principal office of the company during at least three business hours daily for the inspection of stockholders and judgment creditors, who may make extracts therefrom. (S. C. L., § 32.) This is an absolute statutory right and if refused nothing is left to the discretion of the court but to issue a writ of mandamus upon proper application being made therefor. Matter of Steinway, 159 N. Y. 250, 263 (1899) ; Lawshe v. Royal Baking Powder Co., 54 Misc. 220 (1907). It was long doubted whether this statute did not prevent the Supreme Court from granting an order to examine any other of the corporate books. The question was decided defi- nitely by the Matter of Steinway, supra, p. 265, where it was held that the common law right of a stockholder to inspect the books of his corporation at a proper time and place and for a proper purpose still exists, and that "the Supreme Court has power, in its sound discretion upon good cause shown to enforce the right." The broad language of the decision cited created a wide- spread impression that a stockholder was entitled to examine the books of the corporation for any purpose and to any extent. Matter of Colwell, 76 App. Div. 615 (1902), per O'Brien, J. The right is not, however, an absolute one. Such relief will be granted only for some purpose necessary for the stockholder's protection. People ex rel. Mackey v. Ins. Co., 31 Misc. 617 (1900). It is a drastic remedy "not to be granted except in an emergency or for a necessary pur- pose and should be limited by some regard to the interests of the corporation and its other stockholders." Matter of Col- well, supra. If, therefore, the information required in any particular case can be obtained in any other way, as for ex- ample from a financial statement of the treasurer filed on proper demand in accordance with the statutory requirements 142 NEW YORK CORPORATIONS. (S. C. L., § 69), it should be resorted to in preference to applying for a writ of mandamus. The court will always consider the motive of the stock- holder in any case where the remedy is discretionary. In re Pierson, 44 App. Div. 215 (1899) ; People ex rel. McElwee V. Produce Ex. Co., 53 App. Div. 93 (1900); Matter of Coats, 73 App. Div. 178 (1902). The stockholder may em- ploy another to make any authorized examination for him, or to aid him in making it. People ex rel. Clason v. Ferry Co., 86 Hun 128 (1895). A director has an absolute right to inspect the corpo- rate books. People ex rel. Leach v. Central Fish Co., 117 App. Div. y"] (1907). CHAPTER XIV. STATE TAXATION. § 138. Franchise Tax. "For the privilege of doing business or exercising its corporate franchises in this state, every corporation * * * doing business in this state, shall pay to the state treasurer annually, in advance, an annual tax to be computed upon the basis of the amount of its capital stock, employed during the preceding year within this state, and upon each dollar of such amount. The measure of the amount of capital stock employed in this state shall be such a portion of the issued capital stock as the gross assets employed in any business within this state bear to the gross assets wherever employed in business." (Tax Law, § 182.) This tax is entirely different from the "Special Franchise Tax" imposed upon corporations entitled to use the public streets or other public places. It is imposed upon all corpora- tions of every kind and is paid by corporations subject to special franchise taxes, in addition to that tax. The theory upon which the taxation of corporations for state purposes has been adjusted is that the legislature has the right to tax corporations for the privilege of doing busi- ness in New York, aside from all property taxation. The tax is therefore purely a statutory exaction and is in addition to the usual property taxes which must also be paid by cor- porations. The franchise tax, when imposed on a domestic corpora- tion, is a tax on its corporate franchises; when imposed on a foreign corporation, it is a tax on its business, — a distinction based on the fact that corporate franchises are taxable only 143 144 NEW YORK CORPORATIONS. within the jurisdiction which creates them, and where alone they can be said to have a situs. People v. Home Insurance Co., 92 N. Y. 328, 340 (1883). Foreign corporations have no absolute right to admission to the state, however, and the legislature may therefore impose any condition upon granting them the privilege that it sees fit. Pembina Mining Co. v. Pa., 125 U. S. 181 (1889); People ex rel. U. S. A. Co. v. Knight, 174 N. Y. 475 (1903). The tax is not a property tax, but is an operating tax, based upon the business transacted by the company in the state, as shown by the amount of capital employed here. This is a distinction of great importance and easily overlooked. The rate of the tax is graduated according to business pros- perity evidenced by dividends declared. "As dividends can be legally made only out of earnings or profits and cannot be made out of capital, they are assumed to approximate as nearly as practicable the just measure of the tax which should be imposed upon the corporation for the enjoyment of its franchise." People v. Albany Insurance Co., 92 N. Y. 458, 461 (1883). § 139. "Capital Stock Employed within the State." The franchise tax is imposed only on the capital stock employed during the preceding year within the state. A corporation organized in New York but operating and employ- ing all its capital elsewhere would therefore pay no franchise tax in this state. "Capital stock" for franchise tax purposes means, not share stock, but the assets of the corporation contributed by the stockholders. This does not include surplus which may therefore be employed in the state without liability for fran- chise tax. That is, the amount upon which the franchise tax is calculated may not exceed the par value of the company's stock, any amount in excess not being liable. People ex rel. U. M. C. Co. V. Roberts, 156 N. Y. 585 (1898) ; People ex rel. Wiebusch v. Roberts, 154 N. Y. loi, 106 (1897). STATE TAXATION. I45 § 140. Deduction of Debts. Since the franchise tax is based upon the actual value of the capital employed in the state, allowance must be made for corporate indebtedness. If all the corporation's property and business is within the state, its total indebtedness may be deducted. People ex rel. J. B. Co. v. Roberts, 37 App. Div. I (1899). Where, however, only a portion of its capital is employed in the state, only a proportionate amount of debts may be subtracted from its assessed valuation. People ex rel. Hyde & Sons v. Miller, 90 App. Div. 599 (1904) ; Affd. 179 N.Y. 564. § 141. United States Securities. The fact that the franchise tax is not upon property but upon business, the property values being used merely as a basis for estimation, allows money invested in United States securi- ties to be included in the capital taxable under § 182 of the Tax Law, even though the securities themselves are exempt from state taxation. Home Insurance Co. v. N. Y., 134 U. S. 594 (1890). Hence, United States bonds owned by the corporation may not be deducted in determining the amount of capital for purposes of franchise taxation. § 142. Patents and Copyrights. The same is true of patents and copyrights, which, though not taxable themselves, are as a constituent part of the com- pany's assets, included in determining the value of its capital. U. S. Aluminum Plate Co. v. Knight, 174 N. Y. 475 (1903). § 143. Good-Will. The good-will of the corporate business is also included as part of the capital employed in the state. It is naturally very difficult to place a value upon anything so intangible as good-will and no general rule can be laid down by which it can be measured. It is not improper in estimating its value to 146 NEW YORK CORPORATIONS. take the price paid for it as its true worth. People ex rel Keochl & Co. V. Morgan, 96 App. Div. no (1904). As the value of good-will depends directly upon net profits the most common mode of determining its value is to multiply the aver- age net profits by a more or less arbitrary number of years, hav- ing regard for the nature and character of the business under consideration. Von Au v. Magenheimer, 115 App. Div. 87 (1906). § 144. Meaning of "Employed within the State." The meaning of "employed within the state" has been the subject of much judicial interpretation. Capital is "employed within the state" when it is kept and used here for the purposes of the corporation. People ex rel Edison Elec. Lt. Co. v. Campbell, 138 N. Y. 546 (1893). It is not taxable unless ac- tively used in the company's business. For example, it has been held that a corporation may invest in unproductive real estate which is not directly used for the purposes of its regular business without being liable for franchise taxation. People ex rel Niagara Hydraulic Co. v. Roberts, 30 App. Div. 180; Affd. 157 N. Y. 676 (1899). Subsequent cases have much restricted the application of this doctrine, if indeed, they have left anything of it. People ex rel Ft. George Realty Co. v. Miller, 90 App. Div. 588 (1904) ; People ex rel 14th St. Realty Co. v. Kelsey, no App. Div. 797 (1906) ; People ex rel Wall and Hanover St. Realty Co. v. Miller, 181 N. Y. 328 (1905). Money invested outside the state either in real estate, in stocks or bonds, is not employed in the state even though the income be received at the home oiifice in New York and there used. People ex rel Am. Surety Co. v. Campbell, 74 Hun loi, Affd. 143 N. Y. 625 (1894) ; People ex rel Edison Co. V. Campbell, 138 N. Y. 543 (1893). So, too, any property having a permanent situs outside the state cannot in any way be included as capital employed within the state. People v. Campbell, 88 Hun 544 (1895). STATE TAXATION. I47 Where the amount of capital employed within the state fluctuates, the average is taken. People ex rel Brooklyn R. T. Co. V. Morgan, 57 App. Div. 335 (1901). "For purposes of taxation, the capital of a corporation in- vested in the stock of another corporation shall be deemed to be assets located where the physical property represented by such stock is located." (Tax Law, § 182.) The comptroller has ruled that no rebate will be allowed where capital has been employed in the state for less than a year. Thus a company which has employed capital in New York for one month only, prior to the date of assessment, is compelled to pay on the basis of an equal amount as used for a year; a holding which might well be contested under the reasoning used in the case of Brooklyn R. T. Co. v. Morgan, cited above. § 145. Classification of Corporations for Purposes of Fran- chise Taxation. The statute in effect divides all corporations both domes- tic and foreign into three general classes for the purpose of franchise taxation. ( 1 ) Those paying dividends of six per cent, or over. (2) Those which have declared no dividends. (3) Those which have paid less than six per cent, annual dividends. Class 3 is again subdivided into three classes as follows : (a) Those which are possessed of assets not in ex- cess of liabilities (exclusive of capital stock), or in which the average price of stock sold during the tax year did not equal or exceed the par value of such stock. (b) Those which have paid less than six per cent, annual dividends and whose assets exceed the liabilities (exclusive of capital stock) by an amount equal to or greater than the par value of the capital stock, or in which 148 NEW YORK CORPORATIONS. the average price at which stock sold during the tax year is equal to or greater than the par value of such stock, (c) All other corporations. (Tax Law, § 182.) § 146. (i) Corporations Paying Dividends Not Less Than Six Per Cent. If dividends of six per cent, or over, have been paid during the year ending October 31st, the tax is for each one per cent, of dividend paid, one-fourth of one mill on each dollar of capi- tal employed in the state. For example, if a company employs $100,000 of capital in the state upon which it pays dividends of six per cent., the tax is one and one-half mills on each dollar of capital or $150. If the dividends are ten per cent, the tax would be at the rate of two and one-half mills or $250. The dividends are used to fix the rate of taxation without regard to whether they have been earned within or without the state. People ex rel N. E. Dressed Meat Co. v. Roberts, 155 N. Y. 408. (For table showing this tax on various capitalizations, see Part III, Table i.) § 147. (2) Corporations Paying No Dividends. When no dividend has been declared, the franchise tax is three-fourths of a mill on each $1 of the appraised capital em- ployed within the state (75 cents per $1,000). (Tax Law, § 182.) The president, secretary or treasurer of the company must report to the comptroller, giving his estimate of the "actual cash value" of the stock, which must not be lower than the average selling price during the year. The comptroller need not accept this estimate as final, but may require additional in- formation or may reappraise the stock, drawing his own con- clusions from the information of the reports, or using other information at his discretion. People ex rel Schwarzchild & Sulzberger v. Roberts, 11 App. Div. 449, Affd. 156 N. Y. 690 (1898). If dissatisfied the company may review such action STATE TAXATION. I49 on certiorari pi-oceedings. Where no sales have been made the question of valuation is sometimes difficult, but it is one of fact to be determined by the officers of the company and the state officials, subject to review by the courts. The following is the rule of assessment in such cases as stated in a recent decision of the Court of Appeals : "We think that the statute practically defines the manner of determining the basis for the tax in this case. It in effect declares that the capital stock shall be appraised at its actual value in cash, and that is made the basis upon which the tax is to be assessed. We are of the opinion that the actual value of the capital stock of such a corporation is the value of its assets after deducting its liabilities and adding to the sum then remaining the value of the good-will of the business including its right to conduct it under its franchise." People ex rel Wiebusch v. Roberts, 154 N. Y. loi, 108 (1897), per Martin, J. § 148- (3) Corporations Paying Dividends Less than Six Per Cent. As already stated, corporations paying dividends at the rate of less than six per cent, are subdivided for purposes of taxation into three groups taxable at different rates. The first group is made up of : ( 1 ) Those corporations whose assets do not exceed their liabilities, exclusive of capital stock. (2) Those whose stock sold for an average price below its par value during the tax year. Corporations in this group are taxable at the rate of three- fourths of a mill per $1 of capital employed in the state (75 cents per $1000). The second group includes corporations : (i) Whose assets exceed their liabilities, exclusive of capital stock, by an amount equal to or greater than the par value of the capital stock. (2) Corporations whose stock has sold during the tax year at an average price equal to or greater than its par value. 150 NEW YORK CORPORATIONS. Corporations in this group are taxable at the rate of one and one-half mills on each dollar of capital employed within the state. The third group — all other corporations — includes corpo- rations which have paid less than six per cent, upon their capi- tal stock and are not included in either the first or second groups, i. e., corporations whose assets exceed their liabilities, exclusive of capital stock, by an amount not equal to nor great- er than the par value of the capital stock, and no stock of which has been sold during the tax year. The statute provides that such corporations shall be taxed at an amount not less than would be produced by an assessment of one and one-half mills upon each dollar of capital stock em- ployed in the state, taken at its actual value, or at the rate of one and one-half mills upon each dollar of capital employed in the state valued at the average price at which such stock sold dur- ing the tax year. As any corporation whose stock has been sold is thereby taken out of this group, it is of course impossible to employ this latter method of determining the amount of tax payable by a corporation of the third group. In all cases where the dividends have been less than six per cent., the capital stock must be appraised by the president, treasurer or secretary of the company. (Tax Law, § 193.) In the case of corporations falling within the second group de- scribed in this section, such valuation must not be less than : ( 1 ) The par value of the stock. (2) The difiference between the assets and liabilities, exclusive of capital stock. (3) The average price at which the stock sold dur- ing the tax year. (Tax Law, § 182.) It has been judicially decided (People ex rel N. Y. C. Ry. V. Knight, 173 N. Y. 255 [1903]) that sections 182 and 193 of the Tax Law must be read together. The net result is that § 182 prescribes the manner of determining the portion of capi- tal to be taxed and § 193 provides that the tax shall be levied STATE TAXATION. I5I on the actual and not the par value of the amount so deter- mined. For example, "A corporation with a capital stock of $500,000 par value might have assets of the value of $250,000, of which $150,000 were employed in business in this state. In such a case if the corporation had no peculiar franchise or ex- ceptional good will or earning power, the market value of its stock would approximate 50, but if the company were well managed it might be 60 or 70. In computation for a franchise tax it would not be reasonable to estimate the $150,000 of as- sets at 70, the market value of the share stock, nor even at their full value. The assets employed in this state would be three- fifths of the total assets of the corporation; therefore three- fifths of the share capital of the corporation or $300,000, should be considered as being employed within this state. "It is this rule that the statute intended to prescribe by the provision that the tax shall be 'upon such portion of the capital stock at par as the amount of the capital employed within this state bears to the entire capital of the corporation.' But having determined that $300,000 of capital stock is to be deemed as employed within this state then that capital stock is under § 190 (now § 193) to be taken at 'its actual cash value' for the purpose of computing the franchise tax." Peo- ple ex rel N. Y. & E. R. F. Co., 168 N. Y. 14, 17 (1901), per Cullen, J. If the stock were, as supposed, worth 70, then the amount upon which the franchise tax in the example given would be estimated is $210,000, the actual cash value of the capital stock deemed to be employed in the state. If there are two or more classes of stock of any corpora- tion, the tax is apportioned by the rule stated, in accordance with the rate of dividend declared upon each. People ex rel Journeay & Burnham v. Roberts, 37 App. Div. i (1899). § 149. Corporations Exempt from Franchise Tax. The following domestic and foreign business corpora- tions are exempt from franchise tax if not less than forty per 152 NEW YORK CORPORATIONS. cent, of their capital is employed in the operations of the busi- ness within the state: (i) Laundering corporations. (2) Manufacturing companies to extent of capital employed in state in manufacturing and sale of the pro- duct. (3) Mining companies wholly engaged in mining within the state. A special statement must be made to the state comptroller to secure this exemption. (Tax Law, § 183.) (See Form 66.) § 150. What Are Manufacturing Companies? The question as to What constitutes "manufacturing" to entitle a corporation to exemption from taxation under the above rule has been the subject of much judicial interpretation, although, unfortunately, the cases have, for the most part, confined themselves to a discussion of the particular instance under review rather than attempting to lay down any general rules. "Whoever creates a useful thing by mechanical labor is entitled to be called a manufacturer" was the test applied in a recent case (People ex rel Waterman v. Morgan, 48 App. Div. 395, 399 [1900]), which seems to cover the majority of the cases. If a corporation is in doubt, a letter to the state comptroller will give an official, though not necessarily, a final ruling on the question. A discussion of the cases in point would occupy more space than it is possible to devote to the subject in this work. The following are representative: People ex rel Asphalt Co. v. Morgan, 61 App. Div. 373 (1901); People ex rel Devoe v. Roberts, 51 App. Div. TJ (1900) ; People ex rel Jewelers' Circular Pub. Co. v. Roberts, 155 N. Y. 1 (1898) ; People ex rel U. P. Tea Co. v. Roberts, 145 N. Y. 375 (1895). (See Chapter XVI for report to be made comptroller and Fonns 65 and 66 for Franchise Tax Reports.) STATE TAXATION. 1 53 §151. Stock Transfer Tax. A tax of two cents on each $ioo of face value or fraction thereof is imposed "on all sales or agreements to sell, or memoranda of sales or deliveries or transfers of shares or certificates of stock in any domestic or foreign association, company or corporation" made after June i, 1905. (Tax Law, § 270.) Stock hypothecated but not sold is not taxed. (Id.) Payment of this tax is indicated by an adhesive stamp, affixed to the certificate or other evidence of transfer, or placed upon the books of the company if the sale or transfer is made only on the books. (Id.) The person affixing any such stamp must write or stamp thereon the initials of his name and the date of affixing, and cut or perforate the same in a substantial manner so that it cannot be again used. (Tax Law, § 273.) No transfer of stock upon which such tax is not paid at the time of transfer shall be made the basis of any action or legal proceeding, nor shall proof thereof be offered or received in evidence in any court of the state. (Tax Law, § 278.) Failure to pay this tax, or to cancel stamps when affixed, is a misdemeanor, punishable by fine and imprison- ment, also by additional civil penalty of $500 for each viola- tion. (Tax Law, §§ 272, 273, 277.) The statutes impose a transfer tax of two cents "on each share of one hundred dollars of face value or fraction there- of." This provision was declared unconstitutional in the case of People ex rel Farrington v. Mensching, 187 N. Y. 8 (1907), and the original taxing clause (L. 1905, Ch. 241) which provides for a tax of two cents to be payable "on each hundred dollars of face value or fraction thereof" there- by reinstated. The stock transfer tax is not payable on an original issue. People v. Duffy-Mclnnery Co., 122 App. Div. 336 (1907). Shares of stock sold on foreclosure of mortgage are taxable. Glynn v. Conklin et al, 127 App. Div. 473 (1908). 154 NEW YORK CORPORATIONS. § 152. Stock Transfer Tax. Rules of the State Comptrol- ler's Office. The following circular has been issued by the state comp- troller, giving the essential features of the transfer tax law and the rules of the comptroller's office in regard thereto. It may be noted that the comptroller's ruling as to trans- fers made outside the state has not yet been subjected to judicial review. State Comptro!Ller''s Office Taxes on Stock Transfers Pursuant to the statute, and under decisions made by this department in administering the law, the following regu- lations will govern the imposition and collection of taxes upon transfers of stock: 1. A tax is imposed on all sales, agreements to sell, de- liveries, or transfers, of shares or certificates of stock in any domestic or foreign association, company or corpora- tion. 2. Where the par value of one share exceeds one hun- dred dollars, an additional tax of two cents is required for each additional one hundred dollars of par value or fraction thereof. 3. Where the evidence of transfer is shown only by the books of the company, the tax stamp must be placed upon such books; where the transfer is by a certificate of stock delivered to a person named thereon as assignee, the stamp must be placed upon such certificate; where the tax is upon an agreement to sell stock, or where the transfer is by de- livery of the certificate assigned in blank, there must be a delivery by the seller to the buyer of a bill or memorandum of sale to which the stamp must be affixed. STATE TAXATION. 1 55 4. Any transfer of stock of which a record is kept or which should be entered in books within this state, or a memorandum of sale or agreement therefor delivered be- tween the parties here, is subject to a tax. The residence of the parties to the transaction is immaterial, as is also the place where the negotiations occurred which culminated in a sale. 5. Every bill or memorandum of sale, agreement to sell, or sale ticket, executed, must show the date thereof, name of the seller, amount of sale, and the matter or thing to which it refers. 6. Every stamp used to deriote payment of the tax must be cancelled by the user by writing or stamping there- upon the initials of his name and the date o-f the transaction, and he must also cut or perforate the stamp in a substantial manner so that such stamp cannot be again used. An effect- ive marking with ink and obliterating of every stamp is strictly required. 7. A transfer made prior to the second day of June, 1905, is not taxable. 8. The tax is imposed upon transfers of shares or cer- tificates of stock whether the transfer as between the parties thereto is for a valuable consideration or not. 9. A sale of stock made outside of New York State is subject to a tax if it is evidenced by entries in transfer books or by any form of written instrument within the state necessary to effect such transfer. 10. A transfer of stock in a building and loan associ- ation is within the provisions of the law. A surrender of shares to such a corporation for cancellation upon maturity is not a taxable transfer. Shares transferred are taxed upon par or face value in the sum of two cents each without re- gard to whether the share is partially paid in or not. 11. The surrender of a certificate of stock to a cor- poration for the purpose of receiving other certificates to be 156 NEW YORK CORPORATIONS. issued to the same owner in smaller amounts, but in an aggre- gate equal to the amount of the surrendered certificate, being a mere exchange of certificates without a transfer of owner- ship, is not taxable. 12. A certificate when divided and reissued, part to a new stockholder and part to the original owner, is taxable to the extent of the transfer to the new purchaser and not taxable in the portion retained by the original owner. 13. The law does not make an exemption from the tax of shares of stock in religious or charitable associations. 14. Stock held by a corporation as treasury stock is not taxable until shares are issued and transferred to a stock- holder. 15. Shares of stock held by an executor or adminis- trator and transferred by him to other parties, whether heirs or not, are subject to a tax. Stock transfer tax stamps are issued in the following denominations: 2C., 4c., loc, 20c., 50c., $1, $2, $10, $20, and are on sale at the Empire Trust Company, 42 Broad- way, New York City, and the National Commercial Bank, Albany, N. Y. CHAPTER XV. LOCAL TAXATION. § 153. Tax District. Any political subdivision of the state, as a county, town, incorporated village or city, which has an independent local board of assessors authorized to assess property therein for state and county taxes, is a "tax district." (Tax Law, § 2.) § 154. Taxation of Realty. The real property of corporations is assessed in the tax district where it is situated in the same manner as the real property of individuals. (Tax Law, § 11.) § 155. Taxation of Personalty. The entire capital or property of a domestic corporation is taxable as personalty after the following deductions have been made (See §§ 158-169) : (i) All real estate at its assessed valuation. (2) All debts and liabilities. (3) All shares of stock actually owned by such company in other corporations taxable upon their capital in New York. (4) Any surplus or reserve up to ten per cent, of the authorized capital. (5) Shares of the company's stock held by the state or by incorporated charitable or religious institu- tions. (6) All tangible property having a permanent situs outside the state. (7) United States securities. 157 158 NEW YORK CORPORATIONS. (8) United States patents and copyrights. (9) Imported goods kept in the original packages. (10) Good-will. (11) Mortgages paying tax under Mortgage Tax Law, § 156. Place of Assessment of Personalty. The place where the personal tax of a corporation must be paid is fixed without regard to the actual situs of the personal property upon which the taxes are paid (Gas Co. v. Assessors of Olean, 15 St. Rep. 461, 464 [1888]), and is as follows : (a) If the corporation has a principal office within the state the tax is payable in the tax district where such office is situated. (Tax Law, § 11.) In determining which office is the "principal" office when the corporation has more than one office in New York, the statement made in the certificate of incorporation is conclusive, both upon the corporation and the assessors, if the company was required by law to include such statement in its certificate. (B. C. L., § 2.) Western Transit Co. v. Scheu, 19 N. Y. 408 (1859) ; Union Steamboat Co. V. Buffalo, 82 N. Y. 351, 356 (1880). (b) If it has no principal office in the state, the tax is payable in the district where the company maintains a place for the transaction of its financial concerns. (Tax Law, § II.) Since business corporations are required to name their principal office in the certificate of incorporation, this provi- sion does not apply to them. (c) If any corporation has neither a principal office nor a place for transacting its financial affairs within the state, such corporation is assessed in the tax district where its opera- tions are actually carried on. (Tax Law, § 11.) § 157. Manner of Assessing Personalty. The tax on personalty is based upon the actual value of the property owned by the corporation after the deductions LOCAL TAXATION. 1 59 required or permitted by law have been made. (Tax Law, § 12.) The assessors may determine this assessment value of the corporate personalty by any method likely to give the most accurate results. They may consider the market value of the stock where the value of the assets cannot be definitely ascertained. Brewing Co. v. Neff, 19 App. Div. 596 (1897); People ex rel U. T. Co. v. Coleman, 126 N. Y. 433 (1891). The payment of dividends justifies the assumption that the capital stock is unimpaired and that the assets are therefore at least equal to the amount of the authorized or outstanding capital stock, but the presumption is rebuttable. People ex rel M. R. Co. v. Barker, 146 N. Y. 304, 313 (1895). Although coi-porations report to the assessors (See Chap. XVI, "Reports"), the statements of such reports are not bind- ing upon the latter if they have other evidence. People. ex rel Trust Co. v. Coleman, 126 N. Y. 433, 448 (1891). If, however, the company's verified statement is uncontradicted, it must be accepted. The action of the assessors in disregarding the report in such a case is reviewable on certiorari proceed- ings. People ex rel Edison Co. v. Barker, 139 N. Y. 55 (1893). § 158. Deductions before Assessment of Personalty. In interpreting the provisions of the Tax Law concern- ing the assessment of corporate personalty, it should be borne in mind that while the purpose of the law is to reach all prop- erty within the state that may be legally taxed, double and improper taxation is sought to be avoided by deduction, before the assessment, of all property subject to taxation as realty, of all property exempt from taxation and of all legitimate liabili- ties. These deductions are .as follows : § 159. (i) Real Estate. The assessed value of any realty owned by the corpora- tion is to be deducted from its total assets before assessment of personalty. (Tax Law, § 12.) In determining the per- l6o NEW YORK CORPORATIONS. sonalty of the corporation, however, the gross assets are first computed and any real estate is included at its actual value. People ex rel Subway Co. v. Barker, 7 App. Div. 27; Affd. 151 N. Y. 639 (1897). Then, since this realty is taxed only on its value as fixed by the assessors, its assessed value is deducted from the gross assets. In theory the actual and assessed values of realty should be the same; but, in practice, a difiference is so nearly univer- sal that the assessors in making up the gross assets for the personalty tax, may disregard the assessed value, except for purposes of deduction, and list the realty at their estimate of its true value. People ex rel Gas Co. v. Barker, 144 N. Y. 94, 100 (1894). Under these conditions, it may happen that a corporation which has no property except realty may still have to pay a personal tax, the excess of the actual over the assessed value of its realty being considered personalty. Peo- ple ex rel Clearing House v. Barker, 31 App. Div. 315 (1898). Where there are different interests in the same property, the general rule still applies. For example, if a corporation owns buildings on leased ground; since the company pays taxes only on the assessed value of the buildings, that alone may be deducted. People ex rel Eden Musee Co. v. Feitner, 60 App. Div. 282 (1901). Where corporate realty is mort- gaged and the equity of redemption only is included in its report of assets, deduction may be made of the assessed valu- ation of the equity only and not of the whole property. Peo- ple ex rel Weber v. Wells, 180 N. Y. 62 (1904). Real estate situated outside the state is non-taxable in New York. Matter of Swift, 137 N. Y. jy, 84 (1893). If such real estate has been assessed by the foreign jurisdiction, the local assessors are justified in assuming that the assessed value is the true value, and in making their deductions ac- cordingly. People ex rel Fairchild Chemical Co. v. Comrs., 115 N. Y. 178, 183 (1889). They may in their discretion consider other elements, such as cost, and should do so when LOCAL TAXATION. l6l there is no assessed value or where it is not obtainable. Ry. V. Comrs., 95 N. Y. 554, 562 (1884). § 160. (2) Debts and Liabilities. The Court of Appeals has interpreted the statutory state- ment that in fixing the assessment value of personalty the stock — or capital — subject to taxation shall, after specified deductions, "be assessed at its actual value" (Tax Law, § 12) in the light of §§ 32 and 38 of the Tax Law and of the pro- visions of the Statutory Construction Law, as allowing a de- duction of corporate debts; "for the actual value of the stock ordinarily means the value after the debts are paid." People ex rel Cornell S. Co. v. Dederick, 161 N. Y. 195, 206 (1900). The debts of the corporation are, therefore, deducted before the assessment of personalty is fixed. Debts that have been contracted in the purchase of non-taxable property, such as United States bonds, goods imported and held in the original packages, good-will, etc., are an exception to the rule and are not deductible. (Tax Law, § 6.) The property they repre- sent is itself deducted and to allow for amounts due on such property, would be a double deduction. People ex rel Cornell S. Co. V. Dederick, supra. Debts to be deductible must be certain in amount and not contingent. People ex rel Sands v. Feitner, 173 N. Y. 647 (1903). Dividends actually declared in good faith before assess- ment day, although not paid till afterward, may be deducted, since they belong to stockholders. (See § 88.) People ex rel Trust Co. v. Barker, 86 Hun 131 (1895). One anoma- lous New York decision exists to the effect that dividends declared but left in the business may be taxed as capital. The conclusion is illogical and not supported by authority. People ex rel Hawley Box Co. v. Barker, 23 App. Div. 532 (1897). Interest due on mortgage and other debts may be deducted though not payable till later. 1 62 NEW YORK CORPORATIONS. § i6i. (3) Shares of Stock. If the company owns stock in other corporations which are taxable upon their capital stock under the New York laws, such stock is to be deducted. (Tax Law, §§ 4 [sub. 16], 12.) People ex rel Keppler & Schwarzmann v. Barker, 22 App. Div. 120; Affd. 155 N. Y. 661 (1898). This is one of the pro- visions intended to prevent double taxation. § 162. (4) Surplus or Reserve. If the corporate assets exceed the capitalization, the sur- plus or reserve, up to ten per centum of the authorized capital, may be deducted. People ex rel Citizens' 111. Co. v. Neff, 26 App. Div. 542 (1898). Any surplus in excess of this amount is taxable. The fact that the company has issued interest bearing certificates to stockholders showing their pro- portionate shares in the surplus does not afifect its status for purposes of taxation. People ex rel W. Gas Lt. Co. v. As- sessors, 16 Hun 196, 199 (1878). § 163. (5) Stock Held by State, etc. Shares of the corporation held by the state, or by incor- porated charitable or religious institutions may be deducted. (Tax Law, §§ 12, 32.) § 164. (6) Property in Other States. All tangible property having a permanent situs outside the state may be deducted. (See Matter of Swift, 137 N. Y. yj, 84 [1893], for an excellent discussion of this rule.) Property temporarily in another state, or removed to another state simply for the purpose of avoiding taxation, is taxable in New York. People ex rel P. M. S. Co. v. Comr. of Taxes, 64 N. Y. 541 (1876). Since "personal property" includes debts due from sol- vent debtors (Tax Law, § 2, subdiv. 5), such amounts are taxable whether the debtor resides in New York or elsewhere. LOCAL TAXATION. 1 63 Bank deposits are debts due the depositor (Cragie v. Hadley, 99 N. Y. 131, 133 [1885]), and therefore taxable under this rule without regard to the place of deposit. People ex rel U. V. Copper Co. v. Feitner, 54 App. Div. 217 (1900). § 165. (7) United States Securities. United States securities owned by the corporation are exempt from taxation and are to be deducted. The exemp- tion is not limited to the par value of the bonds but to their entire actual value. People ex rel Leonard v. Comrs., 90 N. Y. 63 (1882). § 166. (8) Patents and Copyrights. United States patents and copyrights are exempt from state and local taxation. Ex rel Edison Co. v. Assrs., 156 N. Y. 417 (1898); People ex rel Johnson v. Roberts, 159 N. Y. 70 (1899) ; cf. People ex rel U. S. A. P. Co. v. Knight, 174 N. Y. 475 (1903). Their value cannot therefore be m- cluded in the assessed value of personalty. § 167. (9) Imported Goods. Goods imported and held in the original packages cannot be taxed, for it would be state interference with interstate commerce, a subject exclusively under Federal control. Peo- ple ex rel Bijur v. Barker, 155 N. Y. 330 (1898) ; People ex rel Matheson & Co. v. Roberts, 158 N. Y. 162 (1899) ; Brown V. Maryland, 12 Wheat 419 (1837). § 168. (10) Good- Will. Good-will is not within the deiinition of personal property and is not taxable for local purposes. People ex rel Brokaw Bros. V. Feitner, 44 App. Div. 278 (1899). § i6g. (11) Mortgages. Mortgages on real property within the state, upon which the mortgage tax of one-half of one per cent., has been paid (Tax Law, § 251), are exempt from local taxation. 164 NEW YORK CORPORATIONS. § 170. Date of Assessment. The date of assessment for both realty and personalty is the same in any one tax district, but in each tax district this assessment date is fixed without necessary reference to the assessment dates of other districts. In the great majority of districts the assessment date is July ist, but many of the cities have other dates fixed by charter provision. In New York City, the five boroughs of which constitute one tax district, the assessment date is the second Monday in January. Assessments become a legal obligation on the date upon which made, e. g., the second Monday in January in New York City. A corporation which changes the location of its princi- pal office from a tax district prior to the date of making assess- ments is not taxable in the district from which it removed. Mygatt V. Washburn, 15 N. Y. 316 (1857); City of N. Y. V McLean, 170 N. Y. 374 (1902). Removal after assess- ment does not relieve the company from payment of the tax. (See Chap. XVI, "Reports"; also Forms 67, 68.) § 171. New York City. Tax lists are made up in New York City on the second Monday in January. On or about that date the department of taxes sends notices to corporations taxable in the city, stating the amount of the assessment. Blanks for the pur- pose of revision are also enclosed. (See Form 68.) If the notice is not received it should be sent for, as the department is under no obligation to give notice of the assessment. The tax lists are open for correction at the main ofiSce of the tax department in the Borough of Manhattan till, but not includ- ing, April 1st, and if any revision of the assessment is de- sired, application therefor must be made before that date. Clarke v. Mayor, iii N. Y. 621 (1889). Where no application is made for reduction, the assess- ment becomes final on April ist. If application is made, the commissioners of taxes and assessments may during April and LOCAL TAXATION. 1 65 May examine the officers of the appHcant corporation under oath and readjust the assessments as they deem proper. (Gr. N. Y. Charter, § 895.) Their determination, in that case, becomes final on June ist (People ex rel Brewing Co. v. Feitner, 41 App. Div. 496 [1899]), and is then reviewable) only on certiorari proceedings which must be commenced prior to November ist. (Gr. N. Y. Charter, § 906.) Taxes are payable on the first Monday in October. If not paid prior to November ist, interest is charged at the rate of seven per cent, per annum from the first Monday in October to date of payment. (Gr. N. Y. Charter, § 915, as amended by L. 1908, Ch. 447.) If not paid by January 15th the comptroller may issue a warrant to the city marshal ■ to collect the tax by distress and sale. At any time within a year after the return of this warrant unsatisfied, the city may sue to collect in an action brought by the receiver of taxes. (Gr. N. Y. Charter, § 232; L. 1904, Ch. 624.) § 172. Special Franchises. "Special franchises" are those involving the use of pub- lic streets or other public places by private individuals or com- panies. They are taxable for local purposes. A consideration of the subject is outside the scope of the present work. CHAPTER XVI. REPORTS. § 173. Required Reports. The regular reports required annually of business corpo- rations are three in number : ( i ) a report to the Secretary of State, known as the Annual Report; (2) a report to the state comptroller usually referred to as the Comptroller's Report; and (3) a local tax report to the assessors of the particular tax district. § 174. Annual Report. The annual report is made to the Secretary of State and is supposed to show the general financial condition of the re- porting corporation. Prior to 1901 the responsibility for the annual report de- volved upon the directors of corporations and was a source of considerable anxiety and trouble. The liberalizing amend- ments of that year, however, transferred the duty of making this report to the executive ofificers of the company, and prac- tically relieved the majority of corporations from the necessity of making it at all. As the law now stands, business corporations are re- quired to submit annually during the month of January to the Secretary of State, a report (See Form 64) as of the first day of January, which shall state : (i) The amount of its capital stock, and the pro- portion actually issued. (2) The amount of its debts or an amount which they do not exceed. 166 REPORTS. 167 (3) The amount of its assets or an amount which its assets at least equal. (4) The names and addresses of all the directors and ofificers of the company, and in the case of a foreign corporation, the name also of the person designated in the manner prescribed by the Code of Civil Procedure, as a person upon whom process against the corporation may be served within this state. "Such report shall be made by the president or a vice- president or the treasurer or a secretary of the corporation and shall be filed in the office of the secretary of state. If such report be not so made and filed, any such officer who shall thereafter neglect or refuse to make and to file such report, within ten days after written request so to do shall have been made by a creditor or by a stockholder of the corpo- ration, shall forfeit to the people the sum of fifty dollars for every day he shall so neglect or refuse." (S. C. L., § 34.) It is manifest that a report such as required by the statute just quoted may be made absolutely valueless as a source of information concerning the corporate condition. There is no penalty for failure to make the annual report unless a written demand as above set forth has been made for its filing by a creditor or stockholder. § 175. Report to State Comptroller. Franchise Tax. An annual report, for purposes of franchise taxation, must be made to the state comptroller on or before November 15th of each year, showing the condition of the corporation at the close of the preceding October 31st. This report must state the amount of authorized capital stock, the amount of stock paid in, the date and rate per centum of each dividend declared during the year, the entire amount of the corporate capital and the amount employed in the state during the year. (Tax Law, § 192.) (See Chap. XIV, "State Taxation.") Under the power conferred upon him by § 194 of the Tax 1 68 NEW YORK CORPORATIONS. Law, the state comptroller has adopted forms which must be followed in making the report. Blanks may be obtained with- out charge by applying therefor to the comptroller's office at Albany, New York. Forms are supplied for both domestic and foreign corporations; also for manufacturing, laundering and mining companies making application for exemption from franchise taxes. (See Forms 65, 66.) In case of failure to report, or if the report is unsatis- factory, the comptroller may estimate the dividends and the value of the capital stock from any data obtainable. He may examine the corporate books and records and may institute an investigation and take testimony in person or by deputy for his information. The expense of such proceedings is added to the tax. (Tax Law, § 195.) If a report is un- satisfactory it is usual to demand a supplemental statement before taking the drastic steps outlined above. (Tax Law, § 194- ) For failure to make the annual report to the comptroller, or failure to make any special report required by him, within a reasonable time to be specified by him, a penalty of one hundred dollars is incurred and the additional sum of ten dollars per day for each day that such faihire continues. (Tax Law, § 197.) § 176. Local Tax Report. Local practice in the matter of assessing corporations for personal taxes varies throughout the state. In the majority of tax districts the assessment of corporations is made on July 1st. In any such district the president or other executive offi- cer of every business corporation must deliver to the local assessors annually on or befoi-e June 15th, and if such tax district is in a county embracing a portion of the forest pre- serve, to the state comptroller also, a verified report of prop- erty owned by the corporation, to be used as a basis for per- REPORTS. 169 sonal taxation. (Tax Law, § 27.) (See Form 6'j.') The assessment is made on the ist of July in most of these dis- tricts and is finally fixed at a later date, varying with the district. This report must state: (i) The real property, if any, the tax district in which the same is situated and the sums actually paid therefor. (2) The capital stock actually paid in and secured to be paid in, excepting therefrom the sums paid for real property and the amount of such capital stock held by the state and by any incorporated literary or charitable institution. ( 3 ) The tax district in which the principal office of the company is situated, or in case it has no principal office, the tax district in which its operations are car- ried on. (Tax Law, § 27.) The more important tax districts provide regular printed forms for this report. If such statement is not made within twenty days after June 15th, or is insufficient, evasive or defective, the assessors may compel the corporation to make a proper statement by mandamus. (Tax Law, § 27.) (But see Matter of Adler Bros., 76 App. Div. 571, 576 [1902]). In New York City and Buffalo no preliminary report is required. The assessors fix the tax tentatively at an arbitrary amount. It is taken for granted that a revision will be desired and blank applications for such revision are enclosed with the notices of assessment. (Sec comment. Chap. XXV, "Forms of Reports.") CHAPTER XVII. FOREIGN CORPORATIONS. § 177. Status of Foreign Corporations. The right of the state to impose conditions upon foreign corporations seeking to do business within its boundaries is too well settled to admit of question. Pembina Mining Co. v. Pa., 125 U. S. 181 (1887) : People ex rel Oil Co. v. Wemple, 131 N. Y. 64 (1892). A corporation is not a "citizen" within the meaning of the constitutional provision that "the citizens of each state shall be entitled to all the privileges and im- munities of citizens in the several states." Paul v. Va., 8 Wall. 168 (1868). Having no absolute right of recognition, it follows that a corporation doing business in a state as a foreign corporation must comply strictly with the terms of the statutes granting it the privilege. Section 15 of the Gen- eral Corporation Law provides that "No foreign stock cor- poration other than a moneyed corporation, shall do business in this state" without first securing a certificate of author- ity from the Secretary of State. Foreign corporations are also required to pay certain prescribed fees and taxes. (See §§ 181, 182.) § 178. What Constitutes "Doing Business in the State." The phrase "doing business within the state" has been the subject of much judicial interpretation of no very en- lightening nature. Speaking generally, a company is "doing business within the state" when it conducts and concludes in New York a series of transactions constituting a substantial portion of its regular business. Occasional business trans- 170 FOREIGN CORPORATIONS. I7I actions are not sufficient to require a certificate of authority, but if it continuously buys or sells, or does both within the state, it is within the provisions of the statutes. The Com- mercial Wood & Cement Co. v. Northhampton Cement Co., 41 Misc. 242 (1903) ; People v. Horn Silver Mining Co., 105 N. Y. 76, 83 (1887); Copper Co. v. Ferguson, 113 U. S. "j^"] (1885), followed in Knitting Co. v. Bronner, 20 Misc. 125 (1897). The transactions must be completed within the state. The mere employment of traveling agents to take orders and send to the home office for approval and filling does not come within the purview of the statute, since the contracts are made outside the state. Jones v. Keeler, 40 Misc. 221 (1903); People ex rel Cotton Oil Co. v. Roberts, 25 App. Div. 13, 15 (1898). See also Murphy Varnish Co. v. Connell, 10 Misc. 553 (1894) ; Vio Chemical Co. v. Studholme, 53 Misc. 470 (1907) ; Affd. 121 App. Div. 927; Fresno Home Packing- Co. V. Turle & Skidmore, 60 Misc. 79 (1908). A foreign corporation which consigns goods to New York to be sold on a profit sharing basis is not transact- ing business within the state so as to require a certificate. Brown Seed Co. v. Richardson, 53 Misc. 517 (1907). § 179. Foreign Corporations with Resident Incorporators. Formerly in order to escape the somewhat onerous re- quirements then imposed on domestic corporations, it was not uncommon for residents of New York to incorporate in another state and operate in this state as a foreign corporation. This practice has been sustained by the courts (Demarest v. Flack, 128 N. Y. 205 [1891J; Lancaster v. Amsterdam Co., 140 N. Y. 576 [1894]), but the liberalization of the New York corporation laws within recent years has deprived it of its desirability. Outside incorporation under the present stat- utory provisions merely results in most cases in a double pa3mient of fees and franchise taxes. 172 NEW YORK CORPORATIONS. § 180. Procedure to Secure Admission to State. Before commencing operations a foreign corporation in- tending "to do business in the state," within the meaning of that term as explained above, must file the following papers with the Secretary of State (G. C. L., § 16) : (i) A statement under the corporate seal and the sig- nature of its president, vice-president or other acting head, setting forth: (a) The business or objects of the corporation (G. C. L., § 16), which must be such as may lawfully be carried on by domestic corporations. (Id., § 15.) (b) The place within the state which is to be its prin- cipal place of business, and the name of the person thereat to receive service of process. If within a city, the street and street number if any, or other suitable designation of the particular locality must be given. This statement must be sworn to in due form, usually by the president or acting head of the company and be impressed with the corporate seal. It must be accompanied by the writ- ten consent of the person designated to receive service to act for the company. (G. C. L., § 16.) (See Forms 69-74.) (2) There must accompany this verified statement a copy of the corporate charter or certificate of incorporation in the English language, sworn to by an executive officer of the company. (G. C. L., § 16.) This affidavit may be made out- side the state before a New York commissioner of deeds or a local notary. In the latter case it must be accompanied by a certificate showing the notary's authority. (For affidavit, see Form 71.) If the papers are in proper form and the name of the foreign corporation is not one forbidden to a domestic cor- poration of the same character, or so closely resembling that of an existing domestic corporation as to cause confusion, the Secretary of State will issue a certificate of authority to do business. (G. C. L., § 15.) FORKIGN CORPORATIONS. 1 73 If the resident agent of a foreign corporation is changed, a revocation and new designation (see Form 72) must be filed with the Secretary of State. (G. C. L., § 16.) The resident agent may at any time terminate his designation by a written revocation filed in the office of the Secretary of State. (Id.) (See Form 73.) § 181. Fees. The fees for filing the above papers and for the certificate of authority when a foreign corporation seeks admission to the state, amount to $11, and this sum should be sent with the papers direct to the Secretary of State. (Executive Law, § 26, subdivs. 7, 13.) No fee is paid for filing revocation and new designation when the resident agent is changed. § 182. Status of Foreign Corporations when Licensed. Foreign corporations are governed primarily by the law of their domicile, and mere permission to do business in New York does not enlarge their powers in any way. Bard v. Poole, 12 N. Y. 495 (1855). Within their chartered powers, however, they have, upon receiving the certificate of authority, the same right to transact business as domestic companies. (G. C. L., § 15.) Lancaster v. Amsterdam Co., 140 N. Y. 576 (1894). A seemingly unnecessary provision of the stat- utes (G. C. L.., § 20) specially grants to such coi^porations the power to hold real estate requisite for the corporate busi- ness and to convey the same as fully as domestic corporations. Lancaster v. Amsterdam Co., supra, p. 589. § 183. Penalties for Non-Compliance. Contracts made in New York prior to obtaining a certifi- cate of authority by a foreign corporation doing business in the state are unenforceable in the state courts, whether sued upon by the corporation, by its assignee or by those claiming under either. (G. C. L., § 15.) 174 NEW YORK CORPORATIONS. The prohibition of the statute applies only to actions on contracts. A foreign corporation may maintain a tort action, as, for example, replevin, without obtaining a certificate of authority to do business. American Type Founders Co. v. Conner, 6 Misc. 391, 394 ( 1894) ; Schlitz Brewing Co. v. Ester, 86 Hun 22, 27 (1895). A foreign corporation may sue in this state on a contract made in another state. Batchelder Co. V. Knopf, 54 App. Div. 329 (1900). Such a corpora- tion may have equal rights with residents under particular statutes. For example, it has been held that a foreign corpo- ration may file a mechanic's lien against buildings containing materials furnished in the state even though it has not obtained a certificate authorizing it to do business. Campbell v. Coon, 149 N. Y. 556 (1896) ; Matter of Simonds Furnace Co., 30 Misc. 209 (1900). Compliance with the statute must be specifically pleaded. Wood &. Selick v. Ball, 190 N. Y. 217 (1907). Foreign cor- porations may take New York real property by devise, or may purchase it on foreclosure of any mortgage held by them, or may acquire it upon settlement to secure a debt, without a certificate, and hold the same for a term not exceeding five years. (G. C. L., § 21.) § 184. Principal Office. Foreign corporations must maintain a principal office or place of business within the state. (G. C. L., § 16.) This may be merely the business office of the resident agent, the object of the statute being attained when a place is designated where process may be served on the company. The location of the principal office within the state must be stated in the application for admission. (G. C. L., § 16.) No statutory provision is made for change of location thereafter. § 185. State Taxation. License Tax. Foreign corporations which have obtained authority to transact business in this state under the provisions of the FOREIGN CORPORATIONS. 1 75 General Corporation Law must pay a license tax of one- eighth of one per cent, on the capital employed in New York during the first year of business. If in any year thereafter the capital so employed is increased, a similar tax must be paid on the increase. (Tax Law, § i8i.) This tax corre- sponds to the organization tax required of domestic corpora- tions (See Chapter II), but owing to its higher rate places foreign corporations at a distinct disadvantage. "The measure of the amount of capital stock employed in this state shall be such a portion of the issued capital stock as the gross assets employed in any business within this state bear to the gross assets wherever employed in busi- ness. * * * qphe amount of capital upon which such taxes shall be paid ■ shall be fixed by the comptroller, who shall have the same authority to examine the books and rec- ords in this state of such foreign corporations, and the em- ployees thereof, and the same power to issue his warrant for the collection of such taxes, as he now has with regard to domestic corporations." (Tax Law, § i8i.) The license tax must be paid within thirteen months from the date of beginning business in New York and unless a receipt therefor is obtained, the corporation cannot maintain an action in the state courts. (Tax Law, § 181.) (See § 189.) Failure to pay this tax is an affirmative defense to be availed of by answer. Wood & Selick v. Ball, 190 N. Y. 217 (1907). § 186. State Taxation. Annual Privilege Tax. Foreign business corporations carrying on business in New York, unless engaged wholly in manufacturing, pay a state tax for the privilege corresponding to the franchise tax paid by domestic companies (see Chapter XIV,- "State Taxa- tion") computed on the basis of capital employed within the state. (Tax Law, § 182.) The taxability of foreign corporations under the section depends therefore upon the concurrence of two conditions. 176 NEW YORK CORPORATIONS. ( 1 ) The corporation must be doing business within the state. (See § 178.) (2) Some portion of the capital must be employed with- in the state. People ex rel Chicago June. Co. v. Roberts, 154 N. Y. I (1897). It is not always an easy matter to determine what capital is employed within the state although the same general rules apply as in the case of domestic companies. (See Chap. XIV, "State Taxation.") People ex rel Davis-Colby Co. v. Camp- bell, 66 Hun 146, 148 (1892). "Capital" means actual tangible property and not capital stock. People ex rel Seth Thomas Clock Co. v. Wemple, 133 N. Y. 323 (1892) ; People ex rel Ginseng Co. v. Kelsey, 93 N. Y. Supp. 369, Affd. 182 N. Y. 526 (1905). It is held, however, that the statute contemplates the taxation of "capi- tal" not "surplus." People ex rel Advertising Co. v. Roberts, 4 App. Div. 288 (1896), Affd. 151 N. Y. 621 (1896). Under this ruling a foreign corporation employing an amount equal to its entire capital stock in the state, may in addition employ its surplus in the state exempt from taxation — that is, it cannot be taxed on an amount greater than its authorized capital stock. While in most cases a foreign corporation doing business within this state will employ some portion of its capital in so doing, it is quite possible for the business to be of such a nature as not to require the employment of capital. It has been held that a foreign corporation soliciting orders through agents for transmission to an office outside the state, is not employing capital within the state even though it leases a New York office for the purpose of showing samples and deposits money in a New York bank. People ex rel Smith Co. v. Roberts, 27 App. Div. 455 (1898) ; People ex rel Kel- logg V. Roberts, 30 App. Div. 150 (1898). The annual privilege tax is computed on the amount of capital employed within the state and the rate is detemiined primarily by the dividends declared, exactly as in the case of FOREIGN CORPORATIONS. 177 domestic companies. No distinction is made between divi- dends earned within or without the state. The tax is regu- lated by the dividends declared, wherever earned. Meat Co. v. Roberts, 155 N. Y. 408 (1898). (See Chap. XIV, "State Taxation.") § 187. Local Taxation. Foreign corporations are taxed for local purposes on their real estate and on the capital employed within the state in the same manner and under the same rules as domestic companies. (Tax Law, § 7.) (See Chap. XV, "Local Taxation.") Peo- ple ex rel Yellow Pine Co. v. Barker, 23 App. Div. 524, Affd. 155 N. Y. 665 (1898). But see City of New York v. Mc- Lean, 170 N. Y. 374 (1902) for difficulty of enforcement in certain cases. They are entitled to deduct from their capital the amount of debts incurred in the purchase of New York property but not general indebtedness. People ex rel Hecker Milling Co. v. Barker, 147 N. Y 31 (1895). § 188. Books Required to be Kept by Foreign Corporations. Every foreign business corporation must keep at its prin- cipal office in the state, or at the office of its local transfer agent, a stock book in the form prescribed for domestic com- panies. (S. C. L., § 33.) (See §§ 135, 136.) The stock book must be open daily during business hours for the in- spection of stockholders and judgment creditors and state offi- cials authorized thereto. (S. C. L., § 33.) The New York courts have no jurisdiction to grant a writ of mandamus against a foreign corporation doing business in this state to compel it to allow inspection of its books. Matter of Rappleye, 43 App. Div. 84, Affd. 161 N. Y. 615 (1899) ; Matter of Mitchell v. N. S. O. & T. Co., 44 Misc. 514 (1904). The person entitled to inspect such books and records must apply to the courts of the corporation's domicile. As an incident to an action either in law or equity, a New York court may, however, undoubtedly 178 NEW YORK CORPORATIONS. compel the production of the books and papers of a foreign cor- poration, either by subpoena duces tecum or authorized judicial order. Matter of Rappleye, supra. For any refusal to allow the prescribed inspection of the stock book, the corporation and the officer or agent so refusing shall each forfeit $250 to the person to whom such refusal was made. (S. C. L., § 33.) Demands and refusals on successive days render the officer so refusing liable to but one penalty. Cox v. Paul, 175 N. Y. 328 (1903). § 189. Reports. The same reports are required from foreign as from domestic corporations. (See Chap. XVI, "Reports;" also Chap. XXV, "Forms of Reports.") (S. C. L., § 34; Tax Law, § 192.) A special report must be made by foreign cor- porations at the end of the first year of business in the state as a basis for determination of the license tax. (See § 185.) This report must be made to the state comptroller, and is in practi- cally the same form as the annual report made to the comptrol- ler for the purposes of the privilege tax. (See Form 65.) Blanks may be obtained, without cost, by application addressed to "State Comptroller, Albany, New York." § 190. Attachment Against. An attachment may issue against the New York property of a foreign corporation "however solvent it may be, and how- ever great its ability to pay all claims against it on demand. It is not within its power to prevent a creditor, or a fictitious claimant even, from obtaining an attachment." Robertson v. Ongley Electric Co., 82 Hun 585, 588 (1894). (Code of Civil Pro., §§ 635, 636.) CHAPTER XVIII. RECEIVERS OF CORPORATIONS, (a) Temporary and Permanent Receivers. § igi. Classification. Receivers of corporations are divisible into two classes with reference to their appointment and duties : (i) Those appointed pendente lite as receivers of the specific property subject to suit. (2) Those appointed generally in actions involving the dissolution or annulment of the corporation and the sequestration and distribution of its assets. § 192. Jurisdiction of Court to Appoint. Courts of equity have inherent poWer to appoint receivers of the first class. Such receivers are mere custodians of speci- fic property or administrative officers of the court acting at all times directly under its orders. Decker v. Gardner, 124 N. Y. 334> 338 (1891). Their appointment does not affect the au- thority of the directors to manage the corporation and all its property not directly placed under the receiver's control by the court. Also the New York statutes make specific provision for the appointment of a receiver of property involved in a suit to foreclose a mortgage where the mortgage debt, or the interest thereon has remained unpaid for a period of thirty days or more after it is due and after demand therefor has been made upon the proper officers of the corporation and where either the income of the property is specifically mortgaged or the property itself is probably insufficient to pay the mortgage debt. ( G. C. L., § 306.) 179 l8o NEW YORK CORPORATIONS. This is but the statutory crystallization of the old equity practice. Holland Trust Co. v. Consolidated Gas and Electric Light Co., 8s Hun 454 (1895). Jurisdiction to appoint receivers of the second class is wholly statutory. Matter of Binghamton General Electric Co., 143 N. Y. 261 (1894). Section 306 of the General Corporation Law enumerates the cases in which such a receiver may be appointed. These are as follows : ( 1 ) In an action brought by the Attorney General or by a stockholder or creditor to dissolve a corporation for one of the causes prescribed in Section loi of the General Corporation Law. (2) In an action brought by the Attorney General to an- nul a corporation brought pursuant to the provisions of Sec- tion 131 of the General Corporation Law. (3) In an action brought by a judgment creditor to se- quester the property of the corporation as provided in Section 100 of the General Corporation Law. (4) In an action brought by the Attorney General or by a creditor, trustee, director, manager or other officer of the corporation against corporate officers for misconduct as provid- ed for in Article 5 of the General Corporation Law. ( 5 ) In 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. (6) In a special proceeding for the voluntary dissolu- tion of a corporation. § 193- Qualification. Before proceeding to the discharge of his duties, a receiv- er must file a bond for such sum as has been fixed in the order of appointinent (G. C. L., § 234) and must file with the court an oath that he will discharge his trust to the best of his skill and understanding. (G. C. L., § 238.) RECEIVERS OF CORPORATIONS. l8l (b) Powers and Duties of Permanent Receivers. § 194. Notice to Creditors. The first duty of a permanent receiver is to give notice to creditors of his appointment. The statute provides that "im- mediately upon their appointment" such receivers shall give notice thereof by publication for three weeks in a newspaper printed in the county where the principal office is located. (G. C. L., § 250.) Publication once a week for three weeks satis- fies this requirement. The notice must contain: ( 1 ) A statement of due appointment and qualification as permanent receiver. (2) A demand that all persons owing money to the cor- poration account for and pay the same at a time and place speci- fied in the notice. (3) A notice to persons having in their possession prop- erty of the corporation requiring delivery of the same to the receiver on or before the date set for payment of debts due the corporation. (3) A notice to creditors to present and prove their claims on or before a date not less than forty days from the first publication of the notice. (4) A notice to all persons holding open or subsisting contracts to present the same in writing and in detail to the re- ceiver at a time and place specified in the notice. As a matter of convenience it is usual to select the same date under each requirement making it as near the forty day minimum as possible. § 195. Employment of Counsel. Receivers may, and in practice almost invariably do, em- ploy counsel. (G. C. L., § 242.) The statute provides that within three months after qualification, a receiver must fix the compensation of any attorneys employed by him. This must be done by written contract approved by the Supreme Court 1 82 NEW YORK CORPORATIONS. Upon at least eight days' notice to the Attorney General. The term of employment must not exceed eighteen months, but may be renewed from time to time for periods not exceeding one year, if approved by the Supreme Court, upon eight days' no- tice to the Attorney General. (Id.) Compensation may be a fixed sum or a proportion of the sums received and disbursed by the receiver. Payments to counsel may be made only upon or- der of the Supreme Court after notice to the Attorney General. All payments are subject to adjustment upon the final account- ing. (Id.) § 196. Collection of Assets. General. As conservator of the corporate property, the most import- ant duty resting upon the receiver after giving notice of his ap- pointment is the assembling of corporate assets and their con- version into money for ratable distribution among the creditors and stockholders. The statute provides that permanent receivers shall be trustees of the corporate property (G. C. L., § 231) with all the duties and obligations as to diligence and good faith in admin- istration which is required of trustees generally. Permanent receivers acquire title to the corporate property by operation of law as of the date of their appointment. At- torney General v. Atlantic Mutual Life Insurance Co., 100 N. Y. 279 (1885). Section 233 of the General Corporation Law provides that all real and personal property and all securities of every kind and nature belonging to the corporation, no matter where located, or by whom held, shall be transferred to, vested in and held by the receiver when such transfer is directed by the Supreme Court upon due notice of application for such an order to the Attorney General and the custodian of the funds, securities or property. No formal transfer is necessary as the order itself effects change of title. Attorney General v. Atlantic Mutual Life Insurance Co., supra. The powers and duties of receivers in the matter of col- lection of assets may be summarized as follows : RECEIVERS OF CORPORATIONS. 183 § 197. Collection of Assets. From Debtors. The statutory duty rests upon debtors of the corporation to account and answer for their indebtedness on or before the date fixed by the receiver in his notice of appointment. ( G. C. L., § 251.) The penalty for making a false account is the for- feiture of double the amount of the debt, recoverable by suit instituted by the receiver upon discovering the facts. (G. C. L., § 252.) In the event of dispute as to the amount due it is optional with the receiver to submit the matter to arbitration or to proceed by action in the courts in the regular way. If he de- cides to arbitrate, the statutory procedure is as follows : One or more impartial arbitrators may be agreed upon by written stipulation entered into between the receiver and the debtor. Upon filing this stipulation with the clerk of the Supreme Court in the county where the receiver resides a formal order of appointment will be issued designating the arbitrator selected by the parties. Such an arbitrator has the same powers and is subject to like duties and obligations and receives the same compensation as referees appointed by the Supreme Court in personal actions pending therein. He may issue commissions to take testimony of witnesses outside the county where the receiver resided at the time of his appoint- ment. The arbitrator's report should be filed in the same office where the order appointing him was entered and is conclusive of the rights of the parties unless set aside by the court. (G. C. L., §241.) In the event of failure to agree upon an arbitrator, provid- ed no action is pending for the recovery of the debt, either party may apply to the Supreme Court for the appointment of arbi- trators. Ten days' notice of motion must be given the adverse party, designating a judge residing in the same judicial district as the receiver to hear the application at chambers. The judge hearing the application may select one or more arbitrators in his discretion, designating his choice in a certificate delivered 184 NEW YORK CORPORATIONS. to the receiver. It is the latter's duty to file the certificate with the clerk of the court. A formal order of appointment will thereupon be issued as in the case where selection has been made by agreement. Receivers are empowered to sue for debts due the corpora- tion in the same manner and with like effect as might the corporation itself had the receiver not been appointed. (G. C. L., § 239.) Such suits have preference upon the calendars of all courts next in order to actions or proceedings brought by the people of the State of New York. (G. C. L., § 316.) It is not necessary to delay bringing suit until after the day fixed by the notice calling upon debtors to account. The specific duty is imposed upon the receiver to immedi- ately collect unpaid stock subscriptions, bringing suit if neces- sary. He need not sue if the debtor is "wholly insolvent." (G. C. L., § 244.) The consent of creditors is not necessary to such an action. (Id.) This provision was inserted in the statute in view of the rights given to creditors under Section 56 of the Stock Corporation Law. § 198. Collection of Assets. From Persons Holding Corpor- ate Property. If the receiver has reason to believe that property belong- ing to the corporation has not been turned over to him, he may secure from the Supreme Court an order for the examination of the person he suspects of withholding the property or of any person who may reasonably be expected to be able to testify concerning it. (G. C. L., § 240.) Such an order may be made at special term held within the judicial district in which the receiver was appointed, upon his verified petition setting forth the facts, either with or without notice to the party to be affected. If it appears to the court either by the receiver's petition or affidavit or by other competent proof that a proper case is presented, an order will be granted for the examina- tion of the necessary witnesses either before the court or before RECEIVERS OF CORPORATIONS. 185 a referee appointed for the purpose. The order usually contains an injunction preventing the disposition of the property in dis- pute until further order of the court. (Id.) Witnesses examined under such an order are entitled to the same fees and are subject to the same penalties for failure to appear and testify as are witnesses in the Supreme Court generally. They may be represented by counsel and are privi- leged from prosecution upon the facts disclosed by their testi- mony. They may make any voluntary statement in their own behalf concerning the subject of the examination which may seem to them desirable or pertinent. The examination is con- ducted in all respects as a trial, the judge or referee having power to order adjournments and to rule upon questions and objections precisely as a trial judge. (Id.) The testimony, signed and sworn to by the various wit- nesses, must be filed in the office of the clerk of the county in which the receiver was appointed. The court may make such orders as the testimony seems to require. (G. C. L., § 240.) Specific provision is made by statute for the securing by the receiver of corporate property held by a sheriff under at- tachment. Upon payment to the latter of his fees the receiver becomes entitled to the property or to any money held by the sheriff as the result of the sale of attached property. (G. C. L., § 239, subdiv. 3.) § 199. Collection of Assets. From Mortgagees and Pledgees. The statute provides for the redemption of mortgages and conditional contracts and pledges of personal property in cases where it appears to the receiver to be for the best interests of the estate, that it should be done. (G. C. L., § 239, subdiv. 7.) It is usual to secure express directions from the court before acting in such matters. § 200. Conversion of Estate into Money. It is the duty of the receiver to convert all of the property of the corporation, both real and personal, into money as 1 86 NEW YORK CORPORATIONS. Speedily as possible. (G. C. L., § 245.) Sales may either be private or at public auction. If at auction, at least fourteen days' public notice of the time and place of sale must be given and published for two weeks in a newspaper printed in the county where the sale is to be held. (G. C. L., § 239, subdiv. 4. ) Private sales may be made only by express authorization of the court which appointed the receiver and upon terms and conditions approved by it. Notice of application for such an order must be given to the Attorney General and to such other parties as may be entitled to notice of motions in the action or proceeding in which the receiver was appointed. (G. C. L., § 246.) Property may be sold subject to existing mortgages, contracts, pledges or judgments. (G. C. L., § 239, subdiv. 7.) Three-quarters of the purchase price may be left on mortgage, secured by the bond of the purchaser, if the receiver considers such credit necessary. (G. C. L., § 239, subdiv. 5.) § 201. Care of Funds. Accounts. Orders appointing receivers of corporations must designate one or more places of deposit where all funds not required for immediate disbursement must be kept. No deposits may be made elsewhere, nor may any portion of the money be invested except by express order of the court made upon due notice to the Attorney General. (G. C. L., § 313.) Receivers must keep regular account of all money received to which every creditor or other person interested in the estate shall have access at all reasonable times. (G. C. L., § 247.) § 202. Distribution of Assets. (a) Creditors' Meetings. Within four months from the date of his appointment the receiver must call a general meet- ing of creditors by publication of notice at least once a week un- til the date set for the meeting in a newspaper within the coun- ty where the principal office of the corporation is located. The notice must designate the place of meeting and the date thereof, RECEIVERS OF CORPORATIONS. 1 8/ which must be not less than two nor more than three months after the first publication of notice. The purpose of the meet- ing is to ascertain the outstanding liabilities, adjust contracts and give the creditors an opportunity to discuss the general situ- ation with the receiver. (G. C. L., § 253.) In view of the great desirability of making the meeting representative, it is good practice for a receiver to apply to the court as soon as possible after his appointment for an order re- quiring all creditors to exhibit and prove their claims. It is within the power of the court to grant such an order at any time, either before or after final judgment, directing the proof of claims within a period not less than six months from the first publication of the order under penalty of exclusion from the benefits of the judgment and distribution. Publication must be made as directed in the order. (G. C. L., § 303.) If such an order is obtained promptly, it is usually possible to make the date of the creditors' meeting and the time limit for the proof of claims simultaneous. Meetings may be adjourn- ed, in which case it is good practice, though not required by statute, to publish notice of adjournment in the same manner as notice of the original meeting. At each meeting the receiver must present an account of all money in his hands. (G. C. L., §254.) (b) Proof of Claims. Proof of claims is usually made by affidavit filed with the receiver. Persons failing to prove their claims within the time limited by the order of the court, may, at any time before final distribution, file their proofs, pro- vided they show by affidavit or otherwise that they had no knowledge of the order in time to comply with its requirements. (G.C.L.,§303.) (c) Order of Distribution. As soon as the debts have been ascertained and the assets are in condition to distribute, an order should be obtained from the court directing distribu- tion in the following order of priority : (i) Expenses of the receivership. (G. C. L., § 255.) l88 NEW YORK CORPORATIONS. (2) Debts due to the United States and all debts entitled to preference under the laws of the United States. (3) Judgments. (4) All other debts pro rata without preference to debts due upon specialties. (G. C. L., § 261.) Debts not due at the time of distribution must be rebated at six per cent, to the due date and paid. (G. C. L., § 258.) It is not necessary to distribute all the assets in one divi- dend. The receiver may retain sufficient funds to meet possible contingencies, as for example possible adverse judgments in pending actions. (G. C. L., § 257.) If any assets remain after the first dividend, a second and final dividend must be de- clared within one year thereafter. Notice that a final dividend is to be declared must be published once a week for three weeks in a newspaper printed in the county where the principal office of the corporation was situated. (G. C. L., § 263.) The same order of distribution applies to the second as to the first dividend, except that creditors who have filed proofs of debt but too late to receive their proportionate share of the first dividend, are entitled to receive what they would have had from that dividend before distribution is made to other creditors. (G. C. L., § 262.) After the second dividend the receiver is not liable to any creditor who failed to present a detailed written claim on or before the date therefor fixed in the notice of the second divi- dend. (G. C. L., § 267.) Any surplus remaining after the second dividend must be distributed ratably among the stock- holders of the corporation. (G. C. L., § 264.) If dividends are unclaimed for one year they must be distributed among the other creditors, and, as to any surplus, among the stock- holders. (G. C. L., § 266.) § 203. Fees of Receivers. Receivers are entitled to receive their necessary expenses and in addition an amount allowed by the court in its discretion as follows : RECEIVERS OF CORPORATIONS. 1 89 (a) In Voluntary Dissolution. Upon the first $20,000, not exceeding five per centum ; upon the next $80,000, not ex- ceeding two and one-half per centum; on the remainder, not exceeding one per centum. The court may, however, in case the receiver's fees so computed do not amount to $100, allow a minimum fee not exceeding $100 irrespective of assets. (G. C. L., § 277.) (b) In Other Receiverships. Not exceeding two and one-half per centum upon the sums received and disbursed, but, save on final account, not more than $12,000 per annum or ratably for a less period. Upon the final accounting, an ad- ditional allowance of two and one-half per centum may be granted by the court in its discretion. (G. C. L., § 278.) § 204. Final Accounting. A receiver may be compelled to account at any time by the court which appointed him. (G. C. L., § 276.) In receiver- ships of business corporations there is usually but one account- ing. The statute provides that within one year after qualify- ing, the receiver must apply for a final settlement of his ac- counts and an order for distribution, or otherwise shall apply for an order extending his time to account. (G. C. L., § 268.) In case of failure to account within one year, the Attorney Gen- eral or any creditor may obtain an order requiring the receiver to show cause why an account and distribution should not be made. After the expiration of eighteen months it is the duty of the Attorney General to apply for such an order. (Id.) Notice of final accounting must be published once a week for three weeks in a newspaper published in the county where the principal office of the corporation was situated, specifying the time and place where the accounting will be rendered. ( G. C. L., § 269.) The court may order a reference for examination of the account (G. C. L., § 271) and enter a final order of dis- tribution conclusive upon all creditors and stockholders. (G. C. L., § 270. ) Supplementary accountings must be made of all igO NEW YORK CORPORATIONS. moneys not distributed by the final account. (G. C. L., § 272.) § 205. Resignation and Removal of Receivers. If a receiver desires to resign his trust he must follow the procedure prescribed in detail in G. C. L., § 275. The court may remove receivers at any time, with or without cause, either upon its own initiative or upon petition of any person interested in the estate. (G. C. L., § 273.) The Attorney General may petition for the removal of a receiver to facilitate the closing of an estate. (G. C. L., § 311.) Va- cancies created by death, removal or otherwise may be filled by the court. (G. C. L., § 274.) PART II.— FORMS AND PRECEDENTS. CHAPTER XIX. SUBSCRIPTION LISTS AND RECEIPTS. (a) Subscription Lists. Form I. — Subscription List. Subscription List. THE VERASCOPE CAMERA COMPANY. To be Incorporated under the Laws of New York. Capital Stock, $25,000. Shares, $100 each. We, the undersigned, hereby subscribe for the number of shares of the Capital Stock of The Verascope Camera Company set opposite our re- spective names, and agree to pay the par value thereof in cash on demand of the Treasurer of the Company, so soon as said Company is organized. Troy, New York, March 15, 1909. NAMES ADDRBSSES SHARES AMOUNT David B. Ewbank Troy, New York Syracuse, New York.... 15 10 II.500 00 1,000 00 (See §§ 8i, 89.) This is a common form of subscription list. It is simple, but sufficient where the purposes and conditions of the sub- scription are well understood. Subscriptions under it are, however, mere promises without consideration, revocable at will by the subscribers until the organization of the company. To avoid this element of uncertainty, subscription lists are 191 192 NEW YORK CORPORATIONS. sometimes drawn with a trustee acting for the corporation, as in the following form, so that subscriptions are binding from the time they are made. Form 2. — Subscription List. Trustee's. Subscription List. HARTFORD CEMENT COMPANY. To be Incorporated under the Laws of the State of New York for the Manufacture of Portland Cement. Capital Stock, $500,000. Shares, $100 each. We, the undersigned, hereby agree with William M. Barclay, as Trus- tee for the Hartford Cement Company, to subscribe for the number of shares of the Capital Stock of said Company set opposite our respective sig- natures, and agree to pay the par value thereof as follows : Five per cent, of subscription on demand to William M. Barclay, as Trustee for the said Company, such payment, or so much thereof as may be necessary, to be used for the preliminary and incorporating expenses of said Company; thirty per cent, of subscription to the Treasurer of the Company ten days after the incorporation thereof, and the remainder of subscription at such times and in such instalments as may be prescribed by the Board of Directors. New York, April 2, 1909. NAMBS ADDRESSES SHAKES AMOUNT Henry C. Allen 170 Broadway, N. Y 35 j53,5oo 00 Frequently subscription agreements provide that sub- scriptions are not effective unless a certain specified amount is secured. In this case the subscribers, if not restrained by the terms or form of the agreement, may cancel their subscriptions at any time before the required amount has been subscribed. SUBSCRIPTION LISTS AND RECEIPTS. Form 3. — Subscription Agreement. Conditional. 193 Subscription Agrebment. THE HARVARD STEAMSHIP COMPANY. A Corporation to be Organized under the Laws of the State of New York for the Operation of a Steamship Line between New York City, New Orleans and Intermediate Points. Capital Stock $10,000,000. Common Stock. . .$7,000,000. Preferred Stock. .$3,000,000. Shares $100 each. We, the undersigned, hereby agree with John H. Leigh and Howard P. Moran, as Trustees for the incorporation of The Harvard Steamship Company, to subscribe and do hereby severally subscribe for the number of shares of the Six Per Cent., Cumulative Preferred Stock of said Com- pany set opposite our respective signatures, and agree to pay the value thereof as follows: Twenty-five Per Cent. (25%) of the amount of our respective subscriptions ninety days after the organization of said Com- pany; Twenty-five Per Cent. (25%) ninety days after the date of said first payment, and the balance at such times and in such amounts as may be required by the Board of Directors of said Company. The subscriptions of this agreement are conditioned as follows: 1st. That bona fide subscriptions hereunder to the amount of Five Hundred Thousand Dollars ($500,000) shall have been secured on or be- fore the 1st day of June, 1909. 2d. That the complete organization of the Company shall have been effected on or before the 1st day of July, 1909. And in case of the failure of either of these conditions, the subscrip- tions hereunder are to be null, void and of no effect. It is further understood and agreed and is a condition of the sub- scriptions hereunder, that for each share of Preferred Stock hereby sub- scribed for, and paid for in accordance with the terms of subscription, the subscriber is to receive as a bonus and without further payment, one share of the full-paid and non-assessable Common Stock of the said Company. For the purposes of this agreement, the ist day of July, 1909, shall be considered the date of organization of said Company, provided its or- ganization has been effected on or before that date. It is agreed that this instrument may be executed in separate instru- ments with the same force and effect and individual obligation as if all the signatures thereto were affixed to a single instrument. New York City, February i, 1909. DATE NAMES ADDRESSES SHARES AMOUNT Sept. 5... Schuyler H. Wilson... Morristown, N. J... 500 |5,ooo 194 NEW YORK CORPORATIONS. When subscriptions are solicited widely, or from parties at a distance, an individual subscription blank is usually em- ployed and is mailed to the particular person with such state- ments and prospectuses as may be necessary. A common form of individual blank follows. In Form 5 is given the usual blank employed after organization. Form 4. — Subscription Blank. Individual. THE NEW PROCESS RUBBER COMPANY, 60 Liberty St., New York. To be Incorporated under the Laws of New York. Capital Stock, $500,000. Shares, $100 each. I hereby subscribe for Twenty (20) shares of the Capital Stock of The New Process Rubber Company at the par value thereof, and agree to pay fifty per cent, of such subscription on demand of the Treasurer so soon as said Company is incorporated; the remainder to be paid at such times and in such amounts, not exceeding ten per cent, of said subscrip- tion in any one month, as may be prescribed by the Board of Directors. Unless one-half of the capital stock of said Company is reliably sub- scribed by the thirtieth day of January, 1909, and the Company incorporated within thirty days thereafter, this subscription shall be void and of no effect. Dated January 2, 1909. Howard McLean, 16 Woodlawn St., Arlington Heights, Mass. Form 5. — Subscription Blank. After Organization. THE ST. JOHN PLACER MINING COMPANY, 6 Wall St., New York. Capital Stock, $1,000,000. Shares, $10 each. Enclosed find certified check for in payment for Shares of the full-paid, non-assessable stock of the St. John Placer Min- ing Company. SUBSCRIPTION LISTS AND RECEIPTS. 1 95 Dated 1909. Issue Certificate to Street City State Make checks payable to order of the Company. The right is re- served to reject or pro rate subscriptions. Give full name of party to whom stock is to be issued. In New York any subscription after organization, pay- able in money, must be accompanied by at least ten per cent, of its amount. (S. C. L., § 53.) (See § 81.) (b) Receipts for Subscription Payments. When a subscription to stock is paid in full, certificates are usually issued to the subscriber at once and serve as a re- ceipt for his payment. When, however, payment is made be- fore the organization of a company, or is not in full, or the permanent stock certificates are not ready for delivery, receipts must be given, the form depending upon the conditions. When payments on subscriptions are to be made before incorporation, the trustees named in and made parties to the subscription agreement are usually authorized to receive such payments. If not, a trustee may be selected later by action or consent of the subscribers. After incorporation, payments on subscriptions are made to the treasurer of the company, and if payments are partial, or certificates are not ready for de- livery, receipts are issued, sometimes signed by the treasurer alone, but at other times signed by the president as well. ( See Forms 7, 9, 10.) Subscription receipts are printed or otherwise prepared, with blanks for the variable data, such as name of subscriber, number of shares, amount of payment, etc., to be filled in as each receipt is issued. The same data, entered on the stub of the receipt, gives a record of the transaction. Receipt and 196 NEW YORK CORPORATIONS. <; o o 10 o o u Q o o o •a n! o fi u s H a> in V 0) V &^ 8;§ c3 :2 .S -o 13 !^ rt 0..2 M "§ c iS • S* sf r^ s n ut )-• rt U „ 2 — _^ u -S o S. ^ -S .-H "S C O |_ nJ ii a ^ (§ § ;^ r3 1. P til S S; r- ° nj OT -O o C tS - 5 .3 I u S S « •^■^ °^ I J3 O •'^ .2 " ■s S ^ C rt lu ,? .0 u E « g^ Si C rO ,0 j: *. - fH O - rt o S ... ^ , ^ 2 o .S>3 8> o o •§ .a •§ 3 o a <: fe 0) +j R § m W- g o\ ■F J3 1 a) CL, S i ^ u i E a rt 14 <: ^ SUBSCRIPTION LISTS AND RECEIPTS. 197 11 )5 o Eh Iz; o o p t o t3 m (U en y3 &5 tn > *** In r; w Vh *^ g W ?^ re TO j_i .i5 w S j^ ?^ " m -e H S rt si ?! 'a rt O O *t3 o o ii I" rt O o ■S ^•gt c .•s -s i "cm m rt g « ^ R .2 t. P< 1- rt •(_ rt (n fii o !3 « 2 "o "IS ^ ••2 g p, "' 3 T3 «■? •ti w 00 •a S u m s c Ph 2 iS rs J^ •im "rl •« f ri tr3 CO 13 "' V n! CO « (u C " -a. s o o § ■S c 6 M >> 3 a .s g c 3 o u u en t 6 o tr3 CO !n "! " tn C 0) o M CD 3 to G 1-1 o u ■M c a •a Hi H u o o iz; •r* »-< 3 J3 xn. Si 3 3 O E <: 8 8 Pi o : o ■n en (M Oi T1 a nJ J3 H E 12 OS to 198 NEW YORK CORPORATIONS. stub are usually, as a matter of convenience, bound in book form. The trustee's receipt given in Form 6 will be found con- venient. It is but seldom that more than one subscription pay- ment is made before the organization of a corporation, but, if so, a second receipt is usually issued. A convenient instalment certificate is shown in Form 7. Occasionally the stubs of instalment certificates are provided with a receipt blank similar to that of the stock certificate stub (see Form 12), to be signed by the party receiving the scrip. As the scrip is itself a receipt for money paid in, the secondary receipt is hardly necessary. The receipt for a stock certificate is of a different nature, as the stock certificate, save on original issue, is not a receipt for money or value received. When instalment scrip is issued subsequent payments are conveniently endorsed on the back of the receipt or certificate if the conditions permit. In such case the ruling shown in Form 8 should appear on the back of the scrip. Form 8. — Endorsement of Instalment Payments. DATE INSTALMENTS PAID SIGNATURE OF TREASURER March i, 1909 I500 500 Frank Howard A sufficient number of lines should be allowed for the pre- scribed number of instalment payments. As payments are made, each one is entered and is verified by the signature of the treasurer in the last column. When this plan is followed, the stubs of the certificates should also have rulings to permit the entries of the date and amount of these subsequent payments. Both certificate and stub will then show a complete record of payments made. SUBSCRIPTION LISTS AND RECEIPTS. 199 When full payment has been made of stock subscriptions and permanent certificates are not ready for delivery, tempor- ary certificates are usually issued. (See Form lo.) If a less formal instrument is preferred, the following interim receipt will be found convenient. This has the usual stub— not shown in the form — and may be signed by the president as well as the treasurer if desired. Form g. — Interim Receipt. No. 8s. Shares, S- Treasurer's Receipt. WILLIS COAL COMPANY. 146 Broadway, New York. Capital Stock, $500,000. Shares, $100 each. $500.00. This is to certify that John G. Williams has paid into the treasury of the Willis Coal Company the sum of Five Hundred Dollars in full payment for Five Shares of its Common Stock, duly executed certificates for which will be issued to his order upon surrender of this receipt, so soon as said certificates are ready for delivery. Roger Stevenson, New York City, February 20, 1909. Treasurer. The interim certificate is obviously inconvenient if any considerable interval of time is to elapse before the issue of permanent certificates, and in such cases the temporary cer- tificate, which may be assigned and reissued with all the ease and convenience of the ordinary stock certificate, is to be pre- ferred. Temporary certificates of stock when issued are in the general form of the permanent certificate, but reference is made in the body of the instrument to its temporary character, and the certificate itself is usually printed or otherwise prepared at a small cost in keeping with its temporary nature. 200 NEW YORK CORPORATIONS. rt o O u •A w w o < o !2; 8 h4 3 O O 0) O u o x/x is ii o a B a> Eh o o o u ^ o s •sls^ jj > "^ -o -n 8-^-2 go rt CO <^y3' . 5 t; 3 S u ■» So.s (O CHAPTER XX. STOCK CERTIFICATES AND STOCK BOOKS. "The stock of every stock corporation shall be repre- sented by certificates prepared by the directors and signed by the president or vice-president and secretary or treasurer and sealed with the seal of the corporation." (S. C. L., § 50.) The adoption of a form of certificate by the board of directors satisfies the requirement that certificates shall be "prepared by the directors." The signing oificers are, within the statutory limitations, usually prescribed by the by-laws. Form II. — Stock Certificate. Common. No. 25. 20 Shares. Incorporated under the Laws of the State of New York. HOLWEIN MANUFACTURING COMPANY. Capital Stock, $50,000. Full-paid and Non-assessable. This is to Certify that Roger P. Sherman is the owner of Twenty Shares of the Capital Stock of the Holwein Manufacturing Company, trans- ferable only on the books of the Company by the said owner thereof in person or by duly authorized attorney, upon surrender of this Certificate properly endorsed. f CORPORATE \ Witness the Seal of the Company and the signatures of I SEAL. J its duly authorized officers this tenth day of April, 1909. James P. Harris, Henry E. McPherson, Treasurer. President. Shares, $100 each. (For stub, see Form 12.) (S. C. L., § So.) (See § 82.) 201 202 rt o o 8 *9- oi o c o "S s Is "5 o V o B J-1 < o o o t— 1 Pi O < NEW YORK CORPORATIONS. o -•- ■*^ y3 r:: -^ ■5 2"^|§*" w r rt 3 e o o P4 V 3 rt g en en CO o" CO en n! <«• a o •^ ;z; 2 •d w c rt o T3 1 ■l o U 1 o o o" "5 - ■- o " C -4-1 O Q. ," -i2 o o a c oj «; o u",y '"-^ o cmh^ oj+s* oM^S g.« g.-S fc 2 e """S- .3 5^22 c C^^ H ri rt G o O to ^^ r\ -. Tn.£A. ^ "^-b 4, 5 4J SO , a — rt-O : O c f? u ^S-S Sr'^Jq -'-^fl -S^2 3 3 V S oCi B . " J3-0 " ^ 0:5 to P4 1 i!< OJ-O n J3 C Ph •0 S § C « " M P 1" E H w s^ U! ^ ^ > L^ z,v c-2 ^ s " rt* .Si? .W : •"JJ rt O f^ K G o ell's "^ s !; " u o o •".Q^O S.S.C--J3"*-' K E S^"S-S„5|t:&E-3 - ^ ■■ u-O rt rt 3 C • '—in 2"..t rt S o "o O " rt b o OJ M CO rt ni .— I tin "^ ^■' . . c E-S O N U hH rt CO >-> ■< M U — ^^ ,4, So Pi — 5= = >n £. e OT ►H 0\ .« 0" •0 .. ;? 0) 3 CO (U CO ^ CO Ih 1. 1 1 55 ^= = iH .-= C4 " : CO m +j : OJ a Oi i 0- 2 m ■}>■"« any and , all Comp assign names : be - ^ i *• ^ ft «- a ft I S i ^ -^i -a "'as apital ndersi Comp ; w g -rt (u >, 3 ja u ■" -►^ a ■^ tl Ji ^^' 6 1 ^ S 2 § a a h CO § |x a a W W n m rt ^ P S-i W a g "S Id 2 ■< eg tn ^ w° >< >; l-4l ^. cO OJ ^ T) n 2 a s pq 13 10 i-~ 00 IH w onoa: HEoaHl i M W : 1) g -s a cd c p< c h4 S 1 CO H w 1 , ;:5 -o «i ssaarmN to P t-l CO (N t< ; -< ov tJ » " 2o8 NEW YORK CORPORATIONS. shown, the second transferrer has surrendered a single certifi- cate for seventy-five shares which is to be issued to two differ- ent parties. Two partial entries as shown are therefore neces- sary. If a single party surrenders several certificates to make up the total number of shares to be transferred, each certificate might be entered on a separate line^ or if not too numerous, the certificate numbers and amounts might be interlined so that the entire transaction would occupy but a single line of the record. The transfer book is not required by the New York statutes, and, while the larger corporations keep it as a con- venient form of record, it is frequently omitted from the books kept by the smaller corporations. The stock book and the stock ledger are practically one and the same book. In practice the stock ledger under its own name, or under the title "Stock Book and Stock Ledger," is so arranged as to contain all matters that would properly be entered in a stock book or a stock ledger. (See § 136.) The New York law is peremptory in regard to the keep- ing of the stock book. Heavy penalties are prescribed for failure so to do, and it is further provided that no transfer of stock shall be valid as against the corporation, its stock- holders and creditors, except to render the transferee subject to the statutory liabilities of a stockholder, until the transfer has been duly entered in the stock book. The forms of stock book and stock ledger which follow comply with the requirements of the statutes and will be found convenient and effective. The leaves of both these books are indexed to secure the requisite alphabetical arrangement, and the name and address of the stockholders appear at the head of the pages as in an or- dinary ledger. In Form 18 the date appears in the first column. In the second column, if stock is purchased, is entered the name of the stockholder from whom the stock is transferred, but, if STOCK CERTIFICATES AND STOCK BOOKS. 209 Slock is sold, the name of the party to whom the certificate is issued. The third cohimn — "Amount Paid Thereon" — has no reference to the amount paid for the stock by the party pur- chasing, save in case of original issue. It is merely intended to show the amount originally received by the corporation on the stock transferred, thereby indicating the amount, if any, still due to the corporation. The record of this column is of little or no value and it is included in the present form merely in compliance with the New York statutory requirements. The fourth column shows the number of the stock cer- tificate issued to the party when he acquires stock; the fifth column the numbers of the certificates surrendered by him when he disposes of stock. If he sells but a portion of the stock represented by a certificate — as in the third entry of the form given — the number of the new certificate issued to him to represent the balance of the unsold stock is entered in the fifth column. In the sixth column is entered the number of shares dis- posed of when sales are made, and in the seventh column the number of shares acquired when stock is purchased. These last two columns constitute the stock ledger proper, and the amount of stock belonging to the party with whom the account is kept may be found at any time by taking the difference be- tween the footings of these columns. ■ Form 19 is in the usual form of a ledger account. On the right-hand side of the page the party is credited with the stock he purchases or otherwise acquires, and on the left-hand side is debited with any stock disposed of. The difiference be- tween the two sides shows at any time the amount of stock standing to his credit. On the debit or sales side of the account, the first column gives the date of the transaction, the second the name of the party to whom the stock is transferred, the third the number of the surrendered certificate, the fourth the number of the cer- tificate reissued to the transferrer in case but a portion of the 210 NEW YORK CORPORATIONS. u v bo M u O •M 09 J4 O o pq u o 03 O {I M Pi o > < Q Pi « H I? O Q O O W o w Pi ^ t>^ f^ jj B. « 01 9 bo •o u I-) .!<: u o ■<-> 03 c nt O o M u o •M CO Pi S n $<4 Pi lO »o S o < S fl J! m w "^ 2 (u ►. ■^2 a <1 oo w : : : g lili 3 2 u ■9) : t~ M yS PS 01 : " Q S 9 ii iz; a O s?R,;? B n s « i Si« O Pi il-i ^1 • • : : : to 1 &1 ^ M n S3.Q STOCK CERTIFICATES AND STOCK BOOKS. 211 stock represented by the surrendered certificate is sold, and the fifth column the number of shares disposed of. On the credit side, the first column gives the date of ac- quisition, the second the name of the party from whom it is obtained, the third the character of the stock, whether full- paid or but part-paid, and, if the latter, the amount that has been paid the company thereon, the fourth column the number of the certificates issued to the party, and the last the number of shares acquired. CHAPTER XXI. CHARTER AND BY-LAW FORMS. (a) Charter Forms. "Three or more persons may become a stock corporation for any lawful business purpose or purposes * * * jjy making, signing, acknowledging and filing a certificate * * * " (B. C. L., §2.) The subscribers to a certificate of incorporation must be natural persons of full age, at least two-thirds of them must be citizens of the United States, and one of them a resident of New York. (G. C. L., §4.) "The certificate of incorporation of any corporation may contain any provision for the regulation of the business and the conduct of the affairs of the corporation, and any limita- tion upon its powers, or upon the powers of its directors and stockholders, which does not exempt them from the perform- ance of any obligation or the performance of any duty im- posed by law." (G. C. L., § 10.) Form 20. — Certificate of Incorporation. Usual Form. Certificate of Incorporation of HALLIMAN DRUG COMPANY. We, the undersigned, all being of full age and two-thirds being citizens of the United States, and one of us a resident of the State of New York, for the purpose of forming a corporation under the Business Corporations Law of the State of New York, do hereby certify and set forth : CHARTER AND BY-LAW FORMS. 2I3 First. — The name of said corporation shall be "Hailiman Drug Company." Second. — The purposes for which said corporation is to be formed are as follows : (a) To prepare, compound, manufacture, buy, sell, import, ex- port and generally deal in and with drugs, medicines, chemicals, pro- prietary articles, druggists', physicians' and hospital supplies and all kinds of pharmaceutical, chemical and medicinal preparations and ma- terials. (b) To conduct and carry on in all its branches the business of chemists, druggists and manufacturers and dealers in medical, chemi- cal, pharmaceutical and other compounds, preparations and materials and in all supplies, devices, machinery, apparatus and implements used with or in connection with such business. (c) To apply for, obtain, purchase or otherwise acquire and to register, hold, own, use, sell or otherwise dispose of any and all trade- marks, trade-names, processes, formulae, trade secrets, inventions and devices of all kinds, whether secured under letters patent of the United States or of any foreign country. (d) To purchase, lease or otherwise acquire and hold lands, buildings, tenements, factories and real estate in the State of New York and elsewhere for the plant, offices, workshops, warehouses, lab- oratories and manufactories of the Company and to lease, mortgage and convey such real estate in such manner as may appear for the best interests of the Company. (e) To buy, sell, import, prepare, manufacture and generally to deal in and with all kinds of goods, wares, chattels, merchandise and personal property, and to conduct any lawful manufacturing or mer- cantile business in connection therewith. (f) To carry on any other business permissible under the Busi- ness Corporations Law of the State of New York which may be car- ried on to advantage in connection with the business of the Company or which may tend to promote its interests. (g) To conduct its business in other States or foreign countries, and to have one or more offices out of the State, and to hold, pur- chase, mortgage and convey real and personal property out of the State but subject to the laws of the jurisdiction where such property is situated. Third.— The amount of capital stock of said Company shall be Twenty Thousand Dollars ($20,000). Fourth. — The number of shares composing said capital stock shall be Two Hundred (200) Shares of the par value of One Hundred Dollars ($100) each, and the amount of capital with which said Company will be- gin business is Five Hundred Dollars ($Soo). Fifth.— The principal business office of said Company shall be located in the Borough of Manhattan, in the City, County and State of New York. Sixth.— The duration of said Company shall be perpetual. Seventh.— The number of Directors of said Company shall be three (3)- 214 NEW YORK CORPORATIONS. Eighth. — The names and post-office addresses of the Directors of said Company for the first year are as follows : NAMgS. ADDRESSES. Ernest McVickars No. lO Maiden Lane, N. Y. City. Samuel Halliman No. 170 Broadway, N. Y. City. George Williams No. 310 W. 79th St., N. Y. City. Ninth. — The names and post-office addresses of the subscribers to this certificate and the number of shares of stock which each agrees to take in said Company are as follows : ISTAMES. ADDRESSES. SHARES. Ernest McVickars No. 10 Maiden Lane, New York City. . 3 Samuel Halliman No. 170 Broadway, New York Cjty i George Williams No. 310 W. 79th St., New York City. . . i Tenth. — At all elections of Directors of this Corporation, each stock- holder shall be entitled to as many votes as shall equal the number of his shares of stock, multiplied by the number of Directors to be elected, and he may cast all of such votes for a single Director or may distribute them among the number to be voted for, or any two or more of them as he may see fit. Eleventh. — Pursuant to Section 52 of the Stock Corporation Law, this Corporation shall have power to purchase, acquire, hold and dispose of the stocks, bonds and other evidences of indebtedness of any corporation, domestic or foreign, and issue in exchange therefor its stock, bonds or other obligations. In Witness Whereof, we have made and signed this Certificate in duplicate this twentieth day of February, One Thousand Nine Hundred and Nine. Ernest McVickars. Samuel Halmman. George Williams. State of New York, \ . County of New York. I ^^■■ On this 20th day of February, 1909, before me personally appeared Ernest McVickars, Samuel Halliman and George Williams, to me known and known to me to be the individuals described in and who executed the foregoing certificate, and severally acknowledged that they executed the same. Milton Noble, / notarial \ Notary Public No. 76, \ SEAL. I New York County, N. Y. (See Chap. IH; also B. C. L., § 2.) The foregoing is the usual form of New York charter. It is usually prepared in triplicate, two copies for filing and* one copy for the use of the corporation. The extra copy, if intended for use as legal evidence of the facts therein set CHARTER AND BY-LAW FORMS. 21 5 forth, must be certified by the Secretary of State. If it is merely for the company files, as is usually the case, certifica- tion is unnecessary. (For fees, see Part III, Tables 1-4.) The word "The" should be omitted from the corporate name unless it is desired as part of the legal title. Its inclu- sion in the name at times involves very awkward verbal con- structions. In case of doubt as to whether any particular name will be allowed by the state authorities, the matter may be settled by correspondence with the Secretary of State. The charter purposes may be as comprehensive as desired so long as they are in accord with the state laws. The amount with which the company will begin busi- ness may not be less than $500 and the incorporators' sub- scriptions should be at least this amount. The street address of principal office is not required, but if in New York City, the Borough must be given. Any desired number of directors, not less than three, may be designated. Three incorporators are sufficient, and, though any larger number desired may participate, difficulty in securing signa- tures and acknowledgments is increased thereby. All the incorporators must be subscribers to the stock of the com- pany to the extent of at least one share. Their business ad- dresses are sufficient for the purposes of the charter. Form 21. — Certificate of Incorporation. Extended Purposes. Certificate op Incoiu>oration of the HAMILTON SMELTING AND MINING COMPANY. We, the undersigned, all being of full age and two-thirds being citi- zens of the United States and one of us a resident of the State of New York for the purpose of forming a corporation under the Business Cor- porations Law of the State of New York, do hereby certify and set forth : 2l6 NEW YORK CORPORATIONS. First. — The name of said corporation shall be "Hamilton Smelting and Mining Company." Second. — The purposes for which said corporation is to be formed are as follows : (i) To buy, lease or otherwise acquire mines, mining rights, quar- ries and mineral lands of every kind, nature and description, and to work, mine, prospect, develop, operate and promote the same; to mine, quarry and excavate copper, gold, silver and other ores and metals and minerals of all kinds and descriptions. (2) To buy, lease, construct, own, control, operate and maintain mills, works and plants for the crushing, sampling, milling, smelting, re- duction and concentration of minerals and metal-bearing ores and the' ex- traction therefrom of all kinds of metals and mineral products and by- products, on its own account and as factor and agent for others. (3) To treat, prepare and manufacture and to buy, sell and generally to deal in iron, steel, manganese, coke, copper, lumber and other materials and in all or any articles consisting of or partly consisting of metal, wood or other materials and any and all products and by-products therepf. (4) To buy, sell, manufacture, produce and dispose of all kinds of goods, wares, merchandise, manufactures, commodities, foodstuffs, drugs, furniture, machinery, tools, supplies and agricultural products, and generally to engage in and carry on any form of manufacturing or mercantile enter- prise, necessary or incidental to the business of the Company. (5) In other states and jurisdictions to have one or more offices and to carry on all or any part of its operations and business, and unlim- itedly and without restriction to hold, purchase, mortgage, lease and con- vey real and personal property as allowed by the laws of such states and jurisdictions. (6) To apply for, obtain, purchase or otherwise acquire and to reg- ister, hold, own, use, operate and to sell, assign or otherwise dispose of any and all trade-marks, patent rights, improvements, processes, formulae, inventions and apparatus of all kinds, whether secured under letters pat- ent of the United States or in any foreign country or in any other manner. (7) To do any of the things hereinbefore enumerated for itself or on account of others; to make and perform contracts for the doing of any of said things ; to carry on any business or operation deemed ad- vantageous or profitable to the corporation in connection with or in fur- therance of any of said things ; to acquire, manage and dispose of contracts, properties and rights of all kinds, including the assets, businesses, good- wills and liabilities of persons, firms and corporations and generally to do anything that is permissible to corporations under the Business Corporations Law of the State of New York. (8) For the purposes of its business to enter into, make, perform and carry out contracts of every sort and kind, necessary or incidental to the purposes of this Company, with any person, firm, association, or corporation, whether private, public or municipal, or with any body poli- tic, and with the government of any country, or with any state, terri- tory or colony thereof. (9) To do any or all of the things set forth in this certificate as ob- jects, purposes, powers or otherwise, to the same extent and as fully as natural persons might or could do and in any part of the world as prin- cipals, agents, contractors or otherwise. CHARTER AND BY-LAW FORMS. 21/ (lo) To conduct any business permissible under the Business Cor- porations Law of the State of New York, which may be carried on to ad- vantage in connection with its business or to its profit or advantage. Third.— The amount of capital stock of said Company shall be One Million Dollars ($1,000,000). Fourth. — The number of shares composing said capital stock shall be ten thousand (10,000) shares of the par value of one hundred dollars ($100) each, and the amount of capital with which said Company will begin busi- ness is five hundred dollars ($500). Fifth. — The principal business office of said Company shall be located in the Borough of Manhattan in the County, City and State of New York. Sixth. — The duration of said Company shall be perpetual. Seventh. — The number of Directors of said Company shall be five (S). Bighth. — The names and post-office addresses of the Directors of said Company for the first year are as follows : NAMES. ADDRESSES. Theodore Hamilton 100 Broadway, New York City. Howard McShayne loo Broadway, New York City. John R. McCullough too Broadway, New York City. Henry M. Frenckel Montclair, New Jersey. James McFarrell 356 West End Ave., New York City. Ninth. — The names and post-office addresses of the subscribers to this certificate and the number of shares of stock which each agrees to take in said Company are as follows : NAMES. ADDRESSES. SHARES. Theodore Hamilton 100 Broadway, New York City. 3 Howard McShayne 100 Broadway, New York City. i John R. McCullough 100 Broadway, New York City. i Tenth. — Pursuant to Section 52 of the Stock Corporation Law this Company shall have power to purchase, acquire, hold and dispose of the stocks, bonds and other evidences of indebtedness of any corporation, do- mestic or foreign, and issue in exchange therefor, its bonds, stocks or other obligations. In Witness Whereof, we have made and signed this certificate in duplicate, this fifth day of April, one thousand nine hundred and nine. Theodore Hamilton. Howard McShayne. John R. McCullough. {Acknowledgment as in Form 20.) In the following form, classification of stock is provided for. This charter also includes almost every purpose of a moneyed corporation that will be allowed to an incorporation under the Business Corporations Law. 2l8 NEW YORK CORPORATIONS. Form 22. — Certificate of Incorporation. Preferred Stock. Certificate op Incorporation of the HOLLAND SECURITIES COMPANY. We, the undersigned, all being of full age and two-thirds being citi- zens of the United States and one of us a resident of the State of New York, for the purpose of forming a corporation under the Business Cor- porations Law of the State of New York, do hereby certify and set forth : First. — The name of said corporation shall be "Holland Securities Company." Second. — The purposes for which said corporation is to be formed are as follows : (a) To buy, sell, hold and generally to deal in and with stocks, bonds, debentures, mortgages and securities of all kinds ; to borrow money, make loans, advance money on contracts, make investments and generally act as investment brokers; to issue notes, bonds, securities and debentures which may be secured by mortgage or otherwise upon property real and personal of the Corporation under the provisions of Section 6 of the Stock Corporation Law of the State of New York; to purchase, hold, im- prove, sell, lease or exchange real estate and generally to conduct any finan- cial business permissible under the Business Corporations Law of the State of New York. (b) To act as agents, factors, brokers, commission merchants, con- tractors, lessees and managers of estates or otherwise in entering into, undertaking, performing, negotiating, executing, conducting and transact- ing for persons, firms and corporations upon commission or otherwise any and all the things set forth in this certificate that it can do for itself, and to exercise all of its powers to the same extent that a natural person might do, and in any part of the world to the full extent permitted to corporations organized under the Business Corporations Law of the State of New York. (c) To purchase, acquire, hold and dispose of the stocks, bonds and other evidences of indebtedness of any corporation, domestic or foreign, and issue in exchange therefor its stock, bonds or other obligations, and to exercise while owner of the stock of other corporations all the rights, powers and privileges of ownership, including the right to vote thereon. (d) To guarantee or cause to be guaranteed the pasrment of divi- dends or interest on any bonds, stocks, debentures or other securities of this corporation, and to guarantee or cause to be guaranteed the contracts and obligations of this corporation whenever proper or necessary for its business in the judgment of its Board of Directors. (e) To conduct or transact business in any of the states, territories, colonies or dependencies of the United States and in any and all foreign countries; to have one or more offices therein, and therein to hold, pur- chase, mortgage and convey real and personal property without limit as to the amount, save as imposed by local laws. Third. — The amount of capital stock of said corporation shall be Two Hundred Thousand Dollars ($200,000), and the amount of capital with CHARTER AND BY-LAW FORMS. 219 which said corporation will begin business is Ten Thousand Dollars ($I0,- 000). Fourth. — The number of shares of which said capital stock is to con- sist shall be Two Thousand (2,000) Shares of the par value of One Hun- dred Dollars ($100) each, of which One Thousand (1,000) Shares of the total par value of One Hundred Thousand Dollars ($100,000) shall be com- mon stock and One Thousand (1,000) Shares of the total par value of One Hundred Thousand Dollars ($100,000) shall be preferred stock. Said preferred stock shall be entitled to an annual cumulative divi- dend of six per cent. (6%) payable semi-annually on the loth days of January and July of each year before any dividends are paid on the common stock, and, after said common stock has in any one year received a dividend of six per cent. (6%), to participate equally with said com- mon stock, share and share alike, in all further dividends that may be de- clared during such year until said preferred stock has received a total dividend for that year up to but not exceeding twelve per cent. (12%), and such preferred stock shall be entitled to preference in the event of dissolution or liquidation of the corporation. Fifth.— The principal business office of the corporation shall be located in the Village of Mineola in the County of Nassau and State of New York. Sixth. — The duration of said corporation shall be perpetual. Seventh. — The number of Directors of said corporation shall be five (5). Eighth. — The names and post-office addresses of the Directors of the corporation for the first year are as follows: NAMES. ADDRES.SES. James T. Franklin Port Washington, New York. Charles M. Parsons Plainfield, New Jersey. William G. McGowan Mineola, New York. Harry T. Coombs Mineola, New York. John Harriman 170 Broadway, New York City. Ninth. — The names and post-office addresses of the subscribers to this certificate and a statement of the number of shares of stock which each agrees to take in the same are as follows : NAMES. ADDRESSES. SHARES. William G. McGowan Mineola, New York 3 James T. Franklin Port Washington, New York i John Harriman 170 Broadway, New York City.... I In Witness Whereof, we have made and signed this certificate in duplicate this 15th day of February, 1909. William G. McGowan. James T. Franklin. John Harriman. {Acknowledgment as in Form 20.) In the form that follows the usual power of the directors to conduct the corporate business is much abridged by the provisions of paragraph ten. 220 NEW YORK CORPORATIONS. Fonm 23. — Certificate of Incorporation. Special Provisions. Certificate of Incorporation of the WELLSFORD REALTY CORPORATION. We, the undersigned, all being of full age and two-thirds being citi- zens of the United States and one of us a resident of the State of New York, for the purpose of forming a corporation under the Business Cor- porations Law of the State of New York, do hereby certify and set forth: First. — The name of said corporation shall be "Wellsford Reai,ty Corporation." Second. — The purposes for which said corporation is to be formed are as follows : (a) To take, lease, purchase, hire or otherwise acquire, and to own, use, hold, sell, convey, lease, exchange, mortgage, improve, develop, culti- vate, and otherwise handle, deal in and dispose of real estate, real prop- erty and any interest or right therein. (b) To take, purchase or otherwise acquire, and to own, use, hold, sell, convey, exchange, hire, lease, pledge, mortgage and otherwise deal in and dispose of goods, chattels, stocks, bonds, mortgages, debentures, securi- ties, chattels real and choses in action except bills of exchange, and gen- erally to buy, sell and do a mercantile business. (c) To convert and appropriate any land that may be acquired or controlled by this corporation into and for ways, roads, paths, streets, alleys, lanes, sidewalks, courts, lawns, parks, boulevards, squares, build- ing lots, additions, town sites and pleasure grounds, and to plot, clear, grade, survey, develop, improve, cultivate, manage and administer any lands owned or controlled by this corporation. (d) To erect or have erected, to construct or have constructed, houses, buildings, store rooms, factories, tenements, edifices, works and structures of every description and to rebuild, enlarge, improve, alter, re- pair, raze and remove existing houses, buildings and structures of every kind and description and to buy, sell, own, use, manage and lease the same or similar structures. (e) To issue notes, bonds and debentures secured by mortgage or deed of trust upon the property of said corporation or otherwise and to sell and dispose of the same for the benefit of the corporation or for any lawful purpose. (f) To purchase, lease, exchange or otherwise acquire any and all rights, permits, privileges, franchises and concessions suitable or conve- nient for any of the purposes of its business. (g) To conduct and transact business in any of the states, terri- tories, colonies or dependencies of the United States and in any or all for- eign countries ; to have one or more offices therein, and therein to hold, purchase, mortgage and convey real and personal property without limit as to amount but subject to local laws. (h) To do any or all things set forth in this certificate as objects, purposes, powers or otherwise, to the same extent and as fully as natural persons might do and in any part of the world as principals, agents, con- tractors, lessees or otherwise. CHARTER AND BY-LAW FORMS. 221 Third. — The amount of capital stock of said corporation shall be Fif- teen Thousand Dollars ($15,000). Fourth. — The number of shares composing said capital stock shall be One Hundred and Fifty (150) Shares of the par value of One Hundred Dollars ($100) each and the amount of capital with which said corpora- tion will begin business is Five Hundred Dollars ($500). Fifth. — The principal business office of said corporation shall be lo- cated in the Borough of Manhattan in the County, City and State of New York. Sixth. — The duration of said corporation shall be perpetual. Seventh. — The number of Directors of said corporation shall be seven (7^. Eighth. — The names and post-office addresses of the Directors of said corporation for the first year are as follows : NAMES. ADDRESSES. J Edward Parks 66 W. 84th St., New York City. Harry Edwards Tompkinsville, Staten Island, N. Y. Harvey M. Moore 76 W. ii8th St., New York City. Stanley H. French 46 Montgomery St., Jersey City, N. J. Samuel W. O'Conner Flushing, Long Island, N. Y. Henry Douglas 75 E. 38th St., New York City. James Elliot 170 Broadway, New York City. Ninth. — The names and post-office addresses of the subscribers to this certificate and the number of shares of stock which each agrees to take in said corporation are as follows : NAMES. ADDRESSES. SHARES. J. Edward Parks 66 W. 84th St., New York City.... 3 Harry Edwards .Tompkinsville, Staten Island, N. Y. 3 Harvey M. Moore 76 W. ii8th St., New York City. ... 3 Tenth. — No real estate shall be bought or sold by this corporation unless with the consent of a majority of the stockholders present at any regular meeting of stockholders or at some special meeting of stock- holders duly called for that purpose. Eleventh. — The by-laws of this corporation may be amended only by the majority vote of the entire number of stockholders entitled to vote, cast at any regular meeting of the stockholders or at some special meet- ing of the stockholders duly called for the purpose. Twelfth.— Fmsuant to Section 52 of the Stock Corporation Law, this Corporation shall have power to purchase, acquire, hold and dispose of the stocks, bonds and other evidences of indebtedness of any corporation, do- mestic or foreign, and to issue in exchange therefor its stocks, bonds and other obligations. In Witness Whereof, we have made and signed this certificate in duplicate, this 27th day of February, 1909. J. Edward Parks. Harry Edwards. Harvey M. Moore. (^Acknowledgment a.r in Form 20.) (For fees see Part III, Tables 1-4.) 222 NEW YORK CORPORATIONS. (b) By-Law Forms. Form 24. — By-Laws. Short Set. By-Laws of the NEW YORK BISCUIT COMPANY. Article I. — Stock. 1. CertHicates of Stock shall be issued in order by number from the stock certificate book, and each certificate shall be signed by the President and Secretary and be sealed with the corporate seal, and a record thereof be kept on the stub of each certificate issued. 2. Transfers of Stock shall be made only upon the books of the Com- pany, and before a new certificate is issued, the old certificate properly en- dorsed shall be surrendered and cancelled. Articlb II. — Stockholders. 1. The Annual Meeting of the stockholders of the Company shall be held in the principal office of the Company in New York City at 3 P. M. on the second Tuesday in January of each year ; but if said day shall be a legal holiday, then on the next business day following. 2. Special Meetings of the stockholders may be called at the ofBce of the Company at any time by resolution of the Board of Directors, or upon written request of stockholders representing one-third of the out- standing stock. 3. Notice of Meetings shall be written or printed and be mailed to the last known post-office address of each stockholder not less than ten days before any meeting of stockholders is held, and if for a special meet- ing, such notice shall state the object or objects thereof. (See § loi.) 4. A Quorum at any stockholders' meeting shall consist of a major- ity of the voting stock of the Company represented in person or by proxy. (See § 102.) 5. Voting at elections of Directors shall be by ballot, and shall also be by ballot on any other matter when so requested by not less than one- fourth in interest of the stockholders present at the meeting. Each stock- holder shall be entitled to one vote for each share of stock held by him, and such vote may be cast in person or by proxy. 6. The Order of Business at the annual meeting and as far as possi- ble at all other meetings of the stockholders, shall be: 1. Reading and Disposal of Any Unapproved Minutes. 2. Annual Reports of Officers and Committees. 3. Election of Directors. 4. Unfinished Business. 5. New Business. 6. Adjournment. Article HI. — Directors. I. The Business and Property of the Company shall be managed by a Board of Five (s) Directors, who shall be stockholders and shall be CHARTER AND BY-LAW FORMS. 223 elected annually by the stockholders for the term of one year, and shall serve until the election of their successors. Vacancies may be filled by the Board for the unexpired term. Directors shall receive no compensation for their services as directors. 2. Regular Meetings of the Board shall be held in the principal office of the Company at 3 o'clock P. M. on the second Tuesday in each month ; but if such day is a legal holiday, then on the next business day following. 3. Special Meetings of the Board of Directors may be called at any time by the President or by any three members of the Board, or they may be held at any time and place without notice by unanimous consent of all the members. 4. Notices of Meetings of the Board shall be mailed to each member of the Board not less than five days before any such meeting, and notices of special meetings shall state the purposes thereof. 5. A Quorum at any meeting shall consist of a majority of the entire membership of the Board, and a majority of such quorum shall decide any question coming before the meeting. 6. Officers of the Company shall be elected at the first Board meeting after the election of Directors each year. If any office becomes vacant during the year, the Directors shall fill the same for the unexpired term. The Directors shall fix the compensation of the officers and agents of the Company. 7. The Order of Business at any regular meeting or special meeting of the Board of Directors shall be : 1. Reading and Disposal of Any Unapproved Minutes. 2. Reports of Officers and Committees. 3. Unfinished Business. 4. New Business. 5. Adjournment. Article IV. — Officers. 1. The Officers of the Company shall be a President, who shall be elected from among the directors, a Vice-President, a Secretary and a Treasurer, all of whom shall be elected for one year and hold office until their successors are elected and qualify. The positions of Secretary and Treasurer may be united in one person. 2. The President shall preside at all meetings ; shall have general supervision of the affairs of the Company; shall sign or countersign all certificates, contracts and other instruments of the Company as authorized by the Directors; shall make reports to the Directors and stockholders, and perform all such other duties as are incident to his office or are prop- erly required of him by the Board of Directors. In the absence or disability of the President, the Vice-President shall exercise all his functions. 3. The Secretary shall issue notices for all meetings ; shall keep their minutes ; shall have charge of the seal and the corporate iDOoks ; shall sign with the President all instruments requiring such signature, and shall make such reports and perform such other duties as are incident to his office or required of him by the Board of Directors. 4. The Treasurer shall have the custody of all moneys and securities of the Company and shall keep regular books of account. He shall sign or countersign such instruments as require his signature, and shall perform such other duties as are incident to his office or that may be required of hira by the Board of Directors. 224 NEW YORK CORPORATIONS. Article V. — Dividends and Finance. 1. Dividends shall be declared only from surplus profits, at such times and in such amounts as the Board shall decide. No dividend shall be de- clared at any time that will impair the capital of the Company. 2. The Moneys of the Company shall be deposited in the name of the Company in such trust company, bank or banks as the Board of Directors shall designate, and be drawn out only by check signed by the Treasurer and countersigned by the President. Article VI.— Seal. I. The Seal of the Company shall consist of two concentric circles, between which is the name of the Company and in the center of which is inscribed "Incorporated igop. New York," and such seal as impressed on the margin hereof is hereby adopted as the corporate seal of the Company. Article VII. — Amendments. 1. These By-Laws may be amended, repealed or altered, in whole or in part, by a majority vote of the entire outstanding stock of the Company, at any regular meeting, or any special meeting where such action has been announced in the call and notice for such meeting. 2. The Board of Directors shall not alter or repeal any by-laws adopted by the stockholders of the Company, but may adopt additional by- laws in harmony therewith. (See Chap. IV.) The foregoing by-laws meet the requirements of the New York statutes. They may be readily adapted to the needs of any ordinary business corporation of moderate size. In use they have proved to be an excellent working set. For larger corporations the following by-laws will be found available : Form 25. — By-Laws. Extended Form. By-Laws of the LEIGHTON COAL COMPANY. Article I. — Stock. Sec. I. Certificates of Stock. Each stockholder of the Company whose stock has been paid for in full shall be entitled to a certificate or certificates showing the amount of stock of the Company standing on the books in his name. Certificates shall be in form approved by the Board of Directors, be numbered consecutively, bear the signatures of the President and Treasurer and the seal of the CHARTER AND BY-LAW FORMS. 225 Company, and be issued in numerical order from the stock certificate book. A full record of each certificate of stock, as issued, shall be entered on the corresponding stub of the stock certificate book. Sec. 2. Transfers of Stock. Transfers of stock shall be made upon the proper stock books of the Company on surrender of the duly endorsed certificate or certificates rep- resenting the transferred stock. Surrendered certificates shall be cancelled and attached to the corresponding stubs in the stock certificate book and new certificates issued to the parties entitled thereto. The stock books shall be closed to transfers twenty days before general elections and twenty days before dividend days. Sec. 3. Lost Certificates. The Board of Directors may order a new certificate, or certificates, of stock to be issued in the place of any certificate or certificates of the Com- pany alleged to have been lost or destroyed, but in every such case the owner of the lost certificate or certificates shall first cause to be given to the Company a bond in such sum, not less than the par value of such lost or destroyed certificate or certificates of stock, as said Board may direct, as indemnity against any loss or claim that the Company may incur by reason of such issuance of stock certificates. The Board of Directors may, in its discretion, refuse to replace any lost certificate, save upon the order of some court having jurisdiction in such matter. Sec. 4. Stock and Transfer Books. The stock and transfer books of the Company shall be kept at its office. No. 52 Broadway, in the City of New York, and shall be open dur- ing business hours to the inspection of any stockholder or judgment cred- itor of the Company. Sec. S- Treasury Stock. All issued and outstanding stock of the Company acquired by the Company shall he held subject to disposal by the Board of Directors. Such stock shall neither vote nor participate in dividends while held by the Company. Article II. — Stockholders. Sec. I. Annual Meetings. The regular annual meetings of the stockholders shall be held in the office of the Company, at No. 52 Broadway, New York City, at 12 M. on the second Monday of January in each year, if not a legal holiday, but if a legal holiday then on the business day next following. At this meeting the directors for the ensuing year shall be elected, the officers of the Com- pany shall present their annual reports, and any other business brought before the meeting may be transacted. The Secretary shall have on file for inspection and reference an alphabetical list of the stockholders, giving the amount of stock held by each as shown by the stock books of the Com- pany twenty days before the date of such annual meeting. Sec. 2. Special Meetings. Special meetings of the stockholders shall be held in the office of the Company, and shall be called by the President whenever so directed by resolution of the Board of Directors, or when written request is made therefor by stockholders holding a majority of the voting stock of the Company. Calls for special meetings shall specify the time, place and ob- 226 NEW YORK CORPORATIONS. ject or objects thereof, and no other business than that specified in the call shall be considered at any such meeting. Sec. 3. Notice of Meetings. A written or printed notice of every regular or special meeting of the stockholders, stating the time and place, and in case of special meetings, the objects thereof, shall be prepared and mailed by the Secretary, postage prepaid, to the post-office address of each stockholder, as shown by the stock books of the Company, at least ten days before the date of any such meeting. No notice need be given of adjourned meetings. Any failure or irregularity of notice of a regular meeting shall not affect the validity of such meeting or of any proceedings thereat. If an election of directors is to be held at any such meeting, the Sec- retary shall, in addition to the prescribed notice by mail, give notice of such meeting and election by publication thereof at least once a week for two successive weeks immediately preceding such election, in a newspaper pub- lished in the county where such election is to be held. (See § loi.) Sec. 4. Voting. Every stockholder shall be entitled to one vote at all meetings of stock- holders for each share of stock standing in his name on the books of the company. Voting must be by ballot when so requested by any stockholder present. Sec. S- Election of Directors. At each annual meeting of the stockholders of the Company seven directors shall be elected, who shall serve until the election and acceptance of their duly qualified successors. All such elections shall be by ballot, and the candidates, to the number to be elected, receiving the highest number of votes shall be declared elected. If for any reason directors are not elected at the regular meeting of stockholders, a special meeting shall be called for the purpose within thirty days thereafter, at which directors shall be elected in all respects as at the annual meeting. At each election, after the first, two inspectors shall be appointed by the President to conduct the election of directors to serve for the ensuing year. These inspectors shall be sworn to the faithful discharge of their duty, and shall then lake charge of the election. No person who is a candi- date for the office of director shall act as an inspector of election. In all elections for directors, each stockholder of record shall be en- titled to cast, for each share of stock held by him, as many votes as there are directors to be elected, and he may cast the whole number of such votes for one candidate, or distribute them among two or more candidates, as he may prefer. Sec. 6. Quorum. A majority of the outstanding stock, exclusive of treasury stock, shall be necessary to constitute a quorum at meetings of stockholders. (See § 102.) When a quorum is present at any meeting, a majority of the stock represented thereat shall decide any question brought before such meeting. In the absence of a quorum, those present may adjourn the meeting from time to time, but until a quorum is secured may transact no business. Sec. 7. Proxies. Any stockholder entitled to vote may be represented at any regular or special meeting of stockholders by a duly executed proxy. Proxies shall CHARTER AND BY-LAW FORMS. 227 be in writing and properly signed, but shall require no other attestation. No proxy shall be recognized unless executed within eleven months of the date of the meeting at which it is presented. Sec. 8. Officers of Meetings. The President, if present, or otherwise the Vice-President, shall pre- side at all meetings of the stockholders. In the absence of both these offi- cials, a Chairman of the meeting shall be appointed by the stockholders piesent. The Secretary of the Company shall keep a faithful record of the pro- ceedings of all stockholders' meetings. In his absence a Secretary pro tem. shall be appointed by the presiding officer. Sec. 9. Order of Business. The order of business at the annual meeting, and, so far as practicable, at all other meetings of the stockholders shall be as follows : I. Notation of those Present. Proof of due notice of Meeting. Reading and disposal of any unapproved Minutes. Annual Reports of Officers and Committees. Election of Directors. Unfinished Business. New Business. Adjournment. Article HI. — Directors. Sec. I. Number and Authority. The Board of Directors shall consist of seven members and shall have entire charge of the property, interests, business and transactions of the Company, with full power and authority to manage and conduct the same. Sec. 2. Qualifications. No person shall be elected, nor shall be competent to act as a director of this Company, unless he is at the time of election, and continuously dur- ing his term of office, the holder of record of not less than one share of its stock. At least one of the directors of the Company shall be resident in the State of New York. Sec. 3. Vacancies. Any vacancy occurring in the Board of Directors may be filled for the unexpired term by a majority vote of the remaining members, whether or no such remaining members constitute a quorum. Sec 4. Regular Meetings. The regular meetings of the Board of Directors shall be held in the office of the Company, in the City of New York, at 3 P. M. on the second Monday of each month, if not a legal holiday, but if a legal holiday, then on the business day next following. Sec. 5. Special Meetings. Special meetings of the Board of Directors may be held at any time in the office of the Company, in the City of New York, on the written call of the President or of any three members of the Board. Special meeting.s may be held at any time and place within the State, and without notice, by unanimous consent of the Board. 228 NEW YORK CORPORATIONS. Sec 6. Notice of Meetings. The Secretary shall notify each member of the Board of all regular or special meetings, by mailing to each member's last known post-office ad- dress, postage prepaid, at least five days before any such meeting, a written or printed notice thereof, giving the time, place, and, in case of special meetings, the objects thereof; and no other business shall be considered at any such special meeting than shall have been so notified to the members. Any failure or irregularity in notice of a regular meeting shall not affect the validity of such meeting, or of the proceedings thereat. Sec. 7. Quorum. A majority of the Board of Directors shall constitute a quorum, and a majority vote of the members in attendance at any Board meeting shall, in the presence of a quorum, decide its action. A minority of the Board present at any regular, special or adjourned meeting may, in the absence of a quorum, adjourn to a later date, but may not transact any business until a quorum has been secured. Sec. 8. Election of Officers. At the first meeting of the Board of Directors after the election of directors each year, a President, Vice-President, Secretary, Treasurer and Counsel, shall be elected to serve for the ensuing year and until the elec- tion of their respective successors. Election shall be by ballot, and a ma- jority of the votes cast shall be necessary to elect. If not detrimental to the business or operations of the Company, any two offices may be con- ferred upon one person. The directors shall fix the compensation of offi- cers, subject to the limitations of the Charter and the By-Laws. Any vacancies that occur may be filled by the Board for the unexpired term. The Board shall have the right to remove any officer by a two-thirds vote of the entire membership of the Board. Sec. 9. Compensation of Directors. Each director shall receive the sum of five dollars as compensation for his attendance at any regular or special meeting of the Board of Directors, and shall receive no other salary or compensation for his services as a di- rector of the Company. Sec. 10. Power to Pass By-Laws. The Board of Directors shall have no power to amend, alter or repeal the by-laws, but may pass such additional by-laws in conformity therewith as may be necessary or convenient to facilitate the business of the Com- pany. Sec. II. Executive Committee. The President, Vice-President and Treasurer shall together constitute an Executive Committee which shall be a part of the permanent executive organization of the Company, and shall, in the interim between meetings of the Board of Directors, exercise all the powers of that body in accord- ance with the general policy of the Company and the directions of the Board. (Treasurer cannot serve on executive committee unless a direc- tor.) Meetings of the Executive Committee shall be held on call of the President, or of any two members of the Committee. All of the members of the Committee must be duly notified of meetings, and a majority of the members shall constitute a quorum. The Executive Committee shall keep due record of all meetings and actions of the Committee, and such records shall at all times be open to the inspection of any director. CHARTER AND BY-LAW FORMS. 229 The members of the Executive Committee shall receive such compen- sation for their services as may be fixed by the Board of Directors. Sec. 12. Corporation OMces. The principal office of the Company, within the State of New York, shall be at 52 Broadway, New York City, and such other offices for the transaction of its business shall be maintained at such other places, in or outside of said State, as may be determined upon by the Board of Di- rectors. Sec. 13. Order of Business. The regular order of business at meetings of the Board of Directors shall be as follows : 1. Reading and disposal of any unapproved Minutes. 2. Reports of Officers and Committees. 3. Unfinished Business. 4. New Business. 5. Adjournment. Article IV. — Officers. Sec. I.. Bnumeration, Election and Qualifications. The officers of the Company shall be a President, Vice-President, Treasurer, Secretary and Counsel. These officers shall be elected by the Board of Directors at the first regular meeting after the election of direc- tors each year, and shall hold office for the term of one year, and until their respective successors are duly elected and qualify. The President and Vice-President and Treasurer shall be elected from among the Board of Directors. Sec. 2. The President. The President, when present, shall preside at all meetings of the stock- holders and of the Board of Directors ; shall sign all certificates of stock ; shall sign or countersign, as may be necessary, all such bills, notes, checks, contracts and other instruments as may pertain to the ordinary course of the Company's business ; and sign, when duly authorized thereto, all con- tracts, orders, deeds, liens, licenses and other instruments' of a special nature. He may also, in the absence or disability of the Treasurer, endorse checks, drafts and other negotiable instruments for deposit or collection, and shall, with the Secretary, sign the minutes of all meetings over which he may have presided. At the first regular meeting of the Board in January he shall submit a complete report of the operations of the Company for the preceding year, together with a statement of the Company afifairs as existing at the close of such year, and shall submit a similar report at the annual meeting of stockholders ; also, he shall report to the Board of Directors, from time to time, all such matters coming within his notice and relating to the inter- ests of the Company, as should be brought to the attention of the Board. He shall be, ex-officio, a member of all standing committees, shall have such usual powers of supervision and management as may pertain to the office of President, and perform such other duties as may be properly required of him by the Board of Directors. Sec. 3. The Vice-President. The Vice-President, in the absence, disability or refusal to act of the President, shall possess all of the powers and perform all of the duties of that officer. 230 NEW YORK CORPORATIONS. Sec, 4. The Secretary. The Secretary shall keep full minutes of all meetings of the stockhold- ers and of the Board of Directors; shall read such minutes at the proper subsequent meetings; shall issue all calls for meetings and notify all offi- cers and directors of their election; shall have charge of, and keep, the seal of the corporation, and affix the same to certificates of stock when such certificates are signed by the President and Treasurer, and shall affix the seal, attested by his signature, to such other instruments as may re- quire the same. He shall keep the stock certificate book and the other usual corporation books, and shall prepare, record, transfer, issue, seal and cancel certificates of stock as required by the transactions of the Company and its stock- holders. He shall also sign, with the President, all contracts, deeds, licenses and other instruments when so ordered. He shall make such reports to the Board of Directors as they may. re- quest, and shall also prepare such reports and statements as are required by the State laws. He shall make out, twenty days before any election of directors, a complete list of the stockholders entitled to vote at such elec- tion, arranged in alphabetical order, and giving the number of shares of stock that may be voted by each, and shall keep the same open to inspec- tion at the office of the Company until the time of, and during the said election. He shall allow any stockholder, on application in business hours, to inspect the stock certificate book, the stock transfer book and the stock ledger. He shall attend to such correspondence, and to such other duties, as may be incidental to his office, or properly be assigned him by the Board. Sec 5. The Treasurer. The Treasurer shall have the custody of, and be responsible for all moneys and securities of the Company ; shall keep full and accurate records and accounts in books belonging to the Company, showing the transactions of the Company, its accounts, liabilities and financial condition, and shall see that all expenditures are duly authorized and are evidenced by proper receipts and vouchers. He shall deposit in the name of the Company, in such depositary or depositaries as are designated by the Directors, all moneys that may come into his hands for the Company account. His books and accounts shall be open at all times during business hours to the inspec- tion of any director of the Company. The Treasurer shall also endorse for collection or deposit all bills, notes, checks and other negotiable instruments of the Company; shall pay out money as may be necessary in the transactions of the Company, either by special or general direction of the Board of Directors, and on checks signed by the President and himself, and shall generally, together with the Presi- dent, have supervision of the finances of the Company. He shall also make a full report of the financial condition of the Com- pany for the annual meeting of the stockholders, and shall make such other reports and statements as may be required of him by the Board of Directors or by the laws of the State. He shall give bond in such sum and with such sureties as may be required by the Board of Directors for the faithful performance of his duties and for the restoration to the Company in event of his death, resigna- tion or removal from office, of all books, papers, vouchers, money and other property belonging to the Company that may have come into his custody. Sec. 6. Counsel. Counsel of the Company shall prepare all such contracts and agree- ments required in the business of the Company as may be referred to him CHARTER AND BY-LAW FORMS. 23 1 by its ofScers; and shall inspect and pass upon all such instruments pre- sented to the Company as may be of sufficient importance to justify such examination; also he shall advise with the officers of the Company in all such legal matters pertaining to the afifairs of the Company as may require his consideration. Sec. 7. The General Manager. A General Manager shall be appointed by the Board of Directors and, under the supervision of the President, shall have charge of and manage the active business operations of the Company. He shall perform such further duties and make such reports as may be required of him by the Board of Directors. Article V. — Dividends and Finances. Sec. I. Dividends. Dividends shall be declared at such times as the Board may direct, but no dividend shall be declared or -paid, save from surplus profits re- maining after all current liabilities of the Company have been fully paid; nor shall any dividend be declared that would impair the capital of the Company. Sec. 2. Reserve Fund. No dividend to exceed six per cent, per annum shall be declared by the Board of Directors until there shall be on hand in excess of the amount required to pay any such dividends, surplus profits of not less than ten thousand dollars. Sec. 3- Debt. No debts shall be contracted, nor liability incurred, nor contract made by or on behalf of this Company in excess of one thousand dollars, unless the same be authorized or directed by the By-Laws or by a duly recorded two-thirds vote of the entire Board of Directors at a regular meeting, or at a special meeting called for the purpose. Sec. 4. Bank Deposits. The Treasurer shall deposit the moneys of the Company as the same may come into his hands, in such depositary or depositaries as may be designated by the Board of Directors, and such deposits shall be made in the name of the Company, and moneys shall be withdrawn therefrom only by check signed by the Treasurer and countersigned by the President. Article VI. — Sundry Provisions. Sec. I. Corporate Seal. The corporate seal of the Company shall consist of two concentric circles, between which shall be the name of the Company, and in the center shall be inscribed "Incorporated 1906, New York," and such seal, as impressed on the margin hereof, shall be the corporate seal of the Company. Sec 2. Penalties. Any officer, director or stockholder who shall disobey or violate any of the provisions of these by-laws may be fined in an amount not to exceed twenty dollars, such fine to be imposed by the Board of Directors, and, if not paid at the time, to be deducted from any salary or dividend then due or that may thereafter become due said person. 232 NEW YORK CORPORATIONS. Sfic. 3. Amendment. These by-laws may be amended, repealed or altered, in whole or in part, at any regular meeting of the stockholders, or at any special meeting where such action has been duly announced in the call, provided that a majority of the entire voting stock of the Company shall vote for such amendment, repeal or alteration. The Board of Directors shall have no power to amend, alter or repeal the by-laws, but may pass such additional by-laws in conformity therewith as may be necessary or convenient to facilitate the business of the Com- pany. Under the New Yofk statutes the inspectors for the first election of directors must be appointed by the board of direc- tors designated in the charter. (S. C. L., § 31.) Form 25a. Certification of By-Laws. We, the undersigned, being the duly elected President and Secretary of the Leighton Coal Company, a corporation organized under the Laws of the State of New York, ^.o^ hereby certify that the foregoing By-Laws are the By-Laws of the said Corporation duly adopted by the stockholders of said Corporation at their first meeting, held on the second day of March, 1909, in the Office of the said Corporation, No. 52 Broadway, New York, as shown by the Minutes of said meeting. In Testimony Whereof, we have hereunto affixed our official signatures and the corporate seal of said corporation, this eighteenth day of March, 1909. Thomas Hardy, President. Winston Harrison, Secretary. f CORPORATE \ I SEAL. J CHAPTER XXII. FORMS FOR FIRST MEETINGS. (See Chap. V, "First Meetings.") Form 26. — Proxy. Proxy. FIRST STOCKHOLDERS' MEETING. Know All Men By These Presents, That I, the undersigned, one of the incorporators and a subscriber to the stock of the Automatic Appli- ance Company, do hereby constitute and appoint Prank McPherson my true and lawful attorney, with fi:ll powers of substitution and revocation, to represent me at the first meeting of the stockholders of said corpor- ation to be held on the twelfth day of January, igog, and at any meeting postponed or adjourned therefrom, hereby granting my said attorney full power and authority to act for me at said meeting, and, in my name, place and stead, to vote thereat upon the stock of said corporation subscribed for by me, or upon which I may then be entitled to vote, in the transaction of any and all business pertaining to the affairs of the Company that may be brought before said meeting, all as fully as I might or could do if per- sonally present, and I hereby ratify and confirm all that my said attorney, or his substitute, shall lawfully do at such meeting in my name, place and stead. In Witness Whereof, I have hereunto affixed my signature this ninth day of January, ipop. John M. Silliman. [l. s.] In presence of Walter T. Henderson. (For general form of proxy, see Forms 36-38.) Proxies must be in writing, be signed by the stockholder or his authorized attorney, and should be witnessed by at least one person, but do not ordinarily require acknowledg- ment. The proxy given is formal and complete. It is valid for the first meeting and any meetings adj'ourned therefrom, but then expires without revocation. (See § 104.) 233 234 NEW YORK CORPORATIONS. Form 27. — Call and Waiver. Stockholders'. Call and Waivbr of Notice. FIRST MEETING OF STOCKHOLDERS of the AUTOMATIC APPLIANCE COMPANY. We, the undersigned, being all of the incorporators of the Automatic Appliance Company and all the subscribers to its capital stock entitled to notice of said meeting, do hereby call the first meeting of the stockholders of said corporation to be held in the office of Wilton & Clough, 170 Broad- way, New York, at 10 A. M., on the twelfth day of January, 1909, for the purpose of receiving charter, adopting by-laws, considering and acting upon a proposal for the issue of the capital stock of the corporation in exchange for property, and the transaction of all such other business as may be neces- sary or convenient in connection with the organization of said corporation, and we do hereby waive all requirements as to notice or publication of the time, place and purposes of this first meeting and do consent to the transac- tion thereat of any and all business pertaining to the affairs of the Company. Dated, New York City, Francis Johnson. January 12, 1909. Willis T. Harriman. John M. Silliman. Frank W. Jones. Harrison Freeman. In New York, since the first board of directors is desig- nated by the charter and this board has power to adopt by- laws, the first meeting of stockholders loses much of the im- portance it has in other states, and is sometimes omitted en- tirely. It is, however, usually held and this initial meeting of the stockholders is most conveniently assembled by means of a call and waiver of notice similar to the foregoing. This, if signed by all the partieis concerned, is all-sufficient, and saves the time and trouble involved in personal notification or notice by publication. If, however, any person or persons entitled to be present at such a meeting, should not sign, such omission might invalidate the proceedings of the whole meet- ing. (See §§ 41, loia.) FORMS FOR FIRST MEETINGS. 235 Form 28. — Call and Waiver. Directors'. Call and Waiver of Notice. FIRST MEETING OF DIRECTORS of the AUTOMATIC APPLIANCE COMPANY. We, the undersigned, being all of the Directors of the Automatic Ap- pliance Company, do hereby call the first meeting of the Board of Direc- tors thereof, to be held in the office of Wilton & Clough, 170 Broadway, New York City, at 11 A. M., on the twelfth day of January, 1909, for the purpose of electing officers, acting upon a proposal to exchange property for the capital stock of the Company and for the transaction of all such other business as may be necessary or convenient in connection with the organization of said corporation and the promotion of its business, and we do hereby waive all statutory and by-law requirements as to notice of the time, place and purposes of said meeting and do consent to the transaction thereat of any and all business pertaining to the affairs of the Company. Dated, New York City, Harrison Frebman. January 12, 1909. Frank W. Jones. William Jasper. Henry M. Frenckel. Francis Johnson. As in the case of the first stockholders' meeting, the first meeting of directors is most conveniently assembled by means of the call and waiver. This must be signed by every member of the board, and, as in the call for any other special meeting, should specify the business to be transacted. (See ?• 125b.) Form 29. — Exchange of Property for Stock. Proposal. To the Automatic Appliance Company, New York City. Gentlemen : — I hereby offer your Company in exchange and full pay- ment for its entire capital stock of the par value of Thirty Thousand Dol- lars ($30,000), the stock subscribed for by the incorporators being included with their consent, the business now conducted under the firm name of Henry W. McCabe & Co., at Nos. 167-9 Centre St., New York City, for the manufacture of gas and electric fixtures, including therewith the plant. 236 NEW YORK CORPORATIONS. lease of the premises and the firm property now therein, consisting of the stock on hand and in process of manufacture, raw material, tools, machin- ery, supplies and apparatus of every description, together with the cash on hand and in bank now amounting to $i,iS0-3S. all bills and accounts re- ceivable and the right to own and use the present firm name and all trade marks, formulse, secret processes, patents and good-will of the present business ; your Company to take over the business as a going concern and to assume all outstanding contracts and all bills and obligations of every kind, the amount of such bills and obligations being guaranteed not to ex- ceed $1,200. If this proposition is accepted, the stock subscribed for by the incor- porators is to be issued to them, or their order, and the remainder of the stock to my order, all to be full-paid and non-assessable, and to be de- livered in exchange for such instruments of assignment and conveyance as may be necessary to vest the full title to the aforementioned business and property in your Company. Dated, New York, Yours very truly, January 12, 1909. Hsnry W. McCabe. This proposal offers a simple and convenient method of bringing the matter of issuing stock for property before the meetings of the stockholders and directors. In view of recent decisions and dicta, it is not advisable to incorporate in the proposition any agreement for donation of stock to the treas- ury of the Company.* If deemed desirable, a formal assignment of the incor- porators' subscriptions may be employed as in the form which follows. Form 30. — Assignment of Incorporators' Subscriptions. Assignment. We, the undersigned, being all the incorporators of the Automatic Ap- pliance Company, in consideration of the sum of One Dollar to each of us in hand paid, the receipt whereof is hereby acknowledged, and for other good and valuable considerations, do hereby sell, assign and make over unto Henry W. McCabe the stock of the Automatic Appliance Company respectively subscribed for by us, and do hereby authorize and instruct the ofKcers of said Company to issue said stock to the order of said Henry W. McCabe upon completion of the terms of our subscriptions. * See V. Heppenheimer, 69 N. J. Hq. 36 (iqos) ; Knickerbocker, etc., Co. ▼. Assessors, 74 N. J. h. 583 (1907)- FORMS FOR FIRST MEETINGS. 237 This assignment is conditioned upon the acceptance by said Automatic Appliance Company of said McCabe's proposition of this date to exchange property for the entire capital stock of said Company, and, after such ac- ceptance is not to be effective, until, in pursuance thereof, the said McCabe has made due and formal tender of payment for said capital stock accord- ing to the terms of his said proposition. Witness our hands and seals this loth day of January, 1909. Francis Johnson. (l. s.) Willis T. Harriman. (l. s.) John M. Silliman. (l. s.) Frank W. Jones. (l. s.) Harrison Freeman. (l. s.) This assignment when employed is usually either written on the same sheet as the proposition for exchange of prop- erty for stock or otherwise is attached thereto. Under its conditions the incorporators cannot lose their qualifying stock until after the first meetings. The minutes of the respective meetings of the stockholders and directors should give complete and accurate records of the proceedings in connection with the exchange of stock for prop- erty. The forms of resolutions which follow are appropriate if the proposal is to be accepted. Form 31. — Exchange of Property for Stock. Stockholders' Resolution. Whereas, a proposition has been received from Mr. Henry W. Mc- Cabe, offering to sell, assign and convey to this Company the plant, lease, property and business of Henry W. McCabe & Co., as a going concern, in exchange for the entire capital stock of this Company; and Whereas, It appears to the stockholders of this Company that the said property and business are desirable for the purposes of the Company and are reasonably worth the purchase price thereof. Now, Therefore, Be It Resolved, That the said proposition for the exchange of said property and business for the entire capital stock of this Company, as set forth in said proposition, be and hereby is approved, and the Board of Directors of this Company are hereby authorized, empowered and instructed to accept the said proposition and to cause the entire capital stock of the Company to be issued for the said property and business, in accordance with its terms. (See § 46.) 238 NEW YORK CORPORATIONS. Form 32. — Exchange of Property for Stock. Directors' Resolution. Whereas^ The property offered in exchange for the Capital Stock of this Company by Mr. Henry W. McCabe in his proposition to the Com- pany is adjudged by this Board to be of the reasonable value of Thirty Thousand Dollars ($30,000), and to be necessary for the use and lawful purposes of the Company. Resolved, That the said property and business be and hereby are, in accordance with the authorization and instructions of the stockholders of this Company, accepted in full payment for the said capital stock of the Company, in accordance with the terms of said proposition ; and the proper officers of this Company are hereby authorized and directed to receive the duly executed transfers and assignments of the property and business specified in said proposition and to issue in exchange therefor the entire stock of the Company, all full-paid and non-assessable, to such person or persons as may be designated by the written orders of the aforementioned Henry W. McCabe, except as to the shares subscribed for by the incor- porators, which shall be issued to them or their order. It is to be noted that the decisive action is taken by the directors in the foregoing resolution, and that the stock- holders' resolution merely approves the transaction and authorizes the directors to take action. This authorization, though usual and advisable as a precautionary measure, is not essential, the directors having full power to act without the stockholders' concurrence. (See § 50.) Form 33. — Minutes. Stockholders'. Minutes oe First Meeting of Stockholders of the AUTOMATIC APPLIANCE COMPANY. Held January 12, 1909. Pursuant to written call and waiver of notice, the first meeting of stockholders of the Automatic Appliance Company was held in the office of Wilton & Clough, 170 Broadway, New York City, at 10 A. M., on the twelfth day of January, 1909, with all the stockholders present, either in person or by proxy. Mr. Harrison Freeman was chosen Chairman and called the meeting to order. Mr. Frank W. Jones was appointed Secretary of the meeting. FORMS FOR FIRST MEETINGS. 239 The following stockholders were present in person: SHAEfiS NAME. SUBSCRIBED. Harrison Freeman i Frank W. Jones i Willis T. Harriman '.'..'.'.'.'.'.'.'.'.'.'.'.'.'.'.'.'.'..'. i The following stockholders were present by proxies duly presented and filed with the Secretary: SHARES NAME. NAME OF PROXY. SUBSCRIBED. John M. Silliman Frank McPherson i Francis Johnson Samuel Weldon i ^ The Secretary presented the call and waiver of notice, pursuant to which the meeting was held, duly signed by all the incorporators of the Company. Said call and waiver was ordered spread upon the Minute Book immediately following the minutes of the meeting. The Chairman then presented a copy of the Certificate of Incorpora- tion of the Company and stated that said certificate had been filed with the Secretary of State and recorded by him on the sixth day of January, 1909, and that a duplicate copy had been filed for record with the County Clerk on the eighth day of January, 1909. Upon motion, duly made and carried, said Certificate of Incorporation was ordered received, the Directors named therein were recognized as the Directors of the Company, and the Secretary was instructed to spread the said Certificate in full upon the first pages of the Book of Minutes. The Chairman also presented a form of by-laws, prepared by the Counsel of the Company, which was read and adopted, article by article, and, as a whole, unanimously adopted as the by-laws of the Company, and ordered entered in the Minute Book immediately succeeding the Certificate of Incorporation. The Secretary then presented a written proposal from Mr, Henry W. McCabe, of Nos. 167-9 Centre St., New York City, offering to transfer and assign to the Company certain property and business, as set forth in said proposal in exchange for the entire capital stock of the Company. After due consideration said proposal was ordered received and the following resolution in regard thereto was moved, seconded and passed by unanimous vote; (See Stockholders' Resolution, Form 31.} There being no further business before the meeting, it was adjourned. Frank W. Jones, Harrison Freeman, Secretary. Chairman. Pursuant to the instructions of the foregoing minutes, the following instruments are entered herein preceding the minutes of the present meet- ing: (i) Certificate of Incorporation of the Automatic Appliance Company. (2) By-laws of the Automatic Appliance Company. And the instrument given below follows the minutes of the present meeting : Call and Waiver of Notice of Stockholders' First Meeting. 240 NEW YORK CORPORATIONS. The various instruments received during the course of a meeting are frequently embodied in the minutes instead of preceding or following them. There is no objection to this arrangement save that it interferes with the continuity of the text. The proposition for exchange of property for stock might have been entered in full on the stockholders' minutes but is better reserved for inclusion in the minutes of the directors' meeting where the final and conclusive action is taken. If en- tered on the minutes of the stockholders' meeting, it should appear again on the minutes of the directors. Form 34. — Minutes. Directors'. Minutes of the First Meeting of Directors of the AUTOMATIC APPLIANCE COMPANY. Held January 12, 1909. Pursuant to written call and waiver of notice, the Board of Directors of the Automatic Appliance Company held its first meeting in the office of Wilton & Clough, 170 Broadway, New York City, at 11 A. M., on the twelfth day of January, 1909. Mr. Harrison Freeman was chosen temporary Chairman and called the meeting to order. Mr. Frank W. Jones was appointed Secretary pro tem. There were present Messrs. Harrison Freeman, Frank W. Jones, Wil- liam Jasper, Henry M. Prenckel and Francis Johnson, constituting the en- tire membership of the Board. On request of the Chairman, the Secretary presented the Call and Waiver of Notice, pursuant to which the meeting was held, duly signed by all the members of the Board. It was ordered spread upon the Minute Book immediately following the minutes of the meeting. The Chairman then presented a form of by-laws adopted by the stockholders at their first meeting, and stated that the next order of busi- ness as set forth therein was the election of a President, Vice-President, Secretary and Treasurer, to serve for the ensuing corporate year and until the election and acceptance of their successors. The following officers were then elected by unanimous vote: President Harrison Freeman. Vice-President Francis Johnson. Secretary and Treasurer Frank W. Jones. FORMS FOR FIRST MEETINGS. 24I The permanent officers of the Company thereupon took charge of the meeting. By motion, duly seconded and passed, the amount of the Treasurer's bond was fixed at $2,500, such bond to be in form and with sureties ap- proved by the Board. The Treasurer-elect then presented a bond for said amount signed by himself as principal, and by the Fidelity Guarantee Company, of New York City, as sureties. The form of the instrument and the sureties thereon meeting with the approval of the Board, the bond as presented was for- mally accepted and placed in custody of the President. The Secretary then presented a form of stock certificate for approval, which was by motion adopted as the stock certificate of the Company, and the Secretary was instructed to spread the said form upon the pages of the Minute Book immediately following the record of the meeting then in progress. The President then presented a written proposal from Mr. Henry W. McCabe, of Nos. 167-9 Centre St., New York City, offering to assign to the Company, in exchange for its entire Capital Stock, certain specified property and business. The said proposal was ordered spread in full upon the minutes and is as follows : (^See Form 29.) The President also presented a resolution of the stockholders, approv- ing the said proposal and authorizing and instructing the Directors to ac- cept the same and to take such action in regard thereto as might be neces- sary to make such acceptance fully effective. The following resolution was thereupon moved, seconded and unani- mously adopted. (See Directors' Resolution, Pornt 32.) Upon motion duly made, seconded and passed, the following resolu- tion was adopted : Resolved, That the Treasurer be and hereby is authorized and instructed to open an account for the Company with the Mercantile National Bank of New York City, and to deposit therein all the funds of the Company coming into his custody; such account to be in the name of the Company and funds deposited therein to be with- drawn only by check signed by the Treasurer and countersigned by the President. The following motions were then made, seconded and duly passed by the unanimous vote of all present : Moved, That the President be hereby authorized to lease for the use of the Company such suitable office or offices in this City as may be necessary for the proper transaction of the Company's business, such lease to be for one year, with privilege of renewal, at an an- nual rental not exceeding $1,200, and the office so secured to be the principal office of the Company within the State of New York. Moved, That the Secretary be hereby instructed to purchase all such record, stock and 'transfer books and all such books of account and stationery and office supplies as may be necessary for the proper operation and record of the Company's business. Moved, That the Secretary be instructed to prepare, in due and proper form, a certificate of the payment of one-half the capital stock of the Company, and, after the due execution and verification 242 NEW YORK CORPORATIONS. thereof, to file said certificate as required by law, and to spread a copy thereof upon the pages of the Minute Book following the rec- ord of the present proceedings. Moved, That the Treasurer be and hereby is authorized and di- rected to pay out of the funds of the Company the sum of five hun- dred dollars or so much of it as may be necessary to defray the cost of incorporation of the Company and the expenses incident thereto. Moved, That Messrs. Henry W. Wilson and Frank Freeman be hereby appointed inspectors of election to serve at the first annual election of Directors of the Company, and at any election of direc- tors by the stockholders previous thereto. There being no further business for consideration, the meeting was adjourned. Prank W. Jones, Harrison Freeman, Secretary. President. Pursuant to the instructions of the preceding minutes, the following instruments are hereunto appended in the order given: (i) Call and Waiver of Notice. (2) Form of Stock Certificates. (3) Certificate of Payment of One-half Capital Stock. The proposal for exchange of property for the stock of the company might have been entered with the other instru- ments immediately following the record of the proceedings, but it is used so directly as a basis for the subsequent pro- ceedings that it is perhaps better incorporated in the minutes as shown. (See § 48.) Form 35. — Assignment of Property. Assignment and Agreement. An Agreement entered into on the 14th day of January, 1909, by and between Henry W. McCabe, of New York City, and the Automatic Ap- pliance Company, a corporation organized under the laws of the State of New York; Whereas, On the 12th day of January, igog, the said McCabe by written proposition did offer to the said Automatic Appliance Company the entire business heretofore conducted under the firm name of Henry W. McCabe & Company for the manufacture of gas and electric fixtures, at Nos. 167-9 Centre Street, New York City, in exchange and full pay- ment for the capital stock of the said Automatic Appliance Company of the par value of Thirty Thousand Dollars ($30,000), the stock subscribed for by the incorporators being included therein with their consent; and FORMS FOR FIRST MEETINGS. 243 WhbjrBas, Said proposition of the said McCabe was accepted in ac- cordance witli its terms by the said Automatic Appliance Company at a duly assembled meeting of its directors held on the 12th day of January, 1909, said directors being authorized thereto by a duly adopted resolution of the stockholders of said Company: NoWj ThEREForb, For and in consideration_qf the entire capital stock of the said Automatic Appliance Company of the par value of Thirty Thousand Dollars ($30,000) to him issued, full-paid and non-assessable, the receipt whereof is hereby acknowledged, the said McCabe does hereby transfer, assign and convey as a going concern the entire business hereto- fore conducted under the firm name of Henry W. McCabe & Company for the manufacture of gas and electric fixtures, at Nos. 167-9 Centre Street, New York City, and the good-will thereof, and the lease of said premises and the firm property now therein and thereon, consisting of the stock on hand and in process of manufacture, raw material, tools, machin- ery, supplies and apparatus of every kind, together with all the prop- erty of every description belonging to said firm, including all cash on hand and in bank, amounting at this date to $1,225.35 ; all bills and accounts receivable, and the ownership and use of the present firm name and all trade-marks, formulae, secret processes and patents be- longing to or employed by the said business ; all to have and to hold and to operate and enjoy as fully and completely and to the same extent as has hitherto been done by the said Henry W. McCabe & Company. And the said Henry W. McCabe does hereby state, agree and under- take that, as the sole owner thereof, 'he has full right, power and author- ity to sell, dispose of and convey the said business of Henry W. McCabe & Company as herein set forth, and that all outstanding bills and obliga- tions of said business of every kind now due or to become due, do not ex- ceed the amount of Twelve Hundred Dollars ($1200). And on its part said Automatic Appliance Company does take over the said business as a going concern, hereby assuming all outstanding con- tracts and bills and obligations of every kind, and does undertake and agree to hold said Henry W. McCabe clear and free from all liability on account of the present obligations of said business, save and unless said obligations shall be found to exceed the amount of Twelve Hundred Dollars ($1200), in which case said Henry W. McCabe shall be liable for and shall pay all such excess amount. In Witness Whereof, the said Henry W. McCabe has hereunto affixed his signature and seal, and the said Automatic Appli- ance Company has hereunto affixed its signature by its Presi- dent, duly authorized thereunto, and has evidenced the same by its duly attested seal, all on the day and year first above mentioned. Henry W. McCabe. [l. s.] /corporate \ Automatic Appliance Company, i. SEAL. J By Harrison Freeman, President. Attest Seal: Frank W. Jones, Secretary. CHAPTER XXIII. FORMS FOR MEETINGS. ( I ) Stockholders'" Meetings. (a) Proxies. Form 36. — Proxy. Simple. Proxy. Know All Men By These Presents, That I, the undersigned, do hereby constitute and appoint John Calhoun my true and lawful attorney to represent me at all meetings of the stockholders of the Corliss Malting Company, and for me and in my name and stead to vote thereat upon the stock standing in my name on the books of said Company at the times of said meetings, and I hereby grant my said attorney all the powers that I should possess if personally present. Witness my signature and seal this 20th day of January, 1909. William H. Coles, [l. s.] In presence of Frederick Spencer. This proxy is simple as to form, but is broad in its scope. It is unlimited as to time, and, until revoked or terminated by some statutory limitation, applies to every stockholders' meet- ing, regular, special or adjourned. (See G. C. L., § 26.) Form 37. — Formal Proxy. Annual Meeting. Proxy. ANNUAL STOCKHOLDERS' MEETING. Know All Men By These Presents, That I, the undersigned, a stockholder in the Carston Casting Company, of Troy, New York, do hereby constitute and appoint Jasper Wellman my true and lawful attor- 244 FORMS FOR MEETINGS. 245 ney, with full powers of substitution and revocation to represent me and for me and in my name, place and stead, to vote upon the stock of said corporation standing m my name, or upon which I then may be entitled to vote, at the annual meeting of the stockholders of said corporation, to be held on the 8th day of February, 1909, and at any meeting postponed or adjourned therefrom, hereby granting to my said attorney full power and authority to act for me at said meeting and in my name and stead to vote thereat upon my said stock in the election of directors and in the trans- action of such other business as may be brought before said meeting, all as fully as I might or could do if personally present, and I hereby ratify and confirm all that my said attorney or his substitute shall lawfully do at such meeting in my name, place and stead. In Witness Whereof, I have hereunto affixed my signature and seal this second day of February, 1909. Samuel Wellman. [l. s.] In presence of Harrison Wilson. This proxy is specific and formal. It does not convey any greater or more complete powers than the short form al- ready given. It is, however, conventional and will be found more satisfactory under formal conditions or where matters of much importance are to be considered. It may readily be adapted to apply to any meeting by substituting "at any and all regular or special meetings of the stockholders of said cor- poration, and at any meeting or meetings adjourned there- from" in place of "at the annual, etc./' and changing the matters to be acted upon to "any and all matters brought before said meeting or meetings." (See § 104.) Form 38. — Proxy for Specific Action. Proxy. Know All Men By These Presents, That I, the undersigned, do- hereby constitute and appoint John H. Gale my true and lawful attorney to attend a special meeting of the stockholders of the American Cereal Company, to be held at the principal office of said Company, No. 120 Broadway, New York, at 10 o'clock A. M., on the isth day of April, igog^ and for me and in my name, place and stead, to vote thereat the stock then standing in my name on the books of the said Company against any and all propositions for the sale of the entire assets of said American Cereal Company, and I do hereby grant my said attorney full power and author- ity to so vote, and do hereby ratify and confirm his action in so doing, ex- 246 NEW YORK CORPORATIONS. pressly denying, however, to my said attorney all right, power and author- ity to act for me or to vote in my behalf on any other matter or matters coming up at said meeting. In Witness WheeEOJ, I have hereunto affixed my signature and seal this pth day of April, 1909. John T. McClei,land. [l. s.] Witness : Francis T. McVey. The power conveyed by this proxy is Hmited strictly to the action set forth and to the meeting mentioned. If desired, the voting power of a proxy may be limited to a portion of the stock owned; or two or more proxies may be given by the same party, provided only that their total does not exceed the amount of stock owned by him. Form 39. — ^Revocation of Proxy. Revocation of Proxy. I, the undersigned, do hereby revoke and annul any and all proxies or powers of attorney heretofore given by me, as far as the same may authorize or empower any person or persons to represent me, vote in my name and stead, or act for me in any way whatsoever, at any meeting or meetings of the stockholders of the Corliss Malting Company. Witness my signature and seal this fifth day of March, 1909. Nathan Goodhue, [l. s.] In presence of Harvey McKay. The usual proxy is revocable at any time by the maker. The sale of his stock automatically revokes all outstanding proxies, as does also the presentation at a meeting of a proxy of later date. A formal revocation, as given in the preceding form, is preferable to the incidental revocation of a subse- quent proxy. When proxies are given superseding outstand- ing proxies, the revocation of these is usually incorporated in the later proxy. FORMS FOR MEETINGS. 247 (&) Calls and Notices. Form 40. — Call for Special Meeting. Call for Special Meeting of Stockholders. We, the undersigned, Directors of the Buffalo Flouring Mills, do here- by call a special meeting of its stockholders to be held in the Company's office, 17s Lake Street, Buffalo, New York, on the 25th day of February, 1909, for the purpose of considering and acting upon a proposition to con- solidate the Company with the Lakeside Mills, of Buffalo, and for the transaction of any and all business necessary in connection therewith, and we hereby authorize and instruct the Secretary of the Company to send out notices of said special meeting in accordance with the by-law require- ments. Buffalo, New York, Henry Gillette. February 12, 1909. Robert Morris. Roger Howard. Samuel Marshall. William T. Ramsdell. The method of calling a special meeting should be pre- scribed by the by-laws and is usually either by some designated proportion of the board of directors, or of the stockholders, or by the president. A call by resolution of the board of direc- tors is always proper. The call for a special meeting is handed the secretary and it is then the duty of that official to send out the proper notices in accordance with the call. Form 41. — Notice of Special Meeting. BUFFALO FLOURING MILLS, 17s Lake Street, Buffalo, New York. To the Stockholders of the Buffalo Flouring Mills: Notice is hereby given that a special meeting of the stockholders of the said corporation will be held at the office of the Company, No. 175 Lake Street, Buffalo, New York, on the 2Sth day of February, 1909, for the pur- pose of considering and acting upon a proposition to consolidate the Com- 248 NEW YORK CORPORATIONS, pany with the Lakeside Mills, of Buffalo, and for the transaction of any and all its business necessary in connection therewith. By order of the Directors. Hbnry T. Amburgh, February 13, 1909. Secretary. The notice of a special meeting should always state the authority under which it is issued — a requirement that is frequently neglected. (For statutory requirements as to no- tice, see § 1 01.) Form 42. — Notice of Annual Meeting. ALBANY MILLING COMPANY, 142 Capitol Street, Albany, New York. March 2, 1909. Mr. Francis C. Wilson, 170 Broadway, New York. Dear Sir: — You are hereby notified that the Annual Meeting of Stockholders of the Albany Milling Company will be held in the Com- pany's office, 142 Capitol Street, Albany, New York, at 10 A. M., Tuesday, March 23, 1909, for the election of directors and the transaction of such other business as may come before the meeting. The stock transfer books will be closed March 13, 1909, at 3 o'clock P. M., and remain closed until 10 o'clock A. M., March 24, 1909. Respectfully, Hbnry IdE, Secretary. Under the New York statutes the notice of annual meet- ing, or of any other election of directors, must be published at least once in each week for two successive weeks immedi- ately preceding the election, in a newspaper published in the county where the election is to be held. (See S. C. L., § 25.) This is in addition to the notice prescribed by the by-laws. (See Chap. X, "Stockholders' Meetings.") Usual forms of publication notice are as follows: FORMS FOR MEETINGS. 249 Form 43. — Notice of Annual Meeting. Publication. MONTGOMERY TRUST COMPANY. New York, January 2, 1909. The Annual Meeting of the Stockholders of the Montgomery Trust Company will be held at the office of the Company, 138 Nassau Street, New York, on Wednesday, January 20, igog, at 12 o'clock noon. The transfer books close at 3 o'clock P. M., January 18, 1909, and re- open at 10 o'clock A. M., January 21, 1909. H. M. Franklin, Secretary. Form 44. — Notice of Annual Meeting. Publication. NEW YORK BUILDING COMPANY, yy Cedar Street. New York, January 4, 1909. Notice is hereby given that a meeting of the stockholders of the New York Building Company will be held at the office of the Company, No. 77 Cedar Street, on the twenty-fifth day of January, 1909, at 12 o'clock noon, for the purpose of electing five Directors for the ensuing year, and two Inspectors of Election, to serve at the next annual meeting, and for the transaction of such other business as may properly come before said meet- ing. Polls will remain open until 12.30 P. M. William SchErmER, Secretary. Form 45. — Notice of Annual Meeting. Publication. SOUTHERN EXPORT COMPANY. Annual Meeting. 120 Broadway, New York, February 19, 1909. The annual meeting of the stockholders of the Southern Export Com- pany will be held at the office of the Company, 120 Broadway, New York, on Wednesday, April 7, 1909, at 11 o'clock A. M., for the election of direc- 250 NEW YORK CORPORATIONS. tors, and in addition thereto for the following purposes: (i) To approve and authorize the purchase of the entire capital stock of the New York and Norfolk Steamship Company. (2) To amend the by-laws by the addition of a provision extending the powers of the Executive Committee. (3) To transact all such other business as may legally come before the meeting, in- cluding the approval and ratification of all actions of the Board of Direc- tors and of the Executive Committee since the last annual meeting of the stockholders of the Company. For the purposes of the meeting the books for the transfer of stock, both preferred and common, will be closed at 3 o'clock P. M., on Monday, March 15, 1909, and will be reopened at 10 o'clock A. M., on Thursday, April 8, 1909. Frank H. McCullough, Secretary. (c) Inspectors' Oaths and Certificates. The New York statutes require the appointment of inspec- tors of election, who take entire charge of and conduct the election of directors. For the first annual meeting, and for any special election of directors preceding, the inspectors are appointed by the board of directors. Thereafter they are elect- ed or appointed in such manner as prescribed by the by-laws. The number of inspectors is not limited, but at least two are re- quired. The inspectors are sworn to the faithful discharge of their duties, and are required to prepare, sign and acknowl- edge a certificate showing the result of the election conducted by them. The inspectors' oath and certificate must be filed with the clerk of the county in which the election is held. (S. C. L., § 31.) Form 46. — Oath. Inspectors of Election. Oath of Inspectors. State op New York, \ . County of Albany, i We, the undersigned, duly appointed to act as Inspectors of Election at the Annual Meeting of the Stockholders of the Hudson River Transpor- tation Company, to be held in the office of the Company, 132 State Street, Albany, New York, on the 23d day of March, 1909, being severally duly sworn, depose and say, and each for himself deposes and says, that he will FORMS FOR MEETINGS. 25 1 faithfully execute the duties of Inspector of Election at such meeting with strict impartiality and according to the best of his ability. Franz Helmsbund. WiLLARD Davis. Sworn to before me this \ 23d day of March, 1909. j Henry T. Blessing, Notary Public for Albany County. f NOTARIAL \ \ SEAL. / Form 47. — Certificate. Inspectors of Election. Certificate of Inspectors of Election. We, the undersigned, the duly appointed Inspectors of Election of the Hudson River Transportation Company, of Albany, New York, do hereby certify that at the regular annual meeting of said corporation held at the office of the Company, 132 State Street, Albany, New York, on the 23d day of March, 1909, a quorum being present, we, being first duly sworn by oath hereunto annexed, did conduct the election for directors of said corpo- ration, and that the result of the vote taken thereat was the election, by the plurality vote set opposite their respective names, of the following di- rectors : VOTES NAMES RECEIVED Harmon S. McNeill 1,542 Martin B. Severy 1,542 Sherman AUworths i,S42 WiUis McCabe 1,100 Harrison Garland 1,092 Wallis McLean 1,092 William T. Knight 1,002 In Testimony Whereof, we have executed this certificate this 23d day of March, 1909. Franz Helmsbund. Willard Davis. (See S.'C.' l','§ 31) Form 48. — Acknowledgment of Inspectors' Certificate. State of New York, \ . County of Albany. J ' ' On this 23d day of March, 1909, before me personally came Franz Helmsbund and Willard Davis, to me known and known to me to be the 252 NEW YORK CORPORATIONS. persons described in and who executed the foregoing certificate and sev- erally acknowledged that they executed the same for the use and purposes herein set forth. Henry T. Blessing, Notary Public for Albany County. f NOTARIAL 1 l SEAL. I (For fees, see Part HI, Table 3.) The inspectors' oath and their duly acknowledged certifi- cate are either arranged on one sheet of paper or on attached sheets and are filed together in the county clerk's office. (See 108.) (d) Minutes. Form 49. — Minutes of Annual Meeting. STILL WELL MANUFACTURING COMPANY of New York. Minutes of Annual Meeting of Stockholders. Held April 7, 1909. The stockholders of the Stillwell Manufacturing Company met in An- nual Meeting in the office of the Company, No. 380 Broadway, New York, at II o'clock A. M., April 7, 1909. The meeting was called to order and presided over by Frederick S. Sheldon, President of the Company. The record of the meeting was kept by the Secretary of the Company, John T. McFergus. The Secretary, after noting the stockholders present, reported that out of a total of 1000 shares outstanding and entitled to vote at the meeting, 700 shares were represented in person and 200 shares by proxies filed with the Secretary. The Secretary then presented the notice of the meeting, with his cer- tificate attached, showing that a copy thereof had been mailed to each stock- holder of record on or before the 20th day of February, 1909. He also pre- sented copies of the New York Times, under date of February 20, Feb- ruary 27 and April 6, containing due advertisement of the meeting. The proof of notice as presented was ordered received and filed. The minutes of the preceding annual meeting were read and approved. The minutes of the special meeting of the stockholders held January 7, 1909, were also read and approved. The President then appointed Messrs. John H. Harrison and Harvey L. McLane Inspectors of Election, who, being duly sworn, proceeded to FORMS FOR MEETINGS. 253 conduct the election of Directors. The election was held by ballot and, as shown by the Inspectors' report, Messrs. Frederick S. Sheldon, Malcolm McDougall, Henry T. Fremont, Samuel F. McKay, George H. Bronson, Frank McCarroU and Nelson Willis received a plurality of all the votes cast. Said parties were thereupon declared to be the duly elected directors of the Company for the ensuing year and until the election of their successors. The annual report of the President was then presented to the meeting and upon request was read by him. The report was, by motion, unani- mously carried, ordered received and filed. The Treasurer's annual report was submitted and, by motion, unani- mously carried, was approved and ordered received and filed. The Secretary then presented the Minute Books of the Board of Direc- tors and of the Executive Committee for the inspection of the stockholders present. Upon motion duly passed and unanimously carried, all actions of the Board of Directors and of the Executive Committee since the last annual meeting of the Stockholders of the Company were approved and ratified. There being no further business before the meeting, it was adjourned. John T. McFergus, Secretary. Frederick S. Sheldon, President. (2) Directors' Meetings. Form 50. — Call. Special Meeting of Directors. THE FREMONT STEAMSHIP COMPANY, 133 South St., New York. April 12, 1909. To the Secretary of the Fremont Steamship Company: In accordance with the authority vested in me by the by-laws of this Company, I hereby call a special meeting of the Board of Directors to be held in the office of the Company at 3 P. M., on the isth day of April, 1909, for the purpose of acting upon the resignation of the Treasurer of the Com- pany, Mr. John Ellis, for the election of his successor and for the transac- tion of any other business in connection therewith that may be necessary ; and you are hereby instructed to send out notices of said meeting as re- quired by the by-laws of this Company. Wilhelm Von Lossbergh, President. (See § i2Sb.) When this call is handed to the secretary, it becomes the duty of that official to see that the required notices of the 254 NEW YORK CORPORATIONS. meeting are duly sent out. The form of this notice would be about as follows : Form 51. — Notice. Special Meeting of Directors. THE FREMONT STEAMSHIP COMPANY, 133 South St., New York. April 13, iQog. Mr. James B. Hartleigh, 178 West End Ave., City. Dear Sir: — ^You are hereby notified that, pursuant to a call of the President, a special meeting of the Board of Directors of this Company will be held in its office at 3 P. M., on the isth day of April, igog, for the pur- pose of acting upon the resignation of the Treasurer of the Company, Mr. John Ellis, for the election of his successor, and for the transaction of such other business in connection therewith as may be necessary. Respectfully, Wims Carey, Secretary. When the board of directors is of moderate size, special meetings are frequently called without formal notice by means of the call and waiver. Form 52. — Call and Waiver. Special Meeting of Directors. Call and Waiver. SPECIAL MEETING OF DIRECTORS. We, the undersigned, all the Directors of the Franklin News Syndicate, do hereby call a special meeting of the Board of Directors of said Company, to be held in its office. No. 79 Park Place, New York City, at 3 o'clock P. M., on this 22d day of April, igog, to consider and act upon a proposition for an exchange of news matter with the Baring Associated News Com- pany of Chicago, and we do hereby waive all statutory and by-law require- ments as to notice of time, place and purposes of said meeting, and consent to the transaction thereat of any and all business pertaining to the affairs of the Company. New York City, N. Y., John H. Franklin. April 22, 1909. Samuel T. Harding. Frank T. Morris. James H. McCall. Horace Oswald. FORMS FOR MEETINGS. 255 Form 53. — Notice. Regular Meeting of Directors. WILLIS MACHINE COMPANY, I7S Broadway, New York. February 11, igog. Mr. Herman T. McCall, 158 Broadway, New York. Dear Sir : — You are hereby notified that the regular monthly meeting of the Board of Directors of the Willis Machine Company will be held in the Company's office, 175 Broadway, February 18, 1909, at 10 o'clock A. M. Respectfully, Henry M. Gale, Secretary. (See § i2Sb.) Form 54. — Minutes. Regular Meeting of Directors. WESTON CEMENT COMPANY. Minutes op Regular Meeting of Directors Held April 14, 1909. The Board of Directors of the Weston Cement Company of New York assembled in regular meeting in the office of the Company, at Weston, New York, at 3 o'clock P. M., April 14, 1909. The meeting was called to order and presided over by Henry M. Wal- lace, President of the Company. John H. Woodale, Secretary of the Com- pany, acted as Secretary of the meeting. Present : Messrs. Henry M. Wallace, Harvey H. Townsend, William F. Leighton, George J. Ainsworth and Harry M. Williams, constituting a quorum of the Board. The minutes of the preceding meeting of March 15th were read and approved. The President reported that the plant of the Company was rapidly ap- proaching completion, that the machinery was practically all installed, and that actual operations should begin within the next thirty days. The President also reported that, in accordance with the instructions of the board, contracts had been entered into with the Howard Sales Com- pany of New York City for the delivery of 20,000 barrels of cement, be- ginning July I, 1909, at the rate of not less than 3000 barrels a month, the price to be $1.58 per barrel, and payment to be made at ninety days from date of each shipment. The Treasurer submitted his written report for the month ending April 10, 1909, showing a cash balance on hand of $40,225. The Treasurer fur- 256 NEW YORK CORPORATIONS. ther stated that the outstanding obligations of the Company for construc- tion work, machinery, etc., falling due within the next thirty days, would aggregate $35,425. He also stated that the expenses incidental to begin op- erations would probably require from ten to fifteen thousand dollars more, and asked the Directors to provide for these requirements. The Treasurer also suggested that under the terms of the subscription, a ten per cent, call could be made upon the subscribed stock of the Company and that this, if done, would provide at least $35,000 in cash — an amount ample to carry the Company through to a producing basis. Mr. George J. Ainsworth thereupon stated that some very desirable cement properties had been offered the Company, which, if purchased, as he believed was advisable, would require an additional amount of cash. He therefore asked the Board to adjourn without action upon the Treasurer's recommendations until the following day, when he would be prepared to make a full report, and when such action could be taken in regard to the Company's finances as might seem desirable. In the absence of objection, the President thereupon declared the meet- ing adjourned until April 15, 1909, at 3 o'clock P. M., then to reassemble in the office of the Company. John H. Woodalb, Secretary. Henry M. Wallace, President. CHAPTER XXIV. SIGNATURES AND CERTIFICATIONS. Form 55. — Official Signatures. (a) Harris M. Chalmers, President. (b) Harris M. Chalmers, President Chalmers Mining Company. Official signatures such as given above are used by cor- poration officials in informal matters, either where the trans- action does not involve binding the corporation, or where, if the corporation is to be bound, custom or special authoriza- tion has empowered the signing official to act in his individual official capacity. When the official signature is used the com- plete form given above (b) should always be employed, unless by letter heading, subject matter, or in some other way, the identity of the corporation for which the official is acting is clearly indicated. When important instruments are to be signed or the cor- poration is to be bound formally, the corporate signature as in the form which follows should be employed. This corpo- rate signature is also frequently and properly used as the signature to any document relating to the company business. The first of these forms (a) shows a corporate signature affixed by the president. The signature, save as to the name of the signing official, is usually printed or impressed with a rubber stamp. Any other official of the company might affix the corporate signature with equal propriety, if authorized 257 258 NEW YORK CORPORATIONS. thereto, or might join with the president in such signature. In (b) is shown a formal corporate signature complete, affixed to the testimonium — or final clause — of a corporate contract. Where the secretary joins with the president in the corporate signature, no attestation of the seal is necessary. Form 56. — Corporate Signatures. (a) Chalmers Mining Company, By Harris M. Chalmbrs, President. (b) In Witness WherEoe, the said Chalmers Mining Company, party of the first part, has hereunto caused its corporate name to be signed by its President, and its corporate seal to be affixed by its Secretary, and the said George T. Harding, party of the sec- ond part, has hereunto affixed his signature and seal, all being done in the City of New York on this seventeenth day of Jan- uary, 1909. ( CORPORATE \ \ SEAL. J Attest Seal: Henry T. Wilkins, Secretary. Chalmers Mining Company, By Harris M. Chalmers, President. George T. Harding, [l. s.] Form 57. — Corporate Endorsements, (a) (b) ■^ ■»! I ^ S -"I S S *■ w (J SIGNATURES AND CERTIFICATIONS. 259 The first of the foregoing endorsements is the simple cor- porate endorsement, usually affixed by the treasurer or cashier, though the president is sometimes authorized thereto. The second is a form employed when the instrument is deposited for collection or credit. This latter endorsement is generally affixed in its entirety with a rubber stamp. A corporate acknowledgment is in form the affidavit of one or more of the officers of the corporation as shown in the form which follows. It has the same efifect as if made by the corporation as a legal entity. The form given is that pre- scribed by the Real Property Law, § 309. Form 58. — Corporate Acknowledgment. State of New York, "1 . County of New York. J "• On the twelfth day of February, in the year 1909, before me personally came Willard J. Cowles, to me known, who, being by me duly sworn, did depose and say that he resides in the City of New York; that he is the President of the Stuart & Cowles Contracting Company, the corporation described in and which executed the above instrument; that he knows the seal of said corporation ; that the seal affixed to said instrument is such cor- porate seal ; that it was so affixed by order of the Board of Directors of said corporation, and that he signed his name thereto by like order. James W. Black, / NOTARIAL "1 Notary Public 1 SEAL, i for New York County. Any statement, report, notice or other document pre- pared by an officer of a corporation and requiring an affidavit, is ordinarily certified to by the officer by whom it was pre- pared. Any other officer having sufficient knowledge of the matter might, however, act — ^the wording of the affidavit being varied to meet the conditions — save in cases where the statutes prescribe the signing official. 26o NEW YORK CORPORATIONS. Form 59. — Treasurer's Affidavit. Statb op New York, \ County of New York. J "•■ On this fifteenth day of February, 1909, personally appeared before me, a Notary Public in and for the County of New York, William H. Cook, Treasurer of the Cook Bank Note Company, who, being duly sworn, did de- pose and say that he has full charge and control of the books and accounts of the said Company ; that the above and foregoing statement is taken from said books and accounts ; that it is a true and accurate transcript therefrom, and that, to the best of his knowledge and belief, it is a just and correct presentation of the financial condition of said Company on this date. William H. Cook. Sworn to before me the day \ and year aforesaid. / Jambs H. Crampton., f NOTARIAL \ Notary Public \ SEAL. J for New York County. In active corporations the secretary is frequently called upon to give certified copies of proceedings, resolutions, etc. The following certifications of an extract from the minutes and of a resolution give the general form. Form 60. — Certification. Extract from Minutes. HOWARD DRILUNG COMPANY. Transcript of Minutes. Special Meeting of Directors. "Pursuant to call and notice, the Board of Directors of the Howard Drilling Company met in special meeting in the office of the Company, Feb- ruary IS, 1909, at 2 P. M. President Arthur C. Howard presided. Secre- tary Horace Ogden officiated as recording officer," etc., etc. I, the undersigned. Secretary of the Howard Drilling Company, do hereby certify that the above and foregoing is a true and accurate transcript of the minutes of the proceedings at a special meeting of the Board of Di- rectors of said Company, held in the office of the Company on the fifteenth day of February, 1909, at 2 P. M., to consider and act upon a proposition to purchase and take over the entire plant and business of the McGovern Con- tracting Company, of New York City. In Testimony WherEOPj I have affixed hereunto my official signa- ture and the corporate seal of said Company, in the City of New York, on this sixteenth day of February, 1909. r CORPORATE \ Horace OgdEn, t seal. J Secretary. SIGNATURES AND CERTIFICATIONS. 261 If desirable the president might with entire propriety join with the secretary in the certification of any specially impor- tant transcripts. In such event the introductory phrase would be changed as follows: "We, the undersigned, President and Secretary respectively of the Howard," etc., and the testimonium would also be changed to correspond : "In Testi- mony Whereof^ we have hereunto affixed our official signa- tures and the corporate seal," etc. Form 61. — Certified Resolution for Bank. Certified Resolution. "Resolved, That the Treasurer be and hereby is authorized and instructed to open an account for the Company with the Third National Bank of Albany, and to deposit therein all of the funds of the Company coming into his custody; such account to be in the name of the Company, and funds deposited therein to be withdrawn only by check signed by the Treasurer and countersigned by the President." I, Roger H. Sherman, Secretary of the AUis Drug Company, hereby certify that the foregoing is a full and accurate transcript of a resolution duly passed at a regular meeting of the Board of Directors of the Allis Drug Company held in the office of said Company in Albany at 11 A. M., on the tenth day of February, 1909, as it appears on the minutes of said meeting; and I do further certify that Charles Allis is the duly elected President, and James W. Blount the duly elected Treasurer of said Com- pany. In Testimony Whereof, I have hereunto affixed my official signa- ture and the corporate seal of said Company, this tenth day of February, 1909. Roger H. Sherman, /CORPORATE "I Secretary. I SEAL. J The above is a good general form employed in opening the corporate bank account. In many cases, however, the banks have their own forms for this purpose which they naturally prefer. As a rule these forms are good, though occasionally the latitude and powers conferred upon the treas- urer, or other officer or officers concerned in the finances of the company are almost too broad. In such cases the bank's 262 NEW YORK CORPORATIONS. form can be modified to meet the wishes of the particular corporation while still preserving the general form supplied by the bank. In some cases the bank will require a certified tran- script of any by-laws relating to the custody of funds and the duties of the officers in relation thereto. In such event the resolution and transcript may be written on the same sheet and be covered by one certification, modified to meet the conditions, or each may be certified separately. Another form of certification of a resolution is as follows : Form 62. — Certification of Resolution. The undersigned, Secretary of the Jefferson Bank Note Company, does hereby certify that the foregoing resolution was duly adopted on the loth day of March, 1909, at a meeting of the Board of Directors of said Com- pany, regularly called and duly constituted, and at which a quorum was present. Witness my hand and the seal of the said corporation this 12th day of March, 1909. (■corporate \ Frank H. Stillman, I SEAL. I Secretary. CHAPTER XXV. FORMS OF REPORTS. One-half the authorized capital stock of every business corporation must be paid in within one year of its organization and a certificate thereof, as in the following form, must be filed in the office of the Secretary of State and of the county clerk within thirty days thereafter. Fees to Secretary of State for recording same, 15 cents per folio; to county clerk, 6 cents for filing and 10 cents per folio for recording. (See § 74; also B. C. L., §5 and S. C. L., § 55.) Form 63.— Certificate. Payment One-Half Capital Stock. THE ALDEN MANUFACTURING COMPANY. A Corporation formed under the Business Corporations Law of the State of New York. Certificate of Payment of One-Half of Capital Stock We, the undersigned, a majority of the Directors of the above named corporation, do hereby certify that the capital stock of said corporation is Twenty Thousand Dollars ($20,000) and that one-half thereof has been paid in, and that such payment was made within one year from the incorporation of said company and within thirty days preceding the date of this certificate of payment and that of said paid in stock. Five Thousand Dollars ($5,000) was issued for property purchased. In Witness Whereof, we have executed this certificate in dupli- cate, this eighth day of April, 1909. Ennis C. Cornell. E. H. Davey. Morris Potter. 263 264 NEW YORK CORPORATIONS. State of New York. 1 County of Kings. /*-^- On this eighth day of April, 1909, before me personally came Ennis C. Cornell, E. H. Davey and Morris Potter, to me personally known and known to me to be the individuals described in and who executed the fore- going certificate and severally acknowledged to me that they executed the same. C. D. DuBois, (■notarial 1 Notary Public, \ SEAL. I Kings County, N. Y. State of New York, "1 County of Kings. K'^"' Ennis C. Cornell and E. H. Davey, being severally duly sworn, each for himself, deposes and says, that he, the said Cornell, is the president of The Alden Manufacturing Company and that the said E. H. Davey is the secre- tary thereof, and that the statements contained in the foregoing certificate are true. Ennis C. Cornell, President. E. H. Davey, Secretary. Sworn to before me this 8th \ day of April, 1909. / C. D. DuBois, Notary Public, f notarial 1 Kings County, N. Y. l SEAL. I This certificate must be signed and acknowledged by a majority of the board of directors and be verified by the pres- ident or vice-president, and secretary or treasurer. The annual official reports required of New York corpora- tions are three in number: (i) Report to Secretary of State, generally known as the "Annual Report." (2) Report to State Comptroller. (3) Local tax report. Blanks for the comptroller's report and the local tax report are furnished by the authorities. Blanks for the annual report are not so sup- plied. (See Chap. XVI, "Reports.") The annual report is perfunctory in its nature. Nothing is based upon it, the information given, except as to the ad- dresses, is too vague to be of value, and no penalty is imposed for a failure to file the report unless such filing is demanded in writing by some stockholder or creditor of the company. FORMS OF REPORTS. 265 In case such a request is made, the report must be filed within ten days thereof under penalty thereafter of fifty dollars for each day of continued failure. (S. C. L., § 34.) Form 64. — Annual Report. NATIONAL DEVELOPMENT COMPANY. Annual Report. I, James C. Bradley, President of the National Development Company, a domestic stock corporation, do, in accordance with the requirements of Section 34 of the Stock Corporation Law, hereby make a report as of the first day of January, 1910, as follows : 1. The amount of its capital stock is $100,000 and the proportion ac- tually issued is $100,000. 2. The amount of its debts does not exceed $2,000. 3. The amount of its assets is at least equal to $100,000. 4. The names and addresses of its officers are as follows : James C. Bradley, President, 300 Broadway, New York. Henry C. Brown, Secretary and Treasurer, 50 State St., Albany, N. Y. The names and addresses of its Directors are as follows : James C. Bradley, 300 Broadway, N. Y. Henry C. Brown, 50 State St., Albany, N. Y. Robert B. Taylor, 308 So. Pearl St., Albany, N. Y. In Witness Whereof, I have hereunto set my hand this fourth day of January, 1910. James C. Bradley, President. The report must be signed by the president, vice-presi- dent, secretary or treasurer, but need not be sworn to. It is filed in the office of the Secretary of State. No fees are re- quired. The prescribed time of filing is during the month of January, or, for corporations doing business in foreign coun- tries, before the first day of May. (See § 174.) The following form of report to the State Comptroller is used for both domestic and foreign corporations : 266 NEW YORK CORPORATIONS. Form 65. — Report to Comptroller. To the Comptroller of the State of New York : As Treasurer of the Coleman Chemical Company I make the following report of such Company for the year ending October 31, 1908, pursuant to the provisions of Section 182, Chapter 908, Laws of 1896, and acts amend- atory thereof: 1. The last preceding report made by this Company to the Comptrol- ler of the State of New York under the provisions of the above acts was for the year ending October 31, 1907. 2. Organized January 6, igoi, under the laws of New York. 3. This Company began business in the State of New York on March I, 1901. 4. Authorized <:apital stock of Company $500,000 5. Number of shares of stock authorised { p°^™°"j '^^ 6. Number of shares of stock issued | Common s 000 I Preferred None 7. Par value of each share /Common $ 100 I Preferred , 8 Amount paid into Treasury of f Common $ 100 Company on each share I Preferred $ 9. Amount of Capital Stock issued for cash or property $ 30,000 10. Amount of Capital Stock issued for good will, copyrights, brands, patents, trade-marks, formulae, services, etc., other than cash or property $470,000 11. Amount of common stock on which dividends were declared $500,000 12. Amount and date of each dividend on common stock, July I, 1908 $ 5,000 13. Rate per cent, per annum of dividends on common stock 1% 14. Amount of preferred stock on which dividends were declared $ 15. Amount and date of each dividend on preferred stock 16. Rate per cent, per annum of dividends on preferred stock 17. Nature of business in State of New York and how transacted. Manufacturing and selling proprietary preparations. 18 (a) Place, street and number where such business was conducted. 507 Broadway, New York City. (b) Present office of the Company, 507 Broadway, New York City. 19. Average value of stock in trade carried in the State of New York during the year ending October 31, 1908 $370,000 20. Average monthly bank balance employed in the State of New York during the year ending October 31, 1908...$ 1,270 21. Average value of bills and accounts receivable in State of New York during the year ending October 31, 1908 $ 19,430 22. Average value of shares of stocks of other corporations doing business in the State of New York and owned by this company during the year ending October 31, 1908 None 23. Average value of personal property, including bonds, loans on call and other financial securities employed in the State of New York, other than heretofore mentioned, during the year ending October 31, 1908 $ 3,000 FORMS OF REPORTS. 267 24. Capital invested in real estate located in the State of New York during the year ending October 31, 1908, and where situated None 25. Total of assets above enumerated located in the State of New York during the year ending October 31, 1908 $393,600 26. Average value of stock in trade carried outside the State of New York during the year ending October 31, 1908 $ 2,000 27. Average monthly bank balance employed outside the State of New York during the year ending October 31, 1908. . None 28. Average value of bills and accounts receivable outside the State of New York during the year ending October 31, 1908 $ 760 29. Average value of shares of stocks of other corporations owned by this corporation, where such corporations are doing business wholly without the State of New York None 30. Average value of personal property including bonds, loans on call and other financial securities employed outside the State of New York, other than heretofore mentioned, during the year ending October 31, 1908 $ 500 31. Capital invested in real estate located outside the State of New York, during the year ending October 31, 1908, and where situated None 32. Total of assets located outside the State of New York, during the year ending October 31, 1908 $ 3,260 LIABILITIES : Bonds None Mortgages not secured by bonds None Bills payable $ S,2oo Accounts payable $ 3,900 Other liabilities, excluding capital stock None Total liabilities $ 9,100 33. Highest bona fide price at which stock sold / Preferred .$ during year ending October 31, 1908 t Common ..$ 52 34. Lowest bona fide price at which stock sold /Preferred .$ during year ending October 31, 1908 I Common ..$ 50 35. Percentage of capital stock of the company employed in the State of New York during the year ending October 31, 1908, in manufacturing and in the sale of the product of such manufacture 75% 36. Are your goods manufactured for you by others? By us. 37. Do you operate a factory? Yes. The undersigned, being the Treasurer of the above Company, esti- mates and appraises the Capital Stock of said Company as follows : Pive thousand shares at iifty dollars and Hfty cents per share, amount- ing in the whole to two hundred Afty-two thousand, five hundred dollars. In Witness Whereof, I have set my hand this 14th day of November, 1908. Robert Coleman, Treasurer. 268 NEW YORK CORPORATIONS. Statb op New York, \ County of New York. J ^^- ' On this fourteenth day of November, A. D. 1908, personally appeared before me, a Notary Public in and for the County of New York, Robert Coleman, Treasurer of the above-named Company, who, being duly sworn according to law, did depose and say that the foregoing report is just, true and correct, and that it includes all dividends of any description declared by said Company during the year ending October 31, 1908, and that he has, according to his best knowledge and belief, appraised the Capital Stock of the Company as provided by statute, at not less than the average price at which it sold and not less than the difference between its assets and liabil- ities, exclusive of capital stock. Robert Coleman, Treasurer. Sworn to before me the day \ and year aforesaid. J / NOTARIAL "t Henry Perkins, \ SEAL. J Notary Public. Blanks for this report are prepared by the Comptroller and are usually sent out in October. If not received, they may be obtained without cost by applying to that official. The afiSdavit, in form prescribed, of either the president, vice- president, secretary or treasurer as to the truth of the state- ments therein must be annexed to the report, which when complete is merely mailed to the State Comptroller at Al- bany. No filing or other fees need be paid. This report is used as the basis for fixing the franchise tax and must be filed with the Comptroller on or before November isth of each year. It must give the condition of the corporation at the close of business on October 31st preceding. The statements of the report are not conclusive, as the Comptroller may in his discretion determine the amount of the franchise tax of any particular corporation on other information or may require the officers of the corpora- tion to furnish additional data. The form of report prescribed by the Comptroller must be used. For failure to file the report, a penalty is imposed of $100 and $10 per day for each day that the failure con- tinues. The same penalty is imposed for failure to file any FORMS OF REPORTS. 269 Special report required by the Comptroller within any rea- sonable time specified by him. (See § 175 ; also Tax Law, §§ 192-194, 197.) When actual sales of stock have been made during the year, or in preceding years, the approximate cash value of the capital stock is, as a rule, easily determined. If, how- ever, as is not infrequently the case with corporations paying no dividends, no actual cash sales have been made, the cash value of the stock may become very difficult of determina- tion. In such case, as the market value of the stock is to be determined, it must be based on the value of the entire property and business owned by the corporation. Manufacturing, mining and laundering corporations em- ploying not less than forty per cent, of their capital stock within the state, are entitled to exemption from the fran- chise tax, — ^manufacturing corporations, however, only to the extent of the capital actually employed within the state. To secure this exemption a special statement must be made, in form prescribed by the Comptroller, from whom blanks may be secured. This statement must show that at least forty per cent, of the capital stock of the corporation is employed in the state in furtherance of its legitimate business. (See §§ 149, 150; also Tax Law, § 183.) Form 66. — Statement to Comptroller. To Secure Exemption as Manufacturing Corporation. Replies to Questions Should Be Explicit. Statement and affidavit of Thomas R. Edwards, President of Stand- ard Biscuit Company claiming exemption from making reports, and the payment of tax as levied and assessed under Chapter 908, Laws of New York, i8g6, and acts amendatory thereof. 1. Full name of the corporation, joint stock company or association. Standard Biscuit Company. 2. Name and title of officer making this statement. Thomas R. Bdwards, President. 270 NEW YORK CORPORATIONS. 3. Under what Law of what State or country was the corporation, joint-stock company or association incorporated, organized or formed? New York. 4. Date of organization. January 4, 1905. 5. For what purpose? (To be stated as shown in charter.) "The business and objects of said corporation are th£ manufacture and sale of biscuits, crackers, confectionery and other food products." 6. Nature of business now transacted? The company is engaged in the manufacture of biscuits and fancy crackers at 507 Greenwich St., New York City, and in disposing of the same through travelling salesmen throughout the United States. 7. If a mining company, state where the mines are located. 8. If an agricultural company, state where the company's plant is situated. 9. If a manufacturing company, state where factory is located. 507 Greenwich St., New York City. 10. Does the company maintain, own and operate the mine, plant or factory ? The company owns its factory property in fee simple. 11. Does the company actually manufacture within the State of New York, all the goods, wares or merchandise sold by the company in its busi- ness in this State? Yes. 12. Does the company lease to other parties the right of manufacture of goods sold by it? No. 13. Does the company cause any of its products to be manufactured by any other person, partnership, association or corporation within or without this State, that it uses or sells in this State? No. 14. Location of main business office of the company. S07 Greenwich St., New York City. 15. What percentage of the company's entire capital is actually em- ployed in New York State in 1. Conducting its manufacturing; p5%. 2. The operation of mining ores? Remarks : — The entire manufacturing operations of the company are carried on within the State of New York. State of New York, 1 County of New York. / ^^- ■ Thomas R. Edwards, President of the Standard Biscuit Company, being duly sworn, deposes and says that the answers to the above questions as set down by him and remarks, are true and correct. Thomas R. Edwards. Sworn and subscribed before me this \ J7th day of January, JQog. j { NOTARIAL 1 Robert Hendrix, \ SEAL. / Notary Public for New York County. FORMS OF REPORTS. 2/1 The form of local reports required and the regulations under which they are made vary in different parts of the state. In New York City and in Buffalo, no preliminary reports are required of corporations liable to taxation, but they are ten- tatively assessed. If the corporations are satisfied, they need take no action in the matter and the assessment stands. If, however, they feel aggrieved, application must be made for a revision or correction of the original assessment, and the tax commissioners then determine the assessment that should really be made. In most portions of the state, however, the usual plan is followed of requiring a prescribed report from the corpora- tion which is used as a basis for assessment. In every important tax district of the state printed forms are supplied for the local tax reports and may be obtained from the local assessors. In the less important districts blanks are not furnished. The general form given below will, in such cases, be found convenient. No fees of any kind are required in connection with these local tax reports. (See Chap. XVI.) Form 67. — Local Tax Report. General Form. Report of the HOWARD IMPLEMENT COMPANY To the Assessors of the Town of Woodbury, New York. I, Henry M. Wilson, Treasurer of the Howard Implement Company, a corporation organized under the laws of the State of New York, in pur- suance of Section 27 of the Tax Law of the State of New York, do hereby set forth : 1. The real property of said corporation consists of — Factory in Central Valley, the amount actually paid therefor being, $5,000. 2. The capital stock of said corporation actually paid in and secured to be paid in is, $50,000. The amount paid therefrom for realty is, $S,ooo. The amount of said capital stock held by the State and by any incor- porated literary or charitable institution is, $2,500. 272 NEW YORK CORPORATIONS. 3. The principal office of the Company is situated in Central Valley, New York. 4. The direct liabilities of the corporation, not including any indebted- ness incurred in the purchase of non-taxable securities, are, $3,5°°. State os New York, \ . County of Orange. / ' ' I, Henry M. Wilson, the Treasurer of the said Corporation, being duly sworn, do hereby certify that the foregoing is in all respects a just and true statement of the property and debts of the Corporation on the second Monday of January, 1909. Henry M. Wilson. Sworn to before me this 20th day \ of February, igop. ) Frank H. Howard, I notarial \ Notary Public for I seal. J Orange County. The five boroughs of the City of New York have but one board of assessors and therefore constitute a single tax district. Assessments are made on the second Monday in January. As a preliminary step, the corporations liable to taxation are assessed upon some estimated valuation or upon their entire authorized capitalization at its par value without regard to the real values involved. Notice of this assessment is sent to each corporation, together with a blank form upon which the corporation may apply for a revision and correc- tion of the assessment if aggrieved thereby. The application and report which follows is of this nature. If a revision is desired, application must be made there- for before 'March 31st. If no application for correction is made, the assessment becomes final on that date and review- able only on application to the courts. The tax department will readily make the proper corrections where the original assessment is excessive, if the required application is made within the prescribed period. It must be remembered, however, that the tax de- partment is not required to notify tax payers of the amounts of their assessments. Notice is usually sent merely as a mat- ter of convenience to all parties, but, if overlooked, the cor- FORMS OF REPORTS. 273 poration failing to receive such notice has no ground of com- plaint or basis for asking a revision of the assessment after the books have been closed on the 31st day of March. For this reason if no notice of assessment is received within a reasonable time after the second Monday in January, the cor- poration should take steps to ascertain if it is on the assess- ment rolls, and if so, the amount of its assessment. This may readily be ascertained by application to the tax depart- ment. Form 68. — Local Tax Report. New York City. This statement should be filed by February 10. It must be filed by March 31. Thb City of New York DEPARTMENT OF TAXES AND ASSESSMENTS Main Office Hall of Records, Northwest Corner Chambers and Centre Streets Borough of Manhattan The Howard Clock Company, a corporation organized under the laws of the State of New York, claiming to be aggrieved by the assessed valu- ation of its property for the year 1909, makes application by the under- signed, one of the officers of the said corporation, to have the same revised and corrected. John H, Howard, Dated Febnuiry z, 1909, Treasurer. State the Value of the Following Items: Assets All assets must be scheduled, whether located in the State of New York, or elsewhere, including deposits in banks and debts due from non- residents. 1. Real estate $10,000.00 2. Machinery and plant other than real estate $ 7.S0O-00 3. Goods, wares and merchandise $iS.S2S 75 4. All other tangible personal property. (This does not in- clude mortgages or credits) $ 4,285.24 5. Cash on hand and on deposit $3,175-35 6. Debts due from solvent debtors. (This includes bonds and all credits) $ 4.782.24 274 NEW YORK CORPORATIONS. 7. All other intangible personal property exclusive of patent rights, copyrights, trade-marks, goodwill and fran- chises $10,000.00 8. The aggregate of the above assets $55,268.58 Deductions Except the items numbered 10, 11, 15 and 16, the value of every item to be deducted must be the sum at which it is included in the above statement of assets. /U. S. Bonds $ /N. Y. State and Municipal Bonds $ '. . I N. Y. Mortgages recorded on or after 9. Property \ July i, 1906, and mortgages on which exempt ] a registration tax has been paid since by / May 13, 1907. (This includes only mort- law, \ gages owned by the corporation) $ which J Goods imported by above corporation includes / from foreign countries on hand in un- I broken original packages $ 750.00 \ Any other property exempt by law, speci- \ fying its nature $ 10. So much of the surplus, if any, as shall not exceed ten per centum of the par value of the shares of stock issued. . .$ 11. The assessed value of the corporation's real estate in this State, including its special franchises. {See Note.) Give Section or Ward and Lot Numbers if in The City of New York. 780 Franklin St., Ward 4, Map 5, Block 75 $ 7,500.00 12. Real estate outside of this State, specifying its location. Bridgeport, Connecticut $ 2,500.00 13. Tangible personal property having a permanent situs out- side of this State, specifying its nature and location. (This does not include bonds, notes, evidences of debt of any kind, currency, deposits in banks, bills receivable, or any other intangible property). Buildings and ma- chinery at Bridgeport, Conn. $ 7,500.00 14. Shares of stock in other corporations actually owned by the above corporation which are taxable upon their cap- ital stock $ 7.500.00 15. Indebtedness secured by the company's bond and mort- gage on real property $ 5,000.00 16. All other indebtedness of the corporation not contracted or incurred in the purchase of non-taxable property or securities, or for the purpose of evading taxation. {See Note.) (The amount owing for goods imported by above corporation from foreign countries on hand in unbroken original packages and the capital stock of the corporation must not be included) $ 7.52S-2S 17. The aggregate of the items set down in answer to ques- tions 9 to 16 inclusive $38,275.25 The total capital stock issued {i. e.. Total value of all shares at par) $50,000.00 The amount of surplus, if any, as shown by the books $ FORMS OF REPORTS. 275 Gross assets exclusive of copyrights, patent rights, trade-marks, goodwill and franchises other than special franchises, as shown by answer to question 8 $55,268.58 Aggregate of deductions from gross assets as shown by answer to question 17 $38,275.25 Subtract the deductions from the above assets and the balance is the actual value of the capital stock Hable to taxation $16,993.33 The principal office or the place of transacting the Financial Business of the said corporation is situated in the Borough of Manhattan, in The City of New York, at No. 780 Franklin Street. The City of New York, 1 County of New York. J•^•^■• I, John H. Howard, the treasurer of the said corporation, being duly sworn, do hereby certify that the foregoing is in all respects a just and true statement of the property and debts of the corporation on the second Monday of January, 1909. John H. Howard. Sworn to before me this third \ day of February, 1909. / Samuei, T. Harding, NOTARIAL \ Notary Public in and for SEAL. J the County of New York. Note. — If the corporation owns real estate, which is subject to a mort- gage, but is not personally liable for the debt thereby secured, such debt cannot be deducted. In this case it is permitted to include in the gross assets the value of the corporation's equitable interest in the real estate in- stead of its entire value, but in such case no more than a like proportion of the assessed value may be deducted. If this course is followed, state the actual value, the equity and the assessed value. The sum to be deducted is that percentage of the assessed value which the equity is of the actual value. No tax bills are sent out when the tax falls due. They may be obtained by application to the tax department, how- ever, at any time after the first Monday in October. (See Part III, Table 5, "Corporate Calendar," for date of payment of taxes and penalties for delay. ) CHAPTER XXVI. STATUTORY FORMS. (i) Application for Admission to State by Foreign Corporations. Form 69, — Statement and Designation of Agent. Foreign Cor- poration. SWISS-AMERICAN CHOCOLATE COMPANY. Statement and Certificate of Designation. The Swiss-American Chocolate Company, a foreign corporation or- ganized under the laws of the State of Delaware, applying under the pro- visions of Section 16 of the General Corporation Law for a certificate of authority to do business in the State of New York, does hereby make a statement and designation under its corporate seal as follows: First. The business or objects in which said corporation is engaged, and which it purposes to carry on in the State of New York, are as follows : To prepare, manufacture, buy, sell and generally deal in chocolate, soluble chocolate, chocolate products and preparations and other foods, food products and beverages and materials used therein and in con- nection therewith, and to do all lawful things convenient and necessary in connection with the said business. Second. Its principal place of business within the State of New York is at No. 148 Chambers Street, in the City and County of New York. Third. The person within the State of New York upon whom sum- mons upon this corporation may be served, or other process or paper, commencing a special proceeding against the corporation before a court or officer, except a proceeding to punish for contempt, or where special pro- vision for the service thereof is otherwise made by law, is Sherman Good- win, and his office is situated at No. 170 Broadway, in the said City, County and State of New York. 276 STATUTORY FORMS. 2^7 Fourth. The written consent of the said Sherman Goodwin, the per- son herein designated, and a sworn copy of the Certificate of Incorpora- tion of the Swiss-American Chocolate Company, are hereunto annexed. Dated New York, February 26, 1909. Swiss-American Chocolate Company, /corporate \ By Benj. Abbott, t- SEAL. J President. Attest Seal: Henry Overmann, Secretary. State of Delaware, 1 County of Newcastle. / '^■^' " On the 26th day of February, in the year 1909, before me personally came Benj. Abbott, to me known, who, being by me duly sworn, did depose and say that he resides in Philadelphia, Pennsylvania; that he is the presi- dent of the Swiss-American Chocolate Company, the corporation described in and which executed the foregoing statement and designation; that he knows the seal of said corporation ; that the seal affixed to said instrument is such corporate seal; that it was so affixed by order of the board of directors of said corporation, and that he signed his name thereto by like order. Charles G. GuyerE, Commissioner of Deeds for the State of New York. (See § 180; also G. C. L., § 16.) In the form given the acknowledgment was taken be- fore a New York commissioner of deeds resident in Dela- ware. In such case, no certificate showing his authority to take the acknowledgment is necessary. If, however, it were taken before a Delaware notary, the latter's authority must be shown by proper certificate from the county clerk, or other officer authorized thereto. To the statement and designation must be annexed the consent of the designated agent. This is as follows : Form 70. — Consent of Ag«nt. Foreign Corporation. Consent op Sherman Goodwin TO Designation. I hereby consent to my designation as the person within the State of New York upon whom summons against the Swiss-American Chocolate 278 NEW YORK CORPORATIONS. Company may be served, or other process or paper, commencing a special proceeding against the said corporation before a court or officer, except a proceeding to punish for contempt, or where special provision for the service thereof is otherwise made by law. In Witness Whereof, I have hereunto set my hand this 27th day of February, 1909. Sherman Goodwin. State of New York, 1 . County of New York, j■•^■^■ On this 27th day of February, 1909, before me personally came Sher- man Goodwin, to me known and known to me to be the individual de- scribed in and who signed the foregoing consent, and acknowledged to me that he executed the same. William S. Petty, Commissioner of Deeds No. 3, New York City. (See'd'clVi'ie.) ''" A sworn copy of the charter or certificate of incorpora- tion in the English language must be attached to the "State- ment and Designation." This copy of the charter need not be certified by the Secretary of State of the home state, but must in all cases be sworn to by one of the officers of the cor- poration. This affidavit should be on the same sheet as the certificate or be attached to it. The form of affidavit may be as follows : Form 71. — Affidavit to Certificate of Incorporation. Foreign Corporation. State of Delaware, 1 County of Newcastle. /•^•^•• Henry Overmann, being duly sworn, deposes and says that he is the Secretary of the Swiss-American Chocolate Company, a corporation or- ganized under the laws of the State of Delaware and that the foregoing instrument is a true and correct copy of the Certificate of Incorporation of said corporation. Henry Overmann. Sworn to before me this 26th \ day of February, 1909. / Charles G. GuyerE, Commissioner of Deeds for the State or New York. (For fees, see Part III, tables 2 and 4.) STATUTORY FORMS. 279 The application, consent of agent and sworn copy of the charter should be sent to the Secretary of State, accompanied by the required fees. (See § i8o.) If they are in proper form, he will issue a certificate of authority. (2) Agency Changes. Foreign Corporation. Form 72.— -Revocation and New Designation of Agent. Foreign Corporation. WATSON TYPEWRITER COMPANY. Revocation and New Designation oe Agent. The Watson Typewriter Company, a stock corporation organized under the laws of the State of West Virginia, hereby certifies : That said corporation has heretofore designated Wallis Cook as its agent to receive personal service of summons upon the said corporation within the State of New York. That said corporation does hereby, in accordance with the provisions of Section 16 of the General Corporation Law, revoke and recall the said designation, and, in place and stead of the said Wallis Cook, does hereby designate Henry R. Armour, whose written consent to such designation is hereto annexed, as the person within the State of New York upon whom summons or other process commencing a special proceeding be- fore any court or officer may be served, except a proceeding to punish for contempt and except where special provision for the service thereof is otherwise made by law. That the office of the said Henry R. Armour is at ,393 Canal Street, in the City and State of New York, the place where said corporation has its principal place of business within the State. Dated New York, March 23, igog. Watson Typewriter Co., f CORPORATE \ By Frank Walthew, l seal. ) President. Attest Seal: Horace D. Manning, Secretary. (Acknowledgment as in Form 6g.) (See G. C. L.. § 16.) This must be filed with the Secretary of State. No fees are required. The consent of the designated agent, as in Form 70, must be attached. 28o NEW YORK CORPORATIONS. Form 73. — Revocation of Agent's Consent. Foreign Corpora- tion. Revocation of Consent TO Designation. I, John G. Mackay, heretofore on the loth day of August, 1906, duly designated by certificate and my written consent thereto, filed in the office of the Secretary of State, as the person upon whom summons or process against the Trenton Ceramic Corporation, a corporation organized under the laws of New Jersey, may be served within the State of New York, do hereby, as provided in Section 16 of the General Corporation Law, recall, revoke and annul my said consent to said designation. In Witness WheeEoi?, I have hereunto set my hand this isth day of March, 1909. John G. Mackay. State oe New York, \ County of New York. J*'^" On this 15th day of March, 1909, before me personally came John G. Mackay, to me known and known to me to be the individual described in and who signed the foregoing revocation of consent, and acknowledged to me that he executed the same. John H. Franklin, f notarial 1 Notary Public in and \ seal, J for New York County This revocation must be filed in the office of the Secretary of State. No fees are required. Form 74. — Certificate of Change of Office. Foreign Corpora- tion. BELLEVILLE REALTY CORPORATION OE New Jersey. Certificate of Change of New York Office. I, Ernest Bryan, heretofore on the 9th day of July, 1907, duly desig- nated by certificate filed in the office of the Secretary of State as the person upon whom summons or process against the Belleville Realty Corporation of New Jersey may be served within the State of New York, STATUTORY FORMS. 281 do hereby certify that I have removed my office from 165 Broadway, New York, the location specified in the said certificate, to 203 Broadway in the same City, and that from and after the date of this present instru- ment, summons or process against the said Belleville Realty Corporation may be served upon me as the designated agent of said corporation, in my said office at 203 Broadway, New York. In Witness Whereof, I have hereunto affixed my hand and seal this 30th day of January, 1909. Ernest Bryan, [l. s.] State of New^ York, "I County of New York. J •^•^- "' On this 30th day of January, 1909, before me personally appeared Ernest Bryan, to me known and known to me to be the individual de- scribed in and who executed the foregoing certificate and acknowledged to me that he executed the same for the uses and purposes therein set forth. John B. McConnell, /notarial') Notary Public, I SEAL. J New York County. This certificate must be filed in the office of the Secretary of State. No filing fees. (3) Charter Amendments. Form 75. — Change of Name. Resolution of Directors Au- thorizing Change. Resolved, That the corporate name of this Company be changed from "Cranford Publishing Company" to the "Royston Press Company" and that due application be made to the Supreme Court for authority therefor and that the President and Counsel of the Company be empowered to do all things requisite to effect such change. The procedure for change of name is formal and some- what complicated. It will be found outlined in detail in §72, subdiv. i. Form 76. — Change of Name. Publication Notice. Notice is Hereby Given that the Cranford Publishing Company, a domestic corporation, having its principal office in the Borough of Man- 282 NEW YORK CORPORATIONS. hattan. City, County and State of New York, will apply to the Supreme Court of the State of New York, at a Special Term, Part I thereof, to be held in the County Court House in the County and City of New York, on the 1st day of March, 1909, at 10.30 o'clock in the forenoon of that day, or as soon thereafter as counsel can be heard, for an order authorizing said corporation to change its corporate name to Royston Press Company. Dated New York, January 15, 1909. Cranford Publishing Company, By James Bxibr, President. Holmes & Churchill, Attorneys for Petitioner, 100 Broadway, New York City. (See § 72, subdiv. i for publication requirements.) Form 77. — Change of Name. Petition. Supreme Court, New York County. In the Matter of the Application of the Cranford Publishing Company for authority to change its name to the name of "Royston Press Company." To THE Supreme Court, New York County : The petition of the Cranford Publishing Company respectfully shows to this court as follows : That it is a domestic stock corporation incorporated under the Busi- ness Corporations Law of the State of New York and having its prin- cipal office and place of business in the Borough of Manhattan, in the City, County and State of New York. That it is engaged in the buying, selling, printing, publishing and dealing generally with books, periodicals, papers and printed matter and material of all kinds and descriptions. That its present name is the Cranford Publishing Company. That it prays that it may be authorized to adopt the name of the Royston Press Company. That there are in adjoining states sundry printing houses having trade names nearly resembling petitioner's present name, and such simi- larity of names causes confusion and business loss. That, as evidenced by the certificate of the Secretary of State annexed hereto, the name Royston Press Company is not the name of any other corporation incorporated or authorized to do business in this State, nor so nearly resembling it as to be calculated to deceive. That this application has been duly authorized by resolution of the STATUTORY FORMS. 283 petitioner's board of directors adopted at a regular meeting held in the principal office of the corporation on the 9th day of January, 1909. Dated February 27, 1909. Cranford Publishing Company, f CORPORATE 1 By James Burr, I SEAL. J President. Holmes & Churchill, Attorneys for Petitioner, Office and P. O. Address, 100 Broadway, Borough of Manhattan, New York City. State of New York, 1 County of New York. / •^•^■• James Burr, being first duly sworn, deposes and says, that he is the president of the Cranford Publishing Company, the petitioner above named; that he has read the foregoing petition, and knows the contents thereof; that the same is true of his own knowledge; that the seal affixed to said petition is the corporate seal of the said Company and was affixed thereto by order of the board of directors of said Company and that he signed said petition on behalf of said Company, by the like order. James Burr. Sworn to before me this 27th day of February, 1909. Malcolm Cuthbert, / notarial \ Notary Public for I seal, i New York County, No. 79. (See G. C. L., §§ 60-64.) The order changing the name (Form 78) is filed and re- corded in accordance with its terms in the office of the county clerk, and a certified copy thereof filed in the office of the Sec- retary of State. Fees to county clerk, 6 cents for filing, 10 cents per folio for recording and 8 cents per foho for certi- fied copy. No fees to Secretary of State for filing. Affida- vit of publication is filed and recorded in the office of the Secretary of State — recording fees, 15 cents per folio — and also in the office of the county clerk. Fees to county clerk; filing 6 cents; recording, 10 cents per folio. (See § 721; also Form 98 for form of affidavit.) 284 NEW YORK CORPORATIONS. Form 78. — Change of Name. Order. At a Special Term of the Su- preme Court of the State of New York, held at Part I thereof, in the County Court House, in the Borough of Manhattan, City of New York, on the 1st day of March, 1909. Present : Hon. James Fitzgerald, Justice. In the Matter of the Application of the Cranford Publishing Company for authority to change its name to the name of "Royston Press Company." Upon reading and filing the petition of the "Cranford Publishing Company,'' a domestic stock corporation, duly verified by James Burr, its president, wherein said petitioner prays for an order authorizing it to as- sume another corporate name, to wit, "Royston Press Company" and upon filing the certificate of the Secretary of State annexed thereto, certifying that the name which said corporation proposes to 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, and upon filing due proofs by. affidavits, showing that notice of the presentation of said petition has been duly published for three weeks in the "New York Times" and in the "Evening Post," both of which are newspapers published in the City and County of New York, in which city and county such corporation has its principal office, and the court being satisfied by said petition and by the affidavits and certificate presented therewith, that the petition is true, and that there is no reasonable objection to the change of name proposed, and that the petition has been duly authorized and that notice of the presentation of the petition, as required by law, has been made; Now, on motion of Holmes & Churchill, attorneys for said petitioner, no one opposing, it is Ordered, that said petition be, and the same hereby is granted, and that the "petitioner herein, the Cranford Publishing Company, be and it hereby is authorized to assume another corporate name, to wit, the name "Royston Press Company" on and after the i6th day of April, igog; and it is further ordered and directed that this order be entered and the papers on which it is granted be filed, within ten days from the date hereof, in the office of the Clerk of the County of New York, the county in which the certificate of incorporation of said corporation is filed, and that a certified copy of this order, within ten days after the entry thereof, be filed in the office of the Secretary of State ; and further that a copy of this order be published once a week for four successive weeks in the "New York Law Journal," beginning within ten days after the entry hereof. Enter (See G. C. L.. §§ 60-64.) STATUTORY FORMS. 285 Form 79. — Change of Principal OfSce. Written Consent of Stockholders. STANFORD STOVE COMPANY. Change of Principal Office. We, the undersigned, being all of the stockholders of the Stanford Stove Company, duly incorporated under the Business Corporations Law of the State of New York, hereby agree and consent that the principal office and place of business of said corporation be changed from its original location in the Borough of Manhattan, in the City, County and State of New York, to the City of Newburgh, County of Orange and State of New York. In Witness Whereof, we have hereunto affixed our signatures this isth day of March, igog. William B. Anderson, owning 20 Shares. Jas. C. Caldwell, " 20 " Jackson Powers, " 10 " John Ames Morris, " 20 " Warren V. Allan, " 50 " Thos. S. Powell, " 20 " Charles C. Bowen, " 10 " State of New York, \ County of New York, i'^-'-- On this iSth day of March, 1909, before me personally came Wil- liam B. Anderson, Jas. C. Caldwell, Jackson Powers, John Ames Morris, Warren V. Allen, Thos. S. Powell and Charles C. Bowen, to me known and known to me to be the individuals described in and who executed the foregoing instrument, and they severally acknowledged to me that they executed the same. Howard Magnon, f NOTARIAL \ Notary Public in and for I SEAL, i New York County. State of New York, \ County of New York./^"'" Robert R. McNeil, being duly sworn, deposes and says that he is the Secretary of the Stanford Stove Company, the corporation mentioned in the foregoing instrument; that he has charge of the stock book of the said corporation, and that William B. Anderson, Jas. C. Caldwell, Jackson Powers, John Ames Morris, Warren V. Allen, Thos. S. Powell and Charles C. Bowen, the individuals whose names are signed to the fore- going instrument, are the holders of the entire outstanding stock of the corporation. Robert R. McNeil, Secretary. Sworn to before me this iSth day \ of March, 1909. / Howard Magnon, /notarial \ Notary Public in and for 1 seal. J New York County. (See § 72f.) 286 NEW YORK CORPORATIONS. This consent is filed in the office of the Secretary of State. No fees. The following certificate is in pursuance of the duly filed consent. (See S. C. L., § 13.) Form 80. — Change of Principal Office. Certificate of Removal. STANFORD STOVE COMPANY. Certificate oe Change of Place of Business. Under Section 13 of the Stock Corporation Law. We, the undersigned, the President and Secretary and a majority of the Directors of the Stanford Stove Company, a domestic stock corpora- tion, for the purpose of changing the principal office and place of business of said corporation, do hereby certify and set forth as follows: 1. The name of said corporation is "Stanford Stove Company." 2. The principal office and place of business was originally located in the Borough of Manhattan, City, County and State of New York and the same has not heretofore been changed. 3. It is desired to change its principal office and place of business to the City of Newburgh, County of Orange and State of New York. 4. It is the purpose of said corporation to actually transact and carry on its regular business from day to day at such place. 5. Such change of the principal office and place of business has been authorized by the unanimous consent of the stockholders expressed in writing, duly acknowledged and filed in the office of the Secretary of State. 6. The names of the directors of said corporation and their respective places of residence are as follows: William B. Anderson, Rutherford, N. J. Jas. C. Caldwell, 119 West 79th St., New York. Jackson Powers, 8 West 126th St., New York. John Ames Morris, 55 2d Ave., Williamsburg, N. Y. Thos. S. Powell, Great Neck, L. I., N. Y. In Testimony Whereof, we have hereunto affixed our names, this i8th day of March, 1909. William B. Anderson, President. Robert R. McNeil, Secretary. Jas. C. Caldwell, John Ames Morris, Thos. S. Powell, Directors. State of New York, \ County of New York. /"■■' William B. Anderson, Robert R. McNeil, Jas. C. Caldwell, John Ames Morris and Thos. S. Powell, being severally duly sworn, do depose and STATUTORY FORMS. 287 say, and each for himself says, that the said William B. Anderson is the President of the Stanford Stove Company, that the said Robert R. McNeil IS the Secretary of said Company, and that Jas. C. Caldwell, John Ames Morris and Thos. S. Powell are a majority of the directors of said Com- pany; that he has read the foregoing certificate and knows the contents thereof, and that the same is true. William B. Anderson. Robert R. McNeil. Jas. C. Caldwell. John Ames Morris. Thos. S. Powell. Sworn to before me this i8th \ day of March, 1909. J Frank W. Howard, /notarial 1 Notary Public for I seal. J New York County. This certificate is executed in triplicate. One copy is filed with the Secretary of State, one with the clerk of the county from which the removal is made and one in the office of the county clerk of the new location. County clerks' fees are in each case 6 cents for filing and lo cents per folio for recording. Fee to Secretary of State, 15 cents per folio for recording. (See §§ y2i, 134.) If the removal is authorized by vote of the stockholders at a meeting, the following paragraphs take the place of paragraph 5 in the preceding form: Form 81. — Change of Principal Office. Vote of Stockholders. 5. Such change of the principal office and place of business has been authorized by a vote of the stockholders of said corporation at a special meeting of stockholders called for that purpose and held in the principal office of the corporation in the Borough of Manhattan, in the City of New York, on the 15th day of March, 1909, at which meeting holders of more than a majority of the outstanding stock of the corporation being present in person or by proxy, the following resolution was duly moved and seconded and adopted by a majority vote of the stock of the corporation: Resolved, That the principal office and place of business of the Stanford Stove Company be removed from the Borough of Manhattan, New York City, to the City of Newburgh, County of Orange and State of New York, and that the officers and directors of this corporation are authorized and instructed to carry this resolution into eflfect. 288 NEW YORK CORPORATIONS. Form 82. — Classification of Stock. Publication Notice. Notice of SphIcial Meeting. New York, Feb. 16, 1909. A special meeting of the stockholders of the Grayson Milling Com- pany will be held in the office of the Company, 56 Broad Street, New York City, March 2, 1909, at 3.50 P. M., for the purpose of acting upon a proposition to classify the capital stock of the corporation into common and preferred stock so that its authorized capital stock of One Hundred Thousand Dollars ($100,000), now consisting of One Thousand (1,000) Shares of common stock of the par value of One Hundred Dollars ($100) each, shall consist of Five Hundred (500) Shares of common stock and Five Hundred (500) Shares of preferred stock, all of the par value of One Hundred Dollars ($100) each, said preferred stock to bear a cumu- lative preferential annual dividend of six per cent., and to be redeemable at par at the discretion of the corporation ten years from date of issue By order of the Howard Grayson, Board of Directors. Secretary. (See S. C. L., § 61!) The notice of meeting for classification of stock must be published once each week for two weeks preceding the date of meeting in a paper published in the county of the principal office. In addition, such other notice must be given as is pre- scribed by the by-laws for the annual meeting. (See §§ 72g, 77-) Form 83. — Classification of Stock. Certificate. GRAYSON MILLING COMPANY. Certificate of Classification of Stock. Under Section 61 of the Stock Corporation Law. We, the undersigned, Horace G. Maxwell and Howard Grayson, respectively President and Secretary of the Grayson Milling Company, a corporation organized under the laws of the State of New York, do certify as follows : That the authorized capital stock of said corporation is One Hun- dred Thousand Dollars ($100,000), divided into One Thousand (1,000) Shares of common stock of the par value of One Hundred Dollars ($100) each; and that of said capital stock Five Hundred (soo) Shares are issued and Five Hundred (Soo) Shares are unissued. STATUTORY FORMS. 289 That a special meeting of stockholders to act upon a proposition to classify the stock of tlie corporation into common and preferred stock was called upon notice mailed to each stockholder of the company at his last known post-office address at least ten days before the date of said meeting, and published in the "New York Times," a newspaper published in the county in which the principal office of the company is located, at least once a week for two successive weeks immediately preceding such meeting, the notice given being such as is' required for the annual meet- ing of the corporation. That the following is a true copy of the said notice : (Insert Notice, Form 8z.) That at the designated time and place, stockholders holding more than two-thirds of the outstanding stock of the corporation assembled in per- son or by proxy. That due notification of the meeting, as above set forth, was proven by presentation of copies of the "New York Times" under date of Febru- ary i6th and 23rd containing the above notice, and by the affidavit of the Secretary as to service of said notice by mail. That the following resolution was then presented for the consideration of the meeting: "Resolved, That the capital stock of the Company, now consist- ing of One Thousand (1,000) Shares of common stock of the par value of One Hundred Dollars ($100) each, of which Five Hundred (500) Shares are issued and outstanding, and Five Hundred (500) Shares are unissued, be classified into common and preferred stock, of each an equal amount. "That the Five Hundred (soo) Shares of unissued stock shall be the preferred stock so created, the issued stock remaining com- mon stock without preference, as before. "That the said Five Hundred (Soo) Shares of unissued pre- ferred stock shall be entitled to receive a cumulative preferential divi- dend of six per cent, per annum, payable each year out of net earn- ings before any dividend is paid upon the common stock of the Com- pany, but not entitled to any further share of the Company profits. "That said preferred stock shall, at the option of the Company, be redeemable at its par value at any time after ten (10) years from the date of its issue." That upon vote thereon, said resolution received the favorable vote of Three Hundred and Seventy-five (.375) Shares of the capital stock, being more than two-thirds of the outstanding stock of the Company, and was thereupon declared duly adopted. In Witness Whereof, we have made and signed this certificate in duplicate, this 3d day of March, 1909. Horace G. Maxwell, President. Howard Grayson, Secretary. State of New York, 1 . County of New York. / ^" Horace G. Maxwell and Howard Grayson, being duly sworn, do de- pose and say, each for himself, that said Horace G. Maxwell is Presi- dent and said Howard Grayson is Secretary of the Grayson Milling Com- pany, the corporation mentioned in the foregoing certificate of proceed- 290 NEW YORK CORPORATIONS. ings at a special meeting of the stockholders thereof; that he was present at such special meeting; that he has read the foregoing certificate and knows the contents thereof and that the same is true. HoRAce G. Maxwell. Howard Grayson. Sworn to before me this 3rd day \ of March, 1909. J Ralph P. FairchilDj /notarial 1 Notary Public for I SEAL. J New York County. (S."c.'l.','§ 61'.)"" This certificate must be filed and recorded as was the original certificate of incorporation. Recording fees to Secre- tary of State, 15 cents per folio; to county clerk, 10 cents per folio. Filing fee to county clerk, 6 cents. Form 84. — Increase of Stock. By Unanimous Consent. THE STANLEY PRESS COMPANY. Unanimous Consent of Stockholders to Increase OF Capital Stock. We, the undersigned, being all of the stockholders of The Stanley Press Company, a domestic stock corporation, hereby agree and consent that the capital stock of said corporation shall be increased from Twenty Thousand Dollars ($20,000) divided into Two Hundred (200) Shares of the par value of One Hundred Dollars ($100) each, to a capital stock of Thirty Thousand Dollars ($.-?o,ooo) divided into Three Hundred (300) Shares of the par value of One Hundred Dollars ($100) each, and we here- by authorize and empower the proper officers of the Company to do all things necessary to effect the same, and we do certify and set forth : I. That the amount of capital stock heretofore authorized is $20,000 divided into 200 shares of the par value of $100 each, and that all of said capital stock has been issued. II. That the amount to which the capital stock is increased is $30,000 divided into 300 shares of the par value of $100 each. In Witness Whereof, we have executed this instrument in dupli- cate this l8th day of February, 1909. Andrew Matson, owning 50 Shares. Thomas O'Kane, " 10 " William O'Mallory, " 30 " Frank C. Farley, " 30 " Walter Moffatt, " 30 " Chas. a. Ulrich, " 25 " Bernard Suydam, " 25 " }' STATUTORY FORMS. 29 1 State of New York, County of New York. On this i8th day of February, 1909, before me personally came Andrew Matson, Thomas O'Kane, William O'Mallory, Frank C. Farley, Walter Moffatt, Chas. A. Ulrich, and Bernard Suydam, to me known and known to me to be the individuals described in and who executed the foregoing instrument, and they severally acknowledged to me that they executed the same. Dan'l Duncan, f NOTARIAL \ Notary Public in and for I SEAL. J New York County. State of New York, \ County of New York, f^-^-' Harry B. Elkins, being duly sworn, deposes and says that he is the Secretary of The Stanley Press Company, the corporation mentioned in the foregoing instrument ; that he has charge of the stock book of the said corporation and that Andrew Matson, Thomas O'Kane, William O'Mallory, Frank C. Farley, Walter Moflfatt, Chas. A. Ulrich and Bernard Suydam, the individuals whose names are signed to the foregoing instru- ment, are the holders of the entire outstanding stock of the corporation. Harry B. Elkins, Secretary. Sworn to before me this i8th \ day of February, igog. / Bernard McFarlane, /notarial "I Notary Public for \ SEAL. / New York County. (See § 86; also S. C. L., §§ 63, 64.) This certificate is executed in duplicate. One copy is sent to tlie Secretary of State together with recording fees of 15 cents a folio. At the same time the state tax of 50 cents per $1,000 of increase must be sent direct to the State Treas- urer. The duplicate copy of the certificate, together with the Treasurer's receipt, is filed with the clerk of the county where the principal office is situated. The fees are 6 cents for filing and 10 cents per folio for recording. The increase of stock is efifective from the time the certificate of consent is filed. (S. C. L., § 64.) If the stock is reduced, a third paragraph must be added to the certificate, showing the total corporate indebtedness and each copy must be accompanied by the certificate of the State Comptroller to the efifect that he considers the reduced 292 NEW YORK CORPORATIONS. capital sufficient for the corporate purposes. Fee to State Comptroller for each certificate, $1. (See § 72, "Amend- ments.") When the capital stock of the corporation is increased, and the whole or a portion of this increase is to be preferred stock, the increase and classification may be effected at the one meeting, as in the following case. (See S. C. L., §§ 61,63,64.) Form 85. — Increase and Classification of Stock. AUTOMATIC LAMP COMPANY. Certificate of Increase and Classification of Capital Stock. We, the undersigned, Robert Morrison and James Bostwick, respect- ively Chairman and Secretary of a special meeting of the stockholders of the Automatic Lamp Company, a domestic corporation, held May lo, igOQ, for the purpose of increasing its capital stock, and Frank L. Sullivan and Horace K. Jessup, respectively President and Secretary of the said Company, do certify as follows : That the authorized capital stock of this Company is Ten Thousand Dollars ($10,000), divided into One Hundred (100) Shares of common stock of the par value of One Hundred Dollars ($100) each, all of which has been actually issued. That a notice of a special meeting of stockholders was duly published in the "New York Sun," a newspaper published in the county where the principal office of the Company is situated, at least once a week for two successive weeks before the date fixed for such meeting, that said notice was duly signed by the' President and Secretary of the Company and that the following is a true copy thereof: "A special meeting of the stockholders of the Automatic Lamp Company will be held at the office of the Company at No. 190 Broad- way, New York City, on May lo, 1909, at 3 o'clock P. M., to vote upon a proposition to increase the capital stock of this Company from Ten Thousand Dollars ($10,000), consisting of One Hundred (100) Shares of common stock of the par value of One Hundred Dollars ($100) each, to Twenty Thousand Dollars ($20,000), con- sisting of Two Hundred (200) Shares of the par value of One Hun- dred Dollars ($100) each, said increase to consist of Fifty (50) Shares of common stock and Fifty (50) Shares of preferred stock having a preferential cumulative dividend of six per cent." And further that said notice was served personally in accordance with the requirements of § 63 of the Stock Corporation Law, at least five days before such meeting, on each stockholder of record. That stockholders, in person or by proxy, representing at least two- thirds of the capital stock, having assembled pursuant to said notice, the STATUTORY FORMS. 293 meeting was duly organized, the said Robert Morrison being chosen as Chairman and the said James Bostwick as Secretary, both being stock- holders of the Company. That due notification of said meeting to the stockholders of the Com- pany was proven by presentation of a copy of the aforesaid notice, together with proof of publication and personal service of the same. That the following resolution was presented and having received the favorable vote of Ninety (go) Shares of the capital stock, being more than two-thirds thereof, was declared duly adopted. "Resolved, That the capital stock of the Company be increased from its present amount of Ten Thousand Dollars ($10,000), con- sisting of One Hundred (100) Shares of the par value of One Hun- dred Dollars ($100) each, to Twenty Thousand Dollars ($20,000), con- sisting of Two Hundred (200) Shares of the par value of One Hun- dred Dollars ($100) each. "That said increase of capital stock amounting to Ten Thousand Dollars ($10,000), be so classified that Five Thousand Dollars ($5,000), consisting of Fifty (50) Shares of the par value of One Hundred Dol- lars ($100) each sh.all be common stock and the remaining Fifty (50) Shares shall be preferred stock entitled to preference and priority over the entire common stock of said Company as follows : "The holders of the said Fifty (50) Shares of preferred stock shall be entitled to receive a cumulative preferential dividend of six per cent, per annum, payable each year out of the net earnings of the Company before any dividend is paid to the common stock of the Company. "The holders of said preferred stock shall not be entitled to any further share in the profits of the Company after having received the said six per cent, preferential dividend. "That the amount of the capital stock as increased is Twenty Thousand Dollars ($20,000), divided into Two Hundred (200) Shares of the par value of One Hundred Dollars ($100) each." In Witness Whereof, we have made and signed this Certificate in duplicate this loth day of May, igop. Robert Morrison, Chairman of Meeting. James Bostwick, Secretary of Meeting. Frank L. Sullivan, President Automatic Lamp Co. Horace K. Jessup, Secretary Automatic Lamp Co. State of New York, "1 . County of New York. ;•^■^■• Robert Morrison, Chairman, and James Bostwick, Secretary, being severally duly sworn, each for himself, deposes and says that he has read the foregoing certificate subscribed by him and knows its contents, and that the same is true. Robert Morrison. James Bostwick. Sworn to before me this loth \ day of May, igog. I Henry Gorham, f notarial 1 Notary Public for \ seal J New York County. 294 NEW YORK CORPORATIONS. State of New York, \ . County of New York. J On this loth day of May, 1909, before me personally appeared Robert Morrison and James Bostwick, to me known and known to me to be the individuals described in and who executed the foregoing certificate and ac- knowledged to me that they executed the same. Henry Gorham, r NOTARiAi, \ Notary Public for I SEAL. / New York County. State oe New York, 1 County of New York. J "•• Frank L. Sullivan and Horace K. Jessup, being severally duly sworn, do depose and say, each for himself, that said Frank L. Sullivan is Presi- dent and said Horace K. Jessup is Secretary of the Automatic Lamp Com- pany, the corporation mentioned in the foregoing certificate of proceedings at a special meeting of the stockholders thereof; that he was present at such special meeting; that he has read the foregoing certificate and knows the contents thereof and that the same is true. Frank L. Sullivan. Horace K. Jessup. Sworn to before me this loth \ day of May, 1909. J (■notarial \ Ralph P. Fairchild, I SEAL. J Notary Public for New York County. (See §§ 72b, g, and 77; also S. C. L., §§ 61. 63, 64.) This certificate is executed in duplicate; one copy is filed and recorded in the office of the Secretary of State — record- ing fee, 15 cents per folio — and one copy in the office of the county clerk, with filing fee of 6 cents and recording fee of 10 cents per folio. Tax to State Treasurer, 50 cents on each $1,000 of increased capital. The increased capitalization is secured as soon as the certificate has been duly filed. (S. C. L., § 64.) If notice is served by mail, such notice must be mailed at least two weeks before the meeting, and paragraph 5 of Form 85 concerning notice must be changed to correspond with the facts. (See § loi (e), "Notice of Meeting to In- crease or Decrease Capital Stock.") The above form is somewhat complicated by the fact that a portion of the increase of stock is preferred and the cer- STATUTORY FORMS. 295 tificate must therefore not only conform to the requirements of a certificate of increase of stock, but of classification of stock as well. If the certificate were merely for increase of stock, the participation of the president and secretary of the company would not be necessary, — unless they acted as the officers of the stockholders' meeting, — all statements as to the preferred stock would be omitted, and the stock vote required would be merely a majority instead of two-thirds. Form 86. — Increase of Number of Directors. Notice of Meet- ing. MODERN REALTY CORPORATION. NoTice OF Meeting to Increase Number of Directors. Notice is hereby given that a Special Meeting of the Stockholders of the Modern Realty Corporation will be held in the office of the Corporation, No. 1 13s Broadway, New York City, at 4 o'clock P. M., on the 4th day of March, 1909, to vote upon a proposition to increase the number of direc- tors of said Corporation from Five to Seven. Theodore Stanton, New York City, Secretary. February 17, 1909. (See §§ 726, 113; also S. C. L., § 26.) This notice must be served on the stockholders either personally or by mail two weeks before the time of meeting. (S. C. L., § 26.) Proof of service of notice must be filed in office of corporation at or before the time of meeting. This proof of service is as follows : Form 87. — Increase of Number of Directors. Proof of Service. State of New York, \ County of New York, i■•^•'•■ Theodore Stanton, being duly sworn, deposes and says that he is the Secretary of the Modern Realty Corporation, the corporation mentioned in the foregoing notice, and that on the 17th day of February, 1909, he served 296 NEW YORK CORPORATIONS. said notice on each and every stockholder of said Corporation by mailing to the last known post-office address of each of said stockholders a copy of said notice in writing, securely sealed and the postage prepaid. Theodore Stanton. Sworn to and subscribed before me this \ l8th day of February, 1909. J George Williams, f N.0TARIAL \ Notary Public, I SEAL, i New York County. Form 88. — Increase of Number of Directors. Transcript of Proceedings. MODERN REALTY CORPORATION. Increase oe Number of Directors. TRANSCRIPT OF MINUTES OF MEETING. The stockholders of the Modern Realty Corporation met in the office of the corporation. No. 1135 Broadway, New York City, at 4 o'clock P. M., on the 4th day of March, 1909, for the purpose of acting upon a propo- sition to increase the number of directors from iive to seven. The President of the Corporation, Mr. Josiah Thompson, presided, and Mr. Theodore Stanton, the Secretary of the Corporation, acted as Sec- retary of the Meeting. The following stockholders, each owning the number of shares set oppo- site his name, were present in person: name. no. of shares. Josiah Thompson 70 Stephen Ransom 20 John J. McHugh 30 M. M. Vail 10 William Daly 10 James Mullin 10 Total 150 Shares not represented 50 Total of shares issued and outstanding .... 200 More than a majority of the entire stock of the corporation being represented, the meeting proceeded. Mr. Stanton presented the notice of the meeting accompanied with his affidavit that he had duly served the said notice by addressing and mailing a copy thereof to the last known post-office address of every stockholder of the corporation at least two weeks prior to the date of the meeting. Said notice and affidavit were ordered received and filed. The President then stated that the meeting was ready to vote upon the question for which it had been called, whereupon on motion of John STATUTORY FORMS. 297 offemi^"^'^' ^^'^°"'^^'^ ^^ J^"^^ MuUin, the following resolution was Resolved That the number of directors of the Modern Realty L-orporation be increased from five (5) to seven (7). Upon motion the resolution was adopted by the unanimous vote of all present, the stock voted in favor thereof being more than a majority of the total outstanding stock of the corporation. Whereupon there being no further business requiring transaction, the meetmg was adjourned. Theodore Stanton, JosiAH Thompson, President. State of New York, \ County of New York. J "• ■' Josiah Thompson and Theodore Stanton, being first duly sworn, de- pose and say, and each for himself deposes and says, that the said Josiah Thompson is the President and the said Theodore Stanton is the Secretary of the Modern Realty Corporation, and each acted in his official capacity at the meeting of the stockholders thereof, held on the 4th day of March, 1909, to determine whether the number of directors should be increased from five to seven; and that the foregoing is a correct transcript of the proceedings of such meeting as shown by the minutes thereof. Josiah Thompson, President. Theodore Stanton, Secretary. Sworn to before me this 4th day \ of March, 1909. i George Williams, f notarial \ Notary Public, I SEAL. J New York County. (See S. C. L., § 26.) This verified transcript must be filed and recorded with the Secretary of State — recording fees, 15 cents per folio — and with the clerk of the county in which the corporation has its principal office. Clerk's fees, 6 cents for filing and 10 cents per folio for recording. An increase of directors may be effected by unanimous written consent of the stockholders without a meeting. This consent is filed in the same offices and with the same fees as is the verified transcript (Form 88) when the increase is authorized by vote of the stockholders. (See § 72e.) Its general form is as follows : 298 NEW YORK CORPORATIONS. Form 89. — Increase of Number of Directors. By Unanimous Consent. MODERN REALTY CORPORATION. Increase of Number of Directors. UNANIMOUS CONSENT OF STOCKHOLDERS. We, the undersigned, being all the stockholders of the Modern Realty Corporation, a corporation duly incorporated under the laws of the State of New York, hereby agree and consent that the number of directors of said corporation shall be increased from five (S) to seven (7). In Witness Whereof^ we have executed this instrument in dupli- cate this 4th day of March, 1909. JosiAH Thompson, owning 70 Shares. Stephen Ransom, " 20 " John J. McHugh, " 30 " M. M. Vail, " 10 William Daly, " 10 " Alice McComb, " 50 " James Mullin, " 10 " (Acknowledgment of stockholders and aKdavit of custodian of stock book as in Porm 79.) (See S. C. L.. § 26.) The procedure for decrease of the number of directors is the same as for increase, and the same forms — ^modified to meet the changed requirements — ^may be employed. (4) Elections oif Directors. Form 90. — Challenges. Oath of Voter. State of New York, 1 County of New York. J ■'■^- ' 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 anything of value to influence the giving of my vote or votes at this meeting or as a consideration therefor. Chester H. McCall. Subscribed and sworn to before me "t this 2ist day of January, 1909. J Francis H. Wolford, Inspector of Election. (See § 109; also G. C. L., § 27.) STATUTORY FORMS. 299 This oath must be taken and subscribed by any stock- holder offering to vote at an election of directors if so required by an inspector of the election, or other officer presiding at the election, or by any other member present. The oath may be administered by the inspector or other person presiding at the election, and must be filed in the office of the corporation. In case of a person offering to vote as proxy, the form of oath is as follows : Form 91. — Challenges. Oath of Proxy. State of New York, 1 County of New York./"'' I do solemnly swear that I have not, either directly, indirectly or im- pliedly, given any promise or any sum of money or anything of value to induce the giving of a proxy to me to vote at this election, or received any promise or any sum of money or anything of value to influence the giving of my vote at this meeting, or as a consideration therefor. Charles J. Allison. Subscribed and sworn to before me \ this 2ist day of January, 1909. i Francis H. Woleokd, Inspector of Election. (See § 104; also G. C. L., § 27.) This oath must be filed in the office of the corporation. A special meeting of the stockholders for the election of directors is properly called by the directors and is notified in the same manner as is the annual meeting. If the directors fail to call such meeting w^ithin one month after the annual meeting, or if such meeting is held, but results in a failure to elect, the meeting for election of directors may then be called by any stockholder. (G. C. L., §29.) The usual form of notice is employed when a special meet- ing for election of directors has been called by the board. ( See Form 41.) The form when such meeting is called by a stock- holder may be as follows : 300 NEW YORK CORPORATIONS. Form 92. — Stockholder's Notice of Special Election. ALBANY INDUSTRIAL CORPORATION. Notice is hereby given that the Directors of the Albany Industrial Cor- poration not having been elected on the day designated in the by-laws, nor within one month thereafter, a special meeting of the stockholders of said corporation is hereby called and will be held in the office of the Company, No. 27s State Street, Albany, New York, on the 25th day of March, 1909, at 12 o'clock noon, for the purpose of electing Directors of the Company and for the transaction of such other business as may properly come before the meeting. Frank H. McClblland, A Stockholder of the Albany Industrial Corporation. Albany, New York, March 8, 1909. (See § 112; also G. C. L, § 29.) For requirements as to publication and service of this notice, see § loid. In case the books of the corporation cannot be secured at any such special election, each stockholder present before voting must present a sworn statement of the stock owned by him and of the total outstanding stock of the corporation if known to him, as in the following form. Form 93. — Sworn Statement of Membership. State of New York, "1 County of Albany, j"" George H. Poster, being duly sworn, deposes and says that he is a member of the Albany Industrial Corporation; that he owns Forty-five Shares of stock therein; that said shares of stock are now standing in his name on the books of the corporation, and that the whole number of shares of stock of said corporation now outstanding is, to the best of his knowledge and belief, Twenty-five Hundred. George H. Foster. Sworn to before me this \ 2Sth day of March, 1909. J Spencer L. Tompkins, Inspector of Election. (See § 112; also G. C. L., § 31-) STATUTORY FORMS. 3OI These sworn statements must be returned and filed by the inspectors of election, together with their certificate (see Forms 46-48), in the office of the clerk of the county in which the election is held. Any person or corporation feeling ag- grieved by the conduct of or by matters connected with any election of directors may apply to the Supreme Court for relief. Form 94. — Application to Supreme Court. Review of Election. New York Supreme Court, County of New York. In the Matter of the Election of Directors of the Electro Engraving Company. To THE Supreme Court of the State of New York: The petition of James C. Rogers respectfully shows to the Court by Howard A. Butler, his attorney, and alleges : First. — Upon information and belief that the Electro Engraving Com- pany above named is a stock corporation duly organized and existing under and by virtue of the laws of the State of New York and having its prin- cipal office for the transaction of business at No. 245 Broadway, in the Borough of Manhattan in the City, County and State of New York. Second.— That on or about the twenty-fourth day of February, 1909, your petitioner became the owner in his own right of one hundred and seventy-five (175) shares of the capital stock of said corporation and at all times hereafter mentioned he has been and now is the sole owner of the same. Third. — Upon information and belief that the regularly adopted by- laws of said Electro Engraving Company provide that the annual meeting of the stockholders of said corporation for the election of directors shall be held at the principal office of the corporation on the fifteenth day of March of each year. Fourth. — Upon information and belief that the regularly adopted by-laws of said corporation provide that the board of directors of said corporation may, by resolution adopted at any regular meeting thereof, close the transfer books of said corporation for a period of not more than twenty days prior to the annual meeting of stockholders. Fifth. — Upon information and belief that on or about the twenty-fifth day of February, 1909, the board of directors of said Electro Engraving Company, at a regular meeting of said board passed a resolution declaring the transfer books of the said corporation closed on the first day of March, 1909, to remain closed until after the said annual meeting on the fifteenth day of March,' 1909. Sixth. — That prior to said first day of March, 1909, and on or about the twenty-sixth day of February, 1909, your petitioner, being the owner 302 NEW YORK CORPORATIONS. of one hundred and seventy-five shares of the capital stock of the said Electro Engraving Company as aforesaid, presented a stock certificate representing said shares and duly assigned to your petitioner, to the sec- retary of the said corporation, he being the officer designated in its by-laws for the purpose, and requested the said secretary to record the transfer cf said one hundred and seventy-five shares of capital stock represented by said stock certificate, upon the proper books of said corporation to entitle your petitioner to all of the rights and privileges of a stockholder of said Electro Engraving Company. Seventh. — Upon information and belief that said secretary did not record the transfer of said shares of capital stock as aforesaid and as requested by your petitioner, but wilfully and wrongfully neglected and failed to record the same, all of which has been greatly to the damage of your petitioner. Eighth. — That on the fifteenth day of March, 1909, the annual meeting of stockholders of the said Electro Engraving Company was held and that your petitioner as a stockholder as aforesaid attended the same and de- manded to be permitted to exercise his rights as a stockholder of said corporation. That he prepared a ballot containing his vote for directors and presented the same to the regularly constituted inspectors of election, but that they wilfully and wrongfully refused to receive the same, alleg- ing that your petitioner was not a registered stockholder according to the books of said corporation. Ninth. — Upon information and belief that at the said meeting the fol- lowing persons each received three hundred and seventy-five votes and were declared by the said inspectors of election to be the duly elected directors of said Electro Engraving Company for the ensuing year, viz.: James C. Brown, Ralph S. Jones and Richard D. Armour. Tenth. — Upon information and belief that at said meeting the follow- ing persons each received three hundred votes for the office of director, viz. : Thomas Chatfield, Henry A. Chamberlain and Arthur Du Bois. Eleventh. — That your petitioner favored the election of the said Thomas Chatfield, Henry A. Chamberlain and Arthur Du Bois for directors of said Electro Engraving Company and would have voted for each of them had he not been wrongfully prevented from so doing as aforesaid. Twelfth. — Upon information and belief that if the vote of your peti- tioner in favor of said Thomas Chatfield, Henry A. Chamberlain and Arthur Du Bois had been received, they and each of them would have been elected directors of said Electro Engraving Company instead of James C. Brown, Ralph S. Jones and Richard D. Armour who were wrongfully de- clared elected directors of said corporation as aforesaid. Thirteenth. — That by reason of all the matters above set forth your petitioner has been greatly damaged and deprived of his rights as a stockholder of the said Electro Engraving Company. Wherefore your petitioner prays the judgment of this honorable Court setting aside the said election of directors and ordering a new election at which the vote of your petitioner may be received and for such other and further relief as may to the Court appear just. Howard A. ButlEr, Attorney for the Petitioner, OflBce and P. O. Address, 154 Nassau St., New York City, Borough of Manhattan. (^Verification in due form.) (See § no; also G. C. L., § 32.) statutory forms. 3o3 (5) Dissolution. Form 95. — Dissolution without Judicial Procedure. Cer- tificate. THE GLOVERSVILLE LINEN COMPANY OF Gloversville, New York. Certieicate of Voluntary Dissolution. We, Robert W. Jackson and James E. Truesdale, respectively Presi- dent and Treasurer of the Gloversville Linen Company, a corporation or- ganized under the laws of the State of New York, do make and attest this certificate of dissolution without judicial proceedings, filing herewith proof of due publication and service of notice of stockholders' meeting, the con- sent of the stockholders thereat to dissolution of the Company, and the names and residences of the directors and officers of the Company, all as re- quired by the provisions of Section 221 of the General Corporation Law to effect dissolution without judicial proceedings; and do herein set forth: (i) That the Board of Directors of said corporation at a meeting called for that purpose upon three days' notice to each director and held pursuant thereto on the 4th day of January, ipog, at 3 o'clock P. M., did adopt the following resolution by a vote of the majority of the whole board: "Whereas, In the opinion of the Board it is advisable to dissolve the Corporation forthwith : "Therefore, Be It Resolved, That the Board of Directors recom- mends the dissolution of the Company under the provisions of Sec- tion 221 of the General Corporation Law, and hereby calls a meeting of its stockholders to be held in the office of the Company at Glovers- ville, New York, on the loth day of February, 1909, at 10 A. M., for the purpose of voting upon a proposition for immediate dissolution in accordance with the requirements of said law. "That the Secretary be hereby instructed to cause a notice of such meeting to be published and served according to law, and that the President or Vice-President, and the Secretary or Treasurer be here- by authorized and instructed to make and execute all such certifi- cates, proofs and other instruments in accordance with the facts, as may be necessary to show compliance with the statutory requirements for dissolution without judicial proceedings, and to file the same with the Secretary of State, and to do all such other things as may be necessary in the matter." (2) That notice of the stockholders' meeting provided for by the foregoing resolution was duly published in the "Gloversville Record,"_ a newspaper published and circulating in the county where the corporation has its principal ofifice, once a week for three successive weeks next pre- ceding the time appointed for holding such meeting, as set forth in the annexed proof of publication. (3) That on January 20, 1909, being the day of the first publication of such notice, a copy thereof was duly mailed to each stockholder of 304 NEW YORK CORPORATIONS. record at his last known post-office address, as evidenced by the annexed proof of service. (4) That a meeting of the stockholders of the Company was duly held pursuant to said notice on the loth day of February, igog, at 10 o'clock A. M., in the principal office of the Company at Gloversville, New York, the place where the last preceding annual meeting of the corpora- tion was held, and that at such meeting holders of more than two-thirds in amount of the stock of the corporation then outstanding appeared in person and adopted the following resolution by unanimous vote : "Resolved, That we as stockholders of the Gloversville Linen Com- pany approve the recommendation of the Board of Directors for the dissolution of the Company under the provisions of Section 221 of the General Corporation Law, and we consent that such dissolution shall be effected forthwith." (5) That holders of more than two-thirds of the capital stock of the Company thereupon in person duly executed the annexed consent to the immediate dissolution of the corporation. In Witness Whereof, we have hereunto set our signatures this I2th day of February, igog. Robert W. Jackson, President. James E. Truesdale, Treasurer. {Affidavit of president and treasurer in same form as affidavit given in Form 63.) (See G. C. L., § 221.) Form 96. — Dissolution without Judicial Procedure. Consent of Stockholders. GLOVERSVILLE LINEN COMPANY. Consent of Stockholders. We, the undersigned, being holders of at least two-thirds in amount of the outstanding stock of the Gloversville Linen Company, hereby signify our consent to the immediate dissolution of said corporation in accordance with the provisions of Section 221 of the General Corporation Law. In Witness Whereof, we have hereunto set our signatures and the number of shares of stock held by each of us in said corporation, this loth day of February, igog. Theodore T. Lane, ig Shares. Henry Gorham, 57 " Robert W. Jackson, id " Henry G. IdE, 2 " James E. Brower, 10 " Attested by : Robert W. Jackson, President. James E. Truesdale, Treasurer. STATUTORY FORMS. 305 State of New York, 1 County of Fulton. /'^•^•• Robert W. Jackson and James E. Truesdale, being duly sworn, depose and say, each for himself, that the said Robert W. Jackson is President and the said James E. Truesdale is Treasurer of the Gloversville Linen Company, the corporation referred to in the foregoing certificate; that the foregoing written consent of stockholders to the dissolution of said corporation was executed in person by such stockholders at a meeting of stockholders held on the loth day of February, 1909, and that the number of shares set opposite each signature is the number of shares standing on the books of the corporation in the name of the consenting stockholder and that the whole number of outstanding shares of said corporation is One Hundred (100), of which the number consenting is more than two-thirds. Robert W. Jackson. James E. Truesdale. Sworn to before me this 13th day \ of February, 1909. J William E. Jackson, /notarial \ Notary Public for l seal. J Fulton County. Form 97. — Dissolution without Judicial Procedure. Statement of Secretary. GLOVERSVILLE LINEN COMPANY. Statement of Secretary. I, the undersigned. Secretary of the Gloversville Linen Company, do hereby certify that the names and residences of the existing Board of Directors of said Corporation and the names and residences of its officers are as follows : NAMES OF directors, RESIDENCES. James E. Brower Gloversville, New York. Henry G. Ide Robert W. Jackson 112 W. 94th St., New York City. NAMES OF OFFICERS. RESIDENCES. Robert W.Jackson, President 112 W. 94th St., New York City. Henry G. Ide, Vice-President Gloversville, New York. Howard S. Williams, Secretary " James E. Truesdale, Treasurer 246 West End Ave., New York City. Howard S. Williams, Secretary. 306 NEW YORK CORPORATIONS. State of New York, "i County of Fulton. J "" Howard S. Williams, being duly sworn, says that he is the Secretary of the Gloversville Linen Company and that the names and residences of the existing directors and of&cers of said company as above set forth are to his knowledge true. Howard S. Williams. Sworn to before me this 13th day") of February, 1909. J Paul Apgar, / notarial \ Notary Public for I SEAL. J Fulton County. Form 98. — Dissolution without Judicial Procedure. Affidavit of Secretary. GLOVERSVILLE LINEN COMPANY. Affidavit of Secretary. State of New York, \ County of Fulton. /"• Howard S. Williams, being duly sworn, deposes and says that he is the Secretary of the Gloversville Linen Company, the corporation men- tioned in the foregoing certificate of dissolution; that pursuant to a reso- lution of the board of directors of said corporation, adopted January 4, 1909, he caused to be published in the "Gloversville Record," a newspaper published and circulating in the County of Fulton, in which the principal office of the corporation is located, once a week for the three weeks next preceding the date fixed for the special meeting announced therein, a notice of a special meeting of stockholders, of which the following is a true copy : "To the Stockholders of the Gloversville Linen Company: Pur- suant to a resolution of the Board of Directors of said Company recommending the dissolution of the corporation without judicial pro- ceedings, and calling a meeting of its stockholders to consider the same, a special meeting of the stockholders will be held in the principal office of the Company in Gloversville, New York, on the loth day of February, 1909, at 10 o'clock A. M., for the purpose of voting upon a proposition that said corporation be forthwith dissolved." Deponent further says that on the 20th day of January, 1909, being the first day of publication of said notice, he caused a copy of the same, se- curely sealed in a postpaid packet, to be mailed to each stockholder of record at his last known post-office address. Howard S. Williams. Sworn to before me this 13th day 1 of February, 1909. / Joseph E. Gans, /notarial 1 Notary Public for t SEAL, i Fulton County. (See G. C. L., § 221.) STATUTORY FORMS. 307 The foregoing papers, and any proxies, are filed with the Secretary of State, who issues duplicate certificates of filing. One of these must be filed with the clerk of the county in which the corporation has its principal office and a copy must be published at least once a week for two weeks in one or more newspapers published and circulating in the county of the principal office. (See § 56.) Fees to Secretary of State, $1 each for certificates of filing. Fee to county clerk, 6 cents for filing certificate. Petition for voluntary dissolution may be made to the supreme court by a majority of the directors. Form 99. — Voluntary Dissolution. Petition. New York Supreme Court, Kings County. In the Matter of the Voluntary Dissolution of the Standard Sheeting Company, a Corporation. To THE Supreme Court of the State of New York : The petition of Henry Rogers, Thomas Jones and Henry Swift re- spectfully shows to the court : First. — That your petitioners are a majority of the directors having the management of the concerns of the Standard Sheeting Company, a corporation created under the laws of the State of New York, to wit, under the Business Corporations Law. Second. — That said corporation was organized for the purpose of es- tablishing and operating a factory for the manufacture of linen and cot- ton sheeting; that its authorized capital stock is $200,000; that of said capital stock 340 shares of the par value of $34,000 were issued for the sum of $40,310 in money; that 9500 shares of stock were issued as appears from the books for services ; that your petitioners are not able to state the kind or character of service rendered by the persons to whom said shares of stock were issued, as the only entries in the books are the words "for services"; that in addition ninety-one shares of stock have been subscribed for and $1,230 paid on account thereof; that of said amount of capital stock paid in, as appears from the books in the possession of your petition- ers, $19,500 was paid to the Brooklyn Realty Corporation, on account of the purchase price of a factory property as specified in a certain contract of sale between the said Brooklyn Realty Corporation and the Standard Sheeting Company; that the balance of said capital has been paid in ex- penses of varying kinds, except the sum of $3,571,68, which is represented by a bond and mortgage; that the said contract of sale between the said Standard Sheeting Company and the said Brooklyn Realty Corporation 308 NEW YORK CORPORATIONS. was canceled by reason of the fact that the said Standard Sheeting Com- pany was without means to complete the purchase; that there is no pros- pect of the said Standard Sheeting Company being able to obtain the requisite capital to engage in business, which is stated in its certificate of incorporation to be the sum of $200,000; that said Company has not at any time ever actually engaged in business, and that by reason of said circumstances your petitioners deem it beneficial to the interests of the stockholders that the said corporation shall be dissolved. Third. — That the principal office of said corporation is by its charter located in the Borough of Brooklyn, City of New York; but, in fact, said corporation has no office or place for the transaction of business. Fourth. — That your petitioners have annexed to this petition a sched- ule marked "Schedule A" containing a statement of the matters required by Section 174 of the General Corporation Law, as far as your petitioners know or have the means of knowing the same. Wherefore your petitioners pray for a final order of this court dis- solving the said corporation and for such other and further relief as may be proper. Dated January 21, 1909. P. H. Van Alstyns, Attorney for Petitioners, I Broadway, New York City. (See § S6a; also G. C. L., §§ 170, I74, 176.) Form 100. — Voluntary Dissolution. Schedule. SCHEDUIE "A." First. — ^A full and true account of all the creditors of the corporation, and of all unsatisfied engagements entered into by and subsisting against the corporation: Robert Potter $1,000 Edward M. Deegan $2,000 Second. — A statement of the name and place of residence of each creditor, and of each person with whom such engagement was made, and to whom it is to be performed, if known, or if either is not known, a state- ment of that fact : Robert Potter, 100 Ralph Street, Brooklyn, N. Y. Edward M. Deegan, Baldwin, Long Island. Third. — ^A statement of the sum owing to each creditor or other per- sons specified in the last subdivision, and the nature of each debt, demand or other engagement: Robert Potter, $1,000, with interest from October 16, 1908, money loaned to the company. Edward M. Deegan, as assignee of Henry Franklin, $2,000, with interest from February 26, 1908, money loaned to the company. Fourth. — A statement of the true cause and consideration of the in- debtedness to each creditor: Robert Potter on October 16, 1908, loaned to the company the sum of $1,000, under an agreement by the company to give him there- STATUTORY FORMS. 309 for, when issued, mortgage bonds of the company to an equal amount, bearing six per cent, interest. The company has never issued any bonds. The indebtedness to Edward M. Deegan is due him, as assignee of Henry Franklin, who on February 26, 1908, loaned the company $2,000, and took a certificate for twenty shares of stock, with an agree- ment to give him in lieu thereof six per cent, mortgage bonds of the company, when issued, to an equal amount. No bonds have been issued. Fifth. — A full, just and true inventory of all the property of the cor- poration, and of all the books, vouchers and securities relating thereto : Bond and mortgage, Richard Hurst to the Standard Sheeting Company, $3,571.38. Interest thereon from April 24, 1908, at five per cent, per annum. The following books : Minute Book, Stock Certificate Book, Stock Book, Journal, Ledger, Cash Book. Sixth. — A statement of each incumbrance upon the property of the corporation by judgment, mortgage, pledge or otherwise: None. Seventh.— A full, just and true account of the capital stock of the cor- poration, specifying the name of each stockholder, his residence, if it be known, or, if not known, stating that fact; the number of shares belong- ing to him, the amount paid upon his shares, and the amount still due thereon : Capital Stock authorized, $200,000. No. OF Amount No. op Shares Stockholder. Address. Shares, paid in issued for money. services. August Brown, Henry R. Armour, 117 Vesey St., 5 S New York City. 1224 Fulton St., 25 $1,000 IS Brooklyn, N. Y. {Full list of stockholders must be included.) (See G. C. L., § 174.) Form I or. — Voluntary Dissolution. Affidavit. State of New York, 1 _^ . County of Queens. J Henry Rogers, Thomas Jones and Henry Swift being severally duly sworn, each for himself deposes and says that the matter of fact stated in the' foregoing petition subscribed by him, and the schedule thereto an- nexed, and therein referred to, marked Schedule "A," are just and true, so far as he knows, or has the means of knowing the same. Henry Rogers. Thomas Jones. Henry Swift. Sworn to before me this "I ,.,.,., j n 2ist day of January, 1909- / [Notarial signature and seal.J (See G. C. L., § I7S-) 3IO NEW YORK CORPORATIONS. Form 1 02. — Voluntary Dissolution. Notice of Application. New York Supreme Court, Kings County. In the Matter of the Voluntary Dissolution of the Standard Sheeting Company, a Corporation. Sir: Please take notice that, upon the annexed petition and the schedule thereto annexed, I will apply to the Supreme Court at a special term thereof, to be held at the County Court House, Borough of Brooklyn, City of New York, on the ist day of February, 1909, at the opening of the court on that day, or as soon thereafter as counsel can be heard, for an order in all respects similar to the proposed order herewith served upon you, and for such other and further relief in the premises as to the court may seem proper. Dated January 22, 1909. Yours respectfully, F. H. Van Alstyne, Attorney for Petitioners, I Broadway, New York City. To the Hon. Edward R. O'Malley, Attorney General of the State of New York. Form 103. — Voluntary Dissolution. Order to Show Cause. At a Special Term of the Su- preme Court, held in the County Court House, Borough Pi-esent: of Brooklyn, City of New Hon. William J. Kelly, York, on the ist day of Feb- Justice. ruary, 1909. In the Matter of the Voluntary Dissolution of the Standard Sheeting Company, a Corporation. On reading and filing the petition of Henry Rogers, Thomas Jones and Henry Swift, all of the directors of the Standard Sheeting Company, verified on the 21st day of January, 1909, and the schedule thereto an- nexed, and it appearing thereby that this proceeding is one of those author- ized by Section 170 of the General Corporation Law, and that it will be for the best interest of the stockholders that said corporation should be dissolved, and on reading and filing proof of the service of said petition and schedule and notice of this application upon the Attorney General of the State of New York, now on motion of F. H. Van Alstyne, Attorney for the Petitioners, it is STATUTORY FORMS. 3II Ordered, That all persons interested in said corporation show cause at \ K%'^u " °^ ^^^^ '^°"''' '° ^^ held at Supreme Court Chambers in the Village of Patchogue, County of Suffolk, on the 22d day of March 1909, at the openmg of the Court on that day, or as soon thereafter as counsel can be heard, why the said corporation should not be dissolved. And It IS further ordered that a copy of- this order be published at least once in each of the three weeks immediately preceding the time so fixed for showing cause in the "Brooklyn Eagle," a newspaper published in the County of Kings, the said county wherein this order to show cause IS to be entered. (Signature) (See G. C. h; §§ 178-181, 312.) Form 104. — Voluntary Dissolution. Appointment of Referee. At a Special Term of the Su- preme Court, held at Supreme Present: Court Chambers, Patchogue, Hon. Martin J. Keogh, County of Suffolk, March 22, Justice. 1909. In the Matter of the Voluntary Dissolution of the Standard Sheeting Company, a Corporation. The above entitled proceeding coming on to be heard at a Special Term of the Supreme Court appointed to be held at Supreme Court Chambers at Patchogue, Suffolk County, March 22, 1909, upon the peti- tion of the majority of the directors of the said Standard Sheeting Com- pany, verified January 21, 1909, and proof of due service of said order upon all the stockholders and creditors named in said petition, and upon the Attorney General, and proof of due publication of said order in the "Brooklyn Eagle" once in each week for three weeks immediately pre- ceding the return of said order to show cause, and after hearing F. H. Van Alstyne, Attorney for the Petitioners, in support of the application, and Mr. H. Huffman, Attorney for Henry Ash, August Brown and Henry R. Armour, Stockholders of the above-named corporation, it is on motion of F. H. Van Alstyne, Attorney for the Petitioners, ordered that the above entitled proceeding be, and the same hereby is, referred to Frederick S. Lynch, Esq., Counsellor-at-Law, who is hereby appointed referee to hear the allegations and proofs of the parties, and determine the facts. It Is Ordered, That the said referee make his report in writing, and that the same be made and filed with all convenient speed, and that his said report contain a statement of the effects, credits and other property, and of the debts and other engagements of the corporation and matters pertaining to its affairs. Enter in Kings County. (Signature) (See G. C. L., §§ 185-188.) 312 NEW YORK CORPORATIONS. Form 105. — Voluntary Dissolution. Notice of Order. Referee. Sir: Please take notice that the foregoing is a copy of a proposed order which will be submitted for signature to the Hon. Martin J. Keogh, Jus- tice of the Supreme Court at Chambers, Patchogue, County of Suffolk, on March 22, 1909, at 9.45 A. M. Yours respectfully, F. H. Van Alstyne, To the Hon. Edward R. O'Malley, Attorney General of the State of New York. Attorney for Petitioners, I Broadway, New York City. (See G. C. L.. § 312.) Form 106. — Voluntary Dissolution. Report of Referee. New York Supreme Court, Kings County. In the Matter of the Voluntary Dissolution of the Standard Sheeting Company, a Corporation. Report of the Referee : I, Frederick S. Lynch, to whom it was referred by order of the Su- preme Court dated March 22, 1909, and entered in the Kings County Clerk's office, to hear the allegations and proofs of the parties, and deter- mine the facts, would respectfully report to the court as follows: That, proceeding under said order, I took and subscribed the oath of office hereto annexed. That due notice of hearing having been given to the Attorney General, and to all parties to this proceeding for June 8, 1909, I was on that day attended by F. H. Van Alstyne, Esq., Attorney for the Petitioners, and H. Huffman, Esq., Attorney for Henry Ash et al., stockholders. That I have taken all the proofs submitted by any of the parties, and submit herewith a transcript of the same. I do, upon said proofs submitted, hereby Teport to the court as re- quired by said order, by determining as follows : That the Standard Sheeting Company is a domestic corporation, or- ganized and existing under the laws of the State of New York, to wit, the Business Corporations Law. That said corporation was organized for the purposes and objects of the wholesale and retail traffic in and manufacture of linen and cotton sheetings in the Borough of Brooklyn, City of New York, New York, with a capital stock of $200,000 in 2,000 shares of the par value each of $100, with three directors. That of said $200,000 of capital stock there have STATUTORY FORMS. 3I3 been issued 435 shares of the par value of $100 each, and that more than a year has elapsed since said incorporation. That the petition herein was signed by a majority of the directors of the Standard Sheeting Company, and it appears from the evidence that there is no possibility of procuring the requisite amount of capital with which to begin or continue the business ; that the corporation is liable to an action for dissolution, by reason of the non-payment of one-half its capital stock ; that the corporation has no plant, and has assets only as stated in the schedule of assets set forth below, and has liabilities as shown in the schedule of creditors. And because of the conditions above set forth, and from the proofs submitted herewith, I deem, and do determine, and therefore recommend, that a dissolution of the corporation will be beneficial to the interests of the stockholders, and not injurious to the public interests, and determine that the prayer of the petitioners should be granted. Annexed hereto are schedules of assets of the corporation, and sched- ule of the creditors of the corporation, all of which are respectfully sub- mitted. Dated June 12, 1909. Frederick S. Lynch, Referee. (See G. C. L.. §§ 186, 187.) Form 107. — Voluntary Dissolution. Schedule of Assets and Creditors. Schedule op Assets. VALUE. Any rights which it may be determined exist in the Stand- ard Sheeting Company because of the alleged wrongful trans- fer by the officers and directors of the said company of the assets and business thereof Unknown. Any rights which it may be determined exist in the Stand- ard Sheeting Company under the contract in evidence between the Standard Sheeting Company and the Brooklyn Realty Cor- poration for the sale of the factory property then the property of the Brooklyn Realty Corporation Unknown. Any and all moneys which may be recovered from the of- ficers and directors of the Standard Sheeting Company by reason of the alleged wrongful taking thereof under claim of payment to them, as commissions for the sale of the stock of their corporation ' Unknown Cash paid into court under order by Henry Rogers $3,304.04 Office furniture, consisting of desk, chair, twelve chairs and directors' table, rug, value estimated at $40.00 Books of the corporation No value. Cash in the Bedford Bank $3-15 Frederick S. Lynch, Referee. 314 NEW YORK CORPORATIONS. Schedule of Creditors. Robert Potter, 100 Ralph St., Brooklyn, $1,000, with interest from October 16, 1908. Edward M. Deegan, Baldwin, L. I., as assignee of Henry Franklin, money loaned, $2,000. Frederick S. Lynch, Referee. Form 108. — Voluntary Dissolution. Final Order and Appoint- ment of Receiver. At a Special Term of the Su- preme Court, held at the County Court House, Borough of Brooklyn, City of New York, June 30, 1909. Present : Hon. William J. Kelly, Justice. In the Matter | of the Voluntary Dissolution of the Standard Sheeting Company, a Corporation. The application for a final order confirming the report of the Referee heretofore appointed herein, and dissolving the Standard Sheeting Com- pany, coming on to be heard upon the report of Frederick S. Lynch, Esq., the said Referee, dated June 12, 1909, and upon all the proceedings herein and notice of motion and proof of service thereof upon the Attorney Gen- eral, and upon each person who has made himself a party to these pro- ceedings by filing with the clerk before the close of the hearing before the Referee a notice of his appearance as required by law, and after hearing F. H. Van Alstyne, Attorney for the Petitioners, in support of the applica- tion, and Mr. H. Huffman, Attorney for eleven stockholders in opposi- tion, and it appearing to the court that the dissolution of the said Standard Sheeting Company will be beneficial to the interests of the stockholders and not injurious to the public interests for the reason that the said com- pany has never had the amount of capital provided by its certificate of incorporation as the amount with which it would begin business, and there is no possibility of it procuring the said requisite amount of capital, and that the said company has no plant, and has assets only as stated in the Schedule of Assets attached to the said Referee's Report, and has liabilities as shown in the said Schedule, and is not authorized by law to do business. Therefore on motion F. H. Van Alstyne, Attorney for the said Petitioner, it is Ordered that the said Standard Sheeting Company be, and the same is, hereby dissolved; and it is further Ordered that Geo. B. Thompson, Esq., Counsellor-at-Law, be, and he hereby is, appointed receiver of all the property of said corporation with all the powers of such receiver; and it is further STATUTORY FORMS. 3I5 OedBred that said receiver before entering upon his duties shall make and file with the Clerk of the County of Kings a bond to the people of the State of New York in the penalty of Four Thousand Dollars ($4,000), conditioned for the faithful discharge of his duties as such receiver and for the due accounting of all the moneys received by him. And it is further Ordured that the Long Island Loan & Trust Company be, and the same is, hereby designated as the place of deposit wherein all the funds of the said corporation not needed for immediate disbursement shall be de- posited. And it is further Ordered that said receiver shall give notice of his appointment, which notice shall contain the matters required by law in notice of trustees of insolvent debtors, and in addition thereto shall require all persons holding any open or subsisting contract of such corporation to present the same in writing and in detail to such receiver at a time and place in such notice specified. And that said notice be published for three weeks in the "Brooklyn Daily Eagle," being a newspaper printed in the County of Kings, where the principal place for the conduct of the business of such corpora- tion is situated. It is further Ordered that the said receiver out of the moneys that may come into his hands shall pay to F. H. Van Alstyne, Attorney for Petitioners, the sum of $482.63, for the costs and disbursements of the said petitioners herein, and that he pay to H. Huffman, Esq., the sum of $73-92 hereby allowed to him as costs herein for the costs of the contesting stockholders. Enter (Signature.) Granted June 30, 1909. Prank Stillman, Clerk. (See G. C. L., §§ 190. 191. 3i3-) (6) Voting Trusts. Section 25 of the General Corporation Law provides in express terms for the formation of voting trusts. The fol- lowing form complies with the statutory requirements. Form 109. — Voting Trust Agreement. Voting Trust Agreement. We, the undersigned, stockholders of the Glen Harbor Improvement Company, a corporation organized under the laws of the State of New York, and having its principal office in the City of Yonkers, in said State of New York, do hereby in consideration of the premises and of our mutual undertakings as herein set forth, severally agree to transfer and deliver the shares of stock held by each of us in said corporation to 3l6 NEW YORK CORPORATIONS. Emmett M. Brown, William Swift and Andrew McBride, all of the said City of Yonkers, as Voting Trustees hereunder, and mutually agree with them and with each other that said Trustees shall hold and vote the said stock for the period of five years from the date hereof, for the purposes herein set forth and under the following terms and conditions : 1. All stockholders of the said Company may join in the voting trust hereby created, by signing this present agreement and transferring, in whole or in part, the shares of stock held by them in said Company to the said Trustees, under the conditions and for the purposes of this present agreement. 2. Each stockholder in said Company joining this voting trust as afore provided shall become a party thereto from the date on which stock owned by such stockholder in said Company shall be transferred and delivered to said Trustees for the purposes of this agreement. 3. The said Trustees shall surrender to the proper officer of the said Glen Harbor Improvement Company, for cancellation, the certificates for all shares of stock transferred to said Trustees, and shall, in place thereof, have certificates of said Company issued to themselves as Trustees, and on the face of each said Trustees' certificate shall be stated the fact that such certificate has been issued pursuant to this agreement. 4. The said Trustees shall collect and receive all dividends and profits accruing to said stock and shall pay over the same to the respective equitable owners thereof. 5. The said Trustees shall issue to each stockholder becoming a party hereto one or more transferable Trustees' receipts for the number of shares of stock placed by each of said stockholders respectively in this voting trust, and when such Trustees' receipts are duly transferred to other parties, said Trustees shall recognize such other parties as the lawful assigns and successors of the original parties hereto, entitled to all of their rights in the premises. 6. The stock held under this agreement shall, except as hereinafter specially provided, be voted at any meeting of the stockholders of said Company by such of the said Trustees as may be present thereat, and said vote shall be cast as in the judgment of a majority of the said Trustees present at any such meetings may be for the best interests of the stock- holders subscribing to this agreement. 7. In all elections for Directors the said stock shall be voted for the re-election of the present members of the Board of Directors of said Company, or, in the event of the death, disability or refusal to serve of any such members, the said stock shall be voted for such other person or persons as, in the judgment of said Trustees, shall be most suitable for such office. 8. This agreement shall terminate five years from the date hereof, and upon such termination the said Trustees shall, as the outstanding Trustees' receipts are surrendered to them, duly endorsed, give over to the said Company the certificates of stock held by said Trustees, in pursuance of this agreement, properly endorsed, and shall direct the officers of said Company to deliver to the respective owners of the said surrendered Trustees' receipts certificates for such number of shares of stock as may be necessary to satisfy the requirement of the said surrendered Trustees' receipts. 9. In event of the death, disability, resignation or refusal to act of any of the Trustees herein named, the remaining Trustees, or Trustee, shall have power to suitably fill such vacancy or vacancies, and the person or persons so appointed shall be empowered and authorized to act here- under in all respects as if originally named herein. STATUTORY FORMS. 3I7 10. A duplicate of this agreement shall be filed in the principal office of the said Company in Yonkers and shall there be kept for the inspection of any stockholder of the Company, daily, during business hours. In Testimony Whereof^ the parties to this agreement have here- unto affixed their hands and seals in the said City of Yonkers this 27th day of April, 1909. transferred voting trustees. stockholders. shares William Swift. (l. s.) Ernest Jurgens. (l. s.) 125 Andrew McBridE. (l. s.) Harold M. GilsEy. (l. s.) 75 Emmett M. Brown, (l. s.) James Halsey. (l. s.) 50 Willis M. Ames. (l. s.) 75 (G. C. L., § 25.) A duplicate of this agreement must be kept on file at the principal office of the company and be open to the inspection of stockholders daily during business hours. Any stockholder may upon request become a party to such agreement and upon transferring his stock to the designated trustees, is entitled to participate in all its terms, conditions and privileges. (See § 98.) CHAPTER XXVII. FORMS RELATING TO DIVIDENDS. Form no. — Resolution Declaring Dividend. ResoLVED, That the sum of Ten Thousand Dollars ($10,000) be and hereby is appropriated and set aside from the surplus profits of the Com- pany for the payment of the regular one and one-half per cent. iiYiJo) quarterly dividend upon its outstanding stock, said dividend to be payable on the 22d day of March, ipog, to stockholders of record as shown by the books of the Company at the close of business on the 17th day of March, igog. RESOLV6D PuRTHBRj That the Treasurer of the Company be and hereby is authorized and instructed to give due notice of such dividend, and to pay the same on the date set forth. Form III. — Resolution Declaring Preferred Dividend. Resolved, That the regular semi-annual dividend of three per cent. (3%) upon the outstanding Preferred Stock of the Company be and hereby is declared from the surplus profits, said dividend to be paid on the loth day of May, igog, and to be payable to stockholders who appear of record on the 1st day of May, igog, at 3 o'clock P. M. ; and that the Treasurer of the Company be and hereby is instructed and authorized to give due notice of such dividend and to pay the same on the date set forth. Form 112. — Notice of Dividend. Mailing. MICHIGAN COPPER COMPANY. 100 Broadway, New York. April I, igog. You are hereby notified that at a meeting of the Directors of the Michi- gan Copper Company, held this day, a dividend of One and One-half per cent. (i^%) was declared, payable at this ofi^ce, April 20, igog, to 318 FORMS RELATING TO DIVIDENDS. 319 stockholders of record at 3 o'clock P. M., April 10, igog. Transfer books close at 3 o'clock P. M., April 10, 1909, and reopen at 10 o'clock A. M., April 21, 1909. Lawrence Wells, Secretary. In the smaller corporations dividend notices are not us- ually published, notice by mail being deemed sufficient. In the larger corporations they are generally both mailed and published. The following are common forms of publication notice. Form 113. — Notice of Dividend. Publication. UNITED STATES STEEL CORPORATION. Dividend No. 21 of Vz of 1% on the Common Stock for the quarter ending December 31, 1908, was declared January 26, payable March 30, to stockholders of record March 15. Transfer books close at 3 P. M., March 15 and reopen at 10 A. M., April 20, igog. Richard Trimble, Secretary. Form 114. — Notice of Dividend. Publication. AMERICAN LOCOMOTIVE COMPANY. 30 Church St., New York, March 25, igog. The Board of Directors this day declared a quarterly dividend of one and three-quarters per cent, upon the preferred capital stock, payable April 21, igog, to the preferred stockholders of record at the close of busi- ness on April S, igop- Checks will be mailed. Transfer books of the preferred stock will close at 3 P. M., April S, igog, and reopen April 22, igog. S. T. Callaway, Secretary. CHAPTER XXVIII. BOND ISSUES. Under the New York statutes, every mortgage by a cor- poration must be authorized by the consent of the holders of not less than two-thirds of the capital stock of the corporation. This authorization may be given either by action at a special meeting called for that purpose upon the same notice as that required for an annual meeting (see § loib), or by a writ- ten consent signed by the holders of the requisite amount of stock. (See Form ii6.) The form of resolution, if action were taken at a meeting, would be as follows : Form 115. — Stockholders' Resolution Authorizing Mortgage. ^ RfisOLvED, That the Board of Directors and proper officers of the Remsen Realty Company be hereby authorized and empowered to make and issue its first mortgage, six per cent., thirty-year, gold bonds to the amount of Three Hundred Thousand Dollars ($300,000) and to secure the due payment of the principal and interest thereof by executing and de- livering to a suitable trustee a first mortgage or deed of trust upon the entire property and franchises of the said Remsen Realty Company; the date of issue, number and par value, times of interest payments, and the form or forms of said bonds, together with all other details pertaining thereto, to be in the discretion of the Board of Directors. The minutes of the special or annual meeting at which this resolution is adopted should show that the required legal notice of the meeting has been given, and that a stock vote of not less than two-thirds of the outstanding stock was cast thereat in favor of such resolution. 320 BOND ISSUES. 321 When the stockholders of the company are not numerous, it is simpler to secure the necessary authorization for a bond issue by a written consent, as shown in the following form : Form 116. — Stockholders' Written Consent to Mortgage. Consent to Mortgage. We, the undersigned stockholders of the Remsen Realty Company, a corporation duly organized and existing under the laws of the State of New York, with a capital stock of $500,000 divided into 5,000 shares of the par value of $100 each, owning and holding more than two-thirds of the capital stock thereof, do hereby consent and agree that the Board of Directors and proper ofiScers of the said company may make and issue its first mortgage, six per cent., thirty-year, gold bonds to the amount of Three Hundred Thousand Dollars ($300,000), and may secure the due payment of the principal and interest thereof by executing and delivering to a suitable trustee a first mortgage or deed of trust upon the entire property and franchises of the said Remsen Realty Company; the date of issue, number and par value, times of interest payments, and the form or forms of said bonds, together with all other details pertaining thereto, to be in the dis- cretion of the Board of Directors. In Witness Whereof, we have hereunto set our signatures and opposite thereto the number of shares of stock held by each of us in the said corporation, this first day of March, 1909. Franklin Moefat, 3,000 shares. Manly T. Hewlit, 1,000 shares. John P. Goldman, 73 shares. State of New York, \ . County of New York. J " On this 1st day of March, 1909, before me personally came Franklin Moffat, Manly T. Hewlit and John P. Goldman, to me known and known to me to be the persons described in and who executed the foregoing consent to mortgage, and severally duly acknowledged to me that they had made, signed and executed the same for the uses and purposes therein set forth. ; notarial \ John Wise, I seal. J Notary Public for New York County. Whether the consent is given at a meeting or by written consent, a corporate certificate must be prepared as in the form following and filed in the office of the clerk or register of the county wherein the corporation has its principal place of business. This certificate is drawn on the assumption that 322 NEW YORK CORPORATIONS. the required authorization was given by resolution. If it were given in writing, the reference to the consent in the certificate would be changed to correspond. Form 117. — Certificate of Consent to Mortgage. This is to Certify that putsuant to the provisions of Section 6 of the Stock Corporation Law, the holders of more than two-thirds of the capi- tal stock of the Remsen Realty Company, a corporation duly organized and existing under the laws of the State of New York, have by resolution duly adopted at a special meeting of the stockholders called for that pur- pose in accordance with the statute requirements and held in the office of the Company at 2 o'clock P. M., on the ist day of March, 1909, given their consent that the Board of Directors and proper officers of said corporation may make and issue its first mortgage, thirty year, six per cent., gold bonds, to the amount of Three Hundred Thousand Dollars ($300,000), and may secure the due payment of the principal and interest thereof by executing and delivering to a suitable trustee a first mortgage or deed of trust upon the entire property and franchises of the said Rem- sen Realty Company; the date of isstie, number and par value, times of interest payments, and the form or forms of said bonds, together with all other details pertaining thereto, to be in the discretion of the Board of Directors. In Witness Whereof, the said Remsen Realty Company has caused its corporate signature and seal to be hereunto affixed by its President and Secretary duly authorized thereto, all being done in the City, County and State of New York, this first day of March, in the year one thousand nine hundred and nine. Remsen Realty Company, By Franklin Moffat, President. f CORPORATE 1 Charles E. Warren, \ SEAL. / Secretary. State op New Yosk, "i County of New York. /•^■^•• On the loth day of March, 1909, before me personally came Franklin Moffat and Charles E. Warren, to me known, who, being by me duly severally sworn, did depose and say, each for himself, that the said Franklin Moffat resides in the City of New York and is the President of the Remsen Realty Company, and the said Charles E. Warren resides in the City of Newark, New Jersey, and is the Secretary of the Remsen Realty Company, the corporation described in and which executed the foregoing instrument ; that they each know the seal of the said corporation ; that the seal affixed to said instrument is such corporate seal; that it BOND ISSUES. 323 id corporation r NOTARIAL I ' ""'joHN Wise, *■ SEAL. J Notarv Pllhlir fnr Mpw ■> was SO affixed by order of the Board of Directors of said corporation and that they signed their names thereto by like order. Notary Public for New' York County. After the execution and filing of this certificate, the di- rectors meet and pass the following resolution, reciting what has been done, authorizing the ofificers to proceed in the matter, and providing for the details of the transaction. Form I r8.— Directors' Resolution Authorizing Bond Issue. Whereas, As provided by Section 6 of the Stock Corporation Law of the State of New York, the holders of more than two-thirds of the capi- tal^ stock of the Remsen Realty Company have, in accordance with the re- quirements of the statutes, given their consent, by resolution duly adopted at a special meeting of the stockholders called for that purpose, that the Board of Directors and proper officers of said company may make and issue its first mortgage, thirty year, six per cent., gold bonds to the amount of Three Hundred Thousand Dollars ($300,000), and secure the due pay- ment of the principal and interest thereof by executing and delivering to a suitable trustee a first mortgage or deed of trust upon the entire property and franchises of the said Remsen Realty Company; the date of issue, number and par value, times of interest payments, and the form or forms of said bonds, together with all other details pertaining thereto, to be in the discretion of the Board of Directors ; and Whereas, The President and Secretary of said company have made and filed in the office of the County Clerk of New York County their certificate that such consent was legally given; Now, Therefore. Be It Resolved, That in pursuance of the said con- sent the Board of Directors of the Remsen Realty Company hereby author- izes, empowers and instructs the President and other officers of the said company to make and issue six hundred (600) of its first mortgage, thirty year, gold bonds of the denomination of Five Hundred Dollars ($500) each, all the said bonds to be dated the first day of May, ipog, and to bear interest at the rate of six per cent, per annum, payable semi-annually on the first days of May and November in each year,* and to secure the due payment of the principal and interest of said bonds said officers are hereby further authorized and instructed to execute and deliver to the Metropolis Trust Company of the City of New York, as Trustee, a first mortgage or deed of trust upon the entire plant, property and franchises of the Rem- sen Realty Company. * Here may be inserted if desired " and said bonds and the interest coupons thereof and the trustee's certificate endorsed thereon shall be in substantially the forms follow- ing : " (Full forms of bond, coupon and trustee's certificate.) 324 NEW YORK CORPORATIONS. Form 1 19. — Coupon Bond. United States op America. STATE OF new YORK. REMSEN REALTY COMPANY. *^°°'°° First Mortgage, Six Per Cent., Gold Bonds. Know All Men by These Presents, That the Remsen Realty Com- pany, a corporation organized under the laws of the State of New York for value received, hereby promises to pay to the bearer hereof, or if this bond is registered, to the registered holder thereof, at the office of the Metropolis Trust Company of the City of New York, on the first day of May, nineteen hundred and thirty-nine, in gold coin of the United States of America, of the present standard of weight and fineness, or its equiva- lent, the sum of Five Hundred Dollars, without deduction from either such prmcipal or interest for or on account of any United States, State, munic- ipal or other tax or taxes which the Remsen Realty Company, its successors or assigns, may be required to pay or deduct therefrom, and the Remsen Realty Company hereby covenants and agrees to pay all such tax or taxes, and in the meantime to pay interest upon the said sum of Five Hundred Dollars from and after the first day of May, nineteen hundred and nine, at the rate of six per cent, per annum, payable in like gold coin, or its equivalent, at the same place, semi-annually, on the first days of November and May in each year, beginning with the first day of November, 1909, on presentation and surrender of the coupons hereto attached as each of them becomes due. This bond is one of a series of six hundred (600) bon-ds of the same tenor and date, aggregating Three Hundred Thousand Dollars ($300,000), numbered consecutively from one to six hundred, both inclusive, for the sum of Five Hundred Dollars ($500) each, all of which bonds are secured equally by a deed of trust, which is a first mortgage upon the properties of the Remsen Realty Company, executed and delivered by the said Remsen Realty Company to the said Metropolis Trust Company, as Trustee, grant- ing and conveying in trust and mortgaging as security for the payment of the principal of said bonds at maturity, at par, and the interest on said bonds, payable semi-annually at the rate aforesaid, all the real estate and other property of the said Remsen Realty Company mentioned and de- scribed in said deed of trust, with full power to use and sell the same in the event of default in payment of the bonds or coupons, or any of them, and apply the proceeds to the payment of same as in said deed of trust provided. This bond is issued, received and held subject to all and singu- lar the terms and conditions contained in the deed of trust aforesaid. This bond is further secured by a sinking fund, which shall consist of and be maintained by the payment to the said Metropolis Trust Company by the Remsen Realty Company on the first day of May, 1914, and on each succeeding first day of May thereafter, until the redemption of all the bonds issued under said deed of trust, of twenty-five dollars for each thousand dollars of bonds then issued and outstanding, such moneys so paid to be used in the purchase of outstanding bonds at the lowest price at which they may be had, not exceeding, however, one hundred and ten per centum of the face of said bonds plus accrued interest, and if bonds cannot be so purchased, such moneys shall be used in the redemption of the bonds outstanding, as hereinafter provided. BOND ISSUES. 325 This bond shall not become obligatory until the certificate endorsed hereon shall be signed by the Trustee, and when so authenticated by the signature of the Trustee the title to said bond shall pass by delivery, unless said bond is registered, and, if registered, the title thereto shall pass only by transfer on the books of said Trust Company, and no transfer except upon said books shall be valid unless the last transfer shall have been to bearer, which shall restore transferability by delivery. This bond is redeemable, at the option of the Remsen Realty Com- pany, on any interest day at any time after the first day of May, 1914, at no per cent, of its face value, plus accrued interest, provided that thirty days' notice of such redemption shall be given the holder thereof by notice published once a week for four consecutive weeks prior to such redemp- tion, in a newspaper published in New York City. In Witness Whereof, the said Remsen Realty Company hath caused these presents to be signed by its President, and its corporate seal, duly attested by its Secretary, to be hereunto affixed, and hath hereunto affixed coupons with the name of its Treasurer engraved thereon, and hath caused this bond to be dated the first day of May, A. D. one thousand nine hundred and nine. Remsen Realty Company, /corporate \ By Franklin MoEEat, l seal. ( President. Attest : Charles E. Warren, Secretary. Form 120. — Coupon. No. I. $15-00 REMSEN REALTY COMPANY will pay to the bearer at the office of the Metropolis Trust Company of the City of New York the sum of Fifteen Dollars ($IS), in United States gold coin, or its equivalent, on the first day of November, 1909, bemg six months' interest on its First Mortgage, Six per cent.. Gold Bond No. 280. Frank Crosby, ■Treasurer. Form 121. — Trustee's Certificate. The Metropolis Trust Company of the City of New York hereby certifies that the within Bond is one of a series of Bonds described in the Deed of Trust therein mentioned. Metropolis Trust Company of the City of New York, Trustee. By Standford Nivens, President. 326 NEW YORK CORPORATIONS. The following deed of trust is drawn up in pursuance of the foregoing stockholders' consent and directors' author- izing resolution: Form 122. — Deed of Trust. Dbbd of Trust. This IndbnturEj made and entered into this 12th day of April, one thousand nine hundred and nine, by and between the Remsen Realty Com- pany, a corporation duly organized and existing under the laws of the State of New York, having its office at No. 170 Broadway, New York City, hereinafter called the Realty Company, party of the first part, and the Metropolis Trust Company of the City of New York, a corporation duly organized and existing under the laws of the State of New York, having its principal office at Nos. zi and 39 Wall Street, New York City, as Trustee, hereinafter called the Trustee, party of the second part, WiTNBSSETH : Whereas, The Board of Directors of the said Realty Company has, by the authority and with the consent of the stockholders thereof, legally given, duly resolved to borrow Three Hundred Thousand Dollars for the lawful business purposes of the said Company, and for that purpose to execute and issue its first mortgage, six per cent., thirty year, gold bonds of the par value of Five Hundred Dollars each, dated the first day of May, 1909, and payable on the first day of May, 1939, in gold coin of the United States of, or equivalent to, the present standard of weight and fineness, said bonds to bear interest at the rate of six per cent, per annum, payable in like gold coin, semi-annually, on the first days of May and November in each year, from the first day of May, 1909, until the pay- ment of the principal amount thereof; the payment of the principal and interest of said bonds to be secured by a mortgage or deed of trust that shall be a first mortgage on the entire property of the said Realty Com- pany as hereinafter described, said deed of trust to be in substantially the form of this indenture; and Whereas, The bonds so to be issued are to be in substantially the form following, viz. : {,Sze Form up.) And Whereas, There are to be attached to each of the said bonds, at the time of the issue thereof, coupons representing the semi-annual in- stalments of interest which are to become due thereon, each of which coupons is to be substantially of the following tenor, the proper coupon number, date of payment, amount of the bond and its number, and the engraved facsimile signature of the Treasurer of the Realty Company, having been inserted in the respective blanks therefor, to wit: {See Form 120.) And Whereas, On each of said bonds there is to be endorsed a cer- tificate of the Trustee or its successor appointed hereunder, of the follow- ing tenor: {See Form 121.) BOND ISSUES. 327 Now, Therefore, the said Realty Company, in consideration of the premises and of the sum of one dollar to it in hand paid by the said Trustee, the receipt whereof is hereby acknowledged, and in order to secure the due payment of the principal and interest of the bonds to be issued hereunder, and to insure the faithful performance of the covenants and agreements herein contained, hath granted, bargained, sold, aliened, assigned, conveyed, transferred and set over, and by these presents doth grant, bargain, sell, alien, assign, convey, transfer and set over unto the said Trustee, its successors and assigns : All of the following described property and franchises of the Com- pany, to wit: {Specific description of the property mortgaged.) To Have and To Hold all and singular the said property, with all real estate, buildings, fixtures, articles and property of every kind, be- longing to or pertaining to the same unto the said Trustee, its successors and assigns forever. In Trust, Nevertheless, for the equal pro rata benefit and security of any and all persons and parties who may be or become the owners or lawful holders of any of the bonds to be issued hereunder and secured hereby, irrespective of date or priority of issue, without any discrimination, preference or priority of any one bond over another or others, by reason of priority in time of issue, or sale, or negotiation thereof, or otherwise, and to secure the due payment of each of the said bonds together with the interest thereof, and for the uses and purposes and upon the terms and conditions hereinafter declared and expressed ; and It Is Hereby Expressly Covenanted and Agreed by and between the parties hereto that all such bonds are to be issued, negotiated and received, and that the said property and franchises mortgaged are to be held by the Trustee upon and subject to the following further trusts, uses, con- ditions and covenants, that is to say : First. — The bonds to be issued hereunder shall be executed on behalf of the Realty Company, by its proper officers, and shall be delivered to the Trustee for certification, and said Trustee shall certify and deliver said bonds so certified upon the order of the Board of Directors of the Realty Company. An order purporting to be the order for delivery of said bonds and beheved by the Trustee to be genuine shall be conclusive, authority and full protection to the Trustee for the certification and de- livery of the bonds. Only such bonds as shall bear thereon endorsed the Trustee's certifi- cate, duly executed, shall be secured by this indenture, or entitled to any lien, right, or benefit thereunder, and such certificate of the Trustee upon any such bond executed by the Realty Company shall be conclusive evi- dence that the bond so certified has been duly issued thereunder, and that the holder is entitled to the benefit of the trust hereby created. Before certifying or delivering any bond, all coupons thereon then matured shall be cut off, canceled and delivered to the Realty Company. Second. — ^AU bonds secured hereunder may be registered in the name of the holder when so requested by such holder, upon bond transfer books which the Realty Company shall maintain and keep for such purpose at the office of the Trustee in the City of New York as long as any of the said bonds shall remain outstanding. After such registration such bonds shall be transferable only upon such transfer books, by the registered owner or his lawful attorney, and any such transfer shall be noted on the bonds by the endorsement of the Transfer Agent hereinafter appointed. 328 NEW YORK CORPORATIONS. After registration of any bond, the principal thereof shall be payable only to the registered owner, but the coupons shall be payable to the bearer upon presentation and surrender thereof, and shall be negotiable by de- livery as if such bond was not registered. Any registered bond may at any time be transferred by the registered owner thereof, upon said transfer books to bearer, and such transfer shall be noted upon said bond, and the said bond shall thereupon be negotiable by delivery as if it had never been registered, and each of said bonds shall continue subject to successive registration and transfer to bearer at the option of the holder thereof. For the purpose of registering and transferring said bonds as above set forth, the Metropolis Trust Company of the City of New York is hereby appointed and constituted Transfer Agent of the said Realty Company. Third.— Until default shall be made by the Realty Company, its successors or assigns, in the payment of the principal or interest of the bonds hereby secured, or any of them, or in the performance of any of the covenants, agreements and provisions on its part to be kept and performed, as herein set forth, the Realty Company, its successors and assigns, shall be permitted to possess, manage, use and occupy the premises affected hereby, with all their appurtenances and belongings in all respects as fully as if this indenture had not been made. Fourth. — If the Realty Company shall well and truly pay to the holders thereof the principal of the bonds secured hereunder and the interest moneys becoming due thereon respectively at the time and in the manner specified in the said bonds and coupons thereto aiinexed, and shall keep and perform all the covenants, agreements and stipulations on its part in said bonds or in this agreement contained, then these presents and the trust hereby created shall cease and determine, and the said Trustee shall in such event release and discharge this mortgage and the property and premises encumbered thereby. The Trustee may also execute such release and discharge upon production by the Realty Company or its assigns of all the bonds issued hereunder, together with the coupons there- to belonging, canceled or for cancellation, and the Trustee shall not be under any liability or obligation to inquire into the holding of said bonds by the Realty Company or its assigns. Fifth. — The said Realty Company, while it shall be in possession of the mortgaged premises, and while there shall be no existing default in respect of the payment of the principal or interest of any of the said bonds of the Realty Company, or in the performance of any of the covenants herein, may, with the consent in writing of the Trustee, sell any portion of the premises heretofore granted. If, in the opinion of the Board of Directors of the Realty Company, such sale or change shall be expedient, said opinion shall be expressed in a resolution of the said Board, and the Trustee may upon delivery to it of a copy of the resolution of the Board of Directors to that effect release from the lien and operation of this indenture any part of the premises hereby mortgaged, provided that the purchase money from such sale or sales shall be paid to the said Trustee for application to the discharge of the bonds and coupons hereunder issued, as set forth in Section Fifteenth, or to be set aside to be applied by the Realty Com- pany in payment for other real or personal property or in betterments of or additions to some part of the premises mortgaged hereby, and until so applied shall be held by the Trustee. Any new property so acquired by the Realty Company shall ipso facto become and be subject to the lien of this indenture as fully as if specifically mortgaged or pledged hereby, but BOND ISSUES. 329 if requested by the Trustee the Realty Company shall execute special instruments of mcumbrance upon such properties. Sixth.~The Realty Company covenants and agrees that it shall and will promptly pay the interest and the principal of the bonds hereby se- cured, at the time and in the manner specified in said bonds and the coupons thereto attached, without deduction from either such principal or mterest for or on account of any United States, State, municipal or other tax or taxes which the Realty Company, its successors or assigns may be required to pay or deduct therefrom, and the Realty Company hereby covenants and agrees to pay all such tax or taxes. The Realty Company further covenants and agrees that it shall and will, from time to time, promptly pay and discharge, or cause to be paid and discharged, all taxes, rates, levies or assessments and charges, ordinary and extraordinary, levied or imposed upon the premises and properties mortgaged to the Trustee to secure the payment of the bonds issued here- under, or on any part thereof, the lien of which might or could be held prior or equal to the hen of this indenture, so that the same shall not fall into arrears and so that the priority of this indenture given to secure said bonds shall be preserved. The Realty Company further covenants and agrees that it will not create nor suffer any mechanic's, laborer's or other similar liens to be created upon the premises and property mortgaged to secure the bonds issued hereunder, whereby the Hen of this indenture might or could be impaired, until the bonds so secured hereunder, with all the interest ac- crued thereon, shall have been fully paid and satisfied. Seventh. — A sinking fund shall be created for the redemption of the bonds issued hereunder. It shall consist of and be maintained by the payment to the Trustee by the Realty Company on the first day of May, 1914, and on each succeeding first day pi May thereafter until the redemp- tion of all the bonds issued hereunder, of twenty-five dollars for each thousand dollars of bonds then issued and outstanding, such moneys so paid to be used in the purchase of outstanding bonds at the lowest price at which they may be had, not exceeding, however, one hundred and ten per centum of the face value of said bonds, plus accrued interest, and if bonds cannot be so purchased, such money shall be used in redemption of bonds outstanding as provided and set forth in Section Fifteenth. Eighth. — The Realty Company covenants and agrees that this deed of trust delivered to the Trustee shall be a first mortgage upon the premises and property affected thereby; that the same shall be duly executed and recorded in the proper office of registry in the County of New York where the said premises are situated, and that the Realty Company will execute and deliver such further deeds, transfers, pledges and assurances as the Trustee, under the advice of counsel learned in the law, shall reasonably require for the better accomplishing of the purposes and provisions of this indenture. Ninth. — The Realty Company covenants and agrees that all buildings, structures and machinery situated upon the properties affected by this mortgage given to secure the bonds issued hereunder, shall be kept insured during the entire term of this indenture to the amount of insurance on such properties usually allowed by insurance companies, against loss or damage by fire, and against loss or damage from boiler explosions, and that the said Realty Company shall and will pay all premiums upon all policies for such insurance. All such policies shall be made payable to the Trustee, and shall be deposited with it for the benefit and protection of the bond- 330 NEW YORK CORPORATIONS. holders should any loss occur from fire or boiler explosion during the term of this indenture. Any payments of insurance made under such policies may be applied directly by the Trustee to the repairing or replacement of the property damaged or destroyed, or it may authorize the Realty Com- pany to contract for such repairs or replacements, and pay part or all of the cost thereof from said insurance moneys. The Trustee may in its discretion employ such insurance moneys in the purchase or redemption of outstanding bonds as set forth in Section Fifteenth, instead of expend- ing the same for repairs or replacement of property damaged or destroyed. Tenth. — The Realty Company covenants and agrees that it shall and will at all times keep the buildings, structures and appurtenances thereto, or any replacement or replacements thereof in good order and repair ; pro- vided, however, that in the event of total destruction of any building, the Realty Company may, with the consent of the Trustee, add to the insur- ance moneys received thereon by the Trustee sufficient cash payments to release the special property upon which such building was situated, under the terms set forth in Section Fifth, whereupon the Trustee shall release the said property and the Realty Company may dispose of the same at its discretion. Eleventh. — The Realty Company covenants and agrees that when and as the coupons attached to the bonds issued hereunder are paid, the coupons shall be canceled, and that no purchase or sale of the said cou- pons or advance or loan upon the same, made on behalf of, or at the request of, or with the privity of the said Realty Company, and no re- demption of the said coupons, or any of them, by any guarantor of the payment of the same, shall be taken or operate as keeping the said coupons alive or in force, under this mdenture as against the holders of the bonds secured hereunder and of the coupons annexed thereto. Twelfth. — In case default shall be made in the pajrment of interest on any of the bonds issued hereunder, and such default shall continue for a period of six months after demand, or in case default shall be made in the performance of any other covenant or condition hereby required to be kept or performed by the Realty Company, and if the same shall continue for a period of six months after demand made for such performance, the Trustee may, and, upon the written request of the majority in amount of the holders of the bonds then outstanding, shall by written notice to the Realty Company, declare the principal of all the bonds hereby secured, then outstanding, to be, and the same shall thereupon become, immediately due and payable. Thirteenth. — In case default shall be made in the payments of the principal or interest of any of the said bonds when the same is due and payable according to the tenor thereof, or if default shall be made in the performance of any other covenant or condition, hereby required to be kept or performed by the Realty Company, and if any such default in pay- ment or performance shall continue for a period of six months after demand by the Trustee, then and in every such case the Trustee, or its successors in the Trust, may by its attorneys and agents enter into and upon all and singular the premises hereby conveyed, and each and every part thereof and operate and conduct the business of the said Realty Com- pany in all respects as the said Realty Company might do in possession of the same; and may collect and receive all rents, income, revenue and profit to be derived therefrom, and after deducting all proper and necessary outlays and expenses as well as a just compensation for its own services and for the services of such attorneys, agents and assistants as it may, in BOND ISSUES. 33^ its discretion, employ for any of the purposes aforesaid, said Trustee shall apply the rest and residue of the moneys received by it pro rata to the payment of the interest due upon such of said bonds as shall then be out- standing. In any such case if payment of all interest and any principal due shall be made in full and no suit to foreclose this mortgage shall have been begun or sale made, the said Trustee shall restore the possession of the premises so entered to the Realty Company without prejudice to similar entry later in case of similar default. Fourteenth. — In case default shall be made in the payment of the principal or interest of the said bonds, when the same is due and payable according to the tenor thereof, or if default shall be made in the perform- ance of any other covenant or condition hereby required to be kept or performed by the Realty Company, and if any such default in payment or performance shall continue for the period of six months after demand, the Trustee may, and upon written request of the holders of a majority in amount of the registered bonds then outstanding, being first indemnified by them to its satisfaction, shall sell or foreclose upon, according to the proceedings by law prescribed in this State, all or any portion of the property held by it under this indenture, and such proceedings of sale or foreclosure shall be a perpetual bar both at law and in equity against the Realty Company and against all persons claiming by, from or under it. After deducting from the proceeds of such sale or foreclosure, the proper allowance for all expenses thereof, including attorney's and counsel fees, and all other expenses or advances which may have been made or incurred by said Trustee in respect of the said property or the appurtenances there- to, and all payments which may have been made by it for taxes or assess- ments, or in satisfaction of charges and liens, prior to the lien of the mort- gages and deeds of trust to the Trustee thereon, or for insurance, as well as reasonable compensation for its own services, the Trustee shall apply the proceeds to the payments of such bonds and the coupons thereon as may be at the time unpaid, without giving preference or priority to one bond over another, but ratably to the aggregate amount of such unpaid principal and accrued and unpaid interest, and if any surplus remain after the payment in full of the principal and interest of said bonds, then the Trustee shall transfer and pay over such surplus to the Realty Company. Fifteenth. — It is covenanted and agreed between the parties hereto and any future holders of the bonds that the said bonds are redeemable, at the option of the party of the first part, on any interest day after the first day of May, 1914, at one hundred and ten per cent, of their face plus accrued interest, provided that thirty days' notice of such redemption shall be given the holders thereof, by notice published once a week for four consecutive weeks prior to such redemption, in a newspaper published in New York City. If said bonds are registered, then a copy of the said notice shall be sent to the post-office address of the parties in whose names said bonds are registered. r • , i_ j . t. j i Whenever it is desired to redeem any of said bonds, the Board ot Directors of the Realty Company shall pass a resolution setting forth the amount of bonds (at their par value) desired to be redeemed. The Presi- dent of the Realty Company shall thereupon draw by lot the numbers of the bonds to be redeemed, and he shall thereupon certify that such bonds were drawn for redemption, which certificate shall be entered upon the minutes of the Realty Company, and a duplicate copy shall be delivered to the Trustee Said bonds having been so drawn for redemption shall become due and payable on the succeeding interest payment date, provided that the date of first publication and the date of mailing notice to register- 332 NEW YORK CORPORATIONS. ed holders of bonds shall have been not less than thirty days prior to such interest payment date, and the said bonds shall from such interest pay- ment date cease to draw interest, and the said Realty Company may, upon the deposit of the proper amount with the Trustee, be privileged to con- sider said bonds as paid and canceled. Sixteenth. — The Trustee may resign the trust hereby created upon giving sixty days' notice in writing to the Realty Company. In case of the resignation of the Trustee, or of its dissolution or insolvency, or removal for cause as Trustee hereunder, it shall be the duty of the Realty Com- pany to call a meeting of the bondholders by printed notice, published in two of the public newspapers of New York City, once a week for three consecutive weeks next preceding such meeting, calling such meeting to be held in the said City of New York, and by mailing notice of the same to each of the registered bondholders not less than ten days before the date of such meeting. At the time and place specified in such notice, the holders of said bonds, in such meeting assembled, shall organize and proceed to elect a suitable corporation to act as Trustee under this agreement, and a majority in amount of such bonds legally represented at such meeting shall be competent to elect such new Trustee, and the corporation so elected shall immediately upon election and on its acceptance in writing of such trust become vested with all the estate, trusts, rights, powers and duties of the present Trustee herein, and shall be entitled to receive from the present Trustee or its legal representatives all moneys, mortgages and assurances appertaining or relating to this trust and the due execution thereof. Seventeenth. — It is covenanted and agreed by the parties hereto, and all the holders of bonds hereunder, as conditions precedent to the accept- ance of the said trust by the said Trustee, or any successor thereto, as follows : The Trustee shall not be answerable for any act, default, neglect or misconduct of any of its agents or employees, by it appointed or employed, in connection with the execution of any of the said trusts, nor in any other manner answerable or accountable, under any circumstances what- soever, except for bad faith. The recitals contained herein, or in the bonds, as to priority of lien, or any other matter whatsoever, are made by and on the part of the Realty Company, and the Trustee assumes no responsibility for the correctness of the same. It shall not be the duty of the Trustee to file or record at any time this deed of trust or any other mortgages or deeds of trust that may be required hereunder, nor to do any other act or acts suitable and proper to be done for the creation or continuance of the lien or liens thereby intended, nor to effect insurance against fire or explosion, nor to renew any policies of insurance, nor to keep itself informed as to the payment of any taxes or assessments, nor to require such payments to be made. The Trustee may, however, in its discretion, do any or all of these things. Neither shall the Trustee be held responsible for the nature or amount of the security mortgaged to it here- under. The Trustee shall not be compelled to take any action, as Trustee, under this mortgage, unless properly requested and in every respect indem- nified to its full satisfaction. The Trustee shall be entitled to reasonable compensation for all services rendered hereunder or in connection with the trust. This compensation, together with any and all necessary and rea- sonable expenses, charges, counsel fees and other disbursements incurred by the Trustee in the discharge of its duties, as such, shall be paid by the Realty Company, or out of the trust estate upon which they are hereby made a lien, prior to that of the bonds issued hereunder. The Trustee BOND ISSUES. 333 shall be protected in acting upon any notice, consent, request, certificate, bond or any other paper or document believed by it to be genuine and signed by the proper party. The Trustee shall be held responsible for the due authentication by certificate of the bonds issued hereunder, and for the custody and disposition, as herein provided, of the securities and moneys received by it hereunder. Eighteenth. — It is covenanted and agreed between the parties hereto that the words "Realty Company'' when used in these presents mean the party issuing the bonds herein referred to ; that the word "Trustee" means the corporation charged with the execution of the trust herein, whether the same be the Metropolis Trust Company of the City of New York, or any successor or successors in the trust hereby created; that the word "bonds" means the bonds issued hereunder; and the words "Trustee," "bond," "bondholder" and "holder" shall include the plural as well as the singular number and the term "majority" shall signify the majority in amount. Nineteenth. — It is covenanted and agreed that this indenture may be executed in several counterparts, each of which so executed shall be deemed to be an original, and such counterparts shall together constitute but one and the same instrument. In Witness Whereof, the Remsen Realty Company has caused its corporate name to be hereunto subscribed by its President and its corporate seal to be affixed and attested by its Secre- tary and the Metropolis Trust Company of the City of New York, in token of its acceptance of the trust hereby created, has caused its corporate name and seal to be here- unto affixed by its President, and attested by its Secretary on this twelfth day of April, one thousand nine hundred and nine. Remsen Realty Company, f CORPORATE \ By Franklin Moffat, I SEAL. I President. Attest : Charles E. Warren, Secretary. Metropolis Trust Company of the City of New York, As Trustee. f CORPORATE 1 By STANDFORD NiVENS, I SEAL. I President. Attest : BarTlEy HaydEN, Secretary. {Notarial acknowledgment by president of each corporation.') (See Form 58 for acknowledgment.) It will be understood that the preceding form has, on account of space limits, been reduced to its simplest terms. 334 NEW YORK CORPORATIONS. The form as given is, however, a good working model, has received the endorsement of some of the leading corporation attorneys of the state and will be found a safe and excellent basis upon which to build up the more elaborate instruments when required. PART III.— TABLES. Table No. i. Organization Expenses and Franchise Tax. Capitalization. Organization Tax. 500 $ I.OO.... 2,000 I.OO 2,500 1.25.... 3.000 1.50.... 4,000 2.00. . . . 5.000 2.50.... 6,000 3.00 7,000 3.50.... 7.500 3-75---- 8,000 4.00. . . . 9,000 4.50 10,000 5.00.... 12,000 6.00 15,000 7.50.... 20,000 10.00. . . . 25,000 12.50.... 40,000 20.00. . . . 50,000 25.00. . . . 60,000 30.00.... 70,000 35-00.... 75.000 37.50.... 80,000 40.00 100,000 50.00 150,000 75.00.... 200,000 100.00 250,000 125.00. . . . *" Total Expense" includes org-anization tax, fee dental fees. See Ch. II, '* Kzpenses of Incorporation." t See Ch. XIV, " State Taxation." 335 Total Annual Franchise Expense.* Tax, 6^ Dividend.f 16.00 $ .75 16.00. . . . . 3.00 16.25 3-75 16.50 4.50 17.00. .,. . . 6.00 17-50 7-50 18.00. . . . . 9.00 18.50 10.50 18.75...... 11-25 19.00 12.00 19-50 13.50 20.00 15.00 21.00. ... . . 18.00 22.50 22.50 25.00 30.00 27-50 37-50 35.00 60.00 40.00 75-00 45.00. . . .,. 90.00 50.00 105.00 52.50 112.50 55.00 120.00 65.00 150.00 90.00 225.00 115.00 300.00 140.00 375-00 to Secretary of State and all inci- 336 NEW YORK CORPORATIONS. Organization Expenses and Franchise Tax (continued). Capitalization. 300,000 . . . 400,000. . . 500,000. . . 700,000. . . 1,000,000. . . 1,500,000. . . 2,000,000. . . 10,000,000. . . Organization Tax. . . $ 150.00. . . 200.00. . . 250.00. . . 350.00... 500.00 . . . 750.00. . . 1,000.00. . . 5,000.00. . . Total Expense.* $ 165.00.. 215.00. . 265.00. . '?6=;.oo. . Annual Franchise Tax, (/f, Dividend.t ...$ 450.00 600.00 750.00 I.O^O.OO 515.00.. 765.00.. 1,015.00.. 5,015.00.. 1,500.00 2,250.00 3,000.00 . . . 15,000.00 *"Total Expense" includes organization tax, fee to Secretary of State and all inci- dental fees. See Ch. II, " Expenses of Incorporation." tSee Ch. XIV, " State Taxation." Table No. 2. State Fees. (Executive Law.) (a) FEES TO SECRETARY OF STATE. § 26. Fees. The secretary of state shall collect the following fees: 2. For searching the records in his office for any one year and for every other year in which such search is made, six cents. 3. For a copy of any paper or record not required to be certified or otherwise authenticated by him, ten cents per folio. 4. For a certified or exemplified copy of any law, record or paper, fifteen cents per folio, and one dollar additional for the cer- tificate under seal of his office, attached thereto. 5. For a certificate under the great seal of the state, one dollar. 6. For recording a certificate, notice or other paper required to be recorded, except as otherwise provided by this section, fifteen cents per folio. 7. For a certificate of the official character of a commissioner of deeds residing in another state or a foreign country, twenty-five cents, and for every other certificate under the seal of his office, one dollar. 12. For filing and recording the original certificate of incorpora- tion of a railroad corporation for the construction of a railroad in a foreign country, fifty dollars; for filing the original certificates of every other railroad corporation, twenty-five dollars; for filing the original certificate of any other stock corporation, ten dollars; for filing any original certificate of incorporation drawn under article three of the membership corporations law, ten dollars. TABLES. 337 State Fees (continued). 13. For filing the certificate of a foreign corporation desiring to do business in the state, ten dollars. 17. For a certificate under subdivision three of section nine of the general corporation law, ten dollars. (b) FEES TO COMPTROLLER. § 42. Fees. The comptroller shall collect the following fees: 1. For copies of all papers and records not required to be cer- tified or otherwise authenticated by him, ten cents per folio. 2. For certified or exemplified copies of all records and papers, fifteen cents per folio. 3. For every certificate under the seal of his office, one dollar. Table No. 3. Local Fees. (Code of Civil Procedure.) FEES TO COUNTY CLERKS. § 3304. Fees of county clerks generally. A county clerk is en- titled, for the services specified in this section, except where another fee is allowed therefor by special statutory provision, to the following fees to be paid in advance; * * * For a copy of an order, record, or other paper, entered or filed in his office, eight cents for each folio. * * * For recording any instrument, which must or may legally be re- corded by him, ten cents for each folio. * * * For filing any paper required by law to be filed in his office, other than as expressly provided for in this section, six cents. 338 NEW YORK CORPORATIONS. Table No. 4. General Schedule of Fees. Fees payable to state and county officials for filings, recordings or certifications in connection with corporate proceedings, as listed below. Fees may be paid in cash, by money order, New York Exchange or certified check. Incorporation. (See Chap. II.) State Treasurer. Organization tax of one-twentieth of one per cent, on authorized capitalization. Sec'y of State. Filing charter, $10; recording, 15 cents per folio; certified copies, 15 cents per folio and $1 additional for office seal of Secretary of State; exemplification under Great Seal of State, $1 additional.* County Clerk. Filing fee, 6 cents for each instrument; re- cording fee, 10 cents per folio; certified copies, 8 cents per folio. Consolidation. (See § 70.) Fees same as on original incorporation, ex- cept that organization tax is paid only on cap- italization in excess of the aggregate capital of the constituent corporations. Amendments to Charter. (See §§ 72, 72a.) State Treasurer. No fees except on amendments increasing capital stock when one-twentieth of one per cent, must be paid on amount of increase. Sec'y of State. No filing fee; other fees same as for orig- inal certificate except for amendment changing corporate name, which see. County Clerk. Same as for original certificate, except for change of corporate name, which see. Comptroller. Amendments decreasing capital stock re- quire Comptroller's certificate in duplicate. Fee for each certificate, $1. Payment of One-Half Capital Stock. (See § 74.) Sec'y of State. Fee for recording certificate, 15 cents per folio. County Clerk. Fee for filing certificate, 6 cents; recording same, 10 cents per folio. • Copies 01 charters certified by the Secretary of State must be authenticated by the office seal. Exemplified copies are in addition impressed with the Great Seal of State. In any case the fees are 15 cents for each folio— loo words— contained in the instrument and $1 for each seal affixed. For instance a charter containing 10 folios would cost , if certified , $2.50 ; if exemplified, $3.50. Exemplified copies are usually required for filing in other states or in foreign countries. TABLES. 339 General Schedule of Fees (continued). Change of Corporate Name. (See § 72.) Sec'y of State. Certificate that name does not conflict, $1; for recording affidavit of publication of order, 15 cents per folio. Copy of petition and notice of motion must be filed to reserve proposed name pending the proceedings, as must also copy of court order, certified by county clerk. but no fees are payable therefor. County Clerk. Fee for filing order, 6 cents; 10 cents per folio for recording same and 8 cents for cer- tified copy; also 6 cents for filing affidavit of publication of order and 10 cents per folio for recording same. Merger of Corporations. (See § 71.) Sec'y of State. Fee for recording certificate, 15 cents per folio. Reports, — Annual, Comptroller's or Local Tax. (See Chap. XVI.) No fees. Report, Inspectors of Election. (See § 108.) County Clerk. Fee for filing, 6 cents. Dissolution without Judicial Procedure. (See § 56.) Sec'y of State. No filing fees. Duplicate certificates of filing, $1 each. County Clerk. Fee for filing Secretary of State's certifi- cate of filing, 6 cents. (10 cents per folio for recording is also exacted.) Dissolution by Incorporators. (See § 56.) Sec'y of State. Certificate must be filed but no fees are paid. County Clerk. Filing fee, 6 cents; recording, 10 cents per folio. Foreign Corporations, Admission of. (See Chap. XVII.) Sec'y of State. Filing fee, $10; certificate of authority, $1. (Revocation and designation of new agent, or notice of change of agent's office must be filed in office of Secretary of State, but no fees are paid.) Consent to Mortgage. (See § 67.) County Clerk. Fee for filing stockholders' consent, 6 cents; recording, 10 cents per folio. Transfer of Stock. (See § 87.) Tax of 2 cents on each $100 of face value or fraction thereof. Payable by stamp affixed to instrument of transfer. 340 NEW YORK CORPORATIONS. Table No. 5. Corporate Calendar The calendar which follows is arranged for a New York corpora- tion having its principal office in New York City and holding its an- nual meeting of stockholders on the second Tuesday of January at 3 P. M., with quarterly meetings of directors on the second Wednesdays of January, April, July and October at 4 P. M. Its by-laws require the statutory publication notice of annual meetings and twenty days' written notice, with five days' notice of directors' meetings. Its stock book is closed twenty days before the annual meeting. CORPORATE CALENDAR of the McFOREST CONTRACTING COMPANY, of New York City. 1909. January. 2nd. Franchise Tax Payable. Must be paid before January isth. Based upon November report to State Comptroller. Amount of tax is notified to Company by State Comp- troller. Checks should be made payable to State Treas- urer. (See § 138, "Franchise Tax.") Publication Notice of Annual Meeting. Must be published in a newspaper of New York County once each week for two successive weeks immediately preceding the annual meeting. (See § loi (b), "Notice of Annual .Meeting.") 8th. Notify Directors of meeting to be held January 13th. If directors are elected at annual meeting (January 12th), this notice — unless by-laws provide that regular meetings of directors are valid notwithstanding any irregularity of notice — will be vitiated as to all directors elected at such meeting and must be replaced by waiver of notice signed after election by all the newly elected directors. (See § loi (b), "Notice of Annual Meeting.") nth. City Assessments made for 1909 (second Monday in Janu- ary). Books open for correction till March 31st inclusive. If notice of assessment is not received in the early part of January, application should be made for same. Tax Commissioners usually send notice, but are under no ob- ligation to do so. (See Chap. XV, "Local Taxation.") (See Form 68, "Local Tax Report, New York City," for form of application for revision and correction of assess- ments.) TABLES. 341 Corporate Calendar (continued). I2th. Annual Meeting of stockholders at 3 P. M. 13th. Directors' Meeting at 4 P. M. iSth. Last Day for payment of State franchise tax. Also on this date unpaid city tax bills for personal taxes may be placed in marshal's hands for collection. i6th. Annual Report. Must be filed during January and not later than January 31st with Secretary of State. No filing fees. Blanks not supplied by officials. No penalty is provided for failure to file this report unless such filing is re- quested by some stockholder or creditor of the Com- pany, and not then if the report is filed within thirty days after the request is made. (See § 174, "Annual Report.") 30th. Last Day for Filing annual report, January 31st falling on Sunday. March i6th. Statement and Application for revision of unsatisfactory as- sessments, if not already filed, should be sent in to the Commissioner of Taxes and Assessments. Will not be received after March 31st. Blanks furnished by Com- missioners. No filing fees. (See Form 68.) 31st. Last Day for Filing application for revision of city assess- ments. April 9th. 14th. Notify Directors of meeting to be held April 14th. Directors' Meeting at 4 P. M. July pth. Notify Directors of meeting to be held July 14th. 14th. Directors' Meeting at 4 P. M. October 4th. 8th. 13th. i6th. City Taxes Payable. Statement of amount may be obtained from Assessors' office. Notify Directors of meetings to be held October 13th. Directors' Meeting at 4 P. ;M. City Taxes. If not paid by November ist, interest must be paid at the rate of 7% per annum, computed from the first Monday in October. (See Ch. XV, "Local Taxa- tion.") November 1st. Comptroller's Report. Must be sent in on or before No- vember ISth. Blanks furnished by and report made to State Comptroller. No filing fees. Penalty may be in- curred by failure to make this report. (See § 17s, "Re- port to State Comptroller;" also Form 65.) 342 NEW YORK CORPORATIONS. Corporate Calendar (continued). December. 22nd. Notify Stockholders of annual meeting to be held January II, 1910. (See § loi (b), "Notice of Annual Meeting.") Close Transfer Books for annual meeting of January 11, 1910. (See § 105, "Closing Stock Books.") 28th. Publication Notice of Annual Meeting. Notice of meeting to be held January II, 1910, must be published in a news- paper of New York County once each week for two suc- cessive weeks immediately preceding the annual meet- ing. (See § loi (b), "Notice of Annual Meeting.") Table No. 6. Comparative Section References. BUSINESS CORPORATIONS LAW. Laws of 1909, Chapter 12, constituting Chapter 4 of the Con- solidated Laws. Nmnbers of same or Present eiinivalent sections Section prior to adoption of Kmntera. Consolidated Laws. Art. I, § I § I Art. 2, § 2 part § 2 part (SeeG. C. L., § 10) 3 3 4 4 5 5 6 6 7 8 Numben of same or eqniTalent sections Section prior to adoption of Nnmbers. Consolidated Laws. Art. 2 (Cont'd). § 8.. § 9 9 10 10 II II 12 12 13 13 H 14 15 15 16 16 17 TABLES. 343 Table No. 7. Comparative Section References. GENERAL CORPORATION LlAW. Laws of 1909, Chapter 28, constituting Chapter 23 of the Con- solidated Laws. Except where otherwise noted, section numbers given in the second column of the following table are of the General Corporation Law as it existed prior to adoption of the Con- solidated Laws. Section references preceded by "C." are to Code of Civil Procedure. Section references to the General Corporation Law when brought in out of numerical order — whether in the first or second column — are enclosed in paren- theses and will be found entered again in their proper numer- ical position. References to the Code of Civil Procedure and to Session Laws are those supplied by the Board of Statutory Consolida- tion. References for Articles 8 and 11 of the General Cor- poration Law are omitted from the table but will be found as section notes in text of the law in Part IV of the present volume. Present Section Nnmbers. Art. I, § I.. 2. . 3-- Art. 2, § 4.. Numbers of same or e^uivaleDt sections prior to adoption of Consolidated Laws. Present Section Numbers, Numbers of same or equivalent sections prior to adoption of Consolidated Laws. 6*. ?■■ 8.. I 2 part 3 4 5 6 7 8 Aril. 2 (Confd). § 9* § 9 10 10 II II 12 12 13 13 14 14 15 15 part 16 16 C, 432 part * Material from Session Laws or Revised Statutesis incorporated. For source of same see section foot notes in text of General Corporation Law, Part IV, of the present volume. 344 NEW YORK CORPORATIONS. General Corporation Law (continued). Present Section Numbers. Art. 2 (Cont'd). § 17* 18* Nnmbers of same or equivalent sections prior to adoption of Consolidated Laws. 19^ 20. 21. 22. 23 20 part 24. 20 part 25 20 part 17 18 19 .26. 27. 28. 29. 30- 31- 32- 33- 34- 35- 36. 21 22 23 24 25 26 27 28 29 30 31 37 32 part 38 32 part 39 32 part 40 32 part 41 32 part (321) 33 (330) 34 (Omitted) 35 (331) 36part Present Section Numbers. Numbers of same or equivalent sections prior to adoption of Consolidated Lavs. Art. 3 (Confd). § 61 C, § 2412 part 62 C, 2413 part 63 . . . .... . .C, 2414 part 64 C, 2415 65 C., 2416 Art. 4, § 70 C, § 3390 part 71- 72. 73- 74- 75- 76. 38 39 40 41 91... 92... Art. 6, § 100. . loi .. 102.. 103.. 104.. 105.. 106.. 107*. 108*. 109.. lie. .C, § 241 1 III. 112. 113- .C. .c, c, .c, .c, .c, .c, 3391 3392 3393 part 3393 part 3394 3395 3396 Art. 5, § 90* C, § 1781 .C, ,c., .c, .c, .c, ?,c.'' .c, .c, 1782 1783 §1784 1785 1786 1787 1788 part 1789 1 788 part 42 ... . 43 ... . (320) . . . 44.... Art. 3, § 60... * Material from Session I^awsor Revised Statutes is incorporated. For source of same see section foot notes in text of General Corporation I^aw, Part IV, of the present volume. .c, .c, .c, .c, .c, 1790 1 791 1792 1793 1794 TABLES. 345 General Corporation Law (continued). Numbers ot same or equivalent sectioDs pnor to adoption of Consolidated Laws. Present Section Nmabei^'of same or equivalent sections prior to adoption of GonsoUdated Laws. § 1795 1796 § 1797 1798 1799 1800 1801 1802 1803 part §2419 2420 part 2420 part 2420 part 2421 2422 2423 part 2431 part 2423 part 2424 part 2425 2423 part 2423 part 2423 part 2426 part 2426 part 2426 part 2427 part 2427 part 2428 2429 part Art. p (Cont'd). g 192 193 194 195 Art. 10, § 220. . .S. 221 . . .S. , § 2429 part , 2430 , 2429 part , 2431 part L., § 61 L., 57 ,§ Present Section Numbers. Art. 6 (Cont'd). § 114 c, 115 c., Art. 7, § 130 C, 131 c, 132 C, 133 iC., 134 C, 135 c, 136 c, Art. 9, § 170 C, 171 c, 172 C, ^72, C, 174 c, 175 c, 176 C, 177 c., 178 c., 179 c., 180 C, 181 C, 182 C, 183* 184...... C, 185 C, 186 c, 187 c, 188 c, 189 c, 190 c, 191 c., * Material from Session Laws or Revised Statutes is incorporated. For sonrce of same see section foot notes in text of General Corporation Law, Part IV, of the present volume. Art. 12, § 300- • 301... 302. . . 303- • ■ 304. . . 305- • ■ 306. . . 307. . . 308... 309... 310* 311* 312* 313* 314* 315* 316* Art. 13, § 320 321 Art. 14, § 330 331 332 (new) 804 80s 806 807 808 809 part 810 811 812 part 813 part §(40) (33) §(34) (36 pa^-t) 346 NEW YORK CORPORATIONS. Table No. 8. Comparative Section References. STOCK CORPORATION LAW. Laws of 1909, Chapter 61, constituting Chapter 59 of the Con- soHdated Laws. Except where otherwise noted, section numbers given in the second column of the following table are of the Stock Cor- poration Law as it existed prior to the adoption of the Con- solidated Laws. Section references when brought in out of numerical order — whether in the first or second column — are enclosed in parentheses and will be found entered again in their proper numerical position. Numbers of same or Numbers of same or Present equiTalent sections Present equivalent seetions Seotion prior to adoption of Section prior to adoption of Numbers. Consolidated laws, Numbers, Couaolidated laws. ^rt. I, Art. 3, I § I part § 25 § 20 Art. 2, 26 21 § 5 § I part 27 22 6 2 28 23 7 (8) 29 25 8 (40 last part) (51) 26 9 3 30 27 ^° 4 31 28 II s 12 6 32 29 13 (59) 33 (53) 14 7 34 30 (7) 8 35 31 15 (58) (18) 32 16 (33 istpart) (16) 1 _ 23 17 (33 2nd part) (17) J 18 (32) (Repealed) 34 TABLES. 347 Stock Corporation Law (continued). Nmuliers of same or NumberB of same or Present equivalent sections Present equivalent sections Section pnor to adoption of Seotion pnor to adoption of Numbers, Consolidated Lavs, Numbers. ConsoUdatea Laws, Art. 4, ^rt. 4 (^Cont'd). § 5° § (40 istpart) § 67 § 50 51 (26) 68 51 52 (40 2nd part) 69 52 (50) ) 70 (60) (52) v.... 40 (33) 53 (8) 3 (56)) 53 41 is?)}--- 54 (55) 42 (58)) 54 43 (59) 55 55 (42) (65) 56 56 (54 ist part) (Omitted) 57 57 (542nd part) (See G. C. L., § 221) 58 (54 3rd part) (15) 58 59 (55) (13) 59 60. ...... (62) (70).. . . . 60 61 (47) (Omitted) 61 62 44 (See G. C. L., § 220) 63 45 (60) 62 64 46 . ^ 6l (56) ^^^-S. (61) 47 § 80 (new) 66 48 81 (new) 348 NEW YORK CORPORATIONS. Table No. g. Comparative Section References. TAX LAW. Laws of 1909, Chapter 62, constituting Chapter 60 of the Con- soHdated Laws. The following table presents only those sections of the Tax Law which are given in whole or in part in the text of the present volume. (See Part IV.) Present Section Numbers. Art. I, § 2. 4- 7- II . 12. Art. 2, § 27.. 28., 32-. Art. 9, §180 181. 182. 183. 184. 186. 192. 193- 194. 195- Numbers of same or eq^uivalent sections prior to adoption of Consolidated Laws. . § 2 4 7 II 12 § 27 28 31 .,§ 180 181 . 182 183 , 184 . 186 . 189 . 190 . 191 . 192 Present Section Nninbers. Art. p ( Confd) . § 196 197 198 199 200 201 202 203 205. Nmnbera of same or eqaiT^ent sections prior to adoption of Consolidated Laws. ■ § 193 ■ 194 ■ 195 . 196 • 197 . 198 ■ 199 . 200 , . 202 207 282 part Art. 12, §270 271.. 272., 273- 274., 275- 276., 277. 278.. 279. •§315 316 317 . 318 319 . 320 , 321 . 322 323 • 324 TABLES. Table No. lo. Comparative Section References. 349 CODE OF CIVIL PROCEDURE. Sections. ¥liere found in General Corporation Law. Code 91 92 100 lOI 102 103 f 1 04 part [06 part 105 109 no III 112 113 114 IIS 130 131 132 133 134 135 136 300 part. part, part. The following table includes only those sections of the Code of Civil Procedure which, on the adoption of the Con- solidated Laws, were incorporated in whole or in part in the General Corporation Law. Where found in General Corporation Law. § 301 302 303 304 305 306 307 308 309 , 60 61 62 63 ■ 64 ■ 65 . 170 f 171 { 172 ti73 ■ 174 • 175 176 178 181 182 184 § 432 part § i6part 716 part 243 1781 , 90 part 1782 1783 1784 1785 1786 1787 1788;.... 1789 1790 1791 1792 1793 1794 1795 1796 1797 1798 1799 1800 1801 1802 1803 1804 1805 1806. 1807 1808 1809 1810 181 1 1812 1813 241 1 2412 2413 2414 2415. 2416. 2419. 2420. 2421 . 2422. part, part, part. 2423. 350 NEW YORK CORPORATIONS. Code of Civil Procedure (continued). Wun found Vkere found Code in General Code inGenoial Sections, Corporation Imi. Sections. Coiponition Law. § 2424 §179 § 2411.. ../§ ^77 f 185 2431a 277 2426 < 186 2431b 268 1 187 3390 70 / 188 3391 71 ■ I 189 3392 72 part 2428 190 3393 part 72 part (191 3393 part 73 2429 i 192 3394 74 U94 3395 75 2430 193 3396 76 2427. Table No. 11. Comparative Section References. PENAL LAW. Laws of 1909, Chapter 88, constituting Chapter 40 of the Con- soHdated Laws. The following table presents only those sections of the Penal Law which are given in whole or in part in the text of the present volume. (See Part IV.) Nnmbeni of same or Nnmbors of same or Present equivalent sections Present equivalent sections Section pnor to adoption of Section prior to adoption of numbers. Consolidated Laws, Numbers, Consolidated Laws, § 660 § 590 § 667 §614 661 ,...., 592 668 613 662 591 759 4if 663 593 882 519 664 j594 890 518 ^ 1. 610 1272 3841 665 611 1932 13 part 666 608 1937 15 PART IV.— STATUTES. BUSINESS CORPORATIONS LAW. Laws of igog, Chapter 12, constituting Chapter 4 of the Consolidated Laws. Artjclb I. Short title (§ i). 2. General provisions (§§ 2-16). 3. Laws repealed; when to take effect (§§ 25, 26). ARTICLE I. SHORT TITLE. Section i. Short title. § I. Short title. This chapter shall be known as the "Business Corporations Law." * [As amended by L. 1895, Ch. 671, § i.] ARTICLE 2. GENERAL PROVISIONS. Section 2. Incorporation. 3. Restrictions upon commencement of business. 4. Reorganization of existing corporations. 5. Payment of capital stock. 6. Full liability corporations. 7. Consolidation of corporations. 8. Submission of consolidation agreement to stockholders. 9. Powers of consolidated corporations. 10. Transfer of property of old corporations to consolidated corporations. 11. Rights of creditors of old corporations. 12. District steam corporations. 13. Examination of meters by agent of district steam corpora- tions. 14. Entry by agent of district steam corporation to cut off steam. 15. Water companies. 16. Improvement corporations; right of condemnation. * Notes at end of sections are those supplied by the Board of Statutory Consolidation. 351 352 NEW YORK CORPORATIONS. § 2. Incorporation. Except as provided in section two-a of this chapter, three or more persons may become a stock corporation for any lawful business purpose or purposes other than a moneyed corporation, or a corporation provided for by the banking, the insurance, the railroad and the transportation corporations laws, or an educational institution or corporation which may be incorporated as provided in the educa- tional law, by making, signing, acknowledging and filing a certificate which shall contain: [As amended by L. 1909, Ch. 484.] 1. The name of the proposed corporation. 2. The purpose or purposes for which it is to be formed. 3. The amount of the capital stock, and if any portion be pre- ferred stock, the preferences thereof. 4. The number of shares of which the capital stock shall consist, each of which shall not be less than five nor more than one hundred dollars, and the amount of capital not less than five hundred dollars, with which said corporation will begin business. 5. The city, village or town in which its principal business office is to be located. If it is to be located in the city of New York, the borough therein in which it is to be located. 6. Its duration. 7. The number of its directors, not less than three. 8. The names and post-office addresses of the directors for the first year. 9. The names and post-office addresses of the subscribers to the certificate, and a statement of the number of shares of stock which each agrees to take in the corporation. Any certificate of incorporation filed, prior to April twenty-second, eighteen hundred and ninety-six, under the provisions of the business corporations law theretofore in force which shall contain the names and post-office addresses, either of the subscribers to the stock or of the subscribers to the certificate, and a statement of the number of shares of stock which each agrees to take in the corporation, shall be deemed to have complied with the requirements of section two, subdivision nine of said law. If meetings of the board of directors are to be held only within the state the certificate or ';y-laws must so provide.. [As amended by L. 1904, Ch. 446, § i; L. 1907, Ch. 646, § i. L. 1896, Ch. 369, § 2, incorporated.] § 2-a. Incorporating for the purpose of conducting law business, et cetera, prohibited. No corporation shall be organized or created under the provisions of this chapter for the purpose or purposes of conducting any branch of the practice of law or of retaining or em- ploying an attorney or attorneys to furnish legal advice, draw legal papers or perform legal services of any kind or description, either directly for the person, persons or corporation for whose use such services are rendered, or for the corporation retaining such attorney in compliance with any contract of employment of the corporation or of the attorney made by the corporation with any other person, persons or corporation. The statement of the purpose or purposes of a cor- poration, in any certificate filed under the provisions of this chapter", in whatsoever language the same may be set forth, shall not be held or construed to confer on the corporation the power to transact any busi- ness specified in this section as a purpose for which the creation of a corporation under this chapter is prohibited; and particularly when the BUSINESS CORPORATIONS LAW. 353 stated objects of a corporation include the collection of debts or ac- counts, in words or substance, they shall not be construed to include the employment or furnishing of attorneys to prosecute any action or pursue any legal or equitable remedy in aid of such collections. [Added by L. 1909, Ch. 484.] § 3. Restrictions upon commencement of business. No such cor- poration shall incur any debts until the amount of capital specified in its certificate of incorporation, as the amount of capital with which it will begin business, shall have been paid in in money or property. [As amended by L. 1892, Ch. 691, § 3; L. 189s, Ch. 671, § i.] § 4. Reorganization of existing corporations. Any stock corpora- tion heretofore organized, except a moneyed or transportation corpora- tion, or a corporation the business of which partakes of the nature of banking or insurance, may reincorporate under this chapter in the following manner: The directors of the corporation shall call a meeting of the stockholders thereof by publishing a notice, stating the time, place and object of the meeting, signed by at least a majority of them, in a newspaper of the county in which its principal business office is situated, once a week, for at least three successive weeks, and by serving upon each stockholder, at least three weeks before the meeting, a copy of such notice either personally or by depositing it in the post-office, posta,a:e prepaid, addressed to him at his last known post-office address. The stockholders shall meet at the time and place specified in the notice and organize by choosing one of the directors chairman, and a suitable secretary, and shall then take a vote of those present in person or by proxy upon the proposition to reincorporate under this chapter, and if votes representing a majority of all the stock of the corporation shall be cast in favor of the proposition, the officers of the meeting shall execute and acknowledge a certificate of the proceedings, which certificate shall also contain the statements required by section two of this chapter, and shall be filed in the offices where certificates of incorporation under this chapter are required to be filed. From the time of such filing such corporation shall be deemed to be a corporation organized under this chapter, and if originally organized or incorporated under a general law of this state, it shall have and exercise all such rights and franchises as it has heretofore had and exercised under the laws pursuant to which it was originally incorporated, and such reorganization shall not in any way affect, change or diminish the existing liabilities of the corporation. [As amended by L. 1895, Ch. 671, § i.] § 5. Payment of capital stock. One-half of the capital stock of every such corporation shall be paid in within one year from its incorporation, or the corporation shall be dissolved, and the directors within thirty days after such payment shall make a certificate of the fact of such payment, which shall be signed and acknowledged by a majority of the directors, and verified by the president or vice-president and secretary or treasurer, and filed in the offices where the certificates of incorporation are filed. The dissolution of any such corporation for any cause shall not take away or impair any remedy against it, its stockholders or officers, for any liabilities incurred previous to its dissolution. [As amended by L. 1892, Ch. 691, § 5.] 354 NEW YORK CORPORATIONS. § 6. Full liability corporations. Every corporation formed under this chapter may be or become a full liability corporation by inserting a statement in the certificate of incorporation, that the corporation thereby formed is intended to be a full liability corporation; and in case of an existing corporation, which is not a full liability corpora- tion, it may become such by filing in the offices where certificates of incorporation are required to be filed, a supplemental certificate stating that thereafter the corporation intends to be a full liability corporation, which certificate shall be executed and acknowledged by the president and treasurer of the corporation or by the board of directors, and shall have annexed thereto a copy of a resolution, adopted by a two-thirds vote of the board of directors, and the written consent of all the stockholders of the corporation, authorizing and consenting to the change of the corporation to a full liability corpora- tion. If the corporation is formed as or becomes a full liability corporation all the stockholders of the corporation shall be severally individually liable to its creditors for all its debts and liabilities, and may be joined as defendants in any action against it. No execution shall issue against any stockholder individually until execution has been issued against the corporation and returned unsatisfied, and all the stockholders shall contribute a proportionate share, according to the number of shares of stock owned by each, of the amount paid by any stockholder on a judgment recovered against him individually for a debt of the corporation, and he may recover from the other stock- holders in Ihe corporation in a joint or several action the proper portion due by them and each of them, of the amount paid by him on any such judgment. [As amended by L. 1892, Ch. 691, § 6.] § 7. Consolidation of corporations. Any two or more corpora- tions organized under the laws of this state for the purpose of carrying on any kind of business of the same or of a similar nature, which a corporation organized under this chapter might carry on, may consoli- date such corporations into a single corporation, as follows: The respective corporations may enter into and make an agreement signed by a majority of their respective boards of directors and under their respective corporate seals, for the consolidation of such corporations, prescribing the terms and conditions thereof, the mode of carrying the same into effect, the name of the new corporation, the number of directors who shall manage its affairs, not less than three, the names and post-office addresses of the directors for the first year, the term of its existence, not exceeding fifty years, the name of the town or towns, county or counties, in which its operations are to be carried on, the name of the town or city and county in this state in which its principal place of business is to be situated, the amount of its capital stock, which shall not be larger in amount than the fair aggregate value of the property, franchises and rights of such corpora- tions, and the number of shares into which the same is to be divided, the manner of distributing such capital stock among the holders thereof, and if such corporations, or either of them, shall have been organized for the purpose of carrying on any part of its business in any place out of this state, the agreement shall so state, with such other particulars as they may deem necessary. [As amended by L. igoi, Ch. 520, § 2.] BUSINESS CORPORATIONS LAW. 355 § 8. Submission of consolidation agreement to stockholders. Such agreement shall be submitted to the stockholders of each of such corporations, at a meeting thereof to be called upon notice of at least two weeks, specifying the time, place and object thereof, and addressed to each at his last known post-office address, and deposited in the post-office, postage prepaid, and published for at least two successive weeks in one of the newspapers in each of the counties of this state in which either of such corporations shall have its place of business, and if such agreement shall be approved at each of such meetings of the respective stockholders separately, by the vote by ballot of the stockholders owning at least two-thirds of the stock, the same shall be the agreement of such corporations, and a sworn copy of the proceedings of such meetings, made by the secretaries thereof, respect- ively, and attached thereto, shall be presumptive evidence of the holding and action of such meetings. Such agreement and verified copy of proceedings of such meetings shall be made in duplicate, one of which shall be filed in the office of the secretary of state, and the other in the office of the clerk of the county where the principal business office of the new corporation is to be situated in this state, and thereupon such corporation shall be merged into the new corpora- tion specified in such agreement, to be known by the corporate name therein mentioned, and the provisions of such agreement shall be carried into effect as therein provided. If any stockholder, not voting in favor of such agreement to consolidate, shall at such meeting, or within twenty days thereafter, object to such consolidation and demand payment for his stock, such stockholder or such new corporation, if the consolidation takes effect at any time thereafter, may at any time within sixty days after such meeting apply to the supreme court at any special term thereof held in the district in which any county is situated in which such new corporation may have its place of business, upon at least eight days' notice to the new corporation, for the appoint- ment of three persons to appraise the value of such stock, and the court shall appoint three such appraisers and designate the time and place of their first meeting, with such directions in regard to their proceedings as shall be deemed proper, and also direct the manner in which payment for such stock shall be made to such stockholder. The court may fill any vacancy in the board of appraisers occurring by refusal or neglect to serve or otherwise. The appraisers shall meet at the time and place designated, and they or any two of them, after being duly sworn honestly and faithfully to discharge their duties, shall estimate and certify the value of such stock at the time of such dissent, and deliver one copy to such new corporation, and another to such stockholder if demanded; the charges and expenses of the appraisers shall be paid by the new corporation. When the new corporation shall have paid the amount of such appraisal, as directed by the court, such stockholder shall cease to have any interest in such stock and in the corporate property of such , corporation, and such stock may be held or disposed of by such new corporation. Where any consolidation has been heretofore or shall be hereafter effected pursuant to the laws of this state, and the holders of ninety per centum of the capital stock of each of such corporations have voted in favor of such agreement to consolidate, if any stockholder not voting in favor of such consolidation shall fail to exchange his stock for stock of such new corporation within sixty days after this act shall go into effect, or, in case of a consolidation hereafter effected, within sixty 356 NEW YORK CORPORATIONS. days after he shall have become entitled to make such exchange, such new corporation may, at any time thereafter, upon at least eight days' notice to such stockholder, to be given personally, within the state, if possible, and if not, then in such manner as the court shall direct, apply to the court, as hereinbefore provided, for the appointment of three persons to appraise the value of such stock at the time of the expiration of such sixty days. Upon the completion of the appraisal in the manner hereinbefore provided for, and the payment by such new corporation of the amount of such appraisal, as directed by the court, such stockholder shall cease to have any interest in such stock, and in the corporate property of such corporation, and such stock may be held or disposed of by such new corporation. [As amended by L. 1902, Ch. 438, § i.] § 9. Powers of consolidated corporations. Such new corpora- tion in addition to the general powers of corporations shall enjoy the rights, franchises and privileges possessed by each of the corporations so consolidated, subject to the restrictions, liabilities, duties and pro- visions contained in this chapter so far as the same may be applicable to the purposes for which it shall have been organized and expressed in the agreement for consolidation, and may prosecute or carry on any kind of business which each of the consolidating corporations was authorized by law to conduct. [As amended by L. 1892, Ch. 691, § 10.] § 10. Transfer of property of old corporations to consolidated corporations. Upon the consummation of such act of consolidation, all the rights, privileges, franchises and interests of each of the corporations, parties to the same, and all the property, real, personal and mixed, and all the debts due on whatever account to either of them, as well as all stock subscriptions and other things in action belonging to either of them, shall be taken and deemed to be transferred to and vested in such new corporation, without further act or deed; and all claims, demands, property and every other interest shall be as effectu- ally the property of the new corporation as they were of the former corporations, parties to such agreement and act; and the title to all real estate, taken by deed or otherwise, under the laws of this state, vested in either of such corporations, parties to such agreement and act, shall not be deemed to revert or be in any way impaired by reason of this chapter, or anything done by virtue thereof, but shall be vested in the new corporation by virtue of such act of consolida- tion; and all the rights, privileges, franchises and property of the corporations, parties to any consolidation heretofore made under this chapter, shall vest as fully in the new corporation thereby created as they were vested in the corporations, parties to such consolidations. [As amended by L. 1902, Ch. 457, § i.] § II. Rights of creditors of old corporations. The rights of creditors of any corporation that shall be so consolidated shall not in any manner be impaired, nor any liability or obligation for the payment of any money due or to become due to any person or persons, or any claim or demand for any cause existing against any such corporation or against any stockholder thereof be released or impaired by any such consolidation; but such new corporation shall succeed to and be held liable to pay and discharge all such debts and liabilities of each of the corporations consolidated in the same manner as if such new BUSINESS CORPORATIONS LAW. 357 corporation had itself incurred the obligation or liability to pay such debt or damages and the stockholders of the respective corporations consolidated shall continue, subject to all the liabilities, claims and demands existing against them as such, at or before the consolidation; and no action or proceeding then pending before any court or tribunal in which any corporation that may be so consolidated is a party, or in which any such stockholder is a party, shall abate or be discontinued by reason of such consolidation, but may be prosecuted to final judg- ment, as though no consolidation had been entered into; or such new corporation may be substituted as a party in place of any corporation so consolidated, by order of the court in which such action or pro- ceeding may be pending. [As amended by L,. 1892, Ch. 691, § 12.] § 12. District steam corporations. Any corporation now or here- after incorporated for the purpose of supplying steam to consumers from a central station or stations through pipes laid in the public streets, shall be known as a district steam corporation and upon the application in writing of the owner or occupant of any building or premises, within one hundred feet of any street main laid down by any such corporation, and payment by him of all money due from him to it, such corporation shall supply steam as may be required for heating such building or premises, notwithstanding there may be rent or compensation in arrears for steam supplied, or for meter, pipe or fittings furnished to a former occupant thereof, unless such owner or occupant shall have undertaken or agreed with the former occupant to pay or to exonerate him from the payment of such arrears, and shall refuse or neglect to pay the same; and if, for the space of twenty days after such application, and the deposit, if required, of a reasonable sum to cover the cost of connection and two months' steam supply, the corporation shall refuse or neglect to supply steam as required, it shall forfeit to such applicant the sum of ten dollars and the further sum of five dollars for every day thereafter during which such refusal or neglect shall continue; but no such corporation shall be required to lay a Service pipe for the purpose of supplying steam to any appli- cant where the ground in which such pipe is required to be laid shall be frozen, or otherwise present serious obstacles to laying the same, nor unless the applicant, if required, shall deposit in advance with the corporation a sum of money sufficient to pay for two months' steam supply and the cost of the necessary connections and of the erection of a meter and such other special apparatus as are required for use in connection with such steam supply, nor unless the applicant shall provide the space and right of way necessary for the erection, maintenance and use of such connections and apparatus, and signify his assent in writing to the reasonable regulations of the corporation with reference to the supply of steam to consumers. [As amended by L. 1892, Ch. 691, § 13.] § 13. Examination of meters by agent of district steam corpora- tions. Any such corporation may make an agreement with any of its customers, by which any of its officers or agents shall be authorized at all reasonable times to enter any dwelling, store, building, room or place, supplied with steam by such corporation and occupied by such customer, for the purpose of inspecting and examining the meters, devices, pipes, fittings and appliances for supplying or regulating the supply of steam, and for ascertaining the quantity of steam consumed. 358 NEW YORK CORPORATIONS. or the quantity of water resulting from the condensation of steam consumed. Every such agreement shall further provide that such officer or agent shall exhibit his written authority if requested by the occupant of such dwelling, store, building, room or place. Any person who shall directly or indirectly prevent or hinder such officer or agent from entering such dwelling, store, building, room or place, or from making such inspection or examination, in violation of such agreement, shall forfeit to the corporation the sum of twenty-five dollars for each offense. ' 1 ' j [As amended by L,. 1892, Ch. 691, § 14.] § 14. Entry by agent of district steam corporation to cut off steam. If any person or persons, corporation or association supplied with steam by any such corporation, shall neglect or refuse to pay the rent or remuneration for such steam, or for the meter, device, pipes, fittings or appliances, let by such corporation for supplying steam, or for ascertaining the quantity of steam consumed, or the quantity of water resulting from the condensation of the steam consumed, agreed upon or due for the same, as required by his, their or its contract with such corporation, the latter may thereupon stop and prevent the steam from entering the premises of such person, persons, corporation or association, so neglecting or refusing to pay such rent or remunera- tion, and may also in any case, in which a person is liable to pay a forfeiture, or to a fine or imprisonment, by reason of any act to or towards such corporation or its property for which such forfeiture, fine or penalty is imposed by law, stop and prevent the steam from entering the premises of the person so liable, or if such person be an officer or agent of any corporation or association, stop and prevent the steam from entering the premises of such corporation or associa- tion. In all cases in which such corporation is authorized to stop and prevent the steam from entering any premises, it may, by its officers, agents or workmen, enter into or on such premises between the hours of eight o'clock in the forenoon and six o'clock in the afternoon and cut off, disconnect, separate and carry away any rneter, device, pipe, fitting or other property of the corporation; and may cut off, disconnect and separate any meter, device, pipe or fitting, whether the property of the corporation or not, from the mains or pipes of such corporation. [As amended by h. 1892, Ch. 691, § 15.] § 15. Water companies.. No corporation shall be formed under this chapter for the purpose of accumulating, storing, conducting, fur- nishing or supplying water for domestic manufacturing or municipal purposes in the city of New York. Any corporation formed for the purpose of supplying any other city of the state with water, if unable to agree with the owners of any real property required for the purpose of the corporation for the purchase thereof may acquire title thereto by condemnation. [Added by L. 1892, Ch. 691, § 16.] § 16. Improvement corporations; right of condemnation. Any corporation formed for the purpose of developing or improving real property, which lays out for public use roads, streets, avenues or high- ways, upon or through its lands, if unable to agree with the owners of any real property required for the purpose of extending, continuing or connecting such roads, streets, avenues or highways, for the pur- chase thereof, may acquire title thereto by condemnation in the manner BUSINESS CORPORATIONS LAW. 359 prescribed by law; provided such corporation has the consents of the owners of not less than one-half of all of the land which adjoins or abnts upon, or which will adjoin or abut upon, such roads, streets, avenues or highways, or their extensions, continuations or connections, when completed; and such corporation may lay out and establish such roads, streets, avenues or highways, and the extensions, continuations or connections thereof, and may construct drains or sewers, and such bridges or culverts as may be necessary to maintain the grades of, or for the extension, continuation or connection of, the roads, streets, avenues or highways, so laid out; and may connect such roads, streets, avenues or highways, with or across roads, streets, avenues or high- ways, belonging to any other corporation or person, but may not dis- turb the established grades thereof. All lands so taken by condemnation shall be deemed to be acquired for a public use. [Added by L. 1900, Ch. 518, § i.] ARTICLE 3. LAWS REPEALED; WHEN TO TAKE EFFECT. Section 25. Laws repealed. 26. When to take effect. § 25. Laws repealed. Of the laws enumerated in the schedule hereto annexed, that portion specified in the last column is hereby repealed. § 26. When to take effect. This chapter shall take effect imme- diately. ScHEDUtB OF Laws Repealed. Laws of Chapter Section Laws of Chapter Section 1868 161 AH 1896 369,460 All 1871 820 All 1900 518 All 1876 363 All 1901 520 All 1887 561 All 1902 438,457 All 1890 567 All 1903 S2S AH 1892 691 All 1904 446 All 189s 671 All 1907 646 All GENERAL, CORPORATION LAW. Laws of 1909, Chapter 28, constituting Chapter 23 of the Consolidated Laws. Article i. 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 action to enforce individual liability of officers and members of corporation ('§§ 100-115). 7. Action to annul corporation (§§ 130-136). 8. .A.ction to dissolve moneyed corporation (§§ 150-161). 9. Proceedings for voluntary dissolution of corporation (§§ 170-195)- 10. Dissolution of stock corporation without judicial pro- ceedings (§§ 220, 221). 11. Powers, duties and liabilities of receivers of corporation (§§230-278). 12. Provisions applicable to two or more of the foregoing proceedings or actions (§§ 300-316). 13. Alteration and repeal of charter of corporation (§'§ 320- 321). 14. Laws repealed; construction; when to take effect (§§ 330- 332). ARTICLE I. SHORT TITLE; CLASSIFICATION; DEFINITIONS. Section i. Short title. 2. Classification of corporations. 3. Definitions. § I. Short title. This chapter shall be known as the "General Corporation Law." t[Amended by L. 1892, Ch. 687.] * So in original. t Notes at end of sections are those supplied by the Board of Statutory Consolidation. 360 GENERAL CORPORATION LAW. 361 § 2. Classification of corporations. A corporation shall be either, 1. A municipal corporation, 2. A stock corporation, or 3. A non-stock corporation. A stock corporation shall be either, 1. A moneyed corporation, 2. A railroad or other transportation corporation, or 3. A business corporation. A non-stock corporation shall be either, 1. A religious corporation, 2. A membership corporation, or 3. Any corporation other than a stock corporation. A reference in a general law to a class of corporations described in accordance with this classification shall include all corporations theretofore formed belonging to such class. [Added by L,. 1892, Ch. 687.] § 3. Definitions, i. A "municipal corporation" includes a county, town, school district, village and city and any other territorial division of the state established by law with powers of local government. 2. A "stock corporation" is a corporation having a capital stock divided into shares, and which is authorized by law to distribute to the holders thereof dividends or shares of the surplus profits of the cor- poration. A corporation is not a stock corporation because of having issued certificates called certificates of stock, but which are in fact merely certificates of membership, and which is not authorized by law to distribute to its members any dividends or share of profits arising from the operations of the corporation. 3. The term "non-stock corporation" includes every corporation other than a stock corporation. 4. A "moneyed corporation" is a corporation formed under or subject to the banking or the insurance law. 5. A "domestic corporation" is a corporation incorporated by or under the laws of the state or colony of New York. Every corporation which is not a domestic corporation is a foreign corporation, except as provided by the code of civil procedure for the purpose of construing such code. 6. The term "directors," when used in relation to corporations, shall include trustees or other persons, by whatever name known, duly appointed or designated to manage the aflfairs of the corporation. 7. The term "certificate of incorporation" shall include articles of association or any other written instruments required by law to be filed, to efifect the incorporation of a corporation, including a certified copy of an original certificate of incorporation filed for such purpose in pursuance of law. 8. The term "member of a corporation" shall include every person having a right to vote at a meeting of the corporation for the election of directors, other than a person having a right to vote only upon a 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 refer- ence to a non-stock corporation, includes the operations for the conduct of which it is incorporated. 362 NEW YORK CORPORATIONS. II. The term "corporate law" or "laws," when used in any law forming a part of the consolidation of the general laws of the state of which this chapter is a part, means the general statutes of this state relating to corporations included in such consolidation. [As amended by L. 1892, Ch. 687, and L,. 1895, Ch. 672, § i.] ARTICLE 2. GENERAL PROVISIONS. Section 4. Qualifications of incorporators. 5. Filing and recording certificates of incorporation. 6. Corporate names. 7. Amended and supplemental certificates. 8. Lost or destroyed certificates. 9. Certificate and other papers as evidence; evidence of con- solidation. 10. Limitation of powers; provisions of certificate. 11. Grant of general powers. 12. Enlargement of limitations upon the amount of the prop- erty of non-stock corporations. 13. Acquisition of additional real property. 14. Acquisition of property without the state. 15. Certificate of authority of a foreign corporation. 16. Proof to be filed before granting certificate. 17. Reincorporation of foreign moneyed corporations. 18. Papers to be filed upon reincorporation. 19. When reincorporation effective and effect thereof. 20. Acquisition of real property in this state by certain for- eign corporations. 21. Acquisition by foreign corporation of real property in this state. 22. Prohibition of banking powers. 23. Qualification of members as voters. 24. Cumulative voting. 25. Voting trust agreements. 26. Proxies. 27. Challenges. 28. Effect of failure to elect directors. 29. Mode of calling special election of directors. 30. Mode of conducting special election of directors. 31. Qualification of voters and canvass of votes at special election. 32. Powers of supreme court respecting elections. 33. Stay of proceedings in actions collusively brought. 34. Quorum of directors and powers of majority. 35. Directors as trustees in case of dissolution. 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 corporation. 41. Effect of extension. GENERAL CORPORATION LAW. 363 Section 42. When notice of lapse of time unnecessary. 43. As to acts of directors. 44. Political contributions prohibited; penalty. § 4. Qualifications of incorporators. A certificate of incorporation must be executed by natural persons, who must be of full age, and at least two-thirds of them must be citizens of the United States and one of them a resident of this state. This section shall not apply to a cor- poration formed by the reincorporation or consolidation of existing corporations, or to the reorganization of a corporation upon the sale of the property and franchises of a previously existing corporation or otherwise. [Added by L. 1892, Ch. 687, and as amended by L,. 1895, Ch. 672, § I.] § 5. Filing and recording certificates of incorporation, i. Every certificate of incorporation including the corporate name or title and every amended or supplemental certificate, and every certificate which alters the provisions of any certificate of incorporation or any amended or supplemental certificate hereafter executed, shall be in the English language, and except as otherwise provided by law, shall be filed in the office of the secretary of state, and shall be by him duly recorded and indexed in books specially provided therefor, and a certified copj' of such certificate or amended or supplemental certificate with a certifi- cate of the secretary of state of such filing and record, or a duplicate original of such certificate or amended or supplemental certificate shall be filed and similarly recorded and indexed in the office of the clerk of the county in which the office of the corporation is to be located, or, if it be a non-stock corporation, and such county be not determined upon at the time of executing the certificate of incorporation, in such county clerk's office as the judge approving the certificate shall direct. All taxes required by law to be paid before or upon incorporation and the fees for filing and recording such certificate must be paid before filing. No corporation shall exercise any corporate powers or priv- ileges until such taxes and fees have been paid. [As amended by L. 1892, Ch. 687; L. 1895, Ch. 672, § i, and ly. 1902, Ch. 28s, § I.] 2. Whenever under any law now or heretofore in force the cer- tificate of incorporation of any corporation other than a stock corpora- tion was or is required to be filed in more than one public office, a certified copy of such certificate so filed in any one of such public offices may be filed in such other office with the like effect as if the original had been duly filed therein, provided, however, that no rights accrued prior to the filing of such copy shall be impaired or affected thereby, provided also, that such filing of a copy shall not cause a duplication or similarity of corporate names in violation of the next succeeding section. [L. 1906, Ch. S3I, § I.] § 6. Corporate names, i. No certificate of incorporation of a proposed corporation having the same name as a corporation author- ized to do business under the laws of this state, or a name so nearly resembling it as to be calculated to deceive, shall be filed or recorded in any office for the purpose of effecting its incorporation, or of author- izing it to do business in this state. A corporation formed by the 364 NEW YORK CORPORATIONS. reincorporation, reorganization or consolidation of other corporations or upon the sale of the property or franchises of a corporation, may have the same name as the corporation or one of the corporations to whose franchises it has succeeded. No corporation shall be hereafter organized under the laws of this state, with the word "trust," "bank," "banking," "insurance," "assurance," "indemnity," "guarantee," "guar- anty," "title," "savings," "investment," "loan" or "benefit" as part of its name, except a corporation formed under the banking law or the insurance law. [As amended by L,. 1892, Ch. 687; L. 1895, Ch. 672, § i; L. 1900, Ch. 704, § i; L. 1902, Ch. 9, § I, and L. 1907, Ch. 115, § i.] 2. No corporation, society or association, whether now existing or hereafter organized under or by virtue of the laws of this state, shall ever employ the words "Lucretia Mott" to designate, describe or name any hospital, infirmary or dispensary, or any part thereof, or any similar institution. [L. 1892, Ch. 19, § 4.] § 7. Amended and supplemental certificates. If in the original or amended certificate of incorporation of any corporation, or if in a supplemental certificate of any corporation any informality exist, or if any such certificate contain any matter not authorized by law to be stated therein, or if the proof or acknowledgment thereof shall be defective, the corporators or directors of the corporation may make and file an amended certificate correcting such informality or defect or striking out such unauthorized matter; and the certificate amended shall be deemed to be amended accordingly as of the date such amended certificate was filed, and upon the filing of such an amended certificate of incorporation, the corporation shall then for all purposes be deemed to be a corporation from the time of filing the original certificate. The supreme court may, upon due cause shown, and proof made, and upon notice to the attorney-general, and to such other persons as the court may direct, and upon such terms and conditions as it may impose, amend any certificate of incorporation which fails to express the true object and purpose of the corporation, so as to truly set forth such object and purpose. When an amended or supplemental certificate is filed, an entry shall be made upon the margin of the index and record of the original certificate of the date and place of record of every such amended cer- tificate. The amendment of a certificate under this section shall be without prejudice to any pending action or proceeding, or to any rights pre- viously accrued. [As amended by L. 1892, Ch. 687.] § 8. Lost or destroyed certificates. If either of the certificates of incorporation shall be lost or destroyed after filing, a certified copy of the other certificate may be filed in the place of the one so lost or destroyed and as of the date of its original filing, and such certified copy shall have the same force and effect as the original certificate had when filed. [As amended by L. 1892, Ch. 687.] § 9. Certificate and other papers as evidence; evidence of con- solidation. I. The certificate of incorporation of any corporation duly GENERAL CORPORATION LAW. 365 filed shall be presumptive evidence of its incorporation, and any amended certificate or other paper duly filed or recorded relating to the incorporation of any corporation or its existence or management, and containing facts required or authorized by law to be stated therein, shall be presumptive evidence of the existence of such facts. [As amended by L. 1892, Ch. 687, and L. 189S, Ch. 672, § i.] 2. Whenever, by the laws of any other state or territory, or the dominion of Canada, a copy of the certificate of organization or incor- poration or any other certificate, certified or exemplified by any officer or officers in such state or territory or dominion, is or shall be prima facie evidence of the due formation, creation, existence, organization or capacity of any corporation or joint-stock company, created, organ- ized or located in such state, territory or dominion, or claiming so to be, such certificate or certificates, duly exemplified, or a duly exempli- fied copy thereof, shall be received in all actions and proceedings in this state, in or before all courts and officers, with the same force and effect in all respects as prima facie evidence as aforesaid, as in such other state, territory or dominion. [L. 1877, Ch, 311, § !■] 3. Where two or more corporations have been or shall hereafter be consolidated and merged into a new corporation, a certificate of the secretary of state under his official seal concisely stating the names of the respective corporations consolidated, the dates of the filing of the certificates respectively of the incorporation of such corporations in his office, the object for which they were formed, including the nature and locality of their business as set forth in their respective incorporation papers on file in his office, the date of the filing of the consolidation agreement and other proceedings in his office, the name of the new corporation formed by such consolidation and merger, the term of its corporate existence, the place where its principal office is situated and the amount of its capital stock, shall be presumptive and prima facie evidence in all actions and special proceedings for all purposes of the incorporation of the corporations so consolidated, the incorporation of the new corporation by such consolidation and merger from the date of filing of said consolidation agreement and proceedings, and of the other facts so certified by him. [I.. 1899, Ch. 201, § I.] § 10. Limitation of powers; provisions of certificate, i. No cor- poration shall possess or exercise any corporate powers not given by law, or not necessary to the exercise of the powers so given. 2. The certificate of incorporation of any corporation may contain any provision for the regulation of the business and the conduct of the affairs of the corporation, and any limitation upon its powers, or upon the powers of its directors and stockholders, which does not exempt them from the performance of any obligation or the performance of any duty imposed by law. [As amended by h- 1892, Ch. 687, and L. 1895, Ch. 672, § I.] § II. Grant of general powers. Every corporation as such has power, though not specified in the law under which it is incorporated: 1. To have succession for the period specified in its certificate of incorporation or by law, and perpetually when no period is specified. 2. To have a common seal, and alter the same at pleasure. 366 NEW YORK CORPORATIONS. 3. To acquire by grant, gift, purchase, devise or bequest, to hold and to dispose of such property as the purposes of the corporation shall require, subject to such limitations as may be prescribed by law. 4. To appoint such officers and agents as its business phall re- quire, and to fix their compensation, and S- To make by-laws, not inconsistent with any existing law, for the management of its property, the regulation of its affairs, and the transfer of its stock, if it has any, and the calling of meetings of its members. Such by-laws may also fix the amount of stock, which must be represented at meetings of the stockholders in order to constitute a quorum, unless otherwise provided by law. By-laws duly adopted at a meeting of the members of the corporation shall control the action of its directors. No by-law adopted by the board of directors regu- lating the election of directors or officers shall be valid unless published for at least once a week for two successive weeks in a newspaper in the county where the election is to be held, and at least thirty days before such election. Subdivisions four and five of this section shall not apply to municipal corporations. [As amended by L,. 1892, Ch. 687, and h. 1895, Ch. 672, § I.] § 12. Enlargement of limitations upon the amount of the property of non-stock corporations. If any general or special law heretofore passed, or any certificate of incorporation, shall limit the amount of property a corporation other than a stock corporation may take or hold, such corporation may take and hold property of the value of six million dollars or less, or the yearly income derived from which shall be six hundred thousand dollars or less, notwithstanding any such limitations. In computing the value of such property, no increase in value arising otherwise than from improvements made thereon shall be taken into account. [As amended by L,. 190Q, Ch. 276.] [Added by L. 1892, Ch. 687, as amended by L. 1894, Ch. 400, § i.] § 13. Acquisition of additional real property. When any corpora- tion, except a life insurance corporation, shall have sold or conveyed any part of its real property, the supreme court may, notwithstanding any restriction of a general or special law, authorize it to purchase and hold from time to time other real property, upon satisfactory proof that the value of the property so purchased does not exceed the value of the property so sold and conveyed within the three years next preceding the application. [As amended by L,. 1892, Ch. 687, and L. 1906, Ch. 228, § i.] § 14. Acquisition of property without the state. Any domestic corporation transacting business in other states or foreign countries may acquire and dispose of such property as shall be requisite for such corporation in the convenient transaction of its business. Any domestic corporation establishing or maintaining a charitable, philan- thropic or educational institution within this state may also carry on its work and establish or maintain one or more branches of such insti- tution or an additional institution or additional institutions in any other state, the District of Columbia or in any part of the territories or dependencies of the United States of America or in any foreign coun- try and for either of said purposes may take by devise or bequest, hold, purchase, mortgage, sell and convey or otherwise dispose of such real and personal property without this state as may be requisite there- GENERAL CORPORATION LAW. 367 for. But nothing in this section contained shall be construed as ex- empting from taxation property to any additional amount than is now allowed to such corporation under existing laws. [As amended by L,. 1892, Ch. 687, and L. 1903, Ch. 178, § i.] § 15. Certificate of authority of a foreign corporation. No foreign stock corporation other than a moneyed corporation, shall do business in this state without having first procured from the secretary of state a certificate that it has complied with all the requirements of law to authorize it to do business in this state, and that the business of the corporation to be carried on in this state is such as may be lawfully carried on by a corporation incorporated under the laws of this state for such or similar business, or if more than one kind of business, by two or more corporations so incorporated for such kinds of business respectively. The secretary of state shall deliver such certificate to every such corporation so complying with the requirements of law. No for- eign stock corporation doing business in this state shall maintain any action in this state upon any contract made by it in this state, unless prior to the making of such contract it shall have procured such certifi- cate. This prohibition shall also apply to any assignee of such foreign stock corporation and to any person claiming under such assignee or such foreign stock corporation or under either of them. No certificate of authority shall be granted to any foreign corporation having the same name as an existing domestic corporation, or a name so nearly resembling it as to be calculated to deceive, nor to any foreign corpora- tion, other than a moneyed or insurance corporation, with the word "trust," "bank," "banking," "insurance," "assurance," "indemnity," "guarantee," "guaranty," "savings," "investment," "loan" or "benefit," as a part of its name. [Added by L. 1892, Ch. 687, as amended by L. 1901, Ch. 96, § i, and Ch. S38, § I, and L,. 1904, Ch. 490, § i.] § 16. Proof to be filed before granting certificate. Before granting such certificate the secretary of state shall require every such foreign corporation to file in his office a sworn copy in the English language of its charter or certificate of incorporation and a statement under its corporate seal, and the signature of its president, vice-president or other acting head, particularly setting forth the business or objects of the corporation which it is engaged in carrying on or which it proposes to carry on within the state, and a place within the state which is to be its principal place of business, and designating a person upon whom process against the corporation may be served within the state. The person so designated must have an office or place of business at the place where such corporation is to have its principal place of business within the state and such designation must specify such office or place of business of the said person so designated, and if it is within a city the street and street number if any, or other suitable designation of the particular locality. Such designation shall be accompanied with the written consent of the person designated and shall continue in force until revoked by an instrument in writing designating in like manner some other person upon whom process against the corpora- tion may be served in this state or until the fihng in the same office of a written revocation of said consent executed by the person so designated. If the person so designated dies or removes from the place where the corporation has its principal place of business within the state, or files such revocation of his consent, and the corporation 368 NEW YORK CORPORATIONS. does not within thirty days after such death or removal or revocation of consent designate in Hke manner another person upon whom process against it may be served within the state, the secretary of state may revoke the authority of the corporation to do business within the state, and process against the corporation in an action upon any liability incurred within this state before such revocation, may, after such death or removal, or revocation of consent, and before another designation is made, be served upon the secretary of state. At the time of such service the plaintiff shall pay to the secretary of state two dollars, to be included in his taxable costs and disbursements, and the secre- tary of state shall forthwith mail a copy of such notice to such corporation if its address, or the address of any officer thereof, is known to him. The secretary of state may require the execution of any such designation, revocation or consent, to be authenticated as he deems proper and he may refuse to file it without such authentica- tion. . [Added by L. 1892, Ch. 687, as amended by L. 1895, Ch. 672, § iP Code Civil Procedure, § 432, subd. 2 pt., incorporated. For remainde'r of section see Code Civil Procedure, § 432.] § 17. Reincorporation of foreign moneyed corporations. Any moneyed corporation duly organized by or under the laws of any state of the United States, and having an office or doing business in this state, may file, if a banking corporation' or authorized to make loans upon pledges or deposits, in the office of the superintendent of banks, and if an insurance corporation in the office of the superin- tendent of insurance, the documents described in section eighteen of this chapter, and such documents shall be recorded as original certifi- cates of incorporation are required by law to be recorded. The fees for filing and recording such documents, together with the tax, if any, required by law to be paid before the incorporation of a domestic company of the same class, must be paid before filing. [L. 1900, Ch. 733, § I.] § 18. Papers to be filed upon reincorporation. The documents to be filed by any such corporation shall include, 1. A copy of its charter, certificate of incorporation, or other document constituting it a body corporate, with such amendments, if any, as are desired by the corporation or are required by the laws of New York, authenticated as an original certificate of incorporation 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 consistent with the laws of this state relating to domestic corporations of the same class; that the corporation appli- cant has complied with all conditions imposed by its laws upon domes- tic corporations of the same class beginning business in this state, with the exception of any provisions concerning the residence of a majority of the corporators, trustees, or directors of such corporation; that its name is not the same with the name of any domestic corporation, nor likely to be confounded with any such name, and that it has paid all fees and taxes due from it to the state, including the tax, if any, im- GENERAL CORPORATION LAW. 369 posed by this state upon the original incorporation of a company of the same class. [L. 1900, Ch. 733, § 2.] § 19. When reincorporation effected and effect thereof. From the date of filing these documents the corporation shall become and be a corporation of this state, and shall be subject to all the laws of this state applicable to corporations of the same class; but its existence and powers as such corporation shall terminate if it shall fail at any time for one month to maintain an office within the state at which an authorized officer or agent shall be present at all reasonable business hours, prepared to exhibit the books of the company to the proper authorities of this state and to receive service of process; or if it shall fail within two years to terminate its corporate existence derived from any other state, by surrender of its charter or by dissolution. [h. 1900, Ch. 733, § 3.] § 20. Acquisition of real property in this state by certain foreign corporations. Any foreign corporation created under the laws of the United States, or of any state or territory thereof, and doing business in this state, may acquire such real property in this state as may be necessary for its corporate purposes in the transaction of its business in this state, and convey the same by deed or otherwise in the same manner as a domestic corporation. [As amended by L,- 1892, Ch. 687.] § 21. Acquisition by foreign corporation of real property in this state. Any foreign corporation may purchase at a sale upon the fore- closure of any mortgage held by it, or, upon any judgment or decree for debts due it, or, upon any settlement to secure such debts, any real property within this state covered by or subject to such mortgage, judgment, decree or settlement, and may take by devise any real prop- erty situated within this state and hold the same for not exceeding five years from the date of such purchase, or from the time when the right to the possession thereof vests in such devisee, and convey it by deed or otherv/ise in the same manner as a domestic corporation. [As amended by L. 1892, Ch. 687, and h. 1894, Ch. 136, § i.] . § 22. Prohibition of banking powers. No corporation except a corporation formed under or subject to the banking laws, shall by any implication or construction be deemed to possess the power of carrying on the business of discounting bills, notes or other evidences of debt, of receiving deposits, or buying and selling bills of exchange, or shall issue bills, notes or other evidences of debt for circulation as money. [As amended by L. 1892, Ch. 687, and L. 1904, Ch. 236, § i.] § 23. Qualification of members as voters. Unless otherwise pro- vided in the certificate of incorporation, every stockholder of record of a stock corporation shall be entitled at every meeting of the corpora- tion to one vote for every share of stock standing in his name on the books of the corporation; and at every meeting of a non-stock cor- poration, every member, unless disqualified by the by-laws, shall be entitled to one vote. The stockholders of a stock corporation, by'^a 370 NEW YORK CORPORATIONS. by-law adopted by a vote at any annual meeting, or at any special meeting duly called for such purpose, may prescribe a period, not exceeding forty days prior to meetings of the stockholders, during which no transfer of stock on the books of the corporation may be made. Except in cases of express trust, or in which other provision shall have been made by written agreement between the parties, the record holder of stock which shall be held by him as security, or which shall actually belong to another, upon demand therefor and pay- ment of necessary expenses thereof, shall issue to such pledgor or to such actual owner of such stock, a proxy to vote thereon. No member of a corporation shall sell his vote or issue a proxy to vote to any person for any sum of money or any thing of value. The books and papers containing the record of membership of the corporation shall be produced at any meeting of its members upon the request of any member. If the right to vote at any such meeting shall be challenged, the inspectors of election, or other persons presiding thereat, shall require such books, if they can be had, to be produced as evidence of the right of the person challenged to vote at such meeting, and all persons who may appear from such books to be mem- bers of the corporation may vote at such meeting in person or by proxy, subject to the provisions of this chapter. [Added by L. 1892, Ch. 687, as amended by L. 1901, Ch. 355, § I Pt] § 24. Cumulative voting. The certificate of incorporation of any stock corporation may provide that at all elections of directors of such corporation, each stockholder shall be entitled to as many votes as shall equal the number of his shares of stock multiplied by the number of directors to be elected, and that he may cast all of such votes for a single director or may distribute them among the number to be voted for, or any two or more of them as he may see fit, which right, when exercised, shall be termed cumulative voting. The stockholders of a corporation heretofore formed, who, by the provisions of laws existing on April thirtieth, eighteen hundred and ninety-one, were entitled to the exercise of such right, may hereafter exercise such right according to the provision of this section. [Added by L. 1892, Ch. 687, as amended by L. 1901, Ch. 355, § I pt] § 25. Voting trust agreements. A stockholder may, by agreement in writing, transfer his stock to any person or persons for the purpose of vesting in him or them the right to vote thereon for a time not ex- ceeding five years upon terms and conditions stated, pursuant to which such person or persons shall act; every other stockholder, upon his re- quest therefor, may, by a like agreement in writing, also transfer his stock to the same person or persons and thereupon may participate in the terms, conditions and privileges of such agreement; the certificates of stock so transferred shall be surrendered and canceled and certifi- cates therefor issued to such transferee or transferees in which it shall appear that they are issued pursuant to such agreement and in the entry of such transferee or transferees as owners of such stock in the proper books of said corporation that fact shall also be noted and thereupon he or they may vote upon the stock so transferred during the time in such agreement specified; a duplicate of every such agree- ment shall be filed in the office of the corporation where its principal GENERAL CORPORATION LAW. 37I business is transacted and be open to the inspection of any stockholder, daily, during business hours. [Added by h. 1892, Ch. 687, as amended by L. 1901, Ch. 355, § I Pt.] § 26. Proxies. Every member of a corporation, except a religious corporation, entitled to vote at any meeting thereof may so vote by proxy. No officer, clerk, teller or bookkeeper of a corporation formed under or subject to the banking law shall act as proxy for any stock- holder at any meeting of any such corporation. Every proxy must be executed in writing by the member himself, or by his duly authorized attorney. No proxy hereafter made shall be valid after the expiration of eleven months from the date of its execution unless the member executing it shall have specified therein the length of time it is to continue in force, which shall be for some limited period. Every proxy shall be revocable at the pleasure of the person executing it; but a corporation having no capital stock may prescribe in its by-laws the persons who may act as proxies for mem- bers, and the length of time for which proxies may be executed. [Added by L. 1892, Ch. 687.] § 27. Challenges. Every member of a corporation offering to vote at any election or meeting of the corporation shall, if required by an inspector of election or other officer presiding at such election or meeting, or by any other member present, take and subscribe the following oath: "I do solemnly swear that in voting at this election I have not, either directly, indirectly or impliedly received any prom- ise or any sum of money or any thing of value to influence the giving of my vote or votes at this meeting or as a consideration therefor." Any person offering to vote as proxy for any other person shall pre- sent his proxy and, if so required, take and subscribe the following oath: "I do solemnly swear that I have not, either directly, indirectly or impliedly, given any promise or any sum of money or any thing of value to induce the giving of a proxy to me to vote at this election, or received any promise or any sum of money or any thing of value to influence the giving of my vote at this meeting, or as a considera- tion therefor." The inspectors or persons presiding at the election may administer such oath, and all such oaths and proxies shall be filed in the office of the corporation. [Added by L. 1892, Ch. 687, as amended by L. 1893, Ch. 672, § i, and L. 1901, Ch. 355, § i.] § 28. Effect of failure to elect directors. If the directors shall not be elected on the day designated in the by-laws, or by law, the corporation shall not for that reason be dissolved; but every director shall continue to hold his office and discharge his duties until his suc- cessor has been elected. [As amended by L. 1892, Ch. 687.] § 29. Mode of calling special election of directors. If the elec- tion has not been held on the day so designated, the directors shall forthwith call a meeting of the members of the corporation for the purpose of electing directors, of which meeting notice shall be given in the same manner as of the annual meeting for the election of di- rectors. 372 NEW YORK CORPORATIONS. If such meeting shall not be so called within one month, or, if held, shall result in a failure to elect directors, any member of the corporation may call a meeting for the purpose of electing directors by publishing a notice of the time and place of holding such meeting at least once in each week for two successive weeks immediately pre- ceding the election, in a newspaper published in the county where the election is to be held and in such other manner as may be prescribed in the by-laws for the publication of notice of the annual meeting, and by serving upon each member, either personally or by mail, directed to him at his last known post-oflSce address, a copy of such notice at lq,ast two weeks before the meeting. [Added by L. 1892, Ch. 687.] § 30. Mode of conducting special election of directors. Such meeting shall be held at the office of the corporation, or if it has none, at the place in this state where its principal business has been trans- acted, or if access to such office or place is denied or cannot be had, at some other place in the city, village or town where such office or place is or was located. At such meeting the members attending shall constitute a quo- rum. They may elect inspectors of election and directors and adopt by-laws providing for future annual meetings and election of directors, if the corporation has no such by-laws, and transact any other business which may be transacted at an annual meeting of the members of the corporation. [Added by L. 1892, Ch. 687.] § 31. Qualification of voters and canvass of votes at special elec- tion. In the absence at such meeting of the books of the corporation showing who are members thereof, each person, before voting, shall present his sworn statement setting forth that he is a member of the corporation; and if a stock corporation, the number of shares of stock owned by him and standing in his name on the books of the corpora- tion, and, if known to him, the whole number of shares of stock of the corporation outstanding. On filing such statement, he may vote as a member of the corporation; and if a stock corporation, he may vote on the shares of stock appearing in such statement to be owned by him and standing in his name on the books of the corporation. The inspectors shall return and file such statements, with a cer- tificate of the result of the election, verified by them, in the office of the clerk of the county in which such election is held, and the persons so elected shall be the directors of the corporation. [Added by L. 1892, Ch. 687.] § 32. Powers of supreme court respecting elections. The su- preme court shall, upon the application of any person or corporation aggrieved by or complaining of any election of any corporation or any proceeding, act or matter touching the same, upon notice thereof to the adverse party, or to those to be affected thereby, forthwith and in a summary way hear the affidavits, proofs and allegations of the par- ties, or otherwise inquire into the matters or causes of complaint, and establish the election or order a new election, or make such order and give such relief as right and justice may require. [As amended by h- 1892, Ch. 687.] § 33. Stay of proceedings in actions collusively brought. If an action is brought against a corporation by the procurement or default GENERAL CORPORATION LAW. 373 of its directors, or any of them, to enforce any claim or obligation de- clared void by law, or to which the corporation has a valid defense, and such action is in the interest or for the benefit of any director, and the corporation has by his connivance made default in such action, or consented to the validity of such claim or obligation, any member of the corporation may apply to the supreme court, upon affidavit, set- ting forth the facts, for a stay of proceedings in such action, and on proof of the facts in such further manner and upon such notice as the court may direct, it may stay such proceedings or set aside and vacate the same, or grant such other relief as may seem proper, and which will not injuriously affect an innocent party, who, without notice of such wrongdoing and for a valuable consideration, has acquired rights under such proceedings. [As amended by L,. 1892, Ch. 687.] § 34. Quorum of directors and powers of majority. The affairs of every corporation shall be managed by its board of directors, at least one of whom shall be a resident of this state. Unless otherwise provided a majority of the board of directors of a corporation at a meeting duly assembled shall be necessary to constitute a quorum for the transaction of business and the act of a majority of the directors present at a meeting at which a quorum is present shall be the act of the board of directors. The members of a corporation may in by- laws fix the number of directors necessary to constitute a quorum at a number less than a majority of the board, but at least equal to one- third of its number. Subject to the by-laws, if any, adopted by mem- bers of a corporation, the directors may make necessary by-laws of the corporation. [As amended by L. 1892, Ch. 687; L. 1901, Ch. 214, § i, and L. 1904, Ch. 737, § I.] § 35. Directors as trustees in case of dissolution. Upon the dis- solution of any corporation, its directors, unless other persons shall be appointed by the legislature, or by some court of competent jurisdic- tion, shall be the trustees of its creditors, stockholders or members, and shall have full power to settle its affairs, collect and pay outstanding debts, and divide among the persons entitled thereto the money and other property remaining after payment of debts and necessary ex- penses. Such trustees shall have authority to sue for and recover the debts and property of the corporation, by their name as such trustees, and shall jointly and severally be personally liable to its creditors, stock- holders or members, to the extent of its property and effects that shall come into their hands. [As amended by L. 1892, Ch. 687.] § 36. Forfeiture for non-user. If any corporation, except a rail- road, turnpike, plank-road or bridge corporation, shall not organize and commence the transaction of its business or undertake the dis- charge of its corporate duties within two years from the date of its incorporation, its corporate powers shall cease. [As amended by L. 1892, Ch. 687.] § 37. Extension of corporate existence. Any domestic corpora- tion at any time before the expiration thereof, may extend the term of its existence beyond the time specified in its original certificate of in- 374 NEW YORK CORPORATIONS. corporation, or by law, or in any certificate of extension of corporate existence, by the consent of the stockholders owning two-thirds in amount of its capital stock, or if not a stock corporation, by the con- sent of two-thirds of its members, which consent shall be given either in writing or by vote at a special meeting of the stockholders called for that purpose, upon the same notice as that required for the an- nual meetings of the corporation; and a certificate under the seal of the corporation that such consent was given by the stockholders in writing, or that it was given by vote at a meeting as aforesaid, shall be subscribed and acknowledged by the president or a vice-president, and by the secretary or an assistant secretary of the corporation, and shall be filed in the office of the secretary of state, and shall by him be duly recorded and indexed in a book specially provided therefor, and a cer- tified copy of such certificate, with a certificate of the secretary of state of such filing and record, or a duplicate original of such certificate, shall be filed and similarly recorded and indexed in the office of the clerk of the county wherein the corporation has its principal place of business, and shall be noted in the margin of the record of the orig- inal certificates of such corporation, if any, in such offices, and there- after the term of the existence of such corporation shall be extended as designated in such certificate. The certificate of incorporation of any corporation whose duration is limited b^ such certificate or by law, may require that the consent of stockholders owning a greater percentage than two-thirds of the stock, if a stock corporation, or of more than two-thirds of the members, if a non-stock corporation, shall be requisite to effect an extension of corporate existence as authorized by this section. [As amended by L. 1892, Ch. 687; L. 1900, Ch. 177, § l; 1,. 1901, Ch. 3SS, § I, and L. 1905, Ch. 256, § i pt.] § 38. Revival of corporate existence. If the term of existence of any domestic corporation shall have expired and it shall be made satisfactorily to appear to the supreme court that such corporation was legally organized pursuant to any law of this state, and that it shall have issued its bonds payable at a date beyond the date fixed in its charter or certificate of incorporation for the expiration of its cor- porate existence, and such bonds shall be unmatured and unpaid, the supreme court may, upon the application of any person interested and upon such notice to such other parties as the court may require, by order, authorize the filing and recording of a certificate reviving the existence of such corporation, upon such conditions and with such limitations as such order shall specify, and extending such corporate existence for a term not exceeding the term for which it was originally incorporated. Upon filing and recording such certificate in the same manner as certificates of extension of corporate existence duly issued before the 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 order, but such revival and extension shall not affect any litigation com- menced after such expiration and pending at the time of such revival. [As amended by L. 1892, Ch. 687; L,. 1900, Ch. 177, § i; L. 1901, Ch. 35S, § I, and L. 190S, Ch. 256, § i pt.] § 39. Approval of certificates of extension or revival; when re- quired. In the case of a corporation formed under or subject to the banking law, no certificate of extension or revival shall be filed or re- GENERAL CORPORATION LAW. 375 corded unless it shall have indorsed thereon the written approval of the superintendent of banks; or, if an insurance corporation, unless it shall have indorsed thereon the written approval of the superintend- ent of insurance; and, if a turnpike or bridge corporation, it shall not be filed unless it shall have indorsed thereon or annexed thereto a certified copy of a resolution of the board of supervisors of each county in which such turnpike or bridge is located, approving of and authorizing such extension. [As amended by L. 1892, Ch. 687; L. tqoo, Ch. 177, § i; L,. 1901, Ch. 3SS, § T, and L. 190S, Ch. 256, § i pt.] § 40. Extension when stock is owned by another corporation. If all the stock of a corporation other than a corporation formed under or subject to the banking law, or an insurance corporation, or a turn- pike, plank-road or bridge corporation shall be lawfully owned by an- other stock corporation entitled by law to take a surrender and merger thereof, the corporate existence of such corporation whose stock is so owned may be extended at any time for the term of the corporate existence of the possessor corporation, by filing in the office or offices in which the original certificate or certificates of incorporation of the first-mentioned corporation were filed a certificate of such extension executed by its president and secretary and by such corporation own- ing all the shares of its capital stock. [As amended by L,. 1892, Ch. 687; L. 1900, Ch. 177, § i; L. 1901, Ch. 3SS, § I, and L. 190S, Ch. 256, § i pt.] § 41. Effect of extension. Every corporation extending its cor- porate existence under this chapter or under any general law of the state shall thereafter be subject to the provisions of this chapter and of such general law, notwithstanding any special provisions in its charter, and shall thereafter be deemed to be incorporated under the general laws of the state relating to the incorporation of a corporation for the purpose of carrying on the business in which it is engaged, and shall be subject to the provisions of such law. [As amended by L. 1892, Ch. 687; L. 1900, Ch. 177, § i; L,. 1901. Ch. 3SS, § I, and L. 190S, Ch. 256, § i pt.] § 42. When notice of lapse of time unnecessary. Whenever under the provisions of any of the corporate laws a corporation is au- thorized to take any action after notice to its members or after the lapse of a prescribed period of time, such action may be taken without notice and without the lapse of any period of time, if such action be authorized or approved, and such requirements be waived in writing by every member of such corporation, or by his attorney thereunto authorized. [Added by L. 189S, Ch. 672, § 2.] § 43. As to acts of directors. Whenever, under the provisions of any of the corporate laws, a corporation is authorized to take any action by the agreement or action of its directors, managers or trus- tees, such agreement or action may be taken by such directors, reg- ularly convened as a board, and acting by a majority of a quorum, except when otherwise expressly required by law or the by-laws of the corporation and any 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 with- 376 NEW YORK CORPORATIONS. out notice, any business may be transacted which might have been transacted if the meeting had been duly called. Except when other- wise required by law or the by-laws of the corporation, special meetings of the members of the corporation may be called in the same manner as the annual meeting thereof. [Added by L. 1895, Ch. 672, § 2, and amended by L. 1901, Ch. 3SS. § I] § 44. Political contributions prohibited; penalty. No corporation or joint-stock association doing business in this state, except a cor- poration or association organized or maintained for political purposes only, shall directly or indirectly pay or use or offer, consent or agree to pay or use any money or property for or in aid of any political party, committee or organization, or for, or in aid of, any corporation, joint-stock or other association organized or maintained for political purposes, or for, or in aid of, any candidate for political office or for nomination for such office, or for any political purpose whatever, or for the reimbursement or indemnification of any person for moneys or property so used. Any officer, director, stockholder, attorney or agent of any corporation or joint-stock association which violates any of the provisions of this section, who participates in, aids, abets or ad- vises or consents to any such violation, and any person who solicits or knowingly receives any money or property in violation of this section, shall be guilty of a misdemeanor and punishable by imprisonment in a penitentiary or county jail for not more than one year and a fine of not more than one thousand dollars. No person shall be excused from attending and testifying, or producing any books, papers or other documents before any court or magistrate, upon any investigation, proceeding or trial, for a violation of any of the provisions of this section, upon the ground or for the reason that the testimony or evi- dence, documentary or otherwise, required of him may tend to convict him of a crime or to subject him to a penalty or forfeiture; but no person shall be prosecuted or subjected to any penalty or forfeiture for or on account of any transaction, matter or thing concerning which he may so testify or produce evidence, documentary or otherwise, and no testimony so given or produced shall be received against him upon any criminal investigation or proceeding. [Added by L,. 1906, Ch. 239, § i.] 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 proceed- ing. § 60. Petition by corporation to change name. A petition to as- Buiiie another corporate name may be made by a domestic corporation, whether incorporated by a general or special law, to the supreme sume GENERAL CORPORATION LAW. 377 court at a special term thereof, held in the judicial district in which its principal business office shall be situated, or, if it be other than a stock corporation, at a special term held in the judicial district in which its certificate of incorporation is filed or recorded, or in which its principal property is situated, or in which its principal operations are or theretofore have been conducted. If it be a banking, insurance or railroad corporation, the petition must be authorized by a resolution of the directors of the corporation, and approved if a banking- corpora- tion, by the superintendent of banks; if an insurance corporation other than a town or county co-operative insurance corporation, by the su- perintendent of insurance, and if a railroad corporation, by the pubHc service commission. The petition to change the name of any other corporation must have annexed thereto a certificate of the secretary of state, that the name which such corporation proposes to assume is not the name of any other domestic corporation or a name which he deems so nearly resembHng it, as to be calculated to deceive. [Code Civil Procedure, § 2411.] § 61. Contents of petition. The petition must be in writing, signed by the petitioner and verified in like manner as a pleading in a court of record, and must specify the grounds of the application, its present name, and the name it proposes to assume, which must not be the name of any other corporation, or a name so nearly resembling it as to be calculated to deceive; and if it be a railroad corporation, a corporation having banking powers or the power to make loans upon pledges or deposits, or to make insurances, that the petition has been duly authorized by a resolution of the directors of the corporation and approved by the proper officer. [Code Civil Procedure, § 2412. For remainder of section see Code Civil Procedure, § 2412.] § 62. Notice of presentation of petition. If the petition be made by a corporation located elsewhere than in the city and county of New York, notice of the presentation thereof shall be published once in each week for three successive weeks in a newspaper of every county in which such corporation shall have a business office, or if it has no business office, of the county in which its principal corporate property is situated, or in which its operations are or theretofore have been principally conducted, which newspaper, if it be a banking cor- poration, shall be designated by the superintendent of banks, if an insurance corporation other than a town or county co-operative insur- ance corporation, by the superintendent of insurance, or if a railroad corporation, by the public service commission. In the city and county of New York such notice shall be published once in each week for three successive weeks in two daily newspapers published in such county. A copy of the petition and notice of motion shall be filed with the secretary of state, and the proposed name shall thereupon be reserved for said corporation until three weeks after the date of such motion, and until three weeks after the date of any adjournment of such mo- tion if notice of such adjournment shall be filed with the secretary of state, and no certificate of incorporation of a proposed corporation, having the same name as the name proposed in such petition, or a name so nearly resembling it as to be calculated to deceive, shall be filed in any office for the purpose of effecting its incorporation, and no corporation formed without the state of New York having the same 378 NEW YORK CORPORATIONS. name or a name so nearly resembling it as to be calculated to deceive shall be given authority to do business in this state. [Code Civil Procedure, § 2413. For remainder of section see Code Civil Procedure, § 2413.] § 63. Order authorizing change. If the court to virhich the peti- tion is presented is satisfied thereby, or by the affidavit and certificate presented therewith, that the petition is true, and that there is no reasonable objection to the change of name proposed and that the pe- tition has been duly authorized and that notice of the presentation of the petition, if required by law, has been made, the court shall make an order authorizing the petitioner to assume the name proposed on a day specified therein, not less than thirty days after the entry of the order. The order shall be directed to be entered and the papers on which it was granted to be filed within ten days thereafter in the office of the clerk of the county in which its certificate of incorporation, if any, shall be filed, or if there be none filed, in which its principal office shall be located,, or if it has no business office in the county in which its principal property is situated, or in which its operations are or theretofore have been principally conducted, or in the office of the clerk of the county in which the special term granting the order is held; and that a certified copy of such order shall, within ten days after the entry thereof, be filed in the office of the secretary of state; and also, if it be a banking corporation, in the office of the superintendent of banks, or if it be an insurance corporation, other than a town or county co- operative insurance corporation, in the office of the superintendent of insurance, or if it be a railroad corporation, in the offices of the public service commissions. Such order shall also direct the publication, within ten days after the entry thereof of a copy thereof, in a desig- nated newspaper, in the county in which the order is directed to be entered, once in each week for four successive weeks. [Code Civil Procedure, § 2414. For remainder of section see County Law, § 161, subd. 6, and Code Civil Procedure, § 2414.] § 64. When change to take effect. If the order shall be fully complied with, and within forty days after the making of the order, an affidavit of the publication thereof shall be filed and recorded in the office in which the order is entered, and in each office in which certified copies thereof are required to be filed, if any, the petitioner shall, on and after the day specified for that purpose in the order, be known by the name which is thereby authorized to be assumed, and by no other name. No proceedings had prior to April fourth, eighteen hundred and ninety-four, under sections two thousand four hundred and four- teen and two thousand four hundred and fifteen of the code of civil procedure for the change of the name of a corporation, shall be in- valid by reason of the non-filing of an affidavit of the publication of the order changing such name within twenty days from the date thereof. [Code Civil Procedure, § 2415.] § 65. Substitution of new name in pending action or proceeding. An action or special proceeding, civil or criminal, commenced by or against a corporation whose name is so changed shall not abate, nor shall any relief, recovery or other proceeding therein be prevented, im- peded or impaired in consequence of such change of name. The plain- tiff in the action or the party instituting the special proceeding, or the people, as the case requires, may at any time, obtain an order amend- GENERAL CORPORATION LAW. 379 ing any of the papers or proceedings therein, by the substitution of the new name, without costs and without prejudice to the action or proceeding. [Code Civil Procedure, § 2416.] ARTICLE 4. SALE OF CORPORATE REAL PROPERTY. Section 70. Application of this article. 71. Petition. 72. Hearing on application. 73. Order to sell, mortgage or lease. 74. Insolvent corporation. 75. Service of notices. yd. Practice in cases not herein provided for. § 70. Application of this article. Whenever any corporation is required by law to make application to the court for leave to mortgage, lease or sell its real estate, the proceeding therefor shall be had pur- suant to the provisions of this article. [Code Civil Procedure, § 3390. For remainder of section see Joint-Stock Association Law, § 8.] § 71. Petition. The proceeding shall be instituted by the presen- tation to the supreme court of the district or the county court of the county where the real property, or some part of it, is situated, by the corporation applicant, of a petition setting forth the following facts: 1. The name of the corporation and of its directors, trustees or managers, and of its principal officers, and their places of residence. 2. The business of the corporation or the object or purpose of its incorporation and a reference to the statute under which it was in- corporated. 3. A description of the real property to be sold, mortgaged or leased, by metes and bounds, with reasonable certainty. 4. That the interests of the corporation will be promoted by the sale, mortgage or lease, of the real property specified, and a concise statement of the reasons therefor. 5. That such sale, mortgage or lease has been authorized, by a vote of at least two-thirds of the directors, trustees or managers of the corporation at a meeting thereof, duly called and held, and a copy of the resolution granting such authority. 6. The market value of the remaining real property of the cor- poration and the cash value of its personal assets, and the total amount of its debts and liabilities, and how secured, if at all. 7. The application proposed to be made of the moneys realized from such sale, mortgage or lease. 8. Where the consent of the shareholders, stockholders or mem- bers of the corporation is required by law to be first obtained, a state- ment that such consent has been given, and a copy of the consent, or a certified transcript of the record of the meeting at which it was given, shall be annexed to the petition. 9. A demand for leave to mortgage, lease or sell the real estate described. 380 NEW YORK CORPORATIONS. The petition shall be verified in the same manner as a verified pleading in an action in a court of record. [Code Civil Procedure, § 3391.] § 72. Hearing on application. Upon presentation of the petition, the court may immediately proceed to hear the application, or it may, in its discretion, direct that notice of the application shall be given to any person interested therein, as a member, stockholder, officer or creditor of the corporation or otherwise, in virhich case the application shall be heard at the time and place specified in such notice, and the court may in any case appoint a referee to take the proofs and report the same to the court, with his opinion thereon. Any person, whose interests may be affected by the proceeding, may appear upon the hear- ing and show cause why the application should not be granted. [Code Civil Procedure, §§ 3392, 3393 pt. For remainder of § 3393 see § 73.] § 73. Order to sell, mortgage or lease. Upon the hearing of the application, if it shall appear, to the satisfaction of the court, that the interests of the corporation will be promoted thereby, an order may be granted authorizing it to sell, mortgage or lease the real property described in the petition, or any part thereof, for such sum, and upon such terms as the court may prescribe, and directing what disposition shall be made of the proceeds of such sale, mortgage or lease. [Code Civil Procedure, § 3393 pt. For remainder of § 3393 see § 72] § 74. Insolvent corporation. If the corporation is insolvent, or its property and assets are insufficient to fully liquidate its debts and liabilities, the application shall not be granted, unless all the creditors of the corporation have been served with a notice of the time and place at which the application will be heard. [Code Civil Procedure, § 3394.] § 75. Service of notices. Service of notices, provided for in this article, may be made either personally or, in case of absence, by leaving the same at the place of residence of the person to be served, with some person of mature age and discretion, at least eight days before the hearing of the application, or by mailing the same, duly enveloped and addressed and postage paid, at least sixteen days before such hearing. [Code Civil Procedure, § 3395.] § 76. Practice in cases not herein provided for. In all applica- tions made under 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. [Code Civil Procedure, § 3396.] GENERAL CORPORATION LAW. 38 1 ARTICLE S- JUDICIAL SUPERVISION OF CORPORATION AND OF THE OFFICERS AND MEMBERS THEREOF. Section 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. § 90. Action against officers of corporation for misconduct. An action may be maintained against one or more trustees, directors, man- agers, or other officers of a corporation, to procure a judgment for the following purposes, or so much thereof as the case requires: 1. Compelling the defendants to account for their official con- duct, including any neglect of or failure to perform their duties, in the management and disposition of the funds and property, committed to their charge. 2. Compelling them to pay to the corporation, which they rep- resent, or to its creditors, any money, and the value of any property, which they have acquired to themselves, or transferred to others, or lost, or wasted, by or through any neglect of or failure to perform or by other violation of their duties. 3. Suspending a defendant from exercising his office, where it appears that he has abused his trust. 4. Removing a defendant from his office, upon proof or convic- tion of misconduct, and directing a new election to be held by the body or board duly authorized to hold the same, in order to supply the vacancy created by the removal; or, where there is no such body or board, or where all the members thereof are removed, directing the removal to be reported to the governor, who may, with the advice and consent of the senate, fill the vacancies. 5. Setting aside an alienation of property, made by one or more trustees, directors, managers or other officers of a corporation, con- trary to a provision of law, or for a purpose foreign to the lawful busi- ness and objects of the corporation, where the alienee knew the pur- pose of the alienation. 6. Restraining and preventing such an alienation, where it is threatened, or where there is good reason to apprehend that it will be made. 7. The court must, upon the application of either party, make an order directing the trial by a jury of the issue of neglect or failure of defendants to perform their duties; and for that purpose the ques- tions to be tried must be prepared and settled as prescribed in section nine hundred and seventy of the code of civil procedure. As to any litigation pending prior to September one, nineteen hundred and seven, the provisions of this section as they existed prior to that date shall apply. [Code Civil Procedure, § 1781. Last paragraph is L. 1907. Ch. 157, § 2.] § 91. Who may bring such an action. An action may be brought, as prescribed in the last section, by the attorney-general in behalf of the people of the state, or, except where the action is brought for the purpose specified in subdivision third or fourth of that section, by a creditor of the corporation, or by a trustee, director, manager, or other 382 NEW YORK CORPORATIONS. officer of the corporation, having a general superintendence of its concerns. [Code Civil Procedure, § 1782.] § 92. Visitatorial power over corporation not affected by this article. This article does not divest or impair any visitatorial power over a corporation, which is vested by statute in a corporate body, or a public officer. [Code Civil Procedure, § 1783.] ARTICI.E 6. ACTION FOR SEQUESTRATION, ACTION FOR DISSOLU- TION AND ACTION TO ENFORCE INDIVIDUAL LIA- BILITY OF OFFICER AND MEMBER OF CORPORA- TION. Section 100. Action by judgment creditor for sequestration, loi. 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 receiver. 108. Application for appointment of receiver. 109. Officers and stockholders may be made parties in action brought by creditor, no. 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 rendered against a cor- poration created by or under the laws of the state, and an execution issued thereupon to the sheriflf 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 prop- erty of the corporation, and providing for a distribution thereof, as prescribed in section one hundred and twelve of this chapter. [Code Civil Procedure, § 1784.] § loi. Action to dissolve a corporation. In either of the follow- ing cases, an action to procure a judgment, dissolving a corporation, created by or under the laws of the state, and forfeiting its corporate rights, privileges and franchises, may be maintained, as prescribed in the next section: GENERAL CORPORATION LAW. 383 1. Where the corporation has remained insolvent for at least one year. 2. Where it has neglected or refused, for at least one year, to pay and discharge its notes or other evidences of debt. 3. Where it has suspended its ordinary and lawful business for at least one year. 4. If it has banking powers, or power to make loans on pledges or deposits, or to make insurances, where it becomes insolvent or un- able to pay its debts, or has violated any provision of the act, by or under which it was incorporated, or of any other act binding upon it. [Code Civil Procedure, § 1785.] § 102. Who may bring action to dissolve a corporation. An ac- tion specified in the last section, may be maintained by the attorney- general, in the name and in behalf of the people. And whenever a creditor or stockholder of any corporation submits to the attorney- general a written statement of facts, verified by oath, showing grounds for an action under the provisions of the last section, and the attorney- general omits, for sixty days after this submission, to commence an action specified in the last section, then, and not otherwise, such credi- tor or stockholder may apply to the proper court for leave to com- mence such an action, and on obtaining leave may maintain the same accordingly. [Code Civil Procedure, § 1786.] § 103. Temporary injunction in action authorized by this article. In an action, brought as prescribed in this article, the court may, upon proof of the facts authorizing the action to be maintained, grant an in- junction order, restraining the corporation, and its trustees, directors, managers and other officers, from collecting or receiving any debt or demand, and from paying out, or in any way transferring or delivering, to any person, any money, property, or effects of the corporation, dur- ing the pendency of the action; except by express permission of the court. Where the action is brought to procure the dissolution of the corporation, the injunction may also restrain the corporation, and its trustees, directors, managers and other officers, from exercising any of its corporate rights, privileges, or franchises, during the pendency of the action; except by express permission of the court.. The pro- visions of title second of chapter seventh of the code of civil pro- cedure, relating to the granting, vacating or modifying of an injunc- tion order, apply to an injunction order, granted as prescribed in this section; except that it can be granted only by the court. [Code Civil Procedure, § 1787.] § 104. Temporary receiver. In such an action, the court may also, at any stage thereof, appoint one or more receivers of the prop- erty of the corporation. A receiver, so appointed, before final judg- ment is a temporary receiver, until final judgment is entered. A tem- porary receiver has power to collect and receive the debts, demands, and other property of the corporation; to preserve the property, and the proceeds of the debts and demands collected; to sell or otherwise dispose of the property as directed by the court; to collect, receive and preserve the proceeds thereof; and to maintain any action or special proceeding, for either of those purposes. He must qualify as pre- scribed by law for the qualification of a permanent receiver. Unless additional powers are specially conferred upon him, as prescribed in 384 NEW YORK CORPORATIONS. the next section, a temporary receiver has only the powers specified in this section, and those which are incidental to the exercise thereof. [Code Civil Procedure, § 1788 pt. For remainder of, section see this article, § 106.] § 105. Additional powers and duties of temporary receiver. A temporary receiver, appointed as prescribed in the last section, is, in all respects, subject to the control of the court. In addition to the powers conferred upon him, by the provisions of the last section, the court may, by the order or interlocutory judgment appointing him, or by an order subsequently made in the action, or by the final judgment, confer upon him the powers and authority, and subject him to the duties and liabilities, of a permanent receiver, or so much thereof as it thinks proper; except that he shall not make any distribution among the creditors or stockholders, before final judgment, unless he is spe- cially directed so to do by the court. [Code Civil Procedure, § 1789.] § 106. Permanent receiver. A receiver appointed by or pursuant to a final judgment in the action, or a temporary receiver who is con- tinued by the final judgment, is a permanent receiver, and has all the powers and authority conferred, and is subject to all the duties and liabilities imposed upon a receiver appointed in article eleven of this chapter. [Code Civil Procedure, § 1788 pt. For remainder of section see this article, § 104.] § 107. Additional duties and liabilities of permanent receiver. A permanent receiver shall keep an account of all moneys received by him, and on the first days of January, April, July and October, in each and every year make and file a written statement, verified by his oath that such statement is correct and true, showing the amount of money received by such receiver, his agents or attorneys, the amount he has a right to retain and the items for which he claims to retain the same, and the distributive share due each person interested therein. He shall pay such distributive share to the person or persons entitled thereto, on demand, at any time after such statement. Such account, statement, and all the books and papers of the corporation in the hands of such receiver, shall at all reasonable times be open for the inspection of all persons having an interest therein. And in case of neglect or refusal to comply with either of the above requirements, or any duty imposed upon him, the supreme court, at either an appellate division or special term, shall, on the application of the party ag- grieved, unless such neglect or refusal shall be satisfactorily explained to the court, forthwith remove such receiver, and appoint some suitable person as receiver in his place. Such removal shall not vitiate or an- nul any legal proceedings had by such receiver; but such proceedings shall be continued by such successor as if no removal had been made. Such receiver shall also be liable to pay to the party interested, inter- est at the rate of ten per centum per annum on all moneys due to such party and retained by him more than one day after such demand made as aforesaid. [R. S., Pt. 3, Ch. 8, Tit. 4. Art. 2, § 42, as amended by L,. 1858, Ch. 348, § I.] § 108. Application for appointment of receiver. Applications made by the attorney-general for the appointment of a receiver of a cor- GENERAL CORPORATION LAW. 385 poration shall be made in the judicial district in which the action in which the appointment is sought is triable. [L. 1883, Ch. 378, § I pt., as amended by L. 1896, Ch. 282, § i.] § 109. Officers and stockholders may be made parties in action brought by creditor. Where the action is brought by a creditor of a corporation, and the stockholders, directors, trustees, or other officers, or any of them, are made liable by law, in any event or contingency, for the payment of his debt, the persons, so made liable, may be made parties defendant, by the original or by a supplemental complaint; and their liability may be declared and enforced by the judgment in the action. [Code Civil Procedure, § 1790.] § no. Separate action may be brought against officers and stock- holders. Where the stockholders, directors, trustees, or other officers of a corporation, who are made liable, in any event or contingency, for the payment of a debt, are not made parties defendant, as prescribed in the last section, the plaintiff in the action may maintain a separate action against them, to procure a judgment, declaring, apportioning and enforcing their liability, [Code Civil Procedure, § 1791.] § III. Proceedings in such actions. In an action brought as prescribed in either of the last two sections, the court must, when it is necessary, cause an account to be taken of the property and of the debts of the corporation, and thereupon the defendant's liability must be apportioned accordingly; but, if it affirmatively appears, that the corporation is insolvent, and has no property to satisfy its creditors, the court may, without taking such an account, ascertain and deter- mine the amount of each defendant's liability, and enforce the same accordingly. [Code Civil Procedure, § 1792.] § 112. Distribution of property of corporation by judgment in actions under this article. A final judgment in an action, brought against a corporation, as prescribed in this article, either separately or in conjunction with its stockholders, directors, trustees, or other officers, must provide for a just and fair distribution of the property of the corporation, and of the proceeds thereof, among its fair and honest creditors, in the order and in the proportions prescribed by law, in case of the voluntary dissolution of a corporation. [Code Civil Procedure, § 1793,] § 113. Recovery of stock subscriptions. Where the stockholders of the corporation are parties to the action, if the property of the cor- poration is not sufficient to discharge its debts, the interlocutory or final judgment, as the case requires, must adjudge that each stock- holder pay into court the amount due and remaining unpaid, on the shares of stock held by him, or so much thereof as is necessary to satisfy the debts of the corporation. [Code Civil Procedure, § 1794-] § 114. Liability of directors and stockholders. If it appears, that the property of the corporation, and the sums collected or *collectable from the stockholders, upon their stock subscriptions, are or will be * So in original. 386 NEW YORK CORPORATIONS. insufficient to pay the debts of the corporation, the court must ascer- tain the several sums, for which the directors, trustees, or other of- ficers, or the stockholders of the corporation, being parties to the ac- tion, are liable; and must adjudge that the same be paid into court, to be applied, in such proportions and in such order as justice requires, to the payment of the debts of the corporation. [Code Civil Procedure, § 1795.] § IIS- Effect of this article. This article does not repeal or affect any special provision of law, prescribing that a particular kind of cor- poration shall cease to exist, or shall be dissolved, in a case or in a manner, not prescribed in this article; or any special provision of law, prescribing the mode of enforcing the liability of the stockholders of a particular kind of corporation. [Code Civil Procedure, § 1796.] ARTICLE 7. ACTION TO ANNUL A CORPORATION. Section 130. Action by attorney-general to annul corporation when legislature directs. 131. Action by attorney-general to annul corporation by leave of court. 132. Notice of application for leave to commence action to annul corporation. 133- Jury trial. 134. Injunction and receiver in final judgment. 135. Temporary injunction. 136. Filing and publishing judgment. § 130. Action by attorney-general to annul corporation when legislature directs. The attorney-general, whenever he is so directed by the legislature, must bring an action against a corporation created by or under the laws of the state, to procure a judgment, vacating or annulling the act of incorporation, or any act renewing the cor- poration, or continuing its corporate existence, upon the ground that the act was procured upon a fraudulent suggestion, or the conceal- ment of a material fact, made by or with the knowledge and consent of any of the persons incorporated. [Code Civil Procedure, § 1797] § 131. Action by attorney-general to annul corporation by leave of court. Upon leave being granted, as prescribed in the next sec- tion, the attorney-general may bring an action against a corporation created by or under the laws of the state, to procure a judgment, va- cating the charter or annulling the existence of the corporation, upon the ground that it has, either 1. Offended against any provision of an act, by or under which it was created, altered or renewed, or an act amending the same, and applicable to the corporation; or, 2. Violated any provision of law, whereby it has forfeited its charter, or become liable to be dissolved, by the abuse of its powers; or, 3. Forfeited its privileges or franchises, by a failure to exercise its powers; or, GENERAL CORPORATION LAW. 387 4. Done or omitted any act, which amounts to a surrender of its corporate rights, privileges, and franchises; or, S- Exercised a privilege or franchise, not conferred upon it by law [Code Civil Procedure, § 1798.] § 132. Notice of application for leave to commence action to annul corporation. Before granting leave, the court may, in its dis- cretion, require such previous notice of the application as it thinks proper, to be given to the corporation, or any officer thereof, and may hear the corporation in opposition thereto. [Code Civil Procedure, § 1799.] . § 133- Jury trial. An action, brought as prescribed in this article, is triable, of course and of right, by a jury, as If it was an action specified in section nine hundred and sixty-eight of the code of civil procedure and without procuring an order, as prescribed in section nine hundred and seventy of the code of civil procedure. [Code Civil Procedure, § 1800.] § 134. Injunction and receiver in final judgment. Where any of the matters, specified in section one hundred and thirty or section one hundred and thirty-one of this article, are established in an ac- tion, brought as prescribed in either of those sections, the court may render final judgment that the corporation, and each officer thereof, be perpetually enjoined from exercising any of its corporate rights, privileges, and franchises; and that it be dissolved. The judgment must also provide for the appointment of a receiver, the taking of an account, and the distribution of the property of the corporation, among its creditors and stockholders, as where a corporation is dis- solved upon its voluntary application, as prescribed in article nine of this chapter. [Code Civil Procedure, § 1801.] § 135. Temporary injunction. In an action, brought as prescribed in this article, an injunction order may be granted, at any stage Of the action, restraining the corporation, and any or all of its directors, trustees and other officers, from exercising any of its corporate rights, privileges, or franchises; or from exercising certain of its corporate rights, privileges, or franchises, specified in the injunction order; or from exercising any franchise, liberty, or privilege, or transacting any business, not allowed by law. Such an injunction is deemed one of those specified in section six hundred and three of the code of civil procedure, and all the provisions of title second of chapter seventh of the code of civil procedure applicable to an injunction specified in that section, apply to an injunction granted as prescribed in thie section, except that it can be granted only by the court. [Code Civil Procedure, § 1802.] § 136. Filing and publishing judgment. Where final judgment is rendered against a corporation, in an action, brought as prescribed in this article, the attorney-general must cause a copy of the judg- ment-roll to be forthwith filed in the office of the secretary of state; who must cause a notice of the substance and ei¥ect of the judgment, to be published, for four weeks, in a newspaper printed in the county, wherein the principal place of business of the corporation was located. [Code Civil Procedure, § 1803.] 388 NEW YORK CORPORATIONS. ARTICLE 8. ACTION TO DISSOLVE MONEYED CORPORATION. Section 150. Temporary injunction and receiver in action against moneyed corporation. 151. Order to show cause why injunction and receiver should not be permanent. 152. Inventory and appraisal by receiver. I S3- Conversion of assets into cash by receiver. 154. Employment of counsel by receiver. 155. Notice to creditors by receiver. 156. Allowance, rejection and adjustment of claims by receiver. 157. Final settlement and distribution by receiver. 158. Notice of account and accounting by receiver. 159. Proceedings upon accounting. 160. Claims barred after distribution of assets by receiver. 161. Application of article. § 150. Temporary injunction and receiver in action against moneyed corporation. Whenever the attorney-general shall com- mence an action against a moneyed corporation upon the information of either the superintendent of insurance, or the superintendent of banks, for the dissolution or sequestration of the property or annul- ment of the charter of a corporation formed under or subject to the banking or insurance law, and shall be satisfied that it is unsafe and inexpedient for such corporation to continue doing business, the supreme court may, on his application, in a case provided by law, appoint a receiver thereof, and may on such appointment grant an injunction restraining such corporation from carrying on its business until the further order of the court. The court may, in its discretion, dispense with notice of the application. [L. 1902, Ch. 60, § I.] § 151. Order to show cause why injunction and receiver should not be permanent. The court, on granting an order without notice, either for the appointment of a receiver or for an injunction, or for both forms of relief, as herein provided, shall make an order that the corporation so proceeded against show cause at a term of the court to be held not more than thirty days thereafter, why such receiver and injunction should not be permanent. Such order shall be served not less than eight days before the date upon which the hearing thereon is to be had. Unless the court otherwise directs, the receiver ap- pointed in the first instance shall be permanent receiver of such cor- poration, and the injunction shall be continued during the pendency of the litigation. Such receiver shall, unless otherwise ordered by the court, continue to act as such up to and after final judgment, and until the affairs of the corporation shall be finally settled and its property distributed by him according to law. The bond to be given by the receiver on his appointment shall be fixed at such sum and so conditioned that it shall continue in force and effect until the final discharge of such receiver, including any liability which may be incurred by said receiver by virtue of his appointment as such in the final judgment, in case he shall be so named therein, [L. 1902, Ch. 60, § 2.] GENERAL CORPORATION LAW. 389 § 152. Inventory and appraisal by receiver. It shall be the duty of the receiver to take an inventory and make an appraisal of the assets and property of the corporation. In case the corporation is subject to the banking law, two disinterested appraisers shall be appointed by the superintendent of banks to aid in this duty, and in case the corporation is subject to the insurance law, such appraisers shall be appointed by the superintendent of insurance. Ten days' notice of such inventory and appraisal shall be given to the corporation and such inventory and appraisal shall be completed and filed with the clerk of the supreme court in the county in which the trial is to be had, within ninety days after the appointment of such receiver, and a certi- fied copy thereof in the office of the attorney-general, and in the office of the superintendent of banks, or in the office of the superintendent of insurance, as the case may be, unless for good cause shown the officer appointing such appraisers shall, in writing, extend the time for the completion thereof. Such appraisers shall receive as compen- sation a reasonable sum, not exceeding fifteen dollars per day and actual and necessary expenses, to be paid by the receiver upon th« approval of the officer by whom they were named. The receiver shall be chargeable with the amount of such inventory and shall be relieved therefrom to the same extent and upon the same grounds as in the like case of an executor. [L. 1902, Ch. 60, § 3. For remainder of § 3 see following section.] § 153. Conversion of assets into cash by receiver. The receiver shall proceed, immediately upon his appointment, to convert the assets of the corporation into cash. [Iv. 1902, Ch. 60, § 3. For remainder of § 3 see preceding section.] § 154. Employment of counsel by receiver. It shall not be lawful for anj' receiver to pay to any attorney or counsel any costs, fees or allowance until the amount thereof shall have been stated to the special term, as expenses incurred by such receiver and shall have been approved by that court by an order duly entered. Any such order shall be the subject of review by the appellate division and the court of appeals on appeal thereto taken by any party. The receiver may employ not to exceed one counsel unless the employment of additional counsel shall be authorized by the supreme court after notice to the attorney-general of an application therefor. [L. 1902, Ch. 60, § 4, as amended by L. 1904, Ch. 705, § i.] § iss. Notice to creditors by receiver. Within thirty days after he qualifies the receiver of any title guaranty company authorized by law to issue policies of insurance or agreements of indemnity or guaranty, and which corporation has issued and outstanding at the time of the appointment of the receiver, policies of insurance or agree- ments of indemnity or guaranty, exceeding two thousand in nurnber, shall not be required to mail to the holders or owners of said policies of insurance or of said agreements, the notice required by law to be given to creditors of an insolvent moneyed corporation; but such receiver shall cause a notice to be published twice a week, for four successive weeks, in two newspapers published in the county where said corporation has its principal place of business; which said notice shall require all creditors and owners and holders of outstanding policies of insurance or agreements of indemnity or guaranty, to exhibit and prove their claim, within sixty days; and, in default of so doing. 390 NEW YORK CORPORATIONS. shall be precluded from all benefit of the judgment and from any and all distribution which may be made thereunder, except that the creditor or holder or owner of any policy or agreement of indemnity or guar- anty, who shall exhibit or prove his claim, with an affidavit that he had no notice or knowledge thereof, in time to comply with the provisions hereof, at any time before an order is made directing a final settlement and distribution of assets of such corporation, shall be entitled to have his claim received, and shall have the same rights and benefits thereon, so far as the assets of such corporation then remaining undistributed may be applied, as if his claim had been exhibited and proved within the time limited by such notice. This section shall apply to all receivers of moneyed corporations. [L. 1902, Ch. 60, § s pt., and L,. 1904, Ch. 754, §§ i and 4.] § 156. Allowance, rejection and adjustment of claims by receiver. The receiver shall have the same power and authority with reference to the allowance or rejection of claims as is given to executors, and no reference shall be had to pass upon claims except such as may be disputed by such receiver. In case any claim shall be disputed, the receiver shall immediately upon the expiration of the time for the •presentation of claims, upon notice to the parties whose claims have been rejected, apply to the court for the appointment of a referee to hear and determine as to the allowance thereof. Claims allowed by the receiver shall be subject to objection upon the final settlement and their validity may be determined as the validity of claims against estates are determined upon final settlement by a surrogate. [Iv. 1902, Ch. 60, § 5. For remainder of § S see § iSS-] § 157. Final settlement and distribution by receiver. The receiver may apply for a final settlement of his accounts and an order for dis- tribution at any time after the expiration of six months, and shall so apply within eighteen months after qualifying as such. The attorney- general or any creditor, or party interested, may apply for an order that the receiver show cause why an accounting and distribution should not be had at any time after the expiration of one year after the receiver qualifies; and it shall be the duty of the attorney-general, after the expiration of eighteen months from the time the receiver enters upon his duties, in case he has not applied for a final settle- ment of his accounts, to apply for such an order on notice to such receiver. In case of such application by a party other than the re- ceiver, the court shall direct the receiver to take steps to account with all convenient speed. The receiver is not required or authorized to file any accoun*, except as herein provided, except by special order of the court. [L. 1902, Ch. 60, § 6.] § 158. Notice of account and accounting by receiver, i. The receiver shall file his account, together with a statement of the items and amounts claimed by his counsel, up to that date with the court and a duplicate thereof, together with the vouchers, with the attorney- general, at least thirty days before time fixed for his final settlement and accounting, and the attorney-general shall serve upon the attorney for the receiver any objections he may have to the account, or to the statement as to the items and amounts claimed by counsel for com- pensation, appearing in such account on or before such hearing. GENERAL CORPORATION LAW. 39 1 2. Prior to the final settlement of accounts of a receiver of any moneyed corporation, having in force, at the time of his appointment, outstanding policies of insurance or agreements of indemnity or guar- anty, exceeding two thousand in number, said receiver shall give notice to all of the creditors and to the owners or holders of said policies of insurance or agreements of indemnity or guaranty, issued or entered into by such insolvent corporation, by publication of a notice published at least twice a week, for three successive weeks, immediately preceding the making of an application for a final settle- ment of his accounts and for an order for the distribution of the assets in his hands. Said notice shall state the fact that an application for a final settlement of his accounts and for an order for the distribution of the assets in hand will be made, and shall also state the time and place, when and where the application will be made. Upon the hear- ing of such application and motion, the court shall, unless objection is made to the items of the account by a creditor or by a holder or owner of a policy of insurance or agreement of indemnity or guaranty, or on behalf of the attorney-general, examine and settle the said ac- counts, and make an order for the settlement, adjustment and distribu- tion of the assets in the hands of the receiver. Where objection is made to the items of account, the court may refer the same to a referee to examine and pass thereon. This subdivision shall apply to all receivers of moneyed corporations. [Subd. I, L. 1902, Ch. 60, § 8. Subd. 2, h- 1904, Ch. 754, §§ 2, 4.] § 159. Proceedings upon accounting. Upon any accounting by the receiver, after the expiration of the time for creditors to present claims, the court shall direct the receiver to immediately convert the entire assets of the corporation in his hands into cash, in case any of the assets have not been so converted, unless good and sufficient cause to the contrary shall appear to the satisfaction of the court, such as to authorize an order granting the receiver additional time for that pur- pose, and upon any such accounting the court shall direct the receiver to distribute the assets of the corporation in his hands to the persons entitled thereto, except so iriuch thereof as may be necessary to be retained for the purpose of administering the trust and making pay- ment upon contested claims, and upon such claims as may thereafter be presented and entitled to be paid. Whenever the attorney-general shall apply for an order to show cause why an accounting should not be had by a receiver by reason of his failure to so account within twelve months after his appointment, and shall deem it advisable to designate counsel to act on his behalf, the court may, upon the accounting, make a reasonable allowance by way of counsel fee to counsel so designated. [First sentence L. 1902, Ch. 60, § 7. Second sentence L,. 1902, Ch. 60, § 10.] § 160. Claims barred after distribution of assets by receiver. Upon the granting of the application and the making of the order of distribution, and the distribution of the assets in the hands of the receiver, in the manner directed by the order of the court, all claims of the creditors or of holders or owners of policies of insurance or agreements of indemnity or guaranty, against such receiver, shall be barred. This section shall apply to all receivers of moneyed corpora- tions. [L. 1904, Ch. 754, § 3.] 392 NEW YORK CORPORATIONS. § i6i. Application of article. Except as provided in sections one hundred and fifty-five, one hundred and fifty-eight, subdivision two, and one hundred and sixty of this article, this article shall apply to all actions for the appointment of receivers of moneyed corporations brought by the attorney-general, and to all receivers of such corpora- tions heretofore or hereafter appointed, and to the settlement and adjustment of their accounts and distribution of assets in their hands, and all proceedings with reference thereto hereafter to be taken, and shall supersede and repeal all provisions of law inconsistent herewith, so far as the same relate to actions for the sequestration, annulment, or dissolution of moneyed corporations. As to all other corporations and as to matters not affected by this article, provisions of law hereto- fore existing shall remain in full force and effect. [L. 1902, Ch. 60, § 9.] ARTICLE 9. PROCEEDINGS FOR VOLUNTARY DISSOLUTION OF COR- PORATION. Section 170. Petition for voluntary dissolution of corporation. 171. Directors or trustees may be required to petition. 172. Petition when directors or trustees do not agree. 173. Corporations excepted from two preceding sections. 174. Contents of petition. 175. Affidavit to be annexed to petition. 176. Presentation of petition. 177. Corporations without stockholders. 178. Action by court upon petition for dissolution. 179. Publication of order to show cause why corporation should not be dissolved. 180. Service of order to show cause. i8r. Entering and filing order and papers. 182. Temporary receiver. 183. Application for appointment of receiver. 184. Injunction. 185. Referee. 186. Hearing. 187. Decision. 188. Use of original papers on hearing. 189. Amending papers. 190. Final order. 191. Permanent receiver. 192. 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 man- agement of the concerns of a corporation created by or under the laws of the state, discover that the stock, effects, and other property thereof are not sufficient to pay all just demands, for which it is liable, or to GENERAL CORPORATION LAW. 393 afford a reasonable security to those who may deal with it; or if, for any reason, they deem it beneficial to the interests of the stockholders that the corporation should be dissolved, they may present a petition to the supreme court praying for a final order dissolving the corpora- tion, as prescribed in this article. [Code Civil Procedure, § 2419.] § 171. Directors or trustees may be required to petition. It shall be the duty of a majority of the directors or trustees of every corpora- tion created by or under the laws of this state to present a petition as prescribed in the last section whenever directed so to do by a major- ity in interest of its stockholders. [Code Civil Procedure, § 2420. For remainder of section see this article, §§ 172, 173.] § 172. Petition when directors or trustees do not agree. If a cor- poration, created under a general statute of the state for the formation of corporations or under any special act or charter has an even number of trustees or directors who are equally divided respecting the manage- ment of its affairs, or if the stock of such corporation is equally divided into not more than two independent ownerships or interests, or if the entire stock of the corporation is, at that time, owned by the trustees or directors who are even in number or equally divided repre- senting the management of its affairs, or if the stock is so divided, that one-half thereof is owned or controlled by persons favoring the course of part of the trustees or 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. [Code Civil Procedure, § 2420. For remainder of section see this article, §§ 171, I73-] § 173. Corporations excepted from two preceding sections. Sec- tions one hundred and seventy-one and one hundred and seventy-two of this chapter do not apply to a savings bank, a trust company, a safe deposit company, or a corporation formed to rent safes in burglar and fire-proof vaults, or for the construction or operation of a railroad, or for aiding in the construction thereof, or for carrying on the busi- ness of banking or insurance, or intended to derive a profit from the loan or use of money. [Code Civil Procedure, § 2420. For remainder of section see this article, §§ 171, 172.] § 174. Contents of petition. The petition must show that the case is one of those specified in sections one hundred and seventy, one hundred and seventy-one, one hundred and seventy-two and one hun- dred and seventy-three of this chapter, and must state the reasons, which induce the petitioner or petitioners to desire the dissolution of the corporation. A schedule must be annexed to the petition, containing the following matters, as far as the petition or petitioners know, or have the means of knowing the same: I. A full and true account of all the creditors of the corporation, and of all unsatisfied engagements, entered into by, and subsisting against, the corporation. 394 NEW YORK CORPORATIONS. 2. A statement of the name and place of residence of each cred- itor, and of each person with whom such an engagement was made, and to whom it is to be performed, if known; or, if either is not known, a statement of that fact. 3. A statement of the sum owing to each creditor, or other per- son specified in the last subdivision, and the nature of each debt, demand, or other engagement. 4. A statement of the true cause and consideration of the indebt- edness to each creditor. 5. A full, just, and true inventory of all the property of the corporation, and of all the books, vouchers, and securities, relating thereto. 6. A statement of each incumbrance upon the property of the corporation, by judgment, mortgage, pledge, or otherwise. 7. A full, just, and true account of the capital stock of the cor- poration, specifying the name of each stockholder; his residence, if it is known, or if it is not known, stating that fact; the number of shares belonging to him; the amount paid in upon his shares; and the amount still due thereupon. [Code Civil Procedure, § 2421.] § 17s. Affidavit to be annexed to petition. An affidavit, made by each of the petitioners, to the effect that the matters of fact, stated in the petition and the schedule, are just and true, so far as the affiant knows or has the means of knowing the same, must be annexed to the petition and schedule. [Code Civil Procedure, § 2422.] § 176. Presentation of petition. The papers must be presented at a special term of the supreme court, held within the judicial district, embracing the county wherein the principal office of the corporation is located. [Code Civil Procedure, § 2423. For remainder of section see this article, §§ 178, 181, 182, 184.] § 177. Corporations without stockholders. In the case of corpor- ations affected by the provisions of this article and not having stock- holders, it shall be sufficient for the purposes of this article to notify, name and refer to the "members" of such corporations, instead of "stockholders," as herein provided. [Code Civil Procedure, § 2431. For remainder of section see this article, § 195.] § 178. Action by court upon petition for dissolution. In a case specified in sections one hundred and seventy-one, one hundred and seventy-two and one hundred and seventy-three of this chapter the court may, in its discretion, entertain or dismiss the application. Where it entertains the application, or where the cause is one of those speci- fied in section one hundred and seventy of this chapter, the court must make an order, requiring all persons interested in the corporation to show cause before it, or before a referee designated in the order, at a time and place therein specified, not less than six weeks after the granting of the order, why the corporation should not be dissolved. [Code Civil Procedure, § 2423. For remainder of section see this article, §§ 176, 181, 182, 184.] § 179. Publication of order to show cause why corporation should not be dissolved. A copy of the order must be published, as prescribed GENERAL CORPORATION LAW. 395 therein, at least once in each of the three weeks immediately preceding the time fixed therein for showing cause, in one or more newspapers, specified in the order, published in the city or county wherein the order is entered. [Code Civil Procedure, § 2424.] § 180. Service of order to show cause. A copy of the order must also be served upon each of the persons, specified in the schedule as a creditor or stockholder of the corporation, or as a person to whom an engagement of the corporation is to be performed, other than a person whose residence is stated to be unknown, or to be without the United States. The service must be made either personally, at least ten days before the time appointed for the hearing; or by depositing a copy of the order, at least twenty days before the time so appointed, in the post-office, inclosed in a postpaid wrapper, addressed to the person to be served, at his residence, as stated in the schedule. [Code Civil Procedure, § 2425.] § 181. Entering and filing order and papers. The order must be entered, and the papers must be filed, within ten days after the order is made, with the clerk of the county where the principal office of the corporation is located. [Code Civil Procedure, § 2423. For remainder of section see this article, §§ 176, 178, 182, 184.] § 182. Temporary receiver. If it shall be made to appear to the satisfaction of the court that the corporation is insolvent, the court may at any stage of the proceedings before the final order, on motion of the petitioners on notice to the attorney-general, or on motion of the attorney-general on notice to the corporation, appoint a temporary receiver of the property of the corporation, which receiver shall have all the powers and be subject to all the duties that are defined as be- longing to temporary receivers appointed in an action, in section one hundred and four of this chapter. The court may also, in its discretion, at any stage in the proceeding after the appointment of a temporary receiver, upon like motion and notice, confer upon such temporary re- ceiver the powers and authority, and subject him to the duties and liabilities of a permanent receiver, or as much thereof as it thinks proper, except that he shall not make any final distribution among the creditors and stockholders, before final order in the proceedings, unless he is specially directed so to do by the court. [Code Civil Procedure, § 2423. For remainder of section see this article, §§ 176, 178, 181, 184.] § 183. Application for appointment of receiver. Every application made for the appointment of a receiver of a corporation other than applications made by the attorney-general on behalf of the people of the state, shall be made at a special term of the supreme court held in and for the judicial district in which the principal business office of the corporation is located. [L. 1883, Ch. 378, § I pt., as amended by L. 1896, Ch. 282, § i.] § 184. Injunction. If a temporary receiver be appointed, the court may, in its discretion, on like motion and notice, with or without se- curity, at any stage of the proceeding before the final order, grant an injunction, restraining the creditors of the corporation, from beginning any action against the said corporation for the recovery of a sum of 396 NEW YORK CORPORATIONS. money, or from taking any further proceedings in such an action there- tofore commenced. Such injunction shall have the same effect and be subject to the same provisions of law as if each creditor upon whom it is served was named therein. [Code Civil Procedure, § 2423. For remainder of section see this article, §§ 176, 178, 181, 182.] § 185. Referee. If a referee was not designated in the order to show cause, the court may, in its discretion, appoint a referee when or after the order is returnable. [Code Civil Procedure, § 2426. For remainder of section see this article, §§ 186, 187.] § 186. Hearing. At the time and place specified in the order, or at the time and place to which the hearing is adjourned, the court, or the referee, must hear the allegations and proofs of the parties, and determine the facts. [Code Civil Procedure, § 2426. For remainder of section see this article, §§ 185, 187.] § 187. Decision. The decision of the court, or the report of the referee, must be in writing, and must be made and filed with all con- venient speed. It must contain a statement of the effects, credits, and other property, and of the debts and other engagements, of the cor- poration, and of all other matters, pertaining to its affairs. [Code Civil Procedure, § 2426. For remainder of section see this article, §§ 185, 186.] § 188. Use of original papers on hearing. The court or the ref- eree is entitled to use, upon the hearing, the original petition, and the schedules annexed thereto; and the clerk must transmit them accord- ingly, upon the written order of the judge, or of the referee. In that case, they must be returned with the decision or report. [Code Civil Procedure, § 2427. For remainder of section see this article, § 189.] § 189. Amending papers. The court may, at any stage of the proceedings before final order, on the application of the petitioners, or a majority of them, or on the application of the temporary receiver, grant an order amending the schedules annexed to the original peti- tion, by the insertion of additional items, or by making the statements or inventory fuller and in greater detail than as originally filed, with the like effect as though said petition and schedules had been originally presented and filed as amended. [Code Civil Procedure, § 2427. For remainder of section see this article, § 188.] § igo. Final order. Where the hearing is before a referee, a mo- tion for a final order must be made to the court, upon notice to each person who has made himself a party to the proceedings, by filing with the clerk, before the close of the hearing, a notice of his appearance, in person or by attorney, specifying a post-office within the state, where such a notice may be served. The notice may be served as pre- scribed in the code of civil procedure for the service of a paper upon an attorney in an action. Where the hearing was before the court, a motion for a final order may be made immediately, or at such a time and upon such a notice, as the court prescribes. [Code Civil Procedure, § 2428.] GENERAL CORPORATION LAW. 397 § 191. Permanent receiver. Upon an application for a final order, if it appear to the court in a case specified in section one hundred and seventy of this chapter that the corporation is insolvent, or, in a case specified either in that section, or in section one hundred and seventy- one, one hundred and seventy-two and one hundred and seventy-three of this chapter, that for any reason a dissolution of the corporation will be beneficial to the interests of the stockholders and not injurious to the public interests, the court must make a final order dissolving the corporation, and appointing one or more receivers of its property. But in the case of a solvent corporation, the court may, if there is no objection by creditors, dispense with a receiver and provide in the final order for the distribution of the assets. Upon the entry of the order the corporation is dissolved. A receiver appointed under this section shall have all the powers, duties and liabilities of receivers under article eleven of this chapter. [Code Civil Procedure, § 2429. For remainder of section see this article, §§ 192, 194.] § 192. Appointment of director, trustee or other officer or stock- holder as receiver. The court may, in its discretion, appoint a director, trustee, or other officer, or a stockholder of the corporation, a re- ceiver of its property. [Code Civil Procedure. § 2429. For remainder of section see this article, §§ 191, 194.] § 193. Certain sales, transfers and judgments void. A sale, as- signment, mortgage, conveyance, or other transfer, of any property of a corporation, made after the filing of a petition as prescribed in this article, in payment of, or as security for, an existing or prior debt, or for any other consideration; or a judgment thereafter rendered against the corporation by confession, or upon the acceptance of an offer, is absolutely void, as against the receiver appointed in the special pro- ceeding, and as against the creditors of the corporation. [Code Civil Procedure, § 2430.] § 194. Omission, defect or default of receiver. In a proceeding for the voluntary dissolution of a corporation, the court may, in the furtherance of justice, upon notice to the attorney-general, and the attorney-general not objecting, and upon such further notice to cred- itors or others interested as the court shall direct, which notice may be made by mail upon all persons and corporations not residing or existing within the state, relieve a receiver from any omission, defect or default, in any proceeding or act required by law to be taken or done, or in the giving of any notice required by law to be given, and the court may upon like notice, confirm any act of a receiver, and any decision, report, order or judgment made in such proceeding. [Code Civil Procedure, § 2429. For remainder of section see this article, §§ 191, 192.] § 195. Exception of certain corporations. This article does not apply to an incorporated library society, to a religious., corporation, or to a select school or academy, incorporated by the regents of the university or by the legislature, or to a municipal or other political corporation. [Code Civil Procedure, § 2431. For remainder of section see this article, § 177.] 398 NEW YORK CORPORATIONS. ARTICLE 10. DISSOLUTION OF STOCK CORPORATION WITHOUT JUDICIAL PROCEEDINGS. Section 220. Dissolution of stock corporation, before) beginning business. 221. Dissolution of stock corporation before expiration of time limit. § 220. Dissolution of stock corporation before beginning busi- ness. The incorporators named in any certificate of incorporation filed for the purpose of creating a domestic stock corporation, other than a moneyed or transportation corporation, may, before the pay- ment of any part of the capital, and before beginning business, sur- render all corporate rights and franchises, by signing, verifying and filing in the office of the secretary of state and the clerk of the county where the certificate of incorporation is filed, a certificate setting forth the names of the incorporators, that no part of the capital has been paid, that there are no liabilities, that such business has not been begun, and surrendering all rights and franchises; and proof of the facts set forth in such certificate to the satisfaction of the secretary of state; and thereupon the said corporation shall be dissolved, and its corporate existence and power shall cease. In case any incor- porator of such a corporation shall be deceased, then the aforesaid certificate may be made by the surviving incorporators providing two years shall have elapsed since the date of its incorporation, but in such case the certificate shall set forth the fact that one or more of said incorporators is deceased, [Stock Corporation Law, § 61, as added by L. 1904, Ch. 296, § i, and amended by L. 1908, Ch. 457, § i.] § 221. Dissolution of stock corporation before expiration of time limit. Any stock corporation, except a moneyed or a railroad cor- poration, may be dissolved before the expiration of the time limited in its certificate of incorporation or in its charter as follows: I. The board of directors of any such corporation may at a meeting called for that purpose, upon at least three days' notice to each director, by a vote of a majority of the whole board, adopt a resolution that it is in their opinion advisable to dissolve such corporation forthwith, and thereupon shall call a meeting of the stock- holders for the purpose of voting upon a proposition that such corporation be forthwith dissolved. Such meeting of the stockholders shall be held not less than thirty nor more than sixty days after the adoption of such resolution, and the notice of the time and place of such meeting so called by the directors shall be published in one or more newspapers published and circulating in the county wherein such corporation has its principal office, at least once a week for three weeks successively next jjreceding the time appointed for holding such meeting, and on or before the day of the first publication of such notice, a copy thereof shall be served personally on each stockholder, or mailed to him at his last known post-ojffice address. Such meeting shall be held in the city, town or village in which the last preceding annual meeting of the corporation was held, and said meeting may, on the day so appointed, by the consent of a majority in interest of the stockholders present, be adjourned from time to time, and notice GENERAL CORPORATION LAW. 399 of such_ adjournment shall be published in the newspapers in which the notice of the meeting is published. If at any such meeting the holders of two-thirds in amount of the stock of the corporation, then outstanding, shall, in person or by attorney, consent that such disso- lution shall take place and signify such consent, in writing, then such corporation shall file such consent, attested by its secretary or treas- urer, and its president or vice-president, together with the powers of attorney signed by such stockholders executing such consent by attorney, with a statement of the names and residences of the then existing board of directors of said corporation, and the names and residences of its officers duly verified by the secretary or treasurer or president of said corporation, in the office of the secretary of state. 2. The secretary of state shall thereupon issue to such corpora- tion, in duplicate, a certificate of the filing of such papers and that it appears therefrom that such corporation has complied with this section in order to be dissolved, and one of such duplicate certificates shall be filed by such corporation in the office of the clerk of the county in which such corporation has its principal office; and there- upon such corporation shall be dissolved and shall cease to carry on business, except for the purpose of adjusting and winding up its business. The board of directors shall cause a copy of such certificate to be published at least once a week for two weeks in one or more newspapers published and circulating in the county in which the prin- cipal office of such corporation is located, and at the expiration of such publication, the said corporation by its board of directors shall proceed to adjust and wind up its business and affairs with power to carry out its contracts and to sell its assets at public or private sale, and to apply the same in discharge of debts and obligations of such corporation, and, after paying and adequately providing for the pay- ment of such debts and obligations, to distribute the balance of assets among the stockholders of said corporation, according to their respective rights and interests. 3. Said corporation shall nevertheless continue in existence for the purpose of paj^ing, satisfying and discharging any existing debts or obligations, collecting and distributing its assets and doing all other acts required in order to adjust and wind up its business and affairs, and may sue and be sued for the purpose of enforcing such debts or obligations, until its business and affairs are fully adjusted and wound up. 4. After paying or adequately providing for the debts and obliga- tions of the corporation the directors may, with the written consent of the holders of two-thirds in amount of the capital stock, sell the remaining assets or any part thereof to a corporation organized under the laws of this or any other state, and engaged in a business of the same general character, and take in payment therefor the stock or bonds of both of such corporation and distribute them among the stockholders, in lieu of money, in proportion to their interest therein, but no such sale shall be valid as against any stockholder, who, within sixty days after the mailing of notice to him of such sale, shall apply to the supreme court in the manner provided by section seventeen of the stock corporation law, for an appraisal of the value 400 NEW YORK CORPORATIONS. of his interest in the assets so sold; unless within thirty days after such appraisal the stockholders consenting to such sale, or some of them, shall pay to such objecting stockholder or deposit for his account, in the manner directed by the court, the amount of such appraisal and upon such payment or deposit the interest of such objecting stockholder shall vest in the person or persons making such payment or deposit. [Stock Corporation Law, § 57- as added by L,. 1896, Ch. 932, § I, and amended by L. 1900, Ch. 760, § i.] ARTICLE II. POWERS, DUTIES AND LIABILITIES OF RECEIVERS OF CORPORATION. Section 230. Application of this article. 231. Receiver trustee of property. 232. Receiver's title to property. 233. Transfer of assets of corporation to receiver. 234. Security of receiver. 235. Authority of single receiver. 236. Authority where there is more than one receiver. 237. Surviving receivers. 238. Oath of receiver. 239. General powers of receivers. 240. Power of receiver to institute proceedings to recover assets. 241. Power of receiver in the settlement of controversies. 242. Power of receiver to employ counsel. 243. Power of receiver to hold real property. 244. Power of receiver to recover stock subscriptions. 245. Duty of receiver to convert assets into money. 246. Duty of receiver as to private sales. 247. Duty of receiver to keep accounts. 248. Duty of receiver to serve copy of report upon attorney- general and superintendent of banks. 249. Duty of certain receivers to make reports. 250. Duty of receivers to give notice to creditors. 251. Delivery of property and payment of debts to receiver after notice. 252. Penalty for concealing property from receiver. 253. Duty of receiver to call creditors' meeting. 254. Proceedings at creditors' meeting. 255. Deduction of disbursements and commissions by receiver. 256. Refunding consideration of subsisting contracts. 257. Retention of funds for subsisting contracts and pending suits. 258. Payment of debts not due. 259. Allowance of set-offs. 260. Penalties recovered by receiver. 261. Order of payment by receiver. 262. Failure to file claim before first dividend. 263. Second dividend by receiver. 264. Surplus to stockholders. GENERAL CORPORATION LAW. 4OI SfiCTioN 265. Disposition of moneys retained by receiver for suits. 266. Duty of receiver as to unclaimed dividend. 267. Effect of failure to file claim before second dividend. 268. Final accounting by receiver. 269. Notice of final accounting. 270. Hearing on final accounting. 271. Reference of final account. 272. Further accounting. 273. Removal of receiver. 274. Vacancy. 275. Renunciation by receiver. 276. Control of receiver by court. 2TJ. Cornmissions and expenses of receiver in voluntary dissolution. 278. Commissions and expenses of receiver except in volun- tary dissolution. § 230. Application of this article. Unless otherwise provided the provisions of this article shall apply only to permanent receivers appointed pursuant to section one hundred and six or section one hundred and ninety-one of this chapter. [New.] § 231. Receiver trustee of property. Permanent receivers shall be trustees of the property for the benefit of the creditors of the corporation and of its stockholders. [R. S., Ft. 3, Ch. 8, Tit. 4, Art. 3, § 67, pt.] § 232. Receiver's title to property. Such receivers shall be vested with all the property, real and personal, of the corporation, from the time of their having filed the security hereinbefore required. [R. S., Ft. 3, Ch. 8, Tit. 4, Art. 3, § 67, pt.] § 233. Transfer of assets of corporation to receiver. In all cases where receivers have been or shall be appointed for any corpora- tion of this state other than an insurance company on application by the attorney-general, all property, real and personal, and all securities of every kind and nature belonging to such corporation, no matter where located or by whom held, shall be transferred to, vested in and held by such receiver; provided, however, that such transfer shall only be made when directed by an order of the supreme court, due notice of the application for such order having been made on the attorney-general and the custodian of the funds, securities or property. [L. 1884, Ch. 28s, § I.] § 234. Security of receiver. Before entering upon the duties of their appointment, such receivers shall give such security to the people of the state, and in such penalty, as the court shall direct, conditioned for the faithful discharge of the duties of their appointment, and for the due accounting for all moneys received by them. [R. S., Ft. 3, Ch. 8, Tit. 4, Art. 3, § 66, pt.] § 235. Authority of single receiver. When one receiver only, shall be appointed, all the provisions herein contained, in reference to several receivers shall apply to him. [R. S., Pt. 2, Ch. s, Tit. I, Art. 8, § 2.] 402 NEW YORK CORPORATIONS. § 236. Authority where there is more than one receiver. When there are raore receivers than one appointed, the debts and property of the corporation may be collected and received by any one of them; and virhen there are more than two receivers appointed, every power and authority conferred on the receivers may be exercised by any two of them. [R. S., Pt. 2, Ch. s, Tit. I, Art. 8, § 3.] § 237. Surviving receivers. The survivor or survivors of any receivers shall have all the powers and rights given to receivers. All property in the hands of any receiver at the time of his death, re- moval or incapacity, shall be delivered to the remaining receiver or receivers, if there be any; or to the successor of the one so dying, removed or incapacitated; who may demand and sue for the same. [R. S., Pt. 2, Ch. 5, Tit. I, Art. 8, § 4.] § 238. Oath of receiver. Before proceeding to the discharge of any of their duties, all such receivers shall take and subscribe an oath, that they will well and truly execute the trust by their appointment reposed in them, according to the best of their skill and understanding; which oath shall be filed with the officer or court, that appointed them. [R. S., Pt. 2, Ch. s. Tit. I, Art. 8, § 5.] § 239. General powers of receivers. The said receivers shall have power: 1. To sue in their own names or otherwise, and recover all the property, debts and things in action, belonging or due to such cor- poration in the same manner and with the like effect as such corpora- tion might or could have done if no receivers had been appointed; and no set-off shall be allowed in any such suit, for any debt, unless it was owing to such creditor, by such corporation before the appoint- ment of the receiver of such corporation; notwithstanding the notice to creditors the receivers may sue for and recover, any property or effects of the corporation and any debts due to it, at any time, before the day appointed for the delivery or payment thereof; . 2. To take into their hands, all the property of such corporation, whether attached, or delivered to them, or afterwards discovered; and all books, vouchers and securities relating to the same; 3. In the case of a non-resident, absconding or concealed debtor, to demand and receive of every sheriff who shall have attached any of the property of such debtor, or who shall have in his hands, any moneys arising from the sale of such property, all such property and moneys, on paying him his reasonable costs and charges, for attach- ing and keeping the same, to be allowed by the court having jurisdic- tion; 4. From time to time, to sell at public auction, all the property, real and personal, vested in them, which shall come to their hands, after giving at least fourteen days' public notice of the time and place of sale, and also publishing the same for two weeks in a newspaper, printed in the county, where the sale shall be made, if there be one; 3. To allow such credit on the sale of real property by them, as they shall deem reasonable, subject to the provisions of this article for not more than three-fourths of the purchase money; which credit shall be secured by a bond of the purchaser, and a mortgage on the property sold; GENERAL CORPORATION LAW. 403 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 judgments, which may be an incumbrance on any property so sold by them; or to sell such property subject to such mortgages, contracts, pledges or judgments; 8. To settle all matters and accounts between such corporation and its debtors, or creditors, and to examine any person touching such matters and accounts, on oath, to be administered by either of them; 9. Under the order of the court appointing them, to compound with any person indebted to such corporation and thereupon to dis- charge all demands against such person. [R. S., Pt. 2, Ch. 5, Tit. I, Art. 8, § 7, except last clause of H i, beginning "Notwithstanding, etc." from R. S., Pt. 2, Ch. s. Tit. i. Art. 8, § 10.] § 240. Power of receiver to institute proceedings to recover assets. Whenever any receiver of a domestic corporation, or of the property within this state of any foreign corporation, shall have been appointed and qualified, as provided in articles five, six, seven, nine, eleven or twelve of this chapter either before, upon, or after final judgment or order in the action or special proceeding in which such appointment was made, and shall, by his own verified petition, affidavit or other competent proof, show to the supreme court, at a special term thereof, held within the judicial district wherein such appoint- ment was made, that he has good reason to believe that any officer, stockholder, agent or employee of such corporation, or any other person whomsoever, has embezzled or concealed, or withholds or has in his possession or under his control, or has wrongfully disposed of, any property of such corporation which of right ought to be sur- rendered to the receiver thereof; or that any person can testify concerning the embezzlement, concealment, withholding, possession, control or wrongful disposition of any such property, the court shall make an order, with or without notice, commanding such person or persons to appear at a time and place to be designated in the order, before the court or before a referee named by the court for that purpose, and to submit to an examination concerning such embezzle- ment, concealment, withholding, possession, control or wrongful dis- position of such property; and at the time of making such order or at any time thereafter, the court may, in its discretion, enjoin and re- strain the person or persons so ordered to appear and be examined from in any manner disposing of any property of such corporation which may be in the possession or under the control of the person so ordered to be examined, until the further order of the court in relation thereto. No person so ordered to appear and be examined shall be excused from answering any question on the ground that his answer might tend to convict him of a criminal offense; but his testi- mony taken upon such examination shall not be used against him in any criminal action or proceeding. Any person so ordered to appear and be examined shall be entitled to the same fees and mileage, to be paid at the time of serv- ing the order, as are allowed by law to witnesses subpoenaed to attend and testify in an action in the supreme court, and shall be subject to the same penalties upon failure to appear and testify in obedience to such an order as are provided by law in the case of witnesses who fail to obey a subpoena to appear and testify in an action. 404 NEW YORK CORPORATIONS. Any person appearing for examination in obedience to such order shall be sworn by the court or referee to tell the truth, and shall be entitled to be represented on such examination by counsel, and may be cross-examined, or may make any voluntary statement in his own behalf concerning the subject of his examination which may seem to him desirable or pertinent thereto. The court before which such examination is taken, as well as the referee, if one be appointed for that purpose, shall have power to adjourn such examination from time to time, and may rule upon any question or objection arising in the course of such examination, to the same extent that might be done if the person so examined were testifying as a witness in the trial of an action. When the examination of any person under such order shall be concluded, the testimony shall be signed and sworn to by the pers.on so examined, and shall be filed in the office of the clerk of the county where the action is pending, or was tried, in which the receiver was appointed; and if from such testimony it shall appear to the satisfaction of the court that any person so examined is wrongfully concealing or withholding, or has in his possession or under his control, any prop- erty which of right belongs to such receiver, the court may make an order commanding the person so examined forthwith to deliver the same to such receiver, who shall hold the same subject to the further order of the court in relation thereto; and otherwise, the court may, at the conclusion of any such examination, make such final order in the premises as the interests of justice require. [L. 1898, Ch. 534, §§ I-5-] § 241. Power of receiver in the settlement of controversies. If any controversy shall arise between the receivers and any other per- son, in the settlement of any demands against such corporation, or of debts due to such corporation the same may be referred to one or more indifferent persons, who may be agreed upon by the receivers and the party, with whom such controversy shall exist, by a writing to that effect, signed by them. If such referee or referees be not selected by agreement, then the receivers or the other party to the controversy, provided no action at law is pending arising out of any such debts or demands, may serve a notice of their intention to apply to any judge of the supreme court at chambers, residing in the same district with said receivers, for the appointment of one or more referees, specifying the time and place when such application will be made, which notice shall be served at least ten days before the time so therein specified. On the day so specified, upon due proof of the service of such notice, the judge before whom the application is made may, in his discretion, proceed to select one or more referees, the same in all respects as they are now selected according to the rules and practice of the supreme court. When any witness to such controversy shall reside out of the county where the said receivers resided at the time of their appoint- ment, the referee or referees appointed to hear said controversy shall have power to issue a commission or commissions in like manner as justices of the peace are now authorized to issue the same, and the testimony so taken shall be returned to said referee or referees in the same manner, and be read before them on a hearing, in like manner as testimony taken on commission before justices of the peace. The officer before whom they shall be selected, shall certify such selection in writing. Such certificate, or the written agreement of the GENERAL CORPORATION LAW. 405 parties, shall be filed by the receivers in the office of a clerk of the supreme court, and an order shall thereupon be entered by such clerk in vacation or in term, appointing the persons so selected to determine the controversy. Such referees shall have the same powers, and be subject to the like duties and obligations, and shall receive the same compensation, as referees appointed by the supreme court, in personal actions pend- ing therein. The report of the referees shall be filed in the same office where the order for their appointment was entered, and shall be conclusive on the rights of the parties, if not set aside by the court. [R. S., Pt. 2, Ch. 5, Tit. I, Art. 8, §§ 19-25. Sections 19, 22, as amended by L. 1862, Ch. 373, §§ i, 4. Sections 20, 21, as amended by L,. 1907, Ch. 476, § I.] § 242. Power of receiver to employ counsel. If the receiver of a corporation employs counsel he shall within three months after he has qualified as receiver enter into a written contract fixing the compensa- tion of such counsel at not exceeding a certain amount or a certain percentage of the sums received and disbursed by him, which contract must be approved by the supreme court, on at least eight days' notice to the attorney-general. A payment by such receiver to his counsel on account of services shall only be made, pursuant to an order of the court, on notice to the attorney-general and subject to review on the final accounting. A contract with counsel shall not be made for a longer period than eighteen months, but may be renewed from time to time for periods of not more than one year, if approved by the supreme court on at least eight days' notice to the attorney-general. In case of the intervention of any policy-holder or depositor, by permission of the court, such policy-holder or depositor shall defray the legal ex- penses thereof, and no allowance shall be made for costs or fees to any attorney of such policy-holder or depositor. It shall be unlawful for receivers of an insurance, banking or railroad corporation, or trust company to pay to any attorney or counsel any costs, fees or allow- ances until the amounts thereof shall have been stated to the special term as provided in section two hundred and forty-nine of this chap- ter, as expenses incurred, and shall have been approved by that court, by an order of the court duly entered; and any such order shall be the subject of review by the appellate division and the court of appeals on an appeal taken therefrom by any party aggrieved thereby. ["If the receiver" to "in case of the intervention," L. 1883, Ch. 378, § 2a, added by L. 1906, Ch. 349, § 2. Sentence beginning "In case of the intervention," L. 1883, Ch. 378, § 5. Remainder of section, L. 1883, Ch. 378, § 4 pt., as amended by L. 1896, Ch. 139, § i.] § 243. Power of receiver to hold real property. A receiver, appointed by or pursuant to an order or a judgment, in an action in the supreme court or a county court, or in a special proceeding for the voluntary dissolution of a corporation, may take and hold real proi>- erty, upon such trusts and for such purposes as the court directs, subject to the direction of the court, from time to time, respecting the disposition thereof. [Code Civil Procedure, § 716. For remainder of section see Code Civil Procedure, § 716.] § 244. Power of receiver to recover stock subscriptions. If there shall be any sum remaining due upon any share of stock subscribed in 406 NEW YORK CORPORATIONS. such corporation, the receiver shall immediately proceed to recover the same, unless the person so indebted shall be wholly insolvent; and for that purpose may commence and prosecute any action or proceed- ing for the recovery of such sum, without the consent of any creditors of such corporation. [R. S., Pt. 3, Ch. 8, Tit, 4. Art. 3, § 69.] § 245. Duty of receiver to convert assets into money. The receivers shall, as speedily as possible, convert the property, real and personal, of the corporation into money. [R. S. Pt. 2, Ch. 5, Tit. I, Art. 8, § 26 pt.] § 246. Duty of receiver as to private sales. A receiver duly appointed in this state by and pursuant to a judgment in an action, or by and pursuant to an order in a special proceeding, may, upon applica- tion to the court by which such judgment was rendered, or such order was made, and upon notice to such parties as may be entitled to notice of applications made in such action or special proceeding, be author- ized by the said court to sell or convey the property, whether real or personal, of the corporation of which he is the receiver, at private sale, upon such terms and conditions as the court may direct. [L. 1898, Ch. 522, § I.] § 247. Duty of receiver to keep accounts. They shall keep a regular account of all moneys received by them as receivers; to which, every creditor, or other person interested therein, shall be at liberty, at all reasonable times, to have recourse. [R. S. Pt. 2, Ch. 5, Tit. I, Art. 8, § 26 pt.] § 248. Duty of receiver to serve copy of report upon attorney- general and superintendent of banks. All receivers of insolvent cor- porations who are required by law to make and file reports of their proceedings shall at the time of making and filing such reports, serve a copy thereof upon the attorney-general of this state, and receivers of such corporations as report to, and are under the supervision of, the banking department shall on the first day of January and July of each year, during the continuance of their respective trusts, file with the superintendent of banks a report, verified by oath, in such form as the superintendent may prescribe, showing the condition of their re- spective trusts. In case any receiver of an insolvent corporation shall neglect to make and file a report of his proceedings for thirty days after the time he is required by law to make and file such report, or shall neglect for the same length of time to serve a copy thereof on the attorney-general, as required by this section the attorney-general may make a motion in the supreme court for an order to compel the making and filing and serving a copy on him of such report, or for the removal of such receiver from his office. [L. 1880, Ch. S37, § I, as amended by L. 1881, Ch. 639, § i. Last sentence, L. 1880, Ch. S37. § 2.] § 249. Duty of certain receivers to make reports. It shall be the duty of every receiver of an insurance, banking or railroad corporation, or trust company, to present every six months to the special term of the supreme court, held in the judicial district wherein the place of trial or venue of the action or special proceeding in which he was appointed may then be, on the first day of its first sitting, after the GENERAL CORPORATION LAW. 407 expiration of such six months, and to file a copy of the same, if a receiver of a bank or trust company, with the superintendent of banks; if a receiver of an insurance company, with the superintendent of insurance; and in each case with the attorney-general, an account exhibiting in detail the receipts of his trust, and the expenses paid and incurred therein during the preceding six months. Of the intention to present such account, as aforesaid, the attorney-general, and also the surety or sureties on the official bond of such receiver, shall be given eight days' notice in writing; and the attorney-general shall examine the books and accounts of such receiver at least once every twelve months. [L. 1883, Ch. 378, § 4, pt., as amended by L,. 1885, Ch. 40, § i, and L. 1896, Ch. 139, § I.] § 250. Duty of receivers to give notice to creditors. The re- ceivers immediately upon their appointment shall give notice thereof which shall be published for three weeks in a newspaper printed in the county where the principal place of conducting the business of such corporation shall have been situated; and therein shall require, 1. AH 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 publica- tion of such notice. 4. All persons holding any open or subsisting contract of such corporation, to present the same in writing and in detail to such receivers, at the time and place in such notice specified. [Paragraphs 1-3, R. S. Pt. 2, Ch. s, Tit. i. 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 receiver after notice. After the first publication of the notice of the appoint- ment of receivers, every person having possession of any property belonging to such corporation, and every person indebted to such corporation, shall account and answer for the amount of such debt and for the value of such property to the said receivers. [R. S., Pt. 3, Ch. 8, Tit. 4, Art. 3, § 72 pt.] § 252. Penalty for concealing property from receiver. Every person indebted to such corporation, or having the possession or custody of any property or thing in action, belonging to it, who shall conceal the same, and not deliver a just and true account of such indebtedness, or not deliver such property or thing in action, to the receivers, or one of them, by the day for that purpose appointed, shall forfeit double the amount of such debt, or double the value of such property so concealed; which penalties may be recovered by the receivers. TR. S., Pt. 2, Ch. 5, Tit. I, Art. 8, § 11.] § 253. Duty of receiver to call creditors' meeting. They shall call a general meeting of the creditors of such corporation, within four 408 NEW YORK CORPORATIONS. months from the time of their appointment by a notice to be pub- lished in the same manner, as hereinbefore directed respecting the publication of the notice of their appointment; in which notice, they shall specify the place and time of such meeting, which time shall not be more than three months, nor less than two months after the first publication of such notice. Every such notice shall be published at least once in each week, until the time of such meeting. [First clause to "time of their appointment," R. S., Pt. 3, Ch. 8, Tit. 4, Art. 3, § 74, pt.; from "by a notice" to "of such meeting" R. S. Pt. 2, Ch. s. Tit. I, Art. 8, § 27.] § 254. Proceedings at creditors' meeting.. At such meeting, or other adjourned meeting thereafter, all accounts and demands for and against such corporation, and all its open and subsisting contracts, shall be ascertained and adjusted as far as may be, and the amount of moneys in the hands of the receivers declared. ["At such meeting" to "thereafter" R. S., Pt. 2, Ch. 5, Tit. i. Art. 8, § 28, pt.; remainder of section R. S., Pt. 3, Ch. 8, Tit. 4, Art. 3, § 74, pt.] § 25s. Deduction of disbursements and commissions by receiver. Out of the moneys in their hands the receivers may first deduct all the necessary disbursements made by them in the discharge of their duty and such commissions as may be allowed by law. [R. S., Pt. 2, Ch. 5, Tit. I, Art. 8, § 29.] § 256. Refunding consideration of subsisting contracts. If there shall be any open and subsisting engagements or contracts of such corporation, which are in the nature of insurances or contingent en- gagements of any kind, the receivers may, with the consent of the party holding such engagement, cancel and discharge the same, by refunding to such party the premium or consideration paid thereon by such corporation, or so much thereof as shall be in the same pro- portion to the time which shall remain of any risk assumed by such engagement, as the whole premium bore to the whole term of such risk; and upon such amount being paid by such receivers to the person holding or being the legal owner of such engagement, it shall be deemed canceled and discharged as against such receivers. [R. S., Pt. 3, Ch. 8, Tit. 4, Art. 3, § 75.] § 257. Retention of funds for subsisting contracts and pending suits. The receivers shall retain out of the moneys in their hands, a sufficient amount to pay the sums, which they are hereinbefore authorized to pay, for the purpose of canceling and discharging any open or subsisting engagements. If any suit be pending against the corporation or against the receivers, for any demand, the receivers may retain the proportion which would belong to such demand if established, and the necessary costs and proceedings, in their hands, to be applied according to the event of such suit, or to be distributed in a second or other dividend. [R. S., Pt. 3. Ch. 8, Tit. 4, Art. 3, §§ 77, 78.] § 258. Payment of debts not due. Every person to whom a cor- poration shall be indebted on a valuable consideration, for any sum of money not due at the time of such distribution, but payable after- wards, shall receive his proportion with other creditors, after deducting GENERAL CORPORATION LAW. 4O9 a rebate of legal interest upon the sum distributed, for the time unex- pired of such credit. [R. S., Pt. 2, Ch. 5, Tit. I, Art. 8, § 35-] § 259. Allowance of set-offs. Where mutual credit has been given by any corporation, and any other person, or mutual debts have sub- sisted between such corporation and any other person, the receivers may set off such credits or debts, and pay the proportion or receive the balance due. But no set-off shall be allowed of any claim or debt, which would not have been entitled to a dividend, as hereinbe- fore directed. No set-off shall be allowed by such receivers, of any claim or debt, which shall have been purchased by, or transferred to, the person clairning its allowance, which could not have been set off by him, in a suit brought by such receivers. [First paragraph, R. S., Pt. 2, Ch. 5, Tit. i. Art. 8, § 36. Second paragraph, R. S., Pt. 2, Ch. s. Tit. i, Art. 8, § 37.] § 260. Penalties recovered by receiver. All penalties which shall be recovered by any receivers, pursuant to the provisions of this article, shall be deemed a part of the property of the corporation, and shall be distributed as such among its creditors. [R. S., Pt. 2, Ch. s, Tit. I, Art. 8, § 39.] § 261. Order of payment by receiver. The receiver shall dis- tribute the residue of the moneys in their hands, among all those who shall have exhibited their claims as creditors, and whose debts shall have been ascertained, as follows: 1. All debts due by such corporation to the United States, and all debts entitled to a preference under the laws of the United States. 2. All debts that may be owing by the corporation as guardian, executor, administrator or trustee; and if there be not sufficient to pay all debts of the character above specified, then a distribution shall be made among them, in proportion to their amounts respectively. 3. Judgments actually obtained against such corporation, to the extent of the value of the real estate on which they shall respectively be liens. 4. All other creditors of such corporation, in proportion to their respective demands, without giving any preference to debts due on specialties. [First clause to colon (:), R. S., Pt. 3, Ch. 8, Tit. 4, Art. 3, § 79, pt.; subd. I, "all debts due by such corporation to the United States and," R. S., Pt. 2, Ch. 5, Tit. i. Art. 8, § 32; subd. i, "all debts entitled to a preference under the laws of the United States," R. S., Pt. 3, Ch. 8, Tit. 4, Art. 3, § 79, pt.; subd. 2, R. S., Pt. 2, Ch. 5, Tit. i. Art. 8, § 34; subds. 3 and 4, R- S., Pt. 3, Ch. 8, Tit. 4, Art. 3, § 79, pt.] § 262. Failure to file claim before first dividend. Every creditor who shall have neglected to exhibit his demand before the first divi- dend, and who shall deliver his account to the receivers before the second dividend, shall receive the sum he would have been entitled to on the first dividend, before any distribution be made to the other creditors. [R. S., Pt. 3, Ch. 8, Tit. 4, Art. 3, § 81, pt.] § 263. Second dividend by receiver. If the whole of the prop- erty of such corporation be not distributed on the first dividend, the 41 NEW YORK CORPORATIONS. receivers shall, within one year thereafter, make a second dividend of all the moneys in their hands, among the creditors entitled thereto; of which, and that the same will be a final dividend, three weeks' notice shall be inserted once in each week in a newspaper printed in the county where the principal place of business of such corporation was situated. Such second dividend shall be made in all respects in the same manner as herein prescribed in relation to the first dividend, and no other shall be made thereafter among the creditors of such corpora- tion, except to the creditors having suits against it, or against the receivers, pending at the time of such second dividend, and except of the moneys which may be retained to pay such creditors, as herein pro- vided. [First paragraph, R. S., Pt. 3, Ch. 8, Tit. 4, Art. 3, § 80. Second paragraph, R. S., Pt. 3, Ch. 8, Tit. 4, Art. 3, § 81, pt.] § 264. Surplus to stockholders. If after the second dividend is made, there shall remain any surplus in the hands of the receivers, they shall distribute the same among the stockholders of such cor- poration, in proportion to the respective amounts paid in by them, severally, on their shares of stock. [R. S., Pt. 3, Ch. 8, Tit. 4, Art. 3, § 83.] § 265. Disposition of moneys retained by receiver for suits.- When any suit pending at the time of the second dividend shall be ter- minated, they shall apply the moneys retained in their hands for that purpose, to the payment of the amount recovered, and their neces- sary charges and expenses; and if nothing shall have been recovered, they shall distribute such moneys, after deducting their expenses and costs, among the creditors and stockholders of the corporation, in the same manner as herein directed in respect to a second dividend. [R. S., Pt. 3, Ch. 8, Tit. 4, Art. 3, § 84.] § 266. Duty of receiver as to unclaimed dividend. If any divi- dend that shall have been declared, shall remain unclaimed by the person entitled thereto for one year after the same was declared, the receivers shall consider it as relinquished, and shall distribute it, on any subsequent dividend, among the other creditors. [R. S., Pt. 2, Ch. s, Tit. I, Art. 8, § 42.] § 267. Effect of failure to file claim before second dividend. After such second dividend shall have been made, the receivers shall not be answerable to any creditor of such corporation, or to any person hav- ing claims against such corporation, by virtue of any open or subsist- ing engagement, unless the demands of such creditor shall have been exhibited, and the engagements upon which such claims are founded, shall have been presented to the said receivers, in detail and in writing, before or at the time specified by them in their notice of a second dividend. [R. S., Pt. 3, Ch. 8, Tit. 4, Art. 3, § 82.] § 268. Final accounting by receiver. A receiver shall apply with- in one year after qualifying as such for a final settlement of his ac- counts and an order for distribution, or shall apply to the court upon notice to the attorney-general for an extension of time, setting forth the reasons why he is unable to close his accounts, which order GENERAL CORPORATION LAW. 4II may be granted in the discretion of the court. The attorney-general or any creditor, or any party interested, may apply for an order that the receiver show cause why an accounting and distribution shall not be had at any time after the expiration of one year after the receiver qualifies; and it shall be the duty of the attorney-general after the ex- piration of eighteen months from the time the receiver enters upon his duties, in case he has not applied for a final settlement of his accounts, to apply for such an order on notice to such receiver. In case of such application by a party other than the receiver the court shall direct the receiver to take steps to account with all convenient speed. The receiver is not required or authorized to file any account, except as herein provided, except by special order of the court. [Code Civil Procedure, § 2431b.] § 269. Notice of final accounting. Previous to rendering such account the receivers shall insert a notice of their intention to present the same, once in each week, for three weeks, in a newspaper, of the county in which notices of dividends are herein required to be inserted, specifying the time and place at which such account will be rendered. [R. S., Pt. 3, Ch. 8, Tit. 4, Art. 3, § 87.] § 270. Hearing on final accounting. Upon the coming in of such report, the court shall hear the allegations of all concerned therein, and shall allow or disallow such account, and decree the same to be final and conclusive upon all the creditors of such corporation, upon all persons who have claims against it, upon any open or subsisting engagement, and upon all the stockholders of such corporation. [R. S., Pt. 3, Ch. 8, Tit. 4, Art. 3, § 89, pt.] § 271. Reference of final account. The referee to whom such account shall be referred, shall hear and examine the proofs, vouchers and documents oiTered for or against such account, and shall report thereon fully to the court. [R. S., Pt. 3, Ch. 8, Tit. 4, Art. 3, § 88.] § 272. Further accounting. Such receivers shall also account from time to time in the same manner, and with the like effect, for all moneys which shall come to their hands after the rendering of such account, and for all moneys which shall have been retained by them for any of the purposes hereinbefore specified, and shall pay into court all unclaimed dividends. [R. S., Pt. 3, Ch. 8, Tit. 4, Art. 3, § 89, pt.] § 273. Removal of receiver. Such receivers may be removed by the court. [R. a, Pt. 3, Ch. 8, Tit. 4, Art. 3, § 8s, pt.] § 274. Vacancy. Any vacancy created by removal, death or other- wise, may be supplied by the court. [R. S., Pt. 3, Ch. 8, Tit. 4, Art. 3, § 8s, pt.] § 275. Renunciation by receiver. Any receiver who shall be desirous of renouncing the trust vested in him, may apply to the court from whom his appointment was received, for an order to all persons interested, to show cause why such renunciation should not be accepted. Such application shall be accompanied by a full, true and just account of all the transactions of such receiver, and particularly of the 412 NEW YORK CORPORATIONS. property, moneys and effects received by him; of all payments made, whether to creditors or otherwise; and of the remaining effects and property of the corporation, in respect to which he was appointed receiver, within his knowledge, and the situation of the same. To such account shall be annexed the affidavit of the receiver, that the said account is in all respects just and true, according to the best of his knowledge and belief; which affidavit shall be subscribed and sworn to, before the court, to whom the application is made, and shall be certified by the clerk of the court. Such court, shall thereupon grant an order, directing notice to be given to all persons interested in the property of the corporation, in respect to which such receiver was appointed, to show cause on a day or at a, term and at a place therein to be specified, why he should not be permitted to renounce his appointment. Such notice shall be published, once in each week, for six weeks successively in such newspapers, as such court shall direct. On the day appointed for such hearing, and on such other days as shall from time to time be appointed, if it shall appear that notice was duly published, the court shall proceed to hear the proofs and allegations of the parties. If it shall appear that the proceedings of such receiver, in relation to his trust, have been fair and honest, and particularly in the collec- tion of the property and debts vested in him; and if such court be satisfied that for any reason it is inexpedient for such receiver to continue in the execution of the duties of his appointment, and that such duties can be executed by another receiver, without injury to the property of the corporation, or to the creditors; and if no good cause to the contrary appear, such court shall grant an order, allowing such receiver to renounce his appointment. Upon such order being granted, such receiver shall be discharged from the trust reposed in him, and his power and authority shall there- upon cease; but he shall, notwithstanding, remain subject to any lia- bility he may have incurred, at any time previous to the granting of such order, in the management of his trust. The expense of all proceedings in effecting such renunciation shall be paid by the receiver making the application. [ R. S., Pt. 2, Ch. s. Tit. I, Art. 8, §§ 49, 5i, 52, S3, 54, 55, 56, 60, 62.] § 276. Control of receiver by court. The receivers shall be sub- ject to the control of the court and may be compelled to account at any time. [R. S., Pt. 3, Ch. 8, Tit. 4, Art. 3, § 85, pt.] § 277. Commissions and expenses of receiver in voluntary disso- lution. A receiver appointed pursuant to article nine is entitled, in addi- tion to his necessary expenses, to commissions upon the sums received and disbursed by him as the court by which or the judge by whom he is appointed allows, as follows: On the first twenty thousand dollars not exceeding five per centum; on the next eighty thousand dollars, not exceeding two and one-half per centum; and on the remainder, not exceeding one per centum; but in case the commissions of a receiver so computed shall not amount to one hundred dollars, said court or judge may in his or its discretion allow said receiver such a sum not exceeding one hundred dollars for his commissions as shall be com- mensurate with the services rendered by said receiver. [Code Civil Procedure, § 2431a.] GENERAL CORPORATION LAW. 4I3 § 278. Commissions and expenses of receiver except in voluntary dissolution. A receiver of a corporation, except a receiver appointed in proceedings for its voluntary dissolution, is entitled, in addition to his necessary expenses, to such commissions, not exceeding two and one- half per centum upon the sums received and disbursed by him, as the court by which or the judge by whom he is appointed allows, but ex- cept upon a final accounting such a receiver shall not receive on ac- count of his services for any one year a greater amount than twelve thousand dollars, nor for any period less than a year more than at that rate. Upon final accounting, the court may make an additional allow- ance to such receiver, not exceeding two and one-half per centum upon the sums received and disbursed by him, if the court is satisfied that he has performed services that fairly entitle him to such additional allowance. Where more than one receiver shall be appointed, the com- pensation herein provided shall be divided between said receivers. [L. 1883, Ch. 378, § 2, as amended by L. 1886, Ch. 275, § i; L. 1901, Ch. 506, § i; L. 1906, Ch. 349, § I.] ARTICLE 12. PROVISIONS APPLICABLE TO TWO OR MORE OF THE FOREGOING PROCEEDINGS OR ACTIONS. Section 300. Application of preceding articles to certain corporations. 301. Officers and agents may be compelled to testify in cer- tain actions. 302. Injunction staying actions by creditors in certain actions. 303. Creditors of corporation may be brought in to prove their claims in certain actions. 304. When attorney-general must bring certain actions. 305. Requisites of injunction against corporations in certain cases. 306. Appointment of receivers of property of corporations. 307. Judicial suspension or removal of officer of corporation. 308. Application of the last three sections. 309. Misnomer not available in action against stockholder. 310. Appraisal of property of insolvent corporation. 311. Application by attorney-general for removal of receiver and to facilitate closing affairs of receivership. 312. Service of papers upon attorney-general. 313. Designation of depositories of funds in order appoint- ing receiver. 314. Application to the court in certain actions and proceed- ings. 315. County wherein action may be brought by attorney- general on behalf of the people. 316. Preferences in actions * of proceedings by or against receivers. § 300. Application of preceding articles to certain corporations. Articles fifth, sixth or seventh of this chapter do not apply to a re- ligious corporation; or to a municipal or other political corporation, * So in original. 414 NEW YORK CORPORATIONS. created by the constitution, or by or under the laws of this state; or to any corporation which the regents of the university have power to dissolve, except upon the application of the regents, or of the trustees of such a corporation; and in aid of its liquidation under such dissolu- tion. [Code Civil Procedure, § 1804.] § 301. Officers and agents may be compelled to testify in certain actions. In an action, brought as prescribed in article fifth, sixth or seventh, a stockholder, officer, alienee, or agent of a corporation, is not excused from answering a question, relating to the management of the corporation, or the transfer or disposition of its property, on the ground that his answer may expose the corporation to a forfeiture of any of its corporate rights, or will tend to convict him of a criminal offense, or to subject him to a penalty or forfeiture. But his testimony shall not be used, as evidence against him, in a criminal action or spe- cial proceeding. [Code Civil Procedure, § 1805.] § 302. Injunction staying actions by creditors in certain actions. In such an action, the court may, in its discretion, on the application of either party, at any stage of the action, before or after final judgment, and with or without security, grant an injunction order, restraining the creditors of the corporation from bringing actions against the defend- ants, or any of them, for the recovery of a sum of money, or from taking any further proceedings in such actions, theretofore commenced. Such an injunction has the same effect, and, except as otherwise ex- pressly prescribed in this section, is subject to the same provisions of law, as if each creditor, upon whom it is served, was named therein, and was a party to the action in which it is granted. [Code Civil Procedure, § 1806.] § 303- Creditors of corporation may be brought in to prove their claims in certain actions. In such an action, the court may, at any stage of the action, before or after final judgment, make an order re- quiring all the creditors of the corporation to exhibit and prove their claims, and thereby make themselves parties to the action, in such a manner, and in such a reasonable time, not less than six months from the first publication of notice of the order as the court directs; and that the creditors, who make default in so doing, shall be precluded from all benefit of the judgment, and from any distribution which may be made thereunder, except as hereinafter provided. Notice of the order must be given by publication, in such newspapers, and for such a length of time, as the court directs. Notwithstanding such order any such creditor who shall exhibit and prove his claim in the manner directed thereby, with proof, by affidavit or otherwise, that he has had no notice or knowledge thereof in time to comply therewith, any time before an order is made directing a final distribution of the assets of such corporation, shall be entitled to have his claim received, and shall have the same rights and benefits thereon, so far as the assets of such corporation then remaining undistributed may render possible, as if his claim had been exhibited and proved within the time limited by such order. [Code Civil Procedure, § 1807.] § 304. When attorney-general must bring certain actions. Where the attorney-general has good reason to believe, that an action can be GENERAL CORPORATION LAW. 415 maintained in behalf of the people of the state, as prescribed in articles fifth, sixth or seventh of the chapter, except section one hundred and thirty of this chapter, he must bring an action accordingly, or apply to a competent court for leave to bring an action, as the case requires; if, in his opinion, the public interests require that an action should be brought. In a case where the action can be brought only by the attor- ney-general in behalf of the people, if a creditor, stockholder, director or trustee of the corporation, applies to the attorney-general for that purpose, and furnishes the security required by law, the attorney-gen- eral must bring the action, or apply for leave to bring it, if he has good reason to believe, that it can be maintained. Where such an application is made section nineteen hundred and eighty-six of the code of civil procedure appUes thereto, and to the action brought in pursu- ance thereof. [Code Civil Procedure, § 1808.] § 305. Requisites of injunction against corporations in certain cases. An injunction order, suspending the general and ordinary busi- ness of a corporation, or suspending from office, or restraining from the performance of his duties, a trustee, director, or other officer there- of, can be granted only by the court, upon notice of the application therefor, to the proper officer of the corporation, or to the trustee, director, or other officer enjoined. If such an injunction order is made, otherwise than as prescribed in this section, it is void. [Code Civil Procedure, § 1809. For remainder of section see Code Civil Procedure, § 1809.] § 306. Appointment of receivers of property of corporations. A receiver of the property of a corporation can be appointed only by the court, and in one of the following cases: 1. An action, brought as prescribed in articles fifth, sixth or sev- enth of this chapter. 2. An action brought for the foreclosure of a mortgage upon the property, of which the receiver is appointed, where the mortgage debt, or the interest thereupon, has remained unpaid, at least thirty days after it was payable, and after payment thereof was duly demanded of the proper officer of the corporation and where either the income of the property is specifically mortgaged, or the property itself is prob- ably insufficient to pay the mortgage debt. 3. An action brought by the attorney-general, or by a stockholder, to preserve the assets of a corporation, having no officer empowered to hold the same. 4. A special proceeding for the voluntary dissolution of a cor- poration. 5. Upon the application of the regents of the university, in aid of the liquidation of a corporation whose dissolution they contemplate or have decreed; or upon the application of the trustees of such a cor- poration, with notice to the regents. Where the receiver is appointed in an action, otherwise than by or pursuant to a final judgment, notice of the application for his appoint- ment must be given to the proper officer of the corporation. [Code Civil Procedure, § 1810.] § 307. Judicial suspension or removal of officer of corporation. A trustee, director, or other officer of a corporation shall not be sus- pended or removed from office, by a court or judge, otherwise than by 41 6 NEW YORK CORPORATIONS. the final judgment of a competent court, in an action brought by the attorney-general, as prescribed in section ninety of this chapter. [Code Civil Procedure, § 1811.] § 308. Application of the last three sections. The last three sec- tions apply to an action or special proceeding, against a corporation created by or under the laws of the state, or a trustee, director, or other officer thereof; or against a corporation created by or under the laws of another state, government, or country, or a trustee, director, or other officer thereof, where the corporation does business within the state, or has, within the state, a business agency or a fiscal agency, or an agency for the transfer of its stock. [Code Civil Procedure, § 1812. For remainder of section see Code Civil Procedure, § 1812.] § 309. Misnomer not available in action against stockholder. Where an action, authorized by a law of the state, is brought against one or more persons, as stockholders of a corporation, an objection to any of the proceedings cannot be taken, by a person properly made a defendant in the action on the ground that the plaintiff has joined with him, as a defendant in the action, a person, whose name appears on the stock-books of the corporation, as a stockholder thereof, by the name so appearing; but who is misnamed, or dead, or is not liable for any cause. In such a case, the court may, at any time before final judgment, upon motion of either party, amend the pleadings and other papers, without prejudice to the previous proceedings, by substituting the true name of the person intended, or by striking out the name of the person who is dead, or not liable, and, in a proper case, inserting the name of his representative or successor. [Code Civil Procedure, § 1813. For remainder of section see Code Civil Procedure, § 1813.] § 310. Appraisal of property of insolvent corporation. Whenever by reason of the provisions of any law of this state it shall become necessary to appraise in whole or in part the property of any corpora- tion in the hands of a receiver or otherwise, the persons whose duty it shall be to make such appraisal shall value the real estate at its full and true value, taking into consideration actual sales of neighboring real estate similarly situated during the year immediately preceding the date of such appraisal, if any; and they shall value all such property, stocks, bonds or securities as are customarily bought or sold in open markets in the city of New York or elsewhere, for the day on which such appraisal or report may be required, by ascertaining the range of the market and the average of prices as thus found, running through a reasonable period of time. [L. 1891, Ch. 34, § I.] § 311. Application by attorney-general for removal of receiver and to facilitate closing affairs of receivership. The attorney-general may, at any time he deems that the interests of the stockholders, credi- tors, policy-holders, depositors or other beneficiaries interested in the proper and speedy distribution of the assets of any insolvent corpora- tion will be subserved thereby, make a motion in the supreme court at a special term thereof, in any judicial district: 1. For an order removing the receiver of any insolvent corpora- tion and appointing a receiver thereof in his stead, or, 2. To compel him to account, or, GENERAL CORPORATION LAW. 417 3- For such other and additional order or orders as to him may- seem proper to facilitate the closing up of the affairs of such receiver- ship, and Any appeal from any order made upon any motion under this section shall be to the appellate division of the department in which such motion is made. [L. 1883, Ch. 378, § 7-] § 312. Service of papers upon attorney-general. A copy of all rnotions and all motion papers, and a copy of any other application to the court, together with a copy of the order or judgment to be pro- posed thereon to the court, in every action of proceeding for the disso- lution of a corporation or a distribution of its assets, shall, in all cases, be served on the attorney-general, in the same manner as provided by law for the service of papers on attorneys who have appeared in actions, whether the applications but for this section would be ex parte or upon notice, and no order or judgment granted shall vary in any material respect from the relief specified in such copy, order or judg- ment, unless the attorney-general shall appear on the return day and shall have been heard in relation thereto; and any order or judgment granted in any action or proceeding aforesaid, without such service of such papers upon the attorney-general, shall be void, and no receiver of any such corporation shall pay to any person any money directed to be paid by any order or judgment made in any such action or proceed- ing, untilthe expiration of eight days after a certified copy of such order or judgment shall have been served as aforesaid upon the attor- ney-general. [h. 1883, Ch. 378, § 8.] § 313. Designation of depositories of funds in order appointing receiver. All orders appointing receivers of corporations shall desig- nate therein one or more places of deposit, wherein all funds of the corporation not needed for immediate disbursement shall be deposited and no deposits or investments of such trust funds shall be made else- where, except upon the order of the court upon due notice given to the attorney-general. [L. 1883, Ch. 378, § 3.] § 314. Application to the court in certain actions and proceedings. All applications to the court shall be made in the judicial district where the principal office of the corporation against which proceedings are taken is located, excepting such applications as are made in actions brought by the attorney-general on behalf of the people of the state, and all such applications shall be made in the judicial district in which the action is triable. [h. 1883, Ch. 378, § 9, as amended by L. 1896, Ch. 282, § 2.] § 315. County wherein action may be brought by attorney-general on behalf of the people. An action or proceeding brought by the attor- ney-general on behalf of the people of the state against any corporation for the purpose of procuring its dissolution, the appointment of a receiver, or the sequestration of its property, may be brought in any county of the state, to be designated by the attorney-general. [L. 1883, Ch. 378, § I pt., as amended by L. 1896, Ch. 282, § i.] § 316. Preferences in actions or proceeding by or against receivers. All actions or other legal proceedings and appeals therefrom or therein brought by or against a receiver of any of the insolvent corporations 4l8 NEW YORK CORPORATIONS. referred to in this chapter, shall have a preference upon the calendars of all courts next in order to actions or proceedings brought by the people of the state of New York. [L. 1883, Ch. 378, § 10.) ARTICLE 13. ALTERATION AND REPEAL OF CHARTER OF CORPORA- TION. Section 320. Alteration and repeal of charter. 321. Conflicting corporate laws. § 320. Alteration and repeal of charter. The charter of every corporation shall be subject to alteration, suspension and repeal, in the discretion of the legislature. [Added by L. 1895, Ch. 672, § 2.] § 321. Conflicting corporate laws. If in any corporate law there is or shall be any provision in conflict with any provisions of this chap- ter or of the stock corporation law, the provisions so conflicting shall prevail, and the provision of this chapter or of the stock corporation law with which it conflicts shall not apply in such a case. If in any such law there is or shall be a provision relating to a matter embraced in this chapter or in the stock corporation law, but not in conflict with it, such provision in such other law shall be deemed to be in addition to the provision in this chapter or in the stock corporation law relating to the same subject-matter, and both provisions shall, in such case, be applicable. [Added by L. 1892, Ch. 687.] ARTICLE 14. LAWS REPEALED; CONSTRUCTION; WHEN TO TAKE EFFECT. Section 330. Laws repealed. 331. Construction. 332. When to take efifect. § 330. Laws repealed. Of the laws enumerated in the schedule hereto annexed, that portion specified in the last column is hereby repealed. [As amended by L. 1892, Ch. 687.] § 331. Construction. Nothing in this chapter shall be construed to impair any right or liability which any existing corporation, its officers, directors, stockholders or creditors may have or be subject to or which any such corporation, other than a railroad corporation, had or was subject to on the date when this chapter takes effect, by virtue of any special act of the legislature creating such corporation or creat- ing or defining any such right or liability, unless such special act is repealed by this chapter or the other general laws hereinbefore men- tioned. [As amended by L. 1892, Ch. 687.] GENERAL CORPORATION LAW. 419 § 332. When to take effect. This chapter shall take effect imme- diately. Schedule of Laws Repealed. Revised Statutes . . Part i, chapter 18, All Revised Statutes. .Part 3, chapter 8, title 4, sections 2, 42 Revised Statutes. .Part 3, chapter 8, title 4, article 3, §§ 66-91 Laws of Chapter Section Laws of Chapter Section 1811 67, 23s All 1862 20s, 248, 425, 1813 78 All 438,449,472 All 1815 47, 202 All 1863 63,134,346 All 1816 58 All 1864 .... 8s, 337, S17, 582.... All 1817 223 All 1865 234, 246, 307, 1818 67 All 691, 780 All 1819 102 All 1866 73, 259, 322, 371, 1821 14 All 697, 780, 799, 838.... All 1822 213 All 1867 12, 49, 248, 254, 182s 32s 4-11, 13, 419, 480, 509, 775, 14, 17, 18 906, 937, 960, 971, 1828 21 .... I Iff 76, 77, 974 All 457 (2d Meet.) 1868 253, 290, 573, 781 AH 1836 284, 316 '. .. All 1869 234, 237, 60s, 1838 160, 161, 262 All 706, 844, 917 All 1839 218 All 1870 124,135,322, 1842 165 All 443,568,773 All 1846 155 All 1871 95,481,535, 1846 215 17, 18 560, 652, 657, 1847 100 3, 4 669, 697, 883 All 1847 .;..2io, 222, 270, 272, 1872 81, 128, 146, 248, 287, 398, 404, 405- ■■ All 283, 350, 374, 426, 1848 37, 40, 45, 140, 259, 609, 611, 779, 780. .. . All 265, 360 All 1872 820. .All except 20 1849 250,362 All 1872 829,843 All 1850 71, 140 All 1873 ....151,352,432,440, 1851 14, 19, 98, 469,616,634,710, 107, 487, 497- ■• • All 737_ 814 AH T852 228, 372 All J874 76, 143, 149, 1853 53, 117, 124, 240,288,430 All 135, 245, 333 All jg^j 4 58^ 88, 108, 1853 .471 ••■•■■•• I, 2, 4 113, up, 120, 159, 1853 481, 502, 626 All jp3 256, 319 All 1854.... 3, 87,140,201, g ....343 2,4,8 252, 269, 282, 312 ... All ;|7= ■ ■ • - 343 185s . . • • 301, 302, 390, 478, ^«75 3 5, 44b, b , 3 485, 495, 546, 559.... A ^,^, ___ f ,:%,', ,,0, ^ Sg:::;-29,-83'85;2o.- :£^:.^^^:^:^..aii gj TA ''': ''':. . . ah X877 . . . .IS, ^8, .6,, ^n, tRsS 1012^^48 . AH 224, 266, 3", 374.... AH f|o 209,' Si,' 455 : : All 1878 .... 35, 61, 85. 121, 860 : : : : f li 269 523 ah 163, 203, 210, 261, 1861 149, 170, 215. 238. . . . AH 264, 316, 334. 394. ... All 420 NEW YORK CORPORATIONS. Laws of 1879 Chapter Section ..214, 253, 290, 293, 350, 377, 393, 39S, 413, 41S, 441. S03, 505, 512, 541 All 1880 .... 5, 8s, 90, 94, 113, 133. ISS, 182, 187, 223, 225, 241 All 1880 24s I, II 3, subd. 5, part relating to receivers appointed as prescribed in Code Civil Procedure, § 2429. 1880 ....254, 263, 267, 349, 41S, 417. 474, 484, Sio, 537, 575, S82, 583, 58s All 1881 22, 58, ^^, 116, 117, 148, 213, 232, 29s, 296, 311, 313, 321, 337, 3,38, 351, 399, 422, 464, 468, 470, 472, 485, S5I, 589, 639, 649, 650, 674, 685 All 1882 .... 73, 82, 140, 273, 289, 290, 306, 309, 331, 349, 353, 393, 405 All 1883 .... 46, 71, 102, 216, 232, 237, 238, 240, 287, 323, 361, 378, 381, 382, 384, 386, 387, 388, 409, 482, 483, 497 All 1884 140, 193, 208, 223, 252, 267 All 1884 285 I 1884 ....367, 386, 397, 421, 422, 439, 441, 444.- ■• All 1885 .... 40, 84, 127, 141, 153, 171, 305, 369, 422, 423, 489, 498, 535, 540, 549 All 1886 .... 65, 182, 271, 27s, 310, 321, 322, 403, 41S, 509, 551, 579, 586, 592, 601, 605, 634, 642 All Laws of Chapter Section 1887 ....450, 486, 536, 570, .601, 616, 622, 724 All 1888 .... 189, 306, 313, 359, 394, 447, 462, S13, 514, 549, 560 All 1889 .... 57, 76, 78, 236, 242, 281, 332, 369, 426, S19, 524, 531, 532, 564 All 1890 .... 23, 98, 119, 193, 292, 416, 421, 483, 497, 505, 508, 543, 563 All 1891 34 Part relating to appraisal of property of insolvent cor- porations. 38, 57, 287 All 2 All 4 .19. T891 .. 1892 . . 1892 . . 1892 687 . . All except 37 1894 136, 400 All 1895 672 All 1896 139, 282 All 1896 932 I, part adding § 57 to L. 1892, Ch. 688. 1898 522 Part relating to receivers of corporations. 1898 534 All 1899 201 All 1900 177, 704, 733, 760 All 1901 96, 214, 355, 506, 538 All 1902 9, 60, 285 All 1903 178 1904 236, 296, 490, 70s, 737, 754- ■• 1905 256 1906 ....228, 239, 349, 531- 1907 115 1908 457 All All All All All All Code Civil Procedure — 432, subd. 2, from words "by a writing" to ''an authentication;" 716, pt. relating to corporations; 1781-1808; 1809, pt. relating to corporations; 1810, 181 1; 1812, 1813, pt. relating to corporations; 241 1; 2412-2414, pt. relating to corporations; 2415, 2416, 24i9-243ib; 3390-3396, pt. relating to corporations. STOCK CORPORATION LAW. Laws of igog, Chapter 6i, constituting Chapter 59 of the Consolidated Laws. Art.ici,i; I. Short title (§1). 2. General provisions (§§ 5-18). 3. Directors and officers (§§ 25-33). 4. Stock and stockholders (§§ 50-70). 5. Laws repealed; when to take effect (§§ 80, 81). ARTICLE I. SHORT TITLE. Section i. Short Title. § I. Short title. This chapter shall be known as the "Stock Cor- poration Law." ♦[Former L. 1890, Ch. 564, § I, as amended by L. 1892, Ch. 688, § I] ARTICLE 2. GENERAL PROVISIONS. Section 5. Application of article. 6. Power to borrow money and mortgage property. 7. Validating corporate mortgages. 8. Power to guarantee bonds of other corporations. 9. fReorganization upon sale of corporate property. 10. Contents of plan or agreement. 11. Sale of property; possession of receiver and suits against him. 12. Municipalities may assent to plan of readjustment. 13. Change of place of business. 14. Combinations prohibited. 15. Merger. 16. Voluntary sale of franchise and property. 17. Rights of non-consenting stockholders oh voluntary sale of franchise and property. 18. Alterations or extension of business. § 5. Application of article. This article except sections eight, fifteen, sixteen, seventeen and eighteen thereof, shall not apply to moneyed corporations. [Former L. 1890, Ch. 564, § i pt. as amended by L. 1892, Ch. 688, § I.] •Notes at end of sections are those supplied by the Board of Statutory Consolidation. tSo in original. 421 422 NEW YORK CORPORATIONS. § 6. Power to borrow money and mortgage property. In addi- tion to the powers conferred by the general corporation law, every stock corporation shall have the power to borrow money and contract debts, when necessary for the transaction of its business, or for the exercise of its corporate rights, privileges or franchises, or for any other lawful purpose of its incorporation; and it may issue and dispose of its obligations for any amount so borrowed, and may mortgage its property and franchises to secure the payment of such obligations, or of any debt contracted for said purposes. Every such mortgage, ex- cept purchase-money mortgages and mortgages authorized by con- tracts made prior to May first, eighteen hundred and ninety-one, shall be consented to by the holders of not less than two-thirds of the capital stock of the corporation, which consent shall be given either in writing or by vote at a special meeting of the stockholders called for that purpose, upon the same notice as that required for the annual meet- ings of the corporation; and a certificate under the seal of the cor- poration that such consent was given by the stockholders in writing, or that it was given by vote at a meeting as aforesaid, shall be subscribed and acknowledged by the president or a vice-president and by the secretary or an assistant secretary, of the corporation, and shall be filed and recorded in the office of the clerk or register of the county wherein the corporation has its principal place of business. When authorized by like consent, the directors under such regulations as they may adopt, may confer on the holder of any debt or obliga- tion, whether secured or unsecured, evidenced by bonds of the cor- poration, the right to convert the principal thereof, after two and not more than twelve years from the date of such bonds, into stock of the corporation; and if the capital stock shall not be sufficient to meet the conversion when made, the directors shall from time to time, authorize an increase of capital stock sufficient for that purpose by causing to be filed in the office of the secretary of state, and a duplicate thereof in the office of the clerk of the county where the principal place of business of the corporation shall be located, a certificate under the seal of the corporation, subscribed and acknowledged by the president and secretary of the corporation setting forth, 1. A copy of such mortgage; or resolution of directors authorizing the issue of such bonds; 2. That the holders of not less than two-thirds of the capital stock of the corporation duly consented to the execution of such mortgage or resolution of directors authorizing the issue of such bonds by such corporation; 3. A copy of the resolution of the directors of the corporation authorizing the increase of the capital stock of the corporation neces- sary for the purpose of such conversion; 4- The amount of capital theretofore authorized, the proportion thereof actually issued and the amount of the increased capital stock. If the corporation be a railroad corporation the certificate shall have indorsed thereon the approval of the public service commission having jurisdiction thereof. When the certificate herein provided for has been filed, the capital stock of such corporation shall be increased to the amount specified in such certificate. [Former L. i8go, Ch. 564, § 2, as amended by L. 1892, Ch. 337, § I, and Ch. 688, § 2; L. 1901, Ch. 354, § i; L. 1905, Ch. 745, § I] STOCK CORPORATION LAW. 423 § 7. Validating corporate mortgages. Whenever any mortgage affecting property or franchises within this state heretofore or here- after executed by authority of the board of directors in behalf of any stock corporation, domestic or foreign, of any description, recites or represents in substance or effect that the execution of such mort- gage has been duly consented to, or authorized by stockholders, such recital or representation in any such mortgage, after public record thereof within this state, shall be presumptive evidence that the exe- cution of such mortgage has been duly and sufficiently consented to, and authorized by stockholders as required by any provision of law. After any svich mortgage heretofore or hereafter shall have been publicly recorded for more than one year in one or more of the counties of this state containing the mortgaged premises or any part thereof, and the corporation shall have received value for bonds actually issued under and secured by such mortgage, and interest shall have been paid on any of such bonds according to the terms thereof, such recital or representation of such mortgage so recorded shall be con- clusive evidence that the execution of such mortgage has been duly and sufficiently consented to, and authorized by stockholders as required by any provision of law, and its validity shall not be impaired by reason of any defect or insufficiency of consent or authority of stockholders or in filing or recording such consent or authority, and such mortgage shall be valid and binding upon the corporation, and those claiming under it, as security for all valid bonds issued or to be issued there- under, unless such mortgage shall be adjudged invalid in an action begun as hereinafter, in this section, provided. Notwithstanding the foregoing provisions of this section, the invalidity of any such mort- gage heretofore recorded because of insufficiency of consent by stock- holders may be adjudged in any action for such purpose begun before the first day of April, nineteen hundred and two, and the invalidity of any such mortgage hereafter recorded, because of insufficiency of con- sent by stockholders, may be adjudged in any action for such purpose begun, within one year after the earliest record of such mortgage in any county in this state, provided in either case that such action shall have been so begun by or in behalf of the corporation by direction of the board of directors acting in their own discretion, or upon the written request of the holders of not less than one-third of the capital stock of the corporation; and in any such action so begun by or in behalf of the corporation, the recitals or representations of the niort- gage shall be presumptive evidence only as first above provided. Whenever hereafter, in compliance with any law of this state, the offi- cers of any corporation shall have made and filed and recorded a cer- tificate that the execution of a mortgage hereafter made by the corporation has been duly consented to by stockholders, such certificate shall be conclusive evidence as to the truth thereof, in favor of any and all persons who in good faith shall receive or purchase, for value, any bond or obligation purporting to be secured by such mortgage, at any time when said certificate shall remain of record and uncanceled. Nothing in this section contained shall affect any right or any remedy in respect of any such right of any creditor accrued before this enactment nor shall it dispense with the necessity of obtaining the consent of the public service commission having jurisdiction thereof to any mortgage by a railroad corporation. [Former § 8, as added by L. 1901, Ch. 354, § 2.] 424 NEW YORK CORPORATIONS. § 8. Power to guarantee bonds of other corporations. Any stock corporation may, in pursuance of a unanimous vote of its stockholders voting at a special meeting called for that purpose by notice in writing signed by a majority of the directors of such corporation stating the time and place and object of the meeting and served upon each stock- holder appearing as such upon the books of the corporation, personally or by mail at his last-known post-office address at least sixty days prior to such meeting, guarantee the bonds of any other domestic corporation engaged in the same general line of business; and any stock corporation owning the entire capital stock of any other domes- tic stock corporation engaged in the same general line of business may in pursuance of a two-thirds vote of its stockholders voting at a special meeting called for that purpose by notice in writing signed by a majority of the directors of such corporation, stating the time and place and object of the meeting and served upon each stockholder appearing as such upon the books of the corporation personally, or by mail, at his last-known post-office address, at least sixty days prior to such meeting, guarantee the bonds of such other corporation. [Part of former L. 1890, Ch. 564, § 40, as amended by L. 1892, Ch. 688, § 40; h. 1902, Ch. 601, § I.] § 9. Reorganization upon sale of corporate property and fran- chises. When the property and franchises of any domestic stock cor- poration shall be sold by virtue of a mortgage or deed of trust, duly executed by it, or pursuant to the judgment or decree of a court of competent jurisdiction, or by virtue of any execution issued thereon, and the purchaser, his assignee or grantee shall have acquired title to the same in the manner prescribed by law, he may associate with him any number of persons, not less than the number required by law for an incorporation for similar purposes at least two-thirds of whom shall be citizens of the United States and one shall be a resident of this state, and they may become a corporation and take and possess the property and franchises thus sold, and which were at the time of the sale possessed by the corporation whose property shall have been so sold, upon making and acknowledging and filing in the offices where certificates of incorporation are required by law to be filed, a certificate in which they shall describe by name and reference to the law under which it was organized, the corporation whose property and franchises they have acquired, and the court by whose authority the sale had been made, with the date of the judgment or decree authorizing or directing the same, and a brief description of the prop- erty sold, and also the following particulars: 1. The name of the new corporation intended to be formed by the filing of such certificate; and the place where its principal office is to be located. 2. The maximum amount of its capital stock and the number of shares into which it is to be divided, specifying the classes thereof, whether common or preferred, and the amount of and rights pertaining to each class. 3. The number of directors, not less nor more than the number required by law for the old corporation, who shall manage the affairs of the new corporation, and the names and post-office addresses of the directors for the first year. They may insert in such certificate any provisions relating to the new corporation, or its management, contained in any plan or agreement which may have been entered into as provided in section ten of this chapter. Such corporation shall STOCK CORPORATION LAW. 425 be vested with, and be entitled to exercise and enjoy, all the rights, privileges and franchises, which at the time of such sale belonged to, or were vested in the corporation last owning the property sold, or its receiver, and shall be subject to all the provisions, duties and liabilities imposed by law on that corporation. Any proceedings here- tofore taken in substantial compliance with this section as hereby amended, and any and all incorporations based thereon are hereby ratified and confirmed. [Former L. 1890, Ch. 564, § 3, as amended by h. 1892, Ch. 688, § 3; L. 1901, Ch. 354, § i; L. 1902, Ch. 80, § i; L. 1904, Ch. 706, § I.] § 10. Contents of plan or agreement. At or previous to the sale the purchasers thereat, or the persons for whom the purchase is to be made, may enter into a plan or agreement, for or in anticipation of the readjustment of the respective interests therein of any creditors, mortgagees and stockholders, or any of them, of the corporation own- ing such property and franchises at the time of sale, and for the repre- sentation of such interests in the bonds or stock of the new corpora- tion to be formed, and may therein regulate voting by the holders of the preferred and common stock at any meeting of the stockholders, and may provide for, and regulate voting by the holders, and owners of any or all of the bonds of the corporation, foreclosed, or of the bonds issued or to be issued by the new corporation; and such right of voting by bondholders shall be exercised in such manner, for such period, and upon such conditions, as shall be therein described. Such plan or agreement must not be inconsistent with the laws of the state and shall be binding upon the corporation, until changed as therein provided, or as otherwise provided by law. The new corporation when duly organized, pursuant to such plan or agreement and to the provisions of law, may issue its bonds and stock in conformity with the provisions of such plan or agreement, and may at any time within six months after its organization, compromise, settle or assume the payment of any debt, claim or liability of the former corporation upon such terms as may be lawfully approved by a majority of the agents or trustees intrusted with the carrying out of the plan or agreement of reorganization, and may establish preferences in favor of any por- tion of its capital stock and may divide its stock into classes; but the capital stock of the new corporation shall not exceed in the aggregate the maximum amount of stock mentioned in the certificate of incor- poration. [Former L. 1890, Ch. 564, § 4, as re-enacted by L. 1892, Ch. 688, § 4, and amended by h. 1901, Ch. 354, § i.] § II. Sale of property; possession of receiver and suits against him. The supreme court may direct a sale of the whole of the prop- erty, rights and franchises covered by the mortgage or mortgages, or deeds of trust foreclosed at any one time and place to be named in the judgment or order, either in case of the non-payment of interest only, or of both the principal and interest due and unpaid and secured by any such mortgage or mortgages or deeds of trust. Neither the sale nor the formation of the new corporation shall interfere with the authority or possession of any receiver of such property and fran- chises but he shall remain liable to be removed or discharged at such time as the court may deem proper. No suit or proceeding shall be commenced against such receiver unless founded on wilful misconduct 426 NEW YORK CORPORATIONS. or fraud in his trust after the expiration of sixty days from the time of his discharge; but after the expiration of sixty days the new corporation shall be liable in any action that may be commenced against it, and founded on any act or omission of such receiver for which he may not be sued, and to the same extent as the receiver, but for this section would be or remain liable, or to the same extent that the new corporation would be had it done or omitted the acts complained of. [Former L. 1800, Ch. 564, § 5, as re-enacted by L. 1892, Ch. 688, §5.] § 12. Municipalities may assent to plan of readjustment. The commissioners, corporate authorities or proper officers of any city, town or village, who may hold stock in any corporation, the property and franchises whereof shall be liable to be sold, may assent to any plan or agreement of reorganization which lawfully provides for the formation of a new corporation, and the issue of stock therein to the proper authorities or officers of such cities, towns or villages in ex- change for the stock of the old or former corporation by them respectively held. And such commissioners, corporate authorities or other proper officers may assign, transfer or surrender the stock so held by them in the manner required by such plan, and accept in lieu thereof the stock issued by such new corporation in conformity there- with. [Former h- 1890, Ch. 564, § 6, as amended by L. 1892, Ch. 688, § 6; L. 1901, Ch. 354, § I.] § 13. Change of place of business. Any stock corporation now existing or hereafter organized under the laws of this state, except moneyed corporations, may at any time change its principal office and place of business from the city, town or county named in its certificate of incorporation, or to which it may have been changed under the provisions of this section, to any other city, town or county in this state, in which it may desire to actually transact and carry on its regular business from day to day, provided that such change has been authorized, either by unanimous consent of the stockholders expressed in writing and duly acknowledged and filed in the office of the secre- tary of state, or by a vote of the stockholders of said corporation at a special meeting of stockholders called for that purpose. When such change shall be authorized by the stockholders as herein provided, the president and secretary and a majority of the directors of such cor- poration shall sign a certificate stating the name of said corporation, the city, town and county where its principal office and place of busi- ness was originally located, and to which it may have been subse- quently changed, and the city, town and county to which it is desired to change its said principal office and place of business, and that it is the purpose of said corporation to actually transact and carry on its regular business from day to day at such place, and that such change has been authorized as herein provided, and the names of the direc- tors of said corporation and their respective places of residgnce, which certificate shall be verified by the oaths of all the persons signing the same, and when so signed and verified, shall be filed in the office of the secretary of state and a duplicate thereof in the office of the clerk of the county from which said principal office and place of business is about to be removed or changed, and another in the office of the clerk of the county to which said removal or change is to be made. STOCK CORPORATION LAW. 427 and thereupon the principal office and place of business of such cor- poration shall be changed as stated in said certificate. [Former section S9. as added by L. 1896, Ch. 929, § i, and amended by L. 1905, Ch. 489, § i.] § 14. Combinations prohibited. No domestic stock corporation and no foreign corporation doing business in this state shall combine with any other corporation or person for the creation of a monopoly or the unlawful restraint of trade or for the prevention of competition in any necessary of life. [Former L. i8go, Ch. 564, § 7, as amended by L. 1892, Ch. 688, § 7; L. 1897, Ch. 384, § I.] § 15. Merger. Any domestic stock corporation and any foreign stock corporation authorized to do business in this state lawfully owning all the stock of any other stock corporation organized for, or engaged in business similar or incidental to that of the possessor corporation may file in the office of the secretary of state, under its common seal, a certificate of such ownership, and of the resolution of its board of directors to merge such other corporation, and there- upon it shall acquire and become, and be possessed of all the estate, property, rights, privileges and franchises of such other corporation, and they shall vest in and be held and enjoyed by it as fully and en- tirely and without change or diminution as the same were before held and enjoyed by such other corporation, and be managed and con- trolled by the board of directors of such possessor corporation, and in its name, but without prejudice to any liabilities of such other cor- poration or the rights of any creditors thereof. Any bridge corporation may be merged under this section with any railroad corporation which shall have acquired the right by contract to run its cars over the bridge of such bridge corporation. [Former section 58, as added by L. 1896, Ch. 932, § i, and amended by L. 1900, Ch. 476, f l; L. 1902, Ch. 98, § I.] § 16. Voluntary sale of franchise and property. A stock corpor- ation, except a railroad corporation and except as otherwise provided by law, with the consent of two-thirds of its stock, may sell and con- vey its property, rights, privileges and franchises, or any interest therein or any part thereof to a domestic corporation, engaged in a business of the same general character, or which might be included in the certificate of incorporation of a corporation organizing under any general law of this state for a business of the same general charac- ter, and a domestic corporation the principal business of which is car- ried on in, and the principal tangible property of which is located within a state adjoining the state of New York, may with the consent of the holders of ninety-five per centum of its capital stock, sell and convey its property situate without the state of New York, not in- cluding its franchises, to a corporation organized under the laws of such adjoining state, and such sale and conveyance shall, in case of a sale to a domestic corporation, vest the rights, property and fran- chises thereby transferred, and in case of a sale to a foreign corpora- tion the property sold, in the corporation to which they are_ conveyed for the term of its corporate existence, subject to the provisions and restrictions applicable to the corporation conveying them. Before such sale or conveyance shall be made such consent shall be obtained 428 NEW YORK CORPORATIONS. at a meeting of the stockholders called upon like notice as that re- quired for an annual meeting. [Part of former section 33, added by L. 1893, Ch. 638, § i, as amended by L. 1901, Ch. 130, § i.] § 17. Rights of non-consenting stockholders on voluntary sale of franchise and property. If any stockholder not voting in favor of such proposed sale or conveyance shall at such meeting, or within twenty days thereafter, object to such sale, and demand payment for his stock, he may, within sixty days after such meeting, apply to the supreme court at any special term thereof held in the district in which the principal place of business of such corporation is situated, upon eight days' notice to the corporation, for the appointment of three persons to appraise the value of such stock, and the court shall ap- point three such appraisers, and designate the time and place of their proceedings as shall be deemed proper, and also direct the manner in which payment for such stock shall be made to such stockholders. The court may fill any vacancy in the board of appraisers occurring by refusal or neglect to serve or otherwise. The appraisers shall meet at the time and place designated, and they or any two of them, after being duly sworn honestly and faithfully to discharge their duties, shall estimate and certify the value of such stock at the time of such dissent, and deliver one copy to such corporation, and another to such stockholder, if demanded; the charges and expenses of the appraisers shall be paid by the corporation. When the corporation shall have paid the amount of such appraisal, as directed by the court, such stock- holders shall cease to have any interest in such stock and in the cor- porate property of such corporation and such stock may be held or disposed of by such corporation. [Part of former section 33, added by L. 1893, Ch. 638, § i, as amended by L. 1901, Ch. 130, § i.] § 18. Alterations or extension of business. Any stock corpora- tion heretofore or hereafter organized under any general or special law of this state may alter its certificate of incorporation so as to in- clude therein any purposes, powers or provisions which at the time of such alteration may apply to corporations engaged in a business of the same general character, or which might be included in the certificate of incorporation of a corporation organized under any general law of this state for a business of the same general character, by filing in the manner provided for the original certificate of incorporation an amend- ed certificate, executed by the president and secretary, stating the al- teration proposed, and that the same has been duly authorized by a vote of a majority of the directors and also by vote of stockholders representing at least three-fifths of the capital stock, at a meeting of the stockholders called for the purpose in the manner provided in section sixty-three of this chapter, and a copy of the proceedings of such meeting, verified by the affidavit of one of the directors present thereat, shall be filed with such amended certificate. [Former section 32, added by L. 1892, Ch. 688, § 32, as amended by L. 1901, Ch. 354, § i; L. 190S, Ch. 751, § i.] STOCK CORPORATION LAW. 429 ARTICLE 3. DIRECTORS AND OFFICERS. Section 25. Directors. 26. Change of number of directors. 27. When acts of directors void. 28. Liability of directors for making unauthorized dividends. 29. Liability of directors for loans to stockholders. 30. Officers. 31. Inspectors and their oath. 32. Books to be kept. 33. Stock books of foreign corporations. ■ 34. Annual report to secretary of state. 35. Liability of officers for false certificates, reports or pub- lic notices. § 25. Directors. The directors of every stock corporation shall be chosen at the time and place fixed by the by-laws of the corpora- tion by a plurality of the votes at such election. Each director shall be a stockholder unless otherwise provided in the certificate, or in a by-law adopted by a stockholders' meeting. Vacancies in the board of directors shall be filled in the manner prescribed in the by-laws. Notice of the time and place of holding any election of directors shall be given by publication thereof, at least once in each week for two successive weeks immediately preceding such election, in a newspaper published in the county where such election is to be held, and in such other manner as may be prescribed in the by-laws. Policyholders of an insurance corporation shall be eligible to election as directors, whether or not they be stockholders. At least one-fourth in number of the directors of every stock corporation shall be elected annually. [Former L. 1890, Ch. 564, § 20, as amended by L. 1892, Ch. 688, § 20; L. 1901, Ch. 354, § 1; L. 1906, Ch. 238, § I.] § 26. Change of number of directors. The number of directors of any stock corporation may be increased or reduced, but not below the minimum number prescribed by law, when the stockholders own- ing a majority of the stock of the corporation shall so determine, at a meeting to be held on two weeks' notice in writing to each stockholder of record. Such notice shall be served personally or by mail, directed to each stockholder at his last known post-office address. Proof of the service of such notice shall be filed in the office of the corporation at or before the time of such meeting. The proceedings of such meeting shall be entered in the minutes of the corporation and a transcript thereof verified by the president and secretary of the m;eeting shall be filed in the offices where the original certificates of incorporation were filed. Such increase or reduction may also be effected by unanimous consent without a meeting, in which case there shall be filed in the offices herein specified the unanimous consent of the stockholders in writing, signed by them, or their duly authorized proxies, but no such consent shall be valid unless there is annexed thereto an affidavit of the cus- todian of the stock book of such corporation stating that the persons who have signed such consent, either in person or by proxy, are the holders of record of the entire capital stock of said corporation issued and outstanding. If a corporation formed under or subject to the banking law, the consent of the superintendent of banks, and if an in- 430 NEW YORK CORPORATIONS. surance corporation, the consent of the superintendent of insurance, shall be first obtained to such increase or reduction of the number of directors. This section shall apply to any stock corporation whether organized under a general or special law, and the number of directors may be increased as hereby provided notwithstanding the maximum number of directors now prescribed by law. If the number of direc- tors be increased, the additional directors authorized by such increase shall be elected by the votes of a majority of the directors in office at the time of the increase. If the original or an amended certificate of incorporation of the corporation shall provide that the directors shall be divided into two or more classes, whose terms of office shall respectively expire at different times, the additional directors shall be divided among such classes as nearly as practicable in proportion to the respective numbers of directors- constituting each class prior to such increase. [As amended by L. 1909, Ch. 421.] [Former L. 1890, Ch. 564, § 21, as amended by L. 1892, Ch. 688, § 21; L. 1903, Ch. 320, § i; L. 1904, Ch. 307, § i; L. 190S, Ch. 750, § i.] § 27. When acts of directors void. When the directors of any corporation for the first year of its corporate existence shall hold over and continue to be directors after the first year, because of their neg- lect or refusal to adopt the by-laws required to enable the stockholders to hold the annual election for directors, all their acts and proceedings while so holding over, done for and in the name of the corporation, designed to charge upon it any liability or obligation for the services of any such director, or any officer, or attorney or counsel appointed by them, and every such liability or obligation shall be held to be fraudulent and void. [Former L,. 1890, Ch. 564, § 22, re-enacted without change by 1,. 1892, Ch. 688, § 22.] § 28. Liability of directors for making unauthorized dividends. The directors of a stock corporation shall not make dividends, except from the surplus profits arising from the business of such corporation, nor divide, withdraw or in any way pay to the stockholders or any of them, any part of the capital of such corporation, or reduce its capital stock, except as authorized by law. In case of any violation of the provisions of this section, the directors under whose administration the same may have happened, except those who may have caused their dissent therefrom to be entered at large upon the minutes of such directors at the time, or were not present when the same happened, shall jointly and severally be liable to such corporation and to the creditors thereof to the full amount of any loss sustained by such cor- poration or its creditors respectively by reason of such withdrawal, di- vision or reduction. But this section shall not prevent a division and distribution of the assets of any such corporation remaining after the payment of all its debts and liabilities upon the dissolution of such corporation or the expiration of its charter; nor shall it prevent a cor- poration from accepting shares of its capital stock in complete or par- tial settlement of a debt owing to the corporation, which by the board of directors shall be deemed to be bad or doubtful. [Former L. 1890, Ch. 564, § 23, as amended by L. 1892, Ch. 688, § 23; L. 1901, Ch. 354. § i] § 29. Liability of directors for loans to stockholders. No loan of moneys shall be made by any stock corporation, except a moneyed STOCK CORPORATION LAW. 43 1 corporation, or by any officer thereof out of its funds to any stock- holder therein, nor shall any such corporation or officer discount any note or other evidence of debt, or receive the same in payment of any instalment or any part thereof due or to become due on any stock in such corporation, or receive or discount any note, or other evidence of debt, to enable any stockholder to withdraw any part of the money paid in by him on his stock. In case of the violation of any provision of this section, the officers or directors making such loan, or assent- ing thereto, or receiving or discounting such notes or other evidences of debt, shall, jointly and severally, be personally liable to the extent of such loan and interest, for all the debts of the corporation contract- ed before the repayment of the sum loaned, and to the full amount of the notes or other evidences of debt so received or discounted, with interest from the time such liability accrued. [Former L. 1890, Ch. 564, § 25, as amended by L. 1892, Ch. 688, § 25.] § 30. Officers. The directors of a stock corporation may ap- point from their number a president, and may appoint a secretary, treasurer, and other officers, agents and employees, who shall respect- ively have such powers and perform such duties in the management of the property and affairs of the corporation, subject to the control of the directors, as may be prescribed by them or in the by-laws. The directors may require any such officer, agent or employee to give se- curity for the faithful performance of his duties, and may remove him at pleasure. The policyholders of an insurance corporation shall be ehgible to election or appointment as its officers. [Former L,. 1890, Ch. 564, § 27, as amended by L. 1892, Ch. 688, § 27.] § 31. Inspectors and their oath. The inspectors of election of every stock corporation shall be appointed in the manner prescribed in the by-laws, but the inspectors of the first election of directors and of all previous meetings of the stockholders shall be appointed by the board of directors named in the certificate of incorporation. No direc- tor or officer of a moneyed corporation shall be eligible to election or appointment as inspector. Each inspector shall be entitled to a rea- sonable compensation for his services, to be paid by the corporation, and if any inspector shall refuse to serve, or neglect to attend at the election, or his office become vacant, the meeting may appoint an in- spector in his place unless the by-laws otherwise provide. The inspec- tors appointed to act at any meeting of the stockholders shall, before entering upon the discharge of their duties, be sworn to faithfully ex- ecute the duties of inspector at such meeting with strict impartiality, and according to the best of their ability, and the oath so taken shall be subscribed by them, and immediately filed in the office of the clerk of the county in which such election or meeting shall be held, with a certificate of the result of the vote taken thereat. [Former L. 1890, Ch. 564, § 28, as amended by h. 1892, Ch. 688, §28.] § 32. Books to be kept. Every stock corporation shall keep at its office correct books of account of all its business and transactions, and a book to be known as the stock book, containing the names, al- phabetically arranged, of all persons who are stockholders of the cor- poration, showing their places of residence, the number of shares of 432 NEW YORK CORPORATIONS. Stock held by them respectively, the time when they respectively be- came the owners thereof, and the amount paid thereon. The stock book of every such corporation shall be open daily, during at least three business hours, for the inspection of its stockholders and judg- ment creditors, who may make extracts therefrom. No transfer of stock shall be valid as against the corporation, its stockholders and creditors for any purpose except to render the transferee liable for the debts of the corporation to the extent provided for in this chapter, until it shall have been entered in such book as required by this sec- tion, by an entry showing from and to whom transferred. The stock book of every such corporation and the books of account of every bank shall be presumptive evidence of the facts therein so stated in favor of the plaintiff, in any action or proceeding against such cor- poration or any of its officers, directors or stockholders. Every cor- poration that shall neglect or refuse to keep or cause to be kept such books, or to keep any book open for inspection as herein required, shall forfeit to the people the sum of fifty dollars for every day it shall so neglect or refuse. If any officer or agent of any such cor- poration shall wilfully neglect or refuse to make any proper entry in such book or books, or shall neglect or refuse to exhibit the same, or to allow them to be inspected and extracts taken therefrom as pro- vided in this section, the corporation and such officer or agent shall each forfeit and pay to the party injured a penalty of fifty dollars for every such neglect or refusal, and all damages resulting to him there- from. [Former L. 1890, Ch. 564, § 29, as amended by L. 1892, Ch. 688, § 29; L. 1900, Ch. 128, § i; L. 1901, Ch. 3S4, § i-] § 33. Stock books o£ foreign corporations. Every foreign stock corporation having an office for the transaction of business in this state, except moneyed and railroad corporations, shall keep therein a book to be known as a stock book, containing the names, alphabetical- ly arranged, of all persons who are stockholders of the corporation, showing their places of residence, the number of shares of stock held by them respectively, the time when they respectively became the own- ers thereof, and the amount paid thereon. Such stock book shall be open daily, during business hours, for the inspection of its stockholders and judgment creditors, and any officer of the state authorized by law to investigate the affairs of any such corporation. If any such foreign stock corporation has in this state a transfer agent, whether such agent shall be a corporation or a natural person, such stock book may be deposited in the office of such agent and shall be open to inspection at all times during the usual hours of transacting business, to any stockholder, judgment creditor or officer of the state authorized by law to investigate the affairs of such corporation. For any refusal to allow such book to be inspected, such corporation and the officer or agent so refusing shall each forfeit the sum of two hundred and fifty dollars to be recovered by the person to whom such refusal was made. [Former L. 1890, Ch. 564, § 56, as amended by L. 1892, Ch. 688, § S3, and amended by L. 1897, Ch. 384, § 3.] § 34. Annual report to secretary of state. Every domestic stock corporation and every foreign stock corporation doing business with- in this state, except moneyed and railroad corporations, shall annually, during the month of January, or, if doing business without the United STOCK CORPORATION LAW. 433 States, before the first day of May, may make a report as of the first day of January, which will state: 1. The amount of its capital stock, and the proportion actually issued. 2. The amount of its debts or an amount which they do not ex- ceed. 3. The amount of its assets or an amount which its assets at least equal. 4. The names and addresses of all the directors and officers of the company, and in the case of a foreign corporation, the name also of the person designated in the manner prescribed by the code of civil procedure, as a person upon whom process against the corporation may be served within this state. Such report shall be made by the president or a vice-president or the treasurer or a secretary of the corporation and shall be filed in the office of the secretary of state. If such report be not so made and filed, any such officer who shall thereafter neglect or refuse to make and to file such report, within ten days after written request so to do shall have been made by a creditor or by a stockholder of the corpora- tion, shall forfeit to the people the sum of fifty dollars for every day he shall so neglect or refuse. [Former L. 1890, Ch. 564, § 30, as amended by L. 1892, Ch. 2, § I, and Ch. 688, § 30; L. 1897, Ch. 384, § 2; h. 1901, Ch. 354, § i; L. 190S, Ch. 41S, § I.] § 35. Liability of officers for false certificates, reports or public notices. If any certificate or report made or public notice given by the officers or directors of a stock corporation shall be false in any ma- terial representation, the officers and directors signing the same shall jointly and severally be personally liable to any person who has be- come a creditor or stockholder of the corporation upon the faith of any such certificate, report, notice or any material representation therein to the amount of the debt contracted upon the faith thereof if not paid when due, or the damage sustained by any purchaser of or subscriber to its stock upon the faith thereof. The liability imposed by this section shall exist in all cases where the contents of any such certificate, report or notice or of any material representation therein shall have been communicated either directly or indirectly to the per- son so becoming a creditor or stockholder and he became such creditor or stockholder upon the faith thereof. No action can be maintained for a cause of action created by this section unless brought within two years from the time the certificate, report or public notice shall have been made or given by the officers or directors of such corporation. [Former h- 1890, Ch. 564, § 31, as amended by L. 1892, Ch. 688, § 31.] 434 NEW YORK CORPORATIONS. ARTICLE 4. STOCK AND STOCKHOLDERS. Section 50. Issue and transfers of stock. 51. Transfers of stock by stockholder indebted to corpora- tion. 52. Purchase of stock of other corporations. 53. Subscriptions to stock. 54. Time of payment of subscriptions to stock. 55. Consideration for issue of stock and bonds. 56. Liabilities of stockholders. 57. Liabilities of stockholders to laborers, servants or em- ployees. 58. Non-liability in certain cases. 59. Limitation of stockholder's liability. 60. Partly paid stock. 61. Preferred and common stock. 62. Increase or reduction of capital stock. 63. Notice of meeting to increase or reduce capital stock. 64. Conduct of such meeting; certificate of increase or re- duction. 65. Change in par value of shares. 66. Prohibited transfers to officers or stockholders. 67. Application to court to order issue of new in place of lost certificate of stock. 68. Order of court upon such application. 69. Financial statement to stockholders. 70. Liabilities of oflficers, directors and stockholders of for- eign corporations. § 50. Issue and transfers of stock. The stock of every stock cor- poration shall be represented by certificates prepared by the directors and signed by the president or vice-president and secretary or treasurer and sealed with the seal of the corporation, and shall be transferable in the manner prescribed in this chapter and in the by-laws. No share shall be transferable until all previous calls thereon shall have been fully paid in. [Part of former L. 1890, Ch. 564, § 40, as amended by L. 1892, Ch. 688, § 40; L. 1902, Ch. 601, § i.] § SI- Transfers of stock by stockholder indebted to corporation. If a stockholder shall be indebted to the corporation, the directors may refuse to consent to a transfer of his stock until such indebtedness is paid, provided a copy of this section is written or printed upon the certificate of stock. [Former L. 1890, Ch. s64. § 26, as re-enacted by L. 1892, Ch. 688, § 26.] § S2. Purchase of stock of other corporations. Any stock cor- poration, domestic or foreign, now existing or hereafter organized, ex- cept moneyed corporations, may purchase, acquire, hold and dispose of the stocks, bonds and other evidences of indebtedness of any cor- poration, domestic or foreign, and issue in exchange therefor its stock, bonds or other obligations if authorized so to do by a provision in the certificate of incorporation of such stock corporation, or in any cer- STOCK CORPORATION LAW. 435 tificate amendatory thereof or supplementary thereto, filed in pur- suance of law, or if the corporation whose stock is so purchased, ac- quired, held or disposed of, is engaged in a business similar to that of such stock corporation, or engaged in the manufacture, use or sale of the property, or in the construction or operation of works neces- sary or useful in the business of such stock corporation, or in which or in connection with which the manufactured articles, product or property of such stock corporation are or may be used, or is a cor- poration with which such stock corporation is or may be authorized to consolidate. When any such corporation shall be a stockholder in any other corporation, as herein provided, its president or other officers shall be eligible to the office of director of such corporation, the same as if they were individually stockholders therein and the corporation holding such stock shall possess and exercise in respect thereof, all the rights, powers and privileges of individual owners or holders of such stock. [Part of former L,. 1890, Ch. 564, § 40, as amended by L. 1892, Ch. 688, § 40; L. 1902, Ch. 601, § i.] § 53. Subscriptions to stock. If the whole capital stock shall not have been subscribed at the time of filing the certificate of incorpora- tion, the directors named in the certificate may open books of sub- scription to fill up the capital stock in such places and after giving such notices as they may deem expedient, and may continue to receive subscriptions until the whole capital stock is subscribed. At the time of subscribing, every subscriber, whose subscription is payable in money, shall pay to the directors ten per centum upon the amount subscribed by him in cash, and no such subscription shall be received or taken without such payment. [Former L. 1890, Ch. 564, § 41, as re-enacted by L,. 1892, Ch. 688, § 41.] § 54. Time of pasrment of subscriptions to stock. Subscriptions to the capital stock of a corporation shall be paid at such times and in such instalments as the board of directors may by resolution re- quire. If default shall be made in the payment of any instalment as required by such resolution, the board may declare the stock and all previous payments thereon forfeited for the use of the corporation, after the expiration of sixty days from the service on the defaulting stockholder, personally, or by mail directed to him at his last-known post-office address, of a written notice requiring him to make payment within sixty days from the service of the notice at a place specified therein, and stating that, in case of failure to do so, his stock and all previous payments thereon will be forfeited for the use of the cor- poration. Such stock, if forfeited, may be reissued or subscriptions therefor may be received as in the case of stock not issued or subscribed for. If not sold for its par value or subscribed for within six months after such forfeiture, it shall be canceled and deducted from the amount of the capital stock. If by such cancellation, the amount of the capital stock is reduced below the minimum required by law, the capital stock shall be increased to the required amount within three months there- after or an action may be brought or proceedings instituted to close up the business of the corporation as in the case of an insolvent cor- poration. If a receiver of the assets of the corporation has been ap- pointed, all unpaid subscriptions to the stock shall be paid at such 436 NEW YORK CORPORATIONS. times and in such instalments as the receiver or the court may direct. [Former L,. 1890, Ch. 564, § 43, as amended by L,. 1892, Ch. 688, §43.] § 55. Consideration for issue of stock and bonds. No corpora- tion shall issue either stock or bonds except for money, labor done or property actually received for the use and lawful purposes of such corporation. Any corporation may purchase any property authorized by its certificate of incorporation, or necessary for the use and lawful purposes of such corporation, and may issue stock to the amount of the value thereof in payment therefor, and the stock so issued shall be full paid stock and not liable to any further call, neither shall the holder thereof be liable for any further payment under any of the provisions of this chapter; and in the absence of fraud in the transac- tion the judgment of the directors as to the value of the property purchased shall be conclusive; and in all statements and reports of the corporation, by law required to be published or filed, this stock shall not be stated or reported as being issued for cash paid to the cor- poration, but shall be reported as issued for property purchased. [Former L. 1890, Ch. 564, § 42, as amended by L. 1892, Ch. 688, § 42; L. 1901, Ch. 354, § I.] § 56. Liabilities of stockholders. Every holder of capital stock not fully paid, in any stock corporation, shall be personally liable to its creditors, to an amount equal to the amount unpaid on the stock held by him for debts of the corporation contracted while such stock was held by him. As to existing corporations the liability imposed by this section shall be in lieu of the liability imposed upon stock- holders of any existing corporation, under any general or special law, excepting laws relating to moneyed corporations, and corporations and associations for banking purposes, on account of any indebtedness hereafter contracted or any stock hereafter issued; but nothing in this section contained shall create or increase any liability of stockholders of any existing corporation under any general or special law. [Part of former L. 1890, Ch. 564, § 57, as amended by L. 1892, Ch. 688, § S4; L- 1901, Ch. 3S4, § l] § 57. Liabilities of stockholders to laborers, servants or em- ployees. The stockholders of every stock corporation shall jointly and severally be personally liable for all debts due and owing to any of its laborers, servants or employees other than contractors, for services performed by them for such corporation. Before such laborer, servant or employee shall charge such stockholder for such services, he shall give him notice in writing, within thirty days after the termination of such services, that he intends to hold him liable, and shall com- mence an action therefor within thirty days after the return of an execution unsatisfied against the corporation upon a judgment recov- ered against it for services. [Part of former L. 1890, Ch. 564, § 57, as amended by L. 1892, Ch. 688, § 54; L. 1901, Ch. 354, § I.] § 58. Non-liability in certain cases. No person holding stock in any corporation as collateral security, or as executor, administrator, guardian or trustee, unless he shall have voluntarily invested the trust funds in such stock, shall be personally subject to liability as a stock- holder; but the person pledging such stock shall be considered the STOCK CORPORATION LAW. 437 holder thereof and shall be liable as stockholder, and the estates and funds in the hands of such executor, administrator, guardian or trustee shall be liable in the like manner and to the same extent as the testator or intestate, or the ward or person interested in such trust fund would have been, if he had been living and competent to act and held the same stock in his own name, unless it appears that such executor, ad- ministrator, guardian or trustee voluntarily invested the trust funds in such stocks, in which case he shall be personally liable as a stock- holder. [Part of former L. i8go, Ch. 564, § 57, as amended by L. 1892, Ch. 688, § 54; L- 1901, Ch. 354, § i-] § 59. Limitation of stockholder's liability. No action shall be brought against a stockholder for any debt of the corporation until judgment therefor has been recovered against the corporation, and an execution thereon has been returned unsatisfied in whole or in part, and the amount due on such execution shall be the amount recover- able, with costs against the stockholder. No stockholder shall be per- sonally liable for any debt of the corporation not payable within two years from the time it is contracted, nor unless an action for its col- lection shall be brought against the corporation within two years after the debt becomes due; and no action shall be brought against a stock- holder after he shall have ceased to be a stockholder, for any debt of the corporation, unless brought within two years from the time he shall have ceased to be a stockholder. [Former L. 1890, Ch. 564, § 58, as re-enacted by L. 1892, Ch. 688, § 55-] § 60. Partly paid stock. The original or the amended certificate of incorporation of any stock corporation may contain a provision ex- pressly authorizing the issue of the whole or of any part of the capital stock as partly paid stock, subject to calls thereon until the whole thereof shall have been paid in. In such case, if in or upon the cer- tificate issued to represent such stock, the amount paid thereon shall be specified, the holder thereof shall not be subject to any liability except for the payment to the corporation of the amount remaining unpaid upon such stock, and for the payment of indebtedness to em- ployees pursuant to sections fifty-seven, fifty eight and fifty-nine of this chapter; and in any such case, the corporation may declare and may pay dividends upon the basis of the amount actually paid upon the respective shares of stock instead of upon the par value thereof. [Former § 62 added by L. 1901, Ch. 354, § 3.] § 61. Preferred and common stock. Every domestic stock cor- poration may issue preferred stock and common stock and different classes of preferred stock, if the certificate of incorporation so pro- vides, or by the consent of the holders of record of two-thirds of the capital stock, given at a meeting called for that purpose upon notice- such as is required for the annual meeting of the corporation. A certificate of the proceedings of such meeting, signed and sworn to by the president or a vice-president, and by the secretary or assistant secretary, of the corporation, shall be filed and recorded in the offices where the original certificate of incorporation of such corporation was. filed and recorded; and the corporation may, upon the written re- quest of the holders of any preferred stock, by a two-thirds vote of its directors, exchange the same for common stock, and issue cer- 438 NEW YORK CORPORATIONS. tificates for common stock therefor, upon such valuation as may have been agreed upon in the certificate of organization of such cor- poration, or the issue of such preferred stock, or share for share, but the total amount of such capital stock shall not be increased thereby. [Former L. 1890, Ch. 564, § 47, as amended by L. 1892, Ch. 688, § AT, L- 1901, Ch. 354, § i-] § 62. Increase or reduction of capital stock. Any domestic cor- poration may increase or reduce its capital stock in the manner herein provided, but not above the maximum or below the minimum, if any, prescribed by general law governing corporations formed for similar purposes. If increased, the holders of the additional stock issued shall be subject to the same liabilities with respect thereto as are provided by law in relation to the original capital; if reduced, the amount of its debts and liabilities shall not exceed the amount of its reduced capital, unless an insurance corporation, in which case the amount of its debts and liabilities shall not exceed the amount of its reduced capital and other assets. The owner of any stock shall not be relieved from any liability existing prior to the reduction of the capital stock of any stock corporation. If a banking corpora- tion, whether the capital be increased or reduced, its assets shall at least be equal to its debts and liabilities and the capital stock, as in- creased or reduced. A domestic railroad corporation may increase or reduce its capital stock in the manner herein provided, notwith- standing any provision contained herein, or in any general or special law fixing or limiting the amount of capital stock which may be issued by it. [Former L. 1890, Ch. 564, § 44, as amended by L,. 1892, Ch. 688, § 44; L. 1894, Ch. 346, § i; L. 1899, Ch. 696, § i; L. 1901, Ch. 354, § I.] § 63. Notice of meeting to increase or reduce capital stock. Every such increase or reduction must be authorized either by the unanimous consent of the stockholders, expressed in writing and filed in the office of the secretary of state and in the office of the clerk of the county in which the principal business office of the cor- poration is located, or by a vote of the stockholders owning at least a majority of the stock of the corporation, taken at a meeting of the stockholders specially called for that purpose in the manner provided by law or by the by-laws. Notice of the meeting, stating the time, place and object, and the amount of the increase or reduc- tion proposed, signed by the president or a vice-president and the secretary, shall be published once a week, for at least two successive weeks, in a newspaper in the county where its principal business office is located, if any is published therein, and a copy of such notice shall be duly mailed to each stockholder or member at his last-known post-office address at least two weeks before the meeting or shall be perspnally served on him at least five days before the meeting. [Former L. 1890, Ch. 564, § 45, as amended by L. 1892, Ch. 688, § 45; L. 1893, Ch. 700, § i; L. 1901, Ch. 354, § i.] § 64. Conduct of such meeting; certificate of increase or reduc- tion. If, at the time and place specified in the notice, the stockholders shall appear in person or by proxy in numbers representing at least a majority of all the shares of stock, they shall organize by choosing STOCK CORPORATION LAW. 439 from their number a chairman and secretary, and take a vote of those present in person or by proxy, and if a sufficient number of votes shall be given in favor of such increase or reduction, or if the same shall have been authorized by the unanimous consent of stock- holders expressed in writing signed by them or their duly authorized proxies, a certificate of the proceeding showing a compliance with the provisions of this chapter, the amount of capital theretofore author- ized, and the proportion thereof actually issued, and the amount of the increased or reduced capital stock, and in case of the reduction of capital stock the whole amount of the ascertained debts and liabili- ties of the corporation, shall be made, signed, verified and acknowl- edged by the chairman and secretary of the meeting, and filed in the office of the clerk of the county where its principal place of business shall be located, and a duplicate thereof in the office of the secretary of state. In case of a reduction of the capital stock, except of a railroad corporation or a moneyed corporation, such certificate or consent hereinafter provided for shall have indorsed thereon the approval of the comptroller, to the effect that the reduced capital is sufficient for the proper purposes of the corporation, and is in excess of its ascertained debts and liabilities; and in case of the in- crease or reduction of the capital stock of a railroad corporation or a moneyed corporation, the certificate or the unanimous consent of stockholders, as the case may be, shall have indorsed thereon the approval of the public service commission having jurisdiction thereof, if a railroad corporation; of the superintendent of banks, if a cor- poration formed under or subject to the banking law, and of the superintendent of insurance, if an insurance corporation. When the certificate herein provided for, or the unanimous consent of stock- holders in writing, signed by them or their duly authorized proxies, approved as aforesaid, has been filed, the capital stock of such cor- poration shall be increased or reduced, as the case may be, to the amount specified in such certificate or consent. The proceedings of the meeting at which such increase or reduction is voted, or, if such increase or reduction shall have been authorized by unanimous con- sent without a meeting, then a copy of such consent shall be entered upon the minutes of the corporation. If the capital stock is reduced, the amount of capital over and above the amount of the reduced capital shall, if the meeting or consents so determine or provide, be returned to the stockholders pro rata, at such times and in such man- ner as the directors shall determine, except in the case of the reduc- tion of the capital stock of an insurance corporation, as an alternative to make good an existing impairment. [Former h- 1890, Ch. 564, § 46, as amended by L. 1892, Ch. 688, § 46; L. 1893, Ch. 700, § 2; L. 1901, Ch. 354, § i; L. 1902, Ch. 286, § i; L. 1904, Ch. 123, § I.] § 65. Change in par value of shares. The number of shares into which the capital stock of any stock corporation is divided may be increased or reduced by a two-thirds vote of all stock duly repre- sented at a meeting held and conducted in like manner, and upon filing a like certificate, as required for the increase or reduction of its capital stock. If such increase or reduction of the number of shares be so authorized, the corporation shall issue to each stockholder certificates for as many shares of the new stock as equal in par value the shares of the old stock held by him, upon surrender and cancellation of such 440 NEW YORK CORPORATIONS. old stock. This section does not authorize the increase or reduction of the capital stock of such corporation. [Former § 56, as added by L,. 1893, Ch. 196, § i, and amended by L. 1901, Ch. 354, § i.] § 66. Prohibited transfers to officers or stockholders. No cor- poration which shall have refused to pay any of its notes or other obligations, when due, in lawful money of the United States, nor any of its officers or directors, shall transfer any of its property to any of its officers, directors or stockholders, directly or indirectly, for the payment of any debt, or upon any other consideration than the full value of the property paid in cash. No conveyance, assign- ment or transfer of any property of any such corporation by it or by any officer, director or stockholder thereof, nor any payment made, judgment suffered, lien created or security given by it or by any officer, director or stockholder when the corporation is insolvent or its insolvency is imminent, with the intent of giving a preference to any particular creditor over other creditors of the corporation, shall be valid, except that laborers' wages for services shall be pre- ferred claims and be entitled to payment before any other creditors out of the corporation assets in excess of valid prior liens or incum- brances. No corporation formed under or subject to the banking, insurance or railroad law shall make any assignment in contempla- tion of insolvency. Every person receiving by means of any such prohibited act or deed any property of the corporation shall be bound to account therefor to its creditors or stockholders or other trustees. No stockholders of any such corporation shall make any transfer or assignment of his stock therein to any person in contemplation of its insolvency. Every transfer or assignment or other act done in vio- lation of the foregoing provisions of this section shall be void. No conveyance, assignment or transfer of any property of a corporation formed under or subject to the banking law, exceeding in value one thousand dollars, shall be made by such corporation, or by any officer or director thereof, unless authorized by previous resolution of its board of directors, except promissory notes or other evidences of debt issued or received by the officers of the corporation in the transac- tion of its ordinary business, and except payments in specie or other current money or in bank bills made by such officers. No such con- veyance, assignment or transfer shall be void in the hands of a pur- chaser for a valuable consideration without notice. Every director or officer of a corporation who shall violate or be concerned in violating any provisions of this section, shall be personally liable to the creditors and stockholders of the corporation of which he shall be director or an officer to the full extent of any loss they may respectively sustain by such violation. [Former L. 1890, Ch. 564, § 48, as amended by L,. 1892, Ch. 688, § 48; L. 1901, Ch. 354, § I.] § 67. Application to court to order issue of new in place of lost certificate of stock. The owner of a lost or destroyed certificate of stock, if the corporation shall refuse to issue a new certificate in place thereof, may apply to the supreme court, at any special term held in the district where he resides, or in which the principal business office of the corporation is located, for an order requiring the corporation to show cause why it should not be required to issue a new certificate in place of the one lost or destroyed. The application shall be by STOCK CORPORATION LAW. 44I petition, duly verified by the owner, stating the name of the corpora- tion, the number and date of the certificate, if known, or if it can be ascertained by the petitioner; the number of shares named therein, to whom issued, and as particular a statement of the circumstances at- tending such loss or destruction as the petitioner can give. Upon the presentation of the petition the court shall make an order requiring the corporation to show cause, at a time and place therein mentioned, why it should not issue a new certificate of stock in place of the one described in the petition. A copy of the petition and order shall be served on the president or. other head of the corporation, or on the secretary or treasurer thereof, personally, at least ten days before the time for showing cause. [Former L. 1890, Ch. 564, § 50, as amended by L. 1892, Ch. 688, SO.] § 68. Order of court upon such application. Upon the return of the order, with proof of due service thereof, the court shall, in a sum- mary manner, and in such mode as it may deem advisable, inquire into the truth of the facts stated in the petition, and hear the proofs and allegations of the parties in regard thereto, and if satisfied that the petitioner is the lawful owner of the number of shares, or any part thereof, described in the petition, and that the certificate therefor has been lost or destroyed, and can not after due diligence be found, and that no sufficient cause has been shown why a new certificate should not be issued, it shall make an order requiring the corporation, within such time as shall be therein designated, to issue and deliver to the petitioner a new certificate for the number of shares specified in the order, upon depositing such security, or filing a bond in such form and with such sureties as to the court shall appear sufficient to indemnify any person other than the petitioner who shall thereafter be found to be the lawful owner of the certificate lost or destroyed; but such provision requiring security to be deposited or bond filed is to be construed as excluding an application made by a domestic municipal corporation or by a public officer in behalf of such corpora- tion; and the court may direct the publication of such notice, either before or after making such order as it shall deem proper. Any per- son claiming any rights tmder the certificates alleged to have been lost or destroyed shall have recourse to such indemnity, but in any application under the provisions of this chapter, in which a domestic municipal corporation or a public officer in behalf of such corporation, shall be by the foregoing provisions of this section excused from de- positing security or filing a bond, such municipal corporation shall be liable for all damages that may be sustained by any person, in the same case and to the same extent as sureties to a bond or undertaking would have been, if such a bond or undertaking had been filed; and the corporation issuing such certificate shall be discharged from all liability to such person upon compliance with such order; and obe- dience to the order m.ay be enforced by attachment against the officer or officers of the corporation on proof of his or their refusal to com- ply with it. [Former L. 1890, Ch. 564, § 51, as re-enacted by L. 1892, Ch. 688, § SI, as amended by L. 190S. Ch. 35, § i.] § 69. Financial statement to stockholders. Stockholders owning five per centum of the capital stock of any corporation other than a moneyed corporation, not exceeding one hundred thousand dollars, or 442 NEW YORK CORPORATIONS. three per centum where it exceeds one hundred thousand dollars, may make a written request to the treasurer or chief fiscal officer thereof, for a statement of its aflfairs, under oath, embracing a particular ac- count of all its assets and liabilities, and the treasurer shall make such statement and deliver it to the person presenting the request within thirty days thereafter, and keep on file for twelve months thereafter a copy of such statment, which shall at all times during business hours be exhibited to any stockholder demanding an examination thereof; but the treasurer or such chref fiscal officer shall not be required to deliver more than one such statement in any one year. The supreme court, or any justice thereof, may upon application, for good cause shown, extend the time for making and delivering such certificate. For every neglect or refusal of the treasurer or other chief fiscal of- ficer thereof to comply with the provisions of this section he shall forfeit and pay to the person making such request the sum of fifty dollars, and the further sum of ten dollars for every twenty-four hours thereafter until such statement shall be furnished. [Former L. 1890, Ch. 564, § 52, as amended by L. 1892, Ch. 688, § 52.] § 70. Liabilities of ofEcers, directors and stockholders of foreign corporations. Except as otherwise provided in this chapter the of- ficers, directors and stockholders of a foreign stock corporation trans- acting business in this state, except moneyed and railroad corporations, shall be liable under the provisions of this chapter, in the same man- ner and to the same extent as the officers, directors and stockholders of a domestic corporation, for: 1. The making of unauthorized dividends; 2. Unlawful loans to stockholders; 3. Making false certificates, reports or public notices; 4. An illegal transfer of the stock and property of such corpora- tion, when it is insolvent or its insolvency is threatened; 5. The failure to file an annual report. Such liabilities may be enforced in the courts of this state, in the same manner as similar liabilities imposed by law upon the officers, directors and stockholders of domestic corporations. [Former § 60, as added by L- 1897, Ch. 384, § 4.] ARTICLE 5. LAWS REPEALED; WHEN TO TAKE EFFECT. Section 80. Laws repealed. 81. When to take effect. § 80. Laws repealed. Of the laws enumerated in the schedule hereto annexed, that portion specified in the last column is hereby repealed. [New.] § 81. When to take effect. This chapter shall take effect im- mediately. STOCK CORPORATION LAW. 443 Schedule op Laws Repealed. Laws of Chapter Section Laws of Chapter Section 1814 12 All (38th Sess.) 1894 346 All 1825 325 1-3, 12 1896 929 All 1828 20 .... 15, ff 17, 18 1896 932 .... I, pt. adding (2d Meet.) § 58 to L. 1892 1828 21 1, Tf 180 Ch. 688. (2d Meet.) 1897 384 All 1830 71 All 1899 354, 696 All 1848 145 All 1900 .... 128, 164, 476 All 1853 176, 42s, 460 All 1901 130, 3S4 All 1869 742 7 1902 ... 80, 98, 286, 601 All 187s 392 8 1903 320 All 1884 434 All 1904 123, 307, 706 All 1889 57 AU 1905.... 35,415.489, 1890 564 All 745, 750, 751 All 1892 337, 688 All 1906 238 All 1893 196, 638, 700 All TAX LAW. Laws of igog, Chapter 62, constituting Chapter 60 of the Consolidated Laws. (Provisions relating specially to corporations.) PROPERTY TAX. ARTICLE I. TAXABLE PROPERTY AND PLACE OF TAXATION. Section 2. Definitions. 3. Property liable to taxation. 4. Exemption from taxation. 7. When property of non-residents is taxable. 11. Place of taxation of property of corporations. 12. Taxation of corporate stock. § 2. Definitions, i. "Tax district" as used in this chapter, means a political subdivision of the state having a board of assessors author- ized to assess property therein for state and county taxes. 3. The terms "land," "real estate," and "real property," as used in this chapter, include the land itself above and under water, all build- ings and other articles and structures, substructures and superstruc- tures, erected upon, under or above, or affixed to the same; all wharves and piers, including the value of the right to collect wharfage, cranage or dockage thereon; all bridges, all telegraph lines, wires, poles and appurtenances; all supports and inclosures for electrical conductors and other appurtenances upon, above and under ground; all surface, under- ground or elevated railroads, including the value of all franchises, rights or permission to construct, maintain or operate the same in, under, above, on or through, streets, highways or public places; all railroad structures, substructures and superstructures, tracks and the iron thereon; branches, switches and other fixtures permitted or auth- orized to be made, laid or placed in, upon, above or under any public or private road, street or ground; all mains, pipes and tanks laid or placed in, upon, above or under any public or private street or place for conducting steam, heat, water, oil, electricity or any property, sub- stance or product capable of transportation or conveyance therein or that is protected thereby, including the value of all franchises, rights, authority or permission to construct, maintain or operate, in, under, above, upon, or through, any streets, highways or public places, any 444 TAX LAW. 445 mains, pipes, tanks, conduits or wires, with their appurtenances, for conducting water, steam, heat, light, power, gas, oil or other substance, or electricity for telegraphic, telephonic or other purposes; all trees and underwood growing upon land, and all mines, minerals, quarries and fossils in and under the same, except mines belonging to the state. A franchise, right, authority or permission specified in this subdivision shall for the purpose of taxation be known as a "special franchise." A special franchise shall be deemed to include the value of the tangible property of a person, copartnership, association or corporation situated in, upon, under or above any street, highway, public place or public waters in connection with the special franchise. The tangible property so included shall be taxed as a part of the special franchise. No prop- erty of a municipal corporation shall be subject to a special franchise tax. 5. The terms "personal estate," and "personal property," as used in this chapter, include chattels, money, things in action, debts due from solvent debtors, whether on account, contract, note, bond or mortgage; debts and obligations for the payment of money due or owing to persons residing within this state, however secured or wher- ever such securities shall be held; debts due by inhabitants of this state to persons not residing within the United States for the pur- chase of any real estate; public stocks, stocks in moneyed corporations, and such portion of the capital of incorporated companies, liable to taxation on their capital, as shall not be invested in real estate. § 3. Property liable to taxation. All real property within this state, and all personal property situated or owned within this state, is taxable unless exempt from taxation by law. § 4. Exemption from taxation. The following property shall be exempt from taxation: * * * 16. The owner or holder of stock in an incorporated company liable to taxation on its capital, shall not be taxed as an individual for such stock. § 7. When property of non-residents is taxable, i. Non-residents of the state doing business in the state, either as principals or partners, shall be taxed on the capital invested in such business, as personal property, at the place where such business is carried on, to the same extent as if they were residents of the state. § II. Place of taxation of property of corporations. The real estate of all incorporated companies liable to taxation shall be assessed in the tax district in which the same shall lie, in the same manner as the real estate of individuals. All the personal estate of every incor- porated company liable to taxation on its capital shall be assessed in the tax district where the principal office or place for transacting the financial concerns of the company shall be, or if such company have no principal office, or place for transacting its financial concerns, then in the tax district where the operations of such company shall be carried on. In the case of a toll bridge, the company owning such bridge shall be assessed in the tax district in which the tolls are collected; and where the tolls of any bridge, turnpike, or canal company are collected in several tax districts, the company shall be assessed in the tax district in which the treasurer or other officer authorized to pay the last preceding dividend resides. 446 NEW YORK CORPORATIONS. § 12. Taxation of corporate stock. The capital stock of every company liable to taxation, except such part of it as shall have been excepted in the assessment-roll or shall be exempt by law, together with its surplus profits or reserve funds exceeding ten per centum of its capital, after deducting the assessed value of its real estate, and all shares of stock in other corporations actually owned by such company which are taxable upon their capital stock under the laws of this state, shall be assessed at its actual value. ARTICLE 2. MODE OF ASSESSMENT. SECTION 27. Reports of corporations. 28. Penalty for omission to make statement. 32. Corporations, how assessed. § 27. Reports of corporations. The president or other proper officer of every moneyed or stock corporation deriving an income or profit from its capital or otherwise shall, on or before June fifteenth, deliver to one of the assessors of the tax district in which the com- pany is liable to be taxed and, if such tax district is in a county embracing a portion of the forest preserve, to the comptroller of the state, a written statement specifying: 1. The real property, if any, owned by such company, the tax district in which the same is situated and, unless a railroad corporation, the sums actually paid therefor. 2. The capital stock actually paid in and secured to be paid in, excepting therefrom the sums paid for real property and the amount of such capital stock held by the state and by any incorporated literary or charitable institution, and 3. The tax district in which the principal office of the company is situated or in case it has no principal office, the tax district in which its operations are carried on. Such statement shall be verified by the officer making the same to the effect that it is in all respects just and true. If such statement is not made within twenty days after the fifteenth day of June, or is insufficient, evasive or defective, the assessors may compel the cor- poration to make a proper statement by mandamus. § 28. Penalty for omission to make statement. In case of neglect to furnish such statements within thirty days after the time above provided, the company so neglecting shall forfeit to the people of this state for each statement so omitted to be furnished, the sum of two hundred and fifty dollars, and it shall be the duty of the attorney- general to prosecute for such penalty upon information which shall be furnished him by the comptroller. Upon such statement being fur- nished and the costs of the suit being paid, the comptroller, if he shall be satisfied that such omission was not wilful, may, in his dis- cretion, discontinue such suit. § 32. Corporations, how assessed. The assessors shall assess cor- porations liable to taxation in their respective tax districts upon their assessment-rolls in the following manner: TAX LAW. 447 1. In the first column the name of each corporation, and under its name the amount of its capital stock paid in and secured to be paid in; the amount paid by it for real property then owned by it wherever situated; the amount of all surplus profits or reserve funds exceeding ten per centum of its capital, after deducting therefrom the amount of said real property and the amount of its stock, if any, belonging to the state and to incorporated literary and charitable institutions. 2. In the second column the quantity of real property except special franchises owned by such corporation and situated within their tax district. 3. In the third column the actual value of such real property, ex- cept special franchises. 4. In the fourth column the amount of the capital stock paid in and secured to be paid in, and of all of such surplus profits or reserve funds as aforesaid, after deducting the sums paid out for all the real estate of the company, wherever the same may be situated, and then belonging to it, and the amount of stock, if any, belonging to the people of the state and to incorporated literary and charitable institu- tions. 5. In the fifth column the value of any special franchise owned by it as fixed by the state board of tax commissioners. (STATE TAX.) ARTICLE 9- CORPORATION TAX. Section 180. Organization tax. 181. License tax on foreign corporations. 182. Franchise tax on corporations. 183. Certain corporations exempt from tax on capital stock. 184. Additional franchise tax on transportation and transmis- sion corporations and associations. 186. Franchise tax on water-works companies, gas com- panies, electric or steam heating, lighting and power companies. 192. Reports of corporations. 193. Value of stock to be appraised. 194. Further requirements as to reports of corporations. 19s. Powers of comptroller to examine into affairs of cor- porations. 196. Notice of statement of tax; interest. 197. Payment of tax and penalty for failure. 198. Revision and readjustment of accounts by comptroller. 199. Review of determination of comptroller by certiorari. 200. Regulations as to such writ of certiorari. 201. Warrant for the collection of taxes. 202. Information of delinquents. 448 NEW YORK CORPORATIONS. 203. Action for recovery of taxes; forfeiture of charter of delinquent corporation. 205. Exemptions from other state taxation. 207. Limitation of time. § 180. Organization tax. Every stock corporation incorporated under any law of this state shall pay to the state treasurer a tax of one-twentieth of one per centum upon the amount of capital stock vyhich the corporation is authorized to have, and a like tax upon any subsequent increase. Provided, that in no case shall such tax be less than one dollar. Such tax shall be due and payable upon the incor- poration of such corporation or upon the increase of its capital stock. Except in the case of a railroad corporation neither the secretary of state nor county clerk shall file any certificate of incorporation or article of association, or give any certificate to any such corporation or association until he is furnished a receipt for such tax from the state treasurer, and no stock corporation shall have or exercise any corporate franchise or powers, or carry on business in this state until such tax shall have been paid. And in case of a decrease of capital stock, upon which the tax required by law has been paid, and a sub- sequent increase thereof, a tax shall be paid only upon so much of such increase as exceeds the amount of capital stock upon which a tax has been before paid. In case of the consolidation of existing corporations into a corporation, such new corporation shall be required to pay the tax hereinbefore provided for only upon the amount of its capital stock in excess of the aggregate amount of capital stock of said corporations. This section shall not apply to state and national banks or to building, mutual loan, accumulating fund and co-operative associations. A railroad corporation need not pay such tax at the time of filing its certificate of incorporation, but shall pay the same before the public service commission shall grant a certificate, as required by the railroad law, authorizing the construction of the road as proposed in its articles of association, and such certificate shall not be granted by the public service commission until it is furnished with a receipt for such tax from the state treasurer. § 181. License tax on foreign corporations. Every foreign cor- poration, except banking corporations, fire, marine, casualty and life insurance companies, co-operative fraternal insurance companies, and building and loan associations, authorized to do business under the general corporation law, shall pay to the state treasurer, for the use of the state, a license fee of one-eighth of one per centum for the privilege of exercising its corporate franchises or carrying on its busi- ness in such corporate or organized capacity in this state, to be com- puted upon the basis of the capital stock employed by it within this state, during the first year of carrying on its business in this state; and if any year thereafter any such corporation shall employ an increased amount of its capital stock within this state, the same license fee shall be due and payable upon any such increase. The measure of the amount of capital stock employed in this state shall be such a portion of the issued capital stock as the gross assets employed in any business within this state bear to the gross assets wherever employed in business. For purposes of taxation, the capital of a corporation invested in the stock of another corporation shall be deemed to be assets located where the physical property represented by such stock is located. The amount of capital upon which such taxes shall be paid shall be fixed TAX LAW. 449 by the comptroller, who shall have the same authority to examine the books and records in this state of such foreign corporations, and the employees thereof, and the same power to issue his warrant for the collection of such taxes, as he now has with regard to domestic corporations. No action shall be maintained or recovery had in any of the courts in this state by such foreign corporation without obtaining a receipt for the license fee hereby imposed within thirteen months after beginning such business within the state, or if such a cor- poration had, on October thirty-first, nineteen hundred and six, been engaged in business within this state for more than twelve months, without obtaining such receipt within thirty days after such tax is due. § 182. Franchise tax on corporations. For the privilege of doing business or exercising its corporate franchises in this state every cor- poration, joint-stock company or association, doing business in this state, shall pay to the state treasurer annually, in advance, an annual tax to be computed upon the basis of the amount of its capital stock, employed during the preceding year within this state, and upon each dollar of such amount. The measure of the amount of capital stock employed in this state shall be such a portion of the issued capital stock as the gross assets employed in any business within this state bear to the gross assets wherever employed in business. For purposes of taxation, the capital of a corporation invested in the stock of another corporation shall be deemed to be assets located where the physical property represented by such stock is located. If the dividends upon the capital stock amount to six, or more than six per centum upon the par value of the capital stock, during any year ending with the thirty-first day of October, the tax shall be at the rate of one-quarter of a mill for each one per centum of dividends made or declared upon the par value of the capital stock during said year. If such dividend or dividends amount to less than six per centum on the par value of the capital stock, and (i) The assets do not exceed the liabilities, exclusive of capital stock, or (2) The average price at which such stock sold during said year did not equal or exceed its par value, or (3) If no dividend was declared, Then each dollar of the amount of capital stock employed in this state, determined as hereinbefore provided, shall be taxed at the rate of three-fourths of one mill. If such dividend or dividends amount to less than six per centum on the par value of the capital stock, and (i) The assets exceed the liabilities, exclusive of capital stock, by an amount equal to or greater than the par value of the capital stock, or (2) The average price at which such stock sold during' said year is equal to or greater than the par value, Then the amount of capital stock, determined as hereinbefore pro- vided to be employed in this state, shall be taxed at the rate of one and one-half mills on each dollar of the valuation of the capital stock employed in this state, but such valuation shall not be less than (i) The par value of such stock, (2) The difference between the assets and liabilities, exclusive of capital stock, (3) The average price at which such stock sold during said year. If such corporation, joint-stock company or association shall have more than one kind of capital stock, and upon one of such kinds of 450 NEW YORK CORPORATIONS. stock a dividend or dividends amounting to six or more than six per centum upon the par value thereof, has been made or declared, and upon the other no dividend has been made or declared, or the dividend or dividends made or declared thereon amount to less than six per centum upon the par value thereof, then the tax shall be at the rate of one-quarter of a mill for each one per centum of dividends made or declared upon the capital stock upon the par value of which the dividend or dividends made or declared amount to six or more than six per centum, and in addition thereto a tax shall be charged upon the capital stock (i) Upon which no dividend was made or declared, or (2) Upon which the dividend or dividends made or declared did not amount to six per centum upon the par value. At the rate as hereinbefore provided for the taxation of capital stock upon which no dividend was made or declared, or upon which the dividend or dividends made or declared did not amount to six per centum on the par value. All corporations not taxable under the preceding paragraphs of this section shall be taxed in an amount not less than would be pro- duced by an assessment of one and one-half mills on each one dollar of the actual value of its capital stock, determined to be employed in this state as hereinbefore provided, or one and one-half mills upon each dollar of such capital stock at the average price at which said stock sold during the said year. § 183. Certain corporations exempt from tax on capital stock. Banks, savings banks, institutions for savings, title guaranty, insur- ance or surety corporations, every trust company incorporated, organized or formed, under, by or pursuant to a law of this state, and any company authorized to do a trust company business, solely or in connection with any other business, under a general or special law of this state, laundering corporations, manufacturing corporations to the extent only of the capital actually employed in this state in manufac- turing, and in the sale of the product of such manufacturing, mining corporations wholly engaged in mining ores within this state, agricul- tural and horticultural societies or associations, and corporations, joint- stock companies or associations owning or operating elevated railroads or surface railroads not operated by steam, or formed for supplying water or gas for electric or steam heating, lighting or power purposes, and liable to a tax under sections one hundred and eighty-five and one hundred and eighty-six of this chapter, shall be exempt from the payment of the taxes prescribed by section one hundred and eighty-two of this chapter. But such a laundering, manufacturing or mining corporation shall not be exempted from the payment of such tax, unless at least forty per centum of the capital stock of such corporation is invested in property in this state and used by it in its laundering, manufacturing or mining business in this state. § 184. Additional franchise tax on transportation and transmis- sion corporations and associations. Every corporation and joint-stock association formed for steam surface railroad, canal, steamboat, ferry, express, navigation, pipe-line, transfer, baggage express, telegraph, telephone, palace car or sleeping car purposes, and every other trans- portation corporation not liable to taxation under sections one hun- dred and eighty-five or one hundred and eighty-six of this chapter, shall pay for the privilege of exercising its corporate franchises or TAX LAW. 451 carrying on its business in such corporate or organized capacity in this state, an annual excise tax or license fee which shall be equal to five-tenths of one per centum upon its gross earnings within this state, which shall include its gross earnings from its transportation or trans- mission business originating and terminating within this state, but shall not include earnings derived from business of an interstate character. § 186. Franchise tax on water-works companies, gas companies, electric or steam heating, lighting and power companies. Every cor- poration, joint-stock company or association formed for supplying water or gas, or for electric or steam heating, lighting or power pur- poses, shall pay to the state for the privilege of exercising its corpor- ate franchises or carrying on its business in such corporate or organized capacity in this state, an annual tax which shall be five-tenths of one per centum upon its gross earnings from all sources within this state, and three per centum upon the amount of dividends de- clared or paid in excess of four per centum upon the actual amount of paid-up capital employed by such corporation, joint-stock company or association. The term "gross earnings" as used in this section means all receipts from the employment of capital without any deduc- tion. § 192. Reports of corporations. Corporations liable to pay a tax under this article shall report as follows: I. Corporations paying franchise tax. Every corporation, associa- tion or joint-stock company liable to pay a tax under section one hundred and eighty-two of this chapter shall, on or before November fifteenth in each year, make a written report to the "comptroller of its condition at the close of its business on October thirty-first preceding, stating the amount of its authorized capital stock, the amount of stock paid in, the date and rate per centum of each dividend declared by it during the year ending with such day, the entire amount of the capital of such corporation, and the capital employed by it in this state during such year. 4. Water-works, gas, electric, steam-heating, lighting and power corporations. Every corporation, joint-stock company or association liable to pay a tax under section one hundred and eighty-six of this chapter, shall, on or before December first of each year, make a writ- ten report to the comptroller of its condition at the close of its business on October thirty-first preceding, stating the amount of its gross earn- ings from business done in this state, the amount of dividends of every nature declared or paid during the year ending with October thirty-first, the authorized capital of the company and the amount of capital stock actually issued and outstanding. § 193. Value of stock to be appraised. If the dividend or divi- dends amount to less than six per centum on the par value of the capital stock, or no dividend is declared, the president, treasurer or secretary of the company liable to pay a tax under the provisions of section one hundred and eighty-two of this chapter, shall, under oath, between the first and fifteenth days of November in each year, estimate and appraise the capital stock of such company at its actual value. And shall forward the same to the comptroller with the report provided for in the last section. If the comptroller is not satisfied with the valuation so made and returned he is authorized and empow- ered to make a valuation thereof, and settle an account upon the valua- 452 NEW YORK CORPORATIONS. tion so made by him, and the taxes, penalties and interest to be paid the state. § 194. Further requirements as to reports of corporations. Every report required by this article shall have annexed thereto the affidavit of the president, vice-president, secretary or treasurer of the corpora- tion, association or joint-stock company or of the person or one of the persons, or the members of the partnership making the same, to the effect that the statements contained therein are true. Such reports shall contain any other data, information or matter which the comptroller may require to be included therein, and he may prescribe the form in which such reports shall be made and the form of oath thereto. When so prescribed such forms shall be used in making the report. The comptroller may require at any time a further or supplemental report under this article, which shall con- tain information and data upon such matters as the comptroller may specify. § 195. Powers of comptroller to examine into affairs of cor- porations. In case any report required by any of the preceding sections of this article shall be unsatisfactory to the comptroller, or if any such report is not made as herein required, the comptroller is authorized to make an estimate of the dividends paid by such corporation and the value of the capital stock employed by it, from any such report or from any other data, and to order and state an account according to the estimate and value so made by him for the taxes, percentage and interest due the state from such corpora- tion, association, joint-stock company, person or partnership. The comptroller shall also have power to examine or cause to be exam- ined, in case of a failure to report or in case the report is unsatis- factory to him, the books and records of any such corporation, joint- stock association, company, foreign banker, person or partnership, and may hear testimony and take proofs material for his information, either personally or he may appoint a commissioner by a written ap- pointment under his hand and official seal for that purpose. Every commissioner so appointed shall be authorized to make such examina- tion and take such testimony and hear such proofs and report the proofs and testimony so taken and the result of his examination so made and the facts found by him to the comptroller. The comptroller shall, therefrom, or from any other data which shall be satisfactory to him, order and state an account for the tax due the state, together with the expenses of such examination and the taking of such testi- mony and proofs. Such expenses shall be fixed and adjusted by the comptroller. § 196. Notice of statement of tax; interest. Upon auditing and stating every account for taxes or other charges under this article, the comptroller shall forthwith send notice thereof in writing to the person, partnership, company, association or corporation against whom the same is made, which notice may be mailed to the post-office address of such person, partnership, association, company or corporation. All accounts so audited and stated shall bear interest upon the total amount found due thereon to the state, for taxes, percentage, interest and other charges, from the expiration of thirty days after sending such notice until payment thereof shall be made. TAX LAW. 453 § 197. Pajrment of tax and penalty for failure. A tax imposed by section one hundred and eighty-two or one hundred and eighty-six of this chapter shall be due and payable into the state treasury on or before the fifteenth day of January in each year. A tax imposed by section one hundred and eighty-four of this chapter on a transporta- tion or transmission corporation, or by section one hundred and eighty- five, on elevated railroads or surface railroads not operated by steam, shall be due and payable into the state treasury on or before the first day of August in each year. A tax imposed by section one hundred and eighty-seven of this chapter on an insurance corporation shall be due and payable into the state treasury on or before the first day of June in each year. A tax imposed by section one hundred and eighty- eight or one hundred and eighty-nine shall be due and payable into the state treasury on or before the first day of September in each year. A tax imposed by section one hundred and ninety-one of this chapter on a foreign banker shall be due and payable into the state treasury on or before February first in each year. If such tax in any case is not paid within thirty days after the same becomes due, or if the report of any such corporation is not made within the time re- quired by this article, the corporation, association, joint-stock company, person or partnership, liable to pay the tax, shall pay into the state treasury, in addition to the amount of such tax, a sum equal to five per centum thereof, and one per centum additional for each month the tax remains unpaid, which sum shall be added to the tax and paid or collected therewith. Every corporation, association, joint-stock company, person or partnership failing to make the annual report required by this article, or failing to make any special report required by the comptroller, within any reasonable time to be specified by him, shall forfeit to the people of the state the sum of one hundred dollars for every such failure, and the additional sum of ten dollars for each day that such failure continues. Such tax shall be a lien upon and bind all the real and personal property of the corporation, joint- stock company or association liable to pay the same from the time when it is payable until the same is paid in full. § 198. Revision and readjustment of accounts by comptroller. If an application be filed with the comptroller by the party against whom the account is stated or by the attorney-general within one year from the time any such account shall have been audited and stated, the comptroller may, at any time, upon notice thereof sent to the person, partnership, com.pany, association or corporation against whom it is stated, revise and readjust such account and if it shall be made to appear upon any such application, by evidence submitted to him or otherwise, that any such account included taxes or other charges which could not have been lawfully demanded, or that payment has been legally made or exacted of any such account, he shall resettle the same according to law and the facts, and charge or credit, as the case may require, the difference, if any, resulting from such revision or resettlement upon the accounts for taxes of or against any such person, partnership, company, association or corporation. Such credit, whether allowed before or after the passage _of_ this chapter may be, by the person, partnership, company, association or corporation in whose favor it is allowed^ assigned to a person, partnership, company, asso- ciation or corporation liable to pay taxes under article nine of this chapter, and the assignee of the whole or any part of such credit on filing with the comptroller such assignment shall thereupon be entitled 454 NEW YORK CORPORATIONS. to credit on the books of the comptroller for the amount thereof on the current account for taxes of such assignee in the same way and with the same effect as though the credit had originally been allowed in favor of such assignee. The comptroller shall forthwith send writ- ten notice of his determination upon such application to the applicant, and to the attorney-general, which notice may be sent by mail to his post-office address. § 199. Review of determination of comptroller by certiorari. The determination of the comptroller upon any application made to him by any person, partnership, company, association or corporation for a revision and resettlement of any account, as prescribed in this article, may be reviewed both upon the law and the facts upon certiorari by the supreme court at the instance of any person, partnership, company, association or corporation affected thereby, and in the name and on behalf of the people of the state. For the purpose of such review the comptroller shall return, on such certiorari, the accounts and all the evidence before him on such application, and all the papers and proofs upon the original statement of such account and all proceed- ings thereon. If the original or resettled accounts shall be found erroneous or illegal, either in point of law or of fact, by the supreme court, upon any such review, the accounts reviewed shall then be cor- rected and restated, and from any determination of the supreme court upon any such review an appeal to the court of appeals may be taken by either party. § 200. Regulations as to such writ of certiorari. No certiorari to review any audit and statement of an account or any determination by the comptroller under this article shall be granted unless notice of application therefor is made within thirty days after the service of the notice of such determination. Eight days' notice shall be given to the comptroller of the application for such writ. The full amount of the taxes, percentage, interest and other charges audited and stated in such account must be deposited with the state treasurer before making the application and an undertaking filed with the comptroller, in such amount and with such sureties as a justice of the supreme court shall approve, to the effect that if such writ is dismissed or the determination of the comptroller affirmed, the applicant for the writ will pay all costs and charges which may accrue against him or it in the prosecution of the writ, including costs of all appeals. § 201. Warrant for the collection of taxes. After the expiration of thirty days from the sending by the comptroller of a notice of a statement of an account as provided in this article, unless the amount of such account shall have been paid or deposited with the state treasurer, if an appeal or other proceedings have been taken to review the same, and the undertaking given as provided in this article, the comptroller may issue a warrant under his hand and official seal, directed to the sheriff of any county of the state, commanding him to levy upon and sell the real and personal property of the person, part- nership, company, association or corporation against which such ac- count is stated, found within his county for the payment of the amount thereof with interest thereon and costs of executing the warrant, and to return such warrant to the comptroller and pay to the state treas- urer the money collected by virtue thereof, by a time to be therein specified, not less than sixty days from the date of the warrant. Such TAX LAW. 455 warrant shall be a lien upon and shall bind the real and personal prop- erty of the person, partnership, company, association or corporation against which it is issued, from the time an actual levy shall be made by virtue thereof. The sheriff to whom any such warrant shall be directed shall proceed upon the same in all respects, with like effect, and in the same manner as prescribed by law in respect to executions issued against property upon judgments of a court of record, and shall be entitled to the same fees for his services in executing the warrant, to be collected in the same manner. § 202. Information of delinquents. It shall be the duty of any person having knowledge of the evasion of taxation under this article by any corporation, association, joint-stock company, partnership or person liable to taxation thereunder, or any omission on their part to make the reports required by this article, to make a written report thereof to the comptroller of the state, with such information as may be in his possession as may lead to the recovery of any taxes due the state therefrom. If, in his opinion, the interests of the state require it, the comptroller may employ such person to assist in the collection and preparation of evidence and in the prosecution and trial of actions for such taxes, and so much of the same, not exceeding ten per centum thereof, as may be collected from any such delinquent corporation, association, company, partnership or person, by reason of such report and such services, as shall have been agreed upon between such person and the comptroller or attorney-general as a compensation therefor, shall be paid to such person, and nothing shall be paid to such person for such report or services unless there shall be a recovery of taxes by reason thereof. § 203. Action for recovery of taxes; forfeiture of charter of de- linquent corporation. An action may be brought by the attorney- general, at the instance of the comptroller, in the name of the state, to recover the amount of any account audited and stated by the comp- troller under the provisions of this article. If any such account shall remain unpaid at the expiration of one year after notice of the state- ment thereof has been sent as required by this article, and the comp- troller is satisfied that the failure to pay the same is intentional, he shall so report to the attorney-general, who shall immediately bring an action, in the name of the people of the state, for the forfeiture of the franchise of any corporation, joint-stock company or association failing to make such payment, and if it is found that such failure was intentional, judgment shall be rendered in such action for the forfeiture of its franchise and for its dissolution, and thereafter such franchise shall be annulled. § 205. Exemptions from other state taxation. The personal prop- erty of every corporation, company, association or partnership, taxable under this article, other than for an organization tax, shall be exempt from assessment and taxation upon its personal property for state purposes, if all taxes due and payable under this article have been paid thereby. The personal property of every corporation taxable under section one hundred and eighty-eight of this article, other than for an organization tax, and as provided in the banking law, shall be exempt from assessment and taxation for all other purposes. The personal property of a private or individual banker, actually employed in his business as such banker, shall be exempt from taxation for state 456 NEW YORK CORPORATIONS. purposes, if such private or individual banker shall have paid all taxes due and payable under this article. Such corporation and private or individual banker shall in no other respect be relieved from assessment and taxation by reason of the provisions of this article. The owner and holder of stock in an incorporated trust company liable to taxation under the provisions of this chapter shall not be taxed as an individual for such stock. Personal property exempted from taxation by this section shall not include shares of stock of banks and banking asso- ciations taxable under the provisions of section twenty-four of this chapter. § 207. Limitation of time. The provisions of the code of civil procedure relative to the limitation of time of enforcing a civil remedy shall not apply to any proceeding or action taken to levy, appraise, assess, determine or enforce the collection of any tax or penalty pre- scribed by this article, and this section shall be construed as having been in effect as of date of the original enactment of the corporation tax law. (STOCK TRANSFER TAX.) ARTICLE 12. TAX ON TRANSFERS OF STOCK. Section 270. Amount of tax. 271. Stamps how prepared and sold. 272. Penalty for failure to pay tax. 273. Canceling stamps; penalty for failure. 274. Contracts for dies; expenses how paid. 275. Illegal use of stamps; penalty. 276. Power of state comptroller. 277. Civil penalty; how recovered. 278. Effect of failure to' pay tax. 279. Application of taxes. § 270. Amount of tax. There is hereby imposed and there shall immediately accrue and be collected a tax, as herein provided, on all sales, or agreements to sell, or memoranda of sales, or deliveries, or transfers, of shares or certificates of stock, in any domestic or foreign association, company or corporation, made after the first day of June, nineteen hundred and five, whether made upon or shown by the books of the association, company or corporation, or by any assignment in blank, or by any delivery, or by any paper or agreement or memoran- dum or other evidence of transfer or sale whether entitling the holder in any manner to the benefit of such stock, or to secure the future payment of money or the future transfer of any stock, on each share of one hundred dollars of face value or fraction thereof,* two cents. * The provision requiring jjayment of two cents on each share regardless of its par value, was declared unconstitutional in the case of People ex rel Farrington v. Mensching, 187 N. Y. (1907). (See § 151 of present volume.) TAX LAW. 457 It is not intended by this section to impose a tax upon an agreement evidencing the deposit of stock certificates as collateral security for money loaned thereon which stock certificates are not actually sold, nor upon such stock certificates so deposited. The payment of such tax shall be denoted by an adhesive stamp or stamps affixed as fol- lows: In a case where the evidence of transfer is shown only by the books of the company the stamp shall be placed upon such books; and where the change of ownership is by transfer of a certificate the stamp shall be placed upon the certificate; and in cases of an agreement to sell or where the transfer is by delivery of the certificate assigned in blank there shall be made and delivered by the seller to the buyer a bill or memorandum of such sale to which the stamp provided for by this article shall be affixed; and every bill or memorandum of sale or agreement to sell before mentioned shall show the date thereof, the name of the seller, the amount of the sale, and the matter or thing to which it refers, and no further tax is hereby imposed upon the deliv- ery of the certificate of stock, or upon the actual issue of a new cer- tificate when the original certificate of stock is accompanied by the duly stamped memorandum of sale. The comptroller may, upon satis- factory proof that stamps have been erroneously affixed and canceled in payment of the tax upon a transfer and to the loss of an innocent person, refund the amount thereof from appropriations made for neces- sary expenses under this article, provided the tax justly due is paid upon such transfer. § 271. Stamps how prepared and sold. Adhesive stamps for the purpose of paying the state tax provided for by this article shall be prepared by the state comptroller, in such form, and of such denomi- nations and in such quantities as he may from time to time prescribe, and shall be sold by him to the person or persons desiring to purchase the same; he shall make provision for the sale of such stamps in such places and at such times as in his judgment he may deem necessary. § 272. Penalty for failure to pay tax. Any person or persons who shall make any sale or transfer without paying the tax by this article imposed or who shall in pursuance of any sale or agreement deliver any stock, or evidence of the sale of or agreement to sell any stock or bill or memorandum thereof, without having the stamps provided for in this article affixed thereto, shall be deemed guilty of a misdemeanor, and upon conviction thereof shall pay a fine of not less than five hundred nor more than one thousand dollars, or be imprisoned not more than six months, or by both such fine and imprisonment at the discretion of the court. § 273. Canceling stamps; penalty for failure. In every case where an adhesive stamp shall be used to denote the payment of the state tax provided by this article the person using or affixing the same shall write or stamp thereupon the initials of his name and the date upon which the same shall be attached or used, and shall cut or per- forate the stamp in a substantial manner, so that such stamp can not be again used; and if any person fraudulently makes use of an adhesive stamp to denote the state tax imposed by this article, without so ef- fectually canceling and obliterating such stamp such person shall be deemed guilty of a misdemeanor, and upon conviction thereof shall pay a fine of not less than two hundred nor more than five hundred dollars 458 NEW YORK CORPORATIONS. or be imprisoned for not less than six months, or both, at the discretion of the court. § 274. Contracts for dies; expenses how paid. The state comp- troller is hereby directed to make, enter into and execute for and in behalf of the state such contract or contracts for dies, plates and print- ing necessary for the manufacture of the stamps provided for by this article, and provide such stationery and clerk hire together with such books and blanks as in his discretion may be necessary for putting into operation the provisions of this article; he shall be the custodian of all stamps, dies, plates or other material or thing furnished by him and used in the manufacture of such state tax stamps, and all expenses incurred by him and under his direction in carrying out the provisions of this article shall be paid to him by the state treasurer from any moneys appropriated for such purpose. § 27s. Illegal use of stamps; penalty. Any person who shall wil- fully remove or cause to be removed, alter or cause to be altered the canceling or defacing marks of any adhesive stamp provided for by this article with intent to use the same, or to cause the use of the same after it shall have been once used, or shall knowingly or wilfully sell or buy any washed or restored stamp, or offer the same for sale, or give or expose the same to any person for use, or knowingly use the same or prepare the same with intent for the further use thereof; or shall wilfully use any counterfeit stamp or any forged stamp with intent to defraud the state of New York, shall be guilty of a misdemeanor and on conviction thereof shall be liable to a fine of not less than five hundred nor more than one thousand dollars, or be imprisoned for not more than six months, or by both such fine and imprisonment, at the dis- cretion of the court. § 276. Power of state comptroller. Every person, firm, company, association or corporation making a sale, agreement to sell, delivery, or transfer, of shares or certificates of stock, or conducting or trans- acting a brokerage business shall keep or cause to be kept a just and true book of account wherein shall be plainly and legibly recorded the date of making every sale, agreement to sell, delivery, or transfer, of shares or certificates of stock, and every transaction in relation to any stock; the number of shares, the total amount covered by each such sale, agreement to sell, delivery, transfer or transaction, and the name of the other party thereto, and such book shall at all times be subject to the inspection of the comptroller, or any of his representatives be- tween the hours of ten o'clock in the forenoon and three o'clock in the afternoon, except on Saturdays, Sundays, and legal holidays. The state comptroller may, at any time after transfers of stock which by the provisions of this article are subject to a state stamp tax, inquire into and ascertain whether the tax imposed by the provisions of this article has been paid. For the purpose of ascertaining such fact the comp- troller shall have the right and it shall be his duty to examine the books and papers of any person, firm, company, association or cor- poration, and memoranda of transfers shall remain accessible for such inspection for three months from their respective dates. The state comptroller may enforce his right to examine the books and papers of any person, firm, company, association or corporation by mandamus. If from such examination the comptroller ascertains that the tax provided for in this article has not been paid he shall bring an action TAX LAW. 459 in his name as such comptroller in any court of competent jurisdiction for the recovery of such tax and for any penalty incurred by any person under the provisions of this article. Every person, firm, company, association or corporation who shall refuse to permit the comptroller or any of his representatives to inspect such books or any memoran- dum or record relating to such sale, agreement to sell, delivery, or transfer, or transaction at any time as above provided, or who sjiall fail to keep such book of account, or who shall in any other respect violate any of the provisions of this section shall be deemed guilty of a misdemeanor and on conviction thereof shall for each and every such offense pay a fine of not less than five hundred dollars nor more than five thousand dollars, or be imprisoned not less than three months nor more than two years, or both at the discretion of the court. § 277. Civil penalty; how recovered. Any person who shall violate the provisions of this article shall in addition to the penalties herein provided forfeit to the people of the state a civil penalty of five hundred dollars for each violation. The state comptroller shall bring an action in his name as such comptroller in any court of competent jurisdiction for the recovery of any civil penalty and all moneys col- lected by him shall be paid into the state treasury. § 278. Effect of failure to pay tax. No transfer of stock made after June first, nineteen hundred and five, on which a tax is imposed by this article, and which tax is not paid at the time of such transfer, shall be made the basis of any action or legal proceedings, nor shall proof thereof be offered or received in evidence in any court in this state. § 279. Application of taxes. The taxes imposed under this article and the revenues thereof shall be paid by the state comptroller into the state treasury and be applicable to the general fund, and to the pay- ment of all claims and demands which are a lawful charge thereon. CODE OF CIVIL PROCEDURE. Provisions Affecting Corporations. Summons. § 431. How personal service of summons made upon a domestic corporation. Personal service of the summons upon a defendant, being a domestic corporation, must be made by delivering a copy thereof, within the State, as follows: 2 * * * to the president or other head of the corporation, the secretary or clerk to the corporation, the cashier, the treasurer, or a director or managing agent. § 432. Idem; upon a foreign corporation. Personal service of the summons upon a defendant, being a foreign corporation, must be made by delivering a copy thereof, within the state, as follows: 1. To the president, vice-president, treasurer, assistant treas- urer, secretary or assistant secretary; or, if the corporation lacks either of those officers, to the officer performing corresponding functions, under another name. 2. To a person designated for the purpose as provided in section sixteen of the general corporation law. 3. If such a designation is not in force, or if neither the person designated, nor an officer specified in subdivision first of this section, can be found with due diligence, and the corporation has property within the state, or the cause of action arose therein; to the cashier, a director, or a managing agent of the corporation, within the state. 4. If the person designated as provided in section sixteen of the general corporation law dies or removes from the place where the corporation has its principal place of business within the state and the corporation does not within thirty days after such death or removal designate in like manner another person upon whom process against it may be served within the state, process against the corporation in an action upon any liability incurred within this state or if the corpora- tion has property within the state may after such death, removal or revocation and before another designation is made be served upon the secretary of state. [As amended by I,. 1909, Ch. 65.] § 433. Service of a process, etc. The provisions of this article, relating to the mode of service of a summons, apply likewise to the service of any process or other paper, whereby a special proceeding is commenced in a court, or before an officer, except a proceeding to punish for contempt, and except where special provision for the service thereof is otherwise made by law. 460 CODE OF CIVIL PROCEDURE. 46 1 Pleadings. § 525. Verification; how and by whom made. The verification must be made by the affidavit of the party, or, if there are two or more parties united in interest, and pleading together, by at least one of them, who is acquainted with the facts, except as follows: I. Where the party is a domestic corporation, the verification must be made by an officer thereof. * * * 3. Where the party is a foreign corporation; or where the party is not within the county where the attorney resides, or if the latter is not a resident of the state, the county where he has his office, and capable of making the affidavit; or, if there are two or more parties united in interest, and pleading together, where neither of them, ac- quainted with the facts, is within that county and capable of making the affidavit; or where the action or defense is founded upon a written instrument for the payment of money only, which is in the possession of the agent or the attorney; or where all the material allegations of the pleading are within the personal knowledge of the agent or the attorney; in either case the verification may be made by the agent of or the attorney for the party. Injunction. § 610. Order must recite ground (for injunction); service of order. The injunction order must briefly recite the grounds for the injunction. Where it is granted by the court, it must be served by delivering a certified copy thereof; where it is granted by a judge, it must be served by showing the original order, and delivering a copy thereof. Service of the order, upon a corporation, may be made as prescribed in this act, for making personal service of a summons upon a corporation. Copies of the papers, upon which the order was granted, must be delivered with the copy of the order. Attachment. § 636. What must be shown to procure the warrant. To entitle the plaintiff to such a warrant, he must show, by affidavit, to the satis- faction of the judge granting the same, as follows: 1. That one of the causes of action specified in the last section exists against the defendant. If the action is to recover damages for breach of a contract, the affidavit must show that the plaintiff is en- titled to recover a sum stated therein, over and above all counter- claims known to him. 2. That the defendant is either a foreign corporation or not a resident of the state; or, if he is a natural person and a resident of the state, that he has departed therefrom, with intent to defraud his creditors, or to avoid the service of a summons, or keeps himself con- cealed therein with the like intent; or, if the defendant is a natural person or a domestic corporation, that he or it has removed, or is about to remove, property from the state, with intent to defraud his or its creditors; or has assigned, disposed of, or secreted, or is about to assign, dispose of, or secrete property, with the like intent; or where, for the purpose of procuring credit, or the extension of credit, the defendant has made a false statement in writing, under his own hand or signature, or under the hand or signature of a duly authorized agent, made with his knowledge and acquiescence as to his financial responsibility or standing. * * * 462 NEW YORK CORPORATIONS. § 646. Attachment of unpaid subscription to foreign corporation. Under a warrant of attachment against a foreign corporation, other than a corporation created by or under the laws of the United States, the sheriff may levy upon the sum remaining unpaid upon a subscrip- tion to the capital stock of the corporation, made by a person within the county; or upon one or more shares of stock therein, held by such a person, or transferred by him, for the purpose of avoiding payment thereof. § 647. Attachment; interest in corporation. The rights or shares which the defendant has in the stock of an association or corporation, together with the interest and profits thereon, may be levied upon, and the sheriff's certificate of the sale thereof entitles the purchaser to the same rights and privileges, with respect thereto, which the de- fendant had, when they were so attached. § 648. Attachment; negotiable instruments. The attachment may also be levied upon a cause of action arising upon contract; including a bond, promissory note, or other instrument for the payment of money only, negotiable or otherwise, whether past due, or yet to become due, executed by a foreign or domestic government, state, county, public officer, association, municipal or other corporation, or by a private person, either within or without the state, which belongs to the defendant, and is found within the county. The levy of the attachment thereupon is deemed a levy upon, and a seizure and attach- ment of, the debt represented thereby. § 649. How property to be attached. A levy under a warrant of attachment must be made as follows: 3. Upon other personal property, by leaving a certified copy of the warrant, and a notice showing the property attached with the person holding the same; or, if it consists of a demand, other than as specified in the last subdivision, with the person against whom it exists; or, if it consists of right or share in the stock of an association or corporation, or interests or profits thereon, with the president, or other head of the association or corporation, or the secretary, cashier, or managing agent thereof. § 650. Certificate of defendant's interest to be furnished. Upon the application of a sheriff, holding a warrant of attachment, the presi- dent or other head of an association or corporation, or the secretary, cashier, or managing agent thereof, or a debtor of the defendant, or a person holding property, including a bond, promissory note, or other instrument for the payment of money, belonging to the defendant, must furnish to the sheriff a certificate, under his hand, specifying the rights or number of shares of the defendant, in the stock of the association or corporation, with all dividends declared, or incumbrances thereon; or the amount, nature, and description of the property, held for the benefit of the defendant, or of the defendant's interest in property so held, or of the debt or demand owing to the defendant, as the case requires. § 651. Person refusing certificate may be examined. If a person to whom application is made, as prescribed in the last section, refuses CODE OF CIVIL PROCEDURE. 463 to give such a certificate; or if it is made to appear, by affidavit, to the satisfaction of the court, or a judge thereof, or the county judge of the county to which the warrant is issued, that there is reason to suspect that a certificate given by him, is untrue, or that it fails fully to set forth the facts, required to be shown thereby; the court or judge may make an order, directing him to attend, at a specified time, and at a place within the county to which the warrant is issued, and submit to an examination under oath, concerning the same. The order may, in the discretion of the court or judge, direct an appearance before a referee named therein. § 707. Only attached property bound when summons not per- sonally served. Where a defendant, who has not appeared, is a non- resident of the state, or a foreign corporation, and the summons was served without the state, or by publication, pursuant to an order ob- tained for that purpose, as prescribed in chapter fifth of this act, the judgment can be enforced only against the property which has been levied upon, by virtue of the warrant of attachment, at the time when the judgment is entered. But this section does not declare the effect of such a judgment, with respect to the application of any statute of limitation. Preferred and Deferred Causes. § 791. Preference among civil actions. Civil causes are entitled to preference among themselves, in the trial or hearing thereof, in the following order, next after the causes specified in the last section but one: ******** 8. An action against a corporation founded upon a note or other evidence of debt, for the absolute payment of money. An action upon an undertaking given upon an appeal to the Court of Appeals or to stay the execution on an appeal to the Court of Appeals. Oaths and Affirmations. § 839. Admission by member of corporation. The admission of a member of an aggregate corporation, who is not a party, shall not be received as evidence against the corporation, unless it was made concerning and while engaged in a transaction in which he was the authorized agent of the corporation. Documentary Evidence. § 929. Book of foreign corporation; when evidence. Where a party wishes to prove an act or transaction of a foreign corporation, the book or books of the corporation may be used for that purpose, as presumptive evidence, whether any or all of the parties are or are not members of the corporation. § 930. When a copy thereof is evidence. If an original book is not produced at the trial, as prescribed in the last section, a copy thereof, or of an entry therein, verified as prescribed in the next sec- tion, may be used, with like effect as the original book; provided that the party, intending to use the copy, gives the adverse party at least ten days' notice of his intention, specifying briefly the nature of the 464 NEW YORK CORPORATIONS. evidence proposed to be given. But this and the next section do not apply, where the foreign corporation is a party to the action, and seeks to prove its own act or transaction, in its own behalf. § 931. How copy to be verified. The copy must be verified by the deposition, taken as prescribed by law, or the oral testimony, taken at the trial, of the person who made it, or of a person who has examined and cornpared it with the original book, or the entry therein. The witness must testify that the copy produced is correct; that he made it, or compared it with the original; and that he then knew that the original book so copied, or containing the entry, was the book of the corporation; or that it was then acknowledged to him to be such, by an officer or receiver of the corporation, or a person having the custody thereof, naming the person who made the acknowledgment; and he must specify where, and in whose custody, the original was then kept. § 931a. Copy of designation of person upon whom to make serv- ice, as evidence.. An exemplified copy of a designation of a person upon whom to make service filed by a foreign corporation as pro- vided in section sixteen of the general corporation law accompanied with a certificate that it has not been revoked, is presumptive evi- dence of the execution thereof, and conclusive evidence of the authority of the officer executing it. [As added by L,. 1909, Ch. 65.] Actions. § 1775. Complaint in actions by or against corporations. In an action brought by or against a corporation, the complaint must aver that the plaintiff, or the defendant, as the case may be, is a corpora- tion; must state whether it is a domestic corporation or a foreign corporation; and, if the latter, the state, country or government, by or under whose laws it was created. But the plaintiff need not set forth, or specially refer to, any act or proceeding, by or under which the corporation was created. § 1776. When proof of corporate existence unnecessary. In an action, brought by or against a corporation, the plaintiff need not prove, upon the trial, the existence of the corporation, unless the answer is verified, and contains an affirmative allegation that the plaintiff, or the defendant, as the case may be, is not a corporation. § 1777. Misnomer, when waived. In an action or special pro- ceeding, brought by or against a corporation, the defendant is deemed to have waived any mistake in the statement of the corporate name, unless the misnomer is pleaded in the answer, or other pleading in the defendant's behalf. § 1778. Action against a corporation upon a note, etc. In an action against a foreign or domestic corporation, to recover damages for the non-payment of a promissory note, or other evidence of debt, for the absolute payment of money, upon demand, or at a particular time, an order, extending the time to answer or demur, shall not be granted, except by the court, upon notice to the plaintiff's attor- ney. In such an action, unless the defendant serves, with a copy of his answer or demurrer, a copy of an order of a judge, directing that CODE OF CIVIL PROCEDURE. 1465 the issues presented by the pleadings be tried, the plaintiff may take judgment, as in case of default in pleading, at the expiration of twenty days after service of a copy of the complaint, either personally ■with the summons, or upon the defendant's attorney, pursuant to his demand therefor; or, if the service of the summons was otherwise than personal, at the expiration of twenty days after the service is complete. § 1779. When foreign corporation may sue. An action may be maintained by a foreign corporation, in like manner, and subject to the same regulations, as where the action is brought by a domestic corporation, except as otherwise specially prescribed by law. But a foreign corporation cannot maintain an action, founded upon an act, or upon a liability or obligation, express or implied, arising out of, or made and entered into in consideration of, an act, which the laws of the state forbid a corporation or association of individuals to do, without express authority of law. This section does not affect the validity of a meeting of the stockholders or directors of a foreign corporation, held within the state, where such a meeting is authorized by the laws of the state, country, or government, by or under which the corporation is created, or of an act, done at such a meeting, which is not in conflict with the same laws, or the laws of the state. § 1780. When foreign corporation may be sued. An action against a foreign corporation may be maintained by a resident of the state, or by a domestic corporation, for any cause of action. An action against a foreign corporation may be maintained by another foreign corporation, or by a non-resident, in one of the following cases only: 1. Where the action is brought to recover damages for the breach of a contract, made within the state, or relating to property situated within the state, at the time of the making thereof. 2. Where it is brought to recover real property situated within the state, or a chattel, which is replevied within the state. 3. Where the cause of action arose within the state, except where the object of the action is to affect the title to real property situated without the state. Actions in Behalf of the People. § 1948. Attorney-general may maintain action. The attorney- general may maintain an action, upon his own information, or upon the complaint of a private person, in either of the following cases: I. Against a person who usurps, intrudes into, or unlawfully holds or exercises, within the state, a franchise, or a public office, civil or military, or an office in a domestic corporation. * * * 3. Against one or more persons who act as a corporation, within the state, without being duly incorporated; or exercise within the state, any corporate rights, privileges, or franchises, not granted to them by the law of the state. 4. Against a foreign corporation which exercises within the state any corporate rights, privileges or franchises, not granted to it by the law of this state; or which within the state, has violated any pro- vision of law, or, contrary to law, has done or omitted any act, or has exercised a privilege or franchise, not conferred upon it by the law of this state, where, in a similar case, a domestic corporation would in accordance with section one hundred and thirty-one of the 466 NEW YORK CORPORATIONS. general corporation law, be liable to an action to vacate its charter and to annul its existence; or which exercises within the state any cor- porate rights, privileges or franchises in a manner contrary to the public policy of the state. [As amended by L,. 1909, Ch. 65.] Miscellaneous. § 2865. Actions by and against officers, etc. An action, cogniz- able by a justice of the peace, may be brought by or against a cor- poration; * * * § 2879. Service of summons upon a corporation. Where the de- fendant to be served is a corporation, or person, company or part- nership doing business in another county than that in which he or it resides, the summons may be personally served upon it or him by delivering a copy thereof to an officer, managing agent or person to whom a copy of the summons in an action brought against the cor- poration in the Supreme Court might be delivered as prescribed in sections four hundred and thirty-one and four hundred and thirty-two of this act, or, to any director, managing agent or trustee of the corporation, person, partnership or company by whatever official title he or it is called. § 3268. When defendant may require security for costs. The de- fendant, in an action brought in a court of record, may require security for costs to be given, as prescribed in this title, where the plaintiff was, when the action was commenced, either * * * 2. A foreign corporation; * * * § 3343. Miscellaneous general definitions and rules of construc- tion. In construing this act, the following rules must be observed, except where a contrary intent is expressly declared in the provision to be construed, or plainly apparent from the context thereof: 18. A "domestic corporation" is a corporation created by or un- der the laws of the state; or located in the state, and created by or under the laws of the United States, or by or pursuant to the laws in force in the colony of New York, before the 19th day of April, in the year seventeen hundred and seventy-five. Every other corpora- tion is a "foreign corporation." PENAL LAW. Laws of 1909, Chapter 88, constituting Cliapter 40 of the Consolidated Laws. Provisions Affecting Corporations. § 280. Corporations not to practice law. It shall be unlawful for any corporation to practice or appear as an attorney-at-law for any person other than itself in any court in this state or before any judicial body, or to make it a business to practice as an attorney-at-Iaw, for any person other than itself, in any of said courts or to hold itself out to the public as being entitled to practice law, or to render or furnish legal services or advice, or to furnish attorneys or counsel or to ren- der legal services of any kind in actions or proceedings of any nature or in any other way or manner, or in any other manner to assume to be entitled to practice law or to assume, use or advertise the title of lawyer or attorney, attorney-at-Iaw, or equivalent terms in any lan- guage in such manner as to convey the impression that it is entitled to practice law, or to furnish legal advice, services or counsel, or to advertise that either alone or together with or by or through any per- son, whether a duly and regularly admitted attorney-at-law, or not, it has, owns, conducts or maintains a law office or an office for the practice of law, or for furnishing legal advice, services or counsel. It shall be unlawful further for any corporation to solicit itself or by or through its officers, agents or employees any claim or demand for the purpose of bringing an action thereon or of representing as attorney- at-law, or for furnishing legal advice, services or counsel to, a person sued or about to be sued in any action or proceeding or against whom an action or proceeding has been or is about to be brought, or who may be affected by any action or proceeding which has been or may be instituted in any court or before any judicial body, or for the pur- pose of so representing any person in the pursuit of any civil remedy. Any corporation violating the provisions of this section shall be liable to a fine of not more than five thousand dollars and every officer, trus- tee, director, agent, or employee of such corporation who directly or indirectly engages in any of the acts herein prohibited or assists such corporation to do such prohibited acts is guilty of a misdemeanor. The fact that any such officer, trustee, director, agent, or employee shall be a duly and regularly admitted attorney-at-law shall not be held to permit or allow any such corporation to do the acts prohibited herein nor shall such fact be a defence upon the trial of any of the persons mentioned herein for a violation of the provisions of this sec- tion. This section shall not apply to any corporation lawfully en- gaged in a business authorized by the provisions of any existing statute, nor to a corporalion lawfully engaged in the examination and 467 468 NEW YORK CORPORATIONS. insuring of titles to real property, nor shall it prohibit a corporation from employing an attorney or attorneys in and about its own imme- diate affairs or in any litigation to which it is or may be a party, nor shall it apply to organizations organized for benevolent or charitable purposes, or for the purpose of assisting persons without means in the pursuit of any civil remedy, whose existence, organization or incor- poration may be approved by the appellate division of the supreme court of the department in which the principal office of said corpora- tion may be located. [Added by L. igop, Ch. 483.] § 660. Frauds in the organization of corporations. A person who: 1. Without authority subscribes the name of another to or in- serts the name of another in any prospectus, circular or other adver- tisement or announcement of any corporation or joint-stock associa- tion existing or intended to be formed, with intent to permit the same to be published, and thereby to lead persons to believe that the person whose name is so subscribed is an officer, agent, member or promoter of such corporation or association; or, 2. Signs the name of a fictitious person to any subscription for or agreement to take stock in any corporation, existing or proposed; or, 3. Signs to any such subscription or agreement the name of any person, knowing that such person does not intend in good faith to comply with the terms thereof, or under any understanding or agree- ment, that the terms of such subscription or agreement are not to be complied with or enforced, Is guilty of a misdemeanor. § 661. Frauds in procuring organization of corporations. An officer, agent or clerk of a corporation, or of persons proposing to organize a corporation, or to increase the capital stock of a corpora- tion, who knowingly exhibits a false, forged or altered book, paper, voucher, security or other instrument of evidence to any public officer or board authorized by law to examine the organization of such cor- poration, or to investigate its affairs, or to allow an increase of its capital, with intent to deceive such officer or board in respect thereto, is punishable by imprisonment in a state prison not exceeding ten years. § 662. Fraudulent issue of stock and bonds. An officer, agent or other person in the service of any joint-stock company or corpora- tion formed or existing under the laws of this state, or of the United States or of any state or territory thereof, or of any foreign govern- ment or country, who wilfully and knowingly, with intent to defraud: I. Sells, pledges or issues, or causes to be sold, pledged or issued, or signs or executes, or causes to be signed or executed with intent to sell, pledge or issue, or causes to be sold, pledged or issued, any certificate or instrument purporting to be a certificate or evidence of the ownership of any share or shares of such company or corpora- tion, or any bond or evidence of debt, or writing purporting to be a bond or evidence of debt of such company or corporation, without being first thereto duly authorized by such company or corporation, or contrary to the charter or laws under which such corporation or company exists, or in excess of the power of such company or corpor- ation or of the limit imposed by law or otherwise upon its power to create or issue stock or evidences of debt; or. PENAL LAW. 469 2. Reissues, sells, pledges or disposes of, or causes to be re- issued, sold, pledged or disposed of, any surrendered or canceled cer- tificates, or other evidence of the transfer or ownership of any such share or shares. Is punishable by imprisonment for a term not exceeding seven years, or by a fine not exceeding three thousand dollars, or by both. § 663. Acting for foreign corporations not authorized to do busi- ness in this state. Any person, or corporation, who: * * * 2. Acts as agent or representative in this state of a foreign cor- poration, other than a moneyed corporation, with the words "trust," "bank," "banking," "insurance," "assurance," "indemnity," "guarantee," "guaranty," "savings," "investment," "loan," "benefit," or any other words or terms indicating, representing or holding out such company to be a rnoneyed corporation as a part of its name or corporate title, or who, in connection with such corporation or otherwise, shall put forth any sign containing said name, or who shall advertise or publish the said company as doing business in this state, directly or indirectly, through agents or otherwise, while such company shall not be author- ized under a certificate procured from the secretary of state pursuant to section fifteen of the general corporation law to do business in this state. Is guilty of a misdemeanor. § 664. Misconduct of officers and directors of stock corporations. A director of a stock corporation, who concurs in any vote or act of the directors of such corporation, or any of them, by which it is in- tended: 1. To make a dividend, except from the surplus profits arising from the business of the corporation, and in the cases and manner allowed by law; or, 2. To divide, withdraw, or in any manner pay to the stockholders, or any of them, any part of the capital stock of the corporation; or to reduce such capital stock without the consent of the legislature; or, 3. To discount or receive any note or other evidence of debt in payment of an instalment of capital stock actually called in, and re- quired to be paid, or with intent to provide the means of making such payment; or, 4. To receive or discount any note or other evidence of debt with intent to enable any stockholder to withdraw any part of the money paid in by him on his stock; or, 5. To apply any portion of the funds of such corporation, except surplus profits, directly or indirectly, to the purchase of shares of its own stock. Is guilty of a misdemeanor. An officer or director of a stock corporation who: 6. Issues, participates in issuing, or concurs in a vote to issue any increase of its capital stock beyond the amount of the capital stock thereof, duly authorized by or in pursuance of law; or, 7. Sells, or agrees to sell, or is directly or indirectly interested in the sale of any share of stock of such corporation, or in any agree-' ment to sell the same, unless at the time of such sale or agreement he is an actual owner of such share. Is guilty of a misdemeanor, punishable by imprisonment for not less than six months, or by a fine not exceeding five thousand dollars, •or by both. 470 NEW YORK CORPORATIONS. § 665. Misconduct of directors, officers, agents and employees of corporations. A director, officer, agent or employee of any corporation or joint-stock association who: 1. Knowingly receives or possesses himself of any of its prop- erty otherwise than in payment for a just demand, and with intent to defraud, omits to make or to cause or direct to be made a full and true entry thereof in its books and accounts; or, 2. Makes or concurs in making any false entry, or concurs in omitting to make any material entry in its books or accounts; or, 3. Knowingly (a), concurs in making or publishing any written report, exhibit or statement of its affairs or pecuniary condition con- taining any material statement which is false, or (b), omits or concurs in omitting any statement required by law to be contained therein; or, 4. Having the custody or control of its books, wilfully refuses or neglects to make any proper entry in the stock book of such cor- poration as required by law, or to exhibit or allow the same to be inspected, and extracts to be taken therefrom by any person entitled by law to inspect the same, or take extracts therefromi; or, 5. If a notice of an application for an injunction affecting the property or business of such joint-stock association or corporation is served upon him, omits to disclose the fact of such service and the time and place of such application to the other directors, officers and managers thereof; or, 6. Refuses or neglects to make any report or statement lawfully required by a public officer. Is guilty of a misdemeanor. § 666. Unlawful use of certain titles in connection with corporate name. Any person, association or corporation, other than a moneyed corporation, who shall within this state directly or indirectly, or through agents or representatives transact business under, or in any- wise use a corporate name or a corporate title with the words "trust," "bank," "banking," "insurance," "assurance," "indemnity," "guarantee," "guaranty," "savings," "investment," "loan," "benefit," as a part of such name or title, is guilty of a misdemeanor; provided, however, that any domestic corporation, other than a moneyed corporation, heretofore duly organized and heretofore duly authorized by law to use and on April twenty-ninth, nineteen hundred and four, lawfully using either or any of such words as a part of its lawful corporate title, may law- fully continue to use such corporate title, provided and if it, being a corporation other than a moneyed corporation, shall, wherever the name shall be printed, written, engraved or displayed, add, in legible English characters, of substantially the same size and style as the name, directly under the said name or immediately in connection there- with, wherever so used, the words "not a moneyed corporation." § 667. Presumption of knowledge of corporate condition and business and of assent thereto by directors; definitions. It is no de- fense to a prosecution for a violation of the provisions of this article and article twenty-six, that the corporation is a foreign corporation, if it carries on business or keeps an office therefor in this state. The term "director" as used in this article and article twenty-six includes any of the persons having, by law, the direction or manage- ment of the affairs of a corporation, by whatever name described. A director of a corporation or joint-stock association is deemed to have such a knowledge of the affairs of the corporation or association- PENAL LAW. 471 as to enable him to determine whether any act, proceeding or omission of its directors is a violation of this article and article twenty-six. If present at a meeting of the directors at which any act, proceeding or omission of such directors in violation of this article and article twenty- six occurs, he must be deemed to have concurred therein, unless he at the time causes or in writing requires his dissent therefrom to be entered on the minutes of the directors. If absent from such meeting, he must be deemed to have concurred in any such violation, if the facts constituting such violation appear on the record or minutes of the proceedings of the board of directors, and he remains a director of the corporation for six months thereafter without causing or in writ- ing requiring his dissent from such violation to be entered on such record of minutes. § 668. Misconduct at corporate elections. Any person who: 1. Being entitled to vote at any meeting of the stockholders or bondholders or both of a stock corporation, sells his vote, or who issues a proxy to vote to any person for any sum of money or thing of value, except as expressly authorized by law; or, 2. Acts as an inspector of election at any such meeting and violates an oath taken by him in pursuance of law as such inspector, or violates the provisions of an oath required by law to be taken by him as such inspector, or is guilty of any dishonest or corrupt con- duct as such inspector, Is guilty of a misdemeanor. § 759. Refusal to permit emplojnees to attend election. A person or corporation who refuses to an employee entitled to vote at an elec- tion or town meeting, the privilege of attending thereat, as provided by the election law, or subjects such employee to a penalty or reduc- tion of wages because of the exercise of such privilege, is guilty of a misdemeanor. § 882. Falsely indicating person as corporate officer. The false making or forging of an instrument or writing, purporting to have been issued by or in behalf of a corporation or association, state or government, and bearing the pretended signature of any person, there- in falsely indicated as an agent or officer of such corporation, is for- gery in the same degree as if that person were in truth such officer or agent of the corporation or association, state or government. § 890. Officer of corporation selling fraudulent shares. An officer, agent or other person employed by any company or corporation ex- isting under the laws of this state, or of any other state or territory of the United States, or of any foreign government, who wilfully and with a design to defraud, sells, pledges or issues, or causes to be sold, pledged or issued, or signs or procures to be signed with intent to sell, pledge or issue, or to be sold, pledged or issued, a false, forged or fraudulent paper, writing or instrument, being or purporting to be a scrip, certificate or other evidence of the ownership or transfer of any share or shares of the capital stock of such company or corpora- tion, or a bond or other evidence of debt of such company or corpora- tioni or a certificate or other evidence of the ownership or of the transfer of any such bond or other evidence of debt, is guilty of forgery in the third degree, and upon conviction, in addition to the punishment pre- scribed in section eight hundred and ninety-three of this chapter for 472 NEW YORK CORPORATIONS. that offense, may also be sentenced to pay a fine not exceeding three thousand dollars. § 1272. Payment of wages. A corporation or joint-stock associa- tion or person carrying on the business thereof, by lease or otherwise, who does not pay the wages of all its employees in accordance with the provisions of the Labor Law, is guilty of a misdemeanor, and upon conviction therefor, shall be fined not less than one hundred nor more than ten thousand dollars for each offense. An indictment of a person or corporation operating a steam surface railroad for an offense speci- fied in this section may be found and tried in any county within the state in which such railroad ran at the time of such offense. [As amended by L. 1909, Ch. 205.] § 1932. Pimishment of corporation convicted of felony. In all cases where a corporation is convicted of an offense for the commis- sion of which a natural person would be punishable with imprison- ment, as for a felony, such corporation is punishable by a fine of not more than five thousand dollars. § 1937. Punishment of misdemeanors when not fixed by statute. A person convicted of a crime declared to be a misdemeanor, for which no other punishment is specially prescribed by this chapter, or by any other statutory provision in force at the time of the conviction and sentence, is punishable by imprisonment in a penitentiary, or county jail, for not more than one year, or by a fine of not more than five hundred dollars, or by both. MISCELLANEOUS STATUTORY PROVISIONS AFFECTING CORPORATIONS. LABOR LAW^. (Chapter 31 of the Consolidated Laws.) § 9- Payment of wages by receivers.. Upon the appointment of a receiver of a partnership or of a corporation organized under the laws of this state and doing business therein, other than a moneyed corpora- tion, the wages of the employees of such partnership or corporation shall be preferred to every other debt or claim. § 10. Cash payment of wages. Every manufacturing, mining, quarrying, mercantile, railroad, street railway, canal, steamboat, tele- graph and telephone company, every express company, every corpora- tion engaged in harvesting and storing ice, and every water company, not municipal, and every person, firm or corporation, engaged in or upon any public work for the state or municipal corporation thereof, either as a contractor or a sub-contractor therewith, shall pay to each employee engaged in his, their or its business the wages earned by such employee in cash. No such company, person, firm or corpora- tion shall hereafter pay such employees in scrip, commonly known as store money orders. * * * Any person, firm or corp&ration violating the provisions of this section shall be guilty of a misde- meanor. § II. When wages are to be paid. Every corporation or joint- stock association, or person carrying on the business thereof by lease or otherwise, shall pay weekly to each employee the wages earned by him to a day not more than six days prior to the date of such pay- ment. But every person or corporation operating a steam surface rail- road shall, on or before the first day of each month, pay the employees thereof the wages earned by them during the first half of the pre- ceding month ending with the fifteenth day thereof, and on or before the fifteenth day of each month pay the employees thereof the wages earned by them during the last half of the preceding calendar month. § 12. Penalty for violation of preceding sections. If a corpora- tion or joint-stock association, its lessee or other person carrying on the business thereof, shall fail to pay the wages of an employee as provided in this article, it shall forfeit to the people of the state the sum of fifty dollars for each such failure, to be recovered by the com- missioner of labor in his name of office in a civil action; but an action shall not be maintained therefor, unless the commissioner of labor shall have given to the employer at least ten days' written notice that such an action will be brought if the wages due are not sooner paid as provided in this article. 473 474 NEW YORK CORPORATIONS. On the trial of such action, such corporation or association shall not be allowed to set up any defense, other than a valid assignment of such wages, a valid set-off against the same, or the absence of such employee from his regular place of labor at the time of payment, or an actual tender to such employee at the time of the payment of the wages so earned by him, or a breach of contract by such employee or a denial of the employment. GENERAL BUSINESS LAW. (Chapter 20 of the Consolidated Laws.) § 340. Contracts for monopoly illegal and void. Every contract, agreement, arrangement or combination whereby a monopoly in the manufacture, production or sale in this state of any article or com- modity of common use is or may be created, established or maintained, or whereby competition in this state in the supply or price of any such article or commodity is or may be restrained or prevented, or whereby for the purpose of creating, establishing or maintaining a monopoly within this state of the manufacture, production or sale of any such article or commodity, the free pursuit in this state of any lawful busi- ness, trade or occupation is or may be restricted or prevented, is hereby declared to be against public policy, illegal and void. § 341. Penalty. Every person or corporation, or any officer or agent thereof, who shall malce or attempt to make or enter into any such contract, agreement, arrangement or combination, or who within this state shall do any act pursuant thereto, or in, toward or for the consummation thereof, wherever the same may have been made, is guilty of a misdemeanor, and on conviction thereof shall, if a natural person, be punished by a fine not exceeding five thousand dollars, or by imprisonment for not longer than one year, or by both such fine and imprisonment; and if a corporation, by a fine of not exceeding five thousand dollars. § 342. Action to restrain and prevent. The attorney-general may bring an action in the name and in behalf of the people of the state against any person, trustee, director, manager or other officer or agent of a corporation, or against a corporation, foreign or domestic, to restrain and prevent the doing in this state of any act herein declared to be illegal, or any act in, toward or for the making or consum- mation of any contract, agreement, arrangement or combination herein prohibited, wherever the same may have been made. GENERAL INDEX. [References are to pages.] [For L,ist of Forms, see Table of Contents.] Acceptance of Charter, 47, 49. Subscriptions, 47, 83, 84. Acknowledgment, Charter, 30, 38, 39; Statutes, 352, 363. Forms, 214. Corporate, 259. Forms, 259. Incorporator may not take, 30, 38, 39. Actions by and against Corporations, 55-57, 117, 118. Attorney General, 55-57, 60, 61; Statutes, 381-392, 417, 455, 474; Code, 465, 466. Bonds, Validity of. Statutes, 433. Complaints in, Code, 464. Dissolution, 60, 61; Statutes, 382-397. Forms, 307-315. Evidence in. Documentary, 140; Statutes, 364, 365; Code, 463, 464. Stockholder's, Code, 463. Non-payment of Note, Code, 464, 465. Not Affected by. Amendment of Charter, Statutes, 364, 378, 379. Consolidation, Statutes, 356, 424, 427. Dissolution, Statutes, 353. Officers' Testimony, Statutes, 414. Preferences in, 184; Statutes, 417, 418; Code, 463. Procedure in. Code, 460-466. Service of Summons or Process, 172; Statutes, 367, 368; Code, 460, 466. Stay When Collusively Brought, Statutes, 372, 373. Actions by and against Directors and Officers, 126-129, 135-137; Stat- utes, 381, 383, 385, 386, 433, 474; Code, 466. Foreign Corporations, 173-174, 178; Statutes, 365, 367, 368; Code, 460, 461, 463-465; Pen. Law, 469. Receivers, 183-185, 189, 190; Statutes, 402-407, 417. 475 476 GENERAL INDEX. [References are to pages.] Actions by and against Stockholders, 96-104, 136. Statutory Liability, 101-103; Statutes, 385, 386, 416, 436-438, 440; Code, 465. Suit on Behalf of Corporation, 96, 97. Suit to Dissolve, 100, 101; Statutes, 383, 393. Adjournment of Meetings, 50, 53, 59. Administrator, Liability as Stockholder, 103; Statutes, 436, 437. Admission Made by Agent, Code, 463. Admission to State. (See Foreign Corporations.) Adoption of By-Laws. (See By-Laws.) Agent of Foreign Corporation. (See Foreign Corporations.) Agent, Transfer, 114. Agreement (see also Contracts). for Consolidation, 69-71; Statutes, 354-356. for Reorganization; Statutes, 435. Subscription, 83, 84, 191, 193, 194, 195; Statutes, 435; Pen. Law, 468. Forms, 191-195. Voting Trust, 105, 315-317; Statutes, 370, 371. Forms, 315-817. Allowance of Charter, 40, 41, 47; Statutes, 363. Alteration of Business, 73; Statutes, 428. Amended and Supplemental Certificates, 76; Statutes, 363, 364. Amendment of By-Laws, 45, 46; Statutes, 366, 373. Amendment of Charter, 72-77, 281-398; Statutes, 363, 364, 418. (See also sub-heads.) Alteration of Business, 72; Statutes, 428. by Corporators or Directors, Statutes, 364. Change of Name, 32, 75, 76, 381-384; Statutes, 376-379. Forms, 381-284. Change of Office, 74, 75, 285-287; Statutes, 436, 437. Forms, 385-387. Classification of Stock, 34, 35, 75, 81, 388-390, 293-295; Statutes, 437, 438. Forms, 388-290, 393-394. Extension of Corporate Existence, 54, 55, 75; Statutes, 373, 374. Fees, Table of, 338, 339. Filing and Recording, 77; Statutes, 363, 364. Increase or Decrease of Capital Stock, 68, 73, 74, 89, 90, 109, 390- 395; Statutes, 438, 439, 448. Forms, 290-294. Increase or Decrease of Number of Directors, 74, 109, 130, 395- 398; Statutes, 429, 430. Forms, 295-398. GENERAL INDEX. 477 [References are to pages.] Amendment of Charter. — Continued. Increase or Decrease of Number of Shares, 74, 82; Statutes, 439, 440. Informalities or Obvious Defects, 76; Statutes, 364. Procedure for, 72-77. (See also special subjects.) Securing New Purposes, 72; Statutes, 428. Annual Election. (See Election, Annual.) Annual Franchise Tax. (See Taxation.) Annual Meeting of Stockholders, 42, 43, 106-117, 245, 248-253, 298, 299; Statutes, 439. (See also Election, Annual; also Meetings.) Forms, 244, 245, 248-253. Notice of, 43, 108, 248^50; Statutes, 429. Forms, 248-250. Place of, 42, 106, 107. Quorum, 42, 110, 114; Statutes, 429. Time, 42. Annual Report. (See Reports.) Application for Review of Election, 117; Statutes, 372; Code, 465. Forms, 301, 302. Appointment of Officers and Agents, 62, 63, 132; Statutes, 366, 431. Receivers, 61, 179, 180. (See also Receivers.) Assent of Stockholders. (See Consent.) Assessment. (See Taxation.) Assets, Sale of Entire, 98; Statutes, 427, 428. Assignment of Property, 127, 129, 136; Statutes, 440. (See also Ex- change of Stock for Property.) Forms, 243j 343. When Prohibited, 137, 129, 136; Statutes, 381, 440. Stock, 91-93, 99, 204, 206, 208, 236, 337; Statutes, 366, 433, 434, 456-459; Pen. Law, 469, 471, 472. in Blank, 91, 92, 204. Forms, 204. Attachment, 178; Code, 461-463. Attestation of Seal, 358. Forms, 258. Attorney General, Actions by, 55-57, 61; Statutes, 381-393, 417, 455, 474; Code, 465, 466. B. Bank Deposits, 53, 261, 263. (See By-Laws, 224, 331.) Forms, 261, 262. Banking Powers Prohibited, 21, 33; Statutes, 352, 364, 369. Beginning Business, 53, 54; Statutes, 352, 353, 363, 373, 448. Initial Capital, 35, 54; Statutes, 353, 353. 478 GENERAL INDEX. [References are to pages.] Board of Directors. (See Directors.) Bond, Corporate. (See Bond Issues.) Indemnity, 87; Statutes, 441. Forms, 205. Treasurer's, 133; Statutes, 431. Bond Issues, 67, 68, 330-334;' Statutes, 432-435, 436. Forms, 320-334. Bond, 324, 325. Certificate of Consent, 332, 333. Coupon, 335. Deed of Trust, 336-333. Directors' Resolution, 333. Execution of Deed of Trust, 333. Stockholders' Consent, 331. Stockholders' Resolution, 330. Trustee's Certificate, 335. Consideration for Issue, 87; Statutes, 436. Conversion into Stock, 68, 98; Statutes, 423. Effect of Recitals in Mortgage, 67, 68; Statutes, 423. Effect of Recording Mortgage, Statutes, 433. Foreclosure, Statutes, 415, 424-436. Guarantee by Another Corporation, 68, 69, 98; Statutes, 434. How Authorized, 67, 68, 320-333; Statutes, 432. Procedure for, 320-323. Reorganized Corporation, Statutes, 424, 435. Books, Corporate, 113, 114, 139-143, 177, 178, 306-211. Account, 139; Statutes, 431. Entries in Must Be Made, 136, 140, 308; Statutes, 433; Pen. Law, 470. Evidence, Use of as, 140; Statutes, 369, 372, 432; Code, 463, 464. Foreign Corporation, 177, 178; Statutes, 433; Code, 463, 464. Inspection of, 99, 100, 111, 113, 123, 141, 142, 177, 178; Statutes, 370, 432; Pen. Law, 470. by Directors, 133, 143. Stock Book or Ledger, 140-142, 177, 178, 308, 309, 211; Statutes, 369, 370, 373, 431, 433; Pen. Law, 470. Forms, 210. Closing, 111, 113, 114; Statutes, 369, 370. Contents of, 140, 208, 209, 211; Statutes, 431, 432. Proof of Right to Vote, 111, 112, 116, 117, 119; Statutes, 369-370, 372. Transfer Book, 206, 208. Forms, 206, 207. Closing, 111, 113, 114; Statutes, 370. Where Kept, 139, 141; Statutes, 431, 433. GENERAL INDEX. 479 [References are to pages.] Borrowing Money, 67, 68; Statutes, 433-425. (See also Bond Issues.) Business, Alteration of. (See Amendments.) Beginning, 53, 54; Statutes, 352, 353, 363, 373, 448. Business Corporations Law, 21; Statutes, 351-359. Tables, 343, 359. By-Laws, 42-46, 49, 50, 63, 134, 135, 223-233; Statutes, 366, 378, 429, 431. Forms, 223-232. Adoption of, 44. 49, 50, 63. Amendment of, 45, 46. Certification of, 333. Forms, 333. Certified Transcript of, 363. Directors Controlled by, 43, 104, 105; Statutes, 366. May Make, 38, 44, 46, 133; Statutes, 366, 373. Enforcement of, 45. Force as to Third Persons, 134, 135. Inspectors of Election, Appointment Prescribed by, 43, 115; Statutes, 431. Meetings and Elections Regulated by, 43, 43, 107, 108, 110, 111, 113, 115, 129-131; Statutes, 366, 376. Officers' Powers and Duties Prescribed by, 43, 132-135; Statutes, 431. Power to Make, 38, 44, 46, 63, 128. Preparation of, 43. Repeal, 45, 46. Stockholders Make, 44. Stock Transfers Regulated by, 44. Calendar, Corporate, 340-343. Calls, 73, 107, 247, 353, 354. Forms, 247. 253. Calls and Waivers, 48, 51, 107, 108, 334, 335, 354; Statutes, 375, 376. (See also Consent Meetings.) Forms, 284, 335, 354. Capital, 78, 144, 175-177. Initial, 35, 54, 315; Statutes, 852, 353. Capitalization, 79; Statutes, 853, 853. Capital Stock, 84, 35, 44, 78-95, 144. (See also Stock.) Amount, 34, 35, 79; Statutes, 353, 358. Classification of. (See Classification.) Consideration for Issue, 87, 88; Statutes, 436. Employed in State, 143-153, 174-177; Statutes, 448, 449. 480 GENERAL INDEX. [References are to pages.] Capital Stock. — Continued. Increase or Decrease. (See Increase.) Payment of, 78, 88, 89, 91, 92; 334-243, 338; Statutes, 353, 385, 435-437. Forms, 234-243, 263, 264. One-half, 78, 263, 264; Statutes, 353. Forms, 263, 264. Subscription to. (See Subscription.) When to be Issued, 78, 79. Withdrawal Prohibited, 126, 127; Statutes, 430; Pen. Law, 469. Certificate, Forms of, Change of OiSce, 286, 287. Foreign Corporation, 280, 281. Classification of Stock, 288-290, 292-294. Consent to Mortgage, Stockholders', 322, 333. Dissolution, 303, 304. Incorporation, 212-221. Increase of Stock, 293-394. Inspectors of Election, 351, 252, 339. Liability for Making False, 127-139, 136; Statutes, 433; Pen. Law, 470. Payment of One-half Capital Stock, 263, 264. Secretary's, 260-262, 278, 285, 289-291, 294-297, 305, 306. Trustee's, 325. Certificate of Authority, Foreign Corporation. (See Foreign Corpora- tion.) Comptroller for Decrease of Capital Stock, 73, 90, 391, 392, 338; Statutes, 438, 439. Secretary of State for Change of Corporate Name, 75, 76, 339; Statutes, 377. Certificate of Incorporation, 27-41, 212-321; Statutes, 352, 353, 361, 363- 365. Forms, 212-231. Acceptance of, 47, 49. Acknowledgment, 30, 38, 39; Statutes, 352, 363. Forms, 214. Allowance of, 40, 41, 47; Statutes, 363. Alteration or Repeal by Legislature, 30; Statutes, 418. Amended and Supplemental, 76; Statutes, 363, 364. Amendment of, 72-77, 381-298. (See also Amendment of Char- ter.) Certified Copy, 26, 39, 40, 214, 315; Statutes, 361, 363-365. Contents, 30-38, 212, 315; Statutes, 352, 365. Capital Stock, Amount, 34, 35. Corporate Name, 31, 33, 315. GENERAL INDEX. 48I [References are to pages.] Certificate of Incorporation. — Continued. Contents. — Continued. Directors for First Year, 36, 37, 215. Duration, 36. Initial Capital, 35, 54, 215. Location of Principal Office, 36, 215. Purposes, 33, 34, 212, 215. Shares, 35. Subscribers, 37, 215. Definition,- 29; Statutes, 361. English Language, Must be in, 30, 278; Statutes, 363. Evidence, Value as, 40, 214, 315; Statutes, 364, 365. Execution of, 30, 38, 39; Statutes, 352, 363. Forms, 214. Exemplification of, 40. Fees, 25, 26, 39, 40; Statutes, 363, 448. Tables of, 335-339. Filing, 39, 40, 53; Statutes, 352, 363, 364, 448. Forfeiture, 55-57; Statutes, 353, 373, 382-392, 455. Illegal Provisions in, 30. Incorporators, 27-29, 37-39, 212, 215; Statutes, 352, 363. Lost or Destroyed, Statutes, 364. Preparation of, 29, 30, 215; Statutes, 352, Recording, 39, 40; Statutes, 352, 363, 448. Special Provisions in, 37, 38, 212, 217, 219; Statutes, 352, 36S, 369, 370, 434, 435, 437, 438. Subscribers to, 37, 215. Certificates of Stock, 85-87, 96, 99, 199-205; Statutes, 434, 437, 440, 441; Pen. Law, 468, 469, 471, 472. Forms, 200-204. Adoption of, 85, 201; Statutes, 434. Assignment of, 91, 92. 204, 206; Statutes, 434, 456-459. Forms, 204, 206, 207. in Blank, 91, 92, 204. Forms, 204. Common Stock, 203; Statutes, 437, 438. Forms, 201. Lost and Destroyed, 86, 87, 96, 99; Statutes, 440, 441. Indemnity Bond for, 87. Forms, 205. Partly Paid Stock, 86; Statutes, 437. Preferred Stock, 203; Statutes, 437, 438. Forms, 202. 482 GENERAL INDEX. [References are to pages.] Certificates of Stock. — Continued. Signatures, 85, 201. Forms, 301, 202. Temporary, 199. Forms, 200. Transfer Tax on, 153-156; Statutes, 456-459. (See also Taxa- tion.) Certification of By-Laws, 233. Forms, 233. Charter, 36, 39, 40, 214, 215; Statutes, 361, 363-365. Certified Minutes, 260, 361. Forms, 260. Resolution, 261, 362. Forms, 261, 262. Transcript from By-Laws, 263. Challenge of Stockholder or Proxy, 113, 116, 117, 299; Statutes, 370, 371. Forms, 298, 299. Change of Business. (See Amendment of Charter.) Name. (See Amendment of Charter.) Number of Directors. (See Amendment of Charter.) Number of Shares. (See Amendment of Charter.) Principal Office. (See Amendment of Charter.) Charter. (See Certificate of Incorporation.) Charter Powers. (See Powers.) Classification of Corporations, 20; Statutes, 361. For Purposes of Franchise Tax, 147-151; Statutes, 449, 450. Directors, 120, 131; Statutes, 439, 430. Stock, 34, 35, 75, 79-83, 288-290, 292-295, 338; Statutes, 352, 437, 438. Forms, 288-290, 292-294. Closing Stock Books before Meetings, ill, 113, 114; Statutes, 369, 370. Code of Civil Procedure, 460-466. Table, 349, 350. Combinations in Restraint of Trade, Statutes, 427, 474. Commencing Business, 53, 54. (See Beginning Business.) Committees, Standing, 51, 52, 130, 131. Common Stock, 79, 80, 203; Statutes, 437, 438. Forms, 201, Exchange of Preferred Stock for, 81; Statutes, 437, 438. Compensation of Directors, 122, 138. Officers, 138. GENERAL INDEX. 483 [References are to pages.] Comptroller's Certificate of Reduction of Capital Stock, 73, 90, 391, 292, 338; Statutes, 438, 439. Reports, 152, 167, 168, 178, 365-270; Statutes, 451-453. (See also Reports.) Forms, 266-270. Rules as to Transfers, 154-156. Condemnation of Property, Statutes, 358, 359. Conflicting Corporate Laws, 32; Statutes, 418. Consent Meetings, 47, 48, 50, 51, 72, 107, 108, 129; Statutes, 375, 376. Consent of Agent, Foreign Corporation, 277, 278; Statutes, 367, 368. Forms, 377, 278. Consent of Stockholders, 72, 106. Change of Principal Office, 74, 75, 285, 286; Statutes, 426, 427. Forms, 285. Dissolution, 58, 59; Statutes, 398, 399. Forms, 304, 305. Extend Corporate Existence, 75; Statutes, 373, 374. Increase Number of Directors, 74, 297; Statutes, 429, 430. Forms, 298. Increase or Reduction of Capital Stock, 73, 291; Statutes, 438, 439. Forms, 290, 291. Mortgage, 67, 68, 330-332, 339; Statutes, 423, 423. Forms, 321-333. Consideration for Issue of Stock or Bonds, 87, 88; Statutes, 436. Effect of Inadequate, 88. Must be Stated in Reports; Statutes, 436. Consolidation of Corporations, 69-71, 98; Statutes, 354-357, 363, 365, 427, 448. Agreement for, 69, 70. Evidence of. Statutes, 365. Fees, 25, 71, 338. Procedure for, 69-71. Rights of Dissenting Stockholders, 71. Constitutional Provisions Relating to Corporations, 19, 20. Construction of Laws, 33; Statutes, 418. Contested Elections, 117, 118, 301; Statutes, 372. Forms, 301, 302. Contracts, Directors', 124-126. Officers', 133-136. Signatures to, 136, 257, 358. Forms, 257, 258. Contributions, Political, 77, 137; Statutes, 376. 484 GENERAL INDEX. [References are to pages.] Copyrights, Deducted from Local Tax Assessment, 158, 163. Included in Franchise Tax Assessment, 145. Corporate Acknowledgment, 359. Forms, 259. Books. (See Books.) Calendar, Forms, 340-342. Contracts, 124-126, 134-136, 257-259. Debts. (See Debts; also Bond Issues.) Endorsement, 258, 259. Forms, 258. Existence, 36, 53-61, 75, 98; Statutes, 352, 365, 373-375. Extension of, 54, 55, 75, 98; Statutes, 373-375. Name, 31, 32, 75, 76, 215, 281-284; Statutes, 352, 363, 364, 367; Pen. Law, 469-471. Change of, 33, 75, 76, 381-284, 339; Statutes, 376-379. Forms, 281-284. Powers, 27, 33, 34, 37, 38, 60-77; Statutes, 352, 353, 365-367, 369; Pen Law, 467, 468. (See also Powers.) Property, Sale of, Statutes, 379, 380. Purposes, 33, 34, 212, 215; Statutes, 353, 353. Seal, 63; Statutes, 365, 434. Attestation of, 258. Forms, 258. Signatures, 136, 25T-259. Forms, 258. Testimonium, 258. Forms, 258. Corporations, Business, Definition of, 31; Statutes, 361. Convicted of Felony, Pen. Law, 472. Domestic, Statutes, 361; Code. 466. Foreign, Statutes, 361; Code, 466. (See also Foreign Cor- porations.) Full Liability, 101, 102; Statutes, 354. Pnictice of Law Prohibited, 27, 33, 137; Statutes, 352, 353; Pen. Law, 467, 468. Stock, Statutes, 361. Creditors' Rights against Directors and Officers, 127-139, 135-137; Stat- utes, 385, 386, 430, 431, 433, 440, 442. against Stockholders, 101-103; Statutes, 436, 437, 440, 442. as to Transferred Property, 137, 129; Statutes, 440. on Consolidation, 69; Statutes, 356, 357. When Laborers or Servants, 101; Statutes, 436, 440; Pen. Law, 473. Cumulative Voting, 114, 115; Statutes, 370. GENERAL INDEX. 485 [References are to pages.J D. Debts, 54, 67-69, 97, 98, 145, 157, 161-163; Statutes, 353, 415, 422, 424-426, 433. Deduction of, in Tax Assessment, 145, 157, 161-163. Decrease of Capital Stock, 73, 74, 89, 90, 109, 338; Statutes, 438, 439, 448. Forms, 290-294. Classified Stock, 73, 74, 90. Number of Directors, 74, 298; Statutes, 429, 430. Forms, 295-298. Number of Shares, 74, 82, 338; Statutes, 439, 440. Deed of Trust. (See Bond Issues; also Mortgages.) Definition of Corporate Terms, Statutes, 361, 363; Code, 466. Deposits, Bank, 52, 261, 262. (See also By-Laws, 224, 231.) Forms, 261, 262. Directors, 43, 120-131; Statutes, 352, 361, 429-431, 433; Pen. Law, 470. Actions against, 126-129, 135-137; Statutes, 381, 382, 385, 386, 433, 474; Code, 466. Authority. (See Powers.) By-Laws, Power to Make, 38, 44, 46, 123; Statutes, 366, 373. Power to Repeal, 46. Classification of, 120, 121; Statutes, 429, 430. Compensation, 122, 138. Contracts with Corporation, 124-126. Deemed to Have Knowledge of Corporate Proceeding's, 127; Statutes, 430; Pen. Law. 470, 471. Dummy, 28, ?0. Duties, 124; Statutes, 373. Election, 42, 43, 108, 110-119, 245, 248-253, 298-302; Statutes, 366, 369-372, 429-431; Pen. Law, 471. (See also Election.) Executive Committee, 51, 52, 130, 131. Failure to Elect, 118; Statutes, 371, 430. Finance Committee, 52, 130, 131. for First Year, 36, 37, 215; Statutes, 353. Holding Over, 118, 123; Statutes, 371, 430. Inspection of Books, 123, 142. Liabilities, 93, 126-129, 137; Statutes, 381, 385, 386, 430, 431, 433, 474; Pen. Law, 467, 470. Limitations on Powers, 43, 122, 123; Statutes, 352, 365. Majority May Act, 130; Statutes, 373, 375. Meetings, 38, 43, 50-52, 129-131, 234-238, 240, 342, 253-256. (See also -Meetings.) Misconduct, Penalty for, 126-129, 135-137; Pen. Law, 469, 470. Must Act as Board, 123, 129, 130; Statutes, 373, 375. 486 GENERAL INDEX. [References are to pages.] Directors. — Continued. Negligence of, 136. Number of, 36, 37, 120; Statutes, 352, 429, 430. Change of, 74, 109, 120-121, 295-298; Statutes, 429, 430. Forms, 295-298. OiBcers, Appointment, 62, 63, 132; Statutes, 366, 431. Removal, 137; Statutes, 431. Powers of, 38, 44, 46, 104, 122-124; Statutes, 366, 373, 375, 376. Qualifications, 37, 43, 121; Statutes, 373, 429, 435. Quorum, 43, 130; Statutes, 373, 375. Relation of, to Corporation and Stockholders, 124-126. Removal, 38, 123; Statutes, 381, 415, 416; Code, 465. Resignation, 131, 138. Special Elections of, 108, 109, 118, 119, 299, 301; Statutes, 371, 372, 439. Term of Office, 118. Trustees on Dissolution, 60, 123, 124; Statutes, 373. Vacancies, 119, 121; Statutes, 439, 430. Void Acts, 123; Statutes, 430. Voting, 130. Dissolution of Corporation, 54, 58-61, 109, 110, 123, 124, 179-190, 303- 315, 339; Statutes, 373, 382-418, 430. by Action of Attorney General, 56, 57; Statutes, 383-392. by Action of Incorporators, 58, 339; Statutes, 398. Directors are Trustees, 60, 123, 124; Statutes, 373. Voluntary, 60, 61, 307-315; Statutes, 392-397. Forms, 307-315. Appointment of Receiver. (See Receivers.) Order for, 61. Forms, 314, 315. Order to Show Cause, 61. Forms, 310, 311. Petition for, 60, 61. Forms, 307-309. Without Judicial Procedure, 58-60, 303-307; Statutes, 398-400. Forms, 303-306. Fees, 339. Notice of Meeting, 109, 110; Statutes, 398, 399. Rights of Dissenting Stockholders, 60. District Steam Corporations, Statutes, 357, 358. Dividends, 93-95, 99, 126-138, 147-151, 318, 319; Statutes, 430, 437; Pen. Law, 469. Cumulative, 80. Declaration of, 93-95, 319. Forms, 318, 319. GENERAL INDEX. 487 [References are to pages.] Dividends. — Continued. Deducted from Assessments, 161. Notice of, 319. Forms, 318, 319. on Partly Paid Stock, 86; Statutes, 437. on Preferred Stoclc, 80, 81, 94. Payment of, 93, 94. Stock, 94. Unauthorized, 93, 126-128; Statutes, 430; Pen. Law, 469. Domestic Corporations, Definition, Statutes, 361; Code, 466. Dummy Directors and Incorporators, 38, 29. Duration of Corporation, 36, 54, 55; Statutes, 353, 365, 373-375. Perpetual, if not Specified, 36; Statutes, 365. Duties of Directors, 134; Statutes, 373. Officers, 43, 132; Statutes, 375, 431. Election, Annual of Directors, 43, 43, 108, 110-119, 345, 248-353, 298- 303; Statutes, 369-373, 439-431; Pen. Law, 471. By-laws Fix Time and Place, 42, 43, 107; Statutes, 366, 429. Challenges, 113, 116, 117, 299; Statutes, 370, 371. Forms, 398, 299. Contested, 117, 118, 301; Statutes, 373. Forms, 301, 303. Cumulative Voting, 114, 115; Statutes, 370. Effect of Neglect to Hold, 118; Statutes, 371, 430. Inspectors of, 113, 115-117, 250-252; Statutes, 370-372, 431; Pen. Law, 471. Forms, 350-252. .Misconduct at, 115, 117; Pen. Law, 471. Notice of, 43, 108, 348; Statutes, 439. Forms, 348-350. Qualifications of Voters, 111; Statutes, 369, 370. Quorum, 43, 110, 114; Statutes, 439. of Officers, 51, 63, 63, 133; Statutes, 366, 431. Review by Supreme Court, 117, 301; Statutes, 373. Forms, 301, 303. Special, 108, 109, 118, 119, 399-303; Statutes, 371, 372, 439. Forms, 300-303. Employed Within the State. (See Capital Stock.) Employees, 101; Statutes, 436, 440, 473, 474; Pen. Law, 471, 473. Endorsement, Corporate, 358, 359. Forms, 258. 488 GENERAL INDEX. [References are to pages.] Endorsement. — Continued. of Instalment Payments, 198. Forms, 198. Enforcement of By-laws, 45. Evidence, Books of Foreign Corporation as, Code, 463, 464. Charter as, 40, 214, 215; Statutes, 364, 365. Stock Book as, 140; Statutes, 369-372, 432; Code, 463, 464. Examination of Records. (See Inspection.) Exchange of Stock for Property, 50, 52, 87, 88, 234-243; Statutes, 436. Forms, 234-243. Preferred for Common Stock, 81; Statutes, 437, 438. Execution of Charter, 30, 38, 39; Statutes, 353, 363. Forms, 214. Contract, 257-259. Forms, 358, 359. Executive Committee, 51, 53, 130, 131. Exemplification of Charter, 40. Exemption from State Taxation, 151, 152, 369; Statutes, 450, 455, 456. (See also Taxation.) Existence of Corporation, 36, 53-61, 75, 98; Statutes, 353, 365, 373-375. Dissolution, 54, 58-61, 100, 101, 123, 134, 307-315. (See also Dis- solution.) Duration, 36, 54, 55; Statutes, 353, 365, 373-375. Extension, 54, 55, 75, 98; Statutes, 373-375. Perpetual if not Specified, 36; Statutes, 365. Renewal, 54, 55, 75, 98; Statutes, 374, 375. When Commenced, 53, 54; Statutes, 353, 363, 373. Expenses of Incorporation, 35, 26, 39, 40; Statutes, 363, 448. (See also Fees and Taxation.) Tables, 335-338. Extension of Corporate Existence, 54, 55, 75, 98; Statutes, 373-375. Face Value. (See Par Value.) Failure to Elect Directors, Effect of, 118; Statutes, 371, 430. False Reports, Penalty for Making, 127-129, 136; Statutes, 433; Pen. Law, 470. Fees and Taxation, 35, 26, 39, 40, 53, 54, 71, 73, 76, 77, 143-165; Statutes, 363, 444-459. (See also Taxation.) Tables, 335-339. Comptroller, 73, 337, 338. County Clerk, 35, 36, 40, 71, 76, 77, 337-339. Secretary of State, 25, 26, 39, 40, 71, 76, 77, 173, 338, 339. GENERAL INDEX. 489 [References are to pages.] Filing and Recording Charter, 39, 40, 53; Statutes, 353, 363, 364, 448. Fees, 25, 26, 39, 40, 335-339; Statutes, 363, 448. Payment of Fees, a Prerequisite, 53, 54; Statutes, 363, 448. Finance Committee, 52, 130, 131. Financial Statement to Stockholders, 100; Statutes, 441, 442. First Meetings. (See also Meetings.) of Directors, 50-52, 234-238, 240. Forms, 235-238, 240-242. of Stockholders, 47-50, 233-240. Forms, 233-239. Foreign Corporation, 170-178, 265-270, 276-281. Actions by and against, 172-174, 178; Statutes, 365, 367, 368; Code, 460, 461, 463-465; Pen. Law, 469. Admission to State, 172, 173, 276-281; Statutes, 367, 368; Pen. Law, 469. Forms, 276-281. Fees, 173, 337, 339. Agent of, 172-174, 276-280; Statutes, 367, 368, 432; Code, 460,464; Pen. Law, 469. Forms, 276-280. Attachment against, 178; Code, 461-463. Authorization to do Business in State, 172, 173. Books, 177, 178; Statutes, 432; Code, 463, 464. Certificate of Authority, 172; Statutes, 367, 368; Pen. Law, 469. Definition, Statutes, 361; Code, 466. Designation of Agent, 172-174, 276-279; Statutes, 367, 368; Code, 464. Forms, 276-279, Doing Business in State, Defined, 170, 171. Liabilities of Officers, Directors, etc., Statutes, 432, 442. Location of Office, 174, 381. Forms, 380, 281. Merger, 71; Statutes, 427. Name, Statutes, 367. Penalties for Doing Business without License, 173, 174; Stat- utes, 449; Pen. Law, 469. Power to Hold Propertj' in State, 174; Statutes, 369. Principal Office in State, 173, 174, 281; Statutes, 367, 368; Code, 460. Forms, 280, 281. Reincorporation of, Statutes, 368, 369. Reports, 178, 365-270; Statutes, 432, 433, 451-453. Forms, 366-270. Sale of Corporate Property to. Statutes, 427. 490 GENERAL INDEX. [References are to pages.] Foreign Corporation. — Continued. Security for Costs, Code, 466. Status, 170, 173. Taxation. (See also Taxation.) Local, 177; Statutes, 445. State, 174-178. License Tax, 174, 175, 178; Statutes, 448, 449. Privilege Tax, 175-178, 265-370; Statutes, 449, 450. Forfeiture of Charter, 55-57, 66, 67; Statutes, 353, 373, 382-392, 455. (See also Dissolution.) By action of Attorney General, 56, 57; Statutes, 382-392. Misuser, 56, 57; Statutes, 386, 387. Non-user, 56. 57; Statutes, 373. Stock for Unpaid Subscriptions, 88, 89; Statutes, 435. Formation of Corporation. (See Incorporation.) Franchise Taxes, 143-152, 175-178, 265-270; Statutes, 449-456. (See also Taxation.) Forms for Reports, 266-270. Table of, 335, 336. Fraud in Formation of Corporation. (See Incorporation.) Full Liability Corporations, 101, 102; Statutes, 354. Full Paid Stock. 87, 101; Statutes, 436. G. General Business Law, 474. Corporation Law, 22; Statutes, 360-420. Tables, 343, 345, 419, 420. General Manager, 132. (See also By-Laws, 231.) Good-Will, Deducted in Assessment for Local Taxation, 158, 163. Included in Assessment for Franchise Tax, 145, 146. Guaranteed Stock. (See Preferred Stock.) Guaranty of Bonds, 68, 69, 98; Statutes, 434. Guardian; Personal Liability as Stockholder, 103; Statutes, 436, 437. H. Holding over of Officers and Directors, 118, 122, 137; Statutes, 371, 430. Holding Its Own Stock, 65; Statutes, 430; Pen. Law, 469. Stock of Other Corporations, 65-67, 157, 162; Statutes, 434, 435. Status of Holding Corporation, 66, 67; Statutes, 435. GENERAL INDEX. 49I [References are to pages.] I. Illegal Provisions in Charter, 30. Incorporation, 19, 20, 37-52, 313-242, 335, 338; Statutes, 352, 353, 363, 364, 448. Forms, 212-242. Certificate of, 27-41; Statutes, 352, 353, 361, 363-365. (See also Certificate of Incorporation.) Expenses of, 25, 26, 39, 40. (See also Expenses.) Fraud in, 30; Statutes, 386; Pen. Law, 468. Incorporators, 27-29, 37-39, 171, 212, 215; Statutes, 352, 363. Cannot take Charter Acknowledgment, 30, 38, 39. Dissolution by, 58; Statutes, 398. Dummy, 28, 39. Frauds by, 30; Statutes, 386; Pen. Law, 468. Number, 27, 28; Statutes, 353. Qualifications, 27, 28; Statutes, 363. Subscriptions, 83, 84; Statutes, 352. Acceptance of, 47. Assignment of, 236, 237. Forms, 236, 237. Increased Stock, 25, 73, 90. Stockholders May Participate in, 73. Increase or Decrease of Capital Stock, 25, 68, 73, 74, 89, 90, 109, 290- 295, 338; Statutes, 438, 439, 448. Forms, 290-294. Number of Directors, 74, 109, 130, 131, 395-398, 338; Statutes, 439, 430. Forms, 295-298. Number of Shares, 74, 82, 338; Statutes, 439, 440. Indemnity Bond, Reissue of Lost Certificate, 87; Statutes, 440, 441. Forms, 205. Injunction, 61; Statutes, 383, 387, 395, 396; Code, 461; Pen. Law, 470. Insolvency. (See Dissolution.) Transfers in Contemplation of, 127; Statutes, 381, 440. Inspection of Books and Records, 99, 100, 111, 112, 123, 141, 142, 177, 178; Statutes, 370, 432; Pen. Law, 470. Inspectors of Election, 43, 113, 115-117, 232, 250-252; Statutes, 370-372, 431; Pen. Law, 471. Forms, 250-252. Appointment, 43, 115, 116, 233, 250. Certificate of, 115, 116, 253, 339. Forms, 251, 252. Duties of, 113, 116, 117. 492 GENERAL INDEX. [References are to pages.] Inspectors of Election. — Continued. Oatll of, 115, 116, 250, 252. Forms, 350, 251. Oatlis Administered by, 113, 117, 399. Forms, 298, 299. Powers, 113, 115-117. Reports, 115, 116, 350, 252, 339. Forms, 251, 252. Instalments, Subscription, 88, 89, 91, 195, 198; Statutes, 435, 436. Forms, 196-198. Issue of Bonds. (See Bond Issues.) Stock, 79, 87, 88, 203; Statutes, 434-436; Pen. Law, 468, 469. (See also Exchange of Stock for Property.) for Inadequate Consideration, 88. Fraud in, 136; Pen. Law, 468, 469, 471, 472. Judicial Supervision of Corporate Officers and Members, Statutes, 381, 382. Labor Law, 473, 474. Laborers' Rights Against Individual Stockholders, 101; Statutes, 436, 440, 473, 474; Pen. Law, 472. Laundering Corporations, Exemption of, 151, 152, 269; Statutes, 450. Forms, 269, 370. Law, Business Corporations, 21, 351-359. Common, 33, 34. Corporation, 19-34, 351-474. (See also Statutes.) Corporations Practicing, 37, 33, 137; Statutes, 352, 353; Pen. Law, 467, 468. General Corporation, 22, 360-420. Penal, 467-473. Stock Corporation, 31, 22, 421-443. Tables, 335-350. Tax, 444-459. Laws, Conflicting, 22; Statutes, 418. Construction of, 22; Statutes, 418. Repealed, Statutes, 359, 418-420, 443, 443. Ledger, Stock, 140-142, 308, 309, 311; Statutes, 369, 370, 373, 431, 433; Pen. Law, 470. (See also Books.) Forms, 310. Legislature, Power to Create Corporations, 19, 20; Statutes, 418. GENERAL INDEX. 493 [References are to pages.] Liabilities of Directors, 136-129, 137; Statutes, 381, 385, 386, 430, 431, 433, 474; Pen. Law, 467-470. False Certificates, 137-129; Statutes, 433; Pen. Law, 470. Foreign Corporations, Statutes, 433, 443. Loans to Stockholders, 138; Statutes, 430, 431; Pen. Law. 469. Negligence, 126, 139. Prohibited Transfers, 127, 139; Statutes, 381, 440. Unauthorized Dividends, 93, 126-128; Statutes, 430; Pen. Law, 469. Officers, 137, 138, 135-137; Statutes, 353, 430-433, 440, 474; Pen. Law, 467-470. Stockholders, 87, 101-103; Statutes, 383, 386, 416, 434, 436-438, 440; Code, 465. Secured on Stock, 93; Statutes, 434. When Stock is Full Paid, 87, 101, 102. When Stock is Part Paid, 103, 103. License Tax on Foreign Corporations, 174, 175, 178; Statutes, 448, 449. (See also Taxation.) Lien, Corporate, on Stock, 92; Statutes, 434. Limitation of Corporate Powers, 37, 33, 34, 37, 38, 63; Statutes, 353, 353, 365, 369; Pen. Law, 467, 468. Stockholders' Liability, 87, 101-103; Statutes, 436, 437. Lists, Subscription, 83-85, 191, 193, 194, 195; Statutes, 435. Forms, 191-195. Loans to Stockholders, 138; Statutes, 430, 431; Pen. Law, 469. Local Tax, 157-165, 177, 371-375; Statutes, 444-447. (See also Taxation; also Reports.) Forms, 271-275. Location of Principal Office. (See Principal Office.) Lost Certificates of Stock, 86, 87, 96, 99; Statutes, 440, 441. Indemnity Bond, 87. Forms, 205. Lost Certificate of Incorporation; Statutes, 364. M. Majority, Powers of. (See Stockholders.) Manufacturing Companies, Tax Exemptions, 151, 152, 269; Statutes, 450. Forms, 269, 270. Meetings, 42, 43, 47-53, 106-117, 129, 130, 233, 256, 287-301. Forms, 333-256. Adjournment, 50, 53, 59. 494 GENERAL INDEX. [References are to pages.] Meetings. — Continued. Calls, 72, 107, 347, 253, 254. Forms, 247, 253. Calls and Waivers, 48, 51, 107, 108, 234, 335, 254; Statutes, 375, 376. Forms, 334, 335, 254. Consent, 47, 48, 50, 51, 72, 107, 108, 129; Statutes, 375, 376. Directors, 38, 43, 50-52, 129, 130, 234-238, 240, 253-356; Statutes, 352, 373. Forms, 235-238, 340-242, 253-256. First, 50-52, 234-238, 340. Forms, 235-238, 240-242. Adjournment, 52. Call and Waiver, 51, 335. Forms, 235. Election of Officers, 51. Exchange of Stock for Property, 52, 87, 88, 234-338, 240-242. Forms, 234-238, 240-242. Minutes, 51, 240-243. Forms, 340-242. Notice of, 51, 235. Place of, 38, 129. Regular, 129, 130. Forms, 255, 256. Special, 129, 130, 353, 254; Statutes, 375, 376. Forms, 353, 354. Minutes of, 48, 51, 238-242. Forms, 238-342, 253, 253, 255, 356. Notice of, 43, 47, 48, 51, 72-75, 98, 99, 107-110, 129, 130, 247-250, 354, 288, 295, 399, 300; Statutes, 375, 376, 439. Forms 347-350, 354, 255, 288, 295, 300. Officers of, 51, 133. Order of Business, 232, 223, 327, 229. Proxies, 112, 113, 130, 233, 244, 346. Forms, 333, 344-246; Statutes, 370, 371. Quorum, 42, 43, 49, 110, 114, 119, 130; Statutes, 366, 372, 373, 429. Record of. (See Minutes.) Stockholders', 42, 43, 47-50, 106-119, 233-240, 344-353, 387-301; Satutes, 366, 369-372, 375, 429, 431. Annual, 42, 43, 106-117, 245, 248-253, 299; Statutes, 429. (See also Annual Meeting; also Election.) Forms, 244, 245, 248-253, 298, 399. GENERAL INDEX. 495 [References are to pages.] Meetings.— Continued. Stockholders. — Continued . First, 47-50, 233-240. Forms, 333-239. Acceptance of Charter, 49. Adjournment, 50, 59. Adoption of By-Laws, 44, 49, 50. Call and Waiver, 47, 48, 234. Forms, 234. Conduct of Meeting, 48. Exchange of Stock for Property, 50, 234-240. Forms, 234-239. Minutes, 48, 238-240. Forms, 238, 239. Notice, 47, 48, 107, 108, 110, 234; Statutes, 375, 376. Organization, 49. Place of, 42, 106, 107. Special, 72, 107-110, 118, 119, 245-248, 287-301; Statutes, 371, 372, 375, 376, 429. Forms, 245-248, 287-301. Voting at, 98, 99, 111-119, 130; Statutes, 369-373; Pen. Law, 471. (See also Voting.) Waivers of Notice, 47, 48, 51, 72, 107, 108, 234, 235, 254; Statutes, 375, 376. Forms, 234, 235, 254. Membership, Statement of, 119, 300, 301; Statutes, 372. Forms, 300. Merger, 71; Statutes, 427. Fees, 339. Mining Companies, Exemption of, 151, 153, 269; Statutes, 450. Forms, 269, 270. Minority. (See Protection of.) Minutes, 48, 51, 238-242. Forms, 238-242, 252, 253, 355, 256. Certified, 260, 261. Forms, 260. Directors', 51, 240-242. Forms, 240-243, 255, 356. Stockholders', 48, 238-240. Forms, 238, 239, 252, 253. Misconduct at Elections, 115, 117; Pen. Law, 471. of Directors, Officers and Employees, 126-129, 135-137; Pen. Law, 469, 470. (See also Liabilities.) Misdemeanor, Penalty When Not Otherwise Provided, Pen. Law, 472. 496 GENERAL INDEX. [References are to pages.] Monopolies, Statutes, 427, 474. Mortgages, 67, 68, 97, 330-334, 339; Statutes, 415, 423-426. (See also Bond Issues.) Exempt from Local Taxation, 158, 163. Foreclosure, Statutes, 415, 434-426. Recorded, Evidence of Stockholders' Consent, Statutes, 433. N. Name, Corporate, 31, 32, 75, 76, 215, 281-284; Statutes, 353, 363, 364, 367; Pen. Law, 469-471. Change of, 33, 75, 76, 381-284; Statutes, 376-379. Forms, 281-284. Unlawful Use of, Pen. Law, 470. New York City, Local Taxation, 164, 165, 169, 373-375. Form of Tax Report, 373-275. Non- Voting Stock, 112; Statutes, 369, 370. Notice of Directors' Meetings, 51, 129, 130, 254; Statutes, 375. Forms, 354, 255. Dividends, 319. Forms, 318, 319. Special Elections, 118, 299, 300; Statutes, 371, 372, 429. Forms, 300. Stockholders' Meetings, 43, 47, 48, 72-75, 98, 99, 107-110, 247-250, 388, 395, 300; Statutes, 375, 376, 429, 438. Forms, 247-250, 288, 295, 300. Publication of, 72-75, 108-110, 248-250, 288, 300; Statutes, 439. Forms, 249, 250, 381, 382, 288, 319. Waiver of, 47, 48, 51, 73, 107, 108, 234, 335, 254; Statutes, 375, 376. Forms, 234, 335, 354. Number of Directors, 36, 37, 74, 130, 395-298; Statutes, 353, 429, 430. Change of, 74, 109, 130, 121, 295-298; Statutes, 429, 430. Forms, 295-298. Incorporators, 27, 38; Statutes, 353. Shares, Change of, 74, 83; Statutes, 439, 440. O. Oath of Challenged Stockholder or Proxy, 113, 117, 119, 299, 300; Statutes, 371. Forms, 298-300. Inspectors of Election, 115, 116, 350, 253; Statutes, 431; Pen. Law, 471. Forms, 350, 251. GENERAL INDEX. 497 [References are to pages.] Office, Principal, 36, 74, 75, 107, 139, 158, 169, 173, 174, 177, S15. Change of Location, 74, 75, 281, 285-287; Statutes, 436, 437. Forms, 280, 281, 385-387. Location of, 36, 158, 169, 315; Statutes, 352, 361. of Foreign Corporation, 173, 174, 381; Statutes, 367, 368; Code, 460. Forms, 380, 381. Officers, 43, 51, 63, 63, 137, 138, 133-138; Statutes, 366, 375, 381, 382, 431, 433. (See also By-Laws, 323, 327-231.) Appointment of, 62, 63, 132; Statutes, 366, 431. Bond of, 133; Statutes, 431. Compensation, 138. Duties, 43, 132; Statutes, 375, 431. Election of, 51, 62, 63, 133; Statutes, 366, 431. Essential, 132. Liabilities of, 127, 128, 135-137, 178; Statutes, 353, 430-433, 440, 473, 474; Pen. Law, 467-470. of Meetings, 51, 133. Powers, 43, 133-135; Statutes, 431. President. (See President.) Qualifications, 133, 133; Statutes, 431. Removal, 137; Statutes, 381, 415, 416, 431. Resignation, 137, 138. Salaries, 138. Secretary. (See Secretary.) Signatures, 136, 357-359. Forms, 257, 258. Tenure of Office, 137, 138; Statutes, 431. Treasurer. (See Treasurer.) Vacancies, 137, 138. (See also By-Laws, 233, 338.) Vice-President, 133, 237, 339. Order of Business. (See By-Laws, 333, 323, 337, 229.) Order, Voluntary Dissolution, 61; Statutes, 394-397. Forms, 310, 311, 314, 315. Organization of Corporation, 25-52, 212-343; Statutes, 352, 353, 363, 364, 448. (See also Certificate of Incorporation.) Forms, 313-242. Fees and Expenses of, 25, 26, 39, 40, 335-339. First Meetings, 47-52, 233-242. (See also Meetings.) Frauds in Organization, 30; Statutes, 386; Pen. Law, 468. Tax, 25, 26, 39, 40, 77; Statutes, 363, 448. Table of, 335, 336. 49^ GENERAL INDEX. [References are to pages.] Paid Up Stock, 87, 101, 102; Statutes, 436. Partly Paid Stock, Certificate of, 86; Statutes, 436, 437. Par Value of Stock, 85, 83, 83; Statutes, 353, 439, 440. Issue for Less than, 86, 88; Statutes, 436, 437. Patents and Copyrights, Deducted in Assessment for Local Taxation, 158, 163. Included in Assessment for Franchise Tax, 145. Pajrment for Stock in Property. (See Exchange of Stock for.) Payment of Capital Stock, 78, 88, 89, 91, 93, 334-343, 363, 364; Statutes, 853, 358, 435-437. Forms, 284-343, 368, 364. Subscriptions, 88, 89, 91, 195, 198, 199; Statutes, 435. Payment of Taxes and Penalty for Failure; Statutes, 458-455. (See Taxation.) Penal Law, 467-473. Table, 350. Personalty, Taxation of, 157-165; Statutes, 444-447. (See also Taxa- tion.) Petition for Voluntary Dissolution, 60, 61; Statutes, 393-394. Forms, 307-309. Place of Assessment of Personalty, 139, 158; Statutes, 444, 445. Place of Business. (See Office.) Pleadings, Code, 461. Pledgee of Stock, 103; Statutes, 370, 436, 437. Pledgeor of Stock, 103; Statutes, 436, 437. Right to Vote, 111; Statutes, 370. Political Contributions Forbidden, 77, 137; Statutes, 376. Powers of Corporations, 37, 33, 34, 87, 38, 60-77; Statutes, 852, 353, 365- 367, 369; Pen. Law, 467, 468. (See also Amendment of Charter.) Banking Powers Prohibited, 21, 33; Statutes, 853, 364, 369. Limitations on, 83, 34, 37, 38, 63; Statutes, 353, 353, 865, 369. Practice of Law Prohibited, 37, 33, 137; Statutes, 853, 358; Pen. Law, 467, 468. to Acquire Property outside State, 64, 65; Statutes, 366, 367. to Amend Charter, 73-77; Statutes, 364. to Appoint Directors, Officers and Agents, 63, 63; Statutes, 366. to Borrow Money, 67, 68; Statutes, 422, 424. to Buy, Sell and Hold Property, 64, 65; Statutes, 366, 369. to Condemn Land; Statutes, 858, 359. to Consolidate, 69-71, Statutes, 854-857. to Do Business in Other States, 69; Statutes, 366, 367. to Exchange Preferred for Common Stock, 81; Statutes, 437, 488. GENERAL INDEX. 499 [References are to pages.] Powers of Corporations. — Continued. to Extend Existence, 54, 55, 75; Statutes, 373-375. to Guarantee Bonds, 68, 69, 98; Statutes, 434. to Have a Seal, 63; Statutes, 365. to Have Succession, 63; Statutes, 365. to Hold Its Own Stock, 65; Statutes, 430. Other Stock, 65-67, 157, 162; Statutes, 434, 435. to Issue Bonds, 67, 68; Statutes, 423. (See also Bond Issues.) to Issue Partly Paid Stock, 86; Statutes, 437. to Issue Preferred Stock, 34, 75, 79-83; Statutes, 353, 437, 438. to Make By-Laws, 63; Statutes, 366. (See also By-Laws.) to Merge, 71; Statutes, 427. to Mortgage Property, 67, 68; Statutes, 433-426. to Sell Entire Property and Franchise, 98; Statutes, 427, 438. to Sue and Be Sued, 20. Ultra Vires Acts, Effect of, 33, 34, 77. Powers of Directors, 38, 44, 46, 104, 122-124; Statutes, 366, 373, 375, 376. Officers, 43, 133-135; Statutes, 431. Stockholders, 44, 45, 96-101, 104, 105, 111, 113. Powers of Supreme Court Respecting Elections, 117; Statutes, 373. Preferred and Deferred Causes. (See Actions.) Preferred Claims, Laborers' Wages, 101; Statutes, 436, 440, 473, 474; Pen. Law, 472. Preferred Stock, 34, 35, 75, 79-82, 203, 288-390, 393-295; Statutes, 352, 437, 438. Certificate of, 85, 86, 303. Forms, 302. Creation after Organization, 34, 35, 75, 81, 388-390, 393-295; Stat- utes, 437, 438. Forms, 288-290, 293-394. Dividends on, 80, 81, 94. Exchange of for Common, 81; Statutes, 437, 438. Redemption of, 81, 83; Statutes, 437, 438. Rights of Holders of, 80, 81. Voting Rights, 81, 113. President, 132-135; Statutes, 431. (See By-Laws, 223, 237-239.) Call for Special Meeting, 107. Forms, 353. Certification by. Forms, 283, 389, 290, 294, 397, 305. Qualifications, 132, 133; Statutes, 431. Signature, 136, 357-259. Forms, 257, 258. 500 GENERAL INDEX. [References are to pages.] Principal Office. (See Office.) Privilege Tax on Foreign Corporations, 175-178; Statutes, 449, 450. Profits, Officers' Improper, 135, 136. Property for Stock, (See Exchange of Stock for Property.) Assignment of, 127, 139, 136; Statutes, 381, 440. Forms, 242, 243. Power to Hold, 64, 65, 174; Statutes, 366, 369. Sale of Entire, 98; Statutes, 427, 428. Taxation of. (See Taxation.) Protection of Minority, 105, 114, 115, 315-317. Proxies, 112, 113, 130, 233, 244-246; Statutes, 370, 371. Forms, 233, 344-346. Expiration of, 112, 113, 246; Statutes, 371. for Annual Meeting, 344, 245. Forms, 344, 345. for Special Meeting, 245, 346. Forms, 245, 346. for Specific Action, 246. Forms, 245, 246. Oath of, 113, 399; Statutes, 371. Forms, 299. Revocation of, 112, 113, 346; Statutes, 371. Forms, 246. Publication Notice of Meetings, 72-75, 108-110, 248-250, 388, 300; Stat- utes, 439. Forms, 349, 350, 381, 282, 288. Purposes, Charter, 33, 34, 215; Statutes, 352, 353. (See Certificate of Incorporation.) Additional, 73; Statutes, 438. Qualification of Directors, 37, 43, 121; Statutes, 373, 439, 435. Incorporators, 27, 38; Statutes, 363. Officers, 132, 133; Statutes, 431. Voters at Corporate Meetings, 111; Statutes, 369-373. Quorum at Annual Meeting, 42, 49, 110, 114; Statutes, 429. Directors' Meetings, 43, 130; Statutes, 373, 375. Stockholders' Meetings, 42, 49, 110, 114, 119; Statutes, 366, 372, 439. R. Ratification of Unauthorized Action, 129. Realty, Taxation of, 146, 157, 159-161, 163, 169; Statutes, 444, 445. GENERAL INDEX. 5OI [References are to pages.] Receipts for Subscription Payments, 195, 198, 199. Forms, 196-200. Receivers of Corporations, 61, 179-190; Statutes, 383-385, 387-392, 400- 418, 425, 426, 435, 436; Pen Law, 473. Forms, 314, 315. Accounting,- 189, 190; Statutes, 410-412. Accounts of, 186, 187; Statutes, 384, 406. Application for, 61 ; Statutes, 384, 385, 895. Appointment of, 61, 179, 180; Statutes, 383, 384, 387, 397, 415. Forms, 314, 315. Attorney General, Service on, 60, 61, 182, 186; Statutes, 406, 417. Bond of, 180; Statutes, 401. Care of Funds, 186; Statutes, 401, 417. Collection of Assets, 182-185; Statutes, 401-409, 435, 436. Conversion of Estate into Money, 185, 186; Statutes, 402, 403, 406. Death of, 190; Statutes, 402, 411. Disbursements, 187, 188; Statutes, 408, 473. Distribution of Assets, 186-188. Creditors' Meetings, 186, 187; Statutes, 407, 408. Dividends, 187, 188; Statutes, 409-411. Order of Distribution, 187, 188; Statutes, 408-410. Proof of Claims, 187; Statutes, 414. Employment of Counsel, 181, 182; Statutes, 405. Fees of, 188, 189; Statutes, 412, 413. Injunction, Allowance, 61; Statutes, 383, 387, 395,396; Code, 461. Interested Parties may be Appointed as, Statutes, 397. Liability of, Statutes, 397. Notice to Creditors, 181; Statutes, 397, 407. Oath of, 180; Statutes, 402. of Moneyed Corporations, Statutes, 388-392. Permanent, 179, 180; Statutes, 384, 397. Powers and Duties, 181-190; Statutes, 383, 384, 397, 400, 413. Removal of, 190; Statutes, 411, 416, 417. Reports, 187; Statutes, 406, 407. Resignation of, 190; Statutes, 411, 412. Sales of Property, 185, 186; Statutes, 402, 403. Temporary, 179; Statutes, 383, 384, 395. Title to Property Administered, 182; Statutes, 401. Vacancies, 190; Statutes, 402, 411. Recorded Mortgage Evidence of Stockholders' Consent; Statutes, 423. Recording Certificate of Incorporation, 39, 40; Statutes, 352, 363, 448. Fees, 25, 26, 39, 40; Statutes, 363. Tables, 335-338. Records, Corporate. (See Books; also Minutes.) 502 GENERAL INDEX. [References are to pages.] Redemption of Preferred Stock, 81, 82; Statutes, 437, 438. Reduction of Capital Stock. (See Decrease.) Number of Directors. (See Decrease.) Number of Shares. (See Decrease.) Referee, 311-314. Forms, 311-314. Regular Meetings. (See Meetings.) Relations of Stockholders, 96, 103, 104, 124, 125. Removal of Directors, 38, 123; Statutes, 381, 415, 416; Code, 465. Officers, 137; Statutes, 381, 415, 416, 431. Renewal of Corporate Existence, 54', 55, 75, 98; Statutes, 374, 375. Reorganization of Existing Corporation, 25,26,69-71; Statutes, 353, 363, 364, 424-436. Repeal of By-Laws, 45, 46. Reports, 166-169, 177, 178, 263-275. Forms, 263-275. Annual, 166, 167, 264, 265, 339; Statutes, 433, 433. Forms, 265. Comptroller's. (See Reports, Tax.) Franchise Tax. (See Reports, Tax, to State Comptroller.) Foreign Corporations, 178, 265-270; Statutes, 432, 433, 451-453. Forms, 266-270. Inspectors of Election, 115, 116, 250, 252, 339; Statutes, 431. Forms, 251, 252. Liability for False Report, 127-139, 136; Statutes, 433; Pen. Law, 470. Stock Exchanged for Property must be so Reported; Statutes, 436. Tax, to Local Assessors, 168, 169, 177, 271-275; Statutes, 446. Forms, 271-275. New York City, 164, 165, 169, 273-275. Forms, 373-275. Penalty for Failure to Make, Statutes, 446. Tax, to Comptroller, 153, 167, 168, 178, 265-270; Statutes, 451-453. Forms, 366-370. Execution of, 268. Foreign Corporations, 178, 265-269; Statutes, 451-453. Forms, 266-370. Manufacturing Corporations, 152, 269, 270. Forms, 369, 270. Penalty for Failure to Make, 168, 368, 269; Statutes, 453. Supplemental Reports, 168, 169; Statutes, 452. When Filed, 268. GENERAL INDEX. S03 [References are to pages.] Resignation of Director or Officer, 137, 138. Resolutions, 337, 238, 261, 263, 330, 332. Forms, 337, 238, 361, 262, 281, 318, 330, 323. Certified, 261, 262. Forms, 261, 262. Restrictions upon Commencement of Business, 53, 54; Statutes, 353, 363. Voting, 113; Statutes, 369, 370. Review of Election, 117, 301; Statutes, 372. Forms, 301, 302. Revocation and New Designation of Agent, 379, 380; Statutes, 367, 368; Code, 460. Forms, 279, 280. Revocation of Agent's Consent, 173, 380; Statutes, 367, 368; Code, 460. Forms, 380. Proxy, 112, 113, 246; Statutes, 371. Forms, 246. Rights of Stockholders, 60, 71, 73, 86, 87, 96-101, 104, 105, 111, 113, 141, 142, 177. Collective, 96-98. Individual, 98-101. Not Dependent on Stock Certificate, 86, 87. Participation in Increased Stock, 73. Voting, 98, 99, 111, 112, 116, 117; Statutes, 369-372; Pen. Law, 471. Rules of Comptroller as to Transfer Tax, 154-156. Salaries of Directors, 122, 138. Officers, 138. Sale of Franchise and Property, 98; Statutes, 427, 428. Rights of Non-consenting Stockholders, Statutes, 428. Schedule of Laws Repealed, 359, 419, 420, 443. Scrip, Instalment, 198. Forms, 197, 198. Seal, 63; Statutes, 365, 434. Attestation of, 258. Forms, 258. Secretary, 132. (See By-Laws, 233, 225-330.) Books of, 139-143. (See also Books.) Certificate of, 360-262, 278. Forms, 260-262, 278, 285, 289-291, 294-297, 305, 306. Duties, 63, 91-93, 113, 114, 306, 308, 258; Statutes, 353, 431, 433, 434. 504 GENERAL INDEX. [References are to pages.] Secretary. — Continued. Duties. — Continued. Affixing Seal, 63. Attestation of Seal, 358. Closing Stock Books, 113, 114. Transfer of Stock, 91-93, 205, 206, 208. Signature, 136, 257-259. Forms, 258. Service on Corporations, Statutes, 367, 368; Code, 460, 466. Shares of Stock, 35, 74, 83. (See also Stock.) Change of Number, 74, 82; Statutes, 439, 440. Par Value, 35, 83, 83; Statutes, 353, 439, 440. Signatures, Corporate and Official, 136, 257-259. Forms, 257, 258. to Stock Certificates, 85, 301. Forms, 301, 303. Special Meetings, 73, 107-110, 118, 119, 139, 130, 345-248, 353, 354, 387- 301; Statutes, 371, 372, 375, 376, 429. Forms, 245-248, 253, 254, 387-301. Statute Requirements for Calling, 72, 107-110. to Elect Directors, 108, 109, 118, 119, 299-303; Statutes, 371, 372, 439. Forms, 300-303. Special Provisions in Charter, 37, 38, 213; Statutes, 352, 365. Classification of Stock, 34, 35, 79-82; Statutes, 352, 437, 438. Corporate Stockholding, 65-67; Statutes, 434, 435. Cumulative Voting, 114, 115; Statutes, 370. Stamp Tax on Stock Transfers, 153-156; Statutes, 456-459. Standing Committees, 51, 52, 130, 131. Statement of Financial Condition, 100; Statutes, 441, 442. of Membership, 119, 300, 301; Statutes, 373. Forms, 300. to Secure Exemption from Taxation, 153. Forms, 369, 370. State Taxation, 143-156, 174-178, 365-270; Statutes, 447-459. (See also Taxation.) Forms, 366-370. Statutes, 19-33, 351-474. Business Corporations Law, 21, 351-359. Classification of, 20-23. Code of Civil Procedure, 460-466. General Corporation L,aw, 33, 360-430. Miscellaneous, 336, 337, 473, 474. Penal Law, 467-473. GENERAL INDEX. 505 [References are to pages.] Statutes. — Continued. Stock Corporation Law, 31, 33, 431-443. Tax Law, 444-459. Stay in Action CoUusively Brought; Statutes, 373, 373. Steam Corporations; Statutes, 357, 358. Stock. (See Separate Subjects for Detailed and Statutory References.) Assignment of, 91-93, 99, 304, 306, 308, 336, 337. Forms, 304, 206, 307, 336, 337. in Blank, 91, 92, 204. Forms, 304. Book, 111, 113, 114, 116, 117, 119, 140-143, 177, 178, 308, 309, 311. (See also Books, Corporate.) Forms, 310. of Foreign Corporation, 177, 178. Capital, 34, 35, 44, 78-95. (See also Capital Stock.) Certificates of, 85-87, 96, 99, 199-305. Forms, 200-204. Classification of, 34, 35, 75, 79-83, 388-390, 392-395. Forms, 288-390, 292-394. Common, 79, 80, 203. Forms, 201. Consideration for Issue, 87, 88; Statutes, 436. Conversion of Bond into, 68, 98; Statutes, 432. Corporations Holding, 65-67, 157, 162; Statutes, 430, 434, 435; Pen. Law, 469. Decrease of, 73, 74, 89, 90, 109. Forms, 290-394, Dividends on, 93-95, 99, 126-138, 147-151, 319. Forms, 318, 319. Donation to Treasury, 336. Exchange for Property, 50, 52, 87, 88, 234-243. Forms, 334-243. Forfeiture of, 88, 89. Fraudulent Issue, 136; Pen. Law, 468, 469, 471, 472. Full Paid, 87, 101. Increase of, 25, 68, 73, 74, 89, 90, 109, 290-295. Forms, 290-394. Issue of, 79, 87, 88, 303. (See also Exchange of Stock for Prop- erty.) Ledger, 111, 113, 114, 116, 117, 119, 140-143, 177, 178, 308, 209, 311. Forms, 210. Lien on. Corporate, 92; Statutes, 434. Minimum Amount, 34, 35, 79. 5o6 GENERAL INDEX. [References are to pages.] Stock, — Continued. Non-Voting, 112. Partly Paid, 86. Par Value, 35, 82, 83. Payment of, 78, 88, 89, 91, 92, 263, 264. Forms, 263, 264. Preferred, 34, 35, 75, 79-82, 203, 288-290, 292-295. Forms, 202, 288-290, 292-294. Shares of, 35, 74, 82. Subscription to, 37, 83-85, 191-200, 215. Forms, 191-200. Transfer of, 44, 91-93, 99. 204-208, 236, 237, 339. Forms, 204, 206, 207, 236, 237. Transfer Tax, 153-156. (See Taxation.) Unissued, 78, 79. Stock Books. (See Books, Corporate.) Stock Corporation Law, 21; Statutes, 421-443. Table, 346, 347, 443. Stockholders, 96-105. Actions by or against, 96-104, 126; Statutes, 383, 385, 386, 393, 416, 435-438, 440; Code, 465. Consent of, 72, 106. (See also Consent of Stockholders.) Creation of Relation, 96. Liabilities of, 87, 101-103; Statutes, 385, 386, 416, 436-438, 440; Code, 465. Secured on Stock, 92; Statutes, 434. When Stock is Full-paid, 87, 101, 102. When Stock is Part-paid, 102, 103. List of, to be kept, 140; Statutes, 431, 432. Loans to. Prohibited, 128; Statutes, 430, 431; Pen. Law, 469. Majority, Powers of, 104, 105. Meetings of. (See Meetings.) Oath, 117, 119, 299, 300; Statutes, 371. Forms, 298-300. of Record, 111, 112; Statutes, 369, 370. Powers, 44, 45, 96-101, 104, 105, 111, 112. Relations of, 96, 103, 104, 124, 125. Rights, 60, 71, 73, 86, 87, 96-101, 104, 105, 111, 112, 141, 142, 177. (See also Rights of Stockholders.) Statement of Membership, 199, 300, 301; Statutes, 372. Forms, 300. Transfers of Property to, 127; Statutes, 440. Who are; Statutes, 361. Stock Transfer Tax, 153-156; Statutes, 456-459. GENERAL INDEX. 507 [References are to pages.] Subscription to Stock, 37, 83-85, 191-200, 215; Statutes, 352, 385, 435, 436; Pen. Law, 468. Forms, 191-200. Acceptance of, 47, 83, 84. After Incorporation, 84, 85, 195; Statutes, 435. Forms, 194, 195. Agreements, 83, 84, 191, 192, 194, 195. Forms, 191-195. Assignment of, 236, 237. Forms, 236, 237. Blanlcs, 191, 193, 194, 195. Forms, 191-195. Forfeiture of Stock for Non-Payment, 88, 89; Statutes, 435. Lists, 83-85, 191, 193, 194, 195. Forms, 191-195. Payment of, 88, 89, 91, 195, 198, 199. Receipts for, 195, 198, 199. Forms, 196-200. Ten Per Cent. Must Accompany, 84, 85; Statutes, 435. Subscribers to Certificate, 37, 215; Statutes, 352. (See also Incorpora- tors.) Suit. (See Actions.) Summons. How Served; Statutes, 367, 368; Code, 460, 466; Pen. Law, 469. Supreme Court, Review of Election, 117, 301; Statutes, 372. Surplus, Taxation of, 144, 162; Statutes, 446. When Exempt from Taxation, 157, 163; Statutes, 446. Tables, 335-350. Comparative Section References, 343-350. Business Corporations Law, 343. Code of Civil Procedure, 349, 350. General Corporation Law, 343-345. Penal Law, 350. Stock Corporation Law, 346, 347. Tax Law, 348. Corporate Calendar, 340-343. Fees, General Schedule, 338, 339. Fees to Comptroller, 337. Fees to County Clerk, 337. Fees to Secretary of State, 336, 337. 508 GENERAL INDEX. [References are to pages.] Tables. — Continued. Laws Repealed, Business Corporations, 359. General Corporation, 418-420. Stock Corporation, 443. Organization Expenses and Franchise Tax, 335, 336. Taxation, 25, 26, 39, 40, 143-165, 174-178, 265-275; Statutes, 444-459. Forms, 266-275. Annual Franchise Tax, 143-152, 175-178, 265-269; Statutes, 449- 456. Forms, 266-270. Table, 335, 336. Appraisal of Stock, 148-151, 267, 268, 269; Statutes, 451, 452. Forms, 267, 268. Basis for, 143, 144. Capital Employed in State, 143-152, 174-177; Statutes, 448, 449. Classification for, 147-151; Statutes, 449, 450. Collection of; Statutes, 454, 455. Comptroller's Powers, 147, 167, 168; Statutes, 452-455. Date of Assessment, 167. Deductions, 145, 146. Exempt Corporations, 151, 152; Statutes, 450. Foreign Corporations, 175-178, 265-269; Statutes, 449, 450. Good-Will, Value Included, 145, 146. Manufacturing Companies, 151, 152, 269; Statutes, 450. Forms, 269, 270. Notice of Amount, 340; Statutes, 453. Patents and Copyrights, Value Included, 145. Payment of, 340; Statutes, 453. Penalties for Non-Payment, Statutes, 453-455. Personal Property, Exempt from Other State Taxation, Statutes, 455, 456. Reports, 152, 167, 168, 265-269; Statutes, 451-453. (See also Reports.) Forms, 266-270. Surplus Not Included, 144. Table of, 335, 336. United States Bonds, Value Included, 145. When Dividends are Less than 6%, 149-151. When Dividends are Not Less than 6%, 148. When No Dividends are Paid, 148, 149. GENERAL INDEX. SO9 [References are to pages.] Taxation. — Continued. License Tax, Foreign Corporations, 174, 175, 178; Statutes, 448, 449. Local Tax, 157-165, 177, 371-375; Statutes, 444-447. Forms, 271-375. Assessment, 158-165, 371-375; Statutes, 446, 447. Date of, 164, 168, 169. in New York City, 164, 165, 169, 272. Manner of, 158, 159, 164, 165, 371-375. Place of, 139, 158; Statutes, 445. Deductions, 157-163, 177; Statutes, 445, 446. Exemption, 157-163; Statutes, 445. Foreign Corporations, 177; Statutes, 445. on Personalty, 157-165. on Realty, 157, 159-161; Statutes, 444, 445. Reports, 168, 169, 177, 371-375; Statutes, 446. (See also Reports.) Forms, 271-375. Special Franchises, 165. Stockholders Not Taxed on Stock, Statutes, 445. Surplus or Reserve, 162. Tax District, 157; Statutes, 444, 445. Organization Tax, 35, 36, 39, 40, 77; Statutes, 448. Table of, 335, 336. Privilege Tax, Foreign Corporations, 175-178, 365-370; Statutes, 449, 450. Stock Transfer Tax, 153-156, 339; Statutes, 456-459. Comptroller's Rules, 154-156. Tax District, 157. (See Taxation.) Tax Law, 23; Statutes, 444-459. Table, 348. Transcript, Certified, from By-Laws, 363. from Minutes, 360, 261. Forms, 260. Rasolution, 261, 363. Forms, 361, 362. Transfer Agent, 114. of Foreign Corporation, 177; Statutes, 432. Transfer Book, 306, 308. Forms, 306, 207. Closing, 111, 113, 114; Statutes, 369, 370. Transfer of Stock, 44, 91-93, 99, 304-208, 336, 337; Statutes, 366, 433, 434, 456-459; Pen. Law, 469, 471, 473. Forras, 204, 306, 307, 336, 237. 5IO GENERAL INDEX. [References are to pages.] Transfer of Stock. — Continued, in Blank, 91, 93, 204. Forms, 304. Tax on, 153-156, 339; Statutes, 456-459. Transfer Tax, 153-156, 839; Statutes, 456-459. Transfers in Contemplation of Insolvency, 137; Statutes, 440. Treasurer, 133, 133. (See also By-Laws, 223, 224, 228-231.) Affidavit, 259, 260. Forms, 260, 305. Bond of, 133. Endorsement of, 258, 259. Forms, 258. Signature, 136, 257-259. Forms, 258. Statement of, 100; Statutes, 441, 442. Treasury Stock, 236; Statutes, 430. (See also By-Laws, 325.) Trustee, Certificate of, 325. Forms, 325. Not Personally Liable, 103; Statutes, 436, 437. Trustees, Directors, on Dissolution, 60, 123, 124; Statutes, 373. Trusts, Voting, 105, 315-317; Statutes, 370, 371. Forms, 315-317. U. Ultra Vires, 33, 34, 77; Statutes, 365. Unissued Stock, 78, 79. United States Securities, Excluded From Local Tax, 157, 163. Included in Franchise Tax, 145. V. Vacancies, Directors, 119, 121; Statutes, 439, 430. (See also By-Laws, 223, 337.) Officers, 137, 138. (See also By-Laws, 223, 228-231.) Verification of Pleadings, Statutes, 461. Vice-President, 133. (See also By-Laws, 223, 227, 229.) Voluntary Dissolution, 60, 61; Statutes, 392-397. (See also Dissolution.) Forms, 307-315. Voting, 98, 99, 111-117, 119, 130, 299, 300; Statutes, 369-373. (See also Election.) Challenges, 113, 116, 117, 399; Statutes, 371. Cumulative, 114, 115; Statutes, 370. Identification for, 111, 112, 116, 117, 119, 300; Statutes, 369, 370, 372. GENERAL INDEX. SII [References are to pages.] Voting. — Continued. Oath, when Challenged, 113, 117, 119, 399, 300; Statutes, 371. Forms, 298-300. Preferred Stock, 81, 113. Proxies, 113, 113, 130, 233, 344-246; Statutes, 370, 371. Forms, 333, 244-346. Restrictions on, 112; Statutes, 369, 370. Right to Vote, 98, 99, 111, 113, 116, 117; Statutes, 369-373. Books, Evidence of. 111, 113, 116, 117; Statutes, 369, 370, 373. Sale of Vote Prohibited, 109, 113; Statutes, 370; Pen. Law, 471. Voting Trusts, 105, 315-317; Statutes, 370, 371. Forms, 315-317. W. Wages and Laborers, 101; Statutes, 436, 440, 473, 474; Pen. Law, 472. Waiver of Notice, 47, 48, 51, 72, 107, 108, 334, 235, 354; Statutes, 375, 376. Forms, 234, 235, 254. Water Companies, Statutes, 358. 1 ■ . ■ !■ ' ;■;.,.,■:■ |::.: fe:: 1 .i: ■'-■'■